SECOND BANCORP INC, DEF 14A, 1998-03-31

SECOND BANCORP INC
DEF 14A, 1998-03-31
NATIONAL COMMERCIAL BANKS

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<PAGE> 1

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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>

SECOND BANCORP, INCORPORATED
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies: .......

(2) Aggregate number of securities to which transaction applies: ..........

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............

(4) Proposed maximum aggregate value of transaction: ......................

(5) Total fee paid: .......................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ...............................................

(2) Form, Schedule or Registration Statement No.: .........................

(3) Filing Party: .........................................................

(4) Date Filed: ...........................................................

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<PAGE> 2

SECOND BANCORP INC. LOGO

108 Main Avenue, S.W. - Warren, Ohio 44481

April 1, 1998

NOTICE OF ANNUAL SHAREHOLDERS MEETING

TO THE SHAREHOLDERS OF SECOND BANCORP, INCORPORATED:

Notice is hereby given that the Annual Meeting of Shareholders of Second
Bancorp, Incorporated, will be held in the Directors Room of The Second National
Bank of Warren, 108 Main Avenue, S.W., Warren, Ohio, on Tuesday, May 12, 1998,
at 1:30 P.M. for the following purposes:

1. To fix the number of directors at seven (7).

2. To elect four (4) directors of the Corporation to serve until the 2000
Annual Meeting of Shareholders or until resignation or removal.

3. To approve the Corporation's 1998 Non-Qualified Stock Option Plan.

4. To ratify the appointment of Ernst & Young LLP as the independent
Certified Public Accountants of Second Bancorp, Incorporated.

5. To transact such other business as may come before the meeting or any
adjournment thereof.

March 13, 1998 has been fixed by the Board of Directors as the record date.
Only those shareholders of record as of the close of business on that date are
entitled to notice of and to vote at the meeting.

WHETHER OR NOT YOU CONTEMPLATE ATTENDING THE ANNUAL SHAREHOLDERS MEETING,
THE BOARD OF DIRECTORS URGES YOU TO SIGN AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE AS PROMPTLY AS POSSIBLE.

YOU MAY REVOKE THE PROXY AT ANY TIME PRIOR TO ITS EXERCISE BY NOTICE IN
WRITING DELIVERED TO THE SECRETARY OF SECOND BANCORP OR BY EXECUTION OF A LATER
DATED PROXY. IF YOU ATTEND THE MEETING, YOU MAY CHOOSE TO WITHDRAW YOUR PROXY
AND VOTE IN PERSON AT THE MEETING.

A proxy statement is submitted herewith.

Christopher Stanitz
Secretary of Second Bancorp, Incorporated
<PAGE> 3

SECOND BANCORP INC. LOGO

108 Main Avenue, S.W. - Warren, Ohio 44481

April 1, 1998

PROXY STATEMENT

The Annual Meeting of Shareholders (the "Annual Meeting") of Second
Bancorp, Incorporated ("Second Bancorp", the "Company", or the "Corporation"),
will be held Tuesday, May 12, 1998, at 1:30 P.M. in the Board of Directors Room
at the Main Office of The Second National Bank of Warren ("Second National" or
the "Bank"), 108 Main Avenue, S.W., Warren, Ohio. This Proxy Statement is being
mailed on or about April 1, 1998.

Only those shareholders of record at the close of business March 13, 1998,
will be entitled to vote.

The solicitation of proxies will be made by mail except for any incidental
solicitation by officers and representatives of Second Bancorp by personal
interviews or by telephone. Second Bancorp will bear the cost of the
solicitation of proxies, and it may reimburse brokers and others for their
expenses in forwarding solicitation material to beneficial owners of Second
Bancorp.

COMMON STOCK OUTSTANDING

As of the record date for the Annual Meeting there were 6,881,089 shares of
common stock outstanding, of which 6,790,211.434 shares are entitled to vote.
The remaining 90,877.566 shares are held by The Second National Bank of Warren,
the wholly owned subsidiary of Second Bancorp, in certain fiduciary capacities
and cannot be voted.

The general corporation law of Ohio provides that if notice in writing is
given by a shareholder to the president, a vice president, or secretary of the
Corporation, not less than 48 hours before the time fixed for holding the
meeting, that the shareholder desires the voting at such election to be
cumulative, and an announcement of such notice is made upon the convening of the
meeting by the chairman of the meeting, or by or on behalf of the shareholder
giving such notice, then each shareholder shall have cumulative voting rights in
the election of directors. Proxies solicited by the Board of Directors will be
voted cumulatively, if necessary. For all other purposes, each share is entitled
to one vote.
<PAGE> 4

SECURITY OWNERSHIP

As of the record date, the table below identifies the persons or "groups",
as the term is used in Section 13(d)(3) of the Securities and Exchange Act of
1934, who own of record or beneficially more than five percent of any class of
Second Bancorp voting securities and the number of shares thereof owned directly
or beneficially by all Second Bancorp directors and officers as a group as of
the record date (unless otherwise indicated).

<TABLE>
<CAPTION>
NAME OF RECORD AMOUNT AND NATURE PERCENT
TITLE OF CLASS OR BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
-------------- ------------------- ----------------------- --------
<S> <C> <C> <C>
Common Stock Market Main & Co. (Nominee for 516,175 shares(1) 7.501%
Subsidiary Second National Bank's
Trust Department)

Common Stock Second Bancorp's officers and 355,843.972 shares(3) 5.171%
directors as a group(2)
</TABLE>

Under Securities laws of the United States, Second Bancorp's directors, its
executive (and certain other) officers, and any persons holding more than ten
percent of any class of Second Bancorp security are required to report their
ownership of Second Bancorp securities and any changes in that ownership to the
Securities and Exchange Commission and to Nasdaq on a timely basis. Second
Bancorp is required to report in this Proxy Statement any failure to make the
necessary filing as and when due. In making the following statement, Second
Bancorp has relied on the written representations of its incumbent directors and
officers and copies of reports known by the Company to have been filed with the
SEC. During 1997, all of the required filings were made on a timely basis.

- ---------------

(1) Shares held of record as of December 31, 1997 (as indicated on an SEC
Schedule 13G, a copy of which was delivered to the Company) in fiduciary
capacity for various trust customers of subsidiary The Second National Bank
of Warren. None of the beneficial owners through Second National's trust
department owns or controls five percent or more of the voting securities of
the Company.

(2) The officer and director group is comprised of 16 individuals.

(3) Officer shareholdings include outstanding stock options exercisable as of
the record date. Figure includes all directly owned shares and all shares
deemed beneficially owned by individuals in the officers and director group,
whether or not disclaimed by the officer or director in question.
2
<PAGE> 5

ELECTION OF DIRECTORS

Pursuant to the Articles of Incorporation of Second Bancorp, the Board of
Directors is divided into two classes, each consisting of approximately one-half
of the entire board. The directors serve staggered two year terms, so that
directors of only one class are elected at each Annual Meeting. At the
forthcoming Annual Meeting, the shareholders will be asked to fix the maximum
number of directors at 7 and to elect 4 directors in Class II. Each director
elected at the Annual Meeting will hold office until the 2000 Annual Meeting of
Shareholders or, if earlier, until resignation or removal. Except as otherwise
specified in the proxy, the shares represented by all properly executed and
returned proxies will be voted for the election of the 4 nominees named below as
directors of Second Bancorp. If, though currently unanticipated, a nominee
should become unavailable to serve, proxies will be voted for the election of
such person, if any, as shall be recommended by the Board of Directors.

The names of the nominees for director of Second Bancorp, together with
specific information about the nominees, are as follows.

