SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. 2)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement |_| Soliciting Material Under Rule
|_| Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
CENTRAL JERSEY BANCORP
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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CENTRAL JERSEY BANCORP
1903 Highway 35
Oakhurst, New Jersey 07755
November [__], 2008
Dear Shareholder:
The Board of Directors (the "Board") of Central Jersey Bancorp has called a
Special Meeting of Shareholders to be held on Thursday, December 18, 2008 at
8:00 a.m. at our administrative offices located at 1903 Highway 35, Oakhurst,
New Jersey. The purpose of the Special Meeting is to vote on the Board's
recommended proposal to amend Central Jersey Bancorp's Certificate of
Incorporation to authorize preferred stock (the "Preferred Stock").
The amendment will permit the issuance of one or more series of Preferred Stock.
Initially, Central Jersey Bancorp intends to issue a series of Senior Preferred
Stock as part of its anticipated participation in the United States Department
of Treasury's (the "Department of Treasury") Capital Purchase Program (the
"Program"). If Central Jersey Bancorp's shareholders approve the proposal to
amend the Certificate of Incorporation to authorize Preferred Stock, Central
Jersey Bancorp intends to raise up to $11.3 million in Tier I capital by
participating in the Program and issuing shares of Senior Preferred Stock and
common stock purchase warrants to the Department of Treasury. Central Jersey
Bancorp's participation in the Program is subject to the approval of the
Department of Treasury and other regulatory authorities, and, as such, the
receipt of any proceeds therefrom is not guaranteed. In the future, Central
Jersey Bancorp may use the Preferred Stock to raise additional capital through
the participation in other government programs or financing alternatives.
Central Jersey Bancorp's participation in the Program is completely voluntary.
Central Jersey Bancorp is well-capitalized, profitable and has ample liquidity.
The Board has carefully reviewed the Program and has determined that additional
Tier I capital, in the current and anticipated economic operating environment,
is beneficial to Central Jersey Bancorp and its banking subsidiary, Central
Jersey Bank, N.A. The cost of capital under the Program is attractively priced
and provides distinct cost advantages as compared to other capital alternatives.
It is the belief of the Board that participation in the Program by Central
Jersey Bancorp provides flexibility for future balance sheet growth and
franchise expansion opportunities.
While the specifics of the Program are evolving daily, the Board believes that
sufficient information and knowledge regarding the Program has been gathered and
thoroughly analyzed and that we should take advantage of this unique
opportunity. For your review, the proposed terms of the Senior Preferred Stock
and the conditions of Central Jersey Bancorp's participation in the Program are
described in the attached proxy materials.
The Board requests that you please complete and return the enclosed proxy card
in the postage paid envelope provided herein. Your prompt attention is greatly
appreciated. Should you have any questions regarding the material contained
herein, please do not hesitate to contact Robert S. Vuono, Senior Executive Vice
President, Chief Operating Officer and Secretary; Anthony Giordano, III,
Executive Vice President and Chief Financial Officer; or me.
Very truly yours,
James S. Vaccaro
Chairman, President and Chief Executive Officer
CENTRAL JERSEY BANCORP
1903 Highway 35
Oakhurst, New Jersey 07755
(732) 663-4000
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held On December 18, 2008
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To the Shareholders of Central Jersey Bancorp:
NOTICE IS HEREBY GIVEN, that a special meeting of shareholders (the
"Special Meeting") of Central Jersey Bancorp will be held at the administrative
offices of Central Jersey Bancorp, located at 1903 Highway 35, Oakhurst, New
Jersey, on Thursday, December 18, 2008 at 8:00 a.m., local time. At the Special
Meeting, shareholders of Central Jersey Bancorp will consider and vote on the
following:
1. A proposal to approve an amendment to Central Jersey Bancorp's
Certificate of Incorporation to authorize for issuance
10,000,000 shares of preferred stock;
2. A proposal to grant to management the authority to adjourn,
postpone or continue the Special Meeting; and
3. Any other business as may properly come before the Special
Meeting or any adjournment, postponement or continuation
thereof.
Shareholders of record at the close of business on November 3, 2008 are
entitled to notice of and to vote at the Special Meeting and at any adjournment,
postponement or continuation thereof.
Whether or not you expect to attend the Special 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 Special Meeting. The Board of Directors of
Central Jersey Bancorp recommends that you vote "FOR" the proposal to approve an
amendment to Central Jersey Bancorp's Certificate of Incorporation to authorize
for issuance 10,000,000 shares of preferred stock and "FOR" the proposal to
grant to management the authority to adjourn, postpone or continue the Special
Meeting.
By Order of the Board of Directors
Robert S. Vuono
Secretary
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YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING OF SHAREHOLDERS.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE SPECIAL 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.
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CENTRAL JERSEY BANCORP
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PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
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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
special meeting of shareholders of Central Jersey Bancorp to be held at 8:00
a.m. on Thursday, December 18, 2008 at the administrative offices of Central
Jersey Bancorp, located at 1903 Highway 35, Oakhurst, New Jersey (the "Special
Meeting"). The Board of Directors has fixed the close of business on November 3,
2008 as the record date for the determination of shareholders entitled to notice
of and to vote at the Special Meeting.
This Proxy Statement and the enclosed proxy card are being mailed to
shareholders on or about November [__], 2008.
At the Special Meeting, shareholders of Central Jersey Bancorp will
consider and vote on the following:
1. A proposal to approve an amendment to Central Jersey Bancorp's
Certificate of Incorporation to authorize for issuance
10,000,000 shares of preferred stock;
2. A proposal to grant to management the authority to adjourn,
postpone or continue the Special Meeting; and
3. Any other business as may properly come before the Special
Meeting or any adjournment, postponement or continuation
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 Special Meeting.
Presence at the Special Meeting does not, in and of itself, revoke a 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 proposal to approve an
amendment to Central Jersey Bancorp's Certificate of Incorporation to authorize
for issuance 10,000,000 shares of preferred stock and "FOR" the proposal to
grant to management the authority to adjourn, postpone or continue the Special
Meeting. Neither the Board nor management of Central Jersey Bancorp is aware, to
date, of any matter being presented at the Special Meeting other than the
proposal to approve an
amendment to Central Jersey Bancorp's Certificate of Incorporation to authorize
for issuance 10,000,000 shares of preferred stock and the proposal to grant to
management the authority to adjourn, postpone or continue the Special Meeting,
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 Special 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 November 3, 2008 are
entitled to one vote for each share of Common Stock then held by them. As of
that date, Central Jersey Bancorp had 9,001,953 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 Special Meeting is necessary to constitute a quorum at the Special Meeting.
Abstentions and broker non-votes will be counted as shares present and entitled
to be voted at the Special Meeting for the purpose of determining the existence
of a quorum.
A majority of the shareholders entitled to vote present in person or by
proxy is required to approve the amendment to Central Jersey Bancorp's
Certificate of Incorporation to authorize for issuance 10,000,000 shares of
preferred stock and to grant management the authority to adjourn, postpone or
continue the Special Meeting. All votes will be tabulated by the inspector of
election appointed at the Special 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 November 3, 2008, 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 of
Central Jersey Bancorp, (2) each Named Executive Officer (as defined below) of
Central Jersey Bancorp, (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.
