<PAGE>   1

                                                                      EXHIBIT 28






                          LONDON FINANCIAL CORPORATION
                               2 EAST HIGH STREET
                               LONDON, OHIO 43140
                                 (614) 852-0787

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

         Notice is hereby given that the 1997 Annual Meeting of Shareholders of
London Financial Corporation ("LFC") will be held at the office of The Citizens
Loan & Savings Company, 2 East High Street, London, Ohio 43140, on January 23,
1997, at 10:00 a.m., Eastern Time (the "Annual Meeting"), for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:

                     1.         To elect three directors of LFC for terms
                                expiring in 1999;

                     2.         To approve the London Financial Corporation 1997
                                Stock Option and Incentive Plan, a copy of which
                                is attached hereto as Exhibit A;

                     3.         To approve The Citizens Loan & Savings Company
                                Management Recognition Plan and Trust, a copy of
                                which is attached hereto as Exhibit B;

                     4.         To ratify the selection of Grant Thornton LLP as
                                the auditors of LFC for the current fiscal year;
                                and

                     5.         To transact such other business as may properly
                                come before the Annual Meeting or any
                                adjournments thereof.

         Only shareholders of LFC of record at the close of business on December
5, 1996, will be entitled to receive notice of and to vote at the Annual Meeting
and at any adjournments thereof. Whether or not you expect to attend the Annual
Meeting, we urge you to consider the accompanying Proxy Statement carefully and
to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM MAY BE ASSURED
AT THE ANNUAL MEETING. The giving of a proxy does not affect your right to vote
in person in the event you attend the Annual Meeting.

                                              By Order of the Board of Directors





                                              John J. Bodle, President


London, Ohio
December 12, 1996


<PAGE>   2


                          LONDON FINANCIAL CORPORATION
                               2 EAST HIGH STREET
                               LONDON, OHIO 43140
                                 (614) 852-0787

                                 PROXY STATEMENT

                                     PROXIES

         The enclosed Proxy is being solicited by the Board of Directors of
London Financial Corporation, an Ohio corporation ("LFC"), for use at the 1997
Annual Meeting of Shareholders of LFC to be held at the office of The Citizens
Loan & Savings Company ("Citizens"), 2 East High Street, London, Ohio 43140, on
January 23, 1997, at 10:00 a.m., Eastern Time, and at any adjournments thereof
(the "Annual Meeting"). Without affecting any vote previously taken, the Proxy
may be revoked by a shareholder by execution of a later dated proxy which is
received by LFC before the Proxy is exercised or by giving notice of revocation
to LFC in writing or in open meeting before the Proxy is exercised. Attendance
at the Annual Meeting will not, of itself, revoke a proxy.

         Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as specified thereon or, in the absence of specific
instructions to the contrary, will be voted:

                  FOR the election of Donald E. Forrest, Edward D. Goodyear and
                  Kennison A. Sims as directors of LFC for terms expiring in
                  1999;

                  FOR the approval of the London Financial Corporation 1997
                  Stock Option and Incentive Plan (the "Stock Option Plan"), a
                  copy of which is attached hereto as Exhibit A;

                  FOR the approval of The Citizens Loan & Savings Company
                  Management Recognition Plan and Trust (the "MRP"), a copy of
                  which is attached hereto as Exhibit B; and

                  FOR the ratification of the selection of Grant Thornton LLP
                  ("Grant Thornton") as the auditors of LFC for the current
                  fiscal year.

Proxies may be solicited by the directors, officers and other employees of LFC
and Citizens, in person or by telephone, telegraph or mail only for use at the
Annual Meeting. Such proxies will not be used for any other meeting. The cost of
soliciting proxies will be borne by LFC.

         Only shareholders of record as of the close of business on December 5,
1996 (the "Voting Record Date"), are entitled to vote at the Annual Meeting.
Each such shareholder will be entitled to cast one vote for each share owned.
LFC's records disclose that, as of the Voting Record Date, there were 529,000
votes entitled to be cast at the Annual Meeting.

         This Proxy Statement is first being mailed to shareholders of LFC on or
about December 20, 1996.


                                  VOTE REQUIRED

ELECTION OF DIRECTORS

         Under Ohio law and LFC's Code of Regulations (the "Regulations"), the
three nominees receiving the greatest number of votes will be elected as
directors. Shares as to which the authority to vote is withheld are not counted
toward the election of directors or toward the election of the individual
nominees specified in the enclosed Proxy. If the enclosed Proxy is signed and
dated by the shareholder, but no vote is specified thereon, the shares held by
such shareholder will be voted FOR the re-election of the three nominees.




                                      -1-
<PAGE>   3




APPROVAL OF THE STOCK OPTION PLAN AND THE MRP

         The affirmative vote of the holders of at least a majority of the
outstanding shares of LFC is necessary to approve the Stock Option Plan and the
MRP. Generally, shares which are held by a nominee for a beneficial owner and
which are represented in person or by proxy at the Annual Meeting, but not voted
with respect to such proposals ("Non-votes"), will have the same effect as a
vote against the approval of the Stock Option Plan and the MRP. If, however,
shares are represented at the Annual Meeting by a shareholder who signed and
dated a proxy in the form of the enclosed Proxy, but who did not vote on the
approval of the Stock Option Plan or the MRP by marking the appropriate block on
the Proxy, such shares will be voted FOR the adoption of the Stock Option Plan
and the MRP and will not be considered Non-votes.

RATIFICATION OF SELECTION OF AUDITORS

         The affirmative vote of the holders of a majority of the shares of LFC
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of Grant Thornton as the auditors of LFC for the current fiscal
year. Non-votes will have the same effect as a vote against the approval of such
ratification, as will abstentions. If, however, shares are represented at the
Annual Meeting by a shareholder who signed and dated a proxy in the form of the
enclosed Proxy, but who did not vote on the ratification of the selection of
Grant Thornton by marking the appropriate block on the Proxy, such shares will
be voted FOR the ratification of the selection of Grant Thornton and will not be
considered Non-votes.


   VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information with respect to the
only person known to LFC to own beneficially more than five percent of the
outstanding common shares of LFC, as of December 11, 1996:

<TABLE>
<CAPTION>
                                                    Amount and Nature of                          Percent of
 Name and Address                                   Beneficial Ownership                      Shares Outstanding
 ----------------                                   --------------------                      ------------------
<S>                                                      <C>                                         <C> 
 First Bankers Trust, N.A.
 1201 Broadway                                           42,320 (1)                                  8.0%
 Quincy, Illinois 62301
----------------------------
<FN>
(1)      Consists of shares held by First Bankers Trust, N.A., as the trustee 
         for the London Financial Corporation Employee Stock Ownership Plan.
</TABLE>


                                      -2-
<PAGE>   4



         The following table sets forth certain information with respect to the
number of common shares of LFC beneficially owned by each director of LFC and by
all directors and executive officers of LFC as a group, as of December 11, 1996:

<TABLE>
<CAPTION>
                                               Amount and Nature of                      Percent of
Name and Address (1)                         Beneficial Ownership (2)                Shares Outstanding
--------------------                         ------------------------                ------------------

<S>                                                  <C>                                    <C>  
John I. Andrix                                       19,786 (3)                             3.74%
Rodney A. Bell                                       20,286 (4)                             3.83%
John J. Bodle                                        20,187 (5)                             3.82%
Donald E. Forrest                                    19,786                                 3.74%
Edward D. Goodyear                                   19,786 (6)                             3.74%
Kennison A. Sims                                     20,000 (7)                             3.78%
All directors and executive officers
   as a group (8 people)                            100,762                                19.05%
-----------------------------
<FN>
(1)      Each of the persons listed on this table may be contacted at the 
         address of LFC.

(2)      The beneficial owner has sole voting and investment power unless 
         otherwise indicated.

(3)      Includes 6,561 shares held by Andrix & Company, of which Mr. Andrix is 
         the owner.

(4)      Includes 500 shares held by Mr. Bell's son. The remainder of such
         shares are held by Mr. Bell jointly with his spouse.

(5)      Includes 10,895 shares held by Mr. Bodle jointly with his spouse and
         811 shares held by Mr. Bodle's spouse individually.

(6)      Includes 10,832 shares held by Mr. Goodyear jointly with his spouse.

(7)      Includes 6,675 shares held by Mr. Sims jointly with his spouse.
</TABLE>


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Under the federal securities laws, each director and executive officer
of LFC is required to file a Form 3 to report his beneficial ownership of common
shares of LFC to the Securities and Exchange Commission within 10 days after the
date on which he becomes a director or executive officer. LFC must disclose in
its Proxy Statements any failure to file a Form 3 timely. At the time of his
appointment to the Board of Directors of LFC in May 1996, Mr. Kennison A. Sims
did not file a Form 3 as required within 10 days following such appointment. See
"PROPOSAL ONE - ELECTION OF DIRECTORS."


                      PROPOSAL ONE - ELECTION OF DIRECTORS
                      ------------------------------------

ELECTION OF DIRECTORS

         The Regulations provide for a Board of Directors consisting of seven
persons divided into two classes. In accordance with Section 2.02 of the
Regulations, nominees for election as directors may be proposed only by the
directors or by a shareholder entitled to vote for directors if such shareholder
has submitted a written nomination to the Secretary of LFC by the later of the
December 1st immediately preceding the annual meeting of shareholders or the
sixtieth day before the first anniversary of the most recent annual meeting of
shareholders held for the election of directors. Each such written nomination
must state the name, age, business or residence address of the nominee, the




                                      -3-
<PAGE>   5



principal occupation or employment of the nominee, the number of common shares
of LFC owned either beneficially or of record by each such nominee and the
length of time such shares have been so owned.

         The Board of Directors proposes the reelection of the following persons
to serve until the Annual Meeting of Shareholders in 1999 and until their
successors are duly elected and qualified or until their earlier resignation,
removal from office or death:

<TABLE>
<CAPTION>
                                                                                        Director
                                                                                         of LFC
Name                            Age (1)             Position(s) Held                    Since (2)
----                            -------             ----------------                    ---------

<S>                                <C>                  <C>                               <C> 
Donald E. Forrest                  75                   Director                          1996
Edward D. Goodyear                 49                   Director                          1996
Kennison A. Sims                   44                   Director                          1996
-----------------------------
<FN>
(1)      As of December 1996.

