<PAGE>
This Prospectus is filed
Pursuant to Rule 424b3
Registration No. 333-36472
Prospectus dated May 17, 2000
BELMONT BANCORP.
3,000,000 COMMON SHARES $2.00 PER SHARE
<TABLE>
<S> <C>
Belmont Bancorp.
$4.0 million of additional capital to meet the
Belmont Bancorp. required ratio. If we fail to achieve a Tier l
325 Main Street leverage ratio of 6%, we will
Bridgeport, Ohio 43912 discuss various steps with the regulators, which
could include the following or other actions:
Trading
. We could seek to sell all or a portion of the
Our shares are listed on the Nasdaq Bank's assets or deposits or enter into a strategic
SmallCap Market with the trading partnership with another financial institution. If
symbol BLMT. we reduce our assets, we could limit our ability to
generate earnings in future periods to the extent
The Offering: we sell our most productive assets. If the Bank is
sold or a strategic partner or other person invests
We are offering to our existing in or provides financing to us, any shares you
shareholders, depositors and other purchase could have a market value less than the
persons shares of our common stock, offering price as a result of the terms of any such
subject to shares remaining available transaction.
for purchase upon completion of the
rights offering. This offering will . At the conclusion of this offering, we could
remain open for the period from May seek additional financing through other sources. In
17, 2000 to June 30, 2000, subject to this instance, we could sell common stock or
extension for up to an additional 90 securities convertible into common stock at a price
days in our sole discretion. per share less than the price in this offering, and
any sales of additional stock would dilute your
We are selling our common stock on a interest in Belmont. We could also sell preferred
best efforts basis directly and stock or debt securities, either of which would
through a selling agent. have rights preferential to those of our common
stock.
We plan to use the net proceeds from this
offering to increase the Bank's
capitalization in order to meet a minimum
capital requirement specified by our
Federal regulators of Tier l Capital at
least equal to 6% of adjusted total
assets. At April 30, 2000, the Bank's
unaudited estimated Tier l leverage ratio
was approximately 4.6%. We need to raise
approximately
</TABLE>
<TABLE>
<CAPTION>
Price to Public Selling Commissions (1) Proceeds to Belmont (1)
------------------- -------------------------- ---------------------------
<S> <C> <C> <C>
Per Share $ 2.00 $ 0.30 $ 1.70
Total (assuming 1,500,000 shares
are sold in the offering) $3,000,000 $450,000 $2,550,000
Total (assuming 3,000,000 shares
are sold in the offering) $6,000,000 $450,000 $5,550,000
</TABLE>
_____________________________
(1) A selling agent has agreed to seek to sell up to 1,500,000 shares on a best
efforts basis for the commission specified. Belmont expects to offer the
remaining shares directly, also on a best efforts basis.
This investment involves risk. Investors should be able to afford the loss of
their investment. See "Risk Factors" beginning on page 5.
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
The shares offered hereby are not bank deposits and are not insured by the
Federal Deposit Insurance Corporation or any other agency or company. The
Federal Deposit Insurance Corporation has not passed, and does not pass, upon
the merits of these or any other securities nor do they pass upon the accuracy
or completeness of any prospectus or other selling literature.
<PAGE>
Belmont Bancorp.
3,000,000 shares of Common Stock
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary...................................... 3
Risk Factors............................................ 5
Where You Can Find More Information..................... 8
Incorporation of Information That We File With the SEC.. 9
Forward-Looking Statements.............................. 9
Use of Proceeds......................................... 10
Determination of Offering Price......................... 10
Dilution................................................ 10
Plan of Distribution.................................... 11
Description of Capital Stock............................ 12
Legal Opinion........................................... 15
Subscription Agreement.................................. A-1
</TABLE>
<PAGE>
For Pennsylvania Residents: You have accepted an offer to purchase these
securities made pursuant to a prospectus which contains a notice explaining your
right to withdraw your acceptance pursuant to Section 207(m) of the Pennsylvania
Securities Act of 1972 (70 P.S. 1-207(m)), you may elect, within two business
days after the first time you have received the notice and a prospectus to
withdraw from your purchase agreement and receive a full refund of all monies
paid by you. Your withdrawal will be without any further liability to any
person. To accomplish this withdrawal, you need only send a letter or telegram
to the issuer (or underwriter if one is listed on the front page of the
prospectus) indicating your intention to withdraw. Such letter or telegram
should be sent and postmarked prior to the end of the aforementioned second
business day. If you are sending a letter, it is prudent to send it by
certified mail, return receipt requested, to ensure that it is received and also
to evidence the time when it was mailed. Should you make the request orally,
you should ask for written confirmation that your request has been received.
