TABLE OF
CONTENTS
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Reasons
to Vote against the Proposed Merger Agreement
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2
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Mr.
Campbell’s and Mr. Dugan’s Meetings with Representatives of Pamrapo and
BCB
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5
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The
Special Meeting
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6
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The
Merger
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6
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General
Voting Procedures
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8
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Questions
& Answers about Voting Procedures
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8
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No
Appraisal Rights
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11
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Proxy
Revocation Rights
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11
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Proxy
Solicitation and Expenses
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12
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Information
about Pamrapo
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12
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Where
You Can Find More Information about Pamrapo and
BCB
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12
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Other
Matters to be Voted Upon
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13
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Judgments,
Estimates and Forward-Looking Statements
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14
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Annex
A - Common Stock Ownership of Certain Beneficial Owners and
Management
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A-1
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Proxy
Card
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SPECIAL MEETING OF SHAREHOLDERS
OF
PAMRAPO
BANCORP, INC.
PRELIMINARY
PROXY STATEMENT OF
WILLIAM
J. CAMPBELL AND JAMES P. DUGAN, ESQ.
JANUARY
[___], 2010
This preliminary proxy statement (this
“Proxy Statement”) and the enclosed green proxy card (the “
GREEN
proxy card”) are being
furnished to you, the shareholders of Pamrapo Bancorp, Inc. (“Pamrapo” or the
“Company”), by Mr. William J. Campbell (“Mr. Campbell”), the former
President and Chief Executive Officer of Pamrapo, and James P. Dugan, Esq. (“Mr.
Dugan”), each of whom are participants in this solicitation. Mr.
Campbell beneficially owns an aggregate of 600,613 shares of common stock of
Pamrapo, representing approximately 12.2% of an aggregate of 4,935,542 shares
outstanding. Mr. Dugan does not own any shares of Pamrapo common
stock. Mr. Dugan is serving as co-proxy with Mr. Campbell with
respect to this proxy solicitation in the event that Mr. Campbell is unable to
attend the Special Meeting described below and, as such, is deemed to be a
participant in this proxy solicitation.
Mr. Campbell and Mr. Dugan are
soliciting proxies to be used at the Special Meeting of Shareholders of Pamrapo,
and any adjournments or postponements thereof (the “Special Meeting”), which
will be held at The Chandelier Restaurant, 1081 Broadway, Bayonne, New Jersey,
at 11:00 a.m. (local time), on Thursday, February 11,
2010. Pursuant to this Proxy Statement, Mr. Campbell and Mr. Dugan
are soliciting proxies from holders of shares of Pamrapo common stock to
vote:
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§
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AGAINST
adoption of the Agreement and Plan
of Merger, dated as of June 29, 2009, by and between BCB Bancorp, Inc. and
the Company, as subsequently amended (the “Merger
Agreement”).
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* * * * * * *
This
Proxy Statement and the accompanying GREEN Proxy Card are first being mailed to
shareholders on or about January [ ],
2010. The Superior Court of New Jersey, Hudson County, Chancery
Division, has set Thursday, February 11, 2010, as the date for the Special
Meeting and Pamrapo’s Board of Directors has fixed December 28, 2009 (the
“Record Date”) as the date for determining which shareholders will be entitled
to vote at the Special Meeting.
* * * * *
* *
No matter how many or how few shares
you own, it is imperative that you sign, date and return the
enclosed
GREEN proxy card, voting
AGAINST
adoption of the Merger
Agreement.
* * * * *
* *
Any vote that you cast related to the
Merger Agreement for the purpose of the special meeting of shareholders that had
been scheduled for December 22, 2009 is no longer valid. The special
meeting of shareholders did not take place on December 22, 2009, as planned,
pursuant to a court order. In order for your vote against the
adoption of the Merger Agreement to count, you will need to MARK, SIGN, DATE and
RETURN the enclosed GREEN proxy card in the envelope provided.
* * * * *
* *
Even if you have already returned a
white proxy card sent to you by the Company, please also return the enclosed
GREEN proxy card if you are against adoption of the Merger
Agreement. By completing and returning the GREEN proxy card, the
Company’s proxy card will be automatically revoked. It is very important that
you DATE YOUR GREEN PROXY CARD, because your latest-dated proxy is the only one
that counts in the calculation of votes cast.
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All valid proxies received before
the Special Meeting will be voted, and
shareholders
have the power to revoke their
proxies at any time before they are exercised.
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§
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Please do not return any proxy
sent to you by the Company.
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REASONS
TO VOTE AGAINST THE PROPOSED MERGER AGREEMENT
THE
MERGER CAN BE BLOCKED IF YOU VOTE AGAINST THE MERGER AGREEMENT.
Mr. Campbell believes that the merger
of Pamrapo and BCB Bancorp, Inc. (“BCB”) is a bad deal for Pamrapo’s
shareholders and he urges that fellow Pamrapo Shareholders vote
AGAINST
the adoption of the
Merger Agreement and send a message to the Pamrapo board by
signing
,
dating
and
returning
the enclosed
GREEN
proxy
card as soon as possible. The following is a summary of why Mr.
Campbell believes the proposed merger between Pamrapo and BCB is not in the best
interests of the Pamrapo shareholders and why he believes Pamrapo’s shareholders
should vote
AGAINST
the
adoption of the Merger Agreement.
IF
OBTAINING MAXIMUM SHAREHOLDER VALUE IS THE GOAL, MR. CAMPBELL BELIEVES THIS IS
PRECISELY THE WRONG TIME TO MERGE AND BCB IS THE WRONG MERGER
PARTNER.
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Since
Pamrapo went public 20 years ago, it has maintained a clearly defined
strategy of controlled asset growth by investing in conservative loans and
securities. As stated in Pamrapo’s joint proxy statement with
BCB, Pamrapo is a community oriented institution principally engaged in
attracting deposits from the general public and investing those funds in
fixed-rate one to four-family residential mortgage loans. Its
revenues are derived principally from interest on loans and mortgage
backed securities, and interest and dividends on investment securities and
short term investments. Adherence to that philosophy by
Pamrapo’s management resulted in a consistently high return on assets
resulting in a return to shareholders, in dividends, of
$19.78 per share
, or
a total of over $98
million
, during that 20-year
period.
