April 12, 2002
Dear Fellow Shareholders:
It is my pleasure to invite you to attend Federal Trust Corporation's 2002
Annual Meeting of Shareholders. The Annual Meeting is being held at the Farmers'
Market, 200 West New England Street, Winter Park, Florida, on May 24, 2002, at
10:00 a.m., Eastern Time.
The attached Notice of the Annual Meeting of Shareholders and Proxy
Statement 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 discuss the progress we made in 2001, as
well as our goals for 2002. Directors and officers of Federal Trust Corporation,
as well as a representative of the accounting firm, Hacker, Johnson & Smith,
P.A., will be present 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 of our employees, 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 24, 2002
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Shareholders of
Federal Trust Corporation ("Annual Meeting"), will be held at the Farmers'
Market, 200 West New England Street, Winter Park, Florida, on May 24, 2002, at
10:00 a.m., Eastern Time to consider the following:
Proposal I The election of two Class III members and one Class II member
of the Board of Directors;
Proposal II The amendment of the 1998 Key Employee Stock Compensation
Program;
Proposal III The amendment of the 1998 Directors' Stock Option Plan;
Proposal IV The ratification of the appointment of Hacker, Johnson &
Smith, P.A., as the independent auditors for the fiscal year
ending December 31, 2002;
Proposal V 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.
The Board of Directors has fixed the close of business on March 29, 2002,
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the Annual Meeting. Only record holders of common stock on that
date will be entitled to vote at the Annual Meeting, or at any adjournment. In
the event there are insufficient votes to approve any of Proposals I, II, III or
IV, the Annual Meeting may be adjourned pursuant to Proposal V, to permit
further solicitation of proxies by the Board of Directors.
By Order of the Board of Directors,
James V. Suskiewich
Chairman of the Board
Winter Park, Florida
April 12, 2002
FEDERAL TRUST CORPORATION
312 West First Street, Suite 400
Sanford, Florida 32771
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PROXY STATEMENT
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GENERAL INFORMATION
Annual Meeting
- --------------------------------------------------------------------------------
DATE: May 24, 2002
TIME: 10:00 a.m. (Eastern Time)
LOCATION: Farmers' Market
200 West New England Street
Winter Park, Florida
- --------------------------------------------------------------------------------
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 March 29, 2002, 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 2002 Annual Meeting of Shareholders ("Annual Meeting"). Please
note that we collectively refer to Federal Trust and the Bank as the "Company"
in this Proxy Statement. Our Annual Report, including financial statements for
the fiscal year ended December 31, 2001, accompanies this Proxy Statement, which
is first being mailed to you and our other shareholders on or about April 12,
2002.
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. Where no instructions, are
given, proxies will be voted:
"FOR" the election of the two Class III and one Class II directors;
"FOR" the amendment of the 1998 Key Employee Stock Compensation Program;
"FOR" the amendment of the 1998 Directors' Stock Option Plan;
"FOR" the ratification of the appointment of Hacker, Johnson & Smith, P.A.,
as our independent auditors for the fiscal year ending December 31, 2002;
and
"FOR" the adjournment of the Annual Meeting to solicit additional proxies
if there are not sufficient votes to approve any proposals.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
It is important that your proxy be returned promptly. Therefore, whether or
not you plan to attend 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:
o delivering a written notice of revocation to us;
o delivering a duly executed proxy bearing a later date to us; or
o voting in person at the Annual Meeting.
Voting Procedures
Our Articles of Incorporation do not provide for cumulative voting. Under
Florida law, 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 you will have the right to vote, in person or by
proxy, the number of shares which you own 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 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 Florida
law or our Articles of Incorporation. In determining whether a proposal has been
approved, abstentions and broker non-votes have no effect.
If your shares are held in street name, under certain circumstances, your
brokerage firm may vote your shares. Brokerage firms have authority to
independently vote their customers' shares on certain "routine" matters,
including election of directors. When a brokerage firm votes its customers'
shares on routine matters, those shares are also counted for purposes of
establishing a quorum at the meeting. A brokerage firm cannot independently vote
its customers' shares on non-routine matters. Accordingly, those shares are not
counted as votes against a non-routine matter, but rather not counted at all for
such a matters. Proposal II, approval of an amendment to the 1998 Key Employee
Stock Compensation Program, and Proposal III, approval of an amendment to the
1998 Directors' Stock Option Plan, are considered non-routine matters. We,
therefore, 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 March 29, 2002, has been fixed by our 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. On
the record date, there were 5,492,782 shares of Federal Trust common stock
outstanding, held by approximately 348 shareholders of record.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
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) 8.96%
100 Second Avenue South, Suite 800
St. Petersburg, Florida 33701
A. George Igler 525,771(2) 9.56
1501 Park Avenue East
Tallahassee, Florida 32301
Einar Paul Robsham 488,400(3) 8.89
Post Office Box 5183
Cochituate, Massachusetts 01778
James V. Suskiewich 325,889(4) 5.81
Post Office Box 1867
Sanford, Florida 32772-1867
- ----------------------
(1) Includes 247,671 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 on July 1, 1998.
