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 |_| Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
Pulse Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
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|_| 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[Pulse Bancorp, Inc. Letterhead]
December 12, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Pulse Bancorp,
Inc. (the "Company"), I cordially invite you to attend the 1998 Annual Meeting
of Stockholders to be held at the Forsgate Country Club, Forsgate Drive,
Jamesburg, New Jersey, on January 22, 1998, at 10:00 a.m. The attached notice of
annual meeting of stockholders and proxy statement describe the formal business
to be transacted at the meeting. During the meeting, I will also report on the
operations of the Company. Directors and officers of the Company will be present
to respond to any questions stockholders may have.
Whether or not you plan to attend the meeting, please sign and date the
enclosed proxy card and return it in the accompanying postage-paid return
envelope as promptly as possible. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/George T. Hornyak, Jr.
George T. Hornyak, Jr.
President and Chief
Executive Officer
<PAGE>
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PULSE BANCORP, INC.
6 JACKSON STREET
SOUTH RIVER, NEW JERSEY 08882
(732) 257-2400
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 22, 1998
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The Annual Meeting of Stockholders (the "Meeting") of Pulse Bancorp,
Inc. (the "Company"), will be held at the Forsgate Country Club, Forsgate Drive,
Jamesburg, New Jersey, on Thursday, January 22, 1998, at 10:00 a.m.
A proxy card and a proxy statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the
following matters:
1. The election of two directors of the Company;
2. The ratification of the appointment of KPMG Peat Marwick LLP
as independent auditors for the Company for the 1998 fiscal
year; and
3. Such other matters as may properly come before the Meeting or
any adjournments thereof.
The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on December 3, 1997, are the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of proxy which
is solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Nancy M. Janosko
NANCY M. JANOSKO
SECRETARY
South River, New Jersey
December 12, 1997
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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<PAGE>
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PULSE BANCORP, INC.
6 JACKSON STREET
SOUTH RIVER, NEW JERSEY 08882
(732) 257-2400
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
January 22, 1998
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GENERAL
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This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Pulse Bancorp, Inc. (the "Board of
Directors" or "Board") to be used at the meeting which will be held at the
Forsgate Country Club, Forsgate Drive, Jamesburg, New Jersey, on January 22,
1998, at 10:00 a.m. (the "Meeting"). The accompanying notice of meeting and this
proxy statement are being first mailed to stockholders on or about December 12,
1997. Certain information provided herein relates to Pulse Savings Bank (the
"Savings Bank"), a wholly owned subsidiary of Pulse Bancorp, Inc. (the
"Company").
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REVOCABILITY OF PROXIES
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Stockholders who execute a proxy retain the right to revoke it at any
time prior to its use. Unless so revoked, the shares represented by such proxies
will be voted at the Meeting and all adjournments thereof. Proxies may be
revoked by written notice to the Secretary of the Company, Nancy M. Janosko, at
the address of the Company shown above or by the filing of a later dated proxy
prior to a vote being taken at the Meeting. A proxy will not be voted if a
stockholder attends the Meeting and votes in person. 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, proxies will be
voted FOR the nominees for directors set forth below and FOR the ratification of
the appointment of the independent auditors set forth in this proxy statement
for consideration at the Meeting.
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VOTING SECURITIES AND CERTAIN
BENEFICIAL OWNERS THEREOF
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Stockholders of record as of the close of business on December 3, 1997
(the "Record Date"), are entitled to one vote for each share then held. The
Company had 3,087,898 shares of Common Stock outstanding and entitled to vote as
of the Record Date.
As to the election of directors (Proposal I), 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, or to withhold authority to vote
for one or more of the nominees being proposed. Directors shall be elected by a
plurality of votes cast, without regard to either (i) broker non-votes, or (ii)
proxies as to which authority to vote for one or more of the nominees being
proposed is withheld.
