May 22, 2001
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: EDGAR Filing
Name of Registrant : First Montauk Financial Corp.
Type of Report : Definitive Proxy Statement
SEC File No. : 0-6729
CIK Number : 0000083125
Ladies/Gentlemen:
In accordance with the provisions of Regulation S-T and on behalf of the
above-referenced Registrant, we transmit to you the Registrant's EDGAR filing of
Registrant's Definitive Proxy Statement for an Annual Meeting of Stockholders to
be held on June 22, 2001. There is no fee required for this filing.
The Registrant intends to mail its Proxy Statement to shareholders on or
about May 22, 2001.
A manually signed hard copy of the transmitted report has been retained
together with the Company's books and records. Pursuant to Rule 901(d) of
Regulation S-T, we have forwarded seven paper copies of the Annual Report to
your Operations Center in Alexandria, Virginia. We request both electronic and
hard copy acceptance message.
Sincerely,
/s/ Robert I. Rabinowitz
Robert I. Rabinowitz
FIRST MONTAUK FINANCIAL CORP.
Parkway 109 Office Center
328 Newman Springs Road, Red Bank, New Jersey 07701
PROXY STATEMENT
Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant: [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
First Montauk Financial Corp.
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(Name of the Corporation as Specified in Charter)
William J. Kurinsky, Secretary
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(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
Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total Fee Paid
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(6) Fee paid previously with preliminary materials:
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(7) 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:
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(2) Form, Schedule or Registration no.:
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(4) Date filed:
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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 22, 2001
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
principal executive offices of the Company, located at Parkway 109 Office
Center, 328 Newman Springs Road, Red Bank, New Jersey 07701 on Friday, June 22,
2001 at 10:00 a.m., New Jersey time, for the purpose of
1. Electing two Class II 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; and
2. to transact such other business as may properly be brought before
the meeting or any adjournment thereof.
The close of business on May 21, 2001 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof.
You are cordially invited to attend the Annual 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 Annual 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 22, 2001
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL 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.
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 22, 2001
This Proxy Statement and the accompanying form of proxy have been mailed on
or about May 22, 2001 to the holders of the Corporation's Common Stock of record
("Record Date") on May 21, 2001 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 22, 2001 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 II Directors; 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 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.
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 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,
2000, 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 (732) 842-4700.
Independent Public Accountants
The Board of Directors of the Corporation has selected Schneider, Ehrlich &
Associates, LLP, Certified Public Accountants, as independent accountants of the
Corporation for the fiscal year ending December 31, 2001. Shareholders are not
being asked to approve such selection because such approval is not required
under the Corporation's Bylaws or the Business Corporation Act of the State of
New Jersey. The audit services provided by Schneider, Ehrlich & Associates, 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 & Associates,
LLP, are expected to be present at the Annual 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 Annual 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 21,
2001 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 21, 2001, there were 8,787,885 shares of Common
Stock issued and outstanding. Voting of the shares of Common Stock is on a
non-cumulative basis.
The following table sets forth certain information as of May 21, 2001, 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
(5%) percent of any class of the Corporation's voting securities.
Amount and Percentage
Directors, Officer of Beneficial Ownership (1)
and 5% Shareholders(1) Number of Shares Percent
---------------------- ---------------- ---------------------------
Herbert Kurinsky 526,518(2) 5.7%
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
William J. Kurinsky 1,925,823(3) 19.9%
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
Robert I. Rabinowitz, Esq. 375,749(4) 4.1%
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
Ward R. Jones 110,000(5) 1.2%
7 Leda Lane
Guilderland, NY 12084
Norma Doxey 74,900(6) *
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
David I. Portman 219,800(7) 2.5%
300 Ocean Avenue, Apt. 6A
Long Branch, NJ 07740
Barry D. Shapiro 0 *
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
All Directors and 3,232,790 30.0%
Officers as a group
(6 persons in number)
*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 475,000 shares of Common Stock.
(3) Includes vested and presently exercisable options of Mr. William J.
Kurinsky to purchase 500,000 shares of Common Stock, and 120,000 Class A
Warrants, 120,000 Class B Warrants and 120,000 Class C Warrants.
