LOGANSPORT FINANCIAL CORP.
723 East Broadway
Logansport, Indiana 46947
(574) 722-3855
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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To Be Held On April 13, 2004
Notice is hereby given that the Annual Meeting of Shareholders of
Logansport Financial Corp. (the "Holding Company") will be held at the Holding
Company's office at 723 East Broadway, Logansport, Indiana, on Tuesday, April
13, 2004, at 2:00 p.m., Eastern Standard time.
The Annual Meeting will be held for the following purposes:
1. Election of Directors. Election of two directors of the Holding
Company to serve three-year terms expiring in 2007.
2. Other Business. Such other matters as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on February 11, 2004, are
entitled to vote at the meeting or any adjournment thereof.
We urge you to read the enclosed Proxy Statement carefully so that you may
be informed about the business to come before the meeting, or any adjournment
thereof. At your earliest convenience, please sign and return the accompanying
proxy in the postage-paid envelope furnished for that purpose.
A copy of our Annual Report for the fiscal year ended December 31, 2003, is
enclosed. The Annual Report is not a part of the proxy soliciting material
enclosed with this letter.
By Order of the Board of Directors
/s/ David G. Wihebrink
David G. Wihebrink, President and
Executive Officer
Logansport, Indiana
March 11, 2004
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
LOGANSPORT FINANCIAL CORP.
723 East Broadway
Logansport, Indiana 46947
(574) 722-3855
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PROXY STATEMENT
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FOR
ANNUAL MEETING OF SHAREHOLDERS
April 13, 2004
This Proxy Statement is being furnished to the holders of common stock,
without par value (the "Common Stock"), of Logansport Financial Corp. (the
"Holding Company"), an Indiana corporation, in connection with the solicitation
of proxies by the Board of Directors of the Holding Company to be voted at the
Annual Meeting of Shareholders to be held at 2:00 p.m., Eastern Standard time,
on April 13, 2004, at the Holding Company's office at 723 East Broadway,
Logansport, Indiana, and at any adjournment of such meeting. The principal asset
of the Holding Company consists of 100% of the issued and outstanding shares of
common stock, $.01 par value per share, of Logansport Savings Bank, FSB
("Logansport Savings"). This Proxy Statement is expected to be mailed to the
shareholders on or about March 11, 2004.
The proxy solicited hereby, if properly signed and returned to the Holding
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted for each of the matters described below and, upon
the transaction of such other business as may properly come before the meeting,
in accordance with the best judgment of the persons appointed as proxies.
Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Holding Company
written notice thereof (Dottye Robeson, 723 East Broadway, Logansport, Indiana
46947), (ii) submitting a duly executed proxy bearing a later date, or (iii) by
appearing at the Annual Meeting and giving the Secretary notice of his or her
intention to vote in person. Proxies solicited hereby may be exercised only at
the Annual Meeting and any adjournment thereof and will not be used for any
other meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record at the close of business on February 11, 2004
("Voting Record Date"), will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 877,444 shares of the Common Stock issued and
outstanding, and the Holding Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the Annual Meeting. The holders of
over 50% of the outstanding shares of Common Stock as of the Voting Record Date
must be present in person or by proxy at the Annual Meeting to constitute a
quorum. In determining whether a quorum is present, shareholders who abstain,
cast broker non-votes, or withhold authority to vote on one or more director
nominees will be deemed present at the Annual Meeting.
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of February 11, 2004, by each person who is
known by the Holding Company to own beneficially 5% or more of the Common Stock.
Unless otherwise indicated, the named beneficial owner has sole voting and
dispositive power with respect to the shares.
Number of Shares of
Name and Address of Common Stock Percent of
Beneficial Owner (1) Beneficially Owned Class (2)
- ---------------------------------- ------------------------ -----------------
Bay Pond Partners, L.P. (3) 84,000 9.6%
Wellington Management Company, LLP
Wellington Hedge Management LLC
Wellington Hedge Management, Inc.
75 State Street
Boston, Massachusetts 02109
Raffles Associates, L.P. 54,300 6.2%
450 Seventh Avenue, Suite 509
New York, New York 10123
Thomas G. Williams 48,725 (4) 5.4%
4 Golfview Drive
Logansport, Indiana 46947
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(1) The information in this chart is based on Schedule 13D and 13G Reports
filed by the above-listed persons with the Securities and Exchange
Commission (the "SEC") containing information concerning shares held by
them, and information provided to the Holding Company after such filing was
made. It does not reflect any changes in those shareholdings which may have
occurred since the date of such information provided to the Holding
Company.
(2) Based upon 877,444 shares of Common Stock outstanding which does not
include options for 50,650 shares of Common Stock held by certain
directors, former directors, officers and employees of the Holding Company
and Logansport Savings.