For purposes hereof, the "Named Executive Officers" of Central Jersey Bancorp
are (1) James S. Vaccaro, Chairman of the Board, President and Chief Executive
Officer, (2) Anthony Giordano, III, Executive Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary, (3) Robert S. Vuono, Senior
Executive Vice President, Chief Operating Officer and Secretary, and (4) Robert
K. Wallace, Executive Vice President and Senior Commercial Loan Officer. 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
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Percent of
Name of Beneficial Owner (1) No. of Shares (2) Class
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James G. Aaron, Esq. (3)(4).................. 257,186 2.84%
Mark R. Aikins, Esq. (3)(5).................. 122,437 1.35%
John A. Brockriede (3)(6).................... 498,872 5.51%
George S. Callas (3)(7)(8)................... 196,459 2.16%
Paul A. Larson, Jr. (3)(9)................... 86,118 *
John F. McCann (3)(10)....................... 206,814 2.29%
Carmen M. Penta, C.P.A. (3)(11).............. 109,010 1.21%
Mark G. Solow (3)(12)........................ 191,511 2.12%
James S. Vaccaro (3)(13)(14)................. 226,832 2.48%
Robert S. Vuono (3)(15)(16).................. 114,362 1.26%
3
Beneficial Ownership of
Central Jersey Bancorp's
Common Stock
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Percent of
Name of Beneficial Owner - Directors and Officers (1) No. of Shares (2) Class
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Anthony Giordano, III (17)(18)............................... 70,665 *
Robert K. Wallace (19)(20) .................................. 65,324 *
Linda J. Brockriede (21)(22)................................. 498,872 5.51%
All Directors and Executive Officers
as a Group (12 persons) (4)(5)(6)(8)(9)(10)(11)
(12)(14)(16)(18)(20)......................................... 2,145,590 22.06%
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* Indicates less than one percent (1%).
(1) All directors and officers listed in this table maintain a mailing
address at 1903 Highway 35, Oakhurst, New Jersey 07755.
(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 (60) 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 serves as a director of Central Jersey Bancorp.
(4) Includes 44,259 shares subject to currently exercisable stock options;
27,545 shares held in an Individual Retirement Account with Morgan
Stanley for the benefit of Mr. Aaron; and 18,336 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
44,019 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 beneficial ownership of these securities except to the extent
of his ownership interest in ERBA Co., Inc. Also includes 48,993 shares
registered in the name of the Aaron Family Limited Partnership, of
which Mr. Aaron is a partner. Mr. Aaron disclaims beneficial ownership
of these securities except to the extent of his partnership interest in
the Aaron Family Limited Partnership. Also includes 7,680 shares
registered in the name of the David Ritter Trust and 7,680 shares
registered in the name of the Randy Ritter Trust, of which Mr. Aaron is
a trustee. Mr. Aaron disclaims any beneficial ownership of the shares
held in these trusts. Also includes 22,544 shares held in trusts for
the benefit of Mr. Aaron's family members of which Mr. Aaron's wife is
trustee; 3,361 shares registered in the name of Mr. Aaron's wife; and
9,653 shares held in an Individual Retirement Account with Morgan
Stanley
4
for the benefit of Mr. Aaron's wife. Mr. Aaron disclaims beneficial
ownership of the shares held in these trusts, the shares held by his
wife and the shares held for the benefit of his wife.
(5) Includes 44,259 shares subject to currently exercisable stock options;
77,117 shares held in a Simplified Employee Pension/Individual
Retirement Account by Merrill Lynch as custodian for the benefit of Mr.
Aikins; and 1,061 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 44,259 shares subject to currently exercisable stock options.
Also includes 30,000 shares held in an Individual Retirement Account
and 5,282 shares held in a Simplified Employee Pension Plan both by UBS
as custodian for the benefit of Mr. Brockriede. Includes 108,445 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 284,660 shares held jointly with Mr.
Brockriede's wife and 20,977 shares held in trusts for the benefit of
Mr. Brockriede's family members of which Mr. Brockriede's wife is
trustee; and 2,637 shares held in an Individual Retirement Account by
UBS for the benefit of Mr. Brockriede's wife. Mr. Brockriede disclaims
beneficial ownership of the shares held in these trusts and the shares
held by UBS on behalf of Mr. Brockriede's wife.
(7) Mr. Callas served as the Chairman of the Board of Central Jersey
Bancorp until December 31, 2007.
(8) Includes 75,816 shares subject to currently exercisable stock options
and 6,750 shares held by Mr. Callas' wife. Mr. Callas disclaims
beneficial ownership of the shares held by his wife.
(9) Includes 34,719 shares subject to currently exercisable stock options.
Also includes 8,437 shares held jointly with Mr. Larson's wife.
(10) Includes 44,259 shares subject to currently exercisable stock options;
and 15,307 shares held in an Individual Retirement Account with Charles
Schwab for the benefit of Mr. McCann. Also includes 16,877 shares held
by Mr. McCann's wife, as to which shares he disclaims any beneficial
interest.
(11) Includes 38,579 shares subject to currently exercisable stock options
and 151 shares held jointly with Mr. Penta's wife. Also includes 7,907
shares held by Mr. Penta's wife to which Mr. Penta disclaims beneficial
ownership.
(12) Includes 44,259 shares subject to currently exercisable stock options.
(13) Mr. Vaccaro is a Named Executive Officer and serves as the Chairman of
the Board, President and Chief Executive Officer of Central Jersey
Bancorp.
(14) Includes 151,837 shares subject to currently exercisable stock options;
43,099 shares held by Citi, Smith Barney as custodian for the benefit
of James S. Vaccaro Simplified Employee Pension; 5,318 shares held
pursuant to the 401(k) plan of Central Jersey Bank, N.A. for the
benefit of Mr. Vaccaro; and 2,698 shares held by Mr. Vaccaro as
custodian for his daughters
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under the Uniform Transfers to Minors Act. Mr. Vaccaro disclaims any
beneficial interest to the shares held by him as custodian for his
daughters.
(15) Mr. Vuono is a Named Executive Officer and serves as the Senior
Executive Vice President, Chief Operating Officer and Secretary of
Central Jersey Bancorp.
(16) Includes 101,285 shares subject to currently exercisable stock options
and 13,077 shares held in an Individual Retirement Account with Bank of
America Investment Services, Inc.
(17) Mr. Giordano is a Named Executive Officer and serves as Executive Vice
President, Chief Financial Officer, Treasurer and Assistant Secretary
of Central Jersey Bancorp.
(18) Includes 55,549 shares subject to currently exercisable stock options;
2,652 shares held by Charles Schwab & Co. in an Individual Retirement
Account for the benefit of Mr. Giordano; 2,756 shares held in a
Simplified Employee Pension by Charles Schwab & Co. for the benefit of
Mr. Giordano's wife, as to which shares he disclaims any beneficial
interest; 6,710 shares held pursuant to the 401(k) plan of Central
Jersey Bank, N.A. for the benefit of Mr. Giordano; 2,401 shares held by
Charles Schwab & Co. in an Individual Retirement Account for the
benefit of Mr. Giordano's wife, as to which shares he disclaims any
beneficial interest; and 597 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.
(19) Mr. Wallace is a Named Executive Officer and serves as Executive Vice
President and Senior Commercial Lending Officer of Central Jersey Bank,
N.A.
(20) Includes 43,454 shares subject to currently exercisable stock options
and 15,332 shares held pursuant to the 401(k) plan of Central Jersey
Bank, N.A. for the benefit of Mr. Wallace.
(21) John A. Brockriede and Linda J. Brockriede together beneficially own a
total of 498,872 shares of Central Jersey Bancorp's Common Stock
(including currently exercisable stock options) which represents 5.51%
of Central Jersey Bancorp's outstanding Common Stock.
(22) Includes (a) 284,660 shares held jointly with Mrs. Brockriede's
husband, John A. Brockriede; (b) 20,977 shares held in trusts for the
benefit of Mrs. Brockriede's family members of which Mrs. Brockriede is
trustee; (c) 2,637 shares held in an Individual Retirement Account by
UBS for the benefit of Mrs. Brockriede; (d) 44,259 shares subject to
currently exercisable stock options previously granted to John A.
Brockriede; (e) 30,000 shares held in an Individual Retirement Account
and 5,282 shares held in a Simplified Employee Pension Plan both by UBS
as custodian for the benefit of John A. Brockriede; and (f) 108,445
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.
