UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Check the appropriate box:
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(as permitted by Rule 14a-6(e)(2))
[X] Definitive proxy statement
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Sobieski Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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SOBIESKI BANCORP, INC.
September 24, 2001
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Sobieski Bancorp,
Inc., I cordially invite you to attend the Company's Annual Meeting of
Stockholders. The meeting will be held at 2:00 p.m., local time, on October 22,
2001 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
three directors and ratify the appointment of Crowe, Chizek and Company LLP as
the Company's independent 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 Crowe, Chizek and Company LLP as the Company's independent
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
fiscal 2001 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
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 22, 2001
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 22, 2001.
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 three directors of the Company;
2. the ratification of the appointment of Crowe, Chizek and Company
LLP as the independent auditors of the Company for the fiscal year
ending June 30, 2002;
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 14, 2001 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 24, 2001
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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.
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PROXY STATEMENT
Sobieski Bancorp, Inc.
2930 W. Cleveland Road
South Bend, Indiana 46628
(219) 271-8300
ANNUAL MEETING OF STOCKHOLDERS
October 22, 2001
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 Bank (the "Bank"), 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 22, 2001, 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 24, 2001.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon (i) the election of three directors and (ii) the ratification of
the appointment of Crowe, Chizek and Company LLP as independent auditors for the
Company for the fiscal year ending June 30, 2002.
Vote Required and Proxy Information
All shares of the Company's 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 in this Proxy Statement and for the ratification of the
appointment of Crowe, Chizek and Company LLP as independent 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 Board of
Directors, as proxy for the stockholder, will have the discretion to vote on
such matters in accordance with their best judgment.
Directors will be elected by a plurality of the votes cast. The
ratification of the appointment of Crowe, Chizek and Company LLP as the
Company's independent auditors requires the affirmative vote of a majority of
the votes cast on the matter. In the election of directors, stockholders may
either vote "FOR" all nominees for election or withhold their votes from any one
or more nominees for election. Votes that are withheld and shares held by a
broker, as nominee, that are not voted (so-called "broker non-votes") in the
election of directors will not be included in determining the number of votes
cast. For the proposal to ratify the appointment of the independent auditors,
stockholders may vote "FOR," "AGAINST" or "ABSTAIN" with respect to this
proposal. Proxies marked to abstain will have the same effect as votes against
the proposal, and broker non-votes will have no effect on the proposal. The
holders of at least one-third of the outstanding shares of the common stock,
present in person or represented by proxy, will constitute a quorum for purposes
of the Meeting. Proxies marked to abstain and broker non-votes will be counted
for purposes of determining a quorum.
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.
1
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on September 14,
2001 will be entitled to one vote for each share of common stock then held. As
of that date, there were 671,962 shares of common stock issued and outstanding.
The following table sets forth, as of September 14, 2001, 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 Bank as a group. The
address for each of the Employee Stock Ownership Plan, Mr. Urbanski and Mr.
Gruber is: c/o Sobieski Bancorp, Inc., 2930 W. Cleveland Road, South Bend,
Indiana 46628.
Shares
Beneficially Percent
Beneficial Owner Owned of Class
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Sobieski Bancorp, Inc. Employee Stock Ownership Plan 74,074(1) 11.02%
Robert J. Urbanski 53,363(2) 7.85
Chairman of the Board
Thomas F. Gruber 38,888(3) 5.59
President and Chief Executive Officer
Directors and executive officers of the Company 175,109(4) 23.95
and the Bank, as a group (9 persons)
------------------------
(1) The amount reported represents shares held by the Company's Employee Stock
Ownership Plan ("ESOP"), 44,290 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 by the
ESOP are voted by the trustee in the same manner that the trustee is
instructed to vote by a majority of the plan participants who instruct the
trustee as to the manner of voting the shares allocated to their plan
accounts.
(2) Includes 1,932 shares awarded as restricted stock under the Company's
Recognition and Retention Plan (the "RRP") to Mr. Urbanski which have vested
(and which have become free of all restrictions originally placed thereon)
and 4,830 shares which Mr. Urbanski has the right to acquire pursuant to
exercisable stock options granted under the Company's 1995 Stock Option and
Incentive Plan (the "Stock Option Plan").
