LSB BANCSHARES INC /NC/, DEF 14A, 1998-03-16

LSB BANCSHARES INC /NC/
DEF 14A, 1998-03-16
STATE COMMERCIAL BANKS

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SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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 [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

LSB BANCSHARES, INC.
- --------------------------------------------------------------------------------
(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)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(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
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
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NOTICE OF ANNUAL MEETING OF THE SHAREHOLDERS OF
LSB BANCSHARES, INC.
ONE LSB PLAZA
LEXINGTON, NORTH CAROLINA 27292

To the Shareholders of LSB Bancshares, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of LSB
Bancshares, Inc. ("Bancshares"), called under authority of Article 2, Section 2,
of the Bylaws of Bancshares, will be held at the J. Smith Young YMCA, located at
119 West Third Avenue, Lexington, North Carolina 27292, on Wednesday, April 15,
1998 at 1:00 p.m. Shareholders of record at the close of business on March 2,
1998 are entitled to notice of and to vote at the meeting and any adjournment
thereof.

The purposes of the meeting are to consider and act upon the following
proposals:

- To elect six members of the Board of Directors;

- To approve an amendment to the Articles of Incorporation of
Bancshares to increase from 10,000,000 to 50,000,000 the
number of shares of Common Stock that Bancshares shall have
the authority to issue;

- To approve an amendment to the Articles of Incorporation of
Bancshares to authorize the issuance of up to 10,000,000
shares of preferred stock, par value $.01 per share, in one
or more series, on terms and conditions to be established
by the Board of Directors from time to time;

- To ratify the appointment of Turlington and Company,
L.L.P., to conduct the independent audit for 1998;

- To consider and act upon a shareholder proposal by W.
Robert Koontz relating to minimum share ownership
requirements for directors of Bancshares; and

- To consider such other business as may properly come before
the meeting.

We urge you to attend this meeting. It is extremely important that your
shares be represented regardless of the number you own. Please sign and return
your proxy to Bancshares in the enclosed envelope at your earliest convenience.
Unless you indicate to the contrary, your proxy will be cast for you in favor of
the nominees for director named in the accompanying Proxy Statement, for
approval of an amendment to Bancshares' Articles of Incorporation to increase
the number of shares of Common Stock that Bancshares may issue, for approval of
an amendment to Bancshares' Articles of Incorporation to authorize the issuance
of preferred stock, for the ratification of the appointment of Turlington and
Company, L.L.P. to conduct the independent audit for 1998, and against the
shareholder proposal relating to minimum share ownership requirements for
directors of Bancshares, each as described in more detail in the accompanying
Proxy Statement.

This 16th day of March, 1998.

Yours very truly,

Robert F. Lowe
Chairman, President and
Chief Executive Officer

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LSB BANCSHARES, INC.
ONE LSB PLAZA
LEXINGTON, NORTH CAROLINA 27292

PROXY STATEMENT

The accompanying proxy is solicited by and on behalf of the Board of
Directors of LSB Bancshares, Inc. ( "Bancshares" ) for use at the Annual Meeting
of Shareholders to be held on Wednesday, April 15, 1998 at 1:00 p.m. at the J.
Smith Young YMCA, located at 119 West Third Avenue, Lexington, North Carolina
27292, and at any adjournment thereof. The entire cost of such solicitation will
be borne by Bancshares. In addition, personal solicitation may be conducted by
directors, officers and employees of Bancshares and its subsidiary, Lexington
State Bank (the "Bank"). This Proxy Statement and the accompanying proxy card
were first mailed to shareholders on or about March 16, 1998.

