<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only
[ ] Definitive Proxy Statement (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IBS Financial Corp.
- --------------------------------------------------------------------------------
(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)(1) 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> 2
[IBSF LETTERHEAD]
__________ __, 1997
Dear Stockholder:
The Annual Meeting of Stockholders of IBS Financial Corp. (the
"Company") will be held at the Four Points Hotel (Sheraton), 1450 Route 70
East, Cherry Hill, New Jersey 08034, on ______, ______ __, 1997 at 9:30 a.m.,
Eastern Time. As more fully described in the accompanying materials, the
purpose of the meeting is to elect one director (and, depending upon the
outcome of pending litigation, possibly a second director) and to ratify the
appointment of independent auditors. We strongly urge you to support your
Company's nominees and to sign, date and return the enclosed BLUE proxy card
today. Your vote is important, even if you only hold a few shares.
Unfortunately, Mr. Lawrence B. Seidman and his group are once again
conducting a proxy contest this year. Last year, Mr. Seidman's two nominees
each lost by more than a two-to-one margin. Mr. Seidman's group, under the
name "Committee to Maximize Shareholder Value," is soliciting white proxy cards
for its nominees. Please DO NOT return any white proxy cards sent to you by
Mr. Seidman's group. If you have already done so, you may revoke the white
proxy card by signing, dating and returning the enclosed BLUE proxy card.
Remember, your last dated proxy card is the only one that counts.
For the reasons set forth below, we urge you to support your Board of
Directors and vote the enclosed BLUE proxy card in favor of Messrs. Auchter and
Abramowitz.
YOUR BOARD OF DIRECTORS BELIEVES IN STOCKHOLDER REPRESENTATION
Each member of your current Board of Directors (other than Mr.
Lockhart, who is retiring) has purchased with his own personal funds more
shares of the Company's common stock than Messrs. Seidman and Whitman combined.
Each member of your current Board of Directors has invested between $100,000
and $1.5 million of his own funds into the Company's common stock, for an
aggregate cash investment by your Board of $3.0 million. The average cash
investment by the six members of your current Board (other than Mr. Lockhart)
exceeds $500,000. By contrast, Messrs. Seidman and Whitman have used other
people's money to accumulate the positions held by their respective companies.
See "Beneficial Ownership of Common Stock by Certain Beneficial Owners and
Management" in the attached Proxy Statement.
Your Board of Directors has a substantial investment in the Company
and represents all stockholders, not just a small group.
<PAGE> 3
MR. SEIDMAN AND HIS GROUP ARE NOT SATISFIED WITH ONE BOARD SEAT
In an attempt to avoid an expensive proxy contest this year, on
November 1, 1996 your Board of Directors was willing to support the nomination
of a person that would be mutually agreeable to the Company and Messrs. Seidman
and Whitman, provided that Mr. Seidman agree to dismiss his libel suit against
your Board (the court subsequently granted the Company's motion for summary
judgment because Seidman failed to state a claim) and that Messrs. Seidman and
Whitman agree to support the Board's nominees next year. No agreement could be
reached because Messrs. Seidman and Whitman insisted that they be able to wage
or support yet another proxy contest at next year's annual meeting. Your Board
does not believe that Messrs. Seidman and Whitman should be entitled to
multiple Board representation, and your Board does not believe that expensive
- --------
and disruptive proxy contests each year are in the best interests of
stockholders.
In two other companies in which Mr. Seidman conducted a proxy contest,
he subsequently purchased a controlling interest in such companies through open
market purchases, without paying any control premium to existing stockholders.
------------------------------------------------------------
Your Board of Directors does not believe it is in the best interests
of the Company and all stockholders for a small group to continually seek
multiple representation on the Board or, as Mr. Seidman has done in the past in
other companies, to purchase a controlling interest without paying an
appropriate control premium to all stockholders.
YOUR BOARD OF DIRECTORS DOES NOT TRUST MR. SEIDMAN
As you may recall from last year's proxy contest, on November 8, 1995
the Office of Thrift Supervision ("OTS"), our primary federal regulator, issued
a cease and desist order against Mr. Seidman in which the OTS found Mr. Seidman
violated an OTS regulation and recklessly engaged in unsafe and unsound
practices when he was at another savings institution in New Jersey. THE OTS
FURTHER FOUND THAT MR. SEIDMAN DEMONSTRATED BOTH PERSONAL DISHONESTY AND A
FLAGRANT DISREGARD OF HIS DUTIES AND THAT HE ENGAGED IN A PATTERN OF
MISCONDUCT.
This year, Mr. Seidman and his group refused the Company's request to
disclose various agreements and the identities of their financial backers. As
a result, on November 12, 1996 the Company sued Mr. Seidman and his group. See
"Litigation Against the Seidman Group" in the attached Proxy Statement.
Six days after the Company's lawsuit was filed, Mr. Seidman's group
amended its Schedule 13D to disclose for the first time an 18 month old
agreement involving 83,500 shares of the Company's common stock. Your Board of
Directors believes, based upon the advice of its counsel, that the failure by
Mr. Seidman's group to previously disclose this agreement in its Schedule 13D
constituted a violation of the federal securities laws.
- ------------------------------------------------------
2
<PAGE> 4
After a preliminary litigation conference on December 2, 1996, Mr.
Seidman's group further amended its Schedule 13D a mere four days later to
publicly disclose for the first time various limited partnership and operating
agreements and the identities of the persons who had invested in the four
members of the group formed directly or indirectly by Mr. Seidman. Your Board
of Directors believes, based upon the advice of its counsel, that the failure
by Mr. Seidman's group to previously provide such disclosure in its Schedule
13D constituted a violation of the federal securities laws.
------------------------------------------------------
On January 23, 1997, the district court judge rendered a decision in
which he stated that "(a)n amendment which cures a violation of the Exchange
Act moots a claim that arises from the failure to file a proper Schedule 13D."
The court held that the additional Schedule 13D amendments filed by Mr.
Seidman's group after the litigation was commenced mooted the Company's claims
regarding the deficient disclosures initially provided by Mr. Seidman's group
and that the amended Schedule 13Ds were adequate, and the court declined to
enforce the disclosure requirements in the Company's Certificate of
Incorporation. The Company believes that the Seidman group's disclosures are
still inadequate and has taken an appeal to the United States Court of Appeals
for the Third Circuit.
Your Board of Directors believes that a savings and loan holding
company, which is entrusted with the funds deposited by depositors and the
moneys invested by stockholders, is no place for a person who has violated
federal banking and securities laws - or for his nominees.
YOUR BOARD OF DIRECTORS HAS TAKEN STEPS TO ENHANCE STOCKHOLDER VALUE
During fiscal 1996, your Company completed three separate stock
repurchase programs of 5% each, which is three times the amount permitted by
OTS regulations under normal circumstances. Stock repurchases reduce our
excess capital and will help improve the Company's return on equity and
earnings per share in the long run. In the short run the stock repurchases
reduce our interest-earning assets and interest income, as well as depress our
book value per share (because our market price per share exceeds our book value
per share). Despite the short-term effects, however, we note that even Mr.
Seidman and his group are able to agree with us that continuing stock
repurchases are in the best interests of our stockholders.
In December 1996, your Board of Directors declared a special cash
dividend of $.25 per share, which was paid to stockholders on January 3, 1997.
This special dividend is in addition to the 10% stock dividend paid in March
1996 and to our regular quarterly cash dividends, which were increased by 33%
in the fourth quarter of calendar 1996 to a rate of $.32 per share per annum.
During fiscal 1996, your Board of Directors terminated a defined
benefit pension plan and a related supplemental agreement. As a result, the
costs associated with these plans,
3
<PAGE> 5
which are set forth under "Executive Compensation - Benefits" in the attached
Proxy Statement, will not be incurred in periods subsequent to September 30,
1996.
The Company's subsidiary recently opened two new branches in Camden
County, New Jersey, thus expanding our presence in this market area.
MANAGEMENT'S COMPENSATION IS ALIGNED WITH THE COMPANY'S PERFORMANCE
In fiscal 1996, the Company eliminated all bonuses to senior
management and eliminated fees paid to the Chairman of the Board. See
"Executive Compensation - Summary Compensation Table." These actions were
taken in light of the decline in the Company's net income from fiscal 1995 to
fiscal 1996. In addition, in fiscal 1996 the Board of Directors adopted a
resolution expressing its intent to not grant further stock options or
restricted share awards to those executive officers who received grants when
the plans were approved by stockholders in January 1995.
YOUR VOTE IS IMPORTANT!
Your Board believes the best way to discourage the Seidman group from
further harassment of your Company through a steady stream of costly and
needless proxy contests is to elect the Board's nominees. It is very important
that you be represented at the Annual Meeting regardless of the number of
shares you own or whether you are able to attend the meeting in person. We
urge you to mark, sign, and date your BLUE proxy card today and return it in
the envelope provided, even if you plan to attend the Annual Meeting. Please
do not sign any white proxy card sent to you by the Seidman group.
Your continued support of and interest in IBS Financial Corp. are
sincerely appreciated.
Sincerely,
Joseph M. Ochman, Sr.
Chairman of the Board, President and
Chief Executive Officer
4
<PAGE> 6
IBS FINANCIAL CORP.
1909 ROUTE 70 EAST
CHERRY HILL, NEW JERSEY 08003
(609) 424-1000
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON _____ __, 1997
-----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
("Annual Meeting") of IBS Financial Corp. (the "Company") will be held at the
Four Points Hotel (Sheraton), 1450 Route 70 East, Cherry Hill, New Jersey, on
______, _____ __, 1997 at 9:30 a.m., Eastern Time, for the following purposes,
all of which are more completely set forth in the accompanying Proxy Statement:
(1) To elect one director and, depending upon the outcome of
pending litigation, possibly a second director, in each case for a
four-year term or until a successor is elected and qualified;
(2) To ratify the appointment by the Board of Directors of
Deloitte & Touche L.L.P. as the Company's independent auditors for the
fiscal year ending September 30, 1997; and
(3) To transact such other business as may properly come before
the meeting or any adjournment thereof. Management is not aware of
any other such business.
