<PAGE> 1
SCHEDULE 14A
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:
|X| Preliminary proxy statement.
|_| Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
|_| Definitive proxy statement.
|_| Definitive additional materials.
|_| Soliciting materials pursuant to Rule 14a-11(c) or Rule 14a-12.
LNB BANCORP, 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 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 security 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:
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(4) Date Filed:
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<PAGE> 2
(PRELIMINARY COPIES)
[LNB BANCORP LETTERHEAD]
November , 1999
---
To Our Shareholders:
You are cordially invited to attend a Special Meeting of Shareholders to be held
on Tuesday, December 14, 1999 at 10:00 AM local time, at the Lorain National
Bank's main office, 521 Broadway, Lorain, Ohio.
Shareholder approval of several proposals will be sought at the Special Meeting.
You will be asked to consider and vote upon an increase in the authorized shares
of Common Stock, $1 par value, from 5,000,000 to 15,000,000. You will be asked
to consider and vote upon creating a class of Voting Preferred Stock, no par
value, with 1,000,000 authorized shares. In another proposal, you will also be
asked to consider and vote upon the elimination of preemptive rights for
shareholders. The Proxy Statement describes the purposes and material effects of
these proposals.
The Board of Directors believes that it is important to ask you to vote at a
Special Meeting, so that the Corporation will have the flexibility to act
quickly to take advantage of business opportunities as they arise. At present,
LNB Bancorp has only ______ shares of its Common Stock remaining that have not
been issued or reserved for issuance for specific purposes.
The banking industry is in a dynamic period. LNB Bancorp has also applied to
list its common stock on the NASDAQ Stock Market in the desire that there be
greater liquidity and visibility for shares of our Common Stock.
The Board of Directors asks that you approve the proposals (1) to increase the
authorized shares of Common Stock to 15,000,000, (2) to create a class of
1,000,000 shares of Voting Preferred Stock, and (3) to eliminate shareholders'
preemptive rights to acquire additional shares upon issuance, so that the
Corporation has the flexibility and is in a better position to take advantage of
potential acquisition, capital raising and other opportunities as they arise.
The Board of Directors believes that the proposals are in the best interest of
LNB Bancorp and its shareholders. THE BOARD OF DIRECTORS HAS UNANIMOUSLY
APPROVED THESE PROPOSALS FOR PRESENTATION TO YOU FOR YOUR VOTE.
It is important that your shares be voted, and we hope that you will be able to
attend the Special Meeting. We urge you to execute and return the enclosed form
of proxy as soon as possible, whether or not you expect to attend the Special
Meeting in person.
Sincerely,
James F. Kidd
President and Chief Executive Officer
Enclosures
<PAGE> 3
LNB BANCORP, INC.
LORAIN, OHIO
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 14, 1999
TO THE SHAREHOLDERS OF
LNB BANCORP, INC. November , 1999
---
A Special Meeting of Shareholders of LNB Bancorp, Inc. will be held at
521 Broadway, Lorain, Ohio 44052, on Tuesday, December 14, 1999, at 10:00 AM
local time for the purpose of considering and voting upon the following matters
as more fully described in the Proxy Statement.
PROPOSALS:
1. AUTHORIZATION OF ADDITIONAL SHARES OF COMMON STOCK - To approve an
amendment to the Articles of Incorporation of LNB Bancorp to
increase the number of authorized shares of Common Stock from
5,000,000 to 15,000,000 shares.
2. AUTHORIZATION OF PREFERRED STOCK - To approve an amendment to the
Articles of Incorporation of LNB Bancorp to provide for 1,000,000
authorized shares of Voting Preferred Stock.
3. ELIMINATION OF PREEMPTIVE RIGHTS - To approve an amendment to the
Articles of Incorporation of LNB Bancorp to eliminate the
preemptive right of shareholders to purchase additional shares
upon issuance.
Shareholders of record at the close of business on October 27, 1999,
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
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 SPECIAL MEETING. A RETURN ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE.
<PAGE> 4
LNB BANCORP, INC.
457 BROADWAY
LORAIN, OHIO 44052
PROXY STATEMENT FOR SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD DECEMBER 14, 1999
INTRODUCTION
This Proxy Statement is being furnished to shareholders of LNB Bancorp,
Inc. (the "Corporation") in connection with the solicitation of proxies by the
Board of Directors of the Corporation to be used at the Special Meeting of
Shareholders, and any adjournment thereof, to be held at the time and place set
forth in the accompanying notice ("Special Meeting"). It is anticipated that the
mailing of this Proxy Statement and the enclosed proxy card will commence on or
about November __, 1999.
