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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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 Section 240.14a-12
City National Bancshares Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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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(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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[ ] Fee paid previously with preliminary materials.
[ ] 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.
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CITY NATIONAL BANCSHARES CORPORATION
900 BROAD STREET
NEWARK, NEW JERSEY 07102
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, MAY 24 , 2001
Notice is hereby given that the Annual Meeting of Stockholders of City National
Bancshares Corporation (the "Corporation") will be held at City National Bank of
New Jersey located at 900 Broad Street, Newark, New Jersey, on Thursday, May 24,
2001, at 6:00 p.m. for the following purposes:
1. To elect three (3) directors for a term of three (3) years or
until their respective successors are elected and qualified;
and
2. To ratify the appointment of KPMG LLP as the Corporation's
independent auditors for the fiscal year ending December 31,
2001.
Stockholders of record at the close of business on April 20, 2001 are entitled
to notice of and to vote at the meeting.
The Corporation's Proxy Statement and its 2000 Annual Report to Stockholders
accompany this Notice.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IT IS IMPORTANT
THAT YOUR SHARES ARE REPRESENTED AT THE MEETING. ACCORDINGLY, PLEASE SIGN, DATE
AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE, WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING. IF YOU DO ATTEND THE MEETING, YOU MAY REVOKE
YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
By order of the Board of Directors
Lemar C. Whigham
Secretary
Newark, New Jersey
March 28, 2001
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CITY NATIONAL BANCSHARES CORPORATION
900 BROAD STREET
NEWARK, NEW JERSEY 07102
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 24, 2001
INTRODUCTION
The enclosed proxy is solicited by and on behalf of the Board of Directors of
City National Bancshares Corporation (the "Corporation") for use at the Annual
Meeting of Stockholders to be held on Thursday, May 24, 2001, at 6:00 p.m., at
City National Bank of New Jersey located at 900 Broad Street, Newark, New Jersey
or at any adjournment thereof.
VOTING AND REVOCABILITY OF PROXY
The enclosed proxy is for use at the meeting if you do not attend the meeting,
or if you wish to vote your shares by proxy even if you attend the meeting. You
may revoke your proxy anytime before its exercise by (i) giving written notice
to the Secretary of the Corporation, (ii) submitting a proxy having a later
date, or (iii) appearing at the meeting and requesting to vote in person. Where
a choice or abstention is specified in the form of proxy with respect to a
matter being voted upon, the shares represented by proxy will be voted in
accordance with such specification. If a proxy is signed but no specification is
given, the shares will be voted for the director nominees named herein and in
favor of the other proposal described below.
This Proxy Statement and the enclosed proxy and 2000 Annual Report to
Stockholders are being first mailed to our stockholders on or about April 24,
2001. The Corporation will bear the cost of preparing this Proxy Statement and
of soliciting proxies in the enclosed form. Proxies may be solicited by our
employees, either personally, by letter or by telephone. Such employees will not
be specifically compensated for soliciting said proxies.
Only holders of record of the Corporation's common stock at the close of
business on April 20, 2001 (the "Record Date"), are entitled to notice of, and
to vote at, the meeting. At the close of business on the Record Date, there were
outstanding and entitled to vote, 121,406 shares of common stock, each of which
is entitled to one vote. The presence in person or by proxy of a majority of the
outstanding shares of common stock will constitute a quorum for the purposes of
the meeting.
For purposes of counting votes, abstentions and broker non-votes (i.e., shares
held by brokers that they can't vote because they haven't received voting
instructions from their customers with respect to matters voted on) will be
treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. For purposes of determining the votes cast
on any matter at the meeting, only "FOR" and "AGAINST" votes are included.
The Corporation will reimburse brokerage firms and other custodians, nominees
and fiduciaries for their expense incurred in sending proxies and proxy
materials to beneficial owners of the Corporation's common stock.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information with respect to each person
known to the Corporation to be a beneficial owner of more than 5% of the
Corporation's common stock as of March 25, 2001. This information is based on
Schedule 13D reports filed with the Securities and Exchange Commission ("SEC")
by each of the persons or entities listed below. If you wish, you may obtain
these reports from the SEC.
