<PAGE>
FORT WAYNE NATIONAL CORPORATION
March 19, 1997
To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Fort Wayne National Corporation to be held at the Allen County War Memorial
Coliseum Exposition Center, 4000 Parnell Avenue, Fort Wayne, Indiana,
commencing at 1:30 p.m. (E.S.T.) on Tuesday, April 22, 1997. The Board of
Directors and management look forward to greeting personally those
Shareholders attending.
The matters to be acted upon at the meeting are described in the attached
Notice of Annual Meeting and Proxy Statement.
Shareholders will be asked to adopt an important and significant
amendment to the Corporation's Articles of Incorporation to provide for an
increase in the number of authorized shares of stock from 22,000,000 to
54,000,000, to approve an amendment to the Stock Incentive Plan of the
Corporation, to elect 7 Class C Directors, and to ratify the appointment of
Ernst & Young LLP as the Corporation's independent auditors.
It is important that your shares are represented at the meeting, whether
or not you are personally able to be present. Accordingly, please sign, date
and return the enclosed proxy card in the postage-paid envelope provided for
your convenience.
Your prompt response will be greatly appreciated.
Cordially,
M. James Johnston, Chairman
Chief Executive Officer
<PAGE>
FORT WAYNE NATIONAL CORPORATION
110 West Berry Street, P.O. Box 110
Fort Wayne, Indiana 46801
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD April 22, 1997
To our Shareholders:
The Annual Meeting of Shareholders of Fort Wayne National Corporation
(the "Corporation") will be held in the Allen County War Memorial Coliseum
Exposition Center, 4000 Parnell Avenue, Fort Wayne, Indiana at 1:30 P.M.
(E.S.T.), on Tuesday, April 22, 1997, for the following purposes:
1. To consider and act upon a proposal to amend Article V of the
Corporation's Articles of Incorporation to increase the authorized stock to
54,000,000 shares;
2. To approve an amendment to the Fort Wayne National Corporation 1994 Stock
Incentive Plan which would increase the number of shares of Common Stock of
the Corporation available for the Plan to 1,350,000;
3. To elect 7 Class C directors for a term expiring in 2000;
4. To ratify the appointment of Ernst & Young LLP to serve as independent
auditors of the Corporation; and
5. To transact any other business that may properly come before the meeting
or any adjournment thereof.
Only Shareholders of record on the Corporation's books at the close of
business on March 10, 1997, are entitled to vote at the meeting and any
adjournment thereof.
By Order of the Board of Directors
M. James Johnston
Chairman of the Board
Fort Wayne, Indiana
March 19, 1997
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING. ACCORDINGLY,
PLEASE SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. YOU MAY REVOKE YOUR
PROXY AT ANY TIME PRIOR TO ACTUAL EXERCISE.
<PAGE>
FORT WAYNE NATIONAL CORPORATION
110 West Berry Street, P.O. Box 110
Fort Wayne, Indiana 46801
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD April 22, 1997
PROXY STATEMENT
March 19, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Fort Wayne National Corporation (the
"Corporation") for use at the Annual Meeting of Shareholders to be held on
Tuesday, April 22, 1997, and at any and all adjournments thereof.
The date on which this Proxy Statement and the accompanying proxy are
first being sent or given to Shareholders is March 19, 1997. The cost of the
solicitation will be borne by the Corporation. In addition to solicitation by
mail, some of the directors, officers and regular employees of the Corporation
may, without extra compensation, solicit proxies by telephone, telegraph and
personal interview. Arrangements will be made with brokerage houses,
custodians, nominees and other fiduciaries to send proxy materials to their
principals, and they will be reimbursed by the Corporation for postage and
clerical expense in doing so.
Any Shareholder giving a proxy has the power to revoke it at any time
before its exercise by submitting a written revocation or a new proxy, or by
attending and voting at the Annual Meeting.
The executive offices of the Corporation are located at 110 West Berry
Street, Fort Wayne, Indiana.
ANNUAL REPORT
A copy of the Annual Report to Shareholders is being sent to all
Shareholders. It is not, however, a part of this Proxy Statement.
<PAGE>
INFORMATION AS TO VOTING SECURITIES
The securities of the Corporation entitled to be voted at the meeting
consist of shares of its Common Stock of which 11,715,855 shares were issued
and outstanding at the close of business on March 10, 1997. Common Stock of
the Corporation is the only class of capital stock outstanding that has
current voting rights. Only Shareholders of record at the close of business
on March 10, 1997, will be eligible to vote at the Annual Meeting or at any
adjournment thereof; except that, under the Corporation's by-laws, any person
who acquires title to a share after the record date shall be entitled, upon
written request to the Shareholder of record, to receive from such record
Shareholder a proxy, with power of substitution, to vote that share.
Shareholders are entitled to 1 vote for each share held. Any shares with
respect to which proxies are not received will not be voted for or against any
proposition to come under consideration at the Annual Meeting. Any shares
with respect to which proxies are received indicating abstentions from vote,
will be voted in accordance therewith as abstentions.
PRINCIPAL HOLDERS OF COMMON STOCK
Under Rule 13d-3 of the Securities Exchange Act of 1934, a beneficial
owner of a security is any person who directly or indirectly has or shares
voting power or investment power over such security. Such beneficial owner
under this definition need not enjoy the economic benefit of such securities.
The following is the only Shareholder deemed to be a beneficial owner of 5% or
more of the Common Stock of the Corporation as of February 14, 1997:
<TABLE>
<CAPTION>
Shares of Common
Capital Stock
Beneficially
Names and Address of Owned as of Percent
Beneficial Owner February 14, 1997 Owned
- -------------------------------- -------------------- ---------
<S> <C> <C>
Fort Wayne National Bank (1) 1,220,458 (2) 9.4
110 West Berry Street
Fort Wayne, Indiana 46802
Mardot, LP (3) 1,178,102 9.1
P.O. Box 328
South Bend, Indiana 46624
</TABLE>
(1) Fort Wayne National Bank is a wholly-owned bank subsidiary of the
Corporation.
<PAGE>
(2) Fort Wayne National Bank holds these shares in a fiduciary capacity
under numerous trust relationships. None of these trusts is the
beneficial owner of 5% or more of the Common Stock of the Corporation
as of February 14, 1997. Fort Wayne National Bank has sole or shared
voting power and sole or shared investment decision over these shares,
but disclaims any beneficial interest in all shares held in this
capacity. Fort Wayne National Bank also holds shares in a
non-discretionary capacity and disclaims any beneficial interest in
all shares held in this capacity.
(3) Mardot, LP is a partnership of which Dennis J. Schwartz, a Director
of the Corporation, is a general partner. Of the shares presented,
714,585 shares are currently in the form a derivative security, which
shares are convertible into Common Stock of the Corporation at the
discretion of the Shareholder. As of February 14, 1997, the derivative
shares had not been converted into Common Stock of the Corporation,
therefore, those shares cannot be voted.
PROPOSAL NO. 1
AUTHORIZING INCREASE IN COMMON STOCK
SUMMARY
The Board of Directors proposes that Article V of the Corporation's
Articles of Incorporation be amended to increase the total number of
authorized shares of stock from 22,000,000 to 54,000,000. The additional
stock would be alike in all respects to the existing stock.
DESCRIPTION OF THE AMENDMENT
Section 5.01 of the Corporation's Articles of Incorporation currently
provides for a total of 22,000,000 authorized shares without par value.
Section 5.02 of the Articles currently divides the authorized shares into 3
classes: 20,000,000 shares of Common Stock, 1,000,000 shares of Class A
Preferred Stock and 1,000,000 shares of Class B Preferred Stock.
Proposed Section 5.01 would increase the total authorized shares of the
Corporation to 54,000,000 shares without par value, and proposed Section 5.02
would divide these shares into 3 classes: 50,000,000 shares of Common Stock,
2,000,000 shares of Class A Preferred Stock and 2,000,000 shares of Class B
Preferred Stock. If the amendments are approved by the Shareholders, Section
5.01 and 5.02 will read as follows:
Section 5.01 Number of Shares. The total number of shares which the
Corporation is to have authority to issue is 54,000,000, consisting of
54,000,000 shares without par value.
<PAGE>
Section 5.02 Designation of Classes. The authorized shares are
divided into three classes, one of which is designated Class A Preferred
Stock and consists of 2,000,000 shares without par value, one of which
is designated Class B Preferred Stock and consists of 2,000,000 shares
without par value and one of which is designated Common Stock and
consists of 50,000,000 shares without par value.
REASONS FOR AND EFFECTS OF ARTICLE V AMENDMENT
The balance (authorized but unissued) of 38,284,145 shares of Common
Stock, together with the 2,000,000 shares of Class A Preferred Stock and the
balance (authorized but unissued) of 1,260,024 shares of Class B Preferred
Stock, would be available for issuance and use in connection with business
acquisitions by the Corporation, other types of financing (both equity and
debt), distributions to Shareholders of future stock splits or dividends,
additions to the number of shares available for the Corporation's 1994 Stock
Incentive Plan and other corporate purposes.
In the event that the additional shares contemplated by Proposal No. 1
are authorized by Shareholders, the Board of Directors alone, in certain
circumstances, would have the power to issue all or part of such additional
shares without further authorization from Shareholders. Examples of such
issuance and use of additional shares would include the Corporation's
acquisition of the stock or the assets of another company, or the issuance of
shares to the public in one or more transactions to raise additional capital.
In other instances, Shareholder authorization would have to be obtained, as,
for example, an acquisition by means of a statutory merger or the adoption of
certain additional employee stock option or related plans. It is the
intention of the Board of Directors that the issuance of additional shares
would not be submitted to a Shareholder vote unless required by applicable
law.
Other than as described herein, there is no present intention to issue
any of the additional shares of stock either in connection with any
acquisition, any equity or other financing, or otherwise. However, to the
extent that any Preferred Stock is issued with a right to convert the shares
into Common Stock, and to the extent that any additional shares of Common
Stock are issued other than on a pro-rata basis to holders of Common Stock, a
dilution of the equity of the outstanding shares of Common Stock could result.
BOARD OF DIRECTORS' RECOMMENDATION
Adoption of Proposal No. 1 to increase authorized stock from 22,000,000
shares to 54,000,000 shares requires the affirmative vote of the holders of a
majority of the Corporation's outstanding shares of Common Stock entitled to
vote at the 1997 Annual Meeting of Shareholders. The Board of Directors
recommends that you vote FOR Proposal No. 1.
