UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-KSB/A
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1999
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission file number 0-29030
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SUSSEX BANCORP
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(Name of small business issuer as specified in its charter)
New Jersey 22-3475473
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(State of other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
399 Route 23, Franklin, New Jersey 07416 (973) 827-2914
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(Address of principal executive offices) (Zip Code) (Issuer's Telephone Number
Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Name of Exchange on Which Registered
-------------------------- ------------------------------------
Common Stock, no par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the Issuer: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934, as amended, during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of Issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. (X)
1
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Registrant; Compliance with
Section 16(a)
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The following table sets forth the names of the directors and executive
officers and their ages, a brief description of their recent business
experience, including present occupations and employment, certain directorships
held by each and the year in which each became a director or executive officer
of the Registrant.
<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------------------- --------------------------
Name, Age and Position Principal Occupations During
With the Company Past Five Years Since (1)
---------------------------------------- -------------------------------------------------- --------------------------
<S> <C> <C>
Donald L. Kovach, 65 Chairman, CEO and President of the Company and
Chairman of the Board, CEO the Bank and Attorney at Law
and President Franklin, New Jersey 1976
---------------------------------------- -------------------------------------------------- --------------------------
Joel D. Marvil, 65 President/CEO of Manufacturing Co.
Director Ames Rubber Corporation
Hamburg, New Jersey 1989
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Mark J. Hontz, 33 Partner
Director Dolan & Dolan, Attorneys at Law
Newton, New Jersey 1998
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Irvin Ackerson, 78 Excavating Contractor
Director Ackerson Contracting Co.
Oak Ridge, New Jersey 1976
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William E. Kulsar, 63 Certified Public Accountant
Secretary and Director Caristia, Kulsar & Wade, P.A.
Sparta, New Jersey 1976
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Richard Scott, 64 Dentist, Richard Scott, DDS
Director Franklin, New Jersey 1976
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Joseph Zitone, 68 General Contractor, Zitone Construction
Director Montague, New Jersey 1984
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Candace A. Leatham, 45 Senior Vice President and Treasurer of Sussex
Senior Vice President and Treasurer County State Bank 1984
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</TABLE>
(1) Includes previous service with Sussex County State Bank (the "Bank")
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Registrant believes that, during the fiscal year
ended December 31, 1999, all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were met.
2
<PAGE>
ITEM 11. Executive Compensation
<TABLE>
<CAPTION>
----------------------------------- --------- ------------------------------------------ --------------- -------------------------
Annual Compensation Award Payouts
------------------------------------------ --------------- -------------------------
Securities
Other Annual Underlying LTIP All Other
Compensation Options/SARs Payouts Compensation
Name and Principal Position Year Salary ($) Bonus ($) ($) (#) ($) ($)
----------------------------------- --------- ------------- ----------- ---------------- --------------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Donald L. Kovach, Chairman of the
Board and CEO 1999 159,723 -0- (1) 720 None -0-
--------- ------------- ----------- ---------------- --------------- -------- ----------------
1998 155,546 -0- (1) 945 None -0-
--------- ------------- ----------- ---------------- --------------- -------- ----------------
1997 139,615 -0- (1) 500 None -0-
----------------------------------- --------- ------------- ----------- ---------------- --------------- -------- ----------------
</TABLE>
(1) During the fiscal years presented, the Registrant provided additional life
insurance and an automobile and provided a match to Mr. Kovach's 401(k)
plan account membership for Mr. Kovach. The use made thereof for personal
purposes did not exceed 10% of the total cash compensation to such persons
which is the sum of base salary and bonus and therefore is not included in
the above table.
Employment Agreements
The Registrant and the Bank are parties to an Employment Agreement with Mr.
