STEWARDSHIP FINANCIAL CORPORATION
630 GODWIN AVENUE
MIDLAND PARK, NEW JERSEY 07432-1405
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 7, 2002
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Stewardship Financial Corporation
(the "Corporation") will be held at the main office of the Corporation, 630
Godwin Avenue, Midland Park, New Jersey, on May 7, 2002, at 7:00 P.M. to vote on
the following proposals:
1. To elect the four (4) Directors as named in the attached Proxy for
three-year terms.
2. To consider and vote upon an amendment to the Corporation's
Certificate of Incorporation to authorize 2,500,000 shares of a new
class of "blank check" preferred stock.
3. To consider and vote upon an amendment to the Corporation's 1995 Stock
Option Plan to permit options to be granted thereunder to all full
time employees of the Corporation.
4. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 29, 2002, are
entitled to notice of and to vote at the Annual Meeting. Whether or not you plan
to attend the Annual Meeting, it is requested that the enclosed proxy be
executed and returned to our transfer agent, Registrar and Transfer Company, 10
Commerce Drive, Cranford, NJ 07016, in the envelope provided.
By Order of the Board of Directors
ROBERT J. TURNER
----------------------------------
Corporate Secretary
April 8, 2002
STEWARDSHIP FINANCIAL CORPORATION
630 GODWIN AVENUE
MIDLAND PARK, NEW JERSEY 07432-1405
------------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 7, 2002
------------------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to shareholders of Stewardship
Financial Corporation (the "Corporation") in connection with the solicitation by
the Board of Directors of proxies to be used at the Annual Meeting of
Shareholders and at any adjournment of the meeting. You are cordially invited to
attend the annual meeting, which will be held at the Corporation's main office
at 630 Godwin Avenue, Midland Park, New Jersey, on Tuesday, May 7, 2002. The
2001 Annual Report to shareholders, including consolidated financial statements
for the fiscal year ended December 31, 2001, and a proxy card accompany this
Proxy Statement, which is first being mailed to shareholders on or about April
8, 2002.
Regardless of the number of shares of common stock owned, it is important
that you vote by completing the enclosed proxy card and returning it signed and
dated in the enclosed postage paid envelope. Shareholders are urged to indicate
their vote in the space provided on the proxy card. Proxies solicited by the
Board of Directors of the Corporation will be voted in accordance with the
direction given therein. Where no instructions are indicated, signed proxy cards
will be voted "FOR" the election of each of the nominees for directors named in
the Proxy Statement; "FOR" the amendment to the Corporation's Certificate of
Incorporation to authorize 2,500,000 shares of a new class of "blank check"
preferred stock; and "FOR" the amendment to the Corporation's 1995 Stock Option
Plan to permit options to be granted thereunder to all full-time employees of
the Corporation. Should any other matters be properly presented at the annual
meeting for consideration, such as consideration of a motion to adjourn the
meeting to another time, the persons named as proxies will have discretion to
vote on those matters according to their best judgment to the same extent as the
person delivering the proxy would be entitled to vote.
Other than the matter set forth in the attached Notice of Annual Meeting of
Shareholders, the Board of Directors knows of no additional matters that may be
presented for consideration at the Annual Meeting.
A proxy may be revoked at any time prior to its exercise by sending a
written notice of revocation to Registrar and Transfer Company, 10 Commerce
Drive, Cranford, NJ 07016. A proxy filed prior to the Annual Meeting may be
revoked by delivering to the Corporation a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person.
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However, if you are a shareholder 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 Corporation. Proxies may be solicited personally or by mail
or telephone by directors, officers and other associates of the Corporation
without additional compensation therefore. The Corporation will also request
persons, firms and corporations holding shares in their names, or in the name of
their nominees, which are beneficially owned by others, to send proxy material
to and obtain proxies from such beneficial owners, and will reimburse such
holders for their reasonable expenses in doing so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares
of common stock, no par value, of the Corporation ("Common Stock") with each
share entitling its owner to one vote on the 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 March 29, 2002, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Annual Meeting
or any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 1,841,745 shares.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. In the event that there are not
sufficient votes for a quorum, or to approve or ratify any matter being
presented at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit the further solicitation of proxies.
As to the election of directors, the proxy card being provided by the Board
of Directors enables a stockholder to vote "FOR" the election of the nominees
proposed by the Board of Directors, or to "WITHHOLD AUTHORITY" to vote for one
or more of the nominees being proposed. Under New Jersey law and the
Corporation's bylaws, directors are elected by a plurality of votes cast,
without regard to either broker non-votes, or proxies as to which authority to
vote for one or more of the nominees being proposed is withheld.
PROPOSAL #1 -- ELECTION OF DIRECTORS
DIRECTOR INFORMATION
The Corporation's Certificate of Incorporation and its bylaws authorize a
minimum of 5 and a maximum of 25 directors, but leave the exact number to be
fixed by resolution of the Board of Directors. The Board of Directors has fixed
the current number of directors at 10.
Directors elected at this annual meeting will be elected to serve for a
term of 3 years through April, 2005, and until their successors are duly elected
and qualified. The Board of Directors has been divided into 3 classes and
directors are elected to serve in terms of 3 years.
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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 of Directors has no reason
to believe that any of the named nominees is not available or will not serve if
elected. Unless authority to vote for the nominee is withheld, it is intended
that the shares represented by the enclosed proxy card, if executed and
returned, will be voted FOR the election of the nominees proposed by the Board
of Directors.
The Board of Directors recommends that you vote FOR the election of the
nominees named in this proxy statement.
INFORMATION WITH RESPECT TO THE NOMINEES
The following table sets forth the names of the nominees for election for a
term ending 2005, their ages, a brief description of their business experience
over the last five (5) years, including present occupations, the year in which
each became a director of the Corporation or the Atlantic Stewardship Bank
("Bank") and the expiration of their current term. No nominee is a director of
another corporation registered pursuant to Section 12 of the Securities Exchange
Act of 1934.
