CUSIP No. 81424D109 Page 1 of 32 Pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
SECURITY FINANCIAL BANCORP, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
81424D109
(CUSIP Number)
Phillip M. Goldberg
Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, Illinois 60611
(312) 755-1900
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 19, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
<PAGE>
CUSIP No. 81424D109 Page 2 of 32 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Financial Edge Fund, L.P.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 176,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
176,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
176,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.1%
14 Type of Reporting Person
PN
<PAGE>
CUSIP No. 81424D109 Page 3 of 32 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Financial Edge - Strategic Fund, L.P.
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 176,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
176,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
176,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.1%
14 Type of Reporting Person
PN
<PAGE>
CUSIP No. 81424D109 Page 4 of 32 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
PL Capital, LLC
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 176,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
176,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
176,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.1%
14 Type of Reporting Person
PN
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CUSIP No. 81424D109 Page 5 of 32 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
John Wm. Palmer
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States of America
7 Sole Voting Power
100 shares
Number of
Shares 8 Shared Voting Power
Beneficially 176,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 100 shares
10 Shared Dispositive Power
176,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
177,000 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.1%
14 Type of Reporting Person
IN
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CUSIP No. 81424D109 Page 6 of 32 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Richard J. Lashley
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds:
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States of America
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 177,900 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
177,900 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
177,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.2%
14 Type of Reporting Person
IN
<PAGE>
CUSIP No. 81424D109 Page 7 of 32 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Beth R. Lashley
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States of America
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 1,000 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
1,000 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,000 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
0.1%
14 Type of Reporting Person
IN
<PAGE>
CUSIP No. 81424D109 Page 8 of 32 Pages
This is Amendment No. 1 to a Schedule 13D filed jointly by Financial
Edge Fund, L.P., a Delaware limited partnership ("Financial Edge Fund"),
Financial Edge - Strategic Fund, L.P., a Delaware limited partnership
("Financial Edge Strategic"), PL Capital, LLC ("PL Capital"), John W. Palmer and
Richard J. Lashley on March 10, 2000 (as earlier amended, the "Original 13D").
As of the date of this Amendment, Beth Lashley is also filing jointly. All of
the filers of this Amendment are collectively the "Group."
This Schedule 13D relates to the common stock, $.01 par value of
Security Financial Bancorp, Inc. (the "Company"). The address of the principal
executive offices of the Company is 9321 Wicker Avenue, St. John, Indiana 46373.
The joint filing agreement of the members of the Group is attached as Exhibit 1.
The following items in the Original 13D are amended to read in their entirety as
follows:
Item 2. Identity and Background
(a)-(c) This statement is filed by Mr. John Palmer, individually, with
respect to stock owned by him, and by Mr. John Palmer and Mr. Richard Lashley,
with respect to the shares of Common Stock beneficially owned by Mr. Palmer and
Mr. Lashley, which are shares of Common Stock held in the name of Financial Edge
Fund and Financial Edge Strategic, in Mr. Palmer's and Mr. Lashley's capacities
as the Managing Members of PL Capital, which is the General Partner of Financial
Edge Fund and Financial Edge Strategic. The business address of Mr. Palmer and
Mr. Lashley is PL Capital, LLC, 2015 Spring Road, Suite 290, Oak Brook, Illinois
60523. Mr. Palmer and Mr. Lashley serve as the Managing Members of PL Capital,
which is the General Partner of Financial Edge Fund and Financial Edge
Strategic. The principal employment of Mr. Palmer and Mr. Lashley is investment
management. This statement is also filed by Beth R. Lashley, Mr. Lashley's
spouse. Ms. Lashley is a Certified Public Accountant who is currently not
employed. Ms. Lashley's address is c/o PL Capital, LLC, 2015 Spring Road, Suite
290, Oak Brook, Illinois 60523.
(d) During the past five years, no member of the Group has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the past five years, no member of the Group (a) has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and, as a result of such proceeding, was, or is subject to, a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
(f) All of the individuals who are members of the Group are citizens
of the United States.
Item 3. Source and Amount of Funds or Other Consideration
The amount of funds expended to date by Financial Edge Fund to acquire
the 166,900 shares of Common Stock it holds in its name is $1,820,363. Such
funds were provided
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CUSIP No. 81424D109 Page 9 of 32 Pages
in part from Financial Edge Fund's available capital and, from time to time, in
part by margin account loans from subsidiaries of The Bear Stearns Companies,
Inc. ("Bear Stearns"), extended in the ordinary course of business.
The amount of funds expended to date by Financial Edge Strategic to
acquire the 10,000 shares of Common Stock it holds in its name is $108,150. Such
funds were provided in part from Financial Edge Strategic's available capital
and, from time to time, in part by margin account loans from subsidiaries of
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), extended in the
ordinary course of business.
