<PAGE> 1
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:
/X/ Preliminary proxy statement
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UJB FINANCIAL CORP.
(Name of Registrant as Specified in Its Charter)
UJB FINANCIAL CORP.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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 transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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 registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
March 11, 1994
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of UJB
Financial Corp. scheduled to be held on Monday, April 25, 1994, at 2:30 p.m. at
The Hyatt Regency Princeton, 201 Carnegie Center, Route 1 at Alexander Road,
Princeton, New Jersey. Your Board of Directors and senior management look
forward to personally greeting those shareholders able to attend.
At the meeting, shareholders will be asked to elect five directors and to
approve an increase in UJB Financial's authorized shares. Shareholders will also
be asked to ratify the selection of KPMG Peat Marwick, independent certified
public accountants, to audit the accounts of UJB for 1994 and to vote on three
shareholder proposals, if presented to the meeting. We will also report to you
on UJB's current operations and outlook. Members of the Board and management
will be available to respond to any questions you may have.
Regardless of the number of shares you own, it is important that they be
represented and voted at the meeting. Please sign, date and mail the enclosed
proxy in the return envelope provided. Your prompt cooperation is appreciated.
On behalf of your Board of Directors, thank you for your continued support.
Sincerely,
T. JOSEPH SEMROD
<PAGE> 3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MONDAY, APRIL 25, 1994
TO OUR SHAREHOLDERS:
The Annual Meeting of the shareholders of UJB Financial Corp. is scheduled
to be held at The Hyatt Regency Princeton, 102 Carnegie Center, Route 1 at
Alexander Road, Princeton, New Jersey, on Monday, April 25, 1994 at 2:30 p.m.
for the following purposes:
1. To elect five Directors.
2. To approve an amendment to the Restated Certificate of Incorporation of
UJB Financial Corp. increasing authorized Common Stock from 65 million to
130 million shares.
3. To ratify the selection of KPMG Peat Marwick, independent certified
public accountants, to audit the consolidated financial statements of UJB
Financial Corp. and its subsidiaries for the year ending December 31,
1994.
4. To consider and vote on a shareholder proposal relating to cumulative
voting.
5. To consider and vote on a shareholder proposal relating to confidential
voting.
6. To consider and vote on a shareholder proposal relating to management
compensation.
7. To transact such other business as may properly come before the meeting
and any adjournment thereof.
The Board of Directors by resolution has fixed the close of business on
February 25, 1994 as the record date and hour for the determination of
shareholders entitled to notice of, and to vote at, the Annual Meeting and at
any adjournment thereof.
It is important that your shares be represented and voted at the Annual
Meeting. Whether or not you plan to attend, please sign, date and promptly mail
the enclosed white Proxy. Please act today.
By order of the Board of Directors,
RICHARD F. OBER, JR.
Secretary
March 11, 1994
PLEASE SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED WHITE PROXY IN THE
POSTAGE-PAID ENVELOPE PROVIDED. IF YOU PLAN ON ATTENDING THE ANNUAL MEETING
PLEASE SO INDICATE ON YOUR PROXY.
IMPORTANT NOTICE: ALL SHAREHOLDERS PLANNING TO ATTEND THE ANNUAL MEETING
SHOULD REFER TO THE BACK COVER FOR DIRECTIONS TO THE ANNUAL MEETING SITE AND FOR
IMPORTANT INFORMATION REGARDING PROCEDURES FOR ADMITTANCE TO THE ANNUAL MEETING.
<PAGE> 4
PROXY STATEMENT
The mailing address of the corporate headquarters of UJB Financial Corp.
("UJB") is P.O. Box 2066, Princeton, New Jersey 08543-2066, and the telephone
number is (609) 987-3200.
This Proxy Statement and the enclosed proxy are being sent to shareholders
on approximately March 11, 1994. A copy of the 1993 Annual Report to
Shareholders, including financial statements, is enclosed.
The following information is furnished in connection with a solicitation of
proxies by the Board of Directors for the Annual Meeting. Except for matters
described in this Proxy Statement and any proposals which have been omitted
pursuant to Rule 14a-8 of the Securities and Exchange Commission ("SEC"), the
Board of Directors does not know of any matter that will or may be presented at
the Annual Meeting. With respect to any such omitted proposals and proposals not
known to the Board of Directors, the persons named as proxies intend to vote the
shares they represent in accordance with their judgment.
A white proxy card is enclosed. Your vote is important and you are
encouraged to return it by mail today. Each proxy submitted will be voted as
directed; however, if not otherwise specified, proxies solicited by the Board of
Directors will be voted for the Director nominees named herein, for the second
and third proposals and against the fourth, fifth and sixth proposals set forth
in the Notice of Annual Meeting of Shareholders and this Proxy Statement. If a
shareholder is participating in UJB's Dividend Reinvestment and Stock Purchase
Plan (the "Dividend Reinvestment Plan"), the shareholder will receive a single
proxy covering both shares of UJB common stock, par value $1.20 per share (the
"Common Stock"), held by the shareholder in certificate form and shares of
Common Stock held by the Dividend Reinvestment Plan Administrator in the
shareholder's Dividend Reinvestment Plan account. If a proxy is not returned,
shares of Common Stock held under the Dividend Reinvestment Plan will not be
voted.
Employees who hold Common Stock through participation in UJB's Savings
Incentive Plan (the "Employee Savings Plan") will receive a separate card for
use in providing voting instructions to the Employee Savings Plan's Trustee.
Full shares held by the Employee Savings Plan will be voted by the Trustee in
accordance with instructions received from participants. In the event such
participants fail to return voting instructions, the Trustee will vote the
participants' shares held in Sub-Fund B of the Employee Savings Plan in the
manner deemed by the Trustee to be in the best interests of the beneficial
owners of such shares, but the Trustee will not vote shares of such participants
held in Sub-Fund E of the Employee Savings Plan.
A proxy may be revoked by the person giving the proxy at any time prior to
the close of voting. Prior to the Annual Meeting a proxy may be revoked by
filing with the Secretary of UJB a written revocation or a duly executed proxy
bearing a later date. During the Annual Meeting a proxy may be revoked by filing
a written revocation or a duly executed proxy bearing a later date with the
secretary of the Annual Meeting prior to the close of voting. Any shareholder of
record may attend the Annual Meeting and vote in person, whether or not a proxy
has previously been given.
The close of business of UJB on February 25, 1994 has been fixed by the
Board of Directors as the record date and hour for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting. On that
date, there were shares of Common Stock issued and outstanding, and there
were no other voting securities of UJB outstanding. Each share of Common Stock
is entitled to one vote at the Annual Meeting. No shareholder is known to UJB to
own beneficially more than 5% of the outstanding Common Stock of UJB.
The companies listed immediately below are subsidiaries of UJB and are
sometimes referred to below by means of the following abbreviations:
First Valley -- First Valley Corporation
FVBank -- First Valley Bank
Gibraltar -- Gibraltar Corporation of America
Hanover -- Hanover Bank
Hazleton -- The Hazleton National Bank
UJBank -- United Jersey Bank
UJB/Central -- United Jersey Bank/Central, N.A.
UJB/South -- United Jersey Bank/South, N.A.
1
<PAGE> 5
1. ELECTION OF DIRECTORS
The Restated Certificate of Incorporation of UJB divides the UJB Board of
Directors into three classes, with each class of Directors serving a staggered
term of three years. Each class of Directors must consist, as nearly as
possible, of one-third of the number of Directors constituting the entire Board
of Directors. Presently there are four Directors in Class I, four Directors in
Class II and four Directors in Class III. The terms of the Directors in Class I
expire at the 1994 Annual Meeting, and the Class II Director elected to the
Board between annual meetings is being submitted for shareholder approval.
Accordingly, at the 1994 Annual Meeting, four Class I Directors are to be
elected to serve until the 1997 Annual Meeting and one new Class II Director is
to be elected to serve until the 1995 Annual Meeting and until their successors
are elected and qualified. Set forth below, with respect to the nominees for
election as Directors and the continuing members of the Board, are their names,
ages, the year in which each first became a Director, their principal
occupations during the past ten years and other positions. Each Director nominee
is at present available for election as a member of the Board. If for any reason
a Director nominee becomes unavailable for election, the proxies solicited by
the Board of Directors will be voted for a substitute Director nominee selected
by the Board of Directors or, at its option, the Board of Directors may reduce
the number of Directors constituting the entire Board.
2
<PAGE> 6
DIRECTOR NOMINEES
CLASS I -- TERM EXPIRING IN 1994
<TABLE>
<S> <C>
(PHOTO) T.J. Dermot Dunphy, 61, Director since 1984. Director, Chief Executive
Officer and President (since 1971) of Sealed Air Corp. (protective
packaging products and systems). Trustee of the Partnership for New
Jersey. Sponsor, "I Have A Dream" Program, Paterson, New Jersey.
Director of Public Service Enterprise Group, Inc. and UJBank (since
1981).
(PHOTO) Fred G. Harvey, 65, Director since 1988. Director and Vice President
(since 1983) of E & E Corporation (engineering consulting services).
General Manager (1977-1983) of Bethlehem Steel Corporation. Director and
President of the Retired Employee Benefit Coalition (REBCO). Director of
First Valley (since 1981) and FVBank (since 1981).
(PHOTO) Francis J. Mertz, 56, Director since 1986. Trustee (since 1991) and
President (since 1990) of Fairleigh Dickinson University. Director
(since 1982), former Vice Chairman (1990-1992) and former President
(1982-1990) of the Association of Independent Colleges and Universities
of New Jersey. Trustee (since 1990) and former President (1981-1990) of
the Independent College Fund of New Jersey, Chairman of the New Jersey
Association of Colleges & Universities. Director of the National
Association of Independent Colleges & Universities. Director of UJBank
(since 1973) and Gibraltar (since 1989).
(PHOTO) T. Joseph Semrod, 57, Director since 1981. Chairman of the Board, Chief
Executive Officer and President (since 1981) of UJB. Former Director
(1984-1986) of the Federal Reserve Bank of New York. Chairman-Elect of
the International Financial Conference. Trustee of the National Urban
League. Trustee and former Chairman of The Partnership for New Jersey.
Vice-Chairman of the New Jersey State Chamber of Commerce. Chairman of
the Board of UJBank.
</TABLE>
3
<PAGE> 7
DIRECTOR NOMINEE
CLASS II -- TERM EXPIRING IN 1995
<TABLE>
<S> <C>
(PHOTO) George L. Miles, Jr., 52, Director since February 16, 1994. Executive
Vice President and Chief Operating Officer (since 1984) of Thirteen/WNET
(television broadcasting). Vice Chairman of the Board of Trustees of the
Association of America's Public Television Stations. Trustee of
Fairleigh Dickinson University. Director of Foundation for Minority
Interests in Media, Inc., National Dance Institute, Morris Museum and
Coro Foundation. Member, American Institute of C.P.A.s.
</TABLE>
DIRECTORS
CLASS II -- TERM EXPIRING IN 1995
<TABLE>
<S> <C>
(PHOTO) John G. Collins, 57, Director since 1986. Vice Chairman of the Board
(since 1986) of UJB. Formerly Chairman of the Board (1983-1986),
Director, President and Chief Executive Officer (1982-1986) of
Commercial Bancshares, Inc. Chairman of the Board of Trustees of St.
Peter's College. Chairman of the Board of New Jersey Bankers
Association, Hudson County Tax Research Council and UJB Financial
Service Corporation. Director of Collier Services. Trustee of Collier
Services Foundation. Former Director of UJBank (1978-1990).
(PHOTO) Henry S. Patterson II, 71, Director since 1971. Director and President
(since 1985) of E'town Corporation (parent company of regulated water
utility and real estate company). Director (since 1959) and former
President 1973-1986) of Elizabethtown Water Company. Former Chairman
(1985-1990) and Commissioner (1979-1990) of the State of New Jersey
Commission of Investigation. Former Mayor (1962-1970) of Princeton
Borough, New Jersey. Director of Mount Holly Water Company, UJBank
(since 1983), UJB/Central (since 1967) and UJB Investor Services Co.
(since 1983).
(PHOTO) Raymond Silverstein, 66, Director since 1991. Consultant (since 1989)
and former Principal (1949-1989) of Alloy, Silverstein, Shapiro, Adams,
Mulford & Co., P.C. (certified public accountants). Chairman of the
Board (since 1987) and Director (1970-1975 and since 1980) of UJB/South.
Former Chairman of the Board of Kennedy Health Care Foundation. Former
Trustee of John F. Kennedy Hospital and William Likoff Cardiovascular
Institute of Hahneman University.