(3) Includes 9,660 shares awarded as restricted stock under the RRP to Mr.
Gruber which have vested or will vest (and which have or will become free of
all restrictions originally placed thereon) within 60 days of September 14,
2001 and 24,150 shares which Mr. Gruber has or will within 60 days of
September 14, 2001 have the right to acquire pursuant to stock options
granted under the Stock Option Plan.
(4) 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 59,302 shares subject to options granted under
the Stock Option Plan currently exercisable or which will become exercisable
within 60 days of September 14, 2001 and 20,790 shares awarded as restricted
shares under the RRP that have vested or will vest (and which have or will
become free of all restrictions originally placed thereon) within 60 days of
September 14, 2001.
2
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently comprised of six members,
each of whom also is a director of the Bank. The directors are divided into
three classes and are generally elected to serve for three-year terms. The
Company notes with sadness the death of Director George J. Aranowski in August
2001. Mr. Aranowski joined Sobieski as a director of the Bank in 1973. His
guidance and dedication to the Company's success will be missed. Following the
death of Mr. Aranowski, the Board reduced the number directors from seven to
six.
The following table sets forth certain information regarding the
Company's Board of Directors, including each director's term of office. The
Board of Directors acting as the nominating committee has recommended and
approved the nominees identified in the following table. 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 below. 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 disclosed in this Proxy Statement, there are no
arrangements or understandings between any director or nominee and any other
person pursuant to which the director or nominee was selected.
Shares of Common
Age at Term Stock-Beneficially Percent
June-30, Director to Owned-at of
Name 2001 Position(s) Held Since(1) Expire September-14, 2001(2) Class
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NOMINEES
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Richard J. Cullar 46 Director 1999 2004 3,204 0.48%
Leonard J. Dobosiewicz 60 Director 1977 2004 12,762 1.89
Joseph A. Gorny 59 Director 1993 2004 26,262 3.88
DIRECTORS CONTINUING IN OFFICE
------------------------------
Thomas F. Gruber 58 President and Chief Executive 1981 2002 38,888 5.59
Officer and Director
Joseph F. Nagy 53 Vice Chairman and Director 1985 2002 14,662 2.17
Robert J. Urbanski 49 Chairman of the Board 1991 2003 53,363 7.85
------------------------
(1) Includes service as a director of the Bank.
(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
1,932, 4,830, 4,830, 24,150, 4,380 and 4,830 shares which Messrs. Cullar,
Dobosiewicz, Gorny, Gruber, Nagy and Urbanski, respectively, currently or
will within 60 days of September 14, 2001 have the right to acquire pursuant
to stock options granted under the Stock Option Plan and 772, 1,932, 1,932,
9,660, 1,932, and 1,932 shares awarded as restricted stock under the RRP to
Messrs. Cullar, Dobosiewicz, Gorny, Gruber, Nagy and Urbanski, respectively,
which have vested or will vest (and which have or will become free of all
restrictions originally placed thereon) within 60 days of September 14, 2001
.
3
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.
Richard J. Cullar. Mr. Cullar is President of Cullar & Associates, a
public accounting firm.
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 Bank in September 1996. Prior to becoming
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.
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, 2001. During fiscal
2001, 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,
reviews the results of the auditors' services and performs certain internal
audit functions. The members of the Audit Committee are Directors Cullar, Nagy
and Urbanski. During fiscal 2001, this committee met six times. For additional
information regarding the Audit Committee, see "Audit Committee Matters" below.
The Compensation Committee is currently comprised of Directors Cullar,
Nagy and Urbanski. The Compensation Committee is responsible for administering
the Stock Option Plan and the RRP. The Compensation Committee met twice during
fiscal 2001.
The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. While the Board of Directors of
the Company will consider nominees recommended by stockholders, the Board has
not actively solicited such nominations. The Board of Directors met once in
fiscal 2001 in its capacity as a nominating committee.
