As filed with the Securities and Exchange Commission on April 8,
1997
Registration No. ______
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SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
EXCHANGE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
----------------
Ohio 34-1721453
(State or other jurisdiction of (U.S. Employer Identification No.)
incorporation or organization)
----------------
237 Main Street
Box 177
Luckey, Ohio 43443
(419) 833-3401
(Address, including zip code, and telephone number, including area
code, of registrant's principal offices)
-----------------
Marion Layman
Chairman, President and Chief Executive Officer
Exchange Bancshares, Inc.
237 Main Street
Box 177
Luckey, Ohio 43443
(419) 833-3401
(Name, address, including zip code, and telephone number, including
area code, of agents for service)
----------------
Please send copies of all communications to:
Susan B. Zaunbrecher, Esq.
Dinsmore & Shohl
255 East Fifth Street
Cincinnati, Ohio 45202
(513) 977-8171
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DIVIDEND REINVESTMENT PLAN
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Approximate date of commencement of proposed sale to public: April
10, 1997
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. X
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. ___
Calculation of Registration Fee
Title of Amount Proposed Proposed Amount of
each class to be maximum maximum registration
of securities registered offering aggregate fee
to be price per offering
registered unit (1) price
- - ------------- ----------- -------- ----------- ------------
Common Stock, 7,500 shares $16.00 $120,000.00 $36.36
$5.00 par value
(1) Computed solely for the purpose of calculating the filing fee,
based upon the average bid and asked price per share of $16.00
reported by market makers of the Company's common shares on February
28, 1997, pursuant to Rule 457 of the Securities Act of 1933.
PROSPECTUS
Exchange Bancshares, Inc.
DIVIDEND REINVESTMENT PLAN
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The Dividend Reinvestment Plan (the "Plan") of Exchange Bancshares,
Inc. (the "Company") provides holders of its common shares with a
simple and convenient method of purchasing additional common shares
without fees of any kind by reinvesting dividends in the purchase of
additional shares of the Company. Any holder of record of 25 or
more common shares is eligible to join the Plan.
Common shares needed for the Plan may be purchased either from the
Company or in market transactions, although it is anticipated that
most shares will be purchased from the Company. The option of using
common shares purchased in market transactions allows the Company to
control the issuance of new equity based on its needs while insuring
that Participants have the ability to invest in the Company without
paying any brokerage fees or service charges. Market transactions
provide no new funds for the Company.
The price of common shares purchased from the Company will be set by
the Board of Directors at the time it announces the payment of a
dividend. Such price will be the average purchase price per share
of the common shares acquired from the Company or in market
transactions on the Dividend Reinvestment Date.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 10, 1997.<PAGE>
No person has been authorized to
give any information or to make any
representations other than those contained in this Prospectus in
connection with the offer made by this Prospectus and, if given or
made, such information or representations must not be relied upon as
having been authorized by the Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances
create any implication that there has been no change in the affairs
of the Company or any of its subsidiaries or affiliates since the
date hereof. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the
securities offered by this Prospectus or an offer to sell or a
solicitation of an offer to buy such securities in any jurisdiction
to any person to whom it is unlawful to make such offer or
solicitation in any such jurisdiction.
---------------------------
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"SEC"). Such reports, proxy statements and other information filed
by the Company can be inspected and copied at the public reference
facilities of the SEC, Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 50549, as well as the following SEC Regional
Offices: 75 Park Place, 14th Floor, New York, NY 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, IL 60661. Copies can be obtained from the SEC by mail at
prescribed rates. Requests should be directed to the SEC's Public
Reference Section, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains an Internet
website at http://www.sec.gov that contains reports, proxy
statements and other information.
This Prospectus does not contain all of the information set forth in
the registration statement and the exhibits thereto (together with
all amendments, the "Registration Statement") which the Company has
filed with the SEC under the Securities Act of 1933, as amended (the
"Securities Act"), to which reference is hereby made.
THE PLAN
The following is a question and answer statement of the provisions
of the Dividend Reinvestment Plan of the Company.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of the
Company's common shares with a simple and convenient method of
investing cash dividends in additional common shares without payment
of any brokerage commission or service charges.
Advantages
2. What are the advantages of the Plan?
Participants in the Plan may have cash dividends on their common
shares automatically reinvested. No commission or service charge is
paid by Participants in connection with purchases under the Plan.
Full investment of funds is possible under the Plan because the Plan
permits fractions of shares, as well as full shares, to be credited
to Participants' accounts. Dividends on the shares in the
Participants' accounts are automatically reinvested in additional
common shares. The Plan assures safekeeping of shares credited to
a Participant's account since certificates for such shares are not
issued unless requested by the Participant. Regular semiannual
statements of account provide simplified recordkeeping.
Administration
3. Who administers the Plan for Participants?
The Company administers the Plan for Participants. It keeps
records, sends semiannual statements of account to Participants and
performs other duties relating to the Plan.