NAME, AGE AND PRINCIPAL OCCUPATIONS DURING DIRECTOR EXPIRATION
POSITION WITH CORPORATION PAST FIVE YEARS SINCE(1) OF TERM
------------------------- ----------------------------- --------- -----------
William C. Hanse, 67.................... Partner, Hanse & Hanse 1985 2002
Director (attorney at law)
Margo Lane, 51.......................... Corporate Communications Manager, Garden State 1994 2002
Director Paper Company LLC; and Corporate Secretary, Lane
Electric, Inc. (manufacture newsprint;
electrical)
Arie Leegwater, 68...................... Proprietor, Arie Leegwater Associates 1985 2002
Director and (contractor)
Chairman of the Board
John L. Steen, 64....................... President, Steen Sales, Inc.; 1985 2002
Director and President, Dutch Valley Throwing Co. (textiles)
Vice Chairman of the Board
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(1) Includes prior service on the Board of Directors of the Bank, prior to the
formation of the Corporation in 1997.
4
INFORMATION WITH RESPECT TO THE REMAINING DIRECTORS.
The following table sets forth the names of the remaining directors, their
ages, a brief description of their recent business experience, including present
occupations, and the year in which each became a director of the Corporation or
the Bank and the expiration of their current terms. No nominee is a director of
another corporation registered pursuant to Section 12 of the Securities Exchange
Act of 1934.
NAME, AGE AND PRINCIPAL OCCUPATIONS DURING DIRECTOR EXPIRATION
POSITION WITH CORPORATION PAST FIVE YEARS SINCE(2) OF TERM
------------------------- ----------------------------- -------- ----------
William Almroth, 71............... Retired; formerly Senior Vice President, Sony 1993 2004
Director Music Corporation
Harold Dyer, 74................... Retired, formerly President, 1985 2004
Director White Laundry, Inc.
Abe Van Wingerden, 65............. President, Abe Van Wingerden Co., Inc. T/A Van 2001 2004
Director Wingerden Farms
Robert J. Turner, 61.............. President, The Turner Group 1985 2003
Director (insurance)
William J. Vander Eems, 52........ President, William Van Der Eems, Inc. 1991 2003
Director (contractor)
Paul Van Ostenbridge 49........... President and 1985 2003
Director Chief Executive Officer,
Stewardship Financial
Corporation and
Atlantic Stewardship Bank
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(2) Includes prior service on the Board of Directors of the Bank, prior to the
formation of the Corporation in 1997.
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BOARD AND COMMITTEE MEETINGS
The Board of Directors of the Corporation held 13 meetings during 2001. The
Board of Directors holds regularly scheduled meetings each month and special
meetings as circumstances require. All of the Directors of the Corporation
attended at least 75% of the total number of Board and committee meetings held
during 2001. Each Corporation Director is also a Bank Director.
REPORT OF THE AUDIT COMMITTEE
The Corporation and the Bank have a standing Audit Committee of the Board
of Directors. The Audit Committee met 5 times during 2001. In 2001, the Audit
Committee consisted of Directors Dyer (Chairman), Almroth, Leegwater, Steen and
Turner. The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The audit functions of the
Audit Committee are to: (i) monitor the integrity of the Corporation's financial
reporting process and systems of internal controls; (ii) monitor the
independence and performance of the Corporation's independent external audit and
internal audit functions; (iii) provide avenue of communication among the
independent auditor, management, internal auditors, and the Board of Directors;
and (iv) encourage the adherence to, and continuous improvement of, the
Corporation's policies, procedures, and practices at all levels. The Audit
Committee also reviews and evaluates the recommendations of the independent
certified public accountant, receives all reports of examination of the
Corporation and the Bank by appropriate regulatory agencies, analyzes such
regulatory reports, and reports to the Board of Directors the results of its
analysis of the regulatory reports. In addition, the Audit Committee receives
reports directly from the Corporation's internal auditors and recommends any
action to be taken in connection therewith.
We meet with management periodically to consider the adequacy of the
Corporation's internal controls and the objectives of its financial reporting.
We discuss the matters with the independent auditors, internal auditors, and
appropriate Corporation financial personnel.
We regularly meet with both the independent auditors and the internal
auditors each of whom has unrestricted access to the committee.
We also recommend to the Board of Directors the appointment of the
independent auditors and review periodically their performance and independence
from management.
The Directors who serve on the committee are all "independent" for the
purposes of Rule 4200(a)(15) of the NASD's listing standards. That is, the Board
of Directors has determined that none of us has a relationship with Stewardship
Financial Corporation and the Bank that may interfere with our independence from
Stewardship Financial Corporation and its management.
The Board has adopted a written charter setting out the audit related
functions the committee is to perform.
Management has primary responsibility for the Corporation's financial
statements and the overall reporting process, including the Corporation's system
of internal controls.
The independent auditors audit the financial statements prepared by
management, express an opinion as to whether those financial statements fairly
present the financial position, results of
6
operations, and cash flows of the Corporation in conformity with generally
accepted accounting principles and discuss with us any issues they believe
should be raised with us.
This year, we reviewed the Corporation's audited financial statements and
met with both management and KPMG, LLP the Corporation's independent auditors,
to discuss those financial statements. Management has represented to us that the
financial statements were prepared in accordance with generally accepted
accounting principles.
We have received from and discussed with KPMG, LLP the written disclosure
and the letter required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees). We discussed with KPMG, LLP
such firm's independence. We also discussed with KPMG, LLP any matters required
to be discussed by Statement on Auditing Standards No. 61 (Communication with
Audit Committees).
Based on these reviews and discussions, we recommended to the Board of
Directors that the Corporation's audited financial statements be included in the
Corporation's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2001.
Submitted by:
Harold Dyer, Chairman
William Almroth
Arie Leegwater
John L. Steen
Robert J. Turner
Audit Committee Stewardship Financial Corporation
NOMINATING COMMITTEE The Corporation also maintains a Nominating Committee.
The Nominating Committee makes nominations for candidates to serve on the
Corporation's Board of Directors. In 2001, the Nominating Committee consisted of
Directors Dyer (Chairman) and Van Wingerden. The Nominating Committee met twice
during 2001.