Pursuant to the Company's bylaws, nominations for directors by
stockholders must be made in writing and delivered to the Secretary of the
Company at least 90 days prior to the meeting date. If, however, less than 100
days' notice or prior public disclosure of the date of the meeting is given or
made to stockholders, nominations must be received by the Company not later than
the close of business on the tenth day following the later of the day on which
notice of the date of the meeting was mailed or public disclosure of the date of
the meeting was made. In addition to meeting the applicable deadline,
nominations must be accompanied by certain information specified in the
Company's bylaws.
Board and Committee Meetings of the Bank. Meetings of the Bank's Board
of Directors are generally held on a monthly basis. The Board of Directors of
the Bank held 15 meetings during the year ended June 30, 2001. 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.
4
Audit Committee Matters
Audit Committee Report. The Audit Committee of the Company's Board of
Directors has issued the following report with respect to the audited financial
statements of the Company for the fiscal year ended June 30, 2001:
o The Audit Committee has reviewed and discussed with the
Company's management the Company's fiscal 2001 audited
financial statements;
o The Audit Committee has discussed with the Company's
independent auditors (Crowe, Chizek and Company LLP) the
matters required to be discussed by Statement on Auditing
Standards No. 61;
o The Audit Committee has received the written disclosures and
letter from the independent auditors required by Independence
Standards Board No. 1 (which relates to the auditors'
independence from the Company) and has discussed with the
auditors their independence from the Company; and
o Based on the review and discussions referred to in the three
items above, the Audit Committee recommended to the Board of
Directors that the fiscal 2001 audited financial statements be
included in the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 2001.
Submitted by the Audit Committee of the Company's Board of Directors:
Richard J. Cullar
Joseph F. Nagy
Robert J. Urbanski
Independence of Members and Audit Committee Charter. Each of Messrs.
Cullar, Nagy and Urbanski is "independent" under the definition of independence
contained in the National Association of Securities Dealers' listing standards
for the Nasdaq Stock Market. The Company has adopted a written charter for the
audit committee. A copy of the charter is attached to this proxy statement as
Appendix A.
Director Compensation
Fees. Directors are paid $500 per month for each meeting of the
Company's Board of Directors attended and an additional $500 for each meeting of
the Bank's Board of Directors attended. Directors are generally also paid a fee
of $100 for each Board committee meeting attended. In addition, during fiscal
2001, Mr. Urbanski received $400 per month for serving as Chairman of the Board
of Directors of the Company and Mr. Nagy received $200 per month for serving as
Vice Chairman of the Board of Directors of the Company. As noted above, each
director of the Company also serves as a director of the Bank.
Fee Continuation Plans. Effective July 1, 1998, the Company adopted the
Sobieski Bancorp, Inc. Fee Continuation Plan for Retired Directors and the Bank
adopted the Sobieski Bank Fee Continuation Plan for Retired Directors. The plans
operate in the same manner and each 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 (under the Company's plan) or the
Bank's Board of Directors (under the Bank's plan) ("Payment Event").
Specifically, upon the occurrence of a Payment Event with respect to an eligible
director, the director will be entitled to be paid approximately $333 per month
under each plan ($666 under both plans) for ten years, beginning on the first
day of the month following the Payment Event. The Company and the Bank maintain
life insurance contracts on the directors to provide funding for their
retirement obligations under the plans.
To be eligible to participate in the plans, a person must have been a
member of the Company's Board of Directors (for the Company's plan) or the
Bank's Board of Directors (for the Bank's plan) as of June 30, 1998, or have
become a member of the Company's or the Bank's Board of Directors after June 30,
1998 and serve in that capacity for five full consecutive years. Each plan
provides that if an eligible director's death occurs before commencement of the
payments described above or while the payments are being made to the director,
then the director's spouse will be
5
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. As noted above, each director of the Company is also a director of the
Bank.
Executive Compensation
The Company has not paid any compensation to its executive officers
since its formation. However, the Company does reimburse the Bank 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
Bank.
The following table sets forth information concerning the compensation
paid or accrued by the Bank for services rendered by Thomas F. Gruber, the
Company's and the Bank's Chief Executive Officer. No executive officer of the
Company or the Bank earned a salary and bonus for fiscal 2001 in excess of
$100,000.
