<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
INDEPENDENT BANK CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
INDEPENDENT BANK CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
------------------------------------------------------------------------
(3) Filing party:
------------------------------------------------------------------------
(4) Date filed:
------------------------------------------------------------------------
<PAGE> 2
===============================================================================
[INDEPENDENT BANK CORPORATION LOGO]
March 17, 1995
Dear Shareholder:
Your Board of Directors invites you to attend the 1995 Annual
Meeting of Shareholders. This year's meeting will be held on Tuesday, April
18, 1995, at 3:00 p.m. at the Ionia Theater, 205 West Main Street, Ionia,
Michigan 48846.
Please read carefully the accompanying Notice of Annual Meeting and
Proxy Statement for information pertaining to the matters to be considered and
acted upon at the Annual Meeting.
It is important that your shares are represented. Whether or not you
expect to attend the Annual Meeting, your Board of Directors recommends that
you promptly sign, date and mail the enclosed Proxy.
Sincerely,
/s/ Charles Van Loan
Charles C. Van Loan
President and
Chief Executive Officer
===============================================================================
<PAGE> 3
INDEPENDENT BANK CORPORATION
230 West Main Street
Ionia, Michigan 48846
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 18, 1995
The Annual Meeting of Shareholders of Independent Bank Corporation will
be held at the Ionia Theater, 205 West Main Street, on Tuesday, April 18, 1995,
at 3:00 p.m. (local time), for the following purposes:
1. To elect two Directors to the Board of Directors to serve three-year
terms expiring in 1998.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record as shown by the transfer books of the Company at
the close of business on February 17, 1995, are entitled to notice of and to
vote at the meeting or any adjournment thereof. Whether or not you expect to be
present in person at this meeting, please sign the enclosed proxy and return
it promptly in the enclosed envelope. If you attend the meeting and wish to
vote in person, you may do so even though you have submitted a proxy.
By order of the Board of Directors,
/s/ William R. Kohls
William R. Kohls
Secretary
Dated: March 17, 1995
1
<PAGE> 4
INDEPENDENT BANK CORPORATION
230 West Main Street
Ionia, Michigan 48846
PROXY STATEMENT
March 17, 1995
This Proxy Statement is furnished in connection with the solicitation,
beginning approximately March 17, 1995, by the Board of Directors of
Independent Bank Corporation (the "Company"), of proxies for use at the Annual
Meeting of Shareholders. This meeting will be held on Tuesday, April 18, 1995,
at 3:00 p.m. at the Ionia Theater, 205 West Main Street, Ionia, Michigan 48846.
If the form of the Proxy accompanying this Proxy Statement is properly
executed and returned, the shares represented by the Proxy will be voted at
the Annual Meeting of Shareholders in accordance with the directions given in
such Proxy. If no choice is specified, the shares represented by the Proxy
will be voted for the election of directors listed as nominees.
A Proxy may be revoked prior to its exercise by delivering a written
notice of revocation to the Secretary of the Company, executing a subsequent
Proxy or attending the meeting and voting in person. Attendance at the meeting
does not, however, automatically serve to revoke a Proxy.
VOTING SECURITIES AND RECORD DATE
As of February 17, 1995, the record date for the Annual Meeting, the
Company had issued and outstanding 2,598,843 shares of common stock, par value
$1.00 per share ("Common Stock"). Shareholders are entitled to one vote for
each share of Common Stock registered in their names at the close of business
on the record date. Votes cast at the meeting and submitted by proxy are
counted by the inspectors of the meeting, who are appointed by the Company.
As of February 17, 1995, no person was known by Management to be the
beneficial owner of more than 5% of the Company's Common Stock, except as
follows:
<TABLE>
<CAPTION>
Amount and
Nature of Approximate
Name and Address of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class
- -------------- ---------------- --------- --------
<S> <C> <C> <C>
Common Stock, Independent Bank Corporation 133,908 5.15%
$1 Par value Employee Stock Ownership
Trust, 230 West Main Street
Ionia, Michigan 48846
</TABLE>
The Employee Stock Ownership Trust ("ESOT") holds shares of the Common
Stock pursuant to the terms of the Company's Employee Stock Ownership Plan
("ESOP"). The trustees of the ESOT are Robert J. Leppink, William R. Kohls,
Charles A. Palmer and Charles C. Van Loan, all directors or officers of the
Company. The trustees share investment power with respect to the shares and, to
the extent that participants in the ESOP do not direct the trustees as to the
manner in which shares allocated to their account are to be voted, the trustees
also share voting power with respect to such shares.