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In
contrast, BCB employs what Mr. Campbell believes is a risky leverage
strategy of investing in callable, long-term federal agency
securities. During the first half of 2009,
$98 million
of these
federal agency securities were called away from
BCB.
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BCB
states in its joint proxy statement with Pamrapo that its loan portfolio
consists of a high percentage of loans secured by commercial real estate
and multi-family real estate and admits these loans are riskier than loans
secured by one-to four-family properties. At June 30, 2009,
$252.6 million, or 62.3% of BCB Bancorp's loan portfolio consisted of
commercial and multi-family real estate loans. BCB intends to
continue to emphasize the origination of these types of
loans. These loans generally expose a lender to greater risk of
nonpayment and loss than one- to four-family residential mortgage loans
because repayment of the loans often depends on the successful operation
and income stream of the borrower's business. Such loans
typically involve larger loan balances to single borrowers or groups of
related borrowers compared to one- to four-family residential mortgage
loans. Consequently, an adverse development with respect to one
loan or one credit relationship can expose BCB to a significantly greater
risk of loss compared to an adverse development with respect to a one- to
four-family residential mortgage loan. In her October 14, 2009
statement before the U.S. Senate, Sheila Bair, the Chairman of the Federal
Deposit Insurance Corporation, indicated that “the most prominent area of
risk for rising credit losses at FDIC-insured institutions during the next
several quarters is in CRE (commercial real estate)
loans.” While as a general matter a bank with a high
concentration commercial real estate loans may have greater risk, Mr.
Campbell acknowledges that each bank’s loan portfolio is unique and the
fact that BCB’s loan portfolio is highly concentrated in the riskier
category of commercial real estate does not necessarily mean that the
specific loans within BCB’s loan portfolio are high risk
loans. Pamrapo does not have a heavy concentration of these
high-risk CRE loans.
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Pamrapo
has a 122-year history of service to the community, has 10 branches, and a
20-year record as a public company. BCB has been in business
for less than 10 years, has only 4 branches, and its stock price is about
the same as it was when it was initially offered to the
public.
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Mr.
Campbell believes that at the time Pamrapo’s management agreed to the
merger they did so from a position of weakness, not
strength. At the time the U.S. economy was experiencing a
pervasive downward trend and the financial industry in general was in an
unstable position and coming under increased governmental scrutiny,
Pamrapo had additional difficulties stemming from an ongoing government
investigation of its subsidiary, Pamrapo Savings Bank, regarding the
non-compliance of Pamrapo Savings Bank’s Anti-Money Laundering and Bank
Secrecy Act programs. Pamrapo management indicates that while
no penalties, either criminal or civil, have been imposed on Pamrapo
Savings Bank to date, it is probable that Pamrapo will incur monetary
penalties in the form of fines and forfeitures and Pamrapo has set aside a
$5 million litigation loss reserve. In Mr. Campbell’s view,
Pamrapo’s management agreed to the merger with BCB at a keenly inopportune
time. He believes that BCB stepped in and took advantage of
Pamrapo’s difficulties with government regulators and the merger price is
the result of Pamrapo’s weakened bargaining
position.
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In the preceding paragraphs, Mr.
Campbell has highlighted what he believes are important contrasts in the
business strategies of Pamrapo and BCB. Mr. Campbell has also
indicated why, if maximizing shareholder value is the goal, he believes Pamrapo
should not merge with BCB at this time and under the present
terms. In Mr. Campbell’s view, as between a choice of merging with
BCB or continuing as a stand-alone bank, Pamrapo’s shareholders will achieve a
greater return on their investment if the merger is defeated. Mr.
Campbell’s belief is based upon his 40 years of experience as a banker and a
leader of Pamrapo, but there is no guaranty that he is correct. If
the merger is not approved at the Special Meeting, the value of your Pamrapo
shares could decrease. Therefore, you should carefully consider all
the information that has been presented to you, both by Mr. Campbell and
Pamrapo’s management, and only then make your decision and vote your shares
accordingly.
WHY
DID PAMRAPO CHOOSE BCB AS A MERGER PARTNER?
Kenneth R. Poesl, one of Pamrapo’s six
directors, owned 168,479 shares of common stock of BCB when he voted in favor of
the merger. In a January 11, 2010 supplement to its definitive proxy
statement, Pamrapo’s management tells you that it believes Mr. Poesl’s ownership
in BCB is “immaterial” and to drive home its point tells you that Mr. Poesl
owned only 3.62% of the issued and outstanding shares of BCB common
stock. But what Pamrapo’s management does not tell you is that Mr.
Poesl’s BCB stock was worth $1,483,685 - $800,000 more than the value of Mr.
Poesl’s Pamrapo stock - when he voted in favor of the
merger. Pamrapo’s management did not disclose Mr. Poesl’s significant
conflict of interest to Pamrapo’s shareholders until after Mr. Campbell himself
revealed that Mr. Poesl was a shareholder of BCB in his lawsuit against Pamrapo
and the Pamrapo Board of Directors.
In addition, Pamrapo director Robert G.
Doria owned 21,040 shares of common stock of BCB, .45% of the issued and
outstanding shares of BCB common stock, worth $188,645 when he voted in favor of
the merger.
Mr. Campbell questions whether these
two directors, in particular Mr. Poesl, were more concerned about the value of
the BCB shares they owned than the interests of Pamrapo’s
shareholders. And why did these Pamrapo directors not disclose their
BCB stock ownership to you until forced to do so when Mr. Campbell made
Pamrapo’s shareholders aware of the directors’ conflict of
interest?
THE
PAMRAPO BOARD’S PROCESS FOR DELIBERATION AND APPROVAL OF THE MERGER WAS INFECTED
BY MR. POESL’S CONFLICT OF INTEREST.
