UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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PENNSYLVANIA COMMERCE BANCORP, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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(2) Aggregate number of securities to which transaction applies:
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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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[ ] Fee paid previously with preliminary materials.
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paid previously. Identify the previous filing by registration statement
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PENNSYLVANIA COMMERCE BANCORP, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
Date: May 16, 2003
Time: 9:00 a.m.
Place: Radisson Penn Harris
1150 Camp Hill Bypass
Camp Hill, PA 17011
Matters to be voted on:
1. Election of Directors. Election of seven (7) directors to serve until
the 2004 annual meeting.
2. Amendment to 2001 Directors Stock Option Plan.
3. Other Business. Any other business properly brought before the
shareholders at the meeting.
You can vote your shares of common stock if our records show that you owned
the shares at the close of business on March 28, 2003 (the "Record Date"). Your
vote at the annual meeting is very important to us. Please vote your shares of
common stock by completing the enclosed proxy card and returning it to us in the
enclosed prepaid envelope. This proxy will not be used if you are present at the
meeting and desire to vote in person.
BY ORDER OF THE BOARD OF DIRECTORS,
Gary L. Nalbandian
Chairman and President
Camp Hill, Pennsylvania
April 18, 2003
PENNSYLVANIA COMMERCE BANCORP, INC.
PROXY STATEMENT
April 18, 2003
GENERAL INFORMATION
This proxy statement has information about the annual meeting of
shareholders of Pennsylvania Commerce Bancorp, Inc. ("Commerce"). The management
of Commerce and Commerce Bank/Harrisburg, N.A. (the "Bank") prepared this proxy
statement for the board of directors. We first mailed this proxy statement and
the enclosed proxy card to shareholders on or about April 18, 2003.
We will pay the costs of preparing, printing and mailing the proxy and all
related materials. In addition to sending you these materials, some of our
employees may contact you by telephone, by mail or in person.
Our executive offices are located at 100 Senate Avenue, Camp Hill,
Pennsylvania 17011, and our telephone number is (717) 975-5630. Our mailing
address is P. O. Box 8599, Camp Hill, Pennsylvania 17001-8599.
VOTING
Who can vote?
You can vote your shares of common stock if our records show that you owned
the shares at the close of business on March 28, 2003 (the "Record Date"). A
total of 2,129,705 shares of common stock were outstanding on the Record Date
and can vote at the annual meeting. You get one vote for each share of common
stock you own. The enclosed proxy card shows the number of shares you can vote.
We will hold the annual meeting if the holders of a majority of the shares of
the common stock entitled to vote either sign and return their proxy cards or
attend the meeting in person.
As of the Record Date, there were 40,000 shares of Series A Non-Cumulative
Preferred Stock ("Preferred Stock") outstanding. Holders of Preferred Stock
cannot vote at the annual meeting.
How do I vote by proxy?
Follow the instructions on the enclosed proxy card to vote on each proposal
to be considered at the annual meeting. Sign and date the proxy card and mail it
back to our Transfer Agent in the enclosed prepaid envelope. The proxyholders
named on the proxy card will vote your shares as you instruct. If you sign and
return the proxy card but do not vote on a proposal, the proxyholders will vote
for you on that proposal. Unless you instruct otherwise, the proxyholders will
vote for the election of each of the seven director nominees and for each of the
other proposals to be considered at the meeting.
What vote is required?
A majority of the votes cast at a meeting at which a quorum is present is
required in order to approve any matter submitted to a vote of the shareholders,
except in the cases where the vote of a greater number of shares is required by
law or under the Articles of Incorporation or Bylaws. In the case of the
election of directors, the seven candidates receiving the highest number of
votes cast at the Annual Meeting shall be elected to the Board of Directors.
Abstentions and broker non-votes will be counted as shares that are outstanding,
but will not be counted or voted in favor of the election of directors.
What if other matters come up at the annual meeting?
The matters described in this proxy statement are the only matters we know
will be voted on at the meeting. If other matters are properly presented at the
annual meeting, the proxyholders named in the enclosed proxy card will vote your
shares as they see fit.
How are votes counted?
Our judges of election will manually count all votes, which are cast in
person or by proxy at the annual meeting. Voting is an important right of
shareholders. If you abstain or otherwise fail to cast a vote on any matter, the
abstention or failure is not a vote and will not be counted. Broker non-votes
(shares of common stock held in record name by your broker or nominee for which
(i) you have not provided voting instructions, (ii) the broker or nominee does
not have discretion to vote on your behalf, and (iii) the broker or nominee has
indicated on the proxy that it does not have authority to vote on such matters)
will also not be counted as votes.
Can I change my vote after I return my proxy card?
Yes. At any time before the vote on a proposal, you can change your vote
either by:
o giving Commerce's secretary a written notice revoking your proxy card;
or
o signing, dating and returning to us a new proxy card.
We will honor the proxy card with the latest date.
Can I vote in person at the annual meeting?
Yes. We encourage you to complete and return the proxy card to ensure that
your vote is counted. However, you may attend the meeting and vote in person
whether or not you have previously returned a proxy card.
ELECTION OF DIRECTORS OF COMMERCE
The Bylaws of Commerce provide as follows:
o the board of directors may, from time to time, fix the number of
directors;
o the board will consist of not less than five nor more than 25
directors; and
o directors will be elected for a one-year term.
At the annual meeting, we will nominate the seven persons named in this
proxy statement as directors. Although we don't know of any reason why any of
these nominees might not be able to serve, we will propose a substitute nominee
if any nominee is not available for election.
Shareholders also can nominate persons to be directors. If you want to
nominate someone, you must deliver or mail a notice to the Chairman of the Board
of Commerce not less than 45 days prior to the date of the annual meeting. Your
notice must state your name and residence address and the number of shares of
Commerce, which you own. Your notice must also contain the following information
on each proposed nominee:
o the name, address and age of the nominee;
o the principal occupation of the nominee;
o the number of shares of Commerce common stock owned by the nominee;
and
o the total number of shares that, to your knowledge, will be voted for
the nominee.
If you do not follow this procedure, the Chairman of the meeting will
disregard your nominations and the judges of election will disregard any votes
cast for your nominees.
The proxyholders named in the proxy card intend to vote for the election of
the seven persons listed as director nominees to serve until the 2004 annual
meeting. Unless you indicate otherwise, your proxy will be voted in favor of the
election of those nominees. Each nominee is currently a director of Commerce and
the Bank.
The following table shows the name and age of each nominee for election as
director. All of the nominees are currently members of the board and each of
them has consented to serve if elected. Commerce does not have separate classes
of Directors. The table also shows the following information on each nominee and
director:
o business experience, including principal occupation for the past five
years;
o the period during which he has served as a director of Commerce; and
o the number and percentage of outstanding shares of common stock of
Commerce which he beneficially owned as April 11, 2003, (the most
recent practicable date).
