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:
[ ] 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
LNB BANCORP, INC.
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) 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:
[X] 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 No.:
3) Filing Party:
4) Date Filed:
<PAGE>1
LNB BANCORP, INC.
LORAIN, OHIO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF
LNB BANCORP, INC. March 20, 1995
The Annual Meeting of Shareholders of LNB Bancorp, Inc. will be
held at 521 Broadway, Lorain, Ohio 44052, on Tuesday, April 18, 1995,
at 10:00 a.m., Eastern Daylight Savings Time, for the purpose of
considering and voting upon the following matters as more fully
described in the Proxy Statement.
PROPOSALS:
1. ELECTION OF DIRECTORS - To elect five (5) directors to hold
office until their term expires (April 21, 1998) or until their
successors are elected and qualified.
2. INCREASE AUTHORIZED SHARES AND FIX PAR VALUE AT $1.00 PER SHARE
- Consideration of an amendment to the Articles of Incorporation
of LNB Bancorp, Inc. which would increase the authorized number
of shares from 4,000,000 to 5,000,000 and fix the par value of
the Common Stock at $1.00 per share to allow for a five-for-
four stock split of the Common Stock of LNB Bancorp, Inc. if
this proposal is approved.
3. OTHER BUSINESS - To transact such other business as may properly
come before the meeting.
Shareholders of record at the close of business on March 10, 1995
will be entitled to vote the number of shares held of record in their
names on that date. The transfer books will not be closed.
We urge you to sign and return the enclosed proxy as promptly as
possible, whether or not you plan to attend the meeting in person.
This proxy may be revoked prior to its exercise.
By Order of the Board of Directors
/s/ Thomas P. Ryan
Thomas P. Ryan
Executive Vice President
and Secretary/Treasurer
YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND MAIL THE ENCLOSED
PROXY FORM(S) WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. A
RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
-1-
<PAGE>2
LNB BANCORP, INC.
457 BROADWAY
LORAIN, OHIO 44052
PROXY STATEMENT
MARCH 20, 1995
This proxy solicitation is made on behalf of the Board of Directors
of LNB Bancorp, Inc., (hereinafter called the "Corporation") being a
One Bank Holding Company owning all of the stock of The Lorain
National Bank (hereinafter called the "Bank"). As of this date, the
number of shares of Common Stock outstanding and entitled to vote at
the Annual Meeting of Shareholders to be held on April 18, 1995, is
3,210,765. Only those shareholders of record at the close of business
on March 10, 1995 shall be entitled to vote. This proxy may be revoked
prior to its exercise. The cost of this solicitation is being paid by
the Corporation.
VOTING
Each shareholder shall be entitled to one vote for each share of
stock standing in his name on the books of the Corporation. No holder
of shares of any class shall have the right to vote cumulatively in
the election of directors.
Shares held in accounts by the Bank's Trust and Investment
Management Division will be voted by the trustee in accordance with
written instructions from account administrators or account plan
participants, and where no instructions are received, as the trustee
deems proper.
Shares of Common Stock represented by proxies in the accompanying
form which are properly executed and returned to the Corporation will
be voted at the Annual Meeting of Shareholders in accordance with the
shareholders' instruction contained in such proxies. Where no such
instructions are given, the shares will be voted for the election of
directors as described herein; in support of the increase in the
number of authorized shares; and at the discretion of the proxy
holders on such other matters as may come before the meeting. The
Board of Directors has no reason to believe that any of the nominees
will be unable to serve as a director. In the event, however, of the
death or unavailability of any nominee or nominees, the proxy to that
extent will be voted for such other person or persons as the Board of
Directors may recommend.
The results of votes taken at the Annual Meeting will be disclosed
in the Corporation's First Quarterly Report for 1995 on Form 10-Q, as
filed with the Securities and Exchange Commission (SEC). The
disclosure will include for each proposal, the number of votes for,
the number of votes against and the number of abstentions. In
addition, the disclosure will set forth the number of votes received
by each candidate running for a directorship and the percentage of
these votes as to the total shares outstanding.
<PAGE>3
ELECTION OF DIRECTORS
Article III provides that directors are to be divided into three (3)
classes. Each class serves a term of three (3) years, or until their
respective successors are elected and qualified. In that the term of
office for five (5) members of the present Board of Directors will
expire on April 18, 1995, the management has nominated the hereinafter
named five (5) individuals for election to serve until April 21, 1998,
or until their successors are elected and qualified.
