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 (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 §240.14a-12 |
BRIDGE
BANCORP, INC.
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X] |
No
fee required. |
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[
] |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11. |
1) |
Title
of each class of securities to which transaction
applies: |
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2) |
Aggregate
number of securities to which transaction applies: |
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3) |
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined): |
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4) |
Proposed
maximum aggregate value of transaction: |
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5) |
Total
fee paid: |
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[
] |
Fee
paid previously with preliminary materials. |
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[
] |
Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its
filing. |
1) |
Amount
Previously Paid: |
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2) |
Form,
Schedule or Registration Statement No.: |
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3) |
Filing
Party: |
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4) |
Date
Filed: |
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BRIDGE
BANCORP, INC.
2200
Montauk Highway, P.O. Box 3005
Bridgehampton,
NY 11932
March 28,
2005
Dear
Shareholder:
You are
cordially invited to attend the Annual Meeting of Shareholders (the
"Annual
Meeting") of
Bridge Bancorp, Inc. (the "Company"). Our
Annual Meeting will be held at the offices of our subsidiary, The Bridgehampton
National Bank, 2200 Montauk Highway, Bridgehampton, New York 11932, on
Friday, April
29, 2005 at 11:00 a.m.
The
enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Annual Meeting. During the Annual Meeting we
will also report on the operations of the Company. Directors and officers of the
Company will be present to respond to questions that shareholders may have. Also
enclosed for your review is our Annual Report, which contains detailed
information concerning the operating activities and financial statements of the
Company.
The
business to be conducted at the Annual Meeting consists of the election of three
directors and the ratification of the appointment of an
Independent
Registered Public Accounting Firm Auditors
for the
year ending December 31, 2005. The Board of Directors of the Company unanimously
recommends a vote "FOR" the
election of directors and "FOR" the
ratification of the appointment of Crowe Chizek and Company LLC as the
Company's
Independent
Registered Public Accounting Firm.
On behalf
of the Board of Directors, we urge you to sign, date and return the enclosed
proxy card, or cast your vote electronically, as soon as possible, even if you
currently plan to attend the Annual Meeting. This will not prevent you from
voting in person, but will assure that your vote is counted if you are unable to
attend the Annual Meeting. Your vote is important, regardless of the number of
shares that you own.
Sincerely,
/s/
Thomas J. Tobin
Thomas J.
Tobin
President
and Chief Executive Officer
BRIDGE
BANCORP, INC.
2200
Montauk Highway, P.O. Box 3005
Bridgehampton,
NY 11932
NOTICE
OF ANNUAL MEETING
TO
BE HELD APRIL 29, 2005
To the
Shareholders of Bridge Bancorp, Inc.:
NOTICE IS
HEREBY GIVEN that the Annual Meeting of Shareholders ("Annual
Meeting") of
Bridge Bancorp, Inc. (the "Company") will be
held at The Bridgehampton National Bank, 2200 Montauk Highway, Bridgehampton,
New York 11932, on Friday,
April 29, 2005, at 11:00 a.m., for the purpose of considering and voting on the
following matters:
1) |
The
election of three directors to Class
C of the
Company's
Board of Directors, each to hold office for a term of three years or until
their successors are elected and qualified.. |
2) |
The
ratification of the appointment of Crowe Chizek and Company LLC
as
Independent Registered
Public Accounting Firm for
the Company for
the year ending December 31, 2005; and |
such
other business as may properly come before the Annual Meeting or any
adjournments thereof.
Any
action may be taken on the foregoing proposals at the Annual Meeting on the date
specified above, including all adjournments of the Annual Meeting. Only those
shareholders of record at the close of business on March 11, 2005 shall be
entitled to notice of and to vote at the Annual Meeting.
EACH
SHAREHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE ANNUAL MEETING, IS REQUESTED
TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE, OR TO VOTE
ELECTRONICALLY AS PROVIDED HEREWITH.
By order
of the Board of Directors
Sandra K.
Novick
Vice
President and Corporate Secretary
March 28,
2005
Bridgehampton,
New York
THE
PROMPT RETURN OF PROXIES IS REQUESTED. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES. YOU
CAN ALSO CAST YOUR VOTE ELECTRONICALLY.
BRIDGE
BANCORP, INC.
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
To
Be Held April 29, 2005
SOLICITATION
AND VOTING OF PROXIES
This
Proxy Statement is being furnished to shareholders of Bridge Bancorp, Inc. (the
"Company") in
connection with the solicitation by the Board of Directors of proxies to be used
at the Annual Meeting of Shareholders ("Annual
Meeting") to be
held at The Bridgehampton National Bank (the "Bank"), 2200
Montauk Highway, Bridgehampton, New York 11932, on April 29, 2005
at 11:00
a.m. or any adjournments thereof. The 2004 Annual Report to Shareholders,
including the
consolidated financial
statements for the fiscal year ended December 31, 2004, accompanies this Proxy
Statement.
Regardless
of the number of shares of common stock owned, it is important that shareholders
be represented by proxy or be present in person at the Annual Meeting.
Shareholders are requested to vote by completing the enclosed proxy and
returning it signed and dated in the enclosed envelope, or to vote
electronically. Shareholders should indicate their votes in the spaces provided
on the proxy. Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted FOR the
election of the nominees specified in this Proxy Statement and FOR the
ratification of Crowe Chizek and Company LLC as Independent
Registered Public Accounting Firm for the
year ending December 31, 2005.
The Board
of Directors knows of no additional matters that will be presented for
consideration at the Annual Meeting. Execution of a proxy, however, confers
on the
designated proxy holder’s discretionary
authority on the
designated proxy holder to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
A proxy
may be revoked at any time prior to its exercise by the filing of written
revocation with the Secretary of the Company, by delivering to the Company a
duly executed proxy bearing a later date, or by attending the Annual Meeting,
filing a revocation with the Secretary and voting in person. However, if you are
a shareholder
whose shares are not registered in your own name, you will need appropriate
documentation from your record holder to vote personally at the Annual
Meeting.
The cost
of solicitation of proxies in the form enclosed herewith will be borne by the
Company. In addition to the solicitation of proxies by mail, proxies may also be
solicited personally, by telephone or by facsimile by directors, officers and
employees of the Company, without additional compensation
therefore.
This
Proxy Statement and the accompanying proxy are first being mailed to
shareholders on or about March 28,
2005.
VOTING
SECURITIES
The
securities which may be voted at the Annual Meeting consist of shares of common
stock of the Company (the "Common
Stock"), with
each share entitling its owner to one vote on all matters to be voted on at the
Annual Meeting. The close of business on March 11,
2005 has been fixed by the Board of Directors as the record date ("Record
Date") for the
determination of shareholders entitled to notice of and to vote at this Annual
Meeting or any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 6,260,644 shares. The presence, in person or
by proxy, of at least a majority of the total number of issued and outstanding
shares of Common Stock entitled to vote is necessary to constitute a quorum at
this Annual Meeting. In the event there are not sufficient votes for a quorum,
or to approve or ratify any matter being presented at the time of this Annual
Meeting, the Annual Meeting may be adjourned in order to permit the further
solicitation of proxies.
BENEFICIAL
OWNERSHIP
Persons
and groups who beneficially own in excess of five percent of the issued and
outstanding shares of Common Stock are required to file certain reports with the
Securities and Exchange Commission (the "SEC") and
with the Company regarding such ownership. As of March 11, 2005, no person was
known to be the beneficial owner of more than five percent of the
Company's issued
and outstanding shares of Common
Stock.
VOTING
PROCEDURES AND METHOD OF COUNTING VOTES
As to the
election of directors, the proxy card being provided by the Board of Directors
enables a shareholder to vote "FOR" the
election of the three nominees proposed by the Board of Directors, or to
“WITHHOLD AUTHORITY” to vote for the nominees being proposed. Directors are
elected by a plurality of votes cast, without regard to either broker non-votes,
or proxies as to which authority to vote for the nominees being proposed is
withheld.
As to the
ratification of Crowe Chizek and Company LLC as Independent Registered Public
Accounting Firm of the
Company, by checking the appropriate box, a shareholder may: (i) vote
"FOR" the
item; (ii) vote "AGAINST" the
item; or (iii) "ABSTAIN" from
voting on such item. The ratification of this matter shall be determined by a
majority of the votes cast, without regard to broker non-votes, or proxies
marked "ABSTAIN."