6
PROPOSAL 1
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO
AUTHORIZE FOR ISSUANCE 10,000,000 SHARES OF PREFERRED STOCK
The Board of Directors has adopted, subject to shareholder approval, an
amendment to Article III of Central Jersey Bancorp's Certificate of
Incorporation which increases the number of shares of capital stock authorized
for issuance from 100,000,000 shares to 110,000,000 shares, with 10,000,000
shares to be designated as preferred stock, par value $.01 per share (the
"Preferred Stock"). Central Jersey Bancorp currently has 100,000,000 shares of
authorized Common Stock, but it is not authorized to issue any Preferred Stock.
The full text of the proposed Amended and Restated Certificate of Incorporation
is attached to this proxy statement as Appendix A, and the following description
is qualified in its entirety by Appendix A.
The Board of Directors, in its discretion, will be authorized to
provide for the issuance of shares of the Preferred Stock in one or more series,
specifying the number of shares to be included in the series, the distinguishing
designations of each series and the designations, preferences, limitations and
relative rights, including voting rights, applicable to each series, subject to
applicable laws and regulations, including the New Jersey Business Corporation
Act. The authority of the Board of Directors with respect to each series will
include, without limitation, the right to determine the following:
o The distinctive designation of such series and the number of
shares which shall constitute such series.
o Dividend rate or rates and preferences, whether any such
dividends will be cumulative or non-cumulative, and such other
limitations, restrictions and conditions pertaining to
dividends.
o Redemption rights, including prices and other terms of
redemption.
o Rights upon the liquidation, dissolution or the winding-up of
Central Jersey Bancorp, or any distribution of the assets of
Central Jersey Bancorp.
o The obligation, if any, of Central Jersey Bancorp to maintain
a purchase, retirement or sinking fund for shares of such
series and the provisions with respect thereto.
o Conversion or exchange rights, including the price and rate of
conversion or exchange.
o Voting rights, including rights to vote as a separate class.
o Other preferences, powers, qualifications, rights and
privileges, all as the Board of Directors may deem advisable.
7
No further authorization will be required from Central Jersey Bancorp's
shareholders for any of the above-described actions, except as may be required
for a particular transaction by applicable law or regulation.
Reasons for the Authorization of Preferred Stock
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Capital Purchase Program
On October 14, 2008, the U.S. government announced a series of
initiatives to strengthen market stability, improve the strength of financial
institutions and enhance market liquidity. In connection therewith, the U.S.
Department of Treasury (the "Department of Treasury") announced its voluntary
Capital Purchase Program (the "Program") in order to encourage U.S. financial
institutions to build capital to increase the flow of financing to U.S.
businesses and consumers and to support the U.S. economy. It is the intention of
Central Jersey Bancorp to apply to participate in the Program, a detailed
summary description of which is attached to this proxy statement as Appendix B.
Under the terms of the Program, the Department of Treasury will
purchase up to $250 billion of senior preferred shares of stock on standardized
terms (the "Senior Preferred Stock") from qualifying financial institutions.
Central Jersey Bancorp, as a qualifying financial institution, may issue an
amount of Senior Preferred Stock equal to not less than one percent (1%), or
approximately $3.7 million, of its risk-weighted assets, and not more than three
percent (3%), or approximately $11.3 million, of its risk-weighted assets. It is
anticipated that, if Central Jersey Bancorp is approved to participate in the
Program, Central Jersey Bancorp will sell to the Department of Treasury up to
approximately $11.3 million of Senior Preferred Stock. The per share purchase
price of the Senior Preferred Stock has not been determined. The $11.3 million
of Senior Preferred Stock would represent approximately twenty-one percent (21%)
of Central Jersey Bancorp's tangible equity at September 30, 2008, after giving
effect to the issuance of the Senior Preferred Stock. The Senior Preferred Stock
will be senior to Central Jersey Bancorp's Common Stock and will have a
liquidation preference of $1,000 per share. Central Jersey Bancorp's
participation in the Program is subject to the approval of the Department of
Treasury and other regulatory authorities, and, therefore, the receipt of any
proceeds therefrom is not guaranteed.
The Senior Preferred Stock will pay cumulative dividends at a rate of
five percent (5%) per annum, or approximately $550,000 annually, and will reset
to a rate of nine percent (9%) at the end of the fifth (5th) year. The Senior
Preferred Stock may not be redeemed for a period of three (3) years from the
date of the investment, except under limited circumstances. After the third
(3rd) anniversary of the date of the investment, the Senior Preferred Stock may
be redeemed, in whole or in part, at any time and from time to time, at the
option of Central Jersey Bancorp. Any redemption of the Senior Preferred Stock
shall be at one hundred percent (100%) of its issue price, plus accrued and
unpaid dividends for the then current dividend period, regardless of whether any
dividends are actually declared for such dividend period.
As long as shares of the Senior Preferred Stock are outstanding,
Central Jersey Bancorp would not be able to declare or pay cash dividends on any
Common Stock unless all dividends
8
on the Senior Preferred Stock had been paid in-full. Further, unless the shares
of Senior Preferred Stock are redeemed or fully transferred to third parties,
until the third (3rd) anniversary of the investment of the Department of
Treasury, any increase in the Common Stock dividends would be prohibited without
the prior approval of the Department of Treasury. The consent of the Department
of Treasury is also required for most share repurchases until the third (3rd)
anniversary of the investment unless the Senior Preferred Stock is redeemed or
transferred. As a result, Central Jersey Bancorp may have to suspend or
terminate its publicly announced share repurchase program which is scheduled to
terminate on December 31, 2009.
The Senior Preferred Stock will generally be non-voting, except under
certain limited circumstances. In the event that dividends on the Senior
Preferred Stock are not paid in full for six (6) dividend periods, whether or
not consecutive, the Senior Preferred Stock will have the right to elect two (2)
directors to the Board. The right to elect directors will end when full
dividends have been paid for four (4) consecutive dividend periods. The Senior
Preferred Stock will also not be subject to restrictions on transferability.
Central Jersey Bancorp will have to file a shelf registration covering the
Senior Preferred Stock as soon as practicable after the date of the investment
and will have to grant "piggyback" registration rights for the Senior Preferred
Stock.
As part of the Program, the Department of Treasury will also receive
warrants to purchase shares of Central Jersey Bancorp's Common Stock with an
aggregate market price equal to approximately $1,650,000, or fifteen percent
(15%) of the Senior Preferred Stock. The warrants shall have a term of ten (10)
years and shall be immediately exercisable, in whole or in part. The exercise
price for the warrants will be the market price of Central Jersey Bancorp's
Common Stock at the time of issuance calculated on a 20-trading day trailing
average. A more detailed description of the warrants is provided in Appendix B.
As a condition to the closing of the investment, Central Jersey Bancorp
must also adopt the Department of Treasury's standards for executive
compensation and corporate governance as established by the Emergency Economic
Stabilization Act of 2008 (the "EESA") for the period which the Department of
Treasury holds equity issued under the Program, including: (1) ensuring that
incentive compensation for senior executive officers does not encourage
unnecessary and excessive risks that threaten the value of the financial
institution; (2) required clawback of any bonus or incentive compensation paid
to a senior executive officer based on statements of earnings, gains or other
criteria that are later proven to be materially inaccurate; (3) prohibition on
the financial institution from making any golden parachute payment to a senior
executive officer based on the Internal Revenue Code provision; and (4)
agreement not to deduct for tax purposes executive compensation in excess of
$500,000 for each senior executive officer. Central Jersey Bancorp has reviewed
the compensation arrangements for its senior executive officers and does not
believe that any plans or contracts currently fail to comply with the limits on
executive compensation established by the EESA. However, in order to ensure
Central Jersey Bancorp's continued compliance with the conditions of the Capital
Purchase Program, Central Jersey Bancorp plans to amend the change of control
agreements with certain of its senior executive officers to provide that such
agreements will comply with the limits on executive compensation established by
the EESA. The affected senior executive officers have agreed to these
amendments.