The affirmative vote of the holders of at least a majority of a
quorum is required in order to elect each director. Under the Code of
Regulations of the Corporation a quorum is constituted by the
presence, in person or by proxy, of a majority of the voting power of
the Corporation.
-3-
<PAGE>4
Other nominations may be made only in accordance with the notice
procedures set forth in Article III of the Code of Regulations of the
Corporation. The procedure states that nominations for election to the
Board of Directors may be made by the Board of Directors or by any
shareholder of any outstanding class of capital stock of the
Corporation entitled to vote for the election of directors.
Nominations, other than those made by or on behalf of the existing
management of the Corporation, shall be made in writing and shall be
delivered or mailed to the President of the Corporation not less than
fourteen (14) days nor more than fifty (50) days prior to any meeting
of shareholders called for the election of directors, provided
however, that if less than twenty-one (21) days notice of the meeting
is given to shareholders, such nomination shall be mailed or delivered
to the President of the Corporation no later than the close of
business on the seventh (7th) day following the day on which the
notice of the meeting was mailed. Such notification shall contain the
following information as to the extent known to the notifying
shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total
number of shares of capital stock of the Corporation that will be
voted for each proposed nominee; (d) the name and resident address of
the notifying shareholder; and (e) the number of shares of capital
stock of the Corporation owned by the notifying shareholder.
Nominations not made in accordance herewith may, at his discretion, be
disregarded by the Chairman of the meeting, and upon his instructions,
the vote teller may disregard all votes cast for each such nominee.
Unless otherwise instructed, it is the intention of the persons
named in the proxy to vote for the election of the following five(5)
nominees:
1) Daniel P. Batista
2) David M. Koethe
3) Stanley G. Pijor
4) Eugene M. Sofranko
5) Leo Weingarten
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
NOMINEE.
The following individuals are directors whose term of office is
scheduled to expire on April 16, 1996:
1) James L. Bardoner
2) Wellsley O. Gray
3) Benjamin G. Norton
4) Don A. Sanborn
5) T.L. Smith, M.D.
The following individuals are directors whose term of office is
scheduled to
expire on April 15, 1997:
1) James F. Kidd
2) James H. Riddell
3) Thomas P. Ryan
4) Paul T. Stack
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<PAGE>5
DIRECTOR'S COMMITTEES
The Bank has five (5) standing committees upon which members of the
Board of Directors serve. They are:
1) The Audit Committee 4) The Pension/Fringe Benefit Committee
2) The Executive Committee 5) The Incentive Stock Option Committee
3) The Trust Committee
Membership of each of these committees is indicated by footnote on
page 7.
The Audit Committee met three (3) times during the last fiscal year.
It establishes policies for the administration of the Bank's Audit
Division. The Executive Committee met thirteen (13) times during the
last fiscal year. This committee is authorized to approve matters
relating to loans, the purchase of bills, notes, and other evidence of
debt and also serves as the Compensation Committee. The Trust
Committee reviews the various trusts accepted by the Bank's Trust and
Investment Management Division. It held six (6) meetings during the
last fiscal year. The Pension/Fringe Benefit Committee reviews
indirect compensation of officers and employees. It did not meet
during the last fiscal year. The Incentive Stock Option Committee
determines who will receive stock options and the number of shares to
be granted under the terms of the Incentive Stock Option Plan. The
actions of the Incentive Stock Option Committee are subject to the
approval of the Compensation Committee. It did not meet during the
last fiscal year. The Bank has no designated Nominating Committee.
Nominees for the Board of Directors are determined by a vote of the
total Board of Directors.
The Bank held thirteen (13) Board of Directors meetings during the
last fiscal year. Of the directors who served during 1994, Leo
Weingarten and James H. Riddell attended fewer than 75% of the total
number of meetings of the Board of Directors and all committee
meetings of which the aforementioned directors were a member.
The Corporation held five (5) Board of Directors meetings during the
last fiscal year. Of the directors who served during 1994, Leo
Weingarten and James H. Riddell, attended fewer than 75% of the total
of five (5) meetings held.
All of the directors of the Corporation are also directors of the
Bank. A director's fee of $400.00 is paid to those directors, who are
not officers, for each meeting attended. Directors, who are also
officers, receive a fee of $200.00 for their attendance at the
Corporation's board meetings and receive no director's fees for their
attendance at the meetings of the Bank's board.
