<PAGE>
SCHEDULE 14-A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
South Jersey Financial Corporation, Inc.
--------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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)(1) and 0-11
1) Title of each class of securities to which transaction applies:
......................................................................
2) Aggregate number of securities to which transaction applies:
......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
......................................................................
4) Proposed maximum aggregate value of transaction:
......................................................................
5) Total fee paid:
......................................................................
<PAGE>
[ ] 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:
.........................................................
2) Form, Schedule or Registration Statement No.:
.........................................................
3) Filing Party:
.........................................................
4) Date Filed:
.........................................................
<PAGE>
South Jersey Financial Corporation, Inc.
4651 Route 42
Turnersville, New Jersey 08012
(609) 629-6000
July 16, 1999
Dear Shareholders:
You are cordially invited to attend the annual meeting of shareholders (the
"Annual Meeting") of South Jersey Financial Corporation, Inc. (the "Company"),
the holding company for South Jersey Savings and Loan Association (the
"Association"), Turnersville, New Jersey, which will be held on August 18, 1999
at 2:00 p.m., Eastern Time, at the Four Points Hotel by Sheraton, 1450 Route 70
East, Cherry Hill, New Jersey.
The attached Notice of the Annual Meeting and the Proxy Statement describe
the business to be transacted at the Annual Meeting. Directors and officers of
the Company, as well as a representative of Deloitte & Touche LLP, the Company's
independent auditors, will be present at the Annual Meeting to respond to any
questions that our shareholders may have.
The Board of Directors of the Company has determined that matters to be
considered at the Annual Meeting are in the best interests of the Company and
its shareholders. For the reasons set forth in the Proxy Statement, the Board
of Directors unanimously recommends that you vote "FOR" each of the nominees
nominated as directors by the Nominating Committee specified under Proposal 1
and that you vote "FOR" the ratification of independent auditors as specified
under Proposal 2.
Please promptly sign and date the enclosed BLUE proxy card and return it in
the enclosed postage-paid BLUE envelope. Your cooperation is appreciated since
a majority of the common stock must be represented, either in person or by
proxy, to constitute a quorum for the conduct of business at the Annual Meeting.
On behalf of the Board of Directors and all of the employees of the Company
and the Association, I thank you for your continued interest and support.
Sincerely yours,
Robert J. Colacicco
President and Chief Executive Officer
<PAGE>
South Jersey Financial Corporation, Inc.
4651 Route 42
Turnersville, New Jersey 08012
__________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on August 18, 1999
__________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of South Jersey Financial Corporation, Inc. (the "Company"), the
holding company for South Jersey Savings and Loan Association (the
"Association"), will be held on August 18, 1999 at 2:00 p.m., Eastern Time, at
the Four Points Hotel by Sheraton, 1450 Route 70 East, Cherry Hill, New Jersey.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of three directors for terms of three years each or until
their successors are elected and qualified;
2. The ratification of the appointment of Deloitte & Touche LLP as
independent auditors of the Company for the year ending December 31,
1999; and
3. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
The Board of Directors has established July 9, 1999 as the record date for
the determination of shareholders entitled to receive notice of and to vote at
the Annual Meeting and at any adjournments thereof. Only record holders of the
common stock of the Company as of the close of business on such record date will
be entitled to vote at the Annual Meeting or any adjournments thereof. In the
event there are not sufficient votes for a quorum or to approve the foregoing
proposals at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit further solicitation of proxies by the Company. A list of
shareholders entitled to vote at the Annual Meeting will be available at South
Jersey Financial Corporation, Inc., 4651 Route 42, Turnersville, New Jersey
08012, for a period of ten days prior to the Annual Meeting and will also be
available at the Annual Meeting itself.
By Order of the Board of Directors
Joseph M. Sidebotham
Corporate Secretary
Turnersville, New Jersey
July 16, 1999
<PAGE>
South Jersey Financial Corporation, Inc.
_______________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
August 18, 1999
_______________________
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to shareholders of South Jersey
Financial Corporation, Inc. (the "Company") in connection with the solicitation
by the Board of Directors ("Board of Directors" or "Board") of proxies to be
used at the annual meeting of shareholders (the "Annual Meeting"), to be held on
August 18, 1999, at 2:00 p.m., Eastern Time, at the Four Points Hotel by
Sheraton, 1450 Route 70 East, Cherry Hill, New Jersey, and at any adjournments
thereof. The 1999 Annual Report to Stockholders, including the financial
statements of the Company for the year ended December 31, 1998, accompanies this
Proxy Statement which is first being mailed to record holders on or about July
16, 1999.
