<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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
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.
</TABLE>
HORIZON BANCORP
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
April 3, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders of
Horizon Bancorp to be held at the Holiday Inn, 5820 South Franklin Street,
Michigan City, Indiana on Thursday, May 4, 2000 at 10:00 a.m. (local time). To
ensure that a quorum will be represented at the meeting, we encourage you to
complete, sign, date and return your proxy promptly in the enclosed postage
prepaid envelope. This will not limit your right to vote in person or to attend
the meeting.
The Notice of Annual Meeting and the Proxy Statement on the following pages
cover the business to come before the meeting, which will include election of
directors. We urge you to read these materials carefully.
The Annual Report of Horizon Bancorp for the year ending December 31, 1999 is
also enclosed. The Annual Report is not to be considered as proxy solicitation
material.
We look forward to meeting our shareholders, and welcome the opportunity to
discuss the business of your company with you.
/s/ Robert C. Dabagia /s/ Craig M. Dwight
Robert C. Dabagia Craig M. Dwight
Chairman of the Board President
<PAGE> 3
HORIZON BANCORP
515 FRANKLIN SQUARE
MICHIGAN CITY, INDIANA 46360
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Our Shareholders:
NOTICE IS HEREBY GIVEN THAT PURSUANT TO THE CALL OF ITS DIRECTORS, the Annual
Meeting of Shareholders of Horizon Bancorp will be held on THURSDAY, MAY 4,
2000, 10:00 A.M. (LOCAL TIME), AT THE HOLIDAY INN, 5820 SOUTH FRANKLIN STREET,
MICHIGAN CITY, INDIANA, for the purpose of considering and voting upon the
following matters:
1) The election of three (3) Directors to serve terms which will expire in
2003.
2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on April 3, 2000, the
record date fixed by the Board of Directors, are entitled to notice of and to
vote at the meeting.
Your attention is directed to the accompanying Proxy Statement and Proxy.
IMPORTANT - PLEASE MAIL YOUR PROXY PROMPTLY IN ORDER THAT THERE MAY BE PROPER
REPRESENTATION AT THE MEETING. YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
By Order of the Board of Directors
/s/Diana E. Taylor
Diana E. Taylor
Secretary/Treasurer
April 3, 2000
<PAGE> 4
HORIZON BANCORP
515 FRANKLIN SQUARE
MICHIGAN CITY, INDIANA 46360
(219) 879-0211
APRIL 3, 2000
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of Horizon Bancorp
("Horizon") in connection with the solicitation by the Board of Directors of
proxies to be voted at the Annual Meeting of Shareholders of Horizon to be held
at the Holiday Inn, 5820 South Franklin Street, Michigan City, Indiana on
Thursday, May 4, 2000 at 10:00 a.m. (local time), and at any adjournment
thereof. This Proxy Statement and accompanying form of proxy have been mailed to
shareholders on or about April 3, 2000.
Only shareholders of record as of April 3, 2000 will be entitled to notice of,
and to vote at, the Annual Meeting. The voting securities of Horizon consist
only of Common Stock, of which 689,458 shares were issued and outstanding on the
record date. For the matters to be voted on at the Annual Meeting, each share of
Horizon Common Stock is entitled to one vote.
EXERCISE AND VOTING OF PROXY
The enclosed proxy is designed to permit each shareholder of record of Horizon
Common Stock at the close of business on April 3, 2000 to vote at the Annual
Meeting. All properly executed proxies delivered pursuant to this solicitation
will be voted at the meeting in accordance with the instructions of the
shareholders given in the proxies. In the absence of any such instructions, the
shares of Horizon Common Stock represented by proxy, will be voted FOR the
election of the three nominees for directors. On other matters that may properly
come before the meeting, this proxy will be voted, in their discretion, by the
named Proxies. Management is not aware of any other matters to be presented at
the meeting nor has it received notice from any shareholders of other matters to
be addressed. Any proxy may be revoked at any time insofar as it has not been
exercised, either by delivery to Horizon of a written revocation, by a duly
executed proxy bearing a later date or by action of the shareholder at the
meeting.
The nominees for election as directors of Horizon named in the Proxy Statement
will be elected by a plurality of the votes cast. Action on other matters
presented at the meeting will be approved if the votes cast in favor exceed the
votes cast in opposition, unless a higher voting requirement is required.
Abstentions or broker non-votes will not be voted for or against any items or
other matters presented at the meeting.
The cost of soliciting proxies in the accompanying form will be borne by
Horizon. In addition to solicitation by mail, proxies may be solicited
personally or by telephone or facsimile or electronic mail, by certain
directors, officers and employees of Horizon or Horizon Bank, N.A. ("Bank"), its
subsidiary, who will not be specially compensated for such solicitation. No
solicitation of proxies will be made by paid solicitors.
1
<PAGE> 5
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the knowledge of Horizon, as of February 29, 2000, the following
are the only beneficial owners of more than five percent (5%) of the outstanding
shares of Horizon Common Stock, except as otherwise noted under Nominee's
Standing for Election.
