SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting Material Pursuant to [ss]240.14a-11(v) or [ss]240.14a-12
SUMMIT BANCORP
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(Name of Registrant as Specified In Its Charter)
SUMMIT BANCORP
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[LOGO]
301 Carnegie Center
P.O. Box 2066
Princeton, New Jersey 08543-2066
T. Joseph Semrod
Chairman of the Board and
Chief Executive Officer
March 7, 2000
Dear Fellow Shareholder
You are cordially invited to attend the Annual Meeting of Shareholders of Summit
Bancorp. scheduled to be held on Friday, April 14, 2000, at 10:00 a.m. at The
Hyatt Regency Princeton,102 Carnegie Center, Route 1 at Alexander Road,
Princeton, New Jersey. Your Board of Directors and management look forward to
personally greeting those shareholders able to attend.
At the meeting, shareholders will be asked to elect seven directors and to
ratify the selection of KPMG LLP, independent certified public accountants, to
audit the accounts of Summit for 2000. We will also report to you on Summit'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 vote your shares by telephone, via
the Internet or by mail, in the manner described in the attached Proxy
Statement. Your prompt cooperation is appreciated.
On behalf of your Board of Directors, thank you for your continued support.
Sincerely,
/s/ T. JOSEPH SEMROD
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<PAGE>
SUMMIT
Bancorp [LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FRIDAY, APRIL 14, 2000
TO OUR SHAREHOLDERS
The Annual Meeting of the shareholders of Summit Bancorp. is scheduled to
be held at The Hyatt Regency Princeton, 102 Carnegie Center, Route 1 at
Alexander Road, Princeton, New Jersey, on Friday, April 14, 2000 at10:00 a.m. to
vote on these proposals:
1. To elect seven directors.
2. To ratify the selection of KPMG LLP, independent certified public
accountants, to audit the consolidated financial statements of
Summit Bancorp. and its subsidiaries for the year ending December
31, 2000.
3. 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 15, 2000 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 vote your shares by
telephone, via the Internet or by mail, in the manner described in the attached
Proxy Statement. Please act today.
By order of the Board of Directors
RICHARD F. OBER, JR.
Secretary
March 7, 2000
PLEASE VOTE YOUR SHARES BY TELEPHONE, VIA THE INTERNET OR BY MAIL, IN THE
MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT. 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>
PROXY STATEMENT
The mailing address of the corporate headquarters of Summit Bancorp 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 on approximately
March 7, 2000 to shareholders of record as of February 15, 2000. A copy of the
1999 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. The Board of Directors
does not know of any matter that will or may be presented at the Annual Meeting
other than those described in this Proxy Statement. Under New Jersey law, only
proposals set forth in the Notice of Annual Meeting may be considered at the
Annual Meeting. See "Shareholder Proposals" at p. 24 for a discussion of
Summit's By-Law procedures and Securities and Exchange Commission ("SEC")
regulations relating to shareholder proposals. If any matters not currently
known to the Board of Directors arise at the Annual Meeting, the persons named
as proxies intend to vote the shares they represent in accordance with their
judgment.
Your vote is important and you are encouraged to vote your shares today.
Shareholders of record may vote by telephone, via the Internet or by mail. You
can vote your shares by telephone by calling the toll-free telephone number on
your proxy card. Telephone voting is available 24 hours a day. Easy-to-follow
voice prompts allow you to vote your shares and confirm that your instructions
have been properly recorded. Our telephone voting procedures are designed to
authenticate shareholders by using individual control numbers. If you vote by
telephone you do not need to return your proxy card. You can also choose to vote
via the Internet. The web site for Internet voting is on your proxy card.
Internet voting is available 24 hours a day. As with telephone voting, you will
be given the opportunity to confirm that your instructions have been properly
recorded. If you vote via the Internet you do not need to return your proxy
card. If you choose to vote by mail, simply mark the enclosed white proxy card,
date and sign it, and return it to Equiserve, First Chicago Trust Division in
the postage-paid envelope provided. If your shares are held in the name of a
bank, broker or other holder of record, you will receive instructions from the
holder of record that you must follow in order for your shares to be voted. 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 and FOR the second proposal set forth in the Notice of
Annual Meeting of Shareholders and this Proxy Statement.
If you participate in Summit's Dividend Reinvestment and Stock Purchase
Plan (the "Dividend Reinvestment Plan"), you will receive a single proxy
covering both the shares of Summit common stock you hold in certificate form and
the shares of common stock held in your Dividend Reinvestment Plan account by
the Dividend Reinvestment Plan Administrator. If a proxy is not returned, shares
of common stock represented by the proxy, including any held under the Dividend
Reinvestment Plan, will not be voted.
Individuals who hold common stock through participation in Summit's Savings
Incentive Plan (the "Savings Plan") will receive a separate card for use in
providing voting instructions to the Savings Plan's Trustee. Full shares held by
the Savings Plan will be voted by the Trustee in accordance with instructions
received from participants. Full shares held by the Savings Plan for which no
voting instructions are received will be voted by the Trustee in a manner deemed
to be in the best interests of the beneficial owners of those shares.
Individuals who hold Summit common stock through participation in the Prime
Bancorp, Inc. 401(k) Plan ("Prime 401(k) Plan") will receive a separate card for
use in providing voting instructions to the Trustee of the Prime 401(k) Plan
(the "Prime Trustee"). Full shares held by the Prime 401(k) Plan will be voted
by the Prime Trustee in accordance with the instructions received from
participants.
You may change your vote at any time prior to the close of voting. Prior to
the Annual Meeting you may change your vote by filing a written revocation with
the Secretary of Summit or by timely delivering a valid, later dated proxy.
During the Annual Meeting you may change your vote by filing a written
revocation or a duly executed proxy or ballot 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 Board of Directors has set the close of business of Summit on February
15, 2000 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 172,384,364 shares of Summit common stock issued and outstanding, and there
were no other voting securities of Summit outstanding. Each share of common
stock is entitled to one vote at the Annual Meeting.
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The following companies are subsidiaries of Summit and are sometimes
referred to by means of the listed abbreviations: "SumNJ"--Summit Bank
(Hackensack, NJ); "SumPA"--Summit Bank (Bethlehem, PA); "SumCT"--SummIT Bank
(Norwalk, CT).
All share numbers and share values have been adjusted to give effect to the
three-for-two stock split which became effective September 24, 1997.
1. ELECTION OF DIRECTORS
The Restated Certificate of Incorporation of Summit contains a provision
adopted by a vote of the shareholders which divides the Summit 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 seven directors in Class I, six directors in
Class II and five directors in Class III.
Seven director nominees are standing for election to the Board of Directors
at the 2000 Annual Meeting. Six of the director nominees are standing for
election to Class I of the Board of Director and one director nominee is
standing for election to Class III.
The terms of the current directors in Class I expire at the 2000 Annual
Meeting. Accordingly, the six director nominees standing for election to Class I
of the Board constitute six of the seven current members of Class I and are to
be elected to serve until the 2003 Annual Meeting and until their successors are
elected and qualified. The sole current member of Class I not standing for
election, Mr. Fred G. Harvey, a director of Summit since 1988, will be retiring
from the Board upon the expiration of his term at the 2000 Annual Meeting. In
addition, Mr. Robert G. Cox, a director of Summit since 1996 and a member of
Class III, retired from the Board and as President of Summit effective March 1,
2000. The sole nominee for election to Class III of the Board, Mr. Arthur J.
Kania, was elected to the Board in December, 1999 and is standing for election
by the shareholders at the next Annual Meeting as required by New Jersey law. He
is currently a member of, and being nominated for election to, Class III, to
serve until the 2002 Annual Meeting and until his successor is 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. All incumbent directors attended at least 75% of
the aggregate of Board meetings and meetings of Committees on which each served,
except Mr. Watson who attended 11 of 16 such meetings.
In accordance with the long-standing practice of Summit's Board of
Directors, more than two-thirds of the members of Summit's Board are nonemployee
directors. Of the eighteen current members of the Board of Directors, sixteen
are not employees of Summit or its subsidiaries. After Mr. Harvey's retirement
mentioned above, fifteen of seventeen Board members will be nonemployee
directors. In addition to attendance at Board meetings (the Board met 9 times
during 1999) and Committee meetings as described below (Committees held 15
meetings in 1999), directors discharge their responsibilities throughout the
year by personal meetings and frequent telephone contact with Summit's executive
officers and others regarding the business and affairs of Summit and its
subsidiaries. Fourteen directors additionally serve on one or more of the Boards
of Directors of Summit's bank and nonbank subsidiaries.
To permit the Board of Summit to more efficiently discharge its duties,
Summit has seven standing Board committees which held meetings in 1999 as
follows: the Executive Committee (2 meetings), the Audit Committee (4 meetings),
the Nominating Committee (1 meeting), the Compensation Committee (2 meetings),
the Capital and Dividend Committee (1 meeting), the Risk Management Committee (4
meetings) and the Acquisition Committee(1 meeting).
2
<PAGE>
CLASS I-- DIRECTOR NOMINEES-- TERM EXPIRING IN 2003
James C. Brady, 64, Director since 1996.
Managing General Partner (since 1987) of Mill
[PLACE PHOTO HERE] House Associates, L.P. (real estate and securities
investment) and formerly Director (1972-1987) of
predecessor Brady Security and Realty Corp.
Formerly Chairman of the Board (1990-1993) and
Vice Chairman of the Board (1978-1990) of Somerset
Trust Company (predecessor bank to SumNJ).
Formerly Director (1989-1996) of The Summit
Bancorporation. Chairman of the Boys' and Girls'
Club of Newark Life Camp, Inc. Director of SumNJ
(since 1989). Chair of the Risk Management
Committee. Member of Capital and Dividend
Committee.
T.J Dermot Dunphy, 67, Director since 1984.
Chairman (since 1996), Director (since 1971) and
former Chief Executive Officer (1971-2000) and
President (1971-1996) of Sealed Air Corporation
[PLACE PHOTO HERE] (specialty and protective packaging materials and
systems). Trustee of the Partnership for New
Jersey and Committee for Economic Development.
Director of Public Service Enterprise Group, Inc.
and SumNJ (since 1981). Chair of the Executive and
Compensation Committees. Member of the Acquisition
and Audit Committees.
Thomas H. Hamilton, 69, Director since 1997.
