COMMUNITY PARTNERS

TWO RIVER BANCORP

766 Shrewsbury Avenue

Tinton Falls, NJ 07724

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 8, 2013

To Community Partners21, 2014

Dear Two River Bancorp Shareholders:

The Annual Meeting of Shareholders of Community PartnersTwo River Bancorp (the “Company”) will be held at the Hilton Woodbridge, located at 120 Wood Avenue South, Iselin, New Jersey, on Wednesday, May 8, 2013,21, 2014, at 10:00 a.m., for the following purposes:

1.

To elect four (4)three (3) Class III directors;

2.

To consider an amendment to the Company’s certificate of incorporation to change the name of the Company to Two River Bancorp;

3.

To approve the compensation of the Company’s named executive officers on an advisory basis;

4. 3.

To vote on the frequency of future advisory votes on the Company’s executive compensation;

5.

To ratify the appointment of ParenteBeard LLCBDO USA, LLP as the Company’s independent registered public accounting firm for the 20132014 fiscal year; and

6. 4.

To act upon such other business as may properly come before the Annual Meeting.

Shareholders of record at the close of business on March 15, 201328, 2014 are entitled to notice of and to vote at the Annual Meeting. Whether or not you contemplate attending the Annual Meeting, we suggest that you promptly execute the enclosed proxy and return it to the Company.

Brokers holding shares beneficially owned by their clients do not have the ability to cast votes with respect to either the election of directors or the resolution amendingcompensation of the certificate of incorporationCompany’s named executive officers unless they have received instructions from the beneficial owner of the shares.If your shares are held by a broker, it is important that you provide instructions to your broker so your vote is counted in the election of directors and in connection with the resolution amendingvote on the certificatecompensation of incorporation.the Company’s named executive officers.

Important notice regarding the availability of proxy materials for the 20132014 Annual Meeting of Shareholders: The Proxy Statement for the 20132014 Annual Meeting of Shareholders and 20122013 Annual Report to Shareholders are available athttp://www.cfpproxy.com/5995.

5995.

	By order of the Board of Directors,
	William D. Moss
	President and Chief Executive Officer

April 1, 2013

YOUR VOTE IS IMPORTANT.  TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE VOTE YOUR PROXY, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.

11, 2014

YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE VOTE YOUR PROXY, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.

 

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Set forth below are the names of, and certain biographical information regarding, the directors of the Company.

William D. Moss is currently President and Chief Executive Officer and a director of the Company and the Bank. Mr. Moss previously served as President and Senior Loan Officer from August 1, 2006 to July 31, 2007, as Executive Vice President and Senior Loan Officer of Two River from July 1, 2003 to July 31, 2006, and as Senior Vice President and Senior Loan Officer of Two River from Two River’s opening in February 2000 until July 2003. Mr. Moss has 34 years of experience in the banking industry, starting his career in 1980 at Midlantic National Bank. He joined Central Jersey Bank & Trust Company as a Vice President and Senior Regional Loan Officer in 1989. In 1996, Mr. Moss joined Shrewsbury State Bank as Vice President, responsible for commercial lending and business development. Mr. Moss graduated from the Stonier Graduate School of Banking in 1987. Mr. Moss serves on the New Jersey State Banking Advisory Council, and serves as President of the Community Bankers Association of New Jersey. He also serves on several non-profit boards. Mr. Moss is a past President and member of the Board of Advisors of the American Cancer Society, and has served as a Councilman of the Borough of Shrewsbury and Chair of the Finance Committee. Mr. Moss, the Company’s President and Chief Executive Officer, brings extensive knowledge of the commercial banking industry, gained over 34 years of experience, to the governance and leadership of the organization.

James M. Bollermanis currently a director of the Company and the Bank. Mr. Bollerman is the founder of Bollerman Real Estate Services, a firm that develops real estate and provides real estate consulting services. Mr. Bollerman has been directly involved with the development, planning and construction of over 20 million square feet of space in New Jersey. Prior to starting his own companies, Mr. Bollerman was Chief Executive Officer of a subsidiary of New Jersey Resources Corporation, a New York Stock Exchange listed company. He is a former member of the Board of Directors of New Jersey Resources Corporation and served on its Finance Committee. Mr. Bollerman was also an assistant to a cabinet officer in the State of New Jersey. Mr. Bollerman is a graduate of Seton Hall University School of Law. Mr. Bollerman’s experience qualifying him for service as a Director includes a 31-year business career in a variety of senior corporate, governmental and entrepreneurial positions, including Director and Division President for a publicly traded company and the founder and CEO of a real estate investment and advisory firm. He is a member of the Audit Committee of the Municipal Excess Liability Joint Insurance Fund. He also serves in governance roles in the non-profit sector, including acting as a Trustee within the Meridian Health System.

Robert E. Gregory is currently a director of the Company and the Bank, and previously served as a director at The Town Bank. Mr. Gregory has been the President of NJ Galvanizing and Tinning Works, Inc. since 1982. In that capacity, Mr. Gregory is responsible for all budgeting and financial reporting. Mr. Gregory is an active member of numerous trade and non-profit organizations and is a past president of the Newark Ironbound Manufacturers Association. Mr. Gregory is a graduate of Marquette University where he obtained a bachelor’s degree. Mr. Gregory’s substantial experience as CEO of an industrial company with national clientele allows him to bring to the Board extensive managerial and financial ability. He is actively involved in Union County community activities and his advocacy on behalf of the bank facilitates new business opportunities.

Robert B. Grossman, MD is currently a director of the Company and the Bank. Dr. Grossman is an orthopedic surgeon and partner with Shore Orthopaedic Group. Dr. Grossman is a licensed medical doctor in New Jersey and Colorado. He became Board Certified in orthopedic surgery in 1978, and is currently affiliated with Monmouth Medical Center, Riverview Medical Center and Drexel University. Dr. Grossman is a Fellow of the American Academy of Orthopaedic Surgery, the American Academy of Surgery, the American Sports Medicine Society and a past multi-term councilor at the Arthroscopic Association of North America, and the State Orthopedic Society. Dr. Grossman is a past president of the New Jersey Orthopaedic Society. He is a past consultant to the U.S. Soccer Federation World Cup Junior Team and a consultant at the U.S. Olympic Facility in Colorado. He was one of the founders and a member of the Board of Directors of Tinton Falls State Bank. He is the past President and past Chairman of the Board of the Jewish Federation of Greater Monmouth County, and is also the Campaign Chairman for Jewish Charities of Monmouth County. Dr. Grossman’s experience qualifying him for service as a Director includes over 20 years of serving on bank boards, together with his extensive civic and community service.

William F. LaMorte is currently a director of the Company and the Bank. Mr. LaMorte has been the President of Ronstan Paper & Packaging Company, Inc. for the past 37 years. Ronstan Paper is a distributor of packaging materials, paper and janitorial products based in Eatontown, New Jersey. Mr. LaMorte is a past President of Monmouth Center for Vocational Rehabilitation and the MCVR Foundation, Inc. He is also a past President of ARC of Monmouth County. Mr. LaMorte received his B.S. degree in Business Administration from Western New England College. Mr. LaMorte’s experience qualifying him for service as a Director includes 37 years of business and management experience gained while running a paper and packaging distribution company. He has also been an active volunteer leader and advisor within the local non-profit community.

Joseph F. X. O’Sullivan currently serves as a director of the Company and the Bank. Since 2009, Mr. O’Sullivan has been a senior executive with Fleetwood Financial Leasing, LLC. Mr. O’Sullivan previously served as Chairman and Director of the Board of Directors of The Town Bank until it was acquired by the Company in 2006. From 1979 to 1985, Mr. O’Sullivan was a Principal Managing Director serving as Chief Credit Officer and Syndication Manager for Vendor Funding, an equipment finance company, until the business was acquired in 1986 by First NH Banks, an operating unit of Bank of Ireland. He continued to serve in those capacities as Executive Vice President until becoming Chief Financial Officer in 1990. In 1992, he became President of Credit America Corp., which specialized in equipment leasing and commercial finance in the petroleum industry. He served there until 1995, when he became Principal Managing Director of Fleetwood Financial Corp., an equipment leasing company. He served in that capacity until 2006, when Fleetwood Financial was acquired and transitioned into a bank-owned captive leasing operation. Mr. O’Sullivan served as Executive Vice President of Syndication and Risk Management of this operation until 2009, when the business was reacquired by Mr. O’Sullivan and senior management under Fleetwood Financial Leasing, LLC. Mr. O’Sullivan’s experience qualifying him for service as a Director includes his financial expertise from a diverse and extensive commercial finance and leasing background over a 39-year career to date. His knowledge of the Union and Middlesex County markets is important in the ongoing business development efforts of the Company. Mr. O’Sullivan has served as a bank Director since 1998.

