SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
OHIO VALLEY BANC CORP.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
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[OHIO VALLEY BANC CORP LETTERHEAD]
ANNUAL MEETING OF SHAREHOLDERS
Wednesday, April 7, 1999
TO OUR SHAREHOLDERS:
We take pleasure in inviting you to our Annual Meeting of Shareholders, which
will be held on Wednesday, April 7, 1999, at 5:00 p.m., Eastern Daylight Time,
at the Morris and Dorothy Haskins Ariel Theatre, 426 Second Avenue, Gallipolis,
Ohio.
The Annual Meeting will be held for the purpose of electing Directors;
considering and voting upon a proposal to adopt an amendment to Article FOURTH
of the Company's Amended Articles to increase the number of authorized shares of
the Company from 5,000,000 to 10,000,000; and transacting such other business as
may properly be brought before it. At the meeting, we shall also report to you
on our operations during the past year and plans for the future.
The close of business on March 10, 1999, has been fixed as the record date for
determination of shareholders entitled to notice of the Annual Meeting and to
vote at the Meeting or any adjournment thereof.
The formal notice of Annual Meeting, the Proxy Statement and a proxy card are
enclosed. After reading the Proxy Statement, will you please promptly fill in,
sign and return to us the enclosed proxy card, to insure that your shares will
be represented.
In addition to electing Directors, we are asking you to consider and vote upon a
proposal to adopt an amendment to Article FOURTH of the Company's Amended
Articles to increase the number of authorized shares of the Company from
5,000,000 to 10,000,000, all of which shall be Common Shares, each without par
value.
We believe that the Company's best interests will be served by your approval of
the proposed amendment. We urge you, therefore, to vote affirmatively FOR the
adoption of the proposal to increase the number of Common Shares the Company is
authorized to have outstanding.
Last year, more than 83% of the Company's shares were represented in person or
by proxy at the Annual Meeting. The Company appreciates this interest on your
part.
We hope to see many of you in person at the Annual Meeting. There will be a
social hour beginning at 4:00 p.m. Hors D'oeuvres and beverages will be served,
and we hope you will take this opportunity to become acquainted with the
officers and Directors of your Company. We urge you to fill in, sign and return
your proxy card in the envelope provided.
Sincerely,
/s/ James L. Dailey /s/ Jeffrey E. Smith
James L. Dailey Jeffrey E. Smith
Chairman and President, Chief Operating
Chief Executive Officer Officer and Treasurer
Dated: March 17, 1999
OHIO VALLEY BANC CORP.
P.O. BOX 240
GALLIPOLIS, OHIO 45631
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Gallipolis, Ohio
March 17, 1999
To the Shareholders of
Ohio Valley Banc Corp.
Notice is hereby given that the Annual Meeting of Shareholders of Ohio
Valley Banc Corp. (the "Company") will be held at the Morris and Dorothy Haskins
Ariel Theatre, 426 Second Avenue, Gallipolis, Ohio, on Wednesday, the 7th day of
April, 1999, at 5:00 p.m., Eastern Daylight Time, for the following purposes:
1. To elect three Directors of the Company to serve for three-year terms
until the 2002 Annual Meeting of Shareholders and until their
successors are elected and qualified.
2. To consider and vote upon a proposal to adopt an amendment to Article
FOURTH of the Company's Amended Articles to increase the number of
authorized shares of the Company from 5,000,000 to 10,000,000, all of
which shall be Common Shares, each without par value.
3. To transact such other business as may properly come before the meeting
or any adjournment(s) thereof.
Holders of Common Shares of the Company of record at the close of
business on March 10, 1999, will be entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/James L. Dailey
James L. Dailey,
Chairman and Chief Executive Officer
/s/Jeffrey E. Smith
Jeffrey E. Smith,
President, Chief Operating Officer and Treasurer
1
OHIO VALLEY BANC CORP.
P.O. Box 240
Gallipolis, Ohio 45631
March 17, 1999
PROXY STATEMENT
This Proxy Statement is first being mailed on or about March 17, 1999,
to all shareholders of record at the close of business on March 10, 1999,
regarding the Annual Meeting of Shareholders of Ohio Valley Banc Corp. (the
"Company") to be held at the Morris and Dorothy Haskins Ariel Theatre, 426
Second Avenue, Gallipolis, Ohio, on Wednesday, April 7, 1999, at 5:00 p.m.,
Eastern Daylight Time (the "Annual Meeting").
