RARITAN BANCORP INC.
454 ROUTE 28
BRIDGEWATER, NEW JERSEY 08807
(908) 231-8100
March 25, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders (the "Annual Meeting") of Raritan Bancorp Inc. (the
"Company") to be held at the Raritan Valley Country Club, State
Highway No. 28, Somerville, New Jersey on Wednesday, April 22,
1998 at 10:00 a.m., New Jersey time.
As described in the enclosed Proxy Statement, matters
scheduled to be presented for shareholder action at the Annual
Meeting include the election of two directors, the approval of an
amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock, and the
ratification of the appointment of independent auditors for the
year ending December 31, 1998. During this meeting, we will also
report on the operations of The Raritan Savings Bank (the
"Bank"), the wholly-owned subsidiary of the Company. Detailed
information concerning the activities and operating performance
of the Company and the Bank during the year ended December 31,
1997 is contained in our Annual Report, which is enclosed.
Directors and officers of the Company, as well as representatives
of our independent auditors, will be present to respond to any
questions which shareholders may have.
We hope you will be able to attend this meeting in person.
Whether or not you expect to attend, we urge you to sign, date
and return the enclosed Proxy Card so that your shares will be
represented.
On behalf of the Board of Directors and all of the employees
of the Company and the Bank, I wish to thank you for your support
and interest. I look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ Arlyn D. Rus
-----------------------
Arlyn D. Rus
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
RARITAN BANCORP INC.
454 ROUTE 28
BRIDGEWATER, NEW JERSEY 08807
(908) 231-8100
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders (the "Annual Meeting") of Raritan Bancorp Inc. (the
"Company") will be held at the Raritan Valley Country Club, State
Highway No. 28, Somerville, New Jersey on Wednesday, April 22,
1998 at 10:00 a.m., New Jersey time, for the following purposes:
1. The election of two directors for a term of three years
each;
2. The approval of an amendment to the Company's
Certificate of Incorporation to increase the number of authorized
shares of Common Stock;
3. The ratification of KPMG Peat Marwick LLP as
independent auditors of the Company for the year ending December
31, 1998; and
Such other matters as may properly come before the Annual
Meeting or any adjournments thereof.
Pursuant to the Bylaws of the Company, the Board of
Directors has fixed March 9, 1998 as the voting record date for
the determination of shareholders entitled to notice of and to
vote at the Annual Meeting and any adjournments thereof. Only
holders of the Common Stock of the Company as of the close of
business on that date will be entitled to notice of and to vote
at the Annual Meeting or any adjournments thereof. A list of
shareholders entitled to vote at the Annual Meeting will be
available at 454 Route 28, Bridgewater, New Jersey, for a period
of ten days prior to the Annual Meeting and will also be
available for inspection at the meeting itself.
By Order of the Board of Directors
/s/ Helen J. Frangelli
-----------------------------------
Helen J. Frangelli
Secretary
Bridgewater, New Jersey
March 25, 1998
EACH SHAREHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE
ANNUAL MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
<PAGE>
RARITAN BANCORP INC.
454 ROUTE 28
BRIDGEWATER, NEW JERSEY 08807
(908) 231-8100
_________________________
PROXY STATEMENT
_________________________
ANNUAL MEETING OF SHAREHOLDERS
April 22, 1998
_________________________
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to shareholders of
Raritan Bancorp Inc. (the "Company") in connection with the
solicitation by the Board of Directors of proxies to be used at
the Annual Meeting of Shareholders (the "Annual Meeting") to be
held at the Raritan Valley Country Club, State Highway No. 28,
Somerville, New Jersey on Wednesday, April 22, 1998 at 10:00
a.m., New Jersey time, and any adjournments thereof. The 1997
Annual Report to Shareholders, including the consolidated
financial statements of the Company for the year ended December
31, 1997, accompanies this Proxy Statement and Proxy Card, which
are first being mailed to shareholders on or about March 25,
1998.
Regardless of the number of shares of Common Stock owned, it
is important that shareholders be represented by proxy or be
present in person at the Annual Meeting. Shareholders are
requested to vote by completing the enclosed Proxy Card and
returning it, signed and dated, in the enclosed postage-paid
envelope. Shareholders are urged to indicate the way they wish to
vote in the spaces provided on the Proxy Card. Proxies solicited
by the Board of Directors of the Company will be voted in
accordance with the directions given therein. Where no
instructions are indicated, signed proxies will be voted FOR the
election of each of the nominees for director named in this Proxy
Statement, FOR the approval of an amendment to the Company's
Certificate of Incorporation to increase the number of authorized
shares of Common Stock, and FOR the ratification of KPMG Peat
Marwick LLP as independent auditors of the Company for the year
ending December 31, 1998.
The Board of Directors knows of no additional matters that
will be presented for consideration at the Annual Meeting.
Execution of a proxy, however, confers on the designated
proxyholders discretionary authority to vote the shares in
accordance with their best judgement on such other business, if
any, that may properly come before the Annual Meeting or any
adjournments thereof.
A proxy may be revoked at any time prior to its exercise by
the filing of a written notice of revocation with the Secretary
of the Company, by delivering to the Company a duly executed
proxy bearing a later date, or by attending the Annual Meeting
and voting in person. However, if you are a shareholder whose
shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote
personally at the Annual Meeting.
The cost of solicitation of proxies in the form enclosed
herewith will be borne by the Company. Proxies may also be
solicited personally or by mail or telephone by the Company's
Directors, officers and regular employees, without additional
compensation therefor. The Company will also request persons,
firms and corporations holding shares in their names, or in the
name of their nominees, which are beneficially owned by others,
to send proxy material to and obtain proxies from such beneficial
owners, and will reimburse such holders for their reasonable
expenses in doing so. The Company has retained Kissel-Blake,
Inc., a proxy soliciting firm, to assist the Company in the
solicitation of proxies for the Annual Meeting, for a fee of
$4,500, plus out-of-pocket expenses.
