UNITED
STATES
SECURITIES
AND EXCHANGE
COMMISSION
Washington,
D.C.
20549
SCHEDULE
14A
INFORMATION
Proxy
Statement Pursuant to Section
14(a) of the Securities
Exchange
Act of 1934 (Amendment
No._)
Filed
by the Registrant
[X] Filed by a Party other than the Registrant
[ ]
Check
the appropriate
box:
[ ] Preliminary
Proxy Statement
[ ] Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive
Proxy Statement
[ ] Definitive
Additional Materials
[ ] Soliciting
Material Pursuant to §240.14a-12
AMERICAN BANCORP OF NEW JERSEY,
INC.
(Name
of Registrant as Specified In Its
Charter)
______________________________________________________
(Name
of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment
of Filing Fee (Check the
appropriate box):
[X] No
fee
required.
[ ] Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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1)
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Title
of each class of securities
to which transaction applies:
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2)
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Aggregate
number of securities to
which transaction applies:
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3)
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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)
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Proposed
maximum aggregate value
of transaction:
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5)
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Total
fee
paid:
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[ ]
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Fee
paid previously with
preliminary materials.
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[ ]
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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.
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1)
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Amount
previously
paid:
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2)
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Form,
Schedule or Registration
Statement No.:
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3)
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Filing
Party:
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4)
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Date
Filed:
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_____________________________________________________________________________________________________________________________________________________________________________________________________________
365
Broad
Street, Bloomfield, NJ 07003-2798 (973)
748-3600 Fax: (973) 748-2541
January
23, 2008
Dear
Fellow Shareholder:
On
behalf
of the Board of Directors and management of American Bancorp of New Jersey,
Inc., we cordially invite you to attend the 2008 Annual Meeting of
Shareholders. The meeting will be held at 8:30 a.m. local time, on
February 26, 2008, at The Wilshire Grand Hotel, 350 Pleasant Valley Way, West
Orange, New Jersey.
The
matters expected to be acted upon at the meeting are described in the attached
proxy statement. In addition, we will report on our progress during
the past year and entertain your questions and comments.
We
encourage you to attend the meeting in person. Whether or not you
plan to attend please read the enclosed proxy statement and then complete,
sign
and date the enclosed proxy and return it in the accompanying postage paid
return envelope provided as promptly as possible. Alternatively, you
may vote via the internet or by telephone if the enclosed proxy card so
indicates. Your prompt response will save us additional expense in
soliciting proxies and will ensure that your shares are represented at the
annual meeting.
Your
Board of Directors and management are committed to the continued success of
American Bancorp of New Jersey, Inc. and the enhancement of your
investment. As President, I want to express my appreciation for your
confidence and support.
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Sincerely,
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/s/
Fred G. Kowal
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Fred
G. Kowal
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President
and Chief Operating Officer
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AMERICAN
BANCORP OF NEW JERSEY, INC.
365
BROAD STREET
BLOOMFIELD,
NEW JERSEY 07003
(973)
748-3600
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To
be held on February 26, 2008
Notice
is
hereby given that the annual meeting of shareholders of American Bancorp of
New
Jersey, Inc. will be held at The Wilshire Grand Hotel, 350 Pleasant Valley
Way,
West Orange, New Jersey, on Tuesday, February 26, 2008, at 8:30 a.m.
local time.
A
proxy
card and a proxy statement for the annual meeting are enclosed.
The
annual meeting is for the purpose of considering and voting on the following
proposals:
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Proposal
1.
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Election
of two directors of American Bancorp of New Jersey, Inc. for four-year
terms; and
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Proposal
2.
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Ratification
of the appointment of Crowe Chizek and Company LLC, as American Bancorp
of
New Jersey Inc.'s independent auditors for the fiscal year
ending September 30, 2008.
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Shareholders
also will transact such other business as may properly come before the annual
meeting, or any adjournment or postponement thereof. As of the date
of this notice, we are not aware of any other business to come before the annual
meeting.
The
Board
of Directors has fixed the close of business on January 7, 2008, as the record
date for the annual meeting. This means that shareholders of record
at the close of business on that date are entitled to receive notice of and
to
vote at the meeting and any adjournment thereof. To ensure that your
shares are represented at the meeting, please take the time to vote by signing,
dating and mailing the enclosed proxy card which is solicited on behalf of
the
Board of Directors. If internet or telephone voting is available to
you, voting instructions are printed on the proxy card sent to
you. The proxy will not be used if you attend and vote at the annual
meeting in person. Regardless of the number of shares you own, your
vote is very important. Please act today.
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BY
ORDER OF THE BOARD OF DIRECTORS
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/s/
Richard M. Bzdek
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Richard
M. Bzdek
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Secretary
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Bloomfield,
New Jersey
January
23, 2008
Important: The
prompt return of proxies will save us the expense of further requests for
proxies to ensure a quorum at the annual meeting. A pre-addressed
envelope is enclosed for your convenience. No postage is required if
mailed within the United States.
AMERICAN
BANCORP OF NEW JERSEY, INC.
365
BROAD STREET
BLOOMFIELD,
NEW JERSEY 07003
(973)
748-3600
____________________
PROXY
STATEMENT
____________________
ANNUAL
MEETING OF SHAREHOLDERS
To
be held on February 26, 2008
____________________
American
Bancorp of New Jersey, Inc.'s Board of Directors is using this proxy statement
to solicit proxies from the holders of American Bancorp of New Jersey, Inc.
common stock for use at our annual meeting of shareholders. We are
first mailing this proxy statement and the enclosed form of proxy to our
shareholders on or about January 23, 2008. Certain of the information
provided herein relates to American Bank of New Jersey, a wholly owned
subsidiary of American Bancorp of New Jersey, Inc. American Bank of
New Jersey also may be referred to from time to time as the
"Bank." References to "American Bancorp of New Jersey, Inc.,"
"Company," "we," "us" and "our" refer to American Bancorp of New Jersey, Inc.
and, as the context requires, American Bank of New Jersey.
INFORMATION
ABOUT THE ANNUAL MEETING
Time
and Place of the Annual Meeting.
Our
annual meeting will be held as follows:
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Date:
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Tuesday,
February 26, 2008
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Time:
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8:30
a.m., local time
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Place:
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The
Wilshire Grand Hotel
350
Pleasant Valley Way
West
Orange, New Jersey 07052
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Matters
to be Considered at the Annual Meeting.
At
the
meeting, shareholders of American Bancorp of New Jersey, Inc. are being asked
to
consider and vote upon the following proposals:
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Proposal
1.
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Election
of two directors of American Bancorp of New Jersey, Inc. for four-year
terms; and
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Proposal
2.
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Ratification
of the appointment of Crowe Chizek and Company LLC, as American Bancorp
of
New Jersey, Inc.'s independent auditors for the fiscal year ending
September 30, 2008.
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The
shareholders will also transact any other business that may properly come before
the annual meeting. As of the date of this proxy statement, we are
not aware of any other business to be presented for consideration at the annual
meeting other than the matters described in this proxy statement.
Who
is Entitled to Vote?
We
have
fixed the close of business on January 7, 2008, as the record date for
shareholders entitled to notice of and to vote at the American Bancorp of New
Jersey, Inc. annual meeting. Only holders of record of American
Bancorp of New Jersey, Inc. common stock on that record date are entitled to
notice of and to vote at the annual meeting. You are entitled to one
vote for each share of American Bancorp of New Jersey, Inc. common stock you
own. On January 7, 2008, 11,509,716 shares of American Bancorp of New
Jersey, Inc. common stock were outstanding and entitled to vote at the annual
meeting.
What
if My Shares are Held in "Street Name" by a Broker?
If
you
are the beneficial owner of shares held in "street name" by a broker, your
broker, as the record holder of the shares, is required to vote the shares
in
accordance with your instructions. If you do not give instructions to
your broker, your broker may nevertheless vote the shares with respect to
"discretionary" items, but will not be permitted to vote your shares with
respect to "non-discretionary" items, pursuant to current industry
practice. In the case of non-discretionary items, the shares not
voted will be treated as "broker non-votes." The proposals to elect
directors and ratify auditors described in this proxy statement are considered
"discretionary" items.
How
Will My Shares of Common Stock Held in the Employee Stock Ownership Plan be
Voted?
We
maintain an employee stock ownership plan ("ESOP") that owns approximately
9.82%
of American Bancorp of New Jersey, Inc. common stock. Employees of
American Bancorp of New Jersey, Inc. and its subsidiaries, including American
Bank of New Jersey, participate in the ESOP. Each ESOP participant
instructs the trustee of the plan how to vote the shares of American Bancorp
of
New Jersey, Inc. common stock allocated to his or her account under the
ESOP. If an ESOP participant properly executes the voting instruction
card distributed by the ESOP trustee, the ESOP trustee will vote the
participant's shares in accordance with the participant's
instructions. Shares of American Bancorp of New Jersey, Inc. common
stock held in the ESOP but not allocated to any participant's account, and
allocated shares for which no voting instructions are received from
participants, will be voted by the trustee as directed by the administrator
of
the ESOP.
How
Many Shares Must Be Present to Hold the Meeting?
A
quorum
must be present at the meeting for any business to be conducted. The
presence at the meeting, in person or by proxy, of at least a majority of the
shares of American Bancorp of New Jersey, Inc. common stock entitled to vote
at
the annual meeting as of the record date will constitute a
quorum. Proxies received but marked as abstentions or broker
non-votes will be included in the calculation of the number of shares considered
to be present at the meeting.
What
If a Quorum Is Not Present at the Meeting?
If
a
quorum is not present at the scheduled time of the meeting, a majority of the
shareholders present or represented by proxy may adjourn the meeting until
a
quorum is present. The time and place of the adjourned meeting will
be announced at the time the adjournment is taken, and no other notice will
be
given unless the adjourned meeting is set to be held after March 28,
2008. An adjournment will have no effect on the business that may be
conducted at the meeting.
Vote
Required to Approve Proposal 1: Election of Directors.
Directors
are elected by a plurality of the votes cast, in person or by proxy, at the
annual meeting by holders of American Bancorp of New Jersey, Inc. common
stock. Pursuant to our Certificate of Incorporation, shareholders are
not permitted to cumulate their votes for the election of
directors. Votes may be cast for or withheld from each
nominee. Votes that are withheld and broker non-votes for a
particular nominee will have the same effect as a vote against the
nominee. Our Board of Directors unanimously recommends that you vote
"FOR" the election of each of its director nominees.
Vote
Required to Approve Proposal 2: Ratification of the Appointment of Our
Independent Auditors.
Ratification
of the appointment of Crowe Chizek and Company LLC, as our independent auditors
for the fiscal year ending September 30, 2008, requires the affirmative vote
of
the majority of shares cast, in person or by proxy, at the annual meeting by
holders of American Bancorp of New Jersey, Inc. common stock. Abstentions and
broker non-votes on the proposal to ratify the appointment of Crowe Chizek
and
Company LLC as our independent auditors, will have the same effect as a vote
against the proposal. Our Board of Directors unanimously recommends
that you vote "FOR" the proposal to ratify Crowe Chizek and Company LLC as
our
independent auditors for the fiscal year ending September 30, 2008.
How
Do I Vote at the Annual Meeting?
Proxies
are solicited to provide all shareholders of record on the voting record date
an
opportunity to vote on matters scheduled for the annual meeting and described
in
these materials. Shares of American Bancorp of New Jersey, Inc.
common stock can only be voted if the shareholder is present in person at the
annual meeting or by proxy. To ensure your representation at the
annual meeting, we recommend you vote by proxy even if you plan to attend the
annual meeting. You can always change your vote at the
meeting.
Voting
instructions are included on your proxy card. Shares of American
Bancorp of New Jersey, Inc. common stock represented by properly executed
proxies will be voted by the individuals named on the proxy card in accordance
with the shareholder's instructions. Where properly executed proxies
are returned to American Bancorp of New Jersey, Inc. with no specific
instruction as how to vote at the annual meeting, the persons named in the
proxy
will vote the shares "FOR" the election of each of management's director
nominees and "FOR" ratification of the appointment of Crowe Chizek and Company
LLC, as our independent auditors, for the fiscal year ending September 30,
2008. Should any other matters be properly presented at the annual
meeting for action, the persons named in the enclosed proxy and acting
thereunder will have the discretion to vote on these matters in accordance
with
their best judgment. No other matters are currently expected by the
Board of Directors to be properly presented at the Annual Meeting.
You
may
receive more than one proxy card depending on how your shares are
held. For example, you may hold some of your shares individually,
some jointly with your spouse and some in trust for your children -- in which
case you will receive three separate proxy cards to vote.
May
I Revoke My Proxy?
You
may
revoke your proxy before it is voted by:
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submitting
a new proxy with a later date;
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notifying
the Corporate Secretary of American Bancorp of New Jersey, Inc. in
writing before the annual meeting that you have revoked your
proxy; or
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voting
in person at the annual meeting.
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If
you
plan to attend the annual meeting and wish to vote in person, we will give
you a
ballot at the annual meeting. However, if your shares are held in the
name of your broker, bank or other nominee, you must bring a validly executed
proxy from the nominee indicating that you have the right to vote your
shares.
Proxy
Solicitation Costs.
We
will
pay the cost of soliciting proxies. In addition to this mailing, our
directors, officers and employees may also solicit proxies personally,
electronically or by telephone. We will also reimburse brokers and
other nominees for their expenses in sending these materials to you and
obtaining your voting instructions.
BENEFICIAL
OWNERSHIP OF COMPANY COMMON STOCK
Beneficial
Ownership of 5% or More
Shareholders and Management
.
The
following table sets forth, as of the January 7, 2008 voting record date,
information regarding share ownership of:
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those
persons or entities (or groups of affiliated persons or entities)
known by
management to beneficially own more than five percent of American
Bancorp
of New Jersey, Inc. common stock other than directors and
executive officers;
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§
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each
director and director nominee of American Bancorp of New Jersey,
Inc.;
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each
executive officer of American Bancorp of New Jersey, Inc. named in
the
Summary Compensation Table appearing under "Executive
Compensation" below; and
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all
current directors and executive officers of American Bancorp of New
Jersey, Inc. as a group.
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The
address of each of the beneficial owners, except where otherwise indicated,
is
the same address as American Bancorp of New Jersey, Inc. Beneficial
ownership is determined in accordance with the rules of the Securities Exchange
Commission. In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of common stock
subject to outstanding options that are currently exercisable or exercisable
within 60 days after January 7, 2008, are included in the number of shares
beneficially owned by the person and are deemed outstanding for the purpose
of
calculating the person's percentage ownership. These shares, however,
are not deemed outstanding for the purpose of computing the percentage ownership
of any other person.
Number
of Shares
Percent
of
Beneficially
Common
Stock
Beneficial
Owners
Owned(1)
O
utstanding
Beneficial
Owners of More Than 5% Other Than
Directors
and Named Executive Officers
American
Bank of New Jersey Bank Employee Stock
Ownership
Plan Trust (the "ESOP")
(2)
1,129,900
9.82%
Investors
of America, Limited Partnership
135
North Meramec
Clayton,
Missouri 63105
(3)
725,200
6.30%
Lawrence
B. Seidman
Seidman
and Associates, LLC
Seidman
Investment Partnership, LP
Seidman
Investment Partnership II, LP
Broad
Park Investors, LLC
Berggruen
Holdings North America Ltd.
LSBK06-08,
LLC
100
Misty Lane
Parsippany,
New Jersey 07054
(4)
823,528
7.16%
Directors
and Named Executive Officers
Robert
A.
Gaccione
111,324
0.96%
Joseph
Kliminski
(7)
430,406
3.70%
Fred
G.
Kowal
164,414
1.42%
H.
Joseph
North
66,661
0.58%
W.
George Parker
(9)
265,554
2.30%
Vincent
S.
Rospond
207,140
1.79%
James
W. Ward,
III
263,028
2.28%
Eric
B.
Heyer
162,294
1.40%
Catherine
M.
Bringuier
147,740
1.28%
All
directors and executive officers
as a group (9 persons)
(5)(6)
1,818,561
15.23%
_________________
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(1)
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Except
as otherwise noted in these footnotes, the nature of beneficial ownership
for shares reported in this table is sole voting and investment
power.
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(2)
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These
shares are held in a suspense account and are allocated among participants
annually on the basis of compensation as the ESOP debt is
repaid. As of January 7, 2008, 131,509 shares had been
allocated to ESOP participants with an additional 53,247 shares to
be
allocated effective of December 31, 2007 upon completion of the allocation
for 2007 by the plan administrator.