(3) In Schedules 13G and 13D filed with the SEC, the entities listed above
indicate they may be the beneficial owners of the foregoing shares and that
70,300 shares (over 5% of the Holding Company's outstanding shares) may be
deemed to be beneficially owned by the Bay Pond Partners, L.P. ("Bay
Pond"), a Delaware limited partnership. Any shares not beneficially owned
by Bay Pond may be held by other clients of Wellington Management Company,
LLP ("WMC"), a Massachusetts limited partnership and a registered
investment adviser. WMC's clients share with WMC investment and voting
power with respect to the shares held by those clients. Bay Pond also
shares dispositive power with respect to certain shares with Wellington
Hedge Management LLC ("WHM"), a Massachusetts limited liability company,
which is the sole general partner of Bay Pond, and with Wellington Hedge
Management, Inc., a Massachusetts corporation, which is the managing member
of WHM.
(4) Includes 19,345 shares subject to a stock option granted under the
Logansport Financial Corp. Stock Option Plan (the "Option Plan").
PROPOSAL I -- ELECTION OF DIRECTORS
The Board of Directors currently consists of eight members. All of the
directors except David G. Wihebrink and Charles J. Evans meet the standards for
independence of Board members set forth in the Listing Standards for the
National Association of Securities Dealers. At the conclusion of the Annual
Meeting following the retirement of current director Thomas G. Williams, the
Board will consist of seven members. The By-Laws provide that the Board of
Directors is to be divided into three classes as nearly equal in number as
possible. The members of each class are to be elected for a term of three years
and until their successors are elected and qualified. One class of directors is
to be elected annually. The nominees for election as a director this year are
Brian J. Morrill and Susanne S. Ridlen, Ph.D., each of whom currently serves as
a director whose term will expire upon the completion of the election at the
Annual Meeting. Messrs. Morrill and Ridlen have been nominated for three-year
terms ending in 2007.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted for the election of the nominees 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 proxy holders will nominate and vote for a
replacement nominee recommended by the Board of Directors. At this time, the
Board of Directors knows of no reason why the nominees listed below may not be
able to serve as directors if elected.
The following table sets forth certain information regarding the nominees
for the position of director of the Holding Company and each other director,
including the number and percent of shares of Common Stock beneficially owned by
such persons as of the Voting Record Date. Unless otherwise indicated, each
director or nominee has sole investment and/or voting power with respect to the
shares shown as beneficially owned by him. No nominee for director or director
is related to any other nominee for director, director, or executive officer of
the Holding Company by blood, marriage, or adoption, and there are no
arrangements or understandings between any nominee and any other person pursuant
to which such nominee was selected. The table also sets forth the number of
shares of Holding Company Common Stock beneficially owned by all directors and
executive officers of the Holding Company as a group.
Director Common Stock
Director of of the Beneficially
Expiration Logansport Holding Owned as of
of Term as Savings Company February 11, Percentage
Name Director Since Since 2004 (1) of Class
- -------------------------- ---------- ----------- --------- ------------ ----------
Director Nominees
Brian J. Morrill 2007 1998 1998 2,058 (2) .2%
Susanne S. Ridlen, Ph.D. 2007 1982 1995 11,014 (3) 1.2%
Other Directors
James P. Bauer 2006 2001 2001 2,258 (4) .3%
Charles J. Evans 2005 1997 1995 33,449 (5) 3.7%
William Tincher, Jr. 2006 1994 1995 22,938 (6) 2.6%
Dr. Todd S. Weinstein 2005 2001 2001 2,058 (7) .2%
David G. Wihebrink 2005 1991 1995 13,228 (8) 1.5%
Thomas G. Williams 2004 1962 1995 48,725 (9) 5.4%
All directors and executive
officers as a group (10 persons) 148,623 (10) 16.0%
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(1) Based upon information furnished by the respective directors or director
nominees. Under applicable regulations, shares are deemed to be
beneficially owned by a person if he or she directly or indirectly has or
shares the power to vote or dispose of the shares, whether or not he or she
has any economic power with respect to the shares. Includes shares
beneficially owned by members of the immediate families of the directors or
director nominees residing in their homes.
(2) Consists of 2,058 shares held jointly by Mr. Morrill and his spouse.
(3) Includes 5,145 shares held jointly by Ms. Ridlen and her spouse and 5,869
shares subject to a stock option granted under the Option Plan.
(4) Includes 529 shares held under the Logansport Savings Bank FSB Recognition
and Retention Plan and Trust (the "RRP").
(5) Includes 12,725 shares held jointly by Mr. Evans and his spouse and 20,045
shares subject to a stock option granted under the Option Plan.
(6) Of these shares, 18,296 are held jointly by Mr. Tincher with his spouse and
children and 4,296 shares are subject to a stock option granted under the
Option Plan.
(7) Of these shares, 1,529 are held jointly by Dr. Weinstein and his spouse and
529 are held under the RRP.