<PAGE>
Voting Securities
The securities which may be voted at this Annual Meeting
consist of shares of common stock of the Company, par value $.01
per share (the "Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual
Meeting, except as described below. The close of business on
March 9, 1998 has been fixed by the Board of Directors as the
record date (the "Record Date") for the determination of
shareholders entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof. The total number of shares
of the Company's Common Stock outstanding on the Record Date
(exclusive of Treasury shares) was 2,388,289 shares.
The presence, in person or by proxy, of at least a majority
of the total number of shares of Common Stock outstanding and
entitled to vote is necessary to constitute a quorum at this
Annual Meeting. In the event there are not sufficient votes for
a quorum at the time of this Annual Meeting, or to carry any
matter as recommended by the Board, the Annual Meeting may be
adjourned in order to permit the further solicitation of proxies.
In accordance with the provisions of the Company's
Certificate of Incorporation, record holders of Common Stock who
beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote with
respect to the shares held in excess of the Limit. The Company's
Certificate of Incorporation authorizes the Board of Directors
(i) to make all determinations necessary to implement and apply
the Limit, including determining whether persons or entities are
acting in concert, and (ii) to demand that any person who is
reasonably believed to beneficially own Common Stock in excess of
the Limit supply information to the Company to enable the Board
to implement and apply the Limit.
Voting Procedures and Method of Counting Votes
As to the election of Directors, the proxy card being
provided by the Board of Directors enables a shareholder to vote
FOR the election of the nominees proposed by the Board, or to
WITHHOLD AUTHORITY to vote for one or more of the nominees being
proposed. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, Directors are elected by a plurality of
votes cast, without regard to either broker non-votes, or proxies
as to which authority to vote for one or more of the nominees
being proposed is withheld.
As to the approval of an amendment to the Company's
Certificate of Incorporation to increase the number of authorized
shares of Common Stock, by checking the appropriate box, a
shareholder may: (i) vote FOR the item; (ii) vote AGAINST the
item; or (iii) ABSTAIN from voting on such item. Under the
Delaware General Corporation Law, the approval of this matter
shall be determined by a majority of the votes entitled to be
cast. Accordingly, broker non-votes and proxies marked "ABSTAIN"
will be counted as votes against this item.
As to the ratification of KPMG Peat Marwick LLP as
independent auditors of the Company, by checking the appropriate
box, a shareholder may: (i) vote FOR the item; (ii) vote AGAINST
the item; or (iii) ABSTAIN from voting on such item. Under the
Company's Certificate of Incorporation and Bylaws, the
ratification of this matter shall be determined by a majority of
the votes cast, without regard to broker non-votes, or proxies
marked "ABSTAIN."
Proxies solicited hereby will be returned to the Company,
and will be tabulated by inspectors of election designated by the
Board, who will not be employed by, or a director of, the Company
or any of its affiliates.
<PAGE>
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of 5% of the Company's
Common Stock are required to file certain reports regarding such
ownership with the Company and with the Securities and Exchange
Commission (the "SEC"), in accordance with the Securities
Exchange Act of 1934 (the "Exchange Act"). The following table
sets forth information as of the Record Date, as to shares of
Common Stock beneficially owned by each person who was the owner
of more than five percent (5%) of the Company's outstanding
shares of Common Stock as of March 9, 1998.
<TABLE>
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership of Class
- --------------------------------------------------------
<S> <C> <C>
Raritan Savings Bank Employee 220,977 (1) 9.3%
Stock Ownership Plan
454 Route 28
Raritan, New Jersey
Arlyn D. Rus 223,495 (2) 9.1
c/o Raritan Bancorp Inc.
454 Route 28
Raritan, New Jersey
Thomas F. Tansey 124,211 (3) 5.1
c/o Raritan Bancorp Inc.
454 Route 28
Raritan, New Jersey
</TABLE>
_____________________________
(1) The ESOP Administrative Committee, consisting of outside
directors of the Bank, administers the Bank's Employee Stock
Ownership Plan (the "ESOP"). Under the terms of the ESOP, shares
of Common Stock allocated to the account of employees are voted
in accordance with the instructions of the respective employees.
Unallocated shares are voted by the ESOP Trustee as directed by
the Administrative Committee. The Administrative Committee shall
vote the unallocated shares in a manner that reflects the
directions received from employees as to allocated shares, unless
their fiduciary duties require otherwise. As of the Record Date,
188,527 shares of Common Stock were allocated under the ESOP and
32,450 shares remained unallocated.
(2) Includes options to purchase 78,625 shares of Common Stock
which are exercisable within 60 days of the Record Date. Also
includes 18,000 shares granted under the 1997 Stock Benefit Plan
subject to future vesting but as to which voting may currently be
directed and 24,366 shares allocated to Mr. Rus' account under
the ESOP.
(3) Includes options to purchase 52,625 shares of Common Stock
which are exercisable within 60 days of the Record Date. Also
includes 17,171 shares allocated to Mr. Tansey's account under
the ESOP.
<PAGE>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1 - ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the number of
Directors is currently set at six. Each of the members of the
Board of Directors of the Company also serves on the Board of
Directors of The Raritan Savings Bank (the "Bank"), the Company's
wholly-owned subsidiary. Directors are elected for staggered
terms of three years each, with the term of office of only one
class of Directors expiring in each year. Directors serve until
their successors are elected and qualified.
The nominees proposed by the Board for election at the
Annual Meeting are Peter S. Johnson and Arlyn D. Rus. Each of
these nominees is presently a Director of the Company. Set forth
below is certain information concerning the nominees and the
other members of the Board as of March 9, 1998. The Board
believes that such nominees will stand for election and will
serve if elected as Director. However, if any of the nominees
proposed by the Board of Directors fails to stand for election or
is unable to accept election, the proxies will be voted for the
election of such other person or persons as the Board of
Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
ELECTION OF THE NOMINEES WHOSE NAMES APPEAR BELOW.
NOMINEES
<TABLE>
NOMINEES
Term to Expire Amount and Nature of
Name, Principal Occupation and Following The Year Beneficial Ownership Percent
Business Experience for Past 5 Years Ending December 31, of Stock (1) of Class
<S> <C> <C> <C>
Peter S. Johnson, Age 55 2000 35,650(2) 1.5
Mr. Johnson has served as a Director of the
Company and the Bank since August, 1996.
