UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


SCHEDULE 14A INFORMATION


Proxy Statement Pursuant to Section 14(a) of the Securities and

Exchange Act of 1934 (Amendment No. )


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LCNB Corp.

CORP.

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LCNB CORP.

P.O. Box 59

Lebanon, Ohio 45036


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


DATE: APRIL 24, 2018

20, 2021


TIME: 10:00 a.m. EDT

ACCESS: The Annual Meeting of Shareholders can be accessed virtually at www.meetingcenter.io/234404521.

TO THE SHAREHOLDERS OF LCNB CORP.:


You are cordially invited to attend the annual meeting of the shareholders of LCNB Corp. to be held on April 24, 201820, 2021 at 10:00 a.m. EDT atEDT. The meeting will be held virtually via the Operations BuildingInternet for the safety of LCNB Corp. at 105 North Broadway, Lebanon, Ohio 45036,our directors, employees and shareholders in light of the ongoing COVID-19 pandemic. The meeting will be held for the purpose of considering and acting on the following:


1.

Electing Class I directors to serve until the 20212024 annual meeting.


2.

Adopting an advisory, non-binding “say-on-pay” resolution to approve the

compensation of our named executive officers.

3.Ratifying the appointment of BKD, LLP as the independent registered public
accounting firm for the Company.


3.

LCNB Corp.

4.Transacting such other business as may properly come before the meeting or any
adjournment thereof.


Shareholders of record at the close of business on March 1, 20182021 will be entitled to vote at the meeting.


By Order of the Board of Directors


/s/ Steve P. Foster                               

Steve P. Foster

Eric J. Meilstrup

Eric J. Meilstrup
President & Chief Executive Officer


March 9, 2018

11, 2021

IMPORTANT


A proxy statement and proxy are submitted herewith. As a shareholder, you are urged to complete and mail the proxy promptly whether or not you plan to attend this virtual annual meeting in person. Shareholders who attend the annual meeting by following the instructions to join the virtual meeting described on page 38 will be considered to be attending the annual meeting “in person.” Alternatively, refer to the instructions on the proxy card for details about transmitting your voting instructions electronically via the Internet or by telephone. The proxy is revocable at any time prior to the exercise thereof by written notice to the company, and shareholders who attend the annual meeting may withdraw their proxies and vote their shares personallyvia the Internet if they so desire.







PROXY STATEMENT


LCNB CORP.

P.O. Box 59

Lebanon, Ohio 45036


ANNUAL MEETING OF SHAREHOLDERS


April 24, 2018

20, 2021


INTRODUCTION


The enclosed proxy is solicited by the Board of Directors of LCNB Corp. (also referred to as “LCNB”“LCNB” or the “Company”“Company”), in connection with the annual meeting of shareholders to be held on April 24, 201820, 2021 at 10:00 a.m. EDT, at the Operations Building of LCNB located at 105 North Broadway, Lebanon, Ohio 45036,or at any adjournments thereof.

In light of the COVID-19 pandemic, for the safety of our directors, employees and shareholders, we have determined that the Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. If you plan to attend the virtual meeting, please see “Information about the 2021 Virtual Annual Meeting” on page 38. Shareholders will be able to attend, vote and submit questions (both before, and for a portion of, the meeting) from any location via the Internet.


The meeting has been called for the following purposes: (i) electing Class I directors to serve until the 20212024 annual meeting; (ii) adopting an advisory, non-binding “say-on-pay” resolution to approve the compensation of our named executive officers; (iii) ratifying the appointment of BKD, LLP as the independent registered public accounting firm for the Company; and (iii)(iv) transacting such other business as may properly come before the meeting or any adjournment thereof.


This Proxy Statement and the accompanying notice of meeting are being mailed to shareholders on or about March 12, 2018.

16, 2021.


REVOCATION OF PROXIES, DISCRETIONARY

AUTHORITY AND CUMULATIVE VOTING


LCNB Common Sharescommon shares can be voted at the annual meeting only if the shareholder is represented by proxy or is present in person at the virtual annual meeting. Shareholders who attend the annual meeting by following the instructions to join the virtual meeting described on page 38 will be considered to be attending the annual meeting “in person.” Shareholders 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: (i) written notice to the Secretary of LCNB (addressed to LCNB Corp., P.O. Box 59, Lebanon, Ohio 45036, Attention: Secretary); (ii) by the filing of a later dated proxy prior to a vote being taken on a particular proposal at the meeting; or (iii) in open meeting at any time before it is voted.


Proxies solicited by the Board of Directors of LCNB (the “Board”“Board”) will be voted in accordance with the directions given therein. Where no instructions are indicated, properly executed proxies will be voted (i) FOR the election of the nominees for Class I directors, (ii) FOR the adoption of an advisory, non-binding “say-on-pay” resolution to approve the compensation of our named executive officers and (ii)(iii) FOR the ratification of the appointment of BKD, LLP as the independent registered public accounting firm for the Company. The proxy confers discretionary authority on the persons named therein to vote with respect to (i) the election of any person as a director where the nominee is unavailable or unable to serve, (ii) matters incident to the conduct of the meeting and (iii) any other business that may
3

properly come before the meeting or any adjournments thereof. At this time, it is not known whether there will be cumulative voting for the election of directors at the meeting. If any shareholder 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.






PERSON MAKING THE SOLICITATION


The enclosed proxy is being solicited by LCNB, and the cost of soliciting proxies will be borne by LCNB. In addition to use of the mails,mail, proxies may be solicited personally or by telephone or facsimile by directors, officers and employees of LCNB who will receive no compensation in addition to their regular compensation.

VOTING SECURITIES


Each of the LCNB common shares (the “Common Shares”“Common Shares”) outstanding on March 1, 2018,2021, the record date of the meeting, is entitled to one vote on all matters coming before the meeting. As of March 1, 2018,2021, LCNB had 10,036,83712,817,256 Common Shares issued and outstanding. Only shareholders of record on the books of the Company on March 1, 20182021 will be entitled to vote at the meeting either in person or by proxy. The presence at the meeting of at least a majority of the shares,Common Shares, in person or by proxy, will be required to constitute a quorum at the meeting.

Virtual attendance at the annual meeting constitutes presence “in person” for purposes of quorum at the meeting.


Shareholders of LCNB have cumulative voting rights in connection with the election of directors if notice is given to the president, a vice-president or the secretary of LCNB, not less than 48 hours before the time fixed for holding the meeting, that any shareholder desires that the voting be cumulative. Cumulative voting rights enable a shareholder to cumulate his or her voting power to give one candidate as many votes as the number of directors to be elected multiplied by the number of Common Shares owned by that person, or to distribute his votes on the same principal among two or more candidates as the shareholder sees fit. If any shareholder 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.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


As of December 31, 2017, the wholly-owned subsidiary of LCNB, LCNB National Bank (the

“Bank”), beneficially owned 6.33% of LCNB’s Common Shares through the operations of the Bank’s Trust Department. Under Section 13(d) of the Securities Exchange Act of 1934 and the rules promulgated thereunder, a beneficial owner of a security is any person who, directly or indirectly, has or shares voting power or investment power over such security.


The table below further describes the beneficial ownership of Common Shares by the Bank and others.


Name and address

of Beneficial

Owner


Number of Common Shares

Beneficially Owned


Percentage of

Common Shares

LCNB National Bank


634,790(1)


6.33%

2 North Broadway

Lebanon, OH 45036










FMR, LLC

245 Summer Street

Boston, MA 02210


435,696(2)


4.35%

-













-

(1)

The Common Shares reflected in this table are held in trust, agency or custodial capacities by LCNB National Bank.  In its capacity, LCNB National Bank has sole or shared power to vote and/or dispose of the shares reflected in this table.

(2)

Information is based on a Schedule 13G filed by FMR, LLC (“FMR”) on February 13, 2018 reporting that it is deemed to be the beneficial owner of in excess of 5% of the outstanding Common Shares. FMR reported that it has sole voting power with respect to 47,528 of the indicated shares and sole dispositive power with respect to all 435,696 of the indicated shares, which includes shares beneficially owned by a wholly-owned subsidiary of FMR which acts as investment adviser to various investment companies.


The following table sets forth, as of December 31, 2017,2020 (except as otherwise noted), information concerning the beneficial ownership of Common Shares by the only persons known by LCNB to be the beneficial owners of more than 5% of LCNB’s Common Shares:


Name and address
of Beneficial
Owner		Number of Common Shares
Beneficially Owned		Percentage of
Common Shares
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
747,580 (1)
5.8%
-

(1)    Based on information contained in a Schedule 13G, dated January 29, 2021 and filed with the SEC
on January 29, 2021, on behalf of BlackRock, Inc., to report the beneficial ownership by its
subsidiaries (BlackRock Advisors, LLC; BlackRock Fund Advisors; BlackRock Institutional Trust
Company, National Association; BlackRock Financial Management, Inc.; and BlackRock
4

Investment Management, LLC) of LCNB’s Common Shares as of December 31, 2020. The
Schedule 13G reported that BlackRock, Inc., through its subsidiaries, had sole voting power as to
734,698 common shares and sole investment power as to 747,580 common shares.

The following table sets forth, as of December 31, 2020 (except as otherwise noted), the ownership of Common Shares by management of LCNB, including (i) the Common Shares beneficially owned by each director, nominee for director and named executive officerofficers of LCNB and (ii) the Common Shares beneficially owned by all executive officers directors and nominees for directordirectors as a group.

Name of Beneficial Owner

Number of Common Shares
Beneficially Owned(1)

Percent of
Common Shares
Outstanding
Eric J. Meilstrup
President, Chief Executive Officer and Director
11,2310.09%
Spencer S. Cropper(2)
Chairman of the Board

35,9800.28%
Steve P. Foster
Director
39,5650.31%
Stephen P. Wilson
Director
62,7930.49%
Mary E. Bradford
Director
2,0000.02%
William G. Huddle(3)
Director

175,2851.36%
Craig M. Johnson(4)
Director

5,0000.04%
Michael J. Johrendt
Director
150,0011.17%
William H. Kaufman(5)
Director

77,0600.60%
Anne E. Krehbiel
Director, Secretary
5,0000.04%
John H. Kochensparger III(6)
Director

147,8601.15%

5


Name, Position(s)

of Beneficial Owner

or Director



Number of Common Shares

Beneficially Owned(1)



Percent of

Common Shares

Outstanding





Stephen P. Wilson

Chairman of the Board



60,293


0.60%

 

Steve P. Foster

Chief Executive Officer, President and Director



33,489


0.35%

 

Spencer S. Cropper(2)

Director



35,980


0.36%

 

George L. Leasure(3)

Director, Assistant Secretary



34,590


0.35%

 

William H. Kaufman(4)

Director



73,220


0.73%

 

Anne Krehbiel

Director, Secretary


4,000


0.04%

 

John H. Kochensparger III

Director



147,860


1.48%

 

Valerie S. Krueckeberg

Director



200


(5)

 

Robert C. Haines II

Executive Vice President,

Chief Financial Officer



2,970


0.03%

 

Robert C. Haines II
Executive Vice President,
Chief Financial Officer		8,2380.06%
Matthew P. Layer(7)
Executive Vice President
15,0760.12%
Michael R. Miller
Executive Vice President,
Trust Officer		7,2580.06%
Bradley A. Ruppert
Executive Vice President,
Trust Officer, Chief Investment Officer		4,6950.04%
Lawrence Mulligan
Executive Vice President,
Chief Operating Officer		3,0140.02%
All directors and
officers as a group
(16 persons		75,0565.83%

-












-

Matthew P. Layer(6)

Executive Vice President


10,141


0.10%

 

Leroy F. McKay

Executive Vice President



8,325


0.08%

 

Eric J. Meilstrup

Executive Vice President



2,806


0.03%

 

Michael R. Miller

Executive Vice President



1,000


0.01%

 

All directors and

officers as a group

(13 persons)


414,874


4.14%

 




(1)

The Securities and Exchange Commission has defined “beneficial owner”“beneficial owner” of a security to include any person who has

or shares voting power or investment power with respect to any such security or who has the right to acquire beneficial
ownership of any such security within 60 days. The number of shares listed for each person includes shares held in the
name of spouses, minor children, certain relatives, trusts or estates whose share ownership under the beneficial
ownership rules of the Securities and Exchange Commission is to be aggregated with that of the director or officer
whose share ownership is shown.

(2)

Does not include 80,242105,126 shares held in a Family Limited Partnership in which Mr. Cropper owns 38.165%50% interest.

Includes 3,000 shares held by Mr. Cropper’sCropper’s spouse.

(3)

Includes 34,59019,930 shares held in trust.

by Mr. Huddle’s spouse.

(4)

    Includes 3,000 shares held by Mr. Johnson’s spouse.

(5)    Includes 33,200 shares held in trust, 16,800shares16,800shares held jointly with Mr. Kaufman’sKaufman’s spouse, and 6,20010,040 shares owned
by Mr. Kaufman’sKaufman’s spouse.

(5)

Represents less than 0.01%.

(6)

    Mr. Kochensparger will retire from the Board at this year’s annual meeting.

(7)    Includes 323 shares held by Mr. LayerLayer’s spouse.
’
s spouse.







ITEMS OF BUSINESS TO BE VOTED ON BY SHAREHOLDERS


PROPOSAL 1. ELECTION OF DIRECTORS


LCNB

’LCNB’s Code of Regulations (s Regulationsi.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’sLCNB’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 eighteleven members, with Class I having threefour members, Class II having three members, and Class III having twofour members.

However, upon the retirement of John H. Kochensparger III at this year’s annual meeting, the Class I directors will be reduced to three, thereby reducing the size of the Board of Directors to ten members.


6

Assuming that at least a majority of the issued and outstanding common sharesCommon Shares are present at the meeting so that a quorum exists, the nominees for Class I directors of LCNB receiving the most votes will be elected as directors.


The Board of Directors has nominated:


Spencer S. Cropper
Eric J. Meilstrup
Stephen P. Wilson

Spencer S. Cropper

John H. Kochensparger III


The nominees have been nominated to serve as Class I directors until the 20212024 annual meeting of shareholders and until their respective successors are elected and qualified. Mr. Wilson, Mr. Cropper and Mr. KochenspargerEach of the nominees are incumbent directors whose present terms will expire at the 20182021 annual meeting.

In accordance with the age limitation provision for directors in LCNB’s Code of Regulations, John H. Kochensparger III, the fourth incumbent Class I director whose term expires at the annual meeting, is ineligible for re-election to the position of director having attained the age of 76 years. In lieu of filling the vacancy created by Mr. Kochensparger’s retirement, the Board will reduce the number of Class I director seats from four to three.


Please see the narrative under the heading “Director“Director and Nominee Qualifications”Qualifications” beginning on page 911 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 votedFOR 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.

















7

The following table sets forth information concerning the nominees for theClasstheClass I directors of LCNB.


Name


Age


Principal

Occupation

Positions

Held

with LCNB

Director of

LCNB or

Bank Since

Term

To

Expire

Stephen P. Wilson

67

Ohio State Senator, Chairman of the Board

of LCNB

Director, Chairman

of the Board

1982

2021

Spencer S. Cropper

45

Certified Public Accountant for Stolle Properties, Inc.

