<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Old National Bancorp
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[OLD NATIONAL BANCORP LOGO]
NOTICE OF
ANNUAL MEETING AND
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 20, 2000
<PAGE> 3
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 20, 2000 at
10:30 a.m., Evansville time, at The Centre, 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. INCREASE AUTHORIZED SHARES. Approval of the Amendment to Article V of
the Articles of Incorporation to increase the number of authorized
shares of common stock of the Company from 75,000,000 to 150,000,000.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Ratification of the appointment of PricewaterhouseCoopers LLP, as
independent public accountants of the Company and its affiliates for the
fiscal year ending December 31, 2000.
4. OTHER BUSINESS. Such other matters as may properly come before the
meeting or any adjournments thereof.
Shareholders of record at the close of business on February 14, 2000, are
entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Jeffrey L. Knight
Corporate Secretary
March 14, 2000
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> 4
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 20, 2000 at 10:30 a.m., Evansville time,
at The Centre, 715 Locust Street, Evansville, Indiana, and at any and all
adjournments or postponements 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 Corporate 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, "FOR" approval of the amendment to
the Company's Articles of Incorporation discussed herein and "FOR" the
ratification of the appointment of PricewaterhouseCoopers LLP as independent
public accountants of the Company and its affiliates for the fiscal year ending
December 31, 2000. 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
2000 Annual Meeting of Shareholders are first being sent or given to
Shareholders of the Company is March 14, 2000.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only Shareholders of the Company of record at the close of business on
February 14, 2000, will be eligible to vote at the Annual Meeting or at any
adjournment or postponements 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 46,832,593
shares were issued and outstanding on the record date of February 14, 2000. 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 28, 2000, in connection with the Company's 5% stock dividend and also
include the shares of common stock issued on May 24, 1999 in connection with the
Company's 3 for 2 stock split. 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.
As of February 14, 2000, to the knowledge of the Company, no person or firm
other than the Company beneficially owned more than 5% of the common stock of
the Company outstanding on that date. As of February 14, 2000, no individual
director, nominee, or officer beneficially owned more than 5% of the common
stock of the Company outstanding.
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<PAGE> 5
As of February 14, 2000, to the knowledge of the Company, only the Company
beneficially owned more than 5% of the outstanding common stock of the Company.
The Company owned 6,148,561 shares of common stock of the Company which
constituted 13.13% of the outstanding common stock of the Company on that date.
These shares are held in various fiduciary capacities through the Company's
wholly-owned trust companies. Neither the Company, nor any of its subsidiaries
or affiliates, has voting authority as to any of the shares of common stock of
the Company beneficially owned by it, except as may be provided by law with
respect to the shares held by the Employee Stock Ownership Plan. (See "Executive
Compensation and Other Information-Employee Stock Ownership Plan" on pages 15
and 16 of this Proxy Statement.) Of the 5,396,000 shares as to which the
Company, through its subsidiaries and affiliates, has investment authority, it
has sole investment authority as to all of the shares.
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<PAGE> 6
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 four through six 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 seven); 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 14, 2000; and the percentage that the shares beneficially owned
represent of the total outstanding shares of the Company as of February 14,
2000. 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.
<TABLE>
<S> <C> <C>
[DAVID L. BARNING [RICHARD J. BOND
PHOTO] PHOTO]
DAVID L. BARNING RICHARD J. BOND
- - CHAIRMAN, OHIO -COMMUNITY CHAIRMAN,
VALLEY WIRELESS OLD NATIONAL BANK,
(Cable TV and VINCENNES, INDIANA
Internet Services) - Age 66
- - Age 66 - Director since
- - Director since 1989
1982 - 79,610 shares
- - 234,718 shares beneficially owned
beneficially owned - Owns .17% of
- - Owns .50% of outstanding shares
outstanding shares
[ALAN W. BRAUN [WAYNE A. DAVIDSON
PHOTO] PHOTO]
ALAN W. BRAUN WAYNE A. DAVIDSON
- -PRESIDENT, - RETIRED
INDUSTRIAL - Age 68
CONTRACTORS, INC. - Director since
(Construction) 1993
- - Age 55 - 33,820 shares
- - Director since beneficially owned
1988 - Owns .07% of
- - 108,567 shares outstanding shares
beneficially owned
- - Owns .23% of
outstanding shares
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C> <C>
[LARRY E. DUNIGAN [DAVID E. ECKERLE [ANDREW E. GOEBEL
PHOTO] PHOTO] PHOTO]
LARRY E. DUNIGAN DAVID E. ECKERLE ANDREW E. GOEBEL
- - CHIEF EXECUTIVE -COMMUNITY CHAIRMAN, - PRESIDENT & CEO,
OFFICER, HOLIDAY OLD NATIONAL BANK, SOUTHERN INDIANA
MANAGEMENT COMPANY JASPER, INDIANA GAS & ELECTRIC
(Long Distance - Age 56 COMPANY (Utility)
Communication & - Director since - Age 52
Internet Services) 1993 - Nominated for
- - Age 57 - 89,602 shares initial term
- - Director since beneficially owned - 2,372 shares
1982 - Owns .19% of beneficially owned
- - 225,910 shares outstanding shares - Owns .005% of
beneficially owned outstanding shares
- - Owns .48% of
outstanding shares
[PHELPS L. LAMBERT [RONALD B. LANKFORD [LUCIEN H. MEIS]
PHOTO] PHOTO] LUCIEN H. MEIS
PHELPS L. LAMBERT RONALD B. LANKFORD -PRESIDENT, MEIS
- - MANAGING PARTNER, -RETIRED PRESIDENT & VENTURES, INC.
