SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
[X] Definitive Proxy Statement the Commission Only (as
[ ] Definitive Additional Materials permitted by Rule 14a-6(e)(2))
[ ] Soliciting Material Under Rule 14a-12
PFS Bancorp, Inc.
- -------------------------------------------------------------------------------
(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:___________________________________________________
[PFS Bancorp, Inc. Logo]
April 4, 2003
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of PFS Bancorp, Inc. The meeting will be held at the Company's main office
located at Second and Bridgeway Streets, Aurora, Indiana, on Thursday, May 1,
2003 at 3:00 p.m., Eastern Daylight Savings Time. The matters to be
considered by stockholders at the Annual Meeting are described in the
accompanying materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign, and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
On behalf of the Board of Directors and all of the employees of PFS
Bancorp, Inc., I thank you for your continued interest and support.
Sincerely,
/s/ Mel E. Green
Mel E. Green
President and Chief Executive Officer
PFS BANCORP, INC.
Second and Bridgeway Streets
Aurora, Indiana 47001
(812) 926-0631
______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 1, 2003
______________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of PFS Bancorp, Inc. (the "Company") will be held at the main office
of the Company located at Second and Bridgeway Streets, Aurora, Indiana, on
Thursday, May 1, 2003 at 3:00 p.m., Eastern Daylight Savings Time, for the
following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To elect two directors for a three-year term expiring in 2006, and
until their successors are elected and qualified;
(2) To ratify the appointment by the Board of Directors of Grant
Thornton LLP as the Company's independent auditors for the fiscal
year ending December 31, 2003; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof. Management is not aware of
any other such business.
The Board of Directors has fixed March 21, 2003 as the voting record
date for the determination of stockholders entitled to notice of and to vote
at the Annual Meeting and at any adjournment thereof. Only those stockholders
of record as of the close of business on that date will be entitled to vote at
the Annual Meeting or at any such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mel E. Green
Mel E. Green
President and Chief Executive Officer
Aurora, Indiana
April 4, 2003
________________________________________________________________________________
You are cordially invited to attend the Annual Meeting. It is important that
your shares be represented regardless of the number you own. Even if you plan
to be present, you are urged to complete, sign, date and return the enclosed
proxy promptly in the envelope provided. If you attend the meeting, you may
vote either in person or by proxy. Any proxy given may be revoked by you in
writing or in person at any time prior to the exercise thereof.
________________________________________________________________________________
PFS BANCORP, INC.
_______________
PROXY STATEMENT
_______________
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 1, 2003
This Proxy Statement is furnished to holders of common stock, $0.01 par
value per share ("Common Stock"), of PFS Bancorp, Inc. (the "Company"), the
parent holding company of Peoples Federal Savings Bank ("Savings Bank").
Proxies are being solicited on behalf of the Board of Directors of the Company
to be used at the Annual Meeting of Stockholders ("Annual Meeting") to be held
at the Company's main office located at Second and Bridgeway Streets, Aurora,
Indiana, on Thursday, May 1, 2003 at 3:00 p.m., Eastern Daylight Savings Time,
and at any adjournment thereof for the purposes set forth in the Notice of
Annual Meeting of Stockholders. This Proxy Statement is first being mailed to
stockholders on or about April 4, 2003.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted for the nominees for director described herein,
for ratification of the appointment of Grant Thornton, LLP for fiscal 2003,
and, upon the transaction of such other business as may properly come before
the meeting, in accordance with the best judgment of the persons appointed as
proxies. Any stockholder giving a proxy has the power to revoke it at any
time before it is exercised by (i) filing with the Secretary of the Company
written notice thereof (Jack D. Tandy, Corporate Secretary, PFS Bancorp, Inc.,
Second and Bridgeway Streets, Aurora, Indiana 47001); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. Proxies solicited hereby may be exercised only at the Annual Meeting
and any adjournment thereof and will not be used for any other meeting.
VOTING
Only stockholders of record at the close of business on March 21, 2003
("Voting Record Date") will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 1,473,728 shares of Common Stock issued and
outstanding and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting. Directors are
elected by a plurality of the votes cast with a quorum present. The two
persons who receive the greatest number of votes of the holders of Common
Stock represented in person or by proxy at the Annual Meeting will be elected
directors of the Company. The affirmative vote of a majority of the total
votes present in person and by proxy is required for approval of the proposal
to ratify the appointment of the independent auditors. Abstentions are
considered in determining the presence of a quorum and will not affect the
plurality vote required for the election of directors. Under rules of the New
York Stock Exchange, the proposals to elect directors and ratify the
appointment of the independent auditors are considered "discretionary" items
upon which brokerage firms may vote in their discretion on behalf of their
clients if such clients have not furnished voting instructions. Abstentions
will have the effect of a vote against the proposal to ratify the appointment
of the independent auditors.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
Election of Directors
The Articles of Incorporation of the Company provide that the Board of
Directors shall be divided into three classes as nearly equal in number as the
then total number of directors constituting the Board of Directors permits.
