OHIO VALLEY BANC CORP.
P.O. BOX 240
GALLIPOLIS, OHIO 45631
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
<PAGE>
Gallipolis, Ohio
March 19, 1997
To the Shareholders of
Ohio Valley Banc Corp.
Notice is hereby given that the Annual Meeting of Shareholders of Ohio
Valley Banc Corp. (the "Company") will be held at the Morris and Dorothy Haskins
Ariel Theatre, 426 Second Avenue, Gallipolis, Ohio, on Wednesday, the 9th day of
April, 1997, at 5:00 p.m. Eastern Daylight Time, for the following purposes:
1. To elect three Directors of the Company each to serve for a three-year
term until the 2000 Annual Meeting of Shareholders and until their
successors are elected and qualified.
2. To consider and vote upon a proposal to fix the stated capital of the
common shares of the Company at One Dollar per share.
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Holders of Common Shares of the Company of record at the close of
business on March 12, 1997, will be entitled to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
James L. Dailey,
Chairman and Chief Executive Officer
Jeffrey E. Smith,
President, Chief Operating Officer and Treasurer
1
<PAGE>
OHIO VALLEY BANC CORP.
P.O. Box 240
Gallipolis, Ohio 45631
March 19, 1997
PROXY STATEMENT
This Proxy Statement is first being mailed on or about March 19, 1997
to all shareholders of record at the close of business on March 12, 1997,
regarding the Annual Meeting of Shareholders of Ohio Valley Banc Corp. (the
"Company") to be held at the Morris and Dorothy Haskins Ariel Theatre, 426
Second Avenue, Gallipolis, Ohio, on Wednesday, April 9, 1997, at 5:00 p.m.
Eastern Daylight Time.
The accompanying proxy is solicited by the Board of Directors of the
Company. The cost of this solicitation will be borne by the Company. Although
the solicitation of proxies will be made primarily by mail, proxies may also be
solicited by some of the Company's directors, officers, and regular employees
who may communicate with shareholders personally and by mail, telephone, or
telegram to request the return of the proxies.
The Annual Report of the Company for the fiscal year ended December 31,
1996, including financial statements, is enclosed with this Proxy Statement.
Voting Rights and Proxies
- -------------------------
Only shareholders of record at the close of business on March 12, 1997,
are entitled to vote at the Annual Meeting. As of February 14, 1997, the Company
had outstanding and entitled to vote at the Annual Meeting 1,325,787 common
shares, without par value ("Common Shares"). The number of Common Shares
outstanding and entitled to vote at the Annual Meeting identified above is
subject to increase, prior to the record date of March 12, 1997. Additional
Common Shares, which are currently authorized but not issued, may be issued
prior to March 12, 1997, pursuant to the voluntary purchase provisions of the
Company's Dividend Reinvestment Plan. These additional common shares will be
issued after February 14, 1997, but prior to March 12, 1997, are entitled to the
same voting rights as referenced above.
Shareholdings of Management
- ---------------------------
The following table indicates, as of February 14, 1997, the number and
percentage of outstanding Common Shares of the Company beneficially owned by
each nominee for election to the Board of Directors and by all Directors and
Executive Officers of the Company as a group. The Company knows of no persons
other than Mr. Haskins who beneficially owns more than 5% of such shares.
2
<PAGE>
No. of Shares and Nature Percent of
Name and Address of Beneficial Ownership* Class
- ---------------- ------------------------ -----
James L. Dailey** 11,233 .85%
445 Third Avenue
Gallipolis, Ohio 45631
Jeffrey E. Smith** 5,219 .39%
22 Edgemont Drive
Gallipolis, Ohio 45631
Morris E. Haskins 131,833 9.94%
1 Vine Street
Gallipolis, Ohio 45631
Keith R. Brandeberry, M.D. 25,405 1.92%
401 First Avenue
Gallipolis, Ohio 45631
W. Lowell Call 5,345 .40%
399 Maple Drive
Gallipolis, Ohio 45631
Robert H. Eastman 11,792 .89%
4551 State Route 588
Gallipolis, Ohio 45631
Merrill L. Evans 19,922 1.50%
2362 East Bethel Church Road
Gallipolis, Ohio 45631
Warren F. Sheets 59,240 4.47%
120 First Avenue
Gallipolis, Ohio 45631
Thomas E. Wiseman 3,342 .25%
619 Fourth Avenue
Gallipolis, Ohio 45631
All Directors and Executive 287,510 21.69%
Officers as a Group
(10 persons)
3
<PAGE>
* Included are shares owned by each nominee, Director or group and, in
certain instances, by his spouse and minor children, and shares over
which each nominee or Director has full voting control and power of
disposition. Also included in the shares listed for Messrs. Dailey and
Smith are shares allocated to each individual in the Company's Employee
Stock Ownership Plan.
