UNITED NATIONAL BANCORP
1130 Route 22 East
Bridgewater, New Jersey 08807
_______________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 16, 1996
________________________
To Our Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
Meeting) of United National Bancorp (the "Corporation") will be held at the
Headquarters Building of the Corporation, 1130 Route 22 East, Bridgewater, New
Jersey, on April 16, 1996 at 10:00 a.m., for the purpose of considering and
voting upon the following matters:
1. Electing seven directors to serve until the expiration of their
terms and thereafter until their successors shall have been duly elected and
shall have qualified.
2. An amendment to the Corporation's Certificate of Incorporation to
increase the authorized common stock of the Corporation from 4,000,000 to
5,000,000 shares.
3. Such other business as may properly come before the Meeting or any
adjournment thereof.
Only those shareholders of record as of the close of business on March
15, 1996 will be entitled to notice of, and to vote at, the Meeting. A list of
such shareholders will be available at the Meeting.
An annual disclosure statement covering the Corporation's financial
results for the past two years is available, by request, at all branches of the
Corporation's subsidiary, United National Bank (UNB) and that disclosure
statement and a copy of United's Annual Report on Form 10-K (without exhibits)
may be obtained by writing Pierce A.R. Baugh, Vice President & Secretary,
United National Bancorp, P.O. Box 6000, 1130 Route 22 East, Bridgewater, New
Jersey 08807-0010, or by calling 908-429-2365.
By Order of the Board of Directors,
Pierce A.R. Baugh
Vice President & Secretary
Bridgewater, New Jersey
March , 1996
THE ATTACHED PROXY STATEMENT SHOULD BE READ CAREFULLY.
STOCKHOLDERS ARE URGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME AND MAIL THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. YOU MAY REVOKE YOUR PROXY AT
ANY TIME BEFORE IT IS VOTED BY GIVING WRITTEN NOTICE TO THE CORPORATION.
IF YOU ATTEND THE MEETING, YOU MAY SUPERSEDE YOUR EXECUTED PROXY BY VOTING
IN PERSON.
THIS YEAR'S ANNUAL MEETING IS BEING HELD AT THE HEADQUARTERS
BUILDING OF THE CORPORATION, 1130 ROUTE 22 EAST, BRIDGEWATER, NEW JERSEY.
<PAGE>
UNITED NATIONAL BANCORP
1130 Route 22 East
Bridgewater, New Jersey 08807
--------------------
PROXY STATEMENT
Dated March 20, 1996
--------------------
GENERAL PROXY STATEMENT INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of United National Bancorp (the "Corporation") of
proxies for use at the Annual Meeting of Shareholders of the Corporation to be
held at the Headquarters Building of the Corporation, 1130 Route 22 East,
Bridgewater, New Jersey, on Tuesday, April 16, 1996 at 10:00 A.M. local time.
This Proxy Statement is first being mailed to shareholders on approximately
March 20, 1996.
VOTING INFORMATION
The record date for determining shareholders entitled to notice of
and to vote at the Meeting is March 15, 1996. Only shareholders of record as
of that date will be entitled to notice of, and to vote at, the Meeting.
On the record date, ___________ shares of the Corporation Common
Stock, $2.50 par value, were outstanding and eligible to be voted at the
Meeting. Each share of the Corporation Common Stock is entitled to one vote.
All shares represented by valid proxies received pursuant to this
solicitation will be voted in favor of the election of the seven nominees for
director who are named in the Proxy Statement and will be voted in favor of the
amendment to the Certificate ofIncorporation (the Certificate) to increase the
authorized stock of the Corporation unless the shareholder specifies a
different choice by means of the proxy or revokes the proxy prior to the time
it is exercised.
Should any other matters properly come before the Meeting, the persons
named as proxies will vote upon such matters according to their discretion
unless the shareholder otherwise specifies in the proxy.
Please return your proxy in the enclosed envelope (addressed to
The Bank of New York, serving as Registrar of our stock) sufficiently early to
assure that it will be received prior to the time set for the Meeting. You
are, of course, welcome to attend the Meeting and vote in person if you wish.
Please note that proxies may be revoked in person at the Meeting,
or by written and signed order of the shareholder if the revocation notice is
delivered to the Corporation's Headquarters, 1130 Route 22 East, Bridgewater,
New Jersey 08807, Attention: Pierce A.R. Baugh, Vice President & Secretary,
prior to 4:00 P.M. on April 15, 1996.
The enclosed proxy is solicited by the Board of Directors of
the Corporation, and the cost of that solicitation will be borne by the
Corporation. In addition to the use of the mails, proxies may be solicited
personally or by telephone by officers, directors and employees of the
Corporation who will not be specially compensated for such solicitation
activities. Arrangements may be made with brokerage houses and other
custodians, nominees and fiduciaries for forwarding solicitation materials
to the beneficial owners of shares held of record by such persons and the
Corporation will reimburse such persons for their reasonable expenses incurred
in that connection.
Approval of the Amendment to the Certificate requires the
affirmative vote of a majority of the Common Stock voted whether in person or
by proxy. Election of directors requires the affirmative vote of a plurality
of the Common Stock voted at the Meeting, whether in person or by proxy. The
Board of Directors unanimously recommends a vote FOR the Amendment and FOR
management's nominees for Director.
At the Meeting, inspectors of election will tabulate both ballots
cast by shareholders present and voting in person, and votes cast by proxy.
