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:
|_| Preliminary Proxy Statement
|_| Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
CENTER BANCORP, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
2) Aggregate number of securities to which 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 for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- -------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- -------------------------------------------------------------------------------
3) Filing Party:
- -------------------------------------------------------------------------------
4) Date Filed:
- -------------------------------------------------------------------------------
<PAGE>
CENTER BANCORP, INC.
Corporate Headquarters
2455 Morris Avenue
Union, New Jersey 07083
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 16, 1996
To Our Shareholders:
The Annual Meeting of Shareholders of Center Bancorp, Inc. (the
"Corporation") will be held at the Suburban Golf Club, 1730 Morris Avenue,
Union, New Jersey on April 16, 1996 at 7:00 p.m., for the following purposes:
1. To elect three Class 3 directors, whose three year terms will expire in
1999, and to elect one Class 1 Director, whose two year term will expire in
1998.
2. To transact such other business as may properly come before the Annual
Meeting.
Only shareholders of record of the Corporation at the close of business on
March 1, 1996 shall be entitled to notice of and to vote at the Annual Meeting.
Each share of the Corporation's Common Stock is entitled to one vote.
Please complete, sign, date and return the accompanying proxy in the
enclosed postage paid envelope at your earliest convenience.
You are cordially invited to attend the Meeting.
By Order of the Board of Directors
John J. Davis
President and
Chief Executive Officer
Dated: March 15, 1996
<PAGE>
CENTER BANCORP, INC.
2455 Morris Avenue, Union, New Jersey 07083
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Center Bancorp, Inc. (the "Corporation") of proxies
to be used at the annual meeting of the shareholders of the Corporation to be
held at the Suburban Golf Club, 1730 Morris Avenue, Union, New Jersey at 7:00
p.m. on April 16, 1996, and any adjournments thereof (the "Annual Meeting").
Copies of this Proxy Statement and the enclosed form of proxy are first being
sent to shareholders on or about March 15, 1996.
Only shareholders of record at the close of business on March 1, 1996
(the "Record Date") will be entitled to receive notice of and to vote at the
Annual Meeting. Each share is entitled to one vote on each matter to be voted on
at the Annual Meeting.
On the Record Date, there were 1,484,793 shares of common stock, no par
value (the "Common Stock"), outstanding. An additional 199,368 shares are held
by the Corporation as treasury stock.
Any shareholder who executes the proxy referred to in this Proxy
Statement may revoke such proxy at any time before it is exercised, but
revocation is not effective unless a later dated signed proxy is submitted to
the Corporation prior to the Annual Meeting, written notice of revocation is
filed with the Secretary of the Corporation either prior to the Annual Meeting
or while the Annual Meeting is in progress but prior to the voting of such proxy
or the shares subject to such proxy are voted by written ballot at the Annual
Meeting.
All proxies properly executed and not revoked will be voted as
specified. If a proxy is signed but no specification is given, the proxy will be
voted in favor of the Board's nominees.
The cost of soliciting proxies shall be borne by the Corporation. In
addition to the solicitation of proxies by use of the mails, officers and
employees of the Corporation and/or its subsidiary may solicit proxies by
telephone, telegraph or personal interview, with nominal expense to the
Corporation. The Corporation will also pay the standard charges and expenses of
brokerage houses or other nominees or fiduciaries for forwarding proxy
soliciting material to the beneficial owners of shares.
The presence in person or by proxy of holders of a majority of the
outstanding shares of Common Stock will constitute a quorum for the transaction
of business at the Annual Meeting. The election of directors will require the
affirmative vote of a plurality of the Common Stock represented and entitled to
vote at the Annual Meeting. All other matters submitted to shareholders at the
Annual Meeting will require the affirmative vote of a majority of the votes cast
at the Annual Meeting by shareholders represented and entitled to vote at the
Annual Meeting. For purposes of determining the votes cast with respect to any
matter presented for consideration at the Annual Meeting, only those votes cast
"for" or "against" will be counted. Abstentions and broker non-votes will be
counted only for the purpose of determining whether a quorum is present at the
Annual Meeting.