BUSH AND LAMBERT COO, OLD NATIONAL (Financial
(Investments) BANCORP Investments)
- - Age 52 - Age 66 - Age 65
- - Director since - Director since - Director since
1990 1994 1985
- - 253,863 shares - 29,956 shares - 80,954 shares
beneficially owned beneficially owned beneficially owned
- - Owns .54% of - Owns .06% of - Owns .17% of
outstanding shares outstanding shares outstanding shares
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C> <C>
[LOUIS L. MERVIS [JAMES A. RISINGER [JOHN N. ROYSE
PHOTO] PHOTO] PHOTO]
LOUIS L. MERVIS JAMES A. RISINGER JOHN N. ROYSE
- -PRESIDENT, MERVIS -CHAIRMAN, PRESIDENT - RETIRED CHAIRMAN,
INDUSTRIES, INC. & CEO, OLD OLD NATIONAL
(Steel NATIONAL BANCORP; BANCORP
Fabricating) CHAIRMAN, - Age 66
- - Age 65 PRESIDENT & CEO, - Director since
- - Director since OLD NATIONAL BANK 1985
1996 (an Affiliate of - 270,628 shares
- - 1,099 shares the Company) beneficially owned
beneficially owned - Age 51 - Owns .58% of
* - Director since outstanding shares
- - Owns .002% of 1997
outstanding shares - 35,870 shares
beneficially owned
- Owns .08% of
outstanding shares
[MAJORIE Z. [KELLY N. STANLEY [CHARLES D. STORMS
SOYUGENIC PHOTO] PHOTO] PHOTO]
MARJORIE Z. SOYUGENC KELLY N. STANLEY CHARLES D. STORMS
- -EXECUTIVE DIRECTOR, -PRESIDENT & CEO, -PRESIDENT & CEO,
WBH EVANSVILLE, ONTARIO CORPORATION RED SPOT PAINT &
INC., WELBORN Diversified VARNISH CO., INC.
FOUNDATION, INC. Technology/ (Manufacturer of
AND WELBORN BAPTIST Manufacturing Industrial
FOUNDATION, INC. Company) Coatings)
(Charity) - Age 56 - Age 56
- - Age 59 - Nominated for - Director since
- - Director since initial term 1988
1993 - 14,272 shares - 47,225 shares
- - 7,123 shares beneficially owned beneficially owned
beneficially owned - Owns .03% of - Owns .10% of
- - Owns .02% of outstanding shares outstanding shares
outstanding shares
</TABLE>
The 22 Directors and Executive Officers of the Company as a group
beneficially own 1,603,689 shares or 3.42% of the total outstanding shares.
- ---------------
* The Mervis Charitable Remainder Trust and the Ellen Joy Mervis Trust own
34,547 shares of common stock of the Company with respect to which Mr. Mervis
disclaims beneficial ownership.
5
<PAGE> 9
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.
<TABLE>
<CAPTION>
NAME AGE OFFICE AND BUSINESS EXPERIENCE
- ---- --- ------------------------------
<S> <C> <C>
James A. Risinger 51 President of the Company since January 27, 2000, Chairman of
the Board and Chief Executive Officer since 1998, Director
since 1997, Executive Vice President from 1997 to 1998, and
Senior Vice President from 1993 to 1997.
William R. Britt 52 Senior Vice President of the Company since 1996 and Northern
Regional Executive of the Company since 1995. Currently,
Community President of Old National Bank, Terre Haute,
Indiana. Chairman of Palmer American National Bank
(Danville) 1990 to 1999, and President from 1990 to 1995.
Thomas F. Clayton 54 Executive Vice President of the Company since January 27,
2000, Southern Regional Executive from 1997 to 2000, and
Senior Vice President from 1991 to 2000.
Daryl D. Moore 42 Senior Vice President and Chief Credit Officer of the
Company since 1996 and Vice President and Chief Credit
Officer from 1995 to 1996. Executive Vice President and
Chief Credit Officer of Merchants National Bank (Terre
Haute) from 1993 to 1995.
David E. Eckerle 56 Senior Vice President of the Company since January 27, 2000,
Central Regional Executive since 1995 and Director since
1993. Currently, Community Chairman of Old National Bank,
Jasper, Indiana.
Michael R. Hinton 45 Executive Vice President of the Company since January 27,
2000, President of Old National Bank (Evansville) from 1993
to 2000.
John S. Poelker 57 Executive Vice President of the Company since January 27,
2000, Senior Vice President from 1998 to 2000, and Chief
Financial Officer since 1998. Previously, Chief Financial
Officer of American General Finance from 1996 to 1998, and
Chairman and CEO of Fleet Finance from 1993 to 1996.
