<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
Commission on (as permitted
[ X ] Definitive Proxy Statement by Rule 14a-b(e)(21))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
HORIZON BANCORP, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement)
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 transactions applies:
(3) Per unit price other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
HORIZON BANCORP, INC.
ONE PARK AVENUE
P. O. BOX D
BECKLEY, WEST VIRGINIA 25802-2803
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 22, 1997
----------
To the Shareholders:
You are hereby notified that the Annual Meeting of Shareholders of
Horizon Bancorp, Inc., will be held on Tuesday, April 22, 1997, at 4:00 p.m.,
at The Greenbrier, White Sulphur Springs, West Virginia, for the purpose of
considering and voting upon the following:
1) To elect twenty-four directors to serve until the next Annual Meeting
of Shareholders or until their respective successors are elected and
qualified;
2) To ratify the selection of Ernst & Young LLP by Horizon's Board of
Directors as independent auditors for the year 1997;
3) To amend and approve the Horizon Incentive Stock Option Plan, which is
being amended to increase the number of shares allocated to the plan;
and
4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only those shareholders of record at the close of business on March 5,
1997, shall be entitled to notice of the meeting and to vote at the meeting.
A proxy statement and proxy are enclosed herewith. Even if you plan to
attend the meeting in person, you are urged to sign, date and return the proxy
promptly in the enclosed addressed envelope which requires no postage. If you
attend the meeting in person, you may withdraw your proxy and vote your shares
in person. Your proxy may also be revoked at any time prior to the meeting in
the manner described in the proxy statement.
By Order of the Board of Directors,
Frank S. Harkins, Jr.
Chairman of the Board and
Chief Executive Officer
Philip L. McLaughlin
President and Chief Operating Officer
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. IF YOU PLAN TO ATTEND THE
MEETING, PLEASE CHECK THE APPROPRIATE BOX ON THE PROXY CARD INDICATING THE
NUMBER OF PERSONS WHO WILL ATTEND. THE MEETING WILL BEGIN PROMPTLY AT 4:00
P.M., AND A SHAREHOLDERS' RECEPTION WILL BE HELD FOLLOWING THE MEETING.
Beckley, West Virginia
March 31, 1997
<PAGE> 3
HORIZON BANCORP, INC.
ONE PARK AVENUE
P. O. BOX D
BECKLEY, WEST VIRGINIA 25802-2803
----------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 22, 1997
----------
This statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting (the "Annual Meeting") of Shareholders of
Horizon Bancorp, Inc. ("Horizon") to be held Tuesday, April 22, 1997, at 4:00
p.m. at The Greenbrier, White Sulphur Springs, West Virginia, and any
adjournments thereof. The principal executive office of Horizon is One Park
Avenue, Beckley, West Virginia 25801.
SOLICITATION AND REVOCABILITY OF PROXIES
The solicitation of proxies is made by management at the direction of
the Board of Directors of Horizon, and a proxy may be revoked by the
shareholder giving it any time before it is voted. These proxies enable
shareholders to vote on all matters which are scheduled to come before the
meeting. The enclosed proxy may be revoked at any time before it is voted by
notifying Horizon in person, by giving written notice to Horizon of the
revocation of the proxy, by submitting to Horizon a subsequently dated proxy or
by attending the meeting and withdrawing the proxy. If the enclosed proxy is
signed and returned it will be voted as directed. If not directed, the proxy
will be voted "FOR" the election of management nominees as directors, "FOR" the
ratification of the selection of Ernst & Young LLP as independent auditors and
"FOR" the amendment to the Horizon Incentive Stock Option Plan to increase the
number of shares authorized by the plan for option grants.
Horizon will pay the expense for the solicitation of proxies. In
addition to the solicitation by mail, officers and employees of Horizon and its
subsidiaries may solicit proxies personally or by telephone or telegraph,
although no person will be engaged specifically for that purpose.
ELIGIBILITY OF STOCK FOR VOTING PURPOSES
Only shareholders of record at the close of business on March 5, 1997,
will be entitled to receive notice of and to vote at the Annual Meeting or any
adjournment thereof. As of March 5, 1997, 9,297,837 shares of common stock, par
value $1.00 per share ("Common Stock") were outstanding and entitled to vote at
the meeting.
The Bank of Raleigh, a wholly-owned subsidiary of Horizon, holds of
record as trustee, agent, or executor, but not beneficially, 332,951 shares of
Horizon Common Stock representing 3.58% of the shares of Horizon Common Stock
outstanding. The Bank of Raleigh holds all of these shares as agent or sole
trustee of certain revocable and irrevocable trusts and as sole executor of
certain estates. These shares will be voted by the
1
<PAGE> 4
Bank of Raleigh pursuant to the terms of the trust agreement or at the
direction of either the principal or the grantor, in the case of revocable
trusts, and at the direction of the majority of adult beneficiaries, in the
case of irrevocable trusts and in the case of estates in which the Bank of
Raleigh serves as sole executor.
Twentieth Street Bank, a wholly-owned subsidiary of Horizon, holds of
record as trustee, agent, custodian or executor, but not beneficially, 360,732
shares of stock representing 3.88% of the shares of Horizon Common Stock
outstanding. These shares will be voted pursuant to the terms of the trust
agreements or at the direction of either the principal or the grantor, in the
case of revocable trusts, and at the direction of the majority of adult
beneficiaries, in the case of irrevocable trusts and in the case of estates in
which the Twentieth Street Bank serves as sole executor.
PURPOSE OF MEETING
1. ELECTION OF DIRECTORS
Horizon's Bylaws provide that the Board of Directors shall consist of
not fewer than five and no more than thirty directors, as fixed and determined,
from time to time, by Horizon's Board of Directors. The Board of Directors has
fixed the number of directors to be elected at the Annual Meeting and to
constitute the full Board of Directors of Horizon at twenty-four.
Horizon's Bylaws provide that at each election for directors,
shareholders entitled to vote shall have the right to vote, in person or by
proxy, the number of shares owned by them for as many persons as there are
directors to be elected, or to cumulate their votes by giving one candidate as
many votes as the number of such directors multiplied by the number of their
shares shall equal, or by distributing such votes on the same principle among
any number of candidates. If any shares are voted cumulatively for the election
of directors, the proxies, unless otherwise directed, will have full discretion
and authority to cumulate their votes and to vote for less than all such
nominees.
To be eligible for nomination and election at an Annual Meeting, no
director shall have attained the age of seventy as of the date of the meeting.
The individuals that Horizon's management has nominated for election at the
Annual Meeting satisfy this requirement. A director need not be a resident of
the State of West Virginia.
Horizon's Bylaws provide that nominations, other than those made by or
on behalf of Horizon's existing management, shall be made in writing and shall
be delivered or mailed to the chairman or president of Horizon not less than
fourteen days nor more than fifty days prior to the Annual Meeting. If less
than twenty-one days' notice of the meeting is given to shareholders, such
nomination shall be mailed or delivered to the chairman or president of Horizon
no later than the close of business on the seventh day following the day on
which
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<PAGE> 5
the notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) the name and
address of each proposed nominee; (b) the principal occupation of each proposed
nominee; (c) the total number of shares of capital stock of Horizon that will
be voted for each proposed nominee; (d) the name and residence address of the
notifying shareholder; and (e) the number of shares of capital stock of Horizon
owned by the notifying shareholder. Nominations not made in accordance herewith
may, in Horizon's discretion, be disregarded by the chairman of the meeting,
and upon his instruction, the vote tellers may disregard all votes cast for
each nominee.
MANAGEMENT NOMINEES TO THE BOARD OF DIRECTORS
Set forth below are the persons who Horizon's management will nominate
for election at the Annual Meeting to serve as directors of Horizon until the
1998 Annual Meeting of Shareholders, or until their successors are elected and
qualified. The table sets forth background information on each director
nominee. All positions set forth under the column "Principal Occupation or
Employment Last 5 Years" are currently held unless otherwise indicated.
