================================================================================
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Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
================================================================================
HUBCO, INC.
(Name of Registrant as Specified in its Charter
and
Name of Person Filing Proxy Statement)
================================================================================
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:
______________________________________________________
[ ] 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 with 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.
Amount Previously Paid: _____________________________________
Form, Schedule or Registration Statement No.: _________________
Filing Party: ________________________________________________
Date Filed: __________________________________________________
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<PAGE>
HUBCO, INC.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1999
TIME.............................. 11:00 a.m. E.S.T. on Wednesday,
April 21, 1999
PLACE........................... Sheraton Crossroads
Crossroads Corporate Center
Route 17 North
Mahwah, New Jersey 07495
ITEMS OF BUSINESS......... (1) The election of the five persons
named in the accompanying Proxy
Statement to serve as directors
of HUBCO for the terms specified
in the Proxy Statement.
(2) Amend the Certificate of
Incorporation to increase the
number of common and preferred
shares authorized to be issued.
(3) Amend the Certificate of
Incorporation to change the name
of the company to Hudson United
Bancorp
(4) Approval of the HUBCO, INC. 1999
Stock Option Plan, which
generally provides a Committee
comprised of three or more
non-employee directors of the
Company with authority to issue
or grant to employees of the
Company incentive stock options
and non-qualified stock options
to purchase up to a maximum of
1,000,000 shares with options to
purchase a maximum of 250,000
shares to be issued or granted
to any one employee.
(5) Such other business as may
properly come before the
meeting.
RECORD DATE................ Shareholders of record at the close of
business on February 26, 1999 are
entitled to notice of and to vote at the
meeting.
ANNUAL REPORT............ The Company's 1998 Annual Report, which
is not part of the proxy soliciting
material, is enclosed.
PROXY VOTING............... Whether or not you contemplate attending
the meeting, please execute the enclosed
proxy and return it to HUBCO. You may
revoke your proxy at any time prior to
its exercise by delivering to HUBCO a
later-dated proxy or by delivering
written notice of revocation to HUBCO.
Your Board of Directors unanimously recommends a vote FOR its
nominees for directors and for the amendments to the
Certificate of Incorporation and the approval of the Stock
Option Plan.
March __, 1999
IMPORTANT - PLEASE MAIL YOUR PROXY PROMPTLY
<PAGE>
HUBCO, INC.
1000 MacArthur Boulevard
Mahwah, New Jersey 07430
-------------------------
PROXY STATEMENT
DATED March __, 1999
GENERAL PROXY STATEMENT INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of HUBCO, Inc. (the "Corporation" or "HUBCO") of
proxies for use at the Annual Meeting of Shareholders of the Corporation (the
"Annual Meeting") to be held at the Sheraton Crossroads, Crossroads Corporate
Center, Route 17 North, Mahwah, New Jersey 07495 on April 21, 1999 at 11:00 a.m.
local time. The business expected to be voted upon at the Annual Meeting is the
election of five persons named in this proxy statement to serve as directors for
the terms specified herein, an amendment to the Certificate of Incorporation to
increase the number of common and preferred shares authorized to be issued an
amendment to the Certificate of Incorporation to change the name of the
Corporation, and the adoption of a new Stock Option Plan.. This proxy statement
is first being mailed to shareholders on approximately March __, 1999
Proxies
Your vote is important.
Because many shareholders cannot attend the Annual Meeting in person,
it is necessary that a large number be represented by proxy. Any shareholder
giving a proxy has the right to attend and to vote at the Annual Meeting in
person. A proxy may be revoked prior to the Annual Meeting by filing a
later-dated proxy or by a written revocation if it is sent to the Secretary of
the Corporation, D. Lynn Van Borkulo-Nuzzo, at 1000 MacArthur Boulevard, Mahwah,
New Jersey 07430, and is received by the Corporation in advance of the Annual
Meeting. A proxy may be revoked at the Annual Meeting by filing a later-dated
proxy or a written notice of revocation with the Secretary of the Meeting prior
to the voting of such proxy.
Shareholders Entitled to Vote
The record date for determining shareholders entitled to notice of, and
to vote at, the Annual Meeting is February 26, 1999. Only shareholders of record
as of that date will be entitled to notice of, and to vote at, the Annual
Meeting. On the record date, [40,411,521] shares of common stock, without par
value, were outstanding and eligible to be voted at the Annual Meeting. Each
share of common stock is entitled to one vote per share.
Required Vote
Directors will be elected by a plurality of the votes cast at the
Annual Meeting. The proposed amendments to the Certificate of Incorporation and
the adoption of the new Stock Option Plan requires the affirmative vote of a
majority of the votes cast on the proposal. At the Annual Meeting, inspectors of
election will tabulate both ballots cast by shareholders present and voting in
person, and votes cast by proxy. Under applicable state law and HUBCO's
Certificate of Incorporation and By-laws, abstentions and broker non-votes are
counted for purposes of establishing a quorum but otherwise do not count.
Generally, the approval of a specified percentage of shares voted at a
shareholder meeting is required to approve a proposal and thus abstentions and
broker non-votes have no effect on the outcome of a vote.
All shares represented by valid proxies received pursuant to this
solicitation will be voted in favor of the five nominees named in this Proxy
Statement and in favor of the two amendments to the Certificate of Incorporation
and the adoption of the Stock Option Plan unless the shareholder specifies a
different choice by means of his proxy or revokes the proxy prior to the time it
is exercised. Should any other matters properly come before the Annual Meeting,
the persons named as proxies will vote upon such matters in their discretion.
Solicitation of Proxies
This Proxy solicitation is being made by the Board of Directors of the
Corporation and the cost of the solicitation will be borne by the Corporation.
In addition to the use of the mails, proxies may be solicited personally or by
telephone or facsimile transmission by officers, directors and employees of the
Corporation and Hudson United Bank ("HUB"), the corporation's wholly owned
subsidiary, who will not be specially compensated for such solicitation
activities. Arrangements may be made with brokerage houses and other custodians,
nominees and fiduciaries for forwarding solicitation material to the beneficial
owners of shares held of record by such persons, and the Corporation will
reimburse such persons for their reasonable expenses incurred in forwarding the
materials.
Shareholder Proposals
New Jersey corporation law requires that the notice of shareholders'
meeting (for either a regular or special meeting) specify the purpose or
purposes of such meeting. Thus, shareholder proposals must be referred to in the
Corporation's notice of shareholders' meeting for such proposal to be properly
considered at a meeting of shareholders.
Any HUBCO shareholder that wishes to have a proposal included in
HUBCO's notice of shareholders' meeting, proxy statement and proxy card for its
2000 Annual Meeting must submit the proposal to HUBCO by the applicable
deadline. The deadline is November 3, 1999 subject to change as noted below.
If HUBCO changes its 2000 Annual Meeting date to a date more than 30
days from the date of its 1999 Annual Meeting, then the deadline referred to in
the preceding paragraph will be changed to a reasonable time before HUBCO begins
to print and mail its proxy materials. If HUBCO changes the date of its 2000
Annual Meeting in a manner which alters the deadline, HUBCO will so state under
Item 5 of the first quarterly report on Form 10-Q it files with the SEC after
the date change.
GOVERNANCE OF THE COMPANY
Pursuant to New Jersey corporation law and the Corporation's
Certificate of Incorporation and By-Laws, the business and affairs of the
Company are managed under the direction of the Board of Directors. Members of
the Board are kept informed of the Company's business through discussions with
the Chairman and officers, by reviewing materials provided to them and by
participating in meetings of the Board and its committees. Members of the Board
also served as directors of the Corporation's subsidiary banks.
During fiscal 1998, the Board held 7 meetings and the committees held a
total of 17 meetings. The average attendance in the aggregate of the total
number of Board and committee meetings was 93%. During 1998, no director
attended fewer than 78% of the total meetings of the HUBCO Board and the
committees on which the director served.
Committees of the Board of Directors
HUBCO has a standing Audit Committee of the Board of Directors. This
committee arranges for HUBCO's and its subsidiaries' directors examinations
through its independent public accountants, reviews and evaluates the
recommendations of the directors examinations, receives all reports of
examinations of HUBCO, HUB, Lafayette American Bank ("LAB") and Bank of the
Hudson ("BTH"), by bank regulatory agencies, analyzes such regulatory reports,
and reports to each board the results of its analysis of the regulatory reports.
This committee also receives reports directly from HUBCO's internal auditing
department and recommends any action to be taken in connection therewith. The
Audit Committee met 5 times during 1998. During 1998, Sr. Grace Frances Strauber
served as Chairperson of the Audit Committee. The other HUBCO members of the
Audit Committee are Donald P. Calcagnini, Noel DeCordova, Jr., Thomas R. Farley,
Bryant D. Malcolm, James E. Schierloh and John H. Tatigian.
HUBCO has a standing Nominating Committee consisting of Robert Burke,
Donald P. Calcagnini, W. Peter McBride, Charles F.X. Poggi and Kenneth T.
Neilson. The committee considers recommendations from shareholders received
sufficiently in advance of the mailing of the proxy statement for the annual
meeting. The committee reviews qualifications of and recommends to the HUBCO
Board potential candidates for election as directors. Requirements include a
certain level of stock ownership and prospects are business people from within
the communities served by HUBCO who are willing to commit time and dedicate
effort to the success of HUBCO. During 1998, the committee met 4 times.
Compensation of Directors
The HUBCO Board has established directors' retainers and fees effective July 2,
1998 as follows:
<TABLE>
<CAPTION>
<S> <C>
* Annual HUBCO Director's Retainer $12,000
* HUBCO Board Meetings $ 500
* Annual Subsidiary Director's Retainer $ 6,000
* Subsidiary Board Meetings $ 250
* Committee meetings, HUBCO or Subsidiary $ -0-
* Committee Retainers:
Chairman, Audit Committee $ 5,000
Chairman, Compensation Committee $ 5,000
Chairman, Executive Committee $ -0-
Chairman, Nominating Committee $ 5,000
Chairman, Long Range Planning Committee $ 5,000
Chairman, Policies And Procedures Committee $ 8,500
Chairman, Trust Committee $ 5,000
Member, Audit Committee $ 1,500
Member, Compensation Committee $ 1,500
Member, Executive Committee $ -0-
Member, Nominating Committee $ 1,500
Member, Long Range Planning Committee $ 1,500
Member, Policies And Procedures Committee $ 5,000
Member, Trust Committee $ 1,500
</TABLE>
Retirement. During 1996, the Board voluntarily discontinued a
retirement plan which would have provided non-employee directors having at least
36 months of service upon retirement with a retirement benefit each year for a
period up to 10 years equal to 10% of the director's retainer in effect at the
date of his or her retirement, multiplied by the number of years of service as a
director (not to exceed 10 years). Payout of vested benefits began in 1996.
Deferred Compensation. The HUBCO Board adopted a nonqualified Deferred
Compensation Plan for directors covering the retainer and committee fees
effective January 1, 1995. Participation is optional. Interest is paid on
deferred fees at the highest rate paid by HUB on passbook savings. The
provisions of the Deferred Compensation Plan are designed to comply with certain
rulings of the Internal Revenue Service under which the deferred amounts are not
taxed until received. Under the Deferred Compensation Plan, the directors who
elect to defer their fees will receive the fees over time after they retire.
Compensation Committee Interlocks and Insider Participation
As noted under the caption "Board Compensation Committee Report on
Executive Compensation," various aspects of the compensation of the HUBCO
executive officers are determined by the Compensation Committee.
The Compensation Committee members are: Charles F.X. Poggi, Chairman,
Robert J. Burke, Joan David, W. Peter McBride and John H. Tatigian, Jr.
Mr. Neilson serves on the Boards of Directors of HUBCO, HUB, LAB and
BOH and is an officer of HUBCO and HUB. Mr. Neilson absented himself from all
discussions, and abstained from all voting, on the Boards on which he served
with respect to his own compensation.
Charles F.X. Poggi, who is the Chairman of the Compensation Committee
and is involved in setting executive compensation, is President of Poggi Press,
a general printing company. During 1998, Poggi Press was paid $393,688 for
printing work for HUBCO and its subsidiaries. Management believes the terms and
conditions of this transaction to be equivalent to terms available from an
independent third party.
W. Peter McBride, who is on the Compensation Committee, and is involved
in setting executive compensation, is affiliated with various companies which
have business relationships with HUBCO or its subsidiaries. The Franklin Lakes
office of HUB is leased from Urban Farms Shopping Center, Inc., a New Jersey
corporation of which W. Peter McBride is the President and a shareholder. The
lease was originally executed in 1979 and extended to December 31, 1999.