The accompanying proxy is solicited by the Board of Directors of the
Company. The cost of this solicitation will be borne by the Company. Although
the solicitation of proxies will be made primarily by mail, proxies may also be
solicited by some of the Company's Directors, officers, and regular employees
who may communicate with shareholders personally and by mail, telephone, or
telegram to request the return of the proxies.
The Annual Report of the Company for the fiscal year ended December 31,
1998, including financial statements, is enclosed with this Proxy Statement.
Voting Rights and Proxies
- -------------------------
Only shareholders of record at the close of business on March 10, 1999,
are entitled to vote at the Annual Meeting. As of February 10, 1999, the Company
had outstanding and entitled to vote at the Annual Meeting 2,825,436 common
shares, without par value ("Common Shares"). The number of Common Shares
outstanding and entitled to vote at the Annual Meeting identified above is
subject to increase, prior to the record date of March 10, 1999. Additional
Common Shares, which are currently authorized but not issued, may be issued
prior to March 10, 1999, pursuant to the voluntary purchase provisions of the
Company's Dividend Reinvestment Plan. These additional Common Shares which may
be issued after February 10, 1999, but prior to March 10, 1999, are entitled to
the same voting rights as referenced above.
Shareholdings of Management
- ---------------------------
The following table indicates the only holder known by the Company to
be the beneficial owner of more than five percent (5%) of the outstanding Common
Shares of the Company.
No. of Common Shares and Percent of
Name and Address Nature of Beneficial Ownership Class (1)
- ---------------- ------------------------------ ---------
Morris E. Haskins
1 Vine Street
Gallipolis, Ohio 45631 258,178 (2) 9.16%
(1) The percent of class is based upon 2,825,436 Common Shares outstanding as of
February 10, 1999.
2
(2) Based on information contained in a schedule 13G filing with the Securities
and Exchange Commission, dated February 11, 1999, Morris E. Haskins beneficially
owns 258,178 Common Shares. That filing shows Mr. Haskins has sole voting power
over 258,178 Common Shares.
The following table indicates, as of February 10, 1999, the number and
percentage of outstanding Common Shares of the Company beneficially owned by
each Director of the Company, by each nominee for election to the Board of
Directors, and by all Directors and Executive Officers of the Company as a
group.
No. of Common Shares and Percent of
Name and Address Nature of Beneficial Ownership* Class
- ----------------- ------------------------------ -------
James L. Dailey** 23,136 .82%
445 Third Avenue
Gallipolis, Ohio 45631
Jeffrey E. Smith** 10,596 .38%
20 Cedar Street
Gallipolis, Ohio 45631
Phil A. Bowman 20,184 .71%
20 Robin Hill
Jackson, OH 45640
Keith R. Brandeberry, M.D. 56,451 2.00%
401 First Avenue
Gallipolis, Ohio 45631
W. Lowell Call 11,087 .39%
399 Maple Drive
Gallipolis, Ohio 45631
Robert H. Eastman 32,030 1.13%
4551 State Route 588
Gallipolis, Ohio 45631
Merrill L. Evans 39,842 1.41%
2362 East Bethel Church Road
Gallipolis, Ohio 45631
Warren F. Sheets 112,705 3.99%
120 First Avenue
Gallipolis, Ohio 45631
Thomas E. Wiseman 7,291 .26%
619 Fourth Avenue
Gallipolis, Ohio 45631
All Directors and Executive 343,313 12.15%
Officers as a Group
(11 persons)
3
* Included are Common Shares owned by each Director, each nominee,
Executive Officer or group and, in certain instances, by his spouse and
minor children, and Common Shares over which each Director, nominee or
Executive Officer has full voting control and power of disposition.
Also included in the Common Shares listed for Messrs. Dailey and Smith
are Common Shares allocated to each individual in the Company's
Employee Stock Ownership Plan.
** Executive Officer of the Company and/or Bank.
PROXY ITEM 1: ELECTION OF DIRECTORS
- ------------- ---------------------
The Company's Board of Directors consists of nine (9) members divided
into three (3) classes. The terms of office of three (3) Directors of one (1)
class expire at the Annual Meeting. Directors elected at the Annual Meeting
shall serve a three (3) year term until the 2002 Annual Meeting of Shareholders
and until their respective successors are elected and qualified. The enclosed
proxy, if properly executed and returned without voting instructions, will be
voted for the three (3) nominees listed below. The Board of Directors of the
Bank has followed a policy that a Director of the Bank shall retire at the
Annual Meeting of Shareholders following the calendar year in which the Director
attains the age of 70. The policy does not apply to any member of the Board of
the Bank who was a member of the Board on December 2, 1980, the date of the
adoption of this policy, except for Merrill Evans, who has specifically
requested that this policy apply to his tenure on the Board of the Bank. In
observance of this policy, a Director of the Company will not stand for
re-election as a Director of the Company following the completion of the term
during which he attains the age of 70.
Article Two of the Company's Code of Regulations prescribes the method
for a shareholder to nominate a candidate for election to the Board of
Directors. Nominations, other than those made by or on behalf of the existing
Board of Directors of the Company, must be made in writing and must be delivered
or mailed to the President of the Company not less than 14 days, nor more than
50 days, prior to any meeting of shareholders called for the election of
Directors. Such notification must contain the following information:
a. name and address of each proposed nominee;
b. principal occupation of each proposed nominee;
c. total number of shares of capital stock of the Company that will be
voted for each proposed nominee;
d. name and residence address of the notifying shareholder; and
e. number of shares of capital stock of the Company owned by the
notifying shareholder.
As of the date of this Proxy Statement, no persons have been so nominated for
election at this Annual Meeting.
4
The table below sets forth certain information as to each nominee for
election as Director and each Director who will continue to serve after the
Annual Meeting.
If for any reason, any nominee named below should not be a candidate
for election at the time of the Annual Meeting, the proxies may be voted for a
substitute nominee in the discretion of those persons designated by the Board to
serve as proxies. The Company's Management has no reason to believe that any
nominee will be unavailable. The nominees receiving the greatest number of votes
will be elected. Common Shares as to which the authority to vote is withheld
will not be counted toward the election of Directors or toward the election of
the individual nominees specified on the form of proxy.
Director
Director of the
of the Company
Name Age Principal Occupation* Bank Since Since
- ---- --- --------------------- ---------- ------
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 2002
James L. Dailey 64 Chairman and Chief 1970 1992
Executive Officer
of the Company and the
Bank
Phil A. Bowman** 53 Mining Consultant and 1997 1999
Developer
W. Lowell Call**/*** 62 Vice President, Sausage 1986 1992
Production, Bob Evans
Farms, Inc.
DIRECTORS WITH TERMS EXPIRING IN 2000
Keith R. Brandeberry, M.D.** 77 Physician 1968 1992
Merrill L. Evans 66 Developer, Farmer and 1979 1992
President, Evans
Enterprises, Inc.
Thomas E. Wiseman*** 40 President, The 1992 1992
Wiseman Agency, Inc.
5
DIRECTORS WITH TERMS EXPIRING IN 2001
Jeffrey E. Smith 49 President and 1986 1992
Chief Operating Officer of
the Company and the
Bank, Treasurer
of the Company
Robert H. Eastman*** 58 President of Ohio 1986 1992
Valley Supermarkets,
Inc.
Warren F. Sheets 74 Attorney, Warren F. 1974 1992
Sheets Co., LPA
* Each of the Directors has held the respective position with the Company
or the other companies listed for a period of at least five years.
** Member of the Examination and Audit Committee of the Bank. The
Committee is charged by Ohio law with responsibility for the Bank's
audit. The Committee met twelve (12) times during 1998. The Bank's
annual audit is reviewed by the entire Board of Directors. Neither the
Board of the Company nor the Bank has a standing Nominating Committee,
or a committee performing similar functions.
*** Member of the Compensation Committee of the Company. The Compensation
Committee establishes the compensation of Executive Officers of the
Bank. This Committee met eight (8) times during 1998.
During the past year, the Board of Directors of the Company met eight
(8) times, and the Board of the Bank met fifteen (15) times. Each of the
Directors attended more than 75% of the aggregate of the total number of Board
meetings and the total number of meetings held by committees of the Boards on
which he served during the year except for Warren F. Sheets who was unable to do
so due to the illness of his wife.
6
Remuneration of Executive Officers
- ----------------------------------
The following table shows, for the three fiscal years ended December
31, 1998, compensation paid by the Company for services in all capacities to the
following Executive Officers of the Company who earned salary and bonus in
excess of $100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation
================================================================================
Name and Principal Year Salary(1) Bonus(2) All Other Compensation
Position ($) ($) ($)
================================================================================
James L. Dailey 1998 $95,638 $104,592 $11,627 (3)
Chairman and 1997 91,249 100,367 14,620
Chief Executive 1996 86,319 91,342 13,845
Officer of the
Company and
the Bank
Jeffrey E. Smith 1998 $83,054 $96,992 $10,988 (4)
President 1997 73,345 92,612 14,044
and Chief 1996 63,145 84,243 13,079
Operating
Officer of the
Company and the
Bank, and Treasurer
of the Company
Charles C. Lanham 1998 $43,896 $67,760 $ 6,774 (5)
Senior Vice President 1997 10,800 14,320 0
of the Company and
Executive Vice
President of the Bank
(1) "Salary" includes Director's fees received by Messrs. Dailey and Smith
during each of 1998, 1997 and 1996 fiscal years in the amount of
$2,400 per year. Director's fees received by Mr. Lanham during 1998
and 1997 were $2,400 and $600.00, respectively. Mr. Lanham joined the
Company on October 1, 1997.
