SCHEDULE 14A

                                 (Rule 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION

                Proxy Statement Pursuant to Section 14(a) of the
               Securities Exchange Act of 1934 (Amendment No.   )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_]  Preliminary Proxy Statement          [_]  Soliciting Material Under Rule
[_]  Confidential, For Use of the              14a-12
     Commission Only (as permitted
     by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[_]  Definitive Additional Materials




                                 SUSSEX BANCORP
--------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)



--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


Payment of Filing Fee (Check the appropriate box):

[_]  No fee required.
[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1)   Title of each class of securities to which transaction applies:

________________________________________________________________________________
2)   Aggregate number of securities to which transaction applies:

________________________________________________________________________________

3)   Per unit price or other underlying value of transaction  computed  pursuant
     to Exchange  Act Rule 0-11 (set forth the amount on which the filing fee is
     calculated and state how it was determined):

________________________________________________________________________________
4)   Proposed maximum aggregate value of transaction:

________________________________________________________________________________
5)   Total fee paid:

________________________________________________________________________________
[_]  Fee paid previously with preliminary materials:

________________________________________________________________________________
[_]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the form or schedule and the date of its filing.

     1)   Amount previously paid:

________________________________________________________________________________
     2)   Form, Schedule or Registration Statement No.:

________________________________________________________________________________
     3)   Filing Party:

________________________________________________________________________________
     4)   Date Filed:

________________________________________________________________________________




SUSSEX BANCORP
399 State Highway 23
P.O. Box 353
Franklin, NJ 07416
                                                                  March 21, 2002


To Our Stockholders:

     You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual  Meeting") of Sussex Bancorp (the  "Company"),  the holding  company for
Sussex Bank (the  "Bank"),  to be held on April 24,  2002,  at 10:30 a.m. at the
Bank's Augusta office, 100 Route 206, Augusta, New Jersey.

     At the Annual Meeting  stockholders will be asked to consider and vote upon
the  election  of Richard  Scott and  Joseph  Zitone to the  Company's  Board of
Directors to each serve for a term of three years.

     The Board of  Directors  of the Company  believes  that the election of its
nominees to the Board of Directors  is in the best  interests of the Company and
its  stockholders  and  unanimously  recommends  that you vote "FOR" each of the
Board's nominees.

     Your cooperation is appreciated since a majority of the Common Stock of the
Company  must be  represented,  either in person or by proxy,  to  constitute  a
quorum for the conduct of business.  Whether or not you expect to attend, please
sign,  date and return the  enclosed  proxy card  promptly  in the  postage-paid
envelope provided so that your shares will be represented.

                                    Very truly yours,

                                    /s/William E. Kulsar
                                    --------------------
                                    William E. Kulsar
                                    Secretary






                                 SUSSEX BANCORP
                              399 State Highway 23
                                  P.O. Box 353
                               Franklin, NJ 07416


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                            TO BE HELD April 24, 2002


     Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting")  of Sussex  Bancorp  (the  "Company")  will be held at  Sussex  Bank's
Augusta office, 100 Route 206, Augusta,  New Jersey, on April 24, 2002, at 10:30
a.m. for the purpose of considering and voting upon the following matters:

     1.   The election of Richard  Scott and Joseph Zitone to serve as directors
          of the Company, each for a term of three years and until his successor
          is elected and duly qualified; and

     2.   Such other business as shall properly come before the Annual Meeting.

     Stockholders  of  record  at the  close of  business  on March 4,  2002 are
entitled  to notice of and to vote at the  Annual  Meeting.  Whether  or not you
contemplate  attending  the Annual  Meeting,  it is suggested  that the enclosed
proxy be executed and returned to the Company.  You may revoke your proxy at any
time prior to the  exercise  of the proxy by  delivering  to the Company a later
proxy or by delivering a written notice of revocation to the Company.

                                   By Order of the Board of Directors


                                   /s/William E. Kulsar
                                   --------------------
                                   William E. Kulsar
                                   Secretary

Franklin, New Jersey
March 21, 2002


                   IMPORTANT---PLEASE MAIL YOUR PROXY PROMPTLY





                                 SUSSEX BANCORP
                              399 State Highway 23
                                  P.O. Box 353
                               Franklin, NJ 07416

                      ------------------------------------

                                 PROXY STATEMENT
                         ANNUAL MEETING OF STOCKHOLDERS
                                 April 24, 2002


                       -----------------------------------


                       GENERAL PROXY STATEMENT INFORMATION

     This Proxy  Statement is being  furnished to stockholders of Sussex Bancorp
(the "Company") in connection with the solicitation by the Board of Directors of
proxies to be used at the annual meeting of stockholders (the "Annual Meeting"),
to be held on April 24, 2002, at 10:30 a.m., at Sussex  Bank's  Augusta  office,
100 Route 206,  Augusta,  New Jersey and at any adjournments  thereof.  The 2001
Annual Report to Stockholders,  including  consolidated financial statements for
the fiscal year ended  December 31,  2001,  and a proxy card,  accompanies  this
Proxy Statement, which is first being mailed to record holders on or about March
21, 2002.

