<PAGE>
 
                        JUNIATA VALLEY FINANCIAL CORP.
                            Bridge and Main Streets
                              Post Office Box 66
                             Mifflintown, PA 17O59
                           Telephone (717) 436-8211

                   NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                         TO BE HELD ON APRIL 16, 1996

TO OUR SHAREHOLDERS:

     NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
Juniata Valley Financial Corp. ("JVF") will be held at 10:30 a.m. on April 16,
1996, at the Lewistown Branch Office of The Juniata Valley Bank (the "Bank"),
for the purpose of considering and voting upon the following matters:

     1.  Election of Directors. The election of three Class C Directors listed
         ---------------------
in Proxy Statement dated March 14, 1996, accompanying this Notice. These
Directors will serve until the 1999 Annual Meeting.

     2.  Amendment to Amended and Restated Articles of Incorporation. To act
         -----------------------------------------------------------
upon a proposal to increase the number of authorized shares of Common stock, par
value $1.00 per share, from 2,000,000 to 5,000,000 shares.

     3.  Juniata Valley Financial Corp. Employee Stock Purchase Plan. To act
         -----------------------------------------------------------
upon a proposal to adopt the Juniata Valley Financial Corp. Employee Stock
Purchase Plan, which will permit employees of the Bank to purchase shares of the
Common stock, par value $1.00 per share, of JVF.

     4.  Other Business. Such other business as may be properly brought before
         --------------
the Annual Meeting of Shareholders or any adjournment or adjournments thereof.

     Information regarding the matters to be acted upon at the meeting is
contained in the Proxy Statement accompanying this Notice.

     IN ACCORDANCE with the statutes in such case made and PROVIDED only those
holders of record of Common stock of JVF at the close of business on March 13,
1996 (the "RECORD DATE"), are entitled to notice of and to vote at the Annual
Meeting of Shareholders and any adjournment or adjournments thereof. The Stock
Transfer Books of JVF will not be closed.

                                    BY ORDER OF THE BOARD OF DIRECTORS,


                                    RONALD H. WITHERITE
                                    Secretary

Mifflintown, Pennsylvania 
March 14, 1996

     THE MANAGEMENT OF JVF REQUESTS THAT YOU SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT IN THE PREPAID ENVELOPE PROVIDED. THIS PROXY WILL NOT BE USED IF
YOU ARE PRESENT AND DESIRE TO VOTE IN PERSON.
<PAGE>
 
                        JUNIATA VALLEY FINANCIAL CORP. 

                               PROXY STATEMENT 
                                MARCH 14, 1996 

                              GENERAL INFORMATION


     This Proxy Statement (the "Proxy Statement") is being furnished in
connection with the solicitation by Management of Juniata Valley Financial Corp.
("JVF"), a corporation organized under the laws of the Commonwealth of
Pennsylvania, of proxies to be voted at the Annual Meeting of Shareholders of
JVF to be held on April 16, 1996 at 10:30 a.m. prevailing time, and at any and
all adjournments or postponements thereof. This Proxy Statement and the enclosed
Form of Proxy (the "Proxy") are first being sent to shareholders of JVF on or
about March 14, 1996.

     The costs of preparing, printing and mailing the Proxy and all materials
used in the solicitation thereof will be borne by JVF. In addition to use of the
mails, proxies may be solicited by officers, directors and employees of JVF
personally, by telephone or by telegraph.

     JVF's executive offices are located at Bridge and Main Streets,
Mifflintown, Pennsylvania 17059, and its telephone number is (717) 436-8211.
JVF's mailing address is P.O. Box 66, Mifflintown, Pennsylvania 17059.

Date by which Security Holder Proposals must be Received to be Presented at Next
Annual Meeting of Shareholders

     Proposals of security holders of JVF intended to be presented at the next
annual meeting of shareholders of JVF must be received by JVF for inclusion in
JVF's Proxy Statement and Form of Proxy relating to that meeting by November 15,
1996.

     If the date of the next Annual Meeting of Shareholders of JVF is advanced
or delayed by more than 30 days from April 15, 1997, security holders will be
timely informed of the change of the Annual Meeting of Shareholders and the date
by which proposals of security holders must be received.

                            PURPOSES OF THE MEETING

     The Annual Meeting of Shareholders will be held for the purpose of (i)
electing three (3) Class C Directors to serve until the Annual Meeting of 1999;
(ii) to act upon a proposal to increase the number of authorized shares of JVF
common stock, par value $1.00 per share, from 2,000,000 to 5,000,000 shares;
(iii) to act upon a proposal to adopt the Juniata Valley Financial Corp.
Employee Stock Purchase Plan, which will permit employees of the Bank to
purchase shares of the common stock, par value $1.00 per share, of JVF; and (iv)
transacting such other business as may properly be brought before the meeting or
any adjournment thereof.

                                    VOTING

Voting; Revocation of Proxies

   Each Proxy may be revoked at any time before its exercise by, among other
methods, giving written notice to the Secretary of JVF. A subsequently dated
Proxy will, if presented to the Secretary
<PAGE>
 
of JVF, revoke a prior dated Proxy. Any shareholder of JVF may attend the
meeting and vote in person whether or not he has previously given a Proxy.

     The enclosed Proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the Annual Meeting of
Shareholders: (i) matters which the Board of Directors does not know, a
reasonable time before the proxy solicitation, are to be presented at the
meeting; (ii) approval of the minutes of a prior meeting of the shareholders, if
such approval does not amount to ratification of the action taken at that
meeting; and (iii) matters incident to the conduct of the meeting. In connection
with such matters, the persons named in the enclosed Proxy will vote in
accordance with their best judgment.

     The Board of Directors of JVF is not presently aware of any matters (other
than procedural matters) which will be brought before the Annual Meeting of
Shareholders which are not referred to in the Notice of Annual Meeting of
Shareholders. If other business is properly brought before the Annual Meeting of
Shareholders, the persons named in the Proxies will act or vote in accordance
with their judgment.

Vote Required; Shares Entitled to Vote

     The presence in person or by proxy of the holders of a majority of the
outstanding shares of JVF's common stock will constitute a quorum for the
transaction of business at the Annual Meeting of Shareholders. At the close of
business on the Record Date, there were 1,113,001 shares of JVF's common stock
outstanding. Each share of JVF's common stock outstanding on the Record Date is
entitled to one vote on all matters, including the election of directors, to
come before the Annual Meeting.

     The Trust Department of The Juniata Valley Bank (the "Bank") as sole
trustee, holds 49,698 shares of stock which may not be voted in the election of
directors of JVF.

     Management of JVF in the aggregate beneficially owned 4.74% of the common
stock of JVF and the Bank's Trust Department as corporate fiduciary owned 4.50%
of the outstanding common stock of JVF as of the Record Date. To the knowledge
of management of JVF, no shareholder beneficially owned 5% or more of the
outstanding common stock of JVF on the Record Date.

     All matters which are expected to come before the shareholders, including
election of directors, will require the affirmative vote of the holders of a
majority of JVF's outstanding common stock represented at the meeting, if a
quorum is present.

     At the Annual Meeting, the Judges of Election will manually tabulate all
votes which are cast in person or by proxy. Those shareholders wishing to vote
in person will be provided ballots with which to vote.

     Voting is an important right of shareholders. If a shareholder abstains or
otherwise fails to cast a vote on any matter brought before the shareholders,
the Pennsylvania Business Corporation Law provides that notwithstanding any
intention to the contrary, the abstention or failure is not a vote and will not
be counted. This is true of broker nonvotes, as well as nonvotes by other
shareholders.


                                      -2-
<PAGE>
 
                         ELECTION OF DIRECTORS OF JVF

     The Bylaws of JVF provide that the Board of Directors may, from time to
time, fix the number of directors and their respective classifications. The
number of directors that shall constitute the whole Board of Directors shall be
not less than five nor more than 25. The Bylaws also provide that the Board of
Directors shall be classified into three classes as nearly equal in number as
possible, each class to be elected for a term of three years. Each class shall
be elected in a separate election. At each subsequent annual meeting of
Shareholders, successors to the class of directors whose term shall then expire
shall be elected to hold office for a term of three years, so that the term of
office of one class of directors shall expire in each year.

     Nomination for elections to the Board of Directors may be made by the Board
of Directors or by any holder of the common stock of JVF entitled to vote at the
election of directors. Nominations, other than those made by or on behalf of the
existing management of JVF, shall be made in writing and shall be delivered or
mailed to the secretary of JVF not less than 45 days prior to the date of any
meeting of shareholders called for the election of directors. Such notification
shall contain the following information to the extent known by the notifying
shareholder: (a) the name and address of each proposed nominee; (b) the age of
each proposed nominee; (c) the principal occupation of each proposed nominee;
(d) the number of shares of JVF owned by each proposed nominee; (e) total number
of shares that, to the knowledge of the notifying shareholder, will be voted for
each proposed nominee; (f) the name and residence address of the notifying
shareholder; and (g) the number of shares of JVF owned by the notifying
shareholder. Any nomination for director not made in accordance with the above
procedure shall be disregarded by the Chairman of the meeting, and votes cast
for each such nominee shall be disregarded by the Judge of Election.

     It is the intention of the persons named in the Proxy to vote for the
election of the three individuals listed as Class C Directors to the class to
which said directors have been designated, to serve until the 1999 Annual
Meeting of Shareholders.

     In absence of instructions to the contrary, proxies will be voted in favor
of the election of the management's nominees. In the event any nominee should
become unavailable, it is intended that the proxies will be voted for such
substitute nominee as may be nominated by management. Management has no present
knowledge that any of the nominees will be unavailable to serve.

     In February, 1996, pursuant to the Bylaws of JVF, the number of Directors
was decreased from 11 to 10. This decrease was in response to the resignation of
Darwin C. Pomeroy, whose term will expire at the Annual Meeting.

     Each nominee for the position of Class C Director is currently a director
of JVF and its sole wholly-owned subsidiary, The Juniata Valley Bank. All Class
C Directors were elected directors of JVF at the 1993 Annual Meeting of
Shareholders of JVF.

     The following table sets forth the name and age of each nominee to each
class of the Board of Directors of JVF, as well as the nominee's business
experience, including principal occupation for the past five years, the period
during which he has served as a director of JVF, the Bank, and the number and
percentage of outstanding shares of common stock of JVF beneficially owned by
said nominee as of the Record Date.


                                      -3-
<PAGE>
 
<TABLE>
<CAPTION>
                             Business Experience                      
                             Including Principal                      Amount and    Percentage 
                                  Occupation                           Nature of        of     
                                   for the                Director    Beneficial    Outstanding                
       Name and Age            Past Five Years            Since/1/    Ownership/2/  Stock Owned 
       ------------            ---------------            -----       ---------     -----------
<S>                          <C>                          <C>         <C>           <C>
CLASS C Directors to be elected for a three-year term ending in 1999.

