April 20, 2001
Dear Fellow Shareholders:
It is our pleasure to invite you to attend Federal Trust Corporation's
2001 Annual Meeting of Shareholders. This year's Annual Meeting will be held at
the Farmer's Market, 200 West New England Street, Winter Park, Florida, on May
25, 2001, at 10:00 a.m., Eastern Time.
The attached Notice of the Annual Meeting of Shareholders and Proxy
Statement attached to this letter describe the formal business that will be
transacted at the Annual Meeting and provide material information concerning
that business.
At the Annual Meeting we will share with you some of the significant
management changes that have been made and our strategy for 2001. Directors and
officers of Federal Trust Corporation, as well as a representative of the
accounting firm, KPMG Peat Marwick LLP, will be present at the Annual Meeting to
respond to your questions.
YOUR VOTE IS IMPORTANT, so please sign and date the enclosed Proxy Card
promptly and return it in the enclosed postage-paid envelope. Should you attend
the Annual Meeting and prefer to vote in person, you will be given that
opportunity.
On behalf of the Board of Directors and all the employees of Federal
Trust Corporation, we look forward to seeing you at the Annual Meeting.
Sincerely,
James V. Suskiewich
Chairman of the Board
FEDERAL TRUST CORPORATION
-------------------------
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 25, 2001
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Shareholders of
Federal Trust Corporation ("Annual Meeting"), will be held at the Farmer's
Market, 200 West New England Street, Winter Park, Florida, on May 25, 2001, at
10:00 a..m., Eastern Time to consider the following:
Proposal I The election of two Class II members of the Board of
Directors;
Proposal II The ratification of the appointment of KPMG Peat
Marwick LLP, as the independent auditors for Federal
Trust Corporation and its wholly-owned subsidiary,
for the fiscal year ending December 31, 2001;
Proposal III The adjournment of the Annual Meeting to solicit
additional proxies in the event there are not
sufficient votes to approve any of the foregoing
Proposals; and
To transact any other business that properly comes before the Annual
Meeting, or any adjournment thereof.
The Board of Directors has fixed the close of business on April 16,
2001, as the record date for the determination of shareholders entitled to
notice of, and to vote at, the Annual Meeting. Only holders of common stock of
record on that date will be entitled to vote at the Annual Meeting, or any
adjournment thereof. In the event there are insufficient votes to approve either
Proposal I or Proposal II, the Annual Meeting may be adjourned pursuant to
Proposal III, to permit further solicitation of proxies by Federal Trust
Corporation.
By Order of the Board of Directors,
James V. Suskiewich
Chairman of the Board
Winter Park, Florida
April 20, 2001
FEDERAL TRUST CORPORATION
655 W. Morse Boulevard
Winter Park, Florida 32789
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PROXY STATEMENT
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GENERAL INFORMATION
Annual Meeting
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DATE: May 25, 2001
TIME: 10:00 a.m. (Eastern Time)
LOCATION: Farmer's Market
200 West New England Street
Winter Park, Florida
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Solicitation and Voting of Proxies
This Proxy Statement and the accompanying Proxy Card are being
furnished to shareholders of record as of the close of business on April 16,
2001, in connection with the solicitation of proxies by the Board of Directors
of Federal Trust Corporation ("Federal Trust"), the parent holding company of
Federal Trust Bank ("Bank"). Proxies obtained by the Board of Directors will be
voted at Federal Trust's 2001 Annual Meeting of Shareholders ("Annual Meeting").
Please note that Federal Trust and the Bank are collectively referred to herein
as the "Company." Federal Trust's Annual Report, including financial statements
for the fiscal year ended December 31, 2000, accompanies this Proxy Statement,
which is first being mailed to shareholders on or about April 20, 2001.
Regardless of the number of shares of common stock that you own, it is
important that your shares be represented by proxy or that you be present at the
Annual Meeting. To vote by proxy, please indicate your vote in the spaces
indicated on the enclosed Proxy Card and return it signed and dated, in the
enclosed postage-paid envelope. Proxies obtained by the Board of Directors will
be voted in accordance with the directions given therein. Where no instructions
are given, proxies will be voted:
"FOR" the election of two Class II director nominees;
"FOR" the ratification of the appointment of KPMG Peat Marwick LLP as
the independent auditors for the fiscal year ending December 31, 2001;
and
"FOR" the adjournment of the Annual Meeting to solicit additional
proxies if there are not sufficient votes to approve Proposal I or
Proposal II.
It is important that your proxy be returned promptly. Therefore,
whether or not you plan to be present at the Annual Meeting, please complete,
sign and date the enclosed Proxy Card and return it in the enclosed postage-paid
envelope.
Revocation of Proxy
Your presence at the Annual Meeting will not automatically revoke your
proxy. You may revoke your proxy at any time prior to its exercise by simply
* delivering a written notice of revocation to Federal Trust;
* delivering a duly executed proxy bearing a later date to
Federal Trust; or
* attending the Annual Meeting and voting in person.
Voting Procedures
Our Articles of Incorporation do not provide for cumulative voting.
Under the Florida Business Corporation Act ("Act"), directors are elected by a
plurality of the votes cast at a meeting at which a quorum is present. Our
Bylaws provide that a majority of shares entitled to vote and represented in
person or by proxy at a shareholder meeting constitutes a quorum. Therefore each
shareholder of record on the record date has the right to vote, in person or by
proxy, the number of shares owned by him or her for as many director nominees as
there are directors to be elected. For example, if you own five shares, you may
cast a maximum of five votes for each director to be elected.
Other matters are approved if affirmative votes cast for a proposal
exceed the votes cast against that proposal at a meeting at which a quorum is
present, unless a greater number of affirmative votes or voting by classes is
required by the Act or our Articles of Incorporation. Abstentions and broker
non-votes have no effect under the Act.
If your shares are held in street name, under certain circumstances,
your brokerage firm may vote your shares. Brokerage firms have authority to vote
their customers' shares on certain "routine" matters, including election of
directors. When a brokerage firm votes its customers' shares on routine matters,
these shares are also counted for purposes of establishing a quorum to conduct
business at the meeting. A brokerage firm cannot vote its customers' shares on
non-routine matters. Accordingly, these shares are not counted as votes against
a non-routine matter, but rather not counted at all for these matters. There are
no non-routine matters being voted on at the Annual Meeting. We, nevertheless,
encourage you to provide instructions to your brokerage firm as to how your
proxy should be voted. This ensures your shares will be voted at the Annual
Meeting.