Director

2006

2021


John H. Kochensparger III

73

Formerly President, CEO and Director of

First Capital Bancshares, Inc., and Citizens National Bank of Chillicothe


Director

2013

2021


Name

Age

Principal
Occupation
Positions
Held
with LCNB
Director of
LCNB or
Bank Since
Term
To
Expire
Spencer S. Cropper48Certified Public Accountant
for Stolle Properties, Inc.		Director, Chairman of the Board20062021
Eric J. Meilstrup53Banker, President and Chief Executive Officer of the BankDirector, President and Chief Executive Officer20182021
Stephen P. Wilson70Ohio State Senator, Former CEO of LCNBDirector19822021
The Board of Directors unanimously recommends that shareholders vote FOR the election of each of the director nominees.


PROPOSAL 2. ADVISORY VOTE ON EXECUTIVE COMPENSATION (“SAY-ON-PAY”)

We are asking our shareholders to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers (sometimes referred to as “NEOs”). This non-binding advisory vote, commonly referred to as “Say-on-Pay,” is not intended to address any specific item of compensation, but instead relates to the compensation of our “named executive officers” as disclosed in the Compensation Discussion and Analysis and the Summary Compensation Table and related narrative included in this proxy statement.

The Compensation Committee believes we have an effective compensation program that is designed to recruit and keep top quality executive leadership focused on attaining short-term and long-term corporate goals and increasing shareholder value. We believe that our executive compensation program is designed to reasonably and fairly recruit, motivate, retain and reward our executives for achieving our objectives and goals. Through equity grants, each of our executive officers is aligned with the long-term interests of shareholders in increasing the value of LCNB. Moreover, our performance-based compensation system links executive pay to LCNB’s short- and long-term performance.

As an advisory vote, the Say-on-Pay resolution is not binding. The approval or disapproval of this proposal by shareholders will not require the Board or the Compensation Committee to take any action regarding our executive compensation practices. The final decision on the compensation and benefits of our executive officers and on whether, and if so, how, to address any shareholder approval or disapproval remains with the Board and the Compensation Committee. However, the Board values the opinions of our shareholders as expressed through their votes and other communications. Accordingly, the Board and the Compensation Committee will review and consider the results of the “Say-on-Pay” vote, the opinions of our shareholders, and other relevant factors in making future decisions regarding our executive compensation program.

We encourage you to read the “Compensation Discussion and Analysis” and the related compensation tables and narrative that follow. These sections describe our executive compensation policies and practices and provide detailed information about the compensation of our named executive officers.
8


The Board of Directors recommends that shareholders voteFOR the electionapproval, on a non-binding advisory basis, of the nominees.

executive compensation paid by LCNB to its named executive officers and the following resolution:


“RESOLVED, that the compensation paid to LCNB’s named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, footnotes and narrative discussion, is hereby APPROVED.”

PROPOSAL 2.3. RATIFICATION OF THE APPOINTMENT OF BKD, LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY


The Audit Committee of the Board of Directors of the Company has selected BKD, LLP (“BKD”(“BKD”), 312 Walnut Street, Suite 3000, Cincinnati, Ohio, as the Company’sCompany’s independent registered public accounting firm to perform the audit of the Company’sCompany’s financial statements and internal controls over financial reporting for the fiscal year ending December 31, 2018.2021. BKD, LLP was the Company’sCompany’s independent registered public accounting firm for the fiscal year ended December 31, 20172020 and has served the Company in that role since 2014.


Representatives from BKD are expected to attend the 2018virtual annual meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate shareholder questions.


We are asking our shareholders to ratify the selection of BKD as the Company’sCompany’s independent registered public accounting firm. Although ratification of the appointment is not required by law, the Company’sCompany’s Regulations, or otherwise, the Board is submitting the selection of BKD to our shareholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interest of the Company and our shareholders.


It is intended that the common shares represented by the accompanying form of proxy will be votedFOR the resolution ratifying the appointment of BKD as the Company’sCompany’s independent registered public accounting firm, unless contrary instructions are indicated as provided on the proxy card. If you do not wish your shares to be voted for the resolution, please so indicate on the proxy card.




The Board of Directors recommends that shareholders vote FORthe following resolution:


“RESOLVED, that action by the Audit Committee appointingratification of BKD, LLP as the Company’sCompany’s independent registered public accounting firm to conduct the annual audit of the financial statements of the Company and its subsidiaries for the fiscal year ending December 31, 2018 is hereby ratified, confirmed and approved.2021.

”











9

DIRECTORS AND EXECUTIVE OFFICERS


Except for the beneficial ownership by the Bank of 6.33% of LCNB’s Common Shares previously discussed in this Proxy Statement, to LCNB’s knowledge, no director, officer or affiliate of LCNB is the owner of record or beneficially of more than 5% of LCNB’s Common Shares, or any associate of any such director, officer, affiliate of LCNB or security holder, is an adverse party to LCNB or any of its subsidiaries or has a material interest that is adverse to LCNB or any of its subsidiaries.


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’sperson’s principal occupation or employment during the past five years.


Name, Age


Principal Occupation


Positions Held

with LCNB

Director

of LCNB or

Bank Since

Term

to

Expire


Stephen P. Wilson,

67


Ohio Congressman, Chairman

of the Board of LCNB



Director, Chairman of the Board


1982


2018

Steve P. Foster,

65

Banker, President and CEO

of the Bank

Director, President and CEO

2005

2019


Spencer S. Cropper,

45


Certified Public Accountant

for Stolle Properties, Inc.


Director


2006


2018


William H. Kaufman,

74


Attorney at Law, Kaufman

& Florence


Director


1982


2020


John H. Kochensparger III

73


Former President, CEO and Director of First Capital Bancshares, Inc., and Citizens National Bank of Chillicothe



Director


2013


2018

Anne E. Krehbiel,

62

Attorney at Law, Krehbiel

Law Office

Director, Secretary

2010

2019


George L. Leasure,

83


Chairman and Director of

GMi Companies


Director, Assistant Secretary


1994


2020

-


Name, Age
Principal Occupation

Positions Held
with LCNB
Director
of LCNB or
Bank Since
Term
to
Expire
Eric J. Meilstrup,
53		Banker, President and Chief Executive OfficerDirector and President20182021
Spencer S. Cropper,
48		Certified Public Accountant
for Stolle Properties, Inc.		Director, Chairman of the Board
2006
2021
Steve P. Foster,
68		Former President and CEO of LCNBDirector20052022

Stephen P. Wilson,
70
Ohio State Senator, Former CEO of LCNB
Director
1982
2021
Mary E. Bradford, 65Former IT Executive, GE AviationDirector20182023
William (“Rhett”) G. Huddle, 65Former BankerDirector20182023
Craig M. Johnson, 65Certified Public AccountantDirector20192023
Michael J. Johrendt, 67Attorney at Law, Johrendt & HolfordDirector20182022
William H. Kaufman,
77		Attorney at Law, Kaufman
& Florence		Director19822023
Anne E. Krehbiel,
65		Attorney at Law, Krehbiel
Law Office		Director, Secretary20102022
John H. Kochensparger III(1)
76
Former BankerDirector
2013
2021
Robert C. Haines II,
48		BankerExecutive Vice
President, Chief
Financial Officer
N/AN/A

10


Name, Age
Principal Occupation

Positions Held
with LCNB
Director
of LCNB or
Bank Since
Term
to
Expire
Matthew P. Layer,
58		BankerExecutive Vice
President, Chief Lending Officer
N/AN/A
Lawrence P. Mulligan, Jr., 52BankerExecutive Vice President, Chief Operating OfficerN/AN/A
Michael R. Miller,
63		BankerExecutive Vice
President, Trust Officer
N/AN/A
Bradley A. Ruppert,
45		BankerExecutive Vice President, Trust Officer, Chief Investment OfficerN/AN/A

(1)Mr. Kochensparger will retire from the Board at this year’s annual meeting.








-


Name, Age


Principal Occupation


Positions Held

with LCNB

Director

of LCNB or

Bank Since

Term

to

Expire


Valerie S. Krueckeberg,

48



Certified Public Accountant


Director


2016


2019

Robert C. Haines II,

45

Banker

Executive Vice

President, Chief

Financial Officer


N/A

N/A

Matthew P. Layer,

55

Banker

Executive Vice

President


N/A

N/A

Eric J. Meilstrup,

50

Banker

Executive Vice

President, Cashier

N/A

N/A






Michael R. Miller,

60

Banker

Executive Vice

President, Trust Officer


N/A

N/A

Bradley A. Ruppert,

42

Banker

Executive Vice President, Chief Investment Officer

N/A

N/A






Director and Nominee Qualifications


The Nominating and 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 isare currently one Class III vacancyno vacancies on the Board of Directors. The Board intends to fill the Class III vacancy upon consummation of the acquisition of Columbus First Bancorp, Inc., while also increasing the size of the Board by one to accommodate an additional Class II director. Each such vacancy will be filled with a former Columbus First Bancorp, Inc. director.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 committee,Nominating and Governance Committee, in making its nominations, considers all relevant qualifications of candidates for board membership, including, among other things, factors such as an individual’sindividual’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”(“NASDAQ”). In some cases, the Nominating and Governance 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’sdirector’s overall service to the Company during his or her term and any relationships and transactions that might impair such directordirector’s independence.
’
s independence.




While the Company does not have a formal diversity policy for Board membership, the Board seeks directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’sBoard’s deliberations and decisions. The Nominating Committee considers, among other factors, diversity with respect to viewpoint, skills, experience and community involvement in its evaluation of candidates for Board membership. Such diversity considerations are discussed by the Nominating Committee in connection with the general qualifications of each potential nominee.


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The following table gives certain information, as of the date of this proxy statement, concerning each of this year’s nominees for election as a Class I Directors (Terms Expire in 2018)


Stephen P. Wilsonisdirector of LCNB. Unless otherwise indicated, each individual has had the Chairman of LCNB Corp. and LCNB National Bank. He joined the LCNB staff in 1975 and the LCNB Board of Directors in 1982. He previously served as Chief Executive Officer of LCNB and the Bank from 1992-2015. He is a Past Chairman of the American Bankers Association and a former board member of the Federal Reserve Bank of Cleveland.  Mr. Wilson serves on the Appraisal Committee, Trust Investment Committee, Bond Committee, Bank Building Committee, Loan Committee, and the Pension Committee.


In 2017, Mr. Wilson accepted an appointment to fulfill an unexpired term in the Ohio State Senate and now represents the Ohio 7th District as an Ohio Senator.  He is a board member and treasurer of AAA Cincinnati, Chairman of the Board of Harmon Civic Trust, Vice Chair of Warren Co. Port Authority, a trustee of Miami University, a trustee of the Ralph J. Stolle Countryside YMCA, Board member of the Warren County Foundation, and a member of the Area Progress Council. He is an active member of the Otterbein United Methodist Church.


Through his extensive tenure on the Board and as a former executive with the Company, Mr. Wilson has developed unique insights into the business activities of the Company and its subsidiary and provides the Board with information as to the operations of each, identifying near and long-term challenges and opportunitiessame principal occupation for the Company.


Spencer S. Cropperis employed by Stolle Properties, Inc., a subsidiary of the Ralph J. Stolle Company, and currently serves on the company’s Board of Directors.  He joined the LCNB Board of Directors in 2006.  Mr. Cropper serves on the Audit Committee, the Bond Committee, the Pension Committee, the Loan Committee, and the Nominating and Compensation Committee.  


Mr. Cropper is a Certified Public Accountant, a member of the Ohio Society of Certified Public Accountants and a member of the American Institute of Certified Public Accountants.  He is an investor in and serves on the Board of Advisors of a Private Equity Limited Partnership who primarily focuses on providing mezzanine financing.  He services on the Board of Directors for the Ralph J. Stolle Countryside YMCA, as well as the Boards of Trustees for the Ralph J. Stolle Countryside YMCA, the Warren County Foundation, and the Bethesda Foundation, Inc.


Mr. Cropper brings to the Board relevant experience in accounting and financial matters.


John H. Kochensparger IIIpreviously servedas a member of the board of directors of First Capital Bancshares Inc. and Citizens National Bank of Chillicothe, Ohio for 22 years, and served as Chairman of the board for 10more than five years. Mr. Kochensparger was self-employed as an independent manufacturer’s representative for companies relating to the golf industry.  HeEach individual also serves as Vice Presidenta director of the National Golf Salesmen Association.  He brings 27Bank.


Class I Directors
Spencer S. Cropper
Age: 48
Director Since: 2006
Term Expires: 2021

Spencer S. Cropper is the Chairman of LCNB Corp. and LCNB National Bank. He joined the Board in 2006 and was named Chairman in 2019. He is employed by Stolle Properties, Inc., a subsidiary of the Ralph J. Stolle Company, and currently serves on the company’s Board of Directors.
Mr. Cropper is a Certified Public Accountant, a member of the Ohio Society of Certified Public Accountants and a member of the American Institute of Certified Public Accountants. He is an investor in and serves on the Board of Advisors of a Private Equity Fund who primarily focuses on providing mezzanine financing. He serves on the Board of Directors for the Ralph J. Stolle Countryside YMCA, as well as the Boards of Trustees for the Ralph J. Stolle Countryside YMCA, the Warren County Foundation, and the Bethesda Foundation, Inc.
Mr. Cropper brings to the Board relevant experience in accounting and financial matters. He serves on the Audit Committee, the Pension Committee, Compensation Committee, and the Nominating and Governance Committee.
Eric J. Meilstrup
Age: 53
Director Since: 2018
Term Expires: 2021
Eric J. Meilstrup is the President and Chief Executive Officer of LCNB Corp. and LCNB National Bank. He joined the Board in 2018 and serves on the Pension Committee.
Mr. Meilstrup has been with LCNB National Bank for 32 years, the last 17 as Executive Vice President and a member of its Executive team. He has served in a number of roles over his career including: Oversight of Deposit Operations, Branch Operations, Human Resources, Training and a number of Customer Service-related departments.
He has also served on a number of boards, committees and groups in a variety of capacities throughout his career outside the Bank. He is currently on the Countryside YMCA Board and has been a Board member there for several years including two years as Board Chair. He also serves as a trustee of the Ralph J. Stolle YMCA. He is a former board member of 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.
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Stephen P. Wilson
Age:         70
Director Since:     1982
Term Expires:     2021


Stephen P. Wilson is a former Chairman of LCNB Corp. and LCNB National Bank. He joined the LCNB staff in 1975 and the Board of Directors in 1982. He previously served as Chief Executive Officer of LCNB and the Bank from 1992-2015. 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 Cincinnati, Chairman of the Board of Harmon Civic Trust, a trustee of the Ralph J. Stolle Countryside YMCA, 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. He and his wife Jill are active members of the Otterbein United Methodist Church.
Through his extensive tenure on the Board and as a former executive with the Company, Mr. Wilson has developed unique insights into the business activities of LCNB and provides the Board with information as to the operations of each, identifying near and long-term challenges and opportunities for the Company. Mr. Wilson serves on the Trust Committee and the Pension Committee.

The following table gives certain information, as of banking and management




experience to the Board.  Mr. Kochensparger serves ondate of this Proxy Statement, concerning the Compensation Committee, the Nominating Committee, the Trust Committee and the Building Committee.   


current Class II Directors (Terms Expire in 2019)


Steve P. Fosteris President and Chief Executive Officer of both LCNB Corp. and LCNB National Bank.  He joined the LCNB staff in 1977 and has served as internal auditor, branch manager, and loan officer. He started the Information Technology Department and, more recently, served as Chief Financial Officer. He was elected to the LCNB Board of Directors in 2005 and serves on the Trust Investment Committee, the Building Committee, the Bond Committee, the Pension Committee, and the Loan Committee. On December 28, 2015, he was appointed as Chief Executive OfficerClass III directors of LCNB andwho will continue to serve after the Bank.