John J. Perri, Jr., CPA, MBA is currently a director of the Company and the Bank. Mr. Perri is a Certified Public Accountant and a partner in the accounting firm of Raymond, Perri & DeSeno, LLC, located in Tinton Falls, New Jersey. He is currently a member of the American Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accountants. Mr. Perri brings to the Board over 37 years of public accounting experience, including extensive knowledge of accounting principles, financial reporting and tax issues, and the evaluation of financial results. Mr. Perri is qualified as a “financial expert” under the relevant criteria established under SEC regulations, and has acted as Chairman of the Audit Committee of Two River from its inception, as well as Chairman of the Audit Committee of the Company since 2007.

William Statter is currently a director of the Company and the Bank. Mr. Statter is the former owner of Rumson Pharmacy, located in Rumson, New Jersey. Mr. Statter is a former member of the Community Advisory Board of Tinton Falls State Bank. He is the former President of the Rumson Board of Health and a former member of the Rumson Juvenile Conference Committee. At this time, Mr. Statter is the Chairman of the Board of Trustees and Executive Director of Compassionate Sciences Alternative Treatment Center, the Director of Pharmacy at the Parker Family Health Center in Red Bank, and also serves on the Parker Family Health Center Board of Directors. Mr. Statter is a graduate of the University of Maryland School of Pharmacy. Mr. Statter’s 40 years of successful business ownership and management in the local community, primarily in the retail pharmacy environment, enable him to provide counsel to the board in considering new retail products and in evaluating a variety of credit requests. His personal investment experience and acumen make him a valuable member of several board committees.

Andrew A. Vitale, CPA, is currently a director of the Company and the Bank. Mr. Vitale is a Certified Public Accountant and the partner-in-charge of WithumSmith+Brown’s (WS+B) Red Bank office. Founded in 1974, WS+B is a full-service accounting and consulting firm with over 400 professionals across six states. Upon joining WS+B in 1985, he co-founded the firm’s Red Bank office and successfully established and expanded the firm's presence in the greater Monmouth County area. Mr. Vitale has over 30 years of professional accounting and business consulting experience serving a variety of companies and industries. His expertise is focused in providing services such as succession planning, acquisitions and divestitures and assisting clients with financial arrangements through banks, investment brokers and financial institutions. He is a member of the American Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accountants. Mr. Vitale is also very active in community affairs, serving as chairman and on the Finance Committee of the Brookdale Community College Foundation. He is on the Board of Directors of the American Conference on Diversity and is a former member of the Board of Trustees of CPC Behavioral Healthcare, where he also served as treasurer. His experience in accounting and audit over a 30-year career qualify him for service as a Director.

Robin Zager is currently Corporate Secretary and a director of the Company and the Bank. Ms. Zager was licensed as a real estate broker by the State of New Jersey in 1982 and has devoted her entire career to the commercial real estate field. She is currently a Principal of Commercial Property Advisors LLC, a real estate transaction, property and asset management, and consulting firm located in Fair Haven, New Jersey. Her volunteer experiences include past service as a Trustee of Congregation B’nai Israel in Rumson, New Jersey, where she served on the Long Range Planning and Endowment Committees, and currently serves on the Israel Scholarship Committee. Ms. Zager is a former Director of Eastern Monmouth Area Chamber of Commerce (EMACC). Active in the Red Bank Chapter of Hadassah, she served as VP of Fundraising for several years, and currently serves as Treasurer. Active in Industrial/Commercial Real Estate Women (ICREW), Ms. Zager served as Treasurer for three years and then as President for two years. Following this statewide office, she served as a National Delegate to NNCREW, the national organization for commercial real estate women. Ms. Zager is active in the Atlantic Highlands Yacht Club in Atlantic Highlands, New Jersey. Ms. Zager’s experience as a licensed real estate broker in New Jersey and extensive involvement in all elements of the commercial real estate market for over 30 years qualifies her for service as a Director. Her expertise, strategic advice and development of new business for the bank have been beneficial in the organization’s profitable growth.

Charles T. Parton,is currently the Vice Chairman of the Board both of the Company and of Two River.the Bank,will retire as Vice Chairman and a director effective as of the Annual Meeting. He served as Chairman of the Board of both the Company and Two River from their inception until May of 2011. He also served as interim President and Chief Executive Officer of the Company from February 1 through December 31, 2009. Mr. Parton served as the managing member of TRB LLC, the incorporating entity for Two River.  Mr. Parton, a certified financial planner, has been active in the commercial banking field for over 45 years, beginning his career in 1963 with Fidelity Union Trust Company in Newark, New Jersey. He held senior management positions within the Fidelity Union organization until 1981, then joining Midlantic National Bank/Merchants as its Executive Vice President. From 1983 until 1989, Mr. Parton was Chairman, President and CEO of Midlantic/Merchants and following internal consolidation, became Senior Vice President and Group Executive for Midlantic National Bank. After leaving Midlantic in 1991, Mr. Parton became Executive Director of the Jersey Shore Medical Center Foundation, serving from 1992 through 1997 and served as a member of the Board of Trustees of Jersey Shore Medical Center from 1983 through1992,through 1992, holding the position of Chairman from 1988 until 1992.  He is a Director of Kuehne Chemical Company, Inc., a privately held corporation in South Kearny, New Jersey and prior to 2007, he had served as a Director of three publicly traded SEC registrant companies. Mr. Parton has served as a trustee of Monmouth University since 1987, Board Chair from 1998 through 2001 and was elected Trustee Emeritus in 2010.  He received his AB degree in Economics from Dartmouth College and his MBA from Rutgers University.  Mr. Parton’s 45-plus years of experience in the commercial banking industry, including CEO and Director responsibilities makes him an extremely valuable member of the Board.  In addition, having served as a Director of three publicly-traded companies, he is the most experienced Board member in the area of corporate governance.

 

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STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS

The following table sets forth information concerning the beneficial ownership of the Company’s common stock as of March 1, 20132014 by each director/director nominee, byeach continuing director, each of the Company’s named executive officers, and by all director nominees, continuing directors and executive officers as a group, including any options exercisable by such parties within 60 days after March 1, 2013.2014. Unless otherwise specified, all persons listed below have sole voting and investment power with respect to their shares of Company common stock.

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Frank J. Patock, Jr.	150,940		(1)	1.88%
Charles T. Parton	141,960		(2)	1.77%
James M. Bollerman	17,014		(3)	0.21%
Robert E. Gregory	175,528		(4)	2.19%
Robert Grossman, M.D.	142,913		(5)	1.78%
William F. LaMorte	113,824		(6)	1.42%
Joseph F.X. O’Sullivan	94,498		(7)	1.18%
John J. Perri, Jr., CPA	114,806		(8)	1.43%
William Statter	113,256		(9)	1.41%
Andrew A. Vitale, CPA	10,955			0.14%
Robin Zager	117,564		(10)	1.46%
William D. Moss	154,480		(11)	1.92%
Alan B. Turner	74,186		(12)	0.92%
A. Richard Abrahamian	17,220		(13)	0.21%
Robert C. Werner	11,680		(14)	0.15%
All Directors & Executive Officers	1,450,824		(15)	17.49%

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percent of Class
Frank J. Patock, Jr.	146,807	(1)	1.85%
James M. Bollerman	19,144	(2)	0.24%
Robert E. Gregory	176,558	(3)	2.22%
Robert Grossman, M.D.	137,857	(4)	1.73%
William F. LaMorte	108,768	(5)	1.37%
Joseph F.X. O’Sullivan	94,742	(6)	1.19%
John J. Perri, Jr., CPA	109,750	(7)	1.38%
William Statter	109,646	(8)	1.38%
Andrew A. Vitale, CPA	15,310		0.19%
Robin Zager	112,400	(9)	1.41%
William D. Moss	147,089	(10)	1.85%
Alan B. Turner	68,902	(11)	0.86%
A. Richard Abrahamian	25,779	(12)	0.32%
All Directors & Executive Officers	1,272,752	(13)	15.66%

(1)Includes: 20,550 shares held solely by Mr. Patock’s spouse; 11,931 shares owned by Patock Construction Profit Sharing Trust, in which Mr. Patock is a principal; and options for 24,85819,802 shares granted under Stock Option Plans of the Company.

(2)Includes: 18,528 shares held solely by Mr. Parton’s spouse; 6,461 shares held by a retirement plan of which Mr. Parton is the primary beneficiary; 1,617 shares held in a trust for their daughter in which both Mr. & Mrs. Parton are co-trustees; and options for 24,858 shares granted under Stock Option Plans of the Company.

(3) Includes:  12,78413,884 shares held by a retirement plan of which Mr. Bollerman is the primary beneficiary and options for 1,0302,060 shares granted under Stock Option Plans of the Company.

(4) (3)Includes: options for 10,1888,987 shares granted under Stock Option Plans of the Company.

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(5) (4)Includes: 70,669 shares that are held jointly with Dr. Grossman’s spouse, 500 shares held by a retirement plan of which Dr. Grossman is the primary beneficiary, 709 shares owned solely by Dr. Grossman’s spouse, 945 shares held in trust for minors for which Dr. Grossman has voting control; and options for 24,85819,802 shares granted under Stock Option Plans of the Company.

(6) (5)Includes: 1,844 shares held solely by Mr. LaMorte’s spouse, 71,978 shares owned by Ridge Investments, of which Mr. LaMorte is a principal; and options for 24,85819,802 shares granted under Stock Option Plans of the Company.

