UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
BCB Bancorp, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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March 13, 2006
Dear Fellow Shareholder:
We cordially invite you to attend the Annual Meeting of Shareholders ("Annual
Meeting") of BCB Bancorp, Inc. (the "Company"). The Annual Meeting will be held
at The Chandelier Restaurant, 1081 Broadway, Bayonne, New Jersey 07002, at 10:00
a.m., Eastern time, on April 27, 2006.
The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Annual Meeting. During the Annual Meeting we
will also report on the operations of the Company. Directors and officers of the
Company, as well as a representative of our independent registered public
accounting firm, will be present to respond to any questions that shareholders
may have.
The Annual Meeting is being held so that shareholders may vote upon the election
of four directors and the ratification of the appointment of the independent
registered public accounting firm for the year ending December 31, 2006.
The Board of Directors of the Company has determined that approval of the
matters to be considered at the Annual Meeting is in the best interests of the
Company and its shareholders. For the reasons set forth in the Proxy Statement,
the Board of Directors recommends a vote "FOR" the matters to be considered.
On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card in the postage-paid envelope as soon as possible, even if
you currently plan to attend the Annual Meeting. This will not prevent you from
voting in person, but will assure that your vote is counted if you are unable to
attend the Annual Meeting. Your vote is important, regardless of the number of
shares that you own. Please sign and return the enclosed proxy card promptly.
Your cooperation is appreciated, since a majority of the common stock must be
represented at the Annual Meeting, either in person or by proxy, to constitute a
quorum for the conduct of business.
Sincerely,
/s/ Mark D. Hogan
Mark D. Hogan
Chairman of the Board
BCB Bancorp, Inc.
104-110 Avenue C
Bayonne, New Jersey 07002
(201) 823-0700
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On April 27, 2006
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of BCB Bancorp, Inc., (the "Company") will be held at The Chandelier
Restaurant, 1081 Broadway, Bayonne, New Jersey 07002, on April 27, 2006 at 10:00
a.m., Eastern time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is being held so that shareholders may vote on the
following matters:
1. The election of four directors;
2. The ratification of the appointment of the independent registered
public accounting firm for the Company for the year ending December
31, 2006; and
Such other business as may properly come before the Company's Annual Meeting or
any adjournment or postponement of the Annual Meeting.
Any action may be taken on the foregoing proposals at the Annual
Meeting on the date specified above, or on any date or dates to which the Annual
Meeting may be adjourned. Shareholders of record at the close of business on
March 6, 2006, are the shareholders entitled to vote at the Annual Meeting or
any adjournments thereof.
EACH SHAREHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE ANNUAL MEETING,
IS REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE SHAREHOLDER MAY BE
REVOKED ANY TIME PRIOR TO THE ANNUAL MEETING. A PROXY MAY BE REVOKED BY FILING
WITH THE SECRETARY OF THE COMPANY A WRITTEN NOTICE OF REVOCATION, SUBMITTING A
DULY EXECUTED PROXY BEARING A LATER DATE, OR BY VOTING IN PERSON AT THE ANNUAL
MEETING. HOWEVER, IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE REGISTERED IN THE
NAME OF A BROKER, BANK OR OTHER NOMINEE, YOU WILL NEED ADDITIONAL DOCUMENTATION
FROM THE RECORDHOLDER IN ORDER TO VOTE PERSONALLY AT THE ANNUAL MEETING.
By Order of the Board of Directors
/s/ Mark D. Hogan
Mark D. Hogan
Chairman of the Board
Bayonne, New Jersey
March 13, 2006
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
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PROXY STATEMENT
BCB Bancorp, Inc.
104-110 Avenue C
Bayonne, New Jersey 07002
(201) 823-0700
ANNUAL MEETING OF SHAREHOLDERS
To be Held on April 27, 2006
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INTRODUCTION
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This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of BCB Bancorp, Inc. (the "Company")
to be used at the Annual Meeting of Shareholders of the Company (the "Annual
Meeting"), which will be held at The Chandelier Restaurant, 1081 Broadway,
Bayonne, New Jersey 07002, on April 27, 2006, at 10:00 a.m., Eastern time, and
all adjournments of the Annual Meeting. The accompanying Notice of Annual
Meeting of Shareholders and this Proxy Statement are first being mailed to
shareholders on or about March 13, 2006.
At the Annual Meeting shareholders will vote on the election of four
directors of the Company, the ratification of the appointment of the independent
registered public accounting firm for the Company for the year ending December
31, 2006 and such other matters as may properly come before the Annual Meeting
or any adjournments thereof.
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REVOCATION OF PROXIES
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Shareholders who execute proxies in the form solicited hereby retain the
right to revoke them in the manner described below. Unless so revoked, the
shares represented by such proxies will be voted at the Annual Meeting and any
adjournments thereof. Proxies solicited on behalf of the Board of Directors of
the Company will be voted in accordance with the directions given thereon. Where
no instructions are indicated, validly executed proxies will be voted "FOR" the
proposals set forth in this Proxy Statement for consideration at the Annual
Meeting.
Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company at the address of the Company shown above, the
submission of a later dated proxy or by voting in person at the Annual Meeting.
The presence at the Annual Meeting of any shareholder who had returned a proxy
shall not revoke such proxy unless the shareholder delivers his or her ballot in
person at the Annual Meeting or delivers a written revocation to the Secretary
of the Com 2 pany prior to the voting of such proxy.
If your shares of common stock are held in "street name" by a broker, bank
or other nominee, you will receive instructions from your broker, bank or other
nominee that you must follow in order to have your shares voted at the Annual
Meeting. If you wish to change your voting instructions after you have returned
your voting instructions to your broker, bank or other nominee you must contact
your broker, bank or other nominee. If you want to vote your shares of common
stock held in street name in person at the Annual Meeting, you will have to get
a legal proxy in your name from the broker, bank or other nominee who holds your
shares.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Holders of record of the common stock of the Company as of the close of
business on March 6, 2006 (the "Record Date") are entitled to one vote for each
share then held. As of the Record Date, the Company had 5,002,581 shares of
common stock issued and outstanding. The presence in person or by proxy of a
majority of the outstanding shares of common stock entitled to vote is necessary
to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
will be counted for purposes of determining that a quorum is present.
Persons and groups who beneficially own in excess of 5% of the common stock
are required to file certain reports with the Securities and Exchange Commission
("SEC") regarding such beneficial ownership. The Company is aware of one group
who beneficially owned in excess of 5% of the common stock on the Record Date
that being Wellington Management Company, LLP owning 295,000 shares or 6.09% of
outstanding stock.
In accordance with New Jersey law, a list of shareholders entitled to vote
at the Annual Meeting shall be made available at the Annual Meeting.
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VOTING PROCEDURES AND METHOD OF COUNTING VOTES
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As to the election of directors, the proxy card being provided by the Board
of Directors enables a shareholder to vote "FOR" the election of the four
nominees proposed by the Board of Directors, or to "WITHHOLD AUTHORITY" to vote
for the nominees being proposed. Under New Jersey law and the Company's
Certificate of Incorporation and Bylaws, directors are elected by a plurality of
votes cast, without regard to either broker non-votes, or proxies as to which
authority to vote for the nominees being proposed is withheld.
As to the ratification of the independent registered public accounting firm
of the Company, by checking the appropriate box a shareholder may: (i) vote
"FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on
such item. Under the Company's Certificate of Incorporation and Bylaws, the
ratification of these matters shall be determined by a majority of the votes
cast, without regard to broker non-votes or proxies marked "ABSTAIN."
The Board of Directors will designate an inspector of elections.
Regardless of the number of shares of common stock owned, it is important
that holders of a majority of the shares of the Company's common stock be
represented by proxy or present in person at the Annual Meeting. Shareholders
are requested to vote by completing the enclosed proxy card and returning it
signed and dated in the enclosed postage-paid envelope. Shareholders are urged
to indicate their vote in the spaces provided on the proxy card. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY WILL BE VOTED IN ACCORDANCE
WITH YOUR INSTRUCTIONS GIVEN ON THE PROXY. WHERE NO INSTRUCTIONS ARE INDICATED,
SIGNED PROXIES WILL BE VOTED "FOR" EACH OF THE PROPOSALS TO BE CONSIDERED AT THE
ANNUAL MEETING.