(8) Of these shares, 2,993 are held by Mr. Wihebrink as custodian for his minor
children.
(9) Includes 19,345 shares subject to a stock option granted under the Option
Plan.
(10) The total of such shares includes 50,650 shares subject to stock options
granted under the Option Plan and 1,058 shares held under the RRP.
Presented below is certain information concerning the director nominees of
the Holding Company:
James P. Bauer (age 58) has served as Vice-President-Finance and Treasurer
of Materials Processing, Inc., a holding company for Small Parts, Inc., ABC
Metals, Inc. and H.T.I. (Logansport, Indiana) since 1973. He serves on the Board
of Directors of the Logansport/Cass County Industrial Park and the Logansport
Economic Development Foundation, Inc.
Charles J. Evans (age 57) became Senior Vice President of Logansport
Savings in January, 2000; theretofore he served as Vice President and Senior
Loan Officer of Logansport Savings since 1980. He also has served as Vice
President of the Holding Company since 1995.
Brian J. Morrill (age 46) has served as President of Cass County Title
Company, Inc., a title insurance company founded by him which is based in
Logansport, Indiana, since 1994; prior thereto he served as Executive Director
of Cass County Family YMCA in Logansport, Indiana.
Susanne S. Ridlen, Ph.D. (age 63) is a faculty member and Director of
Project Success Program for underprepared students at Indiana University Kokomo,
where she has been a member of the faculty since 1969. She also serves on the
Lilly Scholarship Committee for the Cass County Community Foundation in
Logansport, Indiana. In addition, she serves on the Board of Directors for the
President Benjamin Harrison Foundation, Inc. of Indianapolis, Indiana.
William Tincher, Jr. (age 64) has served as Plant Manager for the Modine
Manufacturing Company ("Modine") since 1977. Modine is located in Logansport,
Indiana, and manufactures automotive cooling systems.
Dr. Todd S. Weinstein (age 42) has been a practicing surgeon in Logansport
since 1991. He is currently a Director and Vice President of Logansport Surgical
Associates, P.C., and a member of the Logansport Memorial Hospital surgical
staff.
David G. Wihebrink (age 56), became President and Chief Executive Officer
of the Holding Company and Logansport Savings on April 12, 2000. Prior thereto,
he served as Vice President and Chief Financial Officer of T.M. Morris
Manufacturing Co., Inc. ("Morris") since 1988. Morris is located in Logansport,
Indiana, and manufactures lead wire assemblies and wiring harnesses and
stampings. Prior to his employment with Morris, Mr. Wihebrink was a member of
the accounting firm Smith, Thompson, Wihebrink & Co., Inc. (Logansport) for 15
years. Mr. Wihebrink also currently serves as a member of the Board of Directors
of the Neal Home retirement home in Logansport, Indiana, and the North Central
Indiana Workforce Investment Board, and the Logansport Cass County Chamber of
Commerce.
Thomas G. Williams (age 70) retired from his positions as President and
Chief Executive Officer of the Holding Company and of Logansport Savings on
April 11, 2000. He had served as President of Logansport Savings since 1971 and
President and Chief Executive Officer of the Holding Company since 1995. Mr.
Williams will retire from the Board at the conclusion of the Annual Meeting.
THE DIRECTORS SHALL BE ELECTED UPON RECEIPT OF A PLURALITY OF VOTES CAST AT
THE ANNUAL SHAREHOLDERS MEETING. PLURALITY MEANS THAT INDIVIDUALS WHO RECEIVE
THE LARGEST NUMBER OF VOTES CAST ARE ELECTED UP TO THE MAXIMUM NUMBER OF
DIRECTORS TO BE CHOSEN AT THE MEETING. ABSTENTIONS, BROKER NON-VOTES, AND
INSTRUCTIONS ON THE ACCOMPANYING PROXY TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR
MORE OF THE NOMINEES WILL RESULT IN THE RESPECTIVE NOMINEE RECEIVING FEWER
VOTES. HOWEVER, THE NUMBER OF VOTES OTHERWISE RECEIVED BY THE NOMINEE WILL NOT
BE REDUCED BY SUCH ACTION.
The Board of Directors and its Committees
During the fiscal year ended December 31, 2003, the Board of Directors of
the Holding Company met or acted by written consent nine times. No director
attended fewer than 75% of the aggregate total number of meetings during the
last fiscal year of the Board of Directors of the Holding Company held while he
served as director and of meetings of committees which he served during that
fiscal year. The Board of Directors of the Holding Company has an Audit
Committee, a Stock Compensation Committee and a Nominating Committee, among its
other Board Committees. All committee members are appointed by the Board of
Directors.
The Holding Company's Audit Committee recommends the appointment of the
Holding Company's independent accountants, and meets with them to outline the
scope and review the results of audits. The Audit Committee met five times
during 2003. The members of that committee are Brian J. Morrill, Susanne S.
