SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
SFS Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
[SFS BANCORP, INC. LETTERHEAD]
March 17, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of SFS Bancorp, Inc.
(the "Company"), we cordially invite you to attend the Annual Meeting of
Stockholders of the Company. The meeting will be held at 10:00 a.m. Schenectady,
New York time, on April 16, 1997 at the main office of the Company, located at
251-263 State Street, Schenectady, New York 12305.
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 consider
and vote upon proposals to elect two directors and ratify the appointment of the
Company's independent auditors. The Board of Directors has carefully considered
both of these proposals and unanimously recommends that you vote "For" both
proposals.
We encourage you to attend the meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy card and return it in the
accompanying postpaid return envelope as promptly as possible. This will save
the Company additional expense in soliciting proxies and will ensure that your
shares are represented at the meeting.
Thank you for your attention to this important matter.
Very truly yours,
Joseph H. Giaquinto
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
SFS Bancorp, Inc.
251-263 State Street
Schenectady, New York 12305
(518) 395-2300
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 16, 1997
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of SFS Bancorp, Inc. (the "Company") will be held at 10:00 a.m.
Schenectady, New York time, on April 16, 1997 at the main office of the Company,
located at 251-263 State Street, Schenectady, New York.
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 KPMG Peat Marwick LLP,
as the auditors of the Company for the fiscal year ending
December 31, 1997;
and 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 the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on February 28, 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 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
Joseph H. Giaquinto
Chairman of the Board, President
and Chief Executive Officer
Schenectady, New York
March 17, 1997
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
SFS Bancorp, Inc.
251-263 State Street
Schenectady, New York 12305
(518) 395-2300
ANNUAL MEETING OF STOCKHOLDERS
April 16, 1997
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of SFS Bancorp, Inc. (the "Company") of
proxies to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting") which will be held at the main office of the Company, located at
251-263 State Street, Schenectady, New York, on April 16, 1997 at 10:00 a.m.,
Schenectady, New York time, and all adjournments of the Meeting. The
accompanying Notice of Annual Meeting and this Proxy Statement are first being
mailed to stockholders on or about March 17, 1997.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon the election of two directors and the appointment of KPMG Peat
Marwick LLP as auditors for the Company.
Vote Required and Proxy Information
All shares of the Company's common stock, par value $.01 (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 adoption of the proposals set
forth in this Proxy Statement. 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.
The directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. The ratification of the appointment of KPMG Peat Marwick
LLP as auditors requires the affirmative vote of a majority of shares present in
person or represented by proxy at the Meeting and entitled to vote on the
matter. Proxies marked to abstain with respect to a proposal and broker
non-votes have the same effect as votes against the proposal. One-third of the
shares of the Common Stock, 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.
Stockholders who execute proxies may revoke them at any time before
they are voted at the Meeting. Unless so revoked, the shares represented by such
proxies will be voted at the Meeting and all adjournments thereof. 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)
<PAGE>
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 Richard D. Ammian, Secretary, SFS Bancorp, Inc., 251-263
State Street, Schenectady, New York 12305.
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on February 28, 1997
will be entitled to one vote for each share of Common Stock then held. As of
that date, the Company had 1,207,997 shares of Common Stock issued and
outstanding. The following table sets forth information regarding share
ownership of: (i) those persons or entities known by management to beneficially
own more than five percent of the Common Stock, (ii) each member of the
Company's Board of Directors, including the Company's Chief Executive Officer
and (iii) all directors and executive officers of the Company and Schenectady
Federal Savings Bank (the "Bank") as a group.