Through his long management tenure withannual meeting. Unless otherwise indicated, each individual has had the Company and the Bank, Mr. Foster provides the Board with information gained from direct managementsame principal occupation for more than five years. Each individual also serves as a director of the operations of the Company and the Bank. Further, in his leadership positions in financial areas, he has developed business knowledge and understanding across our operations.


Anne E. Krehbieljoined the Board in 2010.  Ms. Krehbiel is an attorney, who received her law degree from the University of Cincinnati in 1980, and has practiced law in Lebanon, Ohio since 1989. Ms. Krehbiel founded her own law firm, Krehbiel Law Offices, in 1998. She is certified as an Estate Planning, Trust and Probate Law Specialist. Ms. Krehbiel serves on the Audit Committee, the Building Committee, Bond Committee, Loan Committee, the Nominating Committee and the Compensation Committee.

Class II Directors
Steve P. Foster
Age: 68
Director Since: 2005
Term Expires: 2022
Steve P. 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 the LCNB staff in 1977 and has served as internal auditor, branch manager, and loan officer. He started the Information Technology Department and served as Chief Financial Officer and President. Mr. Foster was Chair of the Ohio Bankers League in 2017.

He was elected to the LCNB Board of Directors in 2005 and serves on the Trust Investment Committee, the Pension Committee, and the Loan Committee.
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Ms. Krehbiel serves on a number of organizations including: Harmon Civic Trust; the Warren County Bar Association, of which she is a former president; the Warren County Foundation Board of Trustees; and Lebanon Rotary International.  She also volunteers as a high school swimming official in Southwestern Ohio.

Anne E. Krehbiel
Age: 65
Director Since: 2010
Term Expires: 2022
Anne E. Krehbiel received her law degree from the University of Cincinnati in 1980, and has practiced law in Lebanon, Ohio since 1989. Ms. Krehbiel founded her own law firm, Krehbiel Law Offices, in 1998. She is OSBA Board Certified Estate Planning, Trust and Probate Law Specialist.

Ms. Krehbiel serves on a number of organizations including the Harmon Civic Trust Board of Trustees, the Warren County Bar Association, of which she is a former president, the Warren County Foundation Board of Trustees, and Lebanon Rotary International.

Ms. Krehbiel joined the Board in 2010 and brings relevant experience in legal matters, valuable insights and business experience from managing her own law firm, prior bank experience and an extensive involvement in the communities served by the Company and its subsidiaries. Ms. Krehbiel serves on the Audit and Nominating and Governance Committees, and Chairs the Compensation Committee.

Michael J. Johrendt
Age:         67
Director Since:    2018
Term Expires:     2022


Michael J. Johrendt is a principal in the law firm of Johrendt & Holford, located in Columbus, Ohio. A graduate of The Ohio State University Moritz College of Law, Mr. Johrendt practices in the area of business and tax law. In addition to his law practice, Mr. Johrendt is a commercial real estate investor.

Mr. Johrendt previously served as a Director of Columbus First Bank from August 2007 until its acquisition by LCNB National Bank in May, 2018. Mr. Johrendt has also served as Vice-Chair of the Ohio Board of Tax Appeals. Mr. Johrendt resides on Fripp Island, South Carolina.

Mr. Johrendt chairs the Nominating and Governance Committee and serves on the Compensation Committee.

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Ms. Krehbiel brings to the Board relevant experience in legal matters, valuable insights and business experience from running her own law firm, prior bank experience and an extensive involvement in the communities served by the Company and its subsidiaries.  

Class III Directors
William H. Kaufman
Age: 77
Director Since: 1982
Term Expires: 2023

William H. Kaufman former senior partner of Kaufman and Florence Attorneys located in Lebanon, Ohio. Presently he is “Of Counsel” with the firm. A graduate of Northern Kentucky University Salmon P. Chase College of Law, he began his legal career as an attorney with Young and Jones, which ultimately became Kaufman & Florence, located in the LCNB National Bank building

He has extensive litigation experience in insurance related cases as well as 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 joined the LCNB Board of Directors in 1982. Mr. Kaufman provides the Board with relevant experience in legal matters and, through his long tenure on the board, an institutional knowledge of the operations of the Company and its subsidiaries. He also oversees all day-to-day legal matters and real estate closings for the Bank

Mary E. Bradford
Age: 65
Director Since: 2018
Term Expires: 2023

Mary E. Bradford joined the Board in 2018. Ms. Bradford is a retired IT executive who spent 31 years with GE Aviation in Evendale, Ohio. She brings information technology expertise and has extensive international business experience implementing information technology solutions for the Finance, Engineering, Supply Chain, and Sales teams at GE. In addition, 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 serves on the Audit, Compensation, and Nominating and Governance Committees.

15

Valerie S. Krueckebergjoined the Board in 2016. Ms. Krueckeberg is a practicing Certified Public Accountant, providing a variety of finance and accounting advisory and consulting services to clients. Prior to starting her own firm, she was a Partner at KPMG LLP. She has previously served as a Board member and Audit Committee chairperson for Kenra, Ltd, Board member and Interim Executive Director of The Children

William (“Rhett”) G. Huddle
Age: 65
Director Since: 2018
Term Expires: 2023
William (“Rhett”) G. Huddle has served as a Director of LCNB Corp. and LCNB National Bank since June 2018 as a result of the acquisition of Columbus First Bank Corp, Inc. and its subsidiary, Columbus First Bank. (Collectively, Columbus First). Currently, Mr. Huddle serves on the Loan and Trust Committees of the Bank.

Mr. Huddle was the lead organizer in the formation of Columbus First and served as Chairman and CEO from 2007 until June 2018. From 1986 through 2004, Mr. Huddle served in various roles as an executive officer and/or director of several banks headquartered in Columbus, Ohio.

Mr. Huddle is a graduate of Princeton University and The Ohio State University Moritz College of Law. He practiced law in Columbus with the Baker & Hostettler law firm for five years.

Mr. Huddle’s career in banking and law in Columbus over the past 40 years provide him valuable experience to serve as a director of LCNB Corp. and LCNB National Bank.

Craig M. Johnson
Age: 65
Director Since: 2019
Term Expires: 2023
Craig M. Johnson joined the Board in 2019. Mr. Johnson is a Certified Public Accountant who has over 37 years’ experience in the public accounting and private industry sectors. Most recently, Mr. Johnson retired as Principal from the accounting firm of Clark Schaefer Hackett & Co. Prior, he served as Partner for the public accounting firm of J.D. Cloud & Co. LLP. He previously worked for an international public accounting firm in addition to holding the role of local market controller for a large regional bank.

Mr. Johnson is a current member of the Ohio Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Mr. Johnson currently serves as Treasurer and Board Member of the Clifton Cultural Arts Center, serves on the Finance Committee of Clifton United Methodist Church and serves on the audit committee of Easter Seals Tristate. He has also served on a variety of not-for-profit audit committees and boards in the past

Mr. Johnson is Chair of the Audit Committee and provides extensive experience in public accounting and financial matters. Mr. Johnson also serves on the Compensation and Nominating and Governance Committees
’s Theatre of Cincinnati, Inc., and Interim Controller for Medpace, Inc.

Ms. Krueckeberg is the current chairperson for The Ohio CPA Foundation Board of Trustees and is a member of the Ohio Society of Certified Public Accountants and the American Institute of Certified Public Accountants.  She serves on the Miami University Accountancy Advisory Group, and is an active volunteer for Mason City Schools.   

Ms. Krueckeberg brings to the Board extensive experience in public accounting and financial matters.



Class III Directors (Terms Expire in 2020)

George L. Leasure joined the Board in 1994.  He founded GMi Companies (formerly Ghent Mfg., Inc.) in 1976 and now serves as its Chairman and a director.  The company manufactures markerboards, easels and related products.  Mr. Leasure serves on the Bond Committee, the Loan Committee, the Compensation Committee, the Nominating Committee, and the Trust Investment Committee.


Mr. Leasure is active in many Warren County civic and charitable organizations including serving on the Board of Trustees for the Countryside YMCA, the Warren County Foundation Board and as a member of the Area Progress Council.


Mr. Leasure’s executive and management experience have equipped him to contribute to the Board’s oversight of management and business activities.


William H. Kaufmanis an attorney and senior partner of Kaufman and Florence Law Office located in Lebanon.  He began his legal career as an attorney with the law firm of Young and Jones, whose office was located in the Bank building.  


Mr. Kaufman joined the LCNB Board of Directors in 1982 and serves on the Bond, Loan, and Bank Building Committee’s.  He also oversees all day-to-day legal matters and real estate closings for the Bank.


Mr. Kaufman provides the Board with relevant experience in legal matters and, through his long tenure on the board, an institutional knowledge of the operations of the Company and its subsidiaries.


Board of Directors Independence


Each year, the Board reviews the relationships that each director has with the Company and with other parties. Only those directors who do not have any of the categorical relationships that preclude them from being independent within the meaning of applicable NASDAQ Rules and who the Board affirmatively determines have no relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director are considered to be independent directors. The Board has reviewed a number of factors to evaluate the independence of each of its members. These
16

factors include its members’members’ current and historic relationships with the Company and its competitors, suppliers and customers; their relationships with management and other directors; the relationships their current and former employers have with the Company; and the relationships between the Company and other companies of which the Company’sCompany’s Board members are directors or executive officers. After evaluating these factors, the Board has determined that all of the directors, with the exception of Steve P. Foster, Eric J. Meilstrup and William H. Kaufman, are independent directors of the Company within the meaning of applicable NASDAQ Rules.


Board Leadership Structure and Role in Risk Oversight


The Board currently separates the position of Chairman of the Board from the position of Chief Executive Officer. Steve P. FosterOfficer (“CEO”). Eric J. Meilstrup serves as our PresidentCEO and Chief Executive Officer and Stephen P. WilsonSpencer S. Cropper serves as Chairman of the Board. As the oversight responsibilities of the Board of Directors have expanded over the years, the Board has determined that it is beneficial to have an independent Chairman with the sole job of leading the Board, while allowing the President/CEO to focus his efforts on the day-



to-dayday-to-day management of the Company. The Board believes that it is important to have the President/CEO as a director. The Company aims to foster an appropriate level of separation between these two distinct levels of leadership of the Company. In addition to the Chairman, leadership is also provided through the respective chairs of the Board’sBoard’s various committees. However, no single leadership model is right for all companies and at all times. The Board recognizes that, depending on the circumstances, other leadership models, such as a combined Chief Executive Officer and Chairman of the Board position, might be appropriate. Accordingly, the Board periodically reviews its leadership structure.


The Board of Directors is responsible for consideration and oversight of risks facing the Company and is responsible for ensuring that material risks are identified and managed appropriately. Several oversight functions are delegated to committees of the Board with such committees regularly reporting to the full Board the results of their respective oversight activities. For example, the Audit Committee meets periodically with management in order to review the Company’sCompany’s major financial risk exposures and the steps management has taken to monitor and control such exposures. As part of this process, the Audit Committee reviews management’smanagement’s risk-assessment process and reports its findings to the full Board. Also, the Compensation Committee periodically reviews the most important enterprise risks to ensure that compensation programs do not encourage excessive risk-taking. Additional review or reporting on enterprise risks is conducted as needed or as requested by the Board or Board committees.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


LCNB has engaged and intends to continue to engage in the lending of money through the LCNB National Bank, its wholly-owned subsidiary, to various directors and officers of the Company. These loans to such persons were made in the ordinary course of business and in compliance with applicable banking laws and regulations, on substantially the same terms, including interest rates and collateral, as prevailing at the time for comparable transactions with other persons and do not involve more than a normal risk of collectability or other unfavorable features.


In addition to those banking transactions conducted in the ordinary course, the Bank was involved in the related transactions described below. Each of these transactions was made on terms similar to those that could have been negotiated with an unaffiliated third party.


The Bank again retained the law firm of Kaufman & Florence during 20172020 for legal services in connection with various matters arising in the course of the Bank’sBank’s business. William H. Kaufman, a director of LCNB, is a partner informer Partner (currently Of Counsel) of Kaufman & Florence. Additionally, customers of the Bank are charged for certain legal services provided by Mr. Kaufman’sKaufman’s firm in the
17

preparation of various documents. The approximate amount billed by Kaufman & Florence for legal services during 20172020 was $151,000.$74,000. The Bank contemplates using Mr. Kaufman’sKaufman’s firm in the future on similar terms, as needed.


The Company does not have a written process of approval and ratification of related party transactions. However, the Company does adhere to an unwritten policy, whereby before the Company or the Bank enters into any transaction for which the value of the transaction is expected to be at least $120,000, and an interested party in the transaction is a director, executive officer, an immediate family member of a director or officer, or a shareholder owning 5% or greater of the Company’sCompany’s outstanding stock, the disinterested Board of Directors must review and approve the transaction. In reviewing the potential transaction, the directors will consider the fairness of the transaction to the Company, whether the transaction would or could compromise the interested party’sparty’s independence and judgment, the best interests of the Company, and such other factors determined advisable by the Board of Directors. In




2017, 2020, the Board of Directors reviewed and approved of the related party transaction with Mr. Kaufman’sKaufman’s firm, as described above.


DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

REPORTS


Section 16(a) of the Securities Exchange Act of 1934 requires LCNB’sLCNB’s officers and directors and persons who own more than 10% of a registered class of LCNB’sLCNB’s equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required to furnish LCNB with copies of all Section 16(a) forms they file. Based solely on LCNB’sLCNB’s review of the sectionSection 16(a) forms received by it and by statements of officers and directors concerning their compliance with the applicable filing requirements, the officers, directors and greater than 10% beneficial owners of LCNB have complied with all applicable filing requirements.


BOARD OF DIRECTORS MEETINGS AND COMMITTEES


In

During the fiscal year ended December 31, 2017,2020, the Board of Directors met on 86 occasions. No director attended less than 75% of the aggregate of the total number of meetings of the Board and the committees on which he served.Theor she served.The Company encourages its directors to attend the Annual Meeting of the Shareholders, and in 2017,2020,all of the directors attended the meeting.meeting, virtually or in person. Directors do not receive any compensation from LCNB for their service on the Board of Directors of LCNB. However, each director of LCNB also serves as a director of LCNB National Bank, the banking subsidiary of LCNB, which meets once per month, for which each director is compensated atwith a rate of$14,000 annually.$30,000 annual retainer with the exception of the Chair who is compensated with a $40,000 annual retainer. In addition to the annual retainer, non-employee directors who serve on committees of the Board of Directors receive $150$440 for each committee meeting attended. Further, the directors participate like the employeesThe Chair of the Companyeach committee receives $880 for each committee meeting attended. In addition, in the Non-Equity Incentive Plan of the Company, and thus receive cash compensation based upon the success of the Company over the previous year.  In 2017, the directors2020 each director received compensation under this planan equity grant equal to9.5%to ten percent of their annual base compensation and committee meeting fees earned during 2017.

retainer.


The table below summarizes all compensation paid to the directors of LCNB for their services as directors during fiscal year 2017.

2020.