Except for shares allocated to the accounts of Mr. Van Loan and Mr.
Kohls as participants in the ESOT, each of the trustees disclaims any beneficial
ownership of the shares held by the ESOT. However, under disclosure rules of the
Securities and Exchange Commission, each may be deemed to be a beneficial owner
of all of such shares.
2
<PAGE> 5
ELECTION OF DIRECTORS
The Bylaws of the Company permit the Board of Directors to establish
the size of the Board from three to fifteen members. The present Board has
fixed the size of the Board at seven members. All directorships possible under
the Company's Bylaws are not being filled because the Board believes that under
present circumstances, a Board of seven persons is adequate to manage the
affairs of the Company.
The Company's Articles of Incorporation provide that the Board be
divided into three classes of nearly equal size, with the classes to hold
office for staggered terms of three years each. Charles A. Palmer and Charles
C. Van Loan, each of whom are incumbent directors, are nominees for reelection
to serve three-year terms expiring in 1998.
The Proxies cannot be voted for a greater number of persons than the
number of nominees named. In the event that any nominee is unable to serve,
which is not now contemplated, the Board may designate a substitute nominee.
The proxy holders, to the extent they have been granted authority to vote in
the election of directors, may or may not vote for a substitute nominee.
In addition to the nominees for director, each director whose term will
continue after the meeting is named on the following page. Each nominee and
director owned beneficially, directly or indirectly, the number of shares of
Common Stock set forth opposite their respective names. The stock ownership
information and the following information relating to each nominee's and
director's age, principal occupation or employment for the past five years has
been furnished to the Company as of February 17, 1995, by the respective
nominees and directors.
A plurality of the votes cast at the Annual Meeting of Shareholders is
required to elect the nominees as directors. Accordingly, at this year's
meeting, the two individuals who receive the largest number of votes cast at
the meeting will be elected as directors. Shares not voted at the meeting,
whether by abstention, broker nonvote or otherwise, will not be treated as
votes cast at the meeting. The Board of Directors recommends a vote FOR the
election of all the persons nominated by the Board.
3
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
OWNERSHIP(1) OUTSTANDING
------------- -----------
<S> <C> <C>
NOMINEES FOR TERMS TO EXPIRE IN 1998
Charles A. Palmer (age 50) 14,458 (2) .56%
Mr. Palmer is an attorney and
a professor of law at Cooley School
of Law. He became a Director
in 1991.
Charles C. Van Loan (age 47) 32,658 (2)(3) 1.26
Mr. Van Loan is the President and Chief
Executive Officer of Independent Bank
Corporation. He became a Director
in 1992.
DIRECTORS WHOSE TERMS EXPIRE IN 1996
William F. Ehinger (age 68) 37,124 1.43
Mr. Ehinger is the President of Grabill
Kitchens and Interiors (manufacturer's
representative). He became a Director
in 1989.
Charles E. Lippert (age 54) 12,542 .48
Mr. Lippert is President and Chairman of
C. E. Lippert Furniture, Inc. (furniture
manufacturer). Mr. Lippert became a
Director in 1984.
NOMINEES WHOSE TERMS EXPIRE IN 1997
Robert J. Leppink (age 62) 14,779 (2)(4) .57
Mr. Leppink is the President of
Leppink's, Inc. (retail grocer).
He became a Director in 1980.
Rex P. O'Connor (age 68) 15,933 (5) .61
Mr. O'Connor is an attorney and has been
a Director since 1974.
Arch V. Wright, Jr. (age 62) 14,763 .57
Mr. Wright is the President of Charlevoix
Development Company (real estate development).
He became a Director in 1974.
</TABLE>
(1) Except as described in the following notes, each nominee owns the shares
directly and has sole voting and investment power or shares voting and
investment power with his spouse under joint ownership. Includes, for
each director, 2,000 shares of Common Stock with respect to which each
director has the right to acquire beneficial ownership under options
exercisable within 60 days.
(2) Excludes 133,908 shares of Common Stock owned by the ESOT with respect to
which such persons, as trustees, share voting and investment power.
(3) Includes 4,273 shares of Common Stock allocated to Mr. Van Loan's account
under the ESOT.