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Beneficial Owners Owned of Class
----------------- ----- --------
<S> <C> <C>
Principal Owners
Wellington Management Company(1) 154,400 12.8%
75 State Street
Boston, Massachusetts 02109
First Financial Fund, Inc. ("FFF")(2) 125,600 10.4
One Seaport Plaza-25th Floor
New York, New York 10022
Kennedy Capital Management, Inc.(3) 93,200 7.7
425 N. New Ballas Road, Suite 181
St. Louis, Missouri 63141
John Hancock Advisers, Inc.(4) 94,000 7.8
101 Huntington Avenue
Boston, Massachusetts 02199
SFS Bancorp, Inc. Stock Ownership Plan(5) 119,600 9.9
251-263 State Street
Schenectady, New York 12305
First Manhattan Company/First Save Associates, L.P./ 107,558 8.9
Second First Save Associates, L.P.(6)
437 Madison Avenue
New York, New York 10022
Directors and Executive Officers
Joseph H. Giaquinto(7) 34,129 2.8
251-263 State Street
Schenectady, New York 12305
John F. Assini, M.D.(8) 14,485 1.2
251-263 State Street
Schenectady, New York 12305
Gerald I. Klein(9) 14,485 1.2
251-263 State Street
Schenectady, New York 12305
Robert A. Schlansker(10) 15,173 1.3
251-263 State Street
Schenectady, New York 12305
Richard D. Ammian(11) 9,573 0.8
251-263 State Street
Schenectady, New York 12305
Directors and executive officers of the Company and the Bank as a 109,699 8.9%
group (9 persons)(12)
<PAGE>
(1) The above information regarding beneficial ownership by Wellington
Management Company is as reported by them in an amended statement dated
January 24, 1997 on Schedule 13-G under the Securities Exchange Act of
1934. Wellington Management Company reported sole voting and
dispositive power over 0 shares, shared voting power over 28,800 shares
and dispositive power over 154,400 shares.
(2) The above information regarding beneficial ownership by FFF is as
reported by them in a statement dated February 14, 1997 on Schedule
13-G under the Securities Exchange Act of 1934. FFF reported sole
voting power over 125,600 shares and shared dispositive power over
125,600 shares.
(3) The above information regarding beneficial ownership by Kennedy Capital
Management, Inc., is as reported by them in a statement dated February
10, 1997 on Schedule 13-G under the Securities and Exchange Act of
1934. Kennedy Capital Management, Inc., reported shared voting and
shared dispositive power over all 93,200 shares.
(4) The above information regarding beneficial ownership by John Hancock
Advisers, Inc., is as reported by them in a statement dated January 30,
1997 on Schedule 13-G under the Securities and Exchange Act of 1934.
John Hancock Advisers, Inc., reported sole voting power over all 94,000
shares and shared dispositive power over all 94,000 shares.
(5) The amount reported represents shares held by SFS Bancorp, Inc.'s
Employee Stock Ownership Plan ("ESOP"), 11,960 of which have been
allocated to accounts of participants as of the voting record date
(February 28, 1997). First Bankers Trust Company, N.A., Quincy,
Illinois, 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.
(6) The above information regarding beneficial ownership by First Manhattan
Co., general partner of First Save Associates, L.P. and Second First
Save Associates, L.P. is as reported by them in a statement dated
October 21, 1997 on Schedule 13-D under the Securities Exchange Act of
1934. First Save Associates, L.P. reported sole and dispositive voting
power of 54,489 shares. Second First Save Associates, L.P. reported
sole and dispositive voting power of 53,069 shares.
(7) Includes shares held directly, as well as jointly with family members,
and shares held in retirement accounts in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals may be deemed to have sole or shared voting and investment
power. The amount also includes 1,454 shares of Common Stock allocated
to Mr. Giaquinto's account under the ESOP and 14,950 shares of Common
Stock awarded to Mr. Giaquinto under the RRP (2,990 of which had vested
as of February 28, 1997). The amount above includes options to purchase
7,475 shares of Common Stock granted to Mr. Giaquinto under the Stock
Option Plan which are exercisable within 60 days of the voting record
date and excludes options to purchase 29,900 shares of Common Stock
granted to Mr. Giaquinto which are not currently exercisable and will
not be exercisable within 60 days of the Voting Record Date.
<PAGE>
(8) Includes shares held directly, as well as jointly with family members,
and shares held in retirement accounts in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals may be deemed to have sole or shared voting and investment
power. The amount also includes 2,990 shares of Common Stock awarded to
Dr. Assini under the RRP (598 shares of which had vested as of February
28, 1997). The amount above includes options to purchase 1,495 shares
of Common Stock which are exercisable within 60 days of the record date
and excludes options to purchase 5,980 shares of Common Stock granted
to Dr. Assini under the Stock Option Plan but which are not currently
exercisable and will not be exercisable within 60 days of the Voting
Record Date.
