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 ss. 240.14a-11(c) or ss. 240.14a-12
LONDON FINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
---------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
O-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
LONDON FINANCIAL CORPORATION
2 East High Street
London, Ohio 43140
(614) 852-0787
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1998 Annual Meeting of Shareholders of
London Financial Corporation ("LFC") will be held at the office of The Citizens
Loan & Savings Company, 2 East High Street, London, Ohio 43140, on January 22,
1998, at 10:00 a.m., Eastern Time (the "Annual Meeting"), for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
1. To re-elect four directors of LFC for terms expiring in 2000;
2. To ratify the selection of Grant Thornton LLP as the auditors
of LFC for the current fiscal year; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
Only shareholders of LFC of record at the close of business on December
5, 1997, will be entitled to receive notice of and to vote at the Annual Meeting
and at any adjournments thereof. Whether or not you expect to attend the Annual
Meeting, we urge you to consider the accompanying Proxy Statement carefully and
to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM MAY BE ASSURED
AT THE ANNUAL MEETING. The giving of a proxy does not affect your right to vote
in person in the event you attend the Annual Meeting.
By Order of the Board of Directors
John J. Bodle, President
London, Ohio
December 11, 1997
<PAGE>
LONDON FINANCIAL CORPORATION
2 East High Street
London, Ohio 43140
(614) 852-0787
PROXY STATEMENT
PROXIES
The enclosed Proxy is being solicited by the Board of Directors of London
Financial Corporation, an Ohio corporation ("LFC"), for use at the 1998 Annual
Meeting of Shareholders of LFC to be held at the office of The Citizens Loan &
Savings Company ("Citizens"), 2 East High Street, London, Ohio 43140, on January
22, 1998, at 10:00 a.m., Eastern Time, and at any adjournments thereof (the
"Annual Meeting"). Without affecting any vote previously taken, the Proxy may be
revoked by a shareholder by execution of a later dated proxy which is received
by LFC before the Proxy is exercised or by giving notice of revocation to LFC in
writing or in open meeting before the Proxy is exercised. Attendance at the
Annual Meeting will not, of itself, revoke a proxy.
Each properly executed Proxy received prior to the Annual Meeting and not
revoked will be voted as specified thereon or, in the absence of specific
instructions to the contrary, will be voted:
FOR the re-election of John I. Andrix, Rodney A. Bell, John J. Bodle,
and Shirley C. Hansgen as directors of LFC for terms expiring in 2000;
and
FOR the ratification of the selection of Grant Thornton LLP
("Grant Thornton") as the auditors of LFC for the current
fiscal year.
Proxies may be solicited by the directors, officers and other employees of
LFC and Citizens, in person or by telephone, telegraph or mail only for use at
the Annual Meeting. Such proxies will not be used for any other meeting. The
cost of soliciting proxies will be borne by LFC.
Only shareholders of record as of the close of business on December 5, 1997
(the "Voting Record Date"), are entitled to notice of and to vote at the Annual
Meeting. Each such shareholder will be entitled to cast one vote for each share
owned. LFC's records disclose that, as of the Voting Record Date, there were
510,160 votes entitled to be cast at the Annual Meeting.
This Proxy Statement is first being mailed to shareholders of LFC on or
about December 18, 1997.
VOTE REQUIRED
Election of Directors
Under Ohio law and LFC's Code of Regulations (the "Regulations"), the four
nominees receiving the greatest number of votes will be elected as directors.
Shares as to which the authority to vote is withheld are not counted toward the
election of directors or toward the election of the individual nominees
specified in the enclosed Proxy. If the enclosed Proxy is signed and dated by
the shareholder, but no vote is specified thereon, the shares held by such
shareholder will be voted FOR the re-election of the four nominees. Shareholders
may not cumulate their votes in the election of directors.