Business Experience Amount and Percentage of
Including Principal Nature of Outstanding
Occupation for the Director Beneficial Common Stock
Name and Age Past Five Years Since Ownership 1 Owned
Gary L. Nalbandian Chairman and President of 1985 235,992 3 10.45%
Age 60 Pennsylvania Commerce
Bancorp, Inc. and Commerce
Bank/Harrisburg, N.A.,
Co-Owner of NAI/Commercial-
Industrial Realty Co. (NAI/CIR)
Camp Hill, PA 2
James R. Adair Owner, Adair Construction 2001 3,850 4 *
Age 55 Services Inc. since 2003;
President/CEO of Alexander
Constructors, Inc. 1997-2003
Douglas S. Gelder Owner and President, 1987 24,527 5 1.14%
Age 53 Shaffer & Gelder
Development Corporation,
Hershey, PA
Alan R. Hassman Owner/Operator of 1985 107,132 6 4.98%
Age 63 ARH, Inc., Harrisburg, PA
Howell C. Mette Attorney-at-Law, Mette, 1985 57,103 7 2.66%
Age 75 Evans & Woodside
Harrisburg, PA
Michael A. Serluco Owner, Consolidated 1985 76,979 7 3.58%
Age 62 Properties, Wormleysburg, PA
Samir J. Srouji, M.D. Physician-Surgeon 1985 72,158 8 3.36%
Age 66 Plastic Surgery, P.C.
Camp Hill, PA
* Less than one percent
1 The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission. Accordingly, they
may include securities owned by or for, among others, the wife and/or minor
children of the individual and any other relative who has the same home as
such individual, as well as other securities as to which the individual has
or shares voting or investment power or has the right to acquire under
outstanding stock options within 60 days after April 11, 2003. Shares
subject to outstanding stock options, which an individual has the right to
acquire within 60 days after April 11, 2003 are deemed to be outstanding
for the purpose of computing the percentage of outstanding securities of
the class of stock owned by such individual or any group including such
individual only. Beneficial ownership may be disclaimed as to certain of
the securities.
2 Mr. Nalbandian has been Chairman of Commerce Bank/Harrisburg since 1985 and
Chairman of Pennsylvania Commerce Bancorp, Inc. since 1999. Mr. Nalbandian
has been President of Commerce Bank/Harrisburg and President of
Pennsylvania Commerce Bancorp, Inc. since February 15, 2002. Mr. Nalbandian
has been co-owner of NAI/Commercial-Industrial Realty Co. (NAI/CIR), Camp
Hill, PA since 1969.
3 Includes 51,190 shares held by Mr. Nalbandian's individually directed
participant account in the NAI/CIR Profit Sharing Trust with respect to
which Mr. Nalbandian has sole voting power, 9,870 shares held in trust by
Mr. Nalbandian or Dorothy Nalbandian for the benefit of Mr. Nalbandian's
children and 2,188 shares owned by Mr. Nalbandian's wife, Jaimie
Nalbandian. Also includes 123,933 currently exercisable Incentive Stock
Options.
4 Includes 1,710 currently exercisable Director Stock Options.
5 Includes 13,025 currently exercisable Director Stock Options.
6 Includes 26,361 shares owned by Mr. Hassman's wife, Gloria Hassman. Also
includes 15,390 currently exercisable Director Stock Options.
7 Includes 15,390 currently exercisable Director Stock Options.
8 Includes 9,863 shares owned by Dr. Srouji's wife, Gillian Srouji, 579
shares owned jointly by Dr. Srouji and his wife and 11,802 shares held by
Dr. Srouji's self-directed participant account in the Plastic Surgery P.C.
Profit Sharing Plan. Also includes 15,390 currently exercisable Director
Stock Options.
The following are all shares owned beneficially by all directors and
executive officers as a group:
Amount and Nature of
Beneficial Ownership
---------------------------------------
Title of Class Direct Indirect Percent of Class
-------------------- ---------- ------------ --------------
Common Stock and Exercisable Stock Options 733,563 1 59,365 33.15%
1 Includes 108,584 shares owned beneficially by James T. Gibson, former
President/CEO of Commerce and the Bank. These shares are included in
accordance with the rules and regulations of the SEC.
Directors' Compensation
Each Commerce director received an annual fee of $1,500 plus a monthly fee
of $1,200 for each regular monthly meeting of the Board of Directors attended in
2002. Each director who is an active member of the Audit, Real Estate and/or
Personnel Committee received $150 for each committee meeting he attended. The
annual fee for 2003 will be $2,000, the meeting fee will be $1,200 and the
committee-meeting fee will be $150.
2001 Stock Option Plan for Non-Employee Directors
In 2000, the shareholders of Commerce adopted the 2001 Director's Stock
Option Plan.
A total of 115,762 shares (as adjusted for stock dividends) are subject to
the plan. The option price is generally the fair market value of the shares at
the time we grant the option. Options are not transferable other than by will or
laws of descent and distribution. A director can exercise the option only while
a director of Commerce or that period of time after he/she otherwise ceases so
to serve as determined by the Board of Directors. If a director dies within the
option period, the director's estate may exercise the option within three months
of his or her death.
A director cannot exercise an option before the earlier of (i) one year
from the date we grant the option, or (ii) a "change in control" of Commerce (as
defined in the plan) occurs. Options expire ten years after the date of grant.
The number of shares subject to options and the option price will be
appropriately adjusted if the number of issued shares is decreased or increased
by changes in par value, a combination, stock dividend and the like.
For the year ended December 31, 2002, each non-employee director was
granted options to purchase 1,710 shares (as adjusted for stock dividends) of
Commerce common stock. These options were not exercisable in 2002.
Meetings and Committees of the Board of Directors
The Board of Directors met twelve (12) times during 2002. In 2002 each of
the Commerce's nominees for director attended more than 75% of the total number
of meetings of the Board of Directors including all Committees of which they are
members of Commerce and the Bank.
The Board of Directors of Commerce has established four (4) committees:
o the Audit Committee;
o the Personnel Committee;
o the Real Estate Committee; and
o the Executive Committee.
We do not have a nomination committee but provide for the nomination of
directors as described under "ELECTION OF DIRECTORS OF COMMERCE" on page 2 of
this proxy statement.
Audit Committee
Members: James R. Adair Alan R. Hassman
Samir J. Srouji Douglas S. Gelder
Meetings: 4
Functions:
o Responsible for hiring the Company's independent auditors;
o Review the financial statements, accounting procedures and methods
employed in connection with audit programs of Commerce and the Bank;
o Review and make recommendations to the board regarding the internal
auditor's report and the certified public accountants' audit report;
and
o Review examination reports by banking regulators.
The report of the Audit Committee is set forth on page 15 of this Proxy
Statement.
Personnel Committee
Members: Alan R. Hassman James R. Adair
Howell C. Mette Michael A. Serluco
Meetings: 1
Functions: Review all personnel policies, including the levels of
compensation of Commerce's and the Bank's officers and
administers Commerce's Employee Stock Option Plan.
The report of the Personnel Committee with respect to the
2002 compensation is set forth on page 13 of this Proxy
Statement.
