UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934(Amendment No. )
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CENTER
CONNECTONE BANCORP, INC.
(Name of Registrant as Specified in Itsits Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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CENTER BANCORP, INC.
Corporate Headquarters
2455 Morris301 Sylvan Avenue
Union,Englewood Cliffs, New Jersey 07083
(908) 688-9500
07632
NOTICE OF ANNUAL MEETING OF To SHAREHOLDERSSTOCKHOLDERSTO BE HELD MAY 24, 2011Our Shareholders:Be Held on May 6, 2015
TheNOTICE IS HEREBY GIVEN that the Annual Meeting (the “Annual Meeting”) of Shareholders of CenterConnectOne Bancorp, Inc. (“Center Bancorp” or(the “Company”), the “Company”holding company for ConnectOne Bank, (the “Bank”), will be held at Suburban Golf Club, 1730 Morris Avenue, Union, New Jersey145 Dean Dr., Tenafly, NJ 07670, on Tuesday, May 24, 2011,6, 2015 at 9:008:15 a.m., for the purpose of considering and voting upon the following purposes:matters, all of which are more completely set forth in the accompanying Proxy Statement:
1. To elect eleven directorsThe election of twelve (12) Directors of the Company to serve for a one year term.the terms described in the proxy statement or until their successors are elected and shall qualify;
2. To ratify the appointment of ParenteBeard LLCCrowe Horwath LLP as the Company’s independent registered public accounting firmaccountants for 2011.the fiscal year ending December 31, 2015; and
3. To vote upon a non-binding resolution approving the compensation of Center Bancorp’s executive officers.
4. To transact suchSuch other business as mayshall properly come before the Annual Meeting.
Only holders of record of Center Bancorpshares of the Company’s common stock (the “Common Stock”) at the close of business on April 8, 2011March 27, 2015 will be entitled to notice of and to vote at the Annual Meeting. Each share of Center Bancorp’s common stock is entitled
You are requested to one vote.
Please complete,fill in, sign, date and return the accompanyingenclosed proxy promptly, regardless of whether you expect to attend the Annual Meeting. A postage-paid return envelope is enclosed for your convenience.
If you are present at the Annual Meeting, you may vote in the enclosed postage paid envelope atperson even if you have already returned your earliest convenience.proxy.
Very truly yours, | ||
| ||
FRANK SORRENTINO III |
Englewood Cliffs, New Jersey
April 15, 2015
IMPORTANT-PLEASE MAIL YOUR PROXY PROMPTLY
You are cordially invitedurged to attendsign and return the enclosed Proxy promptly in the envelope provided so that there may be sufficient representation at the Annual Meeting.
Important notice regarding the availability of proxy materialsProxy Materials for the 2011 annual meeting of shareholders: This Proxy Statement for the 2011 Annual Meeting of ShareholdersStockholders to be held on May 6, 2015. Our Proxy Statement and our 2010 Annual Report to Shareholders are also available at:http://www.cfpproxy.com/5260online at www.proxyvote.com..
By Order of the Board of Directors
 | | |
CENTER BANCORP, INC.CONNECTONE BANCORP, INC.
2455 Morris Avenue, Union, New Jersey 07083
PROXY STATEMENT
FORANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 2015
We are providing this proxy statement
This Proxy Statement is being furnished to youshareholders of ConnectOne Bancorp, Inc. (the “Company”) in connection with the solicitation by ourthe Board of Directors of proxies to be used at our annual meetingthe Annual Meeting of shareholdersstockholders to be held at Suburban Golf Club, 1730 Morris Avenue, Union, New Jersey145 Dean Dr., Tenafly, NJ 07670 at 9:008:15 a.m. on Tuesday, May 24, 2011, and any adjournments of that meeting. We are first sending copies of this
About the Annual Meeting
Why have I received these materials?
The accompanying proxy, statement and the enclosed proxy card to our shareholdersbeing mailed on or about April 19, 2011. Unless we indicate otherwise, all references15, 2015 to “we”, us” and “our” and other similar terms are references to Center Bancorp, Inc.
Only holders of recordthe Common Stock, is solicited by the Board of CenterDirectors of ConnectOne Bancorp, common stockInc. (referred to throughout this Proxy Statement as the “Company” or “we”), the holding company for ConnectOne Bank, in connection with our Annual Meeting of stockholders that will take place at 145 Dean Dr., Tenafly, NJ 07670 on May 6, 2015. You are cordially invited to attend the Annual Meeting and are requested to vote on the proposals described in this Proxy Statement.
Who is entitled to vote at the Annual Meeting?
Holders of Common Stock as of the close of business on April 8, 2011, a date which we refer to as the record date, will receive notice of our annual meeting andMarch 27, 2015, will be entitled to vote at our annual meeting. Forthe Annual Meeting. On March 27, 2015, there were outstanding and entitled to vote 29,864,602 shares of Common Stock, each matter thatof which is presented to our shareholders at our annual meeting, you will be entitled to one vote forwith respect to each sharematter to be voted on at the Annual Meeting.
How do I vote my shares at the Annual Meeting?
If you are a “record” shareholder of our common stock thatCommon Stock (that is, if you hold Common Stock in your own on the record date. On the record date, there were 16,290,700 shares of our common stock outstanding.
In a joint Schedule 13D amendment dated September 30, 2010, on behalf of Seidman and Associates, L.L.C., Seidman Investment Partnership, L.P., Seidman Investment Partnership II, L.P., Broad Park Investors, LLC, Chewy Gooey Cookies, LP, LSBK06-08, L.L.C., Lawrence Seidman, clients of Lawrence Seidman, CBPS, L.L.C., Dennis Pollack, 2514 Multi-Strategy Fund, L.P. and Contrarian Hedged Equity, L.P., such persons stated thatname as of September 30, 2010, they beneficially own a total of 3,533,444 shares of our common stock, representing 21.69% of the shares outstanding as of September 28, 2010, as disclosedMarch 27, 2015 in the Company’s Current Report on Form 8-K dated September 29, 2010. Seidman and Associates, L.L.C.stock records maintained by our transfer agent, Broadridge Financial Solutions, Inc.), Seidman Investment Partnership, L.P., Seidman Investment Partnership II, L.P., LSBK06-08, LLC and Lawrence Seidman have an addressyou may vote by proxy or in person at the Annual Meeting. To vote by proxy, you may use one of 100 Misty Lane, Parsippany, New Jersey 07054. Mr. Seidman also has an address of 19 Veteri Place, Wayne, New Jersey 07470. Broad Park Investors, L.L.C. and Chewy Gooey Cookies, L.P. have an address of 80 Main Street, West Orange, New Jersey 07052. Mr. Pollack has an address of 825 Third Avenue, New York, New York 10022. CBPS, LLC has an address of One Rockefeller Plaza, New York, NY 10020. 2514 Multi-Strategy Fund, L.P. has an address of 15310 Amberly Drive, Suite 220 Tampa, Florida 33647 and Contrarian Hedged Equity, L.P. has an address of 15310 Amberly Drive, Suite 220 Tampa, Florida 33647.
Thethe following table provides information regarding the beneficial ownership of our common stock by Sy Jacobs and certain of his affiliates:
| | | ||||||
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||
| Sy Jacobs | ||||||||
| Jacobs Asset Management, LLC | ||||||||
| JAM Mangers L.L.C. | ||||||||
| JAM Partners, LP | ||||||||
| One Fifth Avenue | ||||||||
| New York, NY 10003 | 881,673 | (1) | 5.41 | % | ||||
• | Telephone voting, by dialing the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Internet voting, by accessing the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Mail, by completing and returning the proxy card in the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other than as set forth above, we are not aware of any other person or entity that ownedCan I change my vote after I return my proxy card?
Any stockholder of record has the power to revoke his or beneficially more than five percent of our outstanding common stock as of the record date.
If you execute a proxy card, you may revoke yourher proxy at any time before it is exercised by either:
• | voting again by telephone or the Internet, or completing a new proxy card with a later date—your latest vote will be counted; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | filing with the Secretary of the Company written notice of such revocation; or | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | appearing at the annual meeting and giving the Secretary written notice of your intention to vote in person. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All proxy cards that are properly executed and not revoked will be voted as specified in the proxy card. IfWhat constitutes a proxy is signed but no specification is given, the proxy will be voted in favorquorum for purposes of the Board’s nominees for election toAnnual Meeting?
The presence at the Board andAnnual Meeting in favorperson or by proxy of Proposals 2 and 3.
Center Bancorp, which we refer to from time to time in this proxy statement as the “Company” or “Center,” will bear the cost of soliciting proxies. In addition to our soliciting proxies by use of the mail, our officers and employees or officers or employees of our bank subsidiary may solicit proxies by telephone, telegraph or personal interview, with nominal expense to us. We will also pay the standard charges and expenses of brokerage houses or other nominees or fiduciaries for forwarding proxy soliciting material to the beneficial owners of shares.
If holders of a majority of the voting power of all outstanding shares of our common stock areCommon Stock entitled to vote shall constitute a quorum
for the transaction of business. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present in person or by proxy,at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters.
Why is it important to vote my shares?
If we willdo not have a quorum which means thatpresent at the Annual Meeting, we will be ableneed to transact business atadjourn the annual meeting. meeting to solicit additional proxies. This will cause additional expense and delay for the Company.
What vote is required to approve each item?
The election of directors will requireat the Annual Meeting requires the affirmative vote of a plurality of the common stockvotes cast at the Annual Meeting by shares represented in person or by proxy and entitled to vote atfor the annual meeting. In other words, the eleven persons who receive the highest numberelection of votes will be deemed elected to our Board. Proposals 2 and 3 will be approved if a majoritydirectors. The ratification of the votes cast atappointment of the annual meeting by shareholders represented and entitled to vote at the annual meeting are “for” these proposals. If any other matters are submitted to shareholders at the annual meeting, such matters will be deemed “approved” if they receiveindependent registered public accountants requires the affirmative vote of a majority of the votes cast at the annual meetingAnnual Meeting by shareholdersshares represented and entitled toin person or by proxy.
Summary of the Proposals
How does the Board recommend that I vote atmy shares?
Unless you give other instructions on your proxy card, the annual meeting.
For purposespersons named as proxies on the card will vote in accordance with the recommendations of determining the votes castBoard of Directors. The Board’s recommendation is set forth together with the description of each item in this Proxy Statement. In summary, the Board recommends a vote:
• | FOR the directors’ nominees to the Board of Directors; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | FOR ratification of the appointment of Crowe Horwath LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2015. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
With respect to any matterother matters that properly come before the Annual Meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion in the best interests of the Company. At the date this Proxy Statement went to press, the Board of Directors had no knowledge of any business other than that described in this proxy statement that would be presented for consideration at the annual meeting, weAnnual Meeting.
Who will only count those votesbear the expense of soliciting proxies?
The Company will bear the cost of soliciting proxies. In addition to the solicitation by mail, proxies may be solicited personally or by telephone, facsimile or electronic transmission by our employees.
2
INTRODUCTION
On July 1, 2014, the Company announced the completion of a merger (the “Merger”), under which are cast “for” or “against”the Company merged with the former ConnectOne Bancorp, Inc. (hereinafter referred to as “Legacy ConnectOne”). We will count abstentionsSimultaneously, Union Center National Bank (“UCNB”), the Company’s then wholly owned subsidiary, merged with and broker non-votes solely for the purpose of determining whether a quorum is present at the annual meeting. Broker non-votes occur when brokers who hold their customers’ shares in street name submit proxies for such shares on some matters, but not others. Generally, this would occur when brokers have not received any instructions from their customers. In these cases, the brokers,into ConnectOne Bank, Legacy ConnectOne’s then wholly owned subsidiary, with ConnectOne Bank as the holders of record, are permitted to vote on “routine” matters, which typically includesurviving institution. In connection with the ratificationclosing of the independent registered public accounting firm, but not on non-routine matters.Merger, the Company changed its name to ConnectOne Bancorp, Inc., and the Board of Directors and senior management of the Company were restructured, with Messrs. Alexander Bol, Lawrence B. Seidman and Anthony C. Weagley resigning from the Board, and Messrs. Frank Sorrentino, Frank W. Baier, Stephen T. Boswell, Frank Huttle III, Michael Kempner, and Joseph Parisi Jr. joining the Board.
3
PROPOSAL 1
1—ELECTION OF DIRECTORS
OurThe Certificate and By-Laws of the Company provide that our Board will consistthe number of Directors shall not be less than five nor(5) or more than twenty-five members. The(25) and permit the exact number of directors is fixed andto be determined from time to time by resolutionthe Board of the full BoardDirectors. For 2015, there are twelve (12) nominees for Director. There are no arrangements or by resolution of the shareholders atunderstanding between any annualdirector, or special meeting. Our Board has set the number of directors at eleven. Our entire Board will standnominee for re-election this year for a one year term.
Since the adoption of the Sarbanes-Oxley Act in July 2002, there has been a growing public and regulatory focus on the independence of directors. In response, Nasdaq adopted amendmentsdirectorship, pursuant to its definition of independence. Additional requirements relating to independence are imposed by the Sarbanes-Oxley Act with respect to members of the Audit Committee. As noted below, our Board has determined that the members of the Audit Committee satisfy all applicable definitions of independence. Our Board has also determined that the following members of our Board (including all members of our Nominating and Compensation Committees) satisfy the Nasdaq definition of independence: Alexander A. Bol, James J. Kennedy, Howard Kent, Phyllis S. Klein, Harold Schechter, Lawrence B. Seidman, Alan H. Straus, William A. Thompson and Raymond Vanaria.
Center does not contemplate that anywhich such director or nominee will be unable to servewas selected as a director for any reason. Each of our Board’s nominees has agreed to serve if elected. However, in the event that one or more of our Board’s nominees should be unable to stand for election, discretionary authority is reserved to cast votes for the election of a substitute or substitutes selected by ournominee.
The Board of Directors and all proxies eligible to be voted for our Board’s nominees will be voted for such other person or persons. Each of the nominees is alsoCompany has nominated for election to the Board of Directors the persons named below, each of whom currently serves as a member of the Board. If elected, each will serve until the 2016 Annual Meeting of Stockholders, and until his replacement has been duly elected and qualified. The Board of Directors has no reason to believe that any of our subsidiary, Union Center National Bank (the “Bank” or “UCNB”).
the nominees will be unavailable to serve if elected.
The following table sets forth the names, ages, principal occupations, and business experience for all nominees, as well as their prior service on the nomineesBoard, if any. Unless otherwise indicated, principal occupations shown for each Director have extended for five or more years.
NOMINEES FOR ELECTION
Name and Position | Age | Principal Occupation for Past Five Years | Term of Office | |||
Frank Sorrentino III, | 53 | Chairman of the Board & Chief Executive Officer of the Company and the Bank; formerly Chairman of the Board and Chief Executive Officer of Legacy ConnectOne | 2014–2015 | |||
Frank W. Baier | 49 | Executive Vice President and Chief Financial Officer of Continental Grain Company, a diversified operating and investment company. Previously, from July 2011 through September 2012, Executive Vice President and Chief Financial Officer of Legecy ConnectOne and the Bank. Partner at Columbia Financial Partners LP, from May 2010 until June 2011. | 2014–2015 | |||
Alexander A. Bol | 67 | Owner, Alexander A. Bol A.I.A. (architectural firm); Former Chairman of the Board of The Registrant and Union Center National Bank (2001–2014) | 2015–2015 | |||
Stephen Boswell, | 61 | President & Chief Executive Officer of Boswell Engineering | 2014–2015 | |||
Frederick Fish | 70 | Managing Member, The Real Estate Equity Company, known as “Treeco” (partnership which develops, manages and has financial interests in 1.5 million square feet of retail shopping centers in NJ, NY, PA and MA); Director and Founding Member of American Spraytech (a contract filling and manufacturing company); General Partner of F.S. Fish Investment Company (private investment company) | 2012–2015 | |||
Frank Huttle III, | 59 | Executive Vice President and General Counsel Hudson Media Inc.; formerly Of Counsel to the firm of DeCotiis, Fitzpatrick & Cole, LLP | 2014–2015 | |||
4
Name and Position | Age | Principal Occupation for Past Five Years | Term of Office | |||
Michael Kempner, | 56 | President & Chief Executive Officer, MWW Group, Inc. | 2014–2015 | |||
Nicholas Minoia | 59 | Managing Partner of Diversified Properties and Diversified Realty Advisors, both full service real estate development companies specializing in the development, construction and management of multifamily communities. | 2009–2015 | |||
Joseph Parisi, Jr., | 53 | Chairman of the Board and CEO of Otterstedt Insurance Agency; Mayor, Borough of Englewood Cliffs | 2014–2015 | |||
Harold Schechter | 70 | Self Employed Financial Consultant (November 2010-Present); Chief Financial Officer, Global Design Concepts, Inc. (importer and distributor of accessories and handbags) (2005–November 2010) | 2007–2015 | |||
William A. Thompson | 57 | General Manager, Uniselect USA (auto parts distributor) (2007–Present); Vice President of Thompson & Co. (auto parts distributor) (prior years) | 1994–2015 | |||
Raymond J. Vanaria | 56 | Member, Malesardi, Quackenbush, Swift & Company, LLC (accounting firm) | 2007–2015 | |||
(1) | Does not include prior service on the Board of Directors of Legacy ConnectOne or the Bank. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
No Director of the Company, is also currently a director of a company having a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, or subject to ourthe requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Bank Act of 1940. However, Frank Baier was a director of Doral Financial Corporation from 2007 until 2011, and Michael Kempner served as a director of Lighting Science Group Corporation from January 2010 until May 2012.
The Company encourages all directors to attend the Company’s annual meeting. Each then current member of the Company’s Board of Directors their principal occupations for at leastattended the past five years, their ages,Company’s 2014 Annual Meeting of Shareholders.
Required Vote
DIRECTORS WILL BE ELECTED BY A PLURALITY OF THE VOTES CAST AT THE ANNUAL MEETING WHETHER IN PERSON OR BY PROXY.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE NOMINEES SET FORTH ABOVE.
5
INFORMATION ABOUT THE BOARD OF DIRECTORS
Frank Sorrentino III, Chairman of the year in which theyBoard and Chief Executive Officer, 53:Mr. Sorrentino became a directorChairman and Chief Executive Officer of Center and UCNB, other director positions held currently or at any time during the last five years, the number of shares of our common stock which they beneficially ownedCompany commencing as of January 31, 2011the closing of the Merger with Legacy ConnectOne on July 1, 2014. Prior to this, Mr. Sorrentino served as Chairman and their percentageChief Executive Officer of common stock ownershipLegacy ConnectOne and the Bank. Prior to becoming an officer of Legacy ConnectOne and the Bank, Mr. Sorrentino was a founder of the Bank and a builder and construction manager in Bergen County. Through his business contacts in our market, Mr. Sorrentino has been able to bring customers and investors to the Company, and his real estate experience in our market is of great value to the Board. In addition, as the Company’s senior executive officer, his insight on the Company’s operations is invaluable to the Board.