FOR INFORMATION ABOUT THE PLAN
Call Exchange Bancshares, Inc.
(419) 833-3401
Write to: Exchange Bancshares, Inc.
237 Main Street, Box 177
Luckey, Ohio 43443
All written notices and requests concerning the Plan should be
mailed to the above address.
Please include a telephone number in your letter where you can be
reached during business hours.
Participation
4. How does a shareholder participate?
A holder of record of 25 or more common shares may join the Plan by
completing and signing an Authorization Form and returning it to the
Company. A return envelope is provided for this purpose. An
Authorization Form may be obtained at any time by contacting the
Company (See Question 3). All holders of record of common shares
are eligible to participant in the Plan.
5. What does the Authorization Form provide?
The Authorization Form directs the Company to apply all or a portion
of the participating shareholder's cash dividends on the shares
registered in the Participant's name or credited to the
Participant's account under the Plan to the purchase of additional
common shares.
6. When will participation in the dividend reinvestment feature
begin?
To authorize the investment of dividends, the Authorization Form may
be received by the Company at any time. Dividends ordinarily are
paid on the 15th day of June and December. However, if an
Authorization Form is received by the Administrator after the record
date for the next dividend payment, then that dividend will be paid
in cash and the investment of dividends in additional shares of
common stock will commence upon the payment of the next dividend.
7. When will dividends be invested?
Dividends will be invested on or about the Dividend Investment Date.
The Dividend Investment Date is defined as the dividend payment date
plus ten days thereafter.
Costs
8. Are there any expenses to Participants in connection with
purchases under the Plan?
No. All brokerage fees and costs of administration of the Plan are
paid by the Company.
Purchases
9. How are common shares purchased under the Plan?
At the direction of the Company, common shares needed for the Plan
may be purchased (a) directly from the Company or (b) in negotiated
transactions ("market transactions") or (c) both from the Company
and in market transactions. Market transactions may be on such
terms as to price, delivery or otherwise as the Company or other
independent agent appointed by the Company may determine.
10. What will be the price of common shares purchased under the
Plan?
The price of common shares purchased from the Company on any
Dividend Investment Date will be set by the Board of Directors. The
price of common shares purchased in market transactions will be the
average price per share of the shares acquired. The purchase price
for shares under the Plan will therefore be the average purchase
price per share of common stock acquired from the Company and/or in
negotiated transactions on the Dividend Investment Date.
11. How many common shares will be purchased for Participants?
Each Participant's account will be credited with a number of shares,
including fractions computed to four decimal places, equal to the
total amount to be invested divided by the purchase price.
12. When will common shares be purchased under the Plan?
Where common shares are purchased from the Company, the purchase
will be made on the dividend payment date. Where common shares are
purchased in a market transaction, the Company or other independent
purchasing agent will be obligated to purchase within 10 days of the
dividend payment date.
Common shares will be allocated and credited to Participants'
accounts as of the Dividend Investment Date. Depending on the
Company's election, Participants may be credited with common shares
purchased from the Company or in market transactions or both from
the Company and in market transactions.
Reports to Participants
13. What reports will be sent to Participants in the Plan?
Each Participant in the Plan will receive a statement of account
following a transaction showing amounts invested, purchase prices
and shares purchased. These statements are a Participant's
continuing record of purchases and should be retained for income tax
purposes. In addition, each Participant will receive copies of the
same communications sent to every other holder of common shares,
including the Company's Annual Report to Shareholders and the Notice
of Annual Meeting and Proxy Statement.
Dividends
14. Will a Participant's account be credited with dividends on
fractions of shares?
Yes. A Participant's account will be credited with dividends on
fractions of shares.
Certificates of Shares
15. Will certificates be issued for common shares purchased?
Common shares purchased under the Plan will be registered in the
name of the Company (or its nominee), as agent for Participants in
the Plan, and certificates for such shares will not be issued to
Participants unless requested. This protects against loss, theft or
destruction of stock certificates. The number of shares credited to
an account under the Plan will be shown on the Participant's
statement of account.
Certificates for any number of whole shares credited to an account
under the Plan will be issued upon the written request of a
Participant who wishes to remain in the Plan. This request should
be mailed to the Company (See Question 3). Any remaining whole
shares and fraction of a share will continue to be credited to the
Participant's account. Shares credited to the account of a
Participant under the Plan may not be pledged. A Participant who
wishes to pledge such shares must request that certificates for such
shares be issued in the Participant's name.
Certificates for fractions of shares will not be issued under any
circumstances.
16. In whose name will certificates be registered when issued?
Common shares registered under the Plan will be registered in the
name of the Company (or its nominee) as agent for Participants in
the Plan. Accounts under the Plan are maintained in the names of
the Participants as provided in the Authorization Forms at the time
they entered the Plan. Certificates for whole shares will be
similarly registered when issued.