-5-
<PAGE>6
LORAIN
NATIONAL
BANK LNB BANCORP,
PRINCIPAL OCCUPATION DIRECTOR INC. DIRECTOR
NAME AND AGE FOR THE PAST FIVE YEARS SINCE SINCE
JAMES L. BARDONER RETIRED, FORMER PRESIDENT 1974 1983
Age 76 Dorn Industries, Inc.
(1-2-4-5) (Manufacturing Company)
DANIEL P. BATISTA ATTORNEY/PARTNER 1976 1983
Age 60 Cook & Batista Co. L.P.A.
(2-3-5-7)
WELLSLEY O. GRAY SALES CONSULTANT 1973 1983
Age 61 Smith Dairy Company
(1-3)
JAMES F. KIDD PRESIDENT AND CHIEF 1989 1989
Age 55 OPERATING OFFICER
LNB Bancorp, Inc. and
The Lorain National Bank
DAVID M. KOETHE CHAIRMAN OF THE BOARD 1975 1983
Age 59 The Lorain Printing Company
(2-3-4-5-8)
BENJAMIN G. NORTON EMPLOYEE AND 1983 1983
Age 55 COMMUNITY RELATIONS MANAGER
(3-6) Reliance Comm/Tec - Lorain Products
STANLEY G. PIJOR CHAIRMAN AND CHIEF 1969 1983
Age 64 EXECUTIVE OFFICER
(2-3-4) LNB Bancorp, Inc. and
The Lorain National Bank
JAMES H. RIDDELL CHAIRMAN OF THE BOARD 1970 1983
Age 68 Consumers Builders Supply
(1-4-5-6) Company
PRESIDENT
Consumeracq, Inc.
THOMAS P. RYAN EXECUTIVE VICE PRESIDENT 1989 1989
Age 56 AND SECRETARY/TREASURER
LNB Bancorp, Inc.
EXECUTIVE VICE PRESIDENT
AND SECRETARY
The Lorain National Bank
DON A. SANBORN RETIRED 1971 1983
Age 71
(1-3)
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<PAGE>7
LORAIN
NATIONAL
BANK LNB BANCORP,
PRINCIPAL OCCUPATION DIRECTOR INC. DIRECTOR
NAME AND AGE FOR THE PAST FIVE YEARS SINCE SINCE
T.L. SMITH, M.D PHYSICIAN 1968 1983
Age 81
(1-2-4-5)
EUGENE M. SOFRANKO PRESIDENT AND CHIEF 1974 1983
Age 64 EXECUTIVE OFFICER
(1-2-4-5) Lorain Glass Company, Inc.
PAUL T. STACK MANUFACTURER'S 1974 1983
Age 65 REPRESENTATIVE
(1-2-3) Coley's Inc. and
A-1 Welding and Fabricating, Inc.
LEO WEINGARTEN RETIRED 1964 1983
Age 75
(2-4-5)
(1) Member of Audit Committee
(2) Member of Executive Committee
(3) Member of Trust Committee
(4) Member of Pension/Fringe Benefit Committee
(5) Member of Incentive Stock Option Committee
(6) Executive Committee Alternate
(7) The Bank has retained the law firm of Cook & Batista Co.,
L.P.A. as legal counsel for the last several years. During the
last fiscal year, The Lorain National Bank has paid to Cook &
Batista, Co., L.P.A. an amount of $112,461.81. It is anticipated
that this relationship will continue during the current fiscal year.
(8) During the last fiscal year, The Lorain National Bank has paid
to The Lorain Printing Company an amount of $51,500.98 for
stationery, supplies and other printed material. It is
anticipated that such business relationship will continue during
the current fiscal year.
Note: The Executive Committee also serves as the Compensation
Committee.
-7-
<PAGE>8
EXECUTIVE COMPENSATION
During 1992 and 1993, the Securities and Exchange Commission (SEC)
adopted new rules with regard to reporting executive compensation in
proxy and information statements and other commission filings. The
Corporation and the Bank do not have, nor has there been in the past,
any Stock Appreciation Rights or Long Term Incentive Plans. The
information which follows incorporates the disclosure requirements of
these new rules.
SUMMARY COMPENSATION TABLE
The named executive officers disclosure requirements affect the
Chief Executive Officer and those executive officers earning more than
$100,000 in salary and bonuses. In 1994, 1993 and 1992, Mr. Stanley G.