(2)      Mr. Forrest and Mr. Goodyear became directors of LFC in connection with
         the conversion of Citizens from mutual to stock form (the "Conversion")
         and the formation of LFC as the holding company for Citizens. Mr. Sims
         was appointed in May 1996 by the Board of Directors to fill a vacancy
         on the Board of Directors.
</TABLE>

If any nominee is unable to stand for election, any proxies granting authority
to vote for such nominee will be voted for such substitute as the Board of
Directors recommends.

         The following directors will continue to serve as directors of LFC
after the Annual Meeting for the terms indicated:

<TABLE>
<CAPTION>
                                                                                Director of
   Name (1)                   Age (2)             Positions Held               LFC Since (3)          Term Expires
   --------                   -------             --------------               -------------          ------------

<S>                             <C>               <C>                               <C>                   <C> 
   John I. Andrix               49                Director                          1996                  1998
   Rodney A. Bell               77                Director                          1996                  1998
   John J. Bodle                49                Director and President            1996                  1998
------------------------------
<FN>
(1)      There is currently one vacancy in the class of directors the term of
         which expires in 1998. The Board of Directors is currently considering
         the manner in which such vacancy should be filled.

(2)      As of December 1996.

(3)      Each director became a director in connection with the Conversion.
</TABLE>

         MR. JOHN I. ANDRIX. Mr. Andrix has been the President and owner of
Andrix & Company, a general insurance agency located in Madison County, Ohio
since 1974.

         MR. RODNEY A. BELL. From 1958 to 1986, Mr. Bell owned and operated
Rod-Bell Ford, an automobile dealership in London, Ohio. Mr. Bell sold the
dealership to Buckeye Ford in 1986. Since 1986, Mr. Bell has been a salesman at
Buckeye Ford.

         MR. JOHN J. BODLE. Mr. Bodle has been the President of LFC since 1995
and the President of Citizens since 1991. Mr. Bodle has been an employee of
Citizens since 1986.




                                      -4-
<PAGE>   6




         MR. DONALD E. FORREST. For the past 48 years, Mr. Forrest has been the
owner-operator of Forrest Trucking Company, West Jefferson and London, Ohio.

         MR. EDWARD D. GOODYEAR. Mr. Goodyear is a Certified Public Accountant
who has practiced in London, Ohio, since 1971. Since 1974, Mr. Goodyear has been
the Assistant Treasurer of The Dispatch Printing Company, publisher of THE
COLUMBUS DISPATCH newspaper.

         MR. KENNISON A. SIMS. Mr. Sims has been the owner-operator of The Sims
Construction Company, located in London, Ohio, since 1976.

MEETINGS OF DIRECTORS

         LFC was incorporated in October 1995. The Board of Directors of LFC met
seven times for regularly scheduled and special meetings during the fiscal year
ended September 30, 1996. Each director attended at least 75% of the aggregate
of such meetings.

         Each director of LFC is also a director of Citizens. The Board of
Directors of Citizens met 16 times for regularly scheduled and special meetings
during the fiscal year ended September 30, 1996. Each director attended at least
75% of the aggregate of such meetings and all meetings of committees of the
Board of Directors of which such director was a member.

COMMITTEES OF DIRECTORS

         The Board of Directors of LFC has a Stock Option Plan Committee and an
MRP Committee.

         The members of the Stock Option Plan Committee are Messrs. Andrix,
Goodyear and Sims. The Stock Option Plan Committee administers the Stock Option
Plan and determines the number of shares to be covered by options granted to the
officers and employees of LFC and Citizens pursuant to the Stock Option Plan.

         The members of the MRP Committee are Messrs. Andrix, Goodyear and Sims.
The MRP Committee administers the MRP and determines the number of shares to be
awarded to officers and employees of LFC and Citizens pursuant to the Stock
Option Plan.

         The Board of Directors of Citizens has an Executive Committee, an Audit
Committee and a Classification and Fixed Asset Committee, but no separate
nominating or compensation committees.

         The members of the Executive Committee are Messrs. Andrix, Goodyear and
Bodle. With authority to approve individual loans in amounts less than $150,000,
the Executive Committee also sets compensation for the executive officers of
Citizens, subject to approval by the full Board of Directors, and is authorized
to act on behalf of the Board of Directors between regular meetings of the Board
of Directors. The Executive Committee met 12 times during the fiscal year ended
September 30, 1996.

         The members of the Audit Committee are Messrs. Bell, Forrest and
Goodyear. The Audit Committee is responsible for auditing teller boxes,
reviewing and reporting to the full Board of Directors on the independent audits
of LFC and reviewing loan files for regulatory compliance and adherence to the
lending policies of Citizens. The Audit Committee met six times during the
fiscal year ended September 30, 1996.

         The members of the Classification and Fixed Asset Committee are Messrs.
Andrix, Bell and Bodle. The function of the Classification and Fixed Asset
Committee is to review delinquent loans, non-performing assets and real estate
acquired through foreclosure proceedings and to report and recommend action to
the full Board of Directors with regard thereto. The Classification and Fixed
Asset Committee met four times during the fiscal year ended September 30, 1996.



                                      -5-
<PAGE>   7





                               EXECUTIVE OFFICERS

         In addition to Mr. Bodle, the President of both LFC and Citizens, the
following persons are executive officers of LFC and Citizens and hold the
designated positions:

<TABLE>
<CAPTION>
Name              Age (1)        Position(s) Held
----              -------        ----------------

<S>                  <C>         <C>                            
Joyce E.             44          Vice President and Treasurer of
Bauerle                             Citizens and Treasurer of LFC
Rebecca              39          Secretary of LFC and Citizens
A. Lohr
-----------------------------
<FN>
(1)           As of December 1996.
</TABLE>

         MS. JOYCE E. BAUERLE. Ms. Bauerle has served as a Vice President of
Citizens since January 1996 and has served as the Treasurer of Citizens since
1981 and as Treasurer of LFC since LFC's incorporation in October 1995.

         MS. REBECCA A. LOHR. Ms. Lohr has served as the Secretary of Citizens
for the past five years and as the Secretary of LFC since October 1995.


                COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

EXECUTIVE COMPENSATION

         No executive officer of LFC or Citizens received compensation in excess
of $100,000 in fiscal 1996. The following table sets forth the compensation paid
to John J. Bodle, the President of LFC and Citizens, for the fiscal years ended
September 30, 1996 and 1995:

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                         Annual Compensation
Name and Principal                                                                              All Other
Position                         Year             Salary ($)              Bonus ($)          Compensation (1)
--------                         ----             ----------              ---------          ----------------

<S>                              <C>                <C>                    <C>                    <C>   
John J. Bodle                    1996               $55,530                $10,725                $8,400
President                        1995                53,560                 11,962                 7,100
----------------------------
<FN>
(1)      Consists of directors' fees. Does not include amounts attributable to
         miscellaneous benefits received by Mr. Bodle, the cost of which was
         less than 10% of his annual salary and bonus.
</TABLE>

DIRECTOR COMPENSATION

         LFC pays no director's fees. Each director of Citizens currently
receives a fee of $500 for each meeting of the Board of Directors attended. In
addition, each member of the Executive Committee, the Audit Committee and the
Classification and Fixed Asset Committee receives, respectively, $300, $100 and
$100 for each committee meeting attended.

EMPLOYMENT AGREEMENTS

         On March 29, 1996, Citizens entered into an employment agreement with
Mr. Bodle (the "Employment Agreement"). Citizens has not entered into an
employment agreement with any other officer.




                                      -6-
<PAGE>   8




         The Employment Agreement provides for a term of three years, a salary
of not less than $53,560 and performance review by the Board of Directors not
less often than annually. The Employment Agreement also provides for the
inclusion of Mr. Bodle in any formally established employee benefit, bonus,
pension and profit-sharing plans for which senior management personnel are
eligible.

         The Employment Agreement is terminable by Citizens at any time. In the
event of termination by Citizens for "just cause," as defined in the Employment
Agreement, Mr. Bodle will have no right to receive any compensation or other
benefits for any period after such termination. In the event of termination by
Citizens other than for just cause, at the end of the term of the Employment
Agreement or in connection with a "change of control," as defined in the
Employment Agreement, Mr. Bodle will be entitled to a continuation of salary
payments for a period of time equal to the term of the Employment Agreement and
a continuation of benefits substantially equal to those being provided at the
date of termination of employment until the earliest to occur of the end of the
term of the Employment Agreement or the date on which Mr. Bodle becomes employed
full-time by another employer.

         The Employment Agreement also contains provisions with respect to the
occurrence of the following within one year of a "change of control": (1) the
termination of employment of Mr. Bodle for any reason other than just cause,
retirement or termination at the end of the term of the Employment Agreement and
(2) a constructive termination resulting from a change in the capacity or
circumstances in which Mr. Bodle is employed or from a material reduction in his
responsibilities, authority, compensation or other benefits provided under the
Employment Agreement without Mr. Bodle's written consent. In the event of any
such occurrence, Mr. Bodle will be entitled to receive an amount equal to three
times his average annual compensation for the three taxable years immediately
preceding the termination of employment. In addition, Mr. Bodle will be entitled
to continued coverage under all benefit plans until the earliest of the end of
the term of the Employment Agreement or the date on which he is included in
another employer's benefit plans as a full-time employee. The maximum which Mr.
Bodle may receive under such provisions, however, is limited to an amount which
will not result in the imposition of a penalty tax pursuant to Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code").
"Control," as defined in the Employment Agreement, generally refers to the
acquisition by any person or entity of the ownership or power to vote 10% or
more of the voting stock of Citizens or LFC, the control of the election of a
majority of the directors of Citizens or LFC or the exercise of a controlling
influence over the management or policies of Citizens or LFC.

CERTAIN TRANSACTIONS

         Citizens has followed a policy of granting consumer loans and loans
secured by the borrower's personal residence to officers, directors and
employees. As required by federal law, all such loans to executive officers and
directors are made in the ordinary course of business, on the same terms and
conditions as those of comparable transactions prevailing at the time and in
accordance with Citizens' underwriting guidelines. In addition, such loans do
not involve more than the normal risk of collectibility or present other
unfavorable features. Loans to all officers and directors and their related
interests totaled $472,844 at September 30, 1996.


           PROPOSAL TWO - APPROVAL OF THE LONDON FINANCIAL CORPORATION
           -----------------------------------------------------------
                      1996 STOCK OPTION AND INCENTIVE PLAN
                      ------------------------------------


GENERAL

         On November 21, 1996, the Board of Directors of LFC adopted the Stock
Option Plan. In accordance with the terms of the Stock Option Plan and
regulations of the Office of Thrift Supervision (the "OTS"), the Stock Option
Plan must also be approved by the holders of a majority of the outstanding
shares of LFC. The provisions of the Stock Option Plan comply with OTS
regulations. The OTS in no way endorses or approves the Stock Option Plan. THE
BOARD OF DIRECTORS OF LFC RECOMMENDS THAT THE SHAREHOLDERS OF LFC APPROVE THE
STOCK OPTION PLAN.