Election of Directors
The By-Laws provide that the Board of Directors shall consist of not
less than five nor more than twenty-five members, the exact number to be fixed
and determined from time to time by resolution of the full Board of Directors or
by resolution of the shareholders at any annual or special meeting. The Board of
Directors has set the number of Directors to be eleven. The Corporation's
Certificate of Incorporation provides that the Directors shall be divided into
three classes, as nearly equal in number as possible, with each class elected on
a staggered term basis, normally for a period of three years. Shorter terms are
permitted when necessary in order to equalize the size of the classes. At the
upcoming Annual Meeting, three directors in Class 3 will be elected for a three
year term and one director in Class 1 (who has not previously been elected by
shareholders) will be elected for a term of two years. The terms of the
remaining directors in Class 2 and Class 1 will continue until 1997 and 1998,
respectively.
It is intended that the proxies solicited hereunder will be voted FOR
(unless otherwise directed) the election of directors Robert L. Bischoff, Paul
Lomakin, Jr. and Herbert Schiller for three year terms and director Brenda
Curtis for a two year term. The Corporation does not contemplate that any
nominee will be unable to serve as a director for any reason. Each nominee has
agreed to serve if elected. However, in the event that one or more of the
nominees should be unable to stand for election, discretionary authority is
reserved to cast votes for the election of a substitute or substitutes selected
by the Board of Directors and all proxies eligible to be voted for the Board's
nominees will be voted for such other person or persons. Each of the nominees
are currently members of the Board of Directors of the Corporation and its
subsidiary, Union Center National Bank (the "Bank").
Each of the members of the Board of Directors of the Corporation
(collectively, the "Directors") has served in their current occupations for at
least the past five years. The Directors, as of February 1, 1996, according to
information supplied by them, owned beneficially, directly or indirectly, the
number of shares of Common Stock set forth opposite their respective names
below. The Directors have served continuously as such since the dates when they
first became Directors as set forth herein. The date appearing in parenthesis
opposite each director's name in the "Director Since" column below represents
the year in which such Director became a director of the Bank. Each such
Director presently serves as a Director of the Bank.
During 1995, there were 15 meetings of the Board of Directors of the
Corporation. No director attended less than 75% of these meetings.
<PAGE>
CLASS- 1 The following table sets forth certain information with respect
to each Director in Class 1. Mrs. Curtis is a nominee for
election to the Board of Directors of the Corporation at the Annual
Meeting for a term of two years. Messrs. Davis, Kein and Woodward
have terms which will continue after the Annual Meeting.
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock
Held
Beneficially Percent of
Director Directly and Outstanding Other
Name Occupation Age Since Indirectly Shares Directorships
---- ---------- --- ----- ---------- ------ -------------
<S> <C> <C> <C> <C> <C> <C>
John J. Davis President and Chief 53 1982 16,107(a) 1.08 --
Executive Officer (1982)
of the Corporation
and the Bank
Brenda Curtis Executive Director, 54 1995 1,000(b) .07 --
American Cancer (1995)
Society, Union
County Unit
Donald G. Kein Partner, Kein, 58 1982 28,632(c) 1.93 --
Pollatschek & (1970)
Greenstein
(Attorneys)
Charles P. Chairman of the 72 1982 12,641(d) .85 --
Woodward Board of the (1970)
Corporation and
the Bank
</TABLE>
- ----------------
(a) Direct-----------15,960
Indirect------------147 (jointly with wife and children)
(b) Direct------------1,000
(c) Direct-----------28,200
Indirect------------432 (wife)
(d) Direct-----------12,641
<PAGE>
CLASS- 2 The following table sets forth certain information with respect
to each Director in Class 2 (each member of this Class has a term
which will continue after the Annual Meeting):
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock
Held
Beneficially Percent of
Director Directly and Outstanding Other
Name Occupation Age Since Indirectly Shares Directorships
---- ---------- --- ----- ---------- ------ -------------
<S> <C> <C> <C> <C> <C>
Hugo Barth, III Partner, Haeberle & 53 1982 12,569(a) .85 --
Barth (Funeral (1977)
Director)
