<PAGE> COVER
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
GERMAN AMERICAN BANCORP
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than
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)(4) 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:
[ ] 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>
<PAGE> 1
GERMAN AMERICAN BANCORP
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1997
The Annual Meeting of Shareholders of German American Bancorp
(the "Corporation") will be held at the principal office of The
German American Bank, 711 Main Street, Jasper, Indiana, on Thursday,
April 24, 1997, at 10:00 a.m., Jasper time, for the following
purposes:
1. To elect six Directors to hold office until the 1999 Annual
Meeting of Shareholders and until their successors are
elected and have qualified.
2. To consider and approve or disapprove the proposed
amendment of the Corporation's Articles of Incorporation to
increase the number of Common Shares, $10.00 par value per
share, of the Corporation that the Corporation is
authorized to issue from 5,000,000 to 20,000,000.
3. To transact such other business as may properly come before
the meeting.
Holders of record of Common Shares of German American Bancorp at
the close of business on March 1, 1997, are entitled to notice of
and to vote at the Annual Meeting.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ALL
SHAREHOLDERS, EVEN IF THEY PLAN TO ATTEND THE MEETING, ARE REQUESTED
TO COMPLETE, SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
By Order of the Board
of Directors
URBAN R. GIESLER
Secretary
March 31, 1997
Jasper, Indiana
(ANNUAL REPORT ENCLOSED)<PAGE>
<PAGE> 2
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
GERMAN AMERICAN BANCORP
April 24, 1997
This Proxy Statement is being furnished to shareholders on or
about March 31, 1997, in connection with the solicitation by the
Board of Directors of German American Bancorp (the "Corporation"),
711 Main Street, Jasper, Indiana 47546, of proxies to be voted at
the Annual Meeting of Shareholders to be held at 10:00 a.m., Jasper
time, on Thursday, April 24, 1997, at the foregoing address. The
Corporation is the parent holding company for The German American
Bank, Jasper, Indiana ("German American"); The Peoples National Bank
and Trust Company of Washington, Washington, Indiana ("Peoples");
Community Trust Bank, Otwell, Indiana ("Community"); and First State
Bank, Southwest Indiana, Tell City, Indiana ("First State Bank").
At times herein, German American, Peoples, Community, and First
State Bank are referred to collectively as the "Banks."
At the close of business on March 1, 1997, the record date for
the Annual Meeting, there were 1,926,267 Common Shares outstanding
and entitled to vote at the Annual Meeting. On all matters,
including the election of Directors, each shareholder will have one
vote for each share held.
If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked at any time insofar as it has not been
exercised. The proxy may be revoked by either (a) filing with the
Secretary (or other officer or agent of the Corporation authorized
to tabulate votes) (i) a written instrument revoking the proxy or
(ii) a subsequently dated proxy, or (b) attending the Annual Meeting
and voting in person. Unless revoked, the proxy will be voted at
the Annual Meeting in accordance with the instructions of the
shareholder as indicated on the proxy. If no instructions are
given, the shares will be voted as recommended by the Directors.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
Six Directors are to be elected at the Annual Meeting. The
Board of Directors, which currently consists of twelve members, is
divided into two classes of equal size with the terms of one class
expiring each year. Generally, each Director serves until the
annual meeting of the shareholders held in the year that is two
years after such Director's election and thereafter until such
Director's successor is elected and has qualified. The terms of the
current Directors expire as follows: 1997 -- Directors Astrike,
Buehler, Graham, Hoffman, Lett and Place; 1998 -- Directors Mehne,
Ruckriegel, Schroeder, Seger, Steurer, and Thompson.
<PAGE>
<PAGE> 3
Each Director will be elected by a plurality of the votes cast
in the election. Shares present but not voted for any nominee do
not affect the determination of whether a nominee has received a
plurality of the votes cast.
It is the intention of the persons named in the accompanying
form of proxy to vote such proxy for the election to the Board of
Directors of George W. Astrike, David G. Buehler, David B. Graham,
William R. Hoffman, Michael B. Lett and A. Wayne ("Skip") Place,
Jr., each of whom is now a Director whose present term expires this
year. Each such person has indicated that he will accept nomination
and election as a Director. If, however, any such person is unable
or unwilling to accept nomination or election, it is the intention
of the Board of Directors to nominate such other person as Director
as it may in its discretion determine, in which event the shares
subject to the proxy will be voted for that person.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE SIX
NOMINEES IDENTIFIED ABOVE. (ITEM 1 ON THE PROXY)
The following table presents certain information as of March 5,
1997, regarding the current Directors of the Corporation, including
the six nominees proposed by the Board of Directors for election at
this year's Annual Meeting. Unless otherwise indicated in a
footnote, the principal occupation of each Director has been the
same for the last five years and such Director possesses sole voting
and investment powers with respect to the shares indicated as
beneficially owned by such Director. Unless specified otherwise, a
Director is deemed to share voting and investment powers over shares
indicated as held by a spouse, children or other family members
residing with the Director. (Fractional shares have been rounded to
the nearest whole share.)
