SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [ X ]
Filed by 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 240.14a-11(c) or 240.14a-12
FIRST INDIANA CORPORATION
(Name of Registrant as Specified in its Charter)
FIRST INDIANA CORPORATION
(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 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:
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4) Date Filed:
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<PAGE>
[FIC LETTERHEAD]
March 12, 1997
Dear Shareholder:
The directors and officers of First Indiana Corporation join
me in extending to you a cordial invitation to attend the annual
meeting of our shareholders. This meeting will be held on
Wednesday, April 16, 1997 at 9:00 a.m., in the First Indiana Plaza
Conference Center, Ohio and Pennsylvania Streets, Seventh Floor,
Indianapolis, Indiana.
First Indiana enjoyed record earnings in 1996 as a strategic
provider of financial services within selected market segments.
To share our success with our shareholders, we recently announced a
five-for-four stock split, resulting in a seven percent increase in our
cash dividend. At the annual meeting, we will review our
achievements in 1996 and share our plans for additional growth.
The formal notice of this annual meeting and the proxy
statement appear on the following pages. After reading the proxy
statement, please mark, sign, and return the enclosed proxy card
to ensure that your votes on the business matters of the meeting
will be recorded.
We hope that you will attend this meeting. Whether or not
you attend, we urge you to return your proxy promptly in the postpaid
envelope provided. After returning the proxy, you may, of course,
vote in person on all matters brought before the meeting.
We look forward to seeing you on April 16.
Sincerely,
/s/ Robert H. McKinney
Robert H. McKinney,
Chairman and Chief Executive
Officer
<PAGE>
[IFC BLANK]
<PAGE>
FIRST INDIANA CORPORATION
INDIANAPOLIS, INDIANA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of the shareholders of First Indiana
Corporation (the "Corporation") will be held in the First Indiana
Plaza Conference Center, 135 North Pennsylvania Street, Seventh
Floor, Indianapolis, Indiana on April 16, 1997, at 9:00 a.m. EST, to
consider and to take action on the following matters:
1. The election of four (4) directors of the
Corporation; and
2. The transaction of such other business as may
properly come before the meeting and any
adjournments thereof.
Only shareholders of record at the close of business on February 14,
1997 are entitled to notice of and to vote at this meeting and any
adjournments thereof.
By order of the Board of Directors,
/s/ David A. Butcher
David A. Butcher
Secretary
Indianapolis, Indiana
March 12, 1997
<PAGE>
[ii BLANK]
<PAGE>
FIRST INDIANA CORPORATION
First Indiana Plaza
135 North Pennsylvania Street
Indianapolis, Indiana 46204
PROXY STATEMENT
The accompanying proxy is solicited by the Board of
Directors of First Indiana Corporation (the "Corporation") for use at
the annual meeting of shareholders to be held April 16, 1997 and any
adjournments thereof. When the proxy is properly executed and
returned, the shares it represents will be voted at the meeting in
accordance with any directions noted on that proxy. If no direction
is indicated, the proxy will be voted in favor of the proposals set forth
in the notice attached to this proxy statement.
The election of directors will be determined by a plurality
of the shares present in person or represented by proxy. The holder
of each outstanding share of common stock is entitled to vote for as
many persons as there are directors to be elected. All other matters
to come before the meeting will be determined by a majority of the
shares present in person or represented by proxy. An abstention or
broker non-vote on any matter will not change the number of votes
cast for or against the matter. Any shareholder giving a proxy has the
power to revoke it at any time before it is voted. The approximate
date of mailing of this proxy statement is March 12, 1997.
VOTING SECURITIES AND BENEFICIAL OWNERS
Only shareholders of record as of the close of business on
February 14, 1997 will be entitled to vote at the annual meeting.
The Corporation has only one class of stock outstanding, its common
stock, of which approximately 8,407,410 shares were outstanding as
of the close of business on February 28, 1997. While the Corporation
has announced a five-for-four stock split, the record date for
the stock split followed the record date for the annual meeting.
Accordingly, shares issued in the stock split may not be voted at the
annual meeting and share information set forth in this proxy statement has
not been restated to reflect the stock split.
The following table shows, as of February 7, 1997, the
number and percentage of shares of common stock held by each
person known to the Corporation who owned beneficially more than
five percent of the issued and outstanding common stock of the
Corporation and by the Corporation's directors and certain executive
officers:
<PAGE> 1
<TABLE>
<CAPTION>
Beneficial Amount and Nature of Percent
Owner Beneficial Ownership of Class
---------- -------------------- ---------
<S> <C> <C>
H. J. Baker 39,100 1, 2 4
Gerald L. Bepko 14,903 1, 3 4
David L. Gray 50,320 5 4
Douglas W. Huemme 9,678 6 4
Andrew Jacobs, Jr. -- -
David A. Lindsey 75,054 7 4
Marni McKinney 2,305,821 8 26.4%
Robert H. McKinney 2,305,821 8 26.4%
Owen B. Melton, Jr. 207,135 9 2.4%
Phyllis W. Minott 16,291 1, 3, 10 4
Timothy J. O'Neill 66,616 11 4
Michael L. Smith 24,849 1, 12 4
The Somerset Group, Inc. 2,305,821 8 26.4%
John W. Wynne 25,361 1, 13 4
All Executive Officers and
Directors as a Group (15 Persons) 2,937,987 14 34.0%
</TABLE>
- ------------
1 Includes 12,490 shares as to which the director has the right to
acquire beneficial ownership as specified in Rule 13d-3(d)(1)
under the Securities Exchange Act of 1934 (the "Exchange
Act").
2 Includes 2,417 shares held in trust under the First Indiana
Bank Employees' Stock Purchase Plan (the "Stock Purchase
Plan").
3 Includes 238 shares held in trust under the First Indiana Bank
Directors' Stock Purchase Plan (the "Directors' Stock Purchase
Plan"), and 1,926 shares held in trust under the Stock Purchase
Plan.
4 The number of shares represents less than one percent of the
Corporation's common stock outstanding.
5 Includes 850 shares held in trust under the Stock Purchase
Plan and 23,248 shares as to which there is a right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) under the
Exchange Act.