The directors shall be elected by the stockholders of the Company for
staggered terms, or until their successors are elected and qualified.
At the Annual Meeting, stockholders of the Company will be asked to
elect one class of directors, consisting of two directors, for a three-year
term expiring in 2006, and until their successors are elected and qualified.
No nominee for director is related to any other director or executive
officer of the Company by blood, marriage or adoption, except Messrs. Laker
and Houze who are first cousins. Each nominee currently serves as a director
of the Company and of the Savings Bank.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If any person named as a nominee should be unable or unwilling to
stand for election at the time of the Annual Meeting, the proxies will
nominate and vote for any replacement nominee or nominees recommended by the
Board of Directors. At this time, the Board of Directors knows of no reason
why any of the nominees listed below may not be able to serve as a director if
elected.
The following tables present information concerning the nominees for
director of the Company and each director whose term continues, including
tenure as a director. Ages are reflected as of March 21, 2003 and tenure as
director includes service as a director of the Savings Bank.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERMS EXPIRING IN 2006
Principal Occupation During Director
Name Age the Past Five Years Since
- ---------------------- --- ----------------------------------------- --------
Gilbert L. Houze 74 Vice Chairman of the Board of the 1965
Company and the Savings Bank.
Retired. Previously, Managing
Officer and President of the
Savings Bank.
Jack D. Tandy 71 Secretary and Assistant Secretary 1986
of the Company and the Savings
Bank. Previously, Director and
non-employee Vice President of the
Company and the Savings Bank.
Previously, owner of Tandy's Men's
Warehouse, a retail clothing store
in Aurora, Indiana.
The Board of Directors recommends that you vote FOR election of the nominees
for director.
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DIRECTORS WHOSE TERMS ARE CONTINUING
Directors with a Term Expiring in 2004
Principal Occupation During Director
Name Age the Past Five Years Since
- ---------------------- --- ----------------------------------------- --------
Dale R. Moeller 66 Insurance agent with the Moeller 1987
Insurance Company, Aurora, Indiana.
Carl E. Petty 65 Owner and President of Aurora Lumber 1986
Company, Inc., Aurora, Indiana, a retail
lumber and building materials facility.
Directors with a Term Expiring in 2005
Principal Occupation During Director
Name Age the Past Five Years Since
- ---------------------- --- ----------------------------------------- --------
Mel E. Green 53 President and Chief Executive Officer of 2001
the Company and the Savings Bank since
July 2001. Previously, Managing Officer
and Chief Executive Officer of the
Savings Bank since May 1993.
Robert L. Laker 72 Chairman of the Board of the Company and 1972
the Savings Bank. Retired since 1999.
Previously, President of Robert L.
Johnston Co., Inc., a retail furniture
and appliance store in Aurora, Indiana.
Executive Officers Who Are Not Directors
Set forth below is information with respect to the principal occupations
during the last five years for the executive officer of the Company and the
Savings Bank who does not serve as a director. Age is as of March 21, 2003.
Principal Occupation During
Name Age the Past Five Years
- ---------------------- --- ---------------------------------------------------
Stuart M. Suggs 45 Mr. Suggs currently serves as Corporate Treasurer,
Vice President and Chief Financial Officer of the
Company and the Savings Bank. Previously, Mr.
Suggs was Vice President and Chief Financial
Officer of the Savings Bank since July 1999.
Prior thereto, Mr. Suggs was the Chief Financial
Officer of Sycamore National Bank, Cincinnati,
Ohio, from June 1998 through July 1999.
Previously, Mr. Suggs was an Assistant Vice
President of Accounting Systems & Analysis with
PNC Bank, Cincinnati, Ohio, between June 1980 and
February 1998.