(2) Includes 506,538 shares held as Interim Voting Trustee, 7,500 shares
covered under presently exercisable stock options, and 9,233 shares
held as a joint tenant with the right of survivorship. An application
has been filed with the Office of Thrift Supervision to permit James V.
Suskiewich to own up to 25% of Federal Trust's outstanding common
stock. If the application is approved, the 506,538 shares will be
transferred to Mr. Suskiewich, as Voting Trustee. While the application
is pending, however, Mr. Igler is serving as Interim Voting Trustee.
Pursuant to the terms of the Voting Trust Agreement, the Voting Trustee
has sole voting power over the shares, but may not sell or otherwise
alienate the shares. The Voting Trust shall terminate upon the earlier
of: (i) July 31, 2006; (ii) the cessation of Mr. Suskiewich's service
on Federal Trust's Board of Directors; (iii) a change-in-control of
Federal Trust; (iv) Federal Trust's exercise of an option to purchase
the Sanford office building; or (v) the resignation of Mr. Suskiewich
as Voting Trustee.
(3) As disclosed in the Schedule 13(d) filed with the Securities and
Exchange Commission on June 19, 2000.
(4) Includes 116,954 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 presently exercisable stock
options. Please see footnote (2) regarding shares held under a Voting
Trust Agreement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and greater than 10% stockholders, to file reports
of stock ownership and changes in ownership with the Securities and Exchange
Commission. Such stockholders are required by Securities and Exchange Commission
regulations to furnish us with copies of all Section 16(a) reports they file.
To the best of our knowledge, during 2001, each of our directors and
executive officers timely filed all reports required by Section 16(a), with the
exception of A. George Igler, who filed his Form 3 late. To our knowledge, there
are no beneficial owners of 10% or more of Federal Trust common stock.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
3
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors of Federal Trust conducts its business through
meetings of the full Board. During 2001, the Board of Directors held nine
meetings. All of Federal Trust's directors attended at least 75% of the total
meetings of the Board of Directors and, if they were a member, of the Audit
Committee.
COMMITTEES OF THE BOARD OF DIRECTORS
In 2001, Federal Trust's Board had only one standing committee, the Audit
Committee. This committee reviews our auditing, accounting, financial reporting
and internal control functions pursuant to a Charter adopted by the Board of
Directors on July 28, 2000. The Audit Committee recommends to the Board our
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 our
management and independent auditors:
o our audited financial statements for the fiscal year ended December
31, 2001;
o those matters required to be discussed by Statement on Auditing
Standards 61; and
o the written disclosures and letter from the independent auditors
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 our Form 10-KSB
for the fiscal year ended December 31, 2001. Members of the Audit Committee are
Dr. Samuel C. Certo, George W. Foster, Kenneth W. Hill (Chairman) and A. George
Igler (who joined the Audit Committee in the fourth quarter of 2001).
PROPOSAL I
ELECTION OF DIRECTORS
The Board of Directors is presently comprised of five members. Our Articles
of Incorporation provide that directors are divided into three classes, which
serve for staggered three-year terms. This year, two Class III and one Class II
directors are to be elected. On July 1, 2001, Aubrey H. Wright, Jr. resigned
from the Board to permit the appointment of another outside director. On October
26, 2001, A. George Igler was elected to fill that vacancy. Mr. Wright continues
to serve as Chief Financial Officer of Federal Trust and as a director, Senior
Vice President and Chief Financial Officer of the Bank.
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
three nominees 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.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
4
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 our common stock of each director nominee and continuing director
is described below.
-------------------------
DIRECTOR NOMINEES
-------------------------
CLASS III DIRECTORS
TERMS TO EXPIRE IN 2005
Dr. Samuel C. Certo, age 55, 72,000(1) shares of common stock
has been a director of Federal 1.30% of the outstanding common stock
Trust since 1997 and a director
of the Bank since 1996. He is
the former Dean 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 text- books
in the areas of management and
strategic management. Dr. Certo
resides in Longwood, Florida.