Jeffrey L. Knight 40 Corporate Secretary of the Company since 1994 and General
Counsel since 1993.
</TABLE>
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
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<PAGE> 10
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, Lucien H. Meis and John N. Royse. The Executive Committee held six
meetings during 1999.
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 Alan
W. Braun (Chairman), David L. Barning, Larry E. Dunigan and Phelps L. Lambert.
The Audit Committee held four meetings during 1999. 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, Restricted Stock Plan,
1999 Equity Incentive Plan, Pension Restoration Plan and Deferred Compensation
Plan. The current members of the Compensation Committee are Charles D. Storms
(Chairman), Larry E. Dunigan, and Lucien H. Meis, none of whom is an officer or
employee of the Company or any affiliate. The Compensation Committee met four
times during 1999.
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, Larry E. Dunigan, and Phelps L. Lambert. The
Nominating Committee met one time in 1999. All nominations for election as
Directors of the Company shall be made only by the Board of Directors in
accordance with the Company's By-Laws. 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 Marjorie Z.
Soyugenc (Chairman), David L. Barning,
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<PAGE> 11
Richard J. Bond, Alan W. Braun, Ronald B. Lankford, James A. Risinger, and
Charles D. Storms. The Personnel Committee met two times during 1999.
MEETINGS OF THE BOARD OF DIRECTORS
AND DIRECTOR FEES
The Board of Directors of the Company held eight meetings during the fiscal
year ended December 31, 1999. All incumbent Directors attended 75% or more of
the aggregate of the 1999 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 currently composed
of three 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. In April
1999, Old National Bancorp shareholders adopted an Equity Incentive Plan, which
authorizes the Compensation Committee to grant Incentive and Non-Qualified Stock
Options in addition to other forms of equity compensation. The Committee did not
issue any stock option grants in 1999. It is the Committee's intent to issue
Non-Qualified Stock Option grants in 2001. The equity-based compensation plans
ensure 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.
8
<PAGE> 12
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.
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 a relevant 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. Relevant peer group data is used rather than the NASDAQ
Bank 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 1999, 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 with Companies 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 achievement of certain business
performance goals. The Plan provides for a seven-tiered incentive matrix based
on specific corporate and shareholder-related performance goals relating to the
Company's net income performance. Participants were assigned to one of the seven
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,
9
<PAGE> 13
range from 7.5% to 82.5% of a participant's base salary. The STIP incentive
award opportunity for the Chairman and CEO ranges from 27.5% to 82.5% of base
salary.
Each fiscal year the Compensation Committee 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 that period, and if
performance exceeds the threshold, actual incentive payments to participants
will vary with the actual financial performance achieved compared to the
Compensation Committee's goals. For 1999, the Company exceeded the established
net income target, resulting in a payout to participating officers above the
"target" level under the STIP. (See Summary Compensation Table on page 13).
RESTRICTED STOCK AWARDS
Restricted stock awards are determined by the Compensation Committee.
Awarded shares vest over a four year period. In 1999, a total of 63,258 shares
of common stock of the Company were awarded under the Restricted Stock Plan,
including 23,850 shares which were awarded to 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
Compensation Committee in its 1999 award determination. The amount of restricted
stock earned by Executive Officers on an annual basis under the plan is based
upon the Company's net income performance for the fiscal year compared to the
target level established at the beginning of the fiscal year. In 1999, the net
income goal established by the Compensation Committee was exceeded. However, the
payout to participating officers was at the "target" level under the plan
because the Company did not exceed the "target" by more than 3%. (See Summary
Compensation Table on page 13).
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 Compensation Committee 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. Participants can earn up to 150% of their base award. In 1999, the
Chairman and CEO earned 100% of the restricted stock available to be awarded to
him even though the Company exceeded its net income target level established by
the Compensation Committee because the Company did not exceed the net income
"target" by more than 3%.
DISCUSSION OF 1999 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
1999.
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<PAGE> 14
SUMMARY
The Committee has determined that Old National Bancorp's Executive
Compensation programs, plans and awards for 1999 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 1999, the Compensation Committee consisted of the following Directors:
Charles D. Storms, Chairman
Larry E. Dunigan
Lucien H. Meis
Lawrence D. Prybil
11
<PAGE> 15
EXECUTIVE COMPENSATION AND
OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1999,
1998, and 1997, 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
<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION COMPENSATION
-------------------- ------------
(C) (D)
(A) (B) RESTRICTED ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK AWARDS COMPENSATION
- --------------------------- ---- ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
James A. Risinger*.......... 1999 $430,006 $289,448 $144,018 $38,700
Chairman and CEO 1998 380,003 217,802 95,175 34,200
1997 215,911 50,804 53,894 20,908
Ronald B. Lankford*......... 1999 $364,214 $175,840 $269,811 $32,779
President and COO 1998 344,205 141,506 79,684 30,978
1997 316,707 0 48,965 28,504
Thomas F. Clayton........... 1999 $224,005 $107,979 $ 50,760 $19,620
Executive Vice President 1998 212,093 98,593 49,916 18,540
1997 197,006 27,121 36,363 17,191
Michael R. Hinton........... 1999 $204,151 $ 99,879 $ 64,530 $18,405
Executive Vice President 1998 181,887 65,781 65,914 16,370
1997 129,498 42,453 48,965 14,355
John S. Poelker............. 1999 $233,002 $115,407 $ 41,472 $16,310
Executive Vice President 1998 220,000 35,742 26,598 0
& CFO 1997 0 0 0 0
</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 10, 11 and 18 of this
Proxy Statement.