-3-
Shareholder Nominations
Article III, Section 14 of the Company's Bylaws governs nominations for
election to the Board of Directors, and requires all nominations for election
to the Board other than those made by the Board to be made by a stockholder
eligible to vote at an annual meeting of stockholders who has complied with
the notice provisions in that section. Written notice of a stockholder
nomination must be delivered to, or mailed to and received at, our principal
executive offices not later than 120 days prior to the anniversary date of the
initial mailing of proxy materials by the Company in connection with the
immediately preceding annual meeting of our stockholders. Such notice must
have been received no later than the close of business on November 26, 2002.
The Company did not receive any such nominations.
The Board of Directors or a designated committee thereof may reject any
nomination by a stockholder not made in accordance with the requirements of
Article III, Section 14. Notwithstanding the foregoing, if neither the Board
of Directors nor such committee makes a determination as to the validity of
any nominations by a stockholder, the presiding officer of the annual meeting
shall determine and declare at the annual meeting whether the nomination was
made in accordance with the terms of Article III, Section 14.
Director Nominations; Committees and Meetings of the Board of Directors of the
Company
The Board of Directors of the Company has established a Nominating
Committee, Audit Committee and Compensation Committee. During the fiscal year
ended December 31, 2002, the Board of Directors of the Company met nine times.
No director of the Company attended fewer than 75 percent of the aggregate
total number of Board meetings and committee meetings on which he served
during this period.
Nominating Committee. The Company established a Nominating Committee in
2003 for the purpose of nominating the directors for election at this Annual
Meeting. The current members of the Nominating Committee are Messrs. Moeller
and Petty who met once in 2003 to consider and approve director nominations.
The Nominating Committee members are independent directors who will rotate
annually so that no director will be in a position to nominate himself to the
Board of Directors.
Audit Committee. The primary purpose of the Audit Committee, as set
forth in the committee's charter, is to assist the Board of Directors in
fulfilling its fiduciary responsibilities relating to corporate accounting and
reporting practices. The Audit Committee reviews with management and the
independent auditors the systems of internal control, reviews the annual
financial statements, including the Annual Report on Form 10-KSB, and monitors
the Company's adherence in accounting and financial reporting to generally
accepted accounting principles. The Audit Committee is comprised of three
outside directors; and the current members of the Audit Committee are Messrs.
Tandy, Petty and Moeller.
Compensation Committee. The Compensation Committee of the Company
consists of Messrs. Laker, Houze, Moeller, Petty and Tandy. The Compensation
Committee reviews the compensation of the Company's Chief Executive Office and
the other executive officers. The Compensation Committee met three times
during 2002. The report of the Compensation Committee with respect to
compensation for the Chief Executive Officer and all other executive officers
for 2002 is set forth under "Report of the Compensation Committee." No member
of the Compensation Committee is a current or former officer or employee of
the Company or the Savings Bank, except that Mr. Houze served as Managing
Officer and President of the Savings Bank until his retirement in 1993.
-4-
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table includes, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) the only persons
or entities, including any "group" as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), who or which
was known to the Company to be the beneficial owner of more than 5% of the
issued and outstanding Common Stock, (ii) the directors of the Company, (iii)
certain executive officers of the Company, and (iv) all directors and
executive officers of the Company as a group.
Common Stock Beneficially Owned as of
March 21, 2003(1)
-------------------------------------
Name of Beneficial Owner Amount Percentage
- ----------------------------------------- ------------------ -----------------
PFS Bancorp, Inc. 121,670(2) 8.3%
Employee Stock Ownership Plan Trust
Second and Bridgeway Streets
Aurora, Indiana 47001
Kenneth and Joan Lehman 78,064(3) 5.3
1408 North Abingdon Street
Arlington, Virginia 22207
Directors:
Mel E. Green 30,348(2)(4)(5) 2.1
Gilbert L. Houze 18,042(5) 1.2
Robert L. Laker 28,042(5)(6) 1.9
Dale R. Moeller 13,042(5) *
Carl E. Petty 28,042(5) 1.9
Jack D. Tandy 28,042(5)(7) 1.9
Executive Officer:
Stuart M. Suggs 5,125(5)(8) *
All directors and executive officers of the
Company as a group (7 persons) 150,683(9) 10.2
________________
* Represents less than 1% of the outstanding Common Stock.
(1) Based upon filings made pursuant to the 1934 Act and information
furnished by the respective individuals. Under regulations promulgated
pursuant to the 1934 Act, shares of Common Stock are deemed to be
beneficially owned by a person if he or she directly or indirectly has
or shares (i) voting power, which includes the power to vote or to
direct the voting of the shares, or (ii) investment power, which
includes the power to dispose or to direct the disposition of the
shares. Unless otherwise indicated, the named beneficial owner has sole
voting and dispositive power with respect to the shares.