<TABLE>
<CAPTION>
NAME & ADDRESS OUTSTANDING STOCK PERCENTAGE OF OUTSTANDING STOCK
- -------------- ----------------- -------------------------------
<S> <C> <C>
Cede & Co. 199,753 28.97%
Box #20
Bowling Green Station, NY 10004
Horizon Trust & Investment
Management, N.A., as trustee 85,399 (1) 12.29%
P.O. Box 1125
Michigan City, IN 46361
First Bankers Trust Company, as trustee 65,844 (2) 12.39%
2321 Koch's Lane
Quincy, IL 62301
Darhap & Co. 85,398 (3) 12.39%
P.O. Box 1125
Michigan City, IN 46361
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Shares indicated as beneficially owned under Horizon's Employee Stock
Ownership Plan ("ESOP"). These shares will be transferred to the
Horizon Stock Bonus Plan in 2000.
(2) Shares indicated as beneficially owned under the Horizon's ESOP. These
shares will be transferred to the Horizon Stock Bonus Plan upon
termination of the ESOP in 2000.
(3) Shares indicated as beneficially owned are held by Darhap & Co. as
nominee for Horizon Trust & Investment Management, N.A. (a subsidiary
of Bank) for shares held for beneficiaries of trusts and estates, but
excluding Horizon's Employee Stock Ownership Plan and Employees' Thrift
Plan.
ELECTION OF DIRECTORS
The Articles of Incorporation of Horizon provide that the Board of Directors
shall consist of three classes of directors. One class of directors is to be
elected each year with terms extending to the third succeeding Annual Meeting
after such election.
NOMINEES STANDING FOR ELECTION
TERMS TO EXPIRE IN 2003:
<TABLE>
<CAPTION>
NAME, AGE AND
YEAR FIRST SHARES BENEFICIALLY PERCENT OF
ELECTED DIRECTOR (1) PRINCIPAL OCCUPATION OWNED (2) CLASS
- -------------------- --------------------- -------------------- -----------
<S> <C> <C> <C>
Chairman and Chief Executive 27,590 (3) 3.87%
Officer, Horizon and Chairman,
[PICTURE] Bank, since December 15, 1998;
President and Chief Administrative
Officer, Horizon and Bank from 1986
to retirement on December 31, 1996
Robert C. Dabagia
Age - 61
1980
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
NOMINEES STANDING FOR ELECTION
TERMS TO EXPIRE IN 2003:
NAME, AGE AND
YEAR FIRST SHARES BENEFICIALLY PERCENT OF
ELECTED DIRECTOR (1) PRINCIPAL OCCUPATION OWNED (2) CLASS
- -------------------- -------------------- ------------------- -----------
<S> <C> <C> <C>
President and Chief Executive Officer, 223 0.03%
St. Anthony Memorial Health Centers
[PICTURE]
Bruce E. Rampage
Age - 53
- ----------------------------------------------------------------------------------------------------------------
Vice President, Design Organization, Inc. 223 0.03%
[PICTURE]
Spero W. Valavanis
Age - 47
- ----------------------------------------------------------------------------------------------------------------
CONTINUING DIRECTORS
TERMS TO EXPIRE IN 2002:
NAME, AGE AND
YEAR FIRST SHARES BENEFICIALLY PERCENT OF
ELECTED DIRECTOR (1) PRINCIPAL OCCUPATION OWNED (2) CLASS
- -------------------- -------------------- ------------------- ----------
Retired - Chancellor, 1,153 0.16%
Purdue University
- North Central
[PICTURE]
Dale W. Alspaugh
Age - 67
1986
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
CONTINUING DIRECTORS
TERMS TO EXPIRE IN 2002:
NAME, AGE AND
YEAR FIRST SHARES BENEFICIALLY PERCENT OF
ELECTED DIRECTOR (1) PRINCIPAL OCCUPATION OWNED (2) CLASS
- -------------------- -------------------- -------------------- ----------
<S> <C> <C> <C>
President and Chief Administrative 6,232 (4) 0.88%
Officer, Horizon and President and
Chief Executive Officer, Bank
[PICTURE] since December, 1998; Executive
Vice President and Chief Executive
Officer, Horizon and Bank since
October, 1998; Vice President and
Craig M. Dwight Senior Lender, Bank since 1997;
Age - 43 Vice President and Senior Commercial
1999 (5) Lender, Bank since 1990
- ----------------------------------------------------------------------------------------------------------------
Pathologist, Pathology 3,750 0.53%
Consultants, Inc.
[PICTURE]
Robert E. McBride, M.D.
Age - 60
1984
- -------------------------------------------------------------------------------------------------------------------
Farmer 349 0.05%
[PICTURE]
Gene L. Rice
Age - 67
1979
- -------------------------------------------------------------------------------------------------------------------
CONTINUING DIRECTORS
TERMS TO EXPIRE IN 2001:
NAME, AGE AND
YEAR FIRST SHARES BENEFICIALLY PERCENT OF
ELECTED DIRECTOR (1) PRINCIPAL OCCUPATION OWNED (2) CLASS
- -------------------- -------------------- ------------------- -----------
Financial consultant; former publisher 855 0.12%
of Michigan City News-Dispatch
(local newspaper)
[PICTURE]
George R. Averitt
Age - 68
1973
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
CONTINUING DIRECTORS
TERMS TO EXPIRE IN 2001:
NAME, AGE AND
YEAR FIRST SHARES BENEFICIALLY PERCENT OF
ELECTED DIRECTOR (1) PRINCIPAL OCCUPATION OWNED (2) CLASS
- -------------------- --------------------- ------------------- ----------
<S> <C> <C> <C>
Owner/Broker, Century 21 624 0.09%
1st Team, Inc.
[PICTURE]
Larry N. Middleton, Jr.