<PAGE>
PROPOSAL NO. 2
1994 STOCK INCENTIVE PLAN AMENDMENT
A substantial portion of the shares reserved for issuance under the
Corporation's 1994 Stock Incentive Plan (the "Plan") have been expended in
options granted under the Plan, primarily because several additional officers
and key employees have been awarded option grants as a result of the
acquisition of Valley Financial Services, Inc. during 1996. Because of the
minimal remaining shares reserved for issuance under the Plan, and because the
Corporation's management believes that an interruption in the availability of
options would negatively impact the Corporation, on February 18, 1997, the
Board of Directors adopted an amendment to the Plan in the form attached to
this Proxy Statement as Exhibit A. Adoption of the amendment is subject to
Shareholder approval at the 1997 Annual Meeting of Shareholders.
TERMINATION; AMENDMENT
The Plan became effective as of January 18, 1994. Awards may be granted
under the Plan until the earlier of January 17, 2004, the issuance of the
maximum number of shares as described below, or termination of the Plan by the
Board of Directors. The Board of Directors may amend or terminate the Plan at
any time. However, Shareholder approval is required to extend the term of the
Plan, to increase the maximum number of shares which may be issued (except in
the case of certain corporate reorganizations or stock splits), reduce the
minimum stock option price, increase the maximum exercise period of stock
options or stock appreciation rights, or amend the standards of participation
under the Plan.
ADMINISTRATION
The Board of Directors of the Corporation has appointed its Compensation
Committee (the "Committee") to administer the Plan. No member of that
Committee may be eligible to participate in the Plan. Furthermore, the
Committee may not act at such time when it has fewer than 2 disinterested
members.
PARTICIPATION
The Committee may select any officer or key employee of the Corporation
or its subsidiaries to participate in the Plan. Nonemployee directors may not
participate in the Plan.
OPTION GRANTS
The Committee determines the type and amount of options to be granted
under the Plan to each participant. The Committee may also impose
restrictions on vesting or exercise of an option, as well as expiration dates
for options. In no event, however, may an option remain outstanding for more
than 10 years. More than 1 kind of option may be granted to any participant.
To provide a flexible and competitive program, the Plan gives the Committee
discretion to select awards from the various common forms described below.
This flexibility is considered necessary and important, as each type of option
or award can be an appropriate and effective action under certain
circumstances.
<PAGE>
The Committee may award 2 types of stock options to purchase Common Stock
of the Corporation: Incentive Stock Options ("ISO's") and Non-Qualified Stock
Options ("NQSO's"). The Committee may determine the terms and conditions of
options within limits prescribed in the Plan. Under either type of stock
option, the option price per share may not be less than the fair market value
of a share of the Corporation's Common Stock as of the date of grant. Under
the Plan, fair market value is the unweighted mean of the bid and asked prices
of such stock, as quoted in the over-the-counter market at the date of grant,
or in the event the stock was not traded on such date, on the first trading
date preceding the date as of which determination is being made. Except in
the event of death, disability or retirement of a participant, or in the event
of a change of control, stock options may not be exercised before the first
anniversary of a grant. Upon exercise of a stock option, the participant may
pay for the stock option in cash, in shares of the Corporation's Common Stock
having an aggregate fair market value equal to the option price, or a
combination of both. Stock options are generally not transferable.
The Committee may also award, in conjunction with either type of option,
a Stock Appreciation Right ("SAR"). Under an SAR, the participant may
surrender all or a portion of the underlying stock option and receive, in
exchange therefore, payment of no more than 100% of the increase in fair
market value of the shares of Common Stock since the date of grant. The
participant pays nothing at the time of exercise, but receives only the amount
of the increase in the value of stock covered by the SAR. An SAR may be
exercisable only during the period that the related stock option can be
exercised, must terminate no later than the date the related stock option
terminates, and is transferable only with and to the extent the related stock
option is transferable. The Committee may limit the payment on exercise of an
SAR to less than 100% of the increase in value or set a maximum amount of
payment. Payment may be made in cash, in shares of Common Stock or in a
combination of cash and shares.
SHARES AVAILABLE
Under the Plan 450,000 shares of the Corporation's Common Stock are
reserved for grants of options under the Plan. This pool of reserved shares
may be adjusted by the Board of Directors to reflect appropriate increases in
shares available as a result of stock splits, mergers or other changes in
corporate structure of the Corporation. There have been no stock splits or
other changes in corporate structure of the Corporation since inception of the
Plan, other than the 3-for-2 stock split declared by the Corporation's Board
of Directors on January 18, 1994, a stock split from which the original
450,000 share pool was specifically excluded. Consequently, no adjustments to
date have been made in the original 450,000 share pool reserved for stock
option grants.
The shares issued upon exercise of options may be either treasury shares
or shares which have been authorized but unissued. If an option terminates
without having been exercised in full, the shares of Common Stock which are
not purchased again become available for issuance under the Plan.
<PAGE>
As of March 10, 1997, the Corporation has granted ISO's to purchase
315,370 shares of the Corporation's Common Stock and NQSO's to purchase 94,330
shares of the Corporation's Common Stock. These options have been granted to
a group consisting of 104 officers and key employees of the Corporation's
subsidiary banks. As of March 10, 1997, options representing a total of
17,226 shares of the Corporation's Common Stock have been exercised and
options representing 4,000 shares of the Corporation's Common Stock have been
canceled. This activity leaves 44,300 shares available for new grants under
the Plan.
The fair market value of a share of Common Stock of the Corporation at
the close of business on Friday, February 14, 1997 was approximately $41.00.
This fair market value was established as the mean of the bid and asked price
of a share of the Corporation's Common Stock in the over-the-counter market as
of the close of business February 14, 1997. Based upon the option prices for
the options currently outstanding, the approximate value of all outstanding
options under the Plan was $4,449,903 (calculated by subtracting the option
price for outstanding options from the fair market value of all shares which
are the subject of such outstanding options).
TAX EFFECTS
The grant of an ISO, an NQSO or an SAR does not result in taxable income
to the participant at the time of grant. Further, no taxable income is
realized by a participant on exercise of an ISO. The excess of the fair
market value of the shares on the date of exercise of an ISO over the option
price may be a tax preference item. If the shares acquired under an ISO are
held for at least 2 years from the date of grant, and at least 1 year from the
date of exercise, then taxation on gain is deferred until disposition or sale
of the shares. The Corporation does not receive a deduction against its
taxable income in the case of an ISO.
On the exercise of an NQSO, the participant normally realizes ordinary
income equal to any excess of the fair market value of shares on the date of
exercise over the option price. The Corporation is entitled to a
corresponding deduction against its taxable income.
On exercise of an SAR, the participant normally realizes taxable ordinary
income equal to the cash and fair market value of shares received upon
exercise. The Corporation is entitled to a corresponding deduction against
its taxable income.
BENEFITS
The benefits or amounts which may be granted under the Plan to key
employees are established at the discretion of the Committee granting such
options. Accordingly, such benefits or amounts are not determinable.
<PAGE>
PROPOSED AMENDMENT
The Board of Directors of the Corporation may not amend the Plan to
increase the number of shares of Common Stock which may be issued under the
Plan, except as provided in Section 1.3 of the Plan, without approval of the
holders of a majority of the Corporation's stock entitled to vote at a duly
held meeting of such Shareholders.
The Board of Directors has adopted, and proposes that the Shareholders
ratify and approve, an amendment to the Fort Wayne National Corporation 1994
Stock Incentive Plan to increase the number of shares authorized for issuance
under the Fort Wayne National Corporation 1994 Stock Incentive Plan from
450,000 to 1,350,000 in order to provide an adequate number of shares for the
purposes of the Plan.
The Board of Directors, therefore, recommends that the Shareholders adopt
the following resolution:
RESOLVED, that effective April 22, 1997, the following amendment shall be
made to Section 1.3 of the Fort Wayne National Corporation 1994 Stock
Incentive Plan:
The first sentence of Section 1.3 shall be replaced by the
following sentence:
The sum of the number of shares of FWNC Common Stock for which
Incentive Stock Options ("ISO's") and Non-Qualified Stock Options
("NQSO's") (both as defined in subsection 3.1) may be granted may
not exceed 1,350,000.
The remainder of Section 1.3 of said Plan shall remain unchanged
and is hereby reconfirmed and restated.
OTHER RECENT AMENDMENT
The Board of Directors has made 1 recent amendment to the Plan. The
Plan, as originally adopted in 1994, required stock options of retired
Participants to terminate on the first anniversary of the Participant's
retirement, as approved by the Committee, from employment by the Corporation
or a subsidiary. Effective October 17, 1995, Section 3.4(d) of the Plan was
amended, with respect to stock options granted after November 15, 1994, to
provide that stock options of retired Participants terminate on the fifth
anniversary of the Participant's retirement, as approved by the Committee,
from employment by the Corporation or a subsidiary. The amendment described
above did not require ratification or approval by the Corporation's
Shareholders.
BOARD OF DIRECTORS' RECOMMENDATION
Adoption of Proposal No. 2 which would increase the number of shares of
Common Stock of the Corporation available for the 1994 Stock Incentive Plan to
1,350,000 shares requires the affirmative vote of the holders of a majority of
<PAGE>
the Corporation's outstanding shares of Common Stock entitled to vote at the
1997 Annual Meeting of Shareholders. The Board of Directors recommends that
you vote FOR Proposal No. 2.
PROPOSAL NO. 3
ELECTION OF DIRECTORS
As of the Annual Meeting on April 22, 1997, the Board of Directors will
consist of 20 members divided into 3 classes, A, B and C. Class A will be
comprised of 6 members and Classes B and C will be comprised of 7 members
each.
James W. Rogers tendered his resignation as a Class C Director of the
Corporation, to be effective May 31, 1996, due to business reasons which would
impede his ability to serve on the Board. His resignation was accepted by the
Board of Directors effective May 31, 1996. The Board of Directors filled this
vacancy, in accordance with Article VII, Section 7.6, of the Amended Articles
of Incorporation of the Corporation, by the appointment, of Dennis J.