James V. Suskiewich, age 54, 325,889(2) shares of common stock
has been a director of Federal 5.81% of the common stock outstanding
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 President, Chief
Executive Officer and a
director of the Bank.
Mr. Suskiewich resides in Lake
Mary, Florida.
CLASS II DIRECTOR
TERM TO EXPIRE IN 2004
A. George Igler, age 50, was 525,771(3) shares of common stock
elected to the Board in 9.56% of the outstanding common stock
October, 2001. Since 1992, he
has been a principal in the law
firm of Igler & Dougherty,
P.A., which specializes in
banking, corporate and
securities law. Igler &
Dougherty, P.A., has served as
the Company's corporate counsel
since 1993. Mr. Igler resides
in Tallahassee, Florida.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
5
-------------------------
CONTINUING DIRECTORS
-------------------------
CLASS I DIRECTOR
TERM EXPIRING IN 2003
Kenneth W. Hill, age 69, has 70,000(1) shares of common stock
been a director of Federal 1.27% of the outstanding common stock
Trust since 1997 and a director
of the Bank since 1995. Mr.
Hill was the Vice President and
Trust Officer of SunBank, N.A.,
Orlando, Florida from 1983
through 1995. Mr. Hill resides
in Orlando, Florida.
CLASS II DIRECTOR
TERM EXPIRING IN 2004
George W. Foster, age 73, is a 36,343(1) shares of common stock
retired banker and has been a Less than 1% of the outstanding
director of Federal Trust since common stock
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.
Directors and executive officers 1,339,797(4) shares of common stock
as a group (11 persons) 22.76%(5) of the outstanding common
stock
- -----------------------------
(1) Includes 25,000 shares covered under presently exercisable stock options.
(2) Includes 116,954 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 presently exercisable stock options.
(3) Includes 506,538 shares held as Interim Voting Trustee, 9,233 shares held
as a joint tenant with the right of survivorship, and 7,500 shares covered
under presently exercisable stock options.
(4) Includes stock owned by:
Number of Shares Covered
Name Position with the Bank Shares by Options
- ---- ---------------------- ------ ----------
Jennifer B. Brodnax Vice President/Operations 22,580 15,000
Stephen C. Green Executive Vice President and Chief Operating Officer - 70,000
Dennis J. Harward Director 35,000 7,500
Thomas J. Punzak Treasurer 13,607 15,000
Daniel C. Roberts Senior Vice President and Chief Credit Officer 2,000 15,000
Aubrey H. Wright, Jr. Director, Senior Vice President and Chief Financial 44,107 70,000
Officer and Chief Financial Officer of Federal Trust
(5) Percentage based on 5,887,782 shares, of which 5,492,782 shares were
outstanding as of the record date and 395,000 shares covered under stock
options.
- --------------------------------------------------------------------------------
The Board of Directors recommends that you vote "FOR"
the election of the two Class III and one Class II director nominees.
- --------------------------------------------------------------------------------
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
6
DIRECTOR COMPENSATION
In 2001, we paid each Federal Trust director a $750 per quarter retainer,
but not any per meeting or committee fees. We also paid each Bank director a
$750 per quarter retainer, and, for each such meeting they attended, $500 per
Board meeting and $250 per committee meeting. In 2002, we will pay each Federal
Trust director a $1,250 quarterly retainer, and have modified our compensation
of Bank directors so that we now pay them $1,250 per quarter retainers in
addition to the per meeting fees.
We also have in place the 1998 Directors' Stock Option Plan, which is
described in detail under Proposal III. Pursuant to that proposal, we are
seeking your approval to increase the number of shares of common stock reserved
for issuance upon the exercise of directors' stock options from the current
90,000 shares to 140,000 shares.
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 are: Dr. Samuel C. Certo,
George W. Foster, Dennis J. Harward (Bank director only), Kenneth W. Hill, and
A. George Igler (Federal Trust director only). Initially, the Bank's Chief
Executive Officer and President, James V. Suskiewich, determines the salary
range recommendations for all employees, including the other executives. The CEO
and President then presents his recommendations to the respective Boards of
Directors, which review and analyze the information. The Boards then determine
the compensation of their executive officers, including the compensation of the
CEO and President.
