Indiana United Bancorp
201 N. Broadway
Greensburg, Indiana 47240
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on Tuesday, June 23, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Indiana United Bancorp (the "Company") will be held in the Conference
Center on the second floor of the Company's principal office at 201 N.
Broadway, Greensburg, Indiana, on Tuesday the 23rd day of June, 1998,
at 10:00 A.M. (Eastern Standard Time), for the following purposes:
1. To elect to the Board of Directors ten (10) directors to serve
until the next Annual Meeting and until their successors are elected
and qualified;
2. To consider a proposed amendment to the Articles of Incorporation
to increase the number of authorized Common Shares from 3,000,000 to
10,000,000.
3. To ratify the appointment of Geo. S. Olive & Co. LLC as the
Company's independent accountants for the fiscal year ending December
31, 1998; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on May 15,
1998 are entitled to notice of and to vote at the Annual Meeting. The
transfer books will not be closed.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED STAMPED ENVELOPE. IF YOU ARE ABLE TO ATTEND THE MEETING AND
WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY DO SO AT ANY TIME BEFORE
THE PROXY IS EXERCISED.
By Order of the Board of Directors,
SUE FAWBUSH
Secretary
Greensburg, Indiana
May 19, 1998
<PAGE>
INDIANA UNITED BANCORP
201 N. Broadway
Greensburg, Indiana 47240
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 23, 1998
INTRODUCTION
This Proxy Statement is being furnished to shareholders of Indiana
United Bancorp, an Indiana corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the
Company from holders of record of the Company's outstanding shares of
common stock, no par value per share (the "Common Stock"), as of the
close of business on May 15, 1998, for use at the Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held on
Tuesday, June 23, 1998, at 10:00 a.m. (Eastern Standard Time) in the
Conference Center on the second floor of the Company's principal office
at 201 N. Broadway, Greensburg, Indiana, and at any adjournment or
postponement thereof. This Proxy Statement is first being mailed to
the Company's shareholders on or about May 19, 1998.
Purposes of the Annual Meeting
At the Annual Meeting, holders of shares of Common Stock will be
asked to consider and to vote upon the following matters:
(i.) The election of ten directors of the Company who will serve until
the 1999 Annual Meeting and until their successors are elected and
qualified;
(ii.) A proposed amendment to the Articles of Incorporation to
increase the number of authorized Common Shares from 3,000,000 to
10,000,000;
(iii.) The appointment of Geo. S. Olive & Co. LLC as the Company's
independent accountants for the fiscal year ending December 31, 1998;
and
(iv.) Such other business as may properly come before the Annual
Meeting.
The Board of Directors has unanimously recommended that shareholders
vote "FOR" the election of the Board of Directors' ten nominees for election
as directors of the Company, "FOR" the proposed amendment to the Articles of
Incorporation, and "FOR" the ratification of the Board of Directors' appointment
of Geo. S. Olive & Co. LLC as the Company's independent accountants. As of
the date of this Proxy Statement, the Board of Directors knows of no other
business to come before the Annual Meeting.
Voting Rights and Proxy Information
Only holders of record of shares of Common Stock as of the close
of business on May 15, 1998 will be entitled to notice of and to vote
at the Annual Meeting or any adjournment or postponement thereof. Such
holders of shares of Common Stock are entitled to one vote per share on
any matter that may properly come before the Annual Meeting. The presence,
either in person or by properly executed proxy, of the holders of a majority
of the outstanding shares of Common Stock as of the record date is necessary
to constitute a quorum at the Annual Meeting. As of May 15, 1998, there were
2,387,314 shares of Common Stock outstanding.
The affirmative vote of a plurality of the shares of Common Stock
represented in person or by properly executed proxy at the Annual
Meeting is required to approve the election of each of the Company's
nominees for election as a director. The affirmative vote of a
majority of the shares of Common Stock voted is required to approve the
proposed amendment to the Articles of Incorporation, and to ratify the
appointment of Geo. S. Olive & Co. LLC as the Company's independent
accountants for the fiscal year ending December 31, 1998.
