UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _____)
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
PFS Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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[PFS Bancorp, Inc. Logo]
April 7, 2005
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
PFS Bancorp, Inc. The meeting will be held at our main office located at Second
and Bridgeway Streets, Aurora, Indiana, on Thursday, May 5, 2005 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
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 5, 2005
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Our Annual Meeting of Stockholders will be held at the main office of PFS
Bancorp located at Second and Bridgeway Streets, Aurora, Indiana, on Thursday,
May 5, 2005 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 2008, and
until their successors are elected and qualified;
(2) To ratify the appointment by the Audit Committee of the board of
directors of Grant Thornton LLP as our independent auditors for the
fiscal year ending December 31, 2005; 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.
You are entitled to notice of and to vote at the Annual Meeting and at any
adjournment thereof if you were a stockholder of record as of the close of
business on March 24, 2005, the voting record date.
By Order of the Board of Directors
/s/ Mel E. Green
Mel E. Green
President and Chief Executive Officer
Aurora, Indiana
April 7, 2005
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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
card 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.
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TABLE OF CONTENTS
Page
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About the Annual Meeting of Stockholders............................................ 1
Information with Respect to Nominees for Director, Continuing Directors and
Executive Officers........................................................... 3
Election of Directors......................................................... 3
Directors Whose Terms Are Continuing.......................................... 4
Executive Officers Who Are Not Directors...................................... 5
Director Nominations; Committees and Meetings of the Board of Directors
of PFS Bancorp.............................................................. 5
Compensation Committee Interlocks and Insider Participation................... 7
Compensation of Directors..................................................... 7
Code of Ethics for Directors, Executive Officers and Financial Professionals.. 7
Beneficial Ownership of Common Stock by Certain Beneficial Owners and Management 8
Section 16(a) Beneficial Ownership Reporting Compliance....................... 9
Executive Compensation.............................................................. 10
Summary Compensation Table.................................................... 10
Deferred Compensation Plan.................................................... 10
Stock Options................................................................. 11
Indebtedness of Management and Related Party Transactions..................... 11
Report of the Compensation Committee................................................ 12
Ratification of Appointment of Auditors............................................. 13
Audit Fees.................................................................... 13
Report of the Audit Committee....................................................... 14
Stockholder Proposals, Nominations and Communications with the Board of Directors 15
Annual Reports...................................................................... 16
Other Matters....................................................................... 16
Appendix A - Amended and Restated Audit Committee Charter........................... A-1
PFS BANCORP, INC.
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PROXY STATEMENT
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ABOUT THE ANNUAL MEETING OF STOCKHOLDERS
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This Proxy Statement is furnished to holders of common stock of PFS
Bancorp, Inc., the parent holding company of Peoples Federal Savings Bank.
Proxies are being solicited on behalf of our board of directors to be used at
the Annual Meeting of Stockholders to be held at our main office located at
Second and Bridgeway Streets, Aurora, Indiana, on Thursday, May 5, 2005 at 3:00
p.m., Eastern Daylight Savings Time, and at any adjournment thereof for the
purposes set forth in the attached Notice of Annual Meeting of Stockholders.
This proxy statement is first being mailed to stockholders on or about April 7,
2005.
What is the purpose of the Annual Meeting?
At our Annual Meeting, stockholders will act upon the matters outlined in
the notice of meeting on the cover page of this proxy statement, including the
election of directors and ratification of our independent auditors. In addition,
management will report on the performance of PFS Bancorp and respond to
questions from stockholders.
Who is entitled to vote?
Only our stockholders of record as of the close of business on the record
date for the meeting, March 24, 2005, are entitled to vote at the meeting. On
the record date, we had 1,473,728 shares of common stock issued and outstanding
and no other class of equity securities outstanding. For each issued and
outstanding share of common stock you own on the record date, you will be
entitled to one vote on each matter to be voted on at the meeting, in person or
by proxy.
How do I submit my proxy?
After you have carefully read this proxy statement, indicate on your proxy
form how you want your shares to be voted. Then sign, date and mail your proxy
form in the enclosed prepaid return envelope as soon as possible. This will
enable your shares to be represented and voted at the Annual Meeting.
If my shares are held in street name by my broker, could my broker automatically
vote my shares for me?
Yes. Your broker may vote in his or her discretion on the election of
directors and ratification of the auditors if you do not furnish instructions.
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Can I attend the meeting and vote my shares in person?
Yes. All stockholders are invited to attend the Annual Meeting.
Stockholders of record can vote in person at the Annual Meeting. If your shares
are held in "street" name, then you are not the stockholder of record and you
must ask your broker or other nominee how you can vote at the Annual Meeting.
Can I change my vote after I return my proxy card?
Yes. If you have not voted through your broker or other nominee, there are
three ways you can change your vote or revoke your proxy after you have sent in
your proxy form.
o First, you may send a written notice to the Secretary of PFS
Bancorp, Mr. Jack D. Tandy, Corporate Secretary, PFS Bancorp, Inc.,
Second and Bridgeway Streets, Aurora, Indiana 47001, stating that
you would like to revoke your proxy.
o Second, you may complete and submit a new proxy form. Any earlier
proxies will be revoked automatically.
o Third, you may attend the Annual Meeting and vote in person. Any
earlier proxy will be revoked. However, attending the Annual Meeting
without voting in person will not revoke your proxy.
