SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
STEWARDSHIP FINANCIAL CORPORATION
------------------------------------------------
(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
[ ] 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:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] 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:
-------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------
3) Filing Party:
-------------------------------------------------------
4) Date Filed:
-------------------------------------------------------
<PAGE>
Stewardship Financial Corporation
630 Godwin Avenue
Midland Park, New Jersey 07432-1405
April 15, 1998
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of the Stockholders
(the "Annual Meeting") of Stewardship Financial Corporation (the "Company"), the
holding company for Atlantic Stewardship Bank ("the Bank"), to be held on May
11, 1998, at 7:00 P.M. at the main office of the Company, 630 Godwin Avenue,
Midland Park, New Jersey 07432-1405.
At the Annual Meeting stockholders will be asked to consider and vote upon
the election of 4 directors.
The Board of Directors of the company believes that the matter to be
considered at the Annual Meeting is in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board
unanimously recommends that you vote "FOR" the matter to be considered.
YOUR COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE STOCK MUST BE
REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE
CONDUCT OF BUSINESS. WHETHER OR NOT YOU EXPECT TO ATTEND, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED,
SO THAT YOUR SHARES WILL BE REPRESENTED.
Very truly yours,
Edward Fylstra
Secretary
<PAGE>
STEWARDSHIP FINANCIAL CORPORATION
630 GODWIN AVENUE
MIDLAND PARK, NEW JERSEY 07432-1405
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 11, 1998
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Stewardship Financial Corporation (the "Company") will be held at
the main office of the Company, 630 Godwin Avenue, Midland Park, New Jersey
07432-1405, on May 11, 1998, at 7:00 P.M. for the purpose of considering and
voting upon the following matters:
1. To elect four (4) persons named in the annexed Proxy Statement to
serve as directors of the Company.
2. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on March 31, 1998, are
entitled to notice of and to vote at the Annual Meeting. Whether or not you
contemplate attending the Annual Meeting, it is suggested that the enclosed
proxy be executed and returned to the Company. You may revoke your proxy at any
time prior to the exercise of the proxy by delivering the Company a later proxy
or by delivering a written notice of revocation to the Company.
By Order of the Board of Directors
Edward Fylstra
Secretary
April 15, 1998
IMPORTANT - PLEASE MAIL YOUR PROXY PROMPTLY
2
<PAGE>
STEWARDSHIP FINANCIAL CORPORATION
630 GODWIN AVENUE
MIDLAND PARK, NEW JERSEY 07432-1405
------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 11, 1998
-------------------------------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to stockholders of Stewardship
Financial Corporation (the "Company") in connection with the solicitation by the
Board of Directors of proxies to be used at the annual meeting of stockholders
(the "Annual Meeting"), to be held on May 11, 1998, at 7:00 P.M., at the main
office of the Company, 630 Godwin Avenue, Midland Park, New Jersey 07432-1405
and at any adjournments thereof. The 1997 Annual Report to stockholders,
including consolidated financial statements for the fiscal year ended December
31, 1997, and a proxy card accompany this Proxy Statement, which is first being
mailed to record holders on or about April 15, 1998.
Regardless of the number of shares of common stock owned, it is important
that you vote by completing the enclosed proxy card and returning it signed and
dated in the enclosed postage paid envelope. Stockholders are urged to indicate
their vote in the spaces provided on the proxy card. 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, SIGNED PROXY
CARDS WILL BE VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTORS
NAMED IN THE PROXY STATEMENT.
Other than the matters set forth in the attached Notice of Annual Meeting
of Stockholders, the Board of Directors knows of no additional matters that may
be presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the Annual Meeting and at any adjournments
thereof, including whether or not to adjourn the Annual Meeting.
A proxy may be revoked at any time prior to its exercise by sending a
written notice of revocation to the Company, 630 Godwin Avenue, Midland Park,
New Jersey 07432-1045, Attn: Ms. Ellie King. A proxy filed prior to the Annual
Meeting may be revoked by delivering to the Company a duly executed proxy
bearing a later date, or by attending the Annual Meeting and voting in person.
However, if you are a stockholder whose shares are not registered in your own
name, you will need appropriate documentation from your record holders to vote
personally at the Annual Meeting.
