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:
[ ] 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 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
================================================================================
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
================================================================================
To The Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of
Exchange Bancshares, Inc. will be held on Wednesday, May 19, 1999 at Eastwood
High School, 4900 Sugar Ridge Road, Pemberville, Ohio following a dinner for
shareholders to be held at 6:30 p.m.
The meeting is for the following purposes:
1. To elect three Class I Directors of Exchange Bancshares, Inc., each
for a three year term expiring in 2002.
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, 1999.
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
1998 Annual Report of Exchange Bancshares, Inc. is also enclosed.
Shareholders of record at the close of business on March 17, 1999 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 15, 1999
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.
<PAGE>
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 19, 1999.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned, having received notice of the Annual Meeting of
Shareholders of Exchange Bancshares, Inc. to be held following the 6:30 p.m.
dinner for shareholders on Wednesday, May 19, 1999 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 any adjournment thereof,
with all the powers the undersigned would possess if personally present, such
proxies being directed to votes 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 I of the Board of Directors, Donald P. Gerke,
David G. Marsh and Edmund J. Miller.
_______ 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, 1999.
________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
submitting 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 _____________
____________________________________ _______________________________________
Print Name Signature of Shareholder
____________________________________ _______________________________________
Print Name 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.
<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 1999 Annual Meeting of Shareholders,
which will be held following a 6:30 p.m. dinner for the shareholders (local
time) on Wednesday, May 19, 1999 at Eastwood High School, 4900 Sugar Ridge
Road, Pemberville, Ohio, 43450, (the "Meeting").
The close of business on March 17, 1999 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, 521,094 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 17, 1999 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 15,
1999.
The Annual Report of the Company for the fiscal year ended December 31,
1998 is enclosed with this Proxy Statement.
<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 I with terms expiring in 1999, three Directors in Class II with terms
expiring in 2000, and three Directors in Class III with terms expiring in
2001.
Election of Directors in Class I
The terms of office of Donald P. Gerke, David G. Marsh and Edmund J.
Miller, the three Directors in Class I, who are currently serving as members
of the Board of Directors, will expire at the 1999 Annual Meeting of
Shareholders upon the election and qualification of their successors. Mr.
Gerke, Mr. Marsh and Mr. Miller all have 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 Directors must deliver to the Company a written notice 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 1999 annual meeting.
Additional information concerning Mr. Gerke, Mr. Marsh and Mr. Miller,
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 I Directors of the Company. In the event that any of these
nominees should be unable to serve once elected, 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 I 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>
<S>
<C> <C> <C> <C> <C>
Principal Beneficial
Name of Nominee Occupation Ownership
or Continuing During Past Director of Common % of
Director Age Five Years Since Stock <F2> Class
- - ---------------- --- ---------- -------- ---------
CLASS I NOMINEE DIRECTORS
--- TERM EXPIRES IN 2002
Donald P. Gerke 56 Educator 1995 2,823 <F9> 0.54%
David G. Marsh 42 Funeral Director 1993 <F1> 356 <F8> 0.07%
Edmund J. Miller 56 Television Broadcasting 1995 2,246 <F10> 0.43%
Engineer
CLASS II CONTINUING DIRECTORS
-- TERM EXPIRES IN 2000
Cecil R. Adkins 70 Self employed in 1989<F1> 1,780 <F3> 0.34%
manufactured housing
Norma J. Christen 69 Restaurant Owner 1996 26,310 4.86%
Donald H. Lusher 73 Owns and maintains 1970 <F1> 2,968 <F5> 0.57%
real estate rentals
CLASS III CONTINUING DIRECTORS
--- TERM EXPIRES IN 2001
Joseph R. Hirzel 61 Corporate Secretary 1989 <F1> 2, 269 <F4> 0.44%
of Hirzel Canning Co.
Rolland I. Huss 69 Farm Owner and Operator 1977 <F1> 29,348 <F6> 5.63%
Marion Layman 73 Chairman, The Exchange 1962 <F1> 13,441 <F7> 2.58%
Bank and Chairman,
President, and CEO of
Exchange Bancshares, Inc.
All Directors and Executive
Officers as a Group
(9 Persons) 80,541 15.46%
- - ------------------------------------
See footnotes on the following page
<F1> 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.
