<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB/A
(AMENDMENT NO. 2)
Annual report under Section 13 of the
Securities Exchange Act of 1934
For the fiscal year ended DECEMBER 31, 1999
Commission File No.: 0-28162
LENOX BANCORP, INC.
(Name of small business issuer in its charter)
OHIO 31-1445959
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4730 MONTGOMERY ROAD, NORWOOD, OH 45212
(Address of principal executive offices)
Issuer's telephone number: (513) 531-8655
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, NO PAR VALUE
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes No X .
--------- -----------
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained herein, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |X|
State issuer's revenues for its most recent fiscal year: $4,693,893
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days: $3,304,071 as of March
23, 2000 (244,746 shares at $13.50 per share).
As of March 23, 2000, the issuer has 285,028 shares outstanding.
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PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
- -----------------------------------------------------------
The Company's Board of Directors currently consists of seven members;
however, the Board has accepted the resignations of two directors (Messrs.
Robert R. Keller and Curtis L. Jackson), which resignations will be effective
immediately prior to the annual meeting. As a result, the Board resolved to
reduce the size of the Board from seven to five members effective immediately
prior to the annual meeting. Four of the remaining directors are independent and
one is a member of management. Both Messrs. Keller and Jackson's terms were to
expire at the 2000 annual meeting. The remaining directors are currently serving
terms expiring in either 2001 or 2002. Under the Company governing documents,
directors are to serve three year terms. In addition, under Ohio law, no
reduction in the size of the Board shall cause a reduction in a director's term.
Consequently, there is not a director running for election at this
year's annual meeting.
The following table sets forth certain information regarding the current
directors.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED TERM TO
AGE (1) DIRECTOR (2) EXPIRE
------ --------- -------
<S> <C> <C> <C>
Gail R. Behymer......... 60 1993 2002
Henry E. Brown.......... 54 1995 2001
Virginia M. Deisch...... 42 1996 2002
Curtis L. Jackson....... 36 1995 2000(3)
Robert R. Keller........ 59 1987 2000(3)
John C. Lame............ 43 1998 2001
Reba St. Clair.......... 40 1995 2002
</TABLE>
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(1) As of April 21, 2000.
(2) Includes prior service on the Board of Directors of the Bank.
(3) Have declined to stand for reelection.
The present principal occupation and other business experience during the
last five years of each director is set forth below:
GAIL R. BEHYMER holds a B.S. in Industrial Management and a M.B.A. from
the University of Cincinnati. He worked at Procter & Gamble for 34 years with a
background in construction and facilities management. He held the position of
Operations Manager prior to his retirement.
HENRY E. BROWN holds a B.S. degree in Civil Engineering from the
University of Missouri-Rolla. He retired after being employed with Procter &
Gamble for 31 years. Mr. Brown is Chairman of the Greater Cincinnati
Metropolitan YMCA Board of Directors.
VIRGINIA M. DEISCH joined the Bank in 1986 and has served as President and
Chief Executive Officer since 1994 and Executive Managing Officer since 1989.
Ms. Deisch has over 19 years experience in the banking industry.
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CURTIS L. JACKSON holds a B.S. degree in Accounting from Northern Kentucky
University. He has worked at Procter & Gamble for over 12 years and holds the
position of Group Manager Regional Cost Accounting. Mr. Jackson also served as a
Trustee and Treasurer for the Hamilton Christian Center.
ROBERT R. KELLER retired from Procter & Gamble after 36 years of service.
He was the Manager of Railroad Services. Mr. Keller is also a board member of
the Twin Tower Retirement Community Auxiliary.
JOHN C. LAME is currently a partner with J.C. Bradford & Co., a financial
planning investment advisory and brokerage firm located in Cincinnati. Prior to
joining J.C. Bradford in 1997, Mr. Lame served six years as a vice president
with Merrill Lynch. Mr. Lame also worked at Procter & Gamble for 12 years from
1979 to 1991.
REBA ST. CLAIR holds a B.A. in Political Science from Knox College.
Previously an officer in the military, she is currently a Finance Manager at
Procter & Gamble. Ms. St. Clair is a board member for Leadership Cincinnati,
Hamilton County Youth Conference, Lighthouse Youth Services, Playhouse in the
Park, The Cincinnati Art Museum and the Cincinnati Ballet.
Information concerning Executive Officers who are not directors were
previously filed in Part I of the Form 10-KSB filed on March 29, 2000, pursuant
to paragraph (b) of Item 401 of Regulation S-K in reliance on Instruction G.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
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 SEC. 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 its review of the copies of the reports it has received
and written representations provided to the Company from the individuals
required to file the reports, the Company believes that each of the Company's
executive officers and directors has complied with applicable reporting
requirements for transactions in Lenox Bancorp common stock during the fiscal
year ended December 31, 1999.