NUMBER OF SHARES PERCENTAGE OF TOTAL
NAME BENEFICIALLY OWNED SHARES OUTSTANDING
- ---- ------------------ ------------------
Louis E. Prezeau 19,285(1) 15.88%
Lemar C. Whigham 9,392(2) 7.74%
Carolyn M. Whigham 8,495 7.00%
Eugene Giscombe 8,950(3) 7.37%
United Negro College Fund, Inc. 6,800 5.60%
(1) Includes 1,413 shares held by his sons, 110 shares held by his daughter
and 1,402 shares held by his wife.
(2) Includes 1,000 shares held by his wife.
(3) Includes 780 shares held by his wife.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Corporation is divided into three classes of
approximately equal size. Directors are elected for three-year terms on a
staggered basis, so that the term of office of one class will expire each year
at the annual meeting of stockholders when a successor is elected and qualified
and terms of office of the other classes will extend for additional periods of
one and two years, respectively.
VOTING PROCEDURES
Directors are elected by a plurality of votes cast. Shares cannot be voted for a
greater number of persons than the number of nominees named herein. Should any
nominee be unavailable for election by reason of death or other unexpected
occurrence, the enclosed proxy, to the extent permitted by applicable law, may
be voted with discretionary authority in connection with the nomination by the
Board and the election of any substitute nominee. PROXIES, UNLESS INDICATED TO
THE CONTRARY, WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES NAMED BELOW TO
SERVE FOR A THREE (3) YEAR TERM EXPIRING AT THE 2004 ANNUAL MEETING OF
STOCKHOLDERS.
Barbara Bell Coleman, Norman Jeffries and Lemar C. Whigham, each of whom is
currently serving as a director of the Corporation, are being nominated to serve
as a director with a term expiring at the 2004 Annual Meeting of Stockholders
and until his or her respective successor is duly elected and qualified.
Information is presented below as of March 25, 2001, as to age, business
experience, the number of shares of the Corporation beneficially owned and the
period during which each director has served on the Board of Directors of the
Corporation and the Board of Directors of City National Bank of New Jersey (the
"Bank"), as well as the number of shares of such common stock beneficially owned
by all directors and executive officers as a group.
NUMBER OF
SHARES PERCENTAGE OF
BENEFICIALLY TOTAL SHARES
SINCE ENDS
NAME OF DIRECTOR AGE DIRECTOR TERM BUSINESS EXPERIENCE OWNED OUTSTANDING
- ---------------- --- -------- ---- ------------------- ------------ ------------
Douglas E. Anderson 51 1989 2002 Managing Director, The Chase Manhattan Bank 265 *
Barbara Bell Coleman 50 1995 2001 President, BBC Associates, L.L.C. 957 *
(consulting services)
Leon Ewing 72 1973 2003 President, Ewing Bonding Agency 2,560(1) 2.11%
Eugene Giscombe 60 1991 2002 President, Giscombe Henderson, Inc. 8,950(2) 7.37%
(property management firm) President, 103
East 125th Street Corporation (property
holding company)
Norman Jeffries 58 1989 2001 Comptroller, Montclair Child Development 214 *
Center
Louis E. Prezeau 58 1989 2002 President and Chief Executive Officer, 19,285(3) 15.88%
City National Bank of New Jersey and City
National Bancshares Corporation
Lemar C. Whigham 57 1989 2001 President, L & W Enterprises (vending 9,392(4) 7.74%
machine operations)
Directors and executive 45,210 37.24%
officers as a group (10
persons)
(1) Includes 2,010 shares held by Mr. Ewing individually and 550 shares
held jointly with his wife.
(2) Includes 780 shares held by his wife.
(3) Includes 1,413 shares held by his sons, 110 shares held by his daughter
and 1,402 shares held by his wife.
