SCHEDULE 14A INFORMATION
Proxy statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
1ST BANCORP
(Name of Registrant as Specified In Its Charter)
1ST BANCORP
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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 0-11:1
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>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On Thursday, October 24, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of 1ST
BANCORP (the "Corporation") will be held at the Vincennes Elks Country Club,
2715 Washington Avenue, Vincennes, Indiana 47591 on Thursday, October 24, 1996,
at 10:30 a.m., Eastern Standard time, for the following purposes, which are more
completely set forth in the accompanying Proxy Statement:
(1) To elect three directors for terms of three years, each to serve until
his or her successor has been elected and qualified;
(2) To approve and ratify the 1ST BANCORP 1997 Employee Stock Purchase
Plan; and
(3) To transact such other business as may come before the meeting.
The Board of Directors has fixed September 9, 1996, as the voting record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and at any adjournment thereof. Only shareholders of record
at the close of business on that date will be entitled to notice of and to vote
at the Annual Meeting or at any such adjournment.
BY ORDER OF THE BOARD OF
DIRECTORS
/s/ Mary Lynn Stenftenagel
Mary Lynn Stenftenagel
Secretary-Treasurer
Vincennes, Indiana
September 26, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING,
YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED
BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
1ST BANCORP
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the holders of common stock, $1.00
par value per share ("Common Stock"), of 1ST BANCORP (the "Corporation") in
connection with the solicitation of proxies on behalf of the Board of Directors
to be used at the Annual Meeting of Shareholders to be held at the Vincennes
Elks Country Club, 2715 Washington Avenue, Vincennes, Indiana 47591 on Thursday,
October 24, 1996, at 10:30 a.m., Eastern Standard time, and at any adjournment
thereof for the purposes set forth in the Notice of Annual Meeting. The
principal asset of the Corporation consists of 100% of the issued and
outstanding shares of common stock, $1.00 par value per share, of First Federal
Bank, A Federal Savings Bank ("First Federal"). This Proxy Statement is expected
to be mailed to the shareholders on or about September 26, 1996.
The proxy solicited hereby, if properly signed and returned to the
Corporation and not revoked prior to its use, will be voted in accordance with
the instructions contained therein. If no contrary instructions are given, each
proxy received will be voted for the matters described below and, upon the
transaction of such other business as may properly come before the meeting, in
accordance with the best judgment of the persons appointed as proxies.
Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Corporation
written notice thereof (Mary Lynn Stenftenagel, 101 North Third Street,
Vincennes, Indiana 47591), (ii) submitting a duly executed proxy bearing a later
date, or (iii) by appearing at the Annual Meeting and giving the Secretary
notice of his or her intention to vote in person. Proxies solicited hereby may
be exercised only at the Annual Meeting and any adjournment thereof and will not
be used for any other meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record at the close of business on September 9, 1996
("Voting Record Date"), will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 670,131 shares of Common Stock issued and
outstanding, and the Corporation had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the Annual Meeting. A majority of
the votes entitled to be cast, in person or by proxy, at the meeting is
necessary for a quorum. In determining whether a quorum is present, shareholders
who abstain, cast broker non-votes, or withhold authority to vote on one or more
director nominees will be deemed present at the meeting.
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of September 9, 1996, by each person
who is known by the Corporation to own beneficially 5% or more of the
outstanding shares of Common Stock of the Corporation. As of January 26, 1996,
the Corporation effected a 5% stock dividend with respect to its shares of
Common Stock. All share and per share figures set forth in this Proxy Statement
have been adjusted to reflect that stock dividend.
1
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of
Name and Address of Common Stock Beneficially Percent of
Beneficial Owner Owned(1)(2) Class
---------------- ------------------------- -------------
<S> <C> <C>
C. James McCormick 47,148 (3) 7.03%
Post Office Box 728
Vincennes, Indiana 47591
Rahmi Soyugenc 63,218 (4) 9.43%
119 LaDonna Boulevard
Evansville, Indiana 47711
Joseph H. Moss 44,000 6.56%
1100 Circle 75 Parkway
Suite 800
Atlanta, Georgia 30339
Tidal Insurance Company Limited 28,560 (5) 4.26%
c/o S.T.A.R. Corporate Management
Hibiscus Square
Grand Turk
Turks & Caicos Islands
British West Indies
Dierberg Four, L.P. 28,402 (5) 4.23%
c/o First Securities America, Inc.
Suite 404
135 N. Meramec
Clayton, Missouri 63105
</TABLE>
- -------------------------
(1) Under applicable regulations, shares are deemed to be beneficially owned
by a "person" if he or she directly or indirectly has or shares the power
to vote or dispose of the shares. Unless otherwise indicated, the named
beneficial owner has sole voting and dispositive power with respect to the
shares.
(2) The information in this chart is based on Schedule 13D Reports and
amendments thereto filed by the above listed individuals with the
Securities and Exchange Commission (the "SEC") containing information
concerning shares held by them, and written communications from the
shareholders. It does not reflect any changes in those shareholdings which
may have occurred since the date of such filings, amendments, or
communications.
(3) 5,566 of these shares are owned by Mr. McCormick's wife, 6,070 are owned by
each of two of Mr. McCormick's adult children, and 2,143 are owned by a
third adult child of Mr.McCormick (collectively these beneficial owners are
referred to as the "McCormick Family"). Except for the shares owned by Mr.
McCormick's wife as to which Mr. McCormick may be considered a beneficial
owner, each member of the "McCormick Family" disclaims beneficial ownership
of the shares held of record by each other member of the "McCormick
Family".