9
The Board believes that by participating in the Program, Central Jersey
Bancorp will strengthen its capital position and its ability for Central Jersey
Bank, N.A. to prudently make credit available in its lending market. It is
important to also note that while Central Jersey Bancorp intends to submit the
necessary application for participation in the Program, there can be no
assurance or guarantee made that Central Jersey Bancorp's application will be
accepted by the Department of Treasury or otherwise approved by applicable
regulatory authorities. In addition, should the Department of Treasury
materially change any of the terms or conditions of the Program, the Board, in
its discretion, may withdraw Central Jersey Bancorp's application should the
Board determine that withdrawing the application would be in the best interests
of Central Jersey Bancorp and its shareholders.
Pro Forma Financial Information - Capital Purchase Program
The following unaudited pro forma financial information of Central
Jersey Bancorp for the fiscal year ended December 31, 2007 and the nine months
ended September 30, 2008, respectively, illustrates the effects of a minimum of
$3.7 million and a maximum of $11.3 million of Senior Preferred Stock to be
issued by Central Jersey Bancorp to the Department of Treasury pursuant to the
Capital Purchase Program. The pro forma financial data presented below may
change materially under either the "minimum" or "maximum" scenario based on the
actual proceeds received by Central Jersey Bancorp under the Capital Purchase
Program, if any, the timing and utilization of the proceeds, as well as certain
other factors including the strike price of the warrants, subsequent changes in
the market price of Central Jersey Bancorp's Common Stock, and the discount rate
used to determine the fair value of the Senior Preferred Stock. Accordingly, we
can provide no assurance that the "minimum" or "maximum" pro forma scenarios
included in the following unaudited pro forma financial data will ever be
achieved. We have included the following unaudited pro forma consolidated
financial data solely for the purpose of providing shareholders with information
that may be useful for purposes of considering and evaluating Proposal 1.
10
PRO FORMA IMPACT OF ESTIMATED PROCEEDS AND
COMMON STOCK WARRANTS
(unaudited)
(dollars in thousands, except share amounts)
Balance sheet data: Historical Pro Forma (1)
September 30, September 30, 2008
2008 Minimum Maximum
----------- ----------- -----------
ASSETS
- ------
Cash and due from banks $ 11,214 $ 11,214 $ 11,214
Federal funds sold (2) 1,164 4,864 12,464
----------- ----------- -----------
Cash and cash equivalents 12,378 16,078 23,678
Investment securities and other interest-earning assets 156,049 156,049 156,049
Loans, net 343,226 343,226 343,226
Other assets 43,250 43,250 43,250
----------- ----------- -----------
Total assets $ 554,903 $ 558,603 $ 566,203
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits $ 406,296 $ 406,296 $ 406,296
Borrowings 72,504 72,504 72,504
Subordinated debentures 5,155 5,155 5,155
Accrued expenses and other liabilities 1,621 1,621 1,621
----------- ----------- -----------
Total liabilities 485,576 485,576 485,576
----------- ----------- -----------
Shareholders' equity:
Preferred stock (3) -- 3,700 11,300
Common stock 91 91 91
Additional paid-in capital 64,344 64,344 64,344
Accumulated other comprehensive income 360 360 360
Treasury stock, at cost (1,328) (1,328) (1,328)
Retained earnings 5,860 5,860 5,860
----------- ----------- -----------
Total shareholders' equity 69,327 73,027 80,627
----------- ----------- -----------
Total liabilities and shareholders' equity $ 554,903 $ 558,603 $ 566,203
=========== =========== ===========
Common shares outstanding 9,037,598 9,037,598 9,037,598
(1) The balance sheet data gives effect to the equity proceeds as of the
balance sheet date.
(2) The funds received from the issuance of Senior Preferred Stock are assumed
to be initially invested in federal funds sold, earnings at a rate of
1.00%. An incremental tax rate of 35% was assumed. Subsequent redeployment
of the funds is anticipated, but the timing of such redeployment is
uncertain.
(3) The pro forma financial information reflects the issuance of a minimum of
$3.7 million and a maximum of $11.3 million shares of Senior Preferred
Stock.
11
PRO FORMA IMPACT OF ESTIMATED PROCEEDS AND
COMMON STOCK WARRANTS
(unaudited)
(dollars in thousands, except share and per share amounts)
Historical
Nine Months Pro Forma (1)
ended Nine Months ended
September 30, September 30, 2008
Income statement data 2008 Minimum Maximum
------------ ------------ ------------
Total interest income (2) $ 21,704 $ 21,732 $ 21,789
Total interest expense 8,105 8,105 8,105
------------ ------------ ------------
Net interest income 13,599 13,627 13,684
Provision for loan losses 399 399 399
------------ ------------ ------------
Net interest income after provision for loan losses 13,200 13,228 13,285
Total other income 1,996 1,996 1,996
Total operating expenses (3) 11,690 11,690 11,690
------------ ------------ ------------
Income before provision for income taxes 3,506 3,534 3,591
Income taxes 1,189 1,199 1,219
------------ ------------ ------------
Net income $ 2,317 $ 2,335 $ 2,372
============
Effective dividend on preferred stock 139 424
------------ ------------
Net income available to common
shareholders $ 2,196 $ 1,948
============ ============
Average basic shares outstanding 9,118,884 9,118,884 9,118,884
============ ============ ============
Average diluted shares outstanding (4) 9,544,772 9,546,649 9,550,505
============ ============ ============
Basic earnings per share $ 0.25 $ 0.24 $ 0.21
============ ============ ============
Diluted earnings per share $ 0.24 $ 0.23 $ 0.20
============ ============ ============
(1) The income statement data gives effect to the equity proceeds at the
beginning of the period.
(2) The funds received from the issuance of Senior Preferred Stock are assumed
to be initially invested in federal funds sold, earnings at a rate of
1.00%. An incremental tax rate of 35% was assumed. Subsequent redeployment
of the funds is anticipated, but the timing of such redeployment is
uncertain.
(3) The issuance costs expected to be incurred are immaterial, therefore, no
effect was given in the pro forma.
(4) The pro forma average diluted shares outstanding included the estimated
effect of the exercise of the warrants to be issued by Central Jersey
Bancorp in the Capital Purchase Program and are accounted for under the
treasury stock method.
12
PRO FORMA IMPACT OF ESTIMATED PROCEEDS AND
COMMON STOCK WARRANTS
(unaudited)
(dollars in thousands, except share and per share amounts)
Historical Pro Forma (1)
Year ended Year ended
December 31, December 31, 2007
Income statement data 2007 Minimum Maximum
------------ ------------ ------------
Total interest income (2) $ 30,488 $ 30,525 $ 30,601
Total interest expense 13,782 13,782 13,782
------------ ------------ ------------
Net interest income 16,706 16,743 16,819
Provision for loan losses 165 165 165
------------ ------------ ------------
Net interest income after provision for loan losses 16,541 16,578 16,654
Total other loss 217 217 217
Total operating expenses (3) 14,370 14,370 14,370
------------ ------------ ------------
Income before provision for income taxes 1,954 1,991 2,067
Income taxes 1,110 1,123 1,150
------------ ------------ ------------
Net income $ 844 $ 868 $ 917
============
Effective dividend on preferred stock 185 565
------------ ------------
Net income available to common shareholders $ 683 $ 352
============ ============
Average basic shares outstanding 9,146,408 9,146,408 9,146,408
============ ============ ============
Average diluted shares outstanding (4) 9,589,411 9,594,876 9,606,302
============ ============ ============
Basic earnings per share $ 0.09 $ 0.07 $ 0.04
============ ============ ============
Diluted earnings per share $ 0.09 $ 0.07 $ 0.04
============ ============ ============
(1) The income statement data gives effect to the equity proceeds at the
beginning of the period.
(2) The funds received from the issuance of Senior Preferred Stock are assumed
to be initially invested in federal funds sold, earnings at a rate of
1.00%. An incremental tax rate of 35% was assumed. Subsequent redeployment
of the funds is anticipated but the timing of such redeployment is
uncertain.
(3) The issuance costs expected to be incurred are immaterial, therefore, no
effect was given in the pro forma.