As to the ratification of auditors (Proposal II), by checking the
appropriate box, stockholders may vote (i) "FOR" (ii) "AGAINST" or (iii)
"ABSTAIN." Unless otherwise required by law, the ratification of independent
auditors shall be determined by a majority of the votes cast affirmatively and
negatively, without regard to either (a) broker non-votes or (b) proxies marked
"ABSTAIN" as to that matter.
<PAGE>
As to other matters that may properly come before the Meeting, unless
otherwise provided in the certificate of incorporation or bylaws of the Company
or by statute, a majority of those votes cast by shareholders shall be
sufficient to pass on a matter.
Persons and groups owning in excess of 5% of the Company's Common Stock
are required to file certain reports disclosing such ownership pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act"). Based upon such
reports and information provided by the Company's transfer agent, the Company
does not know of any person or entity who was a beneficial owner of more than 5%
of the Company's outstanding shares of Common Stock on the Record Date, other
than those listed below. Security ownership of executive officers named in the
Summary Compensation Table and of directors, including Mr. Hornyak, is included
under "Proposal I -- Election of Directors."
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- ---------------- -------------------- -----
National City Bank 183,000(1) 5.92%
National City Center
1900 East Ninth Street
Cleveland, Ohio 44114-34384
George T. Hornyak, Jr. 204,048(2) 6.42%
6 Jackson Street,
South River, New Jersey 08882.
- ----------------
(1) Based on Schedule 13G filed by National City Bank with the Securities
and Exchange Commission on February 14, 1997.
(2) Includes 10,000 shares held in a pension trust in which Mr. Hornyak may
be deemed to have sole voting and investment power. Includes 88,448
shares subject to immediately exercisable stock options.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
The Common Stock of the Company is registered pursuant to Section 12(g)
of the Exchange Act. The executive officers and directors of the Company and
beneficial owners of greater than 10% of the Company's Common Stock ("10%
beneficial owners") are required to file reports on Forms 3, 4 and 5 with the
Securities and Exchange Commission ("SEC") disclosing changes in beneficial
ownership of the Common Stock. Based on the Company's review of Forms 3, 4 and 5
filed by officers, directors and 10% beneficial owners of Common Stock, no
executive officer, director or 10% beneficial owner of Common Stock failed to
file such ownership reports on a timely basis during the fiscal year ended
September 30, 1997.
2
<PAGE>
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is presently composed of six members
who are elected for terms of three years, approximately one-third of whom are to
be elected annually in accordance with the Bylaws of the Company. The Bylaws of
the Company require that approximately one-third of the directors stand for
election each year.
It is intended that the persons named in the proxies solicited by the
Board will vote for the election of the named nominees. If any nominee is unable
to serve, the shares represented by all valid proxies will be voted for the
election of such substitute as the Board of Directors may recommend. At this
time, the Board knows of no reason why any nominee might be unavailable to
serve.
The following table sets forth each nominee and continuing director's
name, age, the year he first became a director, the year in which his current
term will expire and the number of shares and percentage of the Company's Common
Stock beneficially owned on the Record Date. The following table also sets
forth, for all executive officers and directors as a group and for each
executive officer listed in the Summary Compensation Table under the caption
"Executive Compensation," the number of shares and the percentage of the
Company's Common Stock beneficially owned on the Record Date.
<TABLE>
<CAPTION>
Shares of
Year First Current Common Stock Percent
Elected Term to Beneficially of
Name Age (1) Director Expire Owned Class
- ------------------------ ------- ---------- -------- ----- ------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
<S> <C> <C> <C> <C> <C>
Joseph Chadwick...................... 54 1989 1998 99,063(4)(9) 3.19%
Edwin A. Kolodziej................... 72 1984 1998 79,948(8) 2.58%
DIRECTORS CONTINUING IN OFFICE
Wayne A. Kronowski................... 43 1990 1999 22,948(9) 0.74%
Edwin A. Roginski.................... 69 1981 1999 49,468(3)(8) 1.59%
Benjamin S. Konopacki................ 75 1954 2000 145,448(2)(3)(5) 4.65%
George T. Hornyak, Jr................ 47 1987 2000 204,048(3)(7) 6.42%
CERTAIN EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Thomas Konopacki........................................................................ 59,700(10) 1.91%
Ronald E. Vaughn, Jr.................................................................... 16,018(11) 0.52%
All executive officers and
directors as a group
(8 persons)............................................................................ 656,641(6) 19.68%
</TABLE>
- ------------------
(1) At September 30, 1997.
