<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ANB CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
ANB CORPORATION
110 EAST MAIN STREET
MUNCIE, INDIANA 47305
(765) 747-7575
NOTICE
OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 16, 1997
The Annual Meeting of Shareholders of ANB Corporation will be held at the
Minnetrista Cultural Center, 1200 North Minnetrista Parkway, Muncie, Indiana on
April 16, 1997, at 4:00 p.m., local time, for the following purposes:
(1) To elect three Directors to serve terms which will expire in 2000;
and,
(2) To transact any other business as may properly come before the
meeting.
Only holders of Common Stock of record at the close of business on March 3,
1997, are entitled to notice of, and to vote at, the Annual Meeting or any
adjournment thereof.
A Proxy Statement appears on the following pages.
By Order of the Board of Directors
/s/ James W. Convy
-----------------------------------
James W. Convy, Corporate Secretary
March 14, 1997
Muncie, Indiana
IMPORTANT-PLEASE MAIL YOUR PROXY PROMPTLY
IN ORDER THAT THERE MAY BE PROPER REPRESENTATION AT THE
MEETING, YOU ARE URGED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
ANB CORPORATION
110 EAST MAIN STREET
MUNCIE, INDIANA 47305
(765) 747-7575
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of proxies to be voted at the Annual Meeting of Shareholders
of ANB Corporation to be held on April 16, 1997, at 4:00 p.m., local time, in
the Minnetrista Cultural Center, 1200 North Minnetrista Parkway, Muncie,
Indiana, and at any and all adjournments of such meeting. A Notice of Annual
Meeting and form of proxy accompany this Proxy Statement. The approximate date
on which this Proxy Statement for the 1997 Annual Meeting of Shareholders is
first being sent or given to shareholders is March 14, 1997.
ANB Corporation (the "Company") is a multibank holding company which owns one
hundred percent (100%) of the outstanding stock of American National Bank and
Trust Company of Muncie ("American National"), American National Trust And
Investment Management Company ("American National Trust") and Peoples Loan &
Trust Bank ("Peoples"). American National owns one hundred percent (100%) of the
outstanding stock of ANB Financial Planning Services.
Any shareholder giving a proxy has the right to revoke it by written notice
delivered to James W. Convy, Secretary of the Company, 110 East Main Street,
Muncie, Indiana 47305, or in person at the meeting, at any time before such
proxy is exercised. All proxies will be voted in accordance with the directions
of the shareholder and, to the extent no directions are given, will be voted FOR
item 1 set forth on the accompanying Notice. If any other matters should
properly come before the meeting, it is intended that the proxies will be voted,
with respect to these matters, in accordance with the recommendations of the
Board of Directors. Except with respect to procedural matters incident to the
conduct of the meeting, management of the Company is not aware of any additional
matters that may properly come before the Annual Meeting.
The Company will bear the entire cost of soliciting proxies in the enclosed
form. Solicitation will be by mail, and Directors and officers of the Company
and its subsidiaries may solicit proxies personally or by telephone, facsimile
or other written means of communication. Such persons will not be specially
compensated for such services.
VOTING SECURITIES
Only shareholders of record at the close of business on March 3, 1997, will be
eligible to vote at the Annual Meeting or at any adjournment thereof.
The voting securities of the Company entitled to be voted at the Annual Meeting
consist only of Common Stock, of which 4,490,553 shares were issued and
outstanding on the record date of March 3, 1997. The Company has no other class
of stock that is outstanding. Each shareholder of record on the record date will
be entitled to one vote for each share registered in the shareholder's name. The
presence, in person or by proxy, of a majority of the outstanding shares of
Common Stock is necessary to constitute a quorum. Shares voting, abstaining or
withholding authority to vote on any issue will be counted as present for
purposes of determining a quorum. The election of Directors will be determined
by a plurality of the votes cast. Action on any other matters to come before the
meeting must be approved by an affirmative vote of a majority of the shares
present in person or by proxy. Abstentions, broker non-votes and instructions on
the accompanying proxy card to withhold authority to vote for one or more of the
nominees will result in the respective nominees receiving fewer votes.
Where authorized by law or the governing instrument, shares of the Company's
Common Stock held by American National Trust in regular, nominee and street name
accounts will be voted for the election of the three named nominees for
Director.
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table presents certain information with respect to those persons
who are known by the Company to have been the beneficial owners of more than
five percent (5%) of the Company's Common Stock as of March 3, 1997:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS
- ------------------------------------ ------------------------ ----------------
<S> <C> <C>
John W. and Janice B. Fisher (2) 349,538 7.78
P.O. Box 832
Burlington Drive
Muncie, Indiana 47308
</TABLE>
(1) The information contained in this column is based upon shareholder records
of the Company and information furnished to the Company by the shareholders
named above.
(2) Mr. Fisher holds 250,738 shares (5.58%) and Mrs. Fisher holds 98,800 shares
(2.20%). Mr. and Mrs. Fisher each disclaim beneficial ownership of the
shares held by the other.
