<PAGE> 1
================================================================================
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>
OAK HILL FINANCIAL, INC.
(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)(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> 2
OAK HILL FINANCIAL, INC.
14621 State Route 93
Jackson, Ohio 45640
NOTICE OF ANNUAL MEETING
OF
SHAREHOLDERS
TO BE HELD APRIL 29, 1997
Jackson, Ohio
March 31, 1997
To the Shareholders:
The Annual Meeting of Shareholders of Oak Hill Financial, Inc. (the
"Corporation"), will be held at the Ohio State University Extension South
District Office, 17 Standpipe Road, Jackson, Ohio 45640, on April 29, 1997, at
1:00 p.m., local time, for the following purposes:
1. To elect the following four Directors for terms expiring in 1999
(Class I), as successors to the class of Directors whose terms
expire in 1997: Evan E. Davis, C. Clayton Johnson, John D. Kidd,
and Richard P. LeGrand.
2. To ratify the appointment of Grant Thornton LLP, independent
auditors, as auditors for the Corporation for the fiscal year
1997.
3. To approve and adopt the Corporation's Amended and Restated 1995
Stock Option Plan described in the accompanying Proxy Statement.
4. To consider and act upon such other matters as may properly come
before the Annual Meeting or any adjournment thereof.
On March 25, 1997 there were 2,873,500 common shares outstanding. Each
shareholder is entitled to one vote for each common share held regarding each
matter properly brought before the meeting. Holders of record of the Corporation
at the close of business on March 25, 1997, are entitled to notice of and to
vote at the Annual Meeting and at any adjournment thereof.
By Order of the Board of Directors,
H. Tim Bichsel
Secretary and Treasurer
EVERY SHAREHOLDER'S VOTE IS IMPORTANT. IF YOU ARE UNABLE TO BE PRESENT AT THE
ANNUAL MEETING, YOU ARE REQUESTED TO COMPLETE AND RETURN PROMPTLY THE
ENCLOSED PROXY SO THAT YOUR SHARES WILL BE REPRESENTED. A STAMPED, ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
- 1 -
<PAGE> 3
OAK HILL FINANCIAL, INC.
14621 State Route 93
Jackson, Ohio 45640
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
INTRODUCTION
On behalf of the Board of Directors of Oak Hill Financial Inc. (the
"Corporation"), a proxy is solicited from you to be used at the Corporation's
Annual Meeting of Shareholders ("Annual Meeting") to be held April 29, 1997, at
1:00 p.m., local time, at the Ohio State University Extension South District
Office, 17 Standpipe Road, Jackson, Ohio 45640. This Proxy Statement is being
mailed on or about March 31, 1997.
Proxies in the form enclosed herewith are being solicited on behalf of
the Corporation's Board of Directors. Proxies which are properly executed and
returned will be voted at the Annual Meeting as directed; proxies properly
executed and returned which indicate no direction will be voted in favor of the
proposals set forth in the notice attached hereto and more fully described in
this Proxy Statement. Proxies indicating an abstention from voting on any matter
will be tabulated as a vote withheld on such matter and will be included in
computing the number of shares present for purposes of determining the presence
of a quorum for the Annual Meeting. If a broker indicates on the form of proxy
that it does not have discretionary authority as to certain common shares to
vote on a particular matter, those common shares will be considered as present
but not entitled to vote with respect to that matter. Any shareholder giving the
enclosed proxy has the power to revoke the same prior to its exercise by filing
with the Secretary of the Corporation a written revocation or duly executed
proxy bearing a later date, or by giving notice of revocation in open meeting.
VOTING SECURITIES
As of March 25, 1997, the record date fixed for the determination of
shareholders entitled to vote at the Annual Meeting, there were 2,873,500 shares
of the Corporation's common stock outstanding. Each such share is entitled to
one vote on each matter properly coming before the Annual Meeting.
OWNERSHIP OF COMMON STOCK BY PRINCIPAL SHAREHOLDERS
As of February 28, 1997, persons known by the Corporation to own
beneficially more than 5% of the outstanding common shares of the Corporation
are set forth below.
<TABLE>
<CAPTION>
NO. OF SHARES OF COMMON
-----------------------
NAME(1) STOCK BENEFICIALLY OWNED(2) PERCENTAGE OF CLASS(3)
------- --------------------------- ----------------------
<S> <C> <C>
Evan E. Davis 1,162,200(4) 40.45%
John D. Kidd 583,194(4) 20.30%
Donald M. Rice 147,300(4) 5.13%
- -----------------------------
<FN>
(1) The address of Evan E. Davis, John D. Kidd, and Donald M. Rice is c/o
Oak Hill Financial, Inc., 14621 State Route 93, Jackson, Ohio 45640.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attributes beneficial
ownership of securities to persons who possess sole or shared voting
power and/or investment power with respect to those securities.
(3) "Percentage of class" is calculated by dividing the number of shares
beneficially owned by the total number of outstanding shares of the
Corporation on February 28, 1997 plus the number of shares such person
has the right to acquire within 60 days of February 28, 1997.
(4) Includes 5,000 shares which could be acquired by Messrs. David and Kidd,
respectively, and 1,000 shares which could be acquired by Mr. Rice under
stock options exercisable within 60 days of February 28, 1997. Also,
includes 2,200 shares held by a Trust as to which Messrs. David and Kidd
are Trustees and partial beneficiaries.
</TABLE>
- 2 -
<PAGE> 4
OWNERSHIP OF COMMON STOCK BY MANAGEMENT
As of February 28, 1997, the directors of the Corporation, the
executive officers of the Corporation named in the Summary Compensation Table,
and all executive officers and directors of the Corporation as a group,
beneficially owned common shares of the Corporation as set forth below.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership Percentage
Name of Common Stock(1) of Class
---- --------------------- ----------
<S> <C> <C>
Evan E. Davis, Chairman and Director 1,162,200(3)(4) 40.45%
John D. Kidd, President, Chief Executive Officer and
Director 583,194(3)(4) 20.30%
Richard P. LeGrand, Executive Vice President and
Director 52,150(3) 1.81%
H. Tim Bichsel, Secretary and Treasurer 16,100(3) *
David G. Ratz, Vice President 8,350(3) *
Barry M. Dorsey, Ed.D., Director 7,000(3) *
C. Clayton Johnson, Director 0 *
Rick A. McNelly , Director 11,012(3) *
Donald R. Seigneur, Director 4,000(3) *
H. Grant Stephenson, Director 4,700(3) *
All directors and executive officers 1,849,844(5) 64.38%
as a group (10 persons)
<FN>
- ----------
(1) For purposes of the above table, a person is considered to "beneficially
own" any shares with respect to which he exercises sole or shared voting
or investment power or as to which he has the right to acquire the
beneficial ownership within 60 days of February 28, 1997. Unless
otherwise indicated, voting power and investment power are exercised
solely by the person named above or shared with a members of his
household.
