Additionally, with the exception of Director John E. Walsh, who does not participate, OceanFirst Bank paid an average of $8,033 in 2005 for each current outside director to cover a portion of the cost of medical and dental insurance provided to outside directors.

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Non-Employee Director Compensation.The following table sets forth the total cash and stock-based compensation paid to our non-employee directors for their service on the Board of Directors of OceanFirst Bank and OceanFirst Financial Corp. during 2005.

Deferred Compensation Plan for Directors. The Bank maintains a deferred compensation plan for the benefit of outside directors. The plan is a non-qualified arrangement which offers participating directors the opportunity to defer compensation through a reduction in fees in lieu of a promise of future benefits. Such benefits are payable commencing at an age mutually agreed upon by the Bank and the participating director (the “Benefit Age”). The benefits equal the account balance of the director annuitized over a period of time mutually agreed upon by the Bank and the director, and then reannuitized at the beginning of each calendar year thereafter. Lump sum payouts are also available upon eligibility for distribution of benefits or in the event of the death of the director. The account balance equals deferrals and interest. Currently, the plan credits interest on deferrals at a rate equal to the sum of (i) the “Stable Fund” investment option in the Bank’s qualified 401(k) plan plus (ii) 250 basis points. Early distribution of benefits may occur under certain circumstances which include change in control, financial hardship, termination for cause, disability or termination of the plan by authorization of the Board of Directors.

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Stock OwnershipSTOCK OWNERSHIP

The following table provides information as of March 6, 200627, 2007 with respect to the persons known by the Company to be the beneficial owners of more than 5% of its outstanding stock. A person is considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power.

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The following table provides information as of March 6, 2006,27, 2007, about the shares of the Company common stock that may be considered to be beneficially owned by each director, nominee for director and the named executive officers listed in the table under“Executive Compensation – Summary Compensation Table,” and by all such directors and executive officers of the Company as a group. A person may be considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated, each of the named individuals has sole voting power and sole investment power with respect to the shares shown.

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Proposals to Be Voted on at the Annual MeetingPROPOSALS TO BE VOTED ON AT THE MEETING

Proposal 1. Election of Directors

The Company’s Board of Directors currently consists of 9eight directors. James T. Snyder, who is a current director of the Company, has reached the Company’s mandatory retirement age of 72 and therefore will not stand for re-election at this meeting. In January 2007, the Board determined not to fill the vacancy created by Mr. Snyder’s retirement, and instead reduced the number of directors from nine to eight. All of the directors are independent under the current listing standards of Nasdaq, except for John R. Garbarino, President and Chief Executive Officer of the Company and the Bank. The Board is divided into three classes with three-year staggered terms, with approximately one-third of the directors elected each year. Each of the members of the Board also serves as a director of the Bank. The Board of Directors’ nominees for election this year, to serve for a three year term or until their respective successors have been elected and qualified, are Messrs. Donald E. McLaughlin and John W. Chadwick and Carl Feltz, Jr. and Ms. Diane F. Rhine, allE. Walsh both of whom are currently directors of the Company and the Bank.

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It is intended that the proxies solicited by the Board of Directors will be voted for the election of the nominees named above. If any nominee is unable to serve, the persons named in the proxy card will vote your shares and approve the election of any substitute proposed by the Board of Directors. Alternatively, the Board of Directors may adopt a resolution to reduce the size of the Board. At this time, the Board of Directors knows of no reason why any nominee might be unable to serve.

The Board of Directors recommends a vote “FOR” the election of Messrs. Donald E. McLaughlin and John W. Chadwick, Carl Feltz, Jr. and Ms. Diane F. Rhine.E. Walsh.

Information With Respect to Nominees, Continuing Directors and Certain Executive Officers

Information regarding the Board of Directors’ nominees for election at the Annual Meeting, as well as information regarding the continuing directors and the executive officers listed in the table under“Executive Compensation – Summary Compensation Table”who are not directors (also referred to herein as “Named Executive Officers”), is provided below. Unless otherwise stated, each individual has held his or her current occupation for the last five years. The age indicated for each individual is as of December 31, 2005.2006. The indicated period of service as a director includes service as a director of OceanFirst Bank.

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Nominees for Election of Director

John W. Chadwick is employed as the General Manager of Point Bay Fuel, a petroleum products distributor. Mr. Chadwick has been a member of the Board of Directors since 2002. He is 64 years of age.

Carl Feltz, Jr. is a registered architect and is a principal in the firm of Feltz & Frizzell Architects, LLC. Mr. Feltz has been a member of the Board of Directors since 1990. He is 67 years of age.

Diane F. Rhine is a partner in Citta Rhine, LLC, a real estate company. Ms. Rhine has served on the Board of Directors since 1997. She is 56 years of age.

Directors Continuing in Office

The following directors have terms ending in 2007:

Donald E. McLaughlin is a Certified Public Accountant.Accountant, retired. In 2005 he retired from Donald E. Mc Laughlin, CPA, P.C. Mr. McLaughlin has served on the Board of Directors since 1985. He is 58 years of age.

James T. Snyder is retired. He was formerly a 50% owner of Wallach’s, Inc. Mr. Snyder has served on the Board of Directors since 1991. He is 7159 years of age.

John E. Walshis a licensed professional engineer and has been employed with Schoor DePalma, Inc., an engineering firm, since 2001, currently as Executive Vice President. Prior to that time he was President of Bay Pointe Engineering Associates, Inc. Neither Schoor DePalma Inc. or Bay Pointe Engineering Associates, Inc. is an affiliate of the Company. Mr. Walsh has served on the Board of Directors since 2000. He is 5253 years of age.

Directors Continuing in Office

The following directors have terms ending in 2008:

Joseph J. Burkeis a Certified Public Accountant. He is a retired partner with KPMG LLP. KPMG LLP is not an affiliate of the Company. Mr. Burke has been a member of the Board since January 19, 2005. He is 5859 years of age.

Angelo Catania is President and Chief Executive Officerthe managing member of HomeStar Services LLC, a homean air conditioning, heating and oilplumbing services company, where he has been employed since February 2005. Prior to that time he was President and Chief Operating Officer of Petro, Inc. Neither HomeStar Services LLC nor Petro, Inc. is an affiliate of the Company. He has been a member of the Board since January 18, 2006. He is 5657 years of age.

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John R. Garbarino has served as Chairman, President and Chief Executive Officer of the Company since 1995.1996. He has served in various capacities for the Bank since 1971, and has been a member of the Bank’s senior management since 1979. In 1985 he was elected President and Chief Executive Officer of the Bank. He has been a member of the Bank’s Board of Directors since 1984, and was appointed Chairman of the Board in 1989. He is 5657 years of age.

The following directors have terms ending in 2009:

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Diane F. Rhine is a partner in Citta Rhine, LLC, a real estate company. Citta Rhine, LLC is not an affiliate of the Company. Ms. Rhine has served on the Board of Directors since 1997. She is 57 years of age.

Named Executive Officers Who Are Not Also Directors

Michael J. Fitzpatrick has been Executive Vice President and Chief Financial Officer of the Company since 1995. He has also been Executive Vice President and Chief Financial Officer of the Bank since 1992. Mr. Fitzpatrick has been employed by the Bank since 1992. He is 5051 years of age.

Vito R. Nardelli has been Executive Vice President, Chief Operating Officer of the Bank since September 2005. He has been employed with the Bank since June 1, 2004. Prior to that date he was employed in the banking industry for approximately 30 years, most recently as Director of Retail Banking for The Trust Company of New Jersey and, until 2003, as Division President of the Dime Savings Bank of New Jersey. He is 56 years of age.

John K. Kelly has been Senior Vice President and General Counsel of the Bank since 1990. He was Vice President and General Counsel of the Bank from 1988 until 1990. Mr. Kelly has been Senior Vice President and Corporate Secretary of the Company since 1995. He has been Corporate Secretary of the Bank since 2002. Mr. Kelly has been employed by the Bank since 1988. He is 5657 years of age.

