<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 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:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
PAMRAPO BANCORP, INC.
611 Avenue C
Bayonne, New Jersey 07002
(201) 339-4600
March 29, 1999
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 28, 1999, 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,
/s/ William J. Campbell
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 28, 1999
----------------
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 28, 1999, 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, 1999.
In addition, such other matters as may properly come before the Annual
Meeting or any adjournments thereof will be considered and voted upon at the
Annual Meeting.
The Board of Directors has established March 11, 1999, 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 recordholders 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
/s/ Margaret Russo
Margaret Russo
Secretary
Bayonne, New Jersey
March 29, 1999
<PAGE>
PAMRAPO BANCORP, INC.
----------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 28, 1999
----------------
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 28, 1999, at 11:00 a.m., and at any adjournments thereof. The
1998 Annual Report to Stockholders, including financial statements for the
fiscal year ended December 31, 1998, accompanies this proxy statement, which
is first being mailed to stockholders on or about March 29, 1999.
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.
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 $3,250,
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 11, 1999 has
been established by the Board of Directors as the record date (the "Record
Date") for the determination of stockholders entitled
1
<PAGE>
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
2,842,924 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.
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 be 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.
2
<PAGE>
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.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent of
Title of Class Name and Address of Beneficial Owner Ownership Class
- -------------- ------------------------------------ ---------- ----------
<S> <C> <C> <C>
Common Stock William J. Campbell 280,584 9.87%
c/o Pamrapo Bancorp, Inc.
611 Avenue C
Bayonne, New Jersey 07002
Common Stock Pamrapo Savings Bank, S.L.A. 255,660(1) 9.00%
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) 7.20%
191 Huntington Avenue
Boston, Massachusetts 02199
</TABLE>
- --------
(1) The Employee Stock Ownership Plan ("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, 1998, 255,660 shares of 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 28, 1999.
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.
Daniel J. Massarelli and Francis J. O'Donnell 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.
3
<PAGE>
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.
<TABLE>
<CAPTION>
Shares of
Common Stock
Name and Principal Occupation Director Expiration Beneficially Percent
at Present and for the Past Five Years Age Since (1) of Term Owned(2) of Class
- --------------------------------------- --- --------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
Nominees:
Daniel J. Massarelli........ 67 1960 2002 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
Francis J. O'Donnell........ 71 1993 2002 17,000 *
Former owner of O'Donnell
Agency, an independent real
estate and insurance agency
Continuing Directors:
Dr. Jaime Portela........... 67 1977 2001 19,044 *
Retired Bayonne physician
James Kennedy............... 65 1994 2001 1,604 *
Retired executive of J.C.
Penney and Co.
William J. Campbell......... 61 1987 2000 280,584 9.87%
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........... 77 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
Named Executive Officers:
Gary J. Thomas.............. 50 -- -- 84,749 2.98%
Vice President, Treasurer
and Chief Financial Officer
of the Company and Bank
Robert A. Hughes............ 60 -- -- 37,434 1.32%
Vice President of the
Company and Bank
Stock ownership of all
directors and executive
officers as a group (8
persons)................... -- -- -- 615,968(4)(5) 21.67%
</TABLE>
4
<PAGE>
- --------
*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 42,250 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 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 6 meetings in 1998. The Board of
Directors of the Bank held 12 meetings in 1998. 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 1998.
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 1998.
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
$10,000. 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 every
inspection made outside of the Bayonne area, plus a mileage allowance.
5
<PAGE>
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.
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 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.
The executive compensation package available to executive officers is
composed of the following components:
(i) base salary;
(ii) annual bonus awards; and
(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.
6
<PAGE>
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 1998.
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 1998.
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 not to
increase Mr. Campbell's base salary over the previous year. Additionally, Mr.
Campbell did not receive an annual bonus award for 1998. 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
7
<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
Thrifts Index supplied by SNL Securities, LLP.