Alexander A. Bol Owner, Alexander- 48 1994 1,965(b) .13 --
A. Bol A.I.A.
(Architectural Firm) (1994)
Stanley R. Sommer Retired; formerly 74 1982 10,147(c) .68 --
President, Somer,
Inc. (Rental (1972)
Clothing)
William A. Thompson Vice President, 38 1994 1,504(d) .10 --
Thompson &
Company (Autoparts (1994)
Distributor)
</TABLE>
- --------------------
(a) Direct------------9,355
Indirect----------3,214 (jointly with wife)
(b) Direct------------1,965
(c) Direct------------9,937
Indirect------------210 (wife)
(d) Direct------------1,000
Indirect------------504 (wife)
<PAGE>
CLASS 3 - The following table sets forth certain information with respect
to the Directors in Class 3, each of whom has been nominated for
three year terms:
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock
Held
Beneficially Percent of
Director Directly and Outstanding Other
Name Occupation Age Since Indirectly Shares Directorships
---- ---------- --- -------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Bischoff President 56 1992 7,665(a) .52 --
Beer Import Co. (1992)
Paul Lomakin, Jr. President 69 1982 39,424(b) 2.52 --
Winthrop Dev. (1977)
(Builder)
Herbert Schiller President 60 1990 9,450(c) .64 --
Foremost Mfg. Co. (1990)
(Manufacturer)
</TABLE>
- ---------------------
(a) Direct------------7,350
Indirect------------315 (wife)
(b) Direct-----------21,456
Indirect---------15,968 (wife and children)
(d) Direct------------7,350
Indirect----------2,100 (corporate)
The shares set forth in the table above include the following number of
shares subject to options exercisable by April 1, 1996: Mr. Barth, 4,200 shares;
Mr. Bischoff, 4,200 shares; Mr. Bol, 0 shares; Ms. Curtis, O shares; Mr. Davis,
2,520 shares; Mr. Kein, 4,200 shares; Mr. Lomakin, 4,200 shares; Mr. Schiller,
4,200 shares; Mr. Sommer, 4,200 shares; Mr. Thompson, 0 shares; and Mr.
Woodward, 4,200 shares.
The two executive officers of the Corporation who are not Directors,
Anthony C. Weagley and Eileen J. Torbick, beneficially owned the following
number of shares of Common Stock as of February 1, 1996: 3,245 shares for Mr.
Weagley and 4,672 shares for Ms. Torbick, including 840 shares for each of them
subject to options exercisable by April 1, 1996. As of February 1, 1996, the
total number of shares directly and beneficially owned by all Directors and
executive officers of the Corporation (13 persons) amounted to 139,104 shares or
9.37% of the common shares outstanding. In addition, as of February 1, 1996, the
total number of shares directly and beneficially owned by officers of the Bank
(and not the Corporation) amounted to 785 shares or .05% of the common shares
outstanding.
There are no fees paid to any Director of the Corporation for any meeting
of the Board of Directors or its committees or committee meetings of the Bank's
Board of Directors. All directors of the Bank who are not officers of the Bank
receive a $2,500 annual retainer and $300 for each meeting of the Board of
Directors of the Bank attended. Pursuant to the Corporation's 1993 Outside
Director Stock Option Plan, each non-employee director (other than Ms. Curtis}
has received a stock option covering 6,300 shares of Common Stock. Ms. Curtis,
who became a director in 1995, will receive a stock option covering 6,300 shares
of Common Stock one year after she first became a member of the Board, provided
that she remains a director at such date. These options are exercisable in three
installments, commencing one year after the date of grant, at a per share
exercise price equal to the fair market value of one share of Common Stock on
the date of grant.
There is no family relationship, by blood, marriage or adoption, between
any of the foregoing Directors and any other officer, director or employee of
the Corporation or the Bank.
