SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
53 South Laurel Street
Bridgeton, New Jersey 08302
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 21, 1999
To the Stockholders:
Notice is hereby given that the annual meeting of the Stockholders
(the "Annual Meeting") of Southern Jersey Bancorp of Delaware, Inc.,
Bridgeton, New Jersey (the "Company"), will be held at the Farmers
and Merchants National Bank Operation Center at 164 West Broad Street,
Bridgeton, New Jersey 08302, at 3:00 P.M., Bridgeton, New Jersey time,
on Monday, June 21, 1999 for the following purposes:
(1) To elect three directors;
(2) To transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.
Only those holders of common stock, $1.67 par value per share,
of the Company (the "Common Stock") of record at the close of business
on May 21, 1999, are entitled to notice of and to vote at the Annual Meeting
and any adjournment thereof.
You are cordially invited and urged to attend the Annual Meeting
in person, but if you cannot do so, please date, sign, and promptly return
the enclosed Proxy in the enclosed, self-addressed, stamped envelope.
If you attend the Annual Meeting and desire to revoke your Proxy and
vote in person, you may do so. In any event, a Proxy may be revoked
at any time before it is exercised.
By Order of the Board of Directors
Clarence D. McCormick
Chairman of the Board
Bridgeton, New Jersey
April 30, 1999
SOUTHERN JERSEY BANCORP OF DELAWARE, INC.
53 South Laurel Street
Bridgeton, New Jersey 08302
______________________________
PROXY STATEMENT
The solicitation of proxies in the form enclosed is made on behalf of the
Board of Directors of Southern Jersey Bancorp of Delaware, Inc. (the
"Company") for use at the annual meeting ("the Annual Meeting") of
stockholders on June 21, 1999. The proxy statement and the form
of proxy, together with the Annual Report to Shareholders for 1998, are
being mailed on May 22, 1999, or as soon thereafter as practicable,
to stockholders entitled to vote at the Annual Meeting.
Only stockholders of record at the close of business on May 21,
1999 (the "Record Date"), will be entitled to vote at the Annual
Meeting. On the Record Date there were 1,127,481 shares of
common stock, $1.67 par value per share, of the Company (the
"Common Stock") outstanding and entitled to vote, which included
on April 30, 1999 approximately 53,891 shares held by the Trust
Department of the Company's wholly-owned subsidiary, The
Farmers and Merchants National Bank of Bridgeton (the "Bank"); as
trustee in various capacities, representing approximately 4.78%
of the outstanding Common Stock.
If the proxy is executed and returned, it may be revoked at any time
prior to the voting of the proxy by written notice to the Secretary of
the Company, by a subsequently executed proxy, or orally by the
stockholder at the Annual Meeting.
Throughout this Proxy Statement, reference to Company business
and Bank business is interchangeable, as the Bank is the primary
operating subsidiary of the Company.
PROPOSALS OF SECURITY HOLDERS FOR INCLUSION IN THE COMPANY'S PROXY
STATEMENT AND FORM OF PROXY FOR THE ANNUAL MEETING IN 2000
NEW BUSINESS
At an annual meeting of stockholders, only such new business shall be
conducted, and only such proposals with respect to such new business shall
be acted upon, as shall have been brought before such meeting by or at the
direction of the Board of Directors, or by any stockholder of the Company
who complies with the notice procedures set forth in Regulation 14A-8
promulgated under the Securities Exchange Act of 1934, as amended. For
new business to be properly brought before an annual meeting by a
stockholder, the stockholder must own at least 1% or $2,000 in Market
Value of Common Stock and have held such stock continuously for at least
one year and such ownership shall continue at least through the date on
which the Annual Meeting is held. In addition, a stockholder's notice must
be delivered to, or mailed and Received at, the principal executive offices
of the Company not less than 120 calendar days in advance of the date of
the Company's proxy statement sent to stockholders in connection with the
previous year's annual meeting of stockholders, except that if no annual
meeting was held in the previous year or the date of the annual meeting has
been changed by more than 30 calendar days from the date contemplated at
the time of the previous year's proxy statement, such notice shall be
received by the Company in a reasonable time before the solicitation is
made. A stockholder's notice to the Secretary shall set forth no more than
one proposal and an accompanying supporting statement of 500 words or less.
