SCHEDULE 14A INFORMATION
------------------------
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant |X|
Filed by the 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
HFB FINANCIAL CORPORATION
-------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee Paid:
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1. Amount previously paid: _______________________________________________
2. Form, Schedule or Registration Statement No.:__________________________
3. Filing Party:__________________________________________________________
4. Date Filed:____________________________________________________________
September 16, 2002
Dear Stockholder:
We invite you to attend the 2002 Annual Meeting of Stockholders of HFB
Financial Corporation (the "Corporation"), the holding company of Home Federal
Bank Corporation, a Kentucky chartered commercial bank, to be held at Pine
Mountain State Resort Park, Pineville, Kentucky, on October 16, 2002 at 2:00
p.m.
The Meeting has been called for the election of directors. Enclosed are a
proxy statement, a proxy card and an Annual Report to Stockholders for the 2002
fiscal year. Directors and officers of the Corporation, as well as
representatives of the Corporation's independent auditors, will be present to
respond to any questions the stockholders may have.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. On
behalf of the Board of Directors, we urge you to please sign, date and return
the enclosed proxy card in the enclosed postage-prepaid envelope as soon as
possible, even if you currently plan to attend the annual meeting. This will not
prevent you from voting in person, but will assure that your vote is counted if
you are unable to attend the Meeting.
Sincerely,
David B. Cook
President
HFB FINANCIAL CORPORATION
1602 CUMBERLAND AVENUE
MIDDLESBORO, KENTUCKY 40965
(606) 248-1095
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 16, 2002
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Stockholders (the
"Meeting") of HFB Financial Corporation (the "Corporation"), the holding company
of Home Federal Bank Corporation, a Kentucky chartered commercial bank, will be
held at Pine Mountain State Resort Park, Pineville, Kentucky on October 16, 2002
at 2:00 p.m.
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 Corporation; and
2. Such other matters as may properly come before the Meeting or any
adjournment thereof.
NOTE: The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Pursuant to the
Bylaws of the Corporation, the Board of Directors has fixed the close of
business on August 30, 2002, as the record date for determination of the
stockholders entitled to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy that is
solicited by 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/ EARL BURCHFIELD
Earl Burchfield
Secretary
Middlesboro, Kentucky
September 16, 2002
IMPORTANT: PLEASE SIGN, DATE AND COMPLETE THE ENCLOSED PROXY. THE PROMPT RETURN
OF PROXIES WILL SAVE YOUR CORPORATION THE EXPENSE OF FURTHER REQUESTS FOR
PROXIES IN ORDER TO INSURE A QUORUM. AN ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
PROXY STATEMENT
OF
HFB FINANCIAL CORPORATION
1602 CUMBERLAND AVENUE
MIDDLESBORO, KENTUCKY 40965
(606) 248-1095
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 16, 2002
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of HFB Financial Corporation (the
"Corporation"), the holding company of Home Federal Bank Corporation, a Kentucky
chartered commercial bank ("Home Federal" or the "Bank"), to be used at the
Annual Meeting of Stockholders of the Corporation (the "Meeting") which will be
held at Pine Mountain State Resort Park, Pineville, Kentucky, on October 16,
2002 at 2:00 p.m. The accompanying Notice of Annual Meeting and this Proxy
Statement are being first mailed to stockholders on or about September 16, 2002.
CHANGE IN FISCAL YEAR
On February 19, 2002, the Board of Directors made a determination to change
the Corporation's fiscal year end from June 30 to December 31, effective July 1,
2002. Thus, the six-month period from July 1, 2002 to December 31, 2002 will be
a transition period. The Corporation will have an annual meeting in April 2003
to discuss the results of the six-month transition period ended December 31,
2002 but NOT to elect directors. Beginning at the April 2004 annual meeting, the
Corporation will elect directors whose terms expired prior to or at the annual
meeting.
VOTING AND REVOCATION OF PROXIES
Proxies solicited by the Board of Directors of the Corporation will be
voted in accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted FOR the nominees for directors set forth below.
The proxy confers discretionary authority on the persons named therein to
vote with respect to the election of any person as a director where the nominee
is unable to serve or for good cause will not serve, and with respect to matters
incident to the conduct of the Annual Meeting. If any other proposal is
presented at the Annual Meeting, proxies will be voted by those named therein in
accordance with the determination of a majority of the Board of Directors, if
the proposal was not submitted with the notice required under the Corporation's
Bylaws.