The Corporation has no standing audit committee, nominating committee or
compensation committee of the Board of Directors. Matters within the
jurisdiction of these committees are considered by the entire Board of Directors
of the Corporation.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth, for the years ended December 31, 1993, 1994
and 1995, the annual and long-term compensation of the Corporation's Chief
Executive Officer and Chief Financial Officer. No other executive officer of the
Corporation had annual compensation of $100,000 or more during the past three
years.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Common Shares All
Name and Compensation (A) Subject to Other
Principal Position Year Salary Other (B) Options Granted (C) Compensation (D)
------------------ ---- ------ ------ --------------- -------------
<S> <C> <C> <C> <C>
John J. Davis 1995 $189,783 $16,982 - $4,500
President and Chief 1994 169,954 19,502 - -
Executive Officer 1993 149,919 18,340 6,300 -
of the Corporation
and the Bank
Anthony C. Weagley 1995 101,179 46,789 - $2,290
Treasurer of the 1994 71,431 1,870 - -
Corporation and 1993 62,291 - 2,000 -
Vice President and
Cashier of the Bank
</TABLE>
- -----------------
(A) The Company adopted the Achievement Incentive Plan (the "AIP"), effective
as of January 1, 1995. Incentive compensation payable under the AIP with
respect to performance during 1995 has not yet been determined and
accordingly is not included within "Annual Compensation".
(B) For Mr. Davis, represents the cost to the Corporation of supplying an
automobile to Mr. Davis ($13,535 in 1995, $14,679 in 1994 and $15,208 in
1993) and payments made on Mr. Davis' behalf with respect to his personal
use of a country club membership.
(C) For Mr. Weagley, represents the cost to the Corporation of supplying an
automobile to Mr. Weagley ($6,486 in 1995 and $1,870 in 1994) and payments
made on Mr. Weagley's behalf with respect to relocation expense in 1995.
(D) Represents contributions made to the Corporation's 401(k) plan on behalf of
Messrs. Davis and Weagley, representing 50% of their contributions up to 6%
of gross compensation.
<PAGE>
Stock Options
No stock options were granted to Mr. Davis or Mr. Weagley (the "Named
Officers") during 1995 and the Named Officers did not exercise any stock options
during 1995. The following table provides data regarding the number of shares
covered by both exercisable and non-exercisable stock options held by the Named
Officers at December 31, 1995. Also reported are the values for "in-the-money"
options, which represent the positive spread between the exercise price of the
Named Officers' options and $31, the average of the high bid price and low asked
price for the Common Stock on December 29, 1995 as quoted by the National
Quotation Bureau.
FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at Year-End(#) at Year-End($)
--------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
John J. Davis 2,520 3,780 $4,334 $6,502
Anthony C. Weagley 840 1,260 1,445 2,167
Pension Plan
The Bank maintains a defined benefit pension plan (the "Pension Plan")
for the benefit of its eligible employees. Monthly normal retirement benefits
are computed at the rate of 44% of final average earnings, reduced
proportionately for the participant's credited benefit years less than 25.
"Final average earnings" is the average monthly W-2 compensation which is paid
to participants by the Bank during the last 60 calendar months of their credited
benefit service (essentially equivalent to "Salary" in the Summary Compensation
Table set forth above). The benefits shown are not subject to deduction for
Social Security or other offset amounts.
The following table sets forth the annual benefits which an eligible
employee would receive under the Pension Plan upon retirement at age 65 based on
the indicated assumptions as to average annual earnings and years of service.
The table also reflects benefits under the Corporation's Supplemental Executive
Retirement Plans, which became effective on January 1, 1995. The amounts shown
reflect a 10 year certain and life annuity benefit rather than the joint and 50%
survivor annuity benefit required by the Employee Retirement Income Security Act
of 1974 as the normal form of benefit for a married employee. The number of
benefit years for Mr. Davis is 18 and the number of benefit years for Mr.
Weagley is nine.