(2) "Bonus" includes Director's Bonus received by Messrs. Dailey and Smith
during each of 1998, 1997 and 1996 fiscal years in the amounts of
$15,933, $15,320 and $13,927, respectively. Messrs. Dailey and Smith
have chosen to defer a portion of their bonus under the Company's
deferred compensation plan for Directors and Executive Officers
implemented in 1996. Director's Bonus received by Mr. Lanham during
1998 and 1997 was $15,933 and $5,107, respectively.
7
(3) Includes $2,157 allocated to Mr. Dailey pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Banc
Corp. Profit Sharing Plan; $1,608 allocated to Mr. Dailey pursuant to
Company contributions and reallocated forfeitures under the 401-K plan
which is provided for under the Ohio Valley Banc Corp. Profit Sharing
Plan; $6,986 allocated to Mr. Dailey pursuant to Company contributions
and reallocated forfeitures under the Ohio Valley Banc Corp. Employee
Stock Ownership Plan; and $876 premium paid by the Company for a life
insurance policy on the life of Mr. Dailey, pursuant to the terms of
the Company's group life insurance contracts. The proceeds are payable
in the amount of two times the aggregate of: the employee's base salary
for the current calendar year in which the employee's death occurs,
including any base salary which is deferred under a qualified or
non-qualified deferral plan plus bonuses and any Director's fees paid
in the previous calendar year, also including any bonus and Director's
fee which is deferred under a qualified or non-qualified deferral plan.
(4) Includes $2,157 allocated to Mr. Smith pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Banc
Corp. Profit Sharing Plan; $1,608 allocated to Mr. Smith pursuant to
Company contributions and reallocated forfeitures under the 401-K plan
which is provided for under the Ohio Valley Banc Corp. Profit Sharing
Plan; $6,986 allocated to Mr. Smith pursuant to Company contributions
and reallocated forfeitures under the Ohio Valley Banc Corp. Employee
Stock Ownership Plan; and $237 of premium paid by the Company for a
life insurance policy on the life of Mr. Smith, pursuant to the terms
of the Company's group life insurance contracts. The proceeds are
payable in the amount of two times the aggregate of: the employee's
base salary for the current calendar year in which the employee's death
occurs, including any base salary which is deferred under a qualified
or non-qualified deferral plan plus bonuses and any Director's fees
paid in the previous calendar year, also including any bonus and
Director's fee which is deferred under a qualified or non-qualified
deferral plan.
(5) Includes $1,514 allocated to Mr. Lanham pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Banc
Corp. Profit Sharing Plan; $5 allocated to Mr. Lanham pursuant to
Company contributions and reallocated forfeitures under the 401-K plan
which is provided for under the Ohio Valley Banc Corp. Profit Sharing
Plan; $4,904 allocated to Mr. Lanham pursuant to Company contributions
and reallocated forfeitures under the Ohio Valley Banc Corp. Employee
Stock Ownership Plan; and $351 of premium paid by the Company for a
life insurance policy on the life of Mr. Lanham, pursuant to the terms
of the Company's group life insurance contracts. The proceeds are
payable in the amount of two times the aggregate of: the employee's
base salary for the current calendar year in which the employee's death
occurs, including any base salary which is deferred under a qualified
or non-qualified deferral plan plus bonuses and any Director's fees
paid in the previous calendar year, also including any bonus and
Director's fee which is deferred under a qualified or non-qualified
deferral plan.
8
Compensation of Directors
- -------------------------
No member of the Board of Directors of the Company received
remuneration in 1998 for his services as such. All of the Directors of the
Company serve as Directors of the Bank. In 1998 and 1997, each individual who
was not a salaried officer of the Bank received $300 per month for his service
as a member of the Board of Directors of the Bank. Directors Dailey, Smith and
Lanham (who is a Director of the Bank but not of the Company) received $200 per
month for their services. The Bank Board met fifteen (15) times in 1998. All
Directors received $300 as a monthly fee in fiscal year 1996 except Mr. Dailey
and Mr. Smith who both received $200 as a monthly fee. In addition, it is the
practice of the Bank to pay a bonus to its Directors based upon the performance
of the Bank. For 1998, each Director of the Bank received a bonus of $15,933.
For 1997, each Director of the Bank received a bonus of $15,320. This bonus
figure was pro-rated for time served for new Directors Phil A. Bowman, Art E.
Hartley, Sr., Charles C. Lanham and Lannes C. Williamson (who were Directors of
the Bank but not of the Company) and specifically includes amounts participating
Directors may have chosen to defer under the Company's deferred compensation
plan for Directors and Executive Officers implemented in 1996. The bonus paid to
each Director in fiscal year 1996 was $13,927. Mr. Evans, Dr. Brandeberry, Mr.
Haskins, and Mr. Wiseman each received an additional $39,229 in 1998, $38,597 in
1997 and $36,618 in 1996 for their service as members of the Executive Committee
of the Board of Directors of the Bank, which met fifty-two (52) times in 1998,
forty-nine (49) times in 1997 and fifty (50) times in 1996. Executive Committee
members who are employees of the Bank receive no compensation for serving on the
Executive Committee. The Company maintains a life insurance policy with a death
benefit of two times annual Director fees reduced by 35% at age 65 and reduced
by 50% at age 70.
In December 1996, life insurance contracts were purchased by the
Company. The Company is the owner of the contracts. One of the purposes of these
contracts was to replace a current group life insurance program for Executive
Officers and implement a deferred compensation plan for Directors and Executive
Officers in 1996. Participants in the deferred compensation plan are eligible to
receive distribution of their contributions, plus accrued interest earned at no
greater than market rate on reinvestment of the contributions, upon reaching age
70, provided that, if a participant dies before reaching age 70 and the
participant qualifies, distribution will be made to the participant's designated
beneficiary in an amount equal to what the Director would have accumulated if
the participant had reached age 70 and had continued to make contributions to
the plan. The cost of providing the benefits to the participants will be offset
by the earnings on the life insurance contracts.
Report of the Compensation Committee of the Board of Directors
- --------------------------------------------------------------
on Executive Compensation
- -------------------------
This Report and the graph set forth on page 13 shall not be incorporated by
reference into any filings of the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, that might
incorporate future filings.
9
DECISION-MAKING PROCESS. The Executive Officers of the Company receive
no compensation from the Company. Instead, they are paid by the Bank for
services rendered in their capacity as Executive Officers of the Company and the
Bank. On April 8, 1998, the Board of Directors of the Company re-elected the
following non-employee Directors to the Compensation Committee:
Thomas E. Wiseman, Chairman
W. Lowell Call
Robert H. Eastman
In 1993, the Bank engaged Crowe, Chizek and Company LLP, the Company's
and the Bank's independent auditors, to construct a comprehensive wage and
salary administration plan for the Bank to be used for all its employees.
The Compensation Committee conducted the same written comprehensive
performance appraisal on James L. Dailey, Jeffrey E. Smith and Charles C. Lanham
that was conducted on all other employees of the Bank, evaluating their ability
to achieve or exceed the expected requirements of their respective jobs based on
their specific job content questionnaires. From this appraisal, a performance
rating on each individual was developed. The Compensation Committee met with
Messrs. Dailey, Smith and Lanham eight (8) times during 1998 to review their
performance and the goals established for each.
In 1993 and again in 1996, a marketplace range was developed by Crowe,
Chizek and Company LLP for all jobs at the Bank including those of Messrs.
Dailey, Smith and Lanham. These ranges were revised in 1998 using the Crowe
Chizek Bank Compensation Survey and the 1998 Ohio Bankers Association
Compensation Survey. The performance rating of Mr. Dailey and Mr. Smith and
their position in the marketplace range were used to determine their respective
bonuses for 1998, 1997 and 1996 and their 1999, 1998 and 1997 salaries. The
performance rating of Mr. Lanham and his position in the marketplace range was
used to determine his bonus for 1998 and 1997 and his 1999 and 1998 salaries.
(Mr. Lanham joined the Bank in October 1997). Messrs. Dailey, Smith and Lanham
received salary increases in 1998, as indicated in the Summary Compensation
Table on page 7 of this Proxy Statement.
PHILOSOPHY AND CEO COMPENSATION. The compensation philosophy of the
Company and the Bank is that compensation of its Executive Officers and others
should be directly and materially linked to corporate operating performance. To
achieve this correlation, executive compensation is heavily weighted toward
bonuses paid on the basis of corporate performance. It is a historical fact,
therefore, that in years when the Bank has performed well, its officers have
received greater compensation and in less profitable years, the officers' pay
has been negatively impacted to a substantial degree. The cash compensation
program for Executive Officers consists of two elements, a base salary component
and a bonus component. The bonus component consists of two bonus pools, one for
all Directors and one for all officers and employees. An Executive Officer, if a
Director, may be eligible to participate in the Directors' pool as well as the
officers' pool.
The objectives of the bonus component are to (i) motivate Executive
Officers and all others and to reward such persons for the accomplishment of
annual objectives of the Company and the Bank, (ii) reinforce a strong
performance orientation with differentiation and variability in individual
awards based on contribution to annual and long-range business results and (iii)
provide a fully competitive compensation package which will attract, reward, and
retain individuals of the highest quality.
10
The decision-making process and compensation philosophy of the Company
and the Bank were considered by the Compensation Committee when determining 1998
compensation for James L. Dailey, Chairman and Chief Executive Officer, Jeffrey
E. Smith, President, Chief Operating Officer, of the Company and the Bank and
Charles C. Lanham, Senior Vice President of the Company and Executive Vice
President of the Bank. The Compensation Committee believes that the compensation
earned by Messrs. Dailey, Smith and Lanham in 1998 was fair and reasonable when
compared with executive compensation levels in the banking industry as reported
in the marketplace range developed. Mr. Dailey and Mr. Smith ranked in the
middle one-third of the total compensation marketplace range for their
respective grades, and Mr. Lanham ranked in the lower one-third.
Submitted by:
Compensation Committee Members
Thomas E. Wiseman, Chairman
W. Lowell Call
Robert H. Eastman
Other Transactions with Management
- ----------------------------------
The Company through its subsidiary, the Bank, has had and expects to
have in the future banking transactions in the ordinary course of the Bank's
business with some of the Directors, officers and principal stockholders of the
Company and entities with which they are associated. All loans and commitments
to loan included in such transactions were made on substantially the same terms,
including interest rates and collateral on loans and repayment terms, as those
prevailing at the time for comparable transactions with other persons and, in
the opinion of the Management of the Company, each such loan and commitment to
loan did not involve more than a normal risk of uncollectibility or present
other unfavorable features. The aggregate amount of loans to officers and
Directors of the Company, entities in which such officers and Directors have an
interest, and affiliates and other associates of officers and Directors was
$15,564,500 at December 31, 1998. As of the date hereof, all of such loans were
performing loans.
PROXY ITEM 2: APPROVAL OF AMENDMENT TO THE AMENDED ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF SHARES OF
AUTHORIZED COMMON STOCK
On January 19, 1999, the Company's Board of Directors unanimously
adopted a resolution proposing that Article FOURTH of the Amended Articles of
the Company be amended to increase the number of shares of Common Stock that the
Company has the authority to issue from 5,000,000 to 10,000,000. The Board of
Directors recommends that the shareholders of the Company approve this proposed
amendment to the Amended Articles.
Pursuant to Article FOURTH of the Amended Articles, the Company's
authorized capital currently consists of 5,000,000 Common Shares. As of February
10, 1999, the Company had 2,825,436 Common Shares outstanding. In addition, as
of the same date approximately 711,204 Common Shares were reserved for issuance
under the Company's Dividend Reinvestment Plan. Accordingly, as of February 10,
1999, an aggregate of 3,536,640 Common Shares were outstanding or reserved for
issuance, and there remained an aggregate of 1,463,360 Common Shares available
for issuance.
11
The Board of Directors believes that it is in the best interests of the
Company and its shareholders to increase the number of authorized Common Shares.
The additional Common Shares would be available for issuance at such times and
for such purposes as the Board of Directors may deem advisable without further
action by the Company's shareholders, except as may be required by applicable
laws or regulations or by the rules of The NASDAQ Stock Market, Inc. or any
other stock exchange on which the Company's Common Shares are traded at the time
of issuance. This flexibility will enhance the Company's ability to issue shares
to meet a variety of business needs as they may arise, including stock
dividends, stock splits, dividend reinvestment, acquisitions, employee benefit
programs, or other corporate purposes. Although the Board may periodically
consider transactions as those listed above, it currently has no agreements,
commitments or definitive plans to issue additional Common Shares, other than
shares currently reserved for issuance.