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(3)
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As
reported by Investors of America, Limited Partnership on a Schedule
13G
dated April 5, 2007. Investors of America, Limited Partnership
reported sole voting and dispositive power over all shares.
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(4)
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As
reported by Lawrence B. Seidman, Seidman and Associates, LLC, Seidman
Investment Partnership, LP, Seidman Investment Partnership II, LP,
Broad
Park Investors, LLC, Berggruen Holdings North America Ltd. and LSBK06-08,
LLC on a Schedule 13D dated July 20, 2007. Lawrence B. Seidman
reported sole voting and dispositive power over 823,528
shares. Seidman and Associates, LLC reported sole voting and
dispositive power over 208,113 shares. Seidman Investment
Partnership, LP reported sole voting and dispositive power over 201,109
shares. Seidman Investment Partnership II, LP reported sole
voting and dispositive power over 158,699 shares. Broad Park
Investors, LLC reported sole voting and dispositive power over 127,858
shares. Bergguen Holdings North America Ltd. reported sole
voting and dispositive power over 45,000 shares. LSBK06-08, LLC
reported sole voting and dispositive power over 75,000
shares.
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(5)
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Includes
shares of common stock held directly as well as by spouses or minor
children, in trust and through other forms of indirect
ownership.
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(6)
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Includes
an aggregate of 434,057 shares underlying options exercisable or
becoming
exercisable within 60 days after January 7, 2008. As of January
7, 2008, each non-employee director had 30,137 options exercisable
or
becoming exercisable within 60 days after January 7, 2008. As
of January 7, 2008, Officers Kliminski, Kowal, Heyer and Bringuier
had
130,734, 35,613, 59,235 and 57,790 options, respectively, exercisable
or
becoming exercisable within 60 days of January 7, 2008.
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(7)
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The
number of shares reported for Mr. Kliminski include 51,020 shares
pledged
as collateral for a margin loan.
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(8)
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Of
the shares beneficially owned by Mr. Parker, 104,999 are held in
an
account pursuant to which they, along with other securities held
in the
account, may serve as collateral for a margin loan.
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Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires American Bancorp of New
Jersey, Inc.'s directors and executive officers, and persons who own more than
10% of American Bancorp of New Jersey, Inc.'s common stock to report their
initial ownership of American Bancorp of New Jersey, Inc.'s common stock and
any
subsequent changes in that ownership to the SEC. Specific due dates
for these reports have been established by the SEC and American Bancorp of
New
Jersey, Inc. is required to disclose in this proxy statement any late filings
or
failures to file.
American
Bancorp of New Jersey, Inc. believes, based solely on a review of the copies
of
reports furnished to us and written representations relative to the filing
of
certain forms, that all Section 16(a) filing requirements applicable to our
executive officers, directors and greater than 10% beneficial owners were
complied with during the fiscal year ended September 30, 2007.
PROPOSAL
1
ELECTION
OF DIRECTORS
The
Company’s Board of Directors currently consists of seven members, following the
retirement of Stanley Obal in August 2007. Mr. Obal had served as a
director of the Bank since 1981. We appreciate his guidance and many
years of dedicated service. Approximately one-fourth of the directors
are elected annually to serve for a four-year period or until their respective
successors are elected and qualified.
The
table
below sets forth information regarding each director of American Bancorp of
New
Jersey, Inc. and each nominee for director, including his age, position on
the
board and term of office. The Board of Directors, acting on the
recommendation of the Nominating Committee, has recommended and approved the
nominations of Fred G. Kowal and Vincent S. Rospond to serve as directors,
each
for a period of four years to expire at the annual meeting of shareholders
to be
held in 2012. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the authority to vote for
a
nominee is withheld) will be voted at the annual meeting “FOR” the election of
both nominees as directors. Each nominee currently serves as a
director of American Bancorp of New Jersey, Inc. Each nominee has
consented to being named in this proxy statement and has agreed to serve if
elected. If a nominee is unable to stand for election, the Board of
Directors may either reduce the number of directors to be elected or select
a
substitute nominee. If a substitute nominee is selected, the proxy
holders will vote your shares for the substitute nominee, unless you have
withheld authority. At this time, we are not aware of any reason why
a nominee might be unable to serve
if
elected. Except as disclosed in this proxy statement, there are no
arrangements or understandings between any nominee and any other person pursuant
to which the nominee was selected.
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Name
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Age
(1)
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Position(s)
held with
American
Bancorp of New Jersey, Inc.
|
Director
Since
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Term
to
Expire
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Director
Nominees
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Fred
G. Kowal
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55
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President,
Chief Operating Officer and Director
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2005
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2012
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Vincent
S. Rospond
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75
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Director
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1981
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2012
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Directors
Continuing
in Office
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Joseph
Kliminski
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64
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Chief
Executive Officer and Director
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1986
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2009
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H.
Joseph North
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75
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Director
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1991
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2010
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W.
George Parker
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82
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Director
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1967
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2010
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Robert
A. Gaccione
|
66
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Director
|
2003
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2011
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James
H. Ward, III
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58
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Vice
Chairman of the Board
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1991
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2011
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________________
(1) At
January 7, 2008.
Set
forth below is a description of the business background and experience of each
of the nominees for director and each director continuing in office of American
Bancorp of New Jersey, Inc. All nominees and directors have held
their present positions for at least five years unless otherwise
indicated.
Fred
G.
Kowal serves as President and Chief Operating Officer of the Company and the
Bank and has been a member of the Board since 2005. He joined the
Bank in March 2005. Mr. Kowal was previously Chairman and Chief
Executive Officer of Warwick Community Bancorp, Inc. until its merger into
Provident Bancorp, Inc. in October 2004. He joined Warwick Community
Bancorp, Inc. in 1999 and also served as Chairman of the Board of Directors
of
The Warwick Savings Bank and as Chairman of the Board, President and Chief
Executive Officer of The Towne Center Bank, a de novo commercial bank formed
by
Warwick Community Bancorp, Inc. in 1999. Prior to joining Warwick, he
served as Senior Vice President of First Union National Bank, where he worked
for 16 years, and as Senior Vice President of PNC Bank.
Vincent
S. Rospond has been a member of the Board since 1981. He is an
attorney and the majority stockholder of the law firm of Rospond, Rospond &
Conte, P.A. in Bloomfield, New Jersey. Rospond, Rospond & Conte serves as
general counsel to the Bank. Mr. Rospond is the president and a
trustee of United Way of Bloomfield, is a member and the former legal counsel
of
Bloomfield Chamber of Commerce, and was a member and the treasurer of North
Jersey Manufacturer's & Businessmen Association. He is also a
member of the Cornell Club of New Jersey, the Essex County Bar Association,
the
Newark Art Museum, the Bloomfield Music Federation and the New Jersey Bar
Association.
Joseph
Kliminski serves as Chief Executive Officer of the Company and the Bank and
has
been a member of the Board since 1986. He has been employed by the
Bank since 1967 and became President and Chief Executive Officer in
1987. In 2005, Mr. Fred Kowal replaced Mr. Kliminski as President.
Mr. Kliminski is a member and past president of the Bloomfield Lions Club,
was
previously president of the Advisory Board to the Bloomfield Town Council,
chairman emeritus of the Bloomfield Education Foundation, and former chairman
of
the Deborah Hospital Children of the World Golf Tournament. Mr. Kliminski also
serves on the Executive Committee of the Bloomfield Center Alliance, and is
a
member and former president of the Board of Trustees of the Bloomfield Public
Library. He is also a former member of the Board of Governors of the
New Jersey League of Community Bankers and past president of the Essex County
Savings League.
H.
Joseph
North has been a member of the Board since 1991. Mr. North retired in 1987
as
Town Administrator of Bloomfield, New Jersey after 20 years of service as the
municipality's Chief Administrative Officer. Mr. North began his
service to the Town of Bloomfield in 1958 as Town Clerk where his duties
included that of Corporation Secretary to the Municipality and Executive
Secretary to the Planning Board and Zoning Board of Adjustment. Mr.
North is a past president and a lifetime member of the New Jersey Municipal
Management Association and is a former member of the International City
Management Association. Mr. North is also a former president of the
Bloomfield Lions Club, Bloomfield Fifth Quarter Club and Bloomfield Tennis
Federation and a former member of the Board of Trustees of Bloomfield
College.
W.
George
Parker has been a member of the Board since 1967 and Chairman since
1990. Prior to becoming Chairman of American Bank of New Jersey, Mr.
Parker served as Chairman of the Board and CEO of the Cook & Dunn Paint
Corporation for 20 years, retiring in 1995. During his tenure at Cook
& Dunn Paint Corporation, he served as Northeast Regional Vice President of
the National Paint Coatings Assn. located in Washington, D.C. He also
served as Chairman and CEO of Ur-Cryl Polymer Corp. and Thibaut & Walker,
suppliers to the chemical industry, for 12 and 20 years, respectively, retiring
in 2005. Mr. Parker was the principal of Adco Chemical Company,
serving as Chairman and CEO and divested the Corporation in 2005. He
is a Senior Managing Director of a private equity fund.
Robert
A.
Gaccione has been a member of the Board since 2003. He has been a
senior partner of the law firm of Gaccione, Pomaco & Malanga, P.C. in
Belleville, New Jersey for thirty years. He is a former Federal
Bureau of Investigation agent. Mr. Gaccione also serves as an Essex
County Tax Board Commissioner. He served as a director of Franklin
Community Bank, a commercial bank located in Nutley, New Jersey for three
years. Mr. Gaccione is a member and the past president of the
Belleville Rotary Club, is the president of the Clara Maass Foundation and
is a
member of the Belleville Foundation.
James
H.
Ward, III has been a member of the Board since 1991 and Vice Chairman since
2003. From 1998 to 2000, he was the majority stockholder and Chief
Operating Officer of Rylyn Group, which operated a restaurant in Indianapolis,
Indiana. Prior to that, he was the majority stockholder and Chief
Operating Officer of Ward and Company, an insurance agency in Springfield,
New
Jersey, where he was employed from 1968 to 1998. He is now a retired
investor.
Set
forth below is a description of
the business background and experience of each executive officer who is not
also
a director.
Eric
B.
Heyer, age 45, has been the Bank’s Senior Vice President, Treasurer and Chief
Financial Officer since 1997 and became Chief Financial Officer of the Company
upon its formation in June 2003. Mr. Heyer has been employed by the
Bank since 1993. He was previously the Chief Financial Officer of
Monarch Savings Bank in Kearny, New Jersey, where he was employed from 1986
to
1993. Mr. Heyer is a member of the Financial Managers
Society. He currently serves as the Chairman of the Stewardship &
Finance Committee of Princeton United Methodist Church and previously served
as
a trustee of Kingston United Methodist Church. Mr. Heyer also serves
as a board member of the Mental Health Clinic of Passaic in Clifton, New
Jersey.
Catherine
M. Bringuier, age 45, has been the Bank's Senior Vice President and Chief
Lending Officer since January 2003. She has also served as the CRA Officer
since
February 1993. Ms. Bringuier has been employed by the Bank since March 1990.
Ms.
Bringuier currently serves as a member of the Loan Servicing Committee, the
Residential Lending & Affordable Housing Committee and the Mortgage Steering
Committee of the New Jersey League of Community Bankers. Ms. Bringuier is a
member of the Commercial Loan Committee and the Residential Lending Committee
of
the Mortgage Bankers Association of New Jersey. She is a member and prior Vice
President of Sunny Acres Civic & Improvement Association in Cranford, New
Jersey and is a catechist for St. Michael’s Religious Education Program in
Cranford, New Jersey.
BOARD
OF DIRECTORS MEETINGS, BOARD COMMITTEES
AND
CORPORATE GOVERNANCE MATTERS
Meetings
The
Board
of Directors of American Bancorp of New Jersey, Inc. generally meets on a
quarterly basis, holding additional special meetings as
needed. During fiscal 2007 the Board of Directors of American Bancorp
of New Jersey, Inc. held six meetings. Meetings of the Board of
Directors of American Bank of New Jersey are generally held on a semi-monthly
basis. No incumbent director of American Bancorp of New Jersey, Inc.
attended fewer than 75% of the Board meetings and meetings of the committees
on
which they served during the period they were directors.
Director
Independence
Directors
Gaccione, North, Parker, Rospond and Ward qualify as "independent" in accordance
with the published listing requirements of the NASDAQ Stock Market. The NASDAQ
independence definition includes a series of objective tests, such as that
the
director is not an employee of the company and has not engaged in various types
of business dealings with the company. As further required by the
NASDAQ rules, the Board has made a subjective determination as to each
independent director that no relationships exist which, in the opinion of the
Board, would interfere with the exercise of his or her independent judgment
in
carrying out the responsibilities of a director. In making these
determinations, the Board reviewed and discussed information provided by the
directors and the Company with regard to each director's business and personal
activities as they may relate to the Company and its management. In
this regard, the Board considered the Bank’s relationships with the law firms of
which Directors Gaccione and Rospond are principals, as described under “Certain
Relationships and Related Transactions.”
Committees
and Charters
The
Board
of Directors of American Bancorp of New Jersey, Inc. has standing Audit,
Compensation and Nominating Committees.
Audit
Committee
. The Audit Committee is comprised of Directors
Parker, North and Ward, each of whom meets the independence standards for audit
committee members under the NASDAQ rules. Each member of the Audit
Committee is qualified under the NASDAQ rules to serve as a member of the Audit
Committee; however, none qualifies as an audit committee financial expert within
the meaning of the regulations of the SEC. The Board has determined
that, based on the business backgrounds and collective experience of the current
members of the Audit Committee, it is not necessary for the committee to have
a
member who meets the audit committee financial expert definition.
The Audit Committee
is
scheduled to meet at least quarterly and on an as-needed basis. In
fiscal 2007, this committee met five times.
The
Audit
Committee operates under a formal written charter adopted by the Board, a copy
of which was attached to the Company’s proxy statement filed with the Securities
and Exchange Commission on April 20, 2006. The Audit Committee
assists our Board in its oversight responsibility relating to the integrity
of
our financial statements and the financial reporting process, the systems of
internal accounting and financial controls and compliance with legal and
regulatory requirements. The Audit Committee, among other
things:
|
§
|
oversees
the entire audit function for the Company, both internal and
independent;
|
|
§
|
hires,
terminates and/or reappoints our independent
auditors;
|
|
§
|
ensures
the existence of effective accounting and internal control
systems;
|
|
§
|
approves
non-audit and audit services to be performed by the independent
auditors;
|
|
§
|
reviews
and approves all related party transactions for potential conflict
of
interest situations; and
|
|
§
|
reviews
and assesses the adequacy of the Audit Committee charter on an annual
basis.
|
The
report of the Audit Committee is set forth below under "Audit Committee
Report."
Compensation
Committee.
The Compensation Committee currently consists of
Directors Gaccione, North, Parker, Rospond and Ward, each of whom is an
independent director under the NASDAQ rules. Mr. Obal also served on
the Compensation Committee until his retirement effective August 21,
2007. The Compensation Committee met five times during fiscal year
2007. The Compensation Committee is responsible for:
|
§
|
determining
compensation to be paid to our executive officers, including annual
base
salary levels, annual incentive opportunity levels and the goals
and
objectives to be used in determining incentive pay, equity incentive
awards and retirement benefits;
|
|
§
|
make
recommendations with regard to the compensation of
directors;
|
|
§
|
overseeing
the administration of our employee benefit plans covering employees
generally; and
|
|
§
|
reviewing
our compensation policies and
plans.
|
The
Compensation Committee operates under a formal written charter, a copy of which
is attached to this proxy statement as Appendix A.
The
charter of the Compensation Committee does not specifically provide for
delegation of any of the authorities or responsibilities of the
committee. As discussed under “Compensation Discussion and Analysis,”
in setting certain components of the compensation of executive officers other
than the Chief Executive Officer and the President and Chief Operating Officer,
the Compensation Committee considers the recommendations of the Chief Executive
Officer and President and Chief Operating Officer.
Nominating
Committee.
The Nominating Committee is currently comprised of
Directors Gaccione and Ward, each of whom is an independent director under
the
NASDAQ rules. Mr. Obal also served on the Nominating Committee until
his retirement effective August 21, 2007. This Committee met one time
during fiscal 2007. The Nominating Committee is responsible for identifying
and
recommending director candidates to serve on the Board of
Directors. Final approval of director nominees is determined by the
full Board, based on the recommendations of the Nominating
Committee. The nominees for election at the annual meeting were
recommended to the Board by the Nominating Committee.