Proxies
solicited hereby will be returned to the Company, and will be tabulated by
inspectors of election designated by the Board of Directors.
ITEM
1 - ELECTION OF DIRECTORS
The
Company's Board
of Directors currently consists of eight (8) members. The Board is divided into
three classes as nearly equal in number as possible (Class A, B, and C). Each
year one class of directors is elected to serve for a three-year term or until
their respective successors shall have been elected and qualified.
The Board
of Directors has nominated Messrs. Wesnofske, Tobin and Massoud for election as
Class C directors. It is intended that the proxies solicited on behalf of the
Board of Directors (other than proxies in which the vote is withheld as to the
nominees) will be voted at the Annual Meeting for the election of these
nominees. If the nominees are unable to serve, the shares represented by all
such
proxies
will be voted for the election of such substitute as the Board of Directors may
recommend. At this time, the Board of Directors knows of no reason why the
nominees would be unable to serve, if elected. There are no arrangements or
understandings between the nominees and any other person pursuant to which such
nominees were selected.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
EACH OF THE NOMINEES LISTED IN THIS PROXY STATEMENT.
The
following table sets forth certain information, as of March 11, 2005, regarding
the Board of Directors and executive officers who are not
directors.
Name
and Age |
Principal
Occupation for
Past
Five Years |
Director
of the
Company
Since |
Shares
of Common Stock of the Company Beneficially Owned as
of
December
31, 2004 (1) |
Percent |
|
Nominees
for Director |
Class
C (term expiring in 2008) |
|
|
|
|
|
|
|
|
Raymond
Wesnofske
Age
67 |
Chairperson
of the Board of the Company & the Bank |
1970 |
124,110
(2) |
2.0% |
|
|
|
|
|
Thomas
J. Tobin
Age
60 |
President
and Chief Executive Officer of the Company & the Bank |
1986 |
126,594
(3) |
2.0 |
|
|
|
|
|
Charles
I. Massoud
Age
60 |
President
and
C.E.O.
Paumanok
Vineyards |
2002 |
2,600
(4) |
- |
|
|
|
|
|
Directors
Continuing in Office |
Class
A (term expiring in 2006) |
|
|
|
|
|
|
|
|
R.
Timothy Maran
Age
63 |
Retired
Insurance
Broker, Retired
Maran
Corporate Risk Associates, Inc. |
1980 |
69,463
(5) |
1.1 |
|
|
|
|
|
Dennis
A. Suskind
Age
62 |
Retired
Partner,
Retired
Goldman,
Sachs & Co. |
2002 |
76,911
(6) |
1.2 |
|
|
|
|
|
Class
B (term expiring in 2007) |
|
|
|
|
|
|
|
|
Thomas
E. Halsey
Age
65 |
Owner
Halsey
Farm |
1969 |
68,580
(7) |
1.1 |
|
|
|
|
|
Marcia
Z. Hefter
Age
61 |
Vice
Chairperson of the Board of the Company & the Bank
Partner
Esseks,
Hefter & Angel, Esqs. |
1988 |
32,532
(8) |
0.5 |
|
|
|
|
|
Howard
H. Nolan
Age
44 |
Vice
President, Finance
Gentiva
Health Services |
2003 |
675
(9) |
- |
Name
and Age |
Principal
Occupation for
Past
Five Years |
Director
of the
Company
Since |
Shares
of Common Stock of the Company Beneficially Owned as
of
December
31, 2004 (1) |
Percent |
Executive
Officers Who Are Not Directors |
|
|
|
|
|
Christopher
Becker
Age
39 |
Executive
Vice President and
Chief Operating Officer of the Company and the Bank |
|
33,885
(10) |
0.5 |
|
|
|
|
|
Janet
T. Verneuille
Age
44 |
Senior
Vice President and Chief Financial Officer of the Company and the Bank;
Treasurer of the Company |
|
20,052
(11) |
0.3 |
|
|
|
|
|
All
Director Nominees, Continuing Directors and Executive Officers as a Group
(10 persons) |
|
|
555,402
(12) |
8.9% |
(1) |
Beneficial
ownership of shares, as determined in accordance with applicable
Securities and Exchange Commission rules, includes shares as to which a
person (or his or her spouse) directly or indirectly has or shares voting
power and/or investment power (which includes the power to dispose) and
all shares which the person has a right to acquire within 60 days of the
reporting date. |
(2) |
Includes
options to purchase 1,500 shares. |
(3) |
Includes
options to purchase 42,209 shares and 3,240 shares of restricted stock
granted to Mr. Tobin under the Equity Incentive
Plan. |
(4) |
Includes
options to purchase 900 shares. |
(5) |
Includes
options to purchase 1,500 shares. |
(6) |
Includes
options to purchase 900 shares. |
(7) |
Includes
options to purchase 1,500 shares. |
(8) |
Includes
options to purchase 1,500 shares. |
(9) |
Includes
options to purchase 300 shares. |
(10) |
Includes
options to purchase 16,875 shares and of 2,010 shares of restricted stock
granted to Mr. Becker under the Equity Incentive
Plan. |
(11) |
Includes
options to purchase 7,875 shares and 1,215 shares of restricted stock
granted to Ms. Verneuille under the Equity Incentive
Plan. |
(12) |
Includes
options to purchase 75,059 shares and 6,465 shares of restricted stock
granted to the named Directors and Executive Officers under the Equity
Incentive Plan. |
COMPENSATION
OF DIRECTORS
Directors
of the Company are not compensated separately for their services as members of
the Board of Directors of the Company. All of the members of the Board of
Directors of the Company also serve on the Board of the Bank, for which they are
compensated. As of January 1, 2005, each outside (non-employee) Director
receives an annual fee of $5,000 from the Bank. The Chairperson of the Board of
Directors receives an additional annual fee of $2,500. The Vice Chairperson of
the Board of Directors, and the Chairperson of the Audit Committee, receives an
additional annual fee of $2,000. All outside Directors are compensated $500 for
each Board meeting. Directors
who are members of the Audit Committee are compensated $400 per meeting
attended. Directors who are members of the Asset and Liability Committee and the
Classification Committee are compensated $300 per meeting attended. Directors
are compensated $150 for all other Committee meetings
attended. Each
outside director in
2004
received
an option to
purchase 300 shares of Common Stock at an exercise price of $24.00 per share,
which was the fair market value of the stock as of the date of
grant.
BOARD
MEETINGS AND COMMITTEES
The
business of the Boards of
Directors of the Company and the Bank is conducted through meetings and
activities of the Boards and their Committees. The Board of Directors of the
Company meets monthly, or more often as may be necessary. The Board of Directors
of the Company has two standing Committees: Audit Committee and Compensation
Committee. The Board of Directors of the Company met twelve times during
2004. No Director attended fewer than 75% in the aggregate of the total
number of Board meetings held and the total number of Committee meetings on
which he or she served during 2004, including Board and Committee meetings of
the Bank and the Company in which he or she served.
DIRECTOR
NOMINATIONS
The Board
of Directors has not established a Nominating
Committee for the selection of directors to be elected by the shareholders.
Nominations of directors to the Board are determined by the full Board of
Directors. The Board has determined that, except as to Mr. Tobin, each member of
the Board is an "independent
director" within
the meaning of the corporate governance listing standards that would be
applicable to the Company if the Common Stock was quoted on the Nasdaq
Stock
Market (referred to in this proxy statement as the NASDAQ®
corporate governance listing standards). Mr. Tobin is not considered independent
because he is an executive officer of the Company. The Board believes that it is
appropriate to have the input of all directors, rather than a Committee of the
Board, with respect to the candidates to be considered for election to the Board
by the shareholders. In this regard, the Board believes that each individual
director has a unique insight into the operations of the Company and the Bank,
the communities in which we operate and the needs of the Company with respect to
Board membership.
