SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
B.M.J. FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
B.M.J. FINANCIAL CORP.
243 Route 130, Bordentown, New Jersey 08505-1001
(609) 298-5500
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held April 26, 1996
TO THE SHAREHOLDERS OF
B.M.J. FINANCIAL CORP.
NOTICE IS HEREBY GIVEN that, pursuant to call of its Directors, the Annual
Meeting of Shareholders (the "Meeting") of B.M.J. Financial Corp. ("B.M.J.")
will be held at Nottingham Ballroom at Nottingham Fire Company, located at 200
Mercer Street, Hamilton Square, New Jersey on Friday, April 26, 1996 at 10:00
a.m. for the following purposes:
1. To elect three Class A Directors to serve for the ensuing three years
and until their respective successors have been duly elected and
qualified.
2. To ratify the selection of Coopers & Lybrand as B.M.J.'s independent
public accountants for the 1996 fiscal year.
3. To transact such other business as may properly come before the Meeting
and any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 15, 1996 as the
record date for the determination of the shareholders entitled to notice of and
to vote at the Meeting and any adjournment or postponement thereof.
Whether or not you plan to attend the Meeting, you are urged to complete, date,
sign and promptly return the enclosed Proxy, which is solicited by the Board of
Directors, in the envelope which has been provided. The return of the Proxy will
not affect your right to vote in person if you attend the Meeting.
Refreshments will be served prior to the Meeting. If you plan to attend the
Meeting, please return the enclosed card by April 19, 1996.
BY ORDER OF THE BOARD OF DIRECTORS,
Donald W. James
Secretary
March 28, 1996
B.M.J. FINANCIAL CORP.
243 Route 130, Bordentown, New Jersey 08505-1001
(609)298-5500
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of B.M.J. Financial Corp. ("B.M.J.") for
use at the Annual Meeting of Shareholders (the "Meeting") to be held at
Nottingham Ballroom at Nottingham Fire Company, located at 200 Mercer Street,
Hamilton Square, New Jersey on Friday, April 26, 1996 at 10:00 a.m., and at any
adjournment or postponement thereof. Any proxy executed and returned pursuant to
this solicitation may be revoked at any time before it has been exercised by
delivering a written notice of revocation to B.M.J.'s Secretary, by executing
and delivering to B.M.J.'s Secretary a later dated proxy, or by voting in person
at the Meeting.
The Board of Directors does not intend to bring any matters before the
Meeting other than the matters specifically referred to in the notice of the
Meeting, nor does the Board of Directors know of any matter which anyone else
proposes to present for action at the Meeting. However, if any other matters
properly come before the Meeting, the persons named in the accompanying form of
proxy or their duly constituted substitutes acting at the Meeting will be deemed
authorized to vote or otherwise act thereon in accordance with their judgment in
such matters.
In the absence of contrary instructions, the shares will be voted "For"
the nominees of the Board of Directors in the election of directors and "For"
the ratification of Coopers & Lybrand as B.M.J.'s independent public
accountants. The Board of Directors has fixed the close of business on March 15,
1996 as the record date for the determination of the shareholders entitled to
vote at the Meeting. This proxy statement, the foregoing notice, and the
enclosed proxy are being mailed to shareholders on or about March 22, 1996.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on all proposals (but not on
the election of directors) and will be counted as present for purposes of the
item on which the abstention is noted. The ratification of Coopers & Lybrand as
B.M.J.'s independent public accountants requires a majority of the votes cast
with respect to such proposal. Abstentions and broker non-votes will not be
considered as votes cast with respect to such proposal.
VOTING SECURITIES AND
PRINCIPAL OWNERS THEREOF
The only class of equity securities of B.M.J. eligible to vote is its
Common Stock, par value $1.00 per share. At the close of business on March 15,
1996, the record date to determine shareholders entitled to vote at the Meeting,
B.M.J. had outstanding 7,641,249 shares of Common Stock.
The presence, in person or by proxy, of shareholders entitled to cast a
majority of votes will constitute a quorum. On all matters voted upon at the
Meeting and any adjournment or postponement thereof, each record holder of
Common Stock will be entitled to one vote per share. In the election of
directors, shareholders do not have cumulative voting rights.
The following table sets forth as of March 15, 1996 certain information
regarding B.M.J.'s Common Stock beneficially owned by (i) each director or
nominee of B.M.J., (ii) all directors and officers of B.M.J. as a group, and
(iii) each person known to the Company to own more than 5% of B.M.J.'s Common
Stock:
Amount and Nature of Percentage
Name Beneficial Ownership (1) of Class (2)
- ---- ------------------------ ----------
Thomas P. Butz 10,685 *
Harry R. Disbrow 124,693(3) 1.63%
Elmer J. Elias 4,000 *
Frank N. Elliott 3,800(4) *
William C. Gray 33,468(5) *
Peter A. Inverso 39,525(6) *
Richard M. Kohn 22,829 *
Frank M. Monaghan 34,504(7) *
Robert B. Murray 800 *
Edwin W. Townsend 216,983(8) 2.84%
Jerome H. Walther 500 *
All Directors and Officers
as a group (17 people) 609,595(9) 7.84%
Richard A. Alaimo and
Richard A. Alaimo Associates
Profit-Sharing Plan (10) 487,513(11) 6.38%
Eva G. Murr(12) 817,322(13) 10.70%
- ---------------------
*Less than 1%
(1) Each person has sole investment and voting power with respect to the
shares indicated, except as otherwise noted. The inclusion herein of
any shares deemed beneficially owned does not constitute admission of
beneficial ownership of those shares.
