CENTRAL JERSEY BANCORP
627 Second Avenue
Long Branch, New Jersey 07740
(732) 571-1300
May 25, 2007
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Central Jersey Bancorp to be held at Branches, located at 123 Monmouth Road
(Route 71), West Long Branch, New Jersey, on Thursday, June 28, 2007 at 10:00
a.m., local time.
At the annual meeting, you will be asked to elect fourteen nominees for
director and consider and act upon such other business as may properly come
before the annual meeting or any adjournment or postponement thereof.
It is important that your shares of Central Jersey Bancorp common stock
are represented at the annual meeting, whether or not you attend the annual
meeting in person and regardless of the number of shares you own. To ensure that
your shares of common stock are represented, we urge you to complete, sign, date
and return your proxy card in the enclosed postage prepaid envelope. If you
attend the annual meeting, you may vote in person even if you have previously
submitted a proxy. Your prompt attention is greatly appreciated.
Very truly yours,
/s/ Robert S. Vuono
Robert S. Vuono
Secretary
CENTRAL JERSEY BANCORP
627 Second Avenue
Long Branch, New Jersey 07740
(732) 571-1300
----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On June 28, 2007
----------------------------
To the Shareholders of
Central Jersey Bancorp:
NOTICE IS HEREBY GIVEN, that the annual meeting of shareholders (the
"Annual Meeting") of Central Jersey Bancorp will be held at Branches, located at
123 Monmouth Road (Route 71), West Long Branch, New Jersey, on Thursday, June
28, 2007 at 10:00 a.m., local time, for the following purposes:
1. To elect fourteen nominees for director who will serve on Central
Jersey Bancorp's Board of Directors for the following year and until
their successors have been elected and qualify; and
2. To transact such other business as may properly come before the
Annual Meeting, or any adjournment or postponement thereof.
Shareholders of record at the close of business on May 15, 2007 are
entitled to notice of and to vote at the Annual Meeting and at any adjournment
or postponement thereof.
Whether or not you expect to attend the Annual Meeting, please complete,
sign and date the enclosed proxy card and return it in the accompanying postage
prepaid envelope. You may revoke your proxy either by written notice to Central
Jersey Bancorp, by submitting a proxy card dated as of a later date or in person
at the Annual Meeting. The Board of Directors of Central Jersey Bancorp
recommends that you vote "FOR" each of the nominees for director.
By Order of the Board of Directors
/s/ Robert S. Vuono
Robert S. Vuono
Secretary
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS. HOWEVER,
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE URGED TO SIGN AND
DATE THE ACCOMPANYING PROXY CARD AND MAIL IT AT ONCE IN THE ENCLOSED ENVELOPE.
PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
- --------------------------------------------------------------------------------
CENTRAL JERSEY BANCORP
------------------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
------------------------------------
General Information
This Proxy Statement is being furnished to the holders of common stock,
with a par value of $.01 per share ("Common Stock"), of Central Jersey Bancorp
in connection with the solicitation of proxies by the Board of Directors of
Central Jersey Bancorp (the "Board" or "Board of Directors") for use at the
annual meeting of shareholders of Central Jersey Bancorp to be held at 10:00
a.m. on Thursday, June 28, 2007 at Branches, located at 123 Monmouth Road (Route
71), West Long Branch, New Jersey (the "Annual Meeting"). The Board of Directors
has fixed the close of business on May 15, 2007 as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting.
This Proxy Statement and the enclosed proxy card are being mailed to
shareholders on or about May 25, 2007.
At the Annual Meeting, shareholders of Central Jersey Bancorp will
consider and vote on:
1. The election of fourteen nominees for director who will serve
on Central Jersey Bancorp's Board of Directors for the
following year and until their successors have been elected
and qualify; and
2. Any other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Shareholders may revoke the authority granted by their execution of
proxies at any time before the effective exercise of such proxies by filing
written notice of such revocation with the secretary of the Annual Meeting.
Presence at the Annual Meeting does not, in and of itself, revoke the proxy.
Also, any grant of a proxy subsequent to an earlier grant of a proxy, revokes
the earlier proxy. All shares of Common Stock represented by executed and
unrevoked proxies will be voted in accordance with the specifications therein.
Proxies submitted without specification will be voted "FOR" the election of each
of the nominees for director. Neither the Board nor management of Central Jersey
Bancorp is aware, to date, of any matter being presented at the Annual Meeting
other than the election of directors, but, if any other matter is properly
presented, the persons named in the proxy will vote thereon according to their
best judgment.
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors. The cost for preparing, assembling and mailing the proxy materials is
to be borne by Central Jersey
Bancorp. It is not anticipated that any compensation will be paid for soliciting
proxies, and Central Jersey Bancorp does not intend to employ specially engaged
personnel in the solicitation of proxies. It is contemplated that proxies will
be solicited principally through the mail, but directors, officers and employees
of Central Jersey Bancorp, without additional compensation, may solicit proxies
personally or by telephone, telegraph, facsimile transmission or special letter.
Voting Securities
Shareholders of record at the close of business on May 15, 2007 are
entitled to one vote for each share of Common Stock then held by them. As of
that date, Central Jersey Bancorp had 8,265,143 shares of Common Stock issued
and outstanding. The presence, in person or by proxy, of at least a majority of
the total number of outstanding shares of Common Stock entitled to be voted at
the Annual Meeting is necessary to constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted as shares present and entitled
to be voted at the Annual Meeting for the purpose of determining the existence
of a quorum.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting whether in person or by proxy. All votes will be tabulated by the
inspector of election appointed at the Annual Meeting who will separately
tabulate affirmative votes, negative votes, abstentions and broker non-votes.
Under New Jersey law, any proxy submitted and containing an abstention or broker
non-vote will not be counted as a vote cast on any matter to which it relates.
2
Principal Shareholders and Security Ownership of Management
The following table sets forth information as of May 15, 2007, with
respect to the beneficial ownership (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of Central Jersey
Bancorp's Common Stock, which is the only class of Central Jersey Bancorp
capital stock with shares issued and outstanding, by (1) each director and
nominee for director of Central Jersey Bancorp, (2) each of the Named Executive
Officers (as hereinafter defined) for the year ended December 31, 2006, (3) each
person or group of persons known by Central Jersey Bancorp to be the beneficial
owner of greater than 5% of Central Jersey Bancorp's outstanding Common Stock,
and (4) all directors and executive officers of Central Jersey Bancorp as a
group. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC") and generally includes voting or
investment power with respect to securities. Except as indicated by footnote,
the persons named in the table below have sole voting power and investment power
with respect to the shares of Common Stock shown as beneficially owned by them.
Beneficial Ownership of
Central Jersey Bancorp's
Common Stock
-----------------------------------
Percent of
Name of Beneficial Owner (1) No. of Shares (2) Class
- ---------------------------- ------------------ -------------
James G. Aaron, Esq. (3)(4)................ 225,937 2.72%
Mark R. Aikins, Esq. (3)(5)................ 108,117 1.30%
Nicholas A. Alexander, C.P.A. (3)(6)....... 90,202 1.09%
John A. Brockriede (3)(7).................. 445,179 5.36%
George S. Callas (3)(8)(9)................. 178,196 2.14%
James P. Dugan, Esq. (3)(10)............... 97,001 1.17%
M. Claire French (3)(11)................... 68,731 0.83%
William H. Jewett (3)(12).................. 98,620 1.18%
Paul A. Larson, Jr. (3)(13)................ 78,114 0.94%
John F. McCann (3)(14)..................... 187,589 2.26%
Carmen M. Penta, C.P.A. (3)(15)............ 98,877 1.19%
Mark G. Solow (3)(16)...................... 173,706 2.09%
James S. Vaccaro (3)(17)(18)............... 204,986 2.44%
3
Beneficial Ownership of
Central Jersey Bancorp's
Common Stock
--------------------------------------
Percent of
Name of Beneficial Owner - Directors and Officers (1) No. of Shares (2) Class
- ----------------------------------------------------- ----------------- -----------------
Robert S. Vuono (3)(19)(20)...................................... 103,731 1.24%
Anthony Giordano, III (21)(22)................................... 62,849 0.76%
Robert K. Wallace (23)(24) ...................................... 57,358 0.69%
Thomas J. Garrity (25)(26) ...................................... 15,760 0.19%
Linda J. Brockriede (27)(28)..................................... 445,179 5.36%
All Directors and Executive Officers
as a Group (17 persons) (4)(5)(6)(7)(9)(10)
(11)(12)(13)(14)(15)(16)(18)(20)(22)(24)(26)..................... 2,294,953 25.15%
(1) All directors and officers listed in this table maintain a mailing address
at 627 Second Avenue, Long Branch, New Jersey 07740.
(2) In accordance with Rule 13d-3 of the Exchange Act, a person is deemed to
be the beneficial owner, for purposes of this table, of any shares of
Central Jersey Bancorp's Common Stock if he or she has voting or
investment power with respect to such security. This includes shares (a)
subject to options exercisable within sixty days, and (b)(1) owned by a
spouse, (2) owned by other immediate family members, or (3) held in trust
or held in retirement accounts or funds for the benefit of the named
individuals, over which shares the person named in the table may possess
voting and/or investment power.
(3) Such person currently serves as a director of Central Jersey Bancorp and
is a nominee for director.
(4) Includes 40,144 shares subject to currently exercisable stock options;
24,078 shares held in an Individual Retirement Account with Bear Stearns
for the benefit of Mr. Aaron; and 16,632 shares registered in the name of
Mr. Aaron as trustee for the Trust Under the Will of Leslie B. Aaron, Mr.
Aaron's father. Mr. Aaron disclaims any beneficial ownership of the shares
held in the aforementioned trust. Also includes 39,927 shares registered
in the name of ERBA Co., Inc., in which Mr. Aaron has an ownership
interest and serves as vice president. Mr. Aaron disclaims
4
any beneficial ownership of the shares held in these trusts. Also includes
20,449 shares held in trusts for the benefit of Mr. Aaron's family members
of which Mr. Aaron's spouse is trustee; 3,049 shares registered in the
name of Mr. Aaron's spouse; and 8,757 shares held in an Individual
Retirement Account with Bear Stearns for the benefit of Mr. Aaron's
spouse. Mr. Aaron disclaims beneficial ownership of the shares held in
these trusts, the shares held by his spouse and the shares held for the
benefit of his spouse.
(5) Includes 40,144 shares subject to currently exercisable stock options;
67,314 shares held in a Simplified Employee Pension/Individual Retirement
Account by Merrill Lynch as custodian for the benefit of Mr. Aikins; and
659 shares held by Mr. Aikins for the benefit of his children under the
Uniform Transfers to Minors Act, as to which shares he disclaims any
beneficial interest.
(6) Includes 40,144 shares subject to currently exercisable stock options; and
5,556 shares held in an Individual Retirement Account with Smith Barney
for the benefit of Mr. Alexander. Also includes 1,310 shares held by Mr.
Alexander for the benefit of his grandchildren under the Uniform Transfers
to Minors Act. Mr. Alexander disclaims beneficial ownership of the
securities held for the benefit of his grandchildren.
(7) Includes 40,144 shares subject to currently exercisable stock options.
Also includes 26,355 shares held in an Individual Retirement Account and
4,506 shares held in a Simplified Employee Pension Plan both by
PaineWebber as custodian for the benefit of Mr. Brockriede. Includes
96,847 shares held by CJM Management, L.L.C., of which Mr. Brockriede is
an Administrative Member. Mr. Brockriede disclaims beneficial ownership of
these securities except to the extent of his ownership interest in CJM
Management, L.L.C. Also includes 254,012 shares held jointly with Mr.
Brockriede's spouse and 19,028 shares held in trusts for the benefit of
Mr. Brockriede's family members of which Mr. Brockriede's spouse is
trustee; and 1,917 shares held in an Individual Retirement Account by
PaineWebber for the benefit of Mr. Brockriede's spouse. Mr. Brockriede
disclaims beneficial ownership of the shares held in these trusts and the
shares held by PaineWebber on behalf of Mr. Brockriede's spouse.
(8) Mr. Callas serves as the Chairman of the Board of Central Jersey Bancorp.
(9) Includes 68,768 shares subject to currently exercisable stock options and
6,123 shares held by Mr. Callas' spouse. Mr. Callas disclaims beneficial
ownership of the shares held by his spouse.
(10) Includes 46,576 shares subject to currently exercisable stock options.
(11) Includes 46,576 shares subject to currently exercisable stock options.
(12) Includes 61,062 shares subject to currently exercisable stock options.
(13) Includes 31,491 shares subject to currently exercisable stock options.
Also includes 7,654 shares held jointly with Mr. Larson's spouse.
5
(14) Includes 40,144 shares subject to currently exercisable stock options; and
13,885 shares held in an Individual Retirement Account with Charles Schwab
for the benefit of Mr. McCann. Also includes 15,309 shares held by Mr.
McCann's wife, as to which shares he disclaims any beneficial interest.
(15) Includes 35,944 shares subject to currently exercisable stock options;
7,173 shares held by Mr. Penta's wife; and 138 shares held for the benefit
of Mr. Penta's children. Mr. Penta disclaims beneficial ownership of the
shares held by his wife and for the benefit of his children.
(16) Includes 40,144 shares subject to currently exercisable stock options.
(17) Mr. Vaccaro is a Named Executive Officer and serves as the President and
Chief Executive Officer of Central Jersey Bancorp.
(18) Includes 137,720 shares subject to currently exercisable stock options;
39,093 shares held by Merrill Lynch Pierce Fenner & Smith as custodian for
the benefit of James S. Vaccaro Simplified Employee Pension; 3,184 shares
held pursuant to the 401(k) plan of Central Jersey Bank, N.A. for the
benefit of Mr. Vaccaro; 1,833 shares held by Mr. Vaccaro's son; and 2,448
shares held by Mr. Vaccaro as custodian for his daughters under the
Uniform Transfers to Minors Act. Mr. Vaccaro disclaims any beneficial
interest to the shares held by him as custodian for his children.