(Footnotes continue on following page)
-5-
____________________
(2) The PFS Bancorp, Inc. Employee Stock Ownership Plan Trust ("Trust") was
established pursuant to the PFS Bancorp, Inc. Employee Stock Ownership
Plan ("ESOP") by an agreement between the Company and Messrs. Green,
Laker and Suggs who act as trustees of the plan ("Trustees"). As of
December 31, 2002, 23,578 shares held in the Trust had been allocated to
the accounts of participating employees. Under the terms of the ESOP,
the Trustees must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees and
unallocated shares will be voted in the same ratio on any matter as to
those shares for which instructions are given. The amount of Common
Stock beneficially owned by directors who serve as Trustees of the ESOP
and by all directors and executive officers as a group does not include
the shares held by the Trust.
(3) The information on number of shares held is based on a Schedule 13G
filed on March 20, 2003 by Kenneth R. Lehman and Joan Abercrombie Lehman
(the "Filing Person"), spouses, who report joint ownership of all of the
shares. According to such filing, the Filing Persons have shared voting
power and dispositive power over all the shares.
(4) Includes 2,306 shares which have been allocated to Mr. Green's account
in the ESOP.
(5) Includes 3,042 shares held in the 2002 Recognition and Retention Plan
("Recognition Plan") Trust.
(6) Includes 15,000 shares held by Mr. Laker's spouse in trust and 10,000
shares in trust for the benefit of Mr. Laker.
(7) Includes 12,500 shares held by Mr. Tandy's spouse in trust and 12,500
shares held in trust for the benefit of Mr. Tandy.
(8) The 2,083 shares have been allocated to Mr. Suggs' account in the ESOP.
(9) Includes an aggregate of 4,389 shares of Common Stock held in the ESOP
and 21,294 shares held in the Recognition Plan Trust.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the 1934 Act requires the officers and directors, and
persons who own more than 10% of the Company's Common Stock to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than 10% stockholders are required
by regulation to furnish the Company with copies of all Section 16(a) forms
they file. The Company knows of no person who owns 10% or more of the
Company's Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, or written representations from its officers and directors, the
Company believes that during, and with respect to, 2002, the Company's
officers and directors complied in all respects with the reporting
requirements promulgated under Section 16(a) of the 1934 Act.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The Company does not pay separate cash compensation to its directors and
officers. The following table sets forth a summary of certain information
concerning the compensation paid by the Savings Bank for services rendered in
all capacities during the years ended December 31, 2002, 2001 and 2000 to the
President and Chief Executive Officer. No executive officers of the Company,
or its subsidiaries, received a total annual salary and bonus during fiscal
2002 in excess of $100,000.
Annual Compensation(1) Long Term Compensation
______________________ _________________________
Awards
_________________________
Securities
Name and Restricted Underlying All Other
Principal Position Year Salary Bonus Stock(2) Options Compensation
______________________________________________________________________________________________________________
<s> <c> <c> <c> <c> <c> <c>
Mel E. Green 2002 $74,954 $1,700 $51,714 -- $19,312(3)
President and Chief 2001 70,354 2,700 -- -- 16,445
Executive Officer 2000 66,715 700 -- -- 972
______________
(1) Does not include amounts attributable to miscellaneous benefits received
by the named executive officer. In the opinion of management of the
Company, the costs of providing such benefits to the named executive
officer during the years ended December 31, 2002, 2001 and 2000 did not
exceed the lesser of $50,000 or 10% of the total of annual salary and
bonus reported for the individual.
(2) Represents the grant of 3,042 shares of restricted Common Stock to Mr.
Green pursuant to the Recognition Plan, which was deemed to have had the
indicated value at the date of grant. The entire grant was unvested at
December 31, 2002 and had a fair market value of $47,303 as of that
date. The award vests 20% per year from the date of grant. Dividends
paid on the restricted Common Stock are held in a Recognition Plan Trust
and paid to the recipient when the restricted stock vests.
(3) Includes the fair market value of 1,168 shares of Common Stock on
December 31, 2002 ($15.55), allocated to Mr. Green's ESOP account during
2002. Also includes contributions by the Savings Bank to its 401(k)
profit sharing plan to Mr. Green's account which amounted to $1,150
during fiscal 2002.