(4) Includes vested and presently exercisable options of Mr. Robert
Rabinowitz to purchase 328,750 shares of Common Stock; 50,000 of which are owned
by Mr. Rabinowitz's wife. Mr. Rabinowitz's children own 2,000 shares of Common
Stock. Mr. Rabinowitz also owns 5,833 Class A Warrants, 5,833 Class B Warrants
and 5,833 Class C Warrants.
(5) Includes vested and presently exercisable options of Mr. Ward R. Jones
to purchase 100,000 shares of Common Stock.
(6) Includes vested and presently exercisable options of Ms. Norma Doxey to
purchase 44,500 shares of Common Stock and 18,000 non-vested stock options.
(7) Includes vested and presently exercisable options of Mr. David I.
Portman to purchase 100,000 shares of Common Stock. Mr. Portman also owns 16,600
Class A Warrants, 16,600 Class B Warrants and 16,600 Class C Warrants.
NOTE:
All Class A Warrants are exercisable at $3.00 per share for a period
of three (3) years from February 17, 1998.
All Class B Warrants are exercisable at $5.00 per share for a period
of five (5) years from February 17, 1998.
All Class C Warrants are exercisable at $7.00 per share for a period
of seven (7) years from February 17, 1998.
Certain Reports
No person who, during the fiscal year ended December 31, 2000, 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.
It is expected that the following will be considered at the Annual Meeting
and action taken thereon:
I. ELECTION OF DIRECTORS
The Corporation's Certificate of Incorporation provides 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 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 currently consists of six Directors divided into
three classes (Class I, II and III) consisting of two members each. Until
December 6, 2000 there was a vacancy in Class II resulting from the resignation
of Dr. Ross E. McRonald in November 1994. This vacancy was filled by the
remaining members of the Board on December 6, 2000 with the appointment of Barry
D. Shapiro.
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 Class II Directors. All proxies
received by the Board of Directors will be voted for the election as Class II
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. Family relationships exist among the following executive officers
and directors: Mr. Herbert Kurinsky is the uncle of Mr. William J. Kurinsky and
Mr. Robert I. Rabinowitz is the brother-in-law of Mr. William J. Kurinsky.
The terms of the Class II Directors expire at this Annual Meeting. The
present Directors of the Corporation nominated for reelection to the
Corporation's Board of Directors as the Class II Directors at the Annual Meeting
are Norma Doxey and Barry D. Shapiro.
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 Annual Meeting. The
Class II Directors are the Directors nominated for election at the Annual
Meeting.
Position with Director
Corporation; Principal Continually
Name Occupation and Age Since Term Expires
CLASS II - NOMINEES
Norma L. Doxey Director, Vice-President of Operations
of First Montauk Securities Corp., 61 1988 Nominee
Barry D. Shapiro Director, 58 2000 Nominee
CLASS I
Herbert Kurinsky Director, President and Chief 1987 2002
Executive Officer of the Company
and Registered Options Principal of
First Montauk Securities Corp., 70
William J. Kurinsky Director, Vice President, Chief 1987 2002
Operating and Chief Financial Officer
and Secretary of the Company and of
First Montauk Securities Corp. and
Financial and Operations Principal
of First Montauk Securities Corp., 40
CLASS III
Ward R. Jones, Jr. Director, Registered Representative
with First Montauk Securities Corp., 70 1991 2003
David I. Portman Director, President of Triad Property
Management, Inc., 60 1993 2003
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 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 Corp. 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., but does not engage in any securities business.
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. FMSC underwrote an
initial public offering of the common stock of Pacific Health Laboratories,
Inc., and is currently a market maker in the stock.
Barry D. Shapiro was appointed to the Board of Directors of the Company on
December 6, 2000. From October 2000 to the present, Mr. Shapiro is a shareholder
of the accounting firm, Withum, Smith & Brown in its Red Bank office. Mr.
Shapiro was a partner of Shapiro & Weisman C.P.A., P.A., from 1976 thru 1996
when he became a partner of Rudolf, Cinnamon & Calafato, P.A. until joining
Withum Smith & Brown. Mr. Shapiro was previously employed with the Internal
Revenue Service from 1965 thru 1971, where he was responsible for audit, review
and conference functions. Mr. Shapiro is a member of the New Jersey Society of
Certified Public Accountants, where he currently participates on the IRS Co-Op
and State Tax Committees. Mr. Shapiro is a past Trustee, Treasurer and Vice
President of the NJSCPA. He has been involved and is in many civic and community
activities, as well as charitable organizations, including the Monmouth County
New Jersey Chapter of the American Cancer Society and the Ronald McDonald House
of Long Branch, New Jersey. Mr. Shapiro received a B.S. in accounting from Rider
University in 1965.
