DEF 14A of Lcnb Corp
Filed Mar 18, 2024 · FY20230001074902-24-000063
PROPOSAL 1. ELECTION OF DIRECTORS
PROPOSAL 1. ELECTION OF DIRECTORS LCNB’s Code of Regulations (i.e. bylaws) provide that its business shall be managed by a Board of Directors of not less than five nor more than fifteen persons. LCNB’s Amended Articles of Incorporation divide such directors into three classes as nearly equal in number as possible and set their terms at three years. The Board of Directors currently has twelve members, with Class I having four members, Class II having four members, and Class III having four members. Assuming that at least a majority of the issued and outstanding Common Shares are present at the meeting so that a quorum exists, the nominees for Class I directors receiving the most votes will be elected as directors. The Board of Directors has nominated: Robert A. Bedinghaus Spencer S. Cropper Eric J. Meilstrup Stephen P. Wilson The nominees have been nominated to serve as Class I directors until the 2027 annual meeting of shareholders and until their respective successors are elected and qualified. Each of the nominees are incumbent directors whose present terms will expire at the 2024 annual meeting. Please see the narrative under the heading “Director and Nominee Qualifications” beginning on page 9 of this Proxy Statement for additional discussion of the qualifications of each director nominee and continuing director. It is intended that Common Shares represented by the accompanying form of proxy will be voted FOR the election of the nominees, unless contrary instructions are indicated as provided on the proxy card. If you do not wish your shares to be voted for particular nominees, please so indicate on the proxy card. If one or more of the nominees should at the time of the meeting be unavailable or unable to serve as a director, the shares represented by the proxies will be voted to elect the remaining nominees and any substitute nominee or nominees designated by the Board of Directors. The Board of Directors knows of no reason why any of the nominees will be unavailable or unable to serve. At this time, it is not known whether there will be cumulative voting for the election of directors at the meeting. If any shareholder properly demands cumulative voting for the election of directors at the meeting, your proxy will give the individuals named on the proxy full discretion and authority to vote cumulatively and in their sole discretion to allocate votes among any or all of the nominees, unless authority to vote for any or all of the nominees is withheld. The following table sets forth information concerning the nominees for the Class I directors of LCNB.
PROPOSAL 1. ELECTION OF DIRECTORS
| Name | Age | Principal Occupation | Positions Held with LCNB | Director of LCNB or Bank Since | Term To Expire | | Robert A. Bedinghaus | 64 | Former CEO of Cincinnati Federal | Director | 2023 | 2024 | | Spencer S. Cropper | 51 | Certified Public Accountant for The Ralph J. Stolle Company | Director, Chairman of the Board | 2006 | 2024 | | Eric J. Meilstrup | 56 | Banker, President and Chief Executive Officer | Director and President | 2018 | 2024 | | Stephen P. Wilson | 73 | Ohio State Senator, Former CEO of LCNB | Director | 1982 | 2024 |
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors unanimously recommends that shareholders vote FOR the election of each of the director nominees.
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth information concerning the directors, nominees for director and executive officers of LCNB. Included in the table is information regarding each person’s principal occupation or employment during the past five years.
DIRECTORS AND EXECUTIVE OFFICERS
| Name, Age | Principal Occupation | Positions Held with LCNB | Director of LCNB or Bank Since | Term to Expire | | Eric J. Meilstrup, 56 | Banker, President and Chief Executive Officer of LCNB | Director and President | 2018 | 2024 | | Spencer S. Cropper, 51 | Certified Public Accountant for Stolle Properties, Inc. | Director, Chairman of the Board | 2006 | 2024 | | Steve P. Foster, 71 | Former President and CEO of LCNB | Director | 2005 | 2025 | | Mary E. Bradford, 68 | Former IT Executive, GE Aviation | Director | 2018 | 2026 | | Stephen P. Wilson, 73 | Ohio State Senator, Former CEO of LCNB | Director | 1982 | 2024 | | William (“Rhett”) G. Huddle, 68 | Former President and CEO of Columbus First Bank | Director | 2018 | 2026 | | Craig M. Johnson, 68 | Certified Public Accountant | Director | 2019 | 2026 | | Michael J. Johrendt, 70 | Attorney at Law, Johrendt & Holford | Director | 2018 | 2025 | | William H. Kaufman, 80 | Attorney at Law, Kaufman & Florence | Director | 1982 | 2026 | | Anne E. Krehbiel, 68 | Attorney at Law, Krehbiel Law Office | Director, Secretary | 2010 | 2025 | | Robert A. Bedinghaus, 64 | Former CEO of Cincinnati Federal | Director | 2023 | 2024 | | Takeitha W. Lawson, 44 | Former Director of Operations, altafiber | Director | 2021 | 2025 | | Robert C. Haines II, 51 | Banker | Executive Vice President, Chief Financial Officer | N/A | N/A | | Matthew P. Layer, 61 | Banker | Executive Vice President, Chief Lending Officer | N/A | N/A | | Lawrence P. Mulligan, Jr., 55 | Banker | Executive Vice President, Chief Operating Officer | N/A | N/A |
DIRECTORS AND EXECUTIVE OFFICERS
| Michael R. Miller, 66 | Banker | Executive Vice President, Trust Officer | N/A | N/A | | Bradley A. Ruppert, 48 | Banker | Executive Vice President, Trust Officer, Chief Investment Officer | N/A | N/A |
Director and Nominee Qualifications
Director and Nominee Qualifications The Nominating & Corporate Governance Committee (“Nominating Committee”) of our Board of Directors considers candidates to fill new directorships created by expansion and vacancies that may occur and makes recommendations to the Board of Directors with respect to such candidates. There are currently no vacancies on the Board. The Board has not adopted a policy with respect to minimum qualifications for directors, rather the Nominating Committee evaluates each individual in the context of the board as a whole and with the objective of recommending a group of persons that can best implement our business plan, perpetuate our business and represent shareholder interests. The Nominating Committee, in making its nominations, considers all relevant qualifications of candidates for board membership, including, among other things, factors such as an individual’s business experience, industry knowledge and experience, financial background, breadth of knowledge about issues affecting the Company, public company experience, regulatory experience, diversity, current employment and other board memberships, and whether the candidate will be independent under the listing standards of the NASDAQ Stock Market (“NASDAQ”). In some cases, the Nominating Committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to time. In the case of incumbent directors whose terms of office are set to expire, the committee also reviews such director’s overall service to the Company during his or her term and any relationships and transactions that might impair such director’s independence. The following table provides certain information, as of the date of this proxy statement, concerning each of this year’s nominees for election as a Class I director of LCNB and each director candidate has been recommended by the Nominating Committee. Unless otherwise indicated, each individual has had the same principal occupation for more than five years. Each individual also serves as a director of the Bank.
