<PAGE> 1
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 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Independent Bank Corporation
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[INDEPENDENT BANK CORPORATION LOGO]
March , 2000
Dear Shareholder:
We invite you to attend the 2000 Annual Meeting of Shareholders. This year's
meeting will be held on Tuesday, April 18, 2000, at 3:00 p.m. at the Ionia
Theater, 205 West Main Street, Ionia, Michigan 48846.
Many of the traditional elements of our annual report, including our audited
financial statements, can be found in an appendix to this Proxy Statement. For
your convenient reference, a table of contents is located on page A-1.
It is important that your shares are represented at the Annual Meeting.
Please carefully read the Notice of Annual Meeting and Proxy Statement. Whether
or not you expect to attend the Annual Meeting, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED AT YOUR EARLIEST CONVENIENCE OR REGISTER
YOUR VOTE BY PHONE OR THE INTERNET.
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, 2000
The Annual Meeting of Shareholders of Independent Bank Corporation will be
held at the Ionia Theater, 205 West Main Street, Ionia, Michigan 48846, on
Tuesday, April 18, 2000, at 3:00 p.m. (local time) for the following purposes:
1. To elect one Nominee to the Board of Directors to serve a one-year
term expiring in 2001.
2. To elect three Nominees to the Board of Directors to serve three-year
terms expiring in 2003.
3. To consider and vote upon a proposal to amend the Company's Articles
of Incorporation to increase the authorized shares of common stock
from 14 million shares to 30 million shares.
4. To consider and vote upon a proposal to amend the Company's Articles
of Incorporation and eliminate the requirement that certain business
combinations be approved by 75% of the Company's outstanding shares of
common stock.
5. To consider and vote upon a proposal to make an additional 516,000
shares of the Company's common stock available for issuance under the
Employee Stock Option Plan.
6. 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 18, 2000, 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 or register your vote by phone or the internet. 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 , 2000
<PAGE> 4
INDEPENDENT BANK CORPORATION
230 West Main Street
Ionia, Michigan 48846
PROXY STATEMENT
March , 2000
This Proxy Statement is furnished in connection with the solicitation,
beginning approximately March , 2000, 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, 2000, 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 and for the proposals to
amend the Company's Articles of Incorporation and to reserve additional shares
for issuance under its Employee Stock Option Plan.
To vote by telephone, call toll-free on a touch-tone phone 1-877-PRX-VOTE
(1-877-779-8683 (there is no charge for this call)). For shareowners residing
outside the United States call collect on a touch-tone phone 1-201-536-8073;
enter the control number located on your proxy card and follow the recorded
instructions.
To vote by internet, go to the site http://www.eproxyvote.com/ibcp; enter
the control number located on your proxy card and follow the instructions
provided.
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 18, 2000, the record date for the Annual Meeting, the
Company had issued and outstanding 11,214,963 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 18, 2000, no person was known by Management to be the
beneficial owner of more than 5% of the 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 715,402 (1) 6.24%
$1 par value Employee Stock Ownership
Trust, 230 West Main Street
Ionia, Michigan 48846
</TABLE>
(1)Includes 255,835 shares of Common Stock held by the employee stock
ownership plan that was maintained by the former Mutual Savings Bank, f.s.b.
Upon receipt of a favorable determination by the Internal Revenue Service,
that plan will merge into the ESOP.
1
<PAGE> 5
The Employee Stock Ownership Trust ("ESOT") holds shares of Common Stock
pursuant to the terms of the Company's Employee Stock Ownership Plan ("ESOP").
Firstar Trust Company administers the ESOP and serves as directed trustee. The
Company's ESOP Administrative Committee has investment power with respect to the
shares of Common Stock held by the ESOT and has voting power to the extent that
the ESOP participants do not direct the voting of the shares of Common Stock
allocated to their accounts.
The Administrative Committee is comprised of William R. Kohls, James J.
Twarozynski and Laurinda M. Neve, each of whom are officers of the Company.
Except for the shares of Common Stock allocated to their account as participants
in the ESOP, each member of the Administrative Committee disclaims beneficial
ownership of the shares held by the ESOP.
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 current Board has fixed the
size of the Board at nine members. All directorships possible under the
Company's Bylaws are not being filled because the Board believes that under the
present circumstances, a Board of nine 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. In order to maintain each of the three
classes of the Board at nearly equal size, Jeffery A. Bratsburg is a nominee for
election to a one-year term expiring in 2001. Robert J. Leppink, Arch V. Wright,
Jr., and Robert L. Hetzler are nominees for election to serve three-year terms
expiring in 2003.
Mr. Bratsburg is the Chairman of the Board of Independent Bank West
Michigan and was appointed to the Company's Board in January, 2000. Mr. Hetzler
serves as a Director of Independent Bank MSB and has been nominated to stand for
election to the Company's Board. Mr. Leppink and Mr. Wright are incumbent
directors. Additional information on the nominees is set forth in the following
pages of this Proxy Statement.
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 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 18, 2000, 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 four 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 the persons nominated by the Board.
2
<PAGE> 6
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent of
Ownership (1) Outstanding
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NOMINEE FOR ONE-YEAR TERM EXPIRING IN 2001
Jeffrey A. Bratsburg (age 56) 91,466 (2) .80%
Mr. Bratsburg served as President and Chief Executive
Officer of Independent Bank West Michigan from 1985 until
his retirement in 1999. He became a Director in 2000.
NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 2003
Robert J. Leppink (age 67) 47,814 .42
Mr. Leppink is the President of Leppink's, Inc.
(retail grocer). He became a Director in 1980.
Arch V. Wright, Jr. (age 67) 52,923 .46
Mr. Wright is the President of Charlevoix Development Company
(real estate development). He became a Director in 1974.
Robert L. Hetzler (age 55)
Mr. Hetzler is the President of Monitor Sugar Company 6,720 .06
(food processor). He became a Director in 2000.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
Charles A. Palmer (age 55) 40,994 .36
Mr. Palmer is an attorney and a professor of law at Thomas M. Cooley
Law School. He became a Director in 1991.
Charles C. Van Loan (age 52) 114,918 (3) 1.01
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 2002
Keith E. Bazaire (age 61) 14,325 .13
Mr. Bazaire is the President of Carter's Food Center, Inc.
(retail grocer). He became a Director in 1996.
Terry L. Haske (age 51) 17,451 (4) .15
Mr. Haske is the President of Ricker & Haske, CPAs, p.c.
He became a Director in 1996.
Thomas F. Kohn (age 67) 19,949 .17
Mr. Kohn is the Chief Executive Officer of Belco Industries, Inc.
(manufacturer). He became a Director in 1995.
</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 shares of
common stock that are issuable under options exercisable within 60 days.
(2)Includes 13,578 shares allocated to Mr. Bratsburg's account under the ESOT.
Also includes 23,153 shares held by Mr. Bratsburg's wife.
(3)Includes 17,935 shares allocated to Mr. Van Loan's account under the ESOT.
Also includes 8,732 shares held by Mr. Van Loan's dependent children.
(4)Includes 2,411 shares owned jointly with Mr. Haske's father with respect to
which Mr. Haske shares voting and investment power.
3
<PAGE> 7
There are no family relationships between or among the directors, nominees or
executive officers of the Company. The Board of Directors had seven meetings in
1999. During 1999, 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 corporate
development committee.
The audit committee (consisting of directors Haske, Kohn and Palmer) met
twice in 1999 to select independent public accountants and discuss financial
matters with such independent accountants; review internal audit and loan review
reports as well as Management's responses thereto; and review and discuss other
pertinent financial, accounting, audit, and policy matters with Management.
The personnel committee (consisting of directors Bazaire, Haske, Leppink,
Palmer and Wright) met once in 1999 to review and make recommendations to the
Board relating to remuneration, including benefit plans, to be paid to the
Company's directors and officers.
The corporate development committee (consisting of directors Bazaire, Kohn
and Leppink) met three times in 1999 to consider and approve candidates to serve
as directors of the Company's subsidiary banks (the "Banks"). Although
Management's nominees to serve as directors of the Company have been selected
from individuals serving as directors of the 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 for consideration as nominees at the 2001 Annual Meeting of
Shareholders. Such recommendations must be received no earlier than January 18,
2001, and no later than February 17, 2001.
PROPOSED INCREASE IN AUTHORIZED COMMON STOCK
The Company's Board of Directors has proposed that the first paragraph of
Article III of the Company's Articles of Incorporation (the "Articles") be
amended to read as follows:
The total number of shares of all classes of capital stock which the
Corporation shall have the authority to issue is thirty million two
hundred thousand shares, of which thirty million (30,000,000) shares
shall be common stock of the par value of $1.00 per share, and two
hundred thousand (200,000) shares shall be series preferred stock,
without par value.
This amendment will increase the Company's authorized Common Stock from
14,000,000 shares to 30,000,000 shares of Common Stock, $1.00 par value. The
purpose of the amendment is to provide additional shares of Common Stock for
future issuance. As of February 18, 2000, there were approximately 11,234,000
shares of Common Stock issued and outstanding, 722,000 stock options granted but
not exercised, and 517,000 shares of Common Stock reserved for issuance under
the Company's stock compensation plans and Dividend Reinvestment Plan. As a
result, as of February 18, 2000, only 1,527,000 shares of Common Stock remain
available for future issuance. The Company has no series preferred stock issued
or outstanding. This proposed amendment will not affect those shares.
The Board of Directors believes it desirable to increase the authorized
number of shares of Common Stock in order to provide the Company with adequate
flexibility in corporate planning and strategies. The availability of additional
Common Stock for issuance could be used for a number of purposes, including
corporate financing, acquisitions, stock dividends, stock options, and other
stock-based compensation. There are currently no plans, agreements or
understandings regarding the issuance of any of the additional shares of Common
Stock that would be available if this proposal is approved. Such additional
authorized shares may be issued for such purposes and for such consideration as
the Board of Directors may determine without further shareholder approval,
unless such action is required by applicable law or the rules of the Nasdaq
stock market or any stock exchange on which the Company's securities may be
listed.
The additional shares of Common Stock for which authorization is sought
would be part of the existing class of Common Stock, and, to the extent issued,
would have the same rights and privileges as the shares of Common Stock
presently outstanding. Ownership of shares of the Company's Common Stock confers
no preemptive rights.
