SCHEDULE 14-A14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act ofPROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. ____))
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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 RuleCONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Ocean Financial Corp.
----------------------------------------------OCEAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified Inin Its Charter)
----------------------------------------------OCEAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee requiredrequired.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)(4) and 0-11
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set(Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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number, or the Form or Schedule and the date of its filing.
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OCEAN FINANCIAL CORP.
975 HOOPER AVENUE
TOMS RIVER, NEW JERSEY 08754-2009
(908) 240-4500
March 20, 1997
Fellow Shareholders:
You are cordially invited to attend the 1997 annual meeting of
shareholders (the "Annual Meeting") of Ocean Financial Corp. (the "Company"),
the holding company for Ocean Federal Savings Bank (the "Bank"), Toms River, New
Jersey, which will be held on April 24, 1997 at 10:00 a.m., Eastern Standard
Time, at the Crystal Point Yacht Club, 3900 River Road, at the intersection of
State Highway 70, Point Pleasant, New Jersey.
The attached Notice of the Annual Meeting and the Proxy Statement
describe the business to be transacted at the Annual Meeting. Directors and
officers of the Company as well as a representative of KPMG Peat Marwick LLP,
the Company's independent auditors, will be present at the Annual Meeting to
respond to any questions that our shareholders may have regarding the business
to be transacted.
The Board of Directors of Ocean Financial Corp. has determined that
matters to be considered at the Annual Meeting are in the best interests of the
Company and its shareholders. FOR THE REASONS SET FORTH IN THE PROXY STATEMENT,
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE NOMINEES AS
DIRECTORS SPECIFIED UNDER PROPOSAL 1 AND "FOR" PROPOSAL 2, THE RATIFICATION OF
AUDITORS.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOUR
COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST BE
REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE
CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of the
Company and the Bank, I thank you for your continued interest and support.
Sincerely yours,
/s/ John R. Garbarino
John R. Garbarino
Chairman of the Board, President
and Chief Executive Officer-----------------------------------------------------------------------
Notes:
OCEAN FINANCIAL CORP.
975 HOOPER AVENUE
TOMS RIVER, NEW JERSEY 08754-2009
----------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 199723, 1998
----------------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of Ocean Financial Corp. (the "Company"), the holding company for
Ocean Federal Savings Bank (the "Bank"), will be held on April 24, 199723, 1998 at 10:00
a.m., Eastern Standard Time, at the Crystal Point Yacht Club, 3900 River Road, at the intersection of
State Highway 70, Point Pleasant, New Jersey.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of three directors to a three-year term of office.
2. The ratification of the Amended and Restated Ocean Financial Corp.
1997 Incentive Plan ("Plan").
3. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1997;1998; and
3.4. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
The Board of Directors has established March 14, 1997,2, 1998, as the record date
for the determination of shareholders entitled to receive notice of and to vote
at the Annual Meeting and at any adjournments thereof. Only record holders of
the common stock of the Company as of the close of business on such record date
will be entitled to vote at the Annual Meeting or any adjournments thereof. In
the event there are not sufficient votes for a quorum or to approve the
foregoing proposals at the time of the Annual Meeting, the Annual Meeting may be
adjourned in order to permit further solicitation of proxies by the Company. A
list of shareholders entitled to vote at the Annual Meeting will be available at
Ocean Financial Corp., 975 Hooper Avenue, Toms River, New Jersey 08754-2009, for
a period of ten days prior to the Annual Meeting and will also be available at
the Annual Meeting itself.
By Order of the Board of Directors
/s/ John K. Kelly
-------------------
John K. Kelly
Corporate Secretary
Toms River, New Jersey
March 20, 199719, 1998
OCEAN FINANCIAL CORP.
-----------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 199723, 1998
-----------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to shareholders of Ocean Financial
Corp. (the "Company") in connection with the solicitation by the Board of
Directors ("Board(the "Board of Directors" or "Board") of proxies to be used at the
annual meeting of shareholders (the "Annual Meeting"), to be held on April 24,
1997,23,
1998, at 10:00 a.m., Eastern Standard Time, at the Crystal Point Yacht Club, 3900 River Road, at the
intersection of State Highway 70, Point Pleasant, New Jersey, and at any
adjournments thereof. The 19961997 Annual Report to Stockholders, including the
consolidated financial statements for the fiscal year ended December 31, 1996,1997,
accompanies this Proxy Statement which is first being mailed to record holders
on or about March 20, 1997.19, 1998.
Regardless of the number of shares of common stock owned, it is important
that record holders of a majority of the shares be represented by proxy or in
person at the Annual Meeting. Shareholders are requested to vote by completing
the enclosed proxy card and returning it signed and dated in the enclosed
postage-paid envelope. Shareholders are urged to indicate their vote in the
spaces provided on the proxy card. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
OF THE COMPANY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN.
WHERE NO INSTRUCTIONS ARE INDICATED, SIGNED PROXY CARDS WILL BE VOTED "FOR" THE
ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT, "FOR" THE
RATIFICATION OF THE AMENDED AND RESTATED OCEAN FINANCIAL CORP. 1997 INCENTIVE
PLAN ("PLAN"), AND "FOR" THE RATIFICATION OF KPMG PEAT MARWICK LLP AS
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
1997.1998.
Other Than The Matters Listed On The Attachedthan the matters listed on the attached Notice Ofof Annual Meeting Ofof
Shareholders, Thethe Board Ofof Directors Knows Of No Additional Matters
That Will Be Presented For Consideration At Theknows of no additional matters that will be
presented for consideration at the Annual Meeting. EXECUTION OF A PROXY,
HOWEVER, CONFERS ON THE DESIGNATED PROXY HOLDERS DISCRETIONARY AUTHORITY TO VOTE
THE SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT ON SUCH OTHER BUSINESS, IF
ANY, THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND AT ANY ADJOURNMENTS
THEREOF, INCLUDING WHETHER OR NOT TO ADJOURN THE ANNUAL MEETING.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote personally at the
Annual Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Kissel-BlakeKissel-
Blake Inc., a proxy solicitation firm, will assist the Company in soliciting
proxies for the Annual Meeting and will be paid a fee of $3,500, plus out-of-pocketout-of-
pocket expenses. Proxies may also be solicited personally or by telephone by
directors, officers and other employees of the Company and its subsidiary, Ocean
Federal Savings Bank (the "Bank"), without additional compensation therefor.
The Company will also request persons, firms and corporations holding shares in
their names, or in the name of their nominees, which are beneficially owned by
others, to send proxy material to, and obtain proxies from, such beneficial
owners, and will reimburse such holders for their reasonable expenses in doing
so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual Meeting, except as
described below.
The close of business on March 14, 1997,2, 1998, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Annual Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 9,059,1247,767,067 shares.
As provided in the Company's Certificate of Incorporation, for quorum
purposes, holders of Common Stock who beneficially own in excess of 10% of the
outstanding shares of Common Stock (the "Limit") are not entitled to any vote in
respect of the shares held in excess of the Limit and are not treated as
outstanding for voting purposes. A person or entity is deemed to beneficially
own shares owned by an affiliate of, as well as, by persons acting in concert
with, such person or entity. The Company's Certificate of Incorporation
authorizes the Board of Directors (i) to make all determinations necessary to
implement and apply the Limit, including determining whether persons or entities
are acting in concert, and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit to supply information to
the Company to enable the Board of Directors to implement and apply the Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Annual
Meeting. In the event that there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to the election of directors, the proxy card being provided by the Board
of Directors enables a shareholder to vote "FOR" the election of the nominees
proposed by the Board, or to "WITHHOLD" authority to vote for one or more of the
nominees being proposed. Under Delaware law and the Company's Bylaws, directors
are elected by a plurality of votes cast,
2
without regard to either (i) broker non-votes or (ii) proxies as to which
authority to vote for one or more of the nominees being proposed is withheld.
As to the proposed ratification of the Plan submitted for shareholder
action set forth in Proposal 2, the proxy card being provided by the Board of
Directors enables a shareholder to check the appropriate box on the proxy card
to (i) vote "FOR" the Proposal; (ii) vote "AGAINST" the Proposal; or (iii)
"ABSTAIN" from voting on such item. Under Delaware law, an affirmative vote at
the Annual Meeting at which a quorum is present of the holders of a majority of
the shares of Common Stock present in person or by proxy and entitled to vote on
the Proposal is required to constitute shareholder ratification of the Proposal.
Shares as to which the "ABSTAIN" box has been selected on the proxy card with
respect to the proposal will be counted as present and entitled to vote and have
the effect of a vote against the matter for which the "ABSTAIN" box has been
selected. In contrast, shares underlying broker non-votes are not counted as
presented and entitled to vote on the Proposal and have no effect on the vote on
the Proposal.
As to the ratification of KPMG Peat Marwick LLP as independent auditors of
the Company and all other matters that may properly come before the Annual
Meeting, by checking the appropriate box, a shareholder may: (i) vote "FOR" the
item; (ii) vote "AGAINST" the item, or (iii) "ABSTAIN" from voting on such item.
Under the Company's Bylaws, unless otherwise
2
required by law, all such matters
shall be determined by a majority of the votes cast, without regard to (a)
broker non-votes, or (b) proxies marked "ABSTAIN" as to that matter.
