<PAGE> 1
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 [ ]
<TABLE>
<CAPTION>
Check the appropriate box:
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
NORTHWEST INDIANA BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
NORTHWEST INDIANA BANCORP
9204 COLUMBIA AVENUE
MUNSTER, INDIANA 46321
(219) 836-9690
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1999
Notice is hereby given that the Annual Meeting of Shareholders of NorthWest
Indiana Bancorp (the "Company"), will be held at the Center for Visual &
Performing Arts, 1040 Ridge Road, Munster, Indiana, on Wednesday, April 21,
1999, at 8:30 A.M., for the following purposes:
(1) To elect three directors;
(2) To ratify the appointment by the Board of Directors of Crowe,
Chizek and Company LLP as auditors for the year ending December 31, 1999;
and
(3) To consider and act upon any other business as may properly come
before the meeting or any adjournment thereof.
All shareholders of record at the close of business on February 28, 1999
will be entitled to vote at the meeting or any adjournment thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. WHETHER OR
NOT YOU EXPECT TO BE PRESENT, PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED
PROXY CARD IN THE ACCOMPANYING ADDRESSED, POSTAGE-PREPAID ENVELOPE. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
MAILING YOUR PROXY CARD PROMPTLY. IF YOU ATTEND AND VOTE AT THE MEETING, YOUR
PROXY WILL BE CANCELED.
FRANK J. BOCHNOWSKI,
Secretary
Dated: March 22, 1999
(ANNUAL REPORT CONCURRENTLY MAILED)
<PAGE> 3
NORTHWEST INDIANA BANCORP
9204 Columbia Avenue
Munster, Indiana 46321
(219) 836-9690
----------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 21, 1999
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of NorthWest Indiana Bancorp (the "Company"), of proxies
to be voted at the Annual Meeting of Shareholders (the "Meeting") to be held at
8:30 A.M., on Wednesday, April 21, 1999, at the Center for Visual & Performing
Arts, located in Munster, Indiana, for the purposes set forth in the
accompanying Notice of Annual Meeting. The Board of Directors knows of no
matters, other than those reported below, which are to be brought before the
Meeting. However, if other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed form of proxy to vote such proxy
in accordance with their judgment on such matters.
At the close of business on February 28, 1999, the record date for the
Meeting, there were 2,763,156 shares of the Company's Common Stock outstanding
and entitled to vote at the Meeting. (All share numbers herein are rounded to
the nearest whole share. In addition, all share numbers are adjusted to reflect
a two for one stock split effected as a share dividend to shareholders of record
on February 28, 1999.) On all matters, including the election of directors, each
shareholder will have one vote for each share held.
If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time prior to the time it is voted. A proxy may be revoked by
written notice to the Company's Secretary or by attendance at the Meeting.
UNLESS REVOKED, A PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH THE
INSTRUCTIONS THEREON, OR, IF NO INSTRUCTIONS ARE GIVEN, FOR THE ELECTION AS
DIRECTORS OF ALL NOMINEES LISTED UNDER PROPOSAL 1 AND FOR ALL OTHER PROPOSALS.
Directors will be elected by a plurality of the votes cast. Each other proposal
is subject to the vote of the holders of a greater number of shares favoring
such proposal than those opposing it. A proxy may indicate that all or a portion
of the shares represented by such proxy are not being voted with respect to a
specific proposal. This could occur, for example, when a broker is not permitted
to vote shares held in street name on certain proposals in the absence of
instructions from the beneficial owner. Shares that are not voted with respect
to a specific proposal will be considered as not present and entitled to vote on
such proposal, even though such shares will be considered present for purposes
of determining a quorum and voting on other proposals. Abstentions on a specific
proposal will be considered as present, but not as voting in favor of such
proposal. Because none of the proposals to be considered at the meeting requires
the affirmative vote of a specified number of outstanding shares (they require
only a plurality or a majority of the shares voted), neither the non-voting of
shares nor abstentions on a specific proposal will affect the determination of
whether such proposal will be approved.
The cost of this solicitation will be borne by the Company. In addition to
solicitation by mail, the Company's directors, officers and regular employees
may solicit proxies personally or by telephone without additional compensation.
It is expected that this Proxy Statement and the accompanying Notice of Annual
Meeting and form of proxy will first be mailed to shareholders on or about March
22, 1999.