(19) Mr. Vuono is a Named Executive Officer and serves as the Senior Executive
Vice President, Chief Operating Officer and Secretary of Central Jersey
Bancorp.
(20) Includes 91,869 shares subject to currently exercisable stock options and
11,862 shares held in an Individual Retirement Account with Bank of
America Investment Services, Inc.
(21) Mr. Giordano is a Named Executive Officer and serves as Executive Vice
President, Chief Financial Officer, Treasurer and Assistant Secretary of
Central Jersey Bancorp.
(22) Includes 50,384 shares subject to currently exercisable stock options;
2,406 shares held by Charles Schwab & Co. in an Individual Retirement
Account for the benefit of Mr. Giordano; 2,500 shares held in a Simplified
Employee Pension by Charles Schwab & Co. for the benefit of Mr. Giordano's
spouse, as to which shares he disclaims any beneficial interest; 4,838
shares held pursuant to the 401(k) plan of Central Jersey Bank, N.A. for
the benefit of Mr. Giordano; 2,179 shares held by Charles Schwab & Co. in
an Individual Retirement Account for the benefit of Mr. Giordano's spouse,
as to which shares he disclaims any beneficial interest; and 542 shares
held by Mr. Giordano as custodian for his son under the Uniform Transfers
to Minors Act, as to which shares he disclaims any beneficial interest.
(23) Mr. Wallace is a Named Executive Officer and serves as Executive Vice
President and Senior Commercial Lending Officer of Central Jersey Bank,
N.A.
6
(24) Includes 39,414 shares subject to currently exercisable stock options and
12,013 shares held pursuant to the 401(k) plan of Central Jersey Bank,
N.A. for the benefit of Mr. Wallace.
(25) Mr. Garrity is a Named Executive Officer and serves as Executive Vice
President and Commercial Lending Officer of Central Jersey Bank, N.A.
(26) Includes 8,459 shares subject to currently exercisable stock options; 676
shares held in an individual retirement account for the benefit of Mr.
Garrity; and 6,625 shares held pursuant to the 401(k) plan of Central
Jersey Bank, N.A. for the benefit of Mr. Garrity.
(27) John A. Brockriede and Linda J. Brockriede together beneficially own a
total of 445,179 shares of Bancorp's Common Stock which represents 5.37%
of Bancorp's outstanding Common Stock.
(28) Includes (i) 254,012 shares held jointly with Mrs. Brockriede's husband,
John A. Brockriede; (ii) 19,028 shares held in trusts for the benefit of
Mrs. Brockriede's family members of which Mrs. Brockriede is trustee;
(iii) 1,917 shares held in an Individual Retirement Account by PaineWebber
for the benefit of Mrs. Brockriede; (iv) 40,144 shares subject to
currently exercisable stock options previously granted to John A.
Brockriede; (v) 26,355 shares held in an Individual Retirement Account and
4,506 shares held in a Simplified Employee Pension Plan both by
PaineWebber as custodian for the benefit of John A. Brockriede; and (vi)
96,847 shares held by CJM Management, L.L.C., of which John A. Brockriede
is an Administrative Member. Mrs. Brockriede disclaims beneficial
ownership to all of the aforementioned securities with the exception of
those held jointly with her husband and the securities held in an
Individual Retirement Account for her benefit. Mrs. Brockriede maintains a
mailing address at 450 Broadway, Long Branch, New Jersey 07740.
7
ELECTION OF DIRECTORS
The By-laws of Central Jersey Bancorp provide that the number of directors
shall not be less than three directors nor more than fifteen directors, and
permit the exact number of directors to be determined from time to time by the
Board. Currently, the Board has fixed the number of directors at fourteen.
Nomination Process
The Nominating and Corporate Governance Committee of our Board of
Directors is principally responsible for: (1) determining the slate of director
nominees for election to the Board of Directors; (2) identifying and
recommending candidates to fill vacancies occurring between annual shareholder
meetings; (3) reviewing the composition of Board committees; and (4) reviewing
Central Jersey Bancorp's policies and programs that relate to matters of
corporate responsibility, including public issues of significance to Central
Jersey Bancorp and our shareholders. The Nominating and Corporate Governance
Committee is to annually review with the Board the applicable skills and
characteristics required of Board nominees in the context of current Board
composition and company circumstances.
In making its recommendations to the Board, the Nominating and Corporate
Governance Committee considers, among other things, the qualifications of
individual director candidates. The Nominating and Corporate Governance
Committee collaborates with the Board to determine the appropriate
characteristics, skills, and experiences for the Board as a whole and its
individual members with the objective of having a Board with diverse backgrounds
and experience in business, government, education and public service. In
evaluating the suitability of individual Board members, the Nominating and
Corporate Governance Committee takes into account many factors, including a
candidate's general understanding of marketing, finance and other disciplines
relevant to the success of a publicly traded company in today's business
environment; understanding of Central Jersey Bancorp's business and technology;
educational and professional background; and personal accomplishment. The
Nominating and Corporate Governance Committee evaluates each individual in the
context of the Board as a whole, with the objective of recommending a group that
can best perpetuate the success of Central Jersey Bancorp's business and
represent shareholder interests through the exercise of sound judgment, using
its members' diversity of experience. In determining whether to recommend a
director for re-election, the Nominating and Corporate Governance Committee
considers the director's past attendance at meetings and participation in and
contributions to the activities of the Board.
The Nominating and Corporate Governance Committee will also consider
nominees for director suggested by shareholders of Central Jersey Bancorp
applying the same criteria for nominees described above and considering the
additional information required below. Any shareholder nominee for director for
consideration by the Nominating and Corporate Governance Committee must be
received by Central Jersey Bancorp for the 2008 annual meeting of shareholders
at its principal executive offices located at 627 Second Avenue, Long Branch,
New Jersey 07740 no later than December 31, 2007 and must be accompanied by the
following information: (1) the name and contact information for the nominee; (2)
a statement of the nominee's business experience and educational background; (3)
a detailed description describing any relationship between the nominee and the
proposing shareholder; (4) a statement by the
8
shareholder explaining why he, she or it believes that the nominee is qualified
to serve on the Board and how his or her service would benefit Central Jersey
Bancorp; and (5) a statement that the nominee is willing to be considered and
willing to serve as a director of Central Jersey Bancorp if nominated and
elected. The Board retains complete discretion for making nominations for
election as a member of the Board.
Nominees
It is intended that the proxies solicited by the Board will be voted "FOR"
the fourteen nominees listed below in the section captioned "Board of Directors"
(unless a shareholder otherwise directs). If, for any reason, any of the
nominees becomes unavailable for election to or service on the Board, the
proxies solicited by the Board of Directors will be voted for such substituted
nominee(s) as is (are) selected by the Board of Directors. The Board has no
reason to believe that any of the named nominees are not available or will not
serve if elected. Each nominee for director currently serves as a director of
Central Jersey Bancorp and its bank subsidiary, Central Jersey Bank, N.A.
Directors will be elected by a plurality of the votes cast at the Annual Meeting
whether in person or by proxy. Subject to the election of George S. Callas as a
director at the Annual Meeting, Mr. Callas will serve as Chairman of the Board
until December 31, 2007. Effective January 1, 2008, James S. Vaccaro will become
the Chairman of the Board, subject to his election as a director at the Annual
Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES FOR
DIRECTOR.
Board of Directors
Each candidate for director currently serves as a director of Central
Jersey Bancorp and has been nominated to serve for an additional one year term
to expire at the next annual meeting of shareholders of Central Jersey Bancorp.
The name, age, principal occupation or employment and biographical information
of each person nominated to serve as a member of the Board of Directors of
Central Jersey Bancorp is set forth below:
Name and Address Age Principal Occupation or Employment
- ---------------- --- ----------------------------------
James G. Aaron, Esq. 62 Partner of Ansell, Zaro, Grimm & Aaron
Mark R. Aikins, Esq. 47 Managing Member of Mark R. Aikins, L.L.C.
Nicholas A. Alexander, C.P.A. 68 Retired Partner of KPMG LLP
John A. Brockriede 72 Businessman
George S. Callas 74 Chairman of the Board of Central Jersey
Bancorp and President of Allaire Capital
Corp.
9
Name and Address Age Principal Occupation or Employment
- ---------------- --- ----------------------------------
James P. Dugan, Esq. 77 Of Counsel to Waters, McPherson, McNeill,
P.C.
M. Claire French 68 Monmouth County Clerk
William H. Jewett 76 President of Ecumenical Capital
Paul A. Larson, Jr. 57 President Larson Ford-Suzuki
John F. McCann 69 Retired Group President of Salomon Smith
Barney
Carmen M. Penta, C.P.A. 62 Partner of Amper, Politziner & Mattia,
P.C.
Mark G. Solow 58 Co-founder of GarMark Advisors, L.L.C.
James S. Vaccaro 50 President and Chief Executive Officer of
Central Jersey Bancorp
Robert S. Vuono 57 Senior Executive Vice President, Chief
Operating Officer and Secretary of
Central Jersey Bancorp
There are no family relationships among the nominees for director and
executive officers of Central Jersey Bancorp. None of the nominees for director
or executive officers of Central Jersey Bancorp are directors of any company
with a class of securities registered pursuant to Section 12 of the Exchange Act
or subject to the requirements of Section 15(d) of the Exchange Act or any
company registered as an investment company under the Investment Company Act of
1940, as amended, except for Anthony Giordano, III, who serves as a director of
Scivanta Medical Corporation (SCVM.PK).
Each nominee for director of Central Jersey Bancorp elected to the Board
shall also serve as a member of the Board of Directors of Central Jersey Bank,
N.A.
Biographical Information
James G. Aaron is a Partner in the law firm of Ansell, Zaro, Grimm & Aaron
located in Ocean Township, New Jersey. Mr. Aaron Chairs the firm's Commercial
Litigation, Municipal Law and Bankruptcy Practice Department. Mr. Aaron is
licensed to practice law in the State of New Jersey, the United States District
Court for the District of New Jersey and the United States District Court for
the Eastern District of New York. Mr. Aaron also is licensed to practice before
the United States Court of Claims. Mr. Aaron presently serves as the city
attorney for the City of Long Branch, as redevelopment counsel for the City of
Asbury Park and is a member of the Monmouth County and New Jersey State Bar
Associations. He is also presently serving as a Commissioner of the New Jersey
State Racing Commission. Mr. Aaron formerly served on the Advisory Board of the
Jersey Shore Bank and has represented Colonial First National Bank,
10
Midlantic/Merchants National Bank, Commerce Bank, Fidelity Union Bank and
Monmouth County National Bank. Mr. Aaron received his B.A. degree from Dickinson
College in Carlisle, Pennsylvania and his J.D. degree from New York University
School of Law. Mr. Aaron has served as a member of the Board of Directors of
Central Jersey Bancorp since January 1, 2005. Prior to the consummation of the
combination of Central Jersey Bancorp and Allaire Community Bank on January 1,
2005, he served as a member of the Board of Directors of Monmouth Community
Bancorp (the predecessor to Central Jersey Bancorp) since its inception. Mr.
Aaron also has served as a member of the Board of Directors of Central Jersey
Bank, N.A. since its inception. Mr. Aaron resides in West Long Branch, New
Jersey.
Mark R. Aikins is the Managing Member of Mark R. Aikins, L.L.C., a law
firm located in Wall Township, New Jersey. Mr. Aikins is licensed to practice
law in the State of New Jersey and is a member of the Monmouth County and New
Jersey State Bar Associations. His practice includes commercial matters, real
estate and municipal law. He served as the President of the Monmouth-Ocean
Development Council from 1996 to 1998 and currently serves as a trustee of the
Rumson Country Day School. Mr. Aikins formerly served as Chairman of the Board
of Trustees of the Monmouth Museum and as a member of the Advisory Board of
Summit Bank. Mr. Aikins is a member and former director of the Deal Golf and
Country Club and has volunteered time for Habitat for Humanity of Long Branch,
Inc. and The Battleship New Jersey Foundation. He received two Bachelor of Arts
degrees from Brown University and a law degree from Seton Hall University School
of Law. Mr. Aikins has served as a member of the Board of Directors of Central
Jersey Bancorp since January 26, 2006. Prior to the consummation of the
combination of Central Jersey Bancorp and Allaire Community Bank on January 1,
2005, he served as a member of the Board of Directors of Monmouth Community
Bancorp (the predecessor to Central Jersey Bancorp) since its inception. Mr.
Aikins also has served as a member of the Board of Directors of Central Jersey
Bank, N.A. since its inception. Mr. Aikins resides in Rumson, New Jersey.
Nicholas A. Alexander is a retired partner of KPMG LLP. Mr. Alexander's
career with KPMG spanned a total of 35 years. He is a certified public
accountant in the State of New Jersey, a member of The American Institute of
Certified Public Accountants, and a member of the New Jersey State Society of
Certified Public Accountants. Mr. Alexander received his undergraduate degree in
accounting from King's College. Mr. Alexander has served as a member of the
Board of Directors of Central Jersey Bancorp since January 1, 2005. Prior to the
consummation of the combination of Central Jersey Bancorp and Allaire Community
Bank on January 1, 2005, he served as a member of the Board of Directors of
Monmouth Community Bancorp (the predecessor to Central Jersey Bancorp) since its
inception. Mr. Alexander also has served as a member of the Board of Directors
of Central Jersey Bank, N.A. since its inception. Mr. Alexander resides in
Ocean, New Jersey.