The Board of Directors has fixed March 24, 1997 as the voting record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Chiara Eisennagel
Corporate Secretary
Cherry Hill, New Jersey
_____ __, 1997
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF
YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY
RETURN THE ENCLOSED BLUE PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU
----
ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY
GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE
EXERCISE THEREOF.
- --------------------------------------------------------------------------------
<PAGE> 7
IBS FINANCIAL CORP.
--------------------------
PROXY STATEMENT
--------------------------
ANNUAL MEETING OF STOCKHOLDERS
_____ __, 1997
This Proxy Statement and BLUE proxy card are being furnished to
holders of common stock, $.01 par value per share ("Common Stock"), of IBS
Financial Corp. (the "Company"). BLUE proxies are being solicited on behalf of
your Board of Directors to be used at the Annual Meeting of Stockholders
("Annual Meeting") to be held at the Four Points Hotel (Sheraton), 1450 Route
70 East, Cherry Hill, New Jersey, on ______, _____ __, 1997 at 9:30 a.m.,
Eastern Time, for the purposes set forth in the Notice of Annual Meeting of
Stockholders. This Proxy Statement is first being mailed to stockholders on or
about _____ __, 1997.
LITIGATION AGAINST THE SEIDMAN GROUP
In October 1996, Mr. Seidman's group nominated two director candidates
and provided certain information to the Company pursuant to the Company's
Certificate of Incorporation. In July 1996, the Board of Directors had
approved a reduction in the size of the Board when a director tendered his
resignation in July 1996, and as a result of this reduction, the Company
informed Mr. Seidman's group by letter dated October 16, 1996 that only one
director was to be elected at the annual meeting. Mr. Seidman's group then
indicated by letter dated October 21, 1996 who its one nominee would be. The
Company provided Mr. Seidman's group with a letter dated October 31, 1996
specifying in detail the numerous deficiencies in the group's nominating
materials. On November 1, 1996, the Company granted in full the request made
by Messrs. Seidman and Whitman for an extension of the time period given to
them to cure their deficiencies.
On November 8, 1996, Mr. Seidman's group cured some of the
deficiencies but refused to provide the identities of the various persons or
entities who (1) assisted in organizing the limited liability companies and
limited partnerships used to purchase IBSF's Common Stock, (2) provided the
funds used by members of Mr. Seidman's group to purchase IBSF's Common Stock,
or (3) are otherwise deemed by the federal securities laws, in the opinion of
the Company, to be "participants" in the proxy contest then being threatened by
Mr. Seidman's group. Mr. Seidman's group also failed to amend its Schedule 13D
to include the various limited partnership agreements and operating agreements
as exhibits or to provide a description of such agreements.
- 2 -
<PAGE> 8
In light of the positions taken by Mr. Seidman's group, on November
12, 1996 the Company sued each of the members of Mr. Seidman's group in the
United States District Court for the District of New Jersey. The Company
sought a declaratory judgment that each member of Mr. Seidman's group is
required under the federal securities laws to disclose the identities of its
investors, limited partners, members and other participants and to describe the
contracts, understandings and arrangements between members of the group and
such undisclosed persons and entities. The Company also sought a declaratory
judgment that, because of the deficiencies in the nominating materials
submitted by Mr. Seidman's group, the Company could reject the nominations made
by Mr. Seidman's group and the group's request for a stockholder list. In
addition, the Company sought to enjoin Mr. Seidman's group from further
violations of the federal securities laws and from purchasing additional shares
or soliciting proxies until it complied with such laws. Some of the members of
Mr. Seidman's group counterclaimed, challenging the action of the Company's
Board, in July 1996, to reduce the number of directors from seven to six.
A mere six days after the Company's lawsuit was filed, Mr. Seidman's
group amended its Schedule 13D to disclose for the first time an 18 month old
agreement involving 83,500 shares of IBSF's Common Stock. The amended Schedule
13D also corrected some of the deficiencies noted in the Company's lawsuit, but
still did not include the limited partnership and operating agreements or
disclose the names of the investors in such companies.
After a preliminary litigation conference on December 2, 1996, Mr.
Seidman's group further amended its Schedule 13D a mere four days later to
publicly disclose for the first time various limited partnership and operating
agreements and to disclose for the first time the identities of the persons who
had invested in the four members of the group formed directly or indirectly by
Mr. Seidman.
On January 23, 1997, the district court judge rendered a decision in
which he stated that "(a)n amendment which cures a violation of the Exchange
Act moots a claim that arises from the failure to file a proper Schedule 13D."
The court held that the additional Schedule 13D amendments filed by Mr.
Seidman's group after the litigation was commenced mooted the Company's claims
regarding the deficient disclosures initially provided by Mr. Seidman's group
and that the amended Schedule 13Ds were adequate, and the court declined to
enforce the disclosure requirements in the Company's Certificate of
Incorporation. As a result, the court held that the Company could not reject
the defendants' nominations as deficient or untimely and that the defendants
could receive a stockholder list. In addition, the court set aside the July
1996 reduction in the size of the Board when Mr. Lockhart tendered his
resignation in July 1996, even though such reduction occurred prior to the
submission of nominees by Mr. Seidman's group.
On January 31, 1997, the Company filed an appeal of the district
court's decision with the United States Court of Appeals for the Third Circuit,
and the Company requested that the Third Circuit review the appeal on an
expedited basis. On February 7, 1997, Mr. Seidman's group opposed the request
---------------------------------------
for an expedited appeal.
- -----------------------
- 3 -
<PAGE> 9
Rather than trying to get the appeal decided expeditiously, Mr.
Seidman asked the Superior Court of New Jersey Chancery Division: Passaic
County to set the annual meeting date. On February 24, 1997, the Passaic
County judge orally ordered that the Annual Meeting be held on April 18, 1997,
and the Company promptly set the voting record date. The Passaic County judge
stayed his order after the Court of Appeals granted the Company's motion for an
expedited appeal as set forth below.
On February 28, 1997, the United States Court of Appeals for the Third
Circuit granted the Company's motion for an expedited appeal, despite the
attempt by Mr. Seidman's group to delay the appeal being considered. For
reasons known only to the Seidman group and its counsel, they have resisted all
attempts to expedite the appeal. The Company's brief was filed on March 24,
1997, and Mr. Seidman's reply brief is due April 23, 1997. The Company's reply
brief will be filed by April 30, 1997, and the Third Circuit ordered that the
appeal be listed for disposition on the merits during the week of May 19, 1997.
Your Board of Directors looks forward to a prompt decision from the Court of
Appeals.
The Company believes that there are still legitimate issues with
respect to the timeliness, accuracy and completeness of the disclosures
provided by Mr. Seidman's group and the validity of such group's nominations.
Your Board of Directors believes, based upon the advice of its counsel, that
the failure by Mr. Seidman's group to previously disclose the various
agreements and to name the parties thereto in the group's Schedule 13Ds
constituted a violation of the federal securities laws. Since the Company's
lawsuit was first commenced, Mr. Seidman's group has amended its Schedule 13D
three separate times, and each time has provided a little bit more of the
disclosures that the Company has claimed should have been provided no later
than October 1996. The Company believes that the Seidman group's disclosures
are still inadequate, particularly since his Schedule 13Ds fail to provide any
disclosure regarding persons or entities who control in excess of 50% of one or
more of the limited liability companies formed by Mr. Seidman. Even though
these persons or entities generally "have full, exclusive and complete
discretion with respect [to all] decisions, consents, authorizations and rights
in connection with the business and affairs" of the limited liability company,
other than the daily affairs of the company and investment decisions, Mr.
Seidman has argued that these majority holders are not control persons. As a
result, this issue has been appealed to the Third Circuit. Your Board regrets
the need for the lawsuit, but believes that it had no other choice in order to
ensure compliance with the federal securities laws by Mr. Seidman and his group
and to inform the Company's stockholders of the identities of Mr. Seidman's
secret backers.
VOTING
Only stockholders of record at the close of business on March 24, 1997
("Voting Record Date") will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 9,575,866 shares of Common Stock outstanding and
the Company had no other
- 4 -
<PAGE> 10
class of equity securities outstanding. All references in this Proxy Statement
to share amounts, prices per share and other per share figures have been
adjusted for the 10% stock dividend paid by the Company to all of its
stockholders in March 1996.
The BLUE proxy solicited hereby, if properly signed and returned to
the Company and not revoked prior to its use, will be voted in accordance with
the instructions contained therein. If no contrary instructions are given,
each proxy received will be voted FOR the nominees for director described
herein, FOR ratification of the appointment of Deloitte & Touche L.L.P. for
fiscal 1997 and, upon the transaction of such other business as may properly
come before the meeting, in accordance with the best judgment of the persons
appointed as proxies. Any stockholder giving a proxy has the power to revoke
it at any time before it is exercised by (i) filing with the Secretary of the
Company written notice thereof (Chiara Eisennagel, Secretary, IBS Financial
Corp.); (ii) submitting a duly executed proxy bearing a later date; or (iii)
appearing at the Annual Meeting and giving the Secretary notice of his or her
intention to vote in person. Proxies solicited hereby may be exercised only at
the Annual Meeting and any adjournment thereof and will not be used for any
other meeting.
Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting. Directors are
elected by a plurality of the votes cast with a quorum present. A quorum
consists of stockholders representing, either in person or by proxy, a majority
of the outstanding Common Stock entitled to vote at the meeting. Abstentions
are considered in determining the presence of a quorum but will not affect the
plurality vote required for the election of directors.
The number of directors to be elected and the validity of the
nominations submitted by Mr. Seidman's group are dependent upon the outcome of
pending litigation. Because one director will definitely be elected, the
person who receives the greatest number of votes of the holders of Common Stock
represented in person or by proxy at the Annual Meeting will be elected a
director of the Company, if such person was validly nominated. Since the
pending litigation as to whether a second director is to be elected will not be
decided as of the date of the Annual Meeting, the Company reserves the right to
not seat the nominee with the second highest number of votes until the appeal
has been decided.
The affirmative vote of the holders of a majority of the total votes
present in person or by proxy is required to ratify the appointment of the
independent auditors. Under rules applicable to broker-dealers, the proposal
for ratification of the auditors, unless contested by the Seidman group, is
considered a "discretionary" item upon which brokerage firms may vote in their
discretion on behalf of their clients if such clients have not furnished voting
instructions and for which there will not be "broker non-votes." Because of
the solicitation in opposition to the election of the Company's nominees, the
election of directors will be considered a "non-discretionary" item and there
will be broker non-votes at the meeting. However, broker non-votes will have
no effect on the voting of the election of directors.
- 5 -
<PAGE> 11
INFORMATION WITH RESPECT TO THE NOMINEE FOR DIRECTOR,
DIRECTORS WHOSE TERM CONTINUES
AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the
Board of Directors of the Company shall be divided into four classes which are
as equal in number as possible, and that members of each class of directors are
to be elected for a term of four years. One class is to be elected annually.
Stockholders of the Company are not permitted to cumulate their votes for the
election of directors. When Frank G. Lockhart, a director of the Company,
tendered his resignation from the Board of Directors of the Company on July 19,
1996 for personal reasons, effective as of the day prior to the Annual Meeting,
the Board of Directors reduced the number of authorized directors from seven to
six, also effective as of the day prior to the Annual Meeting. If the
reduction in Board size is permitted, only one director will be elected this
year. The actual number of directors to be elected - one or two - is dependent
upon the outcome of the appeal to the United States Court of Appeals for the
Third Circuit. See "Litigation Against the Seidman Group" and "Voting."
No director, director nominee or executive officer of the Company is
related to any other director, director nominee or executive officer of the
Company by blood, marriage or adoption.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If any person named as a nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for a replacement nominee recommended by the Board of Directors. At this
time, the Board of Directors knows of no reason why either of the nominees
listed below may not be able to serve as a director if elected, other than that
the number of directors to be elected is dependent upon the outcome of pending
litigation.
The following tables present information concerning the nominees for
director of the Company and each director whose term continues, including
tenure as a director of the Company's subsidiary, Inter-Boro Savings and Loan
Association (the "Association").
- 6 -
<PAGE> 12
NOMINEES FOR DIRECTOR FOR FOUR-YEAR TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age(1) the Past Five Years Since
------------------------- ---------- ----------------------------------------- ----------------
<S> <C> <C> <C>
Thomas J. Auchter 70 Director; President of Investment 1967
2010, a private investment company,
since 1991. Formerly Director of
Finance and Treasurer, Delaware River
Port Authority, Camden, New Jersey,
from 1960 to 1991.
Arthur J. Abramowitz 49 Stockholder and director in Davis, --
Reberkenny & Abramowitz, P.C., a law
firm located in Cherry Hill, New
Jersey.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
THE ABOVE NOMINEES FOR DIRECTOR.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 1998
<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age(1) the Past Five Years Since
------------------------- ---------- ----------------------------------------- ----------------
<S> <C> <C> <C>
John A. Borden 78 Director; engaged in real estate 1966
related activities since 1937 and
independent real estate appraiser
since 1953.
Joseph M. Ochman, Sr. 66 Chairman of the Board of the 1971
Association since 1976 and of the
Company since 1994; President and
Chief Executive Officer of the
Association since 1971 and of the
Company since 1994.
</TABLE>
- 7 -
<PAGE> 13
DIRECTOR WHOSE TERM EXPIRES IN 1999
<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age(1) the Past Five Years Since
------------------------- ---------- ----------------------------------------- ----------------
<S> <C> <C> <C>
Paul W. Gleason 77 Director; currently retired. Formerly 1976
Chairman of the Board and principal
stockholder of Formigli Corporation, a
concrete business, Berlin, New Jersey.
</TABLE>
DIRECTORS WHOSE TERMS EXPIRE IN 2000
<TABLE>
<CAPTION>
Principal Occupation During Director
Name Age(1) the Past Five Years Since
------------------------- ---------- ----------------------------------------- ----------------
<S> <C> <C> <C>
Francis X. Lorbecki, Jr. 74 Director; currently retired. Formerly 1968
Senior Vice President and loan officer
of the Association until 1981.
Albert D. Stiles, Jr. 69 Director; founder and Presi-dent of 1977
Wills and Stiles, Inc., an electrical
contractor, Medford, New Jersey;
self-employed builder and developer of
residential and commercial properties
in the South Jersey area.
</TABLE>
- -------------------
(1) As of March 31, 1997.
- 8 -
<PAGE> 14
STOCKHOLDER NOMINATIONS
Article 9.3 of the Company's Certificate of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder
who has complied with the notice provisions in that section. Stockholder
nominations must be made pursuant to timely notice in writing to the Secretary
of the Company. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the Company not
later than 60 days prior to the anniversary date of the immediately preceding
annual meeting.
Each written notice of a stockholder nomination shall set forth (a) as
to each person whom the stockholder proposes to nominate for election or
re-election as a director and as to the stockholder giving the notice (i) the
name, age, business address and residence address of such person, (ii) the
principal occupation or employment of such person, (iii) the class and number
of shares of Company stock which are beneficially owned by such person on the
date of such stockholder notice, and (iv) any other information relating to
such person that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to the proxy rules
under the Securities Exchange Act of 1934, as amended (the "1934 Act"); and (b)
as to the stockholder giving the notice (i) the name and address, as they
appear on the Company's books, of such stockholder and any other stockholders
known by such stockholder to be supporting such nominees and (ii) the class and
number of shares of Company stock which are beneficially owned by such
stockholder on the date of such stockholder notice and, to the extent known, by
any other stockholders known by such stockholder to be supporting such nominees
on the date of such stockholder notice. The presiding officer of the meeting
may refuse to acknowledge the nomination of any person not made in compliance
with the foregoing procedures. For a description of pending litigation with
respect to the validity of the nominations by Mr. Seidman's group, see
"Litigation Against the Seidman Group."
COMMITTEES AND MEETINGS OF THE BOARD OF THE COMPANY AND THE ASSOCIATION
The Board of Directors of the Company currently meets on a quarterly
basis and may have additional special meetings upon the request of the
President or a majority of the Directors. During the fiscal year ended
September 30, 1996, the Board of Directors of the Company met 13 times. No
director attended fewer than 75% of the total number of Board meetings and
meetings of committees on which he served that were held during this period.
The Board of Directors of the Company has established the following committees:
Executive Committee. The Executive Committee consists of Messrs.
Ochman (Chairman), Auchter, Borden and Lockhart. Additional members of the
Board also serve as alternates. The Committee has the authority to act on
general matters between Board meetings. The Executive Committee met once
during fiscal 1996.
- 9 -
<PAGE> 15
Audit and Examination Committee. The Audit and Examination Committee
consists of Messrs. Stiles (Chairman), Gleason and Lorbecki. The Audit and
Examination Committee recommends engagement of the Company's independent
auditors and reviews their audit reports. The Audit and Examination Committee
met once during fiscal 1996.
Nominating Committee. The Nominating Committee consists of Messrs.
Stiles (Chairman), Borden and Lorbecki. The Nominating Committee, which makes
director nominations for service on the Board of Directors, met once in fiscal
1996.
The Board of Directors of the Association met 12 times during fiscal
1996. In addition, the Board of Directors of the Association has established
the following committees:
Executive Committee. The Executive Committee consists of Messrs.
Ochman (Chairman), Auchter, Borden and Lockhart. Additional members of the
Board also serve as alternates. The Committee has the authority to act on
general matters between Board meetings. The Executive Committee met 11 times
during fiscal 1996.
General Loan Committee. The General Loan Committee consists of
Messrs. Ochman (Chairman), Borden and Lorbecki. Additional senior officers of
the Association also alternate on the Committee. The Committee has the
authority to approve loans up to $1.0 million. The Committee met 24 times
during fiscal 1996.
Compensation Review Committee. The Compensation Review Committee
consists of Messrs. Borden (Chairman), Gleason and Stiles. The Compensation
Review Committee, which reviews and recommends compensation and benefits for
the Association's employees, met once in fiscal 1996.
In addition to the committees described above, the Association has
also established other committees which consist of members of the Board and
which meet as required. These committees include, among others: a Nominating
Committee, an Advertising Committee, an Investment Committee, a Site Committee,
a Pension Committee and an Asset/Liability Management Committee.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Set forth below is information with respect to the principal
occupations during the last five years for the six executive officers of the
Company and the Association who do not serve as directors.
Richard G. Sharp. Mr. Sharp has served as Executive Vice President
and Chief Financial Officer of the Association since 1984 and of the Company
since 1994, and has been employed in various capacities at the Association
since 1972. Mr. Sharp is a past President of the Philadelphia Chapter of the
Financial Managers Society and a past District Director of the Financial
Managers Society's national organization. Mr. Sharp is currently
- 10 -
<PAGE> 16
a member of the Pennsylvania Institute of Certified Public Accountants, the
American Institute of Certified Public Accountants and the Financial Managers
Society. Mr. Sharp is 62 years old as of March 31, 1997.