(4) Includes 12,779 shares of Common Stock, which are held by a corporation as
to which Mr. Leppink shares voting and investment power.
(5) Includes 4,620 shares of Common Stock owned by members of Mr. O'Connor's
family with respect to which Mr. O'Connor disclaims beneficial ownership.
4
<PAGE> 7
There are no family relationships between or among the directors,
nominees or executive officers of the Company. The Board of Directors had 12
meetings in 1994. During 1994, all directors attended at least 75% of the
aggregate number of meetings of the Board and the Board committees on which
they served. In addition to the audit and personnel committees, the Board has a
nominating and acquisition committee.
The audit committee (consisting of directors Ehinger, Lippert, O'Connor
and Palmer) met twice in 1994 to transact the following business: the selection
of and discussion of financial matters with the independent public accountants;
the review of internal audit reports and Management's responses thereto; and
the review and discussion of other pertinent financial, accounting, audit, and
policy matters with Management.
The personnel committee (consisting of directors Ehinger, Leppink,
Palmer and Wright) which met twice in 1994, reviewed and made recommendations
to the Board concerning remuneration, including benefit plans, to be paid to
the Company's directors and officers.
The nominating and acquisitions committee (consisting of directors
Leppink, Lippert, O'Connor and Wright) met once in 1994 to consider and approve
candidates to serve as directors of the Company's subsidiary banks. Although
Management's nominees to serve as directors of the Company have been selected
from individuals serving as directors of the subsidiary banks, the committee
will consider qualified individuals who are recommended by shareholders.
Written recommendations of individuals for Board nomination may be forwarded to
the Company's secretary and must be received on or before December 20, 1995,
for consideration as nominees at the 1996 Annual Meeting of Shareholders.
Directors of the Company who are not employees of the Company or any of
its subsidiaries receive an annual retainer of $5,000 and are paid $500 for
each regular monthly Board meeting of the Company held during the year;
however, no director is paid for any regular meeting from which he is absent
after he has missed two regular Board meetings during the year. Directors are
not compensated for committee meetings. Pursuant to the Non-Employee Director
Stock Option Plan, each of the directors (except Mr. Van Loan) is granted an
option to purchase 1,000 shares of Common Stock at its then current market
value on the last business day of April of each year during the term of the
plan.
Two of the Company's directors participate in a deferred compensation
plan in lieu of current payment of director fees. The plan was adopted by the
Company in 1985 and provides for retirement and death benefits to be paid to
the participating directors by the Company over a minimum of fifteen years. The
Company is the owner and beneficiary of life insurance policies which are
structured to fund the Company's obligations under the terms of the plan.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Common Stock (based on the
last reported sales price of the respective year) with the cumulative total
return of the Nasdaq Stock Market Index (United States stocks, only) and the
Nasdaq Bank Stocks Index for the five-year period ended December 31, 1994. The
following information is based on an investment of $100 on January 1, 1990, in
the Common Stock, the Nasdaq Stock Market Index and the Nasdaq Bank Stocks
Index, with dividends reinvested.
TOTAL SHAREHOLDER RETURN
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Independent Bank Corporation $100.00 $86.15 $151.70 $266.04 $288.59 $355.31
Nasdaq Stock Market 100.00 84.92 136.28 158.58 180.93 176.91
Nasdaq Bank Stocks 100.00 73.23 120.17 174.87 199.33 198.69
</TABLE>
5
<PAGE> 8
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Company's ability to create shareholder wealth is predicated on its
ability to attract and retain qualified executives and senior managers. The
Board of Directors, therefore, believes that the Company's compensation
policies and practices must:
Provide incentives and rewards for superior performance;
Align the interests of its executive officers and senior managers with
the interests of its shareholders, and;
Provide executive officers and senior managers with the opportunity to
accumulate wealth that is commensurate with increases in the value of the
Company's Common Stock.
COMPENSATION STRATEGY
Consistent with these objectives and based on a compensation review by
nationally recognized compensation consultants, the Board of Directors adopted
a "pay-for-performance" compensation strategy in 1991. The strategy seeks to
maintain an optimum balance among three principal components of total
compensation, as follows:
BASE SALARY--Excluding consideration of other relevant factors, which
may include individual performance, experience, expertise and tenure, the
Board intends to maintain the base salaries of the Company's executive officers
and senior managers at approximately 95% of peer level.