<PAGE> 4
ELECTION OF DIRECTORS
(Proposal No. 1)
NOMINEES
The Board of Directors is comprised of nine directors divided into three
classes of three directors each, with the term of one class expiring each year.
Each director serves until the annual meeting of shareholders held in the year
that is three years after such director's election and thereafter until such
director's successor is elected and qualified. There currently is one vacancy on
the Board of Directors, which will not be filled at the Meeting and will remain
vacant for the foreseeable future. Each of the Company's directors also serves
on the Board of Directors of the Company's wholly owned subsidiary, Peoples Bank
SB (the "Bank"), for a term running concurrently with his or her term on the
Company's Board of Directors.
The nominees for election this year are Frank J. Bochnowski, Lourdes M.
Dennison and Gloria C. Gray. Each has been nominated by the Board of Directors
for election as a director for a term to expire at the 2002 annual meeting of
shareholders and until his or her successor is elected and has qualified. It is
the intention of the persons named in the accompanying form of proxy, absent
contrary instructions thereon, to vote such proxy for the election to the Board
of Directors of these three individuals. Each nominee has consented to be named
herein and to serve as a director if elected. However, if any nominee becomes
unavailable for election, it is the intention of the persons named in the
accompanying form of proxy to nominate such other person as director as they may
in their discretion determine, in which event the shares will be voted for such
other person.
Unless otherwise indicated in a footnote to the following table, the
principal occupation of each director and nominee has been the same for the last
five years, and each such director or nominee possesses sole voting and
investment power with respect to the shares of Common Stock indicated as
beneficially owned by him or her.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
PRESENT OWNED ON PERCENT
PRINCIPAL DIRECTOR FEBRUARY 28, OF
NAME AGE OCCUPATION SINCE 1999 CLASS
------------ -------- ------------------------- -------- -------------- ---------
NOMINEES FOR DIRECTOR
(Term expiring at annual meeting
of shareholders in 2002)
<S> <C> <C> <C> <C>
Frank J. Bochnowski 60 Senior Vice President and
Secretary of the Company (1) N/A 36,510 (2) 1.32%
Lourdes M. Dennison 57 Administrative Director, 1983 105,728 (3) 3.83%
Kumpol Dennison Surgical
Corp., Merrillville, Indiana
Gloria C. Gray 69 Retired 1982 66,432 (4) 2.40%
</TABLE>
-2-
<PAGE> 5
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
PRESENT OWNED ON PERCENT
PRINCIPAL DIRECTOR FEBRUARY 28, OF
NAME AGE OCCUPATION SINCE 1999 CLASS
------------ -------- ------------------------- -------- -------------- ---------
DIRECTORS CONTINUING IN OFFICE
(Term expiring at annual meeting
of shareholders in 2000)
<S> <C> <C> <C> <C> <C>
David A. Bochnowski 53 President and Chief 1977 274,514(2) 9.91%
Executive Officer of the
Company (1)
Jerome F. Vrabel 49 Vice President, Grain 1984 143,088(2) 5.18%
Division of ED & F Man
International Inc., Chicago,
Illinois, a commodities
brokerage firm on the
Chicago Board of Trade
James L. Wieser 51 Attorney with Wieser & Sterba, 1999 5,872 0.21%
Schererville, Indiana
(Term expiring at annual meeting
of shareholders in 2001)
Leroy F. Cataldi 63 Pharmacist, 1977 69,862 2.53%
Dyer, Indiana
Stanley E. Mize 57 President, Stan Mize Town & 1997 17,314 0.63%
Countree Auto Sales, Inc.,
Schererville, Indiana
</TABLE>
- --------------
(1) Frank J. Bochnowski and David A. Bochnowski are first cousins.
(2) For further information regarding the beneficial ownership of these
shares, see "Security Ownership By Certain Beneficial Owners and
Management" below.
(3) Includes 90,126 shares owned by Mrs. Dennison's spouse.
(4) Includes 400 shares owned by Mrs. Gray's spouse.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.
-3-
<PAGE> 6
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the Board
and its committees. During the year ended December 31, 1998, the Board held
seven meetings. No director attended fewer than 75% of the total meetings of the
Board of Directors and committees on which such Board member served.