(c) Restricted Shares awarded each year are based on the achievement of net
income 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 1999 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, 1999 to the persons named are as follows:
James A. Risinger 11,786 shares, $318,222; Ronald B. Lankford 0 shares, $0;
Thomas F. Clayton 3,447 shares, $93,069; Michael R. Hinton 3,985 shares,
$107,595; and John S. Poelker 3,780 shares, $102,060. Dividends are paid
only on vested shares. See page 11 for a full discussion of the Restricted
Stock Plan.
(d) All other compensation includes the following for Messrs. Risinger,
Lankford, Clayton, Hinton and Poelker for 1999: (i) Company contribution to
the Employee Stock Ownership Plan of Old National Bancorp of $14,400, for
each named executive; and (ii) Company contribution to the Supplemental
Deferred Compensation Plan of $24,300, $18,379, $5,220, $4,005, and $10,890
respectively.
* As of January 1, 2000 Mr. Lankford retired as President and COO of the
Company and as of January 27, 2000, Mr. Risinger became Chairman, President
and CEO of the Company.
12
<PAGE> 16
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 subsidiaries and affiliates
(collectively, "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 his or her life based
on years of service and "average monthly compensation" (which excludes bonuses).
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.
PENSION PLAN TABLE (1)
<TABLE>
<CAPTION>
FINAL YEARS OF SERVICE
AVERAGE -------------------------------------------------------------------------
SALARY 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 14,500 29,000 45,500 62,000 81,500 101,000 120,500
250,000 18,125 36,250 56,875 77,500 101,875 126,250 150,625
300,000 21,750 43,500 68,250 93,000 122,250 151,500 180,750
350,000 25,375 50,750 79,625 108,500 142,625 176,750 210,875
400,000 29,000 58,000 91,000 124,000 163,000 202,000 241,000
450,000 32,625 65,250 102,375 139,500 183,375 227,250 271,125
500,000 36,250 72,500 113,750 155,000 203,750 252,500 301,250
550,000 39,875 79,750 125,125 170,500 224,125 277,750 331,375
600,000 43,500 87,000 136,500 186,000 244,500 303,000 361,500
</TABLE>
- ---------------
(1) The law in effect at December 31, 1999 prohibited the distribution of
benefits from the Retirement Plan in excess of $130,000 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.
1999 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 13. The credited years of service as
of December 31, 1999, for each
13
<PAGE> 17
such Executive Officer are as follows: James A. Risinger -- 21; Ronald B.
Lankford -- 43; Michael R. Hinton -19; Thomas F. Clayton -- 12; and John S.
Poelker -- 1.
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 $130,000) such excess benefits will be paid from the Company's
non-qualified, unfunded, non-contributory supplemental retirement plan.
EMPLOYEE STOCK OWNERSHIP PLAN
Effective January 1, 1998, the Company amended and restated the Employees'
Savings and Profit Sharing Plan of Old National Bancorp ("Prior Plan") as the
Old National Bancorp Employee Stock Ownership Plan ("ESOP") which is an employee
stock ownership plan and a stock bonus plan. As such, it is designed to be
invested primarily in common stock of the Company ("Common Stock.") In
connection therewith, the "rollover contribution," "salary reduction
contributions," "investment," and "prior plan" accounts of all participants
under the Prior Plan, and all allocations to the Prior Plan on account of the
plan year ended December 31, 1997, were spun off to a new plan, the Old National
Bancorp Employees' Savings Plan ("Savings Plan"). All such accounts were fully
vested and nonforfeitable, both prior to and at the time of their spin off from
the Prior Plan to the Savings Plan. All amounts allocated to participants'
"matching" and "profit sharing" accounts under the Prior Plan through December
31, 1997 remained under the Prior Plan and became the "matching" and "regular"
contributions accounts, respectively, under the ESOP.
The purpose of the ESOP is to enable participating employees of the Company
and its Affiliates to share in the growth and prosperity of the Company, to
provide participating employees with an opportunity to accumulate capital for
their future economic security, to furnish additional security to participating
employees who become totally and permanently disabled and to acquire beneficial
stock ownership interests in the Company. Generally, all regular employees of
the Company and its Affiliates who have completed twelve months of continuous
service (as defined) consisting of at least 1,000 hours of service may
participate in the ESOP.
Under the terms of the ESOP, the Company contributes Common Stock of the
Company or cash which is invested primarily in Common Stock. The Company may
make "regular" and "matching" contributions to the ESOP. No participant
contributions are allowed under the ESOP. Regular contributions are allocated to
each participant who has completed 1,000 hours of service (as defined) during
the year and is actually employed by the Company, or any of its Affiliates, on
the last day of such year. The allocation is made in the proportion that the
participant's compensation (as defined) for the year bears to the total
compensation of all participants entitled to an allocation of the regular
contribution for the year. The Board of Directors determines the amount of any
regular contributions.