(2) "Percentages of class" is calculated by dividing the number of shares
beneficially owned by the total number of outstanding shares of the
Corporation on February 28, 1997 plus the number of shares such person
has the right to acquire within 60 days of February 28, 1997. An "*"
indicates less than one percent (1%).
(3) Includes 5,000 shares which could be acquired by Messrs. Davis and Kidd,
respectively, 4,000 shares which could be acquired by Mr. LeGrand, 3,000
shares which could be acquired by Mr. Bichsel and 2,000 shares which
could be acquired by Messrs. Dorsey, McNelly, Seigneur and Stephenson,
respectively, under stock options exercisable within 60 days of February
28, 1997.
(4) Also includes 2,200 shares held by Trusts as to which Messrs. Davis and
Kidd are Trustees and partial beneficiaries.
(5) Includes 31,600 shares which may be purchased under stock options
exercisable within 60 days of February 28, 1997.
</TABLE>
ELECTION OF DIRECTORS
The Board of Directors has nominated four persons for a two-year term
(Class I). The terms of the remaining directors in Class II will continue as
indicated below. The accompanying proxy will be voted for the election of those
four persons named under Class I in the following table unless otherwise
directed. In the event that any of the nominees
- 3 -
<PAGE> 5
for director shall become unavailable (which management does not expect), the
proxies may be voted for a substitute nominee at the discretion of those named
as proxies. The election of each nominee requires the favorable vote of a
plurality of all votes cast by the holders of the Corporation's common stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF EACH NOMINEE FOR CLASS I DIRECTOR.
<TABLE>
<CAPTION>
Position with Corporation and/or Principal Occupation or
Name and Age Employment For the Last Five Years Director Since
---------------------------------- --------------
NOMINEES - TERMS
EXPIRE IN 1999 (CLASS I):
<S> <C> <C>
Evan E. Davis, 63 Chairman of the Corporation since its formation in 1981. He 1981
served as President of the Corporation from 1981 to June
1995. Mr. Davis' family founded Oak Hill Banks (the
"Bank") in 1902, and Mr. Davis has served as a Director of
the Bank since 1957.
C. Clayton Johnson, 52 Partner in the law firm of C. Clayton Johnson Co., L.P.A., 1997
Portsmouth, Ohio. He has served as a Director of the
Corporation since March 1997.
John D. Kidd, 57 President of the Corporation since June 1995 and as Chief 1981
Executive Officer since 1981. He has served as President of
the Bank since October 1991 and served as Chief Executive
Officer and Executive Vice President since joining the Bank
in 1970.
Richard P. LeGrand, 56 Executive Vice President of the Corporation since October 1987
1991. He has served as a Director of the Corporation since
January 1987 and as a Director of the Bank since July 1993.
Mr. LeGrand served as Senior Vice President of the Bank
from February 1986 to October 1991, and as a Vice President
from June 1985 until February 1986.
CONTINUING DIRECTORS -
TERMS EXPIRE IN 1998
(CLASS II):
Barry M. Dorsey, Ed.D, 53 President of the University of Rio Grande and Rio Grande 1995
Community College since July 1991. Mr. Dorsey served as
Associate Director from July 1980 to July 1990 and as
Deputy Director from July 1990 to June 1991 of the State
Council of Higher Education for Virginia.
Rick A. McNelly, 39 Secretary and Treasurer of Innovative Financial Services 1995
Agency, Inc., an employee benefits agency, since 1981.
Donald R. Seigneur, 44 Partner in the public accounting firm of Whited & Seigneur, 1995
Certified Public Accountants, Chillicothe, Ohio since 1979.
H. Grant Stephenson, 47 Partner in the law firm of Porter, Wright, Morris & Arthur, 1995
Columbus, Ohio since 1986.
</TABLE>
- 4 -
<PAGE> 6
MEETINGS OF THE BOARD OF DIRECTORS
AND COMMITTEES OF THE BOARD
During the last fiscal year, the Board of Directors held four regularly
scheduled meetings. All of the incumbent directors and each nominee standing for
re-election attended more than 75% of the regularly scheduled meetings during
the last fiscal year.
Each director received $500 per meeting attended as a director of the
Corporation. No compensation is paid for meetings of committees. Pursuant to the
1995 Stock Option Plan, each non-employee director who is a member of the Stock
Option and Compensation Committee receives annually on the first business day
after each Annual Meeting of shareholders (provided the director is still a
director on such date), an option to purchase 1,000 shares of the corporation's
common stock. The exercise price for each option granted is 100% of the fair
market value on the date of grant.
The Board of Directors has a standing Audit Committee, and a standing
Stock Option and Compensation Committee. A committee of the whole acts as the
Nominating Committee for the Board.
The Audit Committee makes recommendations to the Board of Directors
concerning the selection and engagement of the Corporation's independent
auditors and reviews with them the scope and status of the audit, the fees for
services performed by the firm, and the results of the completed audit. The
Audit Committee also reviews and discusses with the internal audit department,
management and the Board of Directors, such matters as accounting policies,
internal controls and procedures for preparation of financial statements. The
members of the Audit Committee are Messrs. Seigneur, Dorsey and Stephenson. The
Audit Committee held no meetings during the last fiscal year.
The Stock Option and Compensation Committee (the "Committee") makes
recommendations to the Board of Directors with respect to the compensation of
the executive officers of the Corporation and with respect to the grant of stock
options. The members of the Committee are Messrs. Seigneur, McNelly and
Stephenson. The Committee held one meeting during the last fiscal year, and all
members attended.
EXECUTIVE OFFICERS
The officers of the Corporation are elected annually by the Board of
Directors and serve at the pleasure of the Board. In addition to Evan E. Davis,
Chairman of the Board; John D. Kidd, President and Chief Executive Officer;
Richard P. LeGrand, Executive Vice President, the following persons are officers
of the Corporation:
H. Tim Bichsel, age 56, has served as Secretary and Treasurer of the
Corporation since February 1995. He served as Vice President of the Corporation
from February 1994 to February 1995. Mr. Bichsel has served as Executive Vice
President and Secretary of the Bank since February 1996. From April 1993 to
February 1996 he served as Senior Vice President and Secretary. From February
1992 to April 1993 he served as a computer software specialist for Peerless
Systems, Inc., a banking computer software company. Prior thereto, Mr. Bichsel
was employed in a variety of positions, most recently Senior Vice President and
Secretary with Fifth Third Bank of Southern Ohio, formerly known as First
Security Bank of Hillsboro, Ohio, from 1973 to November 1991.
David G. Ratz, age 39, has served as Vice President of the Corporation
since October 1995. From December 1986 to September 1995, he served as a
marketing and human relations consultant to community banking organizations as a
Vice President of Young & Associates, Kent, Ohio.
- 5 -
<PAGE> 7
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation
paid during the last three completed fiscal years by the Corporation and its
subsidiaries to the Chief Executive Officer, and the two other executive
officers of the Corporation whose total salary and bonus annually exceed
$100,000 for services in all capacities for the Corporation:
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
<CAPTION>
Long Term
Compensa-
Annual Compensation tion Award
----------------------------------------------------- ----------------
(a) (e) (g) (i)
Name and Principal (b) (c) (d) Other Annual Securities All Other
------------------ Year Salary Bonus Compensation(1) Underlying Compensation(3)
Position ---- ------ ----- --------------- Options(2) ---------------
-------- ------------
<S> <C> <C> <C> <C> <C> <C>
JOHN D. KIDD 1996 $151,467 $24,000 $5,900 5,000 $20,554
President and Chief 1995 $147,408 $24,000 $5,600 5,000 $11,612
Executive Officer 1994 $144,340 $48,000 $5,100 -- $15,616
EVAN E. DAVIS 1996 $131,560 $24,000 $5,900 5,000 $11,554
Chairman of the Board 1995 $128,040 $24,000 $5,600 5,000 $7,112
1994 $125,375 $48,000 $5,100 -- $13,366
RICHARD P. LEGRAND 1996 $102,806 $20,000 $5,900 5,000 $16,274
Executive Vice President 1995 $100,056 $15,000 $5,600 5,000 $8,487
1994 $96,039 $21,000 $5,100 -- $11,441
<FN>
- -------------------------
(1) Includes amounts paid as director fees for the fiscal years shown.
(2) All shares are subject to an option granted under the 1995 Stock Option
Plan.
(3) Includes matching and profit sharing contributions for the Corporation's
401(k) plan for the fiscal years shown.
</TABLE>
- 6 -
<PAGE> 8
The following table shows all individual grants of stock options to the
named executive officers of the Corporation during the fiscal year ended
December 31, 1996.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR (1)
------------------------------------------
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Exercise Expiration Granted to
Options Price Date Employees
-------------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
JOHN D. KIDD
President and Chief Executive
Officer 5,000 $12.50 12/6/06 8.13%
EVAN E. DAVIS
Chairman of the Board 5,000 $12.50 12/6/06 8.13%
RICHARD P. LEGRAND
Executive Vice President 5,000 $12.50 12/6/06 8.13%
<FN>
- ------------------------------------
(1) All options are granted at 100% of fair market value on the date of
grant. The options are exercisable one year after the date of grant and
ending on the date specified in the option which, in no event, is later
than 10 years after the date of grant; provided, that the optionee
remained in the employment of the Corporation or its affiliates. The
option exercise period may be shortened upon an optionee's disability,
retirement or death.
</TABLE>
The following table shows aggregate option exercises in the last fiscal
year and year end values.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
(A) (B) (C) (D) (E)
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR IN-THE-MONEY OPTIONS AT
END FISCAL YEAR END ($)(1)
----------------------------------------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------------------------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
JOHN D. KIDD -0- -0- 5,000 5,000 $15,875 $625
President and Chief Executive
Officer
EVAN E. DAVIS -0- -0- 5,000 5,000 $15,875 $625
Chairman
RICHARD P. LEGRAND -0- -0- 4,000 5,000 $13,000 $625
Executive Vice President
<FN>
- --------------------------------
(1) Represents total gain which would have been realized if all in the money
options held at fiscal year-end had been exercised, determined by
multiplying the number of shares underlying the options by the
difference between the per share option exercise price and per share
fair market value at year-end. The fair market value as determined by
the closing price of the Corporation's common stock on December 31, 1996
was $12.625. An option is in the money if the fair market value of the
underlying shares exceeds the exercise price of the option.
</TABLE>
- 7 -
<PAGE> 9
CERTAIN TRANSACTIONS
Some of the officers and directors of the Corporation and the companies
with which they are associated were customers of the Bank. The loans to such
officers and directors (a) were made in the ordinary course of business, (b)
were made on substantially the same terms, including interest and nature of
collateral, as those prevailing at the time for comparable transactions with
other persons, and (c) did not involve more than the normal risk of
collectibility or present other unfavorable features.
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with directors, officers,
principal shareholders, and their associates on the same terms, including
interest rates and collateral on loans, as those prevailing at the same time for
comparable transactions with others.
H. Grant Stephenson, a director of the Corporation, is a partner in the
law firm of Porter, Wright, Morris & Arthur, which provides legal services to
the Corporation. C. Clayton Johnson, a director of the Corporation, is a partner
in the law firm of C. Clayton Johnson Co., L.P.A., which provides legal services
to the Corporation. Donald R. Seigneur, a director of the Corporation, is a
partner in the accounting firm of Whited & Seigneur, which provides services to
the Corporation.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Corporation's officers and directors, and greater than 10%
shareholders, to file reports of ownership and changes in ownership of the
Corporation's securities with the Securities and Exchange Commission. Copies of
the reports are required by SEC regulation to be furnished to the Corporation.
Based solely on the Corporation's review of the copies of such reports,
the Corporation believes that all its officers, directors, and greater than 10%
beneficial owners complied with all filing requirements applicable to them with
respect to transactions during fiscal 1996, except that H. Tim Bichsel, Evan E.
Davis, John D. Kidd, Richard P. LeGrand, and David Ratz inadvertently filed two
late reports; and Barry M. Dorsey, Rick A. McNelly, Donald R. Seigneur, and H.
Grant Stephenson inadvertently filed one late report.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Grant Thornton LLP, as the
independent auditors for the Corporation and its subsidiaries for the fiscal
year ending December 31, 1997. Although not required, the Board of Directors is
submitting its selection to the shareholders of the Corporation for
ratification. Grant Thornton LLP has served as independent public auditors for
the Corporation and its subsidiaries during the past year. The Board of
Directors believes that the reappointment of Grant Thornton LLP for the fiscal
year ending December 31, 1997, is appropriate because of the firm's reputation,
qualifications, and experience. The Board of Directors will reconsider the
appointment of Grant Thornton LLP if its selection is not ratified by the
shareholders.
Management expects that representatives of Grant Thornton LLP will be
present at the Annual Meeting, will have the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.
The affirmative vote of a majority of the votes entitled to be cast by
the holders of the Corporation's common stock present in person or represented
by proxy at the Annual Meeting is required for ratification.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL. UNLESS A
CONTRARY CHOICE IS SPECIFIED, PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL
BE VOTED FOR THE PROPOSAL.
- 8 -
<PAGE> 10
AMENDMENTS TO THE CORPORATION'S
1995 STOCK OPTION PLAN
The Board of Directors has approved amendments to the Corporation's 1995
Stock Option Plan (the "Plan"), subject to approval of the amendments by the
shareholders at the Annual Meeting: (a) to increase the number of common shares
available for issuance under the Plan from 200,000 to 400,000 shares; (b) to
eliminate the automatic grant of stock options to outside directors of the
Corporation and provide that non-employee directors, including those on the
Committee, are eligible to receive options under the Plan.; (c) to provide that
upon termination without cause, an employee shall have three months to exercise
options which have been granted; and (d) to provide that Nonqualified Options
are transferable by the optionholders either (i) if transferred without
consideration to immediate family members, or entities they control, or (ii) if
such transfer is approved by the Committee.