Stephen Boswell, Lead Independent Director, 61:Mr. Boswell was a founding organizer of January 31, 2011:the Bank. His firm, Boswell Engineering, Inc., for which he has served as President and Chief Executive Officer since 1990, is involved in many projects in our market. Through his business activities, Mr. Boswell has a strong sense of business conditions in our market that is invaluable to the Board.
| | | | | | |||||
| Name | Occupation | Age | Director Since | Shares of Common Sock Held Beneficially Directly and Indirectly | Percent of Shares Outstanding | |||||
| Alexander A. Bol | Owner, Alexander A. Bol A.I.A. (architectural firm); Chairman of the Board of Center Bancorp and UCNB (2001 – Present) | 63 | 1994 | 124,140(a) | 0.76 | |||||
| Anthony C. Weagley | President and Chief Executive Officer of Center and UCNB from August 23, 2007 to Present; Vice President and Treasurer of Center Bancorp and Sr. Vice President and Cashier of UCNB (prior periods) (Mr. Weagley continued to serve as Chief Financial Officer of Center until March 27, 2008 and as Chief Financial Officer of UCNB until February 2008) | 49 | Director of Center since September 30, 2010; Director of UCNB since December 17, 2007 | 45,514 | 0.28 | |||||
| James J. Kennedy | Managing Partner, KV1 Asset Management, LLC (hedge fund management company) (1998 – Present); Vice-President, Chemical Bank Treasury & Capital Markets Group (swaps & options trading Manager) Senior Managing Director, (1984 – 1990); Fuji Capital Markets Corp (derivatives market-maker) (1990 – 1997) | 55 | 2000 | 72,159 | 0.44 | |||||
| Howard Kent | Member, Real Estate Equities Group, LLC (real estate investment and management business) | 63 | 2008 | 262,036(b) | 1.61 | |||||
| Phyllis S. Klein | Partner, Donahue, Hagan, Klein, Newsome & O’Donnell, P.C. (law firm) | 49 | March 25, 2010 | 118 | 0.001 |
| | | | | | |||||
| Name | Occupation | Age | Director Since | Shares of Common Sock Held Beneficially Directly and Indirectly | Percent of Shares Outstanding | |||||
| Nicholas Minoia | Member, Diversified Properties, L.L.C. (full-service real estate group) | 55 | 2009 | 12,708 | 0.08 | |||||
| Harold Schechter | Self Employed Financial Consultant (November 2010 – Present) Chief Financial Officer, Global Design Concepts, Inc. (importer and distributor of accessories and handbags) (2005 – November 2010) | 66 | 2007 | 13,660 | 0.08 | |||||
| Lawrence B. Seidman | Manager of various Investment funds; also a director of Stonegate Bank (January 2009 – Present) | 63 | 2007 | 3,587,881(c) | 22.03 | |||||
| Alan H. Straus | Portfolio Manager of Omega Advisors, Inc. (investment management firm) (June 2009 – Present); Ahab Capital (Senior Research Analyst) (November 2007 – October 2008); Lord, Abbett & Co. LLC (Senior Research Analyst) (September 2002 – September 2007) | 48 | January 1, 2011 | 14,275 | 0.09 | |||||
| William A. Thompson | General Manager, Uniselect USA (auto parts distributor) (2007 – Present); Vice President of Thompson & Co. (auto parts distributor) | 53 | 1994 | 85,861(d) | 0.53 | |||||
| Raymond Vanaria | Member, Malesardi, Quackenbush, Swift & Company, LLC (accounting firm) Vice-Chairman of the Board of Center Bancorp and UCNB (December 28, 2010 – Present) | 52 | 2007 | 69,150(e) | 0.42 |
The shares set forth in the table above include the following number of shares subject to options exercisable by April 1, 2011: Frank Baier, Director, 49:Mr. Bol, 13,850 shares; Mr. Weagley, 14,226 shares; Mr. Kennedy, 57,957 shares; Mr. Kent, 2,605 shares; Ms. Klein, 0 shares; Mr. Minoia, 868 shares; Mr. Schechter, 5,209 shares; Mr. Seidman, 5,209 shares; Mr. Straus, 0 shares; Mr. Thompson, 12,155 shares; and Mr. Vanaria, 5,209 shares.
As of January 31, 2011, Richard Patryn, ourBaier currently serves as Executive Vice President Treasurerand Chief Financial Officer of Continental Grain Company, a diversified operating and investment company. Mr. Baier has an extensive background in finance, including service as Executive Vice President and Chief Financial Officer of Independence Community Bank Corp. from June 2001 until September 2005, Chief Financial Officer and Chief Accounting Officer of Securities Industry and Financial Markets Association from June until September of 2008, Special Advisor to Washington Mutual from September 2008 until October 2008, Chief Financial Officer of Capital Access Network, Inc from February 2009 until February 2010, and a Partner at Columbia Financial Partners LP, from May 2010 until June 2011. Mr. Baier also served as Legacy ConnectOne’s Executive Vice President and Chief Financial Officer from November 2010July 2011 through September 2012. Mr. Baier’s extensive background and understanding of finance proves invaluable to March 28, 2011, beneficially owned 15,860 shares of our common stock, including 0 shares subject to options exercisable by April 1, 2011; Arthur M. Wein, our Vice President and Chief Operating Officer, beneficially owned 5,331 shares of our common stock, including 0 shares subject to options exercisable by April 1, 2011; Mark S. Cardone, our Vice President and Branch Administrator, beneficially owned 11,287 shares of our common stock, including 6,130 shares subject to options exercisable by April 1, 2011; and John J. Lukens, our Vice President and Senior Credit Administrator, beneficially owned 256 shares of our common stock, including 0 shares subject to options exercisable by April 1, 2011.the Board.
As of January 31, 2011, the total number of shares of our common stock directly and beneficially owned by all of our directors and executive officers as a group as of such date (18 persons) amounted to 4,324,669 shares or 27% of the common stock outstanding, including 123,418 shares subject to options exercisable by April 1, 2011. Vincent Tozzi was appointed as Vice President, Treasurer and Chief Financial Officer of Center Bancorp on March 28, 2011. Accordingly, Mr. Patryn is no longer considered an executive officer of Center Bancorp. Mr. Tozzi did not own any shares of our common stock as of January 31, 2011.
There is no family relationship, by blood, marriage or adoption, between any of the foregoing directors and any other officer, director or employee of Center Bancorp or Union Center National Bank.
Our Board’s Compensation Committee consists of Alexander A. Bol, (Chairman), Phyllis S. Klein, Lawrence B. SeidmanDirector, 67:Mr. Bol founded Bol Architecture in 1974, and William A. Thompson. The responsibilities of the Compensation Committee are set forth in the Compensation Discussion and Analysis set forth below.
Our Board’s Audit Committee consists of Raymond Vanaria (Chairman), James J. Kennedy, Howard Kent, Harold Schechter and William Thompson. The Audit Committee has been established by our Board of Directors for the purpose of overseeing the accounting and financial reporting processes of Center Bancorp and audits of our financial statements and has responsibility for monitoring our financial reporting systems, reviewing our financial statements, hiring and discharging our independent accountants and supervising the relationship between Center Bancorp and our independent accountants.
Our Board’s Nominating Committee consists of Alexander A. Bol (Chairman), Alan H. Straus, James J. Kennedy, Howard Kent, Phyllis S. Klein, Harold Schechter, Lawrence B. Seidman, William A. Thompson and Raymond Vanaria. For additional information regarding the Nominating Committee, see “Nominating Committee Matters”.
Our Board’s Executive Committee consists of Alexander A. Bol (Chairman), Alan H. Straus, James J. Kennedy, Howard Kent, Phyllis S. Klein, Harold Schechter, Lawrence B. Seidman, William A. Thompson and Raymond Vanaria. The Executive Committee generally performs the functions of the full Board for determinations requiring the vote solely of independent directors.
During 2010, the Compensation Committee met five times, the Audit Committee met seven times, the Nominating Committee met one time, the Executive Committee met one time and our Board of Directors met 12 times. All directors attended at least 75% of the Board and committee meetings that they were required to attend.
Board Leadership Structure and Role in Risk Oversight
The Company currently has, and historically has had, an independent Chairman of the Board, separate from the Chief Executive Officer. The Board believes it is important to have an independent director in a Board leadership position at all times. Having an independent Chairman enables non-management directors to raise issues and concerns for Board consideration without immediately involving management. The Chairman also serves as a liaison between the Board and senior management. The Company’s Board has determinedPrincipal of that the current structure, an independent Chairman, separate from the Chief Executive Officer,firm. Mr. Bol is the most appropriate structure at this time.
The Audit Committee is responsible for overseeing risk management. The full Board of Directors regularly engages in discussions about risk management and receives reports on this topic from executive management, other officersa member of the CompanyAmerican Institute of Architects and the ChairmanNew Jersey Society of Architects and is certified by the Audit Committee. While the BoardNational Council of Directors oversees risk management, managementArchitectural Registration Boards. Mr. Bol is responsible for the day-to-day risk management process. The Company believes that its Board leadership structure supports this approach to risk management.
During 2010, the Company’s Senior Risk Officer evaluated all of the compensation plans in which the Company’s employees, including executive officers, participate,a New Jersey licensed Professional Planner and reported to the Compensation Committee that none individually, or taken together, was reasonably likely to have a material adverse effect on the Company. No component of compensation was considered to encourage undue risk. The Compensation Committee accepted the Senior Risk Officer’s report. See “Compensation Committee Report.”
Board Qualifications
The Board believes it isregistered Architect in the best interestsstates of the CompanyNew Jersey, Massachusetts, New York, and its stockholders for the Board to encompass a diverse range of talent, skill and expertise sufficient to provide sound and prudent guidance with respect to the Company’s operations and interests. However, at all times a majority of the Board must be “independent directors” as defined from time to time by the listing requirements of the Nasdaq Global Select Market and any specific requirements established by the Board. Each director also is expected to:
In addition, the Board of Directors has determined that the Board as a whole must have the right diversity, mix of characteristics and skills for the optimal functioning of the Board in its oversight of the Company. The Board believes it should be comprised of persons with skills in areas such as:
In addition to the targeted skill areas, the Board looks for a strong record of achievement in key knowledge areas that it believes are critical for directors to add value to a Board, including:
As part of its periodic self-assessment process, the Board annually determines the diversity of specific skills and characteristics necessary for the optimal functioning of the Board in its oversight of the Company over both the short- and longer-term. The Board has adopted a policy regarding the director selection process that requires the Nominating Committee to assess the skill areas currently represented on the Board and those skill areas represented by directors expected to retire or leave the Board in the near future against the target skill areas established annually by the Board, as well as recommendations of directors regarding skills that could improve the overall quality and ability of the Board to carry out its function. The Committee then establishes the specific target skill areas or experiences that are to be the focus of a director search, if necessary. Specific qualities or experiences could include matters such as experience in banking, financial or technological expertise, experience in situations comparable to the Company’s, leadership experience and relevant geographical experience. The effectiveness of the Board’s diverse mix of skills and experiences is considered as part of each Board self-assessment. See also “Nominating Committee Matters.”
The Board considered the following attributes of its nominees in determining that each is qualified to serve as a director of Center Bancorp:
Frederick Fish, Director, 70:Mr. WeagleyFish was appointed as a director of Center Bancorp on September 30, 2010. His specific knowledge and understanding of the Company and Union Center National Bank on March 30, 2012. Mr. Fish’s extensive knowledge of, and experience in, the Bank’s marketplacereal estate industry, his familiarity with complex financial transactions and his significant involvement with various charitable endeavors, led the community, gained through hisBoard to conclude that Mr. Fish should serve as a director.
Frank Huttle III, Director, 59:Mr. Huttle was a founding organizer of the Bank. He has over 30 years of experience in the insurance, mortgage banking and real estate industries formerly as a practicing attorney and partner at DeCotiis, Fitzpatrick and Cole, prior to taking his current position, and as a certified public accountant and Partner at Touche Ross & Co. Mr. Huttle has served as Executive Vice President and General Counsel to Hudson Media, Inc., a diversified magazine service and holding company since February, 2010. His experience as a transactional attorney and as a businessman in our market allows him to provide unique insight to the Board on a variety of matters, including current business conditions impacting our customers. Mr. Huttle also currently serves as the mayor of the Borough of Englewood, New Jersey.
Michael Kempner, Director, 56:Mr. Kempner was a founding organizer of the Bank. He has over 30 years of public relations and media experience and has served as President and Chief Executive Officer and, in prior years, as Chief Financial Officer, led the Board to conclude that this nominee should serve as a director of Center Bancorp.
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Nicholas Minoia, Director, 59:Mr. Minoia’s experience as a principal of a full-service real estate group and his knowledge about the real estate market led the Board to conclude that this nomineeMr. Minoia should serve as a directordirector.
Joseph Parisi, Jr., Director, 53:Mr. Parisi was a founding organizer of Center Bancorp.
Harold Schechter, Director, 70:Mr. Schechter’s financial acumen and experience as a chief financial officer of an import and distribution business, and his ability to understand complex financial matters, led the Board to conclude that this nomineeMr. Schechter should serve as a director of Center Bancorp.
Raymond J. Vanaria, Director, 56:Mr. Vanaria’s knowledge of financial and accounting matters, and his ability to understand and analyze complex financial issues, gained during his many years as an accountant, led the Board to conclude that this nomineeMr. Vanaria should serve as a director.
Diversity Statement
Although we have not adopted a formal policy on diversity, the Board considers diversity when selecting candidates for board service. When the Board determines there is a need to fill a director of Center Bancorp.
The biographiesposition, we begin to identify qualified individuals for consideration. We seek individuals that possess skill sets that a prospective director will be required to draw upon in order to contribute to the Board, including professional experience, education, and local knowledge. While education and skills are important factors, we also consider how candidates will contribute to the overall balance of the nominees are containedBoard, so that we will benefit from directors with different perspectives, varying view points and wide-ranging backgrounds and experiences. We view and define diversity in its broadest sense, which includes gender, ethnicity, education, experience and leadership qualities.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND MANAGEMENT
Security Ownership of Management
The following table sets forth information as of March 27, 2015 regarding the number of equity securities beneficially owned by all Directors, executive officers described in the compensation table, and by all Directors and executive officers as a group. Beneficial ownership includes shares, if any, held in the name of nomineesthe spouse, minor children or other relatives of the nominee living in such person’s home, as well as shares, if any, held in the name of another person under an arrangement whereby the Director or executive officer can vest title in himself at once or within sixty (60) days. Beneficially owned shares also include shares over which the named person has sole or shared voting or investment power, shares owned by corporations controlled by the named person, and shares owned by a partnership in which the named person is a partner.
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|
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| ||||||||||
Name | Common Stock | Percentage | ||||||||||||
Directors: |
|
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|
| ||||||||||
Frank Sorrentino III |
|
| 689,104 | (1) |
|
|
| 2.29 | % |
| ||||
Frank W. Baier |
|
| 58,967 | (2) |
|
|
| 0.20 | % |
| ||||
Alexander A. Bol |
|
| 152,023 | (3) |
|
|
| 0.51 | % |
| ||||
Stephen T. Boswell |
|
| 289,539 | (4) |
|
|
| 0.97 | % |
| ||||
Frederick Fish |
|
| 26,751 | (5) |
|
|
| 0.09 | % |
| ||||
Frank Huttle III |
|
| 247,224 | (6) |
|
|
| 0.83 | % |
| ||||
Michael Kempner |
|
| 405,145 | (7) |
|
|
| 1.35 | % |
| ||||
Nicholas Minoia |
|
| 28,955 | (8) |
|
|
| 0.10 | % |
| ||||
Joseph Parisi Jr. |
|
| 255,664 | (9) |
|
|
| 0.85 | % |
| ||||
Harold Schechter |
|
| 27,401 | (10) |
|
|
| 0.09 | % |
| ||||
William A. Thompson |
|
| 105,256 | (11) |
|
|
| 0.35 | % |
| ||||
Raymond J. Vanaria |
|
| 100,395 | (12) |
|
|
| 0.34 | % |
| ||||
Executive Officers Who Are Not Directors: |
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| ||||||||||
William S. Burns |
|
| 46,768 | (13) |
|
|
| 0.16 | % |
| ||||
Laura Criscione |
|
| 83,972 | (14) |
|
|
| 0.28 | % |
| ||||
Elizabeth Magennis |
|
| 50,234 | (15) |
|
|
| 0.17 | % |
| ||||
Anthony C. Weagley* |
|
| 72,218 |
|
| 0.24 | % |
| ||||||
Francis R. Patryn* |
|
| 16,960 |
|
| 0.06 | % |
| ||||||
Arthur M. Wein* |
|
| 20,539 |
|
| 0.07 | % |
| ||||||
James W. Sorge* |
|
| 4,521 |
|
| 0.02 | % |
| ||||||
|
|
|
|
| ||||||||||
As a Group (20 persons) |
|
| 2,681,635 | (16) |
|
|
| 8.80 | % |
| ||||
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|
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| ||||||||||
(1) | Includes (i) 12,500 shares held in the name of Citigroup Global Markets f/b/o Frank Sorrentino III, IRA, (ii) 53,241 shares held in street name at Citigroup Global Markets, (iii) 2,011 shares held in trust for Mr. Sorrentino’s children, (iv) 170,872 shares purchasable upon the exercise of stock options and (v) 31,847 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Includes 1,352 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) | Includes (i) 2,842 shares held by his spouse, and (ii) 24,311 shares purchasable upon the exercise of stock options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) | Includes (i) 55,602 shares purchasable upon the exercise of stock options and (ii) 1,352 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) | Includes (i) 3,473 shares purchasable upon the exercise of stock options, and (ii) 1,352 shares of restricted stock subject to forfeiture | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) | Includes (i) 14,487 shares held in the name of Citigroup Global Markets f/b/o Frank Huttle III, IRA, (ii) 3,375 shares held by Mr. Huttle and his wife in a joint tenancy, (iii) 2,500 shares held as trustee of the Francesca Huttle 2004 Family Trust, (iv) 2,500 shares held as trustee of the Alexandra Huttle 2004 Family Trust, (v) 5,031 shares held in the name of Mr. Huttle’s spouse, (vi) 2,500 shares held by an LLC in which spouse is a member, (vii) 66,845 shares purchasable upon the exercise of stock options and (viii) 1352 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(7) | Includes (i) 77,309 shares purchasable upon the exercise of stock options and (ii) 1,352 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(8) | Includes (i) 1,056 shares owned jointly with Mr. Minoia’s spouse, (ii) 13,892 shares purchasable upon the exercise of stock options and (iii) 1,352 shares of restricted stock subject to forfeiture | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(9) | Includes (i) 3,333 shares held in the name of Hudson Real Estate Holding, LLC, of which Mr. Parisi is managing director and owner of one-third, (ii) 11,296 shares held in the name of Otterstedt Insurance Agency, of which Mr. Parisi is part owner, (iii) 2,323 shares held by Mr. Parisi as custodian for his children, (iv) 31,508 shares held at Bear Stearns Security Corp (v) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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71,574 shares purchasable upon the exercise of stock options and (vi) 1,352 shares of restricted stock subject to forfeiture. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(10) | Includes (i) 3,997 shares owned jointly with Mr. Schechter’s spouse, (ii) 17,365 shares purchasable upon the exercise of stock options and (iii) 1,352 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(11) | Includes (i) 13,579 shares held by Mr. Thompson’s spouse and children, (ii) 28,653 shares purchasable upon the exercise of stock options and (iii) 1,352 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(12) | Includes (i) 5,085 shares held by Mr. Vanaria’s spouse and children (ii) 20,838 shares purchasable upon the exercise of stock options and (iii) 1,352 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(13) | Includes 10,863 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(14) | Includes (i) 300 shares held for her daughter, (ii) 54,218 shares purchasable upon the exercise of stock options, and (iii) 3,678 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(15) | Includes (i) 12,862 shares purchasable upon the exercise of stock options and (ii) 11,488 shares of restricted stock subject to forfeiture. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(16) | Includes 617,814 shares purchasable upon the exercise of stock options. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
* | Messrs/ Weagley, Patryn, Wein, and Sorge ceased to be executive officers of the Company as of the closing of the Merger on July 1, 2014. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
There are no shareholders other than those set forth above under “Proposal 1 — Election of Directors”.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
General
As partwho are known to the Company to beneficially own 5% or more of the SEC’s executive compensation disclosure requirements, issuers must provide a “Compensation Discussion and Analysis” in which issuers explain the material elements of their compensation of executive officers by describing the following:
Board of Directors; Independence; Committees
Meetings of the compensation program;
Our compensation philosophy is dictated by the Compensation Committee of our Board of Directors. The duties and responsibilities of the Compensation Committee, which consists entirely of independent directorsmeetings of the Board of Directors and Board committees on which the respective Directors served.