Significant Employees
Robert I. Rabinowitz, 44, has been General Counsel of the Company since
1987. He concurrently served as General Counsel of First Montauk Securities from
1986 to 1998 when a new general counsel was named. Thereafter, he became the
Chief Administrative Officer of FMSC as well as General Securities Prinicipal.
From January 1986 until November 1986, he was as associate attorney for Brodsky,
Greenblatt & Renahan, a private practice law firm in Rockville, Maryland. Mr.
Rabinowitz is an attorney at law licensed to practice in New Jersey, Maryland
and the District of Columbia, and is a member of the Board of Arbitrators for
the National Association of Securities Dealers, Department of Arbitration. Mr.
Rabinowitz's wife is a niece of Mr. Herbert Kurinsky and a sister of Mr. William
Kurinsky.
Mark D. Lowe, 41, has been President of Montauk Insurance Services, Inc.
since October 1998. From 1982 to 1998 Mr. Lowe was a Senior Consultant with
Congilose & Associates, a financial services firm specializing in insurance and
estate planning. Mr. Lowe became a Certified Financial Planner (CFP) in July
1991. Mr. Lowe attended Ocean County College in Toms River, N.J. Mr. Lowe is the
Treasurer of the Estate and Financial Planning Council of Central New Jersey.
David M. McCoy, 39, has been director of retail sales since June 2000.
Prior to that he was an affiliate registered representative with First Montauk
Securities Corp. in the Boca Raton, Florida branch office since August 1992.
From October 1991 through August 1992, Mr. McCoy was a Manager at Chelsea Street
Securities, and from October 1990 through October 1991, he was a trader/manager
in Biltmore Securities, both in Boca Raton, FL. Mr. McCoy holds a General
Securities Agent and Principal licenses.
Board Meetings, Committees and Compensation of Directors
During the fiscal year ended December 31, 2000, four meetings of the Board
of Directors were held. Each Director of the Corporation was present at all
meetings of the Board of Directors, either in person or by telephone, held
during fiscal 2000.
The Board of Directors has established an Audit Committee consisting of
three members, which 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) the finances, financial condition, and interim financial
statements of the Company, and (iii) the year end financial statements of the
Company. Members of the Audit Committee do not receive additional compensation
for such service. The Audit Committee met on one occasion during fiscal 2000.
The Audit Committee adopted a written charter governing its actions on June
23, 2000. The Charter of the Audit Committee of the Company appears in full at
Exhibit 1 of this Proxy Statement. Mr. Jones, Mr. Shapiro and Mr. Portman are
"independent" members of the Company's Audit Committee, within the definition of
that term as provided by Rule 4200(a)(14) of the listing standards of the
National Association of Securities Dealers.
The audit committee hereby states that it:
* has reviewed and discussed the audited financial statements with
the Company's management;
* has discussed with the Company's independent auditors the matters
required to be discussed by SAS 61, as may be modified or
supplemented;
* has received the written disclosures and the letter from the
independent accountants required by Independence Standards Board
Standard No. 1, as may be modified or supplemented, and has
discussed with the independent accountants the independent
accountant's independence; and
* has recommended to the Board of Directors of the Company that the
audited financial statements be included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000
for filing with the Commission.
The Audit Committee of the Board of Directors of First Montauk Financial
Corp.:
David I. Portman Ward R. Jones, Jr. Barry D. Shapiro
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 who are not employees of the Company are
also eligible to participate in the Director Plan. Directors employed by the
Corporation are not entitled to any additional compensation as such. The Board
of Directors generally meets on a quarterly basis in addition to such other
occasions as the business of the Corporation may from time to time require.
Compensation Committee Report on Executive Compensation
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 Senior Management Plan and the Incentive Stock Option
Plan, as amended. At present, Ward R. Jones, Jr. and David I. Portman are the
members of the compensation committee. This committee met on one occasion during
fiscal 2000.