<TABLE>
<CAPTION>
SERVED
AS A FAMILY
DIRECTOR RELATIONSHIP
OF WITH
HORIZON OTHER PRINCIPAL OCCUPATION OR
NOMINEES AGE SINCE NOMINEES EMPLOYMENT LAST 5 YEARS
-------- --- ----- -------- -----------------------
<S> <C> <C> <C> <C>
John M. Alderson, IV 67 1993 None Retired Claims Agent--State Farm Insurance
Company, Lewisburg, WV; Owner--J. M.
Alderson Store, Alderson, WV (Retail);
Director--Allegheny Bankshares Corporation,
Lewisburg, WV (Until 1993); Director--The First
National Bank of Alderson, Alderson, WV;
Director--Greenbrier Valley National Bank,
Lewisburg, WV
Jack G. Bazemore (2) 62 1996 None President--Jabo Supply Corporation, Huntington,
WV; Director--The Twentieth Street Bank, Inc.,
Huntington, WV; Director--Twentieth Bancorp,
Inc., Huntington, WV (Until 1996)
Joseph M. Blankenship 45 1997 None Assistant Vice President and Branch
Manager--National Bank of Summers of Hinton,
Hinton, WV (Until 1997); Director, President and
Chief Executive Officer--National Bank of
Summers of Hinton, Hinton, WV
Phillip W. Cain 49 1995 None Executive Vice President, Chief Executive Officer
and Director--First National Bank of Marlinton,
Marlinton, WV
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
SERVED
AS A FAMILY
DIRECTOR RELATIONSHIP
OF WITH
HORIZON OTHER PRINCIPAL OCCUPATION OR
NOMINEES AGE SINCE NOMINEES EMPLOYMENT LAST 5 YEARS
-------- --- ----- -------- -----------------------
<S> <C> <C> <C> <C>
William C. Dolin (2) 59 1996 None President--Dolin Supply Co., Huntington, WV;
Director--The Twentieth Street Bank, Inc.,
Huntington, WV; Director--Twentieth Bancorp,
Inc., Huntington, WV (Until 1996)
W. H. File, III 49 1993 (1) Partner--File, Payne, Scherer & File, Beckley, WV
(law firm); Director--Bank of Raleigh, Beckley, WV
David W. Hambrick 55 1993 None President and Chief Operating Officer--Allegheny
Bankshares Corporation, Lewisburg, WV (Until
1993); Executive Vice President--Greenbrier
Valley National Bank, Lewisburg, WV;
Director--First National Bank in Marlinton,
Marlinton, WV; Executive Vice
President--Horizon Bancorp, Inc., Beckley, WV;
Chief Financial Officer--Horizon Bancorp, Inc.,
Beckley, WV (Until 1996)
Frank S. Harkins, Jr. 57 1982 None Chairman of the Board and Chief Executive
Officer--Horizon Bancorp, Inc.;
Director--National Bank of Summers of Hinton,
Hinton, WV; Director--Greenbrier Valley National
Bank, Lewisburg, WV; Director, President and
Chief Executive Officer--Bank of Raleigh,
Beckley, WV; Director--The Twentieth Street
Bank, Inc., Huntington, WV
Tracy W. Hylton, II 48 1993 None President--Eller, Inc., Beckley, WV (Surface
Mining); President--Nell Jean Industries, Inc.,
Mabscott, WV (Mine Supply); President--Upper
Laurel Company, Skelton, WV; President--New
Land Leasing Company, Inc., Skelton, WV;
President--MIN, Inc., Beckley, WV (Surface
Mining); President--Gracie, Inc., Mabscott, WV
(Land Leasing); President--Tammie Lynn Coal
Company, Inc., Skelton, WV (Surface Mining);
Vice President--Nell Jean Enterprises, Beckley,
WV (Retail); President--Lightning, Inc., Skelton,
WV (Land Leasing); President--Patience, Inc.,
Skelton, WV (Surface Mining); Director--Bank of
Raleigh, Beckley, WV
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
SERVED
AS A FAMILY
DIRECTOR RELATIONSHIP
OF WITH
HORIZON OTHER PRINCIPAL OCCUPATION OR
NOMINEES AGE SINCE NOMINEES EMPLOYMENT LAST 5 YEARS
-------- --- ----- -------- -----------------------
<S> <C> <C> <C> <C>
Robert L. Kosnoski 62 1993 None President--Mountaineer Parts & Repair, Inc., Mt.
Hope, WV; President--Beckley Flying Service,
Beckley, WV; President--Paint Creek Coal Co.,
Mt. Hope, WV (Coal Mining); Director--Bank of
Raleigh, Beckley, WV
Thomas E. Lilly 58 1993 None Chairman and Chief Executive Officer--Lillys'
Crown Jewelers Corporation, Beckley, WV (Retail
Jewelry); Partner--J.T.J., Limited Liability
Company, Beckley, WV; Director--Bank of
Raleigh, Beckley, WV
Clarence E. Martin 57 1996 None Chief Executive Officer and Chief Financial
Officer--Arthur's Enterprises, Inc., Huntington,
WV; Director--The Twentieth Street Bank, Inc.,
Huntington, WV; Director--Twentieth Bancorp,
Inc., Huntington, WV (1994-1996)
Carolyn H. McCulloch 68 1984 None Director and Chairman of the Board--Bank of
Raleigh, Beckley, WV;
B. C. McGinnis, III (2) 54 1996 (1) President--Twentieth Bancorp, Inc., Huntington,
WV (Director 1983-1996); President and
Director--The Twentieth Street Bank, Inc.,
Huntington, WV; Executive Vice
President--Horizon Bancorp, Inc., Beckley, WV
Jack McGinnis (2) 68 1996 (1) President--Huntington Land Company,
Barboursville, WV; Director--The Twentieth
Street Bank, Inc., Huntington, WV;
Director--Twentieth Bancorp, Inc., Huntington,
WV (Until 1996)
Thomas L. McGinnis (2) 48 1996 (1) Vice President and Director (Until
1996)--Twentieth Bancorp, Inc., Huntington, WV;
Executive Vice President and Director--The
Twentieth Street Bank, Inc., Huntington, WV
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
SERVED
AS A FAMILY
DIRECTOR RELATIONSHIP
OF WITH
HORIZON OTHER PRINCIPAL OCCUPATION OR
NOMINEES AGE SINCE NOMINEES EMPLOYMENT LAST 5 YEARS
-------- --- ----- -------- -----------------------
<S> <C> <C> <C> <C>
Philip L. McLaughlin 56 1993 None President and Chief Operating Officer--Horizon
Bancorp, Inc., Beckley, WV; Director, Chairman
of the Board and Chief Executive Officer--Allegheny
Bankshares Corporation, Lewisburg, WV (Until
1993); Director, President and Chief Executive
Officer--Greenbrier Valley National Bank,
Lewisburg, WV; Director--First National Bank in
Marlinton, Marlinton, WV; Director--Bank of
Raleigh, Beckley, WV; Director--The Twentieth
Street Bank, Inc., Huntington, WV
Harper W. Nelson 59 1993 None Director, Vice President and Secretary--Marlinton
Electric Co., Inc., Marlinton, WV (Petroleum);
Director--WV Petroleum Marketers Association,
Marlinton, WV (Marketer of Petroleum);
Director--First National Bank of Marlinton,
Marlinton, WV; Director--Allegheny Bankshares
Corporation, Lewisburg, WV (Until 1993)
Rodney H. Pack 61 1993 None Executive Vice President--Acme Limestone
Corporation, Fort Springs, WV (Crushed
Limestone Manufacturing) (Until 1994); Vice
President, Sales and Administration--Acme
Limestone Corporation, Fort Springs, WV;
President--Raleigh Ready Mix and Asphalt, Inc.,
Sprague, WV (Portland Cement Concrete and
Asphaltic Supplier) (Until 1994); President--Wolf
Creek Corporation, Alderson, WV (Land
Development); Director--Greenbrier Valley
National Bank, Lewisburg, WV;
Director--Allegheny Bankshares Corporation,
Lewisburg, WV (Until 1993)
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
SERVED
AS A FAMILY
DIRECTOR RELATIONSHIP
OF WITH
HORIZON OTHER PRINCIPAL OCCUPATION OR
NOMINEES AGE SINCE NOMINEES EMPLOYMENT LAST 5 YEARS
-------- --- ----- -------- -----------------------
<S> <C> <C> <C> <C>
E. M. Payne III 61 1985 (1) Partner--File, Payne, Scherer & File, Beckley, WV
(Law Firm); President--Piney Land
Company, Beckley, WV (Land Development,
Coal, Gas and Timber);
President--McCreery Coal Land Company,
Beckley, WV (Land Development, Coal, Gas
and Timber); President--Combahee
Investment Corporation, Beckley, WV
(Land Management and Development);
President--Hilton Head Equity Management
Co., Inc., Beckley, WV (Land Management
and Development); President--The James
T. McCreery Company, Inc., Beckley, WV
(Land Development, Coal and Timber);
