<PAGE>
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
Pamrapo 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.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
PAMRAPO BANCORP, INC.
611 Avenue C
Bayonne, New Jersey 07002
(201) 339-4600
March 30, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Pamrapo Bancorp, Inc. (the "Company"), the holding company for Pamrapo Savings
Bank, S.L.A. (the "Bank") which will be held on April 29, 1998, at 11:00 a.m.,
at Hi-Hat Caterers, 180 West 54th Street, Bayonne, New Jersey.
The attached Notice of Annual Meeting of Stockholders and the Proxy
Statement describe the formal business to be transacted at the Annual Meeting.
Directors and officers of Pamrapo Bancorp, Inc. as well as representatives of
Radics & Co., LLC, the Company's independent auditors, will be present at the
Annual Meeting to make a statement if they desire to do so and to respond to any
questions that our stockholders may have regarding the business to be
transacted.
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
its stockholders. For the reasons set forth in the proxy statement, the Board
unanimously recommends a vote "FOR" each of the nominees as directors specified
under Proposal I and "FOR" Proposal II, the ratification of Radics & Co., LLC as
the Company's auditors.
Please sign and return the enclosed proxy card promptly. Your cooperation
is appreciated since a majority of the common stock must be represented, either
in person or by proxy, to constitute a quorum for the conduct of business.
On behalf of the Board of Directors and all the employees of the Company
and the Bank, I wish to thank you for your continued support. We appreciate your
interest.
Sincerely,
William J. Campbell
President and Chief
Executive Officer
<PAGE>
PAMRAPO BANCORP, INC.
611 Avenue C
Bayonne, New Jersey 07002
(201) 339-4600
-----------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 29, 1998
-----------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Pamrapo Bancorp, Inc. (the "Company") will be held at Hi-Hat
Caterers, 180 West 54th Street, Bayonne, New Jersey, on April 29, 1998, at 11:00
a.m.
A proxy statement and proxy card for this Annual Meeting are enclosed
herewith. The Annual Meeting is for the purpose of considering and voting upon
the following matters:
1. The election of two directors for terms of three years each or until
their successors are elected and qualified; and
2. The ratification of Radics & Co., LLC as independent auditors of the
Company for the fiscal year ending December 31, 1998.
In addition, such other matters as may properly come before the Annual
Meeting or any adjournments thereof will be considered at and voted upon at the
Annual Meeting.
The Board of Directors has established March 12, 1998, as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and at any adjournments thereof. Only record holders of the
Common Stock of the Company as of the close of business on that date will be
entitled to vote at the Annual Meeting or any adjournments thereof. In the event
there are not sufficient votes for a quorum or to approve or ratify any of the
forgoing proposals at the time of the Annual Meeting, the Annual Meeting may be
adjourned in order to permit further solicitation of proxies by the Company. A
list of stockholders entitled to vote at the Annual Meeting will be available at
Pamrapo Bancorp, Inc., 611 Avenue C, Bayonne, New Jersey 07002, for a period of
twenty days prior to the Annual Meeting and also will be available for
inspection at the Annual Meeting itself.
By Order of the Board of Directors
Margaret Russo
Secretary
Bayonne, New Jersey
March 30, 1998
<PAGE>
PAMRAPO BANCORP, INC.
-----------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 29, 1998
-----------------------------------
Solicitation and Voting of Proxies
This proxy statement is being furnished to stockholders of Pamrapo Bancorp,
Inc. ("Pamrapo Bancorp" or the "Company") in connection with the solicitation by
the Company's board of directors (the "Board of Directors" or "Board") of
proxies to be used at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held at Hi-Hat Caterers, 180 West 54th Street, Bayonne, New Jersey, on
April 29, 1998, at 11:00 a.m., and at any adjournments thereof. The 1997 Annual
Report to Stockholders, including financial statements for the fiscal year ended
December 31, 1997, accompanies this proxy statement, which is first being mailed
to stockholders on or about April 3, 1998.
Regardless of the number of shares of Common Stock owned, it is important
that stockholders be represented by proxy or present in person at the Annual
Meeting. Stockholders are requested to vote by completing the enclosed proxy
card and returning it signed and dated in the enclosed postage-paid envelope.
Stockholders are urged to indicate their vote in the spaces provided on the
proxy card. Proxies solicited by the Board of Directors of Pamrapo Bancorp will
be voted in accordance with the directions given therein. Where no instructions
are indicated, signed proxies will be voted "FOR" each of the nominees as
directors specified under Proposal I and "FOR" Proposal II, the ratification of
auditors.
Other than the matters listed on the attached Notice of Annual Meeting of
Stockholders, the Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy card,
however, confers on the designated proxyholders discretionary authority to vote
the shares of Common Stock in accordance with their best judgment on such other
business, if any, that may properly come before the Annual Meeting or any
adjournments thereof.
A proxy may be revoked at any time prior to its exercise by the filing of
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting, filing a notice of revocation with the Secretary and voting in
person. However, if you are a stockholder whose shares are not registered in
your own name, you will need additional documentation from your recordholder to
vote personally at the Annual Meeting.