The cost of solicitation of proxies on behalf of the Board of Directors
will be borne by the Company. Proxies may be solicited personally or by mail or
telephone by directors, officers and other employees of the Company without
additional compensation
3
<PAGE>
therefor. The Company will also request persons, firms and corporations holding
shares in their names, or in the name of their nominees, which are beneficially
owned by others, to send proxy material to and obtain proxies from such
beneficial owners, and will reimburse such holders for their reasonable expenses
in doing so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares
of common stock, no par, of the company ("Common Stock") with each share
entitling its owner to one vote on the matter to be voted on at the Annual
Meeting, except as described below. There is no cumulative voting for the
election of directors.
The close of business on March 31, 1998, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Annual Meeting
an date any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 935,075 shares.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. In the event that there are not
sufficient votes for a quorum, or to approve or ratify any matter being
presented at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit the further solicitation of proxies.
As to the election of directors, the proxy card being provided by the Board
of Directors enables a stockholder to vote "FOR" the election of the nominees
proposed by the Board of Directors, or to "WITHHOLD AUTHORITY" to vote for one
or more of the nominees being proposed. Under New Jersey law and the Company's
bylaws, 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 one or
more of the nominees being proposed is withheld.
PROPOSAL TO BE VOTED ON AT THE MEETING
1. ELECTION OF DIRECTORS
The Company's Certificate of Incorporation and its bylaws authorize a
minimum of five (5) and a maximum of twenty-five (25) directors, but leaves the
exact number to be fixed by resolution of the Board of Directors. The Board has
fixed the number of directors at eleven (11).
Directors will be elected to serve for a term of three (3) years and until
their successors are duly elected and qualified.
If, for any reason, any of the nominees become unavailable for election,
the proxy solicited by the Board of Directors will be voted for a substitute
nominee selected by the
4
<PAGE>
Board of Directors. The Board has no reason to believe that any of the named
nominees is not available or will not serve if elected. UNLESS AUTHORITY TO VOTE
FOR THE NOMINEE IS WITHHELD, IT IS INTENDED THAT THE SHARES REPRESENTED BY THE
ENCLOSED PROXY CARD, IF EXECUTED AND RETURNED, WILL BE VOTED FOR THE ELECTION OF
THE NOMINEES PROPOSED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE NOMINEES
NAMED IN THIS PROXY STATEMENT.
INFORMATION WITH RESPECT TO THE NOMINEES.
The following table sets forth the names of the nominees for election,
their ages, a brief description of their recent business experience, including
present occupations, the year in which each became a director of the Company or
the Bank. No nominee is a director of another company registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
===============================================================================
NAME, AGE AND
POSITION WITH BUSINESS DIRECTOR EXPIRATION
COMPANY ENTERPRISE SINCE OF TERM
- -------------------------------------------------------------------------------
William M. Almroth Retired; formerly 1993 2001
Age 67, Director Senior Vice President,
Sony Music Corporation
- -------------------------------------------------------------------------------
Herman deWaal Malefyt President, 1986 2001
Age 64, Director Skyline Greenhouses,
Inc.
- -------------------------------------------------------------------------------
Harold Dyer Retired, formerly 1985 2001
Age 70, Director President
White Laundry, Inc.
- -------------------------------------------------------------------------------
Edward Fylstra, CPA Managing Partner 1985 2001
Age 78, Director Fylstra, Wright & Co.
(accountants)
===============================================================================
INFORMATION WITH RESPECT TO THE REMAINING DIRECTORS.
The following table sets forth the names of the remaining directors, their
ages, a brief description of their recent business experience, including present
occupations, and the year in which each became a director of the Company or the
Bank. No nominee is a director of another company registered pursuant to Section
12 of the Securities Exchange Act of 1934
5
<PAGE>
===============================================================================
NAME, AGE AND
POSITION WITH BUSINESS DIRECTOR EXPIRATION
COMPANY ENTERPRISE SINCE(1) OF TERM
- -------------------------------------------------------------------------------
William C. Hanse, Esquire Partner, Hanse & 1985 1999
Age 63, Director Hanse
Attorneys at Law
- -------------------------------------------------------------------------------
Margo Lane Corporate 1994 1999
Age 47, Director Communications
Manager Garden
State Paper and
Corporate Secretary,
Lane Electric, Inc.
