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)
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(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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
Stewardship Financial Corporation
630 Godwin Avenue
Midland Park, New Jersey 07432-1405
April 15, 1999
To Our Stockholder:
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, 1999, 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,
/S/EDWARD FYLSTRA
-----------------
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, 1999
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, 1999, at 7:00 P.M. for the purpose of considering
and voting upon the following matters:
1. To elect the four (4) persons named as Director nominees 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, 1999, 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 to 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, 1999
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, 1999
-------------------------------
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, 1999, 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 1998 Annual Report to stockholders,
including consolidated financial statements for the fiscal year ended December
31, 1998, and a proxy card accompany this Proxy Statement, which is first being
mailed to record holders on or about April 15, 1999.
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 VOTED "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.
3
<PAGE>
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 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 value, 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, 1999, 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
or any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 993,623 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.
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PROPOSAL TO BE VOTED ON AT THE MEETING
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 current number of directors at ten (10).
Directors will be elected to serve for a term of three (3) years and until
their successors are duly elected and qualified. The Board has been divided into
three (3) classes and directors are elected to serve in terms of three (3)
years.
If, for any reason, any of the nominees becomes unavailable for election,
the proxy solicited by the Board of Directors will be voted for a substitute
nominee selected by the 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.
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<PAGE>
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 and the expiration of their current term. 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 EXPERIENCE SINCE(1) OF TERM
- --------------------------------------------------------------------------------
William C. Hanse, Esquire Partner, Hanse & Hanse, 1985 1999
Age 64, Director Attorneys at Law
- --------------------------------------------------------------------------------
Margo Lane Corporate 1994 1999
Age 48, Director Communications
Manager, Garden State
Paper; and Corporate
Secretary,
Lane Electric, Inc.
- --------------------------------------------------------------------------------
Arie Leegwater Owner,
Age 65, Director and Arie Leegwater 1985 1999
Chairman of the Board Associates
(contractor)
- --------------------------------------------------------------------------------
John L. Steen President, 1985 1999
Age 61, Director and Steen Sales, Inc., and
Vice Chairman of the President, Dutch Valley
Board Throwing Co.,
(textiles)
================================================================================
- ----------
(1) Includes prior service on the Board of Directors of the Bank prior to the
formation of the Company
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<PAGE>
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 and the expiration of their current term. 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 EXPERIENCE SINCE(2) OF TERM
- --------------------------------------------------------------------------------
William Almroth Retired; formerly 1993 2001
Age 68, Director Senior Vice President,
Sony Music
Corporation
- --------------------------------------------------------------------------------
Harold Dyer Retired, formerly 1985 2001
Age 71, Director President,
White Laundry, Inc.
- --------------------------------------------------------------------------------
Edward Fylstra, CPA Managing Partner, 1985 2001
Age 79, Director Fylstra, Wright & Co.
(accountants)
- --------------------------------------------------------------------------------
Robert J. Turner President, 1985 2000
Age 56, Director The Turner Group
(insurance)
- --------------------------------------------------------------------------------
William J. Vander Eems President, William 1991 2000
Age 49, Director Vander Eems, Inc.
(contractor)
- --------------------------------------------------------------------------------
Paul Van Ostenbridge President and 1985 2000
Age 46, Director and Chief Executive
President and Chief Officer.
Executive Officer Atlantic Stewardship
Bank
================================================================================
- ----------
(2) Includes prior service on the Board of Directors of the Bank prior to the
formation of the Company
7
<PAGE>
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, 1999, 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, and (iii) each executive officer of the Company as
described in this Proxy 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 Almroth* 52,378 (2) 5.28
- -----------------------------------------------------------------------------
Harold Dyer* 23,942 2.41
- -----------------------------------------------------------------------------
Edward Fylstra* 11,583 (3) 1.17
- ------------------------------------------------------------------------------
William C. Hanse* 25,949 (4) 2.62
- -----------------------------------------------------------------------------
Margo Lane* 8,911 (5) 0.90
- -----------------------------------------------------------------------------
Arie Leegwater* 12,742 (6) 1.28
- -----------------------------------------------------------------------------
John L. Steen* 25,278 2.55
- -----------------------------------------------------------------------------
Robert J. Turner* 24,433 (7) 2.46
- -----------------------------------------------------------------------------
William J. Vander Eems* 30,431 (8) 3.07
- -----------------------------------------------------------------------------
Paul Van Ostenbridge** 5,873** 0.59
- -----------------------------------------------------------------------------
Directors and Principal Officers 223,813 22.45
of the Bank as a group (12
persons)
================================================================================
- -------------
* Includes 4,295 Non-Employee Director Stock Option Plan shares of
common stock adjusted for the effect of the 1997 two for one stock split
and the 1998 5% stock dividend.