The amount of funds expended to date by Beth Lashley to acquire the
1,000 shares of Common Stock she holds in her name is $12,810. The stock is held
in Ms. Lashley's IRA account at Bear Stearns. Mr. Lashley shares with Ms.
Lashley the power to direct the disposition of the shares of Common Stock
beneficially owned by Ms. Lashley in the account at Bear Stearns, pursuant to a
trading authorization granted by Ms. Lashley to Mr. Lashley, under that firm's
usual terms and conditions.
The amount of funds expended to date by John Palmer to acquire the 100
shares of Common Stock he holds in his name is $1,289.
All purchases of Common Stock made by members of the Group using funds
borrowed from Bear Stearns or DLJ, if any, were made in margin transactions on
those firms' usual terms and conditions. All or part of the shares of Common
Stock owned by members of the Group may from time to time be pledged with one or
more banking institutions or brokerage firms as collateral for loans made by
such entities to members of the Group. Such loans generally bear interest at a
rate based upon the broker's call rate from time to time in effect. Such
indebtedness, if any, may be refinanced with other banks or broker-dealers.
Item 4. Purpose of Transaction
The purpose of the acquisition of the shares of Common Stock by
members of the PL Capital Group is to profit from the appreciation in the market
price of the Common Stock through the assertion of shareholder rights. The Group
expects to actively assert shareholder rights, in the manner described below,
with the intent to influence the policies of the Company. Members of the Group
have met with and had discussions with John Hyland, CEO of the Company, and
other members of the Company's management, on several occasions within the past
three months, to suggest ways for the Company to maximize short and long-term
value for all shareholders.
During such discussions the Group suggested that the Company has a
significant opportunity to create shareholder value over a reasonable time frame
by:
(1) Aggressively repurchasing its Common Stock in the open market,
beginning at the earliest possible opportunity permitted by its
banking regulators (i.e., six months after the IPO date, in the
Company's
<PAGE>
CUSIP No. 81424D109 Page 10 of 32 Pages
instance, July 2000), regardless of whether or not the stock
option and MRP plans have been approved by shareholders;
(2) Aggressively reducing overhead expense ratios, which, despite
some progress, are still currently well in excess of its peer
groups;
(3) Prudently leveraging the capital raised, being careful to
preserve the Company's flexibility to repurchase the maximum
number of shares of Common Stock permitted by its banking
regulators; and
(4) Constantly monitoring the opportunities available to the Company
to maximize shareholder value through sale of the Company, if
such a strategy provides a demonstrable increase in shareholder
value over a strategy of remaining independent.
By letter dated May 19, 2000, in compliance with the Company's
By-Laws, Mr. Palmer notified the Company of his intention to nominate himself
and Mr. Lashley for election to the Board of Directors of the Company at its
2000 Annual Meeting of Shareholders (the time and date of which have not yet
been announced by the Company). A copy of that letter is attached as Exhibit 2.
Members of the Group may engage in a variety of actions in connection with such
nomination. Without limitation, Messrs. Palmer and Lashley and other members of
the Group may both (a) communicate and discuss their views on the Company and
election of directors to the Board with other shareholders and (b) solicit
proxies or written consents from other shareholders of the Company with respect
to election of their Board nominees or other proposals for shareholder action.
In addition, members of the Group may (1) contact financial institutions that
may have an interest in acquiring the Company and (2) make proposals to the
Company's Board and management (including with regard to a possible sale of the
Company).
By letter dated May 19, 2000, Mr. Palmer requested a copy of the
Company's most recent shareholder list and other related items. A copy of that
letter is attached as Exhibit 3.
Members of the Group may make further purchases of shares of Common
Stock. Members of the Group may dispose of any or all the shares of Common Stock
held by them, although they have no current intention to do so. Except as noted
in this Schedule 13D, no member of the Group has any plans or proposals which
relate to, or could result in, any of the matters referred to in paragraphs (b)
through (j), inclusive, of Item (4) of Schedule 13D. Members of the Group may,
at any time and from time to time, review or reconsider their positions and
formulate plans or proposals with respect thereto.
Item 5. Interest in Securities of the Company
The percentages used in this Schedule 13D are calculated based upon
the number of outstanding shares of Common Stock, 1,938,460, reported as the
number of outstanding shares as of May 1, 2000, on a Form 10-QSB filed on May
12, 2000. All purchases and sales of Common Stock reported herein were made in
open market
<PAGE>
CUSIP No. 81424D109 Page 11 of 32 Pages
transactions on the Nasdaq National Market System. Members of the Group
collectively beneficially own an aggregate of 178,000 shares of the Company.