Regardless of the number of shares of common stock owned, it is important
that record holders of a majority of the shares be represented by proxy or in
person at the Annual Meeting. Shareholders are requested to vote by completing
the enclosed BLUE proxy card and returning it signed and dated in the enclosed
postage-paid BLUE envelope. Shareholders are urged to indicate their vote in
the spaces provided on the proxy card. Proxies solicited by the Board of
Directors of the Company will be voted by the Board of Directors in accordance
with the directions given therein. Where no instructions are indicated, signed
proxy cards will be voted "FOR" the election of the nominees for director
nominated by the Nominating Committee of the Board of Directors and named in
this Proxy Statement and "FOR" the ratification of Deloitte & Touche LLP as
independent auditors of the Company for the year ending December 31, 1999.
Other than the matters listed on the attached Notice of Annual Meeting of
Shareholders, the Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting and at any adjournments
thereof, including whether or not to adjourn the Annual Meeting.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to attend the Annual Meeting
and vote personally at the Annual Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Kissel-
Blake Inc. ("Kissel-Blake"), a proxy solicitation firm, will assist the Company
in soliciting proxies for the Annual Meeting and will be paid a fee of $30,000,
plus out-of-pocket expenses. Proxies may also be solicited personally or by
telephone by directors, officers and other employees of the Company and its
subsidiary, South Jersey
<PAGE>
Savings and Loan Association (the "Association"), without additional
compensation therefor. The Company will also request persons, firms and
corporations holding shares in their names, or in the name of their nominees,
which are beneficially owned by others, to send proxy material to, and obtain
proxies from, such beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
Voting Securities
The securities which may be voted at the Annual Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual Meeting, except as
described below.
The close of business on July 9, 1999, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of, and to vote at, the Annual Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 3,793,430 shares.
As provided in the Company's Certificate of Incorporation, for voting
purposes, holders of Common Stock who beneficially own in excess of 10% of the
outstanding shares of Common Stock (the "Limit") are not entitled to any vote in
respect of the shares held in excess of the Limit and are not treated as
outstanding for voting purposes. A person or entity is deemed to beneficially
own shares owned by an affiliate of, as well as, by persons acting in concert
with, such person or entity. The Company's Certificate of Incorporation
authorizes the Board of Directors (i) to make all determinations necessary to
implement and apply the Limit, including determining whether persons or entities
are acting in concert, and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit to supply information
to the Company to enable the Board of Directors to implement and apply the
Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Annual
Meeting. In the event that there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to the election of directors (Proposal 1), the BLUE proxy card being
provided by the Board of Directors enables you to vote "FOR" the election of the
nominees proposed by the Board, or to "WITHHOLD" authority to vote for one or
more of the nominees being proposed. Under Delaware law and the Company's
Bylaws, directors are elected by a plurality of votes cast, without regard to
either (i) broker non-votes or (ii) proxies as to which authority to vote for
one or more of the nominees being proposed is withheld.
As to the ratification of Deloitte & Touche LLP as independent auditors of
the Company (Proposal 2) and all other matters that may properly come before the
Annual Meeting, by checking the appropriate box on the proxy card, you may (i)
vote "FOR" the item, (ii) vote "AGAINST" the item, or (iii) "ABSTAIN" from
voting on such item.
2
<PAGE>
Under the Company's Bylaws and Delaware law, an affirmative vote of the
holders of a majority of the votes cast at the Annual Meeting on Proposal 2 is
required to constitute shareholder approval of such Proposal. Shares underlying
broker non-votes or in excess of the Limit will not be counted as present and
entitled to vote or as votes cast and will have no effect on the vote.
Proxies solicited hereby are to be returned to Kissel-Blake, and will be
tabulated by inspectors of election designated by the Board of Directors, who
will not be employed by, or a director of, the Company or any of its
affiliates. After the final adjournment of the Annual Meeting, the proxies will
be returned to the Company for safekeeping.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
received to date regarding such ownership filed by such persons with the Company
and with the Securities and Exchange Commission (the "SEC"), in accordance with
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Other than those persons listed below, the Company is not
aware of any person, as such term is defined in the Exchange Act, that owns more
than 5% of the Company's Common Stock as of the Record Date.
