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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 pursuant to Rule 14a-12
Lawrence Financial Holdings, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X / No fee required.
/__/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total Fee paid:
N/A
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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:
N/A
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(2) Form, schedule or registration statement no.:
N/A
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(3) Filing party:
N/A
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(4) Date filed:
N/A
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[Lawrence Financial Holdings, Inc. Logo]
May 24, 2001
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
Lawrence Financial Holdings, Inc. We will hold the meeting at the Company's main
office at 311 South Fifth Street, Ironton, Ohio on July 5, 2001 at 4:30 p.m.,
local time. This will be the first annual meeting since Lawrence Federal Savings
Bank converted from the mutual to stock form of organization on December 28,
2000.
The notice of annual meeting and proxy statement appearing on the
following pages describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Company.
Directors and officers of the Company, as well as a representative of Crowe,
Chizek and Company LLP, the Company's independent auditors, will be present to
respond to appropriate questions of stockholders.
It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person and regardless of the number of shares
you own. To make sure your shares are represented, we urge you to complete and
mail the enclosed proxy card. If you attend the meeting, you may vote in person
even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Jack L. Blair
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Jack L. Blair
President and Chief Executive Officer
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LAWRENCE FINANCIAL HOLDINGS, INC.
311 SOUTH FIFTH STREET
IRONTON, OHIO 45638
(740) 532-0263
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
On July 5, 2001, Lawrence Financial Holdings, Inc. will hold its annual
meeting of stockholders at the Company's main office at 311 South Fifth Street,
Ironton, Ohio. The meeting will begin at 4:30 p.m., local time. At the meeting,
stockholders will consider and act on the following:
1. The election of two directors to serve for a term of three years;
2. The approval of the Lawrence Financial Holdings, Inc. 2001 Stock-
Based Incentive Plan;
3. The ratification of the appointment of Crowe, Chizek and Company LLP
as independent auditors for the Company for the fiscal year ending
December 31, 2001; and
4. Such other business that may properly come before the meeting.
NOTE: The Board of Directors is not aware of any other business to come
before the meeting.
The Board of Directors set April 24, 2001 as the record date for the
meeting. This means that owners of Lawrence Financial common stock at the close
of business on that date are entitled to receive notice of the meeting and to
vote at the meeting and any adjournments or postponements of the meeting.
Please complete and sign the enclosed form of proxy, which is solicited by
the Board of Directors, and mail it promptly in the enclosed envelope. The proxy
will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mary C. Kratzenberg
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Mary C. Kratzenberg
Corporate Secretary
Ironton, Ohio
May 24, 2001
IMPORTANT: The prompt return of proxies will save the Company the expense of
further requests for proxies in order to ensure a quorum. A self-addressed
envelope is enclosed for your convenience. No postage is required if mailed in
the United States.
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LAWRENCE FINANCIAL HOLDINGS, INC.
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PROXY STATEMENT
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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Lawrence Financial Holdings, Inc.
("Lawrence Financial" or the "Company") to be used at the annual meeting of
stockholders of the Company. Lawrence Financial is the holding company for
Lawrence Federal Savings Bank ("Lawrence Federal" or the "Bank"). The annual
meeting will be held at the Company's main office at 311 South Fifth Street,
Ironton, Ohio on July 5, 2001 at 4:30 p.m., local time. This proxy statement and
the enclosed proxy card are being first mailed to stockholders of record on or
about May 24, 2001.
VOTING AND PROXY PROCEDURE
WHO CAN VOTE AT THE MEETING
You are entitled to vote your Lawrence Financial common stock only if the
records of the Company show that you held your shares as of the close of
business on April 24, 2001. As of the close of business on April 24, 2001, a
total of 775,827 shares of Lawrence Financial common stock were outstanding.
Each share of common stock has one vote. The Company's Articles of Incorporation
provide that record holders of the Company's common stock who beneficially own,
either directly or indirectly, in excess of 10% of the Company's outstanding
shares are not entitled to any vote in respect of the shares held in excess of
the 10% limit.
ATTENDING THE MEETING
If you are a beneficial owner of Lawrence Financial common stock held by a
broker, bank or other nominee (i.e., in "street name"), you will need proof of
ownership to be admitted to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of ownership. If you want to vote
your shares of Lawrence Financial common stock held in street name in person at
the meeting, you will have to get a written proxy in your name from the broker,
bank or other nominee who holds your shares.
VOTE REQUIRED
The annual meeting will be held only if there is a quorum. A quorum exists
if a majority of the outstanding shares of common stock entitled to vote is
represented at the meeting. If you return valid proxy instructions or attend the
meeting in person, your shares will be counted for purposes of determining
whether there is a quorum, even if you abstain from voting. Broker non-votes
also will be counted for purposes of determining the existence of a quorum. A
broker non-vote occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to that item and has not
received voting instructions from the beneficial owner.
In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or withhold votes as to specific
nominees. There is no cumulative voting for the election
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of directors. Directors must be elected by a plurality of the votes cast at the
annual meeting. This means that the nominees receiving the greatest number of
votes will be elected. Votes that are withheld and broker non-votes will have no
effect on the outcome of the election. In voting on the approval of the Lawrence
Financial Holdings, Inc. 2001 Stock-Based Incentive Plan and the ratification of
the appointment of Crowe, Chizek and Company LLP as independent auditors, you
may vote in favor of the proposal, vote against the proposal or abstain from
voting. Under Maryland law and Lawrence Financial's Bylaws, the adoption of the
2001 Stock-Based Incentive Plan and the ratification of Crowe, Chizek and
Company LLP as independent auditors will be decided by a majority of the votes
cast at the annual meeting. On these matters, abstentions and broker non-votes
will have no effect on the voting.
VOTING BY PROXY
The Board of Directors of Lawrence Financial is sending you this proxy
statement for the purpose of requesting that you allow your shares of Lawrence
Financial common stock to be represented at the annual meeting by the persons
named in the enclosed proxy card. All shares of Lawrence Financial common stock
represented at the annual meeting by properly executed and dated proxies will be
voted according to the instructions indicated on the proxy card. If you sign,
date and return a proxy card without giving voting instructions, your shares
will be voted as recommended by the Company's Board of Directors. The Board of
Directors recommends that you vote:
/X/ for the election of each of the nominees for director;
/X/ for approval of the Lawrence Financial Holdings, Inc. 2001 Stock-Based
Incentive Plan; and
/X/ for ratification of the appointment of Crowe, Chizek and Company LLP
as the Company's independent auditors for fiscal 2001.
If any matters not described in this proxy statement are properly
presented at the annual meeting, the persons named in the proxy card will use
their own best judgment to determine how to vote your shares. This includes a
motion to adjourn or postpone the annual meeting in order to solicit additional
proxies. If the annual meeting is postponed or adjourned, your Lawrence
Financial common stock may be voted by the persons named in the proxy card on
the new annual meeting date as well, unless you have revoked your proxy. The
Company does not know of any other matters to be presented at the annual
meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Secretary of the
Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy, or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.
If your Lawrence Financial common stock is held in "street name," you will
receive instructions from your broker, bank or other nominee that you must
follow in order to have your shares voted. Your broker, bank or other nominee
may allow you to deliver your voting instructions via the telephone or the
Internet. Please see the instruction form provided by your broker, bank or other
nominee that accompanies this proxy statement.
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PARTICIPANTS IN THE LAWRENCE FEDERAL SAVINGS BANK ESOP OR 401(K) PLAN
If you participate in the Lawrence Federal Savings Bank Employee Stock
Ownership Plan (the "ESOP") or if you hold shares of Lawrence Financial common
stock through Lawrence Federal's 401(k) Plan, you will have received with this
proxy statement voting instruction forms that reflect all shares you may vote
under the plans. Under the terms of the ESOP, the ESOP trustee votes all shares
held by the ESOP, but each participant in the ESOP may direct the trustee how to
vote the shares of common stock allocated to his or her account. The ESOP
trustee, subject to the exercise of its fiduciary duties, will vote all
unallocated shares of common stock held by the ESOP and allocated shares for
which no voting instructions are timely received in the same proportion as
shares for which it has received timely voting instructions. Under the terms of
the 401(k) Plan, a participant is entitled to direct the trustee as to the
shares credited to his or her account. The trustee will vote all shares for
which no directions are given or for which instructions are not timely received
in the same proportion as shares for which the trustee received timely voting
instructions, subject to the exercise of its fiduciary duties. The deadline for
returning your voting instructions to each plan's trustee is June 28, 2001.
STOCK OWNERSHIP
The following table provides information as of April 24, 2001 about the
persons known to Lawrence Financial to be the beneficial owners of more than 5%
of the Company's outstanding common stock. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investing power.
Number of Percent of Common
Name and Address Shares Owned Stock Outstanding
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Lawrence Federal Savings Bank 62,066(1) 8.0%
Employee Stock Ownership Plan
311 South Fifth Street
Ironton, Ohio 45638
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(1)Includes 55,866 shares that have not been allocated to participants' accounts
and 6,200 that have been allocated to participants' accounts. Under the terms
of the ESOP, the ESOP trustee will vote shares allocated to participants'
accounts in the manner directed by the participants. Subject to its fiduciary
responsibility, the trustee will vote unallocated shares and allocated shares
for which voting instructions are not timely received in the same proportion
as shares for which it has received timely voting instructions from
participants. The trustee of the ESOP is First Bankers Trust Company.
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The following table provides information as of April 24, 2001 about the
shares of Lawrence Financial common stock that may be considered to be
beneficially owned by each nominee for director and by all directors and
executive officers of the Company as a group. Unless otherwise indicated, each
of the named individuals has sole voting power and sole investment power with
respect to the number of shares shown.