         The following is a summary of the terms of the Stock Option Plan and is
qualified in its entirety by reference to the full text of the Stock Option
Plan, a copy of which is attached hereto as Exhibit A.




                                      -7-
<PAGE>   9




PURPOSE, ADMINISTRATION AND ELIGIBILITY

         The purposes of the Stock Option Plan include retaining and providing
incentives to the directors, officers and employees of LFC and its subsidiaries
by facilitating their purchase of a stock interest in LFC. Pursuant to the Stock
Option Plan, 52,900 common shares have been reserved for issuance by LFC upon
the exercise of options to be granted to certain directors, officers and
employees of Citizens and LFC from time to time under the Stock Option Plan. If
options in respect of all shares reserved for issuance under the Stock Option
Plan are granted and exercised, the voting power of existing shareholders will
be diluted by approximately 10% and the influence of directors and officers of
LFC over the outcome of the vote on any matters submitted to LFC shareholders,
including changes of control, will increase.

         The Stock Option Plan will be administered by a committee of directors
composed of at least three directors of LFC who are not employees of LFC (the
"Stock Option Committee"). The Stock Option Committee may grant options under
the Stock Option Plan at such times as they deem most beneficial to Citizens and
LFC on the basis of the individual participant's responsibility, tenure and
future potential to Citizens and LFC. Grants must be made in accordance with OTS
regulations which provide that no individual may receive options to purchase
more than 25% of the shares which are reserved for issuance under the Stock
Option Plan and that no director who is not an employee of LFC or Citizens may
receive options to purchase more than 5% of such shares individually or 30% in
the aggregate.

         Without further approval of the shareholders, the Board of Directors
may at any time terminate the Stock Option Plan or may amend it from time to
time in such respects as the Board of Directors may deem advisable, except that
the Board of Directors may not, without the approval of the shareholders, make
any amendment which would (a) increase the aggregate number of common shares
which may be issued under the Stock Option Plan (except for adjustments to
reflect certain changes in the capitalization of LFC), (b) materially modify the
requirements as to eligibility for participation in the Stock Option Plan, or
(c) materially increase the benefits accruing to participants under the Stock
Option Plan. Notwithstanding the foregoing, the Board of Directors may amend the
Stock Option Plan to take into account changes in applicable securities, federal
income tax and other applicable laws.

OPTION TERMS

         Options granted under the Stock Option Plan may be "incentive stock
options" within the meaning of Section 422 of the Code ("ISOs") or may not be
ISOs ("Non-qualified Options"). The option exercise price for ISOs and
Non-qualified Options will be determined by the Stock Option Committee at the
time of grant, but must not be less than 100% of the fair market value of the
shares on the date of the grant. No stock option will be exercisable after the
expiration of ten years from the date of grant. In the case of an ISO granted to
an employee who owns more than 10% of LFC's outstanding common shares at the
time an ISO is granted under the Stock Option Plan, however, the exercise price
of the ISO may not be less than 110% of the fair market value of the shares on
the date of the grant and the ISO may not be exercisable after the expiration of
five years from the date of grant.

         An option recipient will not be permitted to transfer or assign an
option other than by will, in accordance with the laws of descent and
distribution or pursuant to a domestic relations order issued by a court of
competent jurisdiction. "Termination for cause," as defined in the Stock Option
Plan, will result in the annulment of any outstanding options.

         LFC will receive no monetary consideration for the granting of options
under the Stock Option Plan. Upon the exercise of options, LFC will receive
payment of cash, common shares of LFC or a combination of cash and common shares
from option recipients in exchange for shares issued. The market value of the
common shares underlying the options reserved for the Stock Option Plan is
$714,150, based upon the number of shares reserved, multiplied by the $13.50 per
share closing bid price quoted by The Nasdaq SmallCap Market ("Nasdaq") on
December 11, 1996.




                                      -8-
<PAGE>   10




TAX TREATMENT OF INCENTIVE STOCK OPTIONS

         An optionee who is granted an ISO will not recognize taxable income
either on the date of grant or on the date of exercise, although the alternative
minimum tax may apply. Upon disposition of shares acquired from the exercise of
an ISO, long-term capital gain or loss is generally recognized in an amount
equal to the difference between the amount realized on the sale or disposition
and the exercise price. If the optionee disposes of the shares within two years
of the date of grant or within one year from the date of the transfer of the
shares to the optionee (a "Disqualifying Disposition"), however, then the
optionee will recognize ordinary income, as opposed to capital gain, at the time
of disposition in an amount generally equal to the lesser of (i) the amount of
gain realized on the disposition, or (ii) the difference between the fair market
value of the shares received on the date of exercise and the exercise price. Any
remaining gain or loss is treated as a short-term or long-term capital gain or
loss, depending upon the period of time the shares have been held.

         LFC is not entitled to a tax deduction upon either the exercise of an
ISO or the disposition of shares acquired pursuant to such exercise, except to
the extent that the optionee recognizes ordinary income in a Disqualifying
Disposition. Ordinary income from a Disqualifying Disposition will constitute
compensation but will not be subject to tax withholding, nor will it be
considered wages for payroll tax purposes.

         If the holder of an ISO pays the exercise price, in whole or in part,
with previously acquired shares of LFC, the exchange should not affect the ISO
tax treatment of the exercise. Upon such exchange, and except as otherwise
described herein, no gain or loss is recognized by the optionee upon delivering
previously acquired shares to LFC, and shares received by the optionee equal in
number to previously acquired common shares exchanged therefor will have the
same basis and holding period for long-term capital gain purposes as the
previously acquired shares. (The optionee, however, will not be able to utilize
the prior holding period for the purpose of satisfying the ISO statutory holding
period requirements for avoidance of a Disqualifying Disposition.) Shares
received by the optionee in excess of the number of shares previously acquired
will have a basis for federal income tax purposes of zero and a holding period
which commences as of the date the shares are transferred to the optionee upon
exercise of the ISO. If the exercise of an ISO is effected using shares
previously acquired through the exercise of an ISO, the exchange of such
previously acquired shares will be considered a disposition of such shares for
the purpose of determining whether a Disqualifying Disposition has occurred.

TAX TREATMENT OF NON-QUALIFIED OPTIONS

         An optionee receiving a Non-qualified Option does not recognize taxable
income on the date of grant of the option, provided that the option does not
have a readily ascertainable fair market value at the time it is granted. The
optionee must recognize ordinary income generally at the time of exercise of a
Non-qualified Option in the amount of the difference between the fair market
value of the shares on the date of exercise and the option price. The ordinary
income received will constitute compensation for which tax withholding by LFC
generally will be required. The amount of ordinary income recognized by an
optionee will be deductible by LFC in the year that the optionee recognizes the
income if LFC complies with the applicable withholding requirement.

         If, at the time of exercise, the sale of the shares could subject the
optionee to short-swing profit liability under Section 16(b) of the Securities
Exchange Act of 1934, such person generally will not recognize ordinary income
until the date that the optionee is no longer subject to such Section 16(b)
liability. Upon such date, the optionee will recognize ordinary income in an
amount equal to the fair market value of the shares on such date less the option
exercise price. Nevertheless, the optionee may elect under Section 83(b) of the
Code within 30 days of the date of exercise to recognize ordinary income as of
the date of exercise, without regard to the restriction of Section 16(b).

         Shares acquired upon the exercise of a Non-qualified Option will have a
tax basis equal to their fair market value on the exercise date or other
relevant date on which ordinary income is recognized, and the holding period for
the shares generally will begin on the date of exercise or such other relevant
date. Upon subsequent disposition of the shares, the optionee will recognize
long-term capital gain or loss if the optionee has held the shares for more 



                                      -9-
<PAGE>   11




than one year prior to disposition, or short-term capital gain or loss if the
optionee has held the shares for one year or less.

         If a holder of a Non-qualified Option pays the exercise price, in whole
or in part, with previously acquired shares of LFC, the optionee will recognize
ordinary income in the amount by which the fair market value of the shares
received exceeds the exercise price. The optionee will not recognize gain or
loss with respect to the previously acquired shares upon delivering such
previously acquired shares to LFC unless such delivery constitutes a
Disqualifying Disposition of shares acquired through the exercise of an ISO.
Shares received by an optionee equal in number to the previously acquired shares
exchanged therefor will have the same basis and holding period as such
previously acquired shares. Shares received by an optionee in excess of the
number of such previously acquired shares will have a basis equal to the fair
market value of such additional shares as of the date ordinary income is
recognized. The holding period for such additional shares will commence as of
the date of exercise or such other relevant date.

PROPOSED AWARDS

         The Board of Directors of LFC adopted the Stock Option Plan on November
21, 1996. If the shareholders approve the Stock Option Plan, options to purchase
3,174 common shares of LFC will automatically be granted in accordance with the
terms of the Stock Option Plan to each non-employee director on the fifth
business day following the effective date of the Stock Option Plan. Options to
purchase 3,174 common shares of LFC will also be automatically granted in
accordance with the terms of the Stock Option Plan to each non-employee director
who is not a director on the effective date of the Stock Option Plan, but who is
subsequently elected or appointed to the Board of Directors of LFC, Citizens or
a subsidiary of LFC on the date of such election or appointment, if reserved
shares remain available under the Stock Option Plan.

         In addition, if the shareholders approve the Stock Option Plan at the
Annual Meeting, the Stock Option Committee intends to grant the following
options under the Stock Option Plan to the corresponding executive officers:

<TABLE>
<CAPTION>
   Name of Recipient                            Shares Subject to Options
   -----------------                            -------------------------
<S>                                                      <C>   
    John J. Bodle                                        13,225
    Joyce E. Bauerle                                      1,500
    Rebecca A. Lohr                                       1,500
</TABLE>

The Stock Option Committee also intends to grant options to purchase 6,000
common shares to the employees of LFC and Citizens who are not executive
officers. No determination has yet been made with respect to the extent to which
the options granted to employees will be ISOs.

         If reserved shares are available under the Stock Option Plan, the Stock
Option Committee may grant options under the Stock Option Plan to the directors,
officers and employees of LFC and Citizens in the future at such times as they
deem most beneficial to LFC and Citizens on the basis of the individual
participant's responsibility, tenure and future potential. Options awarded under
the Stock Option Plan will become exercisable at the rate of one-fifth per year
commencing on the date that is one year after the date of grant of the award.

         THE BOARD OF DIRECTORS OF LFC RECOMMENDS THAT THE SHAREHOLDERS OF LFC
APPROVE THE STOCK OPTION PLAN. Accordingly, the shareholders of LFC will be
asked to approve the following resolution at the Annual Meeting:

                  RESOLVED, that the London Financial Corporation 1997 Stock
                  Option and Incentive Plan be, and it hereby is, approved.



                                      -10-
<PAGE>   12



        PROPOSAL THREE - APPROVAL OF THE CITIZENS LOAN & SAVINGS COMPANY
        ----------------------------------------------------------------
                      MANAGEMENT RECOGNITION PLAN AND TRUST
                      -------------------------------------

GENERAL

         On November 21, 1996, the Board of Directors of LFC adopted the MRP. In
accordance with the terms of the MRP and regulations of the OTS, the MRP must
also be approved by the holders of a majority of the outstanding shares of LFC.
The provisions of the MRP comply with OTS regulations. The OTS in no way
endorses or approves the MRP. THE BOARD OF DIRECTORS OF LFC RECOMMENDS THAT THE
SHAREHOLDERS OF LFC APPROVE THE MRP.

         The following is a summary of the terms of the MRP and is qualified in
its entirety by reference to the full text of the MRP, a copy of which is
attached hereto as Exhibit B.

PURPOSE, ADMINISTRATION AND ELIGIBILITY

         The purpose of the MRP is to provide directors, officers and certain
key employees of LFC and Citizens with an ownership interest in LFC in a manner
designed to compensate such directors, officers and key employees for services
to LFC and Citizens. If the shareholders approve the MRP at the Annual Meeting,
Citizens expects to contribute sufficient funds to enable the MRP to purchase up
to 21,160 common shares of LFC at the market price at the time of such purchase.

         The MRP will be administered by a committee of directors composed of at
least three directors of Citizens who are not employees of Citizens (the "MRP
Committee"). The MRP Committee will determine the number of shares to be awarded
to eligible participants other than non-employee directors. The MRP Committee
may make awards under the MRP to the officers and employees of LFC and Citizens
at such times as they deem most beneficial to LFC on the basis of the individual
participant's responsibility, tenure and future potential. Grants must be made
in accordance with OTS regulations, which provide that no individual may be
awarded more than 25% of the shares which are reserved for issuance under the
MRP and that directors who are not employees of LFC or Citizens may not receive
more than 5% of such shares individually or 30% in the aggregate. The MRP will
either purchase the 21,160 common shares of LFC in the open market or from the
authorized, but unissued shares of LFC.

         In the event that the MRP purchases all 21,160 shares from authorized,
but unissued shares of LFC, the voting power of current shareholders will be
diluted by approximately 4%.

TERMS

         Unless the MRP Committee specifies a longer period of time, one-fifth
of the number of shares awarded to an individual will become earned and
non-forfeitable on each of the first five anniversaries of the date of such
award. Compensation expense in the amount of the fair market value of the MRP
shares will be recognized as the shares are earned. Until shares awarded are
earned by the participant, such shares will be forfeited in the event that the
participant ceases to be either a director or an employee of Citizens, except
that in the event of the death or disability of a participant, the participant's
shares will be deemed to be earned and non-forfeitable.

         The shares, together with any cash dividends or distributions paid
thereon, will be distributed as soon as practicable after they are earned. A
participant may direct the voting of all shares awarded to him or her which have
been earned, but have not yet been distributed to him or her. Shares that have
been awarded, but not earned, will be voted in the discretion of the MRP Trustee
to be appointed by the MRP Committee. Shares that have been awarded, but not
earned, may not be transferred.

         The Board of Directors of Citizens may, by resolution, amend or
terminate the MRP.




                                      -11-
<PAGE>   13



TAX TREATMENT OF SHARES AWARDED UNDER THE MRP

         Persons receiving shares under the MRP generally will not recognize
income upon the award of such shares, but will recognize ordinary income when
and to the extent such shares become earned and non-forfeitable, in an amount
equal to the fair market value of the shares at the time such shares become
earned and non-forfeitable plus the amount of any earnings distributed to the
participant with respect to such shares. If applicable withholding requirements
are satisfied, LFC will be entitled to a deduction each year in an amount equal
to the income, if any, recognized by participants for such year.

         Under Section 83(b) of the Code, a participant may elect, within 30
days after the shares are awarded, to recognize ordinary income on the date the
shares are awarded based on the fair market value of the shares on such date. If
the election is made, Citizens would be entitled to a deduction for an
equivalent amount. A participant making such an election will have a tax basis
in the shares equal to the amount of ordinary income recognized, and the
participant's holding period for capital gains purposes for such shares will
commence on the date the shares are awarded. If a Section 83(b) election is
made, however, and the shares are subsequently forfeited, the participant will
not be entitled to either a deduction of the amount previously recognized as
income with respect to such shares or a refund of any tax paid thereon. If an
election under Section 83(b) is not made with respect to an award, Citizens will
recognize the compensation expense arising from such award ratably over the five
year vesting period, based on the fair market value of the shares at the time of
vesting.

PROPOSED AWARDS

         The Board of Directors of LFC adopted the MRP on November 21, 1996. If
the shareholders approve the MRP, Citizens expects to contribute sufficient
funds to enable the MRP to purchase up to 21,160 common shares of LFC at the
market price at the time of such purchase. After such purchase, 1,270 common
shares of LFC will automatically be awarded in accordance with the terms of the
MRP to each non-employee director on the fifth business day following the
effective date of the MRP. Common shares of LFC may also be awarded under the
MRP to each non-employee director who was not a director on the effective date
of the MRP, but who is subsequently elected or appointed to the Board of
Directors of LFC, Citizens or a subsidiary of LFC on the date of such election
or appointment.

         In addition, if the shareholders approve the MRP at the Annual Meeting,
the MRP Committee intends to make the following awards under the MRP:

<TABLE>
<CAPTION>
   Name of Recipient                             Shares to be Awarded
   -----------------                             --------------------
<S>                                                     <C>  
   John J. Bodle                                        5,290
   Joyce E. Bauerle                                     1,000
   Rebecca A. Lohr                                      1,000
</TABLE>

The MRP Committee also intends to award 4,000 common shares to the employees of
Citizens who are not executive officers. The MRP Committee may award shares
under the MRP to the directors, officers and key employees of LFC and Citizens
in the future at such times as they deem most beneficial to LFC and Citizens on
the basis of the individual participant's responsibility, tenure and future
potential.

         THE BOARD OF DIRECTORS OF LFC RECOMMENDS THAT THE SHAREHOLDERS OF LFC
APPROVE THE MRP. Accordingly, the shareholders of LFC will be asked to approve
the following resolution at the Annual Meeting:

                  RESOLVED, that The Citizens Loan & Savings Company Management
                  Recognition Plan and Trust be, and it hereby is, approved.




                                      -12-
<PAGE>   14



                                NEW PLAN BENEFITS

         The following table sets forth certain information with respect to the
options expected to be granted pursuant to the Stock Option Plan and the awards
expected to be made pursuant to the MRP:

<TABLE>
<CAPTION>
                                                  Stock Option Plan (1)                           MRP
                                                  ---------------------        ---------------------------------------
Name and Position                              Shares Subject to Options       Dollar Value ($) (2)        Shares (#)
-----------------                              -------------------------       --------------------        ----------

<S>                                                         <C>                        <C>                     <C>  
John J. Bodle, President                                    13,225                     $178,538                5,290
All executive officers, as a group
  (3 persons)                                               16,225                      219,038                7,290
All directors who are not officers, as
  a group (5 persons)                                       15,870                      214,245                6,350
All employees who are not executive
  officers, as a group (6 persons)                           6,000                       81,000                4,000
----------------------------
<FN>
(1)      The dollar value of the shares subject to options under the Stock
         Option Plan is not determinable.

(2)      Based upon the number of shares awarded multiplied by the $13.50 per
         share closing bid price quoted by Nasdaq on December 11, 1996.
</TABLE>


                      PROPOSAL FOUR - SELECTION OF AUDITORS
                      -------------------------------------

         On July 11, 1996, LFC, with the approval of its Board of Directors,
dismissed KPMG Peat Marwick ("KPMG") as LFC's independent auditor and engaged
Grant Thornton to act in such capacity. The reports of KPMG on the financial
statements of Citizens for the fiscal years ended September 30, 1994 and 1995,
did not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended September 30, 1994 and 1995, and the interim
period through July 11, 1996, there were no disagreements between LFC or
Citizens and KPMG on any matter of accounting principles or practices,
consolidated financial statement disclosure or audit scope or procedure.

         The Board of Directors has selected Grant Thornton as the auditors of
LFC and Citizens for the current fiscal year and recommends that the
shareholders ratify such selection. Management expects that a representative of
Grant Thornton will be present at the Annual Meeting, will have the opportunity
to make a statement if he or she so desires and will be available to respond to
appropriate questions.


                   PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
                   -------------------------------------------

         Any proposals of shareholders intended to be included in the proxy
statement for the 1998 Annual Meeting of Shareholders of LFC should be sent to
LFC by certified mail and must be received by LFC not later than August 14,
1997.

         Management knows of no other business which may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed Proxy
to vote such Proxy in accordance with their best judgment on any other matters
which may be brought before the Annual Meeting.



                                      -13-
<PAGE>   15




         IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.


                                          By Order of the Board of Directors




                                          John J. Bodle, President

London, Ohio
December 12, 1996



                                      -14-
<PAGE>   16


                                    EXHIBIT A

                          LONDON FINANCIAL CORPORATION
                      1997 STOCK OPTION AND INCENTIVE PLAN

                  PURPOSE. The purpose of the London Financial Corporation 1997
Stock Option and Incentive Plan (this "Plan") is to promote and advance the
interests of London Financial Corporation (the "Company") and its shareholders
by enabling the Company to attract, retain and reward directors and managerial
and other key employees of the Company and any Subsidiary (hereinafter defined),
and to strengthen the mutuality of interests between such directors and
employees and the Company's shareholders, by providing such persons with a
proprietary interest in pursuing the long-term growth, profitability and
financial success of the Company.

                  DEFINITIONS. For purposes of this Plan, the following terms
shall have the meanings set forth below:

         "Board" means the Board of Directors of the Company.