- -------------------------------------------------------------------------------
Arie Leegwater Owner,
Age 64, Director and Arie Leegwater 1985 1999
Chairman of Associates
the Board
- -------------------------------------------------------------------------------
John L. Steen President, 1985 1999
Age 60, Director and Steen Sales, Inc. and
Vice Chairman of the President, Dutch
Board Valley Throwing Co.,
(textiles)
- -------------------------------------------------------------------------------
Robert J. Turner President, 1985 2000
Age 57, Director The Turner Group
(insurance)
- -------------------------------------------------------------------------------
William J. Vander Eems President, William 1991 2000
Age 48, Director Vander Eems, Inc.
(contractor)
- -------------------------------------------------------------------------------
Paul Van Ostenbridge President and 1985 2000
Age 45, Director and Chief Executive
President and Chief Officer
Executive Officer Atlantic
Stewardship Bank
===============================================================================
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Common Stock, no par value, as of February 3, 1998, by (i) each
person who is known by the Company to own beneficially more than five percent
(5%) of the issued and outstanding Common Stock, (ii) each director and nominee
for director of the Company, (iii) each executive officer of the Company as
described in this Proxy
- -------------
(1) Includes prior service on the Board of Directors of the Bank
6
<PAGE>
Statement under the caption "Executive Compensation" and (iv) all directors and
executive officers of the Company as a group. Other than as set forth in this
table, the Company is not aware of any individual or group which holds in excess
of five percent (5%) of the outstanding Common Stock.
===============================================================================
Number of Shares
Name of Beneficial Owner Beneficially Owned(1) Percent of Class
- -------------------------------------------------------------------------------
William M. Almroth* 49,189 (2) 5.04
- -------------------------------------------------------------------------------
Herman deWaal Malefyt* 13,611 (3) 1.39
- -------------------------------------------------------------------------------
Harold Dyer* 24,689 2.53
- -------------------------------------------------------------------------------
Edward Fylstra* 10,705 (4) 1.09
- -------------------------------------------------------------------------------
William C. Hanse* 25,356 (5) 2.59
- -------------------------------------------------------------------------------
Margo Lane* 7,664 (6) 0.78
- -------------------------------------------------------------------------------
Arie Leegwater* 11,689 (7) 1.19
- -------------------------------------------------------------------------------
John L. Steen* 23,590 2.41
- -------------------------------------------------------------------------------
Robert J. Turner* 23,007 (8) 2.35
- -------------------------------------------------------------------------------
William J. Vander Eems* 28,432 (9) 2.91
- -------------------------------------------------------------------------------
Paul Van Ostenbridge 3,885 0.39
- -------------------------------------------------------------------------------
Directors and Principal 223,155 22.80
Officers of the Bank
as a group (13 persons)
==============================================================================
* Includes Non-Employee Director Stock Option Plan shares of 4,090
(1) Beneficially owned shares include shares over which the named person
exercises either sole or shared voting power or sole or shared investment
power. It also includes shares owned (i) by a spouse, minor children or by
relatives sharing the same home, (ii) by entities owned or controlled by
the named person and (iii) by other persons if the named person has the
right to acquire such shares within 60 days by the exercise of any right or
option. Unless otherwise noted, all shares are owned of record and
beneficially by the named person, either directly or through the Dividend
Reinvestment Plan.
(2) Includes 30,088 shares held by Mr. Almroth's spouse in her own name.
Mr. Almroth disclaims beneficial ownership of the shares held by his
spouse.
(3) Includes 8,758 shares held by Mr. deWaal Malefyt's spouse in her own
name. Mr. deWaal Malefyt disclaims beneficial ownership of the shares held
by his spouse.
7
<PAGE>
(4) Includes 2,149 shares held by Mr. Fylstra's spouse in her own name. Mr.
Fylstra disclaims beneficial ownership of the shares held by his spouse.
(5) Includes 12,869 shares held jointly by Mr. Hanse and his spouse and
2,109 shares held by Mrs. Hanse's spouse in her own name. Mr. Hanse
disclaims beneficial ownership of the shares held by his spouse.
