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. _____)
Filed by the Registrant [X]
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.
______________________________________________________________________________
(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):
______________________________________________________________________________
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______________________________________________________________________________
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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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(4) Date filed:
______________________________________________________________________________
[PFS Bancorp, Inc. Logo]
April 8, 2004
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 6, 2004 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 6, 2004
_______________
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 6, 2004 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 2007, 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, 2004; 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 26, 2004, 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 8, 2004
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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 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
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 . . . . . . . . . . . . 4
Stockholder Nominations. . . . . . . . . . . . . . . . . . . . . 5
Director Nominations; Committees and Meetings of the Board of
Directors of PFS Bancorp. . . . . . . . . . . . . . . . . . . . 5
Compensation Committee Interlocks and Insider Participation. . . 6
Compensation of Directors. . . . . . . . . . . . . . . . . . . . 6
Code of Ethics for Directors, Executive Officers and Financial
Professionals. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Beneficial Ownership of Common Stock by Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 16(a) Beneficial Ownership Reporting Compliance. . . . . 8
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 9
Summary Compensation Table . . . . . . . . . . . . . . . . . . . 9
Deferred Compensation Plan . . . . . . . . . . . . . . . . . . . 9
Stock Options. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indebtedness of Management and Related Party Transactions. . . . 10
Report of the Compensation Committee . . . . . . . . . . . . . . . 11
Ratification of Appointment of Auditors. . . . . . . . . . . . . . 11
Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Report of the Audit Committee. . . . . . . . . . . . . . . . . . . 13
Stockholder Proposals and Stockholder Communications with the
Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . 13
Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Appendix A - Nominating and Corporate Governance Committee Charter A-1
PFS BANCORP, INC.
_______________
PROXY STATEMENT
_______________
ANNUAL MEETING OF STOCKHOLDERS
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 6, 2004 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 8, 2004.
______________________________________________________________________________
ABOUT THE ANNUAL MEETING OF STOCKHOLDERS
______________________________________________________________________________
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 26, 2004, 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.
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.
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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.
* 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.
* Second, you may complete and submit a new proxy form. Any earlier
proxies will be revoked automatically.
* 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 2004.
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.
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
______________________________________________________________________________
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
2007, 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 26,
2004 and tenure as director includes service as a director of People Federal
Savings Bank.
Nominees for Director for Three-Year Terms Expiring in 2007
Principal Occupation During Director
Name Age the Past Five Years Since
---- --- ------------------------------------ --------
Dale R. Moeller 67 Owner and Operator of the Moeller 1987
Insurance Company, Aurora, Indiana.
Carl E. Petty 66 Owner and President of Aurora Lumber 1986
Company, Inc., Aurora, Indiana, a
retail lumber and building materials
facility.
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 2005
Principal Occupation During Director
Name Age the Past Five Years Since
---- --- ------------------------------------ --------
Mel E. Green 54 President and Chief Executive Officer 2001
of the PFS Bancorp and Peoples Federal
since July 2001. Previously, Managing
Officer and Chief Executive Officer of
Peoples Federal since May 1993.
Robert L. Laker 73 Chairman of the Board of PFS Bancorp 1972
and Peoples Federal. Retired since 1999.
Previously, President of Robert L.
Johnston Co., Inc., a retail furniture
and appliance store in Aurora, Indiana.
Directors with a Term Expiring in 2006
Principal Occupation During Director
Name Age the Past Five Years Since
---- --- ------------------------------------ --------
Gilbert L. Houze 75 Vice Chairman of the Board of PFS 1965
Bancorp and Peoples Federal. Retired.
Previously, Managing Officer and
President of the Savings Bank.
Jack D. Tandy 72 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.
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 serve as a director. Age is as of March 26, 2004.
Principal Occupation During
Name Age the Past Five Years
---- --- ------------------------------------
Stuart M. Suggs 46 Mr. Suggs currently serves as Corporate Treasurer,
Vice President and Chief Financial Officer of PFS
Bancorp and Peoples Federal. 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.
4
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
6, 2003. 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.
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, 2003, the board of
directors of PFS Bancorp met eight times. During fiscal 2004, the board of
directors intends to hold 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. All of the members of the board attended the
Annual Meeting of Stockholders in May 2003.
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 Messrs. Houze and
Laker who met once in 2004 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 is attached hereto as Appendix A. 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 nomination 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
5
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 2003.
On July 12, 2001, the board of directors adopted an audit committee charter
which was attached as Appendix A to PFS Bancorp's proxy statement for the
2002 Annual Meeting of Stockholders.
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 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.