3
<PAGE>
<TABLE>
<CAPTION>
Name and Address of
Title of Class Beneficial Owner Number of Shares Percent of Class
-------------- ------------------- ---------------- ----------------
<S> <C> <C> <C>
Common Stock Seidman and Associates, L.L.C., 330,600(1) 8.7%
Seidman and Associates II, L.L.C.,
Seidman Investment Partnership, L.P.,
Seidman Investment Partnership II, L.P.,
Lawrence B. Seidman, Kerrimatt, L.P.,
Federal Holdings, L.L.C., Benchmark
Partners, L.P., Richard Whitman,
Lorraine DiPaolo
100 Misty Lane
Parsippany, New Jersey 07054
Common Stock South Jersey Savings and Loan Association 303,474(2) 8.0%
Employee Stock Ownership Plan (the "ESOP")
4651 Route 42
Turnersville, New Jersey 08012
Common Stock The South Jersey Savings Charitable Foundation 280,995(3) 7.4%
(the "Foundation")
4651 Route 42
Turnersville, New Jersey 08012
</TABLE>
__________________
(1) Based on information disclosed by the group of reporting persons set forth
herein in a Schedule 13D filed with the SEC and most recently amended on
June 4, 1999. In addition, based on information disclosed in preliminary
proxy materials filed with the SEC on behalf of this group of reporting
persons, this group of reporting persons may beneficially own and/or control
up to 350,600 shares, or 9.2%, of the Company's Common Stock.
(2) Shares of Common Stock were acquired by the ESOP in the Association's
conversion. The ESOP Committee administers the ESOP. The ESOP Trustee
votes all allocated shares held in the ESOP in accordance with the
instructions of the participants. As of July 9, 1999, no shares have been
allocated to ESOP participants. However, for the sole purpose of providing
the ESOP Trustee with voting instructions each participant shall be deemed
to have one share allocated to his account. Under the ESOP, the ESOP
Trustee, subject to its fiduciary duties under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), votes unallocated shares
held in a suspense account in a manner calculated to most accurately reflect
the instructions received from participants regarding the allocated stock.
(3) The Foundation was established and funded by the Company in connection with
the Association's Conversion with an amount of the Company's Common Stock
equal to 8.0% of the total amount of Common Stock sold in the Conversion.
The Foundation is a Delaware non-stock corporation and is dedicated to the
promotion of charitable purposes within the communities in which the
Association operates. The Foundation is governed by a board of directors
with four members, three of whom are directors or officers of the Company or
the Association. Pursuant to the terms of the contribution of Common Stock,
as mandated by the Office of Thrift Supervision ("OTS"), all shares of
Common Stock held by the Foundation must be voted in the same ratio as all
other shares of the Company's Common Stock on all proposals considered by
shareholders of the Company.
Interest of Certain Persons in Matters to be Acted Upon
The three nominees proposed by the Board of Directors standing for election
as director were unanimously nominated by the Nominating Committee of the Board
of Directors. Neither Arthur E. Armitage, Jr. or John V. Field are being
proposed for election pursuant to any agreement or understanding between either
of them and the Company. The Association and the Company have entered into
Employment Agreements with Gregory M. DiPaolo, which agreements are more fully
detailed in the "Employment Agreements" Section of this Proxy Statement. While
the Company is not required to nominate Mr. DiPaolo for election to the Board of
Directors, the terms of his Employment Agreements could be triggered in the
event he was not elected to the Board of Directors.
4
<PAGE>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of eight directors
and is divided into three classes. Each of the eight members of the Board of
Directors also presently serves as a director of the Association. Directors are
elected for staggered terms of three years each, with the term of office of only
one of the three classes of directors expiring each year. Directors serve until
their successors are elected and qualified.
The three nominees proposed for election at the Annual Meeting are Arthur
E. Armitage, Jr., Gregory M. DiPaolo and John V. Field.
In the event that any nominee is unable to serve or declines to serve for
any reason, it is intended that proxies will be voted for the election of the
balance of those nominees named and for such other persons as may be designated
by the present Board of Directors. The Board of Directors has no reason to
believe that any of the persons named will be unable or unwilling to serve.
Unless authority to vote for the directors is withheld, it is intended that the
shares represented by the enclosed BLUE proxy card will be voted "FOR" the
election of all nominees proposed by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
NAMED IN THIS PROXY STATEMENT.
Information with Respect to Nominees, Continuing Directors and Certain Executive
Officers
The following table sets forth, as of the Record Date, the names of
nominees and continuing directors and the Named Executive Officers (as defined
below), their ages, a brief description of their recent business experience,
including present occupations and employment, the year in which each became a
director of the Association and the year in which their terms (or, in the case
of nominees, their proposed terms) as director of the Company expire. This
table also sets forth the amount of Common Stock and the percent thereof
beneficially owned by each director and all directors and executive officers as
a group as of the Record Date.