Secretary and Treasurer--Horizon
Bancorp, Inc.; Director--Bank of
Raleigh, Beckley, WV
R. T. Rogers 63 1985 None President and Chief Executive Officer--R. T.
Rogers Oil Co., Hinton, WV (Oil and Fuel
Distributor); Director--National Bank of Summers
of Hinton, Hinton, WV
Sharon H. Rowe 45 1996 None Director of Advertising and Marketing--The
Greenbrier, White Sulphur Springs, WV
James E. Songer 64 1985 None President--Homeseekers Land & Building Co.,
Inc., Beckley, WV (Real Estate);
President--Songer Insurance, Inc., Beckley, WV
(Insurance); President--Sunset Memorial Park, Inc.
(Perpetual Care); Director--Bank of Raleigh,
Beckley, WV
Albert M. Tieche, Jr. 44 1992 None Assistant Administrator and Treasurer--Beckley
Hospital, Inc., Beckley, WV; Administrator and
Treasurer--Beckley Hospital, Inc., Beckley, WV;
President--Extend-A-Care, Inc. (Health Care);
Director--Bank of Raleigh, Beckley, WV
- -----
</TABLE>
(1) W. H. File, III and E. M. Payne III are brothers-in-law. B. C. McGinnis,
III and Thomas L. McGinnis are brothers. Jack McGinnis is second cousin to
B. C. McGinnis, III and Thomas L. McGinnis.
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<PAGE> 10
(2) On August 31, 1996, Twentieth Bancorp, Inc. ("Twentieth"), headquartered
in Huntington, West Virginia, merged with and into Horizon. As a result of
the merger, Twentieth ceased to exist and the Twentieth Street Bank became
a wholly-owned subsidiary of Horizon. Under the terms of the Plan of
Merger and Reorganization, Jack G. Bazemore, William Dolin, Clarence E.
Martin, B. C. McGinnis, III, Jack McGinnis and Thomas L. McGinnis were
elected to Horizon's Board of Directors.
If, prior to the Annual Meeting any nominee for election as a director would be
unexpectedly unable to serve as director, management may vote the proxies for a
substitute nominee or nominees, if any, designated by Horizon's Board of
Directors.
COMPENSATION OF DIRECTORS
Horizon's directors, who are not employees of Horizon's subsidiaries,
were compensated $500 for each board meeting attended in 1996. Beginning
December 1996, non-employee directors serving on Horizon's Executive Committee,
Compensation and Benefits Committee, and the Audit Committee receive $350 for
each meeting attended. During 1996, there were no other arrangements pursuant
to which any director of Horizon or its subsidiaries was compensated for
services as a director.
COMMITTEES OF THE HORIZON BOARD OF DIRECTORS
Horizon's Board of Directors met six times during 1996. Each director
attended at least 75% of all meetings held except for Rodney H. Pack. Horizon's
Board of Directors had three standing committees during 1996 consisting of the
Executive Committee, the Audit Committee and the Compensation and Benefits
Committee. Each committee submits a report of activities to the full Board for
ratification. Horizon does not have a standing Nominating Committee; however,
Horizon's Board of Directors is responsible for selecting the director
nominees.
The Executive Committee consists of Frank S. Harkins, Jr. (Chairman),
David W. Hambrick, Carolyn H. McCulloch, Philip L. McLaughlin, Harper W.
Nelson, Rodney H. Pack, E. M. Payne III and James E. Songer. The committee met
three times during 1996. Pursuant to the terms of the Plan of Merger and
Reorganization (the "Merger Agreement") entered into by Horizon and Twentieth
Bancorp, Inc. ("Twentieth"), whereby Twentieth was merged with and into Horizon
(the "Merger"), William C. Dolin, B. C. McGinnis, III and Thomas L. McGinnis
were appointed to the Executive Committee in August 1996. Each member of the
committee attended at least 75% of all meetings held during the period for
which he or she served on the committee. The Executive Committee performs the
functions set forth by Horizon's Board of Directors and makes recommendations
to the Board.
The Audit Committee consists of Thomas E. Lilly (Chairman), Jack G.
Bazemore, Harper W. Nelson, Rodney H. Pack and Albert M. Tieche, Jr. Jack
L. Hellems, a director of The National Bank of Summers of Hinton, serves as an
ex officio member of the Audit Committee. The
8
<PAGE> 11
committee met five times during 1996. Pursuant to the terms of the Merger
Agreement, Jack Bazemore was appointed to the Audit Committee in August 1996.
Each member of the committee attended at least 75% of all meetings held during
the period in which he served. The Audit Committee reviews and evaluates
significant matters relating to Horizon's internal audit program, reviews the
internal control structure and recommends the engagement of the independent
auditors.
The Compensation and Benefits Committee consists of E. M. Payne III
(Chairman), Clarence E. Martin, Carolyn H. McCulloch, Harper W. Nelson, Rodney
H. Pack and James E. Songer. The committee met seven times during 1996. Each
member of the committee attended at least 75% of all meetings held during the
period for which he or she served on the Committee. The Compensation and
Benefits Committee recommends the compensation arrangements for senior
management and the allocation of options to be granted under the Horizon
Incentive Stock Option Plan.
EXECUTIVE OFFICERS OF HORIZON
The following table lists Horizon's principal executive officers. See
"Executive Compensation--Compensation and Benefits Committee of the Board
Report on Executive Compensation."
<TABLE>
<CAPTION>
NAME AGE BANKING EXPERIENCE AND QUALIFICATIONS
---- --- -------------------------------------
<S> <C> <C>
Frank S. Harkins, Jr. 57 1961 to 1976, Vice President of Kanawha Valley Bank,
N.A.; 1976 to 1986, Executive Vice President and
Chief Executive Officer of Bank of Raleigh; 1986 to
present, Director, President and Chief Executive Officer
of Bank of Raleigh; 1983 to 1993, President and Chief
Executive Officer of Horizon Bancorp, Inc.; Member of
Executive, Trust and Investment Committees of
Bank of Raleigh; 1985 to present, Director of
National Bank of Summers of Hinton; 1996 to present,
Director of The Twentieth Street Bank, Inc.; 1993 to
present, Chairman of the Board of Horizon Bancorp,
Inc.; 1996 to present, Chairman of the Board and
Chief Executive Officer of Horizon Bancorp, Inc.
