<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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 toss.240.14a-11(c) or ss.240.14a-12
</TABLE>
CENTER BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------
(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:
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<PAGE>
CENTER BANCORP, INC.
Corporate Headquarters
2455 Morris Avenue
Union, New Jersey 07083
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 18, 2000
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 18, 2000, at 7:00 p.m., for the following purposes:
1. To elect three Class 2 directors, whose three year terms will expire
in 2003.
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 February 29, 2000 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 17, 2000
<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 18, 2000, 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 17, 2000.
Only shareholders of record at the close of business on February 29,
2000 (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 3,794,477 shares of common stock, no par
value (the "Common Stock"), outstanding. An additional 458,964 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 for election to the Board.
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
<PAGE>
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 ten. 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 2 will be elected for a three
year term. The terms of the remaining directors in Class 1 and Class 3 will
continue until 2001 and 2002, respectively.
It is intended that the proxies solicited hereunder will be voted FOR
(unless otherwise directed) the election of Hugo Barth, III, Alexander A. Bol
and William A. Thompson for three year terms. 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, 2000, 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 parentheses
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.
-2-
<PAGE>
CLASS - 1 The following table sets forth certain information with respect to
each Director in Class 1. Each member of Class 1 has a term that
will continue until 2001.
<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 57 1982 53,868(a) 1.42 --
Executive Officer (1982)
of the Corporation
and the Bank
Brenda Curtis Executive Director, 58 1995 18,287(b) .48 --
American Cancer (1995)
Society, Union
County Unit
Donald G. Kein Partner, Kein, 62 1982 74,254(c) 1.96 --
Pollatschek & (1970)
Greenstein
(Attorneys)
Charles P. Chairman of the 76 1982 36,903(d) .97 --
Woodward Board of the (1970)
Corporation and
the Bank
</TABLE>
- ----------------
(a) Direct-----------53,610 (includes 4,548 shares granted under the Company's
1999 Employee Stock Incentive Plan (the "Plan")
Indirect------------258 (jointly with wife and children)
(b) Direct-----------18,287
(c) Direct-----------71,703
Indirect----------2,551 (wife and children)
(d) Direct-----------36,903
-3-
<PAGE>
CLASS - 2 The following table sets forth certain information with respect to
the Directors in Class 2 (each of whom has been nominated for a three
year term).
<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>
Hugo Barth, III Partner, Haeberle & 57 1982 41,346(a) 1.09 --
Barth (Funeral (1977)
Director)
Alexander A. Bol Owner, Alexander- 52 1994 22,341(b) .59 --
A. Bol A.I.A. (1994)
(Architectural Firm)
William A. Thompson Vice President, 42 1994 20,521(c) .54 --
Thompson & Co. (1994)
(Auto Parts
Distributor)
</TABLE>
- --------------------
(a) Direct-----------26,313
Indirect---------15,033 (wife and jointly with wife)
(b) Direct-----------22,341
(c) Direct-----------18,705
Indirect----------1,816 (wife)
-4-
<PAGE>
CLASS 3 - The following table sets forth certain information with respect to
each Director in Class 3. Each member of Class 3 has a term that
will continue until 2002.
<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 60 1992 24,220(a) .64 --
Beer Import Co. (1992)
Paul Lomakin, Jr. President 73 1982 91,899(b) 2.42 --
Winthrop Dev. (1977)
(Builder)
Herbert Schiller President 64 1990 28,649(c) .76 --
Foremost Mfg. Co. (1990)
(Manufacturer)
</TABLE>
- ---------------------
(a) Direct-----------23,441
Indirect------------779 (wife)
(b) Direct-----------50,424
Indirect---------41,475 (wife and children)
(d) Direct-----------28,649
The shares set forth in the table above include the following number of
shares subject to options exercisable by April 1, 2000: Mr. Barth, 4,803 shares;
Mr. Bischoff, 15,628 shares; Mr. Bol, 15,628 shares; Ms. Curtis, 15,313 shares;
Mr. Davis, 8,385 shares; Mr. Kein, 15,628 shares; Mr. Lomakin, 15,628 shares;
Mr. Schiller, 15,628 shares; Mr. Thompson, 12,765 shares; and Mr. Woodward,
15,628 shares.
Anthony C. Weagley, the Company's Chief Financial Officer, beneficially
owned 10,575 shares of Common Stock as of February 1, 2000, including 5,210
shares subject to options exercisable by April 1, 2000. Donald Bennetti, a Vice
President of the Company, beneficially owned 1,851 shares of Common Stock as of
February 1, 2000, including 520 shares subject to options exercisable by April
1, 2000. As of February 1, 2000 the total number of shares directly and
beneficially owned by all Directors and executive officers of the Corporation
-5-
<PAGE>
(16 persons) amounted to 427,309 shares or 11.26% of the common shares
outstanding. In addition, as of February 1, 2000, the total number of shares
directly and beneficially owned by officers of the Bank (and not the
Corporation) amounted to 4,685 shares or .12% 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 $7,000 annual retainer and $450 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 has received a stock
option covering 15,628 Sares of Common Stock. 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.