The
Nominating Committee operates under a formal written charter adopted by the
Board, a copy of which was attached to the Company’s proxy statement
filed with the Securities and Exchange Commission on April 20, 2006, under
which
the Nominating Committee has the following responsibilities:
|
§
|
identify,
recruit and interview qualified individuals to be the Board’s nominees for
election or appointment to the Board; in so doing, the Nominating
Committee will seek nominees with excellent decision-making ability,
business experience, personal integrity and reputation, and who
are
|
|
|
knowledgeable
about the business activities and market areas in which the Company
and
its subsidiaries operate;
|
|
§
|
annually
present to the Board the names of the individuals recommended for
selection by the Board as the Board’s nominees;
and
|
|
§
|
perform
any other duties or responsibilities expressly delegated to the Committee
by the Board.
|
As
provided in the Nominating
Committee
’
s
charter, the Committee's process for
identifying and eval
uating
potential nominees may include soliciting recommendations from directors and
officers of the Company and the Bank. Additionally, the Committee may consider
persons recommended by shareholders of the Company and the Committee's
evaluation of such pe
r
sons
will not differ from the manner of
evaluation of persons recommended by directors or officers of the Company or
the
Bank.
To
be considered in the Committee's
selection of its nominees, recommendations from shareholders must be received
by
the Secretar
y of the
Company in writing at least 120 days prior to the date the proxy statement
for
the immediately preceding annual meeting was first distributed to shareholders
(by September 25, 2008, for the annual meeting of shareholders to be held in
2009). Reco
m
mendations
are to identify the
submitting shareholder, the person recommended for consideration, and the
reasons the submitting shareholder believes such person should be
considered.
No
nominations for directors may be made at an annual meeting of shareholders
except those made by the Board of Directors, based on the recommendations of
the
Nominating Committee, and those made by a shareholder who complies with the
procedures for submitting nominations set forth in Article II, Section 15 of
the
Company’s bylaws. Nominations from shareholders must be received by
the Company in writing by at least 60 days prior to the anniversary date of
the
previous year's annual meeting (i.e., by December 28, 2008, in the case of
nominations to be submitted for the annual meeting to be held in
2009). Nominations submitted by shareholders must be accompanied by
certain information specified in Article II, Section 15 of our
bylaws. This information includes the following:
|
(a)
|
as
to each person whom the shareholder proposes to nominate for election
or
re-election as a director and as to the shareholder 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 shareholder notice, and (iv) all information that
is required to be disclosed in the solicitation of proxies for
election as directors or is otherwise required pursuant to
Regulation 14A under the Securities Exchange Act of 1934,
including the proposed nominee's written consent to serve as a
director, if elected; and
|
|
(b)
|
as
to the shareholder giving the notice, (i) the name and address, as
they
appear on the Company’s books, of the shareholder and any other
shareholders known by the shareholder to be supporting the shareholder’s
nominees, and (ii) the class and number of shares of Company stock
which
are beneficially owned by the shareholder and, to the extent known,
by any
other shareholders known by the shareholder to be supporting the
shareholder’s nominees on the date of the shareholder’s
notice.
|
In
addition, nominations submitted by shareholders must be accompanied by a
certification, under oath before a notary public, by each nominee that he or
she
meets the eligibility requirements to be a director as set forth in Article
III
of the Company’s bylaws.
The
foregoing description is a summary of our nominating process. Any
shareholder wishing to
nominate
a candidate or recommend a nominee to our Nominating Committee for its
consideration should review and must comply in full with the procedures set
forth in our certificate of incorporation and bylaws, and New Jersey
law.
Shareholder
Communications with Directors
Shareholders
may communicate with the Board of Directors by writing to: James H. Ward, III,
Independent Director, 365 Broad Street, Bloomfield, New Jersey
07003.
Board
Member Attendance at Annual Shareholder Meetings
Although
we do not have a formal policy regarding director attendance at annual
shareholder meetings, directors are expected to attend these meetings absent
extenuating circumstances. Every current director of the Company
attended last year’s annual meeting of shareholders.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
following Report of the Audit Committee of the Board of Directors shall not
be
deemed to be soliciting material or to be incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent American Bancorp of New Jersey, Inc. specifically
incorporates this Report therein, and shall not otherwise be deemed filed under
such Acts.
The
Audit
Committee of American Bancorp of New Jersey, Inc. operates under a written
charter adopted by the full Board of Directors. In fulfilling its oversight
responsibility of reviewing the services performed by American Bancorp of New
Jersey, Inc.'s independent auditors, the Audit Committee carefully reviews
the
policies and procedures for the engagement of the independent
auditors. The Audit Committee also discussed with American Bancorp of
New Jersey, Inc.'s independent auditors the overall scope and plans for the
audit. The Audit Committee met with the independent auditors to
discuss the results of its audit, the evaluation of American Bancorp of New
Jersey, Inc.'s internal controls, and the overall quality of American Bancorp
of
New Jersey, Inc.'s financial reporting. The Audit Committee also
reviewed and discussed with the independent auditors the fees paid to the
independent auditors; these fees are described under the caption "Relationship
with Independent Auditors" below.
American
Bancorp of New Jersey, Inc.'s Chief Executive Officer and Chief Financial
Officer also reviewed with the Audit Committee the certifications that each
such
officer will file with the SEC pursuant to the requirements of Sections 302
and
906 of the Sarbanes-Oxley Act of 2002. Management also reviewed with
the Audit Committee the policies and procedures it has adopted to ensure the
accuracy of such certifications.
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§
|
The
Audit Committee has reviewed and discussed with the Company's management
the Company's fiscal 2007 audited financial
statements;
|
|
§
|
The
Audit Committee has discussed with the Company's independent auditors
(Crowe Chizek and Company LLC) the matters required to be
discussed by Statement on Auditing Standards No. 61 and
requirements of the Securities and Exchange
Commission;
|
|
§
|
The
Audit Committee has received the written disclosures and letter from
the
independent auditors required by Independence Standards Board No.
1 (which
relates to the auditors' independence from the Company and its related
entities) and has discussed with the auditors their independence
from the
Company; and
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|
§
|
Based
on
the review and discussions referred to in the three items above, the
Audit Committee recommended to the Board of Directors that the
fiscal 2007 audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30,
2007.
|
Submitted by the Audit Committee of the Company’s Board of
Directors:
W.
George Parker
H.
Joseph North
James
H. Ward, III
RELATIONSHIP
WITH INDEPENDENT AUDITORS
Effective
July 30, 2002, the Securities and Exchange Act of 1934 was amended by the
Sarbanes-Oxley Act of 2002 to require all auditing services and non-audit
services provided by an issuer's independent auditor to be approved by the
issuer's audit committee prior to such services being rendered or to be approved
pursuant to pre-approval policies and procedures established by the issuer's
audit committee. The Company's Audit Committee has not established
pre-approval procedures and instead specifically approves each service prior
to
the engagement of the auditor for all audit and non-audit services.
All
of
the services listed below for fiscal 2007 and 2006 were approved by the Audit
Committee prior to the service being rendered. There were no services that
were
not recognized to be non-audit services at the time of engagement that were
approved after the fact.
|
(a)
|
Audit
Fees
. The aggregate fees billed by Crowe Chizek for
professional services rendered for the audit of the Company's annual
consolidated financial statements and review of the quarterly consolidated
financial statements for the fiscal years ended September 30, 2007
and
2006 were $150,500 and $158,000,
respectively.
|
|
(b)
|
Audit
Related Fees
. The
aggregate fees billed by Crowe Chizek for assurance and related services
related to the Company's Annual Report on Form 10-K for the years
ended
September 30, 2007 and 2006 were $8,500 and $8,000, respectively.
For
those same periods respectively, audit related fees billed by Crowe
Chizek
also included $1,500 and $1,500 for Form S-8 consent
procedures.
|
|
(c)
|
Tax
Fees
. The aggregate fees billed by Crowe Chizek for
professional services rendered for tax preparation services for the
years
ended September 30, 2007 and 2006 were $12,000 and $13,000,
respectively. The tax preparation services for fiscal 2006
included $2,000 for the stub period October 1, 2005 through October
5,
2005 for the entities dissolved as a result of the Company’s second step
conversion and $11,000 for the remaining tax returns for fiscal 2006.
Additional tax-related services billed by Crowe Chizek for the years
ended
September 30, 2007 and 2006 were $2,700 and $2,650,
respectively. Such additional tax-related services consisted of
billings for the review of quarterly estimated tax payment calculations
and assistance in responding to tax authority inquiries and
notifications.
|
|
(d)
|
All
Other Fees
. The
aggregate fees billed by Crowe Chizek for professional services rendered
for services or products other than those listed under the captions
"Audit
Fees," "Audit-Related Fees," and "Tax Fees" totaled $0 for both years
ended September 30, 2007 and 2006.
|
DIRECTOR
COMPENSATION
Director
Fees
. Directors are
currently paid a fee of $500 per meeting for each regular and special meeting
attended. Directors also receive an annual retainer of $2,500. No fees are
paid
for committee meetings other than audit committee meetings, for which directors
receive a fee of $1,000 per meeting attended.
Each
director is also a director of the Bank and is paid $1,250 per meeting for
each
regular and special meeting of the Bank’s Board attended. Bank directors also
receive an annual retainer of $8,000.
Directors
who also serve as employees do not receive compensation as directors of the
Company or the Bank.
Directors
Consultation and
Retirement Plan
. The Directors Consultation and Retirement Plan provides
retirement benefits to directors on their retirement date. “Retirement date”
means the date of termination of service as a director following a participant’s
completion of not less than twelve years of service as a director, or not less
than six years of service following a change in control; provided however,
the
retirement date with regard to directors serving as of August 27, 1996 who
have
completed not less than five years of service as of August 27, 1996 shall be
the
date of termination of service as a director without regard to whether the
twelve years of service requirement has been fulfilled. Upon death or
disability, a director shall be deemed to have terminated service as of that
date.
If
a director agrees to become a consulting director to our board upon retirement,
he will receive a monthly payment for life but in no event for less than 144
months, equal to 0.0833 times the highest aggregate annual fees paid (including
retainer fees and regular board meeting fees) during the most recently completed
three calendar year periods ending on or before the retirement date. In the
event of a change in control, all directors will be presumed to have reached
the
retirement date and each director will receive a lump sum payment equal to
the
present value of future benefits payable.
The
following table sets forth certain information regarding the compensation earned
by or awarded to each director, other than Messrs. Kliminski and Kowal, who
served on the Board of Directors of the Company in fiscal 2007.
|
Name
|
Fees
Earned
Or
Paid in
Cash
($)
(1)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(3)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings($)
(4)
|
All
Other
Compensation
($)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
Robert
A. Gaccione
|
45,000
|
58,266
|
30,249
|
---
|
---
|
133,515
|
|
H.
Joseph North
|
49,500
|
58,266
|
30,249
|
44,192
|
---
|
182,207
|
|
Stanley
Obal
(5)
|
32,000
|
58,266
|
30,249
|
1,510
|
---
|
122,025
|
|
W.
George Parker
|
49,500
|
58,266
|
30,249
|
54,653
|
---
|
192,668
|
|
Vincent
S. Rospond
|
43,750
|
58,266
|
30,249
|
56,575
|
---
|
188,840
|
|
James
H. Ward III
|
49,500
|
58,266
|
30,249
|
43,140
|
---
|
181,155
|
|
_____________
|
|
|
|
|
|
|
|
(1)
|
Includes
annual retainers and meeting fees for service on the Boards of Directors
of both the Company and the Bank.
|
|
(2)
|
Amounts
in the table represent the compensation cost of restricted stock
recognized for fiscal 2007 for financial statement reporting purposes
pursuant to Statement of Financial Accounting Standards No. 123R,
“Share-Based Payment” (“FAS 123R”). The assumptions used in calculating
these amounts are set forth in Note 11 of the Notes to Consolidated
Financial Statements contained in the Company’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2007 filed with the Securities
and
Exchange Commission. The restricted stock grants for which
expense is shown in the table consist of a grant of 10,415 shares
to each
director on January 20, 2005, which had a grant date fair value calculated
in accordance with FAS 123R of $70,822, a grant of 2,083 shares to
each
director on May 6, 2005, which had a grant date fair value calculated
in
accordance with FAS 123R of $14,560, and a grant of 17,924 shares
to each
director on May 23, 2006, which had a grant date fair value calculated
in
accordance with FAS 123R of $205,947. As of September 30, 2007,
each director held 21,840 unvested shares of restricted
stock.
|
|
(3)
|
Amounts
in the table represent the compensation cost of stock options recognized
for fiscal 2007 for financial statement reporting purposes pursuant
to FAS
123R. The assumptions used in calculating these amounts are set forth
in
Note 11 of the Notes to Consolidated
Financial
|
|
|
Statements
contained in the Company’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2007 filed with the Securities and Exchange
Commission. The stock options for which expense is shown in the
table consist of a grant to each director of an option to purchase
34,716
shares to each director on January 20, 2005, which had a grant date
fair
value calculated in accordance with FAS 123R of $64,641, a grant
to each
director of an option to purchase 5,207 shares on May 6, 2005, which
had a
grant date fair value calculated in accordance with FAS 123R of $10,206,
and a grant to each director of an option to purchase 36,132 shares
on May
23, 2006, which had a grant date fair value calculated in accordance
with
FAS 123R of $76,397. As of September 30, 2007, each director
held options to purchase 76,055 shares of which 52,861 were unvested
and
nonexercisable.
|
|
(4)
|
Represents
the change in fiscal 2007 of the actuarial present value of the director’s
accumulated benefit under the Bank’s Directors Consultation and Retirement
Plan. No value is shown for Mr. Gaccione because the change in
value during fiscal 2007 was a negative number (-$5,806) due to a
modification in benefit calculation
assumptions.
|
|
(5)
|
Mr.
Obal retired as a director of the Company and the Bank effective
August
21, 2007.
|
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview.
This
Compensation Discussion and Analysis provides important information about our
executive compensation program (the “program”) as it relates to the “named
executive officers” of the Company. The discussion and analysis will
first present an overview of program governance followed by a review of the
goals and objectives of the program. Next, we will identify the
executive officers to whom the program applies followed by a review of the
specific components of our executives’ compensation and the manner in which each
generally supports our program’s objectives. We will then highlight
the specific program oversight and administration activities undertaken by
the
Company and how such activities affected executive compensation during fiscal
2007. Finally, this discussion and analysis will present an overview
of certain accounting and income tax considerations that are relevant to the
program.
Governance
of the
Program.
The Compensation Committee (the “committee”) of the
Company’s Board of Directors, which consists solely of the Company’s
outside directors, is responsible for the governance of our executive
compensation program. These responsibilities include establishing the
goals and objectives of the program and developing and implementing the program
based upon those goals and objectives. The committee’s
responsibilities also include all program oversight and administration
activities through which the various components of the program are regularly
reviewed and modified, where necessary, to ensure their continued alignment
with
the program’s goals and objectives.
Goals
and
Objectives of our Executive Compensation Program.
The program
is fundamentally based upon the goal of preserving the financial strength,
safety and soundness of the Company and the Bank while supporting long term
growth in shareholder value. Toward that end, the committee has
established the following objectives for the program:
|
§
|
To
attract and retain talented and experienced executives whose knowledge,
skills and performance are critical to our success in a highly competitive
community banking industry,
|
|
§
|
To
provide a reasonable, fair and competitive level of current compensation
to our executives in relation to their roles and
responsibilities,
|
|
§
|
To
provide a reasonable, fair and competitive level of retirement
compensation to our executives in relation to their roles and
responsibilities,
|
|
§
|
To
provide meaningful and significant financial incentives to executives
to
achieve our stated business plan goals and
objectives,
|
|
§
|
To
reward executives for corporate performance that exceeds our business
plan
goals and objectives,
|
|
§
|
To
reward executives for individual job performance that exceeds the
requirements and expectations of their roles and responsibilities,
and
|
|
§
|
To
align the financial interests of our executives with those of the
Company’s shareholders toward the shared goal of growth in shareholder
value.
|
The
goals and
objectives listed above are the guiding principles upon which the committee
has
developed and implemented the Company’s executive compensation
program. These same goals and objectives serve as the primary
criteria against which the committee regularly reviews and judges the
effectiveness of the structure of the program and the terms of its specific
components.
Identification
of
Named Executive Officers.
