<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LAKELAND BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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) and 0-11.
(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 the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LAKELAND BANCORP, INC.
-------- ------- ----
OAK RIDGE, NEW JERSEY 07438
--- ------ --- ------ -----
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 13, 1998
Notice is hereby given that the Annual Meeting of Stockholders of Lakeland
Bancorp, Inc. will be held at its Administrative Office, 250 Oak Ridge Road, Oak
Ridge, New Jersey 07438 on Wednesday, May 13, 1998 at 5:00 p.m. for the
following purposes:
1. To elect four directors as set forth in the annexed Proxy Statement.
2. To transact such other business as may properly come before the
meeting.
In accordance with the Bylaws of Lakeland Bancorp, Inc., the close of business
on April 13, 1998, has been fixed as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Annual Meeting of
Stockholders or any adjournment or adjournments thereof.
Enclosed is the Annual Report, a Proxy Statement, and form of Proxy. You are
cordially invited to attend this meeting. It is important that your shares be
represented, regardless of the number you own. Please return the enclosed
proxy, duly signed, as promptly as possible, in the enclosed self-addressed
envelope.
By Order of the Board of Directors
BRUCE G. BOHUNY, SECRETARY
Oak Ridge, New Jersey
April 20, 1998
<PAGE>
LAKELAND BANCORP, INC.
-------- -------- ----
PROXY STATEMENT
----- ---------
Annual Meeting of Stockholders, May 13, 1998
Approximate Mailing Date: April 20, 1998
SOLICITATION OF PROXY
------------ -- -----
THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF
LAKELAND BANCORP, INC. (hereinafter called "Lakeland") for use in connection
with the Annual Meeting of Stockholders to be held at its Administrative Office,
250 Oak Ridge Road, Oak Ridge, New Jersey 07438, on Wednesday, May 13, 1998, at
5:00 p.m., and at any adjournments thereof. The matters to be considered and
acted upon at such meeting are referred to in the enclosed notice of such
meeting and are more fully discussed below.
Only stockholders of record at the close of business on April 13, 1998, the
record date fixed by the Board of Directors, will be entitled to notice of, and
to vote at, the Annual Meeting. If the enclosed Proxy is properly executed and
returned to Lakeland and not revoked before its exercise, all shares represented
thereby will be voted as specified in the form of Proxy. If the Proxy is signed
but no specification is given, the shares will be voted in favor of the Board's
nominees for election to the Board. The Proxy will enable you to assure that
your shares are voted and to aid in securing a quorum at the meeting.
THE ENTIRE COST OF THIS SOLICITATION WILL BE BORNE BY LAKELAND. Officers and
regular employees of Lakeland may also, but without additional compensation,
solicit proxies by further mailings, personal conversations, telephone,
telegraph, or facsimile.
REVOCATION OF PROXY
---------- -- -----
THE ENCLOSED PROXY MAY BE REVOKED IN PERSON OR IN WRITING BY NOTIFICATION TO THE
SECRETARY, BRUCE G. BOHUNY, LAKELAND BANCORP, INC., 250 OAK RIDGE ROAD, OAK
RIDGE, NEW JERSEY 07438, AT ANY TIME PRIOR TO ITS EXERCISE OR BY SUBMITTING A
DULY SIGNED, LATER-DATED PROXY.
CAPITAL STOCK OUTSTANDING
------- ----- -----------
At the close of business on April 13, 1998, there were 4,247,919 shares of
Lakeland's common stock, par value $2.50 per share (the "Common Stock"),
outstanding and entitled to vote at the Annual Meeting. Each share will be
entitled to one vote on all matters properly coming before the meeting.
Provided that a quorum is present, directors will be elected by a plurality vote
(there is no right to vote stock cumulatively). A majority of the shares of
Common Stock outstanding on the record date will constitute a quorum for
purposes of the Annual Meeting. For purposes of determining the votes cast with
respect to any matter presented for consideration at the Annual Meeting, only
those votes cast "for" or "against" are included. Abstentions and broker non-
votes are counted only for the purpose of determining whether a quorum is
present at the Annual Meeting.
- 1 -
<PAGE>
To Lakeland's knowledge, there is only one person who beneficially owned more
than 5% of the outstanding voting securities of Lakeland as of March 1, 1998.
Information regarding such persons' beneficial ownership is set forth below.
Lakeland issued a total of 669,867 shares of Common Stock in connection with its
acquisition of Metropolitan State Bank, which was consummated on February 20,
1998.