ITEM 10. EXECUTIVE COMPENSATION.
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DIRECTORS' FEES. Members of the Company's Board of Directors do not
receive Board fees from the Company. Currently, non-employee directors of the
Bank who have served as directors of the Bank for one year or more receive a
retainer of $1,200 per year, plus $370 per meeting attended. The Bank maintains
a Director Emeritus Program whereby retired members of the Board of Directors
may serve as Directors Emeritus.
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SUMMARY COMPENSATION TABLE
The following information is furnished for Ms. Deisch. No other executive
officer of Lenox Bancorp received salary and bonus of $100,000 or more during
the year ended December 31, 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------------
ANNUAL COMPENSATION AWARDS
---------------------------------------------- ------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL COMPENSATION AWARDS OPTIONS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(1) ($) (#) ($)
- ----------------------------- ------- --------- ---------- ----------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Virginia M. Deisch 1999 $ 84,250(2) $ -- $ -- $ -- -- $32,079(3)
President, Chief Executive 1998 74,250 -- -- -- -- 33,341
Officer and Director 1997 68,000 -- -- 37,672 8,513 26,665
</TABLE>
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(1) Does not include the aggregate amount of perquisites and other personal
benefits, which was less than 10% of the total annual salary and bonus
reported.
(2) Includes directors' fees of $5,600. Beginning in 2000, Ms. Deisch will no
longer receive directors' fees.
(3) Consists of employer contribution to the Bank's 401(k) plan of $3,850 and
employee stock ownership allocations with a market value of $28,229.
OPTION VALUE AT FISCAL YEAR END
The following table provides information regarding unexercised stock
options for Ms. Deisch as of December 31, 1999. Ms. Deisch did not exercise any
stock options during the year ended December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
NAME AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(1)
- ----------------------- ---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Virginia M. Deisch 3,406 5,107 $2,555 $3,830
</TABLE>
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(1)Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on December 31, 1999 less the option
exercise price. Options are in-the-money if the market value of shares
covered by the options is greater than the exercise price.
EMPLOYMENT AGREEMENTS
The Bank and the Company entered into employment agreements with Ms.
Deisch. The employment agreements provide for a three-year term for Ms. Deisch.
The Bank employment agreement provides that, commencing on the first anniversary
date and continuing each anniversary date thereafter, the Board of Directors of
the Bank may extend the agreement for an additional year so that the remaining
term shall be three years, unless written notice of non-renewal is given by the
Board of Directors of the Bank after conducting a performance evaluation of Ms.
Deisch. The term of the Company employment agreement may be extended on a daily
basis unless written notice of non-renewal is given by the Board
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of Directors of the Company. The agreements provide that Ms. Deisch's base
salary will be reviewed annually. The current base salary for Ms. Deisch is
$84,250. In addition to the base salary, the agreements provide for, among other
things, participation in stock benefit plans and other fringe benefits
applicable to executive personnel.
The agreements provide for termination by the Bank or the Company for
cause as defined in the agreements, at any time. In the event the Bank or the
Company chooses to terminate Ms. Deisch's employment for reasons other than for
cause, or in the event Ms. Deisch resigns from the Bank and the Company after
specified circumstances that would constitute constructive termination, Ms.
Deisch or, in the event of her death, her beneficiary, would be entitled to
receive an amount equal to the remaining base salary payments due to Ms. Deisch
and the contributions that would have been made on her behalf to any employee
benefit plans of the Bank or the Company during the remaining term of the
agreement; PROVIDED, HOWEVER, that in the case of the Bank's agreement, the
payment shall not, in the aggregate, exceed three times the average of Ms.
Deisch's five preceding taxable years' annual compensation. The Bank and the
Company would also continue and pay for her health and disability coverage for
the remaining term of the agreement.
Under the agreements, if voluntary (after specified circumstances that
would constitute constructive termination) or involuntary termination follows a
change in control of the Bank or the Company (as defined in the employment
agreement), Ms. Deisch or, in the event of her death, her beneficiary, would be
entitled to a severance payment equal to the greater of: (i) the payments due
for the remaining term of the agreement; or (ii) three times the average of the
five preceding taxable years' annual compensation. The Bank and the Company
would also continue her life, health, and disability coverage for thirty-six
months. Notwithstanding that both agreements provide for a severance payment in
the event of a change in control, Ms. Deisch would only be entitled to receive a
severance payment under one agreement.
Payments under the agreements in the event of a change in control may
constitute some portion of an excess parachute payment under Section 280G of the
Internal Revenue Code resulting in the imposition of an excise tax on the
recipient and denial of the deduction for such excess amounts to the Company and
the Bank. Under certain circumstances, severance payments to Ms. Deisch under
the agreements may be subject to prior approval by the Federal Deposit Insurance
Corporation.
