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•	by traditional paper proxy card;

•	by submitting voting instructions via the Web site identified on your proxy card;

•	by submitting voting instructions by telephone; or

•	in person at the Annual Meeting.

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•	“FOR” the election as Peoples directors of the nominees listed on pages 10 through 11 under “PROPOSAL NUMBER 1: ELECTION OF DIRECTORS”;

•	“FOR” the non-binding advisory resolution to approve the compensation of Peoples' named executive officers as disclosed in this proxy statement;

•	“FOR” the approval of the Peoples Bancorp Inc. Second Amended and Restated 2006 Equity Plan; and

•	“FOR” the ratification of the appointment of Ernst & Young LLP (“E&Y”) as Peoples' independent registered public accounting firm for the fiscal year ending December 31, 2013.

•	filing a written notice of revocation with the Corporate Secretary of Peoples at 138 Putnam Street, P.O. Box 738, Marietta, Ohio 45750-0738, which must be received prior to the Annual Meeting;

•	executing and returning a later-dated proxy card, which must be received prior to the Annual Meeting;

•	if you are a registered shareholder, accessing the designated Internet Web site prior to the deadline for transmitting voting instructions electronically;

•	if you are a registered shareholder, using the designated toll-free telephone number prior to the deadline for transmitting voting instructions electronically; or

•	attending the Annual Meeting and giving notice of revocation in person.

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(1)	The “Percent of Class” computation is based on 10,800,607 common shares outstanding and entitled to vote on February 28, 2013.

(2)

Based on information contained in a Schedule 13G amendment, dated February 8, 2013 and filed with the SEC on February 11, 2013, on behalf of Dimensional Fund Advisors LP to report its beneficial ownership of common shares of Peoples as of December 31, 2012. The Schedule 13G amendment reported that Dimensional Fund Advisors LP had sole voting power as to 818,613 common shares and sole investment power as to 836,862 common shares, all of which common shares were held in portfolios of four registered investment companies to which Dimensional Fund Advisors LP furnishes investment advice and of certain other commingled group trusts and separate accounts for which Dimensional Fund Advisors LP serves as investment manager. The common shares reported were owned by the investment companies, trusts and accounts. Dimensional Fund Advisors LP disclaimed beneficial ownership of the reported common shares.

(3)

Based on information contained in a Schedule 13G amendment dated February 4, 2013 and filed with the SEC on February 5, 2013, on behalf of BlackRock, Inc. to report the beneficial ownership by its subsidiaries (BlackRock Japan Co. Ltd., BlackRock Institutional Trust Company, N.A., BlackRock Fund Advisors, BlackRock Asset Management Canada Limited, BlackRock Advisors, LLC and BlackRock Investment Management, LLC) of common shares of Peoples as of December 31, 2012. The Schedule 13G amendment reported that BlackRock, Inc. had sole voting power and sole investment power as to all of the 645,894 common shares reported.

(4)	Includes Peoples Bank's beneficial ownership through Trust and Investment Services, a division of Peoples Bank, in the following manner: 93,527 common shares with shared investment and sole voting power; 494,122 common shares with shared investment and shared voting power; 19,146 common shares with sole investment and sole voting power;

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(1)

Unless otherwise indicated in the footnotes to this table, the beneficial owner has sole voting and investment power with respect to all of the common shares reflected in the table. All fractional common shares have been rounded down to the whole common share. The mailing address of each of the current executive officers and directors of Peoples is 138 Putnam Street, P.O. Box 738, Marietta, Ohio 45750-0738.

(2)

The “Percent of Class” computation is based on the sum of (i) 10,800,607 common shares outstanding and entitled to vote on February 28, 2013 and (ii) the number of common shares, if any, as to which the named individual or group has the right to acquire beneficial ownership upon the exercise of options and/or stock appreciation rights which are currently exercisable or will first become exercisable within 60 days after February 28, 2013.

(3)

Includes 51 common shares held jointly by Tara M. Abraham and her husband, as to which Ms. Abraham exercises shared voting and investment power. Also includes 500 restricted shares which were granted to Ms. Abraham on February 28, 2013 which vest on August 28, 2013. Does not include 491 common shares accrued to Ms. Abraham's bookkeeping account under the Deferred Compensation Plan for Directors, as to which Ms. Abraham has no voting or investment power.

(4)	Reflects beneficial ownership of less than 1% of the outstanding common shares.

(5)	Includes 9,507 common shares held in an investment account by Carl L. Baker, Jr., as to which Mr. Baker exercises sole voting and investment power. Includes 8,352 common shares held by B & N Coal, Inc., as to which Mr. Baker exercises shared voting and investment power. Includes (i) 6,943 common shares held by Mr. Baker as Trustee of the

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(6)

Includes 13,235 common shares held in an IRA account by Peoples Bank as custodian, as to which Mr. Broughton exercises sole voting and investment power. Also includes 500 restricted shares which were granted to Mr. Broughton on February 28, 2013 which vest on August 28, 2013. Does not include 16,333 common shares held of record and beneficially owned by Mr. Broughton's wife, as to which Mr. Broughton has no voting or investment power and disclaims beneficial ownership. Does not include 1,576 common shares accrued to Mr. Broughton's bookkeeping account under the Deferred Compensation Plan for Directors, as to which Mr. Broughton has no voting or investment power.

(7)

Includes 105 common shares allocated to the account of Richard Ferguson in the Ferguson Consulting, LLC retirement savings plan, as to which Mr. Ferguson has the power to direct the voting and investment. Also includes 500 restricted shares which were granted to Mr. Ferguson on February 28, 2013 which vest on August 28, 2013. Does not include 8,699 common shares accrued to Mr. Ferguson's bookkeeping account under the Deferred Compensation Plan for Directors, as to which Mr. Ferguson has no voting or investment power.

(8)

Includes 100 common shared held jointly by James S. Huggins and his wife, as to which Mr. Huggins exercises shared voting and investment power. Includes 200 common shares held jointly in an investment account by Mr. Huggins and his wife, as to which Mr. Huggins exercises shares voting and investment power. Also includes 500 restricted shares which were granted to Mr. Huggins on February 28, 2013 which vest on August 28, 2013.

(9)	Also includes 500 restricted shares which were granted to Dr. Jones on February 28, 2013 which vest on August 28, 2013. Does not include 17,909 common shares accrued to Dr. Brenda F. Jones' bookkeeping account under the Deferred Compensation Plan for Directors, as to which Dr. Jones has no voting or investment power.

(10)	Executive officer of Peoples during the 2012 fiscal year and named in the Summary Compensation Table for 2012.

(11)

Includes (i) 2,000 restricted shares which were granted to Timothy H. Kirtley on September 1, 2011 which vest as described in the “OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2012” table on page 55 (the “Equity Awards Table”); (ii) 568 restricted shares which were granted to Mr. Kirtley on February 7, 2012 which vest as described in the Equity Awards Table; and (iii) 4,000 restricted shares which were granted to Mr. Kirtley on January 29, 2013 which vest as described in the Equity Awards Table. Mr. Kirtley has voting power and the right to receive dividends with respect to all of the reported restricted shares.