(6) Includes 2,149 shares held jointly by Mrs. Lane and her spouse. Mrs.
Lane disclaims beneficial ownership of the shares held by her spouse.
(7) Includes 3,164 shares held jointly by Mr. Leegwater and his spouse and
4,219 shares held by trusts of which Mr. Leegwater is the trustee. Mr.
Leegwater disclaims beneficial ownership of the shares owned by his spouse.
(8) Includes 4,803 shares held jointly by Mr. Turner and his spouse and
13,754 shares held by a company owned by Mr. Turner. Mr. Turner disclaims
beneficial ownership of the shares held by his spouse.
(9) Includes 8,811 shares held by Mr. Vander Eems' spouse in her own name
and 4,586 shares held by Mr. Vander Eems as custodian for his children. Mr.
Vander Eems disclaims beneficial ownership of the shares held by his
spouse.
BOARD OF DIRECTORS' MEETINGS; COMMITTEES OF THE BOARD
The Board of Directors of the Company held twelve meetings during 1997. The
Board of Directors holds regularly scheduled meetings each month and special
meetings as circumstances require. All of the Directors of the Company attended
at least 75% of the total number of Board meetings held and committee meetings
held during 1997. Each Company Director is a Bank Director.
AUDIT COMMITTEE. The Company and the Bank have a standing Audit Committee
of the Board of Directors. This committee arranges for the Bank's Directors'
Examinations through its independent certified public accountant, reviews and
evaluates the recommendations of the Directors' Examinations, receives all
reports of examination of the Company and the Bank by appropriate regulatory
agencies, analyzes such regulatory reports, and reports to the Board the results
of its analysis of the regulatory reports. This committee also receives reports
directly from the Company's internal auditor and recommends any action to be
taken in connection therewith. The Audit Committee met 5 times during 1997.. The
Audit Committee consisted during 1997 of Directors Dyer (Chairman), Almroth,
deWaal Malefyt, Leegwater and Steen.
PERSONNEL COMMITTEE. The Bank maintains a Personnel Committee which sets
the compensation for the executive officers of the Company. In 1997, the
Committee consisted of Directors Almroth (Chairman), Leegwater, Turner and Van
Ostenbridge and met 5 times.
NOMINATING COMMITTEE. The Company also maintains a Nominating Committee.
The Nominating Committee makes nominations for candidates to serve on the
Company's Board of Directors. In 1997, the Nominating Committee consisted of
Directors Steen (Chairman), Hanse and Fylstra.
8
<PAGE>
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Directors of the Company, other than full-time employees
of the Company, receive fees of $475 per Board meeting attended, with the
exception of Chairman Leegwater, who receives $950 per meeting. Directors also
receive a fee of $25 per Committee meeting attended.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS. The Company maintains the
Stewardship Financial Corporation 1995 Stock Option Plan for Non-Employee
Directors (the "Non-Employee Plan"). Under the Non-Employee Plan, 45,000(2)
shares of Common Stock have been reserved for issuance. Non-Employee Directors
of the Company, the Bank and any other subsidiaries which the Company may
acquire or incorporate will participate in the Non-Employee Plan. Each
participant in the Non-employee Plan will automatically receive an option to
purchase 4,090 shares of Common Stock effective as of the date such participant
commences his/her service on the Board of Directors. No options may be exercised
more than ten years after the date of its grant. The purchase price of the
shares of Common Stock subject to options under the Non-Employee Plan will be 95
percent of the fair market value on the date such option is granted.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Bank maintains a Personnel Committee which oversees executive
compensation issues. The compensation payable to the Bank's executive officers
is determined by the Board of Directors of the Bank upon recommendation of the
Personnel Committee, without the participation of Mr. Van Ostenbridge on any
compensation matter related directly to him.
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, or under the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
EXECUTIVE COMPENSATION POLICY
The Bank's policy is to compensate its executives fairly and adequately for
the responsibility assumed by them for the success and direction of the Bank,
the effort expended in discharging that responsibility and the results achieved
directly or indirectly from each executive's performance. "Fair and adequate
compensation" is established after careful review of:
1. The Bank's earnings
2. The Bank's performance as compared to other companies of similar size
and market area; and
- ----------------
(2) Per Share data has been restated to reflect a 2 for 1 stock split completed
in September, 1997. Common Stock equivalents are not included in the
calculation and they are not material.
