PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
BCB FINANCIAL SERVICES CORPORATION
_________________________________________________________________
(Name of Registrant as Specified in its Charter)
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
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:
_________________________________________________________________
<PAGE>
March 14, 1997
DEAR SHAREHOLDER:
We are pleased to invite you to the 1997 Annual Meeting of
Shareholders of BCB Financial Services Corporation to be held on
Wednesday, April 16, 1997 at 3:00 p.m., at Stokesay Castle, Hill
Road and Spook Lane, Reading, PA.
The Notice of the Annual Meeting and the Proxy Statement on
the following pages address the formal business of the meeting,
which includes the election of four (4) Class C Directors, the
ratification of the selection of auditors for the year ending
December 31, 1997 and the approval of the 1996 Stock Option Plan.
At the Annual Meeting, the Corporation's management will address
other corporate matters which may be of interest to you and will
be available to respond to your questions.
Please sign, date and return the accompanying Proxy in the
postage prepaid envelope, as soon as possible, even if you plan
to attend the meeting.
Sincerely,
Nelson R. Oswald
Chairman of the Board of Directors
and President
<PAGE>
__________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 16, 1997
__________________________________
TO THE SHAREHOLDERS OF BCB FINANCIAL SERVICES CORPORATION:
Notice is hereby given that the Annual Meeting of
Shareholders of BCB FINANCIAL SERVICES CORPORATION (the
"Corporation") will be held at 3:00 p.m., on Wednesday, April 16,
1997 at Stokesay Castle, Hill Road and Spook Lane, Reading,
Pennsylvania for the following purposes:
1. To elect four (4) Class C Directors to serve for a
three-year term and until their successors are elected and
qualified;
2. To ratify the selection of Beard & Company, Inc.,
Certified Public Accountants, of Reading, Pennsylvania, as
the auditors for the Corporation for the year ending
December 31, 1997;
3. To approve the Corporation's 1996 Stock Option
Plan; (the "1996 Plan")
4. To transact such other business as may properly
come before the Annual Meeting and any adjournment or
postponement thereof.
In accordance with the By-laws of the Corporation and action
of the Board of Directors, only those shareholders of record at
the close of business on March 3, 1997, will be entitled to
notice of and to vote at the Annual Meeting.
A copy of the Corporation's Annual Report for the fiscal
year ended December 31, 1996 is being mailed with this Notice.
Copies of the Corporation's Annual Report for the 1995 fiscal
year may be obtained at no cost by contacting Nelson R. Oswald,
Chairman of the Board and President, at Berks County Bank, 400
Washington Street, Post Office Box 1097, Reading, Pennsylvania
19603, telephone number: (610) 376-5933.
You are urged to mark, sign, date and promptly return your
Proxy in the enclosed envelope so that your shares may be voted
in accordance with your wishes and in order that the presence of
a quorum may be assured. The prompt return of your signed Proxy,
regardless of the number of shares you hold, will aid the
Corporation in reducing the expense of additional proxy
solicitation. The giving of such Proxy does not affect your
right to vote in person if you attend the meeting and give
written notice to the Secretary of the Corporation.
By Order of the Board of Directors,
Harold C. Bossard
Secretary
March 14, 1997
<PAGE>
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 16, 1997
GENERAL
Introduction, Date, Time and Place of Annual Meeting
This Proxy Statement is being furnished in connection with
the solicitation by the Board of Directors of BCB FINANCIAL
SERVICES CORPORATION (the "Corporation"), of proxies to be voted
at the Annual Meeting of Shareholders of the Corporation to be
held on Wednesday, April 16, 1997 at 3:00 p.m., at Stokesay
Castle, Hill Road and Spook Lane, Reading, Pennsylvania, and at
any adjournment or postponement of the Annual Meeting.
The principal executive office of the Corporation is located
at Berks County Bank (the "Bank"), The Madison Building, 400
Washington Street, Reading, Pennsylvania 19601. The telephone
number for the Corporation is (610) 376-5933. All inquiries
should be directed to Nelson R. Oswald, Chairman of the Board of
Directors and President of the Corporation. The Bank is a
wholly-owned subsidiary of the Corporation.
Solicitation and Voting of Proxies
This Proxy Statement and the enclosed form of proxy (the
"Proxy") are first being sent to shareholders of the Corporation
on or about March 14, 1997.
Shares represented by the accompanying Proxy, if properly
signed and returned, will be voted in accordance with the
specifications thereon. Any Proxy not specifying to the contrary
will be voted FOR the election of the nominees for Class C
Director named below, FOR the ratification of the selection of
Beard & Company, Inc., Certified Public Accountants, of Reading,
Pennsylvania, as the auditors for the Corporation for the year
ending December 31, 1997 and FOR the approval of the 1996 Stock
Option Plan (the "1996 Plan"). Execution and return of the
enclosed Proxy will not affect a shareholder's right to attend
the Annual Meeting and, after giving written notice to the
Secretary of the Corporation, to vote in person. The cost of
preparing, assembling, printing, mailing and soliciting Proxies,
and any additional material which the Corporation may furnish in
connection with the Annual Meeting, will be borne by the
Corporation. In addition to the use of the mails, certain
directors, officers and employees or other representatives of the
Corporation and the Bank may solicit Proxies personally, by
telephone, telegraph and fax. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries
to forward Proxy solicitation material to the beneficial owners
of stock held of record by these persons, and, upon request
therefor, the Corporation will reimburse them for their
reasonable forwarding expenses.
Revocability of Proxy
A shareholder who returns a Proxy may revoke the Proxy at
any time before it is voted only: (1) by giving written notice of
revocation to Harold C. Bossard, Secretary of BCB Financial
Services Corporation, at 400 Washington Street, Post Office Box
1097, Reading, Pennsylvania 19603; (2) by executing a later-dated
Proxy and giving written notice thereof to the Secretary of the
Corporation; or (3) by voting in person after giving written
notice to the Secretary of the Corporation.
Voting Securities and Record Date
At the close of business on Monday, March 3, 1997, the
Corporation had 2,071,217 shares of Common Stock outstanding.
Only holders of Common Stock of record at the close of
business on March 3, 1997 will be entitled to notice of and to
vote at the Annual Meeting. Cumulative voting rights do not
exist with respect to the election of directors. On all matters
to come before the Annual Meeting, each share of Common Stock is
entitled to one vote, and, accordingly, holders of Common Stock
are entitled to cast a total of 2,071,217 votes at the Annual
Meeting.
Quorum
Pursuant to Article 3, Section 3.1, of the By-laws of the
Corporation, the presence, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes which all
shareholders are entitled to cast shall constitute a quorum.
Abstentions and broker non-votes will not constitute or be
counted as "votes" cast for purposes of the Annual Meeting but
will be used for purposes of determining whether a quorum exists
at the Annual Shareholders' Meeting.
PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION'S COMMON STOCK
Principal Owners
The following table sets forth, as of March 3, 1997, the
name and address of each person who owns of record or is known by
the Board of Directors to be the beneficial owner of more than
five percent (5%) of the Corporation's outstanding Common Stock,
the number of shares beneficially owned by such person, and the
percentage of the Corporation's outstanding Common Stock so
owned.
Name and Address Amount
of and Nature of Percent of
Beneficial Owner Beneficial Ownership (1) Class
National Properties, Inc. 149,627 7.22%
and RPI Company*
150 East Swedesford Road
Wayne, Pennsylvania 19087
Nelson R. Oswald** 116,087 5.48%
6908 Boyertown Pike
Douglassville, Pennsylvania 19518
_________________
* Includes (i) 148,995 shares of Common Stock held by
National Properties, Inc. and RPI Company which are
entities controlled by or under the control of
Mr. Jeffery L. King and (ii) 632 shares of Common Stock
held by Mr. King's children and wife.
** Includes (i) 69,231 shares of Common Stock held jointly
by Mr. Oswald and his spouse, (ii) 218 shares of Common
Stock held by Mr. Oswald's son, (iii) 37,038 shares
subject to stock options granted to Mr. Oswald which
are exercisable within 60 days and (iv) 9,600 shares
subject to the 1996 Plan granted to Mr. Oswald which
are exercisable within 60 days, pending shareholder
approval.
Beneficial Ownership by Officers, Directors and Nominees
The following table sets forth as of March 3, 1997, the
amount and percentage of the Common Stock of the Corporation
beneficially owned by each director, each nominee for director,
each named executive officer, and all directors and executive
officers of the Corporation as a group.