Proxies solicited hereby are to be returned to the Company's transfer
agent, American Stock Transfer & Trust Company ("ASTT"). The Board of Directors
has designated ASTT to act as inspectors of election and tabulate the votes at
the Annual Meeting. ASTT is not otherwise employed by, or a director of, the
Company or any of its affiliates. After the final adjournment of the Annual
Meeting, the proxies will be returned to the Company.Company for safekeeping.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
received to date regarding such ownership filed by such persons with the Company
and with the Securities and Exchange Commission ("SEC"), in accordance with
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended
("Exchange Act"). Other than those persons listed below, the Company is not
aware of any person, as such term is defined in the Exchange Act, that owns more
than 5% of the Company's Common Stock as of the Record Date.
3
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS
-------------- --------------------------------------------------- ----------------- ----------------- -------------------- ------------------------------------------ --------------- -------------
Common Stock Ocean Federal Savings Bank Employee 669,666 (1) 8.44%
Stock Ownership 671,046(1) 7.40% Plan ("ESOP")
975 Hooper Avenue
Toms River, New Jersey 08753-839608754-2009
Common Stock Ocean Federal Foundation 642,546(2) 7.09%624,046 (2) 7.86%
975 Hooper Avenue
Toms River, New Jersey 08753-839608754-2009
Common Stock Wellington Management Co. LLP 476,700 5.26%
75 State Street
Boston, Massachusetts 02109Newburger & Berman 406,900 (3) 5.13%
605 Third Avenue
New York, New York 10158
- ----------------------------_____________________
(1) Shares of Common Stock were acquired by the ESOP in the Bank's conversion
from mutual to stock form of organization (the "Conversion"). The ESOP
Committee administers the ESOP. Corestates Bank, N.A. has been appointed as
theThe trustee for the ESOP ("ESOP Trustee"). The ESOP Trustee must vote all
allocated shares held in the ESOP in accordance with the instructions of the
participants. AtOn March 14, 1997, 55,73219, 1998, 126,034 shares had been allocated under
the ESOP and 615,314543,632 shares remain unallocated. Under the ESOP, unallocated
shares and allocated shares as to which voting instructions are not given by
participants are to be voted by the ESOP Trustee in a manner calculated to
most accurately reflect the instructions received from participants
regarding the allocated stock so long as such vote is in accordance with the
fiduciary provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
(2) Ocean Federal Foundation (the "Foundation") was established and funded by
the Company in connection with the Bank's Conversionconversion from mutual to stock
form (the "Conversion") with an amount of the Company's Common Stock equal
to 7.4% of the total amount of Common Stock issued in the Conversion. The
Foundation is a Delaware non-stock corporation and is dedicated to
charitable purposes within Ocean County, New Jersey and its neighboring
communities. The Foundation is governed by a board of directors with 1318
members, nine of whom are civic or community leaders in the Bank's local
community who are not affiliated with the Company or the Bank, or their
officers, directors and employees. The remaining fournine members of the
Foundation's board of directors are directors of the Company and the Bank.
Pursuant to the terms of the contribution of Common Stock, as mandated by
the Office of Thrift Supervision, all shares of Common Stock held by the
Foundation must be voted in the same ratio as all other shares of the
Company's Common Stock on all proposals considered by stockholders of the
Company.
3(3) Based upon a representation to the Company by the beneficial owners as of
the Record Date.
4
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL I. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of nine (9)
directors and is divided into three classes. Each of the nine members of the
Board of Directors also presently serves as a director of the Bank. Directors
are elected for staggered terms of three years each, with the term of office of
only one of the three classes of directors expiring each year. Directors serve
until their successors are elected and qualified.
The three nominees proposed for election at the Annual Meeting are Carl Feltz, Jr., RobertMichael
E. KnemollerBarrett, Donald E. McLaughlin and Diane F. Rhine.James T. Snyder. No person being nominated
as a director is being proposed for election pursuant to any agreement or
understanding between any such person and the Company.
In the event that any such nominee is unable to serve or declines to serve
for any reason, it is intended that proxies will be voted for the election of
the balance of those nominees named and for such other persons as may be
designated by the present Board of Directors. The Board of Directors has no
reason to believe that any of the persons named will be unable or unwilling to
serve. UNLESS AUTHORITY TO VOTE FOR THE DIRECTORS IS WITHHELD, IT IS INTENDED
THAT THE SHARES REPRESENTED BY THE ENCLOSED PROXY CARD WILL BE VOTED "FOR" THE
ELECTION OF ALL NOMINEES PROPOSED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
NAMED IN THIS PROXY STATEMENT.
INFORMATION WITH RESPECT TO NOMINEES, CONTINUING DIRECTORS AND CERTAIN EXECUTIVE
OFFICERS
The following table sets forth, as of the Record Date, the names of
nominees and continuing directors and the Named Executive Officers (as defined
below), their ages, a brief description of their recent business experience,
including present occupations and employment, the year in which each became a
director of the Bank and the year in which their terms (or, in the case of
nominees, their proposed terms) as director of the Company expire. This table
also sets forth the amount of Common Stock and the percent thereof beneficially
owned by each director and all directors and executive officersNamed Executive Officers as a group
as of the Record Date.
4
AMOUNT AND OWNERSHIP
EXPIRATION NATURE OF AS A
NAME AND PRINCIPAL OCCUPATION OF DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
PRESENT AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP(2) CLASS
- ----------------------------------------- ----- ------------ -------------- ------------------- ------------
NOMINEES
Carl Feltz, Jr. 58 1990 2000 1,700(3)(4) .02%
Principal, Feltz Associates,
Architects.
Robert E. Knemoller 67 1982 2000 4,850(3)(4) .05
Retired, Former Executive
Officer of the Bank.
Diane F. Rhine 47 1997 2000 2,500(4)(5) .03
President/Owner of Citta
& Cobb, Inc., Realtors.
CONTINUING DIRECTORS
Michael E. Barrett 57 1989 1998 9,741(6)(7) .11
Executive Vice President
of the Bank.
Thomas F. Curtin 65 1991 1999 10,000(3)(4) .11
Partner, The Foristall
Company, Inc., an investor
relations firm.
John R. Garbarino 47 1984 1999 17,385(6)(7) .19
Chairman of the Board,
President and Chief Executive
Officer of the Company and the Bank.
Donald E. McLaughlin 49 1985 1998 2,000(3)(4) .02
President, Donald E.
McLaughlin, CPA, P.C.
Frederick E. Schlosser 74 1968 1999 8,750(3)(4) .10
Retired, former Vice
President for Steinbach's
department stores.
James T. Snyder 62 1991 1998 10,000(3)(4) .11
Retired, Former 50% owner
of Wallach's Inc., a New
Jersey retail company.
5
AMOUNT AND OWNERSHIP
EXPIRATION NATURE OF AS A
NAME AND PRINCIPAL OCCUPATION AT DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
PRESENT AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP(2) CLASSCLASS(9)
- ------------------------------------------ ---------- ----------------------------------------------- ----- ------------ ----------- ----------------- -------------------- -------------------------
NOMINEES
Michael E. Barrett 58 1989 2001 47,188 (6)(7) .59%
Executive Vice President of the Bank
Donald E. McLaughlin 50 1985 2001 23,089 (3)(4) .29%
President, Donald E. McLaughlin, CPA, P.C.
James T. Snyder 63 1991 2001 31,089 (3)(4) .39%
Retired, Former 50% owner of
Wallach's Inc., a New Jersey
retail company.
CONTINUING DIRECTORS
Thomas F. Curtin 66 1991 1999 31,089 (3)(4) .39%
Partner, The Foristall
Company, Inc., an investor
relations firm.
John R. Garbarino 48 1984 1999 143,561 (6)(7) 1.81%
Chairman of the Board
President and Chief Executive
Officer of the Company and the Bank
Frederick E. Schlosser 75 1968 1999 29,839 (3)(4) .38%
Retired, former Vice President
for Steinbach's department
stores.
Carl Feltz, Jr.
Principal, Feltz Associates, 59 1990 2000 22,789 (3)(4) .29%
Architects
Robert E. Knemoller 68 1982 2000 25,939 (3)(4) .33%
Retired, former Executive
Officer of the Bank
Diane F. Rhine 48 1997 2000 12,805 (4)(5) .16%
President/Owner of Citta &
Cobb, Inc., Realtors
6
AMOUNT AND OWNERSHIP
EXPIRATION NATURE OF AS A
NAME AND PRINCIPAL OCCUPATION AT DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
PRESENT AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNERSHIP(2) CLASS(9)
- ---------------------------------- ----- ------------ ----------- ----------------- -----------
NAMED EXECUTIVE OFFICER
(who are not also directors)OFFICERS
(WHO ARE NOT ALSO DIRECTORS)
Karl E. Reinheimer 4950 -- -- 317(6)25,578 (6)(7) *%.32%
Executive Vice President and
Chief Operating Officer of
the Bank, formerly Vice President
of Summit Bank.
Michael J. Fitzpatrick 4142 -- -- 10,613(6)54,553 (6)(7) .12.69%
Executive Vice President and
Chief Financial Officer of the
Company and Bank.
John K. Kelly 4748 -- -- 13,053(6)36,604 (6)(7) .14.46%
Senior Vice President and
Corporate Secretary of the
Company. Senior Vice President
and General Counsel of Bank.