Pijor, Chairman and Chief Executive Officer, met the criteria
requiring disclosure. In 1994 and 1993, Mr. James F. Kidd, President
and Chief Operating Officer, met the criteria for disclosure. In
1994, Mr. Thomas P. Ryan, Executive Vice President and
Secretary/Treasurer, met the criteria for disclosure.
The following table discloses the annual salary, bonuses and all
other compensation awards and payouts for services in all capacities
to the Corporation and the Bank for the fiscal years ended December
31, 1994, 1993 and 1992.
Compensation (1)
-----------------------------------------------
Annual
Name and -------------------------------- All
Principal Position Year Salary Bonus Other (2)
----------------------------------------------------------------------
Stanley G. Pijor 1994 $186,044 $15,000 $61,483
Chairman and 1993 $177,334 $10,000 $64,258
Chief Executive Officer 1992 $171,618 $10,000 $62,934
James F. Kidd 1994 $104,556 $15,000 $15,646
President and Chief 1993 $ 94,634 $10,000 $11,903
Operating Officer
Thomas P. Ryan 1994 $ 92,323 $15,000 $14,450
Executive Vice President
and Secretary/Treasurer
(1) The aggregate of Other Annual Compensation is less than 10% of the
total of annual salary and bonus for all individuals for all years
presented and therefore is not required to be reported under the
SEC rules.
<PAGE>9
(2) All Other Compensation consisted of the following:
Stanley G. Pijor: 1994 1993 1992
Contribution, in Mr. Pijor's
behalf to:
The Bank's Stock Purchase Plan $ 5,202 $ 5,390 $ 5,358
The Bank's Employee Stock
Ownership Plan $10,939 $12,494 $12,801
Mr. Pijor's Supplemental
Retirement Agreement $37,441 $37,441 $37,441
Mr. Pijor's Supplemental
Life Insurance $ 6,901 $ 7,758 $ 6,309
Corporation director's fees $ 1,000 $ 1,175 $ 1,025
James F. Kidd: 1994 1993
Contribution, in Mr. Kidd's
behalf to:
The Bank's Stock Purchase Plan $ 3,909 $ 2,796
The Bank's Employee Stock
Ownership Plan $ 8,860 $ 6,959
Mr. Kidd's Supplemental
Life Insurance $ 2,077 $ 1,348
Corporation director's fees $ 800 $ 800
-8-
<PAGE>10
Thomas P. Ryan: 1994
Contribution, in Mr. Ryan's
behalf to:
The Bank's Stock Purchase Plan $ 3,508
The Bank's Employee Stock
Ownership Plan $ 7,993
Mr. Ryan's Supplemental
Life Insurance $ 1,949
Corporation director's fees $ 1,000
OPTION GRANTS TABLE (last fiscal year)
There were no stock options granted by the Corporation or the Bank
in 1994.
LONG TERM INCENTIVE PLAN AWARD TABLE (last fiscal year)
There were no long term incentive plans or plan awards in 1994.
OPTION EXERCISES AND YEAR END VALUE TABLE (last fiscal year)
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE (1)
Value of
Number of Unexercised
Unexercised In-the-Money
Option Option
Shares Shares Shares
Acquired Value at FY-End(#) at FY-End ($)
on Realize Exercisable/ Exercisable/
Name Exercise(#) ($)(2) Unexercisable Unexercisable(2)
--------------------------------------------------------------------------
Stanley G. Pijor -0- $0 8,385/0 $184,549/$0
James F. Kidd -0- $0 1,648/0 $ 7,646/$0
Thomas P. Ryan -0- $0 1,648/0 $ 7,646/$0
(1) All amounts reflect the 3% stock dividend in April 1994.
(2) Market value of underlying securities at exercise date or year
end, as the case may be, minus the exercise or price of "in-the-money"
options.
COMPENSATION COMMITTEE REPORT
The Executive Committee of the Bank meets annually to review all
officer's salaries. The criteria used in determining salaries and
bonuses of all officers (other than the Chief Executive Officer, Mr.
Stanley G. Pijor) is based upon industry peer group, national surveys
and performance judgements as to the past and expected future
contributions of the individual officers. In addition, the Committee
periodically is advised by independent compensation consultants
concerning salary competitiveness.
