SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
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|_| 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 ss.240.14a-11(c) or ss.240.14a-12
LSB FINANCIAL CORP.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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LSB FINANCIAL CORP.
101 Main Street
Lafayette, Indiana 47901
(765) 742-1064
March 17, 2000
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of LSB Financial Corp,
we cordially invite you to attend the annual meeting of the LSB Financial Corp.
shareholders. The meeting will be held at 9:00 a.m., Lafayette, Indiana time, on
Wednesday, April 19, 2000, at the Riehle Plaza located at 200 N. Second Street,
Lafayette, Indiana. The annual meeting will include management's report to you
on the Company's 1999 financial and operating performance.
An important aspect of the annual meeting process is the annual
shareholder vote on corporate business items. I urge you to exercise your rights
as a shareholder to vote and participate in this process.
Whether or not you plan to attend the annual meeting, please read the
enclosed proxy statement and then complete, sign and date the enclosed proxy and
return it in the accompanying postpaid return envelope provided as promptly as
possible. This will save the Company additional expense in soliciting proxies
and will ensure that your shares are represented at the meeting.
Your Board of Directors and management are committed to the success of LSB
Financial Corp. and the enhancement of your investment. As President and Chief
Executive Officer, I want to express my appreciation for your confidence and
support.
Very truly yours,
/s/ John W. Corey
JOHN W. COREY
President and Chief Executive Officer
LSB FINANCIAL CORP.
101 Main Street
Lafayette, Indiana 47901
(765) 742-1064
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on April 19, 2000
Notice is hereby given that the Annual Meeting of Shareholders of LSB
Financial Corp. will be held at the Riehle Plaza located at 200 N. Second
Street, Lafayette, Indiana, on Wednesday, April 19, 2000, at 9:00 a.m. local
time. At the annual meeting, shareholders will be asked to consider and vote on
the following proposals:
Proposal I. Election of four directors, each with a term of three
years; and
Proposal II. Ratification of the appointment of Crowe Chizek and Company
LLP, as independent auditors for the Company for the year
ending December 31, 2000.
Shareholders also will transact such other matters as may properly come before
the annual meeting, or any adjournments or postponements thereof. We are not
aware of any other business to come before the meeting.
The record date for the annual meeting is March 10, 2000. Only
shareholders of record at the close of business on that date are entitled to
notice of and to vote at the annual meeting or any adjournment or postponement
thereof. A complete list of shareholders entitled to vote at the meeting will be
available for inspection by shareholders at the offices of the Company during
the five days prior to the annual meeting as well as at the meeting. Your Board
of Directors recommends that you vote "FOR" the proposals.
A proxy card and proxy statement for the annual meeting are enclosed.
Whether or not you plan to attend the annual meeting, please take the time to
vote by signing, dating and mailing the enclosed proxy card which is solicited
on behalf of the Board of Directors. The proxy will not be used if you attend
and vote at the annual meeting in person. Regardless of the number of shares you
own, your vote is very important. Please act today.
Thank you for your continued interest and support.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John W. Corey
JOHN W. COREY
President and Chief Executive Officer
Lafayette, Indiana
March 17, 2000
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Important: The prompt return of proxies will save us the expense of further
requests for proxies to ensure a quorum at the annual meeting. A pre-addressed
envelope is enclosed for your convenience. No postage is required if mailed
within the United States.
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LSB Financial Corp.
101 Main Street
Lafayette, Indiana 47901
(765) 742-1064
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
To be held on April 19, 2000
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INTRODUCTION
The LSB Financial Corp. Board of Directors is using this proxy statement
to solicit proxies from the holders of common stock of LSB Financial Corp. for
use at the Company's Annual Meeting of Shareholders. This proxy statement and
the enclosed form of proxy are first being mailed to our shareholders on or
about March 10, 2000. LSB Financial Corp. is referred to in this proxy statement
as "LSB Financial" or the "Company."
Certain of the information provided herein relates to Lafayette Savings
Bank, FSB, a wholly-owned subsidiary of LSB Financial. Lafayette Savings Bank,
FSB is referred to in this proxy statement as "Lafayette Savings." On June 4,
1999, the Company paid a three-for-two stock split in the form of a 50 percent
stock dividend to its shareholders of record on May 14, 1999. All share and per
share data in this proxy statement have been restated to reflect the effect of
this split.
