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
SOBIESKI BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ 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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
<PAGE>
(1) Amount Previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
SOBIESKI BANCORP, INC.
September 23, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Sobieski Bancorp,
Inc., I cordially invite you to attend the Annual Meeting of Stockholders. The
meeting will be held at 2:00 p.m., local time, on October 19, 1998 at the
Company's main office located at 2930 W. Cleveland Road, South Bend, Indiana.
An important aspect of the meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder to
vote and participate in this process. Stockholders are being asked to elect two
directors and ratify the appointment of PricewaterhouseCoopers LLP as the
Company's auditors. The Board of Directors recommends that you vote FOR the
Board's nominees for election as directors and FOR the ratification of the
appointment of PricewaterhouseCoopers LLP as the Company's auditors.
In addition to the stockholder vote on corporate business items, the
meeting will include management's report to you on Sobieski Bancorp, Inc.'s 1998
financial and operating performance.
I encourage you to attend the meeting in person. Whether or not you
attend the meeting, please read the enclosed Proxy Statement and then complete,
sign and date the enclosed proxy card and return it in the postage prepaid
envelope provided. This will save Sobieski Bancorp, Inc. additional expense in
soliciting proxies and will ensure that your shares are represented. Please note
that you may vote in person at the meeting even if you have previously returned
the proxy.
Thank you for your attention to this important matter.
Sincerely,
/s/Thomas F. Gruber
-------------------
Thomas F. Gruber
President and Chief Executive Officer
<PAGE>
SOBIESKI BANCORP, INC.
2930 W. Cleveland Road
South Bend, Indiana 46628
(219) 271-8300
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 19, 1998
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Sobieski Bancorp, Inc. (the "Company") will be held at the
Company's main office, located at 2930 W. Cleveland Road, South Bend, Indiana at
2:00 p.m., South Bend, Indiana time, on October 19, 1998.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. the election of two directors of the Company;
2. the ratification of the appointment of PricewaterhouseCoopers LLP
as the auditors of the Company for the fiscal year ending June 30,
1999;
and such other matters as may properly come before the Meeting, or any
adjournments or postponements thereof. The Board of Directors is not aware of
any other business to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record at the close of business on
September 11, 1998 are the stockholders entitled to vote at the Meeting and any
adjournments or postponements thereof.
You are requested to complete and sign the enclosed form of proxy,
which is solicited on behalf of 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/Thomas F. Gruber
-------------------
Thomas F. Gruber
President and Chief Executive Officer
South Bend, Indiana
September 23, 1998
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
Sobieski Bancorp, Inc.
2930 W. Cleveland Road
South Bend, Indiana 46628
(219) 271-8300
ANNUAL MEETING OF STOCKHOLDERS
October 19, 1998
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of Sobieski Bancorp, Inc. (the "Company"),
the parent company of Sobieski Federal Savings and Loan Association of South
Bend ("Sobieski Federal" or the "Association"), of proxies to be used at the
Annual Meeting of Stockholders of the Company (the "Meeting") which will be held
at the Company's main office, located at 2930 W. Cleveland Road, South Bend,
Indiana on October 19, 1998, at 2:00 p.m., South Bend, Indiana time, and all
adjournments or postponements of the Meeting. The accompanying Notice of Annual
Meeting, this Proxy Statement and the enclosed form of proxy are first being
mailed to stockholders on or about September 23, 1998.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon (i) the election of two directors and (ii) the ratification of the
appointment of PricewaterhouseCoopers LLP as auditors for the Company for the
fiscal year ending June 30, 1999.
Vote Required and Proxy Information
All shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the director nominees
named herein and for the ratification of the appointment of
PricewaterhouseCoopers LLP as auditors for the Company. The Company does not
know of any matters, other than as described in the Notice of Annual Meeting,
that are to come before the Meeting. If any other matters are properly presented
at the Meeting for action, the persons named in the enclosed form of proxy and
acting thereunder will have the discretion to vote on such matters in accordance
with their best judgment.