Robert M. Pardes is Executive Vice President and Chief Lending Officer of the Bank. He was Executive Vice President and head of the Residential Loan Division until 2004. Mr. Pardes has been employed by the Bank since 2000. Prior to 2000 he served as President of Columbia Home Loans, LLC, formerly Columbia Equities, Ltd., an independent mortgage banking corporation, until it was acquired by the Bank in 2000. He is 4647 years of age.

Proposal 2. The approvalJohn K. Kelly has been Senior Vice President and General Counsel of the

OceanFirst Financial Corp. 2006 Stock Incentive Plan

On February 15, 2006, Bank since 1990. He was Vice President and General Counsel of the Board of DirectorsBank from 1988 until 1990. Mr. Kelly has been Senior Vice President and Corporate Secretary of the Company adopted, subject to stockholder approval, the OceanFirst Financial Corp. 2006 Stock Incentive Plan (the “Plan”). The Plan is intended to, among other things, increase the number of shares of common stock (“Shares”) authorized for issuance through equity awards. As of March 6, 2006, only 264,832 shares were available for issuance under the Company’s existing equity compensation plans, the Ocean Financial Corp. Amended and Restated 1997 Incentive Plan and the OceanFirst Financial Corp. 2000 Stock Option Plan.

The Plan is proposed to provide sufficient Shares to cover new award grants to enable the Company to attract, retain and motivate outside directors and employees as defined below by providing for or increasing their economic interests in the successsince 1995. He has been Corporate Secretary of the Company. The ability to grant equity awards inBank since 2002. Mr. Kelly has been employed by the future to attract peopleBank since 1988. He is 57 years of experience and ability to serve the Company and its affiliates is critical to sustain the Company’s continued growth and success. The granting of equity awards advances the interests of the Company and its shareholders by providing employees and non-employee directors upon whose judgment, initiative and efforts the successful conduct of the business of the Company and its affiliates largely depends, with additional incentive in the form of a proprietary interest in the Company to perform in a superior manner. For these reasons, the Company wishes to continue and enhance its equity awardsage.

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program. Therefore, the Company is presenting the OceanFirst Financial Corp. 2006 Stock Incentive Plan for stockholder approval in the form attached hereto as Appendix A.

Summary of the Plan

Type of Equity Awards.The Plan provides for the grant of Non-Statutory Stock Options (“NSOs”), Incentive Stock Options (“ISOs”) within the meaning of section 422 of the Internal Revenue Code of 1986, as amended (“Code”) (together, “Options”) and Stock Awards (collectively, “Awards”).

Administration. The Plan will be administered by a Committee appointed by the Company’s Board of Directors. Subject to the terms of the Plan and resolutions of the Committee, the Committee interprets the Plan and is authorized to make all determinations and decisions thereunder. The Committee also determines the participants to whom Awards will be granted, the type and amount of Awards that will be granted and the terms and conditions applicable to such grants. The Plan allows the Committee to grant Awards with respect to which the compensation realized by certain individuals may be deductible by the Company pursuant to section 162(m) of the Code, which limits the deductibility of compensation in excess of $1 million paid to the CEO and each of the four highest paid individuals during the taxable year. Compensation attributable to Options is generally deductible by the Company and not subject to the limitations of section 162(m) if the Plan is approved by shareholders, a committee satisfying the requirements of section 162(m) makes the grants, the Plan specifies the maximum number of shares with respect to which Options may be granted during a specified period of time and the compensation received by the individual is based solely on an increase in the value of the underlying stock. Some, but not all, Awards granted under the Plan will meet these criteria and therefore, will not be subject to the limitations of section 162(m).

Participants.All employees and outside directors of the Company and its subsidiaries to whom the Committee grants eligibility, are eligible to participate in the Plan. It anticipated the class of Participants will be limited to Directors, Executive Vice Presidents and Senior Vice Presidents. It is estimated that there will be approximately 23 participants.

Number of Shares of Common Stock Available. The Company has reserved 1,000,000 Shares for issuance under the Plan in connection with Awards under the Plan. In applying this limitation, the number of Shares covered by an Option shall count against the limitation on a one-for-one basis and the number of Shares associated with a Stock Award shall count against the limitation in a ratio of three to one.

Shares reserved under the Plan may be either authorized but unissued shares, or reacquired shares held by the Company in its treasury. Upon the issuance of shares used to satisfy Award grants, the number of shares then-outstanding would increase and would have a dilutive effect on the holdings of existing stockholders. Any Shares subject to an Award that expires or otherwise terminates unexercised will generally again be available for issuance under the Plan. Shares that will not be available for issuance or reissuance under the Plan include: Shares tendered by a participant as full or partial payment for the exercise of an Option, Shares associated with an Option if the Option is cancelled within the meaning of Code section 162(m),

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or Shares withheld by or otherwise remitted to satisfy a participant’s tax withholding obligations upon the lapse of restrictions on a Stock Award or the exercise of Options granted under the Plan or upon any other payment or issuance of Shares under the Plan.

Stock Option Grants. The exercise price of each ISO or NSO is determined by the Committee and will not be less than the fair market value of the common stock on the date the ISO or NSO is granted, as defined in the plan (or 110% of the fair market value of the common stock in the case of an ISO granted to a 10% shareholder of the Company). The exercise price of an Option may generally be paid in cash, shares or other property, by the surrender of all or part of the Option being exercised, by the immediate sale through a broker of the number of shares being acquired sufficient to pay the purchase price, or by a combination of these methods, as and to the extent permitted by the Committee. No more than 600,000 Shares may be issued under the Plan in connection with ISOs. The maximum number of Shares with respect to which Options may be granted to any individual during any one calendar year is 300,000 Shares.

Financial Accounting Standards require the Company to recognize compensation expense for Options. Generally, the recognition of an expense equal to the grant date “fair value” of the Options granted is required. The accounting expense is partially offset by the Company’s anticipated tax deduction, if any, for the income realized when the option is exercised.

Under the Plan, NSOs are transferable only by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code; however, with approval of the Committee, a participant may transfer an NSO for no consideration to or for the benefit of one or more family members of the participant subject to limits imposed by the Committee. In the event of a participant’s death, NSOs may be transferred to the holder’s beneficiary or, absent a beneficiary, to the estate or to a person who acquired the right to exercise the NSO by will or the laws of descent and distribution.

NSOs may become exercisable in full at the time of grant or at such other times and in such installments as the Committee determines or as may be specified in the Plan. Options may be exercised during periods before and after the participant terminates employment, as the case may be, to the extent authorized by the Committee or specified in the Plan. However, an NSO may not be exercised after the tenth anniversary of the date the NSO was granted. The Committee may, at any time and without additional consideration, accelerate the date on which an NSO becomes exercisable.

Under the Plan, ISOs are transferable only by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code. In the event of a participant’s death, ISOs may be transferred to the holder’s beneficiary or, absent a beneficiary, to the estate or to a person who acquired the right to exercise the ISO by will or the laws of descent and distribution.

ISOs may become exercisable in full at the time of grant or at such other times and in such installments as the Committee determines or as may be specified in the Plan. Options may be exercised during periods before and after the participant terminates employment, as the case may be, to the extent authorized by the Committee or specified in the Plan. An ISO may not be exercised after the tenth anniversary of the date the ISO was granted; however, if at the time an ISO is granted to an employee who is a 10% shareholder of the Company, the ISO may not be

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exercised after the fifth anniversary of the date of the grant. The Committee may, at any time and without additional consideration, accelerate the date on which an ISO becomes exercisable.

Stock Awards.The Plan also authorizes the granting of Stock Awards to employees and non-employee directors. The Committee has the authority to determine the dates on which Stock Awards granted will vest. Stock Awards may only be made in whole Shares. The Plan provides that all Stock Awards immediately vest upon a change in control of the Company, as well as following retirement, death or disability. Under the Plan the vesting of Stock Awards may also be made contingent upon the attainment of certain performance goals by the Company, which performance goals, if any, would be established by the Committee. The Committee may also accelerate the vesting of Stock Awards in its sole discretion except for any Stock Awards that are Qualified Performance-Based Awards, as defined below.

Stock Awards under the Plan are transferable only by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code; however, with approval of the Committee, a participant may transfer a Stock Award for no consideration to or for the benefit of one or more family members of the participant subject to limits imposed by the Committee. In the event of a participant’s death, Stock Awards may be transferred to the holder’s beneficiary or, absent a beneficiary, to the estate or to a person who acquired the Stock Award by will or the laws of descent and distribution.