Alan G. Brant 66 Chairman and President, Second Bancorp 99,156.35(2,3,4) 1987
and President, Director, and Chief (1.447%)
Executive Officer, Second National
Bank.
John A. Anderson 60 Chairman and Chief Executive Officer; 16,646.534 1987
The Taylor-Winfield Corporation,
Ravenna Manufacturing Company and
Hubparts, Inc.
John C. Gibson 70 Chairman of the Board, Jack Gibson 24,051.367(5,6) 1987
Construction Company, Director,
Sovereign Circuits, Inc.
Robert J. Webster 75 Retired. Past President and Chief 43,490(7) 1987
Executive Officer of Denman
Corporation, manufacturer of automobile
tires and rubber rolls.
</TABLE>

- ---------------
(1) Unless otherwise stated, each nominee or director's percentage ownership of
Second Bancorp stock is less than 1%.
(2) Includes 15,706 shares of stock held by Mr. Brant's wife, the beneficial
ownership of which he has disclaimed.
(3) Includes 19,778.35 shares of stock held for Mr. Brant's benefit by the
Bank's Savings Plan. Mr. Brant is 100% vested in these shares.
(4) Includes 20,700 shares of stock representing a like number of currently
exercisable options owned by Mr. Brant.
(5) Includes 1,801.538 shares of common stock owned by, or for the benefit of,
Mr. Gibson's wife, the beneficial ownership of which he has disclaimed.
(6) Includes 4,427.366 shares which are owned by the Jack Gibson Construction
Company which company is controlled by Mr. Gibson.
(7) Includes 10,232 shares of stock owned by Mr. Webster's wife, the beneficial
ownership of which he has disclaimed.
3
<PAGE> 6

The names of the three remaining Second Bancorp directors, together with
specific information about the directors, are as follows.

<TABLE>
<CAPTION>
NUMBER AND PERCENTAGE
PRINCIPAL OCCUPATION OF COMMON SHARES OWNED
DURING THE PAST FIVE BENEFICIALLY AS OF DIRECTOR
NOMINEES AGE YEARS AND DIRECTORSHIPS MARCH 13, 1998 (1) SINCE
-------- --- ----------------------- ---------------------- --------
<S> <C> <C> <C> <C>
Class I Term Expires in 1999
Norman C. Harbert 64 Chairman, President, and Chief
Executive Officer of the HAWK
Corporation, owner of several
manufacturing firms. Mr. Harbert is
also a director of Caliber Systems,
Inc. and New West Eyeworks. 11,544.868(2) 1987
John L. Pogue 53 Partner, Harrington, Hoppe &
Mitchell, LTD (attorneys). 1,645.13(3) 1987
Raymond John Wean, III 49 President and Chief Executive
Officer of Barto Technical Services,
Inc. Prior to January 1995,
President of Danieli Wean, Inc., and
President and Chief Executive
Officer of Wean, Incorporated,
formerly, Wean United, Inc.,
designer and manufacturer of
industrial machinery. 8,666(4) 1987
</TABLE>

During 1997 there were 9 meetings of the Board of Directors. Each incumbent
director and director nominee was present for more than 75 percent of the number
of meetings of the Board of Directors. The members of Second National's
Examining (Audit) Committee are Mr. Robert C. Lewis, Jr., a director of Second
National Bank and Second Bancorp directors Gibson, Harbert, and Wean, III. The
functions of the Examining Committee are to meet with Second National's auditors
to review and inquire as to audit functions and other financial matters and to
review the year-end audited financial statements of Second Bancorp and its
subsidiary and reports of the national bank examiners as related to Second
National. The Examining Committee held 6 meetings in 1997. Second Bancorp's
board of directors has no Nominating Committee.

- ---------------
(1) Unless otherwise stated, each nominee or director's percentage ownership of
the Company's stock is less than 1%.
(2) Includes 4,043.571 shares of stock held by the trustee of Mr. Harbert's
defined benefit plan and 2,236.862 shares of stock held in a personal trust
for his benefit.
(3) Includes 446 shares of common held in a SEP IRA account for Mr. Pogue's
benefit.
(4) Includes 990 shares owned by Mr. Wean's wife and 1,980 shares owned by his
minor children, the beneficial ownership of which he has disclaimed.
4
<PAGE> 7

EXECUTIVE COMPENSATION

Under proxy rules and regulations promulgated by the Securities and
Exchange Commission, publicly held corporations are required to disclose to
their shareholders certain information concerning, or deemed relevant to,
compensation paid to its Named Officers (as defined in the next sentence) and to
present that information in tabular and graphic form. The first table contains a
summary of annual and long-term compensation for services in all capacities to
Second Bancorp and its subsidiary for calendar years 1997, 1996, and 1995, of
those persons who were, at December 31, 1997, (i) the chief executive officer
and (ii) the four other most highly compensated executive officers of Second
Bancorp and its subsidiary (the "Named Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-----------------
ANNUAL COMPENSATION SECURITIES
------------------------- UNDERLYING OPTION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(2) COMPENSATION(3)
--------------------------- ---- -------- ------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Alan G. Brant, 1997 $250,000 $80,000 7,500 $9,193
Chairman and President of Second
Bancorp, Inc., and Chief Executive 1996 $238,000 $82,000 7,500 $9,168
Officer, Director, and President
of The Second National Bank of 1995 $230,000 $86,000 7,500 $8,973
Warren(1)
William Hanshaw, 1997 $110,500 $34,000 6,500 $4,029
Executive Officer of Second
Bancorp, Inc. and Senior Vice 1996 $105,500 $35,000 6,400 $4,078
President of The Second National
Bank of Warren 1995 $101,000 $30,000 6,000 $3,978
David L. Kellerman, 1997 $ 97,667 $36,000 7,000 $1,489
Treasurer of Second Bancorp, Inc.,
and Senior Vice President and 1996 $90,375 $36,000 7,000 $5,226
Chief Financial Officer of The
Second National Bank of Warren 1995 $82,667 $34,000 6,600 $4,843
Diane C. Bastic, 1997 $ 99,917 $29,000 6,500 $6,288
Executive Officer of Second
Bancorp, Inc., and Senior Vice 1996 $94,917 $28,000 6,400 $6,157
President of The Second National
Bank of Warren 1995 $90,333 $26,000 6,000 $5,837
Christopher Stanitz, 1997 $101,458 $21,000 7,000 $2,721
Senior Vice President and
Secretary of Second Bancorp, Inc., 1996 $95,750 $20,000 6,400 $5,860
and Vice President of The Second
National Bank of Warren 1995 $91,167 $18,000 6,000 $5,540
</TABLE>

- ---------------
(1) Mr. Brant also received fees in the amount of $7,700 for 1997, $7,700 for
1996, and $8,400 for 1995 in compensation for his services as a director of
Second Bancorp.
(2) Option awards for 1995 and 1996 have been adjusted to take into account the
May 1, 1997, 2-for-1 common stock split.
(3) Amounts reported for 1997 represent the sum of the Company's contributions
on behalf of each of the Named Officers under the Company's employee savings
plan ($7,125, $3,570, $1,002, $5,801 and $2,070 respectively for Officers
Brant, Hanshaw, Kellerman, Bastic and Stanitz) and executive long term
disability plan ($2,068, $459, $487, $626, and $651 respectively for
Officers Brant, Hanshaw, Kellerman, Bastic and Stanitz).
5
<PAGE> 8

OPTION GRANTS DURING 1997

The second table contains information on stock options granted during 1997
to the Named Officers and their potential realizable value.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE OR EXPIRATION ---------------------------
NAME GRANTED(1) FISCAL YEAR BASE PRICE(2) DATE(3) 5% 10%
---- ---------- ------------ ------------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
A. G. Brant 7,500 12.1% $22.125 7/08/07 $ 104,355 $ 264,465
W. Hanshaw 6,500 10.5% $22.125 7/08/07 $ 90,441 $ 229,203
D. L.
Kellerman 7,000 11.3% $22.125 7/08/07 $ 97,398 $ 246,834
D. C. Bastic 6,500 10.5% $22.125 7/08/07 $ 90,441 $ 229,203
C. Stanitz 7,000 11.3% $22.125 7/08/07 $ 97,398 $ 246,834
ALL COMMON
SHAREHOLDERS NA NA NA NA $95,743,472 $242,640,960
</TABLE>

- --------------------------------------------------------------------------------

(1) The reported stock options were granted in two groups to the Named Officers
on July 9, 1997. The initial 4,500 options first become exercisable on July
9, 1998 and the balance on January 5, 1999.
(2) The base price of each awarded option is equal to the mean of the bid and
ask price of the Corporation's common stock on the date the option was
granted.
(3) Notwithstanding the stated expiration date, all stock options held by an
individual terminate if that person ceases to be an employee for any reason
other than death or retirement. In the event retirement or death, options
must be exercised by the recipient or, as the case may be, by the
recipient's estate by the earlier of the expiration date of the option or
the third anniversary date of the event.