John A. Brockriede is a local businessman who has owned and participated
in various businesses in the Long Branch area for over 40 years. His business
holdings include ownership and operation of restaurants, apartment buildings, an
automobile agency, shopping centers, and commercial office space. Mr. Brockriede
also has over twenty-five years of banking experience, having been one of the
founders of Jersey Shore Bank. Mr. Brockriede also served as a director of
Jersey Shore Bank and its successor banks, National State Bank and Constellation
Bancorp. Mr. Brockriede is a member of the Board of Trustees of Monmouth Medical
Center, the Board of
11
Directors of the Juvenile Diabetes Research Foundation, the Board of Trustees of
VNA of Central Jersey Community Services, Inc. and serves as a Commissioner of
the Long Branch Sewerage Authority. Mr. Brockriede has served as a member of the
Board of Directors of Central Jersey Bancorp since January 1, 2005. Prior to the
consummation of the combination of Central Jersey Bancorp and Allaire Community
Bank on January 1, 2005, he served as a member of the Board of Directors of
Monmouth Community Bancorp (the predecessor to Central Jersey Bancorp) since its
inception and served as the Vice-Chairman of such Board until December 31, 2004.
Mr. Brockriede also has served as a member of the Board of Directors of Central
Jersey Bank, N.A. since its inception. Mr. Brockriede resides in Long Branch,
New Jersey.
George S. Callas has served as Chairman of the Board of Central Jersey
Bancorp and Central Jersey Bank, N.A. since January 1, 2005. Prior to the
consummation of the combination of Central Jersey Bancorp and Allaire Community
Bank on January 1, 2005, he served as the Chairman of the Board of Allaire
Community Bank. Mr. Callas is a retired businessman, governmental official and
educator and has owned, operated and participated in various businesses for over
40 years, including restaurants, nursing homes, real estate and wireless
television stations. He assisted in the organization of Allaire State Bank,
located in Wall Township, New Jersey, and served as the Vice Chairman of the
Board of Directors and Vice President of such bank. Mr. Callas served as a
member of the Board of Directors of National Community Bank of New Jersey. Mr.
Callas also served in the Department of Community Affairs of the State of New
Jersey and as the former Business Administrator of the City of New Brunswick and
the Township of Jackson, former Director of the Monmouth County Employment and
Training Agency, former Executive Director of the New Jersey State Senate, and
former head of the Business Advocacy Division of the New Jersey Department of
Commerce and Economic Development. Mr. Callas was also an educator of science,
math and high school history, a college admission counselor and a college
instructor in economics, political science and public administration. Mr. Callas
was involved in many civic groups throughout his career. Mr. Callas resides in
Brielle, New Jersey.
James P. Dugan is Of Counsel to the law firm of Waters, McPherson,
McNeill, P.C. of Secaucus, New Jersey. He is admitted to practice law before the
United States Supreme Court, the Supreme Court of New Jersey and the Court of
Appeals, State of New York. He is Chairman of the Board of Directors of the
Automobile Association of America North Jersey. Mr. Dugan served in the United
States Marine Corps and was discharged with the rank of Captain. He was former
New Jersey State Democratic Committee Chairman, member of the Democratic
National Committee, and served eight years as a New Jersey State Senator. Mr.
Dugan has served as a member of the Board of Directors of Central Jersey Bancorp
since January 26, 2006. Prior to the consummation of the combination of Central
Jersey Bancorp and Allaire Community Bank on January 1, 2005, he served as a
member of the Board of Directors of Allaire Community Bank since its inception.
Mr. Dugan also has served as a director of Central Jersey Bank, N.A. since
January 1, 2005. Mr. Dugan resides in Saddle River, New Jersey.
M. Claire French currently serves as the Monmouth County Clerk and served
as the former Vice Chairman of the State Local Finance Board from 1996 to 2002.
Mrs. French presided over the Monmouth County Improvement Authority from 1986 to
1996 and served as the Mayor of Wall Township or as Committee Woman thereof from
1979 to 1986. She is a former member of the Meridian Hospital System and
currently serves as Chair of Meridian
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Hospital System's Government and Community Relations Committee. Mrs. French is
also a member of the Boards of Directors of InfoAge Learning Center and Central
Jersey Blood Bank. She is active in many of the Chambers of Commerce located in
Ocean and Monmouth Counties, New Jersey, and is Treasurer of the Route 34
Business Group. Mrs. French served on both the Wall Township and Monmouth County
Planning Boards and was President of her State Association of Constitutional
Officials. She was a charter member of the Wall Township Foundation for
Educational Excellence and was a former Regional Director for Bank of New York.
Mrs. French has served as a member of the Board of Directors of Central Jersey
Bancorp since January 1, 2005. Prior to the consummation of the combination of
Central Jersey Bancorp and Allaire Community Bank on January 1, 2005, she served
as a member of the Board of Directors of Allaire Community Bank since 1997. Mrs.
French also has served as a director of Central Jersey Bank, N.A. since January
1, 2005. Mrs. French resides in Wall Township, New Jersey.
William H. Jewett has been the President of Ecumenical Capital, Brielle,
New Jersey since 1995. He was Chief Financial Officer of the Synod of the
Mid-Atlantics and the Synod Foundation for fourteen years (1978 to 1992),
Treasurer of the New Jersey Council of Churches for twelve years (1978 to 1990),
and Chairman of Development for the Classis of New Brunswick for six years (1971
to 1977). He is a past President of Synod of the Mid-Atlantics, the Classis of
New Brunswick and the Shore Area Council of Churches. He was elected Chaplain of
the New Jersey State Senate for three terms, and served as Chairman of the
Juvenile Conference Committee of the Domestic Relations Court of Monmouth
County. He is a life member of the Association of Individual Investors, and is
active in Rotary International. Reverend Jewett earned his M.B.A. at the Wharton
School of Finance and Commerce, University of Pennsylvania and his Master of
Divinity at New Brunswick Theological Seminary (Rutgers). Reverend Jewett has
served as a member of the Board of Directors of Central Jersey Bancorp since
January 1, 2005. Prior to the consummation of the combination of Central Jersey
Bancorp and Allaire Community Bank on January 1, 2005, he served as the Vice
Chairman of the Board of Directors of Allaire Community Bank. Reverend Jewett
also has served as a director of Central Jersey Bank, N.A. since January 1,
2005. Reverend Jewett resides in Brielle, New Jersey.
Paul A. Larson, Jr. is the President of Larson Ford-Suzuki, Lakewood, New
Jersey and past Chairman of the New Jersey Coalition of Automotive Retailers. He
is the past President of the Ocean County Auto Dealers Association, the past
President and Director of Shore Area YMCA, a former member of the Summit Bank
Advisory Board, and President of the New Jersey Employers Association. He also
served as Treasurer, Secretary and Membership Chairman at Manasquan River Golf
Club and Secretary for the Haystack Club. Mr. Larson has volunteered much of his
time as: a member of the Wall Township Board of Adjustment; a Vice President of
Shelter Inc.; the SME Chairman for the Thunderbird District of the Monmouth
County Boy Scouts; a member of the Lakewood Athletic Foundation; a Vice
President of the Wall Foundation for Educational Excellence and the Treasurer of
the Wall Township Football Club. He earned his degree in Business Administration
from Northwood University, Michigan. He has served as a member of the Board of
Directors of Central Jersey Bancorp since January 1, 2005. Prior to the
consummation of the combination of Central Jersey Bancorp and Allaire Community
Bank on January 1, 2005, he served as a member of the Board of Directors of
Allaire
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Community Bank since its inception. Mr. Larson also has served as a director of
Central Jersey Bank, N.A. since January 1, 2005. Mr. Larson resides in Wall
Township, New Jersey.
John F. McCann is retired from a 29-year career in the securities
industry, most recently with Salomon Smith Barney where he served in various
capacities including Group President and Senior Executive Vice President. Mr.
McCann is a former member of the Boards of Directors of the financial services
firms of Shearson American Express and Robinson Humphrey. Mr. McCann has served
as a member of the Board of Directors of Central Jersey Bancorp since January 1,
2005. Prior to the consummation of the combination of Central Jersey Bancorp and
Allaire Community Bank on January 1, 2005, he served as a member of the Board of
Directors of Monmouth Community Bancorp (the predecessor to Central Jersey
Bancorp) since its inception. Mr. McCann also has served as a member of the
Board of Directors of Central Jersey Bank, N.A. since its inception. Mr. McCann
resides in Rumson, New Jersey.
Carmen M. Penta, a Certified Public Accountant, is a partner in the firm
of Amper, Politziner & Mattia, P.C., Certified Public Accountants and
Consultants. Prior thereto, Mr. Penta was a partner in the accounting firm of
Wiener, Penta & Goodman, P.C. Mr. Penta's primary sphere of influence is in
Monmouth and Ocean counties, where his expertise includes tax matters, the
specialized needs of medical professionals, national restaurant franchises,
hotel, motel and recreational properties, and nursing homes and related
government agencies. Mr. Penta's extensive expertise has allowed him to build a
significant client base. He has spent most of his life in eastern Monmouth
County. He attended Long Branch High School, Penn State University and received
a B.S. degree from Monmouth University. He is a former member of the
Congressional Award Council, a past member of the Advisory Board of Jersey Shore
Bank, past Assistant Treasurer for the Long Branch Ronald McDonald House and
served on the Board of the West Long Branch Sports Association. He is also a
member of the New Jersey Society of Certified Public Accountants and the
American Institute of Certified Public Accountants. Mr. Penta has served as a
member of the Board of Directors of Central Jersey Bancorp since January 26,
2006. Prior to the consummation of the combination of Central Jersey Bancorp and
Allaire Community Bank on January 1, 2005, he served as a member of the Board of
Directors of Monmouth Community Bancorp (the predecessor to Central Jersey
Bancorp) since its inception. Mr. Penta also has served as a member of the Board
of Directors of Central Jersey Bank, N.A. since its inception. Mr. Penta resides
in West Long Branch, New Jersey.
Mark G. Solow is a co-founder of GarMark Advisors, LLC, a firm which
manages funds for mezzanine investments in connection with leveraged buyouts,
corporate recapitalizations and growth financings. He is also a general partner
in and senior advisor for Crystal Ridge Partners, LLC, a firm which manages
funds for equity investments in middle market companies. Prior to the formation
of GarMark Advisors, LLC, Mr. Solow was a Senior Executive Vice President at
Chemical Banking Corporation and a member of its twelve person Management
Committee. At Chemical Banking Corporation, Mr. Solow was in charge of global
investment banking and corporate and multinational banking in North America,
Western Europe and Asia. In addition, he was Senior Credit Officer for the
United States, Canada, Western Europe and Asia. Mr. Solow received his B.S. and
M.B.A. degrees from Bowling Green University. Mr. Solow has served as a member
of the Board of Directors of Central Jersey Bancorp since January 1, 2005. Prior
to the consummation of the combination of Central Jersey Bancorp and Allaire
Community Bank on January 1, 2005, he served as a member of the Board of
Directors of Monmouth
14
Community Bancorp (the predecessor to Central Jersey Bancorp) since its
inception. Mr. Solow also has served as a member of the Board of Directors of
Central Jersey Bank, N.A. since its inception. Mr. Solow is also a director of
Penske Transportation Components, a company controlled by Roger Penske. Mr.
Solow resides in Manasquan, New Jersey.
James S. Vaccaro has served the President and Chief Executive Officer and
a member of the Board of Directors of Central Jersey Bancorp since January 1,
2005. Prior to the consummation of the combination of Central Jersey Bancorp and
Allaire Community Bank, N.A. on January 1, 2005, he served as Chairman of the
Board of Monmouth Community Bancorp (the predecessor to Central Jersey Bancorp)
since its inception. Mr. Vaccaro also served as the Chief Executive Officer of
Central Jersey Bank, N.A. since April 3, 2000 and the Chief Executive Officer of
Monmouth Community Bancorp since its inception. Mr. Vaccaro served in various
management capacities in the health care field from 1995 through 2000. Mr.
Vaccaro has significant experience in the banking industry. He was a member of
the Board of Directors, Executive Vice President and Chief Financial Officer of
The Central Jersey Bank & Trust Co., and, prior to his affiliation with The
Central Jersey Bank & Trust Co., was a Manager of the Asset Services Division of
Citibank, N.A. Mr. Vaccaro serves as Chair of the Board of Trustees of Monmouth
Medical Center; is a member of the Board of Trustees of Monmouth Medical Center
Foundation; is Chairman of the Business Council of Monmouth University; is a
member of the Board of Trustees of VNA of Central Jersey Community Services,
Inc.; is a member of the Board of Directors of the New Jersey Repertory Company;
is a member of the Advisory Council of Interfaith Neighbors and is a member of
the leadership cabinet of Prevention First. Mr. Vaccaro received his B.A. degree
from Ursinus College and an advanced degree from Harvard Graduate School of
Business. Mr. Vaccaro resides in West Allenhurst, New Jersey.
Robert S. Vuono has served as the Senior Executive Vice President, Chief
Operating Officer and Secretary and member of the Boards of Directors of Central
Jersey Bancorp and Central Jersey Bank, N.A. since January 1, 2005. Prior to the
consummation of the combination of Central Jersey Bancorp and Allaire Community
Bank on January 1, 2005, he served as the Senior Executive Vice President, Chief
Operating Officer, Chief Financial Officer and Secretary of Allaire Community
Bank and as a member of its Board of Directors. Prior to his employment with
Allaire Community Bank, Mr. Vuono had been the Executive Vice President of
Colonial State Bank, in Freehold, New Jersey (February 1989 to May 1996), and
Vice President of The Central Jersey Bank & Trust Co., in Freehold Township, New
Jersey (January 1974 to January 1989). Mr. Vuono holds a Bachelor of Science
Degree in Business Administration from Villanova University. Mr. Vuono resides
in Wall Township, New Jersey.