When Shares are distributed in accordance with the Plan, the recipients will also receive amounts equal to accumulated cash and stock dividends (if any) with respect thereto plus earnings thereon minus any required tax withholding amounts. Prior to vesting, recipients of Stock Awards may direct the voting of shares of common stock granted to them and held in the trust. Shares held by the Plan trust which have not been allocated or for which voting has not been directed are voted by the trustee in the same proportion as the awarded shares are voted in accordance with the directions given by all recipients of Stock Awards.

Performance-Based Stock Awards. The Committee may grant Stock Awards that are subject to the achievement of performance goals as may be determined by the Committee. Such Awards, called “Qualified Performance-Based Awards” are Shares granted to participants with restrictions that lapse only upon the attainment of specified performance goals and will be granted to persons whom the Committee anticipates to be “Covered Employees” within the meaning of section 162(m) of the Code. The term Covered Employee means the Company’s chief executive officer and each other person whose compensation is required to be disclosed in the Company’s filings with the SEC by reason of that person being among the four highest compensated officers of the Company on the last day of a taxable year.

To the extent necessary to comply with the Qualified Performance-Based Award requirements of section 162(m)(4)(C) of the Code, with respect to any Stock Award that may be granted to one or more Covered Employees and intended to comply with the requirements for performance-based awards under section 162(m), the Committee will, in writing, (a) designate one or more Covered Employees, (b) select the performance criteria applicable to the

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performance period, (c) establish the performance goals, and amounts of such Awards, as applicable, which may be earned for such performance period, and (d) specify the relationship between performance criteria and the performance goals and the amounts of such Stock Awards, as applicable, to be earned by each Covered Employee for the performance period. Following the completion of each performance period, the Committee will certify in writing whether the applicable performance goals have been achieved for the performance period. No Stock Award or portion thereof that is subject to the satisfaction of any condition will be considered to be earned or vested until the Committee certifies in writing that the conditions to which the distribution, earning or vesting of the Stock Award is subject have been achieved. During the performance period, the Committee may not increase the amount of a Qualified Performance-Based Awards that would otherwise be payable upon satisfaction of the conditions, but may reduce or eliminate the payments as provided for in the Award Agreement. The maximum number of Shares with respect to Qualified Performance-Based Awards that can be paid to any Covered Employee under the Plan for a Performance Period (as defined in the Plan) is 100,000 Shares.

Effect of a Change in Control. In the event of a change in control of the Company (as defined in the Plan), each outstanding Award under the Plan will immediately become fully vested. Each Option will be exercisable for the remainder of its term. Further, in the event of a change in control, all available Stock Awards under the Plan that have not been granted as of that date shall automatically be granted to current employees and outside directors in proportion to the grants of Awards previously made to them under this Plan and the OceanFirst Financial Corp. 2000 Stock Option Plan. In calculating each participant’s proportion of the number of total Awards to be granted, the actual number of Shares subject to an Option awarded under this Plan or the 2000 Plan will be included at a ratio of one to one and Shares subject to Stock Awards will be included at a ratio of three to one.

Adjustments for Change in Capitalization. The Plan provides that in the event of a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event affecting the capital structure of the Company, or a merger, consolidation, acquisition of property or shares, separation, spin-off, reorganization, stock rights offering, liquidation, disaffiliation of a subsidiary, affiliate or division or similar event affecting the Company, the Committee may in its discretion make such substitutions or adjustments as it deems appropriate and equitable to the share reserve, the share limitations described above, and the purchase price and number of shares subject to outstanding equity or equity-based awards.

Certain Federal Income Tax Consequences. The following brief description of the tax consequences of Awards under the Plan is based on federal income tax laws currently in effect and does not purport to be a complete description of such federal income tax consequences.

There are no federal income tax consequences either to the optionee or to the Company upon the grant of an ISO or an NSO. On the exercise of an ISO during employment or within three months thereafter, the optionee will generally not recognize any income and the Company will not be entitled to any deduction. Generally, if the optionee disposes of shares acquired upon exercise of an ISO within two years of the date of grant or one year of the date of exercise, the optionee will recognize ordinary income, and the Company will be entitled to a deduction, equal

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to the excess of the fair market value of the shares on the date of exercise over the Option price (limited generally to the gain on the sale). The balance of any gain or loss will be treated as a capital gain or loss to the optionee. If the shares are disposed of after the two-year and one-year periods mentioned above, the Company will not be entitled to any deduction, and the entire gain or loss for the optionee will be treated as a capital gain or loss.

On exercise of an NSO, the excess of the date-of-exercise fair market value of the shares acquired over the Option price will generally be taxable to the optionee as ordinary income and deductible by the Company. The disposition of shares acquired upon the exercise of a NSO will generally result in a capital gain or loss for the optionee, but will have no tax consequences for the Company.

For Stock Awards, the recipient is deemed to receive ordinary income equal to the fair market value of the underlying Shares on the date the restrictions lapse plus any dividends and earnings on such shares (provided such date is more than six months after the date of grant) and the Company is permitted a commensurate compensation expense deduction for income tax purposes.

Generally, the Company will be entitled to a deduction for federal income tax purposes equal to the amount of any ordinary income the participant recognizes; however, section 162(m) of the Code generally disallows a public Company’s tax deduction for compensation in excess of $1 million paid in any taxable year to a Covered Employee. Compensation that qualifies as “performance-based compensation”, however, is excluded from the $1 million deductibility cap. The Company may provide that some of the Awards granted to employees whom the Committee expects to be Covered Employees at the time a deduction arises in connection with the Awards qualify as “performance-based compensation” so that deductions with respect to those Awards will not be subject to the $1 million cap under section 162(m) of the Code. Future changes in section 162(m) of the Code or the regulations thereunder may adversely affect the ability of the Company to ensure that Awards under the 2006 Plan will qualify as “performance based compensation” so that deductions are not limited by section 162(m) of the Code.

Term of the Plan. The Plan will only be effective if the Plan is approved by the shareholders of the Company. If the Plan is approved, it will be effective on the date of approval. The Plan will expire, with respect to the ability to grant Awards, on the tenth anniversary of the effective date, unless terminated sooner by the Board.

Amendment of the Plan. The Plan allows the Board to amend the Plan without stockholder approval, unless such approval is required to comply with a tax law or regulatory requirement. In no event, however, will the Plan or an Award be amended to allow any Option to be granted with an exercise price below the fair market value of the common stock on the date of grant or to allow the exercise price of any Option previously granted to be reduced subsequent to the date of award.

New Plan Benefits. The Company anticipates that Awards will primarily be made to employees and non-employee directors on or after the effective date of the Plan, as the

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Committee deems appropriate. However, as of the date of this proxy statement, no specific determinations have been made regarding any future grants under the Plan at this time.

Unless marked to the contrary, the shares represented by the enclosed proxy card, if executed and returned, will be voted “FOR” the approval of the OceanFirst Financial Corp. 2006 Stock Incentive Plan.

The Board of Directors recommends that you vote “FOR” the approval of the OceanFirst Financial Corp. 2006 Stock Incentive Plan.

Proposal 3.2. Ratification of Appointment

of the Independent Registered Public Accounting Firm

OceanFirst Financial Corp.’s independent registered public accounting firm for the fiscal year ended December 31, 20052006 was KPMG LLP. Acting on the recommendation of the Audit Committee, the Board of Directors reappointed KPMG LLP to continue as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2006,2007, subject to ratification of such appointment by the stockholders. If stockholders do not ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm, the Audit Committee may consider other independent registered public accounting firms.

Representatives of KPMG LLP will be present at the Annual Meeting. They will be given an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from stockholders present at the Annual Meeting.

The Board of Directors recommends that you vote “FOR” ratification of the appointment of KPMG LLP as the independent registered public accounting firm of the Company.

Audit Fees

The following table sets forth the fees billed to the Company for the fiscal years ended December 31, 20052006 and December 31, 20042005 by KPMG LLP:

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The Audit Committee believes that the provision of non-audit services by KPMG LLP is compatible with maintaining KPMG LLP’s independence.