Comparative Five-Year Total Returns
Pamrapo Bancorp, Inc., Russell 2000 Index and
SNL $250M to $500M Thrifts Index
(Performance Results Through 12/31/98)
[Line graph representing the following data]
<TABLE>
<CAPTION>
Index Period Ending
- ----- ---------------------------------------------------------------------
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Pamrapo 100.00 130.63 175.69 171.67 244.97 224.25
Russell 2000 Index 100.00 98.18 126.11 146.91 179.76 175.19
SNL $250M-$500M Thrift Index 100.00 108.95 151.12 186.22 315.57 273.94
</TABLE>
8
<PAGE>
Summary Compensation Table. The following table shows, for the years ending
December 31, 1998, 1997 and 1996, 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 $100,000 (the
"Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------
Awards Payouts
--------------------- -------
Securities
Underlying
Other Annual Restricted Options/ LTIP All Other
Salary Bonus Compensation Stock SARs Payouts Compensation
Position Year (1)(2)($) ($) (3)($) Awards (#) (4)($) ($)
- ------------------------ ---- --------- ------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Campbell..... 1998 $282,200 $27,071(5) $ -- $ -- -- None $ 5,000(6)
Chief Executive 1997 218,885 27,071(5) -- -- -- None 73,371
Officer and President 1996 214,500 8,121(5) -- -- -- None 4,750
Gary J. Thomas.......... 1998 $121,380 $ 8,663(5) -- -- -- None $ 5,000(6)
Vice President 1997 112,300 8,121(5) -- -- -- None 41,849
Treasurer and Chief 1996 111,750 6,497(5) -- -- -- None 4,750
Financial Officer
Robert A. Hughes........ 1998 $106,900 $ 8,663(5) -- -- -- None $ 5,000(6)
Vice President 1997 99,246 8,121(5) -- -- -- None 30,725
1996 98,750 6,497(5) -- -- -- None 4,750
</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 fiscal years 1998, 1997, and 1996 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 1998, 1997 and 1996, 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 $5,000, $5,000 and $5,000, respectively, contributed by the Bank
to the account of Messrs. Campbell, Thomas and Hughes pursuant to the
Bank's 401(k) Plan.
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 his
life, health and disability coverage for the remaining term of the agreements
or, if earlier, until he is employed by another employer. If termination
results from a change in
9
<PAGE>
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
$715,585, 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 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 $345,430 and $304,896, 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. No options were exercised by the Named
Executive Officers during 1998. In addition, no outstanding stock options were
held by the Named Executive Officers as of December 31, 1998.
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
1998 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 1998
-----------------------------------------------------------------------
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 $ 6,875 $ 8,250 $ 9,626
$ 50,000................... $ 8,255 $ 9,382 $12,510 $15,637 $18,765 $21,892
$100,000................... $13,755 $20,632 $27,510 $34,387 $41,285 $41,142
$150,000................... $21,255 $31,882 $42,510 $53,137 $63,765 $74,392
$160,000................... $22,755 $34,132 $45,510 $56,887 $68,265 $79,642
$200,000(3)................ $22,755 $34,132 $45,510 $56,887 $68,265 $79,642
</TABLE>
10
<PAGE>
- --------
(1) As of December 31, 1998, William J. Campbell, Gary J. Thomas and Robert A.
Hughes had 35, 23 and 8 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 1998 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.
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, 1998, Mr. William J. Campbell had one loan outstanding
which was 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 1998 was $34,919. The balance
of the loan at December 31, 1998 was $33,136. 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 1998 was $145,540. The balance of the loan at December 31, 1998
was $142,078.
PROPOSAL II. RATIFICATION OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
1998 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, 1999, 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.
11
<PAGE>
ADDITIONAL INFORMATION
Stockholder Proposals For Annual Meeting Held in 2000
To be included in the proxy statement and form of proxy for the Annual
Meeting of Stockholders to be held in 2000, 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 9,
1999. Any such proposal will be subject to Rule 14a-8 of the rules and
regulations of the SEC. Unless notice that a stockholder intends to present a
proposal at the Company's 2000 Annual Meeting of Stockholders is received by
the Company on or before February 14, 2000, the Company will have
discretionary authority to vote on any stockholder proposal presented at the
meeting.
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.
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, 1998, 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
/s/ Margaret Russo
Margaret Russo
Secretary
Bayonne, New Jersey
March 29, 1999
12
<PAGE>
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.
13
<PAGE>
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 28, 1999, 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 I; 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, 1999:
[_] Vote FOR all nominees
listed below.
[_] WITHHOLD AUTHORITY to
vote for one or more of the
nominees listed below.
Daniel J. Massarelli and The undersigned acknowledges receipt
Francis J. O'Donnell 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 29, 1999.
write that nominee's name on the
line provided below.)
Date: _____________, 1999
- ------------------------------------ ______________________________________
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.