<PAGE>
Average Annual
Earnings for
60 Consecutive 10 15 20 25*
Months Prior Benefit Benefit Benefit Benefit
to Retirement Years Years Years Years
$ 40,000 7,040 10,560 $14,080 $17,600
60,000 10,560 15,840 21,120 26,400
80,000 14,080 21,120 28,160 35,200
100,000 17,600 26,400 35,200 44,000
120,000 21,120 31,680 42,240 52,800
140,000 24,640 36,690 49,280 61,600
150,000* 26,400 39,600 52,800 66,000
* Maximum
New Benefit Plans
During 1994, the Corporation implemented certain new employee benefit
plans, effective as of January 1, 1995, including two Supplemental Executive
Retirement Plans ("SERPS"). These new plans are described below under the
caption "Board Report on Executive Compensation."
Employment Agreements
John J. Davis entered into an employment agreement with the Corporation
and the Bank, dated as of August 1, 1992. Effective September 1, 1995, the
employment agreement was amended and restated in its entirety. As amended, the
employment agreement provides for Mr. Davis' employment as President and Chief
Executive Officer of the Corporation and the Bank for a term that expires in
2000, subject to renewal provisions that, in effect, assure Mr. Davis of at
least three years' notice of termination in the absence of a "Change in Control
Event" (as defined) and five years' notice of termination in connection with a
Change in Control Event. Mr. Davis' salary rate currently is $190,000 per annum.
In subsequent years, Mr. Davis is to receive his salary for the immediately
preceding 12 month period plus such salary increment as shall be determined by
the Executive Compensation Committee of the Bank's Board of Directors, with
reference to the Bank's salary guide. The employment agreement also provides
that Mr. Davis will receive benefits and perquisites appropriate to his
position.
Mr. Davis has the right under the employment agreement to resign with
"Good Reason," which is defined in the agreement to include certain Change in
Control Events which, in turn, are defined as the acquisition by a third party
of a majority of the voting stock or substantially all of the assets of the
Corporation or the Bank or a change in the composition of the Board of Directors
such that a majority of the members of the Board as of the date of the agreement
no longer serve on the Board. Upon termination for Good Reason, the employment
agreement provides that Mr. Davis will be entitled to receive a severance
allowance equal to his regular compensation for the duration of the term of the
agreement, an amount equal to the largest bonus received by Mr. Davis under the
AIP, multiplied by the number of years remaining in the term of his employment
agreement, benefits comparable to the benefits that Mr. Davis would have
received under certain benefit plans maintained by the Corporation and the Bank
and acceleration of all unvested stock options. Mr. Davis would be entitled to
comparable benefits if the Bank and the Corporation were to terminate his
employment without cause.
Anthony C. Weagley entered into an employment agreement with the
Corporation and the Bank, dated as of January 1, 1996. The employment agreement
provides for Mr. Weagley's employment as Vice President and Cashier of the Bank
and Treasurer of the Corporation for a term that expires on December 31, 1998,
subject to renewal provisions that, in effect, assure Mr. Weagley of at least
two years' notice of termination in the absence of a Change in Control Event and
three years' notice of termination in connection with a Change in Control Event.
Mr. Weagley's salary rate for 1996 will be $85,000 per annum. In subsequent
years, Mr. Weagley is to receive his salary for the immediately preceding 12
month period plus such salary increment as shall be determined by the Executive
Compensation Committee of the Bank's Board of Directors, with reference to the
Bank's salary guide. The employment agreement also provides that Mr. Weagley
will receive certain benefits and perquisites appropriate to his position.
Mr. Weagley has the right under the employment agreement to resign with
"Good Reason", which is defined in a manner similar to the definition in Mr.
Davis' contract. Upon termination for Good Reason, the employment agreement
provides that Mr. Weagley will be entitled to receive a severance allowance
equal to his regular compensation for the duration of the term of the agreement,
an amount equal to the largest bonus received by Mr. Weagley under the AIP,
multiplied by the number of years remaining in the term of his employment
agreement, benefits comparable to the benefits that Mr. Weagley would have
received under certain benefit plans maintained by the Corporation and the Bank
and acceleration of all unvested stock options. Mr. Weagley would be entitled to
comparable benefits if the Bank and the Corporation were to terminate his
employment without cause.
Both Mr. Davis' employment agreement and Mr. Weagley's employment
agreement contain "gross up" provisions which provide for additional
compensation in the event that any benefits payable to them pursuant to their
employment agreements are subject to certain excise taxes imposed by the
Internal Revenue Code.
