COLLECTIVE BANCORP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 16, 1996
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of
Collective Bancorp, Inc., will be held on Wednesday, October 16, 1996 at 10:00
a.m. at the Ram's Head Inn, 9 West White Horse Pike (U.S. Highway 30), Absecon,
New Jersey for the following:
(1) To elect three directors to serve three-year terms;
(2) To ratify the appointment by the Board of Directors of the firm of
KPMG Peat Marwick LLP, as independent auditors of Collective
Bancorp, Inc., for the fiscal year ending June 30, 1997; and
(3) To transact such other business as may properly come before the
meeting.
Pursuant to the bylaws, the Board of Directors has fixed the close of
business on August 30, 1996, as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. Only holders of Common Stock of record at the close of
business on that date will be entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.
In the event that there are not sufficient votes to approve any one or more
of the foregoing proposals at the time of the Annual Meeting, the Annual Meeting
may be adjourned in order to permit further solicitation of proxies by
Collective Bancorp, Inc. A list of stockholders entitled to vote at the Annual
Meeting will be available at Collective Bancorp, Inc., 716 W. White Horse Pike,
Cologne, New Jersey, for a period of twenty days prior to the Annual Meeting and
will also be available for inspection at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Collective Bancorp, Inc.
SCOTT T. PAGE
Secretary
Egg Harbor, New Jersey
September 18, 1996
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE
AND COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED
<PAGE>
COLLECTIVE BANCORP, INC.
158 Philadelphia Avenue
Egg Harbor City, New Jersey 08215
(609) 625-1110
PROXY STATEMENT
For October 16, 1996
Annual Meeting of Stockholders
GENERAL INFORMATION
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to stockholders of record on August
30, 1996 (the "Voting Record Date") in connection with the solicitation, on
behalf of the Board of Directors of Collective Bancorp, Inc. ("Collective
Bancorp" or the "Holding Company"), of proxies to be voted at the Annual Meeting
of Stockholders of Collective Bancorp (the "Annual Meeting") to be held on
October 16, 1996 at 10:00 a.m., and at any adjournments thereof. This Proxy
Statement and the enclosed form of proxy are first being sent to stockholders on
or about September 18, 1996.
At the meeting, stockholders will vote to elect three directors of the
Holding Company and will consider and vote upon the ratification of the
appointment of auditors.
If the enclosed proxy is properly executed and returned, and it is not
revoked, it will be voted in accordance with the specifications made by the
stockholder. If specifications are not made, it will be voted FOR the nominees
for director set forth below, and FOR the ratification of the appointment of
auditors. If any other matters are properly brought before the Annual Meeting,
the persons named in the accompanying proxy will vote the shares represented by
each proxy on such matters as determined by a majority of the Board of
Directors.
Voting Securities
Each of the 20,421,324 shares of common stock of Collective Bancorp (the
"Common Stock") outstanding on the Voting Record Date is entitled to one vote on
each matter presented except as to the election of directors, as to which they
may cumulate their votes and cast for one candidate a number of votes equal to
the number of such directors to be elected, multiplied by the number of their
shares, or they may distribute such votes on the same principle between two or
more candidates. Collective Bancorp has no other class of capital stock
outstanding.
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares is necessary to constitute a quorum at the Annual
Meeting, and matters proposed to be presented at that meeting shall be approved
by a majority of the votes present except for the election of directors, which
shall be by a plurality of the votes cast. In the event there are not sufficient
votes for a quorum or to approve any proposal at the time of the Annual Meeting,
the Annual Meeting may be adjourned in order to permit further solicitation of
proxies by the Board of Directors.
Voting Procedures
As to the election of directors, the proxy card being provided by the Board
of Directors enables a shareholder to vote "FOR" the election of the nominees
proposed by the Board, or to "WITHHOLD AUTHORITY" to vote for one or more of the
nominees being proposed. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, directors are elected by a plurality of the votes
cast, without regard or either (i) broker non-votes, or (ii) proxies as to which
authority to vote for one or more of the nominees being proposed is withheld.
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As to the other matters being proposed for stockholder action at this
Annual Meeting, the proxy card being provided by the Board of Directors enables
a stockholder to check the appropriate box on the proxy card to (i) vote FOR the
item, (ii) vote AGAINST the item, or (iii) vote to ABSTAIN on such item. An
affirmative vote of a majority of the votes eligible to be cast at the Annual
Meeting, in person or by proxy, is required to approve any matters that may
properly come before the Annual Meeting. Shares as to which the "ABSTAIN" box
has been selected on the proxy card and broker non-votes will not be counted as
votes cast and will have no effect on the votes as to each matter presented.