Schwartz, effective June 18, 1996, to serve the remaining term of Mr. Rogers
which will expire at the 1997 Annual Meeting of Shareholders.
Unfortunately a vacancy was created in Class B of the Board of Directors
by the death of Richard C. Menge on November 28, 1996. The Board of Directors
filled this vacancy, in accordance with Article VII, Section 7.6, of the
Amended Articles of Incorporation of the Corporation, by appointment, of Julie
I. Walda, effective January 21, 1997, to serve the remaining term of Mr. Menge
which will expire at the 1999 Annual Meeting of Shareholders.
The term of office of Class C Directors expires at the Annual Meeting of
Shareholders on April 22, 1997. The term of office of Class A Directors, none
of whom will be voted on at this meeting, will expire at the Annual Meeting in
1998, and the term of office of Class B Directors, none of whom will be voted
on at this meeting, will expire at the Annual Meeting in 1999. At each Annual
Meeting, Directors are to be elected for a term of 3 years, to succeed those
Directors whose terms expire at such meeting.
At this year's Annual Meeting, 7 Class C Directors are to be elected,
each to hold office for 3 years or until a successor is elected and qualified.
It is the intention of the persons named in the enclosed form of proxy to vote
the proxies, if authorized, for the election as Directors the 7 persons named
below as nominees. All of the nominees are now Directors of the Corporation.
In the event any nominee declines or is unable to serve as a Director (which
is not anticipated), the persons named as Proxies reserve full discretion to
vote for any other person who may be nominated. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock which are
voted is required for the election of Directors.
<PAGE>
The following table sets forth with respect to each nominee for Director,
and for each continuing Director, his/her age, principal occupation during the
past 5 years, other positions he/she holds with the Corporation, if any, other
directorships he/she holds, if any, the year in which he/she first became a
Director of the Corporation (or Fort Wayne National Bank, if the Director was
a Director of that bank prior to becoming a Director of the Corporation), and
the number of shares of Common Stock of the Corporation beneficially owned,
directly or indirectly, as at the close of business on February 14, 1997.
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS CLASS C DIRECTORS AT
ANNUAL MEETING TO BE HELD ON APRIL 22, 1997
FOR TERMS EXPIRING AT 2000 ANNUAL MEETING
Shares of Common
Capital Stock
Beneficially
Names and Occupation Director Owned as of February Percent
During Period Since 1991 Age Since 14, 1997 (1)(2) Owned
- -------------------------- --- -------- --------------------- -------
<S> <C> <C> <C> <C>
ROBERT A. ANKER ......... 55 1994 454 .004
American States Financial
Corporation (Property/Casualty
Insurance Holding Company), Chairman
and Chief Executive Officer
January 1997 to present, Director;
Lincoln National Corporation
(Insurance Holding Company),
President and Chief Operating
Officer to 1997;
Lincoln National Life
Insurance Company,
Chairman and Chief Executive
Officer to October 1996
THOMAS C. GRIFFITH........ 66 l986 3,154 .024
Retired
MICHAEL J. McCLELLAND..... 49 1994 4,678 (3) .036
Hardware Wholesalers, Inc.
(National Hardware Cooperative),
President and Chief Executive
Officer
PATRICK G. MICHAELS....... 50 l992 10,149 (5) .078
Barrett & McNagny (Attorneys
at Law), Partner (4)<PAGE>
PATRICIA R. MILLER........ 58 1994 1,066 .008
Vera Bradley Designs, Inc.
(Manufacturer of Designer
Luggage and Apparel),
President
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Capital Stock
Beneficially
Names and Occupations Director Owned as of February Percent
During Period Since 1991 Age Since 14, 1997 (1)(2) Owned
- ------------------------- --- -------- -------------------- -------
<S> <C> <C> <C> <C>
DENNIS J. SCHWARTZ........ 56 l996 1,178,102 (6) 9.095
Valley American Bank and Trust
Company, President; Chief
Executive Officer May 1996
to present
THOMAS M. SHOAFF.......... 55 l976 87,606 (7) .676
Baker & Daniels (Attorneys at
Law), Partner (4)
</TABLE>
<TABLE>
<CAPTION>
CLASS A DIRECTORS WHOSE TERMS
EXPIRE AT 1998 ANNUAL MEETING
Shares of Common
Capital Stock
Beneficially
Names and Occupations Director Owned as of February Percent
During Period Since 1991 Age Since 14, 1997 (1)(2) Owned
- ------------------------ --- -------- -------------------- -------
<S> <C> <C> <C> <C>
WALTER S. AINSWORTH..... 68 l982 3,322 (8) .026
Retired; Tokheim
Corporation (Manufacturer of
Gasoline Dispensing
Equipment), Director
WILLIS E. ALT, JR........ 53 1995 20,215 (9) (10) .156
First National Bank of Warsaw,
President and Chief Executive
Officer
MICHAEL C. HAGGARTY...... 62 l986 46,000 (9) (11) .355
The Auburn State Bank, President
and Chief Executive Officer
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Capital Stock
Beneficially
Names and Occupations Director Owned as of February Percent
During Period Since 1991 Age Since 14, 1997 (1)(2) Owned
- ------------------------- --- -------- -------------------- -------
<S> <C> <C> <C> <C>
M. JAMES JOHNSTON....... 55 l99l 44,241 (9) (12) .342
Fort Wayne National Corporation
and Fort Wayne National Bank,
Chairman of the Board January
1997 to present; Chief Executive
Officer July 1996 to present;
President and Chief Administrative
Officer, prior
JACKSON R. LEHMAN....... 65 l976 84,191 (9) (13) .650
Retired; Fort Wayne National
Corporation and Fort Wayne
National Bank, Chairman of
the Board to 1997;
Chief Executive Officer to
July 1996
JEFF H. TOWLES, M.D..... 68 1992 604 .005
Hughes Defense Communications
(Manufacturer of Electronic
Systems), Medical Director 1993
to present; Surgical Associates,
Inc., President to 1994
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CLASS B DIRECTORS WHOSE TERMS
EXPIRE AT 1999 ANNUAL MEETING
Shares of Common
Capital Stock
Beneficially
Names and Occupations Director Owned as of February Percent
During Period Since 1991 Age Since 14, 1997 (1)(2) Owned
- ------------------------- --- -------- -------------------- -------
<S> <C> <C> <C> <C>
STANLEY C. CRAFT...... 58 1993 1,204 .009
Retired; Essex Group, Inc.
(Manufacturer of Electric
Wire and Cable), President
and Chief Executive Officer
to March 1996
RICHARD B. DONER...... 64 l982 2,623 (14) .020
Doner & Associates
(Management Consultant),
President
JON F. FULLER......... 52 1993 3,772 (15) .029
Turf Specialties Corporation
(Wholesale Distributor of
Turf Products), President
JOANNE B. LANTZ....... 65 l990 1,498 .012
Retired; Indiana University-
Purdue University at Fort
Wayne, Chancellor to 1994
PAUL E. SHAFFER....... 70 l967 94,183 (16) .727
Retired; Fort Wayne National
Corporation and Fort Wayne
National Bank, Chairman
Emeritus of the Board to 1996;
Vice Chairman of the Board to 1994
JULIE I. WALDA........ 46 1997 5,200 (17) .040
The Journal-Gazette Company
(Newspaper Publishing Company),
Vice President; The Journal-
Gazette (Newspaper), Publisher
January 1997 to present;
Assistant Publisher, prior
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Capital Stock
Beneficially
Names and Occupations Director Owned as of February Percent
During Period Since 1991 Age Since 14, 1997 (1) (2) Owned
- ------------------------- --- -------- -------------------- -------
<S> <C> <C> <C> <C>
DON A. WOLF........ 67 l972 11,512 (18) .089
Retired; Clarcor Co.
(Manufacturer of Packaging
and Filters), Director
</TABLE>
(l) All Executive Officers and Directors as a group (28 persons, including
those named above) owned beneficially on February 14, l997, an aggregate
of 1,716,393 shares of the Corporation's Common Stock, which represented
13.251% of total shares then outstanding, including stock options
currently exercisable, and stock options exercisable within 60 days.
These shares include: 22,465 shares beneficially owned by Stephen R.
Gillig, one of the named executive officers in the Summary Compensation
Table which represented .173% of total shares then outstanding and
includes currently exercisable stock options, and stock options
exercisable within 60 days, to purchase 11,749 shares; and 23,318 shares
beneficially owned by Michael J. Eikenberry, one of the named executive
officers in the Summary Compensation Table which represented .180% of
total shares then outstanding, and includes 6,744 shares held in a trust
as to which shares Mr. Eikenberry has voting and investment power, and
currently exercisable stock options, and stock options exercisable within
60 days, to purchase 11,749 shares.
(2) Notwithstanding disclaimers of beneficial ownership by the person named,
the beneficial interest of spouses and children who share the same home
as the person named are included in the above schedule, but shares in
which other relatives have a beneficial interest are excluded.
(3) Includes 600 shares consisting of 300 shares owned by each of Mr.
McClelland's 2 minor sons.
(4) The law firms of Barrett & McNagny and Baker & Daniels rendered legal
services to the Corporation and its subsidiary banks during l996 and will
do so in l997. Patrick G. Michaels is a partner in the law firm of
Barrett & McNagny and Thomas M. Shoaff is a partner in the law firm of
Baker & Daniels.
(5) Includes 370 shares owned by Mr. Michaels' spouse.
(6) All shares are held by a partnership of which Mr. Schwartz is a general
partner. Of the shares presented, 714,585 shares are currently in the
form a derivative security, which shares are convertible into Common
Stock of the Corporation at the discretion of the Shareholder. As of
February 14, 1997, the derivative shares had not been converted into
Common Stock of the Corporation, therefore, those shares cannot be voted.
(7) Includes 8,500 shares in a trust as to which shares Mr. Shoaff has voting
and investment power, and 1,290 shares consisting of 430 shares owned by
each of Mr. Shoaff's 3 minor sons.
(8) Includes 300 shares owned by Mr. Ainsworth's spouse.
(9) Includes shares under stock options currently exercisable under the
Corporation's Stock Incentive Plan but, since these options have not been
exercised, those shares cannot be voted. The following Directors have
currently exercisable stock options, and stock options exercisable within
60 days, to purchase the following numbers of shares: M. James Johnston,
26,249; Jackson R. Lehman, 47,204; Willis E. Alt, Jr., 7,250; and
Michael C. Haggarty, 4,000.