The close of business on April 16, 2001, has been fixed by the Board of
Directors as the "record date" for determination of shareholders entitled to
notice of, and to vote at, the Annual Meeting, and any adjournment thereof. It
is difficult to ascertain the exact number of our shareholders, because a number
of our shares are held in street name. According to our stock transfer agent, on
the record date, there were 4,947,911 shares of Federal Trust common stock
outstanding, held by approximately 363 shareholders.
2
Certain Stockholders
The following table contains information regarding the only people
known to us to be beneficial owners of 5% or more of the outstanding shares of
Federal Trust common stock as of the record date.
Name and Address of
Beneficial Owner Number of Shares Percent of Class
------------------- ---------------- ----------------
William R. Hough & Co. 492,241(1) 9.95%
100 Second Avenue South, Suite 800
St. Petersburg, Florida 33701
Einar Paul Robsham 488,400(2) 9.87%
PO Box 5183
Cochituate, Massachusetts 01778
James V. Suskiewich 304,684(3) 6.01%
PO Box 1867
Sanford, Florida 32772-1867
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(1) Includes 247,641 shares owned by WRH Mortgage, Inc. and
244,600 shares owned by William R. Hough & Co. as disclosed in
the Form 4 filed with the Securities and Exchange Commission
("SEC") on July 1, 1998.
(2) As disclosed in the Schedule 13(d) filed with the Securities
and Exchange Commission on June 19, 2000.
(3) Includes 98,559 shares held as trustee under Federal Trust's
ESOP with respect to which Mr. Suskiewich exercises sole
voting and investment power, and 120,000 shares covered under
stock options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, certain officers and 10% stockholders, if any, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Such officers, directors and 10% stockholders, if any, are required by
Securities and Exchange Commission regulations to furnish Federal Trust with
copies of all Section 16(a) reports they file.
To the best of Federal Trust's knowledge, during 2000, each of its
directors and executive officers of its common stock timely filed all reports
required by Section 16(a) of the Securities Exchange Act of 1934. To our
knowledge, there are no beneficial owners 10% or more of Federal Trust's common
stock.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors of Federal Trust conducts its business through
meetings of the full Board. During the fiscal year ended December 31, 2000,
Federal Trust's Board of Directors held 11 meetings. 1 All of Federal Trust's
directors attended at least 75% of the total meetings of the Board of Directors
and of the Audit Committee, if they were a member thereof.
3
COMMITTEES OF THE BOARD OF DIRECTORS
In 2000, Federal Trust had only one standing committee, the Audit
Committee, which reviews the Company's auditing, accounting, financial reporting
and internal control functions pursuant to a Charter adopted by the Board of
Directors on July 28, 2000. A copy of the Charter is included in this Proxy
Statement as Exhibit A. The Audit Committee recommends to the Board the
Company's independent auditors and reviews their services. The Audit Committee
is comprised of only non-employee directors, who are all considered independent
under the National Association of Securities Dealers' rules.
As part of its duties, the Audit Committee reviewed and discussed with
both Federal Trust's management and independent auditors:
* the Company's audited financial statements for the fiscal
year ended December 31, 2000;
* those matters required to be discussed by Statement on
Auditing Standards 61; and
* the written disclosures and letter from the independent
auditor regarding its independence as required by Independence
Standards Board Standard No. 1.
Based upon these reviews and discussions, the Audit Committee
recommended that the Company's audited financial statements be included in
Federal Trust's Form 10-KSB for the fiscal year ended December 31, 2000. Members
of the Audit Committee are Dr. Samuel C. Certo, George W. Foster, and Kenneth W.
Hill.
PROPOSAL I -- ELECTION OF DIRECTORS
The Board of Directors is presently comprised of five members. Our
Articles of Incorpora-tion provide that directors shall be divided into three
classes, which each serve for staggered three-year terms. This year, Class II
directors are to be elected. To the best of our knowledge, no director nominee
is being proposed for election pursuant to any agreement between that person and
any other person.
The two nominees named herein have indicated that they are willing to
stand for election and to serve as directors, if elected. Should a director
nominee become unable or unwilling to serve, proxies will be voted for the
election of such other person as the Board of Directors may choose to nominate.
The affirmative vote of a plurality of the votes cast at the Annual
Meeting is needed to elect a director. Abstentions and withheld votes will have
the same effect as votes against a director nominee.
Information relating to the business experience, age and beneficial
ownership of Federal Trust's capital stock of each director nominee and
continuing director is set forth below.
4
DIRECTOR NOMINEES
CLASS II DIRECTORS
TERMS TO EXPIRE IN 2004
Photo
George W. Foster, age 71, is a retired banker and has been a director of Federal
Trust since 1997 and a director of the Bank since 1990. From 1990 through 1993,
he served as President and Chief Executive Officer of the Bank. Mr. Foster
resides in Longwood, Florida.
36,343(1) shares of common stock
Less than 1% of the outstanding common stock
Photo
Aubrey H. Wright, Jr., age 54, has been a director of Federal Trust since 1995.
He has been the Chief Financial Officer of Federal Trust since April 1994, and
Senior Vice President, Chief Financial Officer and a director of the Bank since
June 1993. Mr. Wright resides in Winter Park, Florida.
120,294(2) shares of common stock
2.40% of the outstanding common stock
CONTINUING DIRECTORS
CLASS I DIRECTOR
TERM EXPIRING IN 2003
Photo
Kenneth W. Hill, age 67, has been a director of Federal Trust since 1997 and
director of the Bank since 1995. Mr. Hill, from 1983 through 1995, was the Vice
President and Trust Officer of SunBank, N.A., Orlando, Florida. Mr. Hill resides
in Orlando, Florida.
70,000 (1) shares of common stock
1.40% of the outstanding common stock
CLASS III DIRECTORS
TERMS EXPIRING IN 2002
Photo
Dr. Samuel C. Certo, age 53, has been a director of Federal Trust since 1997 and
a director of the Bank since 1996. He is the former and a Professor of
Management in the Crummer Graduate School of Business at Rollins College in
Winter Park. Since 1986, Dr. Certo has served as a business consultant and has
published textbooks in the areas of management and strategic management. Dr.
Certo resides in Longwood, Florida.
72,000(1) shares of common stock
1.45% of the outstanding common stock
5
Photo
James V. Suskiewich, age 53, has been a director of Federal Trust since 1994 and
is currently Chairman of the Board. He has served as President and Chief
Executive Officer of Federal Trust since July 1996. Since January 1993, he has
been Presi-dent, Chief Executive Officer and a director of the Bank. Mr.
Suskiewich resides in Lake Mary, Florida.
304,684(3) shares of common stock
6.01% of the common stock outstanding
Directors, executive officers and affiliates as a group (10 persons)
794,362 (4)(5) shares of common stock
15.06%(5) of the outstanding common stock
- ----------------------
(1) Includes 25,000 shares covered under stock options.