</TABLE>
4
<PAGE> 8
DIRECTORS
CLASS III -- TERM EXPIRING IN 1996
<TABLE>
<S> <C>
(PHOTO) Robert L. Boyle, 58, Director since 1986. Representative (since 1991)
with the William H. Hintelmann Firm (realty and insurance) and Publisher
Emeritus (since 1978) of The Dispatch (newspaper). Regent of St. Peter's
College. Member of the State of New Jersey Supreme Court Ethics
Commission. Trustee of Monmouth Chemical Dependency Corp., Monmouth
County Organization for Social Services, Inc. (MCOSS),Oceanic Free
Library, Parents Support Group of New Jersey and Director of UJB/Central
(since 1990). Former Director of UJBank (1964-1990).
(PHOTO) Elinor J. Ferdon, 57, Director since 1984. Volunteer professional.
Director (since 1974) and Vice President (since 1987) of the Girl Scouts
of U.S.A. Trustee and President (since 1991) of World Foundation for
Girl Guides and Girl Scouts. Vice Chair of Liberty Science Center and
Hall of Technology. Trustee of Fairleigh Dickinson University and the
National Urban League. Chair, Trustee Emeriti of Stoneleigh Burnham
School. Director of UJBank (since 1976).
(PHOTO) John R. Howell, 60, Director since 1988. Vice Chairman of the Board
(since 1988) of UJB. Chairman of the Board (since 1983) and Director and
Chief Executive Officer (since 1976) of First Valley. Trustee of
Moravian College and the Allentown Art Museum. Chairman of the Board
(since 1988) and Director (since 1976) of FVBank. Chairman of the Board
of First Valley Leasing Inc., First Valley Life Insurance Company and
Lehigh Securities Corporation. Director of the Lehigh Valley Industrial
Park, Hazleton and Hanover.
(PHOTO) Joseph M. Tabak, 61, Director since 1987. President and Chief Executive
Officer (since 1991) of JPC Enterprises, Inc. (investment services).
Former Chairman (1988-1989) and former President (1971-1988) of Bunzl
Distribution USA, Inc., Northeastern Division and predecessor Jersey
Paper Company (distributor of paper and plastic disposable products).
Trustee of St. Peter's Hospital Foundation and Highland Park
Conservative Temple. Director of UJB/Central (since 1981).
</TABLE>
5
<PAGE> 9
BENEFICIAL OWNERSHIP OF UJB EQUITY SECURITIES
BY DIRECTORS AND EXECUTIVE OFFICERS
COMMON STOCK
Set forth below are the number of shares of UJB Common Stock beneficially
owned by each Director of UJB, by each executive officer listed in the Summary
Compensation Table and by all Directors and executive officers of UJB as a group
as of February 25, 1994. The beneficial owners listed below hold sole voting and
investment power over all shares listed, except as indicated.
<TABLE>
<CAPTION>
PERCENTAGE
SHARES OF UJB
BENEFICIALLY COMMON
OWNED STOCK
------------ ----------
<S> <C> <C>
Robert L. Boyle.............................................. 93,141(1) .18%
John G. Collins.............................................. 238,757(2) .46%
T.J. Dermot Dunphy........................................... 64,603 .13%
Elinor J. Ferdon............................................. 14,226(3) .03%
John R. Haggerty............................................. 149,728(2)(4) .29%
Fred G. Harvey............................................... 2,386(5) .01%
John R. Howell............................................... 286,022(2)(6) .55%
Francis J. Mertz............................................. 14,143(7) .03%
George L. Miles, Jr..........................................
Stephen H. Paneyko........................................... 198,458(2)(8) .38%
Henry S. Patterson II........................................ 12,892 .03%
T. Joseph Semrod............................................. 582,388(2)(9) 1.18%
Raymond Silverstein.......................................... 10,500(10) .02%
Joseph M. Tabak.............................................. 50,014 .10%
All Directors and executive officers as a group (23)......... 2,389,946(11) 4.50%
</TABLE>
- ---------------
(1) Includes 24,408 shares held in trusts for which Mr. Boyle serves as
trustee and 23,138 shares owned by Mr. Boyle's wife and children over which Mr.
Boyle disclaims voting and investment powers.
(2) Includes shares which may be acquired within sixty days under one or
more of UJB's Stock Option Plans as follows: Mr. Collins -- 153,680 shares, Mr.
Haggerty -- 95,217 shares, Mr. Howell -- 146,180 shares, Mr. Paneyko -- 121,980
shares, Mr. Semrod -- 403,891 shares.
(3) Includes 3,000 shares owned by Mrs. Ferdon's husband over which Mrs.
Ferdon disclaims voting and investment powers.
(4) Includes 19,528 shares owned jointly with Mr. Haggerty's wife over
which Mr. Haggerty shares voting and investment powers.
(5) Mr. Harvey owns all of theses shares jointly with his wife and shares
voting and investment powers with respect to these shares.
(6) Includes 1,235 shares held by Mr. Howell's wife over which Mr. Howell
disclaims voting and investment powers, 101 shares held by Mr. Howell as
custodian for minor children and 63,799 shares which may be acquired immediately
pursuant to options granted under the First Valley Incentive and Non-Qualified
Stock Option Plans which were converted into options to purchase UJB Common
Stock.
(7) Includes 2,573 shares held by Mr. Mertz as custodian for minor
children, 5,331 shares owned jointly with Mr. Mertz's wife over which Mr. Mertz
shares voting and investment powers and 163 shares owned by Mr. Mertz's wife,
over which Mr. Mertz disclaims voting and investment powers.
(8) Includes 1,100 shares owned by Mr. Paneyko's wife and 2,601 shares
owned by a family member of Mr. Paneyko living in the same household over which
Mr. Paneyko disclaims voting and investment powers.
6
<PAGE> 10
(9) Includes 534 shares held for minor children in custodial accounts, 479
shares owned by Mr. Semrod's wife over which Mr. Semrod disclaims voting and
investment powers and 56 shares held by Mr. Semrod as custodian for a minor
child.
(10) Includes 275 shares owned by Mr. Silverstein's wife over which Mr.
Silverstein disclaims voting and investment powers and 561 shares owned by a
partnership in which Mr. Silverstein is a general partner.
(11) Voting and investment powers are shared as to 99,854 and disclaimed as
to 33,618 of these shares. Includes 1,435,566 shares which may be acquired
within 60 days under all Stock Option Plans.
PREFERRED STOCK
Currently issued and outstanding are 600,166 shares of UJB's Adjustable
Rate Cumulative Preferred Stock -- Series B. Messrs. Boyle and Tabak
beneficially own 300 and 1,000 shares, respectively, of the Series B Preferred
Stock.
CORPORATE GOVERNANCE OF UJB
DUTIES OF THE BOARD UNDER STATE LAW
The laws of the State of New Jersey, where UJB is incorporated, provide
that the business and affairs of a corporation shall be managed by or under the
direction of its board of directors. The Board of Directors of UJB oversees the
management of the business of UJB, determines corporate policies and appoints
the chief executive officer and other officers of UJB.
STRUCTURE AND MEMBERSHIP OF THE UJB BOARD
The Restated Certificate of Incorporation of UJB contains a provision
adopted by vote of the shareholders in 1990 which divides the UJB Board into
three classes, each of which serves a three-year term. Presently, there are four
Class I Directors (whose terms expire at the 1994 Annual Meeting), four Class II
Directors and four Class III Directors.
In accordance with the long-standing practice of UJB's Board of Directors,
more than a majority of the members of UJB's Board consists of nonemployee
directors. Currently, of the twelve members of the Board of Directors, nine are
not employees of UJB or its subsidiaries. In addition to attendance at Board
meetings (the Board met six times during 1993) and Committee and Subcommittee
meetings as described below (Committees and Subcommittees held 20 meetings in
1993), Directors discharge their responsibilities throughout the year by
personal meetings and frequent telephone contact with UJB's executive officers
and others regarding the business and affairs of UJB and its subsidiaries.
Eleven of the twelve Directors additionally serve on one or more of the Boards
of Directors of UJB's bank and nonbank subsidiaries.
BOARD COMMITTEES, FUNCTIONS AND ATTENDANCE
To permit the Board of UJB to more efficiently discharge its duties, UJB
has six standing Board committees, all of which held meetings in 1993: the
Executive Committee, the Audit Committee, the Nominating Committee, the
Compensation Committee, the Capital and Dividend Committee and the Acquisition
Committee. Each of these Committees is chaired by a Director who is independent
of the management of UJB and a majority of the membership of each Committee
consists of Directors who are likewise independent of UJB management. In the
case of three of the Committees, the Audit, the Nominating and the Compensation
Committees, membership consists exclusively of Directors who are independent of
UJB management. Committee membership and functions are set forth below:
Executive. Chaired by Mr. Patterson and including Mrs. Ferdon and Messrs.
Boyle, Dunphy, Semrod, Mertz and Tabak, this Committee held two meetings in
1993. The Executive Committee exercises the powers of the Board of Directors
between meetings of the Board to the extent provided by law.
7
<PAGE> 11
Audit. Chaired by Mrs. Ferdon and including Messrs. Dunphy, Harvey,
Patterson and Silverstein, this Committee held four meetings in 1993 and a
special Subcommittee of the Audit Committee, consisting of Mrs. Ferdon and
Messrs. Patterson and Tabak, held two meetings in 1993. The Audit Committee
recommends to the Board of Directors the engagement and discharge of independent
CPAs, considers the range of audit and nonaudit fees, and reviews with the
independent CPAs their annual audit plan and the results of their auditing
activities. The Committee also reviews the general audit plan, scope, and
results of UJB's procedures for internal auditing, the independence of the
internal and external auditors, and the adequacy of UJB's internal control
structure. In addition, the reports of examination of UJB and its subsidiaries
by state and federal bank regulatory agencies are reviewed by the Committee. The
special Subcommittee of the Audit Committee reviewed and made recommendations
with respect to the annual appointment process for the independent CPAs and
reviewed the Audit Committee's duties and responsibilities statement to
determine whether changes were appropriate in light of provisions contained in
the Federal Deposit Insurance Corporation Improvement Act of 1991.
Nominating. Chaired by Mr. Mertz and including Mrs. Ferdon and Messrs.
Boyle, Harvey and Silverstein, this Committee held one meeting in 1993. The
Nominating Committee recommends nominees to the Board for election as Directors
and considers the performance of incumbent Directors in determining whether or
not to nominate them for re-election.
Compensation. Chaired by Mr. Patterson and including Mrs. Ferdon and
Messrs. Boyle, Dunphy, Mertz and Tabak, this Committee held seven meetings in
1993. This Committee recommends to the Board employment, promotion, and
remuneration arrangements for senior management, officers, and Directors,
recommends compensation plans in which officers, Directors and employees are
eligible to participate, and grants benefits under such plans.
Capital and Dividend. Chaired by Mr. Tabak and including Messrs. Boyle,
Collins, Harvey, Patterson and Silverstein, this Committee held two meetings in
1993. This Committee recommends capital programs and dividend policy for UJB to
the Board.
Acquisition. Chaired by Mr. Dunphy and including Messrs. Howell, Mertz,
Patterson and Tabak, this Committee held two meetings in 1993. This Committee
reviews acquisition strategy and reviews and recommends to the Board proposals
for significant acquisitions.
All Director nominees attended at least 75% of the aggregate of Board
meetings and meetings of Committees and Subcommittees on which they served.
NOMINATIONS TO UJB'S BOARD
The Nominating Committee will consider nominees recommended by
shareholders. Nominations, including biographical information and a statement by
the nominee that he or she is willing to serve if nominated, should be submitted
to the Secretary by October 1 for consideration for proposal at the next annual
meeting. UJB's By-Laws state that a nominee must own 1,000 shares of UJB Common
Stock, be under the age of 70, and not be retired from his or her regular
business or profession at the time of election, unless waived by the Board. In
addition, various state and federal laws prohibit officers and directors of
certain financial institutions, public utility holding companies, and
competitors of UJB from serving on UJB's Board. Details may be obtained from the
Secretary.
The By-Laws of UJB provide that nominations for the election of directors
may be made at an annual meeting by any shareholder entitled to vote at the
annual meeting but only if written notice of such intent, sent either by
personal delivery or by United States mail, is received by the Secretary of UJB
not later than 70 days in advance of the annual meeting. The notice must be set
forth: (a) the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated, (b) a representation
that such holder is a holder of record of shares of UJB entitled to vote at the
annual meeting and intends to appear in person or by proxy at the annual meeting
to nominate the person or persons specified in the notice, (c) a description of
all arrangements or understandings between such holder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be
8
<PAGE> 12
made by such holder, (d) such other information regarding each nominee proposed
by such holder as would have been required to be included in a proxy statement
filed pursuant to the proxy rules of the SEC had each nominee been nominated, or
intended to be nominated, by the Board of Directors and (e) the consent of each
nominee to serve as a director of UJB if so elected and a representation by such
nominee that such person, at the time of notification satisfies, and, on the
date of the Annual Meeting and thereafter during the continuation of
directorship, will satisfy, the qualifications for service as a director as set
forth in Section 13 of Article III of the By-Laws. The By-Laws also provide that
the chairman of the annual meeting may refuse to acknowledge the nomination of
any person not made in compliance with the foregoing procedure.