Donald L. Kovach pursuant to which he serves as President and Chief Executive
Officer of the Company and the Bank (the "Employment Agreement"). The Employment
Agreement provides for a term ending on August 31, 2002. The Employment
Agreement provides that Mr. Kovach will receive a base salary of $160,200,
subject to increase or decrease, and may be granted a discretionary bonus as
determined by the Board of Directors. The Employment Agreement permits the
Registrant to terminate Mr. Kovach's employment for cause at any time. The
Employment Agreement defines cause to mean personal dishonesty, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of law, rule or regulation,
other than traffic violations or similar offenses, or violation of a final cease
and desist order, or a material breach of any provision of the Agreement. In the
event Mr. Kovach is terminated for any reason other than cause, or in the event
Mr. Kovach resigns his employment because he is reassigned to a position of
lesser rank or status than President and Chief Executive Officer, his place of
employment is relocated by more than 30 miles from its location on the date of
the Agreement, or his compensation or other benefits are reduced, Mr. Kovach, or
in the event of his death, his beneficiary, will be entitled to receive his base
salary at the time of such termination or resignation for the remaining term of
the Agreement. In addition, the Company will continue to provide Mr. Kovach with
certain insurance and other benefits through the end of the term of the
Agreement. Mr. Kovach's Employment Agreement further provides that upon the
occurrence of a change in control of the Company, as defined in the Employment
Agreement, and in the event Mr. Kovach is terminated for reasons other than
cause or in the event Mr. Kovach, within 18 months of the change in control,
resigns his employment for the reasons discussed above, he shall be entitled to
receive a severance payment based upon his then current base salary. Under the
Agreement, in the event the change in control occurs, Mr. Kovach is entitled to
a severance payment equal to 2.99 times his then current base salary. The
Employment Agreement also prohibits Mr. Kovach from competing with the Bank and
the Company for a period of one year following termination of his employment.
3
<PAGE>
The following table sets forth information regarding stock option grants to
the individuals named in the table above:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
==================================================================================================================================
INDIVIDUAL GRANTS
------------------------- ----------------------- ---------------------- ----------------- ------------------ --------------------
Number of Securities % of Total
Underlying Option/SARs Granted Exercise or Present Value of
Options/SARs to Employees in Base Price Expiration Option on Date of
Name Granted (#)(1) Fiscal Year ($/SH)(2) Date Grant($)(3)
------------------------- ----------------------- ---------------------- ----------------- ------------------ --------------------
<S> <C> <C> <C> <C> <C>
Donald L. Kovach 720 20% 10.38 1/19/2002 7,474
==================================================================================================================================
</TABLE>
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(1) As of December 31, 1999, one-half of these options were immediately
exercisable.
(2) The present value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted
average assumptions: dividend yield of 2.0%, expected volatility of 16.0%,
risk free interest rate of 6.6%, and an expected life of five (5) years.
ITEM 12. Security Ownership of Certain Beneficial Owners and Managers
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The following table sets forth information concerning the beneficial
ownership of shares of Common Stock as of April 28, 2000, by (i) each person who
is known by the Registrant to own beneficially more than five percent (5%) of
the issued and outstanding Common Stock, (ii) each director and nominee for
director of the Registrant, (iii) each executive officer of the Registrant
described in this Report under the caption "Executive Compensation" and (iv) all
directors and executive officers of the Registrant as a group. Other than as set
forth in this table, the Registrant is not aware of any individual or group
which holds in excess of 5% of the outstanding Common Stock.
<TABLE>
<CAPTION>
================================================ ========================================== =========================
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned (1) of Class
------------------------ ---------------------- --------
------------------------------------------------ ------------------------------------------ -------------------------
<S> <C> <C>
Irvin Ackerson 29,052(2) 2.04
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Mark J. Hontz 605 .04
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Donald L. Kovach 120,362(3)(4) 8.46
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William E. Kulsar 69,887(4)(5) 4.91
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Joel D. Marvil 41,872(6) 2.94
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Richard Scott 49,578(7) 3.48
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Joseph Zitone 79,942(8) 5.62
================================================ ========================================== =========================
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
================================================ ========================================== =========================
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned (1) of Class
------------------------ ---------------------- --------
------------------------------------------------ ------------------------------------------ -------------------------
<S> <C> <C>
Directors & Principal Officers as a Group
(7 persons) 350,223 24.61
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Beneficial Owners of more than 5% of Common
Stock
------------------------------------------------ ------------------------------------------ -------------------------
Ambrose Hamm
P. O. Box E
Branchville, New Jersey 07826 108,050 7.59
================================================ ========================================== =========================
</TABLE>
(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 10,358 shares owned by Mr. Ackerson's wife. Also includes 7,360
shares purchasable upon the exercise of immediately exercisable stock
options.