Management believes the terms and conditions of this lease to be equivalent to
terms available from an independent third party. The annual aggregate lease
payments through December 31, 1998 were $149,048. Urban Farms, Inc., a
McBride-owned company, does landscape work for HUB. In 1998, $3,734 was paid for
such services. F. A. McBride Co. does heating and air conditioning work at
various locations. In 1998, this company was paid $48,135 for such services.
Certain Transactions with Management
HUB, LAB and BTH have made in the past and, assuming continued
satisfaction of generally applicable credit standards, expects to continue to
make, loans to directors, executive officers and their associates (i.e.,
corporations or organizations for which they serve as officers or directors or
in which they have beneficial ownership interests of 10% or more). These loans
have all been made in the ordinary course of the banking business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and do
not involve more than the normal risk of collectibility or other unfavorable
features. Directors, executive officers and their associates did not during 1998
or during 1999 through the date of this Proxy Statement borrow from HUB, LAB or
BTH an amount in excess of 10% of either bank's equity capital for any one
director or executive officer (together with their associates) or an amount in
excess of 20% of either bank's equity capital for all directors and executive
officers and their associates as a group.
Compliance With Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires HUBCO's directors, principal
officers, and persons who own more than 10% of HUBCO's equity securities to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of such securities. To HUBCO's knowledge, based
on a review of the copies of such reports furnished to it, during the fiscal
year ended December 31, 1998, Section 16(a) filing requirements with respect to
HUBCO's equity securities were complied with.
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth information concerning the beneficial
ownership of HUBCO Common Stock as of December 31, 1998, by each executive
officer of HUBCO for whom individual information is required to be set forth in
this Proxy Statement pursuant to the rules of the SEC (the "HUBCO Named
Officers"), by each director and by all directors and executive officers as a
group. HUBCO does not know of any person who beneficially owns more than 5% of
the outstanding HUBCO Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership of HUBCO Common Stock
Number of Common Shares Beneficially
Name of Beneficial Owner Owned (1) Percent of Class
- ------------------------ --------- ----------------
<S> <C> <C>
Robert J. Burke 85,840 (2) *
Donald P. Calcagnini 107,964 (3) *
Joan David 162,932 (4) *
Noel DeCordova, Jr. 24,927 (5) *
Thomas R. Farley 117,456 (6) *
Joseph F. Hurley 514 (7) *
Bryant Malcolm 21,378 (8) *
W. Peter McBride 4,267 *
Kenneth T. Neilson 318,704 (9) *
Thomas Nelson 32,202 (10) *
Charles F.X. Poggi 228,085 *
David A. Rosow 647,628 (11) 1.6%
James E. Schierloh 88,029 (12) *
Thomas J. Shara, Jr. 120,921 (13) *
Sister Grace Frances Strauber 1,174 *
John H. Tatigian, Jr. 35,054 (14) *
D. Lynn Van Borkulo-Nuzzo 100,153 (15) *
Directors and Executive Officers of
HUBCO as a group ( 21 persons) 2,165,734 (16) 5.4%
</TABLE>
NOTES:
* Less than 1.00%.
(1) Beneficially owned shares include shares over which the named person
exercises either sole or shared voting power or sole or shared
investment power. Beneficially owned shares also include shares owned
(i) by a spouse, minor children or by relatives sharing the same home,
(ii) by entities owned or controlled by the named person, and (iii) by
other persons if the named person has the right to acquire such shares
within 60 days by the exercise of any right or option. Unless otherwise
noted, all shares are owned of record and beneficially by the named
person, either directly or through the HUBCO dividend reinvestment
plan.
(2) Of this total, 13,633 shares are held by Mr. Burke's wife, and 29,439
are held by Union Dry Dock & Repair Co. Mr. Burke disclaims beneficial
ownership of the shares held by his wife.
(3) Of this total, 74 shares are held by Mr. Calcagnini as Trustee for his
aunt.
(4) Of this total, 10,615 are held in an IRA and 29,478 are held by Mrs.
David and Mr. Lawrence David as trustees for the David Foundation.
(5) Of this total, 4,429 shares are held by Mr. DeCordova's wife and 7,725
shares represent vested options. Mr. DeCordova disclaims beneficial
ownership of the shares owned by his wife.
(6) Of this total, 70,778 shares are held in a trust created under Will of
Edward Hinkley, for which Mr. Farley serves as co-trustee and 1,277
shares are held by Mr. Farley's wife. Mr. Farley disclaims beneficial
ownership of the shares owned by his wife.
(7) Of this total, 514 shares are held in HUBCO's 401(k) Plan.
(8) Of this total, 2,753 shares are held by Mr. Malcolm's wife and 2,321
are held by a corporation over which Mr. Malcolm exercises a
controlling interest. Mr. Malcolm disclaims beneficial ownership of the
shares held by his wife.
(9) Of this total, 25,220 shares are held in Mr. Neilson's account in
HUBCO's 401(k) plan, which he directs, 3,921 shares are held in an IRA,
2,785 shares are held by Mr. Neilson's wife, 32,822 shares are held for
his minor children, and 169,383 shares represent vested options. Mr.
Neilson disclaims beneficial ownership of the shares owned by his wife.
(10) Of this total, 5,474 are held in HUBCO's 401(k) plan, 7,060 shares are
held for Mr. Nelson under HUBCO's restricted stock plan, and 19,668
shares represent vested options.
(11) This total includes 10,609 shares held in the Rosow Family Foundation
Charitable Trust and 632,253 held by Mr. Rosow's wife. Mr. Rosow
disclaims beneficial ownership of the shares owned by his wife.
(12) Of this total 5,499 shares are held by Mr. Schierloh's wife. Mr.
Schierloh disclaims beneficial ownership of the shares owned by his
wife.
(13) Of this total, 16,320 shares are held in Mr. Shara's account in HUBCO's
401(k) Plan which he directs and 67,667 shares represent vested
options.
(14) Of this total, 21,901 shares are held in an IRA directed by Mr.
Tatigian.
(15) Of this total, 10,592 shares are held in Ms. Van Borkulo-Nuzzo's
account in HUBCO's 401(k) plan, which she directs, and 65,092 shares
represent vested options.
(16) Of this total, 70,044 shares are held in HUBCO's 401(k) plans for
specified individuals, 23,938 shares re held for executive officers
under HUBCO's restricted stock plan, and 341,473 shares represent
vested options. Excluded from the shares reported in the Table are
71,858 shares held by HUB's Trust Department as trustee for HUBCO's
pension plan. These additional shares held by HUB's Trust Department
are not reported as beneficially owned by HUBCO's directors or
executive officers, although by virtue of the officers' and directors'
service on HUB's Trust Committee, it may be asserted that the directors
and officers have beneficial ownership of such shares. The directors
and executive officers disclaim beneficial ownership of such shares.
PROPOSAL 1 -- ELECTION OF DIRECTORS
HUBCO's Certificate of Incorporation and By-laws authorize a minimum of
5 and a maximum of 25 directors, but leaves the exact number to be fixed by
resolution of the HUBCO Board of Directors. The HUBCO Board is presently
comprised of 13 members.
Pursuant to the HUBCO Certificate of Incorporation, the directors of
HUBCO are divided into three classes. Directors are generally elected for
three-year terms on a staggered basis, except that some directors may be
nominated for shorter terms in order to more nearly equalize the size of the
three classes.
W. Peter McBride, Bryan Malcolm, John H. Tatigian and Noel DeCordova
are each being nominated for a three-year term extending to the 2002 Annual
Meeting and James E. Schierloh is being nominated for a two-year term extending
to the 2001 Annual Meeting. If, for any reason, any of the nominees become
unavailable for election, the proxy solicited by the HUBCO Board will be voted
for a substitute nominee selected by the HUBCO Board. The HUBCO Board has no
reason to believe that any of the named nominees is not available or will not
serve if elected.
The names of the nominees for election, the directors whose terms
extend beyond the HUBCO Meeting and certain information about each of them are
set forth in the tables below. Years of service on the HUBCO Board includes
prior service on the Board of Directors of HUB prior to the formation of the
holding company.
<PAGE>
<TABLE>
<CAPTION>
Nominees for 1999 Annual Meeting
Name, Age &
Position with Principal Occupation Director Term
HUBCO During Past Five Years Since Expiring
-------------- ---------------------- --------- --------
<S> <C> <C> <C>
W. Peter McBride, * President of McBride Enterprises, Inc.; 1995 2002
53 1997;
* President of Urban Farms, Inc.
(real-estate development and investment
companies).
Bryant Malcolm, 64 * President, Malcolm-Brooker Company, 1995 2002
Inc. (a consulting firm) 1997;
* President, of B.D. Malcolm Company,
Inc. (general contractors) from 1961
to 1997.
James E. * Chairman, Emeritus; 1996 to present; 1972 2001
Schierloh, 69 Chairman of the Board of HUBCO and HUB
from 1990 to 1996;
* Formerly self-employed Certified
Public Accountant.
John H. Tatigian, * Senior Vice President of Peter 1996 2002
Jr., 62 Paul-Hershey (confection company).
Noel DeCordova, * Director of former Poughkeepsie Savings 1998 2002
Jr. 69 Bank, FSB 1970 to 1997;
* Director of Hammond Company from 1982
to 1995;
* Of Counsel to law firm of Van DeWater and
Van DeWater since 1990.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Directors Whose Terms Will Expire in 2000
Name, Age &
Position with Principal Occupation Director Term
HUBCO During Past Five Years Since Expiring
------------- ---------------------- -------- --------
<S> <C> <C> <C>
Robert J. Burke, 65 * President and Chief Operating Officer; 1979 2000
Union Dry Dock and Repair Co., Hoboken,
N.J. (ship repair facility).
Donald P. * Chairman of the Board of Directors of 1996 2000
Calcagnini, 63 Lafayette American Bank since March
1993;
* Chief Executive Officer of LAB from
March 1993 to April 1994;
* Chairman of the Board of Directors from
March 1992 to February 1994;
* Chief Executive Officer from 1986 to
February 1994 of Lafayette American
Bancorp.
Charles F.X. * President and Chief Operating Officer, 1973 2000
Poggi, 68 The Poggi Press (general printing
business)
David A. Rosow, 56 * Director of the former Westport Bancorp 1996 2000
and its subsidiary The Westport Bank and
Trust Company from 1990 to 1996 and
Chairman of the Board of both from 1991
to 1996;
* Chairman and CEO of Rosow & Company,
Inc. (a private investment company);
* Chairman of International Golf Group,
Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Directors Whose Terms Expire in 2001
<S> <C> <C> <C>
Joan David * Substitute Teacher, Board of 1994 2001
60 Cooperative Educational Services of
Rockland County.
Thomas R. Farley * Retired February 1995; 1994 2001
72 Formerly a partner in the law firm of
Farley & Isles from 1980 to 1995.
Kenneth T. Neilson * Chairman, President and CEO of HUBCO 1989 2001
50 and HUB.
Sister Grace * Chairperson, Franciscan Health System of 1979 2001
Frances Strauber, N.J. from 1991 to 1993, Member from
71 1991 to present;
* Administrative Post on the Leadership Team
for the U.S. region of the Franciscan
Sisters of the Poor from 1993 to present;
* Management Consultant, Health System,
Inc., Brooklyn, N.Y., Franciscan Sisters
of the Poor from 1986 to present;
* Member, Board of Stewards Franciscan
Partnership, Inc. from 1998 to present.
</TABLE>
No director of HUBCO is also a director of any other company registered
pursuant to Section 12 of the Exchange Act or subject to the requirements of
Section 15(d) of the Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940.
Recommendation and Vote Required on Proposal 1
THE HUBCO BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINATED SLATE
OF DIRECTORS INCLUDED IN PROPOSAL 1.
HUBCO directors will be elected by a plurality of the votes cast at the
HUBCO Meeting, whether in person or by proxy.
PROPOSAL 2 - AMEND CERTIFICATE OF INCORPORATION INCREASE THE NUMBER OF
COMMON AND PREFERRED SHARES
General
On January 27, 1999, the HUBCO Board unanimously approved an amendment
(the "Capitalization Amendment") to paragraph (A) of Article V of the HUBCO
Certificate of Incorporation to increase the authorized capital stock of HUBCO
to 125,000,000 shares from the presently authorized 65,245,350 shares, including
an increase in the authorized HUBCO Common Stock to 100,000,000 shares from the
presently authorized 54,636,350 million shares and an increase in the authorized
preferred stock of HUBCO to 25,000,000 shares from the presently authorized
10,609,000 million shares.
