ex4-2.htm


     

     

    
 

    STEWARDSHIP
FINANCIAL CORPORATION

    DIVIDEND
REINVESTMENT PLAN

    (as
amended and restated effective as of May 18, 2010)

    


    


     

    1.  
  THE CORPORATION

     

    Stewardship
Financial Corporation (the “Corporation”) is a New Jersey state chartered bank
holding company.  The Corporation was formed in 1995 to serve as a
holding company for Atlantic Stewardship Bank (the “Bank”).  The
Corporation was organized at the direction of the Board of Directors of the Bank
for the purpose of acquiring all of the capital stock of the
Bank.  Pursuant to the New Jersey Banking Act of 1948, as amended, and
pursuant to approval of the share

holders of the Bank, the Corporation acquired the Bank and became its
holding company on November 22, 1996.  In connection with the
acquisition, shareholders of the Bank received one share of the common stock, no
par value of the Corporation (the “Common Stock”), for each share of the common
stock of the Bank then issued and outstanding.  The only significant
activity of the Corporation is ownership and supervision of the
Bank.

     

    The
Corporation’s executive offices are located at 630 Godwin Avenue, Midland Park,
New Jersey 07432-1405, and the Corporation’s telephone number is 877-844-BANK or
201-444-7100.  The Corporation’s website is
www.asbnow.com.

     

    The
Corporation files annual and quarterly reports and proxy statements with the
Securities and Exchange Commission.  All such reports are hereby
incorporated by reference into the description of the Corporation in this
Dividend Reinvestment Plan. The Corporation will provide, without charge, to any
person to whom a copy of this Plan is delivered, on the oral or written request
of any such person, a copy of any or all of the foregoing documents. Written
requests for copies of any such documents should be directed to Stewardship
Financial Corporation, 630 Godwin Avenue, Midland Park, New Jersey 07432-1405,
Attention: Corporate Services; and oral requests may be made by calling
877-844-BANK or 201-444-7100.

     

     

    2.    
THE BANK

     

    Atlantic
Stewardship Bank is a wholly-owned subsidiary of the Corporation.  The
Bank was formed in 1985 by local businessmen to serve the needs of the local
community.  The Bank’s by-laws include a commitment to tithe ten
percent (10%) of its pre-tax profits to Christian and civic
charities.  The Dividend Reinvestment Plan for the Bank was originally
approved on March 7, 1994; and was amended and adopted by the Corporation on
January 21, 1997 and was further amended and adopted by the Corporation on April
23, 2009.

     

    The
Bank’s executive offices are located at 630 Godwin Avenue, Midland Park, New
Jersey 07432-1405; and the telephone number of the Bank is 877-844-BANK or
201-444-7100. The Bank’s website is www.asbnow.com.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    3.   
 THE PLAN

     

    The
Stewardship Financial Corporation Dividend Reinvestment Plan (the “Plan”) is
designed to afford shareholders of record the opportunity to increase
investments in our Common Stock through a convenient method of investing with no
brokerage commissions or administrative fees of any kind.  The Plan
allows shareholders who enroll in the Plan to use their cash dividends and to
make additional cash contributions to purchase whole and fractional shares of
our Common Stock.  See Section 12 for a description of the procedure
for enrollment.

     

    The Plan
may be amended, suspended, modified or terminated at any time by the Board of
Directors of the Corporation without the approval of the
participants.  Notice of suspension or termination or material
amendment or modification will be sent to all participants who will at all times
have the right to withdraw from the Plan.  Nothing in the Plan is to
be considered a guarantee or a promise to pay any dividends in the future except
as may be declared by the Board of Directors of the Corporation from time to
time.

     

     

    4.   
 ADMINISTRATION OF THE PLAN

     

    Registrar
and Transfer Company, the Corporation’s stock transfer agent (“R&T” or the
“Plan Administrator”), will administer the Plan by maintaining records, sending
account statements to participants and performing other duties relating to the
Plan.  Shares of Common Stock purchased under the Plan are registered
in the name of the Plan Administrator’s nominee and are credited to the accounts
of the participants in the Plan.  The Plan Administrator acts in the
capacity of agent for participants in the Plan.  The Corporation
reserves the right to substitute another bank, trust company or transfer agent
for R&T and may replace R&T as the Plan Administrator at any time in our
sole discretion.