Ridlen, William Tincher, Jr., and James P. Bauer.
The Compensation Committee administers the Option Plan, the Logansport
Savings Bank, FSB Recognition and Retention Plan and Trust, the Logansport
Financial Corporation 1999 Stock Option Plan, and determines the compensation of
the Holding Company's officers. The members of that Committee are Dr. Todd
Weinstein, William Tincher, Jr., and Brian J. Morrill. All of these Committee
members meet the standards for independence for compensation committee members
set forth in the Listing Standards of the National Association of Securities
Dealers. The Compensation Committee met one time during 2003.
The Governance and Nominating Committee selects the individuals who will
run for election to the Holding Company's Board of Directors each year. It met
one time in 2003. Its members for this year's nominations were William Tincher,
Jr., James P. Bauer and Dr. Todd Weinstein. All of these members meet the
standards for independence for nominating committee members set forth in the
Listing Standards of the National Association of Securities Dealers. The
Governance and Nominating Committee's charter is attached as Exhibit A hereto.
Although the Governance and Nominating Committee will consider nominees
recommended by shareholders, it has not actively solicited recommendations for
nominees from shareholders nor has it established procedures for this purpose,
as it will address nominations on a case by case basis. When considering a
potential candidate for membership on the Holding Company's Board of Directors,
the Governance and Nominating Committee considers relevant business and industry
experience and demonstrated character and judgment. The Governance and
Nominating Committee does not have specific minimum qualifications that must be
met by a Governance Nominating Committee-recommended candidate and there is not
a specific process for identifying such candidates. There are no differences in
the manner in which the Governance and Nominating Committee evaluates a
candidate that is recommended for nomination for membership on the Holding
Company's Board of Directors by a shareholder. The Governance and Nominating
Committee has not received any recommendations from any of the Holding Company's
shareholders in connection with the Annual Meeting.
Article III, Section 12 of the Holding Company's By-Laws provides that
shareholders entitled to vote for the election of directors may name nominees
for election to the Board of Directors but there are certain requirements that
must be satisfied in order to do so. Among other things, written notice of a
proposed nomination must be received by the Secretary of the Holding Company not
less than 90 days prior to the Annual Meeting; provided, however, that in the
event that less than 100 days' notice or public disclosure of the date of the
meeting is given or made to shareholders (which notice or public disclosure
includes the date of the Annual Meeting specified in the Holding Company's
By-Laws if the Annual Meeting is held on such date), notice must be received not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
The Holding Company has adopted a policy for its shareholders to send
written communications to the Holding Company's directors. Under this policy,
shareholders may send written communications in a letter by first-class mail
addressed to any director at the Holding Company's main office. The Holding
Company has also adopted a policy that strongly encourages its directors to
attend each Annual Meeting of Shareholders. All of the Holding Company's eight
directors attended the Annual Meeting of Shareholders held on April 8, 2003.
Management Remuneration and Related Transactions
Remuneration of Named Executive Officers
During the fiscal year ended December 31, 2003, no cash compensation was
paid directly by the Holding Company to any of its executive officers. Each of
such officers was compensated by Logansport Savings.
The following table sets forth information as to annual, long-term and
other compensation for services in all capacities to the Holding Company and its
subsidiary for each of the two fiscal years ended December 31, 2003, of the
person who served as chief executive officer of the Holding Company during the
fiscal year ended December 31, 2003, and the two other executive officers of the
Holding Company who earned over $100,000 in salary and bonuses during that
fiscal year (the "Named Executive Officers").
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards
-------------------------------------------- ------------------------
Other All
Annual Restricted Securities Other
Name and Fiscal Compen- Stock Underlying Compen-
Principal Position Year Salary ($)(1)(2) Bonus ($) sation ($)(3) Awards ($) Options (#) sation ($)
- -------------------------- ------ ---------------- --------- ------------- ---------- ----------- ----------
David G. Wihebrink 2003 $205,500(1)(2) $ 3,254 -- -- -- --
President, Chief 2002 $196,900(1)(2) $ 3,127 -- -- -- --
Executive Officer 2001 $182,200(1)(2) $ 2,885 -- -- -- --
and Director
Charles J. Evans 2003 $108,225(1) $ 1,925 -- -- -- --
Senior Vice President
Allen D. Schieber 2003 $100,125 $ 1,925 -- -- -- --
Senior Vice President
- --------------------------
(1) Includes fees received for service on the Logansport Savings Board of
Directors, including any fees deferred pursuant to deferred compensation
agreements.
(2) Includes amounts deferred each year by Mr. Wihebrink under a deferred
compensation plan for his benefit.
(3) The Named Executive Officer of the Holding Company receives certain
perquisites, but the incremental cost of providing such perquisites does
not exceed the lesser of $50,000 or 10% of the officer's salary and bonus.