He is a partner in the public accounting
firm of Gillen & Johnson PA and is the former
Chairman of the Board of Manville Savings Bank.
Arlyn D. Rus, Age 57 2000 223,495(3) 9.1
Mr. Rus has served as Chairman, President
and Chief Executive Officer of the Company
since its formation in 1987. He has served
as Director, President and Chief Executive
Officer of the Bank since 1971. Mr. Rus
currently serves as a member of the Board
of Directors of the Savings and Community
Bankers of New Jersey, and as Chairman
of the Board of Directors of Somerset
Health Care Corporation.
<PAGE>
CONTINUING DIRECTORS
William T. Anderson, M.D., Age 62 1998 41,568(2)(4) 1.7%
Dr. Anderson has served as a Director
of the Bank since 1981 and of the
Company since its formation in 1987.
He is a physician with a family practice
at Anderson and Jobanputra, M.D. He is
also a director of Somerset Health
Care Affiliates.
William W. Crouse, Age 55 1998 17,650(2) .7%
Mr. Crouse has served as a Director of the
Company and the Bank since April, 1995.
He is Vice Chairman and General Partner
of HealthCare Investment Corporation, and
he has 25 years experience in the health
care industry.
William T. Kelleher, Jr., Age 46 1999 53,698(2)(5) 2.2%
Mr. Kelleher, Jr. has served as a Director
of the Bank since 1983 and of the Company
since its formation in 1987. He is a partner
in the law firm of Kelleher and Moore, and
has been a municipal court judge in the
Borough of Somerville (New Jersey) since
1983 and in the Township of Branchburg since
1990.
Thomas F. Tansey, Age 53 1999 124,211(6) 5.1
Mr. Tansey has served as Executive Vice
President, Chief Operating Officer and
Treasurer of the Company since its formation
in 1987. He has served as Executive Vice
President, Chief Operating Officer and
Treasurer of the Bank since May 1984.
He has served as a Director of the Bank
since January, 1986 and of the Company
since its formation in 1987.
NAMED EXECUTIVE OFFICER NOT A DIRECTOR
John J. Lukens, Age 50 -- 21,324(7) .9
Mr. Lukens has served as Senior Vice
President of the Company and Senior
Vice President and Senior Lending Officer
of the Bank since June, 1992. Prior to
June, 1992, he served as a Credit Officer
at National Westminster Bank.
All directors and executive officers
as a group (11 persons) -- 849,929(8) 32.8%
</TABLE>
- -----------------------
(1) Unless otherwise indicated, each person effectively
exercises sole (or shared with spouse) voting and dispositive
power as to the shares reported.
(2) Includes 13,150 shares that may be acquired pursuant to the
exercise of options.
(3) Includes 3,316 shares owned of record by Mr. Rus' wife,
78,625 shares that may be acquired pursuant to presently
exercisable stock options, 18,000 shares granted under the 1997
Stock Benefit Plan subject to future vesting but as to which
voting may currently be directed, and 24,366 shares allocated to
Mr. Rus' account under the Bank's ESOP.
(4) Includes 1,582 shares owned of record by Dr. Anderson's
wife.
(footnotes continued on next page)
<PAGE>
(5) Includes 4,162 shares owned of record by Mr. Kelleher as
custodian for minor children.
(6) Includes 52,625 shares that may be acquired pursuant to
presently exercisable stock options, and 17,171 shares allocated
to Mr. Tansey's account under the Bank's ESOP.
(7) Includes 16,750 shares that may be acquired pursuant to
presently exercisable stock options, and 3,899 shares allocated
to Mr. Lukens' account under the Bank's ESOP.
(8) Includes 206,162 shares that may be acquired pursuant to
presently exercisable stock options, 220,977 shares held by the
ESOP, and 146,730 shares owned by Directors Emeritus.
Meetings of the Board of Directors and Committees of the Board
The Board of Directors of the Company has established an
audit committee and a nominating committee. The Bank maintains
an audit committee, nominating committee, personnel committee and
investment committee. The Chairman, President and Chief
Executive Officer serves as an ex officio member of all
committees except the audit committee.
The Board of Directors of the Company and the Bank met
fifteen times during 1997. No Director attended fewer than 75%
in the aggregate of the total number of Board meetings held and
the total number of committee meetings on which he served during
1997.
The audit committee consists of Messrs. Anderson, Crouse,
Johnson and Kelleher, Jr., and meets no less frequently than on a
quarterly basis. The audit committee reviews audit performance
and evaluates policies and procedures relating to auditing
functions and controls. The audit committee met four times in
1997.
The nominating committee consists of Messrs. Anderson,
Crouse, Johnson and Kelleher, Jr., and meets semi-annually to
appoint officers and to nominate directors for election by the
shareholders. While the committee will consider nominees
recommended by shareholders, it has not actively solicited
recommendations from shareholders. Nominations by shareholders
must comply with certain procedural and informational
requirements set forth in the Company's Bylaws. See "Advance
Notice of Business to be Conducted at an Annual Meeting."
The Bank's personnel committee consists of Messrs. Anderson,
Crouse, Johnson and Kelleher, Jr. The personnel committee
reviews compensation, officer promotions, benefits and other
matters of personnel policy and practice. The personnel
committee met two times in 1997.
The Bank's investment committee consists of Messrs. Crouse,
Kelleher, Jr., Rus and Tansey, and meets monthly. The investment
committee is responsible for establishing investment policies for
the Bank.
In addition, the Bank has a trust committee, conflict of
interest committee, mortgage and real estate committee, site and
building committee and planning committee, which meet
periodically.
Directors' Compensation
Fees. Directors of the Bank are paid an annual retainer
fee of $5,000, as well as a fee of $800 per board meeting
attended and $200 per committee meeting attended. In addition,
Directors are reimbursed for any amount of out-of-pocket expenses
incurred in attending meetings. Directors do not receive fees
from the Company for services on the Company's Board.