(2) Includes 39,448 shares subject to immediately exercisable stock options.
(3) Includes 10,000 shares held in a pension trust in which the listed
individuals may be deemed to have sole voting and investment power.
(4) Includes 4,000 shares held in a corporation in which the listed individual
may be deemed to have sole voting and investment power.
(Footnotes continued on next page.)
3
<PAGE>
(Footnotes from previous page.)
(5) Excludes 24,700 shares of Common Stock and options to purchase 35,000
shares under the Company's 1986 and 1993 Stock Option Plans held by Thomas
Konopacki, his son and an officer of the Company, for which he disclaims
beneficial ownership.
(6) Includes 246,938 shares of Common Stock which may be received upon the
exercise of stock options which are exercisable within 60 days of the
voting record date.
(7) Includes 88,448 shares subject to immediately exercisable stock options.
(8) Includes 14,448 shares subject to immediately exercisable stock options.
(9) Includes 20,448 shares subject to immediately exercisable stock options.
(10) Includes 35,000 shares subject to immediately exercisable stock options.
(11) Includes 14,250 shares subject to immediately exercisable stock options.
The principal occupation during the past five years of each nominee and
director of the Company is set forth below.
Benjamin S. Konopacki has been employed by the Company in various
capacities since 1954. In 1989, Mr. Konopacki became Chairman of the Board. From
1965 to 1989, he served as President. From 1965 to 1991, he served as Chief
Executive Officer. He retired as Chief Executive Officer on January 1, 1991.
George T. Hornyak, Jr. has been employed by the Company since 1983. In
1989, Mr. Hornyak became President and Chief Operating Officer of the Company.
In 1991, he became Chief Executive Officer of the Company. He is also a director
of Mercer Mutual Insurance Company.
Edwin A. Kolodziej is a sole practitioner in his own law practice in
Sayreville, New Jersey.
Wayne A. Kronowski is the Treasurer and Chief Financial Officer of the
Borough of Sayreville, New Jersey. Mr. Kronowski is also a certified public
accountant and a registered municipal accountant.
Edwin A. Roginski was a Vice President and Chief Compliance Officer of
Chase Manhattan Investment Services, Inc. until 1992. He is presently retired.
Joseph Chadwick is President of Thomas and Chadwick/Riverside Supply
Company, a retailer of building supplies and fuel oil. Mr. Chadwick has held
this position since 1971.
Meetings and Committees of the Board of Directors
- -------------------------------------------------
The Company's Board of Directors conducts its business through meetings
of the Board. During the fiscal year ended September 30, 1997, the Board of
Directors held 12 meetings. No director of the Company attended fewer than 75%
of the total meetings of the Board of Directors and committee meetings on which
such Board member served during this period. The Board of Directors has created
various committees. Several of these committees are discussed below in more
detail.
The Company's Board of Directors has appointed a Compensation
Committee. The Compensation Committee reviews, at least annually, the salaries
and other fringe benefits of the Company's officers and employees. This
committee is comprised of directors Konopacki, Kolodziej and Chadwick. During
the 1997 fiscal year, the Compensation Committee met two times.
4
<PAGE>
The Company's Board of Directors has appointed an Audit Committee. The
Audit Committee reviews and evaluates the Company's internal controls and
accounting procedures and reviews the Company's audit reports with the Company's
independent auditors. Such committee is comprised of directors Kronowski and
Roginski. During the 1997 fiscal year, the Audit Committee met four times.