Meetings and Committees of the Board of Directors
The Board of Directors of Central Jersey Bancorp conducts business through
regularly scheduled meetings of the Board and through its committees, including
an Executive Committee, an Audit Committee, a Nominating and Corporate
Governance Committee and a Compensation Committee. The Board of Directors for
2006 consisted of: James G. Aaron, Esq., Mark R. Aikins, Esq., Nicholas A.
Alexander, C.P.A., John A. Brockriede, George S. Callas, Carl F. Chirico, James
P. Dugan, Esq., M. Claire French, William H. Jewett, Paul A. Larson, Jr., John
F. McCann, Carmen M. Penta, C.P.A., Mark G. Solow, James J. Vaccaro and Robert
S. Vuono. Prior to his retirement on August 8, 2006, Mr. Chirico served as Vice
Chairman of the Board.
15
During 2006, the Board held 12 regularly-scheduled meetings, with the 14
directors of Central Jersey Bancorp serving on the Board in 2006 attending at
least 83% of the meetings. Central Jersey Bancorp also encourages all of its
directors to attend the Annual Meeting and typically schedules a Board meeting
immediately preceding or after the Annual Meeting. Last year, all of the
directors of Central Jersey Bancorp attended the Annual Meeting and the
subsequent Board meeting.
Executive Committee
The Executive Committee of the Board of Directors, which consists of
directors George S. Callas, James G. Aaron, Esq., Mark R. Aikins, Esq., Nicholas
A. Alexander, C.P.A., John A. Brockriede, James P. Dugan, Esq., M. Claire
French, William H. Jewett, Paul A. Larson, John F. McCann, Carmen M. Penta, CPA,
Mark G. Solow, James. S. Vaccaro and Robert S. Vuono, did not meet in 2006. To
the extent permitted by law, the Executive Committee acts on behalf of the Board
of Directors in its absence and has the authority to address corporate matters
between meetings of the full Board. Generally, all major functions of Central
Jersey Bancorp are subject to the review and approval of the Executive
Committee. All significant actions of the Executive Committee must be ratified
by the full Board of Directors. James S. Vaccaro is the Chairman of the
Executive Committee and George S. Callas is the Vice Chair of the Executive
Committee.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee of the Board of
Directors, which consists of directors James G. Aaron, Esq., John A. Brockriede,
George S. Callas, William H. Jewett, Paul A. Larson and Mark G. Solow, met one
time during 2006, with all members attending at least 100% of the meetings held.
George S. Callas is the Chair of the Nominating and Corporate Governance
Committee and John A. Brockriede is the Vice Chair of the Nominating and
Corporate Governance Committee. Each member of the Nominating and Corporate
Governance Committee qualified as an independent director in accordance with the
rules of NASDAQ and the rules and regulations of the SEC. The Nominating and
Corporate Governance Committee is responsible for determining the slate of
nominees for election as directors based upon the performance criteria
established by the Nominating and Corporate Governance Committee, and may
recommend a successor to a key senior management position when a position is
vacant. In addition, the Nominating and Corporate Governance Committee has
developed a management succession policy that specifies key senior management
positions and qualified potential replacements. The Nominating and Corporate
Governance Committee adopted a Charter on August 25, 2005 (the "Nominating
Charter") in consultation with the Board of Directors. The Nominating Charter
was included as Appendix A to the proxy statement for the 2006 annual meeting of
shareholders and may be viewed at the SEC's website, www.sec.gov.
Compensation Committee
The Compensation Committee of the Board of Directors, which consists of
directors James G. Aaron, Esq., John A. Brockriede, George S. Callas, William H.
Jewett, Paul A. Larson, Jr. and Mark G. Solow, met 6 times during 2006, with all
members attending at least 83% of the meetings held, with the exception of Mark
G. Solow, who attended 67% of the meetings held. Paul A. Larson, Jr. is the
Chair of the Compensation Committee and Mark G. Solow is the Vice
16
Chair of the Compensation Committee. The Compensation Committee is responsible
for determining whether the Company's compensation and benefits packages are
suitable and do not provide excessive benefits or result in material financial
loss to Central Jersey Bancorp. The Compensation Committee is also responsible
for approving or recommending to the Board compensation packages and plans for
senior management and directors. These compensation packages include salaries,
bonuses, vacations, termination benefits, profit-sharing plans, contributions to
employee pension plans, stock option and stock purchase plans, indemnification
agreements and employment/change of control contracts.
Audit Committee
For the year ended December 31, 2006, the Audit Committee of the Board of
Directors of Central Jersey Bancorp consisted of directors Nicholas A.
Alexander, C.P.A., Mark R. Aikins, Esq., George S. Callas, James P. Dugan, Esq.,
John F. McCann, Carmen M. Penta, C.P.A., and William H. Jewett. Nicholas A.
Alexander is the Chairman of the Audit Committee and William H. Jewett is the
Vice Chair of the Audit Committee. Each member of the Audit Committee qualified
as an independent director in accordance with the rules of NASDAQ and the rules
and regulations of the SEC. In addition, the Board has determined that Nicholas
Alexander is both independent and qualifies as a financial expert by SEC rules.
The Audit Committee is responsible for developing and monitoring the audit and
loan review programs of Central Jersey Bank, N.A. The Audit Committee recommends
the loan review consultant to the Board, selects the outside auditor and meets
with the Board to discuss the results of the annual audit and quarterly loan
reviews and any related matters. The Audit Committee also receives and reviews
the reports and findings and any other information presented to members of the
Audit Committee by the officers of Central Jersey Bancorp and its bank
subsidiary regarding financial reporting policies and practices. The Audit
Committee met 5 times during the year 2006, with all members attending at least
80% of the meetings held, with the exception of James P. Dugan, Esq. and
Nicholas A. Alexander, who both attended 60% of the meetings held.
Report of the Audit Committee of the Board of Directors
Notwithstanding anything to the contrary set forth in any of Central
Jersey Bancorp's previous or future filings under the Securities Act of 1933, as
amended, or the Exchange Act, that might incorporate this Proxy Statement, in
whole or in part, the following report shall not be deemed to be incorporated by
reference into any such filing.
Audit Committee Charter
The Audit Committee developed an Audit Committee Charter (the "Charter")
in consultation with Central Jersey Bancorp's accounting and finance department,
its internal auditor and Central Jersey Bancorp's independent public
accountants. The Board amended and restated the Charter on August 25, 2005. The
Audit Committee Charter, as amended and restated, was included as Appendix B to
the proxy statement for the 2006 annual meeting of shareholders and may be
viewed at the SEC's website, www.sec.gov.
17
Review of Audited Financial Statements for the year ended December 31,
2006
The Audit Committee, as in place for 2006, has reviewed and discussed with
Central Jersey Bancorp's management the audited financial statements of Central
Jersey Bancorp for the year ended December 31, 2006. The Audit Committee has
discussed with KPMG LLP, Central Jersey Bancorp's independent public
accountants, those matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees).
The Audit Committee has also received the written disclosures and letter
from KPMG LLP required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees), and the Audit Committee has
discussed the independence of KPMG LLP with that firm.
Based on the Audit Committee's review and discussions noted above, the
Audit Committee recommended to the Board that Central Jersey Bancorp's audited
financial statements for the year ended December 31, 2006 be included in its
Annual Report on Form 10-K for the year ended December 31, 2006 and that such
Form 10-K be filed with the SEC.
Submitted by: Nicholas A. Alexander, C.P.A. (Chair) William H. Jewett
Mark R. Aikins, Esq. John F. McCann
George S. Callas Carmen M. Penta, C.P.A.
James P. Dugan, Esq.
Principal Accountant Fees and Services
Audit Fees
Central Jersey Bancorp paid a total of $234,600 in 2006 and $237,500 in
2005 to KPMG LLP for audit services, which included work related to the annual
audit and quarterly reviews rendered in 2006 and 2005, respectively. It should
be noted that of the fees incurred in 2006, $154,600 were related to the annual
audit and $80,000 were related to compliance with Section 404 of Sarbanes-Oxley
Act of 2002 (the "Sarbanes-Oxley Act") and, of the fees incurred in 2005,
$105,000 were related to the annual audit, $125,000 were related to compliance
with Section 404 of Sarbanes-Oxley Act and $7,500 were related to services in
connection with Central Jersey Bancorp's Registration Statement on Form S-8.
Audit Related Fees
There were no fees associated with audit related services.
Tax Fees
Central Jersey Bancorp paid a total of $29,000 in 2006 and $20,000 in 2005
to KPMG LLP for income tax consultation, including income tax compliance, tax
advice and tax planning.
18
All Other Fees
The Audit Committee has considered whether the non-audit services provided
by KPMG LLP, including services rendered in connection with income tax
consultation, were compatible with maintaining its independence and has
determined that the nature and substance of the limited non-audit services did
not impair the status of KPMG LLP as Central Jersey Bancorp's independent
auditors. None of the engagements of KPMG LLP, which were pre-approved by the
Audit Committee, made use of the de minimis exception to pre-approval contained
in the rules of the SEC which permit limited engagements for non-audit services
involving amounts under a specified threshold.
Policy on Pre-Approval of Audit and Permissible Non-Audit Services
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, 2006, 100% of the audit related fees,
tax related fees and other fees set forth above were approved by the Audit
Committee.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors, which consists of
directors James G. Aaron, Esq., John A. Brockriede, George S. Callas, William H.
Jewett, Paul A. Larson, Jr. and Mark G. Solow. Paul A. Larson, Jr. is the Chair
of the Compensation Committee and Mark G. Solow is the Vice Chair of the
Compensation Committee. The Compensation Committee is responsible for
determining whether the Company's compensation and benefits packages are
suitable and do not provide excessive benefits or result in material financial
loss to Central Jersey Bancorp. The Compensation Committee is also responsible
for approving or recommending to the Board compensation packages and plans for
senior management and directors. These compensation packages include salaries,
bonuses, vacations, termination benefits, profit-sharing plans, contributions to
employee pension plans, stock option and stock purchase plans, indemnification
agreements and employment/change of control contracts.
None of the members of the Compensation Committee is currently or has been
at any time an officer or employee of Central Jersey Bancorp or Central Jersey
Bank, N.A. No member of the Compensation Committee or executive officer of
Central Jersey Bancorp or Central Jersey Bank, N.A. serves as a member of the
board of directors or compensation committee of any entity that has one or more
executive officers serving as a member of the Board of Directors or Compensation
Committee of Central Jersey Bancorp or Central Jersey Bank, N.A.
19
Code of Ethics
The chief executive and senior financial officers of Central Jersey
Bancorp are held to the highest standards of honest and ethical conduct when
conducting the affairs of Central Jersey Bancorp. All such individuals must act
ethically at all times in accordance with the policies contained in Central
Jersey Bancorp's Chief Executive and Senior Financial Officer Code of Ethics. A
copy of the Chief Executive and Senior Financial Officer Code of Ethics may be
viewed on Central Jersey Bancorp's website at www.cjbna.com.
20
EXECUTIVE OFFICERS
The name, age, current position and biographical information of each
executive officer of Central Jersey Bancorp is set forth below:
Name and Address Age Capacities in Which Served
- ---------------- --- --------------------------
James S. Vaccaro 50 President and Chief Executive Officer
Robert S. Vuono 57 Senior Executive Vice President, Chief
Operating Officer and Secretary
Anthony Giordano, III 41 Executive Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary
Robert K. Wallace 59 Executive Vice President and Senior
Commercial Lending Officer
Thomas J. Garrity 47 Executive Vice President and Commercial
Lending Officer
Biographical Information
For the biographical information for James S. Vaccaro and Robert S. Vuono,
see "Board of Directors," below.
Anthony Giordano, III has served as the Executive Vice President, Chief
Financial Officer, Treasurer and Assistant Secretary of Central Jersey Bancorp
since January 1, 2005. Prior to the consummation of the combination of Central
Jersey Bancorp and Allaire Community Bank on January 1, 2005, he served as an
Executive Vice President and the Chief Financial Officer and Treasurer and
Secretary of Monmouth Community Bancorp (the predecessor to Central Jersey
Bancorp) since May 1998. Mr. Giordano has also served in various capacities for
Central Jersey Bank, N.A. (formerly Monmouth Community Bank, N.A.) since May
1998, and currently serves as its Executive Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary. Mr. Giordano has 19 years of
financial analysis and accounting experience in the banking industry. Prior to
joining Central Jersey Bank, N.A., Mr. Giordano was employed by PNC Bank
(formerly Midlantic Bank), where he served as Real Estate Banking Officer from
1996 to 1998 and Senior Accountant/Financial Analyst from 1994 to 1996. From
1988 to 1994, Mr. Giordano served in various positions at Shadow Lawn Savings
Bank, including Budget and Financial Planning Manager and Financial Analyst. Mr.
Giordano currently serves as a member of the Board of Directors of Scivanta
Medical Corporation, a publicly traded company which focuses on the development
and acquisition of medical devices and products, and is the Chairman of Scivanta
Medical Corporation's Audit Committee. Mr. Giordano received a Masters of
Business Administration from Monmouth University in 1992 and a Bachelor of
Science degree in finance from Kean University in 1987. Mr. Giordano graduated
from the Real Estate Institute at Monmouth University in 2000. Mr. Giordano has
served on the Long Branch City Council since 1994. Mr. Giordano resides in Long
Branch, New Jersey.
21
Robert K. Wallace has served as Executive Vice President and Senior
Commercial Lending Officer of Central Jersey Bank, N.A. since May 2006. Mr.