     

    Questions
and other communications concerning the Plan should be directed to R&T at
the following address:

     

    Registrar and Transfer
Company

    Dividend Reinvestment Plan
Department

    P.O. Box 664

    Cranford, New Jersey 07016

    


    Or for
overnight delivery:

     

    Registrar and Transfer
Company

    Dividend Reinvestment Plan
Department

    10 Commerce Drive

    Cranford, New Jersey 07016

    


    Online:                      www.rtco.com

     

    Telephone:               800-368-5948

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    The Plan
Administrator will make every effort to invest all authorized dividends promptly
after receipt of such dividends and in no event later than 30 days from such
receipt, except where necessary under any applicable federal securities
laws.

     

    The Plan
Administrator will not be liable under the Plan (unless it is grossly negligent)
for any act done in good faith or for any good faith omission to act including,
without limitations, any claims for liability (1) arising out of failure to
terminate a participant’s participation in the Plan upon the Participant’s death
prior to receipt of notice in writing of such death and (2) with respect to the
prices at which shares are purchased or sold for participants’ accounts and the
time such purchases or sales are made.

     

     

    5.    
INVESTMENT CONSIDERATIONS

     

    Shares of
the Corporation’s Common Stock are traded on the Nasdaq Capital Market under the
symbol SSFN.  The identity of the market makers for the Common Stock
at any given time can be found at www.nasdaq.com.

     

    Any
participant whose purchase of shares of the Corporation’s Common Stock would
increase his or its beneficial ownership to 10% or more of the Corporation’s
then outstanding shares will require the prior approval of the Federal Deposit
Insurance Corporation and the New Jersey Department of Banking and
Insurance.

     

    Shares of
the Corporation’s Common Stock purchased under this Plan are NOT deposit
accounts of the Corporation or of the Bank and are NOT insured by the Federal
Deposit Insurance Corporation or any other governmental
organization.  A participant’s investment in shares held in the Plan
is no different than an investment in shares of Common Stock purchased directly
in the market.  The participant bears the risk of loss and the
benefits of gain from market price changes for all of the shares of the
Corporation’s Common Stock held.  Shares of the Corporation’s Common
Stock are subject to market risk and possible loss of investment.

     

    6.    
PURCHASE OF SHARES UNDER THE PLAN

     

    Shares of the Corporation’s Common
Stock purchased under the Plan may be purchased either from the Corporation’s
legally authorized but unissued shares of Common Stock or from the Corporation’s
treasury stock, or purchased in the open market, or purchased through a
combination of these means, at the discretion of the
Corporation.  Shares purchased other than from the Corporation will be
purchased by agents independent of the Corporation.  All shares of
Common Stock purchased pursuant to the Plan, from the Corporation or otherwise,
will be credited to the accounts of the Plan participants by the Plan
Administrator.

     

    The price of shares of Common Stock
purchased from the Corporation will be the average closing price of the shares
of Common Stock as quoted on the NASDAQ Capital Market for the trailing 14
trading days immediately preceding the applicable investment
date.  The price of shares of Common Stock purchased in the open
market will be the average purchase price of such shares.  In the
event that the purchase of shares of Common Stock is fulfilled by a combination
of the Corporation’s authorized and unissued shares, the Corporation’s treasury
stock and open market purchases or any combination thereof, the price will be an
average of these prices.  Common Stock purchased other than from the
Corporation pursuant to the Plan will be purchased by agents independent of the
Corporation and its affiliates.  Neither the Corporation nor any of
its affiliates will exercise any direct or indirect control or influence over
the times when the prices at which, or the manner in which, such shares will be
purchased.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    Shares resulting from dividend
reinvestment will be issued at a discount to the price as so
determined.  Initially, we intend to issue such shares at a 5%
discount to this market price.  The Corporation reserves the right to
change or eliminate the discount at any time.  The discount will not
apply to shares purchased through optional cash purchase
contributions.

     

    The timing of purchases on the open
market will be at the sole discretion of the Plan Administrator, but will
generally be effected within a 30-day period after the dividend payment
date.  Neither the Corporation nor any shareholder will have any
authority or power to direct the time or price at which shares may be purchased
or the selection of the broker or dealer through or from whom purchases are to
be made.  The Plan Administrator may delay any or all purchases beyond
the 30-day period if necessary under federal securities laws.