If you have instructed a broker or other nominee to vote your shares, you
must follow directions you receive from your broker or other nominee to change
your vote.
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum. Proxies received but marked as abstentions and broker
non-votes will be included in the calculation of the number of votes considered
to be present at the meeting.
What are the board of directors' recommendations?
The recommendations of the board of directors are set forth under the
description of each proposal in this proxy statement. In summary, the board of
directors recommends that you vote FOR the nominees for director described
herein and FOR ratification of the appointment of Grant Thornton LLP for fiscal
2005.
The proxy solicited hereby, if properly signed and returned to us and not
revoked prior to its use, will be voted in accordance with your instructions
contained in the proxy. If no contrary instructions are given, each proxy signed
and received will be voted in the manner recommended by the board of directors
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. Proxies solicited hereby may be exercised only at the Annual Meeting
and any adjournment of the Annual Meeting and will not be used for any other
meeting.
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What vote is required to approve each item?
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. 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, but will not affect the plurality vote
required for the election of directors. The proposals to elect directors and to
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.
As a result, there will be no "broker non-votes" at this meeting. Abstentions
will have the effect of a vote against the proposal to ratify the appointment of
the independent auditors.
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INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
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Election of Directors
Our Articles of Incorporation provide that the board of directors shall be
divided into three classes as nearly equal in number as possible. The directors
are elected by our stockholders for staggered terms and until their successors
are elected and qualified.
At the Annual Meeting, you will be asked to elect one class of directors,
consisting of two directors, for a three-year term expiring in 2008, and until
their successors are elected and qualified.
No nominee for director is related to any other director or executive
officer by blood, marriage or adoption, except Messrs. Laker and Houze who are
first cousins. Each nominee currently serves as a director of PFS Bancorp and of
Peoples Federal Savings Bank. Our board of directors has determined that a
majority of our members are independent directors as defined in the Nasdaq
National Market's listing standards. The current independent members are Messrs.
Houze, Laker, Moeller, Petty and Tandy.
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 and our continuing directors. Ages are reflected as of March 24, 2005
and tenure as director includes service as a director of People Federal Savings
Bank.
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Nominees for Director for Three-Year Terms Expiring in 2008
Principal Occupation During Director
Name Age the Past Five Years Since
--------------------------- ------ ---------------------------------------------- -----------
Mel E. Green 55 President and Chief Executive Officer of the 2001
PFS Bancorp and Peoples Federal since July
2001. Previously, Managing Officer and Chief
Executive Officer of Peoples Federal since
May 1993.
Robert L. Laker 74 Chairman of the Board of PFS Bancorp and 1972
Peoples Federal. Retired since 1999.
Previously, President of Robert L. Johnston
Co., Inc., a retail furniture and appliance
store in Aurora, Indiana.
The board of directors recommends that you vote FOR election of the
nominees for director.
Directors Whose Terms Are Continuing
Directors with a Term Expiring in 2006
Principal Occupation During Director
Name Age the Past Five Years Since
--------------------------- ------ ---------------------------------------------- -----------
Gilbert L. Houze 76 Vice Chairman of the Board of PFS Bancorp 1965
and Peoples Federal. Retired. Previously,
Managing Officer and President of the Savings
Bank.
Jack D. Tandy 73 Corporate Secretary of PFS Bancorp and 1986
Assistant Secretary of Peoples Federal.
Previously, Director and non-employee Vice
President of PFS Bancorp and Peoples Federal.
Previously, owner of Tandy's Men's
Warehouse, a retail clothing store in Aurora,
Indiana.
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Directors with a Term Expiring in 2007
Principal Occupation During Director
Name Age the Past Five Years Since
--------------------------- ------ ---------------------------------------------- -----------
Dale R. Moeller 68 Owner and Operator of the Moeller 1987
Insurance Company, Aurora, Indiana.
Carl E. Petty 67 Owner and President of Aurora Lumber 1986
Company, Inc., Aurora, Indiana, a retail
lumber and building materials facility.
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 PFS Bancorp and Peoples
Federal who does not also serve as a director. Age is as of March 24, 2005.
Principal Occupation During
Name Age the Past Five Years
--------------------------- ------ -----------------------------------------------------------------
Stuart M. Suggs 47 Mr. Suggs currently serves as Corporate Treasurer, Vice
President, Chief Operating Officer and Chief Financial Officer
of PFS Bancorp and Peoples Federal since August 2004; and
prior thereto as Corporate Treasurer, Vice President and Chief
Financial Officer since October 2001. Previously, Mr. Suggs
was Vice President and Chief Financial Officer of Peoples
Federal 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.
Director Nominations; Committees and Meetings of the Board of Directors of PFS
Bancorp
The board of directors of PFS Bancorp has established a Nominating and
Corporate Governance Committee, an Audit Committee and a Compensation Committee.
During the fiscal year ended December 31, 2004, the board of directors of PFS
Bancorp met twelve times. During fiscal 2004, the board of directors held five
separate executive sessions of solely independent directors in accordance with
the listing requirements of the Nasdaq Stock Market, Inc. No director of PFS
Bancorp attended fewer than 75 percent of the aggregate total number of board
meetings and committee meetings on which he served during this period. Five of
the six members of the board attended the Annual Meeting of Stockholders in May
2004.