The compensation committee and the Board of Directors have established the
following ongoing principles and objectives for determining the Corporation's
executive compensation:
* provide compensation opportunities that will help attract,
motivate and retain highly motivated qualified managers and
executives.
* link executive total compensation to the Corporation's
performance and individual job performance.
* provide a balance between incentives based upon annual business
achievements and longer term incentives linked to increases in
shareholder value.
During the last fiscal year, except as discussed below, the cash
compensation portions of the Chief Executive Officer and the Chief Operating
Officer were not reviewed by the compensation committee as the terms of the
compensation were governed by the terms of their employment agreements which
were entered into in January 2000. Shareholders are directed to the discussion
of these agreements under the heading "Employment Agreements" appearing
elsewhere in this Proxy Statement. A cash bonuses of $29,306 was awarded to our
Chief Executive Officer, and no bonus was awarded to our Chief Operating Officer
during the last fiscal year, which is less than the amount to which they were
entitled under the terms of their employment agreements with the Company.
The total cash compensation paid to both Mr. Herbert Kurinsky and Mr.
William Kurinsky decreased in fiscal 2000 as compared to 1999. The salary
increases realized by these officers were increases to which they were entitled
under the terms of their employment agreements with the Company, pursuant to
which they are entitled to receive an annual salary increase of 10%. As both
executive officers declined to receive the full amount of bonuses payable to
them under their employment agreements, their total cash compensation in fiscal
2000 decreased relative to fiscal 1999.
During the last fiscal year, the compensation committee authorized the
grant of options to purchase 125,000 shares of the Company's Common Stock to
each of Messrs. Herbert Kurinsky and William Kurinsky. See "Option Grants in
Last Fiscal Year."
The Compensation Committee:
Ward R. Jones Jr. David I. Portman
Compensation Committee Interlocks and Insider Participation
There are no compensation committee interlocks between the members of the
Corporation's compensation committee and any other entity. None of the members
of the Board's compensation committee are executive officers of the Corporation.
Mr. Jones is a registered representative of the Corporation's broker-dealer
subsidiary, First Montauk Securities Corp., but does not engage in any
securities business.
Shareholder Return Performance Presentation
Set forth herein is a line graph comparing the total returns (assuming
reinvestment of dividends) of the Company's common stock, the Standard and Poor
Industrial Average, and an industry composite consisting of a group of two peer
issuers selected in good faith by the Company. The Company's common stock is
listed for trading in the over the counter market and is traded under the symbol
"FMFK".
Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100
DESCRIPTION 1995 1996 1997 1998 1999 2000
First Montauk Financial Corp. (%) -4.00 199.48 -50.00 -10.61 -44.75
First Montauk Financial Corp. ($) $100.00 $ 96.00 $287.50 $143.75 $ 128.50 $ 71.00
S&P 500 (%) 22.94 33.36 28.58 21.05 -9.10
S&P 500 ($) $100.00 $122.94 $163.96 $210.81 $ 255.18 $231.94
Peer Group Only (%) 174.74 63.98 -41.49 284.16 -38.32
Peer Group Only ($) $100.00 $274.74 $450.53 $263.59 $1,012.61 $624.55
Peer Group + FMFK (%) 114.49 88.05 -43.99 216.56 -38.70
Peer Group + FMFK ($) $100.00 $214.49 $403.35 $225.93 $ 715.21 $438.39
NOTES:
(1) Industry composite includes Paulson Capital Corp. and JW Genesis
Financial Corp. The industry composite has been determined in good faith by
management to represent entities that compete with the Company in certain of its
significant business segments.
Vote Required for Election of Directors
The affirmative vote of the holders of a plurality of the shares of Common
Stock voting at the Annual Meeting is required for the approval of the nominees
for Class II Directors.
THE BOARD OF DIRECTORS DEEMS THE NOMINEES FOR THE CLASS III DIRECTORS TO BE
IN THE BEST INTERESTS OF THE CORPORATION AND ITS SHAREHOLDERS AND RECOMMENDS A
VOTE "FOR" APPROVAL THEREOF.