18

Director Compensation

Name

Fees Earned or Paid in Cash

($)(1)

Non-Equity Incentive Plan Compensation ($)(2)

Total ($)

Stephen P. Wilson

$15,650

$1,487

$16,315

Steve P. Foster

$14,000

$1,330

$15,330

Spencer S. Cropper

$14,900

$1,415

$16,315

William H. Kaufman

$14,000

$1,330

$15,330

John H. Kochensparger III

$16,550

$1,572

$18,122

Anne E. Krehbiel

$14,900

$1,415

$16,315

Valerie S. Krueckeberg

$14,900

$1,415

$16,315

George L. Leasure

$16,550

$1,572

$18,122

Director Compensation
Name
Fees Earned or Paid in Cash
($)(1)
Equity Grant ($)(2)
Total ($)
Eric J. Meilstrup$30,000$3,000$33,000
Spencer S. Cropper$45,280$4,000$49,280
Steve P. Foster$34,840$3,000$37,840
Stephen P. Wilson$34,840$3,000$37,840
Mary E. Bradford$37,040$3,000$40,040
William (“Rhett”) G. Huddle$34,840$3,000$37,840
Craig M. Johnson$37,480$3,000$40,480
Michael J. Johrendt$34,400$3,000$37,400
William H. Kaufman$30,000$3,000$33,000
Anne E. Krehbiel$37,040$3,000$40,040
John H. Kochensparger III$37,480$3,000$40,480
-




(1)

The compensation paid to the directors of LCNB includes committee fees as follows: S. Cropper, $900;$5,280;

S. Wilson, $4,840; M. Bradford, $7,040; W. Huddle, $4,840; C. Johnson, $7,480; M. Johrendt, $4,400;
A. Krehbiel, $7,040; S. Foster, $4,840; and J. Kochensparger $2,550; A. Krehbiel, $900; V. Krueckeberg, $900; G. Leasure, $2,550;III, $7,480.Mr. Meilstrup and Mr. Wilson, $1,650.  Mr. Kaufman and Mr. Foster
are not independent directors and do not receive committee fees.


(2)

The directors, in addition to their baseannual retainer and committee fees, receive a cash award that corresponds to the Bankan equity retainer grant

’s Non-Equity Incentive Plan. The percentage awarded to the officers is used to calculate the directors’ cash award that year.  The award is paid in the following year. This percentage is multiplied by the directors’ base fee plus the committee fee to arrivevalued at the award. The percentage used for the award paid in 2017 was9.5%.

ten percent of their annual retainer.


The Company has an Audit Committee that serves in a dual capacity as the Audit Committee of the Bank. During 2017,2020, the members of the Audit Committee were Craig M. Johnson (Chair), Spencer S. Cropper, (Chair),Mary E. Bradford and Anne E. Krehbiel, and Valerie S. Krueckeberg.Krehbiel. The Audit Committee met a total of 65 times in 2017.2020. All of the members of the Audit Committee meet the definition of independent director set forth in NASDAQ Listing Rule 5605(a)(2). Valerie S. KrueckebergCraig M. Johnson served as the financial expert as defined by the Sarbanes-Oxley Act and NASDAQ Listing Rule 5605(a)(2).The.The Audit Committee is responsible for engaging independent auditors, reviewing with the independent auditors the plans and results of the audit, and reviewing the adequacy of the Bank’sBank’s internal accounting controls. The Board of Directors of the Company has adopted a written charter for the Audit Committee. The Audit Committee Charter is available online at https://www.lcnbcorp.com/govdocs.

corporate-profile/corporate-governance/default.aspx.


The Bank also has a Compensation Committee, Nominating and Governance Committee, Building Committee, Appraisal Committee, Nominating Committee, Trust Committee, Bond Committee, Pension Committee, and Loan Committee. Each of these committees meet as needed. The Building Committee reviews the facility needs and repair and improvement issues of the Bank and its branch and other office buildings. The members of the Building Committee are Stephen P. Wilson, Anne E. Krehbiel, Steve P. Foster, John H. Kochensparger III, and William H. Kaufman. The Appraisal Committee reviews the appraisals conducted by the Bank’sBank’s real estate appraisers to ensure that the appraisals are consistent and accurate. The members of the Appraisal Committee are Stephen P. Wilson, Peter Berninger, Matt Layer and Timothy Sheridan. The Trust Committee reviews the various trusts accepted by the Trust Department of the Bank, reviews trust investments and advises the trust officers in department operations. The members of the Trust Committee are Stephen P. Wilson, Steve P. Foster, Michael R. Miller, George L. Leasure, John H. Kochensparger III, S. Diane Ingram, Melanie K. Crane,William G. Huddle, Bradley A. Ruppert, Amy R. Kobes,Josh Shapiro, Kasheen Swango, Traci Hammiel, Michael D. Nusbaum, Myra A. Frame and Jackie Manley. The Bond Committee reviews the adequacy of the Bank’sBank’s blanket bond coverage and recommends any
19

changes in coverage to the Board of Directors of the Bank. The Bond Committee consists of the entire Board of Directors of the Bank. The Pension Committee reviews the Bank’sBank’s defined benefit pension plan. The members of the Pension Committee are Stephen P. Wilson, Spencer S. Cropper, Steve P. Foster, Eric J. Meilstrup and Robert C. Haines II. The Board Loan Committee reviews the lending procedures of the Bank and reviews and approves requests for loans in excess of the established lending authority of the officers of the Bank. The Board Loan Committee consists of the entire Board of Directors of the Bank.

Steve P. Foster, William G. Huddle and John H. Kochensparger III.


During 2017,2020, the Nominating and Governance Committee consisted of all fivesix of the Company’sCompany’s independent directors (as defined in NASDAQ Listing Rule 5605(a)(2)): Michael J. Johrendt (Chair), Spencer S. Cropper, John H. Kochensparger III, George L. Leasure,Mary E. Bradford, Craig M. Johnson, and Anne E. Krehbiel, and Valerie S. Krueckeberg.Krehbiel. The Nominating Governance Committee met one time4 times in 2017 and does have a charter.2020. Decisions concerning nominees for the Board of Directors will be made by the nominating committeeNominating Committee and ratified by the entire Board. The Board has not adopted a policy with respect to minimum qualifications for board members. However, in making its nominations, the committee considers, among other things, an individual’sindividual’s business experience, industry experience, financial background, breadth of knowledge about issues affecting the Company, time available for




meetings and consultation regarding Company matters and other particular skills and experience possessed by the individual. Please see the narrative under the heading “Director“Director and Nominee Qualifications”Qualifications” beginning on page 911 of this Proxy Statement for additional discussion of the nomination process. The Board of Directors has adopted a written charter for the Nominating and Governance Committee Charter and is available online at https://www.lcnbcorp.com/govdocs.

corporate-profile/corporate-governance/default.aspx.


Historically, the Company has not engaged third parties to assist in identifying and evaluating potential nominees, but would do so in those situations where particular qualifications are required to fill a vacancy and the Board’sBoard’s contacts are not sufficient to identify an appropriate candidate.


The Company has not received director candidate recommendations from its shareholders and, as such, does not have a formal policy regarding consideration of such recommendations. However, any recommendations received from shareholders will be evaluated in the same manner that potential nominees suggested by Board members are evaluated. The Company does not intend to treat shareholder recommendations in any manner different from other recommendations. Shareholders may send director nomination recommendations to Stephen P. WilsonSpencer S. Cropper at P.O. Box 59, Lebanon, Ohio 45036.


The Bank has a designated Compensation Committee, which metone timemet5 times in 2017 and does have2020. The Board of Directors of the Company has adopted a charter. Thewritten charter for the Compensation Committee Charterand is available online at https://www.lcnbcorp.com/govdocs.corporate-profile/corporate-governance/default.aspx. During 2017, this committee2020, the Compensation Committee consisted of thesix independent directors of the Bank:directors: Anne E. Krehbiel (Chair), Spencer S. Cropper, George L. Leasure, John H. Kochensparger III, AnneMichael J. Johrendt, Craig M. Johnson, and Mary E. Krehbiel, and Valerie S. Krueckeberg.Bradford. The committee makes compensation recommendations to the Board of Directors for consideration, as further described in the “Compensation“Compensation of Executive Officers”Officers” section below.


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION


The members of the Compensation Committee for fiscal year 20172020 were Anne E. Krehbiel (Chair), Spencer SS. Cropper, John H. Kochensparger III, George L. Leasure, Valerie S. Krueckeberg,Mary E. Bradford, Michael J. Johrendt and Anne E. Krehbiel.Craig M. Johnson. In 2017,2020, no executive officer of the Company served on the Board of Directors or compensation committee of any entity that compensates any member of the Company’sCompany’s Compensation Committee.



20

SHAREHOLDER COMMUNICATION WITH BOARD MEMBERS


The Company maintains contact information, both telephone and email, on its website (https://www.LCNB.com) under the heading “Contact Us.“Resource Center” then “Contact.” By following the contact link, a shareholder will be given access to the Company’sCompany’s toll-free telephone number and mailing address, as well as a linkform to populate that would then be sent to the Company email address for providing email correspondence.in the form of an email. Communications sent to that Company email address and specifically marked as a communication for the Board will be forwarded to the Board or specific members of the Board as directed in the shareholder communication. In addition, communications received via telephone for the Board of Directors are forwarded to the Board by an officer of the Company. In addition, shareholders may send communications to the Board or any of its members by sending such communications to the Company, c/o Secretary at P.O. Box 59, Lebanon, Ohio 45036.


CODE OF ETHICS


The Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees and aemployees. The Code of Business Conduct and Ethics applicable to the Company’s Chief Executive




Officer, Chief Financial Officer and Controller. These codes of ethics areis included in the Company’sCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

2020, and is available online at https://www.lcnbcorp.com/corporate-profile/corporate-governance/default.aspx.


AUDIT COMMITTEE REPORT


The Audit Committee of the Board of Directors of the Company is composed of threefour independent directors. The responsibilities of the Audit Committee are set forth in the revised charter of the Audit Committee which was adopted by the Board of Directors of the Company on February 17, 2004.and is available at https://www.lcnbcorp.com/corporate-profile/corporate-governance/default.aspx. The Audit Committee reviews, and revises if necessary, the Audit Charter at least annually. Any changes are presented to the Board of Directors for approval. The Audit Committee, among other matters, is responsible for the annual appointment and supervision of the independent public accountants, and reviews the arrangements for and the results of the auditors’auditors’ examination of the Company’sCompany’s books and records and auditors’auditors’ compensation. The Audit Committee reviews the Company’sCompany’s accounting policies, internal control procedures and systems and compliance activities.


The Audit Committee has reviewed and discussed the audited consolidated financial statements with management. The committee has also reviewed and discussed with BKD, LLP their independence as auditors for the fiscal year ended December 31, 2017,2020, as required to be discussed by SAS 61, as it may be modified or supplemented.


The Audit Committee also has received the written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, Independence Discussions with Audit Committee), as may be modified or supplemented, and, as required, has discussed with BKD, LLP its independence.


Based on the foregoing discussions, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’sCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

2020.


This report has been submitted by the Audit Committee:


Craig M. Johnson (Chair)        Spencer S. Cropper

Anne E. Krehbiel

Valerie S. Krueckeberg

            Mary E. Bradford

21

MARKET PRICE OF STOCK AND DIVIDEND DATA


Holders and Market Information


LCNB had approximately 959961 registered holders of its Common Shares as ofDecemberofDecember 31, 2017.2020. The number of shareholders includes banks and brokers who act as nominees, each of whom may represent more than one shareholder. ItsLCNB’s Common Shares are currently traded on the NASDAQ Capital MarketMarket® under the symbol “LCNB”“LCNB”. Several market-makers facilitate the trading of the Common Shares. Trade prices for LCNB’sLCNB’s Common Shares, reported through registered securities dealers, are set forth below. Trades have occurred during the periods indicated without the knowledge of LCNB.





The trade prices shown below are interdealer without retail markups, markdowns or commissions.


2017


High


Low

First Quarter


$24.35


$20.80

Second Quarter


$22.80


$19.00

Third Quarter


$21.85


$18.05

Fourth Quarter


$22.84


$19.40

2016


High


Low

First Quarter


$17.75


$15.51

Second Quarter


$17.24


$15.69

Third Quarter


$19.13


$15.73

Fourth Quarter


$25.00


$16.55

2020HighLow
First Quarter$19.43$10.03
Second Quarter$16.70$10.53
Third Quarter$15.87$12.65
Fourth Quarter$15.99$12.51
2019HighLow
First Quarter$17.30$15.05
Second Quarter$19.94$16.30
Third Quarter$19.08$16.21
Fourth Quarter$19.50$16.56

Dividends


The following table presents cash dividends per share of common stock declared and paid in the periods shown.



2017


2016

First Quarter

$0.160


$0.160

Second Quarter

  0.160


  0.160

Third Quarter

  0.160


  0.160

Fourth Quarter

  0.160


  0.160

Total

$0.640


$0.640





20202019
First Quarter$0.18$0.17
Second Quarter$0.18$0.17
Third Quarter$0.18$0.17
Fourth Quarter$0.19$0.18
Total$0.73$0.69
It is expected that LCNB will continue to pay dividends on a similar schedule, to the extent permitted by business and other factors beyond management’smanagement’s control. LCNB depends on dividends from its subsidiary for the majority of its liquid assets, including the cash needed to pay dividends to its shareholders. Federal banking laws and regulations limit the amount of dividends the Bank may pay to the sum of retained net income, as defined, for the current year plus retained net income for the previous two calendar years. Prior approval from the Office of the Comptroller of the Currency, the Bank’sBank’s primary regulator, would be necessary for the Bank to pay dividends in excess of this amount. In addition, dividend payments may not reduce capital levels below minimum regulatory guidelines. Management believes the Bank will be able to pay anticipated dividends to LCNB without needing to request approval.




22

Equity Compensation Plan Information


The Company’sCompany’s 2015 Ownership Incentive Plan (the “Plan”“2015 Plan”) was approved by shareholders at the 2015 annual meeting. The 2015 Plan provides for the grant of ownership incentives to key employees and directors in the form of stock options, appreciation rights, restricted shares and/or restricted share units. The 2015 Plan is administered by the Compensation Committee. For additional information on the 2015 Plan, please refer to the Company’sCompany’s Definitive Proxy Statement, filed with the SEC on March 13, 2015. The Company’sCompany’s previous equity incentive plan, the 2002 Ownership Incentive Plan (the “2002 Plan”“2002 Plan”), expired in accordance with its terms in 2012. The Board established the 2002 Plan to provide awards to certain executive officers after reaching specific earnings and asset growth goals set at the beginning of each year. Options previously granted and still outstanding under the 2002 Plan continueare exercisable at any time prior to be exercisedDecember 31, 2022, in accordance with the terms of the grants.




The following table summarizes share and exercise price information about LCNB’sLCNB’s equity compensation plans as of March 1, 2018.

2021.

Plan Category

(a)

Number of Securities

to be Issued upon

Exercise of

Outstanding Options,

Warrants and Rights

(b)

Weighted-Average Exercise Price of Outstanding Options,Warrants and Rights

(c)

Number of Securities remaining available for future issuance under any equity compensation plans (excluding securities

reflected in column (a))

Equity compensation


plans approved by


security holders

17,634N/A

N/A
96,891 shares

$11.25

97,202 shares(1)(2)

Equity compensation


plans not approved by


security holders


NA

N/A

NA

N/A

NA

N/A

Total

17,634N/A

N/A96,891 shares

$11.25

97,202 shares



(1)

Except for restricted share awards granted under the 2015 Plan (which are not required to be reflected in this

table), the only equity incentives granted under the 2015 or 2002 Plans have been stock options.

