<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
LSB FINANCIAL CORP.
- -----------------------------------------------------------------------------
(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:
___________________________________________________________________________
<PAGE>
LSB Financial Corp.
101 Main Street
Lafayette, Indiana 47901
(765) 742-1064
March 18, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of LSB Financial
Corp. (the "Company"), I cordially invite you to attend the Annual Meeting of
Stockholders of the Company. The meeting will be held at 9:00 a.m., Lafayette,
Indiana time, on April 15, 1998 at the Riehle Plaza located at 200 N. Second
Street, Lafayette, Indiana.
An important aspect of the meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder to
vote and participate in this process. Stockholders are being asked to consider
and vote upon the proposals to elect three directors of the Company and to
ratify the appointment of auditors. In addition, the meeting will include
management's report to you on the Company's 1997 financial and operating
performance.
We encourage you to attend the meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the meeting.
Very truly yours,
/s/ John W. Corey
-----------------------------------------
John W. Corey
President and Chief Executive Officer
<PAGE>
LSB FINANCIAL CORP.
101 Main Street
Lafayette, Indiana 47901
(765) 742-1064
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 15, 1998
-------------------------
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of LSB Financial Corp. ("LSB" or the "Company") will be held at the
Riehle Plaza located at 200 N. Second Street, Lafayette, Indiana on April 15,
1998 at 9:00 a.m.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company;
2. The ratification of the appointment of Crowe, Chizek and
Company LLP as auditors of the Company for the fiscal year
ending December 31, 1998;
and such other matters as may properly come before the Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on March 13, 1998 are
the stockholders entitled to vote at the Meeting, and any adjournments thereof.
You are requested to complete and sign the enclosed Form of Proxy which
is solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors
/s/ John W. Corey
--------------------------------------
John W. Corey
President, Chief Executive Officer
and Director
Lafayette, Indiana
March 18, 1998
- -------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
- -------------------------------------------------------------------------------
<PAGE>
LSB FINANCIAL CORP.
101 Main Street
Lafayette, Indiana 47901
(765) 742-1064
-----------------------------
PROXY STATEMENT
-----------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 15, 1998
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of the Company of proxies to be used at the
Meeting which will be held at the Riehle Plaza located at 200 N. Second Street,
Lafayette, Indiana on April 15, 1998 at 9:00 a.m., and all adjournments of the
Meeting. The accompanying Notice of Meeting and this Proxy Statement are first
being mailed to stockholders on or about March 18, 1998. Certain of the
information provided herein relates to Lafayette Savings Bank, FSB (the "Bank"),
a wholly owned subsidiary of the Company.
Vote Required and Proxy Information
All shares of Company common stock ("Company Common Stock") represented
at the Meeting by properly executed proxies received prior to or at the Meeting,
and not revoked, will be voted at the Meeting in accordance with the
instructions thereon. If no instructions are indicated, properly executed
proxies will be voted for the adoption of the proposals set forth in this Proxy
Statement. The Company does not know of any matters, other than as described in
the Notice of Annual Meeting, that are to come before the Meeting. If any other
matters are properly presented at the Meeting for action, the persons named in
the enclosed form of proxy and acting thereunder will have the discretion to
vote on such matters in accordance with their best judgment.
Directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. Ratification of Crowe, Chizek and Company LLP as auditors
for the Company for the fiscal year ending December 31, 1998 requires the
affirmative vote of a majority of the shares present or represented at the
meeting.
Proxies marked to abstain with respect to a proposal have the same
effect as votes against the proposal. Broker non-votes have no effect on the
vote. One-third of the shares of the Company's Common Stock, present in person
or represented by proxy, shall constitute a quorum for purposes of the Meeting.
Abstentions and broker non-votes are counted for purposes of determining a
quorum.
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to Mary Jo David, Corporate Secretary of the Company, at the address
above or by the filing of a later dated proxy prior to a vote being taken on a
particular proposal at the Meeting. Proxies may also be revoked by attending the
meeting and voting in person (although attendance at the meeting will not in and
of itself constitute revocation of a proxy).
1
<PAGE>
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on March 13, 1998
(the "Voting Record Date") will be entitled to one vote for each share then
held. As of that date, the Company had 916,350 shares of Common Stock issued and
outstanding. No persons other than those listed below are known by management to
beneficially own more than five percent of the outstanding shares of the
Company's Common Stock.