Amount and Nature
of Beneficial Ownership
Name and Address as of March 1, 1998 % of Class
- ---------------- ----------------------- ----------
John W. Fredericks 235,399 (1) 5.54%
P.O. Box 448
Oak Ridge, N.J. 07438
(1) Includes 58,997 shares owned by Mr. Fredericks' wife, Jane D. Fredericks;
58,058 shares held in the name of John W. Fredericks, Jane D. Fredericks
and Mark J. Fredericks, Trustees for Fredericks Fuel and Heating Service
Employee Profit Sharing Plan; and 48,998 shares held in the name of Edward
J. Fredericks and John W. Fredericks Trustees U/W Wilbur Fredericks Trust.
PROPOSAL ONE -- ELECTION OF DIRECTORS
-------- --- -------- -- ---------
Unless a shareholder either indicates "withhold authority" on his proxy or
indicates on his proxy that his shares should not be voted for certain nominees,
it is intended that the persons named in the proxy will vote for the election as
directors of the four persons named in Table I below to serve until the
expiration of their respective terms and thereafter until their successors shall
have been duly elected and shall have qualified. If elected, three nominees
will serve three year terms and one nominee will serve a two year term.
Discretionary authority is also solicited to vote for the election of a
substitute for any of said nominees who, for any reason presently unknown,
cannot be a candidate for election.
Table I sets forth the names and ages of the nominees for election to the Board
of Directors, the positions and offices presently held by each such person
within Lakeland, the period during which each such person has served on
Lakeland's Board of Directors, the expiration of their respective terms, the
principal occupations and employment of each such person during the past five
years, and the number of shares of Lakeland Common Stock which they beneficially
owned as of March 1, 1998. Table II set forth comparable information with
respect to those directors whose terms of office will continue beyond the date
of the Annual Meeting. Unless otherwise indicated, positions have been held for
more than five years. Unless otherwise stated in the footnotes following the
tables, the nominees and other directors listed in the tables have sole power to
vote and dispose of the shares which they beneficially owned as of March 1,
1998. All of the persons named in both tables have been directors of Lakeland
State Bank for at least five years, with the exception of Mark J. Fredericks,
who was appointed to the Board of Directors of Lakeland Bancorp, Inc. and
- 2 -
<PAGE>
Lakeland Bank on October 12, 1994, to fill the unexpired term of Henry T. Drost,
Mary Ann Deacon, who was appointed to the Board of Directors of Lakeland
Bancorp, Inc. and Lakeland Bank on November 8, 1995, and Paul P. Lubertazzi and
Joseph P. O'Dowd, who were appointed to the Board of Directors of Lakeland
Bancorp, Inc. and Lakeland Bank on February 25, 1998, following the acquisition
of Metropolitan State Bank. Mark J. Fredericks is John W. Fredericks' son.
TABLE I
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS DIRECTORS
SHARES BENEFICIALLY
OWNED AS OF
March 1, 1998
-------------------
DIRECTOR EXPIRATION BUSINESS NUMBER PERCENT
NAME AND AGE SINCE OF TERM EXPERIENCE OF SHARES OF CLASS
- ---------------------------- ---------- ----------------- ------------------- --------- --------
<S> <C> <C> <C> <C> <C>
John W. Fredericks 1989 2001 President, Lakeland 235,399 5.54%
Age 61 Bancorp, Inc. (a)
(5/19/89 to present);
President, Lakeland
Bank (5/19/69 to
present); President
and Owner, Fredericks
Fuel and Heating
Service Oak Ridge, NJ
Joseph P. O'Dowd 1998 2000 President and CEO 6,387 .15%
Age 52 of Metropolitan State (b)
Bank from 6/88 to
present and Chairman
of the Board of
Metropolitan State Bank
4/96 to present.
John Pier, Jr. 1989 2001 Dentist, 43,995 1.04%
Age 71 West Milford,NJ (c)
Paul P. Lubertazzi 1998 2001 President of 22,557 .53%
Age 63 Metropolitan State (d)
Bank from 6/88 to
present and CEO of
Metropolitan State Bank
1/96 to present
</TABLE>
Included in the amounts beneficially owned listed in the tables, the directors
of Lakeland Bancorp, Inc. held the following interests:
(a) Includes 58,997 shares owned by Mr. Fredericks' wife, Jane D. Fredericks;
58,058 shares held in the name of John W. Fredericks, Jane D. Fredericks
and Mark J. Fredericks, Trustees for Fredericks Fuel and Heating Service
Employee Profit Sharing Plan; and 48,998 shares held in the name of
Edward J. Fredericks and John W. Fredericks Trustees U/W Wilbur
Fredericks Trust.