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PROPOSAL I - ELECTION OF DIRECTORS
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The Company's Board of Directors is currently composed of 10 members and is
divided into three classes, with one class of directors elected each year. At
the 2004 Annual Meeting of Shareholders, held in April 2005, shareholders
approved an amendment to the Company's Certificate of Incorporation pursuant to
which the directors of the Company will serve staggered terms so that a portion
of the Board will be elected at each annual meeting of shareholders. The Board
of Directors has determined to increase the size of the Board to 11 members
effective at the Annual Meeting. Directors of the Company will generally be
elected to serve for a three-year period and until their respective successors
have been elected and qualified. Four directors will be elected at the Annual
Meeting, each to serve for a three-year period and until his successor has been
elected and shall qualify. The Board of Directors has nominated Thomas M.
Coughlin, Joseph Lyga, Alexander Pasiechnik and Joseph Tagliareni for
2
election as directors at the Annual Meeting. Each nominee of the Board of
Directors has consented to being named in this Proxy Statement.
The table below sets forth certain information, as of March 6, 2006,
regarding the composition of the Company's Board of Directors, including the
terms of office of Board members, and information regarding the executive
officers of the Company and Bayonne Community Bank (the "Bank"), the Company's
principal operating subsidiary. It is intended that the proxies solicited on
behalf of the Board of Directors (other than proxies in which the vote is
withheld as to the nominee) will be voted at the Annual Meeting for the election
of the nominees identified below. If a nominee is unable to serve, the shares
represented by proxies will be voted for the election of such substitute as the
Board of Directors may recommend. At this time, the Board of Directors knows of
no reason why any of the nominees might be unable to serve, if elected. Except
as indicated herein, there are no arrangements or understandings between the
nominee and any other person pursuant to which such nominee was selected.
Shares
Shares
Position(s) Held With Director Current Beneficially Percent of
Name the Company or the Bank Age Since(1) Term Expires Owned(2) Class(2)
---- ----------------------- --- -------- ------------ -------- --------
NOMINEES
Thomas M. Coughlin Chief Financial Officer 46 2002 2005 156,174(3) 3.1%
and Director
Joseph Lyga Director 46 2000 2005 92,496(4) 1.8
Alexander Pasiechnik Director 44 2000 2005 93,753(5) 1.9
Joseph Tagliareni Director of Bank 51 -- -- 34,926(6) *
DIRECTORS
Robert Ballance Director 47 2000 2007 112,473(7) 2.2
Judith Q. Bielan Director 41 2000 2006 114,570(8) 2.3
Joseph Brogan Director 67 2000 2007 191,370(9) 3.8
James E. Collins Senior Lending Officer 57 2003 2006 160,841(10) 3.2
and Director
Mark D. Hogan Chairman of the Board 40 2000 2006 198,434(11) 3.9
Donald Mindiak President, Chief 47 2000 2007 144,854(12) 2.9
Executive
Officer and Director
Dr. August Pellegrini, Director 46 2000 2007 101,380(13) 2.0
Jr.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Olivia Klim Executive Vice President 60 N/A N/A 30,081(14) *
Amer Saleem Vice President 51 N/A N/A 9,183(15) *
All directors and
executive
officers as a group
(13 persons) N/A N/A N/A N/A 1,440,538 26.5%
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* Less than 1%.
(1) Includes service as a director of Bayonne Community Bank.
(2) Includes shares underlying options that are exercisable within 60 days from
the Record Date.
(3) Mr. Coughlin has sole voting and dispositive power over 134,660 shares.
Includes 21,514 shares underlying options exercisable within 60 days from
the Record Date.
(4) Mr. Lyga has sole voting and dispositive power over 56,525 shares, shared
voting and dispositive power over 1,040 shares with his spouse and shared
voting and dispositive power over 377 shares with his child. Includes
34,554 shares underlying options exercisable within 60 days from the Record
Date.
(5) Mr. Pasiechnik has sole voting and dispositive power over 59,063 shares.
Includes 34,690 shares underlying options exercisable within 60 days from
the Record Date.
(6) Mr. Tagliareni has sole voting and dispositive power over 22,920 shares,
shared voting and dispositive power over 10,966 shares with his spouse and
shared voting and dispositive power over 1,040 shares with his children.
(7) Mr. Ballance has sole voting and dispositive power over 73,768 shares,
shared voting and dispositive power over 953 shares with his spouse and
shared voting and dispositive power over 2,494 shares with his children.
Includes 35,258 shares underlying options exercisable within 60 days from
the Record Date.
(8) Ms. Bielan has sole voting and dispositive power over 75,979 shares, shared
voting and dispositive power over 2,167 shares with her spouse and shared
voting and dispositive power over 1,890 shares with her children. Includes
34,534 shares underlying options exercisable within 60 days from the Record
Date.
(9) Mr. Brogan has sole voting and dispositive power over 47,230 shares, shared
voting and dispositive power over 5,671 shares with his spouse and shared
voting and dispositive power over 99,196 shares with his grandchildren.
Includes 39,273 shares underlying options exercisable within 60 days from
the Record Date.
(10) Mr. Collins has sole voting and dispositive power over 118,098 shares,
shared voting and dispositive power over 851 shares with his spouse and
shared voting and dispositive power over 3,441 shares with his children.
Includes 38,451 shares underlying options exercisable within 60 days from
the Record Date.
(Footnotes continued on next page)
3
(11) Mr. Hogan has sole voting and dispositive power over 144,610 shares, shared
voting and dispositive power over 13,891 shares with his spouse and shared
voting and dispositive power over 1,988 shares with his children. Includes
37,945 shares underlying options exercisable within 60 days from the Record
Date.
(12) Mr. Mindiak has sole voting and dispositive power over 103,016 shares,
shared voting and dispositive power over 2,950 shares with his spouse and
shared voting and dispositive power over 1,561 shares with his child.
Includes 37,330 shares underlying options exercisable within 60 days from
the Record Date.
(13) Dr. Pellegrini has sole voting and dispositive power over 66,266 shares.
Includes 35,114 shares underlying options exercisable within 60 days from
the Record Date.
(14) Ms. Klim has sole voting and dispositive power over 14,331 shares and
shared voting and dispositive power over 500 shares with her spouse.
Includes 15,250 shares underlying options exercisable within 60 days from
the Record Date.
(15) Mr. Saleem has sole voting and dispositive power over 2,384 shares and
shared voting and dispositive power over 945 shares with his spouse.
Includes 5,854 shares underlying options exercisable within 60 days from
the Record Date.
Biographical Information Regarding Directors, Executive Officers and Nominees
Set forth below is biographical information regarding directors and
executive officers of the Company and the Bank. Unless otherwise noted each
director has held the indicated position for at least five years.
Directors
Robert Ballance, 47, is a Battalion Chief with the Bayonne Fire Department
and the owner of Bob's Carpet located in Bayonne. Mr. Ballance is the Treasurer
of the Holy Family Father's Club and the Bayonne Fire Museum Foundation and a
member of the Bayonne Elks, B.P.O.E. Mr. Ballance formerly served as a Board
Member of the Bayonne Federal Credit Union and has served as the Treasurer of
the Bayonne Fire Department Local #11. Mr. Ballance attended Saint Vincent
DePaul Grammar School and Marist High School in Bayonne.
Judith Q. Bielan, Esq., 41, is an attorney practicing law for 16 years. Ms.
Bielan currently owns her own law firm, Bielan, Saminski & Associates, P.C.,
which she formed in 1996. Ms. Bielan was a partner with Cavanaugh and Bielan,
P.C. from 1993 to 1996, and associated with the firm of Schumann, Hanlon,
O'Connor and McCrossin from 1989 to 1993. She is a member of the New York and
New Jersey State Bars as well as an Officer of the Hudson County Bar
Association. Ms. Bielan serves on the Hudson County Bar Association's Family Law
Committee and serves on the Advisory Board for Holy Family Academy. She also
coaches Bayonne PAL Junior Boys' Basketball. Ms. Bielan is a lifetime resident
of Bayonne, having attended Our Lady Star of the Sea Elementary School and Holy
Family Academy. In addition, she holds degrees from Montclair State College and
Seton Hall Law School.