REMUNERATION OF DIRECTORS
Directors are paid $750 per Board and $750 per Committee and Subcommittee
meeting attended. In 1993, each Director also received a $15,000 annual
retainer. In addition, the Chair of the Executive and Compensation Committees
receives a $10,000 annual retainer and the Chair of the Audit Committee receives
a $5,000 annual retainer. Mr. Silverstein, while receiving meeting fees from
UJB, does not receive an annual retainer from UJB due to his receipt of a
$50,000 annual retainer (but no meeting fees) as Chairman of UJB/South pursuant
to a consulting arrangement between Mr. Silverstein and UJB/South. Directors
other than Mr. Silverstein who serve as directors of subsidiaries also receive
fees from such subsidiaries, which vary in amount, with annual retainers, where
paid by a subsidiary, ranging from $5,000 to $8,400 and fees for meetings
attended ranging from $100 to $450. A Director may elect to defer payment of
fees from UJB and subsidiaries until reaching a stated age or until conclusion
of service as a Director of UJB, with interest on deferred sums payable at the
rate paid by UJBank for IRA and Keogh Accounts.
A retirement plan for outside Directors, i.e., Directors who are not
officers or employees of UJB on the date their service as a UJB Director ends,
provides that outside Directors with five or more years of service as a UJB
Director (a "Vested Director") are entitled to receive annually, for ten years
or the number of years served as a Director, whichever is less, commencing upon
the Vested Director's attainment of age 65 and retirement from the UJB Board or
upon the Vested Director's disability, payments equal to the highest annual
retainer rate in effect at any time for service as a UJB Director during the
two-year period immediately preceding the Vested Director's date of retirement
or, if earlier, date of death or disability. The plan further provides that, in
the event a Vested Director dies before receiving all benefits to which he or
she is entitled, the Vested Director's surviving spouse is entitled to receive
all benefits not received by the deceased Vested Director, commencing upon such
Vested Director's death. Upon a Change in Control of UJB the plan provides that
each Director then sitting on the UJB Board, notwithstanding the length of time
served as a Director, becomes entitled to receive annually, for ten years or
twice the number of years served as a Director, whichever is less, payments
equal to the higher of (i) the Director's annual retainer at the time of the
Director's termination of Board service, or (ii) the highest annual retainer in
effect at any time during the two-year period immediately preceding the Change
in Control, commencing on the latest to occur of (a) the termination of the
Director's Board service, (b) attainment of age 65 or (c) any date designated by
the Director prior to the Change in Control. The definition of Change in Control
for purposes of the Plan parallels the definition of that term contained in the
Termination Agreements discussed on pages hereof.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed
exclusively of Directors who are not, and have not been, officers or employees
of UJB or any of its subsidiaries (collectively, the "Company"). It is presently
chaired by Mr. Patterson, who also serves as Chair of the Executive Committee,
and includes Mrs. Ferdon, Chair of the Audit Committee, Mr. Dunphy, Chair of the
Acquisition Committee, Mr. Mertz, Chair of the Nominating Committee, Mr. Tabak,
Chair of the Capital and Dividend Committee and Mr. Boyle. This Committee
recommends to the Board the employment, promotion and remuneration of senior
management, officers and Directors, recommends compensation plans in which
officers, Directors and employees are eligible to participate, and grants
benefits under such plans.
9
<PAGE> 13
One of the most important duties of this Committee is to determine the
compensation of executives. UJB's executive compensation program is a
coordinated and balanced program consisting of:
- Salary and benefits;
- Incentive cash compensation;
- Annual stock option program; and
- Long-term performance stock program (restricted stock).
A number of elements are taken into account in determining an executive
compensation program, including company size and performance, management
philosophy, stock market price volatility, industry practices, company culture
and organizational structure. A balance must be achieved among:
- Aligning the executives' goals with the shareholders' goals of
stock appreciation and yield;
- The Company's goals of attracting, retaining and motivating the
best possible executives in a cost-effective way; and
- The executives' goals of maximizing the amount and certainty of
compensation as well as security of position.
The elements of the executive compensation program fulfill different
purposes:
The incentive cash feature stresses the importance of achieving
specific goals each year.
The stock option and restricted stock programs are intended to provide a
long-term incentive to build the Company's business. They also serve as
a strong motivator, a capital accumulation opportunity and a retention
mechanism. Restricted stock awards are also tax deductible by the
Company in most cases without incurring any cash outlay. By increasing
the shareholdings of executives, the stock programs align the goals of
UJB executives with those of UJB shareholders. These programs are
submitted to the shareholders for approval prior to their
implementation.
By design, the present mix of the UJB executive compensation program is
slightly below the median of peers in cash bonus and above the median in
long-term stock-related compensation, although in 1993 this latter measure was
closer to the median than in prior years. The Compensation Committee believes
that this mix continues to provide an appropriate balance to maximize long-term
shareholder interests. A heavily stock-based compensation program represents
more risk to the executive because the compensation decreases if the Company's
stock price declines. However, there is potentially more reward if the stock
does appreciate, reflecting the increasing reward to the shareholders.
The principal components of the compensation program can be seen in the
Summary Compensation Table on page under the following column headings: "(c)
Salary", "(d) Bonus", "(f) Restricted Stock Awards" and "(g) Securities
Underlying Options/SARs". Reporting of awards under the long-term performance
stock program is split between two of the foregoing headings: one-fifth of each
annual award (the unrestricted stock portion) appears in the column titled "(d)
Bonus" where it is aggregated with an executive's incentive cash bonus award,
while four-fifths of each annual award (the restricted stock portion) appears
under the general caption "Long Term Compensation" in the column titled "(f)
Restricted Stock Awards". The last column of the Cash Compensation Table, "(h)
All Other Compensation", aggregates the remaining miscellaneous forms of
compensation, including the portion of term life insurance premiums taxable to
executives under the Company life insurance program applicable to all employees
and the employer matching contribution paid to the executive's accounts in the
Employee Savings Plan, a profit sharing and retirement plan established pursuant
to Section 401(k) of the Internal Revenue Code of 1986 (the "Code") pursuant to
which the Company matches, subject to a maximum employer contribution of $2,925,
65% of voluntary contributions by an employee up to 3% of the employee's base
salary. All employees are eligible to participate in the Employee Savings Plan
after one year of service. Approximately 37% of the Employee Savings Plan's
assets are invested in UJB Common Stock, further aligning the employees'
interests with those of the shareholders.
10
<PAGE> 14
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------
AWARDS
ANNUAL COMPENSATION ---------------------------
-------------------------------------- (G)
(E) (F) SECURITIES (H)
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
(A) (B) (C) (D) COMPEN- STOCK OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) SATION($)(2) AWARD(S)($)(3) SARS(#) SATION($)(4)
- ------------------------------- ---- --------- ----------- ------------ -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
T. Joseph Semrod 1993 $665,000 $ 284,350 $-- $225,400 58,000 $ 16,140
Chairman of the Board, 1992 646,250 207,108 -- 296,432 58,000 15,627
CEO and President of UJB; 1991 630,615 164,170 -- 264,680 62,840 10,655
Chairman of the Board 1990 604,231 155,189 -- 248,755 112,460 8,243
of UJBank 1989 561,538 352,025 -- 348,099 72,320 8,517
John G. Collins 1993 297,850 110,720 -- 54,880 20,000 12,195
Vice Chairman of the Board 1992 286,250 65,713 -- 66,850 18,000 11,048
of UJB 1991 282,065 51,605 -- 56,420 19,960 9,512
1990 275,000 44,750 -- 39,000 37,180 9,156
1989 265,000 63,694 -- 54,777 25,570 8,603
John R. Howell 1993 292,750 100,720 -- 54,880 20,000 11,632
Vice Chairman of the Board 1992 281,250 71,603 -- 66,850 18,000 8,868
of UJB; Chairman of the Board 1991 277,667 54,845 -- 55,380 19,960 8,473
and CEO of First Valley and 1990 265,000 51,375 -- 45,500 37,180 10,596
Chairman of FVBank 1989 250,000 123,300 -- 91,200 25,570 8,594
Stephen H. Paneyko 1993 248,400 80,280 -- 43,120 16,000 9,978
Senior Executive Vice 1992 238,750 55,713 -- 66,850 14,000 8,114
President -- Commercial 1991 233,100 42,765 -- 47,060 14,930 5,292
Banking of UJB 1990 225,000 39,750 -- 39,000 27,810 7,668
1989 200,000 98,800 -- 91,200 24,450 7,040
John R. Haggerty 1993 237,150 83,780 -- 43,120 16,000 8,327
Senior Executive Vice 1992 228,000 49,606 -- 50,424 14,000 7,889
President -- Finance 1991 222,688 42,713 -- 44,850 14,930 7,260
of UJB 1990 215,000 39,750 -- 39,000 27,810 8,465
1989 200,000 90,991 -- 59,964 19,130 7,747
</TABLE>
- ---------------
(1) Includes value of one-fifth of performance stock award and any cash bonus,
both of which are paid in the fiscal year following the fiscal year for
which they are reported.
(2) Perquisites and other personal benefits, securities or property paid during
the indicated fiscal year did not exceed, with respect to any named
executive officer, the lesser of $50,000 or 10% of the annual salary and
bonus reported in the table for that individual, and are therefore excluded
from "Other Compensation".
(3) The total number of restricted shares held and their aggregate market value
as of December 31, 1993 are as follows: Mr. Semrod: 46,047 shares,
$1,105,128; Mr. Collins: 8,765 shares, $210,360; Mr. Howell: 9,756 shares,
$234,144; Mr. Paneyko: 8,972 shares, $215,328; Mr. Haggerty: 7,634 shares,
$183,216.
Restricted stock awards (indicated in shares) which provided for vesting in
less than three years were as follows:
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
----------------- ----------------- ----------------- ----------------- -----------------
VESTING PERIODS 1 YEAR 2 YEARS 1 YEAR 2 YEARS 1 YEAR 2 YEARS 1 YEAR 2 YEARS 1 YEAR 2 YEARS
------ ------- ------ ------- ------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Semrod 6,107 6,107 7,654 7,654 4,072 4,072 3,104 3,104 2,300 2,300
Collins 961 961 1,200 1,200 868 868 700 700 560 560
Howell 1,600 1,600 1,400 1,400 852 852 700 700 560 560
Paneyko 1,600 1,600 1,200 1,200 724 724 700 700 440 440
Haggerty 1,052 1,052 1,200 1,200 690 690 528 528 440 440
</TABLE>
Dividends are paid on all restricted shares held by the named executive
officers.
(4) Amounts listed under "All Other Compensation" for 1993 include Company
contributions to the UJB Savings Incentive Plan (a defined contribution
retirement plan under Section 401(k) of the Internal Revenue Code of 1986)
("SIP") and the dollar value of insurance premiums paid with respect to term
life insurance ("INS") for the named executive officers as follows: Mr.
Semrod: SIP - $4,620, INS - $11,520; Mr. Collins: SIP - $4,599,
INS - $7,596; Mr. Howell: SIP - $4,114, INS - $7,518; Mr. Paneyko:
SIP - $4,599, INS - $5,379; Mr. Haggerty: SIP - $4,506, INS - $3,821.
11
<PAGE> 15
The Compensation Committee periodically utilizes surveys and advice
provided by outside compensation consultants in arriving at and making
adjustments to the total compensation package appropriate for the executive
officers of the Company. The surveys considered by the Compensation Committee
for this purpose are primarily peer industry surveys but cross-industry surveys
are also reviewed. The peer companies included in the peer industry surveys are
selected by the independent firms which conduct the surveys and consist of the
commercial banks and bank holding companies operating primarily in the United
States which are, generally, in the same asset size group as the Company.
Salary. Base salaries for executive officers, when initially set, are
generally dependent upon peer industry salaries paid for comparable positions
(as reflected in peer industry salary surveys) and correlate generally to the
size of the organization. The responsibilities to be undertaken and the
experience level of the particular executive officer are also taken into
consideration when setting a salary. With respect to increases in base salaries,
the overall general performance of the Company for a given year is taken into
account in arriving at a percentage increase which is applied Company-wide as a
guideline to the merit salary increases of all employees, including executive
officers. Deviations from the guideline percentage are permitted in cases of
exceptionally superior or inferior performance and to correct significant
variances from marketplace salaries. A guideline percentage of four percent was
applied to general salary increases during 1993.
