SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting Material Prusuant to [ss]240.14a-11(v) or [ss]240.14a-12
UNITED NATIONAL BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
UNITED NATIONAL BANCORP
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
1) Title of each class of securities to which transaction applies:
______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________________
5) Total fee paid:
______________________________________________________________________
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and te date of its filing.
1) Amount Previously Paid:
______________________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________________
3) Filing party:
______________________________________________________________________
4) Date filed:
______________________________________________________________________
<PAGE>
UNITED NATIONAL BANCORP
1130 ROUTE 22 EAST
BRIDGEWATER, NEW JERSEY 08807
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 15, 1997
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 15, 1997 at 10:00 a.m., for the purpose of considering and
voting upon the following matters:
1. Electing four 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 5,000,000 to
8,000,000 shares, and the authorized preferred stock from 300,000 to 1,000,000
shares.
3. An amendment to the Corporation's 1995 Stock Option Plan for
Non-Employee Directors (the "DIRECTOR PLAN") to increase the size of the options
granted to each non-employee director elected or re-elected at an annual meeting
and to increase the number of shares reserved for issuance by the Corporation
under the Director's Plan from 35,000 to 65,000.
4. 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 10,
1997 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 THE CORPORATION'S ANNUAL REPORT ON FORM 10-K (WITHOUT
EXHIBITS) MAY BE OBTAINED BY WRITING RALPH L. STRAW, JR., VICE PRESIDENT &
SECRETARY, UNITED NATIONAL BANCORP, P.O. BOX 6000, 1130 ROUTE 22 EAST,
BRIDGEWATER, NEW JERSEY 08807-0010, OR BY CALLING 908-429-2409.
By Order of the Board of Directors
Ralph L. Straw, Jr.
Vice President & Secretary
Bridgewater, New Jersey
March 17, 1997
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 BEFORE IT IS VOTED BY GIVING
<PAGE>
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.
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<PAGE>
UNITED NATIONAL BANCORP
1130 ROUTE 22 EAST
BRIDGEWATER, NEW JERSEY 08807
--------------------------
PROXY STATEMENT
Dated March 17, 1997
----------------------------
GENERAL PROXY STATEMENT INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
the Board of Directors of United National Bancorp (the "CORPORATION") of proxies
for use at the Annual Meeting of Shareholders of the Corporation (the "MEETING")
to be held at the Headquarters Building of the Corporation, 1130 Route 22 East,
Bridgewater, New Jersey, on April 15, 1997 at 10:00 A.M. local time. This Proxy
Statement is first being mailed to shareholders on approximately March 17, 1997.
VOTING INFORMATION
The record date for determining shareholders entitled to notice of and to
vote at the Meeting is March 10, 1997. Only shareholders of record as of that
date will be entitled to notice of, and to vote at, the Meeting.
On the record date, 4,413,331 shares of the Corporation's Common Stock,
$2.50 par value, were outstanding and eligible to be voted at the Meeting. Each
share of the Corporation's 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 four nominees for
director who are named in the Proxy Statement, in favor of the amendment to the
Certificate of Incorporation (the "CERTIFICATE"), increasing the authorized
stock of the Corporation and in favor of the amendment to the 1995 Stock Option
Plan for Non-Employee Directors (the "DIRECTOR PLAN") 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, P.O. Box 6000, 1130 Route 22 East,
Bridgewater, New Jersey 08807, Attention: Ralph L. Straw, Jr., Vice President &
Secretary, prior to 10:00 A.M. on April 15, 1997.
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 specifically 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.
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<PAGE>
Approval of the Amendment to the Corporation's Certificate and Director
Plan requires the affirmative vote of a majority of the Corporation's Common
Stock voted at the Meeting whether in person or by proxy. Election of directors
requires the affirmative vote of a plurality of the Corporation's Common Stock
voted at the Meeting, whether in person or by proxy. THE CORPORATION'S BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE AMENDMENT TO THE CORPORATION'S
CERTIFICATE, FOR THE AMENDMENT TO THE DIRECTOR PLAN 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 the Corporation's 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 Corporation's 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.
2
<PAGE>
I. ELECTION OF DIRECTORS
The Corporation's 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 four nominees
have been nominated to serve three-year terms expiring in 2000.
Shareholders will elect four 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 "without 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 shall have 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 1997, 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 I
NOMINEES FOR ELECTION AS DIRECTORS
Principal Occupation
Director or Employment for
Name Age Since Expiration Past Five Years
- --------------------------------------------------------------------------------
Donald A. Buckley 70 1987 2000 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.
Antonia S. Marotta 67 1994 2000 Founder and President, Lean
Line, Inc. (weight loss
motivation programs).
Charles N. Pond, Jr. 45 1996 2000 Owner, operator, The Oil
Peddler, Inc. and General
Manager Hall Oil Company,
Inc. (retail fuel oil).
Ronald E. West 47 1994 2000 Senior Manager,
Telecommunications & Office
Automation, Shearman &
Sterling (law firm).
3
<PAGE>
TABLE II
DIRECTORS WHOSE TERMS EXTEND BEYOND THE ANNUAL MEETING
Principal Occupation
Director or Employment for
Name Age Since Expiration Past Five Years
- --------------------------------------------------------------------------------
C. Douglas Cherry 60 1993 1999 President & Chief Executive
Officer Cherry, Weber &
Associates, P.C.
(consulting engineers).
Thomas C. Gregor 51 1992 1999 Chairman of the Board,
President and Chief
Executive Officer of the
Corporation since March 4,
1993; Chairman, President
and Chief Executive Officer
of UNB since June 1, 1992;
previously Senior
Vice-President - Commercial
Lending of National
Westminster Bank NJ and its
predecessors.