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-K) compensation awarded to,
earned by, paid or accrued by the Company during the years ended December 31,
2000, 1999 and 1998 to each of the named executive officers of the Company.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term
Compensation
Securities
Underlying
Name & Principal Other Annual Options/ SARs
Position Year Salary Bonus Compensation Granted
- --------- ---- ------ ----- ------------ --------
Herbert Kurinsky 2000 $256,217 $ 29,306 $ 2,000(4) 125,000 (1)
Chairman, Chief 1999 $232,925 $100,000 $ 925(4) 0 (1)
Executive Officer (7) 1998 $175,000 $0 $ 10,096(4) 100,000 (1)
William J. Kurinsky 2000 $256,217 $0 $ 2,000(5) 125,000 (2)
Vice President, 1999 $232,925 $100,000 $ 1,925(5) 0 (2)
Chief Operating and 1998 $175,000 $0 $ 10,221(5) 100,000 (2)
Financial Officer
and Secretary (8)
Robert I. Rabinowitz 2000 $150,000 $ 24,234 $ 2,000(6) 60,000 (3)
General Counsel, FMFC, 1999 $125,000 $ 25,000 $ 1,200(6) 0 (3)
Chief Administrative 1998 $125,000 $ 15,000 $ 295(6) 100,000 (3)
Officer, FMSC(9)
(1) In 2000, the Compensation Committee of the Board of Directors (the
"Committee") authorized an option grant to Mr. Herbert Kurinsky to purchase
125,000 shares of Common Stock at an exercise price of $2.00 per share. In 1998,
the Board of Directors authorized a grant to purchase 100,000 shares at an
exercise prices of $1.9375 to Herbert Kurinsky. See "Aggregated Options/Sar
Exercises in Last Fiscal Year and Fy-End Option/Sar Values."
(2) In 2000, the Compensation Committee of the Board of Directors (the
"Committee") authorized an option grant to Mr. William J. Kurinsky to purchase
125,000 shares of Common Stock at an exercise price of $2.00 per share. In 1998,
the Board of Directors authorized a grant to purchase 100,000 shares at an
exercise prices of $2.13 to William J. Kurinsky. See "Aggregated Options/Sar
Exercises in Last Fiscal Year and Fy-End Option/Sar Values."
(3) In 2000, the Board of Directors authorized an option grant to Mr. Robert
Rabinowitz to purchase 60,000 shares of Common Stock at an exercise price of
$2.00 per share. In 1998, the Board of Directors authorized a grant to purchase
100,000 shares at an exercise prices of $1.9375 to Robert Rabinowitz. See
"Aggregated Options/Sar Exercises in Last Fiscal Year and Fy-End Option/Sar
Values."
(4) Includes (i) for 2000, automobile allowance of $2000; (ii) for 1999, auto
allowance of $925; (iii) for 1998, vacation pay of $10,096.
(5) Includes: (i) for 2000, automobile allowance of $2,000; (ii) for 1999, auto
allowance of $1928; (iii) for 1998, commissions of $125 and vacation pay of
$10,096.
(6) Includes (i) for 2000, automobile allowance of $2,000; (ii) for 1999,
automobile allowance of $1200; (iii) for 1998, commissions of $295.
(7) Mr. Herbert Kurinsky is the beneficial owner of 51,518 shares of the
Company's Common Stock as of December 31, 2000, which shares had a market value
of $36,578 as of that date, without giving effect to the diminution in value
attributable to the restriction on said shares.
(8) Mr. William Kurinsky is the beneficial owner of 1,065,823 shares of the
Company's Common Stock as of December 31, 2000, which shares had a market value
of $756,734 as of that date, without giving effect to the diminution in value
attributable to the restriction on said shares.
(9) Mr. Robert I. Rabinowitz is the beneficial owner of 29,500 shares of the
Company's Common Stock as of December 31, 2000, which shares had a market value
of $20,945 as of that date, without giving effect to the diminution in value
attributable to the restriction on said shares.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table contains information with respect to the named
executive officers concerning options granted during the year ended December 31,
2000.