Cash Bonus. Cash bonuses are awarded pursuant to the Incentive Plan, a
short-term plan adopted in 1982. The Incentive Plan provides for awards of cash
bonuses to key officers of the Company at the conclusion of a fiscal year based
on the Company's performance in relation to goals set for the Company at the
beginning of the year, the Company's performance compared to peers, and the
individual contributions of the officers involved and their profit centers. The
aggregate amount of bonuses may not exceed 50% of aggregate participants'
salaries and no bonuses will normally be paid when the after-tax income of the
Company is less than 7% of average capital for the year, subject to the right of
the Compensation Committee to make exceptions when warranted.
There are three levels of participants in the Incentive Plan: the Chief
Executive Officer and corporate line and staff heads (the level at which
executive officers participate); chief executives and group heads of larger
subsidiaries; and other senior officers. At the level of participation
designated for executive officers, the Compensation Committee periodically uses
surveys and recommendations provided by outside compensation consultants to
establish percentages of base salary representing a cash bonus guideline and
ranges for permissible deviations above and below that guideline. In determining
the amount of cash bonus to award executive officers for a particular year, the
Compensation Committee evaluates the Company's performance (as a percentage of
the performance deemed desirable by the Committee) for that year using four
evaluation categories and pays a cash bonus equal to the rating percentage times
the cash bonus guideline (but no higher than the maximum and no lower than the
minimum in the guidelines range). The four evaluation categories are: financial
and strategic plans, earnings growth rate, financial performance compared to
industry peers in the Company's geographic region and strategic market
positioning objectives. The Compensation Committee assigns relative weights to
these categories each year which reflect, in its judgment, as of that year, the
relative importance of each category to the long-term financial prospects of the
Company. In arriving at the bonus paid with respect to 1993, the Compensation
Committee determined that the Company had performed in a manner earning it a 95%
rating, but, instead of paying the 95% of guideline indicated by the performance
rating procedures, elected in its discretion to pay a slightly lesser bonus.
Stock Bonus and Long Term Compensation. To encourage growth in shareholder
value the Committee believes that senior executives who are in a position to
make a substantial contribution to the long-term success of the company should
have a significant stake in the Company and its on-going success. An equity
position in the business focuses attention on managing the Company as an owner.
To encourage growth in shareholder value, the stock component of the executive
compensation program includes a long-term performance stock program and a stock
option program. These stock-based programs are designed to mature and grow in
value over time and for that reason represent compensation which is attributable
to service over a period of time.
12
<PAGE> 16
The Long-Term Performance Stock Program is designed to reward executives
who meet predetermined goals and retain the executives by paying out stock over
a period of time. Pursuant to regulations of the SEC one-fifth of an annual
award, the unrestricted stock portion, is reported as annual compensation in
column (d) of the Summary Compensation Table. The remaining four-fifths of an
annual award, the restricted stock portion, vests in equal annual installments
over the four years following an award and is reported as long-term
compensation. Each participant proposes goals applicable to a particular fiscal
year which are reviewed by the Chief Executive Officer to determine whether they
offer significant benefit to the Company and sufficient challenge to the
executive. These goals vary greatly among the executive officers and range from
broad, quantifiable goals of the Company, such as earnings growth, to goals
relating to personal development. The Compensation Committee periodically
utilizes surveys and recommendations provided by outside compensation
consultants to establish a long-term performance stock guideline and ranges for
permissible deviations above and below this guideline. Slightly lower guidelines
were set for 1993 as a result of the Compensation Committee's review of surveys
and recommendations relating to current industry practices. Following the end of
each fiscal year the Chief Executive Officer evaluates the extent to which each
executive officer has met his or her predetermined performance goals and, on the
basis of this evaluation, determines an appropriate long-term performance stock
grant recommendation for each executive officer. The Compensation Committee then
weighs as it deems appropriate the performance goals for each executive officer
and the evaluation and recommendation of the Chief Executive Officer and makes a
long-term performance stock grant after taking into account the overall
performance of the Company, one or more elements thereof or any other factors
the Compensation Committee considers relevant. Sixty-five senior officers
participated in the January 1994 grant applicable to services rendered in 1993,
receiving an aggregate of 59,840 shares.
Stock options are a performance-motivating incentive because they have no
value unless the Company's stock price increases. Surveys and recommendations
provided by outside compensation consultants are periodically used by the
Compensation Committee to establish stock option guidelines (determined in
number of options), and ranges of permissible deviations above and below those
guidelines, for each salary level of senior officer at UJB and each of its
subsidiaries. The Compensation Committee, on a subjective basis and entirely
within its discretion, then evaluates the overall financial performance of the
Company, or any element thereof, and determines whether to grant options in
accordance with the stock option program guidelines or amounts greater than or
less than the guidelines. The Compensation Committee also compares currently
outstanding and previously granted options against norms as indicated in
industry surveys and makes adjustments to grant guidelines if deemed
appropriate. The Compensation Committee also considers the aggregate size of
current grants when making individual grants.
The stock option program is designed with a broad scope to align the
interests of a large number of employees with shareholder interests. A total of
444 current employees hold one or more stock options granted with respect to the
current year or to prior years. This amounts to 9% of the full-time work force.
With respect to stock options granted in January 1994 for services rendered in
1993, 322 employees received options on 449,500 shares. Set forth in the Summary
Compensation Table are the stock option grants made in January 1994 to the five
named executive officers for services rendered in 1993. The table titled "Option
Grants in Last Fiscal Year" sets forth (pursuant to SEC requirements) the stock
option grants made to the five named executive officers in 1993 for services
rendered in 1992.
The Company also offers a payroll deduction plan which facilitates employee
purchases of UJB Common Stock through the Dividend Reinvestment Plan. As with
purchases made by any other shareholder participating in the Dividend
Reinvestment Plan, such purchases occur at 100% of the fair market value of UJB
Common Stock averaged over a five-day period without payment of any brokerage
fees.
Chief Executive Officer. In general, Mr. Semrod's compensation is
determined in the same manner as that of other senior executives, as described
above. On the basis of peer industry salary surveys and the commentary and
analysis provided by compensation consultants, Mr. Semrod and the Compensation
Committee mutually concurred that Mr. Semrod would forego an increase in salary
at his October 1, 1993 salary review date and instead maintain his salary at the
prior year's level. In determining Mr. Semrod's cash bonus, stock option grant
and long-term performance stock award for 1993, the Compensation Committee, in
addition to the surveys and recommendations of compensation consultants
previously cited and in accordance
13
<PAGE> 17
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
- -------------------------------------------------------------------------------------------------- ALTERNATIVE TO (F)
(C) AND (G):
(B) PERCENT OF GRANT DATE VALUE
NUMBER OF TOTAL (D) -------------------
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE (F)
(A) OPTIONS/SARS EMPLOYEES IN PRICE (E) GRANT DATE
NAME GRANTED(#) FISCAL YEAR ($/SH)(2) EXPIRATION DATE PRESENT VALUE($)(3)
- -------------------------------------- ------------ ------------ ---------- --------------- -------------------
<S> <C> <C> <C> <C> <C>
T. Joseph Semrod (CEO)................ 58,000 12% $25.0625 5/9/2003 $ 510,886
John G. Collins....................... 18,000 4% 25.0625 5/9/2003 158,551
John R. Howell........................ 18,000 4% 25.0625 5/9/2003 158,551
Stephen H. Paneyko.................... 14,000 3% 25.0625 5/9/2003 123,317
John R. Haggerty...................... 14,000 3% 25.0625 5/9/2003 123,317
</TABLE>
- ---------------
(1) The stock option grants listed in this table are reported as 1992
compensation on the Summary Compensation Table.
(2) Exercise price equals 100% of the fair market value of a share of UJB Common
Stock on the grant date, which was April 29, 1993 for all options listed
above. All listed options are nonqualified options, become exercisable one
year from the date of grant and terminate upon a termination of employment,
except termination of employment occurring due to death, disability,
retirement or dismissal without cause.
(3) Black-Scholes Option Pricing Model used. The Black-Scholes value based on
four years of quarterly stock prices and dividends was .362. The assumptions
used to arrive at that value were: 5-year stock price volatility of .4675;
5-year dividend yield of 4.68%; 10-year option term; 7% risk-free rate of
return.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
AT FY-END(#) AT FY-END($)
SHARES ACQUIRED --------------------------- ---------------------------
NAME ON EXERCISE(#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- --------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
T. Joseph Semrod (CEO)....... 7,123 $ 103,926 355,329 88,791 $3,245,868 $ 139,323
John G. Collins.............. -- -- 121,735 31,945 1,004,465 50,551
John R. Howell............... -- -- 191,979* 18,000 1,928,845* 0
Stephen H. Paneyko........... 4,500 75,812 107,980 14,000 899,487 0
John R. Haggerty............. 10,623 214,481 81,217 14,000 574,385 0
</TABLE>
- ---------------
*Includes options granted by First Valley Corporation prior to its merger into
the Company, which options were converted in the merger to options to purchase
stock of the Company.
with the practices and procedures described above, considered the following
factors in arriving at the grants and awards reported for Mr. Semrod in the
Summary Compensation Table:
Management of the Company initiated and implemented a major organizational
restructuring centering on core lines of business and a consolidation of
member banks into a single bank in each of New Jersey and Pennsylvania --
actions projected to produce annualized savings and revenues of $40 million.
An expansion of the Company's retail franchise in Bergen County through the
signing of a definitive agreement to merge with VSB Bancorp, Inc., parent of
Valley Savings Bank.
Net income in 1993 increased 45 percent over 1992 despite a one-time
restructuring charge, continuing three years of sustained earnings growth
and permitting an increase in the common stock dividend twice during 1993
for a total increase of 40 percent.
14
<PAGE> 18
Nonperforming loans decreased over 30 percent during 1993, producing ten
consecutive quarters of declining nonperforming loans.
A strengthening of capital ratios in 1993 through improved earnings and
ongoing balance sheet management -- Tier I capital increased to 9.37
percent, more than double the 4 percent minimum regulatory guideline, and
risk-based capital increased to 12.43 percent, also significantly above the
8 percent minimum regulatory guideline.
Compensation Deductibility Limitation. In 1993, the Code was amended to
limit to $1 million the amount that a publicly-held corporation such as UJB
could deduct for compensation (the "deductibility limitation") paid to any of
the individuals named in that corporation's summary compensation table (the
"named executive officers"). The proposed regulations promulgated December 15,
1993, by the Internal Revenue Service (the "Service"), interpreted this
provision of the Code, Section 162(m) ("Section 162(m)"), to exempt certain
compensation expenses from this deductibility limitation, principally: stock
options granted at fair market value pursuant to a plan that has received
shareholder approval ("exempt options") and compensation payable solely on
account of the attainment of one or more objective performance goals established
by a compensation committee prior to the commencement of the service to which
the performance goals relate and at a time when it is substantially uncertain
whether the performance goals will be met ("performance compensation"). The
option grants reportable in the Summary Compensation Table at column "(g)
Securities Underlying Options/SARs" do not generate taxable income to the
executive officer, or a potential deductible compensation expense to UJB, until
the option is exercised by the executive officer at a time when the market price
of UJB Common Stock underlying the option exceeds the exercise price of the
option. All options granted by UJB prior to February 17, 1993 are exempt options
and any exercise thereof by an executive officer would generate compensation
expense for UJB which would be exempt from the deductibility limitation. It is
not clear whether options granted by UJB after February 17, 1993 are also exempt
options and further clarification is being sought from the Service. Compensation
reported in the other columns does not qualify as performance compensation and
thus will be subject to the deductibility limitation to the extent paid in 1994
and thereafter.
The Compensation Committee has determined that the deductibility limitation
will restrict the deductibility of compensation paid to only one of UJB's named
executive officers and that the effect on the Company will be minimal. Based on
this determination, the uncertainty surrounding the exempt status of UJB
employee stock options granted after February 17, 1993, and interpretive
questions which remain about what qualifies as deductible compensation under
Section 162(m) given the relatively recent release of proposed regulations by
the Service, the Compensation Committee has elected to defer until a time when
its questions can be answered with certainty the consideration of what changes,
if any, should be made to UJB's 1993 Incentive Stock and Option Plan, adopted by
shareholders just last year, and other compensation programs.
Respectfully submitted,
Henry S. Patterson II, Chairman
Robert L. Boyle, T. J. Dermot Dunphy, Elinor J. Ferdon, Frances J. Mertz and
Joseph M. Tabak
15
<PAGE> 19
STOCK PERFORMANCE GRAPH
Set forth below is the five year Cumulative Total Return stock performance
graph for (i) UJB Common Stock, (ii) the Media General ("MG") Mid-Atlantic Bank
Group, a group encompassing virtually all publicly traded banking companies in
New York, New Jersey, Pennsylvania, Delaware, Maryland and the District of
Columbia (133 companies) and (iii) the New York Stock Exchange Market Value
Index, a broad market index covering all stocks listed on the New York Stock
Exchange.