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
NAME AGE BANKING EXPERIENCE AND QUALIFICATIONS
---- --- -------------------------------------
<S> <C> <C>
Philip L. McLaughlin 56 1987 to 1993, Director, Chairman of the Board and Chief
Executive Officer of Allegheny Bankshares Corporation; 1970 to
present, Director of Greenbrier Valley National
Bank; 1986 to present, President, Chief Executive
Officer and Director of Greenbrier Valley National
Bank; Member of Executive and Investment Committees of
Greenbrier Valley National Bank; Director of First
National Bank of Marlinton; 1996 to present, Director of
The Twentieth Street Bank, Inc.; 1993 to 1996,
President and Chief Executive Officer of Horizon
Bancorp, Inc.; 1996 to present, President and Chief
Operating Officer of Horizon Bancorp, Inc.
David W. Hambrick 55 1987 to 1993, President and Chief Operating Officer of
Allegheny Bankshares Corporation; 1986 to present,
Director and Executive Vice President of Greenbrier Valley
National Bank; Member of Executive Trust and Investment
Committees of Greenbrier Valley National Bank; Director
of First National Bank in Marlinton; 1993 to 1996,
Executive Vice President and Chief Financial Officer of
Horizon Bancorp, Inc.; 1993 to present, Executive Vice
President of Horizon Bancorp, Inc.
B. C. McGinnis, III 54 1983 to 1996, President of Twentieth Bancorp, Inc.; 1983 to
present, President of The Twentieth Street Bank, Inc.; 1996
to present, Executive Vice President of Horizon Bancorp,
Inc.
</TABLE>
10
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 6, 1997, no shareholder beneficially owned more than 5%
of Horizon's voting securities.
The following table sets forth as of February 15, 1997, certain
information with respect to Horizon's Common Stock owned beneficially by
Horizon's directors, each of the executive officers listed in the Summary
Compensation Table and executive officers of Horizon as a group. Shares have
been adjusted for the two-for-one stock split effected in the form of a 100%
stock dividend declared October 21, 1996, for shareholders of record December
1, 1996, payable December 15, 1996.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------ -------------------- ----------------
<S> <C> <C>
John M. Alderson, IV 18,068 *
Jack G. Bazemore 1,272 (1) *
Joseph M. Blankenship 394 *
Phillip W. Cain 3,986 (2) *
William C. Dolin 100,260 (3) 1.08
W. H. File, III 7,180 (4) *
David W. Hambrick 22,202 (5) *
Frank S. Harkins, Jr. 25,435 (6) *
Tracy W. Hylton, II 7,165 *
Robert L. Kosnoski 42,092 *
Thomas E. Lilly 5,131 (7) *
Clarence E. Martin 1,212 *
Carolyn H. McCulloch 315,852 (8) 3.40
B. C. McGinnis, III 110,026 (9) 1.18
Jack McGinnis 163,118 (10) 1.75
Thomas L. McGinnis 105,782 (11) 1.14
Philip L. McLaughlin 22,608 (12) *
Harper W. Nelson 7,926 (13) *
Rodney H. Pack 13,532 (14) *
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
------------------------ -------------------- ----------------
<S> <C> <C>
E. M. Payne III 48,670 (15) *
R. T. Rogers 20,192 (16) *
Sharon H. Rowe 16,490 (17) *
James E. Songer 53,535 (18) *
Albert M. Tieche, Jr. 33,006 (19) *
All directors and executive
officers of Horizon as a 1,145,134 12.32
group (24 individuals including
those named above)
</TABLE>
- ------
* Beneficial ownership does not exceed one percent of the class.
(1) Consists of 666 shares owned of record; and 606 shares owned joint with
spouse.
(2) Consists of 3,745 shares owned of record; 168 shares owned by spouse; and
73 shares owned as custodian for son.
(3) Consists of 66,568 shares owned of record; 1,212 shares owned by spouse;
and 32,480 shares in an Individual Retirement Account.
(4) Consists of 6,730 shares owned of record; and 450 shares owned as
custodian for son.
(5) Consists of 19,690 shares owned of record; and 2,512 shares owned by
spouse.
(6) Consists of 4,101 shares owned of record; 12,380 shares owned in an
Individual Retirement Account; 7,354 shares owned jointly with spouse;
1,400 shares owned by spouse; and 200 shares owned jointly with mother.
(7) Consists of 1,023 shares owned of record; 1,308 shares owned by Lillys'
Crown Jewelers, Inc. of which Mr. Lilly is Chairman and Chief Executive
Officer; and 2,800 shares owned by Lilly Family Trust of which Mr. Lilly
is Trustee.
(8) Consists of 30,276 shares owned of record; 213,060 shares owned by
sister-in-law, Polly Jo Masters, for which Mrs. McCulloch holds a special
power of attorney to vote the shares; and 72,516 shares held by Bank of
Raleigh, Trustee for John H. McCulloch Revocable Life Insurance
Trust-Marital Trust, of which Mrs. McCulloch is beneficiary.
(9) Consists of 67,410 shares owned of record; 10,592 shares owned jointly
with spouse; 16,012 shares owned as custodian for son; and 16,012 shares
owned as custodian for son.
12
<PAGE> 15
(10) Consists of 157,488 shares owned of record; and 5,630 shares owned by
spouse.
(11) Consists of 67,434 shares owned of record; 19,318 shares owned jointly
with spouse; 13,358 shares owned by daughter; 2,836 shares owned by
spouse as custodian for son; and 2,836 shares owned by spouse as custodian
for daughter.
(12) Consists of 21,024 shares owned of record; 54 shares owned jointly with
spouse; 180 shares owned by spouse; and 1,350 shares in an Individual
Retirement Account.
(13) Consists of 5,828 shares owned of record; and 2,098 shares owned jointly
with spouse.
(14) Consists of 1,628 shares owned of record; 6,864 shares owned jointly with
spouse; and 5,040 shares owned jointly with mother.
(15) Consists of 4,406 shares owned of record; 8,282 shares owned by family
members; 16,010 shares owned by Piney Land Company of which Mr. Payne is
President; 5,972 shares owned by McCreery Coal Land Company of which Mr.
Payne is President; 600 shares owned by Combahee Investment Corporation
of which Mr. Payne is President; 8,000 shares owned by Hilton Head Equity
Management Company of which Mr. Payne is President; and 5,400 shares
owned by James T. McCreery Company of which Mr. Payne is Vice President.
(16) Consists of 17,542 shares held of record; 850 shares owned by spouse; and
1,800 shares owned jointly with spouse.
(17) Consists of 16,482 shares held of record; and 8 shares owned as custodian
for daughter.
(18) Consists of 40,704 shares owned of record; 468 shares owned by spouse;
5,151 shares owned by Songer Insurance Company of which Mr. Songer is
President; 4,121 shares owned by Homeseekers Land and Building Co., Inc.
of which Mr. Songer is President; and 3,091 shares owned by Sunset
Memorial Park, Inc. of which Mr. Songer is President.
(19) Consists of 26,006 shares owned of record; and 7,000 shares owned by
Beckley Hospital, Inc. Employee's Retirement Plan and Trust. Mr. Tieche
is Administrator of Beckley Hospital, Inc. Employee's Retirement Plan and
Trust and Administrator and Treasurer of Beckley Hospital, Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
Horizon's directors, executive officers and persons who own more than 10% of a
registered class of Horizon's equity securities to file with the Securities and
Exchange Commission ("SEC") reports of ownership and changes in ownership of
common stock and other equity securities of Horizon. Officers, directors and
greater than 10% shareholders are required by SEC regulation to furnish Horizon
with copies of all Section 16(a) forms they file.