A majority of the Board consists of individuals who are to:
Code of Business Conduct and Ethics
The Board of Directors has adopted a Code of Conduct governing our Chief Executive Officer and senior financial officers, as required by the Sarbanes-Oxley Act and SEC regulations, as well as the Board of Directors and other senior members of management. Our Code of Conduct governs
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such matters as conflicts of interest, use of corporate opportunity, confidentiality, compliance with law and the like. Our Code of Conduct is available on our website at www.cnob.com.
Committees
Committees of Our Board of Directors
Audit Committee.We maintain an Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee is responsible for the selection of the independent registered public accounting firm for the annual audit and to establish, and oversee the adherence to, a system of internal controls. The Audit Committee reviews and accepts the reports of our employee benefit plans;
Audit Committee Report
The Audit Committee meets periodically to consider the adequacy of the Company’s financial controls and the objectivity of its financial reporting. The Audit Committee meets with the Company’s independent auditors and the Company’s internal auditors, all of whom have unrestricted access to the Audit Committee.
In connection with this year’s financial statements, the Audit Committee has reviewed and discussed the Company’s audited financial statements with the Company’s officers and Crowe Horwath LLP, our independent auditors. We have discussed with Crowe Horwath LLP, the matters required to be discussed by Statement on Auditing Standards No. 61, (“Communication with Audit Committees”). We also have received the written disclosures and letters from Crowe Horwath LLP required by Independence Standards Board Standard No. 1 (“Independence Discussions with Audit Committees”), and have discussed with representatives of Crowe Horwath LLP their independence.
Based on these reviews and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year 2014 for filing with the U.S. Securities and Exchange Commission.
Raymond Vanaria, Chair
Frank Huttle, III
Frank W. Baier,
Harold Schechter
Compensation Committee.
Charter.The Board has defined the duties of its Compensation Committee in a charter. A copy of the current Compensation Committee charter is available on the Company’s website at www.cnob.com under Governance Documents.
Authority, Processes and Procedures.The Compensation Committee is responsible for administering the Company’s equity compensation plans, for establishing the compensation of our chief executive officer;
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Committee may, and does in fact, delegate authority with respect to the compensation of employees in general, the Compensation Committee retains overall supervisory responsibility for employee benefit plans;
Our chief executive officer information from senior staff members, as well as outside compensation consultants, regarding issues relevant to determinations made by the Compensation Committee. Mr. Sorrentino participates in determinationsCommittee deliberations regarding the compensation and design of our benefit programs for all employees,other executive officers, but does not participate in settingdeliberations regarding his own compensation.
Our Compensation Objectives and the Focus of Our Compensation Rewards
We believe that an appropriate compensation program should draw a balance between providing rewards to executive officers while at the same time effectively controlling compensation costs. We reward executive officers in order to attract highly qualified individuals, to retain those individuals in a highly competitive marketplace for executive talent and to incentivize them to perform in a manner that maximizes our corporate performance. Accordingly, we have sought to structure our executive compensation with a focus on pay-for-performance. We seek to offer executive compensation programs that align each individual’s financial incentives with our strategic direction and corporate values.
We view executive compensation as having three key elements:
These programs aim to provide our executives with an overall compensation package that is competitive with comparable financial institutions, and aligns individual performance with our long-term business objectives.
We annually review our mix of short term performance incentives versus longer term incentives, and incorporate in our compensation reviews the data from studies performed as to appropriate competitive levels of compensation and benefits. We do not have set percentages of short term versus long term incentives. Instead, we look to provide a reasonable balance of those incentives.
We also periodically “benchmark” our compensation programs to industry available databases and to a peer group. Consultants.The process has involved hiring independent compensation consulting firms to perform studies that employ the following processes:
Center’s Compensation Committee has engagedrecognizes that it is essential to receive objective advice from an outside compensation consultant. Prior to consummation of the Merger, the Committee utilized the services of Meyer Chatfield Compensation Advisors (MCCA)(“MCCA”), an independent compensation consulting firm strictly devoted to the community banking industry, as its outside consultant. During 2010, MCCA providedwas engaged by the Compensation Committee and did not take direction from the Company’s executives, unless specifically advised to do so at the direction of the Compensation Committee. Currently, the Compensation Committee utilizes Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant. Meridian had served as the compensation consultant to the Compensation Committee of Legacy ConnectOne.
Meridian reports directly to the Compensation Committee and attends meetings as requested. The Compensation Committee has assessed Meridian’s independence relative to the NASDAQ listing rules and determined that there are no conflicts of interest. The Compensation Committee also closely examines the safeguards and steps Meridian takes to ensure that its executive compensation consulting services are objective. The Compensation Committee takes into consideration that:
• | The Compensation Committee directly hired and has the authority to terminate Meridian’s engagement; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | The Compensation Committee solely determined the terms and conditions of Meridian’s engagement, including the fees charged; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Meridian and its consultants have direct access to members of the Compensation Committee during and between meetings; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Meridian does not provide any other services to the Company, the Bank, its directors or executives; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Interactions between Meridian and its consultants and management generally are limited to discussions on behalf of the Compensation Committee and information presented to the Compensation Committee for approval. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nominating Committee Matters
Independence of Nominating Committee Members.All members of the Nominating Committee of the Board have been determined to be “independent directors” pursuant to the definition contained in Rule 5605 of the National Association of Securities Dealers’ Marketplace rules.
Procedures for Considering Nominations Made by Shareholders.The Nominating and Corporate Governance Committee charter describes procedures for nominations to be submitted by shareholders and other third-parties, other than candidates who have previously served on the board or who are recommended by the Board. The charter states that a nomination must be delivered to Company’s corporate Secretary at the principal executive offices of the Company not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the close of business on the 10th day following the day on which public announcement of the date of such meeting is first made by us. The public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a notice as described above. The charter requires a
11
nomination notice to set forth as to each person whom the proponent proposes to nominate for election as a director: (a) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Schedule 14A under the Securities Exchange Act of 1934, as amended (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director it elected), and (b) information that will enable the Nominating Committee to determine whether the candidate or candidates satisfy the criteria established pursuant to the charter for director candidates.
Qualifications.The charter of the Nominating and Corporate Governance Committee describes the minimum qualifications for nominees to the Board and the qualities or skills that are necessary for directors to possess. Each nominee:
• | must satisfy any legal requirements applicable to members of the board; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | must have business or professional experience that will enable such nominee to provide useful input to the board in its deliberations; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | must have a reputation, in one or more of the communities serviced by the Company and its subsidiaries, for honesty and ethical conduct; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | must have a working knowledge of the types of responsibilities expected of members of the board of directors of a bank holding company; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | must have experience, either as a member of the board of directors of another public or private company or in another capacity that demonstrates the nominee’s capacity to serve in a fiduciary position. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Identification and Evaluation of Candidates for the Board.Candidates to serve on the Board will be identified from all available sources, including recommendations made by shareholders. The Nominating Committee’s charter provides that there will be no differences in the manner in which the nominating committee evaluates nominees recommended by shareholders and nominees recommended by the Committee or management, except that no specific process shall be mandated with respect to the nomination of any individuals who have previously served on the Board. The evaluation process for individuals other than existing board members will include:
• | a review of the information provided to the Nominating Committee by the proponent; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | if requested, a review of reference letters from at least two sources determined to be reputable by the Nominating Committee; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | a personal interview of the candidate, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
together with a review of such other information as the Nominating Committee shall determine to be relevant.
Third Party Recommendations.In connection with the 2015 annual meeting, the Nominating Committee did not receive any nominations from any shareholder or group of shareholders that owned more than 5% of common stock for at least one year.
Compensation Committee Interlocks and Insider Participation
There are no compensation for the seven most senior executivescommittee “interlocks,” which generally means that no executive officer of the Company or the Bank served as a director or member of the compensation committee of another entity, one of whose executive officers serves as a director or member of the Compensation Committee.
Stock Ownership Guidelines
In order to ensure alignment of interests between Board members and the shareholders of the Company, the Company expects all Board members will have a meaningful investment in the common stock of the Company. To ensure this meaningful investment, all Board members will be required to own, directly or indirectly, at least $500,000 in initial market value of the Company’s common stock within 24 months of the director’s initial election.
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Board Leadership; Lead Independent Director
Historically the Company had an independent Chairman of the Board, separate from the Chief Executive Officer. However, upon consummation of the Merger with Legacy ConnectOne, the Board appointed Mr. Frank Sorrentino, the Company’s President and CEO, to serve as Chairman. The Board considered the fact that Mr. Sorrentino had served as Chairman, President and CEO of Legacy ConnectOne, believed that Board structure had worked well for Legacy ConnectOne and noted the success that Mr. Sorrentino had in growing Legacy ConnectOne. The Board believes that the combination of these two roles at this time provides the benefit of a more consistent communication and coordination throughout the organization. This in turn will result in a more effective and efficient implementation of corporate strategy and integration of the separate cultures of the Company and Legacy ConnectOne, and is further important in unifying the Company’s strategy behind a single vision.
Our Board has also appointed Mr. Stephen Boswell, an independent director, to serve as Lead Independent Director of the Board. As Lead Independent Director, Mr. Boswell presides over all Board meetings when the Chairman is not present, and presides over meetings of the non-management directors held in executive session. The Lead Independent Director has the responsibility of meeting and consulting with the Chairman and Chief Executive Officer on Board and committee meeting agendas, acting as a liaison between management and the non-management directors, including maintaining frequent contact with the Chairman and Chief Executive and advising him on the efficiency of the Board meetings, and facilitating teamwork and communication between the non-management directors and management.
Risk Oversight
Risk is an inherent part of the business of banking. Risks faced by the Bank include credit risk relating to its loans and interest rate risk related to its entire balance sheet. The Board of Directors oversees these risks through the adoption of policies and by delegating oversight to certain committees, including the CEO. Audit Committee and the Loan and Asset/Liability Committees of the Bank. These committees exercise oversight by establishing a corporate environment that promotes timely and effective disclosure, fiscal accountability and compliance with all applicable laws and regulations.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The Compensation Committee (the “Committee”) and the Company are both committed to a pay-for-performance philosophy. This Compensation Discussion & Analysis (CD&A) provides information providedabout the strategies and policies developed to ensure that executive compensation is strongly correlated with the Company’s overall performance and the individual performance of our executives.
The Merger and Management Changes
On July 1, 2014, we completed the Merger to create a financial institution with more than $3 billion in assets and 24 branches across Bergen, Essex, Hudson, Mercer, Monmouth, Morris and Union counties. The combined company is one of the largest New Jersey-based banking institutions with increased scale, technology and lending capabilities serving middle market commercial businesses.
Upon the closing of the merger, the Company was compiled fromthe surviving entity but assumed the name “ConnectOne” and adopted the ticker symbol “CNOB.” As a number of nationalresult, this CD&A discloses the 2014 compensation policies and regional salary surveysdecisions for the Company’s Named Executive Officers pre-Merger (“Pre-Merger Compensation”) as well as comparable public peers. MCCA’sfor the post-Merger executive team (“Post-Merger Compensation”).
The pre-Merger named executives are:
Pre-Merger NEOs | Role | |
Anthony C. Weagley | Chief Executive Officer | |
Francis R. Patryn | Chief Financial Officer | |
Arthur M. Wein | Vice President, Chief Operating Officer | |
James W. Sorge | Vice President, Compliance Officer |
Following the Merger, these executives were either no longer executive officers or no longer employed by the Company.
After the Merger closed, we announced our ongoing leadership team including our named executive officers:
Post-Merger NEOs | Role | |
Frank Sorrentino III | Chairman, President, & Chief Executive Officer | |
William S. Burns | Executive Vice President & Chief Financial Officer | |
Elizabeth Magennis | Executive Vice President & Chief Lending Officer | |
Laura Criscione | Executive Vice President & Chief Compliance Officer | |
Aditya Kishore | Executive Vice President Chief Information/Operations Officer |
Executive Summary
2014 was a transformational year for the Company. As a result of the Merger and continued organic growth, the Company grew from $1.67 billion in total assets and 16 offices at December 31, 2013 to $3.45 billion in total assets and 24 offices at year end 2014. While completing the integration of the Company and Legacy ConnectOne, we were also able to grow our loan portfolio by more than $231 million over the second half of the year. In determining compensation review assistedfor 2014, the Compensation Committee considered the Company’s performance on a standalone basis as well as management’s performance in executing the Merger and integrating the two companies.
2014 Business Highlights
We delivered the following results in 2014:
• | Completed the merger of ConnectOne and Center on July 1, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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• | Realized meaningful cost efficiencies, with virtually all estimated cost savings to be derived from the Merger realized as of January 1, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Increased loans receivable by approximately $225 million and total deposits by approximately $150 million through organic growth during the second half of 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Expanded loan generation and support teams while achieving meaningful efficiencies in executive, back office and administrative areas | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Maintained strong asset quality, with a ratio of non-accrual loans to total loans receivable of 0.46% at December 31, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance-Based Compensation
Pay-for-performance is a key objective of our executive compensation program. Our incentives for 2014 considered performance goals set before the Merger and the effectiveness of the integration of the two institutions. A significant amount of compensation in the post-Merger 2015 programs is performance-based (annual incentives and performance based equity awards). Our objective is to design our compensation program to reward executives for driving our business strategy and delivering results to our stockholders.
Compensation Design Principles and Governance Best Practices
The design principles of our executive compensation programs are intended to protect and promote the interests of our stockholders. Below we summarize certain practices we have implemented to drive performance and those we have not implemented because we do not believe they would serve our stockholder’s long-term interests.
• | What We Do: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Pay for Performance—We provide a significant portion of pay based on performance (short and long-term) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Sound Risk Management—We discourage excessive risk taking and have designed our incentive plans with appropriate design features | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Clawback—Each incentive compensation agreement provides for clawback in the event of a financial restatement | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Double-Trigger Change-in-Control (CIC)—CIC benefits pursuant to employment or change in control agreements are only paid upon a termination event following a CIC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Independence—The Committee engages an independent compensation consultant | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | What We Don’t Do: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Tax Gross-Ups—We do not provide excise tax gross-ups on benefits or in change-in-control agreements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Repricing—Our equity plan does not permit repricing of stock options that are out-of-the-money | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Excessive Perquisites—Our executives only receive perquisites that are business-related | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Results of 2014 Say on Pay Advisory Vote
The Company solicited a shareholder advisory vote on executive compensation in 2014 which received 96% approval. Company shareholders approved a bi-annual advisory vote, thus our next shareholder vote will be in 2016.
Executive Compensation Objectives and Policies
We use our executive compensation programs to align the interests of executive officers with our shareholders. Our programs are designed to attract, retain and motivate leadership to support our growth and sustain our competitive advantage. Our compensation opportunities are aligned with
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the competitive market with actual pay that is designed to vary dependent on performance. We utilize a balance of fixed and variable pay components, cash and equity, and short and long-term performance horizons to determine our pay. Our compensation program is designed to support our business strategies, align our pay with our performance and reinforce sound compensation governance to mitigate excessive risk taking. The table below gives an overview of the compensation components used in our program and matches each with one or more of the objectives described above.
Compensation Component | Purpose/Objective | ||||||||
Base Salary | • | Provides a competitive level of fixed income based on role, experience | |||||||
Annual Incentive Plan | • | Motivates and rewards executives for performance on key financial, | |||||||
• | Varies pay based on performance (higher performance will result in | ||||||||
Long-Term Incentive Plan | • | Drives value creation for stockholders over the long-term | |||||||
• | Aligns executives’ interests with those of shareholders through | ||||||||
• | Encourages retention through multiple year vesting | ||||||||
• | Motivates and rewards executives for performance—vesting and value | ||||||||
Other Benefits | • | Provides a base level of competitive compensation for executive talent | |||||||
Employment Agreements/Severance & CIC Agreements | • | Provides employment security to key executives | |||||||
• | Focuses executives on company performance and transactions that are | ||||||||
Setting Annual Compensation
Roles & Responsibilities
Compensation Committee
The Compensation Committee of the Board of Directors is responsible for discharging the Board’s duties in executive compensation matters and for administering the Company’s incentive and equity-based plans. This includes oversight of the total compensation programs for the Company’s CEO and other executive officers, including all Named Executive Officers. The Committee is comprised solely of independent directors. The Committee receives input and data from Finance and Human Resources functions as well as outside consultants and advisors to provide external reference and perspective.
The Committee reviews all compensation components for the Company’s Chief Executive Officer and other executive officers, including base salary, annual incentive, long-term incentives/equity and other benefits and perquisites. The Committee reviews the Chief Executive Officer’s performance annually and makes decisions regarding the Named Executive Officers’ compensation, including base salary, incentives and equity grants based on this review. The Compensation Committee reviews its decision making relateddecisions with the full Board of Directors.
The Committee has the sole authority and resources to obtain advice and assistance from internal or external legal, human resources, accounting or other advisors, or consultants as it deems desirable or appropriate. The Committee has direct access to outside advisors and consultants
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throughout the year as they relate to executive compensation. The Committee evaluatedhas direct access to and meets periodically with the data presented,compensation consultant independently of management.
Independent Compensation Consultant
Prior to the Merger, Legacy ConnectOne retained Meridian as its relevance to Centercompensation consultant and the recommendationsCompany retained MCCA to act as the Committees’ independent consultant. Following the Merger, the Company engaged Meridian as its compensation consultant. Our consultants aid the Committee in satisfying its responsibilities. Meridian reports directly to the Committee and performs no other work for the Company.
The Consultants reported directly to the Committee and carried out their responsibilities to the Committee in coordination with the Company’s Finance and Human Resources staff as requested by the Committee. The Committee Chair has regular contact with the Consultants outside meetings as appropriate. The Committee has reviewed and concluded that Meridian’s consultation services, and that prior to the merger, MCCA’s consultation services, comply with the standards adopted by the SEC and by Nasdaq with respect to compensation advisor independence and conflicts of interest.
Management
Although the Committee makes independent determinations on all matters related to compensation of the consultant.Named Executive Officers, certain members of management may be requested to attend or provide input to the Committee. Input may be sought from the Chief Executive Officer, Chief Financial Officer, or others to ensure the Committee has the information and perspective it needs to carry out its duties.
In particular, the Committee seeks input from the Chief Executive Officer on matters relating to strategic objectives, Company performance goals and input on his assessment of the Named Executive Officers, including contribution and individual performance of each of his direct reports. The Chief Executive Officer and the Chief Financial Officer often assist the Committee on matters of design, administration and operation of the Company’s compensation programs.
Although executives may provide insight, suggestions or recommendations regarding executive compensation, they are not present during the Compensation Committee’s deliberations or vote. Only Compensation Committee members vote on decisions regarding executive compensation. The Committee regularly meets in executive session without management present. While the Chief Executive Officer makes recommendations on other Named Executive Officers, the Committee is ultimately responsible for approving compensation for all Named Executive Officers. The Chief Executive Officer’s compensation is discussed in executive session without members of management, including the Chief Executive Officer.
Peer Group & Competitive Benchmarking
In light of the pending Merger, the Company did not conduct a competitive benchmark analysis for 2014 compensation. Following the Merger, Meridian provided market compensation data to the Compensation Committee based on the peer group set forth below. This data was used to assist the Committee in setting pay levels and target pay opportunities (short and long-term) for the post-merger pay programs.