<TABLE>
<CAPTION>
Shares Benefi-
cially Owned
Name, (Percentage
Present Principal Director of Outstanding
Occupation and Age Since (1) Common Shares)
<S> <C> <C>
George W. Astrike* 1982 6,876
Chairman of the Board and Chief (0.3%)
Executive Officer of the Corporation (2)
61
David G. Buehler* 1984 144,818 (3)
President of Buehler Foods, Inc. (5.7%)
57
David B. Graham* 1997 (4) 40,935(5)
Chairman of the Board of (1.6%)
Graham Farms, Inc. and
Graham Cheese Corporation
70<PAGE>
<PAGE> 4
William R. Hoffman* 1986 41,412 (6)
Farmer; Vice-President and Director of (1.6%)
Patoka Valley Feeds, Inc.
59
Michael B. Lett* 1993 102,355 (8)
Attorney, Lett & Jones (7) (4.0%)
52
Gene C. Mehne 1979 20,925 (9)
Vice President and Manager of (0.7%)
Mehne Farms, Inc.
52
A. Wayne ("Skip") Place, Jr.* 1990 18,394 (10)
President and Chief Executive Officer (0.7%)
of Jasper Rubber Products, Inc.
49
Robert L. Ruckriegel 1983 105,258 (11)
President of B. R. Associates, Inc. (4.1%)
(restaurants)
61
Mark A. Schroeder 1991 5,763 (13)
President and Chief Operating (0.2%)
Officer of the Corporation (12)
43
Larry J. Seger 1990 23,410 (14)
Vice President of Wabash Valley (0.9%)
Produce, Inc. (egg and turkey production)
46
Joseph F. Steurer 1983 13,228 (15)
Chairman and Chief Executive Officer (0.5%)
of JOFCO, Inc. (office furniture)
60
Chet L. Thompson 1997(4) 5,931
President of (0.2%)(16)
Thompson Insurance, Inc.
60
</TABLE>
*Nominee
(1) Includes service on the Board of German American prior to the
organization of the Corporation. Does not include prior
service on the Board of Directors of the Banks subsequently
acquired by the Corporation.<PAGE>
<PAGE> 5
(2) Mr. Astrike also serves as Chairman of the Board of German
American, a Director of each of the Banks, and an officer
and/or a Director of all nonbank affiliates of the
Corporation.
(3) Includes 123,765 shares owned by Buehler Foods, Inc., of which
Mr. Buehler is President and majority shareholder and with
respect to which Mr. Buehler shares voting and investment
powers; 3,051 shares held jointly by Mr. Buehler and his wife;
and 18,000 shares held by the David G. Buehler Charitable
Trust. Mr. Buehler, his wife, Buehler Foods, Inc., and Joseph
E. Buehler, Mr. Buehler's brother, who owns 123 shares
directly, beneficially own as a group 144,818 shares.
(4) Mr. Graham and Mr. Thompson, who have been members of the
Board of Directors of Peoples since 1983 and 1988,
respectively, were appointed to the Corporation's Board of
Directors by action of the Board of Directors effective March
31, 1997, pursuant to the Corporation's agreement with Peoples
to place two mutually-agreeable representatives of the Peoples
Board on the Corporation's Board promptly following the
Corporation's acquisition of Peoples.
(5) Includes 7,679 shares owned by Mr. Graham's wife.
(6) Includes 3,554 shares owned jointly by Mr. Hoffman and his
wife, and 8,934 shares owned by Mr. Hoffman's wife.
(7) Mr. Lett and his brother and law partner, J. David Lett, also
serve as Directors of Peoples. Lett & Jones represents the
Union Banking Division of Peoples as legal counsel.
(8) Includes 240 shares held by Mr. Lett's wife, who also holds
171 shares as custodian for their son; 98,208 shares held by
Mr. Lett's mother; and 1,858 shares held by Mr. Lett's
brother, with all of whom Mr. Lett may be deemed to act as a
group.
(9) Includes 19,149 shares held by Mr. Mehne's mother; 530 shares
owned by Mr. Mehne's wife; and 370 shares held by German
American as trustee for the Mehne Farms, Inc. Qualified Plan.
(10) Includes 3,507 shares owned jointly by Mr. Place and his wife;
355 shares which Mr. Place holds as custodian for his son and
two daughters; and 4,930 shares owned by Jasper Rubber
Products, Inc., of which Mr. Place is President and Chief
Executive Officer.
(11) Includes 840 shares owned jointly by Mr. Ruckriegel and his
wife, and 32,334 shares owned by Mr. Ruckriegel's wife.
(12) Mr. Schroeder was named President and Chief Operating Officer
of the Corporation effective July 1, 1995, after having served
as President of German American since January 1991. Mr.
Schroeder also is a Director of each of the Banks, and an
officer and/or a Director of the Corporation's nonbank
affiliates.