Number of Percent of Common
Name Shares Owned Stock Outstanding(1)
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Jack L. Blair 10,500(2) 1.3%
Charles E. Austin, II 12,500(3) 1.6
Tracy E. Brammer, Jr. 12,792(4) 1.6
Herbert J. Karlet 9,141(5) 1.2
Phillip O. McMahon 12,500(6) 1.6
Robert N. Taylor 7,500 *
All directors and executive officers 69,649 9.0%
as a group (10 persons)
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*Represents less than 1.0% of the Company's voting securities.
(1) Based on 775,827 shares of common stock outstanding and entitled to vote as
of April 24, 2001.
(2) Includes 2,270 shares held by Mr. Blair's spouse. Also includes 2,445 shares
held in trust as part of the Lawrence Federal Savings Bank 401(k) Savings
Plan over which Mr. Blair has voting power and investment power.
(3) Includes 5,000 shares held by Mr. Austin's spouse.
(4) Includes 2,270 shares held by Mr. Brammer's spouse.
(5) Includes 641 shares held by Mr. Karlet's spouse.
(6) Includes 5,000 shares held by Mr. McMahon's spouse.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Company's Board of Directors consists of six members. Five directors
are independent and one is a member of management. The Board is divided into
three classes with three-year staggered terms, with approximately one-third of
the directors elected each year. The Board of Directors' nominees for election
this year, to serve for a three-year term or until their respective successors
have been elected and qualified, are Jack L. Blair and Tracy E. Brammer, Jr.,
both of whom are currently directors of Lawrence Financial and Lawrence Federal.
The Board of Directors intends that the proxies solicited by it will be
voted for the election of the nominees named above. If any nominee is unable to
serve, the persons named in the proxy card would vote your shares to approve the
election of any substitute proposed by the Board of Directors. Alternatively,
the Board of Directors may adopt a resolution to reduce the size of the Board.
At this time, the Board of Directors knows of no reason why any nominee might be
unable to serve.
The Board of Directors recommends a vote "FOR" the election of both nominees.
Information regarding the Board of Directors' nominees and the directors
continuing in office is provided below. Unless otherwise stated, each individual
has held his current occupation for the last five
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years. The age indicated for each individual is as of December 31, 2000. The
indicated period of service as a director includes the period of service as a
director of Lawrence Federal.
BOARD NOMINEES FOR ELECTION OF DIRECTORS
JACK L. BLAIR joined Lawrence Federal in 1994 as Executive Vice President
and Chief Executive Officer. Since 1996, he has served as President and Chief
Executive Officer. Age 53. Director since 2000.
TRACY E. BRAMMER, JR. is Vice President, General Manager and Funeral
Director of Tracy Brammer Funeral Home, Inc. Age 56. Director since 1984.
DIRECTORS CONTINUING IN OFFICE
The following directors have terms ending in 2002:
CHARLES E. AUSTIN, II is a Vice President and General Manager of C. J.
Hughes Construction Co., Inc. of Huntington, West Virginia. Age 41. Director
since 1996.
PHILLIP O. MCMAHON is a general dentist in private practice. Age 49.
Director since 1993.
The following directors have terms ending in 2003:
HERBERT J. KARLET is the Senior Vice President for Finance at Marshall
University, which is located in Huntington, West Virginia. Age 50. Director
since 1991.
ROBERT N. TAYLOR is the owner and President of Ohio Big Birds, Inc., which
raises and processes ostrich meat and leather products, and the owner and
operator of Taylor Farm, a grain and cattle farm. Age 56. Director since 1995.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company and Lawrence Federal conduct business through meetings and
activities of their Boards of Directors and their committees. During the year
ended December 31, 2000, the Board of Directors of the Company held two regular
meetings and no special meetings and the Board of Directors of Lawrence Federal
held 24 regular meetings and eight special meetings. No director attended fewer
than 75% of the total meetings of the Boards of Directors and committees on
which he served.
The Audit Committee, consisting of the entire Board, meets periodically
with independent accountants and management to review accounting, auditing,
internal control structure and financial reporting matters. This committee met
one time during the year ended December 31, 2000.
The Compensation Committee, consisting of Messrs. Austin, Karlet and
Taylor, is responsible for all matters regarding the Company's and the Bank's
employee compensation and benefit programs. This committee met once during the
year ended December 31, 2000.
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DIRECTORS' COMPENSATION
Lawrence Financial pays an annual retainer of $7,200 to each member of its
Board of Directors. Lawrence Federal pays a fee of $1,200 per month to each of
its directors for service on the Board of Directors of Lawrence Federal.
Directors also receive an annual retainer of $1,400 for serving on the Board of
Directors of Lawrence Financial Services Corp.
Lawrence Federal maintains a deferred compensation arrangement for
directors under which each director may elect on an annual basis to defer up to
100% of his monthly Board remuneration. Upon the director's attainment of age
68, Lawrence Federal will pay the balance of the director's deferral account
either in a lump sum or in monthly installments over a period of 240 months.
Over the deferral period, a director's account is credited with interest with
monthly compounding. In the event of a change in control of Lawrence Financial
(as defined in the program) followed by a director's termination of service,
each director will be entitled to begin to receive his deferral account and the
interest rate will become fixed at the time of the change in control. The
arrangement with the directors also provides each director with a death benefit.
If a director dies while in active service with Lawrence Federal, the director's
beneficiary will receive an annual payment in an amount specified in the
director's individual agreement for a period of 20 years. Lawrence Federal has
acquired life insurance on members of the Board to provide informal funding for
its obligations under the program. During the fiscal year ended December 31,
2000, all directors participated in the director deferral program.
Lawrence Federal also maintains a director emeritus program for its
non-employee directors to encourage them to remain as directors. Upon the
director's attainment of age 68 and completion of 15 years of service as a
director, Lawrence Federal will pay the director $500 annually for each year of
service, up to 50% of the board of fees at the retirement date, for a period of
15 years. Each director's agreement also provides for a reduced benefit upon an
early retirement after the attainment of age 65, but before the attainment of
age 68, and completion of 15 years of service. Upon a director's death while in
active service or in the event of a change in control of Lawrence Federal or
Lawrence Financial (as defined in the program), each director will be entitled
to receive a payment equivalent to what he would have received had his normal
retirement date coincided with the date of the change in control or date of
death, as the case may be. Lawrence Federal has acquired life insurance on
members of the Board of Directors to provide informal funding for its
obligations under the program.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information is furnished for Mr. Blair. No other executive
officer of Lawrence Financial or Lawrence Federal received a salary and bonus of
$100,000 or more during the year ended December 31, 2000.
ANNUAL COMPENSATION
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OTHER ANNUAL ALL OTHER
NAME AND POSITION YEAR(1) SALARY(2) BONUS COMPENSATION(3) COMPENSATION
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Jack L. Blair 2000 $100,600 -- -- 4,592(4)
President and Chief Executive 1999 86,100 -- -- 3,650
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(1) Compensation information for 1998 has been omitted as Lawrence Financial was neither a public
company nor a subsidiary of a public company at that time.
(2) Includes board of directors and board committee fees.
(3) Does not include the aggregate amount of perquisites and other personal benefits, which was
less than $50,000 or 10% of the total annual salary and bonus reported.
(4) Consists of employer contributions to the 401(k) plan.
Employment Arrangements
EMPLOYMENT AGREEMENTS. Effective December 28, 2000, Lawrence Federal and
Lawrence Financial each entered into an employment agreement with Mr. Blair. The
employment agreements provide for a three-year term. The term of the Lawrence
Financial employment agreement extends on a daily basis until written notice of
non-renewal is given by the Board of Directors or Mr. Blair. The term of the
Lawrence Federal employment agreement is renewable on an annual basis. The
employment agreements provide that Mr. Blair's base salary will be reviewed
annually. The current base salary under the employment agreements for Mr. Blair
is $98,400. In addition to the base salary, the employment agreements provide
for, among other things, participation in stock benefits plans and other fringe
benefits applicable to executive personnel. The employment agreements provide
for termination by Lawrence Federal or Lawrence Financial for cause, as defined
in the employment agreements, at any time. If Lawrence Federal or Lawrence
Financial chooses to terminate Mr. Blair's employment for reasons other than for
cause, or if Mr. Blair resigns from Lawrence Federal or Lawrence Financial after
specified circumstances that would constitute constructive termination, Mr.
Blair or, if Mr. Blair dies, his beneficiary, would be entitled to receive an
amount equal to the benefit plan base salary payments that would have been paid
to Mr. Blair for the remaining term of the employment agreement and the
contributions that would have been made on Mr. Blair's behalf to any employee
benefit plans of Lawrence Federal and Lawrence Financial during the remaining
term of the employment agreement. Lawrence Federal and Lawrence Financial would
also continue to pay for Mr. Blair's health and welfare benefit plan coverage
for the remaining term of the employment agreement. Upon termination of Mr.
Blair for reasons other than cause or a change in control, Mr. Blair must adhere
to a one-year non-competition agreement.