(2) Includes 70,000 shares covered under stock options and 20,000 shares
owned by Mr. Wright's spouse.
(3) Includes 98,559 shares held as trustee under Federal Trust's ESOP with
respect to which Mr. Suskiewich exercises sole voting and investment
power, and 120,000 shares covered under stock options.
(4) Includes 35,000 shares owned by Dennis J. Harward, a director of the
Bank; 49,503 shares (and 30,000 shares covered under stock options)
owned by Louis E. Laubscher, Vice President and Chief Loan Officer for
the Bank; 22,580 shares (and 15,000 shares covered under stock options)
owned by Jennifer B. Brodnax, Vice President/Operations for the Bank;
10,351 shares owned by Kevin L. Kranz, former Vice President/Loan
Servicing for the Bank; and 13,607 shares (and 15,000 shares covered
under stock options) owned by Thomas J. Punzak, Vice
President/Accounting for the Bank.
(5) Includes 325,000 shares covered under stock options. Percentage based
on 5,272,911 shares, of which 4,947,911 shares were outstanding as of
the record date and 325,000 shares covered under stock options.
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The Board of Directors Recommends that Shareholders Vote "FOR"
the Election of the Two Class II Director Nominees.
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DIRECTOR COMPENSATION
General
Each director of the Company receives a director's fee of $750 for
each quarter of service. Directors receive no per-meeting fees.
1998 Directors' Stock Option Plan
The 1998 Directors' Stock Option Plan (the "1998 Plan") was approved by
Federal Trust's shareholders at the 1998 Annual Meeting. The 1998 Plan
authorizes the granting of non-statutory stock options (options which do not
qualify as incentive stock options).
Each non-employee director was granted an option to purchase 25,000
shares of common stock on the Effective Date (as defined in the 1998 Plan). New
directors elected or appointed to either of the Company's Boards of Directors
may be granted options to purchase shares of common stock, as determined by the
respective Board of Directors in their sole discretion.
6
The per share exercise price at which the shares of common stock may be
purchased must be equal to the fair market value of a share of common stock as
of the date of grant. The exercise price for the options which have been granted
to date is $4.00 per share, the fair market price of the common stock on January
30, 1998. The closing price for the common stock on March 23, 2001, was $2.63
per share. For the purposes of the 1998 Plan, the fair market value of a share
of common stock is the closing sales price of a share of common stock on the
date the option granted (or, if such day is not a trading day on the U.S.
markets, on the nearest preceding trading day), as reported with respect to the
principal market (or the composite of the markets, if more than one), or
national quotation system in which such shares are then traded. If no such
closing prices are reported, the fair market value will be the mean between the
closing high bid and low ask prices of a share of common stock on the principal
market or national quotation system then in use, or if no such quotations are
available, the price furnished by a professional securities dealer making a
market in such shares as selected by the Board.
An option may be exercised at any time on or after six months after the
date of grant up until ten years after the date of grant. Unless terminated, the
1998 Plan shall remain in effect for a period of ten years, ending on the tenth
anniversary of the Effective Date.
EXECUTIVE COMPENSATION
General
Compensation for our executive officers is determined by the respective
Boards of Directors, excluding any director who is also an executive officer.
Current directors who are not executive officers of the Company are Dennis J.
Harward (Bank director only), George W. Foster, Dr. Samuel C. Certo and Kenneth
W. Hill. Initially, the Bank's Chief Executive Officer ("CEO") and President
determines the salary range recommendations for all employees, including
executives other than himself. The CEO and President then presents his
recommendations to the respective Boards, which review and analyze the
information that has been submitted. Thereafter, the Boards determine the
compensation of their respective executive officers, including the compensation
of the CEO and President.
Executive Compensation Policies and Program
Our executive compensation program is designed to:
* Attract and retain qualified management;
* Enhance short-term financial goals; and
* Enhance long-term shareholder value.
We strive to pay each executive officer the base salary that would be
paid on the open market for a fully qualified officer of that position. The
respective Boards of Directors determine the level of base salary and any
incentive bonus plan for the CEO and President of Federal Trust and the Bank and
certain senior executive officers, based upon competitive norms, derived from
annual surveys published by the Florida Bankers' Association and private
companies specializing in executive compensation analysis for financial
institutions. Such surveys provide information regarding compensation of
financial institution officers and employees based on size and geographic
location of the financial institution and serve as a benchmark for determining
executive salaries. Changes to individual base salaries and discretionary bonus
awards are based upon an evaluation of the officer's responsibilities and
7
individual performance standards, along with the Company's overall performance
for the year. Each officer is given the opportunity to earn an annual
performance bonus, generally in the range of approximately 10-40% of his or her
base salary. In fiscal year 2000, bonuses were paid to executive officers for:
(i) the Company's overall performance (based on discretionary evaluation); (ii)
the restructuring of the management team to enable the Company to better
implement the second phase of the Company's corporate strategy; and (iii) the
Company achieving its fifteenth consecutive profitable quarter.
Compensation of the Chief Executive Officer
Federal Trust's CEO and President does not receive compensation, but is
compensated in his position as CEO and President of the Bank. Federal Trust
reimburses the Bank for the time that its CEO and President spends on holding
company matters.
Insider Participation in Compensation Decisions
James V. Suskiewich, Federal Trust's CEO and President, who also is the
CEO and President of the Bank, along with Aubrey H. Wright, Jr., Chief Financial
Officer ("CFO") of Federal Trust, who is also the Senior Vice President and CFO
of the Bank, are both members of the Boards of Directors of Federal Trust and
the Bank. Mr. Suskiewich and Mr. Wright participated in deliberations of the
respective Boards regarding executive compensation, but did not participate in
any deliberations regarding their individual compensation.
Summary Compensation Table
The following Summary Compensation Table shows compensation information
regarding James V. Suskiewich, CEO and President of Federal Trust and of the
Bank, Aubrey H. Wright, CFO of Federal Trust and Senior Vice President and CFO
of the Bank, and Louis L. Laubscher, Vice President and Chief Lending Officer of
the Bank. No other executive officer received compensation at a level required
to be reported herein by Securities and Exchange Commission regulations.