You should rely only on the information contained in this document or
incorporated by reference. We have not authorized anyone to provide you
information that is different. This prospectus shall not constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction in
which it would be unlawful to make such offer or solicitation.
2
<PAGE>
PROSPECTUS SUMMARY
The following summarizes information in other sections of our prospectus.
You should read the entire prospectus carefully.
Belmont
Belmont Bancorp., an Ohio corporation, is a registered bank holding company
headquartered in Bridgeport, Ohio. Our principal business is presently to
operate the Bank, which is a wholly owned subsidiary and our principal asset.
The Bank conducts a general commercial banking business through its 13 banking
offices in eastern Ohio and northern West Virginia. A second subsidiary,
Belmont Financial Network, Inc., invests in low income housing. Our mailing
address is P.O. Box 249, St. Clairsville, Ohio 43950 and our telephone number is
(740) 695-3323.
As of April 30, 2000, we had unaudited consolidated total assets of
approximately $282.2 million, deposits of approximately $227.3 million and
shareholders' equity of approximately $15.9 million.
We provide a wide range of retail banking services to individuals and small
to medium-sized businesses. These services include various deposit products,
business and personal loans, credit cards, residential mortgage loans, home
equity loans, and other consumer oriented financial services including IRA and
Keogh accounts, safe deposit and night depository facilities.
The Offering
Securities Offered.................. 3,000,000 common shares, $0.25 par value
at a subscription price of $2.00 per
share, or $6.0 million in the aggregate.
Shares Outstanding/Authorized....... We had 8,101,403 shares of common stock
issued and outstanding as of May 1, 2000.
If the offering is fully subscribed, we
will have 11,101,403 shares issued and
outstanding. We have 17,800,000 shares
authorized.
The Offering........................ We are offering to our existing
shareholders, depositors and other persons
shares of our common stock. We will offer
shares in the offering for the period from
May 17, 2000 to June 30, 2000, subject to
extension for up to 90 days in our sole
discretion. A minimum subscription of 500
shares is required in this offering.
Use of Proceeds..................... We will use the net proceeds of the
offering to increase the capitalization of
the Bank.
Escrow and Acceptance of
Subscriptions..................... We will deposit all subscription funds
received in a non-interest bearing escrow
account with Firstar Bank, N.A., as
escrow agent. The escrow agent will hold
in the escrow account all subscription
funds until we elect to accept or reject
subscriptions. We anticipate seeking the
release of funds not more often than
weekly.
3
<PAGE>
Selling Agent....................... We will enter into a selling agreement
with Beaconsfield Financial Services, Inc.
under which Beaconsfield has agreed on a
best efforts basis to sell up to 1,500,000
of the shares.
Recent Sales of Securities
On April 14, 2000, we completed a rights and companion ancillary offering
of our common stock in which we sold 2,039,869 shares at $2.00 per share and
received gross offering proceeds of $ 4.1 million. In addition, in order to
evidence their confidence in Belmont, in November 1999, 10 of our 12 directors
purchased $1.65 million of our stock convertible into common stock. These
shares were converted into 825,000 shares of common stock at the conclusion of
the prior offering based upon the $2.00 per share offering price for our common
in the prior offering. These shares are treated as "restricted securities" as
that term is defined in Rule 144 under the Securities Act of 1933.
4
<PAGE>
RISK FACTORS
An investment in the shares involves risks, many of which are beyond our
control and represent contingencies that cannot be reliably estimated. You
should carefully consider the following factors and other information in this
prospectus before deciding to invest in shares of our common stock.
If We Do Not Raise Funds Sufficient to Maintain an Adequate Capital Position, We
Will Need to Take Steps Either to Sell the Bank or Seek Alternative Sources of
Financing
The Bank has entered into a consent order with the Office of the Comptroller
of the Currency which required, among other things, that the Bank achieve by
March 31, 2000, and thereafter maintain, Tier 1 capital at least equal to 6% of
adjusted total assets, which is referred to as a 6% Tier 1 leverage ratio. The
Bank would not be treated as "well capitalized" even if it achieved and
maintained a Tier 1 leverage ratio of 6% unless and until the consent order is
terminated or modified to eliminate this capital requirement. Tier 1 capital
consists principally of shareholders' equity less goodwill and a portion of
deferred tax assets. Belmont has also entered into a written agreement with the
Federal Reserve Bank of Cleveland that requires, among other things, that it
maintain an adequate capital position for the Bank.
The Bank took various steps in seeking to satisfy this requirement,
including:
. In October 1999, the Bank sold $38 million in investment securities and
used $33 million of the proceeds to repay borrowings from the Federal
Home Loan Bank of Cincinnati. Although losses and prepayment penalties
associated with the transactions totaled $1.1 million, the capital
required to support the Bank's assets based on the terms of the consent
order was reduced by approximately $2.0 million.
