NOTICE OF
ANNUAL MEETING AND
PROXY STATEMENT
Annual Meeting of Shareholders
April 17, 1997
OLD NATIONAL BANCORP
<PAGE>
OLD NATIONAL BANCORP
420 MAIN STREET
EVANSVILLE, INDIANA 47708
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------------------------
TO OUR SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders of OLD
NATIONAL BANCORP (the "Company") will be held on Thursday, April 17, 1997, at
10:30 a.m., Evansville time, in the Vanderburgh Auditorium, 715 Locust Street,
Evansville, Indiana.
The Annual Meeting will be held for the following purposes:
1. ELECTION OF DIRECTORS. Election of a Board of Directors consisting of
sixteen Directors to serve for the ensuing year.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Ratification of the appointment of Arthur Andersen LLP, Indianapolis,
Indiana, as independent public accountants of the Company and its
affiliates for the fiscal year ending December 31, 1997.
3. OTHER BUSINESS. Such other matters as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on February 7, 1997, are
entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Jeffrey L. Knight
Secretary
March 10, 1997
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, WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
OLD NATIONAL BANCORP
420 MAIN STREET
EVANSVILLE, INDIANA 47708
PROXY STATEMENT
This Proxy Statement is furnished to the Shareholders of Old National
Bancorp (the "Company") in connection with the solicitation by the Board of
Directors of Proxies to be voted at the Annual Meeting of Shareholders of the
Company on Thursday, April 17, 1997 at 10:30 a.m., Evansville time, in the
Vanderburgh Auditorium, 715 Locust Street, Evansville, Indiana, and at any and
all adjournments of such meeting. A Notice of Annual Meeting of Shareholders
and form of Proxy accompany this Proxy Statement.
Any Shareholder giving a Proxy has the right to revoke it in person at the
meeting or by a written notice delivered to the Secretary of the Company, P.O.
Box 718, Evansville, Indiana 47705-0718, at any time before such Proxy is
exercised. All Proxies will be voted in accordance with the directions of the
Shareholder giving such Proxy. To the extent no directions are given, Proxies
will be voted "FOR" the election of the persons named as nominees in the Proxy
Statement as Directors of the Company and "FOR" the ratification of the
appointment of Arthur Andersen, LLP, as independent public accountants for the
Company and its affiliates. With respect to such other matters that may come
before the Annual Meeting, it is the intention of the persons named as Proxies
to vote in accordance with their best judgment.
The complete mailing address of the principal executive offices of the
Company is Old National Bancorp, P.O. Box 718, Evansville, Indiana 47705-0718.
The approximate date on which this Proxy Statement and form of Proxy for the
1997 Annual Meeting of Shareholders are first being sent or given to
Shareholders is March 10, 1997.
VOTING SECURITIES
Only the Shareholders of the Company of record at the close of business on
February 7, 1997, will be eligible to vote at the Annual Meeting or at any
adjournment thereof.
The voting securities of the Company entitled to be voted at the meeting
consist only of common stock, without par value, of which 26,825,190 shares were
issued and outstanding on the record date of February 7, 1997. All references
in this Proxy Statement to shares of common stock of the Company on the record
date have been adjusted to include the shares issued on January 29, 1997, in
connection with the Company's 5% stock dividend. The Company has no other class
of stock that is outstanding. Each Shareholder of record on the record date
will be entitled to one vote for each share of common stock registered in the
Shareholder's name.
The Company's three trust company subsidiaries held 3,787,874 shares of the
Company's common stock in regular, nominee or street name accounts on February
7, 1997, consisting of 14.1% of the Company's outstanding shares. Beneficial
ownership of shares so held is disclaimed by the Company. These shares are
voted by the respective trust companies in accordance with directions received
from the beneficial owners. To the knowledge of management, as of the record
date no Shareholder or affiliated group of Shareholders owns of record or
beneficially more than 5% of the outstanding shares of common stock of the
Company.
1
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ITEM 1. ELECTION OF DIRECTORS
The first item to be acted upon at the Annual Meeting of Shareholders will
be the election of sixteen Directors to the Board of Directors of the Company.
Each of the persons elected will serve a term of office for one year or until
the election and qualification of his or her successor.
If any Director nominee named in this Proxy Statement shall become unable
or decline to serve (an event which the Board of Directors does not anticipate),
the persons named as Proxies will have discretionary authority to vote for a
substitute nominee named by the Board of Directors if the Board determines to
fill such nominee's position. Unless authorization is withheld, the enclosed
Proxy will be voted "FOR" the election as Directors of all of the nominees
listed in this Proxy Statement.
Pages two and three contain the following information regarding each
Director nominee of the Company: name; principal occupation or business
experience for the last five years (for principal occupation for the last five
years of Directors who are also Executive Officers, see page 4); age; the year
in which the nominee first became a Director of the Company; the number of
shares of common stock of the Company beneficially owned by the nominee as of
February 7, 1997; and the percentage of outstanding shares owned as of February
7, 1997. The number of shares of common stock of the Company shown as being
beneficially owned by each Director nominee includes those over which he or she
has either sole or shared voting or investment power.