(13) Includes 1,654 shares that Mr. Schroeder has options to
purchase.
(14) Includes 11,552 shares owned by certain corporations of which
Mr. Seger is an executive officer and a shareholder.
(15) Includes 2,066 shares owned by Mr. Steurer's wife.
(16) Includes 2,364 shares owned jointly by Mr. Thompson and his
wife, and 3,381 shares owned by Mr. Thompson's wife.
<PAGE>
<PAGE> 6
Committees and Attendance
The Board of Directors of the Corporation held six meetings
during 1996. The Corporation has standing audit and compensation
committees but does not have a nominating committee. The Audit
Committee, consisting of Directors Hoffman, Lett, Mehne and Place, met
five times in 1996. The Audit Committee reviews with the
Corporation's independent auditors the scope of the audit to be
undertaken and the results of the audit and also reviews the results
of internal audits. The Corporation's Compensation Committee,
consisting of Directors Astrike, Buehler, Place, Ruckriegel, Schroeder
and Steurer, met three times in 1996. The Corporation's Compensation
Committee makes salary and bonus recommendations to the Board of
Directors and administers the Stock Option Plan. Each of the
Directors attended at least 75 percent of the aggregate number of
meetings of the Board of Directors of the Corporation and the
committees on which he served during 1996.
Compensation of Directors
Each Director of the Corporation, including Directors who are
salaried officers of the Corporation, receives $250 per quarter,
regardless of meeting attendance. All of the members of the
Corporation's Board also serve on the Board of at least one of the
Banks and received compensation for such service during 1996. German
American pays each Director a monthly fee of $400 in addition to $100
for every regular Board meeting attended and $80 for each committee
meeting attended (for a maximum of five committee meetings per month).
Peoples pays each Director a fee of $500 per month regardless of
attendance. The Union Bank (which merged into Peoples effective March
4, 1997) paid each Director a fee of $300 per month, and an additional
$75 for each meeting attended and $50 for each committee meeting
attended. Community pays Directors a monthly fee of $375 ($300 if the
Director fails to attend a regular meeting of the Board) and $50 for
each committee meeting attended per month (for a maximum of three
committee meetings per month). First State Bank pays each Director
$300 per month plus $100 for each Board meeting attended.
In 1992 the German American Board of Directors approved a
Director Compensation Deferral Program. A Director who chooses to
participate in the program may defer 100 percent (not to exceed $6,600
per year) of his Board fees for five years. Interest accumulates on
deferred amounts at the greater of eight percent or the five-year
moving average of German American's return on equity, subject,
however, to a maximum rate of twelve percent. The accumulated amounts
are paid to the Director, or the Director's designated beneficiary,
upon the retirement, disability or death of the Director, or, subject
to German American's approval, in the event of an unforeseeable
financial emergency experienced by the Director. All of the Directors
deferred Director fees under the program in 1996.
EXECUTIVE COMPENSATION
The following table sets forth information regarding
compensation paid for the fiscal years indicated to the
Corporation's Chief Executive Officer and the Corporation's other
most highly compensated executive officers, based on salary and
bonus earned during fiscal 1996.
<PAGE>
<PAGE> 7
<TABLE>
Summary Compensation Table
<CAPTION>
Securities
Underlying
Name and Options/ All Other
Principal Position Year Salary Bonus SARs(1) Compensation
<S> <C> <C> <C> <C> <C>
George W. Astrike, 1996 $168,000 $47,040 3,087 $33,739 (2)
Chairman and 1995 $168,000 $39,480 1,981 $38,472
C.E.O. of the 1994 $158,800 $32,420 1,136 $26,561
Corporation and
Chairman of the
Bank
Mark A. Schroeder, 1996 $110,000 $30,800 945 $24,629 (3)
President and 1995 $110,000 $25,850 1,050 $25,512
C.O.O. of the 1994 $ 92,200 $18,919 1,050 $21,281
Corporation
Stan Ruhe, 1996 $ 96,500 $22,436 1,357 $11,894 (4)
Executive Vice 1995 $ 95,000 $21,138 0 $11,712
President of the 1994 $ 85,000 $17,441 0 $10,344
Corporation and
German American
</TABLE>
(1) The numbers of shares underlying options have been adjusted to reflect the
December 1996 five percent stock dividend and are rounded to the nearest
whole share.
(2) Represents contributions of $7,500 under the Profit Sharing Plan, matching
contributions of $7,500 under the 401(k) Plan, Director fees in the amount
of $8,760, and $9,979 in above-market interest credited on deferred salary
and Director fees.
(3) Represents contributions of $7,107 under the Profit Sharing Plan, matching
contributions of $7,107 under the 401(k) Plan, Director fees in the amount
of $9,120, and $1,295 in above-market interest credited on deferred
Director fees.
(4) Represents contributions of $5,947 under the Profit Sharing Plan and
matching contributions of $5,947 under the 401(k) Plan.