The named executive officers falling
within the purview of this discussion and analysis include our principal
executive officer, our principal financial officer and the two other
most highly compensated executive officers serving at fiscal year end based
upon
total compensation for the fiscal year ended September 30,
2007. These named executive officers are:
|
§
|
Joseph
Kliminski, Chief Executive Officer,
|
|
§
|
Fred
G. Kowal, President and Chief Operating
Officer,
|
|
§
|
Eric
B. Heyer, Senior Vice President and Chief Financial Officer,
and
|
|
§
|
Catherine
M. Bringuier, Senior Vice President and Chief Lending
Officer.
|
Components
of
Executive Compensation.
The committee has established a
compensation package for our executives that includes base salary, annual
performance-based incentive compensation, equity-based compensation, retirement
benefits, medical and insurance benefits and perquisites. Our
executive officers may also be protected under employment agreements with
severance and change in control provisions.
The
committee uses a variety of quantitative and qualitative factors in determining
if, and to what extent, the named executive officers participate in the specific
components of the executive compensation program. For any particular
executive, the committee establishes the level of compensation within each
applicable component to support a balanced achievement of the program’s goals
and objectives noted above.
The
remainder of this section will present an overview of the specific components
of
our executive compensation program. This overview will identify and
describe each component, its specific purpose in relation to the program’s goals
and objectives, the eligible executives whose compensation includes that
component and the general criteria used by the committee to determine the level
of an executive’s compensation within that component.
Base
Salary.
A base salary is that component of an executive’s
compensation that represents remuneration for their effective performance of
the
day-to-day activities and responsibilities that are required based upon the
executive’s specific role within the Company.
In
relation to the goals and objectives of the executive compensation program,
an
executive’s base salary generally serves two primary purposes:
|
§
|
To
attract and retain talented and experienced executives whose knowledge,
skills and performance are critical to our success in a highly competitive
community banking industry, and
|
|
§
|
To
provide a reasonable, fair and competitive level of base compensation
to
our executives in relation to their roles and
responsibilities.
|
Executive
base salaries are generally reviewed by the committee annually and modified,
where appropriate, to support the achievement of this component’s goals and
objectives as stated above. The committee utilizes outside resources,
in part, to ascertain the appropriate level of base salary for each of the
named
executive officers given their specified role within the
Company. Such outside sources may include role-based compensation
surveys published for the banking industry by one or more qualified, independent
resources. The committee is also cognizant of the salaries paid by
other financial services companies within our market area with which we compete
for executives. The committee also evaluates the effectiveness with
which the executive has performed their specific role in considering
any
modification
to an executive’s level of base salary. The committee is solely
responsible for evaluating the performance of the Chief Executive Officer and
the President and Chief Operating Officer. However, the committee
considers the feedback of the Chief Executive Officer and the President and
Chief Operating Officer in their evaluation of performance of the two remaining
named executive officers.
Performance-Based
Incentive
Compensation.
Performance-based incentive compensation
generally represents remuneration for an executive’s contribution toward the
achievement of specific goals and objectives outlined in the Company’s business
plan. Toward this end, the committee has established and maintains
the Management Incentive Plan (“MIP”) which is the primary source of short-term
incentive compensation payable to the eligible named executive
officers. MIP compensation is generally paid annually based upon
fiscal year performance.
In
relation to the goals and objectives of the executive compensation program,
the
MIP serves three primary purposes:
|
§
|
To
provide meaningful and significant financial incentives to executives
to
achieve our stated business plan goals and
objectives,
|
|
§
|
To
reward executives for corporate performance that exceeds our business
plan
goals and objectives, and
|
|
§
|
To
reward executives for individual job performance that exceeds the
requirements and expectations of their roles and
responsibilities.
|
A
named
executive officer’s participation in the MIP is determined annually by the
committee during the initial phase of the MIP administration cycle described
below. Eligibility to participate in the MIP is largely determined
based upon the executive’s corporate role and responsibilities and their
resulting influence on, and contribution to, our success as measured by the
MIP.
The
MIP
is generally administered by the committee on an annual cycle. The
administration process begins with the completion of the business plan and
budgeting process for the current fiscal year. Once that process is
complete, the committee establishes the “MIP basis” upon which each eligible
executive’s potential incentive compensation for that year is based,
representing the targeted incentive award amount for the
executive. Generally, the MIP basis is calculated as a percentage of
an executive’s base salary. The committee then establishes specific
performance targets for each executive based upon the corporate goals and
objectives outlined in our updated business plan and budget as well as targets
relating to individual job performance. Performance targets may
include both quantitative and qualitative factors which are established for
the
executive based upon their specific role and responsibilities within the
Company. Quantitative factors are based upon measurable, numerical
values while qualitative factors utilize numerical scalars to measure
performance for certain non-quantifiable targets. These factors are
then “weighted” by the committee in relation to one another to reflect the
strategic priorities of our business plan. Such “weightings”
determine the pro-rata allocation of the MIP basis by factor for each eligible
executive.
Committee
members and executives monitor corporate and individual performance throughout
the year in relation to the levels targeted for each applicable
factor. Upon completion of the fiscal year, the committee measures
actual performance for each executive’s factors against the targeted
levels. With regard to qualitative factors, the committee is solely
responsible for measuring the performance of the Chief Executive Officer and
the
President and Chief Operating Officer. However, the committee may
consider the feedback of the Chief Executive Officer and the President and
Chief
Operating Officer in measuring the performance of the other eligible named
executive officers in relation to applicable qualitative factors.
Subject
to certain performance caps and floors established by the committee, the degree
to which each
measured
factor meets, exceeds or falls below the targeted level determines the
percentage of the MIP basis earned by the executive for that
factor. The compensation earned by the executive through the MIP for
all applicable factors determines their total incentive compensation for the
fiscal year.
The
incentive compensation earned by each of the eligible executive officers for
fiscal 2007 is reported in the Summary Compensation Table below.
Equity-Based
Compensation.
As utilized within executive compensation
program, equity-based compensation represents non-cash remuneration earned
by
executives in the form of restricted shares of the Company’s stock and stock
options on Company shares. The Company has implemented two sets of
restricted stock (“RSP”) and stock option “(SOP”) plans. The first
set of plans was approved by shareholders in January 2005 through which up
to
208,295 restricted shares and 694,315 stock options were approved for award
to
employees and directors. The number of restricted shares and options
for this first set of plans reflects an adjustment for the exchange of minority
offering shares during the Company’s second step conversion. The
second set of plans received shareholder approval in May 2006 through which
up
to a total of 358,484 restricted shares and 722,633 options were approved for
award to employees and directors.
Of
the
566,779 restricted shares made available through the Company’s equity-based
compensation plans, a total of 327,909 or 57.9% were awarded to the named
executive officers. Similarly, of the 1,416,948 stock options made
available through the Company’s plans, a total of 788,528 or 55.6% were awarded
to the named executive officers. The remaining number of available
restricted shares and stock options were awarded to outside directors and other
officers. Each award of restricted stock or stock options was granted
subject to a five year vesting period with 20% of such shares or options vesting
annually commencing on the first anniversary date of each award. The
exercise price of all stock options awarded was based upon the closing share
value of the Company’s stock on the date of grant.
In
relation to the goals and objectives of the executive compensation program,
the
Company’s equity-based compensation plans serve two primary
purposes:
|
§
|
To
align the financial interests of our executives with those of its
shareholders toward the shared goal of growth in shareholder value,
and
|
|
§
|
To
attract and retain talented and experienced executives whose knowledge,
skills and performance are critical to our success in a highly competitive
community banking industry.
|
The
committee has awarded restricted shares and stock options from the two sets
of
plans noted above to each of the named executive officers. The number
of restricted shares and stock options awarded to each executive was determined
by the committee, in part, based upon the executive’s corporate role and
responsibilities and their individual contribution to the Company’s strategic
achievements during their employment to date. The number of RSP and
SOP awards granted to executives also reflects the comparative level of
employment retention incentive established by the committee for each
executive.
Retirement
Benefits.
The Company maintains two forms of
retirement benefits in which substantially all employees, including the named
executive officers, are eligible to participate. These benefits
include the Company’s Employee Stock Ownership Plan (“ESOP”) and the Bank’s
401(k) profit sharing plan (“401(k) plan”). Additionally, our
executive compensation program includes a supplemental executive retirement
plan, in which each of the named executive officers
participates. The terms of the supplemental executive retirement plan
are established within Executive Salary Continuation Agreements (“SERP
agreements”) between the Bank and each of the named executive
officers. In all cases, the compensation received by employees
through these plans is income tax deferred and the benefits relating to these
plans are subject to vesting.
ESOP.
The
ESOP was initially established as part of the Company’s minority stock offering
in October 2003 and then substantially augmented through its second step
conversion in October 2005. Through these transactions, the ESOP
borrowed from the Company the funds necessary to purchase a total of 1,133,571
shares of the Company’s stock. Shares issued to the ESOP are
allocated to eligible participants as of the end of each calendar year based
on
principal and interest repayments made by the ESOP on the loan from the
Company. The loan is secured by the Company shares purchased with the
loan proceeds and is being repaid by the ESOP with funds from the Bank's
discretionary contributions to the ESOP and earnings on the ESOP's
assets. Principal and interest payments are scheduled to occur over a
twenty-year period.
401(k)
Plan.
The 401(k) plan is designed to provide tax deferred
retirement savings and income to eligible employees. Prior to the
augmentation of the ESOP through the Company’s second step conversion, the Bank
had made annual, discretionary “profit sharing” contributions to this
plan. However, such contributions to the plan were discontinued after
the ESOP was augmented. As such, Bank contributions in recent years
have been limited to the 401(k) component of the plan. Through this
component, the Bank provides a “defined contribution” into each participant’s
401(k) account that matches up to 50% of the first six percent of the wages
and
salaries that are contributed by the employee into the
plan. Investments held by the 401(k) include a variety of mutual
funds and other managed accounts including one fund comprised entirely of the
Company’s stock.
SERP
Agreements.
The SERP agreements are intended to provide
“defined benefit” retirement income to the named executive officers to augment
that provided through the Company’s other plans and outside resources such as
Social Security. Benefits under the SERP agreements are calculated as
a percentage of an executive’s average base salary during the years immediately
preceding retirement with post-retirement benefits paid in equal monthly
installments until the death of the participant.
The
Bank
has purchased bank-owned life insurance policies on each of the named executive
officers to provide income in the form of growth in each policy’s cash surrender
values over time to offset the costs of the SERP
agreements. Additionally, these policies provide a form of life
insurance benefit under the terms of a Life Insurance Endorsement Method Split
Dollar Plan Agreement between the named executive officer and the
Bank. This agreement provides for the payment of the value of the
expected SERP agreement benefit to the named executive officer’s designated
beneficiaries in the event of the named executive officer’s death.
In
relation to the goals and objectives of the executive compensation program,
the
ESOP, 401(k) plan and SERP benefits included in our executive compensation
program serve two primary purposes:
|
§
|
To
provide a reasonable, fair and competitive level of retirement
compensation to our executives in relation to their roles and
responsibilities, and
|
|
§
|
To
attract and retain talented and experienced executives whose knowledge,
skills and performance are critical to our success in a highly competitive
community banking industry.
|
Each
of
the named executive officers participates in the ESOP. All employees share
ratably in the number of ESOP shares allocated annually. The number of shares
allocated to any eligible employee, including the named executive officers,
is
based upon their annual wages and salaries in relation to that of all eligible
participants, subject to certain caps for highly compensated employees. Such
caps currently limit the number of shares allocated annually to the Chief
Executive Officer and President & Chief Operating Officer. Similarly, each
of the named executive officers also participates in the 401(k)
plan.
As
noted
above, the Bank has entered into SERP agreements that provide for supplemental
retirement benefits to each of the named executive officers. The SERP
agreements for Mr. Kliminski and Mr. Heyer were executed in December
2002. Ms. Bringuier’s SERP agreement was executed in April
2003. The SERP agreement for Mr. Kowal, who joined the institution in
March 2005, was executed in December 2006.
Within
each of the SERP agreements, the key variable in determining the level of an
executive’s supplemental retirement benefit is the percentage of
average base salary that will be paid to the executive as a post-retirement
benefit. In determining the appropriate percentage for each
executive, the committee considered the aggregate amount of post-retirement
income which the executive would be forecasted to receive through their
employment with the Company assuming continuation of their current role and
responsibilities. The committee considered such sources of retirement
income to include SERP agreement payments, distributions from the 401(k) plan,
distributions from the ESOP as well as payments received by the executive though
Social Security. The aggregated level of expected post retirement
income was then evaluated by the committee in relation to the projected level
of
the executive’s base salary at retirement. The level of SERP
agreement benefit was generally targeted to provide an aggregate level of
post-retirement income in approximate ranges of projected pre-retirement base
salary of 65% to 75% for Mr. Kliminski and Mr. Kowal, 55% to 65% for Mr. Heyer
and 45% to 55% for Ms. Bringuier.
Based
on
these considerations, the percentage of each executive’s average base salary to
be paid as a SERP agreement benefit was established as follows: Mr.
Kliminski - 50%, Mr. Kowal - 45%, Mr. Heyer - 40%, and Ms. Bringuier -
30%. The average base salary providing the basis of the
post-retirement SERP agreement benefit is defined within the applicable SERP
agreements as the average of the three highest years’ base salaries during the
five years immediately preceding the executive’s retirement.
Health
Care and Life &
Long Term Disability Insurance Benefits.
Health care benefits are a form
of non-cash compensation designed to cover a significant portion of the costs
of
providing health care protection to employees. We maintain a program
of health care benefits covering medical, dental and vision benefits that are
available to substantially all employees. We also maintain programs
through which we provide life and long term disability insurance to
substantially all employees.
In
relation to the goals and objectives of the executive compensation program,
the
health care and other insurance benefits included in our executive compensation
program serve two primary purposes:
|
§
|
To
attract and retain talented and experienced executives whose knowledge,
skills and performance are critical to our success in a highly competitive
community banking industry, and
|
|
§
|
To
provide a reasonable, fair and competitive level of current compensation
to our executives in relation to their roles and
responsibilities.
|
We
generally provide health care and long term disability insurance benefits to
each of the named executive officers through the same plans providing such
coverage to other employees. Like all employees, executives are able to select
from the applicable level of health care coverage that protects the individual
employee and, where elected by the executive, their dependents. The
level of dependent coverage determines the amount of mandatory contribution
that
is made by the executive through a payroll deduction to partially defray our
cost of providing such coverage.
In
the
event that an employee were to incur a long term disability that prevented
active employment, our disability insurance generally compensates the employee
at 60% of their base salary through their normal retirement age as defined
by
the Social Security. Such protection is currently capped at $10,000
per month. Consequently, based upon their current base salaries, Mr.
Heyer and Ms. Bringuier’s long term disability protection is currently limited
to $120,000 per year. The employment agreements for
Mr.
Kliminski
and Mr. Kowal each contain provisions for supplemental long term disability
compensation to be paid directly by the Bank during the remaining term of their
respective contracts. Thereafter, Mr. Kliminski’s and Mr. Kowal’s
long term disability compensation would be similarly capped at $120,000 per
year.
We also
provide life insurance benefits to the named executive officers. This
benefit is provided through separate coverage than that provided to other
employees. Specifically, in accordance with the terms of an Executive
Life Insurance Agreement executed with the Bank, each named executive officer
is
provided with life insurance protection equivalent to 300% of the executive’s
highest annual base salary in effect during the three calendar years preceding
their death. The Bank has purchased bank-owned life insurance
policies on each of the named executive officers through which this coverage
is
provided.
Because
of the Company’s use of bank-owned life insurance to provide this benefit to its
executives, there are no recurring premiums paid by the Bank to maintain this
coverage. However, the underlying value of insurance benefit provided
to each executive officer is included in their annual taxable
income. This amount for each executive is reported in the Summary
Compensation table below.
Perquisites.
We limit
our provision of executive perquisites to the Chief Executive Officer and the
President and Chief Operating Officer. Specifically, we lease
automobiles for Mr. Kliminski and Mr. Kowal for their use in support of Company
business. Our cost of leasing the automobiles for Mr. Kliminski and
Mr. Kowal for fiscal 2007 was approximately $9,100 and $6,600
respectively. The automobiles are also available for each executive’s
personal use.
We
also
pay for Mr. Kliminski’s country club membership, which is used to support the
building of business relationships and support our community involvement. The
cost of maintaining Mr. Kliminski’s club membership during fiscal 2007 was
approximately $7,800.
Employment
Agreements.