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Under the employment agreements, if, following a change in control of
Lawrence Federal or Lawrence Financial, Mr. Blair's employment is involuntarily
terminated or if Mr. Blair voluntarily terminates his employment in connection
with circumstances specified in the agreement, then Mr. Blair or, if Mr. Blair
dies, his beneficiary, would be entitled to a severance payment equal to the
greater of the payments and benefits that would have been paid for the remaining
term of the agreement or three times the average of Mr. Blair's five preceding
taxable years' annual compensation. Lawrence Federal and Lawrence Financial
would also continue Mr. Blair's health and welfare benefits coverage for
thirty-six months. Even though both employment agreements provide for a
severance payment if a change in control occurs, Mr. Blair would not receive
duplicate payments or benefits under the agreements. Under applicable law, an
excise tax would be triggered by change in control-related payments that equal
or exceed three times Mr. Blair's average annual compensation over the five
years preceding the change in control. The excise tax would equal 20% of the
amount of the payment in excess of one times Mr. Blair's average compensation
over the preceding five-year period. In the event that payments related to a
change in control of Lawrence Financial are subject to this excise tax, Lawrence
Financial will provide Mr. Blair with an additional amount sufficient to enable
Mr. Blair to retain the full value of his change in control benefits as if the
excise tax had not applied.
Lawrence Financial guarantees the payments to Mr. Blair under Lawrence
Federal's employment agreement if they are not paid by Lawrence Federal.
Lawrence Financial will also make all payments due under the Lawrence
Financial's employment agreement. Lawrence Federal or Lawrence Financial will
pay or reimburse all reasonable costs and legal fees incurred by Mr. Blair under
any dispute or question of interpretation relating to the employment agreements,
if Mr. Blair is successful on the merits in a legal judgment, arbitration or
settlement. The employment agreements also provide that Lawrence Federal and
Lawrence Financial will indemnify Mr. Blair to the fullest extent legally
allowable for all expenses and liabilities he may incur in connection with any
suit or proceeding in which he may be involved by reason of his having been a
director or officer of Lawrence Financial or Lawrence Federal.
DEFERRED COMPENSATION AGREEMENT. Lawrence Federal has entered into a
deferred compensation agreement with Mr. Blair under which he may elect on an
annual basis to defer a portion of his salary. Upon termination of service,
Lawrence Federal will pay the balance of Mr. Blair's deferral account in a lump
sum. Over the deferral period, Mr. Blair's account is credited with annual
interest with monthly compounding. In the event of a change in control of
Lawrence Federal (as defined in the program) followed by Mr. Blair's termination
of service, he will be entitled to receive the balance of his deferral account
in a lump sum. If Mr. Blair dies while in active service with Lawrence Federal,
his beneficiary will receive $21,862 annually in monthly installments for 20
years. Lawrence Federal has acquired life insurance on Mr. Blair to provide
informal funding for its obligations under the agreement.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. Lawrence Federal maintains a
supplemental executive retirement plan to provide for supplemental retirement
benefits with respect to the employee stock ownership plan. The plan provides
participating executives with benefits otherwise limited by other provisions of
the Internal Revenue Code or the terms of the employee stock ownership plan
loan. Specifically, the plan provides benefits to eligible individuals (those
designated by the Board of Directors of Lawrence Federal or its affiliates) that
cannot be provided under the employee stock ownership plan as a result of the
limitations imposed by the Internal Revenue Code, but that would have been
provided under the employee stock ownership plan but for such limitations. In
addition to providing for benefits lost under tax-qualified plans as a result of
limitations imposed by the Internal Revenue Code, the plan also provides
supplemental benefits to designated individuals upon a change of
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control before the complete scheduled repayment of the employee stock ownership
plan loan. Generally, upon such an event, the supplemental executive retirement
plan provides the individual with a benefit equal to what the individual would
have received under the employee stock ownership plan had he or she remained
employed throughout the term of the employee stock ownership plan loan less the
benefits actually provided under the employee stock ownership plan on behalf of
the individual. An individual's benefits under the supplemental executive
retirement plan will generally become payable upon the change in control of
Lawrence Federal or Lawrence Financial. The Board of Directors has designated
Mr. Blair as a participant in the supplemental executive retirement plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
Based solely on the Company's review of copies of the reports it has
received and written representations provided to it from the individuals
required to file the reports, the Company believes that each of its executive
officers and directors has complied with applicable reporting requirements for
transactions in Lawrence Financial common stock during the year ended December
31, 2000.
TRANSACTIONS WITH MANAGEMENT
Federal regulations require that all loans or extensions of credit to
executive officers and directors must generally be made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and must not involve more
than the normal risk of repayment or present other unfavorable features.
Notwithstanding this rule, federal regulations permit Lawrence Federal to make
loans to executive officers and directors at reduced interest rates if the loan
is made under a benefit program generally available to all other employees and
does not give preference to any executive officer or director over any other
employee. Lawrence Federal's policy is to offer employees residential mortgage
loans and personal consumer loans with interest rates equal to Lawrence
Federal's cost of funds plus 1%, adjusted upwards to the nearest one-quarter of
1%. Lawrence Federal also offers employees credit cards with interest rates
equal to the prime rate.
In addition, loans made to a director or executive officer in an amount
that, when aggregated with the amount of all other loans to the person and his
or her related interests, are in excess of the greater of $25,000 or 5% of
Lawrence Federal's capital and surplus, up to a maximum of $500,000, must be
approved in advance by a majority of the disinterested members of the Board of
Directors.
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PROPOSAL 2 -- APPROVAL OF THE LAWRENCE FINANCIAL HOLDINGS, INC.
2001 STOCK-BASED INCENTIVE PLAN
The Board of Directors of the Company is presenting for stockholder
approval the Lawrence Financial Holdings, Inc. 2001 Stock-Based Incentive Plan,
in the form attached to this proxy statement as Appendix A. The purpose of the
plan is to attract and retain qualified personnel in key positions, provide
officers, employees and non-employee directors of the Company and the Bank with
a proprietary interest in the Company as an incentive to contribute to the
success of the Company, promote the attention of management to other
stockholders' concerns, and reward employees for outstanding performance. The
following is a summary of the material terms of the plan which is qualified in
its entirety by the complete text of the plan.
GENERAL
The plan authorizes both the grant of options to purchase common stock of
the Company and awards of restricted shares of common stock. Subject to certain
adjustments to prevent dilution of awards to participants, the number of shares
of common stock reserved for awards under the plan is 108,615 shares, consisting
of 77,582 shares reserved for options and 31,033 shares reserved for restricted
stock awards. All employees and non-employee directors of the Company and its
affiliates are eligible to receive awards under the plan. The plan will be
administered by a committee (the "Committee") consisting of members of the Board
of Directors who are not employees of the Company or its affiliates. Authorized
but unissued shares or shares previously issued and reacquired by the Company
may be used to satisfy awards under the plan. If authorized but unissued shares
are used to satisfy restricted stock awards and the exercise of options granted
under the plan, the number of outstanding shares will increase and will have a
dilutive effect on the ownership interests of existing stockholders. The Company
may establish a trust under which the trustee will purchase, with contributions
from the Company or the Bank, previously issued shares to fund the Company's
obligation for restricted stock awards. As of the date of this proxy statement,
no awards have been granted under the plan.
TYPES OF AWARDS
GENERAL. The plan authorizes the grant of awards in the form of: (1)
options intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code (options which provide certain tax benefits to the
recipients upon compliance with applicable requirements, but which do not result
in tax deductions to the Company); (2) options that do not so qualify (options
which do not provide the same income tax benefits to recipients, but which may
provide tax deductions to the Company), referred to as "non-statutory stock
options"; and (3) grants of restricted shares of common stock. Each type of
award may be subject to certain vesting or service requirements or other
conditions imposed by the Committee.
OPTIONS. Subject to the terms of the plan, the Committee has the authority
to determine the amount of options granted to any individual and the date or
dates on which each option will become exercisable and any other conditions
applicable to an option. The exercise price of all options will be determined by
the Committee but will be at least 100% of the fair market value of the
underlying common stock at the time of grant. The exercise price of any option
may be paid in cash, common stock, or any other form permitted by the Committee
at its discretion. The term of options will be determined by the
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Committee, but in no event will an option be exercisable more than ten years
from the date of grant (or five years from date of grant for a 10% owner with
respect to incentive stock options).
All options granted under the plan to officers and employees may, at the
discretion of the Committee, qualify as incentive stock options to the extent
permitted under Section 422 of the Internal Revenue Code. Under certain
circumstances, incentive stock options may be converted into non-statutory
stock options. In order to qualify as incentive stock options under Section 422
of the Internal Revenue Code, the option must generally be granted only to an
employee, must not be transferable (other than by will or the laws of descent
and distribution), the exercise price must not be less than 100% of the fair
market value of the common stock on the date of grant, the term of the option
may not exceed ten years from the date of grant, and no more than $100,000 of
options may become exercisable for the first time in any calendar year.
Notwithstanding the foregoing requirements, incentive stock options granted to
any person who is the beneficial owner of more than 10% of the outstanding
voting stock of the Company may be exercised only for a period of five years
from the date of grant and the exercise price must be at least equal to 110% of
the fair market value of the underlying common stock on the date of grant. Each
non-employee director of the Company or its affiliates, as well as employees,
will be eligible to receive non-statutory stock options.
Unless the Committee determines otherwise, upon termination of an option
holder's services for any reason other than death, disability, retirement,
change in control or termination for cause, all then exercisable options will
remain exercisable for three months following termination, or if sooner, the
expiration of the term of the option. If an option holder dies or becomes
disabled all unexercisable options will become exercisable and remain
exercisable for one year, or if sooner, the expiration of the term of the
option. In the event of termination for cause, all exercisable and unexercisable
options held by the option holder will be canceled. If an option holder retires,
all unvested options will be canceled and all vested options will remain
exercisable for one year following retirement. However, the Committee may permit
all unvested stock options to continue to vest provided the option holder
remains employed by the Company or the Bank as a consultant or advisor or
continues to serve the Company or the Bank as a director, advisory director or
director emeritus. Upon the occurrence of a change in control (except as
otherwise provided by applicable law or regulation), all unexercisable options
held by an option holder will become fully exercisable and remain exercisable
for the term of the option. Incentive stock options exercised more than three
months after an option holder has terminated service in connection with a change
in control or retirement will be treated as non-statutory stock options for tax
purposes.