Proxies marked as abstentions will not be counted as votes cast. In
addition, shares held in street name which have been designated by brokers on
proxy cards as not voted ("broker no-votes") will not be counted as votes cast.
Proxies marked as abstentions or as broker no-votes, however, will be treated as
shares present for purposes of determining whether a quorum is present.
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Corporation, the filing of a later proxy prior to
a vote being taken on a particular proposal at the Meeting or by attendance at
the Meeting and voting in person. A written notice revoking a previously
executed proxy should be sent to HFB Financial Corporation, 1602 Cumberland
Avenue, Middlesboro, Kentucky 40965 -- Attention: Earl Burchfield, Secretary.
VOTING SECURITIES AND SECURITY OWNERSHIP
Holders of record of the Corporation's common stock, par value $1.00 per
share (the "Common Stock"), as of the close of business on August 30,2002 (the
"Record Date") are entitled to one vote for each share then held. As of the
Record Date, the Corporation had 1,296,311 shares of Common Stock issued and
outstanding. The presence,
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in person or by proxy, of at least a majority of the total number of shares of
the Common Stock outstanding on the Record Date will be required to constitute a
quorum at the Meeting.
The following table sets forth information as of the Record Date with
respect to any person who was known to the Corporation to be the beneficial
owner of more than 5% of the Common Stock.
Amount and Nature Percent of Shares
of Beneficial of Capital Stock
Beneficial Owner Ownership (1)(2)(3) Outstanding
-------------------- --------------------- -----------------
David B. Cook 106,665 8.23%
3226 W. Cumberland Avenue
Middlesboro, KY 40965
- -----------------
(1), (2), (3) See corresponding footnotes in table below.
The following table sets forth, as of the Record Date, information known to
the Corporation with respect to the beneficial ownership of Common Stock by each
director or nominee of the Corporation, by each executive officer of the
Corporation who is not a Director, and by all directors and executive officers
of the Corporation as a group.
Amount and Nature Percent of Shares
of Beneficial of Capital Stock
Beneficial Owner Ownership (1)(2)(3) Outstanding
-------------------- --------------------- -----------------
Roger Roper, Director and Branch Manager 13,534 1.04%
Frances Coffey Rasnic, Director 8,643 .67%
David B. Cook, Director and President and
Chief Executive Officer 106,665 8.23%
Earl Burchfield, Director 36,710 2.83%
Robert V. Costanzo, Chairman of the Board 18,665 1.44%
Kenneth V. Jones, Director & Chief Operations Officer 4,867 .38%
Stanley Alexander, Jr., Chief Financial Officer 13,610 1.05%
All directors and executive
officers as a group (7 persons) 202,694 15.64%
- -----------------
(1) As to the Corporation's directors and executive officers, includes 3,612
shares, 4,667 shares, 7,225 shares and 15,604 shares which may be acquired by
Messrs. Costanzo and Jones, Ms. Rasnic and all directors and executive officers
as a group, respectively, upon the exercise of stock options granted under the
HFB Financial Corporation 1992 Stock Option Plan (the "1992 Stock Option Plan").
In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, a person is deemed to be the beneficial owner, for purposes of this
table, of any shares of Common Stock if he or she has or shares voting or
investment power with respect to such Common Stock or has a right to acquire
beneficial ownership at any time within 60 days from the Record Date. As used
herein, "voting power" is the power to vote or direct the voting of shares and
"investment power" is the power to dispose or direct the disposition of shares.
Except as otherwise noted, ownership is direct, and the named individuals and
group exercise sole voting and investment power over the shares of the Common
Stock.
(2) Includes 4,660 shares, 11,692 shares, 1,392 shares and 17,744 shares held
for the benefit of Directors Cook, Burchfield, Costanzo and all directors and
executive officers as a group, respectively, through trusts established under
the Bank's discontinued and current deferred compensation plans for directors.
(3) Includes shares held by certain directors and executive officers as
custodians under Uniform Transfers to Minors Acts, by their spouses and children
and for the benefit of certain directors and executive officers under individual
retirement accounts ("IRAs").
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PROPOSAL I - ELECTION OF DIRECTORS
The Corporation's Board of Directors has six members, with approximately
one-third elected annually in accordance with the Corporation's bylaws. At the
Meeting, two persons nominated by the Board of Directors, both of whom are
currently directors and whose terms expire in 2002, will stand for election.