(9) Includes shares held directly, as well as jointly with family members,
and shares held in retirement accounts in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals may be deemed to have sole or shared voting and investment
power. The amount also includes 2,990 shares of Common Stock awarded to
Mr. Klein under the RRP (598 shares of which had vested as of February
28, 1997). The amount above includes options to purchase 1,495 shares
of Common Stock which are exercisable within 60 days of the record date
and excludes options to purchase 5,980 shares of Common Stock granted
to Mr. Klein under the Stock Option Plan but which are not currently
exercisable and will not be exercisable within 60 days of the Voting
Record Date.
(10) Includes shares held directly, as well as jointly with family members,
and shares held in retirement accounts in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals may be deemed to have sole or shared voting and investment
power. The amount also includes 688 shares of Common Stock allocated to
Mr. Schlansker's account under the ESOP and 2,990 shares of Common
Stock awarded to Mr. Schlansker under the RRP (598 shares of which had
vested as of February 28, 1997). The amount above includes options to
purchase 1,495 shares of Common Stock which are exercisable within 60
days of the record date and excludes options to purchase 5,980 shares
of Common Stock granted to Mr. Schlansker under the Stock Option Plan
but which are not currently exercisable and will not be exercisable
within 60 days of the Voting Record Date.
(11) Includes shares held directly, as well as jointly with family members,
and shares held in retirement accounts in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals may be deemed to have sole or shared voting and investment
power. The amount also includes 835 shares of Common Stock allocated to
Mr. Ammian's account under the ESOP and 7,475 shares of Common Stock
awarded to Mr. Ammian under the RRP (1,495 of which had vested as of
February 28, 1997). The amount above includes options to purchase 3,738
shares of Common Stock granted to Mr. Ammian under the Stock Option
Plan which are exercisable within 60 days of the voting record date and
excludes options to purchase 14,949 shares of Common Stock granted to
Mr. Ammian which are not currently exercisable and will not be
exercisable within 60 days of the Voting Record Date.
<PAGE>
(12) Includes shares held directly, as well as jointly with family members,
and shares held in retirement accounts in a fiduciary capacity or by
certain family members, with respect to which shares the listed
individuals or group members may be deemed to have sole or shared
voting and investment power. The amount also includes 4,961 shares of
Common Stock allocated to the accounts of executive officers and Mr.
Schlansker under the ESOP and 37,375 shares of Common Stock awarded
under the RRP to executive officers and directors. The amount above
includes currently exercisable options to purchase 18,688 shares and
excludes options to purchase 74,749 shares of Common Stock granted to
executive officers and directors under the Stock Option Plan but which
are not currently exercisable and will not be exercisable within 60
days of the Voting Record Date.
</TABLE>
PROPOSAL I - ELECTION OF A DIRECTOR
The Board of Directors of the Company currently consists of five
members, each of whom is also a director of the Bank. Each Director of the
Company has served as such since the Company's incorporation in 1995 with the
exception of Richard D. Ammian who was appointed to the Board in 1996 following
the death of George Finster. The Company wishes to acknowledge Mr. Finster's
dedicated and loyal service to the Bank and Company for over 28 years. Directors
of the Company are generally elected to serve for a three-year staggered terms
or until their respective successors shall have been elected and shall qualify.
Approximately one-third of the directors are elected annually.
The following table sets forth certain information regarding the
directors of the Company, including their terms of office and the nominee for
election as director. 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 nominee identified
in the following table. If the 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 the 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.
<PAGE>
<TABLE>
<CAPTION>
Director Term
Name Position(s) Held With the Bank Age(1) Since(2) Expires
---- ------------------------------ ------ -------- -------
<S> <C> <C> <C> <C>
NOMINEE
Joseph H. Giaquinto Chairman of the Board, President and Chief 57 1979 2000
Executive Officer
Gerald I. Klein Director 63 1988 2000
DIRECTORS CONTINUING IN OFFICE
John F. Assini, M.D. Vice Chairman of the Board 49 1985 1998
Robert A. Schlansker Director and General Counsel 43 1988 1998
Richard D. Ammian Senior Vice President, Secretary and Director 49 1996 1999
- ------------------------
(1) At December 31, 1996.
(2) Includes service as director of the Bank.
</TABLE>
The business experience of each director is set forth below. All
directors have held their present positions for at least the past five years,
except as otherwise indicated.