         "Code" means the Internal Revenue Code of 1986, as amended, or any
                  successor thereto, together with rules, regulations and
                  interpretations promulgated thereunder.

         "Committee" means the Committee of the Board constituted as provided in
                  Section 4 of this Plan.

         "Company" means London Financial Corporation, an Ohio corporation, or
                  any successor corporation.

         "Director" means a member of the Board or of the Board of Directors of
                  a Parent or Subsidiary of the Company.

         "Effective Date" means the later of the date on which the Plan is
                  approved by the shareholders of the Company and the date on
                  which the Plan is adopted by the Board.

         "Employee" means any person, other than an Officer or Director,
                  employed on a full-time basis by the Company or any Parent or
                  Subsidiary of the Company.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
                  or any successor statute.

         "Fair Market Value" shall be determined as follows:

                           (i) If the Shares are traded on a national securities
                  exchange at the time of grant of the Stock Option, then the
                  Fair Market Value shall be the average of the highest and the
                  lowest selling price on such exchange on the date such Stock
                  Option is granted or, if there were no sales on such date,
                  then on the next prior business day on which a sale occurred.

                           (ii) If the Shares are quoted on The Nasdaq Stock
                  Market at the time of the grant of the Stock Option, then the
                  Fair Market Value shall be the mean between the closing high
                  bid and low asked quotation with respect to a Common Share on
                  such date on The Nasdaq Stock Market.

                           (iii) If the Shares are not traded on a national
                  securities exchange or quoted on The Nasdaq Stock Market, then
                  the Fair Market Value shall be as determined by the Committee.

         "Incentive Stock Option" means any Stock Option granted pursuant to the
                  provisions of Section 6 of this Plan that is intended to be
                  and is specifically designated as an "incentive stock option"
                  within the meaning of Section 422 of the Code.

         "Non-Qualified Stock Option" means any Stock Option granted pursuant to
                  the provisions of Section 6 of this Plan that is not an
                  Incentive Stock Option.

         "Officer" means a person who holds one of the positions specified in
                  Article Three of the Code of Regulations of the Company or any
                  person who holds a comparable position with any Parent or
                  Subsidiary of the Company.



                                       -1-
<PAGE>   17



         "OTS" means the Office of Thrift Supervision, Department of the
                  Treasury.

         "Parent" means any present or future corporation which would be a
                  "Parent Corporation" as defined in Subsections 424(e) and (q)
                  of the Code.

         "Participant" means an employee or director of the Company or a
                  Subsidiary who is granted an Incentive Stock Option or a
                  Non-Qualified Stock Option under this Plan. Notwithstanding
                  the foregoing, for the purposes of the granting of any
                  Incentive Stock Option under this Plan, the term "Participant"
                  shall include only employees of the Company or a Subsidiary.

         "Plan" means the London Financial Corporation 1997 Stock Option and
                  Incentive Plan, as set forth herein and as it may be hereafter
                  amended from time to time.

         "Shares" means the common shares, without par value, of the Company or
                  any security of the Company issued in substitution or in
                  exchange therefor or in lieu thereof.

         "Stock Option" means a right, granted pursuant to Section 6 of this
                  Plan, to purchase Shares.

         "Subsidiary" means any present or future corporation which would be a
                  "subsidiary corporation", as defined in Subsections 424(f) and
                  (g) of the Code, including, but not limited to, The Citizens
                  Loan & Savings Company ("Citizens").

                  SHARES SUBJECT TO THE PLAN.

                           Shares Available. Subject to adjustment as provided
in Section 3(b) hereof, the aggregate number of Shares with respect to which
Stock Options may be granted pursuant to the Plan shall be Fifty-Two Thousand
Nine Hundred (52,900). If, after the Effective Date, any Shares subject to a
Stock Option granted under the Plan, or to which such Stock Option relates, are
forfeited, or if a Stock Option otherwise terminates or is cancelled without the
delivery of Shares, then the Shares covered by such Stock Option, or to which
such Stock Option relates, or the number of Shares otherwise counted against the
aggregate number of Shares with respect to which Stock Options may be granted,
to the extent of any such forfeiture, termination or cancellation, shall again
be, or shall become, Shares with respect to which Stock Options may be granted,
to the extent permissible under Rule 16b-3 promulgated under the Exchange Act,
or any successor rule or regulation thereto as in effect from time to time.

                           Adjustments and Corporate Acts. In the event that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is necessary in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall proportionately adjust any or all (as necessary) of (i)
the number of Shares or other securities of the Company (or number and kind of
other securities or property) with respect to which Stock Options may be
granted, (ii) the number of Shares or other securities of the Company (or number
and kind of other securities or property) subject to outstanding Stock Options,
and (iii) the grant or exercise price with respect to any Stock Options;
provided, in each case, that no such adjustment shall be authorized to the
extent that such authority would cause the Plan to violate Section 422(b)(1) of
the Code, as from time to time amended, or Rule 16b-3 promulgated under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time. The existence of this Plan and the Stock Options granted hereunder
shall not affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger, acquisition or consolidation of the
Company, any issuance of bonds, debentures, preferred or prior preference stocks
ahead of or affecting the Company's capital stock or the rights thereof, the
dissolution or liquidation of the Company or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
including any merger or acquisition which would result in the exchange of cash,
stock of another company or options to purchase the stock of another company for
any Stock Option outstanding at the time of such corporate transaction or which
would involve the termination of all Stock Options outstanding at the time of
such corporate transaction.



                                      -2-
<PAGE>   18




                  ADMINISTRATION.

                           This Plan shall be administered by the Committee to
be comprised of not less than three of the members of the Board who are not
employees of the Company. The members of the Committee shall be appointed from
time to time by the Board. Members of the Committee shall serve at the pleasure
of the Board, and the Board may from time to time remove members from, or add
members to, the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. Action approved in writing
by a majority of the members of the Committee then serving shall be fully as
effective as if the action had been taken by unanimous vote at a meeting duly
called and held.

                           The Committee is authorized to construe and interpret
this Plan and to make all other determinations necessary or advisable for the
administration of this Plan. The Committee may designate persons other than
members of the Committee to carry out its responsibilities under such conditions
and limitations as it may prescribe. Any determination, decision or action of
the Committee in connection with the construction, interpretation,
administration, or application of this Plan shall be final, conclusive and
binding upon all persons participating in this Plan and any person validly
claiming under or through persons participating in this Plan. The Company shall
effect the granting of Stock Options under this Plan in accordance with the
determinations made by the Committee, by execution of instruments in writing in
such form as approved by the Committee.

                  DURATION OF THIS PLAN. This Plan shall terminate on the date
which is ten (10) years from the date on which this Plan is adopted by the
Board, except with respect to Stock Options then outstanding. Notwithstanding
the foregoing, no Incentive Stock Option may be granted under this Plan after
the date which is ten (10) years from the date on which this Plan is adopted by
the Board or the date on which this Plan is approved by the shareholders of the
Company, whichever is earlier.

                  ELIGIBILITY AND GRANTS.

                  Persons eligible for Stock Options under this Plan shall
consist of Directors and managerial and other key Employees of the Company or a
Subsidiary who hold positions with significant responsibilities or whose
performance or potential contribution, in the judgment of the Committee, will
benefit the future success of the Company or a Subsidiary. In selecting the
Directors and Employees to whom Stock Options will be awarded and the number of
Shares subject to such Stock Options, the Committee shall consider the position,
duties and responsibilities of the eligible Directors and Employees, the value
of their services to the Company and the Subsidiaries and any other factors the
Committee may deem relevant.

                  STOCK OPTIONS. Stock Options granted under this Plan may be in
the form of Incentive Stock Options or Non-Qualified Stock Options, and such
Stock Options shall be subject to the following terms and conditions as the
Committee shall deem desirable:

                           Grant.

                           (i) NON-EMPLOYEE DIRECTORS. The grant of Stock
                  Options to non-employee Directors shall occur pursuant to the
                  following formula: Stock Options to purchase 3,174 Shares
                  shall automatically be granted to each non-employee Director
                  on the fifth business day next following the Effective Date;
                  in addition, Stock Options to purchase 3,174 Shares shall
                  automatically be granted to each non-employee Director who was
                  not a Director on the Effective Date but is elected or
                  appointed to the Board or Board of Directors of a Subsidiary
                  subsequent to the Effective Date on the date such election or
                  appointment is effective. The foregoing notwithstanding, no
                  Stock Option shall be granted if such grant would result in a
                  violation or possible violation of federal or state securities
                  laws.

                           (ii) OFFICERS AND EMPLOYEES. The Committee shall from
                  time to time determine the Officers and Employees to whom
                  Stock Options shall be granted under the Plan and the number
                  of Shares subject to such Stock Options. In selecting the
                  Participants and in determining the number of Shares subject
                  to each Stock Option granted under the Plan, the Committee may
                  consider the nature of the services rendered by each such
                  Participant, each such Participant's current and potential
                  contribution to the Company or any Parent or Subsidiary and
                  such other factors as the Committee may, in its sole
                  discretion, deem relevant. An Officer or Employee who has been
                  granted a Stock Option may, if otherwise eligible, be granted
                  additional Stock Options. The terms and conditions of all
                  grants of Stock Options under the Plan shall be subject to and
                  comply with such rules as may be prescribed by Section 422 of
                  the Code, as from time to time 




                                      -3-
<PAGE>   19



                  amended, and any regulations implementing such statute, except
                  that the Fair Market Value of Shares for which Stock Options
                  are exercisable for the first time may exceed $100,000 per
                  calendar year.

         Each Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as approved by the Committee.

                           Stock Option Price. The option exercise price per
Common Share purchasable under a Stock Option shall be determined by the
Committee at the time of the grant; provided, however, that in no event shall
the exercise price of a Stock Option be less than 100% of the Fair Market Value
of the Shares on the date of the grant of such Stock Option. Notwithstanding the
foregoing, in the case of a Participant who owns Shares representing more than
10% of the outstanding Shares at the time the Incentive Stock Option is granted,
the option exercise price shall in no event be less than 110% of the Fair Market
Value of the Shares at the time the Incentive Stock Option is granted.

                           Stock Option Terms. Subject to the right of the
Company to provide for earlier termination in the event of any merger,
acquisition or consolidation involving the Company, the term of each Stock
Option shall be fixed by the Committee; except that the term of Incentive Stock
Options will not exceed ten years after the date the Incentive Stock Option is
granted; provided, however, that in the case of a Participant who owns a number
of Shares representing more than 10% of the Shares outstanding at the time the
Incentive Stock Option is granted, the term of the Incentive Stock Option shall
not exceed five years.