** Executive Officer of the Company and/or Bank.
Effective October 23, 1992, the Company became the parent corporation
of The Ohio Valley Bank Company (the "Bank") in a one-bank holding company
system. As the result of a corporate reorganization approved by the shareholders
of the Bank, each shareholder of the Bank received one (1) Common Share of the
Company in exchange for each common share held by that shareholder of the Bank
on October 23, 1992. As of that date, and as a result of the reorganization, the
shareholders of the Bank possessed all of the outstanding Common Shares of the
Company and the Bank became a wholly-owned subsidiary of the Company.
PROXY ITEM 1: ELECTION OF DIRECTORS
- ------------- ---------------------
The Company's Board of Directors consists of nine (9) members divided
into three (3) classes. The terms of office of three (3) Directors of one (1)
class expire at the Annual Meeting. Directors elected at the Annual Meeting
shall serve a three (3) year term until the 2000 annual meeting of shareholders
and until their respective successors are elected and qualified. The enclosed
proxy, if returned duly executed and unless instructions to the contrary are
indicated thereon, will be voted for the three (3) nominees listed below. Since
December, 1980, the Board of the Bank has followed a policy that a Director of
the Bank shall retire at the next Annual Meeting of Shareholders following the
70th birthday of such Director. The policy does not apply to any member of the
Board of the Bank who was a member of the Board on December 2, 1980, the date of
the adoption of this policy, except for Merrill Evans, who has specifically
requested that this policy apply to his tenure on the Board of the Bank. In
observance of this policy, a Director of the Company will not stand for
re-election as a Director of the Company following the completion of the term
during which he attains the age of 70.
Article Two of the Company's Code of Regulations prescribes the method
for a shareholder to nominate a candidate for election to the Board of
Directors. Nominations, other than those made by or on behalf of the existing
Board of Directors of the Company, must be made in writing and must be delivered
or mailed to the President of the Company not less than 14 days, nor more than
50 days, prior to any meeting of shareholders called for the election of
Directors. Such notification must contain the following information:
a. name and address of each proposed nominee;
b. principal occupation of each proposed nominee;
c. total number of shares of capital stock of the Company that will be
voted for each proposed nominee;
d. name and residence address of the notifying shareholder; and
e. number of shares of capital stock of the Company owned by the
notifying shareholder.
4
<PAGE>
As of the date of this Proxy Statement, no persons have been so nominated for
election at this Annual Meeting.
The table below sets forth information as to the principal occupation
of each nominee for election as Director and each Director presently serving the
Company, the nominee's or Director's age, the year in which each nominee or
Director first became a Director of the Company, and certain other information.
If for any reason, any nominee named below should not be a candidate
for election at the time of the Annual Meeting, the proxies may be voted for a
substitute nominee in the discretion of those named as proxies. The Management
has no reason to believe that any nominee will be unavailable. The nominees
receiving the greatest number of votes will be elected. Shares as to which the
authority to vote is withheld and broker non-votes, if any, will not be counted
toward the election of Directors or toward the election of the individual
nominees specified on the form of proxy.
Director
Director of the
of the Company
Name Age Principal Occupation* Bank Since Since
- ---- --- --------------------- ---------- -----
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 2000
Keith R. Brandeberry, M.D.** 75 Physician 1968 1992
Merrill L. Evans 64 Developer, Farmer and 1979 1992
President, Evans
Enterprises, Inc.
Thomas E. Wiseman*** 38 President, The 1992 1992
Wiseman Agency, Inc.
5
<PAGE>
DIRECTORS WITH TERMS EXPIRING IN 1998
Jeffrey E. Smith 47 President and 1986 1992
Chief Operating Officer
of the Company and the
Bank, Treasurer
of the Company
Robert H. Eastman*** 56 President of Ohio 1986 1992
Valley Supermarkets,
Inc.
Warren F. Sheets 72 Attorney, Warren F. 1974 1992
Sheets Co., LPA
DIRECTORS WITH TERMS EXPIRING IN 1999
James L. Dailey 62 Chairman and Chief 1970 1992
Executive Officer
of the Company and the
Bank
W. Lowell Call**,*** 60 Vice President, Sausage 1986 1992
Production, Bob Evans
Farms, Inc.
Morris E. Haskins 85 Director of the Company, 1939 1992
Chairman of the Bank
from 1981 until his
retirement in April, 1992
* Each of the Directors has held the respective position with the
Company or the other companies listed for a period of at least five
years.
** Member of the Examination and Audit Committee of the Bank. The
Committee is charged by Ohio law with responsibility for the Bank's
audit. The Committee met twelve (12) times during 1996. The Bank's
annual audit is reviewed by the entire Board of Directors. Neither the
Board of the Company nor the Bank has a standing Nominating Committee,
or a committee performing similar functions.
*** Member of the Compensation Committee of the Company. The Compensation
Committee establishes the compensation of executive officers of the
Bank. This Committee met five (5) times during 1996.
During the past year, the Board of Directors of the Company met five (5)
times, and the Board of the Bank met twenty-four (24) times. None of the
Directors attended fewer than 75% of the aggregate of the total number of Board
meetings and the total number of meetings held by committees of the Boards on
which he served during the year.
6
<PAGE>
Remuneration of Executive Officers
- ----------------------------------
The following table shows, for the three fiscal years ended December
31, 1996, compensation paid by the Company for services in all capacities to the
following executive officers of the Company who earned salary and bonus in
excess of $100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation
- -------------------------------------------------------------------------------
Name and Principal Year Salary(1) Bonus(2) All Other Compensation
Position ($) ($) ($)
- -------------------------------------------------------------------------------
James L. Dailey 1996 $86,319 $91,342 $13,845 ( 3 )
Chairman and 1995 82,079 74,410 13,106 ( 4 )
Chief Executive 1994 77,572 68,612 12,745 ( 5 )
Officer of the
Company and
the Bank
Jeffrey E. Smith 1996 $63,145 $84,243 $13,079 ( 6 )
President 1995 60,531 67,722 11,028 ( 7 )
and Chief 1994 59,376 57,071 9,971 ( 8 )
Operating
Officer of the
Company and the
Bank, and Treasurer
of the Company
(1) "Salary" includes Director's Fees received by Messrs. Dailey and Smith
during each of 1996, 1995 and 1994 fiscal years in the amounts of
$2,400, $2,700 and $3,600, respectively.
(2) "Bonus" includes Director's Bonus received by Messrs. Dailey and Smith
during each of 1996, 1995 and 1994 fiscal years in the amounts of
$13,927, $12,719 and $11,723, respectively. Messrs. Dailey and Smith
have chosen to defer a portion of their bonus under the Company's
deferred compensation plan for directors and executive officers
implemented in 1996.
(3) Includes $3,149 allocated to Mr. Dailey pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Bank
Profit Sharing Plan; $1,522 allocated to Mr. Dailey pursuant to
Company contributions and reallocated forfeitures under the 401-K plan
which is provided for under the Ohio Valley Bank Profit Sharing Plan;
$8,466 allocated to Mr. Dailey pursuant to Company contributions and
reallocated forfeitures under the Ohio Valley Bank Employee Stock
Ownership Plan; and $708 premium paid by the Company for a $322,000
life insurance policy on the life of Mr. Dailey, pursuant to the terms
of the Company's group life insurance contracts.
7
<PAGE>
(4) Includes $2,826 allocated to Mr. Dailey pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Bank
Profit Sharing Plan; $1,500 allocated to Mr. Dailey pursuant to
Company contributions and reallocated forfeitures under the 401-K plan
which is provided for under the Ohio Valley Bank Profit Sharing Plan;
$7,683 allocated to Mr. Dailey pursuant to Company contributions and
reallocated forfeitures under the Ohio Valley Bank Employee Stock
Ownership Plan; and $1,097 premium paid by the Company for a $304,000
term life insurance policy on the life of Mr. Dailey.
(5) Includes $2,829 allocated to Mr. Dailey pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Bank
Profit Sharing Plan; $1,459 allocated to Mr. Dailey pursuant to
Company contributions and reallocated forfeitures under the 401-K plan
which is provided for under the Ohio Valley Bank Profit Sharing Plan;
$7,468 allocated to Mr. Dailey pursuant to Company contributions and
reallocated forfeitures under the Ohio Valley Bank Employee Stock
Ownership Plan; and $989 of premium paid by the Company for a $279,000
term life insurance policy on the life of Mr. Dailey.
(6) Includes $3,090 allocated to Mr. Smith pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Bank
Profit Sharing Plan; $1,494 allocated to Mr. Smith pursuant to Company
contributions and reallocated forfeitures under the 401-K plan which
is provided for under the Ohio Valley Bank Profit Sharing Plan; $8,308
allocated to Mr. Smith pursuant to Company contributions and
reallocated forfeitures under the Ohio Valley Bank Employee Stock
Ownership Plan; and $187 of premium paid by the Company for a $263,000
life insurance policy on the life of Mr. Smith, pursuant to the terms
of the Company's group life insurance contracts.
(7) Includes $2,404 allocated to Mr. Smith pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Bank
Profit Sharing Plan; $1,276 allocated to Mr. Smith pursuant to Company
contributions and reallocated forfeitures under the 401-K plan which
is provided for under the Ohio Valley Bank Profit Sharing Plan; $6,536
allocated to Mr. Smith pursuant to Company contributions and
reallocated forfeitures under the Ohio Valley Bank Employee Stock
Ownership Plan; and $812 of premium paid by the Company for a $238,000
term life insurance policy on the life of Mr. Smith.
(8) Includes $2,257 allocated to Mr. Smith pursuant to Company
contributions and reallocated forfeitures under the Ohio Valley Bank
Profit Sharing Plan; $1,164 allocated to Mr. Smith pursuant to Company
contributions and reallocated forfeitures under the 401-K plan which
is provided for under the Ohio Valley Bank Profit Sharing Plan; $5,958
allocated to Mr. Smith pursuant to Company contributions and
reallocated forfeitures under the Ohio Valley Bank Employee Stock
Ownership Plan; and $592 of premium paid by the Company for a $220,000
term life insurance policy on the life of Mr. Smith.
8
<PAGE>
Compensation of Directors
- -------------------------
No member of the Board of Directors of the Company received
remuneration in 1996 for his services as such. All of the Directors of the
Company serve as Directors of the Bank. In 1996, each individual who is not a
salaried officer of the Bank received $300 per month for his service as a member
of the Board of Directors of the Bank. Directors Dailey and Smith received $200
per month for their services. The Bank Board met twenty-four (24) times in 1996.
All Directors received $300 as a monthly fee in the fiscal years 1994 and 1995,
except Mr. Dailey and Mr. Smith who both received $200 as a monthly fee in the
fiscal year 1995. In addition, it is the practice of the Bank to pay a bonus to
its Directors based upon the performance of the Bank. For 1996, each Director of
the Bank received a bonus of $13,927. This bonus figure specifically includes
amounts participating directors may have chosen to defer under the Company's
deferred compensation plan for directors and executive officers implemented in
1996.(1) The bonus paid to each Director in the fiscal years of 1994 and 1995
was $11,723 and $12,719, respectively. Mr. Evans, Dr. Brandeberry, Mr. Haskins,
and Mr. Wiseman each received an additional $36,618 in 1996 for their service as
members of the Executive Committee of the Board of Directors of the Bank, which
met fifty (50) times in 1996. Mr. Saunders retired from the Executive Committee
in April of 1996. Mr. Saunders received $4,843 in 1996 for his service as a
member of the Executive Committee. This figure for Mr. Evans, Dr. Brandeberry,
and Mr. Haskins for the fiscal years of 1994 was $33,888. This figure for Mr.
Evans, Dr. Brandeberry, Mr. Haskins, and Mr. Saunders for the fiscal year of
1995 was $35,122. Mr. Saunders retired as an executive officer of the Bank in
December, 1994, retaining his position as a member of the Executive Committee of
the Bank. Executive Committee members who are employees of the Bank receive no
compensation for serving on the Executive Committee. Mr. Saunders received no
Executive Committee fees for fiscal year 1994.
(1) In December 1996, life insurance contracts were purchased by the
Company. The Company is the owner of the contracts. One of the
purposes of these contracts was to replace a current group life
insurance program for executive officers and implement a deferred
compensation plan for directors and executive officers in 1996.
Participants in the deferred compensation plan are eligible to receive
distribution of their contributions, plus accrued interest earned at
no greater than market rate on reinvestment of the contributions, upon
reaching age 70, provided that, if a participants dies before reaching
age 70 and the participant qualifies, distribution shall be made to
the participant's designated beneficiary in an amount equal to what
the director would have accumulated if the participant had reached age
70 and had continued to make contributions to the plan. The cost of
providing the benefits to the participants will be offset by the
earnings on the life insurance contracts.
Report of the Compensation Committee of the Board of Directors
- ----------------------------------------------------------------
on Executive Compensation
- -------------------------
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, this Report and
the graph set forth on page 13 shall not be incorporated by reference into any
such filings.
9
<PAGE>
DECISION-MAKING PROCESS. The executive officers of the Company receive
no compensation from the Company. Instead, they are paid by the Bank for
services rendered in their capacity as executive officers of the Company and the
Bank. On April 3, 1996, the Board of Directors of the Company re-elected the
following non-employee Directors to the compensation committee:
Thomas E. Wiseman, Chairman
W. Lowell Call
Robert H. Eastman
Prior to April 7, 1993, the Board of Directors of the Bank reviewed and
recommended officer compensation and corporate benefits plans as well as
forecasting future personnel needs of the Bank.
In 1993, the Bank engaged Crowe, Chizek and Company to construct a
comprehensive wage and salary administration plan for the Bank to be used for
all its employees.
The Compensation Committee conducted the same written comprehensive
performance appraisal on both James L. Dailey and Jeffrey E. Smith that was
conducted on all other employees of the Bank, evaluating their ability to
achieve or exceed the expected requirements of their respective jobs based on
their specific job content questionnaires. From this appraisal, a performance
rating on each individual was developed. The Compensation Committee met with Mr.
Dailey and Mr. Smith five (5) times during 1996 to review their performance and
the goals established for each.
In 1993, a marketplace range was developed by Crowe, Chizek and
Company for all jobs at the Bank including those of Mr. Dailey and Mr. Smith.
These ranges were revised in 1996 using the Crowe Chizek Bank Compensation
Survey and the 1996 Ohio Bankers Association Compensation Survey. The
performance rating of Mr. Dailey and Mr. Smith and their position in the
marketplace range were used to determine their respective bonuses for 1996, 1995
and 1994 and their 1997, 1996 and 1995 salaries. Mr. Dailey and Mr. Smith
received salary increases in 1996, as indicated in the Summary Compensation
Table on page 7 of this Proxy Statement.
PHILOSOPHY AND CEO COMPENSATION. The compensation philosophy of the
Company and the Bank is that compensation of its executive officers and others
should be directly and materially linked to corporate operating performance. To
achieve this correlation, executive compensation is heavily weighted toward
bonuses paid on the basis of corporate performance. It is a historical fact,
therefore, that in years when the Bank has had extraordinary success, its
officers have been well compensated and in less profitable years, the officers'
pay has been negatively impacted to a substantial degree. The cash compensation
program for executive officers consists of two elements, a base salary component
and a bonus component. The bonus component consists of two bonus pools: one for
all Directors and one for all officers and employees. An executive officer, if a
Director, may be eligible to participate in the Directors' pool as well as the
officers' pool.
10
<PAGE>
The objectives of the bonus component are to motivate and reward the
accomplishment of annual objectives of the Company and the Bank, reinforce a
strong performance orientation with differentiation and variability in
individual awards based on contribution to annual and long-range business
results, and provide a fully competitive compensation package which will
attract, reward, and retain individuals of the highest quality.
The decision-making process and compensation philosophy of the Company
and the Bank were considered by the Compensation Committee when determining 1996
compensation for James L. Dailey, Chairman and Chief Executive Officer, and
Jeffrey E. Smith, President, Chief Operating Officer, of the Company and the
Bank. The Compensation Committee believes that the compensation earned by Mr.
Dailey and Mr. Smith in 1996 was fair and reasonable when compared with
executive compensation levels in the banking industry as reported in the
marketplace range developed. Mr. Dailey and Mr. Smith ranked in the
middle of the total compensation marketplace range for their respective grades.
Submitted by:
Compensation Committee Members
Thomas E. Wiseman, Chairman
W. Lowell Call
Robert H. Eastman
Other Transactions with Management
- ----------------------------------
The Company through its subsidiary, the Bank, has had and expects to
have in the future banking transactions in the ordinary course of the Bank's
business with some of the Directors, officers and principal stockholders of the
Company and entities with which they are associated. All loans and commitments
to loan included in such transactions were made on substantially the same terms,
including interest rates and collateral on loans and repayment terms, as those
prevailing at the time for comparable transactions with other persons and, in
the opinion of the Management of the Company, each such loan and commitment to
loan did not involve more than a normal risk of uncollectibility or present
other unfavorable features. The aggregate amount of loans to officers,
Directors, entities in which officers and Directors have an interest, and
affiliated and other indirectly related companies and individuals was $6,537,640
at December 31, 1996. As of the date hereof, all of such loans were performing
loans.
11
<PAGE>
PROXY ITEM 2: APPROVAL OF PROPOSAL TO FIX THE STATED CAPITAL OF
THE COMMON SHARES OF THE COMPANY AT ONE DOLLAR PER SHARE
The Company's Board of Directors unanimously adopted a resolution
proposing the stated capital of the Company be fixed at One Dollar ($1.00) per
outstanding common share. The Board of Directors recommends that the
shareholders of the Company approve this proposal.
Accounting reports issued following the formation of the Company have
indicated that a figure of Ten Dollars ($10.00) per outstanding common share has
been used to determine stated capital. However, this figure was not formally
adopted by the incorporator, directors or shareholders or specifically stated in
the merger documents when the Company acquired The Ohio Valley Bank Company. The
stated capital is a carryover of the figure used to determine the stated capital
of The Ohio Valley Bank Company prior to the merger.
Pursuant to the Ohio Revised Code, the stated capital of the common
shares may be reduced or eliminated by resolution adopted at a meeting of
shareholders. To be adopted, the proposal to fix the stated capital at $1.00 per
common share must be approved by the affirmative vote of the holders or a
majority of the common shares.
The Board of directors believes that it is in the best interests of the
Company and its shareholders to fix the stated capital of the Company at One
Dollar ($1.00) per outstanding common share. The reduction from ten ($10.00)
dollars to one dollar ($1.00) will better facilitate the issuance of share
dividends and stock splits from time to time, as the Board of Directors should
determine appropriate. The lower stated capital amount will reduce the impact
such share dividends and stock splits would have on the Company's retained
earnings.
THE APPROVAL OF THE PROPOSAL TO FIX THE STATED CAPITAL AT $1.00 PER
COMMON SHARE REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
OUTSTANDING COMMON SHARES.
The Board of Directors unanimously recommends a vote FOR approval of
the proposal. Proxies will be voted FOR approval of the proposal to fix the
stated capital at $1.00 per common share unless otherwise specified in the
proxy.
12
<PAGE>
Performance Graph
- -----------------
The following graph sets forth a comparison of five year cumulative
total return among the Company's Common Shares (indicated "OVB" on the
Performance Graph), the S & P 500 Index and the Keefe, Bruyette & Woods, Inc.
KBW 50 Index-Midwest (the "KBW-Midwest Index") (indicated "Midwest" on the
Performance Graph) for the fiscal years indicated. (Information prior to the
merger effective October 23, 1992 for the line indicated OVB refers to common
shares of the Bank.) Information reflected on the graph assumes an investment of
$100 on December 31, 1991 in each of the Common Shares, the S & P 500 Index and
the KBW-Midwest Index. Cumulative total return assumes reinvestment of
dividends. The KBW-Midwest Index represents stock price performance of fifteen
(15) of the nation's large banks located in the midwest region of the United
States, as selected by Keefe, Bruyette & Woods, Inc. The Company is not among
the fifteen (15) banking companies included in the KBW-Midwest Index. The
Company has not identified at this time any published index of stock performance
which includes the Company or banking companies comparable to it.
INDEX OF TOTAL RETURNS
S&P 500, MIDWEST, OVB
1991 - 1996
Q4 91 Q4 92 Q4 93 Q4 94 Q4 95 Q4 96
----- ----- ----- ----- ----- -----
S&P 500 $100 $107 $118 $120 $165 $203
MIDWEST $100 $114 $121 $110 $167 $228
OVB $100 $120 $148 $167 $204 $259
13
<PAGE>
Information Concerning Independent Certified Public Accountant
- --------------------------------------------------------------
On October 21, 1992, the Bank dismissed the accounting firm of Ernst &
Young as the Bank's independent accountant. The accounting firm of Crowe, Chizek
and Company was engaged, effective October 22, 1992, as the new independent
accountant for the Bank and the Company. In connection with the audits of the
Bank's financial statements for each of the two fiscal years ended December 31,
1991, and in the subsequent interim period preceding October 21, 1992, there
were no disagreements with Ernst & Young on any matters of accounting principles
or practices, financial statement disclosure, or auditing scope and procedure,
which disagreements, if not resolved to the satisfaction of the former
accountant, would have caused it to make reference in connection with its report
to the subject matter of the disagreement. The report of Ernst & Young on the
Bank's financial statements for the two years ended December 31, 1991, did not
contain an adverse opinion or a disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles. The decision
to change independent accountants was reviewed by the Bank's Audit Committee,
and unanimously approved by the Board of Directors of the Bank.
Representatives of Crowe, Chizek and Company are expected to be in
attendance at the Annual Meeting. These representatives will have the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions. In connection with its annual
audit services, Crowe, Chizek and Company examined the Company's annual
financial statements, performed the annual Directors' examination and reviewed
annual report filings with the Federal Deposit Insurance Corporation.
In addition to its annual audit function, Crowe, Chizek and Company
provided other professional services consisting principally of preparation and
review of the corporate federal income tax return for the Company. The Board of
Directors has approved each professional service provided by Crowe, Chizek and
Company during the last year. As a part of this approval process, the Board of
Directors considers whether the performance of each professional service would
impair the independence of Crowe, Chizek and Company as auditors for the
Company.
Annual Report - Form 10-K
- -------------------------
The Company will provide without charge to any shareholder of record on
March 12, 1997, on the written request of any such shareholder, a copy of the
Company's Annual Report on Form 10-K, including Financial Statements and
Schedules thereto, required to be filed under the Securities Exchange Act of
1934, as amended, for the Company's fiscal year ended December 31, 1996. Such
written request should be directed to Wendell B. Thomas, Secretary, Ohio Valley
Banc Corp., P.O. Box 240, Gallipolis, Ohio 45631, telephone number
1-614-446-2631.
14
<PAGE>
Proxy Statement Proposals
- -------------------------
Each year the Board of Directors submits its nominations for election
of Directors at the Annual Meeting of Shareholders. Other proposals may be
submitted by the Board of Directors or shareholders for inclusion in the Proxy
Statement for action at the Annual Meeting. Any proposal submitted by a
shareholder for inclusion in the Proxy Statement for the 1998 Annual Meeting,
presently scheduled for April 8, 1998, must be received by the Company on or
before November 19, 1997.
Reports to be Presented at the Meeting
- --------------------------------------
There will be presented at the meeting the Company's Annual Report for
the year ended December 31, 1996, containing financial statements for such year
and the signed opinion of Crowe, Chizek and Company, independent certified
public accountant, with respect to such financial statements. The Annual Report
is not to be regarded as proxy soliciting material, and Management does not
intend to ask, suggest or solicit any action from the shareholders with respect
to such Report.
Other Matters
- -------------
The only business which Management intends to present at the Annual
Meeting consists of the matters set forth in this Proxy Statement. Management
knows of no other matters to be brought before the Annual Meeting by any other
person or group.
If any other matters should properly come before the Annual Meeting,
the proxy holders will vote thereon in their discretion.
All duly executed proxies received will be voted.
You are requested to sign and date the enclosed proxy and mail it
promptly in the enclosed envelope. If you later desire to vote in person or to
change or withdraw your vote, you may revoke your proxy either by written notice
to the Company, to the attention of James L. Dailey, Chairman, or in person at
the Annual Meeting (without affecting any vote previously taken).
BY ORDER OF THE BOARD OF DIRECTORS
James L. Dailey,
Chairman and Chief Executive Officer
Jeffrey E. Smith,
President, Chief Operating Officer and Treasurer
15
<PAGE>
PROXY
OHIO VALLEY BANC CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints James L. Dailey, Jeffrey E. Smith, and
Wendell B. Thomas, and each of them with full power of substitution to each, the
true and lawful attorneys and proxies of the undersigned to vote all of the
Common Shares which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of Ohio Valley Banc Corp., to be held at the Morris and Dorothy
Haskins Ariel Theatre, 426 Second Avenue, Gallipolis, Ohio, on Wednesday, April
9, 1997 at 5:00 P.M. Eastern Daylight Time, and at any adjournment or
adjournments thereof, for the following purposes:
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below. [ ] WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees listed below.
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.
Keith R. Brandeberry Merrill L. Evans Thomas E. Wiseman
2. For [ ] Against [ ] Abstain [ ] the proposal to fix the stated capital of
common shares of the Company at One Dollar per share.
3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof; with all powers the
undersigned would possess if personally present, giving unto said
attorneys and proxies, or substitutes, full power and authority to do
whatsoever in their opinion may be necessary or proper to be done in the
exercise of the power hereby conferred, including the right to vote for
any adjournment, hereby ratifying all that said attorneys and proxies, or
substitutes, may lawfully do or cause to be done by virtue hereof.
A majority of said attorneys and proxies, or substitutes, who shall be
present and shall act at the meeting (or if only one should be present and act,
then that one) shall have and exercise all the powers of said attorneys and
proxies hereunder.
UNLESS INSTRUCTIONS TO THE CONTRARY ARE GIVEN, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE PERSONS NAMED AS NOMINEES IN
THE ACCOMPANYING PROXY STATEMENT, "FOR" THE PROPOSAL TO FIX THE STATED CAPITAL
OF COMMON SHARES OF THE COMPANY AT ONE DOLLAR PER SHARE, AND AT THE DISCRETION
OF THE PROXIES ON ANY OTHER BUSINESS BROUGHT BEFORE THE MEETING.
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE)
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders, dated March 19, 1997, and the Proxy Statement furnished
therewith. Any proxy heretofore given to vote the shares covered herein is
hereby revoked.
NOTE: Please fill in, sign, and return this proxy
in the enclosed envelope. When signing as
Attorney, Executor, Administrator, Trustee,
or Guardian, please give full title to
such. If signer is a corporation, please
sign the full corporate name by authorized
officer. Joint Owners should sign
individually.
Date ____________________________________________
_________________________________________________
_________________________________________________
Shareholder sign name here exactly as it is stenciled hereon.