Nominating and Corporate Governance Committee. We established a Nominating
and Corporate Governance Committee in 2004 for the purpose of nominating
directors for election at the annual meeting. The current members of the
Nominating and Corporate Governance Committee are
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Messrs. Houze, Moeller and Petty who met once in 2005 to consider director
nominations and recommended nominees to the full board of directors. The
Nominating and Corporate Governance Committee members are independent directors,
as defined in the Nasdaq's listing standards, who rotate annually so that no
director will be in a position to recommend himself for nomination to the board
of directors.
On February 12, 2004, the Nominating and Corporate Governance Committee
adopted a written charter which was attached as Appendix A to our 2004 Annual
Meeting Proxy Statement. The Charter sets forth certain criteria the committee
may consider when recommending individuals for nomination including: ensuring
that the board of directors, as a whole, is diverse and consists of individuals
with various and relevant career experience, relevant technical skills, industry
knowledge and experience, financial expertise (including expertise that could
qualify a director as a "financial expert," as that term is defined by the rules
of the SEC), local or community ties, minimum individual qualifications,
including strength of character, mature judgment, familiarity with our business
and industry, independence of thought and an ability to work collegially. The
committee also may consider the extent to which the candidate would fill a
present need on the board of directors. In addition, our Bylaws provide that no
person 75 years of age or older is eligible for election or appointment to the
board of directors. The committee will also consider candidates for director
suggested by other directors, as well as our management and stockholders. A
stockholder who desires to recommend a prospective nominee should notify our
Corporate Secretary in writing providing supporting material the stockholder
considers appropriate.
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 PFS
Bancorp's adherence in accounting and financial reporting to generally accepted
accounting principles. The Audit Committee is comprised of Messrs. Tandy,
Moeller and Petty, who is Chairman.
All of the members of the Audit Committee are independent as determined by
our board of directors and as defined in Nasdaq's listing standards and rules
and regulations of the SEC. Although Mr. Tandy held the title of "Vice
President" while serving on the board of directors of Peoples Federal Savings
Bank from 1992 to 2001, Mr. Tandy was not an employee of Peoples Federal 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 2004. The
board of directors and the Audit Committee have adopted an amended and restated
Audit Committee charter which is attached hereto as Appendix A.
The board of directors has determined that no members of the Audit
Committee meet the requirements recently adopted by the Securities and Exchange
Commission for qualification as an audit committee financial expert. In
accordance with our Bylaws, Mr. Houze will not be eligible for re- election to
the board of directors at the next annual meeting in 2006 due to his age. We are
presently exploring means to expand the board to include an audit committee
financial expert or, alternatively, will seek to replace Mr. Houze in 2006 with
an individual who meets the definition of an audit committee financial expert.
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Compensation Committee Interlocks and Insider Participation
Compensation Committee. The Compensation Committee of PFS Bancorp consists
of Messrs. Laker, Houze, Moeller, Petty and Tandy. The Compensation Committee
reviews the compensation of PFS Bancorp's Chief Executive Officer and the other
executive officers. The Compensation Committee met three times during 2004. The
report of the Compensation Committee with respect to compensation for the Chief
Executive Officer and all other executive officers for 2004 is set forth under
"Report of the Compensation Committee." No member of the Compensation Committee
is a current or former officer or employee of PFS Bancorp or Peoples Federal,
except that Mr. Houze served as Managing Officer and President of Peoples
Federal until his retirement in 1993. All members are independent members of our
board of directors as defined in the Nasdaq's listing standards.
Compensation of Directors
Each director, except Mr. Green, receives annual fees of $15,276 for
services on the board of directors, $2,544 for service on all the committees and
payment of 80% of their health insurance premiums so long as he is absent from
no more than four meetings of the board of directors and committees on which he
served held during the applicable year. As members of Peoples Federal Savings
Bank's Loan Committee, Messrs. Laker, Houze, Tandy, Petty and Moeller also
received a fee of $50 for inspecting properties securing real estate loans due
to their extensive knowledge about local values and trends. Such payments
aggregated approximately $2,000 for each director in 2004. In addition, Messrs.
Laker, Houze and Tandy received a fee of $2,160, $1,524 and $768, respectively,
for serving as Chairman of the Board, Vice Chairman of the Board and Secretary,
respectively, of Peoples Federal Savings Bank during 2004. For the year ended
December 31, 2004, each director, other than Mr. Green, received a year-end
payment of $700.
Code of Ethics for Directors, Executive Officers and Financial Professionals
The board of directors has adopted a code of ethics for our directors,
executive officers, including the chief executive officer and the chief
financial officer, and financial professionals. Our directors and officers are
expected to adhere at all times to this code of ethics. Failure to comply with
this code of ethics is a serious offense and will result in appropriate
disciplinary action. We have posted this code of ethics on our Internet website
at www.peoplesfederalsavings.com.
We will disclose on our Internet website at www.peoplesfederalsavings.com,
to the extent and in the manner permitted by Item 5.05 of Form 8-K, the nature
of any amendment to this code of ethics (other than technical, administrative,
or other non-substantive amendments), our approval of any material departure
from a provision of this code of ethics, and our failure to take action within a
reasonable period of time regarding any material departure from a provision of
this code of ethics that has been made known to any of our executive officers.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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The following table sets forth, as of March 24, 2005, the voting record
date, certain information as to the PFS Bancorp 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, who or
which was known to us to be the beneficial owner of more than 5% of the issued
and outstanding common stock, (ii) the directors of PFS Bancorp, (iii) certain
executive officers of PFS Bancorp, and (iv) all directors and executive officers
of PFS Bancorp as a group.