Matching contributions are made in an amount necessary to match an amount of
each eligible participant's eligible salary reduction contributions under the
Savings Plan for a year
14
<PAGE> 18
determined under the following schedule based on the participant's years of
service with the Company and its Affiliates:
<TABLE>
<CAPTION>
MATCHED
PERCENTAGE
YEARS OF SERVICE OF SALARY REDUCTION
---------------- -------------------
<S> <C>
0-4 50%
5-9 75%
10 or more 100%
</TABLE>
Up to 4% of a participant's salary reduction contributions are eligible for a
matching contribution so long as the participant completes 1,000 hours of
service in the year to which the matching contribution relates and is actually
employed on the last day of such year.
Participants are vested in their ESOP accounts on a graduated basis
commencing with 20% after one year of "vesting service" (as defined) and
reaching 100% after 5 years of service. Distributions to participants or their
beneficiaries are made on termination of employment in a lump sum, periodic
installments or a qualified joint and 50% survivor annuity. In general,
distributions are made in the form of whole shares of Common Stock or cash, as
elected by participants.
After a participant has attained age 55 and completed 10 years of
participation in the ESOP, he or she may elect to diversify his or her ESOP
account by transferring to the Savings Plan up to 100% of the Common Stock
allocated to the account. Any such transfer will be in cash at the fair market
value of the shares of Common Stock to which the participant's diversification
election relates.
Participants have the right to direct the voting of the shares of Common
Stock allocated to their accounts on all matters with respect to which the
shares are entitled to vote. The ESOP's voting provisions require Old National
Trust Company, the trustee of the ESOP and wholly-owned subsidiary of the
Company, to vote the shares of Common Stock allocated to participants' accounts
in accordance with the written instructions of the participants. These
provisions also provide that, with respect to shares as to which no voting
instructions have been received, and with respect to shares which have not yet
been allocated to participants' accounts, the benefits committee under the ESOP
will instruct the trustee to vote such shares in the same proportion that the
allocated shares are voted by participant direction. However, applicable law
requires the trustee to vote the shares in a manner which is consistent with its
fiduciary obligations under the Employee Retirement Income Security Act
("ERISA"). Accordingly, if the trustee determines that, under the circumstances,
voting instructions are inconsistent with the requirements of ERISA, the trustee
will vote the shares in a manner which it determines to be consistent with
ERISA.
SAVINGS PLAN
The Savings Plan is a qualified salary reduction plan within the meaning of
Section 401(k) of the Code. Under the Savings Plan, all regular employees of the
Company and its Affiliates who have completed 12 consecutive months of
continuous service (as defined) consisting of at least 1,000 hours of service
may participate in the Savings Plan. An employee who has satisfied this
eligibility requirement may participate in the Savings Plan by directing his or
her employer to make before-tax salary reduction contributions to the Savings
Plan. Contributions may be directed in any integral percentage between 1% and
15% of the employee's basic compensation (as defined) subject to an annual
dollar limitation under the Code (currently $10,000). Before-tax salary
reduction contributions are fully vested at all times and are invested by
participants in
15
<PAGE> 19
one or more of the four investment funds made available by Old National Trust
Company, the trustee of the Savings Plan. Benefits are distributed from the
Savings Plan in the form of a single lump sum, periodic installments or a
qualified joint and 50% survivor annuity.
RESTRICTED STOCK PLAN
The Company also sponsors the Old National Bancorp Restricted Stock Plan.
The purpose of the Restricted Stock Plan is to promote the long-term
profitability and success of the Company by providing equity interests in the
Company to officers and key employees of the Company and its Affiliates. The
Restricted Stock Plan is administered by the Compensation Committee of the Board
of Directors.
Generally, the Restricted Stock Plan provides for the granting of shares of
Common Stock ("Restricted Stock") to an officer or key employee, subjecting the
shares to a vesting schedule. The Restricted Stock is subject to a substantial
risk of forfeiture. A grantee will forfeit his or her interest in the Restricted
Stock if he or she terminates employment before the shares become vested and
transferable. However, if a grantee ceases to be an employee prior to the end of
the restriction period as the result of death, disability (as defined) or
retirement (as defined), the Compensation Committee may, if it deems
appropriate, direct that the grantee receive a greater number of shares of
Common Stock than he or she is vested in, not to exceed the number of shares of
Restricted Stock initially granted.
A total of 50,000 shares of Common Stock may be awarded under the Restricted
Stock Plan, subject to adjustment for changes in the capitalization of the
Company. All awards are subject to the award agreement entered into between the
Company and the grantee; however agreements may differ among employees.