Director Deferred Compensation Plan. The Bank has restated
its deferred compensation plan for non-employee Directors of the
Bank (the "Director Plan"). Under the restated Director Plan, a
participating Director may defer up to 100% of his monthly board
fees and/or retainer into the Director Plan. Amounts deferred
earn interest at an annual rate of 12%, compounded monthly. At
retirement, the benefit under the Director Plan is payable in the
form of a monthly annuity for the period set forth in the
Director's joinder agreement, generally for 10 years (the "payout
period"). In the event of the Director's disability prior to
attainment of his benefit eligibility date, the Director may
request that the Board permit him to receive an immediate
disability benefit equal to the annuitized value of the
Director's deferral account, payable monthly over the payout
period. In the event of a Director's death prior to attainment
of his benefit eligibility date, the Director's beneficiary is
entitled to a monthly survivor benefit payable for
<PAGE>
the payout period. The Director Plan also provides a $10,000
death benefit payable to the executive's beneficiary. Presently,
all Directors are participating in the Director Plan.
Stock Options for Outside Directors. Under the 1993 Stock
Option Plan for Outside Directors, each Outside Director of the
Company who was an Outside Director of the Company or the Bank at
the time of adoption of the Plan, received a non-statutory option
to purchase 11,250 shares of Common Stock at an exercise price
equal to the fair market value of the Common Stock at the time of
the adoption of the plan. To the extent options for shares are
available, each subsequent Outside Director will be granted,
effective as of the date on which such subsequent Outside
Director is qualified and first begins to serve as an Outside
Director, a non-statutory stock option to purchase 11,250 shares
of Common Stock, or such lesser number of shares as remain in the
plan, at an exercise price equal to the then fair market value of
the Common Stock. An aggregate of 67,500 shares of Common Stock
are reserved for issuance pursuant to the exercise of options
granted under the 1993 Stock Option Plan for Outside Directors.
Options as to 56,250 shares of Common Stock reserved for issuance
under this plan have been granted as of the date of this Proxy
Statement. Directors are also eligible to receive option grants
under the 1997 Long-Term Incentive Stock Benefit Plan. Each
Outside Director has been granted options to purchase an
aggregate of 1,900 shares of Common Stock (an option as to 900
shares granted in 1996 and an option as to 1,000 shares granted
in 1997) under this plan, with the exercise price equal to the
fair market value at the date of grant. Director options may be
exercised in whole or in part for a period of ten years from the
date of grant or one year following the date the Outside Director
ceases to be a Director. The exercise price of a Director's
option may be paid in cash or stock.
Executive Compensation
Summary Compensation Table. The following table sets forth
the cash compensation paid by the Bank, for services rendered
during the years ended December 31, 1997, 1996 and 1995 to the
Chief Executive Officer, and other executive officers of the Bank
who received an amount in salary and bonus in excess of $100,000
in the year ended December 31, 1997 (the "Named Executive
Officers").
<TABLE>
Annual Compensation Long-Term Compensation
Awards Payouts
Other Annual Restricted Options/ All Other
Name and Year Ended Compensation Stock SARS LTIP Compensation
Principal Position December 31 Salary(1) Bonus (2) Awards (#)(4) Payouts (5)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Arlyn D. Rus 1997 $207,200 $50,000 $-- $ -- -- $-- $37,306
Chairman, 1996 198,750 43,500 -- 276,000(3) 16,500(4) -- 33,341
President and Chief 1995 190,500 33,750 -- -- -- -- 32,325
Executive Officer
Thomas F. Tansey 1997 $141,900 $30,000 $-- -- -- $-- $33,179
Executive Vice 1996 136,250 26,000 -- -- -- -- 29,381
President, Chief 1995 130,500 20,250 -- -- 6,000(4) -- 26,881
Operating Officer
and Treasurer
John J. Lukens
Senior Vice President 1997 $103,750 $18,500 -- -- 3,500(5) $-- $19,570
1996 99,000 16,706 -- -- 3,000(4) -- 17,239
1995 95,000 13,360 -- -- -- -- 13,199
</TABLE>
____________________________________
(1) Salary amounts for Messrs. Rus and Tansey include directors
fees in the amounts of $11,250, $11,250, and $10,500 for the
years 1997, 1996, and 1995, respectively.
(2) Perquisites did not exceed the lesser of $50,000 or 10% of
the individual's salary and bonus for any of the years. Personal
benefits include an automobile provided by the Bank to Messrs.
Rus and Tansey, and club membership for Mr. Rus.
(3) Relates to an award as to 18,000 shares of Common Stock
granted pursuant to the 1997 Stock Benefit Plan in December,
1996. The market value per share of the Common Stock was $15.33
on the date of grant. Such award vests in six equal
installments, although voting may
<PAGE>
currently be directed, and will be 100% vested upon termination
of employment due to death, disability or normal retirement or
following a change in control. Pending distribution or
forfeiture, the recipient will also receive dividends declared
with respect to the shares.
(4) Relates to options granted pursuant to the 1997 Stock
Benefit Plan, which options are exercisable in three equal
installments commencing December 19, 1997 and are fully
exercisable following a change in control.
(5) Relates to an option granted under the 1997 Stock Benefit
Plan, which option is exercisable in three equal installments
commencing December 19, 1998.
(6) Reflects the Bank's matching contributions to the Employee's
Deferred Compensation 401(k) Plan with respect to Mr. Rus in the
amounts of $4,570, $4,750, and $4,620, with respect to Mr.
Tansey in the amounts of $4,750, $4,750 and $4,620, and with
respect to Mr. Lukens in the amounts of $2,997, $2,970 and $2,832
for the years 1997, 1996 and 1995, respectively. Includes the
market value of shares at December 31 of each year which have
been allocated to the employee's account pursuant to the ESOP
during such fiscal year; for Mr. Rus in the amounts of $32,556,
$28,591 and $27,705 , for Mr. Tansey in the amounts of $28,429,
$24,631 and $22,261, and for Mr. Lukens in the amounts of
$16,573, $14,269 and $10,367 for the years 1997, 1996 and 1995,
respectively.