Joseph Brogan, 67, has 45 years of experience in the insurance industry and
is the founder of Brogan Insurance Agency located in Bayonne. Mr. Brogan is the
former head of the State Farm Agents Association and is a current member of the
Knights of Columbus and the Fraternal Order of Elks. Mr. Brogan attended Saint
Aloysius Grammar School, Jersey City, and Seton Hall Preparatory School, has
received a B.S. from Saint Peter's College and attended graduate school at
Fordham and New Jersey City University.
James E. Collins, 57, is Senior Lending Officer of the Bank, and has worked
in the banking industry since 1972. He is the former Vice President of Lending
at First Savings Bank of New Jersey and served as that bank's Community
Reinvestment Officer and as a member of the Budget, Asset and Liability, Asset
Classification and Loan Committees. In addition, Mr. Collins has served as
Treasurer of the Bayon ne Chamber of Commerce, as the past President of
Ireland's 32 and as citywide director for Bayonne's C.Y.O. Sports Programs.
Currently, Mr. Collins serves as a Director for Windmill Alliance, Inc. Mr.
Collins attended St. Mary's, Our Lady Star of the Sea Elementary School and
Marist High School, received a B.S. from St. Peter's College and attended
graduate school at the Institute for Financial Education. Mr. Collins is a
certified Real Estate Appraiser and a member of the Review Appraisers
Association.
Thomas M. Coughlin, 46, is Chief Operating Officer and Chief Financial
Officer of the Company and the Bank, and has been employed in the banking
industry for 19 years. Mr. Coughlin was formerly Vice President of Chatham
Savings Bank and, prior to that, Controller and Corporate Secretary of First
Savings Bank of New Jersey. While at First Savings Bank of New Jersey, Mr.
Coughlin served in various capacities on several executive managerial
committees, including, but not limited to, the Budget, Asset/Liability and Loan
Review Committees. Mr. Coughlin, who received his CPA designation in 1982, is
the past President of the American Heart Association and has served as Trustee
of D.A.R.E. and the Bayonne P.A.L. Mr. Coughlin attended Saint Vincent DePaul
Grammar School and Bayonne High School, and received a B.S. degree from Saint
Peter's College.
4
Mark D. Hogan, C.P.A., 40, is a sole practitioner with an office located in
Bayonne. In addition, Mr. Hogan is a registered representative providing
financial planning for his clientele. Mr. Hogan has achieved the following
licenses and designations: NASD Series 7, 24 and 63, New Jersey Life and Health
Insurance broker, New Jersey Property and Casualty Insurance broker. Mr. Hogan
attended Saint Peter's Preparatory School and received a B.S. degree in Finance
from Pace University. He is a member of the New Jersey Society of Certified
Public Accountants. Mr. Hogan serves as the Chairman of the Board of Directors
of the Company and the Bank.
Joseph Lyga, 46, has served on the Bayonne Fire Department since 1985,
having achieved the rank of Fire Captain. In addition, Mr. Lyga has been a
self-employed contractor for the last 21 years. Mr. Lyga has served as President
and Secretary/State Delegate of the Bayonne Fire Department Local #211 and has
served as President, Vice President, Secretary and Treasurer of the Bayonne Fire
Department Local #11. Mr. Lyga is also a member of the Sicilian Citizens Club
and the Friends of Nick Capodice. Mr. Lyga attended Saint Mary's, Our Lady Star
of the Sea Elementary School, Marist High School, New Jersey City University and
the Chubb Institute where he studied computer programming and network design.
Donald Mindiak, 47, has been employed in the banking industry for over 25
years and has been President and Chief Executive Officer of the Bank since
October 1999 and the Company since May 2003. Most recently he was employed by
Summit Bank as a Manager of Strategic Planning and Support. Prior to his
employment at Summit Bank, Mr. Mindiak was employed at First Savings Bank of New
Jersey in Bayonne. During his tenure at First Savings Bank of New Jersey, he
served as Treasurer and prior to that position as Controller. Mr. Mindiak served
as an active member of the Asset/Liability, Budget, Investment and Rate Setting
Committees while at First Savings Bank of New Jersey and was the former Chairman
of the Asset Classification Committee. Mr. Mindiak has been a member of several
trade organizations including: the Community Bankers Association, the Hudson
County Savings League, the New Jersey Savings League and America's Community
Bankers. In addition, Mr. Mindiak serves as a trustee of the Bayonne Medical
Center Foundation Board. Mr. Mindiak received a B.A. degree from Rutgers, Newark
College of Arts and Sciences and an M.B.A. degree in Finance from Fairleigh
Dickinson University.
Alexander Pasiechnik, 44, is President and Chief Executive Officer of
Victoria T.V. Sales and Appliances. Mr. Pasiechnik was born in Bayonne and
attended Saint Mary's, Our Lady Star of the Sea Elementary School, Marist High
School, and Saint Peter's College.
Dr. August Pellegrini, Jr., 46, has practiced general dentistry in Bayonne
for 20 years and is currently the President of the New Jersey Dental
Association. Dr. Pellegrini is a past President of the Hudson County Dental
Society. Dr. Pellegrini is also a Hudson County delegate to the New Jersey
Dental Association House of Delegates, and is a past member of the Board of
Trustees of the New Jersey Foundation of Dentistry for Persons with
Disabilities. Dr. Pellegrini is a faculty member at UMDNJ, New Jersey Dental
School, in the Department of General and Hospital Dentistry. Dr. Pellegrini is
also a member of the Knights of Columbus. Dr. Pellegrini attended Horace Mann
Grammar School, Marist High School, Rutgers College and Temple University School
of Dentistry.
Joseph Tagliareni, 51, is the President and Chief Executive Officer of J&J
Printing, located in Bayonne, and has over twenty-nine years of printing
experience. Mr. Tagliareni is a member of many civic organizations including:
the Bayonne Chapter of UNICO National, the Knights of Columbus, New Era Civic
Club, the United Christians and Jews Association, the Bayonne Chamber of
Commerce, the Hometown Fair Committee, and the Chandelier Golf Committee. Mr.
Tagliareni is the Treasurer and a board member of the Bayonne Family YMCA and
serves on the school board of Saint Mary's, Our Lady Star of the Sea Elementary
School. Mr. Tagliareni is a committeeman for the First Ward in Bayonne. Mr.
Tagliareni attended Lincoln School and Bayonne High School. Mr. Tagliareni was,
until 2004, a director of the Company. Mr. Tagliareni was a member of the
Company's Board of Directors from 2003 through 2004. Mr. Tagliareni declined to
stand for re-election at the 2004 Annual Meeting.
Executive Officers who are not Directors
The following is biographical information regarding executive officers of
the Company or the Bank who are not also directors. Unless otherwise noted each
officer has held the indicated position for at least five years.
5
Olivia M. Klim, 60, has been has been employed in the banking industry for
over 37 years and is currently Executive Vice President of Business Development
of the Bank. Prior to joining the Bank in October 2000 Mrs. Klim was employed by
First Savings Bank of New Jersey, a division of Richmond County Financial as a
Business Development Officer responsible for the business development and
operational functions at that Bank's offices in Bayonne, New Jersey. Prior to
her employment at First Savings, Mrs. Klim was employed at First Fidelity Bank
as a Branch Administrator. Mrs. Klim is a Commissioner of the Bayonne Municipal
Utilities authority, and serves in various capacities for the local Chapter of
the Deborah Foundation, the College Opportunity Program, the American Institute
of Banking for Women, and the Bayonne Bullet Proof Vest Funding Campaign.
Further, Mrs. Klim serves on the Loan Review Committee for the Bayonne Economic
Development Corporation. Mrs. Klim is a graduate of the Bayonne School system
and attended St. Peter's College, and the Cohen & Brown School for Sales &
Investments.