Joseph H. Giaquinto. Mr. Giaquinto is Chairman of the Board, President
and Chief Executive Officer of the Bank and the Holding Company. Mr. Giaquinto
began his career with Schenectady Federal in 1961 and has served in a variety of
positions including his current positions since 1984.
John F. Assini, M.D. Dr. Assini is a rheumatologist and is on the
medical staff of Sunnyview, Ellis and St. Clare's Hospitals. He has practiced
medicine in the Schenectady area since 1979.
Gerald I. Klein. Mr. Klein is the President of GIK Construction
Corporation. In that capacity, he acts as a land developer and building
contractor. He is also a licensed real estate broker and is engaged in property
management.
Robert A. Schlansker. Mr. Schlansker is currently employed with the
Bank as General Counsel, a position he has held since 1988. Prior to his
employment with the Bank, he was town attorney for the Town of Niskayuna.
Richard D. Ammian. Mr. Ammian is currently serving as Senior Vice
President of Administration and Marketing and Corporate Secretary of the Company
and the Bank. In that capacity, Mr. Ammian is responsible for human resources,
employee benefits, marketing and property management functions of the Bank.
<PAGE>
Meetings and Committees of the Board of Directors
Board and Committee Meetings of the Company. Meetings of the Company's
Board of Directors are generally held on a monthly basis. The Board of Directors
met 12 times during fiscal 1996. During fiscal 1996, no incumbent director of
the Company attended fewer than 75% of the aggregate 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, Compensation
and Executive Committees. The full Board acts as a nominating committee on
behalf of the Company.
The Audit Committee recommends independent auditors to the Board,
reviews the results of the auditors' services, reviews with management and the
internal auditors the systems of internal control and internal audit reports and
assures that the books and records of the Company are kept in accordance with
applicable accounting principles and standards. The Committee also approves the
accounting firm selected by management to perform the Company's annual audit and
acts as the liaison between the auditors and the Board. The members of the Audit
Committee are Directors Assini and Klein. This Committee met three times during
fiscal 1996.
The Compensation Committee is currently composed of Directors Assini
and Klein. This Committee is responsible for administering the Company's Stock
Option Plan and Recognition and Retention Plan. This Committee did not meet
during fiscal 1996.
The Executive Committee meets to act on matters which require attention
between meetings of the Board of Directors. The Executive Committee is comprised
of the full Board of Directors. This committee met 10 times in 1996.
Board and Committee Meetings of the Bank. The Bank's Board of Directors
meets at least monthly. Additional special meetings may be called by the
Secretary upon written request of the Chairman or three members of the Board of
Directors. The Board of Directors met 12 times during the year ended December
31, 1996. During 1996, no director of the Bank attended fewer than 75% of the
aggregate 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 Bank
has standing Executive, Salary and Audit Committees. The entire Board acts as a
nominating committee for the Bank to review director's terms and nominate
candidates for membership on the Board.
The Executive Committee meets on a monthly basis to act on matters
which require attention between meetings of the Board of Directors. The
Executive Committee is comprised of the full Board of Directors. This committee
met 12 times in 1996.
The Salary Committee meets annually to review salaries and the
performance of the senior officers of the Bank, and recommends compensation
adjustments and promotions. This committee is comprised of Directors Assini and
Klein. The Salary Committee met two times during 1996.
The Audit Committee reviews audit reports and related matters to ensure
effective compliance with regulations and internal policies and procedures. This
Committee also approves the accounting firm selected by management to perform
the Bank's annual audit and acts as the liaison between the auditors and the
Board. Directors Assini and Klein currently comprise the committee. This
committee did not meet in 1996.
<PAGE>
Director Compensation
The Board of Directors of the Company are not paid for their service in
such capacity. Directors of the Bank are paid a fee of $500 for each board
meeting attended, $500 for each Executive Committee meeting attended, $375 for
each Salary Committee meeting attended and an $825 annual Audit Committee fee.
In addition, Director Assini is paid $250 per month as Vice Chairman of the
Board and Director Klein is paid $250 per month as Committees' Chairman.