Name of Beneficial Amount and Nature of Percent
Owner Beneficial Ownership(1)(2) of Class
DIRECTORS AND NOMINEES:
Harold C. Bossard (3)(6) 19,635 0.95%
Edward J. Edwards (3)(7) 28,421 1.37%
Lewis R. Frame, Jr. (4)(8) 75,919 3.65%
Ivan H. Gordon (5)(9) 15,232 0.73%
Jeffrey W. Hayes(5)(10) 54,830 2.64%
Alfred B. Mast (5)(11) 33,222 1.60%
Nelson R. Oswald (3)(12) 116,087 5.48%
Wesley R. Pace (3)(13) 35,143 1.69%
Floyd S. Weber (4)(14) 35,842 1.73%
Randall S. Weeber (4)(15) 15,848 0.76%
OTHER NAMED EXECUTIVE OFFICERS:
Robert D. McHugh, Jr. (16) 29,798 1.42%
All Directors and Executive 476,589 21.52%(17)
Officers as a Group (15 persons)
____________________
(1) The securities "beneficially owned" by an individual
are determined in accordance with the definitions of
"beneficial ownership" set forth in the General Rules
and Regulations of the Securities and Exchange
Commission and may include securities owned by or for
the individual's spouse and minor children and any
other relative who has the same home, as well as
securities to which the individual has or shares voting
or investment power or has the right to acquire
beneficial ownership within sixty (60) days after
March 3, 1997. Beneficial ownership may be disclaimed
as to certain of the securities. Shares of the
Corporation's common stock held in the 401(k)
Retirement Savings Plan are not included in ownership
amounts above. These shares are voted by the Plan
Administrators.
(2) Information furnished by the directors, executive
officers and the Corporation.
(3 A current Director and Nominee for Class C Director
whose term expires in 1997; but, will continue through
2000, if elected at the 1997 annual meeting.
(4) A Class B Director whose term expires in 1999.
(5) A Class A Director whose term expires in 1998.
(6) Includes 13,635 shares of Common Stock held jointly by
Mr. Bossard and his spouse and 6,000 shares subject to
stock options granted to Mr. Bossard which are
exercisable within 60 days.
(7) Includes 22,421 shares of Common Stock held jointly by
Mr. Edwards and his spouse and 6,000 shares subject to
stock granted to Mr. Edwards which are exercisable
within 60 days.
(8) Includes 69,919 shares of Common Stock held
individually by Mr. Frame and 6,000 shares subject to
stock options granted to Mr. Frame which are
exercisable within 60 days.
(9) Includes 5,166 shares of Common Stock held individually
by Mr. Gordon, 4,066 shares of Common Stock held
jointly by Mr. Gordon and his spouse and 6,000 shares
subject to stock options granted to Mr. Gordon which
are exercisable within 60 days.
(10) Includes 31,502 shares of Common Stock held
individually by Mr. Hayes, 14,684 shares of Common
Stock held by Irene D. Hayes, his spouse, 2,644 shares
of Common Stock held by Irene D. Hayes, custodian for
daughter and 6,000 shares subject to stock options
granted to Mr. Hayes which are exercisable within 60
days.
(11) Includes 26,900 shares of Common Stock held
individually by Mr. Mast, 322 shares of Common Stock
held by Mr. Mast's children and 6,000 shares subject to
stock options granted to Mr. Mast which are exercisable
within 60 days.
(12) Includes 69,231 shares of Common Stock held jointly by
Mr. Oswald and his spouse, 218 shares of Common Stock
held by Mr. Oswald's son and 37,038 of stock options
granted to Mr. Oswald which are exercisable within 60
days and 9,600 shares of stock options granted to Mr.
Oswald under the 1996 Plan which are exercisable within
60 days, pending shareholder approval.
(13) Includes 29,008 shares of Common Stock held jointly by
Mr. Pace and his spouse, 135 shares of Common Stock
held by Mr. Pace's son and 6,000 shares subject to
stock options granted to Mr. Pace which are exercisable
within 60 days.
(14) Includes 29,842 shares of Common Stock held jointly by
Mr. Weber and his spouse and 6,000 shares subject to
stock options granted to Mr. Weber which are
exercisable within 60 days.
(15) Includes 238 shares of Common Stock held individually
by Mr. Weeber, 6,493 shares of Common Stock held by
Randall S. Weeber Profit Sharing Keough Plan, 3117
shares held by Weeber Realtors and 6,000 shares subject
to stock options granted to Mr. Weeber which are
exercisable within 60 days.
(16) Includes 7,620 shares of Common Stock held individually
by Mr. McHugh and 13,178 shares of stock options
granted to Mr. McHugh which are exercisable within 60
days and 9,000 shares of stock options granted to Mr.
McHugh under the 1996 plan which are exercisable within
60 days, pending shareholder approval.
(17) The percent of class assumes all outstanding stock
options issued to the executive officers and
non-employee directors have been exercised and,
therefore, on a pro rata basis, 2,214,573 shares of
Common Stock would be outstanding.
PROPOSAL 1
ELECTION OF DIRECTORS
The By-laws of the Corporation provide that the
Corporation's business and affairs shall be managed by its Board
of Directors. The By-laws provide that the number of directors
shall not be less than five (5) nor more than twenty-five (25)
and that the Board of Directors shall be divided into three
classes, each class to be elected for a term of three years.
Within the foregoing limits, the Board of Directors may from time
to time fix the number of directors and their respective
classifications. Vacancies on the Board of Directors shall be
filled by a majority of the remaining members of the Board of
Directors, though less than a quorum, and each person so
appointed shall be a director until the expiration of the term of
office of the class of directors to which he was appointed.
At the 1997 Annual Meeting of Shareholders, four (4) Class C
Directors shall be elected to serve for a three-year term and
until their successors are elected and qualified. The four
nominees who reserve the highest number of votes cast at the
Annual Meeting will be elected as Class C. Directors.
Unless otherwise instructed, the Proxyholders will vote the
Proxies received by them for the election of the four (4)
nominees named below. If any nominee should become unable to
serve for any reason, Proxies will be voted in favor of a
substitute nominee as the Board of Directors of the Corporation
shall determine. The Board of Directors has no reason to believe
that the nominees named will be unable to serve, if elected.
INFORMATION AS TO NOMINEES, DIRECTORS AND EXECUTIVE OFFICERS
The following table contains certain information with
respect to the nominees for Class C Directors, Class A Directors
whose term expires in 1998, Class B Directors whose terms expire
in 1999 and executive officers.
<TABLE>
<caption
NOMINEES FOR CLASS C DIRECTORS
TO SERVE UNTIL 2000
Principal Occupation Director or
Age as of for Past Five Years and Executive Officer
March 3, Position Held with the of Corporation/
Name 1997 Corporation and the Bank Bank/Since
<S> <C> <C> <C>
Harold C. Bossard 79 Retired President of Bernville 1987/1987
(2)(4) Bank, N.A.; Secretary of the
Corporation and the Bank
Edwards J. Edwards 70 Real Estate Sales and Appraisals 1987/1987
(1)(4)(6) E. J. Edwards Real Estate
Nelson R. Oswald 51 President, Chief Executive Officer 1987/1987
(1)(3)(4)(5) and Chairman of the Board of
Directors of the Corporation and
the Bank
Wesley R. Pace 48 Chairman of the Board, Air 1987/1987
(1)(2)(3)(6) Compressor Services Co.; President,
Wesrock Capital Co.; Consultant
<CAPTION>
CONTINUING
CLASS A DIRECTORS
TO SERVE UNTIL 1998
Principal Occupation Director or
Age as of for Past Five Years and Executive Officer
March 3, Position Held with the of Corporation/
Name 1997 Corporation and the Bank Bank/Since
<S> <C> <C> <C>
Ivan H. Gordon 63 Chairman, Gloray Company 1987/1987
(2)(6)
Jeffrey W. Hayes 50 President, Hayes Construction, Inc. 1988/1988
(1)(3)
Alfred B. Mast 53 President, Mast and Moyer, Inc. 1987/1987
(4)
<CAPTION>
CONTINUING
CLASS B DIRECTORS
TO SERVE UNTIL 1999
Principal Occupation Director or
Age as of for Past Five Years and Executive Officer
March 3, Position Held with the of Corporation/
Name 1997 Corporation and the Bank Bank/Since
<S> <C> <C> <C>
Lewis R. Frame, Jr 38 Vice President, Frame Group, Ltd. 1988/1988
(3)(6)
Floyd S. Weber 64 Partner, King's Potato Chip Co. & 1987/1987
(1)(2)(5)(6) King Distributing Co.