Stock Options
The following table includes information relating to option exercises by
the Named Executive Officer during fiscal 2003.
Aggregate Option Exercises in Last Fiscal Year
Shares Acquired on Exercise (#) Value Realized ($)
------------------------------- ------------------
David G. Wihebrink 6,296 $49,550
Charles J. Evans 10,000 $75,336
Allen D. Schieber 2,000 $ 9,680
The following table includes the number of shares covered by stock options
held by the Named Executive Officers as of December 31, 2003. Also reported are
the values for "in-the-money" options (options whose exercise price is lower
than the market value of the shares at fiscal year end) which represent the
spread between the exercise price of any such existing stock options and the
fiscal year-end market price of the stock. David G. Wihebrink held no stock
options as of December 31, 2003.
Outstanding Stock Options and Value Realized As Of 12/31/03
Number of Unexercised Value of Unexercised In-the-Money
Options at Fiscal Year End Options at Fiscal Year End (1)
----------------------------------- ----------------------------------
Name Exercisable Unexercisable(2) Exercisable Unexercisable(2)
- ---------------------- ----------- ---------------- ----------- ----------------
Charles J. Evans 20,045 -- $209,671 --
Allen D. Schieber 500 -- $ 3,620 --
- -----------------------------
(1) Amounts reflecting gains on outstanding options are based on the closing
price per share for the shares on December 31, 2003, which was $20.99 per
share.
(2) The shares represented could not be acquired by the Named Executive
Officers as of December 31, 2003.
Employment Contracts
Logansport Savings is a party to three-year employment contracts with its
four executive officers, including the Named Executive Officers (the
"Employees"). The contracts extend annually for additional one-year terms to
maintain their three-year terms if the Board of Directors of Logansport Savings
determines to so extend them, unless notice not to extend is properly given by
either party to the contract. The Employees receive an initial salary under the
contract equal to their current salary, subject to increases approved by the
Board of Directors. The contracts also provide, among other things, for
participation in other fringe benefits and benefit plans available to Logansport
Savings' employees. The Employees may terminate their employment upon sixty
days' written notice to Logansport Savings. Logansport Savings may discharge the
Employees for cause (as defined in the contract) or without cause. If Logansport
Savings terminates the Employees' employment for other than cause or if the
Employees terminate their own employment for cause (as defined in the contract),
the Employees will receive their base compensation under the contract for an
additional three years if the termination follows a change of control in the
Holding Company (as defined below) or through the date of termination if the
termination occurs prior to a change of control. In addition, during such
period, the Employees will continue to participate in certain of Logansport
Savings' benefit plans or receive comparable benefits. Moreover, within a period
of three months after such termination following a change of control, the
Employees will have the right to cause Logansport Savings to purchase any stock
options they hold for a price equal to the fair market value (as defined in the
contract) of the shares subject to such options minus their option price. If the
payments provided for in the contract, together with any other payments made to
the Employees by Logansport Savings, are deemed to be payments in violation of
the "golden parachute" rules of the Code, such payments will be reduced to the
largest amount which would not cause Logansport Savings to lose a tax deduction
for such payments under those rules. As of the date hereof, the cash
compensation which would be paid under the contracts to the Employees if the
contracts were terminated after a change of control of the Holding Company
(without cause by Logansport Savings or for cause by the Employee) would be
$520,500 in the case of the President and Chief Executive Officer, or $1,372,971
for all four executive officers. For purposes of these employment contracts, a
change of control of the Holding Company is generally an acquisition of control,
as defined in regulations issued under the Change in Bank Control Act and the
Savings and Loan Holding Company Act.
The employment contracts provide Logansport Savings protection of its
confidential business information and protection from competition by the
Employees should they voluntarily terminate their employment without cause or be
terminated by Logansport Savings for cause.
Executive Supplemental Retirement Income Agreements.
Logansport Savings has entered into supplemental retirement agreements with
Messrs. Williams and Evans (each, an "Executive"). These agreements provide that
upon retirement after attaining age 65, assuming continuous service to
Logansport Savings until that date, the Executive is entitled to receive annual
supplemental retirement benefits in an amount equal to 40% of the highest salary
received by the Executive during any 12 month period during his term of service
with Logansport Savings, subject to a maximum benefit of $42,000 annually in the
case of Mr. Williams and $52,000 annually in the case of Mr. Evans (the "Annual
Retirement Benefit"). These benefits are payable in equal monthly installments
over a period of 180 months following retirement. Mr. Williams began receiving
retirement benefits on May 1, 2000.
Mr. Evans may elect to receive early retirement benefits upon attaining age
62, assuming continuous service to Logansport Savings until that date. Upon his
election to receive such benefits, he is entitled to receive his Annual
Retirement Benefit, reduced by 2% for each year or fraction thereof that his
early retirement date precedes his normal retirement date. These early
retirement benefit payments begin at the Executive's normal retirement date.