Anthony C. Chigounis. Mr. Chigounis has served as Senior Vice
President, Operations and Administration of the Association since 1984, and has
been employed in various capacities at the Association since 1971. Mr.
Chigounis has been active in a number of civic organizations, including the
United Way of both Burlington and Camden County, New Jersey. Mr. Chigounis
served as President of the Camden County Council of Boy Scouts of America and
is currently a member of the Executive Council. Mr. Chigounis is 60 years old
as of March 31, 1997.
Andrew A. Cosenza. Mr. Cosenza has served as Senior Vice President,
Savings Officer of the Association since 1984, and has been employed in various
capacities at the Association since 1970. Mr. Cosenza is a member and past
Director of the Philadelphia Chapter of the Financial Managers Society, and a
member of the Delaware Valley Chapter of the Institute for Financial Education.
Mr. Cosenza has also been affiliated with the United Way of Camden County since
1980. Mr. Cosenza is 55 years old as of March 31, 1997.
Lorraine H. O'Hara. Ms. O'Hara has served as Senior Vice President,
Human Resources of the Association since 1987, and has served in various
capacities at the Association since 1966. Ms. O'Hara is a member and past
President of the Philadelphia Chapter of the Financial Managers Society and is
a member of the New Jersey State League Human Resource Committee and the South
Jersey Human Resources Group. Ms. O'Hara has also been active in several
United Way annual campaigns. Ms. O'Hara is 71 years old as of March 31, 1997.
Matthew J. Kennedy. Mr. Kennedy has served as Executive Vice
President and Treasurer of the Company and the Association since April 1996 and
prior thereto as Senior Vice President and Assistant Treasurer since September
1995. He joined the Association in February 1995 as a Vice President. Mr.
Kennedy was previously employed by Valley Federal Savings and Loan Association,
Easton, Pennsylvania, where he served as Executive Vice President and Chief
Financial Officer from 1985 to November 1993. Prior thereto, Mr. Kennedy
served as Vice President and Controller of Valley Federal from 1977 to 1985.
Mr. Kennedy is 52 years old as of March 31, 1997.
Chiara Eisennagel. Ms. Eisennagel has served as Corporate Secretary
of the Association since 1993 and of the Company since 1994. From October 1992
to December 1992, Ms. Eisennagel served as Assistant Secretary of the
Association, and she has been employed at the Association since 1990. Ms.
Eisennagel was previously employed by Amstar Corporation, Philadelphia,
Pennsylvania, where she served as Employee Benefits Administrator and Human
Resources Professional from 1974 to 1982. She also served in similar
capacities with Westinghouse Electric Company and General Accident Insurance
Company. Ms. Eisennagel is 49 years old as of March 31, 1997.
- 11 -
<PAGE> 17
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) each person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
1934 Act, who or which was known to the Company to be the beneficial owner of
more than 5% of the issued and outstanding Common Stock, (ii) the directors and
director nominees of the Company, (iii) certain executive officers of the
Company, and (iv) all directors and executive officers of the Company and the
Association as a group.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as of
March 24, 1997(1)(2)
---------------------------------
Name of Beneficial Owner No. %
------------------------ ------------ ------
<S> <C> <C>
IBS Financial Corp. Employee 1,051,079(3) 11.0%
Stock Ownership Plan Trust
1909 E. Route 70
Cherry Hill, New Jersey 08003
Lawrence B. Seidman, Richard Whitman, and their companies, 855,246(4) 8.9%
investors and clients
1235A Route 23 South
Wayne, New Jersey 07470
Directors:
Thomas J. Auchter 138,284(3)(5)(6) 1.4%
John A. Borden 102,954(3)(5)(7) 1.1%
Paul W. Gleason 96,104(5) 1.0%
Frank G. Lockhart 87,585(5)(8) .9%
Francis X. Lorbecki, Jr. 95,659(5)(9) 1.0%
Joseph M. Ochman, Sr. 370,792(3)(10) 3.8%
Albert D. Stiles, Jr. 168,299(5)(11) 1.7%
Director nominee:
Arthur J. Abramowitz 500 *
Certain other executive officers:
Richard G. Sharp 123,512(12) 1.3%
All directors, nominees and executive officers
of the Company and the Association as a group
(14 persons) 1,400,331(3)(13) 13.8%
</TABLE>
(Footnotes on following pages)
- 12 -
<PAGE> 18
- ----------------------
* Represents less than .5% of the outstanding Common Stock.
(1) For purposes of this table, pursuant to rules promulgated under the
1934 Act, an individual is considered to beneficially own shares of
Common Stock if he or she directly or indirectly has or shares (1)
voting power, which includes the power to vote or to direct the voting
of the shares; or (2) investment power, which includes the power to
dispose or direct the disposition of the shares. Unless otherwise
indicated, an individual has sole voting power and sole investment
power with respect to the indicated shares.
(2) Under applicable regulations, a person is deemed to have beneficial
ownership of any shares of Common Stock which may be acquired within
60 days of the Voting Record Date pursuant to the exercise of
outstanding stock options. Shares of Common Stock which are subject
to stock options are deemed to be outstanding for the purpose of
computing the percentage of outstanding Common Stock owned by such
person or group but not deemed outstanding for the purpose of
computing the percentage of Common Stock owned by any other person or
group.
(3) The IBS Financial Corp. Employee Stock Ownership Plan Trust ("Trust")
was established pursuant to the IBS Financial Corp. Employee Stock
Ownership Plan ("ESOP") by an agreement between the Company and
Messrs. Ochman, Auchter and Borden, who act as trustees of the plan
("Trustees"). As of the Voting Record Date, [913,441] shares of
Common Stock held in the Trust were unallocated and [137,638] shares
had been allocated to the accounts of participating employees. Under
the terms of the ESOP, the Trustees must vote the allocated shares
held in the ESOP in accordance with the instructions of the
participating employees. Unallocated shares held in the ESOP will be
voted by the ESOP Trustees in the same proportion for and against
proposals to stockholders as the ESOP participants and beneficiaries
actually vote shares of Common Stock allocated to their individual
accounts. Any allocated shares which either abstain on the proposal
or are not voted will be disregarded in determining the percentage of
stock voted for and against each proposal by the participants and
beneficiaries. The amount of Common Stock beneficially owned by
directors who serve as trustees of the ESOP and by all directors and
executive officers as a group does not include the unallocated shares
held by the Trust.
(4) Based on a Schedule 13D filed pursuant to the 1934 Act by Lawrence B.
Seidman, Seidman and Associates, L.L.C. ("SAL"), Seidman and
Associates II, L.L.C. ("SAL II"), Federal Holdings, L.L.C.
("Holdings"), Seidman Investment Partnership, L.P. ("SIP"), The
Benchmark Company, Inc. ("TBCI"), Benchmark Partners, LP ("Partners"),
Richard Whitman, Lorraine Di Paolo, Dennis Pollack, and Ernest Beier,
Jr. (collectively, the "Reporting Persons"), which have formed a
"group" pursuant to Rule 13d-5 under the 1934 Act. Mr. Seidman
beneficially owns and has the right to vote and dispose of 3,580
shares of Common Stock owned by his retirement account, and he has
sole investment discretion and voting authority with respect to 83,500
shares of Common Stock which Mr. Seidman purchased in the name of
Michael J. Mandelbaum pursuant to an April 24, 1995 agreement. Mr.
Seidman also
- 13 -
<PAGE> 19
claims sole investment discretion and voting authority over an
additional 7,806 shares of Common Stock held by Jeffrey Greenberg
(2,700 shares), Steven Greenberg (2,700 shares), Richard Baer (635
shares), Brent Wolmer (600 shares) and Sonia Seidman (1,171 shares).
The Schedule 13D filed by Mr. Seidman's group indicates that these
last five individuals have agreed to sell and vote their shares as
directed by Mr. Seidman. In addition, Mr. Seidman, in his capacity as
the President of Veteri Place Corporation, the sole general partner of
SIP, which is an investment partnership, and a manager of SAL, SAL II
and Holdings, companies organized to invest in securities, may be
deemed to beneficially own 364,065 shares of Common Stock owned
beneficially by such companies. Mr. Whitman and Ms. Di Paolo, the
President and Executive Vice President, respectively, of TBCI, a
broker-dealer and investment advisor, and each a general partner of
Partners, an investment partnership, have sole dispositive and voting
power as to 3,080 shares and 28,415 shares, respectively, of Common
Stock. In addition, Mr. Whitman and Ms. DiPaolo may be deemed to have
shared dispositive and voting power as to the 217,830 shares and the
125,000 shares of Common Stock held by TBCI and Partners,
respectively, except that one or both of these companies sold an
aggregate of 2,500 shares since the last Schedule 13D amendment dated
January 23, 1997. Messrs. Pollack and Beier own 11,375 shares and
13,000 shares, respectively, of Common Stock. The above amounts
exclude shares held by relatives of Messrs. Pollack and Beier, as to
which shares they disclaim beneficial ownership.
(5) Includes 16,474 unvested shares granted to each non-employee director
pursuant to the Company's Recognition and Retention Plan and Trust
("Recognition Plan"), which shares may be voted by each director, and
59,063 shares (54,063 shares for Mr. Gleason) which may be acquired
upon the exercise of stock options exercisable within 60 days of the
Voting Record Date.
(6) Includes 27,500 shares held by Mr. Auchter's wife.
(7) Includes 1,650 shares held by Mr. Borden's wife.
(8) Includes 935 shares held jointly with Mr. Lockhart's wife and 2,046
shares held by Mr. Lockhart's wife.