George W. Blank 58 1994 1998 President and Chief
Executive Officer, The
MedTech Group, Inc.
Charles E. Hance 53 1981 1998 Senior Vice President and
General Counsel, Beneficial
Management Corp., Peapack,
N.J. (provides supervisory,
audit and accounting
services for several
divisions of Beneficial
Corp.)
John R. Kopicki 53 1993 1998 President and Chief
Executive Officer of
Muhlenberg Regional Medical
Center.
Kenneth W. Turnbull 78 1969 1998 Retired; Chairman Emeritus;
previously Chairman of the
Board and Chief Executive
Officer of the Corporation.
John W. McGowan III 45 1996 1998 Attorney and Director;
Herold and Haines, PA (law
firm). Specializing in
corporate transactions and
bank lending matters.
Patricia A. McKiernan 58 1996 1999 Executive Vice President
Hunterdon Medical Center.
Vice-President, Public
Affairs 1981-1992.
David R. Walker 62 1994 1999 Vice Chairman,
Bollinger-Fowler Company
(insurance agency).
George J. Wickard 65 1993 1999 Retired; formerly Vice
President and General
Manager, United Telephone
of New Jersey, Inc.
4
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Corporation's Board of Directors had four regular meetings and one
special meeting in 1996.
There were five standing committees appointed by the Corporation's Board
at the June, 1996 meeting. These are in addition to the nine Committees of the
UNB Board. The Corporation's 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), Messrs. Blank, Buckley, Marder and Turnbull.
The Executive Committee did not meet during 1996.
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 Mrs. McKiernan and Messrs.
Marder (Chairman), Pond and Wickard. The Audit Committee met four times in 1996.
Nomination Committee. The committee makes recommendations with respect to
nominees for election to the Board of Directors at the Annual Meeting of
Shareholders and 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), Madames Marotta and McKiernan and Messrs. Gregor, Hance, and
Wickard. The Nominating Committee did not meet during 1996.
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, Kopicki, McGowan and West, as
well as four non-director officers of the Corporation. The Strategic Planning
Committee met once during 1996.
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), Madames Marotta and McKiernan and Messrs. Cherry, Hance,
Marder, Walker, West and Wickard. The committee met once during 1996.
All Directors attended no fewer than 75% of the total number of meetings
held by the Corporation Board and all committees of the Board on which they
served (during the period they served) in 1996, except Mr. Hance who attended
50% of such meetings.
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 UNB Compensation Committee, and Mr. Marder received an additional $3,500
as Chairman of both the Corporation and UNB Audit Committees.
The total fees paid to all Directors for the Corporation's Board and
committee meetings during 1996 were $93,082. The total fees paid to all
Directors for UNB Board and committee meetings during 1996 were $231,176. These
amounts include fees which Directors elected to defer under a deferred
compensation plan. In addition, the
5
<PAGE>
Corporation's total fees include $904 resulting from the exercise of 353 options
by Mr. Wickard under the Director Plan (described below). This amount represents
the difference between the exercise price and fair market value to the date of
exercise. This was the only exercise of options under the Director Plan in 1996.
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. An amendment to the Director
Plan (the "Plan Amendment") is being proposed for approval at the Meeting. The
Plan Amendment, if approved, would increase the size of the options granted each
year under the Director Plan and increase the total number of shares authorized
for issuance under the Director Plan. Assuming that all Non-Employee Director
nominees are elected at this year's Meeting, each of Messrs. Buckley, Pond and
West and Mrs. Marotta will be granted an option to purchase shares of Common
Stock (2,400 shares assuming the adoption of the Plan Amendment; 1000 shares if
the Plan Amendment is not adopted). See Proposal-3 for further information
regarding the Director Plan and the Plan Amendment.
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDER
The following table sets forth, as of January 31, 1997, 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 Corporation's
outstanding common stock.
PERCENT OF
NO. OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED SHARES
- --------------------------------- ------------------ -------------
George W. Blank 1,604 (1) *
Donald A. Buckley 10,745 (2) *
C. Douglas Cherry 4,412 (3) *
Warren R. Gerleit 10,230 (4) *
Thomas C. Gregor 21,014 (5) *
Charles E. Hance 1,980 (6) *
John R. Kopicki 949 (7) *
Donald W. Malwitz 9,344 (8) *
Richard C. Marder (10) 2,250 (9) *
Antonia S. Marotta 1,781 (11) *
Patricia A. McKiernan 318 *
John W. McGowan III 636 *
Charles N. Pond, Jr. (13) 9,413 (12) *
Ralph L. Straw, Jr. 4,872 (14) *
Kenneth W. Turnbull 6,692 (15) *
David R. Walker 11,079 (16) *
Ronald E. West 844 (17) *
George J. Wickard 1,003 *
Directors and Executive Officers
as a Group (25 persons) (19) 123,299 (18) 3.2%
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<PAGE>
PERCENT OF
NO. OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED SHARES
- --------------------------------- ------------------ -------------
5% SHAREHOLDER
Mrs. C. Northrop Pond (10)(13) 345,505 (20) 9.0%
1241 Cooper Road
Scotch Plains, NJ 07076
- ----------
* Less than one percent.
(1) Of this total, 1,230 shares are held by Mr. Blank and he has the right to
acquire an additional 374 shares pursuant to options exercisable within 60
days.
(2) Of this total, 10,371 shares are held by Mr. Buckley and he has the right
to acquire an additional 374 shares pursuant to options exercisable within
60 days.