Dale G. Nace                 Owner, Glenn Nace              1992         805          .07%
 Age 51                      Plumbing & Heating;    
                             GlenDale Storage,      
                             Millerstown, PA        

Edward R. Rhodes             Senior Partner                 1992         520          .05%
 Age 67                      E. R. Rhodes & Son      
                             Lewistown, PA          

Harold B. Shearer            Self-Employed Farmer           1988       3,131          .28%
 Age 60                      East Waterford, PA     
                                                    
CLASS B Directors to continue in office to 1998.    
                                                    
Harry B. Fairman, Jr.        President of Hilltop           1983       3,725          .33%
 Age 68                      Oil, Inc.              
                             Mifflintown, PA        

Don E. Haubert               CEO/Chairman of                1975       8,997          .81%
 Age 56                      the Board, S & A
                             Custom Built Homes, Inc. 
                             Contractor, Mifflintown, PA

John A. Renninger            President of A.D.              1979       7,398          .66%
 Age 59                      Renninger Lumber Co.
                             Richfield, PA

Ronald H. Witherite          Owner, Ron's IGA               1992         768          .07%
 Age 58                      Fruit Market, Inc.
                             Reedsville, PA
 
CLASS A Directors to continue in office to 1997.

A. Jerome Cook               President and CEO              1976       3,651          .33%
 Age 55                      of The Juniata Valley
                             Bank and Juniata Valley
                             Financial Corp.
</TABLE>


                                      -4-
<PAGE>
 
<TABLE> 
<S>                          <C>                          <C>         <C>           <C>
John E. Groninger            President of John E.           1971      12,653         1.13%
 Age 70                      Groninger, Inc., Con-
                             tractor, Mexico, PA,
                             Director of Consumers
                             Financial Corporation,
                             Camp Hill, PA, a life
                             insurance company

Karl E. Guss                 Funeral Director               1974      11,716         1.05%
 Age 68                      with Guss Funeral,
                             Home, Mifflintown, PA
</TABLE> 

/1/  Includes period prior to the formation of JVF (1983) during which named
     person served as director of the Bank. Each director of JVF also serves as
     a director of the Bank.

/2/  The securities "beneficially owned" by an individual are determined in
     accordance with the definition of "beneficial ownership" set forth in the
     regulations of the Securities and Exchange Commission. Accordingly, they
     may include securities owned by or for, among others, the wife and/or minor
     children of the individual and any other relative who has the same home as
     such individual, as well as other securities as to which the individual has
     or shares voting or investment power or has the right to acquire under
     outstanding stock options within 60 days after March 14, 1996. Beneficial
     ownership may be disclaimed as to certain of the securities.


     The following are all shares owned beneficially by all directors and
     principal officers as a group:

<TABLE> 
<CAPTION> 
                              Amount and Nature of
                              Beneficial Ownership
                              --------------------
         Title of Class       Direct     Indirect       Percentage
         --------------       ------     --------       ----------
         <S>                  <C>        <C>            <C> 
         Common               46,715     6,649          4.79%
</TABLE> 

         PROPOSED AMENDMENT TO INCREASE NUMBER OF SHARES OF AUTHORIZED
                                  COMMON STOCK

     JVF is currently authorized to issue 2,500,000 shares of stock, which is
divided into two classes. Authorized stock consists of 2,000,000 shares of
common stock with a par value of $1.00 per share, and 500,000 of preferred stock
without a par value. A copy of JVF's currently effective Amended and Restated
Articles of Incorporation are attached to this Proxy Statement as Exhibit "A".

     The Board of Directors of JVF has authority to fix the voting rights,
designations, preferences, qualifications, privileges and other features of
preferred stock. JVF has not issued any preferred stock, and there is no plan at
the present time to issue preferred stock.

     As noted above, at the close of business on March 14, 1996, there were
issued and outstanding 1,113,001 shares of common stock.


                                      -5-
<PAGE>
 
     The additional shares of authorized JVF common stock for which shareholder
approval is sought would be part of the existing class of common stock. When and
if issued, this common stock would have the same rights and privileges as shares
of common stock presently issued and outstanding.  The Board of Directors
currently has no plan, arrangement or understanding regarding the issuance of
additional shares of common stock, except in connection with dividend
reinvestments, employee stock purchase plans and stock dividends to existing
shareholders.

     The Board of Directors believes that it is desirable to have additional
authorized shares of JVF common stock for use in raising additional capital, for
use in connection with stock dividends, stock splits, employee benefit plans,
and for other general corporate purposes. Having additional authorized common
stock available for issuance in the future would give JVF greater flexibility
and would allow additional shares to be issued without the expense and delay of
a special shareholder's meeting.

     On January 16, 1996, the Board of Directors unanimously adopted a
resolution approving the increase in the number of shares of common stock, and
directed that the matter be presented at the Annual Meeting to the shareholders
of JVF for their approval.

     Under certain circumstances, the issuance of additional shares of JVF
common stock could be used to create voting impediments or to frustrate persons
seeking to effect a takeover or otherwise gain control of JVF. Additional shares
of JVF common stock could be privately sold to purchasers who might side with
the Board of Directors in opposing a hostile takeover attempt. The issuance of
additional shares of JVF common stock could be used to dilute the stock
ownership of a takeover bidder. To the extent that potential takeovers are
discouraged, stockholders may not have opportunity to dispose of all or part of
their stock at a price that may be higher than that prevailing in the market.
However, it is also possible that making additional shares of authorized but
unissued common stock available to the Board of Directors to be issued for the
purposes described above may have the effect of increasing the price offered to
shareholders should a tender offer or exchange offer take place.

    Because JVFC shareholders would not be entitled to preemptive rights to
purchase additional shares, their shareholder interests in JVFC are potentially
subject to dilution in the event JVFC issues additional shares of JVFC common
stock or preferred stock to other parties.  Such dilution would occur if the
JVFC Board of Directors determines to offer additional shares of JVFC common
stock for sale to the general public in a non-preemptive rights offering.

     If the shareholders approve the proposed Amendment, Article 5 of the
Amended and Restated Articles of Incorporation of JVF will provide as follows:

          ARTICLE 5: The aggregate number of shares which the Corporation shall
     have authority to issue is 5,500,000 shares divided into two (2) classes
     consisting of 5,000,000 shares of common stock with a par value of $1.00
     per share, and 500,000 shares of Preferred Stock without a par value. The
     Board of Directors shall have the full authority permitted by law to fix by
     resolution full, limited, multiple, or fractional, or no voting rights, and
     such designations and preferences, priorities, qualifications, privileges,
     limitations, restrictions, options, conversion rights, dividend features,
     retirement features, liquidation features, redemption features, or other
     special or relative rights that may be desired for the Preferred Stock and
     any series thereof, and to issue such Preferred Stock from time to time in
     one or more series. The designations, preferences, priorities,
     qualifications, privileges, limitations, restrictions, options, conversion
     rights, dividend 
     
                                      -6-
<PAGE>

     features, retirement features, liquidation features, redemption features,
     and any other special or relative rights of any series of Preferred Stock
     may differ from those of any and all series at anytime outstanding.
     
     The Board of Directors unanimously recommends that shareholders approve the
proposed Amendment to Article 5 of JVF's Articles of Incorporation.


         ADOPTION OF THE JUNIATA VALLEY FINANCIAL CORP. EMPLOYEE STOCK
                                 PURCHASE PLAN

General

     JVF's Board of Directors has unanimously approved the Juniata Valley
Financial Corp. Employee Stock Purchase Plan (the "Plan"), subject to approval
by JVF shareholders. The Board believes that the ability to give employees the
opportunity to purchase stock of JVF is an important factor in attracting and
retaining exceptional individuals as employees and in rewarding existing
employees. The granting of supplemental compensation provides a valuable
incentive to employees in the performance of their duties. The important
features of the Plan are summarized below, but the summary is qualified in its
entirety by express reference to the Plan itself.

     The purpose of the Plan is to provide a method for employees of the Bank to
acquire a proprietary interest in JVF. The Plan is intended to promote the best
interests of JVF by encouraging its employees to acquire stock ownership in JVF.

     The affirmative vote of holders of a majority of the issued and outstanding
common stock of JVF entitled to vote at the meeting is required to approve the
Plan. The full text of the Plan is set forth in Exhibit "B" to this Proxy
Statement. All proxies will be voted "FOR" approval of the Plan except for that
of any shareholder who specifies the contrary on his or her proxy card.

Administration of the Plan

     The Plan is administered by a Committee to be appointed by the Board of
Directors of JVF. No member of the Committee may be eligible for awards under
the Plan. The Committee will consist of no fewer than three (3) members of the
Board of Directors. The Committee shall have plenary authority in its discretion
to interpret and construe any and all provisions of the Plan, to adopt rules and
regulations for administering the Plan, and to make all of the determinations
necessary or advisable for administering the Plan.

     The maximum number of shares which employees may purchase under this Plan
is 100,000. As of March 1, 1996, the closing sale price quotation for shares of
JVF common stock in the over-the-counter market was $35.00 per share.

Eligibility

     An employee of the Bank will be eligible to participate in the Plan if: (i)
he or she has completed ninety (90) days employment; and (ii) he or she is
employed by the Bank on the date the employee's participation in the Plan
becomes effective. Participation will be limited to the extent necessary to
prevent an employee from owning stock, and/or hold outstanding options to
purchase stock, possessing 

                                      -7-
<PAGE>

five (5%) percent or more of the total combined voting power or value of all 
classes of stock of JVF. In addition, participation is prohibited or limited 
if participation permits the participant's right to purchase stock under all 
employee stock purchase plans of JVF to accrue at a rate which exceeds 
Twenty-five Thousand ($25,000.00) Dollars for each calendar year (determined
by the fair market value of the stock at the time the option is granted).
                                      
Options

     On the Commencement Date of each offering (July 1 of each year), a
participant will be granted an option to purchase as many full shares of stock
as he or she will be able to purchase with the aggregate sum of the payroll
deductions deposited into his or her account during that offering. The option
price of stock purchased during each annual offering for a participant shall be
a percentage between eighty-five (85%) percent and one hundred (100%) percent of
the fair market value of the stock on the Commencement Date or the nearest prior
business day to the Commencement Date. The percentage used shall be in the sole
and exclusive discretion of the Board of Directors.

     During a participant's lifetime, options held by the participant shall be
exercised only by that participant.

     If, prior to the expiration of an option exercise term, the participant
ceases to be employed by the Bank (other than by reason of death or disability)
the participant's participation in the Plan will automatically terminate, and
the participant will not be entitled to purchase any shares at the end of the
offering. Any payroll deductions credited to the participant's account will be
returned to the participant. Should the termination of an employee occur because
of the employee's death, the participant's beneficiary may elect either to
withdraw all of the payroll deductions credited to the participant's account
under the Plan or to exercise the participant's option for the purchase of stock
on the next Termination Date (May 15 of each year).

Tax Consequences - Generally

     The Plan is intended to be an "Employee Stock Purchase Plan" as defined in
Section 423 of the Code. There are several tax advantages of an employee stock
purchase plan. First, when an option is granted to an employee, he or she will
not realize taxable income. Second, the employee will not recognize taxable
income on the exercise of the option.

     In order to be eligible for this favorable tax treatment, an employee must
be employed by JVB during the offering period. Additionally, the employee may
not dispose of his or her shares within one (1) year after the date of the
transfer of the stock to him or her or within two (2) years after the date the
option is offered. Under these circumstances, there will be no tax effect upon
JVB (it will not be entitled to tax deduction by reason of the employee's
subscription or purchase, nor will it recognize gain or loss upon the transfer
of the shares to the employee).