Solicitation and Voting of Proxies

     Regardless  of the number of shares of common stock,  no par value,  of the
Company  ("Common Stock") owned, it is important that you vote by completing the
enclosed  proxy  card  and  returning  it  signed  and  dated  in  the  enclosed
postage-paid  envelope.  Stockholders  are urged to  indicate  their vote in the
spaces provided on the proxy card.  Proxies  solicited by the Board of Directors
of the Company will be voted in accordance  with the  directions  given therein.
Where no instructions are indicated,  signed proxy cards will be voted "FOR" the
election of each of the nominees for director named in this Proxy Statement.

     Other than the matters set forth on the attached  Notice of Annual  Meeting
of Stockholders,  the Board of Directors knows of no additional matters that may
be presented  for  consideration  at the Annual  Meeting.  Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in  accordance  with their best judgment on such other  business,  if
any,  that may properly come before the Annual  Meeting and at any  adjournments
thereof, including whether or not to adjourn the Annual Meeting.





     A proxy may be  revoked  at any time  prior to its  exercise  by  sending a
written notice of revocation to the Company, 399 State Highway 23, P.O. Box 353,
Franklin, New Jersey 07416, Attn: Candace A. Leatham. A proxy filed prior to the
Annual Meeting may be revoked by delivering to the Company a duly executed proxy
bearing a later date, or by attending  the Annual  Meeting and voting in person.
However,  if you are a stockholder  whose shares are not  registered in your own
name, you will need  appropriate  documentation  from your record holder to vote
personally at the Annual Meeting.

     The cost of  solicitation  of proxies  on behalf of the Board of  Directors
will be borne by the  Company.  Proxies may also be solicited  personally  or by
mail or telephone by directors,  officers and other employees of the Company and
Sussex  Bank (the  "Bank"),  its wholly  owned  subsidiary,  without  additional
compensation  therefor.  The  Company  will  also  request  persons,  firms  and
corporations  holding shares in their names,  or in the name of their  nominees,
which are  beneficially  owned by others,  to send proxy  material to and obtain
proxies from such beneficial  owners,  and will reimburse such holders for their
reasonable expenses in doing so.

Voting Securities

     The securities  which may be voted at the Annual Meeting  consist of shares
of the Company's  Common Stock,  with each share entitling its owner to one vote
on all matters to be voted on at the Annual Meeting,  except as described below.
There is no cumulative voting for the election of directors.

     The close of  business  on March 4,  2002,  has been  fixed by the Board of
Directors  as the  record  date (the  "Record  Date") for the  determination  of
stockholders  of record  entitled to notice of and to vote at the Annual Meeting
and at any  adjournments  thereof.  The total  number of shares of Common  Stock
outstanding on the Record Date was 1,660,147 shares.

     The presence,  in person or by proxy, of the holders of at least a majority
of the total number of shares of Common  Stock  entitled to vote is necessary to
constitute  a quorum at the  Annual  Meeting.  In the event  that  there are not
sufficient  votes  for a  quorum,  or to  approve  or ratify  any  matter  being
presented at the time of the Annual Meeting, the Annual Meeting may be adjourned
in order to permit the further solicitation of proxies.

     The  proxy  card  being  provided  by the  Board  of  Directors  enables  a
stockholder to vote "FOR" the election of the nominees  proposed by the Board of
Directors,  or to "WITHHOLD  AUTHORITY"  to vote for one or more of the nominees
being  proposed.  Under New Jersey law and the Company's  Bylaws,  directors are
elected by a plurality  of votes cast,  without  regard to broker  non-votes  or
abstentions.



                                      -2-



                              ELECTION OF DIRECTORS


     The  Company's  Certificate  of  Incorporation  and its Bylaws  authorize a
minimum of five (5) and a maximum of  twenty-five  (25)  directors but leave the
exact number to be fixed by resolution of the Board of Directors.  The Board has
fixed the number of directors at eight (8).

     Directors  are  elected to serve for  staggered  terms of three years each,
with the term of certain  directors  expiring each year.  Directors  serve until
their successors are duly elected and qualified.

     If, for any reason,  any of the nominees  become  unavailable for election,
the proxy  solicited  by the Board of  Directors  will be voted for a substitute
nominee  selected by the Board of Directors.  The Board has no reason to believe
that any of the named  nominees is not  available  or will not serve if elected.
Unless  authority to vote for the nominee is withheld,  it is intended  that the
shares represented by the enclosed proxy card, if executed and returned, will be
voted "FOR" the election of the nominees proposed by the Board of Directors.


       THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF
                   THE NOMINEES NAMED IN THIS PROXY STATEMENT.


Information with respect to the Nominees

     The  following  tables set forth,  as of the Record Date,  the names of the
nominees for election and those directors whose terms continue beyond the Annual
Meeting,  their ages, a brief  description of their recent business  experience,
including present  occupations,  and the year in which each became a director of
the Company or the Bank. No nominee is a director of another company  registered
pursuant to Section 12 of the Securities  Exchange Act of 1934 or subject to the
requirements  of  Section  15(d) of such  Act or any  company  registered  as an
investment company under the Investment Company Act of 1940.


                                       -3-




                                     Table I
                        Nominees for 2000 Annual Meeting

--------------------------------------------------------------------------------
Name, Age and Position  Principal Occupations During      Director       Term
   With the Company         Past Five Years               Since (1)     Expires
--------------------------------------------------------------------------------

Richard Scott, 66       Dentist, Richard Scott, DDS
Director                Franklin, New Jersey                1976        2002
--------------------------------------------------------------------------------

Joseph Zitone, 70       General Contractor, Zitone
Director                Construction Montague, New Jersey   1984        2002

--------------------------------------------------------------------------------
-----------------------------------------

     (1)  Includes  prior  service  on Board of  Directors  of the Bank prior to
          formation of the Company.

                                    Table II
    Directors of the Company whose Terms Continue Beyond this Annual Meeting
--------------------------------------------------------------------------------

Name, Age and Position      Principal Occupations During      Director    Term
   With the Company                Past Five Years            Since (1)  Expires
--------------------------------------------------------------------------------

Mark J. Hontz, 35       Partner                                 1998       2003
Director                Hollander Hontz Weaver & Hinkes,L.L.C.
                        Newton, New Jersey
--------------------------------------------------------------------------------

Donald L. Kovach, 67    Chairman, CEO and President             1976       2003
Chairman of the Board,  of the Company and the Bank
 CEO and President      and Attorney at Law
                        Franklin, New Jersey
--------------------------------------------------------------------------------

Joel D. Marvil, 66      Chairman of Manufacturing Co.           1989       2003
Director                Ames Rubber Corporation
                        Hamburg, New Jersey
--------------------------------------------------------------------------------

Irvin Ackerson, 79      Excavating Contractor
Director                Ackerson Contracting Co.                1976       2004
                        Oak Ridge, New Jersey
--------------------------------------------------------------------------------

William E. Kulser, 65   Certified Public Accountant             1976      2004
Secretary and Director  Caristia, Kulsar & Wade, P.A.
                        Sparta, New Jersey
--------------------------------------------------------------------------------

Terry Thompson, 55      Executive Vice President and Chief
Director                Operations Officer of the Bank          2001      2004

--------------------------------------------------------------------------------

     (1)  Includes  prior  service  on Board of  Directors  of the Bank prior to
          formation of the Company.

                                      -4-




Board of Directors' Meetings


     Pursuant  to the New  Jersey  Business  Corporation  Act and the  Company's
by-laws,  the Company's  business and affairs are managed under the direction of
the Board of Directors. The Board of Directors of the Company held five meetings
during 2001.  The Board of Directors  holds  regularly  scheduled  meetings each
month and special meetings as circumstances require. All of the directors of the
Company  attended at least 75% of the total  number of Board  meetings  held and
committee meetings held during 2001.

Committees of the Board



     During 2001,  the Board of Directors  maintained  an Audit  Committee and a
Compensation  Committee.  The Company  does not  maintain a separate  Nominating
Committee. The full Board acts as a Nominating Committee.

Audit  Committee.  The  Company's  Audit  Committee  consisted  during  2001  of
-----------------
Directors  William E. Kulsar  (Chairman),  Richard Scott, and Mark J. Hontz. The
Audit Committee met four times during 2001.

Audit Committee Report

     The Audit  Committee  meets  periodically  to consider  the adequacy of the
Company's financial controls and the objectivity of its financial reporting. The
Audit Committee meets with the Company's  independent auditors and the Company's
internal auditors, both whom have unrestricted access to the Audit Committee.

     All  Directors  who  serve on the Audit  Committee  are  "independent"  for
purposes of the American Stock Exchange listing standards. The Board has adopted
a  written  charter  for the Audit  Committee  setting  forth the audit  related
functions the Audit Committee is to perform. This Charter was filed with the SEC
as an exhibit to last year's proxy statement.