Age - 47
1995
- -------------------------------------------------------------------------------------------------------------------
Executive Vice President, 223 0.03%
McKee Group
[PICTURE]
Susan D. Sterger
Age - 45
1995
- -------------------------------------------------------------------------------------------------------------------
President - Bearing Division 223 0.03%
Emerson Power Transmission Corp.
[PICTURE]
Robert E. Swinehart
Age - 57
1998
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The date indicated in this column reflects the year the person listed
was first elected as a director of Horizon or one of the predecessors
of Bank, namely Citizens Bank of Michigan City ("Citizens Bank") and
First Merchants National Bank ("First Bank").
(2) The information shown regarding shares beneficially owned is based upon
information furnished to Horizon by the individuals listed. The nature
of beneficial ownership, unless otherwise noted, represents sole or
shared voting or investment power.
(3) Shares indicated as beneficially owned by Mr. Dabagia include 12,000
shares of vested stock options granted under the 1987 Stock Option and
Stock Appreciation Rights Plan ("1987 Plan") of Horizon.
(4) Shares indicated as beneficially owned by Mr. Dwight include 1,200
shares of vested stock options granted under the 1987 Stock Option and
Stock Appreciation Rights Plan ("1987 Plan") of Horizon, 2,100 shares
of vested stock options granted under the 1997 Stock Option and Stock
Appreciation Rights Plan ("1997 Plan") of Horizon and 2,932 shares held
by the Horizon Employee Stock Ownership Plan ("ESOP").
(5) Mr. Dwight was appointed by the Board of Directors on December 15, 1998
to fulfill the unexpired term of a director who resigned and then
elected to the Board for a full term in 1999.
Information regarding shares beneficially owned is as of February 29, 2000. As
of February 29, 2000, directors, nominees and executive officers, as a group
(16, including above 11 individuals), beneficially owned 51,157 shares
(including 17,500 shares exercisable under stock options), 7.18% of the shares
outstanding.
5
<PAGE> 9
BOARD RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION OF
THE NOMINEES. It is intended that the proxies given to the persons named in the
accompanying form of proxy will, unless otherwise indicated therein, be voted
FOR the election of the nominees named above. Although management has no reason
to believe that any nominee will be unable to serve, in the event any nominee
should become unavailable for election, and unless the Board of Directors shall
reduce the size of the Board to a number which shall be equal to the number of
nominees who are able and willing to serve, the persons named in the proxy will
vote for a substitute nominee who will be designated by the Board of Directors.
PROCEDURES FOR NOMINATION OF DIRECTORS
Under Horizon's by-laws, nominations for election to the Board of Directors may
be made by the Board of Directors or by any shareholder of any outstanding class
of capital stock of Horizon entitled to vote for the election of directors.
Horizon does not have a Nominating Committee of the Board of Directors.
Nominations by any shareholder must be made in writing and must be delivered to
the President of Horizon not less than 30 days nor more than 50 days prior to
any meeting of shareholders called for the purpose of electing directors and
must include certain detailed information and representations with respect to
such nominee as specified in the by-laws. Nominations not made in accordance
with the by-laws may be disregarded by the chairman of the meeting, in his
discretion, and upon his instructions, the vote tellers may disregard all votes
cast for any such nominee. A complete copy of the applicable provision of the
by-laws will be available upon request to the President of Horizon.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During 1999, Horizon's Board of Directors held twelve meetings. All Horizon
directors attended 75% or more of the aggregate of the meetings of the Board of
Horizon, Bank and all committees upon which the Directors serve except for Dale
W. Alspaugh. Horizon does not have any standing committees of its own. However,
the Bank Board of Directors has, among others, an Audit Committee and
Compensation Committee, which also serve as such for Horizon, The Loan Store,
Inc., a consumer finance subsidiary of Horizon, Horizon Trust & Investment
Management, N.A., an investment management subsidiary of Bank and Horizon
Insurance Services, Inc., an insurance agency subsidiary of Bank.
The Audit Committee, whose members at December 31, 1999 were Russell L. Arndt,
Chairperson, Dale W. Alspaugh, Robert E. McBride, Larry N. Middleton, Robert E.
Swinehart and Bruce E. Rampage (director of Bank), met four times in 1999.
Robert C. Dabagia and Craig M. Dwight were ex officio members of the Audit
Committee. The purpose of the Committee is to assist the Board of Directors in
fulfilling its statutory and fiduciary responsibilities with respect to
examinations of Bank and affiliates and the monitoring of accounting, auditing
and financial reporting practices. The Committee reviews the internal audit
program of Bank and recommends to the Board of Directors the engagement of an
outside auditing firm.
The Compensation Committee, whose members at December 31, 1999 were Robert E.
McBride, Chairperson, Dale W. Alspaugh, George R. Averitt, Robert C. Dabagia,
Craig M. Dwight, Larry N. Middleton, Bruce E. Rampage (director of Bank) and
Spero W. Valavanis (director of Bank) met four times in 1999. The Committee
reviews all salary and employee benefit issues relating to employees and
directors of Bank and its affiliates.
6
<PAGE> 10
EXECUTIVE OFFICERS OF BANCORP
The following information is provided with respect to executive officers of
Horizon with all share information as of February 29, 2000:
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF OFFICE AND BUSINESS EXPERIENCE DURING THE
NAME AGE OWNED (1) CLASS PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert C. Dabagia 61 27,590(2) 3.87% Chairman and Chief Executive Officer, Horizon and Chairman, Bank,
since December 15, 1998; President and Chief
Administrative Officer, Horizon and Bank from 1986 to
retirement on December 31, 1996.