(2) The number of shares deemed outstanding includes 7,641,249 shares
outstanding as of March 15, 1996, and any shares issuable upon exercise
of stock options held by the person or entity in question that are
exercisable within 60 days following March 15, 1996 and any shares
issuable upon conversion of B.M.J.'s 7 1/2% Convertible Subordinated
Capital Notes due July 15, 1996 (the "7 1/2% Notes") held by the person
or entity in question.
(3) Includes 780 shares held by Mr. Disbrow's wife and 326 shares issuable
upon exercise of stock options granted under the Director Stock Option
Plan that are exercisable within 60 days following March 15, 1996.
(4) Includes 371 shares held by Mr. Elliott's wife.
(5) Includes 5,119 shares held by Mr. Gray's wife, 1,181 shares held by Mr.
Gray as custodian for his son, and 21,091 shares issuable upon
conversion of B.M.J.'s 7 1/2% Notes.
(6) Includes 1,401 shares held by Mr. Inverso's wife and 6,977 shares held
by Mrs. Inverso as custodian for their children, as to which he
disclaims beneficial ownership. Includes 918 shares issuable upon
exercise of stock options granted under the Director Stock Option Plan
that are exercisable within 60 days following March 15, 1996 and 281
shares issuable upon conversion of B.M.J.'s 7 1/2% Notes.
(7) Includes 6,569 shares held by Mr. Monaghan's wife, 5,413 shares held by
Chesley & Cline, Inc. Profit Sharing Trust, of which Mr. Monaghan is a
trustee, 2,769 shares issuable upon exercise of stock options granted
under the Director Stock Option Plan that are exercisable within 60
days following March 15, 1996, and 1,124 shares issuable upon
conversion of B.M.J.'s 7 1/2% Notes.
(8) Includes 1,927 shares held by Mr. Townsend's wife, 110,302 shares held
by Tobro Investments, of which Mr. Townsend is a co-trustee, and 2,080
shares issuable upon conversion of B.M.J.'s 7 1/2% Note.
(9) Includes as to all Directors and Officers as a group, 109,938 shares
issuable upon exercise of stock options held by them that are
exercisable within 60 days following March 15, 1996 and 24,970 shares
issuable upon conversion of B.M.J.'s 7 1/2% Notes.
(10) The address shown by these investors in their Schedule 13D is 200 High
Street, Mount Holly, New Jersey, 08060.
(11) Includes 187,368 shares owned by Mr. Alaimo, 299,315 shares owned by
Richard A. Alaimo Associates Profit Sharing Plan, and 830 shares held
by Mr. Alaimo as custodian for his grandchildren..
(12) The address shown by this investor in her Schedule 13D is 280 Park
Avenue, 23rd Floor East, New York, New York 10017.
(13) Includes 712,058 shares owned by Mrs. Murr and 105,264 shares held by
Mr. Murr as custodian for their two children.
ELECTION OF DIRECTORS
B.M.J.'s Board of Directors is divided into three classes, Class A,
Class B, and Class C. Directors serve for three-year terms, with the terms of
office of Class A, Class C, and Class B directors expiring with the 1996, 1997,
and 1998 annual meetings of shareholders, respectively.
Three Class A directors are to be elected at the Meeting, each to hold
office for three years and until their respective successors have been duly
elected and qualified. All of the nominees, Thomas P. Butz, Peter A. Inverso,
and Jerome H. Walther, are currently directors of B.M.J., and all have been
previously elected by the shareholders.
The proxies executed on the enclosed form will be voted, in the absence
of contrary instruction, for the election of the nominees named below. In the
event any one or more of such nominees shall become unavailable to accept
nomination or election as a director, the persons named in the enclosed proxy
will vote the shares which they represent for the election of such substitute
nominee as the Board of Directors may recommend.
The following table contains certain information with respect to each
director of B.M.J., including the three nominees for Class A directors.
Present
Principal Positions
Occupation for Past Director With
Name Age 5 Years (1) Since B.M.J.
- ---- --- ------------------- -------- ---------
Nominees for Class A Directors
Thomas P. Butz 60 Attorney-at-law, 1988 Director
Schuman, Butz and Babcock
since 1965.
Peter A. Inverso 57 Partner, Druker, Rahl & Fein (2) 1984 Director
Jerome H. Walther 32 Vice President, Church Capital 1995 Director
Management, Inc. (investment
advisory firm) since January, 1993. (3)
Class C Directors (Terms Expire in 1997)
Harry R. Disbrow 62 President, Bayshore Agency 1988 Director
(real estate and insurance) since 1968.
Frank N. Elliott 70 Retired; President of Rider 1992 Director
College from August, 1969 to
July, 1990.
Frank M. Monaghan 67 President, Chesley & Cline Agency 1991 Director
(insurance) since 1960.
Edwin W. Townsend 56 Vice President, 1984 Acting
Stevenson Lumber Yard, Inc. Chairman of
since 1956. (4) the Board,
Director
Present
Principal Positions
Occupation for Past Director With
Name Age 5 Years (1) Since B.M.J.
- ---- --- ------------------- -------- ---------
Class B Directors (Terms Expire in 1998)
Elmer J. Elias 61 President and Chief Executive Officer 1992 President, Chief
of B.M.J. and Executive Vice President, Executive
Mid-Jersey; Senior Vice President, Trust Officer, Director
Department, Mid-Jersey from May, 1994
to April, 1995; Formerly, was Senior
Vice President at New Jersey National
Bank since 1981. (5)
Richard M. Kohn 64 Attorney-at-law, Fox, Rothschild, 1992 Director
O'Brien & Frankel since 1993; from
1988 - 1993 was attorney-at-law,
Katzenbach, Gildea & Rudner, PA.