Under applicable state law and Certificate and Bylaws, abstentions and broker
non-votes are counted for purposes of establishing a quorum but otherwise do
not count. Generally, the approval of a specified percentage of shares voted
at a shareholder meeting is required to approve a proposal and thus abstentions
and broker non-votes have no effect on the outcome of a vote. Where state law
or the Certificate or Bylaws require that the matter voted upon be approved by
a specified percentage of the outstanding shares, then abstentions and broker
non-votes have the same effect as negative votes.
I. ELECTION OF DIRECTORS
The Board of Directors has been divided into three classes of
approximately equal size. Directors are generally elected for three-year terms
on a staggered-term basis, so that the term of office of one class will expire
each year and the terms of office of the other classes will extend for
additional periods of one and two years, respectively. This year five nominees
have been nominated to serve three-year terms expiring in 1999; one nominee has
been nominated to serve a two year term expiring in 1998, and one nominee has
been nominated for a one year term, expiring in 1997.
Shareholders will elect seven directors at the Meeting. Table I
identifies the nominees selected by the Board of Directors for election to the
Board at the Meeting. Table II identifies the individuals whose terms of
office extend beyond the Meeting.
Unless a shareholder either indicates withhold authority on the
proxy, or indicates on the proxy that his or her shares should not be voted for
certain nominees, it is intended that the proxy be voted for the persons named
in Table I to serve until the expiration of their terms and thereafter until
their successors shall have been duly elected and shallhave qualified.
Table I and Table II set forth the names and ages of the nominees
for election to director, the directors whose terms extend beyond 1996, the
other positions and offices presently held by each person within the
Corporation, the period during which each person has served on the Board of
Directors of the Corporation (or, for the period prior to August 1, 1988, the
Board of Directors of the Corporation's primary subsidiary, United National
Bank (UNB)), the expiration of their respective terms, and the principal
occupations and employment of each such person during the past five years.
<TABLE>
TABLE I
NOMINEES FOR ELECTION AS DIRECTORS
Director Principal Occupation or
Name Age Since Expiration Employment for Past Five Years
____ ___ _____ __________ ______________________________
<C> <S> <S> <S> <S>
C. Douglas Cherry..........59 1993 1999 President & Chief Executive Officer
Cherry, Weber & Associates,
P.C.(consulting engineers).
Thomas C. Gregor...........50 1992 1999 Chairman of the Board, President and
Chief Executive Officer of the Corporation
since March 4, 1993; Chairman,
President and Chief Exeuctive Officer
of UNB since June 1, 1992; previously
Senior Vice President-Commercial
Lending of National Westminster
Bank NJ and its predecessors.
John W. McGowan, III..... 44 1996 1998 Attorney and Director; Herold and
Haines, PA. (law firm) Specializing
in corporate transactions and bank
lending matters.
Patricia A. McKiernan..... 57 - 1999 Executive Vice President Hunterdon
Medical Center since 1992.
President, Public Affairs 1981-1992.
Charles N. Pond, Jr.......44 1996 1997 Owner, operator, The Oil Peddler, Inc.
and General Manager Hall Oil
Company,Inc. (retail fuel oil).
David R. Walker............61 1994 1999 Vice Chairman, Bollinger-Fowler
Company (insurance agency).
George J. Wickard..........64 1993 1999 Retired; formerly Vice President and
General Manager, United Telephone of
New Jersey, Inc.
</TABLE>
<TABLE>
TABLE II
DIRECTORS WHOSE TERMS EXTEND BEYOND THE ANNUAL MEETING
Director Principal Occupation or
Name Age Since Expiration Employment for Past Five Years
---- --- ----- ---------- -------------------------------
<C> <S> <S> <S> <S>
George W. Blank...........57 1994 1998 President and Chief Executive Officer,
The MedTech Group, Inc.
Charles E. Hance..........52 1981 1998 Senior Vice President and General
Counsel, Beneficial Management
Corp., Peapack, N.J. (provides
supervisory, audit and accounting
services for several divisions of
of Beneficial Corp.).
John R. Kopicki...........52 1993 1998 President and Chief Executive Officer
of Muhlenberg Regional Medical
Center.
Kenneth W. Turnbull......77 1969 1998 Retired; Chairman Emeritus; previously
Chairman of the Board and Chief
Executive Officer of the Corporation.
Donald A. Buckley.........69 1987 1997 Retired; previously President and Chief
Operating Officer of the Corporation,
Chairman of the Board of UNB; served as
President and Chief Executive Officer
of UNB until June 1992.
Richard C. Marder....... 82 1966 1997 Proprietor, Graftek, Plainfield, N.J.
Advertising and business printing.
Antonia S. Marotta.......66 1994 1997 Founder and President, Lean Line, Inc.
(weight loss motivation programs).
Ronald E. West...........46 1994 1997 Senior Manager, Telecommunications &
Office Automation, Shearman &
Sterling (law firm).
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors had six regular meetings and no special
meetings in 1995.
There were five standing committees appointed by the Board at the
June 20, 1995 meeting. These are in addition to the nine Committees of the UNB
Board. The Corporation Committees are:
Executive Committee. The principal function of the Executive
Committee is to exercise the authority of the Board of Directors in the
management and affairs of the Corporation, as required, between meetings of
the Board. The members are Mr. Gregor (Chairman), Mrs. Marotta and Messrs.
Blank, Buckley and Turnbull. The Executive Committee did not meet during 1995.
Audit Committee. This committee (which also serves as the audit
committee for UNB) supervises internal audits of the Corporation and UNB,
reviews reports of internal and external auditors engaged by the Corporation
and UNB, makes recommendations for changes in relevant systems and policies,
and recommends the appointment of outside auditors. The members are Messrs.