<PAGE>
All shares of Common Stock that are represented at the Annual
Meeting by properly executed proxies received prior to or at the Annual
Meeting and not revoked will be voted at the Annual Meeting in
accordance with the instructions indicated in such proxies. If no
instructions are indicated, such proxies will be voted for the election
of the Board of Directors' ten nominees as directors of the Company,
for the approval of the proposed amendment to the Articles of
Incorporation to increase the number of authorized Common Shares from
3,000,000 to 10,000,000 and for the ratification of the appointment of
Geo. S. Olive & Co. LLC as the Company's independent accountants.
Any proxy given pursuant to this solicitation may be revoked by
the person giving it at any time before it is voted. Proxies may be
revoked by (i) filing with the Secretary of the Company, at or before
the Annual Meeting, a written notice of revocation bearing a later date
than the proxy, (ii) duly executing a subsequent proxy relating to the
same shares of Common Stock and delivering it to the Secretary of the
Company at or before the Annual Meeting or (iii) attending the Annual
Meeting and voting in person (although attendance at the Annual Meeting
will not in and of itself constitute a revocation of a proxy). Any
written notice revoking a proxy should be sent to the Company, to the
attention of Sue Fawbush, Secretary.
The Company will bear the cost of this solicitation. In addition
to solicitation by mail, the Company will request banks, brokers, and
other custodian nominees and fiduciaries to supply proxy material to
the beneficial owners of Common Stock, and will reimburse them for
their expenses in so doing. Certain directors, officers and other
employees of the Company, not specially employed for this purpose, may
solicit proxies, without additional remuneration therefor, by personal
interview, mail, telephone, facsimile or other electronic means.
Annual Report
The Company's 1997 Annual Report, which includes consolidated
financial statements, accompanies this Proxy Statement.
Principal Shareholders
As of May 1, 1998, the following individuals or entities reported
beneficial ownership of Common Stock in excess of 5% of the Company's
outstanding Common Stock:
<TABLE>
<CAPTION>
Name and Address Number of Shares Percentage of
of Beneficial Owner Beneficially Owned(1) Outstanding Shares
<S> <C> <C> <C>
Robert S. Dunevant
3402 N. Dearborn Rd.
West Harrison, IN 47060 233,204 (2) 9.8%
Douglas T. Breeden
100 Europa Drive,
Suite 200
Chapel Hill, NC 27514 121,842 (3) 5.1%
</TABLE>
(1) The information contained in this column is based upon information
furnished to the Company by the named individuals and the shareholder
records of the Company. Except where otherwise indicated, this column
represents the number of shares beneficially owned, which includes
shares as to which a person has sole or shared voting and/or investment
power.
(2) Includes 102,643 shares held by Mr. Dunevant's wife, over which
Mr. Dunevant's wife has sole voting and investment power, and 2,502
shares held by the Unity Company, over which Mr. Dunevant has shared
voting and investment power.
(3) Includes 6,700 shares held by the Breeden Community Corporation,
Inc., over which Mr. Breeden has shared voting and investment power.
Does not include 3,150 shares held by Mr. Breeden's wife, over which
Mr. Breeden's wife has sole voting and investment power.
<PAGE>
ELECTION OF DIRECTORS
(Item 1 on Proxy)
A board of ten directors of the Company is to be elected at the
Annual Meeting, each of whom is to serve, subject to the provisions of
the Bylaws, until his successor is duly elected and qualified. The
names of the nominees proposed for election as directors, all of whom
are presently directors of the Company, are set forth below and the
following information is furnished with respect to each:
<TABLE>
<CAPTION>
Director of Common Stock Percentage
Principal Company Beneficially of
Occupation or Continuously Owned as Outstanding
Nominee Employment (1) Age Since of 5/1//98(2) Shares
<S> <C> <C> <C> <C> <C>
John E. Retired Senior 68 May 1, 1998 33,145(3) 1.4%
Back Vice President,
Sperry Rubber
and Plastics Co.