EXECUTIVE DEFERRED COMPENSATION
Supplemental Deferred Compensation Plan. Effective August 1, 1987, the
Company adopted the Supplemental Deferred Compensation Plan for Select Executive
Employees of Old National Bancorp and its Subsidiaries (the "Executive Plan"),
in the form of an unfunded, non-qualified deferred compensation plan. The
primary purpose of the Executive Plan is to enable participating executives to
supplement their salary reduction contributions to the Savings Plan and to
receive allocations of matching contributions which they are otherwise unable to
receive under the Savings Plan due to the limitations imposed thereon by the
Code. A participant may contribute up to 25% of his or her compensation (as
defined) to the Executive Plan during any year. In addition, participants may
defer up to 100% of any short term incentive payments. The Company also makes
matching contributions to the Executive Plan on account of participants' salary
reduction contributions thereunder. The amount of the Company's matching
contributions for a year are equal to the matching contributions which would
have been made under the matching contribution formula contained in the Savings
Plan, reduced by the amount of matching contributions actually allocated to the
participant's Savings Plan accounts for the year. The Company may also make
contributions to the Savings Plan in such amounts as are determined by the Board
of Directors.
Participants in the Executive Plan are limited to officers and key employees
of the Company and its Affiliates who are designated by the Compensation
Committee. Benefits under the Executive Plan are provided without regard to any
limitation imposed by the Code on benefits payable under qualified plans (such
as the Savings Plan) and represent unfunded, unsecured, general contracted
obligations of the Company. The Compensation Committee of the Board of Directors
is responsible for administrating the Executive Plan.
16
<PAGE> 20
Pension Restoration Plan. Effective December 1, 1995, the Company adopted
the Old National Bancorp Pension Restoration Plan, in the form of a
non-qualified, unfunded deferred compensation plan. The purpose of the
Restoration Plan is to restore to affected participants the difference between
the amount of their benefits under the Retirement Plan and the benefit they
would have received under the Retirement Plan were it not for the limits thereon
imposed by the Code. Thus, the Restoration Plan provides a participant with an
actuarial equivalent benefit in an amount equal to the difference between the
monthly amount payable under the Retirement Plan without regard to any
limitations on benefits imposed by the Code less the amount of the single life
annuity benefit actually payable under the Retirement Plan. Benefits under the
Restoration Plan are subject to the same vesting schedule that applies to
benefits accrued under the Retirement Plan.
Participants in the Restoration Plan are limited to officers and key
employees of the Company, and its Affiliates who are designated by the
Compensation Committee. Benefits under the Restoration Plan are provided without
regard to any limitation imposed by the Code on benefits payable under qualified
plans (such as the Retirement Plan) and represent unfunded, unsecured, general
contractual obligations of the Company. The Restoration Plan is administered by
the Compensation Committee of the Board of Directors.
SHORT TERM INCENTIVE PLAN
In 1996, the Company implemented the STIP which provides for additional
compensation in the form of cash incentive payments which are contingent on the
achievement of certain corporate and individual performance goals. Participation
in the STIP is limited to officers and key employees of the Company and its
Affiliates based upon salary grade level and performance ratings. The STIP is
administered by the Compensation Committee of the Board of Directors.
The corporate and shareholder-related goals of the STIP 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 year, participants establish
individual goals which are linked to the Company's business and strategic plans.
The individual goals relate to the specific segments for which the participant
has responsibility and are intended to challenge the participants to perform
beyond expected levels of performance.
1999 EQUITY INCENTIVE PLAN
In 1999, the Company implemented, with the approval of its Shareholders, the
1999 Equity Incentive Plan which provides additional compensation in the form of
(i) non-qualified stock options, (ii) incentive stock options, (iii) restricted
stock, (iv) stock appreciation rights, and (v) performance units and performance
shares to officers and key employees of the Company and its Affiliates. The
Equity Incentive Plan is administered by the Compensation Committee of the Board
of Directors.
A total of 3,800,000 shares of Common Stock may be awarded under the Equity
Incentive Plan, subject to adjustment for changes in the capitalization of the
Company. All awards are subject to award agreements entered into between the
Company and the grantee; however, agreements may differ among employees.
AGREEMENTS WITH CERTAIN OFFICERS
The Company has entered into severance agreements with Messrs. Thomas F.
Clayton, Michael R. Hinton, John S. Poelker, and James A. Risinger. Each
executive is entitled to benefits
17
<PAGE> 21
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 severance agreements provide for one year extensions by mutual agreement
of the Company and the respective executives. With respect to Messrs. Clayton,
Hinton, Poelker and Risinger, each of their severance agreements was extended by
the Board of Directors in 1999 through December 31, 2001.
The Company has entered into an employment agreement with John S. Poelker
according to which the Company has agreed to employ Mr. Poelker through August
10, 2000 as its Senior Vice President and Chief Financial Officer. Under the
employment agreement, the Company is required to pay Mr. Poelker an annual base
salary of $220,000 and to permit Mr. Poelker to participate in the Company's
executive incentive compensation programs, employee benefit plans and key
management perquisites. The employment agreement with Mr. Poelker does not
duplicate any benefits provided to him under his severance agreement with the
Company.
If the Company terminates Mr. Poelker's employment without cause, or if Mr.
Poelker terminates his employment for cause, whether during the term or after
the expiration of the employment agreement, then the Company must pay Mr.