At the Special Meeting, shareholders of the Corporation will be asked
to approve amendments to the Corporation's Articles of Incorporation to increase
the authorized shares of the Corporation's Common Stock from 5,000,000 to
15,000,000 shares, create a new class of Voting Preferred Stock with 1,000,000
authorized shares and eliminate preemptive rights of shareholders.
VOTING AND REVOCATION OF PROXIES
If the enclosed form of proxy is properly executed and returned to the
Corporation in time to be voted at the Special Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon. Where
properly executed proxies are returned but no such instructions are given, the
shares will be voted, (a) "For" the amendment to the Corporation's Articles of
Incorporation to increase the number of authorized shares of Common Stock from
5,000,000 to 15,000,000, (b) "For" the amendment to the Corporation's Articles
of Incorporation to provide for 1,000,000 shares of Voting Preferred Stock, and
(c) "For" the amendment to the Corporation's Articles of Incorporation to
eliminate the preemptive rights of shareholders.
The presence of a shareholder at the Special Meeting will not
automatically revoke such shareholder's proxy. However, shareholders may revoke
a proxy at any time prior to its exercise by filing with the Secretary of the
Corporation a written notice of revocation, by delivering to the Corporation a
duly executed proxy bearing a later date or by attending the Special Meeting and
voting in person. Written notices of revoked proxies may be directed to Thomas
P. Ryan, Executive Vice President and Secretary/Treasurer, 521 Broadway, Lorain,
Ohio 44052.
Directors and executive officers of the Corporation, and their
affiliates, had sole or shared voting power with respect to ___ shares of the
Corporation's Common Stock, representing __% of the Corporation's Common Stock
outstanding as of September 30, 1999. Such directors and officers have advised
the Corporation that they intend to vote all shares of the Corporation's Common
Stock that they are entitled to vote in favor of each of the proposals.
<PAGE> 5
SOLICITATION OF PROXIES
The cost of soliciting proxies in the form enclosed herewith will be
borne by the Corporation. In addition to the solicitation of proxies by mail,
the Corporation, through its directors, officers and regular employees, may also
solicit proxies personally or by telephone or telecopy without additional
compensation. The Corporation will also request persons, firms and corporations
holding shares in their names or in the name of their nominees, which are
beneficially owned by others, to send proxy material to and obtain proxies from
the beneficial owners and will reimburse the holders for their reasonable
expenses in doing so.
MEETING INFORMATION
DATE, PLACE AND TIME
The Special Meeting of Shareholders of the Corporation will be held on
Tuesday, December 14, 1999, at 10:00 AM, local time, at the Lorain National
Bank, 521 Broadway, Lorain, Ohio.
RECORD DATE; VOTING RIGHTS
Only shares of the Corporation's Common stock can be voted at the
Special Meeting. Each share entitles its owner to one vote on all matters. Each
proposal must be separately approved by the affirmative vote of holders of at
least two thirds of all the shares of the Corporation's Common Stock who are
entitled to vote.
The close of business on October 27, 1999, (the "Record Date") has been
fixed as the record date for the determination of shareholders entitled to vote
at the Special Meeting. There were approximately _____________ record holders of
the Corporation's Common Stock and ______ shares of the Corporation's Common
Stock outstanding as of the Record Date. The presence, in person or by proxy, of
a majority of the outstanding shares of the Corporation's Common Stock entitled
to vote is necessary to constitute a quorum at the Special Meeting. The
Corporation intends to count the shares of the Corporation's Common Stock
present in person at the Special Meeting but not voting, and shares of the
Corporation's Common Stock for which it has received proxies, but with respect
to which holders of shares have abstained on any matter, as present at the
Corporation's Special Meeting for purposes of determining the presence or
absence of a quorum for the transaction of business.
Abstentions on the proposals and shares not voted by brokers and other
entities holding shares on behalf of beneficial owners will count as a vote
against the proposals.
OWNERSHIP OF VOTING STOCK
The following table sets forth the beneficial ownership of the
Corporation's Common Stock by each of the Corporation's directors and the
Corporation's named executive officers, and the directors and executive officers
as a group, as of September 30, 1999.