UJB FINANCIAL, NYSE MARKET VALUE INDEX & MG MID-ATLANTIC BANK GROUP
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Fiscal Year Ending
Company 1988 1989 1990 1991 1992 1993
- ------- ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UJB FINANCIAL CP 100 94.22 38.60 83.84 144.98 147.32
PEER GROUP 100 115.76 90.08 119.88 150.12 186.49
BROAD MARKET 100 127.57 122.36 158.35 165.80 188.25
</TABLE>
16
<PAGE> 20
ADDITIONAL INFORMATION REGARDING DIRECTORS AND OFFICERS
Some executive officers, Directors and nominees for election as Director of
UJB and their associates have deposit accounts with one or more of UJB's bank
subsidiaries and may also have transactions with one or more subsidiaries,
including loans, in the ordinary course of business. All loans in excess of
$60,000 to executive officers and Directors and their associates were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons and did
not involve more than the normal risk of collectibility or present other
unfavorable features.
Messrs. Boyle, Haggerty, Harvey, Mertz, Patterson, Semrod, Skidmore and
Tabak and Mrs. Ferdon as well as UJB are defendants in a purported class action
and derivative lawsuit brought by plaintiffs who are alleged to have owned or
purchased UJB's securities from approximately February 1, 1988 through July
1990. Violations are alleged of Sections 10(b), 14(a) and 20 of the Securities
Exchange Act of 1934 (the "Exchange Act"), Sections 11, 12 and 15 of the
Securities Act of 1933 (the "Securities Act"), the proxy rules and New Jersey
common law. The suit was commenced in United States District Court for the
District of New Jersey, Trenton, on April 5, 1990. The suit alleges that UJB's
reserves for loan losses were inadequate, resulting in inaccurate financial
statements, and that the defendants made misleading positive statements about
UJB's financial condition and failed to disclose negative information about
UJB's lending policies, operations and finances, thus artificially inflating
UJB's earnings and the prices of UJB's securities. The suit further alleges that
UJB's internal credit review and controls were inadequate. The plaintiffs demand
judgment including unspecified money damages, a declaration that all action
taken at the 1990 Annual Meeting is null and void, a declaration that the
shareholder rights plan is void, and attorneys' fees.
UJB and the defendant directors and officers moved to dismiss the
complaint. The District Court granted the motion in part. The plaintiffs
appealed the District Court ruling to the U.S. Circuit Court of Appeals.
Plaintiffs did not appeal dismissal of the derivative claims and voluntarily
discontinued, with prejudice, the claim challenging UJB's 1990 Proxy Statement.
On May 22, 1992 the U.S. Circuit Court of Appeals reversed in part the District
Court's decision insofar as it dismissed certain claims in the complaint and
remanded same to the District Court for further proceedings, including
repleading by the plaintiffs. On March 22, 1993, the plaintiffs served a second
Consolidated Amended Class Action Complaint which contained substantially the
same claims (except for those that had been dismissed) as set forth in the prior
Amended Complaint. UJB and the defendant directors and officers then moved to
dismiss the Second Consolidated Amended Class Action Complaint and each claim
for relief contained therein on various grounds. On September 13, 1993, the
District Court denied the defendants' motion to dismiss the plaintiffs' claims
under the Exchange Act and New Jersey common law and reserved decision on the
motion with regard to plaintiffs' claims under the Securities Act. The
plaintiffs subsequently stipulated to the dismissal with prejudice of their
claims under the Securities Act on October 14, 1993. The defendants filed an
Answer denying the allegations of the Second Consolidated Amended Class Action
Complaint on October 28, 1993. Discovery commenced in January 1994. As permitted
by New Jersey law, the expenses of the individual defendants are being advanced
by UJB. The Board and management of UJB believe the allegations contained in the
lawsuit to be lacking in merit and intend to defend this lawsuit vigorously.
Section 16(a) of the Exchange Act requires UJB's executive officers and
directors, and any persons owning ten percent or more of a registered class of
UJB's equity securities, to file initial statements of beneficial ownership
(Form 3), statements of changes in beneficial ownership (Form 4) and annual
statements of beneficial ownership (Form 5) with the SEC and the New York Stock
Exchange (the "NYSE"). Persons filing such statements are required by SEC
regulation to furnish the Company with copies of all such beneficial ownership
statements filed under Section 16(a) of the Exchange Act.
Based solely on its review of the copies of beneficial ownership statements
received by it, or written representations from certain reporting persons that
no beneficial ownership statements were required for those persons, UJB believes
that during 1993 all beneficial ownership statements under Section 16(a) of the
Exchange Act which were required to be filed by executive officers and directors
of UJB in their personal capacities were filed in a timely manner, with three
exceptions: A required Form 4 was not filed by Dennis Porterfield to report the
purchase of 60 shares of Common Stock by his IRA in August 1993. As a
consequence, Mr. Porterfield also failed to report the February 1993 exercise of
an employee stock option which under SEC rules was exempt from immediate
reporting but subject to reporting in the next required
17
<PAGE> 21
Form 4 or 5. Mr. Porterfield reported both transactions on a Form 5 filed with
respect to 1993. In two instances clerical errors in the Corporate Secretary's
Department resulted in delayed reporting of stock option exercises which were
exempt from immediate reporting under SEC rules but subject to reporting in the
next required Form 4 or 5. A February 1993 exercise of an employee stock option
by Mr. Semrod, which under SEC rules was exempt from immediate reporting was not
reported in the next Form 4 filed in March 1993 reporting a family member's 382
share transaction, but was reported on his Form 5 for 1993. An April 1993
exercise of an employee stock option by Mr. Paneyko, which under SEC rules was
exempt from immediate reporting was not reported on the next Form 4 filed in
July 1993 reporting a family member's 100 share transaction, but was reported in
an amendment to that Form 4 filed in September 1993.
CERTAIN INFORMATION AS TO EXECUTIVE OFFICERS
EMPLOYMENT AGREEMENT
UJB entered into an employment contract with Mr. Semrod when he joined UJB
in 1981. This contract renews annually for a one-year term, unless the contract
is terminated for cause or due to disability or death, or notice of nonrenewal
is given 120 days prior to its April 2d anniversary date. No notice of
nonrenewal has been given. The contract provided for a minimum base salary of
$200,000 per annum, subject to periodic review to reflect the impact of
inflation, performance, and competitive compensation levels. Mr. Semrod's
contract also provides for a cash bonus formula; however, since the
establishment in 1982 of the Incentive Plan which provides for bonuses to key
employees of UJB and its subsidiaries, Mr. Semrod's bonus has been calculated
and paid under that Plan rather than under the contractual formula.
EXECUTIVE SEVERANCE PLAN
In 1986 the UJB Board adopted the UJB Executive Severance Plan for the
purposes of enhancing the ability of UJB to retain existing management and
attract new executives and rewarding key executives for their service to the
Company with reasonable compensation in the event of a termination of their
employment under any of the circumstances set forth in the Plan. Key executives
of the Company are eligible to be selected as Plan participants. The UJB Board
has selected the following executive officers to be Plan participants: T. Joseph
Semrod, John G. Collins, John R. Howell, Stephen H. Paneyko, John R. Haggerty,
Larry L. Betsinger, Alfred M. D'Augusta, William F. Flyge, William J. Healy,
James J. Holzinger, Sabry J. Mackoul, Richard F. Ober, Jr., Dennis Porterfield,
Alan N. Posencheg and Edmund C. Weiss, Jr. Their period of participation will
expire as of December 15, 1999.
The Plan provides that, in the event a participant's employment is
terminated by the Company, other than for Cause (as defined below), death,
disability or retirement, or by the participant for Good Reason (as defined
below), the participant is entitled, for a period of not less than 18 months and
not more than 24 months, or, if earlier, until the participant's death,
disability or retirement, to receive payments based upon the highest rate of
base salary in effect for the participant during the 12-month period preceding
the notice of termination and to remain an active participant in all employee
benefit plans available to employees generally. The participant is also entitled
to receive a prorated annual bonus for the year in which terminated, and to
continue receiving perquisites for 12 months. The salary and employee benefit
plans continuation period would be 24 months for Mr. Semrod and 18 months for
all other current participants.
For purposes of the Plan, "Cause" is defined to mean any of the following:
(i) the willful commission of an act that causes or that probably will cause
substantial economic damage to the Company or substantial injury to its business
reputation; (ii) the commission of an act of fraud in the performance of the
participant's duties; (iii) a continuing willful failure to perform the duties
of the participant's position with the Company or (iv) the order of a bank
regulatory agency or court requiring the termination of the participant's
employment. Willfulness is defined to be an act or failure to act done not in
good faith and without reasonable belief that the action or omission was in the
best interests of the Company.
"Good Reason" for purposes of the Plan is defined to mean any of the
following: (i) the assignment of duties which are inconsistent with, or the
failure to assign duties which are consistent with, the participant's
18
<PAGE> 22
then current title and salary grade; (ii) removal of the participant from, or
any failure to reappoint or reelect the participant to, the highest title held
by him or her during the previous six-month period; (iii) a reduction in the
participant's salary or the failure to grant increases in the participant's
salary comparable to those granted executives of the Company of comparable
title, salary grade and performance ratings; (iv) locating the participant's
office anywhere other than at UJB's (or a subsidiary's) principal executive
offices and (v) the failure by the Company to provide welfare benefits and
perquisites substantially the same as or comparable to those presently provided
to the participant.
In the event a participant becomes entitled to the benefits described above
and the participant subsequently obtains other employment, the participant's
entitlement to the above-described benefits ceases and the participant becomes
entitled to receive instead a lump sum payment equal to 50% of remaining base
salary that would otherwise have been payable to the participant.
TERMINATION AGREEMENTS
The Board of Directors has approved Termination Agreements with certain
executive officers of UJB for the purposes of enhancing the ability of UJB to
retain existing management and attract new executives and of rewarding key
executives for their service to the Company with reasonable compensation in the
event their employment is terminated as provided in the Termination Agreements.
In the Termination Agreements, each officer has agreed that in the event any
person or entity takes certain steps designed to effect a Change in Control (as
defined below) of UJB, he will continue to perform his regular duties and
services for the Company until such person or entity has abandoned or terminated
efforts to effect a Change in Control or until a Change in Control has occurred.
The following executive officers are currently parties to Termination Agreements
with UJB: Messrs. Semrod, Collins, Howell, Paneyko, Haggerty, Betsinger,
D'Augusta, Flyge, Healy, Holzinger, Mackoul, Ober, Porterfield, Posencheg and
Weiss. The Termination Agreements provide that if, within three years after a
Change in Control of UJB, the officer's employment with the Company is
terminated by the Company, other than for Cause (as defined below), death,
disability or retirement, or by the officer for Good Reason (as defined below),
the officer is entitled to receive (i) a lump sum cash payment equal to one
year's base salary at his highest rate in effect during the 12-month period
preceding the notice of termination (not to exceed 2.99 times the average of the
officer's annual compensation payable for the five years immediately preceding
the Change in Control), and (ii) upon retirement an amount of total retirement
benefits equal to that which the officer would have received from retirement
plans of, or employment contracts with, the Company if his employment had
continued for three years beyond his termination date or until his retirement,
if earlier, and his rights were fully vested. The amount by which retirement
benefits payable under the Termination Agreements exceeds the amount of
retirement benefits otherwise payable to the officers represents an unfunded
obligation of the Company for which no amounts have been set aside or accrued. A
Termination Agreement terminates if the officer voluntarily ends his employment
during any period when no effort to effect a Change in Control of UJB is then in
progress.
To come within the terms of the Termination Agreements the Change in
Control of UJB must occur, or efforts designed to lead to a Change in Control of
UJB must commence, before December 29, 1996. A "Change in Control" of UJB is
defined to mean: (i) the acquisition by any person of beneficial ownership of
33 1/3% or more of the combined voting power of UJB's outstanding securities;
(ii) a change in the composition of majority membership of the Board of
Directors over any two-year period; (iii) a change in ownership of UJB such that
UJB becomes subject to the delisting of its Common Stock from the NYSE; (iv) the
approval by the Board of the sale of all or substantially all of the assets of
UJB and (v) the approval by the Board of any merger, consolidation, issuance of
securities or purchase of assets, the result of which would be the occurrence of
any event described in clause (i), (ii) or (iii) above.
The definition of "Cause" for purposes of the Termination Agreements
parallels the definition of that term in the Executive Severance Plan described
above. "Good Reason," for purposes of the Termination Agreements, is defined to
mean: (i) the assignment of duties which are materially different or require
substantially more business travel than duties prior to the Change in Control or
which represent a significant reduction in authority and responsibility; (ii)
removal from, or failure to reappoint or reelect the officer to the highest
office held in the six months prior to the Change in Control; (iii) a reduction
in the officer's salary or
19
<PAGE> 23
the failure to grant increases in salary comparable to those granted officers of
comparable title, salary grade and performance ratings; (iv) the relocation of
UJB's principal executive offices outside New Jersey, a change in the officer's
base location to anywhere other than the Company's principal executive offices
or the failure to pay reasonable relocation expenses where the officer has
agreed to a relocation; (v) the failure to provide the officer with benefits and
perquisites the same as or comparable to those received prior to the Change in
Control or (vi) the failure of UJB to obtain the express written assumption of a
Termination Agreement by any successor to UJB.