(9) Includes 55 shares held by Mr. Lorbecki's wife.
(10) Includes 91,300 shares held jointly with Mr. Ochman's wife, 76,623
unvested shares granted to Mr. Ochman pursuant to the Company's
Recognition Plan which may be voted by Mr. Ochman, 6,527 shares
allocated to Mr. Ochman pursuant to the Company's ESOP, 5,500 shares
held by Mr. Ochman's wife, 2,810 shares held in trust for the benefit
of Mr. Ochman's grandchildren and 76,504 shares which may be acquired
upon the exercise of stock options exercisable within 60 days of the
Voting Record Date.
(11) Includes 8,800 shares held by Mr. Stiles' wife.
- 14 -
<PAGE> 20
(12) Includes 11,000 shares held jointly with Mr. Sharp's wife, 7,073
shares held by Mr. Sharp's wife, 30,648 unvested shares granted to Mr.
Sharp pursuant to the Company's Recognition Plan which may be voted by
Mr. Sharp, 6,778 shares allocated to Mr. Sharp pursuant to the
Company's ESOP and 51,470 shares which may be acquired upon the
exercise of stock options exercisable within 60 days of the Voting
Record Date.
(13) Includes 26,965 shares allocated to all executive officers as a group
pursuant to the Company's ESOP, 255,390 unvested shares granted to all
executive officers and directors as a group pursuant to the Company's
Recognition Plan which may be voted by such persons, and 563,178
shares which may be acquired by all executive officers and directors
as a group upon the exercise of stock options exercisable within 60
days of the Voting Record Date.
ADDITIONAL INFORMATION WITH RESPECT TO THE COMPANY'S DIRECTORS, DIRECTOR
NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth information with respect to those
directors, nominees for director and executive officers of the Company who have
purchased Common Stock of the Company in the two years preceding the date of
this Proxy Statement. The table below does not include information with
respect to stock grants made under the Company's Recognition Plan nor shares
that have been allocated under the Company's ESOP, which information is set
forth in the preceding table.
<TABLE>
<CAPTION>
Name Date Purchased Amount Purchased
-------------------------------- ---------------- -------------------
<S> <C> <C>
Joseph M. Ochman, Sr. 3/29/95 5,500
3/31/95 3,300
10/25/95 11,000
4/26/96 4,000
6/28/96 5,000
12/10/96 500
1/6/97 240
3/11/97 51,204(1)
Thomas J. Auchter 4/17/95 16,500
John A. Borden 2/26/96 220
Matthew J. Kennedy 4/25/95 220
6/21/96 1,000
Albert D. Stiles 9/20/95 2,200
11/3/95 13,200
1/29/96 22,000
Arthur J. Abramowitz 5/21/96 500
</TABLE>
- ----------------
(1) Represents the exercise of stock options.
- 15 -
<PAGE> 21
None of the holdings of the directors, director nominees and executive
officers of the Company set forth herein are held of record but not
beneficially, nor are any of such securities owned beneficially by associates
of such persons, except as set forth herein. As of the date of this Proxy
Statement, no director, director nominee or executive officer of the Company
has purchased the Company's Common Stock with funds that were borrowed or
otherwise obtained for the purpose of acquiring such shares of Common Stock.
However, Mr. Lockhart (who is retiring) holds his shares in a brokerage account
which had an outstanding margin balance of $19,203 as of February 28, 1997. As
of the date hereof, no director, director nominee or executive officer of the
Company has sold any shares of the Company's Common Stock in the two years
preceding the date of this Proxy Statement, except that Lorraine O'Hara and
Richard G. Sharp sold 1,992 and 3,984 shares, respectively, on January 22,
1996, and 1,992 and 3,985 shares, respectively, on February 20, 1997. The
sales by Ms. O'Hara and Mr. Sharp were made to fund certain tax withholding
obligations owed by them. In addition, on November 15, 1995 Mr. Abramowitz
sold 2,520 shares and on September 12, 1996 Paul W. Gleason exercised a stock
option for 5,000 shares and sold such shares.
In addition, no director, director nominee or executive officer of the
Company is or was during the past year a party to any contracts, arrangements
or understandings with any person with respect to the Common Stock of the
Company other than in connection with the Company's stock benefit plans, and no
director, director nominee or executive officer of the Company beneficially
owns, directly or indirectly, any securities of the Association, the Company's
wholly-owned subsidiary. Other than as set forth herein, no director, director
nominee or executive officer of the Company or any associates thereof has any
arrangement or understanding with any person: (i) with respect to any future
employment by the Company or its affiliates; or (ii) with respect to any future
transactions to which the Company or any of its affiliates will or may be a
party. Finally, no director, director nominee or executive officer has, during
the past 10 years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
For purposes of the solicitation of proxies by the Company's Board of
Directors, the business address of each of the Company's directors, director
nominees and executive officers is IBS Financial Corp., 1909 Route 70 East,
Cherry Hill, New Jersey 08003.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information
concerning the compensation paid by the Company and the Association for
services rendered in all capacities during the three years ended September 30,
1996 to the President and Chief Executive Officer of the Company and the
Association and each other executive officer of
- 16 -
<PAGE> 22
the Company and its subsidiaries whose total compensation during the fiscal
year exceeded $100,000.
<TABLE>
<CAPTION>
====================================================================================================================================
Annual Compensation Long Term Compensation
-------------------------------------------------------------------------------------------------
All Other
Awards Payouts Compensation
Name and Fiscal Other Annual -------------------------------------
Principal Position Year Salary(1) Bonus(2) Compensation(3) Stock Number of LTIP
Grants(4) Options(5) Payouts
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph M. Ochman, Sr. 1996 $ 523,882 $ -- $ -- -- -- -- $309,538(6)
President and Chief 1995 482,750 90,000 -- $1,204,506 319,267 -- 86,896
Executive Officer 1994 453,875 89,000 -- -- -- -- 46,885
- ------------------------------------------------------------------------------------------------------------------------------------
Richard G. Sharp 1996 $ 119,060 $ -- $ -- -- -- -- $ 65,682(6)
Executive Vice 1995 113,295 18,000 -- $ 481,794 128,669 -- 10,676
President and CFO 1994 107,809 17,200 -- -- -- -- --
====================================================================================================================================
</TABLE>
(1) Includes $16,000, $62,500 and $57,000 accrued on behalf of Mr. Ochman
pursuant to a deferred compensation plan in fiscal 1996, 1995 and
1994, respectively.
(2) The Company did not pay its senior executive officers a bonus for
fiscal 1996. The fiscal 1995 bonus was paid in September 1995 for
services rendered in fiscal 1995. The fiscal 1994 bonus was paid in
September 1994 for services rendered in fiscal 1994.
(3) Does not include amounts attributable to miscellaneous benefits
received by the named executive officers. In the opinion of
management of the Association, the costs to the Association of
providing such benefits to each named executive officer during the
year ended September 30, 1996 did not exceed the lesser of $50,000 or
10% of the total of annual salary and bonus reported for the
individual.
(4) Represents the grant of 127,707 and 51,082 shares of restricted Common
Stock to Messrs. Ochman and Sharp, respectively, pursuant to the
Company's Recognition Plan, which were deemed to have had the
indicated value at the date of grant. The restricted Common Stock
awarded to Messrs. Ochman and Sharp which had not yet vested as of
September 30, 1996 had a fair market value of $1.5 million and
$608,000 at September 30, 1996, respectively, based on the $14.875 per
share closing market price on such date. The awards vest 20% each
year beginning January 19, 1996, and dividends are paid on the
restricted shares.
(5) Consists of stock options granted pursuant to the Company's 1995 Stock
Option Plan which are exercisable at the rate of 20% each year
beginning January 19, 1996.
(6) Includes $27,000 for fees paid for service as Chairman of the Board of
Directors, $9,510 in premiums paid on certain life insurance policies,
$205,007 of stock units allocated to Mr. Ochman's account under the
Company's Excess Benefit Plan, and $1,900 for fees paid for service as
trustee of the Association's pension plan to Mr. Ochman in fiscal
1996. Also includes $66,121 and $65,682 for 4,514 shares and 4,484
shares allocated on behalf of Messrs. Ochman and Sharp, respectively,
in fiscal 1996 under the Company's ESOP.
- 17 -
<PAGE> 23
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Review Committee of the Board of Directors recommends
compensation for the Association's employees, which is then ratified by the
full Board of Directors. During the fiscal year ended September 30, 1996, the
members of the Committee were Messrs. Borden (Chairman), Gleason and Stiles.
During fiscal 1996, no member of the Compensation Review Committee was a former
or current full-time officer or employee of the Company or the Association.
The report of the Compensation Review Committee with respect to compensation
for the Chief Executive Officer and all other executive officers for the fiscal
year ended September 30, 1996 is set forth below:
REPORT OF THE COMPENSATION REVIEW COMMITTEE
The goals of the Committee are to assist the Company and its
subsidiary in attracting and retaining qualified management, motivating
executives to achieve performance goals established by the Board of Directors,
and to ensure that the financial interests of the Company's management and
shareholders are closely aligned. The financial results of the Company are a
direct function of the achievement of the goals set forth in the Company's
long-term strategic plan. The executive officers are compensated for their
contribution to the achievement of these goals, which benefits the Company's
stockholders, customers and employees as well as the communities in which the
Association operates.