The Board of Directors has appointed an Audit Committee composed of
Directors Crandall, Dennison and Mize. Prior to his death in September 1998,
Director John J. Wadas, Jr. also served on the Audit Committee. Upon the
Meeting, Mr. Crandall will retire from the Board and the Audit Committee. The
Audit Committee functions as the Company's liaison with its external auditors
and reviews audit findings presented by the Company's internal auditor. The
Audit Committee, along with the external auditors and internal auditor, monitors
controls for material weaknesses and/or improvements in the audit function. The
Audit Committee also monitors or, if necessary, establishes policies designed to
promote full disclosure of the Company's financial condition. The Audit
Committee is independent of management. During the year ended December 31, 1998,
the Audit Committee held four meetings.
The Board of Directors has appointed a Compensation Committee composed of
Directors Bochnowski, Dennison, Gray and Vrabel. The Compensation Committee is
responsible for reviewing, determining and establishing the compensation of
directors and (as the Bank's Compensation Committee) the salaries, bonuses and
other compensation of the executive officers of the Bank. During the year ended
December 31, 1998, the Compensation Committee held one meeting.
The Board of Directors has not appointed a Nominating Committee. It has,
however, appointed an Executive Committee, composed of Directors Bochnowski,
Crandall, Dennison and Vrabel. Upon the Meeting, Mr. Crandall will retire from
the Executive Committee. The Executive Committee is authorized to exercise the
powers of the Board of Directors between regular Board meetings, except with
respect to the declaration of dividends and other extraordinary corporate
transactions. All actions of the Executive Committee are reviewed and ratified
by the full Board of Directors.
COMPENSATION OF AND TRANSACTIONS WITH OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
The following table sets forth, for the years ended December 31, 1998,
1997, and 1996, the cash and non-cash compensation received by each executive
officer who earned in excess of $100,000 from the Bank during 1998. The Company
itself pays no compensation to its employees, and each of the named executive
officers holds a similar position with the Bank. Each of the named executive
officers has been employed by the Company or the Bank for more than five years.
-4-
<PAGE> 7
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
NAME AND ALL OTHER
PRINCIPAL POSITION PERIOD SALARY BONUS (1) OPTIONS (2) COMPENSATION (3)
------------------ ------ ------ -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
David A. Bochnowski 1998 $ 200,051 $ 79,880 5,000 $ 39,612
Chairman and Chief 1997 190,961 70,615 4,000 38,745
Executive Officer 1996 181,867 45,942 2,000 36,017
Joel Gorelick 1998 $ 114,815 $ 31,250 2,300 $ 11,481
Vice President 1997 108,850 27,100 2,500 10,885
1996 103,666 20,300 2,000 9,330
Edward J. Furticella 1998 $ 112,942 $ 31,250 2,500 $ 11,294
Vice President, 1997 106,510 27,100 2,000 10,651
Chief Financial 1996 101,514 20,300 --- 9,136
Officer and Treasurer
Frank J. Bochnowski 1998 $ 99,983 $ 25,550 2,100 $ 9,998
Senior Vice President 1997 94,788 22,050 2,000 9,479
and Secretary 1996 90,275 16,650 2,000 8,125
</TABLE>
- ----------
(1) "Bonus" amounts represent annual payments under the Bank's incentive
plan, which is open to all employees who meet the eligibility
requirements of the Pension Plan described below. The incentive plan is
based upon the Company's return on assets, return on equity and
earnings per share.
(2) "Options" reflects options granted to acquire the listed number of
shares of Common Stock. The Company does not have a stock appreciation
rights (SAR) plan and has not granted restricted stock awards.
(3) "All Other Compensation" includes the following for Messrs. David
Bochnowski, Gorelick, Furticella and Frank Bochnowski: (i)
contributions on their behalf by the Bank under its Pension Plan of
$16,000, $11,481, $11,294 and $9,998, respectively, for 1998; $14,400,
$9,796, $9,586 and $8,531, respectively, for 1997; and $13,500, $9,330,
$9,136 and $8,125, respectively, for 1996; and (ii) contributions on
their behalf by the Bank under its Employee Stock Ownership Plan of
$1,600, $1,089, $1,065 and $948, respectively, for 1997. David
Bochnowski's other compensation also includes for each of 1998, 1997,
and 1996, (i) premiums in the amount of $19,649 per year paid by the
Bank for disability insurance and term insurance on Mr. Bochnowski's
life pursuant to his employment agreement described below and (ii)
credits in the amount of $4,005, $3,096 and $2,868, respectively, under
the Bank's Unqualified Deferred Compensation Plan.