William G. Chairman and 48 April 25, 1989 110,999(4) 4.6%
Barron President,
Wm. G. Barron
Enterprises,
(commercial
real estate
broker,
manager and
developer)
Dale J. Partner, Deffner 65 May 1, 1998 70,481(5) 3.0%
Deffner and Tebbe
(public
accounting firm)
Robert S. Retired 78 May 1, 1998 233,204(7) 9.8%
Dunevant commercial banker
(6)
Philip A. Partner, Coldren 53 Sept. 16, 1987 8,372(8) less than 1%
Frantz & Frantz
(attorneys at
law)
Robert E. Chairman of the 59 its incorpor- 67,271(10) 2.8%
Hoptry Board and Chief ation on March
Executive Officer 30, 1983
of the Company(9)
James L. President and 46 May 1, 1998 22,345(12) less than 1%
Saner Chief Operating
Officer of the
Company (11)
Dale E. President, Smith 64 May 1, 1998 34,867(13) 1.5%
Smith Realty and
Insurance, Inc.
Martin G. Retired Farmer 71 March 30, 1983 40,817(14) 1.7%
Wilson
Edward J. President, E. M. 53 March 17, 1994 3,028(15) less than 1%
Zoeller Cummings Veneer,
Veneer, Inc.,
(manufacturer of
veneered
furniture parts)
All
directors
and
executive
officers as
a group (14
in number
including
the above-
named
persons) 639,646 26.8%
</TABLE>
(1) Except where otherwise indicated, this principal occupation or
employment has continued during the past five years.
(2) The information contained in this column is based upon information
furnished to the Company by the named individuals and the shareholder
records of the Company. Except where otherwise indicated, this column
represents the number of shares beneficially owned, which includes
shares as to which a person has sole or shared voting and/or investment
power.
(3) Includes 25,130 shares held by Mr. Back's wife over which he
shares voting and investment power.
<PAGE>
(4) Includes 7,773 shares held by Mr. Barron as custodian under the
Kentucky Uniform Gifts to Minors Act for the benefit of his children
and 4,985 shares held by Mr. Barron in his Individual Retirement
Account, over which Mr. Barron has sole voting and investment power.
Also includes 8,950 shares over which Mr. Barron has shared voting and
investment power with his mother, Frankie G. Barron, as co-trustee of
trusts for the benefit of certain family members of Mr. Barron. Also
includes 26,079 shares held by Mr. Barron's wife as trustee of a trust
for the benefit of Mr. Barron's wife and his children and 5,703 shares
held by Mr. Barron's wife in her Individual Retirement Account, over
which Mr. Barron's wife has sole voting and investment power. Mr.
Barron disclaims beneficial ownership of all shares in which his wife
has sole voting or investment power. Also includes 30,366 shares held
in the Barron Family Partnership, LTD, over which Mr. and Mrs. Barron
have shared voting and investment power.
(5) Includes 31,235 shares held directly by Mr. Deffner's wife and
3,466 shares held by Mr. Deffner's wife in her Individual Retirement
Account over which Mr. Deffner's wife has sole voting and investment
power. Also includes 3,466 shares held by Mr. Deffner through an
Individual Retirement Account, over which he has sole voting and
investment power.
(6) Mr. Dunevant holds the honorary position of Vice Chairman of the
Board of the Company. Prior to May 1, 1998, Mr. Dunevant was Chairman
of the Board of P.T.C. Bancorp and, prior to October 1, 1983, the Chief
Executive Officer of Peoples Trust Company, Brookville, Indiana.
(7) For information regarding Mr. Dunevant's beneficial ownership of
common stock, see footnote (2) under "INTRODUCTION - Principal
Shareholders".
(8) Includes 68 shares owned directly by Mr. Frantz's wife and 337
shares held by Mr. Frantz's wife through an Individual Retirement
Account, over which Mr. Frantz's wife has sole voting and investment
power. Also includes 2,995 shares held jointly by Mr. Frantz with his
wife, over which he shares voting and investment power and 1,932 shares
held in Mr. Frantz's Individual Retirement Account, over which he has
sole voting and investment power.
(9) Mr. Hoptry serves as Chairman of the Board and Chief Executive
Officer of the Company. Prior to May 1, 1998, Mr. Hoptry also served
as President of the Company.
(10) Includes 7,193 shares held by Mr. Hoptry through the Company's
Retirement and Savings Incentive Plan and 1,044 shares in his
Individual Retirement Account, over which he has sole voting and
investment power. Also includes 522 shares held by Mr. Hoptry's wife
through an Individual Retirement Account, over which Mr. Hoptry's wife
has sole voting and investment power.
(11) Mr. Saner serves as President and Chief Operating Officer of the
Company. Prior to May 1, 1998, Mr. Saner had served as President and
Chief Executive Officer of PTC Bancorp, which merged with the Company
on April 30, 1998.
(12) Includes 2,289 shares held jointly by Mr. Saner with his wife and
197 shares held for the benefit of Mr. Saner's sons, over which Mr.
Saner shares voting and investment power. Includes 571 shares held by
Mr. Saner's wife through an Individual Retirement Account, over which
Mr. Saner's wife has sole voting and investment power. Also includes
3,569 shares held by Mr. Saner through an Individual Retirement
Account, over which Mr. Saner has sole voting and investment power.
(13) Includes 16,662 shares held by Mr. Smith's wife, over which she
has sole voting and investment power. Also includes 6,020 shares held
for the benefit of Mr. Smith's minor grandchildren, and 4,318 shares
held by Mr. Smith's daughter, over which Mr. Smith shares voting and
investment power.
(14) Includes 22,000 shares owned by Mr. Wilson's wife over which she
has sole voting and investment power.
(15) Includes 460 shares owned by Mr. Zoeller's wife through an
Individual Retirement Account, over which Mr. Zoeller's wife has sole
voting and investment power. Includes 1,122 shares held jointly by Mr.
Zoeller with his wife and 56 shares held jointly with each of his two
daughters over which Mr. Zoeller shares voting and investment power.
Also includes 723 shares held by Mr. Zoeller in his Individual
Retirement Account over which he has sole voting and investment power.
The Company Board of Directors recommends a vote "FOR" the
election of each of the Company's nominees for election as a director.
<PAGE>
Shares of Common Stock of the Company represented by proxies
executed and received in the accompanying form will be voted for the
election of all of the above nominees as directors of the Company,
unless otherwise indicated. The Board of Directors does not
contemplate that any of the nominees will be unable to accept election
as a director for any reason. However, in the event that one or more
of such nominees is unable or unwilling to serve, the persons named in
the proxies or their substitutes shall have authority, according to
their judgment, to vote or to refrain from voting for other individuals
as directors.
The Board of Directors considers nominations of candidates for
election as directors. The Company's Bylaws establish an advance
notice procedure for shareholders to make nominations of candidates for
election as directors (the "Shareholder Notice Procedure"). The
Shareholder Notice Procedure provides that only persons who are
nominated by, or at the direction of, the Board of Directors, or by a
shareholder who has given timely written notice to the Secretary of the
Company prior to the meeting at which directors are to be elected, will
be eligible for election as directors of the Company. Under the
Shareholder Notice Procedure, to be timely, notice of shareholder
nominations to be made at an annual or special meeting must be received
by the Company not less than 60 days nor more than 90 days prior to the
scheduled date of the meeting (or, if less than 70 days notice or prior
public disclosure of the date of the meeting is given, the 10th day
following the earlier of (i) the day such notice was mailed or (ii) the
day such public disclosure was made).
Under the Shareholder Notice Procedure, a shareholder's notice to
the Company proposing to nominate a person for election as a director
must contain certain information, including, without limitation, the
identity and address of the nominating shareholder, the number of
shares of Common Stock that are owned by such shareholder and all
information regarding the proposed nominee that would be required to be
included in a proxy statement soliciting proxies for the proposed
nominee. If the Chairman of the Board or other officer presiding at a
meeting determines that a person was not nominated in accordance with
the Shareholder Notice Procedure, such person will not be eligible for
election as a director.
By requiring advance notice of nominations by shareholders, the
Shareholder Notice Procedure affords the Board an opportunity to
consider the qualifications of the proposed nominees and, to the extent
deemed necessary or desirable by the Board, to inform shareholders
about such qualifications.
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
Directors who are not officers of the Company are paid an annual
retainer of $5,000 for serving on the Board plus an attendance fee of
$750 per meeting. The retainer is based on six regular meetings
annually. During 1997, the Board met ten times. After completion of
the merger with PTC Bancorp, the Board agreed to hold twelve regular
meetings annually. The Board of Directors has an Audit Committee and a
Compensation Committee. Committee members are paid an attendance fee
of $750 per meeting held on a day on which there is not a Board
meeting.
The Audit Committee held six meetings during 1997. The members of
the committee during 1997, none of whom are employees of the Company,
were William G. Barron, Philip A. Frantz (who served as chairman of the
Audit Committee), Martin G. Wilson, and Edward J. Zoeller. Following
the merger with PTC Bancorp, the Audit Committee was reconstituted to
consist of John E. Back, Robert S. Dunevant, Philip A. Frantz, Dale E.
Smith and Edward J. Zoeller, none of whom are employees of the Company.
The functions of the Audit Committee include review of the programs of
the Company's internal auditors, the results of their audits and the
adequacy of the Company's system of internal controls and accounting
practices. In addition, the committee has direct access to the
Company's independent accountants, Geo. S. Olive & Co. LLC, and reviews
the scope of their annual audit prior to its commencement and reviews
the types of services for which the Company retains Geo. S. Olive & Co.
LLC. The committee also reviews all regulatory examination reports.
The Compensation Committee held one meeting during 1997 for the
purpose of discussing the factors and criteria upon which the
compensation of the Company's executive officers will be based in 1998.
The members of the committee, none of whom are employees of the
Company, were the same four directors that served on the Audit
Committee during 1997. Following the merger with PTC Bancorp, the
Compensation Committee was reconstituted to consist of William G.
Barron, Dale J. Deffner, Robert S. Dunevant, Philip A. Frantz and
Edward J. Zoeller, none of whom are employees of the Company. The
function of the Compensation Committee is to establish the compensation
of members of executive management.
The Company does not have a Nominating Committee.
<PAGE>
SECTION 16(a) - BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and holders of 10% or more of
the outstanding Common Stock to file reports concerning their direct or
indirect ownership of Company securities. The Company believes that
all such reports were filed timely in compliance with Section 16(a)
during 1997.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the names and ages of all executive
officers of the Company and their positions. Except as set forth
below, each executive officer has held the specified position for the
last five years.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C> <C>
Robert E. Hoptry 59 Chairman of the Board and
Chief Executive Officer (1)
James L. Saner 46 President and Chief Operating
Officer (2)
Jay B. Fager 50 Treasurer and Chief Financial
Officer (3)
Daryl R. Tressler 46 Vice President (4)
Michael K. Bauer 43 Vice President (5)
Lynn T. Gordon 48 Vice President (6)
</TABLE>
1. Prior to May 1, 1998, Mr. Hoptry was also President of the Company.
2. Prior to May 1, 1998, Mr. Saner was the President and Chief Executive
Officer of P.T.C. Bancorp.
3. Mr. Fager was elected Treasurer and Chief Financial Officer in
September 1995. From January 1995 to September 1995, he served as
Senior Vice President and Controller of the Company's subsidiary, Union
Bank and Trust Company of Indiana, and, from April 1990 to September
1995, as Vice President and Controller of that subsidiary.
4. Mr. Tressler has served as President and Chief Executive Officer
of the Company's subsidiary, Union Bank and Trust Company of Indiana,
since January 11, 1994 and, additionally, as Chairman of the Board of
that subsidiary since April 26, 1994. He previously served as President and
Chief Executive Officer of a former subsidiary of the Company, Peoples Bank,
Portland, Indiana, from February 1, 1989 through June 30, 1994, when Peoples
Bank merged with the Company's other commercial bank subsidiary, Union Bank
and Trust Company of Greensburg, to form Union Bank and Trust Company of
Indiana.
5. Mr. Bauer has served as President and Chief Executive Officer of
the Company's subsidiary, Regional Federal Savings Bank, since
September 6, 1995 and, additionally, as Chairman of the Board of that
subsidiary since May 22, 1996. From 1988 to September 1995, Mr. Bauer
was President and Chief Executive Officer of Harris Bank, Bartlett,
Illinois.
6. Mr. Gordon has served as President and Chief Executive Officer of
the Company's subsidiary, Peoples Trust Company, (acquired on April 30,
1998 in the merger with P.T.C. Bancorp), since May 1, 1998. Since
October, 1997, Mr. Gordon has served as President of Peoples Trust
Company and, prior to that time, as Executive Vice President of that
bank.
EXECUTIVE COMPENSATION
Report of Compensation Committee
The Compensation of the Company's executive officers is determined
by the Compensation Committee comprised solely of non-employee
directors of the Company. Salary ranges are established for all
positions within the Company based upon comparative peer data as
reported by the Indiana Bankers Association ("IBA") and the Bank
Administration Institute ("BAI"). IBA data states the average
compensation of a chief executive officer operating a $200 to $500
million banking organization in the Midwest region (Indiana, Illinois,
Ohio and Michigan) is $197,400. According to BAI data, the average
compensation paid to the chief executive officer operating a $250 to
$500 million banking organization in the Midwest region (Illinois,
Indiana, Michigan, Ohio and Wisconsin) is $219,691. The Company's
established salary range for 1997 was $123,000 to $216,000 for its
chief executive officer. The Compensation Committee considers the
market performance of the Company's Common Stock relative to the market
performance of the NASDAQ Market Index (U.S.) and the NASDAQ Financial
Stocks Index, and the Company's overall performance for the year, in
establishing the compensation for the Chief Executive Officer within
the approved salary range. The key performance measure the Committee
used in determining Mr. Hoptry's 1997 compensation was its assessment
of his ability and dedication to enhance the long-term value of the
Company by continuing to provide the leadership and vision he has
provided throughout his tenure as Chief Executive Officer.
<PAGE>
In 1995, the Company initiated an incentive compensation plan
under which substantially all employees of the Company and its
subsidiaries are eligible. The plan considers the performance of each
subsidiary as well as consolidated results. The 1998 payout, based on
1997 results, was 5.00% of wages paid to parent Company employees;
4.72% to Union Bank employees; and 6.13% to Regional Bank employees.
COMPENSATION COMMITTEE
/s/ William G. Barron, Chairman
/s/ Philip A. Frantz
/s/ Martin G. Wilson
/s/ Edward J. Zoeller
Summary Compensation Table
The following table summarizes compensation earned in 1997, 1996,
and 1995, by the Company's Chief Executive Officer, and 1997 and 1996 (where
applicable) compensation earned for affiliate Chief Executive Officers.
<TABLE>
<CAPTION>
Annual Compensation
Other Annual
Year Salary($) Bonus($) Compensation($)
Name and Principal Position(a) (b) (c) (d) (e)(1)
<S> <C> <C> <C> <C>
Robert E. Hoptry 1997 178,260 9,382
Chairman of the Board, and 1996 158,839 6,142
Chief Executive Officer 1995 151,300 1,531
Michael K. Bauer 1997 121,352 7,925
Chairman of the Board, 1996 120,050 3,277
President and Chief Executive
Officer of Regional Bank
Daryl R. Tressler 1997 111,910 5,544
Chairman of the Board, 1996 107,609 4,453
President and Chief Executive 1995 103,000 2,629
Officer of Union Bank
</TABLE>
<TABLE>
<CAPTION>
Long-Term Compensation
Awards Payouts
Restricted All Other
Stock Options LTIP Compensa-
Year Awards($) SARs(#) Payouts($) tion($)(2)
Name and Principal Position(a) (b) (f) (g) (h) (i)
<S> <C> <C> <C> <C> <C>
Robert E. Hoptry 1997 26,290
Chairman of the Board, and 1996 21,015
Chief Executive Officer 1995 20,795
Michael K. Bauer 1997 15,922
Chairman of the Board, 1996
President and Chief Executive
Officer of Regional Bank
Daryl R. Tressler 1997 16,854
Chairman of the Board, 1996 16,048
President and Chief Executive 1995 14,441
Officer of Union Bank
</TABLE>
(1) The only type of other annual compensation for each of the named
officers was in the form of perquisites, and was less than the level
required for reporting.
(2) Employer contributions to the Company's Retirement and Savings
Incentive Plan and matching contributions under the Company's 401 (k)
feature within that Plan.
<PAGE>
Performance Graph
The following graph compares the change in the Company's
cumulative total shareholder return on its Common Stock with the NASDAQ
Market Index (U.S.) and the NASDAQ Financial Stocks Index.
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Assuming $100 invested on 12/31/1992 with dividends reinvested
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
NASDAQ Market Index (U.S.) 100.000 114.796 112.214 158.699 195.192 239.527
NASDAQ Financial Stocks Index 100.000 116.226 116.501 169.671 217.500 333.805
Indiana United Bancorp 100.000 115.101 111.588 136.510 163.212 261.216
</TABLE>
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's subsidiaries have made, and expect to make in the
future to the extent permitted by applicable federal and state banking
laws, bank loans in the ordinary course of business to directors and
officers of the Company and its subsidiaries, and their affiliates and
associates, on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable
transactions with other persons. In the opinion of the Company, such
loans do not involve more than a normal risk of collectibility or
present other unfavorable features. In addition, the Company's banking
subsidiaries have engaged, and in the future may engage, in
transactions with such persons and their affiliates and associates as a
depositary of funds, transfer agent, registrar, fiduciary and provider
of other similar services.
AMENDMENT TO ARTICLES OF INCORPORATION
(Item 2 on Proxy)
The Board of Directors of the Company has proposed to amend
Article V of the Articles of Incorporation of the Company by submitting
to the shareholders for their consideration an amendment to the
Articles of Incorporation that would increase the number of authorized
Common Shares from 3,000,000 to 10,000,000 (the "Amendment"). The
Amendment would not change the number of authorized Preferred Shares,
nor would the Amendment alter any provision governing the issuance of
Common Shares or Preferred Shares except for the number of shares
authorized to be issued. The Company desires to have the additional
authorized Common Shares available for issuance as the need arises in
connection with future acquisitions, combinations, equity financings,
share distributions and dividends, employee benefit plans and other
corporate purposes. The additional authorized Common Shares would be
issuable by the Company without further authorization by shareholders
on such terms as the Company's Board of Directors may lawfully
determine. The effect of the authorization and issuance of additional
Common Shares (other than on a pro rata basis among holders of Common
Shares) would be to dilute the present voting power of some or all of
the holders of Common Shares. Holders of Common Shares have no
preemptive rights.
The power to issue a greater number of Common Shares, in addition
to the other corporate purposes discussed above, could enable the Board
of Directors to make more difficult the replacement of incumbent
directors or the accomplishment of certain business combinations
opposed by the Board. The Amendment could also enhance the Board's
ability to maintain incumbent management or to discourage or defeat
proposals that are not in the shareholders' best interests, in the view
of the Board of Directors, but that may be supported by holders of a
significant percentage of the Company's Common Shares.
The Amendment will be approved if, assuming the presence of a
quorum at the Annual Meeting, the number of votes cast for the
Amendment exceeds the number of votes cast against it at the Annual
Meeting. Abstentions and broker non-votes will not be treated as votes
for or against the Amendment.
The Board of Directors unanimously recommends that shareholders
vote "FOR" approval of the Amendment.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Item 3 on Proxy)
The Company has appointed Geo. S. Olive & Co. LLC, Indianapolis,
Indiana, as the Company's independent accountants for the fiscal year
ending December 31, 1998. Geo. S. Olive & Co. LLC has served as the
Company's independent accountants since 1983. Services provided to the
Company and its subsidiaries by Geo. S. Olive & Co. LLC with respect to
the fiscal year ended December 31, 1997 included the examination of the
Company's consolidated financial statements and consultations on
various tax matters. Representatives of Geo. S. Olive & Co. LLC will
be present at the Annual Meeting to respond to appropriate questions
and to make such statements as they may desire.
<PAGE>
In the event shareholders do not ratify the selection of Geo. S.
Olive & Co. LLC as the Company's independent accountants for the
forthcoming fiscal year, such appointment will be reconsidered by the
Board.
The Board recommends that shareholders vote "FOR" ratification of
the appointment of Geo. S. Olive & Co. LLC as the Company's independent
accountants for the 1998 fiscal year.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 1999
Annual Meeting of Shareholders must be received by the Company by
January 19, 1999 in order to be considered for inclusion in the Proxy
Statement for the 1999 Annual Meeting.
The Company's Bylaws establish an advance notice procedure for
shareholders to bring business before an annual meeting of shareholders
of the Company (the "Shareholder Notice Procedure"). The Shareholder
Notice Procedure provides that at an annual meeting only such business
may be conducted as has been brought before the meeting by, or at the
direction of, the Board or by a shareholder who has given timely
written notice to the Secretary of the Company of such shareholder's
intention to bring such business before such meeting. Under the
Shareholder Notice Procedure, to be timely, notice of shareholder
proposals to be made at an annual meeting must be received by the
Company not less than 60 days nor more than 90 days prior to the
scheduled date of the meeting (or, if less than 70 days notice or prior
public disclosure of the date of the meeting is given, the 10th day
following the earlier of (i) the day such notice was mailed or (ii) the
day such public disclosure was made).
Under the Shareholder Notice Procedure, a shareholder's notice
relating to the conduct of business must contain certain information
about such business and about the proposing shareholder, including,
without limitation, a brief description of the business the shareholder
proposes to bring before the annual meeting, the reasons for conducting
such business at such meeting, the name and address of such
shareholder, the number of shares of Common Stock of the Company
beneficially owned by such shareholder and any material interest of
such shareholder in the business so proposed. If the Chairman of the
Board or other officer presiding at a meeting determines that such
business was not brought before the meeting in accordance with the
Shareholder Notice Procedure, such business will not be conducted at
such meeting.
By requiring advance notice of other proposed business, the
Shareholder Notice Procedure is intended to provide an orderly
procedure for conducting annual meetings of shareholders and, to the
extent deemed necessary or desirable by the Board, will provide the
Board with an opportunity to inform shareholders, prior to such
meetings, of any business proposed to be conducted at such meetings,
together with any recommendations as to the Board's position regarding
action to be taken with respect to such business, so that shareholders
can better decide whether to attend such a meeting or to grant a proxy
regarding the disposition of any such business.
OTHER MATTERS
The only matters to be considered at the meeting or any
adjournment thereof, so far as known to the Board of Directors, are
those set forth in the Notice of Annual Meeting of Shareholders and
routine matters incident to the conduct of the meeting. However, if
any other matters should properly come before the meeting or any
adjournment thereof, the Board of Directors intends that the persons
named in the accompanying proxy form, or their substitutes, will vote
the shares represented by such proxy form in accordance with their best
judgment on such matters.
Incorporation of Certain Documents by Reference
All reports and definitive proxy or information statements filed
by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934 subsequent to the date of this Proxy
Statement and prior to the date of the Annual Meeting will be deemed to
be incorporated by reference into this Proxy Statement from the dates
of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated in this Proxy Statement shall
be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein or in any
other subsequently filed document that also is or is deemed to be
incorporated by reference modifies or supersedes such statement.
By order of the Board of Directors,
SUE FAWBUSH
Secretary
Greensburg, Indiana
May 19, 1998