Wallace previously served as Executive Vice President of Commercial Lending of
Central Jersey Bank, N.A. following the combination of Central Jersey Bancorp
and Allaire Community Bank on January 1, 2005. Prior to the combination of the
two banking entities, Mr. Wallace had served as Executive Vice President and
Senior Loan Officer of Allaire Community Bank since joining Allaire Community
Bank in March 1997. Prior to March 1997, Mr. Wallace, who is a 37 year veteran
of the banking industry, served as Regional Vice President, Commercial Real
Estate Lending, with the former Summit Bank from 1995 to 1997; Vice President,
Commercial Real Estate Lending, with the former Central Jersey Bank and Trust
Co. from 1993 to 1995; and First Senior Vice President, Commercial Lending, with
the former National Community Bank of New Jersey from 1982 to 1993. Mr. Wallace
received a Bachelor of Arts degree in Economics from Upsala College in 1970 and
graduated from the Stonier Graduate School of Banking in 1986. Mr. Wallace
resides in Brick, New Jersey.
Thomas J. Garrity has served as Executive Vice President and Commercial
Lending Officer of Central Jersey Bank, N.A. since October 2005. Mr. Garrity
previously served as Senior Vice President of Central Jersey Bank, N.A.
following the combination of Central Jersey Bancorp and Allaire Community Bank
on January 1, 2005. Prior to the combination of the two banking entities, Mr.
Garrity had served as Senior Vice President of Allaire Community Bank since
joining Allaire Community Bank in March 2001. Prior to 2001, Mr. Garrity held
various commercial lending positions with Community Bank of New Jersey from to
1997 to 2001, the former Central Jersey Bank and Trust Co. from 1991 to 1997,
NatWest Bancorp Real Estate Recovery Division from 1990 to 1991 and Midlantic
National Bank Commercial Real Estate Group from 1985 to 1990. Mr. Garrity is
also a member of the Risk Management Association, Habitat for Humanity and NJ
Shore Builders Association. Mr. Garrity received a Bachelor of Arts degree in
Government Administration from Shippensburg University of Pennsylvania in 1983.
Mr. Garrity resides in Ewing, New Jersey.
22
Compensation Discussion and Analysis
The following compensation discussion and analysis presents information
regarding the compensation of our senior executives, including the process for
determining the total compensation of our Chief Executive Officer and other
Named Executive Officers for whom compensation is disclosed in the tables below.
Our executive compensation program and structure is established and overseen by
the Compensation Committee of the Board of Directors.
Compensation Objectives and Policies
The objective of our executive compensation program is to enhance Central
Jersey Bancorp's long-term profitability by providing compensation that will
attract and retain superior talent, reward performance and align the interests
of the executive officers with the long-term interests of our shareholders.
The Compensation Committee is responsible for ensuring that compensation
and benefit packages provided are suitable and are not excessive. The
Compensation Committee generally approves or recommends to the Board
compensation packages or plans for senior management and directors. These
compensation and benefit packages may include salaries, bonuses, vacations,
termination benefits, contribution to employee pension plans, stock option and
stock purchase plans, indemnification agreements and employment/change of
control contracts.
When reviewing compensation arrangements for a member or members of senior
management and directors, the Compensation Committee shall consider the
following matters:
(a) The combined value of all cash and non-cash benefits provided
to the individual or individuals;
(b) The compensation history of the individual or individuals as
compared to other individuals with comparable expertise at
Central Jersey Bancorp;
(c) The financial condition of Central Jersey Bancorp;
(d) Comparable compensation practices at similar institutions,
based upon factors such as asset size, geographic location and
the services provided;
(e) The projected total cost and benefit to Central Jersey Bancorp
for post employment benefits; and
(f) Any connection between the individual and any fraudulent act
or omission, breach of trust or fiduciary duty or insider
abuse with regard to Central Jersey Bancorp.
Elements of the Executive Compensation Program
Base Salary
Base salary levels for Central Jersey Bancorp's executive officers are
competitively set
23
relative to companies in peer businesses. In reviewing base
salaries, the Compensation Committee also takes into account individual
experience and past performance.
James S. Vaccaro served as Central Jersey Bancorp's President and Chief
Executive Officer for the year ended December 31, 2006. Mr. Vaccaro's base
salary is set competitively relative to other chief executive officers in
financial service companies of similar asset size to Central Jersey Bancorp. In
determining Mr. Vaccaro's base salary as well as annual performance bonus, the
Compensation Committee reviewed independent compensation data and Central Jersey
Bancorp's performance as compared against budgets and peer businesses. As with
Central Jersey Bancorp's other executive officers, Mr. Vaccaro's total
compensation involves certain subjective judgments and is not based solely upon
any specific objective criteria or weighting.
Bonus Awards
Central Jersey Bancorp's annual performance bonuses are intended to
provide a direct cash incentive to executive officers and other key employees
for a variety of performance measures. A variety of financial performance
indicators (i.e. results of operations, core deposit growth, commercial and
consumer loan growth, etc.) are compared against budgets as well as peer
businesses.
Equity Compensation
Central Jersey Bancorp's Equity Incentive Plan (see "Securities Authorized
for Issuance under Equity Compensation Plans") is designed to encourage and
enable employees and directors of Central Jersey Bancorp to acquire or increase
their holdings of Common Stock and other proprietary interests in Central Jersey
Bancorp. It is intended to promote these individual's interests in the company
thereby enhancing the efficiency, soundness, profitability, growth and
shareholder value of Central Jersey Bancorp.
Under the Equity Incentive Plan, incentive and nonqualified stock options
may be granted to eligible employees and/or employee-directors and nonqualified
stock options may be granted to eligible non-employee directors. In addition,
pursuant to the Equity Incentive Plan, participants may be eligible to receive,
under certain conditions, stock appreciation rights in the form of related stock
appreciation rights and freestanding stock appreciation rights, restricted
awards in the form of restricted stock awards and restricted stock units,
performance awards in the form of performance share awards and performance unit
awards, phantom stock awards and dividend equivalent awards.
For the year ended December 31, 2006, James S. Vaccaro received a grant of
15,750 SARs under the Equity Incentive Plan, Anthony Giordano, III received a
grant of 7,875 SARs under the Equity Incentive Plan and Robert S. Vuono received
a grant of 13,125 SARs under the Equity Incentive Plan. The aforementioned
grants have been adjusted to account for the 5% stock distribution made to the
shareholders of Central Jersey Bancorp on July 1, 2006. The SARs were granted in
order to create the appropriate alignment of incentives between corporate
performance and the recognition of that performance through long term
compensation awards. It was decided by the Compensation Committee of the Board
of Directors that a chosen grant date
24
was simply a timing issue and that the award price would be equal to the market
value of the underlying stock as of the date of the award. By utilizing such a
pricing mechanism, the future monetary value of the grant would have a direct
correlation to the performance of the underlying stock.
Perquisites
Central Jersey Bancorp's Named Executive Officers are provided a limited
number of perquisites. An item is not a perquisite if it is integrally and
directly related to the performance of the executive's duties. An item is a
perquisite if it confers a direct or indirect benefit that has a personal
aspect, without regard to whether it may be provided for some business reason or
for the convenience of the Company, unless it is generally available on a
non-discriminatory basis to all employees.
For the fiscal year ended December 31, 2006, Central Jersey Bancorp
provided a nominal amount of perquisites to its executives. As a fair amount of
Mr. Vaccaro's time is spent traveling for business purposes (e.g. customer
calls, branch visits, department visits, etc.), the Board of Directors thought
it appropriate to provide Mr. Vaccaro with the use of a company automobile.
Benefits
The Named Executive Officers participate in a variety of retirement,
health and welfare, and paid time-off benefits available to all employees of
Central Jersey Bancorp and Central Jersey Bank, N.A., which are designed to
enable the company to attract and retain its workforce in a competitive
marketplace. Health and welfare and paid time-off benefits help ensure that
Central Jersey Bancorp has a productive and focused workforce. Savings plans
help employees, especially long-service employees, save and prepare financially
for retirement. Central Jersey Bancorp also offers eligible employees the
opportunity to save for retirement through the company's 401(k) plan. Enrollment
commences on the first of the month following three months of continuous
service. The 401(k) plan allows an employee to elect how much salary the
individual wants to contribute within plan limits, and direct the investment of
the plan account to meet the individual's needs. Central Jersey Bancorp will
match a portion of the employee's contributions on a bi-weekly basis in an
amount determined by the Board of Directors on an annual basis. Effective
January 1, 2007, Central Jersey Bancorp adopted a safe-harbor plan design which
provides the following match: 100% of the first 3% deferred and another 50% of
the next 2% deferred; and fully vests all plan participants for existing and
prospective matching contributions.
Change of Control Agreements
Central Jersey Bancorp has separate change of control agreements with each
of James S. Vaccaro, Robert S. Vuono, Anthony Giordano, III, each entered into
on August 1, 2006. Each agreement is effective as of August 1, 2006, and will
continue in full force and effect for so long as the executive party to the
agreement is employed by Central Jersey Bancorp and/or Central Jersey Bank, N.A.
Central Jersey Bancorp also has separate change of control agreements with each
of Robert K. Wallace, effective as of January 1, 2005, and Thomas J. Garrity,
effective as
25
of February 21, 2007, each of which will continue in full force and effect for
so long as the executive is employed by Central Jersey Bancorp and/or Central
Jersey Bank, N.A. See discussion under "Potential Payments to Named Executive
Officers Upon Termination of Employment or Change of Control" below.
Deductibility of Compensation
The Internal Revenue Code of 1986, as amended (the "Code"), restricts
deductibility of annual individual compensation to its top executive officers in
excess of $1 million if certain conditions set forth in the Code are not fully
satisfied. Central Jersey Bancorp intends, to the extent practicable, to
preserve deductibility under the Code of compensation paid to its executive
officers while maintaining compensation programs that effectively attract and
retain exceptional executives in a highly competitive environment. Accordingly,
compensation paid is generally tax-deductible. However, on occasion it may not
be possible to satisfy all conditions of the Code for deductibility and still
meet Central Jersey Bancorp's compensation needs, and in such limited
situations, certain compensation paid to some executives may not be
tax-deductible.
Compensation Committee Report
The Compensation Committee has discussed and reviewed the foregoing
Compensation Discussion and Analysis with management. Based upon this review and
discussion, the Compensation Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this Proxy
Statement.
Submitted by: Paul A. Larson, Jr. (Chair) George S. Callas
James G. Aaron, Esq. William H. Jewett
John A. Brockriede Mark G. Solow
26
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and
long-term compensation of the Named Executive Officers for services in all
capacities to Central Jersey Bancorp and Central Jersey Bank, N.A. for the year
ended December 31, 2006. The Named Executive Officers are the (1) President and
Chief Executive Officer, (2) Executive Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary, (3) Senior Executive Vice President, Chief
Operating Officer and Secretary, (4) Executive Vice President and Senior Loan
Officer, and (5) Executive Vice President and Commercial Loan Officer, of
Central Jersey Bancorp, whose names are set forth in the table below (the "Named
Executive Officers").
Change in
Pension Value
and
Non-Equity Nonqualified
Stock Option Incentive Plan Deferred All Other
Name and Salary Awards Awards Compensation Compensation Compensation
Principal Position Year ($) Bonus ($) ($) ($)(1)(2) ($) Earnings ($) ($) Total ($)
- -----------------------------------------------------------------------------------------------------------------------------------
James S. Vaccaro, 2006 $ 250,000 $ 27,500 $ --- $ 58,118 $ --- $ --- $ 11,738(3) $ 347,356
President and
Chief Executive
Officer
Anthony Giordano, 2006 $ 122,000 $ 15,000 $ --- $ 29,059 $ --- $ --- $ 5,433(4) $ 171,492
III,
Executive Vice
President, Chief
Financial Officer,
Treasurer and
Assistant Secretary
Robert S. Vuono, 2006 $ 160,000 $ 20,000 $ --- $ 48,431 $ --- $ --- $ 9,019(5) $ 237,450
Senior Executive
Vice President,
Chief Operating
Officer and
Secretary
Robert K. Wallace, 2006 $ 150,000 $ 10,000 $ --- $ 19,373 $ --- $ --- $ 8,196(6) $ 187,569
Executive Vice
President and
Senior Commercial
Lending Officer
Thomas J. Garrity, 2006 $ 130,000 $ 8,000 $ --- $ 38,745 $ --- $ --- $ 5,155(7) $ 181,900
Executive Vice
President and
Commercial Lending
Officer
____________________
(1) Represents SARs granted on February 1, 2006 under the Equity Incentive
Plan, each with an exercise price of $10.36. These SARs can only be
settled in cash. The SARs vest over a four year period and expire on
February 1, 2016. The fair value of SARs granted was estimated on December
31, 2006 using the Black-Scholes option pricing model with the following
weighted-average assumptions used: stock price $8.30, dividend yield of
0%; expected volatility of 41.17%; risk free interest rate of 4.70%; and
expected lives of seven years. These SARS had a fair value of
approximately $3.69 per share at December 31, 2006.
27
(2) These amounts have been adjusted, as appropriate, to account for the 5%
stock distribution made to the shareholders of Central Jersey Bancorp on
July 1, 2006.
(3) Of this amount, $2,938 represents the lease value of an automobile
provided to Mr. Vaccaro for business use, $414 represents the amount
contributed by Central Jersey Bank, N.A. to Group Term Life Insurance for
Mr. Vaccaro's benefit and $8,800 represents the amount contributed by
Central Jersey Bank, N.A. to its 401(k) plan for the benefit of Mr.
Vaccaro.
(4) Of this amount, $86 represents the amount contributed by Central Jersey
Bank, N.A. to Group Term Life Insurance and $5,347 represents the amount
contributed by Central Jersey Bank, N.A. to its 401(k) plan for the
benefit of Mr. Giordano.
(5) Of this amount, $577 represents the amount contributed by Central Jersey
Bank, N.A. to Group Term Life Insurance, $1,264 represents the amount
contributed by Central Jersey Bank, N.A. pursuant to a bank owned life
insurance (BOLI) contract and $7,178 represents the amount contributed by
Central Jersey Bank, N.A. to its 401(k) plan for the benefit of Mr. Vuono.