<PAGE>11
The compensation paid to the Chief Executive Officer (Mr. Stanley
G. Pijor) is based upon an "Employment Agreement", a "Supplemental
Retirement Agreement", and a "Consulting Agreement". The terms and
conditions of these three (3) agreements are more fully discussed in
the following paragraphs.
In 1994, Fifteen Thousand Dollar ($15,000.00) bonuses were granted
to Messrs. Pijor, Kidd and Ryan in addition to the compensation called
for under the terms of the aforementioned agreements and criteria. The
Executive Committee granted these bonuses based upon the Committee's
assessment of the individual performance of Messrs. Pijor, Kidd and
Ryan during 1994 and their contributions to the successful management
of the Corporation and the Bank. Messrs. Pijor, Kidd and Ryan were not
present during discussion of this bonus payment.
-9-
<PAGE>12
The members of the Executive Committee are:
James L. Bardoner T.L. Smith, M.D.
Daniel P. Batista Eugene M. Sofranko
David M. Koethe Paul T. Stack
Stanley G. Pijor Leo Weingarten
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994, Mr. Stanley G. Pijor, Chairman and Chief Executive
Officer, served on the Executive Committee of the Bank. The Executive
Committee also serves as the Compensation Committee of the Bank. Mr.
Pijor did not participate in any of the deliberation relative to his
compensation.
EMPLOYMENT AGREEMENT
On December 31, 1987, an Employment Agreement was entered into
between Mr. Stanley G. Pijor and The Lorain National Bank. The
Agreement became effective January 1, 1988 and shall remain in effect
through December 31, 1995. The Agreement provides for Mr. Pijor to
maintain the highest executive position in the organization. Mr. Pijor
shall be compensated at the initial rate of One Hundred Twenty Nine
Thousand Six Hundred Seventy Five Dollars ($129,675.00) with a five
percent (5%) raise effective June 1st of each year thereafter. Mr.
Pijor will continue to receive his present fringe benefits and such
additional benefits as are set forth in the Bank's Employee Benefit
Program. In determining the compensation payable under the Agreement,
the Board of Directors reviewed compensation paid to presidents of
financial institutions similar in size to The Lorain National Bank.
SUPPLEMENTAL RETIREMENT AGREEMENT
On December 31, 1987, the Bank entered into a Supplemental
Retirement Agreement (SRA) with Mr. Stanley G. Pijor. The purpose of
the SRA is to provide supplemental retirement benefits to Mr. Pijor in
addition to the benefits provided by the Bank's qualified retirement
plans. The SRA has been adopted to assist the Bank in retaining the
services of Mr. Pijor through his normal retirement date. The SRA is
designed to provide for the monthly payment or annual payment (at Mr.
Pijor's election) in the event of: (a) normal retirement on or after
July 1, 1995; (b) permanent disability1; (c) death2; or (d) discharge
"without cause"3. Under terms of this agreement, Mr. Pijor will
receive annual supplemental retirement benefits for 10 years of
$50,000 if he retires at age 65 or after. The SRA is fully funded by
means of a corporate owned life insurance policy which was paid for in
eight (8) equal annual premium payments of Thirty Seven Thousand Four
Hundred Thirty One Dollars and Twenty Cents ($37,431.20) from 1987
through 1994.
<PAGE>13
Notes:
1 If disability occurs prior to July 1, 1995, Mr. Pijor will receive
the Fifty Thousand Dollar ($50,000.00) supplemental benefit as if he
had retired on or after July 1, 1995.
2 If death occurs after Mr. Pijor has established eligibility benefits
(i.e., meeting the age requirements) then the applicable benefit,
based on the corresponding age, will be paid to the
appropriate beneficiaries.
3 If discharge "without cause" occurs, Mr. Pijor will receive
the Fifty Thousand Dollar ($50,000.00) supplemental benefit as if he
had remained employed until his normal retirement date (i.e., July 1,
1995).
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<PAGE>14
CONSULTING AGREEMENT
On March 15, 1994, the Bank and the Corporation entered into a
Consulting Agreement (The Agreement) with Mr. Stanley G. Pijor. The
Agreement provides that Mr. Pijor shall receive a consulting fee of
$85,000 each year for a period of five (5) years commencing January 1,
1996. The Agreement also stipulates that Mr. Pijor will be provided
with an automobile and will be reimbursed for reasonable expenses
relative to his duties as a consultant during the term of the
Agreement. Termination of the Agreement (by either party) would not
prejudice Mr. Pijor's right to receive the benefits referred to above
for a period of two (2) years.