PENSION PLANS
UJB maintains a noncontributory pension plan, qualified as a "defined
benefit" pension plan under the Code, which applies to salaried employees,
including executive officers, of UJB and its subsidiaries (the "Basic Plan").
Due to certain benefit restrictions placed on the Basic Plan by the Code, UJB
also maintains a retirement restoration plan and a supplemental retirement plan
applicable to all salaried employees covered by the Basic Plan (the
"Supplemental Plans"). The following table sets forth the estimated total annual
pension benefits payable under the Basic Plan and the Supplemental Plans at
normal retirement (age 65) at the Years of Credited Service and salary levels
indicated:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ANNUAL BENEFIT FOR YEARS OF CREDITED
HIGHEST AVERAGE YEARLY SERVICE INDICATED(A)(B)
BASE SALARY OF -----------------------------------------------------------------
CONSECUTIVE 60 MONTHS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------------------------ -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Earnings
$125,000................. $ 36,406 $ 48,541 $ 60,677 $ 72,812 $ 75,000
(84,947)
$150,000................. 43,906 58,541 73,177 87,812 90,000
(102,447)
$200,000................. 58,906 78,541 98,177 117,812 120,000
(137,447)
$250,000................. 73,906 98,541 123,177 147,812 150,000
(172,447)
$300,000................. 88,906 118,541 148,177 177,812 180,000
(207,447)
$400,000................. 118,906 158,541 198,177 237,812 240,000
(277,447)
$450,000................. 133,906 178,541 223,177 267,812 270,000
(312,447)
$500,000................. 148,906 198,541 248,177 297,812 300,000
(347,447)
$600,000................. 178,906 238,541 298,177 357,812 360,000
(417,447)
$700,000................. 208,906 278,541 348,177 417,812 420,000
(487,447)
$800,000................. 238,906 318,541 398,177 477,812 480,000
(557,447)
</TABLE>
- ---------------
(a) Years of Credited Service are defined by the plan as years of full-time
employment after the employee has attained age 21.
(b) Amounts in parentheses ( ) are amounts payable where the 60% limit of the
Basic Plan does not apply.
Covered compensation, except as described below with respect to Mr. Howell,
includes only base salary and is identical to amounts reported in the Summary
Compensation Table under the column titled "(c) Salary". The benefits listed in
the Pension Plan Table are not subject to offsets for Social Security or other
benefits received by retirees. The listed benefits are those payable if the
straight life annuity method of
20
<PAGE> 24
distribution is chosen. Years of Credited Service under the Basic Plan for the
executive officers listed in the Summary Compensation Table, except as described
below for Mr. Howell, are as follows: Mr. Semrod, 12 years; Mr. Collins, seven
years; Mr. Paneyko, 11 years; Mr. Haggerty, 22 years.
Mr. Semrod's employment contract provides for supplemental retirement
benefits calculated in accordance with the formula of the Basic Plan, but
without regard to the benefit limitations imposed by the Code and the Basic
Plan, and credits Mr. Semrod with years of service commencing February 1, 1963
(an additional 19 years).
Employees and former employees who formerly worked for United Jersey
Bank/Commercial Trust (a predecessor bank to United Jersey Bank), including Mr.
Collins, are covered for service before August 1, 1988 (January 1, 1987 in the
case of Mr. Collins) by a defined benefit, noncontributory pension plan which
provides for benefits lower than those described above for the Basic Plan of
UJB. Mr. Collins has 16 Years of Credited Service under this plan. Such
employees are covered by the Basic Plan and Supplemental Plans for service on
and after August 1, 1988 (January 1, 1987 in the case of Mr. Collins).
Pension benefits payable to employees and former employees of First Valley
and its subsidiaries, including Mr. Howell, are calculated in accordance with
the formula contained in the former First Valley Retirement Plan, which was
merged into the Basic Plan effective December 31, 1990. For the Years of
Credited Service and Average Compensation indicated in the Pension Plan Table,
the First Valley formula provides for benefits lower than those described above
for the Basic Plan. Covered compensation for those individuals covered by the
First Valley formula, including Mr. Howell, includes salary as reported in the
column titled "(c) Salary" of the Summary Compensation Table and the cash bonus
reported, but not separately listed, in the column titled "(d) Bonus" of the
Summary Compensation Table. Mr. Howell's covered compensation for 1993 under the
First Valley formula of the Basic Plan was $379,750. Mr. Howell has 17 Years of
Credited Service under the First Valley formula of the Basic Plan.
Employees of UJB should refer to the more detailed Summary Plan
Descriptions available to them.
2. PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK
The Restated Certificate of Incorporation of UJB presently authorizes the
issuance of up to 65,000,000 shares of Common Stock, par value $1.20 per share.
At February 25, 1994 there were shares of Common Stock issued and
outstanding, shares reserved for maximum possible issuance in the VSB
Bancorp, Inc. acquisition, shares reserved for issuance under the
Company's Dividend Reinvestment and Stock Purchase Plan and shares
reserved for issuance under the Company's various employee benefit plans,
leaving only shares unreserved. Although there are no immediate plans for
issuance of the additional Common Stock that would be authorized by approval of
this proposal, the additional Common Stock would be available for stock splits
and stock dividends, for acquisitions, for sale to raise new equity capital, for
reserves in connection with employee benefit plans, for reserves in connection
with the issuance of convertible debt or convertible preferred stock issues or
for other corporate purposes deemed to be in the best interests of the Company
and its shareholders. The Board of Directors therefore recommends to the
shareholders that they approve the amendment to the Restated Certificate of
Incorporation of UJB which would increase authorized Common Stock from
65,000,000 to 130,000,000 shares to give UJB the ability to take prompt
advantage of market conditions and avoid the expense and delay, and possible
loss of opportunity, that could result if a need for additional authorized
Common Stock arose but a special meeting of shareholders first had to be held to
authorize the issuance of the stock.
UJB has not proposed an increase in the number of authorized shares of
Common Stock since the Annual Meeting of Shareholders in April 1987, when
shareholders approved an increase in the authorized Common Stock from 40,000,000
shares to 65,000,000 shares. Subsequent to that approval and increase, UJB
issued approximately 10 million shares of Common Stock in the merger with First
Valley Corporation (1988), four million shares of Common Stock in a public
offering (1992) and approximately shares of Common through its
Dividend Reinvestment Plan and expects to issue approximately three million
shares in
21
<PAGE> 25
the merger with VSB Bancorp, Inc. The remaining authorized but unissued and
unreserved Common Stock would not be sufficient to permit the Board to approve
similar issuances of Common Stock in the future, including issuances of Common
Stock for the purpose of raising additional capital in support of the
acquisition of bank branches and other assets. Additionally, prior to the last
increase in authorized Common Stock, UJB issued Common Stock in connection with
two 3-for-2 stock splits (September 1985 and September 1986). While the Board of
Directors has no present plan to declare a stock split, it deems the ability to
do so when circumstances warrant to be desirable. Currently, however, there are
not sufficient authorized but unissued and unreserved shares to declare such a
stock split, the purpose of which would be to ensure that UJB's shares are
affordable to investors and to ensure that a sufficient number of shares are
available for trading.
The first paragraph of Article 3 of the Restated Certificate of
Incorporation of UJB would be amended by deleting the material in brackets
([ ]) below and adding the material in boldface.
3. The total number of shares of capital stock authorized and which
may be issued by this Corporation is ONE HUNDRED THIRTY-FOUR MILLION
(134,000,000) [Sixty-Nine Million (69,000,000)] shares, of which ONE
HUNDRED THIRTY MILLION (130,000,000) [Sixty-Five Million (65,000,000)]
shares of One and 20/100 Dollars ($1.20) par value each shall be designated
as Common Stock, and of which Four Million (4,000,000) shares without par
value shall be designated as Preferred Stock. All or any part of such
authorized Common Stock and Preferred Stock may be issued by the
Corporation from time to time and for such consideration as may be
determined upon and fixed by the Board of Directors as provided by law.
Under New Jersey law the Board of Directors has authority to set the terms
and conditions of issuance of the proposed additional Common Stock. Holders of
shares of Common Stock are not entitled to preemptive or preferential rights to
subscribe for or purchase any part of any new or additional issue of Common
Stock. The Board may issue any authorized and unissued Common Stock without
further shareholder vote, unless required for a particular transaction by
applicable law or rules of the NYSE. NYSE rules presently require shareholder
consent in connection with any transaction or series of related transactions,
other than a public offering for cash, (i) if the Common Stock (including
securities convertible into or exercisable for Common Stock) has or will have
upon issuance, voting power equal to or in excess of 20% of the voting power
outstanding before the issuance of such Common Stock; (ii) if the number of
shares of Common Stock to be issued is or will be equal to or in excess of 20%
of the number of shares outstanding before the issuance of the Common Stock; or
(iii) if the issuance would result in a change in control of the Company.
As described in the first two paragraphs of this proposal, there are
appropriate business purposes for the increase in authorized Common Stock which
are unrelated to any potential anti-takeover effect. However, the availability
for issuance by the Board of Directors, without shareholder approval, of the
additional shares of Common Stock could be viewed as having an "anti-takeover
effect." Such additional shares of Common Stock (as well as the already
authorized but unissued shares of Common Stock and Preferred Stock of UJB)
could, within the limits of applicable law and the rules of the NYSE, be issued
by the Board of Directors to a holder who might join the Board in opposing a
takeover offer or other effort to change or influence control of UJB which was
opposed by the Board. The potential for issuance of such securities could have,
under certain circumstances, the effect of discouraging any such proposal and
the issuance of such securities could have, under certain circumstances, the
effect of defeating any such proposal. The proposed amendment to increase the
authorized Common Stock is not being recommended in response to any specific
effort of which the Company is aware to obtain control of the Company. Further,
the Board of Directors does not have any current plans to use the issuance of
additional shares of Common Stock for anti-takeover purposes.
UJB's Restated Certificate of Incorporation contains other provisions
approved by the shareholders in 1990 which have or could be considered to have
an anti-takeover effect. The Restated Certificate of Incorporation contains a
provision which divides the Board into three classes, each of which serves a
three-year term. The classified board has the effect of making it more difficult
for a person holding a significant percentage of the Company's Common Stock to
replace the entire Board of Directors. Without a classified board, a potential
acquiror could at a single meeting of shareholders obtain control of the Board
and unilaterally approve an acquisition or other transaction that might not
provide all shareholders with adequate
22
<PAGE> 26
consideration for their investment in UJB or treat all shareholders equally. In
addition to any anti-takeover purposes, the Board also intended that the longer
time period required to elect a majority of a classified board would contribute
to the continuity and stability of the Company's affairs and policies.
The Restated Certificate of Incorporation also contains a provision which
helps ensure that the protections intended by the classified board will not be
circumvented by an increase in the number of Board positions. The Restated
Certificate of Incorporation requires that resolutions increasing the number of
directors be approved by 80% of, as the case may be, directors holding office or
shares of capital stock of the Company entitled to vote generally in the
election of directors, voting as a single class.
Separately, the Restated Certificate of Incorporation requires that any and
all actions by the shareholders of the Company be taken at a duly called annual
or special meeting of UJB's shareholders or pursuant to a unanimous written
consent of shareholders. This provision enhances the likelihood that all
proposed shareholder actions will be considered at a meeting of the shareholders
after advance notice of the proposed action and adequate information is
distributed.
The Restated Certificate of Incorporation requires that any attempt to
amend, alter, repeal or take any action inconsistent with any of the provisions
described above -- the classified board of directors, the 80% approval
requirement for increases in the number of Directors, the restriction limiting
shareholder action to meetings and unanimous written consents -- become
effective only if approved by the affirmative vote of the holders of 80% or more
of the combined voting shares of the Company, voting as a single class. The
requirement of an 80% or more affirmative shareholder vote for amendment or
repeal gives a minority of the shareholders a veto power over any changes to the
above-described provisions in UJB's Restated Certificate of Incorporation and
prevents a shareholder with a majority of the voting power of UJB's voting stock
from avoiding the requirements of these provisions by simply repealing them.