Termination
17. How is participation in the Plan terminated?
In order to terminate participation in the Plan, a Participant must
send a written request to the Company on the Administrator's
prescribed termination form (See Question 3). When participation in
the Plan is terminated, certificates for whole shares credited to
the Participant's account under the plan will be issued and a cash
payment will be made for any fraction of a share based on the
current market price of the Company common shares when the written
request is processed.
18. When may participation in the Plan be terminated?
Participation in the Plan may be terminated at any time. If the
request to terminate is received less than five business days prior
to a dividend record date, the request will not be processed until
after the dividends have been invested and the shares credited to
the Participant's account.
Other Information
19. What happens when a Participant sells or transfers all of the
shares which are registered in the Participant's name held outside
of the Plan?
A Participant who disposes of all common shares registered in the
Participant's name held outside of the Plan will not terminate such
Participant's participation in the Plan. The Company will continue
to reinvest the dividends on the shares credited to the
Participant's account under the Plan until otherwise notified (See
Question 17).
20. What happens if the Company issues a stock dividend or declares
a stock split?
Any common shares issued as a result of a stock dividend or stock
split by the Company on shares credited to the account of a
Participant under the Plan will be added to the Participant's
account. Stock dividends or split shares issued with respect to
shares registered in the name of the Participant will be mailed
directly to the Participant in the same manner as to shareholders
who are not participating in the Plan and subsequent dividends on
such shares shall be reinvested pursuant to the Plan unless the
Participant instructs the Administrator otherwise.
21. How will a Participant's shares be voted at meetings of
shareholders?
Any shares held in the Plan for a Participant will be voted as the
Participant directs. A Participant will receive a single proxy
covering all shares registered in the Participant's name as well as
all shares credited to the Participant's account under the Plan. If
no shares are registered in a Participant's name, a proxy card will
be furnished to the Participant for shares credited to the
Participant's account under the Plan. Fractional shares held by the
Administrator will not be voted.
22. What are the Federal income tax consequences of participation
in the Plan? (See also Question 26)
The following are Federal income tax consequences, under present
law, for Plan Participants:
(1) In the case of common shares acquired from the Company with
reinvested dividends, Participants in the Plan will be treated as
having received a dividend in an amount equal to the fair market
value of the common shares acquired on the dividend payment date.
In the case of shares purchased in market transactions with
reinvested dividends, Participants will be treated as having
received a dividend in an amount equal to the cash dividend paid by
the Company.
(2) Participants whose common shares are purchased in market
transactions with reinvested dividends are treated as having
received an additional dividend in the amount of the pro rata
brokerage fees paid by the Company.
(3) The tax basis of common shares purchased from the Company will
equal the amount treated as a dividend. The tax basis of shares
purchased in market transaction will be the same as in the preceding
sentence increased by the amount of brokerage fees paid by the
Company.
(4) A Participant's holding period for common shares purchased
under the Plan will begin on the day following the applicable
investment date.
(5) A Participant will not realize any taxable income when the
Participant receives certificates for whole shares credited to the
Participant's account, either upon the Participant's request for
certain of those shares or upon termination of the Plan.
(6) A Participant will realize gain or loss when shares are sold or
exchanged, whether pursuant to the Participant's request upon
termination of participation in the Plan (See Question 17) or by the
Participant after receipt of share from the Plan, and in the case of
a fraction of a share, when the Participant receives a cash
adjustment for a fraction of share credited to the Participant's
account upon termination of participation in or termination of the
Plan; and the amount of such gain or loss will be the difference
between the amount which the Participant receives for the shares or
fraction of a share and the tax basis therefor.
The foregoing discussion is not intended to cover all tax aspects of
participation in the Plan. The tax consequences outlined above are
subject to change by legislation, administrative action and judicial
decisions. Furthermore, the foregoing discussion does not deal with
questions of state and local taxation. Therefore, each Participant
should consult with an attorney or tax advisor as to the tax effects
of participation in the Plan.
23. When may a Participant be subject to backup withholding?
If a Participant has failed to furnish a valid taxpayer
identification number to the Company, unless the Participant is
exempt from the withholding requirements described in Section 3406
of the Internal Revenue Code, then the Company must withhold 31%
from the amount of common share dividends, the proceeds of the sale
of fractional shares and the proceeds of any sale of whole shares.
In addition, if a nonexempt new Participant fails to certify that
such Participant is not subject to backup withholding on interest
and dividend payments, because of notified payee underreporting,
then 31% must be withheld from the amount of common share dividends.
The withheld amounts will be deducted from the amount of dividends
and the remaining amount will be reinvested.
24. What is the responsibility of the Company under the Plan?
The Company, in administering the Plan, will not be liable for any
act done in good faith or for any good faith omission to act,
including, without limitation, an inability to purchase shares or
with respect to the timing or price of any purchase, or any claim of
liability arising out of failure to terminate a Participant's
account upon such Participant's death prior to receipt of notice in
writing of such death. Participants should recognize that the
Company cannot assure them of a profit or protect hem against a loss
on the shares purchased by them under the Plan. Although the Plan
contemplates the continuation of dividend payments, the payment of
future dividends will depend upon future earnings, the financial
condition of the Company and other factors.
25. May the Plan be changed or discontinued?
The Company reserves the right to suspend, modify or terminate the
Plan at any time. All Participants will receive notice of any such
suspension, modification or termination. Upon termination of the
Plan by the Company, certificates for whole shares credited to a
Participant's account under the Plan will be issued and a cash
payment will be made for any fraction of a share based on the
current market price of Company common shares on the termination
date.
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INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the SEC
(File No. 33-54566) and are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996.
(2) The Company's Quarterly Reports on Form 10-QSB for the periods
ended March 31, 1996, June 30, 1996 and September 30, 1996.
(3) The Company's Registration Statement on Form S-4 dated November
16, 1992, as amended on Amendment No. 1 to the Company's
Registration Statement on Form S-4 dated January 14, 1993;
Registration Number 33-54566.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering (of the
common shares) shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein or
in any prospectus supplement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of this
Prospectus.
Copies of the above documents (not including the exhibits to such
documents, unless such exhibits are specifically incorporated by
reference in such documents) and of the Company's 1995 Annual Report
may be obtained upon request without charge from the Secretary of
the Company, Exchange Bancshares, Inc., 237 Main Street, Box 177,
Luckey, Ohio 43443.
USE OF PROCEEDS
The Company has no basis for estimating either the number of shares
that will ultimately be purchased under the Plan from the Company or
the prices at which such shares will be sold. The Company intends
to apply such proceeds as are received for general corporate
purposes, including building capital and cash reserves. The Company
is unable to determine the amount of the proceeds which will be
devoted to these purposes. Shares purchased in market transactions
will provide no proceeds to the Company.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is hereby made to Ohio Revised Code Section 1701.13(E)
which provides the statutory authority for indemnification of
corporate officers and directors. Among other things Section
1701.13(E) provides for indemnification on a specific case basis for
threatened, pending or completed actions whether civil, criminal,
administrative or investigative subject to determinations of good
faith and fairness depending on the circumstances of each as
determined by the vote of disinterested directors, a written opinion
by independent legal counsel, by the shareholders or by the Court of
Common Pleas or the court in which such action, suit or proceeding
was brought. The description above is qualified in its entirety by
reference to the Ohio Revised Code Section 1701.13, which has been
filed as an exhibit hereto.
The Company provides liability insurance for its directors and
officers for certain losses arising from certain claims and charges,
including claims and charges under the Securities Act, which may be
made against such persons while acting in their capacities as
directors and officers of the Company.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the
provisions referred to herein, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
LEGAL MATTERS
Certain legal matters in connection with the common shares to be
issued under the Plan will be passed upon for the Company by
Dinsmore & Shohl, 1900 Chemed Center, 255 East Fifth Street,
Cincinnati, Ohio 45202
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Annual Report on Form 10-KSB for the year 1995 have
been examined by Robb, Dixon, Francis, Davis, Oneson & Company,
independent certified public accountants, whose report is
incorporated herein by reference. These consolidated financial
statements are incorporated herein by reference in reliance on the
report of Robb, Dixon, Francis, Davis, Oneson & Company given on the
authority of that firm as experts in accounting and auditing.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission Registration Fee $ 36.36
Printing and Engraving 900.00
Postage 800.00
Counsel fees and expenses 3500.00
Accounting fees and expenses 3000.00
Blue Sky Qualification fees and expenses 2000.00
Miscellaneous fees and expenses 250.00
Total $10,486.36
Item 15. Indemnification of Directors and Officers.
The Company's Code of Regulations provides that each person who is
made a party or is otherwise involved in any action, suit or
proceeding, by reason of the fact that he/she is or was a director
or officer of the Company, or is or was serving at the request of
the Company as a director, officer, trustee, employee or agent or
another entity, shall be indemnified and held harmless by the
Company to the fullest extent authorized by the Ohio General
Corporation Law (the "OGCL") against all expenses, liability and
loss, including attorneys' fees. The OGCL permits indemnification
in non-shareholder derivative actions for expenses, judgments, fines
and settlement amounts, if the director or officer acted in good
faith and in a manner he/she reasonably believed to be in or not
opposed to the best interests of the Company and with respect to any
criminal action or proceeding, had no reasonable cause to believe
his/her conduct was unlawful. In a shareholder derivative action,
the OGCL permits indemnification for expenses only if the director
or officer acted in good faith and in a manner he/she reasonably
believed to be in or not opposed to the best interests of the
Company, unless the director or officer has been adjudged to be
liable for negligence or misconduct in the performance of his/her
duties. The intent of the Company's Code of Regulations is to make
indemnification for directors and officers mandatory rather than
permissive. In addition, the Code of Regulations requires the
Company to pay a directors's or officer's expenses incurred in
defending any such proceeding, in advance of the proceeding's final
disposition, provided that the director or officer delivers to the
Company an undertaking to repay all advanced amounts if its is
ultimately determined that he/she is not entitled to be indemnified
under Ohio law. To the extent that an officer or director is
successful on the merits in any proceeding, Ohio law mandates
indemnification for expenses, including attorneys' fees. The Code
of Regulations also provides a procedure whereby a director or
officer denied indemnification may bring an action against the
Company to recover the amount of his/her indemnification claim, and
the burden of proving that the director or officer did not meet the
applicable standard of conduct described in the OGCL is placed on
the Company. The Company's Code of Regulations also provides that
the Company may maintain insurance, at its expense, to protect
itself and any director, officer, employee, or agent of the Company
against any expense, liability, or loss, whether or not the Company
would have the power to indemnify such person against such expense,
liability or loss under the OGCL.