     In connection with this year's  financial  statements,  the Audit Committee
has reviewed and discussed the Company's audited  financial  statements with the
Company's officers and Arthur Andersen,  LLP, our independent  auditors. We have
discussed  with Arthur  Andersen,  LLP, the matters  required to be discussed by
Statement on Auditing  Standards 61 (Communication  with Audit  Committees).  We
also have received the written disclosures and letters from Arthur Andersen, LLP
required  by   Independence   Standards   Board  Standard  No.  1  (Independence
Discussions with Audit Committees),  and have discussed with  representatives of
Arthur Andersen, LLP their independence.


                                      -5-





     Based on these reviews and discussions,  the Audit Committee recommended to
the Board of Directors that the audited financial  statements be included in the
Company's  Annual Report on form 10-KSB for the fiscal year 2001 for filing with
the U.S. Securities and Exchange Commission.

William E. Kulsar (Chairman)
Mark J. Hontz.


Compensation  Committee.  The Company  maintains a Compensation  Committee which
------------------------
sets the  compensation for the executive  officers of the Company.  In 2001, the
Compensation  Committee consisted of Directors Joel D. Marvil (Chairman),  Irvin
Ackerson, Joseph Zitone and Mark J. Hontz and met three times.

Compensation of Directors


     During 2001,  Directors of the Bank who were not full-time employees of the
Bank  received a fee of $500 for each regular  monthly  Board meeting or special
Board  meeting  attended,  and  $100  for  each  committee  meeting  attended.In
addition,  each Director who  undertook a special  project at the request of the
Bank and with Board of  Directors'  approval  was paid at an hourly rate of $100
per hour for their time spent on the  project.  Directors of the Company did not
receive any  additional  compensation  for their  service on the Bank's Board of
Directors during 2001. During 2001,  Directors of the Company received an annual
retainer of $4,000 each.


     The Company maintains the 1995 Stock Option Plan for Non-Employee Directors
(the  "Non-Employee  Plan),  the  purpose of which is to assist  the  Company in
attracting and retaining  qualified  persons to serve as members of the Board of
Directors.  Under the  Non-Employee  Plan,  options to purchase up to a total of
32,000 shares of Common Stock may be granted at exercise prices which may not be
less than the fair market value of the Common Stock on the date of grant.  Under
the  Non-Employee  Plan, each  non-employee  director elected at the 1995 Annual
Meeting was granted an option to purchase  3,000 shares at $11.25 per share.  In
addition,  each  non-employee  director who is elected or re-elected to serve on
the Board of Directors at succeeding  annual  meetings will be granted an option
to  purchase  500 shares of Common  Stock at the time of such  re-election.  The
exercise  price for options  granted in connection  with the 2001 annual meeting
was $10.25.


          In  addition,  members  of the  Board of  Directors  are  eligible  to
     participate  in  the  2001  Stock  Option  Plan,   which  was  approved  by
     shareholders  last  year.  Under the 2001  Stock  Option  Plan,  options to
     purchase  up to a total of 165,000  shares of Common  Stock may be granted.
     Pursuant to the terms of the 2001 Stock Option Plan,  options which qualify
     as incentive stock options under the Internal  Revenue Code of 1986 must be
     granted at an exercise  price of no less than 100% of the then current fair
     market  value of the Common  Stock,  and  options  which are  non-statutory
     options  may be granted at an  exercise  price no less than 85% of the then
     current fair market value of the Common Stock.



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



     The  following  table  sets forth  information  concerning  the  beneficial
ownership of shares of Common Stock as of February 28, 2002,  by (i) each person
who is known by the Company to own  beneficially  more than five percent (5%) of
the issued and  outstanding  Common  Stock ,(ii) each  director  and nominee for
director of the Company,  (iii) each executive  officer of the Company described
in this Proxy Statement under the caption "Executive  Compensation" and (iv) all
directors  and executive  officers of the Company as a group.  Other than as set
forth in this table,  the Company is not aware of any  individual or group which
holds in excess of 5% of the outstanding Common Stock.


================================================================================
Name of Beneficial Owner          Number of Shares       Percent
                              Beneficially Owned (1)     of Class


--------------------------------------------------------------------------------
                                                                1.93%
Irvin Ackerson                    32,028 (2)
--------------------------------------------------------------------------------
                                                                0.17%
Mark J. Hontz                      2,893 (3)
--------------------------------------------------------------------------------
                                                                7.27%
Donald L. Kovach                   0,742 (4)(5)
--------------------------------------------------------------------------------
                                  27,706(6)                     1.67%
William E. Kulsar
--------------------------------------------------------------------------------
                                                                2.68%
Joel D. Marvil                    44,440 (7)
--------------------------------------------------------------------------------
                                                                3.23%
Richard Scott                     53,551 (8)
--------------------------------------------------------------------------------
                                                                1.14%
Terry Thompson                    18,993 (9)
--------------------------------------------------------------------------------
                                                                5.13%
Joseph Zitone                     85,156 (10)
--------------------------------------------------------------------------------
 Directors & Principal Officers  385,509                       23.22%
 as a Group (8persons)