The manner in which we implement the compensation components
outlined above may be supported by one or more agreements executed between
the
Company or the Bank and the named executive officers. In particular,
the Bank has executed individual employment agreements under which it
specifically outlines the terms of employment of each of the named executive
officers.
In
relation to the goals and objectives of the executive compensation program,
the
employment agreements included in the program serve two primary
purposes:
|
§
|
To
attract and retain talented and experienced executives whose knowledge,
skills and performance are critical to our success in a highly competitive
community banking industry, and
|
|
§
|
To
provide a reasonable, fair and competitive level of current compensation
to our executives in relation to their roles and
responsibilities.
|
Employment
agreements achieve these purposes by codifying our level of commitment and
assurance to honor and protect the terms of the executive’s employment, while
providing appropriate remuneration for potential changes thereto, in return
for
the executive’s commitment and assurance of continued service to
us.
The
Bank
has entered into employment agreements with Mr. Kliminski, Mr. Kowal, Mr. Heyer
and Ms. Bringuier. The agreements with Mr. Kliminski and Mr. Kowal
each have terms of three years while Mr. Heyer’s and Ms. Bringuier’s agreements
each have terms of one year. Each of the agreements provides for an
annual one-year extension of its terms upon determination by the committee
that
the executive’s performance has met the requirements and the standards of the
Board of Directors such that the remaining
term
of
the agreement is reset to three years for Mr. Kliminski’s and Mr. Kowal’s
agreements and one year for Mr. Heyer’s and Ms. Bringuier’s
agreements.
As
discussed in the more detailed description of the employment agreements that
appears following the Grants of Plan-Based Awards table below, each of the
employment agreements provides for certain payments and benefits if the
executive’s employment is terminated under certain scenarios, including, but not
limited to, following a change in control of the Company. The
employment agreements thus requires a “double trigger” in order for any payments
or benefits under the agreements to be provided to Mr. Kliminski, Mr. Kowal,
Mr.
Heyer or Ms. Bringuier following a change in control. In other words,
both a change in control
and
an involuntary
termination of employment (which includes a voluntary termination by the
executive following a material reduction in his or her duties, responsibilities
or benefits) must occur. The purpose of providing the change in control payments
and benefits is to attract and retain top level executives of the highest
caliber and mitigate the risk to these executives that their employment will
be
involuntarily terminated in the event the Company is acquired. At the
same time, the mere sale of the Company will not automatically trigger a payout,
as our intention is to induce the executive to remain employed following a
change in control so long as the acquiring company so desires without a material
reduction in the executive’s duties, responsibilities or benefits.
Program
Oversight
and Administration.
The committee’s program oversight and
administration activities are generally conducted annually during the first
fiscal quarter ending December 31 although such activities may be performed
throughout the year as required by the committee to achieve program
objectives. Through these activities, the committee reviews the
executive compensation program to ensure that each of its individual components
are functioning individually and collectively in a manner that supports the
stated objectives of the program. Where appropriate, both the
structure and terms of the individual components, and the named executive
officers eligible to participate in each, are adjusted to support the program’s
overall goals and objectives.
The
following discussion reviews the primary oversight and administration activities
conducted by the committee for each applicable component of the executive
compensation program as they related to the compensation of named executive
officers during fiscal 2007.
Base
Salary.
The committee conducted its annual review and
reassessment of executive base salaries during the quarter ended December 31,
2006. The committee’s activities included the review of executive
compensation information provided through a number of independent sources with
the greatest emphasis placed on that provided by SNL Financial and L.R. Webber
& Associates, Inc. Through these sources the committee compared,
where available, the level of comparable compensation based upon each named
executive officer’s functional role or title for similar institutions based on
asset size, geography and form of ownership.
Next,
the
committee qualitatively reviewed the manner in which each executive performed
their individual job functions in relation to the Board of Directors standards
and requirements for the executive’s role and responsibilities within the
Company. Of particular importance to the committee was each
executive’s individual demonstrable role and influence on achieving the specific
goals and objectives of the Company’s business plan including, in particular,
those relating to growth in commercial lending, de novo branch expansion, growth
in core deposits and capital management.
Finally,
the committee also considered the level of each executive’s base salary in
relation to the total compensation earned by the executive including, in
particular, the level of equity-based and retirement compensation currently
earned by each executive. Of particular importance to the committee
was the level of current expense associated with the aggregate level of each
executive’s compensation in relation to the near-term net income projected in
our updated business plan and budget.
In
summary, the committee was satisfied that the level of base salary for Mr.
Kliminski, Mr. Kowal, Mr. Heyer and Ms. Bringuier remained reasonable based
on
the information considered by the committee. Similarly, the committee
was satisfied as to the specific manner in which each of these four executives
performed their roles and responsibilities particularly as they related to
achieving specified goals and objectives within our business
plan. However, the committee recognized the near term earnings
challenges facing the Company resulting from the continued execution of its
business plan in the adverse rate environment facing the Company during fiscal
2007. Consequently, the base salaries for each of the named executive
officers remained unchanged from calendar year 2006 to calendar year
2007.
Performance-Based
Incentive
Compensation.
During the quarter ended December 31, 2006, the
committee measured corporate performance in relation to the specific performance
targets established in the MIP for fiscal 2006. Such targets included
quantitative targets for earnings, net loan growth and net deposit
growth. Due largely to the Company’s failure to meet certain minimum
profitability targets as measured by return on average equity, no incentive
compensation was earned by any of the named executive officers for fiscal
2006.
For
fiscal 2007, the committee identified Mr. Kliminski, Mr. Kowal, Mr. Heyer and
Ms. Bringuier as eligible participants in the MIP. The committee
established ten percent of each executive’s base salary as the MIP basis, or the
targeted incentive award level for each executive, with twenty percent of each
executive’s base salary as the maximum award level. Next, based upon
our updated business plan and budget, the committee established quantitative
and
qualitative performance targets to be used in each executive’s MIP calculation
for fiscal 2007. These performance targets were selected and
“weighted” in relation to one another based upon the expected long term earnings
impact and strategic value to the Company and each executive’s specific role and
responsibilities within the Company.
Quantitative
loan-related targets utilized in the 2007 MIP primarily included those relating
to net growth in commercial loan balances, net growth in the balance of second
mortgages and home equity lines of credit and one-to four-family mortgage loan
origination volume. Quantitative deposit-related targets primarily
included those relating to net growth in noninterest-bearing checking account
balances, net growth in “non-promotional” interest-bearing checking account
balances and net growth in savings account
balances. “Non-promotional” checking account balances targeted in the
fiscal 2007 MIP calculations excluded the balance of accounts on which the
Bank
paid “above-market” rates to initially attract deposits at newly opened
branches. Due to the detrimental near term earnings impact that was
expected to result during fiscal 2007 from executing our business plan, the
committee significantly reduced the impact of targeted net income as a specific
quantitative factor used in the 2007 MIP.
Finally,
qualitative performance targets were established based on applicable
non-quantifiable criteria designed to support the achievement of goals and
objectives of our updated business plan and budget. These performance
targets were similarly based upon each executive’s specific role and
responsibilities within the Company and included criteria relating to asset
quality, branch development, capital management, risk management and internal
control and regulatory compliance including community support and
reinvestment.
The
table
on the following page summarizes the total MIP compensation earned by each
named
executive officer during fiscal 2007 and the allocation of such compensation
based upon the key performance targets and their respective weightings as
determined by the committee. As described above under “Components of
Executive Compensation—Performance-Based Incentive Compensation,” the
quantitative performance factors were based on objectively measurable numerical
values while the qualitative performance factors were based on a subjective
assessment by the committee, utilizing a numerical scale to rate performance
under each qualitative factor.
|
Executive
|
MIP
Basis
(%)
|
|
MIP
Basis
($)
|
|
MIP
Earned
($)
|
|
Performance
Factor
|
Factor
Weight
(%)
|
2007
Target Performance
by
Factor
($
000’s)
|
MIP
Basis
by
Factor
($)
|
2007
Actual Performance
by
Factor
($
000’s)
|
MIP
Earned
by
Factor
($)
|
|
|
|
|
|
|
|
|
Joseph
Kliminski
|
10
%
|
|
25,875
|
|
22,605
|
|
Quantitative
Factors
|
|
|
|
|
|
|
Net
income
|
10
%
|
816
|
2,588
|
557
|
1,765
|
|
Commercial
loan growth
|
10
%
|
62,143
|
2,588
|
45,674
|
1,902
|
|
Noninterest
checking growth
|
10
%
|
2,406
|
2,588
|
6,949
|
5,175
|
|
Interest-bearing
checking growth
|
10
%
|
8,256
|
2,588
|
11,715
|
3,672
|
|
Savings
Growth
|
5
%
|
11,533
|
1,294
|
(14,230)
|
-
|
|
Qualitative
Factors
|
|
|
|
|
|
|
Community
Support & Reinvestment
|
25
%
|
|
6,469
|
|
3,881
|
|
Non
Interest Expense Control
|
15
%
|
|
3,880
|
|
2,330
|
|
Other
qualitative factors
|
15
%
|
|
3,880
|
|
3,880
|
|
|
|
|
|
|
|
|
Fred
G. Kowal
|
10
%
|
|
22,500
|
|
23,256
|
|
Quantitative
Factors
|
|
|
|
|
|
|
Net
income
|
10
%
|
816
|
2,250
|
557
|
1,535
|
|
Commercial
loan growth
|
10
%
|
62,143
|
2,250
|
45,674
|
1,654
|
|
Noninterest
checking growth
|
10
%
|
2,406
|
2,250
|
6,949
|
4,500
|
|
Interest-bearing
checking growth
|
10
%
|
8,256
|
2,250
|
11,715
|
3,192
|
|
Savings
Growth
|
5
%
|
11,533
|
1,125
|
(14,230)
|
-
|
|
Qualitative
Factors
|
|
|
|
|
|
|
Branch
Development
|
10
%
|
|
2,250
|
|
2,250
|
|
Asset
Quality
|
10
%
|
|
2,250
|
|
2,250
|
|
Capital
Management
|
10
%
|
|
2,250
|
|
2,250
|
|
Employee
Hiring & Retention
|
10
%
|
|
2,250
|
|
2,250
|
|
Other
qualitative factors
|
15
%
|
|
3,375
|
|
3,375
|
|
|
|
|
|
|
|
|
Eric
B. Heyer
|
10
%
|
|
15,533
|
|
16,055
|
|
Quantitative
Factors
|
|
|
|
|
|
|
Net
income
|
10
%
|
816
|
1,553
|
557
|
1,060
|
|
Commercial
loan growth
|
10
%
|
62,143
|
1,553
|
45,674
|
1,142
|
|
Noninterest
checking growth
|
10
%
|
2,406
|
1,553
|
6,949
|
3,106
|
|
Interest-bearing
checking growth
|
10
%
|
8,256
|
1,553
|
11,715
|
2,204
|
|
Savings
Growth
|
5
%
|
11,533
|
778
|
(14,230)
|
-
|
|
Qualitative
Factors
|
|
|
|
|
|
|
Financial
Planning, Reporting & Analysis
|
15
%
|
|
2,330
|
|
2,330
|
|
Risk
Management & Internal Control
|
15
%
|
|
2,330
|
|
2,330
|
|
Capital
Management
|
10
%
|
|
1,553
|
|
1,553
|
|
Other
qualitative factors
|
15
%
|
|
2,330
|
|
2,330
|
|
|
|
|
|
|
|
|
Catherine
M. Bringuier
|
10
%
|
|
14,413
|
|
10,051
|
|
Quantitative
Factors
|
|
|
|
|
|
|
1-4
family mortgage loan origination
|
20
%
|
55,625
|
2,883
|
40,241
|
2,086
|
|
Gain
on sale of loans
|
20
%
|
128
|
2,883
|
43
|
967
|
|
HELOC/2
nd
mortgage loan growth
|
20
%
|
13,033
|
2,883
|
2,966
|
657
|
|
Qualitative
Factors
|
|
|
|
|
|
|
Risk
Management & Internal Control
|
10
%
|
|
1,441
|
|
2,018
|
|
Asset
Quality
|
10
%
|
|
1,441
|
|
1,441
|
|
Other
qualitative factors
|
20
%
|
|
2,882
|
|
2,882
|
Equity-Based
Compensation.
Based upon the review of the equity-based
compensation plans, the committee awarded to Mr. Kowal the remaining number
of
restricted stock shares and stock options that were available under the
Company’s existing equity incentive plans during the quarter ended December 31,
2006. Through this action, Mr. Kowal received an additional 6,249
restricted shares, the value of which was $74,176 based on the Company’s closing
share value of $11.87 on the date of grant. Similarly, Mr. Kowal
received an additional 19,094 stock options, the value of which was based on
that same value. The Company calculated the value of the options
awarded to Mr. Kowal to be $41,927, which will be expensed by the Company over
the five-year period during which Mr. Kowal vests in those
awards. These awards were made to Mr. Kowal because he joined the
Company after the initial grants of stock options and restricted stock were
made
to executive officers in January 2005 and the committee desired to bring his
level of equity incentive awards closer to the level received to date by the
other executive officers.
With
this
increase to Mr. Kowal’s benefit, the committee was satisfied that the structure
and level of equity-based compensation met the stated goals and objectives
of
the program. As such, the committee made no other changes to the
equity-based compensation component of the program during fiscal
2007.
Retirement
Benefits.
Based upon the review of the various components of
retirement compensation, the committee was satisfied that the structure and
level of such compensation met stated goals and objectives of the
program. As such, the committee made no changes to the retirement
benefit component of the program during fiscal 2007.
Health
Care and Life &
Long Term Disability Insurance Benefits.
Based upon the review of the
health care and insurance benefits provided to named executive officers, the
committee was satisfied that the structure and level of such compensation met
stated goals and objectives of the program. As such, the committee
made no changes to the health care and insurance benefit component of the
program during fiscal 2007.
Perquisites.
Based
upon the review of the limited perquisites provided to the eligible named
executive officers, the committee was satisfied that the nature and level of
such perquisites met stated goals and objectives of the program. As
such, the committee made no changes to such perquisites component of the program
during fiscal 2007.
Employment
Agreements.
Based upon the committee’s review of each
executive’s performance of their role and the manner in which each executive
executed and fulfilled their responsibilities in relation to the requirements
of
the Board of Director during fiscal 2006, the Bank extended the term of the
employment agreements for Mr. Kliminski, Mr. Kowal, Mr. Heyer and Ms. Bringuier
for an additional twelve month period with no additional changes to agreement
terms.
Accounting
and
Income Tax Considerations.
Based upon our executive
compensation program, the accounting and income tax treatment of compensation
has generally not been a factor in determining the forms and amounts of
compensation for our executive officers. However, the committee and
management have considered the accounting and income tax impact of program
components and the compensation paid to each executive within each component
and
in the aggregate.
Internal
Revenue Code Section
162(m).
Section 162(m) of the Internal Revenue Code of 1986,
as amended, generally disallows a tax deduction for compensation paid to any
“covered employee” (defined, per the guidance of the Internal Revenue Service,
as the principal executive officer and the three other most highly compensated
officers named in the Summary Compensation Table) in excess of $1.0 million
per
year, to the extent such compensation is not “performance-based compensation”
under a plan approved by shareholders. The committee reviews and
considers the potential consequences of Section 162(m) to the
Company. Based upon the Company’s current executive compensation
program, the Company has no individuals with non-performance based compensation
paid in excess of the Internal Revenue Code 162(m) tax deduction
limit. However, the Company reserves the right to use our discretion
judgment to authorize compensation to any employee that does not comply with
the
Section 162(m) exemptions for compensation that we believe is
appropriate.
Internal
Revenue Code Section
280G.
Section 280G of the Internal Revenue Code provides that
severance payments that equal or exceed three times the individual’s base amount
are deemed to be “excess parachute payments” if they are conditioned upon a
change of control. Individuals receiving parachute payments in excess
of the three times their base amount are subject to a 20% excise tax on the
amount of the excess payments. If excess parachute payments are made,
the Company would not be entitled to deduct the amount of the excess
payments. Each employment agreement provides that severance and other
payments that are subject to a change of control will be reduced as much as
necessary to ensure that no amounts payable to the executive will be considered
excess parachute payments.