DAVID L. BARNING RICHARD J. BOND
- - INVESTOR - CHAIRMAN, SECURITY BANK
- - Age 63 & TRUST CO. (VINCENNES)
- - Director since 1982 - Age 63
- - 136,803 shares beneficially owned - Director since 1989
- - Owns .51% of outstanding shares - 43,738 shares beneficially owned
- Owns .16% of outstanding shares
ALAN W. BRAUN JOHN J. DAUS, JR.
- - PRESIDENT, INDUSTRIAL CONTRACTORS, - CHAIRMAN & CEO, ANCHOR
INC. (Construction) INDUSTRIES, INC. (Manufacturer
- - Age 52 of Canvas & Vinyl Products)
- - Director since 1988 - Age 69
- - 36,580 shares beneficially owned - Director since 1982
- - Owns .14% of outstanding shares - 81,009 shares beneficially owned
- Owns .30% of outstanding shares
2
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WAYNE A. DAVIDSON LARRY E. DUNIGAN
- - CONSULTANT AND FORMER - CHIEF EXECUTIVE OFFICER,
EXECUTIVE OFFICER OF BRISTOL- HOLIDAY MANAGEMENT COMPANY
MYERS SQUIBB COMPANY (Health Care & Long Distance
(Pharmaceuticals) Communication Services)
- - Age 65 - Age 54
- - Director since 1993 - Director since 1982
- - 19,241 shares beneficially owned - 108,986 shares beneficially owned
- - Owns .07% of outstanding shares - Owns .41% of outstanding shares
DAVID E. ECKERLE THOMAS B. FLORIDA
- - PRESIDENT & CEO, - PRESIDENT, D&K INVESTMENT CO.,
DUBOIS COUNTY BANK (JASPER) INC. (Real Estate Investments)
- - Age 53 - Age 68
- - Director since 1993 - Director since 1989
- - 85,383 shares beneficially owned - 16,436 shares beneficially owned
- - Owns .32% of outstanding shares - Owns .06% of outstanding shares
* Includes options to purchase 44,376
shares of the Company's Common Stock
PHELPS L. LAMBERT RONALD B. LANKFORD
- - MANAGING PARTNER, BUSH AND - PRESIDENT & COO, OLD NATIONAL
LAMBERT (Investments) BANCORP
- - Age 49 - Age 63
- - Director since 1990 - Director since 1994
- - 115,324 shares beneficially owned - 9,173 shares beneficially owned
- - Owns .43% of outstanding shares - Owns .03% of outstanding shares
LUCIEN H. MEIS LOUIS L. MERVIS
- - PRESIDENT, MEIS VENTURES, INC. - PRESIDENT, MERVIS INDUSTRIES,
(Financial Investments) INC. (Steel Fabricating)
- - Age 62 - Age 62
- - Director since 1985 - 634 shares beneficially owned *
- - 45,386 shares beneficially owned - Owns .002% of outstanding shares
- - Owns .17% of outstanding shares * The Mervis Charitable Remainder
Trust owns 16,536 shares of stock
of which Mr. Mervis disclaims
beneficial ownership.
DAN W. MITCHELL JOHN N. ROYSE
- - CHAIRMAN EMERITUS, OLD NATIONAL - CHAIRMAN & CEO, OLD NATIONAL
BANCORP BANCORP; CHAIRMAN, MERCHANTS
- - Age 69 NATIONAL BANK (TERRE HAUTE)
- - Director since 1982 - Age 63
- - 76,286 shares beneficially owned - Director since 1985
- - Owns .28% of outstanding shares - 169,513 shares beneficially owned
- Owns .63% of outstanding shares
MARJORIE Z. SOYUGENC CHARLES D. STORMS
- - PRESIDENT & CEO - PRESIDENT & CEO, RED SPOT PAINT &
WELBORN BAPTIST HOSPITAL VARNISH CO., INC. (Manufacturer
(Health Care) of Industrial Coatings)
- - Age 56 - Age 53
- - Director since 1993 - Director since 1988
- - 3,488 shares beneficially owned - 25,061 shares beneficially owned
- - Owns .01% of outstanding shares - Owns .09% of outstanding shares
The 22 Directors and Executive Officers as a group beneficially own 1,016,141
shares or 3.79% of the outstanding shares.
3
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EXECUTIVE OFFICERS OF THE COMPANY
The Executive Officers of the Company are listed in the table below. Each
officer serves a term of office of one year or until the election and
qualification of his successor.
NAME AGE OFFICE AND BUSINESS EXPERIENCE
- ---- --- ------------------------------
John N. Royse 63 Chairman of the Board and Chief Executive Officer
since January 1, 1995, Director since 1985,
President and Chief Operating Officer from 1991
to 1994, Executive Vice President from 1990 to
1991, and Senior Vice President of the Company
from 1985 to 1990. Chairman since 1987, and
President and Chief Executive Officer from 1979
to 1987 of Merchants National Bank (Terre Haute).
Ronald B. Lankford 63 President and Chief Operating Officer since
January 1, 1995, Director since 1994, Executive
Vice President from 1993 to 1994, and Senior Vice
President of the Company from 1991 to 1993.