--------------------------------------------------------------------------------

Beneficial Owners of more than 5%
of Common Stock:
--------------------------------------------------------------------------------
                                 162,481                        9.79%
Ambrose Hamm
P.O. Box E
Branchville, NJ 07826
--------------------------------------------------------------------------------
                                 163,391                        9.84%

Lakeland Bancorp, Inc.
250 Oak Ridge Road
Oak Ridge, NJ 07438
================================================================================


                                      -7-



(1)  Beneficially  owned  shares  include  shares  over  which the named  person
     exercises  either sole or shared voting power or sole or shared  investment
     power. It also includes shares owned (i) by a spouse,  minor children or by
     relatives  sharing the same home,  (ii) by entities  owned or controlled by
     the named  person,  and (iii) by other  persons if the named person has the
     right to acquire such shares within 60 days by the exercise of any right or
     option.  Unless  otherwise  noted,  all  shares  are  owned of  record  and
     beneficially  by the named person,  either directly or through the dividend
     reinvestment plan.

(2)  Includes  10,875 shares owned by Mr.  Ackerson's  wife. Also includes 9,253
     shares  purchasable  upon the  exercise of  immediately  exercisable  stock
     options.

(3)  Also  includes   1,788   purchasable   upon  the  exercise  of  immediately
     exercisable stock options.

(4)  Includes 15,727 shares owned by Mr. Kovach's wife, 5,731 shares in the name
     of Merrill  Lynch  Pierce  Fenner & Smith,  FBO Donald L.  Kovach and 3,458
     shares in the name of Merrill  Lynch  Pierce  Fenner & Smith,  FBO Betty J.
     Kovach,  1,260 shares in the name of IBAA Financial  Services FBO Donald L.
     Kovach,  1,365 shares in the name of IBAA  Financial  Services FBO Betty J.
     Kovach.  Also includes 5,967 shares  purchasable upon the exercise of stock
     options.

(5)  Includes  39,387  shares  over which Mr.  Kovach has  voting  authority  as
     administrator  for The Sussex  County State Bank Employee  Stock  Ownership
     Plan.

(6)  Includes  15,523shares  in the name of Merrill  Lynch Pierce Fenner & Smith
     FBO  William E.  Kulsar IRA and 1,596  shares in the name of Merrill  Lynch
     Pierce  Fenner & Smith FBO William E. Kulsar.  Also  includes  9,719 shares
     purchasable upon the exercise of immediately exercisable stock options.

(7)  Also includes  10,790 shares  purchasable  upon the exercise of immediately
     exercisable stock options.

(8)  Also includes  10,769 shares  purchasable  upon the exercise of immediately
     exercisable stock options.

(9)  Also includes 3,600 shares purchasable upon the exercise of stock options

(10) Includes 11,237 shares owned by the Zitone  Construction & Supply Co., Inc.
     Profit Sharing Plan Trust and 15,300 shares in the name of Smith Barney FBO
     Joseph Zitone.  Also includes 1,525 shares purchasable upon the exercise of
     immediately exercisable stock options.



Annual Executive Compensation and All Other Compensation


                                      -8-



         The following table sets forth a summary for the last three (3) fiscal
years of the cash and non-cash compensation awarded to, earned by, or paid to,
the Chief Executive Officer of the Company. Our CEO is the only executive
officer whose remuneration exceeded $100,000 for the last fiscal year.



                                             SUMMARY COMPENSATION TABLE

                                           Cash and Cash Equivalent Forms
                                                   of Remuneration

--------------=================================================================================================

                                   Annual Compensation              Award                  Payouts
                               --------------------------------------------------------------------------------
                                                                    Securities
   Name and                                                         Underlying       LTIP       All Other
   Principal                                      Other Annual     Options/SARs    Payouts     Compensation
   Position       Year    Salary($)   Bonus($)   Compensation ($)       (#)          ($)           ($)

---------------------------------------------------------------------------------------------------------------

                                                                                  
   Donald L.      2001    $177,234      -0-            (1)              1,080       None           -0-
   Kovach,
   Chairman of
   the
   Board and CEO
                 ----------------------------------------------------------------------------------------------

                  2000    $168,618      -0-            (1)                315      None            -0-
                 ----------------------------------------------------------------------------------------------

                  1999    $159,723      -0-            (1)                720      None            -0-
---------------------------------------------------------------------------------------------------------------


(1) During the fiscal years presented, the Company provided additional life
insurance and an automobile and provided a match to Mr. Kovach's 401(k) plan
account membership for Mr. Kovach. The use made thereof for personal purposes
did not exceed 10% of the total cash compensation to such persons which is the
sum of base salary and bonus and therefore is not included in the above table.