William C. Gray 58 President, 1984 Director
G & C Enterprises, Inc.
(Construction) since 1971.
Robert B. Murray 55 Financial Consultant since 1990; 1992 Director
from 1987 to 1990 was Executive
Vice President and Chief Credit
Policy Officer, Corestates Financial
Corp
Executive Officers Who Are Not Also Directors
Steven B. Borgna 31 Chief Credit Policy and Audit Officer Chief Credit
of B.M.J. (6) Policy and
Audit Officer
Nina L. Gowaty 44 Senior Vice President, Human Resources (7) Sr. Vice President
Donald W. James 43 Vice President and Secretary of B.M.J. Vice President
since 1991. and Secretary
Joseph M. Reardon 43 Chief Financial Officer of B.M.J. and Chief Financial
Executive Vice President of Mid-Jersey (8) Officer
James E. Scattergood 45 Senior Vice President, Administration Sr. Vice President
of B.M.J. since April 1990.
John F. Tremblay 47 President, Mid-Jersey (9) Executive Vice President
- ---------------------
(1) Unless otherwise noted, the principal employment of each of the directors
identified above has been as an officer of B.M.J. or The Bank of Mid-Jersey
("Mid-Jersey"), a wholly-owned subsidiary of B.M.J.
(2) On January 7, 1994, Mr. Inverso became a partner in the accounting firm of
Druker, Rahl & Fein. From July 1, 1993 to January 7, 1994, he was a partner
in the accounting firm of Rosenberg, Druker & Co. Before that, he was a
partner in the accounting firm of Kelly, Massad, Inverso & Co. since
January, 1990.
(3) Before joining Church Capital Management, Inc., Jerome Walther served as a
stock consultant from 1990 until January, 1993. Before that, he served as an
analyst with Bear, Stearns & Co., Inc. from 1986 to 1990.
(4) Mr. Townsend was appointed Acting Chairman of the Board of B.M.J. on April
5, 1995, following the sudden death of John H. Walther, then President,
Chief Executive Officer, and Chairman of the Board.
(5) Mr. Elias was appointed President and Chief Executive Officer of B.M.J.
effective January 1, 1996 and Executive Vice President of Mid-Jersey, also
effective January 1, 1996. He had been Acting President and Chief Executive
Officer of B.M.J. from April 5, 1995.
(6) Mr. Borgna was named Chief Credit Policy Officer effective January 1, 1996
and has been Chief Audit Officer since January 1, 1994. From August 1992
through December 1993, he was Chief Loan Review Officer at B.M.J. From May
1990 to August 1992, he was Assistant Vice President at First Fidelity Bank,
NA.
(7) Mrs. Gowaty was appointed Senior Vice President, Human Resources, on July 5,
1994. Before that, she was Vice President, Human Resources since 1989.
(8) Mr. Reardon was appointed Executive Vice President of Mid-Jersey effective
January 1, 1996 and has been Chief Financial Officer of B.M.J. since May
1993. Before that, he was Senior Vice President and Treasurer since April
1990.
(9) Mr. Tremblay was appointed President of Mid-Jersey effective January 1, 1996
and Executive Vice President of B.M.J., also effective January 1, 1996.
Before that, he had been Chief Credit Policy Officer at B.M.J. since August
1992. He was Senior Vice President at First Fidelity Bank, NA from May 1991
to August 1992 and Senior Vice President at First National Bank of Toms
River from January 1990 to May 1991.
Committees of the Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee,
a Compensation and Nominating Committee and a Planning Committee. The Executive
Committee is chaired by Mr. Townsend, and its other current member are Messrs.
Elias, Kohn, Monaghan, and Walther. This Committee exercises the powers of the
Board of Directors and generally supervises and directs the business of B.M.J.
between meetings of the Board to the extent provided by B.M.J.'s bylaws. There
were sixteen meetings of this Committee during 1995.
The Audit Committee is chaired by Mr. Murray, and its other current
members are Messrs. Disbrow, Gray, Inverso, and Elliott. This Committee
recommends the engagement of the independent public accountants, reviews the
arrangement and scope of the audit, reviews the performance of the independent
public accountants, reviews the activities and recommendations of B.M.J.'s
internal auditor, and considers comments made by the independent public
accountants with respect to B.M.J.'s and its subsidiaries' systems of internal
accounting control. There were three meetings of this Committee during 1995.
The Compensation and Nominating Committee is chaired by Mr. Townsend,
and its other current members are Messrs. Butz, Disbrow, Monaghan, and Murray.
This Committee reviews and recommends salary policy for employees and
administrative structure of senior management; solicits, evaluates, and
recommends to the Board candidates for membership on the Board; and approves
nominations of prospective directors to fill vacancies or to be added to the
Board of Directors of any subsidiary. There were four meetings of this Committee
held during 1995.
The Compensation and Nominating Committee will consider nominees for
directorships of B.M.J. recommended by shareholders. Nominations must be made in
writing and must be delivered or mailed to the President of B.M.J. not less than
30 days nor more than 50 days prior to any meeting of shareholders called for
election of directors; provided, however, that if less than 30 days notice of
the meeting is given to shareholders, such nomination shall be mailed or
delivered to the President of B.M.J. not later than the close of business on the
seventh day following the day on which the notice of the meeting was mailed.