ITEM 1 - ELECTION OF DIRECTORS
The first item of business to be acted upon at the Annual Meeting of
Shareholders is the election of three Directors. The Articles of Incorporation
of the Company provide that the Board of Directors shall consist of three
classes of Directors, each class as nearly equal in number as possible. One
class of Directors is to be elected each year with terms extending to the third
succeeding Annual Meeting after such election.
The nominees for election as Director are nominated to serve for terms to expire
in 2000. Each nominee is currently a Director of the Company whose current term
as a Director will expire in 1997. The following information is provided
concerning the nominees:
NOMINEES FOR TERMS TO EXPIRE IN 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SERVED AS DIRECTOR
NAME AGE DURING PAST 5 YEARS CONTINUOUSLY SINCE
- ---- --- ------------------- ------------------
<S> <C> <C> <C>
William L. Peterson 67 Chairman of the Board, 1985
Alltrista Corporation
James R. Schrecongost (1) 51 President and Chief Executive Officer, 1985
the Company; Vice-Chairman and
Chief Executive Officer, American National
Chris L. Talley 51 President and Chief Executive Officer, 1994
Peoples
</TABLE>
(1) Prior to March 3, 1997, James R. Schrecongost was president and chief
executive officer of both the Company and American National.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION OF
THE NOMINEES. It is intended that the proxies given to the person named in the
accompanying form of proxy will, unless otherwise indicated therein, be voted
for the election of the nominees named above. Although management has no reason
to believe that any nominee will be unable to serve, in the event any nominee
should become unavailable for election, and unless the Board of Directors
reduces the size of the Board to a number which would be equal to the number of
nominees who are able and willing to serve, the proxy will be voted for a
substitute who will be designated by the Board of Directors.
<PAGE>
OTHER INCUMBENT MEMBERS OF THE BOARD OF DIRECTORS
The following is provided concerning incumbent Directors whose terms expire at
the Annual Meetings in 1998 and 1999:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SERVED AS DIRECTOR TERM
NAME AGE DURING PAST 5 YEARS CONTINUOUSLY SINCE EXPIRES
- ---- --- ------------------- ------------------ -------
<S> <C> <C> <C> <C>
Ben E. Delk 51 President, Standt's Fine Jewelry 1985 1998
Madelyn K. Ferris (1) 41 Senior Vice President, 1996 1999
Paws Incorporated
R. David Hoover 51 Executive Vice President and 1993 1999
Chief Financial Officer and
Director, Ball Corporation;
Director, Datum Inc.
Donald A. Ross 53 President, A.L. Ross & Sons, Inc. 1985 1999
Kelly N. Stanley 53 President and Chief Executive 1986 1998
Officer, Ontario Corporation
Leon V. Towne 66 Management Advisor 1985 1998
and Consultant
</TABLE>
(1) During 1996, the Board of Directors, pursuant to the terms of the Company's
Bylaws, increased the size of the Board by one and elected Madelyn K.
Ferris as a Director to fill this position on November 14, 1996.
EXECUTIVE OFFICERS
The executive officers of the Company, who consist of Mr. Schrecongost, Mr.
Talley, Paul L. Sehnert, Jr. and Jerome J. Gassen, hold office for a term of one
year or until their respective successors are duly elected and qualified. The
Company has entered into employment agreements with Mr. Schrecongost, Mr.
Talley, Mr. Sehnert and Mr. Gassen. See "EXECUTIVE COMPENSATION Employment
Contracts and Change in Control Arrangements." Mr. Schrecongost has served as
president and chief executive officer of the Company since 1987. He served as
president and chief executive officer of American National from 1987 to March 3,
1997, and is currently vice-chairman and chief executive officer of American
National. Mr. Talley has served as president and chief executive officer of
Peoples since 1984. Mr. Sehnert, age 48, has served as president and chief
executive officer of American National Trust since 1990. Mr. Gassen, age 47, was
elected president and chief operating officer of American National effective
March 3, 1997. During the five-year period prior to being elected president and
chief operating officer of American National, Mr. Gassen served as president,
chief executive officer and chairman of the board of directors of Firstar Bank
Ottumwa (a wholly owned subsidiary of Firstar Corporation of Iowa). He also
served in various other capacities assigned to him from time to time, such as
market president and regional administrative officer, for Firstar Corporation of
Iowa.
BOARD MEETINGS AND COMMITTEES
The Executive/Strategic Planning/Nominating Committee (the "Executive
Committee"), created during 1995, has as one of its responsibilities the
nomination of individuals for the office of Director of the Company. The
Executive Committee met three times in 1996. Individuals nominated for election
in 1997 were nominated by the Board of Directors as a whole on January 17, 1997.
During 1996, the Executive Committee consisted of the following members of the
Board: Messrs. Peterson (Chairman), Delk, Hoover, Ross, Stanley and Towne. Under
the Company's Bylaws, nominations other than those made by or on behalf of
existing management of the Company must be made in writing and delivered or
mailed to the President of the Company not less than ten days nor more than
fifty days prior to any meeting of shareholders called for the election of
Directors.