Item 16. Exhibits.
Exhibit No. Title of Exhibit
4.1 The Amended and Restated Articles of Incorporation of
Exchange Bancshares, Inc. (incorporated by reference
to the quarterly report on Form 10-QSB for the quarter
ended June 30, 1995).
4.2 Code of Regulations of Exchange Bancshares, Inc.
(incorporated by reference to the Registration
Statement on Form S-4 dated November 16, 1992,
as amended on Amendment No. 1 to the Company's
Registration Statement on Form S-4 dated January 14,
1993; Registration Number 33-54566).
5, 23.2 Opinion and consent of Dinsmore & Shohl LLP as to the
legality of the securities being registered.
23.1 Consent of Robb, Dixon, Francis, Davis, Oneson
& Company.
24 Powers of Attorney.(1)
99.1 Form of Authorization Form to be used with the Plan.
99.2 Dividend Reinvestment Plan.
___________________
(1) Contained on the first page of the signature pages following
Part II of this Registration Statement.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment to those paragraphs is contained in periodic reports filed
by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the annual report of the registrant pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
provisions referred to in Item 15 (other than the insurance policies
referred to therein), or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted against the registrant
by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Millersburg,
State of Ohio on April 1, 1997.
EXCHANGE BANCSHARES, INC.
By: /s/ Marion Layman
Marion Layman
Chairman, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Marion Layman, his true and
lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign and execute on behalf of the undersigned
any and all amendments to this Registration Statement, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite
and necessary to be done in connection with any such amendments, as
fully to all intents and purposes as he might or could do in person,
and does hereby ratify and confirm all that said attorney-in-fact
and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the dates indicated.
Principal Executive Officer: Date:
/s/ Marion Layman April 1, 1997
Marion Layman
Chairman, President and Chief Executive Officer
Principal Accounting and Financial Officer:
/s/ Marion Layman April 1, 1997
Marion Layman
Chairman, President and Chief Executive Officer
Directors: Date:
/s/ Cecil R. Adkins April 1, 1997
Cecil R. Adkins
/s/ Norma J. Christen April 1, 1997
Norma J. Christen
/s/ Donald P. Gerke April 1, 1997
Donald P. Gerke
/s/ Joseph R. Hirzel April 1, 1997
Joseph R. Hirzel
/s/ Rolland I. Huss April 1, 1997
Rolland I. Huss
/s/ Marion Layman April 1, 1997
Marion Layman
____________________
Donald H. Lusher
/s/ David G. Marsh April 1, 1997
David G. Marsh
/s/ Edmund J. Miller April 1, 1997
Edmund J. Miller
EXHIBIT INDEX
Page Number
in Sequential
Exhibit No. Title of Exhibit Numbering System
4.1 The Amended and Restated
Articles of Incorporation
of Exchange Bancshares, Inc.
(incorporated by reference
to the quarterly report on
Form 10-QSB for the quarter
ended June 30, 1995).
4.2 Code of Regulations of
Exchange Bancshares, Inc.
(incorporated by reference
to the Registration Statement
on Form S-4 dated November
16, 1992, as amended on
Amendment No. 1 to the Company's
Registration Statement on Form S-4
dated January 14, 1993;
Registration Number 33-54566).
5, 23.2 Opinion and consent of Dinsmore
& Shohl LLP as to the legality
of the securities being registered.
23.1 Consent of Robb, Dixon, Francis,
Davis, Oneson & Company.
24 Powers of Attorney (1).
99.1 Form of Authorization Form to be
used with the Plan.
99.2 Dividend Reinvestment Plan
(1) Contained on the first page of the signature pages following
Part II of this Registration Statement.
Exhibit 5, 23.2
Charles F. Hertlein, Jr.
(513) 977-8315
April 2, 1997
Exchange Bancshares, Inc.