Under generally accepted accounting principles, compensation expense is
generally not recognized with respect to the award of stock options.
RESTRICTED STOCK AWARDS. Subject to the terms of the plan and applicable
regulation, the Committee has the authority to determine the amounts of
restricted stock awards granted to any individual and the dates on which
restricted stock awards granted will vest or any other conditions which must be
satisfied before vesting. Stock award recipients may also receive amounts equal
to accumulated cash and stock dividends or other distributions (if any) with
respect to shares awarded in the form of restricted stock. In addition, before
vesting, recipients of restricted stock awards may also direct the voting of
shares of common stock granted to them.
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Unless the Committee determines otherwise, upon termination of the
services of a holder of a stock award for any reason other than death,
disability or retirement, all the holder's rights in unvested restricted stock
awards will be canceled. If the holder of the stock award dies or becomes
disabled, all unvested restricted stock awards held by such individual will
become fully vested. If the holder of a stock award retires, all unvested
restricted stock awards held by such individual will be canceled. However, the
Committee may permit all unvested stock awards to continue to vest provided the
holder of a stock award remains employed by the Company or the Bank as a
consultant or advisor or continues to serve the Company or the Bank as a
director, advisory director or director emeritus. Upon the occurrence of a
change in control, all unvested restricted stock awards held by a recipient will
become immediately vested and any further restrictions shall lapse.
FEDERAL INCOME TAX TREATMENT
OPTIONS. An option holder will generally not recognize taxable income upon
grant or exercise of any incentive stock option, provided that shares
transferred in connection with the exercise are not disposed of by the optionee
for at least one year after the date the shares are transferred in connection
with the exercise of the option and two years after the date of grant of the
option. If these holding periods are satisfied, upon disposal of the shares, the
aggregate difference between the per share option exercise price and the fair
market value of the common stock is recognized as long-term capital gains. No
compensation deduction may be taken by the Company as a result of the grant or
exercise of incentive stock options, assuming these holding periods are met.
In the case of the exercise of a non-statutory stock option, an option
holder will recognize ordinary income upon exercise of the option in an amount
equal to the aggregate amount by which the fair market value of the common stock
exceeds the exercise price of the option. If shares received through the
exercise of an incentive stock option are disposed of before the satisfaction of
the holding periods (a "disqualifying disposition"), the exercise of the option
will essentially be treated as the exercise of a non-statutory stock option,
except that the option holder will recognize the ordinary income for the year in
which the disqualifying disposition occurs. The amount of any ordinary income
recognized by an optionee upon the exercise of a non-statutory stock option or
due to a disqualifying disposition will be a deductible expense of the Company
for federal income tax purposes.
RESTRICTED STOCK AWARDS. A participant who has been awarded restricted
stock under the plan and who does not make an election under Section 83(b) of
the Internal Revenue Code will not recognize taxable income at the time of the
award. At the time any transfer or forfeiture restrictions applicable to the
restricted stock award lapse, the recipient will recognize ordinary income and
the Company will be entitled to a corresponding deduction equal to the fair
market value of the stock at such time over the amount paid, if any, therefor.
Any dividend paid to the recipient on the restricted stock at or before such
time will be ordinary compensation income to the recipient and deductible as
such by the Company.
A recipient of a restricted stock award who makes an election under
Section 83(b) of the Internal Revenue Code will recognize ordinary income at the
time of the award, and the Company will be entitled to a corresponding deduction
equal to the fair market value of the stock at such time over the amount paid,
if any, therefor. Any dividends subsequently paid to the recipient on the
restricted stock will be dividend income to the recipient and not deductible by
the Company. If the recipient makes a Section
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83(b) election, there are no federal income tax consequences either to the
recipient or the Company at the time any transfer or forfeiture restrictions
applicable to the restricted stock award lapse.
ALTERNATE OPTION PAYMENTS
Subject to the terms of the plan, the Committee has discretion to
determine the form of payment for the exercise of an option. The Committee may
indicate acceptable forms in the award agreement covering such options or may
reserve its decision to the time of exercise. An option will not be considered
exercised until payment in full is accepted by the Committee. Any shares of
common stock tendered in payment of the exercise price of an option will be
valued at the fair market value of the common stock on the date before the date
of exercise.
AMENDMENTS
Subject to certain restrictions contained in the plan, the Board of
Directors or the Committee may amend the plan in any respect, at any time,
provided that no amendment may affect the rights of the holder of an award
without his or her permission and such amendment must comply with applicable law
and regulation.
ADJUSTMENTS
If there is any change in the outstanding shares of common stock of the
Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company, or if an
extraordinary capital distribution is made, including the payment of an
extraordinary dividend, the Committee may make such adjustments to previously
granted awards, to prevent dilution, diminution or enlargement of the rights of
the holder; provided, however, that in case of an extraordinary dividend, the
Committee may be required to obtain approval of the Office of Thrift Supervision
before any such adjustment. All awards under the plan will be binding upon any
successors or assigns of the Company.
NONTRANSFERABILITY
Unless the Committee determines otherwise, awards under the plan will not
be transferable by the recipient other than by will or the laws of intestate
succession or pursuant to a domestic relations order. With the consent of the
Committee, a recipient may permit transferability or assignment for valid estate
planning purposes of a non-statutory stock option as permitted under the
Internal Revenue Code or federal securities laws and a participant may designate
a person or his or her estate as beneficiary of any award to which the recipient
would then be entitled, if the participant dies.
STOCKHOLDER APPROVAL, EFFECTIVE DATE OF PLAN AND REGULATORY COMPLIANCE
The plan will become effective on December 29, 2001, subject to prior
approval of the plan by the Company's stockholders. The effective date has been
delayed until December 29, 2001 to ensure compliance with federal regulations
that would otherwise limit the terms of awards under the plan and, specifically,
the circumstances in which the vesting of outstanding awards may be accelerated.
Accordingly, assuming stockholder approval, the plan may not be implemented and
no awards may be
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made before December 29, 2001. Implementation of the plan is subject to the
regulations of the Office of Thrift Supervision. The Office of Thrift
Supervision has not endorsed or approved the plan.
NEW PLAN BENEFITS
As of the date of this proxy statement, no decisions have been made
regarding the granting of any options or stock awards under the plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
LAWRENCE FINANCIAL HOLDINGS, INC. 2001 STOCK-BASED INCENTIVE PLAN.
PROPOSAL 3 -- RATIFICATION OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
2000 were Crowe, Chizek and Company LLP. The Board of Directors has appointed
Crowe, Chizek and Company LLP to be its auditors for the 2001 fiscal year,
subject to the ratification by stockholders. A representative of Crowe, Chizek
and Company LLP is expected to be present at the annual meeting to respond to
appropriate questions from stockholders and will have the opportunity to make a
statement should he or she desire to do so.
If the ratification of the appointment of the independent auditors is not
approved by a majority of the votes cast by stockholders at the annual meeting,
the Board of Directors will consider other independent auditors. THE BOARD OF
DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF INDEPENDENT AUDITORS.
AUDIT FEES
The aggregate fees billed to the Company by Crowe, Chizek and Company LLP
for the annual audit for the fiscal year 2000 totaled $28,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
For the fiscal year 2000, the Company did not pay any fees to Crowe,
Chizek and Company LLP for information technology services.
ALL OTHER FEES
The aggregate fees billed to the Company by Crowe, Chizek and Company LLP
for all other non-audit services, including fees related to Lawrence Federal's
conversion from mutual to stock form of organization and tax-related services,
during fiscal year 2000 totaled $99,835.
AUDIT COMMITTEE
The Audit Committee believes that the non-audit fees paid to Crowe, Chizek
and Company LLP are compatible with maintaining Crowe, Chizek and Company LLP's
independence.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors is responsible for
exercising independent, objective oversight of Lawrence Financial's independent
auditors, accounting functions and internal controls. The Audit Committee is
comprised of the whole Board, each of whom is independent under The Nasdaq Stock
Market, Inc.'s listing standards except for Mr. Blair. The Board of Directors
has not adopted a written charter for the Audit Committee.
The Audit Committee reviewed and discussed the annual financial statements
with management and the independent accountants. As part of this process,
management represented to the Audit Committee that the financial statements were
prepared in accordance with generally accepted accounting principles. The Audit
Committee also received and reviewed written disclosures and a letter from the
accountants concerning their independence as required under applicable standards
for auditors of public companies. The Audit Committee discussed with the
accountants the contents of such materials, the accountants' independence and
the additional matters required under Statement on Auditing Standards No. 61.
Based on such review and discussion, the Audit Committee recommended that the
Board of Directors include the audited consolidated financial statements in
Lawrence Financial's Annual Report on Form 10-KSB for the year ended December
31, 2000 for filing with the Securities and Exchange Commission.
Jack L. Blair
Charles E. Austin, II
Tracy E. Brammer, Jr.
Herbert J. Karlet
Phillip O. McMahon
Robert N. Taylor
STOCKHOLDER PROPOSALS AND NOMINATIONS
The Company must receive proposals that stockholders seek to include in
the proxy statement for the Company's next annual meeting no later than January
24, 2002. If next year's annual meeting is held on a date more than 30 calendar
days from July 5, 2002, a stockholder proposal must be received by a reasonable
time before the Company begins to print and mail its proxy solicitation for such
annual meeting. Any stockholder proposals will be subject to the requirements of
the proxy rules adopted by the Securities and Exchange Commission.