Summary
Compensation Table
The
following table sets forth information concerning the compensation paid to
or
earned by the named executive officers for 2007:
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
(1)
|
Stock
Awards
($)
(2
)
|
Option
Awards
($)
(3)
|
Non-Equity
Incentive
Plan
Compensation
($)
(4)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
|
All
Other
Compensation
($)
|
Total
Compensation
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
Kliminski, Chief Executive
Officer
|
2007
|
258,750
|
---
|
249,223
|
128,637
|
22,605
|
212,310
|
75,735
(6)
|
947,260
|
|
|
|
|
|
|
|
|
|
|
|
|
Fred
G. Kowal, President and
Chief
Operating Officer
|
2007
|
225,000
|
---
|
193,599
|
74,217
|
23,256
|
43,330
|
52,208
(7)
|
611,610
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
B. Heyer, Senior Vice
|
2007
|
155,328
|
---
|
113,539
|
58,354
|
16,055
|
11,429
|
35,785
(8)
|
390,490
|
|
President
and Chief Financial
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
Catherine
M. Bringuier, Senior
Vice
President and Chief Lending
|
2007
|
144,130
|
---
|
105,303
|
55,298
|
10,051
|
10,393
|
32,707
(9)
|
357,882
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________________
(1)
Bonus amounts are reported under the “Non-Equity Incentive Plan Compensation”
column.
|
(2)
|
Reflects
the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended September 30, 2007, in accordance with
FAS 123R,
of restricted stock granted to the named executive officers (disregarding
for this purpose the estimate of forfeitures related to service-based
vesting conditions, and thus may include amounts from awards made
in and
prior to fiscal 2007). The assumptions used in the calculation of
this
amount are included in Note 11 of the Notes to Consolidated Financial
Statements contained in the Company’s Annual Report on Form 10-K for the
fiscal year ended September 30, 2007 filed with the Securities and
Exchange Commission.
|
|
(3)
|
Reflects
the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended September 30, 2007, in accordance with
FAS 123R,
of stock options granted to the named executive officer (disregarding
for
this purpose the estimate of forfeitures related to service-based
vesting
conditions, and thus may include amounts from awards made in and
prior to
fiscal 2007). The assumptions used in the calculation of these amounts
are
included in Note 11 of the Notes to Consolidated Financial Statements
contained in the Company’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2007 filed with the Securities and Exchange
Commission.
|
|
(4)
|
Represents
incentive bonus amounts awarded for performance in fiscal 2007 under
the
Management Incentive Plan.
|
|
(5)
|
Represents
the change during fiscal 2007 in the actuarial present value of the
named
executive officer’s accumulated benefit under the Company’s supplemental
executive retirement plan. The assumptions used for this
calculation were the same as those used for the calculation of the
present
value of accumulated benefit in the table under “Pension Benefits.”
|
|
(6)
|
For
Mr. Kliminski, the amount reported under the All Other Compensation
column
consists of the following: personal use of Bank-leased automobile
valued
at $5,961; country club dues paid on Mr. Kliminski’s behalf of $7,751;
life insurance premiums paid on Mr. Kliminski’s behalf valued at $13,397;
employer matching contributions under the Bank’s 401(k) profit sharing
plan of $6,552; and allocation of shares under the ESOP, based on
the
closing price of the Company’s common stock on September 30, 2007, of
$42,074.
|
|
(7)
|
For
Mr. Kowal, the amount reported under the All Other Compensation column
consists of the following: personal use of Bank-leased automobile
valued
at $5,715; life insurance premiums paid on Mr. Kowal’s behalf valued at
$899; employer matching contributions under the Bank’s 401(k) profit
sharing plan of $3,635; and allocation of shares under the ESOP,
based on
the closing price of the Company’s common stock on September 30, 2007, of
$41,959.
|
|
(8)
|
For
Mr. Heyer, the amount reported under the All Other Compensation column
consists of the following: life insurance premiums paid on Mr. Heyer’s
behalf valued at $1,617; employer matching contributions under the
Bank’s
401(k) profit sharing plan of $4,481; and allocation of shares under
the
ESOP, based on the closing price of the Company’s common stock on
September 30, 2007, of $29,687.
|
|
(9)
|
For
Ms. Bringuier, the amount reported under the All Other Compensation
column
consists of the following: life insurance premiums paid on Ms. Bringuier’s
behalf valued at $834; employer matching contributions under the
Bank’s
401(k) profit sharing plan of $4,324; and allocation of shares under
the
ESOP, based on the closing price of the Company’s common stock on
September 30, 2007, of $27,549.
|
Grants
of Plan-Based Awards
|
|
|
Estimated
Possible Payouts Under
Non-Equity
Incentive Plan
Awards
|
Estimated
Future Payouts Under
Equity
Incentive Plan Awards
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or
Units
(#)
|
All
Other
Option
Awards:
Number
of Securities Underlying
Options
(#)
|
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
($)
|
|
Name
|
Grant
Date
|
Threshold
($)
(1)
|
Target
($)
(1)
|
Maximum
($)
(1)
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Exercise
Price of Option Awards ($/Sh)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
Kliminski
|
n/a
|
---
|
25,875
|
51,750
|
---
|
---
|
---
|
---
|
---
|
---
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fred
G.
Kowal
|
n/a
|
---
|
22,500
|
45,000
|
---
|
---
|
---
|
---
|
---
|
---
|
---
|
|
|
12/19/06
|
---
|
---
|
---
|
---
|
---
|
---
|
6,249
(2)
|
---
|
---
|
74,176
(4)
|
|
|
12/19/06
|
---
|
---
|
---
|
---
|
---
|
---
|
---
|
19,094
(3)
|
11.87
|
41,927
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
B.
Heyer
|
n/a
|
---
|
15,533
|
31,066
|
---
|
---
|
---
|
---
|
---
|
---
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catherine
M.
Bringuier
|
n/a
|
---
|
14,413
|
28,826
|
---
|
---
|
---
|
---
|
---
|
---
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________
|
(1)
|
For
each named executive officer, represents the threshold (i.e. lowest),
target and maximum amounts that were potentially payable for fiscal
2007
under the Company’s Management Incentive Plan. The actual
amounts earned under these awards for fiscal 2007 are reflected in
the
Summary Compensation Table under the “Non-Equity Incentive Plan
Compensation” column. For additional information regarding the
Management Incentive Plan, see “Compensation Discussion and
Analysis—Performance-Based Incentive Compensation.”
|
|
(2)
|
Represents
an award of restricted stock under the Company’s 2006 Equity Incentive
Plan, subject to the following vesting schedule: 20% on each of December
19, 2007, 2008, 2009, 2010 and 2011.
|
|
(3)
|
Represents
an award of a stock option under the Company’s 2006 Equity Incentive Plan,
subject to the following vesting schedule: 20% on each of December
19,
2007, 2008, 2009, 2010 and 2011.
|
|
(4)
|
Represents
the grant date fair value of the award determined in accordance with
FAS
123R. The assumptions used in calculating the grant date fair
value of these awards are included in Note 11 of the Notes to Consolidated
Financial Statements contained in the Company’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2007 filed with the Securities
and
Exchange Commission.
|
Employment
Agreements
The
Bank
has employment agreements with each of Mr. Kliminski, Mr. Kowal, Mr. Heyer
and
Ms. Bringuier. Mr. Kliminski's and Mr. Kowal's employment agreements
have terms of three years, while Mr. Heyer's and Ms. Bringuier's agreements
have
terms of one year. Each of the agreements provides for an annual one-year
extension of the term of the agreement upon determination of the Board of
Directors that the executive's performance has met the requirements and
standards of the Board, so that the remaining term of the agreement continues
to
be three years, in the case of Mr. Kliminski and Mr. Kowal, and one year, in
the
case of Mr. Heyer and Ms. Bringuier.
If
the
Bank terminates the employment of Mr. Kliminski, Mr. Kowal, Mr. Heyer or Ms.
Bringuier without “just cause,” as defined in the agreement, they will be
entitled to a continuation of their salary from the date of termination through
the remaining term of their agreement (but not less than two years for Mr.
Kliminski and one year for Mr. Kowal), plus the cost of their obtaining health,
life, disability and other benefits which they would have been eligible to
receive through the salary continuation period, at substantially the same
benefit levels being provided on the employment termination date.
Mr.
Kliminski's and Mr. Kowal's employment agreements provide that if their
employment is involuntarily terminated without just cause, or voluntarily
terminated following a specified diminution in their duties, responsibilities
or
benefits, during the term of the agreement following a change in control of
the
Company or the Bank, or within 24 months following a change in control of the
Company or the Bank, they will be entitled to an amount equal to 2.99 times
their five-year average annual taxable compensation, subject to reduction to
avoid the payment of any “excess parachute payment” under the Internal Revenue
Code, payable, at their election, in a lump sum or in monthly installments
over
a 36-month period.
Mr.
Heyer’s and Ms. Bringuier’s employment agreements provide that if their
employment is involuntarily terminated without just cause, or voluntarily
terminated following a specified diminution in their duties, responsibilities
or
benefits, during the term of the agreement following a change in control of
the
Company or the Bank, or within 12 months following a change in control of the
Company or the Bank, they will be entitled to an amount equal to 2.00 times
their five-year average annual taxable compensation, subject to reduction to
avoid the payment of any “excess parachute payment” under the Internal Revenue
Code, payable, at their election, in a lump sum or in monthly installments
over
a 24-month period. See “Potential Payments Upon Termination of
Employment.”
Outstanding
Equity Awards At September 30, 2007
The
following table provides
information regarding each unexercised stock option and unvested restricted
stock award held by each of the named executive officers as of September 30,
2007:
|
|
|
|
|
|
|
|
|
|
Option
Awards
|
|
Stock
Awards
|
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value
of
Shares
or
Units
of
Stock
That Have Not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That Have Not
Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
|
|
|
65,958
|
(1)
|
|
|
98,941
|
(1)
|
|
|
---
|
|
|
|
6.80
|
|
01/20/15
|
|
|
29,994
|
(4)
|
|
|
326,035
|
|
|
|
---
|
|
|
|
---
|
|
|
Kliminski
|
|
|
31,795
|
(2)
|
|
|
127,184
|
(2)
|
|
|
---
|
|
|
|
11.49
|
|
05/23/16
|
|
|
63,094
|
(5)
|
|
|
685,832
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fred
G. Kowal
|
|
|
31,795
|
(2)
|
|
|
127,184
|
(2)
|
|
|
---
|
|
|
|
11.49
|
|
05/23/16
|
|
|
63,094
|
(5)
|
|
|
685,832
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
0
|
(3)
|
|
|
19,094
|
(3)
|
|
|
---
|
|
|
|
11.87
|
|
12/19/16
|
|
|
6,249
|
(6)
|
|
|
67,927
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric
B. Heyer
|
|
|
29,854
|
(1)
|
|
|
44,785
|
(1)
|
|
|
---
|
|
|
|
6.80
|
|
01/20/15
|
|
|
13,748
|
(4)
|
|
|
149,441
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
14,452
|
(2)
|
|
|
57,810
|
(2)
|
|
|
---
|
|
|
|
11.49
|
|
05/23/16
|
|
|
28,679
|
(5)
|
|
|
311,741
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catherine
M.
|
|
|
29,854
|
(1)
|
|
|
44,785
|
(1)
|
|
|
---
|
|
|
|
6.80
|
|
01/20/15
|
|
|
13,748
|
(4)
|
|
|
149,441
|
|
|
|
---
|
|
|
|
---
|
|
|
Bringuier
|
|
|
13,007
|
(2)
|
|
|
52,030
|
(2)
|
|
|
---
|
|
|
|
11.49
|
|
05/23/16
|
|
|
25,812
|
(5)
|
|
|
280,576
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________
|
(1)
|
Vesting
schedule of option is as follows: 20% on each of January 20,
2006, 2007, 2008, 2009 and
2010.
|
|
(2)
|
Vesting
schedule of option is as follows: 20% on each of May 23, 2007,
2008, 2009, 2010 and
2011.
|
|
(3)
|
Vesting
schedule of option is as follows: 20% on each of December 19, 2007,
2008,
2009, 2010 and 2011.
|
|
(4)
|
Unvested
portion of restricted stock award subject to the following vesting
schedule: 20% on each of January 20, 2006, 2007, 2008, 2009 and
2010.
|
|
(5)
|
Unvested
portion of restricted stock award subject to the following vesting
schedule: 20% on each of May 23, 2007, 2008, 2009, 2010 and
2011.
|
|
(6)
|
Unvested
portion of restricted stock award subject to the following vesting
schedule: 20% on each of December 19, 2007, 2008 2009, 2010 and
2011.
|
Option
Exercises and Stock Vested
The
following table sets forth information about stock options exercised and shares
of restricted stock that vested during the fiscal year ended September 30,
2007
with respect to each named executive officer:
|
|
|
Option
Awards
|
|
|
Stock
Award
|
|
|
Name
|
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
|
|
Value
Realized
on
Exercise
($)
|
|
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
|
|
Value
Realized
on
Vesting
($)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
Kliminski
|
|
|
---
|
|
|
|
---
|
|
|
|
25,771
|
|
|
|
294,019
|
|
|
Fred
G. Kowal
|
|
|
---
|
|
|
|
---
|
|
|
|
15,773
|
|
|
|
176,342
|
|
|
Eric
B. Heyer
|
|
|
---
|
|
|
|
---
|
|
|
|
11,751
|
|
|
|
134,080
|
|
|
Catherine
M. Bringuier
|
|
|
---
|
|
|
|
---
|
|
|
|
11,034
|
|
|
|
126,034
|
|
________________
|
(1)
|
Represents
the value realized upon vesting of restricted stock award, based
on the
market value of the shares on the vesting
date.
|
Pension
Benefits
The
Bank
maintains a supplemental executive retirement plan in the form of executive
salary continuation agreements (“SERP agreements”) with each of the named
executive officers. The SERP agreements provide for a lifetime annual
retirement benefit, payable monthly commencing with the first month after the
executive’s retirement date (generally the December 31st nearest the executive’s
65th birthday), equal to a specified percentage of the executive’s average base
salary based upon the average of the highest three out of the last
five years of employment. These percentages are 50% for Mr.
Kliminski, 45% for Mr. Kowal, 40% for Mr. Heyer and 30% for Ms.
Bringuier.
If
an
executive’s employment with the Bank terminates prior to retirement, either
voluntarily by the executive or by the Bank without cause (other than following
a change in control to the extent described below), then the executive will
receive as severance compensation a lump sum amount equal to the accrued balance
of the executive’s liability reserve account multiplied by the executive’s
vested percentage. Mr. Kowal is currently 40% vested in his account;
all of the other named executive officers are 100% vested in their accounts.
If
an executive’s employment with the Bank terminates due to disability, the
executive will be entitled to receive 100% of his or her accrued liability
balance at the time of disability, payable at the Bank’s election either in a
lump sum or in 15 annual payments with an equivalent present
value. If an executive’s employment with the Bank is terminated
within 12 months after a change in control, either involuntarily by the Bank
without cause or voluntarily by the executive if a specified diminution in
the
executive’s duties, responsibilities or benefits occurs, then the executive will
be entitled to his or her full retirement benefits under the SERP agreement
upon
attaining age 65, as if the executive had been continuously employed by the
Bank
until age 65, subject to reduction to avoid the payment of an “excess parachute
payment” under the Internal Revenue Code. As long as the SERP
agreement remains in effect, upon the death of the executive, the executive’s
beneficiary will be paid a death benefit under the terms of the Endorsement
Method Split Dollar Life Insurance Agreement between the executive the Bank.
No
benefits are payable under the agreements upon termination for
cause.
The
following table sets forth information regarding benefits payable to the named
executive officers under the SERP agreements:
|
Name
|
Plan
Name
|
|
Number
of
Years
Credited
Service
(#)
|
|
|
Present
Value
of
Accumulated
Benefit
($)
|
|
|
Payments
During
Last
Fiscal
Year
($)
|
|
|
Joseph
Kliminski
|
Executive
Salary Continuation Agreement
|
|
|
n/a
|
|
|
|
1,173,553
|
|
|
|
---
|
|
|
Fred
G. Kowal
|
Executive
Salary Continuation Agreement
|
|
|
n/a
|
|
|
|
627,562
|
|
|
|
---
|
|
|
Eric
B. Heyer
|
Executive
Salary Continuation Agreement
|
|
|
n/a
|
|
|
|
284,382
|
|
|
|
---
|
|
|
Catherine
M. Bringuier
|
Executive
Salary Continuation Agreement
|
|
|
n/a
|
|
|
|
257,793
|
|
|
|
---
|
|
The
amounts shown for the present value of accumulated benefit, assume an age 65
retirement date, a discount rate of 6.00% and a post-retirement mortality for
each named executive as follows: Mr. Kliminski – 14 years, Mr. Kowal – 11 years,
Mr. Heyer – 9 years and Ms. Bringuier – 14 years.