However, earlier payment may be requested by the Executive, subject to Board
approval. If early payment is approved by the Board of Directors, the
Executive's benefit amount is reduced to the present value using a discount rate
equal to Logansport Savings' average cost of deposits for the most recent 12
month period. If early payment is not approved by the Board, the Executive is
entitled to receive that portion of his Annual Retirement Benefit which is
required to be expensed and accrued under generally accepted accounting
principles (the "Accrued Benefit") and is vested. Mr. Evans' benefits are fully
vested.
If Mr. Evans dies prior to retirement, his beneficiary will receive an
annual survivor's benefit in an amount equal to 40% of the Executive's annual
salary at death, subject to a maximum of $52,000. The survivor's benefit is
payable in equal monthly installments over a period of 180 months. If the
Executive dies after he has begun receiving retirement benefits under his
agreement, his beneficiary will continue to receive the balance of the payments
otherwise payable to the Executive under his agreement. Upon the Executive's
death, his beneficiary also will receive a one-time lump sum death benefit in
the amount of $12,500.
If Mr. Evans becomes disabled prior to retirement, he is entitled to
receive his Accrued Benefit payable in equal monthly installments over a period
of 180 months. If the Executive dies while receiving disability benefit
payments, his beneficiary is entitled to receive an annual survivor's benefit in
an amount equal to $52,000 payable in equal monthly installments for the
remainder of the Executive's 180 month disability benefit period. In addition,
at the Executive's death, if the total disability benefit payments received, or
to be received, are less than $250,000, the Executive's beneficiary is entitled
to a lump sum payment in an amount sufficient to make the total benefits equal
to $250,000.
Payments of benefits under the agreements are conditioned upon (1) the
Executive not becoming employed by a competitor of Logansport Savings or
otherwise competing with Logansport Savings while receiving benefits under the
agreements and (2) in the case of Mr. Williams, the Executive rendering
reasonable business consulting advisory services to Logansport Savings for a
period of five years following his retirement. Mr. Evans' agreement provides
that if he is terminated for any reason other than cause, he is entitled to
receive that portion of his Accrued Benefit which has vested. No benefits are
provided if Mr. Evans voluntarily terminates his employment before he is
otherwise entitled to benefits under the agreement. If Mr. Evans' employment is
terminated for cause, all benefits under his agreement are forfeited and the
agreement is rendered null and void. Logansport Savings expensed $21,388 in
connection with these agreements for the year ended December 31, 2003.
Logansport Savings has purchased paid-up life insurance on the lives of the
Executives to fund the benefits payable under the supplemental retirement
agreements. See "-- Insurance to Fund Certain Benefits."
Compensation of Directors
All directors of Logansport Savings are entitled to receive a monthly
director fee of $700. Directors emeritus receive $100 per Board meeting
attended. Total fees paid to directors for the year ended December 31, 2003 were
$64,800. Logansport Savings' directors may, pursuant to deferred compensation
agreements, defer payment of some or all of the directors' fees until after they
retire or otherwise no longer serve as directors. Upon their attainment of age
70, directors who participate in the deferred compensation plan receive fixed
monthly payments for 180 months, but may also elect to receive their benefits in
a lump sum. The amount of each director's monthly payments depends on the amount
of fees deferred and the period over which the fees were deferred. The
agreements also provide for the payment of disability benefits and death
benefits. The beneficiary of a director participating in the deferred
compensation plan also receives a $7,500 lump sum death benefit upon the
director's death. Logansport Savings has purchased paid-up life insurance on the
lives of directors participating in the deferred compensation plans to fund
benefits payable thereunder. See "-- Insurance to Fund Certain Benefits."
Logansport Savings expensed $20,772 in connection with these agreements for the
year ended December 31, 2003.
Directors of the Holding Company are not currently paid directors' fees.
The Holding Company may, if it believes it is necessary to attract qualified
directors or otherwise beneficial to the Holding Company, adopt a policy of
paying directors' fees.
Insurance to Fund Certain Benefits
Logansport Savings has purchased paid-up life insurance on the lives of the
Executives covered under the supplemental retirement income agreements with Mr.
Williams and Mr. Evans, and on the lives of the directors covered under the
deferred compensation agreements to fund the obligations under these agreements.
The insurance is provided by Transamerica Life Insurance Company and
Northwestern Mutual Life Insurance Company. At December 31, 2003, the cash
surrender value of the policies was carried on the books of Logansport at an
amount equal to $1,342,772.
Transactions With Certain Related Persons
Logansport Savings has followed a policy of offering to its directors,
officers, and employees real estate mortgage loans secured by their principal
residence and other loans. As permitted by law, these loans are made at an
interest rate that is .25% lower than the rate generally available to the
public, or at the rate published by the FHLB for sale to the secondary market,
whichever is lower. These loans are offered with substantially the same
collateral and underwriting criteria as those of comparable transactions
prevailing at the time and do not involve more than the normal risk of
collectibility or present other unfavorable features. Loans to directors and
executive officers and their related interests totaled approximately $1,500,000,
or 9.17% of shareholders' equity on a consolidated basis at December 31, 2003.