The Board of Directors has nominated Roger Roper and Frances Coffey Rasnic
to each serve as director for a three-year period or until his respective
successors has been elected and qualified. It is intended that the persons named
in the proxies being solicited by the Board will vote for the election of the
named nominees. If any nominee is unable to serve, the shares represented by all
valid proxies will be voted for the election of such substitute as the Board of
Directors may recommend. At this time, the Board knows of no reason why any
nominee might be unavailable to serve.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ELECTION OF EACH
OF THE NOMINEES.
The following table sets forth, for each nominee and for each director
continuing in office, such person's name, age as of June 30, 2002, the year he
or she first became a director of the Bank or the Corporation (if applicable)
and the year his or her current term as a director will expire. All existing
directors were directors of the Bank in 1992 and became directors of the
Corporation in 1992 upon the Corporation's organization, except Ms. Rasnic, who
was appointed a director of the Corporation in 1996, Mr. Jones, who was elected
as director of the Corporation in 2001 and Mr. Roper, who was appointed as
director of the Corporation in 2002.
YEAR FIRST CURRENT
ELECTED OR TERM
AGE AS OF APPOINTED TO
NAME JUNE 30, 2002 DIRECTOR* EXPIRE
---- ------------- ----------- ------
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2005
Roger Roper 58 2002 2002
Frances Coffey Rasnic 53 1996 2002
DIRECTORS CONTINUING IN OFFICE
David B. Cook 52 1974 2003
Earl Burchfield 72 1976 2003
Kenneth V. Jones 45 2001 2004
Robert V. Costanzo 46 1989 2004
__________________________
*of the Corporation or the Bank
DIRECTORS AND NOMINEES
The principal occupation of each director and each nominee for director of
the Corporation during the last five years is set forth below.
ROBERT V. COSTANZO is Chairman of the Board of the Corporation. A 1989
graduate of Salmon P. Chase College of Law, Mr. Costanzo serves as District
Judge of Bell County, Kentucky. He is a member of the Kentucky Bar Association
and presently serves on the KBA House of Delegates. He is a member of the
Kiwanis International and St. Julian Catholic Church in Middlesboro.
FRANCES COFFEY RASNIC has been a lifelong resident of Claiborne County. She
graduated from the University of Tennessee and holds 45 hours above her Masters
in Education. She has served her community in various civic and school groups.
She has been self-employed in real estate development and in her previously
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owned family business, Coffey Funeral Home, in New Tazewell and Harrogate,
Tennessee where she is currently employed. She is a businesswoman who remains
active in the Claiborne County Chamber of Commerce and serves as Memorial
Secretary of the American Cancer Society and Chairperson of the Tourism
Committee and Board Member of the Clinch-Powell Enterprise Community. She is a
member of the New Tazewell United Methodist Church.
DAVID B. COOK currently serves as president and chief executive officer of
the Corporation and the Bank. A graduate of Western Kentucky University and a
member of First Baptist Church in Middlesboro, Mr. Cook has served as president
of both the Lexington Chapter of the Society of Real Estate Appraisers and the
ROHO Club of Middlesboro. He has previously served as a board member on the Bell
County Chamber of Commerce, the Board of Housing Appeals for the City of
Middlesboro and as a member of the "Advisory Group" of the Middlesboro City
Council's Finance Committee. He is a past board member of the Bluegrass Council
of Boy Scouts of America, Lexington, Kentucky. Mr. Cook has also served as
president of the Kentucky Thrift Foundation, board member of the Central
Kentucky League of Savings Associations and board member of the Kentucky Bankers
Association. Mr. Cook is currently president of the Bell County Industrial
Foundation and Revolving Loan Committee.
EARL BURCHFIELD is retired as a newspaper publisher. Mr. Burchfield is a
past member of the Middlesboro Rotary Club, a past trustee of Appalachian
Hospitals, a past member of Bell County and Claiborne County Chambers of
Commerce and active in the area Gideons organization. He serves as a Nursing
Home Volunteer, as well as church treasurer and Deacon.
KENNETH V. JONES, age 45, joined Home Federal Bank in October of 1999 and
was appointed Chief Operations Officer on May 15, 2000. Prior to joining Home
Federal Bank, Mr. Jones served as Executive Vice President, Chief Financial
Officer and Director of Citizens Bank, New Tazewell, TN, with 24 years of
experience in both operations and lending. He received his Bachelor of Science
Degree in Business Administration from the University of Tennessee and graduated
with honors from the American Bankers Association Graduate School of Banking.