All directors and executive officers
as a group (12 persons).................................... -- -- -- 90,909(8) 1.00%484,123 (8) 6.10%
- -----------------------
* Less than .01%._______________________
(1) Includes years of service as a director of the Bank.
(2) Each person effectively exercises sole (or shared with spouse or other
immediate family members) voting and dispositive power as to shares reported.reported as of the
Record Date.
(3) ExcludesIncludes 14,379 shares awarded to each outside director, other than Ms.
Rhine, under the Ocean Financial Corp. 1997 Incentive Plan (the "Incentive
Plan"). Awards to these directors under the Incentive Plan vestbegan vesting at
a rate of 20% per year commencing on February 4, 1998; provided, however,
that 25% of the third annual installment, and 50% of each of the fourth and
fifth annual installments will only vest if the performance criteria to be
established by the Compensation Committee (as defined below) is satisfied.
Each participant will havehas voting power as to the shares awarded.
(4) Excludes 33,55226,842 options granted to each outside director under the Incentive
Plan.Plan which have not yet vested. Options granted pursuant to the Incentive
Plan becomebecame exercisable at a rate of 20% per year commencing on February 4,
1998, except for Ms. Rhine whose options becomebecame exercisable at a rate of 20%
per year commencing February 19, 1998. Includes 6,710 options granted to
each outside director under the Incentive Plan's vesting schedule effective
February 4, 1998.
(5) ExcludesIncludes 3,595 shares awarded to Ms. Rhine under the Incentive Plan, upon
her appointment as a director of the Company, which
vestbegan vesting at a rate of 20% per year commencing on February 19, 1998;
provided, however, that 25% of the third annual installment, and 50% of each
of the fourth and fifth annual installments will only vest if the
performance criteria to be established by the Compensation Committee is
satisfied. Ms. Rhine will
havehas voting power as to the shares awarded.
(6) ExcludesIncludes 83,881, 26,842, 10,066, 26,842 and 16,776 shares awarded to Messrs.
Garbarino, Barrett, Reinheimer, Fitzpatrick, and Kelly, respectively, under
the Incentive Plan. Awards to officers under the Incentive Plan vestbegan
vesting at a rate of 20% per year beginning on February 4, 1998; provided,
however, that 25% of the third annual installment, and 50% of each of the
fourth and fifth annual installments will only vest if the performance
criteria to be established by the Compensation Committee is satisfied. Each
participant will havehas voting power as to the shares awarded.
(7) Excludes 201,314, 41,940, 75,493, 75,493161,051, 33,552, 60,394, 60,394 and 25,16420,131 options granted to
Messrs. Garbarino, Barrett, Reinheimer, Fitzpatrick, and Kelly,
respectively.respectively, which have not yet vested. Options granted pursuant to the
Incentive Plan becomebecame exercisable at a rate of 20% per year commencing on
February 4, 1998. See "Executive Compensation - Incentive Plan." Includes
40,263, 8,388, 15,099, 15,099 and 5,033 options vested to Messrs. Garbarino,
Barrett, Reinheimer, Fitzpatrick and Kelly, respectively, under the
Incentive Plan's vesting schedule effective February 4, 1998.
(8) ExcludesIncludes a total of 254,276 shares awarded under the Incentive Plan. NoPlan and
excludes 523,416 options granted under the Incentive Plan which are not
currently exercisable.
6(9) For purposes of calculating the ownership as a percent of shares outstanding
as of the Record Date all presently exercisable options have been added to
the outstanding Common Stock.
7
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company conducts its business through
meetings of the Board of Directors and through activities of its committees.
The Board of Directors of the Company generally meets on a quarterly basis and
may have additional meetings as needed. During 1996,1997, the Board of Directors of
the Company, which was formed on November 21, 1995, held five meetings primarily
related to organizational and other matters in connection with the formationten meetings. All
Directors attended at least 75% of the Company and the acquisition of the Bank during Conversion. All of the
directors of the Company attended 100% of the total number of the Company's
Board meetings held and committee meetings on which such directors served during
1996.meetings. The Board of Directors of the
Company maintains committees, the nature and composition of which are described
below:
AUDIT COMMITTEE. The Audit Committee of the Company and the Bank consists
of Messrs. McLaughlin, Knemoller and Schlosser. This committee generally meets
on a quarterly basis and is responsible for the review of the audit and loan
review reports and management actions regarding the implementation of audit
findings. The Bank's Internal Auditor and Loan Review Officer report to this
committee, and the committee also maintains a liaison with outside auditors and
reviews the adequacy of internal controls. The Audit Committee of the Company
and the Bank met fourfive times in 1996.1997.
NOMINATING COMMITTEE. The Company's Nominating Committee for the 19971998
Annual Meeting consists of Messrs. Barrett, McLaughlinGarbarino, Schlosser and Snyder.Curtin. The
committee considers and recommends the nominees for director to stand for
election at the Company's annual meeting of shareholders. The Company's
Certificate of Incorporation and Bylaws provide for shareholder nominations of
directors. These provisions require such nominations to be made pursuant to
timely notice in writing to the Secretary of the Company. The shareholder's
notice of nomination must contain all information relating to the nominee which
is required to be disclosed by the Company's Bylaws and by the Exchange Act.
See "Additional Information - Notice of Business to be Conducted at an Annual
Meeting." The Nominating Committee met one time in 1996 and three times in early 1997.
HUMAN RESOURCES/COMPENSATION COMMITTEE. The Human Resources/Compensation and Benefits
Committee of the Company and the Human Resources/Compensation Committee of the Bank (collectively, the(the "Compensation Committee") consists of
Messrs. Knemoller, Schlosser and Curtin. The Compensation Committee meets to
establish compensation for the executive officers, and to review the incentive
compensation programs when necessary. The Compensation Committee is also
responsible for establishing certain guidelines and limits for compensation and
benefit programs for other salaried officers and employees of the Company and
the Bank. See "Executive Compensation - Compensation Committee Report on
Executive Compensation." The Compensation Committee of the Company and the Bank
met fourtwo times in 1996.
7
1997.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Currently, all outside directors of the Bank and the
Company receive an annual retainer of $15,000 for service on the Bank's Board
and $5,000 for service on the Company's Board. All fees are paid to directors
quarterly. Outside directors of the Bank also receive a fee of $900 for each
regular board meeting attended and $300 for each committee meeting attended.
Committeeattended;
however, committee chairmen receive $500 per committee meeting attended.
8
The Bank's directors are also provided with medical and dental insurance for
which they contribute part of the cost of coverage.
DEFERRED COMPENSATOINCOMPENSATION PLAN FOR DIRECTORS. The Bank maintains a deferred
compensation plan for the benefit of outside directors. The plan is a non-qualifiednon-
qualified arrangement which offers participating directors the opportunity to
defer compensation through a reduction in fees in lieu of a promise of future
benefits. Such benefits are payable commencing at an age mutually agreed upon by
the Bank and the participating director (the "Benefit Age"). The benefits equal
the account balance of the director annuitized over a period of time mutually
agreed upon by the Bank and the director, and then reannuitized at the beginning
of each calendar year thereafter. Lump sum payouts are also available upon
eligibility for distribution of benefits or in the event of the death of the
director. The account balance equals deferrals and interest. Currently the plan
credits interest on deferrals at a rate equal to the sum of (i) the "Stable
Fund" investment option in the Bank's qualified 401(k) plan plus (ii) 200 basis
points. The plan offers a death benefit which may be funded through the proceeds
of Corporate Owned Life Insurance and is equal to the estimated benefit which
would have been payable if the director had participated in the plan for the
entire period up to the Benefit Age. Early distribution of benefits may occur
under certain circumstances which include, change in control, financial
hardship, termination for cause or disability.
INCENTIVE PLAN. Under the Incentive Plan maintained by the Company, each
director who is not an officer or employee of the Company or Bank, other than
Diane F. Rhine who was not a director at the time of the original grant,
received non-statutory options to purchase 33,552 shares of common stock at an
exercise price of $28.82, which was the fair market value of the shares on the
date of grant (February 4, 1997) as defined under the Incentive Plan and an
award of 14,379 shares of Common Stock. Ms. Rhine received non-statutory
options to purchase 33,552 shares of Common Stock at an exercise price of
$30.00, which was the fair market value on the date of grant (February 19, 1997)
and an award of 3,595 shares of Common Stock (collectively, the "Directors'
Awards"). The Incentive Plan was approved by shareholders on February 4, 1997.
The Directors' Awards granted under the Incentive Plan will vest over a five year
period, at a rate of 20% each year commencing one year from the date of grant;
provided, however, that 25% of the third annual installment, and 50% of each of
the fourth and fifth annual installments will only vest if the performance
criteria to be established by the Compensation Committee is satisfied. All
Directors' Awards will immediately vest upon death or disability. On or after July 2, 1997, theThe Board of
Directors intends to amendhas amended the Directors' AwardsPlan to provide for acceleration of the vesting of
such awards upon a change in control of the Company or the Bank (as defined in
the Incentive Plan)(See Proposal 3). All options granted under the Incentive
Plan expire in 10
8
years following the date of grant. When share awards vest and
are distributed, the recipients will also receive an amount equal to accumulated
cash and stock dividends (if any) with respect thereto, plus earnings thereon.