The Stockholder's notice shall also set forth: (i) a brief description of
the matter desired to be brought before the meeting and the reasons for
conducting such business at the meeting; (ii) the name and address, as they
appear on the Company's books, of the stockholder proposing such proposal;
(iii) the class and number of shares of Common Stock beneficially owned by
the stockholder on the date of such stockholder notice and by any other
stockholders known by such stockholder to be supporting such proposal on
the date of such stockholder notice; and (iv) any financial interest of
the stockholder in such proposal.
ELECTION OF DIRECTORS
At the Annual Meeting, you will elect three directors. Directors are elected
by majority vote for a three-year term. Votes will be counted as one vote
per share. Any abstentions will be counted as shares voted but neither For
nor Against a nominee. Shares held in street name will not be counted
unless voted by proxy or in person. The present Board of Directors of the
Company consists of 10 members and are classified into three classes.
The classes and expiration terms follow. The three nominees are currently
Class III Directors, and they are Clarence D. McCormick, Harry W. Bullock
and James H. Carll. All directors and nominees are Directors of the Bank.
The Company has been advised by the persons named as proxy that they
intend to vote as directed by the proxies but if no direction is given then
they will vote "FOR" the election of each of the foregoing nominees. Nominees
elected as directors will serve until the expiration of their term of office
and until their successors are duly elected and qualified, or until their
earlier resignation or removal from office.
NOMINATION OF DIRECTORS
Nominations of candidates for election as directors at any annual meeting of
stockholders may be made by the Board of Directors or by any stockholder
entitled to vote at such meeting. Only persons nominated in accordance with
the procedures set forth in Section 2.11 of the Company's Bylaws shall be
eligible for election as directors at an annual meeting.
Nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Company as set forth in Section 2.11 of the Company's Bylaws. To
be timely, a stockholder's notice shall be delivered to, or mailed and
received at, the principal executive offices of the Company no less than 120
calendar days in advance of the date of the Company's proxy statement
sent to stockholders in connection with the previous year's annual meeting
of stockholders, except that if no annual meeting was held in the previous
year or the date of the annual meeting has been changed by more than 30
calendar days from the date contemplated at the time of the previous year's
proxy statement, such notice shall be received by the Company in a
reasonable time before the solicitation is made. Such stockholder's notice
shall set forth the following: (i) as to each person whom the stockholder
proposes to nominate for election as a director, (a) the name, age, business
address, and residence address of such person; (b) the principal occupation
or employment of such person; (c) the class and number of shares of
Common Stock that are beneficially owned by such person on the date of
such stockholder notice; and (d) any other information relating to such
person that would be required to be disclosed pursuant to Regulations
13D and 13G promulgated under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), in connection with the acquisition of
shares, and pursuant to Regulation 14A promulgated under the Exchange
Act, in connection with the solicitation of proxies with respect to nominees
for election as directors, regardless of whether such person is subject
to the provisions of such regulations; and (ii) as to the stockholder giving
the notice, (a) the name and address, as they appear on the Company's
books, of such stockholder and any other stockholders known by such
stockholder to be supporting such nominee; and (b) the class and number
of shares of Common Stock that are beneficially owned by such stockholder
on the date of such stockholder notice and beneficially owned by any other
stockholders known by such stockholder to be supporting such nominee
on the date of such stockholder notice.
No person shall be elected as director of the Company unless nominated
in accordance with the procedures set forth in Section 2.11 of the Company's
Bylaws. Ballots bearing the names of all the persons who have been nominated
for election as directors at an annual meeting in accordance with the
procedures set forth in Section 2.11 shall be provided for use at the
annual meeting.
In the event of the refusal or inability of any nominee for director of the
Company to serve as director, unless the number of directors shall have
been reduced by the Board, the persons named in the accompanying form
of proxy intend to vote the proxy at the meeting in accordance with the
recommendation of the Company to elect another nominee selected by the
Company.
The principal occupation of each director, his age, the year in which
he first became a director of the Bank, and, according to the information
furnished by him to the Company, the number of shares of Common Stock of
the Company beneficially owned by him, directly or indirectly, on May 21,
1999, are as follows:
Shares of Percentage of
Year First Elected to Common Shares Outstanding
Name and Farmers and Merchants Beneficially Common
Principal Occupation Age National Bank Board Owned Stock
CLASS III - Term Expires 1999
Clarence D. McCormick (1) 69 1966 162,025 14.37
CEO and Chairman of the Board
65 Marimac Road
Bridgeton, New Jersey 08302
Harry W. Bullock 72 1973 4,498 .40
Retired Senior Vice President and
Comptroller of the Bank
9 Briarwood Lane
Bridgeton, New Jersey 08302
James H. Carll, Esq. (2) 50 1997 37,119 3.29
Partner
Archer & Greiner
One Centennial Square
Haddonfield, New Jersey 08033
CLASS I - Term Expires 2000
Henry L. Backenson (3) 89 1949 15,525 1.38
Retired Vice President of
Protection Service Co.