Marder (Chairman), Cherry, Walker and Wickard. The Audit Committee met seven
times in 1995.
Strategic Planning Committee. This committee develops a strategic
plan containing the Corporation's mission statement and assesses progress
periodically. The committee also reviews capital adequacy and other resources.
The members are Messrs. Gregor (Chairman), Blank, Cherry, Kopicki and West, as
well as four non-director officers of the Corporation. The Strategic Planning
Committee met two times in 1995.
Nomination Committee. This committee makes recommendations with
respect to nominees for election to the Board of Directors at the Annual
Meeting of Shareholdersand nominees to fill vacancies in the Board membership
between Meetings. The Nomination Committee has not established specific
procedures for receiving recommendations from shareholders for nominees for
election to the Board of Directors, but will consider any such recommendations
brought to the attention of the committee. Members of the committee are Mr.
Turnbull (Chairman), Mrs. Marotta and Messrs. Gregor, Hance, Kopicki, and
Wickard. The Nominating Committee met once in 1995.
Stock Based Incentive Plan Committee. This committee has full
power and discretion to interpret and administer the Corporation's Long Term
Stock Based Incentive Plan. The committee establishes selection guidelines and
selects eligible persons for participation in the Plan. Members of the
committee are Mr. Blank (Chairman), Mrs. Marotta, and Messrs. Cherry, Hance,
Kopicki, Marder, Walker, West and Wickard. The committee met once in 1995.
All Directors attended no fewer than 75% of the total number of
meetings held by the Board and all committees of the Board on which they served
(during the period they served) in 1995, except Mr. Blank and Mr. Hance who
attended 55% and 50% of such meetings, respectively.
DIRECTORS' COMPENSATION
The Directors of the Corporation receive a retainer of $4,000 per
year and UNB Directors $3,500. In addition, the Corporation and UNB Directors
receive $450 for each Board and committee meeting attended. Mr. Blank received
an additional $2,000 as Chairman of both the Stock Based Incentive Plan
Committee and the Compensation Committee, and Mr. Marder received an additional
$3,500 as Chairman of both the the Corporation and UNB Audit Committees.
The total fees paid to all Directors for the Corporation Board and
committee meetings during 1995 were $85,211. The total fees paid to all
Directors for UNB Board and committee meetings during 1995 were $212,319.
These amounts include fees which Directors elected to defer under a deferred
compensation plan.
The Corporation has a stock option plan (the Director Plan) under
which each director of the Corporation who is not also an employee of the
Corporation or its affiliates, and has not been an employee for at least one
year (a Non-Employee Director), is eligible to receive options. Following the
Corporation's 1995 Annual Meeting at which shareholders approved the Director
Plan, each then current director of the Corporation except Mr. Gregor, a total
of 11 persons, was granted an option to purchase 1,000 shares of Common Stock.
Thereafter, each eligible person who is elected or re-elected at an annual
meeting of the Corporation's shareholders will be automatically granted an
option, with the number of shares purchasable thereunder based on the term to
which such person is elected: 1,000 shares for a three-year term, 667 shares
for a two-year term, or 333 shares for a one-year term. Assuming that all
Non-Employee Director nominees are elected at this year's Meeting, four of
them (Messrs. Cherry, Walker and Wickard and Ms. McKiernan) will be granted an
option to purchase 1,000 shares of Common Stock; one of them (Mr. McGowan) will
be granted an option to purchase 667 shares of Common Stock; and one of them
(Mr. Pond) will be granted an option to purchase 333 shares of Common Stock.
All options granted under the Director Plan have terms of ten years,
subject to earlier termination as provided in the Director Plan. Subject to
accelerated vesting upon a change in control of the Corporation, retirement,
death or disability of the director, options granted pursuant to the Director
Plan become exercisable as follows: 333 shares of Common Stock become
exercisable one year after the grant, the next 334 shares (if the option
for 667 or 1,000 shares) become exercisable two years after the grant, and the
final 333 shares (if the option is for 1,000 shares) become exercisable three
years after the grant. Options are granted at an exercise price equal to the
fair market value (on the date of grant) of the Common Stock purchasable
thereunder.
STOCK OWNERSHIP OF MANAGEMENT
AND PRINCIPAL SHAREHOLDER
The following table sets forth, as of January 31, 1996, the number
of shares of the Corporation's outstanding common stock beneficially owned by
the Directors of the Corporation, the nominees for Director, the executive
officers of the Corporation for whom individual information is required to be
set forth in this Proxy Statement ("Named Officers") pursuant to the
regulations of the Securities and Exchange Commission (the "Commission"), all
Directors and executive officers of the Corporation as a group, and each person
or group known by the Corporation to be the beneficial owner of more than 5% of
the Corporation's outstanding common stock.
No. Of Shares Percent of
Name Beneficially Owned Outstanding Shares
---- -------------------------------------------
George W. Blank............ 539 *
Donald A. Buckley...........9,382 *
C. Douglas Cherry...........2,983 *
Warren R. Gerleit...........6,141<F1> *
Thomas C. Gregor............12,873<F2> *
Charles E. Hance............1,441 *
John R. Kopicki.............443 *
Donald W. Malwitz...........6,988<F3> *
Richard C. Marder<F4>.......1,770 *
Antonia S. Marotta..........1,026 *
Patricia A. McKiernan.......200 *
John W. McGowan III.........500 *
Charles N. Pond, Jr.<F5>....2,653 *
Ralph L. Straw, Jr..........2,212 *
Kenneth W. Turnbull.........5,859<F6> *
David R. Walker.............6,561 *
Ronald E. West..............340 *
George J. Wickard...........493 *
Directors and Executive
Officers as a Group
(25 persons) <F8>...........80,653<F7> 2.2%
5% Shareholder
Mrs. C. Northrop Pond <F4><F5>
1241 Cooper Road
Scotch Plains, NJ 07076 327,364(9) 9%
- ------------------------
* Less than one percent.