Proxies solicited hereby will be returned to the Board of Directors and
tabulated by the inspectors of election designated by the Board of Directors.
Such inspectors of election will not be employed by, or be directors of, the
Holding Company or any of its affiliates.
Revocation of Proxy
The presence of a stockholder at the Annual Meeting will not automatically
revoke such stockholder's proxy. However, stockholders who sign proxies have the
right to revoke them at any time before they are voted by filing with the
Secretary of the Holding Company either an instrument revoking the proxy or a
duly executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
Expenses of Solicitation
Collective Bancorp will pay the cost of preparing, assembling and mailing
this Proxy Statement and the enclosed material. Proxies may also be solicited
personally or by telephone or by telegraph by the Holding Company's employees
without additional compensation. The Holding Company will also request persons,
firms and corporations holding shares in their names or the names of nominees,
which are beneficially owned by others, to send proxy materials to and obtain
proxies from such beneficial owners and will reimburse the holders for their
reasonable expenses in doing so. The Holding Company has retained Beacon Hill
Partners, Inc. to assist in the solicitation of proxies, for which it will be
paid a fee of $3,000, plus out-of-pocket expenses.
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PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth, as of the dates indicated, certain
information as to those persons who were beneficial owners of more than five
percent (5%) of Collective Bancorp's outstanding shares of Common Stock. Persons
and groups owning in excess of 5% of the Holding Company's Common Stock are
required to file certain reports regarding such ownership with the Holding
Company and with the Securities and Exchange Commission (the "SEC"). Other than
those persons listed below, the Holding Company is not aware of any person or
group who beneficially owned more than 5% of the Holding Company's Common Stock
at August 30, 1996.
<TABLE>
<CAPTION>
Amount of Percent of
Beneficial Common Stock
Name and Address Ownership Outstanding
<S> <C> <C>
FMR Corp. (1).............................. 2,034,100 9.96%
82 Devonshire Street
Boston, Massachusetts 02109
Albert Abramson (2)........................ 1,690,004 8.28%
11501 Huff Court
North Bethesda, Maryland 20895
The Capital Group Companies, Inc. and
Capital Guardian Trust Company (3)......... 1,543,200 7.56%
333 South Hope Street
Los Angeles, California 90071
Collective Bank
Employee Stock Ownership
Plan & Trust ("ESOP") (4).................. 1,343,047 6.58%
158 Philadelphia Avenue
Egg Harbor, New Jersey 08215
</TABLE>
(1) The information furnished is derived from a Schedule 13 G filed by FMR
Corp. with the SEC on February 14, 1996. FMR Corp. is the parent holding
company of Fidelity Management and Research Company ("Fidelity"), an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940. Fidelity is the beneficial owner of 1,515,100 shares of common
stock as a result of acting as an investment advisor to several investment
companies registered under Section 8 of the Investment Company Act of 1940.
FMR Corp., through its control of Fidelity and the investment companies,
has sole power to dispose of the 1,515,100 shares owned by the investment
companies. The power to vote or direct the voting of the shares owned by
the investment companies resides with the respective Boards of Trustees of
the investment companies.
Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp.
and a bank as defined in Section 3(a)(6) of the Securities Exchange Act of
1934 is the beneficial owner of 519,000 shares of common stock as a result
of its serving as an investment manager of an investment account(s). FMR
Corp., through its control of Fidelity Management Trust Company, has sole
dispositive power over 519,000 shares and sole power to vote or direct the
voting of 505,700 shares and no power to vote or direct the voting of
13,300 shares owned by the institutional account(s).
(2) According to the Schedule 13 D filed with the SEC on June 10, 1993,
beneficial ownership of 499,999 shares of Common Stock is shared with
Dawson Development Company Limited Partnership. In addition to Mr.
Abramson, the other general and limited partners of Dawson Development
Company Limited Partnership are Gary Abramson, Jeffrey Abramson and Ronald
Abramson, who are the adult sons of Albert Abramson. Mr. Albert Abramson
also owns 1,190,005 shares of common stock in his own name.
(3) The information furnished is derived from a joint Schedule 13G filed with
the SEC by The Capital Group Companies, Inc. and The Capital Guardian Trust
Company on February 9, 1996. Capital Guardian Trust Company and Capital
Research and Management Company, operating subsidiaries of The Capital
Group Companies, Inc. exercised investment discretion with respect to
1,321,400 and 221,800 shares of common stock, respectively, which was owned
by various institutional investors.