Directors shall be elected by a plurality of the votes cast. The
ratification of the appointment of PricewaterhouseCoopers LLP as auditors
requires the affirmative vote of a majority of the votes cast on the matter.
Proxies marked to abstain with respect to a proposal will have the same effect
as votes against the proposal. Votes withheld (for the election of directors)
and broker non-votes will have no effect on the vote. The holders of at least
one-third of the shares of the Common Stock entitled to vote at the Meeting,
present in person or represented by proxy, shall constitute a quorum for
purposes of the Meeting. Abstentions and broker non-votes are counted for
purposes of determining a quorum.
<PAGE>
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting, or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Secretary,
Sobieski Bancorp, Inc., 2930 W. Cleveland Road, South Bend, Indiana 46628.
<PAGE>
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on September 11,
1998 will be entitled to one vote for each share of Common Stock then held. As
of that date, there were 782,100 shares of Common Stock issued and outstanding.
The following table sets forth, as of September 11, 1997, information regarding
share ownership of (i) those persons or entities known by management to
beneficially own more than five percent of the Common Stock and (ii) all
directors and executive officers of the Company and the Association as a group.
For information regarding the beneficial ownership of Common Stock by the
directors of the Company, see "Proposal I. Election of Directors."
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Beneficial Owner Owned of Class
---------------- ----- --------
<S> <C> <C>
Sobieski Bancorp, Inc. Employee Stock Ownership Plan 77,280(1) 9.88%
2930 W. Cleveland Road
South Bend, Indiana 46628
John Hancock Mutual Life Insurance Company and 40,000(2) 5.11
John Hancock Subsidiaries, Inc.
P.O. Box 111
Boston, Massachusetts 02117
and
The Berkeley Financial Group and
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Directors and executive officers of the Company 112,434(3) 13.88
and the Association, as a group (8 persons)
</TABLE>
- ------------------------
(1) The amount reported represents shares held by the Company's Employee Stock
Ownership Plan ("ESOP"), 26,896 of which have been allocated to the
accounts of participants. First Source Bank, South Bend, Indiana, the
trustee of the ESOP, may be deemed to beneficially own the shares held by
the ESOP which have not been allocated to accounts of participants.
Participants in the ESOP are entitled to instruct the trustee as to the
voting of shares allocated to their accounts under the ESOP. Unallocated
shares held in the ESOP's suspense account are voted by the trustee in the
same proportion as allocated shares voted by participants.
(2) As reported by John Hancock Mutual Life Insurance Company ("JHMLIC"),
JHMLIC's wholly-owned subsidiary, John Hancock Subsidiaries, Inc. ("JHSI"),
JHSI's wholly-owned subsidiary, The Berkeley Financial Group ("TBFG"), and
TBFG's wholly-owned subsidiary, John Hancock Advisers, Inc., ("JHA") in a
statement as of December 31, 1997 on a Schedule 13G filed with the
Securities and Exchange Commission (the "SEC"). JHMLIC, JHSI and TBFG
reported indirect beneficial ownership of these shares. JHA reported sole
voting and dispositive powers as to all of such shares.
<PAGE>
(3) Amount includes shares held directly, as well as shares held jointly with
family members, shares held in retirement accounts, shares held in a
fiduciary capacity or by certain family members, with respect to which the
group members may be deemed to have sole or shared voting and/or investment
powers. Amount also includes 27,816 shares subject to options granted under
the Company's 1995 Stock Option and Incentive Plan (the "Stock Option
Plan") currently exercisable or which will become exercisable within 60
days of September 11, 1998 and 14,750 shares awarded as restricted shares
under the Company's Recognition and Retention Plan (the "RRP") that have
vested or will vest within 60 days of September 11, 1998 (and which have or
will become free of all restrictions originally placed thereon).