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 two 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
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 2003. 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
2003. For the year ended December 31, 2003, 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 10 of Form 8-K under Section
13 of the Exchange Act, 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
6
time regarding any material departure from a provision of this code of ethics
that has been made known to any of our executive officers.
______________________________________________________________________________
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
______________________________________________________________________________
The following table sets forth, as of March 26, 2004, 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 12, 2004 (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 109,613(3) 7.4
1408 North Abingdon Street
Arlington, Virginia 22207
Directors:
Mel E. Green 31,612(2)(4)(5) 2.1
Gilbert L. Houze 18,042(4)(6) 1.2
Robert L. Laker 28,042(2)(4)(7) 1.9
Dale R. Moeller 13,042(4)(8) *
Carl E. Petty 28,042(4)(9) 1.9
Jack D. Tandy 28,042(4)(10) 1.9
Executive Officer:
Stuart M. Suggs 6,364(2)(4)(11) *
All directors and executive officers of the
Company as a group (7 persons) 153,186(2)(12) 10.4
____________________
* 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 continue on following page)
7
____________________
(2) 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, 2003, 35,038
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.
(3) 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.
(4) Includes 2,434 shares held in the 2002 Recognition and Retention Plan
Trust.
(5) Includes 3,570 shares which have been allocated to Mr. Green's account
in the ESOP.
(6) Includes 15,000 shares held jointly with Mr. Houze's spouse.
(7) Includes 15,000 shares held by Mr. Laker's spouse in trust and 10,000
shares in trust for the benefit of Mr. Laker.
(8) Includes 10,000 shares held jointly with Mr. Moeller's spouse.
(9) Includes 25,000 shares held jointly with Mr. Petty's spouse.
(10) 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.
(11) Includes 3,322 shares that have been allocated to Mr. Suggs' account in
the ESOP.
(12) Includes an aggregate of 6,892 shares of common stock held in the ESOP
and 17,038 shares held in the Recognition and Retention Plan Trust.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
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.
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, 2003, our officers and directors complied in all
respects with the reporting requirements promulgated under Section 16(a).
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______________________________________________________________________________
EXECUTIVE COMPENSATION
______________________________________________________________________________
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 2003 $78,367 $ 700 $ -- 7,604 $26,024(3)
President and Chief 2002 74,954 1,700 51,714(2) -- 19,312
Executive Officer 2001 70,354 2,700 -- -- 16,445
____________________
(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, 2003, 2002 and 2001 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, 2003, Mr. Green had 2,434 shares
of unearned restricted stock which had a fair market value of $47,828.
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) Includes the fair market value of 1,264 shares of common stock on
December 31, 2003 ($19.65), allocated to Mr. Green's ESOP account during
2003. Also includes contributions by Peoples Federal Savings Bank to
its 401(k) plan for the benefit of Mr. Green which amounted to $1,186
during fiscal 2003.
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 $17,800 for 10 years upon their retirement,
provided they have served as a director or executive officer for at least 10
years. Benefits under the deferred compensation plan will become immediately
vested upon a change-in-control of Peoples Federal. In addition to the
current directors, Mr. Suggs, who is Corporate Treasurer, Vice President and
Chief Financial Officer of PFS Bancorp and Peoples Federal, participates in
this plan.
9
Stock Options
Stock Option Grants During 2003
The following table sets forth, with respect to the executive officer
named in the Summary Compensation Table above, information with respect to
stock options granted during 2003.
Individual Grants Potential Realizable Value
---------------------------------------------------------------------- at Assumed Annual Rates of
Number of Percent of Total Stock Price Appreciation for
Securities Options Granted Exercise Option Term(2)
Underlying to Employees in Price Expiration ----------------------------
Name Options Granted Fiscal Year ($/Sh)(1) Date 5% 10%
---- --------------- ---------------- --------- ---------- ------------ ------------ ---
Mel E. Green 7,604 31.4% $16.85 6/19/13 $80,579 $204,202
____________________
(1) The exercise price was based on the market price of PFS Bancorp's common
stock on the date of the grant.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed rates of stock price appreciation of 5% and
10% compounded annually from the date the respective options were
granted to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other
expenses associated with the exercise of the option or the sale of the
underlying shares. The actual gains, if any, on the exercise of stock
options will depend, in part, on the future performance of the common
stock, the option holder's continued employment throughout the option
period, and the date on which the options are exercised.
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, 2003 and the value with respect
thereto.