(2)

The 2002 Plan expired in 2012 and the 96,19696,891 shares left in the plan at expiration reverted to Treasury securities, shares,

authorized unissued securities of the Company.


COMPENSATION OF EXECUTIVE OFFICERS


Compensation Discussion and Analysis


The Compensation Discussion and Analysis (“CD&A”) explains our executive compensation program for our named executive officers listed below (the “NEOs”), which include our Chief Executive Officer, Chief Financial Officer and our three other most highly-compensated executive officers who were serving as executive officers at the end of 2020. The NEOs for 2020 were:

•Eric J. Meilstrup, President and Chief Executive Officer
23

•Robert C. Haines II, Executive Vice President and Chief Financial Officer
•Matthew P. Layer, Executive Vice President and Chief Lending Officer
•Michael R. Miller, Executive Vice President, Trust Officer
•Bradley A. Ruppert, Executive Vice President, Trust Officer, Chief Investment Officer

The CD&A also describes the process followed by the Compensation Committee (the “Committee”) for making pay decisions, as well as its rationale for specific compensation related decisions related to 2020. LCNB has no direct employees. All officers and other employees performing services for LCNB are employees of the Bank. The Compensation Committee is a committee of the Board of Directors, composed solely of independent directors, and is responsible for developing the Bank’sBank’s executive compensation principles, policies and programs and approving the compensation to be paid to the Chief Executive Officer, Chief Financial Officer and each of the other named executive officers (the “named executive officers”) of the Company and the Bank.NEOs. The Compensation Committee consults with Steve P. Foster,Eric J. Meilstrup, President and Chief Executive Officer, concerning executive officer compensation; however, he does not participate in the deliberations regarding his own compensation.

2020 Executive Compensation Highlights

Our executive compensation as Presidentprograms are designed to align the interests of our NEOs with those of our shareholders. Based on our performance, findings from the 2018 Executive Compensation Review (discussed later in the CD&A), and Chiefour commitment to linking pay and performance, the Committee made the following executive compensation decisions for fiscal year 2020. For more detail, please refer to the “2020 Executive Officer.

Compensation Components” later in the CD&A:


•Base Salaries: Base salaries were increased approximately 9.5% for each NEO, effective January 2020.
•2020 Short-Term Incentives/Cash Bonuses: Based on our 2020 financial performance and the NEOs’ individual performance, the NEOs earned short-term incentives equal to 13.0% of base salary. The target payout amount was set at 12.5% of base salary with the maximum opportunity set at 20% of base salary.
•2020 Long-Term Incentives: Equity grants were issued at 20% of base salary for NEOs. The target amount was set at 10% of base salary with the maximum opportunity set at 20% of base salary.

Summary of Executive Compensation Practices

Our executive compensation program includes the following practices and policies, which we believe promote sound compensation governance and are in the best interests of our shareholders:

What We Do
•Periodically, compare our NEO compensation levels to the market and take these results into consideration when making compensation related decisions.
•Provide our NEOs with a performance-based cash incentive plan on an annual basis.
•Grant full-value equity to each of our NEOs with multi-year vesting provisions.
•Provide each of our NEOs with deferred compensation programs to encourage retention and promote stability in our executive group.
•Utilize the assistance of an outside independent compensation consultant to assist our Compensation Committee with gathering market data and best practices information.

24

What Guides Our Compensation Programs

The primary objectives of the Bank’sLCNB’s executive officer compensation programs are to:


•

Provide a direct link between executive officer compensation and the interests of LCNB and LCNB’sLCNB’s shareholders by making a portion of executive officer compensation dependent upon the financial performance of the Bank and the consolidated corporation.


LCNB.

•

Support achieving the Bank’sLCNB’s annual and longtermlong‑term goals and objectives as determined by the Bank Board.


Board by linking these goals to the incentive compensation programs for the executive officers.

•

Establish base salaries targeted at abetween the 25th and 75th percentiles of market median level for comparable positions within a comparison peer group of companies in the banking industry whenindustry. If an executive officer is meeting performance expectations they’ll likely have a base salary level near market median. 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. If an executive is innew to a fully functioning role.




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 abovesomewhere between the median for above median performance.


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 executive officers of the Company and the Bankour NEOs includes: (i) base salary, (ii) annual cash bonuses and (iii) incentive opportunities, which may consist of equity incentives under the 2015 Ownership Incentive Plan. Executive officersSome 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.


Generally, the named executive officers

The NEOs of the Bank are employed “at will”“at will” without severance agreements or employment contracts. TheCurrently, the Company believes that its compensation levels and structure, as well as the Company’sCompany’s culture and intangibles alleviate the need for the Company to utilize employment agreements with its named executive officers.

NEOs.


The Company held its most recent “say-on-pay” and “say-when-on-pay” advisory shareholder votes on

Beginning in 2020, the compensation of LCNB’s named executive officers at the April 2017 Annual Meeting.  The Compensation Committee noted that the Company’s proposal regarding the “say-on-pay” vote had broad support among its shareholders.  The 2017 “say-on-pay” vote results were 94.3% in favor.   With respectdecided to the “say-when-on-pay” advisory vote, the Company’s shareholders were almost evenly split between holding an advisory shareholder vote on the compensation of LCNB’s named executive officers once every three years versus every year, with every year receiving slightly more votes. Because of the near split amongst voters, and the Compensation Committee’s belief thatpropose a say-on-pay vote every three years is sufficient, the Board will continue to hold such advisory vote on executive compensation once every three years.year. Therefore, the next advisory shareholder vote on the compensation of LCNB’s named executive officersLCNB’s NEOs will occur at the 2022 annual meeting and the advisory vote on the frequency of the say-on-pay vote will occur at the 2020 annual meeting and the 2023 annual meeting, respectively.  

meeting.


Based on the results of the 2017 “say-on-pay” vote, no specific component of the executive compensation program was altered for fiscal year 2017.

The Compensation Committee and the Company’sCompany’s Board of Directors believe that the Company’sCompany’s executive compensation has been appropriately tailored to its business strategies, aligns pay with performance, and reflects best practices regarding executive compensation. The committeeCommittee will continue to consider shareholder sentiments about the Company’sCompany’s core principles and objectives when determining executive compensation.


Engagement of Independent Compensation Consultant


The Compensation Committee has the sole authority to engage the services of any compensation consultant or advisor. In 2018 (and in late 2013,2020), the Compensation Committee directly engaged the services of Blanchard Consulting Group (“BCG”(“BCG”) to provide consulting services surrounding executive compensation programs and policies.  BCG is, an independent third-party consulting group that focuses exclusively on providing compensation consulting to community banks throughoutcompany focused on the country.  During 2014, BCG assisted LCNB with an executive compensation review, a review of the annual cash incentive plan, and assistance with a market-based equity plan review and the development of the 2015 Ownership Incentive Plan (with the assistance of LCNB’s outside legal counsel).banking industry. BCG was hired directly by the Compensation Committee and does not provide any other services to LCNB.LCNB beyond independent compensation consulting services. The Compensation Committee
25

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’sBCG’s work does not raise a conflict of interest.


In early 2014, BCG completed work onreports 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. For the Committee’s use in 2018, BCG produced comprehensive reviews of both board compensation and executive total compensation, review project.  This project focused on all aspects of total compensation; including base salaries, cash incentives/bonuses, equity incentives and grants,which, among other things, evaluated LCNB’s board compensation and perquisites,pay of its NEOs to that of a custom peer group, as well as against regional and executive benefitsnational banking surveys and retirement programs.  As part of thisBCG database information. In 2020, the Committee continued to utilize the 2018 BCG study findings when making compensation related decisions, but the Committee also engaged BCG during 2020 to conduct an updated executive total compensation review that will be used to assist with 2021 compensation related decisions. Some general “aging” principles and updated discussions with BCG were utilized a peer group of twenty-one (21) publicly traded banks in Ohio and surrounding states and gathered and reviewed total compensation and performance datato make the information current for these peer banks.  A listing of the specific peer group banks utilized in the 2014 study is provided below.  The report of findings from this study was utilized for 2014 decisions, including the recommendation for the adoption at the 2015 Annual Meeting of Shareholders of the 2015 Ownership Incentive Plan.  Due to the comprehensive nature of the report, it was also utilized for 2015 compensation decisions.

2020.


In 2014, BCG also reviewed LCNB’s annual/short-term cash incentive plan compared to market best practices. Significant changes were contemplated but not made for 2015, however, the Compensation Committee determined that changes would be made to the annual/short-term cash incentive plan in 2017 based on internal discussions and recommendations from BCG.  A summary of the annual/short-term cash incentive plan for 2017 is provided later in this section.


Peer Group Banks – 2014 2018 Compensation Study


The peer group banks utilized in the executive and director total compensation reviewreviews performed by BCG in 20142018 included the following:


LNB Bancorp,First Defiance Financial Corp. (OH)

MBT Financial Corp. (MI)
Peoples Financial Services Corp. (PA)Citizens Financial Services, Inc. (OH)

(PA)

Farmers National Banc Corp. (OH)

ACNB Corporation (PA)

First CitizensSummit Financial Group, Inc. (WV)

Farmers & Merchants Bancorp, Inc. (OH)
Macatawa Bank Corporation (MI)Kentucky Bancshares, Inc. (KY)
Isabella Bank Corporation (MI)Ohio Valley Banc Corp. (OH)

Farmers Capital Bank Corporation (KY)

Malvern Bancorp, Inc. (PA)

MutualFirst Financial, Inc. (MFSF)Middlefield Banc Corp. (OH)
Premier Financial Bancorp, Inc. (WV)

CSB Bancorp, Inc. (OH)

Codorus Valley Bancorp, Inc. (PA)

ACNB Corporation (PA)

Franklin Financial Services (PA)

AmeriServ Financial, Inc. (PA)

HopFed Bancorp, Inc. (KY)

Farmers & Merchants Bancorp (OH)

United Bancorp, Inc. (MI)

Penns Woods Bancorp, Inc. (PA)

Community Bank Shares of Indiana, Inc. (IN)

Ohio Valley Banc Corp. (OH)

Camco Financial Corporation (OH)

MVB Financial Corp. (WV)

KentuckyCivista Bancshares, Inc. (KY)

(OH)

Tower Financial Corporation (IN)

Middlefield Banc Corp.Cortland Bancorp (OH)

NB&T Financial Group, Inc. (OH)

SB Financial Group, Inc. (OH)


2017

These peer group banks were updated in late 2020 for the updated executive compensation study performed in late 2020 and will be disclosed in next year’s proxy statement and used for compensation analysis in 2021.For the 2018 and 2020 reviews of executive compensation against benchmarking data, the Committee reviewed the following summary by BCG:

•Total Cash Compensation = Base Salary + Annual Cash Incentives / Bonus;
•Direct Compensation = Total Cash Compensation + Three-Year Average Equity Awards; and
•Total Compensation = Direct Compensation + Other Compensation + Retirement Benefits / Perquisites

•BCG’s 2018 and 2020 assessments of LCNB’s compensation practices and levels concluded that:
•
•LCNB’s financial performance was competitive versus peers; comparisons to the peer group/market 50th percentile were appropriate (this statement remained true in the 2020 updated executive compensation review);
26

•“Total Cash Compensation” of the NEOs was relatively conservative when compared to peer at a level that was below the peer group 25th percentile in 2018 (this positioning was similar in the 2020 updated executive compensation review);
•For “Direct Compensation,” LCNB had provided competitive equity awards but the below market salaries and cash incentives positioned direct compensation below the peer group 25th percentile (in the 2020 updated executive compensation review this positioning for direct compensation remained below the market median); and
•“Total Compensation” supports that LCNB has competitive executive benefits as most executive officers comparisons to peer increased for total compensation (in 2020 this general statement remained true for most of the executive officers).

2020 Executive Compensation Components


Annual Base Salaries


In setting annual salaries for the named executive officers, the Compensation Committee historically considered the salaries set forth in theOhio Bankers League Bank Compensation & Benefits Survey.  TheOhio Bankers League Bank Compensation & Benefits Survey publishes the median and certain other percentile salaries of over 300 financial institutions that take part in its survey of financial institutions in Ohio, Illinois and Missouri.  The survey does not individually identify the financial institutions that participate.  





For 2017, in addition to2020, the OBL Survey, the Compensation Committee considered the market data provided in BCG’s 2014BCG’s 2018 compensation report. This included salary data from the previously identified peer group along with various banking industry surveys. When setting each named executive officer’sNEOs annual salary, the Compensation Committee starts at the median salary for an equivalent position in the market, and adjusts the salary for each named executive officerNEO based upon such officer’sofficer’s history with the Company, experience overall, and general skill level. Named executive officersNEOs with greater tenure and more experience are generally compensated above the baseline provided by the median salary identified in the market, while named executive officersNEOs with shorter tenures with the Company and less experience are generally compensated below such baseline. The Compensation Committee uses the median salary as the starting point in setting the annual base salary for its named executive officers to help ensure that the Company’s compensation remains competitive and the Company is able to uphold its goal of maintaining stable, effective management.  Finally, the Compensation Committee compares the individual performance of the executive measured against the Board of Directors’Directors’ previously determined subjective performance objectives for each executive for the previous year.Taking into consideration all of these factors, the Compensation Committee sets each named executive officer’sNEO’s salary.


Individual Performance Objectives


The Compensation Committee establishes subjective performance objectives fortable below shows a comparison of each executive officer on an annual basis.  The performance objectives are tailoredNEOs 2019 and 2020 salaries.


Name2019 Base Salary2020 Base SalaryPercent Increase
Eric J. Meilstrup$275,000$315,00014.5%
Robert C. Haines II$200,000$214,0007.0%
Matthew P. Layer$200,000$214,0007.0%
Michael R. Miller$200,000$214,0007.0%
Bradley A. Ruppert$178,000$196,00010.1%

Incentive Compensation

In addition to the particular executive officer’s areapayment of responsibility withinbase salary and the provision of standard employee benefits, the Company’s NEOs have the opportunity to earn additional compensation in the form of annual cash incentives and equity incentives.

Annual Cash Bonus Incentives

On February 18, 2020, 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 goals are weighted with Company performance goals accounting for approximately 50% of the short-term cash incentive and individual performance goals accounting for approximately 50% of the cash incentive. If the Company and individual performance goals are substantially met, each NEO could receive an incentive equal to 11.5% of his 2020 base salary.
27

Substantially exceeding the Bank.  Whether theseCompany and individual performance objectives are achieved is onegoals can increase the cash incentive to a maximum of the factors considered by the Compensation Committee when establishing annual20% of base salariessalary. The Company performance goal metric for the following fiscal year.  Additionally,2020 annual cash incentive program was Adjusted Return on Average Assets. All annual cash incentives are subject to the Company’s “Clawback” policy as it may be amended from time to time.

The individual performance goals are weighted 50% and 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 2020, 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 performancegoals properly incentivized the NEOs to implement and attain the long-term strategic objectives are used to determine a small portion of the executive officers’ annual bonuses and incentives.  For fiscal year 2017, the named executive officers were evaluated on the performance criteria set forth below:  


Steve P. Foster– Act as President and Chief Executive Officer of LCNB, including overall growth and high performance of key metrics.