(4) Includes 1,000 shares held by his wife. * Less than 1%
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During 2000, the Board of Directors held 12 regular monthly meetings. A quorum
was present at all meetings. No director attended fewer than 75% of the meetings
held by the Board and committees of which such director was a member.
All directors of the Corporation are also directors of the Bank. Regular
meetings of the Corporation's and the Bank's Boards of Directors are held
monthly. Additional meetings are held when deemed necessary. In addition to
meeting as a
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group to review the Corporation's business, certain members of the Board also
serve on certain standing committees of the Bank's Board of Directors. These
committees, which are described below, serve similar functions for the
Corporation.
The AUDIT AND EXAMINING COMMITTEE reviews (i) significant auditing and
accounting matters, (ii) the adequacy of the system of internal controls, and
(iii) examination reports of the internal auditor, regulatory agencies and
independent accountants. Messrs. Jeffries, Ewing and Whigham currently serve as
members of the Committee. Mr. Jeffries serves as Chairperson of the Committee.
The Committee met four times during 2000. See additional Audit and Examining
Committee disclosure under "Additional Information Regarding Directors and
Officers".
The LOAN AND DISCOUNT COMMITTEE reviews all loan policy changes and requests for
policy exceptions and loans approved by management. Messrs. Anderson, Ewing,
Giscombe, Jeffries, Prezeau and Whigham and Ms. Coleman currently serve as
members of the Committee. Mr. Anderson serves as Chairperson of the Committee.
The Committee met 12 times during 2000.
The INVESTMENT COMMITTEE reviews overall interest rate risk management and all
investment policy changes, along with purchases and sales of investments.
Messrs. Prezeau, Anderson, Ewing, Giscombe and Whigham currently serve as
members of the Committee. Mr. Prezeau serves as Chairperson of the Committee.
The Committee met four times during 2000.
The PERSONNEL/DIRECTOR AND MANAGEMENT REVIEW COMMITTEE deals in broad terms with
personnel matters and reviews director and officer compensation. Messrs.
Giscombe, Jeffries, Prezeau, Whigham and Ms. Coleman currently serve as members
of the Committee. Mr. Giscombe serves as Chairperson of the Committee. The
Committee met two times during 2000.
The BUILDING AND GROUNDS COMMITTEE considers branch expansion and matters
concerning Bank premises. Messrs. Ewing, Giscombe, Prezeau and Whigham currently
serve as members of the Committee. Mr. Ewing serves as Chairperson of the
Committee. The Committee did not meet during 2000.
The MARKETING COMMITTEE oversees the Bank's marketing plan and strategies. Ms.
Coleman and Messrs. Anderson, Giscombe, Prezeau and Whigham currently serve as
members of the Committee. Ms. Coleman serves as Chairperson of the Committee.
The Committee held four meetings during 2000.
DIRECTOR COMPENSATION Each director of the Corporation receives an annual
retainer of $1,500 and a $400 fee for each board meeting attended except for the
chairperson, who receives $550, and the secretary, who receives $500. Committee
chairpersons receive $200 for each meeting attended other than the chairperson
of the Loan and Discount Committee, who receives $250 per meeting. Other
committee members receive $150 for each meeting attended, except for Audit
Committee members, who receive $175 for each meeting attended.
DIRECTOR RETIREMENT PLAN Effective January 1, 1997, the Corporation instituted a
director retirement plan. Under this plan, a director who attains the age of at
least 65 and has completed five years of service on the Board, shall receive an
annual benefit equal to 50% of the aggregate amount of the director's fees paid
to such director during the then last full fiscal year of the Corporation (the
"normal retirement benefit"). This annual benefit is to be paid each year for
ten years beginning on the date the director retires from service on the Board.
If the director ceases service on the Board prior to attaining the age of 65 but
after completing at least five years of service on the Board, the director shall
receive an annual benefit equal to a percentage of the normal retirement benefit
determined under this table.
YEARS OF SERVICE >= 5 < 7 >= 7 < 8 >= 8 < 9 >= 9 < 10 >10
- ------------------------------- ------- ------- -------- --------- ----------
APPLICABLE PERCENTAGE OF NORMAL 20% 40% 60% 80% 100%
RETIREMENT BENEFIT
Upon a change in control of the Corporation (as defined) followed by a
termination of the director's status as a member of the Board for any reason or
a failure for whatever reason for the director to be nominated and elected to an
immediately succeeding term, the director shall receive a benefit equal to the
present value (discounted at the rate of 4%) of a theoretical series of 120
monthly payments, with each payment equal to 1/12 of the normal retirement
benefit without regard as to whether the director otherwise qualified for the
normal retirement benefit.
If a director dies while in active service on the Board, the designated
beneficiary of such director shall receive the greater of (a) that part of the
normal retirement benefit accrued by the Corporation for such director as of the
date of such director's death (determined based on the formula described above),
and (b) a projected retirement benefit calculated in January 1997 based on the
director's age and assumed increases in director's fees prior to such director
attaining the age of 65. This death benefit is payable to the beneficiary in
monthly installments over ten years.
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The Corporation may amend or terminate this plan at any time prior to
termination of service by the director, provided that all benefits accrued by
the Corporation as of the date of such termination or amendment shall be fully
vested; and, provided further, that the plan may not be amended or terminated
after a change of control (as defined) unless the director consents thereto.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE THREE (3) NOMINEES
FOR DIRECTOR.
THE EXECUTIVE OFFICERS
Listed below is certain information concerning the current executive officers of
the Corporation.
IN OFFICE
NAME AGE SINCE OFFICE AND BUSINESS EXPERIENCE
- ---- --- ----- ------------------------------
Louis E. Prezeau 58 1989 President and Chief Executive Officer, City National Bancshares Corporation
and City National Bank of New Jersey
Stanley Weeks 44 1994 Senior Vice President and Chief Credit Officer, City National Bank of New
Jersey; 1984-1994, Vice President, First Fidelity Bank, N.A.
Edward R. Wright 55 1994 Senior Vice President and Chief Financial Officer, City National Bancshares
Corporation and City National Bank of New Jersey; 1978-1994, Executive Vice
President and Chief Financial Officer, Rock Financial Corporation
Veronica T. Gilbert 41 1999 Senior Vice President, City National Bank of New Jersey; 1987-1999 National
Bank Examiner and Field Officer Analyst, Office of the Comptroller of the
Currency
SUMMARY COMPENSATION TABLE
The following table summarizes compensation for services to the Corporation and
the Bank for the years ended December 31, 2000, 1999 and 1998 paid to the Chief
Executive Officer and to the other executive officers of the Corporation and the
Bank.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS:
SECURITIES PAYOUTS:
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION
- ------------------ ---- ------ ----- --------------- ------- ------------
Louis E. Prezeau 2000 $169,556 $20,000 $5,881(2) $ -- $37,527(5)
President and Chief Executive Officer, 1999 150,000 26,943 5,881(2) -- 38,288(5)
City National Bancshares Corporation 1998 150,000 8,177 8,906(2) 5,700(4) 33,505(5)
and City National Bank of New Jersey
Stanley M. Weeks 2000 $104,000 $ 8,135 $4,800(3) $ -- $ 6,256(6)
Senior Vice President and Chief Credit 1999 97,500 -- 4,800(3) -- 5,761(6)
Officer, City National Bank of New 1998 92,500 -- 4,800(3) -- 3,417(6)
Jersey
Edward R. Wright 2000 $ 94,500 $ 6,835 $6,000(3) $ -- $ --
Chief Financial Officer, City National 1999 91,000 -- 6,000(3) -- --
Bancshares Corporation and City 1998 87,000 -- 6,000(3) -- --
National Bank of New Jersey
(1) Perquisites and other personal benefits paid to any named executive
officer did not exceed the lesser of $50,000 or 10% of the annual
salary and bonus reported in the table for that individual and are,
therefore, not presented.
(2) Includes payments made under the Corporation's profit sharing plan of
$2,681, $2,681, and $5,706 in 2000, 1999 and 1998, respectively, and
insurance premiums paid on a life insurance policy on the life of Mr.
Prezeau of $3,200, 3,200 and $3,200, in 2000, 1999 and 1998,
respectively.
(3) These amounts represent automobile allowance payments.
(4) For more information on this grant, see "Prezeau Employment Agreement".
(5) These amounts represent the accrual of benefits under the Director
Retirement Plan and Salary Continuation Plan.
(6) These amounts represent the accrual of benefits under the Salary
Continuation Plan.
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AGGREGATED OPTION EXERCISES DURING 2000
AND YEAR-END OPTION VALUES(1)
NUMBER OF SECURITIES UNDERLYINg
SHARES UNEXERCISED OPTIONS HELD VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE AT DECEMBER 31, 2000 HELD AT DECEMBER 31, 2000
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
Louis E. Prezeau 1,900 $9,500 0 0 0 0
(1) All options described in this table were granted Mr. Prezeau under his
employment agreement. For more information concerning these options,
see "Prezeau Employment Agreement".
(2) Both Value Realized and Value of the Unexercised Options Held at
December 31, 2000 should represent the difference between the market
value of the stock acquired upon exercise or underlying the unexercised
options, respectively, and the applicable exercise price of such stock
options. Since there is no active trading market for the Corporation's
common stock, any determination of these values would be highly
subjective.
PREZEAU EMPLOYMENT AGREEMENT
In May, 2000 the Bank and the Corporation entered into an employment agreement
with Mr. Prezeau to serve as the President and Chief Executive Officer of both
entities. The agreement is for a term of three years. Under the agreement, Mr.
Prezeau is to receive an annual salary of at least $185,000, subject to
increases in the second and third year of the agreement at the discretion of the
Board. Additionally, Mr. Prezeau is to receive an annual performance bonus equal
to:
10% of the amount of earnings, as defined, of the Corporation for each
year that exceed 10% but are less than 15% of the amount of the
Corporation's common stockholders' equity, plus;
20% of the amount of earnings, as defined, of the Corporation for such
year that exceed 15% of the amount of the Corporation's common
stockholders' equity.
The performance bonus shall be paid in cash or common stock of the Corporation,
at the election of Mr. Prezeau.
Under the agreement, Mr. Prezeau may be granted an option to purchase an
undetermined amount of the Corporation's common stock at a price to be
determined at the time the option is granted. If the Corporation and the Bank do
not offer to renew the agreement upon its termination under terms satisfactory
to Mr. Prezeau, or if the Corporation or the Bank terminates Mr. Prezeau's
employment without cause (as defined), then Mr. Prezeau shall receive a lump sum
amount equal to his then current base salary and a limited continuation of his
life and health insurance coverage. If Mr. Prezeau terminates his employment due
to a change in control of the Corporation (as defined), or if the Bank or the
Corporation fail to comply with their obligations under the agreement or upon
the failure of the stockholders of the Corporation to elect Mr. Prezeau as a
director, Mr. Prezeau shall be entitled to receive liquidated damages and full
satisfaction of claims he may have under the agreement. Mr. Prezeau is also
entitled to fringe, medical, health and life insurance benefits, including life
insurance for an amount of up to three times his base salary then in effect and
the use of an automobile.
SALARY CONTINUATION PLAN
Effective in January 1997, the Corporation and the Bank entered into Agreements
with Messrs. Prezeau and Weeks to encourage each executive to remain as a
employee of the Corporation by agreeing to pay salary continuation benefits to
each executive. Specifically, if the executive's employment with the Corporation
is terminated for whatever reason (other than death) after he attains the age of
65, he will receive an annual benefit equal to 40% of the annual base salary
received by the executive during the last complete fiscal year of his service as
an employee (the "normal retirement benefit"). Such benefit shall be payable to
the executive in equal monthly installments over 15 years. If the executive's
employment with the Corporation is terminated for any reason (other than death)
prior to the executive attaining the age of 65, the executive shall receive the
same benefit payable over the same period of time multiplied by a fraction the
numerator of which is the executive's years of service prior to termination of
employment and the denominator of which is the years of service the executive
would have had had the executive's employment terminated when he was 65.
Upon a change of control of the Corporation (as defined) followed at any time
during the succeeding 12 months by a cessation in the executive's employment for
reasons other than death, disability or retirement, the executive shall receive
a lump sum payment equal to the present value (discounted at the rate of 4%) of
the stream of payments the executive would have received had he qualified for
the normal retirement benefit. If the executive dies while in active service to
the Corporation, the beneficiary of the executive will receive an amount equal
to the greater of that part of the normal retirement benefit accrued by the
Corporation for the executive as of the date of the executive's death or the
projected retirement benefit calculated in January 1997 based on the executive's
age and other assumptions regarding increases in base salary. This death benefit
is payable to the beneficiary in equal monthly installments over 15 years.
As of December 31, 2000, the Corporation had accrued director retirement plan
and accrued salary continuation benefits for Mr. Prezeau of $9,735 and $125,571
respectively.
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LIFE INSURANCE PLAN
The Bank has a plan which provides Messrs. Prezeau, Weeks and Wright with
certain life insurance benefits. Under the plan, the Bank has purchased life
insurance policies on the lives of each executive and has agreed to provide the
designated beneficiary of each executive with death benefits equal to the lesser
of (i) two times such executive's annual base salary most recent to his death
and (ii) the excess of the total death proceeds under the policy over the cash
surrender value of such policy on the date of death.
ADDITIONAL INFORMATION REGARDING DIRECTORS AND OFFICERS
INFORMATION ABOUT THE CORPORATION'S AUDIT AND EXAMINING COMMITTEE
The members of the Audit and Examining Committee are considered to be
independent under the definition of independence contained in Rule 42005(a) of
the listing standards of the National Association of Securities Dealers.
All the members of the Audit Committee are considered financially literate,
defined as being able to read and understand fundamental financial statements.
One member is currently the chief financial officer of a business organization
and is also a certified public accountant. The Audit and Examining Committee
currently does not have a written charter. The Board of Directors is currently
reviewing an Audit Committee Charter, which will specifically define the
responsibilities and obligations of the Audit and Examining Committee. The Board
expects to adopt such a charter during 2001.
REPORT OF THE AUDIT COMMITTEE
In connection with the December 31, 2000 financial statements, the Audit
Committee: (1) reviewed and discussed the audited financial statements with
management; (2) discussed with the independent auditors the matters required by
Statement on Auditing Standards No. 61, Communications with Audit Committees, as
amended, by the Auditing Standards Board of the American Institute of Certified
Public Accountants and (3) received and discussed with the independent auditors
the matters required by Independence Standards Board Statement No. 1,
Independence Discussions with Audit Committee, as amended, by the Independence
Standards Board.
Based upon these reviews and discussions, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the
Annual Report on Form 10-K filed with the Securities Exchange Committee.
Leon Ewing
Norman Jeffries
Lemar Whigham
TRANSACTIONS WITH MANAGEMENT
Certain directors of the Corporation had loans with the Bank in 2000. These
loans were on substantially the same terms including interest rates and
collateral, as those prevailing at the time for comparable loans with others and
did not involve more than the normal risk of collectibility or present other
unfavorable features. The Bank may have similar transactions in the future.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Corporation's executive officers and directors, and any persons owning ten
percent or more of Corporation's common stock, to file in their personal
capacities initial statements of beneficial ownership, statements of changes in
beneficial ownership and annual statements of beneficial ownership with the SEC.
The rules of the SEC regarding the filing of such statements require that late
filings of such statements be disclosed in the proxy statement. To the best of
management's knowledge, all such statements were timely filed in 2000.