Number of Securities Value of Unexercised
Underlying Unexercised in the Money Options
Options at Year-End at Year End(1)
-------------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- -------------- ---------------- ----------- -------------
Mel E. Green -- 7,604 $ -- $21,291
____________________
(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, 2003 ($19.65) 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. At December 31, 2003,
Peoples Federal had three loans outstanding to our directors and executive
officers, or members of their immediate families. The two loans to Mr. Green
and one loan to Mr. Houze were made pursuant to a program available to all
employees of Peoples Federal. Mr. Green has a mortgage loan and a home equity
line of credit and Mr. Houze has a mortgage loan, all of which have discounted
rates of interest equal to Peoples Federal's average cost of funds plus 1% as
adjusted every six months. At
10
December 31, 2003 such loans amounted to $31,900, $32,889 and $80,919 and had
interest rates of 3.0%, 2.875% and 3.375%, respectively. Such loans were
current in accordance with their original terms as of December 31, 2003.
______________________________________________________________________________
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 2003, the members of the
Compensation Committee met two 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
______________________________________________________________________________
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, 2004, 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.
11
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 2003. 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, 2004.
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 2003 and 2002, 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 2003 and 2002.
Year Ended December 31,
-----------------------
2003 2002
----------- ----------
Audit fees (1) . . . . . . . . . . . . . . $51,950 $52,650
Audit-related fees . . . . . . . . . . . . -- --
Tax fees (2) . . . . . . . . . . . . . . . 4,160 3,000
All other fees (3) . . . . . . . . . . . . 4,825 1,175
------ ------
Total . . . . . . . . . . . . . . . . $60,935 $56,825
====== ======
____________________
(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.
(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 2003, all other fees consisted of fees paid in connection with an
information technology audit. For 2002, all other fees related to
services provided in connection with an analysis of the financial effect
of the Recognition and Retention Plan.
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.
12
______________________________________________________________________________
REPORT OF THE AUDIT COMMITTEE
______________________________________________________________________________
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, 2003
for filing with the SEC.
Members of the Audit Committee
Dale R. Moeller
Carl E. Petty
Jack D. Tandy
______________________________________________________________________________
STOCKHOLDER PROPOSALS AND STOCKHOLDER COMMUNICATIONS
WITH THE BOARD OF DIRECTORS
______________________________________________________________________________
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 9, 2004. 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 9, 2004). 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).
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.
13
______________________________________________________________________________
ANNUAL REPORTS
______________________________________________________________________________
A copy of PFS Bancorp's Annual Report to Stockholders for the year ended
December 31, 2003 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 2003 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.
14
Appendix A
PFS BANCORP, INC.
CHARTER OF NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
OF THE BOARD OF DIRECTORS
I. Purpose
The Nominating and Corporate Governance Committee (the "Committee") is
appointed by the Board of Directors (the "Board") of PFS Bancorp, Inc. (the
"Company") to assist the Board in fulfilling its oversight responsibility. The
primary duties and responsibilities of the Committee are to:
* identify and recommend to the full Board the selection of
qualified individuals to serve as Board members and recommend to
the full Board director nominees for each Annual Meeting of
Shareholders;
* develop corporate governance principles applicable to the Company
and to govern the conduct of the Board and its members; and
* review nominations for director submitted by shareholders pursuant
to Section 14 of the Company's Bylaws.
The Committee has the authority to access any consultant of the Company
to aid it in its responsibilities. The Committee has the authority and ability
to retain, compensate and terminate, at the Company's expense, any search firm
used to identify director candidates as is necessary to undertake its
responsibilities.
II. Compensation and Meetings
Members of the Committee, as well as other committees of the Board, must
meet applicable Nasdaq National Market listing standards and other statutory
or regulatory requirements relative to director independence. The Committee
must have two or more directors as determined by the Board, each of whom must
be independent, non-employee directors, free from any relationship that would
interfere with the exercise of its members' equitable judgment.
Non-independent directors may attend Committee meetings and assist the
Committee in establishing its meeting agendas. Compensation for service on the
Committee will be established by the full Board based on the recommendations
of the Compensation Committee.
Members of the Committee, as well as other committees of the Board, are
appointed by the Board of Directors at its Annual Meeting. Each committee of
the Board will select the chair of such committee.
The Committee shall establish its own schedule for meetings throughout
the year. The Committee Chair must approve an agenda in advance of each
meeting. If the Chair is not present, the members of the Committee may
designate a Chair by a majority vote of those present. The Committee shall
meet in executive session annually to review the performance of the Board
and/or to discuss any other matters that it believes should be discussed
without management present and will present a report to the Board.