(12)

Includes 1,495 common shares allocated to the account of Daniel K. McGill in the Retirement Savings Plan, as to which Mr. McGill has the power to direct the voting and investment. Also includes (i) 1,885 restricted shares which were granted to Mr. McGill on February 7, 2012 which vest as described in the Equity Awards Table; (ii) 15,000 restricted shares which were granted to Mr. McGill on October 30, 2012 which vest as described in the Equity Awards Table; and (iii) 3,500 restricted shares which were granted to Mr. McGill on January 29, 2013 which vest as described in the Equity Awards Table. Mr. McGill has voting power and the right to receive dividends with respect to all of the reported restricted shares.

(13)

Includes 3,500 common shares held in an investment account by David L. Mead, as to which Mr. Mead exercises sole voting and investment power. Also includes 500 restricted shares which were granted to Mr. Mead on February 28, 2013 which vest on August 28, 2013. Does not include 8,878 common shares accrued to Mr. Mead's bookkeeping account under the Deferred Compensation Plan for Directors, as to which Mr. Mead has no voting or investment power.

(14)	Includes 500 restricted shares which were granted to Ms. Rector on February 28, 2013 which vest on August 28, 2013.

(15)	Includes 54,561 common shares held in the Carol J. Sauber Trust, as to which Theodore P. Sauber exercises investment and voting power. Includes 61,671 common shares held in the Theodore P. Sauber Trust, as to which Mr. Sauber exercises investment and voting power. Also includes 500 restricted shares which were granted to Mr. Sauber on February 28, 2013 which vest on August 28, 2013.

(16)	Includes 8,645 common shares held jointly by Carol A. Schneeberger and her husband, as to which Ms. Schneeberger exercises shared voting and investment power. Includes 15,700 common shares allocated to the account of Ms.

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(17)

Includes 7,606 common shares allocated to the account of Edward G. Sloane in the Retirement Savings Plan, as to which Mr. Sloane has the power to direct the voting and investment. Includes 1,000 common shares held in an investment account by Mr. Sloane, as to which Mr. Sloane exercises sole voting and investment power. Also includes (i) 1,645 restricted shares which were granted to Mr. Sloane on February 7, 2012 which vest as described in the Equity Awards Table; and (ii) 3,500 restricted shares which were granted to Mr. Sloane on January 29, 2013 which vest as described in the Equity Awards Table. Mr. Sloane has voting power and the right to receive dividends with respect to all of the reported restricted shares.

(18)

Includes 10,231 common shares held in an investment account by Charles W. Sulerzyski, as to which Mr. Sulerzyski exercises sole voting and investment power. Also includes (i) 15,000 restricted shares which were granted to Mr. Sulerzyski on May 1, 2011 which vest as described in the Equity Awards Table; (ii) 3,763 restricted shares which were granted to Mr. Sulerzyski on January 31, 2012 which vest as described in the Equity Awards Table, and (iii) 11,106 restricted shares which were granted to Mr. Sulerzyski on January 29, 2013 which vest as described in the Equity Awards Table. Mr. Sulerzyski has voting power and the right to receive dividends with respect to all of the reported restricted shares.

(19)	Includes 500 restricted shares which were granted to Mr. Wolf on February 28, 2013 which vest on August 28, 2013. As of February 28, 2013, 20,000 common shares held by Thomas J. Wolf had been pledged as security for a loan.

(20)	Includes common shares held jointly by current directors and executive officers with other persons as well as an aggregate of 24,801 common shares allocated to the accounts of the current executive officers of Peoples in the Retirement Savings Plan. See notes (3), (5), (6), (8), (9) and (11) through (19) above.

•	Carl L. Baker, Jr., George W. Broughton, Richard Ferguson, Dr. Brenda F. Jones and David L. Mead each filed late the Form 4 reporting one acquisition of common shares under the Deferred Compensation Plan for Directors (which occurred on January 1, 2012 and was reported on January 9, 2012).

•	Charles W. Sulerzyski filed late the Form 4 reporting one acquisition of restricted common shares (which occurred on January 31, 2012 and was reported on February 13, 2012).

•	Carl L. Baker, Jr., George W. Broughton, Richard Ferguson, Dr. Brenda F. Jones, David L. Mead, Susan D. Rector, Theodore P. Sauber and Thomas J. Wolf each filed late the Form 4 reporting one acquisition of common shares (which occurred on February 1, 2012 and was reported on February 13, 2012).

•	Timothy H. Kirtley, Daniel K. McGill, Carol A. Schneeberger, Edward G. Sloane and Richard W. Stafford each filed late the Form 4 reporting one acquisition of restricted common shares (which occurred on February 7, 2012 and was reported on February 13, 2012).

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•	the related person's interest in the transaction;

•	the approximate dollar value of the amount involved in the transaction;

•	the approximate dollar value of the amount of the related person's interest in the transaction without regard to the amount of any profit or loss;

•	whether the transaction was undertaken in the ordinary course of business of Peoples or the applicable subsidiary of Peoples;

•	whether the transaction is on terms no less favorable to Peoples or the applicable subsidiary of Peoples than terms that could have been reached with an unrelated third party;

•	the purpose of, and the potential benefits to Peoples or the applicable subsidiary of Peoples of, the transaction;

•	the impact of the transaction on the related person's independence; and

•	any other information regarding the transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances.

•

James S. Huggins, who is a director of Peoples, is a partner with Theisen Brock, LPA, a law firm that renders a variety of legal services to Peoples and our subsidiaries. During the 2012 fiscal year, Peoples and our subsidiaries paid Theisen Brock approximately $168,000 in legal fees and expenses, which were incurred in the ordinary course of business. In addition, Theisen Brock, either directly or through its wholly-owned title agency subsidiaries, received title examination fees and title insurance premiums totaling approximately $368,000 in connection with the closing of mortgage loans made by Peoples Bank to its customers during the 2012 fiscal year, which fees and premiums were paid by the customers directly to Theisen Brock. In his capacity as a partner with Theisen Brock, Mr. Huggins received a portion of the fees and premiums described in this paragraph.

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•	overseeing the accounting and financial reporting processes of Peoples;

•	overseeing the audits of the consolidated financial statements of Peoples;

•	appointing, terminating, compensating and overseeing the work of Peoples' independent registered public accounting firm, including resolving any disagreements between Peoples' management and Peoples' independent registered public accounting firm regarding financial reporting;

•	pre-approving all audit and non-audit services provided by Peoples' independent registered public accounting firm;

•	discussing with management, the auditors performing Peoples' internal audit function (the “Internal Auditors”) and Peoples' independent registered public accounting firm the adequacy and effectiveness of the accounting and financial controls of Peoples;

•	reviewing and concurring in the appointment, replacement, reassignment or dismissal of the Internal Auditors, the scope of the internal audit and the operation and performance of the Internal Auditors;

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•	reviewing all transactions with related persons required to be reported to the Audit Committee under Peoples' Related Person Transaction Policy for potential conflict of interest situations and approving such transactions as appropriate;

•	reviewing Peoples' earnings press releases, financial information and earnings guidance provided to analysts and rating agencies, and financial statements and related disclosures in Peoples' periodic reports;

•	setting hiring policies for employees or former employees of Peoples' independent registered public accounting firm;

•	establishing and reviewing the procedures for the receipt, retention and treatment of complaints received by Peoples regarding accounting, internal accounting controls or auditing matters;

•	reviewing with the Internal Auditors and Peoples' counsel, legal and regulatory matters that may have a material impact on Peoples' consolidated financial statements, related compliance policies of Peoples and compliance with Peoples' Code of Ethics for Directors, Officers and Employees and programs and reports received from regulatory agencies;

•	assisting the Board in the oversight of:

•	the performance of Peoples' independent registered public accounting firm, and

•	the independent registered public accounting firm's qualifications and independence;

•	preparing the report of the Audit Committee required to be included in Peoples' annual proxy statement; and

•	other duties and responsibilities as may be delegated to the Audit Committee by the full Board.