INFORMATION ABOUT THE ANNUAL MEETING
Time and Place of the Annual Meeting
Our annual meeting will be held as follows:
Date: April 19, 2000
Time: 9:00 a.m., local time
Place: Riehle Plaza
200 N. Second Street
Lafayette, Indiana
Matters to be Considered at the Annual Meeting
At the annual meeting, shareholders of LSB Financial are being asked to
consider and vote upon the following proposals:
Proposal I. Election of four directors, each with a term of three
years; and
Proposal II. Ratification of the appointment of Crowe, Chizek and
Company LLP, as independent auditors for the Company for
the year ending December 31, 2000.
The shareholders also will transact any other business that may properly come
before the annual meeting. As of the date of this proxy statement, we are not
aware of any other business to be presented for consideration at the annual
meeting other than the matters described in this proxy statement.
Your Voting Rights
We have fixed the close of business on March 10, 2000 as the record date
for the annual meeting. Only shareholders of record of LSB Financial common
stock on that date are entitled to notice of and to vote at the annual meeting.
You are entitled to one vote for each share of LSB Financial common stock you
own. On March 10, 2000, 1,381,458 shares of LSB Financial common stock were
outstanding and entitled to vote at the annual meeting.
We maintain an Employee Stock Ownership Plan ("ESOP") which owns
approximately 9.29 percent of LSB Financial common stock. Employees of LSB
Financial and Lafayette Savings participate in the ESOP. Each ESOP participant
instructs the trustee of the plan how to vote the shares of LSB Financial common
stock allocated to his or her account under the ESOP. If an ESOP participant
properly executes the voting instruction card distributed by the ESOP trustee,
the ESOP trustee will vote such participant's shares in accordance with the
shareholder's instructions. Where properly executed voting instruction cards are
returned to the ESOP trustee with no specific instruction as how to vote at the
annual meeting, the trustee will vote the shares "FOR" the election of each of
management's director nominees and "FOR" the ratification of the appointment of
Crowe, Chizek and Company LLP as independent auditors for LSB Financial for the
year ending December 31, 2000. In the event the ESOP participant fails to give
timely voting instructions to the trustee with respect to the voting of the
common stock that is allocated to his or her ESOP account, the ESOP trustee
shall vote such shares "FOR" each of management's director nominees and "FOR"
the ratification of the appointment of Crowe, Chizek and Company LLP . The ESOP
trustee will vote the shares of LSB Financial common stock held in the ESOP but
not allocated to any participant's account in the same proportion as directed by
the ESOP participants who directed the trustee as to the manner of voting their
allocated shares in the ESOP with respect to each such proposal.
If you are the beneficial owner of shares held in "street name" by a
broker, your broker, as the record holder of the shares, is required to vote the
shares in accordance with your instructions. If you do not give instructions to
your broker, your broker will nevertheless be entitled to vote the shares with
respect to "discretionary" items, but will not be permitted to vote your shares
with respect to "non-discretionary" items. In the case of non-discretionary
items, the shares will be treated as "broker non-votes." Under The Nasdaq Stock
Market rules, both the election of directors and the ratification of auditors
are considered "discretionary" items and, therefore, your broker may vote your
shares without instructions from you.
Broker non-votes will be included for purposes of calculating the presence
of a quorum, which is necessary in order for us to conduct the meeting, but are
not otherwise counted as shares entitled to vote on a proposal.
Vote Required to Approve the Proposals
Directors are elected by a plurality of the votes cast, in person or by
proxy, at the annual meeting by holders of LSB Financial common stock. This
means that the four director nominees with the most affirmative votes will be
elected to fill the available seats. Shares that are represented by proxy which
are marked "vote withheld" for the election of one or more director nominees and
broker non-votes will have no effect on the vote on the election of directors.
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If a director nominee is unable to stand for election, the Board of
Directors may either reduce the number of directors to be elected or select a
substitute nominee. If a substitute nominee is selected, the proxy holders will
vote your shares for the substitute nominee, unless you have withheld authority.
Ratification of the appointment of Crowe, Chizek and Company LLP as our
independent auditors for the fiscal year ending December 31, 2000 requires the
affirmative vote of the majority of shares cast, in person or by proxy, at the
annual meeting by holders of LSB Financial common stock. Shareholder abstentions
on the proposal to ratify the appointment of Crowe, Chizek and Company LLP as
our independent auditors will have the same effect as a vote against the
proposal, while broker non-votes will have no effect on the outcome of the vote.