EXECUTIVE COMPENSATION
The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this
9
proxy statement into any filing under the Securities Act of 1933, as amended
(the "Securities Act") or the Exchange Act, except as to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. Under rules
established by the SEC, the Company is required to provide certain data and
information in regard to the compensation and benefits provided to the Company's
Chief Executive Officer and other executive officers of the Company. The
disclosure requirements for the Chief Executive Officer and other executive
officers include the use of tables and a report explaining the rationale and
considerations that led to fundamental compensation decisions affecting those
individuals. In fulfillment of this requirement, the Human
Resources/Compensation and Benefits Committee (the "Compensation Committee" or "Committee"),
at the direction of the Board of Directors, has prepared the following report
for inclusion in this proxy statement.
Compensation Policies. The Compensation Committee is responsible for
administering the compensation and benefit program for the Company's and the
Bank's employees including the executive officers. The Committee annually
reviews and evaluates base salary and annual bonus recommendations made for
executive officers by the Chief Executive Officer (other than for himself) along
with the rationale for such recommendations. The Committee also approves the
compensation for the President and Chief Executive Officer ("CEO"), who does not
participate in the Committee's decision as to his compensation package. In
establishing compensation levels, the Committee considers the Company's overall
objectives and performance, peer group comparisons and individual performance.
The Committee has adopted the following goals in establishing executive
compensation: (1) attracting, retaining and rewarding highly qualified and
productive persons; (2) relating compensation to both Company and individual
performance; (3) establishing compensation levels that are internally equitable
and externally competitive; and (4) to provideproviding motivation for the executive
officers to enhance shareholder value by linking compensation to the performance
of the Company's Common Stock.
The Company's compensation program for executive officers consists of (1) a
base salary, (2) a performance-based annual bonus, and (3) periodic grants of
stock awards and stock options. In addition, executive officers may participate
in other benefit plans available to all employees, including the Employee Stock
Ownership Plan and the 401(K) Plan. To the extent that benefits
9
under these
plans are limited by Internal Revenue Code restrictions, the Bank makes the
Executive whole through the Supplemental Executive Retirement Plan.
Base Salaries. Salary levels are intended to be consistent and competitive
with the practices of comparable financial institutions, and each executive's
level of responsibility. The Committee reviewed surveys of compensation paid to
executive officers performing similar duties for depository institutions and
their holding companies with particular focus on the level of compensation paid
by comparable institutions in New Jersey and the Mid-Atlantic region. The
surveys primarily used by the Committee were the 19951997 SNL Executive Compensation
10
Review for ThriftsThrift Institutions and the 19951997 SNL Executive Compensation Review
for Commercial Banks.
Although the Compensation Committee's recommendations are discretionary and
no specific formula is used for decision making, salary increases are aimed at
reflecting the overall performance of the Company and the performance of the
individual executive officer.
Annual Incentive. Under the Performance Achievement Award Program, a
significant portion of each executive officer's annual compensation is
contingent on the financial performance of the Company and the Bank. The
program compares actual performance against targets which are approved by the
Committee at the beginning of each year. The bonus targets are weighed between
individual objectives and the Company's success in achieving its budgetedaggressive
financial goals. The annual incentive program is based upon the relative
achievement of the predetermined bankwideCompany-wide goals as determined on an annual
basis supplemented by individual goals (generally subjective in nature). The
weighting of the performance and individual goals depends on the position of the
executive. This program is discussed further below under "Chief Executive
Officer."
Long Term Incentive Compensation. On February 4, 1997, shareholders of the
Company approved the 1997 Incentive Plan under which executive officers received
stock awards and options. Awards to executive officers under the Incentive Plan
vest at a rate of 20% per year; provided, however, that 25% of the third annual
installment, and 50% of each of the fourth and fifth annual installments will
only vest if the performance criteria to be established by the Committee is
satisfied. The specific grants and awards for executive officers are reflected
in the "Summary Compensation Table" and in the "Option Grants in Last Fiscal
Year" Table. The Committee believes that stock ownership by executive officers
is a significant incentive in building stockholder value and aligning the
interests of employees with those of stockholders. Stock options and stock
awards under such plans were allocated by the Committee based upon regulatory
practices and policies, the practices of other recently converted financial
institutions as verified by external surveys and based upon the executive
officers' level of responsibility and contributions to the Company and the Bank.
The Committee takes into account the outstanding stock incentives when
determining overall compensation.
Chief Executive Officer. The Chief Executive Officer was evaluated for the
successful level of the Company's and the Bank's operational and administrative
changes during 19961997 taking into account both subjective performance criteria and
certain objective performance measures. 10
Mr. Garbarino's salary for 19961997 of
$325,000 was increased to $325,000, primarily as a result
of the conversionunchanged from the mutual to stock form of ownership. The Committee
determined that such form of ownership places significantly greater demands and
expectations on the CEO position. In addition, other performance1996. Performance measures evaluated by the
Committee in determining the compensation of the Chief Executive Officer
included the creationadoption and execution of a revised strategic business plan
developed in conjunction withcapital management strategies; the
plansuccessful execution of conversionthe Company's Business Plan; and the continued operation
of the Bank in a safe and sound manner. Mr. Garbarino's base salary isremains at
the median level as compared to other institutions in the peer group survey.
Consistent with the Bank'sCompany's policy of linking compensation and
performance, Mr. Garbarino participated in a formal annual incentive program
which was first adopted for the
11
Bank's officers in 1993. Awards made under the Incentive Program are based upon
the relative achievement of a predetermined bankwideCompany-wide goal for annual return
on assets (excluding nonrecurring items)average equity supplemented by individual goals (generally subjective in
nature) agreed to at the beginning of each year. These goals are structured with
a target level determined by the Committee, a threshold level which must be
attained to fund any award and a superior level that is above target and tied to
a maximum award opportunity. Mr. Garbarino's award is weighted so that 75% of
the award is determined by the Bank-wideCompany-wide performance goal and 25% of the
award is determined by individual goals. The total award earned by Mr. Garbarino
for fiscal year 19961997 of $92,930$103,441 represented 114%91% of his targeted award amount
based upon both actual Company performance measured against the aggressive goals
established at the start of the year as well as the Committee's evaluation of
Mr. Garbarino's performance.individual goal attainment.
In addition, Mr. Garbarino has been granted 201,314 options and awarded
83,881 shares under the Company's 1997 Incentive Plan, which will vestbegan vesting at a
rate of 20% per year beginning on February 4, 1998. The awards were made consistent with
the criteria stated under "Long Term Incentive Compensation."
Although certain quantitative and qualitative factors were reviewed to
determine the Chief Executive Officer's compensation (as well as that of all
executive officers), no specific formula was utilized in the Committee's
decisions nor did the Committee establish a direct link between base salary
levels and the Bank'sCompany's performance.
The goal of the above referenced compensation policies, as implemented by
the Committee, is to be certain that all executives are compensated consistent
with the above guidelines. Compensation levels will be reviewed as frequently
as necessary to ensure this result.
THE COMPENSATION COMMITTEE
ROBERT E. KNEMOLLER FREDERICK E. SCHLOSSER
THOMAS F. CURTIN
1112
STOCK PERFORMANCE GRAPH. The following graph shows a comparison of total
stockholder return on the Company's Common Stock, based on the market price of
the Common Stock with the cumulative total return of companies on The Nasdaq
Stock Market (U.S.) Index and the SNL Thrift Index for the period beginning on
July 3, 1996, the day the Company's Common Stock began trading, through December
31, 1996. The graph was derived from a very limited period of
time, and, as a result, may not be indicative of possible future performance of
the Company's Common Stock.
CUMULATIVE1997.
CUMMULATIVE MONTHLY RETURN AMONG OCEAN
FINANCIAL CORP. COMMON STOCK, ALL NASDAQ
U.S. STOCKS AND SNL THRIFT INDEX
[GRAPH[STOCK PERFORMANCE GRAPH APPEARS HERE]
Summary
07/02/96 09/30/96 12/31/96
-------- -------- --------
Ocean Financial Corp. 100.00 119.37 127.50
All Nasdaq U.S.
Summary
07/02/96 09/30/96 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97
-------- -------- -------- ------- ------- ------- --------
Ocean Financial Corp. 100.00 119.37 127.50 138.40 177.35 179.60 189.50
All Nasdaq US Stocks 100.00 103.03 108.09 102.28 121.03 141.50 132.70
SNL Thrift Index 100.00 109.13 123.50 135.17 160.69 190.32 210.92
Notes:
A. The lines represent quarterly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the quarterly interval, based on the fiscal year-end,year end, is not a trading
day, the preceedingpreceding trading day is used.
D. The index level for all series was set to $100.00 on 07/02/7/2/96.
1213
SUMMARY COMPENSATION TABLE. The following table shows, for the years ended
December 31, 1997, 1996, and 1995 the cash compensation paid, as well as certain
other compensation paid or accrued for that year to the Chief Executive Officer
of the Company and the Bank and threefour other executive officers of the Company and
the Bank who earned and/or received salary and bonus in excess of $100,000 in
fiscal year 19961997 ("Named Executive Officers"). No other executive officer of the
Company or the Bank earned and/or received salary and bonus in excess of
$100,000 in fiscal year 1996.1997.