6 Includes 267 shares held in trust under the Stock Purchase
Plan, 7,494 shares as to which there is a right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) under
the Exchange Act and 1,917 shares held in trust under the
Directors' Deferred Fee Plan.
7 Includes 856 shares held in trust under the Stock Purchase Plan
and 24,448 shares as to which there is a right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) under
the Exchange Act.
8 These shares are beneficially owned by a group consisting of
The Somerset Group, Inc. ("Somerset"), Robert H. McKinney
and Marni McKinney. Robert H. McKinney owns 435,903
shares of the Corporation, including 2,239 shares held in trust
under the Stock Purchase Plan, and 80,245 shares of the
Corporation as to which Mr. McKinney has the right to
acquire beneficial ownership as specified in Rule 13d-3(d)(1)
under the Exchange Act. Mr. McKinney, his immediate
family, a family limited partnership, and various irrevocable
trusts established by Mr. McKinney for the benefit of his
children together beneficially own, directly or indirectly,
approximately 45% of the outstanding capital stock of
Somerset, which owns of record 1,811,979 shares of the
Corporation. The total held by the group also includes 57,939
shares of the Corporation owned by Mr. McKinney's
daughter, Marni
<PAGE> 2
McKinney, including 1,723 shares held in
trust under the Stock Purchase Plan, 18,869 shares as to
which she has the right to acquire beneficial ownership as
specified in Rule 13d-3(d)(1) under the Exchange Act, and 514
shares held on her behalf under the Bank's 401(k) Plan. Mr.
McKinney is the Chairman and a director of Somerset;
Ms. McKinney is the President and Chief Executive Officer
and a director of Somerset; and Mr. McKinney's son, Kevin
K. McKinney, is Vice President and a director of Somerset.
9 Includes 56,497 shares as to which Mr. Melton has the right
to acquire beneficial ownership as specified in Rule
13d-3(d)(1) under the Exchange Act, 6,012 shares held in
trust under the Stock Purchase Plan, 88 shares held on his behalf
under the Bank's 401(k) Plan, 43,687 shares owned of record
jointly with Mr. Melton's spouse, and 41,250 owned of record
by Mr. Melton's spouse.
10 Includes 2,763 shares held in trust under the Stock Purchase
Plan and 100 shares held under the Corporation's Dividend
Reinvestment and Stock Purchase Plan (the "DR Plan").
11 Includes 10,228 shares held in trust under the Stock Purchase
Plan and 24,448 shares as to which there is a right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) under
the Exchange Act.
12 Includes 1,725 shares held in trust under the Stock Purchase
Plan.
13 Includes 1,248 shares held in trust under the Stock Purchase
Plan, 259 shares held under the DR Plan, and 741 shares held
under the Directors' Stock Purchase Plan.
14 The address of The Somerset Group, Inc. is 135 North
Pennsylvania Street, Suite 2800, Indianapolis, Indiana 46204.
This number includes 1,811,979 shares owned of record by
The Somerset Group, Inc. (see note 8), 33,963 shares held in
trust under the Stock Purchase Plan, 731 shares held under the
DR Plan, 1,217 shares held under the Directors' Stock Purchase
Plan, 1,917 shares held under the Deferred Fee Plan, 1,136 shares
held under the Bank's 401(k) Plan, and 316,123 shares as to
which there is a right to acquire beneficial ownership as
specified in Rule 13d-3(d)(1) under the Exchange Act.
- -----------
Proposal No. 1: ELECTION OF DIRECTORS
Four directors are to be elected. Gerald L. Bepko, Douglas W. Huemme,
Andrew Jacobs, Jr., and John W. Wynne have been nominated for a term of
three years and until their successors are elected and qualified. Except
for Mr. Jacobs, all nominees are members of the present Board of Directors.
The other directors listed in the table below will continue in office until
the expiration of their terms. All of the nominees and the other directors
listed in the table below are also members of the Board of Directors
of First Indiana Bank, a wholly owned subsidiary of the Corporation (the
"Bank"), or will become members of the Board of Directors of the Bank upon
their election as directors of the Corporation. For directors of the
Corporation who were directors of the Bank before the Corporation was formed
in 1986, the table below lists the year in which the director became a
director of the Bank. If, at the time of the annual meeting, any of the
nominees is unable or declines to serve, the discretionary authority provided
in the proxy may be exercised to vote for a substitute or substitutes.
The Board of Directors has no reason to believe that any substitute
nominee or nominees will be required.
<PAGE> 3
The Board of Directors unanimously recommends the election of the
following nominees.
<TABLE>
<CAPTION>
NOMINEES FOR TERMS EXPIRING IN 2000
Name, Age, Principal
Occupation(s) and
Business Experience Director
During Past 5 Years Since
- ------------------------------------------------------------------------------
<S> <C>
Gerald L. Bepko, Age 56 1988
Vice President for Long-Range Planning of Indiana University and
Chancellor, Indiana University-Purdue University at Indianapolis;
previously Dean and Professor of Law, Indiana University School of
Law, Indianapolis.
Douglas W. Huemme, Age 55 1994
Chairman, President, and Chief Executive Officer, Lilly Industries,
Inc., industrial coatings; formerly Vice President and Group
Executive, Chemicals Group, Whittaker Corporation; Director of
The Somerset Group, Inc.
Andrew Jacobs, Jr., Age 65 Nominee
Adjunct Professor, Indiana University-Purdue University at
Indianapolis; Attorney; Retired Member, United States Congress.
John W. Wynne, Age 64 1991
Chairman of the Board and Director of Duke Realty Investments, Inc.,
a real estate investment trust; partner, Duke Associates, real
estate development; retired as counsel (previously partner), Bose
McKinney & Evans, attorneys.
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Name, Age, Principal
Occupation(s) and
Business Experience Director
During Past 5 Years Since
- ----------------------------------------------------------------------------
<S> <C>
H. J. Baker, Age 69 1966
Chairman Emeritus, BMW Constructors, Inc., industrial mechanical
contractors; Director of The Somerset Group, Inc. and Lilly
Industries, Inc.