Ken serves as director and secretary of the Bell County Chamber of Commerce and
director of the Bell County Industrial Foundation. Mr. Jones also served as past
president and director of the Claiborne County Chamber of Commerce.
ROGER ROPER, age 58, is currently the manager of the Bank's offices in
Harlan, Kentucky. Mr. Roper has over 29 years of banking experience. Prior to
joining Home Federal in 1996, Mr. Roper was serving as President, CEO of Harlan
Federal Bank. He began his banking career in the early 1960s as a trainee at
Harlan National Bank while still in college. Active in local civic affairs, Mr.
Roper has served on numerous boards and committees. He has been a member of the
CVADD Loan Review Committee for over 15 years, a member and past president of
the Harlan Kiwanis Club, a member of the first Harlan County Industrial
Development Board, former member of the Board of Christian Outreach for
Appalachian People, and a 32nd Degree Mason for over 25 years.
EXECUTIVE OFFICER WHO IS NOT A DIRECTOR
The following sets forth information with respect to the executive officers
of the Corporation, including their ages as of the Record Date, who do not serve
on the Board of Directors.
STANLEY ALEXANDER, JR., age 53, is currently the Bank's and the
Corporation's Chief Financial Officer. Mr. Alexander received Bachelor of
Science Degree in Accounting from Lincoln Memorial University, graduated from
the Graduate School of Banking at the University of Wisconsin in 1984 and had 17
years of banking experience prior to joining the Bank in 1991. He has served as
treasurer of the Middlesboro-Bell County Airport Board, Secretary of the ROHO
Club, Adjutant for American Legion Dewey Guy Post 14 and as a member of the
"Advisory Group" to the Middlesboro City Council's Finance Committee. Mr.
Alexander currently serves as Finance Officer for American Legion Dewey Guy Post
14 and is a member of the Middlesboro-Bell County 4 H Advisory Council.
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COMMITTEES OF THE BOARDS OF DIRECTORS OF THE CORPORATION AND THE BANK
The Boards of Directors of the Corporation and the Bank conduct their
business through meetings of the Boards and their committees. During the fiscal
year ended June 30, 2002, the Corporation's Board of Directors held 12 meetings.
No current director attended fewer than 75% of the total aggregate meetings of
the Corporation's Board of Directors and committees on which such Board member
served during fiscal 2002.
The Corporation's audit committee is comprised of Directors Burchfield
(Chairman), Rasnic, and Costanzo. The audit committee meets as needed to examine
and approve the audit report prepared by the independent auditors of the
Corporation. During fiscal year 2002, the Corporation's audit committee met 3
times. Each of the directors who serve on the audit committee are "independent"
of the Corporation, as the term "independent" is defined under Rule 4200 of the
listing standards of the National Association of Security Dealers, Inc. For the
six-month transition period ending December 31, 2002, the Chairman of the audit
committee will be Mr. Burchfield. This committee meets quarterly to (1) monitor
the accounting and financial reporting practices of the Corporation, and (2)
determine whether the Corporation has adequate administrative, operating and
internal accounting controls. The Corporation's Board of Directors has adopted a
written charter, a copy of which was included in last year's proxy materials for
the Company's annual meeting of stockholders. A copy of the audit committee's
Report is attached as Appendix A.
The Corporation's nominating committee is comprised of the full Board of
Directors for the purpose of evaluating candidates and making nominations for
election as directors. This Committee met 1 time during fiscal 2002 in that
capacity. While the Board of Directors will consider nominees recommended by
stockholders, it has not actively solicited recommendations from the
Corporation's stockholders for nominees nor, subject to the procedural
requirements set forth in the Corporation's Charter and Bylaws, established any
procedures for this purpose.
The Corporation's compensation committee is comprised of Directors Costanzo
(Chairman) and Burchfield. The Committee meets periodically to evaluate the
compensation and fringe benefits of the directors, officers and employees and to
recommend changes and to monitor and evaluate employee morale. The compensation
committee met 1 time during fiscal 2002.
EXECUTIVE COMPENSATION
Summary Compensation Table. The Corporation's principal subsidiary is the
Bank. The Corporation has no full time employees, relying instead on employees
of the Bank for the limited corporate services provided. All compensation paid
to officers and other employees is paid by the Bank. Other than as set forth
below, no executive officer's total salary and bonus for the fiscal year
exceeded $100,000 for services rendered in all capacities to the Corporation and
its subsidiaries.