PERSONNEL COMMITTEE The Bank maintains a Personnel Committee, which sets
the compensation for the executive officers of the Corporation and the Bank. In
2001, the Personnel Committee consisted of Directors Almroth (Chairman), Lane,
Leegwater, Turner and Van Ostenbridge. The Personnel Committee met 4 times
during 2001.
STOCK COMPENSATION COMMITTEE The Corporation maintains a Stock Compensation
Committee, which recommends the issuance of stock options in accordance with the
1995 Employee Stock Option Plan and stock bonuses in accordance with the Stock
Bonus Plan. During 2001 the Stock Compensation Committee consisted of Directors
Almroth (Chairman), Lane and Vander Eems. The Stock Compensation Committee met
once during 2001.
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STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Common Stock as of February 28, 2002, by (i) each person who is
known by the Corporation to own beneficially more than five percent (5%) of the
issued and outstanding Common Stock, (ii) each director and nominee for director
of the Corporation, (iii) each executive officer of the Corporation as described
in this Proxy Statement under the caption "Executive Compensation" and (iv) all
directors and executive officers of the Corporation as a group. Other than as
set forth in this table, the Corporation is not aware of any individual or
group, which holds in excess of five percent (5%) of the outstanding common
stock.
NUMBER OF SHARES PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1)(3) OF CLASS
------------------------ ------------------------ --------
William Almroth .......................... 98,815 (2) 5.24
Harold Dyer .............................. 24,551 (3) 1.30
William C. Hanse ......................... 44,310 (4) 2.35
Margo Lane ............................... 16,657 (5) *
Arie Leegwater ........................... 24,995 (6) 1.33
John L. Steen ............................ 46,074 2.44
Robert J. Turner ......................... 47,290 (7) 2.52
William J. Vander Eems ................... 70,871 (8) 3.76
Paul Van Ostenbridge ..................... 21,983 (9) 1.17
Abe Van Wingerden ........................ 73,467 (10) 3.90
Julie E. Holland ......................... 4,322 (11) *
M. Bernard Joustra ....................... 6,044 (12) *
----- ----
Directors and Executive Officers
of the Corporation and Bank as a group
(12 persons) ........................... 479,379 24.01
NOTES:
* Indicates less than 1% of the outstanding shares of the Corporation's
Common Stock.
----------
(3) Per share data and share number data stated within this Proxy Statement
have been restated to reflect previous stock splits and dividends.
8
(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 (i) owned by a spouse, minor children or by
relatives sharing the same home, (ii) owned by entities owned or controlled
by the named person and (iii) that 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 59,212 shares held by Mr. Almroth's spouse in her own name. Mr.
Almroth disclaims beneficial ownership of the interest held by his spouse.
(3) Includes 3,729 shares purchasable pursuant to stock options exerciseable
within 60 days of February 28, 2002.
(4) Includes 18,378 shares held jointly by Mr. Hanse and his spouse, and 4,091
shares held by Mr. Hanse's spouse in her own name. Mr. Hanse disclaims
beneficial ownership of the interest held by his spouse.
(5) Includes 4,167 shares held jointly by Mrs. Lane and her spouse, 286 shares
held by Mrs. Lane's spouse as custodian for their minor children, and 7,457
shares purchasable pursuant to stock options exerciseable within 60 days of
February 28, 2002. Mrs. Lane disclaims beneficial ownership of the interest
held by her spouse.
(6) Includes 6,137 shares held jointly by Mr. Leegwater and his spouse, 8,176
shares held by trusts of which Mr. Leegwater is the trustee. Mr. Leegwater
disclaims beneficial ownership of the interest owned by his spouse.
(7) Includes 9,315 shares held jointly by Mr. Turner and his spouse, 1,208
shares held by Mr. Turner's spouse in her own name, and 7,457 shares
purchasable pursuant to stock options exerciseable within 60 days of
February 28, 2002. Mr. Turner disclaims beneficial ownership of the
interest held by his spouse.
(8) Includes 17,092 shares held by Mr. Vander Eems' spouse in her own name, and
5,272 shares held by Mr. Vander Eems as custodian for his children. Mr.
Vander Eems disclaims beneficial ownership of the interest held by his
spouse.
(9) Includes 15,260 shares purchasable pursuant to stock options exerciseable
within 60 days of February 28, 2002, but not the 5,438 shares potentially
available in the future by exercise of his stock options not exerciseable
within 60 days of February 28, 2002.
(10) Includes 65,095 shares held by Mr. Van Wingerden and his spouse, and 4,882
shares purchasable pursuant to stock options exerciseable within 60 days of
February 28, 2002. Mr. Van Wingerden disclaims beneficial ownership of the
interest held by his spouse.
(11) Includes 4,069 shares purchasable pursuant to stock options exerciseable
within 60 days of February 28, 2002, but not the 1,451 shares potentially
available in the future by exercise of options not exercisable within 60
days of February 28, 2002.
(12) Includes 1,875 shares held jointly with Mr. Joustra and his spouse, and
4,179 shares purchasable pursuant to stock options exerciseable within 60
days of February 28, 2002, but not the 1,451 shares potentially available
in the future by exercise of his stock options not exercisable within 60
days of February 28, 2002. Mr. Joustra disclaims beneficial ownership of
the interest held by his spouse.
9
DIRECTOR'S COMPENSATION
DIRECTORS' FEES. Directors of the Corporation and the Bank, other than
full-time associates of the Corporation and the Bank, receive fees of $875 per
Board meeting attended, with the exception of the Chairman of the Board of
Directors who receives $1,675 per meeting attended. Directors of the Corporation
and the Bank, other than full time associates of the Corporation and the Bank,
also receive a fee of $175 per committee meeting attended.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
The Corporation maintains the Stewardship Financial Corporation 1995 Stock
Option Plan for Non-Employee Directors (the "Non-Employee Plan"). Under the
Non-Employee Plan, 82,047 shares of Common Stock were reserved for issuance.