<PAGE>
The cost of solicitation of proxies on behalf of management will be borne
by Pamrapo Bancorp. In addition to the solicitation of proxies by mail, Regan &
Associates, Inc. ("Regan"), a proxy solicitation firm, will assist the Company
in soliciting proxies for the Annual Meeting and will be paid a fee of $5,000,
plus out-of-pocket expenses. Proxies may also be solicited personally or by
telephone by directors, officers and regular employees of the Company and
Pamrapo Savings Bank, S.L.A. (the "Bank"), without additional compensation
therefor. Pamrapo Bancorp will also request persons, firms and corporations
holding shares in their names, or in the name of their nominees, which are
beneficially owned by others, to send proxy material to and obtain proxies from
such beneficial owners, and will reimburse such holders for their reasonable
expenses in doing so.
Voting Securities
The securities which may be voted at the Annual Meeting consist of shares
of common stock of Pamrapo Bancorp (the "Common Stock"), with each share
entitling its owner to one vote on all matters to be voted on at the Annual
Meeting except as described below. The close of business on March 12, 1998 has
been established by the Board of Directors as the record date (the "Record
Date") for the determination of stockholders entitled to notice of and to vote
at this Annual Meeting and any adjournments thereof. The total number of shares
of Common Stock outstanding on the Record Date was 2,843,000 shares.
In accordance with the provisions of the Company's certificate of
incorporation, record holders of Common Stock who beneficially own in excess of
ten percent (10%) of the outstanding shares of Common Stock (the "Limit") are
not entitled to any vote with respect to the shares held in excess of the Limit.
A person or entity is deemed to beneficially own shares owned by an affiliate
of, as well as by persons acting in concert with, such person or entity. The
Company's certificate of incorporation authorizes the Board of Directors (i) to
make all determinations necessary to implement and apply the Limit, including
determining whether persons or entities are acting in concert, and (ii) to
demand that any person who is reasonably believed to beneficially own stock in
excess of the Limit supply information to the Company to enable the Board of
Directors to implement and apply the Limit.
The presence, in person or by proxy, of at least a majority of the total
number of shares of Common Stock entitled to vote (after giving effect to the
Limit described above, if applicable) is necessary to constitute a quorum at the
Annual Meeting. In the event there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to the election of directors, the proxy card being provided by the Board
of Directors enables a stockholder to vote "FOR" the election of the nominees
proposed by the Board, or to "WITHHOLD AUTHORITY" to vote for one or more of the
nominees being proposed. Under Delaware law and the Company's certificate of
incorporation and bylaws, directors are elected by a plurality of votes cast,
without regard to either (i) broker non-votes, or (ii) proxies as to which
authority to vote for one or more of the nominees being proposed is withheld.
2
<PAGE>
As to the ratification of independent auditors and all other matters that
may properly come before the Annual Meeting, by checking the appropriate box, a
stockholder may: (i) vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii)
"ABSTAIN" from voting on such item. Under the Company's certificate of
incorporation and bylaws, unless otherwise required by law, such matters shall
be determined by a majority of votes cast without regard to (a) broker non-
votes, or (b) proxies marked "ABSTAIN" as to that matter.
Proxies solicited hereby will be returned to the proxy solicitors or the
Company's transfer agent, and will be tabulated by inspectors of election
designated by the Company, who will not be employed by, or a director of, the
Company or any of its affiliates. After the final adjournment of the Annual
Meeting, the proxies will be returned to the Company for safekeeping.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the Company's
shares of Common Stock outstanding on the Record Date. Persons and groups owning
in excess of 5% of the Company's Common Stock are required to file certain
reports regarding such ownership with the Company and with the Securities and
Exchange Commission ("SEC"), in accordance with Sections 13(d) and 13(g) of the
Securities Exchange Act of 1934 ("Exchange Act"). Other than those persons
listed below, the Company is not aware of any person or group that owns more
than 5% of the Company's Common Stock as of the Record Date.
Amount and
Nature of
Beneficial Percent of
Title of Class Name and Address of Beneficial Owner Ownership Class
- --------------------------------------------------------------------------------
Common Stock William J. Campbell 279,594 9.83%
c/o Pamrapo Bancorp, Inc.
611 Avenue C
Bayonne, New Jersey 07002
Common Stock Pamrapo Savings Bank, S.L.A. 252,421(1) 8.88%
Employee Stock Ownership Plan and Trust
c/o Pamrapo Savings Bank, S.L.A.
611 Avenue C
Bayonne, New Jersey 07002
Common Stock John Hancock Advisers, Inc. 206,000(2) 7.25%
191 Huntington Avenue
Boston, Massachusetts 02199
(1) The ESOP Trustee, subject to its fiduciary duty, must vote all allocated
shares held in the ESOP in accordance with the instructions of the
participating employees. At December 31, 1997, 252,421 shares of
3
<PAGE>
Common Stock had been allocated to participating employee accounts. As of
this same date, no unallocated shares remained in the ESOP.
(2) Based on information contained in a Schedule 13G filed with the SEC on
January 23, 1998.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL I. ELECTION OF DIRECTORS
The number of directors of Pamrapo Bancorp is currently set at six (6).