Long-Term
Compensation
Annual Compensation(1) ------------
Name and Principal ---------------------- Payout of All Other
Position Year Salary Bonus Restricted Stock Compensation(2)
- -----------------------------------------------------------------------------------------------------------------
David B. Cook 2002 $154,750 $ 9,672 $ --- $23,984
President and Chief 2001 $142,500 $ 9,674 $ --- $25,629
Executive Officer of the 2000 $133,750 $ 15,469 $ --- $25,732
Corporation and Bank
Kenneth V. Jones 2002 $ 91,750 $ 5,734 $ --- $22,091
Chief Operations Officer
of the Corporation and
and the Bank
(1) Excludes perquisites, which did not exceed 10% of each named executive
officer's annual salary and bonus.
(2)Includes fees in the amount of $13,800 in fiscal 2002, $14,050 in fiscal 2001
and $13,150 in fiscal 2000 for Mr. Cook's services as a director for the
Corporation and the Bank and $10,600 in fiscal 2002 for Mr. Jones services as a
director of the Corporation. ESOP contributions in fiscal 2002, 2001 and 2000
for the benefit of Mr. Cook were $969, $2,770 and $8,176, respectively.
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Employment Agreements. In 2002, the Bank entered into an amended and
restated employment agreement with Mr. Cook as President and Chief Executive
Officer and an initial contract with Mr. Jones as Chief Operations Officer. Both
President and Chief Executive Officer, Mr. Cook and Chief Operations Officer,
Mr. Jones are responsible for overseeing all operations of the Bank, and for
implementing the policies adopted by the Board of Directors. The employment
agreements has a term of three years and, pursuant to the terms of the
agreement, it shall be extended on each anniversary date from the date of
commencement of the agreement for an additional one-year period beyond the then
effective expiration date, upon a determination by the Board of Directors that
performance of the employee has met the required standards and that such
agreement should be extended. The agreement with Mr. Cook provides for an annual
base salary of $162,000 and the agreement with Mr. Jones provides for an annual
base salary of $95,000. Both agreements provide for a salary review by the Board
of Directors not less often than annually, as well as inclusion in any
discretionary bonus plans, retirement and medical plans, customary fringe
benefits and vacation and sick leave. Each agreement is terminable by the Bank
for "just cause" as defined in the agreement. In the event of termination for
just cause, no severance benefits are available. If the Bank terminates an
employee without just cause, the employee will be entitled to a continuation of
his salary and benefits from the date of termination through the remaining term
of the agreement plus an additional 12-month period, but in no event in excess
of three years' salary. The employee is able to voluntarily terminate his
agreement by providing 90 days' written notice to the Board of Directors, in
which case the employee is entitled to receive only his compensation, vested
rights, and benefits up to the date of termination. In the event of the
employee's death or disability, the employee or his estate will be entitled to a
continuation of his salary and benefits through the remaining term of the
agreement.
Both employment agreements contain provisions stating that in the event of
(i) the employee's voluntary termination of employment for any reason within 30
days following a change in control of the Bank or the Corporation, or (ii) the
employee's involuntary termination of employment in connection with, or within
six months before or two years after, any change in control of the Bank or the
Corporation, the employee will be paid within 30 days of such termination a sum
equal to 2.99 times the average annual compensation he received during the
five-year period immediately prior to the date of change in control. "Control"
generally refers to the acquisition, by any person or entity, of the ownership
or power to vote more than 25% of the Bank's or Corporation's voting stock, or
the control of the election of a majority of Directors or the exercise of a
controlling influence over the management or policies of the Bank or
Corporation. Each employment agreement also provides for a similar lump sum
payment to be made in the event of the employee's voluntary termination of
employment upon the occurrence, or within 90 days thereafter, of certain
specified events following any change in control, whether approval by the Board
of Directors or otherwise which have not been consented to in writing by the
employee including (i) requiring the employee to move his personal residence or
perform his principal executive functions more than 35 miles from the Bank's
current primary office, (ii) materially diminishing the employee's base
compensation, (iii) failing to maintain existing employee benefit plans,
including material vacation, fringe benefits, stock option and retirement plans,
(iv) assigning duties and responsibilities to the employee which are other than
those normally associated with his position with the Bank, (v) materially
diminishing the employee's authority and responsibility, (vi) failing to
re-elect the employee to the Bank's Board of Directors, and (vii) materially
diminishing the employee's secretarial or other administrative support. The
aggregate payments that would have been made to Mr. Cook and Mr. Jones assuming
termination of employment under the foregoing circumstances at June 30, 2002
would have been approximately $386,875 and $237,500, respectively.