9
<PAGE>
3. Comparison of what the market demands for compensation of similarly
situated and experienced executives.
Total compensation takes into consideration a mix of base salary, bonus,
perquisites and stock options. The particular mix is established in order to
competitively attract competent professionals, retain those professionals, and
reward extraordinary achievement.
The Board of Directors also considers net income for the year and earnings
per share of the Bank before finalizing officer increases for the coming year.
Based upon its current levels of compensation, the Bank is not affected by
the new provisions of the Internal Revenue Code which limit the deductibility to
a company of compensation in excess of $1,000,000 paid to any of its top five
executives. Thus, the Bank has no policy as to that subject.
BASE SALARY
The Board of Directors bears the responsibility for establishing base
salary.
Salary is minimum compensation for any particular position and is not tied
to any performance formula or standard. However, that is not to say that poor
performance will not result in termination. Acceptable performance is expected
of all executive officers as a minimum standard.
To establish salary, the following criteria are used:
1. Position description
2. Director responsibility assumed.
3. Comparative studies of peer group compensation. Special weight is
given to local factors as opposed to national averages.
4. Earnings performance of the Company resulting in availability of funds
5. Competitive level of salary to be maintained to attract and retain
qualified and experienced executives.
STOCK OPTIONS
Recommendations for stock option awards are made by the Personnel Committee
to the Stock Compensation Committee, which then makes recommendations to the
entire Board of Directors for final action.
The Personnel Committee meets to evaluate meritorious performance of all
officers and employees for consideration to receive stock options.
The Personnel Committee makes awards based upon the following criteria:
1. Position of the officer or employee in the Bank.
10
<PAGE>
2. The benefit which the Bank has derived as a result of the efforts of
the award candidate under consideration.
3. The Bank's desire to encourage long term employment of the award
candidate.
Perks, such as company automobiles and their related expenses, country club
memberships, auxiliary insurance benefits and other perks which the Board may
approve from time to time are determined and awarded pursuant to evaluation
under the same criteria used to establish base salary.
CEO COMPENSATION
Paul Van Ostenbridge is President and Chief Executive Officer of the
Company and the Bank, and has been President and Chief Executive Officer of the
Bank since its inception. The Company and the Bank have continued to make
progress toward all of its goals during Mr. Van Ostenbridge's tenure as
President and Chief Executive Officer.
The total compensation to Mr. Van Ostenbridge in 1997 is an increase of
7.2% over his total 1996 compensation. In the Board opinion, this increase
represents an appropriate amount in view of Mr. Van Ostenbridge's level of
personal performance in 1997, the results achieved by the Company and the Bank,
and compares favorably to other executives in the banking industry.
The Board believes that the total compensation for Mr. Van Ostenbridge
represents fair compensation in view of the 1997 performance of the Company and
the Bank as well as peer group comparisons.
In 1997, the Personnel Committee of the Bank consisted of Directors Almroth
(Chairman), Leegwater, Turner and Van Ostenbridge.
ANNUAL MANAGEMENT COMPENSATION AND ALL OTHER COMPENSATION
The following table sets forth a summary for the last three fiscal years of
the cash and non-cash compensation awarded to, earned by, or paid to, the Chief
Executive Officers of the Company. There are no other executive officers whose
individual remuneration exceeded $100,000 for the last fiscal year.
11
<PAGE>
SUMMARY COMPENSATION TABLE
CASH AND CASH EQUIVALENT FORMS OF REMUNERATION
===============================================================================
Annual Compensation Long Term Compensation
-------------------------------- ----------------------
Awards
-------------------------------------------------------
Securities
Other Restricted Underlying
Name & Salary Bonus Annual Stock Options/
Principal Position Year ($) Compensation Award(s) SARs
($) (2) ($) (#)
- -------------------------------------------------------------------------------
Paul Van 1997 150,000 25,000 13,991 0 8,000
Ostenbridge (1)
President and CEO
------------------------------------------------------------
1996 140,000 13,112 18,593 0 0
(3)
------------------------------------------------------------
1995 120,000 10,250 13,843 0 0
(3)
===============================================================================
(1) Includes bonus earned through the Executive Compensation Plan and
accrued during 1997, which was paid first quarter, 1998.
