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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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))
|_| Definitive proxy statement
|X| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-12
Security Financial Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
Security Financial Bancorp, Inc.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total Fee paid:
N/A
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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YOUR VOTE IS IMPORTANT
October 29, 2001
Dear Fellow Shareholder:
By now, you should have received a blue proxy card from the "Committee to
Enhance Shareholder Value," relating to the adjourned Annual Meeting scheduled
for November 13, 2001. The Committee is seeking to replace the three nominees
chosen by your Board for election as directors with its own nominees. We refer
to this group as the "Cainkar Group" because Cainkar is the principal person
orchestrating the group's actions.
THE BOARD BELIEVES THE CAINKAR GROUP HAS NOT EARNED YOUR
SUPPORT
o CAINKAR AGGRESSIVELY SOLD SHARES OF COMPANY STOCK,
YET SEEKS THREE BOARD SEATS.
Last year, Cainkar submitted a notice of his intent to nominate
himself for election to the Board of Directors. At that time,
Cainkar claimed to own 39,000 shares. He later withdrew his intent
to nominate himself in return for the Company agreeing to add John
Palmer and Richard Lashley to the Board.
This year, Cainkar is attempting to claim three Board seats, yet
Cainkar's ownership in the Company has plummeted to a mere 4,500
shares, roughly 12% of what he claimed to own last year. THE BOARD
OF DIRECTORS HAS NOT SOLD COMMON STOCK; WE ARE COMMITTED TO THE
COMPANY AND HAVE CONTINUED TO INCREASE OUR OWNERSHIP IN THE COMPANY.
o CAINKAR'S NOMINEES HAVE MEAGER STOCK OWNERSHIP AND
NO MANAGEMENT EXPERIENCE.
Cainkar's nominees own virtually no Company stock. Specifically,
Sheila Donoghue purchased 900 shares in June 2001, increasing her
total ownership of Company stock to 1,000 shares; Jay Johnson owns
only 2,500 shares, which were purchased in June 2001 as well.
Further, neither nominee appears to have any management experience
with financial institutions or their holding companies.
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CAINKAR CLAIMS THAT HIS GROUP, WHICH COLLECTIVELY OWNS LESS
THAN ONE-HALF OF ONE PERCENT OF THE COMPANY'S COMMON STOCK,
WOULD BRING "INDEPENDENT VOICES" TO THE BOARD
The Board is not opposed to the idea of adding qualified people with
"independent voices" to the Board. The Board added Messrs. Palmer and
Lashley, who own over eight percent of the Company's Common Stock, to the
Board last year. However, it is the Board's opinion that the Cainkar Group
has no independent views regarding the operation of the Company. For
example, instead of making new suggestions for change to the operation of
the Company in the group's proxy material, Cainkar appears to have
literally copied proxy materials prepared for use by Messrs. Palmer and
Lashley last year- virtually word for word.
THE BOARD HAS TAKEN MANY STEPS TO MAXIMIZE SHAREHOLDER VALUE SINCE ITS
INITIAL PUBLIC OFFERING IN JANUARY 2000 AND HAS SOUGHT TO ADDRESS THE
ISSUES RAISED BY MESSRS. PALMER AND LASHLEY LAST YEAR, WHICH CAINKAR IS
NOW PARROTING. STATED SIMPLY, CAINKAR'S PURPORTED AGENDA IS "OLD NEWS."
1. The Company's Board has never been opposed to repurchasing the
Company's Common Stock. The Board sought regulatory approval to
repurchase up to 25% of its Common Stock in July 2000 and has sought
to repurchase its Common Stock since it became legally permissible
to do so in January 2001. However, the Board has not been willing to
authorize purchases of Company Common Stock at levels close to book
value. When it makes financial sense to buy shares of Company stock,
we will do it. This has always been our policy.
2. Management has reduced expenses substantially and is continuing to
evaluate means of further reducing expenses. The Company reduced
non-interest expense by $6.3 million, or by 26% from June 30, 1999
to June 30, 2000; from June 30, 1999 to June 30, 2001 non-interest
expense was decreased by 35%. NOTE THAT CAINKAR'S PROXY MATERIALS
ARE SILENT ON HOW OR WHERE THE COMPANY COULD CUT EXPENSES. WE
BELIEVE HE SIMPLY DOES NOT HAVE A PLAN.
3. The Board is not opposed to a sale that would maximize shareholder
value for all. The Board has received no offers, nor is the Board
aware of any potential suitors; however, the Board would seriously
consider any offers reasonably designed to maximize shareholder
value.
THE BOARD CAN ASSURE YOU THAT WE ARE COMMITTED TO MAXIMIZING SHAREHOLDER VALUE
FOR THE BENEFIT OF ALL SHAREHOLDERS AND WE WILL TAKE ALL STEPS NECESSARY TO
FURTHER OUR GOAL.