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•	establishing and articulating qualifications, desired background and selection criteria for members of the Board consistent with any eligibility requirements set forth in Peoples' Code of Regulations, and may consider such factors as it deems appropriate;

•	evaluating Board candidates recommended by shareholders and periodically reviewing the procedures used by the Governance and Nominating Committee in such evaluation process;

•	screening and making recommendations to the Board of qualified candidates for election, nomination or appointment to the Board, including nominees for re-election as directors and candidates to fill vacancies;

•	recommending assignments to committees of the Board and chairs of Board committees for consideration by the Board;

•	reviewing with the Chairman of the Board, or another director designated by the Board, issues involving potential conflicts of interest and/or any change of status of directors pursuant to applicable law and the applicable provisions of Peoples' Code of Ethics for Directors, Officers and Employees, Peoples' Code of Regulations or Peoples' Corporate Governance Guidelines;

•	periodically administering and reviewing with the Chairman of the Board, or another director designated by the Board, an evaluation of the processes and performance of the Board and the Board's committees, and reporting such review to the Board;

•	recommending to the Board for its consideration the number of members to serve on the Board;

•	periodically reviewing Peoples' Code of Ethics for Directors, Officers and Employees and Peoples' Related Person Transaction Policy and recommending changes, as deemed necessary or appropriate by the Governance and Nominating Committee, to the Board for approval;

•	reviewing and reporting to the Board on board education opportunities and additional corporate governance matters as necessary or as directed by the Chairman of the Board or the Board as a whole;

•	overseeing the orientation and education of new and continuing members of the Board; and

•	developing and recommending to the Board a set of corporate governance guidelines applicable to Peoples.

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•	ensuring that policies, procedures and guidelines are designed and implemented so as to manage risk to Peoples in all forms, including credit, market, liquidity, compliance and legal, operational, strategic and reputation risks;

•	overseeing management's implementation and enforcement of Peoples' risk management policies, procedures, and guidelines;

•	monitoring Peoples' internal risk management function; and

•	ensuring that Peoples' risk management activities are parallel to, and reconcile with, Peoples' strategic plan.

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•	the name, age, business address and residence address of each proposed nominee;

•	the principal occupation or employment of each proposed nominee;

•	the number of shares of capital stock of Peoples beneficially owned by each proposed nominee and by the nominating shareholder; and

•	any other information required to be disclosed with respect to a nominee for election as a director under the SEC's proxy rules.

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•	Increases the number of common shares that may be issued from 500,000 common shares to such number of common shares as will result in an aggregate of 800,000 common shares being available for future grants of

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•	Counts against the common share limit, common shares subject to an Award outstanding on the Second Restatement Effective Date which Award for any reason thereafter terminates by expiration, forfeiture, cancellation or otherwise without having been exercised or paid.

•	Extends the termination date for the Plan to the tenth anniversary of the Second Restatement Effective Date.

•	Expands the list of performance criteria upon which performance goals relating to the payment or vesting of an Award may be based.

•	Strengthens the prohibition on the repricing of an Option or a SAR.

•	Changes the definition of “retirement” from including early retirement (i.e., termination by a participant on or after attaining age 50 with at least ten years of service with Peoples or any of our subsidiaries) to a termination by a participant other than due to death or disability on or after attaining age 65 with at least ten years of service with Peoples or any of our subsidiaries.

•	Eliminates the automatic acceleration of vesting of Awards upon the retirement or disability of a participant.

•	Eliminates the automatic vesting of performance-based Awards upon the death of a participant with vesting to occur instead at the end of the applicable performance period to the extent the related performance goals have been satisfied.

•	Dividends which would otherwise be received during the restriction period applicable to Restricted Performance Stock will instead be accrued and paid to participants in the same proportion and at the same time as the underlying Restricted Performance Stock vests, if at all.

•	Permits the acceleration of vesting of Awards upon a termination by a participant for good reason following a change in control.

•	Makes Awards subject to any deductions and clawback required to be made under any applicable law, governmental regulation or stock exchange listing requirement, or any policy adopted by Peoples.

•	Incentive Stock Options;

•	Nonqualified Stock Options (and together with Incentive Stock Options, “Options”);

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•	Stock appreciation rights (“SARs”);

•	Restricted Stock;

•	Restricted Performance Stock (and together with Restricted Stock, where appropriate “Restricted Stock”;

•	unrestricted common shares (“unrestricted Company Stock”); and

•	Performance Units.

•	to determine those Employees, Advisors and Non-Employee Directors who will receive an Award; the timing of Award grants; the vesting schedule, if any, for each Award; and the type of Award to be granted, the number of common shares to be subject to each Option, SAR and Restricted Stock Award, the value of each Performance Unit and all other terms and conditions of any Award;

•	to determine and set forth in an award agreement the terms of each Award, including those terms, restrictions and provisions necessary to cause certain Options to qualify as Incentive Stock Options;

•	to correct any defect or supply any omission or reconcile any inconsistency in the Second Amended and Restated 2006 Plan or in any award agreement, in order to carry out the purposes of the Plan; and

•

to accelerate (i) the date on which an Option or a SAR may be exercised, (ii) the date of termination of the restrictions applicable to a Restricted Stock Award, or (iii) the end of a performance period under a Performance Unit Award, if the Committee or the full Board, as applicable, determines that to do so will be in the best interests of Peoples and the participants in the Second Amended and Restated 2006 Plan.

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•	the number of common shares that are subject to an Option or any other Award which is equal to the number of common shares tendered by a participant to Peoples in payment of the option price or exercise price of such Option or other Award, as applicable;

•	the common shares subject to an Award granted on or after the Second Restatement Effective Date which Award for any reason thereafter terminates by expiration, forfeiture, cancellation or otherwise without having been exercised or paid;

•	the common shares withheld from any Award to satisfy a participant's tax withholding obligations or, if applicable, to pay the option price of an Option or exercise price of any other Award;

•	if a SAR is settled in whole or in part by the issuance of common shares, the number of common shares which represents the difference between (a) the number of common shares which remain subject to such SAR on the date of such settlement and (b) the number of common shares actually issued upon settlement of such SAR; and

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the number of common shares subject to an Option which is equal to the number of common shares acquired by Peoples on the open market using the cash proceeds received by Peoples from the exercise of such Option; provided, however, that such number of common shares will in no event be greater than the number which is determined by dividing (a) the amount of cash proceeds received by Peoples from the participant upon the exercise of such Option by (b) the fair market value of a common share on the date of exercise of such Option.