(4) These shares include 2,625 shares held solely by Mr. Soyugenc's wife.
(5) While Tidal Insurance Company Limited and Dierberg Four, L.P. each
beneficially own under 5% of the Corporation's outstanding shares, each of
these shareholders filed a Schedule 13D with the SEC and the Corporation.
James and Mary Dierberg, and their three children, control Dierberg Four,
L.P. which controls Tidal Insurance Company Limited. Tidal Insurance
Company Limited and Dierberg Four, L.P. each disclaims beneficial ownership
of the Common Stock owned by the other party.
2
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
The By-Laws of the Corporation provide that the Board of Directors shall
determine the number of directors, between 5 and 15, and currently it has
established a board of nine members. The By-Laws further provide that the Board
of Directors is to be divided into three classes as nearly equal in number as
possible. The members of each class are to be elected for a term of three years
and until their successors are elected and qualified. One class of directors is
to be elected annually.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted for the election of the nominees listed below. If any
person named as nominee should be unable or unwilling to stand for election at
the time of the Annual Meeting, the proxy holders will nominate and vote for a
replacement nominee recommended by the Board of Directors. At this time, the
Board of Directors knows of no reason why the nominees listed below may not be
able to serve as directors if elected. Each of the nominees is a current
director of the Corporation.
Directors are elected by a plurality of the votes cast. Plurality means
that the individuals who receive the largest number of votes cast are elected up
to the maximum number of directors to be chosen at the meeting. Abstentions,
broker non-votes, and instructions on the accompanying proxy to withhold
authority to vote for one or more of the nominees will result in the respective
nominees receiving fewer votes. However, the number of votes otherwise received
by the nominee will not be reduced by such action.
The following tables set forth certain information regarding the nominees
for the position of director of the Corporation and each director of the
Corporation whose term continues, including the principal occupations of such
persons during at least the past five years and the number and percent of shares
of Common Stock beneficially owned by such persons as of the Voting Record Date.
No nominee for director or director is related to any other nominee for director
or director or executive officer of the Corporation by blood, marriage, or
adoption, and there are no arrangements or understandings between any nominee
and any other person pursuant to which such nominee was selected. The table also
sets forth the number of shares of Corporation Common Stock beneficially owned
by all directors and executive officers as a group.
<TABLE>
<CAPTION>
Common Stock
Principal Director Director Beneficially
Occupation of the of First Term Owned as of
During the last Corporation Federal To September 9,
Name and Age Five Years Since Since Expire 1996 (1)
- ------------ ---------- ----- ----- ------- ------------------
Amount %
Nominees --------- -----
<S> <C> <C> <C> <C> <C> <C>
R. William Director of the Corporation 1991 1971 1999 20,182(2) 3.01%
Ballard and Senior Vice President
(Age 62) and Director of First Federal
Frank D. President and Director of 1989 1984 1999 23,413(3) 3.49%
Baracani the Corporation and President,
(Age 54) Chief Executive Officer and
Director of First Federal
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Common Stock
Principal Director Director Beneficially
Occupation of the of First Term Owned as of
During the last Corporation Federal To September 9,
Name and Age Five Years Since Since Expire 1996 (1)
- ------------ ---------- ----- ----- ------- --------------------
<S> <C> <C> <C> <C> <C> <C>
John J. Vice Chairman of the Board 1989 1984 1999 16,941(4) 2.52%
Summers of the Corporation and First
(Age 66) Federal; retired President of
Hamilton Glass Products, Inc.,
Vincennes, Indiana
Directors Continuing In Office
Donald G. Vice President and Director 1989 1988 1998 29,212 4.35%
Bell of the Corporation; Director
(Age 66) of First Federal; Senior Partner
with the law firm of Hart, Bell,
Cummings, Ewing & Stuckey
Vincennes, Indiana
James W. Director of the Corporation 1993 1993 1997 210 .03%
Bobe and of First Federal;
(Age 52) President, Bobe Farms, Inc.
(farming)
Ruth Mix Director of the Corporation 1991 1981 1998 3,200 .47%
Carnahan and Director and Treasurer
(Age 77) of First Federal; Secretary-
Treasurer of Carnahan
Grain, Inc.,
Edwardsport, Indiana
C. James Chairman of the Board and 1989 1966 1997 47,148(5) 7.03%
McCormick Chief Executive Officer of
(Age 71) the Corporation and Chairman
of the Board of First Federal;
Chairman of McCormick, Inc.
and Commercial Rentals, Inc.,
and President of JAMAC Corp.,
all located in Vincennes, Indiana;
Vice Chairman and Director of
Golf Hosts, Inc.(resort owner
and operator located in
Tarpon Springs, Florida)
Rahmi Director of the Corporation 1991 1989 1998 63,218(6) 9.43%
Soyugenc and of First Federal; President
(Age 65) of Evansville Metal Products,
Evansville, Indiana
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Principal Director Director Beneficially
Occupation of the of First Term Owned as of
During the last Corporation Federal To September 9,
Name and Age Five Years Since Since Expire 1996 (1)
- ------------ ---------- ----- ----- ------- --------------------
Amount %
------- -----
<S> <C> <C> <C> <C> <C> <C>
Mary Lynn Director and Secretary- 1989 1988 1997 16,608 2.47%
Stenftenagel Treasurer of the Corporation;
(Age 42) Director, Executive Vice
President, Secretary, and Chief
Financial Officer of First Federal
All directors and executive 224,258 33.46%
officers as a group (10 persons)
</TABLE>
- ---------------------------
(1) Based upon information furnished by the respective directors. Unless
otherwise indicated, the named beneficial owner has sole voting and
dispositive power with respect to the shares.