Common Stock Beneficially Owned as of
March 24, 2005
---------------------------------------
Name of Beneficial Owner Amount(1) Percentage(2)
-------------------------------------------- --------------------- ---------------
PFS Bancorp, Inc. 121,670(3) 8.3%
Employee Stock Ownership Plan Trust
Second and Bridgeway Streets
Aurora, Indiana 47001
Kenneth and Joan Lehman 109,613(4) 7.4
1408 North Abingdon Street
Arlington, Virginia 22207
Directors:
Mel E. Green 34,753(3)(5)(6) 2.4
Gilbert L. Houze 19,981(5)(7) 1.4
Robert L. Laker 29,981(3)(5)(8) 2.0
Dale R. Moeller 14,981(5)(9) 1.0
Carl E. Petty 29,981(5)(10) 2.0
Jack D. Tandy 29,981(5)(11) 2.0
Executive Officer:
Stuart M. Suggs 9,483(3)(5)(12) *
All directors and executive officers of the
Company as a group (7 persons) 169,141(3)(13) 11.4
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* Represents less than 1% of our outstanding common stock.
(1) Based upon filings made pursuant to the Securities Exchange Act of 1934
and information furnished by the respective individuals. Under regulations
promulgated pursuant to the Securities Exchange Act of 1934, 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 continued on following page.)
-8-
--------------------
(2) Each beneficial owner's percentage ownership is determined by assuming
that options held by such person (but not those held by any other person)
and that are exercisable within 60 days of March 24, 2005, the voting
record date, have been exercised.
(3) The PFS Bancorp, Inc. Employee Stock Ownership Plan Trust was established
pursuant to the PFS Bancorp, Inc. Employee Stock Ownership Plan by an
agreement between PFS Bancorp and Messrs. Green, Laker and Suggs who act
as Trustees of the ESOP. As of December 31, 2004, 46,073 shares held in
the ESOP 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 ESOP Trust.
(4) The information on number of shares held is based on a Schedule 13D/A
filed on March 4, 2004 by Kenneth R. Lehman and Joan Abercrombie Lehman,
spouses, who report joint ownership of all of the shares. According to
such filing, they each share voting power and dispositive power over all
the shares.
(5) Includes for each individual 1,826 shares held in the 2002 Recognition and
Retention Plan Trust and 1,939 shares subject to stock options that are
exercisable within 60 days of March 24, 2005.
(6) Includes 4,772 shares which have been allocated to Mr. Green's account in
the ESOP.
(7) Includes 15,000 shares held jointly with Mr. Houze's spouse.
(8) Includes 15,000 shares held by Mr. Laker's spouse in trust and 10,000
shares in trust for the benefit of Mr. Laker.
(9) Includes 10,000 shares held jointly with Mr. Moeller's spouse.
(10) Includes 25,000 shares held jointly with Mr. Petty's spouse.
(11) 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.
(12) Includes 4,502 shares that have been allocated to Mr. Suggs' account in
the ESOP.
(13) Includes an aggregate of 9,274 shares of common stock held in the ESOP,
12,782 shares held in the Recognition and Retention Plan Trust and 13,573
shares subject to stock options that are exercisable within 60 days of
March 24, 2005.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than 10% of our common stock to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than 10% stockholders are required
by regulation to furnish us with copies of all Section 16(a) forms they file. We
know of no person who owns 10% or more of our common stock.
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Based solely on review of the copies of such forms furnished to us, or
written representations from our officers and directors, we believe that during,
and with respect to, 2004, our officers and directors complied in all respects
with the reporting requirements promulgated under Section 16(a).
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EXECUTIVE COMPENSATION
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Summary Compensation Table
PFS Bancorp 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 Peoples Federal for services rendered in all
capacities during the years ended December 31, 2003, 2002 and 2001 to the
President and Chief Executive Officer. No executive officers of PFS Bancorp, or
its subsidiaries, received a total annual salary and bonus during fiscal 2003 in
excess of $100,000.
Long Term Compensation
Awards
--------------------------
Annual Compensation (1) Securities
Name and -------------------------- Restricted Underlying All Other
Principal Position Year Salary Bonus Stock Options Compensation
-------------------- ------- ----------- ---------- ------------ ----------- ---------------
Mel E. Green 2004 $81,463 $ 700 $ -- -- $22,471(4)
President and Chief 2003 78,367 700 -- 9,692(3) 26,024
Executive Officer 2002 74,954 1,700 51,714(2) -- 19,312
--------------------
(1) Does not include amounts attributable to miscellaneous benefits received
by the named executive officer. In the opinion of management, the costs of
providing such benefits to the named executive officer during the years
ended December 31, 2004, 2003 and 2002 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 award vests 20% per year from
the date of grant. As of December 31, 2004, Mr. Green had 1,826 shares of
unearned restricted stock which had a fair market value of $32,265.
Dividends paid on the restricted common stock are held in the Recognition
Plan Trust and paid to the recipient when the restricted stock vests.
(3) Reflects adjustment of the number of options awarded to reflect the $5.00
return of capital in November 2004.
(4) Includes the fair market value of 1,202 shares of common stock on December
31, 2004 ($17.67), allocated to Mr. Green's ESOP account during 2004. Also
includes contributions by Peoples Federal Savings Bank to its 401(k) plan
for the benefit of Mr. Green which amounted to $1,232 during fiscal 2004.