(2) Includes the imputed value of personal use of Bank automobile, life
insurance premium, Bank matching contributions to its 401(k) Plan, and
Profit Sharing contributions.
(3) Includes the value of shares of Common Stock awarded as a bonus in 1996
of 700 shares at a fair market value of $16.50 and 100 shares at a fair
market value of $15.625; and 500 shares of Common Stock awarded as bonus in
1995 at a fair market value of $12.50 per share. Per share has been
restated to reflect a 2 for 1 stock split completed in September, 1997.
(4) For fiscal years 1997, 1996 and 1995 the Bank had no long term
incentive plans in existence, and therefore made no payouts for awards
under such plans.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
During 1997, 8,000 Incentive Stock Options were awarded to Paul Van Ostenbridge,
President and CEO of the Company, under the Company's Employee Stock Option
Plan. The following table sets forth certain information regarding options
granted to executive officers of the Company during fiscal 1997. The Company has
never granted stock appreciation rights (SARS) to any of its executive officers.
12
<PAGE>
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
=================================================================================================
Individual Grants
- -------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted (#) Fiscal Year Price ($/SH) Date
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Paul Van Ostenbridge 8,000 (1) 67% $18.50 September 10, 2007
=================================================================================================
</TABLE>
(1) 1,600 options will become exercisable on May 20, 1998, and each year
thereafter until all options are exercisable.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
No options were exercised by any executive officers of the Company disclosed in
the Summary Compensation Table above during the fiscal year ended December 31,
1997. The following table sets forth for the named executive officers of the
Company, the number of unexercised options held at December 31, 1997, and the
potential value thereof based on the closing per share sales price of the
Company's Common Stock of $21.00 on December 31, 1997.
================================================================================
Number of Securities Value of Unexcercised
Underlying Unexercised In-the-Money Options
Options at FY-End (#)(1) at FY-End
($) (2)
Exercisable (E) Exercisable (E)
Name Unexercisable (U) Unexercisable (U)
- --------------------------------------------------------------------------------
Paul Van Ostenbridge -0- (E) $ -0- (E)
8,000 (U) $168,000 (U)
- --------------------------------------------------------------------------------
EMPLOYEE STOCK OPTION PLAN. The Company maintains the Stewardship Financial
Corporation 1995 Stock Option Plan (the "Employee Plan"). Under the Employee
Plan 22,500 shares of Common Stock have been reserved for issuance. Employees of
the Company, the Bank, and any subsidiaries which the Company may incorporate or
acquire are eligible to participate in the Employee Plan if such employees have
a title of least vice president. The Personnel Committee manages the Employee
Plan and selects participants
13
<PAGE>
from the eligible employees. No option granted under the Employee Plan may be
exercised more than 10 years after the date of its grant. The purchase price for
shares of Common Stock subject to options under the Plan may not be less than
100% of the fair market value on the date such options are granted. There were
stock options awarded to the three executives of the bank dated May 20, 1997,
totalling 12,000 common shares, of which 8,000 common shares were awarded to
Paul Van Ostenbridge, President and Chief Executive Officer of the Company and
the Bank, subject to the terms and conditions of the Employee Stock Purchase
Plan, with the first installment available for purchase of May 20, 1998, at the
fair market value of $18.50.