<PAGE>
Notification must contain the following information to the extent known by the
notifying shareholder:
(a) The name and address of each proposed nominee;
(b) The principal occupation of each proposed nominee;
(c) The name and resident address of the notifying shareholder; and,
(d) The number of shares of capital stock of the Company owned by the notifying
shareholder.
Nominations not made in accordance with these provisions may be disregarded by
the Chairman of the meeting and, upon his instructions, the vote tellers may
disregard all votes cast for such nominee.
The Audit Committee oversees and appraises the quality and conduct of the audit
program of the Company. The Audit Committee meets quarterly and met four times
in 1996. During 1996, it consisted of the following members of the Board:
Messrs. Towne (Chairman), Hoover, Peterson and Stanley.
The Compensation/Pension/Benefits Committee (the "Compensation Committee"),
among its other responsibilities, overviews the compensation of the officers of
the Company and of subsidiary banks. The Compensation Committee meets on call
and met three times in 1996. During 1996, it consisted of the following members
of the Board: Messrs. Stanley (Chairman), Delk, Hoover, Peterson, Ross and
Towne.
The Board of Directors met six times in 1996. All Directors attended at least
seventy-five percent (75%) of the aggregate of the total number of meetings of
the Board of Directors and the total number of the meetings held by all
committees of the Board upon which each served during this period.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of March 3, 1997, the total number of shares
of Company Common Stock beneficially owned by each Director of the Company and
by all Directors and executive officers as a group. The number of shares shown
as being beneficially owned by each Director are those over which he has sole or
shared voting or investment power.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED (1) PERCENT OF CLASS
- ------------------------ ----------------------------- ----------------
<S> <C> <C>
Ben E. Delk 21,756 (2) .48
Madelyn K. Ferris 150 -
R. David Hoover 2,100 (2) .05
William L. Peterson 11,280 (2) .25
Donald A. Ross 8,895 (2) .20
James R. Schrecongost 84,405 (3) 1.85
Paul L. Sehnert, Jr. 28,488 (4) .63
Kelly N. Stanley 8,930 (2) .20
Chris L. Talley 8,304 (5) .18
Leon V. Towne 21,200 (2) .47
All Directors and Executive Officers
as a group (12 individuals) 245,683 (6) 5.33
</TABLE>
<PAGE>
(1) The information contained in this column is based upon shareholder records
of the Company and
information furnished to the Company by the individuals identified.
(2) Includes 1,000 shares that such individual has the right to acquire through
the exercise of stock options
granted under the ANB Corporation 1996 Directors' Stock Option Plan.
(3) Includes 63,250 shares which Mr. Schrecongost has the right to acquire
through the exercise of stock options granted under the ANB Corporation
Stock Option Plan and the ANB Corporation 1995 Stock Option Plan.
(4) Includes 25,300 shares which Mr. Sehnert has the right to acquire through
the exercise of stock options granted under the ANB Corporation Stock
Option Plan and the ANB Corporation 1995 Stock Option Plan.
(5) Includes 2,500 shares which Mr. Talley has the right to acquire through the
exercise of stock options granted under the ANB Corporation Stock Option
Plan and the ANB Corporation 1995 Stock Option Plan.
(6) Includes 30,275 shares beneficially owned by executive officers of the
Company who are not Directors and 19,900 shares which such individuals have
the right to acquire through the exercise of stock options granted under
the ANB Corporation Stock Option Plan and the ANB Corporation 1995 Stock
Option Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") initial reports of ownership and reports of
changes in ownership of Company Common Stock and other equity securities of the
Company. Officers, Directors and greater than ten-percent shareholders are
required by SEC regulations to furnish to the Company with copies of all Section
16(a) forms they file. To the best knowledge of the Company, during the fiscal
year ended December 31, 1996, all statements of beneficial ownership required to
be filed with the SEC were timely filed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Directors and executive officers of the Company and their associates are
customers of, and have had transactions with, the Company or its subsidiary
banks from time to time in the ordinary course of business. Similar transactions
may be expected to take place in the ordinary course of business in the future.
Such transactions have been and will continue to be made on substantially the
same terms, including interest rates and collateral on loans, as those
prevailing at the time for comparable transactions with other persons. Such
transactions did not and will not involve more than the normal risk of
collectibility or present other unfavorable features. There are no arrangements
or understandings between any of the Directors, executive officers or any other
persons pursuant to which any of the Company's Directors or executive officers
have been selected for their respective positions.
COMPENSATION OF DIRECTORS
Except as set forth below, non-employee Directors of the Company receive an
annual retainer of $3,000 and are also compensated at the rate of $400 per board
meeting attended and $300 per committee meeting attended. Committee chairmen
receive $350 for each meeting attended. Mr. Peterson, the Chairman of the Board
of the Company, receives an annual fee of $15,000 and does not receive any other
fee as a Director. Mr. Stanley, the Vice-Chairman of the Board of the Company,
receives an annual retainer of $5,000, in addition to the fees for board and
committee meetings attended as discussed above. Mr. Ross, who is Chairman of the
Board of American National in addition to being a Director of the Company,
receives an annual fee of $12,000 from American National and does not receive
any other fees as a Director of the Company or American National. Mr. Delk, who
is a Director of the Company and of American National, receives fees as a
Director of American National and for his attendance at any special meetings of
the Company's Board of Directors. American
<PAGE>
National pays its Directors $400 per board meeting attended and $300 per
committee meeting attended. Directors of the Company who are also employees of
the Company or its subsidiaries receive no additional compensation as Directors
of the Company or its subsidiaries. On May 1, 1996, each Director who then held
office as a Director was granted the right under the ANB Corporation 1996
Directors' Stock Option Plan to acquire 4,000 shares of the Company's Common
Stock at $16.75 per share.