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Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm

The Audit Committee is responsible for appointing, setting compensation, and overseeing the work of the independent registered public accounting firm. In accordance with its Charter, the Audit Committee approves, in advance, all audit and permissible non-audit services to be performed by the independent registered public accounting firm. Such approval process ensures that the independent registered public accounting firm does not provide any non-audit services to the Company that are prohibited by law or regulation.

During the year ended December 31, 2005,2006, 100% of the audit related fees, tax related fees and other fees set forth above were approved by the Audit Committee.

Report of the Audit Committee

The Company’s management is responsible for the Company’s internal controls and financial reporting process. The Director of Internal Audit reports directly to the Audit Committee. The Director of Internal Audit conducted a risk assessment of the organization and submitted and implemented an internal audit plan for 2005.2006.

The independent registered public accounting firm is responsible for performing an independent audit of the Company’s financial statements and issuing an opinion on the conformity of these financial statements with generally accepted accounting principles. The Audit Committee oversees the Company’s internal controls and financial reporting process on behalf of the Board of Directors.

The Audit Committee reviewed and discussed the annual financial statements with management and the Company’s independent registered public accounting firm. As part of this process, management represented to the Audit Committee that the financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee also received and reviewed written disclosures and a letter from the independent registered public accounting firm regarding their independence as required under applicable standards for the independent registered public accounting firms of public companies. The Audit Committee discussed with the independent registered public accounting firm the contents of such materials, their independence and additional matters required under Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T, including the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements.

In addition, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by the Independence Standards Board Standard No. 1 (Independence Discussions With Audit Committees), as adopted by the Public Company Accounting Oversight Board in Rule 3600T and has discussed with the independent registered public accounting firm, the independent registered public accounting firm’s independence from the Company and its management. In concluding that the registered public accounting firm

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was independent, the Audit Committee considered, among other factors,

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whether the non-audit services provided by the independent registered public accounting firm were compatible with the independent registered public accounting firm’s independence.

The Audit Committee discussed with the Company’s independent registered public accounting firm the overall scope and plans for their audit. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

In performing all of these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm who, in their report, express an opinion on the conformity of the Company’s financial statements to generally accepted accounting principles. The Audit Committee’s oversight does not provide it with an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or policies, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions with management and the independent registered public accounting firm do not assure that the Company’s financial statements are presented in accordance with generally accepted accounting principles, that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards or that the Company’s independent registered public accounting firm is in fact “independent.”

Based on such review and discussions, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20052006 for filing with the Securities and Exchange Commission. The Audit Committee also has approved, subject to stockholder ratification, the selection of the Company’s independent registered public accounting firm.

The Audit Committee

Joseph J. Burke, CPA, Chairman

Donald E. McLaughlin, CPA, Retired

Angelo Catania

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COMPENSATION DISCUSSION AND ANALYSIS

Overview

This section provides (i) a description of the structure and function of the Human Resources/Compensation Committee of the Board of Directors, (ii) a description of the objectives of the compensation program for the Named Executive Officers, (iii) a discussion of the design of the Named Executive Officer compensation program and (iv) a discussion of each material element of the Named Executive Officer compensation program and the rationale for choosing to make the payments listed in the tables following this section.

A significant compensation action taken during fiscal 2006 was the adoption and shareholder approval of the 2006 Stock Incentive Plan. The Company adopted this program following careful study of equity compensation at competing institutions. The Human Resources/Compensation Committee designed the plan to create an incentive for the long-term efforts of the executive officers and non-employee board members to increase returns to the stockholders.

Compensation Corporate Governance

Human Resources/Compensation Committee

The Human Resources/Compensation Committee is responsible for establishing compensation for the Named Executive Officers and for establishing certain guidelines and limits for compensation and benefits programs for other salaried officers and employees of the Company and the Bank. The Human Resources/Compensation Committee annually reviews and evaluates base salary and annual bonus recommendations made for Named Executive Officers by the Chief Executive Officer along with the rationale for such recommendations. The Human Resources/Compensation Committee also recommends to the Board for approval the compensation for the CEO and Named Executive Officers. The CEO does not participate in the Human Resources/Compensation Committee’s decision as to his compensation package. In establishing compensation levels, the Human Resources/Compensation Committee considers the Company’s overall objectives and performance, peer group comparisons and individual performance. The Human Resources/Compensation Committee is composed entirely of independent non-employee directors. The members of the Human Resources/Compensation Committee for fiscal 2006 were Diane F. Rhine (Chairperson), John E. WalshW. Chadwick and Carl Feltz, Jr.

Human Resources/Compensation Committee Charter

The Human Resources/Compensation Committee’s Charter reflects the Human Resources/Compensation Committee’s responsibilities described above. The Charter is periodically reviewed by the Human Resources/Compensation Committee and the Board of Directors. The Charter was most recently revised in 2006 to conform to changes in the SEC rules affecting disclosure of executive compensation and to clarify the Committee’s responsibilities regarding monitoring employment law compliance. A copy of current Charter is available on the Company’s website (www.oceanfirst.com).

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Compensation Consultant/Role of Management

The Human Resources/Compensation Committee has authority under its Charter to engage the services of independent third party experts to assist it in reviewing and determining executive officer compensation. Pursuant to this authority, in 2004 the Human Resources/Compensation Committee engaged Clark Consulting, a nationally recognized consulting firm specializing in compensation and employee benefits, to provide an independent review of the executive officer and director compensation. The objectives of the independent review were to (i) assess the competitiveness of the Company’s total compensation program for executive officers and non-employee directors; and (ii) review performance based cash and stock compensation practices among peer banks. The consultant compared base salary, benefits, annual incentive and long term compensation for each executive officer to a peer group of banking institutions having similar characteristics to the Company. The report indicated the Company’s total cash compensation benefits and long-term stock based incentives were competitive with market practice. The report was used as a reference point for setting the 2005 and 2006 executive compensation levels. In late December 2006, the Human Resources/Compensation Committee engaged Mercer Human Resource Consulting to perform a similar study to be used for setting 2007 and 2008 compensation.

Executive management and outside advisors are invited to Human Resources/Compensation Committee meetings to provide their views on compensation matters. Company management participates in the process of determining senior officer compensation by making recommendations to the Human Resources/Compensation Committee as requested by the Committee regarding base salary adjustments, incentive plan awards and equity plan awards. Mr. Garbarino does not participate in decisions relating to his compensation.

Human Resources/Compensation Committee Activities in 2006

The Human Resources/Compensation Committee met two times during the fiscal year ended December 31, 2006. Among other actions taken in 2006, the Human Resources/Compensation Committee approved the Company’s 2006 Stock Incentive Plan and approved awards of stock options to the Named Executive Officers and non-employee directors and awards of restricted stock to the CEO and the non-employee directors.

Objectives of the Compensation Programs

The Company has the following objectives for the executive officer compensation program:

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Compensation Program Design

Cash Compensation

Current cash compensation consists of base salary and a performance-based cash bonus under the annual Incentive Compensation Plan. The base salary levels for the Named Executive Officers are intended to be competitive with the practices of comparable financial institutions at appropriate levels to motivate individuals to discharge the responsibilities of their position. The Human Resources/Compensation Committee adjusts the Named Executive Officers base salary annually. In making these adjustments, the Human Resources/Compensation Committee takes into account individual and Company performance; the total current and potential compensation of a given officer; the levels of compensation paid by institutions that compete with OceanFirst for executive talent; and the relative level of compensation in comparison to other executive officers. Messrs. Garbarino, Fitzpatrick and Pardes have employment agreements with OceanFirst and receive base salaries under those agreements, subject to annual review and adjustments. The Human Resources/Compensation Committee makes salary decisions in an annual review with input from the Chief Executive Officer. The total amount of base salaries paid to the Named Executive Officers increased by 6.2% in 2006 over 2005, primarily reflecting a 17.7% increase to Executive Vice President Vito R. Nardelli due to his promotion to Chief Operating Officer.