The Plan was adopted by the Board of Directors and approved by the
shareholders of the Corporation on August 8, 1995. The Plan is designed to
attract, retain and motivate key employees through stock ownership. The Plan
provides for the grant of options to purchase up to an aggregate of 200,000
shares of the common stock of the Corporation. The proposed amendment to the
Plan would increase the number of shares of the Corporation's common stock
subject to the plan from 200,000 shares to 400,000 shares. The options may
either meet the requirements of Section 422 of the Internal Revenue Code
("Incentive Options") or not meet such requirements ("Nonqualified Options").
Key employees, officers and directors of the Corporation and consultants and
advisors who render services to the Corporation are eligible to receive options
under the Plan.
The Plan is administered by the Committee, which consists of directors
who are not employees of the Corporation. Currently, the members of the
Committee are only eligible to receive options under the Plan in the following
manner on the first business day after each Annual Meeting of shareholders
(provided the director is still a director on such date). Each director who is a
member of the Committee is granted a Nonqualified Option to purchase 1,000
shares of the Corporation's common stock at an exercise price equal to 100% of
the fair market value of the shares on the date of grant. Such options are not
exercisable until a period of one year from the date of grant and terminate on
the tenth anniversary of the date of grant. Directors who are not employees of
the Corporation are not eligible to receive any other options under the Plan.
The proposed amendment to the Plan would eliminate the automatic grant of stock
options to outside directors of the Corporation and provide that non-employee
directors, including those on the Committee, are eligible to receive options
under the Plan.
With respect to all other eligible persons, the Committee is authorized
to determine to whom and at what time options may be granted. The Committee
determines the number of shares subject to option, the duration of the option,
the per share exercise price, the rate and manner of exercise and whether the
option is intended to be a Nonqualified Option or an Incentive Option. An
Incentive Option may not have an exercise price less than fair market value of
the Common Stock on the date of grant or an exercise period that exceeds ten
years from the date of grant and is subject to certain other limitations which
allow the option holder to qualify for favorable tax treatment. None of these
restrictions applies to the grant of Nonqualified Options, which may have an
exercise price less than the fair market value of the underlying common stock on
the date of grant and may be exercisable for an indeterminate period of time.
The Committee also has the discretion under the Plan to make cash grants to
option holders that are intended to offset a portion of the taxes payable upon
exercise of Nonqualified Options or on certain dispositions of shares acquired
under Incentive Options.
The exercise price of the option may be paid in cash or, with the
consent of the Committee, (i) with previously acquired shares of common stock
valued at their fair market value on the date they are tendered, (ii) delivery
of a full recourse promissory note, the terms and conditions of which will be
determined by the Committee, or (iii) by delivery of written instructions to
forward the notice of exercise to a broker or dealer and to deliver to a
specified account a certificate for the shares purchased upon exercise of the
option and a copy of irrevocable instructions to the broker or dealer to deliver
the purchase price of the shares to the Corporation.
Under the proposed amendment, unless the option expires earlier by its
terms, any Stock Option granted under the Plan will terminate automatically (i)
on the date of an employee's termination of employment with the Corporation
(other than by reason of death or disability or if termination is without
cause), and (ii) three months after date of termination due the employee's death
or disability or if the termination was without cause. Prior to the amendment,
unless
- 9 -
<PAGE> 11
the option expired earlier by its terms, any Stock Option granted under the Plan
terminated automatically (i) on the date of an employee's termination of
employment with the Corporation (other than by reason of death or disability),
and (ii) three months after date of termination due the employee's death or
disability. The purpose for the amendment is to provide greater flexibility
regarding the exercise of options. Options not exercisable as of the date of a
change in control of the Corporation will become exercisable immediately as of
such date. Except as permitted by the proposed amendment, options granted under
the Plan are not transferable except by will or the laws of descent and
distribution. The Plan terminates on December 21, 2005, unless earlier
terminated by the Board of Directors. As amended, Nonqualified Options under the
Plan are transferable by optionholders either (i) if transferred without
consideration to immediate family members, or entities they control, or (ii) if
such transfer is approved by the Committee.
As of February 28, 1997, options to purchase an aggregate of 105,900
shares of the Corporation's common stock (net of options canceled) had been
granted pursuant to the Plan, options to purchase 1,000 shares had been
exercised, options to purchase 104,900 shares remained outstanding, and only
94,100 shares remained available for future grant. As of February 28, 1997, the
market value of all shares of the Corporation's common stock subject to
outstanding options under the Plan was approximately $1,442,375 (based upon the
closing sale price of the Corporation's common stock as reported on the Nasdaq
National Market on February 28, 1997, of $13.75 per share). During the 1996
fiscal year, options covering 61,500 shares of the Corporation's common stock
were granted to employees of the Corporation under the Plan. Shares underlying
presently exercisable, but unexercised, options will constitute outstanding
shares of the Corporation's common stock for purposes of calculating the
Corporation's net income per share on a fully-diluted basis. The market value of
the 400,000 shares of the Corporation's common stock to be subject to the Plan
was approximately $5,500,000 as of February 28, 1997.
As of February 28, 1997, the following current directors and executive
officers named in the Corporation's Proxy Statement had been granted options
under the Plan as follows:
<TABLE>
<CAPTION>
NUMBER OF OPTIONS AVERAGE EXERCISE PRICE
NAME GRANTED PER SHARE
---- -------- ----------
<S> <C> <C>
Evan E. Davis 10,000 $10.93
John D. Kidd 10,000 $10.93
Richard P. LeGrand 9,000 $11.11
H. Tim Bichsel 8,000 $11.34
David G. Ratz 11,600 $10.91
Barry M. Dorsey 2,000 $10.13
C. Clayton Johnson 0 --
Rick A. McNelly 2,000 $10.13
Donald R. Seigneur 2,000 $10.13
H. Grant Stephenson 2,000 $10.13
Executive Group 48,600 $10.02
Non-Executive Director Group 8,000 $10.13
Non-Executive Officer Employee Group 49,300 $11.43
</TABLE>
Since adoption of the Plan: (i) all current executive officers, as a
group, have been granted options under the Plan covering 48,600 shares of the
Corporation's common stock which represents approximately 46% of the total
number of options granted pursuant to the Plan; and (iii) all current employees,
excluding executive officers, as a group, have been
- 10 -
<PAGE> 12
granted options under the Plan covering 49,300 shares of the Corporation's
common stock which represents approximately 47% of the total number of options
granted pursuant to the Plan.
The grant of an Incentive Option or a Nonqualified Option has no
immediate tax consequence to the option holder or to the Corporation. The
exercise of an Incentive Option will generally have no immediate tax consequence
to the option holder (except to the extent it is an adjustment in computing
alternative minimum taxable income) or to the Corporation; however, the exercise
of a Nonqualified Option will cause the option holder to recognize ordinary
income, and permit the Corporation to take a corresponding deduction if
applicable withholding requirements are satisfied, in an amount equal to the
excess of the fair market value on the date of the exercise of the shares of
common stock acquired pursuant to the exercise of the Nonqualified Option
("Nonqualified Shares") over the exercise price.