The Committee considered the following factors in setting the
compensation of the Chief Executive Officer and the other executive officers of
the Company in fiscal 1996:
(1) The overall performance of the Company during the fiscal year
ended September 30, 1996. The Committee believes that the Company's
accomplishments are best illustrated by comparing it with other thrifts of
similar or comparable size in the general MidAtlantic - New England area on the
basis of the following factors (exclusive of the effects of the special SAIF
assessment):
<TABLE>
<CAPTION>
The Company Peer Group
--------------- ---------------
<S> <C> <C>
Ratio of compensation and benefits
expense to total revenue 33.43% 31.42%
Return on average assets 1.05% .91%
Return on average equity 4.99% 9.72%
Non-interest expense to average assets 1.82% 2.18%
</TABLE>
Source: SNL Securities, L.P.
- 18 -
<PAGE> 24
(2) The individual performance appraisals of the officers and
their contributions toward the Company's overall profitability;
(3) The compensation paid to executive officers at other financial
institutions comparable in size in the Company's general market area, as shown
by compensation surveys; and
(4) The performance of the Company's Common Stock from the
completion of its initial public offering in mid-October 1994 through September
30, 1996, as shown in the performance graph included in this Proxy Statement.
Prior to fiscal 1995, the compensation of the executive officers
consisted primarily of salary, bonus and deferred compensation. When the
Association was a mutual institution, the most effective way of rewarding the
executive officers for the Association's success was through the payment of
bonuses. Following the successful completion of the Association's conversion
from mutual to stock form in October 1994, the Company adopted an ESOP for the
benefit of all full-time employees and a Stock Option Plan and a Recognition
Plan for the benefit of directors, officers and key employees. During fiscal
1995, the Committee used these stock benefit plans to supplement cash
compensation and provide appropriate incentives to the executive officers and
other key employees. The Committee further believes that these stock-based
incentives cause the interests of the executive officers to be more closely
aligned with those of the stockholders of the Company. The Stock Option Plan
and the Recognition Plan were approved by the Company's stockholders at the
1995 annual meeting.
In fiscal 1996, the Company eliminated all bonuses to senior
management (including Messrs. Ochman and Sharp) and eliminated the fees paid to
the Chairman of the Board. These actions were taken in light of the decline in
the Company's net income from fiscal 1995 to fiscal 1996. In addition, in
fiscal 1996 the Board of Directors of the Company adopted a resolution
expressing its intent to not grant further stock options or Recognition Plan
shares to those executive officers (including Messrs. Ochman and Sharp) who
received grants when the Company's Stock Option Plan and Recognition Plan were
approved by stockholders in January 1995. In this regard, the Committee notes
that the stock options and Recognition Plan shares granted in fiscal 1995 vest
over a five-year period. As an additional cost savings measure and in light of
the Company's ESOP, in fiscal 1996 the Association terminated its Retirement
Plan for employees and the related agreement for Mr. Ochman.
As a result of the above actions, Mr. Ochman's combined salary and
bonus decreased by $49,000 or 8.5% from fiscal 1995 to fiscal 1996 and Mr.
Ochman received no long-term compensation in fiscal 1996, as compared to
319,267 stock options and 127,707 restricted Recognition Plan shares in fiscal
1995. The Committee believes that the decline in Mr. Ochman's total
compensation in fiscal 1996 is substantially greater than the decline in the
- 19 -
<PAGE> 25
Company's performance in fiscal 1996, and the Committee notes that fiscal 1995
was a record year for the Company in terms of net income.
As noted above, several stock benefit plans were implemented in fiscal
1995. The allocation of stock under the ESOP to the Chief Executive Officer's
account as well as to the accounts of all employees was done in accordance with
the Employee Retirement Income Security Act of 1974, and such allocations will
continue on an annual basis. The stock allocated to these accounts will only
be distributed upon the employees' retirement, death or disability. The stock
options granted to Mr. Ochman, as with all employees, become exercisable at the
rate of 20% per year commencing on the first annual anniversary of the date of
grant. Because the stock options become valuable only as the per share price
of the Company's Common Stock appreciates in value, they are designed to cause
Mr. Ochman's interests (and those of all employees) in the future performance
and success of the Company to be aligned closely with the interests of the
Company's stockholders. The Recognition Plan shares granted to Mr. Ochman are
primarily in recognition for his past performance and service to the
Association since 1971, and these shares as well as the Recognition Plan shares
granted to all other persons also vest at the rate of 20% per year commencing
on the first annual anniversary of the date of grant. Because the Recognition
Plan shares also increase in value as the per share price of the Company's
Common Stock increases, this grant was also designed to cause Mr. Ochman's
interests (and those of all other recipients) in the future performance of the
Company to be aligned closely with the interests of the Company's stockholders.
The Committee considered the stock-based benefits allocated or granted
in fiscal 1995 to be appropriate in light of the Company's increase in
stockholder value. The market value of the Common Stock increased by over 75%
on a per share basis (including cash dividends) from the Association's
conversion from mutual to stock form in October 1994 through September 30,
1996. This performance is further highlighted on the following Performance
Graph, which compares the Company's stock performance with the stock
performance of other companies as measured by broad indices.
Following review and approval by the Committee, all issues pertaining
to executive compensation are submitted to the full Board of Directors for
their approval. Mr. Ochman does not participate in the review of his
compensation.
John A. Borden, Chairman
Paul W. Gleason
Albert D. Stiles, Jr.
- 20 -
<PAGE> 26
PERFORMANCE GRAPH
The following graph demonstrates comparison of the cumulative total
returns for the Common Stock of the Company, the SNL Securities $500 million to
$1 Billion Thrift Asset Size Index, the SNL Thrift Index and the Nasdaq Stock
Market Index since the Company's initial public offering in October 1994.
<TABLE>
<CAPTION>
PERIOD ENDING
10/31/94 03/31/95 09/30/95 03/31/96 09/30/96
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
IBS Financial Crp. NJ................ 100.00 123.07 172.06 161.23 168.23
Nasdaq Total Return.................. 100.00 107.23 137.43 145.60 163.08
SNL Thrift Index..................... 100.00 102.77 134.83 143.74 163.23
SNL $500M-$1B Thrift................. 100.00 106.38 134.03 140.51 157.87
</TABLE>
The above graph represents $100 invested in the Company's initial
public offering of Common Stock on October 13, 1994 at $10.00 per share. The
Common Stock commenced trading on the Nasdaq National Market on October 13,
1994. The cumulative total returns include the payment of cash dividends by
the Company.
- 21 -
<PAGE> 27
STOCK OPTIONS
The following table discloses certain information regarding the options
held at September 30, 1996 by the Chief Executive Officer and each other named
executive officer. No options were exercised by such persons during the year
ended September 30, 1996.
<TABLE>
<CAPTION>
Number of Options at Value of Options at
September 30, 1996 September 30, 1996
---------------------------------- -----------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------- ----------- ------------- ------------- ----------------
<S> <C> <C> <C> <C>
Joseph M. Ochman, Sr. 63,853 255,414 $347,680 $1,390,729
Richard G. Sharp 25,734 102,935 140,122 560,481
</TABLE>
- -------------------------
(1) Based on a per share market price of $14.875 at September 30, 1996.
DIRECTORS' FEES
Directors of the Company received an annual fee of $2,400 from the
Company during fiscal 1996. Directors of the Association are paid a monthly fee
for attendance at each Board of Directors' meeting. The amount of the fee was
$1,325 during fiscal 1996. Two paid absences are permitted. For service on the
Executive Committee, which generally meets once a month, directors received fees
of $575 per meeting attended in fiscal 1996. For service on the General Loan
Committee, which generally meets twice each month, directors received fees of
$500 per meeting attended in fiscal 1996. For all other meetings of committees,
which meet as needed, directors received fees of $475 per meeting attended
during fiscal 1996. Those directors who serve as trustees of the Association's
Retirement Plan receive a fee, which amounted to $475 per quarter during fiscal
1996. In lieu of receiving other directors' fees, the Chairman of the Board of
Directors received a fee for service as Chairman, which amounted to $9,000 per
quarter until June 30, 1996, at which time such fee was terminated.
EMPLOYMENT AGREEMENTS
The Company and the Association (the "Employers") during October 1994
entered into employment agreements with each of Messrs. Ochman, Sharp,
Chigounis, Cosenza and Ms. O'Hara. The Employers agreed to employ Messrs.
Ochman and Sharp for a term of three years and the other officers for a term of
two years, in each case in their current respective positions. The agreements
with Messrs. Chigounis and Cosenza and Ms. O'Hara expired in October 1996. On
April 22, 1996, Mr. Ochman's joint agreement with both the Company and the
Association was replaced by two separate three-year employment
- 22 -
<PAGE> 28
agreements - one with the Company and one with the Association. Mr.
Ochman's new agreements are substantially similar to his prior agreement, except
that his agreement with the Company includes different provisions regarding
Section 280G of the Internal Revenue Code of 1986 (the "Code") as described
below. The compensation and expenses of Messrs. Ochman and Sharp (the
"Executives") are paid by the Company and the Association in the same
proportion as the time and services actually expended by the Executives on
behalf of each respective Employer. The term of Mr. Ochman's employment
agreements with the Company and the Association shall be extended each year for
a successive additional one-year period upon approval of the respective Board
of Directors unless Mr. Ochman elects, not less than 30 days prior to the
annual anniversary date, not to extend the employment term.
The Executives' employment agreements are terminable with or without
cause by the respective Employer(s). The Executive has no right to compensation
or other benefits pursuant to the employment agreement for any period after
voluntary termination or termination by the respective Employer(s) for cause,
disability, retirement or death, provided, however, that (i) in the event that
(a) the Executive terminates his employment because of failure of the respective
Employer(s) to comply with any material provision of the employment agreement or
the respective Employer(s) change the Executive's title or duties, or (b) the
employment agreement is terminated by the respective Employer(s) other than for
cause, disability, retirement or death or by the Executive as a result of
certain adverse actions which are taken with respect to the Executive's
employment following a Change in Control of the Company, as defined, the
Executive will be entitled to a cash severance amount equal to three times the
Executive's base salary, and (ii) Mr. Ochman's employment agreements provide for
certain death, disability and medical benefits as set forth below. In addition,
Mr. Ochman will be entitled to a continuation of benefits similar to those he is
receiving at the time of such termination for the remaining term of the
agreement or until he obtains full-time employment with another employer.