     There are tax consequences when an employee disposes of the shares. The tax
treatment of the subsequent disposition of (S) 423 Plan stock depends on whether
the stock was disposed of within the statutory holding period for (S) 423 Plan
stock. The statutory holding period for (S) 423 Plan stock, as discussed above,
is the later of two years after the grant of an option or one year from the date
of transfer of the stock pursuant to the option.

                                    -8-
<PAGE>

     If the employee disposes of stock purchased pursuant to the Plan before the
expiration of the statutory holding period, the employee must recognize as
ordinary income the difference between the stock's fair market value and the
option's exercise price. If the sale or other taxable disposition of stock
occurs after the statutory holding period has expired, the employee's capital
gain on the sale is an amount equal to the excess of the proceeds of the sale
over the employee's basis in the stock.
 
     There is a difference in treatment of an option with an exercise price of
more than 85% and less than 100% of the fair market value of the stock. In this
case, the employee must include in taxable income at time of sale or other
taxable disposition of the stock, or upon the employee's death while still
holding the stock, the lesser of 1) the amount, if any, by which the fair market
value of the stock when the option was granted exceeds the option price; or 2)
the amount, if any, by which the stock's fair market value at the time of the
disposition or death exceeds the exercise price paid.

     JVB may not deduct the difference between the fair market value of the
option stock and the option exercise price if the option is one issued pursuant
to a (S) 423 Plan. However, if there is a disqualifying disposition (i.e.,
disposing of the stock in violation of the statutory holding period), the
employer will be entitled to the compensation deduction to which it would be
entitled if the option had been a non-qualified option.

Amendment of the Plan

     The Board of Directors shall have complete power and authority to terminate
or amend the Plan. No termination, modification, or amendment of the Plan may
adversely affect the rights under outstanding options.

                        MANAGEMENT OF JVF AND THE BANK

Board of Directors

     The Board of Directors of JVF and the Bank are identical. The Board of
Directors of JVF has not appointed any committees as of this date. JVF has
utilized the Bank's committees.

Executive Officers

     The following table sets forth the executive officers of JVF, their ages,
their positions with JVF and the beneficial ownership (as determined in
accordance with the rules and regulations of the Securities and Exchange
Commission) of common stock of JVF by each of such persons. Share information is
stated as of March 14, 1996.

<TABLE> 
<CAPTION> 
                                            Amount and         Percentage
                                            Nature of              of
                                            Beneficial         Outstanding
Name and Age        Title                   Ownership             Stock
------------        -----                   ---------             -----
<S>                 <C>                     <C>                   <C> 
A. Jerome Cook      Chairman and CEO          3,651               .33%
 Age 55             of JVF and the Bank

</TABLE> 

----------
                                     -9-
<PAGE>

Board Personnel Committee Report on Executive Compensation

     JVF does not have a Compensation Committee. The Board of Directors has
delegated to the Personnel Committee initial review and recommendations for
executive compensation.  Recommendations of the Personnel Committee are 
reviewed and ratified by the full Board of Directors.

     Executive compensation is designed to provide a level of salary competitive
with that offered by other similar regional bank holding companies and banks. To
that end, the Personnel Committee reviews the results of several salary and
compensation surveys. At the present time, there is no relationship between
executive compensation and JVF's corporate performance. Rather, the process of
determining executive compensation is primarily subjective and not based on
quantifiable data.

     Executive officers of JVF participate in the same two bonus programs in
which all employees of JVF participate. These programs pay modest bonuses; one
is paid at year end and the other after JVF's return on assets is calculated.

     Mr. Cook, as President and Chief Executive Officer of JVF, receives a
salary determined by the Personnel Committee in the manner described above. In
addition, he participates in the same bonus programs which are applicable to all
employees. Mr. Cook's total compensation is disclosed in the Summary
Compensation Table set forth below on Page 12.

     JVF offers no special incentive programs for its executive officers.

     Members of the Personnel Committee are Harry Fairman, John Renninger,
Edward Rhodes, and Ronald Witherite. None of these committee members have been
officers or employees of JVF or the Bank at any time, and none had any
relationship with JVF or the Bank requiring specific disclosure under applicable
Securities and Exchange Commission regulations.

     This report is given over the signatures of the Personnel Committee,
consisting of Harry Fairman, John Renninger, Edward Rhodes, and Ronald
Witherite.

Stock Performance Graph

     The following graph sets forth the yearly percentage change in JVF's
cumulative total shareholder return on its common stock from December 31, 1990
to December 31, 1995. This percentage change is measured by dividing (i) the sum
of (A) the cumulative amount of dividends for the period measured, assuming
dividend reinvestment and (B) the difference between JVF's share price at
December 31, 1995 and December 31, 1990 by (ii) the share price of December 31,
1990. This result, on the following performance graph, is compared with the
NASDAQ Market Index and the MG Industry Group 042-Middle Atlantic Banks:


                                     - 10 -
<PAGE>
 
                             [GRAPH APPEARS HERE]

                     ASSUMES $100 INVESTED ON JAN. 1, 1991
                         ASSUMES DIVIDEND REINVESTED 
                       FISCAL YEAR ENDING DEC. 31, 1995

                     COMPARISON OF CUMULATIVE TOTAL RETURN
                  OF COMPANY, INDUSTRY INDEX AND BROAD MARKET


<TABLE>
<CAPTION>
 
------------------------- FISCAL YEAR ENDING -----------------------------
COMPANY                        1990   1991    1992    1993    1994    1995
<S>                            <C>   <C>     <C>     <C>     <C>     <C>
JUNIATA VALLEY FINANCIAL CP     100  102.75  123.33  161.50  190.94  239.48
INDUSTRY INDEX                  100  133.08  166.65  207.03  196.56  298.47
BROAD MARKET                    100  128.38  129.64  155.50  163.26  211.77
 
</TABLE>


THE INDUSTRY INDEX CHOSEN WAS:
MG INDUSTRY GROUP 042 - Middle Atlantic Banks

THE BROAD MARKET INDEX CHOSEN WAS:
NASDAQ MARKET INDEX

THE CURRENT COMPOSITION OF THE INDUSTRY INDEX IS AS FOLLOWS:
ALLEGIANCE BANC CP              
AMBANC HLDG CO INC              
ANNAPOLIS BANCSHARES INC        
ARGENTARIA CP BANC              
ARROW BANK CP                   
AUBURN NATL BANC INC            
BANCO BILBOA VIZ S A            
BANCO DE SANTANDER              
BANK OF NEW YORK CO             
BANKERS TRUST NEW YORK          
BARCLAYS PLC ADR                
BCB FIN SVCS                    
BFS BANKORP INC NY              
BMJ FIN CP                      
BROAD NATL BANCORP              
BRYN MAWR BANK CP               
BSB BANCORP INC                 
BT FIN CP                       
CARNEGIE BANCORP                
CARROLLTON BANCORP              
CHASE MANHATTAN CP           
CHEMICAL BANKING CP          
CITI-BANCSHARES INC          
CITICORP                     
CITIZENS BANCORP             
CNB FIN CP NY                
COLLECTIVE BANCORP INC       
COLUMBIA BANCORP             
COMMERCE BANCORP INC NJ      
COMMERCE BK HARRISBURG       
COMMERCIAL BANK OF NY        
COMMUNITY BANK SYSTS INC     
COMMUNITY BANKS MLRBG PA     
COMMUNITY FIN HLDG           
CONESTOGA BANCORP INC        
CORESTATES FIN CP            
DAUPHIN DEPOSIT CP           
ELMIRA SVGS BK FSB NY        
ESPIRITO SANTO FIN HLDG      
EVERGREEN BANCORP INC         
EXECUFIRST BANCORP INC          
F&M BANCORP                     
FCNB CP                         
FINANCIAL BANCORP INC NY        
FINANCIAL TRUST CP              
FIRST BANK OF PHILA             
FIRST BELL BANCORP INC          
FIRST COMMONWEALTH FIN          
FIRST EMPIRE STATE CP           
FIRST FIDELITY BANCORP          
FIRST KEYSTONE FIN              
FIRST LEESPORT BANCORP          
FIRST OF LONG ISLAND CP         
FIRST SAV BK NJ                 
FIRST SHENANGO BANCORP          
FIRST UNITED CP                 
FIRST WESTERN BANCORP           
FLEMINGTON NATL BK & TR         
FLUSHING FINANCIAL CP           
FNB CORP INC (PA)               
FNB ROCHESTER CP                
FRANKLIN BANCORP                
FULTON FIN CP                   
GARDEN STATE BANCSHARES         
GATEWAY BANCORP INC             
GROWTH FIN CP                   
HARBOR FED BANCORP              
HARLEYSYILLE NATL CP            
HERITAGE BANCORP INC            
HOME FED CP MARYLAND            
HUBCO INC                       
HUDSON CHARTERED BANCORP        
IBS FIN CP                      
INDEPENDENCE BANCORP            
INDEPENDENCE FED SAV BK         
INTEGRA FIN CP                    
INTERCHANGE FIN SVGS              
JEFFBANKS INC                     
KEYSTONE FIN INC                  
KEYSTONE HERITAGE GR              
LAKE ARIEL BANCORP INC            
LAKEVIEW FIN CP                   
LETCHWORTH IND BANCSHARE          
MADISON BANCSHRS GR               
MASON-DIXON BANCSHRS              
MBNA CP                           
MELLON BANK CP                    
MERCANTILE BANKSHRS CP            
MERCHANTS N Y BANCORP             
MERIDIAN BANCORP INC              
MIDLANTIC CP                      
MLF BANCORP INC                   
MORGAN, J.P. & CO INC             
MOXHAM BANK CP                    
NATIONAL PENN BANCSHRS            
NATIONAL WESTMINSTER BK           
NBT BANCORP INC                   
NEWBERRY BANCORP                  
NORTH FORK BANCORP NY             
NORTH SIDE SAV BANK NY            
NSD BANCORP INC                   
OMEGA FIN CP                      
ONBANCORP INC                     
PEEKSKILL FIN CP                  
PENNFED FIN SVCS                  
PNC BANK CP                       
POUGHKEEPSIE SAV BANK             
PRESTIGE FIN CP                   
PRIME BANCORP INC                 
PROGRESS FIN CP                    
PROGRESSIVE BANK INC
QUEENS COUNTY BANCORP
RAMAPO FIN CP
RARITAN BANCORP INC
REGENT BANCSHARES CP
REPUBLIC NY CP
RIGGS NATL CP
ROYAL BANCSHARES OF PA
S&T BANCORP INC
SFS BANCORP INC
SKYLANDS COMMUNITY BANK
SOUTHWEST NATL CP
STATE BANCORP INC
STATEWIDE FIN GR
STERLING BANCORP
SUFFOLK BANCORP
SUMMIT BANCORP
SUN BANCORP INC
SUSQUEHANNA BANCSHARES
TAPPAN ZEE FIN INC
TROY HILL BANCORP INC
TRUST CO OF NJ
TRUSTCO BANK CP NY
U.S. TRUST CP
UJB FIN CP
UNITED COUNTIES BANCORP
UNITED NATL BANCORP NJ
USBANCORP INC PA
VALLEY NATL BANCORP
VISTA BANCORP INC
WEST JERSEY BANCSHARES
WILMINGTON TRUST CP
WSFS FIN CP
WVS FIN CP
YARDVILLE NATL BCP



SOURCE:  MEDIA GENERAL FINANCIAL SERVICES
   P.O. BOX 85333
   RICHMOND, VA 23293
   PHONE:  l-(800) 446-7922
   FAX:  1-(804) 649-6097



                                     -11-
<PAGE>
 
Remuneration of Executive Officers

     The following Summary Compensation Table sets forth the remuneration of the
executive officer of JVF (as defined in applicable securities regulations), and
the annual salary and other compensation of that officer for the preceding three
years.