(10) Includes 5,635 shares owned by Mr. Alt's spouse and 1,000 shares in a
trust as to which shares Mr. Alt has voting and investment power.
(11) Includes 150 shares owned by Mr. Haggarty's spouse and 41,000 shares in
a trust as to which shares Mr. Haggarty has voting and investment power.
(12) Includes 3,750 shares owned by Mr. Johnston's spouse and 614 shares
owned by one of Mr. Johnston's adult sons. Also includes 720 shares
owned by the mother of Mr. Johnston's spouse, as to which shares Mr.
Johnston's spouse has voting power and investment power, but disclaims
beneficial ownership.
(13) Includes 12,300 shares owned by Mr. Lehman's spouse.
(14) Includes 869 shares owned by Mr. Doner's spouse.
(15) Includes 894 shares owned by Mr. Fuller's spouse and 625 shares owned by
Mr. Fuller's adult daughter.
(16) Includes 10,000 shares owned by Mr. Shaffer's spouse and 10,000 shares
held in an Indiana nonprofit corporation as to which shares he shares
voting and investment power.
(17) Includes 5,000 shares held by a foundation as to which shares Ms. Walda
shares voting and investment power.
(18) Includes 8,100 shares held in a trust as to which shares Mr. Wolf shares
voting and investment power, but disclaims beneficial ownership.
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
All members of the Board of Directors of the Corporation also serve as
members of the Board of Directors of Fort Wayne National Bank. Both the
Corporation and that Bank held 12 regularly scheduled meetings and 1 special
meeting during 1996. In 1996, all directors, except M. James Johnston,
Jackson R. Lehman, Dennis J. Schwartz, Willis E. Alt, Jr. and Michael C.
Haggarty, were paid a monthly retainer of $300 for serving on the Board, an
attendance fee of $350 for each Board meeting attended, and $300 for each
committee meeting attended. In 1996, Willis E. Alt, Jr. and Michael C.
Haggarty were paid a monthly retainer of $300 for serving on the Board, and an
attendance fee of $350 for each Board meeting attended, for the months of
January and February. Pursuant to the Corporation's Nonemployee Director
Stock Incentive Plan, directors who are not employees of any subsidiary bank
of the Corporation were each awarded 120 shares of the Corporation's Common
Stock on April 16, 1996. On said date, the Corporation's Common Stock had a
fair market value of $30.00 per share.
The Board of Directors has, in addition to other committees, an Audit
Committee, a Compensation Committee and a Nominating Committee.
THE AUDIT COMMITTEE, comprised of R. Doner (Chairperson), S. Craft,
T. Griffith and M. McClelland, held 4 meetings during 1996. The functions
performed by the Audit Committee include: making recommendations to the Board
of Directors with respect to the selection of the Corporation's independent
auditors for the ensuing year; reviewing the independence of the independent
auditors; reviewing actions by management on the independent auditors' and
internal auditors' recommendations; meeting with management, the internal
auditors and the independent auditors to review the effectiveness of the
Corporation's system of internal control and internal audit procedures; and
reviewing reports of bank regulatory agencies and monitoring management's
compliance with recommendations contained in said reports. To promote
independence of the audit function, the Committee consults separately and
jointly with the independent auditors, the internal auditors and management.
THE COMPENSATION COMMITTEE, comprised of D. Wolf (Chairperson), S. Craft,
R. Menge (until his death on November 28, 1996) and J. Rogers (until his
resignation effective as of May 31, 1996), held 3 meetings during 1996. The
functions performed by the Compensation Committee include meeting with the
executive officers and making recommendations to the Board of Directors with
respect to officers' salaries and the setting of awards in compliance with the
Corporation's employee benefit plans.
THE NOMINATING COMMITTEE, comprised of D. Wolf (Chairperson), J. Lantz,
T. Shoaff and R. Menge (until his death on November 28, 1996), held 1 joint
meeting with the Board of Directors during 1996. The functions performed by
the Nominating Committee include making recommendations to the Board of
Directors with respect to nominees for election as Directors at the Annual
Meeting and nominees to fill vacancies on the Board of Directors between
annual meetings. The Committee will consider nominees recommended by
Shareholders in making its recommendations. Shareholders desiring to make
such recommendations should submit any such candidate's name in writing,
together with biographical information and written consent to nomination to:
Secretary, Fort Wayne National Corporation, P.O. Box 110, Fort Wayne, Indiana
46801. In order for such recommendations to receive consideration by the
Nominating Committee for the next Annual Meeting, they should be received no
later than December 31, 1997.
During the year 1996 each Director attended at least 75% of the aggregate
of the number of meetings of the Board of Directors and respective committees
on which he/she served except Walter S. Ainsworth, who attended 63% of the
meetings and Robert A. Anker, who attended 46% of the meetings.
EXECUTIVE COMPENSATION
For the purposes of the following discussion of Executive Compensation
and the Compensation Committee Report, the words "Bank" or "Banks", when used
without designation of a specific subsidiary bank, means the subsidiary bank
or banks involved.
The following table sets forth information concerning all compensation
for services in all capacities paid or accrued by subsidiary Banks during 1996
for the Chief Executive Officer of the Corporation and each of the 4 most
highly compensated executive officers, other than the Chief Executive Officer,
whose compensation exceeds $100,000. The Corporation pays no compensation to
its officers, all of whom are compensated as officers of subsidiary Banks.
The Corporation has no employees other than its officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
-------------------------------
Annual Compensation Awards Payouts
------------------- ---------------- -------------
Securi-
ties
Other Restr- Under-
Name Annual icted lying LTIP All Other
and Compen- Stock Options/ Pay- Compen-
Principal Salary Bonus sation Award- SARs (#) outs sation($)
Position Year ($) ($)(1) ($) (s)($) (2) ($) (3)
- ----------------- ---- ------- ------- ------- ------- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
M. James Johnston 1996 225,000 95,625 0 0 18,000 0 22,500
Chairman of the 1995 212,000 68,000 0 0 8,000 0 21,200
Board and Chief 1994 192,000 84,000 0 0 13,000 0 19,200
Executive Officer
of the Corporation
and Fort Wayne
National Bank
Jackson R. 1996 330,000 140,250 0 0 12,000 0 33,000
Lehman (3) 1995 315,000 100,000 0 0 10,000 0 31,500
1994 295,000 127,000 0 0 15,000 0 29,500
<PAGE>
Stephen R. Gillig 1996 126,000 64,000 0 0 10,000 0 12,600
President, Chief 1995 116,000 41,000 0 0 4,000 0 11,600
Administrative 1994 108,500 47,000 0 0 6,000 0 10,850
Officer and Sec-
retary of the
Corporation and
Secretary of Fort
Wayne National
Bank
Dennis J. 1996 102,083 55,000 0 0 5,000 0 17,500
Schwartz (4)
President and Chief
Executive Officer of
Valley American Bank
and Trust Company
Michael J. 1996 111,000 45,000 0 0 8,000 0 11,100
Eikenberry 1995 102,000 36,000 0 0 4,000 0 10,200
Executive Vice 1994 95,000 46,000 0 0 6,000 0 9,500
President and
Chief Lending
Officer of the
Corporation and
Wayne National Bank
</TABLE>
(1) Includes cash compensation received under the Corporation's Annual
Management Incentive Compensation Plan, described in the Compensation
Committee Report of this Proxy Statement.
(2) Includes only deferred compensation under the Corporation's Savings and
Profit Sharing Plan, described in the Compensation Committee Report of
this Proxy Statement.
(3) Mr. Lehman retired from his duties as Chairman of the Boards of the
Corporation and Fort Wayne National Bank on December 31, 1996, and his
duties as Chief Executive Officer of the Corporation and Fort Wayne
National Bank on June 30, 1996. Mr. Lehman will continue to serve as a
Director of the Corporation and Fort Wayne National Bank.
(4) The Corporation acquired Mr. Schwartz's employer, Valley American Bank
and Trust Company, effective June 1, 1996. Mr. Schwartz's compensation,
as presented, represents compensation received by him, or accrued to his
benefit, during the last 7 months of 1996.
The following table sets forth information concerning individual grants
of stock options, whether or not in tandem with stock appreciation rights
("SARs"), and freestanding SARs made during 1996 to each of the named
executive officers.
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1996 (1)(2)
Grant Date
Individual Grants Value
----------------------------------------------- ------------
Number of Percent
Securities of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or Grant Date
Granted Employees in Base Price Expira- Present Value
Name (#) Fiscal Year ($/Sh) tion Date ($) (3)
- -------------- ------------ ------------ ----------- --------- -------------
<S> <C> <C> <C> <C> <C>
M. James
Johnston 18,000 9.69% 32.125 8/16/01 122,600
Jackson R.
Lehman 12,000 6.46% 32.125 8/16/01 81,733
Stephen R.
Gillig 10,000 5.39% 32.125 8/16/01 68,111
Dennis J.
Schwartz 5,000 2.69% 32.125 8/16/01 34,056
Michael J.
Eikenberry 8,000 4.31% 32.125 8/16/01 54,489
</TABLE>
(1) The Compensation Committee of the Board of Directors is responsible for
the administration of the Corporation's Stock Incentive Plan, described
in the Compensation Committee Report of this Proxy Statement. All
options currently outstanding under the Plan are generally exercisable on
a graduated basis over a 4 year period.
(2) No associate of any director, executive officer, or nominee has received
any options under the Plan. No other person is likely to receive 5% of
the pool of shares of Common Stock reserved for use in the granting of
options under the Plan.
(3) Grant Date Present Value was calculated by utilizing a modified
Black-Scholes pricing model.
The following table sets forth information concerning each exercise of stock
options (or tandem SARs) and freestanding SARs during 1996 by each of the
named executive officers and the December 31, 1996 value of unexercised
in-the-money options and SARs.
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN 1996
AND DECEMBER 31, 1996 OPTION/SAR VALUES
Number of Value of
Securities Underlying Unexercised
Unexercised in-the-Money
Shares Options/SARs Options/SARs
Acquired At December 31, At December 31,
on Value 1996 (#) 1996 ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- -------------- --------- -------- --------------------- ---------------
<S> <C> <C> <C> <C>
M. James
Johnston 12,600 138,600 24,249/35,750 251,612/295,246
Jackson R.