(A) Financial Edge Fund
(a) Aggregate number of shares beneficially owned: 176,900
Percentage: 9.1%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 176,900
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 176,900
(c) The Financial Edge Fund has made the following purchases of Common
Stock in the last 60 days:
- --------------------------------------------------------------------------------
Date Number of Shares Price Per Share($) Total Cost($)
- --------------------------------------------------------------------------------
4/25/00 10,000 12.375 123,775
- --------------------------------------------------------------------------------
(d) Because they are the Managing Members of PL Capital, the general
partner of Financial Edge Fund, Mr. Palmer and Mr. Lashley have the
power to direct the affairs of Financial Edge Fund, including the
voting and disposition of shares of Common Stock held in the name of
Financial Edge Fund. Therefore, Mr. Palmer and Mr. Lashley are deemed
to share voting and disposition power with Financial Edge Fund with
regard to those shares of Common Stock.
(B) Financial Edge Strategic
(a) Aggregate number of shares beneficially owned: 176,900
Percentage: 9.1%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 176,900
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 176,900
(c) Financial Edge Strategic has made no purchases of Common Stock in the
last 60 days.
(d) Because they are the Managing Members of PL Capital, the general
partner of Financial Edge Strategic, Mr. Palmer and Mr. Lashley have
the power to direct the affairs of Financial Edge Strategic, including
the voting and disposition of shares of Common Stock held in the name
of Financial Edge Strategic. Therefore, Mr. Palmer and Mr. Lashley are
deemed to share voting and
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CUSIP No. 81424D109 Page 12 of 32 Pages
disposition power with Financial Edge Strategic with regard to those
shares of Common Stock.
(C) PL Capital
(a) Aggregate number of shares beneficially owned: 176,900
Percentage: 9.1%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 176,900
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 176,900
(c) PL Capital has made no purchases of Common Stock.
(d) Because they are the Managing Members of PL Capital, Mr. Palmer and
Mr. Lashley have the power to direct the affairs of PL Capital. PL
Capital is the general partner of Financial Edge Fund and Financial
Edge Strategic. Therefore, PL Capital may be deemed to share with Mr.
Palmer and Mr. Lashley voting and disposition power with regard to the
shares of Common Stock held by Financial Edge Fund and Financial Edge
Strategic.
(D) Mr. John Palmer
(a) Aggregate number of shares beneficially owned: 177,000
Percentage: 9.1%
(b) 1. Sole power to vote or to direct vote: 100
2. Shared power to vote or to direct vote: 176,900
3. Sole power to dispose or to direct the disposition: 100
4. Shared power to dispose or to direct disposition: 176,900
(c) Mr. Palmer has made the following purchases of Common Stock in the
last 60 days:
- --------------------------------------------------------------------------------
Date Number of Shares Price Per Share($) Total Cost($)
- --------------------------------------------------------------------------------
5/15/00 100 12.69 1,289
- --------------------------------------------------------------------------------
(E) Mr. Richard Lashley
(a) Aggregate number of shares beneficially owned: 177,900
Percentage: 9.2%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 177,900
3. Sole power to dispose or to direct the disposition: 0
<PAGE>
CUSIP No. 81424D109 Page 13 of 32 Pages
4. Shared power to dispose or to direct disposition: 177,900
(c) Mr. Lashley has made no purchases of Common Stock.
(F) Ms. Beth Lashley
(a) Aggregate number of shares beneficially owned: 1,000
Percentage: 0.1%
(b) 1. Sole power to vote or to direct vote: 0
2. Shared power to vote or to direct vote: 1,000
3. Sole power to dispose or to direct the disposition: 0
4. Shared power to dispose or to direct disposition: 1,000
(c) Ms. Lashley has made the following purchases of Common Stock within
the last 60 days:
- --------------------------------------------------------------------------------
Date Number of Shares Price Per Share($) Total Cost($)
- --------------------------------------------------------------------------------
5/15/00 1,000 12.75 $12,810
- --------------------------------------------------------------------------------
(d) Mr. Lashley shares with Ms. Lashley the power to direct the
disposition of the shares of Common Stock beneficially owned by Ms.
Lashley in her IRA account held at Bear Stearns, pursuant to a trading
authorization granted by Ms. Lashley to Mr. Lashley, under that firm's
usual terms and conditions.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Company.
Other than the Joint Filing Agreement filed as Exhibit 1 to this
filing, there are no contracts, arrangements, understandings or relationships
among the persons named in Item 2 hereof and between such persons and any person
with respect to any securities of the Company, including but not limited to
transfer or voting of any of the securities, finders' fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, divisions of
profits or losses, or the giving or withholding of proxies, except for sharing
of profits. PL Capital, as general partner of the Financial Edge Fund and
Financial Edge Strategic, is entitled to (1) an allocation of a portion of
profits, if any, and (2) a management fee based upon a percentage of total
capital.