Randall S. Weeber 41 President, Weeber Realtors; Realtor 1987/1987
(4) Sales Associate, Berkshire Real
Estate Network
<CAPTION>
EXECUTIVE OFFICERS
Principal Occupation Director or
Age as of for Past Five Years and Executive Officer
March 3, Position Held with the of Corporation/
Name 1997 Corporation and the Bank Bank/Since
<S> <C> <C> <C>
Robert D. McHugh, Jr. 42 Senior Vice President/Treasurer of 1987/1987
the Corporation and Bank
Sherelyn A. Ammon 39 Vice President of Corporation and 1994/1994
Bank
Steven A. Ehrlich 35 Vice President of Corporation and 1994/1994
Bank
Norman E. Heilenman 49 Vice President of Corporation and 1994/1994
Bank; previous occupation: Chief
Financial Officer - Robertson
Brothers Company
Donna L. Rickert, 30 Controller of Corporation and Bank; 1994/1994
CPA previous occupation: Accountant -
Beard & Co., Inc.
</TABLE>
(1) Member of the Executive Committee. This committee
meets on an as-needed basis between meetings of the
Board of Directors to decide and take action on any
issues that require attention between Board Meetings.
This committee also performs the functions of the
Nominating Committee. This committee met one time in
1996. All non-employee directors received fees of
$300.00 for each meeting attended prior to July 1, 1996
and $350.00 for each meeting attended after July 1,
1996.
(2) Member of the Audit Committee. The committee
recommends an outside auditor for the year and reviews
the financial statements and progress of the
Corporation and the Bank. This committee met one time
in 1996. All non-employee directors received fees of
$300.00 for each meeting attended prior to July 1, 1996
and $350.00 for each meeting attended after July 1,
1996.
(3) Member of the Property Committee. This committee makes
recommendations concerning building projects and space
needs for the Corporation and Bank. This committee did
not meet in 1996.
(4) Member of the Loan Committee. This committee meets the
second Thursday of each month to review loan asset
quality and credit related matters. This committee met
eleven times in 1996. All non-employee directors
received either fees of $300.00 for each meeting
attended prior to July 1, 1996 and $350.00 for each
meeting attended after July 1, 1996.
(5) Member of the Insurance Committee. This committee
meets to review insurance policies regarding the
Corporation and the Bank. This committee did not meet
in 1996.
(6) Member of the Compensation Committee. This Committee
was formed in 1994 and will meet on an as-needed basis
between meetings of the Board of Directors to discuss
compensation related matters. This committee met three
times in 1996. All non-employee directors received
fees of $300.00 for each meeting attended prior to July
1, 1996 and $350.00 for each meeting attended after
July 1, 1996.
During 1996, the Bank's Board of Directors and the
Corporation's Board of Directors held twelve joint board meetings
and sixteen joint committee meetings. In 1996, non-employee
directors received Three Hundred Dollars ($300.00 prior to July
1st and $350.00 after July 1st) for each jointly held Board of
Directors meeting and committee meeting which they attended.
Director Harold C. Bossard received $100.00 per month as
compensation for services rendered as Secretary to the
Corporation and the Bank. In the aggregate, the Board of
Directors of the Bank and the Corporation received $65,600 for
attending joint Board of Directors meetings and committee
meetings of the Bank and the Corporation.
Each of the Directors attended at least 92% of the combined
total number of meetings of the Corporation's and the Bank's
Board of Directors and the Committees of which he is a member.
A shareholder who desires to propose an individual for
consideration by the Board of Directors as a nominee for director
should submit a proposal in writing to the Secretary of the
Corporation containing the information specified in the
Corporation's By-laws. A shareholder who intends to nominate any
candidate for election to the Board of Directors must notify the
Secretary of the Corporation in writing not less than sixty(60)
days prior to the date of any meeting of shareholders called for
the election of directors.
EXECUTIVE COMPENSATION
Shown below is information concerning the annual
compensation for services in all capacities to the Corporation
and the Bank for the fiscal years ended December 31, 1996, 1995,
and 1994 of those persons who were, at December 31, 1996, (i)
Chief Executive Officer or (ii) Executive Officers of the
Corporation and the Bank to the extent such executive officers'
total annual salary and bonus exceeded $100,000. There were no
other executive officers for whom disclosure would have been
provided but for the fact that such individuals were not serving
at the end of the 1996 fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
Securities
Name Other Restricted Under- All Other
and Annual Stock lying LTIP Compen-
Principal Salary Bonus Compen- Award(s) Options/ Payouts sation
Position Year ($) ($) sation($) ($) SARs(#) ($) ($)(3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nelson R. Oswald, 1996 192,948(1) 50,000 0 0 -- 0 6,138
Chairman of the Board, 1995 180,000 38,048 0 0 -- 0 6,231
President and CEO 1994 168,000 56,821 0 0 14,467 0 6,930
Robert D. McHugh, Jr., 1996 112,000 35,945(2) 0 0 -- 0 6,164
Senior Vice President 1995 100,000 28,474 0 0 -- 0 3,863
and Treasurer 1994 93,000 38,161 0 0 6,201 0 3,649
___________
</TABLE>
(1) 1996 salary includes deferred compensation of $2,948.
(2) 1996 bonus includes the fair value of 826 shares of the
Corporation's Common Stock granted to Mr. McHugh which
equalled 10,945 at January 2, 1996.
(3) Amounts shown represent contributions by the company on
behalf of the named individuals to the Company's 401(k)
Retirement Savings Plan.
The following table sets forth certain information
concerning stock options granted during the fiscal year ended
December 31, 1996 to the named executives:
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARs
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARs EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE
<S> <C> <C> <C> <C>
Nelson R. Oswald 9,600 31.37% 12.40 October 22, 2006
Robert D. McHugh, Jr. 9,000 29.41% 12.40 October 22, 2006
_________________
</TABLE>
(1) All amounts represent incentive stock options; no SARs or
SARs granted in tandem with options were granted during
1996. Terms of outstanding options are for a period of ten
years from the date the option is granted. Options are not
exercisable following an optionee's voluntary termination of
employment other than by reason of retirement or disability.
(2) Under the terms of the 1996 Plan, the exercise price per
share must equal the fair market value on the date the
option is granted. The exercise price may be paid in cash,
in shares of Common Stock valued at fair market value on the
date of exercise or pursuant to a cashless exercise
procedure under which the optionee provides irrevocable
instructions to a brokerage firm to sell the purchased
shares and to remit to the Corporation, out of the sale
proceeds, an amount equal to the exercise price plus all
applicable withholding taxes.
The following table sets forth information concerning the
exercise of options to purchase the Corporation's Common Stock by
the named executive officers during the fiscal year ended
December 31, 1996 as well as the number of securities underlying
unexercised options and the potential value of unexercised
options as of December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND
FISCAL YEAR-END OPTION/SAR VALUES (1)
Number of Value of
Securities Unexercised
Underlying In-the-Money
Options/SARs Options/SARs
Shares at Fiscal at Fiscal
Acquired on Value Year-end (#) Year-end ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
(2) (3) (4)
<S> <C> <C> <C> <C>
Nelson R. Oswald 1,250 $7,530 37,638/9,600 $260,287/$27,360
Robert D. McHugh, Jr. -- -- 13,178/9,000 $ 86,983/$25,650
_________________
</TABLE>
(1) All amounts represent stock options. No SARs or SARs
granted in tandem with stock options were either exercised
during 1996 or outstanding at fiscal year-end 1996.
(2) Represents the aggregate market value of the underlying
shares of Common Stock at the date of exercise minus the
aggregate exercise prices for options exercised.
(3) Unexercisable stock options represent options granted under
the 1996 Stock Option plan. Options will be exercisable
April 22, 1997, pending Shareholder approval.
(4) "In-the-money options" are stock options with respect to
which the market value of the underlying shares of Common
Stock exceeded the exercise price at December 31, 1996. The
value of such options is determined by subtracting the
aggregate exercise price for such options from the aggregate
fair market value of the underlying shares of Common Stock
on December 31, 1996.
Executive Employment Agreement
Nelson R. Oswald and Robert D. McHugh, Jr. each have
Executive Employment Agreements with the Corporation and the
Bank. Mr. Oswald's Executive Employment Agreement originally
dated July 14, 1987, as amended, has been extended through
December 31, 1999. Mr. McHugh's Executive Employment Agreement
originally dated December 31, 1991, has been renewed thru
December 31, 1997. The Executive Employment Agreements specify:
term; the Executive's position and duties; compensation;
benefits; indemnification; and termination rights. Each of the
Executive Employment Agreements also contain a noncompetition
clause and a confidentiality provision which inure to the benefit
of the Corporation and the Bank.