The Committee shall report to the Board of Directors. The Committee
shall have authority to delegate any of its responsibilities to subcommittees
as it may deem appropriate in its sole discretion and to retain, terminate and
obtain advice, reports or opinions from search firms or other internal or
outside advisors and legal counsel in the performance of its responsibilities,
and shall have the sole authority to approve related fees and retention terms.
A-1
III. Goals, Responsibilities and Duties
The Committee shall establish criteria for the selection of new
directors to serve on the Board of Directors.
A. Recommend Qualified Individuals for Board membership
* Review individual qualifications for service of individuals
on the full Board;
* Recommend to the Board individuals for Board membership;
* Review shareholder submitted nominees for election of
directors at the Annual Meeting of Shareholders; and
* Recommend to the Board nominees for election of directors at
the Annual Meeting of Shareholders.
In identifying candidates for membership on the Board of Directors, the
Committee shall take into account all factors it considers appropriate, which
may include (a) 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 and (b) minimum individual qualifications, including strength of
character, mature judgment, familiarity with the Company's 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.
B. Committee Membership and Qualifications
* Recommend to the full Board the establishment of Board
committees and subcommittees, as necessary, at the Annual
Meeting of the Board and at other times during the year, if
necessary;
* Recommend to the full Board the membership and composition
of each of the Board committees and sub-committees and
recommend removal of any committee member, if necessary; and
* Review qualifications of Directors for committee membership.
C. Develop and Oversee Corporate Governance Principles
* Develop and annually review Corporate Governance Principles
for the overall governance of the Board of the Company and
its subsidiaries and keep abreast of developments with
regard to corporate governance to enable the Committee to
make recommendations to the Board in light of such
developments as may be appropriate.
D. Other
* Maintain minutes of meetings, which are circulated to the
full Board and report to the Board of Directors on a regular
basis.
A-2
[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
26, 2004, 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 6,
2004 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 2007:
Dale R. Moeller and Carl E. Petty.
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, 2004.
[ ] 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 6, 2004, 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.
___________________________________________________
___________________________________________________
___________________________________________________
ESOP VOTING INSTRUCTION BALLOT
[x] PLEASE MARK VOTES AS PFS BANCORP, INC.
IN THIS EXAMPLE
The undersigned hereby instructs the Trustees of the Employee Stock
Ownership Plan of PFS Bancorp, Inc. to vote, as designated below, all the
shares of Common Stock allocated to my account pursuant to the ESOP as of
March 26, 2004 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 6, 2004, at 3:00 p.m., Eastern Daylight Savings Time,
and any adjournment thereof.
ESOP
1. ELECTION AS DIRECTORS of all nominees listed:
For All
For Withhold Except
[ ] [ ] [ ]
Nominees for three-year term expiring in 2007: Dale R. Moeller and Carl
E. Petty.
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
Thorton LLP as PFS Bancorp's independent auditors for the fiscal
year ending December 31, 2004.
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 Proxy in the box below.
______________________________________________________________________
____ Stockholder sign above________ Co-holder (if any) 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 BALLOT TO THE PLAN ADMINISTRATOR.
______________________________________________________________________________
[PFS Bancorp, Inc. Letterhead]
April 8, 2004
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 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 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,
Mel E. Green
President and Chief Executive Officer
RECOGNITION PLAN VOTING INSTRUCTION BALLOT
[x] PLEASE MARK VOTES AS PFS BANCORP, INC.
IN THIS EXAMPLE
The undersigned hereby instructs the Trustees of the 2002 Recognition and
Retention Plan and Trust of PFS Bancorp, Inc. to vote, as designated below,
all the shares of Common Stock granted pursuant to the Recognition Plan to the
undersigned as of March 26, 2004 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 6, 2004, at 3:00 p.m., Eastern Daylight
Savings Time, and any adjournment thereof.
RRP
1. ELECTION AS DIRECTORS of all nominees listed:
For All
For Withhold Except
[ ] [ ] [ ]
Nominees for three-year term expiring in 2007: Dale R. Moeller and Carl
E. Petty.
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
Thorton LLP as PFS Bancorp's independent auditors for the fiscal
year ending December 31, 2004.
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 Proxy in the box below.
______________________________________________________________________
____ Stockholder sign above________ Co-holder (if any) 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 BALLOT TO THE PLAN ADMINISTRATOR.
______________________________________________________________________________
[PFS Bancorp, Inc. Letterhead]
April 8, 2004
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 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 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,
Mel E. Green
President and Chief Executive Officer