     

    To the extent we fund the Plan with
shares of our Common Stock issued directly by us from authorized but unissued
shares or treasury shares, the dividends payable to participants will be
retained by us as consideration for such shares.

     

             
  In the event applicable law or the closing of securities markets
requires temporary curtailment or suspension of open market purchases of the
shares of our Common Stock, the Plan Administrator is not accountable for its
inability to make purchases at such time.  If shares of our Common
Stock are not available for purchase for a period of longer than 30 days from
the prior dividend payment date, the Plan Administrator will promptly mail to
each participant a check in the amount of any unapplied funds in the
participants’ accounts.

     

    In the event that you elect to make
optional cash purchases, the Corporation may determine to combine your payments
with funds from your cash dividends for use in purchasing shares as described
above.

     

    7.    
 DIVIDEND REINVESTMENT

     

    The Plan
allows shareholders to invest cash dividends and to make optional contributions
of cash to purchase shares of the Corporation’s Common
Stock.  Participants in the Plan who would otherwise receive regular
dividend checks from the Corporation, authorize the Plan Administrator to use
the amount of the dividend to which they are entitled to purchase whole and
fractional shares of Common Stock which are then credited to the participant’s
account.  Dividends on the shares of Common Stock credited to a
participant’s account under the Plan will also be reinvested, thereby
compounding a participant’s investment.

     

    The
purchase price for shares of Common Stock purchased through dividend
reinvestment pursuant to the Plan initially will be at a 5% discount to the
market price as outlined in Section 6 above.

     

    The
number of shares that will be purchased using a participant’s cash dividends
will depend on the amount of those dividends and the applicable purchase price
of the shares.  A participant’s account will be credited with the
number of shares (including any fractional shares computed to four decimals)
that results from dividing the amount of dividends to be invested by the
applicable purchase price.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    8.  OPTIONAL
CASH PURCHASE CONTRIBUTIONS

     

    All
eligible shareholders who have submitted a signed authorization card to the Plan
Administrator not later than the sixth day prior to the 15th business day of the
first calendar month in which the participant wishes to invest in Common Stock
by means of an optional cash payment may do so.  Each calendar month
the Plan Administrator will apply any optional cash payment in good funds timely
received from a participant (that is received by the Plan Administrator and
cleared by the sixth day prior to the 15th business day of the calendar month in
which it is to be invested) to the purchase of our Common Stock for the account
of the participant on the following investment date, if such Common Stock is
purchased from the Corporation, and on, or as soon as determined by the Plan
Administrator after, such investment date if such Common Stock is purchased on
the open market.

    


    A
participant may not make optional cash payments of less than $100 per calendar
month or of more than $50,000 in any calendar year.  In the event that
a participant delivers an optional cash payment in amounts under or exceeding
the specified limits, the Plan Administrator will invest only that portion, if
any, that complies with such investment limitation and will return any
remainder.  The minimum and maximum amounts of optional cash purchases
may be changed (or the optional cash payment feature may be eliminated) at the
discretion of the Corporation’s Board of Directors.

    


    Optional
cash payments will be invested each month.  The investment date for
optional cash payments is the 15th day
of each calendar month or, if such day is not a business day for the
Corporation, the first business day for the Corporation immediately following
that date will be the investment date.

    


    The
record date for optional cash purchases will be the sixth day prior to the
investment date.  The Plan Administrator must be in receipt of good
funds on or before the record date in order for such funds to be invested as an
optional cash payment on the next investment date.  Payments may be
made by check made payable to the Plan Administrator.  No interest
will be paid by the Corporation or the Plan Administrator on optional cash
payments held pending investment.  Therefore, although optional cash
payments may be made at any time, it is advisable to transmit such payments
shortly before the sixth day prior to the applicable investment
date.  In order for payments to be invested on the investment date, in
addition to the receipt of good funds, the Plan Administrator must be in receipt
of an authorization card.

    


    Optional
cash payments received by the Plan Administrator which do not clear until after
the record date for a particular investment date will be applied to purchase our
Common Stock on the next succeeding investment date for optional cash payments,
provided, however, that such payments will be returned to a participant upon
written request to the Plan Administrator by such participant received prior to
the record date for the next succeeding investment date.

    


    Shares
purchased using optional cash payments will not be subject to a
discount.