We do not know whether Pamrapo’s Board
of Directors knew of Mr. Poesl’s significant stake in BCB or of the BCB
interests held by Pamrapo director Robert G. Doria at the time the Pamrapo Board
of Directors was negotiating the merger with BCB. We do know that no
special board processes commonly employed to address such conflicts, such as
excluding Mr. Poesl from the board deliberations and having Mr. Poesl abstain in
voting on the matter, were employed. We also know that Pamrapo did
not (i) conduct an auction for the Company, (ii) perform any “market check”
before entering into the Merger Agreement, other than evaluating two unsolicited
inquiries, or (iii) negotiate for the right to conduct a limited “market check”
after entering into the Merger Agreement. Mr. Campbell believes the
entire board process was infected by Mr. Poesl’s conflict resulting from his
ownership of BCB stock. Mr. Poesl fully participated in the Pamrapo
Board of Directors’ deliberations of the merits of the merger with BCB and Mr.
Poesl, as did all other directors, voted in favor of the merger. If
Mr. Campbell had not brought this conflict of interest to light in his lawsuit
against Pamrapo and its Board of Directors, Mr. Campbell believes that no one
would have known about it. Indeed, after this conflict was brought to
Pamrapo’s attention, Pamrapo publicly disclosed Mr. Poesl’s conflict of
interest, while at the same time downplaying its significance. In Mr.
Campbell’s view, Pamrapo has not addressed to what extent the Poesl conflict of
interest may have tainted the actions of its Board of Directors.
DID
THE PAMRAPO DIRECTORS WHO OWNED SHARES OF BCB COMMON STOCK CONSIDER ANY
ALTERNATIVES TO MERGING WITH BCB?
In the spring of 2009, Pamrapo received
unsolicited inquiries from
two
regional bank
holding companies. Pamrapo’s management and Pamrapo’s financial
advisor, Endicott Financial Advisors, LLC (“Endicott”), met with the companies
to provide them with information regarding Pamrapo’s business operations and
pending regulatory and litigation matters. After those
meetings, the two regional bank holding companies provided preliminary
indications of interest including the sale of Pamrapo for a combination of cash
and stock, but Pamrapo found these offers to be less favorable than BCB’s
offer. These two indications of interest came to Pamrapo
unsolicited. Did Pamrapo’s management make any effort to market
itself to potential suitors?
No, Pamrapo’s board never solicited
indications of interest from any bank other than BCB.
Another alternative available to
Pamrapo was to remain a stand alone, independent bank. Again,
Endicott did not evaluate Pamrapo’s decision to merge with BCB or the
alternative of remaining a stand alone bank. Why didn’t Mr. Poesl and
Mr. Doria consider alternatives for Pamrapo that might result in a decrease in
the value of their BCB stock?
MR.
CAMPBELL BELIEVES PAMRAPO’S BOARD OF DIRECTORS SHOULD SOLICIT OTHER BANKS
OR OTHER POTENTIAL BUYERS AS MERGER, SALE OR PURCHASE PARTNERS TO OBTAIN
THE BEST VALUE FOR OUR COMPANY.
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DID
THE PAMRAPO DIRECTORS WHO OWNED BCB SHARES PERFORM THE DUE DILIGENCE NEEDED TO
MAKE AN INFORMED DECISION OR DID THEY JUST DO WHAT WAS BEST FOR THEMSELVES AND
BCB?
Nowhere in Pamrapo’s definitive proxy
statement, which was filed with the Securities and Exchange
Commission (the “SEC”) on November 12, 2009, is the quality of BCB’s loan
portfolio discussed. The quality of BCB’s loan portfolio is critical
to the ongoing health of its business. Pamrapo’s financial advisor,
Endicott, was not asked to look at the loan portfolio, but simply relied on the
assumptions provided by BCB’s management. Why wasn’t Endicott asked
to look at the BCB loan portfolio? Endicott was also not asked to
perform any due diligence on BCB’s investment portfolio.
Significantly, the
Endicott fairness opinion was dated and delivered to Pamrapo on June 15, 2009 --
14 days before the Merger Agreement was executed by Pamrapo. There is
no indication that Pamrapo’s Board of Directors ever sought or received from
Endicott an update of the fairness opinion as of the date of the Merger
Agreement.
It would also appear that the Pamrapo
Board of Directors unanimously approved the merger transaction with BCB on June
17, 2009, subject to the negotiation of a definitive merger agreement, 12 days
before the definitive merger agreement was completed and
signed. There is no indication in Pamrapo’s definitive proxy
statement as to whether the Pamrapo Board of Directors ever met to review and
approve the definitive merger agreement.
From all of the above, it would appear
that the Pamrapo Board of Directors and, consequently, the Pamrapo
shareholders do not really know whether BCB is a good merger candidate or
whether there are any better merger, sale or purchase candidates out
there.
PAMRAPO CHANGED THE LEVEL OF
SHAREHOLDER APPROVAL NEEDED TO APPROVE THE MERGER.
The Merger Agreement, as entered into
on June 29, 2009, required shareholders holding a majority of the outstanding
shares of Pamrapo to approve the Merger Agreement. Without any
explanation, the Merger Agreement was amended, on November 5, 2009, to require
the approval of shareholders holding only a majority of the votes cast at the
Special Meeting. Since abstentions and broker non-votes are not
considered to be “votes cast,” the number of shares needed to vote in favor of
the Merger has been significantly reduced. It is now possible for
fewer than 25% of the outstanding Pamrapo shares to constitute shareholder
approval of the Merger Agreement. If the Pamrapo Board of Directors
had confidence that the Merger was truly in the best interests of the Pamrapo
shareholders, why would they lower the shareholder approval requirements the way
they did?
PAMRAPO
HAS TOUTED THE PROPOSED MERGER WITH BCB AS A “MERGER OF EQUALS,” BUT IS IT
REALLY?