The LSB Financial Board of Directors unanimously recommends that you vote
"FOR" election of each of management's director nominees and "FOR" the proposal
to ratify Crowe, Chizek and Company LLP as our independent auditors for the
fiscal year ending December 31, 2000.
How to Vote at the Annual Meeting
You may vote in person at the annual meeting or by proxy. To ensure your
representation at the annual meeting, we recommend you vote by proxy even if you
plan to attend the annual meeting. You can always change your vote at the
meeting. See "How to Revoke Your Proxy" below.
Voting instructions are included on your proxy card. If you properly give
your proxy and submit it to us in time to vote, the persons named as your proxy
will vote your shares as you have directed. If you submit your proxy but do not
make a specific choice as to how to vote, your proxy will follow the LSB
Financial Board's recommendation and vote your shares "FOR" the election of each
of management's director nominees and "FOR" the proposal to ratify Crowe, Chizek
and Company LLP as our independent auditors for the fiscal year ending December
31, 2000.
The persons named in the proxy will have the discretion to vote on any
other business properly presented for consideration at the annual meeting in
accordance with their best judgment. We are not aware of any other matters to be
presented at the shareholders' annual meeting other than those described in the
Notice of Annual Meeting of Shareholders accompanying this document.
You may receive more than one proxy card depending on how your shares are
held. For example, you may hold some of your shares individually, some jointly
with your spouse and some in trust for your children -- in which case you will
receive three separate proxy cards to vote.
How to Revoke Your Proxy
You may revoke your proxy before it is voted by:
o submitting a new proxy with a later date,
o notifying the Corporate Secretary of LSB Financial in writing before
the annual meeting that you have revoked your proxy, or
o voting in person at the annual meeting.
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If you plan to attend the annual meeting and wish to vote in person, we
will give you a ballot at the annual meeting. However, if your shares are held
in the name of your broker, bank or other nominee, you must bring a letter from
the nominee indicating that you were the beneficial owner of LSB Financial
common stock on March 10, 2000, the record date for voting at the annual
meeting.
Proxy Solicitation Costs
We will pay our own costs of soliciting proxies. In addition to this
mailing, our directors, officers and employees may also solicit proxies
personally, electronically or by telephone. We will also reimburse brokers and
other nominees for their expenses in sending these materials to you and
obtaining your voting instructions.
SHARE OWNERSHIP OF LSB FINANCIAL CORP. COMMON STOCK
Stock Ownership of Significant Shareholders, Directors and Executive Officers
The following table presents information regarding the beneficial
ownership of LSB Financial common stock as of March 10, 2000, by:
o those persons or entities (or group of affiliated persons or
entities) known by management to beneficially own more than five
percent of the outstanding common stock of LSB Financial;
o each director and director nominee of LSB Financial;
o each executive officer of LSB Financial named in the Summary
Compensation Table appearing under "Executive Compensation" below;
and
o all of the executive officers and directors of LSB Financial as a
group.
The persons named in this table have sole voting power for all shares of
common stock shown as beneficially owned by them, subject to community property
laws where applicable and except as indicated in the footnotes to this table.
The address of each of the beneficial owners, except where otherwise indicated,
is the same address as LSB Financial. An asterisk (*) in the table indicates
that an individual beneficially owns less than one percent of the outstanding
common stock of LSB Financial.
Beneficial ownership is determined in accordance with the rules of the
SEC. In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock subject to
outstanding options held by that person that are currently exercisable or
exercisable within 60 days after March 10, 2000 are deemed outstanding. These
shares, however, are not deemed outstanding for the purpose of computing the
percentage ownership of any other person.
