[ONB Logo] Notice of
Annual Meeting and
Proxy Statement
Annual Meeting of Shareholders
April 16, 1998
[ONB Logo]
OLD NATIONAL BANCORP
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 16, 1998 at 10:30 a.m., Evansville time, in Roberts Municipal
Stadium, 2600 Division 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, 1998.
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 6,
1998, are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Jeffrey L. Knight
Secretary
March 9, 1998
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.
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 to be held on Thursday, April 16, 1998 at
10:30 a.m., Evansville time, in Roberts Municipal Stadium, 2600
Division 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 of the
Company and its affiliates for the fiscal year ending December 31,
1998. With respect to such other matters that may properly 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 office 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 1998 Annual Meeting of Shareholders are first being
sent or given to Shareholders of the Company is March 9, 1998.
VOTING SECURITIES
Only Shareholders of the Company of record at the close of business
on February 6, 1998, 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
Annual Meeting consist only of common stock, without par value, of
which 27,466,297 shares were issued and outstanding on the record date
of February 6, 1998. 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 of common stock issued on January 29, 1998, 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 3,779,738 shares
of the Company's common stock in regular, nominee or street name
accounts on February 6, 1998, consisting of 13.76% 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 of such shares. To the knowledge of management, as
of the record date, no Shareholder or affiliated group of Shareholders
owned of record or beneficially more than 5% of the outstanding shares
of common stock of the Company.
1
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, when properly
signed and returned, 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 four); 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
6, 1998; and the percentage that the shares beneficially owned
represents of the total outstanding shares of the Company as of
February 6, 1998. 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.
[Picture of David L. Barning] [Picture of Richard J. Bond]
DAVID L. BARNING RICHARD J. BOND
- Investor - Chairman, Security Bank
- Age 64 & Trust Co. (an Affiliate of
- Director since 1982 the Company)
- 144,800 shares - Age 64
beneficially owned - Director since 1989
- Owns .53% of - 46,043 shares
outstanding shares beneficially owned
- Owns .17% of
outstanding shares
[Picture of Alan W. Braun] [Picture of Wayne A. Davidson]
ALAN W. BRAUN WAYNE A. DAVIDSON
- President, Industrial - Consultant and former
Contractors, Inc. Executive Officer of
(Construction) Bristol- Myers Squibb Company
- Age 53 (Pharmaceuticals)
- Director since 1988 - Age 66
- 47,663 shares - Director since 1993
beneficially owned - 20,247 shares
- Owns .17% of beneficially owned
outstanding shares - Owns .07% of
outstanding shares
2
[Picture of Larry E. Dunigan] [Picture of Thomas B. Florida]
LARRY E. DUNIGAN THOMAS B. FLORIDA
- Chief Executive - President, D&K
Officer, Holiday Management Investment Co., Inc.
Company(Health Care & Long (Real Estate Investments)
Distance Communication Services) - Age 69
- Age 55 - Director since 1989
- Director since 1982 - 22,266 shares
- 114,433 shares beneficially owned
beneficially owned - Owns .08% of
- Owns .42% of outstanding shares
outstanding shares
[Picture of David E. Eckerle] [Picture of Phelps L. Lambert]
DAVID E. ECKERLE PHELPS L. LAMBERT
- President & CEO, - Managing Partner, Bush
Dubois County Bank (an and Lambert (Investments)
Affiliate of the Company) - Age 50
- Age 54 - Director since 1990
- Director since 1993 - 123,753 shares
- 89,643 shares beneficially owned
beneficially owned* - Owns .45% of
- Owns .33% of outstanding shares
outstanding shares
* Includes options to purchase 46,595
shares of the Company's Common Stock
[Picture of Ronald B. Lankford] [Picture of Louis L. Mervis]
RONALD B. LANKFORD LOUIS L. MERVIS
- President & COO, Old - President, Mervis
National Bancorp Industries, Inc.