Upon the sale of shares acquired pursuant to the exercise of an
Incentive Option ("Incentive Shares") after the required holding period, no
deduction will be allowable to the Corporation and the option holder will
generally realize long-term capital gain or loss in an amount equal to the
difference between amount realized upon the sale and the exercise price of the
Incentive Shares. If, however, an option holder disposes of the Incentive Shares
prior the expiration of the required holding period (a "disqualifying
disposition"), the option holder will recognize ordinary income, and the
Corporation will be entitled to a corresponding deduction, provided that
applicable withholding requirements are satisfied, equal to the excess of the
fair market value of the Incentive Shares on the date of exercise (or the
proceeds of the disposition, if less) over the exercise price. If the amount
realized upon the disqualifying disposition exceeds the fair market value of the
Incentive Shares on the date of exercise, such excess is taxable to the option
holder as capital gain income. Upon the sale of Nonqualified Shares, the option
holder will generally realize long or short term capital gain or loss (depending
upon the holding period of the shares) in an amount equal to the difference
between the option holder's tax basis in the Nonqualified Shares and the amount
realized on the sale.
The option holder's tax basis in the Incentive Shares and Nonqualified
Shares will be the exercise price plus the amount of any ordinary income
recognized by the option holder. The option holder's holding period will
commence on the date that the Incentive Shares or Nonqualified Shares are
transferred to him or her.
The purposes of the Plan are to promote the growth and profitability of
the Corporation by increasing the opportunity for key employees to personally
participate as equity owners in the financial success of the Corporation and to
assist the Corporation in attracting and retaining highly qualified employees.
The Board of Directors believes that, in order to accomplish these purposes, the
Plan should be amended to increase the number of shares available for issuance.
Furthermore, the Board of Directors believes that, upon termination of
employment without cause, all options held by the optionholder should terminate
three months after the date of termination. In addition, the SEC recently
amended Rule 16b-3 to remove restrictions on the transferability of stock
options, and the Board has determined to amend the Plan accordingly. The
affirmative vote of the holders of a majority of the common shares of the
Corporation present and entitled to vote at the meeting is required to approve
the amendments to the Plan. The persons appointed as proxies will vote FOR
approval, unless otherwise directed. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THE AMENDMENTS TO THE 1995 STOCK OPTION PLAN.
SHAREHOLDER PROPOSALS
If an eligible shareholder wishes to present a proposal for action at
the next Annual Meeting of the Corporation, it shall be presented to management
by certified mail, written receipt requested, not later than November 15, 1997,
for inclusion in the corporation's Proxy Statement and form of Proxy relating to
that meeting. Any such proposal must comply with Rule 14a-8 promulgated by the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended. Proposals should be sent to Oak Hill Financial Inc.,
Attention: David G. Ratz, Vice President, 14621 State Route 93, Jackson, Ohio
45640.
- 11 -
<PAGE> 13
ANNUAL REPORT
The Corporation's Annual Report for the year ended December 31, 1996, is
being mailed to each shareholder with the Proxy and Proxy Statement.
The Corporation files annually with the Securities and Exchange
Commission an annual report on Form 10-KSB. This report includes financial
statements and schedules thereto. A SHAREHOLDER OF THE CORPORATION MAY OBTAIN A
COPY OF THE ANNUAL REPORT ON FORM 10-KSB, INCLUDING FINANCIAL STATEMENTS AND
SCHEDULES THERETO, FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996, WITHOUT CHARGE
BY SUBMITTING A WRITTEN REQUEST THEREFOR TO THE FOLLOWING ADDRESS:
Oak Hill Financial Inc.,
Attention: David G. Ratz,
Oak Hill Financial, Inc.
14621 State Route 93,
Jackson, Ohio 45640.
Management and the Board of Directors of the Corporation know of no
business to be brought before the Annual Meeting other than as set forth in this
Proxy Statement. However, if any matters other than those referred to in this
Proxy Statement should properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed proxy to vote such proxy on such
matters in accordance with their best judgment.
The expense of proxy solicitation will be borne by the Corporation.
Proxies will be solicited by mail and may be solicited, for no additional
compensation, by some of the officers, directors and employees of the
Corporation or its subsidiaries, by telephone, telegraph or in person. Brokerage
houses and other custodians, nominees and fiduciaries may be requested to
forward soliciting material to the beneficial owners of shares of the
Corporation and will be reimbursed for their related expenses.
- 12 -
<PAGE> 14
Apendix to Proxy Statement dated March 31, 1997 [filed with SEC, but not sent
to Stockholders]
OAK HILL FINANCIAL, INC.
AMENDED AND RESTATED 1995 STOCK OPTION PLAN
1. PURPOSE. This plan (the "Plan") is intended as an incentive and to
encourage stock ownership by certain key employees, officers and directors of,
and consultants and advisers who render services to, Oak Hill Financial, Inc.
an Ohio corporation (the "Company") and any current or future subsidiaries or
parent of the Company by the granting of stock options (the "Options") as
provided herein. By encouraging such stock ownership, the Company seeks to
attract, retain and motivate employees, officers, directors, consultants and
advisers. The Options granted under the Plan may be either incentive stock
options ("ISOs") which meet the requirements of section 422 of the Internal
Revenue Code of 1986, as amended from time to time hereafter (the "Code"), or
nonstatutory options which do not meet such requirements ("NSOs").
2. EFFECTIVE DATE. The Plan will become effective on August 8, 1995
(the "Effective Date").
3. ADMINISTRATION.
(a) The Plan will be administered by a committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board")
which consists of not fewer than two members of the Board. If any class of
equity securities of the Company is registered under section 12 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), all members of
the Committee will be "Non-Employee Directors" as defined in Rule
16b-3(b)(3)(i) promulgated under the 1934 Act (or any successor rule of like
tenor and effect) and "outside directors" as defined in Section 162(m) of the
Code and regulations promulgated thereunder.
(b) Subject to the provisions of the Plan, the Committee is
authorized to establish, amend and rescind such rules and regulations as it
deems appropriate for its conduct and for the proper administration of the
Plan, to make all determinations under and interpretations of, and to take such
actions in connection with, the Plan or the Options granted thereunder as it
deems necessary or advisable. All actions taken by the Committee under the Plan
are final and binding on all persons. No member of the Committee is liable for
any action taken or determination made relating to the Plan, except for willful
misconduct.
(c) The Company will indemnify each member of the Committee
against costs, expenses and liabilities (other than amounts paid in settlements
to which the Company does not consent, which consent will not be unreasonably
withheld) reasonably incurred by such member in connection with any action to
which he or she may be a party by reason of service as a member of the
Committee, except in relation to matters as to which he or she is adjudged in
such action to be
<PAGE> 15
personally guilty of negligence or willful misconduct in the performance of his
or her duties. The foregoing right to indemnification is in addition to such
other rights as the Committee member may enjoy as a matter of law, by reason of
insurance coverage of any kind, or otherwise.