Each of the Executive Employment Agreements contain a
"Change of Control" provision which provides, among other things,
that when any "person" as defined therein, obtains the beneficial
ownership of a specified percentage of stock, the Executive is
entitled to certain payments and benefits from the Corporation
and the Bank. Mr. Oswald's and Mr. McHugh's Agreements also
contain provisions allowing the Corporation and the Bank to
terminate Mr. Oswald's or Mr. McHugh's employment for "Cause" (as
defined).
Under the terms of his Executive Employment Agreement, Mr.
Oswald is a member of the Bank's Board of Directors and was
entitled to an annual salary during 1996 of $190,000. The
Executive Employment Agreement provides that this amount will be
increased by not less than five percent (5%) per year.
Mr. Oswald also receives certain employee benefits: including
life insurance, disability and health insurance, vacation days
and a supplemental retirement plan. The bank provides an
automobile for Mr. Oswald.
Under the terms of his Executive Employment Agreement,
Mr. McHugh was entitled to an annual salary during 1996 of
$112,000 plus a grant of 826 shares of the Corporation's common
stock at the end of each twelve months of employment.
Mr. McHugh's Executive Employment Agreement also provides that
this amount will be increased by not less than five percent (5%)
per year. Mr. McHugh also receives certain employee benefits
including life insurance, disability and health insurance and
vacation days. The Bank also provides Mr. McHugh with an
automobile.
Each of the Executive Employment Agreements provide that if
the Executive's employment is terminated by the Bank other than
for "Cause" as defined therein, or if the Executive terminates
his employment for "Good Reason", as defined therein, the
Executive is entitled to receive certain monetary benefits.
Mr. Oswald is entitled to his full Annual Direct Salary (as
defined) from the date of termination through December 31, 1999,
or an amount equal to one and one-half (1 1/2) of his Annual
Direct Salary, whichever is greater, or to three (3) times his
Annual Direct Salary upon the occurrence of certain merger or
acquisition events. The Bank shall also maintain in full force
and effect certain employee benefits. Mr. McHugh is entitled to
a severance allowance equal to his then Annual Direct Salary from
the date of termination through the following six (6) calendar
months, or to one (1) time his Annual Direct Salary upon the
occurrence of certain merger or acquisition events.
Certain Transactions
Certain directors, executive officers of the Corporation,
beneficial owners of 5% or more of the Common Stock and their
affiliates were customers of and had transactions with the Bank
in the ordinary course of business during the Bank's fiscal year
ended December 31, 1996. Similar transactions may be expected to
take place in the future. It is expected that any other
transactions with directors and officers and their associates in
the future will be conducted on the same basis.
Hayes Construction, Inc., a construction company of which
Jeffrey W. Hayes, a director of the Corporation and the Bank, is
President, received payments of approximately $49,000 in 1996 in
connection with the on-going construction of the Bank's
Muhlenberg Branch Office and $8,800 in 1996 in connection with
the on-going construction of the Bank's Cumru Township Branch;
also $425,000 in 1995 in connection with the construction of the
Bank's Pottstown branch office and $480,000 in 1995 in connection
with the construction of the Bank's Wyomissing Hills branch
office. Such payments were in amounts and on substantially the
same terms and conditions as would have been available to the
Company from an unaffiliated party.
Mast and Moyer, Inc. an insurance agency of which Alfred G.
Mast, a director of the Company and the Bank, is President,
received payments of approximately $141,000 and $74,000 in 1996
and 1995, respectively, in connection with various insurance
policies the Bank has purchased through the insurance agency.
Such payments were in amounts and on substantially the same terms
and conditions as would have been available to the Company from
an unaffiliated party.
At December 31, 1996, the Bank had total loans outstanding
and commitments to loan to directors, executive officers,
beneficial owners of 5% or more of the Common Stock and their
affiliates of $3,800,000, or approximately 19.2% of the total
consolidated equity capital as of that date. Loans to such
persons were made in the ordinary course of business, were made
on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons. The loans did not involve more
than the normal risk of collectibility or present other
unfavorable features.
PROPOSAL 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Unless instructed to the contrary, the Proxies will be voted
for the ratification of the selection of Beard & Company, Inc.,
Certified Public Accountants, of Reading, Pennsylvania, as the
Corporation's independent public accountants for the year ending
December 31, 1997. The Corporation has been advised by Beard &
Company, Inc. that none of its members has any financial interest
in the Corporation. Ratification of the selection of Beard &
Company, Inc. will require the affirmative vote of a majority of
the shares of Common Stock represented in person or by Proxy at
the Annual Meeting. Abstentions and broker non-votes will not
constitute or be counted as "votes" cast for purposes of the
Annual Meeting. Beard & Company, Inc. served as the
Corporation's independent public accountants for the 1996 fiscal
year.
In the event that the shareholders do not ratify the
selection of Beard & Company, Inc., as the Corporation's
independent public accountants to perform audit services for the
1997 fiscal year, another accounting firm may be chosen to
provide audit services for the 1997 fiscal year.
The Board of Directors recommends that the shareholders vote
FOR the ratification of the selection of Beard & Company, Inc. as
the auditors for the Corporation for the year ending December 31,
1997.
Representatives of Beard & Company, Inc., are expected to
attend the Annual Meeting, will be afforded an opportunity to
make a statement if they desire to do so and will be available to
respond to questions from shareholders.
PROPOSAL 3
STOCK OPTION PLAN
Description of the 1996 Stock Option Plan
The Board of Directors believes that the Corporation's stock
option programs constitute an important part of the Corporation's
compensation programs and, accordingly, the Corporation has
adopted a new 1996 Stock Option Plan, (the "1996 Plan") which is
subject to shareholder approval.
Shareholders have previously authorized grants of options to
employees under the BCB Financial Services Corporation 1988
Incentive Stock Option Plan, the BCB Financial Services
Corporation 1989 Stock Option Plan and the BCB Financial Services
Corporation 1994 Stock Option Plan.
The 1996 Plan is designed to improve the performance of the
Corporation and its subsidiaries and, by doing so, to serve the
interests of the shareholders. By encouraging ownership of the
Corporation's shares among those who play significant roles in
the Corporation's success, implementation of the 1996 Plan will
more closely align the interests of the Corporation's key
employees and non-employee directors with those of its
shareholders by relating capital accumulation to increases in
shareholder value. Moreover, adoption of the 1996 Plan should
have a positive effect of the Corporation's ability to attract,
motivate and retain employees and non-employee directors of
outstanding leadership and management ability.
The principal features of the 1996 Plan are described below.
See Exhibit "A" to this Proxy Statement for the full text of the
1996 Plan.
The 1996 Plan will be administered by a committee (the
"Committee") of at least three members of the Board of Directors
(the "Board") who are not employees of the Corporation. Under
the 1996 Plan, the Committee is vested with exclusive authority
to grant options to purchase up to 114,000 shares of the
Corporation's Common Stock (approximately 5.2% of the
Corporations's presently outstanding shares of Common Stock),
subject to adjustment under certain circumstances. The 1996 Plan
authorizes the Committee to administer and interpret the 1996
Plan.
Under the 1996 Plan, both incentive stock options (as
defined in Section 422 of the Internal Revenue Code of 1986, as
amended) and non-qualified stock options may be granted to
eligible employees and non-employees directors of the Corporation
and its subsidiaries. Each non-employee director received a
one-time grant of 6,000 non-qualified options (total of
54,000 non-qualified options). Messrs. Oswald and McHugh were
granted 9,600 and 9,000 incentive stock options, respectively,
pending shareholder approval. A total of 12,000 incentive stock
options were granted to other executive officers, pending
shareholder approval.
The remaining 29,400 options to purchase shares of the
Corporation's common stock are reserved for incentive stock
option grants to key employees and executive officers.
No person who owns immediately before the grant of an
incentive stock option, directly or indirectly, more than
10 percent of the total combined voting power of all classes of
the Corporation's Common Stock, is eligible for the grant of an
incentive stock option. As of March 3, 1997 the Corporation had
approximately 6 key employees who would be eligible to
participate in the 1996 Plan.
Option grants to eligible employees are anticipated to be
made annually. Eligible employees generally include all key
employees of the Corporation and its subsidiaries. Eligible
employees will be selected to receive a grant of options based
upon the recommendation of the Corporation and ratification of
such recommendation by a majority of the members of the Board.
The Committee has the authority to grant options under the
1996 Plan, subject to the approval of a majority of the
disinterested members of the Board. The Committee is composed of
at least three members of the Board, who serve at the discretion
of the Board. The 1996 Plan authorizes the Committee to
administer and interpret the 1996 Plan. Members of the Committee
are each "disinterested persons" as such term is defined under
the rules and regulations adopted by the Securities and Exchange
Commission. Any shares as to which an option expires, lapses
unexercised, or is terminated or canceled, may be subject to a
new option.