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YOUR BOARD OF DIRECTORS URGES YOU TO COMPLETE, SIGN, DATE AND RETURN
MANAGEMENT'S "WHITE" PROXY CARD, IN ITS POSTAGE-PAID ENVELOPE, VOTING "FOR" ALL
OF ITS NOMINEES.
PLEASE DISCARD THE BLUE PROXY CARD AND RETURN MANAGEMENT'S
WHITE PROXY CARD.
IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BANK, BROKER OR OTHER
NOMINEE. PLEASE CONTACT THE PARTY RESPONSIBLE FOR YOUR ACCOUNT AND DIRECT THEM
TO VOTE YOUR SHARES FOR YOUR COMPANY'S NOMINEES ON THE "WHITE" PROXY CARD.
Sincerely,
/s/ John P. Hyland
John P. Hyland
President and Chief Executive Officer
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YOUR VOTE IS IMPORTANT
(1) The Board of Directors urges you to DISCARD the blue proxy card recently
sent to you by the Cainkar Group. A "WITHHOLD AUTHORITY" vote on the
Cainkar Group's BLUE proxy card is NOT a vote for the Board's nominees. To
vote FOR your Company's nominees you MUST execute a WHITE proxy card.
(2) If you voted on a blue proxy card BUT WISH TO SUPPORT YOUR COMPANY'S
NOMINEES, please sign, date and mail the enclosed WHITE proxy card in the
postage- paid envelope provided as soon as possible.
(3) Remember: Only your latest dated proxy will determine how your shares are
to be voted at the meeting.
(4) If any of your shares are held in the name of a bank, broker or other
nominee, please contact the party responsible for your account and direct
them to vote your shares for your Company's nominees on the WHITE proxy
card.
(5) For assistance in voting your shares, or for further information, please
contact John P. Hyland, President and Chief Executive Officer of Security
Financial, at (219) 365-4344, or our proxy solicitor:
IF YOU HAVE ANY QUESTIONS, OR NEED FURTHER ASSISTANCE IN VOTING YOUR SHARES,
PLEASE CALL:
GEORGESON SHAREHOLDER COMMUNICATIONS INC.
17 STATE STREET, 10TH FLOOR
NEW YORK, NY 10004 CALL TOLL FREE (800) 223-2064
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REVOCABLE PROXY
SECURITY FINANCIAL BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
AS CURRENTLY ADJOURNED TO NOVEMBER 13, 2001
8:30 A.M., LOCAL TIME
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of Security
Financial Bancorp, Inc. (the "Company") with full power of substitution, to act
as proxy for the undersigned, and to vote all shares of common stock of the
Company which the undersigned is entitled to vote only at the annual meeting of
shareholders, as currently adjourned to November 13, 2001, at 8:30 a.m., local
time, at the Company's main office located at 9321 Wicker Avenue, St. John,
Indiana and at any and all adjournments thereof, with all of the powers the
undersigned would possess if personally present at such meeting as indicated on
the reverse side of this proxy.
1. The election as Directors of all nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).
Mary Beth Bonaventura, Lawrence R. Parducci and Robert A. Vellutini
FOR ALL
FOR VOTE WITHHELD EXCEPT
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INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.
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2. The ratification of the appointment of Crowe, Chizek and Company LLP
as independent auditors of Security Financial Bancorp, Inc. for the
fiscal year ending June 30, 2002.
FOR AGAINST ABSTAIN
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 and 2.
3. The shareholder proposal as set forth in the proxy statement, if
presented at the meeting.
FOR AGAINST ABSTAIN
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
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THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE NOMINEES
FOR DIRECTOR LISTED ON THIS REVOCABLE PROXY, "FOR" RATIFICATION OF CROWE, CHIZEK
AND COMPANY LLP AS INDEPENDENT AUDITORS AND "AGAINST" THE SHAREHOLDER PROPOSAL
IF PRESENTED AT THE MEETING. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, INCLUDING WHETHER OR NOT TO ADJOURN THE MEETING, THIS PROXY WILL BE
VOTED BY THE PROXIES IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS
PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON THE BOARD OF DIRECTORS TO VOTE
WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEES ARE
UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE
CONDUCT OF THE MEETING.
Dated:________________________________
______________________________________
SIGNATURE OF Shareholder
______________________________________
SIGNATURE OF CO-HOLDER (IF ANY)
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a notice of annual meeting of shareholders and of a
proxy statement and of the annual report to shareholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
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PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS WHITE PROXY IN THE
ENCLOSED POSTAGE-PAID WHITE ENVELOPE.