<TABLE>
<CAPTION>
SHARES OF COMMON
NAME OF BENEFICIAL OWNER STOCK OWNED(1) PERCENT OF CLASS
- ------------------------ ----------------
<S> <C> <C>
Daniel P. Batista(2) 61,976 1.5%
Robert M. Campana(3) 14,226 *
Terry D. Goode(4) 26,316 *
Wellsley O. Gray(5) 10,009 *
James R. Herrick 2,345 *
James F. Kidd(6)* 54,660 1.3
David M. Koethe(7) 53,691 1.3
Benjamin G. Norton(8) 92,323 2.2
Stanley G. Pijor(9) 88,680 2.2
Jeffrey F. Riddell(10) 62,591 1.5
Thomas P. Ryan(11)* 37,122 *
John W. Schaeffer(12) 5,909 *
Eugene M. Sofranko(13) 29,715 *
Paul T. Stack(14) 10,303 *
Leo Weingarten(15) 106,519 2.6
All Directors and Executive
Officers as a Group
(17 in group) 686,612 16.7%
---- ---------- ---------
</TABLE>
*Ownership is less than 1% of the class.
- ---------------
(1) Except as otherwise noted, none of the named individuals shares with another
person either voting or investment power as to the shares reported.
(2) Includes 39,863 shares subject to shared voting and investment power.
(3) Includes 6,138 shares subject to shared voting and investment power.
(4) Includes 5,746 shares subject to shared voting and investment power.
(5) Includes 3,393 shares subject to shared voting and investment power.
(6) Includes 13,674 shares subject to shared voting and investment power and
3,454 shares subject to options which are exercisable within sixty days
of September 30, 1999.
(7) Includes 191 shares subject to shared voting and investment power.
(8) Includes 46,370 shares subject to shared voting and investment power.
(9) Includes 32,982 shares subject to shared voting and investment power.
(10) Includes 31,789 shares subject to shared voting and investment power.
(11) Includes 16,856 shares subject to shared voting and investment power and
2,143 shares subject to options which are exercisable within sixty days of
September 30, 1999.
(12) Includes 2,867 shares subject to shared voting and investment power.
(13) Includes 22,497 shares subject to shared voting and investment power.
(14) Includes 1,275 shares subject to shared voting and investment power.
(15) Includes 4,277 shares subject to shared voting and investment power.
As of September 30, 1999, no person was known by the Corporation to be
the beneficial owner of more than 5% of the outstanding shares of Common Stock
of the Corporation, except as follows:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES OF COMMON STOCK
BENEFICIAL OWNER OWNED PERCENT OF CLASS
- ------------------ ---------------------- ----------------
<S> <C> <C>
The Lorain National Bank 384,874(1) 9.36%
457 Broadway
Lorain, Ohio 44052
</TABLE>
- --------------
(1) These shares are held in various fiduciary capacities in the ordinary
course of business under numerous trust relationships by The Lorain
National Bank. As fiduciary, The Lorain National Bank has sole power to
dispose of 295,753 of these shares, shared power to dispose of 72,965
of these shares, sole power to vote 113,636 of these shares, and shared
power to vote none of these shares.
<PAGE> 6
PROPOSAL 1
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors of the Corporation believes that it would be in
the best interest of the Corporation and its shareholders that the Articles of
Incorporation be amended to increase the number of shares of Common Stock, $1
par value, from the 5,000,000 shares presently authorized to 15,000,000. The
number of shares of Common Stock outstanding as of October 27, 1999, was
___________. The Corporation holds __________ shares of Common Stock in
treasury. Shares of Common Stock have been reserved for issuance for the
following purposes in the designated amounts: ________ shares reserved for
issuance under the Corporation's Dividend Reinvestment and Cash Stock Purchase
Plan; and _________ shares reserved for issuance under the Corporation's stock
option plans. Accordingly, the Corporation currently has a total of ________
authorized but unissued shares and treasury shares of Common Stock uncommitted
to any purpose.