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<PAGE> 16
Bank of Raleigh holds a special Power of Attorney to file Section
16(a) forms on behalf of Horizon's directors. Based solely on a review of the
copies of such reports furnished to Horizon or on written representations that
no other reports were required, Horizon believes that during the 1996 fiscal
year, all filing requirements applicable to its officers, directors and greater
than 10% beneficial owners were complied with except that Frank S. Harkins, Jr.
purchased 256 shares on May 7, 1996, for his Individual Retirement Account and
inadvertently failed to report the purchase on Form 4; Rodney H. Pack purchased
1,100 shares on July 12, 1994, jointly with his spouse and failed to report the
purchase on Form 4; on August 5, 1994, R. T. Rogers purchased 1,800 shares
jointly with his spouse and 200 shares in his spouse's name and inadvertently
failed to report these purchases on Form 4; Bank of Raleigh Trust and Financial
Services Division, Trustee for Beckley Hospital Retirement Plan, sold 2,000
shares registered in the name of Beckley Hospital Retirement Plan and Trust on
October 23, 1996 and 3,000 shares on October 29, 1996. Albert M. Tieche, Jr. is
Administrator of Beckley Hospital, Inc. Employee's Retirement Plan and Trust
and Administrator and Treasurer of Beckley Hospital, Inc. Mr. Tieche
inadvertently failed to report these sales of shares on Form 4. Shares have
been stated to reflect the results of a two-for-one stock split effected in the
form of a 100% stock dividend declared October 21, 1996, for shareholders of
record December 1, 1996, payable December 15, 1996. All of the above
transactions were reported on Form 5's on February 13, 1997.
14
<PAGE> 17
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
for services to Horizon for the fiscal years ended December 31, 1996, 1995 and
1994 of those persons who were, as of December 31, 1996, the chief executive
officer and the four other most highly compensated officers of Horizon.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------------- ------ --------------------------
NUMBER OF
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING
NAME AND ANNUAL AWARD ($) OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION (2) SARS (3) COMPENSATION
------------------ ---- ---------- --------- ------------- ----- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Frank S. Harkins, Jr. 1996 165,496 60,000 -- -- 5,500 7,200 (4)
Chairman of the 1995 159,500 -- -- 9,480 (2) 7,000 13,783 (4)
Board and Chief 1994 159,500 -- 2,400 (1) 7,271 (2) 4,000 13,279 (4)
Executive Officer
Philip L. McLaughlin 1996 173,735 26,040 -- -- 5,500 --
President and Chief 1995 158,351 -- -- -- 7,000 --
Operating Officer 1994 140,480 10,237 -- -- 4,000 --
David W. Hambrick 1996 100,037 10,120 -- -- -- --
Executive V.P. 1995 106,232 -- -- -- -- --
1994 110,480 -- -- -- 600 --
B. C. McGinnis, III 1996 159,814 (5) -- 1,833 (6) -- 1,000 7,600 (5)
Executive V.P.
</TABLE>
- -----
(1) Includes FICA Tax on non-qualified deferred compensation applied in 1994,
the year in which Mr. Harkins attained age 55 and 15 years of service.
This tax was paid by Bank of Raleigh. No other compensation or benefits
were received by the named executive officers in an amount exceeding
$50,000 or 10% of total salary and bonus.
(2) Pursuant to Horizon's Employee Stock Ownership Plan ("ESOP"),
contributions were made by two of Horizon's affiliate banks, Bank of
Raleigh and National Bank of Summers of Hinton. Shares of Horizon Common
Stock were acquired and allocated to each participant's account in the
same proportion that each such participant's compensation for the year
bears to the total compensation paid to all participants. The stock was
held in trust for distribution upon the employee's separation from
service. Amounts in the table represent the value of the shares allocated
to Mr. Harkins' ESOP account for fiscal years 1995 and 1994. These shares
vested upon the completion of seven years of service with Horizon. On
15
<PAGE> 18
December 29, 1995, Mr. Harkins received 5,922 shares with an aggregate
market value of $233,919. Pursuant to a Resolution of the Horizon Board of
Directors, the ESOP was terminated and the vested shares and cash were
distributed to each participant on December 29, 1995.
(3) An incentive stock option plan was approved at the meeting of
shareholders held on June 8, 1993. Pursuant to the plan, shares were
granted in 1996 to the named individuals as set forth in the "Option/SAR
Grants in Last Fiscal Year" table and were also granted in 1995 to
Messrs. Harkins, Hambrick and McLaughlin. The number of shares has been
adjusted for the two-for-one stock split effected in the form of a 100%
stock dividend paid December 15, 1996.
(4) Includes $3,600 paid by National Bank of Summers of Hinton for directors
meetings in 1996, all of which was deferred pursuant to the Directors'
Deferred Compensation Plan, and $3,600 paid by Bank of Raleigh in 1996,
all of which was deferred. Includes $3,600 paid by National Bank of
Summers of Hinton for directors meetings in 1995, all of which was
deferred pursuant to the Directors' Deferred Compensation Plan, and
$3,600 paid by Bank of Raleigh in 1995, all of which was deferred.
Includes $3,600 paid by National Bank of Summers of Hinton for directors
meetings in 1994, all of which was deferred pursuant to the Directors'
Deferred Compensation Plan, and $3,600 paid by Bank of Raleigh in 1994,
all of which was deferred. See "Directors' Deferred Compensation Plans."
Includes $6,583, consisting of dividends and interest accrued in 1995 in
connection with the ESOP, and includes $6,079, consisting of dividends
and interest accrued in 1994 in connection with the ESOP.
(5) On August 31, 1996, Twentieth Bancorp, Inc. ("Twentieth") merged with and
into Horizon (the "Merger"). Pursuant to the terms of the Merger, B. C.
McGinnis, III, formerly President of Twentieth and its wholly-owned
subsidiary, Twentieth Street Bank, Inc., became an executive vice
president of Horizon. Amounts listed in the Summary Compensation Table
include amounts paid in 1996 to these individuals by Twentieth prior to
the Merger and by Horizon after the Merger. The amount included in "All
Other Compensation" for Mr. McGinnis consists of Twentieth's contribution
of $2,800 on behalf of Mr. McGinnis to Twentieth's 401(k) Plan, pursuant
to which participating employees received a matching contribution of .25%
from Twentieth for up to 5% of the employee's salary. This amount also
includes $4,800 representing directors' fees. Mr. McGinnis received
$15,000 bonus in 1996 which was earned in 1995. This amount is not
included in the Compensation Table.
(6) The Twentieth Street Bank, Inc. pays to its Senior Vice Presidents and
above a sum of money annually to be used for purchasing life insurance.
During 1996, B. C. McGinnis, III received $1,833.
The following table sets forth certain information concerning
Options/SARs granted during 1996 to the named executive officers and all
optionees as a group. None of the options granted were exercisable during 1996.
The options granted will be exercisable as follows: (a) on and after the second
anniversary of the date of grant, up to one-third of the total number of option
shares; and (b) on and after the third anniversary of the date of grant, up to
an additional one-third of the total number of option shares; and (c) on and
after the fourth anniversary of the date of grant the remaining option shares.
The number of shares and exercise price have been adjusted for the two-for-one
stock split effected in the form of a 100% stock dividend paid December 15,
1996.
16
<PAGE> 19
<TABLE>
<CAPTION>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- -----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/ EMPLOYEES IN OR BASE
SARS FISCAL PRICE EXPIRATION
NAME GRANTED YEAR ($/SHARE) DATE 0% ($) 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Frank S. Harkins, Jr. 5,500 27.5 20.00 11/30/2001 0 30,360 67,210
Philip L. McLaughlin 5,500 27.5 20.00 11/30/2001 0 30,360 67,210
B. C. McGinnis, III 1,000 5 20.00 11/30/2001 0 5,520 12,220
All Optionees 20,000 100 20.00 11/30/2001 0 110,400 244,400
(including the three
listed above)
</TABLE>
The following table indicates, for purposes of illustration, the
approximate annual retirement benefits that would be payable in the life
annuity form under various assumptions as to salary and years of service for a
participant obtaining age sixty-five in 1996. The benefit amounts are not
subject to reduction for Social Security.