Payments under the Bank's agreement will be guaranteed by the Company in
the event that payments or benefits are not paid by the Bank. Payment under the
Company's agreement would be made by the Company. All reasonable costs and legal
fees paid or incurred by Ms. Deisch pursuant to any dispute or question of
interpretation relating to the agreements shall be paid by the Bank or Company,
respectively, if Ms. Deisch is successful on the merits pursuant to a legal
judgment, arbitration or settlement. The employment agreements also provide that
the Bank and Company shall indemnify the Executive to the fullest extent
allowable under Ohio law.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- ------------------------------------------------------------------------
The following table provides information as of April 21, 2000 with respect
to persons believed by the Company to be the beneficial owners of more than 5%
of the Company's outstanding common stock. A person may be considered to own any
shares of common stock over which he or she has, directly or indirectly, sole or
shared voting or investment power.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF COMMON
NAME AND ADDRESS OWNED STOCK OUTSTANDING
- --------------- --------------- -----------------
<S> <C> <C>
Lenox Savings Bank Employee 33,317(1) 11.7%
Stock Ownership Plan
4730 Montgomery Road
Norwood, Ohio 45212
John C. Lame 21,839(2) 7.7%
1260 Hayward Avenue
Cincinnati, Ohio 45208
Virginia M. Deisch 16,342 5.7%
4730 Montgomery Road
Norwood, Ohio 45212
</TABLE>
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(1) Under the terms of the employee stock ownership plan, the employee stock
ownership plan trustee, subject to its fiduciary responsibilities, will vote
unallocated and allocated shares for which no timely voting instructions are
received in the same proportion as shares for which the trustee has received
voting instructions from participants. As of April 21, 2000, 12,470 shares
have been allocated to participants' accounts and 20,847 shares remain
unallocated.
(2) Based on information filed in a Schedule 13D on February 10, 2000, John C.
Lame may be deemed to be the beneficial owner of 21,839 shares.
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The following table provides information about the shares of Lenox Bancorp
common stock that may be considered to be owned by each director or nominee for
director of the Company, by the executive officer named in the Summary
Compensation Table and by all directors and executive officers of the Company as
a group as of April 21, 2000. 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. Unless otherwise indicated, each of the named
individuals has sole voting power and sole investment power with respect to the
shares shown.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NUMBER OF THAT MAY BE ACQUIRED PERCENT OF
SHARES OWNED WITHIN 60 DAYS BY COMMON STOCK
NAME (EXCLUDING OPTIONS) EXERCISING OPTIONS OUTSTANDING(1)
------------------------- -------------------- ---------------------- ----------------
<S> <C> <C> <C>
Gail R. Behymer 3,321 512 1.3%
Henry E. Brown 3,739 512 1.5
Virginia M. Deisch 12,936(2) 3,406 5.7
Curtis L. Jackson 801 512 0.5
Robert R. Keller 2,926(3) 512 1.2
John C. Lame 21,583 -- 7.7
Reba St. Clair 1,206(4) 512 0.6
All directors and executive 53,304
officers as a group (8 persons) 7,670 20.8%
</TABLE>
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(1) Based on 285,028 shares of Lenox Bancorp common stock outstanding and
entitled to vote as of April 21, 2000, plus the number of shares that may be
acquired within 60 days by each individual (or group of individuals) by
exercising stock options.
(2) Includes 5,500 shares held under the Bank's employee stock ownership plan in
trust for the benefit of Ms. Deisch.
(3) Includes 728 shares owned by Mr. Keller's spouse's individual retirement
account.
(4) Includes 100 shares owned by Ms. St. Clair's spouse.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- --------------------------------------------------------
It is the policy of the Bank to make loans to executive officers and
directors on their principal residences. The Bank's policy provides that all
loans made by the Bank, including lines of credit, to its directors be made in
the ordinary course of business, on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons and may not involve more than the normal risk of
collectibility or present other unfavorable features; provided, however the Bank
may offer loans to executive officers on terms not available to the public, but
available to other full-time employees, in accordance with recently modified
federal regulations. All such loans, however, did not involve more than the
normal risk of collectibility or present other unfavorable features. Any loan
made to an executive officer or director must be approved by the Board of
Directors prior to its being committed. As of December 31, 1999, seven of the
Bank's executive officers or directors had a total of fifteen loans outstanding
totaling approximately $1.0 million in the aggregate.
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
LENOX BANCORP, INC.
By: /s/ Virginia M. Deisch
----------------------------------------------
Virginia M. Deisch
Dated: April 24, 2000 President, Chief Executive Officer and Director
(Principal Executive, Financial and Accounting
Officer)