Beneficial Percent of
Beneficial Owner Ownership Class
---------------- --------- -----
LSB Financial Corp. 86,164(1) 9.40%
Employee Stock Ownership Plan
All officers and directors 179,270(2) 19.56%
(12 persons) as a group
- ---------------------
(1) Represents shares held by the LSB Financial Corp. Employee Stock Ownership
Plan (the "ESOP"), 26,225 shares which have been allocated to accounts of
participants. Pursuant to the terms of the ESOP, participants in the ESOP
have the right to direct the voting of shares allocated to participant
accounts. First Bankers Trust Company, N.A., Quincy, Illinois, as the
trustee of the ESOP, may also be deemed to be a "beneficial owner" of the
shares held by the ESOP which have not been allocated to a specific
participant's account or which have been allocated but not voted by the
participants.
(2) Includes shares held directly, as well as shares held in retirement
accounts or by certain members of such individuals' families, over which
shares the respective directors and officers may be deemed to have sole or
shared voting or investment power. Includes an aggregate of 12,968 shares
which directors and executive officers have the right to acquire pursuant
to options granted under the Company's 1995 Stock Option and Incentive Plan
(the "Stock Option Plan").
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of ten members,
each of whom is also a director of the Bank. Approximately one-third of the
directors are elected annually. Directors of the Company are generally elected
to serve for a three-year period or until their respective successors shall have
been elected and shall qualify.
The table below sets forth certain information, as of the Voting Record
Date, regarding the composition of the Company's Board of Directors, including
their terms of office. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
one or more nominees) will be voted at the Meeting for the election of the
nominees identified below for terms of three years. If any nominee is unable to
serve, the shares represented by all such proxies will be voted for the election
of such substitute as the Board of Directors may recommend. At this time, the
Board of Directors knows of no reason why any of the nominees might be unable to
serve, if elected. There are no arrangements or understandings between any
nominee and any other person pursuant to which such nominee was selected.
2
<PAGE>
<TABLE>
<CAPTION>
Shares of
Current Common Percent
Director Term to Stock of
Name Age Positions Held in the Company Since(1) Expire Owned(2) Class
- ------------------------- --- ----------------------------------- ---------- -------- -------- ------
NOMINEES
--------
<S> <C> <C> <C> <C> <C> <C>
Mariellen M. Neudeck 56 Chairman of the Board 1986 2001 15,393(4)(8) 1.68
Harry A. Dunwoody 51 Senior Vice President and Director 1993 2001 9,199(9) 1.00
C. Wesley Shook 68 Director 1986 2001 17,967(4)(10) 1.96
DIRECTORS CONTINUING IN OFFICE
------------------------------
Peter Neisel 59 Director 1990 1999 12,770(4)(11) 1.39
Jeffrey A. Poxon 51 Director 1992 1999 10,167(4)(12) 1.11
Thomas L. Ryan 69 Director 1978 1999 12,769(4)(13) 1.39
John W. Corey 63 President, Chief Executive Officer 1991 2000 19,302(3) 2.11%
and Director
James A. Andrew 49 Director 1978 2000 19,542(4)(5) 2.13
Philip W. Kemmer 54 Director 1985 2000 2,794(4)(6) .30
John C. Shen 67 Director 1986 2000 42,956(4)(7) 4.69
</TABLE>
- --------------------
(1) Includes service as a director of the Bank.
(2) The nature of beneficial ownership for shares reported in this column
is sole voting and investment power, except as otherwise noted in these
footnotes.
(3) Included in the shares of Common Stock beneficially owned by Mr. Corey
are (i) 4,150 shares owned jointly by Mr. Corey and his spouse over
which Mr. Corey has shared voting and dispositive power, (ii) 8,107
shares granted to Mr. Corey under the RRP, 3,242 shares over which he
shares voting and dispositive power with his wife and 4,864 restricted
shares as to which the voting power has been transferred to a third
party until such restricted shares are vested and no longer subject to
restriction, (iii) 1,749 shares held by the ESOP over which Mr. Corey
has sole voting and shared dispositive power, (iv) an option to
purchase 6,486 shares granted to Mr. Corey under the Stock Option Plan
and (v) 26 shares held by Mr. Corey as custodian for his minor
granddaughter over which Mr. Corey has sole voting and dispositive
power.