Formerly Chairman and Chief Executive Officer
(1989-1997) and President (1989-1993; 1995-1997)
[PLACE PHOTO HERE] of Collective Bancorp, Inc. and Chairman and Chief
Executive Officer (1962-1998), President
(1962-1989; 1994-1998) and Director (1960-1998) of
Collective Bank (predecessor bank to SumNJ).
Former Director of the Federal Home Loan Bank of
New York. Former member of the Board of Governors
of the New Jersey Savings League. Member of the
Acquisition, Capital and Dividend and Risk
Management Committees.
Francis J. Mertz, 62, Director since 1986.
Trustee (since 1991), President Emeritus (since
1999) and former President (1990-1999) of
Fairleigh Dickinson University. Trustee of the St.
[PLACE PHOTO HERE] James Foundation and Independent College Fund of
New Jersey. Director of Liberty Science Center and
Hall of Technology, Association of Independent
Colleges and Universities in New Jersey, National
Association of Independent Colleges and
Universities and SumNJ (since 1973). Member of the
Audit, Capital and Dividend and Risk Management
Committees.
T. Joseph Semrod, 63, Director since 1981.
Chairman of the Board and Chief Executive Officer
(since 1981) and former President (1981-1996) of
Summit. Chairman of the Board (since 1981), Chief
[PLACE PHOTO HERE] Executive Officer (since 1994) and former President
(1994-1996) of SumNJ. Former Director of Federal
Reserve Bank of New York. Trustee and former Chairman
of The Partnership for New Jersey and the
International Financial Conference. Member and former
Chair of New Jersey State Chamber of Commerce.
Co-Chair of Prosperity New Jersey, Inc. Member of the
Executive Committee.
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<PAGE>
Douglas G. Watson, 55, Director since 1996.
Chief Executive Officer (since 1999) of Pittencrieff
Glen Associates (management consulting). Former
President, Chief Executive Officer and Director
(1997-1999) of Novartis Corporation (healthcare,
[PLACE PHOTO HERE] agribusiness and nutrition products). Formerly
President and Chief Executive Officer (1996-1997) of
Ciba-Geigy Corporation (pharmaceutical products)
(predecessor to Novartis Corporation) and former
President (1986-1996) of the Pharmaceuticals
Division, Ciba-Geigy Corporation. Formerly Director
of The Summit Bancorporation (1988-1996) and Summit
Bank (predecessor bank to SumNJ) (1986-1996).
Director of Engelhard Corporation. Member of the
Executive, Compensation, Nominating and Risk
Management Committees.
CLASS III -- DIRECTOR NOMINEE -- TERM EXPIRING IN 2002
Arthur J. Kania, 68, Director since December,
1999. Partner (since 1960) of Kania, Lindner, Lasak
and Feeney (and predecessor firms) (attorneys at
law). Principal (since 1985) of Trikan Associates
[PLACE PHOTO HERE] (real estate management and investment). Formerly
Director (1997-1999) of Prime Bancorp, Inc. Former
Director of PNC Bank, Midlantic Corporation and
Continental Bank. Member of Board of Consultors of
Villanova University Law School. Former Vice Chairman
of the Board of Trustees of Villanova University.
Trustee Emeritus and former Chairman of the Board of
Trustees of the University of Scranton. Director of
Opt-Sciences Corporation and SumPA (since 1997).
CLASS II -- INCUMBENT DIRECTORS -- TERM EXPIRING IN 2001
John G. Collins, 63, Director since 1986. Vice
Chairman of the Board of Summit (since 1986) and
SumNJ (since 1994). Formerly Chairman of the Board
(1983-1986), Director, President and Chief
Executive Officer (1982-1986) of Commercial
Bancshares, Inc. Chairman and Trustee of
[PLACE PHOTO HERE] Independent College Fund of New Jersey. Chair of
the National Conference of Community and Justice,
New Jersey Region. Former Chairman of the Board of
Trustees of St. Peter's College and New Jersey
Bankers Association. Trustee of Collier Services
Foundation. Chairman of Summit Service Corporation
(since 1991). Director of Collier Services and
SumNJ (1978-1990, 1994-present). Member of the
Acquisition Committee.
Anne Evans Estabrook, 55, Director since 1994.
Sole proprietor (since 1984) of Elberon
Development Co. (real estate) and President (since
1983) of David O. Evans, Inc. (real estate). Chair
[PLACE PHOTO HERE] and Director of E'town Corporation, Elizabethtown
Water Company and E'town Properties, Inc. Vice
Chair of New Jersey Chamber of Commerce and
National Chair-Elect of National Association of
Industrial and Office Properties. Trustee Emeritus
of Cornell University. Formerly Director of
Constellation Bancorp (1985-1994) and National
State Bank (1978-1994). Director of SumNJ (since
1994). Member of the Acquisition, Nominating, Risk
Management and Capital and Dividend Committees.
William M. Freeman, 47, Director since December,
1998. President and Chief Executive Officer of
Bell Atlantic-New Jersey (since April, 1998).
Former President and Chief Executive Officer
(1994-1998) and Director, Customer Service Centers
[PLACE PHOTO HERE] (1992-1993) of Bell Atlantic-Washington, D.C.
Former Executive Director, External Affairs
(1993-1994) of Bell Atlantic. Former Director,
External Affairs (1987-1991) of Bell Atlantic
Network Services. Member of New Jersey Commission
on Higher Education. Member of the Board of
Directors of the New Jersey Chamber of Commerce
and Prosperity New Jersey, Inc. Member of
Compensation, Executive, Nominating and Risk
Management Committees.
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<PAGE>
George L. Miles, Jr., 58, Director since 1994.
President and Chief Executive Officer (since 1994)
of WQED Pittsburgh, Inc. (television and radio
broadcasting and magazine publishing). Former
Executive Vice President and Chief Operating
[PLACE PHOTO HERE] Officer (1984-1994) of Thirteen/WNET (television
broadcasting). Chairman of the Board of the Urban
League of Pittsburgh. Trustee of the Foundation
for Minority Interests in Media, Inc. Former
Chairman of the Board of Trustees of the
Association for America's Public Television
Stations. Director of SumNJ (since 1994). Member
of the Acquisition, Audit, Executive, Compensation
and Nominating Committees.
Raymond Silverstein, 72, Director since 1991.
Consultant (since 1989) and former Principal
(1949-1989) of Alloy, Silverstein, Shapiro, Adams,
Mulford & Co., P.C. (certified public
accountants). Director (1970-1975, 1980-present)
[PLACE PHOTO HERE] of SumNJ. Formerly Chairman of the Board
(1987-1994) of United Jersey Bank/South, N.A.
(predecessor bank to SumNJ). 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. Chair of the Nominating
Committee. Member of the Acquisition, Executive,
Compensation, Capital and Dividend and Risk
Management Committees.
Orin R. Smith, 64, Director since 1996. Chairman
of the Board (since 1995), Director (since 1981)
and Chief Executive Officer (since 1984) of
[PLACE PHOTO HERE] Engelhard Corporation (environmental technologies
and performance products and related services).
Formerly Director (1984-1996) of The Summit
Bancorporation. Director of Ingersoll-Rand
Company, PE Corporation, Vulcan Materials Company
and SumNJ (since 1981). First Vice Chairman of
Centenary College. Overseer, New Jersey Institute
of Technology. Trustee of Plimoth Plantation.
Member of the Acquisition, Audit, Capital and
Dividend and Nominating Committees.
CLASS III -- INCUMBENT DIRECTORS -- TERM EXPIRING IN 2002
Robert L. Boyle, 64, Director since 1986.
Representative (since 1987) with the William H.
Hintelmann Firm (realty and insurance) and
Publisher Emeritus (since 1978) of The Dispatch
[PLACE PHOTO HERE] (newspaper). Regent Emeritus of St. Peter's
College. Member of the State of New Jersey Supreme
Court Disciplinary Oversight Committee. Trustee of
Oceanic Free Library Association and Parents
Support Group of New Jersey. Director of the New
Jersey Lawyer and SumNJ (since 1964). Member of
the Audit and Nominating Committees.
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<PAGE>
Elinor J. Ferdon, 63, Director since 1984.
Volunteer professional. Director (since 1974),
former National President (1996-1999), former
First Vice President (1993-1996) and former Vice
President (1987-1993) of the Girl Scouts of U.S.A.
[PLACE PHOTO HERE] Trustee of World Foundation for Girl Guides and
Girl Scouts, Inc. Vice Chair of Liberty Science
Center and Hall of Technology. Member of the Board
of Governors of United Way of America. Trustee of
the National Urban League, Inc. Trustee Emeritus
of Fairleigh Dickinson University and Stoneleigh
Burnham School. Director of SumNJ (since 1976).
Chair of the Audit Committee. Member of the
Executive, Compensation and Risk Management
Committees.
William R. Miller, 72, Director since 1997. Former
Senior Vice President, Manufacturing, (1975-1991)
of Lenox China, Inc. (manufacturer of china and
[PLACE PHOTO HERE] housewares). Formerly Director (1989-1997) of
Collective Bancorp, Inc. and Collective Bank
(predecessor bank to SumNJ) (1985-1998). Member of
the Audit, Executive, Compensation and Capital and
Dividend Committees.
Joseph M. Tabak, 67, Director since 1987. Chair
and Chief Executive Officer (since 1991) of JPC
Enterprises, Inc. (distributor of paper and
plastic disposable products). Former Chairman
[PLACE PHOTO HERE] (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 SumNJ (since 1981). Chair of the
Acquisition Committee. Member of the Audit,
Nominating and Risk Management Committees.
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<PAGE>
BENEFICIAL OWNERSHIP OF SUMMIT COMMON STOCK
BY DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the number of shares of Summit common stock
beneficially owned by each Director of Summit, by each executive officer listed
in the Summary Compensation Table and by all Directors and executive officers of
Summit as a group as of February 25, 2000. The beneficial owners listed below
hold sole voting and investment power over all shares listed, except as
indicated. To Summit's knowledge, there is no person (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934 ("Exchange Act")) who
beneficially owned five percent or more of the outstanding voting securities of
Summit as of February 25, 2000.