As of December 31, 1998, 40,411,521 shares of HUBCO Common Stock were
issued and outstanding. Of the authorized but unissued shares of HUBCO Common
Stock, approximately 555,943 shares were reserved for issuance under various
employee benefit plans and pursuant to outstanding options, warrants, and
conversion of convertible preferred stock (the "Reserved Shares") at that date.
The purpose of the Capitalization Amendment is to maximize HUBCO's
ability to expand its capital base. The full text of the proposed Capitalization
Amendment is attached to this Proxy Statement as Appendix A. The following
description of the Capitalization Amendment is qualified in its entirety by
reference to Appendix A.
Purpose of the Proposal
Except for the Reserved Shares, HUBCO has no specific agreements,
commitments or plans at this time for the sale or other use of additional shares
of common or preferred stock. The HUBCO Board believes that the proposed
authorization to issue more common or preferred stock may assist in achieving
future acquisitions and in meeting its corporate needs. If the issuance of
shares is deemed advisable in connection with raising additional capital, or
future acquisitions, the Board of Directors of HUBCO will have the authority to
issue the additional shares, which would avoid the time, delay and expense of a
special shareholders' meeting to authorize the issuance of common or preferred
stock. No further action or authorization by HUBCO's shareholders would be
necessary prior to issuance of such stock, except as may be required for a
particular transaction by applicable law or regulation, including but not
limited to, the listing regulations of the New York Stock Exchange or New Jersey
corporation law, which may require approval under certain circumstance.
One circumstance which could cause HUBCO to issue shares in the
foreseeable future is the need for additional capital in acquisitions of
financial institutions. Since 1990, HUBCO has been actively involved in
acquiring financial institutions. In the past, many of HUBCO's acquisitions
involved the issuance of shares of common or preferred stock to the shareholders
of the acquired institutions. In addition, the acquisition of a significant
amount of assets for cash could reduce the leverage ratio of HUBCO and HUB.
Thus, HUBCO may raise capital following a proposed acquisition to maintain
compliance with regulatory capital requirements and provide a cushion of
additional capital. Because the acquisition process is often fast-paced, complex
and unpredictable, HUBCO cannot predict when and if stock issuance to target
shareholders or for capital-raising purposes will be deemed appropriate by
management or will be required as a commitment in connection with a specific
acquisition. HUBCO currently believes that if securities are issued to target
shareholders, HUBCO would most likely use common stock but may also issue
preferred stock.
The additional shares of HUBCO Common Stock to be authorized by the
proposed Capitalization Amendment will be identical to the shares of HUBCO
Common Stock now authorized and outstanding, and the Capitalization Amendment
will not affect the terms and rights of the holders of those shares.
The additional shares of preferred stock will increase the number of
authorized preferred shares, all of which are "blank check" shares. "Blank
Check" preferred stock is preferred stock that may be issued with such terms and
conditions as the HUBCO Board determines at the time of issuance.
Possible Adverse Effects of the Proposal
The issuance of the additional common or preferred stock may have
certain effects upon the holders of HUBCO Common Stock. Holders of HUBCO Common
Stock will not have preemptive rights with respect to the common or preferred
stock. The issuance of further HUBCO Common Stock would increase the number of
shares of HUBCO Common Stock outstanding, thereby diluting percentage ownership
of existing shareholders. The issuance of more common or preferred stock could
possibly dilute book value per share or earnings per share for the then existing
holders of HUBCO Common Stock.
Possible Anti-Takeover Effects of the Proposal
The authorization or issuance of common stock or blank check preferred
stock may be viewed as being an "anti-takeover" device. In the event of a
proposed merger, tender offer or other attempt to gain control of HUBCO which
the HUBCO Board does not believe to be in the best interests of HUBCO or its
shareholders, the HUBCO Board could issue additional common or preferred stock
that could make any such takeover attempt more difficult to complete. Except for
the Reserved Shares, the HUBCO Board has no specific plans to issue any common
or preferred stock and does not intend to issue any common or preferred stock
except on terms that the HUBCO Board deems to be in the best interest of HUBCO
and its shareholders.
Recommendation and Vote Required for Adoption of Proposal 2
THE BOARD OF DIRECTORS OF HUBCO UNANIMOUSLY RECOMMENDS A VOTE "FOR"
PROPOSAL 2.
In accordance with the New Jersey corporation law and HUBCO's
Certificate of Incorporation, the affirmative vote of a majority of those shares
of common stock voting on this proposal is required to adopt the Amendment.
PROPOSAL 3 - AMEND CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE CORPORATION
General
HUBCO's Board of Directors on January 27, 1999 unanimously approved an
amendment (the "Name Change Amendment") to the Certificate of Incorporation to
change the name of the Corporation to Hudson United Bancorp (the "Name Change").
The amendment amends Article I in its entirety to read as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be Hudson United Bancorp (hereafter,
the "Corporation").
In the judgment of the Board, the Name Change is an appropriate tool to
focus on the identity and name of the Company and its banking subsidiary.
HUBCO's three subsidiary banks, one in each state, in early 1999 were merged
into a single interstate bank using the name Hudson United Bank. The
consolidation was accomplished to achieve better service for customers and to
realize more visible name recognition in the tri-state market. To further
enhance the name recognition, the Board has determined to use essentially the
same name for the bank's holding company and, therefore, to recommend the Name
Change to shareholders for their approval.
Recommendation and Vote Required
THE BOARD OF DIRECTORS OF HUBCO UNANIMOUSLY RECOMMENDS A VOTE "FOR"
PROPOSAL 3.
In accordance with New Jersey corporation law and HUBCO's Certificate
of Incorporation, the affirmative vote of a majority of those shares of common
stock voting on this proposal is required to adopt the Name Change Amendment. If
approved, the Company will amend its Certificate of Incorporation as provided
above, which amendment will be effective upon the filing with the New Jersey
Secretary of State.
PROPOSAL 4 -- APPROVAL OF THE HUBCO, INC. 1999 STOCK OPTION PLAN
General
The Board of Directors has approved for submission to the Corporation's
shareholders the HUBCO, Inc. 1999 Stock Option Plan (the "Stock Option Plan") as
set forth in Appendix B to this Proxy Statement. If the Shareholders approve the
Stock Option Plan, the Board expects to cease granting stock options under the
Corporation's 1995 Stock Option Plan and terminate that plan.
The purposes of the Stock Option Plan are to assist the Corporation in
attracting and retaining highly qualified executives, to align executive and
stockholder long-term interests by creating a direct link between executive
compensation and stockholder return, to enable executives of the Corporation to
develop and maintain stock ownership positions in the Corporation and to provide
such executives with incentives to contribute to the success of the Corporation.
The full text of the Stock Option Plan, as amended, is attached to this
Proxy Statement as Appendix B and the following description of the Stock Option
Plan is qualified in its entirety by reference to Appendix B.
Types of Options
All options granted under the Stock Option Plan are options for shares
of the Corporation's common stock. The options may be either "Incentive
Options," options intended to constitute "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or "Non-qualified Options," options which, when granted or due to
subsequent disqualification, do not qualify as incentive stock options within
the meaning of Section 422 of the Code.
Administration
The Stock Option Plan is administered by a committee designated by the
Board of Directors (the "Committee") from among members of the Board who are
"outside directors," within the meaning of Section 162(m) of the Code and who
also meet similar eligibility requirements under SEC Rule 16b-3. These persons
are ineligible to receive options under the Stock Option Plan within one year of
such designation. The Committee identifies each optionee (a "Participant") and
determines the number of shares subject to each option, the date of grant and
the terms and conditions governing the option. The Committee is also charged
with the responsibility of interpreting the Stock Option Plan and making all
administrative determinations thereunder.
Eligibility
All officers, group and divisional officers, and other key employees of
the Corporation and its Subsidiaries designated by the Committee are eligible to
receive options under the Stock Option Plan. No non-employee director of the
Corporation or its Subsidiaries may receive any options under the Stock Option
Plan. The Corporation is unable, at the present time, to determine the identity
or number of executive officers and other key employees who may receive options
pursuant to the increase in the number of shares authorized by the amendment to
the Stock Option Plan in the future since discretion for the grant of stock
options is vested in the Committee.
Terms and Conditions of Stock Options
Term; 10% Shareholders
All options granted under the Stock Option Plan will have terms of ten
years or less. The Stock Option Plan provides that any options which are
intended to be Incentive Options and are granted to a Participant who owns more
than 10% of the Corporation's common stock (a "10% Shareholder") must have terms
of five years or less.
Limitations on Grant and Exercise
The Stock Option Plan provides that, with respect to options granted
which are intended to be Incentive Options, the aggregate fair market value
(determined at the time the option is granted) of stock exercisable for the
first time by an employee during any calendar year may not exceed $100,000. For
example, the Committee could grant an Incentive Option covering $200,000 of
common stock to a Participant only if the Committee deferred the exercise of one
half of the options beyond the first year in which the other half of the options
first become exercisable.
Exercise Price
The Stock Option Plan provides that options are to be granted at an
exercise price equal to or greater than the fair market value (on the date of
grant) of the stock purchasable thereunder. Incentive Options granted to 10%
Shareholders must bear an exercise price of not less than 110% of the fair
market value of the stock purchasable thereunder on the date of grant. The Stock
Option Plan defines "fair market value" as the mean between the highest and
lowest sale prices reported on any exchange on which the stock is listed and
traded on the valuation date, or if there are no such sales on that date, then
on the last preceding date on which such a sale was reported. If the stock is
not listed on any exchange but is quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") on a last sale basis,
then the fair market value of the stock is defined as the mean between the high
and low price reported on the valuation date. If the stock is not quoted on the
NASDAQ on a last sale basis, fair market value is to be determined by the
Corporation's Board of Directors in good faith and in accordance with applicable
Internal Revenue Service regulations.
The Stock Option Plan provides that the purchase price for shares
acquired pursuant to the exercise of any option is payable in full at the time
of exercise. The exercise price may be paid in cash or, unless otherwise
prohibited by the terms of the agreement by which the option was granted, by one
or more of the following means: (i) in the form of unrestricted shares of the
Corporation's common stock ("Shares") already owned by the Participant based in
any such instance on the fair market value of the Shares on the date the option
is exercised; provided, however, that, in the case of an Incentive Option, the
right to make a payment in the form of already owned Shares may be authorized
only at the time the option is granted; (ii) by delivering a properly executed
exercise notice to the Corporation, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Corporation the amount of
sale or loan proceeds to pay the purchase price; (iii) by a combination thereof,
in each case in the manner provided in the option agreement; or (iv) by any
other means acceptable to the Corporation. To the extent the option exercise
price may be paid in Shares as provided above, Shares delivered by the
Participant may be (i) shares which were received by the Participant upon
exercise of one or more Incentive Options, but only if such Shares have been
held by the Participant for at least the greater of (a) two years from the date
the Incentive Options were granted or (b) one year after the transfer of Shares
to the Participant, or (ii) shares which were received by the Participant upon
exercise of one or more Non-qualified Options, but only if such Shares have been
held by the Participant for at least six months. Payment of the exercise price
with stock may result in certain tax advantages for Participants and may enable
Participants to limit or avoid out-of-pocket expenditures.
Exercise Period
The Stock Option Plan provides that if a Participant's employment
terminates by reason of death or disability, the right of the Participant, his
or her estate, beneficiary or representative to exercise any outstanding, vested
options will terminate six months later or upon the earlier expiration of the
stated term of the option. If a Participant's employment terminates by reason of
retirement, voluntary resignation or dismissal without "Cause" (as defined in
the Stock Option Plan), the right of the Participant to exercise any
outstanding, vested options will terminate 60 days later or upon the earlier
expiration of the stated term of the option. No option shall be exercisable
after the date of termination for Cause. "Cause" is defined in the Stock Option
Plan as (i) the conviction of the Participant of a felony by a court of
competent jurisdiction, (ii) the indictment of the Participant by a state or
Federal grand jury of competent jurisdiction for embezzlement or
misappropriation of funds of the Corporation or for any act of dishonesty or
lack of fidelity towards the Corporation, (iii) the written confession by the
Participant of any act of dishonesty towards the Corporation or any embezzlement
or misappropriation of the Corporation's funds, or (iv) willful or gross neglect
of the duties for which the Participant was responsible, all as the Committee,
in its sole discretion, may determine.