- Age 64 (Steel Fabricating)
- Director since 1994 - Age 63
- 10,527 shares - Director since 1996
beneficially owned - 665 shares
- Owns .04% of beneficially owned *
outstanding shares - Owns .002% of
outstanding shares
* The Mervis Charitable
Remainder Trust owns 17,363
shares of common stock of
the Company with respect to
which Mr. Mervis disclaims
beneficial ownership.
[Picture of Lucien H. Meis] [Picture of Lawrence D. Prybil]
LUCIEN H. MEIS LAWRENCE D. PRYBIL
- President, Meis - Senior Vice President,
Ventures, Inc. Daughters of Charity
(Financial Investments) National Health
- Age 63 System-East Central
- Director since 1985 Region (Health Care)
- 48,099 shares - Age 57
beneficially owned - Nominated for initial term
- Owns .18% of - 262 shares
outstanding shares beneficially owned
- Owns .001% of
outstanding shares
[Picture of James A. Risinger] [Picture of John N. Royse]
JAMES A. RISINGER JOHN N. ROYSE
- Chairman & CEO, Old - Chairman, Merchants
National Bancorp; National Bank
Chairman, Old National (an Affiliate of the Company)
Bank (an Affiliate of - Age 64
the Company) - Director since 1985
- Age 49 - 181,544 shares
- Director since 1997 beneficially owned
- 17,116 shares - Owns .66% of
beneficially owned outstanding shares
- Owns .06% of
outstanding shares
[Picture of Marjorie Z. Soygenc] [Picture of Charles D. Storms]
MARJORIE Z. SOYUGENC CHARLES D. STORMS
- President & CEO - President & CEO, Red
Welborn Baptist Hospital Spot Paint & Varnish Co., Inc.
(Health Care) (Manufacturer of Industrial
- Age 57 Coatings)
- Director since 1993 - Age 54
- 3,853 shares - Director since 1988
beneficially owned - 26,684 shares
- Owns .01% of beneficially owned
outstanding shares - Owns .10% of
outstanding shares
The 21 Directors and Executive Officers as a group beneficially own
931,971 shares or 3.39% of the total outstanding shares.
3
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
James A. Risinger 49 Chairman of the Board and Chief Executive Officer
since January 1, 1998, Executive Vice President
and Director since 1997, and Senior Vice President
of the Company from 1993 to 1997.
Ronald B. Lankford 64 President and Chief Operating Officer since 1995,
Director since 1994, and Executive Vice President
of the Company from 1993 to 1994.
William R. Britt 50 Senior Vice President since 1996 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 52 Southern Regional Executive since 1997 and Senior
Vice President of the Company since 1991.
Daryl D. Moore 40 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 47 Senior Vice President and Chief Financial Officer
of the Company since 1990.
Jeffrey L. Knight 38 Corporate Secretary since 1994 and General
Counsel of the Company since 1993.
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 or By-Laws of the Company; approving 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 such dissolution;
declaring dividends; or authorizing the issuance or reacquisition of
shares. The permanent members of the Executive Committee are James A.
Risinger (Chairman), Richard J. Bond, Alan W. Braun, Wayne A.
Davidson, Larry E. Dunigan, Ronald B. Lankford (Vice Chairman), Lucien
H. Meis and John N. Royse. Board members who are not permanent members
of the Executive Committee rotate onto the Executive Committee a
minimum of two times during the year. The Executive Committee held
seven meetings during 1997.
4
The principal duties of the Audit Committee are to nominate the
Independent Public Accountants for appointment by the Board; 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 five meetings
during 1997. At the end of each meeting, the members of the Audit
Committee 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
current members of the Compensation Committee are Charles D. Storms
(Chairman), Larry E. Dunigan, Thomas B. Florida, Lucien H. Meis, and
Lawrence D. Prybil, none of whom is an officer or employee of the
Company or any affiliate. The Compensation Committee met two times
during 1997.