Because the holders of Common Shares do not have preemptive rights, the
issuance of Common Shares otherwise than on a pro-rata basis to all current
stockholders could reduce the current holders' proportionate interests. The
newly authorized shares, once issued, will have the same terms and grant holders
the same rights as shares presently outstanding. While the issuance of shares in
certain instances may have the effect of making a takeover of, or other
acquisition transaction involving, the Company more difficult or costly, the
Board does not intend or view the increase in authorized Common Shares as an
anti-takeover measure, nor is the Company aware of any proposed or pending
transaction of this type.
If the proposed amendment to the Certificate of Incorporation is
approved, the first paragraph of Article FOURTH of the Amended Articles will be
amended in its entirety to read as follows:
"FOURTH: The authorized number of shares of the corporation shall be
ten million (10,000,000), all of which shall be Common Shares, without
par value."
THE APPROVAL OF THE PROPOSED AMENDMENT TO THE CERTIFICATE OF
INCORPORATION REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
OUTSTANDING COMMON SHARES. As soon as practicable after such affirmative vote
has been taken and certified, the amendment to the Amended Articles will be
filed with the Secretary of State of Ohio.
The Board of Directors unanimously recommends a vote FOR approval of
the proposed amendment to the Amended Articles. Proxies will be voted FOR
approval of the proposed amendment to the Amended Articles unless otherwise
specified in the proxy.
12
Performance Graph
- -----------------
The following graph sets forth a comparison of five year cumulative
total return among the Company's Common Shares (indicated "OVB" on the
Performance Graph), the S & P 500 Index and the Keefe, Bruyette & Woods, Inc.
KBW 50 Index-Midwest (the "KBW-Midwest Index") (indicated "Midwest" on the
Performance Graph) for the fiscal years indicated. Information reflected on the
graph assumes an investment of $100 on December 31, 1993 in each of the Common
Shares, the S & P 500 Index and the KBW-Midwest Index. Cumulative total return
assumes reinvestment of dividends. The KBW-Midwest Index represents stock price
performance of thirteen (13) of the nation's large banks or bank holding
companies located in the midwest region of the United States, as selected by
Keefe, Bruyette & Woods, Inc. The Company is not among the thirteen (13)
companies included in the KBW-Midwest Index. The Company has not identified at
this time any published index of stock performance which includes the Company or
bank holding companies comparable to it.
INDEX OF TOTAL RETURNS
S&P 500, MIDWEST, OVB
1993-1998
Q4 93 Q4 94 Q4 95 Q4 96 Q4 97 Q4 98
----- ----- ----- ----- ----- -----
S&P 500 $100 $101 $139 $171 $229 $294
MIDWEST $100 $91 $138 $188 $281 $307
OVB $100 $113 $139 $175 $247 $426
13
Information Concerning Independent Certified Public Accountant
- --------------------------------------------------------------
Crowe, Chizek and Company LLP, which has served as independent auditors
for the Company since 1992, has been selected by management to serve in that
capacity for the 1999 fiscal year. Representatives of Crowe, Chizek and Company
LLP are expected to be in attendance at the Annual Meeting. These
representatives will have the opportunity to make a statement if they desire to
do so and are expected to be available to respond to appropriate questions. In
connection with its annual audit services, Crowe, Chizek and Company LLP
examined the Company's annual financial statements, performed the annual
Directors' examination and reviewed annual report filings with the Federal
Deposit Insurance Corporation.
In addition to its annual audit function, Crowe, Chizek and Company LLP
provided other professional services consisting principally of the preparation
and review of the corporate federal income tax return for the Company. The Board
of Directors has approved each professional service provided by Crowe, Chizek
and Company LLP during the last year. As a part of this approval process, the
Board of Directors considers whether the performance of each professional
service would impair the independence of Crowe, Chizek and Company LLP as
auditors for the Company.
Annual Report - Form 10-K
- -------------------------
The Company will provide without charge to any shareholder of record on
March 10, 1999, on the written request of any such shareholder, a copy of the
Company's Annual Report on Form 10-K, including Financial Statements and
Schedules thereto, required to be filed under the Securities Exchange Act of
1934, as amended, for the Company's fiscal year ended December 31, 1998. Such
written request should be directed to Wendell B. Thomas, Secretary, Ohio Valley
Banc Corp., P.O. Box 240, Gallipolis, Ohio 45631, telephone number
1-740-446-2631.