2
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of six members,
each of whom is also a director of the Association. The Directors are divided
into three classes. Directors of the Company are generally elected to serve for
three-year terms which are staggered to provide for the election of
approximately one-third of the directors each year.
The following table sets forth certain information regarding the
Company's Board of Directors, including their terms of office, and nominees for
election as directors. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
the nominee) will be voted at the Meeting for the election of the nominees
identified in the following table. If any nominee is unable to serve, the shares
represented by all such proxies will be voted for the election of such
substitute as the Board of Directors may recommend. At this time, the Board of
Directors knows of no reason why any nominee might be unable to serve, if
elected. Except as described herein, there are no arrangements or understandings
between any director or nominee and any other person pursuant to which such
director or nominee was selected.
<TABLE>
<CAPTION>
Shares of Common
Age at Term Stock Beneficially Percent
June 30, Director to Owned at of
Name 1998 Position(s) Held Since(1) Expire September 11, 1998(2) Class
---- ---- ---------------- -------- ------ -------------------- -----
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Leonard J. Dobosiewicz 57 Director 1977 2001 11,058 1.41
Joseph A. Gorny 55 Director 1993 2001 24,058 3.06
DIRECTORS CONTINUING IN OFFICE
Thomas F. Gruber 55 President and Chief 1981 1999 21,054 2.71
Executive Officer
Joseph F. Nagy 50 Vice Chairman and Director 1985 1999 11,558 1.47
George J. Aranowski 67 Director 1973 2000 14,058 1.79
Robert J. Urbanski 46 Chairman of the Board 1991 2000 24,058 3.06
</TABLE>
- ---------------------------
(1) Includes service as a director of the Association.
(2) Includes shares held directly, as well as shares held in retirement
accounts, held by certain members of the named individuals' families, or
held by trusts of which the named individual is a trustee or substantial
beneficiary, with respect to which shares the named individuals may be
deemed to have sole or shared voting and/or investment powers. Also
includes 2,898, 2,898, 10,626, 2,898, 2,898 and 2,898 shares which Messrs.
Dobosiewicz, Gorny, Gruber, Nagy, Aranowski and Urbanski, respectively,
currently or will within 60 days of September 11, 1998 have the right to
acquire pursuant to stock options granted under the Stock Option Plan and
1,160, 1,160, 4,252, 1,160, 1,160 and 1,160 shares awarded as restricted
stock under the RRP to Messrs. Dobosiewicz, Gorny, Gruber, Nagy, Aranowski
and Urbanski respectively, which have vested or will vest within 60 days of
September 11, 1998 (and which have or will become free of all restrictions
originally placed thereon).
<PAGE>
The business experience of each director and director nominee is set
forth below. All directors and director nominees have held their present
positions for at least the past five years, except as otherwise indicated.
Leonard J. Dobosiewicz. Mr. Dobosiewicz has been in the maintenance
profession at local schools.
Joseph A. Gorny. Mr. Gorny is in the real estate business and is also
the owner of a liquor store.
Thomas F. Gruber. Mr. Gruber became the President and Chief Executive
Officer of the Company and the Association in September 1996 after the
retirement of Gerald R. Gadacz. Prior to being named President and Chief
Executive Officer, Mr. Gruber was the State Editor of the South Bend Tribune.
Joseph F. Nagy. Mr. Nagy is the Auditor of St. Joseph County, Indiana.
George J. Aranowski. Mr. Aranowski is a public accountant with his own
accounting practice.
3
<PAGE>
Robert J. Urbanski. Mr. Urbanski is President of Trans Tech Electric
Co., an electrical contractor in South Bend.
Board of Directors' Meetings and Committees
Board and Committee Meetings of the Company. Meetings of the Company's
Board of Directors are held on at least a quarterly basis. The Board of
Directors met 12 times during the fiscal year ended June 30, 1998. During fiscal
1998, no incumbent director of the Company attended fewer than 75% of the total
number of Board Meetings and the total number of meetings held by the committees
of the Board of Directors on which he served.