The
Company does not currently have a charter or written policy with regard to the
nomination process (other than for shareholder nominations). The Board
identifies nominees by first evaluating the current members of the Board willing
to continue in service. Current members of the Board with skills and experience
that are relevant to the Company's
business and who are willing to continue in service are first considered for
re-nomination, balancing the value of continuity of service by existing members
of the Board with that of gaining new perspectives. If any member of the Board
does not wish to continue in service, or if the Board decides not to re-nominate
a member for re-election, or if the size of the Board is increased, the Board
would solicit suggestions for director candidates from all Board members. The
Board would seek to identify a candidate who at a minimum satisfies the
following criteria:
· |
has
the highest personal and professional ethics and integrity and whose
values are compatible with the Company's; |
· |
has
had experiences and achievements that have given them
him
or her the ability to exercise and develop good business
judgment; |
· |
is
willing to devote the necessary time to the work of the Board and its
Committees, which includes being available for Board and Committee
meetings; |
· |
is
familiar with the communities in which the Company operates and/or is
actively engaged in community activities; |
· |
is
involved in other activities or interests that do not create a conflict
with their responsibilities to |
the
Company and its shareholders; and
· |
has
the capacity and desire to represent the balanced, best interests of the
shareholders of the Company as a group, and not primarily a special
interest group or constituency. |
PROCEDURES
FOR THE NOMINATION OF DIRECTORS BY THE SHAREHOLDERS
The Board
has adopted procedures for the submission of director nominees by shareholders.
If a determination is made that an additional candidate is needed for the Board
of Directors, the Board will consider candidates submitted by a shareholder.
Shareholders can submit the names of qualified candidates for Director by
writing to our Corporate Secretary, Bridge Bancorp, Inc., 2200 Montauk Highway,
P.O. Box 3005, Bridgehampton, New York 11932. The Corporate Secretary must
receive a submission not less than ninety (90) days prior to the date of the
Company's proxy
materials for the preceding year's annual
meeting. The submission must include the following information:
· |
the
name and address of the shareholder as they appear on the
Company's
books, and number of shares of Common
Stock
that are owned beneficially by such shareholder (if the shareholder is not
a holder of record, appropriate evidence of the shareholder's
ownership will be required); |
· |
the
name, address and contact information for the candidate, and the number of
shares of Common
Stock
of
the Company that
are owned by the candidate (if the candidate is not a holder of record,
appropriate evidence of the shareholder's
ownership should be provided); |
· |
a
statement of the candidate's
business and educational experience; |
· |
such
other information regarding the candidate as would be required to be
included in the proxy statement pursuant to SEC Regulation
14A; |
· |
a
statement detailing any relationship between the candidate and the
Company; |
· |
a
statement detailing any relationship between the candidate and any
customer, supplier or competitor of the
Company; |
· |
detailed
information about any relationship or understanding between the proposing
shareholder and the candidate; and |
· |
a
statement that the candidate is willing to be considered and willing to
serve as a Director if nominated and
elected. |
A
nomination submitted by a shareholder for presentation by the shareholder at an
annual meeting of shareholders must comply with the procedural and informational
requirements described in "Advance
Notice of Nominations to Be Brought before an Annual
Meeting."
SHAREHOLDER
COMMUNICATIONS WITH THE BOARD
A
shareholder of the Company who wants to communicate with the Board of Directors
or with any individual Director can write to the Corporate Secretary, Bridge
Bancorp, Inc., 2200 Montauk Highway, P.O. Box 3005, Bridgehampton, New York
11932, Attention: Board Administration. The letter should indicate that the
author is a shareholder and if shares are not held of record, should include
appropriate evidence of stock ownership. Depending on the subject matter,
management will:
· |
forward
the communication to the Director or Directors to whom it is addressed;
|
· |
attempt
to handle the inquiry directly, for example where it is a request for
information about the Company or it is a stock-related matter; or
|
· |
not
forward the communication if it is primarily commercial in nature, relates
to an improper or irrelevant topic, or is unduly hostile, threatening,
illegal or otherwise inappropriate. |
At each
Board meeting, management shall present a summary of all communications received
since the last meeting that were not forwarded and make those communications
available to the Directors.
CODE
OF ETHICS
The Board
has adopted a Code of Ethics that is applicable to the officers, directors and
employees of the Company, including the Company's
principal executive officer, principal operating officer, principal financial
officer, principal accounting officer or controller, or persons performing
similar functions. The Code of Ethics is available on the Company's website
at www.bridgenb.com.
Amendments to and waivers from the Code of Ethics will also be disclosed on the
Company's
website.
THE
AUDIT COMMITTEE
The Audit
Committee consists of Directors Nolan, Chairperson, Halsey and Massoud. Each
member of the Audit Committee is considered "independent" as
defined in the NASDAQ®
corporate governance listing standards and under SEC Rule 10A-3. The duties and
responsibilities of the Audit Committee include, among other
things:
· |
retaining,
overseeing and evaluating the Independent Registered Public Accounting
Firm a
firm of independent certified public accountants to
audit the annual consolidated financial statements of the
Company; |
· |
overseeing
the Company's
financial reporting processes in consultation with the Independent
Registered Public Accounting Firm
and
the director
of internal
audit; |
· |
reviewing
the annual audited consolidated financial statements, quarterly financial
statements and the Independent Registered Public Accounting
Firm's
report with management and the Independent Registered Public Accounting
Firm and
recommending inclusion of the annual audited consolidated financial
statements in the Company's
annual report on Form 10-K; |
· |
maintaining
direct lines of communication with the Board of Directors, Company
management, internal audit staff and the Independent Registered Public
Accounting Firm; |
· |
overseeing
the internal audit staff and reviewing management's
administration of the system of internal accounting
controls; |
· |
approving
all engagements for audit and non-audit services by the Independent
Registered Public Accounting Firm; and |
· |
reviewing
the adequacy of the Audit Committee
charter. |
The Audit
Committee met nine times during 2004. The Audit Committee reports to the Board
on its activities and findings. The Board of Directors believes that Mr. Nolan
qualifies as an "Audit
Committee Financial Expert" as that
term is used in the rules and regulations of the SEC.
AUDIT
COMMITTEE REPORT
The Audit
Committee operates under a written charter adopted by the Board of Directors. A
copy of the charter of the Audit Committee is available on the
Company's website
at www.bridgenb.com.
Additionally, a copy of the Audit Committee charter is attached as Appendix A to
this proxy statement.
Management
has the primary responsibility for the Company’s
internal controls and financial reporting process. The Independent
Registered Public Accounting Firm is are
responsible
for performing an independent audit of the Company’s
consolidated financial statements in accordance with auditing standards
generally accepted in the United States of America and to issue an opinion
thereon. The Audit Committee’s
responsibility is to monitor and oversee these processes.
As part
of its ongoing activities, the Audit Committee has:
· |
reviewed
and discussed with management, and the Independent
Registered Public Accounting Firm, the Company's
audited consolidated financial statements for the fiscal year ended
December 31, 2004; |
· |
discussed
with the Independent
Registered Public Accounting Firm the matters required to be discussed by
Statement on Auditing Standards No. 61, Communications
with Audit Committees,
as amended; and |
· |
received
the written disclosures and the letter from the Independent
Registered Public Accounting Firm required by Independence Standards Board
Standard No. 1, Independence
Discussions with Audit Committees,
and has discussed with the Independent
Registered Public Accounting Firm their independence from the
Company. |
Based on
the review and discussions referred to above, the Audit Committee recommended to
the Board of Directors that the audited consolidated financial statements be
included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2004 and be filed
with the SEC. In addition, the Audit Committee selected Crowe Chizek and Company
LLC to be the Company's
Independent
Registered Public Accounting Firm for the year ending December 31, 2005, subject
to the ratification of this appointment by the shareholders.
This
report shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The
foregoing report has been furnished by Committee members:
Howard H.
Nolan, Chairperson
Thomas E.
Halsey
Charles
I. Massoud
THE
COMPENSATION COMMITTEE
The
Compensation Committee consists of the following directors: Raymond Wesnofske,
Chairperson, Marcia Z. Hefter and R. Timothy Maran. The Committee met four times
in 2004. The
Compensation Committee is responsible for recommending to the full
Board:
· |
the
compensation of the chief executive officer (“CEO”) and chief
operating officer (“COO”); |
· |
reviewing
and administering overall compensation
policy; |
· |
setting
performance measures and goals; |
· |
administering
stock-based compensation plans; |
· |
approving
benefit programs; |
· |
establishing
compensation of the Board of Directors; and |
· |
other
matters of personnel policy and practice. |
Each
member of the Compensation Committee is considered "independent" as
defined in the NASDAQ®
corporate governance listing standards.