Effective July 1, 1998, the Board of Directors adopted the Union Center
National Bank Directors' Retirement Plan (the "Directors' Retirement Plan").
Under the Directors' Retirement Plan, each non-employee director of the Board
who completes at least 15 years of service as a member of the Board (including
service on the Board prior to July 1, 1998), and who retires from the Board on
or after May 1, 2000 and after having attained age 70, will be paid an annual
retirement benefit of $8,500, payable monthly, commencing on his or her date of
retirement and continuing for 180 payments. In the event that a director dies
before receiving his or her entire benefit, the balance of such benefit will
continue to be paid to the director's surviving spouse until the earlier of such
spouse's death or the payment of all 180 such monthly installments. The
Directors' Retirement Plan is unfunded; that is, all benefits due thereunder are
payable from the Bank's general assets. The Bank may, however, establish a trust
or similar arrangement for the purpose of accumulating the amounts needed to
provide such benefits.
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 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.
The Board's Audit Committee consists of Mr. Bischoff, (Chairman), Ms. Curtis and
Messrs. Barth, Sommer, Thompson and Woodward. Stanley Sommer will cease serving
as a member of the Board and the Audit Committee as of the upcoming Annual
Meeting. The Audit Committee has responsibility for monitoring the Corporation's
financial reporting systems, reviewing the Corporation's financial statements
and supervising the relationship between the Corporation and its independent
accountants. During 1999, the Audit Committee met 4 times and the Board of
Directors met 12 times. All directors attended more than 75% of the Board and
committee meetings that they were required to attend.
-6-
<PAGE>
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth, for the years ended December 31, 1997,
1998 and 1999, the annual and long-term compensation of the Corporation's Chief
Executive Officer and its other executive officers who had annual compensation
(salary plus bonus) of $100,000 or more during 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
----------------------------
Annual Compensation Restricted Securities
Name and ------------------------------------------ Stock Underlying All Other
Principal Position Year Salary Bonus(A) Other(B) Awards($) Options/SARs(#) Compensation(D)
------------------ ---- ------ ----- ---------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
John J. Davis 1999 $250,791 $63,500 $ 19,735 69,070(C) 18,193 $ 7,050
President and Chief 1998 229,430 50,000 19,040 -- -- 6,300
Executive Officer 1997 222,116 -- 20,023 -- -- 6,000
of the Corporation
and the Bank
Anthony C. Weagley 1999 $110,122 20,800 $ 9,396 -- 4,026 $ 3,120
Vice President and 1998 104,944 15,550 12,015 -- -- 2,913
Treasurer of the 1997 98,880 -- 9,373 -- -- 2,775
Corporation and
Sr. Vice President and
Cashier of the Bank
Donald Bennetti 1999 101,053 17,100 9,291 -- 3,677 0
Vice President of the 1998 94,029 14,500 10,512 -- -- 293
Corporation and Senior 1997 89,430 -- 8,611 -- -- 1,560
Vice President of the Bank
</TABLE>
- -----------------
(A) The Corporation adopted the Achievement Incentive Plan (the "AIP"),
effective as of January 1, 1995. Incentive compensation was not payable
under the AIP with respect to performance during 1997.
(B) For Mr. Davis, represents the cost to the Corporation of supplying an
automobile to Mr. Davis ($15,672 in 1999, $16,078 in 1998 and $15,975 in
1997) and payments made on Mr. Davis' behalf with respect to his personal
use of a country club membership. For Mr. Weagley, represents the cost to
the Corporation of supplying an automobile to Mr. Weagley ($9,225 in 1999,
$12,015 in 1998 and $9,373 in 1997). For Mr. Bennetti, represents the cost
to the Corporation of supplying an automobile to Mr. Bennetti ($8,867 in
1999, $10,512 in 1998 and $8,611 in 1997).
(C) Represents the number of shares subject to award multiplied by the average
of the high bid price and the low asked price on June 17, 1999 (date of
grant). On December 31, 1999, Mr. Davis' restricted shares had an
aggregate market price of $68,355. Mr. Davis' restricted shares will vest
over a five year period and will be eligible for dividends in the same
manner as the Company's common stock.
(D) Represents contributions made to the Corporation's 401(k) plan on behalf
of Messrs. Davis, Weagley and Bennetti, representing 50% of their
contributions up to 6% of gross compensation.