Lehman 22,500 250,313 61,000/ 0 585,872/ 0
Stephen R.
Gillig 11,250 144,438 10,749/18,250 111,676/147,060
Dennis J.
Schwartz 0 0 0/ 5,000 0/ 29,375
Michael J.
Eikenberry 6,000 65,250 10,749/16,250 111,675/135,309
</TABLE>
The following table shows the estimated annual benefits payable on retirement
at normal retirement age to individuals with specified final average
compensation and credited years of service under the Corporation's
non-contributory Retirement Plan (1) and Benefits Restoration Plan (2).
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Final Average
Annual Years of Service (3)
Compensation 15 20 25 30 35 40
- ------------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 75,000 $ 14,063 $ 18,750 $ 23,438 $ 28,125 $ 32,813 $ 37,500
100,000 18,750 25,000 31,250 37,500 43,750 50,000
125,000 23,438 31,250 39,063 46,875 54,688 62,500
150,000 28,125 37,500 46,875 56,250 65,625 75,000
175,000 32,813 43,750 54,688 65,625 76,563 87,500
200,000 37,500 50,000 62,500 75,000 87,500 100,000
225,000 42,188 56,250 70,313 84,375 98,438 112,500
250,000 46,875 62,500 78,125 93,750 109,375 125,000
275,000 51,563 68,750 85,938 103,125 120,313 137,500
300,000 56,250 75,000 93,750 112,500 131,250 150,000
325,000 60,938 81,250 101,563 121,875 142,188 162,500
350,000 65,625 87,500 109,375 131,250 153,125 175,000
375,000 70,313 93,750 117,188 140,625 164,063 187,500
400,000 75,000 100,000 125,000 150,000 175,000 200,000
425,000 79,668 106,250 132,813 159,375 185,938 212,500
</TABLE>
<PAGE>
(1) The Corporation's non-contributory Retirement Plan is a defined benefit
pension plan. Fort Wayne National Bank serves as trustee under the Plan.
All salaried employees of the Banks are eligible to participate, together
with certain hourly employees. Directors who are not employees of a Bank
are not eligible to participate. Participation commences for an employee
on the January 1st or July 1st following his/her attainment of age 21 and
his/her completion of 1 year of service with a Bank. A Participant is
100% vested in his/her accrued benefit after he/she has 5 years of
service with a Bank. The amount of a Participant's monthly retirement
income payable on his/her normal retirement date is 1.25% of his/her
average monthly base salary multiplied by his/her years of credited
service, provided that his/her monthly retirement income shall not exceed
50% of his/her average monthly earnings, as determined on any 5
consecutive anniversary dates coincident with or preceding his/her normal
retirement date. Benefits are paid from the Plan in various forms of
annuities, which are actuarially equivalent.
(2) The Corporation's Benefits Restoration Plan restores to eligible
participants certain benefits or contributions not available to such
individuals under the Corporation's non-contributory Retirement Plan,
Savings and Profit Sharing Plan, Long Term Disability Plan, and Group
Life Insurance Plan (all of which plans are hereinafter collectively
referred to as "Employee Benefit Plans"). The Benefits Restoration Plan
restores benefits that are otherwise not available as a result of the
imposition of Internal Revenue Code section 415 (which places certain
limitations on the amount of contributions and/or benefits an individual
may receive from a qualified retirement plan), Internal Revenue Code
section 401(a)(17) (which limits the amount of compensation of an
individual that may be considered for qualified retirement plan purposes),
and certain underwriting or plan provisions which impose dollar maximums or
limits that restrict benefits based on pay levels. Participation in the
Benefits Restoration Plan is limited to those employees of any of the
Banks who participate in the Employee Benefit Plans and whose
participation in the Benefits Restoration Plan is approved by both the
Board of Directors of the Corporation and the Board of Directors of the
Bank which employs such individual. As of December 31, 1996, M. James
Johnston and Jackson R. Lehman are the only individuals named in the
Summary Compensation Table who are participants in the Benefits
Restoration Plan. A participant's benefits are generally payable from
the Benefits Restoration Plan in the same manner and at the same time as
benefits are payable to the participant or the participant's beneficiary
under the applicable employee benefit plan to which the benefit
restoration feature applies. The benefits under the Benefits Restoration
Plan are not funded and are payable out of the general assets of the
Banks.
(3) The years of service credited under the Plan to the individuals named
above are: M. James Johnston, 29 years; Jackson R. Lehman, 40 years;
Stephen R. Gillig, 19 years; Dennis J. Schwartz 1 year; and Michael J.
Eikenberry, 31 years.
<PAGE>
CHANGE OF CONTROL ARRANGEMENTS
The Compensation Committee of the Board of Directors is responsible for
the administration of the Corporation's Executives' Change of Control Benefit
Plan, described in the Compensation Committee Report of this Proxy Statement.
COMPENSATION COMMITTEE REPORT
This report shall not be deemed as proxy soliciting material, material
filed with the SEC or material incorporated by reference into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934.
The compensation of the Chief Executive Officer of the Corporation, and
of each of the executive officers named in the Summary Compensation Table, is
established by the Board of Directors of the Corporation based upon the
recommendation of the Compensation Committee. The performance of the
Corporation in 1996, relative to comparable bank holding companies, was
favorable and it is the policy of the Compensation Committee to compensate its
Chief Executive Officer, and the named executive officers, based upon
performance of the Corporation and individual contributions to such
performance. In establishing the compensation of the named executive
officers, the Compensation Committee utilizes the same factors and criteria
upon which the Chief Executive Officer's compensation is determined.
The components of the compensation of the Chief Executive Officer and
each of the named executive officers are: (a) base salary; (b) Management
Incentive Compensation Plan; (c) Savings and Profit Sharing Plan; (d) Stock
Incentive Plan; (e) non-contributory Retirement Plan and Benefits Restoration
Plan; (f) Executives' Change of Control Benefit Plan; and (g) perquisites.
BASE SALARY
The Compensation Committee utilizes executive compensation studies,
including studies prepared by nationally recognized compensation consulting
companies and public accounting firms, to establish the Chief Executive
Officer's base salary, the base salaries of other executive officers,
including those named in the Summary Compensation Table, and the salaries of
other employees. The Corporation is included in these studies.
The primary objective of the Compensation Committee is to establish a
base salary that is competitive with other bank holding companies in the
Midwest with an emphasis toward more variable compensation linked to the
Corporation's overall performance. Because the Corporation competes with
other banks in the Midwest in hiring and retaining executive employees, it
utilizes these studies in establishing executive compensation, which reflects
compensation paid by the Corporation's competitors. The base salary of the
Chief Executive Officer for 1996 was $225,000, which was in the lower half of
comparable bank holding companies included in the studies utilized.
The Corporation competes with several non-bank holding companies with
respect to stock value and, while several bank holding companies in the
Midwest are included in the peer group disclosed in the Performance Graph
section of this Proxy Statement, the Corporation utilizes the Standard & Poors
500 Stock Index and the Keefe, Bruyette and Woods, Inc. KBW 50 Index in the
preparation of its Performance Graph because the companies included in those
indices are the companies with whom the Corporation competes for investors.
<PAGE>
MANAGEMENT INCENTIVE COMPENSATION PLAN
The Compensation Committee administers the Corporation's Management
Incentive Compensation Plan. All employees whose salaries, as determined by
the Board of Directors, are in a certain salary grade level, or above, are
Participants in this Plan. In 1996, all the executive officers, and other key
officers of the Banks, were Participants in this Plan. This plan was designed
and adopted to achieve the following objectives: (a) encourage Participants to
achieve superior performance of their duties and to better their services; (b)
provide executive compensation which is competitive with other banks and
provide the potential for payment of meaningful cash awards; (c) attract and
retain personnel of outstanding ability and encourage excellence in the
performance of individual responsibilities; (d) motivate and reward those
members of management who contribute to the success of the Corporation; (e)
increase the profitability and growth of the Corporation in a manner which is
consistent with other goals of the Corporation, its stockholders and its
employees; and (f) allow for flexibility which permits revision and
strengthening of the Plan from time to time to reflect changing organizational
goals and objectives.
The Management Incentive Compensation Plan bonus paid to the Chief
Executive Officer, and to each of the named executive officers, is tied to:
(a) the Corporation's earnings for the year; (b) its return on shareholders'
equity for the year; and (c) its return on average assets for the year.
Performance targets for the Corporation are established by the Compensation
Committee at the beginning of each year consistent with the profit plan of the
Corporation as approved by the Board of Directors. An incentive compensation
fund is established at incremental levels with respect to the target levels.
Threshold levels are established below which no incentive compensation for the
year will be paid by the Corporation.
The Participants in the Corporation's Management Incentive Compensation
Plan are divided into 3 groups, to each of which the Compensation Committee
annually assigns performance goals for the year based upon: (a) the
Corporation's income before security transactions for the year (IBST) as
reported in the Corporation's Annual Report to Shareholders; (b) its return on
Shareholders' equity for the year (ROE) computed by dividing income before
security transactions by the Shareholders' equity of the Corporation at the
beginning of the calendar year as reported in the Corporation's Annual Report
to Shareholders; and (c) its return on average assets (ROAA) computed by
dividing the mean of its daily average assets by its net income for the year.
The amount of the fund for each group is based upon a percent (determined
annually) of the aggregate base salaries of the Participants in the group.
The allocation of the fund among the Participants in the group is determined
by the Compensation Committee annually, based upon recommendations by the
Chief Executive Officer of the Corporation. For the year 1996, 36% of the
total award was based upon the IBST goal, 39% on the ROE goal, and 25% on the
ROAA goal. The Compensation Committee may authorize up to 20% of the fund to
be carried over for 1 year. None of the total fund has been carried over to
1997.
For 1996, the IBST goal was met, and each the ROE goal and the ROAA goal
was exceeded. The Management Incentive Compensation Plan bonus granted to the
Chief Executive Officer for 1996 was $95,625. This bonus was 43% of the Chief
Executive Officer's base salary and, based upon the executive compensation
studies used, was consistent with the average incentive bonus paid to chief
executive officers of comparable bank holding companies.