PENSION PLAN
The Bank sponsors the Lorain National Bank Retirement Pension Plan
(the Plan) covering substantially all employees of the Bank. An
employee is eligible to participate on January 1 or July 1 after the
attainment of age twenty-one (21) and completion of one year of
service, as defined in the Plan.
Participants are eligible for normal retirement upon reaching are
sixty-five (65). Annual benefit payments are determined as a
percentage for the five (5) consecutive plan years that yield the
highest average salary. Participants in the Plan prior to January 1,
1989 will have annual benefit payments reduced if they have less than
fifteen (15) years of continuous employment upon retirement.
Participants who join the Plan after January 1, 1989 will have benefit
payments reduced if they have less than twenty-five (25) years of
continuous employment upon retirement. The normal form of benefit
payment is a joint and survivor annuity. Benefits become fully vested
after a participant has completed five (5) years of service. The Plan
also provides for the payment of early retirement, death, disability,
and deferred vested benefits.
Annual benefit payments under the provisions of the Plan are
computed by a formula, the factors of which include annual
compensation, years of service and the social security taxable wage
base.
Assuming the participant selects the benefit payable in a ten (10)
year Certain and Life Annuity at normal retirement date, the following
table reflects annual benefits payable to the employee based upon
average annual compensation levels and twenty-five (25) years of
service.
Employee's Annual Estimated Pension
Final Average Payments Assuming Minimum of
Annual Compensation 25 Years of Service
$250,000* $76,725
200,000* 76,725
150,000 76,725
100,000 49,850
<PAGE>15
*The current annual compensation limit with respect to determining
an employee's annual pension payment is limited in 1994 by the
Internal Revenue Code to $150,000. The Plan reflects the annual
compensation limit and this results in a maximum annual pension
payment of $76,725. Therefore, an employee's annual estimated pension
payment for final average compensation levels of $150,000 and above
remains at the $76,725 level. Pension benefits accrued prior to 1994
are grandfathered, if their calculated benefit is greater than
$76,725. These pension payments do not reflect any additional
retirement benefits which the employee may receive in the form of
Social Security and other forms of supplemental retirement benefits.
Messrs. Pijor, Kidd and Ryan have thirty-nine (39), thirty (30) and
thirty-three (33) credited years of service respectively, under the
provisions of the Plan.
The Bank's 1994 contribution to the Plan was $138,282. The amount
of contributions with respect to a specific person is not and cannot
readily be calculated on an individual basis.
-11-
<PAGE>16
PERFORMANCE GRAPH
The graph which follows compares the five (5) year cumulative total
return from investing $100 on December 31, 1989 in each of LNB
Bancorp, Inc. common stock, the Standard & Poor's 500 Index (S&P 500
Index) of companies and the National Association of Securities Dealers
Association Quotation System Banks Index (NASDAQ Banks Index) of
companies, with dividends assumed to be reinvested when received.
December 31,
1989 1990 1991 1992 1993 1994
LNB Bancorp, Inc. $100 $125 $140 $159 $196 $237
S&P 500 Index $100 $ 97 $126 $136 $150 $152
NASDAQ Banks Index $100 $ 73 $120 $175 $199 $199
-12-
<PAGE>17
BENEFICIAL OWNERSHIP OF SHARES
The following table reflects as of December 31, 1994, any person
known to the Corporation to be the beneficial owner of more than five
percent (5%) of any class of the Corporation's voting securities,
consisting of common stock only, as well as the total number of shares
of common stock beneficially owned by each director, nominee, and the
directors and executive officers of the Corporation as a group.
Five Percent Beneficial Ownership
Amount and Nature Percent
Name and Address of of Beneficial of
Beneficial Owner Ownership Class
Standen and Co. as nominee for
The Lorain National Bank 445,835(1) 13.93%
457 Broadway
Lorain, Ohio 44052
(1) The Bank, a wholly owned subsidiary of LNB Bancorp, Inc. (a U. S.
Corporation) disclaims beneficial ownership of all shares. The shares
were held by the Bank in various accounts administered by it, as
fiduciary, for the benefit of beneficiaries, donors, or principals of
such accounts. The Bank, as fiduciary, had (a) sole power to vote
110,213 shares; (b) sole investment power to purchase/sell, but no
power to vote on 166,885 shares; (c) shared investment power with sole
power to vote with respect to 42,912 shares; and (d) no investment
power and no power to vote on 162,907 shares. Shares of the
Corporation held by the Bank in various fiduciary capacities will be
voted only in accordance with directions, approvals or instructions
where called by the governing instruments or by law, and in the
absence of special factors affecting any individual account, will be
voted in accordance with management's recommendations where the Bank
as fiduciary has authority to determine the manner of voting.