1
<PAGE>
Ratification of Selection of Auditors
The affirmative vote of the holders of a majority of the shares of LFC
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of Grant Thornton as the auditors of LFC for the current fiscal
year. Generally, shares which are held by a nominee for a beneficial owner and
which are represented in person or by proxy at the Annual Meeting, but not voted
with respect to the ratification of the selection of Grant Thornton
("Non-votes"), will have the same effect as votes against the approval of such
ratification, as will abstentions. If, however, shares are represented at the
Annual Meeting by a shareholder who signed and dated a proxy in the form of the
enclosed Proxy, but who did not vote on the ratification of the selection of
Grant Thornton by marking the appropriate block on the Proxy, such shares will
be voted FOR the ratification of the selection of Grant Thornton and will not be
considered Non-votes.
VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the only
person known to LFC to own beneficially more than five percent of the
outstanding common shares of LFC as of December 10, 1997:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address Beneficial Ownership Shares Outstanding
<S> <C> <C>
First Bankers Trust, N.A.
1201 Broadway 42,320 (1) 8.3%
Quincy, Illinois 62301
- ----------------------------
<FN>
(1) Consists of shares held by First Bankers Trust, N.A., as the trustee
for the London Financial Corporation Employee Stock Ownership Plan (the
"ESOP").
</FN>
</TABLE>
The following table sets forth certain information with respect to the
number of common shares of LFC beneficially owned by each director of LFC and by
all directors and executive officers of LFC as a group as of December 10, 1997:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address (1) Beneficial Ownership (2) Shares Outstanding
- -------------------- ------------------------ ------------------
<S> <C> <C>
John I. Andrix 41,221 (3) 8.08%
Rodney A. Bell 20,000 (4) 3.92
John J. Bodle 20,187 (5) 3.95
Donovan D. Forrest 2,000 0.39
Edward D. Goodyear 44,096 (3)(6) 8.64
Shirley C. Hansgen 3,155 (7) 0.61
Kennison A. Sims 43,160 (3)(8) 8.46
All directors and executive officers
as a group (9 people) 132,980 26.06
- -----------------------------
<FN>
(1) Each of the persons listed on this table may be contacted at the address of
LFC.
(2) The beneficial owner has sole voting and investment power unless otherwise
indicated.
(Footnotes continued on next page.)
2
<PAGE>
(3) Includes 21,160 shares held by The Citizens Loan & Savings Company
Management Recognition and Retention Plan and Trust, with respect to which
Messrs. Andrix, Goodyear and Sims have shared voting power as Trustees.
Such shares are counted only once in determining the number of shares owned
by all directors and executive officers of LFC as a group.
(4) Mr. Bell shares voting and investment power over such shares with his wife.
(5) Includes 10,895 shares with respect to which Mr. Bodle shares voting and
investment power with his wife and 811 shares owned by Mr. Bodle's wife.
(6) Includes 10,832 shares with respect to which Mr. Goodyear shares voting and
investment power with his wife and 1,650 shares owned by Mr. Goodyear's
wife.
(7) Includes 1,430 shares owned by Ms. Hansgen's husband.
(8) Includes 6,775 shares with respect to which Mr. Sims shares voting and
investment power with his wife.
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Regulations provide for a Board of Directors consisting of seven
persons divided into two classes. In accordance with Section 2.02 of the
Regulations, nominees for election as directors may be proposed only by the
directors or by a shareholder entitled to vote for directors if such shareholder
has submitted a written nomination to the Secretary of LFC by the later of the
December 1st immediately preceding the annual meeting of shareholders or the
sixtieth day before the first anniversary of the most recent annual meeting of
shareholders held for the election of directors. Each such written nomination
must state the name, age, business or residence address of the nominee, the
principal occupation or employment of the nominee, the number of common shares
of LFC owned either beneficially or of record by each such nominee and the
length of time such shares have been so owned.