Such notification shall contain the following information to the extent known to
the notifying shareholder(s): (a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of B.M.J. that will be voted for each proposed nominee
by the notifying shareholder(s); (d) the name and residence address of the
notifying shareholder(s); (e) the number of shares of capital stock of B.M.J.
owned by the notifying shareholder(s); and (f) proof of consent of the proposed
nominee.
The Planning Committee is chaired by Mr. Inverso, and its other current
members are Messrs. Butz, Elliott, and Monaghan. This Committee has overall
responsibility for the future expansion plans, if any, recommended by the Board
of Directors of any subsidiary for new branches or acquisitions. There were no
meetings of this Committee during 1995.
During 1995, B.M.J.'s Board of Directors held thirteen meetings. Each
director of B.M.J. attended at least 75% of the aggregate of the number of
meetings of the Board and the meetings of Committees upon which he then served.
Board Compensation
During 1995, each outside director of B.M.J. received an annual
retainer of $2,500, except members of the Executive Committee, paid on a
quarterly basis. Executive Committee members received an annual retainer of
$4,000 ($60,000 for the Chairman). In addition, each outside director received
$400 for each Board meeting attended and $280 for Committee meetings attended,
except Audit Committee and Executive Committee meetings, for which members
received $400 per meeting attended. In addition, Audit Committee members who are
outside directors received an additional annual stipend of $4,000 ($5,000 for
the Chairman). During 1995, B.M.J. paid $189,940 in directors' fees. Directors
who are employees of B.M.J. or its subsidiaries do not receive any fees. Outside
directors of Mid-Jersey also received directors' fees, aggregating $66,300 in
1995, for Board and committee meetings attended. Directors Emeriti of the B.M.J.
Board of Directors receive an annual stipend of $2,000.
Director Stock Option Plan
On May 6, 1991, B.M.J. adopted the Director Stock Option Plan (the
"Director Plan") for the benefit of outside directors of B.M.J. and its
subsidiaries ("Outside Directors"). The Director Plan is intended to encourage
stock ownership in B.M.J. by Outside Directors and to make service on the Boards
of Directors of B.M.J. and Mid- Jersey more attractive. B.M.J. has reserved
50,000 shares of its Common Stock for issuance under the Director Plan.
The Director Plan provides for the grant of Non-Qualified Stock Options
("NQSOs") to Outside Directors in full or partial satisfaction of the annual
retainer fees (but not any other director compensation) to which they are
entitled. Each Outside Director must irrevocably elect before the beginning of
each plan year (which runs from June 1 through May 31) or the commencement of
his or her service as Outside Director the extent to which he will receive NQSOs
in lieu of annual retainer fees. The option price for NQSOs granted under the
Director Plan equals 50% of the fair market value of B.M.J. Common Stock on the
last business day of the plan year (the "Grant Date"). The number of shares
issued upon the exercise of the option equals the amount of retainer fees
divided by 50% of the fair market value of B.M.J. Common Stock on the Grant
Date. NQSOs granted under the Director Plan must be exercised within ten years
of the Grant Date. Generally, no option may be exercised within six months after
it is granted. By their terms, the NQSOs granted under the Director Plan
generally expire one year after termination of service as an Outside Director.
Options granted under the Director Plan are not transferable by the
optionee except by will or by the laws of descent and distribution. During the
lifetime of the optionee, options may be exercised only by the optionee.
Payment for shares purchased pursuant to the exercise of options under
the Director Plan may be made in cash or, at the election of the optionee and as
the committee administering the Director Plan may in its sole discretion
determine, by tendering shares of B.M.J. Common Stock with a fair market value
equal to the total exercise price, or through a combination of cash and of
B.M.J. Common Stock.
EXECUTIVE COMPENSATION
The following tables set forth the compensation paid to the Chief
Executive Officer and each executive officer whose total annual salary and bonus
for 1995 exceeded $100,000.
The Summary Compensation Table discloses all compensation for each of
the named executive officers that was received from B.M.J. for the preceding
three years.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
Other Restricted
Annual Stock Stock All Other
Name and Compensation Award(s) Options Compensation
Principal Position Year Salary($) Bonus($) ($) ($) (#)(1) ($)(2)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
ELMER J. ELLAR, 1995 123,353 (4) 0 0 0 0 2,769
President and Chief 1994 43,712 (5) 0 0 0 231 (6) 0
Executive Officer 1993 6,825 (7) 0 0 0 0 0
JOHN F. TREMBLAY, 1995 103,461 18,410 (8) 0 0 5,000 (9) 3,103
President and Chief 1994 100,000 18,000 (10) 0 0 5,000 (11) 2,077
Executive Officer, Mid-Jersey 1993 100,000 0 0 0 30,000 (12) 200
PETER C. HAAS, JR. 1995 101,615 18,410 (8) 0 0 5,000 (9) 2,016
Senior Vice President 1994 100,000 18,000 (10) 0 0 5,000 (11) 3,000
Retail Banking (13) 1993 71,346 (14) 5,000 (15) 0 0 20,000 (16) 0
ROBERT D. BIELITZ 1995 101,615 18,410 (8) 0 0 5,000 (9) 3,048
Senior Vice President 1994 95,500 18,000 (10) 0 0 5,000 (11) 2,655
Commercial Banking (13) 1993 91,000 0 0 0 20,000 (16) 2,450
JOSEPH M. REARDON, 1995 96,307 18,410 (8) 0 0 5,000 (9) 1,389
Chief Financial Officer 1994 82,700 15,840 (17) 0 0 5,000 (11) 1,621
1993 76,115 0 0 0 20,000 (16) 1,246
(1) Includes total number of stock options awarded during fiscal year whether
vested or not.