Marni McKinney, Age 40 1992
Vice Chairman of the Corporation and the Bank; Director, President,
and Chief Executive Officer, The Somerset Group, Inc., an affiliate
of the Corporation, financial services; previously Executive Vice
President of The Somerset Group, Inc., and Vice President of the
Corporation and the Bank.
Phyllis W. Minott, Age 58 1976
Chairman and Chief Executive Officer, Minott Motion Pictures, Inc.,
commercial movie production; previously General Auditor, Eli Lilly
& Company, a pharmaceutical company; Controller, Accounting and
Chief Accounting Officer, Eli Lilly & Company.
<PAGE> 4
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Name, Age, Principal
Occupation(s) and
Business Experience Director
During Past 5 Years Since
- ------------------------------------------------------------------------------
<S> <C>
Robert H. McKinney, Age 71 1954
Chairman and Chief Executive Officer of the Corporation and
Chairman of the Bank; Chairman and Director, The Somerset Group,
Inc., an affiliate of the Corporation, financial services; Director of
Lilly Industries, Inc.; retired partner, Bose McKinney & Evans,
attorneys; Chairman, Federal Home Loan Bank Board, 1977-1979.
Owen B. Melton, Jr., Age 50 1983
President and Chief Operating Officer of the Corporation and
President and Chief Executive Officer of the Bank.
Michael L. Smith, Age 48 1985
President and Chief Operating Officer, American Health Network, Inc.,
a physician group practice; formerly President, Somerset Financial
Services, a division of The Somerset Group, Inc.; also formerly
Chairman, President and Chief Executive Officer, Mayflower Group,
Inc., diversified transportation services; Director of The Somerset
Group, Inc. and Acordia, Inc.
</TABLE>
The Boards of Directors of the Corporation and the Bank
each met 12 times during the last year. All directors attended in
excess of 75% of the aggregate of (1) the total number of meetings
of the Boards of Directors of the Corporation and the Bank
(considered separately) and (2) the total number of meetings held by
all Corporation and Bank committees (considered separately) on
which he or she served.
Nominees for election as a director of the Corporation are
selected by the full Board of Directors, acting as a nominating
committee. Nominations for directors, other than those made by the
nominating committee, will not be eligible to be voted upon at an
annual meeting unless submitted in accordance with the procedure
set forth under heading "SHAREHOLDER PROPOSALS AND
NOMINATIONS."
Certain Committees of the Boards of Directors of
the Corporation and the Bank
Among other committees, the Board of Directors of the
Corporation has an Audit Committee and a Stock Administration
Committee. The Board of Directors of the Bank has, among other
committees, an Audit Committee, a Compensation Committee, and
a Stock Administration Committee.
The functions of the Audit Committees are to evaluate audit
performance, handle relations with the Corporation's and the Bank's
independent auditors, and evaluate policies and procedures related
to internal audit functions and controls. The members of the
Corporation's and the Bank's Audit Committees in 1996 were
Phyllis W. Minott (Chairperson), Douglas W. Huemme, and John W.
Wynne. The Corporation's and the Bank's Audit Committees met
jointly three times during 1996.
The functions of the Compensation Committee are to
review and make recommendations to the Board of Directors with
respect to the compensation of directors, officers, and employees of
the Bank. Because the officers and employees of the Corporation, all
of whom are officers or employees of the Bank, receive no separate
cash compensation from the Corporation, the Compensation
Committee of the Board of Directors of the Bank effectively serves
as the compensation committee of the Board of Directors of the
Corporation. The members of the Compensation Committee are H.
J. Baker (Chairman), Gerald L. Bepko, and Phyllis W. Minott.
The Committee met twice during 1996.
The Corporation's Stock Administration Committee
administers and grants options and other such stock awards under the
Corporation's stock option and incentive plans, and, together with
the Bank's Stock Administration Committee, administers the Bank's
Employees' Stock Purchase Plan. The members of the Corporation's
and the Bank's
<PAGE> 5
Stock Administration Committees are Gerald L.
Bepko (Chairman), H. J. Baker and Douglas W. Huemme. The
Corporation's and the Bank's Stock Administration Committees met
jointly one time during 1996.
Compensation of Directors
Directors of the Corporation and the Bank, other than
Robert H. McKinney, Marni McKinney and Owen B. Melton, Jr.,
received in 1996 a quarterly retainer of $2,150, plus $500 per
meeting of the Board of Directors attended and an additional $600
per committee meeting attended.
Under the First Indiana 1992 Director Stock Option Plan,
the Corporation reserved 145,809 shares of its common stock for
issuance upon the exercise of options to be granted under the plan.
The plan provides for the issuance of non-qualified options to
purchase 2,498 shares to each outside director of the Corporation on
the date of each annual meeting of shareholders. The Corporation
granted 2,498 shares to each outside director on April 17, 1996, in
accordance with the plan. No option is exercisable during the period
of one year following the date of grant, and options granted under the
plan must specify an exercise price of not less than 100% of the
market price of the shares at the date of grant.
Under the Directors' Deferred Fee Plan, directors of the
Corporation may elect to defer all or any portion of the fees paid for
attendance at a Board of Directors' or committee meeting. The
deferred fees are then contributed to a trust which buys stock with
such fees or invests such fees in an interest-bearing account.
Directors are not eligible to receive shares or cash held under the
plan until they cease to be a director, officer, or employee of the
Corporation. Amounts deferred are not taxable to the director until
the trust distributes the cash or stock to the director. In the event of
a change in control of the Corporation, amounts held under the plan
are payable immediately in one lump sum.
Directors may also elect to contribute part of their fees to
the Bank's Stock Purchase Plan. As with other participants, the
Bank matches a certain portion of such contributions and purchases
the Corporation's common stock on the open market at the prevailing
market price. The material features of the Stock Purchase Plan are
described under the heading "EXECUTIVE COMPENSATION."
Certain Transactions
The Bank offers its directors, officers and employees a loan plan involving
variable-rate mortgages, lines of credit, home equity loans, credit cards, and
various installment loans with a lower interest rate (not below the Bank's
cost of funds) and waiver of loan origination fees, and fixed-rate
mortgage loans with waiver of loan origination fees only. Except as described
above, all outstanding loans to directors, officers and employees have
been made in the ordinary course of business and on substantially the same
terms as those prevailing at the time for comparable transactions with non-
affiliated persons. Management believes that these loans neither involve more
than the normal risk of collectibility nor present other unfavorable features.