<PAGE>18
BENEFICIAL OWNERSHIP OF MANAGEMENT (As of December 31, 1994)
Sole Shared Total Amount
Investment and Investment and of Beneficial Percent
Name Voting Power Voting Power Ownership of Class
James L. Bardoner 6,531 479 7,010 .22%
Daniel P. Batista 17,237 37,369 54,606 1.71%
Wellsley O. Gray 6,366 3,550 9,916 .31%
James F. Kidd 35,754 660 36,414 1.14%
David M. Koethe 44,153 142 44,295 1.38%
Benjamin G. Norton 34,567 35,656 70,223 2.19%
Stanley G. Pijor 55,028 25,606 80,634 2.52%
James H. Riddell 18,005 2,194 20,199 .63%
Thomas P. Ryan 30,033 976 31,009 .97%
Don A. Sanborn 9,746 -0- 9,746 .30%
T. L. Smith, M.D. 10,968 7,806 18,774 .59%
Eugene M. Sofranko 5,146 16,804 21,950 .69%
Paul T. Stack 7,562 878 8,440 .26%
Leo Weingarten 82,966 6,683 89,649 2.80%
Executive Officers
who are not
Directors 55,693 321 56,014 1.75%
------- -------- ------- ------
All Directors and
Executive Officers
as a Group 419,755 139,124 558,879 17.46%
======= ======== ======= ======
-13-
<PAGE>19
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Some of the directors of the Corporation and the companies with
which they are associated, are customers of and had banking
transactions with the Bank in the ordinary course of the Bank's
business during 1994. Loans and commitments to loans included in such
transactions were made on substantially the same terms, including
interest rates and collateral, as were those prevailing at the time
for comparable transactions with other persons, and in the opinion of
the management of the Bank, do not involve more than a normal risk of
collectibility or present other unfavorable features.
INCREASE AUTHORIZED SHARES AND FIX PAR VALUE AT $1.00 PER SHARE
The Board of Directors recommends that the shareholders approve an
amendment to Articles of Incorporation which would fix the par value
of the Common Stock of the Corporation at $1.00 per share and increase
the authorized number of shares from 4,000,000 to 5,000,000.
Ratification of the appointment of the increase in the number of
shares requires the affirmative vote of a majority of the shares of
Common Stock of the Corporation voting in person or by proxy at the
Annual Meeting of Shareholders. If the shareholders should not ratify
the increase in the number of authorized shares, the Board of
Directors will reconsider this action.
The purpose of this amendment is to allow for a split of the Common
Stock of the Corporation on a basis of five-for-four. The
shareholders of record on April 18, 1995, will be issued additional
shares on a five-for-four basis respective to their holding of Common
Stock of the Corporation on that date assuming the shareholders
approve the aforementioned amendment. This would increase the number of
shares outstanding by 802,692 shares and result in an increase in the
total number of shares outstanding from 3,210,765 to 4,013,457. The
five-for-four stock split combined with the impact of having the par value
of Common Stock fixed a $1.00 per share would result in an equity
transaction in which $802,692 would be transferred from additional capital
to Common Stock. This equity transaction would have no impact on retained
earnings. The calculation of the actual number of shares to be issued and
the amount of the resulting equity transaction will be based upon the
number of shares outstanding on the record date.
This action is recommended to allow more of our present and future
customers to acquire additional shares or become new shareholders of
LNB Bancorp, Inc.
No fractional shares will be issued. The Corporation will sell full
shares representing all the fractions to the highest bidder after
having solicited sealed bids from at least three (3) licensed
stockbrokers. The proceeds of the sale shall be distributed pro rata to
shareholders who would otherwise be entitled to fractional shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
PROPOSED AMENDMENT OF THE ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
<PAGE>
<PAGE>20
COMMON STOCK PRICES
Trading Ranges of Common Stock-Bid Price
1994 1993
HIGH LOW HIGH LOW
First Quarter $27.75 $26.25 $22.40 $21.80
Second Quarter 29.25 27.75 24.25 22.40
Third Quarter 30.00 29.25 24.75 24.25
Fourth Quarter 30.13 30.00 26.25 24.75
Bid prices are taken from those published daily by a newspaper of
general circulation in Lorain County, Ohio.
