SCHEDULE 14A
(RULE 14A-101)
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:
|X| Preliminary Proxy Statement | | Confidential. For use of the
Commission Only(as permitted
by Rule 14a-6(e)(2))
| | Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST MONTAUK FINANCIAL CORP.
-------------------------------------------------
(Name of the Corporation as Specified in Charter)
WILLIAM J. KURINSKY, SECRETARY
-------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box)
|X| No Fee Required
| | Fee computed on table below per Exchange Act Rule 14c-5(g) 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:
- ------------------------------------------------------------------------------
(5) Total Fee Paid:
- ------------------------------------------------------------------------------
| | Fee paid previously with preliminary materials:
- ------------------------------------------------------------------------------
| | 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
form or schedule and the date of filing.
(1) Amount previously paid:
- ------------------------------------------------------------------------------
(2) Form schedule or registration number:
- ------------------------------------------------------------------------------
(3) Filing party:
- ------------------------------------------------------------------------------
(4) Dated filed:
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<PAGE>
FIRST MONTAUK FINANCIAL CORP.
PARKWAY 109 OFFICE CENTER
328 NEWMAN SPRINGS ROAD, RED BANK, NEW JERSEY 07701
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 27, 1997
----------
To the Shareholders of
FIRST MONTAUK FINANCIAL CORP.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of FIRST
MONTAUK FINANCIAL CORP. (the "Corporation" or "Company") will be held at the
Molly Pitcher Inn, 88 Riverside Avenue, Red Bank, New Jersey 07701 on June 27,
1997 at 10:30 a.m., New Jersey time, for the following purposes:
1. To elect two Class III Directors to the Corporation's Board of Directors
to hold office for a period of three years or until their successors are duly
elected and qualified.
2. To consider and act upon a proposal to amend the Company's Certificate
of Incorporation to increase the number of authorized shares of Common Stock
from 15,000,000 shares to 30,000,000 shares.
3. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.
The close of business on May 23, 1997 has been fixed as the record date for
the determination of shareholders entitled to notice of, and to vote at, the
meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you plan to
attend, please complete, date and sign the accompanying proxy and return it
promptly in the enclosed envelope to assure that your shares are represented at
the meeting. If you do attend, you may revoke any prior proxy and vote your
shares in person if you wish to do so. Any prior proxy will automatically be
revoked if you execute the accompanying proxy or if you notify the Secretary of
the Corporation, in writing, prior to the Annual Meeting of Shareholders.
By Order of the Board of Directors
WILLIAM J. KURINSKY, Secretary
Dated: May 27, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
<PAGE>
FIRST MONTAUK FINANCIAL CORP.
PARKWAY 109 OFFICE CENTER
328 NEWMAN SPRINGS ROAD, RED BANK, NEW JERSEY 07701
----------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 27, 1997
----------
This Proxy Statement and the accompanying form of proxy have been mailed on
or about May 27, 1997 to the holders of the Corporation's Common Stock of record
("Record Date") on May 23, 1996 of FIRST MONTAUK FINANCIAL CORP., a New Jersey
corporation (the "Corporation" or "Company") in connection with the solicitation
of proxies by the Board of Directors of the Corporation for use at the Annual
Meeting of Shareholders to be held on June 27, 1997 and at any adjournment
thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
Shares of the Corporation's Common Stock represented by an effective proxy
in the accompanying form will, unless contrary instructions are specified in the
proxy, be voted as follows: FOR the election of the two persons nominated by the
Board of Directors as Class III Directors; FOR the proposal to amend the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 15,000,000 shares to 30,000,000 shares of Common
Stock and for such other matters as may be properly brought before the meeting
and for which the persons named on the enclosed proxies determine, in their sole
discretion to vote in favor.
Any such proxy may be revoked at any time before it is voted. A shareholder
may revoke his or her proxy by notifying the Secretary of the Corporation either
in writing prior to the Annual Meeting, in person at the Annual Meeting, by
submitting a proxy bearing a later date or by voting in person at the Annual
Meeting. Directors shall be elected by an affirmative vote of a plurality of the
votes cast at the meeting. A majority of the shares present and voting at the
meeting is required for approval of all other items being submitted to the
shareholders for their consideration. A shareholder voting through a proxy who
abstains with respect to the election of Directors is considered to be present
and entitled to vote on the election of Directors at the meeting, and is in
effect a negative vote, but a shareholder (including a broker) who does not give
authority to a proxy to vote, or withholds authority to vote, on the election of
Directors shall not be considered present and entitled to vote on the election
of Directors. A shareholder voting through a proxy who abstains with respect to
approval of any other matter to come before the meeting is considered to be
present and entitled to vote on that matter and is in effect a negative vote,
but a shareholder (including a broker) who does not give authority to a proxy to
vote, or withholds authority to vote, on any such matter shall not be considered
present and entitled to vote thereon.
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The Corporation will bear the cost of the solicitation of proxies by the
Board of Directors. The Board of Directors may use the services of its executive
officers and certain directors as well as independent solicitation firms to
solicit proxies from shareholders in person and by mail, telegram and telephone.
Arrangements may also be made with brokers, fiduciaries, custodians, and
nominees to send proxies, proxy statements and other material to the beneficial
owners of the Corporation's Common Stock held of record by such persons, and the
Corporation may reimburse them for reasonable out-of-pocket expenses incurred by
them in so doing.
THE ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED DECEMBER 31,
1996, INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY STATEMENT.
The principal executive offices of the Corporation are located at Parkway
109 Office Center, 328 Newman Springs Road, Red Bank, New Jersey 07701; the
Corporation's telephone number is (908) 842-4700.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Corporation has selected Schneider Ehrlich &
Wengrover LLP, Certified Public Accountants, as independent accountants of the
Corporation for the fiscal year ending December 31, 1997. Shareholders are not
being asked to approve such selection because such approval is not required. The
audit services provided by Schneider Ehrlich & Wengrover LLP, consists of
examination of financial statements, services relative to filings with the
Securities and Exchange Commission, and consultation in regard to various
accounting matters. Representatives of Schneider, Ehrlich & Wengrover LLP, are
expected to be present at the meeting, will have the opportunity to make a
statement if they so desire, and will be available to respond to appropriate
questions.