The increase in the authorized but unissued shares of Common Stock which
would result from adoption of the proposed amendment could have a potential
anti-takeover effect with respect to the Company, although management is not
presenting the proposal for that reason and does not presently anticipate using
the increased authorized shares for such a purpose. The potential anti-takeover
effect of the proposed amendment arises because it would enable the Company to
issue additional shares of Common Stock up to the total authorized number with
the effect that the shareholdings and related voting rights of then existing
shareholders would be diluted to an extent proportionate to the number of
additional shares issued.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock of the Company is required for approval of the proposed
amendment. Unless otherwise directed by a shareholder's proxy, the persons named
as proxy voters in the accompanying proxy will vote FOR the amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PROPOSED
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
SHARES OF AUTHORIZED COMMON STOCK.
4
<PAGE> 8
PROPOSED DELETION OF ARTICLE VI OF THE ARTICLES OF INCORPORATION
The Company's Board of Directors has proposed that Article VI of the
Company's Articles of Incorporation be deleted in its entirety. Article VI
currently states:
The authorization and approval of any proposed (i) merger or
consolidation of this Corporation as a result of which this Corporation
will not be the surviving Corporation, (ii) sale of all or substantially
all of the assets of this Corporation, (iii) dissolution of this
Corporation, or (iv) amendment to or deletion of this Article VI shall
require the affirmative vote or consent of at least three-fourths (3/4)
of the outstanding stock of this Corporation entitled to vote on any
such merger, consolidation, sale of assets, dissolution or amendment.
Article VI was included in the Company's original Articles of Incorporation,
prior to the adoption of the fair price provisions and shareholder equity
provisions of the Michigan Business Corporation Act ("MBCA"). The fair price
provisions of Chapter 7A of the MBCA provide that except in cases in which
certain minimum price, form of consideration and procedural requirements are
satisfied or for certain transactions that are approved in advance by the
Company's Board of Directors, higher than normal voting requirements are imposed
with respect to various transactions involving persons who own 10 percent or
more of the Company's voting stock (referred to as "Interested Shareholders").
Transactions to which the higher vote requirements apply require an advisory
statement from the Board of Directors and must be approved by not less than 90
percent of the votes of each class of stock entitled to vote and by not less
than two-thirds of the votes, other than the votes of Interested Shareholders
who are (or whose affiliates are) a party to the proposed transaction or an
affiliate of the Interested Shareholders, of each class entitled to vote.
The shareholder equity provisions of Chapter 7B of the MBCA affect the
voting rights of persons who acquire more than 20 percent, 33-1/3 percent, or 50
percent of a Michigan corporation's voting stock (referred to as "Control
Shares"). These provisions deny shareholder voting rights to those persons or
entities who make purchase offers or investors who increase their holdings above
any of these control share levels, unless they are granted voting rights by a
majority vote of all Interested Shareholders (shareholders excluding the bidders
or owners of Control Shares and the corporation's management). If the
shareholders do not elect to grant voting rights to Control Shares, under
certain circumstances, the Control Shares may become subject to redemption.
Due to the protections now provided by the MBCA, the Board of Directors has
determined that the provisions of Article VI are no longer necessary to protect
the interests of the Company's shareholders.
Article VI and Michigan law require the affirmative vote of the holders of
at least 75 percent of the outstanding shares of Common Stock of the Company in
order to approve the proposed amendment. Accordingly, the proposed amendment
would not be approved if the total of (1) shares voted against the proposal, (2)
broker nonvotes, and (3) shares voted as abstentions, exceeds 25 percent of the
shares entitled to vote. Unless otherwise directed by a shareholder's proxy, the
persons named as proxy voters in the accompanying proxy will vote FOR the
amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PROPOSED
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO DELETE ARTICLE VI IN ITS
ENTIRETY.
PROPOSED AMENDMENT TO THE COMPANY'S
EMPLOYEE STOCK OPTION PLAN
GENERAL
In 1992, the Board of Directors adopted and the shareholders approved the
Independent Bank Corporation Employee Stock Option Plan (the "Plan"). The Plan
is intended to encourage stock ownership by selected employees of the Company
and its subsidiaries and to provide them with an additional incentive to
contribute to the success of the Company and to encourage them to remain in the
Company's employ.
The Plan currently provides that options may be granted for the purchase of
up to 584,000 shares of Common Stock. The proposed Amendment would make an
additional 516,000 shares available for issuance under the Plan, bringing the
total shares reserved for issuance to 1,100,000. In the case of stock dividends
or similar transactions, the number of shares available for grant under the Plan
and the number of shares subject to options then outstanding are subject to
adjustment. Effective on September 15, 1999, the Board of Directors adopted the
Amendment, subject to approval by the Company's shareholders.
The following is a summary of the principal features of the Plan. This
summary is qualified in its entirety by reference to the terms of the Plan and
the text of the Amendment set forth in Exhibit A to this Proxy Statement.
5
<PAGE> 9
ELIGIBILITY
Employees of the Company or any subsidiary who are determined
to be key employees are eligible to participate in the Plan.
ADMINISTRATION
The Plan is to be administered by a committee of the Board of Directors (the
"Committee"), which is required to consist of not less than two members of the
Board, each of whom is required to be a "disinterested person" as defined in
Rule 16b-3 of the Securities Exchange Act of 1934. The Committee determines the
employees of the Company who are to be granted options, the number of shares
subject to each option and such other matters as are specified in the Plan.