Use of Compensation Survey

For 2005 and 2006 compensation, the Human Resources/Compensation Committee relied on the peer group survey prepared by Clark Consulting to assess the competitiveness of the Company’s executive pay practices in the marketplace. The peer group data is used in combination with other information relating to individual and Company performance to help the Human Resources/Compensation Committee make compensation decisions. Clark Consulting selected a peer group and benchmarked the Company’s 2006 cash compensation (base salary plus annual cash incentive compensation) against this group. The peer group consisted of 28 publicly traded banks of similar asset size and regional location.

Impact of Performance on Cash Compensation

Under the 2006 Incentive Compensation Plan, a significant portion of each executive officer’s annual cash compensation is contingent on the performance of the Company, the Bank

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and the individual. Under the Incentive Compensation Plan, a variable bonus pool is established annually based on the Company’s level of achievement of pre-established financial performance objectives. Bonuses to Named Executive Officers are awarded based on the total amount of the bonus pool and individual performance assessment scores and achievement of individual performance goals. Results of this program during 2006 are discussed below under “Cash Incentive Awards.”

In addition to the performance-based compensation paid under the Incentive Compensation Plan, the Company may from time to time make discretionary cash bonus payments to rectify inequities or recognize outstanding performance. No such discretionary bonus payments were made during fiscal 2006.

Adoption of Equity Compensation Plan

During fiscal 2006, the Company’s shareholders approved the 2006 Stock Incentive Plan (the “Stock Plan”). The Company’s Stock Plan was adopted to provide sufficient shares to cover new equity awards which will enable the Company to attract, retain and motivate non-employee directors and employees by providing for or increasing their economic interests in the success of the Company. It was necessary to adopt the plan and increase shares available for this purpose due, in part, to the limited remaining reserved shares under the existing equity compensation plans, the Amended and Restated 1997 Incentive Plan and the 2000 Stock Option Plan. The Stock Plan provides for awards of stock options and restricted stock. In structuring the Stock Plan, the Company took into account practices at other comparable banks. The Company submitted the structure of the plan to a recognized independent proxy advisory service which analyzed the plan and recommended that shareholders vote in favor of its adoption.

Elements of Compensation

Overview

The Named Executive Officer compensation program consists of the following elements: (1) base salary; (2) a performance-based annual cash bonus under the annual Incentive Compensation Plan; (3) retirement benefits under the Employee Stock Ownership Plan and 401(k) Plan and welfare benefits under the group benefit programs; (4) supplemental retirement benefits for the Named Executive Officers under the Supplemental Executive Retirement Plan; (5) Company-paid automobile benefit for selected Named Executive Officers; (6) awards of stock options and restricted shares of Company common stock under the equity compensation plans; (7) eligibility for payments and benefits in the event of certain employment terminations and/or in the event of a change in control of the Company; and (8) nonqualified deferred compensation under the Deferred Compensation Plan for Executives. The following describes the elements of compensation and provides information on the decisions regarding 2006 compensation.

Cash Incentive Awards

The Company determined cash incentive awards for 2006 in accordance with guidelines established by the Human Resources/Compensation Committee. The Named Executive Officer’s annual Incentive Compensation Bonus is contingent on the performance of the Company, the

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Bank and the individual. The Incentive Compensation Plan compares actual performance against targets that are approved by the Human Resources/Compensation Committee at the beginning of each year. The targets are weighted between individual objectives and the Company’s success in achieving its financial goals. Targeted bonus levels range from 25% to 50% of base salary. Based on performance and achievement of goals, actual bonus may range from 50% of targeted bonus levels for threshold performance to 150% for superior performance. Generally, the higher the level of responsibility of the officer or employee in the Company the greater the percentage of base salary that may be awarded under the plan for achievement of performance goals. The Incentive Compensation Plan metric for 2006 was based on overall Company performance as defined by Return on Equity (ROE). Actual performance resulted in not achieving threshold levels of ROE, therefore, no incentive cash bonuses were awarded to Named Executive Officers.

Equity Incentive Awards

The Board, at the recommendation of the Human Resources/Compensation Committee, approved the grant of awards to the Named Executive Officers under the Amended and Restated 1997 Incentive Plan and the 2000 Stock Option Plan at a scheduled meeting on February 15, 2006. The award levels and vesting schedule were determined based on various factors including performance and responsibilities of individual executives and the amount of awards previously granted. Awards of options under the plan were structured to avoid limitations on the Company’s compensation cost deduction due to the $1 million deduction limit under Section 162(m) of the Internal Revenue Code. Awards in 2006 to the Named Executive are presented under the “Option Award” and “Stock Award” columns of the Summary Compensation Table and the Grants of Plan-Based Awards Table.

Benefits

All Named Executive Officers participate in the benefit plans generally available to the employees, including medical insurance, the 401(k) Plan and the Employee Stock Ownership Plan. The Company also maintains a Supplemental Executive Retirement Plan covering all Named Executive Officers. This plan is intended to promote continued service of covered executives by providing a supplement to the executive’s other retirement benefits. The benefit is based on final cash compensation and length of service with the Company.

Perquisites

The Company provided perquisites to selected Named Executive Officers in the form of Company-paid automobile benefits and golf club dues.

Deferred Compensation

The Bank provides the Named Executive Officers with an opportunity to elect to defer current compensation under the Deferred Compensation Plan for Executives (“Deferral Plan”). The Deferral Plan permits eligible executives selected by the Bank’s Board to elect to defer receipt of up to 100% of base salary and annual bonus pursuant to the terms of the Deferral Plan.

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Executive CompensationEmployment Agreements

Summary Compensation Table. The following information is furnished for the Chief Executive Officer and four other executive officers of OceanFirst Financial Corp. and the Bank who received salary and bonus in excess of $100,000 during fiscal year 2005. These persons are sometimes referred to in this proxy statement as “Named Executive Officers.”

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Employment Agreements.The Bank and the Company havehas entered into employment agreements with Messrs. Garbarino, Fitzpatrick and Pardes (individually, the “Executive”). The Company has entered into employment agreements with Messrs. Garbarino and Fitzpatrick. These employment agreements are intended to ensure that the Bank and the Company will be able to maintain a stable and competent management base. The continued success of the Bank and the Company depends to a significant degree on the skills and competence of Messrs. Garbarino, Fitzpatrick and Pardes.

The employment agreements provide for a three-year term for the Executives. The Bank employment agreement provides that, upon each fiscal year-end, the Board of the Bank may extend the agreement for an additional year so that the remaining term shall be three years, unless written notice of non-renewal is given by the Board of the Bank after conducting a performance evaluation of the Executive. TheAs to Messrs. Garbarino and Fitzpatrick, the term of the Company employment agreement is extended on a daily basis unless written notice of non-renewal is given by the Board of the Company. In addition to the base salary, the agreements provide for, among other things, participation in stock benefit plans and other fringe benefits applicable to executive personnel.

The agreements provide for termination, at any time, by the Bank or the Company for cause as defined in the agreements. In the event the Bank or the Company chooses to terminate

22

the Executive’s employment for reasons other than for cause, or in the event of the Executive’s resignation from the Bank and the Company upon: (1) failure to re-elect the Executive to his current offices; (2) a material change in the Executive’s functions, duties or responsibilities; (3) a relocation of the Executive’s principal place of employment by more than 25 miles; (4) material reduction in the level of benefits and perquisites to the Executive; (5) a liquidation or dissolution of the Bank or the Company; or (5)(6) a breach of the agreement by the Bank or the Company, the Executive or, in the event of Executive’s subsequent death, his beneficiary, beneficiaries or estate, as the case may be, would be entitled to receive an amount equal to the remaining base salary payments due to the Executive and the contributions that would have been made on the Executive’s behalf to any employee benefit plans of the Bank or the Company during the remaining term of the agreement. The Bank and the Company would also continue and pay for the Executive’s life, health and disability coverage for the remaining term of the employment agreement.