President and Chief Executive Officer of Security
Bank and Trust Company (Vincennes) from 1990 to
1991. Senior Vice President of Old National Bank
(Evansville) from 1981 to 1989.
William R. Britt 49 Senior Vice President and Northern Regional
Executive of the Company since 1995. Chairman
since 1990 and President of Palmer American
National Bank (Danville) from 1990 to 1995.
Thomas F. Clayton 51 Senior Vice President of the Company since 1991.
President of Farmers Bank and Trust Company
(Madisonville) from 1987 to 1991.
Daryl D. Moore 39 Senior Vice President and Chief Credit Officer
since 1996 and Vice President and Chief Credit
Officer of the Company from 1995 to 1996.
Executive Vice President and Chief Credit Officer
from 1993 to 1995 and Senior Vice President and
Chief Credit Officer of Merchants National Bank
(Terre Haute) from 1991 to 1993.
Steve H. Parker 46 Senior Vice President and Chief Financial Officer
since 1990 and Vice President-Finance of the
Company from 1985 to 1990.
James A. Risinger 48 Senior Vice President of the Company since 1993.
Chairman since 1993, Chief Executive Officer
since 1992, President from 1991 to 1993 and
Executive Vice President of Old National Bank
(Evansville) from 1988 to 1991.
Jeffrey L. Knight 37 Corporate Secretary since 1994, and General
Counsel of the Company since 1993; previously,
General Manager, Pacific Press and Shear, Inc.
(Mt. Carmel)
4
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COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors include an Executive
Committee, an Audit Committee, a Compensation Committee, a Nominating Committee,
and a Personnel Committee.
When the Board is not in session, the Executive Committee has all of the
power and authority of the Board except with respect to amending the Articles of
Incorporation; adopting an agreement of merger or consolidation; recommending to
the shareholders the sale, lease or exchange of all or substantially all of the
Company's property and assets; recommending to the shareholders a dissolution of
the Company or a revocation of the dissolution; amending the Bylaws; the
declaration of a dividend; or the issuance of stock. The members of the
Executive Committee are John N. Royse (Chairman), Alan W. Braun, John J. Daus,
Jr., Wayne A. Davidson, Larry E. Dunigan, Ronald B. Lankford (Vice Chairman),
Lucien H. Meis, and Dan W. Mitchell (two other Directors rotate quarterly). The
Executive Committee held seven meetings during 1996.
The principal duties of the Audit Committee are to nominate the Independent
Public Accountants for appointment by the full Board of Directors; to meet with
the Independent Public Accountants to review and approve the scope of their
audit engagement and the fees related to such work; to meet with the Company's
financial management, internal audit management and Independent Public
Accountants to review matters relating to internal accounting controls, the
internal audit program, the Company's accounting practices and procedures and
other matters relating to the financial condition of the Company and its
affiliates; and to report to the Board periodically any conclusions or
recommendations the Audit Committee may have with respect to such matters. The
members of the Audit Committee are Larry E. Dunigan (Chairman), David L.
Barning, Alan W. Braun and Phelps L. Lambert. The Audit Committee held four
meetings during 1996. At the end of each meeting the members have the
opportunity to meet privately with the Company's Independent Public Accountants
with no officers or other personnel of the Company present.
The principal duties of the Compensation Committee are to review corporate
organizational structures; to review key employee compensation policies, plans
and programs; to monitor performance and establish compensation of officers of
the Company and other key employees; to prepare recommendations and periodic
reports to the Board concerning such matters; and to function as the Committee
administering the Company's Short Term Incentive Plan and Restricted Stock Plan.
The members of the Compensation Committee are Charles D. Storms (Chairman), John
J. Daus, Jr., Larry E. Dunigan, Thomas B. Florida, and Lucien H. Meis, none of
whom is an officer or employee of the Company or any affiliate. The
Compensation Committee met three times during 1996.
The function of the Nominating Committee is to seek out, evaluate and
recommend to the Board qualified nominees for election as Directors of the
Company, and to consider other matters pertaining to the size and composition of
the Board. The members of the Nominating Committee are John J. Daus, Jr.
(Chairman), David L. Barning, Larry E. Dunigan, Thomas B. Florida, Dan W.
Mitchell and Charles D. Storms. The Nominating Committee met one time in 1996.
The Nominating Committee will review suggestions of shareholders regarding
nominees for election as directors. All such suggestions of shareholders must
be submitted in writing to the Nominating Committee at the Company's principal
executive offices not less than 120 days in advance of the date of the annual or
special meeting of shareholders at which directors shall be elected. All
written
5
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suggestions of shareholders must set forth (i) the name and address of the
shareholder making the suggestion, (ii) the number and class of shares owned by
such shareholder, (iii) the name, address and age of the nominee for election as
director, (iv) the nominee's principal occupation during the five years
preceding the date of suggestion, (v) all other information concerning the
nominee as would be required to be included in the proxy statement used to
solicit proxies for the election of the nominee, and (vi) such other information
as the Nominating Committee may reasonably request. A consent of the nominee to
serve as a director of the Company, if elected, must also be included with the
written suggestion.