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<PAGE>
(4) The information furnished is derived from a Schedule 13G filed with the SEC
on February 7, 1996. The ESOP is administered by a committee composed of
non-executive officers and employees of the Bank. The Chase Manhattan Bank,
NA (the "Trustee"), an unrelated corporate trustee, is the trustee for the
ESOP. The Trustee, subject to its fiduciary duty, must vote all allocated
shares held in the ESOP in accordance with the instructions of the
participating employees. Under the ESOP, unallocated shares held will be
voted in the same proportion as the allocated shares for which voting
instructions are received from participants, so long as such vote is in
accordance with the provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
Each stockholder of Collective Bancorp is entitled at this Annual Meeting
to vote for three directors to serve on the Board of Directors for terms of
three years, each. The Board of Directors intends to vote the proxies solicited
by it (other than proxies in which the vote is withheld as to one or more
nominees) for each candidate standing for election as a director nominated by
the Board of Directors.
Pursuant to its bylaws, the Board of Directors of Collective Bancorp
consists of nine members, with each director serving for a term of three years.
The terms are classified so that one-third of the directors are elected each
year.
The three nominees described herein, Messrs. Hamilton, Lerman and Miller,
were elected at the 1993 Annual Meeting of Stockholders of Collective Bancorp to
serve three-year terms. All three of the nominees named are also presently
directors of Collective Bank. Unless authority to vote for a director is
withheld, it is intended that the shares represented by the enclosed proxy, if
executed and returned, will be voted FOR the election of all three nominees. In
the event that any such nominee is unable or declines to serve for any reason,
it is intended that proxies will be voted for the election of the balance of
those nominees named and for such other person or persons as shall be designated
by the Board of Directors. The Board of Directors has no reason to believe that
any of the persons named will be unable or unwilling to serve.
Information with Respect to Nominees, Continuing Directors and Named Executive
Officers
The following schedule describes the period each nominee has served as a
director of the Holding Company or its predecessor, his positions and offices,
if any, with the Holding Company and his principal occupation or employment, and
contains information, as of August 30, 1996 with respect to the beneficial
ownership, as such term is defined under Rules and Regulations of the Securities
and Exchange Commission, of the Holding Company's outstanding Common Stock by
each director and named executive officer and by all the directors and executive
officers of Collective Bancorp and Collective Bank as a group. None of the
nominees or continuing directors has a business relationship with Collective
Bancorp or its subsidiaries or is affiliated with an entity that has a business
relationship with Collective Bancorp or its subsidiaries of the type described
in Item 404(b) of Regulation S-K of the Securities and Exchange Commission.
4
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of
Current Beneficial
Name, Age, Principal Occupation, Director Term Ownership of Percent
Directorships and Business Experience1 Since(1) Expires Common Stock(2) of Class
<S> <C> <C> <C> <C>
Nominees for three year terms:
Thomas H. Hamilton; 65
Chairman & Chief Executive Officer
of Collective Bancorp; employed by
Collective Bank since 1955................ 1960 1996 835,831(4) 4.09%
Miles Lerman; 86
President, Miles Lerman Enterprises, a
real estate development concern........... 1988 1996 41,200 *
William R. Miller; 69
Retired, former Senior Vice President,
Manufacturing, Lenox China, Inc........... 1985 1996 15,048 *
Continuing Directors:
Wesley J. Bahr; 79
Retired, former Chairman of
First Federal Savings and Loan
Association of New York................... 1984 2000 15,999 *
George W. French; 72
Retired, former President,
French Lumber Co., Inc.................... 1972 1998 23,259(3) *
David S. MacAllaster; 37
President, MacAllaster, Pitfield & MacKay,
Inc., a securities brokerage firm......... 1991 2000 50,999 *
Edward J. McColgan; 69
Vice Chairman & Chief Financial
Officer of Collective Bancorp; employed
by Collective Bank since 1983............. 1995 1998 172,407(4) *
Robert F. Mutschler, Jr.; 57
Manufacturing Consultant; former
Vice President, Ocean Yacht II, a
boat-building company..................... 1984 1998 37,000 *
Herman O. Wunsch; 61
President, Atlantic Maintenance, Inc.,
a commercial janitorial services company... 1972 2000 89,192 *
Named Executive Officers
Scott T. Page; 40
Sr. Executive Vice President of
Collective Bancorp and Collective Bank..... N/A N/A 55,1394 *
Bernard H. Berkman; 61
Executive Vice President of
Collective Bancorp and Collective Bank...... N/A N/A 10,934(4) *
All directors and officers as a group
(15 persons) .................................. 1,638,897(5) 8.25%
<FN>
(1) Includes years of service as a director of the Holding Company's
predecessor, Collective Bank. All members of and nominees for the Board of
Directors have held the positions set forth above for at least five years,
unless otherwise indicated.