-7-
<PAGE>
Stock Options
The following table provides data regarding the options
exercised by the Named Officers during 1999 (reflecting the number of shares
acquired and the difference between the value of the shares on the exercise date
and the option exercise price) and the number of shares covered by both
exercisable and non-exercisable stock options held by the Named Officers at
December 31, 1999. 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 $15.03, the average of the high bid price and low asked
price for the Common Stock on December 31, 1999.
AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
Number of
securities Value of
underlying unexercised in the
unexercised money options/SARs
options/SARs at at fiscal year end
fiscal year end (#)
(#)
Shares
acquired on Value Exercisable/ Exercisable/
Name exercise (#) Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
John J. Davis 5,000 $16.50 8,385/0 $27,083/--
Anthony C. Weagley -- -- 5,210/4,026 16,828/--
Donald Bennetti -- -- 520/3,677 1,679/--
</TABLE>
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%
-8-
<PAGE>
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 22, the number of benefit years for Mr. Weagley
is 13 and the number of benefit years for Mr. Bennetti is 9.
<TABLE>
<CAPTION>
Average Annual
Earnings for
60 Consecutive 10 15 20 25*
Months Prior Benefit Benefit Benefit Benefit
to Retirement Years Years Years Years
-------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
$ 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
</TABLE>
* Maximum
Other 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"). The SERPS, as well as a trust arrangement entered
into during 1997, 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 $265,000 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.
-9-
<PAGE>
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 and Donald Bennetti entered into employment
agreements with the Corporation and the Bank, dated as of January 1, 1996. Mr.
Weagley's agreement provides for his employment as Senior Vice President and
Cashier of the Bank and Vice President and Treasurer of the Corporation for an
initial term that was completed 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. Bennetti's
agreement provides for his employment as a Vice President of the Bank for an
initial term that was completed on December 31, 1998, subject to renewal
provisions that, in effect, assure Mr. Bennetti 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 currently is $110,250 per annum and Mr. Bennetti's salary rate
currently is $100,700 per annum. In subsequent years, Mr. Weagley and Mr.
Bennetti are to receive their 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 agreements also provide that Mr. Weagley and
Mr. Bennetti will receive certain benefits and perquisites appropriate to their
positions.
Both Mr. Weagley and Mr. Bennetti have the right under their employment
agreements 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 agreements provide that Mr. Weagley and Mr. Bennetti will be entitled
to receive a severance allowance equal to their regular compensation for the
duration of the term of the agreement, an amount equal to the largest bonus
received by them under the AIP, multiplied by the number of years remaining in
the term of their employment agreements, benefits comparable to the benefits
that they would have received under certain benefit plans maintained by the
Corporation and the Bank and acceleration of all unvested stock options. Mr.
Weagley and Mr. Bennetti would be entitled to comparable benefits if the Bank
and the Corporation were to terminate their employment without cause.
-10-
<PAGE>
The employment agreements for Messrs. Davis, Weagley and Bennetti
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 did not maintain a Compensation Committee during
1999. Accordingly, compensation decisions were made by the entire Board of
Directors. During 1999, 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, Alexander A. Bol, Brenda
Curtis, 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 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 1999. 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 1999, 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 $87,900. Such
firm has rendered and will continue to render legal services to the Corporation
and/or the Bank in 2000. The cost of such services was reasonable and comparable
to the cost of obtaining similar services elsewhere in the market place.
For information regarding a trust arrangement entered into with respect
to Mr. Davis, see the "Board Report on Executive Compensation" below.
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.
-11-
<PAGE>
Overview
The Board of Directors views 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 focuses upon
the executive officer's salary and is designed to provide appropriate
reimbursement for services rendered. Historically, the Corporation's standard
benefit package was limited to the Pension Plan and health insurance. In 1995,
the Board provided for these benefits to be supplemented in certain
circumstances. The long-term benefit element has primarily been reflected in the
grants of stock options to specific executive officers.
During 1999, the Corporation's stockholders adopted a new stock
incentive plan. The purposes of that plan are to attract qualified employees and
encourage existing employees to acquire a proprietary interest in the
Corporation, to continue their employment with the Corporation and its
subsidiaries and to render superior performance during their period of
employment. In addition, the Board proposed that plan because the number of
shares of the Corporation's Common Stock remaining available for option grants
under the then existing plans was deemed to be inadequate. The new plan permits
the grant of various stock incentives, including grants of stock options and
restricted stock.
The employment agreement entered into with John J. Davis has 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. In subsequent years, Mr. Davis' salary
has been increased to $265,000 per year. Subject to contractual minimums in the
case of those executives (such as Mr. Weagley and Mr. Bennetti) who have entered
into employment agreements with the Corporation, the salary levels of the other
executive officers are set annually by the Board of Directors, with a
recommendation by Mr. Davis.
The Board has concluded that it is important to provide Mr. Davis, Mr.
Weagley, Mr. Bennetti and certain other executives with employment protections.