The Committee worked with the consultant to develop a peer group that was appropriate for the newly-combined Company. The Committee considered commercial banks that were similarly-sized (approximately1/2x to 2x the Company’s post-Merger assets) and primarily located in similar regions. Based on this assessment, the Committee approved the following peer group was utilized by MCCA.to be used for benchmarking purposes. The median assets for the peerthis group are $1,280,311,000, as compared to $1,187,210,000 for Center Bancorp.
MCCA also presented the Committee with a similar review of directors’ compensation. In addition, MCCA assisted the Committee in evaluating the inherent risk imbedded in the Company’s incentive plans in compliance with TARP and other regulatory requirements.
MCAA indicated that Center’s compensation of executives is below the median of the peer group, and recommended increases in salary and equity grants for Center’s executives. The Compensation Committee determined to increase salaries for 2010, as reflected in the Summary Compensation Table, but did not make any equity grants. The Compensation Committee’s current goal is to increase executive compensation over time in order to bring Center’s executive compensation more$3.0 billion, in line with the medianCompany’s post-merger assets.
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2014 Post-Merger Peer Group | ||
Bancorp, Inc. | Lakeland Bancorp | |
Bridge Bancorp, Inc | Peapack-Gladstone Financial Corp. | |
Bryn Mawr Bank Corporation | S&T Bancorp | |
Customers Bancorp | Sandy Spring Bancorp | |
Eagle Bancorp | Sterling Bancorp | |
First Commonwealth Financial Corp. | Sun Bancorp | |
First of Long Island Corporation | TriState Capital Holdings | |
Flushing Financial Corporation | Univest Corporation of PA | |
Hudson Valley Holding Corp. |
Pre-Merger Executive Compensation:
In this section we review the components of our executive compensation programs during the pre-Merger period. These pay programs and decisions primarily affected executive officers who are no longer with the Company.
Base Salary
Base salaries provide a consistent amount of fixed compensation that focuses on rewarding an executive’s scope of responsibility, capabilities, and potential growth. When reviewing base salaries, the Committee considers each individual’s specific responsibilities, length of service and experience, market data, and overall performance of the peer group.individual.
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Executive | 2013 Annual Base Salary | 2014 Annual Base Salary | ||||||||||||
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Anthony Weagley |
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| $ |
| 418,300 |
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| $ |
| 418,300 | ||||
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Francis Patryn |
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| $ |
| 162,156 |
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| $ |
| 178,372 | ||||
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Arthur Wein |
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| $ |
| 192,862 |
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| $ |
| 198,648 | ||||
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James Sorge |
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| $ |
| 155,000 |
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| $ |
| 158,875 | ||||
Annual Incentive Opportunity
See “OtherIn light of the pending Merger, executives did not participate in an annual incentive plan in 2014.
Long-Term Incentives—Equity-Based Awards
While the Company had an existing long-term incentive plan prior to the close of the Merger, there were no grants made to any Named Executive Officers during 2014 under that plan.
Post-Merger Executive Compensation:
In this section we review the components of our executive compensation programs. The post-Merger pay programs and decisions are for the Company’s leadership team going forward.
Base Salary
In conjunction with the merger, the Committee engaged Meridian to conduct a benchmarking analysis to provide competitive market reference for the newly combined organization. Base salaries were set following the Merger to align with the new roles overseeing the larger organization. Below are the salaries for the executive team after the Merger.
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Executive | Post-Merger Annual Base Salary | ||||||
Frank Sorrentino III | $ | 595,000 | |||||
William Burns | $ | 310,000 | |||||
Elizabeth Magennis | $ | 285,000 | |||||
Laura Criscione | $ | 225,000 | |||||
Aditya Kishore | $ | 235,000 | |||||
Annual Incentive
Prior to the Merger, Legacy ConnectOne executives participated in the Executive Annual Incentive Plan which provides cash incentives based on performance of pre-established goals. Each participant has a target incentive opportunity expressed as a percentage of base salary although actual payouts can range from no payout to 150% of target at stretch performance. The 2014 incentive targets are summarized below.
Annual Incentive Targets
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Role | Below | Threshold | Target | Maximum | ||||||||||||||||||||||||
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Chief Executive Officer |
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| 0 | % |
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| 20 | % |
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| 40 | % |
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| 60 | % |
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EVP, Chief Financial Officer |
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| 0 | % |
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| 15 | % |
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| 30 | % |
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| 45 | % |
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EVP, Chief Lending Officer |
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| 0 | % |
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| 15 | % |
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| 30 | % |
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| 45 | % |
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EVP, Chief Operations Officer |
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| 0 | % |
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| 10 | % |
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| 20 | % |
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| 30 | % |
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EVP, Compliance Officer |
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| 0 | % |
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| 10 | % |
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| 20 | % |
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| 30 | % |
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Following the Merger, the Company’s executives continued to participate in the Executive Annual Incentive Plan (“EAIP“), which was readopted by the Compensation Committee. However, the Compensation Committee Matters — Consultants”determined that performance for additional information concerning2014 should consist of an assessment of the consulting services that were providedexecutive team’s performance on a more comprehensive and qualitative basis considering performance prior to us by MCCA in 2010.
Impactand following the Merger. In particular, given the complexities of our Participation ina merger of equals, a key strategic goal for the Treasury’s Capital Purchase Program
In response to unprecedented market turmoil,last half of the Emergency Economic Stabilization Act (“EESA”)year was enacted on October 3, 2008. Under EESA,ensuring successful integration of the United States Treasury (the “Treasury”) establishedtwo institutions.
To determine 2014 incentives the TARP Capital Purchase Program, pursuant to whichCompensation Committee considered the Treasury purchases preferred stock and warrants from financial institutions. On January 12, 2009, the Treasury purchased $10,000,000 of our non-convertible preferred stock (the “Preferred Shares”) under the TARP Capital Purchase Program.
Participants in the TARP Capital Purchase Program were required to accept several compensation-related limitations associated with this Program. In January 2009, our five named executive officers at that time agreed in writing to accept the compensation standards in existence at that time under the TARP Capital Purchase Program and thereby cap or eliminate some of their contractual or legal rights. The provisions agreed to were as follows:following factors:
• | Financial performance metrics, including core earnings, return on assets and return on equity and efficiency ratio for 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Speed of the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Effectiveness of integration | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Market reaction to the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Attaining projected cost saves | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | Strong customer retention | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As a result of its review and assessment of performance, the Committee determined that achievement of financial goals and integration results warranted incentive payouts at maximum. Following is a summary of the incentive awards paid to executives:
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Executive | 2014 Annual Incentive Award(1) | ||||||
Frank Sorrentino III | $ | 178,500 | |||||
William Burns | $ | 69,750 | |||||
Elizabeth Magennis | $ | 64,125 | |||||
Laura Criscione | $ | 34,000 | |||||
Aditya Kishore(2) | $ | 0 | |||||
(1) | Awards in this table reflect amount accrued for half the year commencing July 1 through December 31, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Mr. Kishore was not employed by the Company at the time of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company plans to return to the original EAIP plan structure for 2015 which will consist of quantitative performance goals and measures.
Long-Term Incentives—Equity-Based Awards
Prior to the Merger, Legacy ConnectOne had an established long-term incentive program. However, the Company did not grant any equity awards to executives post-Merger. Going forward in 2015, the Company will implement a new long-term incentive plan that will be performance-based, align executives with shareholder interests and promote the long-term success of the Company.
Effective February 2015, the Committee approved long-term incentive compensation program consisting of performance shares and time vested restricted stock. The performance-based restricted share unit awards will reflect our three year performance for the period January 1, 2015 through December 31, 2017. The actual number of shares to be received will range from 0% to 150% of the target levels depending on our performance relative to an industry index.
Benefits and Other Compensation
Retirement Benefits and Perquisites
Executives participate in the ConnectOne Bank 401(k) Retirement Plan which is offered to all Bank employees. Currently, the Bank does not offer any other retirement benefit to executives.
As stated in the Executive Compensation Objectives and Policies section, the Bank does not place emphasis on perquisites for NEOs. A car allowance is provided to this group and the recipients are expected to use this compensation to offset any and all automobile expenses (mileage, tolls, insurance, gas) incurred as part of their job duties.
Post-Termination Benefits for Certain Company Executives
Mr. Weagley’s Employment Agreement
Mr. Weagley entered into an Agreement, dated January 20, 2014 (the “New Agreement”), with the Company and UCNB, which was effective upon the Merger. The purpose of the New Agreement was to clarify certain rights and responsibilities of the parties under Mr. Weagley’s existing agreements in light of the merger.
The New Agreement provided that beginning at the effective time of the Merger, Mr. Weagley would serve as Chief Operating Officer of the combined company and the combined bank. As described in the New Agreement, he was to be an employee “at will” and paid a base salary of $35,000 per month. In the New Agreement, the parties agreed and acknowledged that consummation of the transactions contemplated by the merger agreement and the change in Mr. Weagley’s position from CEO to COO constituted a “Terminating Event” as defined in his existing Employment Agreement, entitling him to a payment of $1,679,790 thereunder upon the earlier of Mr. Weagley’s
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separation from service at any time and for any reason (with or without cause and even if the separation from service is due to disability or death) following the effective time or upon the one-year anniversary of the effective time. Such payment was to be made in accordance with the terms of Mr. Weagley’s existing Employment Agreement. In addition, Mr. Weagley was entitled to receive the sum of $75,414 payable in 12 equal installments over the 12 months immediately following his separation from service in accordance with the regular payroll practices of the combined company, and all unvested restricted stock awards and/or unvested stock options held by him would become fully vested upon his separation from service for any reason (with or without cause and even if the separation from service is due to disability or death) at any time within the twelve (12) months immediately following the effective time. Upon the effective time, the combined company also waived its right to require Mr. Weagley to render consulting services under the existing Employment Agreement, and the existing Employment Agreement was deemed terminated.
The New Agreement also provided that for purposes of the Non-Compete Agreement between the Company and Mr. Weagley, Mr. Weagley will be deemed to have “separated from service” with the combined company on the date he resigns from service or is released from service by the combined company and/or the combined bank. Upon such separation from service, Mr. Weagley became entitled to a payment of $836,500 under the Non-Compete Agreement, as described therein.
Notwithstanding the provisions of the Non-Compete Agreement, certain of the specific restrictions contained in the Non-Compete Agreement (i) remain in effect for a twelve (12) month period commencing on the effective time, and (ii) shall not apply to prohibit Mr. Weagley from working in the banking or financial services business within the Commonwealth of Pennsylvania. Except as specifically modified by the terms of the New Agreement, the Non-Compete Agreement remains in full force and effect.
Upon Mr. Weagley’s departure from the Company on July 1, 2014, he received and will continue to receive for a period of one (1) year the payments as set forth in the New Agreement.
Other Executive Termination Payments
Upon their respective terminations, pursuant to individual severance agreements, Mr. Patryn, Mr. Wein, and Mr. Sorge received severance payments. Mr. Patryn’s severance payment was based upon negotiations at the time of his termination. Pursuant to the Severance Pay Policy that was established for the merger,, Mr. Patryn received a severance payment equal to 2 weeks of compensation for each year of service, resulting in a payment of 34 weeks of base salary. Additionally, Mr. Patryn was awarded a bonus payment of $61,744 paid as an incentive to remain employed through December 31, 2014 to assist with the Company integration.
Mr. Sorge and Mr. Wein both received severance payments pursuant to their severance agreements. These executives each received a payment of two times base salary and two times the annual car allowance amount. Additionally, each executive is eligible to receive continued health insurance benefits through COBRA, with the Bank reimbursing them the cost of the premiums less the amount they contributed to their health insurance premium while employed. Mr. Sorge participated for three months and has since terminated his COBRA eligibility. Additionally, Mr. Wein received an additional bonus payment of $20,000 Mr. Wein received the additional bonus payment as an incentive to remain employed until December 31, 2014. Mr. Sorge was terminated at the time of the merger so no incentive payment was required.
The above payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria. The senior executive officers acknowledged that each of our compensation, bonus, incentive and other benefit plans, arrangements and agreements (including golden parachute, severance and employment agreements) (collectively, “Benefit Plans”) with respect to them was deemed amended to the extent necessary to give effect to such clawback and the restriction on golden parachute payments.
During the CPP Covered Period, we are not permitted to take federal income tax deductions for compensation paid to the senior executive officers in excess of $500,000 per year, subject to certain exceptions.
restrictive covenants including non-compete and non-solicitation agreements and confidentiality/non-disclosure and non-disparagement clauses.
On February 17, 2009,Post-Termination Benefits for ConnectOne Executives
Mr. Sorrentino’s Employment Agreement
The employment agreement with Mr. Sorrentino has an initial three-year term, and will automatically renew for one additional year unless any party provides written notice of its intention not to renew. Under the American Recovery and Reinvestment Act of 2009 (the “Stimulus Act”) was enacted. The Stimulus Act contains several provisions designed to establish executive compensation and governance standards for financial institutions (such as us) that received oragreement, Mr. Sorrentino will receive financial assistance under TARP. In certain instances, the Stimulus Act modified the compensation-related limitations contained in the TARP Capital Purchase Program; however, the Stimulus Act also created additional compensation-related limitations and directed the Treasuryan annual base salary of $522,500,
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subject to establish standards for executive compensation applicable to participants in TARP. In their January 2009 agreements, our executives did not waive their rights with respect to the provisions implementedincrease as determined by the Stimulus Act;Board. He will also be eligible to participate in ConnectOne’s incentive plans and other employees now covered by these provisions were not asked and did not agree to waive their rights. The compensation-related limitations applicable to us which have been added or modified by the Stimulus Act are as follows:
Specific Elements of Our Compensation Program
We have described below the specific elements of our compensation program for executive officers. The officers named in our Summary Compensation Table are referredUnder the agreement, ConnectOne or ConnectOne Bank will reimburse Mr. Sorrentino for his reasonable business expenses, and provide him with a $1,250 monthly car allowance. In the event that Mr. Sorrentino’s employment is terminated without cause, he is entitled to asreceive a lump sum payment equal to the “Named Officers.”
Salary. While consolidation continues within the banking industry, and recent experience continues to demonstrate that there remains a limited supplysum of qualified experienced executives, we believe that it is important that we retain a competitive(i) his then current base salary structure in order to retain our existing qualified officers and maintain a base pay structure consistent with the structures utilized for the compensationremaining term of similarly situated executivesthe agreement, but no less than an amount equal to one year of base salary and (ii) the greater of the highest bonus paid to him over the prior 36 months, or the amount accrued for his bonus in the industry and at similarly sized institutions. We maintain salary guidelines for our executive officers as partyear of termination. In the event of a structuredmerger, acquisition or change-in-control transaction after which Mr. Sorrentino does not continue employment at the resulting entity in substantially the same position, under substantially the same terms and conditions under which he was employed prior to the change in control, he will receive a severance payment equal to the sum of (i) the highest annual base salary pay scale that is reviewed periodically based upon industry standards developed through studies by independent compensation consulting firms engaged by our Compensation Committee for that purpose. We believe that a key objective of our salary structure ispaid to maintain reasonable “fixed” compensation costs by targeting base salaries at a competitive average, taking into effect performance as well as seniority. See “Our Compensation Objectiveshim over the prior 36 month period, and (ii) the Focus of Our Compensation Rewards” for a descriptiongreater of the services providedhighest bonus paid to him over the prior 36 months, or the amount accrued for his bonus in the year of termination, multiplied by our compensation consultanttwo plus one twelfth for 2010.
Noneeach year of service completed by Mr. Sorrentino after January 1, 2007. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Named OfficersInternal Revenue Code of 1986, as amended.
Mr. Burns’s Employment Agreement
Mr. Burns’s was a party to an employment agreement with Legacy ConnectOne, which was assumed by the Company. It has an initial two-year term, which automatically renews for one additional year unless either party provides written notice of its intention not to renew. Under the agreement, Mr. Burns will receive an annual base salary of $240,000, subject to increase as determined by the Board. He will also be eligible to participate in the Company’s bonus plan for executive officers. Mr. Burns is also entitled to participate in all benefit programs of the Company and the Bank. Under the agreement, the Company or the Bank during 2010. We entered intowill reimburse Mr. Burns for his reasonable business expenses, and provide him with a Non-Competition Agreement with$750 monthly car allowance. In the event that Mr. Weagley, our CEO, dated December 2, 2010. See “Agreements with Named Officers.”
Short-Term Incentive Compensation. The Company currently has three active and distinct incentive plans and one additional incentive plan proposed for 2011:Burns’s employment is terminated without cause, he is entitled to receive the Achievement Incentive Plan; Branch Manager Incentive Compensation Plan; Lender Incentive Plan and Mortgage Lender Incentive Plan (the proposed plan). The Achievement Incentive Plan and Lender Incentive Plan are described below as they are the plans in which the Named Officers may participate.
Achievement Incentive Plan
Participants are recommended annually by the CEO and approved by the Boardsum of Directors and historically include the CEO, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents and Assistant Cashiers. The plan provides the opportunity to earn cash awards expressed as a percentage of salary and range from 30%(i) his then current annual Base Salary for the CEO to 10% for Assistant Cashiers. Individuals are assigned specific objectives throughout the year which comprise the individuals’ “personal” goals. These personal goals typically represent at least 50%remainder of the total available payout and can range up to 100%Term (assuming there is no extension of the total available payout underTerm), but no less than one year of his then current Base Salary, and (ii) the plan. The other component may behighest cash bonus paid to Mr. Burns over the prior twenty four (24) month period, or the amount accrued during the current year for Mr. Burns’ cash bonus for that year, whichever is higher. In the event of a “Bank” goal and accounts for up to 50% ofmerger, acquisition or change-of-control transaction after which Mr. Burns does not continue employment at the total payout, but is usually no more than 25% of the total available payout. For 2009 and 2010, the CEO was not eligible to participant due to TARP prohibitions. For 2010, the following performance criteria were identified with the potential percentage of incentive that could be earned:
| | |
Each participant’s possible award included one or more of the above criteria with the maximum amount possible not to exceed 100% of the potential award.
See “Grant of Plan Based Awards” forresulting entity, he will receive a description of the amounts that could have been earned under this plan by the Named Officers. No awards were made for 2010 because the targets were not met.
Lenders Incentive Compensation Program
Participants include individual lending executives from the Chief Lending Officer to each individual lender who is in good standing and has received satisfactory performance evaluations. This incentive plan provides quarterly cash payments linked to nine different quantifiable measures or production objectives. The plan is tied to bank wide and individual performance. Payments under the plan can approach $40,000 per individual. The plan was modified in 2009 to incorporate “mitigators” to reduce the risk profile of the plan and implement additional controls.
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Long-Term Incentive Compensation. We provide long-term incentives to the Named Officers through our stock incentive plans. During 2010, our Named Officers were eligible to participate in our 2009 Equity Incentive Plan. We refer to that plan as our “2009 Stock Plan”. From time to time, the Compensation Committee has granted stock options and/or restricted stock awards to our executive officers. Stock options have been granted at an exercise priceseverance payment equal to the thensum of (i) his highest annual Base Salary over the prior twenty four (24) month period plus (ii) the highest cash bonus paid to him over the prior twenty four (24) month period, or the amount accrued during the current market priceyear for his cash bonus for that year, whichever is higher, times two. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of our common stock. Optionsthe Internal Revenue Code of 1986, as amended.