5
<PAGE>
<TABLE>
<CAPTION>
Amount and
Expiration of Nature of Ownership as
Name and Principal Occupation at Present Director Term as Beneficial a Percent of
and for Past Five Years Age Since(1) Director Ownership(2) Class(3)
---------------------------------------- --- -------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
NOMINEES
Arthur E. Armitage, Jr. 78 1969 2002 10,000 *
Former President and owner of a general
insurance firm
Gregory M. DiPaolo 50 1982 2002 34,800 *
Executive Vice President, Treasurer,
and Chief Operating Officer of the
Association and the Company
John V. Field 55 1998 2002 20,000 *
Attorney and sole shareholder in the firm
of John V. Field, PA; General Counsel of
the Association
CONTINUING DIRECTORS
Robert J. Colacicco 64 1976 2000 10,000 *
President and Chief Executive Officer of
the Association and the Company
Richard W. Culbertson, Jr. 54 1992 2001 5,200 *
Certified public accountant and partner in
the firm Bowman & Company LLP,
Voorhees, New Jersey
Richard G. Mohrfeld 53 1983 2000 5,000 *
President of Mohrfeld, Inc., a heating oil
distributor in Collingswood, New Jersey
Martin Rosner 92 1943 2000 1,000 *
Former retailer in Collingswood, New
Jersey; now retired
Ronald L. Woods 40 1998 2001 27,600 *
Representative of Lenny, Vermaat and
Leonard, a real estate brokerage firm in
Haddonfield, New Jersey
All directors and executive officers as a group
(11 persons).............................................. -- -- -- 134,400 3.54%
</TABLE>
- ------------------
* Does not exceed 1.0% of the Company's voting securities.
(1) Includes years of service as a director of the Association.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family members) voting or dispositive power as to shares reported.
(3) As of the Record Date, there were 3,793,430 shares of Common Stock
outstanding.
6
<PAGE>
In addition, Seidman & Associates, LLC and Lawrence B. Seidman ("Seidman
Group") have notified the Company of their intent to nominate Richard Baer and
Lawrence B. Seidman to stand for election to the Board of Directors. YOUR BOARD
URGES YOU TO RETURN ONLY MANAGEMENT'S BLUE PROXY CARD, WHICH IS ENCLOSED.
Meetings of the Board of Directors and Committees of the Board of Directors
The Board of Directors of the Company and the Board of Directors of the
Association conduct business through meetings of the Board of Directors and
through activities of their committees. The Board of Directors of the Company
and Association generally meet on a monthly basis and may have additional
meetings as needed. During the year ended December 31, 1998, the Board of
Directors of the Company, which was formed on September 28, 1998, held 4
meetings primarily related to organizational and other matters in connection
with the formation of the Company and the acquisition of the Association through
the Conversion. The Board of Directors of the Association held 23 meetings
during 1998. All of the directors of the Company and Association attended at
least 75% of the total number of the Company's Board meetings held and committee
meetings on which such directors served during the year ended December 31, 1998.
The Board of Directors of the Company and Association maintain committees, the
nature and composition of which are described below:
Audit Committee. The Audit Committee of the Company consists of Messrs.
Armitage, Culbertson, Field, Mohrfeld, Rosner and Woods. This committee
generally meets on an annual basis and is responsible for the review of audit
reports and management's actions regarding the implementation of audit findings
and to review compliance with all relevant laws and regulations. Due to the
timing of the Conversion, the Audit Committee of the Company did not meet in
1998.
Nominating Committee. The Company's Nominating Committee for the 1999
Annual Meeting consists of the full Board of Directors. The committee considers
and recommends the nominees for director to stand for election at the Company's
annual meeting of shareholders. The Company's Certificate of Incorporation and
Bylaws provide for shareholder nominations of directors. These provisions
require such nominations to be made pursuant to timely notice in writing to the
Secretary of the Company. The shareholder's notice of nomination must contain
all information relating to the nominee which is required to be disclosed by the
Company's Bylaws and by the Exchange Act. See "Additional Information - Notice
of Business to be Conducted at a Special or Annual Meeting." Due to the timing
of the Conversion, the Nominating Committee of the Company did not meet in 1998,
and has met one time during 1999.
Compensation Committee. The Compensation Committee of the Company consists
of the full Board of Directors. The Compensation Committee of the Association
consists of Messrs. Armitage, Culbertson, Mohrfeld and Rosner. Such committees
are responsible for all matters regarding compensation and fringe benefits for
officers and employees of the Company and the Association and meet on an as
needed basis. The Compensation Committee of the Company did not meet in 1998
and the Compensation Committee of the Association met once in 1998.