(2) Includes all shares of Common Stock owned by each director or executive
officer's spouse, over which shares such individuals effectively exercise
voting and investment power. Also includes shares of Common Stock held by
executive officers in the Collective Bank Employees' Thrift Plan and the
Collective Bank Employees' Stock Ownership Plan as well as options granted
under the stock option plans which are exercisable within 60 days of the
record date.
(3) Includes options which are currently exercisable to acquire 5,000 shares
awarded to Mr. French under the stock option plans.
(4) Includes with respect to Messrs. Hamilton, McColgan, Page and Berkman
85,280; 29,325; 8,780 and 2,482 shares, respectively, held in the name of
the Collective Bank Employees' Thrift Plan and 38,222; 27,082; 12,440; and
4,452 shares held by Messrs. Hamilton, McColgan, Page and Berkman,
5
<PAGE>
respectively, in the name of the Collective Bank Employees' Stock Ownership
Plan. Also included are options to acquire 16,000 and 13,500 shares awarded
to Messrs. McColgan and Page, respectively, under the stock option plans.
(5) Includes options to acquire 85,850 shares granted to executive officers
under the stock option plans, 129,649 shares allocated to executive
officers under the Employees' Stock Ownership Plan, and 181,045 shares held
in the name of the Collective Bank Employees' Thrift Plan, including those
of Messrs. Hamilton, McColgan, Page and Berkman specifically identified in
footnote 4, supra.
* Indicates less than one percent.
</FN>
</TABLE>
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the Board
and through its committees. During the fiscal year ended June 30, 1996, the
Board of Directors held thirteen meetings. No director of the Holding Company
attended fewer than 75% of the total meetings of the Board of Directors and the
meetings of the committees on which he served during the past year.
The Audit Committee of Collective Bancorp is composed of Directors Bahr,
Miller and Mutschler. The Audit Committee has the responsibility of selecting
the independent auditors of the Holding Company and reviewing their degree of
independence. The Audit Committee also reviews with both the independent
auditors and the internal auditors the plans and results of the Holding
Company's internal auditing procedures and supervisory investigations into
matters generally related to audit functions. The Audit Committee held three
meetings during the past year.
The Finance Committee, composed of all members of the Board of Directors,
monitors and reviews the records and affairs of the Holding Company to determine
its financial condition. The Finance Committee held twelve meetings during
fiscal 1996.
The Compensation Committee of Collective Bancorp and Collective Bank
consists of Directors MacAllaster, French and Wunsch. The Compensation Committee
makes recommendations to the Board with respect to the compensation of the
Holding Company's Chief Executive Officer, and approves the compensation paid by
Collective Bank to other senior executives. The Compensation Committee is also
responsible for administering the restricted stock and stock option plans. The
Compensation Committee met one time during the past fiscal year.
The Board of Directors also serves as the Nominating Committee and selects
its nominees for election as directors of the Holding Company. The Holding
Company's bylaws provide for stockholders' nominations of directors. Those bylaw
provisions require such nominations to be made pursuant to timely notice in
writing to the secretary of the Holding Company. The stockholders' notice of
nomination must contain all information relating to the nominee required to be
disclosed in solicitation of proxies under the Securities and Exchange Act of
1934, the name and address of the proposing stockholder, as it appears on the
Holding Company's books, and the number and class of shares held by such
stockholder. The Nominating Committee met once for the nominations discussed
herein for the Annual Meeting.
Directors' Remuneration
All outside directors are paid an annual retainer of $16,000, plus a fee of
$250 for each board meeting or committee meeting attended. Collective Bancorp
maintains a Directors Deferred Compensation Plan which allows directors to defer
payment of the retainer and fees earned until retirement from the Board. All
amounts deferred earn interest until distribution at an annual rate equal to the
consolidated rate of return, including fees, on all interest-earning assets of
the Holding Company for the year in question. An election to defer fees must be
made annually. During fiscal 1996, Messrs. Lerman, MacAllaster and Miller
participated in the Directors Deferred Compensation Plan.
Section 16(a) Beneficial Ownership Reporting Compliance
During fiscal 1996 no director or named executive officer failed to file a
Form 3, 4 or 5, as required, on a timely basis.
6
<PAGE>
EXECUTIVE COMPENSATION
Report of the Compensation Committee
Overview and Philosophy. The executive officers of the Holding Company are
also executive officers of Collective Bank and are compensated only by
Collective Bank. Accordingly, their compensation is determined by the
Compensation Committee of Collective Bank (the "Committee"). The Committee's
responsibilities include reviewing and making recommendations to the Board of
Directors of Collective Bank regarding compensation of the Chief Executive
Officer ("CEO") and reviewing and approving the compensation paid to the other
named executives. The Committee also administers the stock option plans and the
Collective Bancorp, Inc. Restricted Stock Plan and the 1993 Restricted Stock
Plan.