PERCENTAGE
SHARES OF SUMMIT
BENEFICIALLY COMMON
OWNED STOCK
--------------- -----------
Robert L. Boyle ............................... 94,802(1) .055%
James C. Brady ................................ 300,172(2)(3) .174%
John G. Collins ............................... 522,192(4)(5) .303%
Robert G. Cox ................................. 743,935(4)(6) .432%
T.J. Dermot Dunphy ............................ 115,292 .067%
Anne Evans Estabrook .......................... 55,082 .032%
Elinor J. Ferdon .............................. 30,557(7) .018%
William M. Freeman ............................ 1,300 .001%
Thomas H. Hamilton ............................ 1,159,944(8) .673%
Fred G. Harvey ................................ 4,456(9) .003%
Arthur J. Kania ............................... 808,710(10) .469%
James J. Lynch ................................ 163,332(4) .095%
Sabry J. Mackoul .............................. 190,309(4)(11) .110%
Francis J. Mertz .............................. 18,006(12) .010%
George L. Miles, Jr. .......................... 3,784(13) .002%
William R. Miller ............................. 20,499(14) .012%
T. Joseph Semrod .............................. 1,247,648(4)(15) .724%
Raymond Silverstein ........................... 60,986(16) .036%
Orin R. Smith ................................. 23,943(2)(17) .014%
Joseph M. Tabak ............................... 82,949 .048%
Douglas G. Watson. ............................ 27,325(2)(18) .016%
All Directors and executive officers
as a group (38) ............................ 7,394,114(19) 4.289%
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(1) Includes 23,847 shares held in trusts for which Mr. Boyle serves as
trustee, and 1,587 shares owned by Mr. Boyle's wife over which Mr. Boyle
disclaims voting and investment powers.
(2) Includes 1,350 shares which may be acquired within 60 days pursuant to
options granted under The Summit Bancorporation 1995 Director Stock Option Plan
and converted into options to purchase Summit Common Stock.
(3) Includes 28,578 shares held by family trusts. As Co-trustee, Mr. Brady
shares voting and investment powers over such shares.
(4) Includes shares which may be acquired immediately or within sixty days
granted under one or more of Summit's Stock Option Plans as follows: Mr.
Collins--308,270 shares, Mr. Cox--482,050 shares, Mr. Lynch--133,645 shares, Mr.
Mackoul--117,000 shares, and Mr. Semrod--912,950 shares.
(5) Includes 48,907 shares owned jointly with Mr. Collins' wife over which
Mr. Collins shares voting and investment powers.
(6) Includes 814 shares held by Mr. Cox as custodian for a minor child and
24,526 shares owned by Mr. Cox's wife over which Mr. Cox disclaims voting and
investment powers.
(7) Includes 4,500 shares owned by Mrs. Ferdon's husband over which Mrs.
Ferdon disclaims voting and investment powers.
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<PAGE>
(8) Includes 107,125 shares held by The Thomas H. Hamilton Foundation, Inc.
As President and Trustee of The Thomas H. Hamilton Foundation, Inc., Mr.
Hamilton has voting and investment powers over such shares.
(9) Mr. Harvey owns all of these shares jointly with his wife and shares
voting and investment powers with respect to these shares.
(10) Includes 629,775 shares held by a family trust, of which Mr. Kania was
grantor, which is managed by an independent trustee and over which Mr. Kania
disclaims voting and investment powers. Also includes 6,250 shares held by Mr.
Kania's wife over which Mr. Kania disclaims voting and investment powers.
(11) Includes 56,399 shares owned jointly with Mr. Mackoul's wife over
which Mr. Mackoul shares voting and investment powers.
(12) Includes 1,410 shares held by Mr. Mertz as custodian for minor
children, 4,175 shares owned jointly with Mr. Mertz's wife over which Mr. Mertz
shares voting and investment powers, and 262 shares owned by Mr. Mertz's wife
over which Mr. Mertz disclaims voting and investment powers.
(13) Includes 685 shares owned by Mr. Miles' wife over which Mr. Miles
disclaims voting and investment powers.
(14) Includes 15,802 shares owned jointly with Mr. Miller's wife over which
Mr. Miller shares voting and investment powers.
(15) Includes 622 shares held by Mr. Semrod's wife as custodian for a minor
child, 1,068 shares owned by Mr. Semrod's wife and 1,143 shares owned by a
family member living in the same household over which Mr. Semrod disclaims
voting and investment powers.
(16) Includes 2,145 shares owned by Mr. Silverstein's wife over which Mr.
Silverstein disclaims voting and investment powers and 344 shares owned by a
partnership in which Mr. Silverstein is a general partner and shares voting and
investment powers.
(17) Includes 744 shares owned by Mr. Smith's wife over which Mr. Smith
disclaims voting and investment powers.
(18) Mr. Watson owns all of these shares jointly with his wife and shares
voting and investment powers.
(19) Voting and investment powers are shared as to 414,213 and disclaimed
as to 690,321 of these shares. Includes 2,951,109 shares which may be acquired
within 60 days under all stock option plans.
8
<PAGE>
CORPORATE GOVERNANCE GUIDELINES
The Board of Directors has adopted the Corporate Governance Guidelines set
forth below for the management of Summit.
DUTIES OF DIRECTORS.
o The business and affairs of Summit shall be managed by its officers under
the direction of the Boardof Directors.
o Each director owes a fiduciary duty of loyalty to Summit.
o Each director owes a fiduciary duty of care and diligence to Summit.
o Each director, in discharging the director's duties to Summit and in
determining what the director reasonably believes to be in the best
interest of Summit, may, in addition to considering the effects of any
action on shareholders, consider the effects on Summit's employees,
suppliers, creditors, customers, the communities it serves, and the long
term as well as the short-term interests of Summit and its shareholders.
o Each director should represent all shareholder interests.
o It is desirable that an outside director serves on the board of one of
Summit's subsidiaries.
DIRECTOR QUALIFICATIONS AND BOARD STRUCTURE.
o Not less than two-thirds of the directors shall be outside directors, i.e.,
persons not (i) currently employees of Summit, (ii) former executive
officers of Summit, or (iii) professional advisors, consultants or counsel
receiving material compensation for services to Summit.
o Each director must own at least 1,000 shares of common stock of Summit.
o A director may not be elected to a new term after reaching age 73.
o Inside directors must retire from the Board upon retirement from full-time
employment with Summit.
o A director whose personal circumstances change significantly (such as
retirement, a change in employment, or circumstances which compromise the
director's ability to serve Summit) shall offer to resign from the Board,
subject to the Board's discretion to accept or reject the offer of
resignation in the best interests of Summit.
o Depth and breadth of business and civic experience in leadership positions,
ties to Summit's markets, and diversity of Board membership are criteria
considered in reviewing nominees for the Board. Summit's By-Laws provide
for shareholder nominations in accordance with specified procedures.
Shareholders may also informally submit names to the Nominating Committee.
o The Board has determined not to set a limit on the maximum time an
individual may serve as director or adopt policies on an ideal size for the
Board or whether or not the positions of Chairman and Chief Executive
Officer should be separate, in order to be free to make the choices which
seem best for Summit at any particular time.
COMMITTEE STRUCTURE AND RESPONSIBILITIES.
o All Committee appointments shall be made by the Board. Outside directors
normally serve on at least two Committees.
o Committees shall regularly report their activities to the full Board. All
Commitee minutes shall be sent to each director.
o The Chair of the Executive Committee is an officer of Summit under its
By-Laws and shall be an outside director. The Chair of each other Committee
shall be an outside director.
o The Compensation, Audit and Nominating Committees shall consist solely of
outside directors. A majority of members of all other Committees shall be
outside directors.
o The Executive Committee shall exercise the powers of the Board of Directors
between meetings of the Board to the extent permitted by law. The Executive
Committee shall be responsible for planning management succession.
o The Compensation Committee recommends to the Board employment, promotion
and remuneration arrangements for executive officers and directors. The
Compensation Committee shall approve all executive incentive plans and
grants to executive officers thereunder. A portion of executive
compensation shall be based on the performance of Summit and its business
units. The Compensation Committee shall review the performance and salary
of the Chief Executive Officer and senior executives annually. The Board
shall meet annually in executive session with the Chief Executive Officer
to discuss the recommendations of the Compensation Committee. The
Compensation Committee shall also review the compensation of the outside
directors annually. Employee directors shall not receive additional
compensation for service as directors.
9
<PAGE>
o The Audit Committee shall recommend the engagement and discharge of
independent certified public accountants, review their annual audit plan
and the results of their auditing activities, and consider the range of
audit and non-audit fees. It shall also review the general audit plan,
scope and results of Summit's procedures for internal auditing, the
independence and quality of service of the internal and external auditors,
the adequacy of the internal control structure and progress of Summit's
compliance program. The reports of examination of Summit and its
subsidiaries by state and federal bank regulatory examiners shall be
reviewed by the Audit Committee. The Audit Committee shall meet
periodically in executive session with the independent certified public
accountants. It shall have authority to employ independent legal counsel.
o The Nominating Committee considers the appropriate size and makeup of the
Board, and will seek nominees to fulfill Summit's qualifications and
criteria for directors when it deems additions to the Board to be
desirable. It will consider nominations from shareholders. The Nominating
Committee shall review the performance of incumbent directors whose terms
expire prior to their renomination.
o The Capital and Dividend Committee and the Board shall review Summit's
dividend policy and capital program at least annually.
o The Acquisition Committee reviews acquisition strategy and reviews and
recommends to the Board proposals for significant acquisitions.
o The Risk Management Committee has oversight responsibility for
implementation of the enterprise risk management program of Summit. This
program involves the identification of risks, risk measurement, guidelines
for risk tolerance, development of risk controls and monitoring of risks.
The risk elements are credit, market, liquidity, interest rate,
operational, legal, reputational, fiduciary, compliance and environmental
risk.
BOARD FUNCTIONS.
o Financial and investment results of Summit generally will be reported to
the Board at each regularly scheduled meeting.
o The Board will annually review and approve the operating and capital plans
(budgets).
o Management shall periodically prepare an updated strategic plan for Summit,
which shall be presented to the Board for its consultation, advice and
approval.
o The Annual Report to Shareholders, SEC Form 10-K, and the Proxy Statement
shall be reviewed by the Board.
GENERAL POLICIES.
o The Board encourages active efforts to seek diversity among employees.
o The Board believes that Summit and its subsidiaries should be good
corporate citizens and serve the convenience and needs of their
communities.
o The Board has approved a Code of Business Conduct and provided a Compliance
Line which permits anonymous reporting of violations.
o The Board has issued a comprehensive policy regarding appropriate
circumstances under which directors and officers may purchase or sell
Summit common stock.
o Board members have complete access to executive officers of Summit. Senior
executives regularly attend portions of the Board Meetings to make
presentations and respond to questions. The Board encourages presentations
from officers other than senior executives who have expertise and future
potential.
o The Board believes that individual directors other than the Chairman of the
Executive Committee should not communicate on CORPORATE ISSUES with the
press, investors or employee groups without approval of the Board or
Executive Committee or at the request of management.
o These corporate governance guidelines have been approved by the Board and
may be amended by the Board as it deems appropriate.