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Shares Percent
Beneficially of
Beneficial Owners Owned(1) Class
- ----------------------------------------------------------- ------------ ---------
LSB Financial Corp. Employee Stock Ownership Plan(2) 128,351 9.29%
James A. Andrew, Director 39,004(3) 2.81%
John W. Corey, Director, President and CEO 50,305 3.59%
Mary Jo David, Director, Vice President, CFO and Secretary 20,676 1.49%
Harry A. Dunwoody, Director and Senior Vice President 23,732 1.71%
Philip W. Kemmer, Director 8,004 *
Thomas R. McCully, Director 16,412(4) 1.19%
Peter Neisel, Director 24,194 1.74%
Mariellen M. Neudeck, Chairman of the Board 28,326(5) 2.04%
Jeffrey A. Poxon, Director 19,980(6) 1.44%
John C. Shen, Director 71,326 5.14%
Charles W. Shook, Director 900 *
Directors and executive officers of the Corporation
as a group (12 persons)(7) 326,123 22.42%
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(1) Includes shares of common stock as to which the named individual has the
right to acquire beneficial ownership, currently or within 60 days of the
March 10, 2000 voting record date, pursuant to the exercise of stock
options, as follows:
Mr. Andrew - 5,107 shares Mr. Corey - 20,431 shares Ms. David - 8,512 shares
Mr. Dunwoody - 8,512 shares Mr. Kemmer - 5,107 share Mr. McCully - 750 shares
Mr. Neisel - 5,107 shares Ms. Neudeck - 5,107 share Mr. Poxon - 5,107 shares
Mr. Shen - 5,107 shares Mr. Shook - 750 shares
(2) Represents shares held by the ESOP, 46,871 shares of which have been
allocated to accounts of participants. Pursuant to the terms of the ESOP,
each ESOP participant has the right to direct the voting of shares of
common stock allocated to his or her account. First Bankers Trust Company,
N.A., Quincy, Illinois, as the trustee of the ESOP, may be deemed to
beneficially own the shares held by the ESOP which have not been allocated
to the accounts of participants.
(3) Includes 7,569 shares as to which Mr. Andrew may be deemed to have shared
beneficial ownership.
(4) Includes 12,402 shares as to which Mr. McCully may be deemed to have
shared beneficial ownership.
(5) Includes 6,334 shares as to which Ms. Neudeck may be deemed to have shared
beneficial ownership.
(6) Includes 3,204 shares as to which Mr. Poxon may be deemed to have shared
beneficial ownership.
(7) Includes shares held directly, as well as shares held jointly with family
members, shares held in retirement accounts, held in a fiduciary capacity,
held by certain of the group members' families, or held by trusts of which
the group member is a trustee or substantial beneficiary, with respect to
which shares the group member may be deemed to have sole or shared voting
and/or investment powers. This amount also includes 73,001 shares of
common stock issuable upon exercise of the directors' and executive
officers' stock options.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
LSB Financial's common stock (or any other equity securities, of which there are
none), to report their initial ownership of the Company's common stock and any
subsequent changes in that ownership to the SEC. Specific due dates for these
reports have been
5
established by the SEC and the Company is required to disclose in this proxy
statement any late filings or failures to file.
To our knowledge, based solely on a review of the copies of such reports
furnished to us and written representations that no other reports were required
during the fiscal year ended December 31, 1999, all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
10% beneficial owners were complied with except that Messrs. Kemmer and Shen,
directors of the Company, each filed one report relating to one transaction
late.
PROPOSAL I - ELECTION OF DIRECTORS
Our Board of Directors consists of eleven members. Approximately one-third
of the directors are elected annually to serve for a three-year period or until
their respective successors are elected and qualified. All of our nominees
currently serve as LSB Financial directors.
The table below sets forth information regarding our Board of Directors,
including their age, position with LSB Financial and term of office. If any
director nominee is unable to serve before the election, your proxy authorizes
us to vote for a replacement nominee if our Board of Directors names one. At
this time, we are not aware of any reason why a nominee might be unable to serve
if elected. Our bylaws, however, require a director upon reaching 70 years of
age to retire from the Board of Directors as of the annual meeting next
following attainment of age 70. Mr. Shen, a current nominee, will be 70 years of
age on October 20, 2000 and, therefore, will be required to retire from the
Board of Directors effective as of the date of our 2001 annual meeting. Upon his
retirement, the Board of Directors will either reduce the size of the Board to
eliminate the vacancy created by his retirement or select a new director to fill
the vacancy for his remaining term. At this time the Board of Directors has not
identified or considered any person to fill Mr. Shen's board seat. Except as
disclosed in this proxy statement, there are no arrangements or understandings
between any nominee and any other person pursuant to which such nominee was
selected. The Board of Directors recommends you vote "FOR" each of the director
nominees.