The Board of Directors proposes the re-election of the following persons to
serve until the Annual Meeting of Shareholders in 2000 and until their
successors are duly elected and qualified or until their earlier resignation,
removal from office or death:
<TABLE>
<CAPTION>
Director of
Name Age (1) Positions Held LFC Since (2)
- ---- ------- -------------- -------------
<S> <C> <C> <C>
John I. Andrix 50 Director 1996
Rodney A. Bell 78 Director 1996
John J. Bodle 50 Director and President 1996
Shirley C. Hansgen 46 Director 1997
- ------------------------------
<FN>
(1) As of December 1997.
(2) With the exception of Ms. Hansgen, each director became a director in 1995
at the time of the formation of LFC in connection with the conversion of
Citizens from mutual to stock form (the "Conversion"). Ms. Hansgen was
appointed by the Board of Directors in 1997 to fill a vacancy created by
the death of George O. Matthewson.
</FN>
</TABLE>
If any nominee is unable to stand for election, any proxies granting authority
to vote for such nominee will be voted for such substitute as the Board of
Directors recommends.
3
<PAGE>
The following directors will continue to serve as directors of LFC
after the Annual Meeting for the terms indicated:
<TABLE>
<CAPTION>
Director of
Name Age (1) Position(s) Held LFC since (2) Term Expires
- ---- ------- ---------------- ------------- ------------
<S> <C> <C> <C>
Donovan D. Forrest 48 Director 1997 1999
Edward D. Goodyear 50 Director 1996 1999
Kennison A. Sims 45 Director 1996 1999
- -----------------------------
<FN>
(1) As of December 10, 1997.
(2) Mr. Goodyear became a director in 1995, at the time of the formation of LFC
in connection with the Conversion. Mr. Sims was appointed in May 1996 by
the Board of Directors to fill a vacancy on the Board of Directors created
in 1996 by the resignation of Mary Goodyear. Mr. Forrest was appointed in
September 1997 by the Board of Directors to fill a vacancy created in 1997
by the resignation of Donald E. Forrest.
</FN>
</TABLE>
Mr. John I. Andrix. Mr. Andrix has been the President and owner of Andrix &
Company, a general insurance agency located in Madison County, Ohio, since 1974.
Mr. Rodney A. Bell. From 1958 to 1986, Mr. Bell owned and operated Rod-Bell
Ford, an automobile dealership in London, Ohio, sold to Buckeye Ford in 1986.
Since 1986, Mr. Bell has been a salesman at Buckeye Ford.
Mr. John J. Bodle. Mr. Bodle has been the President of LFC since 1995 and
the President of Citizens since 1991. Mr. Bodle has been an employee of Citizens
since 1986.
Mr. Donovan D. Forrest. For the past 18 years, Mr. Forrest has been the
President of Forrest Trucking Company, West Jefferson and London, Ohio.
Mr. Edward D. Goodyear. Mr. Goodyear is a Certified Public Accountant who
has practiced in London, Ohio, since 1971. Since 1974, Mr. Goodyear has been the
Assistant Treasurer of The Dispatch Printing Company, publisher of The Columbus
Dispatch newspaper.
Ms. Shirley C. Hansgen. Ms. Hansgen is an attorney at law and has been
practicing in Madison County, Ohio for the past 18 years..
Mr. Kennison A. Sims. Mr. Sims has been the owner-operator of The Sims
Construction Company, London, Ohio, since 1976.
Meetings of Directors
The Board of Directors of LFC met 13 times for regularly scheduled and
special meetings during the fiscal year ended September 30, 1997. With the
exception of Mr. Forrest, who joined the Board of Directors in September 1997,
and Ms. Hansgen, each director attended at least 75% of the aggregate of such
meetings and all meetings of committees of the Board of Directors of which such
director was a member.
Committees of Directors
The Board of Directors of LFC has an Audit Committee and a Stock Option
Plan Committee, but no separate nominating or compensation committees.
4
<PAGE>
The members of the Audit Committee are Messrs. Bell and Goodyear and Ms.