Deferred Compensation Plan
In December 2000, Peoples Federal established an Executive Officers and
Directors Deferred Compensation Plan pursuant to which participants will be
entitled to annual payments of $17,800 for 10 years upon their retirement,
provided they have served as a director or executive officer for at least 10
years. Benefits under the deferred compensation plan will become immediately
vested upon a change-in- control of Peoples Federal. In addition to the current
directors, Mr. Suggs, who is Corporate Treasurer,
-10-
Vice President, Chief Operating Officer and Chief Financial Officer of PFS
Bancorp and Peoples Federal, participates in this plan.
Stock Options
Stock Option Repricings
The following table sets forth, with respect to the executive officer
named in the Summary Compensation Table above, information with respect to stock
options repriced during 2004.
Number of Length of
Securities Market Price Exercise Original Option
Underlying of Stock at Price at Time New Term Remaining
Options Time of of Repricing Exercise at Date of
Name Date Repriced Repricing(1) ($/Sh) Price Repricing
------------------- -------- ---------- ------------ ------------- -------- ---------------
Mel E. Green 10/14/04 9,692 $ 19.03 $ 16.85 $ 13.22 8.5 years
President and Chief
Executive
Officer
--------------------
(1) The market price was based on the closing price of PFS Bancorp's common
stock on the date of the return of capital on October 14, 2004.
Year-end Option Values
The following table sets forth, with respect to the executive officer
named in the Summary Compensation Table, information with respect to the number
of options held as of December 31, 2004 and the value with respect thereto.
Number of Securities
Underlying Unexercised Value of Unexercised
Options In The Money Options
at Year End at Year End(1)
---------------------------- -------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
-------------------------------------- ----------- ------------- ----------- -------------
Mel E. Green 1,939 7,753 $8,629 $34,501
President and Chief Executive Officer
--------------------
(1) Calculated by multiplying (i) the difference between the fair market value
of a share of the common stock underlying the options at December 31, 2004
($17.67) and the exercise price of the options and (ii) the number of
shares subject to option.
Indebtedness of Management and Related Party Transactions
In the ordinary course of business, Peoples Federal 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. Under a program available to all of our
employees, we make loans available to our directors and executive officers at
discounted rates of interest equal to Peoples Federal's average cost of funds
plus 1% as adjusted every six months. At December 31, 2004, Peoples Federal had
one loan in excess of $60,000 outstanding to Mr. Houze with a balance of
-11-
approximately $75,000 and an interest rate of 3.0%. Such loan was current in
accordance with its original terms as of December 31, 2004.
--------------------------------------------------------------------------------
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 PFS Bancorp and
Peoples Federal Savings Bank. During 2004, the members of the Compensation
Committee met three times.
The members of the Compensation Committee of both PFS Bancorp and Peoples
Federal Savings Bank are identical and no member of the Compensation Committee
is a current employee of PFS Bancorp or any subsidiary. The Compensation
Committee of PFS Bancorp has exclusive jurisdiction over the administration and
grants relating to the 2002 Stock Option Plan and 2002 Recognition and Retention
Plan. The Compensation Committee uses market studies and published compensation
data as a resource in establishing a competitive compensation program.
The Compensation 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 Peoples
Federal Savings Bank, efficiency ratios, growth, satisfactory regulatory
examinations, and market value of PFS Bancorp. The Compensation 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 PFS
Bancorp.
The Compensation Committee has sought to design a compensation program in
which a significant portion of the compensation paid to senior management
(including our President and Chief Executive Officer) be performance driven and
incentive-based. It is through this process that we are able to compete for and
retain qualified management personnel who are critical to our long-term success
while aligning the interests of those managers with the long-term interests of
our shareholders.
Members of the Compensation Committee
Gilbert L. Houze
Robert L. Laker
Dale R. Moeller
Carl E. Petty
Jack D. Tandy
-12-
--------------------------------------------------------------------------------
RATIFICATION OF APPOINTMENT OF AUDITORS
--------------------------------------------------------------------------------
The Audit Committee of the board of directors has appointed Grant Thornton
LLP, independent certified public accountants, to perform the audit of our
financial statements for the year ending December 31, 2005, and further directed
that the selection of auditors be submitted for ratification by the stockholders
at the Annual Meeting.
We have been advised by Grant Thornton LLP that neither that firm nor any
of its associates has any relationship with PFS Bancorp 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 our auditors, the
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, our
auditors performed tax-related services, including the completion of our
corporate tax returns, in 2004. The Audit Committee believes that Grant Thornton
LLP's performance of these other services is compatible with maintaining the
auditor's independence.
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, 2005.
Audit Fees
The following table sets forth the aggregate fees paid by us to Grant
Thornton LLP for professional services rendered by Grant Thornton LLP in
connection with the audit of PFS Bancorp's consolidated financial statements for
2004 and 2003, as well as the fees paid by us to Grant Thornton LLP for
audit-related services, tax services and all other services rendered by Grant
Thornton LLP to us during 2004 and 2003.
Year Ended December 31,
---------------------------
2004 2003
---------- ----------
Audit fees (1)..................... $55,685 $51,950
Audit-related fees................. -- --
Tax fees (2)....................... 4,390 4,160
All other fees (3)................. 2,500 4,825
------- -------
Total......................... $62,575 $60,935
======= =======
--------------------
(1) Audit fees consist of fees incurred in connection with the audit of our
annual financial statements and the review of the interim financial
statements included in our quarterly reports filed with the Securities and
Exchange Commission, as well as work generally only the independent
auditor can reasonably be expected to provide, such as statutory audits,
consents and assistance with and review of documents filed with the
Securities and Exchange Commission.