. In February 2000, we commenced a rights and companion ancillary offering
of $10 million of our common stock. Ultimately, we closed the offering
on April 14, 2000 and accepted subscriptions for 2,039,869 shares at
$2.00 per share and received gross offering proceeds of $ 4.1 million.
. In November 1999, 10 of the Bank's 12 directors purchased $1.65 million
of our convertible stock. These shares were converted into 825,000
shares of common stock at the conclusion of the prior offering based
upon the $2.00 per share offering price for our common in the prior
offering.
However, the Bank did not achieve the required Tier 1 leverage ratio by
March 31, 2000. Therefore, we are not currently in compliance with the consent
order of the Comptroller of the Currency or the agreement with the Federal
Reserve Bank of Cleveland. At April 30, 2000, the Bank's unaudited estimated
Tier 1 leverage ratio was 4.6%. Management believes we will need to receive
approximately $4.0 million in offering proceeds to achieve a Tier 1 leverage
ratio equal to 6%.
On March 30, 2000, the Bank advised the Comptroller of the Currency that it
would not achieve the specified Tier 1 capital level by March 31, 2000 and
submitted a revised capital restoration plan that set forth other means to
achieve the objectives, including by seeking to raise additional capital through
the sale of Belmont's common stock or by selling additional assets or deposits.
On April 14, 2000, the Comptroller of the Currency advised the Bank that it
would require additional detail and support of the actions proposed and,
therefore, could not accept the capital restoration plan as submitted. We have
begun to gather the additional information needed to revise the plan and have
continued a cooperative and on-going dialogue with the Comptroller of the
Currency. If the offering is not successful, we could take the following steps:
5
<PAGE>
. We could seek to sell all or a portion of the Bank's assets or deposits
or enter into a strategic partnership with another financial
institution. If we reduce our assets, we could limit our ability to
generate earnings in future periods to the extent we sell our most
productive assets. If the Bank is sold or a strategic partner or other
person invests in or provides financing to us, any shares you purchase
could have a market value less than the offering price as a result of
the terms of any such transaction.
. At the conclusion of this offering, we could seek additional financing
through other sources. In this instance, we could sell common stock or
securities convertible into common stock at a price per share less than
the price in this offering, and any sales of additional stock would
dilute your interest in Belmont. We could also sell preferred stock or
debt securities, either of which would have rights preferential to those
of our common stock.
We cannot, however, offer any assurance to you that we will be able to
enter into a strategic partnership, obtain additional financing or sell the Bank
or any of its assets on terms favorable to us. If, following this offering, the
Bank is sold or a strategic partner or other person invests in or provides
financing to us, a single investor could obtain control of the Bank and install
a new management team unknown to current shareholders.
Furthermore, since we are not in current compliance with the requirements
of either the Comptroller of the Currency or the Federal Reserve Bank of
Cleveland, they could at any time take various actions or mandate that we take
specified actions, including the following:
. They could continue to monitor our operations as they are currently
doing and allow us more time to improve our capital position.
. They could assume a more active supervisory role and require us to
implement changes in our business model or management.
. They could assume complete control of the management of Belmont and the
Bank and seek to identify a strategic buyer to purchase our assets or
liquidate our assets.
If the Comptroller of the Currency and Federal Reserve Bank of Cleveland
assume complete or significantly greater control of our operations or mandate a
sale of all of our assets, it is likely that such actions could have an adverse
effect on the value of our shares.
If We Continue to Incur Significant Loan Losses, Our Share Value Will Likely
Decline and We Will Need Additional Capital to Meet Capital Requirements
As discussed in our SEC filings and subsequent news releases, we have
recognized significant loan losses and have created significant reserves for
loan losses since the fourth quarter of 1998, principally as a result of a large
commercial borrower ceasing operations in April 1999 and certain irregularities
with regard to consumer loans to customers of that borrower. Belmont has
continued to experience losses in 1999 as it has established additional loan
loss provisions. As of December 31, 1999, we had loan loss reserves of $9.7
million. Based upon our extensive review of our loan portfolio, with the
assistance of outside accountants, we believe that we have appropriately
reserved for loan losses. However, we can offer no assurance that we will not
incur loan losses in the immediate future in excess of the amounts reserved.
If we continue to incur significant loan losses, it is likely that investor
confidence in Belmont will be diminished and that the market price of our shares
will decline. In addition, if these loan losses are significant, we will need
to raise more capital than presently anticipated in order to meet capital
requirements of the Office of the Comptroller of the Currency and the Federal
Reserve Bank of Cleveland. See "Risk Factors--If We Do Not Raise Funds
Sufficient to Maintain an Adequate Capital Position, We Will Need to Take Steps
Either to Sell the Bank or Seek Alternative Sources of Financing."