Item 7. Material to be Filed as Exhibits
No. Description
--- -----------
1 Joint Filing Agreement.
2 Letter from John Palmer to the Company, dated May 19, 2000.
3 Letter from John Palmer to the Company, dated May 19, 2000.
<PAGE>
CUSIP No. 81424D109 Page 14 of 32 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: May 19, 2000
FINANCIAL EDGE FUND, L.P.
By: PL CAPITAL, LLC
General Partner
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
FINANCIAL EDGE - STRATEGIC FUND, L.P.
By: PL CAPITAL, LLC
General Partner
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
By: /s/ John Palmer By: /s/ Richard Lashley
John Palmer Richard Lashley
By: /s/ Beth Lashley
Beth Lashley
PL CAPITAL, LLC
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
CUSIP No. 81424D109 Page 15 of 32 Pages
EXHIBIT 1
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of
1934, as amended, the undersigned hereby agree that the Schedule 13D to which
this Joint Filing Agreement is being filed as an exhibit shall be a joint
statement filed on behalf of each of the undersigned.
Date: May 19, 2000
FINANCIAL EDGE FUND, L.P.
By: PL CAPITAL, LLC
General Partner
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
FINANCIAL EDGE - STRATEGIC FUND, L.P.
By: PL CAPITAL, LLC
General Partner
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
By: /s/ John Palmer By: /s/ Richard Lashley
John Palmer Richard Lashley
By: /s/ Beth Lashley
Beth Lashley
PL CAPITAL, LLC
By: /s/ John Palmer /s/ Richard Lashley
John Palmer Richard Lashley
Managing Member Managing Member
CUSIP No. 81424D109 Page 16 of 32 Pages
EXHIBIT 2
John Wm. Palmer
PL Capital, LLC
2015 Spring Road
Suite 290
Oak Brook, IL 60523
----------------------
May 19, 2000
CERTIFIED MAIL RETURN RECEIPT REQUESTED AND OVERNIGHT DELIVERY
- --------------------------------------------------------------
Mr. John P. Hyland
President and CEO
Security Financial Bancorp, Inc.
9321 Wicker Avenue
St. John, IN 46373
Re: Notice of Intent to Nominate Two Directors
------------------------------------------
Dear Mr. Hyland:
This letter constitutes a notice of intent by John Palmer to nominate
two persons for election as directors of Security Financial Bancorp, Inc. (the
"Corporation") at the 2000 Annual Meeting of Stockholders of the Corporation.
This notice is being provided to you pursuant to Article II, Section 6(c) of the
Corporation's By-Laws. Mr. Palmer beneficially owns 177,000 shares of the
Corporation's common stock, par value $.01 per share (the "Common Stock"), as
set forth in a Schedule 13D, as amended, filed by PL Capital, LLC ("PL
Capital"), and certain other persons regarding ownership of the Common Stock
(the "13D").
Mr. Palmer hereby notifies the Corporation pursuant to Article II,
Section 6(c) of the Corporation's By-Laws that he intends to nominate himself
and Richard J. Lashley for election to the Board of Directors of the Corporation
at the 2000 Annual Meeting of Stockholders of the Corporation. As required by
Section 6(c), also enclosed is the written consent of each proposed nominee to
be named in Mr. Palmer's proxy statement and to serve as a director of the
Corporation if elected.
Set forth below is certain information, including that required by
Section 6(c) of the Corporation's By-Laws. The information set forth below
responds fully to all of the requirements of Section 6(c). In certain instances
in which a disclosure item is not applicable or no disclosure is required to be
made pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended, no response has been provided below.
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CUSIP No. 81424D109 Page 17 of 32 Pages
(i) As to each proposed nominee:
A. Name, Age, Business Address and Residence Address
Name Age Business Address Residence Address
- ---- --- ---------------- -----------------
Richard Lashley 41 PL Capital 2 Trinity Place
2015 Spring Road Warren, NJ 07059
Suite 290
Oak Brook, IL 60523
John Palmer 39 PL Capital 4216 Richwood Court
2015 Spring Road Naperville, IL 60564
Suite 290
Oak Brook, IL 60523
B. Principal Occupation or Employment
Richard Lashley: Investment management, primarily as Managing Member of PL
Capital, LLC.
John Palmer: Investment management, primarily as Managing Member of PL
Capital, LLC.