Annual Compensation (1)
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Name and Other Annual Restricted Stock
Principal Position(1) Year Salary Bonus (2) Directors' Fees Compensation(3) Awards(4) Options(5)
- ------------------------ ---- ------ --------- --------------- --------------- ---------------- ----------
James V. Suskiewich 2000 $156,000 $41,000 $17,000 $50,936 14,221 -
CEO and President of 1999 149,615 34,000 17,500 47,818 3,024 -
Federal Trust 1998 145,807 31,000 13,750 39,080 22,562 120,000
CEO and President of the Bank
Aubrey H. Wright, Jr. 2000 98,000 14,029 10,000 29,091 11,351 -
CFO of Federal Trust 1999 94,000 12,000 12,500 26,206 2,011 -
Senior Vice President and 1998 93,254 12,000 11,000 20,488 14,321 70,000
CFO of the Bank
Louis E. Laubscher 2000 88,000 28,705 - 4,284 11,079 -
Vice President and Chief 1999 80,000 23,500 - 4,161 11,390 -
Lending Officer of the Bank 1998 77,053 46,505 - 4,049 - 30,000
[Footnotes to follow on next page]
8
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(1) Includes all compensation in the year earned whether received or
deferred at the election of the executive.
(2) Includes $23,500 and $45,505 in incentive bonuses for Mr. Laubscher
based on resolutions of non-performing loans and REOs in 1999 and 1998,
respectively, and a $28,705 discretionary incentive bonus in 2000.
(3) Includes the estimated value of:
James V. Suskiewich 2000 1999 1998
------------------- ---- ---- ----
Health & Life Insurance Premiums $ 3,637 $ 4,244 $ 4,244
Use of Company automobile 4,900 5,337 5,829
Social/Country Club Dues 4,995 5,117 4,531
Supplemental Retirement Plan 37,404 33,120 24,476
------ ------ ------
Total: $50,936 $47,818 $39,080
====== ====== ======
Aubrey H. Wright, Jr. 2000 1999 1998
--------------------- ---- ---- ----
Health & Life Insurance Premiums $ 4,241 $ 4,222 $ 4,974
Supplemental Retirement Plan 24,850 21,984 15,514
------ ------ ------
Total: $29,091 $26,206 $20,488
====== ====== ======
Louis E. Laubscher 2000 1999 1998
------------------- ---- ---- ----
Health & Life Insurance Premiums $ 4,284 $ 4,161 $ 4,049
===== ===== =====
(4) Includes value of fully vested participation in Federal Trust's
Employee Stock Ownership Plan ("ESOP"). In 1990, Federal Trust adopted
an ESOP, which provides that the Company can make contributions to a
trust fund for the purpose of purchasing shares of Federal Trust common
stock on behalf of the participants. The Company pays the entire cost
of the ESOP and all salaried employees of the Company who have
completed six months of service are eligible to participate. The ESOP
is qualified under Section 497(e)(7) of the Internal Revenue Code of
1986, as amended ("Internal Revenue Code") under which subsidiaries may
act as participating employees. In addition, the ESOP meets all
applicable requirements of the Tax Replacement Act of 1986 and is
qualified under Section 401(c) of the Internal Revenue Code.
(5) On January 30, 1998, the Board of Directors adopted the 1998 Program
for the benefit of officers and other key employees of the Company. The
Program is comprised of four parts: an Incentive Stock Option Plan, a
Compensatory Stock Option Plan, a Stock Appreciation Rights Plan, and a
Performance Plan. The 1998 Program provides for a maximum of 325,000
shares of authorized common stock to be reserved for future issuance
pursuant to stock options granted under one of the four distinct Plans.
The 1998 Program was approved by the shareholders at the 1998 Annual
Meeting of Shareholders. The exercise price of each option is $4.00 per
share, the fair market value of the common stock on January 30, 1998,
which exceeds the market value of such stock. The closing price for the
common stock on March 23, 2001, was $2.63 per share. The stock options
vest at the rate of 20% per year and a stock option may be exercised at
any time on or after six months after the date of grant until ten years
after the date of grant. Unless terminated, this Program shall remain
in effect for a period of ten years ending on the tenth anniversary of
the effective date of the Program.
Employment Contracts
Federal Trust and the Bank have jointly entered into employment
agreements with two of their executive officers, James V. Suskiewich, CEO and
President and Aubrey H. Wright, Jr., CFO of Federal Trust and Senior Vice
President and CFO of the Bank. The Bank has also entered into employment
agreements with Louis E. Laubscher, its Vice President and Chief Lending Officer
and Stephen C. Green, its Executive Vice President and Chief Operating Officer.
The following is a summary of the four employment agreements.
James V. Suskiewich. Mr. Suskiewich's employment agreement was
significantly amended and re-executed on December 18, 1998. Pursuant to its
terms, Mr. Suskiewich is to receive a base salary, plus reimbursement of
reasonable business expenses. In addition, for any quarter in which the Bank's
after-tax earnings are at least 0.50% of its average quarterly assets on an
annualized basis, Mr. Suskiewich is to receive a bonus equal to 3% of the Bank's
quarterly net, pre-tax income. Mr. Suskiewich is also entitled to discretionary
performance bonuses to be paid annually for the duration of the agreement. For
the year ended December 31, 2000, Mr. Suskiewich received a bonus of $41,000.
9
The original term of Mr. Suskiewich's employment agreement was three
years. Each day during the term of the agreement, the agreement automatically
renews for one additional day. Therefore, at all times, Mr. Suskiewich's
agreement has a three-year term. The respective Boards of Directors review the
agreement annually to determine whether the agreement should continue to be
extended. Any party to the agreement may cease the automatic renewals by
notifying the other parties of its intent to not renew. In addition, any party
may terminate the agreement by delivering to the other parties a notice of
termination. The date of termination is either 60 or 90 days (depending on the
reason for termination) after delivery of the notice.
Mr. Suskiewich's employment agreement provides for termination by the
Company for reasons other than for "cause" and by Mr. Suskiewich for "good
reason," as those terms are defined in the agreement. In the event the
employment agreement is terminated by the Company for reasons other than for
"cause" or by Mr. Suskiewich for "good reason," he shall be entitled to
severance payments. The severance payment would be in a lump sum equal to the
total annual compensation for the remainder of the term of the employment
agreement, the performance bonus due for the quarter of termination, an
annualized portion of any long term incentives to later come due, and the amount
of annual club dues for the year of termination multiplied by the number of
years remaining on the term of his employment agreement.
In the event of a change in control of Federal Trust or the Bank, Mr.
Suskiewich will be entitled to a special incentive bonus equal to three times
his annual salary multiplied by the price to book value ratio at which Federal
Trust or the Bank is acquired. The agreement also includes a "gross up" payment
clause, should the severance payments received be subject to federal excise
taxes under Section 4999 of the Internal Revenue Code. Under this scenario,
Federal Trust or the Bank would increase Mr. Suskiewich's severance payment so
that the net proceeds from such payments would equal the amount of severance
payments due under the terms of the employment agreement.