The Company's Board of Directors has appointed an Investment Committee.
The purpose of the Investment Committee is to evaluate strategic alternatives
for the Company, which include merger and acquisition activities. This committee
is comprised of directors Hornyak, Konopacki, and Kolodziej. During the 1997
fiscal year, the Investment Committee did not meet.
The Company's Board of Directors has appointed a Mortgage Committee.
The purpose of the Mortgage Committee is to evaluate strategies and alternatives
regarding the origination of mortgage loans. This committee is comprised of
directors Kolodziej, Roginski, and Kronowski. During the 1997 fiscal year, the
Mortgage Committee did not meet.
The Company's full Board of Directors also acts as a Nominating
Committee for the annual selection of its nominees for election as directors.
While the Nominating Committee will consider nominees recommended by the
stockholders, it has neither actively solicited recommendations from
stockholders nor established any procedures for this purpose. The Board met one
time in its capacity as the Nominating Committee during fiscal 1997.
The Nominating Committee will consider nominees recommended by security
holders. In order for nominations by shareholders to be voted upon at an annual
meeting, the nomination(s) must be in writing and delivered to the secretary of
the Company at least 30 days prior to the date of the annual meeting. Upon
delivery, such nomination(s) shall be posted in a conspicuous place in each
office of the Company. Ballots bearing the name(s) of all person(s) nominated by
the Nominating Committee and by shareholders shall be provided for use at the
annual meeting. If the Nominating Committee fails or refuses to act at least 20
days prior to the annual meeting, nominations for directors may be made at the
annual meeting by any shareholder entitled to vote at the annual meeting.
Directors' Compensation
- -----------------------
All non-management directors of the Savings Bank receive an annual
retainer of $12,000 plus $325 for each meeting attended and an additional $50
for each committee chairman. The Company paid $5,500 of additional fees to its
directors. The Chairman of the Board of Directors receives a board fee of
$27,500 and an annual salary of $55,000. The Company paid a total of $180,000 in
directors' and committee fees for the fiscal year ended September 30, 1997.
5
<PAGE>
Executive Compensation
- ----------------------
The following table sets forth, for the fiscal years ended September
30, 1997, 1996 and 1995, certain information as to the total remuneration
received by the chief executive officer as well as by each of the two other most
highly compensated executive officers of the Company whose total annual salary
and bonus exceeded $100,000 during these periods for services rendered in all
capacities to the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------------------------------------ --------------------------------
Awards
--------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)
Securities
Underlying All Other
Other Annual Restricted Stock Options/ Compensation
Name and Principal Position Year Salary($) Bonus($) Compensation($)(1) Award(s)($) SARs(#) ($)(2)
- --------------------------- ---- --------- -------- ------------------ ---------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
George T. Hornyak, Jr. 1997 $293,028 $45,361 $25,010 -0- 27,000 $19,776
President and Chief 1996 272,110 35,000 23,098 -0- 448 20,062
Executive Officer 1995 263,021 37,342 22,147 -0- 6,000 20,096
Thomas Konopacki 1997 145,000 19,440 -0- -0- 15,000 19,191
Executive Vice President and 1996 130,000 15,000 -0- -0- -0- 19,434
Chief Financial Officer 1995 128,250 16,004 -0- -0- -0- 15,857
Ronald E. Vaughn, Jr. 1997 126,000 6,480 -0- -0- 5,000 16,522
Senior Vice President and 1996 123,000 5,000 0- -0- -0- 16,660
Chief Lending Officer 1995 123,000 5,335 -0- -0- -0- 15,857
</TABLE>
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(1) Includes (a) perquisites; (b) insurance policies; and (c) director's fees.
(2) Includes amounts provided to Messrs. Hornyak, Vaughn and Konopacki through
the Retirement Plan of the Company.
Employment Agreements. In October 1988, the Company entered into
Employment Agreements with Benjamin S. Konopacki, Thomas Konopacki and George T.