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•	earnings per share (actual or targeted growth);

•	net income after capital costs;

•	net income (before or after taxes);

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•	return measures (including, but not limited to, return on average assets, risk-adjusted return on capital, return on average equity, pre-provision net revenue, or return on tangible common equity);

•	efficiency ratio;

•	full-time equivalency control;

•	stock price (including, but not limited to, growth measures, share price appreciation, or total shareholder return);

•	non-interest income compared to net interest income ratio;

•	expense targets (including, but not limited to, reduction in or maintenance of non-interest expense);

•	operating efficiency;

•	economic value added or EVA(R);

•	credit quality measures;

•	customer satisfaction measures;

•	loan growth;

•	deposit growth;

•	net interest margin;

•	fee income;

•	operating expense;

•	balance sheet measures including assets, loans, charge-offs, loan loss reserves, non-performing assets, deposits, asset quality levels, and investments;

•	balance sheet management;

•	interest income;

•	investment management;

•	maintenance or improvement of net interest income;

•	market capitalization;

•	market share;

•	non-interest income growth;

•	productivity ratios;

•	revenues;

•	risk management measures including interest-sensitivity gap levels, regulatory compliance, satisfactory internal or external audits, and financial ratings; and

•	tangible common equity.

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•

if a participant is terminated without cause or the participant terminates for good reason within 24 months following the change in control, and Peoples is the surviving corporation or the Acquiror has assumed the outstanding Awards, then all of the participant's outstanding Options and SARs will become immediately and fully exercisable and, in the case of Restricted Stock (other than Restricted Performance Stock Awards), all outstanding Awards will become immediately and fully vested. In the case of Restricted Performance Stock and Performance Units, all of the participant's outstanding Awards will be deemed to have been fully earned based on the target level of performance being attained. In the case of outstanding Options or SARs, the participant may exercise these Options or SARs at any time within one year after such termination, except that an Option or SAR will not be exercisable on any date beyond the expiration date of such Option or SAR. If the participant dies after such termination, the exercisability of all outstanding Options or SARs will be treated in the same manner as that provided for a termination due to retirement (as further described below in “Termination”); and

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if a participant is terminated for cause within 24 months following such change in control and Peoples is the surviving corporation or the Acquiror has assumed the outstanding Awards, then any Options or SARs of such participant will expire, any non-vested Restricted Stock, Restricted Performance Stock or Performance Units will be forfeited, and all rights under such Awards will terminate immediately.

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Termination due to death: Unless otherwise provided by the Committee, all outstanding Options, SARs and Restricted Stock not subject to performance goals will vest and, if applicable, become exercisable; a portion of the Options, SARs and Restricted Stock subject to Performance Goals, determined by multiplying the number of shares subject to such Options, SARs and Restricted Stock by a fraction, the numerator of which is the number of whole months elapsed during the Performance Period prior to the Participant's death, and the denominator of which is the number of months in the Performance Period, shall immediately vest; and any SARs and any Options that are then, or become, exercisable may be exercised by the Participant's Personal Representative at any time before the earlier of (i) one year after the Participant's death , or (ii) the expiration date of the Award.

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Termination due to disability or retirement: Unless otherwise provided by the Committee, all outstanding unvested Options, SARs and Restricted Stock will become fully vested and, if applicable, exercisable at the time and under the conditions, including attainment of the performance goals, as such Options, SARs and Restricted Stock would otherwise vest and become exercisable pursuant to the terms of the award agreement; and any Options and SARs that become exercisable may be exercised at any time before the earlier of (i) one year after the date such Option or SAR became vested, or (ii) the expiration date of the Award. However, an Option which is intended to qualify as an Incentive Stock Option will only be treated as such to the extent it complies with the requirements of Section 422 of the Internal Revenue Code.

•	Termination due to any reason other than death, disability or retirement: Any unvested or unexercisable Awards on the date of termination will immediately terminate and be of no further force and effect.

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Termination due to any reason other than death, disability, discharge for cause, or retirement: Any outstanding Options or SARs may be exercised at any time within three months after such termination up to the number of common shares covered by the portion of such Options or SARs which is exercisable at the date of such termination. However, no Option or SAR will be exercisable after the expiration date of such Option or SAR.

•	Termination for cause: Any Options or SARs, whether or not then exercisable, will expire and any rights thereunder will terminate immediately, and any non-vested Restricted Stock Awards will immediately be forfeited and any rights thereunder will terminate.

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Termination due to disability or retirement: Any Options or SARs exercisable at the time of the Participant's termination may be exercised by the participant at any time before the earlier of (i) one year after the date of termination or (ii) the expiration date of the Award. However, an Option which is intended to qualify as an Incentive Stock Option will only be treated as such to the extent it complies with the requirements of Section 422 of the Internal Revenue Code.

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Termination due to retirement, but participant dies prior to the exercise of all of the participant's outstanding Options or SARs: Such Options or SARs may be exercised by the Participant's personal representative at any time before the earlier of (i) one year after the participant's death or (ii) the expiration date of the Award. However, an Option which is intended to qualify as an Incentive Stock Option will only be treated as such to the extent it complies with the requirements of Section 422 of the Internal Revenue Code.

•	Termination at any time during an applicable performance period: Awards of Performance Units will terminate for all purposes, except as may otherwise be determined by the Committee.

•	Termination at any time following the end of an applicable performance period, but prior to full payment: Awards of Performance Units will terminate except when the termination is due to death, disability or retirement or as may otherwise be determined by the Committee.

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(1)

These amounts represent non-GAAP financial measures since they exclude the provision for loan losses and all gains and losses included in earnings. Additional information regarding the calculation of these amounts can be found in “ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2012 under the caption “Pre-Provision Net Revenue”.

•	Improved asset quality: Nonperforming assets were 1.48% of gross loans and OREO at December 31, 2012 versus 3.41% at December 31, 2011. Net charge-offs were 0.12% of average loans in 2012 versus 1.16% in 2011. Allowance for loan losses was 1.81% of gross loans at year-end 2012, compared to 2.53% at year-end 2011.

•	Higher retail deposit balances: Retail deposits at year-end 2012 were up 12% over year-end 2011.

•	Steady loan production: Total gross loan balances as of year-end 2012 were up 4.97% compared to year-end 2011, reversing a trend of declining loan balances that started in 2007.

•	Stock price: A year-over-year increase in the per share price of our common shares from $14.47 on December 30, 2011 to $20.43 on December 31, 2012, an increase of 41%.

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Chief Executive Officer Compensation: Mr. Sulerzyski's salary increased by 7.1% to $450,000 on January 1, 2013. This increase represented the Committee's and the Board's recognition of the significant accomplishments of Mr. Sulerzyski during 2012, including: setting, refining, and executing the strategic direction of Peoples; hiring and developing the senior management team; building a client-focused culture; and performance above expectations. For 2012 performance, Mr. Sulerzyski was awarded an annual cash incentive of $290,220. Mr. Sulerzyski also received a grant of 11,106 performance-vested restricted shares in January 2013 for 2012 performance. The awards of cash and equity-based incentives were based upon Peoples' improved performance and achievement of Mr. Sulerzyski's individual performance goals in 2012.

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•	Other Named Executive Officer Compensation: Due to the improved performance of Peoples, and the respective individual achievements of the other named executive officers, the Committee approved annual cash incentives, equity-based incentives, and base-salary increases ranging from 1.7% to 5.0%. This compensation is reflected in the table below.

(1)	Cash - In February 2013, a cash incentive was awarded to each of the individuals then serving as executive officers, based upon their performance relative to their respective 2012 individual and corporate performance goals.

(2)

Performance-vested restricted shares - In January 2013, restricted shares with a three-year performance-based vesting schedule were awarded to each of the individuals serving as executive officers, based upon their performance relative to their respective 2012 individual and corporate performance goals. The performance triggers required for vesting of these restricted shares are the achievement of each of the following, for each one-third tranche of restricted shares awarded, during each of the three successive one-year periods ending on the anniversary date of the grant date: (i) Peoples maintaining a “well-capitalized” status under applicable regulatory standards; and (ii) Peoples reporting positive net income.

•

Retention bonus - On September 13, 2012, the Committee approved a $50,000 cash bonus payable to Daniel K. McGill awarded October 1, 2012, as well as a grant of 15,000 restricted shares awarded October 30, 2012, with vesting of the restricted shares in 5,000 common-share installments on each of the first three anniversaries of the grant date. The Committee considered Mr. McGill's contributions to Peoples' improved asset quality and earnings growth, and approved the compensation as part of a retention strategy specific to Mr. McGill.

•

The Committee reviewed and considered the non-binding advisory vote of shareholders, approving the compensation of Peoples' named executive officers as disclosed in the Proxy Statement for the 2012 Annual Meeting of Shareholders, and focused on the continued design of executive compensation programs designed to meet the best interests of the shareholders of Peoples. The results of the advisory vote were 6,790,435 common shares voting for the advisory resolution to approve the named executive officer compensation for 2011, an approval rate of 96% of common shares voted. The Committee believes this result reflects a well-considered executive compensation program.

•

The Committee and Board set corporate goals that are aligned with the best interests of our shareholders. These goals reflected Peoples' expectations of strong net income, increased return on average assets, and improved credit. The Committee then created individual goals for each executive officer in order to align the executive officer's compensation with the goals established for Peoples as a whole. These executive officer performance goals create measurable indicators that allow the Committee to measure the effectiveness of Peoples' executive officers in meeting the goals of Peoples and aligning the executive officers with the best interests of our shareholders.

•

The Committee engaged McLagan to review the estimated life of the 2006 Plan. Under current funding levels, the 2006 Plan would no longer have common shares available for awards in the next two to three years, depending upon the levels of performance achieved and the market value of the common shares expected to be subject to awards. Accordingly, the Committee has determined that it is appropriate to request, as part of a second amendment and restatement of the 2006 Plan, that the shareholders approve an

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•	Approved the revision of Peoples' Performance-Based and Time-Based Restricted Stock Agreements, in order to specifically incorporate covenants regarding non-solicitation and non-disclosure. This change more closely aligns Peoples' long-term incentive practices to the Committee's stated goal of employee retention.

•	Base Salary: Base salaries are benchmarked at the median of those of similarly-situated officers serving with members of Peoples' Peer Group (as defined on page 41). Based upon individual circumstances, actual base salary levels may be higher or lower than this “market median”.

•

Total Cash Compensation: Total cash compensation represents base salary plus any annual cash incentive received. The long-term objective is for total cash compensation to be consistent with the market median of that received by similarly-situated officers serving with members of Peoples' Peer Group for achieving target performance and at or above the 75th percentile of that received by such officers for achieving performance at the 75th percentile of the Peer Group.

•

Total Direct Compensation: The objective is to grant equity-based awards only after performance goals for a fiscal year have been attained. Equity-based awards are granted with one-third of the economic value of such awards granted with three-year pro-rata vesting based upon the achievement of a performance trigger in each of the years, which enhances employee retention and reduces the sensitivity to short-term performance, and two-thirds of the economic value of such awards granted with performance-based vesting, which defers payment until the applicable three-year performance goal is achieved. Total direct compensation is comprised of total cash compensation plus the grant date fair value of equity-based awards. The long-term goal for total direct compensation is that the total direct compensation ranking for each executive officer, compared to the total direct compensation of the similarly-situated officers serving with members of Peoples' Peer Group, will reflect a percentile similar to that when Peoples' performance, as measured by Return on Average Equity, Return on Average Assets, and other common measures used by the financial services industry and especially community banks, is compared to that of Peoples' Peer Group. For example, if target performance is achieved both at the individual and corporate level, it is expected that each executive officer's total direct compensation will approximate the market median of similarly-situated officers serving with members of Peoples' Peer Group and that Peoples' performance under the relevant measures will generally align with the median performance of members of the Peer Group.

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(1)	On September 15, 2012, Indiana Community Bancorp was acquired by Old National Bancorp

•	Base salary;

•	Annual cash incentive compensation;

•	Long-term equity-based incentive compensation;

•	Retirement and other benefits; and

•	Perquisites and other personal benefits.

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(a)	Forty percent (40%) of the participant's average compensation (annual compensation comprised of base salary, bonus, and cash incentive payments providing the highest total for five consecutive years out of the last ten years of service), plus

(b)	Seventeen percent (17%) of the excess of the participant's average compensation in excess of his/her Social Security covered compensation; with

(c)	The sum of the amounts calculated under (a) and (b) multiplied by the total years of service with Peoples up to a maximum of 30.

(a)	Forty percent (40%) of the participant's average compensation (annual compensation providing the highest total for five consecutive years out of the last ten years of service), plus

(b)	Seventeen percent (17%) of the excess of the executive officer's average compensation in excess of his/her Social Security covered compensation; with

(c)	The sum of the amounts calculated under (a) and (b) multiplied by the total years of service with Peoples up to a maximum of 30 and reduced by one-fifteenth for each of the first five years and one-thirtieth for each of the next ten years by which the participant's early retirement date precedes the normal retirement date.

(a)	The Cash Balance Account (as such term is defined in the Retirement Plan) at the end of the prior plan year, plus

(b)	Interest to the earlier of the end of the prior plan year or the end of the month containing the participant's date of termination of employment on the Cash Balance Account as of the end of the prior plan year based on the one-year constant maturity rate for the December preceding the determination year plus 50 basis points, plus

(c)	An annual accrual equal to 2% of compensation for the plan year provided the participant earned a year of service during the plan year.

(a)	The Cash Balance Account at the end of the prior plan year, plus

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(b)	Interest to the earlier of the end of the prior plan year or the end of the month containing the executive officer's date of termination of employment on the Cash Balance Account as of the end of the prior plan year based on the one-year constant maturity rate for the December preceding the determination year plus 50 basis points, plus

(c)	An annual accrual equal to 2% of compensation for the plan year provided the participant earned a year of service during the plan year; and

(d)	The benefit is reduced as follows:

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•	Balance between base salary and cash and equity-based incentive compensation opportunities

•	Maximum payouts which limit overall payout potential

•	Balance between short-term (cash) and long-term (equity-based) incentive compensation opportunities

•	Use of a balanced scorecard approach in setting performance goals with interacting, complementary incentive objectives that discourage emphasis on any single objective

•	Peoples' tone at the top and culture of ethically doing the right thing

•	Grants of only full value equity awards for purposes of potential equity-based long-term incentive compensation

•	Award of restricted shares with a performance-based vesting requirement based upon the achievement of minimum company performance metrics

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(1)	Mr. Sulerzyski became President and Chief Executive Officer of Peoples on April 4, 2011. Prior to that date, he was not employed by Peoples or any of our subsidiaries.

(2)	Mr. Kirtley became Executive Vice President, Chief Credit Officer on August 29, 2011. Prior to that date, he was not employed by Peoples or any of our subsidiaries.

(3)	Mr. Sulerzyski was paid a $50,000 employment sign-on bonus on April 4, 2011.