DIRECTORS' COMPENSATION
Members of the Board of Directors and committees of the Board of Directors
of the Corporation receive a monthly retainer of $900, plus $250 per regular or
special Board meeting attended
TRANSACTIONS WITH MANAGEMENT
All of the Bank's loans to directors and executive officers are made on
substantially the same terms, including interest rates, as those prevailing for
comparable transactions and do not involve more than the normal risk of
repayment or present other unfavorable features. Furthermore, loans above the
greater of $25,000 or 5% of the Bank's capital and surplus (up to $500,000) to
such persons must be approved in advance by a disinterested majority of the
Board of Directors. The Bank does not offer favorable terms on mortgage loans to
directors or officers.
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STOCKHOLDER PROPOSALS
In order to be eligible to be included in the proxy materials of the
Corporation for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Corporation's
executive office at 1602 Cumberland Avenue, Middlesboro, Kentucky 40965 no later
than December 1, 2002 (120 days prior to the anticipated date of next year's
Annual Meeting of Stockholders). Any such proposal shall be subject to the
requirements of the proxy rules under the Securities Exchange Act of 1934, as
amended. Otherwise, any stockholder proposal to be acted upon at such meeting
but not included in the proxy materials must be received at the Corporation's
executive office, at 1602 Cumberland Avenue, Middlesboro, Kentucky 40965 on or
before March 1, 2003 (30 days prior to next year's anticipated annual meeting
date). If the Corporation is not notified of a stockholder proposal by March 1,
2003, then the Corporation may have the discretion to vote the proxies against
such stockholder proposal, even though such proposal is not discussed in the
proxy statement. In the event that the date of next year's annual meeting
changes, a stockholder proposal must be received not later than 30 days prior to
the new date of such annual meeting; provided, however, that in the event that
less than 40 days notice of the new date of annual meeting is given or made to
stockholders, a stockholder proposal must be received not later than the close
of business on the tenth day following the day on which notice of the new date
of the annual meeting was mailed. All stockholder proposals must also comply
with the Corporation's bylaws and Tennessee law.
INDEPENDENT ACCOUNTANTS
Olive LLP, independent accountants, was appointed by the Board of Directors
of the Corporation and served as the Corporation's auditors for the fiscal year
ending June 30, 2002. In June 2001, Olive LLP merged with Baird, Kurtz and
Dobson into BKD, LLP. Representatives of BKD, LLP are expected to attend the
Annual Meeting to respond to appropriate questions and to make a statement if
they so desire. BKD, LLP will serve as the Corporation's auditors for the
six-month transition period ending December 31, 2002 and the calendar year
ending December 31, 2003. During the year ended June 30, 2002, the Corporation
incurred the following principal auditor fees:
Audit fees: (a) $56,450
All other fees: $ 8,100
- --------------
(a) Includes fees related to annual report on Form 10-K and quarterly
reports on Form 10-Q.
The Audit Committee of the Board of Directors of the Corporation has
considered and has concluded that services, other than the audit, performed by
the accountants, do not interfere with maintaining the independence of the
auditors.
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 matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the direction of the majority of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to regulations promulgated under the Securities Exchange Act of
1934, as amended, the Corporation's officers, directors and persons who own more
than 10% of the outstanding Common Stock are required to file reports detailing
their ownership and changes of ownership in such Common Stock, and to furnish
the Corporation with copies of all such reports. Based solely on the
Corporation's review of ownership reports received prior to the Record Date, or
written representations from reporting persons that no annual report of change
in beneficial ownership is required, the Corporation believes that all
directors, executive officers and stockholders owning in excess of ten percent
of the Common Stock have complied with the reporting requirements for the 2002
fiscal year with the exception of President and Chief Executive Officer David
Cook, who had a late filing of his acquisition of 963 shares of Common Stock
through the Company's ESOP plan and assumption of voting rights for
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23,540 shares of Common Stock as trustee of a testamentary trust and Mr.