Compensation of Directors
Each director, except Mr. Green, receives annual fees of $14,832 and
payment of 80% of their health insurance premiums so long as he is absent from
no more than two meetings of the Board of Directors held during the applicable
year. Messrs. Laker, Houze, Tandy, Petty and Moeller also receive a fee of
$50 for inspecting properties securing real estate loans made by the Savings
Bank due to their extensive knowledge about local values and trends, of
approximately $1,660 for each director in the 2002 fiscal year. In addition,
Messrs. Laker, Houze and Tandy received a fee of $2,040, $1,440 and $720,
respectively, for serving as Chairman of the Board, Vice Chairman of the Board
and Assistant Secretary, respectively, of the Savings Bank during 2002.
Committee members receive annual fees of $2,472 regardless of attendance. For
the year ended December 31, 2002, each director, other than Mr. Green,
received a year-end payment of $700.
Deferred Compensation Plan
In December 2000, the Savings Bank established an Executive Officers and
Directors Deferred Compensation Plan pursuant to which participants will be
entitled to annual payments of $17,800 for 10 years upon their retirement,
-7-
provided they have served as a director or executive officer for at least 10
years. Benefits under the deferred compensation plan will become immediately
vested upon a change-in-control of the Savings Bank. In addition to the
current directors, Mr. Suggs, who is Vice President and Chief Financial
Officer of the Savings Bank, participates in this plan.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is responsible for
establishing management compensation policies and procedures to be reflected
in the Compensation Program offered to the Executive Officers of the Company
and Savings Bank. During the 2002 fiscal year, the members of the Committee
met three times.
The members of the Compensation Committee of both the Company and the
Savings Bank are identical and no member of the Committee is a current
employee of the Company or any subsidiary. The Compensation Committee of the
Company has exclusive jurisdiction over the administration and grants relating
to the 2002 stock option plan and/or recognition and retention plan. The
Committee uses outside consultants, market studies and published compensation
data as a resource in establishing a competitive compensation program.
The Committee considers several financial and non-financial
accomplishments in setting the compensation of the Chief Executive Officer and
other executive officers, including but not limited to, net income of the
Savings Bank, efficiency ratios, growth, satisfactory regulatory examinations,
and market value of the Company. The Committee also administers a broad-based
incentive bonus plan which is based on, among other factors, the earnings per
share growth and the return on average equity of the Company.
The Committee has sought to design a compensation program in which a
significant portion of the compensation paid to senior management (including
the Company's President and Chief Executive Officer) be performance driven and
incentive-based. It is through this process that the Company is able to
compete for and retain qualified management personnel who are critical to the
Company's long-term success while aligning the interests of those managers
with the long-term interests of the Company's shareholders.
Members of the Compensation Committee
Gilbert L. Houze
Robert L. Laker
Dale R. Moeller
Carl E. Petty
Jack D. Tandy
Indebtedness of Management and Related Party Transactions
In the ordinary course of business, the Savings Bank makes loans
available to its directors, officers and employees. It is the belief of
management that these loans neither involve more than the normal risk of
collectibility nor present other unfavorable features. At December 31, 2002,
the Savings Bank had five loans outstanding to directors and executive
officers of the Savings Bank, or members of their immediate families. All of
such loans, except for two loans to Mr. Green and one loan to Mr. Houze, were
made on substantially the same terms as those prevailing at the time for
comparable transactions to third parties. Pursuant to a program available to
all employees of the Savings Bank, Mr. Green has a mortgage loan and a home
equity line of credit with the Savings Bank and Mr. Houze has a mortgage loan
with the Savings Bank which have discounted rates of interest equal to the
Savings Bank's average cost of funds plus 1% as adjusted every six months. At
December 31, 2002 such loans amounted to $37,121, $17,496 and $45,855 and had
interest rates of 4.125%, 4.0% and 4.25%, respectively. Such loans were
current in accordance with their original terms as of December 31, 2002.
-8-
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Grant Thornton LLP,
independent certified public accountants, to perform the audit of the
Company's financial statements for the year ending December 31, 2003, and
further directed that the selection of auditors be submitted for ratification
by the stockholders at the Annual Meeting.
The Company has been advised by Grant Thornton LLP that neither that
firm nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. Grant Thornton LLP will have one or
more representatives at the Annual Meeting who will have an opportunity to
make a statement, if they so desire, and will be available to respond to
appropriate questions.
In determining whether to appoint Grant Thornton LLP as the Company's
auditors, the Company's Audit Committee considered whether the provision of
services, other than auditing services, by Grant Thornton LLP is compatible
with maintaining the auditor's independence. In addition to performing
auditing services, the Company's auditors performed tax-related services,
including the completion of the Company's corporate tax returns, in 2002. The
Audit Committee believes that Grant Thornton LLP's performance of these other
services is compatible with maintaining the auditor's independence.