<F1> Of this total, 2,770 shares are held by Mr. Gerleit and he has the right
to acquire an additional 3,371 shares pursuant to options exercisable
within 60 days.
<F2> Of this total, 6,131 shares are held by Mr. Gregor and he has theright
to acquire an additional 6,742 shares pursuant to options exercisable
within 60 days.
<F3> Of this total, 2,798 shares are held by Mr. Malwitz and he has the right
to acquire an additional 4,190 shares pursuant to options exercisable
within 60 days.
<F4> Mrs. Pond and Mr. Marder are sister and brother.
<F5> Mrs. Pond and Charles N. Pond, Jr. are mother and son.
<F6> Of this total, 2,577 are shares held by Mr. Turnbull s wife.
<F7> The total of 80,653 shares includes 5,418 shares held jointly or
individually by spouses and/or other members of the household of the
directors and all executive officers.
<F8> The total unnamed executive officers have the right to purchase 11,038
shares pursuant to options exercisable within 60 days.
<F9> Mrs. Pond holds 129,123 shares in her personal trust. The remaining
198,241 shares in this figure are held in trusts for which Mrs. Pond
serves as Trustee and has the sole voting rights.
BANCORP EXECUTIVE COMPENSATION
General
Compensation of the Corporation executives is described below in the
tabular format mandated by the Commission. The letters in parentheses below
each column heading are the letters designated by the Commission for such
columns, and are provided to make it easier to compare the compensation of the
Corporation's executives with that of the executives of other Commission
reporting companies. The absence of any table or column designated by the
Commission means that no compensation was paid or earned which would be
required to be described in such table or column.
Summary Compensation Table
The following table summarizes all compensation earned in the past
three years for services performed in all capacities for the the Corporation
and UNB with respect to the Named Officers.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
--------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Name and Restricted Securities
Principal Stock Underlying All Other
Position Year Salary ($) Bonus($) Award(s)($) Options/SARs(#) Compensation($)
-------- ---- ---------- -------- ----------- --------------- ---------------
<C> <S> <S> <S> <S> <S> <S>
Thomas C. Gregor, 1995 212,000 100,000 --- 6,360 8,196<F1>
Chief Executive 1994 188,000 84,600 41,113<F2><F3> 13,483 8,433<F4>
Officer of the 1993 165,000 11,550 --- --- 1,080<F5>
Corporation and UNB
Donald W. Malwitz, 1995 131,000 30,000 --- 2,120 4,626<F1>
V.P. & Treasurer of 1994 126,400 37,920 9,488<F2><F3> 2,247 4,531<F4>
the Corporation and 1993 122,400 8,568 --- --- 1,080<F5>
Executive V.P. &
Chief Financial
Officer of UNB
Warren R. Gerleit, 1995 123,000 33,000 --- 3,180 6,846<F1>
Executive Vice 1994 116,600 34,800 25,300<F2><F3> 6,742 6,592<F4>
President, Lending, 1993 110,000 7,700 --- --- 878<F5>
of UNB
Ralph L. Straw, Jr. 1995 110,000 25,000 19,500<F2><F3> 4,240 6,196<F1>
Executive Vice 1994 102,500 30,750 --- --- ------
President and 1993 --- --- --- --- ------
General Counsel of
UNB
</TABLE>
________________
<F1> In January 1994 UNB established a 401(k) Plan available to all
employees. The amounts shown represent UNB's 1995 contribution on behalf of
the executive to the 401(k) (Mr. Gregor--$7,500; Mr. Malwitz--$3,900; Mr.
Gerleit--$6,150; and Mr. Straw--$5,500) and term life insurance premiums paid
for the executive by UNB (Mr. Gregor--$696; Mr Malwitz--$696; Mr. Gerleit--
$696; and Mr. Straw--$696).
<F2> All restricted stock awards vest 50% two years after the date of
grant, an additional 25% after three years, and the remaining balance after
four years. The restricted stock also vests in full upon retirement under
normal conditions. All dividends on the restricted stock, whether in cash or
securities, are fully vested immediately. The dollar amounts shown reflect the
value at the date of the grant.
<F3> As of December 31, 1995, Mr. Gregor held 1,300 shares of restricted
stock with a value of $44,200; Mr. Malwitz held 300 shares of restricted stock
with a value of $10,200; Mr. Gerleit held 800 shares of restricted stock with a
value of $27,200; and Mr. Straw held 600 shares of restricted stock with a
value of $20,400.
<F4> The amounts shown represent UNB's contribution on behalf of the
executive to the 401(k) (Mr. Gregor - $7,737; Mr. Malwitz - $3,835; Mr. Gerleit
- - $5,896; and Mr. Straw - $3,086) and term life insurance premiums paid for the
executive by UNB (Mr. Gregor - $696; Mr. Malwitz - $696; Mr. Gerleit - $696;
and Mr. Straw - $471).
<F5> This amount represents term life insurance premiums paid for the
officer by UNB.