The Board of Directors of the Company has standing Audit and
Compensation Committees.
The Audit Committee recommends independent auditors to the Board and
reviews the results of the auditors' services. The members of the Audit
Committee are Directors Nagy, Aranowski and Urbanski. During fiscal 1998, this
committee met four times.
The Compensation Committee is currently composed of Directors
Aranowski, Nagy and Urbanski. The Compensation Committee is responsible for
administering the Stock Option Plan and the RRP. The Compensation Committee met
five times during fiscal 1998.
The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. Nominations of persons for
election to the Board of Directors may be made only by or at the direction of
the Board of Directors or by any shareholder entitled to vote for the election
of directors who complies with the notice procedures set forth in the Bylaws of
the Company. Pursuant to the Company's Bylaws, nominations by shareholders
generally must be delivered in writing to the Secretary of the Company at least
90 days prior to the date of the annual meeting, and must comply with certain
other requirements specified in the Bylaws.
Board and Committee Meetings of the Association. Meetings of the
Association's Board of Directors are generally held on a monthly basis. The
Board of Directors of the Association held 14 meetings during the year ended
June 30, 1998. No incumbent director attended fewer than 75% of the total number
of meetings held by the Board of Directors and by all committees of the Board of
Directors on which he served during the year.
Director Compensation
Fees. Directors of the Company are paid $500 per month for service on
the Company's Board of Directors. Directors of the Association are paid fees of
$450 per meeting attended. Directors of the Association also receive
compensation for participation on committees in the amount of $100 for each
meeting attended. In addition, during fiscal 1998, Mr. Urbanski received $400
per month for service as Chairman of the Board of Directors of the Company and
Mr. Nagy received $200 per month for service as Vice Chairman of the Board of
Directors of the Company.
<PAGE>
Fee Continuation Plan. Effective July 1, 1998, the Company adopted the
Sobieski Bancorp, Inc. Fee Continuation Plan for Retired Directors (the "Fee
Continuation Plan"). The Fee Continuation Plan provides for payment of a
specified amount to each eligible director upon the occurrence of the later of
(i) the director's attainment of age 70 or (ii) the termination of the director
as a member of the Company's Board of Directors ("Payment Event"). Specifically,
upon the occurrence of a Payment Event with respect to an eligible director,
such director shall be entitled to begin receiving payment of an amount equal to
the cumulative monthly remuneration to the director for meetings of the
Company's full Board of Directors for the 12 month period preceding the
retirement or other termination of the director (the "Director's Fee"). The
Director's Fee shall be paid to the director for ten years and shall be paid
monthly beginning on the first day of the month following the Payment Event. The
Company will maintain life insurance contracts on the directors to provide
funding for the Company's retirement obligations under the Fee Continuation
Plan.
To be eligible to participate in the plan, a person must have been a
member of the Company's Board of Directors as of June 30, 1998, or become a
member of the Company's Board of Directors after June 30, 1998 and serve in such
capacity for five full consecutive years. The Fee Continuation Plan provides
that if an eligible director's death occurs before commencement of the payments
described above or while such payments are being made to the director,
4
<PAGE>
then the director's spouse shall be entitled to receive such benefits as if the
director were alive. If the deceased eligible director had no spouse, all
benefits will terminate upon the director's death.
Executive Compensation
The Company has not paid any compensation to its executive officers
since its formation. However, the Company does reimburse the Association for
services performed on behalf of the Company by its officers. The Company does
not presently anticipate paying any compensation to such persons until it
becomes actively involved in the operation or acquisition of businesses other
than the Association.