A Change in Control is generally defined in the employment agreements
to include any change in control of the Company required to be reported under
the federal securities laws, as well as (i) the acquisition by any person of 25%
or more of the Company's outstanding voting securities and (ii) a change in a
majority of the directors of the Company during any two-year period without the
approval of at least two-thirds of the persons who were directors of the Company
at the beginning of such period.
Each employment agreement with the Association provides that if the
payments and benefits to be provided thereunder or otherwise upon termination of
employment are deemed to constitute a "parachute payment" within the meaning of
Section 280G of the Code, then such payments and benefits payable thereunder
shall be reduced, in the manner determined by the Executive, by the amount, if
any, which is the minimum necessary to result in no portion of the payments and
benefits being non-deductible by the Employers for federal income tax purposes.
Parachute payments generally are payments in excess of three times the base
amount, which is defined to mean the recipient's average annual
- 23 -
<PAGE> 29
compensation from the employer includible in the recipient's gross
income during the most recent five taxable years ending before the date on
which a change in control of the employer occurred. Recipients of parachute
payments are subject to a 20% excise tax on the amount by which such payments
exceed the base amount, in addition to regular income taxes, and payments in
excess of the base amount are not deductible by the employer as compensation
expense for federal income tax purposes. Under Mr. Ochman's employment
agreement with the Company, Mr. Ochman could receive payments and benefits that
constitute a parachute payment, in which event the Company has agreed to pay
the 20% excise tax that would otherwise be owed by Mr. Ochman and such
additional amounts as may be necessary to reimburse Mr. Ochman for the state
and federal income and excise taxes on such amounts.
Consistent with past practice, Mr. Ochman is provided with the use of
an automobile and the Employers pay the annual membership dues at two clubs.
Under Mr. Ochman's employment agreements, the Employers will provide coverage
for Mr. Ochman and his spouse under the Employers' health insurance plan until
Mr. Ochman attains age 70. In the event of Mr. Ochman's death or disability
during the term of the agreements, his spouse, estate, legal representative or
named beneficiaries will receive payments equal to the balance due to Mr. Ochman
for the remaining term of the agreements and Mr. Ochman's spouse will continue
to be covered under the Employers' health insurance plan for three years.
Although the above-described employment agreements could increase the
cost of any acquisition of control of the Company, management of the Company
does not believe that the terms thereof would have a significant anti-takeover
effect.
BENEFITS
Retirement Plan. The Association previously maintained a defined
benefit pension plan ("Retirement Plan") for all full time employees who had
attained the age of 21 years and had completed one year of service with the
Association. In general, the Retirement Plan provided for annual benefits
payable monthly upon retirement at age 65 in an amount equal to between 1.35%
and 2.00% of an employee's average earnings, which was the average compensation
paid to him or her over the five consecutive years of service which produced the
highest average during the 10 years preceding the participant's retirement or
termination of employment, excluding overtime, commissions and bonuses,
multiplied by his or her years of service (to a maximum of 35 years). Under the
Retirement Plan, an employee's benefits were fully vested after five years of
service. During the year ended September 30, 1996, the Association's pension
expense under the Retirement Plan amounted to $291,000.
At September 30, 1996, Messrs. Ochman and Sharp had 27 and 24 years,
respectively, of credited service under the Retirement Plan. The Association
terminated the Retirement Plan effective September 1, 1996 and will provide the
participants with their benefits in the
- 24 -
<PAGE> 30
first half of 1997. Messrs. Ochman and Sharp will receive cumulative
benefits under the Retirement Plan in lump sum distributions estimated to be
approximately $1.1 million and $543,000, respectively, which cumulative
benefits reflect 27 and 24 years, respectively, of credited service.
Supplemental Executive Retirement Agreement. In September 1987, the
Association entered into a Supplemental Executive Retirement Agreement ("SERP")
with Mr. Ochman in order to supplement the retirement benefits to be received by
him pursuant to the Association's Retirement Plan. Under the SERP, upon
retirement from the Association after attaining age 65, Mr. Ochman shall be
entitled to receive an annual supplemental retirement benefit equal to 1.35% of
his final average earnings, as defined in the Retirement Plan, up to the social
security covered compensation, plus 2% of final average earnings in excess of
such amount multiplied by Mr. Ochman's years of service (to a maximum of 35
years), and reduced by the benefit payable under the Retirement Plan. The
obligation to make payments pursuant to the SERP is unfunded, and the
Association annually credits to an account an amount which is projected to be
sufficient to defray the Association's obligation under the SERP. During the
year ended September 30, 1996, the Association recognized an expense of $824,000
in connection with the SERP. The Association has terminated the SERP effective
September 1, 1996 and provided cumulative SERP benefits of approximately $1.7
million to Mr. Ochman in March 1997. This amount represents cumulative
benefits, including the earnings thereon, since 1987.
Deferred Compensation Agreement. In January 1977, the Association and
Mr. Ochman entered into a deferred compensation agreement which was restated as
of December 1988 (the "Agreement"), pursuant to which Mr. Ochman is permitted to
defer a discretionary percentage of the total compensation otherwise payable to
him. The payment of deferred compensation pursuant to the Agreement is
unfunded, and the Association credits to a deferred compensation account the
amounts of compensation deferred by Mr. Ochman. Amounts held pursuant to the
Agreement are required to be paid to Mr. Ochman within 60 days following the
date of the termination of his employment with the Association, or as may be
permitted at an earlier date by the Board of Directors with Mr. Ochman
abstaining from voting. Mr. Ochman deferred $16,000 of compensation during
fiscal 1996. The Association and Mr. Ochman terminated the agreement in January
1996, at which time the remaining cumulative deferred amount of $202,000 was
distributed to Mr. Ochman.
Life Insurance Arrangements. In October 1981, the Association and Mr.
Ochman entered into a supplemental deferred compensation agreement (the
"Supplemental Agreement") pursuant to which the Association agreed to maintain
certain life insurance policies on Mr. Ochman's life with an aggregate face
amount of approximately $389,600 until Mr. Ochman's retirement after having
attained the age of 65. Life insurance policies that were previously owned by
the Association's Retirement Plan were purchased from the Retirement Plan by the
Association pursuant to the Supplemental Agreement for an amount equal to their
then cash value. The policies were amended to provide that the beneficiary of
the policies shall be Mr. Ochman's spouse and her heirs, and the Association
agreed to
- 25 -
<PAGE> 31
continue to pay the required premium payments. During the year ended
September 30, 1996, the Association paid total premiums of $9,510 with respect
to these insurance contracts. The Supplemental Agreement provides that,
following Mr. Ochman's retirement or disability, the Association will commence
payment to Mr. Ochman of the cash value of the insurance contracts in monthly
installments over a period of ten years.
Employee Stock Ownership Plan and Trust. The Company has established
the ESOP for employees of the Company and the Association. Full-time employees
of the Company and the Association who have been credited with at least 1,000
hours of service during a twelve month period and who have attained at least age
21 are eligible to participate in the ESOP.
In connection with the mutual to stock conversion of the Association,
the ESOP borrowed funds from the Company to purchase 8% of the Common Stock
issued in the conversion. The loan to the ESOP is being repaid principally from
the Company's and the Association's contributions to the ESOP over a period of
10 years, and the collateral for the loan is the Common Stock purchased by the
ESOP. The Company may, in any plan year, make additional discretionary
contributions for the benefit of plan participants in either cash or shares of
Common Stock, which may be acquired through the purchase of outstanding shares
in the market or from individual stockholders, upon the original issuance of
additional shares by the Company or upon the sale of treasury shares by the
Company. Such purchases, if made, would be funded through additional borrowings
by the ESOP or additional contributions from the Company. The timing, amount
and manner of future contributions to the ESOP will be affected by various
factors, including prevailing regulatory policies, the requirements of
applicable laws and regulations, and market conditions.
Shares purchased by the ESOP with the proceeds of the loan are held in
a suspense account and released on a pro rata basis as debt service payments are
made. Discretionary contributions to the ESOP and shares released from the
suspense account are allocated among participants on the basis of compensation.
Forfeitures are reallocated among remaining participating employees and may
reduce any amount the Company might otherwise have contributed to the ESOP.
Participants will vest in their right to receive their account balances within
the ESOP at the rate of 20% per year, starting with completion of their third
year of service. In the case of a "change in control," as defined, however,
participants will become immediately fully vested in their account balances.
Benefits may be payable upon retirement, early retirement, disability or
separation from service. The Company's contributions to the ESOP are not fixed,
so benefits payable under the ESOP cannot be estimated. Messrs. Ochman, Auchter
and Borden serve as trustees of the ESOP.
The Board of Directors of the Company has authorized an excess benefit
plan ("EBP") to provide certain additional retirement benefits to Mr. Ochman.
The EBP provides that Mr. Ochman shall receive an annual allocation of stock
units representing shares of Common Stock of the Company. The number of stock
units allocable to his benefit each year shall be equal to the difference
between the annual allocation of shares
- 26 -
<PAGE> 32
that would have been made to him in the ESOP, without regard to the
$150,000 limitation as set forth in Section 401(a)(17) of the Code, minus the
number of shares actually allocated to his ESOP account in a particular year.