Under the agreements, if voluntary or involuntary termination follows a change in control of the Bank or the Company (as defined in the employment agreement), the Executive or, in the event of the Executive’s death, his beneficiary, would be entitled to a severance payment equal to the greater of: (1) the payments due for the remaining term of the agreement; or (2) three times the average of the five preceding taxable years’ compensation. Such average compensation includes not only base salary, but also commissions, bonuses, contributions on behalf of the Executive to any pension or profit sharing plan, insurance payments, directorsdirectors’ or committee fees and fringe benefits paid or to be paid to the Executive during the preceding five taxable years. The Bank and the Company would also continue the Executive’s life, health, and disability coverage for thirty-six months. Notwithstanding thatWith respect to Messrs. Garbarino and Fitzpatrick, who have agreements with both the Company and the Bank, although both agreements provide for a severance payment in the event of a termination by the Company or the Bank, or in the event of a termination following a change in control, the Executive would only be entitled to receive a severance payment under one agreement.

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Payments to the Executive under the Bank’s agreement will be guaranteed by the Company in the event that payments or benefits are not paid by the Bank. PaymentAs to Messrs. Garbarino and Fitzpatrick, payment under the Company’s agreement would be made by the Company. All reasonable costs and legal fees paid or incurred by the Executive pursuant to any dispute or question of interpretation relating to the agreements shall be paid by the Bank or Company, respectively, if the Executive is successful on the merits pursuant to a legal judgment, arbitration or settlement. The employment agreements also provide that the Bank and Company shall indemnify the Executive to the fullest extent allowable under federal and Delaware law, respectively.

Columbia Home Loans, LLC, formerly known as Columbia Equities, Ltd., the Bank’s mortgage banking subsidiary (“Columbia”) has also entered into an Employment Agreement with Robert M. Pardes. The Agreement has a three-year term. On a yearly basis the Agreement may be extended for an additional year. Under the Agreement, Mr. Pardes agreed to serve as President rendering administrative and management services to Columbia. The termination and change in control provisions under the Agreement are similar to those in the Bank’s Employment Agreements with Messrs. Pardes, Garbarino and Fitzpatrick. Mr. Pardes devotes a substantial portion of his time to the performance of his duties as Executive Vice President, Chief Lending Officer of the Bank while also providing a consultative role as President of Columbia.

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Change in Control Agreements.

For similar reasons as with the employment agreements, the Bank and the Company entered into change in control agreements (“CIC Agreements”) with Messrs. Kelly and Nardelli, (the “Executive”). The CIC Agreement provides for a two-year term. Commencing on the date of the execution of the Company’s CIC Agreement, the term is extended for one day each day until such time as the Board of Directors of the Company or the Executive elects by written notice not to extend the term, at which time the CIC Agreement will end on the second anniversary of the date of notice. The Company’s CIC Agreement provides that in the event voluntary or involuntary termination follows a change in control of the Bank or the Company (as defined in the agreement), as to Mr. Kelly, the Executive would be entitled to a severance payment equal to two (2) times the Executive’s average annual compensation, as defined in the CIC Agreement, for the five years preceding termination. Annual compensation includes Base Salary, commissions, bonuses, contributions on behalf of the Executive to any pension and profit sharing plan, severance payments and fringe benefits paid or to be paid the Executive during such years. Additionally, in the event the Executive has been employed less than five years at the time of termination in connection with a change in control, the Executive’s annual compensation shall be annualized for any partial taxable year of employment or service as if the Executive was employed or served for the full taxable year. The Bank’s CIC Agreement is similar to that of the Company. The Bank CIC Agreement provides that, upon each fiscal year-end, the Board of the Bank may extend the CIC Agreement for an additional year so that the remaining term shall be two years, unless written notice of non-renewal is given by the Board of the Bank after conducting a performance evaluation of the Executive. However, any payments to the Executive under the Bank’s CIC Agreement, would be subtracted from any amount due simultaneously under the Company’s CIC Agreement. The Company and the Bank would also continue and pay for the Executive’s life, health and disability coverage for thirty-six (36) full calendar months following termination. Payments to the Executive under the Bank’s CIC Agreement are guaranteed by the Company in the event that payments or benefits are not paid by the Bank.

Payments under the employment agreements and change in control agreements in the event of a change in control may constitute some portion of an excess parachute payment under section 280G of the Code for executive officers, resulting in the imposition of an excise tax on the recipient and denial of the deduction for such excess amounts to the Company and the Bank.

2422

Stock Option Exercises and Holdings.EXECUTIVE COMPENSATION

Summary Compensation Table

The following table reflects all stock option exercisessets forth certain summary information regarding the compensation paid or accrued by the Named Executive OfficersCompany during 2005 and includes the number of shares covered by all remaining unexercised stock options as offiscal year ended December 31, 2005. Also reported are the values2006 to or for the “inaccount of the money” options that represent the difference between the exercise price of any such remaining unexercised optionsChief Executive Officer, Chief Financial Officer, and the year-end market priceother three (3) most highly compensated executive officers of the common stock.

Fiscal Year-End Options/SAR ValuesCompany:

23

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Option Grants in Last Fiscal Year.of Plan-Based Awards

The following table lists all grants ofsets forth certain information regarding stock options and restricted stock awards to the named executive officers of the Company during the Company’s fiscal year 2005 and contains certain information about potentialended December 31, 2006.

25

value of those options based upon certain assumptions as to the appreciation of the Company’s stock over the life of the option.

25

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth certain information regarding stock option and stock awards to the executive officers of the Company during the Company’s fiscal year ended December 31, 2006:

26

Option Exercises 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, 2006.

Nonqualified Deferred Compensation

Supplemental Executive Retirement Plan.Plan

The Bank maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) to provide executive officers with additional retirement benefits. The benefits provided under the SERP make up the difference between an amount up to 70% of final base compensation and the benefits provided from the Bank’s 401(k) Retirement Plan plus the benefits which would have been provided from the Bank’s Retirement Plan (Pension Plan) which was frozen in 1996 and terminated in 1998. In addition, the SERP provides a benefit equal to the benefits lost from the ESOP due to the application of limitations imposed by the Code, as amended, on compensation and maximum benefits under the ESOP.

The Bank established an irrevocable trust in connection with the SERP. This trust is funded with contributions from the Bank for the purpose of providing the benefits promised under the terms of the SERP. The assets of the trust are beneficially owned by the SERP participants, who recognize income as contributions are made to the trust. Earnings on the trust’s assets are taxable to the participants.

Nonqualified Deferred Compensation Plan for Executives

26Named Executive Officers may participate in the Deferred Compensation Plan for Executives (“Deferral Plan”). This plan allows eligible officers selected by the Bank’s Board to defer receipt of up to 100% of base salary and annual bonus pursuant to the terms of the plan. The participating executive’s deferral is credited to a bookkeeping account and increased on the last day each month by interest earned at the rate equal to the Stable Fund Rate for the 401(k) Plan plus 250 basis points.

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The following table sets forth certain information regarding nonqualified deferred compensation benefits to Named Executive Officers of the Company during the Company’s fiscal year ended December 31, 2006:

Potential Payments Upon Termination or Change in Control

The following describes the provisions of contracts, agreements or plans (other than plans available generally to salaried employees that do not discriminate in favor of executive officers) which provide for payments to executive officers at, following or in connection with termination of employment or a change in control of the Company.

Employment Agreements — Involuntary or Constructive Termination

The employment agreement of Messrs. Garbarino, Fitzpatrick and Pardes provide for certain severance payments in the event employment is terminated by the Company or the Bank without cause or the executive terminates employment under the circumstances described above under “Employment Agreements.” The severance payment provided under the employment agreements would be equal to (i) the amount of remaining payments the executive would receive if he had continued employment during the remaining term of the agreement at the executive’s base salary as of the date of termination and (ii) an amount equal to the annual contributions that would have been made on executive’s behalf to any employee benefit plans of the Company or the Bank during the remaining term of the agreement based on contributions made as of the date

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of termination. In addition, the executive would receive continued life, medical, dental and disability coverage for the remaining term of the agreement. Payments, other than continued welfare benefits, would be made on a monthly basis unless the executive elects to receive a lump sum. Payments and benefits would be provided by either the Company or the Bank.

Employment Agreements— Involuntary or Constructive Termination Following Change in Control

The employment agreements for Messrs. Garbarino, Fitzpatrick and Pardes provide for certain payments if the officer’s employment is terminated by the Company or the Bank following a “change in control” due to (i) the executive’s dismissal, other than for cause, or (ii) the executive’s voluntary resignation following any demotion, loss of title, office or significant authority or responsibility, reduction in compensation or benefits or relocation of principal place of employment by more than 25 miles, unless such termination is due to death or for cause, as defined in the agreement.