(2) Of these shares, 3,574 shares are owned jointly with Mr. Ballard's wife,
and 196 shares are owned solely by Mr. Ballard's wife.
(3) Of these shares, 13,825 shares are owned jointly by Mr. Baracani and his
wife, and 32 shares are held in trust for Mr. Baracani's daughter.
(4) All shares are owned by Mr. Summers' wife.
(5) For a description of the record ownership of these shares and matters
relating thereto see footnote (3) to the table on page 2.
(6) These shares include 2,625 shares held solely by Mr. Soyugenc's wife.
The Board of Directors and its Committees
During the year ended June 30, 1996, the Board of Directors of the
Corporation met twelve times. No incumbent director of the Corporation attended
fewer than 75% of the aggregate total number of meetings of the Board of
Directors of the Corporation held during the last fiscal year and the total
number of meetings held by all committees of the Board on which he or she served
during the last fiscal year. The standing committees of the Board of Directors
of the Corporation are the Nominating Committee, Audit Committee, Executive
Committee, Option Administration Committee, and By-Laws and Corporate Affairs
Committee. All committee members are appointed by the Board of Directors.
The Nominating Committee selects nominees for election as directors
of the Corporation. The Nominating Committee met one time in the fiscal year
ended June 30, 1996. The Nominating Committee which nominated the director
nominees set forth in this Proxy Statement consisted of Mrs. Carnahan
(Chairman), and Messrs. Bell and Soyugenc. Although the Nominating Committee of
the Corporation will consider nominees recommended by shareholders, it has not
actively solicited recommendations for nominees from shareholders nor has it
established procedures for this purpose. Article 4.14 of the Corporation's
By-Laws provides that shareholders entitled to vote for the election of
directors may name nominees for election to the Board of Directors. Under the
5
<PAGE>
Corporation's By-Laws, written notice of a proposed nomination must be received
by the Secretary of the Corporation not less than 20 days prior to any annual
meeting of shareholders, provided that if fewer than 30 days' notice of the
meeting is given to shareholders, such written notice shall be received not
later than the close of the tenth day following the day on which notice of the
meeting was mailed to shareholders.
The Audit Committee reviews the records and affairs of the Corporation
to determine its financial condition, oversees the adequacy of the systems of
internal control, and monitors the Corporation's adherence in accounting and
financial reporting to generally accepted accounting principles and regulatory
accounting principles, as appropriate. The Audit Committee, which currently
consists of Messrs. Soyugenc (Chairman), Bell, Bobe, and Summers and Mrs.
Carnahan, met five times in fiscal 1996.
The Option Administration Committee administers the 1ST BANCORP Stock
Option Plan and the Corporation's 1987 Incentive Stock Option Plan, and the 1ST
BANCORP Employee Stock Purchase Plan. The Option Administration Committee, which
currently consists of Messrs. Bell (Chairman), Summers, and Soyugenc, and Mrs.
Carnahan, met one time in fiscal 1996.
The By-Laws and Corporate Affairs Committee, which reviews the
Corporation's and First Federal's By- Laws and suggests amendments to them from
time to time, met one time during the last fiscal year. Its members are Messrs.
McCormick, Summers, Baracani, Bell, Soyugenc, Ballard and Bobe, Mrs. Carnahan,
and Ms. Stenftenagel.
Management Remuneration and Related Transactions
Remuneration of Named Executive Officers
During the fiscal year ended June 30, 1996, no cash compensation was paid
directly by the Corporation to any of its executive officers. Each of such
officers was compensated by First Federal. However, the Corporation reimbursed
First Federal for certain of these compensation expenses.
The following table sets forth information as to annual, long-term and
other compensation for services in all capacities to the Corporation and its
subsidiaries for the last three fiscal years, of (i) the individual who served
as chief executive officer of the Corporation during the fiscal year ended June
30, 1996, and (ii) each executive officer of the Corporation serving as such
during the 1996 fiscal year, who earned over $100,000 in salary and bonuses
during that year (the "Named Executive Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
-------------------------------------------- Awards
------------------------
Other Annual Restricted Securities All
Name and Principal Fiscal Compensation Stock Underlying Other
Position Year Salary($)(1) Bonus($)(2) ($)(3) Awards($) Options(#) Compensation($)
- -------- ---- ------------ ----------- ------ --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
C. James McCormick 1996 $ 41,865 $ 34,729 -- -- -- --
Chairman of the Board 1995 41,519 33,000 -- -- -- --
and Chief Executive 1994 36,623 20,424 -- -- -- --
Officer of the Corporation
and Chairman of the Board
of First Federal
Frank D. Baracani 1996 101,626 97,000 -- -- 171 --
President and Director 1995 97,146 92,000 -- -- 168 --
of the Corporation 1994 91,353 55,256 -- -- -- --
and First Federal and
Chief Executive Officer
of First Federal
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
-------------------------------------------- Awards
------------------------
Other Annual Restricted Securities All
Name and Principal Fiscal Compensation Stock Underlying Other
Position Year Salary($)(1) Bonus($)(2) ($)(3) Awards($) Options(#) Compensation($)
- -------- ---- ------------ ----------- ------ --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mary Lynn Stenftenagel 1996 $69,471 64,000 -- -- 555 --
Director and Secretary- 1995 66,484 -- 60,000 -- 529 --
Treasurer of the Corporation; 1994 59,034 31,334 -- -- -- --
Director, Executive Vice
President, Secretary, and
Chief Financial Officer
of First Federal
</TABLE>
(1) Salary consists of salary and directors' fees. Directors' fees were
deferred by these individuals pursuant to the Corporation's Director
Deferred Compensation Plan.