Under the terms of the ANB Corporation 1996 Directors' Stock Option Plan
("Directors' Plan"), each Director in office is granted an option to purchase
four thousand (4,000) shares of Common Stock of the Company on the first day of
the month following the month in which the Annual Meeting of Shareholders of the
Company is held. The price to be paid upon exercise of these options will be no
less than the mean between the reported closing bid and ask price for shares of
Common Stock of the Company as quoted by NASDAQ on the date the option is
granted. The Directors' Plan received shareholder approval in April 1996.
EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executive officers are made by the
Compensation Committee of the Board. Each member of the Compensation Committee
is a non-employee director. All decisions by the Compensation Committee relating
to the compensation of the Company's executive officers are reviewed by the full
Board, except for decisions about awards under the Company's stock-based
compensation plan, which are made solely by the Compensation Committee in order
for the grants under such plan to satisfy Securities Exchange Act Rule 16b-3. As
required by regulations of the Securities and Exchange Commission, set forth
below is a report submitted by Messrs. Stanley, Delk, Hoover, Peterson, Ross
and Towne in their capacity as the Board's Compensation Committee during 1996,
addressing the Company's compensation policies for 1996 as they affected the
Company's executive officers.
COMPENSATION COMMITTEE REPORT
COMPENSATION POLICIES TOWARD OFFICERS. The Compensation Committee's officer
compensation policies are designed to provide competitive levels of compensation
that integrate pay with the Company's annual performance goals, reward
above-average corporate performance, recognize individual initiative and
achievements, and assist the Company in attracting and retaining qualified
officers. The salary portions of the executive officers' compensation are
intended to be consistent with others' in the Company's industry, but overall
compensation is also impacted by programs contingent upon the Company's
performance. All officers of the Company's subsidiaries are eligible as
participants in the Company's Incentive Bonus Plan, but typically receive a
larger percentage of their compensation in the form of salary than do the
executive officers. As a result of tying executive compensation to corporate
performance, in any particular year the Company's or its subsidiaries' officers
may be paid more than the average salary of officers in comparable positions
with the Company's competitors, depending upon the Company's performance.
The Compensation Committee also endorses the position that stock ownership by
management is beneficial in aligning managements' and shareholders' interest in
the enhancement of shareholder value. Thus, the Compensation Committee also
utilizes stock ownership elements in designing the compensation packages of the
Company's and its subsidiaries' officers.
The greatest portion of compensation paid to the executive officers in 1996
consisted of base salary and annual bonus. In addition, in 1996 the Compensation
Committee awarded stock options under the ANB Corporation 1995 Stock Option Plan
and also established target performance levels for 1996 under the Company's and
its subsidiaries' Incentive Bonus Plans.
BASE SALARY. The salary portion of total compensation for all employees of the
Company and its subsidiaries is structured so that an employee who meets certain
objective performance criteria (which are established jointly by the employee
and his or her supervisor at the beginning of the year) will typically receive a
salary in the following year generally comparable to the average salary range
paid to other employees with similar responsibilities in other financial
institutions of similar size located in Indiana and the Midwest, as reported by
independent surveys (the "Average Salary"). Employees who fail to meet the
objective performance criteria discussed above will typically receive a salary
in the following year in an amount less than the Average Salary. The
Compensation Committee believes that determining salaries in this manner enables
the Company to attract and retain qualified employees by paying competitive
salaries which are impacted by personal performance.
<PAGE>
Annual Incentive Compensation. The Incentive Bonus Plan of the Company ("Bonus
Plan") is structured so that employees of the Company and its subsidiaries will
receive a bonus equal to a specified percentage of their salary if the Company
achieves a certain level of net operating income (as adjusted per the Bonus
Plan).
The Bonus Plan requires that each subsidiary of the Company recommend a "target
level" and minimum/maximum range for net operating income (as adjusted) for the
ensuing year based upon annual performance goals, which level and range must be
approved by the Compensation Committee of the Company and by the board of the
directors of the subsidiary. The sum of the "target levels" of the subsidiaries
comprises the "target level" under the Bonus Plan of the Company. If the
subsidiaries achieve an aggregate level of net operating income (as adjusted)
which is within the minimum/maximum range defined by the Bonus Plan, each
employee receives a bonus based upon the level of net operating income (as
adjusted) attained.