Ms. Magennis’s and restricted stock awards underMs. Criscione’s Change in Control Agreements
The change in control agreements between each of Ms. Magennis and Ms. Criscione and Legacy ConnectOne were not triggered by the 2009 Stock Plan are granted on anad hoc basis taking into account financial performanceMerger and results. No options were granted to our senior executive officers in 2006, 2007, 2008, 2009 or 2010.
In 2006, our Board establishedassumed by the Center Bank Open Market Share Purchase Incentive Plan, which we refer to as the “PIP”. We established the PIP in order to encourage ownership and retention of our common stock by our executive officers.Company. Under the PIP, any executive officer who applies upterms of the Change in Control Agreements, if the Company were to 50% of his or her cash bonus to the purchase of our common stockundergo a “change in control” as defined in the open market will receive an additional cash amount to coverChange in Control Agreements, followed by either (i) involuntary termination of employment by the Federal, StateCompany or local income taxes on the portionBank or (ii) voluntary termination of the bonus used to make these purchases. To be eligible for the bonus, the purchased shares must be heldemployment by the executive officerunder certain circumstances provided for at least 30 days. Since no cash bonuses were paidin the agreement, then the executive would be entitled to a lump sum payment equal to the Named Officers in connection with performancehighest annual salary assigned to her during 2006, 2007, 2008, 2009 or 2010, no open market purchases were made under the PIP for those years.
Other Elements of Compensation for Executive Officers. In order to attract and retain qualified executives, we provide executives with certain benefits and perquisites, consisting primarily of retirement benefits through our 401(k) Plan, executive life insurance and automobile allowances. Details of the values of these benefits and perquisites may be found in the footnotes and narrativestwenty four months prior to the Summary Compensation Table below.
Other Agreements
For many years, we had employment agreementsChange in Control plus the highest annual bonus paid or accrued. Such amount shall be paid within 10 days, subject to compliance with Anthony C. Weagley. His most recent agreement terminated on December 31, 2009.
Our Compensation Committee has expressed an intention not to enter into formal employment agreements with our executives. We entered into a Non-Competition Agreement with Mr. Weagley, our CEO, dated December 2, 2010. See “Agreements with Named Officers.”
Compliance with Sections 162(m), EESA andsection 409A of the Internal Revenue Code,
after the Company receives an executed a general release of claims in favor of the Company, the Bank, their respective subsidiaries, affiliates, officers, directors, shareholders, partners, members, managers, agents or employees.22
Additional Information about Our Compensation Practices
Policy on Incentive Compensation Clawback
Each executive compensation arrangement or Plan provides for a clawback in the event of a financial restatement.
Risk Assessment Review
The Committee reviews the structure and components of our compensation arrangements, the material potential sources of risk in our business lines and compensation arrangements, and various policies and practices of the Company that mitigate this risk. Within this framework, the Committee discusses the parameters of acceptable and excessive risk-taking and the general business goals and concerns of the Company. In particular, the Committee focuses on the risks associated with the design of each plan, the mitigation factors that exist for each plan, additional factors that could be considered and an overall risk assessment with respect to the plans. All of our plans have links to corporate or business line results that allow for funding to be adjusted downward, awards are capped, and our governance procedures ensure awards are reviewed for appropriateness before they are distributed.
We have determined that risks arising from our employee compensation plans are not reasonably likely to have a material adverse effect on the Company. Further, it is both the Committee’s and management’s intent to continue to evolve our processes going forward by monitoring regulations and best practices for sound incentive compensation.
Accounting & Tax Treatment of Compensation
The accounting and tax treatment of compensation generally has not been a factor in determining the amounts of compensation for our executive officers. However, the Compensation Committee and management have considered the accounting and tax impact of various program designs to balance the potential cost to the Company with the benefit to the executive.
Section 162(m) of the Internal Revenue Code deniesgenerally disallows a tax deduction to any publicly held corporationpublic companies for annual non-performance based compensation over $1.0 million paid to certain “covered employees”their named executive officers. To maintain flexibility in compensating our executive officers in a taxable yearmanner designed to the extent that compensation exceeds $1,000,000 for a covered employee. Certain performance-based compensation that has been approved by our shareholderspromote varying corporate goals, it is not subject to this limitation. As a result,policy of the Compensation Committee that all executive compensation must be tax-deductible. The shareholder approved share-based compensation plans permit the award of stock options, grantedstock appreciation rights and other equity awards that are fully deductible under our 2009 Stock Plan are not subject to the limitations ofCode Section 162(m). However, restricted stock awards under our 2009 Stock Plan generally will not be treated as performance-based compensation. Restricted stock award grants made to date
by us have not been at levels that, together with other compensation, approachedReport of the $1,000,000 limit. Also, since we retain discretion over bonuses under the AIP and the Loan Incentive Plan, those bonuses also will not qualify for the exemption for performance-based compensation. Compensation Committee
The Compensation Committee intendshas reviewed and discussed the Compensation Discussion and Analysis, or CD&A, contained in this proxy statement with management. Based on the Compensation Committee’s review of and discussion with management with respect to provide executive compensationthe CD&A, the Compensation Committee has recommended to the Board of Directors of the Company that the CD&A be included in a manner that will be fully deductiblethis proxy statement and the Company’s Annual Report on Form 10-K for federal income tax purposes, so long as that objective is consistent with overall business and compensation objectives. However, we reserve the right to use our judgment to authorize compensation payments that do not complyfiscal year ended December 31, 2014, for filing with the exemptions in Section 162(m) when we believe that such payments are appropriate and inSEC.
The foregoing report is provided by the best interests of our shareholders, after taking into consideration changing business conditions or the executive officer’s performance.
While our Preferred Shares are outstanding, we are not permitted to take federal income tax deductions for compensation paid to the senior executive officers in excess of $500,000 per year, subject to certain exceptions.
It is also our intention to maintain our executive compensation arrangements in conformity with the requirements of Section 409ACompensation Committee of the Internal Revenue Code, which imposes certain restrictions on deferred compensation arrangements.Board of Directors:
Stephen Boswell (Chair)
Frederick Fish
William A. Thompson
Joseph Parisi, Jr
Summary of Cash and Certain Other Compensation Table
The following table sets forth for the prior three years ended December 31, 2008, 2009 and 2010, a summary of the compensation earned by Anthony C. Weagley, our President andpaid to (a) each individual serving as Chief Executive Officer Richard Patryn, who served as our Chief Financial Officer from November 15, 2010 until March 28, 2011, when Vincent Tozzi was appointed as Vice President, Treasurer and Chief Financial Officer of Center, two other individuals who served asduring 2014, (b) our Chief Financial Officer in 2010 (A. Richard Abrahamian, who served until February 19, 2010, and Stephen J. Mauger, who served from February 19, 2010 through November 15, 2010) and our next three
23
other most highly compensated executive officers who were employed by usearning in excess of $100,000 serving as of the fiscal year ended December 31, 2010. We refer2014, and (c) the two individuals for whom disclosure would have been provided pursuant to clause (b) above but for the fact that such individual was not serving as an executive officer of the Company as of the fiscal year ended December 31, 2014 (collectively the “Named Executive Officers”).
Summary Compensation Table
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Name and | Year | Salary | Bonus | Stock | Option | Non-equity | Change in | All other | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Frank Sorrentino III, | 2014 |
|
| 297,500 |
|
| 178,500 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 8,101 |
|
| 484,101 | |||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
William S. Burns, | 2014 |
|
| 155,000 |
|
| 69,750 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 7,063 |
|
| 231,813 | |||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Elizabeth Magennis, | 2014 |
|
| 142,500 |
|
| 64,125 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 6,372 |
|
| 212,997 | |||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Laura Criscione, | 2014 |
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| 112,500 |
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| 34,000 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 5,474 |
|
| 151,974 | |||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aditya Kishore, | 2014 |
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| 117,140 |
|
| 23,428 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 3,228 |
|
| 143,796 | |||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Anthony C. Weagley, | 2014 |
|
| 209,150 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 134,960 |
|
| 2,531,742 |
|
| 2,875,852 | |||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 |
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| 418,300 |
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| 185,000 |
|
| 94,054 |
|
| — |
|
| — |
|
| (48,303 | ) |
|
|
| 25,161 |
|
| 674,212 | ||||||||||||||||||||||||||||||||
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2012 |
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| 366,300 |
|
| — |
|
| 25,000 |
|
| — |
|
| — |
|
| 70,736 |
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| 27,597 |
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| 489,633 | ||||||||||||||||||||||||||||||||||
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Francis R. Patryn, | 2014 |
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| 177,020 |
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| — |
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| — |
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| — |
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| — |
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| 57,662 |
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| 182,385 |
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| 417,067 | |||||||||||||||||||||||||||||||||
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2013 |
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| 146,391 |
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| 15,995 |
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| 14,190 |
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| — |
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| — |
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| (6,299 | ) |
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| 6,250 |
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| 176,527 | ||||||||||||||||||||||||||||||||
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2012 |
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| 129,768 |
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| 10,141 |
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| — |
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| — |
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| — |
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| 23,974 |
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| 9,290 |
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| 173,173 | ||||||||||||||||||||||||||||||||||
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Arthur M. Wein, | 2014 |
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| 198,648 |
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| 20,000 |
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| — |
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| — |
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| — |
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| — |
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| 393,754 |
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| 612,402 | |||||||||||||||||||||||||||||||||
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2013 |
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| 192,862 |
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| — |
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| 19,673 |
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| — |
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| 18,341 |
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| — |
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| 11,633 |
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| 242,509 | ||||||||||||||||||||||||||||||||||
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2012 |
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| 191,401 |
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| — |
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| — |
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| — |
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| 10,107 |
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| — |
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| 16,923 |
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| 218,431 | ||||||||||||||||||||||||||||||||||
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James W. Sorge, | 2014 |
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| 91,008 |
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| — |
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| — |
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| — |
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| — |
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| — |
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| 324,953 |
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| 415,961 | |||||||||||||||||||||||||||||||||
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2013 |
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| 152,171 |
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| — |
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| 23,362 |
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| — |
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| 26,257 |
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| — |
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| 11,153 |
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| 212,943 | ||||||||||||||||||||||||||||||||||
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2012 |
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| 141,000 |
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| — |
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| — |
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| — |
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| 10,648 |
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| — |
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| 10,012 |
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| 161,660 | ||||||||||||||||||||||||||||||||||
(1) | Mr. Sorrentino, Mr. Burns, Ms. Magennis, Ms. Criscione and Mr. Kishore each commenced employment with the Company on July 1, 2014 effective upon the consummation of the Merger. Prior to this date, each was an executive officer of Legacy ConnectOne Bancorp. The data provided above, accordingly, is with respect to their compensation commencing on July 1, 2014, and does not include information prior to this date. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Mr. Kishore left the Company effective February 1, 2015. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) | Mr. Weagley resigned from the Company effective July 1, 2014. Included in “All Other Compensation” for Mr. Weagley is a $1,679,790 severance payment under his employment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
24
agreement, and an $836,500 payment under his non-compete agreement with the Company, both due upon his termination of service with the Company. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) | Mr. Patryn left the Company effective December 31, 2014. Included in “All Other Compensation” for Mr. Patryn is a $178,372 severance payment. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(5) | Mr. Wein’s employment with the Company ended effective December 31, 2014. Included in “All Other Compensation” for Mr. Wein is a $408,724.60 severance payment under his employment agreement with the Company. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(6) | Mr. Sorge left the Company effective July 1, 2014. Included in “All Other Compensation” for Mr. Sorge is a $320,000 severance payment under his employment agreement with the Company. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employment Agreement
The Company and the Bank are parties to employment agreements with Messrs. Frank S. Sorrentino, III, our Chairman, Chief Executive Officer, and President, and Mr. William S. Burns our Executive Vice President and Chief Financial Officer.
The employment agreement with Mr. Sorrentino has an initial three-year term, and will automatically renew for one additional year unless any party provides written notice of its intention not to renew. Under the agreement, Mr. Sorrentino will receive an annual base salary of $525,500, subject to increase as determined by the Board. He will also be eligible to participate in the Company’s incentive plans and other benefit plans for executive officers. Under the agreement, the Company or Bank will reimburse Mr. Sorrentino for his reasonable business expenses, and provide him with a $1,250 monthly car allowance. In the event that Mr. Sorrentino’s employment is terminated without cause, he is entitled to receive a lump sum payment equal to the sum of (i) his then current base salary for the remaining term of the agreement, but no less than an amount equal to one year of base salary and (ii) the greater of the highest bonus paid to him over the prior 36 months, or the amount accrued for his bonus in the year of termination. In the event a merger, acquisition or change-in-control transaction after which Mr. Sorrentino does not continue employment at the resulting entity in substantially the same position, under substantially the same terms and conditions under which he was employed prior to the change in control, he will receive a severance payment equal to the sum of (i) the highest annual base salary paid to him over the prior 36 month period, and (ii) the greater of the highest bonus paid to him over the prior 36 months, or the amount accrued for his bonus in the year of termination, multiplied by two plus one twelfth for each year of service completed by Mr. Sorrentino commencing January 1, 2007. The severance benefits are subject to reduction in the event the benefits would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended. The following table summarizes potential payments to Mr. Sorrentino assuming a triggering termination of employment occurred on December 31, 2014. The table does not reflect benefits under plans that do not discriminate in favor of executive officers named in this tableand are available generally to all salaried employees.
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Payments and Benefits | Involuntary Termination | Change in | Involuntary Termination | ||||||||||||||||||
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Cash Compensation |
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| $ |
| 1,894,083 |
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| $ |
| 0 |
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| $ |
| 2,459,333 | ||||||
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Value of Continued Health and Welfare Benefits |
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| $ |
| 53,731 |
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| $ |
| 0 |
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| $ |
| 20,799 | ||||||
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Acceleration of Stock Awards |
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| $ |
| 0 |
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| $ |
| 628,197 |
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| $ |
| 628,197 | ||||||
The employment agreement with Mr. Burns has an initial two-year term, and will automatically renew for one additional year unless either party provides written notice of its intention not to renew. Under the agreement, Mr. Burns will receive an annual base salary of $240,000, subject to
25
increase as determined by the “Named Officers”, we referBoard. He will also be eligible to Center Bancorp as “Center” and we refer to Union Center National Bank as “UCNB.”
SUMMARY COMPENSATION TABLE
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| Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($) (e) | Option Awards ($) (f) | Non-Equity Incentive Plan Compensation (g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h) | All Other Compensation ($) (i) | Total ($) (j) | |||||||||||||||||||||||||||
| Anthony C. Weagley, President and Chief Executive Officer of Center and UCNB from August 23, 2007 to Present; Vice President and Treasurer of Center and Sr. Vice President and Cashier of UCNB (prior periods) (Mr. Weagley continued to serve as Chief Financial Officer of Center until March 27, 2008 and as Chief Financial Officer of UCNB until February 2008) | 2010 | 294,000 | — | 25,000 | — | — | 22,081 | 21,545 | 362,626 | |||||||||||||||||||||||||||
| 2009 | 250,000 | — | — | — | — | 19,973 | 17,802 | 287,775 | ||||||||||||||||||||||||||||
| 2008 | 225,000 | — | 25,000 | — | — | 16,657 | 16,425 | 283,082 | ||||||||||||||||||||||||||||
| Francis R. Patryn Vice President, Chief Financial Officer and Comptroller of Center and Vice President and Chief Financial Officer and Comptroller of the Bank (November 2010 to March 28, 2011); Vice President and Comptroller of the Bank (October 2006 to Present) | 2010 | 111,910 | — | — | — | — | 11,368 | 5,778 | 129,056 | |||||||||||||||||||||||||||
| 2009 | 109,180 | 3,275 | — | — | — | 16,194 | 6,249 | 134,898 | ||||||||||||||||||||||||||||
| 2008 | 106,000 | 5,300 | — | — | — | 15,372 | 7,039 | 133,711 | ||||||||||||||||||||||||||||
| Stephen J. Mauger Vice President, Treasurer and Chief Financial Officer of Center, February 19, 2010 to November 15, 2010 | 2010 | 130,269 | — | — | — | — | — | 2,217 | 132,486 | |||||||||||||||||||||||||||
| A. Richard Abrahamian, Vice President, Treasurer and Chief Financial Officer of Center, March 27, 2008 to February 19, 2010; Vice President and Treasurer of Center, February 19, 2008 to March 27, 2008; Senior Vice President and Chief Financial Officer of UCNB, February 19, 2008 to February 19, 2010 | 2010 | 25,255 | — | — | — | — | — | 1,366 | 26,621 | |||||||||||||||||||||||||||
| 2009 | 175,100 | — | — | — | — | — | 8,512 | 183,612 | ||||||||||||||||||||||||||||
| 2008 | 148,750 | 10,000 | — | — | 10,200 | — | 6,300 | 175,250 | ||||||||||||||||||||||||||||
| Arthur M. Wein Vice President and Chief Operating Officer of Center and Senior Vice President and Chief Operating Officer of the Bank (October 2009 to Present); Vice President and Business Development Officer of the Summit Region of the Bank (April 2009 to October 2009) | 2010 | 152,840 | — | — | — | — | — | 5,192 | 158,032 | |||||||||||||||||||||||||||
| 2009 | 67,483 | — | — | — | — | — | 415 | 67,898 | ||||||||||||||||||||||||||||
| Mark S. Cardone Vice President of Center and Senior Vice President and Branch Administrator of the Bank (2001 to Present) | 2010 | 141,159 | — | — | — | — | 7,076 | 13,230 | 161,465 | |||||||||||||||||||||||||||
| 2009 | 122,216 | — | — | — | — | 11,523 | 12,831 | 146,571 | ||||||||||||||||||||||||||||
| 2008 | 118,656 | 8,900 | — | — | — | 6,801 | 12,417 | 147,220 | ||||||||||||||||||||||||||||
| John J. Lukens Vice President and Senior Credit Administrator of Center and Senior Vice President and Senior Credit Administrator of the Bank (December 2009 to Present); Vice President of the Bank (September 2004 to December 2009) | 2010 | 135,585 | — | — | — | — | 4,410 | 9,240 | 149,235 | |||||||||||||||||||||||||||
| 2009 | 112,286 | — | — | — | — | 5,868 | 7,669 | 125,823 | ||||||||||||||||||||||||||||
| 2008 | 102,078 | 10,208 | — | — | — | 5,814 | 7,181 | 125,281 | ||||||||||||||||||||||||||||
The past three years have been challenging, given the extraordinary turmoilparticipate in the global economy. Nevertheless, we were profitable,Company’s bonus plan for executive officers. Mr. Burns is also entitled to participate in all benefit programs of the Company and the Bank. Under the agreement, the Company or Bank will reimburse Mr. Burns for his reasonable business expenses, and provide him with a substantial portion$750 monthly car allowance. In the event that Mr. Burns’s employment is terminated without cause, he is entitled to receive his then current annual Base Salary for the remainder of our earnings derived from core operations. As a result, limited bonus compensation was paid during 2008the term, but no less than one year of his then current Base Salary, plus an amount equal to the Named Officers. Any bonuses granted underhighest cash bonus paid to him over the AIPprior twenty four (24) month period, or the Loan Incentive Program are shownamount accrued during the current year for Employee’s cash bonus for that year. In the event a merger, acquisition or change-in-control transaction after which Mr. Sorrentino does not continue employment at the resulting entity in substantially the same position, under substantially the same terms and conditions under which he was employed prior to the change in control, he will receive a severance payment equal to the sum of (i) the highest annual base salary paid to him over the prior 24 month period, and (ii) the greater of the highest bonus paid to him over the prior 24 months, or the amount accrued for his bonus in the Non-Equity Incentive Plan Compensation column. (Such amounts were inadvertently included under the 2008 Bonus columnyear of termination, multiplied by two. The severance benefits are subject to reduction in the 2008 proxy statement, but are correctly reflected inevent the Non-Equity Incentive Plan Compensation column above.) For a descriptionbenefits would constitute an “excess parachute payment” under Section 280G of the AIPInternal Revenue Code of 1986, as amended.The following table summarizes potential payments to Mr. Burns assuming a triggering termination of employment occurred on December 31, 2014. The table does not reflect benefits under plans that do not discriminate in favor of executive officers and the Loan Incentive Plan, seeare available generally to all salaried employees.
|
|
|
|
|
|
| |||||||||||||||
Payments and | Involuntary Termination | Change in | Involuntary Termination | ||||||||||||||||||
| |||||||||||||||||||||
Cash Compensation |
|
| $ |
| 449,500 |
|
| $ |
| 0 |
|
| $ |
| 899,000 | ||||||
| |||||||||||||||||||||
Value of Continued Health and Welfare Benefits |
|
| $ |
| 20,799 |
|
| $ |
| 0 |
|
| $ |
| 20,799 | ||||||
| |||||||||||||||||||||
Acceleration of Stock Awards |
|
| $ |
| 0 |
|
| $ |
| 136,211 |
|
| $ |
| 136,211 | ||||||
The Company also was previously a party to employment agreements with Messrs. Weagley, Wein and Sorge, and a change in control agreement with Mr. Patryn. See “Compensation Discussion and Analysis.” We also paid sign-on bonusesAnalysis” above.