Employment Agreements

     The Company and the Bank are parties to an  Employment  Agreement  with Mr.
Donald L. Kovach  pursuant to which he serves as President  and Chief  Executive
Officer of the Company and the Bank (the "Employment Agreement"). The Employment
Agreement  provides  for a term ending on August 31,  2002,  although it will be
automatically  extended on each  anniversary  date for up to two (2)  additional
one-year  periods unless either party provides  notice of their intention not to
extend  the  contract.  No such  notice  was  given  for  the  August  31,  2001
anniversary.  The Employment  Agreement  provides that Mr. Kovach will receive a
base salary of $160,200,  subject to increase or decrease,  and may be granted a
discretionary  bonus as  determined by the Board of  Directors.  The  Employment
Agreement permits the Company to terminate Mr. Kovach's  employment for cause at
any time. The Employment  Agreement  defines cause to mean personal  dishonesty,
willful  misconduct,   breach  of  fiduciary  duty  involving  personal  profit,
intentional failure to perform stated duties,  willful violation of law, rule or
regulation, other than traffic violations or similar offenses, or violation of a
final  cease and desist  order,  or a material  breach of any  provision  of the
Agreement.  In the event Mr.  Kovach is  terminated  for any  reason  other than
cause,  or in  the  event  Mr.  Kovach  resigns  his  employment  because  he is
reassigned  to a position  of lesser  rank or status  than  President  and Chief
Executive Officer, his place of employment is


                                      -9-



relocated by more than 30 miles from its location on the date of the  Agreement,
or his compensation or other benefits are reduced,  Mr. Kovach,  or in the event
of his death,  his  beneficiary,  will be entitled to receive his base salary at
the  time of such  termination  or  resignation  for the  remaining  term of the
Agreement.  In addition,  the Company will  continue to provide Mr.  Kovach with
certain  insurance  and  other  benefits  through  the  end of the  term  of the
Agreement.  Mr. Kovach's  Employment  Agreement  further  provides that upon the
occurrence of a change in control of the Company,  as defined in the  Employment
Agreement,  and in the event Mr.  Kovach is  terminated  for reasons  other than
cause or in the event Mr.  Kovach,  within 18 months of the  change in  control,
resigns his employment for the reasons  discussed above, he shall be entitled to
receive a severance  payment based upon his then current base salary.  Under the
Agreement,  in the event the change in control occurs, Mr. Kovach is entitled to
a  severance  payment  equal to 2.99 times his then  current  base  salary.  The
Employment  Agreement also prohibits Mr. Kovach from competing with the Bank and
the Company for a period of one year following termination of his employment.


Retirement Plans

         The Bank maintains a salary continuation plan for Mr. Kovach. Under
this plan, Mr. Kovach will receive a retirement benefit equal to 35% of his
average final compensation determined by his last five years of employment. Mr.
Kovach will receive this benefit in the event that he works to age 70, or he is
involuntarily discharged prior to age 70 for any reason other than "cause". For
purposes of the Salary Continuation Agreement, cause is defined in the same
manner as under Mr. Kovach's Employment Agreement. Annual retirement payments
are to be made for fifteen years under the Salary Continuation Agreement to Mr.
Kovach or, in the event of his death, to his spouse.


1995 Incentive Stock Option Plan and 2001 Stock Option Plan

     The Company  maintains the 1995 Incentive  Stock Option Plan which provides
for options to purchase  shares of Common Stock to be issued to key employees of
the Company,  the Bank and any other  subsidiaries which the Company may acquire
or incorporate  in the future.  The Company also maintains the 2001 Stock Option
Plan,  under which  options to purchase  shares of Common Stock may be issued to
employees,  officers  and  directors  of the  Company,  the Bank  and any  other
subsidiaries  which the  Company  may  acquire  or  incorporate  in the  future.
Recipients  of options  granted under the Plans are selected by the Stock Option
Committee  of the  Board  of  Directors.  The  Stock  Option  Committee  has the
authority to determine  the terms and  conditions  of options  granted under the
Plans and the exercise price  therefore.  The exercise price for options granted
under the 1995  Incentive  Stock Option Plan,  and for  Incentive  Stock Options
under the 2001 Stock  Option Plan may be no less than the fair  market  value of
the Common Stock. The exercise price for non-statutory options granted under the
2001 Stock  Option Plan may be no less than 85% of the fair market  value of the
Common Stock.