LONG-TERM COMPENSATION
---------------------------------------------------------------------
ANNUAL COMPENSATION(1)COMPENSATION (1) AWARDS PAYOUTS
--------------------------------------- ---------------------------------------------------------- --------------------- ---------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITIONS(2)POSITIONS YEAR ($) ($)(3) ($)(4) ($)(5) (#)(6) ($)(7) ($)(8)
- ---------------------------- ------------------------------------------------- -------- -------- -------- ------------ ---------- ----------- -------------- --------------------- --------- ------------ --------- --------------
John R. Garbarino 1997 $325,000 $103,441 $ -- $2,453,519 201,314 $ -- $153,430
President and Chief Executive Officer of 1996 $325,000 $92,930 $325,000 92,930 -- $ -- $ -- $ -- $88,65588,655
of the Company and the Bank.Bank.............. 1995 225,600 63,099 -- -- -- 158,600 11,625
Michael E. Barrett Executive Vice 19961997 $144,400 $26,838$ 22,852 $ -- $ --785,128 41,940 $ -- $ -- $46,34675,472
Executive Vice President of the Bank...Bank..... 1996 144,400 26,838 -- -- -- -- 46,346
1995 138,200 24,108 -- -- -- 74,996 10,819
Michael J. Fitzpatrick
Executive Vice President and Chief 1997 $145,000 $ 45,293 $ -- $ 785,128 75,493 $ -- $ 73,337
Financial Officer of the Company 1996 $139,500 $33,533 $ -- $ -- $ -- $ -- $42,454
and the Bank............1996 139,500 33,533 -- -- -- -- 42,454
Bank..................................... 1995 118,200 30,534 -- -- -- 63,200 6,750
Karl E. Reinheimer (2)
Executive Vice President and Chief 1997 $140,000 $ 21,187 $ -- $ 294,430 75,493 $ -- $ 6,062
Operating Officer of the Bank............ 1996 55,570 12,469 -- -- -- -- --
John K. Kelly
Senior Vice President and Corporate 1997 $122,000 $ 24,245 $ -- $ 490,698 25,164 $ -- $ 61,352
Secretary of the Company and Senior 1996 116,300 26,114 -- -- -- -- 37,079
Vice President and General Counsel of the 1996 $116,300 $26,114 $ -- $ -- $ -- $ -- $37,079
Bank.................... 1995 105,700 22,042 -- -- -- -- 45,948 5,812
the Bank.................................
- -------------------------------------______________________________
(1) Under Annual Compensation, the column titled "Salary" includes amounts
deferred by the Named Executive Officer pursuant to the Bank's 401(k) Plan
and Deferred Compensation Plan.
(2) On July 15, 1996, the Bank employed Karl E. Reinheimer as Director of the
Commercial Loan Division. On October 16, 1996, Mr. Reinheimer was appointed
Executive Vice President and Chief Operating Officer of the Bank.
(3) Consists of bonuses paid pursuant to the Bank's Performance Achievement
Awards Program, which awards bonuses based on the attainment of certain
predetermined annual performance goals. See "Compensation Committee Report
on Executive Compensation."
(4) For 1996,1997, there were no (a) perquisites over the lesser of $50,000 or 10% of
the individual's total salary and bonus for the year; (b) payments of above-marketabove-
market preferential earnings on deferred compensation; (c) payments of
earnings with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payment reimbursements; nor (e) preferential discounts
on stock.
(5) Pursuant to the Incentive Plan, stock awards of 83,881, 26,842, 26,842,
10,066 and 16,776 were granted to Messrs. Garbarino, Barrett, Fitzpatrick,
Reinheimer and Kelly,
which had a market value of $2,453,519, $785,128, $785,128, and $490,698 on
February 4, 1997, the date of grant.Kelly. The awards will vest in five equal annual
installments commencing on February 4, 1998. When shares become vested and
are distributed, the recipients will also receive an amount equal to
accumulated cash and stock dividends (if any) with respect thereto plus
earnings thereon; provided, however, that 25% of the third annual
installment, and 50% of each of the fourth and fifth annual installments
will only vest if the performance criteria established by the Compensation
Committee is satisfied. All awards vest immediately upon terminationdeath, disability
or change in control. As of employment dueDecember 31, 1997, the market value of the
awards granted to death or disability.Messrs. Garbarino, Barrett, Fitzpatrick, Reinheimer and
Kelly was $3,124,567, $999,865, $999,865, $374,959 and $624,906,
respectively.
(6) For a discussion of options granted under the Incentive Plan which was
approved by stockholders on February 4, 1997, see the "Option Grants in Last
Fiscal Year" table.
(7) Represents the payout for the first three-year performance period and for
the first year of the second performance period under the Bank's Long-Term
Awards Program. This program was terminated as of December 31, 1995.
(8) Includes (a) $4,500, $6,463, $6,777$ 0, $2,184, $3,398 , $1,392 and $7,335$1,992 contributed by the
Bank to the accounts of Messrs. Garbarino, Barrett, Fitzpatrick, Reinheimer
and Kelly, respectively, under the Bank's 401(k) Plan; (b) $38,126, $36,930, $35,677$71,296, $69,160,
$69,939, $3,231 and $29,744$59,360 representing the value of shares allocated under
the ESOP, as of December 31, 1996,1997, for the benefit of Messrs. Garbarino,
Barrett, Fitzpatrick, Reinheimer and Kelly, respectively; and (c) $41,998$74,798
for Mr. Garbarino representing the contributions made under the Supplemental
Executive Retirement Plan for the excess amount due under the ESOP for the
fiscal year ended December 31, 1996.
131997.
14
EMPLOYMENT AGREEMENTS. The Bank and the Company have entered into
employment agreements with Messrs. Garbarino and Fitzpatrick (individually, the
"Executive"). These employment agreements are intended to ensure that the Bank
and the Company will be able to maintain a stable and competent management base.
The continued success of the Bank and the Company depends to a significant
degree on the skills and competence of Messrs. Garbarino and Fitzpatrick.
The Employment Agreementsemployment agreements provide for a three-year term for both
Executives. The Bank employment agreement provides that, commencing on the
first anniversary date and continuing each anniversary date thereafter, the
Board of the Bank may extend the agreement for an additional year so that the
remaining term shall be three years, unless written notice of non-renewal is
given by the Board of the Bank after conducting a performance evaluation of the
Executive. The term of the Company employment agreement is extended on a daily
basis unless written notice of non-renewal is given by the Board of the Company.
In addition to the base salary, the agreements provide for, among other things,
participation in stock benefit plans and other fringe benefits applicable to
executive personnel.
The agreements provide for termination by the Bank or the Company for cause
as defined in the agreements at any time. In the event the Bank or the Company
chooses to terminate the Executive's employment for reasons other than for
cause, or in the event of the Executive's resignation from the Bank and the
Company upon: (i) failure to re-elect the Executive to his current offices;
(ii) a material change in the Executive's functions, duties or responsibilities;
(iii) a relocation of the Executive's principal place of employment by more than
25 miles; (iv) liquidation or dissolution of the Bank or the Company; or (v) a
breach of the agreement by the Bank or the Company, the Executive or, in the
event of Executive's subsequent death, his beneficiary, beneficiaries or estate,
as the case may be, would be entitled to receive an amount equal to the
remaining base salary payments due to the Executive and the contributions that
would have been made on the Executive's behalf to any employee benefit plans of
the Bank or the Company during the remaining term of the agreement. The Bank
and the Company would also continue and pay for the Executive's life, health and
disability coverage for the remaining term of the Agreement.employment agreement.
Under the agreements, if voluntary or involuntary termination follows a
change in control of the Bank or the Company (as defined in the employment
agreement), the Executive or, in the event of the Executive's death, his
beneficiary, would be entitled to a severance payment equal to the greater of:
(i) the payments due for the remaining term of the agreement; or (ii) three
times the average of the five preceding taxable years' compensation. The Bank
and the Company would also continue the Executive's life, health, and disability
coverage for thirty-six months. Notwithstanding that both agreements provide
for a severance payment in the event of a change in control, the Executive would
only be entitled to receive a severance payment under one agreement. In the
event of a change in control, based upon three times 19961997 base salary and
incentive bonus as reported in the Summary Compensation Table, Messrs. Garbarino
and Fitzpatrick would receive approximately $1,253,790$1,285,323 and $503,037,$570,879,
respectively, in severance payments, in addition to other cash and noncash
benefits.
1415
Payments under the employment agreements in the event of a change in
control may constitute some portion of an excess parachute payment under Section
280G of the Code for executive officers, resulting in the imposition of an
excise tax on the recipient and denial of the deduction for such excess amounts
to the Company and the Bank.
Payments to the Executive under the Bank's agreement will be guaranteed by
the Company in the event that payments or benefits are not paid by the Bank.
Payment under the Company's agreement would be made by the Company. All
reasonable costs and legal fees paid or incurred by the Executive pursuant to
any dispute or question of interpretation relating to the agreements shall be
paid by the Bank or Company, respectively, if the Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement. The employment
agreements also provide that the Bank and Company shall indemnify the Executive
to the fullest extent allowable under federal and Delaware law, respectively.
CHANGE IN CONTROL AGREEMENTS. For similar reasons as with the Employment
Agreements, the Bank and the Company entered into Change in Control Agreements
("CIC Agreement") with Messrs. Barrett, Kelly,Reinheimer and Karl E.