4. ELIGIBILITY.
(a) The Committee may grant Options and Tax Offset Payments,
as defined in paragraph 10, to such key employees of (or, in the case of NSOs
only, to directors who are not employees of and to consultants and advisers who
render services to) the Company or its subsidiaries or parent as the Committee
may select from time to time (the "Optionees"). The Committee may grant more
than one Option to an individual under the Plan.
(b) No ISO may be granted to an individual who, at the time
an ISO is granted, is considered under section 422(b)(6) of the Code as owning
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of its parent or any subsidiary corporation
(a "10% Shareholder"); provided, however, this restriction will not apply if at
the time such ISO is granted the option price per share of such ISO is at least
110% of the fair market value of such share, and such ISO by its terms is not
exercisable after the expiration of five years from the date it is granted.
This paragraph 4(b) has no application to Options granted under the Plan as
NSOs.
(c) The aggregate fair market value (determined as of the
date the ISO is granted) of shares with respect to which ISOs are exercisable
for the first time by an Optionee during any calendar year under the Plan or
any other incentive stock option plan of the Company or a parent or subsidiary
of the Company may not exceed $100,000, or such other dollar limitation as may
be provided in the Code.
5. STOCK SUBJECT TO PLAN. The shares subject to Options under the
Plan are the shares of common stock, without par value, of the Company (the
"Shares"). The Shares issued pursuant to Options granted under the Plan may be
authorized and unissued Shares, Shares purchased on the open market or in a
private transaction, or Shares held as treasury stock. The aggregate number of
Shares for which Options may be granted under the Plan may not exceed 400,000,
subject to adjustment in accordance with the terms of paragraph 13 of the Plan.
The maximum number of Shares for which Options may be granted under the Plan
during the term of the Plan to any one individual may not exceed 400,000,
subject to adjustment in accordance with the terms of paragraph 13 of the Plan.
The unpurchased Shares subject to terminated or expired Options may again be
offered under the Plan. The Committee, in its sole discretion, may permit the
exercise of any Option as to full Shares or fractional Shares. Proceeds from
the sale of Shares under Options will be general funds of the Company.
2
<PAGE> 16
6. TERMS AND CONDITIONS OF OPTIONS.
(a) At the time of grant, the Committee will determine
whether the Options granted will be ISOs or NSOs. All Options and Tax Offset
Payments granted will be authorized by the Committee and, within a reasonable
time after the date of grant, will be evidenced by stock option agreements in
writing ("Stock Option Agreements"), in the form attached hereto as Exhibit A,
or in such other form and containing such terms and conditions not inconsistent
with the provisions of this Plan as the Committee may determine. Any action
under paragraph 13 may be reflected in an amendment to, or restatement of, such
Stock Option Agreements.
(b) To the extent permitted by applicable law and the
transaction documents, the Committee may grant Options and Tax Offset Payments
having terms and provisions which vary from those specified in the Plan if such
Options or Tax Offset Payments are granted in substitution for, or in
connection with the assumption of, existing options granted by (the Company)
another corporation and assumed or otherwise agreed to be provided for by the
Company pursuant to or by reason of a transaction involving a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation to which the Company is a party.
(c) The adoption of the Plan shall not effect the validity of
any NSO option plan previously adopted by the Company or any unexercised
options currently outstanding pursuant to any such plan.
7. PRICE. The Committee will determine the option price per Share
(the "Option Price") of each Option granted under the Plan. Notwithstanding the
foregoing, the Option Price of each ISO granted under the Plan may not be less
than the fair market value of a Share on the date of grant of such Option. The
date of grant will be the date the Committee acts to grant the Option or such
later date as the Committee specifies and the fair market value will be
determined without regard to any restrictions other than a restriction which,
by its terms, will never lapse and in accordance with paragraph 25(c).
8. OPTION PERIOD. The Committee will determine the period during
which each Option may be exercised (the "Option Period"); provided, however,
any ISO granted under the Plan will have an Option Period which does not exceed
10 years from the date of grant.
9. NONTRANSFERABILITY OF OPTIONS. An Option will not be transferable
by the Optionee otherwise than by will or the laws of descent and distribution
and may be exercised, during the lifetime of the Optionee, only by the Optionee
or by the Optionee's guardian or legal representative. Notwithstanding the
foregoing, an Optionee may transfer an NSO either (a) to members of his or her
immediate family (as defined in Rule 16a-1 promulgated under the 1934 Act), to
one or more trusts for the benefit of such family members, or to partnerships
in which such family members are the only partners, or (b) if such transfer is
approved by the Committee. Any NSOs held by such transferees are subject to the
same terms and conditions that applied to such NSOs immediately prior to the
transfer.
3
<PAGE> 17
10. TAX OFFSET PAYMENTS. The Committee has the authority and
discretion under the Plan to make cash grants to Optionees at any time to
offset a portion of the taxes which may become payable upon exercise of NSOs or
on certain dispositions of Shares acquired under ISOs ("Tax Offset Payments").
In the case of NSOs, such Tax Offset Payments will not exceed an amount
determined by multiplying a percentage established by the Committee to
approximate the maximum federal, state and local income or capital gains taxes
payable in connection with the exercise of the NSO or disposition of shares
acquired under an ISO by the difference between the fair market value of a
Share on the date of exercise and the Option Price, and by the number of Shares
as to which the Option is being exercised. If the Tax Offset Payment is being
made in connection with the disposition by an Optionee of Shares acquired under
an ISO, such Tax Offset Payments will be in an amount determined by multiplying
a percentage established by the Committee by the difference between the fair
market value of a Share on the date of disposition, if less than the fair
market value on the date of exercise, and the Option Price, and by the number
of Shares acquired under an ISO of which an Optionee is disposing. The
percentage will be established, from time to time, by the Committee at that
rate which the Committee, in its sole discretion, determines to be appropriate
and in the best interest of the Company to assist Optionees in the payment of
taxes. The Company has the right to withhold and pay over to any governmental
entities (federal, state or local) all amounts under a Tax Offset Payment for
payment of any income or other taxes incurred on exercise.
11. EXERCISE OF OPTIONS.
(a) The Committee, in its sole discretion, will determine the
terms and conditions of exercise and vesting percentages of Options granted
hereunder. Notwithstanding the foregoing or the terms and conditions of any
Stock Option Agreement to the contrary, (i) if the Optionee's employment is
terminated as a result of disability or death, his or her Options will be
exercisable to the extent and for the period specified in paragraph 12(b); (ii)
if a liquidation or merger occurs, all outstanding Options will be exercisable
to the extent and for the period specified in paragraph 13(b); and (iii) if a
change in control occurs, all outstanding Options will be exercisable for the
period specified in paragraph 13(c).
(b) An Option may be exercised only upon delivery of a
written notice to any member of the Committee, the Company's President, or any
other officer of the Company designated by the Committee to accept such notices
on its behalf, specifying the number of Shares for which it is exercised.