REPORT
OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
General
Policy
The
Company’s executive compensation policy is to provide an incentive for executive
officers to achieve corporate goals and to reward executive officers when these
goals are met. Central to the concept and design of executive compensation
strategy is the paramount importance of long term shareholder interests and the
need to align senior management with those interests.
Compensation
levels for executive officers are established after consideration of corporate
performance measures and executive compensation practices followed by the
Company’s industry peer group. Also, included in the deliberative process are
personal factors such as commitment, leadership, management style, teamwork and
community involvement.
The
Committee has access to all necessary Company financial reports, personnel
records and other data. Committee members have regular contact with executive
officers and senior management as a result of their service on the Board and
other Board Committees, giving members a basis
upon which to evaluate individual
qualities and capabilities. For each
of the past three years, the Company retained a compensation
consulting firm to analyze the executive officer and senior management
compensation levels, in terms of each of
the three elements cited below, and the
Company’s performance. A group of approximately forty comparably
sized and similarly profiled financial institutions were used for comparison
purposes. This group selected for this comparison needs to be distinguished from
the peer group used in the stock performance graph below. The companies included
in this group may have changed slightly from year to year due to merger activity
within the industry or other relevant factors. The Committee considered the
results of this comparison and the consulting firm’s corresponding
recommendations in making compensation program recommendations to the Board of
Directors.
The
objective of the Company’s executive officer and senior management compensation
structure is to motivate these individuals to put forth maximum effort toward
the achievement of specific corporate goals identified during the strategic
planning process of the Board and management. To that end, the Board has adopted
a compensation strategy that seeks to provide competitive compensation
opportunities that are strongly aligned to the financial and stock performance
of the Company. Three
compensation
elements are used in support of the strategy: base salary, short term incentives
and long term incentives.
Components
of Compensation
Base
Salary
Executive
officer base salary levels are reviewed annually with appropriate adjustments
recommended by the Committee to the full Board of Directors. For the 2005 fiscal
year the Company increased individual base salaries based upon the consideration
of the competitive base salary review, strong Company performance and individual
performance. The adjusted base salary levels are reflective of the individual
responsibilities, experience and performance, as well as competitive marketplace
conditions.
Short
Term Incentive Program
The
Company ties short term incentive bonuses to financial targets, specifically
return on average equity as compared to its peer group and growth in net profit.
For the fiscal year ended 2004, the Company returned approximately 22.82% on
average equity and approximately 8.1% growth in annual net profit over the prior
year, meeting the
goals defined by the Board and management. These performance standards place the
Company in the high performance tier, as defined by a prominent industry source,
when compared to commercial banks in its peer group.
Long
Term Stock Incentive Program
The third
and final component of the Company’s compensation strategy is the 1996 Equity
Incentive Plan, under which executive officers and senior management may be
given the opportunity to acquire or increase proprietary interest in the Company
through the granting of stock options and/or restricted stock awards. Such stock
options and awards offer them the possibility of future value, depending upon
the long term appreciation of the Company’s common stock and provide the
recipients with an incentive to advance the interests of the Company and also
encourage them to remain in the employ or service of the Company and its
subsidiaries.
Stock
options under the Plan may be either so-called incentive stock options, which
bestow certain tax benefits on the optionee, or non-qualified stock options, not
qualifying for such benefits. All options under the plan have an exercise price
that is not less than the market value of the Company’s common stock on the date
of the grant. Historically, stock based awards under the Company's plans
have either been stock options or shares of restricted stock (which are merely
shares of Common Stock
that are forfeitable and are subject to restrictions on transfer prior to the
vesting date.). The
vesting of restricted stock depends upon the executives continuing to render
services to the Company. Restricted stock awards under the plan carry dividend
rights from the date of grant. Restricted shares are forfeited if the award
holder departs the Company before vesting. Accelerated vesting is permitted
under limited circumstances. Options have no value unless the
Company's stock
price rises over time, and the value of restricted shares over time also is
directly proportionate to the market value of the Company's
stock.
The
Committee’s recommendations on granting options and restricted stock awards are
based on the evaluation of both the Company’s performance, as measured against
growth in earnings per share, and the individual’s accomplishments.
Chief
Executive Officer
In
assessing appropriate types and amounts of compensation to recommend for the
CEO, the
Committee evaluates both corporate and individual performance. Corporate factors
included in the evaluation are return on average shareholders’ equity, growth in
net income, growth in earnings per share and the Company’s performance as
compared to peer group institutions. Individual factors include the CEO’s
implementation of the Company’s strategic goals, formation of an effective
management team, and various personal qualities, including leadership. Based on
the
Committee’s recommendation, the Board of Directors determined
his 2005 salary to be $290,000.
Under the terms of his employment contract, this becomes his minimum annual
salary. For 2004, his annual salary was $273,470.
The CEO’s
bonus was $136,320 for 2004. On
January 21, 2004, he
received options to purchase 3,000 shares of Company Stock and restricted stock
awards valued at $25,920.
The
foregoing report has been furnished by Committee members:
Raymond
Wesnofske, Chairperson
Marcia
Z. Hefter
R.
Timothy Maran
PERFORMANCE
GRAPH
Pursuant
to the regulations of the SEC, the graph below compares the performance of the
Company with that of the total return for the NASDAQ® stock
market, United
States and for
certain bank stocks of financial institutions with an asset
size size
of $250
million to $500
million, and $500
million to $1 billion, as reported by SNL Financial L.C. from December 31,
1999 through
December 31, 2004. The $500 million to $1 billion bank stock index was added to
this summary because for the fiscal years 2003 and 2004 the Company’s asset size
was greater than $500 million. Prior to 2003, the Company’s asset size was
between $250 million and $500 million. The graph assumes the reinvestment of
dividends in additional shares of the same class of equity securities as those
listed below.
COMPENSATION
OF EXECUTIVE OFFICERS
The
following table sets forth information concerning compensation received
during
the last
three years by the Chief Executive Officer and each other executive officer of
the Bank whose salary and bonus exceeded $100,000 in 2004 (the “Named Executive
Officers”). The amount shown reflects bonus earned in the fiscal year but paid
in the following year. The officers of the Company are not compensated
separately in any way for their services.
SUMMARY
COMPENSATION TABLE
|
Annual
Compensation |
|
Long-Term
Compensation |
|
|
|
|
|
Awards |
|
Payouts |
|
Name
and
Principal
Position |
Year |
Salary (1) |
Bonus |
Other
Annual
Compen-
sation |
Restricted
Stock
Awards (2) |
Options
/SARs
(3) (shares) |
LTIP
Payouts |
All
Other Compen-sation (4) |
Thomas
J. Tobin President and Chief Executive Officer |
2004
2003
2002 |
$273,470
$259,385
$243,462 |
$136,320$172,800
$203,200 |
$0
$0
$0 |
$25,920
$33,408
$27,072 |
3,000
6,000
6,000 |
$0
$0
$0 |
$22,150
$21,818
$21,970 |
Christopher
Becker Executive Vice President and Chief Operating Officer
|
2004
2003
2002 |
$172,669
$168,808
$153,654 |
$ 75,600
$ 94,864
$107,800 |
$0
$0
$0 |
$15,840
$20,880
$16,920 |
1,875
3,750
3,750 |
$0
$0
$0 |
$11,619
$11,800
$11,910 |
Janet
T. Verneuille Senior Vice President and Chief Financial
Officer
|
2004
2003
2002 |
$144,231
$124,519
$118,961 |
$52,000
$60,000
$50,625 |
$0
$0
$0 |
$ 9,720
$12,528
$10,152 |
1,125
2,250
2,250 |
$0
$0
$0 |
$6,150
$5,735
$3,616 |
(1) |
Includes
salary deferred at the election of the Named Executive Officers (such as
deferred salary under the Company’s 401(k)
Plan). |
(2) |
Represents
the dollar value of restricted shares granted to the Named Executive
Officers during 2004,
2003 and 2002.