Executive Compensation
The Company's officers do not receive any compensation for services
performed in their capacity as such. The following table sets forth the
compensation paid by the Bank during fiscal 1996 for services rendered by the
President of the Bank. No other officer earned salary and bonus exceeding
$100,000 in fiscal 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards
---------------------------------------------------------------------------
Restricted
Stock Options/ All Other
Fiscal Salary Bonus Award(s) SARs Compensation
Name and Principal Position Year ($) ($) ($) (#) ($)(3)
--------------------------- ---- --- --- --- --- ------
<S> <C> <C> <C> <C> <C> <C>
Joseph H. Giaquinto, Chairman of the 1996 $179,267 $15,056 $ --- --- $4,052
Board, President and Chief Executive 1995 168,379(1) 13,305 188,745(2) 37,375 3,430
Officer 1994 158,463 12,551 --- --- 3,407
- -------------------
(1) Directors fees paid to Mr. Giaquinto were $11,975 and $11,850, during
fiscal 1996 and 1995, respectively.
(2) As of January 16, 1996, the value of the 14,950 shares of Common Stock
awarded to Mr. Giaquinto under the Company's Recognition and Retention
Plan, based upon the average of the closing bid and asked price of $12.625
per share of the Common Stock as reported on The Nasdaq Stock Market on
such date. Dividends paid on restricted Common Stock are deferred and held
by the Company for the account of Mr. Giaquinto until such restrictions
lapse.
(3) Amount includes the Bank's matching contribution paid to Mr. Giaquinto's
account under the Bank's 401(k) Plan.
</TABLE>
<PAGE>
The following table provides information as to the value of the options
held by the Company's Chief Executive Officer on December 31, 1996, none of
which have been exercised. No stock appreciation rights were granted as of such
date.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#)(1) FY-End ($)(2)
-------------------------- ----------------------------
Shares
Acquired on Value
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
---- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
Joseph H. Giaquinto --- --- 7,475 29,900 $15,884 $63,538
- -------------------
(1) Represents an option to purchase Common Stock awarded to the Company's
Chief Executive Officer. The option vests in five equal annual
installments. The first installment vested on January 16, 1997, with the
remaining installments to vest equally on January 16, 1998, 1999, 2000 and
2001.
(2) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the option granted based upon the average of
the closing bid and the asked price of $14.75 per share of the Common Stock
as reported on The Nasdaq National Market System on December 31, 1996.
</TABLE>
Employment Agreements
The Bank has entered into an employment agreement with Mr. Ammian. The
employment agreement provides for an annual base salary in an amount not less
than the employee's current salary and provides for an initial term of two
years. The agreement provides for extensions subject to the performance of an
annual formal evaluation by disinterested members of the Board of Directors of
the Bank. The agreement provides for termination upon the employee's death, for
cause or in certain events specified by OTS regulations. The employment
agreement is also terminable by the employee upon 90 days notice to the Bank.
The employment agreement provides for payment to the employee (in lieu
of salary) of an amount equal to 200% of the employee's base compensation, in
the event there is a "change in control" of the Bank where employment terminates
in connection with such change in control or within twelve months thereafter.
For the purposes of the employment agreement, a "change in control" is defined
as any event which would require the filing of an application for acquisition of
control or notice of change in control pursuant to 12 C.F.R. ss. 574.3 or 4.
Such events are generally triggered prior to the acquisition or control of 10%
of the Company's common stock. Based on his current salary, if the employment of
Mr. Ammian had been terminated as of December 31, 1996 under circumstances
entitling him to severance pay as described above, he would have been entitled
to receive a lump sum cash payment of approximately $165,400.
<PAGE>
The contract also provides, among other things, for participation in an
equitable manner in employee benefits applicable to executive personnel. The
agreement further provides that, for a period that is the lesser of one year
after termination of employment for any reason or as long as such employee
continues to be compensated by the Bank, the employee will not manage, operate,
or control any financial institution having an office within ten miles of any
office of the Bank.
The Company has entered into a similar contract with Mr. Giaquinto
except that it has a term of three years and does not require an annual change
in control payment (other than the payment of his salary and benefits for the
remainder of the contract term) if he were terminated in connection with a
change in control and does not contain a non-competition clause.