(c) Within five business days following the date of exercise
of an Option, the Optionee or other person properly exercising the Option will
make full payment of the Option Price in cash or, with the consent of the
Committee, (i) by tendering previously acquired Shares (valued at fair market
value, as determined by the Committee, as of such date of tender); (ii) with a
full recourse promissory note of the Optionee for the Option Price, under terms
and conditions determined by the Committee; (iii) any combination of the
foregoing; or (iv) if the Shares subject to the Option have been registered
under the Securities Act of 1933, as amended (the "1933 Act")
4
<PAGE> 18
and there is a regular public market for the Shares, by delivering to the
Company on the date of exercise of the Option written notice of exercise
together with:
(A) written instructions to forward a copy of such
notice of exercise to a broker or dealer, as defined in section
3(a)(4) and 3(a)(5) of the 1934 Act ("Broker"), designated in
such notice and to deliver to the specified account maintained
with the Broker by the person exercising the Option a
certificate for the Shares purchased upon the exercise of the
Option, and
(B) a copy of irrevocable instructions to the Broker
to deliver promptly to the Company a sum equal to the purchase
price of the Shares purchased upon exercise of the Option and
any other sums required to be paid to the Company under
paragraph 17 of the Plan.
(d) If Tax Offset Payments sufficient to allow for withholding
of taxes are not being made at the time of exercise of an Option, the Optionee
or other person exercising such Option will pay to the Company an amount equal
to the withholding amount required to be made less any amount withheld by the
Company under paragraph 17.
12. TERMINATION OF EMPLOYMENT.
(a) If an Optionee is no longer employed by the Company, any
parent or subsidiary of the Company, or any successor corporation to either the
Company or any parent or subsidiary of the Company, all Options held by such
Optionee will terminate on the date of termination, unless such employment has
been terminated by reason of death or disability, as defined in paragraph
25(b), or such employment has been terminated without cause,
(b) Upon termination of employment by reason of death or
disability or upon termination without cause, the Optionee or the Optionee's
personal representative, or the person or persons to whom his or her rights
under the Options pass by will or the laws of descent or distribution, will
have three months after the date of such termination (but not later than the
expiration date of the Optionee's Stock Option Agreement(s)) to exercise all
Options held by Optionee to the extent the same were exercisable on the date of
termination; provided, however, the Committee, in its sole discretion, may
permit the exercise of all or any portion of any Option granted to such
Optionee not otherwise exercisable.
13. REORGANIZATIONS.
(a) If a stock split, stock dividend, combination or exchange
of shares, exchange for other securities, reclassification, reorganization,
redesignation or other change in the Company's capitalization occurs, the
Committee will proportionately adjust or substitute the aggregate number of
Shares for which Options may be granted under this Plan, the number of Shares
subject to outstanding Options and the Option Price of the Shares subject to
outstanding Options to reflect the
5
<PAGE> 19
same. The Committee will make such other adjustments to the Options, the
provisions of the Plan and the Stock Option Agreements as may be appropriate
and equitable, which adjustments may provide for the elimination of fractional
Shares.
(b) If the Company liquidates or dissolves, or is a party to a
merger or consolidation in which the Company is not the surviving corporation,
other than a merger or consolidation involving only a change in state of
incorporation or an internal reorganization not involving a change in control,
the Company may give written notice thereof to all holders of Options granted
under the Plan at least 30 days prior to the effective date of such
liquidation, dissolution, merger or consolidation, and each Optionee will have
the right within such 30-day period to exercise all Options held by him or her
to the extent the same were exercisable on the date of the notice or became
exercisable within such 30-day notice period; provided, however, that such
Options may not be exercised after the specific expiration date set forth
therein. If such Options have not been exercised on or prior to the end of the
30-day notice period, they will terminate on that date.
(c) If a change in control (as defined in paragraph 25(a))
occurs, all outstanding Options granted under this Plan will become immediately
exercisable to the extent of 100% of the Shares subject thereto notwithstanding
any contrary waiting or vesting periods specified in this Plan or in any
applicable Stock Option Agreement. If an outstanding option is not exercised as
a result of a change in control a successor corporation shall issue substitute
options so as to preserve substantially the rights and benefits of the
Optionees under this Plan.
14. RIGHTS AS SHAREHOLDER. The Optionee has no rights as a shareholder
with respect to any Shares subject to an Option until the date of issuance of a
stock certificate to the Optionee for such Shares.
15. NO CONTRACT OF EMPLOYMENT. Nothing in the Plan or in any Option or
Stock Option Agreement confers on any Optionee any right to continue in the
employment or service of the Company or any parent or subsidiary of the Company
or interfere with the right of the Company to terminate such Optionee's
employment or other services at any time. The establishment of the Plan will in
no way, now or hereafter, reduce, enlarge or modify the employment relationship
between the Company or any parent or subsidiary of the Company and the
Optionee. Options granted under the Plan will not be affected by any change of
duties or position as long as the Optionee continues to be employed by the
Company or any parent or subsidiary of the Company.
16. AGREEMENTS AND REPRESENTATIONS OF OPTIONEES. As a condition to the
exercise of an Option, the Committee, in its sole determination, may require
the Optionee to represent in writing that the Shares being purchased are being
purchased only for investment and without any present intent at the time of the
acquisition of such Shares to sell or otherwise dispose of the same.
17. WITHHOLDING TAXES. The Company or any parent or subsidiary of the
Company has the right (a) to withhold from any salary, wages, or other
compensation for services payable by the Company or any parent or subsidiary of
the Company to or with respect to an Optionee, or to
6
<PAGE> 20
demand and receive payment from the Optionee or other person to whom the
Company is delivering certificates for Shares purchased upon exercise of an
Option of, amounts sufficient to satisfy any federal, state or local
withholding tax liability attributable to such Optionee's (or any beneficiary's
or personal representative's) receipt or disposition of Shares purchased under
any Option or (b) to take any such other action as it deems necessary to enable
it to satisfy any such tax withholding obligations as a condition to the
Company's obligation to deliver certificates evidencing the Shares. The
Committee, in its sole discretion, may permit an Optionee to elect to have
Shares that would be acquired upon exercise of Options (valued at fair market
value as of the date of exercise) withheld by the Company and not issued to
Optionee upon exercise of Options in satisfaction of such Optionee's
withholding tax liabilities. Such withheld Shares will then become authorized
but unissued shares or treasury shares of the Company, at the option of the
Company.
18. EXCHANGES. The Committee may permit the voluntary surrender of all
or a portion of any Option granted under the Plan to be conditioned upon the
granting to the Optionee of a new Option for the same or a different number of
Shares as the Option surrendered, or may require such voluntary surrender as a
condition precedent to a grant of a new Option to such Optionee. Subject to the
provisions of the Plan, such new Option will be exercisable at the same price,
during such period and on such other terms and conditions as are specified by
the Committee at the time the new Option is granted. Upon surrender, the
Options surrendered will be cancelled, and the Shares previously subject to
them will be available for the grant of other Options. The Committee also may
but is not obligated to grant Tax Offset Payments to any Optionee surrendering
such Option for a new Option.
19. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell and
deliver the Shares under such Options, will be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
government or regulatory agency as may be required. Options issued under this
Plan are not exercisable prior to (i) the date upon which the Company has
registered the Shares for which Options may be issued under the 1933 Act and
the completion of any registration or qualification of such Shares under state
law, or any ruling or regulation of any government body which the Company, in
its sole discretion, determines to be necessary or advisable in connection
therewith, or (ii) receipt by the Company of an opinion from counsel to the
Company stating that the exercise of such Options may be effected without
registering the Shares subject to such Options under the l933 Act or under
state or other law.
20. ASSUMPTION. The Plan may be assumed by the successors and assigns
of the Company. Any such assumption will not abrogate the rights of the Company
and the Optionees set forth in paragraph 13(b) of the Plan.
21. EXPENSES. The Company will bear all expenses and costs in
connection with administration of the Plan.
7
<PAGE> 21
22. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board
may terminate, amend or modify the Plan at any time without further action on
the part of the shareholders of the Company; provided, however, that (a) no
amendment to the Plan may cause the ISOs granted hereunder to fail to qualify
as incentive stock options under the Code; and (b) any amendment to the Plan
which requires the approval of the shareholders of the Company under the Code,
the regulations promulgated thereunder or the rules promulgated under section
16 of the 1934 Act will be subject to approval by the shareholders of the
Company in accordance with the Code, such regulations or such rules. No
amendment, modification or termination of the Plan may adversely affect in any
manner any Option previously granted to an Optionee under the Plan without the
consent of the Optionee or a permitted transferee of such Option.
23. TERM OF PLAN. The Plan will become effective on the Effective
Date, subject to the approval of the Plan by the holders of a majority of the
shares of stock of the Company entitled to vote within twelve months of the
date of the Plan's adoption by the Board, and the exercise of all Options
granted prior to such approval will be subject to such approval. The Plan will
terminate on the tenth anniversary of the Effective Date, or such earlier date
as may be determined by the Board. Termination of the Plan, however, will not
affect the rights of Optionees under Options previously granted to them, and
all unexpired Options will continue in force and operation after termination of
the Plan except as they may lapse or terminate by their own terms and
conditions or as herein provided.
24. LIMITATION OF LIABILITY. The liability of the Company under this
Plan or in connection with any exercise of an Option is limited to the
obligations expressly set forth in the Plan and in any Stock Option Agreements,
and no term or provision of this Plan or of any Stock Option Agreements will be
construed to impose any further or additional duties, obligations or costs on
the Company not expressly set forth in the Plan or the Stock Option Agreements.
25. RELATIONSHIP TO OTHER BENEFITS. No payment under this Plan shall
be taken into account in determining any benefits under any pension,
retirement, profit sharing, or group insurance plan of the Company.
26. NONEXCLUSIVITY OF PLAN. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as (i) effecting the validity of any existing
stock, option or employee benefit plan of the Company or any unexercised
options or right outstanding thereunder or (ii) creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be applicable either
generally or only in specific cases.
27. DEFINITIONS.
(a) Change In Control. A "change in control" will be deemed to
have occurred if and when (i) a person, partnership, corporation, trust or
other entity ("Person") acquires or combines
8
<PAGE> 22
with the Company, or 50 percent or more of its assets or earning power, in one
or more transactions, and after such acquisition or combination, less than a
majority of the outstanding voting shares of the Person surviving such
transaction (or the ultimate parent of the surviving Person) is owned by the
owners of the voting shares of the Company outstanding immediately prior to
such acquisition or combination; or (ii) during any period of two consecutive
years during the term of this Plan, individuals who at the beginning of such
period are members of the Board ("Original Board Members") cease for any reason
to constitute at least a majority of the Board, unless the election of each
Board member who was not an Original Board Member has been approved in advance
by Board members representing at least two-thirds of the Board members then in
office who were Original Board Members.
(b) DISABILITY. The term "disability" means a physical or
mental condition which impairs the ability of the Optionee to perform the
Optionee's usual and customary employment or service with the Company or any
parent or subsidiary of the Company.
(c) FAIR MARKET VALUE. If the Shares are publicly traded, the
term "fair market value" as used in this Plan means (i) the closing price
quoted in the NASDAQ National Market, if the shares are so quoted, (ii) the
last quote reported by NASDAQ for small-cap issues, if the shares are so
quoted, (iii) the mean between the bid and asked prices as reported by NASDAQ,
if the Shares are so quoted, or (iv) if the Shares are listed on a securities
exchange, the closing price at which the Shares are quoted on such exchange, in
each case at the close of the date immediately before the Option is granted or,
if there be no quotation or sale on that date, the next preceding date on which
the Shares were quoted or traded. In all other cases, the fair market value
will be determined in accordance with procedures established in good faith by
the Committee and with respect to ISOs, conforming to regulations issued by the
Internal Revenue Service regarding incentive stock options.
(d) KEY EMPLOYEES. The term "key employees" means those
executive, administrative, operational and managerial employees who are
determined by the Committee to be eligible for Options under the Plan.
(e) PARENT AND SUBSIDIARY. The terms "subsidiary" and "parent"
as used in the Plan have the respective meanings set forth in sections 424(f)
and (e) of the Code.
9
<PAGE> 23
REVOCABLE PROXY
OAK HILL FINANCIAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
April 29, 1997
The undersigned hereby appoints H. Tim Bichsel and Gail Bobst with full
power of substitution, to act as attorneys and proxies for the undersigned
to vote all shares of common stock of the Corporation which the undersigned
is entitled to vote at the Annual Meeting of Shareholders (the "Meeting"),
to be held on April 29, 1997 at the Ohio State University Extension South
District Office, 17 Standpipe Road, Jackson, Ohio at 1:00 p.m., local time,
and at any adjournments thereof, as follows:
I. The election as directors of all nominees listed below:
[ ] FOR [ ] WITHHOLD AUTHORITY
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
Evan E. Davis C. Clayton Johnson John D. Kidd Richard P. LeGrand
II. The ratification of the appointment of Grant Thornton LLP as auditors
of the Corporation for the fiscal year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. The approval and adoption of the Corporation's Amended and Restated
1995 Stock Option Plan described in the accompanying Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment
thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
<PAGE> 24
(LOGO) Oak Hill Financial, Inc.
c/o Corporate Trust Services
Mail Drop 1090F5
38 Fountain Square Plaza
Cincinnati, OH 45263
fold and detach here
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present to vote at the Meeting or at any
adjournment thereof, and after notification to the Secretary of the
Corporation at the Meeting of the shareholder's decision to terminate this
Proxy, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect.
The undersigned acknowledges receipt from the Corporation, prior to the
execution of this Proxy, of Notice of the Annual Meeting, a Proxy Statement
dated March 31, 1997, and the Corporation's Annual Report to Shareholders
for the fiscal year ended December 31, 1996.
Dated: _________________________
--------------------------------
Signature Signature
--------------------------------
Print Name of shareholder
Please sign exactly as your name
appears on this card. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title. If shares are held
jointly, each holder should sign.
PLEASE PROMPTLY COMPLETE, DATE, SIGN
AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