(4)	On December 30, 2011, each of Mr. Sloane, Mr. McGill and Ms. Schneeberger received a $25,000 payment under the Management Transition Bonus Plan which was in effect during the fiscal year ended December 31, 2011.

(5)	Mr. McGill was paid a $50,000 bonus on October 1, 2012 as part of a retention strategy specific to Mr. McGill.

(6)	Mr. Kirtley was paid a $20,000 employment sign-on bonus on September 26, 2011. Mr. Kirtley received a retention bonus of $20,000 on February 15, 2012 in accordance with his initial employment offer.

(7)

The amounts in column (e) reflect the grant date fair value, computed in accordance with FASB Topic 718 based on the market price of Peoples' common shares on the grant date, for awards of restricted shares pursuant to the 2011 incentive program under Peoples' 2006 Plan, and are reported for the fiscal year during which the restricted shares were granted. The reported amounts exclude the impact of estimated forfeitures related to service-based vesting conditions, as required by applicable SEC rules. See “Note 17. Stock-Based Compensation” of the Notes to the Consolidated Financial Statements filed as part of Item 8 of Part II of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

(8)

On May 2, 2011, Mr. Sulerzyski was granted 30,000 restricted shares, The restrictions lapsed as to 15,000 common shares on December 30, 2011, and will lapse as to 7,500 common shares on each of May 2, 2013 and May 2, 2014 if Mr. Sulerzyski remains employed by Peoples on the applicable date. The amount reported reflects the grant date fair value, computed in accordance with FASB Topic 718 based on the market price of Peoples' common shares on the grant date. The reported amount excludes the impact of estimated forfeitures related to service-based vesting conditions, as required by applicable SEC rules. See “Note 18. Stock-Based Compensation” of the Notes to the Consolidated Financial

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(9)

The amounts in column (e) reflect the grant date fair value, computed in accordance with FASB Topic 718 based on the market price of Peoples' common shares on the grant date, for awards of restricted shares pursuant to the 2010 incentive program and Peoples' 2006 Plan, and are reported for the fiscal year during which the restricted shares were granted. The reported amounts exclude the impact of estimated forfeitures related to service-based vesting conditions, as required by applicable SEC rules. See “Note 18. Stock-Based Compensation” of the Notes to the Consolidated Financial Statements filed as part of Item 8 of Part II of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

(10)

The amount reported represents the total of two separate equity grants to Mr. McGill. With respect to the first grant, the sum of $32,007 in column (e) reflects the grant date fair value, computed in accordance with FASB Topic 718 based on the market price of Peoples' common shares on the grant date, for awards of restricted shares pursuant to the 2012 incentive program and Peoples' 2006 Plan with a three-year time-based vesting period as to the restricted shares awarded. This award is reported for the fiscal year during which the restricted shares were granted. The reported amount excludes the impact of estimated forfeitures related to service-based vesting conditions, as required by applicable SEC rules. See “Note 17. Stock-Based Compensation” of the Notes to the Consolidated Financial Statements filed as part of Item 8 of Part II of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2012. With respect to the second grant on October 30, 2012, Mr. McGill was granted 15,000 restricted shares. The restrictions will lapse as to 5,000 common shares on each of October 30, 2013, October 30, 2014, and October 30, 2015 if Mr. McGill remains employed by Peoples on the applicable dates. The grant date fair value for this award was $317,850.

(11)

On September 1, 2011, Mr. Kirtley was granted 4,000 restricted shares. The restrictions lapsed as to 2,000 common shares on September 1, 2012, and will lapse as to 2,000 common shares on September 1, 2013 if Mr. Kirtley remains employed by Peoples on that date. The amount reported reflects the grant date fair value, computed in accordance with FASB Topic 718 based on the market price of Peoples' common shares on the grant date. The reported amount excludes the impact of estimated forfeitures related to service-based vesting conditions, as required by applicable SEC rules. See “Note 18. Stock-Based Compensation” of the Notes to the Consolidated Financial Statements filed as part of Item 8 of Part II of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

(12)	The amounts in column (g) represent cash incentives earned under the incentive program, and are reported for the fiscal year with respect to which the cash incentives were earned. The amounts shown for 2012 were paid February 22, 2013. The amounts shown for 2011 were paid February 24, 2012. The amounts shown for 2010 were paid March 11, 2011.

(13)

The amounts in column (h) represent the increase in the actuarial present value of the named executive officer's accumulated benefits under Peoples' pension plan (the Retirement Plan) determined using assumptions consistent with those used in “Note 12. Employee Benefit Plans” of the Notes to the Consolidated Financial Statements filed as part of Item 8 of Part II of Peoples' Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and include amounts the executive officer may not be entitled to receive because such amounts are not vested. Mr. Sulerzyski and Mr. Kirtley do not participate in the Peoples Retirement Plan. The amount of interest accrued on the cumulative amount of cash incentives deferred by each executive officer under the terms of the Amended and Restated Incentive Award Plan is also included in column (h) since the interest rate was above-market or preferential. Ms. Schneeberger participates in the Amended and Restated Incentive Award Plan.

(14)

All other compensation for each individual for 2012 includes: (a) Mr. Sulerzyski - 401(k) Plan company match in the amount of $10,000, $448 in country club dues, $95 in fitness reimbursement and $1,250 wellness incentive payment; (b) Mr. Sloane - 401(k) Plan company match in the amount of $9,718 and $1,250 wellness incentive payment; (c) Mr. McGill - 401(k) Plan company match in the amount of $10,000, $3,254 in country club dues, Executive Health Program payments made on his behalf in the amount of $1,231, and $1,250 wellness incentive payment; (d) Mr. Kirtley - 401(k) Plan company match in the amount of $9,187, Executive Health Program payments made on his behalf in the amount of $3,292, $64 in fitness reimbursement, temporary living expenses in the amount of $825, and $1,250 wellness incentive payment; and (e) Ms. Schneeberger - 401(k) Plan company match in the amount of $9,551 and $1,250 wellness incentive payment.

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(i)	the Peoples Bancorp Inc. 1995 Stock Option Plan (the “1995 Plan”);

(ii)	the Peoples Bancorp Inc. 1998 Stock Option Plan (the “1998 Plan”);

(iii)	the Peoples Bancorp Inc. 2002 Stock Option Plan (the “2002 Plan”);

(iv)	the Peoples Bancorp Inc. Amended and Restated 2006 Plan; and

(v)	the Peoples Bancorp Inc. Second Amended and Restated Deferred Compensation Plan for Directors of Peoples Bancorp Inc. and Subsidiaries (as amended, the “Deferred Compensation Plan for Directors”).

(1)

Includes an aggregate of 124,443 common shares issuable upon exercise of options granted under the 1995 Plan, the 1998 Plan and the 2002 Plan and options and stock appreciation rights granted under the 2006 Plan and 96,596 restricted common shares subject to time-based or performance-based vesting restrictions, and 74,391 common shares allocated to participants' bookkeeping accounts under the Deferred Compensation Plan for Directors.

(2)

Represents weighted-average exercise price of outstanding options granted under the 1995 Plan, the 1998 Plan and the 2002 Plan and options and stock appreciation rights granted under the 2006 Plan. The weighted-average exercise price does not take into account the common shares allocated to participants' time-based or performance-based restricted stock awards or bookkeeping accounts under the Deferred Compensation Plan for Directors.