Pamrapo tells you that the proposed
merger with BCB is a “merger of equals.” While it is true that if the
merger is completed, each share of Pamrapo common stock that you own will be
exchanged for one share of BCB common stock, in Mr. Campbell’s view, BCB will be
controlling the management of the merged company after the completion of the
Merger. Mr. Campbell believes that the Pamrapo Board of Directors
allowed BCB to take advantage of Pamrapo’s regulatory difficulties to extract a
more favorable deal for itself and take over Pamrapo. And, as
discussed above, Mr. Campbell believes that BCB was on both sides of the
negotiating table due to Mr. Poesl’s involvement throughout the merger approval
process, despite the conflict of interest presented by his ownership of 168,479
shares of common stock of BCB, representing 3.62% of the issued and outstanding
shares, valued at $1,483,685 -- $800,000 more than the value of his Pamrapo
shares -- at the time he voted in favor of the Merger
Agreement. Following the Merger, a majority of the 14-member board of
directors and the senior officers of the merged company will come from BCB or
own stock in BCB. BCB will be in control.
MR. CAMPBELL’S AND MR.
DUGAN’S MEETINGS
WITH REPRESENTATIVES OF
PAMRAPO AND BCB
In April
2008, BCB approached Pamrapo about a merger transaction between Pamrapo and
BCB. At the beginning of June 2008, the Pamrapo Board of Directors
voted to move forward with comprehensive due diligence with BCB and the
negotiation of the material terms of a merger agreement. Due
diligence and negotiations took place over the next several
months. Mr. Campbell was an active participant in the due diligence
and negotiations. During this period, he personally reviewed BCB’s
loan and investment portfolio. The due diligence process continued
until September 2008. Pamrapo decided to end the negotiations in
early October 2008. In a supplement to its definitive proxy
statement, Pamrapo’s management states that the Pamrapo Board of
Directors determined to end merger negotiations “due to the unstable economic
environment and the deteriorating regional credit market.” Mr.
Campbell agrees that the economic conditions in October 2008 were certainly
challenging and clearly a factor in the board’s decision to end the merger
discussions. In fact, the Pamrapo board was concerned
about the exposure to the risk of rising credit losses presented by BCB’s loan
portfolio and the risk of interest rate losses presented by BCB’s investment
portfolio during the unstable economic environment and the deteriorating
regional credit market.
Soon
after Mr. Campbell’s retirement from Pamrapo on February 13, 2009, BCB and
Pamrapo resumed merger discussions.
On June
25, 2009, representatives of Pamrapo, including Wayne Goldstein from Endicott
Financial Advisors, L.L.C., approached Mr. Campbell about entering into a voting
agreement in favor of a merger of Pamrapo into BCB. The parameters of
the contemplated merger were described to Mr. Campbell as well as two
unsolicited indications of interest received by Pamrapo from two independent
bank holding companies. During the discussion, Mr. Campbell learned
that the due diligence performed by Endicott with respect to BCB’s loan
portfolio was less than what Mr. Campbell considered adequate. Mr.
Campbell also learned that Endicott was not asked to and did not compare the
transactions described in the indications of interest received from the two bank
holding companies with the proposed merger into BCB. At the
conclusion of the discussion, Mr. Campbell indicated that he would not enter
into a voting agreement in support of the merger into BCB.
Pamrapo
and BCB signed the Merger Agreement on June 29, 2009.
Mr.
Campbell believed that the BCB merger would not be in the best interests of the
Pamrapo shareholders, including himself, but he was willing to discuss his
concerns with BCB. In September 2009, a dinner meeting among Mark
Hogan, Chairman of BCB, Joseph Brogan, one of BCB’s largest shareholders, Mr.
Campbell and his advisor James Dugan was held to discuss Mr. Campbell’s concerns
regarding the risks he believed BCB’s management strategy presented to the
shareholders of Pamrapo in the event of a merger and ways to reduce that
risk. One method suggested by Mr. Dugan for reducing the perceived
risk was to appoint quality directors who were not currently serving on the
board of either bank. Another idea suggested by Mr. Dugan was
weighted voting for the directors. In a follow-up meeting in early
October 2009 between Mr. Dugan and Mr. Hogan, Mr. Dugan learned that all of his
suggestions had been rejected and Mr. Campbell’s concerns would not be
addressed. Mr. Campbell has had no significant contacts with BCB
management or its Board since Mr. Dugan’s October 2009 meeting with Mr.
Hogan.
THE SPECIAL
MEETING
Mr. Campbell used his own funds
to bring a lawsuit to stop the special meeting of shareholders of Pamrapo, which
had been scheduled to take place on December 22,
2009.
Mr. Campbell argued that Pamrapo had not
provided its shareholders with all the information the shareholders needed to
vote with their eyes open. Mr. Campbell is the recently retired
President and Chief Executive Officer of Pamrapo. He is also the
largest shareholder of Pamrapo, owning over 12% of the outstanding shares of
common stock of the Company. His interests as an investor in Pamrapo
are aligned with the interests of the other shareholders who are not insiders of
Pamrapo.
As a result
of the lawsuit filed by Mr. Campbell, on December 16, 2009, the Superior Court
of New Jersey, Hudson County, Chancery Division (the “Court”), entered an order
(the “Order”) enjoining Pamrapo from conducting its special meeting of
shareholders on December 22, 2009 and ordering that a special meeting be
conducted on February 11, 2010 so that Mr. Campbell could campaign against
the proposed merger between Pamrapo and BCB.
On
December 21, 2009, the Superior Court of New Jersey, Appellate Division
denied Pamrapo’s appeal of the Order.
Mr. Campbell continues to believe
that the merger of Pamrapo and BCB is NOT in the best interests of Pamrapo’s
shareholders.
In the “Reasons to Vote Against the Proposed
Merger Agreement” section above, Mr. Campbell explains why he so
believes.
The Court
ordered a special meeting (the “Special Meeting”) of the shareholders of Pamrapo
that will be held at The Chandelier Restaurant, 1081 Broadway, Bayonne, New
Jersey, at 11:00 a.m. (local time), on Thursday, February 11, 2010,
at which time the shareholders of Pamrapo will vote on whether to adopt the
Agreement and Plan of Merger,
dated as of June 29, 2009
,
by and between Pamrapo and
BCB Bancorp, Inc.