Logansport Savings occasionally utilizes Mr. Evans, who is a state licensed
appraiser, as a staff appraiser for certain residential mortgage loans under
$250,000. As part of closing costs, Logansport charges an appraisal fee of
approximately $200 for residential mortgage loans. For the year ended December
31, 2003, Mr. Evans received $100.00 as compensation for his appraisal work.
Logansport Savings currently utilizes Cass County Title Company, Inc. to
provide title insurance or to perform real estate searches in connection with
its mortgage lending. Brian J. Morrill, a director of the Holding Company and of
Logansport Savings, is President and majority shareholder of Cass County Title
Company, Inc. During 2003, that company received fees for such title insurance
and real estate searches from customers of Logansport Savings in the amount of
approximately $52,751.
Audit Committee Report, Charter, and Independence
Audit Committee Report. The Audit Committee reports as follows with respect
to the audit of the Holding Company's financial statements for the fiscal year
ended December 31, 2003, included in the Holding Company's Shareholder Annual
Report accompanying this Proxy Statement ("2003 Audited Financial Statements"):
The Committee has reviewed and discussed the Holding Company's 2003 Audited
Financial Statements with the Company's management.
The Committee has discussed with its independent auditors (Grant Thornton
LLP) the matters required to be discussed by Statement on Auditing Standards 61,
which include, among other items, matters related to the conduct of the audit of
the Holding Company's financial statements.
The Committee has received written disclosures and the letter from the
independent auditors required by Independence Standards Board Standard No. 1
(which relates to the auditor's independence from the Holding Company and its
related entities) and has discussed with the auditors the auditors' independence
from the Holding Company. The Committee considered whether the provision of
services by its independent auditors other than audit services and reviews of
Forms 10-Q is compatible with maintaining the auditors' independence.
Based on review and discussions of the Holding Company's 2003 Audited
Financial Statements with management and discussions with the independent
auditors, the Audit Committee recommended to the Board of Directors that the
Holding Company's 2003 Audited Financial Statements be included in the Holding
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2003.
This Report is respectfully submitted by the Audit Committee of the Holding
Company's Board of Directors.
Audit Committee Members
-----------------------
James P. Bauer
Brian J. Morrill
Susanne S. Ridlen
William Tincher, Jr.
Audit Committee Charter. The Board of Directors has adopted a written
charter for the Audit Committee. The Board of Directors reviews and approves
changes to the Audit Committee Charter annually. A copy of that Charter is
attached hereto as Exhibit B.
Independence of Audit Committee Members. The Holding Company's Audit
Committee is comprised of James P. Bauer, Brian J. Morrill, Susanne S. Ridlen
and William Tincher, Jr. Each of these members meets the requirements for
independence set forth in the Listing Standards of the National Association of
Securities Dealers, Inc. In addition, the Board of Directors has determind that
James P. Bauer is a "financial expert" as that term is defined in Item 401(h)(2)
of Regulation S-K promulgated under the Securities Exchange Act of 1934.
ACCOUNTANTS
Grant Thornton LLP ("Grant Thornton") has served as auditors for the
Holding Company since 1997. A representative of Grant Thornton is expected to be
present at the Annual Meeting with the opportunity to make a statement if he so
desires. He will also be available to respond to any appropriate questions
shareholders may have. Grant Thornton has been selected as the independent
public accounting firm to audit the Holding Company's books, records and
accounts for the fiscal year ended December 31, 2004.
Accountant's Fees
Audit Fees. The firm of Grant Thornton served as the independent public
accountants for the Holding Company for each of the last two fiscal years ended
December 31, 2002 and 2003. The aggregate fees billed by Grant Thornton for the
audit of the Holding Company's financial statements included in its annual
report on Form 10-K and for the review of its financial statements included in
its quarterly reports on Form 10-Q for the fiscal years ended December 31, 2002
and 2003, were $28,650 and $29,450, respectively.
Audit-Related Fees. The aggregate fees billed in each of fiscal 2002 and
2003 for assurance and related services by Grant Thornton that are reasonably
related to the audit or review of the Holding Company's financial statements and
that were not covered in the Audit Fees disclosure above, were $4,550 and
$4,650, respectively. These services included review of the annual report and
Form 10-K.
Tax Fees. The aggregate fees billed in each of fiscal 2002 and 2003 for
professional services rendered by Grant Thornton for tax compliance, tax advice
or tax planning were $2,800 and $3,000, respectively.