A “change in control” means a change in control of the Company or the Bank involving (a) an event reportable on Form 8-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934; (b) a Change in Control within the meaning of the Home Owners’ Loan Act of 1933; the Federal Deposit Insurance Act or Office of Thrift Supervision regulations; (c) a person becoming beneficial owner, directly or indirectly, of 20% the outstanding securities of the Company or the Bank; (d) a change in majority control of the Board of Directors of the Company, other than a change approved by the incumbent board; (e) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Company or the Bank in which either entity is not the survivor; (f) a distribution soliciting proxies for shareholder approval of a plan of reorganization, merger or consolidation of the Company or the Bank as a result of which the outstanding shares of the class of securities then subject to the plan would be exchanged for or converted into cash or property or securities not issued by either entity; or (g) a tender offer is made for 20% or more of the voting securities of the Company or the Bank.

If the change in control benefit is triggered, the officer is entitled to a benefit equal to the greater of (A) three times the executive’s average annual compensation paid in the preceding five taxable years or (B) the payments due for the remaining term of the agreement. In addition, the executive would become entitled to continued life, medical, dental and disability coverage for 36 months following the change in control. In the event payments and benefits under employment agreements, together with other payments and benefits he may receive, would constitute an excess parachute payment under Section 280G of the Internal Revenue Code, the employment agreements provide that the executive would be entitled to the greater of (i) the total net-after tax benefit or (ii) the net-after tax benefit after reduction of the aggregate parachute to an amount $1.00 less than the executive’s “base amount,” which is three times the executive’s average taxable compensation for the five tax years ending with the tax year prior to the change in control. Payments, other than continued welfare benefits, would be made on a monthly basis unless the executive elects to receive a lump sum. Benefits would be provided by the Company or the Bank.

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ReportChange in Control Agreements — Involuntary or Constructive Termination Following Change in Control

The change in control agreements with Messrs. Kelly and Nardelli provide for certain payments if the officer’s employment is terminated by the Company or the Bank following a “change in control” due to (i) the executive’s dismissal other than for cause or (ii) the executive’s voluntary resignation following any demotion, loss of title, office or significant authority or responsibility, reduction in compensation or benefits or relocation of principal place of employment by more than 25 miles, unless such termination is due to death or for cause, as defined in the agreement.

A “change in control” means a change in control of the Company or the Bank involving (a) an event reportable on Form 8-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934; (b) a Change in Control within the meaning of the Home Owners’ Loan Act of 1933, the Federal Deposit Insurance Act or Office of Thrift Supervision regulations; (c) a person becoming beneficial owner, directly or indirectly, of 20% the outstanding securities of the Company or the Bank; (d) a change in majority control of the Board of Directors of the Company, other than a change approved by the incumbent board; (e) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Company or the Bank in which either entity is not the survivor; (f) a distribution soliciting proxies for a shareholder approval plan of reorganization, merger or consolidation of the Company or the Bank as a result of which the outstanding shares of the class of securities then subject to the plan would be exchanged for or converted into cash or property or securities not issued by either entity; or (g) a tender offer is made for 20% or more of the voting securities of the Company or the Bank.

If the change in control benefit is triggered, the officer is entitled to a benefit equal to two times the executive’s average annual compensation paid in the most recent five taxable years. In addition, the executive would become entitled to continued life, medical, dental and disability coverage for 36 months following the change in control. In the event payments and benefits under the change in control agreements, together with other payments and benefits he may receive, would constitute an excess parachute payment under Section 280G of the Internal Revenue Code, the change in control agreements provide that payments under the agreements will be reduced to an amount $1.00 less than the executive’s “base amount,” which is three times the executive’s average taxable compensation for the five tax years ending with the tax year prior to the change in control. Payments, other than continued welfare benefits, would be made on a monthly basis unless the executive elects to receive a lump sum. Benefits would be provided by the Company or the Bank.

Equity Incentive Plan — Change in Control Grant

In the event of a change in control, the 2006 Stock Incentive Plan provides that each option award under the plan will become fully exercisable and remain exercisable for the duration of their term and all restricted stock awards will become fully vested. In addition, the plan provides that all stock awards available for grant under the plan will automatically be granted to employees and outside directors in proportion to the grants of awards previously made under the 2006 Stock Incentive Plan and the 2000 Stock Option Plan. In the event of a Change in Control, the 2000 Stock Option Plan provides that each option award under the Plan will become

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fully exercisable and remain exercisable for the duration of its term. In addition, the Plan provides that all options available for grant under the Plan will be automatically granted to current employees and outside directors in proportion to grants of options previously granted under the 2000 Stock Option Plan and the Amended and Restated 1997 Incentive Plan at a weighted average exercise price of all options granted under such Plans. Under both Plans, “Change in Control” has the same meaning as described above under“Employment Agreements – Involuntary or Constructive Termination Following a Change in Control.”

Supplemental Executive Retirement Plan —Involuntary or Constructive Termination

In the event of a “change in control” participants in the Supplemental Executive Retirement Plan are entitled to a lump sum contribution equal to the supplemental retirement income benefit contribution required for the year in which the change in control occurs plus the present value of the total supplemental retirement income benefit contributions which would have been required for the three years following the year in which the change in control occurs.

Summary of Potential Payments Upon Termination or Change in Control

The following tables summarize potential payments to each executive officer listed on the summary compensation table assuming a triggering termination of employment occurred on December 29, 2006, the last business day of the 2006 fiscal year. The tables do not reflect benefits under plans that do not discriminate in favor of executive officers and are available generally to all salaried employees.

John R. Garbarino

31

Michael J. Fitzpatrick

32

Vito R. Nardelli

33

Robert R. Pardes

34

John K. Kelly

35

DIRECTOR COMPENSATION

The following table sets forth certain information regarding compensation earned by or paid to the Directors during the Company’s fiscal year ended December 31, 2006:

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Cash and Stock Retainers and Meeting Fees for Non-Employee Directors.

The following tables set forth the applicable retainers and fees that will be paid to non-employee directors for their service on the Board of Directors of the Bank and the Board of Directors of the Company. Until a Director attains the stock ownership levels required under the Company’s stock ownership guidelines for directors, the Company and Bank retainers will be paid in the form of Company stock.

Deferred Compensation Plan for Directors.

The Bank maintains a deferred compensation plan for the benefit of outside directors. The plan is a non-qualified arrangement which offers participating directors the opportunity to defer compensation through a reduction in fees in lieu of a promise of future benefits. Such benefits are payable commencing at an age mutually agreed upon by the Bank and the participating director (the “Benefit Age”). The benefits equal the account balance of the director annuitized over a period of time mutually agreed upon by the Bank and the director, and then reannuitized at the beginning of each calendar year thereafter. Lump sum payouts are also available upon eligibility for distribution of benefits or in the event of the death of the director. The account balance equals deferrals and interest. Currently, the plan credits interest on deferrals at a rate equal to the sum of (i) the “Stable Fund” investment option in the Bank’s qualified 401(k) plan plus (ii) 250 basis points. Early distribution of benefits may occur under certain circumstances which include change in control, financial hardship, termination for cause, disability or termination of the plan by authorization of the Board of Directors.

HUMAN RESOURCES/COMPENSATION COMMITTEE REPORT

The Human Resources/Compensation Committee acts pursuant to the Human Resources/Compensation Committee Charter, a copy of which is available at the Company’s

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website (www.oceanfirst.com). The Human Resources/Compensation Committee reviews and reassesses the adequacy of the Human Resources/Compensation Committee Charter on Executive Compensation

an annual basis. The following is athe report of the Human Resources/Compensation Committee with respect to the Company’s Compensation Discussion and Analysis for the fiscal year ended December 31, 2006:

The Human Resources/Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management of the Company. Based on the review and discussions, the Human Resources/Compensation Committee recommended to the Board of Directors regarding executive compensation. For a descriptionthat the Compensation Discussion and Analysis be included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2006 and the Company’s proxy statement for the annual meeting of stockholders to be held on May 17, 2007.