Amer Saleem, 51, is a Vice President of Commercial Lending of the Bank.
Prior to joining the Bank in 2002, Mr. Saleem was an Assistant Vice President of
Commercial Lending of 1st Constitution Bank, Cranbury, New Jersey. Mr. Saleem
holds a B.A. degree in Economics, Diploma in Accounting from City of London
Polytechnic, London, England and an M.B.A. degree in Finance from Long Island
University, New York. Mr. Saleem has 19 years of banking experience,
specializing in commercial lending. Mr. Saleem is a member of the Officers'
Lending Committee.
Board Independence
The Board of Directors has determined that, except as to Messrs. Collins,
Coughlin and Mindiak, each member of the Board of Directors is an "independent
director" within the meaning of the Nasdaq corporate governance listing
standards. Messrs. Collins, Coughlin and Mindiak are not considered independent
because they are executive officers of the Company.
Meetings and Committees of the Board of Directors
The Company's Board of Directors meets on a monthly basis and may hold
additional special meetings. The Company's standing committees include the Audit
Committee, Compensation Committee and Nominating and Corporate Governance
Committee. The Bank's standing committees include an Asset/Liability Management
Committee, a Loan Committee, an Investment Committee and a Budget Committee.
During the year ended December 31, 2005, our board of directors held 12 regular
meetings and 6 special meetings. No director attended fewer than 75% in the
aggregate of the total number of board meetings held and the total number of
committee meetings in which he or she served during fiscal 2005. At last year's
Annual Meeting all attended.
The Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee consists of Directors
Ballance, Lyga and Pellegrini. Each member of the Nominating and Corporate
Governance Committee is considered "independent" as defined in the Nasdaq
corporate governance listing standards. The Company's Board of Directors has
adopted a written charter for the Nominating and Corporate Governance Committee
and the charter was last distributed to shareholders as part of the proxy
statement for the year ended December 31, 2003. The charter has not been
amended. The full Board of Directors, acting as a nominating committee, met one
time during 2005.
The functions of the Nominating and Corporate Governance Committee include
the following:
o to lead the search for individuals qualified to become members of the
Board of Directors and to select director nominees to be presented for
shareholder approval;
o to review and monitor compliance with the requirements for board
independence;
o to review the committee structure and make recommendations to the
Board of Directors regarding committee membership;
6
o to develop and recommend to the Board of Directors for its approval
corporate governance guidelines; and
o to develop and recommend to the Board of Directors for its approval a
self-evaluation process for the Board of Directors and its committees.
The Nominating and Corporate Governance Committee identifies nominees by
first evaluating the current members of the Board of Directors willing to
continue in service. Current members of the Board of Directors with skills and
experience that are relevant to the Company's business and who are willing to
continue in service are first considered for re-nomination, balancing the value
of continuity of service by existing members of the Board of Directors with that
of obtaining new perspectives. If any member of the Board of Directors does not
wish to continue in service, or if the Nominating and Corporate Governance
Committee of the Board of Directors decides not to re-nominate a member for
re-election, or if the size of the Board of Directors is increased, the
Nominating and Corporate Governance Committee would solicit suggestions for
director candidates from all board members. In addition, the Nominating and
Corporate Governance Committee is authorized by its charter to engage a third
party to assist in the identification of director nominees. The Nominating and
Corporate Governance Committee would seek to identify a candidate who at a
minimum satisfies the following criteria:
o has the highest personal and professional ethics and integrity and
whose values are compatible with the Company's;
o has had experiences and achievements that have given them the ability
to exercise and develop good business judgment;
o is willing to devote the necessary time to the work of the Board of
Directors and its committees, which includes being available for board
and committee meetings;
o is familiar with the communities in which the Company operates and/or
is actively engaged in community activities;
o is involved in other activities or interests that do not create a
conflict with their responsibilities to the Company and its
shareholders; and
o has the capacity and desire to represent the balanced, best interests
of the shareholders of the Company as a group, and not primarily a
special interest group or constituency.
The Nominating and Corporate Governance Committee will also take into
account whether a candidate satisfies the criteria for "independence" under the
Nasdaq corporate governance listing standards, and if a nominee is sought for
service on the Company's Audit Committee, the financial and accounting expertise
of a candidate, including whether an individual qualifies as an audit committee
financial expert.
Procedures for the Shareholder Recommendations for the Nomination of Directors
The Board of Directors has adopted procedures for the submission of
director nominees by shareholders. If a determination is made that an additional
candidate is needed for the Board of Directors, the Nominating and Corporate
Governance Committee will consider candidates submitted by the Company's
shareholders. Shareholders can submit the names of candidates for director by
writing to our Corporate Secretary, at 104-110 Avenue C, Bayonne, New Jersey
07002. The Chairman of the Board must receive a submission not less than 90 days
prior to the anniversary date of the Company's proxy materials for the preceding
year's annual meeting. If the date of the annual meeting is advanced more than
30 days prior to or delayed by more than 30 days after the anniversary of the
preceding year's annual meeting, the shareholder's suggestion must be so
delivered not later than the close of business on the tenth day following the
day on which public announcement of the date of such annual meeting is first
made. The submission must include the following information:
7
o the name and address of the shareholder as they appear on the
Company's books, and number of shares of the Company's common stock
that are owned beneficially by such shareholder (if the shareholder is
not a holder of record, appropriate evidence of the shareholder's
ownership will be required);
o the name, address and contact information for the candidate, and the
number of shares of common stock of the Company that are owned by the
candidate (if the candidate is not a holder of record, appropriate
evidence of the shareholder's ownership should be provided);
o a statement of the candidate's business and educational experience;
o such other information regarding the candidate as would be required to
be included in the proxy statement pursuant to SEC Regulation 14A;
o a statement detailing any relationship between the candidate and the
Company;
o a statement detailing any relationship between the candidate and any
customer, supplier or competitor of the Company;
o detailed information about any relationship or understanding between
the proposing shareholder and the candidate; and
o a statement that the candidate is willing to be considered and willing
to serve as a director if nominated and elected.
The Company has no written procedural or informational requirements for the
presentation of a shareholder nomination at the Annual Meeting of Shareholders.
It is expected that any person making a shareholder nomination at the Annual
Meeting will provide the information set forth above regarding themselves and
the proposed nominee.
Shareholder Communications with the Board
A shareholder of the Company who wants to communicate with the Board of
Directors or with any individual director can write to the President and Chief
Executive Officer of the Company, 104-110 Avenue C, Bayonne, New Jersey 07002,
Attention: Board Administration. The letter should indicate that the author is a
shareholder of the Company and if shares are not held of record, should include
appropriate evidence of stock ownership. Depending on the subject matter,
management will:
o forward the communication to the director or directors to whom it is
addressed;
o attempt to handle the inquiry directly, for example where it is a
request for information about the company or it is a stock-related
matter; or
o not forward the communication if it is primarily commercial in nature,
relates to an improper or irrelevant topic, or is unduly hostile,
threatening, illegal or otherwise inappropriate.
At each Board of Directors meeting, management presents a summary of all
communications received since the last meeting that were not forwarded and makes
those communications available to the directors.
Code of Ethics
The Company has adopted a code of ethics that is applicable to the
officers, directors and employees of the Company, including the Company's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. The Code of
Ethics of the Company has been filed as an exhibit to the Annual Report on Form
10-K.
8
The Audit Committee
The Audit Committee consists of directors Hogan, Bielan, Brogan and
Pellegrini. Each current member of the Audit Committee is considered
"independent" as defined in the Nasdaq corporate governance listing standards
and under SEC Rule 10A-3. The duties and responsibilities of the Audit Committee
include, among other things:
o retaining, overseeing and evaluating a firm of independent certified
public accountants to audit the annual financial statements;
o in consultation with the independent registered public accounting firm
and the internal auditor, reviewing the integrity of the Company's
financial reporting processes, both internal and external;
o approving the scope of the audit in advance;
o reviewing the financial statements and the audit report with
management and the independent registered public accounting firm;
o considering whether the provision by the external auditors of services
not related to the annual audit and quarterly reviews is consistent
with maintaining the auditor's independence;
o reviewing earnings and financial releases and quarterly reports filed
with the SEC;
o consulting with the internal audit staff and reviewing management's
administration of the system of internal accounting controls;
o approving all engagements for audit and non-audit services by the
independent registered public accounting firm; and
o reviewing the adequacy of the audit committee charter.