41 Lake Street
Bridgeton, New Jersey 08302
Alfred F. Caggiano (4) 69 1967 28,593 2.54
President, Sunny Slope Farms of NJ, Inc., Growers of
Apples & Peaches
415 Greenwich Road
Bridgeton, New Jersey 08302
Anthony M. Sparacio, Jr. 46 1997 10,858 .96
President, S&L Petroleum, Inc.
716 Maple Avenue
Rosenhayn, New Jersey
CLASS II - Term Expires 2001
Louis Pizzo 82 1972 24,174 2.14
Retired Farm Owner/Operator
Landis Avenue
Rosenhayn, New Jersey 08345
Donald E. Strang (5) 69 1975 5,703 .51
President, Farm-Rite
Farm Machinery Company
508 North Main Street
Elmer, New Jersey 08318
Keron D. Chance, Esq. (6) 86 1983 134,180 11.90
Counselor at Law
Chance & McCann
201 W. Commerce Street
Bridgeton, New Jersey 08302
Clarence D. McCormick, Jr. (7) 38 1989 69,410 6.16
President of the Bank
80 Marimac Road
Bridgeton, New Jersey 08302
(1) 15,000 unexercised stock options.
19,309 shares in the name of Marie McCormick, his wife.
107,472 shares in the name of Clarence B. McCormick Testamentary Trust,
to which Clarence D. McCormick as Co-Trustee has dispositive power and
disclaims beneficial ownership to all but 35,824 shares held by the
Trust.
(2) 30,282 shares in the name of Eleanor Carll, his mother over which
James H. Carll has Power of Attorney.
(3) 679 shares in the name of Margaret Backenson, his deceased wife.
(4) 618 shares in the name of Marie Caggiano, his wife.
(5) 918 shares in the name of Kathleen Strang.
107 shares in joint name with his wife, Kathleen.
(6) 107,472 shares in the name of Clarence B. McCormick Testamentary Trust,
to which Keron D. Chance as Co-Trustee has dispositive power and
disclaims beneficial ownership to all shares held by the Trust.
(7) 54,480 unexercised stock options.
386 shares in joint name with his wife, Tracy.
326 shares in the name of Clarence D. McCormick, 3rd, his son.
179 shares in the name of Katelyn M. McCormick, his daughter.
153 shares held in an IRA Trust.
Each Director may be contacted by mail to his attention at the Main
Office of the Bank, 53 South Laurel Street, Bridgeton, New Jersey 08302.
All Directors have served on the Company's Board of Directors continuously
over the last five years except for James H. Carll and Anthony M. Sparacio,
Jr. who were appointed in 1997.
All directors are deemed to have a sole and/or shared voting and investment
authority in all beneficially owned shares.
Each director nominee has been employed with the employer listed at least
five years or more.
No arrangements or understandings have been made between any director
and any other persons pursuant to such director's election.
No family relationships exist between the directors and/or executive
officers other than Clarence D. McCormick, Jr. being the son of Clarence
D. McCormick and Paul J. Ritter, III being the brother of John P. Ritter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND OF MANAGEMENT
Other than as shown on the preceding table under election of directors,
the following table sets forth, as of May 21, 1999, the beneficial ownership
of persons who own 5% or more of the outstanding Common Stock:
Name and Nature of Amount of
Address of Beneficial Beneficial Percent
Title of Class Beneficial Owner Ownership Ownership of Class
___________ ________________ __________ _________ _______
Common Current and Proposed Record and 507,593 45.02
Directors and Executive Benficial (A)
Officers as a Group
(17 persons)
(A) No directors or officers have any outstanding rights to acquire
additional beneficial ownership of Common Stock other than under the
1987 Stock Option Plan.
OTHER DIRECTORSHIPS
Name of Name of Corporation of
Company's Director Which Directorship is Held
Clarence D. McCormick South Jersey Industries (1)
AAA of Southern NJ
James H. Carll Cybex International, Inc. (1)
(1) Company with a class of securities registered pursuant to Section 12 of
the Exchange Act, or subject to Section 15(d) of such act.