Summary Compensation Table
----------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
Annual Compensation Awards
------------------------------------------------------------------------- ---------------------------
Other Annual Restricted All Other
Fiscal Salary Bonus Compensation Stock Options/ Compensation
Name and Principal Position Year ($)(1) ($) ($) Awards ($)(2) SARs (#) ($)(3)
------------------------------ ------- ---------- --------- -------------- ------------- ------------- ---------------
Thomas F. Gruber, President 2001 $98,899 $--- --- $ --- --- $13,250
and Chief Executive Officer 2000 89,670 --- --- --- --- 12,515
1999 85,031 --- --- --- --- 19,714
====================================== ========== ========= ============== ============= ============= ===============
------------------------
(1) Amounts include fees of $12,500, $18,050 and $18,390 and $18,000 for Mr.
Gruber's service as a director of the Company and the Bank during fiscal
2001, 2000 and 1999, respectively.
(2) Based on the closing price per share of the Company's common stock on June
29, 2001 ($13.25), the 1,545 restricted shares held by Mr. Gruber as of that
date had an aggregate market value of $20,471.
(3) For 2001, 2000 and 1999, includes employer contributions under the Bank's
401(k) Plan of $1,293, $1,071 and $974, respectively, term life insurance
premiums paid by the Bank for Mr. Gruber's benefit of $1,277, $1,277 and
$2,552, respectively, and allocations for 2001, 2000 and 1999 to Mr.
Gruber's ESOP account valued at $10,680, $10,167 and $16,188, respectively.
The following table sets forth information regarding stock options
exercised by Mr. Gruber during fiscal 2001 and the number and value of
unexercised stock options held by Mr. Gruber at June 30, 2001.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Options/SARs at In-the-Money Options/SARs
FY-End (#) at FY-End ($)(1)
----------------------------- -------------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
------------------------------------ -------------- -------------- --------------- --------------- ---------------
Thomas F. Gruber --- --- 20,286 3,864 $10,747 $1,932
==================================== ============== ============== =============== =============== ===============
6
Employment Agreement with Mr. Gruber. On September 30, 1996, the Bank
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 on each
anniversary of its execution, subject to the performance of an annual evaluation
by disinterested members of the Board of Directors of the Bank. The term of the
Employment Agreement has been extended pursuant to this provision on each
anniversary of the agreement's execution that has occurred to date. 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 Bank.
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 or within 12 months
after a "change in control" of the Bank or the Company. If Mr. Gruber's
employment had been terminated as of June 30, 2001 under circumstances entitling
him to severance pay as described above, he would have been entitled to receive
a lump sum cash payment of approximately $272,688.
Supplemental Executive Retirement Plan. Effective July 1, 1998, the
Bank adopted the Sobieski Bank 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 Bank, 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 Bank ("Payment Event").
Specifically, upon the occurrence of a Payment Event, Mr. Gruber will be
entitled to begin receiving payment of an amount equal to two percent of his
base annual salary in effect as of the date of termination of his employment as
President of the Bank, multiplied by the number of full years he was employed as
President of the Bank, beginning on June 30, 1998 and ending on the effective
date of termination (the "Benefit"). The Benefit will be paid to Mr. Gruber for
each of the ten years following the Payment Event and will be paid monthly
beginning on the first day of the month following the Payment Event. The Bank
maintains a life insurance contract on Mr. Gruber to provide funding for the
Bank's retirement obligations under the SERP.
To be eligible to receive the Benefit, Mr. Gruber must serve as
President of the Bank for a period of five consecutive years, beginning on June
30, 1998 and ending on June 29, 2003. The SERP 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 will be entitled to receive such payments as if
Mr. Gruber were alive.
Certain Transactions
The Bank 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 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. Directors and officers are, however, as
are employees of the Bank, generally entitled to a 1% reduction in the interest
rate on any loan secured by their primary residence from the then current market
interest rate, as long as they continue to serve as a director, officer or
employee. All loans to directors and officers were performing in accordance with
their terms at June 30, 2001.