The following table sets forth information concerning the compensation
paid or accrued by the Association for services rendered by Thomas F. Gruber,
the Company's and the Association's Chief Executive Officer. No executive
officer of the Company or the Association was paid in excess of $100,000 during
fiscal 1998.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards
------------------------------- ------------------------
Other Annual Restricted All Other
Fiscal Salary Bonus Compensation Stock Options/ Compensation
Name and Principal Position Year ($)(2) ($) ($) Award ($) SARs (#) ($)
--------------------------- ---- ------ --- --- --------- -------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas F. Gruber, President 1998 $79,688 --- --- $ --- --- $14,669(5)
and Chief Executive Officer(1) 1997 63,370 --- --- 98,532(3) 19,320(4) ---
1996 --- --- --- --- --- ---
</TABLE>
- --------------
(1) Mr. Gruber became President and Chief Executive Officer of the Company
and the Association in September 1996. Prior to that time, he was a
director of the Company and the Association but did not serve as an
executive officer of the Company or the Association.
(2) Includes $18,000 in fees for service as a director of the Company and
the Association during fiscal year 1998. For his service as a director
of the Company in fiscal years 1997 and 1996, Mr. Gruber received fees
of $18,380 and $22,865, respectively.
(3) Based on the $12.75 average of the closing bid and ask price per share
of the Common Stock on September 30, 1996, the date of grant. With
respect to the 7,728 shares of restricted stock granted on September
30, 1996, 20 percent vested on September 30, 1997 and the remaining
shares are scheduled to vest in equal installments on September 30,
1998, 1999, 2000 and 2001. While a director of the Company, Mr. Gruber
was awarded on October 25, 1995, 1,932 shares of restricted stock (the
value of which, on the date of grant (based on the $12.625 average of
the closing bid and ask price per share of the Common Stock on the date
of grant) was $24,392). Twenty percent of the 1,932 restricted shares
<PAGE>
vested on October 25, 1996, an additional 20 percent vested on October
25, 1997 and the remaining shares are scheduled to vest in equal
installments on October 25, 1998, 1999 and 2000, respectively.
Dividends are paid on the restricted shares held by Mr. Gruber to the
same extent and on the same date as dividends are paid on all other
outstanding shares of the Common Stock. Based on the closing price per
share of the Common Stock on June 30, 1998 ($18.75), the 7,342
restricted shares held by Mr. Gruber had an aggregate market value of
$137,663.
(4) Mr. Gruber was also granted an option to purchase 4,830 shares of
Common Stock in fiscal 1996.
(5) Includes employer contributions under the Association's 401(k) Plan of
$941, term life insurance premiums paid by the Association for Mr.
Gruber's benefit of $1,276 and allocations for 1998 to Mr. Gruber's
ESOP account valued at $12,452.
5
<PAGE>
The following table sets forth information regarding stock options
exercised by Mr. Gruber during fiscal 1998 and the number and value of
unexercised stock options held by Mr. Gruber at June 30, 1998. All options
granted will expire ten years from the date of grant and have exercise prices
per share equal to the market value per share of the Common Stock on the date of
grant.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
Value of
Number of Unexercised
Shares Unexercised In-the-Money
Acquired Options/SARs at Options/SARs at
on Value FY-End (#) FY-End ($)
Exercise Realized --------------------------- ----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- --- --- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas F. Gruber --- --- 5,796 18,354 $35,018(1) $110,487(1)
</TABLE>
- -------------
(1) Represents the difference between the aggregate fair market value of the
options as of June 30, 1998 and the aggregate exercise price.
Employment Agreement with Mr. Gruber. On September 30, 1996, the
Association entered into an employment agreement with Mr. Gruber providing for
an initial term of three years (the "Employment Agreement"). The Employment
Agreement provides for an annual salary in an amount not less than Mr. Gruber's
salary as of the date on which the Employment Agreement was executed and
provides for an annual extension of the term of the Employment Agreement by one
year, subject to the performance of an annual formal evaluation by disinterested
members of the Board of Directors of the Association. The Employment Agreement
also provides for termination in the event of Mr. Gruber's death, for cause or
in certain events specified by the regulations of the Office of Thrift
Supervision. The Employment Agreement is also terminable by Mr. Gruber upon 90
days' notice to the Association.