(2) Does not include non-cash compensation which did not exceed the lesser of
$50,000, or 10% of the total annual salary and bonus.
(3) Represents matching contributions made by B.M.J. to the Deferred Savings
Plan, a 401(k) plan.
(4) Mr. Elias was named Acting President and CEO of B.M.J. on April 6, 1995
with a base salary on an annualized basis of $150,000.
(5) Mr. Elias was paid $19,700 as a consultant from January 1, 1994 until May
24, 1994 at which time he became a part-time employee and received $24,012
for the rest of 1994.
(6) 231 options granted on May 31, 1994 with a vesting period of six moths.
(7) Mr. Elias was paid $6,825 as a consultant from April 14, 1993 to May 21,
1993.
(8) Granted pursuant to B.M.J.'s Short-Term Incentive Plan.
(9) 5,000 options granted on April 20, 1995 with a vesting period of nine
years. A portion of these options is exercisable earlier subject to meeting
certain performance criteria.
(10) Consists of $9,000 in cash and 692 shares of B.M.J. Common Stock (market
price of $13.00 at time of grant). Granted pursuant to B.M.J.'s Short-Term
Incentive Plan.
(11) 5,000 options granted on June 16, 1994 with a vesting period of nine years.
A portion of these options is exercisable earlier subject to meeting
certain performance criteria.
(12) 30,000 options granted on February 18, 1993 with vesting of 10,000 shares
every six months beginning on August 18, 1993.
(13) Mr. Haas and Mr. Bielitz ceased employment with B.M.J. on January 29, 1996.
(14) Mr. Haas commenced employment with B.M.J. on March 30, 1993. His base
salary on an annualized basis for 1993 was $100,000.
(15) Bonus paid upon commencement of employment on March 30, 1993.
(16) 20,000 options granted on September 23, 1993 with vesting of 5,000 shares
every six months beginning on March 23, 1994.
(17) Consists of $7,920 in cash and 609 shares of B.M.J. Common Stock (market
price of $13.00 at time of grant). Granted pursuant to B.M.J.'s Short-Term
Incentive Plan.
STOCK OPTION GRANTS IN LAST FISCAL YEAR (1)
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR TEN-YEAR OPTION(2)
- ------------------------------------------------------------------------------------------------------------------------------------
% of Total Options
Number of Securities Granted to
Underlying Options Employees in Exercise Price
Name Granted (#) Fiscal Year ($/Sh) Expiration Date 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Elmer J. Ellar 0 0 -- -- -- --
John F. Tremblay 5,000 (3) 8 13.1875 04/19/05 41,462 105,062
Peter C. Haas, Jr. 5,000 (3) 8 13.1875 04/19/05 41,462 105,062
Robert D. Bielitz 5,000 (3) 8 13.1875 04/19/05 41,462 105,062
Joseph M. Reardon 5,000 (3) 8 13.1875 04/19/05 41,462 105,062
(1) No Stock Appreciation Rights (SARs) were granted in 1995.
(2) Potential Realizable Value is based on the assumed annual growth rates of
5% and 10% set by the Securities and Exchange Commission for the ten-year
option term, and are not intended to forecast possible future
appreciation, if any, of B.M.J.'s stock price. 5% annual growth results in
a stock price of $21.48 per share based on market price and an exercise
price of $13.1875. Actual gains, if any, on stock option exercises are
dependent on the future performance of the stock. There can be no
assurance that the amounts reflected in this table will be achieved.
(3) Accelerated vesting of a portion of the Option Shares may occur subject to
meeting certain performance criteria based on B.M.J.'s year-end return on
average assets and return on average equity. The initial vesting amount is
calculated by comparing year-end return on average assets to a baseline.
If the initial vesting amount is grater than 0, the equity adjustment
amount is calculated by comparing year-end return on average equity to a
baseline. The number of accelerated option shares equals the initial
vesting amount less the equity adjustment amount.
AGGREGATED OPTION EXERCISES IN 1995
AND FISCAL YEAR-END OPTION VALUE (1)
Number of Value of
Unexercised Unexercised
Options In-the-Money
at Year-End Options
(#) at Year-End ($)(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($)(1) Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------------
Elmer J. Ellar 231 895 0/0 0/0
John F. Tremblay 0 -- 30,900/9,100 220,200/16,987
Peter C. Haas, Jr. 0 -- 20,900/9,100 117,700/16,987
Robert D. Bielitz 0 -- 20,900/9,100 117,700/16,987
Joseph M. Reardon 0 -- 20,900/9,100 117,700/16,987
(1) Represents the aggregate market value of the underlying shares of Common
Stock at the date of exercise minus the aggregate exercise prices for
options exercised.
(2) "In-the-money options" are stock options with respect to which the market
value of the underlying shares of Common Stock exceeded the exercise price
at December 31, 1995. The value of such options is determined by
subtracting the aggregate exercise price for such options from the
aggregate fair market value of the underlying shares of Common Stock on
December 31, 1995 ($14,125).
COMPENSATION AND NOMINATING COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
This report of the Compensation and Nominating Committee sets forth
B.M.J.'s policies with respect to executive officer compensation and describes
the basis for 1995 compensation decisions made by the Committee with respect to
the Chief Executive Officer of B.M.J.
General Principles
B.M.J. bases its executive compensation program on three principles.