Hansgen. The Audit Committee is responsible for auditing teller boxes, reviewing
and reporting to the full Board of Directors on the independent audits of LFC
and reviewing loan files for regulatory compliance and adherence to the lending
policies of Citizens. The Audit Committee met six times during the fiscal year
ended September 30, 1997.
The members of Stock Option Plan Committee are Messrs. Andrix, Goodyear and
Sims. The Stock Option Plan Committee administers the London Financial
Corporation 1997 Stock Option and Incentive Plan (the "Stock Option Plan") and
determines the number of shares to be covered by options granted to the officers
and employees of LFC and Citizens pursuant to the Stock Option Plan. The Stock
Option Plan Committee met one time during the fiscal year ended September 30,
1997.
EXECUTIVE OFFICERS
In addition to Mr. Bodle, the President of both LFC and Citizens, the
following persons are executive officers of LFC and Citizens and hold the
designated positions:
<TABLE>
<CAPTION>
Name Age (1) Position(s) Held
<S> <C> <C>
Joyce E. Bauerle 45 Vice President and Treasurer of
Citizens and Treasurer of LFC
Rebecca A. Lohr 40 Secretary of LFC and Citizens
- -----------------------------
<FN>
(1) As of December 1997.
</FN>
</TABLE>
Ms. Joyce E. Bauerle. Ms. Bauerle has served as a Vice President of
Citizens since January 1996 and has served as the Treasurer of Citizens since
1981 and as Treasurer of LFC since LFC's incorporation in October 1995.
Ms. Rebecca A. Lohr. Ms. Lohr has served as the Secretary of Citizens for
the past six years and as the Secretary of LFC since October 1995.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
No executive officer of LFC or Citizens received compensation in excess
of $100,000 during the fiscal year ended September 30, 1997. The following table
sets forth the compensation paid to John J. Bodle, the President of LFC and
Citizens, for the fiscal years ended September 30, 1997 and 1996:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
-----------------------------------
Annual compensation Long term compensation All other
compensation (3)
----------------------------------------------------------------------------------------------
Awards
------------------------------------------
Name and principal Fiscal Restricted Securities
position Year Salary ($) Bonus ($) stock awards ($) underlying
options/SARs (#)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John J. Bodle 1997 $59,500 $11,500 $79,350 (1) $13,225 (2) $14,414
President 1996 55,530 10,725 - - 8,400
- --------------------------------------------------------------------------------------------------------------------------
Footnotes on next page
5
<PAGE>
<FN>
(1) On January 30, 1997, Mr. Bodle was awarded 5,290 common shares pursuant to
the MRP. Mr. Bodle paid no consideration for such shares. Such shares will
become earned and nonforfeitable at the rate of one-fifth per year on the
anniversary of the date of the award, beginning on January 30, 1998,
assuming continued employment with or service on the Board of Directors of
Citizens. The market price of LFC's shares on January 30, 1997, determined
by reference to the closing bid for LFC's shares on the Nasdaq SmallCap
Market ("Nasdaq") on such date, was $15.00 per share. The aggregate market
value of the shares awarded to Mr. Bodle under the MRP, as of such date,
was $79,350. By reference to the closing bid for LFC's shares on Nasdaq on
September 30, 1997, the shares which have been awarded to Mr. Bodle under
the MRP had an aggregate market value of $82,987 on such date. Dividends
and other distributions paid on such shares and earnings on such dividends
and distributions will be distributed to Mr. Bodle according to the vesting
schedule.
(2) Represents the number of common shares of LFC underlying options granted to
Mr. Bodle pursuant to the Stock Option Plan.
(3) Consists of directors' fees and the $7,514 allocated to Mr. Bodle under
Citizens' Simplified Employee Pension Plan, which was terminated in 1997.
Does not include amounts attributable to miscellaneous benefits received by
Mr. Bodle, the cost of which was less than 10% of his annual salary and
bonus.
</FN>
</TABLE>
Stock Option Plan
The shareholders of LFC adopted the Stock Option Plan at the 1997 Annual
Meeting of Shareholders. Pursuant to the Stock Option Plan, 52,900 shares were
reserved for issuance by LFC upon exercise of options to be granted to certain
directors, officers and employees of LFC and Citizens from time to time under
the Stock Option Plan. Options to purchase 38,095 common shares of LFC were
granted pursuant to the Stock Option Plan during the fiscal year ended September
30, 1997.
The Stock Option Committee may grant options under the Stock Option Plan at
such times as it deems most beneficial to LFC and Citizens on the basis of the
individual participant's responsibility, tenure and future potential to LFC and
Citizens and in accordance with the regulations of the Office of Thrift
Supervision.
Options granted to officers and employees under the Stock Option Plan may
be "incentive stock options" ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Options granted under
the Stock Option Plan to directors who are not employees of LFC or Citizens will
not qualify under the Code and thus will not be incentive stock options
("Non-Qualified Stock Options").
LFC will receive no monetary consideration for the granting of options
under the Stock Option Plan. Upon the exercise of options, LFC will receive
payment of cash or, if acceptable to the Stock Option Committee, common shares
of LFC or outstanding awarded stock options.
The following table sets forth information regarding all grants of options
to purchase common shares of LFC made to Mr. Bodle during the fiscal year ended
September 30, 1997:
<TABLE>
<CAPTION>
Option/SAR Grants In Last Fiscal Year
Number of Securities % Of Total Options/SARs
Underlying Options/ Granted to Employees in Exercise or Base
Name SARs Granted (#) 1997 Fiscal Year Price ($/Share) Expiration Date
- ---- ----------------- ------------------------- ----------------- ---------------
<S> <C> <C> <C> <C>
John J. Bodle 13,225 (1) 34.7% $15.00 January 30, 2007
- ----------------------------
<FN>
(1) The options were granted on January 30, 1997. One-fifth of such options
will become exercisable on each anniversary of such grant, commencing
January 30, 1998.
</FN>
</TABLE>
6
<PAGE>
The following table sets forth information regarding the number and value
of unexercised options held by Mr. Bodle at September 30, 1997:
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and 9/30/97 Option/SAR Values
Number of Securities Underlying
Unexercised Options/SARs at Value of Unexercisable
Shares Acquired on Value 9/30/97(#) "In The Money" Options/
Name Exercise(#) Realized($) Exercisable/Unexercisable SARs at 9/30/97(#)(1)
<S> <C> <C> <C> <C>
John J. Bodle -0- N/A -0-/13,225 -0-/$9,092
- ---------------------------
<FN>
(1) For purposes of this table, the value of the option was determined by
multiplying the number of shares subject to unexercised options by the
difference between the $15.00 exercise price and the fair market value of
LFC's common shares, which was $15.6875 on September 30, 1997, based on the
closing bid price reported by Nasdaq.
</FN>
</TABLE>
Management Recognition Plan and Trust
The shareholders of LFC adopted the MRP at the 1997 Annual Meeting of
Shareholders. The MRP purchased 21,160 shares of LFC's common stock, 17,640 of
which were awarded to directors, executive officers and employees of LFC and
Citizens in January 1997.
The MRP is administered by the MRP Committee of the Board of Directors of
LFC. Subject to express provisions of the MRP, the MRP Committee determines
which directors, executive officers and employees of Citizens and LFC will be
awarded shares under the MRP and the number of shares to be awarded.
Unless the MRP Committee specifies a longer period of time, one-fifth of
the MRP shares awarded to a recipient will become earned and nonforfeitable on
each of the first five anniversaries of the date of the awards. Until shares
awarded are earned by the participant, such shares will be forfeited in the
event that the participant ceases to be either a director, an officer or an
employee of LFC or Citizens. In the event of the death or disability of a
participant, however, the participant's shares will be deemed to be earned and
nonforfeitable upon such date.