Non-Employee Directors of the Corporation, the Bank and any other subsidiaries
that the Corporation may acquire or incorporate will participate in the
Non-Employee Plan. Each participant in the Non-Employee Plan will automatically
receive an option to purchase 7,457 shares of Common Stock effective as of the
date such participant commences his/her service on the Board of Directors. No
options may be exercised more than ten years after the date of its grant. The
purchase price of the shares of Common Stock subject to options under the
Non-Employee Plan will be 95 percent of the fair market value on the date such
option is granted. This plan expires August, 2002. 74,571 stock options were
granted August, 1997, and 7,457 stock options were granted January, 2001.
The Corporation maintains the Stewardship Financial Corporation 2001 Stock
Option Plan for Non-Employee Directors (the "2001 Stock Option Plan"). Under the
2001 Stock Option Plan, 63,000 shares of Common Stock have been reserved for
issuance. Of this total, 5,250 options were issued to each Non-Employee Director
on May 8, 2001. Options are exercisable 20 percent each year for five years
beginning May 8, 2002. Individuals who become Non-Employee Directors on or after
May 8, 2001, will be granted options in accordance with the table as set forth
in the 2001 Stock Option Plan. No options may be exercised more than ten years
after the date of its grant. The purchase price of the shares of Common Stock
subject to options under the 2001 Stock Option Plan is 100 percent of the fair
market value on the date such option is granted. This plan expires May, 2011.
COMPENSATION OF EXECUTIVE OFFICERS
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Bank maintains a Personnel Committee that oversees executive
compensation issues. The compensation payable to the Bank's executive officers
is determined by the Board of Directors of the Bank upon recommendation of the
Personnel Committee, without the participation of Mr. Van Ostenbridge on any
compensation matter related directly to him.
This report on executive compensation shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, or under the
Securities Exchange Act of 1934, except to the extent that the Corporation
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
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EXECUTIVE COMPENSATION POLICY The Bank's policy is to compensate its
executives fairly and adequately for the responsibility assumed by them for the
success and direction of the Corporation and the Bank, the effort expended in
discharging that responsibility and the results achieved directly or indirectly
from each executive's performance. "Fair and adequate compensation" is
established after careful review of (i) the Corporation's and the Bank's
earnings; (ii) the Corporation's and the Bank's performance as compared to other
companies of similar size and market area; and (iii) comparison of what the
market demands for compensation of similarly situated and experienced
executives.
Total compensation takes into consideration a mix of base salary, bonus,
perquisites and stock options. The particular mix is established in order to
competitively attract competent professionals, retain those professionals and
reward extraordinary achievement.
The Board of Directors also considers net income for the year and earnings
per share of the Corporation and the Bank before finalizing officer increases
for the coming year.
Based upon its current levels of compensation, both the Corporation and the
Bank are not affected by the provisions of the Internal Revenue Code, which
limit the deductibility to a corporation of compensation in excess of $1,000,000
paid to any of its top five executives. Thus, the Corporation and the Bank do
not have a policy regarding that subject.
BASE SALARY The Board of Directors of the Corporation and the Bank bear the
responsibility for establishing base salary. Salary is minimum compensation for
any particular position and is not tied to any performance formula or standard.
However, poor performance may result in termination. Acceptable performance is
expected of all executive officers as a minimum standard.
To establish salary, the following criteria are used: (i) position
description; (ii) director responsibility assumed; (iii) comparative studies of
peer group compensation and special weight is given to local factors as opposed
to national averages; (iv) earnings performance of the Bank resulting in
availability of funds and (v) competitive level of salary to be maintained to
attract and retain qualified and experienced executives.
STOCK OPTIONS Recommendations for stock option awards are made by the
Personnel Committee to the Stock Compensation Committee, which then makes
recommendations to the entire Board of Directors for final action. The Personnel
Committee meets to evaluate meritorious performance of all officers and
employees for consideration to receive stock options.
The Personnel Committee makes awards based upon the following criteria: (i)
position of the officer or associate in the Bank; (ii) the benefit that the Bank
has derived as a result of the efforts of the award candidate under
consideration and (iii) the Bank's desire to encourage long term employment of
the award candidate.
Perquisites, such as Corporation and Bank automobiles and their related
expenses, auxiliary insurance benefits and other perquisites which the Board of
Directors of the Bank may approve from time to time are determined and awarded
pursuant to evaluation under the same criteria used to establish base salary.
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CEO COMPENSATION Paul Van Ostenbridge is President and Chief Executive
Officer of the Corporation and the Bank, and has been President and Chief
Executive Officer of the Bank since its inception. The Corporation and the Bank
have continued to make progress toward all of their goals during Mr. Van
Ostenbridge's tenure as President and Chief Executive Officer. The total
compensation to Mr. Van Ostenbridge in 2001 is an increase of 4.12% over his
total 2000 compensation. It is the opinion of the Board of Directors of the
Corporation and the Bank that this increase represents an appropriate amount in
view of Mr. Van Ostenbridge's level of personal performance in 2001, the results
achieved by the Corporation and the Bank, and the compensation received by other
executives in the banking industry. The Board of Directors of the Corporation
and the Bank believe that the total compensation for Mr. Van Ostenbridge
represents fair compensation in view of the 2001 performance of the Corporation
and the Bank, as well as peer group comparisons.
VICE PRESIDENT AND SENIOR COMMERCIAL LOAN MANAGER COMPENSATION M. Bernard
Joustra is Vice President and Senior Commercial Loan Manager of the Bank, and
has been since November, 1991. The Bank has continued to make progress toward
all of its goals during Mr. Joustra's tenure as Vice President and Senior
Commercial Loan Manager. The total compensation to Mr. Joustra in 2001 is an
increase of 3.10% over his total 2000 compensation. It is the opinion of the
Board of Directors of the Corporation and the Bank that this increase represents
an appropriate amount in view of Mr. Joustra's level of personal performance in
2001, the results achieved by the Corporation and the Bank, and the compensation
received by other executives in the banking industry.
VICE PRESIDENT AND TREASURER Julie E. Holland is Vice President and
Treasurer of the Corporation and the Bank, and has been since April, 1997. The
Corporation and the Bank have continued to make progress toward all of their
goals during Ms. Holland's tenure as Vice President and Treasurer. The total
compensation to Ms. Holland in 2001 is an increase of 4.00% over her total 2000
compensation. It is the opinion of the Board of Directors of the Corporation and
the Bank that this increase represents an appropriate amount in view of Ms.