(7) (6)Includes: 3,3603,364 shares held in the names of Mr. O’Sullivan’s children, for which Mr. O’Sullivan is deemed to have beneficial ownership; 11,847 shares held by a retirement plan of which Mr. O’Sullivan is the primary beneficiary; and options for 7,1948,224 shares granted under Stock Option Plans of the Company.

(8) (7)Includes: options for 24,85819,802 shares granted under Stock Option Plans of the Company.

(9) (8)Includes: 28,25328,339 shares that are held jointly with Mr. Statter’s spouse; 54,50055,007 shares held by a retirement plan of which Mr. Statter is the primary beneficiary; 1,2501,668 shares owned solely by Mr. Statter’s spouse; and options for 24,85819,802 shares granted under Stock Option Plans of the Company.

(10) (9)Includes: 6,208 shares held solely by Ms. Zager’s spouse; and options for 19,28814,232 shares granted under Stock Option Plans of the Company.

(11) (10)Includes: 5,601 shares held solely by Mr. Moss’s spouse; 8,766 shares held by a retirement plan of which Mr. Moss is the primary beneficiary; 1,110 shares held in trust for Mr. Moss’ children; 5,000 shares of restricted stock granted pursuant to the Two River Bancorp 2007 Equity Incentive Plan; and options for 36,38621,083 shares granted under Stock Option Plans of the Company.

(12) (11)Includes: 1,652 shares held by a retirement plan of which Mr. Turner is the primary beneficiary; 3,000 shares of restricted stock granted pursuant to the Two River Bancorp 2007 Equity Incentive Plan; and options for 46,63637,152 shares granted under Stock Option Plans of the Company.

(13) (12)Includes: 2,892 shares of restricted stock granted pursuant to the Two River Bancorp 2007 Equity Incentive Plan; and options for 9,37315,040 shares granted under Stock Option Plans of the Company.

(14) (13)Includes: 10,892 shares of restricted stock granted pursuant to the Two River Bancorp 2007 Equity Incentive Plan; and options for 680 granted under Stock Option Plans of the Company.

(15) Includes: options and awards for 279,923192,570 shares granted under Stock Options Plans of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC. Based on a review of the copies of reports furnished to the Company, the Company believes that during the year ended December 31, 2012,2013, all filing requirements applicable to its officers, directors and 10% beneficial owners were met.

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Principal Shareholders

The following table sets forth, as of March 1, 2013, 2014, the name and address of each person who owns of record or who is known by the Board of Directors to be the beneficial owner of more than five percent of our common stock, the number of shares beneficially owned by such person, and the percentage of the common stock owned.

		Common Stock Beneficially Owned
Name and Address of Beneficial Owner		Amount and Nature of Ownership				Percentage of Shares Outstanding
M3 Funds, LLC			436,957 (1)				5.5%
10 Exchange Place Suite 510 Salt Lake City, UT 84111		583,385 (1)		7.3%

(1) Based upon a Schedule 13G13G/A filing dated February 8, 201312, 2014 made with the Securities and Exchange Commission. According to the Schedule 13G,13G/A, all 583,385436,957 shares are owned directly by M3 Partners, L.P., a Delaware limited partnership, whose general partner is M3 Funds, LLC, a Delaware limited liability company, and whose investment adviser is M3F, Inc., a Utah corporation. Jason A. Stock and William C. WalkerWaller are the managers of M3 Funds, LLC and managing directors of M3F, Inc.

 

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DIRECTOR COMPENSATION

The following table details the compensation paid to our non-employee directors for the year ended December 31, 2012.

Name	Fees Earned or Paid in Cash ($)	Option Awards ($)	All Other Compensation ($)(1)	Total ($)
James M. Bollerman	24,200	None	173	24,373
Robert E. Gregory	19,070	None	159	19,229
Robert B. Grossman, M.D.	18,270	None	192	18,462
John E. Holobinko, Esq.	19,450	None	310	19,760
William F. LaMorte	27,450	None	158	27,608
Joseph F.X. O’Sullivan	28,270	None	188	28,458
Charles T. Parton	28,250	None	473	28,723
Frank J. Patock, Jr.	66,650(2)	None	319	66,969
John J. Perri, Jr., CPA	30,650	None	195	30,845
William Statter	29,450	None	360	29,810
Andrew A. Vitale, CPA	15,420	None	0	15,420
Robin Zager	26,600	None	165	26,765

2013.

Name	Fees Earned or Paid in Cash ($)	Option Awards ($)	All Other Compensation ($)(1)	Total ($)
James M. Bollerman	27,465	None	188	27,653
Robert E. Gregory	22,200	None	173	22,373
Robert B. Grossman, M.D.	24,800	None	212	25,012
William F. LaMorte	34,700	None	175	34,875
Joseph F.X. O’Sullivan	33,865	None	205	34,070
Charles T. Parton	32,565	None	560	33,125
Frank J. Patock, Jr.	71,065(2)	None	360	71,425
John J. Perri, Jr., CPA	37,865	None	225	38,090
William Statter	35,565	None	407	35,972
Andrew A. Vitale, CPA	24,865	None	37	24,902
Robin Zager	32,700	None	178	32,878

(1)

Reflects amounts of imputed income under the life insurance program, which we describe under the caption “Director Life Insurance Program.”

(2)	(2) Includes $40,000 which Mr. Patock received for serving as Chairman of the Board during 2012. 2013.

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Fees Earned or Paid in Cash

For 2012,

Effective May 8, 2013, the fee for attending holding company and bank board meetings wasincreased to $1,500 per meeting attended from $1,250 per meeting attended,meeting. Effective January 25, 2013, the fee for attending committee meetings wasincreased to $500 per meeting from $400 per meeting and the chairperson fee for each of the Asset/Liability, Audit and Compensation committees wasincreased to $900 per meeting from $800 per meeting. In addition, Mr. Patock received an annual stipend of $40,000 for serving as Chairman of the Board of the Company and Two River.  For 2013, the fee for attending holding company and bank board meetings increased to $1,500 per meeting attended effective May 8, 2013, and the fee for attending committee meetings increased to $500 per meeting effective January 25, 2013.

Bank.

 

Director Life Insurance Program

We

The Company purchased single premium life insurance for certain of our directors in 2004, 2010, 2011 and 2011.2013. Under boththese director insurance programs, a covered individual is provided with insurance coverage in the amount of $100,000. Coverage will remain in effect even if the individual’s service as a member of the Board of Directors ceases.ceases, if certain vesting requirements are met. The director will forfeit any right to a benefit under the program if the Company terminates the director for cause. We paid the premiums for the director life insurance program in the year the policies were purchased. We have all ownership rights to the policies and all cash values under these policies. The premiumsimputed income for life insurance paid for the benefit of the individual directors areis represented in the “All Other Compensation” column of the 20122013 Director Compensation table.  Mr. Bollerman began participation in the director life insurance program in 2012.

 

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EXECUTIVE COMPENSATION

This section of the proxy statement explains our compensation program for our principal executive officers and our other two most highly-compensated executive officers for 2012,2013, which we refer to collectively in this proxy statement as our “named executive officers”.officers.” The Company has elected to use the “smaller reporting company” rules issued by the SEC regarding the disclosure of executive compensation.

SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation paid or earned by each of the Company’s named executive officers for the fiscal years ended December 31, 20122013 and 2011.

Name and Principal Position	Year	Salary ($)	Bonus ($)	Option Awards ($)(1)	Nonqualified Deferred Compensation Earnings ($)(2)	All Other Compensation ($)(3)	Total ($)
William D. Moss President and Chief Executive Officer	2012 2011	252,000 240,000	40,000 30,000	- -	53,467 15,148	27,182 25,990	372,649 311,138
A. Richard Abrahamian Executive Vice President and Chief Financial Officer	2012 2011	174,000 167,000	26,000 20,000	5,797 5,367	39,047 -	15,241 14,857	260,085 207,224
Alan B. Turner Executive Vice President and Senior Loan Officer	2012 2011	180,500 176,500	27,000 20,000	5,610 5,673	14,564 19,784	18,861 17,321	246,535 239,278
Robert C. Werner Executive Vice President and Chief Operating Officer of Two River	2012 2011	168,000 161,000	33,000 20,000	6,358 5,060	46,652 -	12,197 10,208	266,207 196,268

2012.

Name and Principal Position	Year	Salary ($)	Bonus ($)	Option Awards ($)(1)	Stock Awards ($)(2)	Nonqualified Deferred Compensation Earnings ($)(3)	All Other Compensation ($)(4)	Total ($)
William D. Moss	2013	277,200	40,000	-	-	110,706	27,683	455,589
President and Chief Executive Officer	2012	252,000	40,000	-	-	53,467	27,182	372,649
A. Richard Abrahamian	2013	178,350	30,000	-	21,719	39,047	15,616	284,732
Executive Vice President and Chief Financial Officer	2012	174,000	26,000	5,797	-	39,047	15,241	260,085
Alan B. Turner	2013	185,000	29,000	-	22,530	14,564	18,283	269,377
Executive Vice President and Senior Loan Officer	2012	180,500	27,000	5,610	-	14,564	18,861	246,535

(1) Amounts calculated using the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). Amounts represent the aggregate grant date fair value of option awards made during the fiscal years ending December 31, 20122013 and 2011.2012. We disclose the assumptions that we used in determining these amounts in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.2013. Stock option awards granted vest in equal increments over a five-year period.