(2) The bonus amounts are paid pursuant to First Federal's Incentive Bonus Plan
and were accrued in fiscal years to which they relate.
(3) The Named Executive Officers of the Corporation receive certain
perquisites, but the incremental cost of providing such perquisites does
not exceed the lesser of $50,000 or 10% of the officer's salary and bonus.
Stock Options
The following table sets forth information related to options granted
during fiscal year 1996 to each of the Named Executive Officers:
Option Grants-Last Fiscal Year
<TABLE>
<CAPTION>
% of Total
Options Granted to Exercise or
Options Employees Base Price
Name Granted (#)(1) in Fiscal Year ($/Share)(2) Expiration Date
- ---------------------- ------------- ------------------ ------------- ---------------
<S> <C> <C> <C> <C>
C. James McCormick -- -- -- --
Frank D. Baracani 171 4.78% $ 22.10 6/30/96
Mary Lynn Stenftenagel 555 15.54% 22.10 6/30/96
</TABLE>
(1) Options to acquire shares of the Corporation's Common Stock pursuant to the
Corporation's Employee Stock Purchase Plan.
(2) The option exercise price must be paid in cash. The option exercise price
equaled 85% of the lower of the market value of a share of Corporation
Common Stock on July 1, 1995, and on June 30, 1996, which was $32.50 per
share.
The following table shows stock option exercises by the Named Executive
Officers during fiscal 1996, including the aggregate value realized by such
officers on the date of exercise. The following table includes the number of
shares covered by stock options held by the Named Executive Officers as of June
30, 1996. Also reported are the values for "in-the-money" options (options whose
exercise price is lower than the market value of the shares at fiscal year end)
which represent the spread between the exercise price of any such existing stock
options and the year-end market price of the stock.
Aggregate Option Exercises in Last Fiscal Year and
Outstanding Stock Option Grants and Value Realized As of 6/30/96
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Value Realized Underlying Unexercised In-the-Money
Acquired on at Exercise Options at Fiscal Year End Options at Fiscal Year End
Name Exercise(#) Date($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. James McCormick -- -- -- -- -- --
Frank D. Baracani 171 $1,778 -- -- -- --
Mary Lynn Stenftenagel 555 5,772 -- -- -- --
</TABLE>
(1) Aggregate market value of the shares covered by the option less the
aggregate price paid by the Named Executive Officer.
7
<PAGE>
Director's Fees
For fiscal 1996, no director of the Corporation was paid any director
fees. Directors of First Federal are paid $600 for each regular monthly meeting
of the Board of directors of First Federal and members of committees of First
Federal's Board of Directors who are not employees of the Corporation
subsidiaries are paid $300 per Committee meeting attended.
Director Deferred Compensation Plan
Effective July 1, 1993, First Federal entered into deferred compensation
agreements with each of its directors. Under the Agreements, First Federal will
defer an amount equal to $600 to which the director would otherwise be entitled
from First Federal for each month of the deferral. The director will have the
option of apportioning the deferral between a guaranteed investment account
which provides a fixed rate of return and a phantom unit account which provides
a return equivalent to the appreciation in the Corporation's Common Stock during
the period of the deferral. At the time the director reaches his or her normal
retirement date, the value of his or her guaranteed account and phantom stock
account will be annuitized and provide him or her with 180 monthly payments.
There are other provisions in the Agreement which provide for earlier payment in
the case of disability or in the case of death. In addition, there is a one time
burial benefit equal to $10,000.
Indebtedness of Management
Since the beginning of its fiscal year ended June 30, 1996, First Federal
had outstanding from time to time loans which were made to the directors and
executive officers of the Corporation and their associates, as defined in
Regulations of the SEC. First Federal offers loans to its directors, officers
and employees. However, all of such loans were made in the ordinary course of
business, at substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
nonaffiliated persons and did not involve more than the normal risk of
collectibility or present other unfavorable features.
Transactions with Affiliates
During fiscal 1996 the Corporation and its subsidiaries retained the law
firm of Hart, Bell, Cummings, Ewing & Stuckey ("Hart, Bell"), of which firm
Messrs. Arthur L. Hart and Donald G. Bell, Chairman -- Director Emeritus of
First Federal and director of the Corporation and First Federal, respectively,
are a retired partner and senior partner, respectively. The Corporation intends
to retain such law firm in a similar capacity in fiscal 1997.
PROPOSAL II - EMPLOYEE STOCK PURCHASE PLAN
On August 29, 1996, the Board of Directors of the Corporation dopted the
1ST BANCORP 1997 Employee Purchase Plan (the "Plan"), subject to approval and
ratification at the Annual Meeting of Shareholders. The central features of the
Plan are summarized below, but the Plan is set forth in full in Exhibit A to
this Proxy Statement, and all statements made in this summary are qualified by
reference to the full text of the Plan.
Purpose
The purpose of the Plan is to encourage stock ownership of employees of the
Corporation and its subsidiaries so that they may share in the fortunes of the
Corporation. The Plan is also designed to encourage such employees to remain in
the employ of the Corporation. The Plan is intended to qualify under Section 423
of the Code.
Administration
The Plan is administered by the Corporation's Option Administration
Committee (the Committee"), which has absolute discretion under the Plan to
prescribe rules and regulations for the administration of the Plan and to
interpret its provisions.
8
<PAGE>
Shares Reserved
A total of 15,000 shares are reserved for issuance upon exercise of options
granted under the Plan, subject to adjustment for stock dividends, stock splits,
reverse stock splits and similar changes in the Corporation's capitalization.