Craig M. Dwight 43 6,232 (3) 0.88% President and Chief Administrative Officer, Horizon and President
and Chief Executive Officer, Bank since December, 1998; Executive
Vice President and Chief Executive Officer, Horizon and Bank since
October, 1998; Vice President and Senior Lender, Bank since 1997;
Vice President and Senior Commercial Lender, Bank since 1990.
Diana E. Taylor 35 2,723 (4) 0.38% Senior Vice President and Chief Financial Officer, Horizon and Bank
since 1998; Vice President and Chief Financial Officer, Horizon and
Bank since 1995; Senior Auditor, Bank since 1991.
Lawrence J. Mazur 51 5,489 (5) 0.77% President, Horizon Trust & Investment Management, N.A. since
December 1998; President, Financial Planning and Management
Corporation since 1994; Self employed Attorney and CPA since 1993.
Thomas H. Edwards 47 1,000 0.14% Executive Vice President and Senior Lender, Horizon and Bank since
May 1999, Executive of Loan Management Services, Crowe, Chizek and
Company, LLP since 1993.
James D. Neff 40 500 0.07% Senior Vice President, Mortgage Warehousing Division, Bank since
October 1999; Vice President, Mortgage Warehousing Division, Civitas
Bank (formerly Pinnacle Bank) since 1997; Vice President, Community
Bank since 1991.
</TABLE>
(1) The information shown regarding shares beneficially owned is based upon
information furnished to Horizon by the individuals listed. The nature
of beneficial ownership, unless otherwise noted, represents sole or
shared voting or investment power.
(2) Shares indicated as beneficially owned by Mr. Dabagia include 12,000
shares of vested stock options granted under the 1987 Stock Option and
Stock Appreciation Rights Plan ("1987 Plan") of Horizon,
(3) Shares indicated as beneficially owned by Mr. Dwight include 1,200
shares of vested stock options granted under the 1987 Stock Option and
Stock Appreciation Rights Plan ("1987 Plan") of Horizon, 2,100 shares
of vested stock options granted under the 1997 Stock Option and Stock
Appreciation Rights Plan ("1997 Plan") of Horizon and 2,932 shares held
by Horizon's Employee Stock Ownership Plan ("ESOP").
(4) Shares indicated as beneficially owned by Ms. Taylor include 1,000
shares of vested stock options granted under the 1997 Stock Option and
Stock Appreciation Rights Plan ("1997 Plan") of Horizon and 1,723
shares held by Horizon's Employee Stock Ownership Plan ("ESOP").
(5) Shares indicated as beneficially owned by Mr. Mazur include 4,000
shares owned by Financial Planning and Management Corporation of which
Mr. Mazur is the 100% shareholder and has full investment power and
1,200 shares of vested stock options granted under the 1997 Stock
Option and Stock Appreciation Rights Plan ("1997 Plan") of Horizon
All of Horizon's executive officers hold office for a term of one year (see
"Executive Compensation and Other Information").
7
<PAGE> 11
REPORT OF THE COMPENSATION COMMITTEE
DECEMBER 31, 1999
The Compensation of all elected officers of the Horizon and subsidiaries,
including that of the Chief Executive Officer, is set annually by the outside
directors who are members of the Compensation Committee of Bank's Board of
Directors ("Committee"). The outside director membership of the Committee is
generally comprised of six outside directors. The appointment of outside
directors to the Committee is rotated.
Compensation is composed of several segments which include base salary,
short-term incentives and long-term incentives. The Committee compares all
management compensation, including that of the Chief Executive Officer, to the
compensation paid to managers holding the same position in similar financial
institutions. Data for this comparison comes from a variety of independent and
credible sources with the principal data contained in an annual study published
by the Bank Administration Institute ("BAI").
SALARIES
All salaries, including that of the Chief Executive Officer, are governed by
Horizon's formal salary administration program in which all salary decisions are
subject to detailed annual performance reviews. Each year, the salary
administration program is updated and the salary of each member of Horizon is
compared to those salaries being paid to like positions in similar size
organizations. Salary ranges for each position in Horizon are then computed from
that data. In general, the highest salary that would be allowable by Horizon is
below the highest salary for that position as reported in the BAI data. In 1999,
the highest computed salary allowable for the Chief Executive Officer was
$235,000 and the actual salary paid was $180,000 or 77% of the maximum allowable
under the Bank's salary administration program.
SHORT TERM INCENTIVE PROGRAMS
All employees are covered by a short-term incentive compensation program which
provides for the payment of annual bonuses. A bonus program was approved for the
years 1987 and 1992 through 1999; no bonus plan was established for 1988 through
1991. In addition, no officer bonuses were paid under the programs approved in
1987, 1992, 1995, 1997, 1998 and 1999. The bonus program is based on a pool of
funds, which, in turn, is based on Horizon's return on assets for the year. A
return on assets which is below a predetermined level will result in no funding
being made to the bonus program. Funds from the pool are distributed to the
participants under a formula which considers both their salary for that year and
their performance rating. All employees can qualify to participate in the bonus
program; however, if an individual's performance rating is below a predetermined
level, he or she will not be eligible to receive a bonus.