- 3 -
<PAGE>
(b) These shares were issued to Mr. O'Dowd in connection with Lakeland's
acquisition of Metropolitan State Bank, which was consummated on February
20, 1998, in exchange for shares of Metropolitan common stock.
(c) Includes 2,224 shares owned by Mr. Pier's wife, Jane Pier; 4,648 shares
owned by Mr. Pier and his wife, Jane Pier, jointly; 126 shares held by
Mr. Pier's wife, Jane Pier, as Custodian for Mr. and Mrs. Pier's son,
John Pier, under the N.J. Uniform Gift to Minors Act; and 6,360 shares
held in an IRA with Merrill Lynch for Mr. Pier.
(d) These shares were issued to Mr. Lubertazzi in connection with Lakeland's
acquisition of Metropolitan State Bank, which was consummated on February
20, 1998, in exchange for shares of Metropolitan common stock.
TABLE II
OTHER DIRECTORS
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF
MARCH 1, 1998
--------------------
DIRECTOR EXPIRATION BUSINESS NUMBER PERCENT
NAME AND AGE SINCE OF TERM EXPERIENCE OF SHARES OF CLASS
- -------------------------- ---------- ----------------- -------------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Bruce G. Bohuny 1989 2000 Secretary, Lakeland 65,703 1.55%
Age 65 Bancorp, Inc. (e)
(5/19/89 to present);
Secretary, Lakeland
Bank (5/19/69) to
present; President,
Brooks Limited (a real
estate development
corp.), Wyckoff, NJ
Mary Ann Deacon 1995 2000 Secretary/Treasurer 11,684 .27%
Age 46 of Deacon Homes Inc. (f)
and Deacon Development
Corp. (real estate
development corps.),
Sparta, NJ
Robert B. Nicholson 1989 1999 Chairman, Lakeland 171,279 4.03%
Age 69 Bancorp, Inc. (g)
(5/19/89 to present);
Chairman, Lakeland
Bank (5/19/69 to
present); Chairman,
Eastern Propane Corp.,
Oak Ridge, NJ
(9/21/88 to present)
</TABLE>
- 4 -
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Arthur L. Zande 1989 1999 Executive Vice 10,700 .25%
Age 63 President & (h)
CEO, Lakeland
Bancorp, Inc.
(5/19/89 to present);
Executive Vice
President &
CEO, Lakeland
Bank (10/1/72 to
present)
Mark J. Fredericks 1994 1999 President of Keil 135,568 3.19%
Age 36 Oil Company, (i)
Riverdale, NJ
</TABLE>
(e) Includes 7,997 shares owned by Mr. Bohuny's wife, Judy Bohuny; 604 shares
held in name of the Estate of Emma Bohuny -- Bruce G. Bohuny, Executor;
3,991 shares owned by Mr. Bohuny's son; 1,599 shares held in a Keogh Plan
for Bruce G. Bohuny; and 607 shares held by Brooks Ltd. of which Mr.
Bohuny is president; 52 shares held in the name of Bruce G. Bohuny, cust.
for Alexandria, his granddaughter; and 52 shares in the name of Bruce G.
Bohuny, cust. for Blair, his granddaughter.
(f) Includes 1,060 shares in the name of Philip Deacon, husband of Mary Anne
Deacon.
(g) Includes 46,922 shares owned by Mr. Nicholson's wife, Shirley M.
Nicholson; 19,603 shares registered in the name of Eastern Propane Corp.
(a corporation of which Mr. Nicholson is Chairman of the Board); and 5,063
shares owned by Mr. Nicholson's son, Robert B. Nicholson III.
(h) Includes 1,006 shares held by Mr. Zande's wife, Nancy T. Zande.
(i) Includes 10,683 shares owned by Mr. Fredericks' wife, Shelley B.
Fredericks; 8,151 shares held by Mark J. Fredericks cust. for Douglas;
8,154 held by Mark J. Fredericks cust. for William; 8,153 shares held by
Mark J. Fredericks cust. for Leanne; 8,148 shares held by Mark J.