Option Grants in 1995
The following table shows the options granted to Named Officers in
1995, and their potential value at the end of the option term, assuming certain
levels of appreciation of Common Stock. While the Commission-mandated column
headings refer to stock appreciation rights ("SARs"), the Corporation has not
awarded any SARs to its executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term (1)
- --------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of Percent of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted(#) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- ------------ ------------- ----------- ---------- ----- ------
<C> <S> <S> <S> <S> <S> <S>
Thomas C. Gregor...........6,360<F2> 15% 32.50 1/1/05 130,000 329,448
Donald W. Malwitz..........2,120<F2> 5% 32.50 1/1/05 43,333 109,516
Warren R. Gerleit..........3,180<F2> 8% 32.50 1/1/05 65,000 164,724
Ralph L. Straw, Jr. .......4,240<F2> 10% 32.50 1/1/05 86,666 219,362
</TABLE>
- --------------------
<F1> The dollar amounts under these columns are the result of calculations
at the 5% and the 10% rates set by the Commission and therefore are not
intended to forecast possible future appreciation, if any, of the Corporation's
stock price.
<F2> These options become exercisable at the rate of 50% on January 1,
1997, 25% on January 1, 1998 and 25% on January 1, 1999.
Aggregated Option Exercises in 1995 and Year-End Option Value
The following table shows options exercised during 1995, and the
value of unexercised options held at year-end 1995, by the Named Officers.
The Corporation does not use SARs as compensation.
<TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN THE
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options/SARs
Options at Fiscal At Fiscal
Year-End(#) Year-End($)
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise(#) Realized($) Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
<C> <S> <S> <S> <S>
Thomas C. Gregor........ -- -- 6,740/13,103 219,050/425,848
Donald W. Malwitz....... -- -- 3,066/4,367 99,645/141,928
Warren R. Gerleit....... -- -- 3,371/6,551 109,558/212,908
Ralph L. Straw, Jr. .... -- -- 0/4,240 0/137,800
</TABLE>
Pension Plan
UNB has a regular Pension Plan under which executive officers and
salaried employees may qualify under essentially the same standards. The
annual pension payable under the Pension Plan is equal to the sum of:
(1) The employee's accrued benefit as of December 31, 1986 (1.1875%
of 1986 basic compensation, plus 0.5% of such compensation in excess of $7,800,
all multiplied by the number of years of credited service as of December 31,
1986; plus
(2) From January 1, 1987 through December 31, 1988, and for each year
after December 31, 1988 in which the employee has less than 35 years of benefit
accruals, 1.5% of basic compensation for such year, plus 0.5% of such
compensation in excess of $7,800; plus
(3) For each year after December 31, 1988 in which the employee has
35 or more years of benefit accruals, 2% of basic compensation for such year.
In 1994 a $150,000 compensation limit became effective on pension
plans. Only Mr. Gregor is affected at this time and his benefit declined when
compared to last year.
The estimated annual benefits payable upon retirement at normal
retirement age (65) to the Named Officers are:
Estimated Annual Benefits
-------------------------
Assuming 4% Annual Assuming No
Name Salary Increases Salary Increases
- ---- ---------------- ----------------
Thomas C. Gregor..............................$64,154 $50,733
Donald W. Malwitz..............................78,746 72,605
Warren R. Gerleit..............................61,644 46,548
Ralph L. Straw, Jr.............................32,374 26,833
Employment, Termination of Employment and Change of Control Arrangements
As of August 15, 1994, the Corporation and UNB entered into
employment and change-in-control agreements with six executive officers,
including each of the Named Officers. Each agreement provides for the
employment of the executive from August 1, 1994 through July 30, 1998, at a
minimum base salary equal to the executive's salary as of August 1, 1994.
Under the agreement, the executive is entitled to participate in all incentive
compensation and stock award plans, all pension, profit sharing or other
retirement plans all medical, disability and life insurance plans made
available to other executives of the Corporation. Such plans may not be
terminated or altered in a manner adverse to the executive following a change
in control of the Corporation, as defined in the agreement.
Each agreement also provides for the following compensation upon
termination of the executive's employment: upon the executive s death, six
month's base salary unless the Corporation has provided life insurance with
benefits of a least 200% of base salary; if the termination is due to
disability, six month's base salary; if the termination is by the Corporation
due to the executive's poor performance (which form of termination is only
permitted prior to a change in control), one year's base salary; if the
termination is by the Corporation without cause, two years base salary if
prior to a change in control and three years base salary if after a change in
control, except in Mr. Straw's case where it is two years; if after a change
in control the executive resigns for good reason (generally defined to include
material reductions in the executive's status or benefits), three years base
salary, except again in Mr. Straw's case where it is two years.
Each agreement defines change in control generally to mean any of
the following: (1) any person or group (other than the Corporation) acquires
25% or more of the Corporation's and/or UNB's voting securities or all or
substantially all of its assets; (2) the Corporation and/or UNB agrees to merge
with an unaffiliated entity and (a) the Corporation's or UNB's directors
immediately prior to such merger will constitute less than a majority of the
directors of the surviving entity or (b) less than 75% of the outstanding
voting securities of the surviving entity will be beneficially owned by the
stockholders of the Corporation immediately prior to the merger; (3) the
Corporation and/or UNB agrees to transfer all or substantially all of its
assets, other than to a wholly-owned subsidiary of the Corporation; or (4) a
majority of the directors of either the Corporation or UNB are persons who
were not (a) directors on August 15, 1994 ("current members"), (b) nominated by
the affirmative vote of a majority of the current members at the time of their
nomination ("future designees") or (c) nominated by the affirmative vote of a
majority of the current members and future designees, taken as a group.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The member of UNB's Compensation Committee during 1995 were Messrs.