7
<PAGE>
Directors' Compensation
Directors' Fees. All non-employee directors of the Association receive an
annual retainer of $7,000 a year, except that the Chairman of the Board receives
an annual retainer of $8,000. All non-employee directors of the Association
also receive $450 for each Board meeting attended and $200 for each Committee
meeting attended. Non-employee directors of the Company receive an annual
retainer of $3,500 and do not receive additional fees for meetings of the Board
of Directors of the Company.
Executive Compensation
Summary Compensation Table. The following table sets forth the
compensation paid by the Association for services rendered in all capacities
during the years ended December 31, 1998, 1997 and 1996, to the Chief Executive
Officer and to executive officers of the Association who received salary and
bonus in excess of $100,000 ("Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term Compensation/(2)/
---------------------------------
Annual Compensation/(1)/ Awards Payouts
-------------------------------------- ----------------------- -------
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Positions Year Salary Bonus Compensation/(2)/ Awards Options/SARs Payouts Compensation/(3)/
- ------------------- --- ------ ----- ---------------- ----- ------------ ------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert J. Colacicco 1998 $170,435 $31,044 -- -- -- -- $39,821
President and Chief 1997 $141,107 $29,529 -- -- -- -- $38,275
Executive Officer 1996 $139,385 $28,120 -- -- -- -- $31,846
Gregory M. DiPaolo 1998 $142,730 $25,982 -- -- -- -- $25,729
Executive Vice President, 1997 $118,102 $24,733 -- -- -- -- $24,937
Treasurer and 1996 $116,748 $23,324 -- -- -- -- $22,588
Chief Operating Officer
</TABLE>
- -------------------------
(1) Under Annual Compensation, the column titled "Bonus" consists of Board
approved discretionary bonuses.
(2) For 1998, there were no (a) perquisites over the lesser of $50,000 or 10% of
the individual's total salary and bonus for the year; (b) payments of above-
market preferential earnings on deferred compensation; (c) payments of
earnings with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payment reimbursements; or (e) preferential discounts on
stock. For 1998, the Association had no restricted stock or stock-related
plans in existence.
(3) For 1998, other compensation consists of employer contributions of $26,992
and $24,577, to the Association's money purchase pension plan on behalf of
Messrs. Colacicco and DiPaolo, respectively, and $10,723 credited by the
Association on behalf of Mr. Colacicco to the Association's non-qualified
deferred compensation plan. For 1998, other compensation also includes the
value of life insurance premiums of $2,106 and $1,152 paid by the
Association on behalf of Messrs. Colacicco and DiPaolo, respectively.
8
<PAGE>
Employment Agreements
Effective as of February 12, 1999, the Association entered into employment
agreements with Messrs. Colacicco and DiPaolo, Joseph M. Sidebotham, Paul D.
Wampler and Jane E. Brode (collectively, the "Association Employment
Agreements"), and the Company entered into employment agreements with Messrs.
Colacicco, DiPaolo and Sidebotham (collectively, the "Company Employment
Agreements") (individually, the "Executive" and, collectively, the
"Executives"). The employment agreements are intended to ensure that the
Association's and the Company's management base remains stable. The continued
success of the Association and the Company depends to a significant degree on
the skills and competence of the Executives.
The Association Employment Agreements provide for a three-year term for
Messrs. Colacicco and DiPaolo and a two-year term for Messrs. Sidebotham and
Wampler and Ms. Brode. Each Association Employment Agreement provides that
commencing on the first anniversary date of the agreement and continuing each
anniversary date thereafter the Board of Directors may extend the agreement for
an additional year so that the remaining term shall be three years, in the case
of Messrs. Colacicco and DiPaolo, and two years, in the case of Messrs.
Sidebotham and Wampler and Ms. Brode, unless written notice of non-renewal is
given by the Board of Directors of the Association after conducting a
performance evaluation of the Executive. Each Company Employment Agreement
provides for a three-year term for Messrs. Colacicco and DiPaolo and a two-year
term for Mr. Sidebotham. The term of each Company Employment Agreement
automatically extends on a daily basis, unless written notice of non-renewal is
given by the Board of Directors of the Company or the Executive. The
Association and Company Employment Agreements provide that the Executive's base
salary will be reviewed annually. The base salaries which will initially be
effective for such employment agreements for Messrs. Colacicco, DiPaolo,
Sidebotham and Wampler and Ms. Brode will be $170,430, $142,731, $87,403,
$86,256 and $94,316, respectively. In addition to the base salary, the
employment agreements provide for, among other things, participation in various
employee benefit plans and stock-based compensation programs, as well as
furnishing fringe benefits available to similarly-situated executive personnel.