The Audit Committee met 12 times during 2005. The Company's Board of
Directors has adopted a written charter for the Audit Committee. The Audit
Committee reports to the Board of Directors on its activities and findings. The
Board of Directors believes that Mr. Hogan qualifies as an "audit committee
financial expert" as that term is used in the rules and regulations of the SEC.
Audit Committee Report
In accordance with SEC regulations, the Audit Committee has prepared the
following report. As part of its ongoing activities, the Audit Committee has:
o Reviewed and discussed with management the Company's audited
consolidated financial statements for the year ended December 31,
2005;
o Discussed with the independent registered public accounting firm the
matters required to be discussed by Statement on Auditing Standards
No. 61, Communications with Audit Committees, as amended; and
o Received the written disclosures and the letter from the independent
registered public accounting firm required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees,
and has discussed with the independent registered public accounting
firm their independence.
9
Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2005 to be filed with the SEC. In addition, the Audit
Committee approved the appointment of Beard Miller Company LLP as independent
registered public accounting firm for the Company for the fiscal year ending
December 31, 2006, subject to the ratification of the appointment by the
shareholders of the Company.
This report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The Audit Committee:
Mark D. Hogan, (Chairman)
Judith Q. Bielan
Joseph Brogan
Dr. August Pellegrini, Jr.
The Audit Committee has approved a list of procedures for the engagement of
outside auditors to perform non-audit tasks. The following services cannot be
---------
provided by the auditor: financial information systems design and
implementation; internal audit outsourcing; appraisal or valuation services,
fairness opinions, and contribution in kind reports; management functions or
human resources; bookkeeping; broker or dealer or investment banking services;
legal services unrelated to the audit; actuarial services; and services
determined by the Audit Committee to be impermissible. All permissible non-audit
services must be pre-approved by the Audit Committee. The authority to approve
audit and non-audit services may be delegated by the committee to one or more of
its members, provided that any delegated approvals must be reported to the full
Audit Committee and all approvals of non-audit services will be disclosed in the
Company's periodic reports.
Director Compensation
During the year ended December 31, 2005, the Company paid no board fees but
the Bank's Board of Directors received fees totaling $140,650. Directors
received fees of between $19,700 and $3,750 based on their tenure. Directors
Collins, Coughlin and Mindiak, as members of executive management, do not
receive directors' fees.
Deferred Compensation Plan for Directors. The Board of Directors of the
Bank adopted the 2005 Director Deferred Compensation Plan (the "2005 Deferred
Plan"), which became effective on October 1, 2005. The 2005 Deferred Plan is
designed to comply with the requirements of Internal Revenue Code Section 409A.
Pursuant to the 2005 Deferred Plan, directors of the Bank may elect to defer, on
a pre-tax basis, receipt of all or any portion of the fees and retainers
received for their service on the Board of Directors and on committees of the
Board of Directors, but only to the extent such amounts are attributable to
services not yet performed. The Bank credits the deferred amounts to a
bookkeeping account. Interest is paid on such deferred amounts at a rate equal
to the rate payable on the Bank's highest paying time deposit, as determined as
of the first day of each month, or as adjusted from time to time. The Bank may
establish a rabbi trust to which the Bank may deposit such deferrals and
interest, but such deposits shall remain subject to the claims of the Bank's
creditors.
Directors may make a deferral election during the first 30 days of becoming
eligible for the 2005 Deferred Plan with respect to amounts earned that year,
specifying the amount deferred and the time and form of payment. Deferral
amounts continue in effect until the director files a notice of adjustment with
the Bank. In addition, if the amount of director fees and/or retainers is
increased, the director may increase the amount of his deferral by filing a
notice of adjustment with the Bank. Such adjustments take effect as of January 1
following the date the notice is given to the Bank. Such deferral election is
irrevocable with respect to the calendar year for which it is filed, provided,
however, that a director may delay distributions or modify a previous deferral
election if: (i) the new deferral election is not effective for 12 months, (ii)
the original distribution date is at least 12 months from the date of the change
in the election, and (iii) the new distribution date must be at least five years
after the original distribution date.
10
Deferred fees will be paid out on the date designated by the director in
his or her deferral election form or upon the director's death, disability or
separation from service as a director of the Bank, if such date is earlier than
his or her designated distribution date. However, payments upon termination of
employment to directors who are "key employees" under the Internal Revenue Code
will not be made until the first day of the seventh month following such
termination of employment. Distributions may also be made earlier than the
designated distribution date if the distribution is necessary to satisfy a
financial hardship, as defined in Internal Revenue Code Section 409A. At the
election of the director, the distribution may be paid out in a lump sum or in
equal installments over a period not to exceed ten years.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company's common stock is registered pursuant to Section 12(g) of the
Exchange Act. Executive officers, directors and 10% beneficial owners are
required to file beneficial ownership reports with the SEC disclosing beneficial
ownership and changes in beneficial ownership of Company common stock. SEC rules
require disclosure in the Company's Proxy Statement and Annual Report on Form
10-K of the failure of an executive officer, director or 10% beneficial owner to
file such forms on a timely basis. Based on the Company's review of such
ownership reports, the Company believes that no officer or director of the
Company failed to timely file such ownership reports for the fiscal year ended
December 31, 2005.
Executive Compensation
Summary Compensation Table. The following table provides information about
the compensation paid for the years ended December 31, 2005, December 31, 2004,
and December 31, 2003 to our Chief Executive Officer, and other officers' whose
total annual salary and bonus for the year ended December 31, 2005 totaled
$100,000 or more (the "Named Officers" or each a "Named Officer").
Long-Term
Annual Compensation Compensation
---------------------------------------------- -----------------------
Awards
-----------------------
Year Other Annual Restricted Options/ All Other
Name and Ended Salary Compensation Stock SARS Compensation
Principal Position 12/31 ($)(1) Bonus ($) ($)(2) Awards ($) (#) ($)
---------------------------- ------ ---------- ---------- ------------- ------------ -------- -------------
Donald Mindiak 2005 $ 136,500 $ 50,000 $ -- $ -- -- $ --
President, Chief Executive 2004 131,250 65,625 -- -- 11,406 --
Officer and Director 2003 125,000 62,500 -- -- 14,579 --
James E. Collins 2005 $ 105,000 $ 44,000 $ 12,000 $ -- -- $ --
Senior Lending Officer 2004 94,500 47,250 -- -- 11,406 --
2003 90,000 45,000 -- -- 15,701 --
Thomas M. Coughlin 2005 $ 110,000 $ 39,000 $ -- $ -- 21,514 $ --
Chief Financial Officer and 2004 94,500 47,250 -- -- 11,406 --
Chief Operating Officer 2003 90,000 45,000 -- -- 15,163 --
Olivia Klim 2005 $ 105,000 $ 44,000 $ -- $ -- --- $ --
Executive Vice President - 2004 94,500 47,250 -- -- 3,906 --
Business Development 2003 90,000 45,000 -- -- -- --
Amer Saleem 2005 $ 90,000 $ 45,000 $ 12,000 $ -- 300 $ --
Vice President - 2004 85,000 42,500 -- -- 3,906 --
Commercial Lending 2003 77,500 38,750 -- -- 513 --
----------------------
(1) Includes amounts deferred at the election of the executive under the
Company's 401(k) plan.
(2) Does not include perquisites and personal benefits, the aggregate amount of
which does not exceed the lesser of $50,000 or 10% of the total salary and
bonus reported.
Change in Control Agreements. The Company and the Bank have entered into
change in control agreements with each of the Named Officers. These agreements
provide certain benefits in the event of a change in control of the Company or
the Bank. Each of the agreements provides for a term of 36 months. Commencing on
each anniversary date, the change in control agreement automatically renews for
an additional year unless advance written notice of non-renewal is provided to
the Named Officer. The change in control agreements enable the Company and the
Bank to offer to the Named Officers certain financial protection in the event of
a change in control
11
(as defined in the agreements). This type of protection is frequently offered by
other financial institutions, and the Company and the Bank may be at a
competitive disadvantage in attracting and retaining key employees if they do
not offer similar protection.