Executive Compensation Policies and Program
Our executive compensation program is designed to:
o attract and retain qualified management;
o meet short-term financial goals; and
o 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 our executive officers, based upon industry standards,
determined from annual surveys published by the Florida Bankers' Association and
private companies specializing in executive compensation analysis for financial
institutions. Such surveys provide compensation information based on institution
size and geographic location 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 individual
performance standards, along with our overall performance for the year. Each
officer is given the opportunity to earn an annual bonus, generally in the range
of 10-40% of his or her base salary. In fiscal year 2001, bonuses were paid to
executive officers for: (i) our overall performance; (ii) the progress made in
implementing the second phase of our new corporate strategy; and (iii) our
achieving our sixteenth through nineteenth consecutive profitable quarters.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
7
Compensation of the Chief Executive Officer
Federal Trust's CEO and President, James V. Suskiewich, 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 Mr. Suskiewich spends
on holding company matters.
Insider Participation in Compensation Decisions
James V. Suskiewich, Federal Trust's and the Bank's CEO and President,
along with Aubrey H. Wright, Jr., Chief Financial Officer of Federal Trust and
Senior Vice President and CFO of the Bank, are both members of the Board of
Directors of the Bank. Mr. Suskiewich is also the Chairman of the Board of
Federal Trust. Mr. Suskiewich and Mr. Wright participated in deliberations of
the respective Boards regarding executive compensation. Neither, however,
participated in any deliberations regarding their individual compensation.
Summary Compensation Table
The following Summary Compensation Table shows compensation information
regarding executive officers James V. Suskiewich, Aubrey H. Wright, Jr. and
Stephen C. Green. In 2001, no other executive officer received compensation in
excess of $100,000, which is the level required to be reported in this table by
Securities and Exchange Commission regulations.
Annual Compensation (1) Long-Term Compensation
------------------------------------------------------ -----------------------------
Name and Other Annual Restricted Stock
Principal Position(1) Year Salary Bonus Directors' Fees Compensation(2) Awards(3) Options(4)
- --------------------- ---- ------ ----- --------------- --------------- -----------------------------
James V. Suskiewich 2001 $156,000 $ 81,000 $ 17,000 $ 61,457 $ 37,627 -
CEO and President of 2000 156,000 41,000 17,000 47,936 24,221 -
Federal Trust 1999 149,615 34,000 17,500 47,818 3,024 -
CEO and President of the Bank
Aubrey H. Wright, Jr. 2001 98,000 27,700 10,000 37,122 $ 27,350 -
CFO of Federal Trust 2000 98,000 14,029 10,000 29,091 11,351 -
Senior Vice President and 1999 94,000 12,000 12,500 26,206 2,011 -
CFO of the Bank
Stephen C. Green 2001 105,000 1,000 - 12,073 - 70,000
Executive Vice President and 2000 19,173 1,000 - 739 - -
Chief Operating Officer
of the Bank
(Footnotes to follow on next page)
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
8
- ----------------------------
(1) Includes all compensation in the year earned whether received or
deferred at the election of the executive.
(2) Includes the estimated value of:
James V. Suskiewich 2001 2000 1999
------------------- ------- -------- -------
Health & life insurance premiums $ 4,371 $ 3,637 $ 4,244
Social/country club dues 4,957 4,995 5,117
Vested 401(k) plan contributions 5,240 5,000 5,000
Supplemental retirement plan 42,337 37,404 33,120
Use of company automobile 4,542 4,900 5,337
----- ----- -----
Total: $ 61,447 $ 55,936 $ 52,818
======== ======== ========
Aubrey H. Wright, Jr. 2001 2000 1999
--------------------- ------- -------- --------
Health & life insurance premiums $ 4,756 $ 4,241 $ 4,222
Social/country club dues 282 - -
Vested 401(k) plan contributions 3,952 3,180 3,150
Supplemental retirement plan 28,132 24,850 21,984
------ ------ ------
Total: $ 37,122 $ 32,271 $ 29,356
======== ======== ========
Stephen C. Green 2001 2000
---------------- ------- --------
Health & life insurance premiums $ 6,849 $ 739
Social/country club dues 5,224 -
----- -----
Total: $ 12,073 $ 739
======== ========
(3) Includes value of fully vested participation in our Employee Stock
Ownership Plan, which is described elsewhere in the Executive
Compensation section of this Proxy Statement.
(4) Options granted under our 1998 Key Employee Stock Compensation
Program, which is described under Proposal II in this Proxy Statement.
Employment Contracts
Federal Trust and the Bank have entered into joint employment agreements
with two of our 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 Stephen C.
Green, Chief Operating Officer and Executive Vice President and Daniel C.