Shares issued under the Plan may be authorized but unissued or treasury shares.
Although shares of Common Stock to be delivered under the Plan may be obtained
by the Corporation through purchase in the open in the open market, no such open
market purchases are contemplated at this time.
Effective Date
The Plan will become effective upon approval by the Corporation's
shareholders and will remain in effect until terminated by the Corporation's
Board of Directors or until no additional shares of the Corporation's's Common
Stock are available for purchase under the Plan. The first offering of shares
will be for the fiscal year ended June 30, 1997.
Eligible Employees
All employees of the Corporation and First Federal who, at the beginning of
the offering period, have at least six months of service and whose customary
employment immediately prior to the effective date is least 20 hours per week
are eligible to participate in the Plan. However, no employee who, after the
grant of options under the Plan, owns 5% or more of the Corporation's shares of
Common Stock (including as owned shares subject to options held by such
employee) is eligible to participate in the Plan. As of the date hereof, there
were 123 employees eligible to participate in the Plan.
Participation
An eligible employee is permitted to participate in the Plan at any time
prior to the first day of any offering period by authorizing payroll deductions
of not less than $5 per pay period nor more than 20% of the employee's base pay
in each pay period. For this purpose, base pay means straight time earnings plus
overtime, bonuses, commissions and salary reductions or deductions under Section
125 and 401(k) of the Code. In no event, however, may an employee be granted an
option to purchase shares of Common Stock under the Plan and any similar
employee stock purchase plan of the Corporation or its subsidiaries at a rate
exceeding $25,000 in fair market value of such Common Stock (determined at time
the option is granted) in any calender year during which the option is
outstanding.
Payroll deductions will be accumulated during the Corporation's fiscal
year, provided that the first offering under the Plan commenced July 1, 1996,
and will end June 30, 1997. Payroll deductions will be credited to a
participating employee's account ("Account") along with interest, at the current
passbook rate being paid by First Federal.
Each year, during an offering period which shall begin on July 1 and end on
the following June 30, commencing with July 1, 1996, the Corporation will grant
to each participant an option to purchase on the last day of the offering period
such number of full shares of Common Stock of the Corporation as may be
purchased with the amounts credited to his Account on the last day of the
offering period, at the purchase price specified in the Plan. The purchase price
for each offering period shall be the lesser of (i) 85% of the fair market value
of the Corporation's Common Stock on the first business day of the offering
period, or (ii) 85% of the fair market value of the Corporation's Common Stock
on the last business day of the offering period. The fair market value for this
purpose is the mean between the highest and lowest quoted selling prices for the
shares on the date as of which the determination is to be made (or if there were
no such sales on such date, the mean between the bid and asked prices on such
date) as reported on the NASDAQ Quotation System. Only full shares of stock may
be purchased and any balance remaining in the participant's Account after
exercise of his option according to the Plan will be returned to the participant
unless such participant elects to re-enroll in a subsequent offering. As of
September 19, 1996 the mean between the bid and asked prices for the
Corporation's Common Stock was $31.25 per share.
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Withdrawal or suspension of Payroll Deductions
An eligible employee may withdraw from the Plan, in whole or in part, at
any time, in which case, the amount of his Account being withdrawn will be paid
to him. An employee completely withdrawing from the Plan may again participate
in an offering but not before the beginning of the next offering following his
withdrawal. An employee may discontinue his offering, and such election shall
not constitute a withdrawal from the Plan. Such an employee may remain in the
offering and will be entitled to purchase from the Corporation the number of
full shares which may be purchased at the Plan purchase price with the balance
in the employee's Account at the close of the offering period.
In the event of a participant's resignation, lay-off, or discharge, his
participation in the offering will cease and the balance of his Account will be
paid to him. If the employee's employment is terminated for reasons of normal or
early retirement, death or disability, he (or his designated beneficiary) may
either have the balance of his Account paid to him in cash or applied at the end
of the current offering toward the purchase of Common Stock.
Limitations on Resale of Stock Acquired
Participants may resell shares acquired under the Plan, subject to
applicable securities laws.
Amendment or Termination
The Board of Directors of the Corporation may amend, modify or terminate
the Plan at any time, provided that employee's existing rights under any
offering already made under the Plan may not be adversely affected. However,
shareholder approval is required of amendments which increase the number of
shares to be offered, materially modify the requirements as to eligibility for
participation in the Plan, or materially increase the benefits accruing to Plan
participants. Upon termination of the Plan, all payroll deductions, plus any
interest credited thereon, will be refunded to Plan participants.
Federal Tax Consequences
Employees normally are not taxed at the time options are granted or
exercised under the Plan, and the Corporation or its subsidiaries receive no tax
deduction upon such events. However, in order for a participant to receive this
favorable tax treatment, he may not dispose of the shares within two years from
the date the option is granted or within one year from the date such option is
exercised. In addition, the participant must, except in the event of his death,
be an employee of the corporation granting the option (or of a parent or
subsidiary of such corporation, as defined in Section 424(e) and (f) of the
Code, or of a corporation, or parent or subsidiary thereof, issuing or assuming
the option in a transaction to which Section 424(a) applies) at all times within
the period beginning on the date of the grant of the option and ending on a date
within three months before the date of exercise.