On June 17, 1996, the Bank sold to Somerset all of the outstanding
capital stock of One Investment Corporation, a wholly owned subsidiary of
the Bank that owned all of the outstanding capital stock of One Insurance
Agency, Inc. Prior to the transaction, the Bank had used One Investment
and One Insurance to provide Bank customers with certain insurance and
investment products and services. As a result of this transaction, and
through a multi-year operating agreement that the Corporation and the Bank
entered into with Somerset on the same day, the Bank will be able to focus
its efforts on delivering traditional banking services, and Somerset will
provide non-FDIC-insured investment and insurance products and services to
the Bank's customers. Robert H. McKinney and Marni McKinney are officers,
directors and substantial shareholders of Somerset, and H. J. Baker, Douglas
Huemme and Michael Smith are directors of Somerset. The transaction, including
the operating agreement, was approved by the Office of Thrift Supervision
and by a joint committee of the Board of Directors of the Bank and the
Corporation that consisted solely of directors who were not employees,
officers, directors, or significant shareholders of Somerset. This
independent committee determined that the transaction was in the best
interests of the Bank and the Corporation, and negotiated the transaction
with a committee of the Board of Directors of Somerset that consisted of
Somerset directors who were not employees, officers, directors or
substantial shareholders of the Bank or the Corporation. Prior to the
consummation of the transaction, the committee received an opinion from an
independent appraiser that the transaction, which involved a $1.4 million
sale price, was fair to the shareholders of the Bank and the Corporation.
<PAGE> 6
EXECUTIVE COMPENSATION
The following Joint Report of the Compensation Committee and the Stock
Administration Committee, as well as the following Performance Graph, shall
not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any of the Corporation's
filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Corporation
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
Joint Report of the Compensation Committee and
the Stock Administration Committee
Policy and Performance Measures
In determining the compensation of executive officers, the
Compensation Committee strives to maintain an appropriate balance
between executive pay and the creation of shareholder value.
Executive compensation must attract and retain well qualified
officers while at the same time motivating them to achieve the
short-term and long-term strategic goals of the Corporation. To
achieve this balance, executive officers receive a reasonable base
salary and also have the opportunity to earn bonuses tied to the
Corporation's overall performance.
The Compensation Committee based the 1996 annual
salaries of the Corporation's executive officers on the results of
surveys compiled by an independent consultant. The compensation
consultant began with an analysis of the compensation of the
executive officers of two groups of financial institutions with assets
of up to $2.3 billion. The consultant derived the median salary of the
executive officers of the institutions contained in each of the two
surveys and then calculated an average (mean) salary. The
Compensation Committee relied on this calculation of average
salaries in setting the salaries of the Corporation's executive officers.
In order to more directly tie executive compensation to the
Corporation's overall performance, the Compensation Committee
also administers short-term and long-term bonus plans. These plans
are designed to increase the total compensation of the Corporation's
executive officers, but only if the Corporation's performance merited
such increases. The Compensation Committee is guided by the
principle that when certain corporate goals are achieved, the
compensation of the executive officers who contributed to the
Corporation's success should increase accordingly.
The 1996 One Year Management Incentive Plan (the
"Short-Term Plan") provided for a bonus pool in an amount equal to
between 10% and 50% of the participants' aggregate annual salaries,
with bonuses to be awarded based upon both overall corporate
performance and individual contributions to the Corporation. In the
case of each of the executive officers named in the Summary
Compensation Table, at least 50% of the amount contributed on
behalf of such executive officer to the bonus pool was allocated to
overall corporate performance. The corporate performance
component of the bonuses was to be paid based on the Corporation's
after-tax return on average equity for 1996. The individual
performance component of the bonuses depended on the extent to
which each participant achieved certain individual or division goals
and contributed to the Corporation's overall performance, and
whether or not the corporate performance targets were met. Neither
corporate nor individual bonuses were paid under the Short-Term Plan
because the Corporation did not achieve the performance targets for 1996.
Under the 1994-1996 Long-Term Plan (the "Long-Term
Plan"), additional performance-based compensation was awarded
at the end of fiscal year 1996. This plan provided for a bonus pool
in an amount equal to 50% of the average of the aggregate annual
salary of participants over the term of the Long-Term Plan, with
bonuses in an aggregate amount equal to 0% to 100% of the pool to
be paid if the Corporation's average after-tax return on average
equity for the three years 1994-96 compared favorably with the
aggregate reported returns on average equity of publicly traded thrifts
in Indiana and the four contiguous states (the "Midwest Thrift
Group"), and the Corporation achieved specific financial goals, such
as interest-rate margin and asset/liability maturity mix. Tying
long-term bonuses not only to the Corporation's attainment of its
own goals, but also to the performance of the Midwest Thrift Group,
enables the Compensation Committee to establish financial goals
that are objective and ambitious when compared with those of
similarly situated institutions. The Midwest Thrift Group serves as
an independent basis for assessing performance-based compensation
of the Corporation's executive officers.
<PAGE> 7
While recipients of bonuses under the Long Term Plan typically have
the option to receive their bonuses in cash, the Corporation's common stock,
or a combination thereof, each recipient of a bonus under the Long Term Plan
who did not own at least three times his or her annual base salary in the
Corporation's stock (five times in the case of the Chairman, Vice Chairman,
and President of the Corporation) was required to take at least one-third of
his or her bonus in stock. Because the financial goals set forth in the
Long-Term Plan were achieved, the bonus pool was allocated among participants
according to their individual contributions to the attainment of the goals.
The Stock Administration and Compensation Committees
believe that stock ownership by management and stock-based
performance compensation arrangements are beneficial in aligning
management's and shareholders' interests in the enhancement of
shareholder value. Accordingly, the Bank has adopted management
stock ownership objectives to be attained by the end of the year 2000.