                          SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                             Lone Term Compensation
                                                                    --------------------------------------    
                                     Annual Compensation                     Awards               Payouts
                            ------------------------------------    ------------------------    ----------    
                                                       Other                      Securities
Name                                                   Annual       Restricted    Underlying                   All Other
and                                                    Compen-      Stock         Options/      LTIP           Compen
Principal                                              sation/1/    Awards/2/     SARs/3/       Payouts/4/     sation/5/
Position            Year    Salary ($)    Bonus ($)      ($)           ($)           (#)            ($)           ($)
--------            ----    ----------    ---------    ---------    ----------    ----------    ----------    ----------
<S>                 <C>     <C>           <C>          <C>          <C>           <C>           <C>           <C>   
A. Jerome Cook      1995     116,423       1,175           -            -             -              -          21,795
Chairman & CEO      1994     111,746       1,165           -            -             -              -          21.155
                    1993     110,000       1,165           -            -             -              -          20,408
 
</TABLE>


/1/  The aggregate of personal benefits provided by JVF and the Bank for any
     executive officer, individually or all executive officers as a group did
     not exceed the lesser of (i) $50,000 or (ii) 10% of the salary and bonus of
     the officer for any of the years referenced. This does not include benefits
     that are available to all salaried officers, directors and employees on a
     non-discriminatory basis.

/2/  JVF has not issued any Restricted Stock Awards to any executive officer.

/3/  JVF has not issued any options or SARs to any Executive Officer.

/4/  JVF does not maintain any Long-Term Incentive Plan as defined in the
     applicable Securities and Exchange Commission Regulations, and consequently
     has made no payouts pursuant to any such plan.

/5/  Mr. Cook received $7,500 in 1995, $7,500 in 1994, and $7,200 in 1993 as
     compensation for serving as a director of JVF and the Bank. Mr. Cook has
     elected to defer a portion of this compensation in the manner described
     below under "Director's Compensation." Mr. Cook also participated in the
     Officer's Supplemental Retirement Plan, also described below. Accruals to
     Mr. Cook's account under this Plan were $13,000 in 1995, $11,940 in 1994,
     and $11,600 in 1993. Finally, Mr. Cook participated in the Director's
     Retirement Plan described below. Accruals to Mr. Cook's account under this
     plan were $947 in 1995, $907 in 1994 and $886 in 1993. Mr. Cook is provided
     with the use of an automobile; the compensation element of this automobile
     aggregated $348 in 1995, $808 in 1994, and $722 in 1993.


                                     - 12 -
<PAGE>
 
Employment Agreement

     In 1995, JVF and the Bank entered into a deferred compensation agreement
with A. Jerome Cook. The agreement provides that JVF and the Bank shall, if Mr.
Cook's employment is terminated without cause, or, if Mr. Cook's employment with
JVF and the Bank is terminated by either Mr. Cook, JVF or the Bank within a
period commencing six months before or nine months after a change in control of
JVF and the Bank, pay Mr. Cook severance compensation equal to 2.95 times Mr.
Cook's average annual compensation over the five taxable years immediately
preceding the termination of Mr. Cook's employment with JVF and the Bank. The
agreement shall expire when Mr. Cook retires.

Stock Option Grants

     Applicable Securities Exchange Commission regulations require disclosure of
Stock Option grants to executive employees. JVF maintains no stock option plans
and the following table indicates that no such options have been granted:

                         INCENTIVE STOCK OPTION GRANTS
                              IN LAST FISCAL YEAR

<TABLE> 
<CAPTION> 
                                                                                            Potential
                                                                                            Realizable Value at Assumed
                                                                                            Annual Alternative
                                                                                            Rates of Stock Price 
                                                                                            Appreciation
                                Individual Grants                                           for Option Term
     ----------------------------------------------------------------------                 ------------------
                                     Number of      % of Total
                                     Securities     Options/
                                     Underlying     SARs
                                     Options/       Granted to     Exercise
                                     SARs           Employees      or Base      Expira-
                                     Granted        in Fiscal      Price        tion
     Name                            (#)            Year           ($/Sh)       Date        5% ($)     10% ($)
     ----                            ----------     ----------     --------     -------     ------     -------
<S>                                  <C>            <C>            <C>          <C>         <C>        <C>
     A. Jerome Cook                     0               0%          $0           0          $0           $0
 
</TABLE>

Pension Plan

     JVF and the Bank maintain a pension plan for employees of JVF and the Bank.
The aggregate amount set aside or accrued as of December 31, 1995, for all
pension or retirement benefits to be paid under existing plan for all plan
participants was $107,000, an amount equal to 5.34% of the total covered
compensation of all plan participants. All employees with 12 months' continuous
service who have attained the age of 21 years (except those paid hourly who work
less than 1,000 hours per year) are eligible to participate. The cost of the
pension, which is actuarially determined, is paid by JVF and the Bank. The
amount of the contribution or accrual with respect to a specified pension is not
and cannot readily be separated or individually calculated by the regular
actuaries for the Plan. The formula used to determine an employee's monthly
pension income is 1% of the employee's average monthly compensation for the Plan
year multiplied by his or her years of Benefit Formula Service, not to exceed 99
years. Early retirement is possible with reduced benefits provided the employee
has attained the age of 55 years and has completed 20 years of service. Average
monthly earnings are calculated from the


                                     - 13 -
<PAGE>
 
employee's highest five consecutive years of earnings and exclude directors'
fees, whether paid in cash or deferred.

     The amount shown on the following table assumes the retirement of an
employee who chose a straight life annuity, who is presently 50 years old and
who will retire at the age of 65 years.

                              PENSION PLAN TABLE

<TABLE>
<CAPTION>
                                       Years of Service
                     -----------------------------------------------
Remuneration             15        20        25        30        35
------------             --        --        --        --        --
<S>                  <C>       <C>       <C>       <C>       <C>
      75,000         $13,594   $18,125   $22,656   $27,187   $31,718
      95,000         $18,674   $24,900   $31,125   $37,349   $43,574
     115,000         $23,794   $31,725   $39,656   $47,587   $55,518
     135,000         $28,894   $38,525   $48,156   $57,787   $67,418
     145,000         $31,444   $41,925   $52,406   $62,887   $73,368
     155,000         $32,700   $43,600   $54,500   $65,400   $76,300
</TABLE>

As of December 31, 1995, A. Jerome Cook had 30 years of credit service under the
Pension Plan.

Officer's Supplemental Retirement Plan

     In December, 1988, the Bank established a supplemental retirement plan for
certain key executive employees (the "Officer's Plan"). The Officer's Plan
provides for a target annual retirement benefit, payable over 10 years beginning
at age 65, in an amount equal to 40% of the employee's 1988 compensation. The
retirement benefit will accrue to the account of each participating employee,
commencing in 1989, over his working years with the Bank until he attains the
age of 65. The Plan is dependent on annual funding which is subject to approval
by the Board of Directors. If the Board terminates the Plan or declines to make
a contribution in any year, participants will receive only such benefits as have
accrued, even if less than the targeted benefits.

     A lesser retirement benefit, equal to the employee's accrued benefit to
date of retirement, is payable if the employee retires on or after attainment of
the age of 62, provided that he has completed 15 years of service. Payment is
deferred until the employee attains the age of 65. If the Board of Directors
approves, receipt of benefits on early retirement may commence, but the benefit
will be the then actuarial equivalent of the accrued retirement benefit.

     The plan also provides for a disability pension in an amount equal to the
employee's accrued retirement benefit on the date of disability. This pension is
payable over a 10-year period, commencing when the employee attains the age of
65. However, payment may be accelerated with approval of the Board; in such
event, the actuarial equivalent of the benefit will be paid.

     If a participant in the plan dies while employed by the Bank, a death
benefit is payable. The amount of the benefit depends on whether the Bank has
purchased insurance on the life of the participant. The death benefit is equal
to the proceeds of the policy if the Bank has purchased insurance, and the
equivalent of the participant's accrued retirement benefit if life insurance has
not been purchased.


                                     - 14 -
<PAGE>
 
Directors' Compensation

     Subject to the right of a director to defer the payment of directors' fees
in accordance with the directors' compensation plan set forth below, each
director is paid an annual fee of $7,500 for attendance at 12 regular meetings
of the Board of Directors of the Bank. Each director who is not an executive
officer also receives $60 for attendance of each committee meeting of the Bank
and special meeting of the Board of Directors of the Bank. JVF directors receive
no fees in addition to those received from the Bank.

Director's Deferred Compensation Plans.

     In 1982, JVF established a director's deferred compensation plan. This plan
permitted participating directors to defer $3,700 in director's fees each year
for a five year period commencing with the election to participate in the plan
in return for an undertaking by JVF to pay each participating director a
specified amount in 120 equal payments beginning at the last to occur of the
attainment of the age of 65 or the expiration of five years from the date of the
director's election to participate in the plan, or if the director were to die
prior to such time, upon the death of the director. JVF applied the deferred
director's compensation to the purchase of life insurance policies which will
fund JVF's obligations under the plan. JVF is the owner and the beneficiary of
these life insurance policies.

     In 1987, when the first director's deferred compensation plan was fully
funded, JVF offered directors a second deferred compensation plan whereby each
director could elect to defer $4,900 in directors fees each year for five years
in exchange for an additional benefit similar to that offered under the 1982
plan. In 1991, when the second plan was funded, JVF offered a third deferred
compensation plan to directors whereby they may elect to defer $6,000 in
director's fees each year for five years in order to receive an additional
benefit similar to that offered under the 1982 and 1987 plans. All three plans
operate in substantially the same manner and all are funded by insurance
policies as described above. JVF has no plans to offer any additional deferred
compensation plans to its directors. The above-referenced plans will continue in
effect.

Director's Retirement Plan

     In December, 1988, the Bank established a retirement program for directors
(the "Director's Plan"). All persons who were directors of the Bank on January
1, 1988, are eligible for benefits under the Plan. All directors whose service
commenced after January 1, 1988, are eligible following the completion of six
months of service on the Board. The Director's Plan provides for a target
retirement benefit of $7,800 per year for 10 years commencing at age 65, or, if
later, at such time as the director has completed 10 years of credited service
(as defined in the Director's Plan) with the Board. The retirement benefit for
each director will accrue over his remaining projected period of service until
he reaches age 65 or completes 10 years of credited service. The Plan is
dependent on annual funding which is subject to approval by the Board of
Directors. If the Board terminates the Plan or declines to make a contribution
in any year, directors will receive only such benefits as have accrued, even if
less than the targeted benefits. Lesser benefits are payable in the event of the
director's death, disability, or other termination (except terminations caused
by the director's fraud or dishonesty).


                                     - 15 -
<PAGE>
 
Transactions with Officers and Directors

     During 1995, the Bank had and expects to have in the future banking
transactions in the ordinary course of its business with directors, officers,
principal shareholders and their associates of JVF and the Bank, on the same
terms, including interest rates and collateral on loans as those prevailing at
the same time for comparable transactions with others. Such loans present, in
the opinion of management, no more than the normal risk of collectibility or
present other unfavorable features. During 1995, the highest aggregate amount of
extensions of credit to directors, officers and their associates either directly
or indirectly, did not exceed 20% of equity capital. Also during 1995, extension
of credit to any one director, officer, or principal shareholder did not exceed
10% of equity capital.