Reinheimer, the recently employed Chief Operating OfficerKelly, (individually, the
"Executive"). Each CIC Agreement provides for a two-year term. Commencing on
the date of the execution of the Company's CIC Agreement, the term is extended
for one day each day until such time as the Board of Directors of the Company or
the Executive elects by written notice not to extend the term, at which time the
CIC Agreement will end on the second anniversary of the date of notice. The
Company's CIC Agreement provides that in the event voluntary or involuntary
termination follows a change in control of the Bank or the Company (as defined
in the agreement), the Executive would be entitled to a severance payment equal
to two (2) times the Executive's average annual compensation for the five years
preceding termination. The Bank's CIC Agreements are similar to that of the
Company; however, any payments to the Executive under the Bank's CIC Agreement,
would be subtracted from any amount due simultaneously under the Company's CIC
Agreement. The Company and the Bank would also continue, and pay for, the
Executive's life, health and disability coverage for thirty-six (36) full
calendar months following termination. Payments to the Executive under the
Bank's CIC Agreement will beare guaranteed by the Company in the event that payments or
benefits are not paid by the Bank. If a change in control occurs, based upon
two times 19961997 base salary and incentive bonus as reported in the Summary
Compensation Table, pursuant to the CIC Agreements, Messrs. Barrett, Reinheimer
and Kelly would receive approximately $354,258$334,504, $322,374 and $278,016,$292,490,
respectively, in addition to other cash and noncash benefits.
Payments under the employment agreements and change in control agreements
in the event of a change in control may constitute some portion of an excess
parachute payment under Section 280G of the Code for executive officers,
resulting in the imposition of an excise tax on the recipient and denial of the
deduction for such excess amounts to the Company and the Bank.
INCENTIVE PLAN. The Company maintains the Incentive Plan which was
approved by shareholders on February 4, 1997. The Incentive Plan provides
discretionary awards to officers and key employees as determined by a committee
of non-employee directors. The following table lists all grants of options
under the Incentive Plan to the Named Executive Officers made on February 4,
1997 and contains certain information about the potential value of those options
based upon certain assumptions as to the appreciation of the Company's stock
over the life of the option.
1516
OPTION GRANTS IN LAST FISCAL YEAR*YEAR
Individual Grants
- -------------------------------------------------------------------------------------------- ---------------------------INDIVIDUAL GRANTS
----------------------------------------------------------------------------- -----------------------
NUMBER OF POTENTIAL REALIZABLE
SECURITIES % OF TOTAL VALUE AT ASSUMED
UNDERLYING OPTION/SARS EXERCISE OR ANNUAL RATES OF
OPTIONS/ GRANTED TO BASE PRICE STOCK PRICE
SARS GRANTED EMPLOYEES IN PER EXPIRATION APPRECIATION FOR
NAME (2)(3)(4)(5) FISCAL YEAR SHARE DATE(6)DATE (6) OPTIONS (1)
---------------------------- ----------------------- ----------------- ---------------- ------------- -------------- -----------------------
5% 10%
- ---------------------- ------------ ---------------------- ----------- ------------ ------------ ------------
John R. Garbarino 201,314 25.4%24.8% $28.82 2/02/04/07 $3,648,816 $9,246,755$3,655,177 $9,224,972
Michael E. Barrett 41,940 5.35.2 28.82 2/02/04/07 760,162 1,926,388761,488 1,921,850
Michael J. Fitzpatrick 75,493 9.59.3 28.82 2/02/04/07 1,368,311 3,467,5441,370,697 3,459,376
Karl E. Reinheimer 75,493 9.3 28.82 02/04/07 1,370,697 3,459,376
John K. Kelly 25,164 3.23.1 28.82 2/02/04/07 456,097 1,155,833
- -----------------------------456,893 1,153,111
* The option awards listed in this table were made upon shareholder approval of
the Incentive Plan on February 4, 1997._____________________________
(1) The amounts represent certain assumed rates of appreciation. Actual gains,
if any, on stock option exercises and Common Stock holdings are dependent on
the future performance of the Common Stock and overall stock market
conditions. There can be no assurance that the amounts reflected in this
table will be realized.
(2) Options granted pursuant to the Incentive Plan becomeare exercisable in equal
installments at an annual rate of 20% beginning February 4, 1998; provided
however, options will be immediately exercisable in the event the optionee
terminates employment due toupon death, disability or disability. In addition, on or after
July 2, 1997, the Board intends to amend the option awards to provide for
acceleration of the vesting of such awards upon a
change in control of the
Company or the Bank (as defined in the Incentive Plan).
(3) The purchase price may be paid in cash or in Common Stock.
(4) Options include limited (SAR) rights pursuant to which the options may be
exercised in the event of a change in control of the Company. Upon exercise
of a limited right, the optionee would receive a cash payment equal to the
difference between the exercise price of the related option on the date of
the grant and the fair market value of the underlying shares of common stock
on the date the limited right is exercised.
(5) All options are intended to be Incentive Stock Options to the extent
permissible under Section 422 of the Code.
(6) The option term is ten years.
1617
The following table provides certain information with respect to the number of
shares of Common Stock represented by outstanding options and the values of such
options held by the Named Executive Officers as of February 4,
1997.December 31, 1997
FISCAL YEAR-END OPTION/SAR VALUES*VALUES
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTION/SARS AT
FISCAL YEAR END(#)* FISCAL YEAR END($)*
------------------------------- ------------------------------
------------------------------------- -----------------------------------------
NAME EXERCISABLE/UNEXERCISABLE(1) EXERCISABLE/UNEXERCISABLE(2)
- --------------------------- ------------------------------- ------------------------------------------------------------------- -----------------------------------------
John R. Garbarino --/201,314 $--/$413,7001,697,077
Michael E. Barrett --/41,940 --/86,187353,554
Michael J. Fitzpatrick --/75,493 --/155,138636,406
Karl E. Reinheimer --/75,493 --/636,406
John K. Kelly --/25,164 --/51,712212,133
- ---------------------------
* The option awards listed in this table were made upon shareholder approval
of the Incentive Plan on February 4, 1997.___________________________
(1) The options in this table have an exercise price of $28.82.
(2) Based on the market value of the underlying Common Stock, $30.875,$37.25, at
March
14,December 31, 1997, minus the exercise price.
RETIREMENT PLAN. The Bank maintains a defined benefit plan (the
"Retirement Plan") for salaried employees who have attained the age of 21 and
have completed one year of service. Benefits vest after a participant is
credited with five years of service. The Retirement Plan is designed to comply
with the requirements under Section 401(a) of the Code.
Compensation under the Retirement Plan includes all regular pay, overtime
and regular bonuses as set forth under "Summary"- Summary Compensation Table." The
benefits are not subject to any social security adjustment. About the time of
the conversion from mutual to stock form, the Board of Directors froze the
future accrual of benefits under the Retirement Plan in coordination with the
adoption or amendment of other qualified employee benefit plans. The benefit
amounts listed below were computed on a 10 year certain and continuous benefit
basis, which is the normal form under the plan. Participants of the plan,Retirement
Plan, however, have the option of electing benefits to be paid on a single life
annuity basis.
1718
The following table sets forth the estimated annual benefits payable upon
retirement at age 65 for the year ended December 31, 1996,1997, expressed in the form
of a 10 year certain and continuous benefit, for the final average salary and
benefit service classifications specified.
OCEAN FEDERAL SAVINGS BANK EMPLOYEE PENSION PLAN
--------------------------------------------------------------------------------------------------------------------------------------------
FINAL AVERAGE YEARS OF SERVICE
FINAL AVERAGECOMPENSATION ----------------
COMPENSATION
15 20 25 30 35
---------------------- -------------- -------------- --------------- ---------------- --------------- ------------------ ------- ------- ------- ------- -------
$ 50,000 $ 7,500 $10,000 $12,500 $15,000 $17,500
100,000 15,000 20,000 25,000 30,000 35,000
150,000 22,500 30,000 37,500 45,000 52,500
200,000 22,500 30,000 37,500 45,000 52,500
250,000 22,500 30,000 37,500 45,000 52,500
300,000 22,500 30,000 37,500 45,000 52,500
350,000 22,500 30,000 37,500 45,000 52,500
The approximate credited years of service, as of December 31, 1996,1997, for the
named executive officers are as follows:
NAME SERVICE
---- -------
John R. Garbarino.......................................................Garbarino................................... 24
Michael E. Barrett......................................................Barrett.................................. 8
Michael J. Fitzpatrick..................................................Fitzpatrick.............................. 3
Karl E. Reinheimer.................................. 0
John K. Kelly ..........................................................Kelly....................................... 8
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. In 1996, theThe Bank implementedmaintains a non-qualified
Supplemental Executive Retirement Plan ("SERP") to provide a select group of
management and highly compensated employees with additional retirement benefits.
The benefits provided under the SERP make up the difference between an amount up
to 70% of final base compensation and the benefits provided from Bank funding of
the Bank's tax qualified retirement plans and 401(k) Plan. The amounts
contributed for the pension plan and 401(k) plan are tied together. In addition,
the SERP provides a benefit equal to the benefits lost from the ESOP due to the
application of limitations imposed by the Code, as amended, on compensation and
maximum benefits under the ESOP.