By the end of that year, each officer and director of the Bank must own
Corporation stock with a market value equal to a specified multiple of
such officer's or director's compensation. These multiples range from one
times base compensation for vice presidents to three times base compensation
for senior vice presidents, and five times base compensation for the
Bank's Chairman, Vice Chairman and President, as well as for the
Bank's Board of Directors. The Board of Directors believes that implementing
these stock ownership requirements will further align the interests of the
Bank's management with the objectives of the Corporation's shareholders.
Additionally, the Stock Administration and Compensation Committees
typically consider granting stock options to various executive officers,
including the executive officers named in the Summary Compensation Table,
every two years, and awarded such stock options in 1996. Any compensation
derived from the stock options will be directly related to the performance
of the Corporation's stock.
To further encourage Bank officers and employees, as well
as directors, to acquire ownership of the Corporation, such persons
are eligible to contribute a portion of their earnings to the Bank's
Employee's Stock Purchase Plan after completing six months of
service. Such contributions are used to purchase the Corporation's
stock each month at the then prevailing market price. If the
Corporation attains a specified after-tax return on average equity for
a calendar year (as determined by the Bank's Stock Administration
Committee), the Bank will match participant contributions during the
subsequent Plan Year (as defined in the Plan) at a ratio of one to
three. If such after-tax returns are not achieved for a calendar year,
participant contributions during the subsequent Plan Year will be
matched at a ratio of one to four. Because the Corporation
achieved the performance objectives specified in the Stock Purchase Plan for
the year ended December 31, 1995, participant contributions for the Plan Year
beginning April 1, 1996 were matched at a ratio of one to three. The
Corporation also achieved the performance objectives specified in the Stock
Purchase Agreement for the year ended December 31, 1996, and participant
constributions for the Plan Year beginning April 1, 1997 will continue to be
matched at a ratio of one to three. Contributions by the Bank to the accounts
of the executive officers named in the Summary Compensation Table during the
calendar year ended December 31, 1996 are set forth in the column
titled "All Other Compensation."
In 1993, the Internal Revenue Code of 1986 (the "Code")
was amended to limit to $1 million the amount of compensation that
may be deducted by the Corporation in any year with respect to
certain of the Corporation's executive officers. While annual salaries
and bonuses of the Corporation's executive officers have generally
been structured so that all compensation will be deductible, the Stock
Administration and Compensation Committees recognize that the
vesting of restricted stock under the Long-Term Plan may, in certain
instances, cause an executive officer to receive annual compensation
which cannot be deducted in full by the Corporation. The
Committees believe that such compensation is appropriate because
the inability to fully deduct compensation will be limited almost
exclusively to situations in which an executive officer has had to bear
the risk of a decline in the market price of the Corporation's stock
and has shared the rewards of an increase in such price with the
Corporation's shareholders. Nonetheless, the Stock Administration
and Compensation Committees may, from time to time, explore
the options available to the Corporation in order to qualify all of its
compensation for deductibility under the Code.
CEO Performance
Mr. McKinney serves as the chief executive officer of the
Corporation, and Mr. Melton serves as the chief executive officer of
the Corporation's principal operating unit, the Bank. While Mr.
McKinney devotes a major portion of his time to the operations of the
Corporation and the Bank, Mr. Melton devotes all of his time to
those operations.
Like the salaries of the Corporation's other executive
officers, Mr. Melton's and Mr. McKinney's salaries are also derived
from the data compiled by the independent consultant. Since these
two individuals have the greatest impact on the Corporation's
long-term performance, their salaries are determined based on their
achievement of certain goals
<PAGE> 8
relating to the Corporation's
performance during the prior year, such as return on equity, return on
assets, credit quality, and management of operating expenses.
Because Mr. Melton is the chief executive officer of the
Corporation's sole operating unit and responsible for its day-to-day
activities, the Compensation Committee gives special weight to Mr.
Melton's achievement of these objectives when determining his
salary for the coming year. In addition, the Compensation Committee
meets separately with Mr. McKinney for his candid evaluation of Mr.
Melton's performance during the preceding year and his achievement
of the objectives described above. The Corporation's attainment of the
1995 performance goals resulted in an increase in both Mr. McKinney's
and Mr. Melton's salaries for 1996.
Along with the Corporation's other executive officers, Mr.
McKinney and Mr. Melton participate in the Short-Term Plan and
the Long-Term Plan. However, under the Short-Term Plan, 60% of
the amount contributed to the bonus pool on behalf of Mr. McKinney
and Mr. Melton was allocated to the overall corporate performance
component, rather than the 50% contribution used for the remaining
executive officers named in the Summary Compensation Table. The
Compensation Committee believes that such modifications
emphasize Mr. McKinney's and Mr. Melton's leadership roles and
encourage them to manage the Corporation with the shareholders'
long-term interests in mind. Additionally, under the Long-Term
Plan, Mr. McKinney and Mr. Melton received in 1994 a grant of
restricted stock in lieu of their participation in the bonus pool. The
stock was freed from the restrictions at the end of 1996 because the
Corporation attained the performance objectives set forth in the
Long-Term Plan. Further, because the stock is freed from the restrictions,
the Corporation paid to Mr. McKinney and Mr. Melton an
amount equal to the tax liability they incurred as a result of such vesting.
The Compensation Committee believes that such tax payments are
appropriate given the nature of the stock awards, which required Mr.
McKinney and Mr. Melton to assume for three years the risk of a
decline in the market value of the Corporation's stock, and given that
such tax payments are only made when the Corporation meets the
performance targets set forth in the Long-Term Plan.
Compensation Committee Stock Administration Committee
---------------------- ------------------------------
H. J. Baker, Chairman Gerald L. Bepko, Chairman
Gerald L. Bepko H. J. Baker
Phyllis W. Minott Douglas W. Huemme
<PAGE> 9
Performance Graph
The following line graph compares the cumulative total
shareholder return on the common stock of the Corporation over the
last five fiscal years with the cumulative total return of the NASDAQ
Stock Market Index and the cumulative total return of the NASDAQ
Bank Index over the same period.