COMMITTEES
The Company has a standing audit committee of the Board of Directors. This
committee had ten regularly scheduled meetings during 1998 for the purpose
of instituting, overseeing, and assisting the internal and external bank
auditors. The members of the audit committee are:
Henry L. Backenson, Chairman
Louis Pizzo
Anthony M. Sparacio, Jr.
The Company does not have a nominating committee or any committee which
performs a similar function. These duties are carried out by the Board of
Directors. The Company does have a Human Relations Committee which is
responsible for compensation and benefits. This committee had two meetings
during 1998. The members of the Human Relations Committee are:
Donald E. Strang, Chairman
Alfred F. Caggiano
Keron D. Chance
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The Board of Directors of the Company had six meetings with 97% attendance in
1998. The Board of Directors of the Bank had 25 regularly scheduled meetings
during 1998. The directors attended more than 95% of the aggregate of all
Board of Directors Meetings and Committee Meetings on which such directors
served during 1998. Directors of the Company are paid $300.00 per meeting
attended. Directors of the Bank are paid a quarterly retainer fee of $750.00
and $400.00 per meeting attended. Outside directors are paid $300.00 for
each Committee Meeting attended.
BUSINESS
The Company is engaged in the business of managing and controlling its
subsidiary bank and such other businesses related to banking as may be
authorized under the Bank Holding Company Act of 1956, as amended.
The Bank is one of the largest independently owned banks in Cumberland County,
New Jersey. The Bank is a full service bank that, in addition to its main
office located in Bridgeton, has sixteen branch office locations. The Bank
operates a full service Trust Department through which it serves in a variety
of fiduciary and agency capacities.
The F & M Investment Company, a Delaware Corporation, is a subsidiary of the
Bank which was organized in 1984 to manage the investment portfolio of the
Bank. AMFDCM, Inc., a New Jersey corporation, is a wholly-owned subsidiary
of the Company which was organized in 1996 to manage repossessed real estate
and other assets of the Bank subsidiary.
Woulf Asset Holding Company, a New Jersey corporation, is a wholly-owned
subsidiary of the Bank, which was organized in 1996 to manage repossessed
real estate and other assets of the Bank's subsidiary.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name Other
And Annual Restricted All Other
Principal Compen- Stock LTIP Compen-
Position Year Salary$ Bonus($)sation Awards Options Payouts($) sation
_________
Clarence D. McCormick 1998 235,000 8,370(1) 18,960 --- --- --- 13,214
Chairman of the Board 1997 225,000 53,580(2) 15,589 --- --- --- 6,957
Chief Executive Officer 1996 200,000 36,390(3) 13,400 --- --- --- 1,092
Clarence D. McCormick, Jr. 1998 160,000 8,370(1) 19,080 --- --- --- 7,606
President 1997 150,000 53,580(2) 16,032 --- --- --- 2,399
1996 125,000 36,390(3) 13,800 --- --- --- 275
(1) Bonus paid in 1998 based on 1997 performance.
(2) Bonus paid in 1997 based on 1996 performance.
(3) Bonus paid in 1996 based on 1995 performance.
NOTES TO SUMMARY COMPENSATION TABLE
Employees of the Company are provided with life insurance coverage
which is equal to two times their annual salary. All officers having a title
of vice president or above are provided with life insurance equal to three
times their annual salary. Included in column (i) is $182 per year for
Clarence D. McCormick and $12 for Clarence D. McCormick, Jr. which
represents the difference in premium between two times annual salary and
three times annual salary for 1998. In 1997 and 1996 this difference was
$1,176 and $1,092 per year, respectively for Clarence D. McCormick was $292
and $275 per year, respectively for Clarence D. McCormick, Jr.
In 1997, the Company established a Group Term Replacement-Split
Dollar Plan for five employees. In 1997 it had imputed income of $1,491
and $80 respectively for Clarence D. McCormick and Clarence D. McCormick,
Jr. The imputed income in 1998 for this plan for Clarence D. McCormick
and Clarence D. McCormick, Jr. was $3,472 and $172 respectively and is
included in column (i).
In 1998, the Company established a Supplementary Life-Split Dollar
Plan for Clarence D. McCormick and Clarence D. McCormick, Jr. with imputed
income of $9,560 and $940 respectively, which is included in column (i). In
1997, it had imputed income of $4,290 and $460, respectively for Clarence D.