Roberts, Chief Credit Officer and Senior Vice President. With the exception of
the President and CEO, it is the Board's intent that the term of each executive
officer's employment agreement be limited to two years. 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, 2001, Mr. Suskiewich received bonuses of $81,000.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
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 after delivery of the notice (depending
on the reason for termination).
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 a
severance payment. The severance payment would be paid in a lump sum equal to
the total annual compensation due 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, all 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 this provision, 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, 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. In keeping with its intent to limit the term of each
executive officer's employment agreement to two years, the Board did not extend
his employment agreement in September 2001. Currently, Mr. Wright has one year
and six months remaining on the term of his employment agreement. 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 net,
pre-tax income. Mr. Wright is to receive a bonus equal to 1% of the Bank's
quarterly net income. He is also entitled to discretionary performance bonuses
payable annually for the duration of the employment agreement. For the year
ended December 31, 2001, Mr. Wright received bonuses of $27,700.
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FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
10
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 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
current annual salary, 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 then current
salary, multiplied by the same ratio.
The employment agreement permits Mr. Wright to terminate his employment
voluntarily. In the event of voluntary termination, except as previously
described, 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, and had an original term of two years. On the second
anniversary of the agreement and each succeeding anniversary 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 agreement should be extended for an
additional year. 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
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 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 equal 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. In either instance, Mr. Green will receive these sums in
semi-monthly installments. In addition, the Bank is also to permit Mr. Green's
continued participation in any applicable benefit plans 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
with another employer.
In addition, the employment agreement permits Mr. Green to terminate his
employment voluntarily. In the event of voluntary termination, except as
previously described, all rights and benefits under the contract shall
immediately terminate upon the effective date of such termination.
Daniel C. Roberts, Jr. Mr. Roberts' employment agreement became effective
on March 1, 2001, and, except for the base salary, is identical to Mr. Green's
employment agreement in all material respects.
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
11
Employee Stock Ownership Plan
All of our full-time salaried employees 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 of employment. As of December 31, 2001, 12
employees had vested interests in the ESOP.
ESOP contributions are determined annually by the respective Boards of
Directors, taking into consideration prevailing financial conditions, our fiscal
requirements and other factors deemed relevant by the Boards. 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 participant's compensation for the
year bears to the total compensation of all participants for the year. In 2001
and 2000, cash contributions of $100,000 and $124,244, respectively, were made
to the ESOP. The ESOP currently holds 116,954 shares of Federal Trust common
stock, or 2.13% of the outstanding shares.
TRANSACTIONS WITH MANAGEMENT OR OTHER AFFILIATES
Indebtedness of Management
In 1999, the Boards of Directors of Federal Trust and the Bank amended
their loan policies to allow limited types of 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, which request any credit
extended by the Bank to our directors, executive officers and principal
shareholders, or any of their affiliates must: (i) be 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 involved more than the normal risk of repayment or present other unfavorable
features.
In February 2000, Federal Trust loaned five of our 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 will come due. Each of these loans is secured by the Federal
Trust common stock purchased with the loan's proceeds. As of December 31, 2001,
these loans represented approximately $205,000, or less than one-tenth of one
percent of our total loan portfolio and are all current and performing according
to their terms.
Other Transactions with Related Persons
When a transaction involves the Company and an officer, director, principal
shareholder or affiliate, it is our policy that the transaction must be on terms
no less favorable to us than could be obtained from an unaffiliated party. All
such transactions must be approved in advance by a majority of Federal Trust's
or the Bank's independent and disinterested directors. During 2001, we did not
have any transactions with related persons other than the loans described above.
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
12
PROPOSAL II
AMENDMENT OF THE
1998 KEY EMPLOYEE STOCK COMPENSATION PROGRAM
The 1998 Key Employee Stock Compensation Program ("Employee Program") was
approved by our shareholders at the 1998 Annual Meeting and is for the benefit
of our officers and other key employees. The Employee 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 Employee Program provides for the issuance of options to purchase our
common stock. 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, as may outright awards of Federal Trust common stock.
A committee consisting of not less than three directors of Federal Trust
(none of whom may be an employee of Federal Trust or the Bank) has been given
authority to administer the Employee Program and to grant options, stock
appreciation rights and share awards. The current Program Administrators are:
George W. Foster, Kenneth W. Hill and Dr. Samuel C. Certo. The Program
Administrators may make grants under the Employee Program at their discretion to
any full-time employee, including those who are directors and officers.
Directors who are not full-time salaried employees are not eligible to
participate in the Employee Program.