Director and Nominee Qualifications
| Class I Directors |
Director and Nominee Qualifications
| Spencer S. Cropper Age: 51 Director Since: 2006 Term Expires: 2024 | Spencer S. Cropper’s career in accounting and investment provides a wealth of insight to his role as Chair of the LCNB Corp. Board. The Chairman of LCNB Corp. and LCNB National Bank since 2019, Mr. Cropper is employed by and on the Board of Directors of the Ralph J. Stolle Company. Mr. Cropper is a Certified Public Accountant, and a member of the Ohio Society of Certified Public Accountants and the AICPA. He serves on the Board of Directors and Board of Trustees for the Ralph J. Stolle Countryside YMCA and is a Trustee for both the Warren County Foundation and the Bethesda Foundation. Mr. Cropper serves on the Audit, Pension, Compensation, and the Nominating & Corporate Governance Committees. | | Eric J. Meilstrup Age: 56 Director Since: 2018 Term Expires: 2024 | Eric J. Meilstrup offers extensive bank management expertise and market-specific knowledge to his seat on the Board of LCNB Corp. The President and Chief Executive Officer of LCNB Corp. and LCNB National Bank, Mr. Meilstrup has been with the Bank for 35 years, the last 20 as a member of its Executive team. He has served in several roles over his LCNB career including oversight of Deposit Operations, Branch Operations, Human Resources, Training, and Customer Service functions. Mr. Meilstrup serves on the Countryside YMCA Board (past Chair) and is a Trustee for the same organization. He is a board member of the Warren County Foundation, the West Side Church of Christ, a member of the Warren County Career Center District Business Advisory Committee and a current and charter member of the Lebanon Optimist Club. Mr. Meilstrup is a member of the Pension Committee. | | Stephen P. Wilson Age: 73 Director Since: 1982 Term Expires: 2024 | As the former CEO and Chairman of LCNB National Bank, Stephen P. Wilson brings both banking industry expertise and institutional knowledge to the LCNB Corp. Board. Mr. Wilson joined the LCNB staff in 1975 and served as Chief Executive Officer of LCNB and the Bank from 1992 through 2015. He is a Past Chairman of the American Bankers Association and a former board member of the Federal Reserve Bank of Cleveland. Mr. Wilson has represented the Ohio 7th District in the Ohio State Senate since 2017. He is a board member and treasurer of AAA Club Alliance, a Trustee of the Ralph J. Stolle Countryside YMCA, a board member of the Warren County Foundation, and a member of the Area Progress Council. He is also former Vice Chair of Warren Co. Port Authority and a former trustee of Miami University. Mr. Wilson serves on the Trust and Pension Committees. |
Director and Nominee Qualifications
| Robert A. Bedinghaus Age: 64 Director Since: 2023 Term Expires: 2024 | Mr. Bedinghaus’ experience in the public and private sectors provides him with insight and understanding into the communities served by LCNB National Bank. Robert A. Bedinghaus served as Chairman and CEO of Cincinnati Federal and Cincinnati Bancorp prior to joining the Board of LCNB as a result of the merger between Cincinnati Bancorp and LCNB National Bank in November of 2023. Mr. Bedinghaus is a former Hamilton County Commissioner (1996-2001) and Director of Business Development, for the Cincinnati Bengals, (2004- 2019). Additionally, he currently serves as Secretary and member of the board of trustees for Activities Beyond the Classroom (ABC), a not-for-profit organization that focuses on providing extracurricular activities for students in the Cincinnati Public Schools. He has served as an advisory member of the Kenton County Airport Board, Vice President of the Hamilton County Township Association, and President of the Hamilton County Family and Children First Council. Mr. Bedinghaus serves on the Trust Committee. |
Director and Nominee Qualifications
The following table gives certain information, as of the date of this Proxy Statement, concerning the current Class II and Class III directors of LCNB who will continue to serve after the annual meeting. Unless otherwise indicated, each individual has had the same principal occupation for more than five years. Each individual also serves as a director of the Bank.