The reorganization of the Bank as a subsidiary of the Holding Company was
completed January 3, 1994.
<F2> All shares are held of record with sole voting and investment power
unless otherwise indicated. Beneficial ownership numbers are as of
December 31, 1998.
<F3> Includes 1,354 shares jointly owned by Mr. Adkin.'s wife.
<F4> Includes 154 shares owned by Mr. Hirzel's wife.
<F5> Includes 501 shares owned by Mr. Lusher's wife.
<F6> Includes 443 shares owned by Mr Huss' wife and 58 shares owned jointly
with two grandchildren.
<F7> Includes 4,888 shares owned by Mr. Layman's wife.
<F8> Owned jointly with Mr. Marsh's wife.
<F9> Includes 2,700 shares owned by The Gerke Family Trust.
<F10> Includes 519 owned jointly with 3 children, 904 owned jointly with wife
and 183 owned by Mr. Miller's wife.
Donald P. Gerke
Donald P. 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 vice president of Brossia-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.
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.
<PAGE>
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.
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.
The Board of Directors of the Company met fourteen (14) times during
1998. 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.
EXECUTIVE OFFICERS OF THE COMPANY
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal Occupation
Name Age Position During Past Five Years
- - ---- --- -------- ----------------------
Marion Layman 73 Chairman, President and Chairman, President and
Chief Executive Officer Chief Executive Officer
of The Exchange Bank and
Chairman and President of
Exchange Bancshares, Inc.
Rolland I. Huss 69 Vice Chairman Farm owner and farm operator
Joseph R. Hirzel 61 Secretary and Treasurer Corporate Secretary of
Hirzel 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 and/or the Bank during 1998, 1997, 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 last three fiscal years in excess of $100,000.
<PAGE>
SUMMARY COMPENSATION TABLE
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Long Term
Compensation All Other
Annual Compensation Awards Compensation <F1>
------------------- ------------ ----------------
Name and Principal
Principal Position
<S> <C> <C> <C> <C> <C> <C>
Restricted
Other Annual Stock
Year Salary Bonus Compensation <F1> Award Options
Marion Layman, 1998 $50,525.07 N/A N/A N/A N/A
Chairman, President
and Chief Executive 1997 $48,816.19 N/A N/A N/A N/A
Officer
1996 $45,960.90 N/A N/A N/A N/A
- - -------------------------------
</TABLE>
<F1> No other compensation was provided to Mr. Layman for services to the
Company or the Bank during 1998, 1997, or 1996 in amounts sufficient
to require disclosure.
PRINCIPAL SHAREHOLDERS
Under Section 13(d) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder, a beneficial owner of 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:
Name and Address of Benficial Ownership
Beneficial Ownership of Common Stock <F1> Percent of Class
- - -------------------- ------------------- ----------------
Rolland I. Huss 29,348 <F2> 5.63%
1442 Middletown Pike
Luckey, OH 43443
Joanne R. Moran 28,501 5.47%
4912 Shelly Drive
Toledo, OH 43623
- - ------------------------------
(1) All shares are held of record with sole voting and investment power
unless otherwise indicated.
(2) Includes 443 shares owned by Mr. Huss' wife and 58 shares owned
jointly with two grandchildren. Beneficial ownership numbers are as of
December 31, 1998.
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 unrelated third parties and that do
not involve more than normal risk of collect ability 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
unrelated third parties.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities and 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 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 previously
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
1999 financial statements. The Board of Directors of the Company recommends
that shareholders vote FOR the ratification of Robb, Dixon, Francis, Davis,
Oneson and Company as the Company's independent certified public accountants
for the fiscal year ended December 31, 1999.
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 judgment of the person or persons voting the proxies.
SHAREHOLDER PROPOSALS FOR PRESENTATION AT THE 2000 ANNUAL MEETING
The Board of Directors requests that any shareholder proposals intended
for presentation at the 2000 Annual Meeting be submitted to Marion Layman,
Chairman, President and Chief Executive Officer, in writing no later than
March 1, 2000, for consideration for inclusion in the Company's proxy
materials for such meeting.
AVAILABILITY 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, 1998. 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