In 1992 the German American Board of Directors entered into
a Deferred Compensation Agreement with Mr. Astrike. A primary
purpose of the Agreement, like that of the Director Compensation
Deferral Program, is to provide a long-term incentive to maximize
shareholder value through increases in German American's return on
equity. The Agreement was amended in 1996 to permit Mr. Astrike
to defer in advance up to $180,000 (the previous maximum amount
was $150,000) of the compensation that he would otherwise be
entitled to receive from German American. Interest is credited to
the amounts deferred by Mr. Astrike at the rate of the greater of<PAGE>
<PAGE> 8
eight percent or the five-year moving average of German American's
return on equity, subject, however, to a maximum of rate twelve
percent. The amounts deferred by Mr. Astrike are unfunded and Mr.
Astrike's rights to such deferred amounts are those of an
unsecured general creditor of German American. Mr. Astrike
elected to defer a portion of his 1996 salary. Mr. Astrike is not
eligible to receive profit sharing and matching contributions
pursuant to the German American Profit Sharing and 401(k) Plan on
deferred compensation.
Option/SAR* Grants In Last Fiscal Year
The following table presents information on the stock option
grants that were made during 1996 pursuant to the German American
Bancorp 1992 Stock Option Plan. The only stock options granted
during the year were replacement options that were granted to
optionees who tendered already owned Common Shares of the
Corporation in payment of the exercise price for options that had
been granted to them in 1993. (Numbers of options and per share
exercise prices have been retroactively adjusted to reflect
subsequent stock splits and dividends.)
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (1)
% of Total
Options/SARs
Number Granted
Securities to
Underlying Employees
Options/ in Exercise or
SAR/s Fiscal Base Price Expiration
Name Granted Year ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C>
George W. Astrike3,087(2) 46% $29.76 4/19/2003 $39,514 $92,950
Mark A. Schroeder 945(2) 14% $32.86 4/19/2003 $12,285 $28,511
Stan Ruhe 763 11% $29.76 4/19/2003 $ 9,766 $22,974
Stan Ruhe 593 9% $32.86 4/19/2003 $ 7,709 $17,891
</TABLE>
*The Corporation does not grant Stock Appreciation Rights ("SARs").
(1) The amounts in the table are not intended to forecast
possible future appreciation, if any, of the Corporation's
Common Shares. Actual gains, if any, are dependent upon the
future market price of the Corporation's Common Shares and
there can be no assurance that the amounts reflected in this
table will be achieved.
<PAGE>
<PAGE> 9
(2) Incentive stock options previously granted under the Stock
Option Plan were exercised by Mr. Astrike on January 9,
1996, by Mr. Schroeder on July 15, 1996, and by Mr. Ruhe on
January 9, 1996 and July 15, 1996. The options had been
granted on April 20, 1993, at the estimated aggregate fair
market value of the Common Shares covered by each option on
that date. The Stock Option Plan provides that if the
optionee tenders Common Shares of the Corporation already
owned by the optionee as payment, in whole or in part, of
the exercise price for the shares the optionee has elected
to purchase under the option, then the Corporation is
obligated to use its best efforts to issue a replacement
option of the same type (incentive or non-qualified option),
with the same expiration date as the option that was
exercised, and covering a number of Common Shares equal to
the number of Common Shares tendered. The per share
exercise price of the replacement option is the fair market
value of a Common Share of the Corporation on the date of
exercise of the original option. Replacement options are
not exercisable for a period of twelve months following
their date of grant and are subject to cancellation if
during such twelve-month period the optionee sells any
Common Shares of the Corporation other than in payment of
the exercise price of another option under the Stock Option
Plan. Upon the exercise of options on January 9, 1996, Mr.
Astrike was granted a replacement option for 3,087 shares
and Mr. Ruhe was granted a replacement option for 763
shares. Upon the exercise of options on July 15, 1996, Mr.
Schroeder was granted a replacement option for 945 shares
and Mr. Ruhe was granted a replacement option for 593
shares. The replacement options granted on January 9, 1996,
have an exercise price of $29.76 per share, subject to
adjustment pursuant to the Stock Option Plan, and became
exercisable in full on January 10, 1997. The replacement
options granted on July 15, 1996, have an exercise price of
$32.86 per share, subject to adjustment pursuant to the
Stock Option Plan, and become exercisable on July 16, 1997.
The Stock Option Plan also provides that if a corporate
reorganization would result in the termination of the Plan
and unexercised options, then all unexercised options will
become immediately exercisable regardless of any vesting
requirements.
Aggregated Option/SAR Exercises In
Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table sets forth information with respect to
options that have been granted to Messrs. Astrike, Schroeder and
Ruhe pursuant to the German American Bancorp 1992 Stock Option
Plan and the option exercises that occurred during 1996. (Numbers
of options and per share exercise prices have been retroactively
adjusted to reflect subsequent stock splits and dividends.)