VOTING SECURITIES AND SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the meeting are the Corporation's common
stock, no par value per share (the "Common Stock"). The presence, in person or
by proxy, of a majority of shares entitled to vote will constitute a quorum for
the meeting. Each share of Common Stock entitles its holder to one vote on each
matter submitted to shareholders. The close of business on May 23, 1997 has been
fixed as the Record Date for the determination of the Common Stock shareholders
entitled to notice of and to vote at the meeting and any adjournment thereof. As
of May 23, 1997, there were 8,937,179 shares of Common Stock issued and
outstanding. Voting of the shares of Common Stock is on a non-cumulative basis.
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<PAGE>
The following table sets forth certain information as of May 23, 1997,
with respect to each Director, each nominee for Director, each executive
officer, all Directors and Officers as a group and the persons (including any
"group" as that term is used in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended), known by the Corporation to be the beneficial owner of
more than five percent of any class of the Corporation's voting securities.
Directors, Officers Amount and Percentage
and 5% Shareholders (1) of Beneficial Ownership (1)
- ----------------------- --------------------------------
Number of Shares Percent
---------------- -------
Herbert Kurinsky 361,518(2) 3.9%
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
William J. Kurinsky 1,368,423(3) 14.5%
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
Brian M. Cohen 76,000(4) *
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
Edward L. Bayarski 72,000(5) *
One Mack Centre Drive
Paramus, NJ 07652
Ward R. Jones, Jr. 80,000(6) *
7 Leda Lane
Guilderland, NY 12084
Norma Doxey 35,000(7) *
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
David I. Portman 100,000(8) 1.1%
19 Pal Drive
Wayside, NJ 07712
All Directors and 2,092,941(2-8) 21.2%
Officers as a group
(7 persons in number)
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* Less than 1%.
(1) Unless otherwise indicated below, each director, officer and 5% shareholder
has sole voting and sole investment power with respect to all shares that
he beneficially owns.
(2) Includes vested and presently exercisable options of Mr. Herbert Kurinsky,
to purchase 360,000 shares of Common Stock.
(3) Includes vested and presently exercisable options of Mr. William J.
Kurinsky to purchase 515,000 shares of Common Stock.
(4) Includes 75,000 shares of Common Stock reserved for issuance upon the
exercise of vested and presently exercisable stock options.
(5) Includes 72,000 shares of Common Stock reserved for issuance upon the
exercise of 8,000 vested and presently exercisable stock options and 64,000
shares non-vested stock option.
(6) Includes 80,000 shares of Common Stock reserved for issuance upon the
exercise of vested and presently exercisable stock options.
(7) Includes 35,000 shares of Common Stock reserved for issuance upon the
exercise of vested and presently exercisable stock options.
(8) Includes 60,000 shares of Common Stock reserved for issuance upon the
exercise of vested and presently exercisable stock options.
CERTAIN REPORTS
No person who, during the fiscal year ended December 31, 1996, was a
Director, officer or beneficial owner of more than ten percent of the
Corporation's Common Stock (which is the only class of securities of the
Corporation registered under Section 12 of the Securities Exchange Act of 1934
(the "Act") (a "Reporting Person") failed to file on a timely basis, reports
required by Section 16 of the Act during the most recent fiscal year. The
foregoing is based solely upon a review by the Corporation of Forms 3 and 4
during the most recent fiscal year as furnished to the Corporation under Rule
16a-3(d) under the Act, and Forms 5 and amendments thereto furnished to the
Corporation with respect to its most recent fiscal year, and any representation
received by the Corporation from any Reporting Person that no Form 5 is
required.
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<PAGE>
It is expected that the following will be considered at the meeting and
action taken thereon.
I. ELECTION OF DIRECTORS
Pursuant to a shareholders meeting on July 21, 1993, the Corporation's
Certificate of Incorporation was amended and restated to provide for the
classification of the Board of Directors into three classes of Directors, each
class as nearly equal in number as possible but not less than one Director, each
to serve for a three-year term, staggered by class. The amended and restated
Certificate of Incorporation further provides that a Director or the entire
Board of Directors may be removed only for cause and only by the affirmative
vote of the holders of at least 70% of the combined voting power of the
Corporation's voting stock, with vacancies on the Board being filled only by a
majority vote of the remaining Directors then in office.
The Board of Directors (sometimes referred to as the "Board") currently
consists of five Directors divided into three classes of two members each. There
is currently a vacancy in Class II resulting from the resignation of Dr. Ross E.
McRonald in November 1994. This vacancy will not be filled at this shareholders
meeting.
The affirmative vote of a plurality of the outstanding shares of Common
Stock entitled to vote thereon, voting together as a single class at the Annual
Meeting of shareholders is required to elect the Directors. All proxies received
by the Board of Directors will be voted for the election as Directors of the
nominees listed below if no direction to the contrary is given. In the event
that any nominee is unable to serve, the proxy solicited hereby may be voted, in
the discretion of the proxies, for the election of another person in his stead.
The Board of Directors knows of no reason to anticipate that this will occur. No
family relationship exists between any executive officer or director except for
Herbert Kurinsky who is the uncle of William J. Kurinsky.
The term of the Class III Directors expires at this Annual Meeting. The
present Directors of the Corporation nominated for election to the Corporation's
Board of Directors at the Annual Meeting are Ward R. Jones Jr. and David I.
Portman.
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The following table sets forth certain information as of the date hereof
with respect to the Directors of the Corporation, including the nominees for
election to the Corporation's Board of Directors at the 1997 Annual Meeting. The
information provided below indicates those Directors whose term of office
expires in 1998 and 1999. The Director whose office expires in 1996 are those
Directors nominated for election at the 1997 Annual Meeting.