, as
subsequently amended
(the
“Merger Agreement”)
and the
transactions contemplated therein. The close of business on
Monday, December 28, 2009 (the “Record Date”) has been fixed as the record date
for determining the Pamrapo shareholders entitled to receive notice of and to
vote at the Special Meeting and any adjournment or postponement
thereof. According to a supplement to Pamrapo’s definitive proxy
statement for the Special Meeting, which supplement was filed with the SEC on
January 11, 2009, at the close of business on the Record Date, 4,935,542 shares
of Pamrapo common stock were outstanding and entitled to vote and were held by
approximately 1,600 holders of record. Each outstanding share of Pamrapo common
stock entitles the holder to one vote at the Special Meeting on all matters
properly presented at the Special Meeting.
The presence, in person or by properly
executed proxy, of the holders of a majority of the outstanding shares of
Pamrapo common stock entitled to vote is necessary to constitute a quorum for
the conduct of business at the Special Meeting. Abstentions and broker non-votes
will be counted for the purpose of determining whether a quorum is present.
Adoption of the Merger Agreement requires the affirmative vote of the holders of
a majority of the shares of Pamrapo common stock cast. Under New
Jersey law and the provisions of Pamrapo’s certificate of incorporation and
bylaws, shares represented at the Special Meeting that are marked “ABSTAIN” and
broker non-votes, if any, do not count as votes cast.
THE
MERGER
On
June 29, 2009, Pamrapo and BCB Bancorp, Inc., a New Jersey corporation
(“BCB”), entered into an Agreement and Plan of Merger (the “Merger Agreement”),
pursuant to which Pamrapo would merge with and into BCB, with BCB as the
surviving corporation (the “Merger”). Pamrapo Savings Bank, S.L.A., a
New Jersey-chartered savings and loan association and a wholly-owned subsidiary
of Pamrapo (“Pamrapo Savings Bank”), and BCB Community Bank, a New
Jersey-chartered bank and a wholly-owned subsidiary of BCB (“BCB Bank”), would
also merge pursuant to a subsidiary agreement and plan of merger that provides
for the merger of Pamrapo Savings Bank with and into BCB Bank, with BCB Bank as
the surviving institution.
Pursuant
to the terms of the Merger Agreement, shareholders of Pamrapo will receive 1.0
share of BCB common stock for each share of Pamrapo common stock upon the
consummation of the Merger. In addition, all outstanding unexercised options to
purchase Pamrapo common stock will be converted into options to purchase BCB
common stock.
The
Merger Agreement, at the time it was signed, required that the Merger Agreement
must be approved by shareholders of Pamrapo holding a majority of all
outstanding shares (approximately 2.5 million shares). The Merger
Agreement was subsequently amended, on November 5, 2009, to require
approval by shareholders holding a majority of the votes cast (which could be as
few as 1.3 million shares, assuming only one-half of the shares outstanding cast
votes). Under New Jersey law and the provisions of Pamrapo’s
certificate of incorporation and bylaws, shares represented at the Special
Meeting that are marked “ABSTAIN” and broker non-votes, if any, will not count
as votes cast. Since abstentions and broker non-votes reduce the
total number of votes from which the majority of votes cast is calculated, a
majority of the votes cast could be far less than 1.3 million
shares. More information about the votes required to approve the
Merger and voting procedures is available under the heading “Questions &
Answers About Voting Procedures” in this Proxy Statement.
Pamrapo.
Pamrapo
is a savings and loan holding company and is subject to regulation by the Office
of Thrift Supervision (“OTS”), the Federal Deposit Insurance Corporation
(“FDIC”) and the SEC. Based on Pamrapo’s SEC filings, Pamrapo does
not transact any material business other than through its sole subsidiary,
Pamrapo Savings Bank.
Pamrapo
Savings Bank is a New Jersey-chartered savings and loan association in stock
form and a wholly-owned subsidiary of Pamrapo that operates 10 branch offices,
seven of which are located in Bayonne, one in Hoboken, one in Jersey City and
one in Monroe, New Jersey.
As a
community-oriented institution, Pamrapo Savings Bank is principally engaged in
attracting retail deposits from the general public and investing those funds in
fixed-rate one- to four-family residential mortgage loans and, to a lesser
extent, in multi-family residential mortgage loans, commercial real estate
loans, home equity and second mortgage loans, consumer loans and mortgage-backed
securities. Pamrapo Savings Bank’s revenues are derived principally from
interest on loans and mortgage-backed securities, interest and dividends on
investment securities and short-term investments, and other fees and service
charges. Pamrapo Savings Bank’s primary sources of funds are deposits and, to a
lesser extent, Federal Home Loan Bank advances and other borrowings. Pamrapo
Savings Bank deposits are insured up to applicable limits by the Deposit
Insurance Fund administered by the FDIC. The OTS is the primary regulator for
Pamrapo Savings Bank.
Pamrapo
Savings Bank was organized in 1887 as Pamrapo Building and Loan Association. In
1952, it changed its name to Pamrapo Savings and Loan Association, a New Jersey
chartered savings and loan association in mutual form, and in 1988 Pamrapo
Savings and Loan Association changed its name to Pamrapo Savings Bank, S.L.A.
Pamrapo Savings Bank’s principal office is located in Bayonne, New
Jersey.
Pamrapo
Savings Bank has two wholly-owned subsidiaries: Pamrapo Investment Company and
Pamrapo Service Corporation. Pamrapo Investment Company manages and maintains
certain tangible assets of Pamrapo Savings Bank for investment purposes. As of
April 30, 2009, Pamrapo Service Corporation is no longer doing
business.
According
to public filings by Pamrapo, as of September 30, 2009, Pamrapo had total assets
of $571.5 million, deposits of $447.6 million and shareholders’ equity of $50.5
million. Pamrapo’s principal executive office is located at 611 Avenue C,
Bayonne, New Jersey 07002, and its telephone number is
(201) 339-4600.
