<PAGE> COVER 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. _____________]
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] 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)
GERMAN AMERICAN BANCORP
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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
<PAGE> COVER 2
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 PRELIMINARY PROXY
SOLICITATION MATERIALS
DATED MARCH 11, 1997
[PRELIMINARY -- SUBJECT TO COMPLETION]
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, Washington, Indiana ("Peoples"); Community Trust
Bank, Otwell, Indiana ("Community"); and First State
Bank, Southwestern 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 2,541,684 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
<PAGE> 3
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.
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.)
<PAGE>
<PAGE>4
<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 11,839 (3)
Chairman of the Board and Chief (0.5%)
Executive Officer of the Corporation (2)
61
David G. Buehler* 1984 144,940 (4)
President of Buehler Foods, Inc. (5.7%)
57
David B. Graham* 1997 (5) 40,936
Retired President, Graham (1.6%)
Cheese Corporation
[age]
William R. Hoffman* 1986 41,412 (6)
Farmer; Vice-President and Director of (1.6%)
Patoka Valley Feeds, Inc.
59
Michael B. Lett* 1993 102,354 (8)
Attorney, Lett & Jones (7) (4.0%)
52
Gene C. Mehne 1979 20,925 (9)
Vice President and Manager of (0.8%)
Mehne Farms, Inc.
52
A. Wayne ("Skip") Place, Jr.* 1990 15,709 (10)
President and Chief Executive Officer (0.6%)
of Jasper Rubber Products, Inc.
49
<PAGE>
<PAGE> 5
Robert L. Ruckriegel 1983 105,258 (11)
President of B. R. Associates, Inc. (4.1%)
(restaurants)
61
Mark A. Schroeder 1991 5,779 (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(5) 5,933
(0.2%)
</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.
(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 6,360 shares that Mr. Astrike has options
to purchase.
(4) 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 144,940 shares.
(5) Mr. Graham and Mr. Thompson, who have been members
of the Board of Directors of Peoples since 19____
and 19____, respectively, were appointed to the
Corporation's Board of Directors by action of the
<PAGE> 6
Board of Directors effective March ____, 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.
(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;
98,207 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; 300 shares which Mr. Place holds as
custodian for his son and two daughters; and 2,730
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 2,205 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.
<PAGE> 7
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
$______________ per month and [here describe regular and
committee meeting fees and whether such fees are paid
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 of 12 percent.
<PAGE> 8
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.
<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
Board
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.
<PAGE> 9
(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 $150,000) of the compensation that he
would otherwise be entitled to receive from German
American for his services. Interest is credited to the
amounts deferred by Mr. Astrike at the rate of the
greater of eight percent or the five-year moving average
of German American's return on equity, subject, however,
to a maximum to twelve percent. The amounts deferred by
Mr. Astrike are unfunded and Mr. Astrike's rights to such
deferred amounts are those of an unsecured general
creditor of German American. Mr. Astrike elected to
defer a portion of his 1996 salary. Mr. Astrike is not
eligible to receive profit sharing and matching
contributions pursuant to the German American Profit
Sharing and 401(k) Plan on deferred compensation.
Option/SAR* Grants In Last Fiscal Year
The following table presents information on the
stock option grants that were made during 1996 pursuant
to the German American Bancorp 1992 Stock Option Plan.
The only stock options granted during the year were
replacement options that were granted to optionees who
tendered already owned Common Shares of the Corporation
in payment of the exercise price for options that had
been granted to them in 1993. (Numbers of options and
per share exercise prices have been retroactively
adjusted to reflect subsequent stock splits and
dividends.)
<PAGE>
<PAGE> 10
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
% of Total
Options/SARs
Number Granted
Securities to
Underlying Employees
Options/ in Exercise or
SAR/s Fiscal Base Price Expiration
Name Granted Year ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C>
George W. Astrike 3,087(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.
(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
<PAGE> 11
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 $32.86
per share, subject to adjustment pursuant to the
Stock Option Plan, and become exercisable on July
16, 1997. The Stock Option Plan also provides that
if a corporate reorganization would result in the
termination of the Plan and unexercised options,
then all unexercised options will become
immediately exercisable regardless of any vesting
requirements.
Aggregated Option/SAR Exercises In
Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The following table sets forth information with
respect to options that have been granted to
Messrs. Astrike, Schroeder and Ruhe pursuant to the
German American Bancorp 1992 Stock Option Plan and the
option exercises that occurred during 1996. (Numbers of
options and per share exercise prices have been
retroactively adjusted to reflect subsequent stock splits
and dividends.)
<TABLE>
<CAPTION>
Shares Value
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
George W. Astrike 4,961 $50,106 6,360/0 options(1) $55,909/$0(4)
Mark A. Schroeder 1,654 $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> 12
(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
<PAGE> 13
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, 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
<PAGE> 14
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.
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.
<PAGE> 15
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
<PAGE> 15
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.
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
<PAGE> 16
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 two branch
banking facilities to the German American Bank. On March
1, 1996, German American Bank exercised its option to
renew one of the subleases for an additional fifteen-year
term that will expire on February 28, 2011. Scheduled
rents payable to Buehler Foods, Inc. over this renewal
term will be, in the aggregate, approximately
$274,500.00.
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.
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.
<PAGE>
<PAGE> 17
<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."
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
<PAGE> 18
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 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> 19
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>
Name and Address Percent
of Beneficial Owner Amount and Nature of of
or Identity of Group Beneficial Ownership Class
<S> <C> <C>
Buehler Group (1) 144,940 5.7%
c/o David G. Buehler
1227 West 31st Street
Jasper, Indiana 47546
All Directors and 543,961(3) 21.3%
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
<PAGE> 20
appointed to the Board of Directors effective March
____, 1997.
(3) Includes 10,476 shares that officers have options
to purchase that are exercisable within 60 days and
338,504 shares as to which voting and investment
powers are shared by members of the group with
spouses or others.
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.
<PAGE>
<PAGE> 21
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>
<PAGE> 22 [APPENDIX TO EDGAR FILING]
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
<PAGE> 23
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.)