The Company's Bylaws provide that in order for a stockholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a stockholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 90 days prior to the
date of the annual meeting; provided that if less than 100 days' notice or prior
public disclosure of the date of the annual meeting is given to stockholders,
such notice must be received not later than the close of the tenth day following
the day on which notice of the date of the annual meeting was mailed to
stockholders or prior public disclosure of the meeting date was made. A copy of
the Bylaws may be obtained from the Company.
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MISCELLANEOUS
The Company will pay the cost of this proxy solicitation. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Lawrence Financial common stock. In addition to soliciting
proxies by mail, directors, officers and regular employees of the Company may
solicit proxies personally or by telephone without receiving additional
compensation. The Company has retained Reagan and Associates to assist in
soliciting proxies for a fee of $4,000 plus expenses.
The Company's Annual Report to Stockholders has been mailed to persons who
were stockholders as of the close of business on April 24, 2001. Any stockholder
who has not received a copy of the Annual Report may obtain a copy by writing to
the Secretary of the Company. The Annual Report is not to be treated as part of
the proxy solicitation material or as having been incorporated in this proxy
statement by reference.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB, WITHOUT EXHIBITS, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT
CHARGE TO PERSONS WHO WERE STOCKHOLDERS AS OF THE CLOSE OF BUSINESS ON APRIL 24,
2001 UPON WRITTEN REQUEST TO MARY C. KRATZENBERG, CORPORATE SECRETARY, LAWRENCE
FINANCIAL HOLDINGS, INC., 311 SOUTH FIFTH STREET, IRONTON, OHIO 45638.
Whether or not you plan to attend the annual meeting, please vote by
marking, signing, dating and promptly returning the enclosed proxy card in the
enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mary C. Kratzenberg
--------------------------
Mary C. Kratzenberg
Corporate Secretary
Ironton, Ohio
May 24, 2001
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APPENDIX A
LAWRENCE FINANCIAL HOLDINGS, INC.
2001 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS.
(a) "Affiliate" means any "parent corporation" or "subsidiary corporation" of
the Company, as such terms are defined in Sections 424(e) and 424(f) of
the Code.
(b) "Bank" means Lawrence Federal Savings Bank, Ironton, Ohio.
(c) "Board of Directors" means the board of directors of the Company.
(d) "Change in Control" of the Company shall mean:
(i) the acquisition of control of the Company within the meaning of the
Home Owners' Loan Act of 1933, as amended, the Federal Deposit
Insurance Act, and the Rules and Regulations promulgated by the
Office of Thrift Supervision ("OTS") (or its predecessor agency), as
in effect on the date of this Plan (provided, that in applying the
definition of change in control as set forth under the rules and
regulations of the OTS, the Board of Directors shall substitute its
judgment for that of the OTS); or
(ii) at such time as any "person" (as the term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act")) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
voting securities of the Company representing 20% or more of the
Bank's or the Company's outstanding voting securities or the right
to acquire such securities, except for any voting securities
purchased by any employee benefit plan of the Company or its
Subsidiaries;
(iii) at such time as individuals who constitute the Board of Directors on
the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters of the directors
constituting the Incumbent Board (or members who were nominated by
the Incumbent Board), or whose nomination for election by the
Company's stockholders was approved by a Nominating Committee solely
composed of members which are Incumbent Board members (or members
nominated by the Incumbent Board), shall be, for purposes of this
clause (iii), considered as though he or she were a member of the
Incumbent Board;
(iv) at such time as a reorganization, merger, consolidation, or similar
transaction occurs or is effectuated as a result of which 60% of
shares of the common stock of the resulting entity are owned by
persons who were not stockholders of the Company immediately prior
to the consummation of the transaction;
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(v) at such time as substantially all of the assets of the Company are
sold or otherwise transferred to another corporation or other entity
that is not controlled by the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the committee designated, pursuant to Section 3 of the
Plan, to administer the Plan.
(g) "Common Stock" means the common stock of the Company, par value $.01 per
share.
(h) "Company" means Lawrence Financial Holdings, Inc.
(i) "Disability" means any mental or physical condition, with respect to which
an individual qualifies for and receives benefits under a long-term
disability plan of the Company or an Affiliate, or in the absence of such
a long-term disability plan or coverage under such a plan, "Disability"
shall mean a physical or mental condition which, in the sole discretion of
the Committee, is reasonably expected to be of indefinite duration and to
substantially prevent the individual from fulfilling his duties or
responsibilities to the Company or an Affiliate.
(j) "Employee" means any person employed by the Company or an affiliate.
Directors who are also employed by the Company or an Affiliate shall be
considered Employees under the Plan.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(l) "Exercise Price" means the price at which an individual may purchase a
share of Common Stock pursuant to a Stock Option.
(m) "Fair Market Value" means the market price of Common Stock, determined by
the Committee as follows:
(i) If the Common Stock was traded on the date in question on the Nasdaq
Stock Market, then the Fair Market Value shall be equal to the
closing price reported for such date;
(ii) If the Common Stock was traded on a stock exchange for the date in
question, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite transactions report for
such date; and
(iii) If neither of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on
such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in The Wall Street Journal. The
Committee's determination of Fair Market Value shall be conclusive and
binding on all persons.
(n) "Incentive Stock Option" means an option to purchase stock that is
intended to meet the requirements of Section 422 of the Code.
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(o) "Just Cause" means termination because of an individual's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or material breach of any provision of any
employment agreement between the Company and/or any Affiliate.
(p) "Non-Statutory Stock Option" means an option to purchase stock that is not
intended to be and is not identified as an Incentive Stock Option, or an
option granted under the Plan that is intended to be and is identified as
an Incentive Stock Option, but which does not meet the requirements of
Section 422 of the Code.
(q) "Outside Director" means a member of the board(s) of directors of the
Company or an Affiliate who is not also an Employee of the Company or an
Affiliate.
(r) "Plan" means this Lawrence Financial Holdings, Inc. 2001 Stock-Based
Incentive Plan.
(s) "Restricted Stock Award" means an award of restricted stock granted to an
individual pursuant to Section 6 of the Plan.
(t) "Retirement" means a termination of employment (i) from the Company or an
Affiliate at an age and with employment service that would entitle the
individual to a retirement benefit under the "early" or "normal"
retirement age provisions of any tax-qualified retirement plan sponsored
by the Company or an Affiliate or (ii) under circumstances designated as
Retirement by the Committee. "Retirement" with respect to an Outside
Director means the termination of service from the Board of Directors of
the Company and any Affiliate following written notice to the Board of
Directors of such Outside Director's intention to retire.
(u) "Stock Option" means an Incentive Stock Option or a Non-Statutory Stock
Option.
2. PURPOSE.
The implementation of the Plan allows the Committee to grant Employees, Outside
Directors and independent contractors of the Company and its Affiliates certain
forms of equity compensation. The Plan specifically provides the Committee the
ability to grant Incentive Stock Options, Non-Statutory Stock Options and
Restricted Stock Awards, subject to the limitations imposed by the terms of the
Plan.
3. ADMINISTRATION.
(a) The Committee shall administer the Plan. The Committee shall consist of
two (2) or more disinterested directors of the Company, whom the Board of
Directors shall appoint. A member of the Board of Directors shall be
deemed "disinterested" only if he satisfies requirements the Securities
and Exchange Commission may establish for non-employee directors
administering plans intended to qualify for exemption under Rule 16b-3 (or
its successor) of the Exchange Act. The Board of Directors may also appoint
one or more separate committees, each composed of one or more directors of
the Company or an Affiliate, who need not be disinterested, that may make
grants and administer the Plan with respect to individuals who are not
considered officers or directors of the Company under Section 16 of the
Exchange Act.
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(b) The Committee shall:
(i) select the individuals who are to receive grants under the Plan;
(ii) determine the type, number, vesting requirements and other features
and conditions of grants made under the Plan;
(iii) interpret the Plan and Award Agreements (as defined below); and
(iv) make all other decisions related to the operation of the Plan.
The Committee shall adopt any rules or guidelines that it deems
appropriate to implement and administer the Plan. The Committee's
determinations under the Plan shall be final and binding on all persons.
(c) The Committee shall document each grant under the Plan by a written notice
("Award Agreement"). Each Award Agreement shall constitute a binding
contract between the Company or an Affiliate and the grant holder, and
every grant holder, upon acceptance of an Award Agreement, shall be bound
by the terms and restrictions of the Plan and the Award Agreement. The
terms of each Award Agreement shall be established in accordance with the
Plan, but each Award Agreement may include any additional provisions and
restrictions determined by the Committee. In particular, and at a minimum,
the Committee shall set forth in each Award Agreement:
(i) the type of award granted;
(ii) the Exercise Price of any Stock Option;
(iii) the number of shares subject to the grant;
(iv) the expiration date of the grant;
(v) the manner, time and rate (cumulative or otherwise) of exercise or
vesting of the grant; and
(vi) the restrictions, if any, placed upon the grant or upon shares that
may be issued upon exercise or vesting of the grant.
The Chairman of the Committee and such other directors and officers as
shall be designated by the Committee are authorized to execute Award
Agreements on behalf of the Company or an Affiliate and to deliver them to
the recipients of grants.
(d) The Committee may delegate all authority for the determination of forms of
payment to be made or received by the Plan and for the execution of any
Award Notice. The Committee may rely on the descriptions, representations,
reports and estimates provided to it by the management of the Company or
an Affiliate for determinations made pursuant to the Plan.