All Other Fees. There were no fees billed in fiscal 2002 for professional
services rendered by Grant Thornton except as disclosed above. Services were
rendered by Grant Thornton in 2002 for internet banking intrusion testing for
which $2,500 was paid by the Holding Company in 2003.
Audit Committee Pre-Approval. The Audit Committee formally adopted
resolutions pre-approving the Holding Company's engagement of Grant Thornton to
act as its independent auditor for the last two fiscal years ended December 31,
2003. The Audit Committee has not adopted pre-approval policies and procedures
in accordance with paragraph (c) (7) (i) of Rule 2-01 of Regulation S-X, because
it anticipates that in the future the engagement of Grant Thornton will be made
by the Audit Committee and all non-audit and audit services to be rendered by
Grant Thornton will be pre-approved by the Audit Committee. The Audit Committee
pre-approved any audit-related and tax services provided by Grant Thornton in
the last two fiscal years. The Holding Company's independent auditors performed
all work described above with their respective full-time, permanent employees.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder wishes to have presented at the next
Annual Meeting of the Holding Company and included in the Holding Company's
proxy statement and form of proxy relating to that meeting, must be received at
the main office of the Holding Company no later than 120 days in advance of
March 11, 2005. Any such proposal should be sent to the attention of the
Secretary of the Holding Company at 723 East Broadway, Logansport, Indiana
46947, and will be subject to the requirements of the proxy rules under the
Securities Exchange Act of 1934 and, as with any shareholder proposal
(regardless of whether included in the Holding Company's proxy materials), the
Holding Company's articles of incorporation, by-laws and Indiana law.
A shareholder proposal being submitted for presentation at the Annual
Meeting but not for inclusion in the Holding Company's proxy statement and form
of proxy, will normally be considered untimely if it is received by the Holding
Company later than 90 days prior to the Annual Meeting. If, however, less than
100 days' notice or prior public disclosure of the date of the next Annual
Meeting is given or made to shareholders (which notice or public disclosure of
the date of the meeting shall include the date of the Annual Meeting specified
in publicly available By-Laws, if the Annual Meeting is held on such date), such
proposal shall be considered untimely if it is received by the Holding Company
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
If the Holding Company receives notice of such proposal after such time, each
proxy that the Holding Company receives will confer upon it the discretionary
authority to vote on the proposal in the manner the proxies deem appropriate,
even though there is no discussion of the proposal in the Holding Company's
proxy statement for the Annual Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended ("1934
Act"), requires that the Holding Company's officers and directors and persons
who own more than 10% of the Holding Company's Common Stock file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than 10% shareholders are required
by SEC regulations to furnish the Holding Company with copies of all Section
16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
and/or written representations from certain reporting persons that no Forms 5
were required for those persons, the Holding Company believes that for the
fiscal year ended December 31, 2003, all filing requirements applicable to its
officers, directors and greater than 10% beneficial owners with respect to
Section 16(a) of the 1934 Act were satisfied in a timely manner.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described in the Proxy Statement. However, if any other
matters should properly come before the Annual 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 solicitation of proxies will be borne by the Holding Company.
The Holding Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in sending
proxy material to the beneficial owners of the Common Stock. In addition to
solicitation by mail, directors, officers, and employees of the Holding Company
may solicit proxies personally or by telephone without additional compensation.
Each shareholder is urged to complete, date and sign the proxy and return
it promptly in the enclosed envelope.
By Order of the Board of Directors
/s/ David G. Wihebrink
David G. Wihebrink, President and
Chief Executive Officer
March 11, 2004
REVOCABLE PROXY LOGANSPORT FINANCIAL CORP.
Annual Meeting of Shareholders
April 13, 2004
The undersigned hereby appoints Sheila Wildermuth and Dottye Robeson, with
full powers of substitution, to act as attorneys and proxies for the undersigned
to vote all shares of common stock of Logansport Financial Corp. which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be held
at the office of Logansport Financial Corp. at 723 East Broadway, Logansport,
Indiana, on Tuesday, April 13, 2004, at 2:00 P.M., and at any and all
adjournments thereof, as follows:
1. The election as directors of the nominees listed below, except as marked to
the contrary
|_| FOR |_| VOTE WITHHELD
INSTRUCTIONS: To withhold authority to vote for the nominee, strike a line
through the nominee's name on the list below:
Brian J. Morrill Susanne S. Ridlen, Ph.D.
(each for a three-year term)
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposition.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy may be revoked at any time prior to the voting thereof.
The undersigned acknowledges receipt from Logansport Financial Corp., prior to
the execution of this Proxy, of Notice of the Meeting, a Proxy Statement and an
Annual Report to Shareholders.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE DIRECTOR NOMINEE. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
____________________, 2004
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Signature of Shareholder
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Signature of Shareholder
Please sign as your name appears on the envelope
in which this card was mailed. When signing as
attorney, executor, administrator, trustee or
guardian, please give your full title. If shares
are held jointly, each holder should sign.