Fredericks cust. for Emily; 8,398 shares held by Keil Oil Employee Profit
Sharing Plan, and 58,058 held by John W. Fredericks, Jane D. Fredericks,
and Mark J. Fredericks Trustees for Fredericks Fuel and Heating Service
Profit Sharing Plan.
The executive officers and directors of Lakeland (10 persons) beneficially owned
653,103 shares (or 15%) of Lakeland's outstanding Common Stock on March 1, 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Lakeland's
directors, executive officers and 10% shareholders to file with the Securities
and Exchange Commission certain report regarding such persons' ownership of
Lakeland's securities. Lakeland is required to disclose any failures to file
such reports on a timely basis. There were no untimely filings for the fiscal
year ended December 31, 1997.
- 5 -
<PAGE>
EXECUTIVE COMPENSATION
-----------------------
The following table sets forth, for the years ended December 31, 1995, 1996, and
1997, the cash compensation paid by Lakeland and its subsidiary, as well as
certain other compensation paid or accrued by such entities for those years, to
or with respect to Lakeland's Chief Executive Officer, the only executive
officer whose total annual salary and bonus for 1997 exceeded $100,000 (the
"Named Officer"), for services rendered in all capacities as an executive
officer during such period.
SUMMARY COMPENSATION TABLE
----------------------------
<TABLE>
<CAPTION>
Name and Principal Annual Compensation (A) All Other (B)
Position Year Salary Bonus Compensation
- -------------------- ---- ----------------------- ------------- ------------
<S> <C> <C> <C> <C>
Arthur L. Zande 1997 $195,000 $ - $140,890
Executive Vice
President and 1996 180,000 - 74,350
Chief Executive
Officer 1995 165,000 - 100,923
</TABLE>
(A) During the three years ended December 31, 1997, Mr. Zande did not receive
perquisites (i.e., personal benefits) in excess of 10% of his reported
salary and bonus.
(B) All other compensation in 1997 was comprised of the following: An annual
contribution of $1,404 made by Lakeland State Bank for annual premiums for
term life insurance in excess of $50,000 for Mr. Zande; annual contributions
to the Bank's profit sharing plan on behalf of Mr. Zande of $17,700;
increases to Mr. Zande's profit sharing plan account of $115,450, reflecting
his allocated portion of plan earnings and forfeitures; and the fair market
value of the personal use of a company car of $6,336.
RELATED PARTY TRANSACTIONS
----------------------------
Pursuant to the Amended and Restated Agreement and Plan of Reorganization, dated
January 14, 1998 (the "Merger Agreement"), between Lakeland and Metropolitan
State Bank ("MSB"), Lakeland's Board of Directors appointed Paul P. Lubertazzi,
MSB's Chairman and President, and Joseph O'Dowd, another member of MSB's Board
of Directors, to Lakeland's Board.
Lakeland also agreed in the Merger Agreement to retain Paul P. Lubertazzi as the
Chairman of the Board, Chief Executive Officer and President of MSB under the
terms and conditions of his current employment agreement and continuing until
the end of the Transition Period (which is defined in the Merger Agreement to
mean the period ending on the earlier of February 20, 2001, or the date on which
- 6 -
<PAGE>
Mr. Lubertazzi ceases to serve as a full-time employee of MSB). In addition, to
induce Mr. Lubertazzi to provide additional services relating to the Transition
Period and the integration of MSB into Lakeland's consolidated enterprise,
Lakeland has agreed to (i) at a cost to Lakeland of $278,000 provide to Mr.
Lubertazzi an additional annuity comparable to the annuity provided to Mr.
Lubertazzi by MSB prior to the acquisition and (ii) at a cost to Lakeland of
$45,000, provide to Mr. Lubertazzi certain retiree medical benefits.
Mr. Lubertazzi's Employment Agreement provides that he will receive base
compensation of not less than $140,000 per year. The Employment Agreement
further provides that Mr. Lubertazzi may participate in all employee benefit
plans and programs established by MSB. If Lakeland should terminate Mr.
Lubertazzi's employment without cause, his Employment Agreement provides that he
will continue to be paid any compensation to which he would be entitled under
the terms of his Employment Agreement. The Employment Agreement contains certain
non-competition and anti-solicitation provisions in the event that Mr.
Lubertazzi terminates his employment without cause.