Holland's level of personal performance in 2001, the results achieved by the
Corporation and the Bank, and the compensation received by other executives in
the banking industry.
Members of the Committee
William Almroth (Chairman)
Margo Lane
Arie Leegwater
Robert J. Turner
Paul Van Ostenbridge
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ANNUAL MANAGEMENT COMPENSATION AND ALL OTHER COMPENSATION
The following table sets forth a summary for the last three fiscal
years of the cash and non-cash compensation awarded to, earned by, or paid to
the President and Chief Executive Officer, the Vice President/Sr. Commercial
Loan Manager, and the Vice President/Treasurer whose individual remuneration
exceeded $100,000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
--------------------------- ---------------------------------------------------
SECURITIES
UNDERLYING
RESTRICTED OPTIONS/ ALL OTHER ANNUAL
NAME & SALARY BONUS STOCK SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) AWARD(S) (#) ($)
------------------ ---- ------- ------ ---------- ---------- ----------------
(1) (2)
Paul Van Ostenbridge 2001 175,500 28,843 0 0 27,045
President and Chief 2000 168,500 25,350 0 2,205 26,668
Executive Officer 1999 162,000 23,815 0 2,084 26,200
(1) (3)
M. Bernard Joustra 2001 93,000 10,934 0 0 18,147
Vice President and Sr. 2000 89,600 9,820 0 551 17,520
Commercial Loan Manager 1999 86,200 9,171 0 521 18,016
(1) (3)
Julie E. Holland 2001 79,300 9,369 0 0 11,582
Vice President and 2000 76,300 7,990 0 551 12,036
Treasurer 1999 73,300 7,972 0 521 9,456
----------
NOTES
(1) Includes bonuses earned through the Executive Compensation Plan and
accrued during 2001, 2000 and 1999, which were paid in the first
quarter of the following calendar years.
(2) Includes the imputed value of personal use of Bank automobile, life
insurance premium, Bank matching contributions to its 401(k) Plan,
Profit Sharing Plan, Group Term Life Insurance and Long Term
Disability, and the Bank's portion for medical and vision insurance
contributions.
(3) Includes the inputed value of personal car allowance, Bank matching
contributions to its 401(k) Plan, Profit Sharing Plan, Group Term Life
Insurance and Long Term Disability, and the Bank's portion for medical
and vision insurance contributions.
13
OPTIONS/SARS GRANTS
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
No options were exercised by any executive officers of the Corporation
during the fiscal year ended December 31, 2001. The following table sets forth
for the named executive officers of the Corporation, the number of unexercised
options held at December 31, 2001, and the potential value thereof based on the
closing per share sales price of the Corporation's common stock of $19.25 on
December 31, 2001.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at FY-End (#) Options at FY-End
Exercisable (E) Exercisable (E)
Name Unexercisable (U) Unexercisable (U)
---- ---------------------- ---------------------
Paul Van Ostenbridge ............ 4,037 (E) $118,658 (E)
6,661 (U) $40,380 (U)
M. Bernard Joustra .............. 3,783 (E) $31,779 (E)
1,847 (U) $11,505 (U)
Julie E. Holland ................ 3,673 (E) $30,776 (E)
1,847 (U) $11,505 (U)
EMPLOYEE STOCK OPTION PLAN The Corporation maintains the Stewardship
Financial Corporation 1995 Stock Option Plan (the "Employee Plan"). Under the
Employee Plan 82,047 shares of Common Stock have been reserved for issuance.
Employees of the Corporation, the Bank, and any subsidiaries that the
Corporation may incorporate or acquire are eligible to participate in the
Employee Plan. The Personnel Committee manages the Employee Plan and selects
participants from the eligible employees. No options granted under the Employee
Plan may be exercised more than 10 years after the date of its grant. The
purchase price for shares of Common Stock subject to options under the Plan may
not be less than 100% of the fair market value on the date such options are
granted.
EMPLOYEE STOCK PURCHASE PLAN The Corporation maintains the Stewardship
Financial Corporation 1995 Employee Stock Purchase Plan (the "Purchase Plan").
Under the Purchase Plan 91,163 shares of Common Stock are reserved for issuance.
Shares acquired under the Purchase Plan may be obtained, at the discretion of
the Corporation, from the authorized but unissued shares of Common Stock or from
the open market. Employees of the Corporation, the Bank and any subsidiaries
which the Corporation may incorporate or acquire who work at least 20 hours per
week are eligible to participate in the Purchase Plan. Shares are purchased for
participants through payroll deductions in a maximum amount of 10% of a
participant's total compensation per pay period. Eligible employees must notify
the Bank of their participation in
14
the Purchase Plan and the amount of payroll deductions that will be applied to
purchase shares for them. The funds contributed by each participant are used to
purchase shares of Common Stock at 95% of the fair market value.
PROPOSAL #2 -- AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
TO AUTHORIZE 2,500,000 SHARES OF A NEW CLASS OF
"BLANK CHECK" PREFERRED STOCK
GENERAL
On February 19, 2002, the Board of Directors unanimously approved an
amendment to Article V of the Corporation's Certificate of Incorporation to
authorize 2,500,000 shares of a new class of "blank check" preferred stock. The
Corporation currently has 5,000,000 shares of authorized Common Stock, but is
not authorized to issue preferred stock.
Under the proposed amendment, the Corporation will have a total of
7,500,000 authorized shares of which 5,000,000 shares are Common Stock and
2,500,000 shares are preferred stock, which generally could be issued by the
Board of Directors without further shareholder approval. Under the proposed
amendment, the Board of Directors will have the right to establish classes or
series of preferred stock and to determine the relative rights, preferences and
limitations of each new class or series, including dividend or interest rights,
conversion rights, voting rights, redemption prices, maturity dates and similar
matters.
The full text of the proposed amendment is attached to this proxy statement
as Appendix A. The description of the amendment is qualified in its entirety by
reference to Appendix A.
PURPOSE OF THE PROPOSAL
The purpose of this amendment is to maximize the Corporation's ability to
expand its capital. Although the Corporation has no agreements, commitments or
plans at this time for the sale or other use of additional shares of stock, the
Board of Directors believes that the proposed authorization to issue Common
Stock and preferred stock will provide the Corporation with increased
flexibility in generating additional capital, achieving future acquisitions and
meeting its corporate needs. If the issuance of shares is deemed advisable in
connection with raising additional capital, or future acquisitions, having the
authority to issue the additional shares would avoid the time delay and expense
of a special shareholders' meeting to authorize the issuance of Common Stock or
preferred stock. No further action or authorization by the Corporation's
shareholders would be necessary prior to issuance of such stock, except as may
be required for a particular transaction by applicable law or regulation.
The preferred stock that would be authorized by this amendment is referred
to as "blank check" preferred stock. The term "blank check" preferred stock
refers to stock for which the designation, preferences, conversion rights,
cumulative, relative, participating, optional or other rights, including voting
rights, qualifications, limitations or restrictions are determined by the board
of directors of a corporation. If this proposal is approved, the Board of
Directors will be entitled to authorize the creation and issuance of 2,500,000
shares of preferred stock in one or more series with such limitations and
restrictions as may be determined in the sole discretion of
15
the Board of Directors, and no further authorization will be required from the
Corporation's shareholders.
POSSIBLE ADVERSE EFFECTS OF THE PROPOSAL
The issuance of the preferred stock or additional Common Stock may have
certain adverse effects upon the current holders of Common Stock. Issuance of
shares of preferred stock could affect the voting rights of holders of Common
Stock if any classes or series of preferred stock had disproportionately high
voting rights, or had voting rights with respect to particular matters. Holders
of the Corporation's Common Stock will not have pre-emptive rights with respect
to the preferred stock or additional Common Stock. The issuance of additional
Common Stock, either directly or through issuance of a class or series of
preferred stock convertible into or redeemable for Common Stock, would increase
the number of shares of Common Stock outstanding, thereby diluting the
percentage ownership of existing shareholders, as well as possibly diluting book
value per share and/or earnings per share. Shares of preferred stock generally
will be preferred to Common Stock as to dividend rights and distributions in the
event of liquidation.
POSSIBLE ANTI-TAKEOVER EFFECTS OF THE PROPOSAL
The authorization or issuance of Common Stock or blank check preferred
stock may be viewed as being an "anti-takeover" device. In the event of a
proposed merger, tender offer or other attempt to gain control of the
Corporation that the Board of Directors does not believe to be in the best
interests of the Corporation or its shareholders, the Board of Directors may
issue additional Common Stock or preferred stock which could make any such
takeover attempt more difficult to complete. Blank check preferred stock may
also be used in connection with the issuance of a shareholder rights plan
(sometimes called a poison pill). The Board of Directors has not approved any
plan to issue any Common Stock or preferred stock for this or any other purpose.
The Board of Directors does not intend to issue any Common Stock or preferred
stock except on terms that the Board of Directors deems to be in the best
interest of the Corporation and its shareholders.
VOTE REQUIRED FOR ADOPTION OF THE PROPOSAL
In accordance with the New Jersey Business Corporation Act and the
Corporation's Certificate of Incorporation, the affirmative vote of a majority
of those shares of Common Stock voting on this proposal is required to adopt the
amendment to the Certificate of Incorporation.
RECOMMENDATION
The Board of Directors unanimously recommends a vote FOR the amendment to
the Certificate of Incorporation included in Proposal #2.
16
PROPOSAL #3 --AMENDMENT OF THE COMPANY'S 1995 STOCK OPTION PLAN
TO PERMIT OPTIONS TO BE GRANTED THEREUNDER
TO ALL FULL-TIME EMPLOYEES OF THE COMPANY
GENERAL
The 1995 Stock Option Plan provides for the grant of non-statutory options
and incentive stock options to executive officers and other key employees of the
Corporation with the title of Vice President or higher. The Corporation reserved
82,046 shares of Common Stock for issuance under the 1995 Stock Option Plan and
as of the Record Date, approximately 45,587 shares are available for future
grants under such plan. The exercise price of the options granted under the 1995
Stock Option Plan will not be less than 100% of the fair market value of the
shares of Common Stock on the date of grant of these options. In general,
options granted under the 1995 Stock Option Plan will have a term of ten years.
On or about December, 1998, the Board of Directors approved an amendment to
the 1995 Stock Option Plan to permit all executive officers and other key
employees of the Corporation, including those who do not have the title of Vice
President or higher, to receive option grants under such plan.
On February 19, 2002, the Board of Directors approved a second amendment to
the 1995 Stock Option Plan to permit all full-time employees of the Corporation
to receive option grants under such plan. The full text of the proposed
amendment is attached to this Proxy Statement as Appendix B. The description of
the amendment is qualified in its entirety by reference to Appendix B.
PURPOSE OF THE PROPOSAL
The Board of Directors believes this amendment will enhance the
Corporation's ability to attract, retain and motivate employees of exceptional
quality and is in the best interest of the stockholders.
FEDERAL TAX CONSEQUENCES OF THE 1995 STOCK PLAN
The following is intended only as a general summary of the federal income
tax consequences in connection with options granted under the 1995 Stock Option
Plan. All tax matters discussed in this Proxy Statement should be verified with
a tax consultant.
The grant of an incentive stock option will have no immediate tax
consequences to the optionee or to the Corporation. The exercise of an incentive
stock option by the payment of cash to the Corporation will generally have no
immediate tax consequences to the optionee (except that the spread between the
exercise price and the fair market value of the stock upon exercise of the
option is an adjustment in computing alternative minimum taxable income) or to
the Corporation. If an optionee holds the shares acquired pursuant to the
exercise of an incentive stock option for the required holding period, the
optionee generally will realize long-term capital gain or long-term capital loss
upon a subsequent sale of the shares in the amount of the difference between the
amount realized upon the sale and the exercise price paid for the shares. In
such case, no deduction will be allowable to the Corporation in connection with
the grant or exercise of the incentive stock option or the subsequent sale of
shares of Common Stock acquired pursuant to such exercise.
17
If, however, the optionee disposes of the shares prior to the expiration of
the required holding period (a "disqualifying disposition"), the optionee will
recognize ordinary income (and the Corporation will generally be entitled to a
deduction) equal to the excess of the fair market value for the shares of the
Common Stock on the date of the exercise over the exercise price (or the
proceeds of the disposition, if less). The optionee will also realize capital
gain to the extent, if any, that the amount realized upon the sale exceeds the
fair market value for the shares of Common Stock on the date of the exercise.
Special rules apply in the event all or a portion of the exercise price is paid
in the form of stock.
The grant of a stock option other than an incentive stock option (a
"non-qualified stock option") will have no immediate tax consequences to the
optionee or to the Corporation. Upon the exercise of a non-qualified stock
option, the optionee will generally recognize ordinary income (and the
Corporation will generally be entitled to a deduction) in an amount equal to the
excess of the fair market value of the shares of Common Stock on the date of the
exercise of the option over the exercise price. The optionee's tax basis in the
shares will be the exercise price plus the amount of ordinary income recognized
by the optionee, and the optionee's holding period will commence on the date the
shares are transferred. Special rules apply in the event all or a portion of the
exercise price is paid in the form of stock.
Upon a subsequent sale of shares of Common Stock acquired pursuant to the
exercise of a non-qualified stock option, any difference between the optionee's
tax basis in the shares and the amount realized on the sale is treated as
capital gain or loss. If the shares are held for more than one year, such
capital gain or loss will be long-term capital gain or loss.
VOTE REQUIRED FOR ADOPTION OF THE PROPOSAL
The affirmative vote of the holders of a majority of the Common Stock
represented at the Annual Meeting is required for the approval of this proposal.
RECOMMENDATION
The Board of Directors unanimously recommends that stockholders vote FOR
approval of the second amendment to the Company's 1995 Stock Option Plan
included in Proposal #3.
18
OTHER MATTERS RELATING TO EXECUTIVE OFFICERS
AND DIRECTORS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Bank has made in the past and, assuming continued satisfaction of
generally applicable credit standards, expects to continue to make loans to
directors, executive officers and their associates (i.e. corporations or
organizations for which they serve as officers or directors, or in which they
have beneficial ownership interests of 10% or more). These loans have all been
made in the ordinary course of banking business on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectability or present other unfavorable features.
The Corporation and the Bank retained the law firm of Hanse and Hanse as
general counsel in 2001 and expect to continue to retain Hanse and Hanse as
general counsel in 2002. Director William C. Hanse is a partner of the firm.
During 2001, the Corporation and the Bank paid fees of approximately $21,600 to
Hanse and Hanse.
The Corporation and the Bank hired Arie Leegwater Associates for general
maintenance of all of its branch offices and the construction of its Pequannock
branch in 2001. Arie Leegwater, proprietor of Arie Leegwater Associates, is a
Director and Chairman of the Board. In 2001 the Corporation and the Bank paid
Arie Leegwater Associates a total of $8,068 and expects to continue its
relationship with this firm during 2002.
The Corporation and the Bank purchase insurance through The Turner Group,
an insurance brokerage owned by Robert J. Turner, a Director and Corporate
Secretary of the Corporation and the Bank. In 2001, the Corporation and the Bank
paid insurance premiums of $108,779 to The Turner Group.
The Corporation and the Bank hired William Van Der Eems, Inc. for general
maintenance of all of its branch offices and the construction of its Pequannock
branch in 2001. William Vander Eems, President of William Van Der Eems, Inc., is
a Director. In 2001 the Corporation and the Bank paid William Van Der Eems, Inc.
a total of $98,357 and expects to continue its relationship with this firm
during 2002.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than 10% of a
registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than 10% shareholders are required by regulation
of the Securities and Exchange Commission to furnish the Corporation 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, a Form 5 filing was not required for those persons. The Corporation
believes that, during the fiscal year ended December 31, 2001, all filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were met.
19
FAMILY RELATIONSHIPS
There are no family relationships among any of the directors or executive
officers.
INDEPENDENT AUDITORS
Based on the recommendation of the Audit Committee, the Board of Directors
of the Corporation and the Bank have selected KPMG, LLP as the independent
public accountants for the Corporation and the Bank for the fiscal year ending
2002. KPMG, LLP has acted as the Corporation's and the Bank's independent public
accountants for the years ended December 31, 1996 through 2001.
KPMG, LLP has advised the Corporation 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.
AUDIT FEES
The aggregate fees billed for professional services by KPMG, LLP in
connection with the audit of the annual financial statements for the most recent
fiscal year and the reviews of the financial statements included in the
Corporation's quarterly filings with the Securities and Exchange Commission were
$57,000.00.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no aggregate fees billed for professional services by KPMG, LLP
in connection with professional services involving financial information and
implementation fees.
ALL OTHER FEES
In addition to fees filled for audit services and the interim reviews of
the financial statements for 2001, KPMG, LLP billed the Corporation $21,000.00
which was substantially for tax compliance services.
The Audit Committee has considered whether the provision of non-audit
services covered in the preceding two paragraphs is compatible with maintaining
the independence of KPMG, LLP.
SHAREHOLDER PROPOSALS
Proposals of shareholders to be included in the Corporation's 2003 proxy
material must be received by the Secretary of the Corporation at its principal
executive offices on or prior to December 9, 2002, in order to be included in
the Corporation's Proxy Statement and form of proxy relating to the 2003 Annual
Meeting of Shareholders. Pursuant to amended SEC Rule 14a-4 (c) (1) the
Corporation shall exercise discretionary voting authority to the extent
conferred by Proxy with respect to shareholder proposals received after February
22, 2003.
20
OTHER MATTERS
The Board of Directors is not aware of any other matters that 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.
FORM 10-KSB
We will furnish, without charge to each person solicited and to each
beneficial owner of our securities, on the written request of such person, a
copy of our annual report on Form 10-KSB. Requests should be directed to Mrs.