The listed dollar values represent the number of such restricted shares
multiplied by the closing market price of the Company’s Common Stock on
the date of the grant. Restricted shares granted under the Company’s
equity incentive plan carry the same dividend rights as unrestricted
shares of Common Stock from the date of the grant. Restricted stock held
by the Named Executive Officers at December 31, 2004 were 3,240 shares or
$99,144 in market value for Mr. Tobin, 2,010 shares or $61,506 in market
value for Mr. Becker and 1,215 shares or $37,179 in market value for Ms.
Verneuille. All awards vest in equal installments over a three year
period. The fair market value of the Company’s common stock on December
31, 2004 was $30.60 per share. |
(3) |
Represents
number of shares subject to options granted to the Named Executive
Officers. No options granted to the Named
Executive
Officers
have been accompanied by stock appreciation rights
(“SARs”). |
(4) |
Includes,
among other things, any Company contributions on behalf of the Named
Executive Officers to the 401(k) Plan; director’s fees paid by the
Company; and specified premiums paid by the Company on certain insurance
arrangements on behalf other executive officers. Listed amounts for 2004
include 401(k) Plan contributions by the Company on behalf of the Named
Executive Officers Tobin, Becker and Verneuille of $6,150, $5,619 and
$6,150, respectively; director’s fees in the amount of $6,000 each for Mr.
Tobin and Mr. Becker who serves as secretary
to the Board; and the following insurance premiums paid by the Company on
behalf of Mr. Tobin: $4,612 in premiums paid on a life insurance policy
and $5,388 in premiums paid on a long-term disability policy.
|
The
following table sets forth information concerning stock options granted for 2004
to the Named Executive Officers.
Options/SAR
Grants in Last Fiscal Year |
Name |
Number
of
Securities
Underlying
Options/SARs
Granted |
%
of Total Options/SARs
Granted
to
Employees
in
Fiscal
Year |
Exercise
or Base
Price
(dollars/share) |
Expiration
Date |
Grant
Date
Present
Value (1) |
Thomas
J. Tobin |
3,000 |
23.5% |
$24.00 |
1/21/14 |
$13,350 |
Christopher
Becker |
1,875 |
14.7% |
$24.00 |
1/21/14 |
$8,344 |
Janet
T. Verneuille |
1,125 |
8.8% |
$24.00 |
1/21/14 |
$5,006 |
(1) |
The
weighted average, fair value of the options granted during 2004 was $4.45.
The fair value of each option was estimated on the date granted using the
Black-Scholes option pricing model. The following weighted average
assumptions were used for grants during 2004: risk-free interest rate of
3.02%; expected dividend yield of 2.75%; and expected volatility of 23.5%.
Options are exercisable immediately. |
The
following table sets forth information concerning all stock options that were
exercised in 2004 and options held at year-end 2004 by the Named Executive
Officers.
Aggregated
Option/SAR Exercises in the Last Fiscal Year and Year-End Option/SAR
Values |
Name |
Shares
Acquired on
Options
Exercised |
Value
Realized (1) |
Number
of
Securities
Underlying
Unexercised
Options/SARs
at
December
31, 2004 (Exercisable/
Unexercisable) |
Value
of Unexercised
In-the-Money
Options/SARs
at
December
31, 2004 (2)
(Exercisable/
Unexercisable) |
Thomas
J. Tobin |
17,041 |
$516,854 |
42,209/0 |
$703,213/0 |
Christopher
Becker |
11,250 |
$298,125 |
16,875/0 |
$275,750/0 |
Janet
T. Verneuille |
2,250 |
$63,563 |
7,875/0 |
|
(1) |
Based
on the difference between aggregate exercise price and fair market value
of shares of Common Stock as of the date of aggregate
exercise. |
(2) |
Based
on the fair market value of the Company’s
Common
Stock
on December 31, 2004 ($30.60 per share) minus the exercise
price. |
Equity
Compensation Plan Disclosure. Set forth
below is information as of December 31, 2004
regarding compensation plans under which equity securities of the Company are
authorized for issuance.
Plan |
Number
of Securities to be
Issued
upon Exercise of
Outstanding
Options and
Rights |
Weighted
Average
Exercise
Price |
Number
of Securities
Remaining
Available for
Issuance
under Plan |
Equity
compensation plans approved by shareholders
|
102,429
|
$15.10
|
325,849
|
Equity
compensation plans not approved by shareholders
|
_
|
_
|
_
|
Total
|
102,429
|
$15.10
|
325,849
|
EMPLOYMENT
CONTRACT AND
SEVERANCE AGREEMENTS
The
Company and the Bank have entered into employment agreements with Messrs. Tobin
and Becker and Ms. Verneuille. The employment agreements provide for five year,
three year and two year terms of employment, respectively, that extend, at the
option of the Company or the Bank, on an annual basis for an additional one year
period unless written
notice of non-renewal is provided. If the
Company or the Bank does not extend the term
of the agreement, or the executive elects not to renew the
agreement, the term
of the agreements becomes a fixed four, two or one year term, as the case may
be.
Under the
employment agreements, the annual salary of the named executive officers is
reviewed annually by the Board of Directors or a Committee of the Board of
Directors. For 2005, the annual salary for Messrs. Tobin and Becker and Ms.
Verneuille has been set at $290,000, $200,000 and $160,000, respectively. In
addition to an annual salary, the employment agreements provide for, among other
things, participation in stock benefit plans and certain other employee and
fringe benefit programs applicable to executive management. The employment
agreement for Mr. Tobin provides for the purchase of a special disability income
policy and a supplemental retirement income plan policy with pre-retirement
death benefits.
Each of
the employment agreements provides that the Company, or the Bank, may terminate
the covered executive for cause, as described in the agreements, at any time. If
either the Company or the Bank terminates an executive’s employment other than
for cause or a change in control or in the event the executive terminates
his/her employment with the Company or the Bank based upon any of the following
conditions (collectively, “Event of Termination”): (1) failure to elect or
re-elect or appoint or re-appoint the executive to his/her current position; (2)
material change in the executive’s functions, duties or responsibilities which
cause the executive’s position to become one of lesser responsibility,
importance or scope; (3) relocation of the executive’s principal place of
employment outside of Southampton, East Hampton, Shelter Island, Southold or
Riverhead; (4) reduction in the benefits or perquisites provided to the
executive; (5) liquidation or dissolution of the Company or the Bank; or (6)
material breach of the agreement by the Company or the Bank, the employment
agreements provide that the executive or, in the event of the executive’s death,
his/her beneficiary, will receive the payments and benefits that would have been
provided to him/her under the agreement for the longer of (i) three years in the
case of Messrs. Tobin and Becker or two years in the case of Ms. Verneuille or
(ii) the remaining term of the relevant agreement.
Under
each of the employment agreements, a Change in Control is an event which: (a) is
required to be reported on Form 8-K under the Securities Exchange Act of 1934,
as amended, (b) results in a Change in Control based upon the fact that the
acquirer has received all applicable regulatory approvals or (c) results in any
of the following: any person becoming the beneficial owner of 30% or more of the
Bank’s or the Company’s voting securities, individuals on the current Board of
Directors ceasing to constitute a majority of the Board, a corporate
reorganization, merger or similar transaction and the Bank or the Company is not
the resulting entity, a proxy solicitation from someone other than current
management seeking approval or certain corporate reorganizations, mergers or
similar transactions or a successful tender offer for the acquisition of 30% or
more of the shares of the Bank or the Company. If: (1) following a Change in
Control of the Company or the Bank the executive’s employment with the Company
or the Bank is involuntarily terminated, (2) within 90 days following the Change
in Control, the executive voluntarily terminates his/her employment provided the
acquirer is a private investor, group of private investors or private company
controlled by a private investor or group, or (3) within three years following a
Change in Control, the executive suffers a demotion, loss of title or
significant responsibility, reduction in compensation or benefits or relocation
of principal employment to an office other than one located in Southampton, East
Hampton, Shelter Island, Southold or Riverhead, the executive or, in the event
of the executive’s death, his/her beneficiary, will receive an amount equal to
3.25, 3.0 or 2.0, as the case may be, times the executive’s compensation for the
preceding taxable year payable at the executive’s election in a lump sum or over
39, 36 or 24 months, respectively, on either a bi-weekly or monthly basis. In
addition, the health and welfare benefits received by the executive during
his/her employment would be continued for 39, 36 or 24 months, as the case may
be, following his/her termination of employment.