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4. STOCK SUBJECT TO THE PLAN.
Subject to adjustment under Section 11 of the Plan, the number of shares
reserved for grants under the plan is 108,615. Of this number, 77,582 shares are
reserved for purchase pursuant to the exercise of Stock Options (Incentive Stock
Options and Non-Statutory Stock Options) granted under the Plan and 31,033
shares are reserved for grants of Restricted Stock Awards. The shares of Common
Stock issued under the Plan may be either authorized but unissued shares or
authorized shares previously issued and acquired or reacquired by the Company.
The shares underlying grants under the Plan will be unavailable for any other
use, including future grants under the Plan, except that, to the extent the
grants terminate, expire or are forfeited without vesting or without having been
exercised, new grants of a similar kind may be granted with respect to these
shares.
5. STOCK OPTIONS.
The Committee may, subject to the limitations of this Plan and the availability
of shares of Common Stock reserved but not previously awarded under the Plan,
grant options to purchase Common Stock. The Committee may grant Non-Statutory
Stock Options and/or Incentive Stock Options, subject to terms and conditions as
it may determine, to the extent that such terms and conditions are consistent
with the following provisions:
(a) EXERCISE PRICE. The Exercise Price shall not be less than one hundred
percent (100%) of the Fair Market Value of the Common Stock on the date
of grant.
(b) TERMS OF STOCK OPTIONS. In no event may an individual exercise a Stock
Option, in whole or in part, more than ten (10) years from the date of
grant.
(C) NON-TRANSFERABILITY. An individual may not transfer, assign, hypothecate,
or dispose of a Stock Option in any manner, other than by will or the laws
of intestate succession. The Committee may, however, in its sole
discretion, permit transfer or assignment of a Non-Statutory Stock Option,
if it determines that the transfer or assignment is for valid estate
planning purposes and is permitted under the Code and Rule 16b-3 of the
Exchange Act. For purposes of this Section 5(c), a transfer for valid
estate planning purposes includes, but is not limited to, transfers:
(i) to a revocable inter vivos trust, as to which an individual is both
settlor and trustee; or
(ii) for no consideration to: (1) any member of the individual's
Immediate Family; (2) a trust solely for the benefit of members of
the individual's Immediate Family; (3) any partnership whose only
partners are members of the individual's Immediate Family; or (4)
any limited liability corporation or other corporate entity whose
only members or equity owners are members of the individual's
Immediate Family.
For purposes of this Section 5(c), "Immediate Family" includes, but is not
necessarily limited to, an individual's parents, grandparents, spouse,
children, grandchildren, siblings (including half brothers and sisters),
and individuals who are family members by adoption. Nothing contained in
this Section 5(c) shall be construed to require the Committee to approve
the transfer or assignment of any Non-Statutory Stock Option, in whole or
in part. Receipt of the Committee's approval to transfer or assign a
Non-Statutory Stock Option, in whole or in part, does not mean that the
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Committee must approve a transfer or assignment of any other Non-Statutory
Stock Option, or portion thereof. The transferee or assignee of any
Non-Statutory Stock Option shall be subject to all terms and conditions
applicable to the Stock Option immediately prior to transfer or
assignment, and shall remain subject to any other conditions proscribed by
the Committee with respect to the Stock Option.
(d) SPECIAL RULES FOR INCENTIVE STOCK OPTIONS. Notwithstanding foregoing
provisions, the following rules shall apply to the grant of Incentive
Stock Options:
(i) If an Employee owns or is treated as owning, for purposes of Section
422 of the Code, Common Stock representing more than ten percent
(10%) of the total combined voting securities of the Company at the
time the Committee grants the Incentive Stock Option (a "10%
Owner"), the Exercise Price shall not be less than one hundred and
ten percent (110%) of the Fair Market Value of the Common Stock on
the date of grant.
(ii) An Incentive Stock Option granted to a 10% Owner shall not be
exercisable more than five (5) years from the date of grant.
(iii) To the extent the aggregate Fair Market Value of shares of Common
Stock with respect to which Incentive Stock Options are exercisable
for the first time by an Employee during any calendar year, under
the Plan or any other stock option plan of the Company, exceeds
$100,000, or such higher value as may be permitted under Section 422
of the Code, Stock Options in excess of the limit shall be treated
as Non-Statutory Stock Options. Fair Market Value shall be
determined as of the date of grant for each Incentive Stock Option.
(iv) Each Award Notice for an Incentive Stock Option shall require the
individual to notify the Committee within ten (10) days of any
disposition of shares of Common Stock under the circumstances
described in Section 421(b) of the Code (relating to certain
disqualifying dispositions).
(e) ACCELERATION UPON A CHANGE IN CONTROL. Upon a Change in Control, all Stock
Options granted to an individual and not yet exercised (whether vested or
not) shall immediately become exercisable as of the date of the Change in
Control and shall remain exercisable until the expiration of the Stock
Option term.
(f) TERMINATION OF EMPLOYMENT OR OTHER SERVICE. The following rules apply
upon the termination of an individual's employment or other service:
(i) In General. Unless the Committee determines otherwise, upon
termination of employment or service for any reason other than
Retirement, Disability or death, or Just Cause, the individual may
exercise only those Stock Options that were immediately exercisable
by the individual at the date of termination and only for a period
of three (3) months from the date of termination or, if sooner,
until the expiration of the Stock Option term.
A-6
26
(ii) RETIREMENT. Unless the Committee determines otherwise, upon an
individual's Retirement, the individual may exercise only those
Stock Options that were immediately exercisable by the individual at
the date of Retirement and only for a period of one (1) year from
the date of Retirement or, if sooner, until the expiration of the
Stock Option term.
(iii) DISABILITY OR DEATH. Unless the Committee determines otherwise, upon
termination of an individual's employment or service due to
Disability or death, all Non-Statutory Stock Options shall become
immediately exercisable and shall remain exercisable for a period of
one (1) year from the date of termination or, if sooner, until the
expiration of the Stock Option term.
(iv) JUST CAUSE. Unless the Committee determines otherwise, upon
termination of employment or service for Just Cause, all rights
related to the individual's Stock Options shall expire immediately
upon the effective date of the termination.
6. RESTRICTED STOCK AWARDS.
The Committee may make grants of Restricted Stock Awards, which shall consist of
the grant of some number of shares of Common Stock to an individual upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:
(a) GRANTS OF STOCK. Restricted Stock Awards may only be granted in whole
shares of Common Stock.
(b) NON-TRANSFERABILITY. Except to the extent permitted by the Code, the rules
promulgated under Section 16(b) of the Exchange Act or any successor
statutes or rules:
(i) The recipient of a Restricted Stock Award grant shall not sell,
transfer, assign, pledge, or otherwise encumber shares subject to
the grant until full vesting of such shares has occurred. For
purposes of this section, the separation of beneficial ownership and
legal title through the use of any "swap" transaction is deemed to
be a prohibited encumbrance.
(ii) Unless determined otherwise by the Committee and except in the event
of the Participant's death or pursuant to a domestic relations
order, a Restricted Stock Award grant is not transferable and may be
earned in his or her lifetime only by the individual to whom it is
granted. Upon the death of an individual, a Restricted Stock Award
grant is transferable by will or the laws of descent and
distribution. The designation of a beneficiary shall not constitute
a transfer.
(iii) If the recipient of a Restricted Stock Award is subject to the
provisions of Section 16 of the Exchange Act, shares of Common Stock
subject to the grant may not, without the written consent of the
Committee (which consent may be given in the Award Agreement), be
sold or otherwise disposed of within six (6) months following the
date of grant.
(C) ACCELERATION OF VESTING UPON A CHANGE IN CONTROL. Upon a Change in
Control, all Restricted Stock Awards held by an individual as of the date
of the Change in Control shall immediately become vested and any further
restrictions shall lapse.
A-7
27
(d) TERMINATION OF EMPLOYMENT OR SERVICE. The following rules will govern the
treatment of a Restricted Stock Award upon the termination of an
individual's termination of employment or other service:
(i) IN GENERAL. Unless the Committee determines otherwise, upon the
termination of an individual's employment or service for any reason
other than Retirement, Disability or death or Just Cause, any
Restricted Stock Award in which the individual has not become vested
as of the date of such termination shall be forfeited and any rights
the individual had to such Restricted Stock Award shall become null
and void.
(ii) RETIREMENT. Unless the Committee determines otherwise, upon an
individual's Retirement, any Restricted Stock Award in which the
Participant has not become vested as of the date of Retirement shall
be forfeited and any rights the individual had to such unvested
Restricted Stock Awards shall become null and void.
(iii) DISABILITY OR DEATH. Unless otherwise determined by the Committee,
in the event of a termination of the individual's service due to
Disability or death, all unvested Restricted Stock Awards held by
such Participant shall immediately vest as of the date of such
termination.
(iv) JUST CAUSE. Unless otherwise determined by the Committee, in the
event of the individual's termination for Just Cause, all Restricted
Stock Awards in which the individual had not become vested as of the
effective date of such termination shall be forfeited and any rights
such individual had to such unvested Restricted Stock Awards shall
become null and void.