     The following table sets forth information regarding stock option grants to
the individuals named in the table above:


                                      -10-





                                              OPTION/SAR GRANTS IN LAST FISCAL YEAR

=================================================================================================================================
INDIVIDUAL GRANTS

---------------------------------------------------------------------------------------------------------------------------------

                          Number of Securities        % of Total
                               Underlying         Option/SARs Granted     Exercise or                         Present Value of
                              Options/SARs         to Employees in         Base Price        Expiration       Option on Date of
            Name             Granted (#)(1)          Fiscal Year               ($/SH)             Date           Grant($)(2)
---------------------------------------------------------------------------------------------------------------------------------

                                                                                                  
Donald L. Kovach
                                 1,080                    14%               $10.50             01/17/06             $3,456

==================================================================================================================================
-------------------


     (1)  As of  December  31,  2001,  none of these  options  were  immediately
          exercisable.

     (2)  The present  value of each option  grant is  estimated  on the date of
          grant using the Black-Scholes  option pricing model with the following
          weighted  average  assumptions:  dividend  yield  of  1.98%,  expected
          volatility of 22.5%, risk free interest rate of 4.88%, and an expected
          life of five (5) years.

     The following table sets forth  information  concerning the fiscal year-end
value of unexercised options held by the executive officers of the Company named
in the table above.  No stock options were exercised by such executive  officers
during 2001.




                                         AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
                                       YEAR AND FY-END OPTION/SAR VALUES

==================================================================================================================================
                                                                                                  Value of Unexercised
                                                                  Number of Securities            In-the-Money Options/SARs at
                                                                  Underlying Unexercised          FY-End ($) (based on $10.25 per
                                                   Value          Options/SARs at FY-End (#)      share)
                           Shares Acquired on      Realized       Exercisable/                    Exercisable/
       Name                   Exercise (#)           ($)             Unexercisable                   Unexercisable
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
                                                                                            
   Donald L. Kovach               2,122              $7,993              6,453/1,266                 $ 29,356/$338
==================================================================================================================================



                                      -11-



Interest of Management and Others in Certain Transactions

     The Bank  has made in the past  and,  assuming  continued  satisfaction  of
generally  applicable  credit  standards,  expects to  continue to make loans to
directors,  executive  officers  and  their  associates  (i.e.  corporations  or
organizations  for which they serve as  officers or  directors  or in which they
have beneficial  ownership  interests of ten percent or more).  These loans have
all been made in the ordinary course of the Bank's business on substantially the
same terms, including interest rates and collateral,  as those prevailing at the
time for comparable transactions with other persons and do not involve more than
the normal risk of collectibility or present other unfavorable features.

     The Bank paid $12,943 to Kovach and Vanderwiele, Attorneys at Law, at which
Donald L.  Kovach,  Chairman  of the Board and  Chief  Executive  Officer,  is a
member,  for legal services  rendered to the Bank during fiscal 2001.  Said firm
renders legal services to the Bank on a continuing basis.

     The Bank paid $ 13,450 during fiscal 2001 to Caristia, Kulsar & Wade, P.A.,
Certified  Public  Accountants,  at which  William E.  Kulsar,  Secretary  and a
Director  of the  Company  and the Bank is a  member,  for  accounting  services
rendered  to the Bank for IRS  filing  purposes  and other  accounting  services
beyond those provided by the annually retained  independent public  accountants.
Caristia,  Kulsar, & Wade, P.A.  continues to render accounting  services to the
Bank. Mr. Kulsar was also paid $8,625 in consulting fees.

     The Bank paid $15,895 to Irvin Ackerson for appraisal  services rendered to
the Bank during  fiscal  2001.  Irvin  Ackerson  continues  to render  appraisal
services to the Bank.

     The Bank leases its Montague  branch office from  Montague Mini Mall,  Inc.
under a lease covering 1,200 square feet. The lease  agreement was renewed as of
April 1, 1997.  As renewed,  the lease will  terminate  on March 31,  2002,  and
provides  for a monthly rent of $1,650.  Mr.  Joseph  Zitone,  a Director of the
Company,  is a majority  stockholder  of Montague  Mini Mall,  Inc.  The Company
considers   the  lease  terms  to  be  comparable  to  those  which  exist  with
unaffiliated third parties.


Recommendation and Vote Required

     Nominees  will be elected by a plurality of the shares voting at the Annual
Meeting.

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ITS NOMINEES
FOR THE BOARD OF DIRECTORS.


                                      -12-




                              INDEPENDENT AUDITORS

     The Company's  independent  auditors for the fiscal year ended December 31,
2001 were Arthur Andersen, LLP ("Arthur Andersen").  Arthur Andersen has advised
the  Company  that one or more of its  representatives  will be  present  at the
Annual  Meeting  to make a  statement  if  they  so  desire  and to  respond  to
appropriate questions.

Audit Fees

     The Company was billed the aggregate amount of $74,500for  fiscal year 2001
for professional services rendered by Arthur Andersen for audit of the Company's
annual  financial  statements  for 2001 and review of the  financial  statements
included in the Company's forms 10-QSB during 2001.