(4) Included in the shares of Common Stock beneficially owned by such
individual are (i) 1,621 shares granted to each non-employee director
under the RRP, 648 shares over which the individual has sole voting and
dispositive power and 973 restricted shares as to which the voting
power has been transferred to a third party until such restricted
shares are vested and no longer subject to restriction and (ii) an
option to purchase 1,621 shares granted to each non-employee director
under the Stock Option Plan.
(5) Also included in the shares of Common Stock beneficially owned by Mr.
Andrew are (i) 8,925 shares owned jointly by Mr. Andrew and his spouse
and 2,110 shares owned jointly by Mr. Andrew and his children, over
which Mr. Andrew has shared voting and dispositive power, (ii) 1,470
shares owned individually by Mr. Andrew's spouse over which Mr. Andrew
may be deemed to have shared voting and dispositive power, (iii) 704
shares owned individually by Mr. Andrew's children, over which Mr.
Andrew may be deemed to have shared voting and dispositive power, (iv)
525 shares owned individually by Mr. Andrew's in-laws, over one of
which Mr. Andrew may be deemed to have shared voting and dispositive
power and (v) 525 shares held by a trust over which he may be deemed to
have shared voting and dispositive power.
(6) Also included in the shares of Common Stock beneficially owned by Mr.
Kemmer are 525 shares owned jointly by Mr. Kemmer and his spouse over
which Mr. Kemmer has shared voting and dispositive power.
(7) Also included in the shares of Common Stock beneficially owned by Mr.
Shen are (i) 31,238 shares owed jointly by Mr. Shen and his spouse over
which Mr. Shen has shared voting and dispositive power, (ii) 7,875
shares owned individually by Mr. Shen's children over
3
<PAGE>
which Mr. Shen may be deemed to have shared voting and dispositive
power and (iii) 1,575 shares owned individually by Mr. Shen's
grandchildren over which Mr. Shen may be deemed to have shared voting
and dispositive power.
(8) Also included in the shares of Common Stock beneficially owned by Ms.
Neudeck are (i) 7,875 shares owned jointly by Ms. Neudeck and her
spouse over which Ms. Neudeck has shared voting and dispositive power
and (ii) 4,022 shares owned individually by Ms. Neudeck's spouse over
which Ms. Neudeck may be deemed to have shared voting and dispositive
power.
(9) Included in the shares of Common Stock beneficially owned by Mr.
Dunwoody are (i) 1,050 shares owned jointly by Mr. Dunwoody and his
spouse over which Mr. Dunwoody has shared voting and dispositive power,
(ii) 4,053 shares granted to Mr. Dunwoody under the RRP, 1,621 shares
over which he has sole voting and dispositive power and 2,432
restricted shares as to which the voting power has been transferred to
a third party until such restricted shares are vested and no longer
subject to restriction, (iii) 1,306 shares held by the ESOP over which
Mr. Dunwoody has sole voting and shared dispositive power and (iv) an
option to purchase 2,702 shares granted to Mr. Dunwoody under the Stock
Option Plan.
(10) Also included in the shares of Common Stock beneficially owned by Mr.
Shook are 7,823 shares held in trust for which Mr. Shook is the trustee
and over which Mr. Shook has sole voting and dispositive power.
(11) Also included in the shares of Common Stock beneficially owned by Mr.
Neisel are 7,875 shares owned jointly by Mr. Neisel and his spouse over
which Mr. Neisel has shared voting and dispositive power.
(12) Also included in the shares of Common Stock beneficially owned by Mr.
Poxon are (i) 525 shares owned jointly by Mr. Poxon and his spouse over
which Mr. Poxon has shared voting and dispositive power and (ii) 2,035
shares owned individually by Mr. Poxon's spouse over which Mr. Poxon
may be deemed to have shared voting and dispositive power.
(13) Also included in the shares of Common Stock beneficially owned by Mr.
Ryan are 2,625 shares owned individually by Mr. Ryan's spouse over
which Mr. Ryan may be deemed to have shared voting and dispositive
power.
The business experience of each director is set forth below. All
directors have held their present positions for at least the past five years,
except as otherwise indicated.