Annual individual performance goals were established for each NEO, the Bank, providing leadershipnature of which differed depending upon the NEO’s job responsibilities. The individual performance included:

i.for Mr. Meilstrup, setting, refining and motivation to achieve Board approved goalsexecuting the strategic direction of LCNB; hiring and objectives. Bedeveloping the senior management team and building a spokesperson forclient-focused culture; and promoting LCNB externally to shareholders, customers, employees,stock analysts and the media.  Ensure the integritypotential acquisition targets;
ii.for Mr. Haines, developing robust financial reporting, branch profitability, line of corporate recordsbusiness profitability and various regulatory reports while supervising compliance with all applicable lawspricing model accuracy; executing LCNB’s strategic plan, balancing acquisitions and regulations.  Ensure that proper internal controls are in placeorganic growth; and followed to protect the integritystrengthening communications among executive management, directors and investors regarding financial performance and future risks and opportunities of financial reporting. Communicate to the Board the progress toward goals and objectives, compliance issues, policy exceptions, and operational issues and risks.


Matthew P.LCNB;

iii.for Mr. Layer, – Act as the Chief Lending Officer of LCNB, supervising the Bank’s loan department to ensure compliance with all applicable laws and regulations.  Maintain high asset quality in the Bank’s loan portfolio by ensuring compliance with the Bank’s loan policy and managing any policy exceptions through the Loan Committee and the Board of Directors.  Ensure the proper maintenance and control of customer and bank records to ensure the integrity of those records.  Manage the growth of the Bank’s loan departmentportfolio to meetattain the budgeted goal while continuing to communicate those goals using individual goals, incentives, and marketing.  Participateto the lending officers; participating as a member of the Bank’s senior management team to develop directionBank’s loan committee with a goal of helping monitor asset quality and goals and to assist in communicating and supporting management’s priorities.  


Robert C. Haines II–Act as the Chief Financial Officer of LCNB, assuring the integrity and accuracy of corporate financial records and various regulatory reports.  Supervise the internal auditor, manage the relationshipcompliance with the internal and external audit firms and act as a liaison to the Board of Director’s Audit Committee.  Supervise and direct the Bank’s data processing and item processing functions. Prepare the budget and advise the executive management team and the Board of Directors on progress toward budget goals.  Support shareholder relations by acting as LCNB’s primary contact with




LCNB’s transfer agent. Participatecurrent bank regulations; participating as a member of the Bank’s executiveBank’s senior management teamteam; 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 attain the budgeted goal to develop direction and goals and to assist in communicating and supporting management’s priorities.


Leroy F. McKay – Actthe trust officers; participating as a member of the Senior Trust OfficerBank’s trust committee with a goal of LCNB, supervising the Bank’s trust department to ensurehelping monitoring compliance with all applicable lawsthe current bank regulations; participating as a member of the Bank’s senior management team; executing LCNB’s strategic plan; and regulations.  Promote growthpromoting the Bank in the trust department to ensure its future viabilitycommunities that the Bank Serves; and to continue to meet income goals.  Supervise

v.for Mr. Ruppert, supervise and maximize the return on the security portfolios of the holding company, the Bank, and the trust department. Encourage and supervise the Bank’s brokerage operation. Chair the Bank’s Privacy Committee and lead initiatives aimed at protecting customer information and complying with applicable laws and regulations. Chair the Bank’s CRA Committee and guide the committee in maintaining an outstanding or satisfactory rating.  Participatedepartment; participating as a member of the Bank’s executive management team to develop directionBank’s trust committee with a goal of helping monitoring compliance with the current bank regulations; encourage and goals and to assist in communicating and supporting management’s priorities.


Eric J. Meilstrup – Actsupervise the Bank’s brokerage operation; support shareholder relations by acting as Chief Operations Officerone of LCNB, supervising the Bank’s daily operations including hiring, training, and scheduling of employees; the security of all offices, maintenance and control of customer and bank records to insure the integrity of those records; compliance of all applicable laws and regulations; the maintenance of all bank properties. Manage growth of customer deposit base to meet budgeted goals using individual goals, incentives, and marketing. ParticipateLCNB’s primary contacts with LCNB’s transfer agent; participate as a member of the Bank’sBank’s senior management team to develop directionteam; executing LCNB’s strategic plan and goals and to assist in communicating and supporting management’s priorities.


Michael R. Miller – Act aspromoting the Senior Trust Officer of LCNB, supervising the Bank’s trust department to ensure compliance with all applicable laws and regulations.  Promote growth in the trust department to ensure its future viability and to continue to meet income goals.  Supervise and maximize the return on the security portfolios of the holding company,communities that the Bank andserves.



Achievement For 2020

For 2020, the trust department. Encourage and supervise the Bank’s brokerage operation. Participate asAdjusted Return on Average Assets was 1.18%, earning a member of the Bank’s executive management team to develop direction and goals and to assist in communicating and supporting management’s priorities.


Bradley A Ruppert – Act as Chief Investment Officer of LCNB, overseeing the Bank’s investment strategy.  Work with the Executive Committee to ensure that the Bank’s Investment Portfolio is optimized with the respect to current liquidity, earnings, and risk targets established by the Board of Directors.  Provide oversight to the investment strategy7.0% cash incentive for the Bank’s Trust Department.  Oversee the research and allocation targets for the department and serves as Portfolio Manager for numerous client relationships. Serve as Chair of the Investment Services Committee and provide oversight of the Investment Services Division to ensure that the department adheres to all rules, regulations, and internal policies.  As Co-Chair of the CRA Committee, ensure the Bank stays in compliance with the Community Reinvestment Act and remains focused on reinvesting into the communities it services.


Incentive Compensation


In addition to the payment of base salary and the provision of standard employee benefits, the Bank’s compensation programs provides executive officers the opportunity to earn additional compensation in the form of annual cash bonus incentives and equity incentives.


Annual Cash Bonus Incentives


The 2017 cash bonus program for executive officers was based primarily on the performance of the Company and the performance of the executive officer in meeting assigned goals for both the




Company and the officer personally.  For named executive officers as well as employees of the Bank generally, the Compensation Committee believes that it is important to create an incentive to focus on the profitability and growth of the Company.  As such, the majority of cash bonuses paid to all employees of the Company are based on the Company’s performance.  However, realizing that individual performance is not always fully recognizable solely in the Company’s performance, the executive officers are also eligible for small cash bonuses based on the achievement of the goals detailed underPerformance Objectivesthat are communicated at the beginning of each year toNEO. Additionally, each executive and are unique to each executive officer’s responsibilities.


In2017, each named executive officer was eligible to receive a cash bonus based partially on the Company’s performance for 2017 as measured by the core return on average assets (ROAA).  Each named executive officer was eligible to receive a cash bonus ranging from 1.50%of that officer’s base salary in the event that the Company’s core ROAA was below 0.75% and up to 14.00% of that officer’s base salary in the event that the Company’s core ROAA was 1.50% and above.  In 2017, the Company’s Core ROAA was 0.99%, and so the portion of the cash bonus dependent on the Company’s performance received by the named executive officers was 3.5% of their annual base salary.


The table below sets forth the potential bonus amounts tied to ROAA for 2017.


Range of

Company’s Core

Return on

Average Assets

Cash Bonus as a

Percentage of the Named

Executive Officer’s Base

Salary in 2017

1.5% and above

14.0%

1.45-1.49%

13.0%

1.40-1.44%

12.0%

1.35-1.39%

11.0%

1.30-1.34%

10.0%

1.25-1.29%

9.0%

1.20-1.24%

8.0%

1.15-1.19%

7.0%

1.10-1.14%

6.5%

1.05-1.09%

6.0%

1.00-1.04%

5.5%

.95-.99%

3.5%

.90-.94%

3.0%

.85-.89%

2.5%

.80-.84%

2.0%

.75-.79%

1.5%

Below .75%

1.5%



The other portion of each named executive officer’s cash bonus was awarded based on the achievement of that individual’s subjective performance objectives.  In 2017, each named executive officer could earn up toNEO earned an additional 6.0% of his base salarycash incentive for meeting his achieving their

28

individual performance objectives. This additional 6.0% of base salary is intended to encourage personal achievement ofgoals. In total, the individualized performance objectives.  Historically, LCNB focused its annual cash bonus/incentive amounts entirely on Company performance.  However, in recent years (including 2017) the Company has also utilized personal performance objectives. This small modification was made to encourage balance in




the annual cash incentive plan design.  Additionally, LCNB determined in recent years that market influences made it appropriate to pay a minimal bonus for ROAA amounts below 1.0%.  This shiftaward earned by each NEO was based on the external reality in community banking that has impacted profitability capabilities.


Based on the 2017 Company ROAA results, the largest cash bonus that a named executive officer would have been able to achieve in 2017 was 9.5% of his annual base salary.  The Company believes that it has set the sliding scale for cash bonus compensation so that modest bonuses are achievable by the named executive officers based on adequate performance of the Company and the individual named executive officers. However, significantly larger bonuses will only be achieved by exceptional performance both by the Company and by an individual named executive officer.  The Company believes that a maximum cash bonus/incentive award opportunity level of 20%13.0% of salary for the named executive officers is relatively modest when compared to market data.

representing above targeted performance.


The Company continues to implement a “Clawback” provision with respect to the 2017 cash bonus plan.  This “Clawback” allows the Company to recoup incentive compensation amounts paid to employees if these amounts were paid based on misstated financials, or if the employee commits significant misconduct.


Equity Incentives


At the 2015 Annual Meeting,annual meeting of shareholders, the Company’sCompany’s shareholders voted to approve the 2015 Ownership Incentive Plan (the “2015 Plan”“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”Company’s “Clawback” policy as it may be amended from time to time. During fiscal year 2017, 4,0272020, 13,102 equity awards were granted to NEOs under the 2015 Plan.


Option Awards Under the 2002 Plan


The Company established an equity incentive plan in 2002 that allowed for stock options to be awarded to executive officers based on a performance matrix. The plan expired in 2012.  Therefore, no option awards have been granted since that time. The options previously awarded vest according to the following schedule on each anniversary of the Grant Date:


Years after the Grant Date

Vested Percentage



Less than 1

0%

At least 1 but less than 2

20%

At least 2 but less than 3

40%

At least 3 but less than 4

60%

At least 4 but less than 5

80%

At least 5 but no more than 10

100%


Any options which are vested and not exercised within 10 years from the date of the grant shall be deemed expired and no longer exercisable by the eligible person.


Other Compensation


The Company also provides other compensation to the named executive officers as it determines is necessary or advisable.  Mr. Foster, President and Chief Executive Officer, receives an allowance for an




automobile and the named executive officers all receive payments for health insurance and long-term disability, as the Compensation Committee has decided that such small perquisites aid in the retention of the named executive officers.


Further, the Company maintains a Supplemental Income Plan for its former Chief Executive officer, Mr. Wilson. This plan was entered into in 1996, and provides that Mr. Wilson shall receive certain benefits upon his reaching 65 years of age, or a change in control of the Company.  The Company adopted the plan in order to create an additional incentive for Mr. Wilson to continue his service with the Company as its Chief Executive Officer and to provide Mr. Wilson with added security for his retirement or in the case that the Company was sold.  The Company is currently making payments under this plan.  


In addition, the Bank has a nonqualified deferred compensation benefit plan which permits named executive officers to defer all or a portion of their cash bonus, as well as certain defined benefit plans, as further detailed below.


Analysis of Total Mix of Compensation


The Board of Directors feels that the combination of making cash bonus payments based upon specific goals for each named executive officer and separate bonus payments tied to earnings goals for the Company provides the necessary incentives to reach the Company’s objectives. The cash bonus payments and the base salary together can provide the named executive officers a compensation package that is competitive with peers in the financial industry.  Additionally, the 2015 Plan provides the Company with the ability to better balance executive compensation between short-term components (base salary and annual cash bonus incentives) and longer-term components (equity incentives).  


2018 Executive Compensation


On February 12, 2018 the Compensation Committee recommended to the Board of Directors new performance measures under the annual cash bonus program. This program is designed to reward executive officers for meeting certain goals set annually by the Committee.  Goals for 2018 include return on average assets, loan growth, deposit growth, efficiency rating, and strategic planning goals. The goals are weighted with Company performance goals accounting for 33% of the short-term cash incentive and individual performance goals accounting for 66% of the cash incentive. If those Company and individual performance goals are substantially met, each named executive officer can receive an award equal to 11.5% of his 2018 base salary. Substantially exceeding the Company and individual performance goals can increase the cash award to a maximum of 20% of base salary. The Company performance goals for the 2018 annual cash bonus program are:


Return on Average Assets

40%

Total Loan Growth

20%

Total Deposit Growth

5%

Efficiency Ratio

10%


The individual performance goals are weighted 25% and are tied to each named executive officer’s strategic planning goals as defined in the LCNB Strategic Plan.


The Compensation Committee also recommended to the Board of Directors the implementation of specific performance measures with respect to future equity grants under the 2015 Plan. TheIn 2020, the Board of Directors approved the use of earnings per share and total asset growth as performance measures to rewarddetermine the executive officers.




equity awards for the NEOs. Earnings per share and total asset growth will be based on the Board approved budget. The Compensation Committee established a range of awards based on the achievement of those goals. The awards are calculated using a percentage that is applied to each executive officer’sofficer’s salary to arrive at a calculated number of shares. That percentage ranges from 0% of salary to a maximum of 20% of salary for most named executive officers.NEOs. This plan will be effectiveis based on the performance measures achieved in 2018.2020. The dollar amounts that are earned will beare 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.


Equity Grants Based on Achievement For 2020

For 2020, LCNB earned an adjusted $1.55 per share and assets under management growth of over 15.9%. This translated into an equity award of 20% of base compensation for each NEO, which represented maximum performance compared to the plan.
’
s shareholders.

Other Compensation

The Company also provides other compensation to the NEOs as it determines is necessary or advisable. Each NEO receives payments for health insurance and long-term disability, as the Committee has decided that such small perquisites aid in the retention of the NEOs.

In addition, the Bank maintains a non-qualified deferred compensation benefit plan which permits NEOs to defer all or a portion of their cash bonus, as well as certain defined benefit plans, as further detailed below.

Stock Ownership Guidelines and Holding Requirements for Executive Officers

While we do not set strict targets for ownership of our stock, we strongly encourage ownership of the Company’s stock to all employees and expect our NEOs to set positive examples. All equity awards, whether in the form of restricted share awards or stock option awards, carry a vesting period. This requires the executive’s continued employment to fully realize value from such awards, and most equity awards have a 5-year vesting schedule.




29

Clawback

The Company continues to utilize a “Clawback” provision with respect to the 2020 cash incentive plan and equity awards granted under the 2015 Plan. This “Clawback” allows the Company to recoup incentive compensation amounts paid to employees if these amounts were paid based on misstated financials, or if the employee commits significant misconduct.

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 bonus 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.

Forward Looking Statements


The information discussed in our Compensation Discussion and Analysis contains statements regarding future individual and Company performance measures, targets, and other goals. These goals are disclosed in the limited context of our executive compensation program and should not be understood to be statements of management’smanagement’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.


Executive Compensation: Compensation Tables


The following summary compensation table summarizes, for the fiscal years indicated, all annual compensation earned by or granted to the named executive officers.NEOs. The named executive officersNEOs are employees of the Bank. The Bank is a wholly-owned subsidiary of LCNB.