Director and Nominee Qualifications
| Class II Directors |
Director and Nominee Qualifications
| Steve P. Foster Age: 71 Director Since: 2005 Term Expires: 2025 | A diverse career within the banking industry provides Steve P. Foster with the ability to provide insight in a breadth of areas to the Board of LCNB Corp. Mr. Foster is the former Chief Executive Officer of both LCNB Corp. and LCNB National Bank, a position he held from 2015 until retirement in 2019. He joined LCNB National Bank in 1977 and served as internal auditor, branch manager, and loan officer. He founded the Information Technology Department and served as Chief Financial Officer and President. Mr. Foster is a former Chair of the Ohio Bankers League, one of the strongest financial trade associations in the country. He serves on the Trust Committee, the Pension Committee, and the Loan Committee. |
Director and Nominee Qualifications
| Anne E. Krehbiel Age: 68 Director Since: 2010 Term Expires: 2025 | Anne E. Kriehbiel’s distinguished career as an attorney and firm principal provides a valuable perspective on legal matters and business management to the Board of LCNB Corp. Earning a J.D. from the University of Cincinnati in 1980, Ms. Krehbiel worked at US Bank, and practiced law in several capacities, prior to founding Krehbiel Law Offices in 1998. She is certified by the Ohio State Bar Association as a Specialist in Estate Planning, Trust and Probate law. Ms. Krehbiel is involved in the Bank’s community through the Warren County Bar Association, the Lebanon Rotary Club, the Cincinnati Zoo and Botanical Garden and other volunteer and philanthropic activities. Her familiarity with the local and regional community provides valuable insights. Ms. Krehbiel is the Corporate Secretary for LCNB Corp., chairs the Compensation Committee, and serves on the Audit and Nominating & Corporate Governance Committees. | | Michael J. Johrendt Age: 70 Director Since: 2018 Term Expires: 2025 | Expertise in law and commercial real estate are among Michael J. Johrendt’s significant contributions to the LCNB Corp. Board. A graduate of The Ohio State University Moritz College of Law, Mr. Johrendt practices business and tax law as a principal in the law firm of Johrendt & Holford based in Columbus, Ohio. Mr. Johrendt previously owned and operated a commercial real estate company. Mr. Johrendt previously served as a Director of Columbus First Bank from August 2007 until its merger with and into LCNB National Bank in May 2018. Mr. Johrendt has also served as Vice-Chair of the Ohio Board of Tax Appeals. Mr. Johrendt chairs the Nominating & Corporate Governance Committee and serves on the Compensation Committee. | | Takeitha W. Lawson Age: 44 Director Since: 2021 Term Expires: 2025 | Takeitha (Kei) Lawson brings corporate finance and investor relations expertise to her role on the Board of LCNB Corp. Ms. Lawson has experience working in finance and operations for some of the nation’s most well-known companies, including DuPont, Lockheed Martin, and Lexmark. A former Director of Cincinnati Bell, she previously guided the Investor Relations strategy for the company. She holds a B.S. from Temple University and an MBA from Drexel University and has held Six Sigma Green Belt certifications. Extremely active in the Cincinnati community, Ms. Lawson is known for serving on non-profit boards in the treasury capacity, including Jack & Jill of America, Inc. (Cincinnati), Women Helping Women and Junior League of Cincinnati. Ms. Lawson serves the LCNB board through her participation on the Audit Committee, Compensation Committee, and the Nominating & Corporate Governance Committee. |
Director and Nominee Qualifications
| Class III Directors | | | William H. Kaufman Age: 80 Director Since: 1982 Term Expires: 2026 | In addition to his perspectives gained as a long-tenured board member of LCNB Corp., William H. Kaufman oversees operational legal matters and real estate closings for LCNB National Bank from his seat on the Board. Mr. Kaufman is former senior partner of Kaufman & Florence in Lebanon, Ohio, and is presently Of Counsel at the firm. A graduate of the Northern Kentucky University Salmon P. Chase College of Law, he began his career as an attorney with Young and Jones, a legacy firm to Kaufman & Florence. He has extensive litigation experience in insurance cases and commercial disputes. He is a former Mayor of the City of Lebanon and was elected to two terms as Judge of Lebanon Municipal Court. Mr. Kaufman is the Assistant Secretary for the Board. | | Mary E. Bradford Age: 68 Director Since: 2018 Term Expires: 2026 | Mary E. Bradford provides a unique contribution to the LCNB Corp Board through her expertise in information technology. She joined the Board in 2018 and is a retired IT executive who spent 31 years with GE Aviation. Ms. Bradford built her career implementing information technology solutions for the Finance, Engineering, Supply Chain, and Military & Commercial Sales teams at GE. In her role as the GE Aviation Systems Chief Information Officer Ms. Bradford was responsible for establishing the information security framework for Aviage, a joint venture with the Aviation Industry Corporation of China (AVIC), with operations in the U.S. and China. Mary co-led the GE Women’s Network Cincinnati Hub for a two-year term and represented GE on the Miami University Department of Information Systems & Analytics Advisory Board for many years. Ms. Bradford is a Phi Beta Kappa graduate of Miami University in Oxford, Ohio, and holds an MBA with a concentration in Information Systems from Xavier University in Cincinnati, Ohio. Ms. Bradford contributes her expertise to the Bank’s Technology Committee. Ms. Bradford is also a member of the Audit, Compensation and Nominating & Corporate Governance Committees. |
Director and Nominee Qualifications
| William (“Rhett”) G. Huddle Age: 68 Director Since: 2018 Term Expires: 2026 | William (“Rhett”) G. Huddle offers expertise in both legal and banking matters to LCNB Corp. as the result of a successful professional career. Joining the LCNB Corp. board upon the acquisition of Columbus First Bank Corp, Inc., Mr. Huddle was the lead in the formation of Columbus First. He served as Chairman and CEO of the bank from 2007 until June 2018. Mr. Huddle previously served in both executive and governing roles of several banks in the Columbus market. He was also an associate with BakerHostetler law firm for five years. Mr. Huddle is a graduate of Princeton University and The Ohio State University Moritz College of Law. Mr. Huddle is a member of the Trust and Loan Committees. | | Craig M. Johnson Age: 68 Director Since: 2019 Term Expires: 2026 | Craig M. Johnson provides financial counsel to the LCNB Corp. Board through his extensive experience in public accounting and banking. Mr. Johnson is a Certified Public Accountant with nearly 40 years’ experience in both public accounting and private industry. Mr. Johnson retired as Principal from the accounting firm of Clark Schaefer Hackett & Co. Prior, he served as Partner at J.D. Cloud & Co. LLP. He previously held a position at an international public accounting firm and was local market controller for a large regional bank. Mr. Johnson is a member of the Ohio Society of Certified Public Accountants and the AICPA. He serves the community as Treasurer and Board Member of the Clifton Cultural Arts Center and sits on the Finance Committee of Clifton United Methodist Church and the Audit Committee of Easter Seals TriState. Mr. Johnson is Chair of the Audit Committee of LCNB, and also sits on the Compensation and Nominating & Corporate Governance Committees. |
BOARD OF DIRECTORS MEETINGS, COMMITTEES, AND COMPENSATION