<PAGE>
SAVINGS AND PROFIT SHARING PLAN
The Corporation's Savings and Profit Sharing Plan is a defined
contribution savings retirement plan, with an individual account for each
Participant. Fort Wayne National Bank serves as trustee under the Plan. All
salaried employees of the Banks are eligible to participate, together with
certain hourly employees. Participation commences for an employee on the
January 1st or July 1st following his/her completion of 1 year of service with
a Bank. Participants are entitled to 100% vesting after achieving 5 years of
service. The Corporation contributes to the plan each year a sum which is the
same percentage of its pre-tax net operating earnings (not less than 6% nor
more than 10%) as its net operating earnings after tax and plan contributions
bear to total Shareholders' equity at the beginning of the year, but, (a) no
contribution is made if those earnings after tax and plan contributions are
less than 6% of total Shareholders' equity and, (b) the contribution may not
exceed 10% of the annual compensation (defined as total cash compensation
exclusive of bonuses and the cost of group term life insurance) of all
Participants for the year. The contributions are allocated pro rata among
Participants on the basis of their annual compensation. Participants are
entitled to make voluntary non-deductible contributions to their accounts.
Participants may make salary-reduction contributions pursuant to Internal
Revenue Code Section 401(k). A Participant or his/her beneficiary is entitled
to receive his/her vested account balance in the event of the Participant's
death, retirement, or termination of employment for any reason. Benefits may
be paid either in a lump sum or in installments.
For 1996, the Corporation's net operating earnings after tax and plan
contributions was greater than 10% of total Shareholders' equity at the
beginning of 1996. Consequently, the Corporation contributed 10% of annual
compensation for 1996 to this Plan. The amount allocated to the Chief
Executive Officer for 1996 pursuant to the Corporation's Savings and Profit
Sharing Plan was $22,500.
STOCK INCENTIVE PLAN
The Compensation Committee administers the Corporation's Stock Incentive
Plan. The Committee may select any officer or key employee of the Corporation
or any of its subsidiaries to participate in the Plan and determines the type
and amount of the award to be granted to any Participant. Under the Plan, 2
types of stock options, Incentive Stock Options and Non-Qualified Stock
Options, to purchase Common Stock of the Corporation may be awarded by the
Committee. The Committee determines the specific terms and conditions of such
stock options within the limits of the Plan. Under either type of stock
option, the option price per share may not be less than the fair market value
of a share of Common Stock on the date of the grant. Except in the event of
death, disability or retirement of the Participant, or in the event of a
change of control of the Corporation, the stock options may not be exercised
before the first anniversary of the grant. The right to exercise the stock
<PAGE>
option must terminate by the earliest of the tenth anniversary of the grant,
the first anniversary of the Participant's death or disability, or the fifth
anniversary of the Participant's retirement, or the date on which the
Participant terminates employment for any other reason. The Committee may
also award a stock appreciation right in conjunction with either type of stock
option described above. Under a stock appreciation right, the Participant may
surrender all or any part of the related stock option, described above, and
receive in exchange payment of no more than 100% of the increase in the fair
market value of shares of Common Stock since the date of grant. The Committee
may limit the payment on exercise of a stock appreciation right to less than
100% of the increase in value or set a maximum amount of payment. Payment may
be made in cash, in shares of Common Stock of the Corporation, or in a
combination thereof. All stock options currently outstanding are generally
exercisable on a graduated basis over a 4 year period. During 1996, the
Committee awarded grants to purchase a total of 185,700 shares, including
awards granted to the Chief Executive Officer to purchase 18,000 shares.
NON-CONTRIBUTORY RETIREMENT PLAN AND BENEFITS RESTORATION PLAN
The Corporation's non-contributory Retirement Plan is a defined benefit
plan pursuant to which benefits accrue as a function of the employee's income
and credited years of service. The Corporation's Benefits Restoration Plan
restores to eligible employees certain benefits or contributions not available
to such individuals under the Corporation's non-contributory Retirement Plan,
Savings and Profit-Sharing Plan, Long Term Disability Plan, and Group Life
Insurance Plan, which would not otherwise be available because of limitations
imposed by the Internal Revenue Code.
CHANGE OF CONTROL BENEFIT PLAN
Recognizing that an unforeseen change of control is unsettling to the
Corporation's key executives, on January 21, 1997, the Board adopted the Fort
Wayne National Corporation Executives' Change of Control Benefit Plan
("Executives' Change of Control Plan") for the following reasons: (1) to
encourage attraction and the continued employment of certain executives
notwithstanding the possibility, threat or occurrence of a change of control;
(2) to enable such executives, if the Corporation is under a proposal for a
change of control, to help the Board assess the proposal and advise what would
be in the best interests of the Corporation, its shareholders, and customers
of the Banks without being unduly influenced by the uncertainty of continued
employment; (3) to demonstrate to executives the desire of the Corporation to
treat them fairly; and (4) to provide such executives with compensation and
benefits upon a change of control which are competitive with other
corporations and are designed to ensure that expectations of the executives
will be satisfied.
Executives eligible for participation in the Executives' Change of
Control Plan ("Eligible Executives") are the employees, of the Corporation
and/or the Banks, determined by the Compensation Committee. All Named
Executive Officers will be Eligible Executives during 1997. Pursuant to the
Executives' Change of Control Plan, the Corporation will enter into agreements
with Eligible Executives to provide severance benefits in the event that
within specified periods of time after a change of control of the Corporation
has occurred (1) the Corporation terminates their employment for any reason
other than cause, death or disability, or (2) the Eligible Executive
terminates employment for good reason, such as a change in the Eligible
Executives' responsibilities, a reduction in salary benefits, or relocation.
Any termination of employment by the Chief Executive Officer of the
Corporation during the 30 day period commencing with the first anniversary of
<PAGE>
a change of control is deemed to be for good reason under the Executives'
Change of Control Plan.
The benefit to which an Eligible Executive would be entitled under the
terms of the Executives' Change of Control Plan is in the case of the Chief
Executive Officer and the Chief Administrative Officer 300%, in the case of an
Eligible Executive who is an officer of the Corporation 200%, and in the case
of an Eligible Executive who is not an officer of the Corporation 150%, of (1)
the Eligible Executive's annual base salary based on the highest amount of
base salary paid during the calendar year preceding termination, plus (2) the
average of the prior 3 years' performance bonuses actually paid. This benefit
is reduced by the present value (determined as provided in Section 280G(d)(4)
of the Internal Revenue Code of 1986, as amended) of any other amount of
severance relating to salary or bonus continuation to be received by the
Eligible Executive under any severance plan, policy or arrangement of the
Corporation. This benefit is also reduced by the amount, if any, which
exceeds the deduction limitation on remuneration imposed by Section 162(m) of
the Internal Revenue Code of 1986, as amended. In addition, an Eligible
Executive would be entitled to benefits such as the continuation of certain
benefits under the welfare benefit plans in which he or she participates,
immediate and 100% vesting in all retirement benefits and the value of certain
unexercisable stock options and restricted stock. The Corporation must
reimburse an Eligible Executive any and all legal fees and expenses incurred
by the Eligible Executive relating to enforcing the Corporation's obligations
under the Executives' Change of Control Plan. The Executives' Change of
Control Plan supplements and does not supersede other plans, contracts of
employment, or other arrangements which Eligible Executives may have with the
Corporation or the Banks.
PERQUISITES
The Compensation Committee annually establishes perquisites for the Chief
Executive Officer, and other employees of the Banks including the named
executive officers, based upon perquisites provided to chief executive
officers, and other employees, of similar institutions and based upon the
perceived needs of the Corporation to make such perquisites available for
purposes of competition in its market. The value of perquisites provided to
the Chief Executive Officer and other employees of the Banks is less than the
threshold reporting requirement of the proxy rules.
TOTAL COMPENSATION OF CHIEF EXECUTIVE OFFICER
The total compensation of the Chief Executive Officer for 1996 was
$343,125, excluding the non-contributory Retirement Plan, Benefits Restoration
Plan and perquisites. The executive compensation studies utilized indicate
that the compensation for the Chief Executive Officer of the Corporation is in
the lower half of compensation of chief executive officers of similar size
bank holding companies in the Corporation's geographic market area.
COMPENSATION COMMITTEE MEMBERS
The following Directors served on the Compensation Committee of the Board
of Directors of the Corporation in 1996:
Don A. Wolf, Chairman Jon F. Fuller
Robert A. Anker Thomas C. Griffith
Stanley C. Craft
PERFORMANCE GRAPH
The following graph (1) compares the yearly change in the cumulative
total shareholder return on the Common Stock of the Corporation (FWNC) with
the cumulative total return of the Standard & Poor's 500 Stock Index (S & P
500) and the Keefe, Bruyette and Woods, Inc. KBW 50 Index (KBW 50), assuming
reinvestment of dividends.
<PAGE>
<TABLE>
<CAPTION>
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN AMONG FORT WAYNE
NATIONAL CORPORATION, S & P 500 INDEX AND KBW 50 INDEX
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN (3)
FWNC 100.0 126.66 109.91 118.94 148.74 185.03
S & P 500 100.0 107.61 118.46 120.02 165.13 203.11
KBW 50 (2) 100.0 127.42 134.48 127.62 204.4 289.15
</TABLE>
(1) This graph shall not be deemed as proxy soliciting material, material
filed with the SEC or material incorporated by reference into any filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934.
(2) The KBW 50 Index is made up of 50 of the nation's most important banking
companies, including all money-center and most major regional banks, and
is meant to be representative of the price performance of the nation's
large banks. The KBW 50 Index is calculated in the same manner as the
S & P 500 Index. Both are market-capitalization-weighted indices.
(3) Total Return is based upon the assumption of the investment on January 1,
1992, of $100, in each, the Common Stock of the Corporation, the stocks
included in the S & P 500 Index and the stocks included in the KBW 50
Index.
INDEBTEDNESS OF MANAGEMENT
All directors, nominees for election as directors, and executive officers
of the Corporation, and certain members of the immediate families of such
persons, and certain corporations and organizations with which such persons
are associated, were customers of, and had banking transactions with, the
Corporation's subsidiary banks in the ordinary course of business during 1996.
All loans and commitments for loans included in such transactions were made on
substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons
and, in the opinion of the management of the applicable subsidiary bank of the
Corporation, did not involve more than a normal risk of collectibility or
present other unfavorable features.