Potential
Payments Upon Termination of Employment
The
following tables summarize the approximate value of the termination payments
and
benefits that the named executive officers would have received if their
employment had been terminated on September 28, 2007 under the circumstances
shown. The tables exclude (i) amounts accrued through September 28,
2007 that would be paid in the normal course of continued employment, such
as
accrued but unpaid salary and bonus amounts, (ii) and account balances under
the
Bank’s 401(k) profit sharing plan and the ESOP.
|
|
|
|
|
|
|
|
|
Joseph
Kliminski
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Scenario
|
|
Salary
Continuation
Under
Employment
Agreement
|
|
|
Continuation
of
Group
Health,
Life
and
Disability
Insurance
Coverage
|
|
|
Supplemental
Executive
Retirement
Benefit
|
|
|
Death
Benefit
|
|
|
Disability
Benefit
|
|
|
Accelerated
Vesting
of
Stock
Options
|
|
|
Accelerated
Vesting
of
Restricted
Stock
|
|
|
Payment
of
299%
of
“Base
Amount”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination for cause occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
voluntary termination (not following a change in control)
occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
$1,002,496
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause (not following a change in
control)
occurs
|
|
|
$582,188
|
(2)
|
|
|
$31,367
|
(3)
|
|
|
$1,002,496
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause, or voluntary termination for
specified reasons, occurs following a change in control
|
|
|
---
|
|
|
|
---
|
|
|
|
$1,173,553
|
(9)
|
|
|
---
|
|
|
|
---
|
|
|
|
$402,690
|
(4)
|
|
|
$1,011,867
|
(5)
|
|
|
$939,331
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to disability
|
|
|
---
|
|
|
|
---
|
|
|
|
$1,002,496
|
(1)
|
|
|
---
|
|
|
|
$226,406
|
(7)
|
|
|
$402,690
|
(4)
|
|
|
$1,011,867
|
(5)
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to death
|
|
|
---
|
|
|
|
---
|
|
|
|
$1,038,312
|
(10)
|
|
|
$776,250
|
(8)
|
|
|
----
|
|
|
|
$402,690
|
(4)
|
|
|
$1,011,867
|
(5)
|
|
|
---
|
|
____________________________
|
(1)
|
Represents
the benefit payable to Mr. Kliminski under the circumstances indicated
pursuant to his SERP agreement, as described above under “Pension
Benefits.”
|
|
(2)
|
Represents
the aggregate amount of salary that would continue to be paid to
Mr.
Kliminski pursuant to his employment agreement from the assumed employment
termination date (September 28, 2007) through the last day of the
term of
his employment agreement (January 11,
2010).
|
|
(3)
|
Represents
the estimated approximate cost to the Company of Mr. Kliminski obtaining
continued health, life and disability insurance benefits pursuant
to his
employment agreement.
|
|
(4)
|
Represents
the value of acceleration of unvested stock options, based on the
closing
price of the Company’s common stock on September 28, 2007 ($10.87) and the
exercise prices of the options. All unvested options vest upon
a change in control, regardless of Mr. Kliminski’s employment
status.
|
|
(5)
|
Represents
the value of acceleration of unvested restricted stock, based on
the
closing price of the Company’s common stock on September 28, 2007
($10.87). All unvested shares of restricted stock vest upon a
change in control, regardless of Mr. Kliminski’s employment
status.
|
|
(6)
|
Mr.
Kliminski’s employment agreement provides that if his employment is
involuntarily terminated without just cause, or voluntarily terminated
following a specified diminution in his duties, responsibilities
or
benefits, during the term of the agreement following a change in
control
of the Company or the Bank, or within 24 months following a change
in
control of the Company or the Bank, he will be entitled to an amount
equal
to 2.99 times his “base amount” (defined generally in the Internal Revenue
Code as his five-year average annual taxable compensation), subject
to
reduction to avoid the payment of any “excess parachute payment” under the
Internal Revenue Code, payable, at his election, in a lump sum or
in
monthly installments over a 36-month
period.
|
|
(7)
|
Represents
supplemental disability benefit payments to Mr. Kliminski under his
employment agreement.
|
|
(8)
|
Represents
supplemental life insurance benefit under Mr. Kliminski’s Executive Life
Insurance Agreement with the Bank.
|
|
(9)
|
Represents
the discounted present value of the estimated post-retirement payments
to
be paid to Mr. Kliminski beginning at age 65 under the circumstances
indicated pursuant to his SERP agreement, as described above under
“Pension Benefits.” As discussed under “Pension
Benefits,” the amount payable to Mr. Kliminski under the change in control
scenario is subject to reduction to the extent necessary to avoid
the
payment of any “excess parachute payments” under the Internal Revenue
Code.
|
|
(10)
|
Represents
the life insurance benefit paid under Mr. Kliminski’s Life Insurance
Endorsement Method Split Dollar Plan Agreement with the Bank associated
with his SERP agreement.
|
Fred
G. Kowal
|
Termination
Scenario
|
|
Salary
Continuation
Under
Employment
Agreement
|
|
|
Continuation
of
Group
Health,
Life
and
Disability
Insurance
Coverage
|
|
|
Supplemental
Executive
Retirement
Benefit
|
|
|
Death
Benefit
|
|
|
Disability
Benefit
|
|
|
Accelerated
Vesting
of
Stock
Options
|
|
|
Accelerated
Vesting
of
Restricted
Stock
|
|
|
Payment
of
299%
of
“Base
Amount”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination for cause occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
voluntary termination (not following a change in control)
occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
$17,332
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause (not following a change in
control)
occurs
|
|
|
$506,250
|
(2)
|
|
|
$40,397
|
(3)
|
|
|
$17,332
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause, or voluntary termination for
specified reasons, occurs following a change in control
|
|
|
---
|
|
|
|
---
|
|
|
|
$627,562
|
(9)
|
|
|
---
|
|
|
|
---
|
|
|
|
$0
|
(4)
|
|
|
$753,758
|
(5)
|
|
|
$609,440
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to disability
|
|
|
---
|
|
|
|
---
|
|
|
|
$43,330
|
(1)
|
|
|
---
|
|
|
|
$407,812
|
(7)
|
|
|
$0
|
(4)
|
|
|
$753,758
|
(5)
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to death
|
|
|
---
|
|
|
|
---
|
|
|
|
$1,244,531
|
(10)
|
|
|
$675,000
|
(8)
|
|
|
----
|
|
|
|
$0
|
(4)
|
|
|
$753,758
|
(5)
|
|
|
---
|
|
____________________________
|
(1)
|
Represents
the benefit payable to Mr. Kowal under the circumstances indicated
pursuant to his SERP agreement, as described above under “Pension
Benefits.”
|
|
(2)
|
Represents
the aggregate amount of salary that would continue to be paid to
Mr. Kowal
pursuant to his employment agreement from the assumed employment
termination date (September 28, 2007) through the last day of the
term of
his employment agreement (March 13,
2010).
|
|
(3)
|
Represents
the estimated approximate cost to the Company of Mr. Kowal obtaining
continued health, life and disability insurance benefits pursuant
to his
employment agreement.
|
|
(4)
|
Because
the exercise prices of Mr. Kowal’s options are greater than the market
price of the Company’s common stock on September 28, 2007 ($10.87), no
acceleration value is shown.
|
|
(5)
|
Represents
the value of acceleration of unvested restricted stock, based on
the
closing price of the Company’s common stock on September 28, 2007
($10.87). All unvested shares of restricted stock vest upon a
change in control, regardless of Mr. Kowal’s employment
status.
|
|
(6)
|
Mr.
Kowal’s employment agreement provides that if his employment is
involuntarily terminated without just cause, or voluntarily terminated
following a specified diminution in his duties, responsibilities
or
benefits, during the term of the agreement following a change in
control
of the Company or the Bank, or within 24 months following a change
in
control of the Company or the Bank, he will be entitled to an amount
equal
to 2.99 times his “base amount” (defined generally in the Internal Revenue
Code as his five-year average annual taxable compensation), subject
to
reduction to avoid the payment of any “excess parachute payment” under the
Internal Revenue Code, payable, at his election, in a lump sum or
in
monthly installments over a 36-month
period.
|
|
(7)
|
Represents
supplemental disability benefit payments to Mr. Kowal under his employment
agreement.
|
|
(8)
|
Represents
supplemental life insurance benefit under Mr. Kowal’s Executive Life
Insurance Agreement with the Bank.
|
|
(9)
|
Represents
the discounted present value of the estimated post-retirement payments
to
be paid to Mr. Kowal beginning at age 65 under the circumstances
indicated
pursuant to his SERP agreement, as described above under “Pension
Benefits.” As discussed under “Pension Benefits,” the
amount payable to Mr. Kowal under the change in control scenario
is
subject to reduction to the extent necessary to avoid the payment
of any
“excess parachute payments” under the Internal Revenue
Code.
|
|
(10)
|
Represents
the life insurance benefit paid under Mr. Kowal’s Life Insurance
Endorsement Method Split Dollar Plan Agreement with the Bank associated
with his SERP agreement.
|
Eric
B. Heyer
|
Termination
Scenario
|
|
Salary
Continuation
Under
Employment
Agreement
|
|
|
Continuation
of
Group
Health,
Life
and
Disability
Insurance
Coverage
|
|
|
Supplemental
Executive
Retirement
Benefit
|
|
|
Death
Benefit
|
|
|
Accelerated
Vesting
of
Stock
Options
|
|
|
Accelerated
Vesting
of
Restricted
Stock
|
|
|
Payment
of
299%
of
“Base
Amount”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination for cause occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
voluntary termination (not following a change in control)
occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
$64,855
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause (not following a change in
control)
occurs
|
|
|
$155,328
|
(2)
|
|
|
$17,659
|
(3)
|
|
|
$64,855
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause, or voluntary termination for
specified reasons, occurs following a change in control
|
|
|
---
|
|
|
|
---
|
|
|
|
$284,382
|
(8)
|
|
|
---
|
|
|
|
$182,275
|
(4)
|
|
|
$461,181
|
(5)
|
|
|
$332,303
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to disability
|
|
|
---
|
|
|
|
---
|
|
|
|
$64,855
|
(1)
|
|
|
---
|
|
|
|
$182,275
|
(4)
|
|
|
$461,181
|
(5)
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to death
|
|
|
---
|
|
|
|
---
|
|
|
|
$1,201,157
|
(9)
|
|
|
$465,984
|
(7)
|
|
|
$182,275
|
(4)
|
|
|
$461,181
|
(5)
|
|
|
---
|
|
____________________________
|
(1)
|
Represents
the benefit payable to Mr. Heyer under the circumstances indicated
pursuant to his SERP agreement, as described above under “Pension
Benefits.”
|
|
(2)
|
Represents
the aggregate amount of salary that would continue to be paid to
Mr. Heyer
pursuant to his employment agreement from the assumed employment
termination date (September 28, 2007) through the last day of the
term of
his employment agreement (December 31,
2008).
|
|
(3)
|
Represents
the estimated approximate cost to the Company of Mr. Heyer obtaining
continued health, life and disability insurance benefits pursuant
to his
employment agreement.
|
|
(4)
|
Represents
the value of acceleration of unvested stock options, based on the
closing
price of the Company’s common stock on September 28, 2007 ($10.87) and the
exercise prices of the options. All unvested options vest upon
a change in control, regardless of Mr. Heyer employment
status.
|
|
(5)
|
Represents
the value of acceleration of unvested restricted stock, based on
the
closing price of the Company’s common stock on September 28, 2007
($10.87). All unvested shares of restricted stock vest upon a
change in control, regardless of Mr. Heyer’s employment
status.
|
|
(6)
|
Mr.
Heyer’s employment agreement provides that if his employment is
involuntarily terminated without just cause, or voluntarily terminated
following a specified diminution in his duties, responsibilities
or
benefits, during the term of the agreement following a change in
control
of the Company or the Bank, or within 12 months following a change
in
control of the Company or the Bank, he will be entitled to an amount
equal
to 2.00 times his “base amount” (defined generally in the Internal Revenue
Code as his five-year average annual taxable compensation), subject
to
reduction to avoid the payment of any “excess parachute payment” under the
Internal Revenue Code, payable, at his election, in a lump sum or
in
monthly installments over a 24-month
period.
|
|
(7)
|
Represents
supplemental life insurance benefit under Mr. Heyer’s Executive Life
Insurance Agreement with the Bank.
|
|
(8)
|
Represents
the discounted present value of the estimated post-retirement payments
to
be paid to Mr. Heyer beginning at age 65 under the circumstances
indicated
pursuant to his SERP agreement, as described above under “Pension
Benefits.” As discussed under “Pension Benefits,” the
amount payable to Mr. Heyer under the change in control scenario
is
subject to reduction to the extent necessary to avoid the payment
of any
“excess parachute payments” under the Internal Revenue
Code.
|
|
(9)
|
Represents
the life insurance benefit paid under Mr. Heyer’s Life Insurance
Endorsement Method Split Dollar Plan Agreement with the Bank associated
with his SERP agreement.
|
Catherine
M. Bringuier
|
Termination
Scenario
|
|
Salary
Continuation
Under
Employment
Agreement
|
|
|
Continuation
of
Group
Health,
Life
and
Disability
Insurance
Coverage
|
|
|
Supplemental
Executive
Retirement
Benefit
|
|
|
Death
Benefit
|
|
|
Accelerated
Vesting
of
Stock
Options
|
|
|
Accelerated
Vesting
of
Restricted
Stock
|
|
|
Payment
of
299%
of
“Base
Amount”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination for cause occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
voluntary termination (not following a change in control)
occurs
|
|
|
---
|
|
|
|
---
|
|
|
|
$50,359
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause (not following a change in
control)
occurs
|
|
|
$144,130
|
(2)
|
|
|
$8,894
|
(3)
|
|
|
$50,359
|
(1)
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
involuntary termination without cause, or voluntary termination for
specified reasons, occurs following a change in control
|
|
|
---
|
|
|
|
---
|
|
|
|
$257,793
|
(8)
|
|
|
---
|
|
|
|
$182,275
|
(4)
|
|
|
$430,017
|
(5)
|
|
|
$314,998
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to disability
|
|
|
---
|
|
|
|
---
|
|
|
|
$50,359
|
(1)
|
|
|
---
|
|
|
|
$182,275
|
(4)
|
|
|
$430,017
|
(5)
|
|
|
---
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If
termination occurs due to death
|
|
|
---
|
|
|
|
---
|
|
|
|
$831,293
|
(9)
|
|
|
$432,390
|
(7)
|
|
|
$182,275
|
(4)
|
|
|
$430,017
|
(5)
|
|
|
---
|
|
____________________________
|
(1)
|
Represents
the benefit payable to Ms. Bringuier under the circumstances indicated
pursuant to her SERP agreement, as described above under “Pension
Benefits
|
|
(2)
|
Represents
the aggregate amount of salary that would continue to be paid to
Ms.
Bringuier pursuant to her employment agreement from the assumed employment
termination date (September 28, 2007) through the last day of the
term of
her employment agreement (December 31,
2008).
|
|
(3)
|
Represents
the estimated approximate cost to the Company of Ms. Bringuier obtaining
continued health, life and disability insurance benefits pursuant
to her
employment agreement.
|
|
(4)
|
Represents
the value of acceleration of unvested stock options, based on the
closing
price of the Company’s common stock on September 28, 2007 ($10.87) and the
exercise prices of the options. All unvested options vest upon
a change in control, regardless of Ms. Bringuier’s employment
status.
|
|
(5)
|
Represents
the value of acceleration of unvested restricted stock, based on
the
closing price of the Company’s common stock on September 28, 2007
($10.87). All unvested shares of restricted stock vest upon a
change in control, regardless of Ms. Bringuier’s employment
status.
|
|
(6)
|
Ms.