If the proposed amendment to the Articles of Incorporation is approved,
the Board of Directors will have the authority to issue the additional
authorized shares to those persons and for the consideration as it may determine
without further action by the shareholders except as shareholder action may be
required by law or contractual arrangements. Any issues of additional Common
Stock could have the effect of discouraging an attempt to acquire control of the
Corporation. For example, stock could be issued to persons, firms or entities
known to be friendly to management. An issuance of Common Stock at a price below
the book value per share will have a dilutive effect on the book value of
outstanding shares; such an issuance may also have a dilutive effect on earnings
per share and the relative voting power of present shareholders. The issuance of
Common Stock in a merger or acquisition may also have a dilutive effect. Except
as set forth in the preceding paragraph, the Corporation does not now have any
material commitments, arrangements or understandings which would require the
issuance of additional shares of Common Stock.
The Board of Directors believes that it is in the best interest of the
Corporation to increase the number of authorized shares of Common Stock, since
of the 5,000,000 shares presently authorized, a total of ____________ are
outstanding or have been reserved for issuance as of October 27, 1999 for
specific purposes. The Board of Directors believes that the ________ shares
remaining available for use are insufficient to enable the Board of Directors to
act quickly to take advantage of acquisition or other business opportunities
that may arise.
Shareholders currently have preemptive rights to acquire shares of
Common Stock upon issuance. Please see "Proposal 3" for a summary of those
preemptive rights and the reasons why the Board of Directors proposes they be
eliminated.
The first sentence of Article XI of the Corporation's Articles of
Incorporation currently states that "each shareholder shall be entitled to one
vote for each share of stock standing in his name on the books of the
Corporation." As part of this Proposal 1, the Board of Directors also seeks
approval to eliminate that sentence. If this proposal is adopted, Article IV of
the Articles of Incorporation will provide that holders of Common Stock will
continue to have one vote for each share of Common Stock.
<PAGE> 7
THE BOARD OF DIRECTORS UNANIMOUSLY APPROVES AND RECOMMENDS TO THE
SHAREHOLDERS THE ADOPTION OF THIS PROPOSED AMENDMENT TO THE ARTICLES OF
INCORPORATION.
PROPOSAL 2
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO PROVIDE FOR 1,000,000
AUTHORIZED SHARES OF VOTING PREFERRED STOCK
The Board of Directors has unanimously approved and determined to
submit to the shareholders for approval a proposal to amend the Corporation's
Articles to establish a class of Voting Preferred Stock, consisting of 1,000,000
authorized shares. If adopted, the proposed amendment will enable the
Corporation, at the option of the Board of Directors, to issue series of Voting
Preferred Stock in a manner calculated to take advantage of financing techniques
which may provide a lower effective cost of capital to the Company. The proposed
amendment, if adopted, will also provide significantly greater flexibility to
the Board of Directors in structuring the terms of equity securities that may be
issued by the Corporation.
If the proposed amendment is approved by shareholders, the Board of
Directors will be authorized, without shareholder approval, to issue shares of
Voting Preferred Stock on the terms that the Board determines in its discretion.
For example, the Board will be able to determine the dividend or distribution
rate, dates for payment of dividends or distributions, whether dividends are
cumulative, that is, whether dividends must first be paid on outstanding shares
of Preferred Stock that are issued before Common Stock dividends are paid,
liquidation prices, redemption rights and prices, any sinking fund requirements,
any conversion rights and any restrictions on the issuance of any series of
Voting Preferred Stock. The shares of Voting Preferred Stock may be issued with
voting rights which could adversely affect the voting power of the holders of
Common Stock. The shares of Voting Preferred Stock may be issued with conversion
rights which could adversely affect the voting power of the holders of Common
Stock.
MATTERS COMMON TO BOTH PROPOSALS
DISCUSSION. The Board of Directors is of the opinion that the present
shares of Common Stock available for issuance are insufficient to enable the
Corporation to take advantage of business opportunities that may arise. The
purposes for increasing the number of shares of Common Stock available for
issuance and establishing the class of Voting Preferred Stock are to give the
Corporation the flexibility to take advantage of various business opportunities,
including acquisitions, financings, raising additional capital, stock splits and
stock dividends, compensation plans, shareholders' rights plans and other
corporate purposes.
With several exceptions, such as to eliminate fractional shares, the
Ohio General Corporation Law requires that in order for the Board of Directors
of the Corporation to have the power generally to act for the Corporation to
purchase or redeem its shares, the Articles of Incorporation must authorize it.