Mariellen M. Neudeck. Ms. Neudeck is a Vice President of St. Elizabeth
Hospital Medical Center and is responsible for the administration of nine
departments and seven functional areas of the hospital. She was elected as
Chairman of the Board of the Bank in 1993 and of the Company in 1994.
Harry A. Dunwoody. Mr. Dunwoody has served as Senior Vice President of
the Bank since 1989 and was elected as a Director of the Bank in 1993. He has
held the same positions with the Company since its formation in 1994. He is
responsible for the residential and consumer lending functions of the Bank.
C. Wesley Shook. Mr. Shook is Secretary-Treasurer of The Shook Agency,
an independently owned and operated real estate company.
Peter Neisel. Mr. Neisel is President and Chief Executive Officer of
Schwab Corp., a manufacturer and seller of office equipment.
Jeffrey A. Poxon. Mr. Poxon is the Senior Vice President, Investments
and Chief Investment Officer of The Lafayette Life Insurance Company.
Thomas L. Ryan. Mr. Ryan is a partner in the law firm of Stuart &
Branigin. He is also a board member of The Lafayette Life Insurance Company and
legal counsel for Purdue University.
John W. Corey. Mr. Corey is President, Chief Executive Officer and
Director of the Company and the Bank. He has held his position with the Company
since its formation in 1994 and with the Bank since 1991.
James A. Andrew. Mr. Andrew is President and owner of Henry Poor Lumber
Co. and Homeworks, retailers of building materials. He is also involved in
residential and commercial land development.
Philip W. Kemmer. Mr. Kemmer became the business administrator of the
First Assembly of God Church in July, 1995. From 1991 to 1995, he was a broker
with The Prudential Key Realty, real estate brokerage firm.
4
<PAGE>
John C. Shen. Mr. Shen is the developer and sole owner of Crestview
Apartments and Crestview North Apartments, six different complexes of apartment
buildings. He is also a director of Turner Construction Co., an industrial and
institutional construction company.
Meetings and Committees of the Board of Directors
Meetings and Committees of the Company. The Board of Directors met
eight times during the year ended December 31, 1997. During 1997, no incumbent
director of the Company attended fewer than 75% of the aggregate of the total
number of Board meetings and the total number of meetings held by the committees
of the Board. The Company's Directors are not paid a fee for their services.
The Board of Directors of the Company currently has no standing
committees.
Meetings and Committees of the Bank. The Bank's Board of Directors
meets at least monthly and held 12 meetings during the year ended December 31,
1997. During 1997, no incumbent director of the Bank attended fewer than 75% of
the aggregate of the total number of Board meetings and the total number of
meetings held by the committees of the Board of Directors on which he served.
The principal standing committees of the Bank are Loan, Audit,
Investment and Compensation. The full Board acts as the nominating committee for
directors to be voted on by stockholders.
The Loan Committee is responsible for the review of all owner-occupied
residential loans in excess of $200,000, and all non-owner occupied residential
loans and business loans of $350,000 or more. All board members serve a four
month rotation on this committee. The committee held 50 meetings during 1997.
The Audit Committee meets with the independent auditors and the Bank's
internal auditors to review control procedures of the Bank. The current members
of this committee are Directors Ryan (Chairman), Neudeck and Shook.
This Committee held six meetings during 1997.
The Investment Committee meets with the Bank's investment advisor to
set guidelines for the investment portfolio and review the Bank's
asset/liability management. The members of this committee are Directors Poxon
(Chairman), Andrew, Kemmer and Shen. The Investment Committee met twice during
1997.
The Compensation Committee makes recommendations to the Board of
Directors for salary, staff, budget and various employee benefits. The members
of the committee are Directors Andrew (Chairman), Neudeck, Neisel and Poxon. The
committee met once during 1997.
Director Compensation
Non-employee directors of the Bank receive $9,000 per year except the
Chairman of the Board, who receives $11,000 per year. Each non-employee director
also receives $50 for each loan committee meeting attended.
Executive Compensation
The Company has not paid any compensation to its executive officers
since its formation. The Company does not presently anticipate paying any
compensation to such persons until it becomes actively involved in the operation
or acquisition of businesses other than the Bank.
The executive officers of the Company also hold the same positions with
the Bank and receive compensation from the Bank. The following table sets forth
information concerning the compensation paid or granted to the Bank's chief
executive officer in 1997, 1996 and 1995. No other executive officer received
cash compensation in excess of $100,000 during these periods.