The shares of Bancshares common stock (the "Common Stock") represented by
the accompanying proxy card will be voted at the meeting if the proxy card is
properly signed, dated and received by Bancshares prior to the time of the
meeting. Where a choice is specified on the proxy card as to the vote on any
matter to come before the meeting, the proxy will be voted in accordance with
such specification. If no choice is specified, the proxy will be voted in favor
of the nominees for director named herein, for approval of an amendment to
Bancshares' Articles of Incorporation to increase the number of shares of Common
Stock that Bancshares may issue, for approval of an amendment to Bancshares'
Articles of Incorporation to authorize the issuance of preferred stock, for the
ratification of the appointment of Turlington and Company, L.L.P. to conduct the
independent audit for 1998, and against the shareholder proposal relating to
minimum share ownership requirements for directors of Bancshares. Any
shareholder giving a proxy has the right to revoke it at any time before it is
voted by delivering a written revocation or an executed proxy bearing a later
date to the Secretary of Bancshares or by attending and voting in person at the
meeting. If a shareholder is a participant in the Shareholder Dividend
Reinvestment and Stock Purchase Plan, the proxy represents the number of shares
of Common Stock in the shareholder's dividend reinvestment account as well as
shares held of record directly by the shareholder.

VOTING PROCEDURES

Shareholders of record at the close of business on March 2, 1998 will be
entitled to vote at the Annual Meeting of Shareholders. At the close of business
on March 2, 1998, 8,677,330 shares of Common Stock were outstanding and entitled
to vote. There is no other class of authorized stock. On all matters considered
at the meeting, shareholders are entitled to one vote for each share held.

The laws of North Carolina, under which Bancshares is incorporated,
provide that, in connection with the election of directors, the persons
receiving a plurality of the votes cast will be elected as directors. The
proposal to amend Bancshares'

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Articles of Incorporation to increase the number of shares of Common Stock that
Bancshares may issue, the proposal to amend Bancshares' Articles of
Incorporation to authorize the issuance of preferred stock, the proposal to
ratify the appointment of Turlington and Company L.L.P.to conduct the
independent audit of Bancshares for 1998, and the proposal relating to minimum
share ownership requirements for directors will be approved if the number of
votes cast "for" each such proposal exceeds the number of votes cast "against"
such proposal. Shares held of record by a broker or its nominee ("Broker
Shares") and abstentions that are voted on any matter will be counted for
purposes of determining the existence of a quorum at the Annual Meeting. Broker
Shares that are not voted on any matter at the Annual Meeting will not be
included in determining whether a quorum is present at the Annual Meeting.
Abstentions and Broker Shares that are not voted on a particular proposal will
not be counted as votes for or against such proposals and will have the same
effect as negative votes.

PROPOSAL 1: ELECTION OF DIRECTORS

The Bylaws of Bancshares provide for a classified Board of Directors
consisting of not less than nine and not more than 24 directors, the number to
be determined by resolution of a majority of the Board of Directors or by
resolution of the shareholders at any meeting thereof. The Board of Directors,
by resolution, has set the number of directors at 14. The persons nominated by
the Board of Directors to serve as directors for a three-year term expiring at
the 2001 Annual Meeting, as set forth below, were elected as directors at the
1995 Annual Meeting.

In connection with Bancshares' acquisition of Old North State Bank in
1997, Old North State Bank had the right to recommend candidates to fill two
additional directorships on the Board of the Directors of Bancshares, which
expire at the 1998 Annual Meeting, and to recommend one of those candidates to
be renominated upon expiration of his term to fill an additional directorship
with a term expiring in 1999 and the other candidate to fill an additional
directorship with a term expiring in 2000. Upon the recommendation of Old North
State Bank, the Board of Directors of Bancshares elected Lloyd G. Walter, Jr.
and Marvin D. Gentry to serve on the Board of Directors until the 1998 Annual
Meeting and is nominating Marvin D. Gentry to serve as a director for a term
expiring at the 1999 Annual Meeting and Lloyd G. Walter, Jr. to serve as a
director for a term expiring at the 2000 Annual Meeting.

The persons named as proxies in the accompanying proxy card intend to
vote in favor of the nominees named below. Such nominees have consented to serve
as directors of Bancshares if elected. If, at the time of the meeting, any of
such nominees are unable or unwilling to serve, the discretionary authority
provided in the accompanying proxy card will be exercised to vote for such other
person or persons for the office of director as may be nominated by the Board of
Directors. Proxies cannot be voted for a greater number of nominees than the
number named in this Proxy Statement.

The number of years of service on the Board of Directors indicated in the
following table includes service on the Board of Directors of the Bank prior to
the incorporation of Bancshares.

2
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NOMINEES FOR ELECTION AS DIRECTORS
TO SERVE UNTIL THE 2001 ANNUAL MEETING