Payments
pursuant to the employment agreements and other arrangements in the event of a
Change in Control may constitute a “parachute payment” for federal income tax
purposes and may result in the imposition of an excise tax on the executive. In
such a case, the employment agreements provide that the Company or the Bank will
pay the executive an amount sufficient to enable the executive to retain the
payments and benefits provided to him/her had he/she not been subject to such a
tax.
The
Company guarantees the payment of compensation and benefits to the executives
under the employment agreements with the Bank. The Company and the Bank will
reimburse or pay the executive for all reasonable costs and legal fees paid or
incurred in connection with any dispute or question of interpretation relating
to the employment agreements if the executive is successful on the merits of
his/her claim pursuant to a legal judgment, arbitration or
settlement.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During
the year ended December 31, 2004, the Company had no “interlocking”
relationships in which (1) any executive officer is a member of the Board of
Directors of
another entity, one of whose executive officers is a member of the Company’s
Board of Directors, or (2) any executive officer is a member of the Compensation
Committee of another entity, one of whose executive officers is a member of the
Company’s Board of Directors.
RETIREMENT
PLANS
The Bank
maintains a non-contributory, tax-qualified defined benefit pension plan (the
“Retirement Plan”) for eligible employees. All salaried employees at least age
21 who have completed at least one
year of
service are eligible to participate in the Retirement Plan. The Retirement Plan
provides for a benefit for each participant, including the Named Executive
Officers, in an amount equal to 1.50% of the participant’s average annual
earnings multiplied by creditable service (up to 35 years) plus 1.00% of the
participant’s average annual earnings multiplied by creditable service (in
excess of 35 years) minus .49% of the participant’s final average compensation
multiplied by creditable service (up to 35 years). As
required by law, the Retirement Plan is covered by the insurance program of the
Pension Benefit Guarantee Corporation.
In
addition, the Bank has a Supplemental Executive Retirement Plan (the “SERP”),
which is an actuarial plan, under which additional retirement benefits are
accrued for eligible Executive Officers. Under the Supplemental Retirement Plan,
the amount of supplemental retirement benefits is based upon a benefit at normal
retirement which approximates the differences between (i) the total retirement
benefit the participant would have received under the Bridgehampton Retirement
Plan without taking into account limitations on compensation and annual
benefits; and (ii) the retirement benefit the participant is projected to
receive under the Bridgehampton Retirement Plan at normal
retirement.
The
following table approximates the annual retirement benefits based on average
annual earnings for the highest five consecutive years at various levels of
compensation and years of service under the Retirement Plan and the SERP. Annual
average compensation is based on the average annual earnings,
including salary and bonus, for the
highest five consecutive years.
Annual |
|
|
|
|
|
Average |
20
Years |
25
Years |
30
Years |
35
Years |
40
Years |
Compensation |
Service |
Service |
Service |
Service |
Service |
|
|
|
|
|
|
$100,000 |
$
25,464 |
$
31,830 |
$
38,196 |
$
44,562 |
$
49,562 |
$125,000 |
$
32,964 |
$
41,205 |
$
49,446 |
$
57,687 |
$
63,937 |
$150,000 |
$
40,464 |
$
50,580 |
$
60,696 |
$
70,812 |
$
78,312 |
$175,000 |
$
47,964 |
$
59,955 |
$
71,946 |
$
83,937 |
$
92,687 |
$200,000 |
$
55,464 |
$
69,330 |
$
83,196 |
$
97,062 |
$107,062 |
$250,000 |
$
70,464 |
$
88,080 |
$105,696 |
$123,312 |
$135,812 |
$300,000 |
$
85,464 |
$106,830 |
$128,196 |
$149,562 |
$164,562 |
$400,000 |
$115,464 |
$144,330 |
$173,196 |
$202,062 |
$222,062 |
$450,000 |
$130,464 |
$163,080 |
$195,696 |
$228,312 |
$250,812 |
$500,000 |
$145,464 |
$181,830 |
$218,196 |
$254,562 |
$279,562 |
The
following table sets forth the years of credited service and the average annual
basic earnings (as defined above) determined as of September 30, 2004 for each
of the Named
Executive Officers.
|
|
|
|
Average |
|
|
Years
of Credited Service |
Annual
|
|
|
Years |
Months |
Earnings |
|
|
|
|
|
Thomas
J. Tobin |
|
19 |
2 |
$415,528 |
Christopher
Becker |
|
16 |
7 |
252,450 |
Janet
T. Verneuille |
|
11 |
10 |
151,557 |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Certain
directors and executive officers and related parties, including their immediate
families and companies in which they are principal owners, were loan customers
of the Bank during 2004. Such loans are made in the ordinary course of business
at normal credit terms, including interest rate and security, and do not
represent more than a normal risk of collection. No such loan was classified by
the Bank as of December 31, 2004 as a non-accrual, past due, restructured or
potential problem loan.
COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the
federal securities laws, the Company’s directors, certain of its executive
officers, and any persons holding more than ten percent of the Company’s Common
Stock are required to file reports with the SEC on Forms 3, 4 and 5 disclosing
beneficial ownership and changes in beneficial ownership of the Common Stock.
SEC rules require disclosure in the Company’s proxy statement of the failure of
an officer, director or 10% beneficial owner of the Company’s Common Stock to
file a Form 3, 4 or 5 on a timely basis. During 2004 all of these filing
requirements were satisfied. In making these statements, the Company has relied
solely on the written representations of the incumbent directors and officers
and copies of the reports which they have filed with the
Commission.
ITEM
2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Crowe
Chizek and Company LLC (“Crowe
Chizek”), was
the
Independent
Registered Public Accounting Firm of the
Company for the year ended December 31, 2004, and has been
selected to serve as Independent
Registered Public Accounting Firm for
2005. Representatives of Crowe Chizek are expected to be present at the Annual
Meeting. They
will have an with
an
opportunity to make a statement if they so desire and are expected to be
available to respond to appropriate questions from shareholders.
Shareholder
ratification of the selection of Crowe Chizek is not required by the Company’s
bylaws or otherwise. However, the Board is submitting the selection of the
Independent
Registered Public Accounting Firm to the
shareholders for ratification as a matter of good corporate practice. If the
shareholders fail to ratify the selection of Crowe Chizek, the Audit Committee
will reconsider whether or not to retain that firm. Even if the selection is
ratified, the Audit Committee in its discretion may direct the appointment of a
different Independent
Registered Public Accounting Firm at any
time during the year if it determines that such change is in the best interests
of the Company and its shareholders.
FEES
PAID TO CROWE
CHIZEK
Set forth
below is certain information concerning aggregate fees billed for professional
services
rendered
by Crowe Chizek during 2004 and
2003:
Audit
Fees. The audit
fees billed for professional services rendered by Crowe Chizek for the audit of
the Company’s annual consolidated
financial
statements for the most recent fiscal year, for
the
review of the financial statements included in the Company’s Quarterly Reports
on Form 10-Q, and for
the audits of internal control over financial reporting and management’s
assessment of internal control over financial reporting for the
most recent fiscal year were $115,500. For the
2003
fiscal
year, such fees were $59,000.
Audit
Related Fees. Crowe
Chizek did not provide any services to the Company relating to assurance and
related services that are reasonably related to the performance of the audit and
the review of the financial statements that are not already reported in Audit
Fees above during the fiscal years ended December 31, 2004 and 2003.
Tax
Fees. Crowe
Chizek did not provide any services to the Company relating to tax compliance,
tax advice and tax planning during the fiscal years ended December 31, 2004 and
2003.
All
Other Fees. Crowe
Chizek did not provide any other services to the Company during the fiscal years
ended December 31, 2004 and 2003.