Agreements upon Change in Control
Each of Ms. Criscione and Ms. Magennis has entered into change of control agreements with respect to certain new members of senior management in 2008. Earnings for 2009 and 2010 were impacted by significantly lower short-term interest rates, intense competition for depositsthe Company. Under these agreements, in the Company’s marketplace andevent of a reorganization, merger, consolidation or sale of all or substantially all of the continuing volatilityassets of the Company, or any similar transaction which results in our shareholders holding less than a majority of the voting power of the resulting entity, the employee is to be employed by our successor for a period of twelve (12) months plus one month for each year of service following the change in control. In the event they are terminated without cause, or they resign for good reason (as both terms are defined in the financial markets. No bonuses wereagreements), then each of Ms. Criscione and Ms. Magennis would be entitled to a lump sum payment equal to the highest annual salary assigned to each during the twenty four months prior to Change in Control plus the highest annual bonus paid to the Named Officers during 2009 (other thanor accrued to Mr. Patryn) or 2010 and no amounts were paid to the Named Officers for 2009 or 2010 under non-equity incentive plans.
In the table above:
26
Laura Criscione
|
|
|
|
| ||||||||||
Payments and | Change in Control | Involuntary | ||||||||||||
| ||||||||||||||
Cash Compensation |
|
| $ |
| 0 |
|
| $ |
| 292,250 | ||||
| ||||||||||||||
Value of Continued Health and Welfare Benefits |
|
| $ |
| 0 |
|
| $ |
| 0 | ||||
| ||||||||||||||
Acceleration of Stock and Option Awards |
|
| $ |
| 0 |
|
| $ |
| 0 | ||||
Elizabeth Magennis
|
|
|
|
| ||||||||||
Payments and | Change in Control | Involuntary | ||||||||||||
| ||||||||||||||
Cash Compensation |
|
| $ |
| 0 |
|
| $ |
| 413,250 | ||||
| ||||||||||||||
Value of Continued Health and |
|
| $ |
| 0 |
|
| $ |
| 0 | ||||
| ||||||||||||||
Acceleration of Stock and Option Awards |
|
| $ |
| 191,349 |
|
| $ |
| 191,349 | ||||
Grant of Plan Based Awards
During 2010, our Named Officers did not receive stockNo grants of plan based awards or stock options, except for Anthony C. Weagley, who received a stock award on January 29, 2010, pursuantwere made to his prior employment agreement, which expired on December 31, 2009. The amounts under “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” represents the threshold (minimum), target and maximum cash amounts that could have been earned by each Named Officer under the Company’s AIP if specified performance targets had been attained. As these targets were not attained, no amounts were paid under the AIP for 2010. For a description of the various performance targets, please see the description of the AIP under the Compensation Discussion and Analysis set forth above.
| | | | | | | | | ||||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||||||
| Name (a) | Grant Date (b) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | All other Stock Awards: Number of Shares of Stock or Units (#) (i) | All other Option Awards: Number of Securities Underlying Options (#) (j) | Exercise or Base Price of Option Awards ($/Sh) (k) | Grant Date Fair Value of Stock and Option Awards ($) (l) | ||||||||||||||||||||||||||
| Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | ||||||||||||||||||||||||||||||
| Anthony C. Weagley | 1/29/10 | 0 | 87,000 | 116,000 | 2,803 | — | $ | 8.92 | $ | 25,002 | ||||||||||||||||||||||
| Francis R. Patryn | — | 0 | 22,382 | 27,978 | — | — | — | — | ||||||||||||||||||||||||
| Stephen J. Mauger | — | 0 | 0 | 0 | — | — | — | — | ||||||||||||||||||||||||
| A. Richard Abrahamian | — | 0 | 0 | 0 | — | — | — | — | ||||||||||||||||||||||||
| Arthur M. Wein | — | 0 | 15,284 | 22,926 | — | — | — | — | ||||||||||||||||||||||||
| Mark S. Cardone | — | 0 | 40,000 | 52,000 | — | — | — | — | ||||||||||||||||||||||||
| John J. Lukens | — | 0 | 40,000 | 52,000 | — | — | — | — | ||||||||||||||||||||||||
The following table sets forth information regarding stock options and stock awards outstanding at December 31, 2010 for each of the Named Officers. The vesting dates applicable to each such stock option and stock award are set forthExecutive Officers in footnotes that follow the columnar explanations below the table.2014.
27
Outstanding Equity Awards At Year Endat Year-End
| | | | | | | ||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||
| Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Number of Securities Underlying Unexercised Options (#) Non-Exercisable (c) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | ||||||||||||||||||
| Anthony C. Weagley | 4,631 | 0 | $ | 8.97 | 6/20/2012 | 0 | 0 | |||||||||||||||||
| 9,595 | 0 | $ | 10.64 | 10/19/2015 | ||||||||||||||||||||
| Francis R. Patryn | 0 | 0 | — | — | 0 | 0 | ||||||||||||||||||
| Stephen J. Mauger | 0 | 0 | — | — | 0 | 0 | ||||||||||||||||||
| A. Richard Abrahamian | 0 | 0 | — | — | 0 | 0 | ||||||||||||||||||
| Arthur M. Wein | 0 | 0 | — | — | 0 | 0 | ||||||||||||||||||
| Mark S. Cardone | 6,130 | 0 | $ | 10.64 | 10/19/2015 | 0 | 0 | |||||||||||||||||
| John J. Lukens | 0 | 0 | — | — | 0 | 0 | ||||||||||||||||||
In calculating market values in the table above, we have multiplied the closing market price of our common stock on the last trading day in 2010 — $8.15 — by the applicable number of shares of common stock underlying each Named Officer’s stock options or stock awards.
Options Exercised and Stock Vested
The following table sets forth, for each of the Named Officers, information regarding outstanding stock options exercised during 2010 and stock awards vested during 2010. The phrase “value realized on exercise” represents the number of shares of common stock set forth in column (b) multiplied by the difference between the market price of our common stock on the date of exercise and the Named Officer’s exercise price. Similarly, the phrase “value realized on vesting” represents the number of shares of common stock set forth in column (d) multiplied by the market price of our common stock on the date on which the Named Officer’s stock award vested.at December 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Name | Option awards | Stock awards | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Equity | Option | Option | Number of | Market | Equity | Equity | |||||||||||||||||||||||||||||||||||
Frank Sorrentino III(1)(2) |
|
| 78,000 |
|
|
|
|
|
| 3.85 |
|
| 6/21/2015 |
|
| 33,061 |
|
| 628,159 |
|
|
|
| ||||||||||||||||||||
|
|
| 10,655 |
|
|
|
|
|
| 6.15 |
|
| 11/11/2016 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 26,000 |
|
|
|
|
|
| 6.15 |
|
| 1/11/2018 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
|
| 10,871 |
|
|
|
|
|
| 6.15 |
|
| 1/21/2018 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 11,721 |
|
|
|
|
|
| 6.15 |
|
| 11/11/2018 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
|
| 51,935 |
|
|
|
|
|
| 4.62 |
|
| 11/26/2018 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 11,687 |
|
|
|
|
|
| 4.62 |
|
| 1/9/2019 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
|
| 13,000 |
|
|
|
|
|
| 4.62 |
|
| 2/25/2019 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 34,567 |
|
|
|
|
|
| 6.99 |
|
| 1/24/2022 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
William S. Burns(1)(2) |
|
|
|
|
|
|
|
|
|
|
|
| 7,170 |
|
| 136,230 |
|
|
|
| |||||||||||||||||||||||
Elizabeth Magennis(1)(2) |
|
| 5,200 |
|
|
|
|
|
| 6.15 |
|
| 11/11/2016 |
|
| 10,072 |
|
| 191,368 |
|
|
|
| ||||||||||||||||||||
|
|
| 2,504 |
|
|
|
|
|
| 4.62 |
|
| 1/9/2019 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 5,158 |
|
|
|
|
|
| 6.99 |
|
| 1/24/2022 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Laura Criscione(1)(2) |
|
| 26,000 |
|
|
|
|
|
| 3.85 |
|
| 6/21/2015 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 7,800 |
|
|
|
|
|
| 6.15 |
|
| 5/5/2016 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
|
| 3,120 |
|
|
|
|
|
| 4.81 |
|
| 5/23/2016 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 6,204 |
|
|
|
|
|
| 6.15 |
|
| 1/11/2018 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
|
| 5,218 |
|
|
|
|
|
| 4.62 |
|
| 1/9/2019 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
|
| 3,900 |
|
|
|
|
|
| 4.62 |
|
| 2/25/2019 |
|
|
|
|
|
|
|
| |||||||||||||||||||||||
|
|
| 5,616 |
|
|
|
|
|
| 6.99 |
|
| 1/24/2022 |
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Aditya Kishore |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Anthony C. Weagley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Francis R. Patryn |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Arthur M. Wein |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
James W. Sorge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) | All option and stock awards were granted subject to a three-year vesting requirement, with one-third of the award vesting on the first anniversary of the date of grant, one-third of the award vesting on the second anniversary of the date of grant, and the final third vesting on the third anniversary of the date of grant. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| are valued at market value, which is deemed to be book value, at December 31, 2014. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options Exercised and Stock Vested
The following table sets forth certain information regarding exercises of options or vesting of restricted shares during the Company’s fiscal year ended December 31, 2014:
28
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
| Option awards | Stock awards | ||||||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||
Name | Number of | Value | Number of | Value | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
Frank Sorrentino III |
|
|
|
|
|
|
|
| ||||||||||||||||||||
| ||||||||||||||||||||||||||||
William S. Burns |
|
|
|
|
|
| 2,165 |
|
| 40,745 | ||||||||||||||||||
| ||||||||||||||||||||||||||||
Elizabeth Magennis |
|
|
|
|
|
|
|
| ||||||||||||||||||||
| ||||||||||||||||||||||||||||
Laura Criscione |
|
|
|
|
|
|
|
| ||||||||||||||||||||
| ||||||||||||||||||||||||||||
Aditya Kishore |
|
|
|
|
|
|
|
| ||||||||||||||||||||
| ||||||||||||||||||||||||||||
Anthony C. Weagley |
|
| 9,659 |
|
| 83,572 |
|
| 7,291 |
|
| 140,206 | ||||||||||||||||
| ||||||||||||||||||||||||||||
Francis R. Patryn |
|
|
|
|
|
| 1,100 |
|
| 21,153 | ||||||||||||||||||
| ||||||||||||||||||||||||||||
Arthur M. Wein |
|
|
|
|
|
| 1,525 |
|
| 29,326 | ||||||||||||||||||
| ||||||||||||||||||||||||||||
James W. Sorge |
|
|
|
|
|
| 1,811 |
|
| 34,826 | ||||||||||||||||||
Pension Benefits
The following table sets forth, for each of the Named Officers, information regarding the benefits payable under each of ourCenter’s plans that provides for payments or other benefits at, following, or in connection with such Named Officer’s retirement. Those plans are summarized below the following table. The following table does not provide information regarding tax-qualified defined contribution plans or nonqualified defined contribution plans.
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
Pension Benefits | Pension Benefits | ||||||||||||||||||||||||||||||||||||||
| | | | |
| ||||||||||||||||||||||||||||||||||
| Name (a) | Plan Name (b) | Number of Years of Credited Service (#) (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) | Plan name | Number of | Present | Payments | |||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
Frank Sorrentino III |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
William S. Burns |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
Elizabeth Magennis |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
Laura Criscione |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
Aditya Kishore |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
| Anthony C. Weagley | Union Center National Bank Pension Plan Trust | 23 | 242,279 | 0 | Union Center National |
|
| 23 |
|
| 473,581 |
|
| 0 | |||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
| Francis R. Patryn | Union Center National Bank Pension Plan Trust | 9 | 155,663 | 0 | Union Center National |
|
| 9 |
|
| 255,944 |
|
| 0 | |||||||||||||||||||||||||
| Stephen J. Mauger | — | — | — | — | |||||||||||||||||||||||||||||||||||
| A. Richard Abrahamian | — | — | — | — | |||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
| Arthur M. Wein | — | — | — | — |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
| Mark S. Cardone | Union Center National Bank Pension Plan Trust | 6 | 75,275 | 0 | |||||||||||||||||||||||||||||||||||
| John J. Lukens | Union Center National Bank Pension Plan Trust | 3 | 58,733 | 0 | |||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||
James W. Sorge |
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||
In the table above:
• | The Company has determined the years of credited service based on the same pension plan measurement date that the Company used in preparing its audited financial statements for the year ended December 31, 2014; we refer to that date as the “Plan Measurement Date”; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
29
• | when we use the phrase “present value of accumulated benefit”, we are referring to the actuarial present value of the Named Officer’s accumulated benefits under the Company’s pension plans, calculated as of the Plan Measurement Date; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | the present value of accumulated benefits shown in the table above has been determined using the assumptions set forth in the Company’s audited financial statements for the year ended December 31, 2014; and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | column (e) refers to the dollar amount of payments and benefits actually paid or otherwise provided to the Named Officer during 2014 under the Company’s pension plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Union Center National Bank Pension Trust — Trust—which we refer to as the “Pension Plan”—is intended to be a tax-qualified defined benefit plan under Section 401(a) of the Internal Revenue Code. The Pension Plan, which has been in effect since March 15, 1950, generally covers employees of Union Center Nationalthe Bank and Center Bancorpthe Company who have attained age 21 and completed one year of service. The normal retirement (age 65) pension payable under the Pension Plan is generally equal to 44% of a participant’s highest average compensation over a 5-year period. Compensation means a participant’s W-2 wages, increased by certain reductions such as 401(k) contributions. The normal retirement benefit is proportionately reduced if a participant has less than 25 years of service at age 65. None of ourthe Company’s Named Officers was eligible to retire with a normal retirement pension as of December 31, 2010.2014.
The Company froze the benefits under the Pension Plan effective as of September 30, 2007. All future benefit accruals in the Pension Plan were discontinued and all retirement benefits that employees would have earned as of September 30, 2007 have been preserved. While benefits have been frozen, the present value of the projected future cash payments may change from period to period.
A participant may retire before or after age 65. A participant will qualify for immediate commencement of an early retirement pension if he or she retires after attaining age 60 and completing at least six years of service. A participant who completes five years of service is entitled to a vested pension commencing at normal retirement age or after meeting the early retirement requirements. Early retirement and vested pension benefits are calculated in the same manner as a normal retirement pension, but are multiplied by a fraction the numerator of which is the participant’s years of service and the denominator of which is the number of years of service the participant would have accumulated through normal retirement. Benefits payable prior to normal retirement are also subject to adjustment for actuarial equivalence, using age and interest factors specified by the Pension Plan. Based upon their ages and years of service, none of ourthe Company’s Named Executive Officers is currently eligible for an early retirement pension under the Pension Plan.
Pension Plan benefits are generally payable in the form of a life annuity or a joint and survivor annuity. However, a participant may elect to receive his or her pension in a lump sum. All forms of benefit are actuarially equivalent to a single life annuity form.
Nonqualified Deferred Compensation
The Union Center National Bank Deferred Compensation Plan for Senior Executives and Directors was terminated in 2008.
Stock Option Plans
WeCompany does not currently maintain the 2009 Equity Incentive Plan, under which our Compensation Committee may grant “incentive stock options” as defined under the Internal Revenue Code,have any non-qualified stock options, restricted stock awards and restricted stock unit awards to employees, including officers, and consultants. We previously maintained our 1999 Employee Stock Incentive Plan and our 1993 Employee Stock Option Plan, both of which have expired. No additional grants may be made under those plans. We adopted all of these plans in order to attract and retain qualified officers and employees and, with respect to the 2009 Equity Incentive Plan, consultants. Under the 1999 Employee Stock Incentive Plan, our Compensation Committee was able to grant incentive stock options, non-qualified stock options and restricted stock awards to our employees, including our officers. Under the 1993 Employee Stock Option Plan, our Compensation Committee was able to grant incentive stock options and non-qualified stock options to our officers and employees.
A total of 400,000 shares of common stock were authorized for issuance under the 2009 Equity Incentive Plan. A total of 397,197 shares were available for future grants as of January 1, 2011. As of December 31, 2010, we had 162 employees, all of whom are eligible to participate in the 2009 Equity Incentive Plan. Future grants under the 2009 Equity Incentive Plan have not yet been determined. No option will be exercisable more than ten years from the date of grant and no option or other award may be granted after March 26, 2019 under our 2009 Equity Incentive Plan.
We initially had 435,153 shares of our common stock authorized for issuance under the 1999 Employee Stock Incentive Plan (as adjusted for stock splits and stock dividends) and we initially had 633,194 shares authorized for issuance under the 1993 Employee Stock Option Plan (as adjusted for stock splits and stock dividends).
The following table provides information about our common stock that may be issued upon the exercise of options, warrants and rights under our 2009 Equity Incentive Plan, 1999 Employee Stock Incentive Plan, 1993 Employee Stock Option Plan, 1993 Outside Director Stock Option Plan and 2003 Non-Employee Director Stock Option Plan as of December 31, 2010. These plans were our only equitydeferred compensation plans in existence as of December 31, 2010. As of December 31, 2010, awards could only be granted under the 2009 Equity Incentive Plan and 2003 Non-Employee effect.
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Director Stock Option Plan.Compensation
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| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
| Equity Compensation Plans Approved by Shareholders | 198,946 | 7.67 – 15.73 | 843,127 | |||||||||
| Equity Compensation Plans Not Approved by Shareholders | — | — | — | |||||||||
| Total | 198,946 | 7.67 – 15.73 | 843,127 | |||||||||
Agreements with Named Officers
We have entered into a Non-Competition Agreement, dated as of December 2, 2010 (the “Agreement”), with Anthony C. Weagley, President and Chief Executive Officer and a director of Center. The Agreement, which has a two year term, provides that for the 12 month period immediately following Mr. Weagley’s separation from service with Center, whether or not Center or the Bank has engaged Mr. Weagley as a consultant upon his separation of service, Mr. Weagley will not, directly or indirectly, as an agent, employee, owner, partner, stockholder or otherwise, compete with Center or the Bank or establish, engage in, or become interested in any business, trade or occupation that competes with Center or the Bank in the financial products or services industry in any county in any state of the U.S. in which Center’s or the Bank’s business is currently being conducted or is being conducted when Mr. Weagley’s separation from service occurs. The Agreement also provides that Mr. Weagley will not solicit customers or employees during such period. In consideration for Mr. Weagley’s covenant not to compete, upon his separation from service for any reason or due to retirement, Center will pay Mr. Weagley a lump sum payment equal to the aggregate of two times the annual rate of base salary then being paid to Mr. Weagley. No amounts are payable in the event of Mr. Weagley’s termination of employment as a result of death or disability. The payments described in the Agreement are independent of and will be in addition to any payments required under any other plan or agreement that may be in effect between Center and Mr. Weagley at the time of separation. Center will not be obligated to make the payments described above if Mr. Weagley voluntarily terminates his service with Center, other than for good reason, as defined in the Agreement. Center also will not be obligated to make the payments described above if necessary to comply with Section 111 of the Emergency Economic Stabilization Act (“EESA”). We had previously entered into an employment agreement with Mr. Weagley, which expired on December 31, 2009.