NOMINATIONS TO SUMMIT'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. Summit's By-Laws state that a nominee must own 1,000 shares of Summit
Common Stock and be under the age of 73. Various state and federal laws contain
provisions prohibiting or limiting officers and directors of certain public
utility holding companies and competitors of Summit from serving on Summit's
Board. Details may be obtained from the Secretary.
10
<PAGE>
Summit's By-Laws 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 Summit not
later than 80 days and not earlier than 100 days in advance of the first
anniversary of the preceding year's annual meeting (unless such annual meeting
is more than 30 days before or 60 days after such anniversary, in which case
such notice must be delivered not later than the later of 80 days prior to such
annual meeting or 10 days after public announcement of the meeting date.) The
notice must set forth:
o the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated;
o a representation that such holder is a holder of record of shares of
Summit 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;
o 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 made by such holder;
o 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
o the consent of each nominee to serve as a director of Summit 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.
Summit's 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 OUTSIDE DIRECTORS
Outside directors, i.e., directors who are not employees of Summit or one
of its subsidiaries, currently receive an annual retainer of $27,000 and $1,200
for each Board, Committee and Subcommittee meeting attended. In 1999, Mr.
Dunphy, Chair of the Executive and Compensation Committees, received an
additional $10,000 annual retainer and Mrs. Ferdon, Chair of the Audit
Committee, received an additional $5,000 annual retainer. Outside directors who
serve as directors of subsidiaries also receive fees from such subsidiaries,
which vary in amount, with annual retainers for membership on bank subsidiary
boards ranging from $4,000 to $13,500 and fees for meetings attended ranging
from $500 to $750. An outside director may elect to defer payment of fees from
Summit and its bank subsidiaries until reaching a stated age or until conclusion
of service as a director, with interest on deferred sums payable at the rate
paid by SumNJ for IRA and Keogh Accounts.
A retirement plan for individuals who are outside directors of Summit on
the date their service as a Summit Director ends provides that outside directors
with five or more years of service as a Summit 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 Summit 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 Summit 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 Summit (as defined in the plan) the plan provides that
each director then sitting on the Summit 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.
11
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed
exclusively of directors who are not officers or employees of Summit or any of
its subsidiaries. It is presently chaired by Mr. Dunphy, who also serves as
Chair of the Executive Committee, and includes Mrs. Ferdon, Chair of the Audit
Committee, Mr. Harvey, Chair of the Capital and Dividend Committee, Mr.
Silverstein, Chair of the Nominating Committee and Messrs. Freeman, Miles,
Miller and Watson.
Summit's executive compensation program is a coordinated and balanced
program consisting of:
o Salary and benefits;
o Incentive cash compensation;
o Stock option program; and
o Long-term performance stock program
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:
o Aligning the executives' goals with the shareholders' goals of
stock appreciation and yield;
o Summit's goals of attracting, retaining and motivating the best
possible executives in a cost-effective way; and
o The executives' goals of maximizing the amount and certainty of
compensation as well as security of position.
The elements of the executive compensation program fulfil different
purposes:
o The incentive cash feature stresses the importance of achieving
specific goals each year.
o The stock option and stock award programs are intended to provide
a long-term incentive to build Summit's profits. They also serve
as a strong motivator, a capital accumulation opportunity and a
retention mechanism. Stock awards are also tax deductible by
Summit in most cases without incurring any cash outlay. By
increasing the shareholdings of executives, the stock programs
align the goals of Summit executives with those of Summit
shareholders. These programs are submitted to the shareholders
for approval prior to their implementation.
The Compensation Committee believes that the Summit executive compensation
program provides an appropriate balance between cash and stock to maximize
long-term shareholder interests. A compensation program that focuses on
long-term stock incentives represents more risk to the executive because the
compensation decreases if Summit'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 13 under the following column headings: "(c)
Salary," "(d) Bonus," "(f) Restricted Stock Awards,""(g) Securities Underlying
Options" and "(h) LTIP Payouts." Reporting of awards under the
long-termperformance stock program is split among three of the foregoing
headings: (i) the unrestricted portion (generally, one-fifth) of each year's
incentive stock award appears in the column titled "(d) Bonus" where it is
aggregated with an executive's incentive cash bonus award, (ii) the restricted
portion (generally, four-fifths) of each year's incentive stock award appears
under the general caption "Long Term Compensation" in the column titled "(f)
Restricted Stock Awards" and (iii) performance stock awarded in a prior year
which an executive officer becomes entitled to receive by virtue of the
attainment of the related performance goal (in some cases subject to certain
additional restrictions on transferability which lapse in annual installments)
appears in the column titled "Payouts--(h) LTIP Payouts." The last column of the
Cash Compensation Table, "(i) All Other Compensation," aggregates the remaining
miscellaneous forms of compensation, including term life insurance premiums paid
on behalf of the executives under the Summit life insurance program applicable
to all employees and the employer matching contributions paid to the executives'
accounts in the Savings Plan, a profit sharing and retirement plan established
under Section 401(k) of the Internal Revenue Code of 1986 (the "Code"), pursuant
to which Summit matches, subject currently with respectto 2000 to a maximum
employer contribution of $7,650, 100% of voluntary contributions by an employee
upto the first 3% of the employee's base salary and 50% of voluntary
contributions by an employee for up to an
12
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------- ----------------------- ----------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
OTHER
ANNUAL RESTRICTED SECURITIES LTIP ALL OTHER
NAME AND COMPEN- STOCK UNDERLYING PAYOUTS COMPEN-
PRINCIPAL POSITIONS YEAR SALARY($) BONUS($)(1) SATION($) (2)AWARDS($)(3) OPTIONS(#) ($)(3)(4) SATION($)(5)
- ------------------- ---- -------- ----------- --------- -------------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T. Joseph Semrod 1999 $890,000 $ 654,916 $ -- $ 219,665 190,750 $398,907 $14,922
Chairman of the Board 1998 837,500 877,150 -- 540,600 95,000 834,750 14,324
and CEO of Summit and 1997 775,000 1,094,013 -- 1,576,050 129,000 748,125 13,067
SumNJ
Robert G. Cox 1999 $580,000 $ 325,000 $ -- $ 0 0 $339,071 $11,403
President of Summit 1998 556,000 502,275 -- 461,100 81,000 709,538 11,904
and SumNJ 1997 517,000 679,225 -- 1,236,900 109,000 635,906 10,767
John G. Collins 1999 $500,000 $ 273,668 $ -- $ 94,674 65,000 $265,938 $11,544
Vice Chairman of the 1998 435,000 339,575 -- 270,300 45,000 258,375 10,979
Board of Summit and 1997 392,500 444,513 -- 778,050 50,000 149,625 9,721
SumNJ
James J. Lynch(6) 1999 $355,703 $ 162,233 -- $ 48,933 40,000 $ -- $19,749
Senior Executive 1998 -- -- -- -- -- -- --
Vice President of 1997 -- -- -- -- -- -- --
Summit, Chairman of
the Board, President
and CEO of SumPA
Sabry J. Mackoul 1999 $325,000 $ 162,233 $ -- $ 48,933 40,000 $ 73,133 $ 9,234
Senior Executive Vice 1998 300,000 235,568 -- 282,270 21,000 109,313 9,288
President/Commercial 1997 280,500 196,409 -- 145,635 24,000 59,580 7,168
Banking of Summit
and SumNJ
</TABLE>
- --------------------
(1) Includes value of unrestricted portion of incentive 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 Annual Compensation."
(3) The total number of shares of incentive stock and performance stock awards
still subject to restrictions on transferability held and their aggregate
market value as of December 31, 1999 are as follows: Mr. Semrod: 76,120
shares, $2,331,175; Mr. Cox: 63,191 shares, $1,935,224; Mr. Collins: 31,020
shares, $949,988 Mr. Mackoul: 13,505 shares, $413,591; Mr. Lynch: 0 shares,
$0.
The vesting period of the incentive stock and performance stock awards
subject to restrictions on transferability with respect to each of the
three years in the table above were as follows:
1 YEAR 2 YEARS 3 YEARS 4 YEARS
------ ------- ------- -------
T.J. Semrod 1999 5,065 5,065 5,065 5,065
1998 7,600 7,600 7,600 7,600
1997 10,900 10,900 10,900 10,900
R.G. Cox 1999 2,550 2,550 2,550 2,550
1998 6,470 6,470 6,470 6,470
1997 8,750 8,750 8,750 8,750
J.G. Collins 1999 2,890 2,890 2,890 2,890
1998 3,000 3,000 3,000 3,000
1997 4,500 4,500 4,500 4,500
S.J. Mackoul 1999 1,010 1,010 1,010 1,010
1998 2,010 2,010 2,010 2,010
1997 970 970 970 970
J. J. Lynch 1999 460 460 460 460
1998 -- -- -- --
1997 -- -- -- --
Dividends are paid on all shares of restricted stock held by the named executive
officers.
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
(4) Contains entire performance stock award (made in the year for which listed)
which an executive became entitled to receive (in the year following the
year for which listed) by virtue of the attainment of the performance goal
relating to the year listed.
(5) Amounts listed under "All Other Compensation" for 1999 include Company
contributions to the Savings Plan ("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-$7,190, INS-$7,732; Mr. Cox:
SIP-$6,496, INS-$4,907; Mr. Collins: SIP-$7,200, INS-$4,344; Mr. Mackoul:
SIP-$6,484, INS-$2,750; Mr. Lynch: SIP-$6,667, INS-$1,166. The amount shown
for Mr. Lynch also includes $11,916 attributable to a distribution from a
Prime Bancorp, Inc. profit sharing plan.