Incentive stock options granted under the 1996 Plan may be
exercised for 10 years after the date of grant. Non-qualified
stock options granted under the 1996 Plan may be exercised for 10
years and 1 month after the date of grant. The aggregate fair
market value (determined at the time the option is granted) of
the shares of Common Stock with respect to which incentive stock
options are exercisable for the first time by an optionee during
any calendar year may not exceed $100,000. No employee may
receive option grants in excess of 200,000 shares under the 1996
Plan in any twelve month period. No option may be transferred by
the optionee other than by will or by the laws of descent and
distribution, and each option is exercisable during the
optionee's lifetime only by the optionee. In addition, an option
shall become exercisable only after the holder has completed six
months of continuous employment with the Corporation or a change
of control occurs (as defined in the 1996 Plan) after the date of
grant.
At the election of the holder of a non-qualified option and
subject to the rules established by the Committee, any required
withholding taxes may be satisfied by the Corporation withholding
shares of Common Stock issued on the exercise of a non-qualified
stock option that have a fair market value equal to or less than
any required withholding taxes, delivery by the holder to the
Corporation of sufficient Common Stock to satisfy the withholding
obligation, or delivery by the holder to the Corporation of
sufficient cash to satisfy the withholding obligation.
Under the 1996 Plan, in the event of an optionee's
retirement, incentive stock options lapse at the earlier of three
months from the date of retirement or the term of the option,
while non-qualified options may continue to be exercised during
the term of the option up to 24 months, at the discretion of the
Committee, from the date of retirement. An optionee whose
employment terminates due to death or disability may exercise an
option until the earlier of the term of the option or one year
after such termination of employment.
The Board may amend, suspend or terminate the 1996 Plan at
anytime without shareholder approval, subject to the requirements
of applicable securities and tax laws; provided, however, that
the Board may not, without shareholder approval, amend the 1996
Plan so as to (i) increase the number of shares subject to the
1996 Plan, (ii) change the class of eligible employees, or (iii)
otherwise change the 1996 Plan in any manner deemed material
under applicable federal securities laws. In addition, the Board
may not modify or amend the 1996 Plan with respect to any
outstanding option or impair or cancel any outstanding option
without the consent of the affected optionee.
Tax Consequences
The 1996 Plan permits eligible employees of the Corporation
and its subsidiaries to receive grants of incentive stock
options, which qualify for certain tax benefits. In addition,
the 1996 Plan permits non-employee directors of the Corporation
to receive grants of non-qualified stock options, which do not
qualify for such tax benefits.
Incentive Stock Options. An optionee generally will not be
deemed to receive any income for federal tax purposes at the time
an incentive stock option is granted, nor will the Corporation be
entitled to a tax deduction at that time. Upon the sale or
exchange of the shares at least two years after the grant of the
option and one year after receipt of the shares by the optionee
upon exercise, the optionee will recognize long-term capital gain
or loss upon the sale of such shares equal to the difference
between the amount realized on such sale and the exercise price.
If the foregoing holding periods are not satisfied or the
option is exercised more than three months after the optionee's
employment with the Corporation has terminated, the optionee will
recognize ordinary income equal to the difference between the
exercise price and the lower of the fair market value of the
shares at the date of the option exercise or the sale price of
the shares. If the sale price exceeds the fair market value on
the date of exercise, the gain in excess of the ordinary income
portion will be treated as either long-term or short-term capital
gain, depending on whether the shares have been held for more
than 12 months on the date of sale. Any loss on disposition is a
long-term or short-term capital loss, depending upon whether the
optionee had held the shares for more than 12 months. A
different rule for measuring ordinary income upon such a
premature disposition may apply if the optionee is a director or
10 percent shareholder of the Corporation or an officer of the
Corporation subject to Section 16(b) for the Securities Exchange
Act of 1934. If the Corporation cancels an option, the optionee
recognizes income to the extent of the amount paid by the
Corporation to cancel the option over the optionee's basis in
such option, if any.
No income tax deduction will be allowed to the Corporation
with respect to shares purchased by an optionee upon the exercise
of an incentive stock option, provided that such shares are held
at least two years after the date of grant and at least one year
after the date of exercise. However, if those holding periods
are not satisfied, the Corporation may deduct an amount equal to
the ordinary income recognized by the optionee upon disposition
of the shares.
The exercise of an incentive stock option and the sale of
shares acquired by such exercise could subject an optionee to
alternative minimum tax liability for federal income tax
purposes.
Non-qualified Stock Options. An optionee will not be deemed
to receive any income for federal tax purposes at the time a non-
qualified stock option is granted, nor will the Corporation be
entitled to a tax deduction at that time. At the time of
exercise, however, the optionee will realize ordinary income in
an amount equal to the excess of the market value of the shares
at the time of exercise of the option over the option price of
such shares. The Corporation is allowed federal income tax
deduction in an amount equal to the ordinary income recognized by
the optionee due to the exercise of a non-qualified stock option
at the time of such recognition by the optionee.
Stock-for-Stock Exchange. An optionee who exchanges
"statutory option stock" of the Corporation in payment of the
purchase price upon the exercise of an incentive stock option
will be deemed to make a "disqualifying disposition" of the
statutory option stock so transferred unless the applicable
holding requirements (two years form the date of the grand and
one year after the exercise of an incentive option) with respect
to such statutory option stock are met after the exercise of
incentive stock options and stock acquired under certain other
stock purchase plans. If an optionee exercises non-qualified
stock options by exchanging previously-owned statutory option
stock, the Internal Revenue Service has ruled that the optionee
will not recognize gain on the disposition of the statutory
option stock (assuming the holding period requirements applicable
to such statutory option stock have been satisfied) because of
the non-recognition rule of Code Section 1036.
Under the 1996 plan, each non-employee director was granted
6,000 non-qualified stock options. Messrs Oswald and McHugh were
granted 9,600 and 9,000 incentive stock options respectively,
pending shareholder approval. A total of 12,000 incentive stock
options were granted to other executive officers, pending
shareholder approval. If the 1996 Plan is approved by the
shareholders, the Corporation anticipates that the shares subject
to the Plan will be registered with the Securities and Exchange
Commission and with any applicable state securities commission
where registration is required. The cost of such registrations
will be borne by the Corporation.
As provided above, only key employees and non-employee
directors of the Corporation or its subsidiaries will be eligible
to receive stock options under the 1996 Plan at the discretion of
the Board. This would include the executive officers listed in
the Summary Compensation Table included under the section
entitled "Executive Compensation" in this Proxy Statement.
The stock options previously granted to senior officers of
the Corporation and its subsidiaries under the prior employee
stock option plans, and information on options exercised during
the last fiscal year, are reflected in tables contained in the
section of this Proxy Statement entitled "Executive
Compensation".
New Plan Benefits Table. The following table sets forth the
benefits that would have been received by the following people
pursuant to the 1996 Plan if it had been in effect in 1996:
(i) the executive officers named in the compensation tables
beginning on page 9; (ii) all current executive officers as a
group; and (iii) all current directors who are not executive
officers as a group.
NEW PLAN BENEFITS
1996 Stock Option Plan
Name and Position Dollar Value ($) Number of Units(2)
Nelson R. Oswald (1) 9,600
Chief Executive Officer
and Chairman of the
Board
Robert D. McHugh, Jr. (1) 9,000
Senior Vice President
and Treasurer
All executive officers (1) 30,600
as a group (6 persons)
All directors who are not (1) 54,000
executive officers, as
a group (9 persons)
___________________________
(1) The exercise price for options granted under the 1996 Plan
was the fair market value of the stock underlying the option
on the date the option was granted. On the date of grant,
October 22, 1996, the fair value of the stock was $12.40,
adjusted for the 6-for-5 stock split.
(2) The number of units shown corresponds to the number of the
Corporation's shares underlying options that have been
granted to the optionee(s) shown under the 1996 Stock Option
Plan, subject to shareholder approval.
The Board of Directors recommends that shareholders vote FOR
adoption of the 1996 stock option plan. The affirmative vote of
a majority of all votes cast at the Meeting is required to adopt
the 1996 Stock Option Plan. Abstentions and broker non-votes
will not constitute or be counted as "votes" cast for purposes of
the Meeting. All proxies will be voted "FOR" adoption of the
1996 Stock Option Plan unless a shareholder specifies to the
contrary on such shareholder's proxy card.