Each of the six members of the Board of Directors of Pamrapo Bancorp also serves
as a director of the Bank. Directors are elected for staggered terms of three
years each, with a term of office of only one class of directors expiring in
each year. Directors serve until their successors are elected and qualified.
Dr. Jaime Portela and James Kennedy have been nominated to stand for
election at the Annual Meeting. Both of the nominees named are presently
directors of the Company and the Bank. No person being nominated by the
Nominating Committee of the Board of Directors as a director is being proposed
for election pursuant to any agreement or understanding between any person and
Pamrapo Bancorp. Unless authority to vote for the directors is withheld, it is
intended that the shares represented by the enclosed proxy card if executed and
returned will be voted FOR the election of the nominees.
In the event that any nominee is unable or declines to serve for any
reason, it is intended that proxies will be voted for the election of the other
nominee named and for such other person as may be designated by the present
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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
Information With Respect to Nominees, Continuing Directors and Executive
Officers
The following table sets forth, as of the Record Date, the names of the
nominees, continuing directors, "Named Executive Officers" as defined below, and
their ages, a brief description of their recent business experience, including
present occupations and employment, certain directorships held by each, the year
in which each became a director of the Bank and the year in which their term (or
in the case of the nominees, their proposed term) as director of the Company
expires. This table also sets forth the number of shares of Common Stock and
the percentage thereof beneficially owned by each director and Named Executive
Officer and all directors and executive officers as a group. Ownership
information is based upon information furnished by the respective individuals.
4
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Name and Principal Occupation Expiration Stock
at Present and for the Past Five Director of Beneficially Percent
Years Age Since (1) Term Owned(2) of Class
- -------------------------------- --- --------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Nominees:
Dr. Jaime Portela 66 1977 2001 19,044 .67%*
Retired Bayonne physician
James Kennedy 64 1994 2001 1,604 .06%*
Retired executive of J.C.
Penney and Co.
Continuing Directors:
William J. Campbell 60 1987 2000 279,594 9.83%
President and Chief Executive
Officer of the Company
Executive Vice President from
1965 until being made
President
and Chief Executive Officer in
1970
John A. Morecraft 76 1982 2000 78,578(3) 2.76%
Vice Chairman of the
Board of the Bank since
1987; President of John A.
Morecraft, Inc., a construction
firm, since 1949
Daniel J. Massarelli 66 1960 1999 96,975 3.41%
Chairman of the Board of the
Company; Chairman of the
Board
of the Bank since February
1987;
Owner and operator of
pharmacy
since 1963 and registered
pharmacist
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Name and Principal Occupation Expiration Stock
at Present and for the Past Five Director of Beneficially Percent
Years Age Since (1) Term Owned(2) of Class
- -------------------------------- --- --------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Francis J. O'Donnell 70 1993 1999 13,400 .47%*
Former owner of O'Donnell
Agency, an independent real
estate and insurance agency
Named Executive Officers:
Gary J. Thomas 49 -- -- 83,160 2.93%
Vice President, Treasurer and
Chief Financial Officer of the
Company and Bank
Robert A. Hughes 59 -- -- 37,722 1.33%
Vice President of the Company
and Bank
Stock ownership of all directors -- -- -- 610,077(4)(5) 21.46%
and executive officers as a group
(8 persons)
</TABLE>
- -----------------------------------------
* Does not exceed 1.0% of the Company's voting securities.
(1) Includes years of service as a director of the Bank.
(2) Each person or relative of such person whose shares are included
herein, exercises sole (or shared with spouse, relative or affiliate)
voting and dispositive powers as to the shares reported.
(3) Includes 45,578 shares held by John A. Morecraft Profit Sharing Plan.
(4) Includes the shares noted in the footnotes above.
(5) Includes 42,249 shares allocated to executive officers under the ESOP.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 (the "Exchange
Act") requires the Company's officers (as defined in regulations promulgated by
the Securities and Exchange Commission ("SEC") thereunder) and directors, and
persons who own more than ten percent (10%) of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on a review of copies of such reports of ownership
furnished to the Company, or written representations that no forms were
necessary, the Company believes that
6
<PAGE>
during the past fiscal year it complied with all filing requirements applicable
to its officers, directors and greater than ten percent beneficial owners.
Meetings of the Board and Committees of the Board
The Board of Directors of the Company held six meetings in 1997. The
Board of Directors of the Bank held 13 meetings in 1997. The Board of Directors
of the Bank maintains an Executive Committee and jointly maintains an Audit
Committee with the Company. No director of the Company attended fewer than
seventy-five percent (75%) in the aggregate of the total number of the Board
meetings held and the total number of committee meetings on which such director
served during 1997.
The joint Audit Committee of the Company and the Bank is comprised of
Messrs. Kennedy, Massarelli, and O'Donnell. This committee is responsible for
reviewing and reporting to the Board on the Company's financial condition and
reviewing the audit reports of the Company from its internal and independent
auditors. The committee met four times in 1997.
The full Board of Directors of the Company acts as a nominating
committee (the "Nominating Committee") for the annual selection of nominees for
election as directors. While the Board of Directors will consider nominees
recommended by stockholders, it has not actively solicited recommendations from
stockholders for nominees nor established procedures for this purpose.