<TABLE>
<CAPTION>
Shares Value
Acquired onRealized Exercisable/ Exercisable/
Name Exercise (#)($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
George W. Astrike4,961 $50,106 6,360/0 options(1) $55,909/$0(4)
Mark A. Schroeder1,654 $21,833 2,205/4,253 options(2)$20,218/$65,526(4)
Stan Ruhe 2,150 $24,794 763/2,578 options(3) $6,287/$39,453(4)
/TABLE
<PAGE>
<PAGE> 10
(1) In 1993 Mr. Astrike was granted an option to purchase 6,000
Common Shares at an exercise price of $32.50 per share,
which, as a result of adjustments for a subsequent stock
split and stock dividends, currently provides for 9,923
Common Shares at an exercise price of $19.66 per share. The
option became exercisable with respect to one-half of the
shares immediately upon grant and became exercisable with
respect to the other one-half of the shares on April 20,
1994. On January 9, 1996, Mr. Astrike exercised the option
with respect to 4,961 shares and was granted a replacement
option to cover the 3,087 shares that he had tendered in
partial payment of the exercise price. The replacement
option is for a price of $29.76 per share and became
exercisable on January 10, 1997.
(2) In 1993 Mr. Schroeder was granted an option to purchase
5,000 Common Shares at an exercise price of $32.50 per
share, which, as a result of adjustments for a subsequent
stock splits and stock dividends, currently provides for
8,269 Common Shares at an exercise price of $19.96 per
share. The option becomes exercisable with respect to
twenty percent of the shares covered by the option on each
of the five anniversary dates beginning on the first
anniversary date after the grant of the option. On July 15,
1996, Mr. Schroeder exercised the option with respect to
1,654 shares that were then exercisable and was granted a
replacement option to cover the 945 shares that he had
tendered in partial payment of the exercise price. The
replacement option is for a price of $32.86 per share and
becomes exercisable on July 16, 1997.
(3) In 1993 Mr. Ruhe was granted an option to purchase 3,000
Common Shares at an exercise price of $32.50 per share,
which, as a result of adjustments for a subsequent stock
split and stock dividends, currently provides for 4,961
Common Shares at an exercise price of $19.66 per share. The
option becomes exercisable with respect to twenty percent of
the shares covered by the option on each of the five
anniversary dates beginning on the first anniversary date
after the grant of the option. On January 9, 1996, Mr. Ruhe
exercised the option with respect to 1,157 of the shares
that were then exercisable and received a replacement option
for 763 shares. The January 9, 1996 replacement option is
for a price of $29.76 per share and became exercisable on
January 10, 1997. On July 15, 1996, Mr. Ruhe exercised the
option for an additional 993 shares and received a
replacement option for 593 shares. The July 15, 1996
replacement option has an exercise price of $32.86 per share
and becomes exercisable on July 16, 1997.
(4) Represents the difference between the last per share trade
price of the Corporation's Common Shares as reported on
NASDAQ on December 31, 1996 ($38.00), and the exercise price
of those options having an exercise price less than the last
trade price, multiplied by the number of options.
Compensation Committee Report
on Executive Compensation
Overall Compensation Policy
The Compensation Committee of the Board of Directors of the
Corporation has the responsibility for recommending the salaries,
bonuses and other compensation to be paid to the executive
officers of the Corporation. The Compensation Committee's
recommendations as to compensation are submitted to the full Board
of Directors for approval. The Compensation Committee is composed
of six members, consisting of four independent outside directors
and two executive officers of the Corporation, Mr. Astrike and Mr.
Schroeder. Messrs. Astrike and Schroeder absent themselves from,<PAGE>
<PAGE> 11
and do not participate in, any Compensation Committee proceedings
relating to the determination of their own compensation. The
primary goals of the Compensation Committee in determining
compensation policy are to provide a level of compensation that
will attract, motivate and help retain well-qualified executive
officers and to further enhance shareholder return by more closely
aligning the interests of executive officers with the interests of
the Corporation's shareholders. The Compensation Committee
attempts to attain these goals by setting total compensation at
competitive levels considering an executive officer's individual
performance while also providing effective incentives tied to the
Corporation's overall financial performance. The executive
compensation program consists of three basic elements: (1) base
salary, (2) annual incentive bonus awards, and (3) stock option
awards.
Base Salary
The Corporation attempts to provide Mr. Astrike and the
other executive officers with a base salary that is competitive
with the salaries offered by other bank holding companies of
comparable size in Indiana and the surrounding states. Each year
the Compensation Committee reviews salary surveys provided by
trade associations and accounting firms. Increases in base
compensation are not automatically based on increased compensation
at comparable institutions, however, but also reflect the
performance of the individual executive officer and of the
Corporation.
Based on an evaluation of individual performance, the
performance of the Corporation in 1995 and on information provided
by salary surveys, the Compensation Committee recommended, and the
Board approved the recommendation, that the base salary of
Mr. Astrike be set at the same amount for 1996 as it had been for
the previous year.