The objective of the compensation program is to establish levels of
compensation sufficient to attract and retain qualified executive talent. The
program also seeks to align the interests of Collective Bancorp's executive
management with those of its stockholders through the use of incentive based
compensation tied to specific performance based criteria and stock based
compensation consisting of stock options and an Employee Stock Ownership Plan
("ESOP").
Compensation Program Elements
The executive officer compensation program consists of three primary
components: base salary, cash bonuses awarded under the Executive Incentive
Compensation Plan and stock options. Executive officers also receive other
benefits generally available to employees of Collective Bank.
Base Salary. Base salaries for the named executive officers other than the
CEO are established by the CEO subject to review and approval by the Committee.
In setting the base salaries of the executive officers the CEO makes a
subjective determination based upon his assessment of a variety of factors,
which may include the functional responsibilities of the officer, the officer's
performance over the time period under review and a general assessment of
comparative salaries for similar positions within Collective Bank's market area.
Recommendations for increases in the CEO's base salary are made by the
Committee and ratified by the Board of Directors. In making its recommendations
the Committee considers all factors which it considers appropriate, which
generally includes the performance of Collective Bank as well as a subjective
evaluation of the performance of the CEO over the time period being reviewed.
The Committee also considers base salaries paid by other financial institutions
of similar size and complexity of operations and performed a peer group
comparison.
Executive Incentive Compensation Plan. Collective Bank maintains an
executive incentive compensation plan which provides for the payment of annual
cash bonuses to officers of the bank based upon the attainment of specified
levels of performance on a calendar year basis. The Compensation Committee
designates executives to participate in the plan and their baseline target
levels of bonus, which ranged between 5 and 30 percent of base salary for
calendar year 1995. For 1995 the performance criteria and percentages of target
bonus generated under the plan were: Profitability (return on net worth) - 25%
to 70%; Net Interest Income - 5% to 65%; Efficiency ratio (operating expenses to
net interest income plus recurring fee income) - 5% to 65%. No bonus is paid if
profitability falls below a specified level. For calendar year 1995 Collective
Bank's performance resulted in a bonus payment equal to 103 percent of the
target level.
Stock Options. Grants of options under the stock option plans are made at
the Committee's discretion based upon such factors as it deems appropriate.
Grants are intended to motivate the executive officers to build stockholder
value by providing them with an equity interest in the Holding Company and to
relate a significant portion of the executives long-term compensation directly
to the financial performance of Collective Bancorp. Options have no value at the
date of award since they are granted at market price. During fiscal 1996 no
grants were made to the CEO or any of the executive officers under the stock
option plans.
Other Benefits. In addition to the items of compensation described above,
Collective Bank provides medical, dental, life insurance, 401(k) plan and ESOP
benefits to its executive officers that are generally available to Collective
Bank employees. The amount of perquisites, as determined in accordance with the
rules of the Securities and Exchange Commission relating to executive
compensation, did not exceed the lesser of $50,000 or 10% of salary for fiscal
1996.
7
<PAGE>
Compensation of the Chief Executive Officer
In October, 1995, based upon the recommendation of the Committee, the Board
of Directors approved a $20,000 increase in Mr. Hamilton's base salary in
connection with his annual performance review. Although no specific formula was
applied to establish the amount of increase, in making its recommendation the
Committee took into consideration the earnings performance of Collective Bank
over the past year as well as the relative financial performance of Collective
Bancorp as measured by return on average assets, return on average equity and
efficiency ratio. Those ratios, when measured against the financial performance
of publicly-traded thrift institutions of comparable asset size continued to
rank Collective Bancorp among the top performers in its peer group. The
Committee also considered a survey of the compensation packages provided to the
CEO's of similarly sized publicly traded thrift institutions, the performance of
which, in the opinion of the Committee, most closely reflected that of
Collective Bancorp. That survey showed Mr. Hamilton's annual compensation to be
below the median for CEO's of institutions of comparable size and performance.
During fiscal 1996 Mr. Hamilton also received a bonus of $109,933 under the
Executive Incentive Compensation Plan based upon the achievement of the
performance targets set forth in the program.