Poelker certain amounts (including the greater of his base salary for the
remainder of the term of the employment agreement or his annual base salary) and
cause all incentive compensation stock awards to become vested and
nonforfeitable. If Mr. Poelker's employment is terminated by the Company for
cause or by Mr. Poelker without cause, then the Company must pay him only his
earned but unpaid compensation through the date of termination. If Mr. Poelker's
employment is terminated because of his death or disability, then the Company
must pay him his earned but unpaid compensation through the date of death or
disability and will cause all incentive compensation stock awards to become
vested and nonforfeitable.
18
<PAGE> 22
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 Russell 2000 Index and the NASDAQ Combined Financial
Index. The Company now desires to compare shareholder returns on its common
stock to the Russell 1000 Index and the NASDAQ Bank Index. Accordingly, this
year the performance graph includes all of the foregoing Indices.
TOTAL RETURN TO STOCKHOLDERS
(ASSUMES $100 INVESTMENT ON 12/30/94)
<TABLE>
<CAPTION>
OLD NAT'L NASDAQ COMB.
BANCORP RUSSELL 1000 RUSSELL 2000 FIN'L NASDAQ BANK
--------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
1994 100.00 100.00 100.00 100.00 100.00
1995 102.44 136.84 126.20 143.71 147.80
1996 124.29 167.10 144.84 184.74 191.28
1997 163.71 221.36 174.55 289.96 318.69
1998 201.87 280.59 170.65 306.19 285.99
1999 188.85 339.32 207.09 404.63 269.40
</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 30, 1994, in common stock of each of the Company, the
Russell 1000 Index, the NASDAQ Bank Index, the Russell 2000 Index and the NASDAQ
Combined Financial Index, with investment weighted on the basis of market
capitalization.
The Company has determined to utilize the Russell 1000 Index rather than the
Russell 2000 Index because the Company was included in the Russell 1000 Index in
1999. The Company also has determined to utilize the NASDAQ Bank Index rather
than the NASDAQ Combined Financial Index because it believes the companies
included in the NASDAQ Bank Index more closely resemble the Company in terms of
asset size and services offered than the companies included in the NASDAQ
Combined Financial Index.
19
<PAGE> 23
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.
During 1999, the Company paid approximately $1,966,322 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, renovations to the Operations Center in Evansville, renovations to the
501 Main Financial Center, and for work at other Old National Bank branch
locations. Alan W. Braun, President of Industrial Contractors Inc., is a
Director of the Company.
20
<PAGE> 24
ITEM 2. AMENDMENT OF THE ARTICLES OF
INCORPORATION TO INCREASE
AUTHORIZED SHARES OF COMMON STOCK
Description of the Proposed Amendment of Article V
At a meeting held on January 27, 2000, the Company's Board of Directors
unanimously adopted resolutions approving and recommending to Shareholders, an
amendment to Article V, Section 1 of the Company's Articles of Incorporation
which would increase the authorized shares of the Company's common stock from
75,000,000 to 150,000,000 shares, without par value (the "Amendment"). No change
is being proposed to the Company's preferred stock. The complete text of Section
1 of Article V, as amended, reads as follows:
SECTION 1. NUMBER. The total number of shares of capital stock which the
Corporation has authority to issue is 152,000,000 shares, all of which shall be
divided into two classes of shares to be designated "Common Stock" and
"Preferred Stock," respectively, as follows:
150,000,000 shares of Common Stock, without par value; and
2,000,000 shares of Preferred Stock, without par value
On February 14, 2000, the number of the Company's outstanding shares of
common stock was 46,832,593; the number of shares of common stock reserved for
issuance under the Company's Dividend Reinvestment and Stock Purchase Plan was
500,000. As of February 14, 2000, there were also 1,040,391 shares of the
Company's common stock reserved for issuance upon conversion of the Company's 8%
Convertible Subordinated Debentures and 3,800,000 shares of the Company's common
stock reserved for issuance under the Restricted Stock Plan and Equity Incentive
Plan. As of February 14, 2000, there were also 12,488,000 shares of the
Company's common stock reserved for issuance in connection with the Company's
acquisition of ANB Corporation, Heritage Financial Services, Inc. and Permanent
Bancorp, Inc. Consequently, 10,339,016 authorized shares of common stock remain
available for future issuance.
Discussion of the Proposed Amendment of Article V
The Board has concluded that it is in the best interests of the Company and
its Shareholders to increase the amount of the Company's authorized capital
stock at this year's Annual Meeting of Shareholders. The additional shares of
Common Stock authorized by the Amendment would be available for general
corporate purposes, including, but not limited to, acquisitions, financings,
employee stock incentive plans, stock dividends or stock splits. Other than
issuances of Common Stock in connection with such general purposes and the
Company's Dividend Reinvestment and Stock Purchase Plan, Convertible
Subordinated Debentures and executive compensation and employee benefit plans,
as well as the proposed acquisition of Permanent Bancorp, Inc. discussed below,
the Company has no plans, understandings or agreements at this time to issue any
additional shares of its Common Stock.