    


    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    9.    COST
TO PARTICIPANTS

     

    The
Corporation will bear all costs of administration of the
Plan.  Participants will incur no brokerage commissions or service
charges in connection with purchases for shares of the Corporation’s Common
Stock effected under the Plan.

     

     

    10.  ACCOUNT
STATEMENTS

     

    Each
participant will receive from the Plan Administrator as soon as practicable
after completion of each investment for a participant’s account an account
statement describing cash dividends and any additional cash purchases, the
number of shares purchased, the price per share and the total shares accumulated
under the Plan for that participant.

     

     

    11. 
ELIGIBILITY

     

    All
shareholders of record of the Corporation’s Common Stock are eligible to
participate in the Plan.  Beneficial owners of shares of the
Corporation’s Common Stock whose shares are registered in names other than their
own name may participate by requesting that their broker or nominee transfer
their shares into their own name.  The right to participate in the
Plan is not transferable to another person apart from a transfer of a
participant’s shares of the Corporation’s Common Stock.

     

     

    12.  ENROLLMENT

     

    To enroll
in the Plan, shareholders of record interested in participating in the Plan must
complete an authorization card and submit it to the Plan Administrator not later
than (a) the record date of the first dividend to be invested in shares of
Common Stock for such participant pursuant to the Plan and (b) the sixth day
prior to the 15th
business day of the first calendar month in which the participant wishes to
invest in shares of Common Stock by means of an optional cash payment in
accordance with Section 8.  An eligible shareholder may enroll in the
Plan at any time.  Authorization cards not received within the time
period specified herein may result in a deferral of participation until the next
dividend payment date.  Participation in the Plan will apply to all
shares that are registered to a participant at the time of enrollment plus all
shares that are acquired while the authorization remains in
effect.  In the event that a shareholder is already a participant in
the Plan, a new authorization card is not required in order to receive the
benefit of the amendment to the Plan that will enable participants to receive a
5% discount on the purchase of shares made using reinvestment of cash
dividends.

     

    The
Corporation or the Plan Administrator may terminate, for whatever reason at any
time as it may determine in its sole discretion, a participant’s participating
in the Plan upon mailing a notice of termination to the participant at his
address as it appears on the Plan Administrator’s records.  Upon
termination, a participant will receive certificates for the whole shares of
Common Stock credited to his or its account unless the participant has requested
that all or any part of such shares be sold and the proceeds of the sale be
delivered in cash.  Fractional shares credited to a terminating
account will be paid in cash at the then current market price.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    A
participant’s participation in the Plan will be terminated by the Plan
Administrator upon receipt of notice, in writing, of such participant’s death
from the participant’s executor or legal representative.

     

    13.  TAXATION
MATTERS

     

    In
general, a participant in the Plan will have the same federal and state income
tax obligations with respect to dividends credited to his or its account under
the Plan as other shareholders who do not elect to participate in the Plan and,
instead, receive cash dividends.  A participant is treated for income
tax purposes as having received, on the dividend date, a dividend in the amount
equal to the fair market value of the shares of Common Stock credited to his or
its account under the Plan even though that amount was not actually received by
the participant in cash but, instead, was applied to the purchase of additional
shares for his or its account.  In addition, any brokerage commissions
and service charges paid by the Corporation on behalf of the participant are
deemed to constitute dividend income by the Internal Revenue
Service.  Such amounts, if any, will be included on any annual
information return filed with the Internal Revenue Service, a copy of which will
be sent to the participant.

     

    Shareholders
who participate in the Plan and purchase shares at a discount  will be
treated as having a distribution.  The amount of the distribution to
the participant will be the fair market value of the Corporation’s Common Stock
received on the date of the distribution.  For example, if a
shareholder would have received a cash dividend of $95 but elected to reinvest
the dividend and purchase stock at the 5% discount, the taxable dividend would
be $100 representing the fair market value of the stock received on the
distribution date.

     

    The above
summary is provided for your general information, however, it does not
constitute tax advice and does not purport to be complete or to describe the
consequences that may apply to your personal circumstances.  You
should consult with your tax accountant or personal tax advisor regarding the
effect of participation in the Plan on your personal tax situation.

     

    14.  CERTIFICATES

     

    Shares
purchased for a participant’s account under the Plan will normally be held by
the Corporation, without charge.  Participants desiring to receive a
certificate or certificates for whole shares credited to their account may
request them from the Plan Administrator.  The number of shares of
Common Stock credited to an account under the Plan will be shown on the
participant’s account statement.