Ellie King, Assistant Secretary, Stewardship Financial Corporation, 630 Godwin
Avenue, Midland Park, NJ 07432-1405; telephone number 201-444-7100 or
877-844-BANK.
By Order of the Board of Directors
ROBERT J. TURNER
-----------------
Corporate Secretary
April 8, 2002
21
Appendix A
ARTICLE V OF THE CERTIFICATE OF INCORPORATION
AS PROPOSED TO BE AMENDED:
The proposed amendment will change Article V of the Certificate of
Incorporation to read in its entirety as follows:
CAPITAL STOCK
(a) The total authorized capital stock of the Corporation shall be
7,500,000 shares, consisting of 5,000,000 shares of Common Stock and 2,500,000
shares of Preferred Stock, which may be issued, in one or more classes or
series. The shares of Common Stock shall constitute a single class and shall be
without nominal or par value. The shares of Preferred Stock of each class or
series shall be without nominal or par value, except that the amendment
authorizing the initial issuance of any class or series, adopted by the Board of
Directors as provided herein, may provide that shares of any class or series
shall have a specified par value per share, in which event all of the shares of
such class or series shall have the par value per share so specified.
(b) The Board of Directors of the Corporation is expressly authorized from
time to time to adopt and to cause to be executed and filed without further
approval of the shareholders amendments to this Certificate of Incorporation
authorizing the issuance of one or more classes or series of Preferred Stock for
such consideration as the Board of Directors may fix. In an amendment
authorizing any class or series of Preferred Stock, the Board of Directors is
expressly authorized to determine:
(1) The distinctive designation of the class or series and the number of
shares which will constitute the class or series, which number may be increased
or decreased (but not below the number of shares then outstanding in that class
or above the total shares authorized herein) from time to time by action of the
Board of Directors;
(2) The dividend rate on the shares of the class or series, whether
dividends will be cumulative, and, if so, from what date or dates;
(3) The price or prices at which, and the terms and conditions on which,
the shares of the class or series may be redeemed at the option of the
Corporation;
(4) Whether or not the shares of the class or series will be entitled to
the benefit of a retirement or sinking fund to be applied to the purchase or
redemption of such shares and, if so entitled, the amount of such fund and the
terms and provisions relative to the operation thereof;
(5) Whether or not the shares of the class or series will be convertible
into, or exchangeable for, any other shares of stock of the Corporation or other
securities, and if so convertible or exchangeable, the conversion price or
prices, or the rates of exchange, and any adjustments thereof, at which such
conversion or exchange may be made, and any other terms and conditions of such
conversion or exchange;
22
(6) The rights of the shares of the class or series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
(7) Whether or not the shares of the class or series will have priority
over, parity with, or be junior to the shares of any other class or series in
any respect, whether or not the shares of the class or series will be entitled
to the benefit of limitations restricting the issuance of shares of any other
class or series having priority over or on parity with the shares of such class
or series and whether or not the shares of the class or series are entitled to
restrictions on the payment of dividends on, the making of other distributions
in respect of, and the purchase or redemption of shares of any other class or
series of Preferred Stock or Common Stock ranking junior to the shares of the
class or series;
(8) Whether the class or series will have voting rights, in addition to any
voting rights provided by law, and if so, the terms of such voting rights; and
(9) Any other preferences, qualifications, privileges, options and other
relative or special rights and limitations of that class or series.
ARTICLE V OF THE CERTIFICATE OF INCORPORATION AT PRESENT:
Article V of the Certificate of Incorporation presently reads as set forth
below:
CAPITAL STOCK
The Corporation is authorized to issue 5,000,000 shares of Common Stock
23
APPENDIX B
SECTION 4 OF THE 1995 STOCK OPTION PLAN AS PROPOSED TO BE AMENDED:
The proposed amendment will change Section 4 of the 1995 Stock Option Plan
to read in its entirety as follows:
All full-time employees of the Corporation (including executive
officers and key employees who are directors) shall be eligible to
participate in the Plan. The Participants under the Plan shall be selected
from time to time by the Committee, in its sole discretion, from among
those eligible employees, and the Committee shall determine in its sole
discretion the numbers of shares to be covered by the Option or Options
granted to each Participant. Options intended to qualify, as Incentive
Stock Options shall be granted only to persons who are eligible to receive
such options under Section 422 of the Code.
24
REVOCABLE PROXY
STEWARDSHIP FINANCIAL CORPORATION
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 2002
The undersigned hereby appoints Bartel Leegwater, Paul Rultenberg and Ralph
Wiegers, with full power of substitution, as proxy for the undersigned to attend
the annual meeting of shareholders of Stewardship Financial Corporation (the
"Corporation"), to be held at the Corporation's office at 630 Godwin Avenue,
Midland Park, New Jersey 07432 on May 7, 2002, at 7:00 p.m., or any adjournment
thereof, and to vote the number of shares of Common Stock of the Corporation
that the undersigned would be entitled to vote, and with all the power the
undersigned would possess, if personally present, as follows:
-----------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
--------------------------------------------------------------------------------
------- Stockholder sign above ---------- Co-holder (if any) sign above---------
With- For all
For hold Except
1. To vote for the following nominees for [ ] [ ] [ ]
election as directors:
William C. Hanse, Margo Lane, Arie Leegwater, John L. Steen
INSTRUCTION: To withhold authority to vote for an individual nominee, write the
nominee's name on the line provided below.
--------------------------------------------------------------------------------
For Against Abstain
2. Approval of an amendment to the [ ] [ ] [ ]
Corporation's Certificate of
Incorporation to authorize 2,500,000
shares of a new class of "blank check"
preferred stock.
For Against Abstain
3. Approval of an amendment to the [ ] [ ] [ ]
Corporation's 1995 Stock Option Plan
to permit options to be granted thereunder
to all full-time employees of the Corporation.
The Proxy will vote as specified herein or, if a choice is not specified, he
will vote "FOR" the proposals set forth above.
This Proxy is solicited by the Board of Directors of the Corporation.
When shares are held by two or more persons as joint tenants, both or all should
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full corporate
name by president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
STEWARDSHIP FINANCIAL CORPORATION
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
--------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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