Annually, the Personnel Committee (the "Committee") recommends a base
salary for the President and Chief Executive Officer for consideration by the
entire Board of Directors. The Committee's recommendation is based upon
compensation levels established by the Company's peers and the Committee's
evaluation of the relevant factors that are described above.
The base salaries of the Presidents of the Company's subsidiary banks
(the "Banks") are determined in a similar manner by the Company's President and
Chief Executive Officer and the Banks' respective board of directors. The base
salaries of other executive officers are established by the Company's President
and Chief Executive Officer.
ANNUAL CASH INCENTIVE--To provide performance incentives and to
compensate for the below-peer base salary, the strategy provides for annual
cash awards that are payable if the Company and the Banks meet or exceed
annual performance objectives established by the Board of Directors. Assuming
"target performance" is achieved under the Management Incentive Compensation
Plan described below, the Board intends that total annual cash compensation
(the aggregate of base salary and annual cash incentive) will equal
approximately 105% of peer level.
LONG-TERM INCENTIVES--To align the interests of its executive officers
and senior managers with the Company's shareholders, the Board's compensation
strategy provides for equity-based compensation plans under the Incentive
Share Grant Plan and Employee Stock Option Plan described below. Each of the
Company's compensation plans has been adopted by the Board of Directors, and
the equity-based compensation plans have been approved by the Company's
shareholders. Such plans are, however, administered by the Committee. The
Committee consists of Directors Ehinger, Leppink, Palmer and Wright, each of
whom is a non-employee Director of the Company.
COMPENSATION PLANS
The MANAGEMENT INCENTIVE COMPENSATION PLAN establishes three
performance levels for the Company and the Banks: threshold, target and
maximum. The Board's compensation strategy defines these performance levels as
follows.
Threshold represents the performance level which must be achieved
before any incentive awards are granted.
Target performance is defined as the desired level of performance in
view of all relevant factors, as discussed below.
6
<PAGE> 9
Maximum represents that which clearly reflects outstanding performance.
The principal factors considered by the Board in determination of these
performance levels include peer performance and investment community
expectations for return on equity and earnings per common share for the
Company, as well as similar expectations for its competitors in the financial
services industry. Corresponding performance levels are established for each of
the Banks.
In addition to the objective earnings goals for the Company and the
Banks, cash payments pursuant to this plan are also made in consideration of
pre-determined individual goals, which relate to that executive officer's
responsibilities. Such individual goals may be objective or subjective in
nature. The individual performance component is, however, limited to 20% of the
total incentive formula for the Company's executive officers and the Bank
Presidents.
For the Chief Executive Officer, cash payments made pursuant to this
plan may range from 20% to 50% of base salary. For other executive officers and
the Bank Presidents, such cash payments may range from 15% to 35% of their base
salary. For the year ended December 31, 1994, the Company attained record
earnings and the Company's executive officers and the Bank Presidents received
cash awards that ranged from 21.1% to 38.0% of their respective base salaries.
In 1988, the Company's shareholders approved the INCENTIVE SHARE GRANT
PLAN that provides a long-term incentive to manage the Company's affairs in the
best interest of its shareholders. Participation in this plan is limited to the
Company's executive officers and the Bank Presidents. The plan provides that
the Committee, in its sole discretion, may grant to the participants, shares of
Common Stock in lieu of the cash incentives payable pursuant to the Management
Incentive Compensation Plan. The market value of such incentive shares at the
date of the grant must equal twice the amount of the cash incentive otherwise
payable. For the year ended December 31, 1994, the Committee granted the
executive officers 14,680 shares of Common Stock under the terms of this plan.
Shares issued pursuant to the plan are subject to restrictions as to
transferability and risks of forfeiture. Such restrictions and risks lapse in
respect to 20% of the shares on the date of grant and 20% on each of the
succeeding anniversaries of the grant. Because the executives' interest in the
stock vests over time, the plan provides incentives for these individuals to
remain in the Company's employ and to manage the affairs of the Company in the
best interests of the shareholders.
THE EMPLOYEE STOCK OPTION PLAN is intended to provide the Company's
executive officers and senior managers with additional long-term incentives to
manage the affairs of the Company in the best interests of its shareholders.
On May 17, 1994, the Board of Directors granted options to purchase 15,000
shares of Common Stock to the executive officers and senior managers of the
Company and the Banks. Each of the options provides the recipient the right to
purchase 1,000 shares of Common Stock at $20.00 per share, the market price of
the Common Stock as of the date of the grant. Such options are restricted as to
transferability and expire 5 years after the date of grant.