Change in Control Provisions
Upon a "Change in Control" (as defined in the Stock Option Plan) all
outstanding options under the Stock Option Plan become immediately and fully
exercisable.
The Stock Option Plan defines Change in Control generally to mean any
of the following events: (a) any person unaffiliated with the Corporation
becomes the beneficial owner of 10% of the Corporation's outstanding common
stock (unless such person gets the approval of two-thirds of the Corporation's
Directors then in office for acquisitions of 10% or more and acquires no more
than 25% of the Corporation's common stock); (b) the Corporation's common stock
is first purchased pursuant to a tender or exchange offer by a nonaffiliate of
the Corporation; (c) the Corporation's stockholders approval of (i) a merger or
consolidation of the Corporation with or into another Corporation (other than a
merger or consolidation in which the Corporation is the surviving corporation
and which does not result in any reclassification or reorganization of the
Corporation's then outstanding shares of common stock or a change in the
Corporation's directors, other than the addition of not more than three
directors), (ii) a sale or disposition of all or substantially all the
Corporation's assets, or (iii) a plan of liquidation or dissolution of the
Corporation; (d) during any consecutive two calendar-year period, individuals
who at the beginning of such period constitute the Board of Directors of the
Corporation ("Continuing Directors") for any reason cease to constitute
two-thirds of the Board of the Corporation or its successor (persons who are
nominated or elected to the Board by two-thirds of the Continuing Directors are
also deemed Continuing Directors); (e) a sale of (i) a controlling interest in
the Corporation to a nonaffiliate of the Corporation or (ii) all or
substantially all of the Corporation's assets (other than in the ordinary course
of business).
Shares Subject to the Stock Option Plan
In approving the Stock Option Plan, the Board of Directors provided for
the issuance under the Stock Option Plan of 1,000,000 shares of which not more
than an aggregate of 250,000 shares may be issued or transferred pursuant to
options and/or awards to any one employee.
The Stock Option Plan provides that the number and price of shares
available for stock options and the number of shares covered by outstanding
stock options shall be adjusted equitably for stock splits, stock dividends,
recapitalizations, mergers and other changes in the Corporation's capital stock.
Comparable changes will be made to the per share exercise price of each
outstanding option, but no change shall be made in the total price applicable to
the unexercised portion of an unexercised option, except for any change in the
aggregate price resulting from rounding off of share quantities or prices.
Termination and Amendment
The Stock Option Plan will terminate automatically on April 21, 2009.
However, the Board of Directors has the right to terminate the Stock Option Plan
at any time.
The Board of Directors also has the right to amend the Stock Option
Plan. However, without the approval of the Corporation's shareholders no
amendment may be made to the Stock Option Plan if the amendment would: (a)
except as provided under the Stock Option Plan for changes in capitalization,
increase the maximum number of shares available for grants under the Stock
Option Plan, either in the aggregate or for any participant, (b) expand the
class of employees eligible to receive options, (c) decrease the minimum option
exercise price as provided in the Stock Option Plan, or (d) extend the maximum
term for options granted under the Stock Option Plan.
Federal Income Tax Consequences Under the Stock Option Plan
The following is a summary of the Federal income tax consequences of
transactions under the Stock Option Plan, based on Federal income tax laws in
effect on January 1, 1999. This summary is not intended to be comprehensive and
does not describe state or local income tax consequences.
Benefits which may be granted pursuant to the Stock Option Plan include
incentive stock options and nonqualified stock options.
Incentive Stock Options. No income is realized by an optionee upon the
grant or exercise of an incentive stock option. If shares of common stock are
transferred to an optionee upon the exercise of an incentive stock option, and
if no disqualifying disposition of such shares is made by such optionee within
two years after the date of grant of the option or within one year after the
transfer of such shares to such optionee, then (1) upon the sale or exchange of
such shares, any amount realized in excess of the option exercise price will be
taxed to such optionee as a long-term capital gain and any loss sustained will
be treated as a long-term capital loss, and (2) no deduction will be allowed to
the Corporation for Federal income tax purposes. The exercise of an incentive
stock option will give rise to an item of tax preference that may result in
alternative minimum tax liability for the optionee.
If common stock acquired upon the exercise of an incentive stock option
is disposed of prior to two years after the grant date or one year after the
exercise date, generally (1) the optionee will realize compensation (i.e.,
ordinary income) in the year of disposition in an amount equal to the excess (if
any) of the fair market value of such shares at exercise (or if less, the amount
realized on the disposition of such shares, if the shares are disposed of by
sale or exchange) over the option exercise price paid for such shares, and (2)
the Corporation will be entitled to deduct the amount of compensation income,
which was taxed to the optionee for Federal income tax purposes, if it complies
with applicable reporting requirements (the "reporting requirements") and if the
amount represents an ordinary and necessary business expense of the Corporation
(the "ordinary and necessary test"). Any further gain (or loss) realized by the
optionee will be taxed as short-term or long-term capital gain (or loss), as the
case may be, and will not result in any deduction by the Corporation. Different
rules may apply if common stock is purchased by an optionee who is also an
officer, director or more than 10% shareholder. See "Special Rules Applicable to
Corporate Insiders," below.
Nonqualified Stock Options. Except as noted below, in the case of
nonqualified stock options: (1) no income is realized by the optionee at the
time the option is granted; (2) if the shares are unrestricted, the optionee
realizes ordinary income at exercise in an amount equal to the difference
between the option exercise price paid for the shares and the fair market value
of the shares on the date of exercise; (3) the Corporation is entitled to a
Federal income tax deduction equal to the amount of income taxed to the
optionee, subject to the Corporation's satisfaction of the reporting
requirements and the ordinary and necessary test; and (4) upon disposition of
the common stock acquired by exercise of the option, appreciation (or
depreciation) occurring after the date of exercise is treated as either
short-term or long-term capital gain (or loss), depending on the recipient's
holding period of the shares. Different rules may apply if common stock is
purchased by an optionee who is also an officer, director or more than 10%
shareholder. See "Special Rules Applicable to Corporate Insiders," below.
Special Rules Applicable to Corporate Insiders. Generally, individuals
subject to Section 16(b) of the Exchange Act ("Insiders") are not taxed until
six months after exercise of a nonqualified stock option, with the excess of the
fair market value of the shares of common stock received upon exercise over the
option purchase price, determined as of the end of the six-month period, being
taxed as ordinary income, and the holding period for treating any gain (or loss)
as long-term capital gain (or loss) beginning at the end of such period.
However, an Insider who elects to be taxed under Section 83(b) of the Code
should be taxed on the excess of the fair market value of the shares at the time
of exercise over the option purchase price.
Stock Swaps. The Stock Option Plan provides that, with the
Corporation's permission, an optionee may transfer previously owned shares to
the Corporation to satisfy the purchase price under an option (a "Stock Swap").
Generally, if an optionee utilizes previously owned shares to purchase shares
upon the exercise of an incentive stock option, the optionee will not realize
any gain upon the exchange of the old shares for the new shares and will carry
over into the same number of new shares the basis and holding period for the old
shares. If the optionee purchases more shares than the number of old shares
surrendered in the Stock Swap, the incremental number of shares received in the
Stock Swap will have a basis of zero and a holding period beginning on the date
of the exercise of the incentive stock option. If, however, shares acquired
through the exercise of an incentive stock option are used in a Stock Swap prior
to the end of the statutory holding period applicable to the old shares, the
Stock Swap will constitute a disqualifying disposition of the old shares,
resulting in the immediate recognition of ordinary income (see "Incentive Stock
Options," above).
If a Stock Swap is used to exercise a nonqualified stock option, the
use of old shares to pay the purchase price of an equal number of new shares
generally will be tax-free to the optionee, and he will carry over into the new
shares the basis and holding period of the old shares. However, if more shares
are acquired than surrendered, the incremental shares received in the Stock Swap
will generally be taxed as compensation income in an amount equal to their fair
market value at the time of the Stock Swap. The optionee's basis in those
additional shares will be their fair market value taken into account in
quantifying the optionee's compensation income and the holding period for such
shares will begin on the date of the Stock Swap.
Capital Gains. Under current law, a taxpayer's net capital gain (i.e.,
the amount by which the taxpayer's net long-term capital gains exceed his net
short-term capital losses) from a sale of shares is subject to a maximum federal
income tax rate of 20% if the shares have been held for more than 12 months.
Ordinary income is subject to tax at rates as high as 39.6%. Capital losses are
currently deductible against capital gains without limitation, but are currently
deductible against ordinary income in any year only to the extent of $3,000
($1,500 in the case of a married individual filing a separate return). Capital
losses which are not currently deductible by reason of the foregoing limitation
may be carried forward to future years.
Payment in Respect of a Change in Control. The Stock Option Plan
provides for the early exercisability of outstanding options in the event of a
"Change in Control," as defined in the Stock Option Plan. The acceleration of
these benefits may be deemed to constitute a "parachute payment" under the Code.
"Excess parachute payments," as defined in the Code, will subject the recipient
thereof to an additional 20% excise tax and are not deductible by the
Corporation
Recommendation and Vote Required for Adoption of Proposal 4
THE BOARD OF DIRECTORS OF HUBCO UNANIMOUSLY RECOMMENDS A VOTE "FOR" PROPOSAL 4.
In accordance with New Jersey corporate law and HUBCO's Certificate of
Incorporation, the affirmative vote of a majority of those shares of common
stock voting on this proposal in required to adopt the Stock Option Plan.
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a
hypothetical $100 investment made at the close of business on December 31, 1993
in: (a) HUBCO Common Stock; (b) the Standard & Poor's ("S&P") 500 Index; and (c)
the Keefe, Bruyette & Woods 50 ("KBW 50") Index. The graph is calculated
assuming that all dividends are reinvested during the relevant periods. The
graph shows how a $100 investment would increase or decrease in value over time,
based on dividends (stock or cash) and increases or decreases in the market
price of the stock.
The KBW 50 is an index composed of fifty money center and regional
banks. HUBCO believes the KBW 50 Index provides a consistent means for comparing
the performance of HUBCO's Common Stock against other financial institutions
generally.
[GRAPHIC OMITTED]
EXECUTIVE COMPENSATION
Board Compensation Committee Report on Executive Compensation
Salary of executive officers is determined by the Compensation
Committee of the Board. Bonuses are based upon parameters established by the
full HUBCO Board. All actions of the Compensation Committee are subject to
review and ratification by the Board of Directors of HUBCO. Thus, this report is
being issued over the names of all the directors of HUBCO and is concurred in by
all compensation committees members.
The Compensation Committee members are: Charles F.X. Poggi, Chairman,
Robert J. Burke, Joan David, W. Peter McBride, John H. Tatigian, Jr.
This report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act, or under the Exchange Act, except to the extent
that HUBCO specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
Executive Compensation Policy
HUBCO's policy is to compensate its executives fairly and adequately
for the responsibility assumed, for the success and direction of HUBCO, for the
effort expended in discharging that responsibility, and for the results achieved
directly or indirectly from each executive's performance. "Fair and adequate
compensation" is established after careful review of:
* HUBCO's earnings;
* HUBCO's performance as compared to other companies of similar size
and market area; and
* Comparison of what the market demands for compensation of similarly
situated experienced executives.
Total compensation takes into consideration a mix of base salary,
bonus, restricted stock awards and stock options. The particular mix is
established in order to competitively attract competent professionals, retain
those professionals, and reward extraordinary achievement.
The Compensation Committee also considers net income and earnings per
share of HUBCO Common Stock before finalizing officer increases for the coming
year.
Based upon its current levels of compensation, HUBCO is not affected
substantially by the provisions of 23a.
In certain instances, compensation decisions take into account
contractual commitments assumed by or agreed to by HUBCO as a result of an
acquisition.
1. Base Salary
Subject to HUBCO Board review and ratification, the responsibility for
establishing base salary for executives is delegated to the Compensation
Committee.
Salary is minimum compensation for any particular position and is not
tied to any performance formula or standard. However, that is not to say that
poor performance will not result in termination. Superior performance is
expected of all executive officers.
To establish salary, the following criteria are used:
* Position description.
* Direct responsibility assumed.
* Comparative studies of peer group compensation. Special weight is
given to local factors.
* Earnings performance of HUBCO.