The Employment Agreement provides for payment to Mr. Gruber of an
amount equal to 299% of his five-year average base compensation, if his
employment is involuntarily terminated in connection with a "change in control"
of the Association or the Company or within twelve months thereafter. If the
employment of Mr. Gruber had been terminated as of June 30, 1998 under
circumstances entitling him to severance pay as described above, he would have
been entitled to receive a lump sum cash payment of approximately $300,876.
Supplemental Executive Retirement Plan. Effective July 1, 1998, the
Association adopted the Sobieski Federal Savings and Loan Association
Supplemental Executive Retirement Plan (the "SERP") for the benefit of Mr.
Gruber. The SERP provides for payment of a specified amount to Mr. Gruber, as
President of the Association, upon the occurrence of the later of (i) Mr.
Gruber's attainment of age 65 or (ii) the termination (other than for cause) of
Mr. Gruber as President of the Association ("Payment Event"). Specifically, upon
the occurrence of a Payment Event, Mr. Gruber shall be entitled to begin
receiving payment of an amount equal to three percent of his base annual salary
<PAGE>
in effect as of the date of termination of his employment as President of the
Association, multiplied by the number of full years he was employed as President
of the Association, beginning on June 30, 1998 and ending on the effective date
of termination (the "Benefit"). The Benefit shall be paid to Mr. Gruber for each
of the ten years following the Payment Event and shall be paid monthly beginning
on the first day of the month following the Payment Event. The Association will
maintain a life insurance contract on Mr. Gruber to provide funding for the
Association's retirement obligations under the SERP.
6
<PAGE>
To be eligible to receive the Benefit, Mr. Gruber must serve as
President of the Association for a period of five consecutive years, beginning
on June 30, 1998 and ending on June 29, 2003. The Fee Continuation Plan provides
that if Mr. Gruber dies before commencement of payment of the Benefit, or while
the Benefit is being paid, then Mr. Gruber's spouse shall be entitled to receive
such payments as if Mr. Gruber were alive.
Retirement Agreement with Gerald R. Gadacz. On July 10, 1996, the
Association and the Company entered into a retirement agreement with Gerald R.
Gadacz pursuant to which Mr. Gadacz retired as President and Chief Executive
Officer of the Association and the Company. He also retired from the Board of
Directors of both the Association and the Company and agreed to the cancellation
of his employment agreement. In consideration for the foregoing, the Company
agreed to pay Mr. Gadacz $80,000 per year over a two-year period. In addition,
the company agreed to provide to Mr. Gadacz with health benefits for a period of
two years and other benefits up to $10,000. The Association's and the Company's
obligations under the retirement agreement with Mr. Gadacz ceased on July 10,
1998.
Certain Transactions
The Association has followed a policy of granting loans to eligible
directors, officers, employees and members of their immediate families for the
financing of their personal residences and for other purposes. All such loans to
directors and executive officers are required to be made in the ordinary course
of business and on substantially the same terms, including collateral and
interest rates, as those prevailing at the time for comparable transactions and
do not involve more than the normal risk of collectibility. All loans to
directors and officers were performing in accordance with their terms at June
30, 1998.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed
PricewaterhouseCoopers LLP, independent accountants, to be the Company's
auditors for the fiscal year ending June 30, 1999. Representatives of
PricewaterhouseCoopers LLP are expected to attend the Meeting to respond to
appropriate questions and to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1999.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for the next annual meeting of stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's main office located at