CHIEF EXECUTIVE OFFICER COMPENSATION
Charles C. Van Loan was appointed as the Company's Chief Executive
Officer on December 16, 1992. Prior to that time, Mr. Van Loan served as the
President and Chief Operating Officer of the Company and as the President and
Chief Executive Officer of Independent Bank.
Consistent with the Company's existing policies and practices, the
Committee reviewed available compensation data from the Company's peers and
evaluated Mr. Van Loan's contributions to the Company's success as well as his
experience and expertise. On the basis of its evaluation, the Committee
recommended for consideration by the full Board of Directors a base salary of
$145,000. As a result of the Company's record earnings, relative to the goals
established pursuant to the Management Incentive Compensation Plan, Mr. Van
Loan's cash incentive for 1994 totalled $55,107.
WILLIAM F. EHINGER CHARLES A. PALMER
ROBERT J. LEPPINK ARCH V. WRIGHT, JR.
7
<PAGE> 10
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the
Company's Common Stock by each executive of the Company or the Banks whose
annual compensation exceeded $100,000 ("Named Executives") and by all directors
and executive officers as a group as of February 17, 1995.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP (1) OUTSTANDING
- ---- ----------- -------------
<S> <C> <C>
Charles C. Van Loan 32,658 (2) 1.26%
Jeffrey A. Bratsburg 23,482 (3) .90
Edward B. Swanson 11,871 .46
Michael M. Magee 7,608 .29
All executive officers and directors 324,689 (4) 12.49
as a group (consisting of 12 persons)
</TABLE>
(1) In addition to shares held directly or under joint ownership with their
spouse, beneficial ownership includes shares of Common Stock that are
issuable under options exercisable within 60 days, shares that are
restricted and subject to forfeiture pursuant to the Incentive Share
Grant Plan and shares that are allocated to their accounts as participants
in the ESOP.
(2) Excludes 129,635 shares of Common Stock owned by the ESOT with respect to
which Mr. Van Loan, as a trustee, shares voting and investment power.
(3) Includes 4,256 shares of Common Stock held by Mr. Bratsburg's wife with
respect to which Mr. Bratsburg disclaims beneficial ownership.
(4) Includes shares held by the ESOT. Beneficial ownership is disclaimed as to
128,610 shares of Common Stock, including 119,734 shares which are held by
the ESOT.
SUMMARY COMPENSATION TABLE
The following table sets forth compensation received by the Named
Executives for each of the three years ended December 31, 1994.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-------------------
ALL
ANNUAL COMPENSATION RESTRICTED SECURITIES OTHER
-------------------- STOCK UNDERLYING COMPEN-
NAME & PRINCIPAL POSITION YEAR SALARY(1) BONUS AWARDS(2) OPTIONS(#) SATION(3)
------------------------- ---- --------- ----- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Van Loan, 1994 $145,000 $ 0 $110,214 1,000 $10,150
President and Chief 1993 130,000 0 121,402 1,000 11,700
Executive Officer 1992 110,000 0 77,000 1,000 9,900
Jeffrey A. Bratsburg, 1994 $105,000 $ 0 $65,104 1,000 $7,350
President and CEO of 1993 100,000 0 68,346 1,000 9,000
Independent Bank West Michigan 1992 95,400 0 66,780 1,000 8,586
Edward B. Swanson, 1994 $105,000 $ 0 $44,350 1,000 $7,350
President and CEO of 1993 100,000 0 60,766 1,000 9,000
Independent Bank South Michigan 1992 95,000 0 66,500 1,000 8,550
Michael M. Magee 1994 $92,000 $ 0 $57,044 1,000 $6,440
President and CEO of 1993 73,200 0 50,576 1,000 6,588
Independent Bank 1992 63,600 15,900 1,000 5,724
</TABLE>
(1) Includes elective deferrals by employees pursuant to Section 401(k)
of the Internal Revenue Code.