First, to enable B.M.J. to attract and retain talented executives, a
compensation package must be comparable to those provided by other financial
institutions of the same relative size for the same positions. Second,
compensation awards should be directly related to the financial results of
B.M.J. Third, incentive compensation should be provided where appropriate to
link the long-term interests of executives with those of stockholders in the
fulfillment of B.M.J.'s financial performance objectives and in the appreciation
of the value of B.M.J.'s stock.
Compensation Program Elements for Executive Officer Compensation
The Compensation Program for executive officers consists primarily of
base salary, short-term incentives, and long-term equity incentives, primarily
in the form of stock options.
Base Salary. Base salary levels are determined by the Compensation and
Nominating Committee, subject to approval of the full Board of Directors. Actual
base salaries are based on the performance of the officers as well as on a
comparison with salaries for similar positions in financial institutions of
similar size in the northeastern United States. The Committee uses the
benchmarks established in B.M.J.'s Salary Administration Plan. The Salary
Administration Plan was developed by the Human Resources Department with the
assistance of an independent consultant who referenced compensation surveys to
establish market pricing. The companies referenced in the Salary Administration
Plan are not the same as the companies which constitute the SNL Mid-Atlantic
Bank Index contained in the performance graph. B.M.J. believes that its
competitors for executive talent are different from the peer group against which
it is appropriate to compare financial results because B.M.J. believes that
banks with differing asset sizes require differing executive skills and,
accordingly, compete for different executive talent. The Committee attempts to
ensure that base pay levels are competitive within a range at the average of
banking companies of similar size to B.M.J. The Committee utilizes for these
purposes results from compensation surveys as well as market information from
other sources. In addition, base pay reflects B.M.J.'s overall financial results
in the short and long-term and certain strategic targets established by a
committee of B.M.J.'s senior management. With respect to the commercial and
retail banking functions, these targets are primarily based on loan generation
and fee income. With respect to support functions, the targets are based on
certain other strategic objectives related to such areas as training, regulatory
compliance, and reduction of operating expenses.
Short-Term Incentives. B.M.J. established short-term incentives for
certain officers of B.M.J. and Mid- Jersey that reward the participants for
current year financial performance. Participants receive an award based on
return on average assets in excess of an established baseline adjusted downward
if return on average equity is below an established baseline. The award may be
paid in cash or a combination of cash and B.M.J. Common Stock, at the discretion
of the Compensation and Nominating Committee. The Committee believes that a
program that pays a short-term incentive for current year financial performance
and long-term stock option awards that vest on a formula basis over time
provides an effective incentive for both current-year earnings and reinforces
long-term sustained earnings.
Long-Term Incentives. B.M.J. believes that by providing executives who
have substantial responsibility for the management and growth of B.M.J. with an
opportunity to share in the appreciation of B.M.J. stock, the long-term
interests of shareholders and such executives will be closely aligned. B.M.J.
maintains an Employee Stock Option Plan, pursuant to which executives are
eligible to receive stock options from time to time. The number of stock options
granted to executive officers is determined by the Committee based on what the
Committee considers a meaningful incentive in light of the executive's base
compensation and awards granted by financial institutions of similar size as
B.M.J. In addition, in determining whether and how many options shall be
awarded, the Compensation and Nominating Committee considers the amount and
terms of options already held by the executive officer.
During 1995, the Compensation and Nominating Committee granted
non-qualified stock options to certain key officers of B.M.J. and Mid-Jersey.
This element of compensation is viewed as a desirable long-term compensation
method because it closely links the interest of management with shareholder
value and aids in the retention and motivation of executives to improve
long-term stock market performance. Stock options are granted for Common Stock
at exercise prices equal to the market price of the Common Stock on the date of
grant and, accordingly, will only permit the executive officer to realize value
if the Common Stock price increases. In addition, all stock options granted in
1995 had a vesting period of nine years but with a provision for accelerated
vesting of a portion of the option shares subject to meeting certain performance
criteria based on B.M.J.'s year-end return on average assets and return on
average equity. The initial vesting amount is calculated by comparing year-end
return on average assets to a baseline. If the initial vesting amount is greater
than 0, the equity adjustment amount is calculated by comparing year-end return
on average equity to a baseline. The number of accelerated option shares equals
the initial vesting amount less the equity adjustment amount.
In fixing the grant of stock options to officers other than the
President, the Committee reviewed the President's recommendations for individual
awards, taking into account each officer's respective scope of accountability,
strategic and operational goals, and performance and contributions related to
the aforementioned strategic targets of each of the officers involved.
1995 Compensation for Chief Executive Officer
Elmer J. Elias was named Acting President and Chief Executive Officer
of B.M.J. on April 5, 1995, following the sudden death of then President and
CEO, John H. Walther. Mr. Elias has been a director of B.M.J. since 1992 and
worked as a consultant in the Trust Department from April 1994 to May 1994 when
he was named Senior Vice President and Department Head. Following his
appointment as Acting President and CEO, Mr. Elias was paid a salary of $123,353
with an annualized basis of $150,000. No options were granted to Mr. Elias in
1995.
The Compensation and Nominating Committee believes that B.M.J.'s
compensation policies are effective in attracting and retaining the management
talent necessary to ensure continued strong performance for our shareholders.
E.W. Townsend, Chairman F.M. Monaghan
T.P. Butz R.B. Murray
H.R. Disbrow
PERFORMANCE GRAPH
The following table represents a performance comparison for the period
from December 31, 1990 to December 31, 1995 of the cumulative total return of i)
B.M.J.'s Common Stock, ii) SNL Securities' Mid-Atlantic Bank Index, and iii) all
companies listed on NASDAQ.