| Director Compensation | | | | | Name | Fees Earned or Paid in Cash ($)(1) | Equity Grant ($)(2) | Total ($) | | Eric J. Meilstrup | $0 | $0 | $0 | | Spencer S. Cropper | $46,500 | $10,000 | $56,500 | | Steve P. Foster | $38,500 | $10,000 | $48,500 | | Stephen P. Wilson | $36,000 | $10,000 | $46,000 | | Mary E. Bradford | $42,500 | $10,000 | $52,500 | | William (“Rhett”) G. Huddle | $38,500 | $10,000 | $48,500 | | Craig M. Johnson | $39,000 | $10,000 | $49,000 | | Michael J. Johrendt | $36,000 | $10,000 | $46,000 | | William H. Kaufman | $30,000 | $10,000 | $40,000 | | Robert A. Bedinghaus(3) | $5,000 | - | $5,000 | | Anne E. Krehbiel | $38,500 | $10,000 | $48,500 | | Takeitha W. Lawson | $36,500 | $10,000 | $46,500 |
Peer Group Banks – 2023 Director Compensation Study
Peer Group Banks – 2023 Director Compensation Study The peer group banks utilized in the 2023 director compensation review performed by BCG included the following banks. This represents an update to the peer group utilized in the 2022 executive total compensation reviews and historical compensation studies performed by BCG. The peer group was updated to reflect merger and acquisition activity and to include companies that most closely match LCNB Corp.:
Peer Group Banks – 2023 Director Compensation Study
| Peoples Financial Services Corp. (PA) | First Savings Financial Group, Inc. (IN) | | Civista Bancshares, Inc. (OH) | Finward Bancorp (IN) | | Farmers & Merchants Bancorp, Inc. (OH) | Norwood Financial Corp. (PA) | | Macatawa Bank Corporation (MI) | Isabella Bank Corporation (MI) | | ACNB Corporation (PA) | CF Bankshares Inc. (OH) | | Citizens & Northern Corporation (PA) | FNCB Bancorp, Inc. (PA) | | ChoiceOne Financial Services, Inc. (MI) | Middlefield Banc Corp. (OH) | | Fidelity D & D Bancorp, Inc. (PA) | SB Financial Group, Inc. (OH) | | Citizens Financial Services, Inc. (PA) | Codorus Valley Bancorp, Inc. (PA) |
Peer Group Banks – 2023 Director Compensation Study
For the 2023 review of director compensation against benchmarking data, the Committee reviewed the following summary by BCG: •Total Director Compensation for all Non-Employee Directors; •Total Director Compensation Per Average Director; and •Various other Director Compensation components such as retainers, equity grants, per meeting fees (both board and committee), and chair fees (both board and committee). BCG’s 2023 assessments of LCNB’s director compensation practices concluded that: •Based on LCNB’s compensation goals and current asset size, comparisons to the peer group/market 50th percentile were appropriate; •Total Director Compensation for all non-employee directors was slightly below peer median/50th percentile levels; •Total Compensation per Average Director was well below the peer median ; and •the primary reason for this below peer median level pay was relatively low equity grants for the LCNB directors compared to peer. The Committee reviewed the findings from the BCG director compensation study and recommended to the Board that an adjustment be made to the director compensation package in late 2023. As a result, the Board adopted the Committee’s proposed increase of the equity grant for each director from $10,000 in 2023 to $17,000 in 2024.
2023 Executive Compensation Highlights
2023 Executive Compensation Highlights Our executive compensation programs are designed to align the interests of our NEOs with those of our shareholders. Based on our performance, findings from the 2022 Executive Compensation Review (discussed later in the CD&A), and our commitment to linking pay and performance, the Committee made the following executive compensation decisions for fiscal year 2023. For more detail, please continue to read this CD&A: •Base Salaries: Base salaries were increased approximately 7.7% for each NEO, effective January 2023. •2023 Short-Term Incentives/Cash Bonuses: Based on our 2023 financial performance, the NEOs earned short-term incentives equal to 9.5% of base salary. In addition, based on their individual performance, all NEOs, with the exception of Mr. Meilstrup, received an additional incentive equal to 5% of base salary. The target payout amount was set at 8.0% of base salary with the maximum opportunity set at 25% of base salary based on return on average assets (“ROAA”) with the potential to earn an additional 5% of salary based on individual performance (total of 13% of salary at target performance and 30% of salary at maximum performance). •2023 Long-Term Incentives: Equity grants were issued at 13.0% of base salary for NEOs and 19.5% for the CEO. The target amount was set at 20.0% of base salary with the maximum opportunity set at 40.0% of base salary.
What Guides Our Compensation Programs
What Guides Our Compensation Programs The primary objectives of LCNB’s executive officer compensation programs are to: •Provide a direct link between executive officer compensation and the interests of LCNB and LCNB’s shareholders by making a portion of executive officer compensation dependent upon the financial performance of LCNB. •Support LCNB’s annual and long-term goals and objectives as determined by the Board by linking these goals to the incentive compensation programs for the executive officers. •Establish base salaries between the 25th and 75th percentiles of market for comparable positions within a peer group of companies in the banking industry. If an executive officer is meeting performance expectations, they’ll likely have a base salary level near market median. In addition, if an executive officer is experienced, high performing, performing significant additional duties, or brings a specific knowledge base to the organization, they may have a salary level near the 75th percentile of market. On the other hand, if an executive is new to a position or recently promoted they may have a salary level near the 25th percentile of the market. •Provide executive officers with incentive (cash and equity) compensation opportunities designed to pay total compensation levels that are somewhere between the 25th and 75th percentiles of the market depending on the performance of LCNB and the individual executive officer. •Provide long-term incentives/equity and deferred compensation plans and arrangements that encourage the retention of our proven team of executive officers. The total compensation package for our NEOs includes: (i) base salary, (ii) annual cash incentives, and (iii) equity grants (restricted stock) based on performance. Some NEOs are also provided with a non-qualified deferred compensation program that strongly supports retention and provides for benefits after retirement. The NEOs also receive other employee benefits generally available to all employees. The NEOs of the Bank are employed “at will” without severance agreements or employment contracts. Currently, the Company believes that its compensation levels and structure, as well as the Company’s culture and intangibles alleviate the need for the Company to utilize employment agreements with its NEOs. Beginning in 2020, the Committee decided to propose a say-on-pay vote. The Board of Directors proposed to amend the say-on-pay and frequency vote every year and recommended shareholder approval in 2022. Based on that recommendation, the shareholders voted to conduct a say-on-pay vote annually as a part of the 2022 annual meeting. Therefore, the next advisory shareholder vote on the compensation of LCNB’s NEOs will occur at the 2024 annual meeting. The Committee and the Company’s Board of Directors believe that the Company’s executive compensation has been appropriately tailored to its business strategies, aligns pay with performance, and reflects best practices regarding executive compensation. The Committee will continue to consider shareholder sentiments about the Company’s core principles and objectives when determining executive compensation.
Engagement of Independent Compensation Consultant
Engagement of Independent Compensation Consultant The Compensation Committee has the sole authority to engage the services of any compensation consultant or advisor. Since 2013, the Committee has periodically engaged the services of BCG, an independent compensation consulting company focused on the banking industry. BCG was hired directly by the Compensation Committee and does not provide any other services to LCNB beyond independent compensation consulting services. The Committee considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Securities Exchange Act of 1934 in determining that BCG’s work does not raise a conflict of interest. BCG reports directly to the Committee, and management has not retained its own consultant. BCG periodically attends meetings of the Committee, physically or by phone, and with or without management present. BCG assists the Committee in, among other things, analyzing current compensation conditions in the marketplace generally and among our peers specifically, and assessing the competitiveness and appropriateness of compensation levels for our NEOs and Directors. For the Committee’s use in 2023, BCG produced a comprehensive review of Board compensation. The 2023 review evaluated LCNB’s Board compensation in comparison to a custom peer group, as well as against regional and national banking surveys and BCG database information. In 2022, the Committee engaged BCG to conduct an updated executive compensation review that was used to assist with comparisons to market of LCNB’s 2022 executive compensation levels as well as provide compensation data to assist with 2023 compensation related decisions. Some general “aging” principles and updated discussions with BCG were utilized to provide more comparative relevant information for 2023. It is the intent of the Committee to continue to alternate the Executive and Board compensation review on an every other year basis going forward.
Annual Cash Incentives
Annual Cash Incentives On January 17, 2023, the Committee recommended to the Board of Directors new performance measures under the annual cash incentive program. The program is designed to reward NEOs for meeting certain goals set annually by the Committee. The NEOs may earn a target payout amount of 8.0% of base salary with the maximum opportunity set at 25% of base salary based on ROAA. In addition, the NEOs have the potential to earn an additional 5% of salary based on individual performance (total of 13% of salary at target performance and 30% of salary at maximum performance). All annual cash incentives are subject to the Company’s Clawback Policy, as it may be amended from time to time, and is described in further detail under the heading “Clawback Policy.” The individual performance goals are tied to each NEO’s strategic planning goals as defined in the LCNB Strategic Plan. The individual performance measures are unique to each NEO and consist of quantitative and qualitative measures. The individual objectives were designed to complement LCNB’s corporate goals and strategic plan for 2023, particularly the Board’s goals related to overall growth of LCNB. These individual objectives, which are described below, are designed to grow core earnings while managing risk, which will, in turn, promote the long-term interests of LCNB’s shareholders. The Committee believes that these goals properly incentivized the NEOs to implement and attain the long-term strategic objectives of LCNB, including overall growth and high performance of key metrics. The Committee establishes goals for the CEO and delegates establishing goals for the remainder of the NEOs to the CEO. Individual performance goals were established for each NEO by the CEO, the nature of which differed depending upon the NEO’s job responsibilities. The individual performance goals included: (i)for Mr. Meilstrup, setting, refining and executing the strategic direction of LCNB; hiring and developing the senior management team and building a client-focused culture; and promoting LCNB externally to shareholders, stock analysts and potential acquisition targets; (ii)for Mr. Haines, developing robust financial reporting, branch profitability, line of business profitability and pricing model accuracy; executing LCNB’s strategic plan, balancing acquisitions and organic growth; and strengthening communications among executive management, directors and investors regarding financial performance and future risks and opportunities of LCNB; (iii)for Mr. Layer, managing the growth of the Bank’s loan portfolio to attain or exceed the budgeted goal while continuing to communicate those goals to the lending officers; participating as a member of the Bank’s loan committee with a goal of helping to monitor asset quality and compliance with the current bank regulations; participating as a member of the Bank’s senior management team; executing LCNB’s strategic plan and promoting the Bank in the communities that the Bank serves; (iv)for Mr. Miller, managing the growth of the Bank’s Wealth Management area and communicate and assist the trust officers with attaining or exceeding the budgeted goal; participating as a member of the Bank’s trust committee with a goal of helping to monitor compliance with the current bank regulations; participating as a member of the Bank’s senior management team; executing LCNB’s strategic plan; and promoting the Bank in the communities that the Bank serves; and (v)for Mr. Ruppert, supervise and maximize the return on the security portfolios of the holding company, the Bank, and the trust department; participate as a member of the Bank’s trust committee with a goal of helping to monitor compliance with the current bank regulations; encourage and supervise the Bank’s brokerage operation; support shareholder relations by acting as one of LCNB’s primary contacts with LCNB’s transfer agent; participate as a member of the Bank’s senior management team; executing LCNB’s strategic plan and promoting the Bank in the communities that the Bank serves.