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
Charles D. Storms (Chairman), David L. Barning, Thomas B. Florida, and
Phelps L. Lambert. The Nominating Committee met one time in 1997.
Each year the Nominating Committee makes a recommendation to the entire
Board of Directors of nominees for election as Directors. The
Nominating Committee will review suggestions from shareholders
regarding nominees for election as Directors. All such suggestions
from shareholders must be submitted in writing to the Nominating
Committee at the Company's principal executive office 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
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 suggested 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 suggested nominee, and (vi) such other
information as the Nominating Committee may reasonably request. A
consent of the suggested 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, Marjorie Z. Soyugenc and Charles D. Storms. The Personnel
Committee met one time during 1997.
5
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, 1997. All incumbent Directors attended
75% or more of the aggregate of 1997 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 $750 for each Board of Directors meeting attended
and $500 for each Committee meeting attended. Directors serving as a
Committee Chairman received an additional annual retainer of $1,500.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed
of five non-employee Directors who are not eligible to participate in
any management compensation programs. The Committee is responsible
for establishing all compensation for the Company's Executive
Officers and for setting and administering the terms, policies and
agreements related to other compensation components for the Company's
Executive Officers. An independent compensation consulting firm, 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
long-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 that 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.
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 retain
superior executives in a highly competitive environment;
. providing incentive compensation that varies directly with both
Company financial performance and individual contribution to that
performance; and
. linking compensation to elements which affect short- and long-term
stock performance.
6
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 compensation principles are
applied in setting the salaries of all employees, including the
Chairman to ensure that salaries are fairly and competitively
established. Salary ranges 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 uses the Hay Job
Evaluation System to establish salary grades and ranges for each
position based on the knowledge and problem-solving ability required
to satisfactorily fulfill the position's assigned duties and
responsibilities, its accountability and the impact on the operations
and profitability of the Company. 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 peer group data is also used to
validate and affirm recommendations presented by the Hay Group.
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 the mid-point of the
salary range is approximately the average base salary paid to
comparable positions across a broad spectrum of comparable companies.
Within these established ranges, actual base salary adjustments are
made periodically in accordance with the guidelines of the Company's
salary administration program and performance review system. In
1997, the base salaries for the Executive Officers as a group and the
Chairman and CEO were within the average salary ranges 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 in the form of cash incentive payments
contingent upon the achievement of certain corporate goals and the
participant's achievement of certain individual performance goals.
In 1997, the Compensation Committee amended the Plan to provide for a
five-tiered incentive matrix based on specific corporate and
shareholder-related performance goals relating to the Company's
earnings per share performance, and in some cases, to the net income
performance of specific business units of the Company. Participants
were assigned to one of the five 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
an individual participant's performances, range from 7.5% to 45% of a
participant's base salary. The STIP incentive award opportunity for
the Chairman and CEO ranges from 15% to 45% of base salary.
Each fiscal year the Company establishes threshold (minimum),
target and maximum achievement levels under the STIP. If threshold
performance is not achieved, there is no payment from the plan for
7
that period, and if performance exceeds the threshold, actual
incentive payments to participants will vary with the actual
financial performance achieved compared to the Company's goals.
For 1997, the Company failed to meet its minimum earnings per share
performance level, so there was no payout for the Chairman and CEO and
some Executive Officers under the STIP. Two Executive
Officers earned a payout under the STIP in 1997 because the net
income of specific business units over which they were responsible
exceeded the threshold level for a payout under the STIP. (See
Summary Compensation Table on page 10).
The corporate and shareholder-related goals are intended to
challenge the Company's management to achieve higher performance
levels given the facts and circumstances known to the Compensation
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.
Restricted Stock Awards
Restricted stock awards are determined by the Compensation
Committee of the Company. Awarded shares vest over a four year
period. In 1997, 46,940 shares of common stock of the Company were
awarded under the Restricted Stock Plan, including 1,505 shares which
were earned by the five most highly compensated Executive Officers.