PRICE AND OTHER TERMS
Under the Plan, options may be granted to purchase shares of Common Stock at
prices equal to the fair market value of the shares on the date of grant. No
employee may be granted options to purchase in excess of 10 percent of the total
number of shares authorized for grant under the Plan. Options are not
exercisable until 12 months after the date of grant and expire not later than
ten years after the date of grant. The option price is payable upon exercise in
cash, in shares of Common Stock already owned by the optionee, or by a
combination of shares and cash. Options may not be transferred by optionees,
except by will or by the laws of descent and distribution, and with respect to
non-qualified stock options to certain permitted transferees, and may be
exercised only while the optionee is employed by the Company or during various
limited periods after death, retirement or other termination of employment.
OPTIONS
The Plan provides for the grant of incentive stock options ("ISOs") as
defined by Section 422A of the Internal Revenue Code (the "Code"), and non-ISOs,
as may be designated by the Committee. ISOs and non-ISOs have similar features;
however, ISOs are subject to certain additional restrictions of the Code and are
entitled to different federal income tax treatment, as described below.
Option grants may also include reload options. A reload option is an option
to purchase shares equal to the number of shares of common stock delivered in
payment of the exercise price (including, at the discretion of the Committee,
the number of shares tendered to the Company to satisfy any withholding tax
liability arising upon exercise), and is automatically granted upon delivery of
the shares without further action by the Committee. A reload option contains the
same terms as the original option, including the exercise period; however, the
exercise price of the reload option must equal the fair market value of the
Common Stock on the date of grant of the reload option.
AMENDMENT AND TERMINATION
The Board of Directors may amend or terminate the Plan with respect to
shares which, at the time, are not subject to option, provided that the Plan
cannot be amended without shareholder approval if the amendment would increase
the maximum number of shares of Common Stock which may be subject to the Plan,
increase the maximum number of shares which may be optioned to any one employee,
change the designation of the class of employees eligible to receive options,
materially increase the benefits accruing to option holders under the Plan,
decrease the price at which options may be granted, remove the administration of
the Plan from the Committee or permit the granting of options under the Plan
after April 21, 2002.
FEDERAL TAX CONSEQUENCES
The following summarizes the consequences of the grant and exercise of
options under the Plan for federal income tax purposes, based on management's
understanding of existing federal income tax laws. This summary is necessarily
general in nature and does not purport to be complete. Also, state and local
income tax consequences are not discussed and may vary from locality to
locality.
Plan participants will not recognize taxable income at the time an option is
granted under the Plan unless the option has a readily ascertainable market
value at the time of grant. Management understands that options to be granted
under the Plan will not have a readily ascertainable market value; therefore,
income will not be recognized by participants before the time of exercise of an
option. For Non-ISOs, the difference between the fair market value of the shares
at the time an option is exercised and the option price generally will be
treated as ordinary income to the optionee, in which case the Company will be
entitled to a deduction equal to the amount of the optionee's ordinary income.
With respect to ISOs, participants will not realize income for federal income
tax purposes as a result of the exercise of such options. In addition, if the
shares acquired as a result of the exercise of an ISO are disposed of more than
two years after the date the option is granted and more than one year after the
date the option was exercised, the entire gain, if any, realized upon
disposition of such Common Stock will be treated as capital gain for federal
income tax purposes. Under these circumstances, no deduction will be allowable
to the Company in connection with either the grant or exercise of an incentive
stock option. Exceptions to the general rules apply in the case of a
"disqualifying disposition."
6
<PAGE> 10
If a participant disposes of shares of common stock acquired pursuant to the
exercise of an ISO before the expiration of one year after the date of exercise
or two years after the date of grant, the sale of such stock will be treated as
a "disqualifying disposition." As a result, such a participant would recognize
ordinary income and the Company would be entitled to a deduction in the year in
which such disposition occurred. The amount of the deduction and the ordinary
income recognized upon a disqualifying disposition would generally be equal to
the lesser of: (a) the sale price of the shares sold minus the option price, or
(b) the fair market value of the shares at the time of exercise minus the option
price. If the disposition is to a related party (such as a spouse, brother,
sister, lineal descendant, or certain trusts for business entities in which the
seller holds a direct or indirect interest), the ordinary income recognized
generally is equal to the excess of the fair market value of the shares at the
time of exercise over the exercise price. Any additional gain recognized upon
disposition, in excess of the ordinary income, will be taxable as capital gain.
In addition, the exercise of ISOs may result in an alternative minimum tax
liability.
REQUIRED VOTE FOR APPROVAL
The affirmative vote of a majority of the Company's outstanding common stock
represented and voted at the annual meeting, by person or by proxy, is required
to approve the adoption of the amendment to the Plan. While broker nonvotes will
not be treated as votes cast on the approval of this Amendment, shares voted as
abstentions will be counted as votes cast. Since a majority of the votes cast is
required for approval, the sum of any negative votes and abstentions will
necessitate offsetting affirmative votes to assure approval. Unless otherwise
directed by marking the accompanying proxy, the proxy holders named therein will
vote for the approval of the adoption of the amendment to the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PROPOSED
AMENDMENT TO THE COMPANY'S EMPLOYEE STOCK OPTION PLAN TO INCREASE THE NUMBER OF
SHARES AVAILABLE FOR ISSUANCE TO 1,100,000 SHARES.