30

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 ($)


Steve P. Foster,

President and Chief Executive Officer


2017

2016

2015


$ 286,000

$ 271,000

$ 212,000


29,875

N/A

63,600



N/A

N/A

N/A



$ 25,956

$ 20,140

$ 18,050


     $  270,250(2)

     $  225,697

     $  202,027  


   $  23,023(3)

   $  22,715

   $  22,916  



$ 635,104

$ 539,552

$ 518,593



Robert C. Haines II,

Executive Vice President and Chief Financial Officer



2017

2016

2015



$ 147,000

$ 139,000

$ 129,000



15,334

N/A

25,800



N/A

N/A

N/A



$ 13,205

$ 12,256

$ 10,830



     $ 48,942(2)

     $ 20,073

     $   2,720 



   $ 22,302(3)

   $ 17,449

   $ 17,951  



$  246,783

$ 188,777

$ 186,301




Matthew P. Layer,

Executive Vice President





2017

2016

2015



$ 147,000

$ 139,000

$ 129,000



15,334

N/A

25,800



N/A

N/A

N/A



$ 13,205

$ 12,255

$ 10,830



     $ 130,453(2)

     $  74,614

     $  29,068  


   $  6,369(3)

   $  6,024

   $  5,999  


 $ 312,361

$ 231,893

$ 200,697



Leroy F.  McKay,(4)

Executive Vice President


2017

2016

2015



    $   85,750

$ 139,000

$ 129,000



15,334

N/A

25,800



N/A

N/A

N/A



$ 13,205

$ 12,255

$ 11,258


    $ 198,654(2)

    $ 187,530

    $  73,268  


   $  3,591(3)

   $  7,660

   $  7,636  


 $ 316,534

$ 346,445

$ 246,962



Eric J. Meilstrup,

Executive Vice President


2017

2016

2015


$ 147,000

$ 139,000

$ 129,000



15,334

N/A

25,800



N/A

N/A

N/A



$ 12,611

$ 45,793

$ 10,830



     $ 93,378(2)

     $  45,793

     $    6,198  



   $ 21,070(3)

   $ 18,151

   $ 16,176  



 $ 289,394

$ 215,199

$ 188,004


Michael R. Miller,(5)

Executive Vice President


2017



    $ 106,952



N/A



N/A



 N/A



N/A



   $ 35,871(3)



 $ 142,823





Name and Principal PositionYearSalary($)
Restricted Stock Awards ($)(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

2020
2019
2018
315,000
275,000
170,000
83,000
27,001
29,395
N/A
N/A
N/A
35,758
21,250
13,965

   266,356(2)
143,922
    2,113

   71,759(3)
54,644
27,010

769,873
521,816
242,483

Robert C. Haines II
Executive Vice President and Chief Financial Officer


2020
2019
2018
211,000
200,000
170,000
36,000
27,001
29,395
N/A
N/A
N/A
26,004
21,250
13,965

 135,536(2)
85,574
   2,701

   32,326(3)
22,387
20,898

440,866
356,213
236,959

Matthew P. Layer
Executive Vice President



2020
2019
2018
211,000
200,000
170,000

36,000
27,001
29,395
N/A
N/A
N/A

26,006
21,250
13,965

  304,461(2)
205,434
  30,995

   9,341(3)
6,846
6,947

586,808
460,531
251,302

Michael R. Miller
Executive Vice President and Trust Officer

2020
2019
2018
211,000
200,000
170,000
36,000
27,001
29,395

N/A
N/A
N/A
26,001
21,250
10,160

       2,382(2)
      943
     186

   16,359(3)
14,262
15,755

291,742
263,456
225,496

Bradley A. Ruppert
Executive Vice President, Trust Officer, Chief Investment Officer

2020
2019
2018
193,000
175,500
123,000
32,040
21,442
29,395
N/A
N/A
N/A
22,816
16,625
10,094

    61,292 (2)
34,053
  2,701

    25,610 (3)
16,844
14,896

334,758
264,464
180,081

(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”“Stock-Based Compensation” located on pages [89-91]of LCNB’sin LCNB’s Annual
Report in Form 10-K for the year ended December 31, 2017.

2020.

(2)

Includes above market interest paid on the non-qualified deferred compensation plan as follows: Mr. Foster, $42,816;

Meilstrup, $10,528; Mr. Haines, $2,265;$5,060; Mr. Layer, $6,360;$13,665; Mr. McKay, $10,337; Mr. Meilstrup, $4,711;Miller, $2,382; and Mr. Miller, $0.Ruppert, $563. The
above market interest rate is calculated by subtracting 120% of the federal long-term rate (2.64%(1.58%) from the
rate paid by the Bank on the deferred compensation funds (currently 8%). The resulting difference of 4.83% 6.10%
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’sofficer’s accumulated benefit under the Bank’s
Bank’s defined benefit plan as follows: Mr. Foster, $80,515;Meilstrup, $255,828; Mr. Haines, $46,667;$130,476; Mr. Layer, $124,093;
$290,796; Mr. McKay, $188,317; Mr. Meilstrup, $88,667; and Mr. Miller $0. Also includes the change in aggregate increase in the actuarial present value of the officerRuppert $60,729.
’s accumulated benefit under the Bank’s Non-Qualified benefit plan as follows: Mr. Foster, $146,919.  

(3)

Includes Bank director fees for: Mr. Foster, $14.000.  Meilstrup,$33,000.Includes health and long-term disability payments

as follows: Mr. Foster, $6,869; Meilstrup, $14,812;Mr. Haines, $8,115;$14,232; Mr. Layer, $6,369; $9,341;Mr. McKay, $3,591; Mr. Meilstrup $10,428;Miller $10,806; and Mr. Miller $7,276.
Ruppert, $9,585. Includes auto allowance for Mr. FosterMeilstrup of $2,154.$5,237. Includes 401(k) contributions for Mr.
Meilstrup of $18,709; Mr. Haines of $14.167; Mr. Meilstrup of $10,642; and$18,094; Mr. Miller of $3,595. Includes a referral fee for$5,553 and Mr. Haines of $20. Includes a signing Bonus for Mr. Miller of $25,000.

(4)

Mr. McKay retired from his role as Executive Vice President and Trust Officer on July 31, 2017.

(5)

Mr. Miller became Executive Vice President and Trust Department Head of LCNB and the Bank on April 10, 2017. Prior to joining LCNB and the Bank, he held various Trust Officer roles at other financial institutions, most recently as a Vice President and Senior Trust Officer.

Ruppert, $16,025.


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’sgrantee’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’sgrantee’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.





31

Pay Ratio Disclosure


Mr. Foster

Eric J. Meilstrup, LCNB’s CEO, had an annual total compensation of $635,104$769,873 in 2017,2020, as reflected in the Summary Compensation Table included in this Proxy Statement.above. We estimate that the median annual compensation for all LCNB employees, excluding our CEO, was $43,897$40,692 for 2017.2020. Taking this into account, we estimate that Mr. Foster’sMeilstrup’s annual total compensation was approximately 14.518.92 times that of the median annual compensation for all employees.


Plan-Based Awards


The following table summarizes for fiscal year 20172020 each grant of an award under the Company’sCompany’s non-equity incentive plan and equity incentive plan to the named executive officers.  During fiscal year 2017, no equity awards were granted under equity incentive plans.

NEOs.





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

(#)


(#)


($)

Steve P. Foster

1/20/17


27,100

$54,200






Robert C. Haines II

1/20/17


13,900

$27,800






Matthew P. Layer

1/20/17


13,900

$27,800






Leroy F. McKay

1/20/17


13,900

$27,800






Eric J. Meilstrup

1/20/17


13,900

$27,800






Steve P. Foster

2/27/17







1,319

29,810

Robert C. Haines II

2/27/17







677

15,290

Matthew P. Layer

2/27/17







677

15,290

Eric J. Meilstrup

2/27/17







677

15,290

Leroy F. McKay

2/27/17







677

15,290


NameGrant 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 unitGrant Date Fair Value of Stock Awards
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)

(#)

($)
Eric J. Meilstrup1/24/2039,37563,000
2/18/204,80181,000
Robert C. Haines II1/24/2026,37542,200
2/18/202,13436,000
Matthew P. Layer1/24/2026,37542,200
2/18/202,13436,000
Michael R. Miller1/24/2026,37542,200
2/18/202,13436,000
Bradley A. Ruppert1/24/2024,12538,600
2/18/201,89932,040

(1)

Although the Estimated Future Payouts are provided in the table, the awards were granted in 20172020 and are     

disclosed in the “Summary“Summary Compensation Table.”
”


All employees, including the named executive officers, participate in a Non-Equity Incentive Plan.  This plan rewards employees based on the financial performance of the Company as described in the Compensation Discussion and Analysis.  The estimated future payouts for the named executive officers in the above table are calculated using the ROAA scale established by the Compensation Committee and approved by the Board.  Each named executive officer was eligible to receive a cash bonus ranging from 1.50%of that officer

’
s base salary in the event that the Company
’
s core ROAA was below .75% and 14.00% of that officer
’
s base salary in the event that the Company
’
s core ROAA was 1.5% and above. The appropriate percentage is multiplied by the officer
’
s base salary to determine the cash award.










32

Outstanding Equity Awards


The following table summarizes, as of the end of fiscal year 20172020 for each of the named executive officers,NEOs, information concerning unexercised options and unvested stock and equity incentive plan awards.


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 (#)(7)

(1)

Market Value

of Shares or

Units of Stock

that have not

Vested ($)(10)

(6)

Steve P. Foster

Eric J. Meilstrup

2,631(1)

3,889(2)

3,130(3)

3,824(4)

2,639(5)

N/A

0

0

0

0

0

N/A

$12.55

$  9.00

$11.50

$11.85

$12.60

02/19/18

01/26/19

02/21/20

02/14/21

02/13/22

271(2)
919(3)
1,274(4)
4,801(5)





2,467(8)

1,319(9)

$3,978
$13,494
$18,721
$70,527





$50,450

$26,974











-

-

Robert C. Haines II(6)

N/A

0(2)

0(3)

0(4)

0(5)

N/A

0

0

0

0

$12.55

$  9.00

$11.50

$11.85

$12.60

N/A

02/19/18

01/26/19

02/21/20

02/14/21

02/13/22

N/A

271(2)
919(3)
1,274(4)
2,134(5)







1,001(8)

677(9)








$20,470

3,978

$13,845

13,494
$18,721
$31,348

Matthew P. Layer(6)

N/A

467(2)

743(3)

1,400(4)

1,231(5)

N/A

0

0

0

0

$12.55

$  9.00

$11.50

$11.85

$12.60

N/A

02/19/18

01/26/19

02/21/20

02/14/21

02/13/22

N/A

271(2)
919(3)
1,274(4)
2,134(5)





1,001(8)

677(9)






$20,470

3,978

$13,845

13,494
$18,721
$31,348

Leroy F. McKay(6)

N/A

0(2)

0(3)

0(4)

0(5)

N/A

0

0

0

0

$12.55

$  9.00

$11.50

$11.85

$12.60

02/19/18

01/26/19

02/21/20

02/14/21

02/13/22






0(8)

0(9)






$0

$0

Eric J. Meilstrup(6)

0(1)

0(2)

0(3)

0(4)

311(5)

0

0

0

0

0

$12.55

$  9.00

$11.50

$11.85

$12.60

02/19/18

01/26/19

02/21/20

02/14/21

02/13/22






1,001(8)

677(9)






$20,470

$13,845

Michael R. Miller

N/A

N/A

N/A

N/A

919(3)
1,274(4)
2,134(5)

$13,494
$18,721
$31,348
Bradley A. RuppertN/A

N/A

N/AN/A
919(3)
1,012(4)
1,899(5)

$13,494
$14,866
$27,896


(1)

Vested 20% in 2009, 20% in 2010, 20% in 2011, 20% in 2012, and 20% in 2013.

(2)

Vested 20% in 2010, 20% in 2011, 20% in 2012, 20% in 2013, and 20% in 2014.

(3)

Vested 20% in 2011, 20% in 2012, 20% in 2013, 20% in 2014, and 20% in 2015.

(4)

Vested 20% in 2012, 20% in 2013, 20% in 2014, 20% in 2015, and 20% in 2016.

(5)

Vested 20% in 2013, 20% in 2014, 20% in 2015, 20% in 2016, and 20% in 2017.

(6)

Mr. Haines, Mr. McKay, and Mr. Layer were not eligible to participate in the Equity Incentive Plan until 2008.

(7)

Represents the number of restricted share awards that have not vested as of December 31, 2017.

(8)

Represents restricted shares awarded by the Board of Directors on December 28, 2015 pursuant to the Plan.

The restricted shares vest annually in five equal installments beginning on December 28, 2016.

(9)

2020.

(2)    Represents restricted shares awarded by the Board of Directors on February 27, 2017 pursuant to the Plan.

The restricted shares vest annually in five equal installments beginning on February 27, 2018.

(10)

(3)    Represents restricted shares awarded by the Board of Directors on February 12, 2018 pursuant to the Plan.
The restricted shares vest annually in five equal installments beginning on February 12, 2019.
(4)    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 19, 2020.
(5)    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.
(6)    Represents the value of the unvested restricted stock awards based on the Company’sCompany’s closing stock price on
December 29, 201731, 2020 of $20.45

$14.69.




33

Option Exercises and Stock Vested


The following table summarizes for fiscal year 20172020 all exercises of options and vesting of stock awards for each of the CompanyNEOs.
’
s named executive officers.


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 ($)

Steve P. Foster

1,510

6,372

822

16,851

Option AwardsStock Awards
Name
Number of
Shares
Acquired on
Exercise (#)
Value Realized
on Exercise ($)
Number of Shares
Acquired on
Vesting (#)
Value Realized
on Vesting ($)
Eric J. MeilstrupN/AN/A1,09417,881
Robert C. Haines IIN/AN/A1,09417,881
Matthew P. LayerN/AN/A1,09417,881
Michael R. MillerN/AN/A62510,696
Bradley A. RuppertN/AN/A5599,573










-

-

Robert C. Haines II

N/A

3,149

334

6,839

Matthew P. Layer

N/A

N/A

334

6,839

Leroy F. McKay

N/A

16,130

334

6,839

Eric J. Meilstrup

N/A

N/A

334

6,839

Michael R. Miller

N/A

N/A

N/A

N/A


Defined Benefit Plan Disclosure


In 1954, the Bank adopted the LCNB National Bank Employees Pension Plan (the “Pension Plan”“Pension Plan”) a defined benefit plan. Employees hired on or after January 1, 2009 are not eligible to participate in the Pension Plan, however, some employees that were hired before that date continue to participate in the Pension Plan. Effective February 1, 2009, employees whose age plus vesting service equaled 55 to 64 will receive a monthly retirement benefit equal to 40% of the participant’sparticipant’s average monthly compensation. Employees whose age plus vesting service equaled less than 55 will receive a monthly retirement benefit equal to 30% of the participant’sparticipant’s average monthly compensation. A participant’sparticipant’s average monthly compensation is based on the five consecutive years of a participant’sparticipant’s employment with the Bank that produce the highest monthly average. Benefits are not reduced by Social Security payments or by payments from other sources and are payable in the form of a life annuity (ten years certain).


All employees that are not eligible for the defined benefit plan are eligible to participate in the company’sCompany’s enhanced 401(k) plan. Employees receive a 50% employer match on their contributions into their 401(k) plans, up to a maximum LCNB contribution of 3% of each individual employee’semployee’s annual compensation.


Certain former highly compensated employees are eligible to participate in a nonqualified defined benefit retirement plan. The nonqualified plan ensures that participants receive the full amount of benefits to which they would have been entitled under the noncontributory defined benefit retirement plan in the absence of limits on benefit levels imposed by certain sections of the Internal Revenue Code.