                           Exercisability. Except as set forth in Section 7(f)
and Section 8 of this Plan, Stock Options awarded under this Plan shall become
exercisable at the rate of one-fifth per year commencing on the date that is one
year after the date of the grant of the Stock Option and shall be subject to
such other terms and conditions as shall be determined by the Committee at the
date of grant.

                           Method of Exercise. A Stock Option may be exercised,
in whole or in part, by giving written notice of exercise to the Company
specifying the number of Shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price in cash or, if acceptable
to the Committee in its sole discretion, in Shares already owned by the
Participant, or by surrendering outstanding Stock Options. The Committee may
also permit Participants, either on a selective or aggregate basis,
simultaneously to exercise Stock Options and sell Shares thereby acquired,
pursuant to a brokerage or similar arrangement, approved in advance by the
Committee, and use the proceeds from such sale as payment of the purchase price
of such Shares.

                           Special Rule for Incentive Stock Options. With
respect to Incentive Stock Options granted under this Plan, to the extent the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the number of Shares with respect to which Incentive Stock
Options are exercisable under all plans of the Company or a Subsidiary for the
first time by a Participant during any calendar year exceeds $100,000, or such
other limit as may be required by the Code, such Stock Options shall be
Non-Qualified Stock Options to the extent of such excess.

                           Time of Granting of Stock Options. The date of grant
of a Stock Option under the Plan to a non-employee Director on the Effective
Date shall be the fifth business day next following the Effective Date. The date
of grant of a Stock Option under the Plan to a non-employee Director who is not
a Director on the Effective Date shall be the effective date of election or
appointment of such Director to the Board or the Board of Directors of a
Subsidiary. Notice of a grant shall be given to each Participant within a
reasonable time after the date of grant.

                  TERMINATION OF EMPLOYMENT OR DIRECTORSHIP.

                           Except in the event of the death or disability of a
Participant, upon the resignation, removal or retirement from the Board or the
Board of Directors of a Subsidiary of any Participant who is a Director or upon
the termination of employment of a Participant who is not a Director, any Stock
Option which has not yet become exercisable shall thereupon terminate and be of
no further force or effect, and any Stock Option which has become exercisable
shall terminate if it is not exercised within 12 months of such resignation,
removal or retirement.

                           Unless the Committee shall specifically state
otherwise at the time a Stock Option is granted, all Stock Options granted under
this Plan shall become exercisable in full on the date of termination of a
Participant's employment or directorship with the Company or a Subsidiary
because of his death or disability, and, subject to extension by the Committee,
all Stock Options shall terminate if not exercised within 12 months of the
Participant's death or disability.



                                      -4-
<PAGE>   20





                           In the event the employment or the directorship of a
Participant is Terminated for Cause (hereinafter defined), any Stock Option
which has not been exercised shall terminate as of the date of such termination
for cause. For the purpose of this Section 8(c), the term "Terminated for Cause"
means any removal of a Director or discharge of an Employee for the personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profits, intentional failure to perform stated duties, willful
violation of a material provision of any law, rule or regulation (other than
traffic violations or similar offenses), a material violation of a final
cease-and-desist order or any other action of a Director or Employee which
results in a substantial financial loss to the Company or a Subsidiary.

                  NON-TRANSFERABILITY OF STOCK OPTIONS.

                  No Stock Option under this Plan, and no rights or interests
therein, shall be assignable or transferable by a Participant except by will,
pursuant to the laws of descent and distribution. During the lifetime of a
Participant, Stock Options are exercisable only by, and payments in settlement
of Stock Options will be payable only to, the Participant or his or her legal
representative.

                  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

                           The existence of this Plan and the Stock Options
granted hereunder shall not affect or restrict in any way the right or power of
the Board or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger, acquisition or consolidation of
the Company, any issuance of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Company's capital stock or the rights thereof,
the dissolution or liquidation of the Company or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
including any merger or acquisition which would result in the exchange of cash,
stock of another company or options to purchase the stock of another company for
any Stock Option outstanding at the time of such corporate transaction or which
would involve the termination of all Stock Options outstanding at the time of
such corporate transaction.

                           In the event of any change in capitalization
affecting the Shares, such as a stock dividend, stock split, recapitalization,
merger, consolidation, split-up, combination or exchange of Shares or other form
of reorganization, or any other change affecting the Shares, such proportionate
adjustments, if any, as the Board in its discretion may deem appropriate to
reflect such change shall be made with respect to the aggregate number of Shares
for which Stock Options in respect thereof may be granted under this Plan, the
maximum number of Shares which may be sold or awarded to any Participant, the
number of Shares covered by each outstanding Stock Option, and the exercise
price per share in respect of outstanding Stock Options.

         The Committee may also make such adjustments in the number of Shares 
covered by, and the exercise price or other value of, any outstanding Stock 
Options in the event of a spin-off or other distribution (other than normal cash
dividends) of Company assets to shareholders. In the event that another
corporation or business entity is being acquired by the Company, and the Company
agrees to assume outstanding employee stock options and/or the obligation to
make future grants of options or rights to employees of the acquired entity, the
aggregate number of Shares available for Stock Options under Section 4 of this
Plan may be increased accordingly.

                  AMENDMENT AND TERMINATION OF THIS PLAN.

                  Without further approval of the shareholders, the Board may at
any time terminate this Plan, or may amend it from time to time in such respects
as the Board may deem advisable, except that the Board may not, without approval
of the shareholders, make any amendment which would (a) increase the aggregate
number of Shares which may be issued under this Plan (except for adjustments
pursuant to Section 10 of this Plan), (b) materially modify the requirements as
to eligibility for participation in this Plan, or (c) materially increase the
benefits accruing to Participants under this Plan. Notwithstanding any other
provision contained in the Plan, in no event shall the provisions of the Plan
with respect to the amount of Shares subject to Stock Options, the exercise
price of Stock Options and the timing of Stock Option grants be amended more
often than once every six (6) months, other than to comport with changes in the
Code, as from time to time amended, the Employee Retirement Income Security Act,
as amended, or the rules and regulations promulgated thereunder.



                                      -5-
<PAGE>   21




                  MODIFICATION OF STOCK OPTIONS.

                  The Board may authorize the Committee to direct the execution
of an instrument providing for the modification of any outstanding Stock Option
which the Board believes to be in the best interests of the Company; provided,
however, that no such modification, extension or renewal shall reduce the
exercise price or confer on the holder of such Stock Option any right or benefit
which could not be conferred on him by the grant of a new Stock Option at such
time and shall not materially decrease the Participant's benefits under the
Stock Option without the consent of the holder of the Stock Option, except as
otherwise permitted under this Plan.

                  MISCELLANEOUS.

                           Tax Withholding. The Company shall have the right to
deduct from any settlement, including the delivery or vesting of Shares, made
under this Plan any federal, state or local taxes of any kind required by law to
be withheld with respect to such payments or to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. If Shares are used to satisfy tax withholding, such
Shares shall be valued based on the Fair Market Value when the tax withholding
is required to be made.

                           No Right to Employment. Neither the adoption of this
Plan nor the granting of any Stock Option shall confer upon any Employee any
right to continued employment with the Company or a Subsidiary, as the case may
be, nor shall it interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of any of its Employees at any time, with
or without cause.

                           Annulment of Stock Options. The grant of any Stock
Option payable in Shares is provisional until the Participant becomes entitled
to the certificate in settlement thereof. In the event the employment or the
directorship of a Participant is Terminated for Cause, any Stock Option which is
provisional shall be annulled as of the date of such termination.

                           Other Company Benefit and Compensation Programs.
Payments and other benefits received by a Participant under a Stock Option made
pursuant to this Plan shall not be deemed a part of a Participant's regular,
recurring compensation for purposes of the termination indemnity or severance
pay law of any country and shall not be included in, nor have any effect on, the
determination of benefits under any other employee benefit plan or similar
arrangement provided by the Company or a Subsidiary unless expressly so provided
by such other plan or arrangement, or except where the Committee expressly
determines that a Stock Option or portion of a Stock Option should be included
to accurately reflect competitive compensation practices or to recognize that a
Stock Option has been made in lieu of a portion of competitive annual cash
compensation. Stock Options under this Plan may be made in combination with or
in tandem with, or as alternatives to, grants, stock options or payments under
any other plans of the Company or a Subsidiary. This Plan notwithstanding, the
Company or any Subsidiary may adopt such other compensation programs and
additional compensation arrangements as it deems necessary to attract, retain
and reward directors and employees for their service with the Company and its
Subsidiaries.

                           Securities Law Restrictions. No Shares shall be
issued under this Plan unless counsel for the Company shall be satisfied that
such issuance will be in compliance with applicable federal and state securities
laws. Certificates for Shares delivered under this Plan may be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Shares are then listed,
and any applicable federal or state securities law. The Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

                           Stock Option Agreement. Each Participant receiving a
Stock Option under this Plan shall enter into an agreement with the Company in a
form specified by the Committee agreeing to the terms and conditions of the
Stock Option and such related matters as the Committee shall, in its sole
discretion, determine.

                           Cost of Plan. The costs and expenses of administering
this Plan shall be borne by the Company.

                           Governing Law. This Plan and all actions taken
hereunder shall be governed by and construed in accordance with the laws of the
State of Ohio, except to the extent that federal law shall be deemed applicable.




                                      -6-
<PAGE>   22




                           Effective Date. This Plan shall be effective upon the
later of adoption by the Board and approval by the Company's shareholders. This
Plan shall be submitted to the shareholders of the Company for approval at an
annual or special meeting of shareholders to be held no sooner than six months
after the effective date of the Conversion of Citizens from mutual to stock
form.



                                      -7-
<PAGE>   23


                                    EXHIBIT B

                       THE CITIZENS LOAN & SAVINGS COMPANY
                           MANAGEMENT RECOGNITION PLAN
                               AND TRUST AGREEMENT


                                    ARTICLE I
                                   DEFINITIONS

         The following words and phrases when used in this Agreement with an
initial capital letter shall have the meanings set forth below, unless the
context clearly indicates otherwise. Wherever appropriate, the masculine pronoun
shall include the feminine pronoun and the singular shall include the plural:

         1.01 "Agreement" means The Citizens Loan & Savings Company Management
Recognition Plan and Trust Agreement.