COMPENSATION OF DIRECTORS
Directors of the Company who are not employees of the Company or any of its
subsidiaries ("Non-employee Directors") receive an annual retainer of $10,000.
Each Non-employee Director also serves as a director of a subsidiary of the
Company. Non-employee directors of these subsidiaries receive an annual retainer
of $1,000 and monthly meeting fees of $500. Non-employee Directors of the
Company and its subsidiaries are not compensated for committee meetings.
Pursuant to the Non-employee Director Stock Option Plan, a committee
designated by the Board may grant options to purchase shares of Common Stock to
each Non-employee Director. These options are not exercisable for 12 months and
expire not more than ten years after the date of the grant. During 1999, each
Non-employee Director received an option to purchase 3,906 shares of Common
Stock at $15.95 per share, the fair market value of the Common Stock on the date
of the grant.
The Company maintains a Deferred Compensation and Stock Purchase Plan for
Non-employee Directors (the "Plan"). The Plan provides that Non-employee
Directors of the Company or its subsidiaries may defer payment of all or a part
of their director fees ("Fees") or receive shares of Common Stock in lieu of
cash payment of Fees. Each Non-employee Director may elect to participate in a
Current Stock Purchase Account, a Deferred Cash Investment Account or a Deferred
Stock Account.
A Current Stock Purchase Account is credited with shares of Common Stock
having a fair market value equal to the Fee otherwise payable. A Deferred Cash
Investment Account is credited with an amount equal to the Fee deferred and on
each quarterly credit date with an appreciation factor that may not exceed the
prime rate of interest charged by Independent Bank. A Deferred Stock Account is
credited with the amount of Fees deferred and converted into stock units based
on the fair market value of the Common Stock at the time of the deferral.
Amounts in the Deferred Stock Account are credited with cash dividends and other
distributions on the Common Stock. Fees credited to a Deferred Cash Investment
Account or a Deferred Stock Account are deferred for income tax purposes. The
Plan does not provide for distributions prior to a participant's termination as
a Non-employee Director and the participant may generally elect either a lump
sum or installment distribution.
One of the Company's directors participates in a deferred compensation plan
in lieu of current payment of Fees. The plan was adopted by the Company in 1985
and provides for retirement and death benefits to be paid to the participating
director 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.
7
<PAGE> 11
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, 1999. The following
information is based on an investment of $100 on January 1, 1995, in the Common
Stock, the Nasdaq Stock Market Index and the Nasdaq Bank Stocks Index, with
dividends reinvested.
TOTAL SHAREHOLDER RETURN
[LINE GRAPH]
<TABLE>
<CAPTION>
December 31,
January 1, ------------------------------------------------------------------
1995 1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Independent Bank Corporation............ $100.00 $122.74 $169.94 $325.46 $259.53 $200.61
Nasdaq Stock Market..................... 100.00 141.33 173.89 213.07 300.25 542.43
Nasdaq Bank Stocks...................... 100.00 149.00 196.73 329.39 327.11 314.42
</TABLE>
8
<PAGE> 12
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: 1) provide incentives and rewards for superior performance;
2) align the interests of its executive officers and senior managers with the
interests of its shareholders, and; 3) provide executive officers and senior
managers with the opportunity to accumulate wealth that is commensurate with
increases in the value of the 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 executive officers and senior managers
at approximately 95% of the level established by the Company's peers.
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 each of the Bank, are determined in a similar manner by the Company's
President and Chief Executive Officer and the Bank's 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 aggregate annual cash compensation (the total 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, including the Employee
Stock Ownership Plan and the Employee Stock Option Plan described below. Both of
these compensation plans have been adopted by the Board of Directors, and the
Employee Stock Option Plan has been approved by the Company's shareholders. Such
plans are, however, administered by the Committee.
COMPENSATION PLANS
Pursuant to the MANAGEMENT INCENTIVE COMPENSATION PLAN, the Board of
Directors establishes annual performance levels as follows: 1) threshold
represents the performance level which must be achieved before any incentive
awards are granted; 2) target performance is defined as the desired level of
performance in view of all relevant factors, as discussed below, and; 3) maximum
represents that which reflects outstanding performance.
The principal factors considered by the Board in the 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 may also be subject to certain
pre-determined individual goals. 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, 1999, the Company's executive officers
and the Bank Presidents received cash awards pursuant to the Management
Incentive Compensation Plan that ranged from 30% to 50% of their respective base
salaries.
9
<PAGE> 13
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
April 20, 1999, the Board of Directors granted options to purchase 91,840 shares
of Common Stock to 32 executive officers and senior managers of the Company and
the Banks. Each of the options provides the recipient the right to purchase
2,870 shares of Common Stock at $15.95 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 the grant.
Prior to 1999, the Company's executive officers and the Bank Presidents were
participants in the Incentive Share Grant Plan. That plan provided that the
Committee, in its sole discretion, could 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 was equal to twice the amount of the cash incentive otherwise
payable. Shares issued pursuant to the plan were subject to restrictions, which
lapse in respect to 20% of the shares on the date of grant and 20% on each of
the succeeding anniversaries of the grant.
During 1999, the Company terminated the Incentive Share Grant Plan in favor
of cash incentives pursuant to the Management Incentive Compensation Plan and
the grant of options to purchase shares of the Common Stock pursuant to the
Employee Stock Option Plan. The Committee believes that such cash payments and
option grants provide greater incentives and enhances the participants' ability
to accumulate shares of Common Stock.
On January 16, 2000, the Board of Directors granted options to purchase
56,853 shares of Common Stock to the Company's executive officers and the Bank
Presidents. Each of the options were designated as incentive stock options, as
defined by the Internal Revenue Code, and provides the recipient the right to
purchase the underlying shares of Common Stock at $13.69 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 10 years after the date of the
grant.
The EMPLOYEE STOCK OWNERSHIP PLAN provides substantially all full-time
employees with an equity interest in the Company. Contributions to the ESOP are
determined annually and are subject to the approval of the Board of Directors.
Contributions for the year ended December 31, 1999, were equal to 6% of the
eligible wages for each of the approximately 752 participants in the ESOP.
CHIEF EXECUTIVE OFFICER COMPENSATION
Charles C. Van Loan has served as the Company's Chief Executive Officer
since 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 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 $240,000. 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 1999
totaled $120,000.
KEITH E. BAZAIRE ROBERT J. LEPPINK CHARLES A. PALMER
TERRY L. HASKE ARCH V. WRIGHT
10
<PAGE> 14
SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the Common Stock
by the Company's Chief Executive Officer and the four highest paid executive
officers of the Company or the Banks ("Named Executives") and by all directors
and executive officers as a group as of February 18, 2000.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent of
Name Ownership (1) Outstanding
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charles C. Van Loan 114,918 (2) 1.01%
Michael M. Magee 29,229 .26
Jeffrey A. Bratsburg 91,466 (3) .80
Edward B. Swanson 48,999 .43
Ronald L. Long 23,432 .20
1,297,123 (4) 11.32
All executive officers and directors
as a group (consisting of 18 persons)
persons)
</TABLE>
(1)In addition to shares held directly or under joint ownership with their
spouse, beneficial ownership includes shares 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)Includes shares held by Mr. Van Loan's dependent children.
(3)Includes shares 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
749,698 shares, including 715,402 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, 1999.
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
Annual -------------------- All
Compensation Restricted Securities Other
------------ Stock Underlying Compen-
Name & Principal Position Year Salary(1) Bonus(2) Awards(3) Options (#)(4) sation(5)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Van Loan 1999 $240,000 $ 120,000 20,404 $16,295
President and Chief 1998 223,450 $223,450 2,870 16,307
Executive Officer 1997 205,000 205,000 2,870 14,715
Michael M. Magee 1999 $157,500 $ 55,125 10,924 13,970
President and CEO 1998 150,000 $105,000 2,870 13,449
Independent Bank 1997 140,000 98,000 2,870 12,277
Jeffrey A. Bratsburg 1999 $135,000 $ 47,250 9,774 12,149
President and CEO 1998 135,000 $94,500 2,870 11,477
Independent Bank West Michigan 1997 135,000 94,500 2,870 11,527
Edward B. Swanson 1999 $150,000 $ 51,129 10,340 14,029
President and CEO 1998 141,000 $98,700 2,870 12,305
Independent Bank South Michigan 1997 131,000 91,700 2,870 11,697
Ronald L. Long 1999 $146,000 $ 43,860 9,278 12,996
President and CEO 1998 137,000 $68,500 2,870 11,859
Independent Bank East Michigan 1997 123,000 61,622 2,870 11,086
</TABLE>
11
<PAGE> 15
(1) Includes elective deferrals by employees pursuant to Section 401(k) of the
Internal Revenue Code.
(2) Represents amounts earned under the Company's Management Incentive
Compensation Plan.
(3) 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 Plan provided that the Personnel Committee may, at its sole
discretion, grant shares of restricted stock in lieu of cash incentives
payable under the Company's Management Incentive Compensation Plan. The
aggregate fair market value of the shares granted to each participant were
equal to twice the value of the amount otherwise payable in cash. The shares
are subject to restrictions on transfer and risks 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 risks upon 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, 1999, the Named Executives held shares of restricted stock
in the following aggregate amounts and values (based on the closing price of
the Common Stock on December 31, 1999, which equaled $14.63): Mr. Van Loan -
13,270 shares ($194,140); Mr. Magee - 6,205 shares ($90,779); Mr. Bratsburg
- 5,850 shares ($85,585); Mr. Swanson - 5,910 shares ($86,463); and Mr. Long
- 3,976 shares ($58,169).
(4) Includes options granted in 2000 relating to 1999 performance.
(5) 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 1999
The following table provides information on options granted to the Named
Executives during the year ended December 31, 1999.