Compensation Committee Interlocks and Insider Participation
The Board of Directors does not maintain a Compensation Committee.
Accordingly, compensation decisions are made by the entire Board of Directors.
During 1995, the following individuals served on the Board for all or a portion
of the year: Alexander A. Bol, Hugo Barth III, Robert L. Bischoff, Brenda
Curtis, John J. Davis, Donald G. Kein, Paul Lomakin, Jr., Herbert Schiller,
Stanley R. Sommer, William A. Thompson and Charles P. Woodward. Of the persons
named, only Mr. Davis has served as an officer and/or employee of the
Corporation or the Bank. Mr. Davis participates in Board determinations
regarding compensation of all employees other than himself.
Directors Hugo Barth III, Robert L. Bischoff, John J. Davis, Donald G.
Kein, Paul Lomakin, Jr., Herbert Schiller, Stanley R. Sommer, William A.
Thompson and Charles P. Woodward and certain of the Corporation's officers
(including Eileen Torbick) and their associates are and have been customers of
the Bank and have had transactions with the Bank in the ordinary course of
business during 1995. All such transactions with these directors and officers of
the Corporation and their associates were made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time of such transactions for other
persons and did not involve more than a normal risk of collectibility or present
other unfavorable features.
During 1995, a partnership of which Director Donald G. Kein was a
partner rendered legal services to the Corporation and/or the Bank in the normal
course of business. The aggregate fees amounted to approximately $71,200. Such
firm has rendered and will continue to render legal services to the Corporation
and/or the Bank in 1996. The cost of such services was reasonable and comparable
to the cost of obtaining similar services elsewhere in the market place.
During 1994, the Corporation agreed to indemnify John J. Davis and
Donald G. Kein in connection with a lawsuit in which the Bank and Messrs. Davis
and Kein were named as defendants. This litigation was dismissed during 1995.
<PAGE>
Board Report on Executive Compensation
Pursuant to rules adopted by the SEC to enhance disclosure of corporate
policies regarding executive compensation, the Corporation has set forth below a
report of its Board regarding compensation policies as they affect Mr. Davis and
the other executive officers of the Corporation.
Historical Analysis
The Board of Directors has historically viewed compensation of
executive officers as having three distinct parts, a current compensation
program, a set of standard benefits and a long-term benefit. The current
compensation element focused upon the executive officer's salary and was
designed to provide appropriate reimbursement for services rendered.
Historically, the Corporation's standard benefit package was limited to the
Pension Plan and health insurance. The long-term benefit element was reflected
in the grants of stock options to specific executive officers.
The employment agreement entered into with John J. Davis enabled the
Board to tie annual compensation to Mr. Davis' and the Corporation's
performance. Initially, the agreement provided for a base salary of $130,000 per
annum. Base salary in subsequent years has been left to the discretion of the
Board of Directors, subject to the restriction that base salary may not be
reduced during the term of the agreement. During the second, third and fourth
years, Mr. Davis' base salary was increased by the Board to $145,000, 160,000
and $170,000, respectively, reflecting the performance of the Corporation.
Subject to Mr. Weagley's contractual right to a salary of at least $85,000 per
year, the salary levels of the other executive officers are set annually by the
Board of Directors, with a recommendation by Mr. Davis.
During 1995, the Board amended Mr. Davis' employment agreement. The
Board concluded that it was important to provide Mr. Davis with certain
protections. The amended agreement contains an "evergreen" clause which, in
effect, assures Mr. Davis that he will receive three years notice of any
decision to terminate his agreement. The Board also approved the execution of an
employment agreement with Mr. Weagley which, in effect, assures Mr. Weagley that
he will receive two years notice of any decision to terminate his agreement.
During 1993 the Board adopted, and at the 1994 annual meeting the
shareholders approved, a stock option plan for key employees (the "Employee
Plan"). Under the Employee Plan, options are granted at an exercise price equal
to fair market value. Accordingly, options granted under the Employee Plan will
gain appreciable value if, and only if, the market value of the Common Stock
increases subsequent to the date of grant.
