PROXY
BELMONT BANCORP., BRIDGEPORT, OHIO
ANNUAL MEETING OF SHAREHOLDERS
APRIL 18, 1995
KNOW ALL MEN BY THESE PRESENT that I the undersigned
Shareholder of BELMONT BANCORP. do hereby nominate,
constitute and appoint David L. Barnes and Kelley Archer, or
either of them, my true and lawful attorney with full power
of substitution, for me and in my name, place and stead to
vote all of the Common Stock of said Corporation standing in
my name at the Annual Meeting of its Shareholders to be held
at Belmont National Bank, 150 West Main Street, St.
Clairsville, Ohio, on April 18, 1995, at 11:00 A.M., or at
any adjournments thereof with all the powers the undersigned
would possess if personally present as follows:
1. For the election to the Board of Directors, except as
otherwise specified below, of the following nominees, or any
one or more of them to serve a three-year term expiring at
the annual shareholders' meeting in 1998:
J. Vincent Ciroli, Jr. James R.Miller
John H. Goodman, II Keith A. Sommer
with full authority to cumulate the votes represented by
such shares and to distribute the same among the nominees in
such manner and numbers as said proxies in their discretion
may determine.
THE AUTHORITY TO VOTE FOR THE ELECTION OF ANY OF THE
NOMINEES LISTED ABOVE MAY BE WITHHELD BY LINING THROUGH OR
OTHERWISE STRIKING OUT THE NAME OF THE NOMINEE.
For ___ 2. To Consider and act upon the proposed Amendment to
Against ___ the Articles of Incorporation to increase the number of
Abstain ___ authorized shares of capital stock from 1,850,000 to
9,000,000 shares.
For ___ 3. To consider and act upon the proposed Amendment to the
Against ___ Articles of Incorporation to reduce the par value of the
Abstain ___ Corporation's Common Stock from $3.57 to $0.50 per share.
For ___ 4. To consider and ratify the proposed Amendment to the
Against ___ Corporation's Automatic Dividend Reinvestment Plan
Abstain ___ to allow the Agent to purchase authorized but unissued
shares of Common Stock from the Corporation.
For ___ 5. To consider and ratify the appointment of S.R.
Against ___ Snodgrass A.C. as independent auditors for the year ending
Abstain ___ December 31, 1995.
For ___ 6. In accordance with the judgement of the said proxies to
Against ___ vote upon such other matters as may be presented for
Abstain ___ consideration and action.
DATED _________________ ________________________________________________
________________________________________________
Signature(s)
When signing in a fiduciary capacity, please give
full title. All joint owners should sign.
Please sign, date and return your Proxy promptly in the
enclosed envelope to BELMONT NATIONAL BANK, 154 West Main
Street, St. Clairsville, Ohio 43950.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION. THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" ALL OF THE ABOVE ITEMS.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
BELMONT BANCORP.
April 18, 1995
To the Shareholders of BELMONT BANCORP.:
The Annual Meeting of Shareholders of BELMONT BANCORP. will be held in
the Belmont National Bank conference room on the second floor at Belmont
National Bank, 150 West Main Street, St. Clairsville, Ohio, on Tuesday,
April 18, 1995, at 11:00 a.m. for the following purposes:
1. To elect four (4) persons as Directors to serve for a three-year
term expiring at the annual shareholders' meeting in 1998.
2. To consider and act upon the proposed Amendment to the Articles of
Incorporation to increase the number of authorized shares of capital
stock from 1,850,000 to 9,000,000 shares.
3. To consider and act upon the proposed Amendment to the Articles
of Incorporation to reduce the par value of the Corporation's Common Stock
from $3.57 per share to $0.50 per share.
4. To consider and ratify the proposed Amendment to the Corporation's
Dividend Reinvestment Plan to allow the Agent to purchase authorized but
unissued shares of Common Stock from the Corporation.
5. To consider and act upon a proposal to ratify the appointment of
S. R. Snodgrass A.C. as independent auditors for the year ending
December 31, 1995.
6. To transact such other business as may properly come before the
meeting and any adjournment thereof.
Only shareholders of record at the close of business on February 28,
1995, are entitled to notice of and to vote at the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND DATE
THE ENCLOSED FORM OF PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
PROXIES MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTING THEREOF. THUS,
IF YOU ARE PRESENT AT THE MEETING AND SO REQUEST YOUR PROXY WILL NOT BE
USED.
BY ORDER OF THE BOARD OF DIRECTORS.
JANE R. MARSH, Secretary
Bridgeport, Ohio
March 17, 1995
<PAGE>
PROXY STATEMENT
OF
BELMONT BANCORP.
325 Main Street
Bridgeport, Ohio 43912
ANNUAL MEETING OF SHAREHOLDERS
April 18, 1995
This Proxy Statement is furnished to the shareholders of Belmont
Bancorp. in connection with the solicitation by the Board of Directors
of Belmont Bancorp. (the Corporation) of proxies for the annual
Meeting of Shareholders of the Corporation to be held on April 18, 1995,
in the conference room of Belmont National Bank, 150 West Main Street,
St. Clairsville, Ohio, and any adjournment thereof. Shares represented
by properly executed proxies received at the time of the meeting that
have not been revoked will be voted at the meeting in the manner
described in the proxies. Any proxy may be revoked any time before it
is exercised.
This Proxy Statement and the accompanying Proxy are being mailed to
shareholders on March 17, 1995.
The Board of Directors has fixed the close of business on February 28,
1995, as the record date for the determination of shareholders entitled
to notice of and to vote at the Annual Meeting. On the record date
1,057,322 shares of Common Stock of the Corporation were outstanding
and entitled to be voted at the meeting. Each share of Common Stock is
entitled to one vote except in the election of Directors where
shareholders are entitled to cumulate their votes. Cumulative voting
permits each shareholder as many votes as shall equal the number of his
shares of Common Stock multiplied by the number of Directors to be
elected, and he may cast all of such votes for a single Director or he
may distribute them among the number to be voted for, as he may see fit.
The proxies are solicited by the Board of Directors of the
Corporation, and the cost thereof is being borne by the Corporation.
Proxies may be revoked by the shareholders who execute them at any time
prior to the exercise thereof, by written notice to the Corporation or
by announcement at the Shareholders' Meeting. Unless so revoked, the
shares represented by all proxies will be voted by the persons named in
the proxies at the Shareholders' Meeting and at all adjournments
thereof, in accordance with the specifications set forth therein, or,
absent such specifications, in accordance with the judgment of the
holders of such proxies.
<PAGE>
PROPOSAL NUMBER 1: ELECTION OF DIRECTORS
The Board of Directors of the Corporation by resolution at its meeting
on January 17, 1995, set the number of Directors at fourteen (14)
members with four (4) members to be elected to the class which expires
at the annual meeting in 1998. All nominees are currently Directors of
the Corporation and its principal subsidiary, Belmont National Bank.
Except for James R. Miller, each nominee has continuously served in his
principal occupation for the past five years.
The following persons have been nominated for election to the Board of
Directors to serve for a three-year term expiring at the annual
shareholders' meeting in 1998:
Common Stock
Name And Year First %of
Principal Occupation Age Elected Amount Total
J. Vincent Ciroli, Jr. 49 1984 4,655 *
President & Chief
Executive Officer,
Belmont Bancorp. and
Belmont National Bank
John H. Goodman, II
Chairman, Belmont Bancorp 50 1974 19,315 (1) 1.83
and Belmont National Bank;
Realtor, President
Goodman Group, Inc.
Keith A. Sommer (2) 54 1995 1,167 *
Attorney, Partner, Sommer,
Sollovan, Liberati
& Shaheen
James R. Miller (3) 52 1995 100 *
Vice President & General
Manager Joy Technologies
Inc., April 1, 1992 to
present; Specialty Opera-
tions Manager, Westing-
house Electric, 1970-92
Footnotes
1. This amount includes 1,427 shares held in the name of Marylouise
Goodman IRA, and 61 shares held in the name of Marylouise Goodman, wife
of John H. Goodman, II, to which Mr. Goodman disclaims any beneficial
interest. This amount also includes 10,541 shares held in the name of
John H. Goodman, II and Terrence A. Lee, Trustees under a trust dated
February 2, 1991, to which Mr. Goodman disclaims any beneficial
interest.
2. Keith A. Sommer was appointed to the Board on January 17, 1995, to
serve out the remainder of the term of J. Harvey Goodman who retired.
<PAGE>
3. James R. Miller was appointed to the Board on February 21, 1995, to
serve out the remainder of the term of Daniel A. Giffin who retired.
*Denotes less than a 1% interest.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF THE ABOVE
NOMINEES TO THE BOARD OF DIRECTORS OF BELMONT BANCORP.
In addition to the foregoing nominees, the following persons are
presently serving as members of the Board of Directors:
Directors Whose Term of Office Will Expire at the Annual Shareholders'
Meeting in 1996
Common Stock
Name And Year First %of
Principal Occupation Age Elected Amount Total
William P. Goddard 61 1977 2,791 *
Retired, former President of
Central Division North
American Coal Co.
Mary L. Holloway Haning 39 1993 775 (4) *
Director of Admissions,
Wheeling Country Day School
Charles J. Kaiser, Jr. 45 1979 4,474 (5) *
Attorney, Partner, Phillips,
Gardill, Kaiser & Altmeyer
Thomas Olszowy 48 1993 6,983 (6) *
Independent Insurance Agent,
Tom Olszowy Insurance Agency
Charles A. Wilson, Jr. 52 1973 4,238 (7) *
President,
Wilson Funeral & Furniture Co.
Footnotes
4. This amount includes 512 shares held for the benefit of Mary L.
Holloway Haning in trust in which Wesbanco Bank Wheeling is trustee.
5. This amount includes 36 shares held in the name of Deborah P.
Kaiser, IRA, wife of Charles J. Kaiser, Jr., to which Mr. Kaiser
disclaims any beneficial interest and 300 shares held in the name of
Marchak Investment Co., a partnership, in which Mr. Kaiser is a general
partner and holds a substantial beneficial interest.
<PAGE>
6. This amount includes 5,941 shares held in the names of Tom and
Diana Olszowy joint tenants with right of survivorship in which Mr.
Olszowy shares voting and investment power. This amount also includes
151 shares held in the name of Tom Olszowy, custodian for Dana Paul
Olszowy, and 151 shares held in the name of Tom Olszowy, custodian for
Jonathan T. Olszowy, to which Mr. Olszowy disclaims any beneficial
interest.
7. This amount includes 1,561 shares held in the name of Wilson Funeral
and Furniture Company of which Mr. Wilson is President, holds a
substantial stock interest and has voting power.
Directors Whose Term of Office Will Expire at the Annual Shareholders'
Meeting in 1997
Common Stock
Name And Year First %of
Principal Occupation Age Elected Amount Total
John A. Belot 52 1979 10,578 (8) 1.0
Vice President,
Premier Concrete Products, Inc.
Terrence A. Lee, CPA 45 1987 840 (9) *
Partner, Lee, O'Connor &
Associates
Dana J. Lewis 51 1994 2,256 *
President, Zanco
Enterprises, Inc.
New Philadelphia, Ohio;
Owner/ Operator of McDonalds
restaurants
W. Quay Mull, II 52 1984 6,216 (10)*
Chairman of the Board
Mull Industries, Inc.
William Wallace 39 1991 4,663 (11)*
Executive Vice President &
Chief Operating Officer,
Belmont National Bank;
Vice President,
Belmont Bancorp.
Footnotes
8. This amount includes 3,162 shares held jointly by Terry L. Belot,
wife of John A. Belot, and Jason Michael Belot, son of John A. Belot;
3,162 shares held jointly by Terry L. Belot and John A. Belot, Jr., son
of John A. Belot; 2,750 shares held in the name of Jason Michael Belot;
and 322 shares held in the name of John A. Belot, Jr. Mr. John A. Belot
has retained voting rights with respect to these shares. This amount
also includes 440 shares held in the name of Terry L. Belot IRA, to
which Mr. Belot disclaims any beneficial interest.
<PAGE>
9. This amount includes 6 shares held in the name of Terrence A. Lee,
Custodian for Katherine M. Lee, UOTMA; 6 shares held in the name of
Terrence A. Lee, Custodian for Natalie A. Lee, UOTMA; and 6 shares held
in the name of Terrence A. Lee, Custodian for Tara N. Lee, UOTMA; Mr.
Lee's minor daughters. This amount does not include 10,541 shares held
in the name of John H. Goodman, II and Terrence A. Lee, Trustees for a
trust dated February 2, 1991, to which Mr. Lee disclaims any beneficial
interest.
10. This amount includes 3,968 shares held in the name of Mull Machine
Company of which Mr. Mull is President and holds a substantial ownership
interest.
11. This amount includes 693 shares held jointly with Christine
Wallace, Mr. Wallace's wife, in which he shares voting and investment
power; 676 shares held in the name of Christine Wallace IRA, to which
Mr. Wallace disclaims any beneficial interest; 217 shares held in the
name of William Wallace as Custodian for Joseph J. Wallace, UWVTMA; 217
shares held in the name of William Wallace as Custodian for Lauren C.
Wallace, UWVTMA; 201 shares held in the name of William Wallace as
Custodian for Adrienne C. Wallace, UWVTMA; and 186 shares held in the
name of William Wallace as Custodian for William J. Wallace, UWVTMA; Mr.
Wallace's minor children.
As of February 28, 1995, the Directors and Officers of the Corporation
as a group beneficially owned 69,351 shares or 6.56 percent of the
outstanding common stock of the Corporation.