Real Estate Committee
Members: Gary L. Nalbandian Douglas S. Gelder Samir J. Srouji
Meetings: 1
Functions:
o Review and approve certified real estate appraisers (residential and
commercial) retained by Commerce and the Bank; and
o Review and approve all potential branch site locations.
Executive Committee
Members: Gary L. Nalbandian Howell C. Mette Michael A. Serluco
Meetings: 1
Functions: Act between regular board meetings to approve loans.
Transactions with Officers and Directors
During 2002, the Bank had, and expects to have in the future, banking
transactions in the ordinary course of business with directors, officers, and
principal shareholders (and their associates) of Commerce on the same terms,
including interest rates and collateral on loans as those prevailing at the same
time for comparable transactions with others. Management believes that these
loans present no more than the normal risk of collectibility or other
unfavorable features. The loans to these persons and companies amounted to less
than 2% of total loans outstanding as of December 31, 2002.
NAI/Commercial-Industrial Realty Co. (NAI/CIR) is co-owned by Gary L.
Nalbandian, Chairman and President of Commerce and the Bank, and a 10.45%
beneficial shareholder of Commerce. In 2002, NAI/CIR received commissions
totaling $69,000 from independent third parties related to real estate
transactions conducted on behalf of Commerce's bank subsidiary, Commerce
Bank/Harrisburg, N.A.
As was previously indicated, Commerce Bancorp, Inc. ("Bancorp"), owns
8.19% of Commerce's common stock and 100% of Commerce's Series A preferred
stock. Bancorp, through its subsidiary, Commerce Bank, N.A., a national bank
located in Cherry Hill, New Jersey, provides various services to the Bank
including:
o maintaining the computer wide area network;
o proof and encoding;
o deposit account statement rendering;
o MAC/VISA card production;
o data processing; o advertising support.
The Bank paid approximately $1.3 million to Bancorp for services provided
during 2002. The Bank also pays insurance premiums and commissions to a
subsidiary of Bancorp, which we included in this total. Additionally, the Bank
routinely sells loan participations to Commerce Bank, N.A. and at December 31,
2002, approximately $8.6 million of these participations were outstanding.
Howell C. Mette, a director and 2.66% beneficial shareholder of Commerce,
is a partner in the law firm of Mette, Evans and Woodside, which Commerce
retained during 2002, and intends to retain during 2003. The law firm received
professional fees totaling $290,000 in 2002.
Michael A. Serluco, a director and 3.58% beneficial shareholder of Commerce
receives rental income from the Bank for land which contains an advertising
billboard which is owned by the Bank. The Bank paid $25,000 on the lease during
2002.
PRINCIPAL SHAREHOLDERS
The following table shows the name, address, amount and nature of
beneficial ownership and percent of class of outstanding Commerce common stock
(which for purposes of this table, includes shares subject to currently
exercisable stock options) of each person who we know beneficially owns more
than 5% of Commerce's common stock (as of April 11, 2003, the most recent
practicable date).
Name and Address Amount and Nature of Percent of Outstanding
Of Beneficial Owner Beneficial Ownership Common Stock
Gary L. Nalbandian 235,992 1 10.45%
Pennsylvania Commerce
Bancorp, Inc.; NAI/CIR,
Camp Hill, PA
Commerce Bancorp, Inc. 174,667 2 8.19%
Cherry Hill, NJ
James T. Gibson 108,584 3 5.09%
Chairman/President
Integrity Bank, Camp Hill, PA
1 See footnote 3 on page 4.
2 This amount does not include shares held directly or indirectly by the
directors and executive officers of Commerce Bancorp, Inc. or any of its
subsidiaries as to which beneficial ownership is disclaimed.
3 Includes shares jointly owned by Mr. Gibson and Joette Gibson.
MANAGEMENT
Executive Officers
The following table shows name, age, position, business experience for the
past five years and the beneficial ownership of common stock of Commerce of each
of its executive officers included in the Summary Compensation Table on page 10
determined in accordance with the rules and regulations of the SEC. Share
information is stated as of April 11, 2003 (the most recent practicable date):
Amount and Nature of Percent of Outstanding
Name and Age Title Beneficial Ownership 1 Common Stock
Gary L. Nalbandian 2 Chairman and 235,992 3 10.45%
Age 60 President of Commerce
and the Bank
Rory G. Ritrievi 4 Executive Vice President 5,526 5 *
Age 39 and Senior Loan Officer of
Commerce Bank
David B. Skerpon 6 Executive Vice President 66 *
Age 42 and Chief Retail Officer
of Commerce Bank
Mark A. Zody Chief Financial Officer and 42,530 7 1.96%
Age 39 Treasurer of Commerce and
the Bank
James T. Gibson Chairman/President 108,584 8 5.09%
Age 42 Integrity Bank, 2002-2003
President/CEO of Commerce
and the Bank, 1997-2002
1 See footnote 1 on page 4.
2 See footnote 2 on page 4.
3 See footnote 3 on page 4.
4 Prior to joining Commerce in November 1999, Mr. Ritrievi served as
Executive Vice President/Regional Director of Commercial Lending of
Keystone Financial, Inc.
5 Includes 5,359 currently exercisable Incentive Stock Options.
6 Mr. Skerpon became Executive Vice President/Chief Retail Officer of
Commerce Bank on March 4, 2002. Mr. Skerpon served as Senior Vice President
of Commerce Bank from September 2000 to August 2001. Prior to joining
Commerce, Mr. Skerpon served as President of the Commonwealth Region of
Mellon Bank.
7 Includes 33,457 currently exercisable Incentive Stock Options.
8 See footnote 3 on page 8.
* Less than one percent
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table is a summary of certain information concerning the
compensation during the last three fiscal years awarded or paid to, or earned by
Commerce's Chief Executive Officer and each of Commerce's other most highly
compensated executive officers during Commerce's last fiscal year.