The employment agreements provide for termination of the Executive by the
Association or the Company for cause (as described in the agreements) at any
time. In the event the Association or the Company chooses to terminate the
Executive's employment for reasons other than for cause or, in the event of the
Executive's resignation from the Association or the Company, as the case may be,
upon: (i) failure to re-elect or re-appoint the Executive to his current
office; (ii) a material change in the Executive's functions, duties or
responsibilities; (iii) a relocation of the Executive's principal place of
employment by more than 25 miles; (iv) the liquidation or dissolution of the
Association or the Company; or (v) a breach of the Employment Agreement by the
Association or the Company (collectively referred to as an "Event of
Termination"), the Executive or, in the event of the Executive's death, the
Executive's beneficiary would be entitled to receive an amount generally equal
to the remaining base salary and bonus payments that would have been paid to the
Executive during the remaining term of the Employment Agreements. In addition,
the Executive would receive a payment attributable to the contributions that
would have been made on the Executive's behalf to any employee benefit plans of
the Association or the Company during the remaining term of the employment
agreements, together with the value of stock-based incentives previously awarded
to the Executive. The Association and the Company would also continue and pay
for the Executive's life, health and disability coverage for the remaining term
of the employment agreement. Upon the
9
<PAGE>
occurrence of an Event of Termination, the Executive is subject to a covenant
not to compete with the Company or the Association for one year.
Under the employment agreements, if involuntary termination or voluntary
termination of the Executive's employment follows a change in control of the
Association or the Company, the Executive or, in the event of the Executive's
death, the Executive's beneficiary, would receive a severance payment generally
equal to the greater of: (i) the payments due for the remaining terms of the
agreement, including the value of stock-based incentives previously awarded to
the Executive; or (ii) three times the average of the five preceding taxable
years' annual compensation. The Association and the Company would also continue
the Executive's life, health, and disability coverage for thirty-six months, in
the case of Messrs. Colacicco and DiPaolo, and twenty-four months in the case of
Messrs. Sidebotham and Wampler and Ms. Brode. Notwithstanding that both the
Company and Association agreements provide for a severance payment in the event
of a change in control, the Executive may receive a severance payment under only
one agreement. In the event of a change in control of the Association or
Company, the total amount of payments due under the Employment Agreements, based
solely on the base salaries set forth above, and excluding any benefits under
any employee benefit plan which may otherwise become payable, would equal
approximately $1.7 million.
Payments to the Executive under the Association Employment Agreements are
guaranteed by the Company in the event that payments or benefits are not paid by
the Association. Payments under the Company Employment Agreements would be made
by the Company. All reasonable costs and legal fees paid or incurred by the
Executive pursuant to any dispute or question of interpretation relating to the
employment agreements will be paid by the Company or the Association, if the
Executive is successful on the merits pursuant to a legal judgment, arbitration
or settlement. The employment agreements also provide that the Association and
Company shall indemnify the Executive to the fullest extent allowable under
federal, New Jersey and Delaware law, respectively.
Change in Control Agreements
Effective as of February 12, 1999, the Association entered into two-year
Change in Control Agreements with six employees of the Association and a one-
year Change in Control Agreement with one employee of the Association (the "CIC
Agreements"), none of whom are covered by an employment agreement. Commencing
on the first anniversary date of the agreements and continuing on each
anniversary thereafter, the CIC Agreements may be renewed by the Board of
Directors of the Association for an additional year. The CIC Agreements provide
that in the event involuntary termination or, under certain circumstances,
voluntary termination follows a change in control of the Association or the
Company, the covered employee would be entitled to receive a severance payment
equal to either one or two times the covered employee's average annual
compensation for the five most recent taxable years preceding termination,
depending on the particular agreement. The Association would also continue and
pay for the covered employee's life, health and disability coverage for 24
months under the two-year CIC Agreements and 12 months under the one-year CIC
Agreement following termination. Payments to the covered employee under the CIC
Agreements are guaranteed by the Company in the event that payments or benefits
are not paid by the Association. In the event of a change in control of the
Association or Company, the total payments
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that would be due under the CIC Agreements, based solely on the current annual
salaries paid to the seven employees covered by the CIC Agreements, would be
approximately $542,000.