6
<PAGE>
We have made Significant Loans in Particular Industries, which Heightens our
Risk of Loan Losses
Banks and financial institutions that lend too heavily in a particular
industry are exposed to the risk of substantial loan losses if that industry
should suffer economic hardship. We have lent heavily in particular industries,
principally the amusement industry. The loans and credit facilities we have
made available to the amusement industry totaled $11.7 million, or 8% of our
total loans, at April 30, 2000. William Wallace, formerly the executive vice
president and chief operating officer of the Bank, directed the loans in this
industry due to his belief that this industry was under served by the banking
industry and that higher yields were available on loans made to borrowers in
this industry.
The table set forth below depicts, as of April 30, 2000, the Bank's lending
on an industry-by-industry basis where the loan balance and borrower's available
credit exceed 25% of our Tier 1 capital. Our Tier 1 capital consists
principally of shareholders' equity less goodwill and a portion of deferred tax
assets. As of April 30, 2000, our Tier 1 capital was $12.9 million. Except for
the amusement industry loans, we exceeded this 25% level as a result of the
recent reduction of our capital. We are taking steps to further diversify our
loan portfolio and otherwise lower these percentages by seeking to raise capital
in this offering, but we may not be successful in meeting these objectives. See
"Risk Factors--If We Do Not Raise Funds Sufficient to Maintain an Adequate
Capital Position, We Will Need to Take Steps Either to Sell the Bank or Seek
Alternative Sources of Financing."
<TABLE>
<CAPTION>
Loan Balance and Percent of
Industry Available Credit Tier 1 Capital
<S> <C> <C>
Amusement Industry $11,670,000 90.7%
Commercial Apartments and Rentals 6,205,000 48.2%
Commercial Office Buildings and Rentals 5,412,000 42.1%
Services - Hotel/Motel 4,452,000 34.6%
Commercial Construction Contracting 3,785,000 29.4%
General Building Contracting 3,575,000 27.8%
Miscellaneous Fabricated Metal Products 3,502,000 27.2%
</TABLE>
We Face Intense Competition in Our Market Area Which May Reduce Our Customer
Base
Bank holding companies and their subsidiary banks are subject to vigorous
and intense competition from other banking institutions and from various
financial institutions and other "nonbank" or non-regulated companies or firms
that engage in similar activities. We compete for deposits with other
commercial banks, savings banks, savings and loan associations, insurance
companies and credit unions, as well as issuers of commercial paper and other
securities, including shares in mutual funds. In making loans, we compete with
other commercial banks, savings banks, savings and loan associations, consumer
finance companies, credit unions, insurance companies, leasing companies and
other nonbank lenders. Because of our current need to increase our capital we
may be unable to compete for some loans that we would normally like to make.
We compete not only with financial institutions in Eastern Ohio and
Northern West Virginia but also with a number of large out-of-state and foreign
banks, bank holding companies and other financial and
7
<PAGE>
nonbank institutions. Some of these institutions are engaged in national and
international operations and have more assets and personnel than we do. In
addition, some of our competitors are not subject to the extensive bank
regulatory structure and restrictive policies that apply to us.
The principal factors in successfully competing for deposits are convenient
office locations, flexible hours, competitive interest rates and services, while
those relating to loans are competitive interest rates, the range of lending
services offered and lending fees. We believe that the local character of our
business and our community bank management philosophy enables us to compete
successfully in our market area. We anticipate, however, that competition will
continue to increase in the years ahead.
Additional Sales of Capital Stock in the Future Could Dilute Our Stockholders'
Ownership Interests
Our shares of capital stock eligible for future sale could have a dilutive
effect on the market for our common stock and could adversely affect the market
price. Our charter authorizes the issuance of up to 17,800,000 shares of
common stock and 90,000 shares of preferred stock. As of April 30, 2000, we had
8,101,403 shares of common stock and no shares of preferred stock outstanding.
Assuming all 3,000,000 shares offered in this offering are sold, 6,698,597
shares of common stock will be available for future issuance. In order to
improve our capital position we may have to attract new investors in the future
by the sale of stock at a lower price than the current offering price.
Our Charter Contains Anti-takeover Provisions Which Could Discourage
Acquisitions and Adversely Affect the Price of Our Stock
Our Articles of Incorporation contain provisions which may have the effect
of discouraging or impeding a tender offer, proxy contest or similar
transactions involving control of Belmont, including transactions in which our
stockholders might otherwise receive a premium for their shares above then-
current market prices or other transactions they may deem to be in their best
interest.