SHAREHOLDER PROPOSALS
Any shareholder who, in accordance with and subject to the
provisions of the proxy rules of the Securities and Exchange
Commission, wishes to submit a proposal for inclusion in the
Corporation's Proxy Statement for its 1998 Annual Meeting of
Shareholders must deliver such proposal in writing to the
President of BCB Financial Services Corporation at its principal
executive offices in Reading, Pennsylvania, no later than
November 14, 1997.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's officers and directors and persons who
own more than ten percent of a registered class of the
Corporation's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Corporation with copies
of all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished
to the Corporation, or written representations that no Forms 5
were required, the Corporation believes that, during the fiscal
year ended December 31, 1996, its officers, directors, and
greater than ten-percent beneficial owners complied with
applicable Section 16(a) filing requirements.
OTHER MATTERS
The Board of Directors does not know of any matters to be
presented for consideration other than the matters described in
the Notice of Annual Meeting of Shareholders, but if any matters
are properly presented, it is the intention of the persons named
in the accompanying Proxy to vote on such matters in accordance
with their best judgement.
<PAGE>
EXHIBIT "A"
BCB FINANCIAL SERVICES CORPORATION
1996 STOCK OPTION PLAN
<PAGE>
Article 1. PURPOSE OF THE PLAN
1.1 Purpose - The BCB Financial Services Corporation 1996
Stock Option Plan (the "Plan") is intended to advance
the interests of BCB Financial Services Corporation
(the "Corporation") by providing officers and key
employees who have substantial responsibility for the
direction and management of the Corporation with
additional incentive for them to promote the success of
the Corporation's business, to increase their
proprietary interest in the success of the Corporation,
and to encourage them to remain in its service. These
goals will be effectuated through the granting of
certain stock options. In addition, pursuant to the
provisions of Article 10, non-employee directors will
receive a one-time grant of stock options hereunder.
1.2 Stock Options to be Granted - Incentive Stock Options
within the meaning of Code Section 422(b) and
Nonqualified Stock Options may be granted within the
limitations of the Plan herein described.
Article 2. DEFINITIONS
2.1 "Agreement" - The written instrument evidencing the
grant of an Option. A Participant may be issued one or
more Agreements from time to time, reflecting one or
more options.
2.2 "Bank" - Berks County Bank, a wholly-owned subsidiary
of the Corporation.
2.3 "Board" - The Board of Directors of the Corporation.
2.4 "Code" - The Internal Revenue Code of 1986, as amended.
2.5 "Committee" - The Committee which the Board appoints to
administer the Plan.
2.6 "Common Stock" - The common stock of the Corporation
($2.50 par value) as described in the Corporation's
Articles of Incorporation, or such other stock as shall
be substituted therefor.
2.7 "Corporation" - BCB Financial Services Corporation or
any Subsidiary.
2.8 "Director" - A member of the Board who is not an
Employee, who is also a director of the Bank.
2.9 "Employee" - Any key employee (including officers,
executives and supervisory personnel) of the
Corporation or the Bank.
2.10 "Exchange Act" - The Securities Exchange Act of 1934,
as amended.
2.11 "Incentive Stock Option" - A stock option intended to
satisfy the Requirements of Code Section 422(b).
2.12 "Nonqualified Stock Option" - A stock option other than
an incentive stock option.
2.13 "Optionee" - A Participant who is awarded a Stock
Option pursuant to the provisions of the Plan.
2.14 "Participant" - An Employee selected by the Committee
to receive a grant of an Option under the Plan.
2.15 "Plan" - BCB Financial Services Corporation 1996 Stock
Option Plan.
2.16 "Retirement" - Any date an Employee is entitled to
retire under the Corporation's retirement plans and
shall include normal retirement at age 65, early
retirement at age 62, and retirement at age 60 after
thirty (30) years of service.
2.17 "Securities Act" - The Securities Act of 1933, as
amended.
2.18 "Stock Option" or "option" - An award of a right to
purchase Common Stock pursuant to the provisions of the
Plan.
2.19 "Subsidiary" - A subsidiary corporation as defined in
Code Section 424(f) that is a subsidiary of the
Corporation.
Article 3. ADMINISTRATION OF THE PLAN
3.1 The Committee - The Plan shall be administered by a
Committee of the Board (the "Committee") composed of
those members of the Board (at least three in number)
who are not employees of the Corporation. The Board may
from time to time remove members from, or add members
to, the Committee. Vacancies on the Committee,
howsoever caused, shall be filled by the Board.
3.2 Powers of the Committee -
(a) The Committee shall be vested with full authority
to make such rules and regulations as it deems
necessary or desirable to administer the Plan and
to interpret the provisions of the Plan, unless
otherwise determined by the Board. Any
determination, decision or action of the Committee
in connection with the construction,
interpretation, administration or application of
the Plan shall be final, conclusive and binding
upon all optionees and any person claiming under
or through an Optionee, unless otherwise
determined by the Board.
(b) Subject to the terms, provisions and conditions of
the Plan and subject to review and approval by a
majority of the Board, the Committee shall have
exclusive jurisdiction to:
(i) determine and select the key Employees to be
granted Options (it being understood that
more than one option may be granted to the
same person);
(ii) determine the number of shares subject to
each Option;
(iii) determine the date or dates when the Options
will be granted;
(iv) determine the purchase price of the shares
subject to each option in accordance with
Article 5 of the Plan;
(v) determine the date or dates when each option
may be exercised within the term of the
Option specified pursuant to Article 7 of the
Plan;
(vi) determine whether or not an Option
constitutes an Incentive Stock Option; and
(vii) prescribe the form, which shall be consistent
with the Plan, of the Agreement evidencing
any Options granted under the Plan.
3.3 Terms - The grant of an Option under the Plan shall be
evidenced by an Agreement and may include any terms and
conditions consistent with this Plan, as the Committee
may determine.
3.4 Liability - No member of the Board or the Committee
shall be liable for any action or determination made in
good faith by the Board or the Committee with respect
to this Plan or any Options granted under this Plan.
Article 4. COMMON STOCK SUBJECT TO THE PLAN
4.1 Common Stock Authorized - The aggregate number of
shares of Common Stock for which Options may be granted
under the Plan shall not exceed 95,000 shares. The
limitation established by the preceding sentence shall
be subject to adjustment as provided in Article 9 of
the Plan.
4.2 Shares Available - The Common Stock to be issued upon
exercise of Options granted under the Plan shall be the
Corporation's Common Stock which shall be made
available at the discretion of the Board, either from
authorized but unissued Common Stock or from Common
Stock acquired by the Corporation, including shares
purchased in the open market. In the event that any
outstanding option under the Plan for any reason
expires or is terminated, the shares of Common Stock
allocable to the unexercised portion of such Option may
thereafter be regranted subject to option under the
Plan.
Article 5. STOCK OPTIONS
5.1 Exercise Price - The exercise price of Common Stock
shall be, in the case of an Incentive Stock Option,
100 percent of the fair market value of one share of
Common Stock on the date the Option is granted, except
that the purchase price per share shall be 110 percent
of such fair market value in the case of an Incentive
Stock Option granted to any individual described in
Section 6.2 of the Plan. The exercise price of Common
Stock shall be, in the case of a Nonqualified Stock
Option, not less than 100 percent of the fair market
value of one share of Common Stock on the date the
Option is granted. The exercise price shall be subject
to adjustment only as provided in Article 9 of the
Plan.
5.2 Limitation on Incentive Stock Options - The aggregate
fair market value (determined as of the date an option
is granted) of the stock with respect to which
Incentive Stock options are exercisable for the first
time by any individual in any calendar year (under the
Plan and all other plans maintained by the Corporation)
shall not exceed $100,000.
5.3 Determination of Fair Market Value -
(a) During such time as Common Stock is not listed on
an established stock exchange or exchanges but is
listed in the NASDAQ National Market System, the
fair market value per share shall be the closing
sale price for the Common Stock on the day the
Option is granted. If no sale of Common Stock has
occurred on that day, the fair market value shall
be determined by reference to such price for the
next preceding day on which a sale occurred.
(b) During such time as the Common Stock is not listed
on an established stock exchange or in the NASDAQ
National Market System, fair market value per
share shall be the mean between the closing dealer
"bid" and "asked" prices for the Common Stock for
the day of the grant, and if no "bid" and "asked"
prices are quoted for the day of the grant, the
fair market value shall be determined by reference
to such prices on the next preceding day on which
such prices were quoted.
(c) If the Common Stock is listed on an established
stock exchange or exchanges, the fair market value
shall be deemed to be the closing price of Common
Stock on such stock exchange or exchanges on the
day the Option is granted or, if no sale of Common
Stock has been made on any stock exchange on that
day, the fair market value shall be determined by
reference to such price for the next preceding day
on which a sale occurred.