<PAGE>
<PAGE> 12
Annual Incentive Bonus Awards
Annual bonuses are awarded based on the extent that the
Compensation Committee believes that they are merited based on the
attainment of certain goals relating to the Corporation's return
of equity and return on assets. Based on these criteria, the
bonus awarded for 1996 to Mr. Astrike was higher than those
awarded to him in 1995 and 1994.
Stock Option Awards
In 1992 the Corporation adopted a Stock Option Plan that
provides for the award of incentive stock options and non-
qualified stock options. The purpose of granting options is to
provide long-term incentive compensation to complement the short-
term focus of annual incentive bonus awards. The size of stock
option awards depends upon the executive officer's level of
responsibility and individual performance. Stock options are
granted at the estimated fair market value of a Common Share of
the Corporation on the date of grant.
The four independent outside directors on the Compensation
Committee also serve as the Stock Option Committee of the
Corporation, which administers the Stock Option Plan. In April
1993 incentive stock options were awarded to Mr. Astrike and four
other executive officers. Mr. Astrike was granted options
covering 9,922 shares and the options granted the other executive
officers ranged in amount from 2,481 shares to 8,269 shares each
(all share amounts have been adjusted to reflect the December 1996
five percent stock dividend and have been rounded to the nearest
whole number). The option granted to Mr. Astrike vested
immediately with respect to half of the shares covered by the
option in recognition of his past years of service as Chief
Executive Officer of the Corporation and vested with respect to
the other half of the shares on April 20, 1994. The options
granted to the other executive officers vest in twenty percent
increments beginning one year after the date of grant and become
fully exercisable on the fifth anniversary of the grant date.
The only options granted under the Stock Option Plan during
1996 were replacement options. The Stock Option Plan provides
that if an optionee tenders Common Shares of the Corporation
already owned by the optionee in whole or partial payment of the
exercise price of an option, the Corporation will use its best
efforts to grant the optionee a replacement option covering a
number of shares equal to the number of already owned shares
tendered. A replacement option is of the same type (incentive or
non-qualified option) and has the same expiration date as the
option exercised. The per share exercise price of a replacement
option is the fair market value of a Common Share of the
Corporation on the date of exercise of the original option.
Replacement options were granted to Mr. Astrike on January 9,
1996, to one of the named executive officers on July 15, 1996, and
to the remaining named executive officer on January 9, 1996, and
July 15, 1996.
<PAGE>
<PAGE> 13
The Omnibus Budget Reconciliation Act enacted by the United
States Congress in August 1993 amended the Internal Revenue Code
of 1986 to disallow a public company's compensation deduction with
respect to certain highly-paid executives in excess of $1 million
unless certain conditions are satisfied. The Corporation
presently believes that this provision is unlikely to become
applicable in the near future to the Corporation because (a) the
levels of base salary and annual incentive bonus awards of the
Corporation's executive officers are substantially less than $1
million per annum, and (b) the law generally does not apply to
stock option plans that require that options be granted at not
less than fair market value, subject to certain conditions.
Therefore, the Corporation has not taken any action to adjust its
compensation plans or policies in response to the adoption of this
law.
SUBMITTED BY THE MEMBERS OF THE COMPENSATION COMMITTEE:
George W. Astrike Robert Ruckriegel
David Buehler Mark A. Schroeder
A. Wayne Place Joseph Steurer
Compensation Committee Interlocks and Insider Participation
Two of the persons who served during 1996 on the Compensation
Committee of the Corporation's Board of Directors, Messrs. Astrike
and Schroeder, are executive officers of the Corporation. Messrs
Astrike and Schroeder were not present for, and did not
participate in, any Compensation Committee proceedings relating to
the determination of their own compensation. None of the other
four members of the Compensation Committee is, or previously was,
an officer or employee of the Corporation.
Mr. Buehler, a member of the Compensation Committee, is a
principal shareholder, officer and director of Buehler Foods,
Inc., which subleases space for three branch banking facilities to
two of the Banks. On July 1, 1996, German American Bank exercised
its option to renew one of the subleases for an additional five-
year term. Scheduled rents payable to Buehler Foods, Inc. over
this renewal term will be, in the aggregate, approximately
$99,000. On July 25, 1996, First State Bank entered into a
sublease with Buehler Foods, Inc. to lease space in Tell City,
Indiana. The sublease has an initial term of five years and
provides options to renew the lease for three additional five-year
terms. Scheduled rents payable to Buehler Foods, Inc. for the
first five-year term will be, in the aggregate, approximately
$43,500.
Certain Business Relationships And Transactions
During 1996, the bank subsidiaries of the Corporation had
(and expect to continue to have in the future) banking
transactions in the ordinary course of business with Directors,
officers and principal shareholders of the Corporation and their
associates. These transactions have been made on substantially
the same terms, including interest rates, collateral and repayment
terms on extensions of credit, as those prevailing at the same
time for comparable transactions with others and did not involve
more than the normal risk of collectibility or present other
unfavorable features.<PAGE>
<PAGE> 14
Stock Performance Graph
The SEC requires the Corporation to include in this proxy
statement a line-graph presentation comparing the Corporation's
cumulative, five-year shareholder returns with market and industry
returns. The following graph compares the Corporation's
performance with the performance of the NASDAQ Stock Market (U.S.