(e) ISSUANCE OF CERTIFICATES. Unless otherwise held in trust and registered in
the name of the trustee of the trust, reasonably promptly after the date
of grant with respect to shares of Common Stock pursuant to a Restricted
Stock Award, the Company shall cause to be issued a stock certificate,
registered in the name of the individual to whom the Restricted Stock
Award was granted, evidencing such shares; provided, that the Company
shall not cause a stock certificate to be issued unless it has received a
stock power duly endorsed in blank with respect to such shares. Each such
stock certificate shall bear the following legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture provisions and restrictions against
transfer) contained in the Lawrence Financial Holdings, Inc. 2001
Stock-Based Incentive Plan and Award Agreement entered into between
the registered owner of such shares and Lawrence Financial Holdings,
Inc. or its Affiliates. A copy of the Plan and Award Agreement is on
file in the office of the Corporate Secretary of Lawrence Financial
Holdings, Inc., 311 Fifth Street, Ironton, Ohio 45638- 1609.
This legend shall not be removed until the individual becomes vested in such
shares pursuant to the terms of the Plan and Award Agreement. Each certificate
issued pursuant to this Section 6(e) shall be held by the Company or its
Affiliates, unless the Committee determines otherwise.
A-8
28
(f) TREATMENT OF DIVIDENDS. Whenever shares of Common Stock underlying
a Restricted Stock Award are distributed to an individual or beneficiary
thereof under the Plan (or at such other time as the Committee may
determine with respect to an individual), the recipient or beneficiary
shall also be entitled to receive, with respect to each such share
distributed, a payment equal to any cash dividends or other distributions
and the number of shares of Common Stock equal to any stock dividends,
declared and paid with respect to a share of the Common Stock if the
record date for determining shareholders entitled to receive such
dividends or other distributions falls between the date the relevant
Restricted Stock Award was granted and the date the relevant Restricted
Stock Award or installment thereof is issued. There shall also be
distributed an appropriate amount of net earnings, if any, of the trust
with respect to any dividends paid out on the shares related to the
Restricted Stock Award.
(g) VOTING OF RESTRICTED STOCK AWARDS. After a Restricted Stock Award has been
granted but for which the shares covered by such Restricted Stock Award
have not yet been vested, earned and distributed to the individual
pursuant to the Plan, the individual shall be entitled to vote or to
direct the trustee to vote, as the case may be, such shares of Common
Stock which the Restricted Stock Award covers subject to the rules and
procedures adopted by the Committee for this purpose and in a manner
consistent with the trust agreement.
(h) PAYMENT. Payment due to a Participant upon the redemption of a Restricted
Stock Award shall be made in the form of shares of Common Stock.
7. DEFERRED PAYMENTS.
The Committee, in its discretion, may permit an individual to elect to defer the
receipt of all or any part of any payment under the Plan or the Committee may
determine to defer receipt, by some or all individuals, of all or a portion of
any payment. The Committee shall determine the terms and conditions of any
permitted deferral, including the period of deferral, the manner of deferral and
the method used to measure appreciation on deferred amounts until paid.
8. METHOD OF EXERCISING STOCK OPTIONS.
Subject to any applicable Award Agreement, an individual may exercise any Stock
Option, in whole or in part, at such time or times as the Committee specifies in
the applicable Award Agreement. The individual may make payment of the Exercise
Price in such form or forms as the Committee specifies in the Award Agreement,
including, without limitation, payment by delivery of cash, Common Stock or
other consideration (including, where permitted by law and the Committee, Stock
Options) having a Fair Market Value equal to the total Exercise Price on the day
immediately preceding the exercise date. The Committee may also allow payment by
any combination of cash, shares of Common Stock and other consideration,
including exercise by means of a cashless exercise arrangement with a qualified
broker-dealer, as the Committee specifies in the applicable Award Agreement.
A-9
29
9. RIGHTS OF INDIVIDUALS.
No individual shall have any rights as a shareholder with respect to any shares
of Common Stock covered by a grant under this Plan until the date of issuance of
a stock certificate for such Common Stock. Nothing contained in this Plan or in
any Option Notice confers on any person the right to continue in the employ or
service of the Company or an Affiliate or interferes in any way with the right
of the Company or an Affiliate to terminate an individual's services.
10. DESIGNATION OF BENEFICIARY.
With the Committee's consent, an individual may designate a person or persons to
receive, upon the individual's death, any award to which the individual would
then be entitled. This designation shall be made upon forms supplied by and
delivered to the Company and it may be revoked in writing. If an individual
fails to effectively designate a beneficiary, the individual's estate shall be
deemed to be the beneficiary for purposes of the Plan.
11. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of Common Stock, by reason
of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or any other increase or decrease in such shares, without
receipt or payment of consideration by the Company, or in the event an
extraordinary capital distribution is made, the Committee may make adjustments
to previously granted Stock Options, to prevent dilution, diminution, or
enlargement of the rights of individuals, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock or other securities that may underlie future awards under the
Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock or other securities that underlie awards already made under
the Plan; and
(c) adjustments in the Exercise Price of outstanding Stock Options.
The Committee, however, shall not make adjustments that materially change the
value of benefits available to an individual under a previously granted award.
All awards under this Plan shall be binding upon any successors or assigns of
the Company. Notwithstanding the above, in the event of an extraordinary capital
distribution, any adjustment under this Section 11 shall be subject to any
required regulatory approval.
12. TAXES.
(a) Under this Plan, whenever cash or shares of Common Stock are to be
delivered, the Committee is entitled to require as a condition of delivery
that:
(i) the individual remit an amount sufficient to satisfy all related
federal, state, and local withholding tax requirements;
A-10
30
(ii) the withholding of such sums may come from compensation otherwise
due to the individual or from shares of Common Stock due to the
individual under this Plan; or
(iii) any combination of (i) and (ii), above; provided, however, that no
amount shall be withheld from any cash payment or shares of Common
Stock related to an award transferred by the individual in
accordance with this Plan.
(b) If any disqualifying disposition, as described in Section 5(d)(iv), is made
with respect to shares of Common Stock acquired under an Incentive Stock
Option granted in accordance with this Plan, or any transfer described in
Section 5(c) is made, or any election described in Section 13 is made, the
person making such disqualifying disposition, transfer, or election shall
remit to the Company or its Affiliates an amount sufficient to satisfy all
federal, state, and local withholding taxes incurred. In lieu of or in
addition to the foregoing, however, the Company or its Affiliates shall
have the right to withhold such sums from compensation otherwise due to
the individual, or, except in the case of any transfer pursuant to Section
5(c), from any shares of Common Stock due to the individual under this
Plan.
13. NOTIFICATION UNDER SECTION 83(b).
The Committee may, on the date of grant or at a later date, prohibit an
individual from making the election described below. If the Committee has not
prohibited an individual from making this election, and the individual shall, in
connection with any award, make the election permitted under Section 83(b) of
the Code, the individual shall notify the Committee of the election within ten
(10) days of filing notice of the election with the Internal Revenue Service.
This requirement is in addition to any filing and notification required under
the regulations issued under the authority of Section 83(b) of the Code.
14. AMENDMENT OF THE PLAN AND AWARD AGREEMENTS.
(a) Except as provided in paragraph (c) of this Section 14, the Board
of Directors may at any time, and from time to time, modify or amend the
Plan in any respect, prospectively or retroactively; provided, however,
that provisions governing grants of Incentive Stock Options shall be
submitted for shareholder approval to the extent required by law,
regulation, or otherwise. Failure to ratify or approve amendments or
modifications by shareholders shall be effective only as to the specific
amendment or modification requiring shareholder ratification or approval.
Other provisions of this Plan shall remain in full force and effect. No
termination, modification, or amendment of this Plan may adversely affect
the rights of an individual under an outstanding award without the written
permission of the affected individual.
(b) Except as provided in paragraph (c) of this Section 14, the Committee may
amend any Award Agreement, prospectively or retroactively; provided,
however, that no amendment shall adversely affect the rights of an
individual under an outstanding Award Agreement without the written
consent of the affected individual.
(c) In no event shall the Board of Directors amend the Plan or shall the
Committee amend an Award Agreement in any manner that effectively:
A-11
31
(i) Allows any Stock Option to be granted with an Exercise Price below
the Fair Market Value of the Common Stock on the date of grant, or
(ii) Allows the Exercise Price of any Stock Option previously granted
under the Plan to be reduced after the date of grant (except as
provided for pursuant to Section 11 of the Plan).
(d) Notwithstanding anything in this Plan or any Award Agreement to the
contrary, if any award or right under this Plan would, in the opinion of
the Company's accountants, cause a transaction to be ineligible for
pooling of interest accounting that would, but for such award or right, be
eligible for such accounting treatment, the Committee may, in its
discretion, modify, adjust, eliminate or terminate the award or right, to
preserve the availability of pooling of interest accounting.
15. EFFECTIVE DATE AND TERMINATION OF THE PLAN.
The Plan shall become effective on December 29, 2001, but only if, prior to such
date, the Plan is approved by the Company's stockholders. The Plan will be so
approved if at an annual or special meeting of stockholders held prior to such
date a quorum is present and the votes of the holders of a majority of the
Common Stock present or represented by proxy and entitled to vote on such matter
shall be cast in favor of its approval. The right to grant Stock Options and
Restricted Stock Awards under the Plan will terminate upon the earlier of: (i)
ten (10) years after the Plan becomes effective; or (ii) the issuance of a
number of shares of Common Stock pursuant to grants under the Plan equal to the
number of shares reserved under the Plan. The Board of Directors may suspend or
terminate the Plan at any time; provided, however, that no such action may
adversely affect an individual's vested rights under a previously granted award,
without the consent of the affected individual.
16. APPLICABLE LAW.
The Plan and all actions taken or omitted that relate to this Plan will be
governed by the laws of Maryland to the extent not pre-empted by federal law.