(Footnotes continued on following page.)
-13-
--------------------
(2) Tax fees consist primarily of fees paid in connection with preparing
federal and state income tax returns and other tax related services.
(3) For 2004, all other fees consisted of fees paid in connection with our
special capital distribution in October 2004, and for 2003, all other fees
consisted of fees paid in connection with an information technology audit.
The Audit Committee selects our independent auditors and pre-approves all
audit services to be provided by it primarily to PFS Bancorp. The Audit
Committee also reviews and pre-approves all audit- related and non-audit related
services rendered by our independent auditors in accordance with the Audit
Committee's charter. In its review of these services and related fees and terms,
the Audit Committee considers, among other things, the possible effect of the
performance of such services on the independence of our independent auditors.
The Audit Committee pre-approves certain audit-related services and certain
non-audit related tax services which are specifically described by the Audit
Committee on an annual basis and separately approves other individual
engagements as necessary.
Each new engagement of Grant Thornton LLP was approved in advance by the
Audit Committee, and none of those engagements made use of the de minimis
exception to pre-approval contained in the Securities and Exchange Commission's
rules.
--------------------------------------------------------------------------------
REPORT OF THE AUDIT COMMITTEE
--------------------------------------------------------------------------------
In March 2005, the Audit Committee reviewed and revised its Charter in
order to ensure compliance with the Nasdaq's listing standards and submitted the
revised Charter to the full Board of Directors for approval. A copy of the
Amended and Restated Audit Committee Charter is attached as an appendix to this
proxy statement.
The Audit Committee has reviewed and discussed PFS Bancorp'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 PFS Bancorp'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 PFS Bancorp's Annual Report on
Form 10-KSB for the year ended December 31, 2004 for filing with the SEC.
Members of the Audit Committee
Dale R. Moeller
Carl E. Petty
Jack D. Tandy
-14-
--------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS, NOMINATIONS AND COMMUNICATIONS
WITH THE BOARD OF DIRECTORS
--------------------------------------------------------------------------------
Stockholder Proposals. Any proposal which a stockholder wishes to have
included in the proxy materials of PFS Bancorp relating to the next annual
meeting of stockholders must be received at our principal executive offices,
Second and Bridgeway Streets, Aurora, Indiana 47001, Attention: Corporate
Secretary, no later than December 8, 2005. If such proposal is in compliance
with all of the requirements of Rule 14a-8 under the Securities Exchange Act of
1934, 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 our proxy
materials pursuant to Rule 14a-8 may be brought before an annual meeting
pursuant to Article II, Section 12 of our Bylaws, which provides that the
stockholder must give timely notice thereof in writing to the Secretary of PFS
Bancorp (also by December 8, 2005). 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 PFS
Bancorp'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 our 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).
Stockholder Nominations. Article III, Section 14 of our 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 in connection with the
immediately preceding annual meeting of our stockholders. For this Annual
Meeting, such notice must have been received no later than the close of business
on December 9, 2004. We did not receive any such nominations.
The board of directors or our nominating committee 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.
Stockholder Communications. Our board of directors has adopted a formal
process by which stockholders may communicate with the board. Stockholders who
wish to communicate with the board may do so by sending written communications
addressed to the board of directors of PFS Bancorp, Inc., c/o Jack D. Tandy,
Corporate Secretary, at Second and Bridgeway Streets, Aurora, Indiana 47001.
-15-
--------------------------------------------------------------------------------
ANNUAL REPORTS
--------------------------------------------------------------------------------
A copy of PFS Bancorp's Annual Report to Stockholders for the year ended
December 31, 2004 accompanies this Proxy Statement. Such Annual Report is not
part of the proxy solicitation materials.
Upon receipt of a written request, we will furnish to any stockholder
without charge a copy of our Annual Report on Form 10-KSB (without exhibits) for
2004 required to be filed with the SEC. In addition, upon written request, we
will furnish copies of the exhibits to the Annual Report on Form 10-KSB for a
fee that covers our 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 PFS Bancorp. We
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 our common stock. In addition to solicitations by mail, our
directors, officers and employees may solicit proxies personally or by telephone
without additional compensation.
-16-
Appendix A
PFS BANCORP, INC.
AUDIT COMMITTEE CHARTER
The Board of Directors of PFS Bancorp, Inc. (the "Company") has
constituted and established an Audit Committee (the "Committee") with authority,
responsibility, and specific duties as described in this Audit Committee
Charter.
A. Composition
The Committee shall consist of three or more directors, each of whom is
independent, as such term is defined in the rules of the SEC and the Nasdaq
Stock Market (the "Nasdaq"), free from any relationship that, in the opinion of
the Board of Directors, as evidenced by its annual selection of such Committee
members, would interfere with the exercise of independent judgment as a
Committee member. Each Committee member must also be able to read and understand
fundamental financial statements (including the Company's balance sheet, income
statement and cash flow statement). Furthermore, at least one Committee member
must have past employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable experience
resulting in financial sophistication (including having been a chief executive
officer, chief financial officer or other senior officer with financial
oversight responsibilities). These requirements are intended to satisfy the
Nasdaq listing requirements relating to the composition of audit committees, and
shall be construed accordingly.