PROPOSAL NUMBER 2:
AMENDMENT TO THE CORPORATION'S AMENDED ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK
Subparagraph (1) of Article FOURTH of the Corporation's Amended
Articles of Incorporation currently provides the authority to issue
1,850,000 shares of capital stock of which 1,750,000 shares shall be
common shares with a par value of $3.57 and 100,000 shares shall be
preferred shares without par value. Subparagraph (2) of Article FOURTH
of the Corporation's Amended Articles of Incorporation grants to the
Board of Directors the authority to designate the powers, rights,
preferences and other matters related to the Preferred Stock, and the
Board of Directors by resolution dated October 2, 1992 has designated
10,000 shares of Senior Cumulative Preferred Stock with a $100 par value
per share (the "Preferred Stock"). There are 90,000
preferred shares which remain undesignated and unissued. There are
1,057,738 shares of $3.57 par value Common Stock (the "Common Stock")
presently issued.
On February 21, 1995, the Corporation's Board of Directors adopted
resolutions recommending that the shareholders adopt Amendments to the
<PAGE>
Articles of Incorporation to increase the number of authorized shares of
capital stock from 1,850,000 shares to 9,000,000 shares and to reduce
the par value of the Corporation's Common Stock from $3.57 per share to
$0.50 per share. These amendments, if approved by a majority of the
shareholders, would amend the Articles of Incorporation to increase the
number of authorized shares of capital stock of the Corporation and
reduce the par value of the Corporation's common stock. Specifically,
if adopted the amendments would delete subparagraph (1) of Article
FOURTH of the Amended Articles of Incorporation and substitute the
following:
(1) The total number of shares of stock which the Corporation
shall have the authority to issue is 9,000,000 shares which shall be
divided into 8,900,000 shares of Common Stock with a par value of
$0.50 per share, 10,000 shares of Senior Cumulative Preferred Stock
with a $100 par value per share and 90,000 shares of preferred stock
without par value which shall be subject to the provisions of
subparagraph (2) below.
As described in the preceding paragraphs above, the Corporation's
Amended Articles of Incorporation currently provides for 1,850,000
shares of capital stock comprised of 1,750,000 shares of common stock
and 100,000 shares of preferred stock.On February 21, 1995, the
Corporation's Board of Directors adopted a resolution recommending that
the shareholders adopt an Amendment to the Amended Articles of
Incorporation to increase the number of authorized shares of capital
stock, and if the Amendment is adopted, to issue a 2 for 1 split on its
Common Stock payable in the form of a one hundred percent (100%) stock
dividend payable on May 8, 1995, to shareholders of record on May 1,
1995 (the "Stock Dividend").
In addition to providing the number of shares necessary to issue the
Stock Dividend, increasing the number of authorized but unissued shares
will afford the Corporation flexibility to issue new shares in order to
raise additional capital, to acquire other financial institutions, and
for other corporate purposes. Apart from the issuance of the 100% Stock
Dividend and the registration of shares for the Dividend Reinvestment
Plan, the CORPORATION CURRENTLY HAS NO PRESENT PLAN OR AGREEMENT FOR THE
ADDITIONAL AUTHORIZED SHARES OF COMMON STOCK.
If adopted by the shareholders, the increase in the number of
authorized shares of Common stock will become effective on the date on
which the Amendment is accepted for filing by the Secretary of State of
Ohio. Management presently expects that the Amendment will be filed on
April 19, 1995 (the "Effective Date"). Under the terms of the Stock
Dividend, holders of record of the Corporation's Common Stock on May 1,
1995 (the "Record Date") will be entitled to receive one additional
share of Common Stock for each share of Common Stock held as of the
Record Date. Certificates for the additional shares of Common Stock
will be distributed on or about May 8, 1995. THE STOCK DIVIDEND WILL
NOT AFFECT THE VALIDITY OF CERTIFICATES REPRESENTING SHARES OF COMMON STOCK,
AND ACCORDINGLY, IT WILL NOT BE NECESSARY FOR ANY SHAREHOLDER TO EXCHANGE
CERTIFICATES REPRESENTING CURRENTLY OUTSTANDING SHARES.
<PAGE>
The Corporation has been advised by its independent accountants, S.R.
Snodgrass, A.C., that no taxable gain or loss under current federal
income tax laws would result from the Stock Dividend. However, the
basis of each shareholder's stock must be adjusted to take into account
the additional shares. The holding period of the additional shares will
be deemed to be the holding period for the original shares.
Shareholders are cautioned that this information is only general in
nature and not intended as a substitute for tax advice. Each
shareholder is urged to contact his own tax advisors for specific
information regarding the impact of applicable federal or state laws.
The Board of Directors believes that the increase in the number of
outstanding shares of common stock will make it easier for our
shareholders to acquire stock, will cause a broader market, and enhance
investor interest, thereby creating additional liquidity and trading
volume.
Adoption of this Amendment requires the affirmative vote of a majority
of the outstanding shares of Common Stock entitled to vote at the Annual
Meeting. The Board of Directors unanimously recommends a vote FOR
Proposal Number 2. Proxies not otherwise specified will be voted in
favor of Proposal Number 2 (Increasing the Authorized Stock).
PROPOSAL NUMBER 3:
AMENDMENT OF THE CORPORATION'S AMENDED
ARTICLES OF INCORPORATION TO DECREASE THE PAR VALUE
OF COMMON STOCK FROM $3.57 to $0.50 PER SHARE
As described in the paragraphs above, the Corporation's Amended
Articles of Incorporation currently provides for shares of Common Stock
with a par value of $3.57 per share. On February 21, 1995, the
Corporation's Board of Directors adopted a resolution, subject to the
approval of the shareholders, reducing the par value of the
Corporation's Common Stock from $3.57 per share to $0.50 per share.
Under Ohio law, a corporation is required to maintain stated capital
equal to the amount of shares outstanding times the par value of each
share. While the Corporation recognizes the need to retain significant
capital, the Corporation will have significantly more flexibility by
maintaining that capital in a capital surplus account or a retained
earnings account. As of December 31, 1994, the Corporation had
$3,777,000 in its common stock account (stated capital), $5,061,000 in
the surplus account, and $11,026,000 in the unappropriated retained
earnings account. If the Corporation issued a 100% Stock Dividend
without modifying the par value, it would be required to transfer
$3,775,000 from the retained earnings account to the stock account where
this amount would be unavailable for other uses. By reducing the par
value of the common stock to $0.50 per share, after the 100% Stock Dividend is
issued the common stock account (stated capital) will be $1,057,000, the
surplus account will be $11,556,000, and the retained earnings account will be
$7,251,000 based upon balances as of December 31, 1994.
<PAGE>
Cash dividends are available for payment only from unappropriated
retained earnings. Consequently, if this amendment is adopted, future
stock dividends, if any, will have less of an impact on the
unappropriated retained earnings account and, therefore, make more funds
available for cash dividends.
If this amendment is adopted by the shareholders, the change in the
par value of Common Stock will become effective on the date on which the
Amendment is accepted for filing by the Secretary of the State of Ohio.