Horizon sponsors other short-term incentive compensation programs for all
employees. These programs are generally structured as sales incentive programs
which are either nominal or material in value. If a payment under the program is
of only nominal value, it typically is paid in addition to the normal salary
earned by the employee. However, if the program can result in material payments,
such payments are typically made in lieu of a discounted portion of both the
normal salary increase earned and the annual bonus program. In this instance,
the employee loses the discounted portion of the salary increase and annual
bonus even if he or she does not earn any commissions under the applicable sales
incentive program. Neither the Chairman (Chief Executive Officer) nor the
President (Chief Administrative Officer) are permitted to participate in any of
the sales incentive programs.
LONG TERM INCENTIVE PROGRAMS/STOCK OPTIONS
Horizon's long-term incentive program is based on stock options. Stock options
are granted to encourage and facilitate personal stock ownership by executive
officers and thus strengthen their personal commitment to Horizon and gain a
longer-term perspective in their managerial responsibilities. This component of
an executive officer's compensation directly links the officer's interests with
Horizon's shareholders. Horizon also recognizes that stock options are a
necessary element of a competitive compensation program. The program utilizes
vesting periods to encourage key employees to continue in the employ of Horizon
and thereby acts as a retention device for key employees. All options granted
under this program include tandem stock appreciation rights ("SARs").
8
<PAGE> 12
PERFORMANCE REVIEWS
The Committee conducts an annual review of the performance of the Chairman
(Chief Executive Officer) and the President (Chief Administrative Officer) who
are the senior executive officers of Horizon. In conducting its review, the
Committee considers a variety of performance factors in analyzing the
compensation of each of these executive officers. These factors generally
include traditional financial results and indicators such as revenues, expenses,
assets, credit issues, reserves, earnings and ratios such as return on equity,
loans to deposits and other significant factors and performance indicators. The
financial services business is complex and is undergoing changes which generate
uncertainties about future events. The Chairman and the President must provide
guidance and leadership in nearly all aspects of this dynamic enterprise. In the
process, however, they are not expected to work alone. The performance
evaluation recognizes that programs initiated at the top level of an
organization are not quick fixes, nor should they be. These programs are
generally long term in nature, bringing benefit to Horizon over many years. For
those reasons, the Committee also focuses on the following issues in determining
performance levels for the Chairman and the President: quality of the
organization, service delivery characteristics, quality of service, leadership
in the community, and risk management. Compensation levels are also affected by
changes in responsibilities and duties of executive officers over time and may
be adjusted more or less frequently than annually when circumstances warrant.
There are several additional criteria against which the performance of the
Chairman, the President and other executive officers are measured in setting
their annual compensation. Among these are the continued growth and development
of our investment management business, a very major portion of our enterprise;
efficient and cost effective use of technology; the management of change;
development of existing and new services; recruitment of and development of
skilled people in the organization; team building; operating cost controls;
improvement of fee income; ability to meet increased competition; performance of
Horizon's investment portfolio; ongoing development of Horizon's information
systems; and a broad variety of financial services industry and management
functions that are typical of a well-managed organization. All management
compensation, including that of the Chairman, President and the other executive
officers, is performance related.
COMPENSATION COMMITTEE MEMBERSHIP
Mr. Dabagia, Chairman (Chief Executive Officer) of Horizon, and Mr. Dwight,
President (Chief Administrative Officer) of Horizon, are members of the
Committee but do not participate in the Committee's evaluations of their
performances or in voting on their compensation. As members of the Committee,
they participate in reviewing the performance of other officers, engage in the
discussion of non-compensation human resource related issues, provide technical
assistance to the Committee, provide liaison between the Committee and
management and undertake to enact the decisions of the Committee on its behalf.
On occasion, Ms. Judy Dodge, Vice President of Human Resources, also engages in
many of the above duties, but is not a voting member of the Committee.
No other officers, employees, former officers or employees of Horizon or
individuals requiring disclosure under Item 404 of Regulation S-K are voting
members of the Committee. In addition, there are no executive officer/director
interlocks in which an executive officer/director of one company serves on the
compensation committee of another company, which itself has an executive
officer/director serving on the first company's board of directors or
compensation committee.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Robert E. McBride, Chairperson Dale W. Alspaugh George R. Averitt Robert C. Dabagia
Craig M. Dwight Larry N. Middleton Bruce E. Rampage * Spero W. Valavanis *
</TABLE>
- ------------------------------------
* Directors of Bank
9
<PAGE> 13
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following information is provided with respect to compensation paid by Bank
to each executive officer of Horizon and/or Bank in 1999 whose compensation
exceeded $100,000.
<TABLE>
<CAPTION>
---------- Annual Compensation----------------- --------------------Long-term Compensation--------
------Awards--------- ---------Payouts-----------
Securities
Other Annual Restricted Underlying LTIP All Other
Name and Salary ($) Bonus ($) Compensation Stock Options/ Payouts Compensation
Principal Position Year (1) (2) (1) (3) (4) Award(s) SARs (#) ($) (5)
- ------------------ ---- ------- ------- --- -------- -------- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert C. Dabagia 1999 $180,000 -- -- -- -- -- --
Chairman and 1998 -- -- $55,000 (6) -- -- -- --
Chief Executive Officer 1997 -- -- $40,000 (6) -- -- $349,725 --
Craig M. Dwight 1999 $160,000 -- $591 -- 17,500 -- $78,054
President and Chief 1998 $106,408 -- $502 -- 3,000 -- $12,481
Administrative Officer 1997 $91,741 $3,552 $359 -- -- -- $3,670
Lawrence J. Mazur 1999 $130,000 -- $1,223 -- 6,000 -- $16,250
President - Horizon Trust 1998 -- -- -- -- -- -- --
& Investment Management 1997 -- -- -- -- -- -- --
</TABLE>
(1) Salary and benefit numbers included herein for years have been restated
to indicate actual paid, and actual deferred compensation pursuant to
each category of payment.