Hornyak, Jr. These agreements were amended in December 1990. The Employment
Agreements for Benjamin S. Konopacki and George T. Hornyak, Jr. provide for a
five-year term and are annually reviewed by the Board of Directors to determine
whether to extend the term of employment for an additional one year period.
Thomas Konopacki's agreement is for a three-year term. The Employment Agreements
provided for a base annual salary, subject to annual adjustment. The base annual
salaries for Messrs. Hornyak, T. Konopacki and B. Konopacki are $293,028,
$145,000 and $55,000, respectively. The Employment Agreements may be terminated
upon the death of the employee, by the employee's voluntary termination, or by
the Company for "cause" as defined in the Employment Agreements to include
personal dishonesty, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rules or regulations or material breach of any provision of the
Employment Agreements. In the event of the termination of employment in
connection with a change of control of the Company, the officers are to be paid
a sum equal to three times their annual average compensation for the five most
recent years. "Control" generally refers to the acquisition of the ownership or
power to vote more than 25% of the Company's stock or to control the election of
a majority of the directors.
6
<PAGE>
In the event a termination as a result of a change of control occurred as of
September 30, 1997, George T. Hornyak, Jr., Thomas Konopacki and Benjamin S.
Konopacki, would receive in the aggregate approximately $782,000, $389,000 and
$165,000, respectively, under the terms of their Employment Agreements.
Other Benefits
- --------------
Retirement Plan. Effective October 1, 1988, the Company made available
to full-time employees who have completed a minimum of 12 months service, and
meet the minimum age of 21, a defined contribution retirement plan. Under the
plan, the Company makes an annual contribution for the benefit of eligible
employees. Total pension expenses for the fiscal years ended September 30, 1997,
1996 and 1995 were $176,000, $160,000 and $144,400, respectively. Employees'
benefits under the plan vest at the rate of 20% after two years of service,
increasing by 20% annually thereafter, until benefits are 100% vested after six
or more years of service.
Stock Option Plans. In connection with the conversion of the Savings
Bank from mutual to stock form, the Board of Directors adopted the Pulawski
Savings and Loan Association 1986 Stock Option and Incentive Plan (the "1986
Plan"). Pursuant to the 1986 Plan, an aggregate of 376,152 shares (94,038 shares
originally were reserved, but were adjusted, in accordance with the terms of the
1986 Plan, in connection with a 100% stock dividend issued in December 1987 and
a 100% stock dividend issued in December 1993) have been reserved for future
issuance by the Company upon exercise of stock options to be granted to
officers, directors and other key employees under the 1986 Plan. Of the 376,152
shares reserved, all have been distributed and 39,152 options remain unexercised
as of the Record Date.
In 1993, stockholders ratified the 1993 Stock Option and Incentive Plan
(the "1993 Plan"), that had been adopted by the Board of Directors in 1992.
Pursuant to the 1993 Plan, an aggregate of 367,842 shares have been reserved
(183,921 shares were originally reserved, but were adjusted in connection with
the 100% stock dividend issued in December 1993) for issuance by the Company
upon exercise of stock options ("Options") to be granted to key officers,
employees or directors from time to time under the 1993 Plan. Of the 367,842
shares reserved, 37,706 shares remain available for future distribution and
316,392 shares remain unexercised as of the Record Date.
Options granted under the 1986 Plan and 1993 Plan may be incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") or non-incentive stock options. Under the 1986
Plan, all options are granted at 100% of the market value of the Company's
Common Stock on the date of grant. The 1986 Plan also contains provisions for
Stock Appreciation Rights (the "SARs"), permitting an optionee to surrender his
option for cancellation and receive cash or Common Stock equal to the difference
between the exercise price of the option and the then-fair market value of the
shares of Common Stock subject to the option. No SARs have ever been granted
under the 1986 Plan.