MRP shares will be distributed as soon as practicable after they are
earned. All plan shares which have been awarded but not earned will be voted in
the discretion of the MRP Trustee appointed by the MRP Committee.
Director Compensation
LFC pays no director's fees. Each director of Citizens currently receives a
fee of $500 for each meeting of the Board of Directors attended. In addition,
each member of Citizens' Executive Committee, Audit Committee and Classification
and Fixed Asset Committee receives, respectively, $300, $100 and $100 for each
committee meeting attended.
Employment Agreement
On April 30, 1997, Citizens entered into an employment agreement with Mr.
Bodle (the "Employment Agreement"). Citizens has not entered into an employment
agreement with any other officer.
The Employment Agreement provides for a term of three years, a salary of
not less than $53,560 and performance review by the Board of Directors not less
often than annually. The Employment Agreement also provides for the inclusion of
Mr. Bodle in any formally established employee benefit, bonus, pension and
profit-sharing plans for which senior management personnel are eligible.
7
<PAGE>
The Employment Agreement is terminable by Citizens at any time. In the
event of termination by Citizens for "just cause," as defined in the Employment
Agreement, Mr. Bodle will have no right to receive any compensation or other
benefits for any period after such termination. In the event of termination by
Citizens other than for just cause, at the end of the term of the Employment
Agreement or in connection with a "change of control," as defined in the
Employment Agreement, Mr. Bodle will be entitled to a continuation of salary
payments for a period of time equal to the term of the Employment Agreement and
a continuation of benefits substantially equal to those being provided at the
date of termination of employment until the earliest to occur of the end of the
term of the Employment Agreement or the date on which Mr. Bodle becomes employed
full-time by another employer.
The Employment Agreement also contains provisions with respect to the
occurrence of the following within one year of a "change of control": (1) the
termination of employment of Mr. Bodle for any reason other than just cause,
retirement or termination at the end of the term of the Employment Agreement and
(2) a constructive termination resulting from a change in the capacity or
circumstances in which Mr. Bodle is employed or from a material reduction in his
responsibilities, authority, compensation or other benefits provided under the
Employment Agreement without Mr. Bodle's written consent. In the event of any
such occurrence, Mr. Bodle will be entitled to receive an amount equal to three
times his average annual compensation for the three taxable years immediately
preceding the termination of employment, subject to certain limits. In addition,
Mr. Bodle will be entitled to continued coverage under all benefit plans until
the earliest of the end of the term of the Employment Agreement or the date on
which he is included in another employer's benefit plans as a full-time
employee. The maximum which Mr. Bodle may receive under such provisions,
however, is limited to an amount which will not result in the imposition of a
penalty tax pursuant to Section 280G(b)(3) of the Internal Revenue Code of 1986,
as amended (the "Code"). "Control," as defined in the Employment Agreement,
generally refers to the acquisition by any person or entity of the ownership or
power to vote 10% or more of the voting stock of Citizens or LFC, the control of
the election of a majority of the directors of Citizens or LFC or the exercise
of a controlling influence over the management or policies of Citizens or LFC.
Certain Transactions
Citizens has followed a policy of granting consumer loans and loans secured
by the borrower's personal residence to officers, directors and employees. All
such loans to executive officers and directors are made in the ordinary course
of business, on the same terms and conditions as those of comparable
transactions prevailing at the time and in accordance with Citizens'
underwriting guidelines and do not involve more than the normal risk of
collectibility or present other unfavorable features.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires LFC's directors and executive
officers, and persons who own more than 10% of a registered class of LFC's
equity securities, to file with the Securities and Exchange Commission ("SEC")
reports of ownership and reports of changes in ownership of common stock and
other equity securities of the Corporation. Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish LFC with copies of
all Section 16(a) forms they file. Form 3, "Initial Statement of Beneficial
Ownership of Securities," required to filed with the SEC within ten days of
becoming an executive officer or director, was filed late by Mr. Forrest
following his appointment to the Board of Directors. To LFC's knowledge, based
solely on a review of the copies of such reports furnished to LFC and written
representations that no other reports were required during the fiscal year ended
September 30, 1997, LFC's directors and executive officers complied with all
other Section 16(a) filing requirements applicable to them.