McCormick and Clarence D. McCormick, Jr.
The Group Term Replacement-Split Dollar Plan and the Supplementary
Life-Split Dollar Plan consist of life insurance policies that are owned
by the Company with both the Company and the employee named as beneficiaries.
The employee is able to designate the beneficiary of a portion of
the net life insurance with the Company being beneficiary of the remainder
but in no case will the Company receive less than the cash value of the
policy.
The Company has deferred compensation agreements with five employees,
which provide for compensation of 50% of their salary for ten years after the
later of age 65 or retirement from the Company. The deferred compensation will
be paid to an employee's beneficiary in the event of the employee's death prior
to or following retirement. Under an amended agreement, Clarence D. McCormick
has elected to receive 50% of his last annual salary per year for a ten-year
period beginning in 1998. In the event the employee dies before receiving the
full amount, the beneficiary will receive the unpaid balance. Included in
column (i) is $-0-, $-0-, and $-0- required to fund the plan for the years
1998 through 1996, respectively for Clarence D. McCormick and $6,482, $1,567,
and $-0- was required to fund the plan for the years 1998 through 1996 for
Clarence D. McCormick, Jr. Column (e) represents Director Fees of $18,960,
$15,589, and $13,400 for Clarence D. McCormick and $19,080, $16,032, and
$13,800 for Clarence D. McCormick, Jr. for the years 1998, 1997, and 1996,
respectively, received from the Company and the Bank.
Other than as discussed above, personal benefits available to officers and
directors of the Bank are available generally to all salaried employees.
REPORT OF THE HUMAN RELATIONS COMMITTEE DATED DECEMBER 9, 1998
This Committee establishes policies relating to the compensation of
employees, officers, and executive officers. All decisions by the Human
Relations Committee, (the "Committee"), are ratified by the Board of
Directors.
Compensation levels for employees, officers, and executive officers
from January 1, 1998, through December 31, 1998, were fixed by the Board
of Directors on December 10, 1997, based on recommendations of the
Committee. The compensation paid to the executive officers in 1998 was,
on the average, approximately 4.56% above that paid in 1997 and was based
upon the 1997 performance of the Company.
The compensation recommended and approved for executive officers is
intended to further the earnings and financial strength of the Company
through the focus of attention on efficient and productive operations
in an increasingly competitive environment. To achieve this goal, the
Company's Executive Compensation Policy integrates annual base
compensation with bonuses based on corporate performance and individual
initiatives.
In making its recommendations for executive officer compensation,
including that for the Chief Executive Officer and the President, the
Committee considers a number of factors, including an appraisal and
evaluation of the officer's performance, the earnings performance of
the Company, and information supplied by a nationally recognized
compensation consulting firm. The Committee also uses, to a lesser
extent, peer comparisons of other executive compensation surveys. Fixed
salaries for executives are near the median of the comparative group.
The Chief Executive Officer and President's bonuses are set in
the fiscal year based on the Company's performance that year, but they
are not typically paid until the first quarter of the next succeeding
year.
The base compensation of Chief Executive Officer Clarence D.
McCormick remained the same in 1999 after increasing $10,000 in 1998
and $25,000 in 1997. His bonus was decreased $8,370 to $-0- in 1999,
after decreasing in 1998 by $45,210 from 1997 as a result of the Company's
financial performance.
The base compensation of President Clarence D. McCormick, Jr.
remained the same in 1999 after increasing $10,000 in 1998, and $25,000
in 1997. His bonus was decreased $8,370 to $-0- in 1998, after decreasing
$45,210 in 1997 from 1996 as a result of the Company's financial performance.
The Committee based its recommendation largely on the Company's
financial performance in 1998.
Donald Strang, Chairman
Alfred Caggiano
Keron D. Chance
Dated: December 9, 1998
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
(a) (b) (c) (d) (e)
Value of
Unexercised
Number of In-The-Money
Unexercised Options Options at
Shares Acquired Value at Fiscal Year-End Fiscal Year-End
Name on Exercise Realized All Exercisable All Exercisable
Clarence D. McCormick, -0- -0- 15,000 $18,750
Chief Executive Officer
Clarence D. McCormick, Jr. -0- -0- 54,480 $117,380
President
(1) As adjusted for the 3 for 1 stock split in 1988.