Compliance with Section 16(a) of Securities Exchange Act

     In 1995, to the knowledge of JVF, no directors or officers failed to file
on a timely basis any reports with the Securities Exchange Commission.

Committees of the Board of Directors of the Bank

     The Board of Directors of JVF has not established its own committees but
rather utilizes the committees of the Bank.

     The total number of Board of Directors' meetings during 1995 was 12 and no
director attended fewer than 75% of the aggregate total number of meetings of
the Board of Directors and the total number of meetings held by all committees
of the Board on which he served.

Audit Committee

     Members of the Audit Committee were Karl E. Guss, Dale Nace and Edward
Rhodes. This Committee met three times during 1995. The Audit Committee causes
to be made by certified public accountants a complete audit of the books and
financial statements of JVF. Upon receipt and review of the internal auditor's
report and certified public audit report, the Committee brings to the Board of
Directors the Committee's recommendations concerning the audit. The Committee
also reviews any examination reports by the Department of Banking, Federal
Deposit Insurance Corporation and The Federal Reserve Bank of Philadelphia.

Trust Committee
 
     Members of the Trust Committee were John Groninger, Harold Shearer, and
Ronald Witherite. This Committee met 11 times during 1995. The Trust Committee
determines the policy and investments of the Trust Department, the acceptance of
all fiduciary relationships and relinquishment of all fiduciary relationships.
The Trust Committee keeps minutes of their meetings which are reviewed by the
Board of Directors monthly.

Personnel Committee

     Members of the Personnel Committee were John Renninger, Edward Rhodes, and
Ronald Witherite. This Committee met once during 1995. The Personnel Committee
reviews all personnel policies, including compensation of all employees.


                                     - 16 -
<PAGE>
 
Other Committees of the Bank

     There is no nominating committee but there are other standing committees
which are appointed from time to time by the Chairman of the Board of Directors
subject to the approval of the Board. Examples of some of the committees are
Policy, Consumer, Marketing, Buildings and Grounds, Pension and Finance.

                          OTHER BUSINESS

     To transact any other matters connected with and incidental to the election
of directors that may properly come before the Annual Meeting of Shareholders.

     Management, at present, knows of no other business except those items
explained herein that may require the vote of the shareholders to be presented
by or on behalf of JVF or its management at the meeting.

                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

     The Board of Directors of JVF has engaged Beard & Company, Inc., Reading,
Pennsylvania, as principal accountant for JVF and the Bank to audit its
financial statements for the year 1995. This firm has no material relationship
with JVF or the Bank and is considered to be well qualified. A representative of
the firm is expected to be at the Annual Meeting of Shareholders.

                            FORM 10-K ANNUAL REPORT

     Securities and Exchange Commission Form 10-K Annual Report is available
free of charge. If you desire a copy of this report, forward your request to:


                              Ms. Linda L. Engle
                            Sr. Vice President/CFO
                            The Juniata Valley Bank
                                  P.O. Box 66
                             Mifflintown, PA 17059

                                RETURN OF PROXY

     You are urged to sign, date and return the accompanying Proxy as promptly
as possible, whether or not you plan to attend the meeting in person. If you do
attend the meeting, you may then withdraw your Proxy.


                                  BY ORDER OF THE BOARD OF DIRECTORS


                                  RONALD H. WITHERITE
                                  Secretary


Mifflintown, Pennsylvania 
March 14, 1996
<PAGE>
 
                                     PROXY

                        JUNIATA VALLEY FINANCIAL CORP.
                                  P.O. Box 66
                             Mifflintown, PA 17059
                           Telephone: (717) 436-8211

               THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
                  DIRECTORS OF JUNIATA VALLEY FINANCIAL CORP.

The undersigned hereby appoints Madelon Book, Margaret Fleck and Dennis Long as
Proxies, each with the power to appoint his substitute, and authorizes them to
represent and vote, as designated below, all the shares of common stock of
Juniata Valley Financial Corp. held of record by the undersigned on March 14,
1996 at the Annual Meeting of Shareholders to be held on April 16, 1996.

1. ELECTION OF DIRECTORS:

   For all Nominees Listed Below _____     Withhold Authority _____
   (except as indicated below)

                                    CLASS C
                                    -------

                                 Dale G. Nace
                               Edward R. Rhodes
                               Harold B. Shearer

   INSTRUCTION:  To withhold authority to vote for any individual nominee(s),
                 write that nominee's name(s) in the space immediately below.

2. INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK, PAR VALUE $1.00,
   FROM 2,000,000 TO 5,000,000:

                    FOR ___     AGAINST ___     ABSTAIN ___

3. APPROVAL OF THE JUNIATA VALLEY FINANCIAL CORP. EMPLOYEE STOCK PURCHASE
   PLAN:

                    FOR ___     AGAINST ___     ABSTAIN ___
 
4.  OTHER BUSINESS: Take action on other business which may properly come before
    the meeting.

                    FOR ___     AGAINST ___     ABSTAIN ___

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION OR DIRECTION IS MADE, THEY WILL BE VOTED FOR THE ELECTION OF THE
THREE CLASS C DIRECTORS, AND FOR ANY OTHER BUSINESS IN ACCORDANCE WITH THE
RECOMMENDATIONS OF MANAGEMENT. THIS PROXY MAY BE REVOKED PRIOR TO ITS
EXERCISE.

Dated this    day of         , 1996.                                   (SEAL)
                                       --------------------------------------
                                       Signature

                                                                       (SEAL)
                                       --------------------------------------
                                       Signature

                                       Please sign exactly as your name appears
                                       hereon. When signing as an Attorney,
                                       Executor, Administrator, Trustee or
                                       Guardian, please give full title. If more
                                       than one Trustee, all must sign. All
                                       joint owners must sign.
<PAGE>
 
                                  EXHIBIT "A"
                         COMMONWEALTH OF PENNSYLVANIA
                              DEPARTMENT OF STATE
                              CORPORATION BUREAU


                             AMENDED AND RESTATED
                           ARTICLES OF INCORPORATION


                        JUNIATA VALLEY FINANCIAL CORP.


     1.  The name of the Corporation is Juniata Valley Financial Corp.

     2.  The location and post office address of its registered office in the
Commonwealth of Pennsylvania is Bridge and Main Streets, Mifflintown,
Pennsylvania.

     3.  The Corporation is incorporated under the Business Corporation Law of
the Commonwealth of Pennsylvania for the following purpose or purposes:

     To have unlimited power to engage in and to do any lawful act concerning
     any or all lawful business for which Corporations may be incorporated under
     the provisions of the Business Corporation Law of the Commonwealth of
     Pennsylvania. The Corporation is incorporated under the provisions of the
     Business Corporation Law of the Commonwealth of Pennsylvania (Act of May 5,
     1933, P. L. 364, as amended).

     4.  The term for which the Corporation is to exist is perpetual.

     5.  The aggregate number of shares which the Corporation shall have
authority to issue is 2,500,000 shares, divided into two classes consisting of
2,000,000 shares of Common Stock with a par value of $1.00 per share and 500,000
shares of Preferred Stock without a par value. The Board of Directors shall have
the full authority permitted by law to fix by resolution full, limited, multiple
or fractional, or no voting rights, and such designations and preferences,
priorities, qualifications, privileges, limitations, restrictions, options,
conversion rights, dividend features, retirement features, liquidation features,
redemption features or other special or relative rights that may be desired for
the Preferred Stock and any series thereof, and to issue such Preferred Stock
from time to time in one or more series. The designations, preferences,
priorities, qualifications, privileges, limitations, restrictions, options,
conversion rights, dividend features, retirement features, liquidation features,
redemption features and any other special or relative rights of any series of
Preferred Stock may differ from those of any and all series at any time
outstanding.

     6.  The name and post office address of each incorporator and the number
and class of shares subscribed by each incorporator is:

    Name           Address              No and Class of Shares
    ----           -------              ----------------------

    James A. Ulsh  1801 N. Front St.    One share of common stock
                   P.O. Box 729
                   Harrisburg, PA 17108
<PAGE>
 
     7.  No cumulative voting for the election of directors shall be permitted.

     8.  No holder of any class of capital stock of the Corporation shall have
pre-emptive rights, and the Corporation may issue shares, option rights or
securities having conversion or option rights with respect to shares and any
other securities of any class without first offering them to shareholders of any
class or classes.

     9. To the full extent permitted by law, the Board of Directors is expressly
vested with the authority to make, alter, amend and repeal such Bylaws as it may
deem necessary or desirable for the Corporation, subject to the statutory power
of the shareholders to change such action but only upon the affirmative vote of
the holders of the outstanding capital stock of the Corporation entitled to cast
at least seventy-five percent (75%) of the votes which all shareholders are
entitled to cast on the matter at a regular or special meeting of the
shareholders duly convened after notice to the shareholders of that purpose.

     10. A.  The Board of Directors of the Corporation may, in its sole
discretion, if it deems it advisable, oppose any offer, proposal, or attempt by
any Corporation or other business entity, person or group to (a) make any tender
or other offer to acquire any of the Corporation's securities; (b) merge or
consolidate the Corporation with or into another entity; (c) purchase or
otherwise acquire all or substantially all of the assets of the Corporation; or
(d) make any transaction similar in purpose or effect to any of the above. In
considering whether to oppose, recommend or remain neutral with respect to any
of the aforesaid offers, proposals or plans, the Board of Directors shall
evaluate what is in the best interests of the Corporation and may, but is not
legally obligated to, consider any pertinent factors which may include but are
not limited to any of the following:

    (1) Whether the offering price, whether in cash or in securities, is
    adequate and acceptable based upon both the current market price of the
    Corporation's securities and the historical and present operating results or
    financial condition of the Corporation.

    (2) Whether a price more favorable to the shareholders may be obtained now
    or in the future from other offerors and whether the Corporation's continued
    existence as an independent Corporation will affect the future value of the
    Corporation.

    (3) What the impact of the offer would have on the employees, depositors,
    clients and the customers of the Corporation or its subsidiaries and the
    communities which they serve.

    (4) The present and historical financial position of the offeror, its
    reputation in the communities which it serves and the effect which the
    reputation and practices of offeror or its management and affiliates would
    have upon the employees, depositors and customers of the Corporation and the
    community which the Corporation serves.

    (5) An analysis of the value of the securities (if any) offered in exchange
    for the Corporation's securities.

    (6) Any anti-trust or other legal or regulatory issues raised by the
    offeror.

    B.  If the Board of Directors determines that an offer shall be rejected, it
may take any lawful action to accomplish its purpose, including, but not limited
to, any or all of the following: advising

                                       2
<PAGE>
 
shareholders not to accept the offer; litigation against the offeror; filing
complaint with all government and regulatory authorities having jurisdiction
over the offer; acquiring the Corporation's securities; selling or otherwise
issuing authorized but unissued securities or treasury stock and granting
options with respect thereto; acquiring a company to create an anti-trust or
other regulatory problem for the offeror; and obtaining a more favorable offer
from another individual or entity.