The function of the Personnel Committee is to review and approve changes in
the Company's employee benefit programs, plans and policies relating to
personnel issues. The members of the Personnel Committee are Alan W. Braun
(Chairman), David L. Barning, Richard J. Bond, Ronald B. Lankford, John N.
Royse, Marjorie Z. Soyugenc, and Charles D. Storms. The Personnel Committee met
four times during 1996.
MEETINGS OF THE BOARD OF DIRECTORS AND DIRECTOR FEES
The Board of Directors of the Company held five meetings during the fiscal
year ended December 31, 1996. All incumbent Directors attended 75% or more of
the aggregate of the 1996 meetings of the Board and of the Board Committees to
which they were appointed.
All Directors of the Company received an annual retainer of $5,000 for
serving as Directors. Directors not otherwise employed by the Company also
received $600 for each Board of Directors meeting attended and $500 for each
Committee meeting attended.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, composed of five
non-employee Directors, is responsible for establishing the base salary of the
Company's Executive Officers and for setting and administering the terms and
policies for the other components of the compensation of the Company's Executive
Officers. An independent compensation consultant, Hay Group, Inc., has been
retained by the Company since 1982 to advise the Compensation Committee on all
compensation matters.
COMPENSATION PRINCIPLES
The Committee believes the most effective executive compensation program is
one which provides incentives to achieve both current and longer-term strategic
management goals of the Company, with the ultimate objective of enhancing
shareholder value. In this regard, the Committee believes executive
compensation should be comprised of cash and equity-based programs which reward
performance not only as measured against the Company's specific annual and
long-term goals, but also which recognize the Company operates in a competitive
environment and that performance should be evaluated as compared to industry
peers. With respect to equity-based compensation, an integral part of the
Company's compensation program is the Restricted Stock Plan, which encourages
the ownership and retention of the Company's Common Stock by key employees. This
assures that employees have a meaningful stake in the Company, the ultimate
value of which is dependent on the Company's continued long-term success, and
that the interests of employees are thereby aligned with those of the
shareholders.
6
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The Company's executive compensation program is structured to help the
Company achieve its business objectives by:
. setting levels of compensation designed to attract and hold superior
executives in a highly competitive environment;
. providing incentive compensation that varies directly with both Company
financial performance and individual contribution to that performance;
. linking compensation to elements which affect short and long term stock
performance.
SALARIES
The Compensation Committee establishes the salaries of the Chairman and CEO
and the President and COO. The base salaries of the Company's next three
highest paid senior executive officers are determined by the Compensation
Committee with recommendations from the Chairman and President. The same
principles are applied in setting the salaries of all officers, including the
Chairman, and all administrative employees to ensure that salaries are fairly
and competitively established. Salaries are determined for each executive
position based upon survey data which is obtained from the Company's peer group
and from the Hay Group, Inc., the Company's independent compensation consultant.
The Company's peer group consists of reasonably comparable regional bank holding
companies. Peer group data is used rather than the NASDAQ Combined Financial
Index because the peer group companies resemble more closely the asset size and
operations of the Company. The Company uses the Hay Job Evaluation System to
measure each position against the knowledge and problem-solving ability required
to satisfactorily fulfill the position's assigned duties and responsibilities,
its accountability and impact on the operations and profitability of the
Company.
From survey data, salary ranges are established each year for the Chairman
and CEO and all other executive positions within the organization. These ranges
are designed so that fully competent performance will result in base salary
compensation approximating the average base salaries paid to comparable
positions across a broad spectrum of comparable companies. Within these
established ranges, actual base salary determinations are made periodically in
accordance with the guidelines of the Company's established performance review
system. In 1996, the base salaries awarded to the Executive Officers as a group
and the Chairman and CEO approximated the average base salaries paid to
executives in comparable positions in the Company's peer group. Continuous
outstanding performance over an extended period of time could result in a salary
at the top end of the established range whereas undistinguished performance
could result in compensation at the lower end of the range.
SHORT TERM INCENTIVE PLAN
The Company implemented a Short Term Incentive Plan (the STIP ) for
certain key officers in 1996. The STIP provides for the payment of additional
compensation contingent upon the achievement of certain corporate goals and the
participant's base salary. The corporate and shareholder-related goals are
intended to challenge management to achieve higher performance levels given the
facts and circumstances known to the Compensation
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Committee at the time the goals are established. At the beginning of each plan
year, participants establish individual goals which are linked to the Company's
business and strategic plans. The individual goals relate to the specific
business segments for which the participant has responsibility and are intended
to challenge the participants to perform beyond expected levels of performance.
In 1996, the Compensation Committee established a two-tiered incentive
matrix based on specific corporate and shareholder-related performance goals
relating to the Company's net income and earnings per share performance.
Participants were assigned to one of the two incentive matrices based upon their
level of responsibility and expected level of contribution to the Company's
achievement of its corporate goals. The incentive matrices used to determine
the amount of awards, based upon the Company's and participant's performances,
range from 10% to 45% of a participant's base salary. For 1996, the Company
exceeded its net income and earnings per share targets.