(d) In the event that the Common Stock is not traded
on an established stock exchange or in the NASDAQ
National Market system, and no closing dealer
"bid" and "asked" prices are available on the date
of a grant, then fair market value will be the
price established by the Committee in good faith.
5.4 Limitation on Grants - Commencing January 1, 1996,
grants of Stock Options to any Employee under this Plan
shall not exceed, in the aggregate, 200,000 Options
during any period of 12 consecutive months. Such
limitations shall be subject to adjustment in the
manner described in Article IX.
5.5 Cashless Exercise - In addition, at the request of a
Participant and to the extent permitted by applicable
law, the Corporation may, in its sole discretion,
selectively approve arrangements with a brokerage firm
under which such brokerage firm, on behalf of the
Participant, shall pay to the Corporation the exercise
price of the Stock Options being exercised, and the
Corporation, pursuant to an irrevocable notice from the
Participant, shall promptly deliver the shares being
purchased to such firm.
Article 6. ELIGIBILITY
6.1 Participation - options shall be granted only to
persons who are Employees of the Corporation, as
determined by the Committee, based upon the
recommendation of the Chief Executive Officer and
ratified by a majority of the members of the Board.
Neither the members of the Committee nor any member of
the Board who is not an employee of the Corporation
shall be eligible to receive an Option under the Plan.
6.2 Incentive Stock Option Eligibility - Notwithstanding
any other provision of the Plan, an individual who owns
more than 10 percent of the total combined voting power
of all classes of outstanding stock of the Corporation
shall not be eligible for the grant of an Incentive
Stock Option, unless the special requirements set forth
in Sections 5.1 and 7.1 of the Plan are satisfied. For
purposes of this Section 6.2, in determining stock
ownership, an individual shall be considered as owning
the stock owned, directly or indirectly, by or for his
or her brothers and sisters (whether by the whole or
half blood), spouse, ancestors and lineal descendants.
Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its
shareholders, partners or beneficiaries. "Outstanding
stock" shall include all stock actually issued and
outstanding immediately before the grant of the Option.
"Outstanding stock" shall not include shares authorized
for issue under outstanding Options held by the
Optionee or by any other person.
6.3 Board Participation - Notwithstanding the provisions of
Section 6.1, any Director shall be granted Options
under this Plan only pursuant to Article 10.
Article 7. TERM AND EXERCISE OF OPTIONS
7.1 Termination - Each Option granted under the Plan shall
terminate on the date determined by the Committee and
approved by a majority of the members of the Board, and
specified in the Agreement; provided, however, that
(i) each intended Incentive Stock Option granted to an
individual described in Section 6.2 of the Plan shall
terminate not later than five years after the date of
the grant, (ii) each other intended Incentive Stock
option shall terminate not later than ten years after
the date of grant, and (iii) each Option granted under
the Plan which is intended to be a Nonqualified Stock
Option shall terminate not later than ten years and one
month after the date of grant. Except as otherwise
provided below, each Option granted under the Plan
shall become exercisable only after the Optionee has
completed six months of continuous employment with the
Corporation or the Bank immediately following the date
of the grant of the Option or a Change of Control
occurs. If a Change of Control occurs, Stock Options
granted hereunder shall become immediately exercisable.
The Committee at its discretion may provide further
limitations on the exercisability of Options granted
under the Plan. An Option may be exercised only during
the continuance of the optionee's employment, except as
provided in Article 8 and shall not be assignable or
transferable by the Optionee other than by will or the
laws of descent and distribution, and during the
lifetime of an Optionee shall be exercisable only by
such Optionee.
7.2 Exercise -
(a) A person electing to exercise an option shall give
written notice to the Corporation of such election
and of the number of shares they have elected to
purchase, in such form as the Committee shall have
prescribed or approved, and shall at the time of
exercise tender the full purchase price of the
shares they have elected to purchase. The
purchase price shall be paid in full, in cash,
upon the exercise of the Option, provided,
however, that in lieu of cash, an optionee may
exercise an option by tendering to the Corporation
shares of Common Stock owned by them and having a
fair market value equal to the cash exercise price
applicable to the Option (with the fair market
value of such stock to be determined in the manner
provided in Section 5.3 hereof) or by delivering a
combination of cash and such shares.
Notwithstanding the foregoing, Common Stock
acquired pursuant to the exercise of an Incentive
Stock Option may not be tendered as payment unless
the holding period requirements of Code
Section 422(a)(1) have been satisfied, and Common
Stock not acquired pursuant to the exercise of an
Incentive Stock option may not be tendered as
payment unless it has been held, beneficially and
of record, for at least one year.
(b) A person holding more than one Option at any
relevant time may, in accordance with the
provisions of the Plan, elect to exercise such
options in any order.
7.3 Change in Control - For purposes of this Article 7, a
Change of Control will be deemed to have occurred
(a) if the Corporation or its shareholders execute an
agreement to dispose of all or substantially all of the
Corporation's assets or Common Stock by means of sale,
merger, consolidation, reorganization, liquidation or
otherwise, as a result of which the Corporation's
shareholders immediately before such transaction will
not own at least seventy-five percent (75%) of the
total combined voting power of all classes of voting
Common Stock of the surviving entity (be it the
Corporation or otherwise) immediately after the
consummation of such transaction or (b) if there is an
actual or threatened change in the ownership of at
least twenty-five percent (25%) of all classes of
voting Common Stock of the Corporation through the
acquisition of, or an offer to acquire such percentage
of the Corporation's voting Common Stock by any persons
or other entities acting as a group, and such
acquisition or offer has not been duly approved by the
Board.
Article 8. TERMINATION OF EMPLOYMENT
8.1 Retirement - In the event of Retirement, an Option
shall lapse at the earlier of the term of the Option
or:
(a) In the case of an Incentive Stock Option, three
months from the date of Retirement; and
(b) in the case of options other than Incentive Stock
Options, up to 24 months, at the discretion of the
Committee, from the date of Retirement.
8.2 Voluntary Termination - In the event of voluntary
termination of employment at the election of the
Optionee or termination at the election of the
Corporation prior to a Change in Control, all Options
shall lapse as of the date of termination. In the
event of termination by the Corporation or any
successor within one year after a Change in Control,
all Options shall lapse at the earlier of the term of
the Option or three months from the date of
termination.
8.3 Death or Disability - In the event of termination due
to death or permanent and total disability, the Option
shall lapse at the earlier of the term of the Option or
one year after termination due to such causes. The
term "permanent and total disability" shall, for
purposes of the Plan, be defined in the same manner as
such term is defined in Code Section 22(e)(3).
Article 9. ADJUSTMENT PROVISIONS
9.1 Share Adjustments -
(a) In the event that the shares of Common Stock of
the Corporation, as presently constituted, shall
be changed into or exchanged for a different
number or kind of shares of stock or other
securities of the Corporation or of another
corporation (whether by reason of merger,
consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise) or
if the number of such shares of stock shall be
increased through the payment of a stock split or
stock dividend, then, subject to the provisions of
Subsection (c) below, there shall be substituted
for or added to each share of stock of the
Corporation which was theretofore appropriated, or
which thereafter may become subject to an option
under the Plan, the number and kind of shares of
stock or other securities into which each
outstanding share of the stock of the Corporation
shall be so changed or for which each such share
shall be exchanged or to which each such share
shall be entitled, as the case may be.
Outstanding Options shall also be appropriately
amended as to price and other terms, as may be
necessary to reflect the foregoing events.
(b) If there shall be any other change in the number
or kind of the outstanding shares of the stock of
the Corporation, or of any stock or other
securities in which such stock shall have been
changed, or for which it shall have been
exchanged, and if a majority of the members of the
Board shall, in its sole discretion, determine
that such change equitably requires an adjustment
in any option which was theretofore granted or
which may thereafter be granted under the Plan,
then such adjustment shall be made in accordance
with such determination.
(c) The grant of an Option pursuant to the Plan shall
not affect in any way the right or power of the
Corporation to make adjustments,
reclassifications, reorganizations or changes of
its capital or business structure, to merge, to
consolidate, to dissolve, to liquidate or to sell
or transfer all or any part of its business or
assets.
9.2 Corporate Changes - A dissolution or liquidation of the
Corporation, or a merger or consolidation in which the
Corporation is not the surviving Corporation, shall
cause each outstanding Option to terminate, except to
the extent that another corporation may and does in the
transaction assume and continue the Option or
substitute its own options.
9.3 Fractional Shares - Fractional shares resulting from
any adjustment in Options pursuant to this Article 9
may be settled as the Board or the Committee (as the
case may be) shall determine.