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
FIRST INDIANA CORPORATION COMMON STOCK, NASDAQ STOCK MARKET INDEX
AND NASDAQ BANK INDEX**
TOTAL RETURN INDEX
----------------------------------------------
First Indiana Nasdaq Stock Nasdaq Bank
Period Corp. Market Index
- ------ ------------- ------------ -----------
<S> <C> <C> <C>
Dec-91 $100 $100 $100
Jun-92 $131 $ 96 $122
Dec-92 $161 $116 $146
Jun-93 $216 $121 $156
Dec-93 $214 $134 $166
Jun-94 $211 $122 $177
Dec-94 $209 $131 $165
Jun-95 $267 $163 $200
Dec-95 $354 $185 $246
Jun-96 $403 $209 $260
Dec-96 $456 $227 $326
* Assumes that the value of the investment in the Corporation's stock and
each index was $100 on December 31, 1991 and that all dividends were
reinvested.
**The NASDAQ Bank Index contains performance data for banks, savings
institutions and holding companies
<CAPTION>
Percent First Indiana Nasdaq Stock Nasdaq Bank
Change Corp. Market Index
- ------------- ------------- ------------ -----------
<S> <C> <C> <C>
Six Months
Ended 12/31/96 +13.2% + 8.7% +25.1%
Twelve Months
Ended 12/31/96 +28.7% +23.0% +32.2%
</TABLE>
<PAGE> 10
Summary
The following table sets forth the compensation awarded
to, earned by, or paid to the chief executive officer and the four most
highly compensated executive officers other than the chief executive
officer (collectively, the "Named Executive Officers") during the last
three fiscal years.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term Compensation
----------------------
Annual Compensation Awards (1) Payouts
---------------------------- ------------------------ -------
Name and Restricted Securities
Principal Other Annual Stock Awards Underlying All Other
Position Year Salary Bonus Compensation Options (#) LTIP Payouts Compensation
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert H. McKinney 1996 $200,000 $ -- $395,910(2) $ -- 12,000 $ -- $129,093(4)
Chairman and Chief 1995 190,000 95,000 -- -- -- -- 111,230
Executive Officer 1994 190,000 -- -- 282,000 (3) -- -- 189,072
of the Corporation;
Chairman of the Bank
- --------------------------------------------------------------------------------------------------------------------------
Owen B. Melton, Jr. 1996 265,000 -- 398,818(2) -- 12,000 -- 131,117(5)
President and Chief 1995 248,000 126,157 -- -- -- -- 94,848
Operating Officer of 1994 248,000 -- -- 282,000 (3) -- -- 119,807
the Corporation;
President and Chief
Executive Officer of
the Bank
- --------------------------------------------------------------------------------------------------------------------------
Timothy J. O'Neill 1996 140,000 -- -- -- 6,000 68,667 27,927(6)
Senior Vice President 1995 137,000 63,705 -- -- -- -- 21,125
Consumer Banking Services 1994 135,000 -- -- -- -- -- 28,782
Division of the Bank
- --------------------------------------------------------------------------------------------------------------------------
David L. Gray 1996 145,000 -- -- -- 6,000 69,167 26,124(7)
Vice President and 1995 138,000 65,000 -- -- -- -- 17,958
Treasurer of the Corpor- 1994 132,000 -- -- -- -- -- 21,520
ation; Senior Vice
President-Internal
Support Services Division,
and Chief Financial Officer
and Treasurer of the Bank
- --------------------------------------------------------------------------------------------------------------------------
David A. Lindsey 1996 132,000 -- -- -- 6,000 60,417 20,246(8)
Senior Vice President- 1995 120,000 60,850 -- -- -- -- 12,610
Consumer Banking Sales 1994 110,500 -- -- -- -- -- 14,378
Division of the Bank;
President of One Mortgage
Corporation
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Adjusted for all stock splits.
2 Represents payments made by the Corporation to reimburse Mr. McKinney and
Mr. Melton for income taxes payable due to the vesting of restricted stock
awarded in 1994 under the Long-Term Plan
3 Represents the market value on the date of grant of 19,200 shares of
restricted stock granted to each of Mr. McKinney and Mr. Melton under the
Long-Term Plan. The restricted stock (i) had a market value of $513,600 on
December 31, 1996, (ii) vested on December 31, 1996 because the
Corporation attained the performance targets described in the Joint Report
of the Compensation Committee and the Stock Administration Committee, and
(iii) earned dividends while restricted.
4 Consists of a $4,015 contribution by the Bank to the Stock Purchase Plan, a
$2,040 contribution by the Bank to Mr. McKinney's account in the Bank's
401(k) Plan, and the accrual by the Bank of $123,038 for Mr. McKinney's
supplemental pension.
5 Consists of a $1,633 contribution by the Bank to the Stock Purchase Plan, a
$2,272 contribution by the Bank to Mr. Melton's account in the Bank's 401(k)
Plan, and the accrual by the Bank of $127,212 for Mr. Melton's
supplemental pension.
6 Consists of a $2,940 contribution by the Bank to the Stock Purchase Plan, the
payment by the Bank of $1,310 for term life insurance premiums, a $2,144
contribution by the Bank to Mr. O'Neill's account in the Bank's 401(k) Plan,
and the accrual by the Bank of $21,533 for Mr. O'Neill's supplemental pension.
<PAGE> 11
7 Consists of a $4,525 contribution by the Bank to the Stock Purchase Plan, the
payment by the Bank of $1,357 for term life insurance premiums, a $2,249
contribution by the Bank to Mr. Gray's account in the Bank's 401(k) Plan, and
the accrual by the Bank of $17,993 for Mr. Gray's supplemental pension.
8 Consists of a $4,146 contribution by the Bank to the Stock Purchase Plan, the
payment by the Bank of $1,236 for term life insurance premiums, a $2,042
contribution by the Bank to Mr. Lindsey's account in the Bank's 401(k) Plan,
and the accrual by the Bank of $12,822 for Mr. Lindsey's supplemental pension.