COMPENSATION OF DIRECTORS
All directors who are not also officers of the Company or the Bank receive
an annual director's fee from the Bank of $15,213.
-5-
<PAGE> 8
EMPLOYMENT AGREEMENT
The Bank entered into an employment agreement with David A. Bochnowski as
President and Chief Executive Officer, effective March 1, 1988 and amended
January 18, 1992. The agreement has a three-year term and provides for annual
extensions for additional one-year terms, subject to annual review by the Bank's
Board of Directors, unless Mr. Bochnowski gives written notice that the
agreement will not be extended further. The agreement provides for a minimum
annual salary of $150,000 and for annual salary review by the Board of
Directors, as well as inclusion of Mr. Bochnowski in any discretionary bonus
plans, customary fringe benefits, vacation and sick leave. The agreement is
terminable by the Bank for "cause", defined in the agreement as termination for
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar minor
offenses) or final cease-and-desist order or a material breach of the agreement.
If the Bank were to terminate Mr. Bochnowski without cause, or in the event of
his death during the term of the agreement, Mr. Bochnowski or his estate would
be entitled to a continuation of his salary for a period of one year thereafter.
Mr. Bochnowski may terminate his agreement upon three months' notice to the
Bank.
The agreement provides that in the event of the termination of Mr.
Bochnowski's employment after any change in "control" of the Company or a change
in the capacity or circumstances in which he is employed as contemplated by the
agreement, he will be promptly paid a sum equal to 2.99 times the average annual
compensation he received during the five-year period immediately prior to the
date of change of control. "Control" is defined in the agreement by reference to
the control determinations set forth in federal banking regulations, which
generally define "control" as the acquisition by any person or entity of the
ownership or power to vote more than 25% of the stock of a bank or its holding
company, although under certain circumstances control may occur upon the
acquisition of 10% of such stock unless successfully rebutted.
Mr. Bochnowski's agreement provides that in the event he becomes disabled
during the term of the agreement, he shall continue to receive his full
compensation for the first 18 months from the date of such disability, at which
time the Bank may terminate the agreement and Mr. Bochnowski shall receive 60%
of his monthly salary at the time he became disabled until the earlier of his
death or his normal retirement date under the Bank's Pension Plan. The agreement
provides that these amounts shall be offset by any amounts paid to Mr.
Bochnowski under any other disability program maintained by the Bank. The
agreement also requires the Bank to maintain term insurance on Mr. Bochnowski's
life in the amount of $750,000, payable to his designated beneficiaries.
1994 STOCK OPTION AND INCENTIVE PLAN
The Board of Directors adopted the 1994 Stock Option and Incentive Plan
(the "Option Plan"), which was approved by shareholders at the 1994 annual
meeting. Pursuant to the Option Plan, an aggregate of 240,000 shares of the
Company's Common Stock are reserved for issuance in respect of incentive awards
granted to officers and other employees of the Company and the Bank. Awards
granted under the Option Plan may be in the form of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or non-incentive stock options or restricted stock. The
purposes of the Plan are to attract and retain the best available personnel, to
provide additional incentives for all employees and to encourage their continued
employment by facilitating employees' purchases of an equity interest in the
Company. The Option Plan is administered by a committee composed of Directors
Dennison, Gray and Vrabel, none of whom is eligible to receive awards under the
Plan. The committee has discretion
-6-
<PAGE> 9
as to the persons who will receive awards and in what amount. As of December 31,
1998, approximately 89 employees were eligible to be considered for incentive
awards under the Option Plan.
OPTION GRANTS
During the year ended December 31, 1998, a total of 11,900 stock options
were granted under the Option Plan to the executive officers named in the
Summary Compensation Table. In each case, the exercise price per share was equal
to the fair market value of the Common Stock at the time of the grant.
The table below sets forth further information regarding grants of stock
options pursuant to the Option Plan during the year ended December 31, 1998, to
the persons named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS GRANTED EXERCISE PRICE APPRECIATION FOR
OPTIONS TO EMPLOYEES PRICE EXPIRATION OPTION TERM (2)
NAME GRANTED IN FISCAL YEAR (PER SHARE) DATE (1) 5% 10%
- ---------------------- ------------------ ------------------ -------------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
David A. Bochnowski 5,000 28.9% $20.50 1/15/08 $28,319 $62,577
Joel Gorelick 2,300 13.3% 20.50 1/15/08 13,027 28,786
Edward J. Furticella 2,500 14.5% 20.50 1/15/08 14,159 31,289
Frank J. Bochnowski 2,100 12.1% 20.50 1/15/08 11,894 26,282
</TABLE>
(1) All options listed in the table first become exercisable on the fifth
anniversary of the date of grant and expire upon the executive's
termination of employment for cause or for any other reason other than
death, disability or retirement. All options become immediately
exercisable upon the commencement of a tender or exchange offer for the
Common Stock, or upon a change in control of the Company.
(2) The dollar amounts under these columns are based on the 5% and 10% rates
set by the Securities and Exchange Commission and are not intended to
forecast possible appreciation of the Company's stock price. The
calculations assume a five-year option term.
OPTION EXERCISES AND YEAR-END OPTION VALUES
The table below sets forth certain information regarding each exercise of
options during the year ended December 31, 1998 by the persons named in the
Summary Compensation Table and the unexercised options held by them at December
31, 1998.
-7-
<PAGE> 10
<TABLE>
<CAPTION>
NUMBER NUMBER OF VALUE OF UNEXERCISED
OF SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS HELD AT OPTIONS AT
NAME ON EXERCISE REALIZED DECEMBER 31, 1998 DECEMBER 31, 1998
- --------------------- ------------------ ------------- --------------------------- ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David A. Bochnowski --- --- 8,000 19,000 $125,488 $120,460
Joel Gorelick --- --- --- 10,800 --- 70,130
Edward J. Furticella --- --- --- 12,500 --- 94,210
Frank J. Bochnowski --- --- --- 10,100 --- 67,530
</TABLE>
BENEFITS
Profit Sharing Plan and Trust (Pension). The Bank maintains a Profit
Sharing Plan and Trust (the "Pension Plan") for the benefit of its eligible
employees. All employees are eligible to participate in the Pension Plan if they
have completed one year of employment with more than 1,000 hours of service, and
have reached their 21st birthday. This plan is non-contributory on the part of
the employee. Each plan year the Bank's Board of Directors determines the amount
to be contributed by the Bank. This contribution is discretionary and is based
on the Bank's financial performance. During the year ended December 31, 1998,
the Bank contributed $270,391 to the Pension Plan. The amounts of these
contributions on behalf of the executive officers named in the Summary
Compensation Table are included in that table under the column "All Other
Compensation." Pension benefits vest on the following scale: two years of
service, 40% of benefits accrued through the prior fiscal year; three years of
service, 60% of benefits accrued through the prior fiscal year; four years of
service, 80% of benefits accrued through the prior fiscal year; and five years
of service, 100% of benefits accrued through the prior fiscal year. The normal
retirement age is the first day after reaching age 65, at which time the
employee is entitled to receive 100% of the contributions previously made.
Employee Stock Ownership Plan. The Bank adopted an Employee Stock Ownership
Plan (the "ESOP") effective July 1, 1990. No contribution to the ESOP was made
during the year ended December 31, 1998, and the ESOP will be terminated during
1999. At December 31, 1998, there were 2,188 shares of the Company's Common
Stock held under the ESOP and allocated to participants.
401(k) Plan. The Bank maintains a 401(k) defined contribution retirement
plan for the benefit of its eligible employees. All employees are eligible to
participate in the plan if they have completed one year of employment and 1,000
hours of service and have reached their 21st birthday. This plan is
non-contributory on the part of the Bank. Participating employees may elect to
contribute up to ten percent of their compensation on a pre-tax basis into the
plan through regular payroll deduction. Such funds will be invested as directed
by participants into eight investment options. All participants are always 100%
vested in their contributions and the earnings on their investments.
Distributions of participant account assets can occur upon retirement, for
hardship, upon attainment of age 59-1/2, upon disability, upon the death of the
participant and upon termination of service. The normal retirement age is 65;
participants may request early retirement distribution upon retirement and
reaching age 55. Participants may obtain loans from the plan pursuant to uniform
provisions meeting the requirements of the Code, using their account assets as
collateral.
-8-
<PAGE> 11
Unqualified Deferred Compensation Plan. The Bank adopted an Unqualified
Deferred Compensation Plan (the "Deferred Compensation Plan") during 1995. The
purpose of the Deferred Compensation Plan is to provide deferred compensation to
key senior management employees of the Bank in order to recognize their
substantial contributions to the Bank and to provide them with additional
financial security as inducement to remain with the Bank. The Deferred
Compensation Plan is administered by the Bank's Compensation Committee. In order
to be eligible for participation in the Deferred Compensation Plan, an employee
must hold a key management, full-time position in which he has the opportunity
to impact significantly on the annual operating success of the Bank. Of those
eligible employees, the Compensation Committee selects which persons shall be
participants in the Deferred Compensation Plan. Participants' accounts are
credited each year with an amount based on a formula involving the participant's
employer-funded contributions under all qualified plans and the limitations
imposed by Code subsection 401(a)(17) and Code section 415. Following the
cessation of the employment of the participant by the Bank for any reason,
including the participant's death, the participant's account is distributed to
the participant (or, in the event of his death, to his designated beneficiary)
in a lump sum cash payment. Currently, David A. Bochnowski is the only
participant in the Deferred Compensation Plan. For the year ended December 31,
1998, the Bank credited $4,005 to Mr. Bochnowski's account under the Deferred
Compensation Plan. This amount is included in Mr. Bochnowski's compensation in
the Summary Compensation Table under the column "All Other Compensation."
Bank Loans. From time to time, the Bank makes loans to the Company's
directors and officers and their family members. All of such loans are made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with the general public and
do not involve more than the normal risk of repayment or present other
unfavorable features. Loans made to a director or executive officer in excess of
$50,000 must be approved in advance by the disinterested members of the Bank's
Board of Directors.
Health and Insurance Benefits. The Bank provides health and accident
benefits for all full-time employees. Dependent coverage is provided at the
employee's expense through a group insurance plan upon request. Term life
insurance is provided for all employees who have completed one year of
employment with more than 1,000 hours of service and have reached their 21st
birthday.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors establishes the
compensation of the Bank's executive officers. In setting compensation levels,
the Company seeks to create a cost-effective and fair package that will attract,
retain, and motivate the finest employees available to the Company and the Bank.
The Bank compensates each executive officer based primarily on the following
factors:
* The executive's level of job responsibility and performance;
* The Company's performance; and
* Compensation available from comparable companies and rivals for an
executive's services.
The Company structures compensation to motivate executives to achieve the
Company's strategic goals. Accordingly, executive compensation is linked to the
Company's short-term and long-term performance.
-9-
<PAGE> 12
Stock options, for example, provide a direct link between executive
compensation and long-term creation of shareholder value. Customarily, options
awarded by the Company do not become exercisable until five years after the
grant (barring a change in control in the Company). Further, the options are
forfeited immediately upon the termination of employment of an executive for
cause or for any reason other than death, disability, or retirement. An Options
Committee, composed of Compensation Committee members Dennison, Gray, and
Vrabel, proposed awards of options for 1998 based upon (1) the Company's
earnings, (2) the Company's performance when compared to its peers, (3) the
Company's achievement of strategic goals, and (4) the executive's performance.
Options were awarded as set forth in the "Option Grants" table above.
Similarly, the Bank's incentive plan provides additional compensation based
upon the Company's performance relative to targets set for return on assets,
return on equity, and earnings per share. The Company's performance satisfied
conditions for payments under the incentive plan.
Finally, the Committee attempted to maintain the Company's compensation
package at a level consistent with compensation paid by comparable firms. The
Committee considered various surveys, including those available from Sheshunoff,
Cole Financial, Inc. and America's Community Bankers.
David A. Bochnowski's compensation for 1998 was determined in accordance
with the same procedures and standards as for the other executive officers of
the Company; however, Mr. Bochnowski does not vote upon his own compensation,
his option awards under the Company's Option Plan, or his bonus awards under the
Bank's incentive plan. Further, for 1998, the Committee procured a report on
executive compensation from Cole Financial, Inc. to assist the Committee in
evaluating Mr. Bochnowski's compensation under the comparability standards
described above. Taking into account the Company's asset and net income growth,
return on assets and return on equity results, and operating expenses, the Cole
Report concluded that Mr. Bochnowski's compensation (salary, incentive and
options) was competitive when compared to similarly performing peers. (The Cole
Report also found that the compensation (salary, incentive and options) paid to
Messrs. Gorelick, Furticella and Frank Bochnowski was also competitive.) The
Board of Directors and the Compensation Committee approved Mr. David
Bochnowski's compensation for 1998, as well as the 1998 compensation of Messrs.
Gorelick, Furticella and Frank Bochnowski.
Compensation Committee
----------------------
David A. Bochnowski
Lourdes M. Dennison
Gloria C. Gray
Jerome F. Vrabel
-10-
<PAGE> 13
COMPARATIVE STOCK PERFORMANCE
The performance graph and table below compare the cumulative total
shareholder return for the Company with the cumulative total return for the
Nasdaq Stock Market ("Nasdaq Market Index"), for Nasdaq Bank stocks ("Nasdaq
Bank Index"), and for the SNL Securities index of Nasdaq bank stocks having $250
million to $500 million in assets ("SNL $250M-$500M Bank Index").* Among these
indices, the Company believes the SNL $250M-$500M Bank Index is the most
relevant for comparing the Company's performance because it comprises financial
institutions most comparable to the Company's size.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Company 100 141.4 187.8 216.9 315.0 324.9
- -----------------------------------------------------------------------------------------------------------------
Nasdaq Market Index 100 97.8 138.3 170.0 208.6 293.2
- -----------------------------------------------------------------------------------------------------------------
Nasdaq Bank Index 100 99.6 148.4 195.9 328.0 324.9
- -----------------------------------------------------------------------------------------------------------------
SNL $250M-$500M Bank Index 100 107.9 145.6 189.1 327.0 292.8
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* The Company incorporated on January 31, 1994 and adopted a calendar fiscal
year. On July 31, 1994, the Company acquired all of the outstanding common
stock of the Bank. Prior to that time, the Bank's stock traded
independently, and the Bank had a fiscal year end of June 30. In order to
furnish a five-year comparison, the performance graph and table provide
calendar year-end data based on the performance of the Bank for years ended
prior to 1994 and the Company thereafter.
-11-
<PAGE> 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Of the members of the Company's Compensation Committee (Directors
Bochnowski, Dennison, Gray, and Vrabel), only Mr. Bochnowski serves or has
served as an officer or employee of the Company or its subsidiaries. As stated
above under "Benefits -- Bank Loans," from time to time the Bank makes loans to
the Company's directors, including members of the Compensation Committee, and
their families. No Compensation Committee member has any other relationship
requiring disclosure as an interlocking executive officer or director or
otherwise under the rules of the Securities and Exchange Commission (the "SEC").
RATIFICATION OF APPOINTMENT OF AUDITORS
(PROPOSAL NO. 2)
The Board of Directors has renewed the Company's arrangements with Crowe,
Chizek and Company LLP, independent auditors, to be its auditors for the year
ending December 31, 1999, subject to ratification by shareholders. A
representative of Crowe, Chizek and Company LLP is expected to be present at the
meeting, will have the opportunity to make a statement if he so desires and will
be available to respond to appropriate questions.
During 1998, Crowe, Chizek and Company LLP provided services in connection
with the firm's audit function, which included an examination of the Company's
financial statements, assistance in preparation of reports filed with the SEC,
and meeting with the Company's Board of Directors and Audit Committee relative
to the audit. Non-audit services were primarily related to assistance in the
development of internal audit programs and the preparation and review of the
Company's federal and state tax returns. Crowe, Chizek and Company LLP performs
similar audit and non-audit services for the Bank.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of February 28, 1999, certain
information as to those persons who were known by management to be beneficial
owners of more than 5% of the Company's Common Stock and as to the shares of the
Common Stock beneficially owned by the persons named in the "Summary
Compensation Table" and by all directors and executive officers as a group.
Persons and groups owning more than 5% of the Common Stock are required to file
certain reports regarding such ownership with the Company and the SEC pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based
on such reports, management knows of no persons, other than as set forth in the
table below, who owned more than 5% of the Common Stock at February 28, 1999.
Individual beneficial ownership of shares by the Company's directors is set
forth in the table above under "Election of Directors." Beneficial ownership by
directors and officers includes shares underlying stock options held by such
persons under the Company's Option Plan that are exercisable within 60 days of
February 28, 1999.