5
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------------
Long Term Compensation
- -----------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards
- -----------------------------------------------------------------------------------------------------------------------
Securities
Restricted Underlying
Stock Options/ All Other
Salary Bonus Award(s) SARs Compensation
Name and Principal Position Year ($) ($) ($) (#) ($)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John W. Corey, President, 1997 $123,150 --- $ --- --- $41,013(5)
Chief Executive Officer and 1996 118,000 --- --- --- 15,333(4)
Director 1995 113,000 --- 118,711(1) 16,215(2) 29,714(3)
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------
(1) Represents the dollar value of the 8,107 shares based on the $14.643
closing price per share of the Common Stock on August 22, 1995 (the
date of grant) (reflecting a 5% stock dividend on June 30, 1997).
The shares of restricted stock vest in five equal annual installments,
provided the individual maintains "Continuous Service" (as defined in
the Recognition and Retention Plan) with the Company or the Bank. The
first installment vested on August 22, 1996. The second installment
vested on August 22, 1997. Any dividends paid on Common Stock granted
pursuant to the RRP are held in a restricted interest-bearing account
until such shares are no longer subject to restriction. Based on the
$28.50 closing price per share of the Common Stock on December 31, 1997
the 8,107 (reflecting a 5% stock dividend on June 30, 1997) restricted
shares held by Mr. Corey, had an aggregate market value of $231,049.50.
(2) Represents an option to purchase shares of Common Stock awarded under
the Company's 1995 Stock Option Plan at an exercise price of 14.643 per
share, the "Market Value (as defined in the Stock Option Plan) of the
Common Stock on the date of the grant. See the table captioned
"AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION
VALUES" for additional information on stock options.
(3) Represents the Bank's contribution on behalf of Mr. Corey of $23,074 to
the Bank's supplemental retirement benefit plan and of $6,640 to the
Bank's ESOP.
(4) Represents the Bank's contribution on behalf of Mr. Corey of $5,313 to
the Bank's supplemental retirement benefit plan and of $10,020 to the
Bank's ESOP.
(5) Represents the Bank's contribution on behalf of Mr. Corey of $26,385 to
the Bank's supplemental retirement benefit plan and of $14,628 to the
Bank's ESOP.
6
<PAGE>
The following table provides information as to stock options exercised
and the value of in-the-money options held by the Company's Chief Executive
Officer at December 31, 1997. To date, no stock appreciation rights have been
granted by the Company.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION VALUES
- -----------------------------------------------------------------------------------------------------------------------
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Value FY-End FY-End ($)(1)
on Exercise Realized ------------------------------------------------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John W. Corey --- --- 6,486 9,729 $89,877 $134,815
================================================================================================== ==================
</TABLE>
- ------------------
(1) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of in-the-money options granted based upon the
closing price per share of $28.50 for the Company's Common Stock as
reported on the Nasdaq Stock Market on December 31, 1997.
Special Termination Agreement
The Bank has entered into a special termination agreement with John W.
Corey. The agreement became effective upon completion of the Bank's mutual to
stock conversion and provides for an initial term of three years. The agreement
provides for extensions of one year, in addition to the then-remaining term
under the agreement, on each anniversary of the effective date of the agreement,
subject to a formal performance evaluation performed by disinterested members of
the Board of Directors of the Bank. The agreement provides for termination upon
the employee's death, for cause or in certain events specified by federal
regulations. The agreement is also terminable by the employee upon 90 days
notice to the Bank.
The agreement provides for payment to the employee of the greater of
his salary for the remainder of the term of the agreement, or 299% of the
employee's base compensation, in the event there is a "change in control" of the
Bank where employment terminates involuntarily in connection with such change in
control or voluntarily following any demotion, loss of title or office,
significant reduction in authority, significant reduction in annual compensation
or benefits, or relocation of his principal place of employment by more than 30
miles from its location immediately prior to the change in control. This
termination payment is subject to reduction by the amount of all other
compensation to the employee deemed for purposes of the Internal Revenue Code to
be contingent on a "change in control," and may not exceed three times the
employee's average annual compensation over the most recent five year period or
be non-deductible by the Bank for federal income tax purposes. For the purposes
of the agreement, a "change in control" is defined as any event which would: (i)
require reporting under the Securities Exchange Act of 1934, as amended; (ii)
result in a change of control within the meaning of the Home Owners' Loan Act;
or (iii) be deemed to have occurred at such time as (a) any person becomes the
beneficial owner of 20% or more of the Bank's or the Company's voting
securities, (b) individuals who constitute the board of directors on the date of
the agreement cease to constitute a majority, or (c) the adoption of a plan of
reorganization, merger, consolidation, or sale of all or substantially all the
assets of the Bank or the Company or similar transaction in which the Bank or
the Company is not the surviving entity.