(6) Mr. Lynch joined Summit during 1999 in connection with the merger of Prime
Bancorp, Inc. into Summit, although compensation information provided
herein with respect to Mr. Lynch is given for all of 1999. The merger of
Prime into Summit, and the commencement of Mr. Lynch's employment with
Summit, occurred subsequent to the January, 1999 performance stock awards.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f)
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE PRESENT VALUE ($)(3)
- ---- ---------- ----------- --------- -------- --------------------
<S> <C> <C> <C> <C> <C>
T. Joseph Semrod (CEO) ................ 95,000 2.9% $39.88 2/1/2009 $1,136,132
Robert G. Cox ......................... 81,000 2.5% $39.88 2/1/2009 968,702
John G. Collins ....................... 45,000 1.4% $39.88 2/1/2009 538,168
Sabry J. Mackoul ...................... 21,000 .6% $39.88 2/1/2009 251,145
James J. Lynch(4) ..................... -- -- -- -- --
</TABLE>
- ----------------
(1) The stock option grants listed in this table are reported as 1998
compensation on the Summary Compensation Table.
(2) Exercise price equals 100% of the fair market value of a share of Summit
common stock on the grant date, which was January 22, 1999 for all options
listed above. All listed options are nonqualified options, become
exercisable one year from the date of grant and terminate upon a
termination of employment, except termination of employment occurring due
to death, disability, retirement, resignation by mutual agreement or
dismissal without cause.
(3) Black-Scholes Option Pricing Model used. The Black-Scholes value, an
estimate based on assumptions about future stock price volatility and
dividend yield, was 29.99% of the stock price on the date of the grant. The
estimated volatility of 26.86% and dividend yield of 2.94% were based on
historical data from the prior three years. The estimated value also
reflects a risk-free rate of return of 5.11% and a 10-year and ten-day
option term.
(4) Mr. Lynch joined Summit subsequent to the January, 1999 stock option grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FY-END(#)(1) AT FY-END($)(1)
SHARES ACQUIRED -------------------------- ---------------------------
NAME ON EXERCISE(#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- ----------------- ----------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
T. Joseph Semrod (CEO) ........ 104,257 $2,196,201 817,950 95,000 $9,119,957 $ 0
Robert G. Cox(2) .............. 42,525 1,377,640 401,050 81,000 2,202,289 0
John G. Collins ............... 29,940 872,003 263,270 45,000 2,805,639 0
Sabry J. Mackoul .............. 0 0 96,000 21,000 502,500 0
James J. Lynch(3) ............. 0 0 118,796 29,698 2,051,491 512,856
</TABLE>
- ----------------
(1) Year-end 1999 numbers and values exclude options granted in February 2000,
which are reported as 1999 compensation on the Summary Compensation Table.
(2) Includes options granted by The Summit Bancorporation prior to its merger
with Summit in 1996, which options were converted in the merger into
options to purchase Summit common stock.
(3) Includes options granted by Prime Bancorp, Inc. prior to its merger with
Summit in 1999, which options were converted in the merger into options to
purchase Summit common stock.
- -------------------------------------------------------------------------------
14
<PAGE>
additional 3% of the employee's base salary. Employees become eligible to
participate in the Savings Plan after three months of service, although no
matching contributions are made until after the employee has completed one year
of service. Approximately 46% of the Savings Plan's assets are invested in
Summit common stock, further aligning the employees' interests with those of the
shareholders.
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 Summit. 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
either selected by the independent firms which conduct the surveys, or, in some
cases such as the 1999 base salary survey discussed below, by Summit, but in
either case 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 Summit. All but four of the fourteen companies in the 1999 base salary survey
in existence at 1999 year end are in the S&P Banks Index in the "STOCK
PERFORMANCE GRAPH" section. In 1999 the Compensation Committee broadened middle
management participation in the cash bonus and long-term performance stock
programs. Executive officer awards under the stock award program moved toward a
greater utilization of performance stock awards.
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. The Compensation Committee seeks to
maintain average executive officer salaries near peer industry medians. With
respect to increases in base salaries, the overall general performance of Summit
for a given year, as well as trends in the economy and the banking industry, are
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 4% was applied to merit salary increases during 1999 and will be applied to
merit salary increases during 2000.
Cash Bonus. Cash bonuses are awarded pursuant to the Management Incentive
Plan, a short-term plan put into effect in 1998. The Management Incentive Plan
provides for awards of cash bonuses to key officers of Summit at the conclusion
of a fiscal year based on Summit's performance in relation to goals set for
Summit at the beginning of the year, Summit's performance compared to peers, and
the individual performance 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
Summit is less than 7% of average capital for the year, subject to the right of
the Compensation Committee to make exceptions when deemed warranted. The
Management Incentive Plan provides for individual bonuses of up to 150% of
targets, which ranged from 5% to 60% of salaryfor 1999.
The Compensation Committee periodically uses surveys and recommendations
provided by outside compensation consultants to establish percentages of base
salary representing a cash bonus guideline for executive officers and ranges for
permissible deviations from that guideline, based on its qualitative assessment
of individual performance. In determining the corporate performance objectives,
the Compensation Committee assigns relative weights to several categories each
year which reflect, in its judgment, for that year, the relative importance of
each category to the long-term prospects of Summit. In 1999 the Compensation
Committee evaluated Summit's performance using three categories: financial plan
(including earnings growth), comparison to industry peers, and corporate
positioning objectives. The Compensation Committee gave particular consideration
to franchise-building efforts in bank and insurance agency acquisitions,
cross-selling referrals between lines of business, growth of retail deposits
through pricing strategies and the Summit Navigator Account, continued efforts
to improve customer service while containing costs, capital management through
shelf registrations, stock buybacks and a 10% dividend increase, and successful
Year 2000 remediation efforts.
The Compensation Committee determined that 1999 corporate performance met
the corporate performance objectives for payment of the cash bonus guideline.
The Committee then assessed individual performance in determining each senior
executive officer's bonus. Because corporate performance achieved the prior year
had exceeded the corporate performance objectives, the cash bonuses paid for
1999 were lower for a majority of the senior executive officers. The cash
bonuses for each of the named executive officers are included in the SUMMARY
15
<PAGE>
COMPENSATION TABLE in column (d). Mr. Lynch received the maximum cash bonus
under the Key Executive Incentive Compensation Plan of Prime Bancorp, Inc.,
which was merged into Summit on August 1, 1999, based on earnings growth and
return on assets targets achieved through that date, and an additional amount
based on his subsequent contributions to Summit, especially in merger
integration.
Stock Bonus and Long Term Compensation. To encourage growth in shareholder
value, the Compensation Committee believes that senior executives who are in a
position to make a substantial contribution to the long-term success of Summit
should have a significant stake in Summit and its ongoing success. See
"Executive Stock Ownership Guidelines" on p. 22. An equity position in the
business focuses attention on managing Summit 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.
The Long-Term Performance Stock Program is designed to reward executives
who meet predetermined performance standards and retain the executives by paying
out stock over a period of time. The program consists of: (i) performance stock
awards, which are (x) awards made with respect to services rendered in the prior
fiscal year following the attainment of Summit, division and personal
performance standards but which are earned only upon the subsequent attainment
of one or more objectively verifiable future performance goals, (y) fixed with
respect to the number of shares underlying the award at the time the performance
goals are set, and (z) intended to qualify for the performance based exemption
(the "Performance Based Exemption") under Section 162(m) of the Code; and (ii)
incentive stock awards, which are awards made with respect to services rendered
in the prior fiscal year following the attainment of Summit, division and
personal performance standards but which are not intended to qualify for the
Performance Based Exemption. Performance stock awards, in addition to requiring
the future satisfaction of performance goals prior to being earned, may contain
restrictions upon transferability after being earned which lapse in annual
increments following the attainment of the performance goals. Incentive stock
awards typically consist of a portion (generally one-fifth of the total award)
which is transferred without restriction to the participant immediately upon
being awarded and a remaining portion (generally four-fifths of the total award)
which contains restrictions on transferability which lapse in annual increments
generally over the four years following the award, provided the executive
remains in the employ of Summit during that time. Performance stock awards are
reported in the Summary Compensation Table under column (h) as LTIP (long term
incentive plan) Payouts in the year a particular performance stock award is made
(and the year to which the related performance goal pertains), although
Compensation Committee certification of performance goal attainment does not
occur, and distribution of awarded shares does not commence, until the year
following the year the award is made. By contrast, incentive stock awards are
reported in the Summary Compensation Table in the year preceding the year the
award is made because incentive stock awards are based exclusively on services
rendered in such preceding year and are not further conditioned upon attainment
of performance goals. Pursuant to regulations of the SEC, the unrestricted
portion of an annual incentive stock award is reported as annual compensation in
column (d) of the Summary Compensation Table and the remaining restricted
portion of the award, which is distributed in annual installments as
restrictions on transferability lapse, generally in four equal annual
installments, is reported as long-term compensation in column (f) of the Summary
Compensation Table.
The Compensation Committee periodically utilizes surveys and
recommendations provided by outside compensation consultants to establish a
long-term performance stock program guideline. Following the end of a fiscal
year and based on the foregoing, the Chief Executive Officer determines an
appropriate stock award recommendation for each executive officer. The
Compensation Committee then weighs as it deems appropriate the performance of
each executive officer and the evaluation and recommendation of the Chief
Executive Officer and makes incentive stock and performance stock awards after
taking into account the overall performance of Summit or one or more elements
thereof or such other factors as the Compensation Committee considers relevant.
In February, 2000, awards were made of both performance stock and incentive
stock, as described above. Incentive stock awards for services rendered in 1999
were made to 346 employees who received an aggregate of 234,945 shares.
Additionally, awards of 57,000 shares of performance stock, conditioned on
meeting future performance goals, were made to 29 key employees.
Stock options are a performance-motivating incentive because they have no
value unless Summit's stock price increases. Surveys and recommendations
provided by outside compensation consultants are periodically used by the
16
<PAGE>
Compensation Committee to establish stock option guidelines (determined in
number of options) for each salary level of officer at Summit and each of its
subsidiaries. The Compensation Committee, on a subjective basis and entirely
within its discretion, then evaluates the overall financial performance of
Summit, 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 does not generally consider
currently outstanding and previously granted options when making grants. The
Compensation Committee does not consider the aggregate size of current grants
when making individual grants, but the 1993 Incentive Stock and Option Plan
contains a specific individual and aggregate annual grant limitation and the
1999 Non-Executive Option Plan contains a specific individual grant limitation.
It is intended that stock options granted under the 1993 Plan qualify for the
Performance Based Exemption.