Bringuier’s employment agreement provides that if her employment is
involuntarily terminated without just cause, or voluntarily terminated
following a specified diminution in her duties, responsibilities
or
benefits, during the term of the agreement following a change in
control
of the Company or the Bank, or within 12 months following a change
in
control of the Company or the Bank, she will be entitled to an amount
equal to 2.00 times her “base amount” (defined generally in the Internal
Revenue Code as her five-year average annual taxable compensation),
subject to reduction to avoid the payment of any “excess parachute
payment” under the Internal Revenue Code, payable, at her election, in a
lump sum or in monthly installments over a 36-month
period.
|
|
(7)
|
Represents
supplemental life insurance benefit under Ms. Bringuier’s Executive Life
Insurance Agreement with the Bank.
|
|
(8)
|
Represents
the discounted present value of the estimated post-retirement payments
to
be paid to Ms. Bringuier beginning at age 65 under the circumstances
indicated pursuant to her SERP agreement, as described above under
“Pension Benefits.” As discussed under “Pension
Benefits,” the amount payable to Ms. Bringuier under the change in control
scenario is subject to reduction to the extent necessary to avoid
the
payment of any “excess parachute payments” under the Internal Revenue
Code.
|
|
(9)
|
Represents
the life insurance benefit paid under Ms. Bringuier’s Life Insurance
Endorsement Method Split Dollar Plan Agreement with the Bank associated
with her SERP agreement.
|
Compensation
Committee Report
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis contained above with management and, based on such review and
discussion, the Compensation Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this proxy
statement.
Submitted
by the Compensation Committee of the Company’s Board of Directors:
Robert
A. Gaccione
H.
Joseph North
W.
George Parker
Vincent
S. Rospond
James
H. Ward, III
Compensation
Committee Interlocks and Insider Participation
The
Compensation Committee during the year ended September 30, 2007 consisted of
Directors Gaccione, North, Obal (until his retirement effective August 21,
2007), Parker, Rospond and Ward. During the year ended September 30,
2007, the Company had no "interlocking" relationships in which (i) an executive
officer of the Company served as a member of the compensation committee of
another entity, one of whose executive officers served on the compensation
committee of the Company; (ii) an executive officer of the Company served as
a
director of another entity, one of whose executive officers served on the
compensation committee of the Company; and (iii) an executive officer of the
Company served as a member of the compensation committee of another entity,
one
of whose executive officers served as a director of the
Company. Directors Gaccione and Rospond had certain business
relationships with the Company that are described under "Certain Relationships
and Related Transactions."
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The
charter of the Audit Committee of the Company’s Board of Directors provides that
the Audit Committee is required to review all related party transactions for
potential conflict of interest situations and, as appropriate, approve such
transactions. Other than as disclosed below, no directors, officers
or their immediate family members were engaged in transactions with American
Bancorp of New Jersey, Inc., American Bank of New Jersey or any other subsidiary
of the Company involving more than $120,000 (other than through a loan with
the
Bank) during the fiscal year ended September 30, 2007.
Director
Vincent S. Rospond is the majority shareholder of the law firm of Rospond,
Rospond & Conte, P.A., which serves as general counsel to American Bank of
New Jersey and to which the Bank paid approximately $18,492 in legal fees during
the fiscal year ended September 30, 2007. In addition, the Bank
engages this law firm in connection with residential loan closings, and fees
paid by borrowers in loan closings handled by this law firm totaled
approximately $16,625 during fiscal 2007.
Director
Robert A. Gaccione is a senior partner of the law firm of Gaccione, Pomaco
&
Malanga, P.C. to which the Bank paid approximately $15,745 in legal fees during
the fiscal year ended September 30, 2007. In addition, the Bank
engages this law firm in connection with commercial loan closings, and fees
paid
by borrowers in loan closings handled by this law firm totaled approximately
$43,650 during fiscal 2007.
The
law
firms of Rospond, Rospond & Conte, P.A. and Gaccione, Pomaco & Malanga,
P.C. were each authorized to represent the Bank on loan closings
during fiscal 2007. Management believes that the
transactions
described above were on terms at least as favorable to the Bank as it would
have
received in transactions with an unrelated party.
The
Bank
makes loans to its officers, directors and employees in the ordinary course
of
business. The application fee is waived for mortgages to officers and
employees on single-family owner-occupied homes or second homes. The
Bank also reduces its application fee for mortgages on two- to four-family
owner-occupied homes by the amount of the application fee for single family
home
mortgages and reduces its modification fee for one- to four-family
owner-occupied home mortgages or second home mortgages by the amount of the
application fee for single family home mortgages. Other than these
application fee waivers and reductions to officers and employees, these loans
are on substantially the same terms and conditions as those of comparable
transactions prevailing at the time with other persons. These loans
also do not include more than the normal risk of collectibility or present
other
unfavorable features.
PROPOSAL
2
RATIFICATION
OF THE APPOINTMENT
OF
INDEPENDENT AUDITORS
The
Audit
Committee has appointed Crowe Chizek and Company LLC, as the independent public
accounting firm to audit the Company's financial statements for the fiscal
year
ending September 30, 2008. In making its determination to appoint
Crowe Chizek as the Company's independent auditors for the 2008 fiscal year,
the
Audit Committee considered whether the providing of services (and the aggregate
fees billed for those services) by Crowe Chizek, other than audit services,
is
compatible with maintaining the independence of the outside
accountants. Our shareholders are asked to ratify this appointment at
the annual meeting. If the appointment of Crowe Chizek is not
ratified by the shareholders, the Audit Committee may appoint other independent
auditors or may decide to maintain its appointment of Crowe Chizek.
A
representative of Crowe Chizek is expected to attend the meeting to respond
to
appropriate questions and will have an opportunity to make a statement if he
or
she so desires.
THE
BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THE
RATIFICATION OF THE APPOINTMENT OF CROWE CHIZEK AND COMPANY LLC AS INDEPENDENT
AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30,
2008.
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 main office at 365 Broad Street,
Bloomfield, New Jersey, no later than September 25, 2008. Any such proposals
shall be subject to the requirements of the proxy rules adopted under the
Securities and Exchange Act of 1934, as amended.
With
respect to a shareholder proposal to be considered for presentation at next
year’s annual meeting of shareholders, but not for inclusion in the Company’s
proxy materials for that meeting, written notice of the proposal must be
received at the Company’s main office at 365 Broad Street, Bloomfield, New
Jersey, at least sixty days prior to the anniversary of this year’s annual
meeting of shareholders (i.e., by December 28, 2008). The notice must
contain the information required by Article II, Section 15 of the Company’s
bylaws, including: (a) a brief description of the proposal and the shareholder’s
reasons for the proposal, (b) the name and address, as they appear on the
Company’s books, of the proposing shareholder and, to the extent known, any
other shareholders known by the proposing shareholder to be supporting the
proposal, (c) the class and number of
shares
of
the Company’s stock which are beneficially owned by the proposing shareholder on
the date of the notice and, to the extent known, by any other shareholders
known
by the proposing shareholder to be supporting the proposal on the date of the
notice, and (d) any financial interest of the proposing shareholder in the
proposal, other than interests which all shareholders would have. If
a shareholder proposal that is received by the Company after the deadline noted
above is voted on at the next annual meeting, the holders of the proxies for
that meeting will have the discretion to vote on the proposal in accordance
with
their best judgment and discretion, without any discussion of the proposal
in
the Company’s proxy materials for the next annual meeting.
OTHER
MATTERS
We
are
not aware of any business to come before the annual meeting other than those
matters described in this proxy statement. However, if any other
matter should properly come before the meeting, it is intended that holders
of
the proxies will act in accordance with their best judgment.
Appendix
A
JOINT
COMPENSATION COMMITTEE CHARTER
OF
AMERICAN
BANCORP OF NEW JERSEY, INC.
AND
AMERICAN
BANK OF NEW JERSEY
This
Compensation Committee Charter has been adopted by the Boards of Directors
of
American Bancorp of New Jersey, Inc. (the “Company”) and American Bank of New
Jersey (the “Bank”). The Committee shall act as a joint committee of
both Boards of Directors. The Compensation Committee shall review and
reassess this charter annually and recommend any proposed changes to the Board
for approval.
State
of Purpose
The
Committee’s purpose is to assist the Board in its review and approval of the
compensation of the directors and executive officers of the Company and the
Bank. The Committee shall also develop and assess corporate goals,
objectives and performance relevant to the compensation of the directors and
executive officers. The Committee shall also serve as fiduciary
and/or administrator of certain compensation or benefit plans as may be
necessary or required. The Committee may also have such other duties
as may from time to time be assigned to it by the Board.
Membership
The
membership of the Committee shall consist of all independent
directors. Applicable laws and regulations, including the regulations
of the Nasdaq National Market, as they may be amended from time to time, will
be
followed in evaluating a director’s independence.
Committee
members shall be elected annually by the Board of Directors. The
members of the Committee may designate a Chairperson by majority
vote. The Compensation Committee shall establish its own rules of
procedure, which shall be consistent with the Bylaws of the Company and this
Charter. The Committee Chairperson shall be responsible for
leadership of the Committee, including scheduling and presiding over meetings
and preparing agendas.
A
majority of the members of the Compensation Committee present in person or
by
means of a conference telephone or other communications equipment by means
of
which all persons participating in the meeting can hear each other shall
constitute a quorum. A majority vote of the Compensation Committee
members present at a meeting, if a quorum is present, shall constitute an act
of
the Compensation Committee. Any action required or permitted to be
taken at any meeting of the Compensation Committee may be taken without a
meeting if all members of the Compensation Committee consent thereto in writing,
and the writing or writings are filed with the minutes of the proceedings of
the
Compensation Committee. Following each of its meetings, the
Compensation Committee shall report its actions and recommendations to the
Board
of Directors of the Company and/or the Bank, as applicable.
Responsibilities
Although
the Committee may consider other duties from time to time, the general recurring
activities of the Committee in carrying out its function are described
below. The responsibilities of the Committee shall include, but not
be limited to:
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I.
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The
Committee shall review, establish and approve the Chief Executive
Officer’s compensation. In accordance with rules of the Nasdaq
National Market, the Chief Executive Officer shall not be present
during
the Committee’s voting on or deliberations of such matter. All
deliberations, actions and recommendation of the Committee relevant
to the
Chief Executive Officer shall be undertaken by the Committee in executive
session with the presence of the Chief Executive Officer. Any
other deliberations, actions or recommendations may be made in the
presence of, or take into consideration the recommendation of, the
Chief
Executive Officer or other executive
officers.
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II.
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The
Committee shall annually review and approve corporate goals and objectives
relevant to Chief Executive Officer compensation, evaluate the Chief
Executive Officer’s performance in light of those goals and objectives,
and recommend to the Board of Directors the Chief Executive Officer’s
compensation levels based on this evaluation. In determining
the incentive component of Chief Executive Officer compensation,
the
Committee will consider the Company’s performance and relative stockholder
return, the value of similar incentive awards to Chief Executive
Officer’s
at comparable companies, and the awards given to the Chief Executive
Officer in past years. The Committee’s review of compensation
levels and incentive compensation may include a review of compensation
surveys and data for similar companies in the industry, including
locally,
regionally and/or nationally.
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III.
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The
Committee, acting with the Chief Executive Officer and any other
officers
of the Company as the Committee shall request, shall recommend to
the
Board of Directors for its approve, the compensation of executive
officers
of the Company and the Bank as well as other officers of the Company
and
the Bank, whose compensation is to be set by the Board. The
Committee shall recommend: (a) the annual base salary level, (b)
the
annual incentive opportunity level, (c) employment agreements, severance
arrangements, and change in control agreements/provisions, in each
case
as, when and if appropriate, and (d) any special or supplemental
benefits,
including but not limited to, special life insurance benefits and
supplemental retirement agreements.
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All
Deliberations, actions and recommendations of the Committee relevant to the
Chief Executive Officer shall be undertaken by the Committee in executive
session without the presence of the Chief Executive Officer. Any
other deliberations, actions or recommendations may be made in the presence
of,
or take into consideration the recommendation of, the Chief Executive Officer
or
other executive officers.
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IV.
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The
Committee shall annually review, and make recommendations to the
Board
with respect to the compensation of directors, including incentive
compensation plans and equity-based
plans.
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V.
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Annual
review and make recommendations about changes to this charter or
the
activities or decision processes of the Compensation
Committee.
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VI.
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The
Committee shall annually review the Company’s disclosure reports and
materials filed with the Securities and Exchange Commission and
information mailed to the Company’s stockholders and make recommendations
for changes, if any, to the appropriate officer of the
company.
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The
Committee shall annually prepare a report for inclusion in the Company’s proxy
statement. Such report shall include all required elements specified by SEC
rules.
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VII.
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The
Committee shall serve as the fiduciary and/or administrator of any
compensation or benefit plan of the Company for which fiduciaries
consisting of members of the Boards of Directors are required by
law or by
the terms of the plan. In such capacity, it shall have and
exercise the power, authority and discretion conferred by law or
the terms
of the relevant plan, as
applicable.
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VIII.
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Any
other duties or responsibilities expressly delegated to the Committee
by
the Board from time to time.
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Resources
and Authority
The
Committee shall have the resources and authority appropriate to discharge its
duties and responsibilities, including the authority to select, retain,
terminate and approve the fees and other retention terms of special counsel
and
other experts or consultants as it deems appropriate, with seeking approval
of
the Board or management.
The
Committee shall have the authority to retain and terminate any compensation
consultant to be used to assist in the evaluation of director, Chief Executive
Officer or executive officer compensation and shall have authority to approve
the consultant’s fees and other retention terms.
Meetings
and Reports
The
Committee shall meet as frequently as the Committee considers necessary and
not
less than semi-annually. The Committee shall keep regular minutes of
its meetings and shall cause them to be recorded in books kept for that purpose
in the office of the Company.
Adopted
on December 20, 2005.
REVOCABLE
PROXY
AMERICAN BANCORP
OF NEW JERSEY, INC.
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PLEASE
MARK VOTES
AS IN THIS EXAMPLE
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ANNUAL
MEETING OF
SHAREHOLDERS
FEBRUARY 26, 2008
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The
undersigned hereby appoints the members of the Board of Directors
with
full powers of substitution, as attorneys and proxies for the undersigned,
to vote all shares of common stock of American Bancorp of New Jersey,
Inc., which the undersigned is entitled to vote at the Annual Meeting
of
Shareholders ("Meeting"), to be held at The Wilshire Grand Hotel,
350
Pleasant Valley Way, West Orange, New Jersey, on February 26, 2008,
at
8:30 a.m. local time and at any and all adjournments thereof. The
Board of
Directors recommends a vote
"FOR"
the listed
proposals.
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For
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With-
hold
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For All
Except
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1.
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The election as directors of all nominees
listed
below (except as marked to
the contrary below).
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Fred
G.
Kowal
Vincent S. Rospond
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INSTRUCTION:
To withhold
authority to vote for any individual nominee, mark "For All Except"
and
write that nominee's name in the space provided below.
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For
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Against
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Abstain
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2.
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The ratification of the appointment
of Crowe Chizek
and Company LLC
as auditors of American Bancorp
of New Jersey, Inc.
for the
fiscal year ending September 30, 2008.
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3.
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Such other matters that may properly
come
before the Meeting or any adjournments thereof.
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This
proxy, when properly executed, will be voted in the manner directed
herein
by the undersigned shareholder(s). If no direction is made, this
proxy
will be voted FOR each of the proposals set forth
herein.
Should a director nominee be
unable to serve as a director, an event that American Bancorp of
New
Jersey, Inc. does not currently anticipate, the persons named in
this
proxy reserve the right, in their discretion, to vote for a substitute
nominee designated by the Board of
Directors.
THIS
PROXY WILL BE VOTED AS
DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE
VOTED
FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE
MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN
THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO
OTHER BUSINESS TO BE PRESENTED AT THE
MEETING.
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AMERICAN BANCORP OF
NEW
JERSEY, INC.
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THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
This
Proxy may
be revoked at any time before it is voted by delivering to the Secretary
of American Bancorp of New Jersey, Inc., on or before the taking
of the
vote at the Meeting, a written notice of revocation bearing a later
date
than the proxy or a later dated proxy relating to the same shares
of
American Bancorp of New Jersey, Inc. common stock, or by attending
the
Meeting and voting in person. Attendance at the Meeting will not
in itself
constitute the revocation of a proxy. If this proxy is properly revoked
as
described above, then the power of such attorneys and proxies shall
be
deemed terminated and of not further force and
effect.
The
undersigned acknowledges receipt from American Bancorp of New Jersey,
Inc., prior to the execution of this Proxy, of the Notice of Annual
Meeting, a Proxy Statement and American Bancorp of New Jersey, Inc.'s
2007
Annual Report to Shareholders.
Please
sign exactly as your name appears on this proxy card. When signing
as an
attorney, executor, administrator, trustee or guardian, please give
your
full title. If shares are held jointly, only one signature is
required.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY
PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
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IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS
IN THE SPACE
PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
______________________________________________
______________________________________________
______________________________________________
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