Ohio Statutory Law Contains Provisions which Could Discourage Acquisitions and
Adversely Affect the Price of our Stock
Certain provisions of the Ohio Revised Code which are applicable to us may
have the effect of discouraging or impeding a tender offer, proxy contest or
similar transactions involving control of Belmont, including transactions in
which our stockholders might otherwise receive a premium for their shares above
then-current market prices or other transactions they may deem to be in their
best interest. These provisions include permitting a company's board to
consider the interests of employees, suppliers, creditors and customers, general
community and societal factors and the long-term and short-term interests of the
company and its shareholders in deciding whether to accept or reject an offer to
purchase the company. Consequently, if we were to receive an offer to purchase
Belmont, our board could base its decision on whether to accept or reject the
offer based on factors other than maximizing shareholder value.
WHERE YOU CAN FIND MORE INFORMATION
Belmont Bancorp. files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any document that we file at the SEC public reference room
facility located at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
SEC's regional offices at 7 World Trade Center, 13th Floor, Suite 1300, New
York, New York 10048, and Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference room. The SEC maintains an Internet site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers, including Belmont Bancorp., that file
documents with the SEC electronically through the SEC's electronic data
gathering, analysis and retrieval system known as EDGAR. Our common stock is
traded on the Nasdaq SmallCap Market under the symbol "BLMT." Our reports,
proxy and information statements may also be reviewed at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
8
<PAGE>
This prospectus is part of a registration statement filed by us with the
SEC. Because the rules and regulations of the SEC allow us to omit certain
portions of the registration statement from this prospectus, this prospectus
does not contain all the information contained in the registration statement.
You may review the registration statement and the exhibits filed with the
registration statement for further information regarding us and the securities
being sold by this prospectus. The registration statement and its exhibits may
be inspected at the public reference facilities of the SEC at the addresses
mentioned above.
INCORPORATION OF INFORMATION THAT WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" information we have filed
with the SEC. This means:
. incorporated documents are considered part of this prospectus;
. we can disclose important information to you by referring you to those
documents.
The SEC allows us to "incorporate by reference" information we have filed
with the SEC. We are incorporating by reference (1) our annual report on Form
10-K for the year ended December 31, 1999 filed with the SEC on April 14, 2000
under SEC file number 0-12724, and (2) our quarterly report on Form 10-Q for
the quarter ended March 31, 2000 filed with the SEC on May 15, 2000 under SEC
file number 0-12724. Copies of these annual and quarterly reports are being
delivered to you with this prospectus.
You may request a copy of any exhibits which are specifically incorporated
by reference in this filing, at no cost, by contacting us orally or in writing
at the following address:
Jane R. Marsh
Corporate Secretary
Belmont Bancorp.
154 W. Main Street, P.O. Box 249
St. Clairsville, OH 43950
(740) 695-3323
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus or any supplement is accurate as of any
date other than the date on the front of those documents because our financial
condition and results may have changed since that date.
FORWARD-LOOKING STATEMENTS
We have made statements in this prospectus and in the documents
incorporated herein that are forward-looking statements. You can identify these
statements by forward-looking words such as "may," "will," "intend," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. Forward-
looking statements may also use different phrases. Forward-looking statements
address, among other things, (1) our expectations; (2) projections of our future
results of operations or of our financial condition; or (3) other "forward
looking" information.
We believe it is important to communicate our expectations to our
investors. However, events may occur that we are not able to predict accurately
or which we do not fully control that could cause actual results to differ
materially from those expressed or implied by our forward-looking statements,
including:
. our inability to raise or maintain adequate levels of capital, as
required by the Office of the Comptroller of the Currency and the
Federal Reserve Bank of Cleveland.
9
<PAGE>
. our need to further reduce our total assets through the sale of assets
and the repayment of funding sources, which could impair our ability to
generate earnings in future periods.
. our need to recognize loan losses or create additional loan loss
reserves due to additional problem loans.
. unforeseen adverse conditions in our borrowers' businesses or financial
condition.
. changes in general economic and business conditions and in the banking
industry in particular.
. changes in banking regulations.
. other factors discussed under "Risk Factors."