Term of
Director Office
Name Age Position(s) Held Since(1) Expires
- -------------------- ---- ------------------------------------------------ -------- -------
Nominee
James A. Andrew 51 Director 1978 2003
John W. Corey 65 President, Chief Executive Officer and Director 1991 2003
Philip W. Kemmer 56 Director 1985 2003
John C. Shen 69 Director 1986 2003
Directors Remaining in Office
Thomas R. McCully 59 Director 1999 2002
Peter Neisel 61 Director 1990 2002
Jeffrey A. Poxon 53 Director 1992 2002
Mary Jo David 50 Vice President, Chief Financial Officer, 1999 2002
Secretary and Director
Harry A. Dunwoody 53 Senior Vice President and Director 1993 2001
Mariellen M. Neudeck 58 Chairman of the Board 1986 2001
Charles W. Shook 44 Director 1999 2001
- ------------------------------
(1) Includes service as a director of Lafayette Savings.
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The principal occupation of each director of LSB Financial and each of the
nominees for director is set forth below. All directors and nominees have held
their present position for at least five years unless otherwise indicated.
James A. Andrew. Mr. Andrew is President and owner of Henry Poor Lumber
Co. and Homeworks, retailers of building materials. He is also involved in
residential and commercial land development.
John W. Corey. Mr. Corey is President, Chief Executive Officer and
Director of LSB Financial and its wholly-owned subsidiary, Lafayette Savings. He
has held his position with the Company since its formation in 1994 and with
Lafayette Savings since 1991.
Philip W. Kemmer. Mr. Kemmer, retired as of December 31, 1999, became the
business administrator of the First Assembly of God Church in July, 1995. From
1991 to 1995, he was a broker with The Prudential Key Realty, real estate
brokerage firm.
John C. Shen. Mr. Shen is the developer and sole owner of Crestview
Apartments and Crestview North Apartments, six different complexes of apartment
buildings. He is also a director of Turner Construction Co., an industrial and
institutional construction company.
Thomas R. McCully. Mr. McCully is a partner in the law firm of Stuart &
Branigin and has worked there since 1966.
Peter Neisel. Mr. Neisel is President and Chief Executive Officer of
Schwab Corp., a manufacturer and seller of office equipment.
Jeffrey A. Poxon. Mr. Poxon is the Senior Vice President, Investments and
Chief Investment Officer of The Lafayette Life Insurance Company.
Mary Jo David. Ms. David is Vice-President, Chief Financial Officer and
Secretary of LSB Financial and Lafayette Savings. She has held these positions
with the Company since its formation in 1994 and with Lafayette Savings since
1992.
Harry A. Dunwoody. Mr. Dunwoody has served as Senior Vice President of
Lafayette Savings since 1989 and was elected as a Director of the bank in 1993.
He has held the same positions with the Company since its formation in 1994. He
is responsible for the residential and consumer lending functions of the bank.
Mariellen M. Neudeck. Ms. Neudeck is a Vice President of Greater Lafayette
Health Services, Inc. and is responsible for the administration of nine
departments and seven functional areas of the hospital. She was elected as
Chairman of the Board of Lafayette Savings in 1993 and of LSB Financial in 1994.
Charles W. Shook. Mr. Shook is Vice President and co-manager of Coldwell
Banker/The Shook Agency, a real estate brokerage business. He has held these
positions since 1989.
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MEETINGS AND COMMITTEES
Meetings
Meetings of the Board of Directors of LSB Financial are generally held on
a monthly basis. Meetings of the Board of Directors of Lafayette Savings, the
Company's wholly-owned operating subsidiary, are also generally held on a
monthly basis. Membership on the Boards of Directors of LSB Financial and
Lafayette Savings are identical. During 1999, the LSB Financial Board of
Directors and the Lafayette Savings Board of Directors each conducted 12 regular
board meetings and no special board meetings. Each director attended at least
75% of each of the LSB Financial Board and Lafayette Savings Board meetings and
any committees on which he or she served during fiscal 1999.
Committees
The Board of Directors of LSB Financial currently does not have any
standing committees as the business of LSB Financial currently consists solely
of that of its operating subsidiary, Lafayette Savings. Accordingly, all board
committees are at the operating subsidiary level and serve the same function as
if they were at the Company level. Lafayette Savings, whose board of directors
is identical to that of LSB Financial's, has a standing audit committee and
compensation committee. Lafayette Savings also has other Board committees which
meet from time to time as needed to review various other functions of the bank.