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PROPOSAL 2
APPOINTMENT OF INDEPENDENT AUDITORS
The accounting firm of KPMG, LLP served as the independent auditors for the
Corporation for the year ended December 31, 2000. Services provided included the
examination of the consolidated financial statements and preparation of the tax
returns.
The Board has appointed KPMG, LLP as the independent auditors for the
Corporation and the Bank for 2001. Stockholder ratification of the appointment
is not required under the laws of the State of New Jersey, but the Board has
decided to ascertain the position of the stockholders on the appointment. The
Board may reconsider the appointment if it is not ratified. The affirmative vote
of a majority of the shares voted at the meeting is required for ratification.
Representatives of KPMG, LLP are expected to be present at the meeting and will
be allowed to make a statement if they so desire. Additionally, they will be
available to respond to appropriate questions from stockholders during the
meeting.
The Corporation incurred the following fees for services provided by KPMG, LLP:
Audit fees $72,000
Financial information systems design -
All other fees 27,000
------
$99,000
The services referred to under the caption "All other fees" above related to the
preparation of the Corporation's income tax returns. The Audit and Examining
Committee considers the provision of these services as not inconsistent with
maintaining KPMG's independence with respect to the Corporation.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE SECTION OF KPMG LLP
AS INDEPENDENT AUDITORS FOR 2001.
STOCKHOLDER PROPOSALS
Stockholders who intend to present proposals at the 2002 Annual Meeting of
Stockholders must present a written proposal to the Corporation by December 22,
2001, for inclusion in the Corporation's proxy statement.
OTHER MATTERS
Management knows of no other business scheduled for consideration at the
meeting. Should any matter properly come before the meeting or any adjournment
thereof, it is intended that proxies will vote in accordance with their best
judgment.
By order of the Board of Directors
Lemar C. Whigham
Secretary
March 28, 2001
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9406 Please mark
your votes as
indicated in X
this example
1. Election of Barbara Bell Coleman, FOR WITHHOLD AUTHORITY
Norman Jeffries and the nominees to vote for the nominee
Lemar C. Whigham | | | |
2. The ratification of the appointment FOR AGAINST ABSTAIN
of KPMG LLP as auditors for the fiscal | | | | | |
year ending December 31, 2001.
In their discretion, the proxies are
authorized to vote upon such other business
as may properly come before the meeting or
any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS AND WILL
BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS APPEARING ON THIS
SIDE. IF A CHOICE IS NOT INDICATED
WITH RESPECT TO ITEMS 1 OR 2. THIS
PROXY WILL BE VOTED "FOR" SUCH
ITEM. THE PROXIES WILL USE THEIR
DISCRETION WITH RESPECT TO ANY
OTHER MATTER PROPERLY BROUGHT
BEFORE THE MEETING OR ANY
POSTPONEMENT OR ADJOURNMENT
THEREOF. THIS PROXY IS REVOCABLE AT
ANY TIME BEFORE IT IS EXERCISED.
Receipt herewith of the
Company's Annual Report and notice
of meeting and proxy statement
dated April 24, 2001, is hereby
acknowledged.
PLEASE SIGN, DATE AND MAIL TODAY
Signature(s) of Stockholder(s) ______________________________ Date _________2001
Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s) on
this card. When signing as attorney, executor, administrator, trustee, guardian,
partner, or corporate officer please give FULL title.
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11
CITY NATIONAL BANCSHARES CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 24, 2001
The undersigned hereby appoints Edward R. Wright and Stanley Weeks, and each of
them, as the undersigned's true and lawful agents and proxies with full power of
substitution in each, to represent the undersigned at the Annual Meeting of
Stockholders of CITY NATIONAL BANCSHARES CORPORATION to be held at the
Corporation's headquarters located at 900 Broad Street, Newark, New Jersey on
Thursday, May 24, 2001 at 6:00 p.m., and at any adjournments thereof, on all
matters coming before such meeting.
(Continued and to be signed on reverse side)
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