Blank (Chairman), Buckley, Gregor, Hance and Kopicki.
Among those who served on the Board of Directors during 1995 and thus
were ultimately responsible for setting executive officer compensation, Mr.
Gregor was himself an executive officer of the Corporation. Mr. Gregor
participated in deliberations of the Corporation's and UNB's boards of
directors concerning compensation of executive officers other than himself.
Directors and officers of the Corporation and their associates were
customers of and had transactions with UNB in the ordinary course of business
during the year ended December 31, 1995. Similar transactions may be expected
to take place with the Corporation's subsidiaries in the future. Outstanding
loans and commitments made by UNB in transactions with the Corporation's
directors and officers and their associates were made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and did not involve more
than a normal risk of collectibility or present other unfavorable features.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The following report, a requirement of the Commission, was prepared
by the Board of Directors of the Corporation.
UNB is the primary subsidiary of the Corporation, and the
compensation of senior officers of UNB (who may be deemed executive officers
of the Corporation for Commission reporting purposes) is normally established
by the full Board of Directors of UNB, based on recommendations made to it by
its Compensation Committee. The Compensation Committee is composed of five
directors who, in 1995, were Messrs. Blank (Chairman), Buckley, Gregor, Hance
and Kopicki. Mr. Gregor does not participate in the committee deliberations
with respect to his own compensation.
In 1994, the Board of Directors of UNB made a number of changes in
the way it set compensation for UNB's senior officers. First, the Board
adopted a new performance-based bonus program, used to determine bonuses for
officers at or above the Vice President level. In 1995, the group compensated
using this system was expanded to include all UNB employees. The Board of
Directors or, in the case of employees under the rank of Vice President, UNB
management, sets specific, measurable goals to be obtained by both UNB and the
individual officer or employee. At year end, the performance of both UNB and
the officer or employee are measured and bonuses are determined using a matrix
under which the performance of UNB and the officer or employee each contribute
to the bonus available for such officer or employee. Specified levels of
performance must be met by both UNB and the officer or employee before any
bonus is payable.
In addition, beginning in 1994 the Corporation made available to all
employees, including the Named Officers, a 401(k) Plan pursuant to which the
employees may make contributions and the Corporation will match such
contributions, up to a maximum match of 5% of the employee's compensation. In
1995, the Corporation undertook to match 50% of each employee's contribution
(up to the 5% compensation cap) and to match an additional 50% (subject to the
cap) if UNB met its approved budget for the year. That budget was met and
employee contributions were matched 100% in 1995. Prior to 1994, UNB had a
profit sharing plan for which all employees, including executive officers, were
eligible for awards. The profit sharing plan was not utilized and no awards
were made under it in 1995.
During 1995, Mr. Thomas C. Gregor served as Chairman, President and
Chief Executive Officer of UNB, and Chairman, President and Chief Executive
Officer of the Corporation. Mr. Gregor's base salary for 1995 was set by the
Board of UNB based upon his performance in executing his responsibilities in
those positions in 1994 and the performance anticipated from him in 1995 and
future years. The Board also considered the objectives set by the Board for
UNB for 1995, the overall performance of the Corporation and UNB and Mr.
Gregor's ability to develop and motivate employees to meet the Corporation's
short- and long-term objectives. Mr. Gregor's 1995 bonus was set based on
the matrix derived under UNB's new performance-based bonus program, described
above. The financial measures used to determine Mr. Gregor's performance on
the matrix were the achievement of projected budget results, the completion
of specified corporate projects for 1995 within time and within budget, the
achievement of specified minimum financial ratios and the achievement of
specified goals with respect to UNB's internal quality program, financial
performance and growth.
With respect to 1995 compensation for senior officers, the
Compensation Committee based its recommendations, and the full Board based its
actions, on the duties and responsibilities of the officer in question, the
performance of UNB and of the particular officer in 1994, and the performance
anticipated from the officer in 1995 and future years. Based upon UNB's new
performance-based bonus program, described above, bonuses for each senior
officer were set based on a matrix, which in turn was based on goals set for
the senior officer and for UNB as a whole. The CEO or, in some instances, the
senior officer's other supervising officer, set the goals for each officer.
Another compensation tool which the Board uses to relate executive
compensation to the performance of the Corporation and UNB as a whole is the
Corporation's Stock Based Incentive Plan. Recommendations for awards under this
plan are made to the full Board of Directors by its Stock Based Incentive Plan
Committee. The Committee is composed of non-management direct in 1995, were
Messrs. Blank (Chairman), Cherry, Hance, Kopicki, Marder, Walker, West and
Wickard and Mrs. Marotta. Mr. Gregor was awarded options to acquire 6,000
shares of the Corporation Common Stock pursuant to this plan in 1995, and other
Named Officers were awarded a total of 9,000 options under this plan in 1995.
Detailed information related to the compensation of the Named
Officers is shown in the compensation tables above.
As part of the 1993 Omnibus Budget Reconciliation Act ("OBRA 93")--
under Section 162(m) of the Internal Revenue Code--effective for taxable years
beginning on or after January 1, 1994, companies are subject to limits on the
deductibility of executive compensation OBRA 93 limited deductible compensation
for each executive officer to $1 million per year. Certain forms of
compensation are exempt from this deductibility limit, primarily performance-
based compensation which is approved by shareholders. Based on its 1995
salaries, profit-sharing awards and incentive plan awards, the Corporation does
not expect any of its executive officers to exceed the $1 million deductibility
threshold during the 1996 tax year.