Pamrapo
was incorporated under Delaware law on June 26, 1989 and changed its state
of incorporation from Delaware to New Jersey on March 29, 2001. On
November 10, 1989, Pamrapo acquired Pamrapo Savings Bank, S.L.A. as a part
of its conversion from a New Jersey chartered savings association in mutual form
to a New Jersey chartered stock savings association. For more information on
Pamrapo Bancorp, see “Where You Can Find More Information about Pamrapo and BCB”
on page 12.
BCB.
BCB,
headquartered in Bayonne, New Jersey, is the holding company for Bayonne
Community Bank and operates three retail branches in Bayonne and Hoboken, New
Jersey and through its executive office. According to public filings
by BCB, as of September 30, 2009, BCB had total assets of $622.2 million,
deposits of $454.4 million and stockholders’ equity of $51.5
million. BCB’s principal executive office is located at 104-110
Avenue C, Bayonne, New Jersey 07002 and its telephone number is
(201) 823-0700. For more information on BCB, see “Where
You Can Find More Information about Pamrapo and BCB” on page 12.
William J.
Campbell.
Mr. Campbell had been an executive of Pamrapo and
Pamrapo Savings Bank for over 40 years, having served as the President and Chief
Executive Officer from 1970 until his recent retirement. On
February 13, 2009, Mr. Campbell retired as President and Chief Executive
Officer and as a director of Pamrapo and Pamrapo Savings Bank. He is
the largest shareholder of Pamrapo, owning over 12% of the outstanding shares of
common stock of Pamrapo. Under New Jersey law, a shareholder who owns
10% or more of the voting shares of a New Jersey corporation has the right to
apply to the New Jersey Superior Court for an order directing a special meeting
of shareholders. If the merger between Pamrapo and BCB is completed,
Mr. Campbell will own approximately 6% of BCB’s common stock after the merger;
therefore, he will have lost his right to petition the New Jersey Superior Court
to order special meetings of shareholders. Mr. Campbell believes that
his interests as an investor are aligned with the interests of other
shareholders of Pamrapo who are not insiders of Pamrapo.
James P.
Dugan.
Mr. Dugan is an attorney and a senior partner of
Waters, McPherson, McNeill, P.C., a law firm with offices in Secaucus, New
Jersey. Mr. Dugan does not have any significant interest in the
outcome of the shareholders’ vote on the merger. He does not own any
shares of Pamrapo common stock, nor does he have any options or contractual
rights to purchase shares of Pamrapo common stock. Mr. Dugan and the
other lawyers at his law firm do not provide legal services to
Pamrapo. No member of Mr. Dugan’s family is an employee of Pamrapo or
otherwise receiving any compensation from Pamrapo. Mr. Dugan has
known Mr. Campbell for many years and, at Mr. Campbell’s request, agreed to
serve as co-proxy with Mr. Campbell with respect to this proxy
solicitation.
GENERAL
VOTING PROCEDURES
To vote
AGAINST
the adoption of the
Merger Agreement, please complete, sign and date the enclosed
GREEN
proxy card and return it
to The Altman Group, Inc. (“The Altman Group”) in the enclosed postage-prepaid
envelope. Mr. Campbell retained The Altman Group to solicit proxies
in connection with the Special Meeting. Submitting your proxy to The
Altman Group will not affect your right to attend the Special Meeting and vote
in person.
James P.
Dugan, Esquire, a senior partner of the New Jersey law firm Waters, McPherson,
McNeill, P.C., is serving as co-proxy with Mr. Campbell with respect to this
proxy solicitation. As such, Mr. Dugan and Mr. Campbell are both
indicated as proxies on the enclosed
GREEN
proxy
card. If you complete, sign, and date the
GREEN
proxy card and return it
to The Altman Group in the envelope provided, you are appointing Mr. Campbell
and Mr. Dugan, and each of them, as your proxies to vote your Pamrapo shares at
the Special Meeting.
QUESTIONS
& ANSWERS ABOUT VOTING PROCEDURES
How do I vote in person if I am a
record holder?
If
you held shares of Pamrapo common stock on the Record Date you may attend the
Special Meeting and vote in person.
How do I vote by proxy if I am a
record holder?
To
vote by proxy, you should complete, sign and date the enclosed
GREEN
proxy card and return it
promptly in the enclosed postage-prepaid envelope. To be able to vote your
shares in accordance with your instructions at the Special Meeting, The Altman
Group, the proxy solicitor hired by Mr. Campbell, must receive your proxy as
soon as possible but, in any event, prior to the Special Meeting. You may vote
your shares without submitting a proxy, if you vote in person.
What if I am not the record holder
of my shares?
If
your shares are held in the name of a brokerage firm, bank nominee or other
institution, the brokerage firm, bank nominee or other institution is the record
holder with respect to your shares and, as such, only it can give a proxy with
respect to your shares. You may have received either a
GREEN
proxy card from the
record holder (which you can complete and send directly to The Altman Group) or
a
GREEN
voting
instruction card (which you can complete and return to the record holder to
direct its voting of your shares). If the record holder has not sent you either
a
GREEN
proxy card or a
GREEN
voting instruction
card, you may contact the record holder directly to provide it your voting
instructions.
You
may receive more than one set of voting materials, including multiple copies of
this Proxy Statement and multiple
GREEN
proxy cards or voting
instruction cards. For example, if you hold shares in more than one brokerage
account, you may receive a separate voting instruction card for each brokerage
account in which your shares are held. You should complete, sign and date and
return each
GREEN
proxy
card and voting instruction card you receive.
You
may also receive a white proxy or voting instruction card that is being
solicited by the Company’s board of directors. Mr. Campbell urges you to
discard any white proxy card or voting instruction card sent to you by the
Company. If you have previously signed a white proxy card or voting instruction
card sent by the Company, we urge you to complete, sign, date and promptly mail
the enclosed
GREEN
proxy
card or voting instruction card before the Special Meeting. By doing so, you
will revoke any earlier dated proxy card or voting instruction card solicited by
the Company’s board of directors. It is very important that you
DATE YOUR GREEN PROXY
CARD
. It is not necessary to contact the Company for your
revocation to be effective.