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 1997 award determination. Generally, the amount of restricted
stock earned by Executive Officers on an annual basis under the
plan is based upon the Company's earnings per share
performance for the fiscal year compared to the goal established at
the beginning of the fiscal year. In most cases the Executive
Officers' restricted stock earned awards are based upon the Company's
earning per share performance. In a limited number of instances, the
restricted stock earned awards are based upon the net income
performance of the specific business units over which the Executive
Officers are responsible. In 1997, the earnings per share goal
established by the Company was not achieved, so there was no
restricted stock payout to the Chairman and CEO and certain other
Executive Officers under the plan. Mr. Risinger's award
was based upon the net income performance of a specific business unit
of the Company in 1997. (See Summary Compensation Table on page 10).
Each participant is granted a restricted stock award opportunity
based on the executive's position in the organization and scope of
responsibilities. Each fiscal year the Company establishes threshold
(minimum), target and maximum performance 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 level, actual awards to participants
will vary with the actual performance achieved compared to the annual
goals. A participant can earn up to 150% of their base award. In
1997, the Chairman and CEO did not earn any of the restricted stock
available to be awarded to him since the Company did not meet its
earnings per share target established by the Compensation Committee.
8
Discussion of 1997 Compensation for the Chairman and CEO
Annually, the Compensation Committee receives an analysis from
the Company's Vice President, Director of Human Resources, on all
aspects of the Chairman and CEO's remuneration, including base
salary, incentive opportunity, and the relationship of total
compensation to the comparative survey data. When appropriate, the
Compensation Committee may direct the Vice President, Director of
Human Resources, to compile additional compensation information and
comparisons. The Committee considers several factors in establishing
the Chairman and CEO's compensation package. These include 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 development of a management
succession plan. These factors were considered by the Committee in
evaluating an increase in the Chairman and CEO's base salary in 1997.
Summary
The Committee has determined that Old National Bancorp's
Executive Compensation programs, plans and awards are well within
conventional standards of reasonableness and competitive necessity
and are clearly within industry norms and practices.
In establishing executive compensation programs in the future,
the Compensation Committee will continue to focus on specific
corporate goals designed to promote the overall financial success of
the Company, such as earnings per share and affiliate performance,
which are expected to improve the return on shareholders' equity.
In 1997, 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
9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31, 1997, 1996,
and 1995, 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 next four most highly compensated Executive
Officers of the Company in all capacities in which they served.
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
(a) (b) (c) (d)
Name
and Restricted All Other
Principal Position Year Salary Bonus Stock Awards Compensation
John N. Royse* 1997 $417,010 $0 $128,154 $37,531
Chairman and CEO 1996 354,570 119,216 55,644 31,911
1995 292,006 0 42,477 26,281
Ronald B. Lankford 1997 $316,707 $0 $48,965 $28,504
President and COO 1996 269,874 93,107 44,080 24,289
1995 222,554 0 32,652 20,030
Thomas F. Clayton 1997 $197,006 $27,121 $36,363 $17,191
Senior Vice President 1996 172,568 57,133 34,583 14,991
1995 152,011 0 28,394 13,141
Steve H. Parker 1997 $198,206 $0 $36,363 $17,191
Senior Vice President 1996 186,869 66,793 35,670 16,116
& CFO 1995 165,313 0 30,458 14,176
James A. Risinger* 1997 $215,911 $50,804 $53,894 $20,908
Executive Vice President 1996 201,578 73,858 48,684 18,142
& Regional Executive 1995 179,006 0 35,141 16,111
(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 Shares awarded each year are based on the achievement of
earnings or earnings per share goals and vest over a four year period. The
shares itemized in this column (c) reflect the value of earned shares that
have vested in 1997 that are no longer subject to forfeiture under the
plan. The number and value of the total restricted stock awarded for
vesting and still subject to partial forfeiture as of December 31, 1997 to
the persons named are as follows:John N. Royse 0 shares, $0; Ronald B.