RESTRICTED STOCK AWARDS
Restricted Stock awards are determined by the Compensation Committee of the
Company. In 1996, 22,700 shares of common stock of the Company were earned by
all participants under the Restricted Stock Plan, including 6,034 which were
earned by the five most highly compensated executives. Shares of Restricted
Stock already held by the executive officers as a group and the Chairman and CEO
were not considered by the Committee in its 1996 award determination. The
amount of restricted stock awarded on an annual basis is based upon the
Company's net income and earnings per share performance for the fiscal year
compared to the goal established at the beginning of the fiscal year. In 1996,
the goal established by the Company was exceeded.
Each participant is granted an award opportunity, within a targeted range
expressed as a percentage of salary, based on the executive's position in the
organization, scope of responsibilities and expected contributions. Each fiscal
year the Company establishes threshold (minimum), target and maximum achievement
levels under the Restricted Stock Plan. If threshold performance is not
achieved, there is no payment from the plan for that period, and if performance
falls below certain levels, unvested shares can be fully or partially forfeited.
If performance exceeds the threshold, actual awards to participants will vary in
line with the performance achieved against the annual goals. In 1996, the
Chairman and CEO earned 100% of the Restricted Stock available to be awarded to
him since the Company exceeded its net income and earnings per share target
established by the Compensation Committee.
DISCUSSION OF 1996 COMPENSATION FOR THE CHAIRMAN AND CEO
Annually, the Compensation Committee receives an analysis from the
Company's Human Resources Department on all aspects of the Chairman and CEO's
remuneration, including base salary, incentive opportunity, and their
relationship to the comparative survey data. When appropriate, the Compensation
Committee conducts a base salary review. The Committee considers the
remuneration analysis in conjunction with the Company's overall performance as
measured by total shareholder return, adherence to the Company's strategic plan,
the development of sound management practices and the succession of skilled
personnel. These factors were considered by the Committee in evaluating an
increase in the Chairman and CEO's base salary in 1996.
8
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SUMMARY
In establishing executive compensation programs in the future, the
Compensation Committee will continue to focus not only on total shareholder
return but also on specific corporate goals designed to promote the overall
financial success of the Company, such as earnings per share and affiliate bank
performance which are expected to improve the return on shareholders' equity.
In 1996, the Compensation Committee consisted of the following Directors:
Charles D. Storms, Chairman
John J. Daus, Jr.
Larry E. Dunigan
Thomas B. Florida
Lucien H. Meis
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EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1996, 1995,
and 1994, the cash compensation paid by the Company and its affiliates, as well
as certain other compensation paid or accrued for those years, to the Chief
Executive Officer and each of the four most highly compensated executive
officers of the Company in all capacities in which they served.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
------------------- ------------
(a) (b) (c) (d)
Name
and Restricted All Other
Principal Position Year Salary Bonus Stock Award Compensation
------------------ ---- ------ ----- ----------- ------------
<S> <C> <C> <C> <C> <C>
John N. Royse 1996 $354,570 $119,216 $55,644 $31,911
Chairman and CEO 1995 292,006 0 42,477 26,281
1994 212,000 0 32,596 19,089
Ronald B. Lankford 1996 269,874 93,107 44,080 24,289
President and COO 1995 222,554 0 32,652 20,030
1994 163,567 0 31,101 14,790
Thomas F. Clayton 1996 172,568 57,133 34,728 14,991
Senior Vice President 1995 152,011 0 28,394 13,141
1994 142,000 0 22,136 11,778
Steve H. Parker 1996 186,869 66,793 35,815 16,116
Senior Vice President 1995 165,313 0 30,458 14,176
& CFO 1994 155,300 0 34,055 11,862
James A. Risinger 1996 201,578 73,858 39,260 18,142
Senior Vice President & 1995 179,006 0 35,141 16,111
Regional Executive 1994 168,000 0 37,216 15,129
</TABLE>
(a) Salary reflects base compensation and income recognized in the form of
Director fees paid by the Company or its affiliate banks during the
indicated calendar years.
(b) These amounts represent bonuses payable pursuant to the Company's Short
Term Incentive Plan (STIP) which is described on pages 7 and 8 of this
Proxy Statement.
(c) Restricted stock earned each year are based on the achievement of net
income and earnings per share targets and vest over a four year period.
The number and value of the total restricted stock available for future
vesting as of December 31, 1996, of the persons named are as follows:
John N. Royse - 2,626 shares, $95,193; Ronald B. Lankford - 2,153 shares,
$78,046; Thomas F. Clayton - 1,552 shares, $56,260; Steve H. Parker -
1,552 shares, $56,260; and James A. Risinger - 1,552 shares, $56,260.
Dividends are paid only on vested shares.
(d) All Other Compensation includes the following for Messrs. Royse,
Lankford, Clayton, Parker, and Risinger for 1996: (i) Company contribution
to the Profit Sharing Plan of $13,500 for each named executive; and (ii)
Company contribution to the Supplemental Deferred Compensation Plan of
$18,411, $10,789, $1,491, $2,616, and $4,642 respectively.
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RETIREMENT PLAN
The Old National Bancorp Employees' Retirement Plan (the "Retirement Plan")
is a qualified, defined benefit, non-contributory pension plan covering
substantially all employees of the Company and its affiliates with one or more
years of service with the Company or its affiliates, and with credited service
accruing from the date of employment provided the employee has not less than
1,000 hours of service (as defined in the plan) during such period.