The amount of bonus paid, which is determined as a percentage of salary, is
dependent upon the amount by which the Company exceeds or fails to attain the
target levels for net operating income (as adjusted). If the exact target levels
are attained, employees receive a specified percentage of salary as bonus
("Bonus Percentage"), the highest Bonus Percentage being thirty percent (30%)
which is the Bonus Percentage for Mr. Schrecongost. If the highest amount of the
target range (or greater) is attained, all employees will receive twice the
amount of Bonus Percentage received at the target level, e.g., Mr. Schrecongost
would receive a bonus equal to sixty percent (60%) of his salary. At the minimum
of the target range or lower, employees, including Mr. Schrecongost, receive no
bonus. If the Company attains other levels of performance within the target
range, employees receive a bonus determined by adjusting the Bonus Percentage
proportionally to the amount by which the target levels are, or are not,
attained. Under the Peoples Incentive Bonus Plan, Mr. Talley (who does not
participate in the Bonus Plan of the Company) receives a bonus determined in the
same manner as that determined for Mr. Schrecongost pursuant to the Bonus Plan
of the Company. Under the American National Incentive Bonus Plan, Mr. Sehnert
(who does not participate in the Bonus Plan of the Company) receives a bonus
determined in the same manner as that determined for Mr. Schrecongost pursuant
to the Bonus Plan of the Company.
STOCK OPTION PLANS. The long-term incentive component of the executive officers'
1996 compensation was provided pursuant to the ANB Corporation Stock Option Plan
("Stock Option Plan") and ANB Corporation 1995 Stock Option Plan ("1995 Stock
Option Plan"), which were approved by the shareholders of the Company in 1990
and 1995, respectively. These stock option plans permit the Compensation
Committee to grant stock options to key employees of the Company. Awards of
stock options under the Stock Option Plan and 1995 Stock Option Plan are
designed to provide a direct link between the long-term interests of the
Company's officers and its shareholders and assist in the retention of officers.
(See the table under EXECUTIVE COMPENSATION - Option Grants In Last Fiscal Year"
indicating sample potential future values of such options assuming various rates
of growth in the Company's stock price and a discussion of the material terms of
the Stock Option Plan and 1995 Stock Option plan.)
LIFE INSURANCE PLAN. In 1993, the Company approved a split-dollar life insurance
program for certain officers and other key employees of the Company and its
subsidiaries. Under the program, the employee is covered by a whole life
insurance policy, with current compensation the equivalent of term insurance
premiums. The remainder of the premium is paid by the Company, which will
recover its premium costs after fifteen years, or out of proceeds from the
insurance in the event of the employee's death prior to this period. The
employee is the owner of the policy and the cash value in excess of Company
premiums.
OTHER COMPENSATION PLANS. At various times in the past the Company has adopted
certain broad-based employee benefit plans in which the executive officers are
permitted to participate on the same terms as other employees of the Company and
its subsidiaries who meet applicable eligibility criteria, subject to any legal
limitations on the amounts that may be contributed or the benefits that may be
payable under the plans.
So as to further align employees' and shareholders' long term financial
interests, the Company maintains an employee stock purchase plan ("Stock
Investment Plan") in which eligible employees may voluntarily participate by
redirecting a portion of their salary (not to exceed $200.00 per month) towards
the purchase of Common Stock of the Company. Each subsidiary makes a
contribution to the Stock Investment Plan equal to twenty percent (20%) of the
amount contributed by participating employees. The Company also maintains the
ANB Corporation Savings and Incentive Plan ("Savings Plan") in which all
eligible employees can make salary savings contributions to the Savings Plan on
a pre-tax basis of from two percent (2%) to fifteen percent (15%) of the
employee's total compensation (as defined). The Company may make a discretionary
matching contribution,
<PAGE>
which currently is at a rate equal to fifty percent (50%) of the first four
percent (4%) of an employee's compensation. The Company believes that the Stock
Investment Plan and the Savings Plan are effective means of attracting and
assisting in the retention of qualified employees.
The Company also maintains the ANB Corporation Supplemental Executive Retirement
Plan ("Supplemental Plan") which is designed to provide benefits that (i) would
be accrued by a participant but may not be paid under the ANB Corporation
Employees' Pension Plan ("Pension Plan") or the Savings Plan because of the
limitations imposed by Section 415 of the Internal Revenue Code ("Code"), and
(ii) would have accrued under the Pension Plan and/or the Savings Plan but for
the limitation of Code Section 401(a)(17).
BENEFITS. The Company provides medical and pension benefits to the executive
officers that are generally available to employees of the Company and its
subsidiaries. The amount of perquisites, as determined in accordance with the
rules of the SEC relating to executive compensation, did not exceed ten percent
(10%) of the salaries and bonuses of the individual executive officers.
MR. SCHRECONGOST'S 1996 COMPENSATION. Regulations of the SEC require the
Compensation Committee to disclose its basis for compensation reported for Mr.
Schrecongost in 1996. Mr. Schrecongost's salary and bonus are determined in the
manner discussed on previous pages of this document. During 1996, the
Compensation Committee granted Mr. Schrecongost options for 6,000 shares under
the 1995 Stock Option Plan. The Compensation Committee believes that this grant
epitomizes its compensation policies by encouraging long-term performance and
promoting management retention while further aligning shareholders' and
managements' interests in the performance of the Company's Common Stock.