7
<PAGE>
Based on his current salary, if Mr. Corey was terminated as of January
1, 1998 under circumstances entitling him to severance pay as described above,
he would have been entitled to receive a lump sum cash payment of approximately
$347,067.
Transactions with Management and Indebtedness of Management
The Bank has followed a policy of granting loans to officers and
directors. Loans to executive officers and directors must be approved by a
majority of the disinterested directors and loans to other officers must be
approved by the Bank's loan committee. All loans to executive officers and
directors were made in the ordinary course of business and on the same terms and
conditions as those of comparable transactions prevailing at the time, in
accordance with the Bank's underwriting guidelines, and do not involve more than
the normal risk of collectibility or present other unfavorable features.
Thomas L. Ryan, a director of the Bank, is a partner in the law firm of
Stuart & Branigin. Such firm acts as counsel to the Bank. The legal fees
received for professional services during the fiscal year ended December 31,
1997 did not exceed 5% of the firm's gross revenues.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
a registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
10% shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10 percent beneficial owners were complied
with during the fiscal year ended December 31, 1997.
PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has renewed the Company's arrangement for Crowe,
Chizek and Company LLP to be its auditors for the year ending December 31, 1998,
subject to the ratification of the appointment by the Company's stockholders. A
representative from Crowe, Chizek and Company LLP is expected to attend the
Meeting to respond to appropriate questions and will have an opportunity to make
a statement if he or she so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP AS THE
COMPANY'S AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1998.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in next year's proxy materials
for the Annual Meeting of Stockholders, any stockholder proposal to take action
at such meeting must be received at the Company's main office located at 101
Main Street, Lafayette, Indiana 47901, no later than November 19, 1998. Any such
proposal shall be subject to the requirements of the proxy rules adopted under
the Exchange Act.
8
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of common stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
9
<PAGE>
REVOCABLE PROXY
LSB FINANCIAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
April 15, 1998
The undersigned hereby appoints the Board of Directors of LSB Financial
Corp., and the survivor of them, with full powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of Common Stock of
LSB Financial Corp. which the undersigned is entitled to vote at the Annual
Meeting of Stockholders, to be held on April 15, 1998, at 9:00 a.m., Lafayette,
Indiana time, and at any and all adjournments thereof, as follows:
1. The election as directors for a three year term of all nominees
listed below:
FOR VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee,
strike a line in that nominee's name in the list
below.
MARIELLEN M. NEUDECK C. WESLEY SHOOK
HARRY A. DUNWOODY
2. Ratification of the appointment of Crowe, Chizek and Company
LLP as auditors for the year ending December 31, 1998.
FOR AGAINST ABSTAIN
In their discretion, upon such other matters as may properly come
before the Meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED
PROPOSITIONS.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy may be revoked at any time before it is voted. The
undersigned may revoke this proxy by: (i) duly executing and delivering to the
Secretary of the Company a later proxy relating to the same shares prior to the
exercise of such proxy, (ii) filing with the Secretary of the Company at or
before the Meeting a written notice of revocation bearing a later date than the
proxy, or (iii) attending the Meeting and voting in person (although attendance
at the Meeting will not in and of itself constitute revocation of a proxy). Any
written notice revoking this proxy should be delivered to Mary Jo David,
Corporate Secretary, LSB Financial Corp., P. O. Box 1628, 101 Main Street
Lafayette, Indiana 47902-1628. Upon revocation of this proxy, the power of such
attorney's and proxies shall be deemed terminated and of no further force and
effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of Notice of the Annual Meeting, and a Proxy Statement
dated March 18, 1998.
Dated: ____________________, 1998
- ------------------------------ ------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------ ------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears above on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
-------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
-------------------------------------------------------------------------