On March 19, 1987, at the Annual Meeting of Stockholders, a Stock
Option and Stock Appreciation Rights Plan (the "Plan") was approved by
the stockholders. A copy of the Plan was mailed to all stockholders on
February 27, 1987. Under the Plan, a committee composed of Company
directors who are not eligible to participate in the Plan (the "Option
Committee") may authorize the grant of options for a total of not more
than 120,000(1) shares of Common Stock, subject to adjustments in the case
of a stock dividend, stock split, recapitalization, or other similar
corporate change. The Option Committee will select the persons to
whom options are to be granted and the number of shares subject to each
option.
Pursuant to the Plan, on August 7, 1988, the Option Committee,
consisting of Messrs. Strang, Caggiano, E. Carll, and Chance, granted
Incentive Stock Options for 49,000 shares of Common Stock to 21 officers
of the Company or its Bank subsidiary. To date 33,700 of these options
have been exercised and 15,300 have expired. Each of the foregoing
options granted has an $18.00 per share exercise price, which was 100%
of the market value of a share of Common Stock on the date of grant.
Pursuant to the Plan, on March 25, 1993, the Option Committee,
consisting of Messrs. Strang, Caggiano, E. Carll, and Chance, granted
Incentive Stock Options for 14,000 shares of Common Stock to 9 officers
of the Company or its Bank subsidiary. To date 6,620 of these options
have been exercised and 1,400 have expired. Each of the foregoing
options granted has a $20.00 per share exercise price, which was 100%
of the market value of a share of Common Stock on the date of grant.
Pursuant to the Plan, on December 5, 1994, the Option Committee,
consisting of Messers. Strang, Caggiano, E. Carll, and Chance, granted
Incentive Stock Options for 69,500 shares of Common Stock to 3 officers
of the Company or its Bank subsidiary. To date none of these options have
been exercised. Each of the foregoing options granted has a $31.00 per
share exercise price, which was 100% of the market value of a share of
Common Stock on the date of grant.
PENSION PLAN
The Bank has a non-contributory defined benefit pension plan which
covers substantially all salaried employees. Benefits under this plan
are based on the employees'' highest consecutive five years' compensation
in the last ten years prior to retirement. The Bank's policy has been to
fund the pension plan on a current basis to the extent deductible under
existing tax regulations.
PROJECTED ANNUAL BENEFITS AT AGE 65
Years of Service
Remuneration 25 30 35 40 45
77,044 55,904 38,040 43,217 48,420 53,971
102,044 46,202 54,165 62,030 69,107 76,534
127,044 59,640 70,290 80,842 89,795 99,096
152,044 73,077 86,415 99,655 110,482 121,659
177,044 77,354 91,547 105,642 117,066 128,839
202,044 77,354 91,547 105,642 117,066 128,839
The above table illustrates the Ten (10) Year Certain & Continuous
annuity amounts payable under the Company defined benefit pension plan
to its employees retiring at age 65 as of 1/1/99 as of normal
retirement age. The years of service credited for retirement benefits
for Company employees named in the Summary Compensation Table on page
7 would be as follows: C.D. McCormick, Jr. would have 42 years of service
upon reaching the age of 65. C.D. McCormick is not a participant under
this plan since he received a lump sum payment of his pension benefits
upon reaching the age of 65.
The calculation of pension benefits is based solely on the annual
salary of the participants.
The Pension Plan is an individually devised tax qualified plan
with the Bank's Trust Department serving as Trustee and Plan
Administrator. The actuarial valuation method used is the entry
age normal cost method and the entire cost is borne by the Bank.
Employees are eligible to participate in the Pension Plan following
completion of a one-year period of service as a salaried employee
and attainment of age 21. Under certain circumstances early retirement
with reduced annual benefits is permitted (but not before age 55).
Each eligible employee has received a summary Plan description and
copies of the Pension Plan and Trust Agreement are maintained in the
Bank's Trust Department.
FIVE-YEAR PERFORMANCE GRAPH*
The following graph and table compare the cumulative total stockholder
return on Southern Jersey Bancorp's Common Stock during the five-year
period ending on December 31, 1998, with (i) the cumulative total return
on the SNL Securities Corporate Performance Index (1) for publicly-traded
banks with less than $500 million in total assets between $500 million and
$1 billion in the Middle Atlantic area, and (iii) the cumulative total
return for all United States stocks traded on the NASDAQ Stock Market. The
comparison assumes the value of the investment in Southern Jersey Bancorp
Common Stock and each index was $100 on December 31, 1993, and assumes
further the reinvestment of dividends into the applicable securities. The
stockholder return shown on the graph and the table below is not necessarily
indicative of future performance.