(2) Amounts represent the aggregate value of restricted shares of Common
Stock (based on the closing price of the stock on the date of grant) issued
to the Named Executives for the designated year under the Company's
Incentive Share Grant Plan. The 1994 award of restricted shares was based on
the closing price of
8
<PAGE> 11
$23.75 per share on January 17, 1995. The Plan provides that the
Personnel Committee may, at its sole discretion, grant shares of restricted
stock in lieu of cash bonuses payable under the Company's Management
Incentive Compensation Plan. The aggregate fair market value of the shares
granted to each participant must equal twice the value of the bonus
otherwise payable in cash. The shares are subject to restrictions on
transfer and conditions of forfeiture which lapse over a period of five
years at an annual rate of 20% of the granted shares, subject to earlier
termination of those restrictions and conditions upon retirement, death,
disability, or a change in control of the Company. The Named Executives
have no right to such restricted shares, except voting rights and the
right to all dividends or other distributions paid to holders of the Common
Stock.
As of December 31, 1994, the Named Executives held shares of restricted
stock in the following aggregate amounts and values (based on the closing
price of the Company's Common Stock on December 31,1994, which equaled
$23.75): Mr. Van Loan - 9,760 shares ($231,800); Mr. Bratsburg - 6,782
shares ($161,073); Mr. Swanson - 5,752 shares ($136,610); and Mr. Magee -
2,023 shares ($48,046).
(3) Amounts represent Company contributions to the Employee Deferred
Compensation Plan [401(k)] and Employee Stock Ownership Plan. Subject to
certain age and service requirements, all employees of the Company and its
subsidiaries are eligible to participate in these plans.
OPTION GRANTS IN 1994
- -------------------------------------------------------------------------------
The following table provides information on options granted to the
Named Executives during the year ended December 31, 1994.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
NUMBER OF PERCENT OF TOTAL EXERCISE OR GRANT DATE
SECURITIES UNDERLYING OPTIONS GRANTED TO BASE PRICE EXPIRATION PRESENT
NAME OPTIONS GRANTED (1) EMPLOYEES IN 1994 (PER SHARE) (2) DATE VALUE (3)
- ---- ------------------- ----------------- --------------- ---- ---------
<S> <C> <C> <C> <C> <C>
Charles C. Van Loan 1,000 6.67% $20.00 5/17/99 $3,840
Jeffrey A. Bratsburg 1,000 6.67 20.00 5/17/99 3,840
Edward B. Swanson 1,000 6.67 20.00 5/17/99 3,840
Michael M. Magee 1,000 6.67 20.00 5/17/99 3,840
</TABLE>
(1) Indicates number of shares which may be purchased pursuant to
options granted under the Company's Employee Stock Option Plan on May 17,
1994. Options may not be exercised in full or in part prior to the
expiration of one year from the date of grant. Each option contains a
limited stock appreciation right which becomes exercisable: (1) if any
person acquires 25% or more of the Company's outstanding Common Stock; (2)
prior to a merger or consolidation in which the Company will not survive; or
(3) upon the sale of substantially all of the Company's assets. The limited
stock appreciation right entitles recipients to surrender all or part of
their options in exchange for cash, Company shares or both cash and shares,
in an amount equal to the excess of the prevailing per share market value of
the Company's Common Stock over the option price.
(2) The exercise price equals the prevailing market price of the
Company's Common stock on the date of grant. The exercise price may be paid
in cash, by the delivery of previously owned shares, or a combination
thereof.
(3) The values reflect application of the Black-Scholes option pricing model.
The assumptions employed were expected volatility of .19822, risk-free
rate of return of 7.04%, dividend yield of 4.0% and time to exercise of five
years.
AGGREGATED STOCK OPTION EXERCISES IN 1994
AND YEAR END OPTION VALUES
The following table provides information on the value of unexercised
options held by the Named Executives at December 31, 1994. Options were first
granted to employees in 1992, following the adoption of the Employee Stock
Option Plan at the Company's 1992 Annual Meeting of Shareholders. Options
representating 1,000 shares of Common Stock were exercised in 1994.
9
<PAGE> 12
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS (1) SHARES
------------------- ------------------------ ACQUIRED VALUE
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ON EXERCISE REALIZED
- ---- ----------- ------------- ----------- ------------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Van Loan 2,000 1,000 $11,750 $3,750 0 $0
Jeffrey A. Bratsburg 2,000 1,000 11,750 3,750 0 0
Edward B. Swanson 2,000 1,000 11,750 3,750 0 0
Michael M. Magee 1,000 1,000 3,750 3,750 1,000 8,500
</TABLE>
(1) Values are based on the difference between the closing price of
the Company's Common Stock on December 31, 1994 ($23.75) and the exercise
prices of the options.