     11. A.  For purposes of this Article 11 the term "Business Combination"
shall mean any one or more of the following transactions:

    (1) Any merger or consolidation of the Corporation or any Subsidiary (as
    hereinafter defined) with or into (i) any ten percent (10%) Shareholder (as
    hereinafter defined) or (ii) any other Corporation (whether or not itself is
    a ten percent (10%) Shareholder) which is, or after such merger or
    consolidation would be, an affiliate (as hereinafter defined) of a ten
    percent (10%) Shareholder or;

    (2) Any sale, lease, exchange, mortgage, pledge, transfer or other
    disposition (in one transaction or in a series of related transactions) to
    or with any ten percent (10%) Shareholder of assets whether of the
    Corporation or any Subsidiary or Subsidiaries of the Corporation, or any
    combination thereof, the aggregate value of which is equal to or greater
    than ten percent (10%) of the Corporation's consolidated stockholders
    equity; or

    (3) The issuance or transfer by the Corporation or by any Subsidiary (in one
    transaction or in a series of related transactions) of any securities of the
    Corporation or any Subsidiary to any ten percent (10%) Shareholder or
    Affiliate of a ten percent (10%) Shareholder in exchange for cash,
    securities or other property or any combination thereof, having an aggregate
    fair market value equal to or greater than ten percent (10%) of the
    Corporation's consolidated stockholders equity; or

    (4) Any reclassification of securities (including any reverse stock split),
    recapitalization, reorganization, merger or consolidation of the Corporation
    with any of its Subsidiaries or any similar transaction (whether or not
    with, into or otherwise involving a ten percent (10%) Shareholder) which has
    the effect, directly or indirectly, of increasing the proportionate share of
    the outstanding shares of any class of equity or convertible securities of
    the Corporation or any Subsidiary, which is directly or indirectly owned by
    any ten percent (10%) Shareholder or any Affiliate of a ten percent (10%)
    Shareholder;

    Provided however, no transaction described in Clauses 1. through 4. of this
    subparagraph A of Article 11 shall constitute a Business Combination if the
    Board of Directors has by resolution authorized or ratified the execution
    and delivery of a written agreement in principle, memorandum of
    understanding or letter of intent respecting such transaction prior to the
    time the ten percent (10%) Shareholder involved in such transaction
    acquired, directly or indirectly, more than five percent (5%) of the
    outstanding Common Stock of the Corporation which would be entitled to vote
    on such transaction. In such an event the provisions of subparagraph D of
    this Article 11 shall apply.

    B.  Notwithstanding the fact that by law or by agreement with a national
securities exchange or otherwise no vote, or a lesser vote, of shareholders may
be specified or permitted, and except as otherwise expressly provided in
subparagraph C. of this Article 11 the affirmative vote of the holders of at
least

                                       3
<PAGE>
 
eighty-five percent (85%) of the votes which all Shareholders are entitled to
cast on the matter shall be required to approve any Business Combination.

    C.  Notwithstanding the provisions of subparagraph B. of this Article 11, a
Business Combination shall require the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66 2/3%) of the votes which all
Shareholders are entitled to cast on the matter, if and only if all of the
following conditions shall have been satisfied:

    (1) The ratio of (a) the aggregate amount of cash and fair market value of
    all other consideration to be received in such Business Combination by the
    Corporation, a Subsidiary, or the holders of Common Stock, as the case may
    be, divided by the number of shares of Common Stock issued and outstanding
    immediately prior to the first public announcement relating to such Business
    Combination, to (b) the market price of the Common Stock per share
    immediately prior to the first public announcement relating to such Business
    Combination, is at least as great as the ratio of (c) the highest per-share
    price (including brokerage commissions, transfer taxes and soliciting
    dealers' fees) which such ten percent (10%) Shareholder has paid for any
    shares of Common Stock acquired by it within the three-year period prior to
    the record date for determining shareholders entitled to vote on such
    Business Combination to (d) the market price of the Common Stock immediately
    prior to the initial acquisition by such ten percent (10%) Shareholder of
    any Common Stock.

    (2) The aggregate amount of the cash and fair market value of other
    consideration to be received in such Business Combination by the
    Corporation, a Subsidiary or the holders of Common Stock, as the case may
    be, divided by the number of shares of Common Stock issued and outstanding
    immediately prior to the first public announcement relating to such Business
    Combination, is not less than the highest per-share price (including
    brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
    such ten percent (10%) Shareholder for any block of Common Stock owned by
    it; and in addition is not less than the market price per share of Common
    Stock immediately prior to the first public announcement relating to such
    Business Combination.

    (3) The form of consideration to be received by holders of Common Stock in
    such Business Combination shall not be less favorable than the consideration
    paid by the ten percent (10%) Shareholder in acquiring the largest block of
    Common Stock already owned by it;

    (4) After such ten percent (10%) Shareholder has acquired ownership of not
    less than ten percent (10%) of the then outstanding Common Stock (a "10%
    Interest") and prior to the consummation of such Business Combination:

             (a) the ten percent (10%) Shareholder shall have taken all action
         necessary to ensure that the Corporation's Board of Directors included
         at all times representation by Continuing Director(s) (as hereinafter
         defined) proportionate to the ratio that the Voting Shares owned by
         persons who are not ten percent (10%) Shareholders ("Public Holders")
         bears to all Voting Shares outstanding at such respective times (with a
         Continuing Director to occupy any resulting fractional Board position);

             (b) such ten percent (10%) Shareholder shall not have acquired any
         newly issued shares of stock, directly or indirectly, from the
         Corporation (except upon conversion

                                       4
<PAGE>
 
         of convertible securities acquired by it prior to obtaining a 10%
         Interest or as a result of a pro rata stock dividend or stock split);
         and

             (c) such ten percent (10%) Shareholder shall not have acquired
         any additional shares of the Corporation's outstanding Voting Shares
         except as a part of the transaction which resulted in such ten percent
         (10%) Shareholder acquiring its 10% Interest;

     (5) Prior to the consummation of such Business Combination, such ten
     percent (10%) Shareholder shall not have (a) received the benefit, directly
     or indirectly (except proportionately as a shareholder), of any loans,
     advances, guarantees, pledges or other financial assistance or tax credits
     provided by the Corporation, or (b) made any major change in the
     Corporation's business or equity capital structure without the unanimous
     approval of the whole Board of Directors; and

     (6) A proxy statement meeting the requirements of the Securities Exchange
     Act of 1934 shall have been mailed to all holders of Voting Shares for the
     purpose of soliciting shareholder approval of such Business Combination.
     Such proxy statement shall contain at the front thereof, in a prominent
     place, any recommendations as to the advisability (or inadvisability) of
     the Business Combination which the continuing Directors, or any of them,
     may have furnished in writing and an opinion of a reputable investment
     banking firm as to the fairness (or lack of fairness) of the terms of such
     Business Combination, from the point of view of the holders of Voting
     Shares other than any ten percent (10%) Shareholder (such investment
     banking firm to be selected by a majority of the Continuing Directors, to
     be furnished with all information it reasonably requests and to be paid a
     reasonable fee by the Corporation for its services upon receipt by the
     Corporation of such opinion).

     D. Any of the following which are not a Business Combination subject to the
provisions of subparagraph B or subparagraph C of this Article 11 shall require
the affirmative vote of the holders of at least seventy-five percent (75%) of
the votes which all Shareholders are entitled to cast on the matter:

     (1) Any merger or consolidation of the Corporation with or into another
     Corporation; or

     (2) Any merger or consolidation of a Subsidiary with or into another
     Corporation if (i) the resulting, surviving or continuing Corporation, as
     the case may be, would not be a Subsidiary or (ii) the total number of
     shares of the Corporation issued or delivered in connection with such
     transaction, plus those initially issuable upon conversion of any other
     shares, securities or obligation to be issued in connection with such
     transaction, exceed fifteen percent (15%) of the shares of Common Stock of
     the Corporation outstanding immediately prior to the date on which such
     transaction is consummated; or

     (3) Any sale, lease, exchange, mortgage, pledge, transfer or other
     disposition of all or substantially all of the assets of the Corporation;
     or

     (4) Any sale, lease, exchange, mortgage, pledge, transfer or other
     disposition of all or substantially all the assets of a Subsidiary whose
     total assets exceed twenty percent (20%) of the total assets of the
     Corporation as reflected on the most recent consolidated balance sheet of
     the Corporation; or


                                       5
<PAGE>
 
     (5) Any sale of all or substantially all of the stock in a subsidiary whose
     total assets exceed twenty percent (20%) of the total assets of the
     Corporation as reflected on the most recent consolidated balance sheet of
     the Corporation.

     Provided, however, that the transaction described in Clauses 1 through 5,
of this subparagraph D of Article 11 shall require the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66 2/3%) and not seventy-
five percent (75%) of the votes which all Shareholders are entitled to cast on
the matter if the Board of Directors has by resolution authorized or ratified
the execution and delivery of a written agreement in principle, memorandum of
understanding or letter of intent respecting such transaction prior to the time
that any party has presented such transaction to the shareholders of the
Corporation for their consideration or approval.

     Transactions involving the Corporation or a Subsidiary which are not
Business Combinations or which are not described in (1) through (5) of this
subparagraph D of Article 11, shall require only such shareholder approval, if
any, as may be required pursuant to the Business Corporation Law of Pennsylvania
as in effect from time to time.

     E.  Any plan or proposal for the liquidation or dissolution of the
Corporation which would require or permit a distribution of any surplus
remaining after paying off all debts and liabilities of the Corporation to the
shareholders in accordance with their respective rights and preferences shall
require the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66 2/3%) of the votes which all Shareholders are entitled to cast on
the matter; provided, the affirmative vote of the holders of at least eighty-
five percent (85%) of the votes which all Shareholders are entitled to cast on
the matter shall be required for any such plan or proposal which would permit
such distribution to shareholders to be made other than in cash.

     F.  For the purposes of this Article 11 and Article 12:

     (1) A "person" shall mean any individual group, firm, Corporation or other
entity.

     (2) "10% Shareholder" shall mean, in respect of any Business Combination,
   any person (other than the Corporation or any Subsidiary) who or which, as of
   the record date for the determination of shareholders entitled to notice of
   and to vote on such Business Combination, or immediately prior to the
   consummating of any such transaction:

         (a) is the beneficial owner, directly or indirectly, of not less than
         ten percent (10%) of the outstanding Common Stock of the Corporation,
         or

         (b) is an Affiliate of the Corporation and at any time within two
         years prior thereto was the beneficiary owner, directly or indirectly,
         of not less than ten percent (10%) of the outstanding Common Stock of
         this Corporation, or

         (c) is an assignee of or has otherwise succeeded to any Common Stock
         which was at any time within two years prior thereto beneficially owned
         by any ten percent (10%) Shareholder, and such assignment or succession
         shall have occurred in the course of a transaction or series of
         transactions not involving a public offering within the meaning of the
         Securities Act of 1933.


                                       6
<PAGE>
 
     (3) A person shall be the "beneficial owner" of any Common Stock:

         (a) which such person or any of its Affiliates or Associates (as
         hereinafter defined) beneficially own, directly or indirectly, or

         (b) which such person or any of its Affiliates or Associates has (i)
         the right to acquire (whether such right is exercisable immediately or
         only after the passage of time), pursuant to any agreement, arrangement
         or understanding or upon the exercise of conversion rights, exchange
         rights, warrants or options, or otherwise, or (ii) the right to vote,
         pursuant to any agreement, arrangement or understanding, or

         (c) which are beneficially owned, directly or indirectly, by any
         other person with which such first-mentioned person or any of its
         Affiliates or Associates has any agreement, arrangement or
         understanding for the purpose of acquiring, holding, voting or
         disposing of any shares of Common Stock.