Had Mr. Weagley separated from service on December 31, 2010, he would have been entitled to receive a lump sum payment of $588,000 pursuant to the Agreement described above.
Compensation of Directors
The following table sets forth certain information regarding the compensation weearned by or paid to our directorsthe Directors during the Company’s fiscal year ended December 31, 2014:
Director Compensation
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Name | Fees earned | Stock | Options | Non-equity | Change in | All other | Total | |||||||||||||||||
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Frank W. Baier |
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| 21,450 |
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Stephen T. Boswell |
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| 21,750 |
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Frederick Fish |
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| 32,900 |
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Frank Huttle III |
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| 19,200 |
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Michael Kempner |
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| 17,375 |
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Howard Kent |
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| 38,700 |
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Nicolas Minoia |
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| 39,450 |
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Joseph Parisi Jr. |
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| 18,000 |
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Harold Schechter |
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| 34,500 |
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William A. Thompson |
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| 33,100 |
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Raymond J. Vanaria |
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| 40,750 |
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Alexander Bol |
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| 25,800 |
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Lawrence B. Seidman |
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| 17,600 |
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For information concerning Messrs. Sorrentino and Weagley, who served as directors during 2010. Mr. DeLaney2014, please see the “Summary Compensation Table”.
Messrs. Bol and Mr. Kramer retired as directors on December 1, 2010, and Ms. Curtis retired as a director on March 24, 2010. Ms. Klein was appointed toSeidman resigned from the Board of Directors on March 25, 2010. Alan H. Straus was appointed as a director effective JanuaryJuly 1, 2011, and is not included in2014 upon the following table. None of our directors received compensation under any non-equity incentive plan during 2010.
Director Compensation
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| Name (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards (SI) (c) | Option Awards ($) (d) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g) | Total ($) (h) | ||||||||||||||||||
| Alexander Bol | 41,097 | — | 7,503 | — | — | 48,600 | ||||||||||||||||||
| Brenda Curtis | 9,050 | — | 7,503 | — | — | 16,553 | ||||||||||||||||||
| John DeLaney | 20,547 | — | 7,503 | — | — | 28,050 | ||||||||||||||||||
| James J. Kennedy | 27,797 | — | 7,503 | — | 6,523 | 41,823 | ||||||||||||||||||
| Howard Kent | 32,999 | — | 7,503 | — | 8,757 | 49,259 | ||||||||||||||||||
| Phyllis S. Klein | 16,447 | — | 7,503 | — | — | 23,950 | ||||||||||||||||||
| Elliot I. Kramer | 24,747 | — | 7,503 | — | — | 32,250 | ||||||||||||||||||
| Nicholas Minoia | 25,647 | — | 7,503 | — | — | 33,150 | ||||||||||||||||||
| Harold Schechter | 26,547 | — | 7,503 | — | — | 34,050 | ||||||||||||||||||
| Lawrence Seidman | 28,447 | — | 7,503 | — | 8,419 | 44,369 | ||||||||||||||||||
| William Thompson | 28,047 | — | 7,503 | — | — | 35,550 | ||||||||||||||||||
| Raymond Vanaria | 34,747 | — | 7,503 | — | 11,424 | 53,674 | ||||||||||||||||||
In the table above:
1993 Outside Director Stock Option Plan
Our 1993 Outside Director Stock Option Plan was adopted in order to attract and retain qualified directors. Pursuant to our 1993 Outside Director Stock Option Plan, each non-employee member of our Board received a one-time stock option covering 36,181 shares of our common stock (as adjusted for stock splits and stock dividends). These options become exercisable in three installments, commencing one year after the date of grant, at a per share exercise price equal to the fair market value of one share of our common stockMerger dated January 20, 2014 as reported on the Current Report on Form 8-K filed on even date of grant. Such options may not be exercised more than ten years after their date of grant. No options were permitted to be granted under our 1993 Outside Director Stock Option Plan after November 17, 2003.therewith.
We initially had 569,876 shares of our common stock authorized for issuance under our 1993 Outside Director Stock Option Plan (as adjusted for stock splits and stock dividends).
2003 Non-Employee Director Stock Option Plan
Our 2003 Non-Employee Director Stock Option Plan was adopted in order to attract and retain qualified directors. Our 2003 Non-Employee Director Stock Option Plan initially provided that on June 1 of each year, directors who served continuously on our Board duringpay the twelve months immediately preceding such date and who were not employed by us or any of our subsidiaries during that twelve month period would be granted a stock option covering 3,000 shares of common stock. These options vest over a four year period, subject to acceleration in certain instances. For an eligible director who remained on our Board for the periods listed below, the operationnon-employee members of the 2003 Non-Employee Director Stock Option Plan as initially adopted would be as follows:
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During 2004, 2005, 2006Company’s Board a fee of $1,200 per Board meeting attended and 2007, after giving effect$900 per Bank Board Committee meeting attended. Our Directors are also eligible to stock splits and stock dividends, we granted options covering 3,308, 3,473, 3,473 and 3,473 shares, respectively, to each non-employee member ofparticipate in our Board pursuant to our 2003 Non-Employee Director Stock Option Plan.
On February 28, 2008, our Board adopted amendments to the 2003 Non-Employee Director Stock Option Plan providing that options covering 3,473 shares would be granted on March 1 of each year, commencing March 1, 2008, to directors who served continuously on our Board during the six months immediately preceding such date and who were not employed by us or any of our subsidiaries during that six month period. No changesequity compensation plans, although no grants were made to the vesting provisionsin 2014.
Interest of the 2003 Non-Employee Director Stock Option Plan.Management and Others in Certain Transactions; Review, Approval or Ratification of Transactions with Related Persons
All of the options granted in 2005 and 2006 are fully exercisable, three quarters of the options granted in 2007, one half of the options granted in 2008, one half of the options granted in 2009 and one quarter of the options granted in 2010 are exercisable on or before April 1, 2011. We initially had 551,250 shares of our common stock authorized for issuance under our 2003 Non-Employee Director Stock Option Plan (as adjusted for stock splits and stock dividends) and 445,930 shares remained available for grant as of January 1, 2011.
During 2010, there were no fees paid to any director of Center Bancorp for any meeting of the Center Bancorp Board of Directors. The chairman ofUnder its charter, the Audit Committee reviews and the chairman of the Compensation Committee received $500 for each committee meeting attended. Members of the Audit Committee and the Compensation Committee received $300 for each committee meeting attended. Alexander A. Bol, Chairman of the Board of Union Center National Bank, received a $15,000 annual retainer and $900 for each meeting of Union Center National Bank’s Board that he attended. All other directors of Union Center National Bank who are not officers of the Bank received a $7,000 annual retainer and $900 for each meeting of the Union Center National Bank Board that they attended. Based on the recommendation of its outside compensation consultant, the Board approved the following fees, effective January 1, 2011: the Chairman of the Board will receive a retainer of $16,000 per year (a $1,000 increase), the Vice Chairman will receive a retainer of $12,000 per year andapproves all other directors will receive a retainer of $8,000 per year (a $1,000 increase). In addition, the Chairman of the Audit and Compensation Committees will receive a fee of $600 per meeting attended. Other members of those Committees will receive a fee of $400 per meeting attended. The Chairman of the Board will receive a fee of $1,000 for each meeting attended. Other directors will receive $900 per meeting attended.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Alexander A. Bol, Phyllis S. Klein (since March 25, 2010), Lawrence B. Seidman and William A. Thompson. Of the persons named, only Mr. Bol has served as an officer and/or employee of Center Bancorp or Union Center National Bank. Brenda Curtis, who served as a director until her resignation on March 24, 2010, also served on the Compensation Committee during 2010. Mr. Weagley participates in determinations regarding compensation of all employeesrelated party transactions, other than himself.
Certainextensions of our directors and officers and their associates have had loan transactions with Union Center Nationalcredit by the Bank in the ordinary course of business during 2010. All such transactions with these directors and officers and their associates were made in the ordinary courseits business. Under banking regulation, those extensions of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time of such transactions for comparable persons not related to us or Union Center National Bank and did not involve more than a normal risk of collectability or present other unfavorable features.
Policies and Procedures Concerning Related Party Transactions
The Audit Committee of the Board of Directors has adopted written procedures governing related party transactions. The procedures include the following:
Directors. For additional procedures, see the Audit Committee Charter,charter, which was attachedis available to shareholders on the 2010 proxy statement as Annex B. The Audit Committee reviews related party transactionsCompany’s website at least on a monthly basis.www.cnob.com. By “related party transaction,” we mean a transaction between the Company or any of its subsidiaries, on the one hand, and an executive officer, director or immediate family member of an executive officer or a director, on the other hand.
Compensation Committee Report
The Compensation CommitteeBank has reviewed and discussed the information provided under the caption “Compensation Discussion and Analysis” set forth above. Based on that review and those discussions, the Compensation Committee recommended to our Board that such “Compensation Discussion and Analysis” be included in this proxy statement.
In addition, in accordance with U.S. Treasury regulations applicable to participantsmade in the TARP Capital Purchase Program,past and, assuming continued satisfaction of generally applicable credit standards, expects to continue to make loans to directors, executive officers and their associates (i.e. corporations or organizations for which they serve as officers or directors or in which they have beneficial ownership interests of ten percent or more). These loans have all been made in the Compensation Committeeordinary course of Center Bancorp’sthe Bank’s business on substantially the same terms, including interest rates
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and collateral, as those prevailing at the time for comparable transactions with persons not affiliated with the Company and do not involve more than the normal risk of collectability or present other unfavorable features.
We utilize the MWW Group to provide advertising and public relations assistance and advice. Michael Kempner, one of our directors, is the President and CEO of the MWW Group, Inc.. During 2014, we paid the MWW Group a total of $210,670 for its services, including marketing, branding and related services We believe the fees charged the Bank by the MWW Group are at least as favorable to the Bank as we could receive from an unaffiliated third party. We have continued to use the services of the MWW Group during 2015.
Members of our Board of Directors, certifies that:
As required under Treasury’s initial interim final rule relatedincluding our Chairman and CEO Frank Sorrentino and Messrs. Boswell, Huttle, Kempner and Parisi, are, either directly or through their interests in family limited liability companies, members of a limited liability company that is the sole member of two other limited liability companies which each own one of our branches, which are leased to the TARP executive compensation limitations issued in October 2008, the Company’s Senior Risk Officer in May 2009 reviewed with the Committee, at the directionBank. Our Board members collectively own 55.5% of the Company’s primary federal regulator,membership interests in this limited liability company. Each of Messrs. Sorrentino, Huttle, Parisi, and Kempner owns an 11.1% interest in the Company’s executive incentive compensation plans to ensure thatlimited liability company. No director is the Company’s executive officers were not encouraged to take unnecessary and excessive risks that could threaten the value of the Company. As required by the June 2009 interim final rule, the Committee engaged in December 2009, with the assistance of the Company’s Senior Risk Officer, inmanaging member or a broader review that included all of the Company’s incentive compensation plans for all employees. This latter review included discussion, evaluation and review of the plans applicable to the Company’s senior executive officers and other eligible officers to ensure that such plans do not encourage such officers to take unnecessary and excessive risks that threaten the value of the Company; discussion, evaluation and review of all employee plans in light of the risks posed to the Company by such plans and how to limit such risks (including ensuring the plans do not encourage behavior focused on short-term results rather than long-term value creation); and discussion, evaluation and review of all employee plans to ensure the plans do not encourage the manipulation of reported earnings to enhance the compensation ofmanager or officer or any of the Company’s employees.limited liability companies which serve as the landlords or the parent limited liability company.
The lease for our Cresskill branch has an initial term ending on June 30, 2026. The Bank has the option to extend the lease term for up to three additional five-year periods, or a total of fifteen additional years. The initial rent for the branch was $157,795 per year, and the rent will increase annually by the greater of 2.50% or the rate of increase of the consumer price index for the greater New York metropolitan area. In meeting2016, the rent will be reset to the greater of the prior year’s rent, or the “market rent” as defined under the lease, and will thereafter increase annually by the greater of 2.50% or the rate of increase of the consumer price index for the greater New York metropolitan area. During any option period, the rent will be reset to the greater of the prior year’s rent or the “market rent”, as defined in the lease, and will then increase annually by the greater of 2.50% or the rate of increase of the consumer price index for the greater New York metropolitan area. For 2012, the Bank paid total rent of $184,509 for the Cresskill branch.
The lease for our John Street, Hackensack branch has a term ending on December 31, 2016. The Bank has the option to extend the lease term for up to three additional five-year periods, or a total of fifteen additional years. The initial rent for the branch was $148,000 per year, and the rent will increase annually by the greater of 2.50% or the rate of increase of the consumer price index for the greater New York metropolitan area. During any option period, the rent will be reset to the greater of the prior year’s rent or the “market rent”, as defined in the lease, and will then increase annually by the greater of 2.50% or the rate of increase of the consumer price index for the greater New York metropolitan area. For 2012, the Bank paid total rent of $192,017 for the John Street, Hackensack branch.
Because of the interests of Board members in these leases, the Board determined that the rent should be set at “fair market rent.” Under regulations of the New Jersey Department of Banking and Insurance, any real estate transaction with the Company’s Senior Risk Officer and other members of executive management, the Committee identified the Company’s senior executive officer compensation plans. For 2010, these plans were the Achievement Incentive Plan (“AIP”) and the Loan Incentive Plan. The Committee also reviewed the Company’s other non-senior executive officer compensation plan, the 2011 Branch Management Incentive Compensation Program and the proposed Mortgage Lender Incentive Plan. See the Compensation Discussion and Analysis for the services provided by our consultant in 2010.
The Committee’s reviewa bank’s board of the Company’s AIP concluded with a determination by the Committee that the plan did not encourage unnecessary and excessive risks that threatened the value of the Company and did not encourage manipulation of the Company’s reported earnings to enhance the compensation of any of the Company’s employees. The AIP contained a soundness threshold that conditions any incentive payments to any plan participants on attaining very specific quantifiable goals verified by the CEO and Board of Directors. The review concluded that the exclusion of the CEO, due to TARP limitations, whodirectors must approve all awards under the Plan, provided a significant restraint to actions resulting in inappropriately higher risk to the Company. Furthermore, the plan limits the maximum amount of payout and participant inclusion in the Plan is determined annually and inclusion in one year does not guarantee inclusion in subsequent years, thus further limiting the risk to the Company. In connection with the review in December 2009, it was noted that the Company’s chief executive officer wasbe subject to the cash bonus prohibition for the TARP period, and thus not eligible to participate in the AIP. The December 2009 review recommended consideration of certain changes, including a minimum Company profitability requirement. The review also concluded that consideration be given to adopting a pooled incentive derived from the financial statements, which would allow for better peer comparisons. These recommendations will be included in any future plans and incorporated in existing plans as appropriate. The Committee, with the assistance of the Senior Risk Officer, conducted similar reviews in June of 2010 and December of 2010 as requiredan appraisal by TARP. These reviews also concluded that no unnecessary risks were present and that the plans had sufficient controls in place to manage acceptable risk. In light of the Company’s performance, the Compensation Committee and our Board of Director’s determined that no
AIP awards for 2009 or 2010 would be granted to any of the SEOs participating in the AIP due to overall Company performance falling short of budget expectations.
The review of the Company’s Loan Incentive Plan, which was modified during 2009 to incorporate additional risk mitigators, concluded with a determination by the Committee that the plan did not encourage unnecessary or excessive risks that threatened the value of the Company or that encouraged the manipulation of the Company’s earnings to enhance the compensation of any of the Company’s loan officers. Similar reviews in June 2010 and December 2010 determined the plan did not encourage unnecessary or excessive risks that threatened the value of the Company or that encouraged the manipulation of the Company’s earnings to enhance the compensation of any of the Company’s loan officers. The Company requires participants to be in good standing and prohibits awards based on transactions approved solely under the officer’s authority. Additionally, the plan requires that awards will be eligible only for loans that meet safety and soundness underwriting standards. Incentive awards earned under the plan may be adjusted based on current and historical credit quality results as measured by actual delinquency levels. Unacceptable performance in subsequent periods allows the Company to recover (“clawback”) previously paid awards. The Company believes that there are adequate controls and clawback provisions embedded within the plan to mitigate the risk associated with the plan. Officers that participate in the Loan Incentive Plan do not participate in the AIP. The December 2009 and subsequent reviews recommended incorporating a deferral feature to allow for the evaluation of the time horizon associated with realizing the impact of loans generated in the current period.
After its review of these incentive compensation arrangements, the Committee was able to conclude that none of these arrangements encourage manipulation of the Company’s reported earnings to enhance the compensation of any of the Company’s employees.
Alexander A. BolPhyllis S. KleinLawrence B. SeidmanWilliam A. Thompson
Other Compensation Committee Matters
Charter. Our Board of Directors has defined the duties of its Compensation Committee in a charter. A copy of the current Compensation Committee charter was attached to our 2010 proxy statement asAnnex A; the charter is not presently included on our Web site.
Authority, Processes and Procedures. Our Compensation Committee is responsible for administering our equity compensation plans, for establishing the compensation of our president and chief executive officer and for recommending to the Board the compensation of our other executive officers. Our Compensation Committee also establishes policies and monitors compensation for our employees in general. While the Compensation Committee may, and does in fact, delegate authority with respect to the compensation of employees in general, the Compensation Committee retains overall supervisory responsibility for employee compensation. With respect to executive compensation, the Compensation Committee receives recommendations and information from senior staff members, as well as outside compensation consultants, regarding issues relevant to determinations made by the Compensation Committee. Mr. Weagley participates in Committee deliberations regarding the compensation of other executive officers, but does not participate in deliberations regarding his own compensation.
Consultants. The Compensation Committee recognizes that it is essential to receive objective advice from an outside compensation consultant. Currently, the Committee has engaged Meyer Chatfield Compensation Advisors (MCCA), an independent compensation consultingappraisal firm, strictly devoted to the community banking industry, as its outside consultant. MCCA was engaged by the Compensation Committee and does not take direction from the executives, unless specifically advised to do so at the direction of the Compensation Committee.
Underwhich must opine that the terms of this engagement, MCCA is required to obtain the prior approval of the Compensation Committee before MCCA performs any non-executive compensation related servicestransaction are arm’s length terms and as beneficial to the Company. MCCA will reportbank as it could obtain from a third party. The Bank therefore retained an independent appraisal firm to review the Compensation Committee any such servicesproperties and fees annuallydetermine the fair market rent, and this rent was used for the leases. These leases were then submitted to and approved by the New Jersey Department of Banking and Insurance. Based upon appraisals we obtained prior to entering into each lease, we believe the reasonable request of the Committee. The Compensation Committee determines whether MCCA’s advice is objective and free from the influence of management. The Compensation Committee also closely examines the safeguards and steps MCCA takes to ensure that its executive compensation consulting serviceslease terms are objective. The Compensation Committee takes into consideration that:
MCCA provided Management and the Committee with market data related to base salaries for all other employees to facilitate salary administration and appropriate cash incentives. Additionally, MCCA assisted with the design of a Mortgage Lender’s Incentive Plan, TARP certifications and certain executive agreements, including a Non-Compete Agreement. MCCA provided additional information to the Committee as the Committee directed.it would have received from an unaffiliated third party.