Proxy Statement Proposals
- -------------------------
Each year, the Board of Directors submits its nominations for election
of Directors at the Annual Meeting of Shareholders. Other proposals may be
submitted by the Board of Directors or shareholders for inclusion in the Proxy
Statement for action at the Annual Meeting. Any proposal submitted by a
shareholder for inclusion in the Proxy Statement for the 2000 Annual Meeting,
presently scheduled for April 12, 2000, must be received by the Company on or
before November 17, 1999. If a shareholder intends to present a proposal at the
2000 Annual Meeting, but has not sought the inclusion of such proposal in the
Company's proxy materials, such proposal must be received by the Company prior
to February 27, 2000, or the Company's management proxies for the 2000 Annual
Meeting will be entitled to use their discretionary voting authority should such
proposal then be raised, without any discussion of the matter in the Company's
proxy materials.
Reports to be Presented at the Meeting
- --------------------------------------
There will be presented at the meeting the Company's Annual Report for
the year ended December 31, 1998, containing financial statements for such year
and the signed opinion of Crowe, Chizek and Company LLP, independent certified
public accountant, with respect to such financial statements. The Annual Report
is not to be regarded as proxy soliciting material, and Management does not
intend to ask, suggest or solicit any action from the shareholders with respect
to such Report.
14
Other Matters
- -------------
The only business which Management intends to present at the Annual
Meeting consists of the matters set forth in this Proxy Statement. Management
knows of no other matters to be brought before the Annual Meeting by any other
person or group.
If any other matters should properly come before the Annual Meeting,
the proxy holders will vote thereon in their discretion.
All duly executed proxies received will be voted.
You are requested to sign and date the enclosed proxy and mail it
promptly in the enclosed envelope. If you later desire to vote in person or to
change or withdraw your vote, you may revoke your proxy either by written notice
to the Company, to the attention of James L. Dailey, Chairman, or in person at
the Annual Meeting (without affecting any vote previously taken).
BY ORDER OF THE BOARD OF DIRECTORS
James L. Dailey,
Chairman and Chief Executive Officer
Jeffrey E. Smith,
President, Chief Operating Officer and Treasurer
15
PROXY
OHIO VALLEY BANC CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints James L. Dailey, Jeffrey E. Smith, and
Wendell B. Thomas, and each of them with full power of substitution to each, the
true and lawful attorneys and proxies of the undersigned to vote all of the
Common Shares which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of Ohio Valley Banc Corp., to be held at the Morris and Dorothy
Haskins Ariel Theatre, 426 Second Avenue, Gallipolis, Ohio, on Wednesday, April
7, 1999 at 5:00 p.m., Eastern Daylight Time, and at any adjournment(s) thereof,
for the following purposes:
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below. [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees listed below.
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.
James L. Dailey W. Lowell Call Phil A. Bowman
2. For [ ] Against [ ] Abstain [ ] the adoption of the proposed resolution
to amend Article FOURTH of the Company's Amended Articles to increase the number
of authorized shares of the Company from 5,000,000 to 10,000,000, all of which
shall be Common Shares, each without par value.
3. To transact such other business as may properly come before the meeting
or any adjournment(s) thereof; with all powers the undersigned would possess if
personally present, giving unto said attorneys and proxies, or substitutes, full
power and authority to do whatsoever in their opinion may be necessary or proper
to be done in the exercise of the power hereby conferred, including the right to
vote for any adjournment, hereby ratifying all that said attorneys and proxies,
or substitutes, may lawfully do or cause to be done by virtue hereof.
A majority of said attorneys and proxies, or substitutes, who shall be
present and shall act at the meeting (or if only one should be present and act,
then that one) shall have and exercise all the powers of said attorneys and
proxies hereunder.
UNLESS INSTRUCTIONS TO THE CONTRARY ARE GIVEN, THE COMMON SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE PERSONS NAMED
AS NOMINEES IN THE ACCOMPANYING PROXY STATEMENT, "FOR" THE ADOPTION OF THE
PROPOSED RESOLUTION TO AMEND ARTICLE FOURTH OF THE COMPANY'S AMENDED ARTICLES TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY FROM 5,000,000 TO
10,000,000, AND AT THE DISCRETION OF THE PROXIES ON ANY OTHER BUSINESS BROUGHT
BEFORE THE MEETING.
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders, dated March 17, 1999, and the Proxy Statement furnished
therewith. Any proxy heretofore given to vote the Common Shares covered herein
is hereby revoked.
NOTE: Please fill in, sign, and return this proxy in
the enclosed envelope. When signing as
Attorney, Executor, Administrator, Trustee, or
Guardian, please give full title as such. If
signer is a corporation, please sign the full
corporate name by authorized officer. Joint
Owners should sign individually.
Date_________________________________________________
_____________________________________________________
_____________________________________________________
Shareholder sign name here exactly as it is stenciled hereon.