7
PROPOSAL II - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On April 19, 2000, the Company terminated the appointment of
Pricewaterhouse Coopers LLP as the Company's principal accountants. The decision
to change accountants was approved by the audit committee of the Company's Board
of Directors.
During the Company's fiscal years ended June 30, 1999 and 1998 and any
subsequent interim period from July 1, 1999 through April 19, 2000, there were
no disagreements with Pricewaterhouse Coopers LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to their satisfaction, would
have caused them to make reference to the subject matter of the disagreements in
connection with their report.
The audit report of Pricewaterhouse Coopers LLP on the Company's
consolidated financial statements as of and for the years ended June 30, 1999
and 1998, did not contain an adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope, or accounting
principles.
On April 19, 2000, the Company engaged Crowe, Chizek and Company LLP as
the Company's principal accountants. The Board of Directors of the Company has
renewed the Company's arrangement for Crowe, Chizek and Company LLP to be the
Company's independent auditors for the fiscal year ending June 30, 2002, subject
to ratification of this appointment by the Company's stockholders at the
Meeting. Representatives of Crowe, Chizek and Company LLP are expected to attend
the Meeting to respond to appropriate questions and to make a statement if they
so desire.
For the fiscal year ended June 30, 2001, Crowe, Chizek and Company LLP
provided various audit and non- audit services to the Company. Set forth below
are the aggregate fees billed for these services:
(a) Audit Fees: Aggregate fees billed for professional services
rendered for the audit of the Company's fiscal 2001 annual
financial statements and review of financial statements included in
the Company's Quarterly Reports on Form 10-QSB for fiscal 2001:
$38,600.
(b) Financial Information Systems Design and Implementation Fees: $0.
(c) All other fees: $54,249.
The Audit Committee of the Company's Board of Directors has considered
whether the provision of services covered by item (c) above is compatible with
maintaining the independence of Crowe, Chizek and Company LLP.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 2002.
8
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's next
annual meeting must be received by its Secretary at the administrative office of
the Company, located at 2930 W. Cleveland Road, South Bend, Indiana 46628, no
later than May 27, 2002 to be eligible for inclusion in the Company's proxy
statement and form of proxy relating to the next annual meeting. Any such
proposal will 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.
To be considered for presentation at the next annual meeting, but not
for inclusion in the Company's proxy statement and form of proxy for that
meeting, proposals must be received by the Company at least 90 days before the
date of the meeting. If, however, less than 100 days' notice or prior public
disclosure of the date of the next annual meeting is given or made to
stockholders, proposals must instead be received by the Company by the tenth day
following the day on which notice of the date of the next annual meeting is
mailed or public announcement of the date of the next annual meeting is first
made. If a stockholder proposal that is received by the Company after the
applicable deadline for presentation at the next annual meeting is raised at the
next annual meeting, the holders of the proxies for that meeting will have the
discretion to vote on the proposal in accordance with their best judgment and
discretion, without any discussion of the proposal in the Company's proxy
statement for the next annual meeting.
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 2001.
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. If,
however, any other matter should properly come before the Meeting, the Board of
Directors, as proxy for the stockholder, will act on such matter in accordance
with its 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 Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
9
CHARTER FOR THE BOARD OF DIRECTORS AUDIT COMMITTEE OF
SOBIESKI BANCORP, INC.
(REVISED JUNE 2000)
MISSION STATEMENT
The Audit Committee will assist the Board of Directors in fulfilling its
oversight responsibilities. The Committee will review the system of internal
control, the financial reporting process, the internal and external audit
processes, and the process for monitoring compliance with laws and regulations.
In performing its duties, the Committee will maintain working relationships with
the Board of Directors, management, and internal and external auditors. To
effectively perform his or her role, each member must obtain an understanding of
the detailed responsibilities of Committee membership as well as the Company's
business, operations, regulatory environment, and risks.
Internal Financial
Control Reporting
------------------ ------------------
AUDIT
COMMITTEE
Internal/ Regulatory
External Matters
Audit
------------------ ------------------
ORGANIZATION
The Committee should be composed of three Board members who possess the
following qualifications:
o Independence (discussed below).
o "Financial literacy." (1)
o Integrity.
o Inquisitiveness and independent judgment.
o An understanding of the Company's business, its risks, and its
controls.
o The time and energy necessary to perform the required duties in a
capable manner.