* Competitive level of salary to attract and retain qualified and
experienced executives.
2. Annual Bonuses
Each year the HUBCO Board establishes the parameters for the award of
bonuses. For 1998, the parameters involved HUBCO's performance specifically
related to return on equity and minimum loan loss reserve levels.
Under the bonus program the bonus pool may not exceed 10% of after tax
profits of HUBCO and the creation of the bonus pool may not cause the year-end
results to fall below the targeted return on equity or the loan loss reserve to
fall below the targeted loan loss reserve percentage. If the targeted results
are not achieved, no bonuses will be paid under the program. Even if the
targeted level is achieved, each department must meet its budget in order to be
eligible for a bonus and employees must achieve key established goals in order
to be personally eligible.
3. Restricted Stock
The responsibility for establishing restricted stock awards is
delegated to the Compensation Committee.
The Compensation Committee meets two times each year to evaluate
management's recommendations concerning meritorious performance of officers and
employees for consideration to receive restricted stock awards.
The Compensation Committee makes awards based upon the following
criteria:
* Performance of the officer or employee in HUBCO and HUB
* The benefit which HUBCO or HUB has derived as a result of the
efforts of the award candidate under consideration.
* HUBCO's desire to encourage long-term employment of the award
candidate.
4. Stock Options
The 1995 Stock Option Plan was approved by HUBCO's shareholders at the
1995 Annual Meeting, the 1999 Stock Option Plan has been submitted to a vote of
shareholders at this meeting.
The responsibility for awards of stock options rests with the
Compensation Committee.
The Compensation Committee makes recommendations for awards based upon
the following criteria:
* Performance of the officer or employee in HUBCO or HUB
* The benefit which HUBCO or HUB receive from the services of the
officer or employee.
* HUBCO's desire to encourage long-term employment of the officer or
employee.
5. Perquisites
Perks, such as company automobiles and their related expenses, country
club memberships, auxiliary insurance benefits and other perks which the HUBCO
Board may approve from time to time are determined and awarded pursuant to
evaluation under the same criteria used to establish the base salary or, in
certain circumstances, pursuant to contractual commitments assumed by or agreed
to by HUBCO as a result of an acquisition.
* * * * *
HUBCO has long believed that a strong, explicit link should exist
between executive compensation and the value delivered to shareholders. The
bonus program, restricted stock awards and stock option awards all provide
competitive compensation which can increase based on HUBCO's performance. Since
each bonus is based on a direct, explicit link to HUBCO's performance, it is
directly and explicitly linked to the value received by shareholders. HUBCO's
profitability inures to the benefit of shareholders, and is a direct result of
the direction established by management. The general compensation philosophy is
that senior executives should be superior performers whose total compensation
(including base salary, bonus, restricted stock and options) should place
compensation above the seventy-fifth percentile in line with HUBCO's
performance.
In 1998, the Compensation Committee utilized two salary surveys to
establish executive compensation. The first survey, conducted by Pete Marwick,
entitled "NE Banking Industry Comp. Survey", was prepared for the Northeastern
United States financial industry. The second report, "Financial Institutions
Comp. Survey", prepared by Watson Wyatt, identified compensation in institutions
in the $1 to $7.9 billion category in the New York, New Jersey, Pennsylvania
tri-state area.
Mr. Neilson, the Chairman, President and CEO of HUBCO, received an
increase of $60,000 effective for 1999. He is eligible for bonuses equal to 100%
of his base salary. Mr. Neilson's base salary is presently $450,000. The HUBCO
Board believes that this package represents fair compensation in view of HUBCO's
1998 performance and peer group comparisons.
THE BOARD OF DIRECTORS OF HUBCO
Robert J. Burke
Donald P. Calcagnini
Joan David
Noel DeCordova, Jr.
Thomas R. Farley
Bryant Malcolm
W. Peter McBride
Kenneth T. Neilson
Charles F.X. Poggi
David A Rosow
James E. Schierloh
Sister Grace Francis Strauber
John H. Tatigian, Jr.
Executive compensation is described below in the tabular format
mandated by the Securities and Exchange SEC. The letters in parentheses above
each column heading are the letters designated by the SEC for such columns, and
are provided to make inter-company comparisons easier.
Summary Compensation Table
The following table summarizes all compensation earned in the past
three years for services performed in all capacities for HUBCO and its
subsidiaries with respect to the HUBCO Named Officers.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
----------------------------------
Awards
----------------------------------
Annual Compensation
---------------------------
(g)
Securities (i)
(a) (f) Underlying All Other
Name and (b) (c) (d) Restricted Options/ Compensation
Principal Position Year Salary ($) Bonus ($) Stock SARs(#) (2) ($)
Award (s)(1) $
- ------------------------- ---------- ----------- ------------ --------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth T. Neilson, 1998 390,000 390,000 537,500 -0- 10,171
Chairman, President & 1997 365,000 365,000 236,688 46,000 19,643
CEO, HUBCO & HUB 1996 325,000 325,000 -0- -0- 29,384
D. Lynn Van 1998 200,000 100,000 268,750 -0- 13,578
Borkulo-Nuzzo, EVP & 1997 185,000 92,500 67,625 12,500 15,237
Corporate Secretary, 1996 160,000 80,000 -0- -0- 10,942
HUBCO & HUB
Thomas J. Shara, Jr. 1998 190,000 95,000 268,750 -0- 8,371
EVP & Senior Loan 1997 170,000 32,500 -0- 10,000 12,678
Officer of HUBCO 1996 160,000 62,000 -0- -0- 10,206
Joseph F. Hurley, EVP, 1998 177,885 84,000 -0- -0- 9,513
(3) 1997 114,423 -0- -0- 10,000 2,072
Treasurer & Chief 1996 N/A N/A N/A N/A N/A
Financial Officer,
HUBCO & HUB
Thomas Nelson, 1998 173,269 87,500 134,375 -0- 9,802
EVP, HUBCO and 1997 160,000 32,000 67,625 12,500 9,545
President Shoppers' 1996 160,000 20,000 -0- 3,183 4,752
Charge Division of HUB
</TABLE>
- -----------------------
NOTES:
(1) The dollar amounts listed represent the number of shares of restricted
stock granted, multiplied by the fair market value of each share of
stock on the date of the grant. With respect to dividends paid on all
shares of restricted stock, cash dividends are paid directly to the
officer holding the restricted stock but stock dividends are added to
the restricted stock and are subject to the same restrictions. The
number of shares reflected have been adjusted for the 3% stock dividend
effected October, 1996, the 3% stock dividend effected December 1, 1997
and the 3% stock dividend effected September 1, 1998. As of December
31, 1998, Mr. Neilson, Ms. Van Borkulo-Nuzzo, Mr. Shara, Mr. Hurley,
and Mr. Nelson held 0, 0, 0, 0 and 7,060 shares of restricted stock,
respectively, with aggregate values of $0, $0, $0, $0, and $212,682,
respectively.
(2) All amounts in this column represent employer contributions to 401(k)
plans on behalf of the HUBCO Named Officers, premiums for life
insurance in excess of $50,000 and income attributable to use of a
company provided vehicle.
(3) Mr. Hurley was hired by HUBCO on May 5, 1997 and therefore, information
with respect to Mr. Hurley's compensation during 1996 is not included
in this table.
Option Grants in 1998
No stock options were granted to the Named Officers in 1998.
Option Exercises
The following table is intended to show options exercised during the
last fiscal year and the value of unexercised options held at year-end 1998 by
the HUBCO Named Officers. HUBCO does not utilize stock appreciation rights
("SARs") in its compensation package, although the SEC rules require that SARs
be reflected in Table headings.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal and FY-End Option/SAR Values
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)(1)
Shares ------------- ----------------
Name Acquired on Exercise (#) Value Exercisable/ Exercisable/
Realized ($) Unexercisable Unexercisable
- -------------------------- ------------------------- -------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Kenneth T. Neilson -0- -0- 169,383/0 $2,174,337/0
D. Lynn Van Borkulo-Nuzzo 5,000- $120,470 65,092/0 930,507/0
Thomas J. Shara -0- -0- 67,667/0 1,022,280/0
Joseph F. Hurley -0- -0- 0/10,299 0/0
Thomas Nelson -0- -0- 19,668/21,070 350,484/118,113
</TABLE>
- -----------------------
NOTES:
(1) Options are "in the money" if the fair market value of the underlying
security exceeds the exercise price of the option at year-end.
Employment Contracts, Termination of Employment and Change in Control
Arrangements
Under HUBCO's restricted stock plan, each share of stock awarded is
subject to a "Restricted Period" of from two to ten years, as determined by the
committee administering the plan when it awards the shares. Effective upon the
date of grant, the officer or employee is entitled to all the rights of a
shareholder with respect to the shares, including dividend and voting rights.
However, if a share recipient leaves the employment of HUBCO or its subsidiaries
during the Restricted Period for any reason, his or her shares may be forfeited
to HUBCO. Upon the occurrence of a change in control of HUBCO, every Restricted
Period then in existence with a remaining term of five years or less will
automatically expire.
Under the HUBCO, Inc. 1995 Stock Option Plan, options are granted with
a term not to exceed ten years from the grant date. Each option is granted with
a vesting schedule as determined by the Stock Committee. In the event of a
change in control, as defined in the Plan, any option which has not vested, as
of the date of the change in control, becomes fully vested.
As of January 1, 1998, the Corporation and HUB entered into change in
control agreements with Messrs. Hurley and Nelson, respectively. In the event of
a Change in Control, Mr. Hurley would be entitled to be employed for a period of
one year and Mr. Nelson two years and each would be entitled to substantially
the same title, same salary and same benefits as existed prior to the change in
control or the Executive would be entitled to certain severance payments and
benefits. These agreements do not become effective unless there is a change in
control and then remain in effect for one year in the case of Mr. Hurley and two
years in the case of Mr. Nelson. Prior to a change in control, unless HUBCO
stops their automatic renewal, the agreements are for two year "evergreen"
terms. The Corporation entered into change in control agreements having
substantially the same terms and conditions, with two other officers; one
contract provides one year's protection and the other provides for three years'
protection.
Each agreement defines "change in control" to mean any of the
following: (i) the acquisition of beneficial ownership by any person or group of
25% or more of HUBCO's voting securities or all or substantially all of its
assets; (ii) the merger consolidation or combination (a "merger") with an
unaffiliated entity unless following the merger HUBCO's directors constitute 50%
or more of the directors of the combined entity and HUBCO's CEO is the CEO of
the surviving entity; or (iii) during any two consecutive calendar years
individuals who were directors of HUBCO at the start of the period cease to
constitute two-thirds of the directors unless the election of the directors was
approved by the vote of two-thirds of the directors then in office; or (iv) the
transfer of all or substantially all of HUBCO's assets.
With respect to Mr. Neilson's contract, if he is terminated without
cause, resigns for good reason (as defined in the contract) within the first 90
days following a change in control, resigns for any reason after that 90 day
period following a change in control, dies, or is disabled, he (or his estate)
is entitled to a lump sum payment equal to three times the sum of his annual
salary and his highest bonus in the last three years, as well as a continuation
of his family's health coverage for a period of three years. In the event that
the severance payments and benefits under the agreement, together with any other
parachute payments, would constitute an excess parachute payment under Section
280G of the Internal Revenue Code of 1986 (the "Code"), the payments to Mr.
Neilson would be increased in an amount sufficient to pay the excise taxes and
other income and payroll taxes necessary to allow Mr. Neilson to retain the same
net amount, after such taxes as he was otherwise entitled to receive (a "Make
Whole Tax Provision").
With respect to Ms. Van Borkulo-Nuzzo's contract and Mr. Shara's
contract, if either officer is terminated without cause, resigns for good reason
following a change in control, dies or is disabled, the officer (or the
officer's estate) is entitled to a lump sum payment equal to three times the sum
of their annual salary and highest annual bonus in the last three years, as well
as a continuation of family health coverage for a period of three years. The
contracts for Ms. Van Borkulo-Nuzzo and Mr. Shara contain Make Whole Tax
Provisions.
With respect to the contracts for Mr. Hurley, Mr. Nelson and the two
other officers, if they are terminated without cause, resign for good reason
following a change in control, die or are disabled, they (or their estates) are
entitled to a lump sum payment equal to a multiple (two times for Mr. Nelson,
one time for Mr. Hurley and one other officer, and three times for one other
officer) of the sum of their annual salary and the highest bonus paid or to be
paid to the officer, as well as a continuation of their family's health coverage
for the same number of years as the salary entitlement. However, under these
contracts, in the event that the severance payments and benefits under the
agreements, together with any other parachute payments, would constitute excess
parachute payments under Section 280G of the Code, the payments and benefits
under the agreements will be reduced (but not below zero) to the extent
necessary to avoid excess parachute payments.