EMPLOYEE STOCK PURCHASE PLAN. The Company maintains the Stewardship Financial
Corporation 1995 Employee Stock Purchase Plan (the "Purchase Plan"). Under the
Purchase Plan 22,500 shares of Common Stock are reserved for issuance. Shares
acquired under the Purchase Plan may be obtained, at the discretion of the
Company, from the authorized but unissued shares of Common Stock or from the
open market. Employees of the Company, the Bank and any subsidiaries which the
Company may incorporate or acquire who work at least 20 hours per week are
eligible to participate in the Purchase Plan. Shares are purchased for
participants through payroll deductions in a maximum amount of 10% of a
participant's total compensation per pay period. Eligible employees must notify
the Bank of their participation in the Purchase Plan and the amount of payroll
deductions that will be applied to purchase shares for them. The funds
contributed by each participant are used to purchase shares of Common Stock at
95% of the fair market value.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS. The Bank has made in
the past and, assuming continued satisfaction of generally applicable credit
standards, expects to continue to make loans to directors, executive officers
and their associates (i.e. corporations or organizations for which they serve as
officers of directors, or in which they have beneficial ownership interests of
10% or more). These loans have all been made in the ordinary course of banking
business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectability or
present other unfavorable features.
The Company and the Bank retained the law firm of Hanse and Hanse as general
counsel in 1997 and expect to continue to retain Hanse and Hanse as general
counsel in 1998. Director William C. Hanse is a partner of the firm. During
1997, the Company and the Bank paid fees of approximately $14,400 to Hanse and
Hanse.
The Company and the Bank purchase insurance through The Turner Group, an
insurance brokerage owned by Robert J. Turner, a Director of the Company and the
Bank. In 1997, the Company and the Bank paid insurance premiums of $79,733 to
The Turner Group. In 1997, the Board approved an association with Diversified
Tax Shelters, a division of The Turner Group, to sell life insurance, annuities
and mutual funds to clients of the Bank.
14
<PAGE>
RECOMMENDATION AND VOTE REQUIRED. Nominees will be elected by a plurality of the
shares voting at the Annual Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
FOR ITS NOMINEES FOR THE BOARD OF DIRECTORS.
INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors of the Company and the Bank has
recommended to the Boards that they retain the firm of KPMG Peat Marwick LLP
("Peat") to act as independent public accountants for the Company and the Bank
for the fiscal year ending 1998. Peat has acted as the Company's and the Bank's
independent public accountants for the years ended December 31, 1996 and 1997.
Peat has advised the Company that one or more of its representatives will be
present at the Annual Meeting to make a statement if they so desire and to
respond to appropriate questions.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required by regulation of the Securities and
Exchange Commission to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Form 5 was
required for those persons, the Company believes that, during the fiscal year
ended December 31, 1997, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were met.
STOCKHOLDER PROPOSALS
Proposals of stockholders to be included in the Company's 1999 proxy material
must be received by the Secretary of the Company no later than December 31,
1998.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may come before
the Annual Meeting; however, in the event such other matters come before the
meetings, it is the intention of the persons named in the proxy to vote on any
such matters in accordance with the recommendation of the Board of Directors.
15
<PAGE>
[LOGO]
STEWARDSHIP FINANCIAL CORPORATION
PROXY ANNUAL MEETING - MONDAY, MAY 11, 1998 @ 7:00 P.M. PROXY
ATLANTIC STEWARDSHIP BANK
630 Godwin Avenue
Midland Park, New Jersey 07432-1405
The signer(s) hereby appoints Donald De Bruin, Paul D. Heerema, and Garret
Hoogerhyde and each of them, proxies with power of substitution, to vote all
shares the undersigned are entitled to vote at the above meeting or any
adjournment thereof.
Nominees for election of three (3) year terms expiring April, 2001:
William M. Almroth; Herman deWaal Malefyt; Harold Dyer, Edward Fylstra
(Vote and sign on the reverse side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy, when properly executed, will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR Election of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF DIRECTORS
1) To elect persons specified on the reverse side of this card to the Board of
Directors of the Bank to serve until their term expires or until their
successors are elected and qualified: FOR WITHHELD
[ ] [ ]
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
The signer(s) hereby revokes all proxies heretofore given by the signer to vote
at said meeting or any adjournments thereof. Please sign exactly a name appears
hereon. Joint owners should each sign. The undersigned acknowledges receipt of
the accompanying Notice of the Annual Meeting and Proxy Statement dated April
15, 1998, for the Annual Meeting to be held on May 11, 1998.
-------------------------------------
Date
-------------------------------------
Signature(s) Date
Anyone signing as attorney, executor, administrator, trustee, guardian, partner
or corporate officer, should indicate office or capacity:
[ ] Please check if you will attend the meeting
PROXY