The Compensation Committee
David S. MacAllaster - Chairman
George W. French
Herman O. Wunsch
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<PAGE>
Summary Compensation Table
The following table shows, for the fiscal years ended June 30, 1996, 1995
and 1994, the cash compensation paid by Collective Bank, as well as certain
other compensation paid or accrued for those years, to the Chief Executive
Officer of the Holding Company and to each of the three most highly compensated
executive officers of Collective Bancorp and Collective Bank (the "Named
Executive Officers"). Long-Term
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Securities
Underlying All Other
Annual Compensation Options/SARS Compensation
------------------------------
Name and Principal Position Year Salary ($)(2) Bonus ($)(3) (#)(4) ($)(5)
<S> <C> <C> <C> <C> <C>
Thomas H. Hamilton, ................ 1996 $368,269 $109,933 0 $17,830
Chairman, President & CEO 1995 348,282 146,138 20,000 25,980
1994 328,270 128,228 0 32,592
Edward J. McColgan,................. 1996 $186,900 $ 38,466 0 $17,830
Vice Chairman 1995 186,877 52,544 5,000 25,593
1994 177,115 47,207 3,000 27,166
Scott T. Page, ...................... 1996 $134,698 $ 26,501 0 $16,266
Senior Executive 1995 122,085 33,447 5,000 17,468
VP & Secretary 1994 112,500 29,350 3,000 19,996
Bernard H. Berkman,.................. 1996 $118,879 $ 17,952 0 $15,105
Executive VP 1995 113,218 23,858 3,000 16,313
1994 109,846 21,893 1,500 19,605
<FN>
(1) Collective Bank also provides Messrs. Hamilton and McColgan with company
cars for their use. The amount of perquisites, as determined in accordance
with the rules of the Securities and Exchange Commission relating to
executive compensation, did not exceed the lesser of $50,000 or 10% of
salary for fiscal 1996.
(2) Includes amounts of salary deferred by the Named Executive Officers
pursuant to the Collective Bank Employees Thrift Plan (the "Thrift Plan").
Under the terms of the Thrift Plan participants may elect to have up to 16%
of their annual compensation deferred.
(3) Represents bonuses granted pursuant to the Executive Incentive Compensation
Plan, which bases bonuses upon a percentage of officers' salaries if
Collective Bank meets certain financial goals set by the Board of
Directors. See "Executive Compensation".
(4) The Holding Company maintains the Collective Bancorp Stock Option Plan (the
"Option Plan") and the Collective Bancorp, Inc. Incentive Stock Option Plan
(the "Incentive Option Plan"). Options granted under the Option Plan are
exercisable after two years. Options granted under the Incentive Option
Plan are exercisable in up to five annual installments beginning in the
sixth year following the date of the grant.
(5) Includes the amount of employer contributions credited to the Named
Executive Officers accounts maintained under the Thrift Plan and the
Collective Bank Employee Stock Ownership Plan.
</FN>
</TABLE>
Employment Agreements
The Holding Company and Collective Bank have entered into a three-year
employment agreement with Thomas H. Hamilton. That agreement took effect on
October 1, 1983 and is extended annually to maintain a three-year term beginning
October 1 each year unless notice of intention not to extend is timely given by
the Board of Directors. The agreement provides for an initial salary in the same
amount as Mr. Hamilton's salary on the effective date of the agreement. In
addition, the employment agreement provides, among other things, for
participation in other fringe benefits applicable to all personnel. The
agreement provides for voluntary termination by Mr. Hamilton upon 90 days'
written notice and would be terminable by Collective Bancorp or Collective Bank
for just cause at any time or in certain events specified by OTS regulations.
The agreement further provides that upon (i) the occurrence of an Event of
Termination (as defined in the agreement), or (ii) termination of employment
9
<PAGE>
following a Change in Control (as defined in the agreement), Mr. Hamilton will
be entitled, among other things, to receive (i) an amount equal to 36 times the
highest monthly rate of salary paid him at any time under the agreement (payable
either in a lump sum or in monthly installments, at the option of Collective
Bancorp) and (ii) an Accelerated Benefit calculated pursuant to the applicable
provisions in the agreement.
Upon the occurrence of an Event of Termination or termination of employment
following a Change in Control, the Holding Company or Collective Bank, as
applicable, is also required to maintain for Mr. Hamilton fringe benefits,
including insurance coverages. Such coverages shall cease upon the earlier of
Mr. Hamilton's employment by another employer or three years after the
termination of Mr. Hamilton's employment with the Holding Company or Collective
Bank.
Upon the occurrence of an Event of Termination or termination of employment
following a Change in Control, the Holding Company or Collective Bank, as
applicable, is also required to maintain for Mr. Hamilton fringe benefits,
including insurance coverages. Such coverages shall cease upon the earlier of
Mr. Hamilton's employment by another employer or three years after the
termination of Mr. Hamilton's employment with the Holding Company or Collective
Bank.
Collective Bank has also entered into change of control (termination)
agreements with certain of its other executives, including the Named Executive
Officers. The agreements run through December 31, 1997, and are automatically
renewed on January 1 of each even numbered year for two additional years unless
Collective Bank gives notice no later than September 30 of the preceding year
that it does not intend to extend an agreement.