         1.02 "Association" means The Citizens Loan & Savings Company, a savings
and loan association incorporated under the laws of the State of Ohio.

         1.03 "Award" means a right granted to a Director, Officer or Employee
under this Plan to receive Plan Shares, dividends thereon and earnings on such
dividends.

         1.04 "Beneficiary" means the person or persons designated by a
Recipient to receive any benefits payable under this Plan in the event of such
Recipient's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Recipient's estate.

         1.05 "Board" means the Board of Directors of the Association.

         1.06 "Committee" means the Management Recognition Plan Committee
appointed by the Board pursuant to Article IV hereof.

         1.07 "Common Shares" means common shares of the Corporation.

         1.08 "Conversion" means the conversion of the Association from mutual
to stock form.

         1.09 "Corporation" means London Financial Corporation, a savings and
loan holding company incorporated under the laws of the State of Ohio for the
purpose of holding all of the common shares of the Association issued in
connection with the Conversion.

         1.10 "Director" means any person who is a member of the Board of
Directors of the Corporation, the Association or a Subsidiary.

         1.11 "Effective Date" means the later of the date on which the Plan is
approved by the shareholders of the Corporation and the date on which the Plan
is adopted by the Board.

         1.12 "Employee" means any person who is employed by the Corporation,
the Association or a Subsidiary.

         1.13 "Officer" means a person who holds one of the positions specified
in Article Three of the Code of Regulations of the Corporation or any person who
holds a comparable position with any Parent or Subsidiary of the Corporation.

         1.14 "Person" means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein.

         1.15 "Plan" means the Management Recognition Plan established by this
Agreement.



                                      -1-
<PAGE>   24




         1.16 "Plan Shares" means the Common Shares held pursuant to the Trust
and which are awarded or issuable to a Recipient pursuant to the Plan.

         1.17 "Plan Share Reserve" means the Common Shares held by the Trustee
pursuant to Sections 5.02 and 5.03 of this Agreement.

         1.18 "Recipient" means any Director or Employee who receives an Award
under the Plan.

         1.19 "Subsidiaries" means subsidiaries of the Association which, with
the consent of the Board, agree to participate in the Plan.

         1.20 "Trust" means the trust established by this Agreement.

         1.21 "Trustee(s)" means the person(s) or entity nominated by the
Committee and approved by the Board pursuant to Sections 4.01 and 4.02 to hold
legal title to the Plan assets for the purposes set forth herein.


                                   ARTICLE II
                       ESTABLISHMENT OF THE PLAN AND TRUST

         2.01 The Association hereby establishes a Management Recognition Plan
and Trust upon the terms and subject to the conditions set forth in this
Agreement.

         2.02 The Trustee hereby accepts the Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions of this Agreement.


                                   ARTICLE III
                               PURPOSE OF THE PLAN

         The purpose of the Plan is to reward and retain the Directors, Officers
and Employees of the Corporation, the Association and the Subsidiaries who are
in key positions of responsibility by providing such Directors, Officers and
Employees with an equity interest in the Corporation as reasonable compensation
for their contributions to the Corporation, the Association and the
Subsidiaries.


                                   ARTICLE IV
                           ADMINISTRATION OF THE PLAN

         4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, which shall consist of not less than three members
of the Board who are not Employees. The Committee shall have all of the powers
set forth in this Plan. The interpretation and construction by the Committee of
any provisions of this Agreement or of any Award granted hereunder shall be
final, conclusive and binding, subject to the role of the Board pursuant to
Section 4.02 of this Agreement. The Committee shall act by the vote, or the
written consent, of a majority of its members. The Committee shall report
actions and decisions with respect to the Plan to the Board upon request by the
Board. The Committee shall recommend to the Board one or more persons or
entities to act as Trustee(s) in accordance with the provisions of the Plan and
the Trust and the terms of Article VIII of this Agreement.

         4.02 ROLE OF THE BOARD. The members of the Committee and the Trustee(s)
shall be appointed or approved by and will serve at the pleasure of the Board.
The Board may in its discretion from time to time remove members from or add
members to the Committee and may remove, replace or add Trustee(s). All
decisions, determinations and interpretations of the Board shall be final,
conclusive and binding upon all parties having an interest in the Plan.




                                      -2-
<PAGE>   25





         4.03 LIMITATION ON LIABILITY. No member of the Board or the Committee,
nor any Trustee, shall be liable for any determination made in good faith with
respect to the Plan or any Plan Shares or Awards granted under the Plan. If a
member or Trustee of the Board or of the Committee or any Trustee is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of anything done or not done by such member or Trustee in such capacity
under or with respect to this Plan, the Association shall indemnify such member
or Trustee against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such member or
Trustee in connection with such action, suit or proceeding if such member or
Trustee acted in good faith and in a manner such member or Trustee reasonably
believed to be in or not opposed to the best interests of the Corporation, the
Association and the Subsidiaries and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such member's or Trustee's
conduct was unlawful.


                                    ARTICLE V
                        CONTRIBUTIONS; PLAN SHARE RESERVE

         5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine the
amounts (or the method of computing the amounts) to be contributed by the
Association to the Trust. Such amounts shall be paid to the Trustee at the time
of contribution. No contributions to the Trust by Directors, Officers or
Employees shall be permitted.

         5.02 INVESTMENT OF TRUST ASSETS. Except as otherwise permitted by
Section 8.02 of this Agreement, the Trustee shall invest all of the Trust's
assets, after providing for any required withholding as needed for tax purposes,
exclusively in Common Shares; provided, however, that the Trust shall not
purchase a number of Common Shares equal to more than three percent of the
number of Common Shares issued in connection with the Conversion, except that if
the Association's tangible capital exceeds ten percent, the Trust may purchase a
number of Common Shares equal to up to four percent of the Common Shares issued
in connection with the Conversion. After such investment, the Common Shares
shall be held by the Trustee in the Plan Share Reserve until such Common Shares
are subject to one or more Awards. Any funds held by the Trust before purchasing
Common Shares shall be invested by the Trustee in such interest-bearing account
or accounts at the Association as the Trustee shall determine to be appropriate.

         5.03 EFFECT OF AWARDS, RETURNS AND FORFEITURES UPON PLAN SHARE
RESERVES. Upon the grant of Awards under Section 6.02 of this Agreement, or the
decision of the Committee to return Plan Shares to the Corporation, the Plan
Share Reserve shall be reduced by the number of Plan Shares so allocated or
returned. Any Plan Shares subject to an Award which is subject to forfeiture by
the Recipient pursuant to Section 7.01 of this Agreement shall be retained in
the Plan Share Reserve.


                                   ARTICLE VI
                            ELIGIBILITY; ALLOCATIONS

         6.01 ELIGIBILITY. Directors, Officers and Employees are eligible to
receive Awards.

         6.02 AWARDS TO OFFICERS AND EMPLOYEES. The Committee will determine
which of the Officers and Employees will be granted Awards and the number of
Plan Shares covered by each Award; provided, however, that the aggregate number
of Plan Shares covered by Awards to any one Officer or Employee shall not exceed
25% of the total number of Plan Shares. The number of Plan Shares covered by
such Awards may not exceed the number of Plan Shares in the Plan Share Reserve
immediately before the grant of such Awards. In the event Plan Shares are
forfeited for any reason or additional Plan Shares are purchased by the Trustee,
the Committee may, from time to time, determine which of the Employees will be
granted additional Awards to be awarded from forfeited or additional Plan
Shares.

         In selecting the Officers and Employees to whom Awards will be granted
and the number of shares covered by such Awards, the Committee shall consider
the position, duties and responsibilities of the eligible Officers and
Employees, the value of their services to the Corporation, the Association and
the Subsidiaries and any other factors the Committee may deem relevant.

         6.03 AWARDS TO DIRECTORS. An Award of 1,270 Plan Shares shall be
granted to each non-employee Director on the fifth business day next following
the Effective Date. In addition, an Award of 1,270 Plan Shares shall
automatically be granted to each non-employee Director who was not a Director on
the Effective Date but who is elected or appointed 



                                      -3-
<PAGE>   26



Director subsequent to the Effective Date on the effective date of such election
or appointment. The foregoing notwithstanding, no Award shall be granted if such
grant would result in a violation or possible violation of federal or state
securities laws. Non-employee directors, individually, may not receive Awards
totalling more than 5% of the Plan Shares, and the number of Plan Shares awarded
to all non-employee Directors, in the aggregate, may not exceed 30% of the total
number of Plan Shares.

         6.04 FORM OF ALLOCATION. As promptly as practicable after a
determination is made pursuant to Section 6.02 of this Agreement that an Award
is to be made, or following the grant of an Award pursuant to Section 6.03 of
this Agreement, the Committee shall notify the Recipient in writing of the grant
of the Award, the number of Plan Shares covered by the Award and the terms upon
which the Plan Shares subject to the Award may be earned. The date on which the
Committee determines that an Award is to be made or a later date designated by
the Committee or, in the case of Awards granted pursuant to Section 6.03 of this
Agreement, the fifth business day next following the Effective Date or the
effective date of election or appointment, as appropriate, shall be considered
the date of grant of the Awards. The Committee shall maintain records as to all
grants of Awards under the Plan.

         6.05 AWARDS NOT REQUIRED. None of the Officers or Employees, either
individually or as a group, shall have any right or entitlement to receive an
Award under the Plan. The Committee may, with the approval of the Board, and
shall, if so directed by the Board, return all Common Shares in the Plan Share
Reserve to the Corporation at any time and thereafter cease issuing Awards.

         6.06 SHAREHOLDER APPROVAL. This Agreement shall be submitted to the
shareholders of the Corporation at an annual or special meeting to be held no
sooner than six months after the effective date of the Conversion.
Notwithstanding anything to the contrary in this Agreement, no Awards may be
granted hereunder until the shareholders of the Corporation approve this
Agreement.


                                   ARTICLE VII
             EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS

         7.01 EARNING PLAN SHARES; FORFEITURES.

                    (a) GENERAL RULES. Unless the Committee shall specifically
state a longer period of time over which Awards shall be earned and
non-forfeitable at the time an Award is granted, Plan Shares subject to each
Award shall be earned and non-forfeitable by a Recipient over a period of five
years at the rate of one-fifth per year commencing on the date which is one year
after the date of the grant of such Award.