<TABLE>
<CAPTION>
Individual Grants
Number of Percent of Total Exercise or Grant Date
Securities Underlying Options Granted to Base Price Expiration Present
Options Granted(1) Employees in 1999 (per share)(2) Date Value(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Charles C. Van Loan 2,870 1.93% $15.92 April 20, 2004 $ 12,083
17,534 11.79 13.69 January 16, 2010 117,828
Michael M. Magee 2,870 1.93% $15.92 April 20, 2004 $ 12,083
8,054 5.42 13.69 January 16, 2010 54,123
Jeffrey A. Bratsburg 2,870 1.93% $15.92 April 20, 2004 $ 12,083
6,904 4.64 13.69 January 16, 2010 46,395
Edward B. Swanson 2,870 1.93% $15.92 April 20, 2004 $ 12,083
7,470 5.02 13.69 January 16, 2010 50,198
Ronald L. Long 2,870 1.93% $15.92 April 20, 2004 $ 12,083
6,408 4.31 13.69 January 16, 2010 43,062
</TABLE>
(1)Indicates number of shares which may be purchased pursuant to options
granted under the Company's Employee Stock Option Plan. Options may not be
exercised in full or in part prior to the expiration of one year from the
date of grant.
(2)The exercise price equals the prevailing market price of the Common Stock on
the date of grant. The exercise price may be paid in cash, by the delivery of
previously owned shares, through the withholding of shares otherwise issuable
upon exercise or a combination thereof.
(3)The values reflect application of the Black-Scholes option pricing model.
The assumptions employed on options with an expiration date of April 20, 2004
were expected volatility of 15.5%, risk-free rate of return of 5.04%,
dividend yield of 3.35% and time to exercise of five years. The assumptions
employed on options with an expiration date of January 16, 2010 were expected
volatility of 8.32%, risk-free rate of return of 6.74%, dividend yield of
4.09% and time to exercise of ten years
12
<PAGE> 16
AGGREGATED STOCK OPTION EXERCISES IN 1999
AND YEAR END OPTION VALUES
The following table provides information on the number and value of options
exercised in the past year, as well as the number and value of unexercised
options held by the Named Executives at December 31, 1999. Options covering
77,068 shares of Common Stock were exercised in 1999.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options(2)
Acquired Value ------------------------------- ----------------------------
Name on Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles C. Van Loan 2,871 $24,278 11,483 20,404 $29,064 $16,438
Michael M. Magee 0 N/A 11,483 10,924 29,064 7,551
Jeffrey A. Bratsburg 2,871 24,272 11,483 9,774 29,064 6,473
Edward B. Swanson 2,871 25,809 11,483 10,340 29,064 7,003
Ronald L. Long 2,871 21,817 8,612 9,278 12,070 6,008
</TABLE>
(1)The value realized upon the exercise of options is equal to the difference
between the market value of the shares of Common Stock acquired at the time
of exercise and the aggregate exercise price paid by the Named Executive to
the Company.
(2)The value of unexercised options is based on the difference between the
closing price of the Common Stock on December 31, 1999 ($14.63) and the
exercise prices of the options.
MANAGEMENT CONTINUITY AGREEMENTS
The Company has entered into individual Management Continuity Agreements
with its executive officers and certain senior managers, including the Named
Executives. These agreements provide severance benefits if the individual's
employment is terminated within 36 months after a change in control of the
Company or within six months before a change in control if the Company
terminates the individual's employment in contemplation of a change in control
and to avoid the agreement. For the purposes of these agreements, a "change in
control" is any occurrence reportable as such in a proxy statement under
applicable rules of the Securities and Exchange Commission, and would include,
without limitation, the acquisition of beneficial ownership of 20% of the
Company's voting securities by any person, certain extraordinary changes in the
composition of the board of directors, or the merger or consolidation of the
Company in which it is not the surviving entity, or its sale or liquidation.
Severance benefits are not payable if the Company terminates the employment
for cause, if employment terminates due to the individual's death or disability,
or if the individual resigns without "good reason." An individual may resign
with "good reason"| after a change in control and retain benefits if the Company
reduces the individual's salary or bonus, assigns duties inconsistent with the
individual's prior position, or makes other material, adverse changes in the
terms or conditions of the individual's employment. The agreements are for
self-renewing terms of one to three years unless the Company takes action to
terminate further extensions. The agreements are automatically extended for a
one- to three-year term from the date of a change in control. These agreements
provide a severance benefit of a lump-sum payment equal to one- to three-years'
salary and bonus and a continuation of benefits coverage for one to three years.
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 1999. 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 $16,829,000 at December 31, 1999, equal to 14.80% of shareholders'
equity.
Two directors have financial interests in partnerships, that sold land
contracts to one of the Banks during 1999. Mr. Wright has an interest in one of
these partnerships, that sold three contracts with an aggregate principal face
value of approximately $580,000. Mr. Wright and Mr. Van Loan have interests in a
second partnership that sold two contracts with an aggregate principal face
value of $268,500. The contracts mature not later than January of 2005 and have
an average rate of approximately 8.5%. The contracts were sold without recourse
at face value.
13
<PAGE> 17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 to the Securities and
Exchange Commission. Based upon written representations by each Director and
Executive Officer, all of the required reports were timely filed by such persons
during 1999, except that Mr. Kohn failed to file one report covering the
acquisition of Common Stock.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of KPMG LLP 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 2000. It is expected that KPMG LLP will be selected
to serve as the independent accountants for 2000.
SHAREHOLDER PROPOSALS
Article VIII 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 2001
Annual Meeting of Shareholders proxy material must be received by the Company
not later than November 20, 2000.