(6) Of this amount, $516 represents the amount contributed by Central Jersey
Bank, N.A. to Group Term Life Insurance, $1,515 represents the amount
contributed by Central Jersey Bank, N.A. pursuant to a bank owned life
insurance (BOLI) contract and $6,165 represents the amount contributed by
Central Jersey Bank, N.A. to its 401(k) plan for the benefit of Mr.
Wallace.
(7) Of this amount, $144 represents the amount contributed by Central Jersey
Bank, N.A. to Group Term Life Insurance, $88 represents the amount
contributed by Central Jersey Bank, N.A. pursuant to a bank owned life
insurance (BOLI) contract and $5,023 represents the amount contributed by
Central Jersey Bank, N.A. to its 401(k) plan for the benefit of Mr.
Garrity.
28
Grants of Plan Based Awards
The following table shows information about awards made under the Equity
Incentive Plan during the year ended December 31, 2006:
Grants of Plan-Based Awards
for Fiscal Year End December 31, 2006
-------------------------------------
All
Other
Stock All
Awards: Other
Number Option
of Awards:
Shares Number Exercise Grant
Estimated Future Payouts Under Estimated Future Payouts Under of of or Base Date Fair
Non-Equity Incentive Plan Equity Incentive Plan Awards Stock Shares Price of Value of
------------------------------- ---------------------------------- or of Stock Option Stock and
Grant Threshold Target Maximum Threshold Target Maximum Units or Units Awards Option
Name Date ($) ($) ($) (#) (#)(1)(2)(3) (#) (#) (#) ($/Sh)(1) Awards(1)
- -----------------------------------------------------------------------------------------------------------------------------------
James S. 2/1/06 -- -- -- -- 15,750(4) -- -- -- $10.36 $3.69
Vaccaro
Anthony 2/1/06 -- -- -- -- 7,875(5) -- -- -- $10.36 $3.69
Giordano,
III
Robert S. 2/1/06 -- -- -- -- 13,125(6) -- -- -- $10.36 $3.69
Vuono
Robert K. 2/1/06 -- -- -- -- 5,250(7) -- -- -- $10.36 $3.69
Wallace
Thomas J. 2/1/06 -- -- -- -- 10,500(8) -- -- -- $10.36 $3.69
Garrity
(1) Represents SARs granted on February 1, 2006 under the Equity Incentive
Plan, each with an exercise price of $10.36. The SARs vest over a four
year period and expire on February 1, 2016. The fair value of SARs granted
was estimated on December 31, 2006 using the Black-Scholes option pricing
model with the following weighted-average assumptions used: stock price
$8.30, dividend yield of 0%; expected volatility of 41.17%; risk free
interest rate of 4.70%; and expected lives of seven years. These SARS had
a fair value of approximately $3.69 per share at December 31, 2006.
(2) These SARs can only be settled in cash. The amount to be received by the
holder thereof is dependant on the market price of Central Jersey
Bancorp's common stock on the date of exercise of such SAR.
(3) These amounts have been adjusted, as appropriate, to account for the 5%
stock distribution made to the shareholders of Central Jersey Bancorp on
July 1, 2006.
(4) 3,938, or 25%, of the 15,750 SARs became exercisable on February 1, 2007
and thereafter become exercisable on February 1, 2008, 2009 and 2010,
respectively.
(5) 1,969, or 25%, of the 7,875 SARs became exercisable on February 1, 2007
and thereafter become exercisable on February 1, 2008, 2009 and 2010,
respectively.
(6) 3,281 or 25%, of the 13,125 SARs became exercisable on February 1, 2007
and thereafter become exercisable on February 1, 2008, 2009 and 2010,
respectively.
(7) 1,313 or 25%, of the 5,250 SARs became exercisable on February 1, 2007 and
thereafter become exercisable on February 1, 2008, 2009 and 2010,
respectively.
(8) 2,625 or 25%, of the 10,500 SARs became exercisable on February 1, 2007
and thereafter become exercisable on February 1, 2008, 2009 and 2010,
respectively.
29
Outstanding Equity Awards at Fiscal Year-End
The following table provides information about all equity compensation
awards held by the Named Executive Officers at December 31, 2006. Unless
otherwise indicated, the number of securities provided in the table represent
stock options.
Outstanding Equity Awards
for Fiscal Year End December 31, 2006
--------------------------------------
Option Awards
--------------------------------------------------------------------------------------
Equity
Incentive
Plan
Number of Number of Awards:
Securities Securities Number of
Underlying Underlying Securities
Unexercised Unexercised Underlying
Options Options Unexercised Option
(#) (#) Unearned Exercise Option
Date of Exercisable Unexercisable Options Price Expiration
Name Grant (1) (1) (#) ($)(1) Date
- ------------------------------------------------------------------------------------------------------
James S. 2/1/06 3,938(2) 11,812(2) -- $10.36 2/1/16
Vaccaro 12/1/03 66,150 -- -- $ 9.45 12/1/13
12/31/02 13,230 -- -- $ 5.56 12/31/12
8/31/01 58,340 -- -- $ 3.64 8/31/11
Anthony 2/1/06 1,969(3) 5,906(3) -- $10.36 2/1/16
Giordano, 12/1/03 19,845 -- -- $ 9.45 12/1/13
III 12/31/02 6,615 -- -- $ 5.56 12/31/12
8/31/01 11,670 -- -- $ 3.64 8/31/11
8/31/00 12,254 -- -- $ 3.51 8/31/10
Robert S. 2/1/06 3,281(4) 9,844(4) -- $10.36 2/1/16
Vuono 2/26/03 1,657 -- -- $ 8.33 2/25/13
4/1/02 3,473 -- -- $ 3.74 4/1/12
7/25/01 23,268 -- -- $ 4.21 7/25/12
7/25/01 23,268 -- -- $ 4.21 7/25/11
5/22/00 11,808 -- -- $ 3.00 5/22/10
5/22/00 14,994 -- -- $ 3.00 5/22/10
12/20/99 13,401 -- -- $ 3.27 12/20/09
Robert K. 2/1/06 1,312(5) 3,938(5) -- $10.36 2/1/16
Wallace 2/26/03 922 -- -- $ 8.33 2/26/13
4/1/02 1,736 -- -- $ 3.74 4/1/12
7/25/01 7,814 -- -- $ 4.21 7/25/12
7/25/01 7,814 -- -- $ 4.21 7/25/11
5/22/00 6,746 -- -- $ 3.00 5/22/10
5/22/00 8,569 -- -- $ 3.00 5/22/10
12/20/99 5,743 -- -- $ 3.27 12/20/09
Stock Awards
------------------------------------------------
Equity
Incentive
Market Equity Plan
Value Incentive Awards:
of Plan Market or
Shares Awards: Payout
Number or Number of Value of
of Units Unearned Unearned
Shares of Shares, Shares,
or Units Stock Units or Units or
of Stock That Other Other
That Have Rights Rights
Have Not Not That Have That Have
Vested Vested Not Vested Not Vested
Name (#) ($) (#) ($)
- ---------------------------------------------------------------
James S. -- -- -- --
Vaccaro -- -- -- --
-- -- -- --
-- -- -- --
Anthony -- -- -- --
Giordano, -- -- -- --
III -- -- -- --
-- -- -- --
-- -- -- --
Robert S. -- -- -- --
Vuono -- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
Robert K. -- -- -- --
Wallace -- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
30
Outstanding Equity Awards
for Fiscal Year End December 31, 2006
--------------------------------------
Option Awards
--------------------------------------------------------------------------------------
Equity
Incentive
Plan
Number of Number of Awards:
Securities Securities Number of
Underlying Underlying Securities
Unexercised Unexercised Underlying
Options Options Unexercised Option
(#) (#) Unearned Exercise Option
Name Date of Exercisable Unexercisable Options Price Expiration
Grant (1) (1) (#) ($)(1) Date
- ----------------------------------------------------------------------------------------------------
Thomas J. 2/1/06 2,625(6) 7,875 (6) -- $10.36 2/1/16
Garrity 2/26/03 476 -- -- $ 8.33 2/26/13
2/25/03 518 -- -- $ 8.33 2/26/13
6/5/02 1,041 -- -- $ 3.74 6/5/12
11/26/01 1,736 -- -- $ 4.00 11/28/11
7/25/01 2,344 -- -- $ 4.21 7/25/12
7/25/01 2,344 -- -- $ 4.21 7/25/11
Stock Awards
------------------------------------------------
Equity
Incentive
Market Equity Plan
Value Incentive Awards:
of Plan Market or
Shares Awards: Payout
Number or Number of Value of
of Units Unearned Unearned
Shares of Shares, Shares,
or Units Stock Units or Units or
of Stock That Other Other
That Have Rights Rights
Have Not Not That Have That Have
Vested Vested Not Vested Not Vested
Name (#) ($) (#) ($)
- ---------------------------------------------------------------
Thomas J. -- -- -- --
Garrity -- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
(1) The shares have been adjusted, as appropriate, to account for the 5% stock
distributions made to the shareholders of Central Jersey Bancorp on July
1, 2006 and December 31, 2003, 2002, 2001 and 2000, respectively, the 6
for 5 stock split in the form of a stock dividend effected as of July 15,
2004, and the 2 for 1 stock split in the form of a stock dividend effected
as of June 15, 2005. The shares have also been adjusted as appropriate to
account for 5% stock distributions made to the former shareholders of
Allaire Community Bank on February 28, 1999, September 29, 2000, May 21,
2001, April 24, 2002, and June 7, 2004, and the 3 for 2 stock split
effected as of February 11, 2003.
(2) Represents SARs granted under the Equity Incentive Plan. 3,938, or 25%, of
the 15,750 SARs became exercisable on February 1, 2007 and thereafter
become exercisable on February 1, 2008, 2009 and 2010, respectively.
(3) Represents SARs granted under the Equity Incentive Plan. 1,969, or 25%, of
the 7,875 SARs became exercisable on February 1, 2007 and thereafter
become exercisable on February 1, 2008, 2009 and 2010, respectively.
(4) Represents SARs granted under the Equity Incentive Plan. 3,281 or 25%, of
the 13,125 SARs became exercisable on February 1, 2007 and thereafter
become exercisable on February 1, 2008, 2009 and 2010, respectively.
(5) Represents SARs granted under the Equity Incentive Plan. 1,313, or 25%, of
the 5,250 SARs became exercisable on February 1, 2007 and thereafter
become exercisable on February 1, 2008, 2009 and 2010, respectively.
(6) Represents SARs granted under the Equity Incentive Plan. 2,625, or 25%, of
the 10,500 SARs became exercisable on February 1, 2007 and thereafter
become exercisable on February 1, 2008, 2009 and 2010, respectively.
There were no stock options or SARS exercised by any of the Named
Executive Officers during the year ended December 31, 2006.
31
Potential Payments to Named Executive Officers Upon Termination of Employment or
Change in Control
On August 1, 2006, Central Jersey Bancorp entered into a change of control
agreement (each an "Agreement" and, collectively, the "Agreements") with each of
James S. Vaccaro, Robert S. Vuono and Anthony Giordano, III (each an
"Executive"). Each Agreement is effective as of August 1, 2006 (the "Effective
Date"), and will continue in full force and effect for so long as the Executive
party to the Agreement is employed by Central Jersey Bancorp and/or Central
Jersey Bank, N.A.
In the event that either (1) the Executive is terminated without Cause (as
defined below) in connection with (A) a merger of Central Jersey Bancorp where
Central Jersey Bancorp is not the surviving entity, (B) the acquisition of
greater than 50% of Central Jersey Bancorp's voting stock by an entity or group
of individuals other than the shareholders of Central Jersey Bancorp as of the
Effective Date, (C) the sale or disposition of all or substantially all of
Central Jersey Bancorp's assets, or (D) the determination by the Board of
Directors of Central Jersey Bancorp that a change of control has occurred or is
about to occur (each a "Change of Control Event"), or (2) a Change of Control
Event occurs and the Executive is not retained by the successor entity or group
(the "Successor Entity") for a period of at least 36 months (30 months for Mr.
Giordano) commencing on the effective date of the Change of Control Event
pursuant to a written agreement containing the provisions described below (the
"New Agreement"), the Executive shall be entitled to severance from Central
Jersey Bancorp.
For purposes of each Agreement and any New Agreement, "Cause" shall mean
as follows: (1) the Executive willfully, or as a result of gross negligence on
his part, fails substantially to (A) carry out the lawful policies of Central
Jersey Bancorp's Board of Directors or the Successor Entity's governing body or
(B) discharge his duties and responsibilities as an Executive of Central Jersey
Bancorp and Central Jersey Bank, N.A. or the Successor Entity for any reason
other than the Executive's disability, (2) the Executive is convicted of or
enters a plea of no contest with respect to a felony, (3) the Executive engages
in conduct which is demonstrably and substantially injurious to Central Jersey
Bancorp or the Successor Entity, (4) the Executive materially breaches the
Agreement or New Agreement, or commits any deliberate and intentional violation
of the confidentiality and non-compete provisions of the Agreement or New
Agreement, or (5) the Executive commits willful or intentional misconduct that
has a material adverse effect on Central Jersey Bancorp or Central Jersey Bank,
N.A. or the Successor Entity.
In addition to the foregoing, in the event an Executive's employment is
terminated without Cause in connection with any acquisition by Central Jersey
Bancorp of any bank, bank holding company or other similar institution (the
"Acquisition"), and the Acquisition does not constitute a Change of Control
Event, the Executive shall nevertheless be entitled to receive severance from
Central Jersey Bancorp, which shall be payable in-full by Central Jersey Bancorp
within 10 business days after the effective date of the termination of
Executive's employment without Cause.