The Corporation's Articles of Incorporation
<PAGE> 8
presently authorize the Board of Directors to purchase or redeem shares of the
Common Stock. If these proposals are approved, that authorization will be
continued and will be extended to include authorization for the Board of
Directors to redeem or repurchase all securities issued by the Corporation
generally, unless the express terms of any particular shares exclude that right.
POSSIBLE ANTI-TAKEOVER EFFECT OF PROPOSALS. The Board of Directors does
not believe that an increase in the number of authorized shares of Common Stock,
nor the establishment of the class of Voting Preferred, will have a significant
impact on any attempt to gain control of the Corporation. It is possible,
however, that the availability of authorized but unissued shares of Common Stock
or Preferred Stock could discourage third parties from attempting to gain such
control since the Board could authorize the issuance of shares of Common Stock
or Preferred Stock in a private placement or otherwise to one or more persons.
Such an issuance of shares could dilute the voting power of a person attempting
to acquire control of the Corporation, increase the cost of acquiring such
control or otherwise hinder such efforts.
The Corporation's Articles and Code of Regulations contain certain
provisions that may be viewed as having anti-takeover effects. Under these
provisions, the Corporation's Board of Directors is divided into three classes
with approximately one-third of the members of the Board nominated for election
each year. Directors may be removed only by the affirmative vote of at least 75%
of the Corporation's outstanding voting power and advance notice is required
from shareholders nominating a Director. In addition, the affirmative vote of
75% of the Corporation's outstanding voting power is required to approve certain
business transactions (such as mergers or disposition of substantially all of
its assets) involving an "interested shareholder", defined as another entity
owning ten percent or more of the outstanding capital stock of the Corporation,
unless first approved by the majority of the Corporation's directors not
affiliated with the interested shareholder. The Articles of Incorporation also
require the approval of 66-2/3% of the outstanding shares, exclusive of shares
held by the interested shareholder, or the payment of a "fair price," as defined
in the Articles of Incorporation, for any shares acquired by an interested
shareholder unless approved by the directors who are not affiliated with the
interested shareholder.
The Corporation is also subject to two sets of provisions under the
Ohio General Corporation Law which are referred to as the "Control Share
Acquisition Act" and the "Merger Moratorium Statute." The Control Share
Acquisition Act prescribes certain notice and informational filings, and special
meeting and voting procedures, which must be followed prior to consummation by
an acquirer of a company's voting shares within any of the following ranges: 20%
or more but less than 33-1/3%; 33-1/3% but less than a majority; and a majority
or more. The acquisition may be made if it is approved by both a majority of the
voting power of the company and a majority of the voting power remaining after
excluding the voting power of the acquirer and certain affiliated parties. The
Merger Moratorium Statute regulates certain business combinations between a
"public company" and an "interested shareholder" such as mergers or disposition
of substantially all of the company's assets. Subject to certain exceptions,
these transactions are prohibited for a three-year period. Prior to the end of
the three-year period, a prohibited transaction may take place provided certain
conditions are satisfied.
<PAGE> 9
The Board of Directors is not aware of any present threat or attempt to
gain control of the Corporation and the amendments described herein are not in
response to any such action. These proposals are not part of a plan by the
Corporation to adopt a series of amendments with an anti-takeover purpose and
the Corporation does not currently intend to propose other measures in future
proxy solicitations.
FORM OF AMENDMENT TO ARTICLES - Assuming both Proposals are adopted,
the text of Articles IV and XI of the Corporation's Articles of Incorporation
would be as set forth in the attached Exhibit A.
VOTE REQUIRED FOR APPROVAL - The affirmative vote of the holders of at
least two-thirds (66-2/3%) of the outstanding shares of Common Stock of the
Corporation entitled to notice of and to vote at the meeting is required for the
adoption of each Proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY APPROVES AND RECOMMENDS TO THE
SHAREHOLDERS THE ADOPTION OF THESE PROPOSED AMENDMENTS TO THE ARTICLES OF
INCORPORATION.