The Bank established an irrevocable trust in connection with the SERP.
This trust is funded with contributions from the Bank for the purpose of
providing the benefits promised under the terms of the SERP. The assets of the
trust are beneficially owned by the SERP participants, who recognize income as
contributions are made to the trust. Earnings on the trust's assets are taxable
to the participants. The 1995 and 1996 combined amounts contributed in 1997 under the SERP (exclusive
of the ESOP benefits) for Messrs. Garbarino,
19
Barrett, Fitzpatrick, Reinheimer and Kelly were $104,037, $44,072, $22,886,$59,930, $23,262, $13,921,
$10,993 and $21,563,$11,543, respectively.
18
TRANSACTIONS WITH CERTAIN RELATED PERSONS
All loans made by the Bank to its directors and executive officers are made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons and
do not involve more than the normal risk of collectibility or present other
unfavorable features. In January 1997, the Bank determined to offer loans to
executive officers on terms not available to the public but available to other
full-time employees, in accordance with recently modified federal regulations.
Under the Bank's existing policy, any loan to an executive officer or director,
must be approved, in advance, by a majority of the disinterested members of the
Board of Directors.
PROPOSAL 2. RATIFICATION OF THE AMENDED AND
RESTATED OCEAN FINANCIAL CORP. 1997 INCENTIVE PLAN
The Board of Directors of Ocean Financial Corp. adopted the Amended and
Restated 1997 Incentive Plan (the "Plan") on February 18, 1998 and is presenting
it for ratification by the Company's stockholders at the Annual Meeting. The
Plan amends and restates the Ocean Financial Corp. 1997 Incentive Plan
originally adopted by the Board and approved by stockholders on February 4,
1997. The Board of Directors determined that it was in the best interest of the
Company and the Bank to amend and restate the Plan to, among other things
eliminate a provision of the Plan that permitted the Board, in its discretion,
to change the exercise price of previously granted options without stockholder
approval, provide for the acceleration of the vesting of awards and stock
options following a change in control of the Company or Bank, eliminate certain
outdated regulatory requirements no longer necessary, and make certain technical
amendments. Due to the amendments that have been made to the Plan, the Company
is presenting the Plan to the stockholders for stockholder ratification.
At March 2, 1998, options covering 789,875 of the Company's Common Stock
had been granted and 48,932 shares (other than shares that might in the future
be returned to the Plan as a result of cancellation or expiration of options)
remained available to satisfy options granted in the future under the Plan.
The following is a summary of the Plan, which is qualified in its entirety
by the complete provisions of the Plan attached as Appendix A.
GENERAL
The Plan authorizes the granting of options to purchase Common Stock,
option-related awards and awards of Common Stock (collectively, "Awards").
Subject to certain adjustments to the Awards, as specified in Section 15 of the
Plan, to prevent dilution, diminution or enlargement of the rights of the
participant, the maximum number of shares currently available
20
for Awards under the Plan is 1,174,330 shares. The maximum number of shares
currently reserved for purchase pursuant to the exercise of options and option-
related Awards which may be granted under the Plan is 838,807 shares. The
maximum number of shares currently reserved for the award of shares of Common
Stock ("Stock Awards") is 335,523 shares. At March 2, 1998, 789,875 options had
been granted to participants and Stock Awards for 324,936 shares of stock had
been granted to participants pursuant to the Plan. All officers, other employees
and non-employee directors, including advisory directors of the Company and its
affiliates are eligible to receive Awards under the Plan. The Plan is
administered by a committee (the "Committee"). Authorized but unissued shares or
shares previously issued and reacquired by the Company may be used to satisfy
Awards under the Plan.
AWARDS
TYPES OF AWARDS. The Plan authorizes the grant of Awards in the form of:
(i) options to purchase the Company's Common Stock intended to qualify as
incentive stock options under Section 422 of the Code (options which afford tax
benefits to the recipients upon compliance with certain conditions and which do
not result in tax deductions to the Company), referred to as "Incentive Stock
Options" or "ISOs"; (ii) options that do not so qualify (options which do not
afford income tax benefits to recipients, but which may provide tax deductions
to the Company), referred to as "Non-statutory Stock Options" or "NSOs"; (iii)
limited rights which are exercisable only upon a change in control of the
Company (as defined in the Plan) ("Limited Rights"); and (iv) Stock Awards,
which provide a grant of Common Stock that may vest over time.
OPTIONS. The Committee has the discretion to award Incentive Stock Options
or Non-statutory Options to employees, while only Non-statutory Stock Options
may be awarded to non-employee directors. Pursuant to the Plan, the Committee
has the authority to determine the date or dates on which each stock option will
become exercisable. In order to qualify as Incentive Stock Options under
Section 422 of the Code, the exercise price must not be less than 100% of the
fair market value on the date of the grant. Incentive Stock Options granted to
any person who is the beneficial owner of more than 10% of the outstanding
voting stock may be exercised only for a period of five years from the date of
grant and the exercise price must be at least equal to 100% of the fair market
value of the underlying Common Stock on the date of the grant. The exercise
price may be paid in cash or in Common Stock at the discretion of the Committee.
See "Payout Alternatives" and "Alternative Option Payments."
TERMINATION OF EMPLOYMENT. Unless otherwise determined by the Committee,
upon termination of an employee's service for any reason other than death,
disability or termination for cause, the vested Incentive Stock Options and Non-
statutory Stock Options shall be exercisable for a period of three months
following termination. The Committee, in its discretion, may determine the time
frame in which options may be exercised and may redesignate Incentive Stock
Options as Non-statutory Stock Options. In the event of termination for cause,
all rights under any Stock Options granted shall expire immediately upon
termination. Notwithstanding the foregoing, the Plan now provides that in the
event of a change in control of the Company or the Bank, as well as the case of
death or disability, options will become fully vested and shall be exercisable
for up to one year thereafter; provided that options not exercised within three
months following a change in control shall be
21
redesignated as Non-statutory Stock Options.
LIMITED RIGHTS. Limited Rights are related to specific options granted and
become exercisable in the event of a change in control of the Bank or the
Company. Upon exercise, the optionee will be entitled to receive in lieu of
purchasing the stock underlying the option, a lump sum cash payment equal to the
difference between the exercise price of the related option and the fair market
value of the shares of Common Stock subject to the option on the date of
exercise of the right less any applicable tax withholding.
STOCK AWARDS. The Plan also authorizes the granting of Stock Awards to
employees and directors. The Committee has the authority to determine the dates
on which Stock Awards granted will vest. The Plan now provides that all Stock
Award grants immediately vest upon termination of employment following a change
in control of the Company or the Bank, as well as following death or disability.
Under the Plan the vesting of Stock Awards may also be made contingent upon the
attainment of certain performance goals by the Company, Bank or grantee, which
performance goals, if any, would be established by the Committee. An agreement
setting forth the terms of the Stock Awards ("Stock Award Agreement") shall set
forth the vesting period and performance goals that must be attained. The
performance goals may be set by the Committee on an individual basis, for all
Stock Awards made during a given period of time, or for all Stock Awards for
indefinite periods. A Stock Award may only be granted from the shares reserved
and available for grant under the Plan. No Stock Award that is subject to a
performance goal is to be distributed to the employee until the Committee
confirms that the underlying performance goal has been achieved.
Stock Awards are generally nontransferrable and nonassignable as provided
in the Plan. The Committee has the power, under the Plan, to permit transfers.
When plan shares are distributed in accordance with the Plan, the recipients
will also receive amounts equal to accumulated cash and stock dividends (if any)
with respect thereto plus earnings thereon minus any required tax withholding
amounts. Prior to vesting, recipients of Stock Awards may direct the voting of
shares of Common Stock granted to them and held in the trust. Shares of Common
Stock held by the Plan trust which have not been allocated or for which voting
has not been directed are voted by the trustee in the same proportion as the
awarded shares are voted in accordance with the directions given by all
recipients of Stock Awards.
TAX TREATMENT
STOCK OPTIONS. An optionee will generally not be deemed to have recognized
taxable income upon grant or exercise of any Incentive Option Plan, provided
that shares transferred in connection with the exercise are not disposed of by
the optionee for at least one year after the date the shares are transferred in
connection with the exercise of the option and two years after the date of grant
of the options. If the holding periods are satisfied, upon disposal of the
shares, the aggregate difference between the per share option exercise price and
the fair market value of the Common Stock is recognized as income taxable at
long term capital gains rates. No
22
compensation deduction may be taken by the Company as a result of the grant
or exercise of Incentive Stock Options, assuming those holding periods are met.
In the case of the exercise of a Non-statutory Stock Option, an optionee
will be deemed to have received ordinary income upon exercise of the stock
option in an amount equal to the aggregate amount by which the per share
exercise price is exceeded by the fair market value of the Common Stock. In the
event shares received through the exercise of an Incentive Stock Option are
disposed of prior to the satisfaction of the holding periods (a "disqualifying
disposition"), the exercise of the option will be treated as the exercise of a
Non-statutory Stock Option, except that the optionee will recognize the
ordinary income for the year in which the disqualifying disposition occurs.
The amount of any ordinary income deemed to have been received by an optionee
upon the exercise of a Non-statutory Stock Option or due to a disqualifying
disposition will be a deductible expense of the Company for tax purposes.