** Includes 1,680 Employee Stock Option Plan shares of common stock
adjusted for the effect of the 1997 two for one stock split and the 1998
5% stock dividend.
8
<PAGE>
- ----------
(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 31,977 shares held by Mr. Almroth's spouse in her own name.
Mr. Almroth disclaims beneficial ownership of the interest held by his
spouse.
(3) Includes 2,283 shares held by Mr. Fylstra's spouse in her own name.
Mr. Fylstra disclaims beneficial ownership of the interest held by his
spouse.
(4) Includes 12,473 shares held jointly by Mr. Hanse and his spouse and
2,241 shares held by Mr. Hanse's spouse in her own name. Mr. Hanse
disclaims beneficial ownership of the interest held by his spouse.
(5) Includes 4,616 shares held jointly by Mrs. Lane and her spouse and
157 shares held by Mrs. Lane's spouse as custodian for their minor
children. Mrs. Lane disclaims beneficial ownership of the interest held by
her spouse.
(6) Includes 3,363 shares held jointly by Mr. Leegwater and his spouse
and 4,481 shares held by trusts of which Mr. Leegwater is the trustee.
Mr. Leegwater disclaims beneficial ownership of the interest owned by
his spouse.
(7) Includes 5,104 shares held jointly by Mr. Turner and his spouse and
14,617 shares held by a company owned by Mr. Turner. Mr. Turner disclaims
beneficial ownership of the interest held by his spouse.
(8) Includes 9,364 shares held by Mr. Vander Eems' spouse in her own
name and 3,891 shares held by Mr. Vander Eems as custodian for his
children. Mr. Vander Eems disclaims beneficial ownership of the interest
held by his spouse.
BOARD AND COMMITTEE MEETINGS
The Board of Directors of the Company held thirteen (13) meetings during
1998. 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 and committee meetings held
during 1998. Each Company Director is also 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 Company's outside
audit and 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
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reports directly from the Company's internal auditors and recommends any action
to be taken in connection therewith. The Audit Committee met 10 times during
1998. The Audit Committee consisted during 1998 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 1998, the
Committee consisted of Directors Almroth (Chairman), Lane, 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 1998, the Nominating Committee consisted of
Directors Steen (Chairman), Hanse and Fylstra. The Nominating Committee met
twice during 1998.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Directors of the Company, other than full-time employees
of the Company, receive fees of $550 per Board meeting attended, with the
exception of Chairman Leegwater, who receives $1,100 per meeting. Directors also
receive a fee of $100 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, 47,250 shares
of Common Stock have been reserved for issuance. Of this total 40,900 stock
options were granted on August 17, 1997. 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 4,295 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.
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<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
PERSONNEL 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 on executive options 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
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 regarding that subject.
11
<PAGE>
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 Bank 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.
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, auxiliary
insurance benefits and other perks which the Board of Directors of the Bank 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
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make progress toward all of their goals during Mr. Van Ostenbridge's tenure as
President and Chief Executive Officer.
The total compensation to Mr. Van Ostenbridge in 1998 is an increase of
4.5% over his total 1997 compensation. It is the opinion of the Board of
Directors' of the Bank this increase represents an appropriate amount in view of
Mr. Van Ostenbridge's level of personal performance in 1998, 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 1998 performance of the Company and
the Bank as well as peer group comparisons.
Members of the Committee
William Almroth (Chairman)
Margo Lane
Arie Leegwater
Robert J. Turner
Paul Van Ostenbridge
13
<PAGE>
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 $100,000 for the last fiscal year.
SUMMARY COMPENSATION TABLE
CASH AND CASH EQUIVALENT FORMS OF REMUNERATION
----------------------------------------------
================================================================================
Annual Compensation Long Term
Compensation (1)
Awards
----------------------------------- -----------------------
Securities
Restricted Underlying
Other Annual Stock Options/
Name & Salary Bonus Compensation Award(s) SARs
Principal Position Year ($) ($)(2) ($) (#)
- ------------------------------------------------------- -----------------------
Paul Van 1998 156,000 28,644 21,105 0 1,050
Ostenbridge (3)
President and CEO
----------------------------------- -----------------------
1997 150,000 25,000 22,114 0 8,400
(3)
----------------------------------- -----------------------
1996 140,000 13,112 18,783 0 0
(4)
================================================================================
- ----------
(1) For fiscal years 1998, 1997 and 1996 the Bank had no long term
incentive plans in existence, and therefore made no payouts for awards
under such plans.