Pension Plans
Pension Plans. In 1996 HUBCO consolidated its two non-contributory,
defined benefit pension plans which were previously known as the Employees'
Retirement Plan of HUBCO, Inc. (the "Base Plan") and the Retirement Plan for
Non-Bargaining Employees of HUBCO, Inc. (the "Non-Bargaining Retirement Plan").
The consolidated plan is now known as the Employees Retirement Plan of HUBCO,
Inc. (the "Plan").
The Plan. The Plan covers any employee of HUBCO or its subsidiaries who
works over 1,000 hours per year, is over age 20 1/2 and has completed 6 months
of service. The annual retirement benefit for the HUBCO Named Officers is the
sum of (i) 1.25% of the employee's base year-end compensation during the year he
or she joins the Plan multiplied by the number of years of service with HUBCO or
HUB prior to joining the Plan; plus (ii) 1.25% of the employee's base year-end
compensation during each year of a participant's service after joining the Plan.
Retirement benefits normally commence when an employee reaches age 65 but
provides for early retirement when an employee's age plus years of service
equals 85.
Additional retirement benefits are provided to non-bargaining employees
of HUBCO and its subsidiaries. The annual retirement benefit for covered
employees is calculated by taking 1% of an employee's base average annual
earnings (determined by averaging the highest five continuous years of credited
service, excluding the last year of service) multiplied by the years of credited
service, adding 1/2% of an employee's base average annual earnings in excess of
the average Social Security Wage Base (calculated based upon the year of birth)
multiplied by the years of credited service, and subtracting the pension benefit
the employee will receive under the basis calculation. The Plan also provides
for disability pension benefits.
In the Plan, compensation in the form of a bonus is excluded from
benefit calculations. Thus, for each Named Officer, only the amounts which are
shown each year under the heading "Salary" in the Summary Compensation Table in
this Proxy Statement are covered.
As of January 1, 1996, HUBCO adopted a Supplemental Employee Retirement
Plan ("SERP"). The SERP provides a pension benefit which, in large part, makes
up the amount of the benefits which cannot be provided under the Plan as a
result of the limit on the amount of compensation which can be taken into
account under Section 401(a)(17) of the Code ($160,000 in 1998 and indexed for
inflation in subsequent years) and the amount of benefits payable under Section
415 of the Code. Unlike the Plan, the SERP covers salary and one-third of
incentive compensation. The benefit is payable as a single life annuity and 100%
survivor benefits are paid for the life of the designated beneficiary. Kenneth
Neilson is the only person who has been designated as a participant under the
SERP. HUBCO has purchased life insurance to fund the benefit.
The following table shows an employee's estimated annual retirement
benefit from the Plan and the SERP combined, assuming retirement at age 65 for
an individual reaching such age before January 1, 1999 and assuming a straight
life annuity benefit, for the specified compensation levels and years of
service. Except for Mr. Neilson, the amounts in the table below are limited
under Section 401(a)(17) of the Code, as described in the preceding paragraph.
The benefits listed in the table are not subject to any deduction for social
security or other offset amounts. Mr. Neilson has approximately 15 years of
credited service under the pension plan as of January 1, 1999 and, at age 65,
would have 31 years of credited service. Ms. Van Borkulo-Nuzzo has approximately
32 years of credited service under the pension plan as of January 1, 1999, and,
at age 65, would have approximately 49 years of credited service. Mr. Shara has
approximately 18 years of credited service as of January 1, 1999 and, at age 65,
would have 42 years of credited service. Mr. Hurley has 1 year of credited
service as of January 1, 1999 and, at age 65, would have approximately 18 years
of credited service. Mr. Nelson has approximately 7 years of credited service as
of January 1, 1999 and at age 65, would have approximately 19 years of credited
service.
<TABLE>
<CAPTION>
Pension Plan Table
Salary Years of Service
15 20 25 30 35
-- -- -- -- --
<S> <C> <C> <C> <C> <C>
$125,000 $25,790 $34,387 $42,984 $51,581 $60,177
$150,000 $31,415 $41,887 $52,359 $62,831 $73,302
$200,000 $42,665 $86,887 $71,109 $85,331 $99,552
$250,000 $53,915 $71,887 $89,859 $107,831 $125,802
$300,000 $65,165 $86,887 $108,609 $130,331 $152,052
$350,000 $76,415 $101,887 $127,359 $152,831 $178,302
$400,000 $87,665 $116,887 $146,109 $175,331 $204,552
$450,000 $98,915 $131,887 $164,859 $197,831 $230,802
$500,000 $110,165 $146,887 $183,609 $220,331 $257,052
$550,000 $121,415 $161,887 $202,359 $242,831 $283,302
$600,000 $132,665 $176,887 $221,109 $265,331 $309,552
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Anderson LLP, independent public accountants, have audited the
books and records of HUBCO since 1991. Selection of HUBCO's independent public
accountants for the 1999 fiscal year will be made by the Board of Directors
subsequent to the Annual Meeting.
Arthur Anderson LLP has advised HUBCO that one or more of its
representatives will be present at the Annual Meeting of shareholders to make a
statement if they so desire and to respond to appropriate questions.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may come
before the Annual Meeting. However, in the event such other matters come before
that meeting, it is the intention of the persons named in the proxy to vote on
any such matters in accordance with the recommendation of the Board of
Directors.
Shareholders are urged to sign the enclosed proxy, which is solicited
on behalf of the Board of Directors, and return it to the Corporation in the
enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
-----------------------------
Kenneth T. Neilson
Chairman, President and
Chief Executive Officer
Mahwah, New Jersey
March ___, 1999
<PAGE>
APPENDIX A
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
OF HUBCO, INC. TO INCREASE ITS
AUTHORIZED COMMON AND PREFERRED STOCK
The following is proposed to become Paragraph (A) of Article V of
HUBCO's Certificate of Incorporation. The language to be deleted is shown [in
brackets] and the new language is underlined.
"(A) The total authorized stock of the Corporation shall be 125,000,000
[65,245,350] shares, consisting of 100,000,000 [54,636,350] shares of
common stock and 25,000,000 [10,609,000] shares of preferred stock,
which may be issued in one or more classes or series. The shares of
common stock shall constitute a single class and shall be without
nominal or par value. The shares of Preferred Stock of each class or
series shall be without nominal or par value, except that the amendment
authorizing the initial issuance of any class or series adopted by the
Board of Directors, as provided herein, may provide that shares of any
class or series shall have a specific par value per share, in which
event all of the shares of such class or series shall have the par
value so specified."
<PAGE>
Appendix B
HUBCO, INC. 1999 STOCK OPTION PLAN
ARTICLE I. PURPOSE
The purposes of the 1999 Stock Option Plan are (i) to attract
and retain highly-qualified executives, (ii) to align executive and stockholder
long-term interests by creating a direct link between executive compensation and
stockholder return, (iii) to enable executives of HUBCO, Inc. (the
"Corporation") to develop and maintain stock ownership positions in the
Corporation, and (iv) to provide incentives to such executives to contribute to
the success of the Corporation. To achieve these objectives, the Plan provides
for the granting of "incentive stock options" within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended, and nonqualified stock
options.
ARTICLE II. DEFINITIONS
Whenever the following terms are used in this Plan, they shall
have the meaning specified below:
"Affiliate" shall mean the Corporation, a Subsidiary, or any
employee benefit plan established or maintained by the Corporation or a
Subsidiary.
"Board" shall mean the Board of Directors of the Corporation.
"Cause" shall mean (i) the conviction of the Participant of a
felony by a court of competent jurisdiction, (ii) the indictment of the
Participant by a state or Federal grand jury of competent jurisdiction for
embezzlement or misappropriation of funds of the Corporation or for any act of
dishonesty or lack of fidelity towards the Corporation, (iii) the written
confession by the Participant of any act of dishonesty towards the Corporation
or any embezzlement or misappropriation of the Corporation's funds, or (iv) the
willful or gross neglect of the duties for which the Participant was
responsible; all as the Committee, in its sole discretion, may determine.
"Change in Control" shall mean the occurrence of one or more
of the following events: (i) the Corporation acquires actual knowledge that any
person (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Exchange
Act) other than an Affiliate is or becomes the beneficial owner (as defined in
Rule 13d-3 of the Exchange Act) directly or indirectly, of securities of the
Corporation representing 10% or more of the combined voting power of the
Corporation's then outstanding securities, (ii) the first purchase of Common
Stock pursuant to a tender or exchange offer (other than a tender or exchange
offer made by an Affiliate), (iii) the approval by the Corporation's
stockholders of (a) a merger or consolidation of the Corporation with or into
another corporation (other than a merger or consolidation in which the
Corporation is the surviving corporation and which does not result in any
reclassification or reorganization of the Corporation's then outstanding shares
of Common Stock or a change in the Corporation's directors, other than the
addition of not more than three directors), (b) a sale or disposition of all or
substantially all of the Corporation's assets, or (c) a plan of liquidation or
dissolution of the Corporation, (iv) during any period of two consecutive
calendar years, individuals who at the beginning of such period constitute the
Board of Directors of the Corporation cease for any reason to constitute at
least two-thirds thereof, unless the election or nomination for the election by
the Corporation's stockholders of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of the period, or (v) a sale of (a) Common Stock of the Corporation if
after such sale any person (as defined above) other than an Affiliate owns a
majority of the Corporation's Common Stock or (b) all or substantially all of
the Corporation's assets (other than in the ordinary course of business).
Notwithstanding the foregoing, no Change in Control shall be deemed to have
occurred for purposes of clause (i) above if a person is or becomes the
beneficial owner, directly or indirectly, of more than 10% but less than 25% of
the combined voting power of the Corporation's then outstanding securities if
the acquisition of all voting securities in excess of 10% was approved in
advance by two-thirds of the directors then in office.
"Code" shall mean the Internal Revenue Code of 1986, as now in
effect or as hereafter amended. (All citations to sections of the Code are to
such sections as they may from time to time be amended or renumbered.).
"Committee" shall mean the committee consisting of at least
three (3) directors of the Corporation appointed by the Board to administer the
Plan pursuant to the provisions of Article III of the Plan.
"Common Stock" or "Stock" shall mean the common stock of the
Corporation, no par value.
"Disability" shall mean permanent and total disability within
the meaning of Section 105(d)(4) of the Code.
"Employee" shall mean a common law employee (as defined in
accordance with the regulations and Revenue Rulings then applicable under
Section 3401(c) of the Code) of an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Incentive Option" shall mean an Option whose terms satisfy
the requirements imposed by Section 422 of the Code and which is intended by the
Committee to be treated as an Incentive Option.
"Nonqualified Option" shall mean either (i) any Option which,
when granted, is not an Incentive Option, and (ii) an Incentive Option which,
subsequent to its grant, ceases to qualify as an Incentive Option because of a
failure to satisfy the requirements of Section 422(b) of the Code.
"Option" shall mean a right to purchase Common Stock which is
awarded in accordance with the terms of this Plan.
"Participant" shall mean an Employee who has been granted an
Option under the Plan.
"Plan" shall mean the HUBCO, Inc. 1999 Stock Option Plan, as
such plan may be amended from time to time.
"Retirement" shall mean any normal or early retirement by a
Participant pursuant to the terms of any pension plan or policy of the
Corporation or any Subsidiary which is applicable to such Participant at the
time of his or her Termination of Service.
"Secretary" shall mean the corporate secretary of the
Corporation.
"Securities Act" shall mean the Securities Act of 1933.
"Shares" shall mean shares of Common Stock.
"Subsidiary(ies)" shall mean any corporation or other legal
entity, domestic or foreign, more than 50% of the voting power of which is owned
or controlled, directly or indirectly by the Corporation.
"Terminate (Termination of) Service (or Termination)" shall
mean the time at which the Participant ceases to provide services to the
Corporation as an employee, but shall not include a lapse in providing services
which the Committee determines to be a temporary leave of absence.