The entire Board of Directors of LSB Financial serves as the Company's
nominating committee. The Board of Directors of LSB Financial expects to
establish an audit committee at the Company level during fiscal 2000, consisting
of the same members who serve on the audit committee for Lafayette Savings, in
response to new regulations issued by the SEC.
Audit Committee Compensation Committee
--------------- ----------------------
Peter Neisel James A. Andrew
Mariellen M. Neudeck Peter Neisel
Charles W. Shook Mariellen M. Neudeck
Jeffrey A. Poxon
The audit committee met five times during fiscal 1999. The functions of
the audit committee are as follows:
o review significant financial information for the purpose of giving
added assurance that the information is accurate and timely and that
it includes all appropriate financial statement disclosures;
o ascertain the existence of effective accounting and internal control
systems;
o oversee the entire audit function both internal and independent;
o provide an effective communication link between the auditors
(internal and independent) and the Board of Directors;
8
The compensation committee met once during fiscal 1999. The functions of
the compensation committee are as follows:
o make salary and bonus recommendations, administer our stock option
and incentive plan and restricted stock plan, and determine terms
and conditions of employment of our officers;
o oversee the administration of our employee benefit plans covering
employees generally; and
o make recommendations to the Board of Directors with respect to our
compensation policies.
The entire Board of Directors of LSB Financial selects nominees for
election as directors. Nominations of persons for election to the Board of
Directors may be made only by or at the direction of the Board of Directors or
by any shareholder entitled to vote for the election of directors who complies
with the notice procedures set forth in the bylaws of LSB Financial. Pursuant to
the Company's bylaws, nominations by shareholders must be delivered in writing
to the Secretary of LSB Financial at least 30 days prior to the date of the
annual meeting; provided, however, that in the event less than 40 days' notice
of the date of the annual meeting is given or made to shareholders, such
nominations by shareholders must be delivered to LSB Financial no later than the
close of business on the 10th day following the earlier of the day on which
notice of the date of the annual meeting was mailed or public announcement of
the date of the annual meeting was first made.
COMPENSATION OF DIRECTORS
The members of the Boards of Directors of LSB Financial and Lafayette
Savings are identical. Directors of LSB Financial are not compensated for
service on the Company's Board of Directors. Directors of Lafayette Savings,
however, are compensated for service on the Lafayette Savings Board of
Directors. During fiscal 2000, each non-employee director of Lafayette Savings
is being paid an annual retainer of $10,500, except for the Chairman of the
Board, who will receive an annual retainer of $12,500. Each non- employee
director also receives $50 for each loan committee meeting attended. Directors
who are also employees of Lafayette Savings do not receive any fees for their
service on the Board or any Board committees.
In April 1999, we granted to each of Directors McCully and Shook an option
to purchase 3,750 shares of LSB Financial common stock in connection with their
appointment to the Board of Directors. The options were granted at an exercise
price of $18.083 per share. Each option vests in equal annual installments over
a five year period from the date of such grant.
Thomas R. McCully, a director of LSB Financial and Lafayette Savings, is a
partner in the law firm of Stuart & Branigin, which firm acts as counsel to
Lafayette Savings from time to time. The legal fees received by the law firm
from professional services rendered to Lafayette Savings during the year ended
December 31, 1999 did not exceed five percent of the firm's gross revenues.
9
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth summary information concerning compensation
awarded to, earned by or paid to Mr. Corey, LSB Financial's President and Chief
Executive Officer for services rendered in all capacities with the Company and
Lafayette Savings. No other executive officer received aggregate compensation,
which includes salary and bonus, exceeding $100,000, for services rendered in
1999. Mr. Corey received perquisites and other personal benefits in addition to
his salary and bonus during the periods stated. The aggregate amount of these
perquisites and other personal benefits, however, did not exceed the lesser of
$50,000 or 10% of his total annual salary and bonus and, therefore, has been
omitted as permitted by the rules of the SEC.
Long Term
Compensation
Annual Compensation Awards
------------------- -----------------------
Restricted Options/ All Other
Stock SARs Compensation
Name and Principal Position Year Salary ($) Bonus ($) Awards ($) (#) ($)
- --------------------------- ---- ---------- --------- ---------- -------- ------------
John W. Corey 1999 $138,750 $ -- -- -- $43,997(1)
President and CEO 1998 132,150 -- -- -- 38,892
1997 123,150 -- -- -- 41,013
- ------------------------
(1) Includes Lafayette Savings's annual contribution to the following plans on
behalf of Mr. Corey: Employee Stock Ownership Plan - $9,318; and
Supplemental Retirement Benefit Plan - $34,679. Lafayette Savings'
Employee Stock Ownership Plan contribution on behalf of Mr. Corey had a
market value of $107,894 as of December 31, 1999.