Nominations by stockholders must comply with certain procedural and
informational requirements set forth in the Company's bylaws. See "ADDITIONAL
INFORMATION--Notice of Business to Be Conducted at an Annual Meeting." The Board
of Directors met once during the past fiscal year in its capacity as the
Nominating Committee.
Directors Compensation
Directors Fees. Directors of the Bank receive an annual retainer of
$5,000. Directors of the Company receive $500 for each Board of Directors
meeting of the Company attended. Directors of the Bank receive $650 for each
Board meeting attended and $550 for each committee meeting attended, except for
the Chairman who receives $750 for each Board meeting attended and $650 for each
committee meeting attended. Directors who are also full time employees of the
Bank receive no fees for attending meetings or other compensation in their
capacity as directors. Directors who participate in the inspections made in the
course of the loan application process of the Bank are compensated at $150 for
every inspection made in Bayonne and $250 for inspections made outside of the
Bayonne area, plus a mileage allowance.
Outside Directors' Consultation and Retirement Plan. Under the Bank's
Outside Directors' Consultation and Retirement Plan, a director who is not an
officer or employee of the Bank, who has served as a director for at least
twenty years, and who agrees to provide continuing service to the Bank, will be
eligible, upon retirement, to receive one year of benefits for every two years
of prior service on the Board.
7
<PAGE>
Executive Compensation
The report of the Personnel Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 (the "Securities Act") or the Exchange Act, except as to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
Personnel Committee Report on Executive Compensation. Under rules
established by the SEC, the Company is required to provide certain data and
information in regard to the compensation and benefits provided to the Company's
Chief Executive Officer and the other executive officers of the Company. The
disclosure requirements for the Chief Executive Officer and the other executive
officers include the use of tables and a report explaining the rationale and
considerations that led to fundamental compensation decisions affecting those
individuals. In fulfillment of this requirement, the personnel committee of the
Bank (the "Personnel Committee"), at the direction of the Board of Directors has
prepared the following report for inclusion in this proxy statement.
General. The Company is the parent company of the Bank and does not pay
-------
any cash compensation to the executive officers of the Company, other than fees
for Board of Directors meetings. Therefore, the Company does not maintain a
compensation committee. The Personnel Committee of the Board of Directors of the
Bank is responsible for establishing the compensation levels and benefits for
executive officers of the Bank, who also serve as executive officers of the
Company and for reviewing recommendations of management for compensation and
benefits for other officers and employees of the Bank. The Personnel Committee
consists of Messrs. Morecraft, Massarelli and Portela, who are all outside
directors.
Compensation Policies. The Personnel Committee has the following goals
---------------------
for compensation programs impacting the executive officers of the Company and
the Bank:
. to provide motivation for the executive officers to enhance
stockholder value by linking their compensation to the value
of the Company's Common Stock;
. to retain the executive officers who have led the Company to
high performance levels and allow the Bank to attract high
quality executive officers in the future by providing total
compensation opportunities which are consistent with
competitive norms of the industry and the Company's level of
performance; and
. to maintain reasonable "fixed" compensation costs by targeting
base salaries at a competitive average.
In addition, in order to align the interests and performance of its executive
officers with the long term interests of its stockholders, the Company and the
Bank adopted plans which reward the executives for delivering long term value to
the Company and the Bank through stock ownership.
8
<PAGE>
The executive compensation package available to executive officers is
composed of the following components:
(i) base salary;
(ii) annual bonus awards;
(iii) long term incentive compensation, including options and stock
awards.
Mr. Campbell has employment agreements which specify a minimum base salary and
require periodic review of such salary. In addition, executive officers
participate in other benefit plans available to all employees including the
Employee Stock Ownership Plan and the 401(k) Plan.
Base Salary. In determining salary levels, the Personnel Committee
-----------
considers the entire compensation package, including the equity compensation
provided under the Company's stock plans, of the executive officers. The
Personnel Committee meets in the first quarter of each year to determine the
level of any salary increase to take effect as of the beginning of that fiscal
year. The Personnel Committee determines the level of salary increase after
reviewing the qualifications and experience of the executive officers of the
Bank, the compensation paid to persons having similar duties and
responsibilities in other institutions, and the size of the Bank and the
complexity of its operations. The Personnel Committee consulted a survey of
compensation paid to executive officers performing similar duties for depository
institutions and their holding companies, with particular focus on the level of
compensation paid by comparable institutions including some, but not all, of the
companies included in the peer group used for the Stock Performance Graph
provided in this Proxy Statement. The salary levels are intended to be
consistent with competitive practices of comparable institutions and each
executive's level of responsibility.
Although the Personnel Committee's policy in regard to base salary is
subjective and no specific formula is used for decision making, the Personnel
Committee considered the overall performance of the Company including the
earnings of the Company and the performance of the individual executive officer.
Annual Bonus Awards. In determining bonus awards, the Personnel
-------------------
Committee considers the entire compensation package of the executive officers.
As discussed under the discussion of base salaries, the bonus awards are
intended to be consistent with competitive practices of comparable financial
institutions and each executive officer's level of responsibility.