Following a change in control of the Company or the Bank, the Named
Officers are entitled to payment under their agreements even if the Named
Officer's employment does not terminate as a result of the change in control. In
the event that a Named Officer who is a party to a change in control agreement
is entitled to receive payments pursuant to the agreement, he or she will
receive a cash lump sum payment up to a maximum of 2.999 times the Named
Officer's average annual compensation for services performed for the Company and
the Bank that was includible in gross income for the most recent five taxable
years ending before the date of the change in control. Such payment is subject
to applicable withholding taxes. The lump sum payments under the change in
control agreements are limited so that they will not constitute an excess
parachute payment under Section 280G of the Internal Revenue Code.
In addition to the lump sum payment, the Named Officers are entitled to
receive health coverage for themselves and their dependents, at a level that is
comparable to the health benefits provided immediately before the change in
control, at no cost to the Named Officers for a period of 36 months from the
date of the change in control. The value of the health benefits could cause an
excess parachute payment under Section 280G of the Internal Revenue Code. To the
extent the Named Officers experience an excess parachute payment, the Company
and the Bank shall pay each Named Officer, pursuant to a written agreement, an
amount equal to the Named Officer's tax liability that results from the excess
parachute payment. The Board believes that these agreements are in the best
interests of the Company and the Bank because they will provide the intended
benefits to the Named Officers without any reduction for tax penalties related
to the payments. This arrangement provides a further incentive for the Named
Officers to achieve successful results in the management and operation of the
Company and the Bank.
Compensation Committee Interlocks and Insider Participation. During the
fiscal year ended December 31, 2005, the Compensation Committee, which consisted
of Robert Ballance, Joseph Brogan, Mark D. Hogan, Joseph Lyga and Alexander
Pasiechnik, met three times to review the performance of the executive officers
and determine compensation programs and adjustments. Messrs. Mindiak and
Coughlin do not participate in the Board of Directors determination of their
respective compensation as executive officers.
Report of the Compensation Committee on Executive Compensation. The
Compensation Committee evaluates the performance of the Chief Executive Officer
and other executive officers, and reviews and approves increases to base
compensation as well as the level of bonus, if any, to be awarded. The
Compensation Committee also approves any perquisites payable to such officers.
In addition, the Compensation Committee determines the budget for salaries for
other executive officers, and reviews the report of the Chief Executive Officer
regarding the allocation of compensation of such other officers. In determining
whether the base salary of the Chief Executive Officer and other executive
officers should be increased, the budget for other executive officers and
whether to approve the Chief Executive Officer's allocation of such amounts, the
Compensation Committee takes into account individual performance and information
regarding compensation paid to executives performing similar duties for
financial institutions in the Company's market area. The Compensation Committee
uses a peer comparison employing at least two published compensation surveys in
determining the salary and benefits of the Chief Executive Officer.
While the Compensation Committee does not use strict numerical formulas to
determine changes in compensation for the Chief Executive Officer and other
executive officers, it weighs a variety of different factors in its
deliberations. Factors considered by the Committee in 2005 included operating
performance, general management oversight of the Company, the quality of
communication with the Board of Directors, and the productivity of employees.
Finally, the Compensation Committee considered the standing of the Company with
customers and the community, as evidenced by the level of customer/community
complaints and compliments. While each of the quantitative and nonquantitative
factors described above was considered by the Compensation Committee, such
factors were not assigned a specific weight in evaluating the performance of
each of the Company's executive officers. Rather, all factors were considered,
and based upon the effectiveness of such officers in addressing each of the
factors, as well as the lack of inflation generally, and the range of
compensation paid to officers of peer institutions.
12
This report has been provided by the Compensation Committee: Robert
Ballance, Joseph Brogan, Mark D. Hogan, Joseph Lyga and Alexander Pasiechnik.
Related Party Transactions
The Bank leases its 860 Broadway branch office from a limited liability
company owned by certain directors and former directors of the Company. Based
upon a market rental value appraisal obtained prior to entering into the lease
agreement, the Company believes that the terms and conditions of the lease are
comparable to terms that would have been available from a third party that was
unaffiliated with the Bank. During 2005 total lease payments of $111,240 were
made to the limited liability company. Payments under the lease currently total
$9,270 per month.
Mr. Tagliareni, a nominee for election to the board of directors, is
President and Chief Executive Officer of J&J Printing. The Company paid J. J.
Printing $74,250 during 2005 for printing services.
Other than as described in the preceding two paragraphs, no directors,
executive officers or immediate family members of such individuals have engaged
in transactions with the Company involving more than $60,000 (other than through
a loan) during the preceding year. In addition, no directors, executive officers
or immediate family members of such individuals were involved in loans from the
Company involving more than $60,000 which were not made in the ordinary course
of business and on substantially the same terms and conditions, including
interest rate and collateral, as those of comparable transactions prevailing at
the time with other persons, and do not include more than the normal risk of
collectability or present other unfavorable features.
Section 402 of the Sarbanes-Oxley Act of 2002 generally prohibits an issuer
from: (1) extending or maintaining credit; (2) arranging for the extension of
credit; or (3) renewing an extension of credit in the form of a personal loan
for an officer or director. There are several exceptions to this general
prohibition, one of which is applicable to the Company. Sarbanes-Oxley does not
apply to loans made by a depository institution that is insured by the Federal
Deposit Insurance Corporation and is subject to the insider lending restrictions
of the Federal Reserve Act. All loans to the Company's directors and officers
are made in conformity with the Federal Reserve Act regulations.
Benefit Plans
2003 Stock Option Plan. The Company's 2003 Stock Option Plan provided for
the grant of options to purchase 358,910 shares of common stock, adjusted for
stock dividends. Pursuant to the 2003 Stock Option Plan, no options were granted
to non-employee directors in 2005 and 17,680 options at an exercise price $15.65
were granted to an executive officer/director under the reload provision of the
2003 Stock Option Plan. The term of the options is ten years from the date of
grant, and the number of shares subject to awards will be adjusted in the event
of any merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares or other change in the corporate
structure of the Company. The stock options granted vested 20% upon grant and at
the annual rate of 20% per year thereafter. To the extent described below, the
awards include an equal number of reload options ("Reload Options"), limited
stock appreciation rights ("Limited Rights") and dividend equivalent rights
("Dividend Equivalent Rights"). A Limited Right gives the option holder the
right, upon a change in control of the Company, to receive the excess of the
market value of the shares represented by the Limited Rights on the date
exercised over the exercise price. The Limited Rights are subject to the same
terms and conditions as the stock options. Payment upon exercise of Limited
Rights will be in cash, or in the event of a merger transaction, for shares of
the acquiring corporation or its parent, as applicable. Limited Rights have been
granted to employees only. The Dividend Equivalent Rights entitle the option
holder to receive an amount of cash at the time that certain extraordinary
dividends are declared equal to the amount of the extraordinary dividend
multiplied by the number of options that the person holds. For these purposes,
an extraordinary dividend is defined as any dividend where the rate of dividend
exceeds the Company's weighted average cost of funds on interest-bearing
liabilities for the current and preceding three quarters. The Reload Options
entitle the option holder, who has delivered shares that he or she owns as
payment of the exercise price for option stock, to a new option to acquire
additional shares equal in amount to the shares he or she has delivered. Reload
Options may also be granted to replace option shares retained by the employer
for payment of the option holder's withholding tax. The option price at which
additional shares of stock can be purchased by the option holder through the
exercise of a Reload Option is equal to the market value of the
13
previously owned stock at the time it was surrendered. The option period during
which the Reload Option may be exercised expires at the same time as that of the
original option that the holder has exercised.