<TABLE>
<CAPTION>
POSITION WITH DIRECTOR
CORPORATION; PRINCIPAL CONTINUALLY
NAME OCCUPATION AND AGE SINCE TERM EXPIRES
---- ---------------------- ----------- ------------
CLASS III - NOMINEES
<S> <C> <C> <C>
Ward R. Jones, Jr. Director, Registered Representative 1991 Nominee
with FMSC, 66
David I. Portman Director, President of Triad Property 1993 Nominee
Management, Inc., 56
CLASS I
Herbert Kurinsky Director, President and Chief 1987 1999
Executive Officer of FMFC
and of FMSC and Registered
Options Principal of FMSC, 66
William J. Kurinsky Director, Vice President, Chief 1987 1999
Operating and Chief Financial
Officer and Secretary of FMFC
and of FMSC and Financial and
Operations Principal of FMSC, 37
CLASS II
Norma L. Doxey Director, Vice-President of 1988 1998
Operations of FMSC, 57
</TABLE>
- ----------
Herbert Kurinsky became a Director and President of the Company on November
16, 1987. Mr. Kurinsky is a co-founder of First Montauk Securities Corp. and has
been its President, one of its Directors and its Registered Options Principal
since September of 1986. From March 1984 to August 1986, Mr. Kurinsky was the
President of Homestead Securities, Inc., a New Jersey broker-dealer. From April
1983 to March 1984, Mr. Kurinsky was a branch office manager for Phillips, Appel
& Waldon, a securities broker-dealer. From February 1982 to March 1983, Mr.
Kurinsky was a branch office manager for Fittin, Cunningham and Lauzon, a
securities broker-dealer. From November 1977
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<PAGE>
to February 1982, he was a branch office manager for Advest Inc., a securities
broker-dealer. Mr. Kurinsky received a B.S. degree in economics from the
University of Miami, Florida in 1954.
William J. Kurinsky became Vice President, a Director and Financial and
Operations Principal of the Company on November 16, 1987. He is a co-founder of
First Montauk Securities and has been one of its Vice Presidents, a Director and
its Financial/Operations Principal since September of 1986. Prior to that date,
Mr. Kurinsky was Treasurer, Chief Financial Officer and Vice President of
Operations of Homestead Securities, Inc., a securities broker-dealer. Mr.
Kurinsky received a B.S. from Rutgers University in 1984. He is the nephew of
Herbert Kurinsky.
Norma L. Doxey has been a Director of the Company since December 6, 1988.
Ms. Doxey is the Vice President for Operations and a Registered Representative
with First Montauk Securities Corp. since September, 1986. From August through
September, 1986, she was operation's manager and a Registered Representative
with Homestead Securities, Inc. From July 1984 through August 1985 she held the
same position with Marvest Securities.
Ward R. Jones, Jr. has been a director of the Company since June, 1991.
From 1955 through 1990, Mr. Jones was employed by Shearson Lehman Brothers as a
registered representative, eventually achieving the position of Vice President.
Mr. Jones is currently a registered representative of First Montauk Securities
Corp. on a part-time basis.
David I. Portman has been a director of the Company since June 15, 1993.
From 1978 to the present, Mr. Portman served as the President of Triad Property
Management, Inc., a private corporation which builds, invests in and manages
real estate properties in the State of New Jersey. Mr. Portman was a Director of
Ultra Med, Inc. from 1986 to 1991, a high tech medical equipment manufacturer.
Mr. Portman also serves as a director and officer of Pacific Health
Laboratories, Inc., positions he has held since August 1995.
BOARD MEETINGS, COMMITTEES AND COMPENSATION OF DIRECTORS
During fiscal 1996 3 meetings of the Board of Directors were held and on 2
occasions the Directors took action by unanimous written consent in lieu of a
meeting. Each Director of the Corporation attended all meetings of the Board of
Directors held during fiscal 1996.
The Board of Directors has established an Audit Committee consisting of
three members, which does not include the Chief Financial or Chief Accounting
Officer of FMSC, but includes a "public director" as that term is defined in
Schedule E of the NASD By-Laws. The Audit Committee reviews (i) the Company's
audit functions, (ii) with management, the finances, financial condition, and
interim financial statements of the Company, and (iii) with the Company's
independent auditors, the year end financial statements of the Company. Members
of the Audit Committee do not receive additional compensation for such service.
At present, the committee is composed of Herbert Kurinsky, Ward R. Jones, Jr.,
and David I. Portman. The Audit Committee met on one occasion during fiscal
1996.
In fiscal 1995, the Corporation established a compensation committee,
composed of two non-executive directors, for the purpose of negotiating and
reviewing all employment agreements for executive officers of the Corporation
and for administering the 1992 Plan. At present, Ward R. Jones, Jr. and David I.
Portman are the members of the Compensation Committee. This Committee did not
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meet during fiscal 1996. The Corporation does not have a standing nominating
committee of the Board of Directors.
The Corporation pays Directors who are not employees of the Corporation a
retainer of $250 per meeting of the Board of Directors attended and for each
meeting of a committee of the Board of Directors not held in conjunction with a
Board of Directors meeting. Directors employed by the Corporation are not
entitled to any additional compensation as such. It is anticipated that the
Board of Directors will meet on a quarterly basis in addition to such other
occasions as the business of the Corporation may from time to time require.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock voting at the Annual Meeting is required for the approval of the nominees
for Directors.
THE BOARD OF DIRECTORS DEEMS THE NOMINEES FOR DIRECTORS TO BE IN THE BEST
INTERESTS OF THE CORPORATION AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE "FOR"
APPROVAL THEREOF.
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<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following provides certain information concerning all Plan and Non-Plan
(as defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded to,
earned by, paid or accrued by the Company during the years ended December 31,
1996, 1995 and 1994 to each of the named executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term
------------------- Compensation
--------------
Securities
Underlying
Name & Principal Other Annual Options/ SARs
Position Year Salary Bonus Compensation Granted(1)
- -------- ---- -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Herbert Kurinsky 1996 $175,000 $40,000.00 $41,069.74(2) 0
Chairman, Chief 1995 $101,000 90,000.00 $ 8,594.28(2) 200,000
Executive Officer (3) 1994 $110,000 -- $19,683.80(2) 40,000
William J. Kurinsky 1996 $175,000 0 $11,884.27(4) 0
Vice President, 1995 $121,000 $90,000.00 $39,409.36(4) 200,000
Chief Operating and 1994 $110,000 -- $16,771.87(4) 40,000
Financial Officer
and Secretary (5)
Brian M. Cohen 1996 $100,000.00 0 $17,385.18(6) 0
Vice President and 1995 $ 87,115.44 $15,000.00 $ 6,365.00(6) 5,000
Gen'l Securities 1994 $ 75,000.02 $ 721.16 $23,824.36(6) 20,000
Principal, FMSC
Edward L. Bayarski 1996 $87,307.74 $ 7,255.78 $38,061.02 60,000(7)
President, MISI 1995 $33,653.92 $ 9,000.00 8,639.08 40,000
</TABLE>
- ----------
1) In 1994 the Board of Directors authorized a grant to purchase 40,000 shares
of the Company's Common Stock to each of Messrs. Herbert and William J.
Kurinsky, at exercise prices of $.75 and $.82, respectively. These options
have vested and are exercisable until December 19, 1999. In 1995, the Board
of Directors authorized an additional Grant to purchase 200,000 shares of
the Company's Common Stock each to Herbert Kurinsky and William J. Kurinsky
at an exercise price of $.75 and $.8352 respectively. Mr. Cohen was granted
an option to purchase 5,000 shares at $.75. These options have vested and
are exercisable until November 5, 2000 for Messrs. Kurinsky, and until
December 14, 2000 for Mr. Cohen. See "Aggregated Options/Sar Exercises in
Last Fiscal Year and Fy-End Option/Sar Values."
2) Includes: (i) for 1996, an automobile allowance of $7,511.88, commissions
of $10,511.89, dues of $7,440.00 and loan forgiveness of $15,605.97; (ii)
for 1995, an automobile allowance of $8,594.28, (iii) for 1994, commissions
of $11,089.52 and an automobile allowance of $8,594.28.
3) Mr. Herbert Kurinsky is the beneficial owner of 21,518 shares of the
Company's Common Stock as of December 31, 1996, which shares had a market
value of approximately $20,657 as of that date, without giving effect to
the diminution in value attributable to the restriction on said shares.
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4) Includes: (i) loan forgiveness in the amount of $11,884.27; (ii)
commissions of $39,409.36 and $16,771.87 for the years ended December 31,
1995 and 1994, respectively. Does not include the value of an automobile
purchased by the Company for the exclusive use by Mr. William Kurinsky,
with an annualized lease value of $5,100 as provided by the IRS.
5) Mr. William Kurinsky is the beneficial owner of 1,073,423 shares of the
Company's Common Stock as of December 31, 1996, which shares had a market
value of approximately $1,030,486 as of that date, without giving effect to
the diminution in value attributable to the restriction on said shares.
6) Includes: (i) commissions of $7,578.18, and automobile allowance of
$4,650.00 and loan forgiveness of $5,157.00 for 1996; (ii) commissions of
$2,045.00 and an automobile allowance of $4,320 for 1995; (iii) commissions
of $19,624.36 and an automobile allowance of $4,200 for 1994.
7) Includes: (i) commissions of $38,061.02 for 1996; (ii) commissions of
$8,639.08 for 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table contains information with respect to the named
executive officers concerning options held as of the year ended December 31,
1996.
INDIVIDUAL GRANTS
NUMBER OF % OF TOTAL
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS EMPLOYEES IN OR BASE
NAME GRANTED(#) FISCAL YEAR PRICE ($SH) EXPIRATION DATE
---- ------------ ------------ ----------- ---------------
Edward L. Bayarski 60,000 50% $1.02 10/29/01
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
SHARES NUMBER OF UNEXERCISED
ACQUIRED UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS AS OF OPTIONS AT
NAME EXERCISE REALIZED DECEMBER 31, 1996 DECEMBER 31, 1996(1)
---- -------- -------- ----------------- --------------------
EXERCISABLE/UNEXERCISABLE
<S> <C> <C> <C> <C>
EXERCISABLE/UNEXERCISABLE
Herbert Kurinsky -- -- 440,000 /0 $130,400/$0
William J. Kurinsky -- -- 440,000 /0 $ 98,560/$0
Brian M. Cohen -- -- 100,000/0 $ 34,000/$0
Edward L. Bayarski -- -- 28,000/72,000 $ 7,360/$11,040
</TABLE>
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(1) Based upon the closing bid price of the Company's Common Stock on December
31, 1996 ($.96 per share), less the exercise price for the aggregate number
of shares subject to the options.
EMPLOYMENT AGREEMENTS
In January 1996, the Company entered into new three-year employment
contracts with Herbert Kurinsky, as President and William J. Kurinsky, as
Executive Vice President. The contracts provide for base salaries of $175,000
for the first year of the agreement for each, increasing in each case at the
rate of 10% per year. Each would also be entitled to receive a portion of a
bonus pool consisting of 10% of the pre-tax profits of the Company, to be
determined by the executive management (e.g. Herbert Kurinsky and William J.
Kurinsky). The bonus pool would require a minimum of $500,000 pretax profit per
year in order to become effective. Each is also entitled to receive commissions
at the same rate as paid to other non-affiliate registered representatives of
the Company. They are also entitled to purchase up to 20% of all underwriters
and/or placement agent warrants or options which are granted to First Montauk
Securities Corp. from FMSC upon the same price, terms and conditions afforded to
FMSC as the underwriter or placement agent. Each is further to be furnished,
during the term of his agreement, with health insurance benefits and life
insurance as generally made available to regular full-time employees of the
Company, and reimbursement for expenses incurred on behalf of the Company and
the use of an automobile or in the alternative an automobile allowance. The
contracts also provide for severance benefits equal to three times the previous
year's salary in the event either of the employees is terminated or their duties
significantly changed after a change in management of the Company as defined in
the agreement.
INCENTIVE STOCK OPTION PLAN
In September 1992, the Company adopted the 1992 Incentive Stock Option Plan
(the "1992 Plan"). The 1992 Plan provided for the grant of options to purchase
up to 2,000,000 shares of the Company's Common Stock and is intended for
employees of the Company and consultants. In June 1996 the Company's
shareholders approved an amendment to the 1992 Plan (the "Amended Plan") to
increase the number of shares reserved for issuance from 2,000,000 to 3,500,000.
Under the terms of the Amended Plan, options granted thereunder may be
designated as options which qualify for incentive stock option treatment
("ISOs") under Section 422A of the Code, or options which do not so qualify
("Non-ISOs").
The Amended Plan is administered by the Board of Directors or by a Stock
Option Committee designated by the Board of Directors. The Board or the Stock
Option Committee, as the case may be, has the discretion to determine the
eligible employees to whom, and the times and the price at which, options will
be granted; whether such options shall be ISOs or Non-ISOs; the periods during
which each option will be exercisable; and the number of shares subject to each
option. The Board or Committee has full authority to interpret the Amended Plan
and to establish and amend rules and regulations relating thereto.
Under the Amended Plan, the exercise price of an option designated as an
ISO shall not be less than the fair market value of the Common Stock on the date
the option is granted. However, in the event an option designated as an ISO is
granted to a ten percent stockholder (as defined in the Amended Plan) such
exercise price shall be at least 110% of such fair market value. Exercise prices
of Non-ISO options may be less than such fair market value. The aggregate fair
market value of shares subject to
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options granted to a participant which are designated as ISOs which become
exercisable in any calendar year may not exceed $100,000.
The Board or the Stock Option Committee, as the case may be, may, in its
sole discretion, grant bonuses or authorize loans to or guarantee loans obtained
by an optionee to enable such optionee to pay any taxes that may arise in
connection with the exercise or cancellation of an option. Unless sooner
terminated, the Amended Plan will expire in 2006.
To date, options to purchase a total of 2,331,500 shares of the Company's
Common Stock have been issued under the 1992 Plan and the Amended Plan.
DIRECTOR PLAN
In September 1992, the Company adopted the Non-Executive Director Stock
Option Plan (the "Director Plan"). The Director Plan provides for issuance of a
maximum of 1,000,000 shares of Common Stock upon the exercise of stock options
granted under the Director Plan. Options are granted under the Director Plan
until 2002 to (i) non-executive directors as defined and (ii) members of any
advisory board established by the Company who are not full time employees of the
Company or any of its subsidiaries. The Director Plan provides that each
non-executive director will automatically be granted an option to purchase
20,000 shares each September 1, provided such person has served as a director
for the 12 months immediately prior to such September 1st.
In June 1996, the Company's shareholders approved an amendment to the
Non-Executive Director Stock Option Plan to provide for the elimination of
non-discretionary stock grants to members of any advisory board established by
the Company. An eligible member of an advisory board may receive an option to
purchase shares of the Company's Common Stock under the Director Plan as
provided for in the discretion of the Company's Board of Directors.
The exercise price for options granted under the Director Plan shall be
100% of the fair market value of the Common Stock on the date of grant. Until
otherwise provided in the Stock Option Plan the exercise price of options
granted under the Director Plan must be paid at the time of exercise, either in
cash, by delivery of shares of Common Stock of the Company or by a combination
of each. The term of each option commenced on the date it is granted and unless
terminated sooner as provided in the Director Plan, expires five years from the
date of grant. The Director Plan is administered by a committee of the board of
directors composed of not fewer than three persons who are officers of the
Company (the "Committee"). The Committee has no discretion to determine which
non-executive director or advisory board member will receive options or the
number of shares subject to the option, the term of the option or the
exercisability of the option. However, the Committee will make all
determinations of the interpretation of the Director Plan. Options granted under
the Director Plan are not qualified for incentive stock option treatment. To
date, a total of 220,000 options have been granted to the Company's
Non-Executive members of the Board of Directors, and 2,500 options have been
granted to each of eight members of the Company's Advisory Board.
SENIOR MANAGEMENT PLAN
In 1996 the Board of Directors and shareholders of the Corporation adopted
an equity-based incentive plan for its senior manager employees, the 1996 Senior
Management Incentive Plan (the "1996 Senior Management Plan"). Only senior
managers of the Corporation are eligible to participate
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in the 1996 Senior Management Plan. The Board of Directors believes that
equity-based incentive compensation plays a critical role in retaining and
attracting motivated senior managers. The 1996 Senior Management Plan provides
for the issuance of up to 2,000,000 shares of the Corporation's Common Stock in
connection with the issuance of stock options and other stock purchase rights to
senior managers rendering services to the Corporation. The Plan provides for
four types of awards: stock options, incentive stock rights, stock appreciation
rights and restricted stock purchase agreements (collectively, the "Awards"),
all as described below.
The 1996 Senior Management Plan is intended to attract and retain key
personnel whose performance is expected to have a positive effect on the
Corporation's profits and growth potential by encouraging and assisting those
persons to acquire equity in the Corporation. Directors who are not otherwise
employed by the Corporation and non-senior manager employees are not eligible
for participation in the 1996 Senior Management Plan. Unless sooner terminated,
the 1996 Senior Management Plan will expire on June 28, 2006 and Awards may be
granted at any time or from time to time through such date.
The 1996 Senior Management Plan is administered by the Compensation
Committee of the Board of Directors (the "1996 Senior Management Plan
Administrator"). The 1996 Senior Management Plan Administrator has the
discretion to determine the eligible senior managers to whom Awards will be
granted; the type and the prices at which Awards will be granted; the periods
during which each Award will be granted; and the number of shares subject to
each Award. The 1996 Senior Management Plan Administrator has full authority to
interpret the plan and to establish and amend rules and regulations relating
thereto.
Except as described below, the 1996 Senior Management Plan Administrator
may from time to time amend the 1996 Senior Management Plan as it deems proper
and in the best interests of the Corporation without further approval of the
shareholders.
The Board of Directors and the 1996 Senior Management Plan Administrator
may not amend certain features of the 1996 Senior Management Plan without the
approval of the Corporation's shareholders to the extent such approval is
required for compliance with Section 422 of the Code with respect to ISO's,
Section 162(m) of the Code with respect to Non-ISO's or Rule 16b-3 promulgated
under Section 16 of the Exchange Act with respect to Awards made to individuals
subject to Section 16 of the Exchange Act. Such amendments would include: (a)
increasing the maximum number of shares of Common Stock that may be issued under
the 1996 Senior Management Plan; (b) extending the duration of the 1996 Senior
Management Plan; (c) modifying the requirements as to eligibility for
participation in the 1996 Senior Management Plan; or (d) otherwise increasing
the benefits accruing to participants under the 1996 Senior Management Plan.
Each of the types of Awards that may be granted under the 1996 Senior
Management Plan is discussed below.
Stock Options. Under the terms of the 1996 Senior Management Plan, options
granted thereunder will be designated as options which qualify for incentive
stock option treatment ("ISO's") under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), or options which do not so qualify
("Non-ISO's").
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Under the 1996 Senior Management Plan, the exercise price of an option
designated as an ISO shall not be less than the fair market value of the Common
Stock on the date the option is granted. However, in the event an option
designated as an ISO is granted to a ten percent Shareholder such exercise price
shall be at least 110% of such fair market value. Exercise prices of Non-ISO
options may not be less than 85% of such fair market value. The aggregate fair
market value of shares subject to an option designated as an ISO for which any
participant may be granted such an option in any calendar year, shall not exceed
$100,000 plus any unused carryovers (as defined in Section 422 of the Code) from
a prior year. The "fair market value" will be the price of the Corporation's
Common Stock, the low bid as reported by the National Quotation Bureau, Inc., or
a market make of the Corporation's Common Stock, or if the Common Stock is not
quoted by any of the above, by the Board of Directors acting in good faith.
Options may be granted under the 1996 Senior Management Plan for such
periods as determined by the 1996 Senior Management Plan Administrator; provided
however that no option designated as an ISO granted under the 1996 Senior
Management Plan shall be exercisable over a period in excess of ten years, or in
the case of a ten percent Shareholder, five years. Options may be exercised in
whole at any time or in part from time to time. Options are not transferable
except to the estate of an option holder; provided, however, in the case of a
Non-ISO, and subject to Rule 16b-3 promulgated under Section 16 of the Exchange
Act and prevailing interpretations thereunder by the Staff of the Securities and
Exchange Commission, a recipient of a Non-ISO may, with the consent of the 1996
Senior Management Plan Administrator, designate a named beneficiary of the
Non-ISO in the event of the death of such recipient, or assign such Non-ISO.
Incentive Stock Rights. Incentive stock rights consists of incentive stock
units which give the holder the right to receive, without payment of cash or
property to the Corporation, shares of Common Stock. Each unit is equivalent to
one share of Common Stock and will be issued in consideration for services
performed for the Corporation. If the services of the senior manager with the
Corporation terminate prior to the end of the incentive period relating to the
units awarded, the rights shall thereupon be null and void, except that if
termination is caused by death or permanent disability, the senior manager or
his/her heirs, as the case may be, shall be entitled to receive a pro rata
portion of the shares represented by the units, based upon that portion of the
incentive period which shall have elapsed prior to the death or disability.
Stock Appreciation Rights ("SARs"). SARs may be granted to recipients of
options under the 1996 Senior Management Plan. SARs may be granted
simultaneously with, or subsequent to, the grant of a related option and may be
exercised to the extent that the related option is exercisable, except that no
general SAR (as hereinafter defined) may be exercised within a period of six
months of the date of grant of such SAR and no SAR granted with respect to an
ISO may be exercised unless the fair market value of the Common Stock on the
date of exercise exceeds the exercise price of the ISO. A holder may be granted
general SARs ("general SARs") or limited SARs ("limited SARs"), or both. General
SARs permit the holder thereof to receive an amount (in cash, shares of Common
Stock or a combination of both) equal to the number of SARs exercised multiplied
by the excess of the fair market value of the Common Stock on the exercise date
over the exercise price of the related option. Limited SARs are similar to
general SARs, except that, unless the Administrator (as defined in the Plan)
determines otherwise, they may be exercised only during a prescribed period
following the occurrence of one or more of the following events: (i) the
approval of the shareholders of the Corporation of a consolidation or merger in
which the Corporation is not the surviving corporation, the sale of all or
substantially all the assets of the Corporation, or the liquidation or
dissolution of the Corporation; (ii)
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the commencement of a tender or exchange offer for the Corporation's Common
Stock (or securities convertible into Common Stock) without the prior consent of
the Board; (iii) the acquisition of beneficial ownership by any person or other
entity (other than the Corporation or any employee benefit plan sponsored by the
Corporation) of securities of the Corporation representing 25% or more of the
voting power of the Corporation's outstanding securities; or (iv) if during any
period of two years or less, individuals who at the beginning of such period
constitute the entire Board cease to constitute a majority of the Board, unless
the election, or the nomination for election, of each new director is approved
by at least a majority of the directors then still in office.
The exercise of any portion of either the related option or the tandem SARs
will cause a corresponding reduction in the number of shares remaining subject
to the option or the tandem SARs, thus maintaining a balance between outstanding
options and SARs.
Restricted Stock Purchase Agreements. Restricted stock purchase agreements
provide for the sale by the Corporation of shares of Common Stock at prices to
be determined by the Board, which shares shall be subject to restrictions on
disposition for a stated period during which time the purchase must continue
employment with the Corporation to retain the shares.
Upon expiration of the applicable restricted period and the satisfaction of
any other applicable conditions, all or part of the restricted shares and any
dividends or other distributions not distributed to the holder (the "retained
distributions") thereon will become vested. Any restricted shares and any
retained distributions thereon which do not so vest will be forfeited to the
Corporation. If prior to the expiration of the restricted period a holder is
terminated without cause or because of a total disability (in each case as
defined in the Plan), or dies, then, unless otherwise determined by the
Administrator at the time of the grant, the restricted period applicable to each
award of restricted shares will thereupon be deemed to have expired. Unless the
Administrator determines otherwise, if a holder's employment terminates prior to
the expiration of the applicable restricted period for any reason other than as
set forth above, all restricted shares and any retained distributions thereon
will be forfeited.
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II
PROPOSAL TO INCREASE
THE AUTHORIZED COMMON STOCK
AMENDMENT OF THE CORPORATION'S AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors of the Corporation has unanimously determined that
an amendment to the Corporation's Amended and Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock is
advisable, and accordingly, has voted to recommend an amendment to the
Shareholders for adoption. Shareholders are urged to carefully read the
materials that follow as they involve matters of particular importance. The full
text of the Amendment to the Amended and Restated Certificate of Incorporation
is set forth in Exhibit A to this Proxy Statement.
BACKGROUND OF THE PROPOSED AMENDMENT
The Board of Directors has unanimously approved a proposal (the "Proposal")
to amend the Restated Certificate to authorize an increase in the authorized
Common Stock of the Corporation to 30,000,000 shares from 15,000,000 shares of
Common Stock. As of May 23, 1997, there were 8,937,179 shares of Common Stock
issued and outstanding and approximately 2,121,525 reserved for issuance upon
the exercise of issue and outstanding options, warrants, convertible promissory
notes and other contractual commitments. The Restated Certificate also continues
to authorize the Board of Directors to issue up to 5,000,000 shares of Preferred
Stock in such classes and with such voting rights, dividend rights and powers as
the Board may determine. As of May 23, 1997, there were no classes of Preferred
Stock authorized and no shares of Preferred Stock issued and outstanding.
The Board of Directors has determined it to be in the best interests of the
Corporation and its stockholders to undertake a "rights offering" ("Rights
Offering"). As presently conceived, the Rights Offering will consist of an
offering to the Company's shareholders of one right for each share of common
stock owned by the Company's shareholders. Three rights will entitle the holder
thereof to subscribe for one unit at a price of $.45 per unit. An aggregate of
2,640,035 units will be issued to shareholders assuming all of the rights are
exercised. Each unit is comprised of one Class A Redeemable Common Stock
Warrant, one Class B Redeemable Common Stock Warrant and one Class C Redeemable
Common Stock Warrant. the Class A Redeemable Common Stock Purchase Warrants (the
"Class A Warrants"), entitle the holder thereof to purchase during the three
years commencing on the date of initial issuance one share of Common Stock of
the Company (the "Class A Warrant Shares"), at an exercise price of $3.00 per
share, subject to adjustment in certain circumstances. Second, the Class B
Redeemable Common Stock Purchase Warrants (the "Class B Warrants"), entitle the
holder thereof to purchase during the five years commencing on the date of
initial issuance one share of Common Stock of the Company (the "Class B Warrant
Shares"), at an exercise price of $5.00 per share, subject to adjustment in
certain circumstances. Last, the Class C Redeemable Common Stock Purchase
Warrants (the "Class C Warrants"), entitle the holder thereof to purchase during
the seven years commencing on the date of initial issuance one share of Common
Stock of the Company (the "Class C Warrant Shares"), at an exercise price of
$10.00 per share, subject to adjustment in certain circumstances. The Warrants
will be separately transferable immediately. No separate securities for the
Units will be issued.
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The Company may redeem the Warrants, at any time at $.05 per Warrant, upon
thirty (30) days' prior written notice, if the closing bid price of the
Company's Common Stock for the ten consecutive trading days ending within ten
days of the date of the notice of redemption is not less than: (a) for the Class
A Warrants, $5.00 per share, (b) for the Class B Warrants $7.00 per share, and
(c) for the Class C Warrants, $12.00 per share.
Upon completion of the Rights Offering, Stockholders who do not fully
exercise their Rights will own a smaller proportional interest in the Company
than would otherwise be the case.
The Rights Offering cannot be consummated without approval of the amendment
to the Certificate of Incorporation to increase the number of authorized shares
of Common Stock. If all of the rights are subscribed and the underlying
warrrants exercised, the Company would require an additional 7,920,105 shares of
Common Stock available for issuance. As of May 23, 1997 the Company had
8,937,179 shares outstanding, with 2,121,525 shares of Common Stock reserved for
outstanding options and warrrants and an additional 3,598,475 shares for
issuance in connection with the Company's stock option plans.
There can be no assurance that the Rights Offering will be consummated, or
if consummated, will be on the terms described above. The Rights Offering is
subject to registration with the Securities and Exchange Commission ("SEC") and
the various states. There can be no assurance that the transaction will be
approved by the SEC, or if approved, will not require alteration of the terms.
The Board of Directors unanimously approved the amendment to the Amended
and Restated Certificate of Incorporation (the "Amendment"), and directed that
same be submitted to the Shareholders for their approval, which would increase
the number of authorized shares of Common Stock after such Amendment to
30,000,000 shares. The additional shares of Common Stock being authorized by the
Amendment would enable the Corporation to proceed with the proposed Rights
Offering, as well as other financing opportunities which may arise in the
future, without the delay and expense associated with holding a special meeting
of Shareholders at the time such additional shares are needed, except as
required by any regulatory authority. Other than the contemplated Rights
Offering described above, the Corporation has no current plans, or commitments
for the issuance of any Common Stock. However, the Board may consider additional
equity transactions involving the sale of Preferred Stock or Common Stock.
Accordingly, the Board of Directors considers it desirable to have additional
Common Stock available to provide the Corporation with increased flexibility in
structuring possible future financings and acquisitions and in meeting other
corporate needs which may arise.
AMENDMENT PROPOSED BY THE BOARD OF DIRECTORS
The full text of the Amendment to Article THIRD Clause (A) is annexed
hereto as Exhibit A to this Proxy Statement. The following description of the
amendment is qualified in its entirety by reference to Article THIRD Clause (A)
set forth in Exhibit A. The Corporation's Amended and Restated Certificate of
Incorporation currently authorizes the issuance of 15,000,000 shares of Common
Stock and 5,000,000 shares of Preferred Stock. As of May 23, 1997, the
Corporation had outstanding 8,937,179 shares of Common Stock and no outstanding
shares of Preferred Stock. As of such date, there was also reserved for issuance
upon the conversion or exercise of various outstanding securities of the
Corporation approximately 2,121,525 shares of Common Stock, leaving only
approximately
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<PAGE>
3,941,296 shares authorized, unissued and unreserved shares of Common Stock
available for future issuances.
The number of authorized shares of Common stock after the Amendment will
represent an increase of 15,000,000 shares of Common Stock over and above the
15,000,000 shares of Common Stock currently authorized. There would be no
increase in the number of shares of Preferred Stock authorized.
CONSEQUENCES OF THE AMENDMENT
Shareholders should note that certain disadvantages may result from the
adoption of the Amendment. Such disadvantages may include a significant
reduction in their interest in the Corporation with respect to earnings per
share, voting, liquidation value and book and market value per share if the
additional authorized shares of Common Stock are issued. While not having such
purpose, the amendment could have the effect of deterring a future takeover
attempt which the majority of Shareholders may deem to be in their best
interest. Such event would arise if the Board of Directors deemed it in the best
interest of the Corporation to issue an option to purchase Common Stock, a
security convertible into shares of Common Stock or shares of Common Stock to a
party friendly to management in an amount that would make it less likely for an
unfriendly purchase to attempt an acquisition of shares by tender offer or other
purchase. If a majority in voting power of the current Shareholders desire a
takeover or change in control of the Corporation, and if such takeover or change
were opposed by the Board of Directors, the additional shares of Common Stock
could possibly be used by the Corporation to thwart the desires of the majority.
The Board of Directors is also able to issue Preferred Stock without any
further stockholder approval. The issuance of Preferred Stock may create a class
of securities having voting, dividend and liquidation rights superior to the
Common Stock including the power to elect a majority of the Board of Directors.
Thus, the holders of Preferred Stock may have the right to elect a majority of
the Board of Directors and thereby control and management of the Corporation.
Further, the issuance of additional Preferred Stock may result in a dilution of
the net income per share and net book value of the Common Stock currently
outstanding. In the event the Preferred Stock is issued with the right to
convert the Preferred Stock into shares of Common Stock, additional dilution of
voting rights, net income per share and book value of the Common Stock may occur
upon such conversion.
Members of the Board of Directors may have a conflict in proposing this
amendment, and such amendment may operate to the disadvantage of Shareholders,
by reducing the likelihood of a hostile takeover of the Corporation which may
result in a change in the membership of the Board of Directors. The Board of
Directors would also retain the power to grant to the holders of Preferred Stock
the right to elect a majority of the Board of Directors.
The affirmative votes of the holders of a majority of the shares of the
Corporation's Common Stock issued and outstanding on the Record Date are
required to approve this proposal. The directors and officers of the Corporation
own of record beneficially, directly and indirectly 2,092,941 shares of the
Corporation's Common Stock, constituting approximately 21.2% of such shares
outstanding on the Record Date. All of the officers and directors of the
Corporation have agreed to vote in favor of approval of this proposal.
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<PAGE>
THE BOARD OF DIRECTORS DEEMS THE PROPOSAL TO BE IN THE BEST INTERESTS OF
THE CORPORATION AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL
THEREOF.
FINANCIAL INFORMATION
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1996 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT THE ACCOMPANYING EXHIBITS, WHICH EXHIBITS SHALL BE
FURNISHED TO SHAREHOLDERS, IF REQUESTED, UPON PAYMENT TO THE CORPORATION OF
REASONABLE EXPENSES INCLUDING PHOTOCOPYING AND MAILING EXPENSES, TO SHAREHOLDERS
WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR SENT TO WILLIAM J. KURINSKY,
SECRETARY, FIRST MONTAUK FINANCIAL CORP., 328 NEWMAN SPRINGS ROAD, RED BANK, NEW
JERSEY 07701. Each such request must set forth a good faith representation that
as of May 23, 1997 the person making the request was the beneficial owner of
Common Shares of the Corporation entitled to vote at the 1997 Annual Meeting of
Shareholders.
IV. OTHER BUSINESS
As of the date of this proxy statement, the foregoing is the only business
which the Board of Directors intends to present, and is not aware of any other
matters which may come before the meeting. If any other matter or matters are
properly brought before the Annual Meeting, or any adjournments thereof, it is
the intention of the persons named in the accompanying form of proxy to vote the
proxy on such matters in accordance with their judgment.
Proposals of shareholders intended to be presented at the Corporation's
1998 Annual Meeting of Shareholders must be received by the Corporation on or
prior to February 28, 1998 to be eligible for inclusion in the Corporation's
proxy statement and form of proxy to be used in connection with the 1998 Annual
Meeting of Shareholders.
By Order of the Board of Directors
WILLIAM J. KURINSKY, Secretary
Dated: May 27, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN YOUR
PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF IT IS MAILED
IN THE UNITED STATES OF AMERICA.
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20
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EXHIBIT A
TO
PROXY STATEMENT OF FIRST MONTAUK FINANCIAL CORP
TEXT OF AMENDMENT TO
RESTATED CERTIFICATE OF INCORPORATION
THIRD: Capital Stock
(A) Authorized Capital Stock, The total number of shares of all classes of
stock which this Corporation shall have authority to issue is THIRTY- FIVE
MILLION (35,000,000) shares, consisting of THIRTY MILLION (30,000,000) shares of
Common Stock, no par value per share (hereinafter, the "Common Stock"), and FIVE
MILLION (5,000,000) shares of Preferred Stock, $.10 par value per share
(hereinafter, the "Preferred Stock").
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<PAGE>
FIRST MONTAUK FINANCIAL CORP.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 27, 1997
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Herbert Kurinsky and William J. Kurinsky, and
each of them, proxies, with full power of substitution to each, to vote all
Common Shares of FIRST MONTAUK FINANCIAL CORP., owned by the undersigned at the
Annual Meeting of Shareholders of FIRST MONTAUK FINANCIAL CORP. to be held on
June 27, 1997 and at any adjournments thereof, hereby revoking any proxy
heretofore given. The undersigned instructs such proxies to vote:
I. Election of Directors
FOR all nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for the nominee
to the contrary be|_|) listed below |_|
Class III Directors to Serve until year 2000 Annual Meeting
Ward R. Jones Jr. David I. Portman
(Instruction: To withhold authority for any individual nominee, strike a line
through the nominee's name in the list below)
II. Proposal to amend the Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 15,000,000 shares to 30,000,000
shares.
For |_| Against |_| Abstain |_|
and to vote upon any other business as may properly come before the meeting
or any adjournment thereof, all as described in the Proxy Statement dated May
27, 1997, receipt of which is hereby acknowledged.
(Continued and to be signed on the reverse side)
<PAGE>
Either of the proxies or their respective substitutes, who shall be present
and acting shall have and may exercise all the powers hereby granted.
The shares represented by this proxy will be voted (i) FOR the election of
two Class III directors, and (ii) FOR the proposed amendment to the Certificate
of Incorporation to increase the number of authorized shares of Common Stock to
30,000,000 shares unless contrary instructions are given.
Said proxies will use their discretion with respect to any other matters
which properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN
AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE.
Dated:___________________________, 1997
---------------------------------------
---------------------------------------
(Please date and sign exactly as name
appears at left. For joint accounts, each
joint owner should sign, Executors,
administrators, trustees, etc., should
also so indicate when signing.)