In addition, the Company has in effect a shareholder rights plan (the
"Rights Plan") pursuant to which each holder of shares of Common Stock
outstanding on August 28, 1989 received, and each holder of shares of Common
Stock issued subsequent to that date will receive, one preferred stock purchase
right (a "Right") for each share of Common Stock held. Each Right entitles the
holder to buy, upon the occurrence of certain takeover-related events,
one-hundredth of a share of a new series of Preferred Stock, designated the
Series R Preferred Stock, having "supervoting" rights and extraordinary rights
to certain dividends and distributions upon liquidation or merger. In addition,
upon the occurrence of certain additional takeover-related events, holders of
the Rights are entitled to purchase either shares of the Series R Preferred
Stock or shares in an "acquiring person" at half the fair market value of the
shares. Such a consequence would be substantially dilutive to the acquiring
person because the Rights Plan precludes an acquiring person from exercising the
Rights otherwise attached to its shares. The Board of Directors has the power to
redeem the Rights within 10 days of the triggering event or in connection with a
business combination it has approved. The combination of prohibitive dilution of
the acquiring person's share values and the power of the Board to redeem the
Rights is intended to encourage potential acquiring persons to negotiate with
the Company's Board of Directors with respect to the terms of any acquisition or
business combination and, to the extent possible, discourage or defeat partial
or two-tiered acquisition proposals. This result is generally viewed as having
an anti-takeover effect.
The By-Laws of UJB also contain provisions which have or could be
considered to have an anti-takeover effect. These provisions (i) empower the UJB
Board to adopt rules and regulations governing meetings of UJB shareholders and
empower the chairman of a meeting of UJB shareholders, subject to the rules and
regulations adopted by the UJB Board, to adopt such rules, regulations and
procedures and to take such acts which the chairman deems necessary, appropriate
or convenient for the proper conduct of a shareholder meeting, and (ii)
establish rules governing nominations for director made at meetings of
shareholders and empower the chairman of the meeting to disallow nominations
which are not made at least 70 days in advance of the particular meeting or
which otherwise fail to comply with the conditions prescribed by the By-Laws.
The foregoing By-Law provisions address legitimate concerns of the Board to
provide for the safety of all shareholders and officers of UJB in attendance at
shareholder meetings and to prevent costly or disorderly disruptions at meetings
of the shareholders which undermine the interests of shareholders as a whole.
23
<PAGE> 27
The executive compensation and termination agreements and plans described
on pages through of this Proxy Statement and the stock plans described on
pages through could also be viewed as discouraging takeovers.
The Board cannot determine at the present time when, or for what purposes,
the issuance of any authorized but unissued Common Stock will occur, as such
decisions will be dependent largely upon market conditions or other factors
existing at that time. Shareholders should recognize that, although the Board of
Directors will issue Common Stock or convertible securities only when it
considers such issuance to be in the best interests of UJB, the issuance of
additional Common Stock or securities convertible into Common Stock, may, among
other things, have a dilutive effect on earnings per share of Common Stock and
on the equity and voting rights of holders of Common Stock.
The Company's consolidated financial statements, management's discussion
and analysis of the financial statements, selected financial data and selected
quarterly financial data appear on pages to of UJB's 1993 Annual Report to
Shareholders which accompanies this proxy statement. Such information from the
UJB's 1993 Annual Report to Shareholders is incorporated herein by reference.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL NO. 2.
3. SELECTION OF AUDITORS
The Board of Directors recommends that the shareholders ratify the
selection of KPMG Peat Marwick, independent certified public accountants, to
audit the accounts of UJB for 1994.
Representatives of KPMG Peat Marwick, who were also UJB's auditors for the
year 1993, are expected to be present at the Annual Meeting. They will have the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL NO.
3.
24
<PAGE> 28
4. SHAREHOLDER PROPOSAL RELATING TO
CUMULATIVE VOTING
UJB has received the following shareholder proposal from John J. Gilbert,
1165 Park Avenue, New York, N.Y. 10128-1210, who owns or represents a total of
999 shares of stock, and has been advised by the shareholder that it is his
intention to present the proposal for consideration at the 1994 Annual Meeting:
RESOLVED: That the stockholders of UJB Financial Corporation, assembled in
annual meeting in person and by proxy, hereby request the Board of Directors to
take the steps necessary 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.
REASONS: In the merger with First Valley Corporation in 1987, First Valley
had cumulative voting.
Because of various troubles and write offs the dividend was cut and still
has not been restored to what it was before it was cut.
While, perhaps, in our opinion, UJB has done better then many other banks
that have failed because of not having cumulative voting, we still see the need
for additional directors to speed up the resumption of a full dividend and
higher. The shareowners should have the right to select independent directors of
their choice with cumulative voting.
A law enacted in California provides that state pension holdings, as well
as state college funds, invested in shares be voted in favor of cumulative
voting proposals, showing increasing recognition of the importance of this
democratic means of electing directors. Also, twenty states still have it
mandatory.
The National Bank Act provides for cumulative voting. Unfortunately, in
many cases companies get around it by forming holding companies without
cumulative voting. Thus, with many failures the result is that tax payers have
to make up the losses. Banking authorities have the right to question the
capability of directors to be on banking boards. Unfortunately, in many cases
authorities come in after and say the director or directors were not qualified.
So there is no reason why this could not be done for corporations under the SEC
and banking authorities.
Many successful corporations have cumulative voting. For example, Pennzoil
having cumulative voting defeated Texaco in that famous case. Another example is
Ingersoll-Rand, which has cumulative voting, won two awards. In FORTUNE magazine
it was ranked second as "America's Most Admired Corporations" and the WALL
STREET TRANSCRIPT noted "on almost any criteria used to evaluate management,
Ingersoll-Rand excels." We believe UJB Financial should follow their example.
Please mark your proxy for this resolution.
RESPONSE OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
AGAINST THIS PROPOSAL.
Your Board of Directors opposes cumulative voting for the election of
directors because it would allow holders of a minority of the Company's shares
to elect one or more special-interest directors. The Board believes that a
cohesive group of individuals able to work together in a timely and decisive
manner on critical matters affecting the Company, with broad accountability to
all shareholders, is necessary to provide effective leadership for UJB and
PROTECT YOUR INVESTMENT.
The only purpose of cumulative voting is to allow a special interest group
to elect individuals beholden to the narrow bias of that constituency by
"stacking" votes, rather than directors dedicated to the best interests of all
shareholders, contrary to the principle of law that, once elected, each director
must represent all shareholders. Given the number of partisan special interest
groups and the wide divergency of interest, the proponent urges adoption of a
voting system which could, at its worst, lead to factionalism, instability and
paralysis of the Board of UJB, which would undermine the confidence of its
customers.
25
<PAGE> 29
Contrary to the statement in the proposal, cumulative voting is not part of
the democratic political process. The election system provided for by UJB's
Restated Certificate of Incorporation and that of most other large public
companies is the norm under the laws of New Jersey, Pennsylvania, Delaware, and
New York. There is no evidence that cumulative voting produces more qualified
directors than the normal system. Nine of your twelve current directors
recommending against this proposal are independent from management and are not
and have never been employees of UJB.
The shareholder who submitted this proposal to change our system for
electing directors, as he did last year to 28 other companies, none of whose
shareholders approved it, has never proposed any person to the UJB Nominating
Committee.
The adoption of this proposal would not result in cumulative voting, as the
proposal is only a recommendation to the Board of Directors. An amendment to the
UJB Restated Certificate of Incorporation would have to be adopted by the Board
and voted on by the shareholders, at additional expense to the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL
NO. 4.
5. SHAREHOLDER PROPOSAL RELATING TO
CONFIDENTIAL VOTING
UJB has received the following shareholder proposal from Edward G. Lodge, 5
Silver Lake, Clayton, N.J. 08312, who owns 5,682 shares of stock, and has been
advised by the shareholder that it is his intention to present the proposal for
consideration at the 1994 Annual Meeting:
WHEREAS, the company uses a system of proxy voting that does not ensure
confidentiality:
WHEREAS, in my opinion, such a non-confidential system undetermines
corporate democracy by creating the potential for undue pressure on
shareholders:
WHEREAS, IF proxies are not kept SECRET, there exist the potential
temptation for undue management pressure and/or coercion on shareholders who are
owners, suppliers, loan customers and employees of the company.
WHEREAS, I believe that confidential voting is necessary to preserve the
integrity of the proxy system:
RESOLVED, that the shareholders request that the Board of Directors:
Take all necessary steps to implement a system of confidential voting
whereby (a) all proxies, ballots and voting tabulations that identify
shareholders shall be kept secret and (b) independent third parties shall
tabulate such votes."
The following is the statement submitted in support of this proposal:
I. CONFIDENTIAL VOTING IS ESSENTIAL TO CORPORATE DEMOCRACY AND PREVENTS ANY
APPEARANCE OF IMPROPRIETY IN THE PROXY PROCESS
Just as the secret ballot is a cornerstone of American political democracy,
we believe that confidential voting is vital to corporate democracy. In our
view, the value of the value of the shareholder's right to exercise a proxy is
greatly diminished if management can monitor how particular shareholders vote.
II. CONFIDENTIAL VOTING HELPS TO ENSURE A LEVEL PLAYING FIELD IN PROXY CONTESTS
The current non-confidential voting system gives management an unfair
advantage in proxy contests. By allowing management to monitor how particular
shareholders vote, non-confidential voting provides management with an
opportunity to resolicit proxies in support of its position and exposes
management to the temptation to pressure and/or coerce shareholders,
particularly in a financial institution, where the shareholders are also
suppliers, loan customers and/or employees of the Bank. Shareholders who submit
proposals, such as this, are denied this opportunity because they do not have
access to proxies already submitted. Confidential voting will help insure a
level playing field by eliminating the possibility of management resolicitation.
26
<PAGE> 30
III. CONFIDENTIAL VOTING PRESERVES SHAREHOLDERS' INVESTMENT VALUE.
I believe that one of the key attributes of stock ownership is the ability
to vote on proxy matters without the potential for coercion or unfair influence.
The ability to vote freely on proxy matters affords shareholders a voice in
shaping the Company's future on issues of importance to them. Because of the
potential for coercion or reprisal, non-confidential voting undermines this key
attribute of stock ownership and may diminish the value of the stock
accordingly.
Our proposal calling for a system of confidential voting is not intended to
inhibit communications between shareholders and management nor to imply that
management has abused the voting process in the past. Our proposal simply seeks
to bring the practices of the Company into line with a democratic system of
voting which eliminates any possibility or appearance of improper influence and
which has already been adopted by a number of other major corporations.
If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it unless you have marked to abstain.
RESPONSE OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
AGAINST THIS PROPOSAL.
Your Board of Directors believes that this confidential voting proposal
DOES NOT IN ANY WAY PRESERVE SHAREHOLDERS' INVESTMENT VALUE, will probably
increase costs to the company, and is not in the best interests of UJB
shareholders. We believe that the existing system of free and open proxy voting,
used by the majority of public companies for many years, protects shareholders'
interests and assures that the fiduciary responsibilities of those who represent
the individual beneficiaries of the investment and pension funds which invest in
UJB are fully disclosed.
As a shareholder, you have the ability to vote confidentially simply by
holding shares in "street" name through a bank, broker or other nominee. Your
Board believes that this proposal to keep shareholder votes secret is therefore
unnecessary and may result in additional expense. Many of you choose to hold
your shares "of record" precisely because you want the Board of Directors and
management to know exactly how you, as the Company's owners, feel on various
issues. Some shareholders use their proxy cards to express views or explain
their votes. The Board would regret any change which would discourage this
convenient and cost-free means of communication for shareholders, particularly
those unable to attend the Annual Meeting.
We also believe that members of your Board and others who may solicit
proxies on their behalf should continue to have the opportunity to contact
shareholders for a variety of reasons. They may need to contact shareholders
whose proxy cards contain obvious errors or deficiencies so that they may
correct their proxies and cast their votes as intended, or shareholders who have
not returned their cards in order to encourage their participation and help
assure a legally sufficient and substantial vote.
Many shares today are held by large institutions, such as mutual funds,
pension funds and banks, which have a fiduciary duty to vote those shares in the
best interests of their shareholders, beneficiaries and customers. Concern has
been expressed as to the concentration of corporate voting power in the hands of
a few persons at these institutions who are not elected by anyone. Your Board of
Directors believes that full disclosure of their decisions is in the best
interests of the Company and its shareholders and will promote accountability.
We believe that the present system of vote tabulation continues to work
effectively and efficiently and maximizes communication between shareholders and
the Board of Directors, and we see no reason to change to a more complex and
expensive system.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL
NO. 5.
27
<PAGE> 31
6. SHAREHOLDER PROPOSAL RELATING TO
MANAGEMENT COMPENSATION
UJB has received the following shareholder proposal and has been advised by
the shareholder that it is his intention to present the proposal for
consideration at the 1994 Annual Meeting.
Pursuant to S.E.C. regulation, this is a formal notice to UJB Financial
Corp. that at the 1994 Annual Meeting, I, Theodore J. Cole, 24 Alyson Place,
Bloomfield, N.J. 07003-5504, owner of 700 shares, will cause to be introduced
the following proposal.