9.4 Binding Determination - To the extent that the
foregoing adjustments relate to stock or securities of
the Corporation, such adjustments shall be made by the
Board, whose determination in that respect shall be
final, binding and conclusive. Notice of any
adjustment shall be given by the Corporation to each
holder of an Option which shall have been so adjusted.
Article 10. ONE-TIME GRANT OF STOCK OPTIONS TO NON-EMPLOYEE
DIRECTORS
10.1 Grant - Contemporaneous with the effective date of this
Plan and in accordance with the requirements of Section
11.1, each non-employee Director shall automatically be
granted Nonqualified Stock Options to purchase 5,000
shares of the Corporation's Common Stock at the price
of $14.875 per share.
10.2 Termination - Notwithstanding the provisions of
Article 8 hereof, if a Director's service with the
Corporation terminates by reason of Permanent and Total
Disability or Retirement as a director of the
Corporation, any vested Option held by such Director
may be exercised for a period of one year from the date
of such termination or until the expiration of the
Option, whichever is earlier. If a Director's service
with the Corporation terminates by reason of death or
under mutually satisfactory conditions, or if a
Director dies within the one year period following the
termination by reason of Permanent and Total Disability
or Retirement from active service as a director of the
Corporation or within the one year period following
termination under mutually satisfactory conditions, any
vested Option held by such Director may be exercised
for a period of one year from the date of such
termination or post-termination death, as the case may
be, or until the expiration of the stated term of the
Option, whichever is earlier. All applicable
provisions of this Plan not inconsistent with this
Article 10 shall apply to Options granted to Directors.
Article 11. GENERAL PROVISIONS
11.1 Effective Date - The Plan shall become effective upon
its adoption by the Board, provided that any grant of
an Incentive Stock Option is subject to the approval of
the Plan by the shareholders of the Corporation within
12 months of adoption by the Board.
11.2 Termination of the Plan - Unless previously terminated
by the Board of Directors, the Plan shall terminate on,
and no Options shall be granted after, the tenth
anniversary of its adoption by the Board.
11.3 Limitation on Termination, Amendment or Modification
(a) The Board may at any time terminate, amend, modify
or suspend the Plan, provided that without the
approval of the shareholders of the Corporation no
amendment or modification shall be made by the
Board which:
(i) increases the maximum number of shares of
Common Stock as to which Options may be
granted under the Plan; or
(ii) changes the class of eligible Employees.
(b) No amendment, modification, suspension or
termination of the Plan shall in any manner affect
any option theretofore granted under the Plan
without the consent of the Optionee or any person
validly claiming under or through the Optionee.
11.4 No Right to Employment - Neither anything contained in
the Plan or in any instrument under the Plan nor the
grant of any Option hereunder shall confer upon any
Optionee any right to continue in the employ of the
Corporation or of any Subsidiary or limit in any
respect the right of the Corporation or of any
Subsidiary to terminate the optionee's employment at
any time and for any reason.
11.5 Withholding Taxes -
(a) Subject to the provisions of Subsection (b), the
Corporation will require that an Optionee, as a
condition of the exercise of an Option, other than
an Incentive Stock Option or any other person or
entity receiving Common Stock upon exercise of an
option, pay or reimburse any taxes which the
Corporation is required to withhold in connection
with the exercise of the Option.
(b) An Optionee may satisfy the withholding obligation
described in Subsection (a), in whole or in part,
by electing to have the Corporation withhold
shares of Common Stock (otherwise issuable upon
the exercise of an Option) having a fair market
value equal to the amount required to be withheld.
An election by an optionee to have shares withheld
for this purpose shall be subject to the following
restrictions:
(i) it must be made prior to the date on which
the amount of tax to be withheld is
determined (the "Tax Date");
(ii) it shall be irrevocable;
(iii) it shall be subject to disapproval by the
Committee;
(iv) if the Optionee is an officer of the
Corporation within the meaning of Section 16
of the Exchange Act (an "Officer"), such
election may not be made within six (6)
months of the grant of the Option (except
that this restriction shall not apply in the
event of the death or disability of the
Optionee prior to the expiration of the
six-month period);
(v) the Optionee is an officer, such election
must be made either at least six months prior
to the Tax Date or in the ten-day "window
period" beginning on the third day following
the release of the Corporation's quarterly or
annual summary statement of revenues and
earnings; and
(vi) where the Tax Date of an officer is deferred
up to six months after the exercise of an
Option, the full number of option shares will
be issued or transferred upon exercise, but
the officer will be unconditionally obligated
to tender back to the Corporation the proper
number of shares of Common Stock on the Tax
Date.
11.6 Listing and Registration of Shares
(a) No Option granted pursuant to the Plan shall be
exercisable in whole or in part if at any time the
Board shall determine in its discretion that the
listing, registration or qualification of the
shares of Common Stock subject to such Option on
any securities exchange or under any applicable
law, or the consent or approval of any
governmental regulatory body, is necessary or
desirable as a condition of, or in connection
with, the granting of such Option or the issue of
shares thereunder, unless such listing,
registration, qualification, consent or approval
shall have been effected or obtained free of any
conditions not acceptable to the Board.
(b) If a registration statement under the Securities
Act with respect to the shares issuable upon
exercise of any Option granted under the Plan is
not in effect at the time of exercise, as a
condition of the issuance of the shares the person
exercising such Option shall give the Committee a
written statement, satisfactory in form and
substance to the Committee, that they are
acquiring the shares for their own account for
investment and not with a view to their
distribution. The Corporation may place upon any
stock certificate for shares issuable upon
exercise of such Option the following legend or
such other legend as the Committee may prescribe
to prevent disposition of the shares in violation
of the Securities Act or other applicable law:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ("ACT") AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT TO THEM UNDER THE ACT
OR A WRITTEN OPINION OF COUNSEL FOR THE
CORPORATION THAT REGISTRATION IS NOT
REQUIRED."
<PAGE>
PROXY CARD
BCB FINANCIAL SERVICES CORPORATION, INC.
ANNUAL MEETING OF STOCKHOLDERS - APRIL 16, 1997
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Annual Meeting April 16, 1997
The undersigned hereby appoints the full Board of Directors,
with full powers of substitution, to act as attorneys and proxies
for the undersigned to vote all shares of Common Stock of the
Company which the undersigned is entitled to vote at an Annual
Meeting of Stockholders ("Meeting") to be held at The Stokesay
Castle, Hill Road and Spook Lane, Reading, Pennsylvania, at
3:00 p.m. (local time) on Wednesday, April 16, 1997. The
official proxy committee is authorized to cast all votes to which
the undersigned is entitled as indicated above.
<PAGE>
The proxies are instructed to vote as follows:
For All
For Withhold Except
[ ] [ ] [ ]
1. The election as directors of all nominees listed below
(except as marked to the contrary below).
Harold C. Bossard, Edward J. Edwards,
Nelson R. Oswald, Wesley R. Pace
INSTRUCTION: To withhold authority to vote for any individual
nominee, mark "For All Except" and write that nominee's name in
the space provided below.
________________________________________________________________
2. The ratification of the appointment of Beard & Company,
Inc. as auditors for the fiscal year ending December 31, 1997.
For Against Abstain
[ ] [ ] [ ]
3. The approval of the Corporation's 1996 Stock Option
Plan.
For Against Abstain
[ ] [ ] [ ]
Check Box if You Plan to Attend Meeting [ ]
The Board of Directors recommends a vote "FOR" each of the
listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS
ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSITIONS AS STATED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE ABOVE-NAMED
PROXIES AT THE DIRECTION OF A MAJORITY OF THE BOARD OF DIRECTORS.
AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
Please be sure to sign and date Date____________________
this Proxy in the box below.
_______________________________ ______________________________
Stockholder sign above Co-holder (if any) sign above
<PAGE>
BCB FINANCIAL SERVICES CORPORATION, INC.
Should the above signed be present and elect to vote at the
Meeting or at any adjournment thereof and after notification to
the Secretary of the Company at the Meeting of the stockholder's
decision to terminate this proxy, then the power of said
attorneys and proxies shall be deemed terminated and of no
further force and effect. This proxy may also be revoked by
sending written notice to the Secretary of the Company at the
address set forth on the Notice of Annual Meeting of
Stockholders, or by the filing of a later proxy statement prior
to a vote being taken on a particular proposal at the Meeting.
The above signed acknowledges receipt from the Company prior
to the execution of this proxy of a Notice of the Meeting and a
proxy statement dated March 14, 1997.
Please sign exactly as your name appears on this card. When
signing as attorney, executor, administrator, trustee or
guardian, please give your full title, if shares are held
jointly, each holder must sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