In the case of Limited Rights, the option holder would have to include the
amount paid to him upon exercise in his gross income for federal income tax
purposes in the year in which the payment is made and the Company would be
entitled to a deduction for federal income tax purposes of the amount paid.
STOCK AWARDS. When shares of Common Stock, as Stock Awards, are
distributed, the recipient is deemed to receive ordinary income equal to the
fair market value of such shares of the date of distribution plus any dividends
and earnings on such shares (provided such date is more than six months after
the date of grant) and the Company is permitted a commensurate compensation
expense deduction for income tax purposes.
PAYOUT ALTERNATIVES
The Committee has the sole discretion to determine what form of payment it
shall use in distributing payments for all Awards. If the Committee requests
any or all participants to make an election as to form of payment, it shall not
be considered bound by the election. Any shares of Common Stock tendered in
payment of an obligation arising under the Plan or applied to any tax
withholding amounts shall be valued at the fair market value of the Common
Stock. The Committee may use treasury stock, authorized but unissued stock or
may direct the market purchase of shares of Common Stock to satisfy its
obligations under the Plan.
ALTERNATE OPTION PAYMENTS
The Committee also has the sole discretion to determine the form of payment
for the exercise of an option. The Committee may indicate acceptable forms in
the Award Agreement covering such options or may reserve its decision to the
time of exercise. No option is to be considered exercised until payment in full
is accepted by the Committee. The Committee may permit the following forms of
payment for options: (a) in cash or by certified check; (b) through borrowed
funds, to the extent permitted by law; or (c) by tendering previously acquired
shares of Common Stock. Any shares of Common Stock tendered in payment of the
exercise price of an
23
option shall be valued at the Fair Market Value of the Common Stock on the date
prior to the date of exercise.
AMENDMENT
The Board of Directors may amend the Plan in any respect, at any time,
provided that no amendment may affect the rights of an Award holder without his
or her permission and provided that the exercise price of previously granted
options may not be changed or modified without stockholder approval, unless, as
specified in Section 15 of the Plan, the change or modification is made to
prevent dilution, diminution or enlargement of the rights of the Award holder.
ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock of the
Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company, or in the event a
capital distribution is made, the Company may make such adjustments to
previously granted Awards, to prevent dilution, diminution or enlargement of the
rights of the Award holder. All Awards under this Plan shall be binding upon
any successors or assigns of the Company.
NONTRANSFERABILITY
Unless determined otherwise by the Committee, no Award under the Plan shall
be transferable by the recipient other than by will or the laws of intestate
succession or pursuant to a qualified domestic relations order. With the
consent of the Committee, an employee or Outside Director may designate a person
or his or her estate as beneficiary of any award to which the recipient would
then be entitled, in the event of the death of the employee.
STOCKHOLDER VOTE
Stockholders are being requested to ratify all amendments to the Plan. If
stockholders fail to ratify Proposal 2, the Plan in the form attached hereto,
will remain in full force and effect at the discretion of the Company's Board.
The affirmative vote of a majority of the shares present at the Annual Meeting
and eligible to be cast on Proposal 2 is required to ratify the Plan as amended.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
AMENDED AND RESTATED OCEAN FINANCIAL CORP. 1997 INCENTIVE PLAN.
24
PROPOSAL 3. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
19961997 were KPMG Peat Marwick LLP. The Company's Board of Directors has
reappointed KPMG Peat Marwick LLP to continue as independent auditors for the
Bank and the Company for the year ending December 31, 1997,1998, subject to
ratification of such appointment by the shareholders.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting. They will be given an opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions from
shareholders present at the Annual Meeting.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED PROXY
CARD WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP
AS THE INDEPENDENT AUDITORS OF THE COMPANY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
19
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 19981999 Annual Meeting of Shareholders, a shareholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Shareholders not later than November
20, 1997.19, 1998. Any such proposal will be subject to 17 C.F.R. ss.(S) 240.14a-8 of the
Rules and Regulations under the Exchange Act.
NOTICE OF BUSINESS TO BE CONDUCTED AT A SPECIAL OR ANNUAL MEETING
The Bylaws of the Company set forth the procedures by which a shareholder
may properly bring business before a meeting of shareholders. Pursuant to the
Bylaws, only business brought by or at the direction of the Board of Directors
may be conducted at a special meeting. The Bylaws of the Company provide an
advance notice procedure for a shareholder to properly bring business before an
annual meeting. The shareholder must give written advance notice to the
Secretary of the Company not less than ninety (90) days before the date
originally fixed for such meeting; provided, however, that in the event that
less than one hundred (100) days notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the tenth day
following the date on which the Company's notice to shareholders of the annual
meeting date was mailed or such public disclosure was made. The advance notice
by shareholders must include the shareholder's name and address, as they appear
on the Company's record of shareholders, a brief description of the proposed
business, the reason for conducting such business at the annual meeting, the
class and number of shares of the Company's capital stock that are beneficially
owned by such
25
business at the annual meeting, the class and number of shares of the Company's
capital stock that are beneficially owned by such shareholder and any material
interest of such shareholder in the proposed business. In the case of
nominations to the Board of Directors, certain information regarding the nominee
must be provided. Nothing in this paragraph shall be deemed to require the
Company to include in its proxy statement or the proxy relating to any annual
meeting any shareholder proposal which does not meet all of the requirements for
inclusion established by the SEC in effect at the time such proposal is
received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are then present at the Annual
Meeting and wish to 20
vote your shares in person, your original proxy may be
revoked by voting at the Annual Meeting. However, if you are a shareholder
whose shares are not registered in your own name, you will need appropriate
documentation from your recordholder to vote personally at the Annual Meeting.
A COPY OF THE FORM 10-K (WITHOUT EXHIBITS) FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996,1997, AS FILED WITH THE SEC WILL BE FURNISHED WITHOUT CHARGE TO
SHAREHOLDERS OF RECORD UPON WRITTEN REQUEST TO LYNN RHOADS,SALLY DENNIS, OCEAN FINANCIAL
CORP., 975 HOOPER AVENUE, TOMS RIVER, NEW JERSEY 08754-2009.
By Order of the Board of Directors
/s/ John K. Kelly
-------------------
John K. Kelly
Corporate Secretary
Toms River, New Jersey
March 20, 199719, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU
ARE REQUESTED TO SIGN, DATE AND PROMPTLY RETURN
THE ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
2126
- --------------------------------------------------------------------------------
8888
REVOCABLE PROXY
OCEAN FINANCIAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
April 24, 199723, 1998
10:00 a.m.
-------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints the Proxy Committee of the Board of
Ocean Financial Corp. (the "Company"), each with full power of substitution to
act as attorneys and proxies for the undersigned and to vote all shares of
Common Stock of the Company which the undersigned is entitled to vote only at
the Annual Meeting of Stockholders, to be held at the Crystal Point Yacht Club,
3900 River Road at the Intersection of State Highway 70, Point Pleasant, New
Jersey on April 24, 1997,23, 1998, at 10:00 a.m. and at any and all adjournments thereof.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE NOMINEES
AS DIRECTORS SPECIFIED UNDER PROPOSAL 1, "FOR" PROPOSAL 2 AND "FOR" PROPOSAL 2.3.
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.
(Continued and to be signed on other side.)side)
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
OCEAN FINANCIAL CORP.
APRIL 23, 1998
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------A [X] Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES AS DIRECTORS
SPECIFIED UNDER PROPOSAL 1, AND "FOR" PROPOSAL 2, THE RATIFICATION OF THE AMENDED
AND RESTATED INCENTIVE PLAN AND "FOR" PROPOSAL 3, THE CERTIFICATION OF
ACCOUNTANTS.
FOR
ALL NOMINEES VOTE WITHHELD
1. Election of [_] [_] Nominees: Carl Feltz, Jr.
Directors (except Robert E. Knemoller
as marked to the Diane F. Rhine
contrary below)
INSTRUCTION: To withhold your vote for any individual nominee, write that
nominee's name on the space provided.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. The ratification of the appointment of [_] [_] [_]
KPMG Peat Marwick LLP as independent
auditors of the Company for the fiscal year
ending December 31, 1997.
FOR all Nominees VOTE WITHHELD
1. Election of NOMINEES:
Directors [_] [_] Michael E. Barrett
(except as Donald E. McLaughlin
marked to the contrary below) James T. Snyder
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME
ON THE SPACE PROVIDED
- ---------------------------------------------
FOR AGAINST ABSTAIN
2. The ratification of the Amended and Restated
Ocean Financial Corp. 1997 Incentive Plan. [_] [_] [_]
3. The ratification of the appointment of KPMG
Peat Marwick LLP as independent auditors of [_] [_] [_]
the Company for the fiscal year ending
December 31, 1998.
The undersigned acknowledges receipt from the Company prior to the execution
of this proxy of a Notice of Annual Meeting and of a Proxy Statement dated March
20, 1997.19, 1998.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
Signature:ENVELOPE
Signature(s) Dated
------------------------------------------- -------------------------------------------------------------- -----------
NOTE: Please sign exactly as your name appears on this card. When signing as an
attorney, executor, administrator, trustee or guardian, please give your
full title. If shares are held jointly, each holder may sign but only one
signature is required.
- --------------------------------------------------------------------------------