The Board of Directors:
George W. Blank Richard C. Marder
Donald A. Buckley Antonia S. Marotta
C. Douglas Cherry Kenneth W. Turnbull
Thomas C. Gregor David R. Walker
Charles E. Hance Ronald E. West
John R. Kopicki George J. Wickard
PERFORMANCE GRAPH
The following graph is a requirement of the Commission. The graph
compares the cumulative total return on a hypothetical $100 investment made on
December 30, 1990 in: (a) the Common Stock; (b) the NASDAQ Index; (c) a peer
group composed of the following New Jersey based bank holding companies:
B.M.J. Financial Corporation; Broad National Bancorporation; Garden State
BancShares, Inc; HUBCO, Inc.; Interchange Financial Services Corporation;
Midlantic Corporation; Summit Bancorporation; Trustcompany Bancorporation;
United Counties Bancorporation; and Valley National Bancorp. The graph is
calculated assuming that dividends are reinvested during the relevant periods.
The graph shows how a $100 investment would increase or decrease in value over
time, based on dividends (stock or cash) and increases or decreases in the
market price of the stock. It should be noted that stock prices for some of
the bank holding companies in the peer group were favorably affected by merger
and/or acquisition activity in 1995, including the announcement of the
acquisition of three of those companies at a premium over market price.
<TABLE>
Symbol Index Description 12/30/90 12/29/91 12/31/92 12/31/93 12/31/94 12/31/95
- ------ ----------------- -------- -------- -------- -------- -------- --------
<C> <S> <S> <S> <S> <S> <S> <S>
UNITED NATIONAL
BANCORP...............$ 100.00 $ 112.13 $ 165.98 $ 253.47 $ 293.44 $ 328.43
CRSP Index for Nasdaq
Stock Market (US
Companies)............$ 100.00 $ 160.56 $ 186.87 $ 214.51 $ 209.69 $ 296.30
1995 Self-Determined
Peer Group............$ 100.00 $ 128.30 $ 272.22 $ 319.00 $ 349.88 $ 645.45
</TABLE>
PROPOSAL 2 - AMENDMENT TO CERTIFICATE OF INCORPORATION, INCREASING THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK.
General
The Board of Directors on February 20, 1996 unanimously approved an
amendment to Article 3 of the Certificate to increase the authorized common
stock to 5,000,000 shares.
Under the proposed amendment, the Corporation will have a total of
5,300,000 authorized shares of which 5,000,000 shares are common stock and
300,000 shares are preferred stock which generally could be issued by the Board
without further shareholder approval.
The Certificate presently authorizes the issuance of 4,000,000 shares
of common stock, of which ________ shares were issued and outstanding as of the
record date and 300,000 preferred shares, none of which is issued or
outstanding. The full text of the proposed amendment to the Certificate is
attached to this Proxy Statement as Exhibit A. The following description of
such amendment is qualified in its entirety by reference to Exhibit A.
Purpose of The Proposal
The purpose of this amendment is to maximize the Corporation's
ability to expand its capital. Although the Corporation has no agreements,
commitments or plans at this time for the sale or other use of additional
shares of stock, the Board of Directors believes that the proposed
authorization of additional common stock will provide the Corporation with
increased flexibility in generating additional capital, achieving future
acquisitions and meeting its corporate needs. If the issuance of shares is
deemed advisable in connection with raising additional capital, or future
acquisitions, having the authority to issue the additional shares would avoid
the time delay and expense of a special shareholders' meeting to authorize the
issuance of stock. No further action or authorization by the Corporation's
shareholders would be necessary prior to issuance of such stock, except as may
be required for a particular transaction by applicable law or regulation.
Possible Adverse Effects of The Proposal
The issuance of the additional common stock may have certain adverse
effects upon the current holders of common stock. Holders of the Corporation's
common stock will not have preemptive rights with respect to any new common
stock. The issuance of further common stock would increase the number of
shares of common stock outstanding, thereby diluting percentage ownership of
existing shareholders, as well as possibly diluting book value per share and/or
earnings per share.
Possible Anti-Takeover Effects Of The Proposal
When in the judgment of the Board of Directors such action would be
in the best interests of the shareholders and the Corporation, the issuance of
shares could be used to create voting or other impediments or to discourage
persons seeking-to gain control of the Corporation, for example, by the sale of
common stock to purchasers favorable to the Board of Directors. The existence
of the additional authorized shares could have the effect of discouraging
unsolicited takeover attempts. The issuance of new shares could also be used
to dilute the stock ownership of a person or entity seeking to obtain control
of the Corporation should the Board of Directors consider the action of such
entity or person not to be in the best interests of the shareholders and the
Corporation. Such issuance of common stock could also have the effect of
diluting the earnings per share and book value per share of the common stock
held by then existing holders of common stock.
Vote Required for Adoption of The Proposal
In accordance with the New Jersey Business Corporation Act and
the Certificate, the affirmative vote of a majority of those shares of common
stock voting on this proposal is required to adopt the amendment to the
Certificate.
Recommendation
The Board of Directors unanimously recommends a vote FOR the amendment
to the Certificate.
SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal for action at the
1997 Annual Meeting of Shareholders and desires that such proposal be included
in the 1997 proxy statement and proxy for such meeting must furnish the
proposal in writing addressed to Pierce A.R. Baugh, Vice President & Secretary,
United National Bancorp, 1130 Route 22 East, Bridgewater, 08807 not later than
November 21, 1996. The notice should be sent by certified mail with return
receipt requested.