(3) Includes 14,368 shares owned by Mr. Kovach's wife, 5,263 shares in the name
of Merrill Lynch Pierce Fenner & Smith, FBO Donald L. Kovach and 3,194
shares in the name of Merrill Lynch Pierce Fenner & Smith, FBO Betty J.
Kovach, 1,200 shares in the name of IBAA Financial Services FBO Donald L.
Kovach, 1,200 shares in the name of IBAA Financial Services FBO Betty J.
Kovach. Also includes 10,224 shares purchasable upon the exercise of
immediately exercisable stock options.
(4) Includes 41,075 shares over which Messrs. Kovach and Kulsar have shared
voting authority as administrators for The Sussex County State Bank
Employee Stock Ownership Plan.
(5) Includes 1,520 shares in the name of Merrill Lynch Pierce Fenner & Smith
Profit Sharing Plan FBO William E. Kulsar and 18,584 shares in the name of
Merrill Lynch Pierce Fenner & Smith FBO William E. Kulsar 401K. Also
includes 7,804 shares purchasable upon the exercise of immediately
exercisable stock options.
(6) Also includes 9,824 shares purchasable upon the exercise of immediately
exercisable stock options.
(7) Also includes 8,804 shares purchasable upon the exercise of immediately
exercisable stock options.
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<PAGE>
(8) Includes 10,266 shares owned by the Zitone Construction & Supply Co., Inc.
Profit Sharing Plan Trust and 15,300 shares in the name of Smith Barney FBO
Joseph Zitone. Also includes 500 shares purchasable upon the exercise of
immediately exercisable stock options.
ITEM 13. Certain Relationships and Related 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 or directors or in which they
have beneficial ownership interests of ten percent or more). These loans have
all been made in the ordinary course of the Bank's 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 collectibility or present other unfavorable features.
The Bank paid $16,457 to Kovach and Vanderwiele, Attorneys at Law, at which
Donald L. Kovach, Chairman of the Board and Chief Executive Officer, is a
member, for legal services rendered to the Bank during fiscal 1999. Said firm
renders legal services to the Bank on a continuing basis.
The Bank paid $11,260 during fiscal 1999 to Caristia, Kulsar & Wade, P.A.,
Certified Public Accountants, at which William E. Kulsar, Secretary and a
Director of the Registrant and the Bank is a member, for accounting services
rendered to the Bank for IRS filing purposes and other accounting services
beyond those provided by the annually retained independent public accountants.
Caristia, Kulsar, & Wade, P.A. continues to render accounting services to the
Bank.
The Bank paid $16,390 to Irvin Ackerson for appraisal services rendered to
the Bank during fiscal 1999. Irvin Ackerson continues to render appraisal
services to the Bank.
The Bank leases its Montague branch office from Montague Mini Mall, Inc.
under a lease covering 1,200 square feet. The lease agreement was renewed as of
April 1, 1997. As renewed, the lease will terminate on March 31, 2002, and
provides for a monthly rent of $1,650. Mr. Joseph Zitone, a Director of the
Registrant, is a majority stockholder of Montague Mini Mall, Inc. The Registrant
considers the lease terms to be comparable to those which exist with
unaffiliated third parties.
6
<PAGE>
SIGNATURES
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Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SUSSEX BANCORP
By: /s/ Donald L. Kovach
---------------------------
Donald L. Kovach
Chairman of the Board and
Dated: June 8, 2000 Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ Donald L. Kovach Chairman of the Board and June 8, 2000
---------------- Chief Executive Officer
Donald L. Kovach
/s/ Candace A.Leatham Treasurer (Principal Financial June 8, 2000
------------------ Officer and Principal
Candace A. Leatham Accounting Officer)
/s/ Irvin Ackerson Director June 8, 2000
--------------
Irvin Ackerson
/s/ William E. Kulsar Secretary and Director June 8, 2000
-----------------
William E. Kulsar
/s/ Joel D. Marvil Director June 8, 2000
--------------
Joel D. Marvil
/s/ Richard Scott Director June 8, 2000
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Richard Scott
/s/ Joseph Zitone Director June 8, 2000
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Joseph Zitone
7