Employee Severance Compensation Plan
In connection with the Conversion, the Association's Board of Directors
established the South Jersey Savings and Loan Association Employee Severance
Compensation Plan (the "Severance Plan") to provide eligible employees with
severance pay benefits in the event of a change in control of the Association or
the Company. Management personnel with employment agreements or change in
control agreements will not participate in the Severance Plan. Generally, all
employees are eligible to participate in the Severance Plan if they have
completed at least one year of service with the Association or any subsidiary or
parent of the Association. Under the Severance Plan, in the event of a change
in control of the Association or the Company, eligible employees who terminate
employment within one year of the change in control (for reasons specified under
the Severance Plan), will receive a severance payment equal to one-twelfth of
their current annual compensation for each year of service completed with the
Association, up to a maximum of 199% of their current annual compensation. In
the event the provisions of the Severance Plan were triggered, the total amount
of payments that would be due thereunder, based solely upon current salary
levels, would equal approximately $696,000.
Supplemental Executive Retirement Plan. The Code limits the amount of
compensation the Association may consider in providing benefits under its tax-
qualified retirement plans, such as the South Jersey Savings and Loan
Association Money Purchase Pension Plan ("Pension Plan") and the ESOP. The Code
further limits the amount of annual contributions and benefit accruals under
such plans on behalf of any employee. The Association sponsors a non-qualified
supplemental executive retirement plan (the "SERP") to provide benefits to make
up for the reduction in benefits flowing from these limits in connection with
the Company's Pension Plan and the ESOP. In addition to providing for benefits
lost under tax-qualified plans as a result of limitations imposed by the Code,
the SERP will also make up lost ESOP benefits to designated individuals who
retire, who terminate employment in connection with a change in control, or
whose participation in the ESOP ends due to termination of the ESOP in
connection with a change in control (regardless of whether the individual
terminates employment) prior to the complete scheduled repayment of the ESOP
loan. Generally, upon such an event, the SERP will provide the individual with
a benefit equal to what the individual would have received under the ESOP had he
remained employed or continued to participate in the ESOP throughout the
scheduled term of the ESOP loan. An individual's benefits under the SERP will
become payable upon the participant's retirement as described in the plan, upon
the change in control of the Association or the Company, or as determined under
the ESOP and Pension Plan.
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Transactions With Certain Related Persons
Federal regulations require that all loans or extensions of credit to
executive officers and directors must be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and must not involve more than
the normal risk of repayment or present other unfavorable features. In
addition, loans made to a director or executive officer in excess of the greater
of $25,000 or 5% of the Association's capital and surplus (up to a maximum of
$500,000) must be approved in advance by a majority of the disinterested members
of the Board of Directors.
The Association currently makes loans to its executive officers and
directors on the same terms and conditions offered to the general public. The
Association's policy provides that all loans made by the Association to its
executive officers and directors be made in the ordinary course of business, on
substantially the same terms, including collateral, as those prevailing at the
time for comparable transactions with other persons and may not involve more
than the normal risk of collectibility or present other unfavorable features. As
of December 31, 1998, one of the Association's directors, Mr. Mohrfeld, had a
residential first mortgage loan with the Association which had an outstanding
balance totaling $211,000. Such loan was made by the Association in the ordinary
course of business, with no favorable terms and such loan does not involve more
than the normal risk of collectibility or present unfavorable features.
The Company intends that all transactions in the future between the Company
and its executive officers, directors, holders of 10% or more of the shares of
any class of its common stock and affiliates thereof, will contain terms no less
favorable to the Company than could have been obtained by it in arm's length
negotiations with unaffiliated persons and will be approved by a majority of
independent outside directors of the Company not having any interest in the
transaction.
Other Transactions With Affiliates
The Company and the Association utilize the services of the law offices of
John V. Field, PA, of which Mr. Field, a director of the Company and the
Association, is the sole shareholder, for a variety of legal work, relating to
the ordinary course of the Company's and Association's business. During 1998,
the Company and the Bank made payments to Mr. Field's firm for legal services
totalling $21,000.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the year ended December 31, 1998
were Deloitte & Touche LLP. The Company's Board of Directors has reappointed
Deloitte & Touche LLP to continue as independent auditors for the Association
and the Company for the year ending December 31, 1999, subject to ratification
of such appointment by the shareholders.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting. They will be given an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions from
shareholders present at the Annual Meeting.
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Unless marked to the contrary, the shares represented by the enclosed BLUE
proxy card will be voted "FOR" ratification of the appointment of Deloitte &
Touche LLP as the independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
ADDITIONAL INFORMATION
Shareholder Proposals
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 2000 Annual Meeting of Shareholders, a shareholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Shareholders not later than April 20,
2000. Any such proposal will be subject to 17 C.F.R. (S) 240.14a-8 of the Rules
and Regulations under the Exchange Act.