Change in Control Severance Agreements
The Bank has entered into change-in-control severance agreements with
Messrs. Krywinski and Pezzula providing for terms of 12 months. Under their
terms, the agreements will be extended by the Board of Directors on the
anniversary date for an additional 12 months provided that there has been a
satisfactory performance review of the subject employee within the prior 12
months. The agreements provide that if, at any time following a change in
control of the Bank, the Bank terminates the covered employees' employment for
any reason other than cause, or if any of the covered employees terminates his
or her employment following a material reduction in compensation, increase in
workload, reduction in secretarial support or relocation of his principal place
of employment, he would be entitled to receive a payment equal to 100% of their
annual compensation. The Bank would also continue life, health, and disability
coverage for the remaining unexpired term of his or her agreement. Assuming a
change-in-control were to take place as of December 31, 1996 and the named
employees were terminated in connection therewith, the aggregate amount payable
to Messrs. Krywinski and Pezzula under these agreements would have been
approximately $55,000 and $50,400, respectively.
Executive Supplemental Retirement Plan
Since 1984, the Bank has maintained an executive supplemental
retirement plan (the "SERP") for the benefit of its President, Chief Executive
Officer and Chairman of the Board Joseph H. Giaquinto. The SERP provides
President Giaquinto with retirement benefits upon retirement from the Bank. In
general, Mr. Giaquinto is provided with a maximum annual retirement benefit
payable for life equal to the difference between (i) 2% times the number of
years of service (up to a maximum of 35 years) multiplied by the average of the
three highest consecutive annual salaries paid during the ten years preceding
termination of employment and (ii) the annual amount payable under the Bank's
Pension Plan. The SERP also provides a salary continuation benefit to Mr.
Giaquinto in the event of termination of employment prior to attaining 65 years
of age equal to three times his highest annualized base salary paid during the
preceding 36-month period as well as a death benefit to his survivor in the
event he dies while in the Bank's employ.
The SERP benefits may be terminated at any time if Mr. Giaquinto is
employed with a company that is actively engaged in competition with the Bank.
<PAGE>
Certain Transactions
The Bank follows 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 consumer purposes. Under current policy, all
loans to directors and executive officers are required to be made in the
ordinary course of business and on the same terms, including collateral and
interest rates, as those prevailing at the time for comparable transactions and
not to involve more than the normal risk of collectibility at the time of
origination. At December 31, 1996, the Bank's loans to directors, officers,
employees and members of their immediate families totaled approximately
$240,000, or 1.11% of stockholders' equity. All of these loans were current at
December 31, 1996.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed KPMG Peat Marwick
LLP, independent accountants, to be the Company's auditors for the fiscal year
ending December 31, 1997. Representatives of KPMG Peat Marwick 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 KPMG PEAT MARWICK LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
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
251-263 State Street, Schenectady, New York, 12305, no later than November 15,
1997. Any such proposal 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 matter should properly come before the Meeting, it is
intended that holders of the proxies will act 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 or the Bank may solicit
proxies personally or by telegraph or telephone without additional compensation.
Schenectady, New York
March 17, 1997
<PAGE>
REVOCABLE PROXY
SFS BANCORP, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
April 16, 1997
The undersigned hereby appoints the Board of Directors of SFSBancorp, Inc.
(the "Company"), and the survivor of them, with full powers of substitution, to
act as attorneys and proxies for the undersigned to vote all shares of common
stock, with $.01 par value, 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 251-263 State Street, Schenectady, New
York at the date and time specified in the Proxy Statement, and at any and all
adjournments or postponements thereof, as follows:
I. The election as directors of all nominees listed below (except as marked to
the contrary):
JOSEPH H. GIAQUINTO GERALD I. KLEIN
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
II. Ratification of the appointment of KPMG Peat Marwick LLP as the auditors of
the Company for the fiscal year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, upon such other matters as may properly come before the
Meeting or any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITIONS.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED "FOR" THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCHMEETING, 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Please be sure to sign and date this Proxy in the box below.
_________________________
Date
__________________________________
Stockholder sign above
__________________________________
Co-holder (if any) sign above
<PAGE>
Detach above card, sign, date and mail in postage paid envelope provided.
SFS BANCORP, INC.
Should the above signed be present and elect to vote at the Meeting or at any
adjournment or postponement 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 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 a Notice of the Annual Meeting, and a Proxy Statement.
Please sign exactly as your name appears 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