AGGREGATED OPTION/SAR EXERCISES IN 1997 AND YEAR-END OPTION/SAR VALUES

The third table contains information on the value realized by the Named
Officers during 1997 on their exercise of stock appreciation rights (SARs) and
stock options and the number and value of unexercised stock options and SARs at
year-end 1996.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AND SARS AT AND SARS AT YEAR-END
SHARES YEAR-END 1997(1) 1997(2)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan G. Brant(4) 2,250 $31,687 42,300(5) 7,500 $705,983 $24,375
William Hanshaw(6) 2,500 $24,843 7,400 6,500 $ 91,209 $21,125
David L. Kellerman(7) 3,300 $40,838 7,000 7,000 $ 83,559 $22,750
Diane C. Bastic(8) 2,250 $26,343 18,400 6,500 $254,021 $21,125
Christopher Stanitz 0 0 22,900 7,000 $326,773 $22,750
</TABLE>

- --------------------------------------------------------------------------------

(1) Where appropriate, the number of options and SARs have been adjusted for
stock dividends and stock splits. All numbers represent options unless
otherwise indicated.
(2) For all SARs exercised, the number of underlying securities with respect to
which the SARs were exercised.
(3) Market value of underlying securities at exercise or year-end, minus the
exercise or base price.
(4) 2,250 share stock option with a base price of $18.417 per share exercised
March 10, 1997, on which date the price of the Company's common stock was
$32.50 per share ($31,687 value realized).
(5) Includes options to purchase 22,500 shares of stock at various prices and
19,800 SARs with a base price of $5.4545.
(6) 2,500 share stock option with a base price of $10.563 per share exercised
May 13, 1997, on which date the price of the Company's common stock was
$20.50 per share ($24,843 value realized).
(7) 3,300 share stock option with a base price of $21.125 per share exercised
February 7, 1997, on which date the price of the Company's common stock was
$33.50 per share ($40,838 value realized).
(8) 2,250 share stock option with a base price of $18.417 per share exercised
January 8, 1997, on which date the price of the Company's common stock was
$30.125 per share ($26,343 value realized).

6
<PAGE> 9

REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION

The Compensation and Organization Committee of the Board of Directors (the
"Committee") is a joint committee of Second Bancorp, Inc., and its subsidiary,
The Second National Bank of Warren (together, the "Company"), and is composed of
outside directors John A. Anderson (Committee chairman), Cloyd J. Abruzzo, and
Robert J. Webster. The Committee reviews and approves all officer compensation
levels with a view toward attracting and retaining qualified, competent
executives to lead the Company in its achievement of its business objectives and
to enhance long-term shareholder value.

EXECUTIVE OFFICER COMPENSATION

The Company's executive officer compensation program comprises base
salaries, discretionary cash incentive bonuses, and long-term incentives in the
form of stock option grants and, previously, stock appreciation rights ("SARs").

Base Salary. Each executive officer's salary level is reviewed annually
based upon performance of functional responsibilities, contribution to corporate
strategic goals, experience, and demonstrated capabilities. Measurements of
performance may be quantitative and/or qualitative depending upon the context of
the job under evaluation.

Discretionary Cash Incentive Bonus. The Company pays discretionary bonuses
to its executive officers from an incentive pool derived from a pre-set
percentage of the Company's pre-tax earnings (excluding security transactions).
The pool for 1996 from which bonuses were paid in 1997 (following independent
audit of 1996 results) was set at a maximum 3% of such pre-tax earnings. Cash
bonuses were paid at a reduced level from the incentive pool during 1997 to ten
individuals in amounts representing the Committee's subjective assessment of the
executive's contribution to the Company's success, experience and demonstrated
capabilities.

Stock Option Grants. To achieve long-term enhancement of shareholder value,
the Company has an incentive program which involves the granting of incentive
stock options ("ISOs") to a limited number of key officers, including its
executive officers. ISOs are awarded by the Committee under the Company's Stock
Option Incentive Plan originally approved by the shareholders on May 14, 1991
and amended on May 10, 1994 (the "Plan"). ISOs are awarded under the Plan at an
exercise price determined by the Committee, such price to be no less than the
mean of the "bid" and "ask" prices of Second Bancorp's common stock on the date
of the grant. Options are awarded for ten year periods but are not exercisable
during the first year following their grant and are currently subject to an
annual limit of 7,500 shares to any individual. Due to Internal Revenue Service
restrictions on the maximum dollar value of ISOs in any given year, options
awarded during 1997 were split with a portion vesting in 1998 and the balance in
1999.

Options are awarded subjectively with the Committee taking into
consideration the same attributes that are considered in the setting of salaries
and the distribution of cash incentive bonuses. During 1997, a total of 62,000
options representing a like number of Company shares were awarded to ten
individuals under the Plan.

The Company's current Stock Option Incentive Plan will be replaced by the
1998 Long Term Incentive Plan (the "LTIP") proposed in this proxy statement if
and when the LTIP is approved and becomes effective.

CHIEF EXECUTIVE OFFICER COMPENSATION

Measurements employed in determining compensation paid to Alan G. Brant are
generally similar to those applicable to other executive officers, but also
include his performance in attracting, developing, retaining, and motivating key
management members critical to the achievement of the Company's short and long
term growth, earnings, and strategic goals. Enhancement of shareholder value on
a total return basis as demonstrated by the common stock performance graph on
the following page is also considered in the assessment of Mr. Brant's
performance. Total return on investment to Second Bancorp shareholders during
1997 exceeded 60% and was 271% for the five year period ending December 31,
1997. Elements of Mr. Brant's compensation thus set by the Committee are
reviewed by remaining outside members of the Board.

The base salary and incentive cash bonus paid Mr. Brant in 1997 (as
indicated in the Executive Compensation Table in this proxy statement) were a
direct and indirect reflection of (i) the Company's progress and performance,
and to a lesser extent (ii) salaries and bonuses paid to CEOs of banking
companies similar to the Company in size and market areas.

7
<PAGE> 10

Since stock option grants, and previously awarded stock appreciation
rights, depend upon increases in the Company's common stock price to have value
as an incentive to the recipient, such grants/awards are viewed by the Committee
as integral components of Mr. Brant's (and other key executives') compensation
arrangement. Given the historic performance of the Company's stock, we believe
they are a highly effective tool in directly aligning his financial interests,
and the interests of the executive team, with those of the Company's
shareholders.

Cloyd J. Abruzzo
John A. Anderson
Robert J. Webster

COMMON STOCK PERFORMANCE GRAPH

Supplemental to the executive compensation information presented in this
Proxy Statement, the Securities and Exchange Commission requires a five year
comparison of total return to Second Bancorp common shareholders with an
appropriate broad based market index and an index of stock performance by a peer
group of publicly traded companies. The graph that follows compares year-end
total shareholder returns, assuming dividend reinvestment, for the five-year
period ending December 31, 1997, on Second Bancorp common stock with the Nasdaq
Bank Stocks Index (Nasdaq Banks) and Nasdaq Stock Market Index (Nasdaq Market).
The Nasdaq Bank Stocks Index is a peer group index of total stock return for all
domestic banks traded on the Nasdaq. The Nasdaq Stock Market Index is a broad
based index of total stock return for all U.S. Companies traded on the Nasdaq
National Market.

<TABLE>
<CAPTION>
Measurement Period Second Nasdaq
(Fiscal Year Covered) Bancorp Nasdaq Banks Market
<S> <C> <C> <C>
YE '92 100 100 100
YE '93 140.41 114.04 114.80
YE '94 145.74 113.63 112.21
YE '95 203.39 169.22 158.70
YE '96 224.13 223.41 195.19
YE '97 371.27 377.44 239.53
</TABLE>

Nasdaq Banks
$377.44
Second Bancorp
$371.27
Nasdaq Market
$239.53

DIRECTOR COMPENSATION

Each Second Bancorp director was paid $4,500 for serving on the Board of
Directors in 1997 and $400 for each board meeting attended.

PENSION PLAN

Second Bancorp has no pension plan, but its officers are participants in
Second National Bank's pension plan. Second National has a defined benefit,
non-contributory pension plan for all of its employees identified as "The
Employees Retirement Plan of The Second National Bank of Warren". Due to the
plan's fully funded status, the aggregate contribution for all plan participants
during 1997 was zero percent (0%) of the total remuneration of the plan
participants. Remuneration for the purposes of the plan is the total of
salaries, commissions, and bonuses paid during the year to the plan
participants. Retirement benefits under the pension plan are based primarily
upon years of service

8
<PAGE> 11

and remuneration and take into account, among other things, the retirement
benefit paid under the Social Security Act. The normal retirement date for the
pension plan is age 65. No pension benefits were paid to the Named Officers in
1997.

The following table sets forth the estimated annual benefits at normal
retirement age pursuant to the provisions of the pension plan to persons in
specified remuneration and year-of-service classifications:

<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION
FOR REPRESENTATIVE YEARS OF CREDIT SERVICE
(ASSUMING RETIREMENT JANUARY 1, 1998)
FINAL AVERAGE ---------------------------------------------
REMUNERATION 10 20 30 40
------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
$100,000 $20,000 $40,100 $50,100 $50,100
125,000 25,300 50,600 63,200 63,200
150,000 30,500 61,100 76,400 76,400
175,000 32,600 65,300 81,600 81,600
200,000 32,600 65,300 81,600 81,600
225,000 32,600 65,300 81,600 81,600
250,000 32,600 65,300 81,600 81,600
300,000 32,600 65,300 81,600 81,600
</TABLE>

Officers Brant, Hanshaw, Kellerman, Bastic and Stanitz had as of December
31, 1997, 12, 8, 16, 12 and 5 years respectively of completed credited service
under Second National's pension plan.

EMPLOYEES' SAVINGS PLAN

The officers of Second Bancorp are participants in The Employees' Savings
Plan of The Second National Bank of Warren (the "Plan"). Any employee who has
completed 1,000 hours of service to Second National is eligible to participate
in the Plan. The Plan provides that any eligible employee may elect a deduction
from his/her salary, ranging from 1-15% of compensation per payroll period, the
amount of which will be held by the Plan trustee for the account of such
employee. Under the Plan, Second National will contribute to the Plan, on behalf
of each participating employee, an amount equal to 75% of the lesser of (i) the
participating employee's contribution to the Plan, or (ii) 6% of the
participating employee's compensation. Participation in the Plan is voluntary.
Amounts held by the Plan trustee for a participating employee may be withdrawn
by such employee upon termination of employment with Second National, or upon
reaching the age of 59-1/2. Amounts set aside for a participating employee's
benefit, through salary deduction, will be invested by the Plan trustee at the
participant's direction in one of several investment vehicles -- a Money Market
Fund, a Second Bancorp Stock Fund, a Fixed Income Common Trust Fund, an Equity
Common Trust Fund, or a Growth Common Trust Fund. Second National's portion of
the contribution is invested solely in the Second Bancorp Stock Fund.

CERTAIN AGREEMENTS WITH EXECUTIVE OFFICERS

Second Bancorp and Mr. Brant are parties to a stock appreciation rights
agreement. Pursuant to the terms of that agreement, Mr. Brant has been granted
appreciation rights in Second Bancorp common stock. On the occurrence of certain
specified events, such rights would entitle him to receive a cash payment in an
amount equal to the increase in value of a share between the date of the grant
of such rights and the reference date for payment, times the number of stock
appreciation rights being exercised. Second Bancorp and Mr. Brant are also
parties to an employment agreement, a consulting agreement, and a deferred
compensation agreement. The employment agreement, which is presently operative,
sets forth the terms and conditions applicable to Mr. Brant's service as
President and Chief Executive Officer of Second National. The term of Mr.
Brant's employment agreement runs through March 31, 1999. The consulting
agreement, which is not presently operative, sets forth the terms and conditions
which would be applicable to Mr. Brant's rendering consulting services to Second
National in the event he ceases to hold the offices of President and Chief
Executive Officer of Second National. Under the consulting agreement, Mr. Brant
is obligated to provide consulting services to Second National for a period of
three years following the date of termination of his employment as a result of a
change in control of the Company or one year if he is otherwise terminated
(other than for cause), in return for which he will receive his annual salary in
effect at the date of termination of his employment plus bonus and normal
employment fringe benefits during each year in the consulting term. The deferred
compensation agreement replaces a supplemental pension agreement which provided
that Mr. Brant would receive an additional year of pension credit for every two
years of service. The deferred compensation agreement provides that Mr. Brant
will receive the

9
<PAGE> 12

benefit contemplated by the supplemental pension agreement without regard to the
limits placed on executive compensation by the Internal Revenue Code.

Second Bancorp has entered into severance agreements with Messrs. Hanshaw,
Kellerman, Ms. Bastic, Mr. Stanitz and four other key executives. Those
agreements generally provide certain benefits to the executive if his/her
employment is terminated within one year after the date of any change in control
of the Company or if the executive resigns within that time frame as a result of
a significant reduction in job responsibilities or compensation, or relocation
of his/her job to a place more than 40 miles distant. Upon any such occurrence,
the executive will be entitled to a continuation of salary and benefits for
three years and executive job search assistance. These agreements remain in
effect through May 31, 2003, unless the executive voluntarily leaves the
Company's employ or is terminated for cause before that date.

TRANSACTIONS WITH DIRECTORS AND MANAGEMENT

All of the directors and officers of Second Bancorp and Second National,
and the companies with which they are associated, were customers of and transact
banking business with Second National in the ordinary course of the bank's
business during fiscal year 1997 and to date. Except as disclosed herein, loans
and commitments to loan included among such transactions were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other unrelated persons.
Such transactions did not involve more than the normal risk of collectibility or
present other unfavorable features.

Two of the Bank's branches are owned by Company and Bank director John C.
Gibson or entities related to him. During 1997, the Bank leased its Newton Falls
branch from Mr. Gibson and J. D. Gibson at an annual lease rental rate of
$33,600. In addition, during 1997, the Bank also leased its Champion branch from
the Cousins Company, an entity 50% owned by Mr. Gibson, at an annual lease
rental rate of $40,158. The Bank continues to make monthly lease payments to
both Mr. Gibson and Cousins Company for those branches under lease agreements
expiring in 2001 and 2004 respectively.

Mr. Gibson also serves as Chairman of the Board of Jack Gibson Construction
Company ("Gibson Construction"). During 1997, the Bank contracted with Gibson
Construction with respect to a number of facilities renovation and repair
projects. Fees paid to Gibson Construction by the Company during 1997 for
services performed in the normal course of business totaled $60,625.

The Bank subleases space in its main office building to various entities
including the Raymond John Wean Foundation, which subleased office space in 1997
at an annual rental rate of $15,624. Raymond John Wean, III, a director of the
Company, is one of four administrators of that Foundation.

The firm of Harrington, Hoppe & Mitchell, Ltd., of which Company director
John L. Pogue is a partner, was paid fees for various legal services performed
for the Company and the Bank in the normal course of their business during 1997
and it is anticipated that they will continue to do so. Legal fees (and director
fees due Mr. Pogue) paid to that firm in 1997 were approximately $194,206. In
addition, the firm subleased space from the Bank in its main office building
during 1997 at an annual rental rate of $77,292.

PROPOSAL TO ADOPT THE SECOND BANCORP, INCORPORATED
1998 NON-QUALIFIED STOCK OPTION PLAN

On February 5, 1998 the Board of Directors adopted, and the shareholders
are asked to approve, the Second Bancorp, Incorporated 1998 Non-Qualified Stock
Option Plan (the "1998 Plan"). The purpose of the 1998 Plan is to (a) provide
incentive to officers, key employees, and non-employee Directors of the Company
and subsidiary The Second National Bank of Warren (the "Subsidiary") to
stimulate their efforts toward the continued success of the Company and its
Subsidiary and to operate and manage the business in a manner that will provide
for the long-term growth and profitability of the Company and its Subsidiary;
(b) encourage stock ownership by officers, key employees, and non-employee
Directors by providing them with a means to acquire a proprietary interest in
the Company by acquiring shares of Stock; and (c) provide a means of attracting,
retaining, and rewarding key employees and non-employee Directors. For the
purpose of the 1998 Plan and this summary, any and all references to
"non-employee Directors" shall be deemed to exclude members of any Advisory
Board of Directors of the Company or its Subsidiary.

The 1998 Plan shall replace the amended Second Bancorp, Incorporated Stock
Option Incentive Plan approved and adopted by the shareholders in 1994 (the
"1994 Plan"). As such, there shall be no further grants pursuant to the
10
<PAGE> 13

1994 Plan, and all authorized but unissued shares for which options may be
granted shall no longer be subject to issuance. Nothing in this Plan, however,
shall affect, in any way, awards previously granted pursuant to the 1994 Plan,
and the 1994 Plan shall continue to control with respect to such previously
granted options.

A summary of the principal features of the 1998 Plan is provided below, but
is qualified in its entirety by reference to the full text of the 1998 Plan,
which is attached to this Proxy Statement as Exhibit A. Capitalized words in
this 1998 Plan description have the meaning as defined in the 1998 Plan.

ADMINISTRATION OF THE PLAN

The 1998 Plan shall be administered by the Committee as described in the
full text of the 1998 Plan. Subject to the terms of the 1998 Plan, the Committee
shall have full authority in its discretion to determine the officers and key
employees of the Company or its Subsidiary to whom Awards shall be granted and
the terms and conditions of any Awards.

Notwithstanding the above, with respect to non-employee Directors, the
Committee shall have no discretion to select which non-employee Directors will
be granted Options hereunder, to determine the number of shares for which
Options may be exercised, to determine the exercise price of the Option, the
timing of an Award, or any other term of the Award granted to a non-employee
Director.

SHARES AVAILABLE FOR ISSUANCE

The maximum number of shares of the Company's common Stock that may be
issued under the Plan is 650,000. At no time shall the Company have outstanding
Awards and shares of Stock issued in respect to Awards in excess of the Maximum
Plan Shares. To the extent permitted by law, the shares of Stock attributable to
the nonvested, unpaid, unexercised, unconverted or otherwise unsettled portion
of any Award that are forfeited, canceled or expire or terminate for any reason
without becoming vested, paid, exercised, converted or otherwise settled in full
shall again be available for purposes of the Plan. If a merger, consolidation,
recapitalization or similar corporate event occurs, the Committee may adjust the
number of shares that may be issued under the Plan in the future and the number
of shares and the exercise price, if applicable, under all outstanding grants to
preserve or to prevent the enlargement of the benefits made available under the
Plan.

GRANTS UNDER THE PLAN

Stock Options. The Committee may grant officers, key employees and
non-employee Directors Non-Qualified Stock Options. Employee Participant Option
Awards may contain any terms that the Committee determines subject to the terms
of the 1998 Plan, except that no employee Participant may be granted Options to
purchase more than 10,000 shares of Stock in any Plan Year. Any non-employee
Director of the Company or its Subsidiary, excluding members of any Advisory
Board, shall be eligible to receive, upon election to the Board and on the date
of any subsequent Annual Meeting of the shareholders of the Company if still
serving as a Director of the Company or its Subsidiary, Options to purchase
1,000 shares of Company common Stock. Notwithstanding the above, no non-employee
Director Participant shall receive in the aggregate Options to purchase more
than 1,000 shares of Company common Stock in any one Plan year regardless of
whether such non-employee Director serves on both the Second Bancorp,
Incorporated Board of Directors and The Second National Bank of Warren Board of
Directors.

The exercise price of any Option will not be less than the Fair Market
Value of the Stock on the date of grant. Payment of the Option price shall be
made in cash or its equivalent. The term and exercise schedule of each Option
will be fixed by the Committee but no Option shall be exercisable for more than
ten years from the date of grant.

Termination. Any Award granted under this Plan to a Participant who
suffers a Termination of Employment or Directorship may be canceled,
accelerated, paid or continued, as provided in the Option Agreement or, in the
absence of such provision, as the Committee may determine. The portion of any
Award exercisable in the event of continuation may be adjusted by the Committee
to reflect the Participant's period of service from the date of grant through
the date of the Participant's Termination of Employment or Directorship or such
other factors as the Committee determines are relevant to its decision to
continue the Award.

Change in Control. In the event of a Change in Control, the Awards granted
under the Plan shall become 100% Vested and exercisable pursuant to the terms of
the Option Agreement.

11
<PAGE> 14

Amendment. The Board of Directors at any time may amend or terminate the
Plan without shareholder approval; provided, however, that the Board of
Directors may condition any amendment on the approval of shareholders of the
Company if such approval is necessary or advisable with respect to tax,
securities or other applicable laws. No such termination or amendment without
the consent of the holder of an Award shall adversely affect the rights of the
Participant under such Award. The 1998 Plan shall remain in effect until the
earlier of (a) the date on which all shares for which Options may be issued have
been issued, (b) termination of the Plan by the Board, (c) ten years from the
date of the adoption of the Plan by the shareholders, or (d) such date as the
Board may elect. Any Award previously granted may extend beyond the termination
of the Plan, and the Committee shall continue to have the authority to
administer such Awards.

FEDERAL INCOME TAX CONSEQUENCES

The following is intended as a brief summary of the federal income tax
consequences of Non-Qualified Stock Options under the Plan. State and local tax
consequences may differ. Because the federal income tax rules with respect to
stock options are complex, Option holders are encouraged to consult with their
tax advisors prior to the exercise of any Options or the disposition of any
Stock purchased pursuant to the exercise of an Option.

A Participant does not realize taxable income upon the grant of a
Non-Qualified Stock Option. Upon the exercise of such an Option, the Participant
recognizes ordinary income to the extent the Fair Market Value of the Option
Stock on the date of exercise exceeds the exercise price. The Company receives
an income tax deduction in an amount equal to the ordinary income which the
Participant recognizes upon the exercise of the Options.

Section 162(m) Deductibility Limitation: The 1998 Plan is intended to
comply with Section 162(m) of the Code, thereby preserving the Company's
deduction for any compensation paid to its executive officers. Section 162(m)
provides that income received by the five most highly compensated officers of a
publicly traded company may not be deductible by that company unless, for
example, such income is derived from a performance-based plan within the meaning
of Section 162(m), and the other requirements of Section 162(m) are satisfied.
The 1998 Plan is intended to comply with the requirements of Section 162(m) for
performance based stock option plans. Specifically, the 1998 Plan provides that:
(i) as it applies to officers and key employees of the Company, the 1998 Plan
will be administered by a Committee consisting solely of "outside directors"
within the meaning of Section 162(m), (ii) the maximum number of shares of
Company common Stock for which Options can be granted to any Participant during
any calendar year shall not exceed 10,000, and (iii) the compensation a
Participant could receive upon the exercise of an Option under the 1998 Plan is
based solely upon the increase in the stock price from the date of the grant
since the exercise price must equal the Fair Market Value of the Stock on the
date of the grant pursuant to the terms of the 1998 Plan. In addition, as
required by Section 162(m), the 1998 Plan will be effective only upon approval
in a separate vote by a majority of the Company's shareholders.

REQUIRED VOTE

The Board of Directors believes that this Second Bancorp, Incorporated 1998
Non-Qualified Stock Option Plan is a valuable benefit offered to its officers,
key employees and non-employee Directors. The Board of Directors has approved
the Plan and has recommended that it be submitted to the Shareholders at the
Annual Meeting for their approval. The Board of Directors believes that the
approval of the Plan is in the Company's and Shareholders' best interests. The
adoption of the 1998 Non-Qualified Stock Option Plan requires the affirmative
vote of a majority of the shares represented and voting, in person or by proxy,
at the Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE ADOPTION
OF THE 1998 NON-QUALIFIED STOCK OPTION PLAN.

AUDITORS

The Board of Directors has appointed Ernst & Young LLP as the independent
Certified Public Accountants of Second Bancorp for the year 1998. A resolution
requesting shareholder ratification of this appointment will be presented at the
Annual Meeting.

A representative of Ernst & Young LLP will be present at the Annual Meeting
and will be available to respond to appropriate questions and to make a
statement, if desired.

12
<PAGE> 15

MISCELLANEOUS

The Board of Directors of Second Bancorp is not aware of any matters which
are to be presented at the forthcoming Annual Meeting of Shareholders other than
those specifically enumerated herein and in the notice of the meeting.

Whether or not you expect to be present at the Annual Shareholders Meeting,
it is important that you sign and return the enclosed proxy. If you do attend
the Meeting, you may vote personally rather than by proxy.

All shares represented by proxy in the form enclosed herewith will, in the
absence of other instructions, be voted in favor of:

(1) Fixing the number of directors at 7;

(2) Electing Alan G. Brant, John A. Anderson, John C. Gibson and Robert J.
Webster as directors to serve until the 2000 Annual Meeting of
Shareholders or until a successor is elected and qualified;

(3) Approving and adopting the 1998 Non-Qualified Stock Option Plan; and

(4) Ratifying the appointment of Ernst & Young LLP as the independent
Certified Public Accountants of Second Bancorp.

Management knows of no other matters to be voted upon at the Annual
Meeting. If any other matter properly comes before the Annual Meeting, it is the
intention of the persons named in the form of proxy to vote upon any such
matters in accordance with the recommendations of the Board of Directors.

The cost of solicitation of proxies shall be borne by Second Bancorp,
including the cost of preparing and mailing this Proxy Statement. Such
solicitation will be made by mail and may be by contacts made by the Board of
Directors and employees of Second Bancorp and Second National personally or by
telephone or telegram.

SHAREHOLDER PROPOSALS -- 1999

In order for shareholder proposals to be considered for presentation at the
1999 Annual Meeting of Shareholders, such proposals must be received by Second
Bancorp by December 1, 1998.

THE PROXIES ARE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE PROXIES
MAY BE REVOKED AT ANY TIME PRIOR TO THEIR EXERCISE BY NOTICE IN WRITING
DELIVERED TO THE SECRETARY OF SECOND BANCORP OR BY EXECUTION OF A LATER DATED
PROXY. FINANCIAL STATEMENTS FOR THE LATEST FISCAL YEAR, PREPARED IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPALS, ARE CONTAINED IN SECOND BANCORP'S
1997 ANNUAL REPORT MAILED TO SHAREHOLDERS WITH THIS NOTICE AND PROXY STATEMENT.
ADDITIONAL COPIES OF SECOND BANCORP'S ANNUAL REPORT FOR 1997 CAN BE OBTAINED
WITHOUT CHARGE UPON WRITTEN REQUEST DIRECTED TO THE CORPORATION'S SECRETARY,
CHRISTOPHER STANITZ, AT THE ADDRESS SET FORTH ON THE COVER OF THIS PROXY
STATEMENT.

Christopher Stanitz
Secretary
Second Bancorp, Incorporated

13
<PAGE> 16

EXHIBIT A

1998 NON-QUALIFIED STOCK OPTION PLAN
<PAGE> 17

SECOND BANCORP, INCORPORATED
1998 NON-QUALIFIED STOCK OPTION PLAN

Second Bancorp, Incorporated (the "Company") hereby establishes this Plan
to be called the Second Bancorp, Incorporated 1998 Non-Qualified Stock Option
Plan to encourage officers, certain key employees and non-employee Directors of
the Company and subsidiary The Second National Bank of Warren (the "Subsidiary")
to acquire common Stock of the Company pursuant to the grant of Non-Qualified
Stock Options. The purpose of the Plan is to (a) provide incentive to officers,
key employees, and non-employee Directors of the Company and its Subsidiary to
stimulate their efforts toward the continued success of the Company and its
Subsidiary and to operate and manage the business in a manner that will provide
for the long-term growth and profitability of the Company and its Subsidiary;
(b) encourage stock ownership by officers, key employees, and non-employee
Directors by providing them with a means to acquire a proprietary interest in
the Company by acquiring shares of Stock; and (c) provide a means of attracting,
retaining, and rewarding key employees and non-employee Directors.
Notwithstanding anything to the contrary contained herein, any reference in this
1998 Plan to "non-employee Directors" shall be deemed to exclude members of any
Advisory Board of Directors of the Company or its Subsidiaries.

If approved, this Plan shall replace the amended Second Bancorp,
Incorporated Stock Option Incentive Plan approved and adopted by the
shareholders in 1994 (the "1994 Plan"). As such, there shall be no further
grants pursuant to the 1994 Plan, and all authorized but unissued shares for
which options may be granted shall no longer be subject to issuance. Nothing in
this Plan, however, shall effect, in any way, awards previously granted pursuant
to the 1994 Plan, and the 1994 Plan shall continue to control with respect to
such previously granted options.

SECTION 1 DEFINITIONS

1.1 DEFINITIONS. Whenever used herein, the masculine pronoun shall be
deemed to include the feminine, the singular to include the plural, unless the
context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:

(a) "Award" means any Non-Qualified Stock Option Award granted under
the Plan.

(b) "Beneficiary" means the person or persons designated in writing by
a Participant to exercise an Award in the event of the Participant's death
while employed by the Company or its Subsidiary, or while a Director of the
Company or its Subsidiary, or in the absence of such designation, the
executor or administrator of the Participant's estate.

(d) "Change in Control" shall mean, and shall have been deemed to have
occurred if and when: (i) any person or entity (other than the Company) or
any number or combination thereof acting in concert (I) shall have acquired
ownership of or the right to vote or direct the voting of 25% or more of
the issued and outstanding capital stock of the Company, and (II) shall
have voted those shares, or otherwise used its ownership interest in the
Company, in a manner intended to exert control or significant influence
over the operation of the Company; or (ii) the Company shall have been
merged into another company or shall have otherwise consolidated with
another company in such a way that the Company is not the surviving entity;
or (iii) the Company shall have sold substantially all of its assets to
another company or other entity or person. The date of any Change of
Control shall be the same as the official date of the merger, consolidation
or sale or, with respect to (i) above, the date on which an acquirer shall
have first exercised control or influence over the Company.

(e) "Code" means the Internal Revenue Code of 1986, as amended.

(f) "Committee" means (1) for purposes of Non-Qualified Stock Options
granted to employee Participants of the Company or its Subsidiary, the
Compensation and Organization Committee of the Board of Directors
consisting of at least two Directors, each of whom qualifies as a
"disinterested person" within the meaning of Rule 16b-3 of the Exchange Act
and an "outside director" as the term is defined for purposes of Section
162(m) of the Code, and (2) for purposes of Non-Qualified Stock Options
granted to non-employee Directors of the Company or its Subsidiary, a
Committee as designated by the Board.

(g) "Company" means Second Bancorp, Incorporated, an Ohio corporation
or its successor corporation.

(h) "Disability" has the same meaning as provided in "The Employees
Retirement Plan of The Second National Bank of Warren" maintained by the
Company. In the event of a dispute, the determination of Disability
A-1
<PAGE> 18

shall be made by the Committee. In making its determination, the Committee
may, but is not required to, rely on advice of a physician competent in the
area to which such Disability relates. The Committee may make the
determination in its sole discretion, and any decision of the Committee
will be binding on all parties.

(i) "Fair Market Value" shall be determined by the Committee but shall
not be less than the mean of the bid and ask price of the Company's common
Stock price as reported by NASDAQ at the close of business on the date in
question.

(l) "Non-Qualified Stock Option" means a stock option, other than an
option qualifying as an Incentive Stock Option as defined in Section 422 of
the Code.

(m) "Option" means a Non-Qualified Stock Option.

(n) "Option Agreement" means a written agreement between the Company
and a Participant or other written documentation evidencing an Award.

(o) "Participant" means (1) an officer or key employee of the Company
or its Subsidiary designated by the Committee to receive an Award
hereunder, and (2) a non-employee Director of the Company or its
Subsidiary, excluding members of any Advisory Board, eligible to receive an
Award hereunder.

(p) "Plan" means the Second Bancorp, Incorporated 1998 NonQualified
Stock Option Plan.

(q) "Plan Year" means the calendar year.

(r) "Stock" means the Company's common Stock.

(s) "Subsidiary" means The Second National Bank of Warren.

(t) "Termination of Directorship" shall be deemed to have occurred
when an individual Director cease to be a member of the Board of Directors
of the Company or its Subsidiary.

(u) "Termination of Employment" means the termination of the
employee-employer relationship between a Participant and the Company or its
Subsidiary regardless of the fact that severance or similar payments are
made to the Participant, for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability or
Retirement. The Committee shall, in its absolute discretion, determine the
effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a leave of
absence constitutes a Termination of Employment, or whether a Termination
of Employment is for cause. In the event that a Participant ceases to be an
employee but remains a member of the Board of the Company or its
Subsidiary, no Termination of Employment shall be deemed to have occurred
until the Participant ceases to be a member of such Board.

(v) "Vested" means that an Award is nonforfeitable and exercisable
with regard to a designated number of shares of Stock.

SECTION 2 GENERAL TERMS

2.1 SHARES AVAILABLE FOR ISSUANCE. Subject to adjustment in accordance
with Section 4.2, 650,000 shares of Stock (the "Maximum Plan Shares") are hereby
reserved and subject to issuance under the Plan. At no time shall the Company
have outstanding Awards and shares of Stock issued in respect to Awards in
excess of the Maximum Plan Shares. To the extent permitted by law, the shares of
Stock attributable to the nonvested, unpaid, unexercised, unconverted or
otherwise unsettled portion of any Award that are forfeited, canceled or expire
or terminate for any reason without becoming vested, paid, exercised, converted
or otherwise settled in full shall again be available for purposes of the Plan.

2.2 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. The Committee shall have full authority in its discretion to
determine the officers and key employees of the Company or its Subsidiary to
whom Awards shall be granted, subject to the Plan. Subject to the provisions of
the Plan, the Committee shall have full and conclusive authority to interpret
the terms and provisions of the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Option Agreements under the Plan, and to make all other
determinations necessary or advisable for the proper administration of the Plan.
The Committee's determination under the Plan need not be uniform and may be made
by it selectively among persons who receive, or are eligible to receive, Awards
under the Plan (whether or not such persons are similarly situated). The
Committee's decisions shall be final and binding on all Participants. The
Committee may employ attorneys,
A-2
<PAGE> 19

consultants, accountants or other persons, and the Committee may rely on the
advice and opinion of such persons. No member of the Committee shall be
personally liable for any determination, interpretation, or action taken in good
faith with respect to this Plan.

2.3 ELIGIBILITY AND LIMITS. Participants in the Plan shall be selected by
the Committee from among those officers and key employees of the Company or its
Subsidiaries who, in the opinion of the Committee, are in a position to
contribute materially to the Company's continued growth and development and to
its long-term financial success. In addition, any non-employee Director of the
Company or its Subsidiaries shall be eligible upon election to the Board of the
Company or its Subsidiaries and on the date of any subsequent Annual Meeting of
the shareholders of the Company if still serving as a Director of the Company or
its Subsidiaries. No employee Participant shall receive Awards which in total
shall be for more than 10,000 shares of Stock in any Plan Year. Notwithstanding
Section 3.1(a) below, no non-employee Director Participant shall receive in the
aggregate Options to purchase more than 1,000 shares of the Company in any one
Plan Year regardless of whether or not such non-employee Director serves on both
the Second Bancorp, Incorporated Board of Directors and The Second National Bank
of Warren Board of Directors.

SECTION 3 TERMS OF AWARDS

3.1 TERMS AND CONDITIONS OF ALL AWARDS.

(a) The number of shares of Stock to which an Award shall be granted shall
be determined by the Committee in its sole discretion, subject to the provisions
of Sections 2.1 and 2.3. Notwithstanding the above, with respect to Options
granted to non-employee Directors, there are hereby granted the following
Options under this Plan subject to Sections 2.1 and 2.3: (i) With respect to
each individual who first becomes a non-employee Director of the Company or its
Subsidiary on or after the effective date of the Plan, an Option to purchase
1,000 shares of Stock as of the date the individual first becomes a non-employee
Director; (ii) With respect to each person who, as of the date of any annual
meeting of the Company's shareholders after the effective date of this Plan, is
an incumbent non-employee Director of the Company or its Subsidiary, and
previous to such meeting has received an Option under (i) above, an Option to
purchase 1,000 shares of Stock as of the date of such meeting. Notwithstanding
the above, (I) the initial grant of Options to the non-employee Directors
following approval of this Plan by the shareholders, shall not occur until the
six (6) month anniversary of the adoption of this Plan by the shareholders, and
(II) in no case shall a non-employee Director receive Options to purchase more
than 1,000 shares of Stock (as adjusted from time to time under Section 4.2) in
any one calendar year.

(b) Each Award shall be evidenced by a written Option Agreement delivered
to and accepted by the Participant containing such terms and provisions as the
Committee may determine is appropriate, subject to the provisions of the Plan.

(c) The date an Award is granted shall be the date on which the Committee
has approved the terms and conditions of the Option Agreement and has determined
the recipient of the Award and the number of shares covered by the Award;
provided, however, that the date of an Award to a non-employee Director shall be
as provided in Section 3.1(a) above. Notwithstanding any other provisions of
this Plan, in no event shall any Award be granted prior to the date in which
this Plan is approved by a majority of the shareholders of the Company.

(d) The Options granted pursuant to this Plan shall vest 100% one (1) year
from the date of grant. Notwithstanding, the Committee may provide in any Option
Agreement an alternative vesting schedule which shall in no event be less than
one year. The vesting schedule shall specify when such Awards shall become
Vested and thus exercisable. Notwithstanding any vesting schedule which may be
specified in an Option Agreement, in the event of a Change in Control, the
Awards granted under the Plan shall become 100% Vested and exercisable pursuant
to the terms of the Option Agreement.

(e) Awards shall not be transferable or assignable except by will or by the
laws of descent and distribution and shall be exercisable, during the
Participant's lifetime, only by the Participant, or in the event of the
Disability or death of the Participant, by the legal representative of the
Participant. Notwithstanding the above, the Committee may expressly provide in
the Option Agreement that a Participant may transfer such Award, in whole or in
part, (i) to a spouse or lineal descendant (hereinafter "Family Member"), (ii)
to a trust for the exclusive benefit of a Family
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<PAGE> 20

Member, or (iii) to a partnership, limited liability company or other entity in
which all the beneficial owners are Family Members. Subsequent transfers of
Awards shall be prohibited except in accordance with this Section 3.1(e). All
terms and conditions associated with the Award shall continue to apply following
a transfer in accordance with this Section 3.1(e).

3.2 TERMS AND CONDITIONS OF OPTIONS:

(a) Option Price. Subject to adjustment in accordance with Section
4.2 and the other provisions of this Section 3.2, the exercise price (the
"Exercise Price") per share of the Stock purchasable under any Option shall
be one hundred percent (100%) of the Fair Market Value of Stock on the date
of grant as determined in Section 3.1(c) and 1.1(i).

(b) Option Term. Any Option granted to a Participant shall not be
exercisable after the expiration of ten (10) years from the date the Option
is granted. The Committee may specify a shorter term and state such term in
the Option Agreement.

(c) Payment. Payment for all shares of Stock purchased pursuant to
the exercise of an Option shall be made in cash or a cash equivalent.
Payment shall be made at the time that the Option or any part thereof is
exercised, and no shares shall be issued or delivered upon exercise of an
Option until full payment has been made by the Participant. The holder of
an Option, as such, shall have none of the rights of a shareholder.

(d) Conditions to the Exercise of an Option. Each Option granted
under the Plan shall be exercisable by whom, at such time or times, or upon
the occurrence of such event or events, and in such amounts, as the
Committee shall specify in the Option Agreement; provided, however, that
subsequent to the grant of an Option, the Committee, at any time before
complete termination of such Option, may accelerate the time or times at
which such Option may be exercised in whole or in part, may permit the
Participant or any other designated person to exercise the Option, or any
portion thereof, for all or part of the remaining Option term
notwithstanding any provision of the Option Agreement to the contrary.

(e) Special Provisions for Certain Substitute
Options. Notwithstanding anything to the contrary in this Section 3.2, any
Option issued in substitution for an option previously issued by another
entity, which substitution occurs in connection with a transaction
described in Code Section 424(a), may provide for an exercise price
computed in accordance with such Code Section and the regulations
thereunder and may contain such other terms and conditions as the Committee
may prescribe to cause such substitute Option to contain as nearly as
possible the same terms and conditions (including the applicable vesting
and termination provisions) as those contained in the previously issued
Option being replaced thereby.

3.3 TREATMENT OF AWARDS UPON TERMINATION OF EMPLOYMENT OR DIRECTORSHIP.

Any Award granted under this Plan to a Participant who suffers a
Termination of Employment or Directorship may be canceled, accelerated, paid or
continued, as provided in the Option Agreement or, in the absence of such
provision, as the Committee may determine. The portion of any Award exercisable
in the event of continuation may be adjusted by the Committee to reflect the
Participant's period of service from the date of grant through the date of the
Participant's Termination of Employment or Directorship or such other factors as
the Committee determines are relevant to its decision to continue the Award.

SECTION 4 GENERAL PROVISIONS

4.1 WITHHOLDING. Whenever the Company proposes or is required to issue or
transfer shares of Stock under the Plan, the Company shall have the right to
require the employee Participant to remit to the Company an amount sufficient to
satisfy any statutory federal, state and local, if any, withholding tax
requirements prior to the delivery of any certificate or certificates for such
stock. An employee Participant may pay the withholding tax in cash, or, in such
other manner as the Option Agreement provides.

4.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION.

(a) The number of shares of Stock reserved for the grant of Options; the
number of shares of Stock reserved for issuance upon the exercise or payment, as
applicable, of each outstanding Option; and the Exercise Price of each
outstanding Option shall be proportionately adjusted for any increase or
decrease in the number of issued shares of

A-4
<PAGE> 21

Stock resulting from a subdivision or combination of shares, or the payment of a
stock dividend in shares of Stock to holders of outstanding shares of Stock, or
any other increase or decrease in the number of shares of Stock outstanding
effected without receipt of consideration by the Company.

(b) In the event of a merger, consolidation or other reorganization of the
Company or tender offer for shares of Stock, the Committee may make such
adjustments with respect to Awards and take such other action as it deems
necessary or appropriate to reflect, or in anticipation of such merger,
consolidation, reorganization or tender offer, including, without limitation,
the substitution of new Awards, the termination or adjustment of outstanding
Awards, or the acceleration of Awards. Any adjustment pursuant to this Section
4.2 may provide, in the Committee's discretion, for the elimination without
payment of any fractional shares that might otherwise become subject to any
Award.

(c) The existence of the Plan and the Awards granted pursuant to the Plan
shall not affect in any way the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Stock or the rights thereof, the dissolution or liquidation of the Company,
any sale or transfer of all or any part of its business or assets, or any other
corporate act or proceeding.

4.3 RIGHT TO TERMINATE EMPLOYMENT OR DIRECTORSHIP. Nothing in the Plan or
in any Option Agreement pursuant to this Plan shall confer upon any Participant
the right to continue as an employee, officer, or Director of the Company or any
of its Subsidiary or affect the right of the Company, or with respect to the
non-employee Directors, the shareholders, or its Subsidiary to terminate the
Participant's employment or directorship at any time.

4.4 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS. Each Award is
subject to the condition that if at any time the Committee, in its discretion,
shall determine that the listing, registration or qualification of the shares
covered by such Award upon any securities exchange or under any state or federal
law is necessary or desirable as a condition of or in connection with the
granting of such Award or the purchase or delivery of shares thereunder, the
delivery of any or all shares pursuant to such Award may be withheld unless and
until such listing, registration or qualification shall have been effected. If a
registration statement is not in effect under the Securities Act of 1933 or any
applicable state securities laws with respect to the shares of Stock purchasable
or otherwise deliverable under Awards then outstanding, the Committee may
require, as a condition of exercise of any Option, that the Participant or other
recipient of an Award represent, in writing, that the shares received pursuant
to the Award are being acquired for investment and not with a view to
distribution and agree that shares will not be disposed of except pursuant to an
effective registration statement, unless the Company shall have received an
opinion of counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities laws. The Company
may include on certificates representing shares delivered pursuant to an Award
such legends referring to the foregoing representations or restrictions or any
other applicable restrictions on resale as the Company, in its discretion, shall
deem appropriate.

4.5 NON-ALIENATION OF BENEFITS. Other than as specifically provided with
regard to the death of a Participant or with regard to a transfer to a Family
Member in accordance with Section 3.1(e), no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to do so shall be void. No such
benefit shall, prior to receipt by the Participant, be in any manner liable for
or subject to the debts, contracts, liabilities, or torts of the Participant.

4.6 TERMINATION AND AMENDMENT OF THE PLAN. The Board of Directors at any
time may amend or terminate the Plan without shareholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of shareholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of an Award shall adversely affect
the rights of the Participant under such Award.

4.7 CHOICE OF LAW. The laws of the State of Ohio shall govern the Plan, to
the extent not preempted by federal law.

4.8 EFFECTIVE DATE AND TERM OF PLAN. The Plan shall be submitted to the
shareholders of the Company for their approval within twelve (12) months before
or after the adoption of the Plan by the Board of Directors of the Company, and
shall become effective upon the date of such approval, and shall remain in
effect until the earlier of (a) the date on which all shares for which Options
may be issued have been issued, (b) termination of the Plan by the Board, (c)
ten years from the date of the adoption of the Plan by the shareholders, or (d)
such date as the Board may elect. Any Award previously granted may extend beyond
the termination of the Plan, and the Committee shall continue to have the
authority to administer such Awards.

A-5
<PAGE> 22
SECOND BANCORP, INCORPORATED
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1998

The undersigned hereby appoints Eugene E. Rossi, Michael G. Casale, and
Frederick M. Shape, and each of them, with power of substitution, proxies to
represent the undersigned to vote all common shares of Second Bancorp,
Incorporated, owned by the undersigned at the Annual Meeting of Shareholders to
be held in the Directors Room at the Main Office of The Second National Bank of
Warren, 108 Main Avenue, S.W., Warren, Ohio, on Tuesday, May 12, 1998, at 1:30
P.M. and any adjournment thereof, as marked on the reverse side hereof.

The proxies are also authorized to vote upon such other business as may properly
come before the meeting.

None of the above named proxy holders are officers or employees of Second
Bancorp, Incorporated.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY CONFERS
AUTHORITY TO VOTE "FOR" THE PROPOSITIONS LISTED ON THIS PROXY CARD UNLESS
OTHERWISE INDICATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS
PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE.

<PAGE> 23

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING
PROPOSALS.

1. To fix the number of For Against Abstain
Directors at 7.
------ ------- -------

Vote Withhold
For All Vote For All
2. To elect Directors in Class II
to serve a term of two years.
Nominees: Brant, Anderson, ------- -------
Gibson, Webster

A SHAREHOLDER MAY WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE
BY LINING THROUGH THE NOMINEE'S NAME.

3. To adopt the 1998 Non-Qualified For Against Abstain
Stock Option Plan.

------ ------- -------

4. To Ratify the appointment of For Against Abstain
Ernst & Young LLP, as the
independent Certified Public
Accountants of Second Bancorp, ------ ------- -------
Incorporated.

The undersigned hereby ratifies and confirms all that
said proxies, or any of them, or their substitutes,
shall lawfully do or cause to be done by virtue
hereof, and hereby revokes any and all proxies
heretofore given by the undersigned to vote at said
meeting. The undersigned acknowledges receipt of
Notice of Annual Shareholders Meeting and the Proxy
Statement accompanying the notice.

Please sign exactly as name appears at left. When
shares are held as joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee, or guardian, please give full title. If a
corporation or partnership, please sign corporate or
partnership name by authorized officer.

Date Signed _________, 1998 ___________________________

___________________________
Signature of Shareholder(s)