Options granted under the Employee Program are exercisable in one or more
installments and may be exercisable on a cumulative basis. Options are
exercisable for a term no 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 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. This provision may have the effect of deterring hostile changes
in control by increasing the costs of acquiring control.
Options granted under the Employee Program may be "incentive stock options"
within the meaning of the Internal Revenue Code, which are designed to result in
beneficial tax treatment to the employee, but no tax deduction for Federal
Trust. Options may also be "compensatory stock options" which do not give the
employee certain benefits of an incentive stock option, but entitle us to a tax
deduction when the options are exercised. The 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, 2001, no compensatory stock
options had been granted.
No consideration is received by Federal Trust in return for the grant of
options, although consideration would be received upon exercise of the options.
For financial reporting purposes, there is no charge to the income of Federal
Trust in connection with the grant or exercise of an option. As of March 29,
2002, the market value of our common stock was $4.37 per share.
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
13
The grant of stock appreciation rights would require charges to the income
of Federal Trust based on the estimated costs which would be incurred upon their
exercise. In the event of a decline in the market price of our common stock
subsequent to such a charge against earnings, a reversal of prior charges is
typically made in the amount of such decline. 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 based on
market price fluctuations prior to the actual awarding of the shares. No stock
appreciation rights or share awards have been granted or are presently intended
to be granted under the Employee Program.
The terms of the Employee Program may be amended by the Program
Administrators except that no amendment may increase the maximum number of
shares included in the Employee 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.
Under the terms of the Employee Program, 325,000 shares of common stock
have been reserved for issuance upon the exercise of options. As of March 29,
2002, incentive stock options to purchase 305,000 shares of common stock had
been granted to our officers and key employees. Currently, only 20,000 shares
remain available for future option grants. The following table reflects the
amount of options which have been granted to our employees.
Number of Shares
Subject to Exercise
Name Title Options Granted Price
------------------------------ ----------------------------- ---------------- ---------
James V. Suskiewich President/CEO 120,000 $4.00
Aubrey H. Wright, Jr. Senior Vice President/CFO 70,000 4.00
Stephen C. Green Executive Vice President/COO 70,000 4.00
Daniel C. Roberts, Jr. Senior Vice President/CCO 15,000 4.00
Jennifer B. Brodnax Vice President/Operations 15,000 4.00
Thomas J. Punzak Treasurer 15,000 4.00
--------
All employees as a group 305,000
=======
With this proposal, we are seeking your approval to amend the Employee
Program to increase the number of shares of common stock available for issuance
pursuant to the exercise of stock options by 150,000 shares, to 475,000 total
shares. We believe this amendment will serve to increase our flexibility in
recruiting and retaining qualified executives and key employees, although we do
not presently intend to grant any new options to officers or employees who have
already been granted options.
As the proposed amendment will increase the number of shares of common
stock available to be subject to options, shareholder approval of the amendments
is required by the Employee Program. The amendment will be approved if the votes
cast in favor of the amendment exceed those cast against it.
- --------------------------------------------------------------------------------
The Board of Directors recommends that you vote "FOR"
amending the Employee Program to increase
the number of options available for grant.
- --------------------------------------------------------------------------------
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
14
PROPOSAL III
AMENDMENT OF THE 1998 DIRECTORS' STOCK OPTION PLAN
The 1998 Directors' Stock Option Plan ("Directors' Plan") was approved by
shareholders at the 1998 Annual Meeting. The Directors' Plan authorizes the
granting of only compensatory options. Under the terms of the Directors Plan,
90,000 shares of common stock have been reserved for issuance upon the exercise
of options.
Under the terms of the Directors' Plan, the per share exercise price of any
option must be equal to the fair market value of a share of common stock as of
the date of grant. For the purposes of Directors' 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 last
trading day before the grant), as reported by the markets or exchanges where our
shares are traded. If no such closing prices are reported, the fair market value
is the average of the closing high bid and low ask prices of a share of common
stock, or if no such quotations are available, the price furnished by a
professional securities dealer making a market in our shares, as selected by our
Board. An option may be exercised any time after six months from the date of
grant up until ten years after the date of grant. Unless terminated, the
Directors' Plan shall remain in effect until the tenth anniversary of its
effective date.
As of March 29, 2002, Dr. Samuel C. Certo, George W. Foster and Kenneth W.
Hill had each been granted options to purchase 25,000 shares of common stock and
Dennis J. Harward and A. George Igler had each been granted options to purchase
7,500 shares, all of which are presently exercisable. Therefore, no shares
remain available for future option grants. The exercise price of all outstanding
options is $4.00 per share.