PROPOSAL 3
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO ELIMINATE PREEMPTIVE RIGHTS
The Board of Directors believes that it would be in the best interest
of the Corporation and its shareholders to eliminate the preemptive right of
shareholders to purchase additional shares upon issuance. With certain
exceptions, such as the sale by the Corporation of shares repurchased by it and
held in treasury or the issuance of shares upon the exercise of options awarded
under its current stock option plans, holders of the Corporation's stock of any
class presently have the preemptive right to acquire additional shares of the
class of stock they hold in proportion to their holdings when the Corporation
sells shares of that class of stock for cash. The Corporation's right to declare
stock dividends and splits will not be affected by the elimination of preemptive
rights. The Board of Directors believes that the existence of preemptive rights
inappropriately restricts the Board of Directors' ability to react to the
potential for issuance of new shares at such times and upon such conditions as
the Board of Directors may deem appropriate. The Board believes that the concept
of preemptive rights is appropriate in a more closely held corporation so as to
allow shareholders to maintain their pro rata interest in the company. The
Corporation is a public corporation with ____ shareholders of record as of
October 27, 1999. Only the Lorain National Bank, as trustee, beneficially
owns in excess of five percent of the voting stock of the Corporation. The
affirmative vote of the holders of at least two-thirds (66-2/3%) of the
outstanding shares of Common Stock the Corporation entitled to notice of
and to vote at the meeting is required to adopt Proposal 3.
THE BOARD OF DIRECTORS UNANIMOUSLY APPROVES AND RECOMMENDS TO THE
SHAREHOLDERS THE ADOPTION OF THIS PROPOSED AMENDMENT TO THE ARTICLES OF
INCORPORATION.
<PAGE> 10
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 2000 Annual Meeting, they must be received by the
Corporation no later than November 23, 1999. Such proposals should be directed
to LNB Bancorp, Inc., Attention: Shareholder Relations, 457 Broadway, Lorain,
Ohio 44052. On any other proposal raised by a shareholder for next year's
annual meeting, the Corporation intends that proxies received by it will be
voted in the interest of the Corporation in accordance with the judgement of the
Board of Directors and the proposal will be considered untimely, unless notice
of the proposal is received by the Corporation not later than March 6, 2000.
The Corporation's Code of Regulations establishes advance notice
procedures as to the nomination, other than by the Board of Directors, of
candidates for election as directors. In order to make a director nomination
it is necessary that you notify the Corporation no fewer than 14 days in advance
of next year's Annual Meeting unless the Corporation gives you less than 21 days
notice of the Annual Meeting and then notice of nominations must be given no
later than the seventh day after we mailed notice of the Annual Meeting to you.
Notice of nominations of directors must also meet all other requirements
contained in the Corporation's Code of Regulations. You may obtain the Code of
Regulations by written request to the Corporation's Secretary at our principal
executive offices.
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.
By Order of the Board of Directors
Thomas P. Ryan
Executive Vice President
and Secretary/Treasurer
<PAGE> 11
EXHIBIT A
ARTICLE IV
FOURTH: Subject to the provisions of this Article FOURTH, the total number of
shares of all classes of stock which the Corporation shall have the authority to
issue is 16,000,000 shares consisting of (i) 15,000,000 shares of Common Stock,
$1 par value (the "Common Stock"); and (ii) 1,000,000 shares of Voting Preferred
Stock, no par value (the "Voting Preferred Stock").
A. Common Stock.
The holders of the Common Stock are entitled at all times to one vote for each
share and to such dividends as the Board of Directors may in its discretion from
time to time legally declare, subject, however, to the voting and dividend
rights of the holders of the Voting Preferred Stock. In the event of any
liquidation, dissolution or winding up of the Corporation, the remaining assets
of the Corporation after the payment of all debts and necessary expenses shall
be distributed among the holders of the Common Stock pro rata in accordance with
their respective holdings, subject, however, to the rights of the holders of the
Voting Preferred Stock then outstanding. The Common Stock is subject to all of
the terms and provisions of the Voting Preferred Stock as fixed by the Board of
Directors as hereinafter provided.
B. Voting Preferred Stock
The Board of Directors is hereby expressly authorized to adopt amendments to the
Articles of Incorporation to provide for the issuance of one or more series of
Voting Preferred Stock, to establish from time to time the number of shares to
be included in each such series, to fix the designation, powers, preferences and
rights of the shares of each such series and any qualifications, limitations or
restrictions thereof, including without limitation the following, and the shares
of each series may vary from the shares of any other series in the following
respects:
(a) the division of such shares into series and the designation
and authorized number of shares of each series;
(b) the dividend rate on the shares;
(c) the dates of payment of dividends, whether the dividends shall
be cumulative and, if cumulative, the date from which
dividends shall accumulate;
(d) the redemption rights, if any, and the redemption price or
prices for the particular series, if redeemable, and the terms
and conditions of such redemption;
<PAGE> 12
(e) sinking fund requirements, if any;
(f) the preference, if any, of the shares of such series in the
event of any voluntary or involuntary liquidation, dissolution
or winding up of affairs of the Corporation;
(g) the right, if any, of the shares of such series to be
converted into shares of any other series or class and the
terms and conditions of such conversion; and
(h) any other relative rights, preferences and limitations of that
series.