<TABLE>
<CAPTION>
RETIREMENT BENEFITS
YEARS OF SERVICE
AVERAGE COMPENSATION 10 20 30
- -------------------- -- -- --
<S> <C> <C> <C>
$ 20,000............................................. $ 3,520 $ 7,040 $10,560
$ 40,000............................................. 7,520 15,040 22,560
$ 60,000............................................. 11,520 23,040 34,560
$ 75,000............................................. 14,520 29,040 43,560
$100,000............................................. 19,520 39,040 58,560
$125,000............................................. 24,520 49,040 73,560
$150,000............................................. 29,520 59,040 88,560
</TABLE>
17
<PAGE> 20
Prior to the acquisition of Allegheny Bankshares, Inc., Horizon
sponsored a non-contributory retirement plan for its employees which provided a
benefit of .8% of average compensation for each year of service up to thirty
years, plus .65% of average compensation in excess of covered compensation for
each year of service up to thirty years, plus .5% of average compensation for
each year of service in excess of thirty years, up to a maximum of ten years of
service. Effective April 1, 1993, the benefit formula in Horizon's plan was
amended to be the same as the benefit formula in the Allegheny Bankshares
Defined Benefit Plan. This formula provides for a benefit of 1.5% of one's
first $9,600, and 2% of W-2 earnings in excess of $9,600, multiplied by years
of service up to thirty. The chart above is based upon the revised benefit
formula. Participants in the Horizon plan prior to April 1, 1993, will have
the old Horizon formula in effect on March 31, 1993, plus the amount under the
new benefit formula set forth above for years of service after March 31, 1993.
In general, the chart above will overstate the actual pension benefit for
employees who participated in the Horizon plan prior to April 1, 1993.
Compensation covered by the pension plan is based upon total pay. The
Internal Revenue Code prohibits compensation in excess of $150,000 (as indexed)
to be taken into account in determining one's pension benefit. Normal
retirement age is sixty-five under the plan. The plan provides for early
retirement between ages fifty-five and sixty-five with at least ten years of
service.
As of December 31, 1996, the current credited years of service and
projected estimated annual benefit under the retirement plan (assuming that
each continues employment, the plan is not terminated or amended, current
compensation increases under the plan's assumptions and that the maximum
compensation allowed under the code does not exceed $150,000) for the following
officers is:
<TABLE>
<CAPTION>
NAME CURRENT SERVICE PROJECTED PENSION
- ---- --------------- -----------------
<S> <C> <C>
Frank S. Harkins, Jr................... 19 $69,156
Philip L. McLaughlin................... 28 88,560
David W. Hambrick...................... 30 93,263
B. C. McGinnis, III.................... 0 31,520
</TABLE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in Horizon's
cumulative total shareholder return on its Common Stock for the five-year
period ending December 31, 1996, with the cumulative total return of Standard &
Poors 500 Stock Index and the Media General Industry Group Index-04, which
consists of all banks and bank holding companies within the United States whose
stock has been publicly traded for at least six years. The listings of the
banks and bank holding companies in the index are not listed by SIC code. The
graph assumes (i) the reinvestment of all dividends, and (ii) an initial
investment of $100. There is no assurance that Horizon's stock performance will
continue in the future with the same or similar trends as depicted in the
graph. The graph shall not be deemed
18
<PAGE> 21
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, except to the extent that
Horizon specifically incorporates this graph by reference, and this graph shall
not otherwise be filed under such Acts.
Prior to the listing of Horizon's Common Stock on Nasdaq in mid-1993,
Horizon's Common Stock was not traded on any formalized exchange.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
----------------FISCAL YEAR ENDING----------------
COMPANY 1991 1992 1993 1994 1995 1996
- ------- ---- ---- ---- ---- ---- ----
HORIZON BANCORP 100 157.94 183.00 193.43 277.50 300.57
MG GROUP INDEX 100 119.14 140.83 133.61 188.94 261.26
S&P 500 INDEX 100 107.64 118.50 120.06 165.18 203.11
19
<PAGE> 22
COMPENSATION AND BENEFITS COMMITTEE OF THE BOARD
REPORT ON EXECUTIVE COMPENSATION
During 1996, the Compensation and Benefits Committee of Horizon's
Board of Directors (the "Compensation Committee") was initially composed of the
following independent, non-employee directors: E. M. Payne III, Chairman, John
C. Horton, Jr., Carolyn H. McCulloch, James E. Songer and Rodney H. Pack. After
the death of John C. Horton, Jr., Frank S. Harkins, Jr., Horizon's Chairman of
the Board, appointed Harper W. Nelson as Mr. Horton's replacement. Following
the Twentieth Bancorp merger, Clarence E. Martin was added as the sixth
independent, non-employee director. The Compensation Committee met seven times
in 1996.
Based upon recommendations made by the Compensation Committee in June
1996, on August 14, 1996, the Board of Director's amended Horizon's bylaws to
provide for a chairman and chief executive officer and a president and chief
operating officer. Mr. Harkins, formerly Horizon's chairman, was elected
chairman and chief executive officer, and Mr. McLaughlin, formerly president
and chief executive officer, was elected president and chief operating officer.
The Compensation Committee also reports and makes recommendations to
the Board relating to the establishment of compensation policies, plans, and
programs for Horizon's executives, including Frank S. Harkins, Jr. and Philip
L. McLaughlin. The Compensation Committee is responsible for the award of
stock options as authorized by the Horizon Incentive Stock Option Plan (the
"Plan"). In this regard, the Compensation Committee considers and oversees the
development of employment programs to retain, attract and equitably compensate
its principal executive officers (i.e., Mr. Harkins and Mr. McLaughlin) and
other senior executive officers in order to motivate these executives to
achieve Horizon's short and long-term financial and other goals, to recognize
individual contributions as well as overall business results and to ensure
Horizon's economic success. The Compensation Committee's objective is to
provide total compensation that is sufficient to attract and retain highly
capable executives.
Each year, the Compensation Committee reviews Horizon's senior
executive compensation practices and guidelines and recommends any changes
needed to achieve this objective. The existing salary ranges for senior
executives are substantially equivalent to those found in positions of similar
responsibility level and type within comparable financial institutions. In
considering the compensation and benefit levels of Mr. Harkins, Mr. McLaughlin
and other senior executives, the Compensation Committee gives due consideration
to the following four concepts:
1. Establishing pay packages that give executives an incentive to
create long-term value for Horizon's shareholders;
2. Establishing a program which provides highly competitive financial
rewards for executives who meet or exceed earnings and other
financial
20
<PAGE> 23
targets such as efficiency ratios, ROA, net interest margin and
enhanced shareholder value;
3. Establishing a program whereby an executive's compensation
corresponds more closely to the fortunes of Horizon's individual
shareholders; and
4. Placing greater emphasis on short-term and long-term internal
value-added performance measures as well as shareholder return
expectations in relation to Horizon's banking peers.
During 1996, the Compensation Committee met three times with regard to
the award of stock options. In granting options, the Compensation Committee
considered the Plan's objectives which are to promote the interests of Horizon
and its shareholders by encouraging full-time employees to acquire shares of
Horizon Common Stock, thereby obtaining a proprietary interest in its business
and an increased personal interest in its continued success and progress.
In March 1996, the individual employment contracts with Mr. Harkins
and Mr. McLaughlin both expired by their terms. Each of these officers has
continued to serve in their respective capacities at the same compensation and
benefit levels as provided in their previous employment contracts. The
Compensation Committee is currently reviewing Horizon's compensation policies,
plans and programs and is considering new employment contracts to be entered
into by Horizon and each of Mr. Harkins and Mr. McLaughlin. In developing these
new contracts, the Compensation Committee intends to engage a third-party
consultant to study the compensation and benefits of Horizon's senior
executives and to offer an evaluation and recommendation for 1997, including a
recommendation regarding the potential terms of new employment contracts, if
any, to be entered into with Mr. Harkins and Mr. McLaughlin. Currently, the
Compensation Committee expects that the level of compensation and benefits
provided for in any new employment contracts will be incentive based and
primarily depend on Horizon's corporate performance with special reference to
improved earnings, better efficiency ratios and a higher ROA.
In 1996, Mr. Harkins received a bonus in the amount of $60,000, and
Mr. McLaughlin received a bonus in the amount of $26,040. In awarding these
bonuses, the following factors were considered and weighed as follows:
1. Performance of affiliate Bank of Raleigh (Mr. Harkins, President)
and affiliate Greenbrier Valley National Bank (Mr. McLaughlin,
President).
2. Results of Twentieth Bancorp merger.
3. Level of earnings.
21
<PAGE> 24
4. Posturing for the future.
5. Enhanced shareholder value.
Pursuant to the terms of the Merger Agreement, Horizon entered into an
employment contract with B. C. McGinnis, III. This contract is for a three-year
term commencing September 1, 1996, and provides for an annual salary of
$155,600 and for reimbursement of other specified expenses and costs together
with the use of an automobile previously owned by Twentieth. Pursuant to the
terms of his employment contract, Mr. McGinnis is eligible to participate in
any additional plans, programs or benefits which Twentieth Street Bank's Board
of Directors makes available to its employees.
This report shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, except to the extent that Horizon specifically incorporates this
report by reference, and shall not otherwise be filed under such Acts.
This report is submitted by the Compensation and Benefits Committee,
which consists of:
E. M. Payne III, Chairman
Clarence E. Martin
Carolyn H. McCulloch
Harper W. Nelson
Rodney H. Pack
James E. Songer
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND COMPENSATION AND BENEFITS
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Horizon and its various banking subsidiaries have had and expect to
have in the future, transactions in the ordinary course of their business with
directors, officers, principal shareholders and their associates. These
transactions were 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 other unaffiliated
persons. Loans to these individuals, which at December, 31, 1996, were, in the
aggregate, 15.3% of total shareholders' equity, in the opinion of the
management of Horizon, did not involve more than the normal risk of
collectibility or present other unfavorable features.
The Bank of Raleigh paid fees in 1996 and expects to pay fees in 1997,
to File, Payne, Scherer & File, Attorneys at Law, of which Bank of Raleigh and
Horizon director W. H. File III, and director and Secretary of Horizon, E. M.
Payne III, are partners. Based on information provided by that firm, the amount
paid to that law firm in 1996 did not exceed 5% of the firm's gross revenues.
During 1996, Horizon paid premiums for Horizon
22
<PAGE> 25
and its subsidiaries, including property and casualty insurance, directors and
officers liability, blanket bond, and various other financial bonds and
insurance coverages to Songer Insurance Agency, of which Bank of Raleigh and
Horizon director, James E. Songer, is President and majority shareholder. Based
on information provided by Songer Insurance Agency, amounts paid to this agency
did not exceed 5% of its gross revenues. E. M. Payne III has been a member of
the Horizon Compensation and Benefits Committee since 1992 and has served as
Chairman of the Committee since 1993. James E. Songer has served as a member of
the Compensation and Benefits Committee from 1992 to present.
In the opinion of Horizon's management, these transactions were on
terms no less favorable to Horizon than they would have been with third parties
not otherwise affiliated with Horizon.
2. RATIFICATION OF SELECTION OF AUDITORS
At the Annual Meeting, Horizon's shareholders will be asked to approve
the appointment by Horizon's Board of Directors of Ernst & Young LLP as
independent auditors for 1997. The firm of Ernst & Young LLP has audited the
financial statements of Horizon and its subsidiaries for the years 1994, 1995
and 1996. Audit services performed by Ernst & Young LLP include the annual
audit and preparation of various reports based thereon, and services relating
to Horizon's Form 10-K annual report filed with the SEC.
Although the selection of auditors does not require shareholder
ratification, the Board of Directors has directed that the appointment of Ernst
& Young LLP be submitted for ratification. If the shareholders do not ratify
the appointment of Ernst & Young LLP, the Board of Directors will consider the
appointment of other independent auditors. THE BOARD OF DIRECTORS OF HORIZON
RECOMMENDS THE RATIFICATION BY HORIZON'S SHAREHOLDERS OF ERNST & YOUNG LLP TO
SERVE AS INDEPENDENT AUDITORS FOR HORIZON AND ITS SUBSIDIARIES FOR 1997.
Horizon is advised that no member of Ernst & Young LLP has any direct or
indirect interest in Horizon or its subsidiaries. Representatives of Ernst &
Young LLP are expected to be present at the Annual Meeting and will have an
opportunity to make a statement and to respond to appropriate questions.
The enclosed proxy will be voted "FOR" the ratification of the
selection of Ernst & Young LLP as independent auditors unless otherwise
directed. The affirmative vote by the holders of the majority of the shares of
Horizon Common Stock represented at the Annual Meeting is required to ratify
the selection of Ernst & Young LLP.
3. PROPOSAL TO AMEND AND APPROVE THE INCENTIVE STOCK OPTION PLAN, WHICH
IS BEING AMENDED TO INCREASE THE NUMBER OF SHARES AUTHORIZED BY THE
PLAN FOR OPTION GRANTS
In 1993, Horizon's shareholders adopted the Horizon Incentive Stock
Option Plan (the "ISOP"). Pursuant to the terms of the ISOP, a total of 100,000
shares of Horizon's Common
23
<PAGE> 26
Stock is authorized by the plan for option grants, with a maximum of 10,000
shares to be awarded in any one year. The plan authorizes the Compensation and
Benefits Committee to grant options exercisable within five years of the date
of grant to full-time employees of Horizon and its subsidiaries during the
option period which expires June 7, 2003. As of February 21, 1997, 1,831 shares
of Horizon Common Stock had been issued pursuant to option grants under the
plan. Horizon's Board of Directors recommends that Horizon's shareholders
amend the ISOP to (i) increase the number of shares allocated under the plan
for option grants from 100,000 to 300,000 to take into account the increase in
the number of shares of Horizon's Common Stock outstanding as the result of a
two-for-one stock split in the form of a 100% stock dividend declared October
21, 1996, for shareholders of record December 1, 1996, payable December 15,
1996, and to increase the number of shares available, and (ii) increase the
maximum number of shares that may be awarded in any one year to 30,000 shares.
Accordingly, Section 2 of the Plan would be amended and restated in
its entirety to read as follows:
2. AMOUNT OF STOCK. The aggregate amount of stock
which may be purchased pursuant to options granted under this
Plan shall be 300,000 shares of the Corporation's voting
common stock. The Compensation Committee may grant options
for no more than 30,000 shares in any calendar year.
A copy of the Plan, as amended, is attached as Exhibit A.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL. The enclosed proxy will be voted "FOR" the
approval of the proposed amendment to the ISOP unless otherwise directed. The
affirmative vote by the holders of the majority of the shares of Horizon Common
Stock outstanding is required to approve the proposed amendment shares voted.
Shares voted "ABSTAIN" and shares not voted will have the same effect as if the
shares were voted against approval of the amendment.
ANNUAL REPORT TO SHAREHOLDERS
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO C. DUANE BLANKENSHIP, VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER OF HORIZON BANCORP, INC., P. O. BOX D,
BECKLEY, WEST VIRGINIA 25802-2803, A COPY OF HORIZON'S ANNUAL REPORT ON FORM
10-K WILL BE PROVIDED WITHOUT CHARGE.
OTHER INFORMATION
If any of the nominees for election as directors should be unable to
serve as directors, a proxy will be voted for a substitute nominee or nominees
designated by the Board of Directors of Horizon.
24
<PAGE> 27
The Board of Directors of Horizon knows of no further business to be
presented at the Annual Meeting; but, if any further business properly comes
before the meeting, the persons named in the enclosed proxy will vote all
proxies in accordance with the recommendations of the Board of Directors.
SHAREHOLDER PROPOSALS FOR 1997
Any shareholder who wishes to have a proposal placed before the next
Annual Meeting of Shareholders must submit the proposal to the President of
Horizon at its executive offices, One Park Avenue, Beckley, West Virginia, and
such proposal must be received no later than December 29, 1997, to have it
considered for inclusion in the Proxy Statement of the Annual Meeting in 1998.
Frank S. Harkins, Jr.
Chairman of the Board and
Chief Executive Officer
Philip L. McLaughlin
President and Chief Operating Officer
Beckley, West Virginia
March 31, 1997
Enclosures
60395
25
<PAGE> 28
EXHIBIT A
HORIZON BANCORP, INC.
INCENTIVE STOCK OPTION PLAN
---------------------------
1. GRANT OF OPTIONS. The Compensation Committee of Horizon Bancorp,
Inc., a West Virginia corporation ("Corporation"), is hereby authorized by
majority vote of its stockholders to issue stock options from time to time on
the corporation's behalf to any one or more persons who at the date of such
grant are full-time employees of the Corporation. Any option granted under this
Plan shall be granted within ten years from the date hereof. Any option granted
under this Plan must be exercised within five years from the date of the option
grant and may only be exercised in installments as provided for in the Option
Agreement.
2. AMOUNT OF STOCK. The aggregate amount of stock which may be
purchased pursuant to options granted under this Plan shall be 300,000 shares
of the Corporation's voting common stock. The Compensation Committee may grant
options for no more than 30,000 shares in any calendar year.
3. LIMITATION. Options shall not be granted under this Plan, which
first become exercisable in any calendar year and which permit the optionee to
purchase shares of the corporation having an aggregate value in $100,000,
determined at the time of the grant of the options. No optionee may exercise
options during a calendar year for the purchase of shares having an aggregate
fair market value (determined at the time of the grant of the options)
exceeding $100,000, except and to the extent that such options were first
exercisable in preceding calendar years.
4. EXERCISE. Any option granted pursuant to this Plan shall contain
provisions, established by the Compensation Committee, setting forth the manner
of exercise of such option. In no event, however, shall any option granted to a
person then owning more than 10 percent of the voting power of all classes of
the Corporation's stock be exercisable by its terms after the expiration of
five years from the date of the grant thereof, nor shall any other option
granted hereunder to any other person be exercisable by its terms after the
expiration of ten years from the date of the grant thereof.
5. NONTRANSFERABILITY. The terms of any option granted under this Plan
shall include a provision making such option nontransferable by the optionee,
except upon death, and exercisable during the optionee's lifetime only by the
optionee.
6. PURCHASE PRICE. The purchase price for a share of the stock subject
to any option granted hereunder shall be not less than the fair market value of
the stock on the date of grant of the option, said fair market value to be
determined in good faith at the time of grant of such option by decision of the
Compensation Committee; provided, however, that in the case of an option
granted to any person then owning more than 10 percent of the voting power of
all classes of the Corporation's stock, the purchase price per share of the
1
<PAGE> 29
stock subject to option shall be not less than 110 percent of the fair market
value of the stock on the date of grant of the option, determined in good faith
as aforesaid.
7. STOCKHOLDER APPROVAL; EFFECTIVE DATE. At the regular annual meeting
of the stockholders of Corporation, which has been scheduled and will occur
within the period of 12 months following April 7, 1993, being the date of
adoption of this Plan by Corporation's Board of Directors, this Plan will be
presented for consideration and approval by the stockholders. The effective
date of this Plan shall be the date the Plan is approved by a majority of the
stockholders.
8. STOCK RESERVE. Corporation shall at all times during the term of
this Plan reserve and keep available such number of shares of its voting stock
as will be sufficient to satisfy the requirements of this Plan, and shall pay
all fees and expenses necessarily incurred by Corporation in connection with
the exercise of options granted hereunder.
9. OTHER TERMS. Any option granted hereunder shall contain such other
and additional terms, not inconsistent with the terms of this plan, which are
deemed necessary or desirable by the Board of Directors, the Compensation
Committee, or by legal counsel to Corporation, and such other terms shall
include those which, together with the terms of this Plan, shall constitute
such option as an "Incentive Stock Option" within the meaning of Section 422 of
the Internal Revenue Code.
2
<PAGE> 30
P R O X Y
HORIZON BANCORP, INC.
ONE PARK AVENUE
P. O. BOX D
BECKLEY, WEST VIRGINIA 25802-2803
THIS PROXY IS SOLICITED BY MANAGEMENT AT THE DIRECTION OF THE BOARD OF
DIRECTORS OF HORIZON BANCORP, INC. AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
KNOW ALL PERSONS BY THESE PRESENTS, That I, the undersigned Shareholder of
Horizon Bancorp, Inc. ("Horizon"), Beckley, West Virginia, do hereby nominate,
constitute and appoint Carolyn H. McCulloch, Rodney H. Pack and Jack McGinnis,
or any one of them, with the full power to act alone as my true and lawful
attorney(s) with full power of substitution, for me in my name, place and stead
to vote all of the Common Stock of said corporation standing in my name on its
books at the close of business on March 5, 1997, at the Annual Meeting of
Shareholders to be held April 22, 1997 at 4:00 p.m. at The Greenbrier, White
Sulphur Springs, West Virginia, and at any and all adjournments of said
meeting, with all the powers the undersigned would possess if personally
present as follows:
1. Election of Directors
FOR ALL NOMINEES LISTED BELOW _______
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW ________
FOR ALL NOMINEES LISTED BELOW EXCEPT THOSE FOR WHOM I CHOOSE TO
WITHHOLD AUTHORITY TO VOTE AS INDICATED BELOW _________
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the name in the space provided.) ____________________________________________
_____________________________________________________________________________
<TABLE>
<S> <C> <C> <C>
John M. Alderson, IV David W. Hambrick Carolyn H. McCulloch Rodney H. Pack
Jack G. Bazemore Frank S. Harkins, Jr. B. C. McGinnis, III E. M. Payne III
Joseph M. Blankenship Tracy W. Hylton, II Jack McGinnis R. T. Rogers
Phillip W. Cain Robert L. Kosnoski Thomas L. McGinnis Sharon H. Rowe
William C. Dolin Thomas E. Lilly Philip L. McLaughlin James E. Songer
W. H. File, III Clarence E. Martin Harper W. Nelson Albert M. Tieche, Jr.
</TABLE>
2. Ratify the selection of Ernst & Young LLP as independent auditors for
1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approve and amend the Horizon Incentive Stock Option Plan, which is
being amended to increase the number of shares of Horizon's Common
Stock allocated to the Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and To Be Signed on Reverse Side)
<PAGE> 31
4. Any other business which may properly be brought before the meeting or
any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES, "FOR" THE
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AND
"FOR" THE APPROVAL OF THE AMENDMENT TO INCREASE THE NUMBER OF SHARES OF
HORIZON'S COMMON STOCK ALLOCATED TO THE HORIZON INCENTIVE STOCK OPTION PLAN. IF
ANY SHARES ARE VOTED CUMULATIVELY FOR THE ELECTION OF DIRECTORS, THE PROXIES,
UNLESS OTHERWISE DIRECTED, SHALL HAVE FULL DISCRETION AND AUTHORITY TO CUMULATE
THEIR VOTES AND VOTE FOR LESS THAN ALL SUCH NOMINEES. IF ANY OTHER BUSINESS IS
PRESENTED AT THE ANNUAL MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH
THE RECOMMENDATION OF THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2, 3 AND 4.
Date: , 1997
-------------------------
(Label With Name,
Address and Shares) Number of Persons Who Will Attend the Annual
meeting:__________
--------------------------------------------
(Signature of Shareholder)
--------------------------------------------
(Signature of Shareholder)
When signing as attorney, executor, administrator,
trustee or guardian, please give full title. If
more than one trustee, all should sign. ALL
JOINT OWNERS MUST SIGN.