                    (b) REVOCATION. Unless otherwise permitted by applicable
laws and regulations, any Plan Shares that have not been earned and are not
non-forfeitable in accordance with Section 7.01(a) of this Agreement shall be
forfeited in the event that (i) a Recipient who is a Director ceases to serve on
the Board or (ii) a Recipient who is not a Director of the Association ceases to
be an Employee of the Association, except as otherwise provided in subsection
(c) of this Section 7.01.

                    (c) EXCEPTION FOR TERMINATIONS DUE TO DEATH OR DISABILITY.
All Plan Shares subject to an Award held by a Recipient whose service as a
Director or Employee of the Corporation, the Association or a Subsidiary
terminates due to (i) death or (ii) disability (as determined by the Committee)
shall be deemed fully earned and non-forfeitable as of the later of the
Recipient's last day of service as a Director or the Recipient's last day of
service as an Employee and shall be distributed as soon as practicable
thereafter.

         7.02 DISTRIBUTION OF PLAN SHARES.

              (a) TIMING OF DISTRIBUTIONS: GENERAL RULE. Except as otherwise
provided in this Agreement, Plan Shares shall be distributed to the Recipient or
his Beneficiary, as the case may be, as soon as practicable after they have been
earned.

              (b) FORM OF DISTRIBUTION. All distributions of Plan Shares,
together with any shares representing stock dividends, shall be distributed in
the form of Common Shares. No fractional shares shall be distributed. Payments
representing cash dividends (and earnings thereon) shall be made in cash.




                                      -4-
<PAGE>   27





              (c) WITHHOLDING. The Trustee may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes and, if the amount of such cash payment is not sufficient, the
Trustee may require the Recipient or Beneficiary to pay to the Trustee the
amount required to be withheld as a condition of delivering the Plan Shares. The
Trustee shall pay over to the Association or the Subsidiary which employs or
employed such Recipient or which the Recipient serves or served as a Director,
any such amount withheld from or paid by the Recipient or Beneficiary.

              (d) REGULATORY EXCEPTIONS. Notwithstanding anything to the
contrary in this Agreement, no Plan Shares, upon becoming fully earned and
non-forfeitable, shall be distributed unless and until all of the requirements
of all applicable laws and regulations shall have been met.

         7.03 VOTING OF PLAN SHARES. All Common Shares held by the Trustee in
the Plan Share Reserve which have not yet been earned by a Recipient pursuant to
Section 7.01 of this Agreement shall be voted by the Trustee. A Recipient shall
be entitled to direct the voting of Plan Shares which have been earned pursuant
to Section 7.01 of this Agreement but have not yet been distributed to him.


                                  ARTICLE VIII
                                      TRUST

         8.01 TRUST. The Trustee shall receive, hold, administer, invest and
make distributions and disbursements from the Trust in accordance with the
provisions of the Plan and the Trust and the applicable directions, rules,
regulations, procedures and policies established by the Committee pursuant to
this Agreement.

         8.02 MANAGEMENT OF TRUST. The Trustee shall have complete authority and
discretion with respect to the management, control and investment of the Trust,
and the Trustee shall invest all assets of the Trust, except those attributable
to cash dividends paid with respect to Plan Shares not held in the Plan Share
Reserve, in Common Shares to the fullest extent practicable, and except to the
extent that the Trustee determines that the holding of monies in cash or cash
equivalents is necessary to meet the obligations of the Trust. In performing his
duties, the Trustee shall have the power to do all things and execute such
instruments as may be deemed necessary or proper, including the following
powers:

                    (a) To invest up to one hundred percent of all Trust assets
         in Common Shares without regard to any law now or hereafter in force
         limiting investments for Trustees or other fiduciaries. The investment
         authorized herein may constitute the only investment of the Trust, and,
         in making such investment, the Trustee is authorized to purchase Common
         Shares from the Corporation or from any other source. Such Common
         Shares so purchased may be outstanding, newly issued or treasury
         shares;

                    (b) To invest any Trust assets not otherwise invested in
         accordance with Section 8.02(a) of this Agreement in such deposit
         accounts and certificates of deposit (including those issued by the
         Association), obligations of the United States Government or its
         agencies or such other investments as shall be considered the
         equivalent of cash;

                    (c) To sell, exchange or otherwise dispose of any property 
         at any time held or acquired by the Trust;

                    (d) To cause stocks, bonds or other securities to be
         registered in the name of a nominee, without the addition of words
         indicating that such security is an asset of the Trust (but accurate
         records shall be maintained showing that such security is an asset of
         the Trust);

                    (e) To hold cash without interest in such amounts as may be
         reasonable, in the opinion of the Trustee, for the proper operation of
         the Plan and the Trust;

                    (f) To employ brokers, agents, custodians, consultants and 
         accountants;

                    (g) To hire counsel to render advice with respect to the
         Trustee's rights, duties and obligations hereunder, and such other
         legal services or representation as the Trustee may deem desirable; and




                                      -5-
<PAGE>   28




                    (h) To hold funds and securities representing the amounts to
         be distributed to a Recipient or his Beneficiary as a consequence of a
         dispute as to the disposition thereof, whether in a segregated account
         or held in common with other assets of the Trust.

Notwithstanding anything herein contained to the contrary, the Trustee shall not
be required to make any inventory, appraisal or settlement or report to any
court, or to secure any order of court for the exercise of any power herein
contained, or to give bond.

         8.03 RECORDS AND ACCOUNTS. The Trustee shall maintain accurate and
detailed records and accounts of all transactions of the Trust, which shall be
available at all reasonable times for inspection by any legally entitled person
or entity to the extent required by applicable law, or any other person
determined by the Committee.

         8.04 EARNINGS. All earnings, gains and losses with respect to Trust
assets shall be allocated, in accordance with a reasonable procedure adopted by
the Committee, to bookkeeping accounts for Recipients or to the general account
of the Trust, depending on the nature and allocation of the assets generating
such earnings, gains and losses. Without limiting the generality of the
foregoing, any earnings on cash dividends received with respect to Common Shares
shall be allocated to accounts for Recipients, if such shares are the subject of
outstanding Awards, or otherwise to the Plan Share Reserve.

         8.05 EXPENSES. All costs and expenses incurred in the operation and
administration of the Plan shall be paid by the Association.


                                   ARTICLE IX
                                  MISCELLANEOUS

         9.01 ADJUSTMENTS FOR CAPITAL CHANGES. The aggregate number of Plan
Shares available for issuance pursuant to the Awards and the number of Plan
Shares to which any Award relates shall be proportionately adjusted for any
increase or decrease in the total number of outstanding Common Shares issued
subsequent to the effective date of the Plan if such increase or decrease
resulted from any split, subdivision or consolidation of shares or other capital
adjustment, or other increase or decrease in such shares effected without
receipt or payment of consideration by the Corporation.

         9.02 AMENDMENT AND TERMINATION OF PLAN. The Board may, by resolution,
at any time amend or terminate the Plan; provided, however, that in no event
shall the provisions of the Plan with respect to the number of Plan Shares which
may be subject to Awards and the timing of grants of Awards be amended more
often than once every six (6) months, other than to comport with changes in the
Internal Revenue Code of 1986, as amended (the "Code"), the Employee Retirement
Income Security Act, as amended, or the rules and regulations promulgated
thereunder. The power to amend or terminate the Plan shall include the power to
direct the Trustee to return to the Corporation or the Association all or any
part of the assets of the Trust, including Common Shares held in the Plan Share
Reserve, as well as Common Shares and other assets subject to Awards which are
not yet earned by the Directors or Employees to whom they are allocated;
provided, however, that the termination of the Trust shall not affect a
Recipient's right to earn Awards and to the distribution of Common Shares
relating thereto, and dividends and earnings thereon, in accordance with the
terms of this Agreement and the grant by the Committee or the Board.

         9.03 NONTRANSFERABLE. Awards and rights to Plan Shares shall not be
transferable by a Recipient. During the lifetime of the Recipient, Plan Shares
may only be earned by and paid to the Recipient who was notified in writing of
the Award by the Committee pursuant to Section 6.03 of this Agreement. No
Recipient or Beneficiary shall have any right in or claim to any assets of the
Plan or the Trust, nor shall the Corporation, the Association or any Subsidiary
be subject to any claim for benefits hereunder.

         9.04 DIRECTORSHIP RIGHTS. Neither this Agreement nor any grant of an
Award hereunder nor any action taken by the Trustee, the Committee or the Board
in connection with the Plan shall create any right, either express or implied,
on the part of any Director to continue to serve as a Director of the
Association or a Subsidiary.

         9.05 EMPLOYMENT RIGHTS. Neither this Agreement nor any grant of an
Award hereunder nor any action taken by the Trustee, the Committee or the Board
in connection with the Plan shall create any right, either express or implied,
on the part of any Employee to continue in the employ of the Corporation, the
Association or a Subsidiary.




                                      -6-
<PAGE>   29





         9.06 VOTING AND DIVIDEND RIGHTS. No Recipient shall have any voting or
dividend rights or other rights of a shareholder in respect of any Plan Shares
covered by an Award, except as expressly provided in Sections 7.02 and 7.03 of
this Agreement, prior to the time such Plan Shares are actually distributed to
such Recipient.

         9.07 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Ohio, except to the extent that federal law shall
be deemed applicable.

         9.08 EFFECTIVE DATE. Subject to Section 6.06 of this Agreement, this
Agreement shall be effective as of the ___ day of ____________, 1997.

         9.09 TERM OF PLAN. The Plan shall remain in effect until the earlier of
(a) the termination of the Plan by the Board or (b) the distribution of all
assets from the Trust. The termination of the Plan shall not affect any Awards
previously granted and such Awards shall remain valid and in effect until they
have been earned and paid or by their terms expire or are forfeited.

         9.10 TAX STATUS OF TRUST. It is intended that the trust established
hereby be treated as a grantor trust of the Association under the provisions of
Section 671, et seq., of the Code.

         IN WITNESS WHEREOF, the following Trustees execute this Agreement,
accepting and binding themselves to undertake and perform the obligations and
duties of the Trustee hereunder and consenting to the foregoing Agreement
effective the ___ day of ____________, 1997.



                              By:                             (Trustee)
                                  ---------------------------


                              By:                             (Trustee)
                                  ---------------------------

         IN WITNESS WHEREOF, the Association has caused this Agreement to be
executed by its duly authorized officer and duly attested, all as of the ___ day
of ____________, 1997.

                                         THE CITIZENS LOAN & SAVINGS COMPANY



                                         By: 
                                             ---------------------------
                                                John J. Bodle
                                                 its President

ATTEST:


-----------------------
Rebecca A. Lohr
its Secretary




                                      -7-