Report of the Compensation Committee on Executive Compensation
Under rules established by the SEC, the Company is required
to provide certain data and information in regard to the
compensation and benefits provided to its Chief Executive Officer
and other executive officers. The disclosure requirements for
the Chief Executive Officer and other executive officers include
the use of tables and a report explaining the rationale and
considerations that led to fundamental executive compensation
decisions affecting those individuals. The Chief Executive
Officer and other executive officers do not receive compensation
from the Company. Consequently, in fulfillment of this
requirement, the Compensation Committee of the Bank's Board of
Directors has prepared the following report for inclusion in this
proxy statement.
The Compensation Committee annually reviews the performance
of the Chief Executive Officer and other executive officers and
approves changes to base compensation as well as the level of
bonus, if any, to be awarded. In addition, the Compensation
Committee determines the budget for salaries for other officers,
and reviews the report of the Chief Executive Officer regarding
the allocation of compensation of such other officers. In
determining whether the base salary of the Chief Executive
Officer, Executive Vice President and Senior Vice President
should be increased, the budget for other officers and whether to
approve the Chief Executive Officer's allocation of such amounts,
the Compensation Committee takes into account individual
performance, performance of the Company, the size of the Company
and the complexity of its operations. In evaluating changes to
compensation, the Compensation Committee uses the 1997 Northeast
Banking Industry Compensation Industry Survey developed by KPMG
Peat Marwick for purposes of determining the competitive market
for compensation paid to top executives of thrifts with total
assets in the range of the Company's total asset size and
performance results comparable to those of the Company.
While the Compensation Committee does not use strict
numerical formulas to determine changes in compensation for the
Chief Executive Officer, Executive Vice President and Senior Vice
President, and while it weighs a variety of different factors in
its deliberations, it has emphasized and will continue to
emphasize earnings, profitability, capital position and income
level, and return on average shareholder's equity as factors in
setting the compensation of the Chief Executive Officer,
Executive Vice President and Senior Vice President. In this
regard, net income increased by 25.7% in the aggregate, and
21.3% on a per share (diluted) basis, in 1997 compared to 1996,
return on average equity was 13.1% in 1997 compared to 11.7% in
1996, an increase of 12.1%, and shareholders' equity increased
9.2% in the aggregate while book value per share increased $.56,
or 4.5% in 1997 compared to 1996. Other non-quantitative factors
considered by the Compensation Committee included general
management oversight of the Bank, the quality of communication
with the Board of Directors, and the productivity of employees.
Finally, the Compensation Committee considered the standing of
the Bank with customers and the community, as evidenced by the
level of customer/community complaints and compliments. While
each of the quantitative and non-quantitative factors described
above was considered by the Compensation Committee, such factors
were not assigned a specific weight in evaluating the performance
of the Chief Executive Officer, Executive Vice President and
Senior Vice President. Rather, all factors were considered, and
based upon the effectiveness of such officers in addressing each
of the factors, and the range of compensation paid to officers of
other institutions, the Compensation Committee approved an
increase in the base salary of the Chief Executive Officer,
Executive Vice President and Senior Vice President. On the basis
of the foregoing, the Compensation Committee approved salary
increases totaling $64,650 for the Bank's 25 officers, bringing
fiscal 1998 total base compensation for all officers to
$1,602,600. Also the Compensation Committee approved short-term
incentive awards (cash bonuses) totaling $216,475 to 26 officers,
with $98,500 awarded to Named Executive Officers, including
<PAGE>
$50,000 to the Chief Executive Officer. Stock options totaling
17,600 shares of Common Stock were granted to 12 officers, with
options as to 3,500 shares of Common Stock granted to a Named
Executive Officer.
This report has been provided by the Compensation Committee
consisting of outside Directors: William T. Kelleher, Jr.,
William T. Anderson, M.D., William W. Crouse and Peter S.
Johnson.
Stock Performance Graph. The following graph compares the
cumulative total return including dividends on (a) the Company's
Common Stock for the five year period ended December 31, 1997,
(b) stocks including in the Nasdaq Total Return Index for the
five year period ended December 31, 1997, and (c) stocks included
in the SNL Thrift Index for the five year period ended December
31, 1997.
[GRAPH]
Employment Agreements. The Company and the Bank entered
into amended employment agreements with Arlyn D. Rus, Chairman,
President and Chief Executive Officer, and Thomas F. Tansey,
Executive Vice President, Chief Operating Officer and Treasurer,
in January 1990. The employment agreements each provided for a
five-year term. Commencing on the third anniversary date of each
agreement and continuing each anniversary date thereafter, unless
<PAGE>
prior notice of non-renewal is given, each agreement
automatically extends for an additional year so that the
remaining term shall be three years. The current base salary
under the agreements, which may be increased at the discretion of
the Board of Directors, is $202,500 for Mr. Rus and $135,000 for
Mr. Tansey. In addition to the base salary, each agreement
provides, among other things, for participation in stock option
plans and other fringe benefits applicable to executive
personnel.
Each agreement provides for termination by the Company and
the Bank for "cause," as defined in the agreements, at any time.
In the event the Company and the Bank choose to terminate the
executive's employment for reasons other than for cause, or in
the event of their resignation from the Company and Bank upon
failure to re-elect them to their current offices or because of a
material lessening of their functions, duties or
responsibilities, or in the event of a liquidation, dissolution,
consolidation, or merger in which the Company or Bank is not the
resulting institution, or upon breach of the agreement by the
Company or the Bank, the officer or, in the event of death, his
beneficiary, would be entitled to a lump sum cash payment equal
to the greater of (i) thirty-six times his highest monthly rate
of compensation or (ii) the payments owed for the remaining term
of the agreement. If termination of employment follows a change
in control of the Company, as defined in the agreements, each
officer would be entitled to a severance payment equal to thirty-
six times the highest monthly compensation paid to him under the
contract plus a "special retirement benefit." The special
retirement benefit would be an additional payment in an amount
intended to compensate the officer for reduced retirement
benefits under the Bank's pension plan in the event of his
termination following a change of control. The change of control
severance payment to Mr. Rus and Mr. Tansey, based on the annual
compensation and special retirement benefit, would be $907,905
and $881,241 respectively. The Bank and the Company have agreed
to indemnify the officers for the amount of any excise tax
imposed on such payments under Section 280G of the Internal
Revenue Code of 1986. The agreements also permit Mr. Rus and Mr.