The following table summarizes, as of the end of fiscal year 20172020 for each of the Company’s named executive officers,NEOs, information concerning each plan that provides for payments or other benefits at, following, or in connection with retirement.









34

PENSION BENEFITS


Name

Plan Name

Number of Years

Credited Service (#)

Present Value of

Accumulated

Benefits ($)

Payments During

Last Fiscal Year ($)

Steve P. Foster

Defined Benefit Plan

Non-Qualified Plan

40

40

1,829,912

1,003,500

None

None

Robert C. Haines II

Defined Benefit Plan

23

139,245

None

Matthew P. Layer

Defined Benefit Plan

36

543,127

None

Leroy F. McKay

Defined Benefit Plan

22

1,024,924

None

Eric J. Meilstrup

Defined Benefit Plan

27

288,638

None

Michael R. Miller

N/A

N/A

N/A

None

NamePlan NameNumber of Years
Credited Service (#)		Present Value of
Accumulated
Benefits ($)		Payments During
Last Fiscal Year ($)
Eric J. MeilstrupDefined Benefit Plan30680,284None
Robert C. Haines IIDefined Benefit Plan26352,497None
Matthew P. LayerDefined Benefit Plan391,057,628None
Michael R. MillerN/AN/AN/ANone
Bradley A. RuppertDefined Benefit Plan12136,129None




The Defined Benefit Plan’sPlan’s actuarial assumptions used in 20172020 included a discount rate of 3.60%2.52%, an expected long-term rate of return for Plan assets of 3.60%2.52% and a future compensation rate increase of 3.0%. 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 2017,2020, for each of the Company’s named executive officers,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


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 ($)

Steve P. Foster

25,956

None

71,731

None

934,485

Robert C. Haines II

6,603

None

3,786

None

49,684

Matthew P. Layer

11,224

None

10,658

None

139,243

Leroy F. McKay

13,205

None

19,712

None

257,132

Eric J. Meilstrup

6,306

None

7,893

None

103,012

Michael R. Miller

N/A

None

N/A

None

N/A

-

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. Meilstrup28,606None13,965None183,054
Robert C. Haines II2,600None6,709None87,212
Matthew P. Layer22,105None18,122None236,553
Michael R. Miller18,201None3,163None42,218
Bradley A. Ruppert17,112None2,280None30,706


(1)

The executive officers’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-QualifiedNon-

Qualified Deferred Compensation Earnings because the Bank is paying an above market rate on the aggregate
balances that the Executive OfficersNEOs have deferred. Those amounts for each officerNEO are: Mr. Foster, $42,816;Meilstrup, $10,528; Mr.
Haines, $2,265;$5,060; Mr. Layer, $6,360;$13,665; Mr. McKay, $10,337;Miller, $2,382 and Mr. Meilstrup, $4,711.

Ruppert, $563.


The Bank has a benefit plan which permits named executive officersNEOs 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.


Termination and Change in Control Payments


The Company does not have employment agreements with its named executive officers. Therefore, these officersNEOs. All NEOs are employees at will and a termination of these named executive officersany of the NEOs as of December 31, 20172020 would not have triggered any
35

payment obligations of the Company under their employment arrangements. However, under some of the Company’sCompany’s other benefit plans, the named executive officersNEOs would have been entitled to receive payments if a termination or change in control happened on December 31, 2017.

2020.


The 2015 Ownership Incentive Plan (the “2015 Plan”) and the 2002 Plan each contain a double-trigger change of control clause that accelerates vesting upon a change of control as follows: the period beginning three months prior to the effective date of any change of control of the Company and ending on the first anniversary of such a change of control, one hundred percent of the ownership incentives granted which have been outstanding for at least six months shall vest and be exercisable by the holder in the event that (a) the holder’sholder’s status as an employee is involuntarily terminated by the Company for any reason other




than cause, or (b) the holder voluntarily terminates his status as an employee as the result of a material reduction in the option holder’sholder’s duties, title, or compensation from the Company. Thus, if there was a change in control on December 31, 20172020 and the named executive officersNEOs were terminated or experienced material reductions in their duties, all of the ownership incentives held by the named executive officersNEOs for longer than six months would vest.


Upon such events, the named executive officersNEOs would have the following amount of restricted shares vest under the 2015 Ownership Incentive Plan:


Steve P. Foster

Eric J. Meilstrup

3,786

7,265

Robert C. Haines II

1,678

4,598

Matthew P. Layer

1,678

4,598

Leroy F. McKay

0

Eric J. Meilstrup

1,678

Michael R. Miller

0


Upon such events, the named executive officers would have options convertible into the following amount of the Company’s Common Shares vest under the 2002 Plan:


4,327

Steve P. Foster

Bradley A. Ruppert

16,133

Robert C. Haines II

0

Matthew P. Layer

3,841

Leroy F. McKay

0

Eric J. Meilstrup

311

Michael R. Miller

0

3,830


The Deferred Compensation Plan provides that in the event of any termination of a named executive officer,NEO, or a change in control of the Company, the named executive officersNEOs affected by the termination or change in control are entitled to receive the entire amount of the deferred compensation in their account as of the next valuation date after such event. The named executive officerNEO may elect whether to receive the deferred compensation in one lump sum, or in annual payments over ten years. In the event that each of the named executive officersNEOs experienced a termination event onDecemberonDecember 31, 2017,2020, each would be entitled to receive the following amounts under the Deferred Compensation Plan:


Steve P. Foster

Eric J. Meilstrup

$934,485

183,054

Robert C. Haines II

$49,684

87,212

Matthew P. Layer

$139,243

236,553

Leroy F. McKay(1)

$0

Eric J. Meilstrup

$103,012

Michael R. Miller

$0

42,218
Bradley A. Ruppert$30,706

(1)

Mr. McKay retired on July 31, 2017 and therefore was not eligible to receive a lump sum payment under the circumstances described above on December 31, 2017.


36

For the purposes of the Deferred Compensation Plan, a change in control would be deemed to have occurred if:


•

a person or group obtained control of 50% of the CompanyCompany’s stock,

’•s stock,

•

a person or group acquires 35% of the Company’sCompany’s stock within a 12 month period,




•

a majority of the members of the Board of Directors are replaced within a 12 month period without the endorsement of a majority of the members of the board, or

•

any person or group acquires assets from the Company worth at least 40% of the fair market value of all of the assets of the Company.


For purposes of the 2015 Ownership Incentive Plan, a change in control would be deemed to have occurred if:


•

a person or group acquires ownership of the Company’sCompany’s shares representing more than 50% of total fair market value or total voting power,

•

a majority of the members of the Board of Directors are replaced without their approval, or

•

one person or group acquires assets representing 50% or more of the total gross fair market value of all the assets of the Company.


For purposes of the 2002 Plan, a change in control would be deemed to have occurred if:


•

a person or group obtained control of 50% of the Company’sCompany’s stock, or

•

a merger or sale of substantially all of the assets, reorganization, or the a majority of the members of the Board of Directors are replaced, without the approval of the Board of Directors.


Compensation Committee Report on Executive Compensation


The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis contained in this Proxy Statement with management of the Company and, based on that review and those discussions, has recommended its inclusion in the Company’sCompany’s annual report on Form 10-K and in this Proxy Statement.


The Compensation Committee of LCNB National Bank is comprised of the following persons:


Spencer SS. Cropper

John H. Kochensparger III

George L. Leasure      

Valerie S. Krueckeberg

Anne E. Krehbiel


Mary E. Bradford
Craig M. JohnsonMichael J. Johrendt


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The independent registered public accounting firm selected by the Audit Committee for the previousfiscal year 20172020 was BKD, LLP. A representative of BKD, LLP will be present at the Annual Shareholders Meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.


Audit Fees


The aggregate fees billed by BKD, LLP for professional services rendered for the annual audit of the Company’sCompany’s annual financial statements, the audit of the internal control over financial reporting and the reviews of the unaudited interim consolidated financial statements included in the CompanyCompany’s
37
’
s
Quarterly Reports on Form 10-Q were $187,928$266,656 for fiscal year 20172020 and were $175,400$332,597 for fiscal year 2016.

2019.





Audit-Related Fees


The aggregate fees billed by BKD, LLP for assurance and related services that are reasonably related to the performance of the audit of the Company’sCompany’s financial statements and not reported under the paragraph immediately above entitled “Audit Fees”“Audit Fees” were $51,000zero for fiscal year 2017years 2020 and $4,800 for fiscal year 2016.  Audit-related fees in 2017 and 2016 consisted of accounting consultation and other matters.

2019.


Tax Fees


The aggregate

There were no fees billed by BKD, LLP for fiscal year 20172020 or 2019 for professional services rendered for tax services, including any tax compliance, tax advice, andor tax planning, were $13,200.  Tax fees consisted of Federal, state and local income and franchise tax return preparation, tax planning and assistance with a tax examination in fiscal year 2017.  The aggregate fees billed by BKD, LLP for fiscal year 2016 were $11,000.

planning.


All Other Fees


There were no other fees of BKD, LLP not included in “Audit“Audit Fee,” “Audit-Related Fees”“Audit-Related Fees” or “Tax Fees”“Tax Fees” for the two most recent fiscal years.


As required by the Sarbanes-Oxley Act of 2002, the Audit Committee is responsible for the approval of all audit and permitted non-audit services performed by the independent public accountants for the Company. The entire Audit Committee determines whether to approve such services and, therefore, no other pre-approval policies or procedures are currently in place. The Audit Committee approved 100% of the audit and permitted non-auditNo such services performed by BKD, LLP.  The Audit Committee has considered and ultimately determined that the provision of any of the non-audit or other serviceswere provided by BKD, LLP in fiscal years 2020 or 2019.

INFORMATION ABOUT THE 2021 VIRTUAL ANNUAL MEETING

The annual meeting will be held virtually via the Internet for the safety of our directors, employees and shareholders in light of the COVID-19 pandemic. We are excited to embrace the latest technology for this year’s meeting.

Shareholders as of March 1, 2021, the record date, may attend, vote and submit questions virtually at our annual meeting by logging in at www.meetingcenter.io/234404521. To login to the Companyannual meeting, you will be required to have a control number and password. The password for the meeting is compatible“LCNB2021”. For registered shareholders, the control number can be found on your proxy card or notice, or email you previously received. If you were a shareholder as of the close of business on the record date and have your control number, you may vote during the annual meeting by following the instructions available on the meeting website during the meeting.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the virtual annual meeting. To register, shareholders must submit the email from their broker and proof of their proxy power (legal proxy) reflecting their LCNB holdings, along with maintaining BKD, LLPtheir name and email address, to Computershare at legalproxy@computershare.com. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on April 16, 2021. You will receive a confirmation email from Computershare of your registration.
’
s independence.

Shareholders as of the record date who attend and participate in our virtual annual meeting will have an opportunity to submit questions live via the Internet during a designated portion of the meeting. Shareholders must have available their control number provided on their proxy card or notice.

38

If you are not a shareholder or do not have a control number, you may still access the meeting as a guest, but you will not be able to vote or submit questions.

If you experience any technical difficulties accessing the annual meeting or during the meeting, please call the toll-free number that will be available on our virtual shareholder login site (at www. meetingcenter.io/234404521) for assistance. We will have technicians ready to assist you with any technical difficulties you may have beginning 15 minutes prior to the start of the annual meeting.

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS


Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting To Be Held on April 24, 2018.20, 2021. The proxy statement and annual report to security holders are available at http://www.lcnbcorp.com.


The proxy statement, annual report to security holders and form of proxy are being made publicly available, free of charge, on the aforementioned website, which will remain available through the conclusion of the Annual Meeting of Shareholders to be held on April 24, 201820, 2021 at 10:00 a.m. at the Operations Building of LCNB Corp. at 105 North Broadway, Lebanon, Ohio 45036.  If you need directions to the location of the annual meeting in order to attend the meeting and vote in person, please call 1-800-344-2265.  

EDT.


2019

2022 ANNUAL MEETING


In order for any shareholder proposals for the 20182022 annual meeting of shareholders to be eligible for inclusion in the Company’sCompany’s proxy statement relating to that meeting to be presented for shareholder action at that meeting, they must be received by the Secretary of the Company at P.O. Box 59, Lebanon,




Ohio 45036, prior to November 10, 2018.6, 2021. The form of proxy distributed by the Company with respect to the 20182022 annual meeting of shareholders may include discretionary authority to vote on any matter which is presented to the shareholders at the meeting (other than management) if the Company does not receive notice of that matter at the above address prior to January 24, 2019.

20, 2022.


OTHER MATTERS


The Board of Directors does not know of any other business to be presented at the meeting and does not intend to bring other matters before the meeting. However, if other matters properly come before the meeting, it is intended that the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company.


By Order of the Board of Directors

Directors:



/s/Steve P. Foster                                   

Steve P. Foster

Eric J. Meilstrup

Eric J. Meilstrup
President & Chief Executive Officer



39


REVOCABLE PROXY

LCNB CORP.


[]PLEASE MARK VOTES

AS IN THIS EXAMPLE


ANNUAL MEETING OF SHAREHOLDERS

April 24, 2018

20, 2021


1. Proposal 1. Election of Directors.Directors. The nominees for the Class I Directors to serve a three-year term and until their successors are elected and qualified are:


FOR



[ ]

WITH-


HOLD


[ ]

FOR ALL


EXCEPT


[ ]

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.




Class I – Spencer S. Cropper
Class I – Eric J. Meilstrup
Class I – Stephen P. Wilson

Class I

–
 Spencer S. Cropper

Class I – John H. Kochensparger III


INSTRUCTION: To withhold authority to vote for any individual nominee, mark “For“For All Except”Except” and write that nominee’snominee’s name in the space provided below.below


 ________________________________________________________


The undersigned hereby appoints Joseph W. Schwarz, Kathleen Porter Stolle and Bernard H. Wright, Jr., and each of them, with full power of substitutions, as proxies to vote, as designated below, for and in the name of the undersigned all shares of stock of LCNB Corp. which the undersigned is entitled to vote at the virtual annual meeting of the shareholders of said Company scheduled to be held at 10:00 a.m. EDT on April 24, 2018 at 105 North Broadway, Lebanon, Ohio20, 2021, or at any adjournments or recesses thereof.

2. Proposal 2. Advisory vote approving the compensation of our named executive officers.
FOR

[ ]
AGAINST

[ ]
ABSTAIN

[ ]
Please mark X in the appropriate box. The Board of Directors recommends a FOR vote for each of proposalsthe Directors in Proposal 1 and 2.

a FOR vote for Proposal 2 and Proposal 3.




2.

3. Proposal 2.3. To ratify the appointment of BKD, LLP as the independent registered accounting firm for the company.


FOR


[ ]

AGAINST


[ ]

ABSTAIN


[ ]



3.

4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof.

thereof


This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR the election of Directors and the ratification of the accountants.

accountants


ALL FORMER PROXIES ARE HEREBY REVOKED


























Please be sure to sign and date

Date

this Proxy in the box below

_______________________


Shareholder sign above

Co-holder (if any) sign above







Detach above card, sign, date and mail in postage paid envelope provided.

LCNB CORP.

P.O. Box 59, Lebanon, Ohio  45036


(Please sign exactly as your name appears hereon.  All joint owners should sign.  When signing in a fiduciary capacity or as a corporate officer, please give your full title as such)

Please mark, sign, date and mail this proxy in the envelope provided.


IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.













40