USE OF PROCEEDS
We intend to use the net proceeds of the offering to increase the Bank's
capitalization. If we sell all 3,000,000 shares offered, our estimated net
proceeds will be $5,375,000 after deducting the selling commissions payable to
Beaconsfield on 1,500,000 shares and our estimated offering expenses. If we
sell only 1,500,000 of the shares offered, our estimated net proceeds will be
$2,375,000 after deducting the selling commissions payable to Beaconsfield on
1,500,000 shares and our estimated offering expenses. Since the offering is
being conducted on a best efforts basis, we do not know how many shares will be
sold by Beaconsfield or by us directly. Although not presently anticipated, we
may enter into agreements with Beaconsfield to sell more than 1,500,000 shares
or with other selling agents to sell additional shares. In either case, we may
pay commissions at rates permitted by the National Association of Securities
Dealers, Inc., which would reduce the net proceeds of the offering available for
our use.
DETERMINATION OF OFFERING PRICE
We considered several factors in setting the per share offering price of
the shares. Our shares are traded on the Nasdaq SmallCap market. In
determining the per share offering price, we took into account the $2.00 per
share price of our shares in our recent rights and ancillary offerings, which
were closed on April 14, 2000, and the prices at which recent trades have taken
place in our shares. We also took into account our need to raise capital in
order to satisfy the requirements of the Office of the Comptroller of the
Currency and the Federal Reserve Bank of Cleveland. Additionally, we considered
our perception as to the current demand for our stock and the stock price
relative to our current book value. The closing price of our shares on May 15,
2000 was $2.00 per share.
DILUTION
We estimate that our book value to be $1.96 per share of common stock at
April 30, 2000. We are offering our shares at a price of $2.00 per share, which
is above our estimated book value. Consequently, purchaser of shares in the
offering will pay a premium of $0.04 per share or 2.0% over book value.
10
<PAGE>
PLAN OF DISTRIBUTION
The Offering
We are offering to our existing shareholders, depositors and other persons
shares of our common stock. We will allow all existing shareholders to
participate in the offering except for shareholders who reside in states in
which we cannot register the shares for sale or obtain an exemption from
registration without unreasonable burden or expense. Generally, it is our
intention to accept subscriptions for shares in the offering in the order
received. Each subscriber must purchase a minimum of 500 shares in the
offering.
Dates of Offering
The offering will begin on May 17, 2000 and continue until June 30, 2000,
subject to our right to extend the offering for up to 90 additional days.
Best Efforts Offering
We will offer the shares on a best efforts basis. We intend to offer and
sell shares directly and through Beaconsfield Financial Services, Inc., as our
selling agent. See "--Selling Agent," below. In the case of sales made
directly by us, none of our directors, officers or employees who assist us in
this process will receive any additional compensation for their efforts. We
expect to promote the offering through word of mouth to our shareholders,
depositors and others with whom we do business or have relationships. Although
we have no present plans to do so, we may also enter into agreements with
selling agents to offer and sell our shares. If we do engage selling agents, we
expect to pay selling commissions to them at prevailing rates.
Selling Agent
We will enter into a selling agreement with Beaconsfield Financial Services,
Inc., a registered broker-dealer, to serve as our selling agent. Beaconsfield
will seek to sell, on a best efforts basis, up to 1,500,000 of our shares in the
offering. We have agreed to pay Beaconsfield a selling commission equal to 15%
of the shares sold through its efforts. We have also agreed to indemnify it
against certain liabilities under the Securities Act of 1933.
Although not presently anticipated, we may enter into agreements with
Beaconsfield to sell more than 1,500,000 shares or with other selling agents to
sell additional shares. In either case, we may pay commissions at rates
permitted by the National Association of Securities Dealers, Inc.
Delivery of Share Certificates
As soon as practicable following our acceptance of your subscription, we
will mail you a certificate evidencing the shares you have purchased.
How to Subscribe
You may subscribe to purchase shares by completing and signing the
subscription agreement which accompanies this prospectus and mailing or
delivering it to the escrow agent or, if you have subscribed for shares through
the selling agent, as the selling agent directs, together with payment in full
for all shares subscribed for. To be accepted, your subscription must be
forwarded to the escrow agent or the selling agent before the expiration of the
offering. You must pay the full subscription price when you return the
subscription agreement. In the event that payment is less than that required to
purchase the number of shares subscribed for, we will issue only the number of
shares for which payment is received.
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If you purchase shares through the selling agent, you should make your
check payable and return your subscription agreement to the selling agent, if
the selling agent so directs. Unless otherwise directed by the selling agent,
subscription agreements should be mailed, and checks made payable, to:
Firstar Bank, N.A., escrow agent
425 Walnut Street
ML CN-WN-06CT
Cincinnati, Ohio 45202
Attention: Brian George
If you have any questions about this offering, please call (740) 699-4699
and leave a detailed message. Our representative will return your call within
one business day.
Escrow of Funds and Acceptance of Subscriptions
All subscription funds received in the offering will be deposited in a non-
interest bearing escrow account with Firstar Bank, N.A., as escrow agent. These
funds will be held in the escrow account until released to us upon our
acceptance of subscriptions, which is expected to occur not more often than
weekly. We may elect to accept or reject any or all of the subscriptions in the
offering for any reason. If we decline to accept any subscriptions, the escrow
agent will promptly return the escrowed funds directly to the subscribers.
DESCRIPTION OF CAPITAL STOCK
General
We are authorized to issue 17,800,000 shares of common stock and 90,000
shares of preferred stock. As of April 30, 2000, we had 8,101,403 shares of
common stock and no shares of preferred stock outstanding.
Common Stock
Holders of common stock are entitled to one vote for each share held of
record on all matters on which stockholders may vote. Holders of common stock
are entitled to receive, as, when and if declared by the board of directors from
time to time, such dividends and other distributions in cash, stock or property
from our assets or funds legally available for such purposes subject to any
dividend or liquidation preferences that may be attributable to any preferred
stock outstanding from time to time.
Preferred Stock
Our board of directors, without further action by the stockholders, is
authorized to issue an aggregate of 90,000 shares of preferred stock. We have
no plans to issue any other series of preferred stock. Our board of directors
may issue preferred stock with dividend rates, redemption prices, preferences on
liquidation or dissolution, conversion rights, voting rights and any other
preferences, which rights and preferences could adversely affect the voting
power of the holders of common stock. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions or
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire, or could discourage or delay a third party from
acquiring, control.
Classification of Board of Directors
Our board of directors has been classified by dividing the directors into
three classes. One class of directors is elected each year for a term of three
years, so that the term of office of one class of directors expires each year.
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Cumulative Voting
Our shareholders have cumulative voting rights pursuant to Ohio law. We
may, as permitted by Section 1701.69 of the Ohio Revised Code, propose to
shareholders that our charter be amended to delete the right to vote
cumulatively in the election of directors. If we propose such an amendment to
shareholders, all shareholders would be entitled to notice of the proposed
amendment as provided by law and such an amendment would be subject to other
requirements as to the number of shares which could be voted against the
proposed amendment. The adoption of such amendment would require the
affirmative vote of the holders of a majority of the stock entitled to vote in
the election of directors.
A shareholder voting cumulatively may cast the number of shares he owns
times the number of directors to be elected in favor of one nominee or allocate
such votes among the nominees as he determines.
Transfer Agent and Registrar
The transfer agent and registrar for our shares is Registrar and Transfer
Company, 10 Commerce Drive, Cranford, New Jersey 07016.
Liquidation Rights
In the event of liquidation, holders of our capital stock are entitled to
certain rights as to assets distributable to shareholders on a pro rata basis,
after satisfaction of our debts.
No Preemptive Rights
Holders of our capital stock have no preemptive right to subscribe for or
to purchase any additional securities which may be issued by us. Preemptive
rights permit a shareholder to subscribe to a sufficient number of shares so as
to maintain their relative pro rata ownership upon the issuance of additional
shares by a corporation, except in certain circumstances.
Dissenters' Rights
Our shareholders have dissenters' rights in connection with certain mergers
and consolidations pursuant to Ohio law.
Right of Redemption
We are specifically empowered by our charter to buy our shares of
outstanding capital stock from our shareholders.
Dividend Rights
Dividends may be paid on our capital stock as declared by our board of
directors out of funds legally available therefor. Dividends may not exceed our
surplus, as defined by the Ohio Business Corporation Act, and may not be
declared if we are insolvent or would thereby be made insolvent. The consent
order entered into with the Office of the Comptroller of the Currency currently
prohibits our payment of dividends.
Assessability
When issued, our capital stock is fully paid and nonassessable.
Antitakeover Provisions
Some Important Charter Provisions
1. Our charter provides for a classified board of directors as described
above.
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2. Our charter requires the approval of the holders at least 75% of our
voting stock to approve the merger or consolidation with or the sale of the
assets or business to, any other corporation unless the transaction receives the
prior approval of 60% of our board of directors.
3. Our charter provides that if an acquiring person becomes the owner of
more than 50% of our voting stock as a result of a tender offer, we shall be
obligated to offer to purchase the remaining shareholders' shares at the highest
price paid by the acquiring person.
These provisions may have the effect of deterring hostile takeovers or
delaying changes in our management. The availability of the authorized and
unissued shares of Belmont to be issued into friendly hands with the purpose of
diluting a potential acquiror's ownership of Belmont may also be determined to
have an antitakeover effect. Our charter and code of regulations currently
contain no other provisions that were intended to be or could fairly be
considered as antitakeover in nature or effect. Our board of directors has no
present intention to amend the charter to add any antitakeover provision.
Some Important Ohio Statutory Provisions
We are subject to certain provisions of Ohio law that may discourage or
render more difficult an unsolicited takeover:
Chapter 1704 of the Ohio Revised Code prohibits certain mergers, sales of
assets, issuances or purchases of securities, liquidation or dissolution, or
reclassifications of the then-outstanding shares of an Ohio corporation
involving, or for the benefit of, certain beneficial holders of stock
representing 10% or more of the voting power of the corporation (a "10%
shareholder"), unless:
. the transaction is approved by the directors prior to the time that the
10% shareholder became a 10% shareholder (a "shareholder acquisition
date");
. the acquisition of 10% of the voting power is approved by the directors
prior to the shareholder acquisition date; or
. the transaction involves a 10% shareholder that has been such for at
least three years and the transaction is either approved by holders of
two-thirds of the voting power of the corporation and the holders of a
majority of the voting power not owned by 10% shareholders, or certain
minimum price and form of consideration requirements are met.
The Control Share Act provides that the acquisition of shares entitling the
holder to exercise voting power in certain ranges (one-fifth or more, one-third
or more, or a majority) can be made only with the prior authorization of:
. the holders of at least a majority of the total voting power; and
. the holders of at least a majority of the total voting power held by
shareholders other than the proposed acquirer, officers of the
corporation elected or appointed by the directors, and directors of the
corporation who are also employees and excluding certain shares that are
transferred after the announcement of the proposed acquisition and prior
to the vote with respect to the proposed acquisition. The Control Share
Act does not specify a remedy for violation of the Act. However, in at
least one situation, a court has set aside an acquisition made in
violation of the Control Share Act.
The Profit Disgorgement Act provides Ohio corporations, or in certain
circumstances the shareholders of an Ohio corporation, a cause of action to
recover profits realized under certain circumstances by persons who dispose of
securities of a corporation within 18 months of proposing to acquire such
corporation.
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A provision of the Ohio General Corporation Law provides that in addition
to the interests of the shareholders, our directors may consider:
1. the interests of the corporation's employees, suppliers, creditors and
customers;
2. the economy of the state and nation;
3. community and societal considerations; and
4. the long-term as well as short-term interests of the corporation and
its shareholders, including the possibility that these interests may
be best served by the continued independence of the corporation.
Reports
Our common stock is registered under Section 12(g) of the Securities and
Exchange Act of 1934, and we file periodic reports with the SEC as required by
the Act. After the offering, we will continue to file periodic reports with the
SEC.
LEGAL OPINION
The validity of the shares offered hereby will be passed upon for us by
Doepken Keevican & Weiss Professional Corporation, Pittsburgh, Pennsylvania.
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Annex A
SUBSCRIPTION AGREEMENT
Firstar Bank, N.A.
425 Walnut Street
ML CN-WN-06CT
Cincinnati, Ohio 45202
Attention: Brian George
Ladies and Gentlemen:
The undersigned hereby subscribes for and agrees to purchase the number of
shares of common stock, par value $0.25 (the "Shares"), of Belmont Bancorp., an
Ohio corporation ("Belmont"), indicated below. The undersigned has executed and
delivered this Subscription Agreement in connection with Belmont's offering of
Shares described in the Prospectus dated May 17, 2000, as may be supplemented
from time to time ("Supplements"), which Prospectus and Supplements, if any,
accompany this Subscription Agreement.
The undersigned agrees to purchase the Shares subscribed for herein for the
purchase price of $2.00 per share and has delivered to our escrow agent, Firstar
Bank, N.A., with this Subscription Agreement a check made payable to "Firstar
Bank, N.A., escrow agent" or, if the undersigned has subscribed for shares
through any authorized selling agent, a check made payable as the selling agent
directs.
The undersigned acknowledges receipt of a copy of (1) our Prospectus, as
supplemented by the Supplements, and (2) our Annual Report on Form 10-K for the
year ended December 31, 1999, and (3) our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2000.
The undersigned acknowledges that we may accept or decline the
undersigned's subscription for any reason whatsoever. Generally, it is our
intention to accept subscriptions for shares in the Offering on a weekly basis.
<TABLE>
<S> <C>
_______________________________________
______________ Shares ($_______________) Please print name(s) of subscriber(s)
subscribed for (minimum of 500 Shares and
total subscription price at $2.00 per _______________________________________
Share) Signature of subscriber
_______________________________________
______________________________________ Signature of co-subscriber
How Shares are to be held if this is a co-
investment, e.g., as joint tenants (with _______________________________________
right of survivorship) or
tenants-in-common ______________________________________
Address
______________________________________
_______________________________________ Date
Social Security or Tax I.D. number(s)
</TABLE>
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