The Personnel Committee met during the year to determine bonus
compensation. Although the Personnel Committee's policy in regard to bonus is
subjective and no specific formula is used for decision making, the bonus awards
are aimed at reflecting the overall financial performance of the Company, and
the performance of the individual executive officer. The Personnel Committee did
not grant any bonus awards in 1997.
9
<PAGE>
Long Term Incentive Compensation. The Company and the Bank maintain the
--------------------------------
Incentive Option Plan and the management recognition and retention plan,
respectively, under which executive officers may receive discretionary grants
and awards. The Personnel Committee believes the stock ownership is a
significant incentive in building a stockholder's wealth and aligning the
interests of employees and stockholders. In connection with the Company's
initial public offering all the executive officers received grants and awards
which had vesting periods of twenty percent (20%) per year beginning on November
10, 1990. In addition, the Personnel Committee granted additional awards to
certain executive officers. All such awards have fully vested. The Personnel
Committee did not make any additional awards during 1997.
Compensation of the Chief Executive Officer. After taking into
-------------------------------------------
consideration the factors discussed above, including the overall compensation
package, and the specified performance factors, the Personnel Committee
determined to increase Mr. Campbell's base salary by $70,000 over the previous
year. Mr. Campbell did not receive an annual bonus award for 1997. His
compensation generally is comparable to the compensation paid by peer
institutions in the Bank's market area.
Personnel Committee
John A. Morecraft Dan Massarelli Dr. Jaime Portela
10
<PAGE>
Stock Performance Graph. The following graph shows a five year
comparison of stockholder return on the Company's Common Stock based on the
market price of the Common Stock assuming reinvestment of dividends, with the
cumulative total returns of companies on the Russell 2000 Index and the SNL
$250M to $500M Thrift Index supplied by SNL Securities, Inc.
Comparative Five-Year Total Returns
Pamrapo Bancorp, Inc., Russell 2000 Index and
SNL $250M to $500M Thrift Index
(Performance Results Through 12/31/97)
[LINE GRAPH APPEARS HERE]
Date Pamrapo Bancorp, Inc. Russell 2000 Index SNL $250M-$500M Thrift Index
- ---- --------------------- ------------------ ----------------------------
12/31/92 100.0 100.0 100.0
12/31/93 130.18 115.68 145.30
12/31/94 170.06 113.39 158.30
12/31/95 228.71 145.63 219.58
12/31/96 223.48 169.74 270.58
12/31/97 318.91 207.42 458.52
11
<PAGE>
Summary Compensation Table. The following table shows, for the years ending
December 31, 1997, 1996 and 1995, the cash compensation paid by the Company and
the Bank, as well as certain other compensation paid or accrued for those years,
to the Chief Executive Officer and any other executive officer of the Company
who earned and/or received salary and bonus in excess of $100,000 (the "Named
Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards Payouts
Securities
Restricted Underlying
Other Annual Stock Options/ LTIP All Other
Position Year Salary Bonus Compensation Awards SARs Payouts Compensation
(1)(2) ($) (3) (#) (4) ($)
($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. 1997 $218,885 $27,071(5) $ -- $ -- -- None $73,371(6)(7)
Campbell 1996 214,500 8,121(5) -- -- -- None 4,750
Chief Executive 1995 214,500 33,125 -- -- -- None 148,211
Officer and
President
Gary J. Thomas 1997 $112,300 $8,121(5) -- -- -- None $41,849(6)(7)
Vice President 1996 111,750 6,497(5) -- -- -- None 4,750
Treasurer and 1995 103,615 6,500(5) -- -- -- None 71,556
Chief
Financial
Officer
Robert A. 1997 $99,246 $8,121(5) -- -- -- None $30,725(6)(7)
Hughes 1996 98,750 6,497(5) -- -- -- None 4,750
Vice President 1995 91,269 6,500(5) -- -- -- None 54,352
</TABLE>
- -----------------------
(1) Includes amounts of salary deferred pursuant to the Pamrapo Savings
Bank, S.L.A. 401(k) plan. Participants may elect to have up to 10% of
their annual compensation deferred.
(2) Includes amounts paid for services rendered to the Bank's service
corporation.
(3) For 1997, 1996, and 1995 there were no (a) perquisites over the lesser
of $50,000 or 10% of the individual's total salary and bonus for the
year; (b) payments of above-market preferential earnings on deferred
compensation; (c) payments of earnings with respect to long term
incentive plans prior to settlement or maturation; (d) tax payment
reimbursements; or (e) preferential discounts on stock.
(4) For fiscal years 1997, 1996 and 1995, the Bank had no long-term
incentive plans in existence and therefore made no payouts or awards
under such plans.
(5) Includes only an amount for a Christmas bonus.
(6) Includes $4,750, $4,750 and $4,750, respectively, contributed by the
Bank to the account of Messrs. Campbell, Thomas and Hughes pursuant to
the Bank's 401(k) Plan.
(7) Includes $68,621, $37,099, and $25,975, respectively, contributed by
the Bank to the accounts of Messrs. Campbell, Thomas and Hughes
pursuant to the Bank's ESOP Plan.