The employment agreement also permits Mr. Suskiewich to terminate his
employment voluntarily. In the event of voluntary termination, except as
previously described herein, all rights and benefits under the contract shall
immediately terminate upon the effective date of such termination.
Aubrey H. Wright, Jr. Mr. Wright's employment agreement became
effective on September 1, 1995, and had an original term of three years. By
September 15th of each subsequent year, Federal Trust and the Bank are to review
Mr. Wright's performance to determine whether the term of the agreement should
be extended for an additional year. Under the employment agreement, Mr. Wright
is entitled to receive a base salary, plus reimbursement of reasonable business
expenses. In addition, for any quarter in which the Bank is "Well Capitalized"
under federal banking regulations and its quarterly after-tax earnings are at
least 0.50% of its average quarterly assets on an annualized basis, Mr. Wright
is to receive a bonus equal to 1% of the Bank's quarterly net, pre-tax income.
He is also entitled to discretionary performance bonuses payable annually for
the duration of the employment agreement. For the year ended December 31, 2000,
Mr. Wright received a bonus of $14,029.
In the event Mr. Wright's employment is terminated for reasons other
than for "just cause" or he terminates his employment for "good reason," as
those terms are defined in his employment agreement, he shall receive as a
severance payment, the total annual compensation due for the remainder of the
10
term of his employment agreement plus any incentive bonus to which he would then
be entitled. In the event of a change in control of Federal Trust or the Bank,
Mr. Wright will be entitled to a special incentive bonus equal to two times his
annual salary then in effect, multiplied by the price to book value ratio at
which Federal Trust or the Bank is acquired. However, if he accepts employment
with the acquiror, he shall instead receive a bonus of 50% of his salary then in
effect, multiplied by the price to book value ratio at which Federal Trust or
the Bank is acquired.
The employment agreement permits Mr. Wright to terminate his employment
voluntarily. In the event of voluntary termination, except as previously
described herein, all rights and benefits under the contract shall immediately
terminate upon the effective date of such termination.
Louis E. Laubscher. Mr. Laubscher's employment agreement became
effective on February 1, 1999. The agreement replaces a previous Employee
Severance Agreement between Mr. Laubscher and the Bank. Under the terms of the
employment agreement, Mr. Laubscher is entitled to receive a base salary, plus
reimbursement of reasonable business expenses. He is also entitled to
discretionary performance bonuses payable annually for the duration of the
agreement and to participate in any bonus and incentive programs adopted by the
Bank. For the year ended December 31, 2000, Mr. Laubscher received a performance
bonus of $28,075.
The original term of Mr. Laubscher's employment agreement was one year.
Each day during its term, however, the agreement automatically renews for one
additional day so that the agreement, at all times, has a one year term. Either
party to the agreement may cease the automatic renewals by notifying the other
party of its intent to not renew. In addition, either party may terminate the
agreement by delivering a notice of termination to the other party. A
termination is effective 30 days after delivery of the notice.
Mr. Laubscher's employment agreement provides for termination by the
Bank for reasons other than for "just cause," as well as by Mr. Laubscher for
"good reason," as those terms are defined in the employment agreement. In the
event his employment agreement is terminated by the Bank for reasons other than
for "just cause" or by Mr. Laubscher for "good reason," he would be entitled to
severance payments.
In the event Mr. Laubscher's employment is terminated by the Bank for
other than "just cause" or by Mr. Laubscher for "good reason," he will be
entitled to his annual base salary and any bonus he would have then been
entitled to under the agreement. In the event of termination due to a change in
control, he will be entitled to a sum equal to two-times his annual base salary.
Mr. Laubscher will receive these sums in semi-monthly instalments. Furthermore,
for the longer of one year or the remaining term of the agreement, the Bank is
to maintain in full force and effect, any benefit plans or programs Mr.
Laubscher was entitled to participate in at the time of his termination.
In addition, the employment agreement permits Mr. Laubscher to
terminate his employment voluntarily. In the event of voluntary termination,
except as previously described herein, all rights and benefits under the
contract shall immediately terminate upon the effective date of such
termination.
Stephen C. Green. Mr. Green's employment agreement became effective on
November 1, 2000. Under the terms of the employment agreement, Mr. Green is
entitled to receive a base salary, plus reimbursement of reasonable business
expenses. He is also entitled to performance bonuses payable annually at the
11
discretion of the Bank's CEO and President and to participate in any bonus and
incentive programs adopted by the Bank.
Mr. Green's employment agreement became effective on November 1, 2000,
and had an original term of two years. On the second anniversary of the
agreement and each succeeding anniversary thereafter until Mr. Green's 65th
birthday, Federal Trust and the Bank are to review Mr. Green's performance to
determine whether the term of the agrrement should be extended for an additional
year.
Mr. Green's employment agreement provides for termination by the Bank
for reasons other than for "cause," as well as by Mr. Green for "good reason,"
as those terms are defined in the employment agreement. In the event his
employment agreement is terminated by the Bank for reasons other than for
"cause" or by Mr. Green for "good reason," he would be entitled to severance
payments.
In the event Mr. Green's employment is terminated by the Bank for other
than "cause," or by Mr. Green for "good reason," he will be entitled to his base
salary for the remaining term of the agreement. In the event of termination due
to a change in control, he will be entitled to a sum equal to two times his
annual base salary. Mr. Green will receive these sums in semi-monthly
installments. Furthermore, for the shorter of: (i) the remaining term of the
agreement; (ii) one year; or (iii) the period of time ending on the date Mr.
Green is eligible to participate in a comparable plan, the Bank is to maintain
in full force and effect any benefit plans or programs Mr. Green was entitled to
participate in at the time of his termination.
In addition, the employment agreement permits Mr. Green to terminate
his employment voluntarily. In the event of voluntary termination, except as
previously described herein, all rights and benefits under the contract shall
immediately terminate upon the effective date of such termination.
1998 Key Employee Incentive Stock Compensation Program
The 1998 Key Employee Stock Compensation Program (" 1998 Program") was
approved by the shareholders at the 1998 Annual Meeting. The Program is for the
benefit of officers and other key employees of the Company. The 1998 Program is
comprised of four parts: an Incentive Stock Option Plan, a Compensatory Stock
Option Plan, a Stock Appreciation Rights Plan and a Performance Plan.
The 1998 Program provides for a maximum of 325,000 shares of authorized
common stock to be reserved for future issuance pursuant to the exercise of
stock options ("Options") granted under the 1998 Program, unless otherwise
adjusted. Stock appreciation rights, which enable the recipient to elect payment
wholly or partially in cash based upon increases in the market value of the
stock since the date of the grant, may also be awarded under the 1998 Program.