RESOLVED: That the stockholders of UJB attending the annual meeting in
person or by proxy hereby request the Board of Directors implement the necessary
action of democracy by representing the majority of common stock owners and
commence downsizing or freezing all forms of compensation to the CEO, all
management and directors for the sole purpose to restore our dividends to the
1989 level -- NOT BE A ONE CENT QUARTERLY INCREASES.
REASON 1. Last year, 25 per cent of the vote was cast for my resolution. My
NEW resolution was presented OCTOBER 25, 1993 (near deadline) whereas on
DECEMBER 15, the Board of Directors increased the dividend by FIVE cents,
quarterly.
REASON 2. There is an increasing outcry in America for reduction of
excessive compensation as heralded by all news media and more recently by very
militant billion-dollar pensions, including aggressive mutual funds for more
income, plus groups such as United Shareholders of America in Washington, D.C.
As I write this (10-25-93), ANHEUSER BUSCH announced PAY FREEZES FOR ALL TOP
MANAGEMENT AND ELIMINATION OF MIDDLE MANAGEMENT. The CEO of IT&T cut his
compensation by 20% and 10% for all management. Salomon Brothers last year fired
many million-dollar managers as surplus IN ORDER TO ENHANCE SHAREHOLDERS INCOME.
The list grows daily. Bankers apparently will be the last ones to realize what
the economy will be 94-95 until Congress mandates cuts in compensation.
REASON 3. Excessive compensation by banks is attracting non-banking
competitors such as General Motors, GE, AT&T and some pay higher interest on
their savings account, offer better credit cards, loans and discounts. Even our
Chairman, Mr. Semrod warned the New Jersey Banking Association two years ago
that the banks LOST 1.1 TRILLION DOLLARS to mutual funds FOREVER since 1970. Our
management has been increasing their compensation EVERY YEAR while we nearly
lost the bank, saw our stock drop to $6.50, dividend slashed to 60 cents and
always telling stockholders they have to have incentives to retain employees. In
today's economy, there is talent willing to work for one-third or half as much.
Other banks, such as First Fidelity increased dividends substantially twice and
successfully sold additional shares similar to Midlantic Bank. Isn't this their
Job?? It is my opinion, UJB is overpriced by rumors of merger or buy-out. Better
quality banks are selling for much less.
REASON 4. After nearly 50 years of effort, we shareowners are able to VOTE
on compensation and the SEC did us a favor to mandate a more understandable and
transparent SUMMARY OF COMPENSATION: Total up the CEO's salary and cash-stock
bonus, OTHER COMPENSATION (which they are not required to divulge) must be
estimated by you. Counsel advised CEO earned $85,336 OTHER COMPENSATION(2). The
other stock options have value. Contact a bank officer of UJB for explanation.
Compare this TOTAL COMPENSATION with what the ordinary bank teller earns or a
New Jersey resident. Every million is about $20,000 per week.
REASON 5. Please mark your choice for my resolution and sign. DO NOT
ABSTAIN as a passive owner but I can appreciate how employees or vendors feel
about a non-secret vote.
RESPONSE OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
AGAINST THIS PROPOSAL FOR THE FOLLOWING REASONS:
Your Board of Directors has stated that it has the goal of restoring the
dividend to the 1989 level and increasing it even beyond that rate. In line with
improving earnings, the Board delivered a substantial down payment on that goal
in 1993, increasing the dividend TWICE during the year for a 40% AGGREGATE
ANNUAL INCREASE in the UJB dividend.
28
<PAGE> 32
Your Board counts on UJB's managers, from branch manager to CEO, to
continue to increase earnings, so the dividend may be increased further. Your
Board believes that freezing compensation for all management would have a
NEGATIVE effect on long-term earnings.
The compensation of senior officers is determined by a Compensation
Committee of the Board, consisting solely of independent Directors who have
never been employees of UJB. The Board believes that its compensation policies
and programs are fair and reasonable for both employees and shareholders, as
described in its report beginning on page of this Proxy Statement.
Please consider the following in your evaluation of this proposal:
- The proponent feels that UJB stock is overpriced, and took advantage of
it to reduce his UJB stockholding from 1,900 shares to 700 shares in the
last year.
- The "United Shareholders of America" cited by the author as supporting
similar proposals, ANNOUNCED ON OCTOBER 27, 1993 THAT IT WAS DISBANDING,
having accomplished its objective of broadening the public debate on how
corporations deal with their shareholders (WASHINGTON POST, October 28,
1993).
- The proponent claims that non-bank competitors are being attracted to
our industry due to excessive compensation; Ford Motor Company and
Sears, Roebuck & Co. HAVE RECENTLY SOLD or announced plans to sell their
banking subsidiaries.
- Mr. Semrod did not say that "banks had lost 1.1 trillion dollars to
mutual funds FOREVER," in his October, 1992 speech. In fact, Mr. Senrod
noted that while the assets of banks had grown, the assets of mutual
funds had grown more quickly, and that UJB and other banks needed to
respond to the challenge and regain those dollars.
- The proponent misunderstood a communication from UJB's counsel; Mr.
Semrod's "other income," from the company was $21,160.85, not $85,336.
- The proponent states that First Fidelity raised the dividend twice for
an aggregate increase of 23% while failing to note that UJB increased
its dividend an aggregate of 40%. He also states that MidLantic sold
additional shares while failing to note that UJB sold $68 million of new
shares in 1992.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST PROPOSAL NO.
6.
OTHER MATTERS
SOLICITATION OF PROXIES
Proxies may be solicited by mail, telephone, telegram, facsimile
transmission or other electronic methods and personal meetings and interviews.
Certain executive officers and managerial and administrative employees of UJB
and its subsidiaries may solicit proxies on behalf of UJB, for which such
officers and employees will receive no additional compensation other than
reimbursement for actual expenses incurred in connection therewith. UJB has
retained Georgeson & Company Inc. to assist in the solicitation of proxies for a
fee $10,000, plus reasonable out-of-pocket expenses. UJB will also reimburse
brokers or other persons holding shares in their names or in he names of their
nominees for their reasonable out-of-pocket expenses in forwarding proxies and
proxy material to the beneficial owners of such shares. UJB will bear all of the
expenses incurred in connection with this solicitation.
SHAREHOLDER PROPOSALS
The Board of Directors will consider and include in the Proxy Statement for
the 1995 Annual Meeting proposals which meet the regulations of the Securities
and Exchange Commission and New Jersey law. In order to be considered for
inclusion, proposals must be received on or before November 11, 1994. Proposals
should be addressed to the Secretary.
The By-Laws of UJB provide that shareholder proposals which do not appear
in the Proxy Statement may be considered at a meeting of shareholders only if
written notice of the proposal is received by the
29
<PAGE> 33
Secretary of UJB not less than 70 and not more than 90 days before the date of
the meeting; provided, however, that, if less than 80 days' notice or prior
public disclosure of the date of the meeting has been given to shareholders,
such notice, to be timely, must be received by the Secretary not later than the
close of business on the tenth day following the day on which notice of the
meeting or such public disclosure was made, whichever first occurs. Any such
notice by a shareholder to the Secretary of UJB must be accompanied by (a) the
name and address of the shareholder who intends to present the proposal for a
vote, (b) a representation that such shareholder is a holder of record of shares
entitled to vote at the meeting, (c) a description of all agreements,
arrangements or understandings between such shareholder and any other
shareholder relating to the proposal to be voted on and any financial or
contractual interest of such shareholder in the outcome of such vote and (d)
such other information regarding the proposal to be voted on and the shareholder
intending to present the proposal for a vote as would be required to be included
in a proxy statement soliciting the vote of shareholders in respect of such
proposal pursuant to the proxy rules of the SEC.
The vote of a plurality of the shares cast at the Annual Meeting is
necessary to elect the five Directors. The vote of a majority of shares cast at
the Annual Meeting is necessary to approve the amendment to the Restated
Certificate of Incorporation of UJB increasing authorized Common Stock, to
ratify the selection of independent certified public accountants and to adopt
Proposals No. 4, 5 and 6. For the purposes of determining the number of votes
cast with respect to a matter, only those cast "for" or "against" are included.
Abstentions on the proxy card will not be counted "for" or "against" but present
and not voting. "Broker non-votes" specified on proxies returned by brokers
holding shares for beneficial owners who have not provided instructions as to
voting on this proposal will be treated as not present for voting on this issue.
We urge you to sign, date and mail the white proxy enclosed with this
mailing, in the postage-paid envelope provided, as promptly as possible.
We sincerely hope that you will attend the meeting.
Dated: March 11, 1994
BY ORDER OF THE BOARD OF DIRECTORS
T. JOSEPH SEMROD
Chairman, President and
Chief Executive Officer
IT IS IMPORTANT THAT YOUR SHARES ARE VOTED AT THE ANNUAL MEETING.
SHAREHOLDERS ARE URGED TO PROMPTLY SIGN, DATE AND MAIL THE WHITE PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. PLEASE ACT TODAY.
30
<PAGE> 34
(MAP)
NOTICE
ADMITTANCE TO THE ANNUAL MEETING
In order to accommodate our shareholders, admission to the Annual Meeting must
be limited to shareholders, proxies, press and meeting staff. Two Welcome Desks
will be set up to greet meeting attendees. If you hold stock in you own name,
please proceed to the RECORD HOLDER Welcome Desk when you arrive. If you hold
stock through a bank, broker or otherwise, please proceed to the STREET NAME
Welcome Desk and please be prepared to furnish an account statement from your
bank or broker, a copy of a proxy card mailed to you, or other proof of
ownership of UJB Financial Corp. Common Stock. THOSE PERSONS WITHOUT SUCH PROOF
WILL BE DELAYED UNTIL THE MEETING STAFF DETERMINES THERE IS ADEQUATE SEATING FOR
ALL ATTENDEES AND MAY BE DENIED ADMITTANCE ALTOGETHER IF SEATING SPACE IS JUDGED
INADEQUATE.
Attendees should at all times wear the official nametags provided by the Welcome
Desks so the meeting staff is readily able to identify you as someone admitted
to the meeting in accordance with the procedures administered by the Welcome
Desks. If you own stock in your own name and plan to attend the Annual Meeting,
please mark the appropriate box on the proxy card. If you wish to attend the
Annual Meeting but will not be submitting a proxy card with the appropriate box
marked, please notify UJB at the following address as soon as possible:
Corporate Secretary, ATT: Annual Meeting Admission, UJB Financial Corp., 301
Carnegie Center, P.O. Box 2066, Princeton, NJ 08543-2066. Doing this will allow
us to prepare your official nametag in advance and eliminate unnecessary delays
upon your arrival at the Annual Meeting.
<PAGE> 35
[UJB FINANCIAL Logo]
Proxy Solicited on Behalf of the Board of Directors
of UJB for the Annual Meeting on April 25, 1994
The undersigned hereby constitutes and appoints T.J. Dermot Dunphy,
Elinor J. Ferdon and Henry S. Patterson II, and each of them, his or her true
and lawful agents and proxies with full power of substitution in each, to
represent and vote all shares owned by the undersigned at the Annual Meeting of
Shareholders of UJB FINANCIAL CORP. to be held at The Hyatt Regency Princeton,
102 Carnegie Center, Route 1 at Alexander Road, Princeton, New Jersey on Monday
April 25, 1994, and at any adjournments thereof, on all matters coming before
said meeting.
The shares represented by this Proxy will be voted as specified below
and on the reverse side hereof, but if no specification is made, the proxies
intend to vote FOR the election of the nominees listed in the Proxy Statement
and FOR Proposals 2 and 3, and AGAINST Proposals 4, 5 and 6, all as more fully
described in the accompanying Proxy Statement.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR ITS NOMINEES
AND THE FOLLOWING PROPOSALS
1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all
nominees below
T.J. Dermot Dunphy, Fred G. Harvey, Francis J. Mertz, T. Joseph Semrod,
George L. Miles
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name below.)
- ------------------------------------------------------------------------------
2. Increase in Authorized Common Stock
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of Independent Accountants
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued and to be signed and dated on the reverse side)
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE FOLLOWING PROPOSALS
4. Cumulative Voting [ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Confidential Voting [ ] FOR [ ] AGAINST [ ] ABSTAIN
6. Management Compensation [ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies named above are authorized to vote upon such
other business as may properly come before the Meeting or any adjournments
therof. The sumission of this proxy, if properly executed, revokes all prior
proxies.
----------------------------------
----------------------------------
SIGNATURE(S)
----------------------------------
DATE
Please date and sign exactly as name
appears hereon. Joint owners should
each sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.
[ ] Please mark this box if you plan
to attend the Annual Meeting.
<PAGE> 36
APPENDIX TO ELECTRONIC FORMAT DOCUMENT
Printed on the back cover of the Notice and Proxy Statement is a map
showing directions to the Annual Meeting location.