     

    15.  VOTING
OF SHARES

     

    Shares of
the Corporation’s Common Stock credited to a participant’s account under the
Plan (other than fractional shares) and held of record on any applicable record
date for a vote will be automatically added to the shares covered by the proxy
sent or its other shares of the Corporation’s Common Stock and may be voted by
such shareholder.  The Plan Administrator will forward any proxy
solicitation materials relating to the shares of Common Stock held by the Plan
to the participating shareholder.  If the proxy card is returned
properly signed and marked for voting, all whole shares held for the participant
under the Plan will be voted in the same manner as the shares owned directly by
the participant. The whole number of shares held under the Plan may also be
voted in person at a meeting.  Shares for which no voting directions
are received will not be voted.  If the proxy card is not returned or
if it is returned unsigned, none of the participant’s shares will be voted
unless the participant votes in person.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

     

    16.  FRACTIONAL
SHARES

     

    While you
are a participant in the Plan, the entire amount of your dividend payment will
be used to purchase shares of our Common Stock.  If the amount is not
sufficient to purchase an exact number of whole shares, your account will be
credited with a fractional share (calculated to four decimal
places).  A fractional share will earn dividends for you, in
proportion to the size of the fraction just as full shares do.

     

    17.  WITHDRAWALS
FROM THE PLAN

     

    A
participant may withdraw from the Plan at any time and for any reason simply by
sending written termination notice to the Plan Administrator which must be
received no later than five business days’ prior to the next dividend record
date.  Upon receipt of the termination notice, certificates for the
full shares held in the participant’s account will be issued in the
participant’s name and forwarded to the participant.  Promptly after
termination, a terminating participant will receive a check in lieu of any
fractional shares held in the participant’s account at the time of termination
representing the cash settlement value at the then current market price of
Corporation’s Common Stock.

     

    18.  QUESTIONS
AND CORRESPONDENCE

     

    Please
direct all questions regarding the Plan to:

     

    Registrar
and Transfer Company

    10
Commerce Drive

    Cranford,
NJ 07016

    Telephone:  800-368-5948

     

    19.  TERMS
AND CONDITIONS

     

    (a)           Stock Dividends, Stock Splits,
Rights.  Any stock dividends or stock splits distributed on
shares Corporation’s Common Stock credited to a participant’s account under the
Plan, will be credited to the participant’s account.  Stock dividends
or split shares distributed on shares registered in a participant’s name will be
mailed directly to the participant in the same manner as to shareholders not
otherwise participating in the Plan.  In the event that the
Corporation makes available to its shareholders rights to purchase additional
shares or securities, participants under the Plan will receive a subscription
warrant for all such rights directly from the Corporation

     

    (b)           Pledge or Assignment of Plan
Shares.  Shares credited to the account of a participant (those
registered in the name of the Plan Administrator or its nominee) may not be
pledged or assigned and any such purported pledge or assignment will be
void.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    (c)           Limitation of
Liability.  Neither the Corporation nor the Plan Administrator,
will have any responsibility beyond the exercise of ordinary care for any action
taken or omitted pursuant to this agreement; nor will they have any duties,
responsibilities or liabilities except as are expressly set forth herein; nor
will they be liable for any act done in good faith or for any good faith
omission to act; nor will they have any liability in connection with an
inability to purchase shares or with respect to the timing or the price of any
purchase.

     

     

    (d)           Amendment and Termination of the
Plan. The Corporation reserves the right to suspend, amend or terminate
the Plan or the participation in the Plan by any participant, at any
time.  Participants affected by such action will receive notice of any
such suspension, amendment or termination who will at all times have the right
to withdraw from the Plan.  The Corporation’s right to amend the Plan
includes the right to increase or decrease the minimum and maximum amounts of
optional cash payments which may be made under the Plan.  Revisions in
such minimum and maximum amounts will only be made upon 30 days’ prior notice to
participants.  The Corporation’s right to amend the Plan also includes
the right to change the pricing discount, if any.

     

     

    (e)           Interpretation; Governing
Law.  The Plan will be interpreted and regulated by the
Corporation and the Corporation’s interpretations will be
conclusive.  The Plan and the authorization card signed by the
participant (which is deemed a part of the Plan) and the participant’s account
will be governed by and construed in accordance with the laws of the State of
New Jersey.