ARTICLE III. ADMINISTRATION
The Plan shall be administered by a committee (the
"Committee") selected by the Board from among its members, which shall consist
of not less than three members, each of whom must be both (i) a "disinterested
person" within the meaning of the rules promulgated under Section 16(b) of the
Exchange Act, and (ii) an "outside director" within the meaning of Section
162(m) of the Code. The Committee shall hold meetings at such times as may be
necessary for the proper administration of the Plan and shall keep minutes of
its meetings. A majority of the Committee shall constitute a quorum and a
majority of the quorum may authorize any action.
Subject to the provisions of the Plan, the Committee shall
have sole authority, in its absolute discretion: (i) to determine which of the
eligible Employees of the Corporation shall be granted Options; (ii) to grant
Options; (iii) to determine the times when Options may be granted and the number
of Shares that may be purchased pursuant to such Options; (iv) to determine the
exercise price of the Shares subject to each Option, which price shall be not
less than the minimum specified in Section 6.1; (v) to determine the time or
times when each Option becomes exercisable, the duration of the exercise period,
and any other restrictions on the exercise of Options issued hereunder; (vi) to
prescribe the form or forms of the Option agreements under the Plan; (vii) to
determine the circumstances under which the time for exercising Options should
be accelerated and to accelerate the time for exercising outstanding Options;
(viii) to determine the duration and purposes for leaves of absence which may be
granted to a Participant without constituting a Termination of Service for
purposes of the Plan; (ix) to adopt, amend and rescind such rules and
regulations as, in its opinion, may be advisable in the administration of the
Plan; and (x) to construe and interpret the Plan, the rules and regulations and
the Option agreements under the Plan, and to make all other determinations
deemed necessary or advisable for the administration of the Plan; provided,
however, that with respect to those eligible Employees who are not "officers" of
the Corporation, within the meaning of Section 16(b) of the Exchange Act, the
Committee may delegate to any person or persons ("Subcommittee") all or any part
of its authority as set forth in (i) through (x) above. All references in the
Plan to the powers of a Subcommittee to act for the Committee shall be
applicable only to the extent consistent with the forgoing provision and only to
the extend consistent with the powers which have actually been delegated to it.
All decisions, determinations and interpretations of the Committee, or
Subcommittee, to the extent consistent with such delegation, shall be final and
binding.
ARTICLE IV. SHARES SUBJECT TO PLAN
The maximum number of Shares that may be made subject to
Options granted pursuant to the Plan is 1,000,000 (or the number and kind of
Shares or other securities which are substituted for those Shares or to which
those Shares are adjusted pursuant to the provisions of Article VIII of the
Plan). The maximum number of Shares with respect to which Options may be granted
to any one person during the term of the plan shall not exceed 250,000 (or the
number and kind of Shares or other securities which are substituted for those
Shares or to which those Shares are adjusted pursuant to the provisions of
Article VIII of the Plan). The Corporation shall reserve such number of Shares
for the purposes of the Plan out of its authorized but unissued shares, or out
of Shares held in the Corporation's treasury, or partly out of each, as shall be
determined by the Board. No fractional Shares shall be issued with respect to
Options granted under the Plan.
In the event that any outstanding Option under the Plan for
any reason expires, is terminated, forfeited or is cancelled prior to the
expiration date of the Plan, the Shares called for by the unexercised portion of
such Option may, to the extent permitted by Rule 16b-3 under the Exchange Act,
again be subject to an Option under the Plan.
ARTICLE V. ELIGIBILITY FOR AWARD OF OPTIONS
The Committee may designate any officer of the Corporation,
any group or divisional officer, and any other key Employee of the Corporation
as eligible to receive Options under the Plan. Non-employee directors shall not
be eligible to participate in the Plan.
ARTICLE VI. GRANT OF OPTIONS
The Committee (or Subcommittee) may, in its sole discretion,
grant Options to such officers and key Employees of the Corporation as it
determines appropriate consistent with Article V. Options shall be evidenced by
Option agreements (which need not be identical) in such forms as the Committee
may from time to time approve.
Option agreements shall conform to the terms and conditions of
the Plan. Such agreements may provide that the grant of any Option under the
Plan, or that Stock acquired pursuant to the exercise of any Option, shall be
subject to such other conditions (whether or not applicable to the Option or
Stock received by any other optionee) as the Committee determines appropriate,
including, without limitation, provisions conditioning exercise upon the
occurrence of certain events or performance or the passage of time, provisions
to assist the optionee in financing the purchase of Stock through the exercise
of Options, provisions for forfeiture, or restrictions on resale or other
disposition, of shares acquired under the Plan, provisions giving the
Corporation the right to repurchase shares acquired under the Plan in the event
the Participant elects to dispose of such shares, and provisions to comply with
federal and state securities laws and federal and state income tax and other
payroll tax withholding requirements. Options granted under this Plan which are
intended to qualify as Incentive Options shall be specifically designated as
such in the Option agreement.
6.1 OPTION PRICE. The exercise price for each Option granted
under the Plan shall be determined by the Committee or Subcommittee; provided,
however, that it shall not be less than the fair market value of the Stock on
the date of grant. The fair market value shall be deemed for all purposes of the
Plan to be the mean between the highest and lowest sale prices reported as
having occurred on any national stock exchange with which the Stock may be
listed and traded on the date chosen to determine such fair market value, or, if
there are no such sales on that date, then on the last preceding date on which
such a sale was reported. If the Stock is not listed on any exchange but the
Stock is quoted on the National Market System of the National Association of
Securities Dealers Automated Quotation (NASDAQ) System on a last sale basis,
then the fair market value of the Stock shall be deemed to be the mean between
the high and low price reported on the date of grant. If the Stock is not quoted
on the NASDAQ on a last sale basis, then the fair market value of the Stock
shall mean the amount determined by the Board to be the fair market value based
upon a good faith attempt to value the Stock accurately and computed in
accordance with applicable regulations of the Internal Revenue Service.
6.2 EXERCISABILITY AND TERMS OF OPTIONS. The Committee or
Subcommittee shall determine the dates after which Options may be exercised, in
whole or in part, and may establish a vesting schedule that must be satisfied
before Options may be exercised; provided, however, that no Option may be
exercisable within six months of the date it is granted. If an Option is
exercisable in installments, installments which are exercisable and not
exercised shall remain exercisable.
Subject to Section 6.7 in the case of Incentive Options, all
Options shall have a term of no more than ten years from the date of grant;
provided, however, that upon the Termination of Service of a Participant,
Options that have not become exercisable before the date the Participant
Terminates Service shall be forfeited and terminated immediately. Without
limiting the foregoing, no Option shall be exercisable after the date of
termination, if the Termination of Service is by the Corporation or any
Subsidiary for Cause.
If a Participant shall Terminate Service by reason of his
death or Disability, all vested Options held by such Participant may be
exercised by the Participant, his estate or beneficiary, or his representative,
as the case may be, for a period of six months from the date of such
Termination, or until the expiration of the stated term of such Option,
whichever period is shorter. If a Participant shall Terminate Service by reason
of Retirement, voluntary resignation or dismissal without Cause, all vested
Options held by such Participant may be exercised for a period of sixty (60)
days from the date of Termination or until the expiration of the stated term of
such Option, whichever period is shorter.
In the event of a Change In Control, any Option granted under
the Plan to a Participant which has not, as of the date of the Change In
Control, become exercisable, shall become fully exercisable.
6.3 NON-TRANSFERABILITY OF OPTION RIGHTS. No Option shall be
transferable except by will or the laws of descent and distribution, and then
shall be limited by Section 6.2. During the lifetime of the Participant, the
Option shall be exercisable only by him. The Committee may, however, in its sole
discretion, allow for transfers of Nonqualified Options to family members,
subject to such conditions or limitations as it may establish to ensure
compliance with Rule 16b-3 promulgated pursuant to the Exchange Act, or for
other purposes.
6.4 NO OBLIGATION TO EXERCISE OPTION. The grant of an Option
shall impose no obligation on the Participant to exercise such Option.
6.5 CANCELLATION OF OPTIONS. The Committee (or Subcommittee),
in its discretion, may, with the consent of any Participant, cancel any
outstanding Option.
6.6. NO RIGHTS AS A STOCKHOLDER. A Participant or a transferee
of an Option shall have no rights as a stockholder with respect to any Share
covered by his Option until he shall have become the holder of record of such
Share, and he shall not be entitled to any dividends or distributions or other
rights in respect of such Share for which the record date is prior to the date
on which be shall have become the holder of record thereof.
6.7 SPECIAL PROVISIONS APPLICABLE TO INCENTIVE OPTIONS. To the
extent the aggregate fair market value (determined as of the time the Option is
granted) of the Stock with respect to which any Options granted hereunder which
are intended to be Incentive Options may be exercisable for the first time by
the Participant in any calendar year (under this Plan or any other stock option
plan of the Corporation or any parent or Subsidiary thereof) exceeds $100,000,
such Options shall not be considered Incentive Options.
No Incentive Option may be granted to an individual who, at
the time the Option is granted, owns directly, or indirectly within the meaning
of Section 424(d) of the Code, stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Corporation or of any
parent or Subsidiary thereof, unless such Option (i) has an Option price of at
least 110 percent of the fair market value of the Stock on the date of the grant
of such option and (ii) cannot be exercised more than five years after the date
it is granted.
Each Participant who receives an Incentive Option must agree
to notify the Corporation in writing immediately after the Participant makes a
disqualifying disposition of any Stock acquired pursuant to the exercise of an
Incentive Option. A disqualifying disposition is any disposition (including any
sale) of such Stock before the later of (i) two years after the date the
optionee was granted the Incentive Option or (ii) one year after the date the
Participant acquired Stock by exercising the Incentive Option. Any transfer of
ownership to a broker or nominee shall be deemed to be a disposition unless the
Participant provides proof satisfactory to the Committee of his continued
beneficial ownership of the Stock.
Any other provision of the Plan to the contrary
notwithstanding, no Incentive Option shall be granted after the date which is
ten years from the date this Plan is adopted, or the date the Plan is approved
by the stockholders, whichever is earlier.
ARTICLE VII. EXERCISE OF OPTION
Any Option may be exercised in whole or in part at any time
subsequent to such Option becoming exercisable during the term of such Option;
provided, however, that each partial exercise shall be for whole Shares only.
Each Option, or any exercisable portion thereof, may only be exercised by
delivery to the Secretary or his office of (i) notice in writing signed by the
Participant (or other person then entitled to exercise such Option) that such
Option, or a specified portion thereof, is being exercised; (ii) payment in full
for the purchased Shares (as specified in Section 7.2 below); (iii) such
representations and documents as are necessary or advisable to effect compliance
with all applicable provisions of Federal or state securities laws or
regulations; (iv) in the event that the Option or portion thereof shall be
exercised pursuant to Section 6.3 by any person or persons other than the
Participant, appropriate proof of the right of such person or persons to
exercise the Option or portion thereof; and (v) full payment to the Corporation
of all amounts which, under federal or state law, it is required to withhold
upon exercise of the Option.
7.1 SHARE CERTIFICATES. Upon receiving notice and payment, the
Corporation will cause to be delivered to the Participant, as soon as
practicable, a certificate in the Participant's name for the Shares purchased.
The Shares issuable and deliverable upon the exercise of a Stock Option shall be
fully paid and non-assessable. The Corporation shall not be required to issue or
deliver any certificate or certificates for Shares purchased upon the complete
or partial exercise of the Stock Option prior to fulfillment of (i) the
completion of any registration or other qualification of such Shares under any
federal or state law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body which may be
necessary or advisable and (ii) the obtaining of any approval or other clearance
from any federal or state governmental agency which may be necessary or
advisable.
7.2 PAYMENT FOR SHARES. Payment for Shares purchased under an
Option granted hereunder shall be made in full upon exercise of the Option, by
certified or bank cashier's check payable to the order of the Corporation or,
unless otherwise prohibited by the terms of an Option agreement, by one or more
of the following: (i) in the form of unrestricted Shares already owned by the
Participant based in any such instance on the fair market value of the
unrestricted Shares on the date the Option is exercised; provided, however,
that, in the case of an Incentive Option, the right to make a payment in the
form of already owned Shares may be authorized only at the time the Option is
granted; (ii) by delivering a properly executed exercise notice to the
Corporation, together with a copy of irrevocable instructions to a broker to
deliver promptly to the Corporation the amount of sale or loan proceeds to pay
the purchase price; (iii) by a combination thereof, in each case in the manner
provided in the Option agreement; or (iv) by any other means acceptable to the
Corporation. To facilitate the foregoing, the Corporation may enter into
agreements for coordinated procedures with one or more brokerage firms. To the
extent the Option exercise price may be paid in Shares as provided above, Shares
delivered by the Participant may be (i) Shares which were received by the
Participant upon exercise of one or more Incentive Options, but only if such
Shares have been held by the Participant for at least the greater of (a) two
years from the date the Incentive Options were granted or (b) one year after the
transfer of Shares to the Participant, or (ii) Shares which were received by the
Participant upon exercise of one or more Nonqualified Options, but only if such
Shares have been held by the Participant for at least six months.