Options granted under the 1998 Program are exercisable in one or more
installments and may be exercisable on a cumulative basis, as determined by a
committee formed to administer the 1998 Program. Options are exercisable for a
term not longer than ten years. Options are not transferable and will terminate
within a period of time following termination of employment. In the event of a
12
change in control or a threatened change in control, all Options granted before
such event shall become immediately exercisable; provided, however, that no
Options shall be exercisable for a period of six months from the date of grant.
The term "control" generally means the acquisition of 10% or more of the voting
securities of Federal Trust by any person or group of persons. This provision
may have the effect of deterring hostile changes in control by increasing the
costs of acquiring control.
Options granted under the Program are either "incentive stock options"
within the meaning of Section 422A of the Internal Revenue Code, as amended,
which are designed to result in beneficial tax treatment to the employee but no
tax deduction to Federal Trust, or "compensatory stock options" which do not
give the employee certain benefits of an incentive stock option, but will
entitle Federal Trust to a tax deduction when the Options are exercised. The
Option exercise price of incentive stock options may not be less than the fair
market value of common stock on the date the Option is granted. Compensatory
stock options may be exercisable at a price equal to or less than the fair
market value of a share of common stock at the time of the grant of the Option.
At December 31, 2000, no compensatory stock options had been granted.
A committee consisting of not less than three directors of Federal
Trust (none of whom is a full-time officer or other salaried employee of Federal
Trust or the Bank) has been given authority to administer the Program and to
grant Options, stock appreciation rights and share awards thereunder. The
current Program Administrators are George W. Foster, Kenneth W. Hill and Dr.
Samuel C. Certo. The Program Administrators may make grants under the 1998
Program at its discretion from time to time to full-time employees of the
Company, including those who are directors and officers. Directors who are not
full-time salaried employees are not eligible to participate in the 1998
Program.
The following table shows the incentive stock options granted under the
1998 Program to certain officers of the Company. No consideration has been
received by Federal Trust in return for the grant of the Options, although
consideration would be received upon exercise of t 1
he Options. The exercise price of each Option is $4.00 per share, the fair
market value of the common stock on January 30, 1998, based upon the "bid price"
on that date. For financial reporting purposes, there will be no charge to the
income of Federal Trust in connection with the grant or exercise of an Option.
As of March 23, 2001, the market value of the common stock was $2.63 per share.
Number of Shares
Subject to
Name Title Options Granted
------------------- ------------------------- ---------------
James V. Suskiewich President/CEO 120,000
Aubrey H. Wright, Jr. Senior Vice President/CFO 70,000
Louis E. Laubscher Vice President/CLO 30,000
Jennifer B. Brodnax Vice President/Operations 15,000
Thomas J. Punzak Vice President/Accounting 15,000
------
Total 250,000
=======
The grant of stock appreciation rights would require charges to the
income of Federal Trust based on the amount of the appreciation, if any, in the
average market price of the common stock to which the appreciation rights are
related over the option price of those shares. In the event of a decline in the
market price of our common stock subsequent to a charge against earnings related
13
to the estimated costs of stock appreciation rights, a reversal of prior charges
is made in the amount of such decline (but not to exceed aggregate prior
increases). Share awards also require a charge to income equal to the amount of
the award at the time it becomes likely that the shares will be awarded, with
subsequent increases or decreases in the market price of the common stock prior
to the actual awarding of the shares treated in the same manner as stock
appreciation rights. No stock appreciation rights or share awards have been
granted or are presently intended to be granted under the 1998 Program.
The terms of the 1998 Program may be amended by the Program
Administrators except that no amendment may increase the maximum number of
shares included in the 1998 Program, change the exercise price of incentive
stock options, increase the maximum term established for any Option, stock
appreciation right or share award, or permit any grant to a person who is not a
full-time employee of the Company.
Employee Stock Ownership Plan
All full-time salaried employees of the Company are participants in the
Employee Stock Ownership Plan ("ESOP"). Executive officers are eligible to
participate in the ESOP, but directors are not eligible unless they are also
full-time salaried employees. A participant's interest in the ESOP becomes
vested upon the participant's fifth anniversary with the Company. As of December
31, 2000, ten employees had vested interests in the ESOP.
ESOP contributions are determined annually by the respective Board of Directors,
taking into consideration prevailing financial conditions, the Company's fiscal
requirements and other factors deemed relevant by the Board. In general,
contributions of up to 15% of total compensation paid to employees during the
year can be made to the ESOP. The contribution made on behalf of each
participant equals the proportion that each such participant's compensation for
the year bears to the total compensation of all participants for such year. In
2000 and 1999, cash contributions of $124,244 and $7,300, respectively, were
made to the ESOP. The ESOP 1 currently holds 98,559 shares of Federal Trust
common stock, or 1.99% of the outstanding shares.
TRANSACTIONS WITH MANAGEMENT
Indebtedness of Management
In 1999, the Boards of Directors of Federal Trust and the Bank amended
their loan policies to allow, on occasion, loans to be made to directors,
officers and employees. Loans made by the Bank are also subject to the
provisions of Section 22(h) of the Federal Reserve Act. Any credit extended by
the Bank to directors, executive officers and, to the extent otherwise
permitted, principal shareholders, or any affiliates thereof must be: (i) on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions by the Bank with
non-affiliated parties; and (ii) not involve more than the normal risk of
repayment or present other unfavorable features.
In February 2000, Federal Trust loaned five of the Company's directors
and officers funds to purchase Federal Trust common stock in the open market.
The aggregate amount loaned was $222,477. The largest single loan was $50,440.
All five loans are at 8% interest and require only interest payments for three
years, at which time the principal comes due. Each of these loans is secured by
the Federal Trust common stock purchased with the loan's proceeds.
14
Transactions With Certain Related Persons
From January 1, 1990, to December 31, 2000, Federal Trust leased its
main office from John Martin Bell, a former director and major shareholder. The
original term of the lease was for ten years, however the size of the leased
premises and amount of annual rent have been modified from time to time. The
total amount paid for rent and common area maintenance fees for 2000 was
$326,075. Although the lease provided for two ten-year extension periods,
Federal Trust declined to renew the lease. The lease expired on December 31,
2000, at which time Federal Trust relocated its main office to a two-story
building, on the corner of Morse Boulevard and Pennsylvania Avenue in Winter
Park, Florida.
When a transaction involves the Company and an officer, director,
principal shareholder or affiliate, it is the Company's policy that the
transaction must be on terms no less favorable to Federal Trust than could be
obtained from an unaffiliated party. Any such transactions must be approved in
advance by a majority of Federal Trust's or the Bank's independent and
disinterested directors. The transactions disclosed above are consistent with
this policy.