C. Shares Owned Either Beneficially or Of Record
Name of Nominee Class Amount
- --------------- ----- ------
Richard Lashley Common 177,900
John Palmer Common 177,000
D. Interest of Certain Persons in Matters to be Acted Upon
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CUSIP No. 81424D109 Page 18 of 32 Pages
Except as otherwise set forth herein, neither Mr. Lashley nor Mr.
Palmer is or was, within the past year, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Corporation,
including, but not limited to joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding of proxies. PL Capital, which is the
general partner of Financial Edge Fund, L.P. (the "Fund") Financial Edge
Strategic Fund, L.P. ("Financial Edge Strategic"), and of which Mr. Lashley and
Mr. Palmer are each a Managing Member, is entitled to receive an allocation of
profits with respect to the shares owned by the Fund and Financial Edge
Strategic.
Except as otherwise set forth herein, neither Mr. Lashley nor Mr.
Palmer, nor any of their associates, has any arrangement or understanding with
any person with respect to any future employment with the Corporation or its
affiliates or with respect to any future transactions to which the Corporation
or any of its affiliates will or may be a party.
E. Other information relating to such person that is required to be disclosed
in a solicitation of proxies for the election of directors, or is otherwise
required, pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended.
Directorships of Other Publicly Owned Companies
- -----------------------------------------------
Mr. Lashley is currently a director of Haven Bancorp, Inc., a Delaware
corporation based in Westbury, New York. Neither Mr. Lashley nor Mr. Palmer is
presently serving as a director of any other corporation, partnership or other
entity that has a class of equity securities registered under the Securities
Exchange Act of 1934, as amended, or subject to the requirements of 15(d) of the
such Act or any company registered as an investment company under the Investment
Company Act of 1940.
Material Proceedings Adverse to the Corporation
- -----------------------------------------------
To Mr. Palmer's best knowledge, there are no material proceedings to
which either Mr. Lashley or Mr. Palmer, or any associate of either of them, is a
party adverse to the Corporation or any of its subsidiaries, and neither of them
nor any associate of either of them has a material interest adverse to the
Corporation or any of its subsidiaries.
Positions or Offices with the Corporation
- -----------------------------------------
Richard Lashley ..... None
John Palmer ..... None
Transactions In Stock of the Corporation
- ----------------------------------------
The following transactions are the only transactions during the past
two years with regard to the Common Stock made by Mr. Lashley, Mr. Palmer or
other entities
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CUSIP No. 81424D109 Page 19 of 32 Pages
constituting a "group" as defined for purposes of Schedule 13D. All transactions
are purchases unless otherwise identified.
Transactions by Mr. Palmer:
- ----------------------------------------------------------
Date Number of Shares
- ----------------------------------------------------------
5/15/00 100
- ----------------------------------------------------------
Transactions by the Fund:
- ----------------------------------------------------------
Date Number of Shares
- ----------------------------------------------------------
2/11/00 5,000
- ----------------------------------------------------------
2/14/00 20,000
- ----------------------------------------------------------
2/16/00 5,000
- ----------------------------------------------------------
2/17/00 2,900
- ----------------------------------------------------------
2/18/00 10,000
- ----------------------------------------------------------
2/25/00 50,000
- ----------------------------------------------------------
3/2/00 7,000
- ----------------------------------------------------------
3/6/00 13,000
- ----------------------------------------------------------
3/7/00 37,000
- ----------------------------------------------------------
3/8/00 2,000
- ----------------------------------------------------------
3/10/00 5,000
- ----------------------------------------------------------
4/25/00 10,000
- ----------------------------------------------------------
Transactions by Financial Edge Strategic:
- ----------------------------------------------------------
Date Number of Shares
- ----------------------------------------------------------
3/2/00 10,000
- ----------------------------------------------------------
Transactions by Beth Lashley:
- ----------------------------------------------------------
Date Number of Shares
- ----------------------------------------------------------
5/15/00 1,000
- ----------------------------------------------------------
The funds expended to date in the foregoing transactions were provided
in part by margin account loans from subsidiaries of The Bear Stearns Companies,
Inc. ("Bear Stearns") or from subsidiaries of Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), extended in the ordinary course of business. All
purchases of Common Stock made using funds borrowed from Bear Stearns or DLJ
were made in margin transactions on Bear Stearns' and DLJ's usual terms and
conditions. All or part of the shares of such Common Stock may from time to time
be pledged with one or more banking institutions or brokerage firms as
collateral for loans made by such entities. Such loans generally bear interest
at a rate based upon the broker's call rate from time to time in effect. Such
indebtedness, if any, may be refinanced with other banks or broker-dealers.