235 Main Street
Luckey, Ohio 43443-0129
Ladies and Gentlemen:
This opinion is rendered for use in connection with the Registration
Statement on Form S-3, prescribed pursuant to the Securities Act of
1933, to be filed by Exchange Bancshares, Inc. (the "Company") with
the Securities and Exchange Commission on or about April 2, 1997,
under which up to 7,500 shares of the Company's Common Stock without
par value ("Common Stock") are to be registered.
We hereby consent to the filing of this opinion as Exhibit 5 and
23.1 to the Registration Statement and to the reference to our name
in the Registration Statement.
As counsel to the Company, we have examined and are familiar with
originals or copies, certified or otherwise identified to our
satisfaction, of such statutes, documents, corporate records,
certificates of public officials, and other instruments as we have
deemed necessary for the purpose of this opinion, including the
Company's Amended Articles of Incorporation and Amended Code of
Regulations and the record of proceedings of the shareholders and
directors of the Company.
Based upon the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of
Ohio.
2. When the Registration Statement shall have been declared
effective by order of the Securities and Exchange Commission and up
to 7,500 shares of the Common Stock to be issued for sale to the
public shall have been issued and sold upon the terms set forth in
the Registration Statement, such shares will be legally and validly
issued and outstanding, fully-paid and nonassessable.
Very truly yours,
DINSMORE & SHOHL LLP
/s/ Charles F. Hertlein, Jr.
Charles F. Hertlein, Jr.
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Exchange Bancshares, Inc.
We consent to incorporation by reference in the registration
statement in Form S-3 of Exchange Bancshares, Inc. of our report
dated February 14, 1997, relating to the consolidated balance sheets
of Exchange Bancshares, Inc. and subsidiary as of December 31, 1996
and 1995, and the related consolidated statements of income, changes
in shareholders' equity, and cash flows for each of the three-year
period ended December 31, 1996, which report appears in the December
31, 1996 annual report on Form 10-KSB of Exchange Bancshares, Inc.
and subsidiary.
/s/ Robb, Dixon, Francis,
Davis, Oneson & Company
Robb, Dixon, Francis,
Davis, Oneson & Company
Granville, Ohio
April 1, 1997
Exhibit 99.1
EXCHANGE BANCSHARES, INC.
DIVIDEND REINVESTMENT PLAN
AUTHORIZATION FORM
THIS IS NOT A PROXY
DO NOT RETURN THIS
CARD IF YOU DO NOT
WISH TO PARTICIPATE
I hereby authorize Exchange Bancshares, Inc., administrator of the
Plan, to receive and apply to the purchase of common stock ("Common
Stock") of Exchange Bancshares, Inc. (the "Company"), in accordance
with the terms and conditions of the Plan, the following: (Check
one option only. If no option is checked, Full Dividend
Reinvestment will be assumed.)
_____ 1. Full Dividend Reinvestment -- any cash dividends received
on shares of Common Stock of the Company now or hereafter registered
in my name, and any optional cash payments I may choose to make.
_____ 2. Partial Dividend Reinvestment -- any cash dividends that
may become payable to me on the following number of shares of the
Company's Common Stock registered in my name.
Indicate number of shares _____________
Please also check the following if it applies:
_____ 3. Backup Withholding -- I am not subject to backup
withholding either because I have not been notified that I am
subject to backup withholding as a result of a failure to report all
interest or dividends, or the Internal Revenue Service has notified
me that I am no longer subject to backup withholding.
I understand that, regardless of which option I select, dividends
received on shares accumulated and held under the Plan will be
reinvested. I further understand that I may change or revoke this
authorization by notifying the Company, in writing, of my desire to
change or terminate my participation.
Signature ______________________ Social Security #______________
Signature ______________________ Social Security #______________
Date ___________________, 19_______
Sign name(s) exactly as it appears on your stock certificate(s).
All joint owners must sign.
This Authorization Form, when signed, should be mailed to
Marion Layman
Exchange Bancshares, Inc.
235 Main Street
Luckey, Ohio 43443-0129
Please use the self-addressed, stamped envelope enclosed with these
materials to return this Form.
Exhibit 99.2
EXCHANGE BANCSHARES, INC.
DIVIDEND REINVESTMENT PLAN
Section 1. Adoption of Plan.
Exchange Bancshares, Inc. (the "Company") hereby adopts this
Dividend Reinvestment Plan (the "Plan"), pursuant to which holders
of record of the Company's common stock, $5.00 par value ("Common
Stock"), will be provided an opportunity to invest cash dividends in
shares of Common Stock at market value, without payment of any
brokerage commission, service charge or other expense.
Section 2. Purpose of Plan.
The purpose of the Plan is to provide holders of record of the
Company's Common Stock with a simple, convenient and cost-effective
method of investing cash dividends in shares of Common Stock at
regular intervals.
Section 3. Eligibility.
All holders of record of 25 or more shares of the Company's Common
Stock are eligible to participate in the Plan. All such holders
electing participation in the plan at any one time are hereinafter
collectively referred to as "Participants."
Section 4. Administrator.