B. Mission Statement and Principal Functions
The Committee shall have access to all records of the Company, shall
perform the following functions, and shall have and may exercise such powers as
are appropriate to its purpose. The Committee shall:
(1) Understand the accounting policies used by the Company for financial
reporting and tax purposes and approve their application; it shall also
consider any significant changes in accounting policies that are proposed
by management or required by regulatory or professional authorities.
(2) Review the Company's audited financial statements and related
footnotes and the "Management's Discussion and Analysis" portion of the
annual report on Form 10-KSB prior to the filing of such report, and
recommend to the Board of Directors whether such financial statements
shall be included in the Company's annual report on Form 10-KSB, based
upon the Committee's review and discussions with the outside auditors.
(3) Ensure that the outside auditors review the Company's interim
financial statements before the Company files its quarterly report on Form
10-QSB with the SEC.
(4) Study the format and timeliness of financial reports presented to the
public or used internally and, when indicated, recommend changes for
appropriate consideration by management.
(5) Meet with the Company's legal counsel to review legal matters that may
have a significant impact on the Company or its financial reports.
A-1
(6) Ensure that management has been diligent and prudent in establishing
accounting provisions for probable losses or doubtful values and in making
appropriate disclosures of significant financial conditions or events.
(7) Review press releases submitted by management in connection with the
release of quarterly, annual, or special financial statements and
recommend to the Chairman of the Board any changes that appear necessary
to conform releases with appropriate professional practice.
(8) Review and reassess the adequacy of this Charter annually.
Independent Accountants
(9) Affirm an understanding with the outside auditors that the Committee
as a committee of the Board of Directors has the ultimate authority and
responsibility to select, compensate, evaluate and, where appropriate,
replace the outside auditors (including resolving disagreements between
management and the outside auditor regarding financial reporting).
(10) Ensure that the outside auditors submit to the Committee written
disclosures and the letter from the auditors required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and discuss with the auditors the auditors' independence.
(11) Maintain an active dialogue with the outside auditors regarding any
disclosed relationships or services that could affect the objectivity and
independence of the outside auditors, and be responsible for taking, or
recommending that the Board of Directors take, appropriate action to
oversee the outside auditors' independence.
(12) Discuss with the outside auditors the matters required to be
discussed by Statement on Standards ("SAS") No. 61 (Communication with
Audit Committees) and SAS No. 90 (Audit Committee Communications).
(13) With the Chief Financial Officer, review the general scope of the
annual outside audit, approve the extent and nature of such activity, and
agree upon the general level of the related fees.
(14) Consider any significant non-audit assignments given to the outside
auditors and judge their impact upon the general independence of the
outside auditors as they perform the annual audit.
(15) Maintain independent contact with the senior personnel of the outside
auditors and communicate freely and openly with them regarding financial
developments.
Internal Audit Program
(16) Cause to be maintained an appropriate internal audit program covering
the Company and all its subsidiaries by internal auditors who report to
the Committee and the Board of Directors.
(17) The Accounting Department shall report at least annually to the
Committee regarding the financial budget and audit schedules and the
adequacy thereof.
A-2
(18) Review the scope and coordination efforts of the joint
internal/external audit program with both internal and external auditors.
(19) Review reports of any embezzlement and other reportable incidents
related to the Company's financial statement or financial reporting and
supervise and direct any special projects or investigations considered
necessary by the Committee.
(20) Review reports of the internal auditors and reports of financial
examinations made by regulatory agencies and management's response to
them, evaluate the reports in regard to control and/or compliance
implications and determine whether appropriate corrective action has been
implemented.
Regulatory Compliance
(21) Cause to be maintained an appropriate regulatory compliance program
covering the Company and its subsidiaries to aid compliance with the laws
and regulations applicable to financial institutions.
(22) Review reports of the compliance officer covering the scope and
adequacy of the compliance program, the degree of compliance and
cooperation, and the implementation of corrective actions (if necessary or
appropriate.)
(23) Receive reports on Peoples Federal Savings Bank's (the "Bank")
compliance with Section 112 of the Federal Deposit Insurance Corporation
Improvement Act and review the basis for the reports issued under the rule
with management and the Bank's independent public accountant.
Internal Controls and Procedures
(24) Review periodically the scope and implications of the Company's
internal financial controls and procedures and consider their adequacy.
(25) Maintain direct access to the senior Bank staff. If useful, require
that studies be initiated on subjects of special interest to the
Committee.
(26) Review the comments on internal control submitted by the outside and
internal auditors and insure that appropriate suggestions for improvement
are promptly considered for inclusion into the Company's internal
financial procedures.
Special Duties
(27) If requested by the Chairman of the Board, make special studies of
matters related to the financial operations of the Company or to
allegations of managerial misconduct by its executives.
C. Meetings
Meetings of the Committee will be held annually after completion of the
financial audit and prior to the filing of the annual report on Form 10-KSB .
A-3
Meetings shall also be held at such other times as shall be required by
the Chairman of the Board or the Committee. Meetings may be called by the
Chairman of the Committee and/or management of the Company. All meetings of the
Committee shall be held pursuant to the Bylaws of the Company with regard to
notice and waiver thereof. Written minutes pertaining to each meeting shall be
filed with the Secretary and an oral report shall be presented by the Committee
at each Board meeting.