Equity Incentives
Equity Incentives At the 2015 annual meeting of shareholders, the Company’s shareholders voted to approve the 2015 Ownership Incentive Plan (the “2015 Plan”). The 2015 Plan replaced the previous equity plan that expired in 2012. The 2015 Plan is a result of significant discussions, market analysis, and cost modeling. All awards granted under the 2015 Plan are subject to the Company’s “Clawback Policy” as it may be amended from time to time. During fiscal year 2023, 22,945 equity awards were granted to NEOs under the 2015 Plan based on the achievement of the 2023 performance metrics. In 2022, the Committee recommended to the Board of Directors the implementation of specific performance measures with respect to future equity grants under the 2015 Plan. In 2023, the Board of Directors used the following metrics to determine the equity grants for the NEOs; earnings per share, efficiency ratio, return on average assets, and total asset under management growth, which were based on the Board approved budget. The Committee established a range of awards based on the achievement of the goals. The awards are calculated using a percentage that is applied to each executive officer’s salary to arrive at a calculated number of shares. That percentage ranges from 3% of salary to a maximum of 40% of salary for most NEOs. This plan is based on the performance measures achieved in 2023. The dollar amounts that are earned are converted to a specific number of shares based on the value of the shares on the date of grant. The shares will be granted from the 2015 Plan that was approved by LCNB’s shareholders. The Committee does not take material nonpublic information into account when determining the timing and terms of an option award.
Equity Grants Based on Achievement For 2023 Performance
Equity Grants Based on Achievement For 2023 Performance For 2023, LCNB earned $1.10 per share, had a 75.7% efficiency ratio, a 0.63% ROAA, and assets under management growth of 25.48%. This translated into an equity award of 13% of base compensation for each NEO and 19.5% for the CEO, which represented below target performance compared to the plan. The results were affected by transaction cost associated by merger of CNNB on November 1, 2023. Without the one-time cost, earnings per share would have been $1.56, with an efficiency ratio of 69.1%, and a ROAA of 0.95%.
Analysis of Total Mix of Compensation
Analysis of Total Mix of Compensation The Board of Directors feels that the combination of making annual cash incentive/bonus payments based upon specific goals for each NEO and separate cash incentive/bonus payments tied to earnings goals for the Company provides the necessary incentives to reach the Company’s objectives. The cash incentive payments and the base salary together can provide the NEOs with a compensation package that is competitive with peers. Additionally, the 2015 Plan provides the Company with the ability to better balance executive compensation between short-term components (base salary and annual cash incentives) and longer-term components (equity incentives) by providing the Committee with the ability to grant equity awards. In recent years, equity grants in the form of restricted shares have provided additional variable compensation that promotes retention and ties the NEOs interests to the shareholders of the Company. Another longer-term compensation program that is available to NEOs is the non-qualified deferred compensation benefit plan. We feel that our NEOs have valuable compensation components available at various levels that promote short-term, mid-term, and long-term achievement of goals and financially reward our NEOs for accomplishing the goals of the Company.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary($) | Restricted Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation($) | Non-Qualified Deferred Compensation Earnings($) | All Other Compensation ($) | Total ($) | | Eric J. Meilstrup President and Chief Executive Officer | 2023 2022 2021 | 431,000 395,000 340,000 | 154,050 102,000 94,500 | N/A N/A N/A | 52,275 42,500 40,950 | 156,800(2) 4,893 97,736 | 38,807(3) 44,754(3) 74,218 | 832,931 589,147 647,404 | | Robert C. Haines II Executive Vice President and Chief Financial Officer | 2023 2022 2021 | 268,000 250,000 228,000 | 65,000 45,600 42,800 | N/A N/A N/A | 33,200 28,500 27,430 | 78,167(2) 1,970 50,209 | 31,753(3) 32,262 31,585 | 476,120 358,332 380,024 | | Mathew P. Layer Executive Vice President and Chief Lending Officer | 2023 2022 2021 | 268,000 250,000 228,000 | 65,000 45,600 42,800 | N/A N/A N/A | 33,200 28,500 27,430 | 261,165(2) 5,604 217,170 | 7,250(3) 7,615 9,235 | 634,615 337,319 524,635 | | Michael R. Miller Executive Vice President and Trust Officer | 2023 2022 2021 | 268,000 250,000 228,000 | 65,000 45,600 42,800 | N/A N/A N/A | 33,200 28,500 27,430 | 982(2) 1,569 3,262 | 17,481(3) 17,580 17,348 | 384,663 343,249 318,840 | | Bradley A. Ruppert Executive Vice President, Trust Officer, Chief Investment Officer | 2023 2022 2021 | 250,000 232,000 210,000 | 60,320 42,000 39,200 | N/A N/A N/A | 30,791 26,250 25,090 | 52,245(2) 1,089 39,372 | 27,502(3) 26,371 25,359 | 420,859 327,710 339,021 |
SUMMARY COMPENSATION TABLE
(1) See “Terms of Restricted Share Grants” below for a description of the terms of the grants of restricted shares shown in the Restricted Stock Awards column. The amounts in the Restricted Stock Awards column are the aggregate grant date fair values computed in accordance with FASB ASC Topic 718. Assumptions used in determining fair value are disclosed in the footnote “Stock-Based Compensation” located in LCNB’s Annual Report in Form 10-K for the year ended December 31, 2023. (2) Includes above market interest paid on the non-qualified deferred compensation plan as follows: Mr. Meilstrup, $2,897; Mr. Haines, $1,128; Mr. Layer, $3,055; Mr. Miller, $982; and Mr. Ruppert, $616. The above market interest rate is calculated by subtracting 120% of the federal long-term rate (5.96%) from the rate paid by the Bank on the deferred compensation funds (currently 8%). The resulting difference of 0.85% was used to calculate the above market interest disclosed in the above table. Also includes the change in aggregate increase/decrease in the actuarial present value of the officer’s accumulated benefit under the Bank’s defined benefit plan as follows: Mr. Meilstrup, $153,903; Mr. Haines, $77,039; Mr. Layer, $258,110; and Mr. Ruppert $51,629. (3) Includes health and long-term disability payments as follows: Mr. Meilstrup, $11,307; Mr. Haines, $10,179; Mr. Layer, $7,250; Mr. Miller $8,465; and Mr. Ruppert, $7,399. Includes auto allowance for Mr. Meilstrup of $2,551. Includes 401(k) contributions for Mr. Meilstrup of $24,949; Mr. Haines of $21,574; Mr. Miller of $9,016 and Mr. Ruppert, $20,104. Terms of Restricted Share Grants. All of the grants of restricted shares listed in the above table vest annually in five equal installments over a five-year period beginning on the first anniversary of the grant date, provided, however, that: (a) the respective grantee remains employed through the applicable vesting date, and (b) vesting will be accelerated upon the grantee’s death, incapacity or retirement (after attaining the age of 65). Upon a change of control of the Company as defined in the 2015 Plan, 100% of the restricted shares will vest if at any time during the three months prior to the effective date of any change of control to the first anniversary of such change of control: (a) the grantee’s employment is terminated without cause, or (b) the grantee terminates employment for good reason. The grantees are eligible to receive dividends and other distributions declared by the Company on the restricted shares.