12
<PAGE>
Employment Agreements. William J. Campbell's employment agreements with
the Bank and Company provide for three-year terms. On each anniversary date of
the agreements, the agreements automatically are extended for an additional
year, unless notice of non-renewal is given by the Bank and the Company so that
the remaining terms shall be three years. The current aggregate annual base
salary under the agreements may be increased at the discretion of the Board of
Directors. In addition to the base salary, each agreement provides, among other
things, for participation in stock option plans and other fringe benefits
applicable to executive personnel.
Each agreement provides for termination by the Bank and Company for
"cause," as defined in the agreements, at any time. In the event the Bank and
Company choose to terminate Mr. Campbell's employment for reasons other than for
cause, or in the event of his resignation from the Bank and Company upon failure
to re-elect him to his current offices, a material lessening of his functions,
duties or responsibilities, or upon liquidation, dissolution, consolidation or
merger in which the Bank or the Company are not the resulting entity, or a
breach of the agreements by the Bank or the Company, he or, in the event of
death, his beneficiary as the case may be, would be entitled to a severance
payment equal to the greater of (i) three times his average annual salary over
the previous three years, or (ii) the payments owed for the remaining term of
the agreement. The Bank and Company would also continue the executive's life,
health and disability coverage for the remaining term of the agreements or, if
earlier, until the executive is employed by another employer. If termination
results from a change in control, of the Bank or the Company, as defined in the
agreements, Mr. Campbell would be entitled to (i) a severance payment equal to
three times his average annual salary over the previous three years paid to him
under the agreements and (ii) continued benefits as described above. In the
event that a change in control resulting in the termination of employment
occurred based on the current annual compensation, Mr. Campbell would receive
approximately $647,885, in addition to other non-cash benefits provided for
under the agreement.
Special Termination Agreements. Gary J. Thomas has a special
termination agreement with the Bank and the Company and Robert A. Hughes has a
special termination agreement with the Company. All three agreements are for a
term of three years, which term automatically was extended for an additional
year upon the first anniversary date of the date of the agreement and will be
automatically extended at each anniversary date thereafter such that the
remaining term is three years. Mr. Thomas' agreements provide that at any time
following a change in control of the Company or the Bank, if the Company or the
Bank terminate Mr. Thomas' employment with the Company or the Bank for any
reason other than "cause" (as defined in the agreements), or if Mr. Thomas
terminates his employment following demotion, loss of title, office, significant
authority, a reduction in compensation, or relocation of his principal place of
employment, Mr. Thomas will be entitled to receive a payment in an amount equal
to three times his respective average annual compensation for the three previous
years of his employment with the Bank. Mr. Hughes' agreement provides that at
any time following a change in control of the Company or the Bank, if the
Company terminates Mr. Hughes' employment for any reason other than "cause" (as
defined in the agreement), or if Mr. Hughes terminates his employment following
demotion, loss of title, office, significant authority, a reduction in
compensation, or relocation of his principal place of employment, Mr. Hughes
will be entitled to receive a payment in an amount
13
<PAGE>
equal to three times his respective average annual compensation for the three
previous years of his employment with the Company and the Bank. If a change in
control occurs, based on current annual compensation, the amount payable to
Messrs. Thomas and Hughes would be approximately $327,665 and $289,265,
respectively. Certain insurance coverage maintained by the Bank at the time of
any such termination would be continued for a three-year period.
Payments under the employment agreements in the event of a change in
control may constitute excess parachute payments under Section 280G of the
Internal Revenue Code (the "Code") for executive officers, resulting in the
imposition of an excise tax on the recipient and denial of the deduction for
such excess amounts to the Company and the Bank.
Incentive Option Plan. The Company maintains an Incentive Option Plan
which provides discretionary awards to officers and employees of the Bank as
determined by the Personnel Committee. The following table shows options
exercised by the Named Executive Officers during 1997, including the aggregate
value of gains on the date of exercise. In addition, the table provides certain
information with respect to the number of shares of Common Stock represented by
outstanding stock options held by the Named Executive Officers as of December
31, 1997. Also reported are the values for "in-the-money" options which
represent the positive spread between the exercise price of any such existing
stock options and the year-end price of the Common Stock.
Aggregated Options/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Options/SAR Values
<TABLE>
<CAPTION>
Number Value of
Shares of Securities Unexercised
Acquired Value Underlying Unexercised In-the-Money
On Exercise Realized Options/SARs at Options/SARs at
(1)(2) ($) December 31, 1997 December 31, 1997
Name (#) (1)(2) (3)
(#) ($)
- -------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Campbell -- $-- -- -- $-- $--
Gary J. Thomas -- -- -- -- -- --
Robert A. Hughes 1,030 14,544(4) -- -- -- --
</TABLE>
- --------------
(1) The options for Mr. Hughes had an exercise price of $6.38 and commenced
vesting on March 3, 1993 at a rate of 20% per year of the original
number of option granted.
(2) Options are subject to limited stock appreciation rights pursuant to
which options, to the extent outstanding for at least six months, may
be exercised in the event of a change in control of the Company. Upon
the exercise of a limited right, the optionee would receive a cash
payment equal to the difference between the exercise price of the
related option on the date of grant and the fair market value of the
underlying shares of Common Stock on the date the limited right is
exercised.