Tansey to terminate their employment voluntarily and receive a
severance payment equal to the highest annual rate of
compensation paid to the officer under such agreement for a one-
year period or until he obtains other employment, if earlier.
Special Termination Agreement. The Company has entered
into a thirty-six month special termination agreement with John
J. Lukens, Senior Vice President. The agreement renews for an
additional month at the end of each month so that the term of the
agreement continues to be thirty-six months unless prior written
notice of non-extension is given. The agreement provides that at
any time following a change in control of the Company as defined
therein, should the Company or the Bank terminate the executive's
employment with the Company or the Bank, for any reason other
than "cause," or if the executive terminates his employment
following a demotion, loss of title, office, significant
authority, a reduction in annual compensation, or relocation of
his principal place of employment, he would be entitled to
receive a payment in an amount equal to the product of (a) the
monthly rate of base annual salary paid to him by the Company and
the Bank immediately prior to his termination, times (b) the
number of months remaining under the agreement. Upon termination
for cause, no payments or benefits are due to the executive;
however, if termination of employment following a change in
control is purported to be for cause, which is disputed, the
Company shall continue to provide the executive with salary and
other benefits and the dispute shall be settled by arbitration.
If cause is determined in arbitration to have existed, the
executive shall return cash payments made to him.
The executive would also be entitled to the continuation of
life, health and disability insurance coverage maintained by the
Bank at the time of such termination for the earlier of the
expiration of the number of months remaining under the agreement
or his employment by another employer. If a change in control
were to occur, and assuming it occurred on December 31, 1997
followed by the termination of Mr. Lukens' employment, the
aggregate cash amount payable to him under the special
termination agreement as severance payments in addition to other
non-cash benefits provided for under the agreement would have
been approximately $311,250.
Retirement Plan. The Bank maintains and funds a tax-
qualified, non-contributory defined benefit pension plan for its
employees, which is administered by the Retirement System Group
Inc. All full-time employees aged twenty-one (21) or older who
have completed at least one year of service participate in the
plan. The plan provides an annual benefit payable at age 65
equal to two percent of the employee's "average annual salary"
(the average of the highest three years base salary) multiplied
by credited service, up to a maximum of thirty (30) years, and
reduced by a portion of the employee's primary Social Security
benefit. The maximum annual benefit is 60% of the average annual
<PAGE>
salary, reduced by a portion of the employee's primary social
security benefit. The table below presents annual benefits under
the retirement plan assuming retirement during 1997, at various
levels of compensation and years of credited service. At
December 31, 1997, Messrs. Rus, Tansey and Lukens had 35, 15, and
5 years of credited service, respectively, under this retirement
plan.
<TABLE>
Amount of Annual Retirement Benefit
With Credited Service (in Years) of:
Annual Compensation 15 20 25 30
<S> <C> <C> <C> <C>
$100,000 26,021 34,695 43,369 52,042
120,000 32,021 42,695 53,369 64,042
140,000 38,021 50,695 63,369 76,042
160,000 44,021 58,695 73,369 88,042
180,000 50,021 66,695 83,369 100,042
200,000 56,021 74,695 93,369 112,042
220,000 62,021 82,695 103,369 130,000
</TABLE>
Compensation covered by the retirement plan is salary
(before reducing such compensation pursuant to a deferral
election of the employee under any plan of the Bank established
in accordance with the provisions of Section 401(k) or Section
125 of the Internal Revenue Code of 1986) received from the Bank,
excluding bonuses, overtime, commissions, director's fees or
other forms of special compensation. Under the Code, the maximum
annual compensation which may be taken into account for
calculating contributions under qualified defined benefit plans
is $160,000, and the maximum annual benefit payable under the
retirement plan is $130,000 (in each case as adjusted from time
to time by the Internal Revenue Service).
Supplemental Executive Retirement Plan. The Bank has
restated its two non-tax qualified retirement plans for certain
of its executives ("SERP"). The SERP supplements the benefit
available to the Bank's named executive officers (i.e., Messrs.
Rus, Tansey and Lukens) under the Bank's tax-qualified plans,
i.e., the Retirement Plan, 401(k) Plan and ESOP. The SERP is
designed to provide a benefit (less the benefits estimated to be
provided under the Bank's tax-qualified plans) that is equal to a
percentage of the executive's final salary (75% in the case of
Mr. Rus and Mr. Tansey, 60% in the case of Mr. Lukens). The
benefit is payable over a period of 15 years. In the case of an
executive's involuntary termination of employment for any reason
(other than for cause, death or disability) or voluntary
termination of employment within 36 months of a change in control
and following (i) a material change in the executive's functions,
duties or responsibilities which would cause the executive's
position to become one of lesser responsibility, importance or
scope, (ii) a relocation of the executive's principal place of
employment by more than 30 miles, or (iii) a material reduction
in the executive's perquisites or benefits, the executive is
entitled to a benefit payable at his benefit age designated in
his joinder agreement ("Benefit Age") equal to the full
retirement benefit that he would have received had he remained in
the employ of the Bank and retired at his Benefit Age. In the
event of the executive's termination of employment due to
disability, the executive may request to receive an immediate
disability benefit, in lieu of a retirement benefit, and such
benefit will be payable within 30 days following board of
director's approval of the executive's request, in a lump sum.