SUBMITTED BY THE 1996 COMPENSATION
COMMITTEE OF THE COMPANY S BOARD
OF DIRECTORS
Kelly N. Stanley, Chairman
Ben E. Delk
R. David Hoover
William L. Peterson
Donald A. Ross
Leon V. Towne
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth for the fiscal years ended December 31, 1996,
1995 and 1994, the cash compensation paid by the Company, as well as certain
other compensation paid or awarded during those years, to Messrs. Schrecongost,
Sehnert and Talley, the only executive officers of the Company whose individual
salaries and bonuses exceeded $100,000 in 1996. Although other officers of the
Company received an annual salary and bonus exceeding $100,000, in the
aggregate, during the fiscal year ended December 31, 1996, such officers were
not considered executive officers of the Company.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
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All Other
Other Annual Compensation
Name and Salary Bonus Compensation Options
Principal Position Year ($) ($) (2)($) (#) (3)($)
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<S> <C> <C> <C> <C> <C> <C>
James R. Schrecongost 1996 $221,000 $62,433 --- 6,000 $40,932
President and Chief Executive Officer 1995 213,000 106,500 --- 12,000 32,004
ANB Corporation 1994 205,000 41,820 --- 10,500 14,286
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Paul L. Sehnert, Jr. (4) 1996 $131,500 $20,711 --- 4,500 10,649
President and Chief Executive Officer 1995 123,000 31,180 --- 6,000 10,361
American National Trust 1994 120,000 13,140 --- 4,000 11,112
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Chris L. Talley 1996 $100,000 $24,300 --- 4,500 2,575
President and Chief Executive Officer 1995 93,600 4,830 --- 6,000 2,350
Peoples 1994 90,000 20,237 --- 2,000 2,019
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</TABLE>
(1) The bonus amounts are payable pursuant to the Incentive Bonus Plans as
described in the "Board Compensation Committee Report on Executive
Compensation."
(2) While officers enjoy certain perquisites, such perquisites do not exceed
the lesser of $50,000 or 10% of such officer's salary and bonus and are not
required to be disclosed by applicable rules of the Securities and Exchange
Commission.
(3) These amounts represent (a) Company contributions under the Company's
Savings and Incentive Plan, (b) Company contributions under the Company's
Stock Investment Plan as described in the "Board Compensation Committee
Report on Executive Compensation," (c) the value of life insurance benefits
under the Company's Life Insurance Program, and (d) Company contributions
under the Supplemental Plan, as described in the "Board Compensation
Committee Report on Executive Compensation." Company contributions under
the Savings and Incentive Plan accrued during fiscal 1996 were as follows:
$3,000 to Mr. Schrecongost, $3,000 to Mr. Sehnert and $2,097 to Mr. Talley.
Company contributions under the Stock Investment Plan accrued during fiscal
1996 were as follows: $478 to Mr. Schrecongost, $478 to Mr. Sehnert and
$478 to Mr. Talley. The value of the term life insurance and Company paid
premiums under the Company's Life Insurance Program during 1996 was $10,076
for Mr. Schrecongost and $7,171 for Mr. Sehnert. The Company contribution
under the Supplemental Plan accrued during fiscal 1996 was $22,308 for Mr.
Schrecongost. Also included for Mr. Schrecongost is the amount of $5,070,
which represents the premium paid by the Company in 1996 on a Supplemental
Disability Income Insurance Plan. The plan is designed to provide income
replacement for Mr. Schrecongost in the event of a disability, as defined
by such plan.
(4) Mr. Sehnert became an executive officer of the Company in February 1997.
<PAGE>
STOCK OPTION PLANS
The Company currently sponsors for its employees the ANB Corporation Stock
Option Plan ("Stock Option Plan") and the ANB Corporation 1995 Stock Option Plan
("1995 Stock Option Plan"). Both of these plans provide key employees of the
Company and its subsidiaries selected by the Compensation Committee and who are
materially responsible for the management or operation of the business of the
Company or the subsidiary an opportunity to acquire Common Stock of the Company,
thus providing a long-term incentive for these employees to enhance shareholder
value and encouraging such employees to make a career commitment to the Company.
The Stock Option Plan received shareholder approval in March 1990 and the 1995
Stock Option Plan received shareholder approval in April 1995.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides details regarding stock options granted to Messrs.