<PAGE>
PROPOSAL NO. 4
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors proposes, for the approval of the Shareholders at
the Annual Meeting, the selection of the firm of Ernst & Young LLP as
independent auditors for the Corporation for the fiscal year ending
December 31, 1997. They have served the Corporation and Fort Wayne National
Bank continuously for many years. Although approval by Shareholders of the
Corporation's auditors is not required, the Corporation deems it desirable to
submit such selection for approval by the Shareholders. Ernst & Young LLP
served as independent auditors for the year ending December 31, 1996. A
representative of Ernst & Young LLP will be present at the Annual Meeting with
the opportunity to make a statement if he/she so desires. That representative
will be available to respond to questions relating to their audit of the
Corporation's financial statements submitted in writing before the meeting or
raised orally through the Chairman of the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers ("Reporting Persons") to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Corporation. The Corporation has designated an officer who is available
to the Corporation's Reporting Persons to assist them in filing the required
reports, and the Corporation circulates periodic transaction reminders and
other materials to promote compliance with Section 16(a). To the
Corporation's knowledge, based solely on its review of the copies of such
reports furnished to the Corporation and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to
Reporting Persons were complied with during the year ended December 31, 1996.
With respect to the year ended December 31, 1995, Patricia R. Miller filed 1
late report in 1996 covering 1 transaction.
OTHER BUSINESS
The Management of the Corporation knows of no other matters to be
considered at the meeting. However, if any matters other than those referred
to herein should properly come before the meeting, it is the intention of the
persons named in the Proxy to vote such Proxy in accordance with their best
judgment.
SHAREHOLDER PROPOSALS
Any Shareholder who intends to present a proposal for action at the 1997
Annual Meeting of Shareholders and desires that such proposal be included in
the Proxy Statement and Proxy for such meeting must furnish the proposal in
writing to the Secretary of the Corporation no later than December 31, 1997.
By Order of the Board of Directors
M. James Johnston
Chairman of the Board
Fort Wayne, Indiana
March 19, 1997
<PAGE>
EXHIBIT A
FORT WAYNE NATIONAL CORPORATION
1994 STOCK INCENTIVE PLAN
(1997 EDITION)
Section 1
General
1.1 Effective Date and Purpose. Fort Wayne National Corporation, an Indiana
corporation ("FWNC"), has established the FORT WAYNE NATIONAL CORPORATION
1994 STOCK INCENTIVE PLAN (the "Plan") effective as of January 18, 1994
(the "Effective Date"), subject to approval of the Plan at the 1994
Annual Meeting of FWNC shareholders by the holders of a majority of the
shares of FWNC stock entitled to vote at that meeting. The purpose of
the Plan is to promote the long-term financial performance of FWNC by (a)
attracting and retaining executive and other key employees of FWNC and
its Subsidiaries (as defined in subsection 2.1) who possess outstanding
abilities with incentive compensation opportunities which are competitive
with those of other major banking corporations; (b) motivating such
employees to further the long-range goals of FWNC; and (c) furthering the
identity of interests of participating employees and FWNC shareholders
through opportunities for increased employee ownership of FWNC common
stock.
1.2 Plan Administration. The Plan shall be administered by the Committee (as
described below). In addition to those rights, duties and powers vested
in the Committee by other provisions of the Plan, the Committee shall
have sole authority to:
(a) interpret the provisions of the Plan;
(b) adopt, amend and rescind rules and regulations for the
administration of the Plan;
(c) impose such limitations, restrictions and conditions upon grants and
awards under the Plan as it shall deem appropriate; and
(d) make all other determinations deemed by it to be necessary or
advisable for the administration of the Plan;
provided that the Committee shall exercise its authority in accordance
with the provisions of the Plan. The Committee may not exercise its
authority at any time that it has fewer than two members. The Committee
shall exercise its authority only by a majority vote of its members at a
meeting or by a writing without a meeting.
At any date, the members of the Committee shall be those members of
the Compensation Committee of the Board of Directors of FWNC who are
Disinterested Persons, that is those members not eligible, and who have
not been eligible within one year preceding service on the Committee, to
participate in the Plan or any other plan of FWNC or a Subsidiary under
which stock options or stock appreciation rights of FWNC or a Subsidiary
are granted. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members, and
appoint new members in substitution, but in all events such new members
shall be Disinterested Persons. Participation in the Fort Wayne National
Corporation 1994 Nonemployee Director Stock Incentive Plan, which is a
formula plan under Rule 16b-3(c)(2) under the Securities Exchange Act of
1934, shall not disqualify a director from being a Disinterested Person
for purposes of administering this Plan.
1.3 Shares Available. The sum of the number of shares of FWNC common stock
for which Incentive Stock Options ("ISOs") and Non-Qualified Stock
Options ("NQSOs") (both as defined in subsection 3.1) may be granted may
not exceed 1,350,000. If all or a portion of an ISO or NQSO expires or
is terminated without having been exercised in full and without having
been surrendered to exercise any related Stock Appreciation Right ("SAR")
(as defined in subsection 4.1) then the number of shares which are
forfeited or not purchased shall again be available for purposes of
making grants under this Plan. The shares of FWNC common stock delivered
pursuant to the Plan shall be authorized but unissued shares or
reacquired shares held by FWNC as treasury shares (including shares
purchased in the open market). In the event of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split or other
similar change in the corporate structure or capitalization of FWNC which
affects the FWNC common stock, appropriate adjustment, as determined by
the Board of Directors of FWNC (or its successor), shall be made with
respect to the number and kinds of shares (or other securities) which may
thereafter be awarded or by subject to options under the Plan. The
number of shares for which options may be granted under this Plan has
been established contemporaneously with action taken by FWNC to declare a
three-for-two stock split effective in April, 1994. Accordingly, no
further adjustment to either the number of shares for which options may
be granted under this Plan, or options granted under this Plan, if any,
shall be made on account of the April, 1994, three-for-two stock split.
Agreements evidencing grants and awards under the Plan shall be subject
to and shall provide for appropriate adjustments, as determined by the
Board of Directors of FWNC (or its successor) in the event of such
changes in the corporate structure or capitalization of FWNC occurring
after the date of grant or award.
(This Section amended effective April 22, 1997, upon approval by
shareholders of FWNC.)
1.4 Term, Amendment and Termination of Plan. Grants and awards may not be
made under the Plan after the earlier of January 17, 2004, or the
termination date of the Plan. The Board of Directors of FWNC may amend
or terminate the Plan at any time except that, without the approval of
the holders of a majority of FWNC stock entitled to vote at a duly held
meeting of such shareholders, the Board may not:
(a) increase the number of shares of common stock which may be issued
under the Plan, except as provided in subsection 1.3;
(b) reduce the minimum option price under any stock option, except as
provided in subsection 1.3;
(c) increase the maximum period during which Incentive Stock Options,
Non-Qualified Stock Options and Stock Appreciation Rights may be
exercised;
(d) extend the term of the Plan; or
(e) amend the standards for participation described in Section 2.
In addition, the Committee may amend or modify any outstanding
option in any manner to the extent that the Committee would have had the
authority to initially grant such options as so modified or amended,
including without limitation, to change the date or dates as of which an
option becomes exercisable. Provided, no modification shall be permitted
where such modification would be considered as the granting of a new
option.
Amendment or termination of the Plan shall not affect the validity
of terms of any grant or award previously made to a Participant in any
way which is adverse to the Participant without the consent of the
Participant.
1.5 Compliance with Applicable Law. The Committee may postpone any exercise
of an ISO, NQSO or SAR for such time as the Committee in its discretion
may deem necessary in order to permit FWNC (a) to effect or maintain
registration of the Plan or common stock issuable pursuant to the Plan
under the Securities Act of 1933, as amended, or the securities laws of
any applicable jurisdiction; (b) to take any action necessary to comply
with restrictions or regulations incident to the maintenance of a public
market for FWNC common stock; or (c) to determine that no action referred
to in (a) or (b) above needs to be taken. FWNC shall not be obligated to
issue shares upon exercise of an ISO, NQSO or SAR in violation of any law
or regulation. Any such postponement shall not extend the term of an
ISO, NQSO or SAR. Neither FWNC nor its directors or officers shall have
any obligation or liability to any Participant (or successor in interest)
because of the loss of rights under any grant or award under the Plan due
to postponements pursuant to this subsection.
1.6 Withholding Taxes. FWNC and its Subsidiaries shall have the right to
deduct from any cash payment made pursuant to the Plan the amount of any
tax required by law to be withheld from that payment. FWNC and its
Subsidiaries shall have the right to require payment, in cash or in
equivalent value in FWNC common stock, to them from any person entitled
to receive FWNC common stock pursuant to the Plan of the amount of any
tax required by law to be withheld with respect to that stock prior to
its delivery.
Section 2
Plan Participation
2.1 Participation Designations. The Committee may, at any time, designate
any officer or key employee of FWNC or of a Subsidiary to be a
Participant. For purposes of the Plan, the term "Subsidiary" means any
corporation of which, at any date, FWNC owns directly, or indirectly
through an unbroken chain of subsidiary corporations, stock possessing 50
percent or more of the total combined voting power of all classes of
stock of that corporation.
2.2 Participation is Not a Contract of Employment. The Plan does not
constitute a contract of employment. Participating in the Plan does not
give any employee the right to be retained in the employ of FWNC or a
Subsidiary and does not limit in any way the right of FWNC or a
Subsidiary to change the duties or responsibilities of any employee.
Section 3
Stock Options
3.1 Grantees. The Committee may, at any time, designate a Participant to
receive an Incentive Stock Option or Non-Qualified Stock Option (each as
defined below) whether or not the Participant has previously received a
grant under the Plan. For purposes of the Plan, the term "Incentive
Stock Option" means an option to purchase FWNC common stock which meets
the requirements of Section 422 of the Internal Revenue Code of 1954, as
amended (the "Code") and the term "Non-Qualified Stock Option" means an
option to purchase FWNC common stock which is not an Incentive Stock
Option. Each ISO and NQSO granted under the Plan shall be evidenced by
an agreement between the Participant and FWNC. The provisions of each
agreement shall be determined by the Committee in accordance with the
provisions of the Plan. A Participant shall not have any rights of a
shareholder of FWNC common stock with respect to shares subject to an ISO
or NQSO until such shares are purchased upon exercise of the option.
