EXCHANGE BANCSHARES, INC.
237 Main Street
Luckey, Ohio 43443-0177
Telephone: (419) 833-3401
______________________________________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
______________________________________________________________________________
TO THE SHAREHOLDER:
Notice is hereby given that the Annual Meeting of Shareholders of Exchange
Bancshares, Inc. will be held on Wednesday, May 14, 1997 at Eastwood High
School, 4900 Sugar Ridge Road, Pemberville, Ohio following a dinner for share-
holders to be held at 6:30 p.m.
The meeting is for the following purposes:
1. To elect three Class II Directors of Exchange Bancshares, Inc., each
for a three year term expiring in 2000.
2. To ratify the selection of Robb, Dixon, Francis, Davis, Oneson and
Company as the Company's independent certified public accountants
for the fiscal year ending December 31, 1997.
3. To act on such other matters that may properly come before the Annual
Meeting of Shareholders and any adjournment or postponement thereof.
Your attention is directed to the Proxy Statement accompanying this Notice
for a more complete description of the matters to be acted upon at the meeting
and the voting recommendations of Management. The 1996 Annual Report of
Exchange Bancshares, Inc. is also enclosed. Shareholders of record at the close
of business on March 15, 1997 are entitled to receive notice of and to vote at
the Meeting and any adjournment thereof.
By Order of the Board of Directors
s/Marion Layman
Marion Layman, Chairman,
President and Chief Executive Officer
Luckey, Ohio
April 10, 1997
IMPORTANT
PLEASE VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID,
ADDRESSED ENVELOPE, OR OTHERWISE BY DELIVERY TO
EXCHANGE BANCSHARES, INC. AT 237 MAIN STREET, LUCKEY,
OHIO 43443, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING AND SO DESIRE, YOU MAY WITHDRAW
YOUR PROXY BY GIVING A WRITTEN NOTICE OF REVOCATION AND
VOTE IN PERSON.
EXCHANGE BANCSHARES, INC.
237 Main Street
Luckey, Ohio 43443-0177
Telephone: (419) 833-3401
______________________________________________________________________________
PROXY
______________________________________________________________________________
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, having received notice of the Annual Meeting of Share-
holders of Exchange Bancshares, Inc. to be held following the 6:30 p.m. dinner
for shareholders on Wednesday, May 14, 1997 hereby designates and appoints
A. John Moore, Sharon Hoffman and Jeffrey Cross, and each of them with authority
to act without the others, as attorneys and proxies for the undersigned, with
full power of substitution, to vote all shares of Common Stock, par value of
$5.00 per share, of Exchange Bancshares, Inc. that the undersigned is entitled
to vote at such Meeting or at any adjournment thereof, with all the powers the
undersigned would posses if personally present, such proxies being directed to
vote as specified below and in their discretion on any other business that may
properly come before the Meeting.
Proposal 1. To elect the following three (3) nominees of Exchange
Bancshares, Inc. to Class II of the Board of Directors,
Cecil R. Adkins, Norma J. Christen and Donald H. Lusher
_____ FOR THE NOMINEES (EXCEPT AS MARKED BELOW)
_____ WITHHOLD AUTHORITY FOR ONE OR MORE OF THE NOMINEES
IF YOU WISH TO WITHHOLD AUTHORITY FOR ANY NOMINEE, ENTER
THE NAME(S) ON THE FOLLOWING
LINE______________________________________________________
Proposal 2. To ratify the selection of Robb, Dixon, Francis, Davis,
Oneson and Company as the Company's independent certified
public accountants for the fiscal year ended December 31,
1997.
____ FOR ____ AGAINST ____ABSTAIN
The Board of Directors recommends a vote FOR the election of the named
nominees and FOR Proposal 2. Please make an "X" in one of the spaces provided
under each proposal.
THIS PROXY WILL BE VOTED: (1) AS DIRECTED ON THE MATTERS LISTED ABOVE;
(2) IN ACCORDANCE WITH THE DIRECTORS RECOMMENDATION WHERE A CHOICE IS NOT
SPECIFIED; AND (3) IN ACCORDANCE WITH THE JUDGMENT OF THE PROXIES ON ANY OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
The undersigned reserves the right to revoke this Proxy at any time prior
to the Proxy being voted at the Meeting. The Proxy may be revoked by delivering
a signed revocation to the Company at any time prior to the Meeting, by sub-
mitting a later-dated proxy, or by attending the Meeting in person and casting
a ballot. The undersigned hereby revokes any proxy previously given to vote
such shares at the meeting.
Dated ______________________ ___________________________________________
Signature of Shareholder
___________________________________________
Signature of Shareholder
(Please sign Proxy as your name appears on your stock certificates(s). JOINT
OWNERS SHOULD EACH SIGN PERSONALLY. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your full
title as such).
PLEASE COMPLETE, SIGN, DATE AND MAIL THIS PROXY IN THE ENCLOSED ENVELOPE.
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EXCHANGE BANCSHARES, INC.
(Name of Registrant as Specified in Its Charter)
EXCHANGE BANCSHARES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee was calculated and state how it was determined):
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
[ ] Fee paid previously with preliminary materials:
N/A
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
N/A
(2) Form, schedule or registration no.:
N/A
(3) Filing party:
N/A
(4) Date filed:
N/A
<PAGE>
EXCHANGE BANCSHARES, INC.
237 Main Street
Luckey, Ohio 43443-0177
Telephone: (419) 833-3401
________________________________________________________________________________
PROXY STATEMENT
________________________________________________________________________________
This Proxy Statement is furnished by the Board of Directors and Management
of Exchange Bancshares, Inc. (the "Company"), the sole shareholder of The
Exchange Bank (the "Bank"), in connection with the solicitation of proxies to
be voted at the Company's 1997 Annual Meeting of Shareholders, which will be
held following a 6:30 p.m. dinner for the shareholders on Wednesday, May 14,
1997 at Eastwood High School, 4900 Sugar Ridge Road, Pemberville, Ohio, 43450
(the "Meeting").
The close of business on March 15, 1997 has been designated as the record
date for the determination of shareholders entitled to receive notice of and
to vote at the Meeting. As of that date, 465,098 shares of the Company's
Common Stock, par value $5.00 per share, were issued and outstanding. Each
shareholder will be entitled to one vote for each share of Common Stock
registered in his or her name on the books of the Company on the close of
business on March 15, 1997 on all matters that come before the Meeting.
Any proxy delivered pursuant to this solicitation may be revoked, at the
option of the person executing the proxy, at any time before it is exercised
by delivering a signed revocation to the Company, by submitting a later-dated
proxy, or by attending the meeting in person and casting a ballot. If proxies
are signed and returned without voting instructions, the shares represented by
the proxies will be voted as recommended by the Board of Directors.
A majority of the voting power of the Company must be represented at the
Meeting in person or by proxy to form a quorum for the transaction of business.
Abstentions and broker nonvotes on any proposal are voted neither "for" nor
"against" the proposal. Whereas abstentions on any proposal are counted in
the determination of a quorum for that proposal, broker nonvotes are not so
counted.
The cost of soliciting proxies will be borne by the Company. In addition
to the use of the mails, proxies may be solicited personally or by telephone
by regular employees of the Company. The Company does not expect to pay any
compensation for the solicitation of proxies, but may reimburse brokers and
other persons holding stock in their names, or in the names of nominees, for
their expense in sending proxy materials to their principals and obtaining their
proxies. The approximate date on which this Proxy Statement and enclosed form
of proxy has been first mailed to shareholders is April 10, 1997.
<PAGE>
ELECTION OF DIRECTORS
General
The Articles of Incorporation of the Company provide that the Board of
Directors shall be divided into three (3) classes with three (3) directors in
each class and with the term of office of only one class expiring in each year.
At each annual meeting of shareholders, Directors chosen to succeed those whose
terms have then expired are elected for a term of office expiring at the third
succeeding annual meeting of the shareholders after their election. The Company
currently has nine (9) Directors, with three Directors in Class II with terms
expiring in 1997, two Directors in Class III with terms expiring in 1998, and
three Directors in Class I with terms expiring in 1999.
Election of Directors in Class II
_________________________________
The terms of office of Cecil R. Adkins, Norma J. Christen and Donald H.
Lusher, the three Directors in Class II, will expire at the 1997 annual meeting
of shareholders upon the election and qualification of their successors. Mr.
Adkins, Mrs. Christen and Mr. Lusher have all been nominated by the Board of
Directors to serve additional three (3) year terms. Under Section 1.12 of the
Company's Code of Regulations, shareholders desiring to nominate a candidate
for election as Director must deliver a written statement to the Board of
Directors setting forth the candidate's name, qualification and background not
less than sixty (60) days prior to the meeting in question. No additional
nominations have been received for the 1997 annual meeting.
Additional information concerning Mr. Adkins, Mrs. Christen and Mr. Lusher,
and the continuing Directors of the Company is provided below. The Board of
Directors and Management recommend that you vote FOR the election of such
nominees as Class II Directors of the Company. In the event that either of
these nominees should be unable to serve, which is not anticipated, the proxy
committee, which consists of A. John Moore, Sharon Hoffman, and Jeffrey Cross,
will vote for such other person or persons for the office of Director as the
Board of Directors may recommend.
In the election of directors, shareholders do not have cumulative voting
rights. Without cumulative voting, the total number of votes that may be cast
for any nominee may not exceed the number of shares that the shareholder is
authorized to vote at the meeting. The persons receiving the greatest number
of votes will be elected as Directors. Only votes in favor of a candidate are
counted for such purpose, without any reduction for votes withheld from or cast
against the particular candidate.
<PAGE>
Information Regarding Nominees and Continuing Directors
_______________________________________________________
The following table provides certain information concerning the background
and share ownership of the Class II nominees and the continuing Directors of the
Company, as well as the share ownership of all directors and executive officers
of the Company.
<TABLE>
<CAPTION>
Principal Beneficial
Name of Nominee Occupation Ownership
Or Continuing During Past Director of Common % of
Director Age Five Years Since Stock <F2> Class
________ ___ __________ _____ _________ _____
<CAPTION>
CLASS II NOMINEE DIRECTORS --- TERM EXPIRES IN 1997
<S> <C> <C> <C> <C> <C>
Cecil R. Adkins 68 Self employed in 1989 <F1> 1,616 <F3> .35%
manufactured housing
Norma J. Christen 67 Restaurant Owner 1996 2,633 .57%
Donald H. Lusher 71 Owns and maintains 1970 <F1> 2,695 <F5> .58%
Real estate rentals
<CAPTION>
CLASS III CONTINUING DIRECTORS --- TERM EXPIRES IN 1998
<S> <C> <C> <C> <C> <C>
Joseph R. Hirzel 59 Corporate Secretary 1989 <F1> 1,902 <F4> .41%
of Hirzel Canning Co.
Rolland I. Huss 67 Farm Owner and 1977 <F1> 25,657 <F6> 5.52%
Operator
Marion Layman 71 Chairman, The Exchange 1962 <F1> 12,194 <F7> 2.62%
Bank and Chairman,
President, and CEO
of Exchange
Bancshares, Inc.
<CAPTION>
CLASS I CONTINUING DIRECTORS -- TERM EXPIRES IN 1999
<S> <C> <C> <C> <C> <C>
Donald A. Gerke 54 Educator 1995 1,890 <F9> .41%
David G. Marsh 40 Funeral Director 1993 <F1> 267 <F8> .08%
Edmund J. Miller 54 Television 1995 1,508 <F10> .32%
Broadcasting Engineer
All Directors and --- --- 50,362 10.83%
Executive Officers
as a Group
(9 Persons)
_________________
<FN>
<F1>
(1) Directorships were with the Bank alone until 1993 and with the Bank and the Company since
such date. Mr. Marsh was elected to the Company Board in 1994. Mr. Gerke and Mr. Miller
were elected to the Company Board in 1995. Mrs. Christen was elected to the Company in
1996.
<F2>
(2) All shares are held of record with sole voting and investment power unless otherwise
indicated. Beneficial ownership numbers are as of December 31, 1996.
<F3>
(3) Includes 1,229 shares jointly owned with Mr. Adkins' wife.
<F4>
(4) Includes 115 shares owned by Mr. Hirzel's wife.
<F5>
(5) Includes 456 shares owned by Mr. Lusher's wife.
<F6>
(6) Includes 379 shares owned by Mr. Huss' wife and 54 shares owned jointly with two grandchildren.
<F7>
(7) Includes 4,435 shares owned by Mr. Layman's wife.
<F8>
(8) Owned jointly with Mr. Marsh's wife.
<F9>
(9) Includes 945 shares owned by Mr. Gerke's wife.
<F10>
(10) Includes 367 owned jointly with three children, 509 owned jointly with Mr. Miller's wife
and 119 owned by Mr. Miller's wife.
</FN>
</TABLE>
<PAGE>
Cecil R. Adkins
Cecil R. Adkins has served on the Board of Directors of the Bank since 1989
and the Company since 1993. Mr. Adkins is self employed in the manufactured
housing industry.
Norma J. Christen
Norma J. Christen has served on the Board of Directors of the Company
since 1996. She has owned and operated a restaurant since 1983.
Donald H. Lusher
Donald H. Lusher has served on the Board of Directors of the Bank since
1970 and the Company since 1993. Mr. Lusher owns and maintains real estate
rental properties.
Joseph R. Hirzel
Joseph R. Hirzel has served on the Board of Directors of the Bank since
1989 and the Company since 1993. Mr. Hirzel is the Corporate Secretary of the
Hirzel Canning Company and serves as Secretary and Treasurer of the Company.
Rolland I. Huss
Rolland I. Huss has served on the Board of Directors of the Bank since
1977 and the Company since 1993. Mr. Huss is a farm owner and operator and
serves as Vice Chairman of the Company.
Marion Layman
Marion Layman has served on the Board of Directors of the Bank since 1962
and the Company since 1993. Mr. Layman is Chairman of the Board of The Exchange
Bank and Chairman, President and Chief Executive Officer of the Company.
Donald A. Gerke
Donald A. Gerke has served on the Board of Directors of the Bank since
1994 and the Company since 1995. Mr. Gerke is an educator, having taught high
school mathematics and presently is a part time mathematics instructor at
Bowling Green State University.
David G. Marsh
David G. Marsh has served on the Board of Directors of the Bank since 1993
and the Company since 1994. Mr. Marsh is president of Marsh Funeral Home, Inc.
Edmund J. Miller
Edmund J. Miller has served on the Board of Directors of the Company since
1995 and the Bank since 1996. Mr. Miller is a television broadcast engineer
with Cosmos Broadcasting, WTOL television.
No family relationships exist between the Company's Directors, nominees
and executive officers. There are no arrangements or understandings between any
Director or nominee and any other person concerning service or nomination as
a Director.
<PAGE>
The Board of Directors of the Company, met seven (7) times during 1996.
The reorganization of the Bank as a subsidiary of the Holding Company was
completed January 3, 1994. Each director attended at least seventy-five
percent (75%) of such meetings. The Company has no Board Committees. Non-
employee Directors of the Company receive $200.00 for each meeting attended.
Employee Directors are not compensated separately for Board activities.
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS OF THE COMPANY
Principal Occupation
Name Age Position During Past Five Years
____ ___ ________ ______________________
<S> <C> <C> <C>
Marion Layman 71 Chairman, President and Chairman, President and Chief
Chief Executive Officer Executive Officer of The Exchange
Since 1993 Bank and Chairman, President and
CEO of Exchange Bancshares, Inc.
Rolland I. Huss 67 Vice Chairman Farm Owner and Farm Operator
Since 1994
Joseph R. Hirzel 59 Secretary and Treasurer Corporate Secretary of Hirzel
Since 1993 Canning Co.
</TABLE>
Executive Officers serve at the pleasure of the Board of Directors and
until their successors are appointed. They have no definite terms of office.
EXECUTIVE COMPENSATION
The following table sets forth information as to the compensation paid
or accrued by the Company or the Bank during 1994, 1995, and 1996 for Mr. Marion
Layman, Chairman, President and Chief Executive Officer of the Company. No
executive officer of the Company received compensation for services to the
Company or the Bank during 1996 in excess of $100,000.
<TABLE>
<CAPTION>
___________________________________________________________________________________________
SUMMARY COMPENSATION TABLE
___________________________________________________________________________________________
Long Term All Other
Compensation Compensation
Annual Compensation Awards <F1>
___________________________________________________________________________________________
Restricted
Name and Principal Other Annual Stock
Principal Position Year Salary Bonus Compensation <F1> Award Options
___________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Marion Layman, 1996 $45,960.90 N/A N/A N/A N/A
Chairman, 1995 42,152.24 N/A N/A N/A N/A
President and 1994 70,900.92 N/A N/A N/A N/A
Chief
Executive Officer
______________
<FN>
<F1>
(1) No other compensation was provided to Mr. Layman for services to the Company or the bank
during 1994, 1995 or 1996 in amounts sufficient to require disclosures.
</FN>
</TABLE>
<PAGE>
PRINCIPAL SHAREHOLDERS
Under Section 13(d) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder, a beneficial owner of a security is any person who
directly or indirectly has or shares voting power or investment power over
such security. Such beneficial owner under this definition need not enjoy
the economic benefit of such securities. To the knowledge of Management, the
only persons or entities who have beneficial ownership, directly or indirectly,
of 5% or more of the Company's Common Stock are as follows:
<TABLE>
<CAPTION>
Name and Address of Beneficial Ownership
Beneficial Owner of Common Stock <F1> Percent of Class
________________ ___________________ ________________
<S> <C> <C>
Roy E. Christen Estate 25,277 5.43%
714 N. Main Street
Bowling Green, Ohio 43402
Rolland I. Huss 25,657 5.52%
1442 Middleton Pike
Luckey, Ohio 43443
Joanne R. Moran 26,881 5.78%
4912 Skelly Drive
Toledo, Ohio 43623
________________
<FN>
<F1>
(1) All shares are held of record with sole voting and investment power.
Beneficial ownership amounts are as of March 15, 1997.
</FN>
</TABLE>
INDEBTEDNESS OF AND TRANSACTIONS WITH OFFICERS AND DIRECTORS
The Bank has had and expects to have banking transactions in the ordinary
course of business with Directors, officers and principal shareholders of the
Company and the Bank and associates of such persons on substantially the same
terms, including interest rates and collateral, as those prevailing at the same
time for comparable transactions with other persons and that do not involve
more than normal risk of collectibility or present other unfavorable features.
The Company and the Bank also have had and expect to have other transactions
in the ordinary course of business with their Directors, officers, principal
shareholders and their associates on the same terms as those prevailing at the
same time for comparable transactions with others.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and Directors and persons who own 10% or more of the Company's common
shares to file reports of ownership and changes in ownership on Forms 3, 4 and
5 with the Securities and Exchange Commission. Officers, Directors and 10% or
greater shareholders are required by the Commission's regulations to furnish
the Company with copies of all Forms 3, 4 and 5 they file. The same
<PAGE>
requirements applied to officers, Directors, and 10% shareholders of the Bank
prior to the holding company reorganization on January 3, 1994, except that
such Form 3, 4 and 5 reports were filed with the Board of Governors of the
Federal Reserve System.
RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Bank has engaged the firm of Robb, Dixon, Francis, Davis, Oneson and
Company, independent certified public accountants, to report upon the financial
statements included in the Annual Report submitted herewith. Representatives
of said firm are not required or expected to be in attendance at the Annual
Meeting. Other services performed for the Bank and the Company by Robb, Dixon,
Francis, Davis, Oneson and Company have included the preparation of the
Company's federal income tax returns, the filing with the Board of Governors of
the Federal Reserve System of all reports required under Regulation F of the
Board of Governors, and assistance with the ongoing audit and control program
of the Bank. The Company and the Bank have selected the firm of Robb, Dixon,
Francis, Davis, Oneson and Company to report upon their 1996 financial state-
ments. The Board of Directors of the Company recommends that shareholders vote
FOR the ratification of the selection of Robb, Dixon, Francis, Davis, Oneson
and Company as the Company's independent certified public accountants for the
fiscal year ending December 31, 1997.
OTHER BUSINESS
The Board of Directors is not aware of any business to come before the
Annual Meeting of the shareholders other than that described in the above Proxy
Statement and Notice of Annual Meeting of Shareholders. However, if any other
matters should properly come before the Annual Meeting, it is intended that
the proxies in the accompanying form will be voted in respect thereof in
accordance with the judgement of the person or persons voting the proxies.
SHAREHOLDER PROPOSALS FOR PRESENTATION AT THE 1998 ANNUAL MEETING
The Board of Directors requests that any shareholder proposals intended
for presentation at the 1998 Annual Meeting be submitted to Marion Layman,
President and Chief Executive Officer, in writing no later than December 24,
1997 for consideration for inclusion in the Company's proxy material for such
meeting.
<PAGE>
AVAILABLE OF FORM 10-KSB
Upon written request of any shareholder of record of the Company, the
Company will furnish without charge a copy of its Annual Report on Form 10-KSB
as filed with the Securities and Exchange Commission for its year ended
December 31, 1996. All requests must be in writing and addressed to : Joseph
R. Hirzel, Secretary, Exchange Bancshares, Inc., P.O. Box 177, Luckey, Ohio
43443.
By Order of the Board of Directors
s/Marion Layman
Marion Layman, Chairman,
President and Chief Executive Officer