Pay Ratio Disclosure
Pay Ratio Disclosure Eric J. Meilstrup, LCNB’s CEO, had an annual total compensation of $832,931 in 2023, as reflected in the Summary Compensation Table above. We estimate that the median annual compensation for all LCNB employees, excluding our CEO, was $41,863 for 2023. Taking this into account, we estimate that Mr. Meilstrup’s annual total compensation was approximately 19.9 times that of the median annual compensation for all employees.
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Equity Incentive Plan Awards | | | All other stock awards: Number of shares of stock or units | Grant Date Fair Value of Stock Awards | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | (#) | ($) | | Eric J. Meilstrup | 1/23/23 | | 56,030 | 129,300 | 932 | 6,215 | 12,430 | | | | | 1/23/23 | | | | | | | 8,635 | 154,050 | | Robert C. Haines II | 1/23/23 | | 34,840 | 80,400 | 580 | 3,864 | 7,729 | | | | | 1/23/23 | | | | | | | 3,643 | 65,000 | | Matthew P. Layer | 1/23/23 | | 34,840 | 80,400 | 580 | 3,864 | 7,729 | | | | | 1/23/23 | | | | | | | 3,643 | 65,000 | | Michael R. Miller | 1/23/23 | | 34,840 | 80,400 | 580 | 3,864 | 7,729 | | | | | 1/23/23 | | | | | | | 3,643 | 65,000 | | Bradley A. Ruppert | 1/23/23 | | 32,500 | 75,000 | 541 | 3,605 | 7,729 | | | | | 1/22/23 | | | | | | | 3,381 | 60,320 |
GRANTS OF PLAN-BASED AWARDS
(1) Although the Estimated Future Payouts are provided in the table, the awards were granted in 2023 and are disclosed in the “Summary Compensation Table.”
Outstanding Equity Awards
Outstanding Equity Awards The following table summarizes, as of the end of fiscal year 2023 for each of the NEOs, information concerning unexercised options and unvested stock and equity incentive plan awards.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) (1) | Market Value of Shares or Units of Stock that have not Vested ($) (7) | | Eric J. Meilstrup | N/A | N/A | N/A | N/A | 319(2) 1,920(3) 3,365(4) 4,239(5) 8,635(6) | $5,024 $30,285 $53,063 $66,852 $136,174 | | Robert C. Haines II | N/A | N/A | N/A | N/A | 319(2) 854(3) 1,524(4) 1,895(5) 3,643(6) | $5,024 $13,461 $24,033 $29,887 $57,450 | | Matthew P. Layer | N/A | N/A | N/A | N/A | 319(2) 854(3) 1,524(4) 1,895(5) 3,643(6) | $5,024 $13,461 $24,033 $29,887 $57,450 | | Michael R. Miller | N/A | N/A | N/A | N/A | 319(2) 854(3) 1,524(4) 1,895(5) 3,643(6) | $5,024 $13,461 $24,033 $29,887 $57,450 | | Bradley A. Ruppert | N/A | N/A | N/A | N/A | 253(2) 760(3) 1,396(4) 1,746(5) 3,381(6) | $3,990 $11,979 $22,009 $27,528 $53,318 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
(1) Represents the number of restricted share awards that have not vested as of December 31, 2023. (2) Represents restricted shares awarded by the Board of Directors on February 19, 2019 pursuant to the Plan. The restricted shares vest annually in five equal installments beginning on February 12, 2020. (3) Represents restricted shares awarded by the Board of Directors on February 18, 2020 pursuant to the Plan. The restricted shares vest annually in five equal installments beginning on February 18, 2021. (4) Represents restricted shares awarded by the Board of Directors on February 23, 2021 pursuant to the Plan. The restricted shares vest annually in five equal installments beginning on February 23, 2022. (5) Represents restricted shares awarded by the Board of Directors on February 22, 2022 pursuant to the Plan. The restricted shares vest annually in five equal installments beginning on February 22, 2023. (6) Represents restricted shares awarded by the Board of Directors on January 23, 2023 pursuant to the Plan. The restricted shares vest annually in five equal installments beginning on January 23, 2024 (7) Represents the value of the unvested restricted stock awards based on the Company’s closing stock price on December 31, 2023 of $15.77.
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table summarizes for fiscal year 2023 all exercises of options and vesting of stock awards for each of the NEOs.
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Eric J. Meilstrup | N/A | N/A | 3,766 | 59,396 | | Robert C. Haines II | N/A | N/A | 2,033 | 32,067 | | Matthew P. Layer | N/A | N/A | 2,033 | 32,067 | | Michael R. Miller | N/A | N/A | 2,033 | 32,067 | | Bradley A. Ruppert | N/A | N/A | 1,841 | 29,026 |
PENSION BENEFITS
PENSION BENEFITS
PENSION BENEFITS
| Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefits ($) | Payments During Last Fiscal Year ($) | | Eric J. Meilstrup | Defined Benefit Plan | 33 | 727,155 | None | | Robert C. Haines II | Defined Benefit Plan | 28 | 343,382 | None | | Matthew P. Layer | Defined Benefit Plan | 41 | 1,359,833 | None | | Michael R. Miller | N/A | N/A | N/A | None | | Bradley A. Ruppert | Defined Benefit Plan | 15 | 177,594 | None |
PENSION BENEFITS
The Defined Benefit Plan’s actuarial assumptions used in 2023 included a discount rate of 4.83%, an expected long-term rate of return for Plan assets of 4.83% and a future compensation rate increase of 3%. The expected long-term rate of return on Plan assets was determined using historic returns on investments, adjusted for expected long-term interest rates. The following table summarizes, as of the end of fiscal year 2023, for each of the NEOs, information concerning each defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified.