If a participant disposes of stock acquired pursuant to the Plan before the
expiration of the holding period requirement set forth above, the participant
will realize, at the time of the disposition, ordinary income to the extent the
fair market value of the stock on the date the shares were purchased exceeds the
option price for such shares. The difference between the fair market value of
the stock on the date the shares were purchased and the amount realized on
disposition shall also be treated as ordinary income. Such income may be subject
to the income tax withholding requirements of the Code and FICA withholding
requirements. The participant is required to reimburse the Corporation for all
withholding taxes (e.g., federal income tax and FICA) the Corporation is
required to a pay to the Internal Revenue Service on behalf of the participant.
At the time of the disposition, the Corporation will be allowed a corresponding
business expense deduction under Section 162 of the Code to the extent of the
amount of the participant's ordinary income. Moreover, at the time of any
disposition of shares acquired under the Plan, which have been held for the
requisite holding period, or at his death, whenever occurring, a participant
must include in his income as ordinary income an amount equal to the lesser of
(a) the difference between the fair market value of the shares at the date of
disposition or death and the purchase
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price for such shares, or (b) the difference between the fair market value of
the shares at the time the option was granted over the purchase price for the
shares. The Corporation would also receive a tax deduction in that amount at
that time. If the fair market value of the shares at the date of disposition
exceeds the fair market value at the date the option was granted, the amount, if
any, received in excess of the difference between the fair market value of the
shares at the time the option was granted over the purchase price for the shares
will be taxed to the participant at long-term capital gains rates.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE APPROVAL OF THE PLAN. SUCH ACTION REQUIRES THE APPROVAL OF THE HOLDERS OF AT
LEAST A MAJORITY OF THE SHARES OF THE CORPORATION'S COMMON STOCK VOTING IN
PERSON OR BY PROXY AT THE ANNUAL MEETING, OR ANY ADJOURNMENT THEREOF.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires that the Corporation's officers and
directors and persons who own more than 10% of the Corporation's Common Stock
file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish the Corporation with
copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
and/or written representations from certain reporting persons that no Forms 5
were required for those persons, the Corporation believes that during the fiscal
year ended June 30, 1996, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners with respect to Section 16(a)
of the 1934 Act were satisfied in a timely manner.
ACCOUNTANTS
The firm of KPMG Peat Marwick LLP has been selected as the Corporation's
principal independent accountant for the current year. KPMG Peat Marwick LLP has
served as the Corporation's principal accountant since fiscal 1990. A
representative of KPMG Peat Marwick LLP will be present at the Annual Meeting
with the opportunity to make a statement if he so desires. He will be available
to respond to any appropriate questions shareholders may have.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder wishes to have presented at the next
Annual Meeting of the Corporation must be received at the main office of the
Corporation for the inclusion in the proxy statement no later than 120 days in
advance of September 26, 1997. Any such proposals should be sent to the
attention of the Secretary of the Corporation at 101 North Third Street,
Vincennes, Indiana 47591.
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OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described above in the Proxy Statement. However, if any
other matters should properly come before the Annual Meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Corporation. The
Corporation will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Common Stock. In addition to solicitation by
mail, directors, officers and employees of the Corporation may solicit proxies
personally or by telephone without additional compensation.
ANNUAL REPORTS
A copy of the Corporation's Annual Report to Shareholders for the year
ended June 30, 1996, accompanies this Proxy Statement. Such Annual Report is not
part of the proxy solicitation materials.
By Order of the Board of Directors
/s/ Mary Lynn Stenftenagel
Mary Lynn Stenftenagel
September 26, 1996 Secretary-/Treasurer
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EXHIBIT A
1ST BANCORP 1997 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose of Plan. The 1ST BANCORP 1997 Employee Stock Purchase (the "Plan") is
intended to encourage stock ownership by all eligible employees of 1ST BANCORP
(the "Company") and its subsidiaries so that they may share in the fortunes of
the Company by acquiring or increasing a proprietary interest in the Company.
The Plan is also designed to encourage eligible employees to remain in the
employ of the Company and its subsidiaries. It is intended that options issued
pursuant to this Plan shall constitute options issued pursuant to an "employee
stock purchase plan" within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Definitions.
2.1 "Account" shall mean the funds accumulated with respect to an
individual employee as a result of deductions from his or her paycheck for
the purpose of purchasing stock under the Plan, and any interest credited
with respect to those funds by the Committee. The funds allocated to an
employee's account shall remain the property of the respective employee at
all times during each offering.
2.2 "Base Pay" means regular straight time earnings including any
overtime, bonuses, commissions and salary reductions or deductions under
Section 125 and 401(k) of the Code.
2.3 " Board" means the Board of Directors of the Company.
2.4 "Committee" shall mean the committee which administers the Plan
pursuant to Section 19 hereof.
2.5 "Common Stock" of the Company means the shares of Common Stock,
$1.00 par value per share, of the Company.
2.6 "Fair market value" means the mean between the highest and lowest
quoted selling prices for the shares on the date as of which the
determination is to be made (or if there were no such sales on such date
the mean between the bid and asked prices on such date) as reported on the
NASDAQ Quotation System.
2.7 "Offering Date" means the commencement date of the offering if
such date is a regular business day or the first business day following
such commencement date. A different date may be set by resolution of the
Board.
2.8 "Participating Subsidiaries" means First Federal Bank, A Federal
Savings Bank, and any other subsidiary of the Company which is designated
by the Board to participate in the Plan. The Board shall have the power to
make such designation before or after the Plan is approved by the
shareholders.