Both Mr. Vaccaro and Mr. Vuono are entitled to 30 months severance, and
Mr. Giordano 24 months severance. The amount of severance payable to an
Executive will be based upon his
32
monthly salary in effect at the time of the Change of Control Event or the
Acquisition, a percentage of the previous cash bonus payments made to him and
the cash equivalent of the monthly benefits provided to him at the time of the
Change of Control Event or the Acquisition. The Executive shall only be entitled
to such severance if he agrees to remain as an employee of Central Jersey
Bancorp and assist in the transition until the effective date of the Change of
Control Event. In the event that the Executive is to receive severance, the
severance shall be payable in-full by Central Jersey Bancorp within 10 business
days after the effective date of the Change of Control Event.
A New Agreement with a Successor Entity discussed above must provide that
the Executive shall have (1) the same or substantially equal position with
similar title and responsibilities and the same or greater salary, benefits and
bonuses that the Executive was entitled to receive from Central Jersey Bancorp
immediately prior to the Change of Control Event, and (2) a commuting distance
that is not greater than 30 miles from the Executive's current residence. The
New Agreement also must provide that if the Executive accepts employment with
the Successor Entity as of the effective date of the Change of Control Event and
the Executive (x) is terminated by the Successor Entity without Cause during the
36 month period (30 month period for Mr. Giordano) commencing on the effective
date of the Change of Control Event or (y) dies, becomes disabled or voluntarily
terminates his employment with the Successor Entity for any reason during the 30
month period (24 month period for Mr. Giordano) commencing on the 6 month
anniversary of the effective date of the Change of Control Event (the "6 Month
Anniversary Date"), the Executive shall be entitled to severance (as defined the
Agreements) from the Successor Entity.
If the Executive's employment is terminated by the Successor Entity as
provided in subpart (x) in the preceding paragraph, he shall receive severance
for the number of months equal to the remainder of 30 months (24 months for Mr.
Giordano) less the number of whole months Executive was employed by the
Successor Entity following the 6 Month Anniversary Date. If the Executive's
employment is terminated by the Successor Entity as provided in subpart (x)
above prior to the 6 Month Anniversary Date, however, the Executive shall
receive 30 months (24 months for Mr. Giordano) severance. If the Executive dies,
becomes disabled or terminates his employment with the Successor Entity as
provided in subpart (y) in the preceding paragraph, he shall receive severance
for the number of months equal to the remainder of 30 months (24 months for Mr.
Giordano) less the number of whole months the Executive was employed by the
Successor Entity following the 6 Month Anniversary Date. In no event shall
Executive be entitled to receive less than 6 months severance. The Executive
shall not be entitled to any severance, however, if he terminates his employment
with the Successor Entity as provided in subpart (y) above prior to the 6 Month
Anniversary Date for any reason other than death or disability. Any severance
shall be payable in-full within 10 business days after the termination of
Executive's employment with the Successor Entity unless the Executive and the
Successor Entity otherwise agree to another payment schedule. The Executive
shall not be entitled to any severance should his employment with the Successor
Entity terminate for any reason after the expiration of the 36 month period (30
month period for Mr. Giordano) commencing on the effective date of the Change of
Control Event.
33
In consideration for the right to receive the severance provided for in an
Agreement, each Agreement also contains customary non-competition and
non-solicitation provisions applicable to the Executive party to the Agreement.
In addition, Central Jersey Bancorp entered into a change of control
agreement with Robert K. Wallace, effective as of January 1, 2005, which will
continue in full force and effect for so long as Mr. Wallace is employed by
Central Jersey Bancorp and/or Central Jersey Bank, N.A.
In the event that (1) Mr. Wallace is terminated without cause as a result
of (A) a merger of Central Jersey Bancorp where Central Jersey Bancorp is not
the surviving entity, or (B) the acquisition of greater than 85% of Central
Jersey Bancorp's common stock by another entity or group of individuals (each a
"Triggering Event"), or (2) a Triggering Event occurs and Mr. Wallace is not
retained pursuant to a written agreement by the successor entity or group (the
"Acquiring Entity") for a period of at least 18 months commencing on the
effective date of the Triggering Event in the same or substantially equal
position with similar title and responsibilities and the same or greater salary,
benefits and bonuses that Mr. Wallace was entitled to receive from Central
Jersey Bancorp immediately prior to the Triggering Event, and with a reasonable
commuting distance not greater than 5 miles from Mr. Wallace's residence, Mr.
Wallace will be entitled to 18 months of Severance (as defined below) from
Central Jersey Bancorp.
"Severance" means Mr. Wallace's monthly salary and benefits at the time
his employment relationship with Central Jersey Bancorp terminates, including
any life insurance maintained on Mr. Wallace's life for his named beneficiaries,
health insurance benefits for Mr. Wallace and his family and any matching
contributions to his 401(k) account. Mr. Wallace shall only be entitled to such
Severance if he remains as an employee of Central Jersey Bancorp and provides
reasonable assistance to Central Jersey Bancorp through the effective date of
the Triggering Event. The 18 months of Severance shall be payable on the
effective date of the Triggering Event.
In addition to the provisions discussed above with regard to
responsibilities, title, salary, benefits and commuting distance, the agreement
with the Acquiring Entity will provide that in the event that, prior to the
expiration of the 18 month period commencing on the effective date of the
Triggering Event, Mr. Wallace (1) is terminated by the Acquiring Entity without
cause, or (2) voluntarily terminates his employment with the Acquiring Entity,
Mr. Wallace shall be entitled to receive Severance from the Acquiring Entity,
for the number of months equal to the difference of (A) 18 months and (B) the
number of whole months Mr. Wallace was employed by the Acquiring Entity
following the date of the Triggering Event; provided, however, that in no event
shall Mr. Wallace be entitled to less than 12 months of Severance.
In consideration for the right to receive the Severance provided for in
Mr. Wallace's change of control agreement, the agreement also contains customary
non-competition and non- solicitation provisions applicable to Mr. Wallace.
On February 21, 2007, Central Jersey Bancorp entered into a change of
control agreement with Thomas J. Garrity which will continue in full force and
effect for so long as Mr. Garrity is employed by Central Jersey Bancorp and/or
Central Jersey Bank, N.A. Pursuant to the
34
terms of such change of control agreement, which has similar terms and
conditions to those change of control agreements entered into by Mr. Vaccaro,
Mr. Vuono and Mr. Giordano, respectively, Mr. Garrity is entitled to 12 months
of severance, payable in equal bi-weekly installments. For purposes of Mr.
Garrity's change of control agreement, "severance" means (1) an amount equal to
the product of Mr. Garrity's monthly salary in effect at the time of the Change
of Control Event multiplied by 12, plus (2) an amount equal to the largest
annual cash bonus payment made to Mr. Garrity for services provided in any of
the three years ended on December 31 of the year preceding the year in which the
Change of Control Event occurs, plus (3) an amount equal to the product of the
cash equivalent of the monthly benefits provided to Mr. Garrity at the time of
the Change of Control Event multiplied by 12.
In consideration for the right to receive such severance, the change of
control agreement also contains customary non-competition and non-solicitation
provisions applicable to Mr. Garrity. However, if Mr. Garrity directly or
indirectly commences employment with or render services to any other bank or
banking institution within the State of New Jersey after 3 months but prior to 6
months from the date of any termination of Mr. Garrity's employment, Central
Jersey Bancorp's obligation to pay any severance to Mr. Garrity shall cease as
of the date he is employed by or renders services to any such bank or banking
institution. Moreover, if Mr. Garrity solicits, diverts or takes away, or
attempts to solicit, divert or take away, the business or patronage of any of
the clients, customers or accounts of Central Jersey Bancorp that were served by
Central Jersey Bancorp while Mr. Garrity was employed by Central Jersey Bancorp
after 3 months from the date of any termination of Mr. Garrity's employment,
Central Jersey Bancorp's obligation to pay any severance to Mr. Garrity shall
cease as of the date he solicits, diverts or takes away, or attempts to solicit,
divert or take away, the business or patronage of any of the clients, customers
or accounts of Central Jersey Bancorp that were served by Central Jersey Bancorp
while Mr. Garrity was employed by Central Jersey Bancorp.
The above descriptions are qualified in there entirety by the actual
change of control agreements which have been previously filed as exhibits to
Central Jersey Bancorp's reports filed with the SEC.
35
The following table illustrates the potential post-employment payments to
the Named Executive Officers as described above. The amounts in the following
table are hypothetical based on the assumption that an aforementioned triggering
event took place on December 29, 2006, the last business day during the year
ended December 31, 2006. Actual payments will depend on the circumstances and
timing of any such triggering event.
POTENTIAL POST-EMPLOYMENT PAYMENTS
----------------------------------
Involuntary
Termination
without
Cause/Separation
Payments/Benefits Due to Change of
Name (1) Upon Termination Control ($) Multiplier Total ($)
- --------------------- ----------------- ---------------- ---------- --------------
James S. Vaccaro Salary: $ 20,769.24 30 $ 623,077.20
Bonus: $ 4,166.67 30 $ 125,000.10
Benefits (Cash
Equivalent): $ 1,614.33 30 $ 48,429.90
--------------
Total: $ 796,507.20
==============
Robert S. Vuono Salary: $ 13,288.01 30 $ 398,640.30
Bonus: $ 3,750.00 30 $ 112,500.00
Benefits (Cash
Equivalent): $ 1,473.18 30 $ 44,195.40
--------------
Total: $ 555,335.70
==============
Anthony Giordano, III Salary: $ 9,788.08 24 $ 234,913.98
Bonus: $ 1,250.00 24 $ 30,000.00
Benefits (Cash
Equivalent): $ 1,315.63 24 $ 31,575.12
--------------
Total: $ 296,489.10
==============
Robert K. Wallace Salary: $ 12,009.46 18 $ 216,170.28
Benefits (Cash
Equivalent): $ 846.21 18 $ 15,231.78
--------------
Total: $ 231,402.06
==============
(1) As discussed above, on February 21, 2007, Central Jersey Bancorp entered
into a change of control agreement with Thomas J. Garrity. Inasmuch as
this change of control agreement was not in effect at December 29, 2006,
the potential post-employment payments to Mr. Garrity as of such date have
not been included as part of this table.
36
Director Compensation
Commencing January 1, 2005, Central Jersey Bancorp implemented a policy of
compensating each outside director the amount of $18,000 per annum as a
retainer, the Chairman at a rate of $30,000 per annum as a retainer and the Vice
Chairman at a rate of $22,000 per annum as a retainer. As described more fully
below, this chart summarizes the annual compensation for the Company's
non-employee directors for the year ended December 31, 2006.
DIRECTOR COMPENSATION
---------------------
Change in
Pension Value
and
Nonqualified
Fees Earned Non-Equity Deferred
or Paid in Option Incentive Plan Compensation All Other
Cash Stock Awards Awards Compensation Earnings Compensation Total
Name (1) ($) ($) ($)(2) ($) ($) ($) ($)
- ------------- ----------- ------------ ---------- -------------- ------------- ------------ ---------
James G. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
Aaron
Mark R. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
Aikins
Nicholas A. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
Alexander
John A. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
Brockriede
George S. $ 30,000 $ -- $ 19,373 $ -- $ -- $ 3,018(3) $ 52,391
Callas
Carl F. $ 12,833 $ -- $ 19,373 $ -- $ -- $ 14,205(5) $ 32,206
Chirico (4)
James P. $ 18,000 $ -- $ 19,373 $ -- $ -- $ 4,017(3) $ 41,390
Dugan
M. Claire $ 18,000 $ -- $ 19,373 $ -- $ -- $ 1,692(3) $ 39,065
French
William H. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
Jewett
Paul A. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
Larson, Jr.
John F. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
McCann
Carmen M. $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
Penta
Mark G. Solow $ 18,000 $ -- $ 19,373 $ -- $ -- $ -- $ 37,373
(1) See the Summary Compensation Table above for information regarding
compensation paid to James S. Vaccaro and Robert S. Vuono in connection
with their respective memberships on the Board of Directors.
(2) On February 1, 2006, Central Jersey Bancorp granted under its Equity
Incentive Plan, an aggregate 68,250 SARs to its directors, each with an
exercise price of $10.36. These SARs can only be settled in cash. The SARs
vest over a four
37
year period and expire February 1, 2016. The fair value of SARs granted
was estimated on December 31, 2006 using the Black-Scholes option pricing
model with the following weighted-average assumptions used: stock price
$8.30, dividend yield of 0%; expected volatility of 41.17%; risk free
interest rate of 4.70%; and expected lives of seven years. These SARS had
a fair value of approximately $3.69 per share at December 31, 2006.
(3) Represents the amount contributed by Central Jersey Bank, N.A. pursuant to
a bank owned life insurance (BOLI) contract.
(4) Prior to his retirement, Mr. Chirico served as Vice Chairman for seven
months during 2006.
(5) Of this amount, $4,179 represents the amount contributed by Central Jersey
Bank, N.A. pursuant to a bank owned life insurance (BOLI) contract and the
remainder represents the value attributed to an automobile gifted to Mr.
Chirico upon his retirement.
38
Stock Price Performance Graph
The graph below shows a comparison of the cumulative return experienced by
Central Jersey Bancorp's shareholders over the years 2001 through 2006 with the
NASDAQ Composite Index and the SNL Bank Index. The graph assumes that the value
of an investment in Central Jersey Bancorp Common Stock and in each index was
$100 on December 31, 2001 and that all dividends were reinvested. The graph also
accounts for stock distributions.