The Company shall administer the Plan as agent for Participants,
keep records, send statements of account to Participants, and
perform for Participants other duties relating to the Plan. (The
Company in its capacity as administrator of the Plan shall be
referred to herein as the "Administrator.") The Company may,
without the prior consent of Participants, appoint a different
Administrator at any time.
Section 5. Participation.
(a) Any holder of record of the Company's Common Stock may join
the Plan by signing an Authorization Form and returning it to the
Administrator. Authorization Forms will be provided from time to
time by mail to all shareholders and will be furnished at any time
upon request made to the Administrator.
(b) A holder of record of Common Stock may enroll in the Plan at
any time. If an Authorization Form is received by the Administrator
on or before the record date for the next dividend payment, then
that dividend will, as authorized, be used to purchase additional
shares of Common Stock for the Participant on, or within ten
calendar days of, the dividend payment date (the "Dividend
Investment Date"). If the Authorization Form is received by the
Administrator after such record date, that dividend will be paid in
cash and the investment of dividends in additional shares of Common
Stock will commence upon the payment of the next dividend.
(c) The Authorization Forms shall appoint the Administrator as
agent for the Participant and direct the Company to pay to the
Administrator each Participant's cash dividends on all or a
designated portion of the shares of Common Stock registered in the
shareholder's own name, as well as fractional shares of Common Stock
certified to the Participant's account under the Plan.
Section 6. Full or Partial Dividend Reinvestment.
A Participant may elect to reinvest dividends with respect to all or
a part of the shares of Common Stock held by him or her. Cash
dividends on shares for which the Participant has elected the
reinvestment of dividends under this Plan will be used to purchase
additional shares of Common Stock, as provided in Section 5, above.
Cash dividends on shares not included under the Plan will be paid,
in cash, directly to the Participant by the Company.
Section 7. Timing of Purchases.
The Administrator will make every reasonable effort to invest all
dividends on the Dividend Investment Date, as the case may be
(except where necessary to comply with applicable securities laws).
Participants' funds held by the Administrator during this period
will not bear interest. If, for any reason beyond the control of
the Administrator, the investment cannot be completed within 60 days
of the applicable Dividend Investment Date, Participants' funds held
by the Administrator will be returned to Participants as soon
thereafter as practicable. In the event Participants' funds are
returned because Common Stock was unavailable for purchase, this
Plan will be suspended until such date Common Stock is available for
dividend reinvestment.
Section 8. Costs.
There shall be no brokerage commissions for purchases of shares of
Common Stock or service charges to Participants under the Plan. All
costs of administration of the Plan shall be paid by the Company,
except for a $5.00 charge upon withdrawal from the Plan.
Section 9. Operation.
(a) Payment of Dividends to Administrator. The Company shall pay
to the Administrator cash dividends on all of the shares of Common
Stock registered in each Participant's name, as well as cash
dividends on fractional shares of Common Stock credited to the
Participant's account under the Plan. The Administrator shall apply
such dividends to the purchase of additional shares in accordance
with such Participant's directions.
(b) Shares purchased in the open market under the Plan. The
Administrator shall purchase shares of Common Stock from the
treasury stock or the authorized but unissued stock of the Company
or in negotiated transactions and may be on such terms as to price,
timing of purchase, delivery and otherwise as the Administrator,
upon the advice of the Board of Directors of the Company, may
determine in its discretion. In making purchases for the accounts
of Participants, the Administrator may commingle the funds of one
Participant with those of other Participants in the Plan.
(c) Purchase price per share and number of shares to be purchased.
The price per share to Participants shall be the average purchase
price per share of Common Stock acquired on the Dividend Investment
Date. The number of shares of Common Stock to be purchased for each
Participant's account shall be determined by the amount of the
dividends being reinvested and the price of the Common Stock to
Participants. The entire amount of the dividends being reinvested
will be used to purchase additional shares, except in the case of
shareholders subject to United States income tax withholding.
(d) Crediting of whole and fractional shares. Each Participant
will be credited with that number of shares, including fractional
shares computed to four decimal places, equal to the total amount to
be invested, divided by the purchase price per share to
Participants.
Section 10. Reports to Participants.
Each Participant in the Plan shall receive a statement of his or her
account following each purchase of additional shares of Common
Stock. In addition, each Participant shall receive copies of the
same communications sent to every other holder of Common Stock,
including annual reports, notices of annual meeting and proxy
statements, and information returns reporting dividend income
received for tax purposes.
Section 11. Certificates for Shares of Common Stock.
(a) Common shares purchased under the Plan will be registered in
the name of the Company (or its nominee), as agent for Participants
in the Plan, and certificates for whole shares of Common Stock
purchased and credited to a Participant's account under the Plan
will not be issued to the Participant unless requested. The number
of shares credited to an account under the Plan will be shown on the
Participant's statement of account.
(b) Certificates for fractions of shares will not be issued under
any circumstances.