Long Term
Annual Compensation Compensation
Stock
Other Underlying
Annual Securities All Other
Name and Compen- Option Compen-
Principal Position Year Salary Bonus sation Grant 1 sation 2
Gary L. Nalbandian 2002 $150,000 $40,000 -- -- $ 17,584
Chairman and President of 2001 120,000 25,000 -- 16,536 16,088
Commerce and the Bank 3 2000 98,000 20,000 -- 11,576 14,348
Rory G. Ritrievi 2002 $167,000 $15,000 $11,440 4 -- $ 2,053
Executive Vice President and 2001 152,000 15,000 11,440 4 5,511 2,014
Senior Loan Officer 2000 140,000 10,000 19,840 4 5,209 --
of the Bank
David B. Skerpon 2002 $160,000 $ 9,000 -- -- --
Executive Vice President and 2001 100,000 -- -- -- --
Chief Retail Officer 2000 100,000 -- -- -- --
of the Bank 5
Mark A. Zody 2002 $118,000 $10,000 -- -- $ 5,674
Chief Financial Officer and 2001 103,000 8,500 -- 3,858 5,527
Treasurer of 2000 100,000 7,000 -- 2,894 5,338
Commerce and the Bank
James T. Gibson 2002 -- -- -- -- $283,896 7
Former President and CEO of 2001 $255,000 $30,000 -- 11,024 27,643
Commerce and the Bank 6 2000 230,000 30,000 -- 11,575 26,228
1 Adjusted to reflect the 5% common stock dividend paid on February 24, 2003.
2 Includes (a) annual retainer fee and monthly director meeting fees for (i)
Mr. Nalbandian of $15,900 in 2002, $14,200 in 2001, and $13,000 in 2000;
and (ii) Mr. Gibson - $2,700 in 2002, $14,200 in 2001 and $13,000 in 2000;
(b) contributions by Commerce to the 401(k) Retirement Savings Plan for (i)
Mr. Nalbandian - $1,684 in 2002, $1,888 in 2001, and $1,348 in 2000; (ii)
Mr. Ritrievi - $2,053 in 2002 and $2,014 in 2001; (iii) Mr. Zody - $1,481
in 2002, $1,418 in 2001, and $1,306 in 2000; and (iv) Mr. Gibson - $2,133
in 2001 and $1,955 in 2000; (c) life insurance premiums for (i) Mr. Zody -
$2,343 in 2002, 2001, and in 2000; and (ii) Mr. Gibson - $500 in 2002,
$7,138 in 2001 and $7,101 in 2000; and (d) long-term disability premiums
for (i) Mr. Zody - $1,850 in 2002, $1,766 in 2001, and $1,689 in 2000; and
(ii) Mr. Gibson - $696 in 2002, $4,172 in 2001 and 2000.
3 Mr. Nalbandian served as Chairman of the Board of Commerce and the Bank
during 2001, and 2000 and the salary and bonus shown for him for these
years were for his services as Chairman of the Board. On February 15, 2002
he was appointed to the additional position of President/CEO of both
Commerce and the Bank.
4 Includes tuition reimbursement for Mr. Ritrievi of $11,440 in 2002, 2001
and 2000 and reimbursement for relocation expenses for Mr. Ritrievi of
$8,400 in 2000.
5 Mr. Skerpon became Executive Vice President/Chief Retail Officer of
Commerce Bank on March 4, 2002. Mr. Skerpon served as Senior Vice President
of Commerce Bank from September 2000 to
August 2001. The amounts listed reflect his annualized salary for the years
2002, 2001 and 2000. Prior to joining Commerce, Mr. Skerpon served as
President of the Commonwealth Region of Mellon Bank.
6 Mr. Gibson's employment with Commerce and the Bank ceased on February 13,
2002. He served as President/CEO of Commerce and the Bank in 2001 and 2000.
7 This amount includes payment made to Mr. Gibson in connection with his
separation from employment as President/CEO of Commerce and the
Bank.
Employee Stock Options
In 1996, Commerce shareholders adopted the 1996 Employee Stock Option Plan.
The plan replaced the 1986 Incentive Stock Option Plan, which expired December
31, 1995. We reserved 502,256 shares of common stock for issuance under the
plan. The plan will expire on December 31, 2005. The plan allows us to grant
incentive stock options (ISO's) and nonqualified stock options (NQSO's). The
board of directors will fix the option price for options granted under the plan.
The option price for ISOs will not be less than the fair market value of the
stock at the date of grant. The option price for NQSOs may be less than 100% of
the fair market value of the stock at the date of grant. Options are generally
exercisable one year after the date of grant subject to the vesting schedule
outlined below, and expire ten years after the date of grant.
Optionees may exercise options only to the extent the options are vested.
Options vest based either on years of service or upon the period of time the
options have been issued, whichever is faster. The vesting schedule is as
follows:
Years of service:
o up to three (3) years of service - 25% vested;
o more than three (3) years but less that six (6) years of service
- 50% vested;
o more than six (6) years but less than eight (8) years of service
- 75% vested; and
o more than eight (8) years of service - 100% vested.
Period of time after grant:
o more than one (1) year but less than two (2) years - 25% vested;
o more than two (2) years but less than three (3) years - 50%
vested;
o more than three (3) years but less than four (4) years - 75%
vested; and
o more than four (4) years - 100% vested.
The plan requires that we adjust the number of shares subject to options
and the option price to reflect changes in the number of outstanding shares
caused by events such as stock dividends and splits.
Stock Option Grants
In 2002, Commerce changed its policy for granting Incentive Stock Options
to executive officers so that all such options are now granted in the first
quarter of each year. As a result, there were no stock options granted to
executive officers in 2002. All options granted to executive officers in first
quarter 2003 will be included in Commerce's Proxy Statement for the 2004 Annual
Meeting of Shareholders.
Stock Option Exercises
The following table shows:
o all options exercised by each executive officer of Commerce during
2002;
o the number of shares acquired on exercise;
o the value realized by the executive officer upon exercise; and
o the number of exercisable and un-exercisable options outstanding for
each executive officer, and the value of those options, as of December
31, 2002:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Options at Options at
Acquired End Year 2002 2 End Year 2002 3
Name on ExerciseValue Realized 1 Exercisable Unexercisable Exercisable Unexercisable
Gary L. Nalbandian -- -- 123,933 -- $2,312,848 $ 0
Rory G. Ritrievi -- -- 5,359 5,361 34,962 34,975
David B. Skerpon -- -- -- -- 0 0
Mark A. Zody 2,280 $ 75,290 33,457 -- 587,230 0
James T. Gibson 77,280 2,105,555 -- -- 0 0
1 Represents the number of shares acquired upon exercise multiplied by the
difference between the fair market value of Commerce's common stock on the
date of exercise less the exercise price paid by the executive officer.
2 Exercisable ISO's are fully vested. ISO's to vest in the future are
reported as unexercisable.
3 The dollar values were calculated by determining the difference between the
closing trading price of Commerce Common Stock at December 31, 2002, which
was $35.69 per share (adjusted for the 5% common stock dividend paid on
February 24, 2003), and the option price of each ISO as of December 31,
2002.
REPORT OF THE PERSONNEL COMMITTEE
Only outside non-employee directors serve on the Personnel Committee. The
Personnel Committee reviews, and submits to the full board of directors for
approval, management's recommendations regarding officers and other employees
compensation.
We seek to attract and retain superior talent, reward performance and align
the interests of our executive officers with the long-term interests of our
shareholders. Our executive officers receive compensation packages consisting of
base salary, annual performance bonus, stock option grants and various employee
benefits including contributions under Commerce's 401(k) Retirement Savings
Plan. The Personnel Committee bases its recommendations for compensation on
objective factors and its subjective evaluation of the individual's performance.
The Personnel Committee sets base salary levels for our executive officers
to be competitive with those offered by a peer group of institutions similar to
Commerce. In reviewing base salaries, the Personnel Committee also considers
individual experience and performance.
We award annual performance bonuses to provide direct cash incentives to
executive officers and other key employees. In evaluating Commerce's financial
performance, the Personnel Committee considers budgets set by the board as well
as the performance of a peer group of institutions similar to Commerce. We award
stock options to encourage officers and other key employees to remain employed
with Commerce by providing them with a long term interest in Commerce's overall
performance. In granting stock options, the Personnel Committee considers prior
stock option grants, the executive's level of compensation and the executive's
past contributions to Commerce.