(3) Of this total, 4,038 shares are held by Mr. Cherry and he has the right to
acquire an additional 374 shares pursuant to options exercisable within 60
days.
(4) Of this total, 3,183 shares are held by Mr. Gerleit and he has the right
to acquire an additional 7,047 shares pursuant to options exercisable
within 60 days.
(5) Of this total, 6,924 shares are held by Mr. Gregor and he has the right to
acquire an additional 14,090 shares pursuant to options exercisable within
60 days. Of the shares held by Mr. Gregor, 1,095 shares are held by Mr.
Gregor's wife.
(6) Of this total, 1,606 shares are held by Mr. Hance and he has the right to
acquire an additional 374 shares pursuant to options exercisable within 60
days.
(7) Of this total, 575 shares are held by Mr. Kopicki and he has the right to
acquire an additional 374 shares pursuant to options exercisable within 60
days.
(8) Of this total, 3,183 shares are held by Mr. Malwitz and he has the right
to acquire an additional 6,161 shares pursuant to options exercisable
within 60 days.
(9) Of this total, 1,876 shares are held by Mr. Marder and he has the right to
acquire an additional 374 shares pursuant to options exercisable within 60
days.
(10) Mrs. Pond and Mr. Marder are sister and brother.
(11) Of this total, 1,407 shares are held by Mrs. Marotta and she has the right
to acquire an additional 374 shares pursuant to options exercisable within
60 days.
(12) Of this total, 9,060 shares are held by Mr. Pond and he has the right to
acquire an additional 353 shares pursuant to options exercisable within 60
days.
(13) Mrs. Pond and Charles N. Pond, Jr. are mother and son.
(14) Of this total, 2,625 shares are held by Mr. Straw and he has the right to
acquire an additional 2,247 shares pursuant to options exercisable within
60 days.
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(15) Of this total, 6,318 shares are held by Mr. Turnbull and he has the right
to acquire an additional 374 shares pursuant to options exercisable within
60 days. Of the shares held by Mr. Turnbull 2,732 shares are held by Mr.
Turnbull's wife.
(16) Of this total, 10,705 shares are held by Mr. Walker and he has the right
to acquire an additional 374 shares pursuant to options exercisable within
60 days.
(17) Of this total, 470 shares are held by Mr. West and he has the right to
acquire an additional 374 shares pursuant to options exercisable within 60
days.
(18) The total 123,299 shares includes 6,040 shares held jointly or
individually by spouses and/or other members of the household of the
directors and all executive officers.
(19) The total unnamed executive officers have the right to purchase 8,747
shares pursuant to options exercisable within 60 days.
(20) Mrs. Pond holds 158,486 shares in her personal trust. The remaining
187,019 shares in this figure are held in trusts for which Mrs. Pond
serves as Trustee and has the sole voting rights.
EXECUTIVE COMPENSATION
GENERAL
Compensation of the Corporation's 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 Corporation and UNB with
respect to the Named Officers.
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
AWARDS
--------------------------------
ANNUAL COMPENSATION
-------------------
(g)
(a) (f) SECURITIES (i)
NAME AND (b) (c) (d) RESTRICTED UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) STOCK OPTIONS/SARS(#) COMPENSATION ($)
AWARD(S) ($)
- --------------------- -------- ------------ ----------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Gregor, 1996 240,000 110,000 -- 9,010 8,196(1)
Chief Executive 1995 212,000 100,000 -- 6,742 8,196(4)
Officer of the 1994 188,000 84,600 41,113(2)(3) 14,292 8,433(5)
Corporation and
UNB
Donald W. Malwitz, 1996 140,000 35,000 -- 3,816 4,896(1)
V.P. & Treasurer 1995 131,000 30,000 -- 2,247 4,626(4)
of the Corporation 1994 126,400 37,920 9,488(2)(3) 2,382 4,531(5)
and Executive
V.P. & Chief
Financial Officer
of UNB
Warren R. Gerleit, 1996 135,300 40,500 -- 4,240 7,461(1)
Executive Vice 1995 123,000 33,000 -- 3,371 6,846(4)
President, 1994 116,600 34,800 25,300(2)(3) 7,147 6,592(5)
Lending, of UNB
Ralph L. Straw, Jr 1996 120,000 30,000 -- 2,120 6,696(1)
Vice President & 1995 110,000 25,000 19,500(2)(3) 4,494 6,196(4)
Secretary of the 1994 102,500 30,750 -- -- 3,557(5)
Corporation and
Executive Vice
President, General
Counsel and
Cashier of UNB
</TABLE>
(1) In January 1994 UNB established a 401(k) Plan available to all employees.
The amounts shown represent UNB's 1996 contribution on behalf of the
executive to the 401(k) (Mr. Gregor - $7,500; Mr. Malwitz - $4,200; Mr.
Gerleit - $6,765; and Mr. Straw - $6,000) and term life insurance premiums
paid for the executive by UNB (Mr. Gregor - $696; Mr. Malwitz - $696; Mr.
Gerleit - $696; and Mr. Straw - $696).
(2) 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 grant.
(3) As of December 31, 1996, Mr. Gregor held 650 shares of restricted stock
with a value of $23,725; Mr. Malwitz held 150 shares of restricted stock
with a value of $5,475; Mr. Gerleit held 400 shares of restricted stock
with a value of $14,600; and Mr. Straw held 600 shares of restricted stock
with a value of $21,900.