Aggregate Option Exercises in Last Fiscal Year and FY-End Option Values
The following table summarizes certain information relating to stock
options held by Mr. Corey during the fiscal year ended December 31, 1999 and the
value of such options at December 31, 1999. Value realized upon exercise is the
difference between the fair market value of the underlying stock on the exercise
date and the exercise or base price of the option. The value of an unexercised,
in-the-money option at fiscal year-end is the difference between its exercise or
base price and the fair market value of the underlying stock on December 31,
1999, which was $13.375 per share, based on the closing price of LSB Financial
common stock as reported on the Nasdaq Stock Market. These values, unlike the
amounts set forth in the column "Value Realized," have not been, and may never
be, realized. These options have not been, and may not ever be, exercised.
Actual gains, if any, on exercise will depend on the value of LSB Financial
common stock on the date of exercise. There can be no assurance that these
values will be realized. Unexercisable options are those which have not yet
vested.
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at FY-End (#) at FY-End ($)
-----------------------------------------------------------
Shares
Acquired on
Exercise Value Exercisable Unexercisable Exercisable Unexercisable
Name (#) Realized ($) (#) (#) ($) ($)
- -------------- ------------ ------------ ----------- ------------- ----------- -------------
John W. Corey -- -- 20,431 5,108 $83,318 $20,830
10
Special Termination Agreement
Lafayette Savings entered into a special termination agreement with John
W. Corey in February 1995, upon completion of Lafayette Savings' mutual to stock
conversion. The agreement provides for an initial term of three years and
extensions of one year, in addition to the then-remaining term under the
agreement, on each anniversary of the effective date of the agreement.
Extensions of the agreement are subject to an annual evaluation of Mr. Corey's
performance by the Board of Directors. As of December 31, 1999, Mr. Corey had
approximately three years remaining on his agreement.
Under the agreement, Mr. Corey will receive the termination benefits
described below if, following a "change in control" of LSB Financial or
Lafayette Savings, as that term is defined in the agreement, (i) his employment
is involuntarily terminated, other than for cause or as a result of his death or
disability, or (ii) he voluntarily terminates his employment following any
material demotion, loss of title or office, significant reduction in authority,
significant reduction in annual compensation or benefits, or relocation of his
principal place of employment by more than 30 miles from its location
immediately prior to the change in control. Mr. Corey is not entitled to any
termination benefits under his agreement if following a change in control he is
terminated for cause or his employment ceases as a result of his death or
disability.
The termination benefits payable to Mr. Corey under his agreement are as
follows: (i) a lump sum cash payment equal to 299% of his "base amount" of
compensation as determined in accordance with Section 280G of the Internal
Revenue Code of 1986 and (ii) for a period of 36 months after his termination
following a change in control, continued life, medical, dental and disability
coverage substantially identical to the coverage he was receiving at the time of
his termination. Any payments or benefits received by Mr. Corey under his
agreement or otherwise in connection with a change in control of LSB Financial
or Lafayette Savings will be reduced to the extent necessary to permit such
payments to be fully deductible pursuant to Section 280G of the Internal Revenue
Code by the Company for federal income tax purposes. Based on his current
salary, if Mr. Corey was terminated as of January 1, 2000 under circumstances
entitling him to the termination benefits described above, he would have been
entitled to receive a lump sum cash payment of approximately $498,000.
PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF AUDITORS
The LSB Financial Board of Directors has renewed its arrangement for
Crowe, Chizek and Company LLP to be its independent auditors for the year ending
December 31, 2000, subject to the ratification of the appointment by
shareholders. A representative of Crowe, Chizek and Company LLP is expected to
attend the meeting to respond to appropriate questions and will have an
opportunity to make a statement if he or she so desires.
The Board of Directors recommends that shareholders vote "FOR" the
ratification of the appointment of Crowe, Chizek & Company LLP as LSB
Financial's independent auditors for the year ending December 31, 2000.