Arrangements or Understandings with Other Persons
- -------------------------------------------------
The Fund has agreed to reimburse Mr. Lashley and Mr. Palmer for any
expenses that either one of them incurs in connection with the Fund's intended
solicitation of proxies for use at the 2000 Annual Meeting of Stockholders of
the Corporation, but has no
<PAGE>
CUSIP No. 81424D109 Page 20 of 32 Pages
other arrangements or understandings with either such proposed nominee. Neither
Mr. Lashley nor Mr. Palmer has any arrangement or understanding with any other
person pursuant to which he was or is to be selected as a director or nominee
for election as a director of the Corporation.
Absence of any Family Relationships
- -----------------------------------
Neither Mr. Lashley nor Mr. Palmer has any family relationship with
any director or officer of the Corporation. There is no family relationship
between Mr. Lashley and Mr. Palmer.
Absence of Involvement in Certain Legal Proceedings
- ---------------------------------------------------
To the best knowledge of Mr. Palmer, and based on information provided
by each nominee:
a. Since January 1, 1995, no petition under the Federal bankruptcy
laws or any state insolvency law has been filed by or against Mr. Lashley
or Mr. Palmer, and no receiver, fiscal agent or similar officer has been
appointed by a court for business or property of Mr. Lashley or Mr. Palmer.
In addition, since January 1, 1995 no petition under the Federal bankruptcy
laws or any state insolvency law has been filed by or against, and no
receiver, fiscal agent or similar officer has been appointed by a court for
business or property of, any partnership in which either of them is or was
a general partner, or any corporation or business association of which
either of them is or was an executive officer.
b. Neither Mr. Lashley nor Mr. Palmer has been convicted in a criminal
proceeding nor has either of them been named as the subject of any pending
criminal proceeding (excluding traffic violations or similar misdemeanors).
c. Since January 1, 1995, neither Mr. Lashley nor Mr. Palmer has been
the subject of any court order, judgment or decree, not suspended, reversed
or vacated, permanently or temporarily enjoining (or otherwise limiting)
either of them from (A) acting as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool operator,
floor broker, leverage transaction merchant, any other person regulated by
the Commodity Futures Trading Commission ("CFTC") or any associated person
of any of the foregoing, or as an investment advisor, underwriter, broker
or dealer in securities, or an affiliated person, director or employee of
any investment company, bank, savings and loan association or insurance
company, or from engaging in or continuing any conduct or practice in
connection with any such activity, (B) engaging in any type of business
practice, or (C) engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws.
d. Since January 1, 1995, neither Mr. Lashley nor Mr. Palmer has been
the subject of any order, judgment or decree not subsequently reversed,
suspended or
<PAGE>
CUSIP No. 81424D109 Page 21 of 32 Pages
vacated, of a federal or state authority barring, suspending or otherwise
limiting for more than 60 days their right to be engaged in any activity
described in clause c. above, or to be associated with persons engaged in
any such activity.
e. Since January 1, 1995, neither Mr. Lashley nor Mr. Palmer has been
found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission ("SEC") to have violated any federal or
state securities law, or by a court of competent jurisdiction in a civil
action or by the CFTC to have violated any federal commodities law, wherein
the judgment in such civil action or finding by the SEC or the CFTC has not
been subsequently reversed, suspended or vacated.
Absence of Certain Transactions
- -------------------------------
To the best knowledge of Mr. Palmer, and based on information provided
by each nominee:
a. Since January 1, 1999, neither Mr. Lashley nor Mr. Palmer nor any
member of the immediate family of either has had any material interest in
any transaction or any series of similar transactions to which the
Corporation or any of its subsidiaries was a party, and neither Mr. Lashley
nor Mr. Palmer nor any member of the immediate family of either has any
material interest in any currently proposed transaction, or series of
similar transactions to which the Corporation or any of its subsidiaries is
a party.
b. Since January 1, 1999, neither Mr. Lashley nor Mr. Palmer has had
any relationship of the nature described in Item 404(b) of Regulation S-K,
promulgated by the SEC under the Securities Exchange Act of 1934, as
amended. Specifically, since January 1, 1997, neither Mr. Lashley nor Mr.
Palmer has been an officer, director, partner or employee of, or has either
one of them owned (directly or indirectly) more than 10% of the equity
interest in, any of the following types of organizations:
i. Any organization that has made or proposes to make payments to
the Corporation or any of its subsidiaries for property or services;
ii. Any organization to which the Corporation or any of its
subsidiaries was indebted;
iii. Any organization to which the Corporation or any of its
subsidiaries has made or proposes to make payments for property or
services; or
iv. Any organization that provided legal services or investment
banking services to the Corporation or any of its subsidiaries.
c. Since January 1, 1999, neither Mr. Lashley nor Mr. Palmer, nor any
member of their respective immediate families or any firm, corporation or
organization of which either of them is an executive officer or director or
the beneficial owner of 10% or more of any class of equity securities, nor
any trust or other estate in which
<PAGE>
CUSIP No. 81424D109 Page 22 of 32 Pages
either of them has a substantial beneficial interest or as to which either
of them serves as a trustee or in a similar capacity, was indebted to the
Corporation or any of its subsidiaries in excess of $60,000 at any time.