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<PAGE>
(4) The amounts shown represent UNB's 1995 contribution on behalf of the
executive to the 401(k) (Mr. Gregor - $7,500; Mr. Malwitz - $3,930; 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).
(5) The amounts shown represent UNB's 1994 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 $471).
OPTION GRANTS IN 1996
The following table shows the options granted to Named Officers in 1996,
and their potential value at the end of the option term, assuming certain levels
of appreciation of the Corporation's Common Stock. While the Commission-mandated
column headings refer to stock appreciation rights ("SARS"), the Corporation has
not awarded any SARs to its executive officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
----------------------------------------------- ------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS/
UNDERLYING SARS GRANTED EXERCISE OR
OPTIONS/SARS TO EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED (#) IN FISCAL YEAR ($/SH) DATE 5% ($) 10%($)
- --------------------- -------------- ---------------- -------------- -------------- ------------ ------------
(a) (b) (c) (d) (e) (f) (g)
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Gregor 9,010(2) 25% 30.307 6/20/06 171,730 435,197
Donald W. Malwitz 3,816 10% 30.307 6/20/06 72,732 184,318
Warren R. Gerleit 4,240 12% 30.307 6/20/06 80,814 204,798
Ralph L. Straw, Jr. 2,120 6% 30.307 6/20/06 40,407 102,399
</TABLE>
(1) 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.
(2) These options become exercisable at the rate of 50% on June 20, 1998, 25%
on June 20, 1999 and 25% on June 20, 2000.
10
<PAGE>
AGGREGATED OPTION EXERCISES IN 1996 AND YEAR-END OPTION VALUE
The following table shows options exercised during 1996, and the value of
unexercised options held at year-end 1996, by the Named Officers. The
Corporation does not use SARs as compensation.
AGGREGATED OPTIONS/SAR EXERCISES IN THE
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS/SARS AT
AT FISCAL YEAR- FISCAL YEAR-
END (#) END ($)
--------------------- ----------------------
(#)
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- --------------------- --------------------- -------------------- --------------------- ----------------------
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Thomas C. Gregor -- -- 7,146/22,898 260,829/835,777
Donald W. Malwitz -- -- 4,441/7,254 162,097/264,771
Warren R. Gerleit -- -- 3,574/11,184 130,451/408,216
Ralph L. Straw, Jr. -- -- 0/6,614 0/241,411
PENSION PLAN
</TABLE>
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.
11
<PAGE>
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 $70,584 $57,672
Donald W. Malwitz 91,272 80,916
Warren R. Gerleit 73,812 54,684
Ralph L. Straw, Jr. 38,436 31,404
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, and 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 up to six
month's base salary to the extent that the Corporation has not provided life
insurance with benefits equal to 200% of the executive's base salary; upon
termination due to disability, up to six months' base salary to the extent that
the Corporation has not provided disability insurance with benefits equal to
100% of the executive'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 prior to a change in control,
two years' base salary (one year for Mr. Straw); if the termination is by the
Corporation without cause after a change in control or after a change in control
the executive resigns for good reason (generally defined to include material
reductions in the executive's status or benefits), a lump sum equal (x) the cash
value (determined by a formula) of any stock options, restricted stock or other
stock plan awards from the Corporation to the executive which are not vested on
the date of the termination, plus (y) a multiple (2.99 for Mr. Gregor and 2.0
for the other executives) of the average annual compensation (including base
salary and bonus) paid to the executive during the five year period prior to the
change in control. The change in control payments to the executives will be
reduced if and to the extent necessary to comply with the limitations imposed
upon parachute payments under Section 280G of the Internal Revenue Code, which
limits all payments contingent on a change in control to an amount not to exceed
three times the executive's average taxable wage compensation in the five years
prior to a change in control.
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
12
<PAGE>
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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers to file reports of holdings and
transactions in the Corporation's Common Stock with the Commission. Based on the
Corporation's records and other information the Corporation believes that all
Commission filing requirements applicable to its directors and executive
officers with respect to the Corporation's fiscal year ended December 31, 1996
were complied with except one filing by Charles N. Pond, Jr., who inadvertently
filed a Form 3 late shortly after being elected as a director of the
Corporation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of UNB's Compensation Committee during 1996 were Mrs. Marotta
and Messrs. Blank (Chairman), Buckley, Gregor and Kopicki.
Among those who served on the Board of Directors during 1996 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, 1996. 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 1996, were Messrs. Blank (Chairman), Buckley, Gregor, Kopicki and Mrs.
Marotta. 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.
13
<PAGE>
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 may match such
contributions, up to a maximum match of 5% of the employee's compensation. In
1996, 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 1996. 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 1996.
During 1996, 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 1996 was set by the Board of UNB
based upon his performance in executing his responsibilities in those positions
in 1995 and the performance anticipated from him in 1996 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 1996 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 results, 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 1996 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 1995, and the performance anticipated from
the officer in 1996 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 senior 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 outside directors who, in
1996, were Messrs. Blank (Chairman), Cherry, Hance, Kopicki, Marder, Pond,
Walker, West and Wickard and Madames Marotta and McKiernan. Mr. Gregor was
awarded options to acquire 8,500 shares of Corporation Common Stock pursuant to
this plan in 1996, and other Named Officers were awarded a total of 9,000
options under this plan in 1996.
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 1996 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 1997 tax year.
14
<PAGE>
THE BOARD OF DIRECTORS
George W. Blank Antonia S. Marotta
Donald A. Buckley John W. McGowan III
C. Douglas Cherry Patricia A. McKiernan
Thomas C. Gregor Charles N. Pond, Jr.