-14-
<PAGE>21
PRINCIPAL ACCOUNTANTS
The independent accounting firm of KPMG Peat Marwick LLP has served
as the principal accountants for the Bank since 1972. A representative
of the firm will be present at the Annual Meeting and will be available to
respond to questions and issue a statement if so desired.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Shareholders may submit proposals appropriate for shareholder action
at the Corporation's Annual Meeting consistent with the regulations of
the Securities and Exchange Commission. For proposals to be considered
for inclusion in the Proxy Statement for the 1996 Annual Meeting they
must be received by the Corporation no later than December 1, 1995.
Such proposals should be directed to LNB Bancorp, Inc., Attention:
Shareholder Relations, 457 Broadway, Lorain, Ohio 44052.
OTHER BUSINESS
Management is not aware of any other matter which may be presented
for action at the meeting other than the matters set forth herein.
Should any matter other than those set forth herein be presented for a
vote of the shareholders, the proxy in the enclosed form directs the
persons voting such proxy to vote in accordance with their judgement.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires the
Corporation's officers and directors to file reports of ownership and
changes of ownership of the Corporation's registered securities on
Forms 3, 4 and 5 with the Securities and Exchange Commission (SEC).
The Corporation believes that all officers and directors complied
with all filing requirements applicable to them with respect to
transactions during fiscal year 1994.
ANNUAL DISCLOSURE STATEMENT
Financial information regarding The Lorain National Bank is
available to our customers, shareholders and the general public upon
request. In accordance with Federal regulation to facilitate more
informed decision making by depositors, and the general public, we
will provide, upon request, an Annual Disclosure Statement containing
financial information for the last two (2) years. To obtain a copy of
the Annual Disclosure Statement, please contact Gregory D. Friedman,
Senior Vice President and Chief Financial Officer, The Lorain National
Bank, 457 Broadway, Lorain, Ohio 44052.
<PAGE>22
ANNUAL REPORT
A copy of the Corporation's Annual Report has been mailed to
shareholders prior to the meeting. The Annual Report is not intended
to be part of this Proxy Statement. A report of the operations of the
Corporation and the Bank for the fiscal year ended December 31, 1994
will be presented at the meeting. A copy of the Corporation's Annual
Report on Form 10-K under the Securities Exchange Act of 1934 is
available to shareholders without charge upon request to Thomas P.
Ryan, Executive Vice President and Secretary/Treasurer, LNB Bancorp,
Inc., 457 Broadway, Lorain, Ohio 44052.
By Order of the Board of Directors
/s/ Thomas P. Ryan
Thomas P. Ryan
Executive Vice President
and Secretary/Treasurer
-15-
<PAGE>23
PROXY ANNUAL MEETING LNB BANCORP, INC., LORAIN, OHIO
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoint JAMES L. BARDONER, DAVID M. KOETHE
and DANIEL P. BATISTA, as Proxies, each with the power to appoint
his substitute, and hereby authorize them to represent and to
vote, as designated below, all the shares of Common Stock of the
LNB Bancorp, Inc. held on record by the undersigned on March 10,
1995, at the Annual Meeting of Shareholders to be held on April
18, 1995 or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
Daniel P. Batista, David M. Koethe, Stanley G. Pijor,
Eugene M. Sofranko and Leo Weingarten
(Instruction: To withhold authority to vote for any
individual nominee write that nominee's name on the space
provided below.)
-----------------------------------------------------------------
2. INCREASE AUTHORIZED SHARES AND FIX PAR VALUE AT $1.00 PER
SHARE - Consideration of an amendment to the Articles of
Incorporation of LNB Bancorp, Inc. which would increase the
authorized number of shares from 4,000,000 to 5,000,000 and
fix the par value of the Common Stock at $1.00 per share to
allow for a five-for-four stock split of the Common Stock of
LNB Bancorp, Inc. if this proposal is approved.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>24
In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction
is made, this proxy will be voted for proposals 1 and 2.
Dated -----------, 1995 Number of shares in my/our name ---------
-------------------------- (L.S.)
-------------------------- (L.S.)
NOTE: Please sign exactly as name appears above. When signing
as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.
YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND MAIL THIS
PROXY FORM WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
A RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Please read and vote on other side.