The Retirement Plan provides for fixed benefits upon attainment of age 65.
As a normal form of benefit, each eligible employee is entitled to receive a
monthly pension for the participant's life based on length of service and
average base compensation (excluding bonuses and overtime) during the highest
paid five consecutive years of service. The standard retirement benefit for
married participants is payable in the form of a joint and survivor annuity in
an amount actuarially equivalent to the normal form of benefit. Participants may
also elect to receive a single sum settlement upon retirement instead of an
annuity. The formula for determining the amount of monthly pension is average
compensation multiplied by 1.45% for the first ten years of service, 1.65% for
the next ten years of service, and 1.95% for the next fifteen years of service,
less an amount related to Social Security earnings.
The amount of annual contribution attributable to specific individuals
cannot be determined in a meaningful manner. The following table shows the
estimated annual pensions payable to eligible employees upon retirement at age
65. The amounts shown do not make provisions for the reduction related to
Social Security earnings or for the survivor benefit features of the Retirement
Plan, the application of which would reduce the pensions payable.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
FINAL AVERAGE
SALARY YEARS OF SERVICE
- ------------- --------------------------------------------------------------------------------------------------
5 10 15 20 25 30 35 & Over
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 7,250 $14,500 $ 22,750 $ 31,000 $ 40,750 $ 50,500 $ 60,250
150,000 10,875 21,750 34,125 46,500 61,125 75,750 90,375
200,000 (1) 14,500 29,000 45,500 62,000 81,500 101,000 120,500 (1)
250,000 (1) 18,125 36,250 56,875 77,500 101,875 126,250 (1) 150,625 (1)
300,000 (1) 21,750 43,500 68,250 93,000 122,250 (1) 151,500 (1) 180,750 (1)
350,000 (1) 25,375 50,750 79,625 108,500 142,625 (1) 176,750 (1) 210,875 (1)
400,000 (1) 29,000 58,000 91,000 124,000 (1) 163,000 (1) 202,000 (1) 241,000 (1)
450,000 (1) 32,625 65,250 102,375 139,500 (1) 183,375 (1) 227,250 (1) 271,125 (1)
500,000 (1) 36,250 72,500 113,750 155,000 (1) 203,750 (1) 252,500 (1) 301,250 (1)
550,000 (1) 39,875 79,750 125,125 (1) 170,500 (1) 224,125 (1) 277,750 (1) 331,375 (1)
600,000 (1) 43,500 87,000 136,500 (1) 186,000 (1) 244,500 (1) 303,000 (1) 361,500 (1)
</TABLE>
(1) The law in effect at December 31, 1996, prohibited the distribution of
benefits from the Retirement Plan in excess of $120,000 per year expressed as a
straight life annuity. It also prohibited compensation in excess of $150,000 to
be used in the computation of the retirement benefit. Both amounts are indexed
for inflation.
11
<PAGE>
Officers and other employees who are on the administrative payroll are
covered by the Retirement Plan only for base salary. 1996 base salary figures
of the Chairman and CEO and the next four most highly compensated Executive
Officers of the Company are set forth in column (a) in the Summary Compensation
Table on page 10. The credited years of service as of December 31, 1996, for
each such executive officer are as follows: John N. Royse - 33; Ronald B.
Lankford - 40; Thomas F. Clayton - 26; Steve H. Parker - 11; and James A.
Risinger - 19.
For certain employees, other than the persons listed in the Summary
Compensation Table, whose annual retirement income benefit under the Retirement
Plan exceeds the limitations imposed by the Internal Revenue Code of 1986, as
amended, and the regulations thereunder (including, among others, the limitation
that annual benefits paid under qualified plans may not exceed $120,000), such
excess benefits will be paid from the Company's non-qualified, unfunded,
non-contributory supplemental retirement plan.
SEVERANCE AGREEMENTS
On January 1, 1992, the Company entered into severance agreements with
three of its executive officers, namely, John N. Royse, Thomas F. Clayton and
Steve H. Parker (collectively, the "Severance Agreements"). The Company entered
into an identical severance agreement with Ronald B. Lankford on January 1,
1994, James A. Risinger and William R. Britt on January 1, 1996, and Daryl D.
Moore on January 1, 1997. The Severance Agreements provide for one year
extensions by mutual agreement of the Company and the respective executives.
With respect to Messrs. Royse, Lankford, Britt, Clayton, Parker and Risinger,
each of their Severance Agreements was extended by the Board of Directors
through December 31, 1998.
Each executive is entitled to benefits under his Severance Agreement upon
any termination of the executive's employment by the Company (except for, and as
is more specifically described in each Severance Agreement, termination for
cause, disability, voluntary retirement or death), or upon a termination of
employment by the executive under certain circumstances specified in the
Severance Agreement, during the two-year period following a change in control
(as defined in the Severance Agreements) of the Company which occurs during the
term of the Severance Agreement.