Charles E. Hance Kenneth W. Turnbull
John R. Kopicki David R. Walker
Richard C. Marder Ronald E. West
George J. Wickard
15
<PAGE>
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, 1991 in: (a) the Corporation's Common Stock; (b) the CRSP Index for the
NASDAQ Stock Market (U.S. Companies); and (c) the Keefe, Bruyette & Woods 50
("KBW 50") Index. 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.
GRAPHICAL REPRESENTATION OF DATA TABLE BELOW
<TABLE>
<CAPTION>
SYMBOL INDEX DESCRIPTION 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
- ------ ----------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
x UNITED NATIONAL BANCORP $100.00 $148.02 $226.04 $261.69 $292.89 $339.70
o CRSP Index for Nasdaq $100.00 $116.38 $133.60 $130.59 $184.67 $227.16
Stock Market (US
Companies)
+ Keefe, Bruyette, & Woods $100.00 $127.42 $134.48 $127.62 $204.41 $289.15
50 Index
</TABLE>
16
<PAGE>
PROPOSAL 2 - AN AMENDMENT TO THE CORPORATION'S CERTIFICATE OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK OF THE
CORPORATION FROM 5,000,000 TO 8,000,000 SHARES, AND THE
AUTHORIZED PREFERRED STOCK FROM 300,000 TO 1,000,000 SHARES.
GENERAL
The Board of Directors on February 18, 1997 unanimously approved an
amendment to Article 3 of the Certificate of Incorporation (the "CERTIFICATE")
to increase the authorized common stock to 8,000,000 shares and the authorized
Preferred Stock to 1,000,000 shares.
Under the proposed amendment, the Corporation will have a total of
9,000,000 authorized shares of which 8,000,000 shares are common stock and
1,000,000 shares are preferred stock which generally could be issued by the
Board without further shareholder approval. Under the proposed amendment, the
Board will have the right to establish classes or series of preferred stock and
to determine the relative rights, preferences and limitations of each such new
class or series, including dividend rights, conversion rights, voting rights,
redemption prices and similar matters.
The Certificate presently authorizes the issuance of 5,000,000 shares of
common stock and 300,000 shares of preferred stock, of which 4,413,331 shares of
common stock were issued and outstanding and no shares of preferred stock were
issued and outstanding as of the record date of the annual meeting.
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 to issue both common
and preferred 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 either common or preferred
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.
The issuance of the preferred stock may have certain adverse effects upon
the holders of common stock. Issuance of shares of preferred stock could affect
the voting rights of holders of common stock if any classes or series of
preferred stock had disproportionately high voting rights, or had voting rights
with respect to particular matters. Holders of the Company's common stock will
not have preemptive rights with respect to preferred stock. If any class or
series of preferred stock is convertible into or redeemable for common stock,
the number of shares of common stock outstanding may be increased, thereby
diluting the percentage ownership of existing shareholders. Shares of preferred
stock generally will be preferred to common stock as to dividend rights and
distributions in the event of liquidation.
17
<PAGE>
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.
18
<PAGE>
PROPOSAL 3 - AN AMENDMENT TO THE CORPORATION'S 1995 STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS (THE "DIRECTOR PLAN") TO INCREASE THE SIZE
OF THE OPTIONS GRANTED TO EACH NON-EMPLOYEE DIRECTOR ELECTED OR
RE-ELECTED AT AN ANNUAL MEETING AND TO INCREASE THE NUMBER OF
SHARES RESERVED FOR ISSUANCE BY THE CORPORATION UNDER THE
DIRECTOR'S PLAN FROM 35,000 TO 65,000.
At the Meeting, there will be presented to the shareholders a proposal to
approve the adoption by the Board of Directors of an amendment to the
Corporation's 1995 Stock Option Plan for Non-employee Directors (the "Director
Plan").
The Director Plan was initially approved by the Corporation's shareholders
at the Annual Meeting held on June 20, 1995. As originally adopted, the Director
Plan provided that each non-employee director elected or re-elected at an annual
meeting would be granted an option to acquire 1,000 shares of Common Stock
following that meeting (proportionately fewer shares if elected for less than a
three-year term). The amendment, if adopted, will increase the size of these
options so that each non-employee director elected or re-elected at an annual
meeting would be granted an option to acquire 2,400 shares of Common Stock
following that meeting (proportionately fewer shares if elected for less than a
three-year term). If adopted, the amendment will also increase the number of
shares of Common Stock reserved for issuance by the Corporation under the
Director Plan from 35,000 to 65,000 shares.
The Board of Directors approved an amendment to the Director Plan on
February 18, 1997. If approved by the shareholders, the amendment will become
effective immediately and, therefore, will be applicable to the Non-Employee
Directors elected at the Meeting.
DESCRIPTION OF THE DIRECTOR PLAN AND THE AMENDMENT
The objective of the Director Plan is to assist the Corporation in
attracting and retaining highly qualified persons as directors of the
Corporation and to align the interests of such persons more closely with the
interests of the Corporation's shareholders.
TYPES OF OPTIONS
All options granted under the Director Plan are for shares of the
Corporation's Common Stock.
ADMINISTRATION
The Director Plan is administered by the Board of Directors. The Board has
no power to identify the optionees or to determine the number of shares subject
to each option, the date of grant or the terms and conditions governing the
option. The Board is only charged with the responsibility of interpreting the
Director Plan and making all administrative determinations thereunder.