Mr. Davis' employment agreement contains an "evergreen" clause which, in effect,
assures him that he will receive three years notice of any decision to terminate
his agreement. Mr. Weagley's agreement assures Mr. Weagley, and Mr. Bennetti's
employment agreement assures Mr. Bennetti, that he will receive two years notice
of any decision to terminate his agreement.
Specific Elements of Compensation
The Board has sought to structure executive compensation as a
"pay-for-performance" compensation policy. The elements of that policy are 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. In
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<PAGE>
accordance with those guidelines, Mr. Davis' current salary of $265,000 was
increased to that level in January 2000.
(b) Incentive Compensation. The AIP is designed to correlate
compensation to performance in a manner designed to provide meaningful
incentives for Bank officers in general. Under the terms of the AIP, Bank
officers were eligible to receive incentive pay for performance in 1999. 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 addition to benefits provided under the
Pension Plan and under standard medical insurance plans, the Corporation
furnishes the following plan benefits to executive officers:
(i) 401(k). The Corporation has implemented a company-wide 401(k)
plan designed to provide an overall benefit to all full-time employees who are
at least 21 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 1999 was $7,050.
(ii) SERPs. The Corporation has 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 are 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.] To set aside funds to help
meet its obligations under the SERPs, the Bank established a trust as of July 1,
1997 (the "Trust"). The Bank expects to contribute funds to the Trust from time
to time. The Trust funds, which are subject to the claims of the Bank's
creditors in certain circumstances, will be held in the Trust until paid to plan
participants and their beneficiaries in accordance with the terms of 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) 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', Mr. Weagley's
and Mr. Bennetti's options is presented elsewhere herein.
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<PAGE>
(e) The stock incentive plan adopted by the shareholders in 1999
authorized the grant of restricted stock awards. A restricted stock award
typically enables a recipient to obtain the restricted shares, without payment
of a cash exercise, upon the satisfaction of certain conditions. During 1999,
the only officer who received a restricted stock award was Mr. Davis, who was
awarded 4,548 restricted shares of Common Stock. The terms of that grant are
described 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
By: The Board of Directors
Hugo Barth III Donald. G. Kein Stanley R. Sommer
Robert L. Bischoff John J. Davis William A. Thompson
Alexander A. Bol Paul Lomakin, Jr. Charles P. Woodward
Brenda Curtis Herbert Schiller
</TABLE>
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, 1995 through December 31, 1999.
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<PAGE>
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG CENTER BANCORP, INC.,
THE S&P COMPOSITE INDEX AND THE MEDIA GENERAL INDUSTRY GROUP INDEX
<TABLE>
<CAPTION>
Measurement Period (Fiscal Year Ending December 31)
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Center Bancorp, Inc. 104.48 110.06 135.01 152.19 145.17
Media General Industry
Group Index - Regional
Middle Atlantic Banks 147.17 196.61 320.65 352.96 279.30
S&P Composite Index 137.58 169.17 225.61 290.09 351.13
</TABLE>
ASSUMES $100 INVESTED ON JANUARY 1, 1995
INDEPENDENT PUBLIC ACCOUNTANTS
The Corporation and the Bank have appointed KPMG their independent
auditors to perform the function of independent public auditors for fiscal year
2000.
Representatives of KPMG 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 2001 must be
submitted to the Corporation on or before November 10, 2000 and must comply with
applicable regulations of the SEC in order to be included in proxy materials
relating to that meeting.
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<PAGE>
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, 1999 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, 1999 (EXCLUDING EXHIBITS) WILL BE FURNISHED, WHEN AVAILABLE,
WITHOUT CHARGE TO ANY SHAREHOLDER MAKING A WRITTEN REQUEST FOR THE SAME TO
ANTHONY C. WEAGLEY, VICE PRESIDENT AND 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 17, 2000
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<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, do hereby constitute and appoint Donald
Bennetti, John F. McGowan and Lori A. Wunder, 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 February 29, 2000
at the annual meeting of shareholders to be held at the Suburban Golf Club, 1730
Morris Avenue, Union, New Jersey 07083 on April 18, 2000 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)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
CENTER BANCORP, INC.
April 18, 2000
/ / Please mark your
votes as in this
example.
This proxy is being solicited on behalf of the Board of Directors and
may be revoked prior to its exercise.
Grant Authority Withhold Authority
for all nominees for all nominees
/ / / /
1. Election of Directors
for three year terms ending
in 2003
Nominees: Hugo Barth, III
Alexander A. Bol
William A. Thompson
Instruction: to withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below:
- ----------------------
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.
Unless otherwise specified, execution of this proxy will confer
authority to the persons named herein as proxies to vote shares in favor of the
Board's nominees for directors.
Important: To assure your representation at the meeting, please date, sign and
mail this proxy promptly in the envelope provided.
Signature: ______________ Signature: ___________ Dated: ______, 2000
Note: 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.