Audit Fees
The aggregate amount of fees billed by Grant Thornton LLP for its audit
of the Company's annual financial statements for 2002 and for its reviews of
the Company's unaudited interim financial statements included in reports filed
by the Company under the 1934 Act during 2002 was $52,670.
Financial Information Systems Design and Implementation
The Company did not engage or pay any fees to Grant Thornton LLP with
respect to the provision of financial information systems design and
implementation services during 2002.
All Other Fees
The aggregate amount of fees billed by Grant Thornton LLP for all other
services rendered to the Company during 2002 was $4,175. These services
consisted primarily of preparing federal and state income tax returns and
other tax-related services.
The Board of Directors recommends that you vote FOR the ratification of
the appointment of Grant Thornton LLP as independent auditors for the fiscal
year ending December 31, 2003.
-9-
REPORT OF THE AUDIT COMMITTEE
The members of the Audit Committee, Messrs. Tandy, Petty and Moeller are
independent as defined in Rule 4200(a)(14) of the National Association of
Securities Dealers, Inc.'s ("NASD") listing standards. Although Mr. Tandy held
the title of "Vice President" while serving on the Board of Directors of the
Savings Bank from 1992 to 2001, Mr Tandy was not an employee of the Savings
Bank nor was he in any manner involved in its daily operations. The Audit
Committee meets on an as needed basis and met four times in fiscal 2002. On
July 12, 2001, the Board of Directors and the Audit Committee adopted an Audit
Committee Charter which was attached to the Company's proxy statement for the
2002 Annual Meeting. The Audit Committee reviews and reassesses the Audit
Committee Charter annually.
The Audit Committee has reviewed and discussed the Company's audited
financial statements with management. The Audit Committee has discussed with
the independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61, "Communication with Audit Committees." The Audit
Committee has received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No.
1, and has discussed with the Company's independent accountant, the
independent accountant's independence. Based on the review and discussions
referred to above in this report, the Audit Committee recommended to the Board
of Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-KSB for fiscal year 2002 for filing with
the SEC.
Members of the Audit Committee
Dale R. Moeller
Carl E. Petty
Jack D. Tandy
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders
of the Company must be received at the principal executive offices of the
Company, Second and Bridgeway Streets, Aurora, Indiana 47001, Attention:
Corporate Secretary, no later than December 6, 2003. If such proposal is in
compliance with all of the requirements of Rule 14a-8 under the 1934 Act, it
will be included in the proxy statement and set forth on the form of proxy
issued for such annual meeting of stockholders. It is urged that any such
proposals be sent certified mail, return receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the 1934 Act may be
brought before an annual meeting pursuant to Article II, Section 12 of the
Company's Bylaws, which provides that the stockholder must give timely notice
thereof in writing to the Secretary of the Company (also by December 6, 2003).
A stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief
description of the proposal desired to be brought before the annual meeting,
(b) the name and address, as they appear on the Company's books, of the
stockholder proposing such business and, to the extent known, any other
stockholders known by such stockholder to be supporting such proposal, (c) the
class and number of shares of the Company's capital stock which are
beneficially owned by the stockholder on the date of such stockholder notice
and, to the extent known, by any other stockholders known by such stockholder
to be supporting such proposal on the date of such stockholder notice, and (d)
any financial interest of the stockholder in such proposal (other than
interests which all stockholders would have).
-10-
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 2002 accompanies this Proxy Statement. Such Annual Report is not
part of the proxy solicitation materials.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of the Company's Annual Report on Form 10-
KSB (without exhibits) for fiscal 2002 required to be filed with the
Commission under the 1934 Act. In addition, upon written request, the Company
will furnish copies of the exhibits to the Annual Report on Form 10-KSB for a
fee that covers the Company's reasonable expenses in furnishing such exhibits.
Such written requests should be directed to Jack D. Tandy, Corporate
Secretary, PFS Bancorp, Inc., Second and Bridgeway Streets, Aurora, Indiana
47001. The Form 10-KSB is not part of the proxy solicitation materials.
OTHER MATTERS
Management is not aware of any business to come before the Annual
Meeting other than the matters described above in this Proxy Statement.
However, if any other matters should properly come before the meeting, it is
intended that the proxies solicited hereby will be voted with respect to those
other matters in accordance with the judgment of the persons voting the
proxies.