7
<PAGE>
The following tables set forth additional information concerning
options granted under the 1986 Plan and 1993 Plan to the named executive
officers.
OPTION/SAR GRANTS TABLE
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term(1)
- ---------------------------------------------------------------------------------------------------- -----------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ------------ ----------- ----------- ------ ------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
George T. Hornyak, Jr. 25,000 30.5% $16.00 11/26/06 $251,558 $637,497
Thomas Konopacki 15,000 18.3 16.00 11/26/06 150,935 382,498
Ronald E. Vaughn, Jr. 5,000 6.1 16.00 11/26/06 50,312 127,499
</TABLE>
- ------------------
(1) Based on actual option term and annual compounding.
OPTION/SAR EXERCISES AND YEAR END VALUE TABLE
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
--------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs In-The-Money Options\SARs
at FY-End (#) at FY-End (2)($)
Shares Acquired
Name on Exercise (#) Value Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- -------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
George T. Hornyak, Jr. -- $ -- 86,448/-- $947,470/--
Thomas Konopacki 5,000 51,875 35,000/-- 383,600/--
Ronald E. Vaughn, Jr. -- -- 14,500/-- 144,565/--
</TABLE>
- -----------------------------
(1) Market value of the underlying securities at the date of exercise minus the
exercise price, multiplied by the number of underlying securities.
(2) Market value of the underlying securities at year-end minus the exercise
price, multiplied by the number of underlying securities.
8
<PAGE>
Long Term Incentive Plans
- -------------------------
The Company does not sponsor any long term incentive plans and has made
no awards or payments under any such plans during the fiscal year ended
September 30, 1997.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
The Compensation Committee of the Company consists of directors
Konopacki, Kolodziej and Chadwick. Mr. Konopacki was, until March 1989, the
President of the Savings Bank and was, until January 1991, the Chief Executive
Officer of the Company and the Savings Bank. Mr. Konopacki is the father of
Thomas Konopacki, Executive Vice President.
Compensation Committee Report
- -----------------------------
The Compensation Committee of the Savings Bank met two times to discuss
executive compensation during the fiscal year ended September 30, 1997. The
committee reviews the compensation paid to all employees based on
recommendations from the chief executive officer, executive vice president and
the personnel committee. The committee reviews and determines compensation for
the executive officers of the Savings Bank based on a review of compensation and
other benefits provided during the prior three years. The committee reviews
internal and external surveys of compensation paid to executive officers of
other publicly traded savings institutions or savings institution holding
companies located in New Jersey. The committee attempts to focus on the level of
compensation paid by comparable institutions in and around the Savings Bank's
market area, primarily institutions with total assets of between approximately
$250 million and $1 billion. In August 1993, the compensation committee adopted
a cash incentive formula based on return on average assets and return on average
equity ratios. Awards are made only after certain minimum thresholds are
reached. These thresholds are reached when return on average assets is at least
0.75% and/or the return on average equity is at least 8%. Under the cash
incentive fund formula, if return on average assets exceeds the maximum of
1.25%, consolidated net income is multiplied by 2%. In addition, if return on
average equity exceeds the maximum of 15%, consolidated net income is multiplied
by 1%. The product of such calculations is then added to arrive at the maximum
amount of cash incentive fund available for distribution to Mr. Hornyak and the
other employees of the Savings Bank. For the fiscal year ended September 30,
1997, $129,602 was accrued through the cash incentive fund formula, of which
$45,361, or 35% was awarded to Mr. Hornyak. Other employees received the
remainder of the cash incentive fund. The committee also considers other forms
of compensation such as pension plan contributions, stock options provided to
employees in the past, the stock ownership of the employee and the
responsibilities and contributions made by the employee during the course of the
year. Compensation is typically adjusted due to both qualitative and
quantitative factors based on the calendar year, rather than the fiscal year,
although compensation is reported on a fiscal year basis in accordance with
federal securities law.