Section 16 Compliance
- ---------------------
Neither Mr. Lashley nor Mr. Palmer is required to file reports under
Section 16 of the Securities Exchange Act of 1934, as amended, with respect to
the Common Stock of the Corporation.
(ii) As to Mr. Palmer:
A. Name and Record Address
Mr. John Palmer
PL Capital, LLC
2015 Spring Road, Suite 290
Oak Brook, IL 60523
No other stockholder other than joint filers of the 13D is known to
Mr. Palmer to be supporting Mr. Palmer or Mr. Lashley as a nominee.
B. Beneficial Ownership
Mr. Palmer is the beneficial owner of 177,000 shares of Common Stock,
par value $0.01 per share, of the Corporation.
<PAGE>
CUSIP No. 81424D109 Page 23 of 32 Pages
Very truly yours,
/s/ John Palmer
John Palmer
<PAGE>
CUSIP No. 81424D109 Page 24 of 32 Pages
CONSENT OF PROPOSED NOMINEE
I, Richard Lashley, hereby consent to be named in the proxy statement of
John Palmer to be used in connection with his solicitation of proxies from the
shareholders of Security Financial Bancorp, Inc. for use in voting at the 2000
Annual Meeting of Stockholders of Security Financial Bancorp, Inc., and I hereby
consent and agree to serve a director of Security Financial Bancorp, Inc. if
elected at such Annual Meeting.
/s/ Richard Lashley
Richard Lashley
Dated: May 19, 2000
<PAGE>
CUSIP No. 81424D109 Page 25 of 32 Pages
CONSENT OF PROPOSED NOMINEE
I, John Palmer, hereby consent to be named in the proxy statement of John
Palmer to be used in connection with his solicitation of proxies from the
shareholders of Security Financial Bancorp, Inc. for use in voting at the 2000
Annual Meeting of Stockholders of Security Financial Bancorp, Inc., and I hereby
consent and agree to serve a director of Security Financial Bancorp, Inc. if
elected at such Annual Meeting.
/s/ John Palmer
John Palmer
Dated: May 19, 2000
CUSIP No. 81424D109 Page 26 of 32 Pages
EXHIBIT 3
John Wm. Palmer
PL Capital, LLC
2015 Spring Road
Suite 290
Oak Brook, IL 60523
----------------------
May 19, 2000
Mr. John P. Hyland
President and CEO
Security Financial Bancorp, Inc.
9321 Wicker Avenue
St. John, IN 46373
Re: Demand For Stock Ledger, Stockholder List and Books and Records
Dear Mr. Hyland:
Pursuant to the applicable provisions of Delaware law, the undersigned
hereby demands an opportunity to inspect during normal business hours the stock
ledger, current list of the stockholders (in alphabetical order, setting forth
the name and address of each stockholder and the number of shares registered in
the name of each such stockholder, as of the most recent date available), and
books and records of Security Financial Bancorp, Inc. ("Security Financial"),
and an opportunity to make copies of or extracts from such documents. I hereby
certify to Security Financial that I am the owner of 100 shares of common stock
of Security Financial, as evidenced by the attached affidavit and trade
confirmation.
In connection with the foregoing demand, I further demand the
opportunity to inspect and copy the following, updated as of the date of this
letter, all of which should be in the possession of Security Financial or one of
its agents:
1. All daily stock transfer sheets showing changes in the stockholder list
referred to in the preceding paragraph which are in or come into the
possession of Security Financial or the transfer agent(s) for the common
stock of Security Financial beginning the day following the date of such
list.
2. All information in Security Financial's possession and/or subject to its
direction or control and/or which can be obtained from nominees of any
central depository system relating to the breakdown of all brokerage and
financial institutions holding shares for their customers in street name
and a breakdown of holdings which appear on the
<PAGE>
CUSIP No. 81424D109 Page 27 of 32 Pages
corporate stock ledger under the names of any central depository system
(e.g., Cede & Co.).
3. A list of the names, addresses and securities positions of non-objecting
beneficial owners and acquiescing beneficial owners obtained by Security
Financial from brokers and dealers pursuant to the applicable rules
promulgated under the Securities Exchange Act of 1934, as amended. If such
list is not available as of a recent date, such list should be requested.