(4) The pro forma average diluted shares outstanding included the estimated
effect of the exercise of the warrants to be issued by Central Jersey
Bancorp in the Capital Purchase Program and are accounted for under the
treasury stock method.
13
Historical Pro Forma (1)
As of As of
September 30, September 30, 2008
Capital ratios: 2008 Minimum Maximum
------------ ------------ ------------
Total risk-based capital to risk-weighted assets ratio 12.83% 13.80% 15.81%
Tier I capital to risk-weighted assets ratio 11.81% 12.79% 14.80%
Tier I leverage ratio 8.73% 9.38% 10.70%
Equity to assets ratio 12.49% 13.07% 14.24%
Tangible equity to tangible assets ratio 7.75% 8.40% 9.69%
(1) Pro forma impact assuming minimum estimated proceeds from the issuance of
Senior Preferred Stock ($3.7 million).
(2) Pro forma impact assuming maximum estimated proceeds from the issuance of
Senior Preferred Stock ($11.3 million).
Flexibility to Raise Capital, Structure Acquisitions and Otherwise Meet
Corporate Needs
In addition to enabling Central Jersey Bancorp to apply to participate
in the Program, authorizing the Preferred Stock would provide Central Jersey
Bancorp with flexibility to raise capital, structure acquisitions and otherwise
meet corporate needs. As discussed above, authorizing the Preferred Stock would
permit Central Jersey Bancorp's Board of Directors to issue one or more series
of Preferred Stock, determine the exact terms of each series of Preferred Stock
at the time of issuance and to issue such series of Preferred Stock without
further shareholder approval or delay, thereby providing Central Jersey Bancorp
with maximum flexibility with respect to capital matters, including future
capital raising initiatives. The Preferred Stock would enable Central Jersey
Bancorp to respond promptly to and take advantage of market conditions and other
favorable opportunities without incurring the delay, expense and cost associated
with calling a special shareholders' meeting to approve a contemplated Preferred
Stock issuance, unless Central Jersey Bancorp is otherwise required to obtain
shareholder approval for the transaction under applicable rules and regulations.
Central Jersey Bancorp presently does not contemplate any particular transaction
involving the issuance of Preferred Stock other than its anticipated
participation in the Program.
Possible Adverse Effects of the Proposal
- ----------------------------------------
Although Central Jersey Bancorp currently has no arrangements,
commitments or plans with respect to the issuance of any of the shares of
Preferred Stock other than in connection with the Program, future issuances of
Preferred Stock by the Board of Directors could have certain adverse effects
upon the holders of Common Stock. For instance, the issuance of Preferred Stock
with greater voting rights generally or with respect to particular matters would
adversely affect the voting power of holders of Common Stock. In addition, a
series of Preferred Stock convertible into or redeemable for Common Stock may be
issued by the Board of Directors. The issuance of Common Stock upon the
conversion of such Preferred Stock would increase the number of shares of Common
Stock outstanding, thereby diluting the percentage ownership of
14
existing shareholders. Likewise, any issuance of Common Stock upon the exercise
of the warrants to be issued as part of the Program, if at all, would dilute the
percentage ownership of existing holders of Common Stock accordingly. The
issuance of Common Stock upon a conversion may also dilute book value per share
and/or earnings per share. The holders of Common Stock will not have pre-emptive
rights with respect to the Preferred Stock or Common Stock issued upon the
conversion of shares of Preferred Stock. Finally, shares of Preferred Stock
generally are preferred to Common Stock with respect to dividend rights and
distributions in the event of liquidation. As a result, holders of Common Stock
may not receive any dividends or distributions in the event of liquidation until
satisfaction of any dividend or liquidation preference granted to holders of
Preferred Stock. As provided above, the Senior Preferred Stock will be senior to
Central Jersey Bancorp's Common Stock and will have a liquidation preference of
$1,000 per share.
Possible Anti-Takeover Effects of the Proposal
- ----------------------------------------------
The authorization of Preferred Stock could operate to provide
anti-takeover protection for Central Jersey Bancorp. In the event of a proposed
merger, tender offer or other attempt to gain control of Central Jersey Bancorp
that the Board of Directors does not believe is in the best interests of Central
Jersey Bancorp or its shareholders, the Board of Directors will have the ability
to readily issue shares of Preferred Stock with certain rights, preferences and
limitations that make the proposed takeover attempt more difficult to complete.
The authorization to issue Preferred Stock could also benefit present
management. A potential acquiror may be discouraged from attempting a takeover
because the Board of Directors possesses the authority to issue Preferred Stock.
As a result, members of management may be able to retain their positions more
easily. The Board of Directors, however, does not intend to issue any Preferred
Stock except on terms that the Board of Directors deems to be in the best
interest of Central Jersey Bancorp and its shareholders.
This Proposal is not in response to any attempt to acquire control of
Central Jersey Bancorp, nor is Central Jersey Bancorp aware of any such attempt.
Further, this Proposal is not an effort by management of Central Jersey Bancorp
to make it more difficult to replace incumbent management. Finally, this
Proposal is not part of a plan by Central Jersey Bancorp to adopt a series of
anti-takeover measures, nor does Central Jersey Bancorp have any present
intention of proposing the adoption of anti-takeover measures in the future.
Vote Required
- -------------
A majority of the shareholders entitled to vote present in person or by
proxy is required to approve the proposal to amend Central Jersey Bancorp's
Certificate of Incorporation to authorize for issuance 10,000,000 shares of
Preferred Stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF CENTRAL JERSEY BANCORP TO
AUTHORIZE FOR ISSUANCE 10,000,000 SHARES OF PREFERRED STOCK.
15
PROPOSAL 2
ADJOURNMENT, POSTPONEMENT OR CONTINUATION OF THE SPECIAL MEETING
If at the Special Meeting the number of shares of Central Jersey
Bancorp's Common Stock present or represented and voting in favor of Proposal 1
is insufficient to approve Proposal 1, Central Jersey Bancorp's management may
move to adjourn, postpone or continue the Special Meeting in order to enable its
Board of Directors to continue to solicit additional proxies in favor of the
proposal to approve the amendment to Central Jersey Bancorp's Certificate of
Incorporation to authorize for issuance 10,000,000 shares of Preferred Stock;
provided, however, the Special Meeting may not be adjourned, postponed or
continued to a date later than December 30, 2008. In that event, you will be
asked to vote only upon the adjournment, postponement or continuation proposal
and not Proposal 1.
In this Proposal 2, Central Jersey Bancorp is asking you to authorize
the holder of any proxy solicited by its Board of Directors to vote in favor of
adjourning, postponing or continuing the Special Meeting and any later
adjournments. If Central Jersey Bancorp's shareholders approve the adjournment,
postponement or continuation proposal, Central Jersey Bancorp could adjourn,
postpone or continue the Special Meeting, and any adjourned session of the
Special Meeting, to use the additional time to solicit additional proxies in
favor of Proposal 1, including the solicitation of proxies from the shareholders
that have previously voted against such proposal to approve the amendment to
Central Jersey Bancorp's Certificate of Incorporation to authorize for issuance
10,000,000 shares of Preferred Stock. Among other things, approval of the
adjournment, postponement or continuation proposal could mean that, even if
proxies representing a sufficient number of votes against Proposal 1 have been
received, Central Jersey Bancorp could adjourn, postpone or continue the Special
Meeting without a vote on Proposal 1 and seek to convince the holders of those
shares to change their votes to vote in favor of Proposal 1.
Central Jersey Bancorp's Board of Directors believes that if the number
of shares of its Common Stock present or represented at the Special Meeting and
voting in favor of Proposal 1 is insufficient to approve the amendment to
Central Jersey Bancorp's Certificate of Incorporation to authorize for issuance
10,000,000 shares of Preferred Stock, it is in the best interests of the
shareholders to enable the Board of Directors, for a limited period of time, to
continue to seek to obtain a sufficient number of additional votes to approve
such proposal.