Schrecongost, Sehnert and Talley in 1996. In addition, in accordance with rules
of the Securities and Exchange Commission, there are shown the hypothetical
gains or "option spreads" that would exist for respective options. These gains
are based on assumed rates of annual compound stock price appreciation of five
percent (5%) and ten percent (10%) from the date the options were granted over
the full option term.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock
Appreciation
Individual Grants For Option Term (1)
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Percent
of Total
Number of Options
Shares Granted
Underlying in Exercise Market Price
Options Fiscal or Base on Date of
Granted Year Price Grant Expiration 0% 5% 10%
Name (#) (%) ($/Sh) ($/Sh) Date ($) ($) ($)
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
James R. Schrecongost 6,000 13.04% $20.375 $20.375 December 20, $0 $76,882 $194,835
2006
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Paul L. Sehnert Jr. 4,500 9.78% 20.375 20.375 December 20, 0 57,662 146,126
2006
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Chris L. Talley 4,500 9.78% 20.375 20.375 December 20, 0 57,662 146,126
2006
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</TABLE>
(1) Gains are reported net of the option exercise price, but before any
effect of taxes. In assessing these values, it should be kept in mind
that no matter what value is placed on a stock option on the date of
grant, its ultimate value will be dependent on the market value of the
Company's stock at a future date, and that value would depend on the
efforts of such executive to foster the future success of the Company
for the benefit of all shareholders. The amounts reflected in this
table may not necessarily be achieved.
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES TABLE
The following table shows the number of shares acquired on exercise and shares
covered by both exercisable and non-exercisable stock options by Messrs.
Schrecongost, Sehnert and Talley as of December 31, 1996. Also reported are the
values for "in-the-money" options which represent the positive spread between
the exercise price of any such existing stock options and the year-end price of
Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised in-the-Money
Options at Options at
Fiscal Year End Fiscal Year End
Shares (1) (1)
Acquired (#) ($)
on Value --------------------------------------------------------------
Exercise Realized
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
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<S> <C> <C> <C> <C> <C> <C>
James R. Schrecongost 0 NA 59,750 23,750 $745,000 $118,000
Paul L. Sehnert Jr. 5,000 $58,438 23,300 13,000 278,406 56,469
Chris L. Talley 0 NA 2,500 10,000 14,469 26,469
</TABLE>
(1) Value based on closing bid price of Company's Common Stock at December 31,
1996, minus the exercise price.
PENSION PLAN
The following table shows the estimated pension benefits payable to a covered
participant at normal retirement age under the Company's qualified defined
benefit pension plan, based on compensation that is covered by such plan and
years of service with the Company or its subsidiaries. The participant's covered
compensation under the pension plan is his/her average base salary as
represented in the Summary Compensation Table.
Average Annual Compensation
Years of -----------------------------------------------------------------------
Service $70,000 $90,000 $110,000 $130,000 $150,000
or more
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10 11,157 14,857 18,557 22,257 25,957
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20 22,665 30,165 37,665 45,165 52,665
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30 34,172 45,472 56,772 68,072 79,372
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40 44,301 58,751 73,201 87,651 102,101
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All employees of the Company (and its subsidiaries) are eligible to participate
in the Company's tax-qualified defined benefit pension plan known as the ANB
Corporation Employees' Pension Plan (the "Pension Plan") on the January 1 or
July 1 coincident with or next following the employee's attainment of age 21 and
completion of one year of eligibility service (1,000 hours of employment as
defined). The Pension Plan is funded entirely by Company contributions, as
determined by an actuary, sufficient to provide benefits thereunder. The Pension
Plan provides for a normal retirement benefit upon attainment of age 65. The
standard form of benefit under the Pension Plan is a monthly pension for the
participant's life based on the participant's five-year average salary (as
defined), his benefit service with the Company (as defined) and his covered
compensation (as defined). The standard retirement benefit for married
participants is payable in the form of a qualified joint and 50% survivor
annuity in an amount actuarially equivalent to the standard form of benefit.
Participants may also, with spousal consent, elect an actuarially equivalent
optional form of payment as follows: a life annuity; a joint and 50%, 66-2/3% or
100% survivor annuity; or a life annuity with 120 or 240 minimum guaranteed
monthly payments. Benefit amounts are not subject to deduction for Social
Security. The following table provides certain information with respect to
Messrs. Schrecongost, Sehnert and Talley.
Years of Benefit Service Estimated Annual Benefits
at Normal Retirement Age Upon Retirement
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James R.Schrecongost 39.66 $103,236
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Paul L. Sehnert, Jr. 29.95 $ 53,490
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Chris L. Talley 17.00 $ 21,006
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<PAGE>
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
In addition to the Pension Plan and the Savings Plan, each of which is intended
to meet the requirements applicable to a "qualified plan" under Section 401(a)
of the Internal Revenue Code, as amended (the "Code"), the Company also
maintains the ANB Corporation Supplemental Executive Retirement Plan
("Supplemental Plan"). Because Section 415 of the Code limits the maximum amount
of benefits that may be paid from or contributed to a qualified plan and Section
401(a)(17) of the Code limits to $150,000 the amount of compensation received by
an employee that may be taken into account under a qualified plan, the
Supplemental Plan was adopted by the Company, effective January 1, 1994, for
certain employees adversely affected by these provisions of the Code. The
Supplemental Plan is designed to provide benefits that (i) would be accrued by a
participant but may not be paid under the Pension Plan or the Savings Plan
because of the limitations imposed by Code Section 415 and (ii) would have
accrued under the Pension Plan and/or the Savings Plan but for the limitation of
Code Section 401(a)(17).