2002 Stock Option Plan. The Company's 2002 Stock Option Plan provided for
the grant of options to purchase 241,980 shares of common stock, adjusted for
stock dividends. Pursuant to the 2002 Stock Option Plan, no options were granted
to non-employee director in 2005 and 3,834 options at an exercise price of
$15.65 were granted to an executive officer/director under the reload provision
of the 2002 Stock Option Plan and 300 options at an exercise price of $15.60
were granted to an executive officer under the 2002 Stock Option Plan. The term
of the options is ten years from the date of grant, and the number of shares
subject to awards will be adjusted in the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares or other change in the corporate structure of the Company.
The stock options granted vest at the rate of 20% per year. To the extent
described below, the awards include an equal number of reload options ("Reload
Options"), limited stock appreciation rights ("Limited Rights") and dividend
equivalent rights ("Dividend Equivalent Rights"). A Limited Right gives the
option holder the right, upon a change in control of the Company, to receive the
excess of the market value of the shares represented by the Limited Rights on
the date exercised over the exercise price. The Limited Rights are subject to
the same terms and conditions as the stock options. Payment upon exercise of
Limited Rights will be in cash, or in the event of a merger transaction, for
shares of the acquiring corporation or its parent, as applicable. Limited Rights
have been granted to employees only. The Dividend Equivalent Rights entitle the
option holder to receive an amount of cash at the time that certain
extraordinary dividends are declared equal to the amount of the extraordinary
dividend multiplied by the number of options that the person holds. For these
purposes, an extraordinary dividend is defined as any dividend where the rate of
dividend exceeds the Company's weighted average cost of funds on
interest-bearing liabilities for the current and preceding three quarters. The
Reload Options entitle the option holder, who has delivered shares that he or
she owns as payment of the exercise price for option stock, to a new option to
acquire additional shares equal in amount to the shares he or she has delivered.
Reload Options may also be granted to replace option shares retained by the
employer for payment of the option holder's withholding tax. The option price at
which additional shares of stock can be purchased by the option holder through
the exercise of a Reload Option is equal to the market value of the previously
owned stock at the time it was surrendered. The option period during which the
Reload Option may be exercised expires at the same time as that of the original
option that the holder has exercised.
In December 2005, in response to changes in the accounting of limited
rights and other cash settlement features set forth in the 2003 Stock Option
Plan and the 2002 Stock Option Plan, both stock option plans were amended to
eliminate the ability to award limited rights, to eliminate outstanding limited
rights with the consent of the award recipient, to eliminate the right to
receive a cash settlement of an option following a transaction in which
stockholders of the Company are to receive securities that are not registered
under the Securities Act of 1933, and to provide that no provision of the plan
shall operate to require the cash settlement of a stock option in circumstances
that are not in the discretion of the Company.
Set forth in the table that follows is information relating to options
granted under the 2003 Stock Option Plan and 2002 Stock Option Plan to the Named
Officers during the year ended December 31, 2005.
======================================================================================================================
OPTION GRANTS IN LAST FISCAL YEAR
======================================================================================================================
Individual Grants
----------------------------------------------------------------------------------------------------------------------
Percent of Total
Name Options Granted Options Granted Exercise or
to Employees in Base Price Expiration Grant Date Present Value
(1) 2005 ($)(1) Date ($)(2)
----------------------------------------------------------------------------------------------------------------------
Donald Mindiak -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------
James E. Collins -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------
Thomas M. Coughlin(3) 21,514 75.3 15.65 12/30/2015 213,526
----------------------------------------------------------------------------------------------------------------------
Olivia Klim -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------
Amer Saleem 300 1.0 15.60 12/21/2015 2,969
======================================================================================================================
-----------------------------
(1) The exercise price of the options is equal to the fair market value of the
underlying shares on the date of the award.
(2) Derived using the Black-Scholes option pricing model with the following
assumptions: volatility ranging from 73.77% to 73.85%; risk free rate of
return ranging from 4.35% to 4.42%; dividend yield of 0.00%; and a five
year option life.
(3) Represents the grant of reload options with an exercise price of $15.65.
14
Set forth below is certain information concerning options outstanding to
the Named Officers at December 31, 2005, and the options exercised by the Named
Officers during 2005.
==================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised In-The-
Options at year-End Money Options at Year-End (1)
Shares Acquired --------------------------------------------------------
Upon Exercise Value Realized ($) Exercisable/Unexercisable(#) Exercisable/Unexercisable($)
------------------------------------------------------------------------------------------------------------------
Donald Mindiak -- -- 37,003/0 252,981/0
------------------------------------------------------------------------------------------------------------------
James E. Collins -- -- 38,451/0 260,054/0
------------------------------------------------------------------------------------------------------------------
Thomas M. Coughlin 37,914 256,666 21,514/0 0/0
------------------------------------------------------------------------------------------------------------------
Olivia Klim -- -- 15,250/0 132,406/0
------------------------------------------------------------------------------------------------------------------
Amer Saleem -- -- 5,854/0 29,462/0
==================================================================================================================
-------------------------------
(1) Equals the difference between the aggregate exercise price of such options
and the aggregate fair market value of the shares of Common Stock that
would be received upon exercise, assuming such exercise occurred on
December 31, 2005, at which date the last trade price of the common stock
as stated on Nasdaq National Market was $15.65 per share.
Compensation Plans
Set forth below is information as of December 31, 2005 regarding equity
compensation plans that have been approved by shareholders. The Company has no
equity based benefit plans that were not approved by shareholders.
====================================================================================================================
Number of securities to be Number of securities remaining
issued upon exercise of Weighted average available for issuance under
Plan outstanding options and rights exercise price(2) plan
--------------------------------------------------------------------------------------------------------------------
Equity compensation plans approved
by shareholders................. 428,454(1) $9.72 -0-
--------------------------------------------------------------------------------------------------------------------
Equity compensation plans not
approved by shareholders........ -- -- -0-
--------------------------------------------------------------------------------------------------------------------
Total..................... 428,454 $9.72 -0-
====================================================================================================================
-------------------
(1) Consists of options to purchase (i) 144,162 shares of common stock under
the 2002 Stock Option Plan and (ii) 284,292 shares of common stock under
the 2003 Stock Option Plan.
(2) The weighted average exercise price reflects the exercise price of $11.00
per share for options granted under the 2003 Stock Option Plan and $7.41
per share for options under the 2002 Stock Option Plan.
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MARKET INFORMATION
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On December 14, 2005, the Company's common stock began trading on Nasdaq
National Market. Previously, the Company's common stock was traded on the Over
the Counter Electronic Bulletin Board. We currently have three market makers in
accordance with Nasdaq rules. However, no market maker has an obligation to
continue to make a market for the Company's common stock and could discontinue
making a market at any time. As of March 6, 2006, the Company had approximately
1,580 shareholders of record.
15
Stock Performance Graph
Set forth hereunder is a stock performance graph comparing (a) the
cumulative total return on the Common Stock for the period beginning with the
closing sales price on May 1, 2003 through December 31, 2005, (b) the cumulative
total return on all publicly traded commercial bank stocks over such period, and
(c) the cumulative total return of Nasdaq Market Index over such period.
Cumulative return assumes the reinvestment of dividends, and is expressed in
dollars based on an assumed investment of $100.
[GRAPH OMITTED]
Period Ending
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Index 05/01/03 06/30/03 12/31/03 06/30/04 12/31/04 06/30/05 12/30/05
------------------------------------------------------------------------------------------------------------------
BCB Bancorp, Inc. 100.00 93.65 153.65 125.02 167.18 168.93 170.24
NASDAQ Composite 100.00 110.28 136.50 139.82 148.99 141.37 152.53
SNL Bank Index 100.00 107.92 126.27 127.92 141.50 136.19 143.43
16
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DIVIDEND POLICY
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The Company currently has no intention of paying cash dividends in the
foreseeable future, and may not be permitted to do so by state and Federal
regulations and regulatory policy. Payment of cash dividends is conditioned on
earnings, financial condition, cash needs, the discretion of the Board of
Directors and compliance with state corporate law requirements. Under New Jersey
law, the Company is not permitted to declare dividends on its common stock if,
after payment of the dividend, the Company would be unable to pay its debts as
they become due in the usual course of business, or if its total assets would be
less than its total liabilities.