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PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee Matters
Charter. Our Boardhas appointed the firm of Directors has established a separately-designated standing Audit Committee in accordance with Section 3(a)(58)(A) ofCrowe Horwath LLP to act as our independent registered public accounting firm and to audit our consolidated financial statements for the Securities Exchange Act of 1934. Our Board of Directors has definedfiscal year ending December 31, 2015. This appointment will continue at the duties of its Audit Committee in a charter. A copy of the current Audit Committee charter was attached to our 2010 proxy statement asAnnex B; the charter is not presently included on our Web site.
Independence of Audit Committee Members. Our common stock is listed on the Nasdaq Global Select Market and Center Bancorp is governed by the listing standards applicable thereto. All memberspleasure of the Audit Committee of the Board of Directors have been determined to be “independent directors” pursuantand is presented to the definition contained in Rule 4200(a)(15)stockholders for ratification as a matter of good governance. In the National Association of Securities Dealers’ Marketplace Rules and under the SEC’s Rule 10A-3.
Audit Committee Financial Expert. Our Board of Directors has determinedevent that one of the members ofthis appointment is not ratified by our stockholders, the Audit Committee Raymond Vanaria, constituteswill consider that fact when it selects independent auditors for the following fiscal year.
Crowe Horwath LLP has served as our independent registered public accounting firm since the closing of the Merger on July 1, 2014, and one or more representatives of Crowe Horwath LLP will be present at the Annual Meeting. These representatives will be provided an “audit committee financial expert”, as such term is defined byopportunity to make a statement at the SEC. As noted above, Mr. Vanaria — as wellAnnual Meeting if they desire to do so and will be available to respond to appropriate questions from stockholders.
Prior to July 1, 2014, BDO USA, LLP served as the other membersCompany’s independent registered public accounting firm. BDO USA, LLP was engaged on July 8, 2013. Prior to this date, ParenteBeard LLC served as the Company’s independent registered public accounting firm.
The following table sets forth a summary of the Audit Committee — has been determined to be “independent”.
Audit Committee Report. In connection with the preparation and filing of Center Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2010:
By: The Audit Committee of the Board of Directors
James J. KennedyHoward KentHarold SchechterWilliam ThompsonRaymond Vanaria
Accounting Fees and Other Accounting Matters
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the Audit Committee’s charter, all audit and audit-related work and all non-audit work performed by our principal independent accountant is approved in advance by the Audit Committee, including the proposed fees for such work. The Audit Committee is informed of each service actually rendered that was approved through its pre-approval process.
Audit Fees. Audit fees billed or expected to be billed to usthe Company by our principal independent accountant(i) BDO USA, LLP for professional services rendered for the audit of the financial statements included in our Annual Report on Form 10-K for the yearsyear ended December 31, 20092013 and 2010,(ii) Crowe Horwath and reviews ofBDO USA, LLP for professional services rendered for the financial statements included in our Quarterly Reports on Form 10-Q during 2009 and 2010, totaled $242,959 and $255,299, respectively.year ended December 31, 2014.
Audit-RelatedPrincipal Accounting Firm Fees. A total of $38,029 and $116,676 in audit-related
Aggregate fees was billed for fiscal years 2009 and 2010, respectively. Such services are defined as services which are reasonably related to the performance of the audit or review of our financial statements but are not reported under the immediately preceding paragraph.
Tax Fees. We were billed an aggregate of $25,152 and $25,984 by our principal independent accountantcompany for the fiscal years ended December 31, 20092014 and 2010, respectively, for tax services, principally representing advice regarding2013 by the preparation of income tax returns.
All Other Fees. We were billed $0 and $0 by ourCompany’s principal independent accountant for the fiscal years ended December 31, 2009 and 2010, respectively, for all services not coveredaccounting firm are shown in the immediately three preceding paragraphs.following table.
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| Fiscal Year Ended December 31 | |||||||||||||
2014 | 2013 | |||||||||||||
Audit Fees |
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| $ |
| 533,000 |
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| $ |
| 277,334 | ||||
Audit Related Fees |
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| 0 |
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| 32,000 | ||||||||
Tax Fees(1) |
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| 38,000 |
|
| 33,500 | ||||||||
Other Fees |
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| 33,741 |
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| 0 | ||||||||
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Total Fees |
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| $ |
| 604,471 |
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| $ |
| 342,834 | ||||
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(1) | Consists of tax filing and tax related compliance and other advisory services. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Required Vote
Other Matters. The Audit Committee has determined thatTHE PROPOSAL TO RATIFY THE SELECTION OF CROWE HORWATH LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2015 FISCAL YEAR REQUIRES AN AFFIRMATIVE VOTE OF THE MAJORITY OF THE SHARES REPRESENTED IN PERSON OR BY PROXY AT THE ANNUAL MEETING AND ENTITLED TO VOTE ON THE PROPOSAL.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF CROWE HORWATH LLP AS THE COMPANY’S INDEPENDENT AUDITORS
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SHAREHOLDER PROPOSALS
Proposals of shareholders to be included in the provision of all services providedCompany’s 2016 proxy material must be received by our principal independent accountant during the years ended December 31, 2009 and December 31, 2010 is compatible with maintaining the independence of our principal independent accountant..
Nominating Committee Matters
Independence of Nominating Committee Members. All memberssecretary of the Nominating Committee of our Board of Directors have been determined to be “independent directors” pursuant to the definition contained in Rule 4200(a)(15) of the National Association of Securities Dealers’ Marketplace rules.
Procedures for Considering Nominations Made by Shareholders. The Nominating Committee’s charter describes procedures for nominations to be submitted by shareholders and other third-parties, other than candidates who have previously served on the Board or who are recommended by the Board. The charter states that a nomination must be delivered to our corporate Secretary at the principal executive offices of Center Bancorp notCompany no later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the close of business on the 10th day following the day on which public announcement of the date of such meeting is first made by us. The public announcement of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving of a notice as
December 1, 2015.
described above. The charter requires a nomination notice to set forth as to each person whom the proponent proposes to nominate for election as a director: (a) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Schedule 14A under the Securities Exchange Act of 1934, as amended (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director it elected), and (b) information that will enable the Nominating Committee to determine whether the candidate or candidates satisfy the criteria established pursuant to the charter for director candidates.SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTS COMPLIANCE
Qualifications. The charter describes the minimum qualifications for nominees and the qualities or skills that are necessary for directors to possess. Each nominee:
Identification and Evaluation of Candidates for the Board. Candidates to serve on the Board will be identified from all available sources, including recommendations made by shareholders. The Nominating Committee’s charter provides that there will be no differences in the manner in which the nominating committee evaluates nominees recommended by shareholders and nominees recommended by the Committee or management, except that no specific process shall be mandated with respect to the nomination of any individuals who have previously served on the Board. The evaluation process for individuals other than existing Board members will include:
together with a review of such other information as the Nominating Committee shall determine to be relevant.
Third Party Recommendations. In connection with the 2011 annual meeting, the Nominating Committee did not receive any nominations from any shareholder or group of shareholders which owned more than 5% of our common stock for at least one year.
Charter. Our Board of Directors has defined the duties of its Nominating Committee in a charter. A copy of the current Nominating Committee charter was attached to our 2010 proxy statement asAnnex C; the charter is not presently included on our Web site.
Code of Ethics
We are required to disclose whether we have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. We have adopted such a code of ethics and have posted a copy of the code on our internet website at the internet address:http://www.ucnb.com. Copies of the code may be obtained free of charge from our website at the above internet address.
Compliance with Section 16 of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executivethe Company’s officers and directors, and persons holdingwho own more than 10%ten percent of a registered class of the Company’s equity securities, of Center Bancorp to file with the SEC and to provide us with initial reports of ownership reports ofand changes in ownership with the Securities and annual reports of ownership of our common stockExchange Commission. Officers, directors and other equity securities. As a resultgreater than ten percent stockholders are required by regulation of the adoptionSecurities and Exchange Commission to furnish the Company with copies of the Sarbanes-Oxley Act of 2002, the reporting obligations with respect to certain transactions were accelerated to 48 business hours after the transaction. Based solely upon a review of such reports furnished to us, we believeall Section 16(a) forms they file. The Company believes that all suchpersons associated with the Company and subject to Section 16(a) reports werehave made all required filings on a timely filed with respect tobasis for the fiscal year ended December 31, 2010,2014, except that director Lawrence Seidman inadvertently reported six stock purchases late, Howard Kent inadvertently reported one stock purchase late and Anthony Weagley inadvertently reported one grantfor Stephen T. Boswell, who due to a clerical error, filed a report for a transaction occurring November 2, 2014 three days late.
OTHER MATTERS
The Board of a stock award late.
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF
PARENTEBEARD LLC AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2011
Action will be taken at the Annual Meeting to ratify the selection of ParenteBeard LLC as independent registered public accounting firm of the Company for the fiscal year ending December 31, 2011. ParenteBeard LLC was created when two accounting firms, Parente Randolph and Beard Miller Company, combined on October 1, 2009. Beard Miller Company had served as the Company’s independent auditors since May 5, 2006. The Company has been advised by ParenteBeard LLC that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in any capacity in the Company. We are asking our shareholders to ratify the selection of ParenteBeard LLC as our independent registered public accounting firm. Although ratificationDirectors is not required by our Bylaws or otherwise, the Board considers the selectionaware of the independent registered accounting firm to be an important matter of shareholder concern and is submitting the selection of ParenteBeard LLC to our shareholders for ratification as a matter of good corporate practice.
Approval of the ratification of ParenteBeard LLC as the Company’s independent registered public accounting firm for 2011 will require the affirmative vote of a majority of the votes cast atany other matters which may come before the Annual Meeting. Abstentions and broker non votes will not be counted as votes cast and therefore will not affectHowever, in the outcomeevent such other matters come before the meeting, it is the intention of the voting.
Representatives of ParenteBeard LLC are expected to be present atpersons named in the Annual Meeting, will be afforded the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2.
PROPOSAL 3
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Background of the Proposal
On February 17, 2009, the Stimulus Act was enacted. The Stimulus Act imposes a number of requirements on financial institutions that received an investment under the Capital Purchase Program of the United States Department of the Treasury’s Troubled Asset Relief Program (“TARP”). One of the requirements is that at each annual meeting of shareholders during the period in which any obligation arising from TARP financial assistance remains outstanding TARP recipients shall permit a separate non-binding “say-on-pay” shareholder vote to approve the compensation of executives. A similar requirement was made applicable to all public companies by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the SEC rule issued thereunder on January 25, 2011.
Accordingly, shareholders are being asked to approve the compensation of Center’s executives as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the various compensation tables and the related narrative disclosures.
Executive Compensation
We believe that our compensation policies and procedures, which are reviewed and approved by the Compensation Committee, encourage a culture of pay for performance and are strongly aligned with the long-term interests of shareholders.Shareholders are encouraged to carefully review the “Executive Compensation” section of this proxy statement for a detailed discussion of the Company’s executive compensation program.
The proposal set forth below, which is advisory and will not bind the Board, gives Center’s shareholders the opportunity to vote on the compensation of Center’s executives.
Uponany such matters in accordance with the recommendation of the Board of Directors, Center asks shareholdersDirectors.
Shareholders are urged to considersign the following resolution:
“Resolved, that the shareholders of Center Bancorp, Inc. approve the compensation of Center’s executives, as described in the Company’senclosed proxy, statement for the 2011 Annual Meeting of Shareholders, including the Compensation Discussion and Analysis, the various compensation tables and the related narrative disclosures.”
Vote Required; Effect
Approval of the compensation of the Company’s executives will require the affirmative vote of a majority of the votes cast at the Annual Meeting. Abstentions and broker non votes will not be counted as votes cast and therefore will not affect the determination as to whether such compensation is approved. Because this shareholder vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.
Under the federal securities laws, as long as Center is required to hold an annual “say on pay” vote because it has received TARP funds, we will not be required to hold a “say on frequency” vote until all of our TARP indebtedness has been repaid.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” PROPOSAL 3.
INDEPENDENT PUBLIC AUDITORS
The Audit Committee of our Board of Directors has appointed ParenteBeard LLC to perform the function of independent public auditors for the year ending December 31, 2011. See Proposal 2. Representatives of ParenteBeard LLC are expected to attend our annual meeting and will be available to respond to appropriate questions of shareholders. Such representatives will have an opportunity to make a statement at the annual meeting if they so desire.
SHAREHOLDER MATTERS
If a shareholder intends to present a proposal at our 2012 Annual Meeting of shareholders, the proposal must be received by us at our principal executive offices not later than December 21, 2011 in order for that proposal to be included in the proxy statement and form of proxy relating to that meeting, and by March 5, 2012 in order for the proposal to be considered at our 2012 annual meeting of shareholders (but not included in the proxy statement or form of proxy for such meeting). Any shareholder proposal which is received after those dates or which otherwise fails to meet the requirements for shareholder proposals established by regulations of the SEC will neither be included in the proxy statement or form of proxy, nor be considered at the meeting. For a description of procedures for nominations to be submitted by shareholders, see “Nominating Committee Matters.”
Our Board has established a procedure that enables shareholders to communicate in writing with members of the Board. Any such communication should be addressed to the Chairman of the Board of Center Bancorp and should be sent to such individual c/o Center Bancorp, Inc., 2455 Morris Avenue, Union, New Jersey 07083. Any such communication must state, in a conspicuous manner, that it is intended for distribution to the entire Board of Directors. Under the procedures established by our Board, upon the Chairman’s receipt of such a communication, our corporate Secretary will send a copy of such communication to each member of our Board, identifying it as a communication received from a shareholder. Absent unusual circumstances, at the next regularly scheduled meeting of our Board held more than two days after such communication has been distributed, our Board will consider the substance of any such communication.
Our Board members are encouraged, but not required by any specific Board policy, to attend Center Bancorp’s annual meeting of shareholders. All of the then current members of our Board attended our 2010 annual meeting of shareholders.
OTHER MATTERS
Our Board is not aware that any other matters are to be presented for action, but if any other matters properly come before the Annual Meeting, or any adjournments thereof, the holder of any proxy is authorized to vote thereon at his or her discretion.
A copy of the Annual Report of Center Bancorp and Union Center National Bank for the year ended December 31, 2010 is being mailed to shareholders with this proxy statement. The Annual Report is not to be regarded as proxy soliciting material or as a communication by means of which any solicitation is to be made.
A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2010 (EXCLUDING EXHIBITS) WILL BE FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER MAKING A WRITTEN REQUEST FOR THE SAME TO JOSEPH GANGEMI, INVESTOR RELATIONS OFFICER, CENTER BANCORP, INC., 2455 MORRIS AVENUE, UNION, NEW JERSEY 07083.
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Dated: April 19, 2011
CENTER BANCORP, INC.
Proxy For Annual Meeting of Shareholders
KNOW ALL MEN BY THESE PRESENTS, that I, the undersigned shareholder of Center Bancorp, Inc., Union, New Jersey, do hereby constitute and appoint Joseph Gangemi and Vincent Tozzi, or any one of them (with full power to act alone), my true and lawful attorney(s) with full power of substitution for me and in my name, place and stead to vote all of the common stock of said corporation standing in my name on its books on April 8, 2011, at the annual meeting of shareholders to be held at Suburban Golf Club, 1730 Morris Avenue, Union, New Jersey 07083 on May 24, 2011 at 9:00 o’clock a.m. or at any adjournments thereof, with all powers the undersigned would possess if personally present, as shown on the reverse side.
(See Reverse Side)
Please date, sign and mail your proxy card back as soon as possible!
Annual Meeting of Shareholders — May 24, 2011
CENTER BANCORP, INC.
o Please mark yourvotes as in thisexample.
This proxy is being solicited on behalf of the Board of Directors, and mayreturn it in the enclosed envelope.
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | x | |
| KEEP THIS PORTION FOR YOUR RECORDS | ||
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| For | Withhold | For All | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | |||||||||
| All | All | Except | ||||||||||
| The Board of Directors recommends you vote FOR the following: | ||||||||||||
| ¨ | ¨ | ¨ | ||||||||||
| 1. | Election of Directors | |||||||||||
| Nominees | ||||||||||||
| 01 | Frank Sorrentino III | 02 | Frank W. Baier | 03 | Alexander A. Bol | 04 | Stephen Boswell | 05 | Frederick Fish | ||||
| 06 | Frank Huttle III | 07 | Michael Kempner | 08 | Nicholas Minoia | 09 | Joseph Parisi Jr. | 10 | Harold Schechter | ||||
| 11 | William A. Thompson | 12 | Raymond J. Vanaria | ||||||||||
| The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |
| 2. | To ratify the appointment of Crowe Horwath LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2015. | ¨ | ¨ | ¨ |
| NOTE:In their discretion, such other business as shall properly come before the meeting. | ||||
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 John Sample 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 |
| SHARES | ||||||
| CUSIP # | ||||||
| JOB # | SEQUENCE # | |||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
| CONNECTONE BANCORP, INC. Revocable Proxy for Annual Meeting of Shareholders May 6, 2015 Solicited on behalf of the Board of Directors |
The undersigned hereby appoints the board of directors of ConnectOne Bancorp, Inc. (the “Company”), and each of them to vote all of the shares of the Company standing in the undersigned’s name at the Annual Meeting of shareholders of the Company, to be revoked priorheld at 145 Dean Dr., Tenafly, NJ 07670 on May 6, 2015 at 8:15 am., and any adjournment thereof. The undersigned hereby revokes any and all proxies heretofore given with respect to its exercise.such meeting.
1. Election
This proxy will be voted as specified above. If no choice is specified, the proxy will be voted “FOR” Management’s nominees to the Board of Directors, for one year terms ending in 2012and “FOR” ratification of the appointment of Crowe Horwath LLP as the Company’s independent registered public accountants.
Nominees: Alexander A. Bol, Anthony C. Weagley, James J. Kennedy, Howard Kent, Phyllis S. Klein, Nicholas Minoia, Harold Schechter, Lawrence B. Seidman, Alan H. Straus, William A. Thompson
Continued and Raymond Vanaria.to be signed on reverse side
Instruction: to withhold authority to vote for any individual nominee, write that nominee’s name in the space provided below:
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2. For ratification of ParenteBeard LLC as Center Bancorp’s independent auditors for 2011.
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3. To seek non-binding approval of the compensation of Center Bancorp’s executives.
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4. Other Business — Whatever other business may be brought before the meeting or any adjournment thereof.
If any other business is properly presented at said meeting, this proxy shall be voted in accordance with the recommendations of management. Unless otherwise specified, execution of this proxy will confer authority to the persons named herein as proxies to vote shares in favor of the Board’s nominees for directors, and in favor of proposals 2 and 3.
Important: To assure your representation at the meeting, please date, sign and mail this proxy promptly in the envelope provided.
Note: When signing as attorney, executor, administrator, trustee or guardian, please give full titles. If more than one trustee, all should sign. All joint owners should sign.
Signature: ________________________Signature:_________________________Dated: __________, 2011
Important notice regarding the availability of proxy materials for the 2011 annual meeting of shareholders: The Proxy Statement for the 2011 annual meeting of Shareholders and our 2010 Annual Report to Shareholders are available at:http://www.cfpproxy.com/5260.
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