11
CERTAIN TRANSACTIONS
Lafayette Savings has followed a policy of granting loans to officers and
directors. Loans to directors and executive officers are made in the ordinary
course of business and on the same terms and conditions as those of comparable
transactions with the general public prevailing at the time, in accordance with
our underwriting guidelines, and do not involve more than the normal risk of
collectibility or present other unfavorable features.
All loans made by Lafayette Savings to its directors and executive
officers are subject to the Office of Thrift Supervision regulations restricting
loan and other transactions with affiliated persons of Lafayette Savings. All
loans to directors and executive officers were performing in accordance with
their terms at December 31, 1999.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in LSB Financial's proxy materials
for next year's annual meeting of shareholders, any shareholder proposal must be
received at LSB Financial's executive office located at 101 Main Street,
Lafayette, Indiana 47901 on or before November 17, 2000. To be considered for
presentation at next years annual meeting, although not included in the proxy
statement, any shareholder proposal must be received at our executive office on
or before February 16, 2001; provided, however, that in the event that the date
of next year's annual meeting is held before March 30, 2001 or after June 18,
2001, the shareholder proposal must be received on or before the close of
business on the later of the 60th day prior to such annual meeting or the tenth
day following the day on which notice of the date of the annual meeting was
mailed or public announcement of the date of such meeting was made, whichever
occurs first.
All shareholder proposals for inclusion in LSB Financial's proxy materials
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934 and, as with any shareholder proposal regardless
of whether it is included in LSB Financial's proxy materials, the Company's
Articles of Incorporation and Bylaws, and Indiana law.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
annual meeting other than the matters described above in this proxy statement.
However, if any other matters should properly come before the meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
12
REVOCABLE PROXY
LSB FINANCIAL CORP.
Annual Meeting of Shareholders o April 19, 2000
This proxy is solicited on behalf of the Board of Directors of
LSB Financial Corp.
The undersigned hereby appoints the members of the Board of Directors of LSB
Financial Corp., and its survivors, with full power of substitution, and
authorizes them to represent and vote, as designated below and in accordance
with their judgment upon any other matters properly presented at the annual
meeting, all shares of LSB Financial Corp. common stock held of record by the
undesigned at the close of business on March 10, 2000, at the annual meeting of
shareholders to be held on Wednesday, April 19, 2000, at 9:00 a.m. local time,
and at any and all adjournments or postponements thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is made, this proxy will be
voted FOR each of the proposals set forth herein. Should a director nominee be
unable to serve as a director, an event that we do not currently anticipate, the
persons named in this proxy reserve the right, their discretion, to vote for a
substitute nominee designated by the Board of Directors.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
-----------
(Continued on other side) SEE REVERSE
SIDE
-----------
A |X| Please mark your votes as in this example using dark ink only.
FOR all nominees WITHHOLD
listed (except AUTHORITY
as marked to the to vote for all
contrary below). nominees listed.
Proposal 1: The |_| |_|
election of Nominees: James A. Andrew
directors of LSB John W. Corey
Financial Corp., Philip W. Kemmer
each with a term and John C. Shen
of three years.
To withhold authority to vote for any nominee(s), write such nominee(s)'
name(s) below:
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" the listed proposals.
FOR AGAINST ABSTAIN
Proposal 2: Ratification of Crowe, Chizek |_| |_| |_|
and Company LLP as independent auditors
for the Company for the year ending
December 31, 2000.
This proxy may be revoked at any time before it is voted by delivering to the
Secretary of LSB Financial Corp. on or before the taking of the vote at the
annual meeting, a written notice of revocation bearing a later date than this
proxy or a later dated proxy relating to the same shares of LSB Financial Corp.
common stock, or by attending the annual meeting and voting in person.
Attendance at the annual meeting will not in itself constitute the revocation of
a proxy. If this proxy is properly revoked as described above, then the power of
such attorneys and proxies shall be deemed terminated and of no further force
and effect.
The undersigned acknowledges receipt from LSB Financial Corp. prior to the
execution of this proxy, of the Notice of Annual Meeting scheduled to be held on
April 19, 2000, an Annual Report to Shareholders for the year ended December 31,
1999, and a proxy statement relating to the business to be addressed at the
meeting.
____________________________________Date: _____________, 2000
SIGNATURE OF STOCKHOLDER
____________________________________Date: _____________, 2000
SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears above on this card. When signing as
attorney, executors, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.