LNB Bancorp, shareholder group agree on board size, representation

By Lisa Kerner

Charlotte, N.C., April 24 - LNB Bancorp, Inc. shareholders Richard M. Osborne, Steven A. Calabrese and AMG Investments, LLC reached an agreement with the company on April 18 to settle the contested election of directors and related proposals at LNB's 2008 annual meeting slated for May 20, it was reported in a schedule 13D filing with the Securities and Exchange Commission.

Osborne and Calabrese agreed to withdraw the proposals submitted for consideration at the annual meeting by Shareholders for a Better Bank, a committee that includes Osborne and Calabrese.

The pair also agreed to dismiss all of their claims in the pending lawsuit against LNB and comply with certain standstill restrictions for an 18-month period, the filing stated.

For its part, LNB agreed to expand its board of directors to 15 members.

The company's board approved the addition of the shareholder committee's designees - Daniel G. Merkel, a former regional president of Republic Bancorp, Inc., and Thomas P. Perciak, the former chief executive officer of Emerald Financial Corp., the parent company of Strongsville Savings Bank - to the board on April 22.

All the parties agreed to reduce the size of LNB's board to 12 directors through normal retirement as required by LNB's corporate governance guidelines.

On March 28, LNB announced that its shareholders "soundly defeated" Shareholders for a Better Bank's six proposals at a special meeting called by the dissident shareholder on March 18.

On Feb. 22, AMG Investments said LNB's proxy statement filed on Feb. 5 "attempted to re-word, limit and bar AMG's proposals as written in its solicitation statement and preliminary proxy statement."

As a result, AMG filed its own notice of the special meeting including the proposals outlined in its solicitation and preliminary proxy statements, it was previously reported.

LNB is the holding company for the Lorain National Bank in Lorain, Ohio.

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