SUSSEX BANCORP
399 State Highway 23
P.O. Box 353
Franklin, NJ 07416
June 5, 2000
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of Sussex Bancorp (the "Company"), the holding company
for The Sussex County State Bank (the "Bank"), to be held on June 28, 2000, at
10:30 a.m. at the Bank's Augusta office, 100 Route 206, Augusta, New Jersey.
At the Annual Meeting stockholders will be asked to consider and vote upon
the election of three directors whose terms expire this year.
The Board of Directors of the Company believes that the election of its
nominees to the Board of Directors is in the best interests of the Company and
its stockholders and unanimously recommends that you vote "FOR" each of the
Board's nominees.
Your cooperation is appreciated since a majority of the Common 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/ William E. Kulsar
William E. Kulsar
Secretary
<PAGE>
SUSSEX BANCORP
399 State Highway 23
P.O. Box 353
Franklin, NJ 07416
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 28, 2000
Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of Sussex Bancorp (the "Company") will be held at the Bank's
Augusta office, 100 Route 206, Augusta, New Jersey, on June 28, 2000, at 10:30
a.m. for the purpose of considering and voting upon the following matters:
1. The election of the three (3) persons named in the accompanying Proxy
Statement to serve as directors of the Company for a term of three (3)
years and until their successors are elected and duly qualified; and
2. Such other business as shall properly come before the Annual Meeting.
Stockholders of record at the close of business on May 30, 2000 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
William E. Kulsar
Secretary
Franklin, New Jersey
June 5, 2000
IMPORTANT---PLEASE MAIL YOUR PROXY PROMPTLY
<PAGE>
SUSSEX BANCORP
399 State Highway 23
P.O. Box 353
Franklin, NJ 07416
------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 28, 2000
-----------------------------------
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to stockholders of Sussex Bancorp
(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 June 28, 2000, at 10:30 a.m., at the Bank's Augusta office, 100
Route 206, Augusta, New Jersey and at any adjournments thereof. The 1999 Annual
Report to Stockholders, including consolidated financial statements for the
fiscal year ended December 31, 1999, and a proxy card, accompanies this Proxy
Statement, which is first being mailed to record holders on or about June 5,
2000.
Regardless of the number of shares of common stock, no par value, of the
Company ("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 director named in this Proxy Statement.
Other than the matters set forth on 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.
<PAGE>
A proxy may be revoked at any time prior to its exercise by sending a
written notice of revocation to the Company, 399 State Highway 23, P.O. Box 353,
Franklin, New Jersey 07416, Attn: Candace A. Leatham. 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 holder 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 also be solicited personally or by
mail or telephone by directors, officers and other employees of the Company and
The Sussex County State Bank (the "Bank"), its wholly-owned subsidiary, 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 the Company's Common Stock, with each share entitling its owner to one vote
on all matters 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 May 30, 2000, 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
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 1,417,101 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.
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.
-2-
<PAGE>
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 leave the
exact number to be fixed by resolution of the Board of Directors. The Board has
fixed the number of directors at seven (7).
Directors are elected to serve for staggered terms of three years each,
with the term of certain directors expiring each year. Directors serve 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 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 tables set forth, as of the Record Date, the names of the
nominees for election and those directors whose terms continue beyond the Annual
Meeting, 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 or subject to the
requirements of Section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940.
-3-
<PAGE>
<TABLE>
<CAPTION>
Table I
Nominees for 2000 Annual Meeting
-------------------------------------------------------------------------------------------
Name, Age and Position Principal Occupations During Director Term
With the Company Past Five Years Since (1) Expires
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Donald L. Kovach, 65 Chairman, CEO and President of the
Chairman of the Board, CEO Company and the Bank and Attorney 1976 2000
and President at Law
Franklin, New Jersey
-------------------------------------------------------------------------------------------
Joel D. Marvil, 65 President/CEO of Manufacturing Co. 1989 2000
Director Ames Rubber Corporation
Hamburg, New Jersey
-------------------------------------------------------------------------------------------
Mark J. Hontz, 33 Partner 1998 2000
Director Dolan & Dolan, Attorneys at Law
Newton, New Jersey
-------------------------------------------------------------------------------------------
</TABLE>
-----------------
(1) Includes prior service on Board of Directors of the Bank.
<TABLE>
<CAPTION>
Table II
Directors of the Company whose Terms Continue Beyond this Annual Meeting
-------------------------------------------------------------------------------------------
Name, Age and Position Principal Occupations During Director Term
With the Company Past Five Years Since (1) Expires
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Irvin Ackerson, 78 Excavating Contractor
Director Ackerson Contracting Co. 1976 2001
Oak Ridge, New Jersey
-------------------------------------------------------------------------------------------
William E. Kulsar, 63 Certified Public Accountant
Secretary and Director Caristia, Kulsar & Wade, P.A. 1976 2001
Sparta, New Jersey
-------------------------------------------------------------------------------------------
Richard Scott, 64 Dentist, Richard Scott, DDS 1976 2002
Director Franklin, New Jersey
-------------------------------------------------------------------------------------------
Joseph Zitone, 68 General Contractor, Zitone 1984 2002
Director Construction
Montague, New Jersey
-------------------------------------------------------------------------------------------
</TABLE>
----------------
(1) Includes prior service on Board of Directors of the Bank.
-4-
<PAGE>
Board of Directors' Meetings; Committees of the Board
The Board of Directors of the Company held twelve meetings during 1999.
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 1999.
Audit Committee. The Company has 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 auditing department and recommends any
action to be taken in connection therewith. The Audit Committee met three times
during 1999. The Audit Committee consisted during 1999 of Directors Kulsar
(Chairman), Scott, Marvil, Zitone and Hontz.
Compensation Committee. The Company maintains a Compensation Committee
which sets the compensation for the executive officers of the Company. In 1999,
the Compensation Committee consisted of Directors Marvil (Chairman), Ackerson
and Hontz and met three times during 1999.
The Company does not maintain a separate Nominating Committee. The full
Board acts as a Nominating Committee.
Compensation of Directors
Directors of the Company are not compensated for their service on the
Company's Board of Directors. Directors of the Bank, other than full-time
employees of the Bank, receive an annual retainer of $1,000. In addition,
directors who are not full-time employees of the Bank receive a fee of $500 for
each regular monthly Board meeting or special Board meeting attended and $100
for each committee meeting attended. In addition, each director who undertakes a
special project at the request of management of the Bank and with Board of
Directors' approval is paid at an hourly rate of $100 per hour for their time
spent on the project.
The Company maintains the 1995 Stock Option Plan for Non-Employee
Directors (the "Non-Employee Plan), the purpose of which is to assist the
Company in attracting and retaining qualified persons to serve as members of the
Board of Directors. Under the Non-Employee Plan, options to purchase up to a
total of 32,000 shares of Common Stock may be granted at exercise prices which
may not be less than the fair market value of the Common Stock on the date of
grant. Under the Non-Employee Plan, each non-employee director elected at the
1995 Annual Meeting was granted an option to purchase 3,000 shares at $11.25 per
share. In addition, each non-employee director who is elected or re-elected
-5-
<PAGE>
to serve on the Board of Directors at succeeding annual meetings will be granted
an option to purchase 500 shares of Common Stock at the time of such
re-election. The exercise price for options granted in connection with the 1999
annual meeting was $11.75.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
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 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 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 5% of the outstanding Common Stock.
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned (1) of Class
-------------------------------- ----------------------------- ----------------
Irvin Ackerson 29,052(2) 2.04
-------------------------------- ----------------------------- ----------------
Mark J. Hontz 605 .04
-------------------------------- ----------------------------- ----------------
Donald L. Kovach 120,362(3)(4) 8.46
-------------------------------- ----------------------------- ----------------
William E. Kulsar 69,887(4)(5) 4.91
-------------------------------- ----------------------------- ----------------
Joel D. Marvil 41,872(6) 2.94
-------------------------------- ----------------------------- ----------------
Richard Scott 49,578(7) 3.48
-------------------------------- ----------------------------- ----------------
Joseph Zitone 79,942(8) 5.62
-------------------------------- ----------------------------- ----------------
Directors & Principal Officers
as a Group 350,223 24.61
(7 persons)
-------------------------------- ----------------------------- ----------------
Beneficial Owners of more than
5% of Common Stock:
-------------------------------- ----------------------------- ----------------
Ambrose Hamm
P.O. Box E 108,050 7.59
Branchville, NJ 07826
-------------------------------- ----------------------------- ----------------
-6-
<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 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.
(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.
-7-
<PAGE>
Annual Executive Compensation and All Other Compensation
The following table sets forth a summary for the last three (3) fiscal
years of the cash and non-cash compensation awarded to, earned by, or paid to,
the Chief Executive Officer of the Company and each of the four (4) most highly
compensated executive officers whose individual remuneration exceeded $100,000
for the last fiscal year.
SUMMARY COMPENSATION TABLE
Cash and Cash Equivalent Forms
of Remuneration
<TABLE>
<CAPTION>
Annual Compensation Award Payouts
------------------------------------- ------------- -------------------------
Other Securities
Annual Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Options/SARs Payouts Compensation
Position Year ($) ($) ($) (#) ($) ($)
------------------------ ------- -------- ------- ------------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Donald L. Kovach, 1999 159,723 -0- (1) 720 None -0-
Chairman of the ------- -------- ------- ------------- ------------- ------- -------------
Board and CEO
1998 155,546 -0- (1) 945 None -0-
------- -------- ------- ------------- ------------- ------- -------------
1997 139,615 -0- (1) 500 None -0-
------------------------ ------- -------- ------- ------------- ------------- ------- -------------
</TABLE>
(1) During the fiscal years presented, the Company 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 Company 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
Company 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
-8-
<PAGE>
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.
Retirement Plans
The Bank maintains a salary continuation plan for Mr. Kovach. Under this
plan, Mr. Kovach will receive a retirement benefit equal to 35% of his average
final compensation determined by his last five years of employment. Mr. Kovach
will receive this benefit in the event that he works to age 70, or he is
involuntarily discharged prior to age 70 for any reason other than "cause". For
purposes of the Salary Continuation Agreement, cause is defined in the same
manner as under Mr. Kovach's Employment Agreement. Annual retirement payments
are to be made for fifteen years under the Salary Continuation Agreement to Mr.
Kovach or, in the event of his death, to his spouse.
Incentive Stock Option Plan
The Company maintains the 1995 Incentive Stock Option Plan which provides
for options to purchase shares of Common Stock to be issued to key employees of
the Company, the Bank and any other subsidiaries which the Company may acquire
or incorporate in the future. Individual employees to whom options will be
granted under the Plan are selected by the Stock Option Committee of the Board
of Directors. The Stock Option Committee has the authority to determine the
terms and conditions of options granted under the Plan and the exercise price
therefor, which may be no less than the fair market value of the Common Stock.
-9-
<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 % of Total Present
Securities Option/SARs Exercise Value of
Underlying Granted to or Base Option on
Options/SARs Employees in Price Expiration Date of
Name Granted (#)(1) Fiscal Year ($/SH)(2) Date Grant($)(3)
--------------------- --------------- --------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Donald L. Kovach 720 20% 10.38 1/19/2002 7,474
=============================================================================================
</TABLE>
-------------------
(1) As of December 31, 1999, one-half of these options were immediately
exercisable.
(2) The present value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted
average assumptions: dividend yield of 2.0%, expected volatility of 16.0%,
risk free interest rate of 6.6%, and an expected life of five (5) years.
-10-
<PAGE>
The following table sets forth information concerning the fiscal year-end
value of unexercised options held by the executive officers of the Company named
in the table above. No stock options were exercised by such executive officers
during 1999:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
================================================================================================
Number of Securities Value of Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Options/SARs at FY-End ($) (based on
Shares Value FY-End (#) $8.90 per share)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Donald L. Kovach -0- -0- 8,796/1,138 78,284/10,128
================================================================================================
</TABLE>
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 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 Company 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.
-11-
<PAGE>
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
Company, is a majority stockholder of Montague Mini Mall, Inc. The Company
considers the lease terms to be comparable to those which exist with
unaffiliated third parties.
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 Company's independent auditors for the fiscal year ended December 31,
1999 were Radics & Co., L.L.P. ("Radics"). The Company's Board of Directors has
appointed Radics to continue as independent auditors for the Bank and the
Company for the year ending December 31, 2000. Radics 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.
Prior to the year ended December 31, 1998, the Company's financial
statements were audited by Arthur Andersen, LLP ("Andersen"). The Company's
Board of Directors elected to change auditors for the fiscal year ended December
31, 1998. The decision to change auditors was recommended by the Audit Committee
and was approved by the Company's Board of Directors. The change was not a
result of any disagreements with Andersen on any matters of auditing principles
or practices, financial statement disclosure or auditing scope or procedure
which, if not resolved to the satisfaction of Andersen, would have caused it to
make reference to the subject matter of the disagreement in connection with
their reports. The independent auditors report on the consolidated financial
statements for the fiscal year ended December 31, 1997 expressed an unqualified
opinion.
-12-
<PAGE>
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 ten percent 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 ten percent 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 Forms 5 were
required for those persons, the Company 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.
STOCKHOLDER PROPOSALS
Proposals of stockholders to be included in the Company's 2001 proxy
material must be received by the Secretary of the Company no later than December
29, 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 meeting, 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.
-13-
<PAGE>
SUSSEX BANCORP
REVOCABLE PROXY FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 28, 2000
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Candace A. Leatham and Terry H. Thompson
and each of them, with full power of substitution, to vote all of the shares of
Sussex Bancorp (the "Company") standing in the undersigned's name at the Annual
Meeting of Shareholders of the Company, to be held at the Augusta office of The
Sussex County State Bank (the "Bank"), 100 Route 206, Augusta, New Jersey, on
Wednesday, June 28, 2000, at 10:30 A.M., and at any adjournment thereof. The
undersigned hereby revokes any and all proxies heretofore given with respect to
such meeting.
This proxy will be voted as specified below. If no choice is specified,
the proxy will be voted "FOR" Management's nominees to the Board of Directors.
The Board of Directors recommends a vote for its nominees.
1. Election of the following three (3) nominees to each serve on the
Board of Directors for a term of three (3) years and until their
successors are elected and duly qualified: Donald L. Kovach,
Joel D. Marvil, Mark J. Hontz
[_] FOR ALL NOMINEES
TO WITHHOLD AUTHORITY FOR ANY OF THE ABOVE NAMED NOMINEES, PRINT THE
NOMINEE'S NAME ON THE LINE BELOW:
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[_] WITHHOLD AUTHORITY FOR ALL NOMINEES
<PAGE>
2. In their discretion, such other business as may properly come
before the meeting.
Dated: , 2000.
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Signature
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Signature
(Please sign exactly as your name appears. When signing as an executor,
administrator, guardian, trustee or attorney, please give your title as such. If
signer is a corporation, please sign the full corporate name and then an
authorized officer should sign his name and print his name and title below his
signature. If the shares are held in joint name, all joint owners should sign.)
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE.