Alexander, who had a late filing of his acquisition of 427 shares of Common
Stock through the Company's ESOP plan.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Corporation. In
addition to solicitations by mail, directors, officers, and regular employees of
the Corporation may solicit proxies personally or by telegraph or telephone
without additional compensation.
The Corporation's Annual Report to Stockholders is being mailed to all
persons who were stockholders of record as of the close of business on August
30, 2002. Any stockholder who has not received a copy of such Annual Report may
obtain a copy by writing the Corporation. Such Annual Report is not to be
treated as a part of the proxy solicitation material nor as having been
incorporated herein by reference.
A COPY OF THE CORPORATION'S FORM 10-KSB AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO STANLEY ALEXANDER, JR., CHIEF FINANCIAL
OFFICER, HFB FINANCIAL CORPORATION, 1602 CUMBERLAND AVENUE, MIDDLESBORO,
KENTUCKY 40965.
BY ORDER OF THE BOARD OF DIRECTORS
Earl Burchfield
Secretary
Middlesboro, Kentucky
September 16, 2002
8
APPENDIX A
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AUDIT COMMITTEE REPORT
The Board of Directors of the Corporation has appointed an audit committee,
consisting of three directors, which assists the Board of Directors in
fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing and financial reporting practices of the Corporation.
In discharging its oversight responsibility as to the audit process, the
audit committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Corporation
that might bear on the auditors' independence consistent with Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees,
as amended, and has discussed with the auditors any relationships that may
impact their objectivity and independence and satisfied itself as to the
auditors' independence. The audit committee also discussed with management, the
internal auditors and the independent auditors the quality and adequacy of the
Corporation's internal controls and the internal audit function's organization,
responsibilities, budget and staffing. The audit committee reviewed with both
the independent and the internal auditors their audit plans, audit scope, and
identification of audit risks.
The audit committee reviewed and discussed with the independent auditors
all matters required by generally accepted auditing standards, including those
matters described in Statement on Auditing Standards No. 61, as amended,
Communication with Audit Committees, and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements.
The audit committee reviewed and discussed the audited financial statements
of the Corporation as of and for the fiscal year ended June 30, 2002, with
management and the independent auditors. Management has the responsibility for
the preparation of the Corporation's financial statements and the independent
auditors have the responsibility for the examination of those statements and
expressing an opinion on the conformity of those audited financial statements
with generally accepted accounting principles. The audit committee held 3
meeting during fiscal year 2002.
Based on the above-mentioned review and discussions with management and the
independent auditors, the audit committee recommended to the Board of Directors
that the Corporation's audited financial statements be included in the
Corporation's Annual Report on Form 10-K for the fiscal year ended June 30,
2002, for filing with the Securities and Exchange Commission.
September 16, 2002 Earl Burchfield, Chairman
Frances Coffey Rasnic, Member
Robert Costanzo, Member
1
REVOCABLE PROXY
HFB FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 16, 2002
The undersigned hereby appoints Robert V. Costanzo and Kenneth V. Jones,
with full powers of substitution, to act as attorneys and proxies for the
undersigned, to vote all shares of the common stock of HFB Financial Corporation
which the undersigned is entitled to vote at the Annual Meeting of Stockholders,
to be held at Pine Mountain State Resort Park, Pineville, Kentucky, on October
16, 2002 at 2:00 p.m. and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
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1. The election as directors of all nominees | | | |
listed below (except as marked to the
contrary below).
Roger Roper
Frances Coffey Rasnic
2. The transaction of such other business as
may properly come before the Annual
Meeting or any adjournments thereof.
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE LINE BELOW.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, AS TO WHICH THIS PROXY CONFERS DISCRETIONARY
AUTHORITY, THIS PROXY MAY BE VOTED AS DIRECTED BY A MAJORITY OF THE BOARD OF
DIRECTORS, SUBJECT TO FEDERAL SECURITIES LAWS.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and vote at the Meeting or at any
adjournment thereof, then the power of said attorneys and prior proxies shall be
deemed terminated and have no further force and effect. The undersigned may also
revoke his proxy by filing a subsequent proxy or notifying the Secretary of his
decision to terminate his proxy.
The undersigned acknowledges receipt from the Corporation prior to the
execution of this proxy of notice of the Meeting, a Proxy Statement and an
Annual Report to Stockholders.
Dated: , 2002
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PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
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SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the enclosed 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 COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.