8
<PAGE>
SELECTION OF AUDITORS
On July 11, 1996, the Board of Directors approved the recommendation of its
Audit Committee to change its independent accountant from KPMG Peat Marwick
("KPMG") to Grant Thornton LLP ("Grant Thornton"). No adverse opinion,
disclaimer or qualification was contained in KPMG's report for either of the
last two fiscal years for which KPMG completed an audit of Citizens' financial
statements, nor were such reports modified as to uncertainty, audit scope or
accounting principles. Further, there was no disagreement between KPMG and
Citizens or Grant Thornton on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure.
The Board of Directors has selected Grant Thornton as the auditors of LFC
and Citizens for the current fiscal year and recommends that the shareholders
ratify such selection. Management expects that a representative of Grant
Thornton will be present at the Annual Meeting, will have the opportunity to
make a statement if he or she so desires and will be available to respond to
appropriate questions.
PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in the proxy
statement for the 1999 Annual Meeting of Shareholders of LFC should be sent to
LFC by certified mail and must be received by LFC not later than August 14,
1998.
Management knows of no other business which may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed Proxy
to vote such Proxy in accordance with their best judgment on any other matters
which may be brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
John J. Bodle, President
London, Ohio
December 11, 1997
9
<PAGE>
REVOCABLE PROXY
LONDON FINANCIAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF LONDON FINANCIAL CORPORATION
The undersigned shareholder of London Financial Corporation ("LFC") hereby
constitutes and appoints Edward D. Goodyear and Kennison A. Sims, or either one
of them, the Proxy or Proxies of the undersigned with full power of substitution
and resubstitution, to vote at the Annual Meeting of Shareholders of LFC to be
held at the office of The Citizens Loan & Savings Company, located at 2 East
High Street, London, Ohio, on January 22, 1998, at 10:00 a.m., Eastern Time (the
"Annual Meeting"), all of the shares of LFC which the undersigned is entitled to
vote at the Annual Meeting, or at any adjournment thereof, on each of the
following proposals, all of which are described in the accompanying Proxy
Statement:
1. The election of four directors for terms expiring in 2000:
FOR all nominees listed WITHHOLD authority to
below (except as marked vote for all nominees
to the contrary below) listed below
John I. Andrix
Rodney A. Bell
John J. Bodle
Shirley C. Hansgen
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below).
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2 The ratification of the selection of Grant Thornton LLP as the
auditors of London Financial Corporation for the current fiscal year.
FOR AGAINST ABSTAIN
3. In their discretion, upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Important: Please sign and date this proxy on the reverse side.
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This Revocable Proxy will be voted as directed by the undersigned member.
If no direction is given, this Revocable Proxy will be voted FOR proposals 1 and
2.
All Proxies previously given by the undersigned are hereby revoked. Receipt
of the Notice of Annual Meeting of Shareholders of LFC and of the accompanying
Proxy Statement is hereby acknowledged.
NOTE: Please sign your name exactly as it appears on this Proxy. Joint accounts
require only one signature. If you are signing this Proxy as an attorney,
administrator, agent, corporation, officer, executor, trustee or guardian, etc.,
please add your full title to your signature.
Signature Signature
Print or Type Name Print or Type Name
Date Date
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF LFC. PLEASE
DATE, SIGN AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED FOR MAILING IN THE U.S.A.
IMPORTANT: IF YOU RECEIVE MORE THAN ONE CARD, PLEASE SIGN AND RETURN ALL CARDS
IN THE ACCOMPANYING ENVELOPE.
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