Mr. Lubertazzi entered into a separate agreement with MSB which was assumed by
Lakeland. Pursuant to the agreement, MSB is required to pay Mr. Lubertazzi or
his beneficiary an aggregate of $525,000 payable in 15 annual installments
beginning on his retirement date or date of death. No benefits are payable
under the agreement if Mr. Lubertazzi is terminated for intentional wrongdoing.
In order to fund this obligation, MSB has obtained a variable life insurance
policy (which has a cash surrender value of approximately $106,000) and has
accrued approximately $260,000 in expenses. Although no assurance can be given,
Lakeland does not expect to expend additional significant amounts to fund this
obligation.
BOARD COMMITTEES AND DIRECTORS' COMPENSATION
------------------------------------------------
The Board of Directors of Lakeland does not have a remuneration committee or any
other committee other than those discussed herein. No remuneration was paid to
committee members during 1997 for attendance at committee meetings.
The Board of Directors met twenty-four times during 1997 and no director
attended less than 75% of the aggregate of the total number of meetings of the
Board and the total number of meetings held by all committees of the Board on
which he served.
The Audit Committee, which consists of John Pier, Jr., Mark Fredericks, and Mary
Ann Deacon, reviews the reports submitted by Radics & Co., LLC, Lakeland's
independent accountants. Recommendations and comments made by the accountants
are then discussed with the Board of Directors and management. The Audit
Committee met four times during 1997.
The Nominating Committee, consisting of Mark Fredericks and John Pier, met once
during 1997 to select nominees for the Board of Directors. This Committee has
not developed procedures for considering nominations made by shareholders.
- 7 -
<PAGE>
All directors of Lakeland receive an annual retainer fee of $5,000, with the
exception of Arthur L. Zande. Directors currently receive a fee of $550 for
each meeting of Lakeland's Board of Directors which they attend. Lakeland
maintains a plan which provides that any director having attained age 72 (75 for
directors active as of the date of the plan's inception on January 1, 1996) and
having completed 15 years of service may retire and continue to be paid for a
period of 10 years at a rate of $5,000, $7,500 or $10,000 per year, depending
upon the years of credited service.
COMPENSATION COMMITTEE INTERLOCKS
----------------------------------
AND
---
INSIDER PARTICIPATION
----------------------
The Board of Directors does not maintain a compensation committee. Accordingly,
compensation decisions are made by the entire Board of Directors. During the
year ended December 31, 1997, the following individuals served as members of the
Board of Directors:
Bruce G. Bohuny Robert B. Nicholson
Mary Ann Deacon John Pier, Jr.
John W. Fredericks Arthur L. Zande
Mark J. Fredericks
Of the persons named, Messrs. Nicholson, John Fredericks, Zande, and Bohuny were
and are employees of Lakeland or its subsidiary.
Mr. John Fredericks and Mr. Nicholson are two of the three partners in a joint
venture which owns certain property in Newton, New Jersey. Lakeland Bank rents
space (pursuant to a lease expiring on October 1, 2000) in the building located
on this property for a branch office, at an annual rental of $58,359. Mr. John
Fredericks and Mr. Nicholson are the President and Chairman, respectively, of
Lakeland.
Lakeland Bank has had, and expects to have in the future, transactions in the
ordinary course of its business with directors, officers, principal
stockholders, and their associates, on the same terms, including interest rates
and collateral, as those prevailing at the same time for comparable transactions
with others, and that do not involve more than the normal risk of collectability
or other unfavorable features.
BOARD REPORT ON EXECUTIVE COMPENSATION
------------------------------------------
Lakeland does not have a compensation committee, and, accordingly, policies
concerning the compensation of executive officers, including the Chief Executive
Officer, are established by the entire Board of Directors. Pursuant to
regulations adopted by the Securities and Exchange Commission, the Board has
prepared the following report with respect to compensation for executive
officers.
- 8 -
<PAGE>
Lakeland's current compensation program focuses upon the salaries of executive
officers and is designed to provide appropriate reimbursement for services
rendered. Traditionally, the salaries of the Chief Executive Officer and the
other executive officers have been set at levels which are perceived by the
Board to be comparable to the salaries of executive officers of other banks
which the Board considers to be comparable to Lakeland. Included in this
comparison of comparable banks are 13 banks in New Jersey ranging in asset size
from $180,000,000 to $631,000,000. Of these 13 banks, 6 are included in the
Peer Group Index, which is comprised of Media General Financial Services' Middle
Atlantic Banks Group, and are represented in the Performance Graph, which is
shown later in this document.