The holders of Voting Preferred Stock shall be entitled at all times to one vote
for each share, voting as a class. Voting Preferred Stock redeemed or otherwise
acquired by the Corporation shall assume the status of authorized but unissued
Voting Preferred Stock and shall be unclassified as to series and may
thereafter, subject to the provisions of this Article FOURTH, as it may be
amended, be reissued in the same manner as other authorized but unissued Voting
Preferred Stock.
C. Purchase of Securities
The Board of Directors of the Corporation shall have the power to cause the
Corporation from time to time and at any time to purchase, redeem, hold, sell,
transfer or otherwise deal with (1) shares of any class or series issued by it,
subject to the express terms of such shares, (2) any security or other
obligation of the Corporation which may confer upon the holder thereof the right
to convert the same into shares of any class or series authorized by the
Articles, and (3) any security or other obligation which may confer upon the
holder thereof the right to purchase shares of any class or series authorized by
the Articles. The Corporation shall have the right to repurchase, if and when
any shareholder desires to sell, or on the happening of any event is required to
sell, shares of any class or series issued by the Corporation. The authority
granted in this paragraph C of Article IV of these Articles shall not limit the
plenary authority of the Directors to purchase, redeem, hold, sell, transfer or
otherwise deal with shares of any class or series, or other securities or
obligations issued by the Corporation or authorized by its Articles.
ARTICLE XI
ELEVENTH: No holders of shares of any class shall have the right to vote
cumulatively in the election of directors.
<PAGE> 13
REVOCABLE PROXY
LNB BANCORP, INC.
|X| PLEASE MARK VOTES AS IN THIS EXAMPLE
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD DECEMBER 14, 1999
The undersigned hereby appoints Eugene M. Sofranko, Daniel P. Batista,
and David M. Koethe, and each of them, with power of substitution, proxies and
agents of the undersigned to vote at the Special Meeting of Shareholders of LNB
Bancorp, Inc. (the "Corporation") to be held at The Lorain National Bank, 521
Broadway, Lorain, Ohio 44052, on December 14, 1999, at 10:00 AM, local time and
at any adjournment thereof, all shares of common stock of the Corporation which
the undersigned would be entitled to vote if personally present for the
following matters.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
1. AUTHORIZATION OF ADDITIONAL SHARES OF COMMON STOCK-Approval of an
amendment to the Corporation's Articles of Incorporation to increase
the number of authorized shares of Common Stock from 5,000,000 to
15,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. AUTHORIZATION OF PREFERRED STOCK - Approval of an amendment to the
Articles of Incorporation of the Corporation to provide for 1,000,000
authorized shares of Voting Preferred Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. ELIMINATION OF PREEMPTIVE RIGHTS - Approval of an amendment to the
Corporation's Articles of Incorporation to eliminate the preemptive
right of shareholders to purchase additional shares of Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. TO TRANSACT SUCH OTHER BUSINESS AS PROPERLY MAY COME BEFORE THE
MEETING.
In their discretion, the proxies are authorized to vote in their
judgment upon such other business as properly may come before the meeting or any
adjournment thereof. At the present time, the Board of Directors knows of no
other business to be presented at the meeting.
<PAGE> 14
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted FOR Proposals 1, 2 and 3. The undersigned acknowledges
receipt of the Notice of Special Meeting of Shareholders and the related Proxy
Statement.
Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. 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 an authorized
person.
PLEASE BE SURE TO SIGN AND DATE THIS PROXY IN THE BOX BELOW:
DATE:
SHAREHOLDER SIGN ABOVE CO-HOLDER (IF ANY) SIGN ABOVE
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID
ENVELOPE PROVIDED.
LNB BANCORP, INC.
PLEASE ACT PROMPTLY
SIGN, DATE, & MAIL YOUR PROXY CARD TODAY