Stock Options
The following table sets forth certain information with respect to
stock options granted to the Named Executive Officers during the last fiscal
year. The Potential Realizable Value columns on the right of this table
assume that the value of the underlying stock will appreciate each year
at the specified percentages.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Potential Realizable Value
Number % of Total at Assumed Annual Rates of
of Securities Options/SARs Exercise Stock Price Appreciation
Underlying Granted to or Base for Option Term
Options/SARs Employees Price Expiration
Name Granted Fiscal Year ($/Share) Date 0% 5% 10%
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert H. McKinney 12,000 13.9% $21.15 1/23/06 $00.00 $159,613 $404,492
Owen B. Melton, Jr. 12,000 13.9 21.15 1/23/06 00.00 159,613 404,492
Timothy J. O'Neill 6,000 6.9 21.15 1/23/06 00.00 79,807 202,246
David L. Gray 6,000 6.9 21.15 1/23/06 00.00 79,807 202,246
David A. Lindsey 6,000 6.9 21.15 1/23/06 00.00 79,807 202,246
</TABLE>
The following table sets forth on an aggregate basis each
exercise of stock options during fiscal year 1996 by each of the
Named Executive Officers and the 1996 year-end value of the
unexercised options of each such executive officer.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
FISCAL YEAR-END OPTION VALUES
Number of Securities Underlying Value of Unexercised
Unexercised Options at FY-End In-the-Money Options
at FY-End
------------------------------- ---------------------------
Shares
Acquired on
Name Exercise (#) Value Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. McKinney -- $ -- 68,245 12,000 $1,275,556 $67,200
Owen B. Melton, Jr. -- -- 44,497 12,000 800,908 67,200
Timothy J. O'Neill -- -- 18,448 6,000 321,010 33,600
David L. Gray -- -- 32,248 6,000 601,696 33,600
David A. Lindsey -- -- 31,648 6,000 584,350 33,600
</TABLE>
<PAGE> 12
Pension Plans
The following table sets forth, in specified compensation
and years of service classifications, the estimated annual benefits
payable upon retirement at age 65 under the Bank's
non-contributory, qualified defined benefit pension plan (the
"Qualified Plan"), as supplemented by the supplemental benefit plan
adopted by the Bank on January 17, 1992 (the "Supplemental Plan")
(the Qualified Plan and the Supplemental Plan are collectively
referred to as the "Plans"). While the table shows the annual benefit
payable, participants may elect to receive the present value of the
entire benefit in one lump sum.
<TABLE>
<CAPTION>
PENSION PLAN TABLE 1
Covered 10 Years' Benefit 20 Years' Benefit 30 Years' Benefit 40 Years' Benefit
Compensation Service Service Service Service
- ------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
<PAGE> 12
$100,000 $ 18,900 $ 37,700 $ 56,600 $ 76,000
120,000 22,900 45,700 68,600 92,000
140,000 26,900 53,700 80,600 108,000
160,000 30,900 61,700 92,600 124,000
180,000 34,900 69,700 104,600 140,000
200,000 38,900 77,700 116,600 156,000
220,000 42,900 85,700 128,600 172,000
240,000 46,900 93,700 140,600 188,000
260,000 50,900 101,700 152,600 204,000
280,000 54,900 109,700 164,600 220,000
300,000 58,900 117,700 176,600 236,000
320,000 62,900 126,700 188,600 252,000
340,000 66,900 133,700 200,600 268,000
360,000 70,900 141,700 212,600 284,000
380,000 74,900 149,700 224,600 300,000
400,000 78,900 157,700 236,600 316,000
500,000 98,900 197,700 296,600 396,000
600,000 118,900 237,700 356,600 476,000
700,000 138,900 277,700 416,600 556,000
- ------------------------------------------------------------------------------------------
</TABLE>
1 Amounts shown are based on an assumed Social Security integration base of
$22,716 and are not subject to any deduction for Social Security or other
offset amounts.
The annual retirement benefit displayed in the Pension
Plan Table is the product of (i) the participant's number of years of
credited benefit service, multiplied by (ii) the sum of 1.5% of that
portion of the participant's covered compensation that does not
exceed the Social Security integration base for the participant plus
2% of the participant's covered compensation that exceeds such
integration base. Compensation covered by the Plans is the sum of
the average of a participant's annualized rate of base salary (as
reported in the Salary column of the Summary Compensation Table)
for the five consecutive years of employment which produce the
highest such average, plus the annual average of all bonuses
(including both the Bonus and the LTIP Payouts columns as reported
in the Summary Compensation Table, the market value on the date
of vesting of any restricted stock awards made pursuant to the
Long-Term Plan and any tax reimbursements paid in connection with
such vesting) paid to the participant for the three years next
preceding the participant's retirement.
As of January 1, 1997, the number of years of credited
benefit service and the compensation covered by the Plans (based on
average annual salaries for 1991-1995 and average annual bonuses
for 1993-1995) for each of the Named Executive Officers were as
follows: Robert H. McKinney, 41 years - $521,503; Owen B.
Melton, Jr., 17 years - $587,058; David L. Gray, 15 years - $176,522
Timothy J. O'Neill, 24 years - $175,724; David A. Lindsey, 12 years
- - $154,122.
Employment Contracts and Termination of
Employment and Change in Control Arrangements
Special retirement benefits are provided under the
Supplemental Plan to Mr. McKinney. His retirement benefit under
the Supplemental Plan is payable for life and 15 years certain. The
monthly amount of his benefit is the higher of two calculated
amounts. The first is his monthly retirement benefit that would be
payable to him under the Supplemental Plan if such benefit were
determined in the normal way and were payable for life only. The
second is a monthly retirement benefit equal to the excess of (i) 80%
of his adjusted monthly compensation over (ii) the sum of (a) his
monthly retirement benefit under the Qualified Plan (determined as
though such benefit were payable in the form
<PAGE> 13
of a straight-line
annuity) plus (b) his primary Social Security benefit payable at age
65. For purposes of the foregoing, Mr. McKinney's adjusted
monthly compensation is one-twelfth of the sum of (i) his highest
annual rate of salary from the Bank plus (ii) the greater of (a) 37.5%
of his highest annual rate of salary from the Bank or (b) the annual
average of all bonuses paid to him by the Bank for the three years
next preceding his retirement.