The Company allocated 13,782 stock units having an aggregate value of $205,007
as of September 30, 1996 to the EBP in fiscal 1996.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Association's policy provides that all loans made by the
Association to its directors and officers are made in the ordinary course of
business, are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectability or
present other unfavorable features. During the fiscal year ended September 30,
1996, none of the Association's directors and executive officers had aggregate
loan balances in excess of $60,000, and no such individual had engaged in any
transaction with the Association with a value in excess of $60,000.
Arthur J. Abramowitz, a director nominee, is a stockholder and director
in Davis, Reberkenny & Abramowitz, P.C., which serves as general counsel to the
Association. The amount of fees paid by the Association to the law firm were
less than 5% of the law firm's gross revenues for the firm's last full fiscal
year.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Deloitte & Touche
L.L.P., independent certified public accountants, to perform the audit of the
Company's financial statements for the year ending September 30, 1997, and
further directed that the selection of auditors be submitted for ratification by
the stockholders at the Annual Meeting.
The Company has been advised by Deloitte & Touche L.L.P. that neither
that firm nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. Deloitte & Touche L.L.P. will have
one or more representatives at the Annual Meeting who will have an opportunity
to make a statement, if they so desire, and who will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF DELOITTE & TOUCHE L.L.P. AS INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING SEPTEMBER 30, 1997.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which is expected to be held on or about _____ __, 1998, must be
received at the principal executive offices of the Company, 1909 East Route 70,
Cherry Hill, New Jersey 08003,
- 27 -
<PAGE> 33
Attention: Chiara Eisennagel, Corporate Secretary, no later than ______ __,
1997. If such proposal is in compliance with all of the requirements of Rule
14a-8 under the 1934 Act, it will be included in the proxy statement and set
forth on the form of proxy issued for such annual meeting of stockholders. It
is urged that any such proposals be sent by certified mail, return receipt
requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the 1934 Act may be
brought before an annual meeting pursuant to Article 9.4 of the Company's
Certificate of Incorporation, which provides that business at an annual meeting
of stockholders must be (a) properly brought before the meeting by or at the
direction of the Board of Directors, or (b) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Company. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not later than 60 days prior to the
anniversary date of the immediately preceding annual meeting. A stockholder's
notice must set forth as to each matter the stockholder proposes to bring before
an annual meeting (a) a brief description of the business desired to be brought
before the annual meeting, (b) the name and address, as they appear on the
Company's books, of the stockholder proposing such business and, to the extent
known, any other stockholders known by such stockholder to be supporting such
proposal, (c) the class and number of shares of Common Stock of the Company
which are beneficially owned by the stockholder and, to the extent known, by any
other stockholders known by such stockholder to be supporting such proposal, and
(d) any financial interest of the stockholder in such business.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year
ended September 30, 1996 either preceded or accompanies this Proxy Statement.
Such annual report is not part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED SEPTEMBER 30, 1996 AND A LIST OF THE EXHIBITS THERETO
REQUIRED TO BE FILED UNDER THE 1934 ACT. SUCH WRITTEN REQUESTS SHOULD BE
DIRECTED TO CHIARA EISENNAGEL, CORPORATE SECRETARY, IBS FINANCIAL CORP., 1909
EAST ROUTE 70, CHERRY HILL, NEW JERSEY 08003. THE FORM 10-K IS NOT PART OF THE
PROXY SOLICITATION MATERIALS.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the approval
of the minutes of the last meeting of stockholders, the election of any person
as a director if the nominee is unable to serve or for good cause will not
serve, matters incident to the
- 28 -
<PAGE> 34
conduct of the meeting, and upon such other matters as may properly come before
the Annual Meeting. Management is not aware of any business that may properly
come before the Annual Meeting other than the matters described above in this
Proxy Statement. However, if any other matters should properly come before the
meeting, it is intended that the proxies solicited hereby will be voted with
respect to those other matters in accordance with the judgment of the persons
voting the proxies.
The Company may solicit proxies by mail, advertisement, telephone,
facsimile, telegraph and personal solicitation. Directors and executive officers
of the Company and the Association may solicit proxies personally or by
telephone without additional compensation. The Company will reimburse banks,
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy solicitation materials to the
beneficial owners of the Company's Common Stock.
The Company has retained D.F. King & Co., Inc., 77 Water Street, New
York, New York 10005, a professional proxy solicitation firm, to assist in the
solicitation of proxies and for related services. The Company will pay D.F.
King & Co., Inc. a fee of $30,000 and has agreed to reimburse it for its
reasonable out-of-pocket expenses. The Company has agreed to indemnify D.F.
King & Co., Inc. and its controlling persons, officers, directors, employees and
agents from and against any and all losses, claims, damages, liabilities and
expenses relating to its engagement, including liabilities and expenses under
the federal securities laws, but excluding matters relating to the indemnified
person's negligence, bad faith or willful misconduct. Approximately 50 persons
will be used by D.F. King & Co., Inc. in its solicitation efforts.
The Company will bear the cost of soliciting proxies on behalf of the
Board of Directors of the Company. The cost of such solicitation, which
includes the fees of the Company's attorneys, solicitors, advertising, printing
and mailing and other costs incidental to the solicitation, including litigation
fees and expenses, cannot be stated with precision at this time. However, after
excluding the normal costs of solicitation for an election of directors in the
absence of a proxy contest, the Company estimates that the total expenditures
relating to this proxy solicitation will be approximately $________, of which
approximately $________ has been incurred as of March 31, 1997. Of the total
estimate, approximately $____ relates to fees and expenses necessitated by the
refusal of Mr. Seidman and his group to disclose the identities of their
investors and provide other information, which disclosure was not provided until
the Company was forced to sue Mr. Seidman and the other members of his group.
See "Litigation Against the Seidman Group."
YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED BLUE
----
PROXY CARD AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- 29 -
<PAGE> 35
- --------------------------------------------------------------------------------
IMPORTANT
Your vote is important. Regardless of the number of shares of IBS
Financial common stock you own, please vote as recommended by your Board of
Directors by taking these two simple steps:
1. PLEASE SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED BLUE PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
2. PLEASE DO NOT RETURN ANY WHITE PROXY CARDS SENT TO YOU BY SEIDMAN.
IF YOU VOTED SEIDMAN'S PROXY CARD BEFORE RECEIVING YOUR IBS FINANCIAL
BLUE PROXY CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE SIMPLY BY SIGNING,
DATING AND MAILING THE ENCLOSED BLUE PROXY CARD. THIS WILL CANCEL YOUR EARLIER
VOTE SINCE ONLY YOUR LATEST DATED PROXY CARD WILL COUNT AT THE ANNUAL MEETING.
If you own shares in the name of a brokerage firm, only your broker can
vote your shares on your behalf and only after receiving your specific
instructions. Please call your broker and instruct him/her to execute a BLUE
card on your behalf. You should also promptly sign, date and mail your BLUE
card when you receive it from your broker. Please do so for each separate
account you maintain.
You should return your BLUE proxy card at once to ensure that your vote
is counted. This will not prevent you from voting in person at the meeting
should you attend.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR SHARES,
PLEASE CALL D.F. KING & CO., INC., WHICH IS ASSISTING US, TOLL-FREE AT
1-800-714-3306.
- --------------------------------------------------------------------------------
<PAGE> 36
REVOCABLE PROXY
IBS FINANCIAL CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF IBS
FINANCIAL CORP. ("COMPANY") FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON _____ __, 1997 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company as of March 24, 1997,
hereby authorizes the Board of Directors of the Company or any successors
thereto as proxies with full powers of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the Four Points Hotel (Sheraton), 1450 Route 70 East, Cherry Hill, New Jersey,
on ______, _____ __, 1997 at 9:30 a.m., Eastern Time, and at any adjournment of
said meeting, and thereat to act with respect to all votes that the undersigned
would be entitled to cast, if then personally present, as follows:
1. ELECTION OF DIRECTOR
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked for all nominees listed
to the contrary below) below
Nominees for a four-year term: Thomas J. Auchter and Arthur J. Abramowitz
(INSTRUCTION: To withhold authority to vote for only one of the nominees, write
the name of the nominee in the space provided.)____________________________
2. PROPOSAL to ratify the appointment of Deloitte & Touche L.L.P. as the
Company's independent auditors for the fiscal year ending September 30,
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote with respect to
approval of the minutes of the last meeting of stockholders, the election of
any person as a director if a nominee is unable to serve or for good cause will
not serve, matters incident to the conduct of the meeting, and upon such other
matters as may properly come before the meeting.
The Board of Directors recommends that you vote FOR the Board of
Directors' nominees listed above and FOR Proposal 2. Shares of common stock of
the Company will be voted as specified. IF NO SPECIFICATION IS MADE, SHARES
WILL BE VOTED FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES TO THE BOARD
OF DIRECTORS, FOR PROPOSAL 2, AND OTHERWISE
<PAGE> 37
AT THE DISCRETION OF THE PROXIES. This proxy may not be voted for any person
who is not a nominee of the Board of Directors of the Company. THIS PROXY MAY
BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE ANNUAL MEETING.
The undersigned hereby acknowledges receipt of a Notice of Annual
Meeting of the Stockholders of the Company called for _____ __, 1997, a Proxy
Statement for the Annual Meeting and the 1996 Annual Report to Stockholders
(which may have been previously mailed).
Dated: , 1997
---------------------
--------------------------------------------------
--------------------------------------------------
Signature(s)
PLEASE SIGN THIS EXACTLY AS YOUR NAME(S) APPEAR(S)
ON THIS PROXY. WHEN SIGNING IN A REPRESENTATIVE
CAPACITY, PLEASE GIVE TITLE. WHEN SHARES ARE HELD
JOINTLY, ONLY ONE HOLDER NEED SIGN.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