Lankford 1,209 shares, $56,219; Thomas F. Clayton 847 shares, $39,386;
Steve H. Parker 847 shares, $39,386; and James A. Risinger 1,975 shares,
$91,838. Dividends are paid only on vested shares. See page 8 for a
full discussion of the Restricted Stock Plan.
(d) All other Compensation includes the following for Messrs. Royse,
Lankford, Clayton, Parker and Risinger for 1997: (i) Company contribution
to the Profit Sharing Plan of $14,400, for each named executive; and (ii)
Company contribution to the Supplemental Deferred Compensation Plan of
$23,131, $14,104, $2,791, $2,791, and $6,508, respectively.
* As of January 1, 1998, Mr. Royse retired as Chairman and CEO and Mr.
Risinger became Chairman and CEO of the Company.
10
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 that the employee has not less than 1,000 hours of
service (as defined in the plan) during such period.
The Retirement Plan provides for the payment of monthly benefits
in a fixed amount upon attainment of age 65. As a normal form of
benefit, each eligible participant is entitled to receive a monthly
pension for the his or her life based on years of service and "average
monthly compensation" (which excludes bonuses and overtime). In
general, the formula for determining the amount of a participant's
monthly pension is average monthly 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 any
amount related to Social Security earnings. In general, the amount of
the reduction is .59% of average monthly compensation (up to a maximum
of 125% of covered compensation) multiplied by all years of service up
to 35 years of service. The standard retirement benefit for married
participants is payable in the form of a joint and survivor annuity in
an amount which is actuarially equivalent to the normal form of
benefit. Instead of an annuity, participants may elect to receive a
single sum cash settlement upon retirement in an amount which is
actuarially equivalent to the participant's normal form of benefit.
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 reflect any
reduction related to Social Security earnings or for the survivor
benefit features of the Retirement Plan, the application of which would
reduce the amount of pension payable.
<TABLE>
<CAPTION>
Pension Plan Table
Final Average
Salary Years of Service
5 10 15 20 25 30 35 & Over
<C> <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
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 93,000 122,250 151,500(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 91,000 124,000 163,000(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)
(1) The law in effect at December 31, 1997 prohibited the distribution
of benefits from the Retirement Plan in excess of $125,000 per year
expressed as a straight life annuity. It also prohibited compensation
in excess of $160,000 to be used in the computation of the retirement
benefit. Both amounts are indexed for inflation.
</TABLE>
11
1997 base salary figures for 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, 1997, for each such
Executive Officer are as follows: John N. Royse - 34; Ronald B.
Lankford - 41; Thomas F. Clayton - 27; Steve H. Parker - 12; and James
A. Risinger - 20.
For certain employees, in addition to 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 defined benefit pension plans may not
exceed $125,000) such excess benefits will be paid from the
Company's non-qualified, unfunded, non-contributory supplemental
retirement plan.
Change of Control Severance Agreements
The Company has entered into severance agreements with Messrs.
William R. Britt, Thomas F. Clayton, Daryl D. Moore, Steve H. Parker,
and James A. Risinger. 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
his severance agreement, during the one-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 his severance agreement. In addition,
the Company must pay to the executive in a lump sum cash payment 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. The
severance agreements further require the Company to cause to be vested
in each executive's name those awarded but unvested shares held in the
executive's account in the Restricted Stock Plan, all amounts due the
executive under the Company's Short Term Incentive 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. 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.
The severance agreements provide for one year extensions by mutual
agreement of the Company and the respective executives. With respect
to Messrs. Britt, Clayton, Moore, Parker and Risinger, each of their
severance agreements was extended by the Board of Directors in 1997
through December 31, 1999.