(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 bonuses earned through the Executive Compensation Plan and
accrued during 1998 and 1997, which were paid in the first quarters of
1999 and 1998, respectively.
(4) Includes the value of shares of Common Stock awarded as a bonus in
1996 of 735 shares at a fair market value of $15.71 and 105 shares at a
fair market value of $14.88 adjusted for the effect of the 1997 two for
one stock split and the 1998 5% stock dividend.
14
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
During 1998, 1,050 Incentive Stock Options were awarded to Paul Van Ostenbridge,
President and CEO of the Company, under the Company's Employee Stock Option
Plan. and 8,400 Incentive Stock Options were awarded during 1997 to Paul Van
Ostenbridge, President and CEO of the Company, under the same Employee Stock
Option Plan. The following table sets forth certain information regarding
options granted to executive officers earning over $100,000 annually of the
Company during fiscal years 1998 and 1997. The Company has never granted stock
appreciation rights (SARS) to any of its executive officers.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
================================================================================
Individual Grants
-----------------
- --------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted (#) Fiscal Year Price($/SH) Date
- --------------------------------------------------------------------------------
Paul Van Ostenbridge 1,050 (1) 50% $20.00 September 10, 2007
================================================================================
- ----------
(1) 210 options will become exercisable on February 20, 1999, and each
year thereafter until all options are exercisable on February 20, 2003.
15
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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,
1998. The following table sets forth for the named executive officer of the
Company, the number of unexercised options held at December 31, 1998, and the
potential value thereof based on the closing per share sales price of the
Company's Common Stock of $21.00 on December 31, 1998.
================================================================================
Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options at FY-End
Options at FY-End (#)(1) ($) (2)
Exercisable(E) Exercisable(E)
Name Unexercisable(U) Unexercisable(U)
- ------------------------------------------------------------------------------=
Paul Van Ostenbridge 1,680(E) $ 35,280(E)
7,770(U) $163,170(U)
================================================================================
EMPLOYEE STOCK OPTION PLAN. The Company maintains the Stewardship Financial
Corporation 1995 Stock Option Plan (the "Employee Plan"). Under the Employee
Plan 47,250 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 at least vice president. The Personnel Committee manages the Employee
Plan and selects participants 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, totaling 12,600 common shares, of
which 8,400 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, 1999, at the fair market value of $17.62.
EMPLOYEE STOCK PURCHASE PLAN. The Company maintains the Stewardship Financial
Corporation 1995 Employee Stock Purchase Plan (the "Purchase Plan"). Under the
Purchase Plan 47,250 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
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<PAGE>
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.
OTHER MATTERS RELATING TO EXECUTIVE OFFICERS
AND DIRECTORS
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 1998 and expect to continue to retain Hanse and Hanse as general
counsel in 1999. Director William C. Hanse is a partner of the firm. During
1998, 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 1998, 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.
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, 1998, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were met.
17
<PAGE>
VOTING PROCEDURES
Nominees will be elected by a plurality of the shares voted 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 such Boards that they retain the firm of KPMG LLP to act as
independent public accountants for the Company and the Bank for the fiscal year
ending 1999. KPMG LLP has acted as the Company's and the Bank's independent
public accountants for the years ended December 31, 1996, 1997 and 1998.
KPMG LLP 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.
STOCKHOLDER PROPOSALS
Proposals of stockholders to be included in the Company's 2000 proxy material
must be received by the Secretary of the Company no later than December 31,
1999. Pursuant to amended SEC Rule 14-a-4 (c) (1) the Company shall exercise
discretionary voting authority to the extent conferred by Proxy with respect to
shareholder proposals received after March 1, 2000.
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 he Board of Directors.
18
<PAGE>
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SFC [Logo]
STEWARDSHIP FINANCIAL CORPORATION
PROXY ANNUAL MEETING - MONDAY, MAY 11, 1999 @ 7:00 P.M. PROXY
[Logo] 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, 2002:
William C. Hanse; Margo Lane; Arie Leegwater, John L. Steen
(Vote and sign on the reverse side)
- --------------------------------------------------------------------------------
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
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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 as 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, 1999, for the Annual Meeting to be held on May 11, 1999.
------------------------------------------------
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
PROXY1
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