If
you have questions or need assistance, please contact The Altman Group at
(800) 581-4729.
What is a “legal proxy,” and when
would I need one?
If
you do not have record ownership of your shares and want to vote in person at
the Special Meeting or if you are voting for someone else at the Special
Meeting, you may obtain a document called a “legal proxy” from the record holder
of the shares or such other person and bring it to the Special Meeting. If you
need assistance, please contact The Altman Group at
(800) 581-4729.
What should I do if I receive a
white proxy card from Pamrapo’s management?
Proxies
on the white
proxy
card are being solicited by the Company’s management. If you submit a proxy to
us by signing and returning the enclosed
GREEN
proxy card, do not
subsequently sign or return the white proxy card or follow any voting
instructions provided by the Company, unless you intend to change your vote,
because only your latest dated proxy will be counted in the tabulation of
votes.
If
you have already sent a white proxy card to the Company, you may revoke it and
vote against the adoption of the Merger Agreement by completing, signing, dating
and returning the enclosed
GREEN
proxy card.
What
if I want to revoke my proxy or change my voting instructions?
If
you give a proxy, you may revoke it at any time before it is voted on your
behalf. If you hold shares in your own name (i.e., not through a bank, brokerage
firm or other institution), you may revoke the prior proxy by:
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delivering a later dated proxy to
our
proxy solicitor,
The Altman Group,
using the enclosed postage paid
envelope; or
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delivering a later dated proxy to
the
S
ecretary of
Pamrapo
; or
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delivering a written revocation to
either
our
proxy solicitor or
the Secretary of
Pamrapo
; or
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voting in person at the Special
Meeting.
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If you
hold your shares in street name, you may change your vote by:
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submitting a new proxy card or
voting instruction form to your broker or nominee;
or
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attending the Special Meeting and
voting in person, provided you have obtained a signed legal proxy from the
record holder giving you the right to vote your
shares.
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If
you choose to revoke a proxy by giving written notice or a later-dated proxy to
the Secretary of Pamrapo or by submitting new voting instructions to your broker
or nominee, Mr. Campbell and Mr. Dugan would appreciate if you would assist
them in representing the interests of Pamrapo’s shareholders on an informed
basis by either sending The Altman Group a copy of your revocation, proxy or new
voting instructions or by calling The Altman Group at (800) 581-4729.
Remember, your latest-dated proxy is the only one that counts in calculating
votes cast.
If I plan to attend the Special
Meeting, should I still submit a proxy?
Whether
you plan to attend the Special Meeting or not, we urge you to submit a
GREEN
proxy card. Returning
the enclosed
GREEN
proxy
card will not affect your right to attend the Special Meeting and
vote.
Who can vote?
You
are eligible to vote or to execute a proxy only if you owned shares of common
stock of the Company on the Record Date. Even if you sell your shares after the
Record Date, you will retain the right to execute a proxy in connection with the
Special Meeting. It is important that you grant a proxy regarding shares you
held on the Record Date, or vote those shares in person, even if you no longer
own those shares. According to a supplement to Pamrapo’s definitive proxy
statement for the Special Meeting, which supplement was filed with the SEC on
January 11, 2010, approximately 4,935,542 shares of the Company’s common stock
were issued and outstanding as of the Record Date. Based on documents
publicly filed by the Company, the Company has no outstanding voting securities
other than its common stock.
How many votes do I
have?
With
respect to each matter to be considered at the Special Meeting, you are entitled
to one vote for each share of common stock owned on the Record
Date.
How will my shares be
voted?
If
you give a proxy on the accompanying
GREEN
proxy card, your shares
will be voted as you direct. If you submit a signed
GREEN
proxy card to our proxy
solicitor, The Altman Group, without voting instructions, your shares will be
voted
AGAINST
the
adoption of the Merger Agreement. Submitting a signed
GREEN
proxy card without
voting instructions will entitle Mr. Campbell or Mr. Dugan to vote your
shares in their discretion on matters that are not described in this Proxy
Statement that Mr. Campbell and Mr. Dugan do not know, a reasonable time
before this solicitation, are to be presented at the Special Meeting and that
properly come before the Special Meeting, or any adjournment or postponement
thereof.
If
Pamrapo shareholders holding shares of Pamrapo stock in street name do not
provide voting instructions to the brokerage firm, bank nominee or other record
owner of their shares, their shares will not be voted.
Unless
a signed proxy card specifies otherwise, it is presumed to relate to all shares
held of record on the Record Date by the person who submitted it.
If
you give a proxy on the accompanying
GREEN
proxy card, your shares
will be voted
AGAINST
any proposal to postpone or adjourn the Special Meeting, if such proposal
is made to facilitate the adoption of the Merger Agreement.
What is a quorum and why is it
necessary?
A
quorum of shareholders is necessary to have a valid shareholders’ meeting. The
presence, in person or by proxy, of the holders of a majority of the outstanding
shares of Pamrapo common stock entitled to vote at the Special Meeting is
necessary to constitute a quorum. Abstentions and broker “non-votes”
are counted as present for purposes of determining the presence or absence of a
quorum for the transaction of business by the shareholders. A
“non-vote” occurs when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because, with regard to such proposal, the nominee
does not have discretionary voting power and has not received voting
instructions from the beneficial owner of the shares. Shares held by
the Company in its treasury do not count toward the quorum.
What vote is required to approve
each proposal and how will votes be counted?
The
Company’s bylaws provide that all matters, other than the election of directors,
being submitted to the shareholders, shall be determined by the affirmative vote
of a majority of the shares present in person or represented by
proxy. Therefore, at the Special Meeting, the affirmative vote of a
majority of the shares present in person or represented by proxy and entitled to
vote will be necessary to approve the Merger Agreement.