3.2 Number of Shares Optioned and Option Price. The Committee shall, subject
to the limitations of subsection 1.3 and this Section 3, determine the
number of shares of FWNC common stock which may be purchased and the
option price of each share on exercise of each ISO and NQSO granted under
the Plan. To the extent that the aggregate Fair Market Value of stock
with respect to which ISOs are exercisable for the first time by any
Participant during any calendar year exceeds $100,000, such options shall
be treated as NQSOs. The foregoing limitation shall be applied by taking
options into account in the order in which they were granted. Provided,
in the event and to the extent limits on the maximum number of shares for
which ISOs may be granted under Section 422(b) shall be increased, the
maximum number of shares or amount for which ISOs may be granted under
this Plan and other plans shall be similarly increased. The option price
of each share under an ISO or NQSO shall not be less than 100 percent of
the Fair Market Value of a share of FWNC common stock on the date the
option is granted. For purposes of the Plan, the term "Fair Market
Value" means the unweighted mean of the bid and ask price of a share of
FWNC stock, as quoted in the over-the-counter market at the date of
grant, or, in the event the stock was not traded on such date, on the
first date that the stock was so traded which next precedes the date as
of which the determination is being made.
3.3 Exercise of Options and Payments. Each ISO and NQSO shall become
exercisable in full at such time, or in such portions at such times, as
the Committee determines, subject to the following provisions of this
subsection 3.3. No ISO or NQSO granted to a Participant shall be
exercisable prior to the first anniversary of the date that the Option
was granted except, in the discretion of the Committee, if the
Participant's employment with FWNC and all of its Subsidiaries terminates
by reason of death, Disability (as defined in Section 37(c)(3) of the
Code) or retirement (as described in subsection 3.4(d)). During any
period that an ISO or NQSO is exercisable, it may be exercised by
delivering a written notice to FWNC at its principal office by registered
or certified mail stating the number of shares with respect to which the
Option is being exercised and specifying a date not less than five nor
more than 15 days after the receipt of such notice on which the shares
will be taken up and payment made therefore. Payment may be made in (a)
cash, or (b) in the event the Committee shall so authorize such an
exchange, in shares of FWNC common stock with an aggregate Fair Market
Value as of the close of trading on the trading day immediately preceding
the date of exercise equal to the purchase price, or in any combination
of cash and, if authorized by the Committee, such shares.
3.4 Termination of Options. Each ISO and NQSO shall terminate and not be
exercisable after the date determined by the Committee but in no event
later than the earliest of (a) the tenth anniversary of the date that the
option was granted; (b) the date the Participant's employment with FWNC
and all Subsidiaries terminates for reasons other than described in (c)
or (d) next following; (c) the first anniversary of the date the
Participant's employment with FWNC and all Subsidiaries terminates on
account of death or Disability; or (d) the fifth anniversary of the
Participant's retirement, as approved by the Committee, from employment
by FWNC or a Subsidiary. Exercise of an option pursuant to Section
3.4(d) more than three (3) months after termination of employment shall
not qualify for ISO tax treatment in the hands of the Participant.
(This Section amended effective with respect to options granted after
November 15, 1994.)
3.5 Transferability. Each ISO and NQSO granted to a Participant may not be
transferred by the Participant except by will or the laws of descent and
distribution, and may be exercisable during the Participant's lifetime
only by the Participant.
3.6 Change in Control. Notwithstanding any to the contrary contained herein,
any stock option granted pursuant to the Plan shall, in the case of a
change in control ("Change in Control"), as hereinafter defined, become
fully exercisable as to all shares of stock, irrespective of any
restrictions on vesting or staged exercisability of such options, from
and after the date of such Change in Control and shall, subject to the
expiration provisions of Section 3.4(a), above, remain exercisable for a
period of three (3) months following the employee's termination of
employment with the FWNC or its Subsidiary, if said termination occurs
within one (1) year after the date of the Change in Control.
The term "Change in Control" shall mean a Change in Control of a nature
such that (1) it would be required to be reported by a person or entity
subject to the reporting requirements of Section 14(a) of the Securities
Exchange Act of 1934 in response to Schedule 14A of Regulation 14A, or
successor provisions thereto, as in effect on the date hereof, (2) a
"person" or "group" (as those terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934), is or becomes the "beneficial
owner" (as defined in Rule 13(d)-3 issued under the Securities Exchange
Act), directly or indirectly, of securities of FWNC or its Subsidiary,
Fort Wayne National Bank, representing in excess of thirty percent (30%)
of the voting securities of FWNC or its Subsidiary, Fort Wayne National
Bank, then outstanding, followed by the election by said person or group
of one or more representatives to the Board of Directors of FWNC or its
Subsidiary, Fort Wayne National Bank; (3) a person or group, as
hereinabove defined, is or becomes the beneficial owner, directly or
indirectly, of securities of FWNC or its Subsidiary, Fort Wayne National
Bank, representing in excess of fifty percent (50%) of the voting
securities of FWNC or its Subsidiary, Fort Wayne National Bank, then
outstanding, whether or not followed by the election by said person or
group of one or more representatives to the Board of Directors of FWNC or
its Subsidiary, Fort Wayne National Bank; or (4) any other event,
including but not limited to those set forth in paragraphs (1) through
(3) above, which shall have the effect of placing control of the business
and affairs of FWNC or its Subsidiary, Fort Wayne National Bank, in a
person or group as hereinabove defined, other than or different from the
present stockholders of FWNC or its Subsidiary, Fort Wayne National Bank.
Section 4
Stock Appreciation Rights
4.1 Grantees. The Committee may, at the time a stock option is granted under
Section 3 to a Participant or at any time thereafter, designate that
Participant to be granted, in conjunction with that stock option, a Stock
Appreciation Right (as defined below). No Stock Appreciation Right may
be granted in conjunction with a previously granted ISO without the
written consent of the affected Participant. For purpose of the Plan,
the term "Stock Appreciation Right" means a right to surrender all or a
portion of a stock option and receive, in exchange, payment of an amount
no greater than the excess of the Fair Market Value (as defined in
subsection 3.2) of one or more shares of FWNC common stock determined on
the date the right is exercised over the Fair Market Value of the same
number of shares of FWNC common stock determined on the date the related
stock option was granted. Each SAR granted under the Plan shall be
evidenced by an agreement between the Participant and FWNC. The
provisions of each agreement shall be determined by the Committee in
accordance with the provisions of the Plan.
4.2 Terms of SARs. The Committee shall determine the number of shares of
FWNC common stock and the percentage (not more than 100 percent) or
maximum amount of the increase in Fair Market Value of those shares over
the relevant period upon which payment of each SAR at exercise shall be
based. Each SAR may be exercisable at any date with respect to no more
than the number of shares for which the related stock option is
exercisable on that date. Each SAR issued in conjunction with an ISO may
be exercisable only when there has been an increase in Fair Market Value
of the shares over the relevant period. If a Participant to whom an SAR
has been granted is subject to Section 16 of the Securities Exchange Act
of 1934, as amended, the Committee may, at any time, impose such
conditions and limitations upon such SAR as the Committee deems necessary
or desirable for the Participant to comply with or obtain an exemption
from such Section 16 and applicable rules and regulations. The terms of
an SAR may include such other conditions and limitations on exercise as
the Committee deems desirable.
4.3 Exercise of SARs and Payment. During any period that an SAR is
exercisable, it may be exercised by delivering a written notice to FWNC
at its principal office by registered or certified mail which specifies
the extent to which the SAR is being exercised. Payment to the
Participant shall be made as soon as practicable after exercise of the
SAR and may be made in cash, in shares of FWNC common stock with an
aggregate Fair Market Value on the date of exercise equal to the amount
to be paid, or in any combination of cash and such shares as determined
by the Committee. Upon exercise of an SAR, the right to exercise the
related stock option shall automatically be terminated to the same extent
that the SAR was exercised.
4.4 Termination of SARs. Each SAR shall terminate and not be exercisable
after the same date that the related stock option terminates.
4.5 Transferability. Each SAR granted to a Participant may not be
transferred by the Participant except together with the related stock
option and except by will or the laws of descent and distribution, and
may be exercisable during the Participant's lifetime only by the
Participant.
<PAGE>
PROXY PROXY
FORT WAYNE NATIONAL CORPORATION
P.O. Box 110, Fort Wayne, IN 46801
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints C. David Silletto and William S. Latz as
Proxies, each with the power to appoint his substitute, and hereby authorizes
each of them acting alone to represent and to vote, as designated on the
reverse side of this proxy, all the shares of Common Stock of Fort Wayne
National Corporation held of record by the undersigned on March 10, 1997, at
the Annual Meeting of Shareholders to be held on April 22, 1997, or any
adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4. IT WILL BE VOTED IN THE PROXIES'
DISCRETION UPON OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE THE MEETING.
(Continued on reverse side)
<PAGE>
The Corporation's Board of Directors recommends a vote IN FAVOR of items
(1), (2), (3) and (4).
Please mark
your vote
indicated by [X]
this example
Proposal No. 1
To amend Article V of the Corporation's Articles of Incorporation to increase
the authorized shares of stock to 54,0000,000 shares.
FOR AGAINST ABSTAIN
[_] [_] [_]
Proposal No. 2
To approve an amendment to the Corporation's 1994 Stock Incentive Plan to
increase the authorized shares of Common Stock available for the Plan to
1,350,000 shares.
FOR AGAINST ABSTAIN
[_] [_] [_]
Proposal No. 3
The election of Directors in Robert A. Anker, Thomas C. Griffith,
Class C for a term expiring Michael J. McClelland, Patrick G.
in 2000: Michaels, Patricia R. Miller, Dennis J.
Schwartz, Thomas M. Shoaff
WITHHOLD
FOR AUTHORITY _________________________________________
[_] [_] (To withhold authority to vote for any
individual nominee, write the nominee's
name on the line above )
Proposal No. 4
Ratification of the appointment of Ernst & Young LLP as the independent
auditors of the Corporation.
FOR AGAINST ABSTAIN
[_] [_] [_]
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President,
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE, AND RETURN THE
PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Number of Shares _______________________
Signature(s) __________________Signature(s)___________________Date______, 1997