Section 12. Termination of Participation.
(a) A Participant may at any time terminate his or her
participation in the Plan, with respect to dividends on all or a
portion of his or her Common Stock, by notifying the Administrator
in writing by completing and delivering to the Administrator the
termination form provided by the Administrator.
(b) If the notice of termination is received by the Administrator
on or not less than five business days prior to the record date for
the next dividend payable on the stock to which such notice relates,
such dividend and all subsequent dividends on such stock will be
paid to the Participant in cash and, if the Participant has elected
to terminate his or her entire participation in the Plan, any
optional cash payment which otherwise would have been invested on
the next Dividend Investment Date will be returned to the
Participant by the Administrator.
(c) If the notice of termination is received by the Administrator
after the record date for the next dividend payable on any stock to
which such notice relates, such dividend will be invested by the
Participant's account. All subsequent cash dividends on such stock
will be paid to the terminating Participant in cash.
(d) If a Participant terminates his or her entire participation in
the Plan, or if the Company terminates the Plan, a cash payment will
be made for any fraction of a share being held by the Administrator.
Such cash payment will be based on the price of the Common Stock, as
determined by the Board of Directors of the Corporation.
Section 13. Disposition of Less Than All Shares Registered in
Participant's Name.
(a) If a Participant who has authorized the reinvestment of
dividends on all of the Common Stock registered in his or her name
disposes of a portion of his or her shares, the Administrator will
continue to reinvest the dividends on the remaining shares.
(b) If a Participant who has authorized the reinvestment of
dividends on part of the Common Stock registered in his or her name
disposes of a portion of his or her shares, the Administrator will
continue to reinvest the dividends on the lesser of (i) the number
of shares with respect to which reinvestment of dividends was
originally authorized, or (ii) all of the remaining shares.
Section 14. Effect of Stock Dividend or Stock Split.
Stock dividends or split shares distributed on shares of Common
Stock registered in the name of the Participant shall be mailed
directly to the Participant and subsequent dividends on such shares
shall be reinvested pursuant to the Plan unless the Participant
instructs the Administrator otherwise.
Section 15. Voting of Shares Held Under the Plan.
(a) Participants will receive a proxy card aggregating all shares,
whether received under the Plan or not, held by the Participants.
Fractional shares held by the Administrator will not be voted. All
of a Participant's shares will be voted in accordance with the
instructions indicated on the proxy card.
(b) If a proxy is returned properly executed but without indicated
instructions as to the manner in which shares are to be voted with
respect to any item thereon, all of the Participant's shares will be
voted in accordance with the recommendations of the management of
the Company, unless applicable laws require otherwise. If a proxy
is not returned, or if it is returned unexecuted or improperly
executed, shares registered in a Participant's name may be voted
only by the Participant in person at the shareholder meeting, unless
a properly executed proxy is thereafter received.
Section 16. Interpretation and Regulation of the Plan.
The Board of Directors of the Company shall interpret the terms of
the Plan, may amend, modify, suspend or terminate the Plan at any
time, and shall regulate the Plan as it deems necessary or desirable
in connection with its operation.
Section 17. Modification of Termination of the Plan.
The Board of Directors of the Company may suspend, modify or
terminate the Plan at any time by a majority vote of the directors
present at any meeting. Notice of any suspension, modification or
termination of the Plan shall be mailed to all Participants at the
address shown on the records of the Administrator. The Participant
shall give prompt notice of any change in address to the
Administrator.
Section 18. Taxation of Dividends.
The reinvestment of dividends under this Plan does not relieve the
Participant of any taxes which may be payable on such dividends. In
addition, brokerage commissions paid by the Company on behalf of the
Participant may constitute additional ordinary income. Dividends
paid on shares of Common Stock and the amount of any brokerage
commissions paid by the Company will be included in an annual
information return filed with the Internal Revenue Service. A copy
of the return will be sent to the Participant, or the information
included in the return will be shown on the Participant's final
account statement for the year.
Section 19. Responsibility of Company and Administrator.
The Company and the Administrator (and any agent of the Company
and/or the Administrator), in administering the Plan, shall not be
liable for any act done in good faith or for any good faith omission
to act, including without limitation, an inability to purchase
shares or with respect to the timing or price of any purchase, or
any claim or liability arising out of failure to terminate a
Participant's account upon such Participant's death or adjudication
of incompetency prior to receipt of such notice in writing of such
death or adjudication of incompetency. In the event of any notice
of death or incompetency, the Administrator shall retain all
payments received and/or the Common Stock in the Participant's
account until the Participant's legal representative shall have been
appointed and furnished proof satisfactory to the Administrator of
his or her right to receive payments under the Plan.
Section 20. Governing Law.
This Plan and the Authorization Form signed by the Participant
(which is deemed part of this Plan) and the Participant's account
shall be governed by and construed in accordance with the laws of
the State of Ohio and the Rules of the Securities and Exchange
Commission.