Notice of Business to be Conducted at a Special or Annual Meeting
The Bylaws of the Company set forth the procedures by which a shareholder
may properly bring business before a meeting of shareholders. Pursuant to the
Bylaws, only business brought by or at the direction of the Board of Directors
may be conducted at a special meeting. The Bylaws of the Company provide an
advance notice procedure for a shareholder to properly bring business before an
annual meeting. The shareholder must give written advance notice to the
Secretary of the Company not less than ninety (90) days before the date
originally fixed for such meeting; provided, however, that in the event that
less than one hundred (100) days notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the tenth day
following the date on which the Company's notice to shareholders of the annual
meeting date was mailed or such public disclosure was made. The advance notice
by shareholders must include the shareholder's name and address, as they appear
on the Company's record of shareholders, a brief description of the proposed
business, the reason for conducting such business at the annual meeting, the
class and number of shares of the Company's capital stock that are beneficially
owned by such shareholder and any material interest of such shareholder in the
proposed business. In the case of nominations to the Board of Directors, certain
information regarding the nominee must be provided. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement or the
proxy relating to any Annual Meeting any shareholder proposal which does not
meet all of the requirements for inclusion established by the SEC in effect at
the time such proposal is received.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the
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persons named in the accompanying proxy to vote the shares represented thereby
on such matters in accordance with their best judgment.
Whether or not you intend to be present at the Annual Meeting, you are
urged to promptly sign your BLUE proxy card and return it in the enclosed self-
addressed BLUE envelope. If you are then present at the Annual Meeting and wish
to vote your shares in person, your original proxy may be revoked by voting at
the Annual Meeting. However, if you are a shareholder whose shares are not
registered in your own name, you will need appropriate documentation from your
recordholder to vote personally at the Annual Meeting.
A COPY OF THE FORM 10-KSB (WITHOUT EXHIBITS) FOR THE YEAR ENDED DECEMBER
31, 1998, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO
SHAREHOLDERS OF RECORD UPON WRITTEN REQUEST TO GREGORY M. DIPAOLO, SOUTH JERSEY
FINANCIAL CORPORATION, INC., 4651 ROUTE 42, TURNERSVILLE, NEW JERSEY 08012.
By Order of the Board of Directors
Joseph M. Sidebotham
Corporate Secretary
Turnersville, New Jersey
July 16, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, YOU ARE REQUESTED TO SIGN, DATE AND PROMPTLY
RETURN THE ACCOMPANYING BLUE PROXY CARD IN THE
ENCLOSED POSTAGE-PAID BLUE ENVELOPE.
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SOUTH JERSEY FINANCIAL CORPORATION, INC.
ANNUAL MEETING OF SHAREHOLDERS
August 18, 1999
2:00 p.m. Eastern Time
_______________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of the Board
of Directors of South Jersey Financial Corporation, Inc. (the "Company"), each
with full power of substitution, to act as proxy for the undersigned, and to
vote all shares of common stock of the Company which the undersigned is entitled
to vote only at the Annual Meeting of Shareholders, to be held on August 18,
1999, at 2:00 p.m. Eastern Time, at the Four Points Hotel by Sheraton, 1450
Route 70 East, Cherry Hill, New Jersey and at any and all adjournments thereof,
with all of the powers the undersigned would possess if personally present at
such meeting as follows:
1. The election as directors of all nominees listed (except as marked to
the contrary below).
Arthur E. Armitage, Jr.
Gregory M. DiPaolo
John V. Field
FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- -------
[ ] [ ] [ ]
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR
ALL EXCEPT" and write that nominee's name on the line provided below.
- -------------------------------------------------------------------------------
2. The ratification of the appointment of Deloitte & Touche LLP as
independent auditors of South Jersey Financial Corporation, Inc. for the
year ending December 31, 1999.
FOR AGAINST ABSTAIN
--- ------- -------
[ ] [ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
EACH OF THE LISTED PROPOSALS.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy will be voted "FOR" each of the proposals
listed. If any other business is presented at the Annual Meeting, including
whether or not to adjourn the meeting, this proxy will be voted by the proxies
in their best judgment. At the present time, the Board of Directors knows of no
other business to be presented at the Annual Meeting.
The above-signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Shareholders and of a
Proxy Statement dated July 16, 1999 and of the Annual Report to Shareholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
Dated:___________________________
________________________________
SIGNATURE OF SHAREHOLDER
________________________________
SIGNATURE OF SHAREHOLDER
_____________________________
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED BLUE POSTAGE-PAID ENVELOPE.