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 solicit proxies from these
institutions. The cost of such services is expected to total approximately
$5,000, 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 __, 2000
14
<PAGE> 18
EXHIBIT A
THIRD AMENDMENT TO THE
INDEPENDENT BANK CORPORATION
EMPLOYEE STOCK OPTION PLAN
THIRD AMENDMENT TO THE INDEPENDENT BANK CORPORATION EMPLOYEE STOCK OPTION
PLAN, is adopted by the Board of Directors of Independent Bank Corporation (the
"Company"), to be effective as of September 15, 1999, with reference to the
following:
A. The Independent Bank Corporation Employee Stock Option Plan (the "Plan")
was approved by the Company's shareholders on April 21, 1992, and has
subsequently been amended.
B. Under Paragraph 8 of the Plan, the Board of Directors has the authority,
subject to certain conditions, to amend the Plan from time to time.
C. The Board of Directors has elected to amend the Plan to increase the
aggregate number of shares reserved for issuance pursuant to the Plan.
NOW, THEREFORE, the Plan is amended as follows:
1. The first sentence of Paragraph 5 of the Plan is hereby amended to read
as follows:
Subject to adjustments as provided in Paragraph 6(h), the aggregate number
of shares reserved for issuance pursuant to the Plan shall be 1,100,000
shares of the Company's Common Stock (the "Shares").
2. In all other respects, the Plan shall continue in full force and effect.
3. This Third Amendment shall be submitted to the Company's shareholders
for approval. The effective date for this Third Amendment shall be
September 15, 1999.
15
<PAGE> 19
<TABLE>
<S><C>
INDEPENDENT BANK CORPORATION
230 WEST MAIN STREET, IONIA, MICHIGAN
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 18, 2000
The undersigned hereby appoints Charles C. Van Loan and William R. Kohls and each of them, Proxies, with power of substitution, to
vote all 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, 2000 at
3:00 p.m. (local time), and at all adjournments thereof, as directed on the reverse side.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES AS DIRECTORS AND FOR PROPOSALS 3, 4 AND 5.
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Please sign this Proxy exactly as your name(s) appear(s) hereon. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than one name appears, a majority must 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?
- -------------------------------------------------------- ---------------------------------------------------------------
- -------------------------------------------------------- ---------------------------------------------------------------
- -------------------------------------------------------- ---------------------------------------------------------------
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.
Mark the boxes on this proxy card to indicate how your shares will be voted. Then sign the card, detach it and return your proxy
vote in the enclosed postage paid envelope. If you wish to register your vote by telephone or the internet see the reverse side for
instructions.
Your vote must be received prior to the Annual Meeting of Shareholders to be held April 18, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
The Board of Directors
INDEPENDENT BANK CORPORATION
</TABLE>
<PAGE> 20
<TABLE>
<S><C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
______________________________________ 1. Election of one Director for term expiring in 2001. For With-
INDEPENDENT BANK CORPORATION Nominee hold
______________________________________
(01) Jeffrey A. Bratsburg / / / /
Mark box at right if an address change or
comment has been noted on the reverse side / / 2. Election of three Directors for terms expiring in 2003. For All With- For All
of this card. Nominees hold Except
(02) Robert L. Hetzler
CONTROL NUMBER: (03) Robert J. Leppink / / / / / /
RECORD DATE SHARES: (04) Arch V. Wright, Jr.
NOTE: If you do not wish to vote "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
For Against Abstain
3. To amend the articles of incorporation to increase
authorized Common Stock to 30 million shares. / / / / / /
4. To amend the articles of incorporation to eliminate
the requirement that certain business combinations be / / / / / /
approved by 75% of the outstanding shares of Common
Stock.
Please be sure to sign
and date this Proxy. Date |
______________________________________________|
| 5. To make an additional 516,000 shares of Common Stock / / / / / /
| available under the Employee Stock Option Plan.
|
| 6. To transact such other business that may properly come before the meeting
Shareholder sign here Co-owner sign here| or at any adjournments thereof.
______________________________________________|
VOTE BY TELEPHONE VOTE BY INTERNET
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted.
FOLLOW THESE FOUR EASY STEPS: FOLLOW THESE FOUR EASY STEPS:
1. READ THE ACCOMPANYING PROXY STATEMENT/ 1. READ THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS AND
PROSPECTUS AND PROXY CARD. PROXY CARD.
2. CALL THE TOLL-FREE NUMBER 2. GO TO THE WEBSITE
1-877-PRX-VOTE (1-877-779-8683). FOR HTTP://WWW.EPROXYVOTE.COM/IBCP
SHAREHOLDERS RESIDING OUTSIDE THE UNITED
STATES CALL COLLECT ON A TOUCH-TONE PHONE 3. ENTER YOUR CONTROL NUMBER LOCATED ON YOUR PROXY CARD.
1-201-536-8073.
THERE IS NO CHARGE FOR THIS CALL. 4. FOLLOW THE INSTRUCTIONS PROVIDED.
3. ENTER YOUR CONTROL NUMBER LOCATED ON YOUR
PROXY CARD.
4. FOLLOW THE RECORDED INSTRUCTIONS.
YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/ibcp anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
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