Financial Information System Design and Implemental Fees

     The  Company  was not billed any amount for  financial  information  system
design and implementation services rendered by Arthur Andersen during 2001.

All Other Fees

     In addition to the audit fees described  above,  Arthur Andersen billed the
Company  $35,500 in other fees related to consultation  on  acquisitions.  Other
than these fees and the fees set forth above  under Audit Fees,  the Company was
not billed for any services by Arthur Andersen for fiscal year 2001.

Change in Auditors

     In 2001 the Company  changed  independent  auditors.  The Company  replaced
Radics & Co., LLC with Arthur Andersen to serve as its independent auditors. The
decision to change auditors was  recommended by the Company's  Audit  Committee.
For the fiscal years ended  December 31, 2000 and 1999, the Company had retained
the services of Radics & Co., LLC as its independent  auditors.  There have been
no disagreements  with Radics & Co., LLC on any matter of accounting  principles
or practices,  financial  statement  disclosure  or auditing  scope or procedure
which,  if not resolved to the  satisfaction  of Radics & Co.,  LLC,  would have
caused  it to make  reference  to the  subject  matter  of the  disagreement  in
connection  with  their  reports.  The  independent   auditor's  report  on  the
consolidated  financial  statements for the fiscal years ended December 31, 2000
and 1999 did not contain an adverse  opinion or disclaimer  of opinion,  and was
not qualified or modified as to uncertainty, audit scope or auditing principles.


                                      -13



                          COMPLIANCE WITH SECTION 16(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers  and  directors,  and  persons  who own  more  than  ten  percent  of a
registered  class  of the  Company's  equity  securities,  to  file  reports  of
ownership and changes in ownership with the Securities and Exchange  Commission.
Officers,  directors and greater than ten percent  stockholders  are required by
regulation of the Securities and Exchange Commission to furnish the Company with
copies of all Section 16(a) forms they file.

     The Company believes that,  during the fiscal year ended December 31, 2001,
all  persons  subject to Section  16(a) have made all  required  filings for the
fiscal year 2001.

                              STOCKHOLDER PROPOSALS

     Proposals  of  stockholders  to be  included  in the  Company's  2003 proxy
material must be received by the Secretary of the Company no later than November
22, 2002.


                                  OTHER MATTERS

     The Board of  Directors  is not aware of any other  matters  which may come
before the Annual Meeting.  However, in the event such other matters come before
the meeting,  it is the  intention of the persons  named in the proxy to vote on
any  such  matters  in  accordance  with  the  recommendation  of the  Board  of
Directors.



-14-



                                 SUSSEX BANCORP

                               REVOCABLE PROXY FOR
                         ANNUAL MEETING OF SHAREHOLDERS
                                 APRIL 24, 2002

                  Solicited on Behalf of the Board of Directors

     The undersigned  hereby  appoints  Candace A. Leatham and Terry H. Thompson
and each of them, with full power of substitution,  to vote all of the shares of
Sussex Bancorp (the "Company")  standing in the undersigned's name at the Annual
Meeting of  Shareholders  of the  Company,  to be held at the Augusta  office of
Sussex Bank (the  "Bank"),  100 Route 206,  Augusta,  New Jersey,  on Wednesday,
April 24, 2002, at 10:30 A.M., and at any adjournment  thereof.  The undersigned
hereby  revokes  any and all  proxies  heretofore  given  with  respect  to such
meeting.

     This proxy will be voted as specified below. If no choice is specified, the
proxy will be voted "FOR" Management's nominees to the Board of Directors.

         The Board of Directors recommends a vote for its nominees.

          1.   Election of the  following  two (2) nominees to each serve on the
               Board of Directors  for a term of three (3) years and until their
               successors are elected and duly qualified:  Richard Scott, Joseph
               Zitone

                  [ _ ] FOR ALL NOMINEES


          TO WITHHOLD  AUTHORITY FOR ANY OF THE ABOVE NAMED NOMINEES,  PRINT THE
          NOMINEE'S NAME ON THE LINE BELOW:


        ______________________________________________


                  [ _ ] WITHHOLD AUTHORITY FOR ALL NOMINEES


          2.   In their  discretion,  such other  business as may properly  come
               before the meeting.


Dated:                          , 2002.
      --------------------------                     ---------------------------
                                                     Signature

                                                     ---------------------------
                                                     Signature





(Please sign exactly as your name appears. When signing as an executor,
administrator, guardian, trustee or attorney, please give your title as such. If
signer is a corporation, please sign the full corporate name and then an
authorized officer should sign his name and print his name and title below his
signature. If the shares are held in joint name, all joint owners should sign.)


PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE.