United States
Securities and Exchange Commission
Washington, DC 20549
_______________
Notice of Exempt Solicitation
1. Name of the Registrant:
SE Financial Corp.
2. Name of person relying on exemption:
Lawrence B. Seidman, Seidman & Associates, LLC, Seidman Investment
Partnership, LP, Seidman Investment PartnershipII, LP, Federal
Holdings, LLC, Pollack Investment Partnership, LP and Broad Park
Investors, LLC.
3. Address of person relying on exemption:
100 Misty Lane, Parsippany, NJ 07054
4. Written materials. Attach written material required to be submitted
pursuant to Rule 14a-6(g)(1) [Sec.240.14a-6(g)(1)]:
_______________________________________________________________________________
SEIDMAN & ASSOCIATES, LLC
100 Misty Lane
P. O. BOX 5430
Parsippany, NJ 07054
(973) 560-1400, X108
May 12, 2005
DEAR FELLOW SE FINANCIAL CORP. SHAREHOLDER:
My name is Lawrence B. Seidman ("Seidman") and I am the Manager for Seidman &
Associates, LLC ("SAL"). I am also responsible for the investment, and voting,
decisions made by Seidman Investment Partnership, LP ("SIP"), Seidman Investment
Partnership II, LP ("SIP II"), Federal Holdings, LLC ("FEDERAL"), Pollack
Investment Partnership, LP ("PIP") and Broad Park Investors, LLC ("BROAD"),
(hereinafter referred to as the Seidman Entities). As of May 10, 2005, the
Seidman Entities beneficially own 81,400 shares, approximately 3.167% of the
outstanding Common Stock, of SE Financial Corp. (the "Company").
I am urgently seeking your assistance to defeat the Company's attempt to award
its Directors and Senior Management stock options (Proposal 2 - SE Financial
Corp. 2005 Stock Option Plan) for up to 257,887 shares of Common Stock (Option
Shares) and up to 103,155 shares (Proposal 3 - St. Edmond's Federal Savings Bank
2005 Restricted Stock Plan) of restricted stock (Free Stock Shares). At the
$11.55 share price reported in the Company's proxy statement as of April 22,
2005, the Free Stock Shares would cost the Company and its shareholders
approximately $1,191,440. This cost will reduce the Company's book value by
approximately $.46 per share.
As you recall, the Company went public on May 6, 2004 less than one year ago.
The Management team seeking your approval for these benefit plans consists of
four executives, three of whom have only been employed by the Company since
March 2005, or for less than three (3) months.1 If approved, the shareholders
will not be able to later reverse this award of the Option Shares and Free Stock
Shares, even if the Company's future financial performance is not satisfactory.
The Company should delay seeking shareholder approval for these two benefit
plans until next year's Annual Meeting in order to give the shareholders
adequate time to evaluate the Company's performance under the new Management
team.
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1 Pamela Mays, President and Chief Executive Officer, J. Christopher Jacobsen,
Chief Operating Officer and Charles Frederick Miller, Chief Lending and Credit
Officer.
If the Stock Option Plan is approved, the Company has disclosed on Page 13 of
its proxy statement that the Company will immediately award 240,000 of the
257,887 Option Shares.2 Sixty Thousand (60,000) Option Shares or 23.27% will be
given to the three new, and unproven, executive officers and Sixty-Five Thousand
(65,000) Option Shares or 25.20% to Nancy C. Panzer, the Company's Chairperson.
This leaves only 17,887 Option Shares available for future officers, directors
and employees. The rush to seek approval of the Stock Option Plan is now
compounded by (i) the rush to award the Option Shares and (ii) the front loading
of the vesting of the Option Shares as demonstrated by the immediate vesting of
106,800 Option Shares on the date of grant and 79,200 one year after the date of
grant. This is not responsible conduct by the Company's Board and Management.
If the Free Stock Plan is approved, the Company has disclosed on Page 18 of its
proxy statement that the Company will immediately award 103,000 of the 103,155
Free Stock Shares, leaving 155 Free Stock Shares for future distribution.3 This
is also irresponsible conduct by the Board and Management. The three new and
unproven executive officers would each receive 12,000 shares worth $138,000
($11.55 share price), an amount that could exceed their annual compensation4, or
$415,800 in the aggregate.
In my opinion the Company does not adequately disclose the cost of the benefit
plans in its proxy material. As for the Stock Option Plan the Company does not
detail how it intends to handle the expensing of the Option Shares and it is,
therefore impossible to calculate this expense.
With respect to the Free Stock Shares at the $11.55 share price the Company
would incur additional non-interest expenses of approximately $184,800,
$219,450, $254,100, $358,050 and $173,250 for 2005, 2006, 2007, 2008 and 2009
respectively. To place this cost in perspective, if the first quarter 2005 Net
Income of $270,885 was annualized and the 2005 additional non-interest expense
was incurred, the earnings per share for the calendar year would be reduced from
approximately $.45 to $.38, or approximately 15.90%. Any increase in the
Company's share price would cause an increase in the non-interest expenses shown
herein.
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2 The vesting schedule is disclosed in the footnote of Page 13 of the Company's
proxy statement.
3 The vesting schedule is disclosed in the footnotes on Page 18 of the Company's
proxy statement.
4 I have not been able to find where the Company has publicly disclosed copies
of the employment contracts for these executives.
SHAREHOLDERS SHOULD ASK THEMSELVES WHY THE RUSH?
I normally support Stock Option Plans that are proposed as a separate proposal
from the Free Stock Plans. But, in this case, I oppose both Proposals because of
(i) the new and unproven management team, (ii) the unreversability of the
benefit plans if the Company's future financial performance is not satisfactory
and (iii) the immediate awarding of principally all the Option Shares and Free
Stock Shares.
These Plans should only be proposed after the new Management team has a proven
track record of increasing the Company's Net Income and the value of our stock.
The request to approve these Proposals is premature.
Please vote AGAINST Proposals Nos. 2 and 3 on the Company's proxy card that you
should have received from the Company. If you have already voted, you have every
right to change your vote. Please contact your bank or broker and instruct
him/her to vote AGAINST Proposals Nos. 2 and 3. If you still have a copy of the
Voting Instruction Form sent to you by your bank or broker, you can change your
vote by calling the toll-free number located on the form or you can change your
vote by using the internet instructions. If you have any questions on how to
vote your shares or how to change your vote, please contact your bank or broker.
For any other questions, please call D.F. King & Co., Inc. at 888-644-5854.
Please also feel free to contact me at the contact numbers noted below. We need
your vote AGAINST Proposal Nos. 2 and 3.
Sincerely,
/ss/Lawrence B. Seidman
LAWRENCE B. SEIDMAN
MANAGER, SEIDMAN & ASSOCIATES, LLC
(Daytime phone) 973-560-1400, X108
(Evening Phone) 973-694-2596
Cell: 201-738-1944
E-Mail: lbseidman@MSN.com