(2) When we refer to “stock awards,” we are referring to the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Mr. Abrahamian and Mr. Turner were awarded 2,892 and 3,000, respectively, shares of Two River Bancorp common stock during 2013 having a value of $21,719 and $22,530, respectively, and this amount is included under the column “Stock Awards” for 2013. These stock awards will vest in equal increments over a five year period.

(3) The amounts in this column represent the change in the actuarial present value of the named executive officer’s accumulated benefit under his Supplemental Executive Retirement Agreement with the Company (as computed on the pension plan measurement dates used for financial statement reporting purposes for the Company’s audited financial statements in fiscal 20112013 and 2012).The Company does not offer any non-qualified defined contribution plans and no named executive officer received preferential or above-market earnings on deferred compensation.

compensation.

 

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(3)

 (4) The amounts in this column for 20122013 and 20112012 include the following:

· ●

For Mr. Moss, in 2013 $4,527 for use of an automobile, $857 of imputed income for split dollar life insurance for Mr. Moss’s benefit, $12,099 for the cost of a club membership approved by the Compensation Committee and a contribution of $10,200 to the Company’s 401(k) Plan on behalf of Mr. Moss to match a pre-tax elective deferral contribution made by Mr. Moss. In 2012 $4,529 for use of an automobile, $651 of imputed income for split dollar life insurance for Mr. Moss’s benefit, $12,002 for the cost of a club membership approved by the Compensation Committee and a contribution of $10,000 to the Company’s 401(k) Plan on behalf of Mr. Moss to match a pre-tax elective deferral contribution made by Mr. Moss. In 2011, $3,522

●

For Mr. Abrahamian, in 2013 $7,765 for use of an automobile, $690$484 of imputed income for split dollar life insurance for Mr. Moss’sAbrahamian’s benefit, $12,202 for the cost of the club membership approved by the Compensation Committee and a contribution of $9,576$7,367 to the Company’s 401(k) Plan on behalf of Mr. MossAbrahamian to match a pre-tax elective deferral contribution made by Mr. Moss.Abrahamian. In 2012, $7,663 for use of an automobile, $389 of imputed income for split dollar life insurance for Mr. Abrahamian’s benefit, and a contribution of $7,189 to the Company’s 401(k) Plan on behalf of Mr. Abrahamian to match a pre-tax elective deferral contribution made by Mr. Abrahamian.

· ●

For Mr. Turner, in 2013 $10,539 for use of an automobile, $352 of imputed income for split dollar life insurance for Mr. Turner’s benefit, and a contribution of $7,392 to the Company’s 401(k) Plan on behalf of Mr. Turner to match a pre-tax elective deferral contribution made by Mr. Turner. In 2012, $11,368 for use of an automobile, $279 of imputed income for split dollar life insurance for Mr. Turner’s benefit, and a contribution of $7,214 to the Company’s 401(k) Plan on behalf of Mr. Turner to match a pre-tax elective deferral contribution made by Mr. Turner.  In 2011, $9,983 for use of an automobile, $329 of imputed income for split dollar life insurance for Mr. Turner’s benefit, and a contribution of $7,009 to the Company’s 401(k) Plan on behalf of Mr. Turner to match a pre-tax elective deferral contribution made by Mr. Turner.

 

·

For Mr. Abrahamian, in 2012 $7,663 for use of an automobile, $389 of imputed income for split dollar life insurance for Mr. Abrahamian’s benefit, and a contribution of $7,189 to the Company’s 401(k) Plan on behalf of Mr. Abrahamian to match a pre-tax elective deferral contribution made by Mr. Abrahamian.  In 2011, $7,591 for use of an automobile, $357 of imputed income for split dollar life insurance for Mr. Abrahamian’s benefit, and a contribution of $6,909 to the Company’s 401(k) Plan on behalf of Mr. Abrahamian to match a pre-tax elective deferral contribution made by Mr. Abrahamian.

·

For Mr. Werner, in 2012 $4,800 for use of an automobile, $496 of imputed income for split dollar life insurance for Mr. Werner’s benefit, and a contribution of $6,901 to the Company’s 401(k) Plan on behalf of Mr. Werner to match a pre-tax elective deferral contribution made by Mr. Werner.  In 2011, $4,800 for use of an automobile, $306 of imputed income for group term life insurance for Mr. Werner’s benefit, and a contribution of $5,102 to the Company’s 401(k) Plan on behalf of Mr. Werner to match a pre-tax elective deferral contribution made by Mr. Werner.

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Executive Life Insurance

During 2004, the Company had entered into an endorsement split dollar life insurance arrangement with several executives. Under the terms of the individual life insurance agreements, the covered employees obtain current life insurance protection while employed, and cash value accumulates under the underlying policies. In the event that a covered employee terminates employment with the Company, then all rights of the employee under the agreement and the policies cease, unless the employee had both attained age 60 and completed 10 years of service with the Company (including years of service prior to implementation of the agreements) at the time of termination of employment, in which case coverage will remain in effect until death. In addition, in the event of a change of control (as defined in the agreements) prior to termination of employment or termination from employment due to a disability, coverage will remain in effect until death. The employee’s rights would cease in the event of termination of employment for cause (as defined in the agreements). The Company paid the insurance premiums for these split dollar life insurance arrangements in November 2004.

The Company owns the policies and all cash values under these policies. Upon the death of the covered employee, if the agreement is still in effect, the death proceeds will be used by the Company to pay to the insured’s beneficiary an amount that ranges from 1.0 to 1.5 times the covered employee’s base annual salary (not including bonus or other forms of compensation) in effect at the time of his or her death or retirement. The Company is entitled to all other amounts payable under the policies. During 2012,2013, Messrs. Moss and Turner were parties to these agreements. At December 31, 2012,2013, the death benefit payable under Mr. Moss’s policy was $252,000,$277,200, and the death benefit payable under Mr. Turner’s policy was $180,500.

$185,000.

During 2010, the Company had entered into a new endorsement split dollar life insurance arrangement with several executives that replaced or supplemented certain split dollar life insurance arrangements established in 2004. Under the terms of the individual life insurance agreements, the covered employees obtain current life insurance protection while employed, and cash value accumulates under the underlying policies. In the event that a covered employee terminates employment with the Company, then all rights of the employee under the agreement and the policies cease, unless the employee had attained age 65 or had been a participant in the plan at least five years, in which case a portion of the benefit will remain in effect until death. (If the executive is a participant for zero through four years, the employee’s right to the benefit ceases, for five to nine years, the amount ranges from 50% to 90% of the benefit, and upon completion of ten years, the coverage is 100% of the agreed upon amount.)amount). In addition, in the event of a change of control (as defined in the agreements) prior to termination of employment or termination from employment due to a disability, the agreement will remain in effect until death. The employee’s rights would cease in the event of termination of employment for cause (as defined in the agreements). The Company paid the insurance premiums for these split dollar life insurance arrangements in December 2009 and the arrangement was effective January 2010. Mr. Abrahamian was added to the arrangement in December 2010, and Mr. Werner was added in January 2012.2010. The Company owns the policies and all cash values thereunder. Upon the death of the covered employee, if the agreement is still in effect, the death proceeds will be used by the Company to pay to the insured’s beneficiary an amount that ranges from 0.5 times to 1.0 times the covered employee’s base annual salary (not including bonus or other forms of compensation) in effect at the time of his or her death or retirement. The Company is entitled to all other amounts payable under the policies. During 2012,As of December 31, 2013, Messrs. Moss, Turner, Abrahamian and WernerAbrahamian were parties to these agreements. At December 31, 2012,2013, the death benefit payable under Mr. Moss’s policy was $126,000,$138,600, the death benefit payable under Mr. Turner’s policy was $90,250,$92,500, and the death benefit payable under Mr. Abrahamian’s policy was $261,000 and the death benefit payable under Mr. Werner’s policy was $252,000.

$267,525.

 

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Also during 2010, the Company had entered into a new endorsement split dollar life insurance arrangement with several executives under a Groupunder aGroup Term Replacement Plan, which replaces all except $50,000 of the coverage from the group term insurance already provided by the Company. In the event that a covered employee terminates employment with the Company, then the rights of the employee under the agreement and the policies cease.  cease. The Company paid the insurance premiums for these split dollar life insurance arrangements in November 2010 and the arrangements were effective in December 2010.  In January 2012, Mr. Werner was added to this plan. The Company owns the policies and all cash values thereunder. Upon the death of the covered employee, if the agreement is still in effect, the death proceeds will be used by the Company to pay to the insured’s beneficiary an amount of 1.0 times the covered employee’s base annual salary (not including bonus or other forms of compensation) in effect at the time of his or her death less $50,000 to be provided by the group term insurance. The Company is entitled to all other amounts payable under the policies. During 2012,At December 31, 2013, Messrs. Moss, Turner, and Abrahamian and Werner were active parties to these agreements. At December 31, 2012, theThe death benefit payable under Mr. Moss’s policy was $202,000,$227,200, the death benefit payable under Mr. Turner’s policy was $130,500,$135,000, and the death benefit payable under Mr. Abrahamian’s policy was $124,000, and the death benefit payable under Mr. Werner’s policy was $118,000.$128,350.

Requirements of Troubled Asset Relief Program Participation

We participated in the Troubled Asset Relief Program Capital Purchase Program (referred to in this section as the “TARP”) established under the Emergency Economic Stabilization Act of 2008, as amended (together with all associated regulations, interpretations, and guidance, “EESA”) pursuant to which, on January 30, 2009, the U.S. Department of the Treasury (“Treasury”) invested approximately $9 million in our preferred stock.  We repurchased all of these shares of preferred stock on August 11, 2011 at which point we were no longer subject to any executive compensation requirements promulgated as part of TARP.

During the period that the TARP preferred stock was outstanding, participation in the TARP Program required that we implement certain restrictions and limitations on executive compensation, in particular severance pay, required a review of our incentive compensation programs to ensure that they did not encourage our senior executive officers to take unnecessary and excessive risks, and limited our ability to receive tax deductions related to senior executive pay.  Among the key items established by EESA, each of which was in effect for us while our TARP obligations remained outstanding:

·

Exclude Incentives to Take Unnecessary and Excessive Risk: EESA requires a TARP participant’s compensation committee to limit features in compensation plans that encourage senior executive officers (“SEOs”) to take risks that are unnecessary or excessive or that threaten the value of the TARP participant.

·

Limits on the Payment, or Accrual, of any Bonus, Retention Award or Incentive Compensation:  EESA prohibits the payment or accrual of any bonus, retention award or incentive compensation to the most highly compensated employee of the Company except in the form of long-term restricted stock that does not become fully transferable until we repay all TARP assistance (for each 25% of total assistance repaid, 25% of the award may become transferable), has a minimum vesting period of at least two years, and does not exceed one-third of the employee’s total annual compensation in the year of grant.

·

Prohibition on Golden Parachute Payments:  EESA prohibits golden parachute payments to SEOs and the next five most highly compensated employees, which include substantially all payments made upon (i) such employee’s departure from the TARP participant for any reason other than death or disability or (ii) the effective date of a change in control of the TARP participant.

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·

Clawback:  EESA requires that any bonus payment made to the SEOs or the next 20 most highly compensated employees (collectively, “Covered Employees”) must be subject to a clawback provision that provides for the clawback or recovery of the bonus payment if it was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria.

·

Prohibition on Tax Gross-Ups:  EESA generally prohibits TARP participants from providing tax gross-ups to Covered Employees.

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2012

2013 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table represents stock options outstanding for each named executive officer as of December 31, 2012.2013. All stock options have been adjusted for stock dividends and stock splits.

Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)
William D. Moss	21,302 12,172 -	(1) (2)	-     - 17,823	(3)	11.17   14.17     3.37		6/11/2013 8/30/2014 1/20/2019	12,399 (5)	69,310
Alan B. Turner	15,215 9,129 16,710 762 -	(1) (2) (3) (7)	- - 11,139 3,049 3,000	(3) (7) (8)	11.17 14.17 3.37 5.19 5.49		6/11/2013 8/30/2014 1/20/2019 12/12/2021 12/11/2022	5,511 (5)	30,806
A. Richard Abrahamian	8,652 721 -	(4) (7)	12,978 2,884 3,100	(4) (7) (8)	3.83 5.19 5.49		4/20/2020 12/12/2021 12/11/2022	-	-
Robert C. Werner	- 680 -	(6) (7)	14,060 2,719 3,400	(6) (7) (8)	4.39 5.19 5.49		9/8/2020 12/12/2021 12/11/2022	-	-

Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)
William D. Moss	12,172	(1)	-		14.17		8/30/2014	-	-
	-		8,911	(2)	3.37		1/20/2019
Alan B. Turner	9,129	(1)	-		14.17		8/30/2014	3,000 (6)	21,630
	20,830	(2)	5,569	(2)	3.37		1/20/2019
	1,524	(4)	2,287	(4)	5.19		12/12/2021
	600	(5)	2,400	(5)	5.49		12/11/2022
A. Richard Abrahamian	12,978	(3)	8,652	(3)	3.83		4/20/2020	2,892 (6)	20,851
	1,442	(4)	2,163	(4)	5.19		12/12/2021
	620	(5)	2,480	(5)	5.49		12/11/2022

(1)

These options were granted on June 11, 2003.  We granted these options under the Two River Community Bank 2003 Incentive Stock Option Plan.

(2)

These options were granted on August 30, 2004. We granted these options under the Two River Community Bank 2003 Incentive Stock Option Plan.

(3) (2)

These options were granted on January 20, 2009, and vest in equal increments over a five-year period beginning January 20, 2010.2009. We granted these options under the Community PartnersTwo River Bancorp 2007 Equity Incentive Plan described below.

(4) (3)

These options were granted on April 20, 2010, and vest over a five year period beginning April 21, 2011. We granted these options under the Community PartnersTwo River Bancorp 2007 Equity Incentive Plan described below.

(5) (4)

These stock awards were granted on both August 18, 2010 and October 20, 2010 and vest in 2013.  Of Mr. Moss’s 16,532 awards, 8,266 are subject to earnings conditions.  During 2012, 4,133 of these awards were forfeited as earnings conditions were not met.  We granted these awards under the Community Partners Bancorp 2007 Equity Incentive Plan described below.

(6)

These options were granted on September 9, 2010, and vest over a five year period beginning with 33.3% of the award vesting on each of September 10, 2013, September 10, 2014 and September 10, 2015.  We granted these options under the Community Partners Bancorp 2007 Equity Incentive Plan described below.

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(7)

These options were granted on December 12, 2011, and vest over a five year period beginning December 12, 2012. We granted these options under the Community PartnersTwo River Bancorp 2007 Equity Incentive Plan described below.

(8) (5)

These options were granted on December 11, 2012, and vest over a five year period beginning December 11, 2013. We granted these options under the Community PartnersTwo River Bancorp 2007 Equity Incentive Plan described below.

(6)

These stock awards were granted on December 17, 2013 and vest ratably in annual 20% increments over the five-year period ending on December 17, 2018. We granted these awards under the Two River Bancorp 2007 Equity Incentive Plan, which we describe below.

EXECUTIVE INCENTIVE, EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS

We maintain

The Company maintains the Community PartnersTwo River Bancorp 2007 Equity Incentive Plan, which we referthe Company refers to as the “2007 Plan.” The following is a brief description of the 2007 Plan:

Types of Awards.The Plan provides that the Company may grant participants stock options, restricted stock, or such other awards as the Committee may determine. Options awarded under the Plan may be either options that qualify as incentive stock options (“ISOs”) under Internal Revenue Code, or options that do not, or cease to, qualify as incentive stock options under the Code.

 

Eligibility.Awards may be granted under the 2007 Plan to current and prospective employees, consultants, and non-employee directors.

Shares Available. As of December 31, 2012,2013, there were 245,504250,275 shares available for issuance under the 2007 Plan. This number of shares available for issuance has been adjusted for previously issued stock dividends.

Per-Person Award Limitations. Participants are limited in any year to awards under the 2007 Plan relating to no more than 25,000 shares per type of award (that is, options, restricted stock, and other awards), plus the amount of the participant’s unused annual limit relating to the same type of award as of the close of the previous year, subject to adjustment.

Terms of Stock Options.The exercise price per share purchasable under either an ISO or a NQSO may not be less than the fair market value of a share of stock on the date of grant of the option. The Compensation Committee will determine the term of each option, but no ISO may have a term in excess of ten years from the date of grant. The Compensation Committee will determine the time or times at which or the circumstances under which an option may be exercised.

Terms of Restricted Stock. Restricted stock is stock which is subject to certain restrictions and to a risk of forfeiture. The Compensation Committee will determine the period over which any restricted stock which is issued under the 2007 Plan will vest, and will impose such restrictions on transferability, risk of forfeiture, and other restrictions as the Compensation Committee may in its discretion determine. Unless restricted by the Compensation Committee, a participant granted restricted stock will have all of the rights of a shareholder, including the right to vote the restricted stock and the right to receive dividends with respect to that stock.

Change in Control.In general, in the event of a Change in Control (as defined in the 2007 Plan) all outstanding unvested awards will become fully exercisable and vested as of the time of the Change in Control, and all restricted stock and awards subject to risk of forfeiture will become fully vested. The Compensation Committee may, at its discretion, determine to extend to any participant who holds options or other awards, the right to elect during the 60-day period immediately following a Change in Control, in lieu of acquiring shares, to receive in cash (based upon a formula as described in the 2007 Plan).

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Supplemental Executive Retirement Agreements

On January 1, 2005, the CompanyBank entered into supplemental executive retirement agreements with each of Messrs. Moss and Turner, effective November 1, 2004, to provide nonqualified pension benefits to the participants. The 2005 SERP Agreements were amended on October 30, 2008 to comply with the requirements of Code Section 409A and in certain other respects.  Effective March 10, 2010, the 2005 SERP Agreement for Mr. Turner was amended to increase the annual benefit payable to Mr. Turner, upon attaining age 65, from $50,000 to $71,000 and to increase the other benefits payable thereunder.  The 2005 SERP Agreements were amended in June 2010 to more closely align their defined terms with those contained in the June 1, 2010 Change in Control agreements, to remove the non-compete provision and in certain other respects.  Effective January 19, 2012, the 2005 SERP Agreement for Mr. Moss was amended to increase the annual benefit payable to Mr. Moss, upon attaining age 65, from $50,000 to $100,000 and to increase the other benefits payable thereunder.  On January 19, 2012, the Bank also entered into a supplemental executive retirement agreementsagreement with each of Messrs.Mr. Abrahamian and Werner, to provide nonqualified retirement benefits to the participants.

him.

Under the SERP Agreements, upon the executive attaining age 65, each is entitled to an annual benefit. Mr. Moss’s annual benefit is $100,000 and Messrs. Turner Abrahamian and Werner’sAbrahamian’s annual benefits are $71,000 each. The foregoing benefits commence within 30 days after a participant attains their specified age and are paid in monthly installments for 15 years.

 

In addition to the foregoing, the SERP Agreements also provide for the following benefits, which are payable upon the following events, commence at the following times, and are paid in the following forms:

§ ■

In the event that a participant separates from service prior to age 65 for reasons other than death, disability, an involuntary termination for cause, or a change in control, the participant is entitled to a pro-rata annual benefit based on his age at the time he separates from service ($20,396, $11,294, $3,934($33,272, $13,565, and $4,701$8,111 for Messrs. Moss, Turner, Abrahamian and WernerAbrahamian, respectively, as of December 31, 2012)2013), commencing within 30 days after he separates from service and paid in monthly installments for 15 years;

§ ■

In the event that a participant becomes disabled while in active service prior to age 65, the participant is entitled to a pro-rata annual benefit based on his age at the time he becomes disabled ($37,554, $31,183, $7,831($46,133, $35,102, and $8,552$15,206 for Messrs. Moss,, Turner, Abrahamian and Werner, Abrahamian,respectively, as of December 31, 2012)2013), commencing within 30 days after he attains age 65 and paid in monthly installments for 15 years;

§ ■

In the event that a participant dies while in active service prior to age 65, the participant is entitled to a pro-rata benefit based on his age at the time of his death ($664,807, $369,399, $448,839691,400, $384,175, and $476,037$466,793 for Messrs. Moss, Turner, Abrahamian and Werner, Abrahamian,respectively, as of December 31, 2012)2013), paid in a lump sum within 90 days after the date of death; and

§ ■

In the event that a change in control occurs while a participant is a full-time employee, the participant is entitled to a pro-rata annual benefit based on his age at the time of the change in control ($69,120, $38,406, $45,22571,885, $39,943, and $47,965$47,034 for Messrs. Moss, Turner, Abrahamian and Werner,Abrahamian, as of December 31, 2012)2013), commencing within 30 days after he separates from service and paid in monthly installments for 15 years.

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Payments from the SERP Agreements may be delayed upon a participant’s termination of employment in accordance with Code Section 409A.

On August 21, 2013, the Bank amended the SERP Agreements to revise the definition of “Change in Control” so that it now means:

(i)

the sale or disposition by the Company of all of its stock in the Bank, or the sale or disposition by the Bank of substantially all of its assets;

(ii)

the acquisition of voting common capital stock of the Company in a single transaction or a series of interdependent transactions as a result of which the acquirers actually own or control common capital stock representing the right to cast at least a majority of the votes which could, without giving effect to any change in the capital structure of the Company which occurs subsequent to the consummation of such transaction or series of transactions, be cast at the next regular meeting of shareholders; or

(iii)

a merger, consolidation or other reorganization of either, or both of, the Company or the Bank as a result of which as least a majority of the Board of Directors of the surviving entity are not Continuing Directors. “Continuing Directors” shall be those individuals who are directors of the Company or the Bank, as the case may be, at such time as the plan of merger, consolidation or other reorganization is approved by the board of directors of the Company or the Bank.

In addition, Mr. Moss’s SERP Agreement was amended to increase the annual benefit that Mr. Moss will receive in the event that he separates from service prior to age 65 for reasons other than death, disability, an involuntary termination for cause, or a change in control, based on his age at the time he separates from service. Mr. Moss’ other benefits under the SERP (including upon Change in Control, death, disability or attainment of age 65) were unchanged. In addition, his SERP Agreement now provides that if benefits commence at a date between dates specified in the benefit schedule for the SERP Agreement, the benefits shall be pro-rated from the date specified in the benefit schedule. Due to numerous prior amendments, Mr. Moss’s SERP Agreement was amended and restated.

Employment Agreementwith William D. Moss

On May 28, 2010,August 21, 2013, the Company and Two Riverthe Bank entered into an employment agreement with Mr. Moss.Moss (the “Employment Agreement”), effective as of June 1, 2013, which replaced his prior employment agreement, which expired by its terms on May 31, 2013. The initial term of the Employment Agreement expires on the earlier oflater of: May 31, 20132016 or, upon theif a Change in Control of the Company (defined in the Employment Agreement to include among other things an acquisition of the Company or Two River by an unaffiliated party or the acquisition of 25% or morea majority of the voting securities of the Company).

occurs at any time prior to May 31, 2016, the second anniversary of the occurrence of such Change in Control.

Mr. Moss’Moss’s annual base salary under the agreementEmployment Agreement may be no less than $225,000,$277,000, which may be increased by the Compensation Committee in its discretion.Company’s board of directors. Mr. Moss is eligible to receive a discretionary annual bonus in an amount determined by the Company’s Board,board, which will be based on performance standards that are consistent with industry standards for similarly situated bank holding companies and community banks. Additionally, the agreement requires the Company towill lease or purchase an automobile for use by Mr. Moss, an automobile.

and will pay the membership fees and dues for Mr. Moss to be a member of a country club agreed to by the parties.

In the event that Mr. Moss’s employment is terminated involuntarily without Cause (defined below) or he terminates his employment voluntarily for Good Reason (defined below), he will be entitled to a lump-sum cash payment equal to twoone times the sum of (i) his base salary; and (ii) the average of the cash bonuses paid to him in the last two full calendar year.years. In such an event, Mr. Moss will also be entitled to have the title of the automobile purchased or leased for his use to be transferred to him, free of all liens and encumbrances, claims or leases, for the consideration of $1.00. Mr. Moss is entitled to continued coverage for a period of 12 months following his termination date under the medical and dental benefit plans and life and disability insurance plans in which he participates as of the date of his termination, at and under the same costs, terms and conditions applicable to employees with similar titles. If Mr. Moss’ continued participation under such plans would be prohibited, the Company will provide Mr. Moss with periodic payments, in amountamounts it determines are sufficient, in its reasonable discretion, to defray the cost to Mr. Moss of obtaining materially identical benefits. In addition to the foregoing, after a Change in Control, in the event that Mr. Moss’s employment is terminated involuntarily without Cause or he terminates employment voluntarily for Good Reason, he will be entitled to an additional lump-sum cash payment equal to one times the sum of (i) his base salary; and (ii) the average of the cash bonuses paid to him in the last two full calendar years.

If Mr. Moss is terminated for Cause or he resigns without Good Reason, he is only entitled for payment for benefits and salary accrued to the date of his termination.

The Employment Agreement defines “Cause” as: (i) conviction of a crime (other than a traffic violation), habitual drunkenness, drug abuse, or excessive absenteeism; (ii) willful and continued failure to perform his duties after at least one written warning from the Company’s board; or (iii) willful misconduct of any type, which causes material injury to either or each of the Company or the Bank. The Employment Agreement defines “Good Reason” as any material breach of the Employment Agreement or material failure of the Company to tender performance under the Employment Agreement; or any of the following actions taken without the express written consent of Mr. Moss: (i) the material diminution in his current functions; (ii) any transfer to an office outside New Jersey or another location greater than 50 miles from his current location; or (iii) a reduction in his annual base salary.

 

The employment agreementEmployment Agreement contains a covenant not to compete prohibiting Mr. Moss, in the event he is terminated for Cause or resigns without Good Reason or if he is terminated for Cause or resigns without Good Reason after a Change in Control and is paid the additional lump sum payment, from being employed or retained by, directly or indirectly, any bank or other regulated financial services institution with an office or operating branch in any county in New Jersey within which Two Riverthe Bank or any other existing subsidiary of the Company maintains an office or branch, which directly competes with, or reasonably could be expected to materially adversely affect the revenues generated by, Two Riverthe Bank or any other such subsidiary of the Company for a period of twelve months. For the twelve months following Mr. Moss’ termination for Cause or resignation without Good Reason,month period set forth above, he will be prohibited from soliciting the Company’s employees in a senior managerial, operation or lending capacity, or the Company’s highly skilled employees with access to and responsibility for any confidential information, to become employed or engaged by him or with any person, firm, company or association in which Mr. Moss has an interest.

The Employment Agreement contains provisions to the effect that if the Company determines in good faith that any payment or benefit received or to be received by Mr. Moss pursuant to the Employment Agreement (which does not include the portion of payments allocated to the non-compete provisions of the Employment Agreement, which are classified as payments of reasonable compensation for purposes of Section 280G of the Internal Revenue Code (the “Code”)), or otherwise (with all such payments and benefits, including, without limitation, salary and bonus payments, being defined as “Total Payments”) would be subject to the excise tax imposed by Section 4999 of the Code by reason of being considered to be “contingent on a change in ownership or control” of the Company within the meaning of Section 280G of the Code, then such Total Payments will be reduced in the manner reasonably determined by Company, in its sole discretion, to the extent necessary so that the Total Payments will be less than three times Mr. Moss' “base amount” (as defined in Section 280G(b)(3) of the Code).

Change in Control Agreements.

On July 11, 2010, July 20, 2010 and April 20, 2011, Messrs. Turner, Abrahamian and Werner, respectively, eachAugust 21, 2013, the Company entered into change in control agreements with Two RiverMr. Abrahamian and Mr. Turner (the “CIC Agreements”), each of which is effective as of June 1, 2013. These CIC Agreements replace the Company, respectively.  The change in control agreements which are virtually identical,with such individuals that expired on May 31, 2013. The term of the CIC Agreements commenced on June 1, 2013, and will terminate uponon May 31, 2015 unless a Change in Control of the Company, as defined in the CIC Agreement, occurs prior to such date, in which case the CIC Agreement will terminate on the earlier of (i) the executive’s death, or (ii) the second anniversary of the Change in Control, whichever is later. The CIC Agreement provides that, if a Change in Control occurs during the term of the CIC Agreement, the executive is provided with certain employment continuity and termination benefits for the “Contract Period,” which is defined as the period beginning one day prior to and ending on that date which the second anniversary after the occurrence of a Change in Control.

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A “Change in Control” is defined in the CIC Agreement in the same manner as defined in the SERP Agreements.

In the event that during the contract periodContract Period (a) the executive’shis employment is terminated by the Company or Bank without Cause (as defined below) or (b) the executive terminates his employment voluntarily for Good Reason (as defined below), hethe executive will be entitled to a lump-sum cash payment equal to two (2) times his highest annual compensation, including only salary and cash bonus, paid during any of the three (3) calendar years immediately prior to the Change in Control. If the Company is providing him at the time of his termination without Cause or resignation with Good Reason with an automobile for his use, the executive also will be entitled to have the title of that automobile transferred to him, free of all liens, encumbrances, claims or leases, for the consideration of $1.00. The executive is entitled to continued coverage for the remainder of the contract periodContract Period under the medical and dental benefit plans, and life and disability insurance plans, in which hethe executive participates as of the date of his termination without Cause or resignation with Good Reason, under the same costs, terms and conditions as are applicable to employees with similar titles. If the executive’s continued participation under such plans would be prohibited under their terms, the Company or Two River will provide him with periodic payments in such amount as it determines to be sufficient, in its reasonable discretion, to defray the cost of obtaining materially identical benefits. If the executive is terminated for Cause or resigns without Good Reason during the contract period, heContract Period, the executive will be entitled only to payment for benefits and salary accrued to the date of his termination.

 

The changeCIC Agreement defines “Cause” as: (i) conviction of a crime (other than a traffic violation), habitual drunkenness, drug abuse, or excessive absenteeism; (ii) willful and continued failure to perform his duties after at least one written warning from the board of directors of the Company; or (iii) willful misconduct of any type, which causes material injury to either or each of the Company or the Bank.

The CIC Agreement defines “Good Reason” as any material breach of the CIC Agreement or material failure of the Company to tender performance under the CIC Agreement; or any of the following actions taken without the express written consent of the executive: (i) the material diminution in control agreements containhis current functions; (ii) any transfer to an office outside New Jersey or another location greater than 50 miles from his current location; or (iii) a reduction in his annual base salary.

The CIC Agreement contains a covenant not to compete providing that, if the executive receives the lump-sum payment under the agreement, heCIC Agreement, the executive will be prohibited from being employed or retained by, directly or indirectly, any bank or other regulated financial services institution with an office or operating branch in any county in New Jersey within which Two Riverthe Bank or any other existing subsidiary of the Company maintains an office or branch, which directly competes with, or reasonably could be expected to materially adversely affect the revenues generated by, Two Riverthe Bank or any other such subsidiary of the Company. This prohibition lasts for a period of 12 months following his receipt of the lump-sum payment. For the 12 months following the executive’s receipt of the lump-sum payment, hethe executive will be prohibited from soliciting the Company’s employees in a senior managerial, operation or lending capacity, or the Company’s highly skilled employees with access to and responsibility for any confidential information, to become employed or engaged by him or with any person, firm, company or association in which the executive has an interest.

Mr. Moss’ employment agreement and

The CIC Agreements each contain provisions to the effect that if the Company determines in good faith that any of the Total Payments would be subject to the excise tax imposed by Section 4999 of the Code by reason of being considered to be “contingent on a change in control agreements (collectively, the “Agreements” and each an “Agreement”) define “Cause” as: (i) conviction of a crime (other than a traffic violation), habitual drunkenness, drug abuse,ownership or excessive absenteeism; (ii) willful and continued failure to perform his duties after at least one written warning from the Company’s Board; or (iii) willful misconduct of any type, which causes material injury to either or eachcontrol” of the Company or Two River.

The Agreements define “Good Reason” as any material breachwithin the meaning of Section 280G of the Agreement or material failure ofCode, then such Total Payments will be reduced in the manner reasonably determined by Company, in its sole discretion, to tender performance under the Agreement; or any ofextent necessary so that the following actions taken withoutTotal Payments will be less than three times the express written consent of the executive:  (i) the assignment of duties inconsistent with his position or a reduction of the powers or functions associated his position, title, duties, responsibilities, or status, or his removal from his current position; (ii) any transfer to an office outside New Jersey or another location greater than 50 miles from his current location; (iii) a reduction in his annual base salary; or (iv) the Company’s failure to provide, or material reduction of, any benefits under any retirement, life insurance, health, disability, or other benefit plan.

A “Change in Control” under the Agreements includes actual knowledge by the Company that any unaffiliated person is or has become the beneficial ownerexecutive's “base amount” (as defined in Rule 13d-3Section 280G(b)(3) of the Securities Exchange Act of 1934), directly or indirectly, of securities of the Company representing more than twenty-five percent (25%) of the combined voting power of the Company’s then outstanding securities; the purchase by an unaffiliated person of twenty-five percent (25%), in the aggregate, of the issued and outstanding shares of the Company’s common stock pursuant to a tender or exchange offer; and the approval by (i) the shareholders of the Company, or (ii) as to Two River, the Company as the sole shareholder of Two River, of certain mergers, consolidations, asset dispositions, and other reorganizational transactions.

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The table below summarizes the payments our named executive officers would receive if they were terminated as of, or a change in control occurred on, December 31, 2012.

				Before Change in Control		After Change in Control
		Termination for Disability	Involuntary Termination for Cause	Involuntary Termination without Cause	Voluntary Termination for Good Reason	Involuntary Termination without Cause	Voluntary Termination for Good Reason
William D. Moss	Severance (1)	$0	$0	$564,000	$564,000	$564,000	$564,000
	Welfare continuation (2)	$0	$0	$24,335	$24,335	$24,335	$24,335
	Additional SERP Benefit	$0	$0	$0	$0	$594,146	$594,146
	Automobile	$46,800	$0	$46,800	$46,800	$46,800	$46,800
	Value of accelerated stock options	$0	$0	$0	$0	$39,567	$39,567
	Value of accelerated restricted stock	$0	$0	$0	$0	$69,310	$69,310
	Potential reduction in payout due to operation of Code Section 280G	$0	$0	$0	$0	($549,878)	($549,878)
	Total	$46,800	$0	$635,135	$635,135	$788,280	$788,280
A. Richard Abrahamian	Severance (1)	$0	$0	$0	$0	$388,000	$388,000
	Welfare continuation (2)	$0	$0	$0	$0	$35,767	$35,767
	Additional SERP Benefit	$0	$0	$0	$0	$503,507	$503,507
	Value of accelerated stock options	$0	$0	$0	$0	$23,995	$23,995
	Value of accelerated restricted stock	$0	$0	$0	$0	$0	$0
	Potential reduction in payout due to operation of Code Section 280G	$0	$0	$0	$0	($430,766)	($430,766)
	Total	$0	$0	$0	$0	$520,503	$520,503
Alan B. Turner	Severance (1)	$0	$0	$0	$0	$401,000	$401,000
	Welfare continuation (2)	$0	$0	$0	$0	$26,651	$26,651
	Additional SERP Benefit	$0	$0	$0	$0	$330,607	$330,607
	Automobile	$0	$0	$0	$0	$30,250	$30,250
	Value of accelerated stock options	$0	$0	$0	$0	$25,950	$25,950
	Value of accelerated restricted stock	$0	$0	$0	$0	$30,806	$30,806
	Potential reduction in payout due to operation of Code Section 280G	$0	$0	$0	$0	($282,573)	($282,573)
	Total	$0	$0	$0	$0	$562,692	$562,692
Robert C. Werner	Severance (1)	$0	$0	$0	$0	$376,000	$376,000
	Additional SERP Benefit	$0	$0	$0	$0	$527,566	$527,566
	Welfare continuation (2)	$0	$0	$0	$0	$48,433	$48,433
	Value of accelerated stock options	$0	$0	$0	$0	$16,345	$16,345
	Value of accelerated restricted stock	$0	$0	$0	$0	$0	$0
	Potential reduction in payout due to operation of Code Section 280G	$0	$0	$0	$0	($499,929)	($499,929)
	Total	$0	$0	$0	$0	$468,415	$468,415

(1) For severance and welfare continuation payment calculation, and time and form of such payments, see "Employment and Severance Agreements."

(2) Assumes no increase in the cost of welfare benefits.

Code).

CERTAIN TRANSACTIONS WITH MANAGEMENT

Transactions with Related Persons

Two River

The Bank has made loans to the Company’s directors and executive officers and their associates and, assuming continued compliance with generally applicable credit standards, it expects to continue to make such loans. All of these loans (i) were made in the ordinary course of business; (ii) were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with other persons; and (iii) did not involve more than the normal risk of collectability or present other unfavorable features. As of December 31, 2012, Two River2013, the Bank had total loans and loan commitments outstanding to directors and executive officers and their affiliates of approximately $18.5$18.6 million, or approximately 20.1%19.6% of total shareholder’s equity at that date. As of December 31, 2012,2013, no director or executive officer of the Company was in default under any loan transaction with the Bank. Two River.  The CompanyRiver Bancorp has not made any loans to any person.

 

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The Board has determined that other than the transactions described in the preceding paragraphs, no transactions occurred since the beginning of fiscal year 20122013 or are currently planned involving any director, director nominee or executive officer of the Company, any known 5% shareholder of the Company or any immediate family member of any of the foregoing persons that would require disclosure as a “related person transaction.”

NASDAQ Marketplace Rule 5630(a) requires that we conduct an appropriate review of related party transactions for potential conflict of interest situations on an ongoing basis, and all such transactions must be approved by our Audit Committee or another independent body of the Board of Directors.

Nominating and Corporate Governance Committee.

Our Code of Conduct requires all officers to make full written disclosure to the CEO and the Board of Directors and obtain written approval from the CEO of all proposed outside employment, directorships or fiduciary appointments. Directors, or a business in which the Director is a partner, significant shareholder, director or executive officer, may provide services to us or to our customers in a transaction with us, subject to disclosure to and approval by the CEO and subject to disclosure to and approval by the Board of Directors when the CEO reasonably believes there is the potential for a material conflict between our interests and the Director’s or his client’s interests. In the case of a transaction with a family member, or a business in which the family member is a partner, significant shareholder, director or executive officer, relating to service or product supplier or otherwise, prior approval by the Board of Directors and competitive pricing are required. If it relates to a family member of an employee (and not a member of senior management), CEO approval may substitute for approval by the Board of Directors.

To identify related party transactions, each year, we submit and require our directors and officers to complete Director and Officer Questionnaires identifying any transaction with us or any of our subsidiaries in which the officer or director or their family members have an interest.

SHAREHOLDER PROPOSALS

New Jersey corporate law requires that the notice of shareholders’ meeting (for either a regular or special meeting) specify the purpose or purposes of the meeting. Thus, any substantive proposal, including shareholder proposals, must be referred to in the Company’s notice of shareholders’ meeting for the proposal to be properly considered at a shareholders’ meeting.

Proposals of shareholders which are eligible under SEC rules to be included in the Company’s 20142015 proxy materials must be received by the Corporate Secretary of the Company no later than December 2, 2013.

12, 2014.

If the Company changes the date of its 20142015 Annual Meeting to a date more than 30 days from the anniversary of the date of its 20132015 Annual Meeting, then the deadline for submission of shareholder proposals will be changed to a reasonable time before the Company begins to print and mail its proxy materials. If the Company changes the date of its 20142015 Annual Meeting in a manner that alters the deadline, the Company will so state under Part II, Item 5 of the first quarterly report on Form 10-Q it files with the SEC after the date change, or will notify its shareholders by another reasonable method.

Under our Bylaws, written notice of shareholder nominations to the Board of Directors must be delivered to the Company’s Secretary not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s Annual Meeting. Accordingly, any shareholder who wishes to have a nomination considered at the 20142015 annual meeting must deliver a written notice (containing the information specified in our Bylaws regarding the shareholder and the proposed action) to the Company’s Secretary between January 8, 201421, 2015 and February 7, 2014.

20, 2015.

 

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OTHER MATTERS

As of the date of this proxy statement, the Board of Directors knows of no business that will be presented for consideration at the Annual Meeting other than the items referred to above. Proxies in the enclosed form will be voted in respect of any other business that is properly brought before the Annual Meeting as recommended by the Board of Directors or, if no such recommendation is given, in the discretion of the proxy holders.

Shareholders are urged to sign the enclosed proxy, which is solicited on behalf of the Board, and return it in the enclosed envelope.

	By Order of the Board of Directors
	William D. Moss
	President and Chief Executive Officer

A copy of the annual report to shareholders for the fiscal year ended December 31, 20122013 accompanies this proxy statement. The annual report is a combined report with the Company’s Annual Report on Form 10-K (without exhibits) for the year ended December 31, 20122013 filed with the SEC. The Company will provide copies of the exhibits to the Form 10-K upon payment of a reasonable fee, upon receipt of a request addressed to the Corporate Secretary, Community PartnersTwo River Bancorp, 766 Shrewsbury Avenue, Tinton Falls, New Jersey 07724.

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REVOCABLE PROXY COMMUNITY PARTNERS BANCORP

		ANNUAL MEETING OF SHAREHOLDERS MAY 8, 2013 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
		The undersigned hereby appoints Alan B. Turner, A. Richard Abrahamian, and Robert C. Werner and each of them, with full power of substitution, as attorneys and proxies for the undersigned, to attend the 2013 Annual Meeting of Shareholders of Community Partners Bancorp (the “Company”), to be held at the Hilton Woodbridge, located at 120 Wood Avenue South, Iselin, New Jersey, on Wednesday, May 8, 2013, at 10:00 a.m. Eastern Time, or any adjournment thereof, and to vote the number of shares of common stock of the Company that the undersigned would be entitled to vote, and with all the power the undersigned would possess, if personally present, as follows:
		Mark here if you no longer wish to receive paper annual meeting materials and instead view them online.	o
		Mark here if you plan to attend the meeting.	o
		Mark here for address change.	o
IMPORTANT ANNUAL MEETING INFORMATION
IMPORTANT  NOTICE  REGARDING  THE  AVAILABILITY  OF  PROXY  MATERIALS  FOR  THE  SHAREHOLDER MEETING TO BE HELD ON MAY 8, 2013.		Comments:
THE PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT:
http://www.cfpproxy.com/5995

FOLD HERE – PLEASE DO NOT DETACH – PLEASE ACT PROMPTLY

PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE

x	PLEASE MARK VOTES
	AS IN THIS EXAMPLE

		For	With- hold	For All Except
1.	To vote for the following nominee for election as a Class I director of the Company:	o	o	o
	JAMES M. BOLLERMAN ROBERT B. GROSSMAN JOHN J. PERRI, JR. ROBIN ZAGER
INSTRUCTION: To withhold authority to vote for any individual nominee, mark “For All Except” and write that nominee’s name in the space provided below.

 

			For	Against	Abstain
2.	To approve an amendment to the Company’s certificate of incorporation to change the name of the Company to Two River Bancorp.		o	o	o
			For	Against	Abstain
3.	An advisory vote to approve the compensation of the Company’s named executive officers.		o	o	o
		One Year	Two Years	Three Years	Abstain
4.	An advisory vote on the frequency of future advisory votes on the Company’s executive compensation.	o	o	o	o
			For	Against	Abstain
5.	Ratify  selection  of  ParenteBeard  LLC  as  the  Company’s independent registered public accounting firm.		o	o	o
6.	In their discretion, on the conduct of other business if properly raised.

If this proxy is properly signed and is not revoked, the proxies will vote as specified herein or, if a choice is not specified, they will vote “FOR” the nominees listed in Item 1, “FOR” the proposals set forth in Items 2, 3, and 5, “FOR” a one year frequency for proposal 4, and in their discretion on the conduct of other business if properly raised.

Please be sure to date and sign this proxy card in the box below.		Date
Sign above		Co-holder (if any) sign above
When shares are held by joint tenants, both should sign. Executors, administrators, trustees, etc. should give full title as such.  If the signer is a corporation, please sign full corporate name by duly authorized officer.

5995

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