In order to be able to grant options to newly elected or appointed
directors on either of our Boards of Directors, we are seeking your approval to
amend the Directors' Plan. The proposed amendment will increase the number of
shares of common stock available for issuance upon the exercise of stock options
by 50,000 shares to 140,000 total shares. We believe this amendment will serve
to increase our flexibility in recruiting and retaining qualified directors for
both of our Boards. If this proposal is adopted, we intend to grant options for
an additional 2,500 shares to both A. George Igler and Dennis J. Harward.
As the proposed amendment will increase the number of shares of common
stock available to be subject to options, shareholder approval of the amendment
is required by the Directors' Plan. The amendment will be approved if the votes
cast in favor of the amendment exceed those cast against it.
- --------------------------------------------------------------------------------
The Board of Directors recommends that you vote "FOR"
amending the Directors' Plan to increase the number
of options available for grant.
- --------------------------------------------------------------------------------
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
15
PROPOSAL IV
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002
At its meeting on September 28, 2001, the Board of Directors of Federal
Trust terminated the services of KPMG Peat Marwick, LLP. At the same meeting,
the Board of Directors selected the accounting firm of Hacker, Johnson & Smith,
P.A., as independent auditors for the remainder of the 2001 fiscal year. In
connection with its audits of the two most recent full years and during the
subsequent interim period, there were no disagreements with KPMG Peat Marwick,
LLP on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure that if not resolved to the
satisfaction of KPMG Peat Marwick, LLP would have caused it to make reference in
its report on the matter. This includes disagreements which were resolved to the
satisfaction of KPMG Peat Marwick, LLP.
KPMG Peat Marwick, LLP's reports on the financial statements for December
31, 2000 and December 31, 1999, did not contain an adverse opinion or disclaimer
of opinion and were not qualified as to uncertainty, audit scope or accounting
principles.
Subsequent to terminating its services, we requested that KPMG Peat
Marwick, LLP furnish us with a letter addressed to the Securities and Exchange
Commission stating whether it agreed with the statements set forth above. A copy
of KPMG Peat Marwick, LLP's letter to the Securities and Exchange Commission,
dated October 5, 2001, is included as Exhibit A to this Proxy Statement.
Following consultation with the Audit Committee, the Board of Directors
intends to retain the accounting firm of Hacker, Johnson & Smith, P.A. as our
independent auditors for the fiscal year ending December 31, 2002. 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 Hacker,
Johnson & Smith, P.A., in connection with the audit of our annual financial
statements for the fiscal year ended December 31, 2001, and the reviews of the
financial statements included in our quarterly filings with the SEC were
$18,000. Prior to its dismissal, KPMG Peat Marwick, LLP billed Federal Trust
$66,000 for reviews of financial statements included in quarterly filings for
2001.
All Other Fees: In addition to fees billed for audit services and interim
reviews of financial statements, KPMG Peat Marwick LLP, billed us $14,650 in
2001, which was substantially for tax-related services. Hacker, Johnson & Smith,
P.A. did not bill us for any other services in 2001.
- --------------------------------------------------------------------------------
The Board of Directors recommends that you vote "FOR"
the ratification of the appointment of
Hacker, Johnson & Smith, P.A.,
as our independent auditors for the fiscal year ending December 31, 2002.
- --------------------------------------------------------------------------------
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
16
PROPOSAL V
ADJOURNMENT OF ANNUAL MEETING
The Board of Directors seeks your approval to adjourn the Annual Meeting in
the event that there are not enough votes to approve Proposals I, II, III or IV
at the Annual Meeting. In order to permit proxies that have been timely received
by us to be voted for an adjournment, we are submitting this proposal as a
separate matter for your consideration. If it is necessary to adjourn the Annual
Meeting and the adjournment is for 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 you vote "FOR"
the adjournment of the Annual Meeting.
- --------------------------------------------------------------------------------
SHAREHOLDERS' PROPOSALS
Proposals of shareholders intended to be presented at the 2003 Annual
Meeting should be submitted by certified mail, return receipt requested, and
must be received by us at our corporate office located at 312 West First Street,
Suite 400, Sanford, Florida 32771, on or before December 13, 2002, to be
eligible for inclusion in next year's Proxy Statement. However, if next year's
Annual Meeting is held on a date more than 30 days before or after the date of
the 2002 Annual Meeting, any shareholder who wishes to have a proposal included
in the Proxy Statement for that meeting must deliver us a copy of the proposal
within a reasonable time before the Proxy Statement is mailed. We reserve the
right to decline to include in the Proxy Statement any proposal which does not
comply with the Proxy Rules (Regulation 14A) adopted under the Securities
Exchange Act of 1934.