12
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. The following
indexed graph compares the performance of the Company's common stock
for the past five years to the Russell 2000 Index and the NASDAQ
Combined Financial Index.
<TABLE>
<CAPTION>
TOTAL RETURN TO STOCKHOLDERS
(Assumes $100 investment on 12/31/92)
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Old National Bancorp $100 $127 $129 $132 $160 $211
Russell 2000 $100 $117 $113 $143 $164 $198
Nasdaq Comb Financial $100 $113 $109 $157 $202 $317
</TABLE>
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, 1992, in common stock of each of
the Company, the Russell 2000 and the NASDAQ Combined Financial Index,
with investment weighted on the basis of market capitalization.
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 similar 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, 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, 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 the normal
risk of collectibility or present other unfavorable features.
13
During 1997, the Company paid approximately $1,148,898 for
engineering, design and construction services to Industrial
Contractors, Inc. in connection with its role as general contractor for
renovations to the Old National Bank Tower and construction of an Old
National Bank branch in Princeton, Indiana, and in its role of
installing data cabling and fibre optic networks in certain affiliate
locations. 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 the ratification by the Shareholders
at the Annual Meeting of 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, 1998. 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, 1998. 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.
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
Proposals submitted by Shareholders to be presented at the 1999
Annual Meeting must be received by the Company at its principal
executive office no later than November 7, 1998, 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 Annual
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.
14
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, 1997. ADDRESS ALL
REQUESTS TO:
RONALD W. SEIB
VICE PRESIDENT AND CONTROLLER
OLD NATIONAL BANCORP
P. O. BOX 718
EVANSVILLE, INDIANA 47705-0718
OTHER MATTERS
The Board of Directors of the Company does not know of any matters
for action by Shareholders at the 1998 Annual Meeting other than the
matters described in the accompanying Notice of Annual Meeting of
Shareholders. However, the enclosed Proxy will confer upon the named
Proxies 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 Annual Meeting. It is the intention
of the persons named as Proxies 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 solicitations 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 the Annual Meeting 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
JAMES A. RISINGER
Chairman
15
OLD NATIONAL BANCORP
PROXY SOLIDITED 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, individually, 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 6, 1998, and which the undersigned
would be entitled to vote, at the Annual Meeting of Shareholders to be held on
April 16, 1998, or any adjournment thereof.
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS:
<C> <C> <C> <C>
01-David L. Barning 05-Larry E. Dunigan 09-Ronald B. Lankford 13-James A. Risinger
02-Richard J. Bond 06-David E. Eckerle 10-Lucien H. Meis 14-John N. Royse
03-Alan W. Braun 07-Thomas B. Florida 11-Louis L. Mervis 15-Marjorie Z. Soyugenc
04-Wayne A. Davidson 08-Phelps L. Lambert 12-Lawrence D. Prybil 16-Charles D. Storms
</TABLE>
2. Ratification of the appointment of Arthur Andersen LLP, Indianapolis, Indiana
as Independent Public Accountants of OLD NATIONAL BANCORP and its
subsidiaries for the fiscal year ending December 31, 1998.
NOTE: The Proxies are authorized to vote upon such other business as may
properly come before the Annual Meeting.
- -----------------------------Detach here and fold----------------------------
OLD NATIONAL BANCORP
PROXY
This Proxy will be voted as directed, but if not otherwise directed, this Proxy
will be voted "FOR" the items listed below.
(Mark "X" for only one box.)
1. [ ] FOR ALL NOMINEES
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES
[ ] WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE. WRITE NUMBER(S)
OF NOMINEE(S) BELOW.
USE NUMBER ONLY
--------------------------------
2. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- ---------------------------------------------------
Signature(s) Date
- ---------------------------------------------------
Signature(s) Date
Joint owners should each sign personally. Trustees, corporate officers, and
others signing in a representative capacity should indicate the capacity in
which they sign.
- ---------------------------------------------------
(Daytime Telephone Number)