ELIGIBILITY AND GRANTS OF OPTIONS
Each director 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 under the Director Plan. Under the
current Director Plan each eligible person who is elected or re-elected at an
annual meeting of the Corporation's shareholders is automatically granted an
option to purchase: (a) 1,000 shares of Common Stock if elected or re-elected to
a three-year term, (b) 667 shares of Common Stock if elected or re-elected to a
two-year term, or (c) 333 shares of Common Stock if elected or re-elected to a
one-year term. Under the proposed amendment to the Director Plan, each eligible
person who is elected or re-elected at an annual meeting of the Corporation's
shareholders will be automatically granted an option to purchase: (a) 2,400
shares of Common Stock of elected or re-elected to a three-year term, (b) 1,600
shares of Common Stock if elected or re-elected to a two-year term, or (c) 800
shares of Common Stock if elected or re-elected to a one-year term. Assuming
that the amendment
19
<PAGE>
to the Director Plan is approved by the Corporation's shareholders and all four
Non-Employee Directors standing for re-election are elected at the Meeting, the
total number of options which will be granted under the Director Plan
immediately following the Meeting would be as follows:
NEW PLAN BENEFITS
DIRECTOR PLAN, AS AMENDED
Non-Executive Directors as a Group...... Options to Purchase 9,600 Shares
Total................................... Options to Purchase 9,600 Shares
TERMS AND CONDITIONS OF OPTIONS
Term; Vesting; Acceleration. 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
(i) pursuant to the current Director Plan will become exercisable as follows:
333 shares of Common Stock will become exercisable on the first anniversary of
the date of the grant, 334 shares of Common Stock (if the option is for 667 or
1,000 shares of Common Stock) will become exercisable on the second anniversary
of the date of grant, and the final 333 shares of Common Stock (if the option is
for 1,000 shares of Common Stock) will become exercisable on the third
anniversary of the date of grant or (ii) pursuant to the Director Plan, as
proposed to be amended, will become exercisable as follows: 800 shares of Common
Stock will become exercisable on the first anniversary of the date of the grant,
800 shares of Common Stock (if the option is for 1,600 or 2,400 shares of Common
Stock) will become exercisable on the second anniversary of the date of grant,
and the final 800 shares of Common Stock (if the option is for 2,400 shares of
Common Stock) will become exercisable on the third anniversary of the date of
grant. When the person ceases to serve as a director (a "Termination"), options
that (i) had not previously become exercisable and (ii) do not automatically
become exercisable upon such Termination, will be forfeited and terminated
immediately.
If a director's service to the Corporation terminates by reason of
retirement or disability, all options granted to the director that have not
become exercisable on or before the date of Termination will immediately become
exercisable, provided the director has previously completed at least three years
of service. All options held by a director who terminates service by reason of
retirement or disability may be exercised for a period of one year from the date
of such Termination or until the expiration of the stated term of the option,
whichever period is shorter.
If a director's service to the Corporation terminates due to death,
involuntary resignation or dismissal without cause, all options granted that
have not become exercisable on or before the date of such Termination will
immediately become exercisable and may be exercised for a period of one year
from the date of the Termination or until the expiration of the stated term of
the option, whichever period is shorter.
If a director's service to the Corporation is terminated for cause (as
defined in the Director Plan), no option shall be exercisable after the date of
the Termination. If a director's service to the Corporation terminates due to
any reason not specified above, the director may exercise only those options
granted that have become exercisable on or before the date of such Termination
and may exercise such options for a period of one month from the date of the
Termination or until the expiration of the stated term of the option, whichever
period is shorter.
Exercise Price. The Director Plan provides that opinions are to be granted at an
exercise price equal to the fair market value (on the date of grant) of the
Common Stock purchasable thereunder. Fair market value is defined to be the
average of the last bid and asked prices reported for Common Stock in the
NASDAQ/NMS. If bid and asked prices are not quoted, then fair market value is
the average of the high and low reported sales prices. If the Common Stock
becomes listed on a national securities exchange, then fair market value is the
last reported sales price.
20
<PAGE>
The Director Plan provides that the purchase price for shares acquired
pursuant to the exercise of any option is payable in full at the time of
exercise. The exercise price must be paid by certified or cashier's check, in
the form of unrestricted stock already owned by the director, in some
combination of the foregoing, or by any other means acceptable to the
Corporation.
Change in Control Provisions. Upon a "Change in Control" (as defined in the
Director Plan) all outstanding options under the Director Plan which are not yet
vested become immediately and fully exercisable.
The Director Plan 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 United National Bank's ("UNB") 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 and/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's 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 the date the Director Plan is approved by the stockholders
of The Corporation's ("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.
SHARES SUBJECT TO THE DIRECTOR PLAN
The current Director Plan authorizes the Corporation to issue 35,000
shares of Common Stock pursuant to options. Under the proposed amendment, the
Director Plan will authorize the Corporation to issue 65,000 shares of Common
Stock pursuant to options. As of the date of this Proxy Statement, options for
17,290 shares have been issued and are outstanding under the Director Plan.
AMENDMENTS TO THE DIRECTOR PLAN
The Board of Directors has the right to amend the Director Plan. However,
without the approval of the Corporation's shareholders no amendment may be made
to the Director Plan if the amendment would (a) except as provided under the
Director Plan for changes in capitalization, increase the number of shares of
Common Stock reserved for stock option grants under the Director Plan, (b)
change the class of persons eligible to participate in the Director Plan, (c)
extend the maximum period for granting or exercising options, (d) change the
vesting schedule provided in the Director Plan for options or (e) otherwise
increase the benefits accruing to eligible directors under the Director Plan.