COMPAISON OF 5 YEAR CUMULATIVE TOTAL RETURNS AMONG
B.M.J. FINANCIAL CORP., NASDAQ MARKET INDEX
AND SNL MID-ATLANTIC BANK INDEX*
[GRAPHIC -- GRAPH PLOTTED TO POINTS LISTED IN CHART BELOW]
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
- ----------------------------------------------------------------------------------------------------------------------
B.M.J. Financial Corp.-NJ 100.00 70.15 125.13 121.34 166.84 215.01
SNL Mid-Atlantic Bank Index 100.00 154.64 214.64 249.35 243.14 388.87
NASDAQ-US 100.00 160.56 186.86 214.51 209.68 296.30
Pension Plan:
B.M.J. maintains a noncontributory pension plan, amended during 1989
(the "Pension Plan"), that covers all employees of B.M.J. and its subsidiaries
who have completed one year of service and have attained 21 years of age. An
employee is 100% vested in the plan upon the completion of five years of
service. If an employee terminates employment prior to his/her 65th birthday and
has completed five years of service, he/she may receive his/her plan benefit in
a lump sum distribution but only if the amount of the lump sum distribution does
not exceed $3,500. The policy of B.M.J. is to fund the pension cost on an
actuarial basis. The plan provides for fixed monthly benefits on retirement at
age 65 for each year of credited service equal to the sum of: (a) 0.85% of the
participant's final "average earnings" times the number of years of credited
service, and (b) 0.65% of that portion, if any, of the participant's final
"average earnings" that is in excess of "covered compensation" applicable in the
year in which the participant retires times the number of years of credited
service, up to a maximum of 35 years. "Average earnings" means the highest
annual rate of pay (excluding bonuses and incentive payments) during any five
consecutive calendar years within the 10 calendar years immediately prior to the
normal retirement date. "Covered compensation" is an average amount of the wages
subject to social security taxes for the 35 calendar years (or such lesser
number of years that the participant is employed) ending with the year prior to
the calendar year that an individual attains the social security retirement age.
Information on "covered compensation" is published by the Social Security
Administration. Benefits are not reduced by virtue of Social Security or other
payments to which the participant may be entitled.
The following table shows the estimated annual benefits payable under
the Pension Plan upon retirement for employees with various periods of credited
service and varied amounts of final average earnings.
PENSION TABLE -- 1996
Pension Illustration for Retirement at Age 65
Payable at Age 65
Years of Service
- ----------------------------------------------------------------------------------------------------------------------
Final 10 Year 15 20 25 30 35
Average Years Years Years Years Years
Earnings
- ----------------------------------------------------------------------------------------------------------------------
$30,000 $ 4,061 $ 5,415 $ 6,769 $ 8,123 $ 9,476
50,000 8,561 11,415 14,269 17,123 19,976
70,000 13,061 17,415 21,769 26,123 30,476
90,000 17,561 23,415 29,269 35,123 40,976
110,000 22,061 29,415 36,769 44,123 51,476
130,000 26,561 35,415 44,269 53,123 61,976
150,000 31,061 41,415 51,769 62,123 72,476
Covered compensation level: $27,576
In accordance with applicable provisions of the Internal Revenue Code of 1986,
as amended, compensation above $150,000 is disregarded in calculating benefits
under the qualified plan, and the benefits payable under the qualified plan are
limited to $120,000.
Messrs. Bielitz and Haas ceased employment with B.M.J. on January 29,
1996. The estimated number of credited years of service at normal retirement age
for Messrs. Elias, Tremblay, and Reardon is 1, 3, and 10, respectively. The
average earnings of Messrs. Elias, Tremblay, and Reardon at December 31, 1995
for purposes of the Pension Plan were $150,000, $100,000, and $74,500,
respectively.
Special Change of Control Provisions
B.M.J.'s and Mid-Jersey's respective Boards of Directors have each
approved a policy whereby, upon the merger or sale of B.M.J. or Mid-Jersey, all
full-time officers serving as a Vice President or a more senior officer of the
target entity will receive a guarantee of one year's employment and of severance
pay of one month's salary for each year of service as a Vice President or more
senior officer of that entity, subject to the satisfactory performance of the
officer. Under B.M.J.'s policy, full-time officers of B.M.J. will be given
credit for past service as a Vice President or more senior officer with any
subsidiary of B.M.J.
Transactions With Management
Law firms in which Messrs. Butz and Kohn serve as partners or
principals performed legal services for B.M.J. and its subsidiaries during 1995.
Similar services will likely be performed by these firms for B.M.J. and its
subsidiaries in 1996. B.M.J. believes that such services were rendered at
competitive commercial rates no more favorable to the law firm than could be
obtained from unaffiliated third parties.
Mid-Jersey has a five-year lease with 206 Commerce Center, a
partnership in which Mr. Gray is a partner, for 24,000 square feet of space used
by it as its Operations Center. The lease will terminate in November 1999. The
rental during 1996 is $12.30 per square foot. In future years, the rental will
be adjusted based on increases or decreases (subject to certain limitations) in
the Consumer Price Index. B.M.J. believes that the lease is on terms no more
favorable to the lessor than would be the case of a lease between unrelated
parties.