PROPOSAL II -- RATIFICATION OF THE APPOINTMENT OF THE
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2001
Following consultation with the Audit Committee, the Board of Directors
intends to retain the accounting firm of KPMG Peat Marwick LLP as the
independent auditors for the Company for the fiscal year ending December 31,
2001. A representative from the firm is expected to be present at the Annual
Meeting to make a statement and respond to shareholder questions.
Audit Fees: The aggregate fees billed for professional services by KPMG
Peat Marwick LLP, in connection with the audit of the annual financial
statements for the fiscal year ended December 31, 2000, and the reviews of the
financial statements included in Federal Trust's quarterly filings with the
Securities and Exchange Commission were $75,000.
All Other Fees: In addition to fees billed for audit services and
interim reviews of financial statements for 2000, KPMG Peat Marwick LLP, billed
the Company $14,500, which was substantially for tax-related services.
- --------------------------------------------------------------------------------
The Board of Directors Recommends that Shareholders Vote "For"
the Appointment of KPMG Peat Marwick, LLP as the
Independent Auditors for the Fiscal Year Ending December 31, 2001.
- --------------------------------------------------------------------------------
PROPOSAL III-- ADJOURNMENT OF ANNUAL MEETING
The Board of Directors seeks your approval to adjourn the Annual
Meeting in the event that there are not a sufficient number of votes to approve
Proposal I or Proposal II at the Annual Meeting. In order to permit proxies that
have been timely received by Federal Trust to be voted for an adjournment, we
are submitting this Proposal as a separate matter for consideration. If it is
necessary to adjourn the Annual Meeting and the adjournment is for a period of
15
less than 30 days, no notice of the time or place of the reconvened Annual
Meeting will be given to shareholders, other than an announcement made at the
Annual Meeting.
- --------------------------------------------------------------------------------
The Board of Directors Recommends that Shareholders Vote "For"
the Adjournment of the Annual Meeting.
- --------------------------------------------------------------------------------
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2002 Annual
Meeting should be submitted by certified mail, return receipt requested, and
must be received by Federal Trust at its corporate office located at 655 W.
Morse Boulevard, Winter Park, Florida 32787, on or before December 4, 2001, to
be eligible for inclusion in next year's Proxy Statement. However, if next
year's annual meeting of shareholders is held on a date more than 30 days before
or after the corresponding date of the 2001 Annual Meeting, any shareholder who
wishes to have a proposal included in the Proxy Statement for that meeting must
deliver a copy of the proposal to Federal Trust within a reasonable time before
the Proxy Statement is made. Federal Trust reserves the right to decline to
include in the Proxy Statement any shareholder's proposal which does not comply
with the Proxy Rules (Regulation 14A) adopted under the Securities Exchange Act
of 1934, as amended.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN
ANNUAL MEETING AND SHAREHOLDER NOMINATIONS
Our Bylaws provide an advance notice procedure for bringing certain
business, including nominations for directors, before an Annual Meeting. For a
shareholder to properly bring business before an Annual Meeting, the shareholder
must give written notice to Federal Trust's Corporate Secretary not less than
ten days before the time originally fixed for the Annual Meeting.
SOLICITATION
The cost of soliciting proxies on behalf of the Board of Directors for
the Annual Meeting will be borne by Federal Trust. Proxies may be solicited by
directors, officers or our regular employees, in person or by telephone, e-mail
or mail. We are requesting persons and entities holding shares in their names,
or in the names of their nominees, to send proxy materials to, and obtain
proxies from, such beneficial owners. Those persons and entities will be
reimbursed for their reasonable out-of-pocket expenses. We have also retained
Regan & Associates, New York, New York, to aid in the solicitation of
shareholders, brokers, banks and other institutional investors for an estimated
fee of $4,000.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE
THE ANNUAL MEETING
The Board of Directors knows of no other business that will be
presented for consideration at the Annual Meeting, other than those matters
described in this Proxy Statement. If any other matter should properly come
before the Annual Meeting, however, it is intended that the proxies solicited
hereby will be voted in accordance with the judgment of the person or persons
voting the proxies. If you do not wish to extend such authority, you may limit
16
your proxy by marking the appropriate box on the Proxy Card.
AVAILABILITY OF OTHER INFORMATION
Accompanying this Proxy Statement is Federal Trust's 2000 Annual
Report, which includes the Company's audited financial statements. Additional
copies of Federal Trust's Annual Report or Form 10-KSB are available to
shareholders at no charge. Any shareholder who would like an additional copy may
contact Aubrey H. Wright, Jr., Chief Financial Officer, Federal Trust
Corporation, PO Box 1867, Sanford, Florida 32772-1867, telephone number (407)
323-1833.
Federal Trust currently files periodic reports (including Form 10-KSBs,
Form 10-QSBs, Proxy Statements, etc.) with the Securities and Exchange
Commission. These periodic reports are filed electronically via EDGAR by Federal
Trust and can be inspected and copied at the public reference facilities
maintained by the Securities and Exchange Commission at its Public Reference
Section, 450 Fifth Street, NW, Washington, DC 20549. The Securities and Exchange
Commission maintains a website that contains registration statements, reports,
proxy and information statements and other information regarding registrants
that file electronically with the Securities and Exchange Commission.
Information filed by Federal Trust is available for review on this website. The
address of the website is www.sec.gov.
-----------
Federal Trust Corporation
Dated: April 20, 2001
17
FEDERAL TRUST CORPORATION
AUDIT COMMITTEE CHARTER
WHEREAS, the National Association of Securities Dealers, Inc. ("NASD")
has adopted rules requiring those companies whose securities are listed on NASD
exchanges to establish audit committees of their Boards of Directors and adopt
charters for those committees; and
WHEREAS, in compliance with such rules, Federal Trust Corporation's
("Federal Trust") Board of Directors ("Board") has established an Audit
Committee and adopted this Charter for its governance; and
WHEREAS, Federal Trust's independent outside auditor is ultimately
accountable to the Board and the Audit Committee, as representatives of Federal
Trust's shareholders; and
WHEREAS, the Board and the Audit Committee have the ultimate authority
to evaluate and nominate the outside independent auditor to be proposed for
shareholder approval in the Proxy Statement for each of Federal Trust's Annual
Meetings of Shareholders.
NOW THEREFORE, the Audit Committee of the Board of Directors of Federal
Trust Corporation shall be established and governed in accordance with the
provisions of this Charter:
Section 1. Composition of the Audit Committee.The Audit Committee shall
---------
be comprised of three members of the Board. Such members must be Independent
Directors, as defined in NASD Rule 4200(a)(14), and must be able to read and
understand fundamental financial statements, including balance sheets, income
statements, and cash flow statements. The members of the Audit Committee shall
be elected each year by the whole Board and may only be removed therefrom
simultaneously with their removal from the Board, pursuant to methods provided
by Federal Trust's Articles of Incorporation. The initial members of the Audit
Committee, to serve in 2000, shall be: Dr. Samuel C. Certo, George W. Foster,
and Kenneth W. Hill.