At the invitation of the Chairman of the Committee, the meetings shall be
attended by the Chief Executive Officer, the Chief Operating Officer/Chief
Financial Officer, the representatives of the independent accounting firm, and
such other persons whose attendance is appropriate to the matters under
consideration.
Adopted by Audit Committee
as of March 29, 2005
Approved by the Board of Directors
as of March 31, 2005
A-4
|X| PLEASE MARK VOTES AS REVOCABLE PROXY
IN THIS EXAMPLE
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. as of March 24,
2005, hereby authorizes the Board of Directors or any successors thereto as
proxies with full powers of substitution, to represent the undersigned at the
Annual Meeting of Stockholders to be held at PFS Bancorp's main office, located
at Second and Bridgeway Streets, Aurora, Indiana, on Thursday, May 5, 2005 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 2008:
Mel E. Green and Robert L. Laker.
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 Audit Committee of Grant
Thornton LLP as PFS Bancorp's independent auditors for the year ending
December 31, 2005.
|_| 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 PFS Bancorp'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 5, 2005, 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 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.
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
ESOP VOTING INSTRUCTION CARD
|X| PLEASE MARK VOTES AS PFS BANCORP, INC.
IN THIS EXAMPLE
The undersigned hereby instructs the Trustees of the 1. ELECTION AS DIRECTORS of all nominees listed:
Employee Stock Ownership Plan of PFS Bancorp, Inc. to
vote, as designated, all the shares of Common Stock For All
allocated to my account pursuant to the ESOP as of March For Withhold Except
24, 2005 at the Annual Meeting of Stockholders to be held at |_| |_| |_|
the main office of PFS Bancorp, located at Second and
Bridgeway Streets, Aurora, Indiana on Thursday, May 5, Nominees for three-year term expiring in 2008:
2005, at 3:00 p.m., Eastern Daylight Savings Time, and any Mel E. Green and Robert L. Laker.
adjournment thereof.
Instruction: To withhold authority to vote for any
individual nominee, mark "For All Except" and write
E that nominee's name in the space provided below.
S
O ____________________________________________
P
--------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT by the Audit
Committee of Grant Thorton LLP as PFS Bancorp's
independent auditors for the fiscal year ending
December 31, 2005.
For Against Abstain
|_| |_| |_|
--------------------------------------------------------------------
3. In their discretion, the Trustees are authorized to
vote upon such other business as may properly come
before the meeting.
---------------------
Please be sure to sign and date Date
this Card in the boxes as indicated.
--------------------------------------------------------------------
Participant sign above
--------- ------------------------------
The board of directors recommends a vote FOR the board's nominees for
director and FOR Proposal 2. Such votes are hereby solicited by PFS Bancorp's
board of directors.
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.
--------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN
THE CARD TO THE PLAN ADMINISTRATOR.
--------------------------------------------------------------------------------
[PFS Bancorp, Inc. Letterhead]
April 7, 2005
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
Stockholders of PFS Bancorp, Inc. We hope you will take advantage of the
opportunity to direct the manner in which shares of Common Stock allocated to
your account pursuant to the Employee Stock Ownership Plan 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 card, 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 card 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 PFS Bancorp. 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 PFS Bancorp
Common Stock outside of the ESOP, you should receive 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
RECOGNITION PLAN VOTING INSTRUCTION CARD
|X| PLEASE MARK VOTES AS PFS BANCORP, INC.
IN THIS EXAMPLE
The undersigned hereby instructs the Trustees of the 2002 1. ELECTION AS DIRECTORS of all nominees listed:
Recognition and Retention Plan and Trust of PFS Bancorp,
Inc. to vote, as designated, all the shares of Common Stock For All
granted pursuant to the Recognition Plan to the undersigned For Withhold Except
as of March 24, 2005 at the Annual Meeting of Stockholders |_| |_| |_|
to be held at the main office of PFS Bancorp, located at
Second and Bridgeway Streets, Aurora, Indiana on Thursday, Nominees for three-year term expiring in 2008:
May 5, 2005, at 3:00 p.m., Eastern Daylight Savings Time, Mel E Green and Robert L. Laker.
and any adjournment thereof.
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.
R
------------------------------------------------------------- R ______________________________________________________
P
2. PROPOSAL TO RATIFY THE APPOINTMENT by the Audit
Committee of Grant Thorton LLP as PFS Bancorp's
independent auditors for the fiscal year ending
December 31, 2005.
For Against Abstain
|_| |_| |_|
------------------------------------------------------------
3. In their discretion, the Trustees are authorized to
vote upon such other business as may properly come
before the meeting.
------------------
Please be sure to sign and date Date
this Card in the boxes as indicated.
-------------------------------------------------------------------
Participant sign above
--------- -------------------------
The board of directors recommends a vote FOR the board's nominees for
director and FOR Proposal 2. Such votes are hereby solicited by PFS Bancorp's
board of directors.
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.
--------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN
THE CARD TO THE PLAN ADMINISTRATOR.
--------------------------------------------------------------------------------
[PFS Bancorp, Inc. Letterhead]
April 7, 2005
To: Persons Granted Restricted Stock Under PFS Bancorp'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
Stockholders of PFS Bancorp, Inc. We hope you will take advantage of the
opportunity to direct the manner in which shares of restricted Common Stock
granted to you pursuant to the 2002 Recognition and Retention Plan and Trust
Agreement 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 card, 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 card 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 PFS Bancorp. 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 should receive 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