Vote Required
- -------------
A majority of the shareholders entitled to vote present in person or by
proxy is required to approve the proposal to grant to management the authority
to adjourn, postpone or continue the Special Meeting. No proxy that is
specifically marked "AGAINST" Proposal 1 will be voted in favor of the
adjournment, postponement or continuation proposal, unless the proxy is
specifically marked "FOR" the discretionary authority to adjourn, postpone or
continue the Special Meeting to a later date.
16
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO GRANT MANAGEMENT
THE DISCRETIONARY AUTHORITY TO ADJOURN THE SPECIAL MEETING TO A DATE NOT LATER
THAN DECEMBER 30, 2008.
17
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
administrative offices for inclusion in its proxy statement and form of proxy
relating to that meeting no later than December 31, 2008. Central Jersey
Bancorp's By-laws contain certain procedures which must be followed in
connection with shareholder proposals.
INCORPORATION OF FINANCIAL INFORMATION
The following financial statements and other portions of Central Jersey
Bancorp's Annual Report on Form 10-K for the fiscal year ended December 31,
2007, as filed with the SEC on March 14, 2008 (the "Form 10-K"), the Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2008, as filed
with the Commission on November 7, 2008 (the "Form 10-Q"), and the Current
Report on Form 8-K, as filed with the Commission on October 21, 2008 (the "Form
8-K"), are incorporated by reference herein:
o financial statements and supplementary financial information
of Central Jersey Bancorp appearing on pages F-1 through F-36
of the Form 10-K and in Part I, Item 1 of the Form 10-Q;
o management's discussion and analysis of financial condition
and results of operations appearing in Part II, Item 7 of the
Form 10-K and Part I, Item 2 of the Form 10-Q;
o quantitative and qualitative disclosures about market risk
appearing in Part II, Item 7A of the Form 10-K and Part 1,
Item 3 of the Form 10-Q; and
o financial information appearing in the Form 8-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 Form 10-K, Form 10-Q and Form 8-K, as
filed with the SEC. Requests should be addressed to Mr. James S. Vaccaro,
Chairman, President and Chief Executive Officer, Central Jersey Bancorp, 1903
Highway 35, Oakhurst, New Jersey 07755.
All documents filed with the SEC by Central Jersey Bancorp pursuant to
sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this proxy statement and prior to the date of the meeting are incorporated
herein by reference. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this proxy statement to the extent that a statement
contained in another subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement.
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 served as
Central Jersey Bancorp's independent public accountants for the year ended
December 31, 2007. Beard Miller Company
18
serves as Central Jersey Bancorp's independent public accountants for the year
ended December 31, 2008. Representatives from KPMG and Beard Miller Company will
not be present at the Special Meeting.
OTHER MATTERS
It is not expected that any matter not referred to herein will be
presented for action at the Special Meeting. If any other matters are properly
brought before the Special 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 Special Meeting in accordance with their
best judgment.
SHAREHOLDERS SHARING THE SAME ADDRESS
Central Jersey Bancorp has adopted a procedure called "householding,"
which has been approved by the SEC. Under this procedure, Central Jersey Bancorp
is delivering only one copy of the proxy statement to multiple shareholders who
share the same mailing address and have the same last name, unless Central
Jersey Bancorp has received contrary instructions from an affected shareholder.
This procedure reduces Central Jersey Bancorp's printing costs, mailing costs
and fees. Shareholders who participate in householding will continue to receive
separate proxy cards.
Central Jersey Bancorp will deliver promptly upon written or oral
request a separate copy of the proxy statement to any shareholder at a shared
address to which a single copy of the proxy statement was delivered. To receive
a separate copy of the proxy statement, you may write to Mr. James S. Vaccaro,
Chairman, President and Chief Executive Officer, Central Jersey Bancorp, 1903
Highway 35, Oakhurst, New Jersey 07755, or call (732) 663-4000.
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
Robert S. Vuono
Secretary
19
APPENDIX A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CENTRAL JERSEY BANCORP
Central Jersey Bancorp, incorporated under the laws of the State of New
Jersey on March 7, 2000 (the "Corporation"), does hereby restate its Certificate
of Incorporation pursuant to Section 14A:9-5 of the New Jersey Business
Corporation Act (the "Act"), to embody in one document its original Certificate
of Incorporation and all amendments thereto.
The Corporation hereby certifies the following, which (i) sets forth in
full its Certificate of Incorporation as of this date, and (ii) supercedes and
replaces its original Certificate of Incorporation and all amendments thereto:
ARTICLE I
NAME OF CORPORATION
-------------------
The name of the Corporation is Central Jersey Bancorp.
ARTICLE II
PURPOSE OF CORPORATION
----------------------
The purpose for which the Corporation is organized is to engage in any
activity within the purposes for which corporations may be organized under the
Act.
ARTICLE III
CAPITAL STOCK
-------------
Section 3.1. Total Number of Shares of Capital Stock. The total number
---------------------------------------
of shares of all classes of stock which the Corporation has authority to issue
is one hundred and ten million (110,000,000), consisting of one hundred million
(100,000,000) shares of common stock, par value $.01 per share ("Common Stock"),
and ten million (10,000,000) shares of preferred stock, par value $.01 per share
("Preferred Stock").
Section 3.2. Common Stock.
------------
(a) The holders of shares of Common Stock shall be entitled to one vote
for each share so held with respect to all matters voted on by the shareholders
of the Corporation.
(b) Subject to any prior or superior right of the Preferred Stock, upon
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, after payment shall have been made to the holders of
Preferred Stock of the full amount to which they are entitled, the holders of
Common Stock shall be entitled to receive that portion of the
A-1
remaining funds to be distributed. Such funds shall be paid to the holders of
Common Stock on the basis of the number of shares of Common Stock held by each
of them.
(c) Dividends may be paid on the Common Stock as and when declared by
the Board of Directors of the Corporation.
Section 3.3. Preferred Stock.
---------------
(a) The Preferred Stock may from time to time be divided into and
issued in series. The different series of Preferred Stock shall be established
and designated, and the variations in the relative rights and preferences as
between the different series shall be fixed and determined, by the Board of
Directors of the Corporation as hereinafter provided. In all other respects, all
shares of the Preferred Stock shall be identical.
(b) The Board of Directors of the Corporation is hereby expressly
authorized, subject to the provisions hereof, to establish series of Preferred
Stock and to fix and determine for each series:
(i) the distinctive designation of such series and the number
of shares which shall constitute such series, which number may be increased
(except as otherwise provided by the Board of Directors of the Corporation in
creating such series) or decreased (but not below the number of shares then
outstanding) from time to time by the Board of Directors of the Corporation;
(ii) the dividend rate or rates and preferences, if any, to
which the shares of such series shall be entitled, the times at and conditions
upon which dividends shall be paid, any limitations, restrictions or conditions
on the payment of dividends, and whether dividends shall be cumulative and, if
cumulative, the terms upon and dates from which such dividends shall be
cumulative, which dates may differ for shares of any one series issued at
different times;
(iii) whether or not the shares of such series shall be
redeemable, and, if redeemable, the redemption prices which the shares of such
series shall be entitled to receive and the terms and manner of redemption;
(iv) the preferences, if any, and the amounts which the shares
of such series shall be entitled to receive and all other special or relative
rights of the shares of such series, upon any voluntary or involuntary
liquidation, dissolution or winding up of, or upon any distribution of the
assets of, the Corporation;
(v) the obligation, if any, of the Corporation to maintain a
purchase, retirement or sinking fund for shares of such series and the
provisions with respect thereto;
(vi) the term, if any, upon which the shares of such series
shall be convertible into, or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or classes of
stock of the Corporation, including the rate of conversion or exchange and the
terms of adjustments, if any;
A-2
(vii) the terms and conditions of the voting rights, if any,
of the holders of the shares of such series, including the conditions under
which the shares of such series shall vote as a separate class; and
(viii) such other designating preferences, powers,
qualifications and special or relative rights or privileges of such series to
the full extent now or hereafter permitted by the laws of the State of New
Jersey.