4. A list of the names and addresses of employee participants in any stock
ownership plan of Security Financial as of the date of the stockholder
list.
5. The Pershing/DLJ omnibus proxy list.
6. The Philadep omnibus proxy list.
7. Any other omnibus proxies produced by ADP for client banks or brokers,
listing among other things any respondent positions.
8. Any omnibus proxy produced by Bank of New York, or any other bank or
broker, listing among other things any respondent positions.
9. Any record date information provided by ADP relative to shares held for
their clients, and the number of holders at each of their client firms
holding shares of Security Financial.
10. All minutes or other records of any meeting or any action or discussion at
any meeting of the Board of Directors or a committee of the Board of
Directors relating in any way to the election of directors at the 2000
Annual Meeting of Stockholders (including, without limitation, any
recommendations or communications to or from stockholders regarding
director nominations or election of directors).
11. Financial records of Security Financial and all its subsidiaries, including
the most recent month end general ledger and consolidating financial
statement schedules.
12. All documents constituting, referring to or relating to any amendments to
the Bylaws or Articles of Incorporation of Security Financial proposed or
approved within the past two years.
I further demand that modifications of, additions to or deletions
from, any and all information referenced above subsequent to the date of the
stockholder list referred to above be furnished to me as and when the same
becomes available to Security Financial or its agents or representatives. In the
event any or all of the information encompassed by this demand is available in
the form of computer tape or other medium suitable for use by computer or word
processor, I demand inspection and copying of such computer tape or other medium
as well as
<PAGE>
CUSIP No. 81424D109 Page 28 of 32 Pages
any program, software, manual or other instructions necessary for the practical
use of such information.
Foley & Lardner, which is acting as my counsel, or my designated
agent, is authorized to make the above-referenced inspection and receive copies
on my behalf pursuant to the Power of Attorney attached hereto.
I will bear the reasonable costs incurred by Security Financial
(including those of its transfer agent(s)) in connection with the production of
the information with regard to which demand is made herein.
The purposes for requesting such inspection and copying are to
communicate with stockholders regarding the opportunities for Security Financial
to maximize stockholder value and to facilitate a possible solicitation of
proxies in connection with the 2000 Annual Meeting of Stockholders.
Under applicable Delaware law, Security Financial is required to
respond to this request within five (5) business days after receiving this
letter. Please advise my counsel, Phillip M. Goldberg of Foley & Lardner, One
IBM Plaza, 330 N. Wabash Avenue, Chicago, Illinois 60611-3608 (telephone number:
312-755-1900) as to when the items sought will be made available, and in what
form.
<PAGE>
CUSIP No. 81424D109 Page 29 of 32 Pages
Very truly yours,
/s/ John Palmer
John Palmer
<PAGE>
CUSIP No. 81424D109 Page 30 of 32 Pages
STATE OF ILLINOIS )
COUNTY OF ) ss:
)
John Palmer, having been first duly sworn according to law, did
depose, swear and say that he is authorized to execute the foregoing Demand for
Stock Ledger, Stockholder List and Books and Records and to make the demands,
designations, authorizations and representations contained therein, and that the
matters contained in the foregoing Demand for Stock Ledger, Stockholder List and
Books and Records are true and correct.
/s/ John Palmer
John Palmer
Sworn to and subscribed before me by John Palmer this 19th day of May, 2000.
/s/ Patricia Crabtree
Notary Public
My Commission Expires: 7/26/01
<PAGE>
CUSIP No. 81424D109 Page 31 of 32 Pages
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS )
COUNTY OF COOK ) ss:
)
I, John Palmer, do hereby make, constitute and appoint the law firm of
Foley & Lardner, or any of its designated agents, to act on my behalf, to
inspect and receive copies of the stockholder records of Security Financial
Bancorp, Inc. requested in the accompanying demand.
By: /s/ John Palmer
John Palmer
Sworn to and subscribed before me
this 19th day of May, 2000.
/s/ Patricia Crabtree
Notary Public
My Commission Expires: 7/26/01
<PAGE>
CUSIP No. 81424D109 Page 32 of 32 Pages
AFFIDAVIT REGARDING STOCK OWNERSHIP
STATE OF ILLINOIS )
COUNTY OF COOK ) ss:
)
John Palmer, having been first duly sworn according to law, did
depose, swear and say that he is the beneficial owner of 100 shares of the
common stock, $.01 par value per share, of Security Financial Bancorp, Inc., as
shown on the attached trade confirmation.
/s/ John Palmer
John Palmer
Sworn to and subscribed before me by John Palmer this 19th day of May, 2000.
/s/ Patricia Crabtree
Notary Public
My Commission Expires: 7/26/01