FEDERAL INCOME TAX CONSEQUENCES UNDER THE DIRECTOR PLAN
The options granted under the Director Plan will be treated as
"nonstatutory options" for federal income tax purposes. The grant of a
nonstatutory option which has no readily ascertainable fair market value at the
time it is granted is not taxable to the recipient of the option for federal
income tax purposes at the time the option is granted. The options granted under
the Director Plan should be considered as having no readily ascertainable fair
market value at the time of grant because they are neither tradable on an
established market nor transferable by the recipient.
The recipient of a nonstatutory option realizes compensation taxable as
ordinary income at the time the option is exercised or transferred. The amount
of such compensation is equal to the amount by which the fair market value of
the stock acquired upon exercise of the option exceeds the amount required to be
paid for such stock. At the time the compensation income is realized by the
recipient of the option, the Corporation is entitled to an income tax deduction
in the amount of the compensation income, provided applicable rules pertaining
to tax withholding are satisfied and the compensation represents an ordinary and
necessary business expense of the Corporation. The stock acquired upon exercise
of the option has an adjusted basis in the hands of the recipient
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equal to its fair market value taken into account in determining the recipient's
compensation and a holding period commencing on the date the stock is acquired
by the recipient. At the time the stock is subsequently sold or otherwise
disposed of by the recipient, the recipient will recognize a taxable capital
gain or loss, measured by the difference between the adjusted basis of the stock
at the time it is disposed of and the amount realized in connection with the
transaction.
Under current law, a taxpayer's net capital gain (i.e., the amount by
which the taxpayer's net long-term capital gains exceed his net short-term
capital losses) is subject to tax at a maximum rate of 28% for Federal income
tax purposes. Ordinary income is subject to tax at rates as high as 39.5%.
Capital losses are currently deductible against capital gains without
limitation, but are currently deductible against ordinary income in any year
only to the extent of $3,000 ($1,500) in the case of a married individual filing
a separate return). Capital losses which are not currently deductible by reason
of the foregoing limitation may be carried forward to future years.
Options granted under the Director Plan normally may not be exercised
until at least one year after they are granted. However, the exercise of such
options may be accelerated in the event of a Change of Control, as defined in
the Director Plan. Although the matter is not free of doubt, compensation
recognized upon the accelerated exercise of an option may be treated as a
"parachute payment" under the Code, in which case such payment may be subject in
whole or in part to an additional 20% excise tax and may not be deductible by
the Corporation.
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 Director Plan.
RECOMMENDATION
The Board of Directors unanimously recommends a vote FOR the amendment to
the Director Plan.
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SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal for action at the 1998
Annual Meeting of Shareholders and desires that such proposal be included in the
1998 proxy statement and proxy for such meeting must furnish the proposal in
writing addressed to Ralph L. Straw, Jr., Vice President & Secretary, United
National Bancorp, P.O. Box 6000, 1130 Route 22 East, Bridgewater, NJ 08807 not
later than November 17, 1997. The notice should be sent by certified mail with
return receipt requested.
SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR 1997
KPMG Peat Marwick LLP ("Peat Marwick") served as the Corporation's
independent public accountants for the fiscal year ended December 31, 1996.
Arthur Andersen LLP ("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 Peat Marwick 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
Peat Marwick to replace Arthur Andersen as the Corporation's independent public
accountants effective April 1, 1996. The change in accountants was 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 Peat Marwick was based on detailed presentations made by Peat
Marwick, Arthur Andersen and a third nationally recognized accounting firm. Peat
Marwick also will serve as the Corporation's independent public accountant for
the fiscal year ended December 31, 1997.
Neither Peat Marwick's 1996 report nor Arthur Andersen's 1995 report on
the Corporation's financial statements contains 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, (i) the Corporation believes there were no
disagreements with Peat Marwick or Arthur Andersen on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which disagreements, if not resolved to Peat Marwick's or Arthur
Andersen's satisfaction, would have caused Peat Marwick or 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 this Proxy Statement.
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
Chairman of the Board
Bridgewater, New Jersey
March 17 1997
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EXHIBIT A
ARTICLE 3 OF THE CERTIFICATE AT PRESENT
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.
The shares of Common Stock shall constitute a single class and shall have a par
value of $2.50 per share. The shares of Preferred Stock of each class or series
shall be without nominal or par value, except that the amendment authorizing the
initial issuance of any class or series, adopted by the Board of Directors as
provided herein, may provide that shares of any class or series shall have a
specified par value per share, in which event all of the shares of such class or
series shall have the par value per share so specified.
2. The Board of Directors of the Corporation is expressly authorized from
time to time to adopt and to cause to be executed and filed without further
approval of the shareholders amendments to this Certificate of Incorporation
authorizing the issuance of one or more classes or series of Preferred Stock for
such consideration as the Board of Directors may fix. In an amendment
authorizing any class or series of Preferred Stock, the Board of Directors is
expressly authorized to determine:
(a) The distinctive designation of the class or series and the number of
shares which will constitute the class or series, which number may be increased
or decreased (but not below the number of shares then outstanding in that class
or above the total shares authorized herein) from time to time by action of the
Board of Directors.