Companies), NASDAQ Bank Stocks, and a peer group of bank holding
companies headquartered in Southern Indiana. The peer group
includes the following: AMBANC Corp.; CNB Bancshares, Inc.; First
Financial Corporation; Indiana United Bancorp; National City
Bancshares, Inc.; and Old National Bancorp. The returns of each
company in the peer group have been weighted to reflect the
company's market capitalization.
<TABLE>
<CAPTION)
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
German American 100.00 122.8 180.8 187.2 195.2 265.9
Bancorp
Southern Indiana 100.00 126.6 160.2 166.3 175.3 213.7
Bank Peer Group
NASDAQ Stock 100.0 116.4 133.6 130.6 184.7 227.2
Market (U.S.
Companies)
</TABLE>
Companies in Southern Indiana Bank Peer Group: AMBANC Corp.
(AMBK); CNB Bancshares, Inc. (BNK); First Financial Corp. (THFF);
Indiana United Bancorp (IUBC); National City Bancshares, Inc.
(NCBE); Old National Bancorp (OLDB).
PROPOSAL 2
PROPOSAL TO AMEND ARTICLES OF INCORPORATION
TO INCREASE NUMBER OF AUTHORIZED SHARES
The Board of Directors of the Corporation has approved and
adopted, subject to shareholder approval, an Amendment to the
Corporation's Articles of Incorporation that would provide for an
increase in the number of Common Shares, $10.00 par value per
share, authorized to be issued by the Corporation from 5,000,000
shares to 20,000,000 shares. The proposed increase in the number
of authorized Common Shares would be accomplished by amending
Article V of the Corporation's Articles of Incorporation to read
as follows:
"The total number of shares of capital stock that the
Corporation has authority to issue shall be 20,500,000
shares consisting of 20,000,000 common shares (the "Common
Shares") and 500,000 preferred shares (the "Preferred
Shares"). The Corporation's shares shall have a par value
of ten dollars ($10.00) per share."
<PAGE>
<PAGE> 15
The Board of Directors believes that the proposed increase
in the number of authorized Common Shares is in the best interests
of the Corporation. An increase in the number of authorized
Common Shares would provide the Corporation with greater
flexibility in making acquisitions, effecting stock splits, paying
stock dividends, and responding to possible future developments in
which the issuance of Common Shares may be desirable, as
determined appropriate by the Board of Directors. The Corporation
currently has no agreements or arrangements or other specific
plans for issuance of Common Shares in excess of the shares
currently authorized but unissued, other than pursuant to its
regular five percent annual stock dividend program. The
Corporation continues to pursue acquisition opportunities
aggressively, however, which could result in the issuance of
additional shares. As is the case with the Corporation's
presently authorized but unissued Common Shares, the issuance of
additional Common Shares, in most cases, would be within the
discretion of the Board of Directors without further action by the
shareholders.
The Corporation's Articles of Incorporation provide that
authorized but unissued Common Shares may be issued as the Board
of Directors may determine without any preemptive or other right
on the part of holders of previously issued Common Shares or other
shares of the Corporation, by reason of such ownership, to acquire
upon issuance any such newly authorized Common Shares. If the
proposed increase is approved, the Board could use the authorized
but unissued shares, at its discretion, to resist the consummation
of certain acquisition attempts, by, for example, diluting the
ownership of a substantial shareholder or substantially increasing
the amount of consideration necessary for a shareholder to obtain
control. As of the date of this Proxy Statement, the Board of
Directors is not aware of any specific effort to accumulate shares
or otherwise obtain control of the Corporation.
For approval, the proposal to amend the Corporation's
Articles of Incorporation to increase the authorized number of
Common Shares requires that the number of votes properly cast in
favor of the proposal exceed the number of votes properly cast
against the proposal. Shares present but not voted for or against
the proposal (including shares that abstain from voting and broker
non-votes) will not count as negative votes and will not affect
the determination of whether the proposal has been approved. If
approved by the shareholders at the Annual Meeting, the increase
in the number of authorized Common Shares would become effective
upon the filing of an amendment to the Corporation's Articles of
Incorporation with the Indiana Secretary of State.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR THE PROPOSAL TO AMEND THE CORPORATION'S ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON SHARES OF THE
CORPORATION FROM 5,000,000 SHARES TO 20,000,000 SHARES. (ITEM 2
ON THE PROXY). UNLESS A SHAREHOLDER INDICATES OTHERWISE, PROXY
HOLDERS WILL VOTE FOR THE PROPOSED AMENDMENT.