Recent Actions
As reported in the proxy statement for the 1995 Annual Meeting of
Shareholders, last year the Board implemented various modifications to its
compensation programs, designed primarily to establish a "pay-for-performance"
compensation policy. The steps approved by the Board, each of which was made
effective as of January 1, 1995, were as follows:
(a) Salary. While consolidation within the banking industry
has created a substantial supply of qualified executives, the Board believes
that it is important for the Bank to retain a competitive salary structure. In
late 1994, the Board approved new salary guidelines for the Bank's officers. As
of January 1, 1995, Mr. Davis' salary was increased to $170,000 per annum. As of
January 1, 1996, the Board approved an increase in Mr. Davis' salary to $190,000
per year.
(b) Incentive Compensation. Previously, the Corporation has not
directly correlated compensation to performance in a manner designed to
provide meaningful incentives for Bank officers in general. To more directly tie
compensation to performance, in late 1994 the Board approved the implementation
of the AIP. Under the terms of the AIP, Bank officers were eligible to receive
incentive pay for performance in 1995 if the Corporation's return on average
assets was 1.00% or more. The 1995 return on average assets amounted to 1.15%.
For Mr. Davis, performance goals relate solely to the performance of the
Corporation. For all other participants, goals relate both to individual
performance and the Corporation's performance.
(c) Benefit Plans. In 1994, the Board determined to expand
the Corporation's benefits package in several different respects. Specifically,
the following actions were taken:
(i)401(k). The Corporation implemented a company-wide 401(k) plan
designed to provide an overall benefit to all full-time employees who are at
least years old and have at least one year of service. Under this Plan,
the Corporation matches 50% of employee contributions up to 6% of gross
compensation. The match for Mr. Davis during 1995 was $4,500.
(ii) SERPs. The Corporation established two Supplemental Executive
Retirement Plans ("SERPs") designed to provide benefits lost to senior
management as a result of federal legislation reducing and/or limiting
retirement benefits available from the Corporation's Pension Plan and 401(k)
plan. Costs to the Corporation for the replacement benefits will be similar to
the reduction in qualified retirement plan costs which otherwise would be
provided by those plans but for the federal legislation. To date, Mr. Davis is
the only employee designated for participation in the SERPs.
(iii) Split Dollar Life Insurance. The Board has implemented a split
dollar life insurance program for Mr. Davis and other senior bank officers
under the age of 60. This plan is designed to reduce the costs to the
Corporation of providing death benefit coverage to such officers, while
providing enhanced benefits at retirement (projected to be 3.5 times salary
less $50,000 remaining in a group term plan, subject to a maximum of $500,000
per employee) and reduced income tax to the participants on the coverage
provided.
(d) Stock Options. From time to time, the Board has granted stock options
to Mr. Davis and other executive officers. Such options have been granted at an
exercise price equal to the then current market price of the Common Stock. The
value of such options thus correlates directly with the market performance of
the Common Stock. Information regarding Mr. Davis' options is presented
elsewhere herein.
The Board believes that an appropriate compensation program can help in
achieving shareholder performance goals if its program reflects an appropriate
balance between providing rewards to key employees while at the same time
effectively controlling cash compensation costs. The Board believes that its
compensation program is consistent with, and should help to achieve, those
objectives.
By: The Board of Directors
Hugo Barth III Paul Lomakin, Jr.
Robert L. Bischoff Herbert Schiller
Alexander A. Bol Stanley R. Sommer
Brenda Curtis William A. Thompson
John J. Davis Charles P. Woodward
Donald G. Kein
Stockholder Return Comparison
Set forth below is a line graph presentation comparing the cumulative
stockholder return on the Corporation's Common Stock, on a dividend reinvested
basis, against the cumulative total returns of the Standard & Poor's 500 Stock
Index and the Media General Industry Group Index-Middle-Atlantic Banks for the
period from January 1, 1991 through December 31, 1995.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG CENTER BANCORP, INC.,
THE S&P 500 INDEX AND THE MEDIA GENERAL INDUSTRY GROUP INDEX
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Center Bancorp 100 129.24 173.52 362.03 320.38 334.67
Media General Industry
Group Index - Middle
Atlantic Banks 100 133.08 166.65 207.03 196.56 298.47
Standard & Poor's 500
Stock Index 100 130.48 140.46 154.62 156.66 215.54
</TABLE>
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Corporation and the Bank have appointed KPMG Peat Marwick their
independent auditors to perform the function of independent public auditors for
fiscal year 1996.