     (4) The outstanding Common Stock shall include shares deemed owned through
     application of Section 3 above but shall not include any other shares of
     Common Stock which may be issuable pursuant to any agreement, or upon
     exercise of conversion rights, warrants or options, or otherwise.

     (5) "Continuing Director" shall mean a person who was a member of the Board
     of Directors of the Corporation elected by the Holders of Common Stock
     prior to the date as of which any ten percent (10%) Shareholder acquired in
     excess of five percent (5%) of the then outstanding shares of Common Stock,
     or a person designated (before his initial election as a Director) as a
     Continuing Director by a majority of the then Continuing Directors.

     (6) "Affiliate" and "Associate" shall have the respective meanings given
     those terms in the General Rules and Regulations under the Securities
     Exchange Act of 1934.

     (7) "Subsidiary" means any corporation or entity of which a majority of any
     class of equity security (as defined in the General Rules and Regulations
     under the Securities Exchange Act of 1934) is owned, directly or
     indirectly, by the Corporation; provided, however, that for the purposes of
     the definition of ten percent (10%) Shareholder set forth in Section 2 of
     this subparagraph F, the term "Subsidiary" shall mean only a corporation of
     which a majority of each class of equity security is owned, directly or
     indirectly, by the Corporation.

     (8) "Voting Shares" shall mean any shares of the capital stock of the
     Corporation entitled to vote (irrespective of the number of votes which
     each such share is entitled to cast) generally in the election of
     Directors.

     G. A majority of the Continuing Directors shall have the power and duty to
determine for the purposes of this Article 11, on the basis of information known
to them, (1) the number of shares of Common Stock beneficially owned by any
person, (2) whether a person is an Affiliate or Associate of another, (3)
whether a person has an agreement, arrangement or understanding with another as
to the matters referred to in Section 3 of subparagraph F., (4) the fair market
value of consideration other than cash to be received in any Business
Combination, (5) whether the form of consideration to be received by holder of
Common Stock in a Business Combination is not less favorable than the
consideration paid by a ten percent (10%) Shareholder in acquiring the largest
block of Common Stock owned by it, and (6)

                                       7
<PAGE>
 
whether a ten percent (10%) Shareholder has taken all action necessary to
ensure proportionate representation by Continuing Directors on the Board of
Directors for purposes of clause 4(a) of subparagraph C of this Article 11.

     H.  Nothing contained in this Article 11 shall be construed to relieve any
ten percent (10%) Shareholder from any fiduciary obligation imposed by law.

     12. Articles 7, 8, 9, 10 and 11 of these Articles of Incorporation, and
this Article 12, may not be amended, altered, changed or repealed without the
affirmative vote of holders of at least eighty-five percent (85%) of the votes
which all shareholders are entitled to cast on the matter. Provided, however,
that if the amendment, alteration, change or repeal of any of the aforesaid
Articles is recommended to the shareholders by sixty-six and two-thirds percent
(66 2/3%) of the whole Board of Directors, consisting entirely of Continuing
Directors, then the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the votes which all Shareholders are entitled to
cast on the matter shall be required. Article 5 of these Articles of
Incorporation may not be amended, altered, changed or repealed without the
affirmative vote of the holders of at least sixty-six and two-thirds percent 
(66 2/3%) of the votes which all shareholders are entitled to cast on the
matter.

     13. The Corporation shall, to the fullest extent permitted by applicable
law, indemnify any and all persons whom it shall have the power to indemnify
from and against any and all expenses, liabilities or other matter for which
indemnification is permitted by applicable law, and the indemnification provided
for herein shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.

     14. Each article of these Articles of Incorporation shall be considered
separable and if for any reason any Article is determined to be invalid and
contrary to any then existing law, such invalidity shall not impair the
operation of or affect those Articles which are valid.

                                       8
<PAGE>
 
                                  EXHIBIT "B"

                        JUNIATA VALLEY FINANCIAL CORP.
                         EMPLOYEE STOCK PURCHASE PLAN

                              ARTICLE I-PURPOSE

1.01.  Purpose


     The Juniata Valley Financial Corporation Employee Stock Purchase Plan will
provide a method for employees of The Juniata Valley Bank to acquire a
proprietary interest in Juniata Valley Financial Corporation. Under the Employee
Stock Purchase Plan, participating employees may purchase shares of the Common
Stock of Juniata Valley Financial Corporation. Juniata Valley Financial
Corporation intends to have the Employee Stock Purchase Plan qualify as an
"employee stock purchase plan" under (S)423 of the Internal Revenue Code of
1986, as amended. The Employee Stock Purchase Plan shall be construed to comply
with the requirements of that section of the Internal Revenue Code.


                            ARTICLE II-DEFINITIONS

2.01.  Base Pay

     "Base Pay" means the regular straight-time earnings of an employee,
excluding payments for overtime, shift premium, bonuses and other special
payments, commissions and other marketing incentive payments.

2.02.  Board of Directors

     "Board of Directors" means the Board of Directors of Juniata Valley
Financial Corporation.

2.03.  Code

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

2.04.  Committee

     "Committee" means the committee administering the Employee Stock Purchase
Plan, which is more fully described in Article XI.

2.05.  Employee

     "Employee" means any person who is customarily employed on a fill-time or
part-time basis by Juniata Valley Bank and is regularly scheduled to work more
than 20 hours per week.
<PAGE>
 
2.06.  JVB

     "JVB" means The Juniata Valley Bank.

2.07.  JVFC

     "JVFC" means Juniata Valley Financial Corporation.

2.08.  Offerings

     "Offerings" means the annual offerings of JVFC's common stock. Each
Offering will begin on July 1 and end on May 15 of the following year.

2.09.  Offering Commencement Date

     "Offering Commencement Date" means July 1 of each year.

2.10.  Offering Termination Date

     "Offering Termination Date" means May 15 of the year following the Offering
Commencement Date.

2.11.  Participant

     "Participant" means any eligible employee of JVB that has completed an
authorization for payroll deduction on the form provided by JVB and filed the
form with the Treasurer of JVFC..

2.12.  Plan
     
     "Plan" means the JVFC Employee Stock Purchase Plan.

2.13.  Stock

     "Stock" means the common stock of JVFC.


                  ARTICLE III-ELIGIBILITY AND PARTICIPATION

3.01.  Initial Eligibility

     An employee is eligible to participate in the Plan if: (i) he or she has
completed ninety (90) days' employment; and (ii) he or she is employed by JVB on
the date the employee's participation in the Plan becomes effective. Eligible
employees may participate in offerings

                                      -2-
<PAGE>
 
under the Plan which commence on or after the employee meets the eligibility
requirements set forth in this section.

3.02.  Leave of Absence

     For purposes of the Plan, a person on leave of absence will be considered
an employee for the first 90 days of the leave of absence. The person's
employment shall be considered terminated at the close of business on the 90th
day of the leave of absence. Termination by JVB of any employee's leave of
absence, other than termination of the leave of absence on return to full time
or part time employment, will terminate the employee's participation in the Plan
and the employee's right to exercise any option outstanding under the Plan.

3.03.  Restrictions on Participation

     Any provision of the Plan to the contrary notwithstanding, an employee's
participation in the Plan will be limited or prohibited:

     (a) if, because of participation the employee would own stock, and/or
hold outstanding options to purchase stock, possessing 5% or more of the total
combined voting power or value of all classes of stock of JVFC (for purposes of
this paragraph, the rules of (S)424(d) of the Code shall apply in determining
stock ownership of any employee); or

     (b) if the Participant's rights to purchase stock under all employee stock
purchase plans of JVFC would accrue at a rate which exceeds $25,000 for each
calendar year determined by the fair market value of the stock at the time the
option is granted.

3.04.  Commencement of Participation

     An eligible employee may become a Participant by completing an
authorization for a payroll deduction on the form provided by JVB and filing it
with the Treasurer of JVFC. With respect to each Offering, the payroll deduction
authorization must be received by JVFC on or before a date established by the
Committee. For each Offering, payroll deductions for a Participant will commence
on the applicable Offering Commencement Date, and will end on the Offering
Termination Date, unless sooner terminated by the Participant as provided in
Article VIII.


                             ARTICLE IV-OFFERINGS

4.01.  Annual Offerings

     The Plan will be implemented by annual Offerings of JVFC's Common Stock
beginning on the 1st day of July in each year. Each Offering will terminate on
May 15th of the following year.

                                      -3-
<PAGE>
 
                         ARTICLE V-PAYROLL DEDUCTIONS

5.01.  Amount of Deduction

     At the time a Participant files the authorization for payroll deduction, he
or she shall elect to have deductions made from his or her pay. The deductions
shall be made on each payday during the time the employee is a Participant in an
Offering. The rate of each deductions shall be at the rate of 2, 3, 4, 5, 6, 7,
8, 9 or 10% of the Participant's base pay in effect at the Offering Commencement
Date. If the Participant is a part-time hourly employee, that employee's base
pay during an Offering will be determined by multiplying the employee's hourly
rate of pay in effect on the Offering Commencement Date by the number of
regularly scheduled hours of work for the employee during the Offering.

5.02.  Participant's Account

     All payroll deductions made for a Participant shall be credited to the
Participant's account under the Plan. A Participant may make separate cash
payments only as permitted by the Committee and permitted by (S) 5.04.

5.03.  Changes in Payroll Deductions

     A Participant may discontinue participation in the Plan as provided in
Article VIII. No other change can be made during an Offering. Specifically, a
Participant may not alter the amount of his or her payroll deductions for that
Offering.

5.04   Leave of Absence

     If a Participant goes on a leave of absence, that Participant will have the
right to elect:

     (a)   to withdraw the balance in his or her account pursuant to (S)7.02;

     (b)   to discontinue contributions to the Plan but remain a Participant in
the Plan; or

     (c)   to remain a Participant in the Plan during the leave of absence,
authorizing deductions to be made from payments by JVB to the Participant during
the leave of absence and undertaking to make cash payments to the Plan at the
end of each payroll period to the extent that amounts payable by JVB to the
Participant are insufficient to meet the Participant's authorized Plan
deductions.

                                      -4-
<PAGE>
 
                        ARTICLE VI-GRANTING OF OPTION

6.01.  Number of Option Shares

     On the Commencement Date of each Offering, a Participant will be granted an
option to purchase as many full shares of the Stock as he or she will be able to
purchase with the aggregate sum of the payroll deduction deposited in his or her
account during that Offering.

6.02.  Option Price

     The option price of Stock purchased during each annual Offering for a
Participant shall be a percentage between eighty-five (85%) percent and one
hundred (100%) percent of the fair market value of the Stock on the Offering
Commencement Date or the nearest prior business day to the Offering Commencement
Date. The percentage used shall be in the sole and exclusive discretion of the
Board of Directors.