2930 W. Cleveland Road, South Bend, Indiana 46628, no later than May 26, 1999.
Any such proposal shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and, as with any stockholder proposal (regardless of whether included in
the Company's proxy materials), the Company's Certificate of Incorporation and
Bylaws and Delaware law. Under the proxy rules, in the event that the Company
receives notice of a stockholder proposal to take action at the next annual
<PAGE>
meeting that is not submitted for inclusion in the Company' proxy materials, or
is submitted for inclusion but is properly excluded from such proxy materials,
the persons named in the form of proxy sent by the Company to its stockholders
intend to exercise their discretion to vote on such proposal in accordance with
their best judgment if notice of the proposal is not received at the main office
of the Company by the Deadline (as defined below). In addition to the provision
of the proxy rules regarding discretionary voting authority described in the
preceding sentence, the Company's Bylaws provided that if notice of a
stockholder proposal to take action at the next Annual Meeting is not received
at the main office of the Company by the Deadline, such proposal will not be
recognized as a matter proper for submission to the Company stockholders and
will not be eligible for presentation at such meeting. The "Deadline" means the
date that is 90 days prior to the date of the next annual meeting;
7
<PAGE>
however, in the event that less than 100 days' notice or prior public disclosure
of the date of such meeting is given or made to stockholders, the "Deadline"
means the close of business on the tenth day following the day on which notice
of the date of the meeting was mailed or public disclosure of the date of the
meeting was made.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons owning more than 10% of a registered class of the
Company's equity securities, to file periodic reports of ownership and changes
in ownership with the SEC and to provide the Company with copies of such
reports. Based solely upon information provided to the Company by the directors
and officers subject to Section 16(a), all Section 16(a) filing requirements
applicable to such persons were complied with during fiscal 1998, except for the
inadvertent failure to timely file a Form 3 Initial Statement of Beneficial
Ownership by Gregory J. Matthews, Vice President and Chief Operating Officer of
the Company. Mr. Matthews subsequently filed the required form with the SEC.
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 matter should properly come before the Meeting, it is
intended that holders of the proxies will act on such matter in accordance with
their best judgment.
The cost of solicitation of 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 solicitation by mail,
directors, officers and regular employees of the Company and the Association may
solicit proxies personally or by telegraph or telephone without additional
compensation.
8
<PAGE>
REVOCABLE PROXY
SOBIESKI BANCORP, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
October 19, 1998
The undersigned hereby appoints the Board of Directors of Sobieski Bancorp,
Inc. (the "Company"), with full powers of substitution, to act as attorneys and
proxies for the undersigned to vote all shares of capital stock of the Company
which the undersigned is entitled to vote at the Annual Meeting of Stockholders
(the "Meeting") to be held at the main office of the Company, located at 2930 W.
Cleveland Road, South Bend, Indiana on October 19, 1998 at 2:00 p.m. and at any
and all adjournments and postponements thereof.
The Board of Directors recommends a vote "FOR" the election of the nominees
listed in Item 1 and "FOR" the ratification of the appointment of auditors named
in Item 2.
1. The election as directors of all nominees listed below (except as marked
to the contrary):
Leonard J. Dobosiewicz Joseph A. Gorny
[ ] FOR [ ] WITHHOLD [ ] EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. The ratification of the appointment of PricewaterhouseCoopers LLP as
auditors for the Company for the fiscal year ending June 30, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment or postponement
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR ELECTION AS DIRECTORS LISTED IN
ITEM 1 ABOVE AND FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS NAMED IN
ITEM 2 ABOVE. 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>
Please be sure to sign and date
this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
SOBIESKI BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy may be revoked at any time before it is voted by: (i) filing with
the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than this Proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Secretary
of the Company at or before the Meeting; or (iii) attending the Meeting and
voting in person (although attendance at the Meeting will not in and of itself
constitute revocation of this Proxy). If this Proxy is properly revoked as
described above, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect.
The above signed acknowledges receipt from the Company, prior to the execution
of this proxy, of notice of the Meeting, a Proxy Statement and an Annual Report
to Stockholders.
Please sign exactly as your name(s) appear(s) on this proxy card. When signing
as attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