The cost of the 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 the proxy
materials to the beneficial owners of the Company's Common Stock. In addition
to solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
-11-
[X] PLEASE MARK VOTES AS
IN THIS EXAMPLE REVOCABLE PROXY
PFS BANCORP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PFS BANCORP,
INC. If no boxes are marked, your vote will be cast as recommended by the
Board of Directors by simply signing your name below and returning this card.
The undersigned, being a stockholder of PFS Bancorp, Inc. ("Company") as of
March 21, 2003, hereby authorizes the Board of Directors of the Company or any
successors thereto as proxies with full powers of substitution, to represent
the undersigned at the Annual Meeting of Stockholders of the Company to be
held at the Company's main office, located at Second and Bridgeway Streets,
Aurora, Indiana, on Thursday, May 1, 2003 at 3:00 p.m., Eastern Daylight
Savings Time, and at any adjournment of said meeting, and thereat to act with
respect to all votes that the undersigned would be entitled to cast, if then
personally present, as follows:
1. ELECTION OF DIRECTORS FOR THREE-YEAR TERM
[ ] FOR all nominees listed below [ ] WITHHOLD [ ] FOR ALL
(except as marked to the EXCEPT
contrary below)
Nominees for three-year term expiring in 2006:
Gilbert L. Houze and Jack D. Tandy.
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. PROPOSAL to ratify the appointment by the Board of Directors of Grant
Thornton LLP as the Company's independent auditors for the year ending
December 31, 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Shares of the Company's Common Stock will be voted as specified. Unless
otherwise marked, your proxy will be voted for the proposals by simply signing
your name and returning this card. You may revoke this proxy at any time
prior to the time it is voted at the annual meeting.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders of PFS Bancorp, Inc. called for May 1, 2003, the
accompanying Proxy Statement and the Annual Report prior to the signing of
this proxy.
Please sign this proxy exactly as your name(s) appear(s) on this proxy.
When signing in a representative capacity, please give title. When shares
are held jointly, only one holder need sign.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
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.
PFS BANCORP, INC.
_______________________________________________________________________________
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
_______________________________________________________________________________
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.
___________________________________________________
___________________________________________________
___________________________________________________
[PFS Bancorp, Inc. Letterhead]
April 4, 2003
To: Participants in PFS Bancorp, Inc.'s Employee Stock Ownership Plan
As described in the attached materials, proxies are being solicited in
connection with the proposals to be considered at the upcoming Annual Meeting
of Shareholders of PFS Bancorp, Inc. (the "Company"). We hope you will take
advantage of the opportunity to direct the manner in which shares of Common
Stock of the Company allocated to your account pursuant to the Employee Stock
Ownership Plan ("ESOP") will be voted.
Enclosed with this letter is the Proxy Statement, which describes the
matters to be voted upon, the Annual Report to Stockholders and a voting
instruction ballot, which will permit you to vote the shares in your account.
After you have reviewed the Proxy Statement, we urge you to vote your shares
held pursuant to the ESOP by marking, dating, signing and returning the
enclosed voting instruction ballot to the administrator of the ESOP. The Plan
Administrator will certify the totals to the ESOP Trustees for the purpose of
having those shares voted by the Trustees.
We urge each of you to vote, as a means of participating in the
governance of the affairs of the Company. If your voting instructions for the
ESOP are not received, the shares allocated to your accounts will generally
not be voted. While I hope that you will vote in the manner recommended by
the Board of Directors, the most important thing is that you vote in whatever
manner you deem appropriate. Please take a moment to do so.
Please note that the enclosed material relates only to those shares
which have been allocated to you under the ESOP. If you also own shares of
Company Common Stock outside of the ESOP, you have already received other
voting material for those shares owned by you individually and not under the
ESOP. Please return all your voting material so that all your shares may be
voted.
Sincerely,
/s/ Mel E. Green
Mel E. Green
President and Chief Executive Officer
ESOP VOTING INSTRUCTION BALLOT
PFS BANCORP, INC.
The undersigned hereby instructs the Trustees of the Employee Stock
Ownership Plan ("ESOP") of PFS Bancorp, Inc. (the "Company") to vote, as
designated below, all the shares of Common Stock of the Company allocated to
my account pursuant to the ESOP as of March 21, 2003 at the Annual Meeting of
Shareholders to be held at the main office of the Company, located at Second
and Bridgeway Streets, Aurora, Indiana on Thursday, May 1, 2003, at 3:00 p.m.,
Eastern Daylight Savings Time, and any adjournment thereof.