In the event of the executive's death while employed, the SERP
provides a survivor's benefit equal to the benefit payable to the
executive as if the executive remained employed until his Benefit
Age. The SERP also provides a $10,000 death benefit payable to
the executive's beneficiary. In the event that the executive
makes a timely election, he can receive his retirement benefit in
a lump sum instead of an annuity. The Bank has established a
rabbi trust which has purchased life insurance policies on the
executive's life in order to ensure that the Bank can satisfy its
obligation under the SERP. The Bank makes annual contributions
in an amount equal to the expense accrual under the SERP, into a
secular trust for the benefit of each executive. Amounts accrued
prior to the restatement of the SERP were transferred to the
secular trust. The
<PAGE>
estimated pre-tax benefit payable annually upon retirement at the
executive's benefit eligibility date is $95,374, $47,374 and
$31,658 for Messrs. Rus, Tansey and Lukens, respectively. The
Bank's contributions with respect to the SERP for 1997 were
$61,974, $17,981 and $5,023 for Messrs. Rus, Tansey and Lukens,
respectively.
Incentive Stock Option Plans. The Board of Directors of the
Company has established stock option plans which provide
discretionary awards to its officers and key employees. The
grant of awards to employees under the option plans is determined
by a committee of the Board of Directors consisting of "Non-
Employee" directors (the "Option Plan Committee").
Set forth in the table that follows is information relating
to options granted under the Stock Option Plans to the Named
Executive Officers during 1997.
<TABLE>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
Percent of Total
Options Granted
to Employees in Exercise or Expiration
Name Options Granted FY 1996 Base Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Arlyn D. Rus -- --% $-- -- $-- $--
Thomas F. Tansey -- --% $-- -- $-- $--
John J. Lukens 3,500(1) 19.9% $27.25 12/19/08 $ 59,981 $152,003
</TABLE>
____________________________________
(1 ) These options become exercisable in three equal installments
commencing December 19, 1998.
Set forth below is certain information concerning options
outstanding to the Named Executive Officers at December 31, 1997
and the options exercised by Named Executive Officers during
1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FICSAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Fiscal Year-End Fiscal Year-End(1)
Shares Acquired Value
Name Upon Exercise Realized Exercisable/Unexercisable(#) Exercisable/Unexercisable($)
<S> <C> <C> <C> <C>
Arlyn D. Rus 56,250 $937,500 78,625/11,000 $1,595,703/$139,370
Thomas F. Tansey 33,750 562,500 52,625/4,000 $1,085,934/$50,680
John J. Lukens -- -- 16,750/5,500 $355,705/$27,965
</TABLE>
(1) Equals the difference between the aggregate exercise price
of such options and the aggregate fair market value of the shares
of Common Stock that would be received upon exercise, assuming
such exercise occurred on December 31, 1997, at which date the
last sale price of the Common Stock as quoted on the Nasdaq
National Market was $28.00.
<PAGE>
Transactions With Certain Related Persons
The Bank offers residential mortgage loans and consumer
loans to its employees in the ordinary course of business and at
a preferred rate, which is 1/2% below the rate otherwise charged.
The Bank requires that an eligible employee have been with the
Bank for a minimum of one year. If the employee no longer works
for the Bank, the rate charged is increased to the market rate in
effect at the inception of the loan. The Bank also charges
eligible employees 1/2% percentage point less than the
origination fee normally charged to its customers on loans.
Prior to November 1996, the Bank was not permitted under federal
banking laws to make loans on preferential terms to executive
officers or directors. All loans made by the Bank to its
employees, executive officers and Directors and their immediate
family members and related interests, have been, and will be,
made in the ordinary course of business, and except as set forth
above, on substantially the same terms as those prevailing at the
time for comparable transactions with other persons, and do not
involve more than the normal risk of collectibility or present
other unfavorable features.
The Bank has utilized the services of the Kelleher & Moore
law firm to provide general legal services during 1997. William
T. Kelleher, Jr., a Director, is a member of that law firm.
During 1997, the Bank paid $84,612 in fees to Kelleher & Moore,
and the Bank has and will continue to utilize the services of
other law firms.
PROPOSAL 2 -APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
The Company is currently authorized to issue 3,500,000
shares of Common Stock, par value $.01 per share. The Company's
Board of Directors recommends that the Company's shareholders
approve an amendment (the "Amendment") to the Company's
Certificate of Incorporation that would increase the number of
authorized shares of the Company's Common Stock from 3,500,000
shares to 6,500,000 shares. The number of authorized shares of
preferred stock will remain at 2,000,000 shares. If the Amendment
is approved by the Company's shareholders, ARTICLE FOURTH,
Paragraph A of the Company's Certificate of Incorporation will
read as follows:
FOURTH: A. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is eight
million five hundred thousand (8,500,000) consisting of:
1. Two million (2,000,000) shares of Preferred Stock, par
value one cent ($.01) per share (the "Preferred Stock"); and
2. Six million five hundred thousand (6,500,000) shares of
Common Stock, par value one cent ($.01) per share (the "Common
Stock").
The Company proposes to increase the number of authorized
shares of its Common Stock to 6,500,000 shares to provide
additional shares for general corporate purposes, including stock
dividends and splits, raising additional capital, issuances
pursuant to employee and shareholder stock plans and possible
future acquisitions. There are no present plans, understandings,
or agreements for issuing a material number of additional shares
of Common Stock from the currently authorized shares of Common
Stock or the additional shares of stock proposed to be authorized
pursuant to the Amendment. The Board of Directors believes that
an increase in the total number of shares of authorized Common
Stock will better enable the Company to meet its future needs.
The Company's issuance of shares of Common Stock, including
the additional shares that will be authorized if the proposed
Amendment is adopted, could be used to dilute the present equity
ownership position of current holders of Common Stock and may be
made without shareholder approval. The additional authorized but
unissued shares of the Company's Common Stock that would become
available if the Amendment is approved could be used to make a
change in control of the Company more difficult and expensive.
Under certain circumstances, such shares could be used
<PAGE>
to create impediments or to frustrate persons seeking to cause a
takeover or to otherwise gain control of the Company. Such shares
could be sold to purchasers who might side with the Board in
opposing a takeover bid that the Board determines not to be in
the best interests of the Company and its shareholders. Although
the purpose of seeking an increase in the number of authorized
shares of Common Stock is not intended for antitakeover purposes,
SEC rules require disclosure of existing provisions in the
Company's Certificate of Incorporation and bylaws which could
have an antitakeover effect. These include provisions: (a)
limiting voting rights of beneficial owners of more than 10% of
the Common Stock; (b) permitting directors to be removed during
their term only for cause and upon the vote of 80% of the
shareholders; (c) allowing the Board exclusively to determine the
number of directors; (d) providing for the election of directors
on a staggered-term basis; (e) requiring an 80% shareholder vote
for certain mergers and other business combinations which have
not received the approval of a majority of the Disinterested
Directors (as defined); (f) requiring any shareholder who intends
to nominate a candidate for election to the Board of Directors or
to raise new business at a shareholder meeting, to give 90 days
advance notice to the Secretary of the Company; (g) allowing
special meetings of shareholders to be called only by the Board
of Directors; (h) requiring shareholder action to be effected at
an annual or special meeting but not by the written consent of
shareholders; and (i) requiring an 80% shareholder vote to alter,
amend, or repeal the Bylaws.
The Board of Directors believes that, as proposed, the
approval of the Amendment is in the best interests of the
shareholders of the Company. Approval of this proposal requires
a vote in favor of the Amendment by the holders of a majority of
the Company's outstanding shares of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE
THE COMPANY'S AUTHORIZED SHARES OF COMMON STOCK.
PROPOSAL 3 - RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the year ended
December 31, 1997 were KPMG Peat Marwick LLP. The Company's Board
of Directors has reappointed KPMG Peat Marwick LLP to continue as
independent auditors for the Company for the year ending December
31, 1998, subject to ratification of such appointment by the
shareholders. Representatives of KPMG Peat Marwick LLP are
expected to attend the Annual Meeting. They will be given the
opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions from
shareholders present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY FOR THE YEAR ENDING DECEMBER
31, 1998.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
To be considered for inclusion in the Company's proxy
statement in connection with the annual meeting of shareholders
to be held following the year ending December 31, 1998, a
shareholder proposal must be received by the Secretary of the
Company, at the address set forth on the first page of this Proxy
Statement, no later than November 25, 1998. Any shareholder
proposal submitted to the Company will be subject to SEC Rule
14a-8 under the Exchange Act.
<PAGE>
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice
procedure for certain business, or nominations to the Board of
Directors, to be brought before an annual meeting. In order for a
shareholder to properly bring business before an annual meeting,
or to propose a nominee to the Board, the shareholder must give
written notice to the Secretary of the Company not less than
ninety (90) days before the date fixed for such meeting,
provided, however, that in the event that less than one hundred
(100) days notice or prior public disclosure of the date of the
meeting is given or made, notice by the shareholder to be timely
must be received not later than the close of business on the
tenth day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made.
The notice must include the shareholder's name, record address,
and number of shares owned by the shareholder, and describe
briefly the proposed business, the reasons for bringing the
business before the annual meeting, and any material interest of
the shareholder in the proposed business. In the case of
nominations to the Board, certain information regarding the
nominee must be provided. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement
and proxy relating to an annual meeting any shareholder proposal
which does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal is
received. The date on which the 1999 Annual Meeting of
Shareholders is expected to held is April 28, 1999. Accordingly,
advance written notice for certain business, or nominations to
the Board of Directors, to be brought before the 1999 Annual
Meeting must be given to the Company by January 28, 1999.
By Order of the Board of Directors
/s/ Helen J. Frangelli
-------------------------------
Helen J. Frangelli
Secretary
Bridgewater, New Jersey
March 25, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE
REQUESTED TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
RARITAN BANCORP INC.
ANNUAL MEETING OF SHAREHOLDERS
April 22, 1998
The undersigned hereby appoints William T. Kelleher, Jr. and
Thomas F. Tansey, or either of them with full powers of
substitution, to act as attorneys and proxies for the undersigned
to vote all shares of Common Stock of Raritan Bancorp Inc. which
the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held at the Raritan Valley Country Club, State
Highway 28, Somerville, New Jersey on Wednesday, April 22, 1998
at 10:00 a.m., New Jersey time and at any adjournments thereof.
The official proxy committee is authorized to cast all votes to
which the undersigned is entitled as follows.
This proxy will be voted as directed, but if no instructions are
specified, this proxy will be voted FOR proposals 1, 2 and 3. If
any other business is presented at the meeting, this proxy will
be voted by the proxy holders in their discretion.
Should the undersigned be present and elect to vote at the Annual
Meeting or at any adjournment thereof and after notification to
the Secretary of the Company at the Annual Meeting of the
shareholder's decision to terminate this proxy, then the power of
said attorneys and proxies shall be terminated and of not further
force and effect. This proxy may also be revoked by sending
written notice to the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Shareholders, or by the
filing of a later proxy prior to a vote being taken on a
particular proposal at the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to
the execution of this proxy of a Notice of Annual Meeting and of
a Proxy Statement dated March 25, 1998.
This Proxy is continued and to be signed on the reverse side.
<PAGE>
This proxy when properly executed will be voted in the
manner directed herein. If no direction is made, this proxy will
be voted for proposals 1, 2 and 3.
FOR WITHHELD
1. The election as directors of all / / / /
nominees listed below (except as
marked to the contrary below)
Peter S. Johnson
Arlyn D. Rus
INSTRUCTION: To withhold your
vote for one or more nominees,
write the name of the nominee(s)
on the line below.
FOR AGAINST ABSTAIN
2. The approval of an amendment to / / / / / /
the Company's Certificate of
Incorporation to increase the
number of authorized shares of
Common Stock.
FOR AGAINST ABSTAIN
3. The ratification of the appointment / / / / / /
of KPMG Peat Marwick LLP as auditors
for the fiscal year ending December
31, 1998.
/ / Check Box if You Plan
to Attend Annual Meeting
PLEASE DATE
-----------------------------------
Date
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
Please sign exactly as your name appears on this card. When
signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held
jointly, each holder should sign.
Please complete, sign and date this proxy and return it promptly
in the enclosed postage-prepaid envelope.
<PAGE>