In addition, at least one member of the Committee must have past employment
experience in finance or accounting, requisite professional certification in
accounting, or any other comparable experience which results in the individual's
financial sophistication, including being or having been a chief executive
officer, chief financial officer, or other senior officer with financial
oversight responsibilities.
-----------------------------------------------------------------
(1) "Financial literacy" means the ability to read and understand
financial statements, including the Company's balance sheet,
statement of income, statement of cash flows, and related
footnotes.
-----------------------------------------------------------------
In order to build upon the experiences of the members in serving on the
Committee, membership will not be rotated except where unavoidable.
A-1
INDEPENDENCE
Because the Committee is responsible for overseeing the financial reporting and
internal audit processes, it must often question management and may take
positions contrary to management or the Board. Consequently, independence from
management is an essential quality for committee members. An "independent"
Director is a person other than an officer or employee of the Company or its
subsidiaries or any other person having a relationship which, in the opinion of
the Board of Directors would interfere with the exercise of independent judgment
in carrying out the responsibilities of a Director. The following persons shall
not be considered independent:
o A Director who is employed by the Corporation or any of its
affiliates for the current year or any of the past three
years.
o A Director who receives $60,000 or more in compensation from
the Corporation or any of its affiliates during the previous
fiscal year, other than compensation for Board service,
benefits under a tax-qualified retirement plan, or
non-discretionary compensation.
o A Director who is a member of the immediate family of a person
who is, or has been in any of the past three years, employed
by the Corporation or any of its affiliates as an executive
officer. Immediate family includes a person's spouse, parents,
children, siblings, mother-father-brother-sister- son or
daughter-in-law, and anyone who resides in such person's home.
o A Director who is a partner in, or a controlling shareholder
or executive officer of, any for-profit business organization
to which the Corporation made, or from which the Corporation
received, payments (other than those arising solely from
investments in the Corporation's securities) that exceed 5% of
the Corporation's or the business organization's consolidated
gross revenues for that year, or $200,000, whichever is more,
in any of the past three years.
o A Director who is employed as an executive of another entity
where any of the Corporation's executives serve on that
entity's compensation committee.
MEETINGS
The Committee will meet regularly, although the exact number of meetings will
depend upon circumstances. Less than the entire Committee may meet to perform
specific functions, as directed by the chairperson. The chairperson will
schedule meetings and prepare the agenda.
ROLES AND RESPONSIBILITIES
A. Internal Control
o Evaluate whether management is setting the appropriate "tone
at the top" by communicating the importance of internal
control and ensuring that all employees and Directors possess
an understanding of their roles and responsibilities.
o Ensure that computer systems and applications have been
reviewed for security and that contingency plans exist in case
of a systems breakdown.
o Ensure that internal control recommendations from auditors and
from the Committee have been implemented by management.
o Ensure that auditors keep the Committee informed about fraud,
illegal acts, internal control deficiencies, and other
matters.
A-2
B. Financial Reporting
General
o Review significant accounting and reporting issues, including
recent professional and regulatory pronouncements, understand
their impact on the financial statements, and make
recommendations to the Board about adoption, implementation,
and interpretation of accounting and reporting rules.
o Inquire of management and auditors about significant risks and
exposures and about plans to minimize such risks.
Annual Financial Statements
o Review the annual financial report to determine if it is
complete, accurate, and reflects appropriate accounting
principles.
o Inquire about complex or unusual transactions, such as pension
plans, asset valuation, and derivatives, and determine that
the accounting treatment of such items is appropriate.
o Inquire about areas involving significant estimates, such as
loan loss allowance or litigation reserves, and determine that
the estimates used are reasonable and appropriate.
o Meet with management and external auditors to review the audit
plan and the audit results.
o Consider management's handling of proposed audit adjustments
and the reason for such adjustments.
o Review the annual (10-K) report before its release and
determine whether the information is accurate, complete, and
consistent with members' knowledge about the Company and its
operations. Based on this review, recommend that the audited
financial statements be included (or not) in the Form 10- K.
o Ensure that external auditors communicate required matters
concerning internal control, management recommendations, and
the conduct of the audit.