TRANSACTIONS INVOLVING MANAGEMENT
Directors and officers of the Company and their associates were
customers of, and had transactions with, subsidiaries of the Company in the
ordinary course of business during 1994. All loans and commitments included in
such transactions were made in the ordinary course of business on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and do not involve an
unusual risk of collectibility or present other unfavorable features. Such loans
totaled $5,322,000 at December 31, 1994, equal to 13.20% of shareholders'
equity.
Pursuant to Section 16 of the Securities Exchange Act of 1934, the
Company's directors and executive officers, as well as any person holding more
than 10% of its Common Stock, are required to report initial statements of
ownership of the Company's securities and changes in such ownership of the
Securities and Exchange Commission. To the Company's knowledge, all of the
required reports were filed by such persons during 1994, except that one report
of change in beneficial ownership, covering one transaction, was filed late by
Mr. Swanson.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG Peat Marwick will be present at the Annual
Meeting and will have the opportunity to make a statement if desired and will be
available to respond to appropriate questions. The Board of Directors has not
yet selected independent accountants for 1995. It is expected that independent
accountants for the current year will be selected within the next two months.
SHAREHOLDER PROPOSALS
Article IX of the Company's Articles of Incorporation contains certain
procedural requirements applicable for shareholder nominations of persons to be
elected as directors of the Company. A copy of the Company's Articles of
Incorporation has been filed with the Securities and Exchange Commission and can
be obtained from its Public Reference Section or the Company. Any other
shareholder proposal to be considered by the Company for inclusion in the 1996
Annual Meeting of Shareholders proxy material must be received by the Company
not later than December 20, 1995.
GENERAL
The cost of soliciting proxies will be borne by the Company. In addition
to solicitation by mail, the officers and employees of the Company and its
subsidiaries may solicit proxies by telephone, telegraph or in person. The
Company has retained the services of Corporate Investor Communications, Inc. to
deliver proxy materials to brokers, nominees, fiduciaries and other custodians
for distribution to beneficial owners, as well as solicitation of proxies from
these institutions. The cost of the solicitation is expected to total
approximately $4,000, plus reasonable out of pocket expenses.
As of the date of this proxy statement, Management knows of no other
matters to be brought before the meeting. However, if further business is
presented by others, the proxy holders will act in accordance with their best
judgment.
By order of the Board of Directors,
/s/ William R. Kohls
William R. Kohls
Secretary
Dated: March 17, 1995
10
<PAGE> 13
INDEPENDENT BANK CORPORATION
230 West Main Street, Ionia, Michigan
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS TO BE HELD APRIL 18, 1995
The undersigned hereby appoints Charles E. Lippert and Rex P. O'Connor, and
each of them, Proxies, with power of substitution, to vote the shares of common
stock of Independent Bank Corporation, which the undersigned is entitled to
vote at the Annual Meeting of Shareholders to be held at the Ionia Theater,
located at 205 West Main Street, Ionia, Michigan 48846 on Tuesday, April 18,
1995, at 3:00 o'clock P.M. (local time), and at all adjournments thereof as
directed on the reverse side.
PLEASE VOTE AND SIGN ON REVERSE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this Proxy exactly as your name appears hereon. Joint owners
should each sign personally. Trustees and other fiduciaries should indicate
the capacity in which they sign. If a corporation, this signature should be
that of an authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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<S> <C> <C> <C> <C> <C> <C> <C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
1.) In the election of Directors for For hold Except 2.) In their discretion on any other business
terms expiring in 1998. / / / / / / that may properly come before the meeting.
Charles C. Van Loan and Charles A. Palmer
If you do not wish to vote "FOR" a particular nominee, mark
the "For All Except" box and strike a line through the
nominee(s) name. Your shares will be voted for the remaining
nominee.
RECORD DATE SHARES:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED
SHAREHOLDERS. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED
"FOR" THE NOMINEES LISTED ABOVE.
Please be sure to sign and date this Proxy. Date Mark box at right if comments or address changes
have been noted on the reverse side. / /
Shareholder sign here Co-owner sign here
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DETACH CARD DETACH CARD
INDEPENDENT BANK CORPORATION
Dear Shareholder:
Please take note of the important information enclosed with this Proxy. Your vote counts, and you are strongly encouraged
to exercise your right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be voted. Then sign the card, detach it and
return your proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Shareholders to be held April 18, 1995.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
INDEPENDENT BANK CORPORATION
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