In the event of a termination of employment, the executive will be entitled
to receive a lump sum cash payment equal to the aggregate of: his
then-effective base salary through the date of termination; all amounts due to
the executive under the Company's accrued vacation program through the date of
termination; and a certain amount under the Retirement Plan, as specified in the
Severance Agreement. In addition, the Company must pay to the executive in
semi-monthly payments over two years an amount equal to two times the average
annual base salary paid to him by the Company in the three years preceding the
date of termination. These payments may be suspended, or reduced, under certain
circumstances as defined in the Severance Agreements. The Severance Agreements
further require the Company to cause to be vested in each executive's name those
awarded but unearned shares held in the executive's account in the Restricted
Stock Plan and to maintain in force for two years following the date of
termination all employee welfare plans and programs in which the executive was
entitled to participate immediately prior to such termination date. The
foregoing discussion of the Severance Agreements does not purport to be complete
and is qualified in all respects by reference to each Severance Agreement.
12
<PAGE>
SHAREHOLDER RETURN PERFORMANCE COMPARISONS
The Company is required to include in this Proxy Statement a line graph
comparing cumulative five-year total shareholder returns for the Company s
common stock to cumulative total returns of a broad-based equity market index
and a published industry index. In past years, the Company has compared its
shareholder returns to the Standard & Poor's Composite Index and the Regional
Listed Bank Group Index. The Company now desires to compare shareholder returns
on its common stock to the Russell 2000 Index and the NASDAQ Combined Financial
Index. Accordingly, this year the performance graph includes all of the
foregoing Indices:
<TABLE>
<CAPTION>
TOTAL RETURN TO STOCKHOLDERS
(Assumes $100 investment on 12/31/91)
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Old National Bancorp $100 $119 $151 $153 $156 $189
Russell 2000 $100 $116 $136 $132 $166 $191
Nasdaq Comb Financial $100 $141 $159 $154 $221 $284
S&P 500 $100 $108 $118 $120 $165 $203
Bank Index $100 $118 $164 $161 $219 $304
</TABLE>
[PLOT POINTS TO COME MONDAY MORNING]
The comparison of shareholder returns (change in December year end stock
price plus reinvested dividends) for each of the periods assumes that $100 was
invested on December 31, 1991, in the common stock of each of the Company, the
Standard & Poor's Composite Index, the Regional Listed Bank Group Index, the
Russell 2000 and the NASDAQ Combined Financial Index, with investment weighted
on the basis of market capitalization.
The Company has determined to utilize the Russell 2000 Index rather than
the Standard & Poor's Composite Index because the Company was included in the
Russell 2000 Index beginning in 1996. The Company also has determined to
utilize the NASDAQ Combined Financial Index rather the Regional Listed Bank
Group Index because it believes the companies included in the NASDAQ Combined
Financial Index more closely resemble the Company in terms of asset size and
services offered than the companies included in the Regional Listed Bank Group
Index.
13
<PAGE>
The companies in the Listed Bank Industry Group are as follows: American
Bank of Connecticut, Amsouth Bancorporation, Baltimore Bancorp, Banco Bilbaro
Vizcaya SA ADS, Banco Central Hispanoamer ADR, Banco Comercial Portugues SA ADS,
Banco De Santander ADS, Bancorp Hawaii Inc., BancTexas Group Inc., Bank of San
Francisco Company, Barclays PLC ADS, BSD Bancorp Inc., Centura Banks Inc.,
Citizens First Bancorp Inc., Comerica Incorporated, Continental Bank
Corporation, Eldorado Bancorp, Firstar Corporation, First City Bancorp Inc.,
First Colony Corporation, First Commonwealth Financial Corp., First Empire State
Corporation, First Federal of Alabama FSB, First National Corp, First Virginia
Banks Inc., Guardian Bancorp, Hibernia Corporation, Hubco Inc., Keycorp,
Interchange Financial Services Corp, MNC Financial Inc., NAPA Valley Bancorp,
National Australia Bank LTD. ADR, National Westminster Bank PLC ADS, North Fork
Bancorporation Inc., Redwood Empire Bancorp, Republic New York Corporation,
Santa Monica Bank, Shawmut National Corp., Signet Banking Corporation, Southern
National Corporation, Sterling Bancorporation, UJB Financial Corp., Union
Planters Corporation, Westpac Banking LTD. ADS and Worthen Banking Corporation.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Officers and Directors of the Company are at present, as in the past,
customers of one or more of the Company's affiliate banks and have had and
expect in the future to have transactions with the affiliate banks in the
ordinary course of business. In addition, some of the Officers and Directors of
the Company are at present, as in the past, also officers, directors or
principal shareholders of corporations which are customers of these affiliate
banks and which have had and expect to have transactions with the affiliate
banks in the ordinary course of business. All such transactions were made in
the ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than normal
risk of collectibility or present other unfavorable features.
During 1996, the Company paid approximately $753,375 for engineering,
design and contruction services to Industrial Contractors, Inc. in connection
with its role as general contractor for renovations to the Old National Bank
Tower and in its role of installing data cabling and fibre optic networks. Alan
W. Braun, President of Industrial Contractors Inc., is a director of the
Company.
ITEM 2. RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors proposes for the ratification of the Shareholders at
the Annual Meeting the appointment of Arthur Andersen LLP, Indianapolis,
Indiana, certified public accountants, as Independent Public Accountants for the
Company and its affiliates for the fiscal year ending December 31, 1997.