POLICY
ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
The Audit
Committee has adopted policies and procedures for the pre-approval of the above
fees. All requests for services to be provided by Crowe Chizek are submitted to
the director
of internal
audit, who
subsequently requests pre-approval from the Audit Committee Chairperson. A
schedule of approved services is then reviewed and approved by the entire Audit
Committee at the next Audit Committee meeting.
REQUIRED
VOTE AND RECOMMENDATION OF THE BOARD OF DIRECTORS
In order
to ratify the selection of Crowe Chizek and Company LLC as Independent
Registered Public Accounting Firm for the
2005 fiscal year, the proposal must receive the affirmative vote of at least a
majority of the votes cast at the Annual Meeting, either in person or by proxy.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF CROWE CHIZEK AND
COMPANY LLC AS INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
SHAREHOLDER
PROPOSALS
In order
to be eligible for inclusion in the proxy materials for next year’s Annual
Meeting of Shareholders, any shareholder proposal to take action at such meeting
must be received at the Company’s executive office, 2200 Montauk Highway, P.O.
Box 3005, Bridgehampton, New York 11932, no later than November
8, 2005.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
ADVANCE
NOTICE OF NOMINATIONS TO BE BROUGHT BEFORE AN ANNUAL
MEETING
The
Company’s Bylaws provide an advance notice procedure for certain business, or
nominations to the Board of Directors, to be brought before an annual meeting of
shareholders. In order for a shareholder to properly bring business before an
annual meeting, the shareholder must give written notice to the Corporate
Secretary not less than 90 days prior to the date of the Company’s proxy
materials for the preceding year’s annual meeting; provided, however, that if
the date of the annual meeting is advanced more than 30 days prior to or delayed
by more than 30 days after the anniversary of the preceding year’s annual
meeting, notice by the shareholder to be timely must be so delivered not later
than the close of business on the tenth day following the day on which public
announcement of the date of such annual meeting is first made. The Bylaws
require that the notice must include, among other things, the shareholder’s
name, record address, and number of shares owned, describe briefly the proposed
business, the reasons for bringing the business before the annual meeting, and
any material interest of the shareholder in the proposed business. Nothing in
this paragraph shall be deemed to require the Company to include in its annual
meeting proxy statement any shareholder proposal that does not meet all of the
requirements for inclusion established by the Securities and Exchange Commission
in effect at the time such proposal is received.
OTHER
MATTERS
The Board
of Directors is not aware of any business to come before the Annual Meeting
other than the matters described above in this proxy statement. However, if any
matters should properly come before the Annual Meeting, it is intended that
holders of the proxies will act in accordance with their best
judgment.
Whether
you intend to be present at this meeting or not, you are urged to return your
signed proxy promptly. For your convenience, you may also cast your vote
electronically.
Your
continued interest in and support of the Company is sincerely
appreciated.
AN
ADDITIONAL COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2004, WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS AS OF THE
RECORD DATE UPON WRITTEN OR TELEPHONIC REQUEST TO SANDRA NOVICK, VICE PRESIDENT
AND CORPORATE SECRETARY, 2200
MONTAUK HIGHWAY, P.O. BOX 3005, BRIDGEHAMPTON, NEW YORK
11932,
OR CALL (631) 537-1000,
EXT. 7263.
By Order
of the Board of Directors
Sandra K.
Novick
Vice
President and Corporate Secretary
Bridgehampton,
New York
March 28,
2005
APPENDIX
A
Bridge
Bancorp, Inc.
Audit
Committee Charter
(As
approved as January 21, 2004)
I.
Statement of Policy
The Audit
Committee of Bridge Bancorp, Inc. (the “Company”) is established by and amongst
the Board of Directors of the Company for the primary purpose of assisting the
Board of Directors of the Company and The Bridgehampton Bank (the “Bank”) in:
• |
overseeing
the integrity of the Company’s financial
statements, |
• |
overseeing
the Company’s compliance with legal and regulatory
requirements, |
• |
overseeing
the Independent
Auditors’s
qualifications and independence, |
• |
overseeing
the performance of the Company’s internal audit function and Independent
Auditors,
and |
• |
overseeing
the Company’s system of disclosure controls and system of internal
controls regarding finance, accounting, and legal compliance.
|
Consistent
with this function, the Audit Committee (the “Committee”) should encourage
continuous improvement of, and should foster adherence to, the Company’s
policies, procedures and practices at all levels. The Committee should also
provide an open avenue of communication among the Independent
Auditors,
financial and senior management, the internal auditing function, and the Board
of Directors.
The
Committee has the authority to obtain advice and assistance from outside legal,
accounting, or other advisors as deemed appropriate to perform its duties and
responsibilities.
The
Company shall provide appropriate funding, as determined by the Committee, for
compensation to the Independent
Auditors and to any advisers that the Audit
Committee chooses to engage.
The
Committee will primarily fulfill its responsibilities by carrying out the
activities enumerated in Section V of this Charter. The Committee will report
regularly to the Board of Directors regarding the execution of its duties and
responsibilities.
II.
Organization and Membership
The
Committee of the Board shall consist of a minimum of three directors, each of
whom shall be Independent as defined in Section 10A(m)(3) of the Securities
Exchange Act of 1934 and SEC Rule 10A-3 thereunder, and free of any relationship
that, in the opinion of the Board, would interfere or appear to interfere with
their exercise of independent judgment in carrying out the responsibilities of a
member of the Committee. In determining whether any relationship would interfere
with independent judgment and therefore disqualify a director from being
considered Independent, the Company shall use the standards of independence
applicable to a company the securities of which are quoted on the
NASDAQ® Stock
Market.
Unless a
Chair is elected by the full Board, the members of the Committee may designate a
Chair by majority vote of the full Committee membership. A quorum of the
Committee shall consist of two thirds of membership.
III.
Qualifications
Each
member of the Committee must be able to read and understand fundamental
financial statements, including a balance sheet, income statement and cash flow
statement. The Board shall determine whether at least one member of the
Committee qualifies as an “Audit
Committee financial expert” in compliance with the criteria established by the
SEC and other relevant regulations. The existence of such member, including his
or her name and whether or not he or she is Independent,
shall be disclosed in periodic filings as required by the SEC. The Audit
Committee financial expert will be
identified in the minutes of the Committee and Company’s Board.
IV.
Meetings
The
Chairperson of the Committee, as appropriate in consultation with the Director
of Internal Audit, will establish the agenda for each meeting. The Committee
will hold at least four meetings per year or more frequently if required.
As part
of its job to foster open communication, the Committee should meet periodically
with management, the director of the internal auditing function and
the Independent
Registered Auditors in
separate executive sessions to discuss any matters that the Committee or each of
these groups believe should be discussed privately. Each regularly scheduled
meeting shall conclude with an executive session of the Committee absent members
of management and on such terms and conditions as the Committee may elect. The
Committee may request any employee of the Company’s or the Bank’s staff
attend for that
portion of the meeting where their presence could contribute substantively to
the subject of discussion.
In
addition, the Committee should meet quarterly with the Independent Auditors and
management to discuss the annual audited financial statements or quarterly
financial statements, including the Company’s disclosure under “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.”
Minutes
of each meeting should be prepared in sufficient detail to convey the substance
of discussions held. These minutes will be included with the agenda for the next
scheduled Committee
meeting and copies will be provided to the Board.
V.
Powers and Responsibilities
Auditors
and Auditor Independence
The
Committee will:
1. |
Have
the sole power to select and hire the Independent Auditors responsible to
audit the Company’s financial statements. The Committee shall advise the
Independent
Auditors that they are accountable to the Audit Committee and the Board as
representatives of the Shareholders. |
2. |
Have
the sole power to approve the Independent Auditors’
fees. |
3. |
Provide
an open avenue of communication between the Independent Auditors and the
Board of Directors. |
4. |
Receive
from the Independent Auditors disclosure regarding the Auditors’
independence required by Independence Standards Board Standard No. 1.