(c) If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
(d) Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be paid or
declared and set apart for payment on the Common Stock with respect to the same
dividend period.
ARTICLE IV
REGISTERED OFFICE AND AGENT
---------------------------
The address of the Corporation's registered office in the State of New
Jersey is 1903 Highway 35, Oakhurst, New Jersey 07755, and the Corporation's
registered agent at such address is James S. Vaccaro.
ARTICLE V
BOARD OF DIRECTORS
------------------
The current Board of Directors of the Corporation consists of ten (10)
directors, and the names and addresses of the directors are set forth below:
James G. Aaron Paul A. Larson, Jr.
1903 Highway 35 1903 Highway 35
Oakhurst, New Jersey 07755 Oakhurst, New Jersey 07755
Mark R. Aikins Carmen M. Penta
1903 Highway 35 1903 Highway 35
Oakhurst, New Jersey 07755 Oakhurst, New Jersey 07755
John A. Brockriede Mark G. Solow
1903 Highway 35 1903 Highway 35
Oakhurst, New Jersey 07755 Oakhurst, New Jersey 07755
George S. Callas James S. Vaccaro
1903 Highway 35 1903 Highway 35
Oakhurst, New Jersey 07755 Oakhurst, New Jersey 07755
A-3
John F. McCann Robert S. Vuono
1903 Highway 35 1903 Highway 35
Oakhurst, New Jersey 07755 Oakhurst, New Jersey 07755
ARTICLE VI
LIMITATION ON LIABILITY OF DIRECTORS AND OFFICERS
-------------------------------------------------
To the fullest extent permitted by the laws of the State of New Jersey,
as they exist or may hereafter be amended, the directors and officers of the
Corporation shall not be personally liable to the Corporation or to any of its
shareholders for breach of any duty owed to the Corporation or its shareholders,
except that the provisions of this Article VI shall not relieve a director or
officer from liability for any breach of duty based upon an act or omission (a)
in breach of such person's duty of loyalty to the Corporation or its
shareholders, (b) not in good faith or involving a knowing violation of law, or
(c) resulting in receipt by such person of an improper personal benefit. Any
amendment to this Certificate of Incorporation, or change in law, shall not
adversely affect any then existing right or protection of a director or officer
of the Corporation as provided for herein.
IN WITNESS WHEREOF, Central Jersey Bancorp has caused this Amended and
Restated Certificate of Incorporation to be executed on the _____ day of
__________, 2008, by a duly authorized officer.
ATTEST: CENTRAL JERSEY BANCORP
By: By:
--------------------------------- -----------------------
Name: Anthony Giordano, III Name: James S. Vaccaro
Title: Executive Vice President, Title: Chairman, President and
Chief Financial Officer, Chief Executive Officer
Treasurer and Assistant Secretary
A-4
APPENDIX B
The following is a summary of the terms of the Capital Purchase Program issued
by the U.S. Department of Treasury. These terms are subject to change as
determined by the U.S. Department of Treasury.
Capital Purchase Program
Senior Preferred Stock and Warrants
Summary of Senior Preferred Terms
---------------------------------
Issuer: Qualifying Financial Institution ("QFI") means (i)
any U.S. bank or U.S. savings association not
controlled by a Bank Holding Company ("BHC") or
Savings and Loan Holding Company ("SLHC"); (ii) any
U.S. BHC, or any U.S. SLHC which engages only in
activities permitted for financial holdings companies
under Section 4(k) of the Bank Holding Company Act,
and any U.S. bank or U.S. savings association
controlled by such a qualifying U.S. BHC or U.S.
SLHC; and (iii) any U.S. BHC or U.S. SLHC whose U.S.
depository institution subsidiaries are the subject
of an application under Section 4(c)(8) of the Bank
Holding Company Act; except that QFI shall not mean
any BHC, SLHC, bank or savings association that is
controlled by a foreign bank or company. For purposes
of this program, "U.S. bank", "U.S. savings
association", "U.S. BHC" and "U.S. SLHC" means a
bank, savings association, BHC or SLHC organized
under the laws of the United Sates or any State of
the United States, the District of Columbia, any
territory or possession of the United States, Puerto
Rico, Northern Mariana Islands, Guam, American Samoa,
or the Virgin Islands. The United States Department
of the Treasury will determine eligibility and
allocation for QFIs after consultation with the
appropriate Federal banking agency.
Initial Holder: United States Department of the Treasury (the "UST").
Size: QFIs may sell preferred to the UST subject to the
limits and terms described below.
Each QFI may issue an amount of Senior Preferred
equal to not less than 1% of its risk-weighted assets
and not more than the lesser of (i) $25 billion and
(ii) 3% of its risk-weighted assets.
Security: Senior Preferred, liquidation preference $1,000 per
share. (Depending upon the QFI's available authorized
preferred shares, the UST may agree to purchase
Senior Preferred with a higher liquidation preference
per share, in which case the UST may require the QFI
to appoint a depositary to hold the Senior Preferred
and issue depositary receipts.)
B-1
Ranking: Senior to common stock and pari passu with existing
preferred shares other than preferred shares which by
their terms rank junior to any existing preferred
shares.
Regulatory
Capital Status: Tier 1.
Term: Perpetual life.
Dividend: The Senior Preferred will pay cumulative dividends at
a rate of 5% per annum until the fifth anniversary of
the date of this investment and thereafter at a rate
of 9% per annum. For Senior Preferred issued by banks
which are not subsidiaries of holding companies, the
Senior Preferred will pay non-cumulative dividends at
a rate of 5% per annum until the fifth anniversary of
the date of this investment and thereafter at a rate
of 9% per annum. Dividends will be payable quarterly
in arrears on February 15, May 15, August 15 and
November 15 of each year.
Redemption: Senior Preferred may not be redeemed for a period of
three years from the date of this investment, except
with the proceeds from a Qualified Equity Offering
(as defined below) which results in aggregate gross
proceeds to the QFI of not less than 25% of the issue
price of the Senior Preferred. After the third
anniversary of the date of this investment, the
Senior Preferred may be redeemed, in whole or in
part, at any time and from time to time, at the
option of the QFI. All redemptions of the Senior
Preferred shall be at 100% of its issue price, plus
(i) in the case of cumulative Senior Preferred, any
accrued and unpaid dividends and (ii) in the case of
non-cumulative Senior Preferred, accrued and unpaid
dividends for the then current dividend period
(regardless of whether any dividends are actually
declared for such dividend period), and shall be
subject to the approval of the QFI's primary federal
bank regulator.
"Qualified Equity Offering" shall mean the sale by
the QFI after the date of this investment of Tier 1
qualifying perpetual preferred stock or common stock
for cash.
Following the redemption in whole of the Senior
Preferred held by the UST, the QFI shall have the
right to repurchase any other equity security of the
QFI held by the UST at fair market value.
Restrictions
on Dividends: For as long as any Senior Preferred is outstanding,
no dividends may be declared or paid on junior
preferred shares, preferred shares ranking pari passu
with the Senior Preferred, or common shares (other
than in the case of pari passu preferred shares,
dividends on a pro rata basis with the Senior
Preferred), nor may the QFI repurchase or redeem any
junior
B-2
preferred shares, preferred shares ranking pari passu
with the Senior Preferred or common shares, unless
(i) in the case of cumulative Senior Preferred all
accrued and unpaid dividends for all past dividend
periods on the Senior Preferred are fully paid or
(ii) in the case of non-cumulative Senior Preferred
the full dividend for the latest completed dividend
period has been declared and paid in full.
Common
Dividends: The UST's consent shall be required for any increase
in common dividends per share until the third
anniversary of the date of this investment unless
prior to such third anniversary the Senior Preferred
is redeemed in whole or the UST has transferred all
of the Senior Preferred to third parties.