(3)

Includes 296,060 common shares remaining available for future grants under the 2006 Plan at December 31, 2012. No common shares were available for future grants under the 1995 Plan, the 1998 Plan and the 2002 Plan at December 31, 2012. No amount is included for potential future allocations to participants' bookkeeping accounts under the Deferred Compensation Plan for Directors since the terms of the Deferred Compensation Plan for Directors do not provide for a specified limit on the number of common shares which may be allocated to participants' bookkeeping accounts.

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(1)

Annual cash incentive potential available for payment through the incentive program if the indicated level of performance was achieved for the 2012 fiscal year. Refer to the discussion under the caption “2012 Executive Compensation Components - Cash and Equity-Based Incentive Program” on page 42 of “EXECUTIVE COMPENSATION: COMPENSATION DISCUSSION AND ANALYSIS” for additional information regarding the incentive program. The annual cash incentive earned for the 2012 fiscal year is reported in column (g) of the SUMMARY COMPENSATION TABLE FOR 2012.

(2)

Economic value of equity-based grants available for award through the 2006 Plan if the indicated level of performance was achieved for the 2012 fiscal year. Equity-based incentive awards are denominated in dollars, rather than number of common shares. As a result, the threshold, target and maximum amounts are shown in “dollars” rather than the “number of common shares.” At the time of payout, the economic value of the actual award earned is to be translated into awards of restricted shares to be settled in common shares under Peoples' 2006 Plan. The awards are made after results in respect of the fiscal year's performance goals have been measured, and awards were granted on January 29, 2013. Refer to the discussion under the caption “2012 Executive Compensation Components - Cash and Equity-Based Incentive Program” on page 42 of “EXECUTIVE COMPENSATION: COMPENSATION DISCUSSION AND ANALYSIS” for additional information regarding grants of equity-based awards.

(3)

The number of common shares shown in column (j) reflects the aggregate number of restricted shares granted through the incentive program and Peoples' 2006 Plan on January 31, 2012 (with respect to Mr. Sulerzyski) and February 7, 2012 (with respect to the other named executive officers), based upon corporate and individual performance for the 2011 fiscal year. One-third of the economic value of the shares was awarded in the form of time-based restricted shares, using the closing price of Peoples' common shares on the grant date. The remaining two-thirds of the shares was awarded in the form of performance-based restricted shares, using the closing price of Peoples' common shares as of the grant date. The named executive officer has the right to vote the common shares underlying the restricted shares and is entitled to receive dividends paid with respect to the underlying common shares at the same level as paid to other shareholders of Peoples; however, if any dividends are paid in common shares of Peoples, those common shares will be subject to the same restrictions on transfer as the restricted shares with respect to which they were issued. Refer to the discussion under the caption “2012 Executive Compensation Components - Cash and Equity-Based Incentive Program” on

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(4)	The number of common shares shown in column (j) with respect to Mr. McGill reflects the grant of 15,000 restricted shares made to Mr. McGill on October 30, 2012. The restrictions will lapse as to 5,000 of these common shares on October 30, 2013, October 30, 2014 and October 30, 2015 if Mr. McGill remains employed by Peoples on the applicable date.

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(1)	Represents common shares underlying stock options granted to Ms. Schneeberger.

(2)	SARs covering 938 common shares to be settled in common shares were approved by the Compensation Committee on February 8, 2007, granted on February 13, 2007, and vested February 13, 2010. SARs covering 1,165 common shares to be settled in common shares were approved by the Compensation Committee on February 14, 2008, granted on February 20, 2008, and vested on February 20, 2011.

(3)	Restricted shares were approved by the Compensation Committee on March 8, 2011, granted on May 2, 2011, with the vesting of those restricted shares to occur as follows if Mr. Sulerzyski remains employed by Peoples on that

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(4)	Restricted shares were approved by the Compensation Committee on December 13, 2011, and granted on January 31, 2012, with respect to individual performance for the 2011 fiscal year. The restricted shares had a time-based vesting requirement and will vest on January 31, 2014.

(5)

Restricted shares were approved by the Compensation Committee on December 13, 2011, and granted on January 31, 2012, with respect to individual performance for the 2011 fiscal year. The restricted shares have a performance-based vesting requirement and will vest if the cumulative earnings per common share for the 2011, 2012 and 2013 fiscal years are greater than or equal to $2.83. These shares will vest in 2014, subject to certification of achievement of the performance goal by the Committee.

(6)	Restricted shares were approved by the Compensation Committee on February 23, 2011, granted on February 23, 2011, and vested on February 23, 2013.

(7)	Restricted shares were approved by the Compensation Committee on February 23, 2011 and granted on February 23, 2011. These restricted shares had a performance-based vesting requirement and vested on February 28, 2013 due to the cumulative earnings per common share for the 2010, 2011, and 2012 fiscal years achieving the vesting requirement of being greater than or equal to $3.10.

(8)	Restricted shares were approved by the Compensation Committee on February 7, 2012, and granted on February 7, 2012, with respect to individual performance for the 2011 fiscal year. The restricted shares have a time-based vesting requirement and will vest on February 7, 2014.

(9)

Restricted shares were approved by the Compensation Committee on February 7, 2012, and granted on February 7, 2012, with respect to individual performance for the 2011 fiscal year. The restricted shares have a performance-based vesting requirement and will vest if the cumulative earnings per common share for the 2011, 2012 and 2013 fiscal years are greater than or equal to $2.83. These shares will vest in 2014, subject to certification of achievement of the performance goal by the Committee.

(10)	Restricted shares were approved by the Compensation Committee on September 13, 2012, and granted on October 30, 2012. One third of these restricted shares will vest on each of the first, second, and third anniversaries of the grant date, provided Mr. McGill remains employed by Peoples on each applicable date.

(11)	Restricted shares were approved by the Compensation Committee on August 5, 2011, granted on September 1, 2011, and will vest on September 1, 2013, provided Mr. Kirtley remains employed by Peoples on that date.

(12)

Restricted shares were approved by the Compensation Committee on January 24, 2013, and granted on January 29, 2013, with respect to individual performance for the 2012 fiscal year. They were considered “unearned” as they would not have been granted until after the end of the 2012 fiscal year. One-third of the restricted shares has a time-based vesting requirement and will vest on January 29, 2014 if the named executive officer remains employed by Peoples on that date. One-third will vest on January 29, 2015 if the named executive officer remains employed by Peoples on that date. One-third will vest on January 29, 2016 if the named executive officer remains employed by Peoples on that date. The vesting on each anniversary of the grant date is also subject to the requirements that Peoples maintain a well-capitalized status under applicable regulatory standards and reports net income in the prior fiscal year. The market value of the unearned stock awards is based on the closing price of Peoples' common shares as reported on The NASDAQ Global Select Market® on January 29, 2012, which was $21.82.

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(1)	Messrs. Sulerzyski and Kirtley were employed by Peoples after the Retirement Plan was closed to new entrants and, therefore, are not and will not be participants in the Retirement Plan.

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(1)	Messrs. Sulerzyski, Sloane, McGill, and Kirtley do not participate in the Pre-2010 Incentive Plan.

(2)

The amount in column (d) represents the aggregate earnings on the accumulated mandatory and voluntary deferrals of cash incentives. The interest rate for 2012 was 4.76%. This amount is included in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column totals for 2012 for Ms. Schneeberger reported in the “SUMMARY COMPENSATIONTABLE FOR 2012” on page 50. This amount is also included as part of the aggregate earnings reported in the “Total” column for Ms. Schneeberger.