Pursuant to the Proxy rules, this section of the proxy statement is
deemed "filed" with the SEC and is not incorporated by reference into
Southern Jersey Bancorp's Report on Form 10-K.
(stock Performance graph inserted here.)
1993 1994 1995 1996 1997 1998
SJBC 100 124 144 156 234 123
NASDAQ -Total US 100 98 138 170 209 293
SNL <$500M Bank
Asset-Size Index 100 108 126 189 323 295
SNL $500M-$1B
Bank Index 100 107 142 177 288 283
($100.00 invested in SJB in 1993 would return approximately $123 in 1998.)
(1) SNL Securities is a research and publishing firm specializing in the
collection and dissemination of data on the banking, thrift and financial
service industries.
(2) The Middle Atlantic area compromises the states of Delaware,
Pennsylvania, Maryland, New Jersey, and New York, the District of
Columbia and Puerto Rico.
TRANSACTIONS WITH MANAGEMENT
In the ordinary course of its banking and trust business, the Bank has
had and anticipates it will continue to have transactions with various
of its executive officers and directors and their associates, including
corporations in which such directors own a beneficial interest. To the
extent such transactions consisted of extensions of credit of any material
amount, such transactions have been made in the ordinary course of the
Bank's business, on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions
with other Bank customers, and do not involve more than the normal risk of
collectability or other unfavorable features.
The Company has paid a total of approximately $578,000 to McCormick Marine,
Inc. located in Bridgeton, New Jersey for repairs, security, advertising,
reconditioning, winterization, storage and sales commissions for selling of
repossessed marine collateral at its location. The storage of the
repossessed marine collateral is at cost and the rate of the sales
commissions is at 10% of the gross sales price which is the market rate
for selling boats of this type based upon comparisons to other vendors.
This company is owned by Jane McCormick, the daughter-in-law and
sister-in-law of Clarence D. McCormick and Clarence D. McCormick, Jr.,
respectively.
INDEPENDENT PUBLIC ACCOUNTANTS
Athey & Company, Certified Public Accountants, Professional Association,
was appointed by the Board of Directors as auditors of the Company and
the Bank for the year ended December 31, 1998, and has been selected to
conduct the audit of the Company for 1999. This firm does not have any
financial interest, direct or indirect, in the Company or the Bank.
Athey & Company, Certified Public Accountants, Professional Association,
performed services for the Bank in connection with their examination of
the 1998 financial statements, and also performed non-audit services at
the request of the Bank. During 1998, audit related services included
audit of the Bank's Trust Department and various other services.
There have been no changes in accountants and no disagreements
with accountants on accounting and financial disclosure.
Representatives of Athey & Company are not expected to be present at
the Annual Meeting and therefore will not be available to respond to
appropriate questions.
OTHER MATTERS
The Company does not intend to present any other matters for action
at the meeting, and the Company has not been informed that other persons
intend to present any other matters for action at the meeting. However,
if any other matters should properly come before the meeting, the persons
named in the accompanying form of proxy intend to vote thereon, pursuant
to the proxy, in accordance with the recommendation of the Company.
The Company will pay the expense in connection with printing,
assembling, and mailing to the shareholders entitled to vote,
the notice of meeting, this Proxy Statement and the accompanying form
of proxy. In addition to the use of the mails, proxies may be solicited
by directors, officers, or regular employees of the Company, personally
or by telephone or telegraph. Any proxy executed and returned to the
Company or Bank will be voted as specified by the shareholder.
DOCUMENTS INCORPORATED BY REFERENCE
1. ITEM 7 OF FORM 10-K, MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
2. SOUTHERN JERSEY BANCORP'S 1998 ANNUAL REPORT TO STOCKHOLDERS.
3. ITEM 3 OF FORM 10-K, STOCK HOLDINGS OF BANK'S EXECUTIVE MANAGEMENT.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1998, WILL BE SUPPLIED TO STOCKHOLDERS WITHOUT CHARGE ON OR
AFTER MARCH 31, 1999, UPON WRITTEN REQUEST DIRECTED TO PAUL J. RITTER,
III, 53 SOUTH LAUREL STREET, BRIDGETON, NEW JERSEY 08302.