Under those contracts, if a "change in control" of Collective Bank or the
Holding Company should occur (a) each of such executives would be entitled to
resign if his compensation, benefits, position or responsibilities are
diminished or in certain other circumstances; and (b) each of the executives
would be entitled, if he is dismissed without cause or resigns under (a) above,
to continue to receive his compensation and benefits until the end of the
contract term but not less than one year. For this purpose, a "change in
control" is defined to include (1) the acquisition of 25% or more of the Holding
Company's Common Stock by any person or group of persons; (2) a turnover of a
majority of the Board of Directors of Collective Bancorp within 12 consecutive
months (unless the election of each new director was approved by a vote of at
least two-thirds of the members of the Board of Directors who were also members
at the beginning of the 12-month period); or (3) the Holding Company disposes of
the business for which any such executive's services are principally performed.
Stock Option Plans
The Holding Company maintains the Option Plan and the Incentive Option Plan
which provide for discretionary awards of stock options to officers and
employees of Collective Bank as determined by the Compensation Committee. All
options have a maximum term of ten years and vest over a term of two to five
years. The exercise price for an option award is based upon the market closing
price for the Common Stock on the date of the award. The Chief Executive Officer
and the Names Executive Officers did not receive any grants of stock options
under the stock option plans during fiscal 1996.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table shows options exercised by the Named Executive Officers
during fiscal 1996, including the aggregate value of gains on the date of
exercise, and certain information with respect to the number of shares of Common
Stock represented by outstanding stock options held by the Named Executive
Officers as of June 30, 1996. Also reported are the values for "in-the-money"
options which represent the positive spread between the exercise price of any
such existing stock option and the fiscal year-end price of the Common Stock of
$23.625 per share.
10
<PAGE>
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Thomas H. Hamilton 9,760 $188,490 0/49,280 $0/744,035
Edward J. McColgan 20,000 410,250 16,000/12,500 327,000/88,438
Scott T. Page 0 0 11,500/18,500 228,281/201,313
Bernard H.Berkman 4,000 86,000 0/22,000 0/363,001
</TABLE>
Stock Performance Graph
The graph which follows shows the cumulative total return on the Common
Stock over the last five fiscal years compared with the cumulative total return
of companies on the NASDAQ Stock Market (U.S. Companies) and shares of all
financial institutions traded on the NASDAQ market. Cumulative total return on
the Common Stock or the index equals the total increase in value since June 30,
1991 assuming reinvestment of all dividends paid into the Common Stock or the
index, respectively. The graph, which was prepared by Research Data Group,
assumes that $100 was invested on June 30, 1991 in the Common Stock and in each
of the indexes.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG COLLECTIVE BANCORP, INC., THE NASDAQ STOCK MARKET - US INDEX AND THE
NASDAQ FINANCIAL INDEX
<CAPTION>
Measurement period COLLECTIVE NASDAQ STOCK NASDAQ
(Fiscal year covered) BANCORP, INC MARKET US FINANCIAL
- --------------------- ------------ ------------ ---------
<S> <C> <C> <C> <C>
FYE 06\30\91 $100 $100 $100
FYE 06\30\92 $178 $120 $139
FYE 06\30\93 $346 $151 $183
FYE 06\30\94 $391 $153 $206
FYE 06\30\95 $371 $204 $236
FYE 06\30\96 $448 $261 $307
</TABLE>
* $100 INVESTED ON 06/30/91 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING JUNE 30.
11
<PAGE>
Transactions With Certain Related Persons
The Holding Company's subsidiary savings bank makes loans to its officers,
directors and employees for the financing of their personal residences as well
as consumer and commercial loans. These loans are made in the ordinary course of
business on substantially the same terms and collateral as similar loans to
unrelated parties. In the past, the policy was to make loans to officers and
employees on substantially the same terms and collateral as similar loans to
unrelated parties, except that a reduced interest rate was set at the time the
loan was made. Upon termination of employment, the interest rate on such loans
is raised to the market rate at the time of origination on the particular type
of loan. Loans to directors have been made at prevailing market rates at the
time of origination. Management believes that such loans do not involve more
than a normal risk of collectibility or present other unfavorable features. At
June 30, 1996, all such loans were current.
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF AUDITORS
The Audit Committee recommended, and the Board of Directors appointed, the
firm of KPMG Peat Marwick LLP ("Peat Marwick"), independent certified public
accountants, to audit the accounts of Collective Bancorp for the fiscal year
ending June 30, 1997. This appointment is being presented to stockholders for
ratification.