NON-QUALIFIED DEFERRED COMPENSATION
NON-QUALIFIED DEFERRED COMPENSATION
NON-QUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | | Eric J. Meilstrup | 52,276 | None | 28,248 | None | 370,273 | | Robert C. Haines II | 16,600 | None | 10,999 | None | 143,970 | | Matthew P. Layer | 28,218 | None | 29,754 | None | 388,957 | | Michael R. Miller | 22,773 | None | 9,579 | None | 125,840 | | Bradley A. Ruppert | 7,698 | None | 6,006 | None | 78,547 |
NON-QUALIFIED DEFERRED COMPENSATION
- (1) The NEOs contributions are also included in the Summary Compensation Table under Non-Equity Incentive Plan Compensation. (2) The portion of the Aggregate Earnings is also included in the Summary Compensation Table under Non-Qualified Deferred Compensation Earnings because the Bank is paying an above market rate on the aggregate balances that the NEOs have deferred. Those amounts for each NEO are: Mr. Meilstrup, $2,897; Mr. Haines, $1,128; Mr. Layer, $3,055; Mr. Miller, $982 and Mr. Ruppert, $616. The Bank has a benefit plan which permits NEOs to defer all or a portion of their cash bonus. The deferred compensation balance, which accrues interest at 8% annually, is distributable in cash after retirement or termination of employment either in one lump sum payment or ten equal payments over a period of ten years, in the discretion of the executive officer. Through the Compensation Committee, the LCNB Board of Directors determines the interest rate that will be used to calculate earnings under the plan.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO(1)(2) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs (4) | Average Compensation Actually Paid to Non-PEO NEOs(5) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (“TSR”) | Net Income (000’s) | | 2023 | $871,738 | $715,359 | $500,061 | $408,076 | $107.35 | $12,628 | | 2022 | $589,146 | $612,128 | $340,251 | $362,399 | $122.53 | $22,128 | | 2021 | $647,404 | $639,429 | $368,122 | $367,370 | $132.92 | $20,974 |
PAY VERSUS PERFORMANCE
(1) Executives included in the Non-PEO averages for 2021, 2022, and 2023 are; Mr. Haines, Mr. Layer, Mr. Miller, and Mr. Ruppert. Mr. Meilstrup is the PEO for all years. (2) Includes restricted stock awards with the value of $ 154,050 in 2023, $102,000 in 2022 and $94,500 in 2021. (3) Adjustments to determine compensation “actually paid” for the PEO included the following:
PAY VERSUS PERFORMANCE
| Adjustments to determine Compensation “Actually Paid” for PEO in US dollars | 2023 | 2022 | | Change in actuarial present value of the individual’s accumulated benefit under all defined benefit pension plans | 156,800 | 4,893 | | Value of equity awards (stock awards or options) granted in the year | 154,050 | 102,000 | | Value “actually received” as it relates to pension benefits | -- | -- | | Service cost (and prior service cost) | 28,000 | 36,000 | | Equity compensation | -- | -- | | Awards granted in fiscal year (valued at December 31 of the relevant year) | 136,174 | 95,382 | | Change of unvested awards (valued at December 31 of the relevant year) | (21,945) | (12,714) | | Change of shares vested during year (valued at the applicable vesting date) | (2,723) | 184 | | Dividends paid during year | 14,966 | 11,023 |
PAY VERSUS PERFORMANCE
(4) Includes restricted stock awards in 2023 as follows; Mr. Haines, $65,000; Mr. Layer, $65,000; Mr. Miller, $65,000; Mr. Ruppert, $60,320. In 2022 as follows; Mr. Haines, $45,600; Mr. Layer, $45,600; Mr. Miller, $45,600, and Mr. Ruppert, $42,000. In 2021 includes restricted stock awards as follows, Mr. Haines, $42,800; Mr. Layer, $42,800; Mr. Miller, $42,800, and Mr. Ruppert, $39,200. (5) Adjustments to determine compensation “actually paid” for the Non-PEO NEOs included the following:
PAY VERSUS PERFORMANCE
| Adjustments to determine Compensation “Actually Paid” for Non-PEO NEO in US dollars | 2023 | 2022 | | Change in actuarial present value of the individual's accumulated benefit under all defined benefit pension plans | 98,140 | 2,558 | | Value of equity awards (stock awards or options) granted in the year | 63,830 | 44,700 | | Value ”actually received” as it relates to pension benefits | -- | -- | | Service cost (and prior service cost) | 18,500 | 27,250 | | Equity compensation | -- | -- | | Awards granted in fiscal year (valued at December 31 of the relevant year) | 56,418 | 41,801 | | Change of unvested awards (valued at December 31 of the relevant year) | (9,991) | (6,341) | | Change of shares vested during year (valued at the applicable vesting date) | (1,468) | 57 | | Dividends paid during year | 6,527 | 5,238 |
Comparison of Compensation Actually Paid to TSR and Net Income
Comparison of Compensation Actually Paid to TSR and Net Income Compensation actually paid to the PEO increased by $103,231, or approximately 16.9%, in 2023. Average compensation actually paid to the remaining non-PEO NEOs increased year-over-year by $43,874, or approximately 12.1%, in 2023. TSR decreased from $122.53 in 2022 to $107.35 in 2023, or approximately 12.4%. At the same time, Net Income decreased from approximately $22,128,000 in 2022 to approximately $12,628,000 in 2023, or 42.9%. The results were affected by transaction cost associated by merger of CNNB on November 1, 2023. Without the one-time cost, net income would have been $17,834,000 in 2023, for a decrease of 19.4%. The Board of Directors has determined that the calculation of incentive compensation using metrics that in turn, support Net Income and TSR, creates necessary incentives to reach the Company’s objectives. TSR and Net Income are some indicators of LCNB’s overall performance that may impact the value of total compensation; however, other performance measures and factors are considered in setting NEO compensation. Please see the remainder of the Compensation Discussion and Analysis for additional information.