During the fiscal year ended September 30, 1997, George T. Hornyak,
Jr., President and Chief Executive Officer, received an increase in salary from
$272,110 to $300,000 and awards of stock options and other awards, as disclosed
in the Summary Compensation Table. The committee utilized the sources referenced
in the prior paragraph, including the annual compensation paid to chief
executive officers of other savings institutions and savings institution holding
companies in the State of New Jersey with assets of between approximately $250
million to $1 billion and evaluated the cash compensation paid to Mr. Hornyak
and other executive officers of the Savings Bank and executive officers of those
other institutions. The committee also evaluated the nature of compensation
provided by these other
9
<PAGE>
institutions, including cash incentives, restricted stock grants, employment and
severance agreements, retirement plans, deferred compensation and profit sharing
plans and evaluated those other forms of compensation when setting the
compensation for executive officers of the Savings Bank, including the
compensation paid to Mr. Hornyak.
Compensation Committee:
Benjamin S. Konopacki, Chairman
Edwin A. Kolodziej
Joseph Chadwick
Certain Transactions With the Company
- -------------------------------------
The Savings Bank grants loans to the Company's officers, directors and
employees on the security of their personal residences. Loans to such persons
are made in the ordinary course of business and upon the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions and do not involve more than the normal risk of collectibility or
present any other unfavorable features. Prior to August 1989, such loans
provided for the waiver of loan origination fees equal to 1% of the loan amount.
Since August 1989, loans to executive officers and directors of the Company do
not provide for a waiver of loan origination fees. During the fiscal year ended
September 30, 1997, the Company paid $23,500 in legal fees to Director
Kolodziej's law firm as compensation for various legal services provided to the
Savings Bank.
10
<PAGE>
Set forth below is certain information relating to loans made by the
Savings Bank to executive officers and directors of the Company or Savings Bank
whose total aggregate loan balances or line of credit exceeded $60,000 at any
time during the fiscal year ended September 30, 1997.
<TABLE>
<CAPTION>
Highest
Balance Prevailing
Date Original During 1997 Unpaid Balance as of Market Interest
Name of Officer or Director Loan Type Originated Loan Amount Fiscal Year September 30, 1997 Interest Rate Rate Paid
- --------------------------- --------- ---------- ----------- ----------- ------------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
George T. Hornyak, Jr....... Home mortgage, 11/88 $275,000 $236,864 $232,984 8.25% 8.25%
adjustable rate
Thomas Konopacki............ Home mortgage, 6/93 121,000 94,971 92,903 8.625 8.625
adjustable rate
Joseph Chadwick............. Home mortgage, 06/78 50,000 33,789 32,026 8.00 8.00
fixed rate
</TABLE>
11
<PAGE>
Performance Graph
The following graph compares the cumulative total shareholder return of
the Common Stock of the Company with that of (a) the total return index for
domestic companies listed on the Nasdaq Stock Market and (b) the total return
index for banks listed on the Nasdaq Stock Market. These total return indices of
the Nasdaq Stock Market are computed by the Center for Research in Securities
Prices ("CRSP") at the University of Chicago. All three investment comparisons
assume the investment of $1,000 at the market close on September 30, 1992 and
the reinvestment of dividends when paid. The graph provides comparisons at the
end of the fiscal years of the Company.
There can be no assurance that the Company's stock performance will
continue with the same or similar trends depicted in the graph below. The
Company will not make or endorse any predictions as to future stock performance.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
=========================================================================================================================
9/30/92 9/30/93 9/30/94 9/30/95 09/30/96 9/30/97
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq U.S. $1,000 $1,310 $1,321 $1,824 $2,164 $2,971
- -------------------------------------------------------------------------------------------------------------------------
Nasdaq Bank 1,000 1,350 1,420 1,790 2,285 3,806
- -------------------------------------------------------------------------------------------------------------------------
Pulse Bancorp 1,000 1,399 1,679 2,051 2,158 3,191
=========================================================================================================================
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
KPMG Peat Marwick LLP was the Company's independent auditor for the
1997 fiscal year. The Board of Directors has approved the selection of KPMG Peat
Marwick LLP as its auditor for the 1998 fiscal year, subject to ratification by
the Company's stockholders. A representative of KPMG Peat Marwick LLP is
expected to be present at the Meeting to respond to stockholders' questions and
will have the opportunity to make a statement if he or she so desires.