                        ARTICLE VII-EXERCISE OF OPTION

7.01.  Automatic Exercise

     Unless a Participant gives written notice to the Treasurer of JVFC as
provided in Section 7.02, the Participant's option for the purchase of Stock
with payroll deductions made during any offering will be exercised automatically
on the Offering Termination Date, for the purchase of the number of full shares
of Stock which the balance in his or her account at that time will purchase at
the applicable option price (but not in excess of the number of shares for which
options have been granted to the employee pursuant to (S)6.01). Any excess in
the account at that time will be returned to the Participant.

7.02.  Withdrawal of Account

     By written notice to the Treasurer of JVFC, at any time prior to the
Offering Termination Date applicable to any Offering, a Participant may elect to
withdraw all the money in the Participant's account.

7.03.  Fractional Shares

     Fractional shares will not be issued under the Plan. Any accumulated
payroll deductions which would have been used to purchase fractional shares will
be returned to any Participant promptly following the termination of an
Offering.
                                  -5-
<PAGE>
 
7.04.  Transferability of Option

     During a Participant's lifetime, options held by the Participant shall be
exercisable only by that Participant.

7.05.  Delivery of Stock

     Within forty-five (45) days after the Offering Termination Date of each
Offering, or as soon as practicable thereafter, JVFC will deliver to each
Participant, as appropriate, the Stock purchased upon exercise of his or her
option.


                           ARTICLE VIII-WITHDRAWAL

8.01.  In General

     A Participant may withdraw payroll deductions credited to his or her
account under the Plan at any time (subject to Article 7.02) by giving written
notice to the Treasurer of JVFC. All of the Participant's payroll deductions
credited to his or her account will be paid to the Participant promptly after
receipt of notice of withdrawal. No further payroll deductions will be made from
the Participant's pay during such Offering.

8.02.  Effect on Subsequent Participation

     A Participant's withdrawal from any Offering will not have any effect upon
his or her eligibility to participate in any succeeding Offering or in any
similar plan which may hereafter be adopted by JVFC.

8.03.  Termination of Employment

     Upon termination of the Participant's employment for any reason, including
retirement (but excluding death or continuation of a leave of absence for a
period beyond 90 days), the Participant's participation in the Plan shall
automatically terminate, the Participant shall not be entitled to purchase any
shares at the end of the Offering, and the payroll deductions credited to the
Participant's account will be returned to the Participant.

8.04.  Termination of Employment Due to Death

     Upon termination of the Participant's employment because of death, the
Participant's beneficiary (as defined in (S)12.01) shall have the right to
elect, by written notice given to the Treasurer of JVFC prior to the earlier of
the Offering Termination Date or the expiration of a period of sixty (60) days
commencing with the date of death of the Participant, either:


                                      -6-
<PAGE>
 
     (a) to withdraw all of the payroll deductions credited to the Participant's
account under the Plan; or

     (b) to exercise the Participant's option for the purchase of Stock on the
Offering Termination Date following the date of the Participant's death under
the terms described in Article 7.01.

     In the event that no written notice of election is received by the
Treasurer of JVFC, the beneficiary shall automatically be deemed to have elected
pursuant to paragraph (b), to exercise the Participant's option.

8.05.  Leave of Absence

     A Participant on leave of absence shall, subject to the election made by
the Participant pursuant to (S)5.04, continue to be a Participant in the Plan so
long as the Participant is on continuous leave of absence. A Participant who has
been on leave of absence for more than 90 days will not be entitled to
participate in any offering commencing after the 90th day of such leave of
absence. Notwithstanding any other provisions of the Plan, unless a Participant
on leave of absence returns to regular full time or part time employment with
the JVB at the earlier of: (a) the termination of such leave of absence or (b)
three months from the 90th day of the leave of absence, the Participant's
participation in the Plan shall terminate on whichever of such dates first
occurs.


                             ARTICLE IX-INTEREST

9.01   Payment of Interest

     A Participant's account will be credited with simple interest computed at
the regular statement savings account rate in effect at JVB during the
applicable offering period


                               ARTICLE X-STOCK

10.01  Maximum Shares

     The maximum number of shares which will be issued under the Plan, subject
to adjustment upon changes in capitalization of JVFC as provided in (S)12.04
shall be 5000 shares in each annual Offering plus in each Offering all unissued
shares from prior Offerings, whether offered or not, not to exceed 100,000
shares for all Offerings. If the total number of shares for which options are
exercised on any Offering Termination Date in accordance with Article VI exceeds
the maximum number of shares for the applicable Offering, JVFC shall make a pro
rata allocation of the shares remaining available in as nearly a uniform manner
as shall be practicable and as it shall determine to be equitable. In such
event, the balance of payroll deductions credited

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to the account of each Participant under the Plan shall be returned to the
Participant as promptly as possible.

10.02. Participant's Interest in Option Stock

     The Participant will have no interest in Stock covered by his or her option
until the option has been exercised.

10.03. Registration of Stock

     Stock to be delivered to a Participant under the Plan will be registered in
the name of the Participant, or, if the Participant directs by written notice to
the Treasurer of JVFC prior to the Offering Termination Date, in the names of 
the Participant and one such other person as may be designate by the 
Participant, as joint tenants with rights of survivorship or as tenants by the 
entireties, to the extent permitted by applicable law.


                          ARTICLE XI-ADMINISTRATION

11.01. Appointment of Committee

     The Board of Directors shall appoint a committee (the "Committee") to
administer the Plan. The Committee which shall consist of no fewer than three
members of the Board of Directors. No member of the Committee shall be eligible
to purchase stock under the Plan.

11.02. Authority of Committee

     The Committee shall have plenary authority in its discretion to interpret
and construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, and to make all other determinations necessary or
advisable for administering the Plan. The Committee's determination shall be
conclusive.

11.03. Rules Governing the Administration of the Committee

     The Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed and
may fill vacancies, however caused, in the Committee. The Committee may select
one of its members as its Chairman and shall hold its meetings at such times and
places as it shall deem advisable. Meetings by telephone are permissible. A
majority of its members shall constitute a quorum. All decisions of the
Committee shall be made by a majority of its members. The Committee may correct
any defect or omission or reconcile any inconsistency in the Plan, in the manner
and to the extent it shall deem desirable. Any decision or determination reduced
to writing and signed by a majority of the members of the Committee will be as
fully effective as if it had been made by a majority

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vote at a meeting duly called and held. The Committee may appoint a secretary
and shall make such rules and regulations for the conduct of its business as it
shall deem advisable.


                          ARTICLE XII-MISCELLANEOUS

12.01. Designation of Beneficiary

     A Participant may file a written designation of a beneficiary who is to
receive any stock and/or cash in the event the Participant dies. A Participant
may change the designated beneficiary at any time by written notice to the
Treasurer of JVFC. In the event of the Participant's death prior to the delivery
of Stock purchased pursuant to an Offering, JVFC will deliver the Stock, or any
cash to which the Participant is entitled, to the joint tenant, if the
Participant has designated a joint tenant as provided in Article 10.03. If there
is no joint tenant, JVFC shall deliver the stock and/or cash to the designated
beneficiary upon receipt by JVFC of proof of the identity and existence at the
Participant's death of a beneficiary validly designated under the Plan. If a
Participant dies and no living beneficiary has been validly designated under the
Plan, JVFC shall deliver the stock and/or cash to the executor or administrator
of the estate of the Participant. If there is no executor or administrator
appointed (to the knowledge of JVFC), JVFC, in its discretion, may deliver the
stock and/or cash to the spouse or to any one or more dependents of the
Participant as JVFC may designate. No beneficiary shall, prior to death of the
Participant by whom he has been designated, acquire any interest in the stock or
cash credited to the Participant under the Plan. JVFC shall not be liable to any
person for the delivery of stock and/or cash pursuant to the provisions of this
Section 12.01.

12.02. Transferability

     In no event may any rights with regard to the exercise of an option or to
receive stock under the Plan be assigned, transferred, pledged, or otherwise
disposed of in any way by the Participant other than by will or the laws of
descent and distribution. Any such attempted assignment, transfer, pledge or
other disposition shall be without effect, except that JVFC may treat such act
as an election to withdraw funds in accordance with (S)7.02.

12.03. Use of Funds

     All payroll deductions received or held by JVFC under this Plan may be used
by JVFC in the same manner as funds held in ordinary savings accounts at JVB are
used. JVFC shall not be obligated to segregate payroll deductions.


12.04. Adjustment Upon Changes in Capitalization

     (a) If, while any options are outstanding, the outstanding shares of Common
Stock of JVFC have increased, decreased, changed into, or been exchanged for a
different number or kind

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of shares or securities of JVFC through reorganization, stock split, reverse
stock split or similar transaction, appropriate and proportionate adjustments
may be made by the Committee. In addition, the number and/or kind of shares
which may be offered in the Offerings described in Article IV hereof shall also
be proportionately adjusted. No adjustments shall be made for stock dividends.
For the purposes of this Paragraph, any distribution of shares to shareholders
in an amount aggregating 20% or more of the outstanding shares shall be deemed a
stock split and any distributions of shares aggregating less than 20% of the
outstanding shares shall be deemed a stock dividend.

     (b) Upon the (i) dissolution or liquidation of JVFC; (ii) reorganization,
merger or consolidation of JVFC with one or more corporations as a result of
which JVFC is not the surviving corporation; or (iii) upon a sale of
substantially all of the property or stock of JVFC to another corporation, the
holder of each option then outstanding under the Plan will thereafter be
entitled to receive at the next Offering Termination Date upon the exercise of
such option for each share as to which such option shall be exercised, as nearly
as reasonably may be determined, the cash, securities and/or property which a
holder of one share of the Common stock was entitled to receive upon and at the
time of such transaction. The Board of Directors shall take such steps in
connection with such transactions as the Board shall deem necessary to assure
that the provisions of this (S)12.04 shall thereafter be applicable, as nearly
as reasonably may be determined, in relation to the said cash, securities and/or
property as to which such holder of such option might thereafter be entitled to
receive.

12.05. Amendment and Termination

     The Board of Directors shall have complete power and authority to terminate
or amend the Plan. The Board of Directors shall not, without the approval of the
stockholders of the Corporation (i) increase the maximum number of shares which
may be issued under any Offering (except pursuant to (S)12.04); (ii) amend the
requirements as to the class of employees eligible to purchase stock under the
Plan or permit the members of the Committee to purchase stock under the Plan. No
termination, modification, or amendment of the Plan may, without the consent of
an employee then having an option under the Plan to purchase stock, adversely
affect the rights of such employee under such option.



12.06. Effective Date

     The Plan shall become effective as of July 1, 1996, subject to approval by
the holders of the majority of the Stock present and represented at the 1996
annual meeting of the shareholders. If the Plan is not approved, the Plan shall
not become effective.

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12.07. No Employment Rights

     The Plan does not, directly or indirectly, create any right for the benefit
of any employee or class of employees to purchase any shares under the Plan, or
create in any employee or class of employees any right with respect to
continuation of employment by JVB. The Plan shall not be deemed to interfere in
any way with JVB's right to terminate, or otherwise modify, an employee's
employment at any time.

12.08. Effect of Plan

     The provisions of the Plan will be binding upon all successors of each
employee participating in the Plan, including, without limitation, the
employee's estate and the executors, administrators or trustees thereof, heirs
and legatees, and any receiver, trustee in bankruptcy or representative of
creditors of the employee.

12.09. Governing Law

     The law of the State of Pennsylvania will govern all matters relating to
this Plan except to the extent it is superseded by the laws of the United
States.



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