Mr. Schrecongost is currently the only employee eligible to participate in the
Supplemental Plan. The estimated annual net benefit for Mr. Schrecongost is as
follows: 39.66 years of benefit service at normal retirement age with estimated
annual benefits upon retirement of $30,711.
EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS
Messrs. Schrecongost, Sehnert, Talley and Gassen have each entered into an
agreement with the Company which provides severance protection under certain
circumstances following a change in control of the Company. Under this
agreement, if, following a change in control, the executive is terminated from
employment other than for death, disability, retirement or cause, or he
terminates his employment for unreasonable changes made in his employment
relationship, he is entitled to receive an amount in cash equal to two hundred
ninety-nine percent (299%) of the "base amount" as defined under Section 280G of
the Internal Revenue Code, payable in equal installments over a period of 36
months. The executive is also entitled, under certain circumstances, to continue
to participate in the life, health, accident and disability plans of the Company
or to receive equivalent benefits of such participation, at no cost to the
executive, until the third anniversary of the date of termination. Unexercised
options are also exercisable at any time during the 30-day period following the
day on which a change in control (as defined in the respective stock option
plans of the Company) occurs.
<PAGE>
COMPARATIVE PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Stock over the last five fiscal years with the returns of the
CRSP Total Return Index for the NASDAQ Stock Market (US) and the CRSP Total
Return Index for the NASDAQ Bank Stocks.
Index 1991 1992 1993 1994 1995 1996
- ----- ---- ---- ---- ---- ---- ----
COMPANY 100 145 176 165 224 293
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NASDAQ Market 100 116 134 131 185 227
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NASDAQ Banks 100 146 166 165 246 326
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The graph assumes $100 was invested on December 31, 1991, in the Company's
Common Stock, and in each of the two indexes shown, and the reinvestment of all
dividends.
<PAGE>
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals submitted by shareholders and to be presented at the next Annual
Meeting, currently scheduled to be held in April 1998, must be received by the
Company at its principal office for inclusion in the Proxy Statement and form of
proxy relating to that meeting no later than November 14, 1997. Any such
proposals should be sent to the attention of the Secretary of the Company, 110
East Main Street, Muncie, Indiana 47305.
INDEPENDENT ACCOUNTANTS
The Board of Directors appointed Geo. S. Olive & Co. LLC., Certified Public
Accountants, as independent accountants to audit the books, records and accounts
of the Company for 1996. Representatives of Geo. S. Olive & Co. LLC. are
expected to be in attendance at the annual meeting and will be provided an
opportunity to make a statement should they desire to do so and to respond to
appropriate inquiries from the shareholders. Geo. S. Olive & Co. LLC. has been
independent accountants for the Corporation since 1984. The Board of Directors
anticipates it will appoint independent accountants to audit the books, records
and accounts of the Company for 1997 in April 1997.
ANNUAL REPORT
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
SHAREHOLDER, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WHICH WILL BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER
31, 1996. ADDRESS ALL REQUESTS TO:
JAMES W. CONVY, SECRETARY
ANB CORPORATION
110 EAST MAIN STREET
MUNCIE, INDIANA 47305
OTHER MATTERS
The Board of Directors of the Company does not know of any matters for action by
shareholders at such Annual Meeting other than the matters described in the
notice. However, the enclosed proxy will confer discretionary authority with
respect to matters which are not known to the Board of Directors at the time of
the printing hereof and which may properly come before the meeting. It is the
intention of the person named in the proxy to vote pursuant to the proxy with
respect to such matters in accordance with his best judgment.
It is important that proxies be returned promptly. SHAREHOLDERS, WHETHER OR NOT
THEY EXPECT TO ATTEND IN PERSON, ARE REQUESTED TO RETURN THEIR PROXIES IN ORDER
THAT A QUORUM MAY BE ASSURED. Return may be made in the enclosed envelope, to
which no postage need be affixed.
<PAGE>
PROXY ANB CORPORATION
MUNCIE, INDIANA 47305
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Norman F. Bradway as Proxy, with the power to
appoint his substitute, and hereby authorizes him to represent and to vote, as
designated below, all shares of common stock of ANB Corporation which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be held
on Wednesday, April 16, 1997 at 4:00 p.m., local time, or any adjournment
thereof, on the following matters:
1. Election of Directors
/ / For the nominees listed below (except as marked to the contrary below).
/ / Withhold authority to vote for the nominees listed below:
William L. Peterson James R. Schrecongost Chris L. Talley
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY iNDIVIDUAL, WRITE
THE NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
---------------------------------------------------
2. In his discretion, on such other matters as may properly come before the
meeting.
PLEASE SIGN ON REVERSE SIDE HEREOF.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR IF NO DIRECTION
IS INDICATED, WILL BE VOTED FOR THE NOMINEES LISTED IN ITEM 1.
Please sign exactly as name appears below, if there are two or more owners, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated ______________________________________, 1997
__________________________________________________
__________________________________________________
Signature if held jointly
Your vote is important. Please mark, sign, date
and return this Proxy promptly using the enclosed
envelope.