The stock option program is designed with a broad scope to align the
interests of a large number of employees with shareholder interests. In addition
to the 1993 Incentive Stock and Option Plan, in April 1999 Summit shareholders
approved the adoption of the 1999 Non-Executive Option Plan. This plan was
designed to broaden the stock option program to a larger number of employees,
including some part-time employees, who were excluded from participation in the
1993 Plan. A total of 2,550 current employees hold one or more stock options
granted with respect to the current year or prior years. This amounts to
approximately 29.4% of the full-time equivalent work force. With respect to
stock options granted for services rendered in 1999, 1,887 employees received
options on 3,546,290 shares. Set forth in the Summary Compensation Table are the
stock option grants made in February 2000 to the five named executives for
services rendered in 1999. 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 1999 for services rendered in 1998.
The Compensation Committee's review of surveys and recommendations by
outside compensation consultants indicated that Summit's stock-based
compensation programs for senior executives had fallen well below Summit's peers
but were overweighted towards the incentive stock awards. As a result, the
Committee significantly increased guidelines and grants with respect to options,
maintained guidelines and made awards approximating guidelines with respect to
performance stock awards, and reduced guidelines 25% and made awards
approximating guidelines with respect to incentive stock awards. This had the
effect of increasing the proportion of an executive's stock-based compensation
which is "at risk" for longer periods of time. In making awards approximating
guidelines, the Committee considered the same criteria as it did when
determining the appropriate cash bonus amounts. Since awards in 1999 for 1998
performance were above guidelines due to corporate performance factors and
awards in 2000 for 1999 performance approximated guidelines, these actions also
had the result of significantly reducing year-to-year awards of both performance
and incentive stock.
To further encourage employee ownership of Summit common stock, Summit
offers a payroll deduction plan which facilitates employee purchases of Summit
common stock through the Dividend Reinvestment Plan (at a fair market value
determined in accordance with the terms of the Dividend Reinvestment Plan).
Employees may also invest in Summit common stock through Summit's Savings Plan.
Chief Executive Officer. In general, Mr. Semrod's compensation is
determined in the same manner as that of other senior executives, as described
above. In determining Mr. Semrod's cash bonus, stock option grant and incentive
stock and performance stock awards for 1999, the Compensation Committee
considered in accordance with the practices and procedures described above the
surveys and recommendations of compensation consultants previously cited,
including emerging industry compensation trends and Mr. Semrod's performance in
enhancing the franchise value of Summit, as well as the same criteria regarding
the overall performance of Summit as the Compensation Committee considered when
determining the appropriate cash bonus amounts to pay other executive officers.
17
<PAGE>
- --------------------------------------------------------------------------------
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAr
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE BASED PLANS
-----------------------------------
PERFORMANCE OR
OTHER PERIOD UNTIL
NUMBER OF MATURITIES OR THRESHOLD TARGET MAXIMUM
NAME SHARES AWARDED PAYOUT(1) (#) (#) (#)
- ---- -------------- ------------- --------- ----- ---------
<S> <C> <C> <C> <C> <C>
T. Joseph Semrod (CEO) ................. 15,000 12/31/99 0 15,000 15,000
Robert G. Cox .......................... 12,750 12/31/99 0 12,750 12,750
John G. Collins ........................ 10,000 12/31/99 0 10,000 10,000
Sabry J. Mackoul ....................... 2,750 12/31/99 0 2,750 2,750
James J. Lynch (2) ..................... -- -- -- -- --
</TABLE>
- ----------------
(1) Award of performance stock was based upon attainment of performance goals
relating to core deposit growth and closed cross-sell referrals. Upon
attainment of the performance goal, the performance stock became fully
vested as to one-fifth of the award. The remaining four-fifths of the award
became subject to restrictions on transferability which will lapse in four
equal annual installments subject to acceleration under certain
circumstances, including retirement.
(2) Mr. Lynch joined Summit subsequent to the January, 1999 performance stock
awards.
- --------------------------------------------------------------------------------
Compliance with Section 162(m) of the Code. With certain exemptions,
including compensation qualifying for the Performance Based Exemption, Section
162(m) of the Code denies a deduction to publicly held corporations for
compensation paid to certain executive officers in excess of $1 million for each
such executive for a taxable year. At its 1996 Annual Meeting of Shareholders,
Summit proposed and shareholders approved amendments to the Summit Bancorp. 1993
Incentive Stock and Option Plan intended to qualify options and performance
stock granted pursuant thereto for the Performance Based Exemption.
Respectfully submitted,
T.J. Dermot Dunphy, Chairman
Elinor J. Ferdon, William M. Freeman, Fred G. Harvey, George L. Miles, Jr.,
William R. Miller, Raymond Silverstein and Douglas G. Watson.
18
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is the five year Cumulative Total Return stock performance
graph for (i) Summit common stock, (ii) the Standard & Poor's Major Regional
Banks ("S&P Banks") Index, an industry index consisting of 26 major regional
banking companies and (iii) the Standard & Poor's ("S&P") 500 Market Index, a
broad market index covering the stocks of 500 large capitalization companies.
SUMMIT BANCORP.,
S&P BANKS INDEX & S&P 500 INDEX
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
Summit Bancorp 100.00 151.87 193.22 360.37 305.43 221.28
S&P Banks Index 100.00 157.47 215.16 323.53 357.46 306.71
S&P 500 Index 100.00 137.58 169.17 225.61 290.09 351.13
- ----------
Assumes $100 invested on January 1, 1995
* Total Return assumes reinvestment of dividends
19
<PAGE>
ADDITIONAL INFORMATION REGARDING DIRECTORS AND OFFICERS
Some executive officers, directors and nominees for election as director of
Summit and their associates have deposit accounts with one or more of Summit'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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Summit Bancorp.'s executive
officers and directors, and any persons owning ten percent or more of a
registered class of Summit'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 ("NYSE"). Persons filing such statements are
required by SEC regulation to furnish Summit with copies of all such beneficial
ownership statements filed under Section 16(a) of the Exchange Act.
Based solely on Summit's 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,
Summit believes that during 1999 all beneficial ownership statements under
Section 16(a) of the Exchange Act which were required to be filed by executive
officers and directors of Summit in their personal capacities were filed in a
timely manner, with the following exceptions: the Form 4 required to be filed by
Mr. Watson in July, 1999 in connection with the purchase of 511 shares was filed
four days late and the December, 1999 purchase of 300 shares by Mr. Freeman
required to be reported on January 10, 2000 was reported on February 12, 2000.
CERTAIN INFORMATION AS TO EXECUTIVE OFFICERS
EMPLOYMENT AGREEMENTS
Summit entered into an employment contract with Mr. Semrod when he joined
Summit 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 of the Incentive Plan in 1982 and the Management Incentive Plan in
1998, which provide for bonuses to key employees of Summit and its subsidiaries,
Mr. Semrod's bonus has been calculated and paid under those plans rather than
under the contractual formula.
Summit entered into an employment agreement with Robert G. Cox at the
effective time of Summit's merger with The Summit Bancorporation, which provided
for Mr. Cox to serve as the President of SumNJ for an initial term ending March
1, 1999. The initial term of the Agreement was automatically extended one
additional year on March 1, 1997 and March 1, 1998. In the employment agreement
Mr. Cox agreed that for a period of one year following any termination of the
employment agreement he will not accept employment with any national or state
bank or thrift institution or affiliate thereof at a place of employment within
25 miles of any branch location of Summit or any of its subsidiaries. Mr. Cox
retired from all positions with Summit on March 1, 2000, and will receive
benefits under the executive severance plan described on page 21 and the pension
plans described on pages 23 and 24. Other terms of his retirement have not yet
been finalized.
Summit and James J. Lynch entered into a letter agreement at the effective
time of the merger of Prime Bancorp, Inc. with Summit which provides for Mr.
Lynch to serve as a Senior Executive Vice President of Summit and Chairman,
Chief Executive Officer and President of SumPA with a base salary of not less
than $345,000 and an annual cash bonus of not less than $120,750. In addition,
Mr. Lynch agreed that in the event he receives a payment under the Summit
Executive Severance Plan or pursuant to his Termination Agreement with Summit he
will agree not to accept employment with another bank, savings and loan
association or credit union, or holding company thereof, at a principal place of
employment within 25 miles of Summit or a Summit bank office then in existence,
for a two-year period.
20
<PAGE>
EXECUTIVE SEVERANCE PLAN
In 1986 the Summit Board adopted the Summit Executive Severance Plan (the
"Severance Plan") to enhance the ability of Summit to retain existing management
and attract new executives when needed, to reward key executives for their
service to Summit with reasonable compensation in the event of a termination of
their employment under any of the circumstances set forth in the Severance Plan
and to reduce legal expense and management time associated with executive
terminations by establishing generally applicable executive severance standards.
Key executives of Summit and its subsidiaries are eligible to be selected as
Severance Plan participants. All of the individuals listed in the Summary
Compensation Table have been selected to be Severance Plan participants. Their
period of participation extends through October 15, 2002, with automatic one
year extensions each year thereafter unless notice of nonextension is given 90
days prior to the expiration date.
The Severance Plan provides that, in the event a participant's employment
is terminated by Summit or one of its subsidiaries, other than for Cause (as
defined in the Severance Plan), death, disability or retirement, or by the
participant for Good Reason (defined in the Severance Plan to include a
significant reduction or change of duties or responsibilities, a reduction in
compensation or benefits, certain relocations and non-renewal of participation
in the Severance Plan or the participant's Termination Agreement) within 6
months of any event alleged to constitute Good Reason, the participant, upon
signing a Release, Covenant Not to Sue and Non-Disclosure and Non-Solicitation
Agreement in the form set forth in the Severance Plan, is entitled to receive:
o a lump sum cash payment equal to two times the highest annual
rate of base salary in effect for the participant during the
twelve month period preceding the notice of termination;
o a lump sum cash payment equal to two times the highest annual
cash incentive bonus earned by the participant during the three
fiscal years preceding the date of termination; and
o two years of employee benefits plans participation and
outplacement services and one year of perquisites or the cash
equivalent.
All payments and benefits are reduced pro rata within two years of normal
retirement. Mr. Lynch's participation letter provides that if he becomes
entitled to receive benefits under the Severance Plan at any time during the
period from the effective time of the merger of Prime with Summit through the
end of the nineteenth full calendar month thereafter, Mr. Lynch will be entitled
to receive a lump sum cash amount equal to 2.99 times his base salary and bonus,
subject to reduction if necessary to avoid payment of excise taxes, rather than
the two times base salary and bonus provided for under the Severance Plan.