INDIVIDUAL GRANTS
Number of % of Total
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted(#) Fiscal Year Price ($Sh) Date
---- ---------- ------------ ----------- -----
Herbert Kurinsky 125,000 6.3% $2.00 3/27/05
William J. Kurinsky 125,000 6.3% $2.00 3/27/05
Robert I. Rabinowitz 60,000 3.0% $2.00 3/27/05
There were no grants of Stock Appreciation Rights to the executive officers
listed above during the fiscal year ended December 31, 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Unexercised Value of Unexercised In-the-
Shares Options as of Money Options
Name Acquired Value December 31, 2000 at December 31, 2000(1)
on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
Herbert Kurinsky 0 -- 475,000/0 $0/$0
William J. Kurinsky 0 -- 500,000/0 $0/$0
Robert I. Rabinowitz 0 -- 328,750/0 $0/$0
- -------------
(1) Based on the closing bid price of the Company's common stock on December 31,
2000 ($.71 per share), less the exercise price for the aggregate number of
shares subject to the options.
Employment Agreements
In January 2000, 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 $256,218
for the first year of the agreement for each, increasing in each case at the
rate of 10% per year. Each will 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. The agreements have been renewed for an additional year.
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 from FMSC, up to 20% of all underwriters and/or placement
agent warrants or options which are granted to FMSC upon the same price, terms
and conditions afforded to FMSC as the underwriter or placement agent. Each
employee also receives 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 respective
agreements.
Incentive Stock Option Plan
In September 1992, the Company adopted the 1992 Incentive Stock Option
Plan. The 1992 Incentive Stock Option 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 Board
of Directors and shareholders approved an amendment to the 1992 Incentive Stock
Option Plan to increase the number of shares reserved for issuance from
2,000,000 to 3,500,000. In June 1998, the Company's shareholders approved a
further amendment to the 1992 Incentive Stock Option Plan to increase the number
of shares reserved for issuance from 3,500,000 to 6,000,000 and in June 2000,
the Company's shareholders approved a further amendment to increase the number
of shares reserved for issuance under the 1992 Incentive Stock Option Plan from
6,000,000 to 8,000,000 (as amended, the "Incentive Plan"). Under the terms of
the Incentive 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 Incentive 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 Incentive
Plan and to establish and amend rules and regulations relating thereto.
Under the Incentive 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 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 Incentive Plan will expire in 2002.
As of March 31, 2001 options to purchase a total of 6,504,998 shares of the
Company's Common Stock have been issued under the Incentive 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
Director 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 380,000 options have been granted to the Company's
Non-Executive members of the Board of Directors.
Senior Management Plan
In 1996, the Company adopted the 1996 Senior Management Incentive Plan (and
as amended, the "Management Plan"). The Management Plan provides for the
issuance of up to 2,000,000 shares of Common Stock either upon issuance of
options issued under the Management Plan or grants of restricted stock or
incentive stock rights. In June 2000, the Company's shareholders approved an
amendment to Management Plan to increase the number of shares reserved for
issuance from 2,000,000 to 4,000,000. Awards may be granted under the Management
Plan to executive management employees by the Board of Directors or a committee
of the board, if one is appointed for this purpose. The Management Plan provides
for four types of awards--stock options, incentive stock rights, stock
appreciation rights, and restricted stock purchase agreements. The stock options
granted under the Management Plan can be either ISOs or non-lSOs similar to the
options granted under the Incentive Stock Option Plan, except that the exercise
price of non-lSOs shall not be less than 85% of the fair market value of the
Common Stock on the date of grant. Incentive stock rights consist of incentive
stock units equivalent to one share of Common Stock in consideration for
services performed for the Company. If services of the holder terminate prior to
the incentive period, the rights become null and void unless termination is
caused by death or disability. Stock appreciation rights allow a grantee to
receive an amount in cash equal to the difference between the fair market value
of the stock and the exercise price, payable in cash or shares of Common Stock.
The Board or committee may grant limited SARs which become exercisable upon a
"change of control" of the Company. A change of control includes the purchase by
any person of 25% or more of the voting power of the Company's outstanding
securities, or a change in the majority of the Board of Directors.
Awards granted under the Management Plan are also entitled to certain
acceleration provisions which cause awards granted under the Management Plan to
immediately vest in the event of a change of control or sale of the Company.
Awards under the Management Plan may be made until 2006. To date, the Company
granted a total of 2,375,000 options under the Senior Management Plan.
Each of the types of Awards that may be granted under the Management Plan
is discussed below.
Stock Options. Under the terms of the 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").
Under the 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 maker 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 Management Plan for such periods as
determined by the Management Plan Administrator; provided however that no option
designated as an ISO granted under the 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 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 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) 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.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
For information concerning the terms of the employment agreements entered
into between the Company and Messrs. Herbert Kurinsky and William J. Kurinsky,
see "Executive Compensation".
FINANCIAL INFORMATION
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2000 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., PARKWAY 109 OFFICE CENTER, 328 NEWMAN
SPRINGS ROAD, RED BANK, NEW JERSEY 07701. Each such request must set forth a
good faith representation that as of May 21, 2001 the person making the request
was the beneficial owner of Common Shares of the Corporation entitled to vote at
the 2001 Annual Meeting of Shareholders.
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
2002 Annual Meeting of Shareholders must be received by the Corporation on or
prior to January 22, 2002 to be eligible for inclusion in the Corporation's
proxy statement and form of proxy to be used in connection with the 2002 Annual
Meeting of Shareholders.
By Order of the Board of Directors
WILLIAM J. KURINSKY, Secretary
Dated: May 22, 2001
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.
EXHIBIT 1
FIRST MONTAUK FINANCIAL CORP.
CHARTER
OF THE
AUDIT COMMITTEE
Organization
There shall be a committee of the board of directors to be known as the
audit committee. The audit committee shall be composed of at least three
directors who are independent of the management of the corporation and are free
of any relationship that, in the opinion of the board of directors, would
interfere with their exercise of independent judgment as a committee member. The
committee shall meet as required throughout the fiscal year, but no less than
four times.
Statement of Policy
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the corporation, and the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit committee to
maintain free and open means of communication between the directors, the
independent auditors, and the financial management of the corporation.
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality. In carrying out
these responsibilities, the audit committee will:
* Review and recommend to the directors the independent auditors
to be selected to audit the financial statements of the
corporation and its divisions and subsidiaries.
* Meet with the independent auditors and financial management of
the corporation to review the scope of the proposed audit for
the current year and the audit procedures to be utilized, and
at the conclusion thereof review such audit, including any
comments or recommendations of the independent auditors.
* Review with the independent auditors and the company's
financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the
corporation, and elicit any recommendations for the
improvement of such internal control procedures or particular
areas where new or more detailed controls or procedures are
desirable. Particular emphasis should be given to the adequacy
of such internal controls to expose any payments,
transactions, or procedures that might be deemed illegal or
otherwise improper. Further, the committee periodically should
review company policy statements.
* Review the financial statements contained in the annual report
to shareholders with management and the independent auditors
to determine that the independent auditors are satisfied with
the disclosure and content of the financial statements to be
presented to the shareholders. Any changes in accounting
principles should be reviewed.
* Provide sufficient opportunity for the independent auditors to
meet with the members of the audit committee without members
of management present. Among the items to be discussed in
these meetings are the independent auditors' evaluation of the
corporation's financial and accounting personnel, and the
cooperation that the independent auditors received during the
course of the audit.
* Review accounting and financial human resources and succession
planning within the company.
* Submit the minutes of all meetings of the audit committee to,
or discuss the matters discussed at each committee meeting
with, the board of directors.
* Investigate any matter brought to its attention within the
scope of its duties, with the power to retain outside counsel
for this purpose if, in its judgment, that is appropriate.
FIRST MONTAUK FINANCIAL CORP.
Annual Meeting of Shareholders - June 22, 2001
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
Friday, June 22, 2001 and at any adjournments thereof, hereby revoking any proxy
heretofore given. The undersigned instructs such proxies to vote:
I. Election of Class II Directors:
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked to vote for the nominee
to the contrary below) listed below
(Instruction: To withhold authority for any individual nominee, strike a
line through the nominee's name in the list below)
Nominees for Class II Directors to Serve until the 2004 Annual Meeting:
NORMA DOXEY BARRY D. SHAPIRO
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
22, 2001, receipt of which is hereby acknowledged.
Either of the proxies or their respective substitutes, who shall be present
and acting shall have and may exercise all the powers hereby granted.
(Continued and to be signed on the reverse side)
_______________________________________________________________________________
(continued from other side)
The shares represented by this proxy will be voted FOR the election of both
of the nominees for Class II Directors. 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:-------------------------------, 2001
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(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.)