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. To
properly bring business before an Annual Meeting, you must give written notice
to our Corporate Secretary not less than ten days before the Annual Meeting.
SOLICITATION
We will bear the cost of soliciting proxies on behalf of the Board of
Directors for the Annual Meeting. 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 share 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.
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
17
OTHER MATTERS WHICH MAY PROPERLY COME
BEFORE THE ANNUAL MEETING
We know of no other business that will be presented for consideration at
the Annual Meting, other than those matters described in this Proxy Statement.
If any other matter properly comes before the Annual Meeting, however, it is our
intent to vote the proxies we obtain in accordance with our best judgment. If
you do not wish to extend such authority, you may limit your proxy by marking
the appropriate box on the Proxy Card.
AVAILABILITY OF OTHER INFORMATION
Accompanying this Proxy Statement is our 2001 Annual Report, which includes
our audited financial statements. Additional copies of the Annual Report on Form
10-KSB are available to shareholders at no charge. Any shareholder who would
like an additional copy should contact: Aubrey H. Wright, Jr., Chief Financial
Officer, Federal Trust Corporation, Post Office Box 1867, Sanford, Florida
32772-1867, telephone number (407) 323-1833.
Federal Trust currently files periodic reports with the Securities and
Exchange Commission (including Form 10-KSBs, Form 10-QSBs, Proxy Statements,
etc.). We file these periodic reports electronically via EDGAR and they can be
reviewed at the Securities and Exchange Commission's website: www.sec.gov. They
can also be inspected and copied at the Securities and Exchange Commission's
Public Reference Section, 450 Fifth Street, NW, Washington, DC 20549.
Federal Trust Corporation
April 12, 2002
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
18
EXHIBIT A
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
19
October 5, 2001
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously principal accountants for Federal Trust Corporation and,
under the date of February 2, 2001, we reported on the consolidated financial
statements of Federal Trust Corporation and subsidiaries as of and for the years
ended December 31, 2000 and 1999. On September 28, 2001, our appointment as
principal accountants was terminated. We have read Federal Trust Corporation's
statements included under Item 4 of its Form 8-K dated October 8, 2001, and we
agree with such statements.
Very truly yours,
KPMG LLP
---------------------------
FEDERAL TRUST CORPORATION PROXY STATEMENT
312 West First Street, Suite 400 o Sanford, Florida 32771
20
FEDERAL TRUST CORPORATION - REVOCABLE PROXY
2002 ANNUAL MEETING OF SHAREHOLDERS
This Proxy is being solicited on behalf of the Board of Directors.
The undersigned hereby appoints George W. Foster and Kenneth W. Hill, and each
of them with full powers of substitution, to act as proxy for, and
attorney-in-fact, to vote all shares of Federal Trust Corporation common stock
which the undersigned is 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 24, 2002, at 10:00 a.m., and at any and all adjournments.
The undersigned may revoke this Proxy at any time before it is voted by either
delivering a written notice of revocation or duly executed Proxy bearing a later
date to Federal Trust or by attending the Annual Meeting and voting in person.
INSTRUCTION: Indicate your voting instructions by marking the appropriate boxes.
PROPOSAL I: The election of two Class III directors and one Class II director.
WITHHOLD
FOR AUTHORITY
--- ---------
| | | |
INSTRUCTION: To withhold your vote for any individual nominee, strike a line
through the nominee's name listed below.
CLASS III: DR. SAMUEL C. CERTO o JAMES V. SUSKIEWICH
CLASS II: A. GEORGE IGLER
PROPOSAL II: Approval of an amendment to the 1998 Key Employee Stock
Compensation Program.
FOR AGAINST ABSTAIN
| | | | | |
PROPOSAL III: Approval of an amendment to the 1998 Directors' Stock Option Plan.
FOR AGAINST ABSTAIN
| | | | | |
PROPOSAL IV: The ratification of Hacker, Johnson & Smith, P.A., as the
independent auditors for Federal Trust Corporation for the fiscal year ending
December 31, 2002.
FOR AGAINST ABSTAIN
| | | | | |
PROPOSAL V: The adjournment of the Annual Meeting to solicit additional proxies
in the event there are not sufficient votes to approve any of Proposals I, II,
III or IV.
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 at
any adjournment.
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_________________________ __________________
- --------------------------- Signature Date
[Label]
- --------------------------- 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 12, 2002, and the
2001 Annual Report.