Assess the independence of the Independent Auditors, and in connection
therewith review all relationships between the Independent Auditors and
the Company. |
5. |
Have
the sole power to discharge the Independent
Auditors. |
6. |
Review
and pre-approve both audit and permissible non-audit services to be
provided by the Independent Auditors (other than with respect to
de
minimis
exceptions permitted by the Sarbanes-Oxley Act of 2002). This duty may be
delegated to one or more designated members of the Committee with any such
pre-approval reported to the Committee at its next regularly scheduled
meeting. The Committee may also adopt policies and procedures for the
pre-approval of audit and permissible non-audit services. Approval of
non-audit services shall be disclosed to investors in periodic reports
required by Section 13(a) of the Securities Exchange Act of
1934. |
7. |
Review
and evaluate the lead partner of the Independent Auditors
team. |
8. |
Obtain
and review a report from the Independent Auditors at least annually
regarding (a) the Independent Auditors’s
internal quality-control procedures, (b) any material issues raised by the
most recent internal quality-control review, or peer review, of the firm,
or by any inquiry or investigation by governmental or professional
authorities within the preceding five years regarding
one or more independent audits carried out by the firm, and (c) any steps
taken to deal with any such issues. Evaluate the qualifications,
performance and independence of the Independent Auditors, including
considering whether the Auditors’
quality controls are adequate and the provision of permitted non-audit
services is compatible with maintaining the Auditors’
independence, and taking into account the opinions of management and
internal auditors. The Committee shall present its conclusions with
respect to the Independent Auditors to the Board. |
9. |
Ensure
the rotation of the lead (or coordinating) audit partner having primary
responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law.
|
10. |
Recommend
to the Board policies for the Company’s hiring of employees or former
employees of the Independent Auditors who participated in any capacity in
the audit of the Company. |
11. |
Discuss
with the Independent Auditors issues on which the Independent Auditors
consulted with its national office and on matters of audit quality and
consistency considered by the national
office. |
Financial
Reporting
The
Committee will:
1. |
Meet
with the Independent Auditors, internal auditors and financial management
of the Company prior to the annual audit to review the scope and the audit
procedures of the proposed audit and, at the completion of the audit, meet
again with the Independent Auditors’ to
review audit results and discuss the Independent Auditors’ judgment,
comments and recommendations about the quality, not just acceptability, of
the Company’s
accounting principles as applied in its financial reporting. |
2. |
Review
and discuss with management, the Director
of Internal
Audit,
and the Independent Auditors, the Company’s audited annual financial
statements and related footnotes and disclosure under “Management’s
Discussion and Analysis,”
Disclosure & Analysis,
prior to the filing of the Form
10-K or the release of any audited financial statements.
|
3. |
Discuss
with management the Company’s earnings press releases, including the use
of “pro forma” or “adjusted” non-GAAP information, as well as financial
information and earnings guidance provided to analysts and rating
agencies. Such discussion may be done generally (consisting of discussing
the types of information to be disclosed and the types of presentations to
be made). |
4. |
Review
with management and the Independent Auditors interim financial information
reported in the Company’s Form
10-Q before it is filed. |
5.
|
Ensure
that the Committee receives, reviews and discusses with the Independent
Auditors all matters required to be discussed by Statement on Auditing
Standards No 61. |
6.
|
Receive
from the Independent Auditors the required communications regarding: (1)
all critical accounting policies and practices used, which shall include
the accounting policies and procedures that are most important to the
portrayal of the Company’s financial condition and results of operations
and require subjective judgment on the part of management and the
Independent Auditors, (2) all material alternative accounting treatments
within GAAP that have been discussed with management, including the
ramifications of the use of the alternative treatments and the treatment
preferred by the Independent Auditors, and (3) other material written
communications between the external auditor and management such as any
management letter or schedule of “unadjusted differences.” The required
report need not be in writing but the communications are required to be
made to the Audit
Committee before the external auditor’s report on the financial statements
is filed with the SEC, and should
be |
reflected in the minutes of the
Committee.
7.
|
Discuss
with the Independent Auditors its evaluation of the Company’s financial,
accounting and auditing personnel and the cooperation that the Independent
Auditors received during the course of its audit, and any audit problems
or difficulties,
including any restrictions on the scope of the work or access to required
information and management’s response to the problem or
difficulty. |
8.
|
Establish
regular and separate systems of reporting to the Committee by each of
management, the Independent Auditors and the internal auditor regarding
any significant judgments made in management’s preparation of the
financial statements and the view of each as to appropriateness of such
judgments. |
9.
|
Review
with the Independent Auditors and the Director of Internal Audit:
|
|
a.
The adequacy of the Company’s internal controls including computerized
information system controls and security.
b.
Any related significant findings and recommendations of the Independent
and internal auditors
together with management’s responses thereto.
|
10.
|
Based
on the reviews and discussions referred to above, make a recommendation to
the Board of Directors as to the inclusion of the financial statements
referred to above in the Company’s Annual Report on Form 10-K to be filed
with the SEC. |
Internal
Controls and Process Improvement
The
Committee will:
1.
|
Establish
procedures for the receipt, retention and treatment of complaints received
regarding the Company’s
accounting, internal accounting controls or auditing matters.
|
2.
|
Establish
procedures for the confidential, anonymous submission by employees of
concerns regarding questionable accounting or auditing
matters. |
3.
|
Inquire
of management, the director of internal audit, and the Independent
Auditors about significant risks or exposures and assess the steps
management has taken to minimize such risks.
|
4.
|
Consider,
in consultation with the Independent Auditors and Director of Internal
Audit, the audit scope and plan of the internal and external auditors.
Review the coordination of audit effort to assure completeness of
coverage, reduction of redundant efforts, and the effective use of audit
resources. |
Internal
Audit and Management
The
Committee will:
1.
|
Review
and concur in the appointment, replacement, reassignment, or dismissal, of
the Director of Internal Audit. |
2.
|
Consider
and review with management and the Director of Internal
Audit: |
|
a.
Significant findings during the year and management’s responses
thereto. |
|
b.
Any difficulties encountered in the course of the internal audits,
including any restrictions on the scope of internal auditors’ work or
access to required information. |
|
c.
Any changes required in the planned scope of the internal audit plan.
|
d. The
internal audit department budget and staffing.
e. The
internal audit charter.
3.
|
Review
with the Bank’s Director of Internal Audit
periodically: |
a.
Significant findings relative to regulatory compliance audits together with
management’s responses thereto.
|
b.
The Company’s and the Bank’s compliance efforts and projects, future
regulatory changes and their related impact, and any recommendations to
strengthen compliance. |
c.
Results of the Bank’s self assessment of its fair lending compliance and related
recommendations together with management’s response thereto.
4.
|
Review
with the Bank’s Director of Internal Audit and management at least
annually or more frequently as circumstances require:
|
|
a.
The planned scope of the loan review consultant’s outside
review. |
b. The
results of the loan review and the related report of loans reviewed and
recommendations.
5.
|
Review
with the Company’s Director of Internal Audit and management the results
of examinations performed by outside regulatory agencies.
|
6.
|
Report
Committee
actions to the Board
of Directors
with such recommendations as the Committee
may deem appropriate. |
7.
|
Review
with management the policies and procedures with respect to officers
business expense accounts and perquisites, including their use of
corporate assets. |
VI.
Other
Inquire
of the Independent Auditors, and
the Chief
Executive Officer and Chief
Financial Officer regarding the “quality of earnings” of the Company from a
subjective as well as an objective standpoint.
Review
with management and the Independent
Auditors the effects of any regulatory and accounting initiatives, as well as
off balance
sheet structures, if any.
Review
and approve all related party transactions between the Company or the Bank and
any director or executive officer. Related party transactions are those
transactions required to be disclosed pursuant to SEC Regulation S-K, Item
404.
Perform
other functions as assigned by law, the Company’s charter or by-laws or the
Board of Directors.
The
duties and responsibilities of a member of the Committee are in addition to
those duties set out for a member of the Board of
Directors.
The Audit
Committee Charter shall be reassessed annually for adequacy and updated for any
changes that are necessary as a result of new laws or regulations.
Limitation
of Audit Committee’s Role
While the
Committee has the responsibilities and powers set forth in this Charter, it is
not the duty of the Committee to plan or conduct audits or to determine that the
Company’s financial statements and disclosures are complete and accurate and are
in accordance with generally accepted accounting principles and applicable rules
and regulations. These are the responsibilities of management and the
Independent Auditors.