Church Capital Management, Inc. ("Church Capital"), for which Jerome
Walther is Vice President, has provided investment advisory services for B.M.J.
and Mid-Jersey since June 1993. Additionally, Church Capital has provided
investment management services for B.M.J.'s Pension Plan. B.M.J. believes that
the services rendered by Church Capital are on terms no more favorable to Church
Capital than would be rendered to an unaffiliated party.
Directors and officers of B.M.J. and companies with which they are
associated were customers of, and had loan transactions with, B.M.J.'s
subsidiaries in the ordinary course of business during 1995. Additional loan
transactions may be expected to take place with the subsidiaries in the ordinary
course of business in the future. All outstanding loans and commitments included
in such transactions were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than normal risk of
collectibility or present other unfavorable features.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Act")
requires B.M.J.'s executive officers and directors, and any persons owning ten
percent or more of a registered class of B.M.J.'s equity securities, to file
with the Securities and Exchange Commission initial reports of ownership and
reports of change in ownership of B.M.J.'s equity securities. The same persons
are also required by SEC regulation to furnish B.M.J. with copies of all such
beneficial ownership statements filed under Section 16(a) of the Act.
Based solely on its review of the copies of beneficial ownership
statements received by it, and written representations that no other reports
were required for those persons, B.M.J. believes that during 1995 all beneficial
ownership statements under Section 16(a) of the Act which were required to be
filed by its officers, directors, and greater than ten percent beneficial owners
were filed in a timely manner, with one exception: A required Form 4 was not
filed by Eva Murr by August 10, 1995 to report the purchase of 2,000 shares of
Common Stock on July 20, 1995. The report was subsequently filed on September 1,
1995.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, pursuant to the recommendation of the Audit
Committee, has selected the accounting firm of Coopers & Lybrand, independent
public accountants, to serve as B.M.J.'s independent auditors for the current
fiscal year. Although shareholder approval of the Board of Directors' selection
is not required by law, the Board of Directors believes that it is advisable to
give shareholders the opportunity to ratify this selection.
The proposal will be adopted if approved by a majority of the votes
cast by shareholders entitled to vote with respect to the proposal at the
Meeting, or by their proxies. If the proposal is not approved at the Meeting,
the Board of Directors will reconsider its decision.
Coopers & Lybrand has advised B.M.J. that representatives of the firm
will be present at the Annual Meeting to make a statement, if B.M.J. so desires,
and to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS APPROVAL OF THIS PROPOSAL.
SHAREHOLDERS' PROPOSALS FOR THE NEXT ANNUAL MEETING
Proposals of shareholders to be presented at the 1997 Annual
Shareholders Meeting must be received by the Secretary of B.M.J. by November
22,1996 in order to be considered for inclusion in B.M.J.'s proxy material
relating to that meeting.
SOLICITATION OF PROXIES
The accompanying form of proxy is being solicited on behalf of the
Board of Directors of B.M.J. The cost of solicitation of proxies will be borne
by B.M.J. Officers, directors and employees of B.M.J. and its subsidiaries may
solicit proxies by personal interview, mail, telephone, and telegraph and may
request brokers and other custodians, nominees and fiduciaries to forward
soliciting material to the beneficial owners of shares held of record by such
persons. B.M.J. may reimburse such brokers, custodians, nominees, and
fiduciaries for their expenses incurred in complying with such requests.
ANNUAL REPORT ON FORM 10-K
B.M.J. will provide without charge to each person solicited by this
proxy statement, on the written request of any such person, a copy of B.M.J.'s
annual report on Form 10-K, including the financial statements and schedules
thereto, as filed with the Securities and Exchange Commission for the most
recent fiscal year. Such written requests should be directed to Donald W. James,
Secretary, at the address of B.M.J. appearing on the first page of this proxy
statement.
BY ORDER OF THE BOARD OF DIRECTORS
Donald W. James
Secretary
March 28, 1996
REVOCABLE PROXY
B.M.J. FINANCIAL CORP.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 1996
The undersigned, a shareholder of B.M.J. FINANCIAL CORP. ("B.M.J.") hereby
constitutes and appoints Frank N. Elliott, Frank M. Monaghan, and Edwin W.
Townsend and each of them acting individually as the attorney and proxy of the
undersigned, with full power of substitution, for and in the name and stead of
the undersigned to attend the Annual Meeting of Shareholders of B.M.J. to be
held on Friday, April 26, 1996 at 10:00 a.m., and any adjournment or
postponement thereof, to vote all shares which the undersigned would be entitled
to cast if personally present, upon such business as may properly come before
the meeting, including the following items, as set forth in the notice of
meeting and proxy statement.
1. FOR election of all three nominees for Class A director (except any nominee
whose name is written in by shareholder)
NOMINEES: Thomas P. Butz, Peter A. Inverso, and Jerome H. Walther
[ ] FOR [ ] AGAINST [ ] FOR ALL EXCEPT
(INSTRUCTION:To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. Ratification of Coopers & Lybrand as B.M.J.'s independent public accountants
for the 1996 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the meeting.
If not otherwise specified, the shares will be voted FOR the election of all
nominees for director and FOR ratification of the selection of Coopers & Lybrand
as B.M.J.'s independent public accountants.
The undersigned hereby revokes all previous proxies for such meeting, and
hereby acknowledges receipt of the notice of the meeting, the proxy statement
and the annual report of B.M.J. furnished therewith.
B.M.J. FINANCIAL CORP.
NOTE: If shares are registered in more than one name, all owners should sign. If
signing in a fiduciary or representative capacity, please give full title and
attach evidence of authority. Corporations please sign with full corporate name
by a duly authorized officer and affix the corporate seal.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY