SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
InterCounty Bancshares, Inc.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
InterCounty Bancshares, Inc.
________________________________________________________________________________
(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)(4) 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:
<PAGE>
INTERCOUNTY BANCSHARES, INC.
48 N. South Street
Wilmington, Ohio 45177
(513) 382-1441
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1997 Annual Meeting of Shareholders of
InterCounty Bancshares, Inc. ("InterCounty"), will be held at 48 N. South
Street, Wilmington, Ohio, on April 22, 1997, at 9:00 a.m., Eastern Time (the
"Annual Meeting"), for the purpose of electing five directors of InterCounty for
terms expiring in 1999 and transacting such other business as may properly come
before the Annual Meeting or any adjournments thereof. Such matters are more
completely set forth in the accompanying Proxy Statement.
Only shareholders of InterCounty of record at the close of business on
March 18, 1997, will be entitled to receive notice of and to vote at the Annual
Meeting and at any adjournments thereof. Whether or not you expect to attend the
Annual Meeting, we urge you to consider the accompanying Proxy Statement
carefully and to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR
SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM
MAY BE ASSURED. The giving of a Proxy does not affect your right to vote in
person in the event you attend the Annual Meeting.
By Order of the Board of Directors
April 7, 1997 James W. Foland, Secretary
<PAGE>
INTERCOUNTY BANCSHARES, INC.
48 N. South Street
Wilmington, Ohio 45177
(513) 382-1441
PROXY STATEMENT
PROXIES
The enclosed Proxy is being solicited by the Board of Directors of
InterCounty Bancshares, Inc. ("InterCounty"), an Ohio Corporation, for use at
the 1997 Annual Meeting of Shareholders of InterCounty to be held at 48 N. South
Street, Wilmington, Ohio, on April 22, 1997, at 9:00 a.m., Eastern Time, and at
any adjournments thereof (the "Annual Meeting"). Without affecting any vote
previously taken, the Proxy may be revoked by a shareholder by a later dated
proxy received by InterCounty before the Proxy is exercised or by giving notice
of revocation to InterCounty in writing before the Annual Meeting or in open
meeting. Attendance at the Annual Meeting will not, of itself, revoke a Proxy.
Each properly executed Proxy received prior to the Annual Meeting and not
revoked will be voted as specified thereon or, in the absence of specific
instructions to the contrary, will be voted FOR the election of S. Craig Beam,
James W. Foland, B. Anthony Williams, Darleen M. Myers and Robert A. Raizk as
directors of InterCounty for terms expiring in 1999.
Proxies may be solicited by the directors, officers and other employees of
InterCounty in person or by telephone, telecopy, telegraph or mail only for use
at the Annual Meeting, and such Proxies will not be used for any other meeting.
The cost of soliciting Proxies will be borne by InterCounty.
Only shareholders of record as of the close of business on March 18, 1997
(the "Voting Record Date"), are eligible to vote at the Annual Meeting and will
be entitled to cast one vote for each share owned. InterCounty's records
disclose that, as of the Voting Record Date, there were 1,542,075 votes entitled
to be cast at the Annual Meeting.
VOTE REQUIRED
The five nominees receiving the greatest number of votes will be elected as
directors. The presence, in person or by proxy, of a majority of the issued and
outstanding shares entitled to vote at the Annual Meeting is necessary to
constitute a quorum at the Annual Meeting. Under Ohio law, shares held by a
nominee for a beneficial owner which are represented in person or by proxy but
which are not voted ("non-votes") are counted as present for purposes of
establishing a quorum. Shares as to which the authority to vote is withheld and
non-votes are not counted toward the election of directors or toward the
election of the individual nominees specified on the form of proxy.
This Proxy Statement is first being mailed to shareholders of InterCounty
on or about April 7, 1997.
<PAGE>
VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the only
persons known to InterCounty to own beneficially more than five percent of
InterCounty's outstanding common shares as of February 28, 1997:
Percent of
Name and Address Amount Beneficially Common Shares
of Beneficial Owner Owned(1) Outstanding
________________________________________________________________________________
B. Anthony Williams(2) 224,098(2) 14.5%
6172 U. S. 22 East
Wilmington, Ohio 45177
Brooke A. Williams 85,621 5.6%
148 E. 30th Street
Apartment 5D
New York, New York 10016
Dana L. Williams 86,228 5.6%
General Delivery
Telluride, Colorado 81435
Lynn A. Williams 85,449 5.5%
524 N. 27th Street
Richmond, Virginia 23223
Beth Ellingwood 84,441 5.5%
325 West Sixth Street
Columbus, Ohio 43201
Wilmington College 83,632 5.4%
Fife Avenue
Wilmington, Ohio 45177
The National Bank and Trust Company 354,852(3) 23%
and InterCounty Bancshares, Inc.
Employee Stock Ownership Plan(3)
48 N. South Street
Wilmington, Ohio 45177
______________________
(1) Except as indicated for the shares held by the InterCounty Bancshares, Inc.
Employee Stock Ownership Plan (the "ESOP"), the beneficial owner has sole
voting and dispositive power.
(2) B. Anthony Williams is a director of InterCounty and The National Bank and
Trust Company (the "Bank").
(3) Such shares are held by the Bank as Trustee for the ESOP. Pursuant to the
ESOP, the Bank, as Trustee, has the power to vote in its sole discretion
all ESOP shares that have not been allocated to the accounts of
participants. At February 28, 1997, 95,087 shares had not been allocated.
The Trustee may dispose of shares held in the ESOP Trust only under limited
circumstances specified in the ESOP.
-2-
<PAGE>
The following table sets forth certain information with respect to the
number of common shares of InterCounty beneficially owned by each director of
InterCounty and each executive officer of InterCounty whose cash compensation
during 1996 exceeded $100,000 and by all directors and executive officers of
InterCounty as a group as of February 28, 1997:
<TABLE>
Amount and Nature of
Beneficial Ownership
Sole Voting and Shared Voting and Percent of Common
Name Investment Power Investment Power Shares Outstanding
____________________________________________________________________________________________
<S> <C> <C> <C>
S. Craig Beam 891 3,002 .3%
George F. Bush 2,655 -0- .2%
Charles L. Dehner 30,202(1) 14,105(2) 2.9%
James W. Foland 7,105 -0- .5%
Georgia H. Miller 498 -0- -%
Darleen M. Myers 4,234 -0- .3%
Robert A. Raizk 2,260 -0- .1%
Timothy L. Smith 40,683(3) 16,596(4) 3.7%
B. Anthony Williams 224,098 -0- 14.5%
R. James Parker 5,894(5) 2,940(6) .6%
All directors and officers
of InterCounty as a group 328,237(7) 60,118(8) 21.3%
(13 persons)
</TABLE>
______________________
(1) Includes 21,700 shares that may be acquired currently upon the exercise of
options.
(2) Consists of shares allocated to Mr. Dehner's ESOP account, with respect to
which Mr. Dehner has voting but not investment power.
(3) Includes 30,302 shares that may be acquired currently upon the exercise of
options.
(4) Consists of shares allocated to Mr. Smith's ESOP account, with respect to
which Mr. Smith has voting but not investment power.
(5) Includes 3,500 shares that may be acquired currently upon the exercise of
options.
(6) Consists of shares allocated to Mr. Parker's ESOP account, with respect to
which Mr. Parker has voting but not investment power.
(7) Includes 5,611 shares owned with sole voting and investment power by four
executive officers of the Bank, including Mr. Parker, who may be deemed to
perform policy making functions for InterCounty and 10,320 shares that may
be acquired currently by such persons upon the exercise of options.
(8) Includes 482 shares with respect to which the four executive officers share
voting and investment power and 26,418 shares allocated to the ESOP
accounts of such persons, with respect to which such persons have voting
power.
-3-
<PAGE>
BOARD OF DIRECTORS
Election of Directors
The Articles of Incorporation of InterCounty provide for a Board of
Directors consisting of not less than seven nor more than eleven directors, such
number to be fixed or changed by the Board of Directors or the shareholders. The
Board of Directors currently consists of nine directors divided into two
classes. Each class serves for a two-year period. Each of the directors of
InterCounty is also a director of the Bank.
In accordance with Section 8.04 of the Articles of Incorporation of
InterCounty, nominees for election as directors may be proposed only by the
directors or by any shareholder entitled to vote for directors if such
shareholder makes a timely notice to the Secretary of InterCounty. To be timely,
a shareholder's notice must be delivered to or mailed and received at the
principal executive offices of InterCounty not less than sixty days nor more
than ninety days prior to the meeting; provided, however, that in the event that
less than thirty-five days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders of an annual meeting held on a date
other than the date fixed by the Code of Regulations of InterCounty, notice by
the shareholder must be received not later than the close of business on the
seventh day following the earlier of the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. Such shareholder's
notice shall set forth (a) as to each person who is not an incumbent director
whom a shareholder proposes to nominate for election as a director (i) the name,
age, business address and residence address of such person; (ii) the principal
occupation or employment of such person; (iii) the class and number of shares of
InterCounty which are beneficially owned by such person; and (iv) any other
information relating to such person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended; and (b) as to the
shareholder giving the notice, (i) the name and record address of such
shareholder and (ii) the class and number of shares of InterCounty which are
beneficially owned by such shareholder. Such notice shall be accompanied by the
written consent of each proposed nominee to serve as a director of InterCounty,
if elected.
The Board of Directors proposes the election of the following persons to
terms which will expire in 1999:
Position(s) Director
Name Age(1) Held Since
________________________________________________________________________________
S. Craig Beam 45 Director 1990
James W. Foland 75 Director and Secretary 1983
B. Anthony Williams 62 Director and Chairman of the 1981
Board
Darleen M. Myers 64 Director 1995
Robert A. Raizk 42 Director 1995
______________________
(1) As of February 28, 1997.
If any nominee is unable to stand for election, the Proxies will be voted
for such substitute as the Board of Directors recommends.
-4-
<PAGE>
The following directors will continue to serve after the Annual Meeting for
the terms indicated:
<TABLE>
Director Term
Name Age(1) Position(s) Held Since Expires
__________________________________________________________________________________________________
<S> <C> <C> <C> <C>
George F. Bush 61 Director 1988 1998
Charles L. Dehner 49 Director and Executive Vice 1989 1998
President of InterCounty and the
Bank and Treasurer of InterCounty
Georgia H. Miller 59 Director 1990 1998
Timothy L. Smith 46 Director, Chief Executive Officer 1989 1998
and President of InterCounty and
the Bank
------------------------
(1) As of February 28, 1997.
</TABLE>
S. Craig Beam has been the President of Melvin Stone Company since 1989 and
served as General Manager before being elected President. Mr. Beam is also the
President of MC Trucking and a Trustee of Wilmington College.
James W. Foland, the Secretary of InterCounty, was employed by the Bank
from 1956 until his retirement as Senior Vice President in 1983.
B. Anthony Williams has been Chairman of the Board of InterCounty since
1986. Mr. Williams is also self-employed in agribusiness.
Darleen M. Myers is a Clinton County Commissioner. From 1993 to 1994, Ms.
Myers served as the Director of the Rainbow Village Child Day Care Center, and
from 1976 to 1993, she was an Extension Agent for The Ohio Cooperative Extension
Services.
Robert A. Raizk has been the President and Chief Executive Officer of The
Wilmington Iron & Metal Co., Inc., since August 1990. From 1985 to 1990, Mr.
Raizk was a commercial real estate broker with The Tipton Group, Inc.
George F. Bush has been the President and owner of Bush Auto Place, Inc.,
since 1970 and Bush Leasing, Inc., since 1971. Mr. Bush is also a member of the
Clinton Memorial Hospital Board of Directors.
Charles L. Dehner has been the Executive Vice President of InterCounty
since 1993, Treasurer of InterCounty since 1984 and Executive Vice President of
the Bank since 1991. Mr. Dehner was Senior Vice President and Controller of the
Bank from 1988 to 1991.
Georgia H. Miller, formerly Manager of Volunteer Services and Patient
Representative for Clinton Memorial Hospital, retired in 1993. Ms. Miller serves
as a volunteer for Clinton Memorial Hospital and Auxiliary and is a guardian ad
litem for the Juvenile Court of Clinton County. Ms. Miller is also a member of
the Board of Habitat for Humanity.
Timothy L. Smith has been the President and Chief Executive Officer of
InterCounty and the Bank since 1989. From July 1988 until October 1989, Mr.
Smith was a Senior Vice President and Senior Loan Officer of the Bank. He is
also Chairperson of Chatfield College.
-5-
<PAGE>
Meetings of Directors
The Board of Directors of InterCounty met 12 times for regularly scheduled
and special meetings during the fiscal year ended December 31, 1996. Each
director attended at least 75% of such meetings of the Board of Directors.
Each director of InterCounty is also a director of the Bank. The Board of
Directors of the Bank met 12 times for regularly scheduled and special fiscal
year ended December 31, 1996. Each director attended at least 75% of the
aggregate of such meetings and all meetings of committees of the Board of
Directors of the Bank of which such director was a member.
Committees of Directors
The Board of Directors of InterCounty has no committees. The Board of
Directors of the Bank has an Audit Committee, a Trust Policy Committee and a
Compensation Committee, but no nominating committee.
The Audit Committee is responsible for an annual examination of the Bank to
determine whether the Bank is in a sound condition and whether adequate internal
controls and procedures are being maintained and for reporting the results of
the examination and recommendations for changes to the Board of Directors. The
Committee may make such examination or cause the examination to be made by an
auditor. The members of the Audit Committee are Messrs. Beam, Foland and Raizk
and Ms. Miller. The Audit Committee met twice in 1996.
The Trust Policy Committee is responsible for the review of the
administration, policies, investment holdings, investment performance, operating
results, earnings, conduct and reports of examinations and audits of the Trust
Department. The members of such committee are Messrs. Bush, Dehner, Smith and
Williams and Ms. Myers. The Trust Policy Committee met 11 times during 1996.
The Compensation Committee recommends annually to the full Board of
Directors the compensation for the Bank's executive officers. The members of the
Compensation Committee are Messrs. Beam, Bush, Foland and Raizk and Mmes. Miller
and Myers. The Compensation Committee met once in 1996.
EXECUTIVE OFFICERS
The only executive officers of InterCounty are Messrs. Dehner, Foland,
Smith and Williams.
In addition to Mr. Smith and Mr. Dehner, the following persons are
executive officers of the Bank and may be deemed to participate in policy making
for InterCounty:
Name Age(1) Positions Held During Last Five Years
________________________________________________________________________________
Andrew J. McCreanor 47 Senior Vice President, Director of Marketing
and Customer Service; formerly Vice President,
Branch Administrator
R. James Parker 58 Executive Vice President, Senior Loan Officer;
prior to October 1991, Executive Vice President
of Bank One of Cincinnati
Walter H. Rowsey 48 Senior Vice President, Branch Administrator;
formerly Vice President, Loan Division Manager
Howard T. Witherby 41 Senior Vice President, Operations Division
Manager; formerly Vice President
_____________________________
(1) As of February 28, 1997.
-6-
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table presents certain information regarding the cash
compensation received by the chief executive officer of InterCounty and the Bank
and each executive officer of InterCounty or the Bank whose cash compensation
exceeded $100,000 during the fiscal years ended December 31, 1996, 1995 and
1994:
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation(1) Awards
____________________________________________________________________________
Restricted Securities
Other Annual Stock Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Award(s)($) Options/SARs(#) Compensation($)
____________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Timothy L. Smith 1996 $167,374(2) $ 67,697 $ 400(5) -0- -0-/-0- $ 1,426(6)
Chief Executive Officer, 1995 156,000(3) 43,036 401(5) -0- 5,000/-0- 27,148
President of 1994 138,000(4) 56,169 559(5) -0- 3,253/-0- 21,007(8)
InterCounty and Bank
Charles L. Dehner 1996 117,459(2) 35,257 520(5) -0- -0-/-0- 1,644(6)
Treasurer, 1995 109,795(9) 27,513 521(5) -0- 3,500/-0- 24,387
Executive Vice 1994 104,125(4) 29,290 521(5) -0- -0-/-0- 18,729(8)
President of
InterCounty,
Executive Vice President
of Bank
R. James Parker 1996 110,834 35,917 685(5) -0- -0-/-0- 3,048(6)
Executive Vice 1995 105,545 28,081 685(5) -0- 3,500/-0- 21,322
President, Senior Loan 1994 101,125 31,844 685(5) -0- -0-/-0- 17,211(8)
Officer of Bank
_________________________
</TABLE>
(1) Cash compensation does not include amounts attributable to other
miscellaneous benefits received by executive officers. The cost to
InterCounty and the Bank of providing such benefits to each of the
executive officers listed above during the years ended December 31, 1996,
1995 and 1994, was less than 10% of the officer's cash compensation, and
such cost for all executive officers as a group was less than 10% of the
group's aggregate cash compensation.
(2) Includes $6,625 of director's fees.
(3) Includes $4,500 of director's fees.
(4) Includes $3,000 of director's fees.
(5) Consists of amounts reimbursed to such executive officers for taxes paid on
whole life insurance premiums paid for the benefit of such executive
officers.
(6) Consists of premiums paid on whole life insurance for the benefit of the
officer. At the latest practicable date, the number of shares to be
allocated to the accounts of the ESOP participants for 1996 had not yet
been determined.
(7) Consists of premiums paid in the amount of $1,426, $1,644 and $3,048 paid
on whole life insurance for the benefit of Messrs. Smith, Dehner and
Parker, respectively, and $25,722, $22,743, and $18,274 representing the
aggregate value at the date of allocation of 967, 855 and 687 shares
allocated to the ESOP accounts of Messrs. Smith, Dehner and Parker,
respectively.
(Footnotes continued on next page)
-7-
<PAGE>
(8) Consists of premiums in the amount of $1,426, $1,644 and $3,048 paid on
whole life insurance for the benefit of Messrs. Smith, Dehner and Parker,
respectively, and $19,581, $17,085 and $14,163 representing the aggregate
value at the date of allocation of 918, 801 and 644 shares, respectively,
allocated to the ESOP accounts of Messrs. Smith, Dehner and Parker,
respectively.
(9) Includes $4,250 of director's fees.
The following table sets forth information regarding the number and value
of unexercised options held at December 31, 1996, by the persons named in the
Summary Compensation Table:
<TABLE>
Aggregated Option/SAR Exercises In Last Fiscal Year and
12/31/96 Option/SAR Values
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs at In-the-Money Options/SARs at
12/31/96(#) 12/31/96(1)
Shares Acquired Value
Name on Exercise (#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
______________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Timothy L. Smith -0- -0- 24,702/11,551 $377,314/119,520
Charles L. Dehner -0- -0- 17,500/7,000 $275,011/ 77,284
R. James Parker -0- -0- 2,800/4,200 $31,948/ 28,882
____________________________
</TABLE>
(1) An option is "in-the-money" if the fair market value of the underlying
stock exceeds the exercise price of the option. The figure represents the
value of such options, determined by multiplying the number of unexercised
options by the difference between the exercise price and the fair market
value of InterCounty's common shares on December 31, 1996, of $27.25 per
share for InterCounty's common shares at December 31, 1996. No established
market for InterCounty's common shares existed at December 31, 1996,
InterCounty's common shares are not traded on any securities exchange and
the prices at which its shares are traded are not quoted by a national
quotation service.
Defined Benefit Plan
InterCounty sponsors a defined benefit pension plan (the "Pension Plan")
covering all employees age 21 or older who have completed at least one year of
service to InterCounty.
Due to an amendment of the Pension Plan in 1989, the retirement benefit
payable upon retirement at or after age 65 depends upon whether the employee had
credited service with InterCounty or the Bank before September 30, 1989. If the
employee had no credited service before September 30, 1989, the annual
retirement benefit will be equal to (1) 1.25% of annual compensation for each
plan year in which the employee was a participant in the Pension Plan and was
credited with a year of service, plus (2) for each plan year in which the
participant was credited with a year of service, 0.55% of that portion of the
employee's annual compensation that was above the employee's "Social Security
Covered Compensation," which is based upon the Social Security Taxable Wage Base
published by the federal government and which is changed annually.
If the employee had credited service before September 30, 1989, the annual
retirement benefit will be equal to (1) an amount determined by applying the
above formula for years of service after September 30, 1989; plus (2) the
greater of (a) 60% of the employee's average monthly compensation for the five
calendar years in which the employee's compensation was its highest preceding
the employee's 65th birthday or September 30, 1989 (whichever is earlier), less
50% of the employee's primary Social Security benefits payable under Title II of
the Federal Social Security Act, the difference of which is reduced
proportionately for the number of years less than 30 that the employee worked;
or (b) 1.5% of the employee's average monthly compensation for the three
calendar years in which the employee's compensation was its highest preceding
the employee's 65th birthday or September 30, 1989 (whichever is earlier);
provided, however, that in making such computation in this clause (b), the
employee's compensation for any calendar year after 1980 will not exceed the
employee's 1980 calendar year compensation.
-8-
<PAGE>
Under either formula, the credited years of service will be limited to 30.
In addition, for plan years beginning in 1987 through 1993, the term
"compensation" means all compensation paid or accrued up to $200,000 per year,
as adjusted for cost of living increases, and for years after 1993,
"compensation" includes all compensation paid or accrued up to $150,000, as
adjusted annually for cost of living increases.
The estimated annual benefit payable at age 65 pursuant to the Pension Plan
to each of Messrs. Smith, Dehner and Parker is $66,041, $52,736 and $27,003,
respectively.
Director Compensation
InterCounty does not pay director's fees. Each director of InterCounty who
is not a full-time employee of the Bank currently receives for services as a
director of the Bank a fee of $5,500 per year and $500 for each meeting of the
Board of Directors attended. Directors of the Bank who are full-time employees
of the Bank receive $3,000 per year and $375 for each meeting of the Board of
Directors attended.
Compensation Committee Report
InterCounty Bancshares, Inc. (the "Company"), is a bank holding company
which directly owns all of the outstanding capital stock of The National Bank
and Trust Company (the "Bank"). The Company's business consists primarily of the
business of the Bank. The financial results of the Company depend primarily upon
the Bank's financial results.
The Compensation Committee of the Board of Directors of the Bank (the
"Committee") is composed exclusively of non-employee directors. The Committee's
philosophy is to tie executive compensation to the achievement of the Bank's
goals and the resulting performance of the Company. The Committee reviews
executive performance and compensation and makes recommendations to the full
Board of Directors of the Bank for approval.
The Committee's goal is to accomplish the following specific objectives
through the use of base salary and incentive plans:
(1) Motivate personnel to perform and succeed according to the goals
outlined in the Bank's annual business plan;
(2) Retain key personnel critical to the long-term success of the Bank;
and
(3) Utilize incentive plans, such as stock options, that reward executives
for corporate success and align the interests of management with those
of the shareholders;
Base Salary. Base Salary is the foundation of the Bank's compensation
program, providing income on which the executive can rely, but which is not so
large as to eliminate the executive's motivation to work hard to increase
shareholder value. An executive's base salary is directly related to his or her
position, job responsibilities, performance and contribution to the Bank's
success. The Committee reviews peer group information with respect to
compensation and company performance on a regional and national basis to ensure
salaries are competitive and in line with the industry.
Incentive Plan. The Bank also has an incentive compensation plan pursuant
to which awards are based on the Bank's achievement of predetermined goals
relating to return on average equity and return on average assets, and on the
participant's achievement of goals relating to his or her individual
contributions to the Bank. Threshold, target and maximum goals for corporate
performance are generally established at the beginning of each fiscal year.
All awards are established as a percentage of each participant's base
salary. Awards differ due to the contribution of the individual to the Bank's
success. Participants (except the Chief Executive Officer) earn awards by
achieving individual goals and assisting in achieving the Bank's goals. The more
control and influence a participant has on either individual goals or Bank
goals, the greater the participant's weighting on that particular factor. The
Chief Executive Officer's incentive plan awards are based solely on the
achievement of the Bank's goals.
If individual goals are achieved but the Bank fails to achieve its goals,
no incentive award will be made to any participant.
Stock Options. The Committee annually reviews the appropriateness of
granting stock options to senior management. The purposes of this long-term
incentive compensation are to provide an incentive to officers and key employees
to promote the success of the business and thereby increase shareholder value,
and to attract and retain the best available personnel. The Committee grants
options based on an individual's performance and contribution to the Bank's
success. All options granted to date have a term of 10 years and may be first
exercised to the extent of one-fifth each year for the first five years after
the date of grant.
-9-
<PAGE>
CEO Compensation. Timothy L. Smith has been the President and the Chief
Executive Officer ("CEO") of the Company since October 1989. The Committee used
the executive compensation policy described above to determine Mr. Smith's
compensation.
In setting the base salary, cash incentive award and amount of stock
options, the Committee made an overall assessment of Mr. Smith's leadership in
achieving the Bank's long-term strategic and business goals. The Bank achieved
its corporate goals, including those related to return on equity and return on
assets, and Mr. Smith was determined to have contributed substantially to the
Bank's success.
Compensation Committee
S. Craig Beam Georgia H. Miller
George F. Bush Darleen M. Myers
James W. Foland Robert A. Raizk
Compensation Committee Interlocks and Insider Participation
The Board of Directors of the Bank has a Compensation Committee whose
members are Messrs. Beam, Bush, Foland and Raizk and Mmes. Myers and Miller.
None of such persons are employees of the Bank or InterCounty.
Performance Graph
The following line graph compares the yearly percentage change in
InterCounty's cumulative total shareholder return against the cumulative return
of a broad index of The Nasdaq National Market and an index of banks with total
assets of $250 million to $500 million. The graph assumes the investment of $100
on November 30, 1993. Cumulative total shareholder return is measured by
dividing (i) the sum of (A) the cumulative amount of dividends for the
measurement period, assuming dividend reinvestment, and (B) the difference
between the price of InterCounty's common shares at the end and at the beginning
of the measurement period; by (ii) the price of InterCounty's common shares at
the beginning of the measurement period.
<PAGE>
[Performance Graph Represented by the Following Chart]
<TABLE>
Period Ending
11/30/93 6/30/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96
______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
InterCounty Bancshares,
Inc. 100.00 100.62 123.63 127.20 129.59 161.85 148.49
NASDAQ - Total US 100.00 93.86 100.47 125.28 142.08 160.88 174.76
SNL Banks ($250M to
$500M) Index 100.00 110.16 109.04 124.40 147.16 162.96 191.08
</TABLE>
-10-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank occasionally makes loans of various types to directors, officers
and employees of the Bank. Any of such loans outstanding during the last two
years were made in the ordinary course of business, on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other Bank customers and did not involve more
than the normal risk of collectibility or present other unfavorable features.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, InterCounty's directors and executive
officers and persons holding more than ten percent (10%) of the common shares of
InterCounty are required to report their ownership of common shares and changes
in such ownership to the Securities and Exchange Commission (the "SEC") and
InterCounty. The SEC has established specific due dates for such reports. Based
upon a review of such reports, InterCounty must disclose any failures to file
such reports timely in Proxy Statements used in connection with annual meetings
of shareholders. The ESOP failed to timely file three reports over the last
three years, and Messrs. Beam and Raizk filed Forms 4 late in 1996.
AUDITORS
The Board of Directors has selected J.D. Cloud & Co. as the auditors of
InterCounty for the current fiscal year. J.D. Cloud & Co. has audited the books
of InterCounty since 1982. Management expects that a representative of J.D.
Cloud & Co. will be present at the Annual Meeting, will have the opportunity to
make a statement if he or she so desires and will be available to respond to
appropriate questions.
PROPOSALS OF SECURITY HOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in InterCounty's
proxy statement for the 1998 Annual Meeting of Shareholders should be sent to
InterCounty by certified mail and must be received by InterCounty not later than
December 2, 1997.
Management knows of no other business which may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed Proxy
to vote such Proxy in accordance with their best judgment on any other matters
which may be brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
April 7, 1997 James W. Foland, Secretary
-11-
<PAGE>
REVOCABLE PROXY
INTERCOUNTY BANCSHARES, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of InterCounty Bancshares, Inc.
(the "Company"), hereby constitutes and appoints George F. Bush, Charles L.
Dehner, Georgia H. Miller and Timothy L. Smith, or any of them, the Proxy or
Proxies of the undersigned, with full power of substitution and resubstitution,
to attend the Annual Meeting of Shareholders of the Company to be held on April
22, 1997, at 48 N. South Street, Wilmington, Ohio, at 9:00 a.m., Eastern Time,
and at any adjournment or adjournments thereof, and to vote all of the common
shares of the Company which the undersigned is entitled to vote at such Annual
Meeting or at any adjournment or adjournments thereof on each of the following
proposals, which are described in the accompanying Proxy Statement:
1. The election of five (5) directors to serve for a term of two (2) years
each.
______ FOR election as directors ______ WITHHOLD AUTHORITY
of the Company of all the to vote for all nominees listed
nominees listed below below.
(except as marked to the
contrary below).*
S. Craig Beam
James W. Foland
B. Anthony Williams
Darleen M. Myers
Robert A. Raizk
*(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list above).
2. In their discretion, upon such other business as may properly come before
the Annual Meeting or any adjournment or adjournments thereof.
WHERE A CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED OR NOT VOTED AS SPECIFIED. IF NO CHOICE IS INDICATED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED
IN ITEM NO. 1 AS DIRECTORS OF THE COMPANY AND IN THE DISCRETION OF THE PROXIES
ON ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENT OR ADJOURNMENTS THEREOF.
<PAGE>
All proxies previously given by the undersigned are hereby revoked. The
undersigned acknowledges receipt of the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement for the April 22, 1997, meeting.
Please sign exactly as your name appears hereon.
When shares are registered in two names, both
shareholders should sign. When signing as
executor, administrator, trustee, guardian,
attorney or agent, please give full title as such.
If the shareholder is a corporation, please sign
in full corporate name by President or other
authorized officer. If the shareholder is a
partnership, please sign in partnership name by
authorized person. (Please note any change of
address on this proxy.)
__________________________________________________
Signature of Shareholder(s)
__________________________________________________
Signature of Shareholder(s)
Dated: ______________________, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INTERCOUNTY
BANCSHARES, INC. PLEASE FILL IN, DATE, SIGN AND RETURN IT PROMPTLY USING THE
ENCLOSED ENVELOPE.
If you plan to attend the Annual Meeting, please check here. ____