(3) The market price of the Common Stock on December 31, 1997 was $27.25.
14
<PAGE>
(4) The market price of the Common Stock on March 3, 1997, the date Mr. Hughes
exercised his options, was $20.50.
Retirement Plan. The Bank maintains the Retirement Plan of Pamrapo
Savings Bank, S.L.A. (the "Retirement Plan"), which is a defined benefit pension
plan, for the benefit of salaried employees employed by the Bank. Under the
Retirement Plan's funding method, the actuarial present value of projected
benefits of each individual is allocated on a level basis over the expected
future earnings period through the assumed retirement date. The table below
presents annual benefits under the Retirement Plan assuming retirement during
1997 at various levels of compensation and years of credited service.
<TABLE>
<CAPTION>
Estimated Annual Retirement Benefit Payable at Age 65
Ten Year Certain and Life Annuity
to an Employee Retiring in 1996
-------------------------------------------------------------------------------------------
Years of Credited Service (1)
-------------------------------------------------------------------------------------------
Final Average
Earnings (2) 10 15 20 25 30 35 or More
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 25,000 $2,750 $4,125 $5,500 $6,675 $8,250 $9,625
$ 50,000 $6,328 $9,491 $12,655 $15,819 $18,963 $22,146
$100,000 $13,628 $20,741 $27,655 $34,569 $41,483 $48,396
$150,000 $21,326 $31,991 $42,655 $63,319 $63,983 $74,646
$200,000(3) $22,828 $34,241 $45,655 $67,089 $68,483 $79,896
</TABLE>
- ------------------------------------------
(1) As of December 31, 1997, William J. Campbell, Gary J. Thomas and Robert
A. Hughes had 34, 22 and 7 years of credited service, respectively.
(2) The covered compensation under the Retirement Plan includes the salary
and bonus for the Named Executive Officer, as disclosed in the "Summary
Compensation Table."
(3) $160,000 is the maximum salary limitation for computation of benefits
under the Tax Reform Act of 1986, for the 1997 Plan year.
Supplemental Executive Retirement Plan. The Board of Directors of the
Bank adopted a Supplemental Executive Retirement Plan ("SERP") in 1989 for the
benefit of key employees of the Bank. This plan is intended to constitute a
non-qualified, deferred retirement plan. Persons eligible to participate will be
designated by the Board of Directors from time to time and upon terms and
conditions as the Board of Directors shall agree upon. A participant who retires
at age 65 (the "Normal Retirement Age") will be entitled to an annual retirement
benefit equal to seventy-five percent (75%) of his compensation, at the
effective date of retirement, reduced by his Retirement Plan annual benefit plus
an amount equal to any reduction in Company contributions on behalf of the
participant resulting from limitations mandated by the Code.
15
<PAGE>
Participants retiring before the Normal Retirement Age will receive the same
benefits reduced by a percentage based on years of service to the Bank and the
number of years prior to the Normal Retirement Age that the participant retires.
In 1997, the SERP was amended so that should Messrs. Campbell, Thomas or Hughes
receive benefits under the SERP, such benefits will be payable to the recipient
for a period of fifteen (15) years certain.
Indebtedness of Management and Transactions With Certain Related Persons
In the ordinary course of business, the Bank has made loans, and may
continue to make loans in the future, to its officers, directors and employees.
Loans to executive officers and directors are made in the ordinary course of
business, on substantially the same terms including interest rate and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectibility or
present other unfavorable features except as noted below.
As of December 31, 1997, Mr. William J. Campbell had one loan
outstanding which were made on preferential terms. Mr. Campbell has a mortgage
loan with a fixed interest rate of 5.25% which was originated in April 1973. The
highest balance outstanding on such loan during fiscal 1997 was $36,650. The
balance of the loan at December 31, 1997 was $34,919. Mr. Campbell also had an
equity loan with a fixed interest rate of 8.00% which was originated in April
1987. The highest balance outstanding on such loan during fiscal 1997 was
$2,932, with no balance remaining at December 31, 1997. Mr. Gary Thomas has a
mortgage loan from the Bank with a fixed interest rate of 8.00% which was
originated in September 1986 on preferential terms. The highest balance
outstanding on the loan in fiscal 1997 was $148,737. The balance of the loan at
December 31, 1997 was $145,540.
PROPOSAL II. RATIFICATION OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December
31, 1997 were Radics & Co., LLC. The Company's Board of Directors has
re-appointed Radics & Co., LLC to continue as independent auditors for the Bank
and the Company for the fiscal year ending December 31, 1998, subject to
ratification of such appointment by the stockholders. Representatives of Radics
& Co., LLC are expected to attend the Annual Meeting. They will be given an
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions from stockholders present at the Annual
Meeting.
Unless marked to the contrary, the shares represented by the enclosed
proxy card will be voted FOR ratification of the appointment of Radics & Co.,
LLC as the independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF RADICS & CO., LLC AS THE INDEPENDENT AUDITORS OF THE COMPANY.