(2) Includes salary amounts paid and salary amounts deferred by the
individual named pursuant to Horizon's Thrift Plan and Supplemental
Executive Retirement Plan ("SERP").
(3) Includes bonus amounts paid and bonus amounts deferred by the
individual named pursuant to Horizon's Thrift Plan and SERP.
(4) Includes a portion of the group term life insurance premium taxable to
the individual named.
(5) Includes Horizon's contribution to Horizon's ESOP and it's matching
contribution to the Thrift Plan and SERP.
(6) These amounts reflect directors fees paid to Mr. Dabagia for the duties
he performed as Vice Chairman of the Board as he was not compensated as
an employee during these years.
- --------------------------------------------------------------------------------
EMPLOYMENT AGREEMENTS
Messrs. Mazur and Neff are each parties to Employment Agreement with Horizon
which provides for their continued services as President of Horizon Trust &
Investment Management and Senior Vice President, Mortgage Warehousing Division,
respectively. Mr. Mazur's agreement expires on December 31, 2003 and Mr. Neff's
agreement expires on December 31, 2001. These contracts are not renewable. Under
the Agreements, Messrs. Mazur and Neff receive minimum benefits and are paid
salaries and bonuses agreed upon at their date at hire. If Mr. Mazur's
employment is terminated for reasons other than "cause", as defined in the
Agreement, he will continue to receive his basic annual compensation for a
period of two years. Upon change of control of Horizon, the Mr. Mazur is
entitled to continuation of his salary for three years. If Mr. Neff's employment
is terminated for reasons other that "cause", as defined in the Agreement, or
upon change of control of Horizon, he will continue to receive his basic annual
compensation through the end of his Agreement.
Messrs. Dwight and Edwards and Ms. Taylor are parties to Change of Control
Agreements with Horizon. These agreements provide that upon change of control,
the individual will receive payment of two times his/her then current salary
rate at that time.
10
<PAGE> 14
AGGREGATE OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR AND YEAR-END OPTION/SAR
VALUES
The following table sets forth the number of shares acquired on exercise of
stock options and the aggregate gains realized on exercise in 1999 by Horizon's
executive officers named in the Summary Compensation Table. The table also sets
forth the number of shares covered by exercisable and unexercisable options held
by such executives on December 31, 1999.
<TABLE>
<CAPTION>
Number of Shares Covered Value of Unexercised In-The
by Unexercised Options/SARs on Money Options/SARs as of
--Shares Acquired-- ------------12/31/99---------- -----------12/31/99 (2)-----
On Exercise Value
Name During 1999 Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Dabagia -0- -0- 12,000 -0- $130,500 -0-
Craig M. Dwight -0- -0- 1,800 9,900 $33,600 -0-
Lawrence J. Mazur -0- -0- -0- 6,000 -0- -0-
</TABLE>
(1) Market value on the date of exercise of shares covered by options
exercised, less option exercise price.
(2) Market value of shares covered by in-the-money options on December 31,
1999 less option exercise price. Options are in-the-money if the market
value of shares covered thereby is greater than the option exercise
price.
COMPENSATION OF DIRECTORS
Horizon paid its non-employee directors $15,000 each for their services in 1999.
Active employees of Horizon and/or Bank receive no separate compensation for
their services as directors. There is no additional compensation for meetings of
committees of the Board, special assignments or special meetings.
DIRECTORS' DEFERRED COMPENSATION PLAN
Horizon sponsors a Directors' Deferred Compensation Plan, which allows Directors
of Horizon and Bank who are not also employees to elect to defer the receipt of
fees for their services. Earnings on fees deferred under the plan are based on
the performance of investments selected by the participating director. Payments
of deferred fees are made to participants or their beneficiaries in a lump sum
or monthly installments upon death or disability of the participants, or as
designated by participants. Participants have no rights to amounts deferred
other than rights as general creditors of Horizon.
11
<PAGE> 15
PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return
Among Horizon Bancorp Common Stock, S&P 500 Index
and Bank Composite Index
(Total return assumes $100 invested on
January 1, 1995 with reinvested dividends)
----------------------
STOCK PERFORMANCE
FIVE YEAR TOTAL RETURN
----------------------
[LINE GRAPH]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Horizon Bancorp $112.92 $152.62 $194.31 $172.54 $152.31
S&P 500 Index 137.58 169.17 225.60 289.53 350.00
Bank Composite Index 159.35 225.56 325.82 347.18 303.09
SNL Banks < $500 Million 136.80 176.08 200.16 174.07 153.69
</TABLE>
The comparison of total return on investment (change in December year end stock
price plus reinvested dividends) for each of the periods shown, assumes that
$100 was invested on December 31, 1994 in each of Horizon Common Stock, the
Standard and Poor 500 Index, the Standard and Poor Bank Composite Index and SNL
Composite of Banks with assets less than $500 million. Other companies in the
Standard and Poor indices are in general larger than Horizon, with greater
market capitalization, and with shares which trade on a national exchange.