The
vote on each matter submitted to the shareholders is tabulated
separately. Abstentions and broker non-votes are not considered
for the particular matter and have the practical effect of reducing the number
of affirmative votes required to achieve a majority of the votes cast for such
matter by reducing the total number of votes from which the majority of votes
cast is calculated.
Can the meeting be adjourned or
postponed?
The
Company’s bylaws provide that a shareholders’ meeting may be adjourned by those
shareholders present in person or by proxy, even if a quorum of shareholders is
no longer present.
How can I receive more
information?
If
you require assistance or have questions about giving your proxy or about this
proxy solicitation by Mr. Campbell and Mr. Dugan, please call The Altman
Group at (800) 581-4729.
NO
APPRAISAL RIGHTS
According
to the Company’s proxy statement, under applicable New Jersey law, in the event
that the Merger Agreement is adopted by Pamrapo’s shareholders, Pamrapo’s
shareholders do not have the right to dissent from receiving shares of BCB
common stock as consideration for their shares of Pamrapo common stock upon the
consummation of the Merger or any right to obtain payment for the appraised
value of their shares of Pamrapo common stock.
PROXY
REVOCATION RIGHTS
Any
shareholder who has executed and returned a proxy, whether solicited by the
Company or by us, may revoke it at any time before the proxy is voted. A proxy
may be revoked by sending a written revocation of such proxy to our proxy
solicitor, The Altman Group, Inc., or to the Secretary of the Company, by
submitting another proxy with a later date marked on it, or by appearing in
person at the Special Meeting and voting. If, however, you hold your shares of
Pamrapo common stock through a brokerage firm, bank nominee or other institution
and wish to vote at the Special Meeting, you will need to obtain a legal proxy
from that firm in order to be able to vote in person. Attendance at the Special
Meeting will not, by itself, revoke a proxy unless you actually vote at the
Special Meeting.
Remember, only the latest dated proxy
card will be counted in the calculation of votes cast. Therefore, we urge you to
sign and return the GREEN proxy card accompanying this Proxy
Statement.
There
is no limit on the number of times that a shareholder may revoke a proxy prior
to the Special Meeting. If you send written revocation of your proxy to the
Secretary of the Company, Mr. Campbell and Mr. Dugan request that you send
either the original or a copy of that revocation to The Altman Group at the
address on the last page of this Proxy Statement. This will allow us to more
accurately determine if and when the requisite number of proxies have been
received.
PLEASE NOTE,
that in order to
vote
AGAINST
the
adoption of the Merger Agreement, you will need to complete and return the
GREEN
proxy card, regardless
of whether or not you send a revocation to the Secretary of the
Company.
PROXY
SOLICITATION AND EXPENSES
Proxies
may be solicited by mail, telephone, telefax, telegraph, e-mail, newspapers and
other publications of general distribution and in person. In connection with
this solicitation of proxies, banks, brokers, custodians, nominees, other
institutional holders and other fiduciaries will be asked to forward all
soliciting materials to the beneficial owners of the shares of Pamrapo common
stock that those institutions hold of record. Mr. Campbell will reimburse
those institutions for reasonable expenses that they incur in connection with
forwarding these soliciting materials.
Mr. Campbell
has retained The Altman Group to solicit proxies in connection with the Special
Meeting. The Altman Group may solicit proxies from individuals, banks, brokers,
custodians, nominees, other institutional holders and other fiduciaries and will
employ approximately 15 people in its efforts. Mr. Campbell has agreed to
reimburse The Altman Group for its reasonable expenses and to pay it a fee in an
amount up to $50,000 in connection with the proxy solicitation. To date, The
Altman Group has received $15,000 for its services.
In
addition to the costs related to the engagement of The Altman Group, costs
related to this solicitation of proxies include expenditures for printing,
postage, legal services and other related items. Mr. Campbell is bearing
the entire expense of this proxy solicitation. Total expenditures are expected
to be approximately $400,000. Total payments of costs to date are approximately
$200,000. Mr. Campbell will request reimbursement of all
solicitation expenses from the Company and does not currently intend to seek a
vote of the shareholders for approval of such reimbursement
.
INFORMATION ABOUT
PAMRAPO
Annex A
to this Proxy
Statement sets forth information obtained from Pamrapo’s public filings related
to the beneficial ownership of Pamrapo common stock and is incorporated in this
Proxy Statement by reference.
Except as otherwise noted herein, the
information in this Proxy Statement concerning Pamrapo has been taken from or is
based upon documents and records on file with the SEC and other publicly
available information. Although Mr. Campbell and Mr. Dugan do not have any
knowledge indicating that any statement contained herein is untrue, they do not
take any responsibility for the reliability or completeness of statements taken
from public documents and records that were not prepared by or on their behalf,
or for any failure by Pamrapo to disclose events that may affect the
significance or accuracy of such information.
WHERE
YOU CAN FIND MORE INFORMATION ABOUT PAMRAPO AND BCB
Both BCB
and Pamrapo file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may obtain copies of these
documents by mail from the public reference room of the SEC at 100 F Street,
N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the
SEC at (800) SEC-0330 for further information on the public reference room.
In addition, BCB and Pamrapo file reports and other information with the SEC
electronically, and the SEC maintains a web site located at http://www.sec.gov
containing these reports and other information.
BCB has
filed a registration statement on Form S-4 (the “BCB Registration Statement”) to
register with the SEC up to 4,969,542 shares of BCB common stock. You may read
and copy the BCB Registration Statement, including any amendments, schedules and
exhibits thereto, at the SEC addresses set forth above. Statements contained in
this Proxy Statement as to the contents of any Pamrapo or BCB reports, documents
or other information filed with the SEC are not necessarily complete. In each
case, you should refer to and read such reports, documents or other information
as filed with the SEC and available at the SEC addresses set forth
above.
BCB
common stock is traded on the Nasdaq Global Market under the symbol “BCBP,” and
Pamrapo common stock is traded on the Nasdaq Global Market under the symbol
“PBCI.”