Special death benefits are provided under the
Supplemental Plan to Mr. McKinney and Mr. Melton. The death
benefit provided to Mr. McKinney equals three times his highest
annual rate of salary, grossed up for income taxes at the highest
applicable marginal rate in effect at the time of his death, and is
payable whether he dies before or after separation from service and,
because he has already attained age 65, without regard to when he
separates from service. The death benefit provided to Mr. Melton
equals three times his highest annual rate of salary, grossed up for
income taxes at the highest applicable marginal rate in effect at the
time of his death, unless his employment terminates prior to age 65
other than by reason of his death or disability or after a change of
control, in which case the death benefit provided to him is $100,000,
grossed up for income taxes.
APPOINTMENT OF AUDITORS
The Corporation's financial statements for the year ended
December 31, 1996 were audited by KPMG Peat Marwick LLP
("Peat Marwick"). The Corporation has selected Peat Marwick as
its independent auditors for the fiscal year ending December 31,
1997. Representatives of Peat Marwick are expected to attend the
annual meeting, will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS AND NOMINATIONS
Any shareholder of the Corporation wishing to have a
proposal considered for inclusion in the Corporation's 1998 proxy
solicitation materials must set forth such proposal in writing and file
it with the Secretary of the Corporation on or before November 12,
1997. In order to be considered in the 1998 annual meeting,
shareholder proposals not included in the Corporation's 1997 proxy
solicitation materials, as well as shareholder nominations for
directors, must be submitted in writing to the Secretary of the
Corporation at least 60 days before the date of the 1998 annual
meeting, or, if the 1998 annual meeting is held prior to March 16,
1998, within ten days after notice of the annual meeting is mailed to
shareholders. The Board of Directors of the Corporation will review
any shareholder proposals that are filed as required, and will
determine whether such proposals meet applicable criteria for
inclusion in its 1998 proxy solicitation materials or consideration at
the 1998 annual meeting. Shareholder nominations must set forth
(a) as to each person whom the shareholder proposes to nominate for
election or re-election as a director, (i) the name, age, business
address and residence address of such person, (ii) the principal
occupation or employment of such person, and (iii) such person's
written consent to serve as a director, if elected; and (b) as to the
shareholder giving the notice (i) the name and address of such
shareholder and (ii) the class and the number of shares of the
Corporation which are owned of record by such shareholder.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Corporation's officers and directors, and
persons who own more than 10% of the Corporation's common
stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Officers, directors and
greater than 10% shareholders (the "Reporting Persons") are
required by Securities and Exchange Commission regulation to
furnish the Corporation with copies of all Section 16(a) forms they
file.
Based solely on review of the copies of such forms
furnished to the Corporation, the Corporation believes that during
1996 all Reporting Persons complied with the filing requirements of
Section 16(a), except that contributions to the respective 401(k) accounts
of Douglas W. Huemme, Marni McKinney and Kenneth L. Turchi were not
timely reported on the year-end reports.
<PAGE> 14
ANNUAL REPORT
A copy of the Corporation's Annual Report for the year
ended December 31, 1996 has been provided to all shareholders as
of the record date. The Annual Report is not to be considered as
proxy solicitation material.
OTHER MATTERS
The Board of Directors knows of no other matters to be
brought before this annual meeting. However, if other matters
should come before the meeting, it is the intention of each person
named in the proxy to vote such proxy in accordance with his or her
judgment on such matters.
EXPENSES OF SOLICITATION
The entire expense of preparing, assembling, printing and
mailing the proxy form and the material used in the solicitation of
proxies will be paid by the Corporation. The Corporation does not
expect that the solicitation will be made by specially engaged
employees or paid solicitors. Although the Corporation might use
such employees or solicitors if it deems them necessary, no
arrangements or contracts have been made with any such employees
or solicitors as of the date of this statement. In addition to the use of
the mails, solicitation may be made by telephone, telegraph, cable or
personal interview. The Corporation will request record holders of
shares beneficially owned by others to forward this proxy statement
and related materials to the beneficial owners of such shares, and will
reimburse such record holders for their reasonable expenses incurred
in doing so.
IT IS IMPORTANT THAT PROXIES BE
RETURNED PROMPTLY. Whether or not you attend the
meeting, you are urged to execute and return the proxy.
For the Board of Directors,
/s/ Robert H. McKinney
Robert H. McKinney
Chairman
March 12, 1997
<PAGE> 15
[LOGO OF THE BANK]
Principal Subsidiary of First Indiana Corporation
<PAGE> 16
[FORM OF PROXY CARD]
PROXY FIRST INDIANA PROXY
CORPORATION
135 North Pennsylvania Street
Indianapolis, Indiana 46204
This Proxy is solicited on behalf of the Board of Directors
for the Annual Meeting of Shareholders to be held on April 16, 1997
The undersigned hereby appoints Marni McKinney, Robert H. McKinney
and Michael L. Smith, and each of them, attorneys-in-fact and proxies, with
full power of substitution, to attend the Annual Meeting of Shareholders
to be held on April 16, 1997 at 9:00 a.m. E.S.T., and at any adjournments or
postponements of the Annual Meeting, and to vote as specified below all shares
of the Common Stock of First Indiana Corporation which the undersigned would
be entitled to vote if personally present at the Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side)
<PAGE>
FIRST INDIANA CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
1. Election of Directors -- FOR WITHHOLD FOR ALL (Except Nominee(s)
Nominees for a term of three ALL ALL written below)
years: Gerald L. Bepko, Douglas [ ] [ ] [ ] __________________
W. Huemme, Andrew Jacobs, Jr.,
and John W. Wynne
2. In their discretion, the Proxies
are authorized to vote on such
other business as may properly come
before the meeting. This proxy when properly executed will
be voted in the manner directed herein
by the undersigned stockholders. If no
direction is made, this proxy will be
voted FOR Proposal 1.
The undersigned acknowledges receipt
of the Notice of Annual Meeting of
Shareholders, Proxy Statement and
Annual Report.
Dated:_________________, 1997
Signature(s)_________________________
_____________________________________
Please sign exactly as your name
appears. Joint owners should each
sign personally. Where applicable,
indicate your official position or
representation capacity.
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