[GRAPH OMITTED]
Period Ending
----------------------------------------------------------
12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06
- -------------------------------------------------------------------------------------
Central Jersey Bancorp 100.00 128.71 237.50 375.40 282.68 192.17
NASDAQ Composite 100.00 68.76 103.67 113.16 115.57 127.58
SNL Bank Index 100.00 91.69 123.69 138.61 140.50 164.35
Source: SNL Financial LC
39
Certain Relationships, Related Party Transactions and Director Independence
Central Jersey Bancorp's Board of Directors is made up of fourteen
directors, twelve of whom qualify as independent directors in accordance with
the rules of NASDAQ and the rules and regulations of the SEC. The following are
the twelve independent members of the Board of Directors: James G. Aaron, Mark
R. Aikins, Nicholas A. Alexander, John A. Brockriede, George S. Callas, James P.
Dugan, M. Claire French, William H. Jewett, Paul A. Larson, Jr., John F. McCann,
Carmen M. Penta and Mark G. Solow. In addition, all directors serving on Central
Jersey Bancorp's Audit Committee, Compensation Committee and Nominating and
Corporate Governance Committee qualify as independent directors in accordance
with the rules of NASDAQ and the rules and regulations of the SEC.
It is anticipated that certain directors of Central Jersey Bancorp, and
the businesses and organizations with which they are associated, may have
banking and non-banking transactions with Central Jersey Bank, N.A. in the
ordinary course of business. Officers, directors and employees of Central Jersey
Bank, N.A. also may have banking transactions with Central Jersey Bank, N.A. The
terms and conditions of any loan or commitment to loan, and of any other
transaction, will be in accordance with applicable laws and on substantially the
same terms as those prevailing at the time for comparable transactions with
other persons or organizations with similar creditworthiness.
Additionally, the Code of Ethics provides that any services performed by a
director (or a business in which a director is a partner, significant
shareholder, director or executive officer) for the benefit of Central Jersey
Bancorp or Central Jersey Bank, N.A., or its customers, is subject to disclosure
to and approval by the Chief Executive Officer of Central Jersey Bank, N.A. and
further subject to disclosure to and approval by the Board of Directors when the
Chief Executive Officer reasonably believes there is the potential for a
material conflict between the director's interests and the interests of Central
Jersey Bancorp and/or Central Jersey Bank, N.A.
In order to alleviate the need for additional conference rooms at the Long
Branch location of Central Jersey Bank, N.A., Central Jersey Bank, N.A. leases
conference, office and storage space at 6 West End Court, Long Branch, New
Jersey. The landlord of the space leased at 6 West End Court is MCB Associates,
L.L.C. The following directors of Central Jersey Bancorp and/or its bank
subsidiary have an interest in MCB Associates, L.L.C.: James G. Aaron, Esq.,
Mark R. Aikins, Esq., Nicholas A. Alexander, C.P.A., John A. Brockriede, John F.
McCann, Carmen M. Penta, C.P.A., Mark G. Solow and James S. Vaccaro. The
negotiations with respect to the leased conference, office and storage space at
6 West End Court were conducted at arms-length and the lease amount to be paid
by Central Jersey Bank, N.A. was determined by an independent appraiser to be at
fair market value. Based on the foregoing, the Board of Directors has determined
that such related party transaction does not disqualify James G. Aaron, Esq.,
Nicholas A. Alexander, C.P.A., John A. Brockriede, John F. McCann and/or Mark G.
Solow from qualifying as independent. In 2006 and 2005, Central Jersey Bancorp
paid lease costs of $55,000 in each year in connection with its lease
arrangement with MCB Associates, L.L.C.
In 2006, the lending staff of Central Jersey Bank, N.A., from time to
time, retained the services of the law firm of Ansell, Zaro, Grimm & Aaron,
P.C., of which James G. Aaron, Esq.,
40
a director of Central Jersey Bancorp and its bank subsidiary, is a shareholder.
The services performed by Ansell, Zaro, Grimm & Aaron, P.C. and the fees charged
were on substantially the same terms as those prevailing at the time for
comparable services from other law firms. In accordance with the Code of Ethics,
the Chief Executive Officer of Central Jersey Bancorp and Central Jersey Bank,
N.A. and the Board of Directors determined that such services are not in
conflict with the interests of Central Jersey Bancorp or Central Jersey Bank,
N.A. nor do they disqualify Mr. Aaron from qualifying as an independent
director.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires Central Jersey Bancorp's
executive officers and directors, and persons who own more than ten percent of a
registered class of Central Jersey Bancorp's equity securities, to file reports
of ownership and changes of ownership on Forms 3, 4 and 5 with the SEC.
Executive officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish Central Jersey Bancorp with copies of all
Forms 3, 4 and 5 they file. Central Jersey Bancorp believes that all filings
required to be made by its executive officers, directors and greater than ten
percent shareholders pursuant to Section 16(a) of the Exchange Act have been
filed within the time periods prescribed, except for a Form 5 by Mr. Vaccaro and
a Form 5 by Mr. Giordano which were filed after the prescribed due date in
connection with their respective year-end holdings in a 401(k) plan sponsored by
Central Jersey Bank, N.A.
SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
The Board has adopted a formal process to be followed for those
shareholders who wish to communicate directly with the Board or any individual
director of Central Jersey Bancorp. A shareholder can contact the Board, or any
individual director, by sending a written communication to: Central Jersey
Bancorp, Board of Directors, c/o Chairman of the Board, 627 Second Avenue, Long
Branch, New Jersey 07740. A shareholder's letter should also indicate that he or
she is a shareholder of Central Jersey Bancorp. The Chairman shall either (1)
distribute such communication to the Board, or a member or members thereof, as
appropriate, depending upon the facts and circumstances described in the
communication received; or (2) determine that the communication should not be
forwarded to the Board because, in his or her judgment, (a) the communication is
primarily commercial in nature and relates to Central Jersey Bancorp's ordinary
business or relates to a topic that is improper or not relevant to the Board; or
(b) Central Jersey Bancorp's management can adequately handle the shareholder
inquiry or request, in which case the inquiry or request will be forwarded to
the appropriate individual. If a shareholder communication is addressed to one
or more members of the Board, but not the entire Board, the Chairman shall
notify any member of the Board to whom such communication was not addressed that
such communication was received and shall provide a copy of such communication
upon request.
At each Board meeting, the Chairman shall present a summary of all
communications received since the last Board meeting which were not forwarded to
the Board, as well as the basis for the determination by the Chairman as to why
the communications were not forwarded to the Board, and shall make those
communications available upon request.
41
SHAREHOLDER PROPOSALS
Shareholder proposals for presentation at Central Jersey Bancorp's next
annual meeting of shareholders must be received by Central Jersey Bancorp at its
principal executive offices for inclusion in its proxy statement and form of
proxy relating to that meeting no later than December 31, 2007. Central Jersey
Bancorp's By-laws contain certain procedures which must be followed in
connection with shareholder proposals.
ANNUAL REPORT
The annual report to shareholders for the year ended December 31, 2006
accompanies this Proxy Statement. KPMG LLP has audited the financial statements
for the year ended December 31, 2006, which statements are contained in the
annual report to shareholders. Such annual report, including the audited
financial statements contained therein, is not incorporated in this Proxy
Statement and is not to be deemed a part of the proxy soliciting material.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Selection of the independent public accountants for Central Jersey Bancorp
is made by the Audit Committee of the Board of Directors. KPMG LLP was Central
Jersey Bancorp's independent public accountants for the year ended December 31,
2006. The Audit Committee has selected KPMG LLP to serve as Central Jersey
Bancorp's independent public accountants for the year ended December 31, 2007.
A representative of KPMG LLP will be present at the Annual Meeting and
will have an opportunity to make a statement if the representative desires to do
so. Said representative will also be available to respond to appropriate
questions from shareholders of Central Jersey Bancorp.
OTHER MATTERS
It is not expected that any matter not referred to herein will be
presented for action at the Annual Meeting. If any other matters are properly
brought before the Annual Meeting, the persons named in the proxies or
authorized substitutes will have discretion to vote on such matters and on
matters incident to the conduct of the Annual Meeting in accordance with their
best judgment.
ANNUAL REPORT ON FORM 10-K
On written request, Central Jersey Bancorp will provide without charge to
each record or beneficial holder of the Central Jersey Bancorp's Common Stock, a
copy of Central Jersey Bancorp's Annual Report on Form 10-K for the year ended
December 31, 2006, as filed with the SEC. Requests should be addressed to Mr.
James S. Vaccaro, President and Chief Executive Officer, Central Jersey Bancorp,
627 Second Avenue, Long Branch, New Jersey 07740. It should be noted that a copy
of the Annual Report on Form 10-K is included with the annual report to
shareholders which accompanies this Proxy Statement.
42
ALL SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THEIR PROXIES
WITHOUT DELAY IN THE SELF ADDRESSED, POSTAGE PREPAID ENVELOPE ENCLOSED HEREWITH.
PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED. THANK YOU.
By Order of the Board of Directors
/s/ Robert S. Vuono
Robert S. Vuono
Secretary
43
|X| PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE CENTRAL JERSEY BANCORP
THIS PROXY IS SOLICITED ON BEHALF OF With- For All
THE BOARD OF DIRECTORS For hold Except
1. To elect the following nominees [ ] [ ] [ ]
FOR THE ANNUAL MEETING OF SHAREHOLDERS for director of Central Jersey Bancorp who will serve
TO BE HELD ON JUNE 28, 2007 until the next annual meeting of shareholders and until
their successors have been elected and qualify (vote on
The undersigned, a shareholder of CENTRAL JERSEY BANCORP, all):
hereby constitutes and appoints JAMES S. VACCARO and ROBERT S.
VUONO, and each of them, as proxies of the undersigned with James G. Aaron, Nicholas A. Alexander, Mark R. Aikins,
full power of substitution, for and in the name, place and John A. Brockriede, George S. Callas, James P. Dugan,
stead of the undersigned, to attend the Annual Meeting of M. Claire French, William H. Jewett, Paul A. Larson, Jr.,
Shareholders of said Central Jersey Bancorp called and to be John F. McCann, Carmen M. Penta, Mark G. Solow,
held at Branches, 123 Monmouth Road (Route 71), West Long James S. Vaccaro and Robert S. Vuono
Branch, New Jersey, on Thursday, June 28, 2007 at 10:00 a.m.
(the "Annual Meeting") and any adjournment or postponement INSTRUCTION: To withhold authority to vote for any
thereof, and thereat to vote as designated hereon the number individual nominee, mark "For All Except" and write that
of shares the undersigned would be entitled to vote and with nominee's name in the space provided below.
all powers the undersigned would possess if personally
present. --------------------------------------------------------
2. To transact such other business as may properly come
before the Annual Meeting or any adjournment or
postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN A MANNER
DIRECTED HEREIN BY THE BELOW SIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" EACH OF THE
NOMINEES FOR DIRECTOR.
|---------------------|
Please be sure to sign and date |Date |
this Proxy in the box below. | |
- -------------------------------------------------------------|
| |
| |
|--Shareholder sign above-----Co-holder (if any) sign above--|
- ---------------------------------------------------------------------------------------------------------------------------------
^ Detach above card, sign, date and mail in postage paid envelope provided. ^
CENTRAL JERSEY BANCORP
- ---------------------------------------------------------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- ---------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------
|X| PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE CENTRAL JERSEY BANCORP
THIS PROXY IS SOLICITED ON BEHALF OF With- For All
THE BOARD OF DIRECTORS For hold Except
1. To elect the following nominees [ ] [ ] [ ]
FOR THE ANNUAL MEETING OF SHAREHOLDERS for director of Central Jersey Bancorp who will serve
TO BE HELD ON JUNE 28, 2007 until the next annual meeting of shareholders and until
their successors have been elected and qualify (vote on
The undersigned, a shareholder of CENTRAL JERSEY BANCORP, 4 all):
hereby constitutes and appoints JAMES S. VACCARO and ROBERT S.
VUONO, and each of them, as proxies of the undersigned with 0 James G. Aaron, Nicholas A. Alexander, Mark R. Aikins,
full power of substitution, for and in the name, place and John A. Brockriede, George S. Callas, James P. Dugan,
stead of the undersigned, to attend the Annual Meeting of 1 M. Claire French, William H. Jewett, Paul A. Larson, Jr.,
Shareholders of said Central Jersey Bancorp called and to be John F. McCann, Carmen M. Penta, Mark G. Solow,
held at Branches, 123 Monmouth Road (Route 71), West Long (k) James S. Vaccaro and Robert S. Vuono
Branch, New Jersey, on Thursday, June 28, 2007 at 10:00 a.m.
(the "Annual Meeting") and any adjournment or postponement INSTRUCTION: To withhold authority to vote for any
thereof, and thereat to vote as designated hereon the number individual nominee, mark "For All Except" and write that
of shares the undersigned would be entitled to vote and with nominee's name in the space provided below.
all powers the undersigned would possess if personally
present. --------------------------------------------------------
2. To transact such other business as may properly come
before the Annual Meeting or any adjournment or
postponement thereof.
SHARES OF COMPANY COMMON STOCK FOR WHICH VOTING INSTRUCTIONS
ARE NOT PROPERLY COMPLETED OR SIGNED, OR RECEIVED IN A TIMELY
MANNER, WILL BE VOTED IN THE SAME PROPORTION AS THOSE SHARES
FOR WHICH VOTING INSTRUCTIONS WERE PROPERLY COMPLETED AND
SIGNED, AND RECEIVED IN A TIMELY MANNER, SO LONG AS SUCH VOTE
IS IN ACCORDANCE WITH THE PROVISIONS OF THE EMPLOYMENT
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED.
|---------------------|
Please be sure to sign and date |Date |
this Proxy in the box below. | |
- -------------------------------------------------------------|
| |
| |
|--Shareholder sign above-----Co-holder (if any) sign above--|
- ---------------------------------------------------------------------------------------------------------------------------------
^ Detach above card, sign, date and mail in postage paid envelope provided. ^
CENTRAL JERSEY BANCORP
- ---------------------------------------------------------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- ---------------------------------------------------------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE
ENVELOPE PROVIDED.
- --------------------------------------------------------------
- --------------------------------------------------------------
- --------------------------------------------------------------