7.3 SHARE WITHHOLDING. The Committee shall require that a
Participant pay to the Corporation, at the time of exercise of a Nonqualified
Option, such amount as the Committee deems necessary to satisfy the
Corporation's obligation to withhold federal or state income or other taxes
incurred by reason of the exercise or the transfer of Shares thereupon. A
Participant may satisfy such withholding requirements by having the Corporation
withhold from the number of Shares otherwise issuable upon exercise of the
Option that number of shares having an aggregate fair market value on the date
of exercise equal to the minimum amount required by law to be withheld;
provided, however, that in the case of an exercise by a Participant subject to
Section 16(b) of the Exchange Act, the Participant must (i) exercise the Option
during the period beginning on the third business day following the date of
release to the press of the quarterly or annual summary of earnings for the
Corporation, and ending on the twelfth business day following such date, or (ii)
irrevocably elect to utilize Share withholding at least six months prior to the
date of exercise.
ARTICLE VIII. ADJUSTMENT FOR RECAPITALIZATION, ETC.
The aggregate number of Shares which may be purchased pursuant
to Options granted, the number of Shares covered by each outstanding Option, and
the price per share thereof in each such Option shall be appropriately adjusted
for any increase or decrease in the number of outstanding Shares resulting from
a stock split or other subdivision or consolidation of Shares or for other
capital adjustments or payments of stock dividends or distributions, other
increases or decreases in the outstanding Shares effected without receipt of
consideration by the Corporation, or reorganization, merger or consolidation, or
other similar change affecting the Shares.
Such adjustment to an Option shall be made without a change to
the total price applicable to the unexercised portion of the Option (except for
any change in the aggregate price resulting from rounding-off of Share
quantities or prices). Any such adjustment made by the Committee shall be final
and binding upon all Participants, the Corporation, their representatives, and
all other interested persons. No fractional Shares shall be issued as a result
of such adjustment.
In the event of a Change in Control involving (i) the
liquidation or dissolution of the Corporation, (ii) a merger or consolidation in
which the Corporation is not the surviving corporation or (iii) the sale or
disposition of all or substantially all of the Corporation's assets, provision
shall be made in connection with such transaction for the assumption of Options
theretofore granted under the Plan, or the substitution for such Options of new
options of the successor corporation, with appropriate adjustment as to the
number and kind of Shares and the purchase price for Shares thereunder, or, in
the discretion of the Committee, the Plan and the Options issued hereunder shall
terminate on the effective date of such transaction if appropriate provision is
made for payment to the Participant of an amount in cash equal to the fair
market value of the Options less the exercise price for such Options.
ARTICLE IX. GOVERNMENT REGULATIONS AND
REGISTRATION OF SHARES
The Plan, and the grant and exercise of Options thereunder,
and the Corporation's obligation to sell and deliver stock under such Options,
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any regulatory or governmental agency as may be
required.
Each Option is subject to the requirement that if, at any
time, the Committee determines, in its absolute discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or NASDAQ or under any state or federal law,
or the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the issuance of Shares, no
Shares shall be issued, in whole or in part, unless such listing, registration,
qualification, consent or approval has been effected or obtained, free of any
conditions not acceptable to the Committee. The Corporation shall not be deemed,
by reason of the granting of any Option, to have any obligation to register the
Shares subject to such Option under the Securities Act or to maintain in effect
any registration of such Shares which may be made at any time under the
Securities Act.
Unless a registration statement under the Securities Act and
the applicable rules and regulations thereunder is then in effect with respect
to Shares issued upon exercise of any Option (which registration shall not be
required), the Corporation shall require that the offer and sale of such shares
be exempt from the registration provisions of said Act. In furtherance of such
exemption, the Corporation may require, as a condition precedent to the exercise
of any Option, that the person exercising the Option give to the Corporation
written representation and undertaking, satisfactory in form and substance to
the Corporation, that he is acquiring the Shares for his own account for
investment and not with a view to the distribution or resale thereof and
otherwise establish to the Corporation's satisfaction that the offer or sale of
the Shares issuable upon exercise of the Option will not constitute or result in
any breach or violation of the Securities Act or any similar state act or
statute or any rules or regulations thereunder. In the event a Registration
Statement under the Securities Act is not then in effect with respect to the
Shares issued upon exercise of an Option, the Corporation shall place upon any
stock certificate an appropriate legend referring to the restrictions on
disposition under the Act.
The Corporation is relieved from any liability for the
non-issuance or non-transfer or any delay in issuance or transfer of any Shares
subject to Options under the Plan which results from the inability of the
Corporation to obtain, or in any delay in obtaining, from any regulatory body
having jurisdiction, all requisite authority to issue or transfer Shares upon
exercise of the Options under the Plan if counsel for the Corporation deems such
authority necessary for lawful issuance or transfer of any such Shares.
Appropriate legends may be placed on the stock certificates evidencing Shares
issued upon exercise of Options to reflect such transfer restrictions.
ARTICLE X. OTHER PROVISIONS
The validity, interpretation and administration of the Plan
and any rules, regulations, determinations or decisions made thereunder, and the
rights of any and all persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with the laws of the
State of New Jersey.
As used herein, the masculine gender shall include the
feminine gender.
The headings in the Plan are for reference purposes only and
shall not affect the meaning or interpretation of the Plan.
All notices or other communications made or given pursuant to
this Plan shall be in writing and shall be sufficiently made or given if
hand-delivered or mailed by certified mail, addressed to any Participant at the
address contained in the records of the Corporation or to the Corporation at its
principal office.
The proceeds received from the sale of Shares pursuant to the
Plan shall be used for general corporate purposes.
Nothing in the Plan or in any Option granted hereunder shall
confer on any Participant or eligible Employee any right to continue in the
employ of the Corporation or any of its Subsidiaries, or to interfere in any way
with the right of the Corporation or any of its Subsidiaries to terminate such
Participant's or Employee's employment at any time.
The Plan is intended to comply with Rule 16b-3 promulgated
under the Exchange Act, and the Committee shall interpret and administer the
provisions of the Plan or any Option in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.
All expenses and costs incurred in connection with the
operation of the Plan shall be borne by the Corporation.
The adoption of this Plan shall not affect any other
compensation or incentive plans in effect for the Corporation. Nothing in this
Plan shall be construed to limit the right of the Corporation (i) to establish,
alter or terminate any other forms of incentives, benefits or compensation for
Employees of the Corporation, including, without limitation, conditioning the
right to receive other incentives, benefits or compensation on an Employee not
participating in this Plan; or (ii) to grant or assume options otherwise than
under this Plan in connection with any proper corporate purpose, including,
without limitation, the grant or assumption of stock options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock, or assets of any corporation, firm or association.
Participants shall have no rights as shareholders unless and
until certificates for Shares are registered in their names in satisfaction of a
properly exercised Option.
If the Committee or Subcommittee shall find that any person to
whom any amount is payable under the Plan is unable to care for his affairs
because of illness or accident, or is a minor, or has died, then any payment due
to such person or his estate (unless a prior claim therefore has been made by a
duly appointed legal representative), may, if the Committee or Subcommittee so
directs the Corporation, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Corporation therefore.
ARTICLE XI. EFFECTIVE DATE AND EXPIRATION DATE OF PLAN
The Plan is effective as of April 21, 1999, subject to
approval by the stockholders of the Corporation in a manner which complies with
Section 422 of the Code and applicable NASDAQ or national stock exchange listing
rules. The expiration date of the Plan, after which no Option may be granted
hereunder, shall be April 21, 2009.
ARTICLE XII. AMENDMENT OR DISCONTINUANCE OF PLAN
The Board may, without the consent of the Corporation's
stockholders or Participants under the Plan, at any time terminate the Plan
entirely, and at any time or from time to time amend or modify the Plan,
provided that no such action shall adversely affect Options theretofore granted
hereunder without the Participant's consent, and provided further that no such
action by the Board, without approval of the stockholders, may (i) increase the
total number of Shares which may be purchased or acquired pursuant to Options
granted under the Plan, either in the aggregate or for any Participant or
eligible Employee, except as contemplated in Article VIII; (ii) expand the class
of employees eligible to receive Options under the Plan; (iii) decrease the
minimum Option price; or (iv) extend the maximum term of Options granted
hereunder.
No amendment or modification may become effective if it would
cause the Plan to fail to meet the applicable requirements of Rule 16b-3.
Notwithstanding anything herein to the contrary, no provision of the Plan shall
be amended more than once in any six month period, other than to comport with
changes in the Code, the Exchange Act or the rules thereunder.
ARTICLE XIII. SHAREHOLDER APPROVAL
Anything in the Plan to the contrary notwithstanding, the
grant of Options hereunder shall be of no force or effect, and no Option granted
hereunder shall vest or become exercisable in any respect, unless and until the
Plan is approved by the affirmative vote of a majority of the votes cast at a
meeting a shareholders of the Corporation within 12 months after the plan is
adopted by the Board.
As adopted by the Salary and Personnel Committee of the Board of Directors of
HUBCO, Inc. on February 27, 1999 and the Board of Directors of HUBCO, Inc. on
February 27, 1999.
HUBCO, INC.
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS
Wednesday, April 21, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints
___________________________________________________________ and each of them, as
Proxy, each with full power of substitution, to vote all of the stock of HUBCO,
INC. standing in the undersigned's name at the Annual Meeting of Shareholders of
HUBCO, INC., to be held at the Sheraton Crossroads, Crossroads Corporate Center,
Route 17 North, Mahwah, New Jersey, on Wednesday April 21 1999 at 11:00 a.m.,
and at any adjournment thereof. The undersigned hereby revokes any and all
proxies heretofore given with respect to such meeting.
This proxy will be voted as specified below. If no choice is specified,
the proxy will be voted FOR the election of the 5 nominees for director listed
in the Proxy Statement, FOR the amendment to increase authorized capital of
HUBCO, Inc., FOR the amendment to change the name of HUBCO, Inc., and FOR the
HUBCO, Inc. 1999 Stock Option Plan.
Shares, if any, held for your account by the trustee for the dividend
reinvestment plan will be voted in the same manner as you vote the shares in
your name individually.
(see reverse side)
<PAGE>
1. ELECTION OF 5 DIRECTORS
/ / FOR the nominees listed below (except as marked to the
contrary below):
/ / FOR ALL nominees except:
(Instructions: To withhold authority to vote for any
individual nominee(s) write that nominee's name on the above
line.)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
W. Peter McBride, Bryant Malcolm, James E. Schierloh,
John H. Tatigian, and Noel DeCordova.
2. THE CAPITALIZATION AMENDMENT, increasing the number of authorized shares to
125,000,000
/ / FOR the Capitalization Amendment.
/ / AGAINST the Capitalization Amendment.
/ / WITHHOLD AUTHORITY to vote for the Capitalization Amendment.
3. THE NAME CHANGE AMENDMENT, changing the name of HUBCO, INC. to
HUDSON UNITED BANCORP
/ / FOR the Name Change Amendment.
/ / AGAINST the Name Change Amendment.
/ / WITHHOLD AUTHORITY to vote for the Name Change Amendment.
4. THE HUBCO, INC. 1999 STOCK OPTION PLAN
/ / FOR the HUBCO, Inc. 1999 Stock Option Plan.
/ / AGAINST the HUBCO, Inc. 1999 Stock Option Plan.
/ / WITHHOLD AUTHORITY to vote for the HUBCO, Inc. 1999 Stock
Option Plan.
5. In their discretion, upon such other matters as may properly come before the
meeting.
Dated: ________________, 1999
---------------------------
Signature
---------------------------
Signature
(Please sign exactly as your name appears. When
signing as an executor, administrator, guardian,
trustee or attorney, please give your title as
such. If signer is a corporation, please sign the
full corporate name and then an authorized officer
should sign his name and print his name and title
below his signature. If the shares are held in
joint name, all joint owners should sign.)
PLEASE DATE, SIGN AND
RETURN PROMPTLY