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3. Employees Eligible to Participate. Any person who is in the employ of the
Company or any of its Participating Subsidiaries is eligible to receive options
under the Plan, except (a) employees whose customary employment immediately
prior to the effective date is twenty (20) hours or less per week; and (b)
employees who on the Offering Date have not been employed by the Company or a
Participating Subsidiary for at least six (6) months immediately prior thereto;
provided, however, that no employee who after the grant of options hereunder
owns shares (including all shares which may be purchased under outstanding
options granted under the Plan) possessing 5% or more of the total combined
voting power or value of all classes of shares of the Company or of its parent
or subsidiary corporations shall be eligible to participate. For this purpose,
the rules of Section 424(d) of the Code shall apply in determining share
ownership, and stock which the employee may purchase under outstanding options
shall be treated as stock owned by the employee.
4. Offerings. The first offering under this Plan commenced on July 1, 1996 and
will terminate on June 30, 1997. Thereafter, offerings shall commence on each
subsequent July 1 and terminate on the following June 30 until this Plan is
terminated by the Board or noadditional shares of Common Stock of the Company
remain reserved for issuance or purchase under the Plan.
5. Price. The purchase price per share shall be the lesser of (1) eighty-five
percent (85%) of the fair market value of the Common Stock on the Offering Date;
or (2) eight-five percent (85%) of the fair market value of the Common Stock on
the last business day of the offering.
6. Stock Subject to the Plan. The stock subject to the options shall be shares
of the Company's Common Stock, $1.00 par value per share, which shall either be
authorized but unissued shares or shares reaquired by the Company, including,
without limitation, shares purchased in the open market. The aggregate number of
shares which may be issued pursuant to the Plan is 15,000, subject to increase
or decrease by reason of stock split-ups, reclassifications, stock dividends,
changes in par value and the like.
7. Changes in Capital Structure.
7.1 In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company
or of another corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up,
combination of shares or dividend payable in shares, appropriate adjustment
shall be made by the Committee in the number and kind of shares as to which
an option granted under this Plan shall be exercisable, to the end that the
participant's proportionate interest shall be maintained as before the
occurrence of such event. Any such adjustment made by the Committee shall
be conclusive.
7.2 If the Company is not the surviving or resulting corporation in
any reorganization, merger, consolidation or recapitalization, each
outstanding option shall be assumed by the surviving or resulting
corporation and each option shall continue in full force and effect, and
shall apply to the same number and class of securities of the surviving
corporation as a holder of the number of shares of Common Stock subject to
the option would be entitled under
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the terms of the reorganization, merger, consolidation or recapitalization
had it been exercised prior to the effective date of such transaction.
8. Participation. An eligible employee may become a participant by completing,
signing and filing an Enrollment Agreement and any other necessary papers with
the Company at least one (1) day prior to the commencement of the particular
offering in which he or she wishes to participate. Payroll deductions for a
participant shall commence the first pay date coinciding with or following the
Offering Date and shall end on the last pay date coinciding with or prior to the
termination date of such offering, unless earlier terminated by the employee, as
provided in Section 14. Participation in one offering under the Plan shall
neither limit, nor require, participation in any other offering.
9. Payroll Deductions.
9.1 At the time a participant files his or her Enrollment Agreement,
he or she shall elect to have deductions made from his or her pay on each
pay date during the time he or she is a participant in any offering at not
less than $5 nor more than 20% of his or her Base Pay during any pay
period.
9.2 All payroll deductions made for a participant shall be credited to
his or her Account under the Plan. A participant may not make any separate
cash payment into such Account nor may payment for shares be made other
than by payroll deduction.
9.3 A participant may discontinue his or her payroll deductions or
participation in the Plan as provided in Section 14, but no other change
can be made during an offering and, specifically, except as provided in
Section 14, a participant may not alter the rate of his or her payroll
deductions for that offering.
10. Granting of Option.
10.1 On the Offering Date, this Plan shall be deemed to have granted
to the participant an option for as many full shares as he or she will be
able to purchase with the payroll deductions (and any interest allocated
with respect to such deductions by the Committee) credited to his or her
Account during his or her participation in that offering.
10.2 Notwithstanding the foregoing, no employee shall be granted an
option which permits his or her rights to purchase Common Stock under the
Plan and any similar employee stock purchase plans of the Company or any
parent or subsidiary corporations to accrue at a rate which exceeds $25,000
of fair market value of such Common Stock (determined at the time such
option is granted) for each calendar year during which such option is
outstanding at any time. The purpose of the limitation in the preceding
sentence is to comply with Section 423(b)(8) of the Code.
10.3 If the total number of shares for which options are to be granted
on any date in accordance with Paragraph 10.1 exceeds the number of shares
available pursuant to Section 6 or allowed pursuant to Section 10.2 (after
deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares
remaining available in as nearly a uniform manner as shall be practical and
as it shall determine to be equitable.
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11. Exercise of Option. Each employee who continues to be a participant in an
offering on the last business day of that offering shall be deemed to have
exercised his or her option on such date and shall be deemed to have purchased
from the Company such number of full shares of Common Stock reserved for the
purpose of the Plan as his or her accumulated payroll deductions (and any
interest allocated with respect to such deductions by the Committee) on such
date will pay for at the purchase price, subject only to the limitation set
forth in Section 10.2.
12. Employee's Rights as a Shareholder.
12.1 No participating employee shall have any right as a shareholder
with respect to any shares under the Plan until the shares have been
purchased in accordance with Section 11 above and the stock certificate has
actually been issued.
12.2 Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or, if the participant so
directs, by written notice to the Company
13. Delivery. Certificates for stock issued to participants will be delivered as
soon as practicable after the end of each offering.
14. Withdrawal.
14.1 An employee may withdraw from the Plan, in whole or in part, at
any time prior to the last business day of each offering by delivering a
Withdrawal Notice to the Company, in which event the Company will refund
the amount of his or her Account being withdrawn as soon as practicable
thereafter.