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PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
The Company's independent registered public accounting firm for the year
ended December 31, 2005 was Beard Miller Company LLP ("Beard Miller"). The Audit
Committee of the Board of Directors has approved the engagement of Beard Miller
to be the Company's independent registered public accounting firm for the year
ending December 31, 2006, subject to the ratification of the engagement by the
Company's shareholders at this Annual Meeting. For the year ended December 31,
2004, Radics & Co., LLC ("Radics") was the Company's independent registered
public accounting firm. On February 24, 2005, Radics entered into an agreement
to combine with Beard Miller effective April 1, 2005. The Audit Committee of the
Board of Directors approved Beard Miller as our independent registered public
accounting firm upon completion of the combination described above.
Representatives of Beard Miller are expected to attend the Annual Meeting, will
have an opportunity to make a statement if they so desire, and will be available
to respond to appropriate questions.
Shareholder ratification of the selection of the independent registered
public accounting firm is not required by the Company's bylaws or otherwise.
However, the Board of Directors is submitting the selection of the independent
registered public accounting firm to the shareholders for ratification as a
matter of good corporate practice. If the shareholders fail to ratify the
independent registered public accounting firm selected by the Audit Committee,
the Audit Committee will reconsider whether or not to retain that firm. Even if
the selection is ratified, the Audit Committee in its discretion may direct the
appointment of a different independent accounting firm at any time during the
year if it determines that such change is in the best interests of the Company
and its shareholders.
Fees Paid to Beard Miller and Radics
Set forth below is certain information concerning aggregate fees billed for
professional services rendered by Beard Miller and Radics during 2005 and 2004:
Audit Fees. The aggregate fees billed to the Company by Beard Miller and
Radics for professional services rendered for the audit of the Company's annual
financial statements, review of the financial statements included in the
Company's Quarterly Reports on Form 10-Q and services that are normally provided
in connection with statutory and regulatory filings and engagements was $109,563
and $53,271 during the fiscal years ended December 31, 2005 and 2004,
respectively. The 2005 amount includes $50,228 for services related to the
preparation of the Company's Registration Statement on Form S-1 filed with the
Securities and Exchange Commission during the fourth quarter of 2005.
Audit Related Fees. There were no fees billed to the Company by Beard
Miller and Radics for assurance and related services that are reasonably related
to the performance of the audit of and review of the financial statements and
that are not already reported in "--Audit Fees," above for the years ended
December 31, 2005 and December 31, 2004.
Tax Fees. The aggregate fees billed to the Company by Beard Miller and
Radics for professional services rendered for tax compliance, tax advice and tax
planning was $5,000 and $4,000 during the fiscal years ended December 31, 2005
and 2004, respectively. These services include the calculation of and
preparation of all pertinent
17
federal and state tax forms relative to the Company and its subsidiaries, and
the maintenance of all applicable schedules and work papers relative to the
same.
All Other Fees. There were no fees billed to the Company by Beard Miller or
Radics that are not described above during the fiscal years ended December 31,
2005 and 2004, respectively.
The Audit Committee has considered whether the provision of non-audit
services, which relate primarily to costs incurred with the management
consulting services rendered, is compatible with maintaining Beard Miller's
independence. The Audit Committee concluded that performing such services does
not affect Beard Miller's independence in performing its function as auditor of
the Company.
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of the
Independent Registered public accounting firm
The Audit Committee's policy is to pre-approve all audit and non-audit
services provided by the independent registered public accounting firm. These
services may include audit services, audit-related services, tax services and
other services. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to particular service or category of services and is
generally subject to a specific budget. The Audit Committee has delegated
pre-approval authority to its Chairman when expedition of services is necessary.
The independent registered public accounting firm and management are required to
periodically report to the full Audit Committee regarding the extent of services
provided by the independent registered public accounting firm in accordance with
this pre-approval, and the fees for the services performed to date. All of the
fees paid in the audit-related, tax and all other categories were approved per
the pre-approval policies.
Required Vote and Recommendation of the Board of Directors
In order to ratify the selection of Beard Miller as independent registered
public accounting firm for the 2006 year, the proposal must receive the
affirmative vote of at least a majority of the votes cast at the Annual Meeting,
either in person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF BEARD MILLER
COMPANY LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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SHAREHOLDER PROPOSALS
--------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's executive office,
104-110 Avenue C, Bayonne, New Jersey 07002, no later than November 12, 2006.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
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OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Annual Meeting other than the matters described above in the Proxy Statement.
However, if any other matter should properly come before the Annual Meeting, the
Proxy Committee of the Board of Directors will have authority to vote its
proxies in its discretion with respect to any matter as to which the Board of
Directors is not notified at least five business days before the date of the
Proxy Statement.
18
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MISCELLANEOUS/FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Company common stock. Directors, officers and
regular employees of the Company may solicit proxies personally or by telegraph
or telephone without additional compensation.
A FORM 10-K CONTAINING FINANCIAL STATEMENTS AT AND FOR THE YEAR ENDED
DECEMBER 31, 2005 IS BEING FURNISHED TO SHAREHOLDERS. THIS DOCUMENT CONSTITUTES
THE COMPANY'S ANNUAL DISCLOSURE STATEMENT. COPIES OF ALL OF THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION ARE AVAILABLE AT THE
COMMISSION'S WEB SITE (www.sec.gov), AND ARE AVAILABLE WITHOUT CHARGE BY WRITING
TO BCB BANCORP, INC. AT 104-110 AVENUE C, BAYONNE, NEW JERSEY 07002, ATTENTION:
CORPORATE SECRETARY.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mark D. Hogan
Mark D. Hogan
Chairman of the Board
Bayonne, New Jersey
March 13, 2006
19
PROXY CARD
REVOCABLE PROXY
BCB BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
April 27, 2006
The undersigned hereby appoints the Board of Directors with full powers of
substitution to act as attorneys and proxies for the undersigned to vote all
shares of common stock of BCB Bancorp, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders ("Annual
Meeting") to be held at The Chandelier Restaurant, 1081 Broadway, New Jersey
07002 on April 27, 2006, at 10:00 a.m. Eastern time. The Board of Directors are
authorized to cast all votes to which the undersigned is entitled as follows:
VOTE
1. The election as directors of all nominees listed below FOR WITHHELD
--- --------
(except as marked to the contrary below). |_| |_|
Thomas M. Coughlin
Joseph Lyga
Alexander Pasiechnik
Joseph Tagliareni
INSTRUCTION: To withhold your vote for one or more
nominees, write the name of the nominee(s) on the
lines below.
-----------------------------------------
-----------------------------------------
2. The ratification of the appointment of Beard Miller FOR AGAINST ABSTAIN
--- ------- -------
Company LLP as independent registered public |_| |_| |_|
accounting firm for the Company for the year ending
December 31, 2006.
The Board of Directors recommends a vote "FOR" the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED ON THIS PROXY. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH ANNUAL MEETING, A MAJORITY OF THE BOARD OF
DIRECTORS WILL HAVE THE AUTHORITY TO VOTE IN THEIR DISCRETION WITH RESPECT TO
ANY MATTER AS TO WHICH THE BOARD OF DIRECTORS IS NOT NOTIFIED AT LEAST FIVE
BUSINESS DAYS BEFORE THE DATE OF THIS PROXY STATEMENT.
The Annual Meeting may be postponed or adjourned for the purpose of
soliciting additional proxies.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Annual Meeting of the shareholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. This proxy may also be revoked by sending written
notice to the Secretary of the Company at the address set forth on the Notice of
Annual Meeting of Shareholders, or by the filing of a later proxy prior to a
vote being taken on a particular proposal at the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to the execution of
this proxy of a notice of the Annual Meeting and a Proxy Statement dated March
13, 2006 and the Annual Report on Form 10-K with audited financial statements.
Check Box if You Plan
Dated: to Attend Annual Meeting
-------------------------
------------------------------- ---------------------------------
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
------------------------------- ---------------------------------
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title.
Please complete and date this proxy card and return it promptly
in the enclosed postage-prepaid envelope.