16
<PAGE>
ADDITIONAL INFORMATION
Stockholder Proposals For 1999 Annual Meeting
To be included in the proxy statement and form of proxy for the annual
meeting of stockholders to be held in 1999, a stockholder proposal must be
received by the Secretary of the Company at the address set forth on the
attached Notice of Annual Meeting of Stockholders, not later than December 1,
1998. Any such proposal will be subject to Rule 14a-8 of the rules and
regulations of the SEC.
Notice of Business to be Conducted at an Annual Meeting
The bylaws of the Company provide an advance notice procedure for
certain business to be brought before the Annual Meeting. In order for a
stockholder to properly bring business before the Annual Meeting, the
stockholder must give written notice to the Secretary of the Company not less
than thirty (30) days before the time originally fixed for such meeting;
provided, however, that in the event that less than forty (40) days' notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be received not later
than the close of business on the tenth day following the day on which such
notice of the date of the Annual Meeting was mailed or such public disclosure
was made. The notice must include the stockholder's name, record address and the
class and number of shares owned by the stockholder and describe briefly the
proposed business, the reasons for bringing the business before the Annual
Meeting, and any material interest of the stockholder in the proposed business.
In the case of nominations to the Board, certain information regarding the
nominee must be provided.
Although the bylaw provisions do not give the Board of Directors any
power to approve or disapprove of stockholder nominations for the election of
directors or any other business desired by a stockholder to be conducted at the
Annual Meeting, the bylaw provisions may have the effect of precluding a
nomination for the election of directors or precluding the conduct of business
at a particular meeting if the proper procedures are not followed, and may
discourage or deter a third party from conducting a solicitation of proxies to
elect its own slate of directors or otherwise attempt to obtain control of the
Company, even if the conduct of such business or such attempt might be
beneficial to the Company and its stockholders.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
17
<PAGE>
Whether or not you intend to be present at this Annual Meeting, you are
urged to return your proxy promptly. If you are present at this Annual Meeting
and wish to vote your shares in person, your proxy may be revoked upon request.
A COPY OF THE FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, AS FILED
WITH THE SEC WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD
DATE UPON WRITTEN REQUEST TO THE SECRETARY, PAMRAPO BANCORP, INC., 611 AVENUE C,
BAYONNE, NEW JERSEY 07002.
By Order of the Board of Directors
Margaret Russo, Secretary
Bayonne, New Jersey
March 30, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU HAD PLANNED TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED
TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
18
<PAGE>
LOGO
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PAMRAPO BANCORP, INC.
--------------
The undersigned hereby appoints the official proxy committee (the
"Committee") consisting of all members of the Board of Directors of Pamrapo
Bancorp, Inc. (the "Company"), each with full power of substitution, as
attorneys and proxies to represent the undersigned at the annual meeting of the
stockholders of Pamrapo Bancorp, Inc. to be held at Hi-Hat Caterers, 180 West
54th Street, Bayonne, New Jersey, on April 29, 1998, at 11:00 a.m., and at any
adjournments thereof, to vote the same number of shares and as fully as the
undersigned would be entitled to vote if then personally present in the manner
directed by the undersigned.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE:
FOR THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1; AND
FOR THE RATIFICATION OF RADICS & CO., LLC AS INDEPENDENT AUDITORS OF THE
COMPANY IN PROPOSAL II.
THIS PROXY IS REVOCABLE AND WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEES SPECIFIED UNDER PROPOSAL I AND FOR THE
RATIFICATION OF INDEPENDENT AUDITORS IN PROPOSAL II; AND THE COMMITTEE IS
AUTHORIZED, IN ACCORDANCE WITH ITS JUDGMENT, TO VOTE UPON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
<PAGE>
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSALS I AND II.
PROPOSAL I. ELECTION OF PROPOSAL II. The [_] FOR
DIRECTORS ratification of
Radics & Co., LLC [_] AGAINST
as Independent
Auditors for the [_] ABSTAIN
fiscal year
ending December
31,1998:
[_] Vote FOR all nominees
listed below.
[_] WITHHOLD AUTHORITY to
vote for one or more of the
nominees listed below.
Dr. Jaime Portela and James THE UNDERSIGNED ACKNOWLEDGES RECEIPT
Kennedy FROM THE COMPANY PRIOR TO THE EXECU-
TION OF THIS PROXY OF A NOTICE OF AN-
(INSTRUCTION: TO WITHHOLD AUTHORITY NUAL MEETING AND OF A PROXY STATEMENT
TO VOTE FOR ANY INDIVIDUAL NOMINEE, DATED MARCH 30, 1998.
WRITE THAT NOMINEE'S NAME ON THE
LINE PROVIDED BELOW.)
Date: _____________, 1998
- ------------------------------------ -------------------------------------
SIGNATURE(S)
-------------------------------------
NOTE: PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON. WHEN SIGNING AS
ATTORNEY, EXECUTOR, TRUSTEE,
ADMINISTRATOR OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH. IF SHARES
ARE HELD JOINTLY, EACH HOLDER MAY
SIGN BUT ONLY ONE SIGNATURE IS
REQUIRED.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