Representatives of KPMG Peat Marwick are expected to attend the Annual
Meeting and will be available to respond to appropriate questions of
shareholders. Such representatives will have an opportunity to make a statement
at the Annual Meeting if they so desire.
SHAREHOLDER PROPOSALS
SEC regulations permit shareholders to submit proposals for
consideration at annual meetings of shareholders. Any such proposals for the
Corporation's Annual Meeting of Shareholders to be held in 1997, must be
submitted to the Corporation on or before November 15, 1996 and must comply with
applicable regulations of the SEC in order to be included in proxy materials
relating to that meeting.
OTHER MATTERS
The Board of Directors of the Corporation is not aware that any other
matters are to be presented for action, but if any other matters properly come
before the Annual Meeting, or any adjournments thereof, the holder of any proxy
is authorized to vote thereon at his or her discretion.
A copy of the Annual Report of the Corporation and the Bank for the
year ended December 31, 1995 is being mailed to shareholders with this proxy
statement. The Annual Report is not to be regarded as proxy soliciting material
or as a communication by means of which any solicitation is to be made.
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1995 (EXCLUDING EXHIBITS) WILL BE FURNISHED, WHEN AVAILABLE,
WITHOUT CHARGE TO ANY SHAREHOLDER MAKING A WRITTEN REQUEST FOR THE SAME TO
ANTHONY C. WEAGLEY, TREASURER, CENTER BANCORP, INC., 2455 MORRIS AVENUE, UNION,
NEW JERSEY 07083.
By Order of the Board of Directors
John J. Davis
President and Chief Executive Officer
Dated: March 15, 1996
<PAGE>
Center Bancorp, Inc.
Proxy for Annual Meeting of Shareholders
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned shareholder of
Center Bancorp, Inc., Union, New Jersey 07083, do hereby constitute and appoint
Eileen J. Torbick, Donald Bennetti or Torrance B. Abell, Jr. or any one of them
(with full power to act alone), my true and lawful attorney(s) with full power
of substitution for me and in my name, place and stead to vote all of the common
stock of said Corporation standing in my name on its books on March 1, 1996 at
the annual meeting of its shareholders to be held at the Suburban Golf Club,
1730 Morris Avenue, Union, New Jersey 07083 on April 16, 1996 at 7:00 O'clock
p.m. or at any adjournments thereof, with all powers the undersigned would
possess if personally present, as shown on the reverse side.
(See Reverse Side)
This proxy is being solicited on behalf of the Board of Directors and may
be revoked prior to its exercise.
1. Election of Brenda Curtis as Director for two year term ending in 1998 and
Robert L. Bischoff, Paul Lomakin, Jr. and Herbert Schiller as Directors for
three year terms ending in 1999.
[ ] Grant Authority [ ] Withhold Authority
for all Nominees for all Nominees
2. Other Business - Whatever other business may be brought before the meeting or
any adjournment thereof.
If any other business is presented at said meeting, this proxy shall be voted in
accordance with the recommendations of management.
Instructions: To withholder authority to vote for any individual nominee, write
that nominee's name in the space provided below:
____________________________________________________
Unless otherwise specified, execution of the proxy
will confer authority to the persons named herein
as proxies to vote shares in favor of the Board's
nominees for directors.
Dated ______________, 1996
Signature ______________________________________
Signature ______________________________________
When signed as attorney, executor, administrator, trustee or guardian, please
give full titles. If more than one trustee, all should sign. All joint owners
must sign.
Important: To assure your representation at the meeting, please date, sign and
mail this proxy promptly in the envelope provided.