Repurchases: The UST's consent shall be required for any share
repurchases (other than (i) repurchases of the Senior
Preferred and (ii) repurchases of junior preferred
shares or common shares in connection with any
benefit plan in the ordinary course of business
consistent with past practice) until the third
anniversary of the date of this investment unless
prior to such third anniversary the Senior Preferred
is redeemed in whole or the UST has transferred all
of the Senior Preferred to third parties. In
addition, there shall be no share repurchases of
junior preferred shares, preferred shares ranking
pari passu with the Senior Preferred, or common
shares if prohibited as described above under
"Restrictions on Dividends".
Voting Rights: The Senior Preferred shall be non-voting,
other than class voting rights on (i) any
authorization or issuance of shares ranking senior to
the Senior Preferred, (ii) any amendment to the
rights of Senior Preferred, or (iii) any merger,
exchange or similar transaction which would adversely
affect the rights of the Senior Preferred.
If dividends on the Senior Preferred are not paid in
full for six dividend periods, whether or not
consecutive, the Senior Preferred will have the right
to elect 2 directors. The right to elect directors
will end when full dividends have been paid for four
consecutive dividend periods.
Transferability: The Senior Preferred will not be subject to any
contractual restrictions on transfer. The QFI will
file a shelf registration statement covering the
Senior Preferred as promptly as practicable after the
date of this investment and, if necessary, shall take
all action required to cause such shelf registration
statement to be declared effective as soon as
possible. The QFI will also grant to the UST
piggyback registration rights for the Senior
Preferred and will take such other steps as may be
reasonably requested to facilitate the transfer of
the Senior Preferred including, if requested by the
UST, using reasonable efforts to list the Senior
Preferred on a national securities exchange. If
requested by the UST, the QFI will
B-3
appoint a depositary to hold the Senior Preferred and
issue depositary receipts.
Executive
Compensation: As a condition to the closing of this investment, the
QFI and its senior executive officers covered by the
EESA shall modify or terminate all benefit plans,
arrangements and agreements (including golden
parachute agreements) to the extent necessary to be
in compliance with, and following the closing and for
so long as UST holds any equity or debt securities of
the QFI, the QFI shall agree to be bound by, the
executive compensation and corporate governance
requirements of Section 111 of the EESA and any
guidance or regulations issued by the Secretary of
the Treasury on or prior to the date of this
investment to carry out the provisions of such
subsection. As an additional condition to closing,
the QFI and its senior executive officers covered by
the EESA shall grant to the UST a waiver releasing
the UST from any claims that the QFI and such senior
executive officers may otherwise have as a result of
the issuance of any regulations which modify the
terms of benefits plans, arrangements and agreements
to eliminate any provisions that would not be in
compliance with the executive compensation and
corporate governance requirements of Section 111 of
the EESA and any guidance or regulations issued by
the Secretary of the Treasury on or prior to the date
of this investment to carry out the provisions of
such subsection.
Summary of Warrant Terms
------------------------
Warrant: The UST will receive warrants to purchase a number of
shares of common stock of the QFI having an aggregate
market price equal to 15% of the Senior Preferred
amount on the date of investment, subject to
reduction as set forth below under "Reduction". The
initial exercise price for the warrants, and the
market price for determining the number of shares of
common stock subject to the warrants, shall be the
market price for the common stock on the date of the
Senior Preferred investment (calculated on a
20-trading day trailing average), subject to
customary anti-dilution adjustments. The exercise
price shall be reduced by 15% of the original
exercise price on each six-month anniversary of the
issue date of the warrants if the consent of the QFI
stockholders described below has not been received,
subject to a maximum reduction of 45% of the original
exercise price.
Term: 10 years
Exercisability: Immediately exercisable, in whole or in part
Transferability: The warrants will not be subject to any contractual
restrictions on transfer; provided that the UST may
only transfer or exercise an aggregate of one-
B-4
half of the warrants prior to the earlier of (i) the
date on which the QFI has received aggregate gross
proceeds of not less than 100% of the issue price of
the Senior Preferred from one or more Qualified
Equity Offerings and (ii) December 31, 2009. The QFI
will file a shelf registration statement covering the
warrants and the common stock underlying the warrants
as promptly as practicable after the date of this
investment and, if necessary, shall take all action
required to cause such shelf registration statement
to be declared effective as soon as possible. The QFI
will also grant to the UST piggyback registration
rights for the warrants and the common stock
underlying the warrants and will take such other
steps as may be reasonably requested to facilitate
the transfer of the warrants and the common stock
underlying the warrants. The QFI will apply for the
listing on the national exchange on which the QFI's
common stock is traded of the common stock underlying
the warrants and will take such other steps as may be
reasonably requested to facilitate the transfer of
the warrants or the common stock.
Voting: The UST will agree not to exercise voting power with
respect to any shares of common stock of the QFI
issued to it upon exercise of the warrants.
Reduction: In the event that the QFI has received aggregate
gross proceeds of not less than 100% of the issue
price of the Senior Preferred from one or more
Qualified Equity Offerings on or prior to December
31, 2009, the number of shares of common stock
underlying the warrants then held by the UST shall be
reduced by a number of shares equal to the product of
(i) the number of shares originally underlying the
warrants (taking into account all adjustments) and
(ii) 0.5.
Consent: In the event that the QFI does not have sufficient
available authorized shares of common stock to
reserve for issuance upon exercise of the warrants
and/or stockholder approval is required for such
issuance under applicable stock exchange rules, the
QFI will call a meeting of its stockholders as soon
as practicable after the date of this investment to
increase the number of authorized shares of common
stock and/or comply with such exchange rules, and to
take any other measures deemed by the UST to be
necessary to allow the exercise of warrants into
common stock.
Substitution: In the event the QFI is no longer listed or traded on
a national securities exchange or securities
association, or the consent of the QFI stockholders
described above has not been received within 18
months after the issuance date of the warrants, the
warrants will be exchangeable, at the option of the
UST, for senior term debt or another economic
instrument or security of the QFI such that the UST
is appropriately compensated for the value of the
warrant, as determined by the UST.
B-5
REVOCABLE PROXY
CENTRAL JERSEY BANCORP
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
-----------------------------------------------------------
For the Special Meeting of Shareholders
to be held on December 18, 2008
The undersigned, a shareholder of CENTRAL JERSEY BANCORP, hereby constitutes and
appoints JAMES S. VACCARO and ROBERT S. VUONO, and each of them, as proxies of
the undersigned with full power of substitution, for and in the name, place and
stead of the undersigned, to attend the Special Meeting of Shareholders of said
Central Jersey Bancorp called and to be held at the principal offices of Central
Jersey Bancorp, located at 1903 Highway 35, Oakhurst, New Jersey, on Thursday,
December 18, 2008 at 8:00 a.m., local time (the "Special Meeting") and any
adjournment, postponement or continuation thereof, and thereat to vote as
designated hereon the number of shares the undersigned would be entitled to vote
and with all powers the undersigned would possess if personally present.
1. The proposal to approve the amendment to Central Jersey Bancorp's
Certificate of Incorporation to authorize for issuance 10,000,000
shares of preferred stock.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. The proposal to grant to management the authority to adjourn, postpone
or continue the Special Meeting.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. The transaction of such other business as may properly come before the
Special Meeting or any adjournment, postponement or continuation
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" THE ABOVE PROPOSALS; PROVIDED, THAT NO PROXY THAT IS SPECIFICALLY MARKED
"AGAINST" PROPOSAL 1 WILL BE VOTED IN FAVOR OF PROPOSAL 2, UNLESS THE PROXY IS
SPECIFICALLY MARKED "FOR" PROPOSAL 2.
----------------------------------------------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
, 2008
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Shareholder sign above Co-holder (if any) sign above
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^ Detach above card, sign, date and mail in postage paid envelope provided. ^
CENTRAL JERSEY BANCORP
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Please sign exactly as your name appears herein. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership or limited liability company, please sign in
partnership or limited liability company name by authorized person.
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PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.