The above report of the Human Resources/Compensation Committees’ membershipCommittee does not constitute “soliciting material” and duties see “Meetingsshould not be deemed to be “filed” with the Securities and Exchange Commission or incorporated by reference into any other filing of the BoardCompany under the Securities Act of Directors and Committees1933 or the Securities Exchange Act of the Board of Directors.”

Compensation Policies.The Human Resources/Compensation Committee is responsible for administering the compensation and benefit program for the Company’s and the Bank’s employees, including the executive officers. The Committee annually reviews and evaluates base salary and annual bonus recommendations made for executive officers by the Chief Executive Officer along with the rationale for such recommendations. The Committee also recommends1934, except to the Board for approval the compensation for the CEO and Named Executive Officers. The CEO does not participate in the Committee’s decision as to his compensation package. In establishing compensation levels, the Committee considers the Company’s overall objectives and performance, peer group comparisons and individual performance.

The Committee has adopted the following goals in establishing executive compensation: (1) attracting, retaining and rewarding highly qualified and productive executives; (2) relating compensation to both Company and individual performance; (3) establishing compensation levels that are internally equitable and externally competitive; and (4) providing motivation for the executive officers to enhance shareholder value by linking their compensation to the performance of the Company’s Common Stock.

The Company’s compensation program for executive officers consists of (1) a base salary; (2) a performance-based annual bonus; and (3) periodic grants of stock options. In addition, executive officers may participate in other benefit plans available to all employees, including the Employee Stock Ownership Plan and the 401(k) Plan. To the extent that benefits under these plans are limited by Internal Revenue Code restrictions, the Bank maintains a Supplemental Executive Retirement Plan for executive officers. See “Supplemental Executive Retirement Plan”.

In 2004 the Committee engaged Clark Consulting (“Clark”), a nationally recognized consulting firm specializing in compensation and employee benefits to provide their independent review of executive officers’ and directors’ compensation. The objectives of the independent review were to (1) assess the competitiveness of the Company’s total compensation program for executive officers and non-employee directors; and (2) review performance based cash and stock compensation practices among peer banks. The consultant compared base salary, benefits, annual incentive and long term compensation for each executive officer to a peer group of banking institutions having similar characteristics as the Company. The final report of Clark indicated that the Company’s total cash compensation benefits and long-term stock-based incentives were competitive with market practice.

Base Salaries. Salary levels are intended to be consistent and competitive with the practices of comparable financial institutions and to correlate with each Executive’s level of responsibility. The Human Resources/Compensation Committee’s base salary determinations are

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generally aimed at reflecting the overall performance of the Company the performancespecifically incorporates this report by reference in any of the individual executive officer, as well as their responsibilities and experience and the Committee’s view of the competitive marketplace conditions.

Annual Incentive. Under the 2005 Incentive Compensation Program (the “Award Program”), a significant portion of each executive officer’s annual cash compensation is contingent on the performance of the Company, the Bank and the individual. The Award Program compares actual performance against targets that are approved by the Human Resources/Compensation Committee at the beginning of each year. The targets are weighted between individual objectives (which may be subjective in nature) and the Company’s success in achieving its financial goals. During 2003 and 2004, no bonuses were paid to any executive officers as the Company failed to meet predetermined 2003 and 2004 Award Program performance goals for the Company. During 2005, two supplemental bonus grants, one consisting of stock and options and one consisting of cash and options, were paid to the Executive Officers based upon the attainment of performance goals. In February 2006, a cash bonus was paid to the Executive Officers for meeting pre-determined 2005 Award Program performance goals. This program is discussed further below under “Chief Executive Officer.”

Long Term Incentive Compensation.Executive officers were granted stock options in February 2002, May 2003, May 2004, January 2005 and April 2005, under the OceanFirst Financial Corp. 2000 Stock Option Plan as amended by shareholder approval on April 24, 2003, (the “2000 Stock Option Plan”). The Committee believes that stock ownership by executive officers is a significant incentive in building shareholder value and aligning the interests of executives with those of shareholders. The Committee takes into account the outstanding stock incentives when determining overall compensation.

Chief Executive Officer.The Chief Executive Officer was evaluated for the level of the Company’s and the Bank’s operational and administrative changes during 2005, taking into account both subjective performance criteria and certain objective performance measures. Based on Mr. Garbarino’s performance and that of the Company and the Bank, Mr. Garbarino’s base salary was increased to $476,000 for 2005. Performance measures normally evaluated by the Committee in determining the compensation of the CEO include the successful execution of capital management strategies, the achievement of targets of the Company’s Business Plan, and the continued operation of the Bank in a safe and sound manner.

Consistent with the Company’s policy of linking compensation and performance, Mr. Garbarino also participated in the annual Award Program. Awards made to Mr. Garbarino under the Award Program are normally based upon achievement of a targeted annual return on average equity and by the achievement of certain individual goals determined by the Committee at the beginning of the year. These goals are normally structured with a target level determined by the Committee, a threshold level which must be attained to fund any award and a superior level that is above the target level and tied to a maximum award opportunity. As noted, in 2003 and 2004, no bonuses were paid to executive officers because the Company failed to meet the predetermined 2003 and 2004 Award Program performance goals for return on average equity. In 2005, a supplemental bonus of 1,715 shares and 3,430 options with an exercise price of $23.70 and a supplemental bonus of $39,572 and 3,806 options with an exercise price of $20.795

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were granted to Mr. Garbarino for the attainment of certain performance targets. In February 2006, a cash bonus of $261,800 was awarded to Mr. Garbarino for meeting predetermined 2005 Award Program performance goals.

The goal of the above referenced compensation policies, as implemented by the Committee, is to be certain that all executives are compensated consistent with the above guidelines. Compensation levels will be reviewed as frequently as necessary to ensure this result.filings.

The Human Resources/Compensation Committee

Diane F. Rhine, Chairperson

John W. Chadwick

Carl Feltz, Jr.

Human Resources/Compensation Committee Interlocks and Insider Participation

None of the membersNo person serving as a member of the Human Resources/Compensation Committee, is currentlyDiane F. Rhine, John W. Chadwick, or has been at any time sinceCarl Feltz Jr., during the beginning of the lastpast fiscal year, anis or was a current or former officer or employee of OceanFirst Financial Corp. or OceanFirst Bank or engaged in certain transactions with OceanFirst Financial Corp. or OceanFirst Bank that are required to be disclosed by Securities and Exchange Commission regulations, other than the Company. Notransaction disclosed between Mr. Feltz’s architectural firm and Ocean First Bank. SeeTransactions With Management - Other Transactions. Additionally, there are no compensation committee “interlocks,” which generally means that no executive officer of OceanFirst Financial Corp. or OceanFirst Bank served as a director or member of the Compensation Committee orcompensation committee of another entity, one of whose executive officer of the Company or the Bankofficers serves as a Director or member of the Board of Directors or Human Resources/Compensation Committee of any entity that has one or more executive officers serving as a member of the Company’s or Bank’s Board of Directors or Human Resources/Compensation Committee.

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Stock Performance Graph

The following graph shows a comparison of total stockholder return on OceanFirst Financial Corp.’s common stock, based on the market price of the Company’s common stock with the cumulative total return of companies in the Nasdaq Market Index and the SNL Thrift Index for the period December 31, 2000 through December 31, 2005. The graph may not be indicative of possible future performance of the Company’s common stock.

Cumulative Total Monthly Return Among

OceanFirst Financial Corp. Common Stock,

All Nasdaq U.S. Stocks and SNL Thrift

Index

director candidates recommended by shareholders in accordance with the policy and procedures set forth above. The Corporate Governance/Nominating Committee has not received any recommended nominees from the Company’s security holders to be considered for election at this annual meeting. The Corporate Governance/Nominating Committee has not previously usednor currently uses an independent search firm in identifyingto identify or evaluate potential director nominees.

Evaluation.In evaluating potential clients, the Corporate Governance/Nominating Committee determines whether the candidate is eligible and qualified for service on the Board of Directors by evaluating the candidate under the selection criteria set forth above. In addition, the