Management presently expects that the Amendment will be filed on April
19, 1995 (the "Effective Date"). The change in the par value of the
Common Stock will not affect the certificates representing shares of
Common Stock, as all Common Stock outstanding will be deemed to have a
par value of $0.50 per share, and, accordingly, it will not be necessary
for any shareholder to exchange certificates representing currently
outstanding shares.
Adoption of the Amendment Reducing the Par Value of the Common Stock
will require the affirmative vote of a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting. The
Board of Directors unanimously recommends a vote FOR the Amendment
Reducing the Par Value. Proxies not otherwise specified will be voted
in favor of the Amendment Reducing the Par Value of the Common Stock.
PROPOSAL NUMBER 4:
AMENDMENT OF THE CORPORATION'S AUTOMATIC
DIVIDEND REINVESTMENT PLAN TO ALLOW THE AGENT
TO PURCHASE AUTHORIZED BUT UNISSUED SHARES OF
COMMON STOCK FROM THE CORPORATION.
The Corporation's Automatic Dividend Reinvestment Plan (the "Plan")
currently permits its Agent, KeyCorp Shareholder Services, Inc., to
purchase shares of the Corporation's Common Stock on any exchange where
the Common Shares are traded, in the over-the-counter market or in
negotiated transactions to meet the demand for shares by participants
in the Plan. On October 19, 1994 the Corporation's Common Stock was
listed on the Nasdaq SmallCap Market. On February 21, 1995, the Board
of Directors adopted a resolution amending the Plan, subject to ratification
by the shareholders to allow the Agent to purchase authorized but
unissued shares from the Corporation in addition to the existing methods
of purchasing Common Stock for the Plan. The price of the stock
purchased from the Corporation will be the average of the high and low
sales price on the Nasdaq SmallCap Market for the last five days on
which such shares traded prior to the dividend payment date. A complete
copy of the Amended Dividend Reinvestment and Stock Purchase Plan is attached
as Exhibit A.
If this Proposal is ratified by a majority of shareholders, the
Corporation must file a registration statement with the Securities and
Exchange Commission to register authorized shares of the Corporation's
Common Stock for sale to the Corporation's Automatic Dividend
<PAGE>
Reinvestment Plan. Until this registration is effective, the Agent will
continue to rely upon stock purchased on the Nasdaq SmallCap Market, in
the over-the-counter market or in negotiated transactions to meet the
demand for shares in the Plan.
Based upon the present participation in the Plan, approximately 1,500
(3,000 after implementation of proposed 100% stock dividend) shares are
necessary each quarter to satisfy the requirements of the Plan.
Accordingly, not more than fifty thousand (50,000) shares will be
registered for this purpose. If all of the shares registered for this
purpose are sold by the Corporation, there will be a slight ownership
dilution (less than 2.5%) to the present shareholders who choose not
to participate in the Plan. The Corporation intends to apply such proceeds
as are received for general corporate purposes. Shares purchased in
market or negotiated transactions will provide no proceeds to the Corporation.
Adoption of Proposal Number 4 will require the affirmative vote of a
majority of the outstanding shares of Common Stock entitled to vote at
the Annual Meeting. The Board of Directors unanimously recommends a
vote FOR the Proposal to Amend the Dividend Reinvestment Plan. Proxies
not otherwise specified will be voted in favor of Proposal Number 4 to
Amend the Dividend Reinvestment Plan.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
Certain Directors and Executive Officers and their associates were
customers of and had transactions with the Bank in the ordinary course
of the Bank's business during 1994. From time to time the law firm of
Phillips, Gardill, Kaiser & Altmeyer, of which Charles J. Kaiser, Jr., a
director of both the Corporation and the Bank, is a partner, has
rendered legal services to the Corporation and the Bank. It is
contemplated that this firm will be retained to perform legal services
during the current year.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES AND COMPENSATION OF
MEMBERS
The Board of Directors of the Corporation met eight (8 ) times during
the year 1994. Each member of the Board of Directors of the Corporation
attended seventy-five percent (75%) or more of the total number of
meetings of the Board and its committees of which they were members.
The Board of Directors of Belmont National Bank met twelve (12 ) times
during 1994. The Directors of the Corporation and the Bank are the
same.
The Board of Directors elects an Executive Committee annually.
Messrs. Ciroli, Goodman, Kaiser, Lee, Mull, Olszowy and Wilson are
members of the Executive Committee of both the Corporation and the Bank.
Meetings of the Executive Committee are called to consider Corporation
or Bank business which may arise between normally scheduled meetings or
to consider in depth policies and make recommendations to the Board of
Directors. The Executive Committee of the Bank met four (4) times during
1994.
<PAGE>
The Executive Committee of the Corporation also serves as a
Nominating Committee. As such, the Committee seeks and recommends
individuals for nomination as directors. The Nominating Committee will
consider as prospective directors persons suggested to them by any
shareholder.
Messrs. Kaiser, Lee, Mull, Olszowy and Wilson are members of the Audit
Committee of the Bank and the Corporation. The Audit Committee reviews
the reports of the Bank's internal auditor, the reports of the
Corporation's independent Certified Public Accountants, the adequacy of
internal controls and procedures, and reports to the Board of Directors
of the Corporation and the Bank. This Committee met four (4) times
during 1994.
The Bank also has a Trust Committee that met four (4) times in 1994
whose members are Messrs. Belot, Dolan, Giffin, Goddard, Goodman,
Haning, Lewis and Wallace. The Trust Committee of the Bank approves the
operations of the Trust Department and reports to the Board of
Directors.
Directors who are not employees of the Corporation or the Bank receive
an annual retainer fee of Two Thousand Dollars, payable quarterly in
arrears, plus an attendance fee of Two Hundred Dollars for each Board or
Committee Meeting attended. When Corporation and Bank meetings meet
concurrently, only one attendance fee is paid. During 1994, a total of
$62,885.23 was paid to Directors.
In addition to the fees paid to Directors, Mr. Richard G. Anderson and
Mr. Wilbur L. Terhune, each of whom is a retired Chairman of the Board,
received payments under a Deferred Compensation Plan adopted by the
Board of Directors on December 15, 1983. Mr. Anderson received
$2,975.04 and Mr. Terhune received $5,567.04 during 1994 under this
plan. The Deferred Compensation Plan provided an early retirement
benefit to covered individuals equal to eighty percent (80%) of a factor
corresponding to the number of years the employee's early retirement
date preceded his normal retirement date, multiplied by the employee's
average compensation as defined under the Bank's retirement plan, minus
the employee's monthly accrued benefit under the Bank's retirement plan
on a straight life annuity basis. This amount is further reduced by the
employee's primary social security benefit. Mr. Terhune's benefit is
further reduced by a pension which he receives from a plan unrelated to
the Corporation or the Bank.
EXECUTIVE COMPENSATION
The Executive Committee without the executive officers serves as the
Compensation Committee for Belmont National Bank. The officers of the
Corporation are currently serving without compensation from Belmont
Bancorp. They are, however, compensated by Belmont National Bank for
services rendered as officers of the Bank. This Committee is
<PAGE>
responsible for setting compensation levels for the President and CEO,
J. Vincent Ciroli, Jr.; the Executive Vice President,
William Wallace; and the Senior Vice President, Controller and Cashier,
Jane R. Marsh. The Committee also consults with senior officers with
respect to the compensation and benefits of other officers and employees
of the Corporation.
COMPENSATION PHILOSOPHY
The Corporation bases different portions of its executive compensation
program on differing measures of corporate performance. As a result,
the Corporation's compensation program currently reflects the following
themes:
A material portion of compensation should be meaningfully related
to corporate performance.
Since the Corporation has chosen a senior executive team to manage
the operations of the Corporation, bonus compensation for these senior
executives should be based on team effort and performance of the
Corporation as a whole.
Bonus compensation should be related to the return on shareholders'
equity and should be payable only if the shareholders have received a
reasonable return on the equity.
Compensation should play a critical role in attracting and
retaining executives whom the Corporation deems most able to further
its goals and, therefore, should be comparable to compensation paid by
comparable peer organizations.
SUMMARY COMPENSATION TABLE
For the year ended December 31, 1994, J. Vincent Ciroli, Jr. and
William Wallace were the only officers compensated in excess of
$100,000. Their compensation is summarized in the following table:
Name and All Other
Principal Position Salary Bonus Compensation
J. Vincent Ciroli, Jr. 1994 $129,900.06 $88,181.00 $9,439.38
President & 1993 $126,600.00 $41,143.00 $8,488.62
Chief Executive 1992 $118,938.59 .00 $6,361.80
Officer Belmont
and Belmont National
Bank
William Wallace 1994 $94,734.91 $64,303.00 $6,685.09
Vice President, 1993 $92,365.56 $30,021.00 $5,703.84
Belmont Bancorp. 1992 $87,023.86 .00 $4,539.41
and Executive Vice
President & Chief
Operating Officer,
Belmont National Bank
<PAGE>
PAY MIX AND MEASUREMENT
The Corporation's executive compensation program is based on three
components, each of which is intended to serve the overall compensation
philosophy.
BASE SALARY is targeted at the competitive median for peer banking
organizations. In order to determine these amounts, the Committee
utilizes the Sheshunoff tables, the Executive Studies Group (a division
of Ben S. Cole Financial, Inc.), and the Bank Wage-Hour & Personnel
Service. Salaries for the executive officers named in the Summary
Compensation Table are reviewed by the Committee on an annual basis and
may be increased or decreased at that time based on the Committee's
agreement of how the management team and the respective individual
contributes to the Corporation, as well as increases in median
competitive pay levels.
ANNUAL BONUS INCENTIVES for executive officers
are intended to reflect the Corporation's belief that management's
contribution to corporate performance comes, in part, from maximizing
the Corporation's return on common shareholders' equity. Accordingly,
the Board of Directors adopted an Executive Incentive Compensation Plan
in 1989 to provide incentive compensation based upon the earnings of
Belmont National Bank. Amounts paid under the Plan are included in the
"Bonus" column in the Summary Compensation Table above. The individuals
covered by the Plan are J. Vincent Ciroli, Jr., William Wallace and
Jane R. Marsh, Senior Vice President, Controller and Cashier of Belmont
National Bank. Since 1990, the formula for calculating the Executive
Incentive Compensation Plan bonus was based upon the return on equity
(ROE) achieved by Belmont National Bank. Twenty percent (20%) of
earnings in excess of a selected rate of return on shareholders' equity
as of the beginning of each year comprised the bonus pool. The selected
rate of return on shareholders' equity is established annually by the
Board of Directors. The bonus pool is allocated among the executive
officers based upon the ratio of the participant's salary to total
participants' salaries. The selected rates of return on beginning
shareholders' equity was thirteen percent (13.00%) for 1994, 1993 and
1992. The Committee believes that this program provides an appropriate link
between the Corporation's performance and the incentives paid to the
executive officers. The return on equity goal is established by the
Committee annually.
OTHER COMPENSATION is provided so that the Corporation's overall benefits
are comparable with other similar organizations so as to attract and
retain competent management.
The Bank has a Defined Contribution 401(k) Savings Plan which allows
employees who work over 1,000 hours per year to defer up to 10% of their
pre-tax salary to the Plan. The Bank matches fifty percent (50%) of
the first four percent (4%) deferred. The Bank may also make voluntary
contributions to the Plan. In 1994, the Bank paid $31,586.60 in
matching funds and made a voluntary contribution of $80,397.35, or five
percent (5%) of annual salary. In 1994, the profit sharing contribution
attributed to Mr. Ciroli was $6,330.00; the matching funds contribution
was $2,598.09. The profit sharing contribution paid for Mr. Wallace was
$4,618.28; the matching funds contribution was $1,894.73. This
compensation is included in the "All Other Compensation" column in the
Summary Compensation Table above.
<PAGE>
The Bank provides reimbursement for club fees, membership dues and
entertainment expenses for business use by Mr. Ciroli and Mr. Wallace.
The Bank also provides Mr. Ciroli and Mr. Wallace with the use of a
company car. Personal benefits from such expenditures are less than 10%
of salary and bonus and, therefore, have been excluded from the Summary
Compensation Table above.
The Bank maintains a split-dollar life insurance plan for several of
its officers. Under the plan, the Bank maintains ownership of all cash
value in the insurance policies and a portion of the death benefits.
The participant's named beneficiary is entitled to three times the
participant's annual salary at his death. Annually, the participant
recognizes taxable income to the extent of the assumed term cost of the
coverage. At the death of the participant, the Bank's share of the
death benefit will be sufficient to recover all costs associated with
the plan. For 1994, the amount of income attributable for a split-
dollar insurance plan was $511.29 and $172.08 for Mr. Ciroli and Mr.
Wallace respectively. These amounts are included in the "All Other
Compensation" column in the Summary Compensation Table above.
The Corporation adopted a Supplemental Retirement Plan for the three
executive officers at its meeting on January 18, 1994, in order to
augment the retirement benefits payable to these officers and make them
more comparable to the benefits provided under the deferred benefit plan
which was terminated in 1990. The persons covered under the plan are J.
Vincent Ciroli, Jr., President and Chief Executive Officer; William
Wallace, Vice President of the Corporation and Executive Vice President
and Chief Operating Officer of the Bank; and Jane R. Marsh, Secretary of
the Corporation and Senior Vice President, Controller and Cashier of the
Bank. Under the Plan the Corporation will credit the sum of $14,000 to
a book reserve account for the benefit of Mr. Ciroli, the sum of $5,000
for Mr. Wallace and the sum of $1,500 for Ms. Marsh and may, if approved
by the Board of Directors, deposit like amounts during the years 1995,
1996, 1997, and 1998. The balance in the book reserve account will be
invested as directed by the Board and distributed to the officer over a
ten (10) year period following retirement. The officer will bear the
risk of earnings in the book reserve account. Under the Plan the
maximum amount that can be paid to Mr. Ciroli is $43,000 per annum; to
Mr. Wallace $40,000 per annum; and to Ms. Marsh $11,250 per annum. The
supplemental retirement benefits may be forfeited if the employee is
terminated for cause.
COMPENSATION COMMITTEE
John H. Goodman, II Thomas Olszowy
Charles J. Kaiser, Jr. W. Quay Mull, II
Terrence A. Lee Charles A. Wilson, Jr.
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph compares for each of the last five years ending
December 31 the cumulative total return of the Corporation's Common
Stock, All Nasdaq US Stocks Index and SNL Securities' Index of Banks
with Assets Size less than $500 million. The cumulative total return of
the Corporation's Common Stock assumes $100 invested on December 31,
1989 and assumes reinvestment of dividends.
<TABLE>
BELMONT BANCORP.
STOCK PRICE PERFORMANCE
<CAPTION>
SNL SECURITIES'
INDEX OF BANKS WITH ALL NASDAQ U.S.
BELMONT BANCORP. ASSETS LESS THAN $500M STOCKS
MEASUREMENT PERIOD
<S> <C> <C> <C>
MEASUREMENT POINT-
12/31/89 $100.00 $100.00 $100.00
YEAR ENDED 12/31/90 $120.97 $ 55.00 $ 84.92
YEAR ENDED 12/31/91 $126.65 $ 77.36 $136.28
YEAR ENDED 12/31/92 $138.77 $112.70 $158.58
YEAR ENDED 12/31/93 $151.72 $138.53 $180.93
YEAR ENDED 12/31/94 $284.60 $146.52 $176.92
</TABLE>
PROPOSAL NUMBER 5: SELECTION OF AUDITORS
The Board of Directors has retained S.R. Snodgrass A.C. as independent
auditors for both the Corporation and the Bank for the year ending
December 31, 1995. There will be presented to the shareholders at the
Annual Meeting a proposal that this selection be ratified by the
shareholders. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THIS
SELECTION BE SO RATIFIED. The services rendered by S.R. Snodgrass A.C.
during the year 1994 involved auditing services primarily and consisted
of the examination of the financial statements of the Corporation and
its subsidiaries, principally the Bank. It is expected that a
representative of the accounting firm will be present at the
shareholders' meeting. Such representative will be given the
opportunity to make a statement if he desires to do so, and will be
available to respond to appropriate questions from the shareholders who
are present.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, executive officers, and persons who own more
than 10% of a registered class of the Corporation's equity securities to
file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock of the
Corporation. Officers, directors and greater than 10% shareholders are
required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file. To the Corporation's knowledge, based
solely on a review of the copies of such reports furnished to the
Corporation and written representations that no other reports were
required, during the two fiscal years ended December 31, 1994, all
section 16(a) filing requirements applicable to the Corporation's
officers, directors, and greater than 10% beneficial owners were
complied with except Dana J. Lewis and Charles A. Wilson, Jr. both of
whom filed a late Form 4 report on March 6, 1995.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors and
Management were unaware of any matters not referred to in this proxy
statement for action at the meeting. If any other business comes before
the meeting, the persons named in the proxy will have the authority to
vote the shares represented by them in accordance with their best
judgement.
METHOD AND COST OF SOLICITATION
The solicitation of proxies will be made primarily by mail. Proxies
may also be solicited personally and by telephone by regular employees
and Directors of the Corporation and the Bank without any additional
remuneration and at minimal cost. Management intends to request banks,
brokerage houses, custodians, nominees, and fiduciaries to obtain
authorization for the execution of proxies. The Corporation will bear
the entire cost of soliciting proxies.
SHAREHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
Proposals which shareholders intend to present at next year's annual
meeting, now scheduled to be held on April 19, 1996, will be eligible
for inclusion in the Corporation's proxy material for that meeting if
they are submitted to the Corporation in writing no later than November
10, 1995. A proponent may submit a maximum of two proposals of not more
than 300 words each for inclusion in the proxy material. At the time of
the submission of the proposal, a shareholder may also submit a written
statement of not more than 200 words in support thereof for inclusion in
the proxy material for the meeting, if requested by the proponent, in
the event that the proposal is opposed by the Corporation. When
submitted to the Corporation, a proposal should be accompanied by a
written notice of the proponent's intention to appear personally at the
meeting for the purpose of presenting the proposal for action.
BY ORDER OF THE BOARD OF DIRECTORS
J. VINCENT CIROLI, JR., PRESIDENT & CEO
Bridgeport, Ohio
March 17, 1995
<PAGE>
EXHIBIT A
AMENDED DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
Purchase Belmont Bancorp. Common Shares
at market price without fees of any kind
by reinvesting dividends, and at your
election, voluntary cash payments.
<PAGE>
BELMONT BANCORP. AMENDED DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Amended Dividend Reinvestment and Stock Purchase Plan (the "Plan")
of Belmont Bancorp. ("Belmont") described herein provides holders of
record of Belmont Common Stock ("Common Stock") with a simple and
convenient method of investing all or part of their cash dividends and
voluntary cash payments in additional shares of Common Stock without
payment of any brokerage commission or service charge. The Plan will be
administered by KeyCorp Shareholder Services, Inc., Cleveland, Ohio.
The price per share will be the weighted average of the per share
price paid for all the Common Stock purchased by the Plan Administrator
during the month in which the purchase is made. (See "DESCRIPTION OF THE
PLAN - 8. WHAT WILL BE THE PRICE OF THE STOCK?"). The Plan does not
constitute a guarantee of future dividends, which will depend on
earnings, financial requirements and other factors.
DESCRIPTION OF THE PLAN
The Plan, approved by Belmont Bancorp's Board of Directors, consists
of the following numbered questions and answers:
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide holders of record of Belmont
Common stock with a simple and convenient method of investing all or
part of their cash dividends and voluntary cash payments in additional
Common Stock without payment of any direct brokerage commission or
service charge (See "6. WHAT ARE THE INVESTMENT OPTIONS?").
2. WHO ADMINISTERS THE PLAN?
KEYCORP SHAREHOLDER SERVICES, INC. (the "Administrator") administers
the Plan for participants, makes purchases of shares of Common Stock for
the participants and handles all communications concerning the Plan
including administrative functions such as record-keeping, preparation
of statements of account for participants, and other clerical duties
relating to the Plan. In accordance with each stockholder's
authorization, the Administrator will:
(a) Apply all or part of the cash dividends on the shares of Belmont
Common Stock held by the participant, and on any shares acquired by the
participant under the Plan, to purchase shares of Belmont Common Stock
for such participant, and/or
(b) Apply all voluntary cash payments of $25 to $1,500 per quarter
received from the participant, who is a holder of one or more shares of
Belmont Common Stock, together with cash dividends of shares acquired
for such participant under the plan, to the purchase of shares of
Belmont Common Stock for the participant's account.
(c) The number of shares that will be purchased for a
participant's account will depend on the amount of any dividend,
voluntary cash payments, if any, and the applicable purchase price of
the Common Stock. Your account will be credited with the number of
shares (including any fractional share computed to three decimal places)
that results from dividing the amount of your dividends and voluntary
cash payments by the weighted average price of the shares purchased for
all participants. The amount of your dividends for purposes of this
computation will include cash dividends payable on all shares which you
have elected to have participate in the plan, and shares in your plan
account.
The Administrator shall not be liable under the Plan for any act done
in good faith or for any good faith omission to act including, without
limitation, any claims for liability (1) arising out of failure to
terminate a participant's participation in the Plan upon the
participant's death prior to receipt of notice in writing of such death,
and (2) with respect to the prices at which shares are purchased for
participant accounts, and the time when such purchases are made.
All correspondence regarding the Plan should refer to Belmont, and be
addressed to Belmont Bancorp. Dividend Reinvestment Plan, c/o KeyCorp
Shareholder Services, Inc., Corporate Trust Division, Dividend
Reinvestment, Box 6477, Cleveland, OH 44114-1306
3. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
Any holder of record of Belmont Common Stock is eligible to
participate in the Plan.
4. WHEN MAY, AND HOW DOES, AN ELIGIBLE STOCKHOLDER PARTICIPATE?
Any eligible stockholder may join the Plan at any time by completing
the Authorization Form and returning it to KeyCorp Shareholder Services,
Inc.
5. WHEN WILL PURCHASES OF SHARES BE MADE?
The date on which dividends and voluntary cash payments will begin to
be invested (the "Investment Date") will be the payment date of the
quarterly dividend of Belmont. Dividend payment dates for Belmont
Common Stock are expected to be the last Friday in March, June,
September and December.
For the purpose of making purchases, the Administrator will commingle
each participant's funds with those of other holders of Belmont Common
Stock who are participant's in the Plan. The Administrator will make every
effort to invest dividends and voluntary
cash payments promptly beginning on each Investment Date and in no event
later than thirty days from such date, except where necessary under any
applicable federal securities laws. No interest will be paid on funds
held by the Administrator prior to investment. All voluntary cash
payments (as above limited) shall be invested within thirty (30) days of
such date or returned to the participant if insufficient stock is
available.
Any voluntary cash payment will be refunded if the participant's
written request for a refund is received by the Administrator not less
than 48 hours before the next succeeding Investment Date.
Authorization Forms for the reinvestment of dividends received by the
Administrator on or prior to the record date for a dividend payment will
cause dividends to begin to be reinvested with that dividend payment.
6. WHAT ARE THE INVESTMENT OPTIONS?
The Authorization Form provides for the purchase of additional Common
Stock through the following investment options:
OPTION 1. Reinvest dividends on all of the shares of Belmont Common
Stock registered in shareholder's name.
OPTION 2. Reinvest dividends on part of the shares of Belmont
Common Stock registered in shareholder's name.
OPTION 3. Invest voluntary cash payments participant's may choose
to make of not less than $25 nor more than $1,500 per quarter.
Under all options, dividends on all shares credited to the participant's
account and held by the Plan Administrator shall be automatically
reinvested.
7. WHAT ARE THE LIMITS ON VOLUNTARY CASH PAYMENTS?
Voluntary cash payments are limited to a minimum of $25 and a maximum
of $1,500 per quarter. No interest will be paid on voluntary cash
payments held by the Administrator prior to their investment. No such
payments may be made prior to the record date of the next quarterly
dividend, nor subsequent to the payment date for such quarterly
dividend.
8. WHAT WILL BE THE PRICE OF THE STOCK?
Shares of authorized but previously unissued shares of Common Stock
purchased from Belmont will be at a price equal to the average of the
high and low sales price on The Nasdaq SmallCap Market for the last five
days on which such shares traded prior to the dividend payment date.
Shares of Belmont Common Stock may be purchased in the over-the-
counter market or by negotiated transactions, and may be subject to such
terms and conditions with respect to price, delivery, etc., as the
Administrator may require. Neither Belmont nor any shareholder shall
have any authority or power to direct the time or price at which shares
may be purchased, or the selection of the broker or dealer through or
from whom purchases are to be made. The price per share purchased for
each participant's account in any month shall be the weighted average
price of all such shares purchased that month, computed to three decimal
places. (See Question "20. WHAT IS THE TAX STATUS OF REINVESTED CASH
DIVIDENDS AND SHARES OF STOCK ACQUIRED THROUGH THE PLAN?").
9. HOW MANY SHARES OF COMMON STOCK WILL BE CREDITED TO
PARTICIPANTS?
Each participant's account will be credited with that number of Common
Stock equal to the amounts to be invested on behalf of the participant
divided by the applicable purchase price computed to three decimal
places. In the case of foreign shareholders, and those shareholders
subject to backup withholding, any amounts required to be withheld for
tax purposes will be deducted prior to reinvestment.
10. ARE THERE ANY FEES OR EXPENSES INCURRED BY PARTICIPANTS IN
THE PLAN?
A participant will incur no brokerage commissions or service charges
for purchases made under the Plan. Certain charges as described in the
answer to Question 13 may be incurred upon withdrawal from the Plan or
upon termination of the Plan.
11. WILL CERTIFICATES BE ISSUED FOR COMMON STOCK PURCHASED?
Common Stock purchased under the Plan will be held by the
Administrator and registered in the name of the nominee of the
Administrator as agent for participants in the Plan. Certificates for
shares of such stock will not be issued to participants unless and until
requested. The number of shares credited to an account under the Plan
will be shown on the participant's periodic statement of account.
Neither the Administrator nor its nominee will have any responsibility
for the value per share of the stock after it is purchased.
Certificates for any number of whole shares credited to an account
under the Plan will be issued without charge to a participant after
receipt of a written request from a participant who wishes to remain in
the Plan. This request should be mailed to the Plan Administrator. Any
remaining shares will continue to be credited to the participant's
account. Certificates for fractional shares will not be issued under
any circumstances. Participants may also deposit Belmont Common Stock
certificates registered in their names for credit as Common Stock held
in their account under the Plan ("credited"). There is no charge for
such deposits. Because you bear the risk of loss in sending stock
certificates to the Administrator, it is recommended that your
certificates be sent by registered mail, return receipt requested, and
properly insured. Certificates should not be
endorsed. Whenever certificates are issued to you either upon your
request or upon termination of your participation, new differently
numbered certificates will be issued.
When a certificate is issued by the Administrator in the name of a
participant in the Plan, the automatic dividend reinvestment feature of
the Plan with respect to the shares of Common Stock represented by such
certificates will continue only if the reinvestment of dividends on all
shares has been elected on the Authorization Form or if the participant
authorizes the reinvestment of the dividends on the shares represented
by that certificate by submitting a new Authorization Form.
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. In the event a participant elects to terminate
participation in the plan, the Administrator will liquidate to cash all
fractional shares based on the market value of Common Stock on the date
the termination of the participant's account becomes effective, all as
determined by the Administrator in its sole discretion.
12. IN WHOSE NAME WILL CERTIFICATES BE REGISTERED WHEN ISSUED TO
PARTICIPANTS?
Accounts under the Plan are maintained in the names in which
certificates of the participants were registered at the time they
entered the Plan. Consequently, certificates for shares of Common Stock
will be similarly registered when issued to participants.
13. HOW DOES A PARTICIPANT WITHDRAW FROM THE PLAN?
A participant may withdraw from the Plan at any time by notifying the
plan Administrator in writing. To be effective on any given dividend
payment date, the notice must be received by the Plan Administrator
before the record date for that payment. In the event of withdrawal, or
in the event of termination of the Plan, certificates for whole shares
of Common Stock credited to a participant's account under the Plan will
be delivered to the participant. Any fractional share credited to the
participant's account will be distributed by the Administrator through a
cash payment based on the market value of Common Stock on the date the
withdrawal of the participant's account becomes effective, all as
determined by the Administrator in its sole discretion.
Alternatively, a participant may request the Administrator to sell all
shares, or part of the shares credited to the participant's account
under the Plan. In that case, the sale will be made as promptly as
practicable after receipt by the Administrator of the request. If a
participant elects to sell all full shares credited to the participant's
account, any remaining fractional shares will automatically be
distributed as an additional cash payment as above described. The
participant will receive the proceeds of the sale less any related
brokerage commissions, and deductions for backup withholding, if
applicable.
14. WHAT HAPPENS WHEN A PORTION OF A PARTICIPANT'S STOCK IS SOLD
OR TRANSFERRED?
If a participant disposes of a part of Belmont Common Stock registered
in participant's name, dividends on the remaining shares, to the extent
authorized, including all shares credited under the Plan, will continue
to be reinvested.
15. WHAT HAPPENS IF BELMONT ISSUES A STOCK DIVIDEND, DECLARES A STOCK
SPLIT, OR HAS A RIGHTS OFFERING?
Any shares of Common Stock distributed by Belmont as a stock dividend
on shares of Belmont Common Stock credited to an account under the Plan,
or upon any split of such stock, will be credited to the account. Stock
dividends or splits distributed on all other shares held by a
participant and registered in a participant's own name will be mailed
directly to the participant. In the event that Belmont makes available
to its holders of Common Stock rights to subscribe to additional shares,
debentures, or other securities, the shares credited to an account under
the Plan will be added to other shares held by the participant in
calculating the number of rights to be issued to such participant.
16. HOW WILL A PARTICIPANT'S STOCK BE VOTED AT MEETINGS OF
SHAREHOLDERS?
Each participant will have the sole right to vote shares purchased for
such participant which are held by the Administrator under the Plan on
the record date for a vote. Participants under the Plan who are
registered holders of Belmont Common Stock will receive only one proxy
which will include any shares credited to an account under the Plan.
17. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
A statement describing any dividends invested, the number of shares of
Common Stock purchased, the price per share, and the total shares of
Common Stock accumulated under the Plan will be mailed to each
participant by the Plan Administrator as soon as practicable after
completion of each investment for a participant's account. Dividends
paid on the accumulated shares, and fees and brokerage commissions paid
on each participant's behalf by Belmont, will be included in the Form
1099 DIV information return to the Internal Revenue Service. A separate
Form 1099 DIV will be sent for each class of stock covered in the Plan.
Presently, only Belmont Common Stock is covered by the Plan.
In addition, each participant will receive a copy of each
communication sent generally to holders of Common Stock.
18. WHO INTERPRETS AND REGULATES THE PLAN?
The Administrator and Belmont Bancorp. The terms, conditions, and
operations of the Plan are governed by the laws of the State of Ohio.
19. MAY THE PLAN BE MODIFIED OR TERMINATED?
The Administrator and Belmont may agree from time to time to
amendments and modifications of the Plan.
The Administrator, for whatever reason, at any time as it may
determine in its sole discretion, may terminate a participant's
participation in the Plan (and will terminate the Plan upon request by
Belmont) after mailing a notice of intention to terminate to the
participant affected at the address appearing on the Administrator's
records. Upon termination, participants will receive a check for the
cash value of any fractional share and certificates for the full shares
of Common Stock in the participant's account unless the sale of all or
part of such shares is requested by the participant. Such sale will be
made as set forth in answer to Question 13 with respect to withdrawal
from the Plan.
20. WHAT IS THE TAX STATUS OF REINVESTED CASH DIVIDENDS AND SHARES OF
STOCK ACQUIRED THROUGH THE PLAN?
ACQUISITION OF COMMON STOCK UNDER THE PLAN: For federal income tax
purposes, participants who have their cash dividends reinvested in
Common Stock under the Plan will be treated the same as nonparticipants
with respect to dividends on their shares. Participants will be treated
as having received on each dividend payment date, the full amount of the
cash dividends for that dividend payment date, even though the dividends
are not actually received in cash but instead are applied to the
purchase of shares for their accounts.
Each participant's tax basis in the shares of Common Stock purchased
will be equal to the amount of the cash dividends applied to the
purchases of such shares.
The Internal Revenue Service has ruled that brokerage commissions and
service charges paid by a corporation on a participant's behalf in
connection with stock purchased in the open market, as under this plan,
will be treated as distributions subject to federal income tax in the
same manner as dividends. However, these rulings further provide that
the amount paid to cover service charges may be deductible by a
participant who itemizes deductions on his federal income tax return and
the amount paid for brokerage commissions will be added to a
participant's tax basis for the shares purchased.
DISPOSITIONS OF COMMON STOCK UNDER THE PLAN: No taxable income will
be realized upon a participant's receipt of certificates for whole
shares of Common Stock acquired under the Plan. Gain or loss may be
recognized by a participant when shares are sold or otherwise disposed
of in a taxable exchange, whether by the Administrator on behalf of the
participant, or by the participant upon withdrawal from or termination
of the Plan. The amount of such gain or loss will be the difference
between the amount the participant receives for the shares and his tax
basis in such shares. A participant must also recognize gain or loss
upon receipt of a cash payment for a fractional share equivalent
credited to the participant's account upon termination of participation
in, or termination of, the Plan. The amount of gain or loss will be the
difference between the amount that the participant received for the
fractional share equivalent, and the tax basis thereof.
Participants are advised to consult with their own tax advisers to
determine the particular tax consequences that may result from their
participation in the Plan and the subsequent sale or other disposition
of Common Stock acquired under the Plan. Participants should also
consult their own tax advisers to determine the effect of state, local
and foreign tax laws on their participation in the Plan.