14.2 To re-enter the Plan, an employee who has previously withdrawn
from the Plan in whole must file a new Enrollment Agreement in accordance
with Section 8. His or her re-entry into the Plan cannot, however, become
effective before the beginning of the next offering following his or her
withdrawal.
14.3 An employee may elect to discontinue his or her payroll
deductions during the course of a particular offering, at any time prior to
the last business day preceding the final pay day during such offering, by
delivering an Election to Discontinue Deductions to the Company, and such
election shall not constitute a withdrawal for the purposes of this Section
14. In the event that an employee elects to discontinue his or her payroll
deductions pursuant to this Section 14.3, the employee shall remain a
participant in such offering and shall be entitled to purchase from the
Company such number of shares of Common Stock as set forth in and in
accordance with Section 11.
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15. Carryover of Account. At the termination of each offering, the Company shall
return to the employee the balance of his or her Account unless the employee has
advised the Company otherwise by way of re-executing an Enrollment Agreement
before the commencement of the succeeding offering electing to have the balance
carried over to be applied against option exercises in such succeeding offering.
Upon termination of the Plan, the balance of each employee's Account shall be
returned to him or her.
16. Interest. The Committee shall credit Accounts with interest at the current
passbook rate being paid by the Company's subsidiary, First Federal Bank, A
Federal Savings Bank.
17. Rights Not Transferable. No participant shall be permitted to sell, assign,
transfer pledge or otherwise dispose of or encumber either the payroll
deductions or interest credited to his or her Account or any rights with regard
to the exercise of an option or to receive shares under the Plan other than by
will or the laws of descent and distribution, and such right and interest shall
not be liable for, or subject to, the debts, contracts or liabilities of the
employee. If any such action is taken by the participant, or any claim is
asserted by any other party in respect of such right and interest, whether by
garnishment, levy, attachment or otherwise, such action or claim will be treated
as an election to withdraw funds in accordance with Section 14. During the
lifetime of the participant, options granted under the Plan are exercisable only
by him or her.
18. Termination of Employee's Rights. An employee's rights under the Plan will
terminate when he or she ceases to be an employee because of resignation,
lay-off, or discharge. A Withdrawal Notice will be considered as having been
received from the employee on the day his or her employment ceases, and all
payroll deductions (and any interest credited thereon) not used will be
refunded.
If an employee's employment shall be terminated by reason of normal or early
retirement under the Corporation's pension plan, death or disability prior to
the end of the current offering, he or she (or his or her designated
beneficiary, as named under the Company' s group life insurance program, in the
event of his or her death, or if none, his or her legal representative) shall
have the right, within ninety (90) days thereafter, to elect to have the balance
in his or her account either paid to him or her in cash or applied at the end of
the current offering toward the purchase of Common Stock.
19. Administration of the Plan. The Plan shall be administered by the Option
Administration Committee of the Board (the "Committee"). The members of the
Committee shall be designated from time to time by the Board. The decision of a
majority of the members of the Committee shall constitute the decision of the
Committee, and the Committee may act either at a meeting at which a majority of
the members of the Committee is present or by a written consent signed by all
members of the Committee. The Committee shall have the power and authority to
interpret any provision of the Plan or any option under it. Moreover it shall
have authority to prescribe, amend, waive, and rescind rules and regulations
relating to the Plan, and to make all other determinations necessary or
advisable in the administration of the Plan.
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20. Amendment or Discontinuance of the Plan. The Board shall have the right to
amend, modify or terminate the Plan at any time without notice; provided,
however, that no employee's existing rights under any offering already made
under Section 4 may be adversely affected thereby; and provided, further, that
no such amendment of the Plan shall, except as provided in Section 7, increase
the total number of shares to be offered, materially modify the requirements as
to eligibility for participation in the Plan, or materially increase the
benefits accruing to participants in the Plan, unless the approval of holders of
a majority of the shares of Common Stock of the Company voting in person or by
proxy at a duly constituted meeting, or adjournment thereof, is obtained
therefor. Upon any termination of the Plan, all payroll deductions not used to
purchase stock, including any interest credited thereon, will be refunded.
21. Limitations on Sale of Stock Purchased Under the Plan. The Plan is intended
to provide participants with Common Stock for investment and not for resale. The
Company does not, however, intend to restrict or influence any participant in
the conduct of his or her own affairs. A participant, therefore, may sell stock
purchased under the Plan at any time he or she chooses, subject to compliance
with any applicable federal or state securities laws; provided, however, that
because of certain federal tax requirements, each participant will agree, by
entering the Plan, promptly to give the Company notice of any such stock
disposed of within two years after the date of grant or one year within date of
exercise of the applicable option, showing the number of such shares disposed
of. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE
COMMON STOCK.
22. Withholding of Additional Federal Income Tax. The Company, in accordance
with Section 3402(a) of the Code and the Regulations and Rulings promulgated
thereunder, will withhold from the wages of all participants, in all payroll
periods following and in the same calendar year as the date on which
compensation is deemed received by the participants, additional income taxes in
respect of any amount that is considered compensation includable in the
participant' s gross income.
23. Governmental Regulation. The Company's obligation to sell and deliver shares
of the Company's Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
24. Approval of Shareholders. The Plan shall not take effect until approved by
the holders of a majority of the shares of Common Stock of the Company voting in
person or by proxy at a duly constituted meeting, or adjournment thereof, which
approval must occur within the period ending twelve (12) months after the date
the Plan is adopted by the Board.
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