(3)	This amount represents the accumulated voluntary deferrals of cash incentives and earnings thereon.

•	all vested equity-based awards earned through the long-term equity-based incentive compensation programs;

•	all cash incentives voluntarily deferred under the Pre-2010 Incentive Plan. This amount for Ms. Schneeberger ($19,895) is included in the table under the heading “NON-QUALIFIED DEFERRED COMPENSATION FOR 2012” beginning on page 57 within the “Aggregate Balance at Last Fiscal Year-End” column;

•	the balance of the executive officer's account in the Peoples 401(k) Plan;

•	pay for a pro rata portion of unused paid time off, commensurate with the length of service in the current calendar year, if the executive officer has been employed by Peoples for three or more years (except in the case of termination for cause); and

•

amounts accrued and vested under the executive officer's account in the Retirement Plan (Peoples' pension plan). These amounts are included in the table under the heading “PENSION BENEFITS FOR 2012” on page 57 and shown in the “Present Value of Accumulated Benefit” column. Ms. Schneeberger has met the five or more years of service requirement and would be paid the amount shown for her upon termination of employment.

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•	all previously unvested equity-based awards would vest; and

•	all previously unvested mandatory deferrals under the Pre-2010 Incentive Plan would vest.

•	a “person” or “group” (as defined in Section 409A of the Internal Revenue Code) acquires ownership of shares of Peoples that, together with shares held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the shares of Peoples;

•	any person or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of shares of Peoples possessing 35% or more of the total voting power of the shares of Peoples;

•	a majority of the members of Peoples' Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of Peoples' Board prior to the date that such appointments or elections are made; or

•	any person or group acquires (or has acquired) during the 12-month period ending on the date of the most recent acquisition by such person or group, assets from Peoples that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of Peoples immediately prior to such acquisition or acquisitions.

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(1)	If Ms. Schneeberger elected to retire as of December 31, 2012, as she had reached retirement eligibility, her unvested restricted shares would vest upon retirement.

(2)	Under the terms of the change in control agreements, the named executive officer would continue to participate in life, medical, and dental insurance during the term of his or her non-compete agreement --15 months for Mr. Sulerzyski, and 12 months for each of the other named executive officers.

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•	Ensure alignment with long-term shareholder interests;

•	Ensure Peoples can attract and retain outstanding director candidates;

•	Recognize the substantial time commitments necessary to oversee the affairs of Peoples; and

•	Support the independence of thought and action expected of directors.

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•	Termination of service as a director of Peoples due to death, disability, or retirement: The restrictions on the restricted common shares lapse and the restricted common shares become fully vested on the termination date.

•	Termination of service as a director of Peoples for cause or any reason other than retirement, death or disability: Any non-vested restricted common shares are forfeited on the termination date.

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(1)	Charles W. Sulerzyski, who serves as President and Chief Executive Officer of Peoples and Peoples Bank, is not included in this table. Mr. Sulerzyski receives no compensation in his capacity as a director of Peoples and Peoples Bank.

(2)

Amounts in column (b) represent the aggregate cash quarterly and meeting fees (including travel fees paid or payable to each director). Included in these amounts are voluntary elective deferrals of fees made pursuant to the Deferred Compensation Plan for Directors. Deferrals of these fees for 2012 were: $10,600 for Ms. Abraham; $2,600 for Mr. Dimit; $23,700 for Dr. Jones; and $17,025 for Mr. Mead. All other amounts representing the cash portion paid for quarterly fees, meeting fees, and travel fees for 2012 are included in this table. Pursuant to the 2012 compensation structure for directors, the portion of these fees paid in stock awards is detailed in column (c). All directors identified in this table are, or during their period of service were, non-employee directors of both Peoples and Peoples Bank and were compensated through retainer fees, Board meeting attendance fees and Board committee meeting attendance fees, as appropriate, for their service to both boards.

(3)

Amounts in column (c) represent the aggregate grant date fair value of common shares issued to the directors as the equity portion of the quarterly and meeting fees for services rendered as a director of Peoples, computed in accordance with FASB Topic 718. The grant date fair value related to each issuance of common shares represented the closing price of Peoples' common shares on the NASDAQ Global Select Market ® on the date of issuance times the number of common shares issued.

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(4)

The aggregate number of common shares underlying unexercised nonqualified stock options outstanding at December 31, 2012 were: (a) Carl L. Baker, Jr. - 4,665; (b) George W. Broughton - 3,510; (c) Wilford D. Dimit - 4,665; (d) Richard Ferguson - 2,355; (e) Dr. Brenda F. Jones - 2,334; (f) David L. Mead - 600; (g) Susan D. Rector - none; (h) Theodore P. Sauber - 2,355; (i) Paul T. Theisen - 4,665; and (j) Thomas J. Wolf - 3,510. All of these outstanding nonqualified stock options had vested prior to January 1, 2008.

(5)	Amounts in column (f) represent 2012 earnings on each participating director's deferred fees pursuant to the Deferred Compensation Plan for Directors.

(6)	Amounts in column (g) represent the amount of Peoples' 2012 annual payment of premiums for group term life insurance for all directors.

(7)	Tara M. Abraham became a director of Peoples and Peoples Bank on May 24, 2012.

(8)	Wilford D. Dimit retired as a director of Peoples and Peoples Bank on February 3, 2012.

(9)	James S. Huggins became a director of Peoples and Peoples Bank on February 23, 2012.

(10)	Paul T. Theisen retired as a director of Peoples and Peoples Bank on July 26, 2012.

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(1)	Audit Fees pertain to professional services rendered in connection with the audit of Peoples' annual consolidated financial statements and review of the consolidated financial statements included in Peoples' Quarterly Reports on Form 10-Q, as well as internal control testing for compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

(2)	Audit-Related Fees pertain to services rendered in connection with statutory audits and accounting consultation.

(3)	Tax Fees pertain to services rendered for tax planning and advice, tax compliance, and assistance with tax audits and appeals.

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•	Earnings per share (actual or targeted growth);

•	Net income after capital costs;

•	Net income (before or after taxes);

•	Return measures (including, but not limited to, return on average assets, risk-adjusted return on capital, return on average equity, pre-provision net revenue, or return on tangible common equity);

•	Efficiency ratio;

•	Full-time equivalency control;

•	Stock price (including, but not limited to, growth measures, share price appreciation, or total shareholder return);

•	Non-interest income compared to net interest income ratio;

•	Expense targets (including, but not limited to, reduction in or maintenance of non-interest expense;

•	Operating efficiency;

•	Economic value added or EVA(R);

•	Credit quality measures;

•	Customer satisfaction measures;

•	Loan growth;

•	Deposit growth;

•	Net interest margin;

•	Fee income;

•	Operating expense;

•	Balance sheet measures including assets, loans, charge-offs, loan loss reserves, non-performing assets, deposits, asset quality levels, and investments;

•	Balance sheet management;

•	Interest income;

•	Investment management;

•	Maintenance or improvement of net interest income;

•	Market capitalization;

•	Market share;

•	Non-interest income growth;

•	Productivity ratios;

•	Revenues;

•	Risk management measures including interest-sensitivity gap levels, regulatory compliance, satisfactory internal or external audits, and financial ratings; and

•	Tangible common equity.

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