SELECTION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR 1996
Arthur Andersen served as the Corporation's independent public
accountants for the fiscal year ended December 31, 1995 and for the prior 15
years. Representatives of Arthur Andersen will be present at the Meeting and
will have the opportunity to make a statement if they so desire and to respond
to appropriate questions.
On October 17, 1995, the Board of Directors selected KPMG Peat
Marwick to replace Arthur Andersen as the Corporation's independent public
accountants effective April 1, 1996. The change in accountants is the result
of a recommendation by the Audit Committee to the Board of Directors after
conducting a comprehensive review (in addition to their regular, ongoing
evaluation) of the Corporation's needs and requirements with respect to
independent public accounting services. The Audit Committee recommendation
of the selection of KPMG Peat Marwick was based on detailed presentations made
by KPMG Peat Marwick, Arthur Andersen and a third nationally recognized
accounting firm.
Arthur Andersen's reports on the Corporation's financial statements
for each of the two most recently completed fiscal years did not contain an
adverse opinion or a disclaimer of opinion, nor was either such report
qualified or modified as to uncertainty, audit scope or accounting principles.
During the Corporation's two most recent fiscal years and the interim period
preceding the change in accountants, (i) the Corporation believes there were
no disagreements with Arthur Andersen on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to Arthur Andersen's satisfaction, would
have caused Arthur Andersen to make reference to the subject matter of such
disagreements in connection with its reports on the Corporation's financial
statements, and (ii) no reportable events (as defined in Item 304(a)(1)(v) of
Regulation S-K promulgated by the Commission) occurred.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business that will be presented
for consideration at the Meeting other than that stated in the Notice. Should
any other matter properly come before the Meeting or any adjournment thereof,
it is intended that proxies in the enclosed form will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
Whether you intend to be present at the Meeting or not, you are urged
to return your signed proxy promptly.
By Order of the Board of Directors
THOMAS C. GREGOR
---------------------
Bridgewater, New Jersey Thomas C. Gregor
March , 1996 Chairman of the Board
EXHIBIT A
Article 3 of the Certificate at Present
The first sentence of Article 3, Section 1, of the Certificate
presently reads as follows:
CAPITAL STOCK
1. The total authorized capital stock of the Corporation shall be
4,300,000 shares, consisting of 4,000,000 shares of Common Stock and 300,000
shares of Preferred Stock which may be issued in one or more classes or series.
Article 3 of the Certificate as Proposed to be Amended
The following is the first sentence of Article 3, Section 1 of the
Certificate as proposed to be amended:
CAPITAL STOCK
1. The total authorized capital stock of the Corporation shall be
5,300,000 shares, consisting of 5,000,000 shares of Common Stock and 300,000
shares of Preferred Stock which may be issued in one or more classes or series.
UNITED NATIONAL BANCORP
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Frank H. Blatz, Joseph B. Hatfield and
Ralph J. Smalley, Jr., each of them with full power of substitution and
revocation, to act as attorneys and proxies of the undersigned and to vote
on behalf of the undersigned all shares of Common Stock of United National
Bancorp ("United"), which the undersigned is entitled to vote at the Annual
Meeting of Shareholders to be held April 16, 1996 at 10:00 a.m. at the
Headquarters Building of United, 113 Route 22 East, Bridgewater, New Jersey,
or at any adjournment thereof. The undersigned hereby acknowledges receipt
of the Notice of Annual Meeting and Proxy Statement and hereby instructs said
attorneys and proxies to vote as indicated herein and upon such other business
as may properly come before the Meeting. Without otherwise limiting the general
authorization given hereby, said attorneys and proxies are instructed to vote
as set forth on the reverse. Please refer to the Proxy Statement for a
discussion of each of these Proposals.
This proxy is revocable and, when properly executed, will be vote in the
manner directed herein by the undersigned. IF NO DIRECTIONS ARE MADE, THIS
PROXY (IF SIGNED) WILL BE VOTED FOR MANAGEMENT'S NOMINEES FOR DIRECTORS AND
FOR APPROVAL OF PROPOSAL 2.
(Please sign proxy on reverse side and return in enclosed envelope.)
UNITED NATIONAL BANCORP
P.O. BOX 11175
NEW YORK, NY 10263
(The Board of Directors recommends a vote "FOR")
1. To elect (7) members to the Board of Directors of United:
/___/ FOR all nominees listed below
/___/ WITHHOLD AUTHORITY to vote for all nominees listed below.
/___/ *EXCEPTIONS
Nominees:
C. DOUGLAS CHERRY
THOMAS C. GREGOR
JOHN W. McGOWAN, III
PATRICIA A. McKIERNAN
CHARLES N. POND, JR.
DAVID R. WALKER
GEORGE J. WICKARD
(Instructions: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided below)
Exceptions _______________________________________________________.
2. To approve an amendment to Bancorp's Certificate of Incorporation
increasing the authorize common stock from 4,000,000 to 5,000,000 shares.
/___/ FOR
/___/ AGAINST
/___/ ABSTAIN
3. At their discretion, the proxies are authorized to consider and vote upon
such other business as may properly come before the Meeting or any adjournments
thereof.
/___/ Change of Address and or Comments Mark Here
Please sign exactly as your name appears hereon.
When signing in a representative capacity, please
give full title.
Dated: ___________________________________
__________________________________________
Signature
__________________________________________
Signature
Votes MUST be indicated (x) in Black or Blue ink.
Please mark, sign, date and return this Proxy Card promptly using the enclosed
envelope.