1. THE ELECTION AS DIRECTORS OF ALL NOMINEES LISTED
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
Nominees for three-year term expiring in 2006: Gilbert L. Houze and Jack D.
Tandy.
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. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors of Grant
Thorton LLP as the Company's independent auditors for the fiscal year ending
December 31, 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Trustees are authorized to vote upon such other
business as may properly come before the meeting.
The Company's Board of Directors recommends a vote FOR the Board's
nominees for director and FOR Proposal 2. Such votes are hereby solicited by
the Company's Board of Directors.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE BALLOT TO THE PLAN
ADMINISTRATOR.
Please be sure to sign and date Date
this Proxy in the box below.
______________________________________________________________________
___ Stockholder sign above _________ Co-holder (if any) sign above ___
If you return this card properly signed but you do not otherwise
specify, shares will be voted for the Board of Directors' nominees for
director and for Proposal 2. If you do not return this card, your shares will
generally not be voted.
[PFS Bancorp, Inc. Letterhead]
April 4, 2003
To: Persons Granted Restricted Stock Under the Company's 2002 Recognition
and Retention Plan
As described in the attached materials, proxies are being solicited in
connection with the proposals to be considered at the upcoming Annual Meeting
of Shareholders of PFS Bancorp, Inc. (the "Company"). We hope you will take
advantage of the opportunity to direct the manner in which shares of
restricted Common Stock of the Company granted to you pursuant to the 2002
Recognition and Retention Plan and Trust Agreement ("Recognition Plan") and
held in the Trust will be voted.
Enclosed with this letter is the Proxy Statement, which describes the
matters to be voted upon, the Annual Report to Stockholders and a voting
instruction ballot, which will permit you to vote the restricted shares
granted to you. After you have reviewed the Proxy Statement, we urge you to
vote your restricted shares held pursuant to the Recognition Plan by marking,
dating, signing and returning the enclosed voting instruction ballot to the
administrators of the Recognition Plan. The Plan Administrators will certify
the totals to the Trustees of the Recognition Plan for the purpose of having
those shares voted by the Trustees.
We urge each of you to vote, as a means of participating in the
governance of the affairs of the Company. If your voting instructions for the
shares held in the Recognition Plan are not received, the shares will not be
voted. While I hope that you will vote in the manner recommended by the Board
of Directors, the most important thing is that you vote in whatever manner you
deem appropriate. Please take a moment to do so.
Please note that the enclosed material relates only to those shares
which have been granted to you under the Recognition Plan. You have already
received other voting material for those shares owned by you individually and
not under the Recognition Plan.
Sincerely,
/s/ Mel E. Green
Mel E. Green
President and Chief Executive Officer
RECOGNITION PLAN VOTING INSTRUCTION BALLOT
PFS BANCORP, INC.
The undersigned hereby instructs the Trustees of the 2002 Recognition
and Retention Plan and Trust ("Recognition Plan") of PFS Bancorp, Inc. (the
"Company") to vote, as designated below, all the shares of Common Stock of the
Company granted pursuant to the Recognition Plan to the undersigned as of
March 21, 2003 at the Annual Meeting of Shareholders to be held at the main
office of the Company, located at Second and Bridgeway Streets, Aurora,
Indiana on Thursday, May 1, 2003, at 3:00 p.m., Eastern Daylight Savings Time,
and any adjournment thereof.
1. THE ELECTION AS DIRECTORS OF ALL NOMINEES LISTED
[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT
Nominees for three-year term expiring in 2006: Gilbert L. Houze and Jack D.
Tandy.
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. PROPOSAL TO RATIFY THE APPOINTMENT by the Board of Directors of Grant
Thorton LLP as the Company's independent auditors for the fiscal year ending
December 31, 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Trustees are authorized to vote upon such other
business as may properly come before the meeting.
The Company's Board of Directors recommends a vote FOR the Board's
nominees for director and FOR Proposal 2. Such votes are hereby solicited by
the Company's Board of Directors.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE BALLOT TO THE PLAN
ADMINISTRATOR.
Please be sure to sign and date Date
this Proxy in the box below.
______________________________________________________________________
___ Stockholder sign above _________ Co-holder (if any) sign above ___
If you return this card properly signed but you do not otherwise
specify, shares will be voted for the Board of Directors' nominees for
director and for Proposal 2. If you do not return this card, your shares will
not be voted.