Salaries are determined annually, and, accordingly, the Board reviews each
executive officer's performance on a yearly basis. With respect to Mr. Zande's
salary, in addition to the comparative analysis described above, the Board
specifically focuses on the Chief Executive Officer's individual performance and
the manner in which such performance contributed to Lakeland's overall
performance during the prior year. Mr. Zande does not participate in the
determination of his own salary.
Executive officers are also provided with standard benefits, including various
health and life insurance benefits. Lakeland also makes contributions to the
Bank's profit sharing plan on behalf of executive officers, as well as all other
employees. The Board of Directors authorized a contribution to the Profit
Sharing Plan of $200,000 in 1997. The total profit sharing contribution made on
behalf of Mr. Zande is included in the column entitled "All Other Compensation"
in the Summary Compensation Table. The Company has not granted stock options to
its executive officers.
The Board believes that an appropriate compensation program can help in
fostering Lakeland's growth. The Board seeks to reflect an appropriate balance
between providing rewards to executive officers while at the same time
effectively controlling cash compensation costs. The Board intends to continue
monitoring Lakeland's compensation program so that this balance is appropriately
maintained.
By: The Board of Directors
Bruce G. Bohuny Robert B. Nicholson
Mary Ann Deacon John Pier, Jr.
John W. Fredericks Arthur L. Zande
Mark J. Fredericks
- 9 -
<PAGE>
PERFORMANCE GRAPH
------------------
The following chart compares the Company's cumulative total shareholder return
(on a dividend reinvested basis) over the past five years with the Nasdaq Market
Index and the Peer Group Index. The Peer Group Index is comprised of Media
General Financial Services' Middle Atlantic Banks Group which consists of 133
financial institutions.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG LAKELAND BANCORP,
NASDAQ MARKET INDEX AND MG GROUP INDEX
[GRAPH]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG LAKELAND BANCORP, NASDAQ MARKET INDEX AND MG GROUP INDEX
<CAPTION>
Measurement Period LAKELAND NASDAQ MG GROUP
(Fiscal Year Covered) BANCORP MARKET INDEX INDEX
- -------------------- ---------- ------------ ----------
<S> <C> <C> <C>
Measurement Pt-
1992 $100 $100 $100
FYE 12/31/1993 $126.45 $124.23 $119.95
FYE 12/31/1994 $158.77 $117.94 $125.94
FYE 12/31/1995 $210.61 $179.10 $163.35
FYE 12/31/1996 $266.04 $253.66 $202.99
FYE 12/31/1997 $315.93 $375.28 $248.30
</TABLE>
ASSUMES $100 INVESTED ON JAN 01, 1993
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC 31, 1997
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------------------
Radics & Co., LLC, certified public accountants, has been auditing Lakeland and
Lakeland Bank since 1982 and has been selected by the Board of Directors to
examine and report on Lakeland's financial statements for the year ending
December 31, 1998. Lakeland does not anticipate that a representative will be
present at the annual meeting. Any questions relating to the 1997 financial
statements will be answered by Lakeland's management.
OTHER BUSINESS
---------------
Management is not aware of any other business to be brought up at the meeting
for action by stockholders at such meeting other than the matters described in
the notice. However, the enclosed Proxy will confer discretionary authority
with respect to matters which are not known to management at the time of
printing hereof and which may come properly before the meeting.
- 10 -
<PAGE>
SHAREHOLDER PROPOSALS
----------------------
Shareholder proposals for the next Annual Meeting to be held in May 1999 must be
received in writing by Lakeland by December 20, 1998, in order to be included in
the next annual Proxy Statement.
You are cordially invited to attend the Annual Meeting in person, if possible.
Your participation in the meeting and discussion of Lakeland's affairs will be
welcomed.
By Order of the Board of Directors
BRUCE G. BOHUNY, SECRETARY
Oak Ridge, New Jersey
April 20, 1998
A COPY OF LAKELAND'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1997,
INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY STATEMENT. THE ANNUAL
REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL OR AS A COMMUNICATION
BY MEANS OF WHICH ANY SOLICITATION IS TO BE MADE.
A copy of Lakeland Bancorp, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1997, filed with the Securities and Exchange Commission, is
available (excluding exhibits) without cost to shareholders upon written request
made to Bruce G. Bohuny, Lakeland Bank, 250 Oak Ridge Road, Oak Ridge, New
Jersey 07438.
- 11 -