The Company regularly engages in preliminary discussions with other
financial services companies regarding possible acquisitions (which may or may
not involve the issuance of common stock of the Company), as well as has in the
past entered into definitive agreements regarding acquisitions of other
financial services companies. The Company and Permanent Bancorp, Inc. have
signed a definitive agreement which provides for an exchange of all outstanding
Permanent Bancorp shares for approximately 3,097,000 shares of common stock of
the Company, subject to certain adjustments.
21
<PAGE> 25
If the Amendment is adopted by the Shareholders, the Board of Directors
could authorize the issuance of any authorized but unissued shares of Common
Stock on terms determined by it without further action by the Shareholders,
unless the shares were issued in a transaction requiring Shareholder approval.
All attributes of the additional shares of Common Stock would be the same as
those of the existing shares of authorized and unissued Common Stock.
Under the Company's Articles of Incorporation, the Shareholders of the
Company have no pre-emptive rights to subscribe to or purchase any shares of
Common Stock or other securities of the Company. Shareholders should also note
that issuance of additional shares of common stock other than on a pro-rata
basis to all current Shareholders would reduce the proportionate interests in
the Company held by current Shareholders.
The Amendment is not intended as an anti-takeover provision, but it may have
an anti-takeover effect. Although the Board presently has no intention of doing
so, the authorized but unissued Common Stock could be used to discourage or
render more difficult certain takeover attempts of the Company through the
issuance of a number of shares sufficient to dilute the interests of a person
seeking control or to increase the total amount of consideration necessary for a
person to obtain control of the Company.
The Board unanimously recommends that the Shareholders vote "FOR" approval
of the Amendment. Assuming a quorum is present at the Annual Meeting of
Shareholders, the Amendment will be approved by the Shareholders if the votes
cast in favor of the Amendment at the Annual Meeting exceed the votes cast
against the Amendment. If sufficient votes are received, the Amendment will
become effective upon the filing of Articles of Amendment to the Company's
Articles of Incorporation with the Indiana Secretary of State.
22
<PAGE> 26
ITEM 3. 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 PricewaterhouseCoopers LLP, certified
public accountants, as independent public accountants for the Company and its
Affiliates for the fiscal year ending December 31, 2000. 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. In the event the appointment of
PricewaterhouseCoopers 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, 2000. A representative of
PricewaterhouseCoopers, 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.
Effective July 22, 1999, the Board of Directors of the Company dismissed
Arthur Andersen LLP as its independent public accountants. The Audit Committee
of the Board of Directors of the Company approved this action. In connection
with the audits of the Company's financial statements as of December 31, 1998,
and 1997 and for the years then ended and through the period June 30, 1999,
there were no disagreements between the Company and Arthur Andersen on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Arthur Andersen, would have caused it to make a reference to the
subject matter of the disagreements in connection with its reports of financial
statements. Arthur Andersen's reports on the Company's financial statements as
of December 31, 1998 and 1997 contained no adverse opinion or disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principle.
SHAREHOLDER PROPOSALS FOR
THE 2001 ANNUAL MEETING
Proposals submitted by Shareholders to be presented at the 2001 Annual
Meeting must be received by the Company at its principal executive office no
later than November 14, 2000, 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 Corporate 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.
23
<PAGE> 27
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, 1999. 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 2000 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 (or with respect to which the Company did not have
notice at least 45 days before the date on which the Company first mailed its
proxy materials for the 1999 annual meeting of shareholders) 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
Jeffrey L. Knight
Corporate Secretary
24
<PAGE> 28
[OLD NATIONAL BANCORP LOGO]
PROXY SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
OF OLD NATIONAL BANCORP
The undersigned hereby appoints Stephan E. Weitzel and John A. Witting, and
each of them, singly, 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 14, 2000, and which the undersigned would
be entitled to vote, at the Annual Meeting of Shareholders to be held on April
20, 2000, and all adjournments thereof.
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS:
<S> <C> <C> <C>
01-David L. Barning 05-Larry E. Dunigan 09-Ronald B. Lankford 13-John N Royse
02-Richard J. Bond 06-David E. Eckerle 10-Lucien H. Meis 14-Majorie Z. Soyugenc
03-Alan W. Braun 07-Andrew E. Goebel 11-Louis L. Mervis 15-Kelly N. Stanley
04-Wayne A. Davidson 08-Phelps L. Lambert 12-James A. Risinger 16-Charles D. Storms
</TABLE>
2. Approval of the Amendment to Article V of Old National Bancorp's Articles
of Incorporation to increase Authorized Common Stock from 75,000,000 to
150,000,000.
3. Ratification of the appointment of PricewaterhouseCoopers, LLP, as
Independent Public Accountants of OLD NATIONAL BANCORP and its subsidiaries
for the fiscal year ending December 31, 2000.
4 The Proxies are hereby granted authority to vote, in their discretion, upon
such other business as may properly come before the annual meeting.
- --------------------------------------------------------------------------------
FOLD HERE AND DETACH
[OLD NATIONAL BANCORP LOGO]
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 LISTED HEREIN
(except as indicated below)
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, WRITE NUMBER(S) OF SUCH
NOMINEE(S) BELOW.
USE NUMBER ONLY
---------------------------------
2. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. 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)