<PAGE>
<PAGE> 16
APPOINTMENT OF AUDITORS
Crowe, Chizek and Company LLP ("Crowe Chizek") served as
auditors for the Corporation in 1996. Although it is anticipated
that Crowe Chizek will be selected, the Audit Committee has not
yet considered the appointment of auditors for 1997.
Representatives of Crowe Chizek will be present at the Annual
Meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate
questions.
PRINCIPAL OWNERS OF COMMON SHARES
The following table sets forth information as of March 5,
1997, relating to every person, including any group, known by
management to beneficially own more than five percent of the
Corporation's outstanding Common Shares and the beneficial
ownership of the Corporation's Common Shares by all Directors and
officers as a group.
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Address Percent
of Beneficial Owner Amount and Nature of of
or Identity of Group Beneficial Ownership Class
Buehler Group (1) 144,818 5.7%
c/o David G. Buehler
1227 West 31st Street
Jasper, Indiana 47546
All Directors and 543,472(3) 21.4%
officers as a group,
consisting of 16 persons(2)
</TABLE>
(1) The Buehler Group consists of David G. Buehler, Brenda
Buehler, Buehler Foods, Inc. and the David G. Buehler
Charitable Trust. Buehler Foods, Inc., which owns of record
123,765 of these shares, is owned by David G. Buehler and his
brother, Joseph E. Buehler, who share voting and investment
power with respect to such shares. Mr. David Buehler owns
one share, he and his wife, Brenda Buehler, jointly own 3,051
shares, and the David G. Buehler Charitable Trust holds
18,000 shares. Mr. Joseph Buehler owns 123 shares.
(2) Includes the beneficial ownership as of March 5, 1997, of
Directors Graham and Thompson, who were appointed to the
Board of Directors effective March 31, 1997.
(3) Includes 3,639 shares that officers have options to purchase
that are exercisable within 60 days and 354,455 shares as to
which voting and investment powers are shared by members of
the group with spouses or others.
<PAGE>
<PAGE> 17
OTHER MATTERS
The Board of Directors knows of no matters, other than those
reported above, that are to be brought before the Annual Meeting.
However, if other matters properly come before the Annual Meeting,
it is the intention of the persons named in the enclosed form of
proxy to vote such proxy in accordance with their judgment on such
matters.
EXPENSES
All expenses in connection with this solicitation of proxies
will be borne by the Corporation.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
A shareholder desiring to submit a proposal for inclusion in
the Corporation's proxy statement for the 1998 Annual Meeting of
Shareholders must deliver the proposal so that it is received by
the Corporation no later than December 1, 1997. Proposals should
be mailed to Urban R. Giesler, Secretary of the Corporation, 711
Main Street, Jasper, Indiana 47546, by certified mail, return
receipt requested.
<PAGE>
APPENDIX
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
FOR THE 1997 ANNUAL MEETING OF SHAREHOLDERS OF
GERMAN AMERICAN BANCORP
I hereby appoint Larry J. Seger and Joseph F.
Steurer, and each of them, my proxies, with power of
substitution, to vote all Common Shares of German
American Bancorp that I am entitled to vote at the
Annual Meeting of Shareholders to be held at the
principal office of The German American Bank, 711 Main
Street, Jasper, Indiana, on April 24, 1997, at 10:00
a.m., Jasper time, and any adjournments thereof, as
provided herein.
THIS PROXY WILL BE VOTED AS SPECIFIED. IN THE
ABSENCE OF SPECIFICATIONS, THIS PROXY WILL BE VOTED FOR
ITEMS 1 AND 2. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1 AND 2.
This proxy may be revoked at any time prior to its
exercise upon compliance with the procedures set forth
in the Corporation's Proxy Statement, dated March 31,
1997.
SHAREHOLDERS SHOULD MARK, SIGN AND DATE THIS PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED POST-PAID
ENVELOPE.
1. ELECTION OF DIRECTORS
/__/ FOR all nominees listed below, as set forth
in the Corporation's Proxy Statement, dated
March 31, 1997 (except as marked to the
contrary below--see "Instructions")
George W. Astrike William R. Hoffman
David G. Buehler Michael B. Lett
David B. Graham A. Wayne ("Skip") Place, Jr.
/__/ WITHHOLD AUTHORITY to vote for all nominees
listed above
(Instructions: To withhold authority to vote for
any individual nominee, write that nominee's name
in the space
provided below.)
_________________________________________________
2. PROPOSAL TO AMEND ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED COMMON
SHARES FROM 5,000,000 TO 20,000,000
/__/ FOR /__/ AGAINST /__/ ABSTAIN
3. In their discretion, the proxies are
authorized to vote upon such other business
as may properly come before the meeting.
Dated:_____________ _______________________
_______________________
Signature or Signatures
(Please sign exactly as
your name appears on this
proxy. If shares are
issued in the name of two
or more persons, all such
persons should sign.
Trustees, executors and
others signing in a
representative capacity
should indicate the
capacity in which they
sign.)