Mr. Lynch's participation letter under the Severance Plan provides that
Good Reason includes a termination of employment by Mr. Lynch for any reason
other than disability or retirement during the nineteenth full calendar month
following the effective time of the merger of Prime with Summit. After the
nineteenth full calendar month following the effective time of the merger of
Prime with Summit, the foregoing special provisions provided for by Mr. Lynch's
participation letter will expire and he will be entitled to the rights and
benefits provided generally under the Severance Plan.
TERMINATION AGREEMENTS
The Board of Directors has approved Termination Agreements with certain
executive officers of Summit and its subsidiaries for the purposes of enhancing
the ability of Summit and its subsidiaries to retain existing management and
attract new executives and of rewarding key executives for their service to
Summit and its subsidiaries 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 in
the Termination Agreement) of Summit, the officer will not voluntarily leave the
employ of Summit (except upon a normal retirement date, and, under Mr. Lynch's
agreement, except during the nineteenth month window period described above
under "Executive Severance Plan") and will continue to perform the officer's
regular duties and services for Summit until such person or entity has abandoned
or terminated efforts to effect a Change in Control or until a Change in Control
has occurred. With the exception of Mr. Cox, who retired from Summit effective
March 1, 2000, all of the individuals listed in the Summary Compensation Table
are currently parties to Termination Agreements with Summit. The Termination
Agreements provide that if, within three
21
<PAGE>
years after a Change in Control of Summit, the officer's employment with Summit
is terminated by Summit, other than for Cause (as defined in the Termination
Agreement), death occurring more than 13 months after the Change in Control,
disability or retirement, or by the officer for Good Reason (the definition of
which is substantially similar to the definition set forth in the Severance Plan
but also includes a termination of employment by the officer for any reason
other than disability or normal retirement within 30 days of the first
anniversary of an event constituting a Change in Control), the officer is
entitled to receive:
o a lump sum cash payment equal to the difference between (A) the
sum of three times the officer's base salary at the highest rate
in effect during the twelve-month period preceding the notice of
termination, plus three times the highest annual cash bonus
earned by the officer during the three preceding fiscal years,
and (B) the aggregate lump sum cash amounts relating to base
salary and bonus payable to the officer under Summit's Executive
Severance Plan in the event of the termination of the officer's
employment; and
o upon retirement an amount of total retirement benefits equal to
that which the officer would have received from defined benefit
retirement plans of Summit if the officer's employment had
continued until the earlier of the officer's normal retirement
date or ten years beyond the termination date.
The officer is also entitled to remain an active participant in most
employee welfare benefit plans for a period of 36 months after the date of
termination. The Termination Agreements further provide that in the event any
payment or benefit received or to be received by the officer pursuant to the
Termination Agreements or any other plan, arrangement or agreement of Summit
would, in the opinion of independent tax counsel, be subject to the excise tax
imposed by Section 4999 of the Code, Summit shall pay to the officer an amount
that would restore the officer to the same after tax position as if the excise
tax had not been imposed.
To come within the terms of the Termination Agreements the Change in
Control of Summit must occur, or efforts designed to lead to a Change in Control
of Summit must commence, before the earlier (i) the officer's death, disability
or retirement or (ii) October 15, 2002. The Termination Agreements provide for
automatic renewal on the day following October 15, 2002 and each annual
anniversary thereafter unless the officer is no longer employed by Summit or a
subsidiary of Summit on such date, the officer has reached normal retirement
date or Summit has given twelve months notice that it will not extend the
Termination Agreement.
GRANTOR TRUST
The Board of Directors has authorized the establishment of a trust to hold
assets for the payment of benefits that may become payable to participants in
the Severance Plan and executive officers who are parties to Termination
Agreements with Summit and for such other plans or obligations of Summit as may
be determined by the Board. The trust would be revocable prior to the occurrence
of a "change in control," at which time it would become irrevocable.
STOCK AND OPTION PLANS
The terms of Summit's 1993 Incentive Stock and Option Plan and 1999
Non-Executive Option Plan provide that upon any change in control of Summit all
unexercisable employee stock options become immediately exercisable and all
stock awards subject to restrictions on transferability become immediately
released from such restrictions. In addition, under the 1993 Plan, all stock
awards subject to restrictions on transferability become immediately vested upon
an employee's retirement. These terms apply to all employees holding
unexercisable stock options and restricted stock awards, including executive
officers.
EXECUTIVE STOCK OWNERSHIP GUIDELINES
Summit has adopted stock ownership guidelines for senior management
officers. Covered officers have five years from the later of March 1, 1998 or
the date the officer becomes a participant to achieve the targets, which are
expressed as a multiple of base salary as follows: (i) Chairman and Chief
Executive Officer: six times base salary; (ii) President and Vice Chairman: five
times base salary; (iii) Senior Executive Vice Presidents: four times base
salary; (iv) Executive Vice Presidents: two or three times base salary,
depending upon salary grade. Shares must be beneficially owned to be included
for guidelines purposes and may include shares owned by certain family members
and trusts, shares held through Summit's Savings Plan, the value of shares that
may be acquired upon the exercise of exercisable but unexercised options and
shares held in street name. Each of the executive officers included in the
Summary Compensation Table has achieved the applicable target. Summit also has
guidelines for ownership of stock
22
<PAGE>
acquired through Summit's executive stock program that strongly encourage the
retention of at least one-half of the stock acquired through Summit's stock
option and stock award programs.
PENSION PLANS
Summit maintains a noncontributory pension plan, qualified as a "defined
benefit" pension plan under the Code, which applies to salaried employees,
including executive officers, of Summit and its subsidiaries (the "Basic Plan").
Due to certain benefit restrictions placed on the Basic Plan by the Code, Summit
also maintains a retirement restoration plan and a supplemental retirement plan
applicable to all salaried employees covered by the Basic Plan (the
"Supplemental Plans"). In addition, Summit has a supplemental retirement plan
applicable to certain members of senior management selected by the Compensation
Committee, including all of the individuals listed in the Summary Compensation
Table, (the "Enhanced Retirement Income Plan"). The following table sets forth
the estimated total annual pension benefits payable under the Basic Plan, the
Supplemental Plans and the Enhanced Retirement Income Plan (if applicable) 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 SERVICE INDICATED (a)
YEARLY SALARY OF ------------------------------------------------------------------------
CONSECUTIVE 60 MONTHS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- --------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$200,000 ............. $ 58,421 $ 77,894 $ 97,368 $ 116,841 $ 120,000
$400,000 ............. 118,421 157,894 197,368 236,841 240,000
$600,000 ............. 178,421 237,894 297,368 356,841 360,000
$800,000 ............. 238,421 317,894 397,368 476,841 480,000
$1,000,000 ........... 298,421 397,894 497,368 596,841 600,000
$1,200,000 ........... 358,421 477,894 597,368 716,841 720,000
$1,400,000 ........... 418,421 557,894 697,368 836,841 840,000
$1,600,000 ........... 478,421 637,894 797,368 956,841 960,000
$1,800,000 ........... 538,421 717,894 897,368 1,076,841 1,080,000
$2,000,000 ........... 598,421 797,894 997,368 1,196,841 1,200,000
</TABLE>
- ----------
(a) Years of Credited Service are defined by the plan as years of full-time
employment after the employee has attained age 21.
Covered compensation under the Basic and Supplemental Plans includes only
base salary, whereas the Enhanced Retirement Income Plan provides for inclusion
of bonus payments under the Company's cash bonus plans as part of the
compensation component used to calculate benefits. Accordingly, for the five
individuals named in the Summary Compensation Table covered compensation under
"Highest Average Yearly Salary of Consecutive 60 Months" in the table above
includes base salary and cash bonus (but not restricted stock bonus) reported
under the "Salary" (column (c)) and "Bonus" (column (d)) columns of the Summary
Compensation Table. 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
distribution is chosen. Years of Credited Service under the Basic Plan for the
executive officers listed in the Summary Compensation Table are as follows: Mr.
Semrod, 18 years; Mr. Cox, 3 years; Mr. Collins, 13 years; Mr. Mackoul, 34 years
and Mr. Lynch, 1 year.
Mr. Semrod's employment contract provides for supplemental retirement
benefits calculated in accordance with the formulas of the Basic Plan, the
Supplemental Plans and the Enhanced Retirement Income Plan, subject to the
limitations in such plans most favorable as to ceilings on maximum retirement
benefits payable, but without regard to the benefit limitations imposed by the
Code, and credits Mr. Semrod with years of service commencing February 1, 1963
(an additional 18 years).
Employees and former employees who formerly worked for United Jersey
Bank/Commercial Trust (a predecessor bank to SumNJ), 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 Summit. 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).
23
<PAGE>
Employees and former employees who formerly worked for The Summit
Bancorporation (a predecessor to Summit Bancorp.), including Mr. Cox and John R.
Feeney, are covered for service before January 1, 1997 by a defined benefit,
noncontributory pension plan ("Bancorporation Plan") which provides for
benefits, in general, marginally lower than those described above for the Basic
Plan; however, the compensation component of the formula used to determine
benefits under the Bancorporation Plan, unlike the Basic Plan, uses the highest
average salary over a consecutive 36-month period. Mr. Cox has 23 years of
Credited Service under the Bancorporation Plan. Such employees and former
employees are covered by the Basic Plan and Supplemental Plans for service on
and after January 1, 1997.
Certain former officers of The Summit Bancorporation, including Messrs. Cox
and Feeney, are covered by a supplemental executive retirement plan ("SERP")
maintained by The Summit Bancorporation prior to its merger with Summit and
assumed by Summit in that merger. The SERP provides for payment of retirement
benefits calculated in accordance with the benefit formula of the Bancorporation
Plan but which otherwise cannot be paid by a qualified pension plan under terms
of the Code. The SERP was terminated for periods of service after December 31,
1996, and provides, among other things, for persons who were participants in the
SERP on March 1, 1996 (because the merger constituted a "change of control"
under the SERP on that date) to be credited with years of service under the SERP
through age 65, regardless of their age on March 1, 1996 or at the time of their
retirement.
Employees of Summit should refer to the more detailed Summary Plan
Descriptions available to them.
2. SELECTION OF AUDITORS
The Board of Directors recommends that the shareholders ratify the
selection of KPMG LLP, independent certified public accountants, to audit the
accounts of Summit for 2000.
Representatives of KPMG LLP, who were also Summit's auditors for the year
1999, 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. 2.