Audit services performed by Peat Marwick during the year ended June 30,
1996, included an examination of the financial statements of Collective Bancorp
and its subsidiaries, and consultation on matters related to accounting and
financial reporting.
A representative of Peat Marwick will be present at the stockholders'
meeting and available to respond to appropriate questions and will be given an
opportunity to make a statement if the representative chooses to do so.
For the fiscal year ended June 30, 1995, the financial statements of
Collective Bancorp were audited by Deloitte & Touche, LLP. At a meeting of the
Board of Directors on August 21, 1995, based upon the recommendation of the
Audit Committee, the Holding Company terminated the services of Deloitte &
Touche, LLP and selected KPMG Peat Marwick LLP as independent auditors of
Collective Bancorp for the 1996 fiscal year.
For the fiscal years ended June 30, 1995 and 1994, the report of Deloitte &
Touche, LLP on the financial statements of Collective Bancorp contained no
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles. Furthermore, for fiscal years
1995 and 1994, there were no disagreements with Deloitte & Touche, LLP on any
matter of accounting principle or practice, financial statement disclosure or
auditing scope or procedure which, if not resolved to the satisfaction of
Deloitte & Touche, LLP, would have caused it to make reference to the subject
matter of the disagreement in connection with its reports.
At least a majority of the votes eligible to be cast by stockholders
present at the meeting in person or by proxy and entitled to vote is necessary
to ratify the appointment of auditors. If the appointment is not ratified, the
Board will consider that vote in connection with its selection of auditors for
1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP.
ADDITIONAL INFORMATION
No person is authorized to give any information or to make any
representations other than those contained in this Proxy Statement, and if given
or made, such information may not be relied upon as having been authorized.
Collective Bancorp is subject to the informational requirements of the
Securities Exchange Act of 1934 and, in accordance therewith, files reports and
other information (including proxy statements) with the Securities and Exchange
Commission ("SEC"). Such reports and other information are available for
inspection at the SEC offices located in Washington, D.C.
12
<PAGE>
OTHER MATTERS
Management of Collective Bancorp knows of no other business to be presented
to the meeting. If other matters should property come before the meeting or any
adjournment thereof, the persons named in the enclosed proxy will vote thereon
in accordance with their best judgment. Management urges each stockholder,
whether or not he or she intends to be present and to vote at the meeting, to
complete, sign and return the enclosed proxy as promptly as possible.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the proxy materials for next
year's Annual Meeting of Stockholders of Collective Bancorp, any stockholder
proposal to take action at such meeting must be received by the Secretary at 158
Philadelphia Avenue, Egg Harbor City, New Jersey 08215 no later than May 16,
1997. Any such proposal shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934, as amended.
BY ORDER OF THE BOARD OF DIRECTORS
Thomas H. Hamilton
President and Chairman of the Board
Egg Harbor, New Jersey
September 18, 1996
13
<PAGE>
COLLECTIVE BANCORP, INC.
This Proxy is Solicited on Behalf of the Board of Directors
R for Annual Meeting of Stockholders to be held on October 16, 1996.
E The undersigned hereby appoints Albert A. Kuehner and Arthur L.
Foster as proxies, each with the power to appoint his substitute,
V P and hereby authorizes them to represent and vote, as designated
below, all the shares of Common Stock of Collective Bancorp held
O R of record by the undersigned on August 30, 1996, at the Annual
Meeting of Stockholders to be held at the Ram's Head Inn, 9 West
C O White Horse Pike, U.S. Highway 30, Absecon, New Jersey; 10:00 AM,
on October 16, 1996 or any adjournment thereof.
A X
Please sign exactly as name appears below. When shares are held by
B Y joint tenants, both should sign. When signing as attorney, adminis-
trator, trustee or guardian, please give full title as such. If a
L corporation, please sign in full corporate name by president or other
authorized officer. If partnership, please sign in partnership's
E name by authorized person.
If you receive more than one proxy card, please sign and return ALL cards
in the accompanying envelope.
DATED:________________, 1996
____________________________
Signature
____________________________
Signature if held jointly
<PAGE>
(Continued from other side)
PLEASE SIGN ON REVERSE SIDE AND RETURN IN THE ENCLOSED ENVELOPE
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted for Proposals 1, 2 and 3.
1. ELECTION OF DIRECTORS
Thomas H. Hamilton Miles Lerman William R. Miller
[ ] FOR all nominees listed above (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees above
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
2. RATIFICATION OF THE APPOINTMENT BY THE BOARD OF DIRECTORS OF THE FIRM OF
KPMG PEAT MARWICK LLP, AS INDEPENDENT AUDITORS OF COLLECTIVE BANCORP, INC.
FOR FISCAL YEAR ENDING JUNE 30, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