Although ratification by the Shareholders of the Company's independent public
accountants is not required, the Company deems it desirable to continue its
established practice of submitting such selection to the Shareholders. Arthur
Andersen LLP, has served as Independent Public Accountants for the Company since
1982. In the event the appointment of Arthur Andersen LLP, is not ratified by
the Shareholders, the Board of Directors will consider appointment of other
independent public accountants for the fiscal year ending December 31, 1997. A
representative of Arthur Andersen LLP, will be present at the Annual Meeting and
will have the opportunity to make a statement or respond to any appropriate
questions that Shareholders may have.
14
<PAGE>
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals submitted by Shareholders to be presented at the 1998 Annual
Meeting must be received by the Company at its principal office no later than
November 5, 1997, to be considered for inclusion in the Proxy Statement and form
of Proxy relating to that meeting. Any such proposals should be sent to the
attention of the Secretary of the Company, P. O. Box 718, Evansville, Indiana
47705-0718.
VOTE REQUIRED
The nominees for election as Directors of the Company named in this Proxy
Statement will be elected by a plurality of the votes cast. Action on the other
items or matters to be presented at the meeting will be approved if the votes
cast in favor of the action exceed the votes cast opposing the action.
Abstentions or broker non-votes will not be voted for or against any items or
other matters presented at the meeting. Abstentions will be counted for purposes
of determining the presence of a quorum at the annual meeting, but broker
non-votes will not be counted for quorum purposes if the broker has failed to
vote as to all matters.
ANNUAL REPORT
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
SHAREHOLDER WHO DOES NOT OTHERWISE RECEIVE A COPY OF THE COMPANY'S ANNUAL REPORT
TO SHAREHOLDERS, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WHICH IS
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR
ENDED DECEMBER 31, 1996. ADDRESS ALL REQUESTS TO:
RONALD W. SEIB
VICE PRESIDENT AND CONTROLLER
OLD NATIONAL BANCORP
P. O. BOX 718
EVANSVILLE, INDIANA 47705-0718
15
<PAGE>
OTHER MATTERS
The Board of Directors of the Company does not know of any matters for
action by Shareholders at the Annual Meeting other than the matters described in
the accompanying Notice of Annual Meeting of Shareholders. However, the enclosed
Proxy will confer discretionary authority with respect to matters which are not
known to the Board of Directors at the time of the printing hereof and which may
properly come before the meeting. It is the intention of the persons named in
the Proxy to vote pursuant to the Proxy with respect to such matters in
accordance with their best judgment.
The cost of soliciting Proxies in the accompanying form will be borne by
the Company. In addition to solicitations by mail, Proxies may be solicited
personally by Directors and Officers of the Company and its subsidiaries, by
telephone or in person, but such persons will not be specially compensated for
their services. No solicitation will be made by specially engaged employees of
the Company or other paid solicitors.
It is important that Proxies be returned promptly. WHETHER OR NOT YOU
EXPECT TO ATTEND IN PERSON, SHAREHOLDERS ARE REQUESTED TO COMPLETE, SIGN AND
RETURN THEIR PROXIES IN ORDER THAT A QUORUM FOR THE MEETING MAY BE ASSURED.
Return may be made in the enclosed envelope, to which no postage need be
affixed.
By Order of the Board of Directors
JOHN N. ROYSE
Chairman
16
<PAGE>
OLD NATIONAL BANCORP
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF OLD NATIONAL BANCORP
The undersigned hereby appoints Robert R. Guenther and John A. Witting, and
each of them, as Proxies of the undersigned, each with power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
below, all the shares of common stock of OLD NATIONAL BANCORP held of record by
the undersigned on February 7, 1997, and which the undersigned would be entitled
to vote, at the Annual Meeting of Shareholders to be held on April 17, 1997, or
any adjournment thereof.
1. ELECTION OF DIRECTORS;
[ ] FOR ALL nominees listed below [ ] WITHHOLD AUTHORITY for all nominees
(except as marked to the
contrary below)
David L. Barning John J. Daus, Jr. David E. Eckerle
Richard J. Bond Wayne A. Davidson Thomas B. Florida
Alan W. Braun Larry E. Dunigan Phelps L. Lambert
Ronald B. Lankford Dan W. Mitchell Marjorie Z. Soyugenc
Lucien H. Meis John N. Royse Charles D. Storms
Louis L. Mervis
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
-------------------------------------------------------------
2. Ratify the appointment of Arthur Andersen LLP, Indianapolis, Indiana, as
Independent Public Accountants of OLD NATIONAL BANCORP and it subsidiaries
for the fiscal year ending December 31, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
FOLD HERE -------------------------------------------------------------FOLD HERE
DATE _____________________________ , 1997
Please sign below:
_________________________________________
(Signature of Shareholder)
_________________________________________
(Signature of Shareholder)
Joint owners should each sign personally.
Trustees and others signing in a
representative capacity should indicate
the capacity in which they sign.
_________________________________________
(Daytime Telephone Number)
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NOT OTHERWISE DIRECTED, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSITIONS LISTED ABOVE.