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 Summit
and its subsidiaries may solicit proxies on behalf of Summit, for which such
officers and employees will receive no additional compensation other than
reimbursement for actual expense incurred in connection therewith. Summit has
retained Georgeson Shareholder Communications, Inc., Inc. to assist in the
solicitation of proxies for a fee of $6,500, plus reasonable out-of-pocket
expenses. Summit will also reimburse brokers or other persons holding shares in
their names or in the names of their nominees for their reasonable out-of-pocket
expenses in forwarding proxies and proxy material to the beneficial owners of
such shares. Summit 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 2001 Annual Meeting proposals which meet the regulations of the SEC and New
Jersey law and which comply with Summit's By-Laws. In order to be considered for
inclusion, proposals must be received on or before November 6, 2000. Proposals
should be addressed to the Secretary.
The By-Laws of Summit provide that shareholder proposals which do not
appear in the Proxy Statement may be considered at an annual meeting of
shareholders only if written notice of the proposal is received by the Secretary
of Summit not less than 80 and not more than 100 days before the anniversary of
the preceding year's annual meeting provided, however, that, if the date of the
annual meeting is more than 30 days before or more than 60 days after such
24
<PAGE>
anniversary date, the notice of a shareholder proposal, to be timely, must be
received by the Secretary not later than the close of business on the later of
the 80th day prior to such annual meeting or the tenth day following the day on
which public announcement of the meeting date is first made. Any such notice of
a shareholder proposal by a shareholder to the Secretary of Summit 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
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 seven Directors. The vote of a majority of shares cast at
the Annual Meeting is necessary to ratify the selection of independent certified
public accountants. For purposes of determining the number of votes cast with
respect to a matter, only those cast "for" or "against" are included.
Abstentions will not be counted "for" or "against" for purposes of determining
the number of votes cast with respect to a matter but will be counted as present
for quorum purposes. "Broker non-votes" specified on proxies returned by brokers
holding shares for beneficial owners will be treated as present for quorum
purposes but also will not be counted as votes "for" or "against" for purposes
of determining the number of votes cast.
We urge you to vote your shares by telephone, via the Internet or by mail,
as promptly as possible.
We sincerely hope that you will attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
T. JOSEPH SEMROD
Chairman of the Board and
Chief Executive Officer
Dated: March 7, 2000
IT IS IMPORTANT THAT YOUR SHARES ARE VOTED AT THE ANNUAL MEETING. YOU ARE
URGED TO PROMPTLY VOTE YOUR SHARES BY TELEPHONE, VIA THE INTERNET OR BY MAIL.
PLEASE ACT TODAY.
COPIES OF THE CORPORATION'S FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 1999 ARE AVAILABLE WITHOUT CHARGE BY WRITING TO THE SUMMIT BANCORP.
CORPORATE COMPTROLLER, P.O. BOX 2066, PRINCETON, NEW JERSEY 08543-2066.
25
<PAGE>
[GRAPHIC OF MAP GIVING DIRECTIONS TO ANNUAL MEETING]
- --------------------------------------------------------------------------------
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 your 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 Summit Common Stock. PERSONS WITHOUT SUCH PROOF WILL NOT BE SEATED
UNTIL THE MEETING STAFF DETERMINES THERE IS ADEQUATE SEATING FOR ALL ATTENDEES
AND MAY BE DENIED ADMITTANCE ALTOGETHER.
Attendees should at all times wear the official name tag provided by the
Welcome Desks in order that the meeting staff may readily identify attendees
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 Summit at the following address as soon as
possible: Corporate Secretary, ATTN: Annual Meeting Admissions, Summit Bancorp.,
301 Carnegie Center, PO. Box 2066, Princeton, NJ 08543-2066. Doing this will
allow us to prepare your official name tag in advance and eliminate unnecessary
delays upon your arrival at the Annual Meeting.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
P SUMMIT BANCORP
Proxy Solicited on Behalf of the Board of Directors
R of Summit Bancorp for the Annual Meeting on April 14, 2000
O The undersigned hereby constitutes and appoints Robert L. Boyle,
T.J. Dermot Dunphy and Elinor J. Ferdon and each of them, the undersigned's
X true and lawful agents and proxies with full power of substitution in each,
to represent the undersigned at the Annual Meeting of Shareholders of
Y SUMMIT BANCORP. to be held at The Hyatt Regency Princeton, 102 Carnegie
Center, Route 1 at Alexander Road, Princeton, New Jersey on Friday, April
14, 2000, and at any adjournments thereof, on all matters coming before
said meeting.
Election of Directors, Nominees:
James C. Brady, T. J. Dermot Dunphy, Thomas H. Hamilton, Arthur J.
Kania, Francis J. Mertz, T. Joseph Semrod, Douglas G. Watson
You are encouraged to specify your choice by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendations. However, the Proxies cannot vote
your shares unless you sign and return this card.
[SEE REVERSE SIDE]
- --------------------------------------------------------------------------------
1724
[X] Please mark your votes as in this example.
This proxy, when properly executed and timely returned, will be voted in
the manner you direct. If no direction is made, this proxy will be voted FOR the
election of the listed Director nominees and FOR proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 and 2.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors (See Reverse) [ ] [ ]
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of Independent Accountants [ ] [ ] [ ]
- --------------------------------------------------------------------------------
[ ] Please mark this box if you plan to attend the Annual Meeting.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
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.
- -------------------------------------------------
- -------------------------------------------------
SIGNATURE(S) DATE
Summit Bancorp encourages you to take advantage of new and convenient ways by
which you can vote your shares. You can vote your shares electronically through
the internet or the telephone. This eliminates the need to return the proxy
card.
To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system.
1. To vote over the Internet:
o Log on to the Internet and go to the Web site
http://www.vote-by-net.com.
2. To vote over the telephone:
o On a touch-tone telephone, call 1-800-OK2-VOTE (1-800-652-8683) 24
hours a day, seven days a week.
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need to mail back
your proxy card.
YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
V SUMMIT BANCORP.
O PRIME BANK 401(k) PLAN
T Solicited on Behalf of the Board of Directors
I of SUMMIT BANCORP.
N for the Annual Meeting on April 14, 2000
G
The undersigned hereby directs Trustar Retirement Services (formerly
Delaware Charter Guarantee and Trust Co.), Trustee of the Prime Bank
I 401(k) Plan, to vote all of the shares of Summit Bancorp. which are held
N in the undersigned's Plan account at the Annual Meeting of Shareholders
S of SUMMIT BANCORP. to be held on Friday, April 14, 2000 at The Hyatt
T Regency Princeton, 102 Carnegie Center, Route 1 at Alexander Road,
R Princeton, New Jersey, and at any adjournments thereof, as designated on
U the reverse, and in its discretion on such other matters as may properly
C come before the meeting.
T
I
O Election of Directors, Nominees:
N
James C. Brady, T.J. Dermot Dunphy, Thomas H. Hamilton, Arthur J.
Kania, Francis J. Mertz, T. Joseph Semrod, Douglas G. Watson.
C
A
R
D
You are encouraged to specify your choices by marking the appropriate boxes on
the reverse side.
[SEE REVERSE SIDE]
- --------------------------------------------------------------------------------
4036
[X] Please mark your votes as in this example.
This card, when properly executed, will be voted in the manner you direct.
If this card is not timely returned or properly executed, or if no direction is
made, the Trustee will vote shares held in your account in the manner deemed by
the Trustee to be in Plan participants' best interests.
THE SUMMIT BANCORP BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR PROPOSALS 1 AND 2.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors (See Reverse) [ ] [ ]
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of Independent Accountants [ ] [ ] [ ]
- --------------------------------------------------------------------------------
This Card Must Be Signed Exactly As
Your Name Appears Hereon
-----------------------------------
SIGNATURE(S): DATE
Summit Bancorp encourages you to take advantage of new and convenient ways by
which you can vote your shares. You can vote your shares electronically through
the internet or the telephone. This eliminates the need to return the proxy
card.
To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system.
1. To vote over the Internet:
o Log on to the Internet and go to the Web site
http://www.vote-by-net.com.
2. To vote over the telephone:
o On a touch-tone telephone, call 1-800-OK2-VOTE (1-800-652-8683) 24
hours a day, seven days a week.
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need to mail back
your proxy card.
YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
V SUMMIT BANCORP.
O SAVINGS INCENTIVE PLAN
T Solicited on Behalf of the Board of Directors
I of SUMMIT BANCORP.
N for the Annual Meeting on April 14, 2000
G
The undersigned hereby directs Summit Bank, Trustee of the SUMMIT BANCORP.
I Savings Incentive Plan, to vote all of the shares of Summit Bancorp. which
N are held in the undersigned's Plan account at the Annual Meeting of
S Shareholders of SUMMIT BANCORP. to be held on Friday, April 14, 2000 at The
T Hyatt Regency Princeton, 102 Carnegie Center, Route 1 at Alexander Road,
R Princeton, New Jersey, and at any adjournments thereof, as designated on
U the reverse, and in its discretion on such other matters as may properly
C come before the meeting.
T
I
O Election of Directors, Nominees:
N
James C. Brady, T.J. Dermot Dunphy, Thomas H. Hamilton, Arthur J.
Kania, Francis J. Mertz, T. Joseph Semrod, Douglas G. Watson
C
A
R
D
You are encouraged to specify your choices by marking the appropriate boxes on
the reverse side.
[SEE REVERSE SIDE]
- --------------------------------------------------------------------------------
4036
[X] Please mark your votes as in this example.
This card, when properly executed, will be voted in the manner you direct.
If this card is not timely returned or properly executed, or if no direction is
made, the Trustee will vote shares held in your Sub-Fund B account in the manner
deemed by the Trustee to be in Plan participants' best interests.
THE SUMMIT BANCORP. BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS
1 AND 2.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of Directors (See Reverse) [ ] [ ]
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of Independent Accountants [ ] [ ] [ ]
- --------------------------------------------------------------------------------
This Card Must Be Signed Exactly As
Your Name Appears Hereon
-----------------------------------
SIGNATURE(S): DATE
Summit Bancorp encourages you to take advantage of new and convenient ways by
which you can vote your shares. You can vote your shares electronically through
the internet or the telephone. This eliminates the need to return the proxy
card.
To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system.
1. To vote over the Internet:
o Log on to the Internet and go to the Web site
http://www.vote-by-net.com.
2. To vote over the telephone:
o On a touch-tone telephone, call 1-800-OK2-VOTE (1-800-652-8683) 24
hours a day, seven days a week.
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need to mail back
your proxy ca;rd.
YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.
- --------------------------------------------------------------------------------