Horizon's shares are not traded on any exchange and trade only infrequently in
the over-the-counter market. Information with respect to the market price of
Horizon's shares was provided by ABN AMRO, the principal market maker for the
shares, and does not include mark-ups, mark-downs or commissions and may not
reflect either actual trades or all trades which occur.
12
<PAGE> 16
TRANSACTIONS WITH MANAGEMENT
Directors and executive officers of Horizon and their associates were customers
of, and have had transactions with, Bank in the ordinary course of business
during 1999. Comparable transactions may be expected to take place in the
future. During 1999, various directors and officers of Horizon and their
respective associates were indebted to Bank from time to time. These loans 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 did not involve more than normal
risk of collectibility or present other unfavorable features.
EMPLOYEE STOCK OWNERSHIP PLAN
On July 20, 1999, the Board of Directors of Horizon Bancorp authorized the
termination of the Horizon Bancorp Employee Stock Ownership Plan ("ESOP"). This
decision was based upon a thorough financial analysis of the impact this plan
has had on the earnings and capital of Horizon since it's inception and the
expected future impact retaining this plan would likely have on Horizon. On
December 31, 1999 the debt owed by the ESOP was repaid with the proceeds from
the sale of a portion of the unallocated shares to Horizon Bancorp. The
remaining unallocated shares will be allocated to the accounts of participants.
Upon the termination of the ESOP, effective March 31, 2000, the shares allocated
to participants accounts will be transferred to the newly created Horizon
Bancorp Employees' Stock Bonus Plan which will own approximately 24% of the
outstanding shares.
For the year ended December 31, 1999, $792,648 was contributed to the ESOP, of
which $0 in value of Horizon Common Stock was allocated to the account of Mr.
Dabagia, $25,520 in value of Horizon Common Stock was allocated to the account
of Mr. Dwight, a total of $42,852 in value of Horizon Common Stock allocated to
accounts of all executive officers as a group (six individuals, including the
above two). The accounts of Messrs. Dabagia and Dwight under the ESOP are 100%
vested.
THRIFT PLAN
The Horizon Bancorp Employee's Thrift Plan (Plan) provides that all employees
with the requisite hours of service are eligible for the Plan. The Bank fully
matches the first 2% and 50% of the subsequent 4% of individual employee
contributions. Employee elective salary deferrals are vested at all times and
the Bank contributions are fully vested after six years.
For the year ended December 31, 1999, Bank contributed $196,000 to the Thrift
Plan of which $0 was allocated to the account of Mr. Dabagia, $4,185 was
allocated to Mr. Dwight, a total of $7,906 was allocated to the accounts of all
executive officers as a group (six individuals, including the above two). The
accounts of Messrs. Dabagia and Dwight under the Thrift Plan, are 100% vested.
1987 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLANS
Awards under the 1987 Stock Option and Stock Appreciation Rights Plan of Horizon
Bancorp, ("1987 Plan") were made by the Compensation Committee, exclusive of
those members who were eligible to participate in the 1987 Plan (the
"Committee"). The Committee selected any key employee of Horizon or Bank to
participate in the 1987 Plan. Awards were granted from time to time until
January 20, 1990 when the 1987 Plan terminated pursuant to its terms. A maximum
of 85,000 shares of Horizon Common Stock could have been issued under the 1987
Plan. However, less than that number of shares of Horizon Common Stock were
issued under the 1987 Plan. On December 18, 1990, the Board adopted resolutions
which authorized the Committee to grant new options and SARs, solely to
non-executive officers, to receive up to 10,000 shares of Horizon Common Stock.
The Board authorized the grants under the same terms and conditions as the 1987
Plan. All of the options and SARs authorized by the Board resolutions were
granted on January 28, 1991. At December 31, 1999, options to purchase 17,100
shares of Horizon Common Stock were outstanding under the 1987 Plan and the 1990
Board resolutions, and 66,800 SARs have been exercised thereunder.
Awards under the 1987 Plan and the Board's 1990 resolutions include
non-qualified stock options ("NSOs") and SARs. SARs were granted only in
conjunction with NSOs. An award cannot be exercised by a recipient until one
year after grant. Thereafter, after the first year and through the second year
from the date of award, an option may be exercised as to not more than 20% of
the total option shares; through the third year as to not more than 40% of the
total option shares; through the fourth year as to not more than 60% of the
total option shares; through the fifth year as to not more than 80% of the total
option shares; and during the sixth year and any time thereafter (during the
remaining term of the option) all or part of the option shares may be exercised.
Upon the death of the recipient, the option is exercisable in full within one
year from the date of the recipient's death. In the event of a change of control
of Horizon (as defined) all outstanding options may be exercised immediately.
13
<PAGE> 17
1997 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
On December 17, 1996, the Board adopted, subject to shareholder approval, the
1997 Key Employees' Stock Option and Stock Appreciation Rights Plan of Horizon
Bancorp ("1997 Plan"). In connection therewith, the Board reserved for issuance,
subject to shareholder approval, 90,000 shares of Horizon Common Stock. On May
29, 1997, Horizon shareholders approved the 1997 Plan and the reservation of
90,000 shares for issuance thereunder. The 1997 Plan provides for the granting
of NSOs, SARs and "incentive stock options" ("ISOs"). NSOs and ISOs may be
granted with or without SARs under the 1997 Plan. The Committee is responsible
for administering the 1997 Plan. NSOs and SARs may be granted under the 1997
Plan for a period of twenty (20) years commencing January 1, 1997; ISOs may be
granted for a period of ten (10) years commencing January 1, 1997.
OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR
The following information is provided with respect to stock options/stock
appreciation rights granted to each executive officer of Horizon and/or Bank in
1999.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration Grant Date
Name Granted (#) Fiscal Year ($/sh) Date Value ($)
---- ----------- ----------- ------ ---- ---------
<S> <C> <C> <C> <C> <C>
Craig M. Dwight 7,500 28% $50.25 February 16, 2019 $98,175
Lawrence J. Mazur 6,000 22% $50.00 February 22, 2019 $67,380
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
Olive LLP served as Horizon's independent auditors for 1999. The services
performed by Olive LLP in this capacity included conducting an examination in
accordance with generally accepted auditing standards and expressing an opinion
on Horizon's 1999 consolidated financial statements. The Board of Directors has
selected Olive, LLP as the Independent Public Accountants for the year ending
December 31, 2000. It is expected that representatives of Olive, LLP will be
present at the Annual Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Horizon's executive officers, directors, and owners of more than 10% of Horizon
Common Stock are required to file reports of their ownership and changes in
ownership of Horizon Common Stock with the Securities and Exchange Commission.
Copies of these reports must also be furnished to Horizon. Based solely upon a
review of copies furnished to Horizon, through the date of this Proxy Statement,
or written representation that no reports were required, Horizon believes that
through 1999, all filing requirements of the Securities and Exchange Commission
applicable to Horizon's executive officers, directors and 10% shareholders
related to stock ownership were completed.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any shareholder who intends to present a proposal for action at Horizon's 2001
annual meeting of shareholders through the inclusion of such proposal in
Horizon's Proxy Statement relating to that meeting must furnish Horizon such
proposal in writing together with notification of such intention no later than
December 4, 2000, in order to be considered for inclusion in next year's Proxy
Statement. Any other matters requrested by a shareholder to be addressed,
although not included in the Proxy Statement, shall be considered untimely if
not presented in writing to Horizon by February 18, 2001.
14
<PAGE> 18
OTHER MATTERS
Management does not intend, and presently knows of no intention by any other
person, to present at the meeting any action by shareholders other than as set
forth herein. However, the enclosed proxy confers discretionary authority with
respect to the transaction of any other business that may properly come before
the meeting and it is the intention of the persons named in the proxy to vote in
their discretion on any such matter. Management is not aware of any other
matters to be presented at the meeting.
Insofar as any of the information in this Proxy Statement may rest peculiarly
within the knowledge of persons other than Horizon, Horizon relies upon
information furnished by others for the accuracy and completeness thereof.
WE STRONGLY URGE YOU TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT
THE EARLIEST POSSIBLE DATE EVEN THOUGH YOU PLAN TO ATTEND THE MEETING. IN THE
EVENT YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
/s/ Diana E. Taylor
Diana E. Taylor
Secretary/Treasurer
Michigan City, Indiana
April 3, 2000
AVAILABILITY OF FORM 10-K
A COPY OF HORIZON'S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN
REQUEST TO DIANA E. TAYLOR, CHIEF FINANCIAL OFFICER OF HORIZON, AT 515 FRANKLIN
SQUARE, MICHIGAN CITY, INDIANA 46360.
15
<PAGE> 19
PROXY HORIZON BANCORP
515 FRANKLIN SQUARE, MICHIGAN CITY, IN 46360
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, hereby appoints Mary McColl and Catherine Tempel, or either of
them, as Proxies, each with the power to appoint her substitute, and hereby
authorizes them to represent and to vote, as designated below, all shares of
common stock of Horizon Bancorp, which the undersigned is entitled to vote at
the Annual Meeting of Shareholders to be held on Thursday, May 4, 2000 at 10:00
a.m. (local time), at the Holiday Inn, 5820 S. Franklin Street, Michigan City,
Indiana, or any adjournment thereof, on the following matters:
1. Election of Three Directors
[ ] For all nominees listed below (except as marked to the contrary below)
[ ] Withhold authority to vote for all nominees listed below
Nominees for Terms to Expire in 2003:
Robert C. Dabagia, Bruce E. Rampage, and Spero W. Valavanis
(INSTRUCTION: To withhold authority to vote for any individual, write the
nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. In their discretion, on such other business as may properly be brought
before the Annual Meeting or any adjournment thereof.
ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING, THE PROXY WILL
BE VOTED IN ACCORDANCE WITH THE BEST JUDGEMENT OF THE ABOVE-STATED PROXIES.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS INDICATED, WILL BE VOTED FOR THE THREE NOMINEES STATED ABOVE.
Please sign on the reverse side thereof
<PAGE> 20
(Continued from other side)
Please sign exactly as name appears below. If there are two or more owners, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Date _______________________ , 2000
___________________________________
(Signature)
___________________________________
(Signature if held jointly)
Your vote is important. Please mark, sign,
date and return this Proxy promptly using the
enclosed envelope.
================================================================================
Please indicate your intentions of attending the meeting on May 4, 2000 by
completing the section below.
[ ] I WILL attend the Annual Meeting. [ ] I WILL NOT attend the Annual Meeting.
Number of Persons attending will be _______