17. TREATMENT OF AWARDS BY THE SUCCESSOR UPON A CHANGE IN CONTROL.
In the event of a Change in Control where the Company is not the surviving
entity, the Board of Directors shall require that the successor entity take one
of the following actions with respect to all outstanding awards held by
individuals at the date of the Change in Control:
(a) Assume the awards with the same terms and conditions as granted to the
individual under this Plan;
(b) Replace the awards with comparable awards, subject to the same or more
favorable terms and conditions as the awards granted to the individual
under this Plan, whereby the individual will be granted common stock or
the option to purchase common stock of the successor entity; or
(c) Replace the awards with an immediate cash payment of equivalent value.
A-12
32
LAWRENCE FINANCIAL HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
JULY 5, 2001
4:30 P.M., LOCAL TIME
-------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Charles E. Austin II, Jack L. Blair, Tracy
E. Brammer, Jr., Herbert J. Karlet, Phillip O. McMahon, and Robert N. Taylor,
and each of them, with full power of substitution, to act as proxy for the
undersigned and to vote all shares of common stock of Lawrence Financial
Holdings, Inc. (the "Company") that the undersigned is entitled to vote only at
the annual meeting of stockholders, to be held on July 5, 2001, at 4:30 p.m.,
local time, at 311 South Fifth Street, Ironton, Ohio and at any and all
adjournments thereof, with all of the powers the undersigned would possess if
personally present at such meeting as follows:
1. The election as Directors of both nominees listed (unless the "FOR
ALL EXCEPT" box is marked and the instructions below are complied
with).
Jack L. Blair and Tracy E. Brammer, Jr.
FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
/__/ /__/ /__/
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.
- ------------------------------------------------------------------------------
2. The approval of the Lawrence Financial Holdings, Inc. 2001 Stock-
Based Incentive Plan.
FOR AGAINST ABSTAIN
--- ------- -------
/__/ /__/ /__/
3. The ratification of the appointment of Crowe, Chizek and Company LLP
as independent auditors of Lawrence Financial Holdings, Inc. for the fiscal year
ending December 31, 2001.
FOR AGAINST ABSTAIN
--- ------- -------
/__/ /__/ /__/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED
PROPOSALS.
33
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSALS
LISTED ONLY IF SIGNED AND DATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE
ANNUAL MEETING, INCLUDING WHETHER OR NOT TO ADJOURN THE MEETING, THIS PROXY WILL
BE VOTED BY THE PROXIES IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
THIS PROXY ALSO CONFERS DISCRETIONARY AUTHORITY ON THE BOARD OF DIRECTORS TO
VOTE WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEES
ARE UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND WITH RESPECT TO ANY
OTHER BUSINESS THAT MAY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT
THEREOF.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders and of a
Proxy Statement for the Annual Meeting and of an Annual Report to Stockholders.
Dated:________________________________
______________________________________
SIGNATURE OF STOCKHOLDER
______________________________________
SIGNATURE OF CO-HOLDER (IF ANY)
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
_____________________________
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
34
LAWRENCE FEDERAL SAVINGS BANK LETTERHEAD
Dear ESOP Participant:
On behalf of the Board of Directors, I am forwarding to you the attached
green vote authorization form for the purpose of conveying your voting
instructions to First Bankers Trust Company, N.A.. (the "ESOP Trustee") on the
proposals presented at the Annual Meeting of Stockholders of Lawrence Financial
Holdings, Inc. (the "Company") on July 5, 2001. Also enclosed is a Notice and
Proxy Statement for the Company's Annual Meeting of Stockholders and the
Lawrence Financial Holdings, Inc. Annual Report to Stockholders.
As a participant in the Lawrence Federal Savings Bank Employee Stock
Ownership Plan (the "ESOP"), you are entitled to vote all shares of Company
common stock allocated to your account as of April 24, 2001. These allocated
shares of Company common stock will be voted as directed by you; so long as your
instructions are received by the ESOP Trustee by June 28, 2001. The ESOP
Trustee, subject to its fiduciary duties, will vote any unallocated shares of
Company common stock and any allocated shares of Company common stock for which
timely instructions are not provided in a manner calculated to most accurately
reflect the instructions from participants regarding the shares of Company
common stock allocated to participants' accounts.
In order to direct the voting of the shares of Company common stock
allocated to your ESOP account, please complete, sign and date the attached
green vote authorization form and return it in the enclosed postage-paid
envelope by June 28, 2001. Your vote will not be revealed, directly or
indirectly, to any officer, employee or director of the Company or Lawrence
Federal Savings Bank. The votes will be tallied by the ESOP Trustee and the ESOP
Trustee will use the voting instructions it receives to vote the shares of
Company common stock in the ESOP Trust.
Sincerely,
/s/ Jack L. Blair
-------------------------------------
Jack L. Blair
President and Chief Executive Officer
35
Name: _________________
Shares: ___________________
VOTE AUTHORIZATION FORM
_______________________
I, understand that First Bankers Trust Company, N.A., the ESOP Trustee, is
the holder of record and custodian of all shares of Lawrence Financial Holdings,
Inc. (the "Company") common stock under the Lawrence Federal Savings Bank
Employee Stock Ownership Plan. I understand that my voting instructions are
solicited on behalf of the Company's Board of Directors for the Annual Meeting
of Stockholders to be held on July 5, 2001.
You are to vote my shares as follows:
1. The election of Directors of both nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).
Jack L. Blair and Tracy E. Brammer, Jr.
FOR ALL
FOR VOTE WITHHELD EXCEPT
___ _____________ ______
/__/ /__/ /__/
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.
________________________________________________________________________________
2. The approval of the Lawrence Financial Holdings, Inc. 2001 Stock-Based
Incentive Plan.
FOR AGAINST ABSTAIN
___ _______ _______
/__/ /__/ /__/
3. The ratification of the appointment of Crowe, Chizek and Company LLP as
independent auditors of Lawrence Financial Holdings, Inc. for the fiscal
year ending December 31, 2001.
FOR AGAINST ABSTAIN
___ _______ _______
/__/ /__/ /__/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSALS.
The ESOP Trustee is hereby authorized to vote the shares attributed to me
in its trust capacity as indicated above.
________________________________ _________________________________
Date Signature
Please complete, date, sign and return this form in the enclosed postage-paid
envelope no later than June 28, 2001.
36
[LAWRENCE FEDERAL SAVINGS BANK LETTERHEAD]
Dear 401(k) Plan Participant:
On behalf of the Board of Directors, I am forwarding to you the attached
blue vote authorization form for the purpose of conveying your voting
instructions to the Bank of New York. (the "Employer Stock Fund Trustee") on the
proposals presented at the Annual Meeting of Stockholders of Lawrence Financial
Holdings, Inc. (the "Company") on July 5, 2001. Also enclosed is a Notice and
Proxy Statement for the Company's Annual Meeting of Stockholders and the
Lawrence Financial Holdings, Inc. Annual Report to Stockholders.
As an investor in the Lawrence Financial Holdings, Inc. Stock Fund
("Employer Stock Fund") you are entitled to vote all shares of Company common
stock credited to your account in the Lawrence Federal Savings Bank Employees'
Savings & Profit Sharing Plan and Trust (the "401(k) Plan"). The Employer Stock
Fund Trustee will vote the Company common stock credited to your account as
directed by you, so long as your instructions are received by the Employer Stock
Fund Trustee by June 28, 2001. The Employer Stock Fund Trustee will vote all
shares of Company common stock for which timely instructions were not received
in a manner calculated to most accurately reflect the instructions the Employer
Stock Fund Trustee received.
In order to direct the voting of shares of Company common stock credited
to your account in the 401(k) Plan, please complete and sign the attached BLUE
voting instruction card and return it in the enclosed postage-paid envelope no
later than June 28, 2001. Your vote will not be revealed, directly or
indirectly, to any officer, employee or director of the Company or Lawrence
Federal Savings Bank.
Sincerely,
/s/ Jack L. Blair
-------------------------------------
Jack L. Blair
President and Chief Executive Officer
37
Name: ____________________
Shares: ____________________
VOTE AUTHORIZATION FORM
_______________________
I, understand that The Bank of New York, the Employer Stock Fund Trustee,
is the holder of record and custodian of all shares of Lawrence Financial
Holdings, Inc. (the "Company") common stock held in the Employer Stock Fund
under the Lawrence Federal Savings Bank Employees' Savings & Profit Sharing Plan
and Trust. I understand that my voting instructions are solicited on behalf of
the Company's Board of Directors for the Annual Meeting of Stockholders to be
held on July 5, 2001.
You are to vote my shares as follows:
1. The election of Directors of both nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).
Jack L. Blair and Tracy E. Brammer, Jr.
FOR ALL
FOR VOTE WITHHELD EXCEPT
___ ______________ ______
/_/ /__/ /__/
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.
________________________________________________________________________________
2. The approval of the Lawrence Financial Holdings, Inc. 2001 Stock-Based
Incentive Plan.
FOR AGAINST ABSTAIN
___ _______ _______
/_/ /__/ /_/
3. The ratification of the appointment of Crowe, Chizek and Company LLP as
independent auditors of Lawrence Financial Holdings, Inc. for the fiscal
year ending December 31, 2001.
FOR AGAINST ABSTAIN
___ _______ _______
/_/ /__/ /_/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSALS.
The Employer Stock Trustee is hereby authorized to vote the shares
attributed to me in its trust capacity as indicated above.
_________________________ ___________________________________
Date Signature
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS FORM IN THE ENCLOSED POSTAGE-PAID
ENVELOPE NO LATER THAN JUNE 28, 2001.