You can see more information about the compensation paid to Commerce's
executive officers in the Summary Compensation Table on page 10 of this proxy
statement.
PERSONNEL COMMITTEE
Alan R. Hassman, Chairman
James R. Adair
Howell C. Mette
Michael A. Serluco
Personnel Committee Interlocks and Insider Participation
Howell C. Mette is a partner in the firm of Mette, Evans and Woodside which
we retained during 2002 and which we intend to retain during 2003.
Michael A. Serluco received rental income from the Bank in 2002 for land
which contains an advertising billboard which is owned by the Bank.
You can see more information about these transactions under "Transactions
with Officers and Directors" on page 7 of this proxy statement.
Financial Performance
The following graph shows the yearly percentage change in Commerce's
cumulative total shareholder return on its common stock from December 31, 1997
to December 31, 2002 compared with the cumulative total return of a NASDAQ
Regional Peer Bank Index and the NASDAQ Composite Market Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Pennsylvania Commerce Bancorp, (COBH) NASDAQ Regional Peer Bank Index
NASDAQ Composite Market Index
Year-End 1997 to Year-End 2002
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our directors and executive officers must file reports with the SEC
indicating:
o the number of shares of Commerce common stock they beneficially own;
and
o changes in their beneficial ownership.
To the best of our knowledge, our directors and executive officers filed all
required reports in 2002.
REPORT OF THE AUDIT COMMITTEE
The Board of Directors of Commerce has established an Audit Committee
composed of four directors, each of whom is independent as identified in the
National Association of Securities Dealers ("NASD") listing standards. The Board
of Directors has adopted a written charter for the Audit Committee and a copy of
the Charter was included as Appendix A to the Proxy Statement to Shareholders
dated April 17, 2001.
The Audit Committee (the "Committee") has reviewed and discussed the
Company's audited consolidated financial statements with management and with
Beard Miller Company LLP, Commerce's independent auditors for 2002. The
Committee has also discussed with Beard Miller Company LLP the matters required
to be discussed by Statements on Auditing Standards No. 61, 89 and 90,
Communication with Audit Committees.
The Audit Committee has received from Beard Miller Company LLP the written
statements required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees, and has discussed Beard Miller's independence
with them, and has considered the compatibility of nonaudit services with the
auditor's independence.
Based on the review and discussions referred to above, the Audit Committee
has recommended to the Board of Directors that the audited consolidated
financial statements be included in Commerce's Annual Report on Form 10-K for
the year ended December 31, 2002 for filing with the Securities and Exchange
Commission.
AUDIT COMMITTEE
James R. Adair, Chairman
Douglas S. Gelder
Alan R. Hassman
Samir J. Srouji
APPROVAL OF THE AMENDMENT TO THE 2001 DIRECTORS' STOCK OPTION PLAN
The Board of Directors seeks shareholder approval of an amendment to the
2001 Directors' Stock Option Plan described on page 5 of this Proxy Statement
(the "Plan"), which would expand the definition of Eligible Participants to
include advisory directors, directors emeritus, consultants, or other
individuals the Board deems beneficial to the Company and who are not regularly
employed on a salary basis by the Company or its subsidiary, Commerce
Bank/Harrisburg, N.A. ("Additional Participants"). Following is a summary of
significant terms of the Plan as approved by the shareholders in 2000:
Total Number of Shares 115,762 shares of Commerce Common Stock (as
Covered by the Plan adjusted for stock dividends which have
occurred since approval of the Plan). As a
result of options that have been awarded
since approval of the Plan, 81,556 shares
remain available for issuance under the
Plan.
Administration The Personnel Committee or another committee
designated by the Board will administer the
plan.
Eligible Participants Non-employee directors of Commerce.
(to be amended)
Exercise Price Generally, the fair market value of
Commerce's common stock on the date we grant
the option.
Terms of Options Generally 10 years, but could be a shorter
period.
Vesting of Options Options granted under the plan generally
will not be subject to vesting schedules.
The holder of an option may exercise the
option one (1) year after the date of grant.
Exercise of Options The holder of an option can pay the exercise
price of the option in cash, or at the
board's or the committee's discretion, with
Commerce common stock (valued at the closing
price of the common stock on the exercise
date) or a combination of cash and Commerce
stock.
Transferability Options are not transferable except by will
or by intestate succession.
Acceleration of Vesting If a Change of Control of Commerce (as
Options defined in the plan) occurs, the options
will vest immediately and become exercisable
in full unless we determine otherwise.
Term of Plan The Plan will expire on December 31, 2010,
unless we terminate it earlier.
On April 10, 2003, the Board of Directors approved an amendment to the
Plan, subject to shareholder approval, that would expand the definition of
"eligible participants." Currently, only directors of Commerce are eligible
participants. As a result of the amendment approved by the directors and for
which the directors seek shareholder approval, the definition of "eligible
participants" would be expanded to include advisory directors, directors
emeritus, consultants, or other individuals the Board deems beneficial to
Commerce and who are not regularly employed on a salary basis by Commerce or the
Bank. The purpose of this amendment is to allow such Additional Participants,
who provide valuable advice to Commerce on policy and strategic issues, to
participate in the Plan. The additional participants will not be members of the
Board of Directors and will not have a vote on matters that come before the
Board of Directors. The award of options under the Plan will continue to be at
the discretion of
the Board of Directors. The Board believes that it is in the best interests of
Commerce and its shareholders for the Board to have the authority to award
options to the Additional Participants.
The amendment will not affect the options or benefits that the directors
who are nominated in this Proxy Statement for election may receive under the
Plan. Each individual who is nominated in this Proxy Statement for election as a
director and Mr. Hill (a former director who resigned on December 20, 2002) has
received 5,130 options under the Plan to date, except for Mr. Adair, who became
a Board member on February 16, 2001 and who has received 3,420 options to date.
As a group, the current directors of Commerce have been awarded 34,206 options
under the Plan to date.
The amendment will not change the federal income tax consequences of the
Plan. Options granted under the plan will be non-qualified stock options. An
option-holder generally will not recognize any taxable income when we grant the
option. When the option-holder exercises the option, he or she will recognize
ordinary income for tax purposes equal to the excess of the fair market value of
the shares over the exercise price. When the option-holder resells the stock, he
or she will recognize capital gain or loss equal to any difference between the
sale price and the exercise price to the extent not recognized as ordinary
income as provided above. We are entitled to take a deduction in the amount of
ordinary income recognized by the option-holder. This is only a summary of the
federal income tax consequences of the grant and exercise of options under the
plan. It is not a complete statement of all tax consequences. In particular, we
have not discussed the income tax laws of any municipality, state, or foreign
country where an optionee resides.
Upon shareholder approval of the proposed amendment, directors emeritus,
advisory directors, consultants and others (including Mr. Hill), as newly
eligible participants in the Plan, may be eligible to receive and to exercise
stock options. The Board of Directors recommends that you vote "For" the
amendment to the 2001 Directors' Stock Option Plan. A copy of the amended plan,
including the revised definition of eligible participants, is attached to this
Proxy Statement as Appendix A.