Interim Financial Statements
o Understand how management develops and prepares monthly and
quarterly reports and the extent to which they are reviewed by
external auditors.
o Meet with management and external auditors (either in person
or telephonically) to review quarterly reports before
issuance.
o Make inquiries of management, and obtain satisfactory
explanations, about:
-> Significant variations to budget.
-> Whether ratios and relationships are consistent with
expected results.
-> Whether generally accepted accounting principles have
been consistently applied.
-> Actual or proposed changes in accounting or reporting
practices.
-> Significant or unusual events or transactions.
-> Whether the Company's internal controls are functioning
effectively.
-> Whether the Company has complied with agreements with
outside parties.
-> Whether the statements contain adequate and appropriate
disclosures.
A-3
C. Internal Audit Process
o Review the activities and organizational structure of the
internal audit function.
o If there is an internal auditor, review his or her
qualifications and concur in his or her hiring or replacement.
o If there is no internal auditor, consider performing, or
contracting performance of, limited internal audit procedures
in areas considered to be high risk.
D. External Audit Process
o Ensure that the external auditor's proposed audit scope and
approach is appropriate for the Company's needs.
o Ensure the independence of the external auditors by reviewing
any non-audit services provided and obtaining a formal written
statement from the auditors delineating all relationships
between the auditors and the Company, consistent with Standard
1 of the Independence Standards Board.
o Review the performance and related cost of the external
auditors and recommend to the Board the appointment, or
discharge, of the auditors.
E. Compliance with Laws and Regulations
o Review the effectiveness of the system for monitoring
compliance with laws and regulations the Company is subject to
and the results of management's investigation and follow-up
(including disciplinary action) for any fraudulent acts or
accounting irregularities.
o Obtain periodic updates from management, general counsel, and
tax director about compliance.
o Determine that all regulatory compliance matters have been
considered in the preparation of the financial statements.
o Review findings of examinations by regulatory agencies, such
of the Office of Thrift Supervision, and determine that
management's response to all findings is appropriate.
F. Other Responsibilities
o Report regularly to the Board about Committee activities and
make appropriate recommendations.
o Review with legal counsel any legal matters that could have a
significant impact on the financial statements.
o Review policies and procedures for officers' expenses and
perquisites.
o If necessary, institute special investigations and, if
appropriate, hire special counsel or experts for assistance.
o Perform other oversight functions, as requested by the Board.
o Annually, review and reassess the adequacy of the charter, and
recommend necessary changes to the Board.
A-4
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
SOBIESKI BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
October 22, 2001
The undersigned hereby appoints the Board of Directors of Sobieski Bancorp,
Inc. (the "Company"), and its survivor, with full power of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of common stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting"), to be held on October 22, 2001 at the Company's
main office, located at 2930 W. Cleveland Road, South Bend, Indiana, at 2:00
p.m., local time, and at any and all adjournments and postponements thereof, as
follows:
1. The election of the following directors for three year terms (except as
marked to the contrary):
RICHARD J. CULLAR For All
LEONARD J. DOBOSIEWICZ For Withhold Except
JOSEPH A. GORNY [_] [_] [_]
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.
--------------------------------------------------------------------------------
2. The ratification of the appointment of Crowe, Chizek and Company LLP as
independent auditors for the Company for the fiscal year ending June 30,
2002
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.
The Board of Directors recommends a vote"FOR" the nominees named herein
and"FOR" the ratification of the appointment of Crowe, Chizek and Company LLP.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED HEREIN AND FOR
THE RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED AS DIRECTED
BY THE BOARD OF DIRECTORS IN ITS BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
Please be sure to sign and date Date __________________________
this Proxy in the box below.
____________________________________________________________________________
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 the
Company's Annual Report to Stockholders for the fiscal year ended June 30, 2001.
Please sign exactly as your name appears above on this 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 PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
--------------------------------------------------------------------------------
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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