Ratification of the appointment of the auditors requires the
affirmative vote of a majority of the votes cast by the stockholders of the
Company at the Meeting. The Board of Directors recommends that stockholders vote
"FOR" the ratification of the appointment of KPMG Peat Marwick LLP as the
Company's auditors for the 1998 fiscal year.
- --------------------------------------------------------------------------------
FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
The audited financial statements of the Company for its fiscal year
ended September 30, 1997, prepared in conformity with generally accepted
accounting principles, are included in the Company's 1997 Annual Report to
Stockholders, which accompanies this Proxy Statement. Any stockholder who has
not received a copy of the Company's 1997 Annual Report to Stockholders may
obtain a copy by writing to the Secretary of the Company. Such Annual Report is
not to be treated as a part of the Company's proxy solicitation materials or as
having been incorporated herein by reference.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's main office at 6
Jackson Street, South River, New Jersey 08882, no later than August 12, 1998.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons voting the proxies.
13
<PAGE>
- --------------------------------------------------------------------------------
MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation. The
Company anticipates that its transfer agent will assist in the solicitation of
proxies for no additional compensation, other than reasonable out-of-pocket
expenses.
- --------------------------------------------------------------------------------
FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1997, AS FILED WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, PULSE
BANCORP, INC., 6 JACKSON STREET, SOUTH RIVER, NEW JERSEY 08882.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Nancy M. Janosko
NANCY M. JANOSKO
SECRETARY
South River, New Jersey
December 12, 1997
14
<PAGE>
PULSE BANCORP, INC.
6 JACKSON STREET
SOUTH RIVER, NEW JERSEY 08882
(732) 257-2400
ANNUAL MEETING OF STOCKHOLDERS
January 22, 1998
- --------------------------------------------------------------------------------
The undersigned hereby appoints the Board of Directors of Pulse
Bancorp, Inc. ("Company"), with full powers of substitution, to act as attorneys
and proxies for the undersigned, to vote all shares of Common Stock of the
Company that the undersigned is entitled to vote at the Annual Meeting of
Stockholders, to be held at the Forsgate Country Club, Forsgate Drive,
Jamesburg, New Jersey, on Thursday, January 22, 1998, at 10:00 a.m. ("Meeting"),
and at any and all adjournments thereof, as follows:
VOTE FOR VOTE WITHHELD
-------- -------------
1. The election as a director of all nominees
listed below for terms specified (except |_| |_|
as marked below to the contrary).
Joseph Chadwick (three years)
Edwin A. Kolodziej (three years)
INSTRUCTIONS: To withhold your vote for any individual nominee, insert
that nominee's name on the line provided below.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the appointment |_| |_| |_|
of KPMG Peat Marwick LLP as
auditors of the Company for the
1998 fiscal year.
In their discretion, such attorneys and proxies are authorized to vote on any
other business that may properly come before the Meeting or any adjournments
thereof.
The Board of Directors recommends a vote "FOR" Propositions 1 and 2.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR PROPOSITIONS 1 AND 2. IF ANY OTHER BUSINESS IS PRESENTED
AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or
at any adjournments thereof and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of the notice of annual meeting of stockholders, a proxy
statement dated December 12, 1997, and an annual report.
Dated: Check box if planning to attend Meeting |_|
---------------------
- ------------------------------------------------- ---------------------------
PRINT NAME OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
- ------------------------------------------------- ---------------------------
PRINT NAME OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in which this
proxy was mailed. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. If shares are held jointly, each holder
should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