The following table contains information about Commerce's equity
compensation plans as of December 31, 2002:
EQUITY COMPENSATION PLAN INFORMATION
Plan Category Number of Number of securities
securities to be remaining available for
issued upon Weighted average future issuance under
exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
warrants and rights warrants and rights reflected in column (a))
(a) (b) (c)
Equity compensation
plans approved by
security holders 421,422 $19.75 446,963 1
Equity compensation
plans not approved by
security holders N/A N/A N/A
Total 421,422 $19.75 446,963
1 Includes total shares available for employees through the Employee Stock
Purchase Plan and also shares available for all shareholders under the
Company's Dividend Reinvestment and Stock Purchase Plan.
OTHER BUSINESS
At the date of mailing of this proxy statement, we are not aware of any
business to be presented at the annual meeting other than the proposal discussed
previously. If other proposals are properly brought before the meeting, any
proxies returned to us will be voted as the proxyholders see fit.
INDEPENDENT PUBLIC ACCOUNTANTS
Our principal accountant during 2002 was Beard Miller Company LLP, 320 East
Market Street, Harrisburg, PA 17101. Based upon the recommendation of the Audit
Committee, the Board of Directors intends to select Beard Miller Company LLP to
be our principal accountant for 2003. We expect a representative of Beard Miller
Company LLP to attend the annual meeting, to have the opportunity to make a
statement, if he or she so desires, and to be available to respond to
appropriate questions.
Audit Fees
Commerce was billed fees of approximately $68,234 by Beard Miller Company
LLP for the 2002 annual audit, including the audit of the consolidated financial
statements, and required quarterly reviews.
Financial Information Systems Design and Implementation Fees
Beard Miller Company LLP did not provide any financial information systems
design and implementation services to Commerce during 2002 and therefore
Commerce did not pay fees to Beard Miller Company LLP for such services.
All Other Fees
Commerce was billed approximately $21,413 by Beard Miller Company LLP for
tax related and other services provided during 2002. The Audit Committee has
determined that the performance of such services is compatible with the
independence of Beard Miller Company LLP.
Shareholder Proposals for the 2004 Annual Meeting of Shareholders
Under Commerce's Bylaws, no shareholder proposals may be brought before an
annual meeting of shareholders unless a proposal is specified in the notice of
the meeting or is otherwise brought before the meeting by the Board of Directors
or by a shareholder entitled to vote who has delivered notice to Commerce
(containing information specified in the Bylaws) not less than 120 days prior to
the anniversary of the mailing of the previous year's proxy statement. These
requirements are separate from and in addition to the SEC's requirements that a
shareholder must meet in order to have a shareholder proposal included in
Commerce's proxy statement. A shareholder wishing to submit a proposal for
consideration at the 2004 Annual Meeting of Shareholders, either under SEC Rule
14a-8, or otherwise, should do so no later than December 20, 2003.
If the corporate secretary of Commerce receives notice of a shareholder
proposal that complies with the governing Bylaw provision on or prior to the
required date and if such proposal is properly presented at the 2004 annual
meeting of shareholders, the proxies appointed by Commerce may exercise
discretionary authority in voting on such proposal if, in Commerce's proxy
statement for such meeting, Commerce advises shareholders of the nature of such
proposal and how the proxies appointed by Commerce intend to vote on such
proposal, unless the shareholder submitting the proposal satisfies certain SEC
requirements, including the mailing of a separate proxy statement to Commerce's
shareholders.
The presiding officer of the meeting may refuse to permit any proposal to
be made at an annual meeting by a shareholder who has not complied with all of
the governing Bylaw procedures, including receipt of the required notice by the
corporate secretary for Commerce by the date specified. If a shareholder
proposal is received by Commerce after the required notice date but the
presiding officer of the meeting nevertheless permits such proposal to be made
at the 2004 annual meeting of shareholders, the proxies appointed by Commerce
may exercise discretionary authority when voting on such proposal.
If the date of our next annual meeting is advanced or delayed by more than
30 days from May 21, 2004, we will promptly inform you of the change of the
annual meeting and the date by which shareholder proposals must be received.
ANNUAL REPORT
Commerce sends only one annual report to shareholders sharing the same
address. We will promptly deliver a separate copy of the annual report to a
security holder at a shared address to which we sent a single copy, upon our
receipt of a written request sent to the address below. If you wish to receive a
separate copy of the annual report in the future, notify Commerce at the phone
number or address below. You can also request that we send only a single copy of
the proxy statement to security holders at a shared address, by sending written
notice to the address below.
Additionally, you can obtain a copy of the Commerce Annual Report or Form
10-K for the year ended December 31, 2002 at no charge by writing to:
Sherry Richart, Shareholder Relations
Pennsylvania Commerce Bancorp, Inc.
P.O. Box 8599 Camp Hill, PA
17001-8599 717-975-5630
RETURN OF PROXY
You should sign, date and return the enclosed proxy card as soon as
possible whether or not you plan to attend the meeting in person. If you do
attend the meeting, you may then withdraw your proxy.
BY ORDER OF THE BOARD OF DIRECTORS
GARY L. NALBANDIAN
Chairman and President
Camp Hill, Pennsylvania
April 18, 2003
APPENDIX "A"
PENNSYLVANIA COMMERCE BANCORP, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Board of Directors shall elect the Audit Committee at the annual
reorganization meeting of Pennsylvania Commerce Bancorp and Commerce
Bank/Harrisburg, N.A. In accordance with the By-laws of the Corporation, the
Audit Committee is established as a subcommittee reporting periodically to the
Board of Directors. The Audit Committee shall be composed of no less than three
directors who are independent of management of the Corporation as outlined by
the Securities and Exchange Commission (SEC) and NASDAQ and are free of any
relationship that, in the opinion of the Board, would interfere with their
exercise of judgment as a committee member. At least one member will have had
past employment experience or other comparable experience or background in the
field of financial management.
The Audit Committee shall provide assistance to the Board in fulfilling
their responsibilities to the shareholders. Principally, these responsibilities
entail assessing the effectiveness of the internal control system over financial
reporting, reviewing adherence to policies / procedures and assuring the
safeguarding of all corporate assets. In so doing, it is the responsibility of
the Audit Committee to maintain open lines of communications between the Board
of Directors, external auditors, internal auditors and the senior management of
the Corporation.
In carrying out these responsibilities, the Audit Committee will:
1. Review and recommend to the Board the external auditors to be
selected to conduct the annual audit of the financial records of
the Corporation. Review audit and consulting fees of the external
auditors.
2. Meet with the external auditors and financial management of the
Corporation to review the scope of the annual audit for the
current year and at the conclusion thereof review such audit
findings. This review will include both the external auditor's
recommendations and the related management response.