Section 2. Responsibilities of the Audit Committee. The Audit Committee
---------
shall be responsible for the oversight of all external audit programs of Federal
Trust. Such responsibilities shall include, but not be limited to:
(a) Ensuring receipt from Federal Trust's independent outside
auditor of a formal written statement delineating all
relationships between such auditor and Federal Trust,
consistent with Independence Standards Board Standard 1;
(b) Actively engaging Federal Trust's independent outside auditor
in a dialogue with respect to any disclosed relationships or
services that may impact the objectivity and independence of
that auditor;
Exhibit A to the Proxy Statement
Page 1 of 3
(c) Taking, or recommending that the Board take, appropriate
action to ensure the independence of Federal Trust's
independent outside auditor;
(d) Continually evaluating the performance and independence of
Federal Trust's independent outside auditor;
(e) Prior to the printing of the Proxy Statement for each of
Federal Trust's Annual Meetings of Shareholders, selecting and
recommending a nominee to the Board to be Federal Trust's
independent auditor;
(f) Reviewing and assessing the adequacy of this Charter on an
annual basis and making recommendations to the Board regarding
the audit programs and policies of Federal Trust.
Section 3. Governance and Processes of the Audit Committee.
---------
(a) Organizational Meeting. Each year, within four weeks of its
members having been elected by the Board, the Audit Committee
shall hold an "Organizational Meeting". At the Organizational
Meeting, the Audit Committee shall elect a Chairperson, who
shall preside over all meetings of the Audit Committee for
that year, and shall establish a schedule for its regular
meetings, pursuant to Section 3(b) herein.
(b) Regular Meetings. The Audit Committee shall meet quarterly as
scheduled by the Audit Committee at the Organizational
Meeting. The quarterly meetings must be held prior to the
filing of Federal Trust's Form 10-QSB or Form 10-KSB with the
Securities and Exchange Commission in each respective quarter.
(c) Special Meetings. A special meeting of the Audit Committee may
be called by the Chairperson or by both of the other two
members of the Audit Committee, by providing all other members
of the Audit Committee with five days' written notice of the
date and time of the special meeting.
(d) Location of Meetings. All regular and special meetings shall
be held at Federal Trust's corporate headquarters, or at such
other place as all members of the Audit Committee may agree
upon.
(e) Attendance. Except in the case of emergency, all members of
the Audit Committee are expected to attend all meetings,
Organizational, regular, and special, of the Audit Committee.
Exhibit A to the Proxy Statement
Page 2 of 3
(f) Guests. All meetings of the Audit Committee shall be closed to
all non-members. However, by majority vote, the Audit
Committee may invite guest(s) to attend its meetings to either
observe, respond to questions or make presentations. Such
potential guests may include, without limitation, Federal
Trust's President, Chief Financial Officer or representatives
from Federal Trust's outside independent auditor.
(g) Interaction with Auditor. The independent outside auditor and
the Audit Committee are to have direct access to each other.
Such access is to be used, without limitation, to make
inquiries and reports and to define and examine the scope and
quality of the services provided to Federal Trust by the
independent outside auditor.
(h) Governance. All actions and recommendations of the Audit
Committee shall be determined by majority vote of the Audit
Committee at a duly called and held meeting thereof.
WHEREFORE, this Audit Committee Charter was adopted by the Board of
Directors of Federal Trust Corporation this 28th day of July, 2000.
Attest:
/s/ James V. Suskiewich /s/ Lori MacTavish
- ----------------------------------------- ---------------------------
James V. Suskiewich, Lori MacTavish,
Chairman of the Board of Directors Corporate Secretary
(SEAL)
FEDERAL TRUST CORPORATION - REVOCABLE PROXY
2001 ANNUAL MEETING OF SHAREHOLDERS
This Proxy is being solicited on behalf of the Board of Directors.
The undersigned hereby appoints James V. Suskiewich and Dr. Samuel C. Certo, and
each of them with full powers of substitution, to act as proxy for, and
attorney-in-fact, to vote all shares of the common stock of Federal Trust
Corporation which the undersigned may be entitled to vote at the Annual Meeting
of Shareholders to be held at the Farmers Market, 200 West New England Street,
Winter Park, Florida on May 25, 2001, at 10:00 a.m., and at any and all
adjournments thereof.
The undersigned shareholder of Federal Trust Corporation may revoke this Proxy
at any time before it is voted by either delivering to Federal Trust Corporation
a written notice of revocation, delivering to Federal Trust Corporation a duly
executed Proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
THE FOLLOWING PROPOSALS ARE BEING ACTED UPON:
PROPOSAL I: The election of two Class II directors to serve one year terms.
WITHHOLD
FOR AUTHORITY
--- ---------
[ ] [ ]
INSTRUCTION. To withhold your vote for any individual nominee, strike
a line through the nominee's name listed below.
GEORGE W. FOSTER -- AUBREY H. WRIGHT, JR.
PROPOSAL II: The ratification of KPMG Peat Marwick LLP, as
the independent auditors for Federal Trust Corpora-ion for
the fiscal year ending December 31, 2001.
FOR AGAINST ABSTAIN
--- ------- -------
PROPOSAL III: The adjournment of the Annual Meeting to
solicit additional proxies in the event there are not
sufficient votes to approve Proposals I or II.
FOR AGAINST ABSTAIN
--- ------- -------
IN THEIR DISCRETION THE PROXY HOLDER(S) ARE AUTHORIZED TO TRANSACT AND TO VOTE
UPON SUCH OTHER BUSINESS as may properly come before this Annual Meeting or any
adjournments thereof, unless indicated otherwise by marking this box o.
NOTE: When properly executed, this Proxy will be voted in the manner directed by
the undersigned shareholder. UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE PROPOSALS LISTED.
- ------------------------------ X
-------------------------- --------------
[Label] Signature Date
- ------------------------------
X
-------------------------- --------------
Signature if held jointly Date
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, agent, trustee or guardian, please give full
title. If shareholder is a corporation, please sign in full corporate name by
president or other authorized officer. If shareholder is a partnership, please
sign in partnership name by authorized person. The undersigned acknowledges
receipt from Federal Trust Corporation, prior to the execution of this Proxy, of
a Notice of the Annual Meeting, a Proxy Statement dated April 20, 2001, and the
2000 Annual Report.