(b) The dividend rate on the shares of the class or series, whether
dividends will be cumulative, and, if so, from what date or dates;
(c) The price or prices at which, and the terms and conditions on which,
the shares of the class or series may be redeemed at the option of the
Corporation;
(d) Whether or not the shares of the class or series will be entitled to
the benefit of a retirement or sinking fund to be applied to the purchase or
redemption of such shares and, if so entitled, the amount of such fund and the
terms and provisions relative to the operation thereof;
(e) Whether or not the shares of the class or series will be convertible
into, or exchangeable for, any other shares of stock of the Corporation or other
securities, and if so convertible or exchangeable, the conversion price or
prices, or the rates of exchange, and any adjustments thereof, at which such
conversion or exchange may be made, and any other terms and conditions of such
conversion or exchange;
(f) The rights of the shares of the class or series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
(g) Whether or not the shares of the class or series will have priority
over, parity with, or be junior to the shares of any other class or series in
any respect, whether or not the shares of the class or series will be entitled
to the benefit of limitations restricting the issuance of shares of any other
class or series having priority over or on parity with the shares of such class
or series and whether or not the shares of the class or series are entitled to
restrictions on the payment of dividends on, the making of other distributions
in respect of, and the purchase or redemption of shares of any other class or
series of Preferred Stock or Common Stock ranking junior to the shares of the
class or series;
(h) Whether the class or series will have voting rights, in addition to
any voting rights provided by law, and if so, the terms of such voting rights;
and
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(i) Any other preferences, qualifications, privileges, options and other
relative or special rights and limitations of that class or
series.166340A01022797
ARTICLE 3 OF THE CERTIFICATE AS PROPOSED TO BE AMENDED
The Proposed Amendment will change the first sentence of Article 3,
Section 1 of the Certificate to read as follows:
CAPITAL STOCK
1. The total authorized capital stock of the Corporation shall be
9,000,000 shares, consisting of 8,000,000 shares of Common Stock and 1,000,000
shares of Preferred Stock which may be issued in one or more classes or series.
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APPENDIX
(Pursuant to Rule 304 of Regulation S-T)
1. Page 16 contains a description in tabular form of a graph entitled
"Stock Performance Graph" which represents the comparisons of the cumulative
total return on the Company's Common Stock against the cumulative total return
of the CRSP Index, an industry index, and the Keefe, Bruyette & Woods, Inc.
("KBW") 50 Index, an industry index for the period of five years commencing
January 1, 1992 and ending December 31, 1996, which graph is contained in the
paper format of this Proxy Statement being sent to Stockholders.
<PAGE>
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[LOGO] UNITED NATIONAL
BANCORP
DIRECTIONS TO THE HEADQUARTERS
BUILDING FOR THE ANNUAL MEETING
FROM ROUTE 22 WEST:
Take Route 22 West to the Bridgewater area. After passing the intersection with
Interstate 287, continue on Route 22 West 1.8 miles to the exit for N. Bridge
St./Grove St./Somerville. Follow the exit ramp; following signs for Route 22
East. Once on Route 22 East, continue for 0.7 miles to United National's
Corporate Headquarters Building (on the right immediately past the Hewlett
Packard Building).
FROM ROUTE 22 EAST:
Take Route 22 East to the Bridgewater area. After passing the Route 202/206
Intersection, continue on Route 22 East for 1.7 miles to United National's
Corporate Headquarters Building (on the right immediately past the Hewlett
Packard Building).
FROM INTERSTATE 287 NORTH:
Take Interstate 287 North to the Route 22 West exit. Continue on Route 22 West
for 1.5 miles to the exit for N. Bridge St./Grove St./Somerville. Follow the
exit ramp; following signs for Route 22 East. Once on Route 22 East, continue
for 0.7 miles to United National's Corporate Headquarters Building (on the right
immediately past the Hewlett Packard Building).
FROM INTERSTATE 287 SOUTH:
Take Interstate 287 South, past the Intersection with Interstate 78, to the exit
for Rout 202/206 South, Princeton/Somerville. Continue on Route 202/206 South
past Bridgewater Commons Mall, to the exit for Route 22 East. Continue for 1.7
miles to United National's Corporate Headquarters Building (on the right
immediately past the Hewlett Packard Building).
DETACH PROXY CARD HERE
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(THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR")
1. To elect four (4)
members to the FOR all nominees | | WITHHOLD | | *EXCEPTIONS | |
Board of Directors listed below AUTHORITY to
of the Corporation: vote for all
nominees
listed below.
Nominees: DONALD A. BUCKLEY ANTONIA S. MAROTTA CHARLES N. POND RONALD E. WEST
(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 the 3. To approve an amendment to the
Corporation's Certificate of Corporation's 1995 Stock Option
Incorporation increas- ing the Plan for Non-Employee Directors
authorized common stock from ("Directors Plan") increasing the
5,000,000 to 8,000,000 shares size of the options granted and the
and the authorized preferred number of shares reserved for
stock from 300,000 to issuance by the Corporation under
1,000,000 shares. the Plan.
FOR | | AGAINST | | ABSTAIN | | FOR | | AGAINST | | ABSTAIN | |
4. At their discretion, the proxies are authorized to consider and vote upon
such other business as may properly come before the Meeting or any
adjournment 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: ____________________, 1997
_________________________________
Signature
_________________________________
Signature
VOTES MUST BE INDICATED
PLEASE MARK, SIGN, DATE AND RETURN THIS (X) IN BLACK OR BLUE INK. | |
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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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. Hetfield and
Ralph J. Smalley, Jr., and each of them with full powers 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
(the "Corporation"), which the undersigned is entitled to vote at the Annual
Meeting of Shareholders to be held April 15, 1997 at 10:00 a.m. at the
Headquarters Building of the Corporation, 1130 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 VOTED 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 DIRECTOR AND FOR
APPROVAL OF PROPOSALS 2 AND 3.
(Please sign proxy on reverse side and return in enclosed envelope.)
UNITED NATIONAL BANCORP
P.O. BOX 11175
NEW YORK, N.Y. 10203-0175
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