3. Review with the external auditors and corporate management the
adequacy and effectiveness of the internal financial and
accounting controls of the Corporation and elicit any
recommendations that they may have for the improvement of such
control procedures. Particular attention should be given to the
adequacy for such controls to expose any payments, transactions
or other procedures, which might be deemed illegal or otherwise
improper. Further, the Audit Committee should periodically review
corporate policy statements in terms of their adequately
representing the Company's Code of Conduct and Business Ethics
Policy.
4. Review and disclose the required information in the annual proxy
statement as outlined by the SEC.
5. Review and recommend to the Board the appointment of a competent
outsourcing vendor for internal audit service and / or in-house
staff.
6. Review and approve the internal audit department's proposed audit
schedule for the coming year and the coordination of such
programs with the external auditors' year-end requirements.
Particular attention should be given to maintaining the best
effective balance between external and internal auditing
resources.
7. Monitor the activities of the internal audit department and
ensure that the internal audit department adequately discharges
responsibilities for the examination, review and reporting to the
audit committee that:
a. Internal accounting and financial controls for the various
areas are adequate and efficient and can be relied upon to
produce accurate financial information.
b. Internal controls adequately safeguard the assets of the
Corporation.
c. Financial records of the operational areas are complete and
accurate and are in conformity with corporate policy,
generally accepted accounting principles and requirements of
the various regulatory bodies.
d. Operational areas are in compliance with FDIC, FRB and all
other Federal and State laws and regulations.
e. Control over the development, maintenance and operation of
EDP systems are sufficient to ensure the accuracy, security
and completeness of data processing results.
8. Prior to each periodic meeting, the Audit Committee will be
provided a report prepared by Internal Audit, which outlines the
findings of all audit engagements completed during the period.
9. Review all reports on examinations made by the various regulatory
agencies and evaluate management's responses to them.
10. Minutes of the Audit Committee meeting shall be submitted to the
Board of Directors at the next regular Board meeting.
The foregoing list of functions is not intended to limit the Committee in
fulfilling its responsibilities, but rather is intended to provide an overview
of the principal duties to be performed by the Committee.
In performance of its duties, the Committee shall meet at least 4 times per
year and have full use of the Bank's internal audit resources and engage if
necessary, at the bank's expense, independent counsel to advise the Committee in
discharging its duties.
AMENDED 2001 DIRECTORS STOCK OPTION PLAN
PENNSYLVANIA COMMERCE BANCORP, INC.
-----------------------------------
1. Purpose of Plan
---------------
The purpose of this Plan is to enable Pennsylvania Commerce Bancorp, Inc.
(hereinafter referred to as the "Company") to continue to attract and retain the
services of nonemployee directors, directors emeritus, advisory directors,
consultants and others with outstanding abilities by making it possible for them
to purchase shares of the Company's Common Stock on terms which will give them a
direct and continuing interest in the future success of the Company's business.
2. Definitions
-----------
"Company" means Pennsylvania Commerce Bancorp, Inc., a Pennsylvania
business corporation.
"Committee of the Board" means a committee established by the Board
consisting of three or more members of the Board. The Personnel Committee may be
this committee.
"Director" for purposes of this Plan means a director of the Company who is
not regularly employed on a salary basis by the Company or its subsidiary,
Commerce Bank/Harrisburg, N.A.
"Eligible Participant" for purposes of this Plan means a Director, advisory
director, director emeritus, consultant, or other individual the Board deems
beneficial to the Company who is not regularly employed on a salary basis by the
Company or its subsidiary, Commerce Bank/Harrisburg, N.A.
"Shares" means shares of Common Stock of the Company.
"Board" means the Board of Directors of the Company.
"Optionee" means a person to whom an option has been granted under this
Plan which has not expired or been fully exercised or surrendered.
3. Limits on Options
-----------------
The total number of shares for which options may be granted under this Plan
shall not exceed in the aggregate 100,000 shares. This number shall be
appropriately adjusted if the number of issued shares shall be increased or
reduced by change in par value, combination, or split-up, reclassification,
distribution of a dividend payable in stock, or the like. The number of shares
previously optioned and not theretofore delivered and the option prices therefor
shall likewise be appropriately adjusted whenever the number of issued shares
shall be increased or reduced by any such procedure after the date or dates on
which such shares were optioned. Shares covered by options, which have expired,
or which have been surrendered may again be optioned under this Plan.
4. Adjustment of Options
---------------------
The number of shares optioned from time to time to individual Optionees
under the Plan, and the option prices therefor, shall be appropriately adjusted
to reflect any changes in par value, combination, split-up, reclassification,
distribution of dividend payable in stock, or the like.
5. Granting of Options
-------------------
The Board, or if the Board so determines, the Committee of the Board, is
authorized to grant options to Eligible Participants pursuant to this Plan
during the calendar year 2001 and in any calendar year thereafter to December
31, 2010, but not thereafter. The number of shares, if any, optioned in each
year, the Optionees to whom options are granted, and the number of shares
optioned to each Optionee selected shall be wholly within the discretion of the
Board or the Committee of the Board. If the Board acts, however, it shall do so
only upon the advice and recommendation of the Committee of the Board upon all
matters relating to the granting of options and the administration of this Plan,
including determination of the rights and obligations of the Optionees. Any
options granted in a given year shall be granted in February of that year.
6. Terms of Stock Options
----------------------
The terms of stock options granted under this Plan shall be as follows:
(a) The option price shall be fixed by the Board or the Committee
of the Board but shall in no event be less than 100% of the fair
market value of the shares subject to the option on the date the
option is granted. The fair market value of the shares shall be the
average of the high and low sale prices of the Common Stock as
reported on the NASDAQ Small Cap Market System on the trading day
immediately preceding the date of grant or the closest preceding date
if there are no high and low sale prices available on that date. If
there are no high and low sale prices available for the Common Stock
for the 30 trading days preceding the applicable grant date, then the
Board of Directors shall make a determination of the option price on
the basis of information which it determines best reflects current
fair market value.
(b) Options shall not be transferable otherwise than by will or
by the laws of descent and distribution. No option shall be subject,
in whole or in part, to attachment, execution or levy of any kind.
(c) Each option shall expire and all rights thereunder shall end
ten (10) years after the date on which it was granted, subject in all
cases to earlier expiration as provided in paragraphs (d), (e) and (f)
of this Section 6 in the event an Optionee ceases to serve in the
capacity to which he has been appointed or dies.
(d) During the lifetime of an Optionee, his/her option shall be
exercisable only by him/her and only while serving in that capacity to
which he has been appointed or within that period of time after he/she
otherwise ceases so to serve as determined by the Board of Directors
(but in any event not later than the end of the period specified in
paragraph (c) of this, Section 6).
(e) If an Optionee dies within a period during which his/her
option could have been exercised by him, his/her option may be
exercised within three months after his/her death (but not later than
the end of the period specified in paragraph (c) of this Section 6) by
those entitled under his/her will or the laws of descent and
distribution, but only if and to the extent the option was exercisable
by him/her immediately prior to his/her death.
(f) If Optionee is removed as a Director for any of the reasons
specified in Section 1726(b) of the Pennsylvania Business Corporation
Law of 1988 ("BCL"), or from any other position to which he has been
appointed for reasons similar to the reasons specified in Section
1726(b) of the BCL, all options theretofore granted to the Optionee
preceding such removal shall be forfeited by Optionee and rendered
unexercisable.
(g) Subject to the foregoing terms and to such additional or
different terms regarding the exercise of the options as the Board or
the Committee of the Board may fix at the time of grant, options may
be exercised in whole or in part from time to time.
7. Exercise of Options
-------------------
No option granted under this Plan may be exercised before the first to
occur of (i) one year from the date of option grant, or (ii) a Change in Control
of the Company. Thereafter, options may be exercised in whole, or from time to
time in part, for up to the total number of shares then subject to the option,
less the number of shares previously purchased by exercise of the option.
8. Change in Control
-----------------
For the purposes of this Agreement, a Change in Control with respect to any
Optionee shall be deemed to have occurred when any of the following events shall
have occurred without the prior written consent of such Optionee:
(a) A change in identity of at least four (4) members of the
Board of Directors or the addition of four (4) or more new members to
the Board of Directors, or any combination of the foregoing, within
any two (2) consecutive calendar year periods.
(b) A person or group acting in concert as described in Section
13(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") proposes to hold or acquire beneficial ownership
within the meaning of Rule 13(d)(3) promulgated under the Exchange Act
of a number of voting shares of the Company which constitutes either
more than 50%, of the shares which voted in the election of Directors
of the Company at the Shareholder's Meeting immediately preceding such
determination, or (ii) more than 50% of the Company's outstanding
voting shares. The term "proposes to hold or acquire"shall mean the
right of a person or group to acquire or merge (whether such right is
exercisable immediately or only after the passage of time, or upon the
receipt of such regulatory approvals as are required by applicable
law) pursuant to an agreement, arrangement or understanding (whether
or not in writing) or upon the exercise or conversion of rights,
exchange rights, warrants or options, or otherwise.
(c) A person or group acting in concert as described in Section
13(d)(2) of the Exchange Act has commenced a tender or exchange offer
with respect to the voting shares of the Company or securities
convertible or exchangeable into voting shares of the Company.
(d) A person or group acting in concert as described in Section
13(d)(2) of the Exchange Act has the right to vote shares of the
Company pursuant to any agreement, arrangement or understanding
(whether or not in writing), either (i) more than 50% of the shares
which voted in the election of Directors of the Company at the
Shareholder's Meeting immediately preceding such determination, or
(ii) more than 50% of the Company's outstanding voting shares;
provided, however, that such person or group acting in concert, shall
not be deemed to have acquired such shares if the agreement,
arrangement or understanding to vote such securities rises solely from
a revocable proxy given in response to a Proxy Solicitation by
management of the Company in connection with the Annual Meeting of the
Shareholders of the Company.
9. Reorganization of the Company
-----------------------------
In the event that the Company is succeeded by another corporation or
Company in a reorganization, merger, consolidation, acquisition of property or
stock, separation or liquidation, the successor corporation or Company shall
assume the outstanding options granted under this Plan or shall substitute new
options for them.
10. Delivery of Shares
------------------
No shares shall be delivered upon the exercise of an option until the
option price has been paid in full in cash or, at the discretion of the Board or
the Committee of the Board, in whole or in part in the Company's Common Stock
owned by the Optionee valued at fair market value on the date of exercise. If
required by the Board, no shares will be delivered upon the exercise of an
option until the Optionee has given the Company a satisfactory written statement
that he/she is purchasing the shares for investment and not with a view to the
sale or distribution of any such shares.
11. Administration
--------------
The Board or the Committee of the Board may make such rules and regulations
and establish such procedures as it deems appropriate for the administration of
this Plan. In the event of a disagreement as to the interpretation of this Plan
or any amendment thereto or any rule, regulation or procedure thereunder or as
to any right or obligation arising from or related to this Plan, the decision of
the Board or the Committee of the Board (excluding, however, any Optionee(s)
affected by such dispute or disagreement) shall be final and binding upon all
persons in interest, including the Company and its shareholders.
12. Reservation of Shares
---------------------
Shares delivered upon the exercise of an option shall, in the discretion of
the Board or the Committee of the Board, be either shares heretofore or
hereafter authorized and then unissued, or previously issued shares heretofore
or hereafter acquired through purchase in the open market or otherwise, or some
of each. The Company shall be under no obligation to reserve or to retain in its
treasury any particular number of shares at any time, and no particular shares,
whether unissued or held as treasury shares, shall be identified as those
optioned under this Plan.
13. Amendment of Plan
-----------------
The Board may amend this Plan from time to time as it deems desirable.
14. Termination of the Plan
-----------------------
The Board may, in its discretion, terminate this Plan at any time prior to
December 31, 2010, but no such termination shall deprive Optionees of their
rights under their options.
15. Effective Date
--------------
This Plan shall become effective on January 1, 2001, and options hereunder
may be granted at any time on or after that date.
REVOCABLE PROXY
PENNSYLVANIA COMMERCE BANCORP, INC.
100 Senate Avenue, Camp Hill, PA 17011
Telephone: (717) 975-5630
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PENNSYLVANIA COMMERCE BANCORP, INC.
The undersigned hereby appoints James R. Adair and Howell C. Mette as Proxies,
each with the power to appoint his substitute, and authorizes them to represent
and vote, as designated below, all the shares of common stock of Pennsylvania
Commerce Bancorp, Inc. held of record by the undersigned on March 29, 2002 at
the Annual Meeting of Shareholders to be held on May 17, 2002.
1. ELECTION OF DIRECTORS: For all Nominees Listed Below (except as indicated
below)
[ ] For [ ] Withhold Authority
[ ] For All Except
Gary L. Nalbandian, James R. Adair, Douglas S. Gelder, Alan R. Hassman,
Michael A. Serluco, Howell C. Mette, and Samir J. Srouji, M.D.
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
write that nominee's name(s) in the space immediately below.
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2. AMENDMENT TO 2001 DIRECTORS STOCK OPTION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. OTHER BUSINESS:
Take action on other business which may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this proxy will be voted as specified. If no
specification or direction is made, they will be voted for the election of the
directors and for any other business in accordance with the recommendations of
management. This proxy may be revoked prior to its exercise.
When shares are held by joint tenants, both should sign. If signing as
attorney, executor, administrator, trustee, guardian, custodian, corporate
official or in any other fiduciary or representative capacity, please give your
full title as such.
Please be sure to sign and date ______________________
this Proxy in the box below. Date |
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|___Stockholder sign above___________Co-Holder (if any) sign above__
Detach above card, sign, date, and mail in postage paid envelope provided.
PENNSYLVANIA COMMERCE BANCORP, INC.
100 Senate Avenue, Camp Hill, PA 17011
Telephone: (717) 975-5630
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Please sign your name exactly as it appears on this proxy, and mark, date and
return this proxy as soon as possible in the enclosed envelope. No postage
is necessary if mailed in the United States in the enclosed self-addressed
envelope.
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IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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