-12-
<PAGE> 15
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF SHARE
OF INDIVIDUAL OR OF BENEFICIAL OF COMMON STOCK
IDENTITY OF GROUP OWNERSHIP OUTSTANDING
------------------- ----------- ------------
<S> <C> <C>
David A. Bochnowski 274,514 (1) 9.91%
515 Wilderness Drive
Schererville, IN 46375
Jerome F. Vrabel 143,088 (2) 5.18%
506 Wilderness Drive
Schererville, IN 46375
Joel Gorelick 45,798 (3) 1.65%
8589 West 85th Street
Schererville, IN 46375
Edward J. Furticella 40,465 (4) 1.46%
1348 McCoy Drive
Schererville, IN 46375
Frank J. Bochnowski 36,510 (5) 1.32%
140 Vickroy Drive
Crown Point, IN 46307
All directors and executive 805,583 (6) 29.07%
officers as a group (10 persons)
</TABLE>
- -----------------
(1) Includes 45,676 shares as to which Mr. Bochnowski's spouse has voting and
dispositive power and 26,400 shares which are owned by their minor children
for which his spouse is custodian or trustee. Also includes stock options
representing 8,000 shares of Common Stock which were exercisable at
February 28, 1999.
(2) Includes 48,748 shares owned by Mr. Vrabel's spouse.
(3) Includes 666 shares owned by Mr. Gorelick's spouse.
(4) Includes 664 shares owned by Mr. Furticella's spouse.
(5) Includes 7,722 shares owned by Mr. Bochnowski's spouse.
(6) Includes 8,000 shares as stock options which the Company's executive
officers hold under the Option Plan and which were exercisable at February
28, 1999. Such shares have been added to the total shares outstanding in
order to determine the ownership percentage of the Company's directors and
executive officers as a group at February 28, 1999.
-13-
<PAGE> 16
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Company's Common Stock, to
file reports of ownership with the SEC. Officers, directors and greater than 10%
shareholders are required to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of copies of such forms
received by it, or written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes that during the
year ended December 31, 1998, all filing requirements applicable to its
officers, directors, and greater than 10% shareholders were complied with,
except that (i) David A. Bochnowski filed one late report for one transaction,
(ii) Jerome F. Vrabel filed two late reports for two transactions and (iii)
Lourdes M. Dennison filed one late report for one transaction.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's annual meeting of shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's office at 9204 Columbia
Avenue, Munster, Indiana, no later than November 25, 1999. Any such proposals
shall be subject to the requirements of the proxy rules adopted under the
Exchange Act. Any shareholder proposal received after November 23, 1999 will not
be included in the Company's proxy materials for the 2000 annual meeting. In
addition, any shareholder proposal received after February 6, 2000 will be
considered untimely for consideration at that meeting.
ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST, THE COMPANY WILL FURNISH TO SHAREHOLDERS, WITHOUT
CHARGE, A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K
(INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, BUT EXCLUDING EXHIBITS). SEND
YOUR REQUEST TO: SECRETARY, NORTHWEST INDIANA BANCORP, 9204 COLUMBIA AVENUE,
MUNSTER, INDIANA 46321.
INCORPORATION BY REFERENCE
To the extent this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Exchange Act
or the Securities Act of 1933, as amended, the sections of this Proxy Statement
entitled "Compensation Committee Report on Executive Compensation" and
"Comparative Stock Performance" shall not be deemed to be so incorporated unless
specifically otherwise provided in any such filing.
FRANK J. BOCHNOWSKI,
Secretary
Dated: March 22, 1999
-14-
<PAGE> 17
NORTHWEST INDIANA BANCORP
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
I hereby appoint the official proxy committee of the Board of Directors of
NorthWest Indiana Bancorp (the "Company"), or any member thereof, my proxies,
with power of substitution, to vote all shares of the Company's Common Stock
which I am entitled to vote at the Annual Meeting of Shareholders, to be held at
the Center for Visual & Performing Arts, Munster, Indiana, on Wednesday, April
21, 1999, at 8:30 A.M., and at any adjournment, as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR nominees listed below (except WITHHOLD AUTHORITY to vote for
those stricken below) [ ] all nominees listed below [ ]
Frank J. Bochnowski Lourdes M. Dennison Gloria C. Gray
INSTRUCTIONS: To WITHHOLD authority to vote for any individual nominee strike through that nominee's name above.
2. PROPOSAL TO RATIFY THE APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP, as auditors for the fiscal year ending
December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion on any other matters that may properly come before the meeting or any adjournment thereof.
(Continued and to be signed on the other side)
(Continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER SPECIFIED HEREON AND, IN THE ABSENCE OF
SPECIFICATION, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND FOR ALL OTHER PROPOSALS.
Please sign exactly as name appears below. When shares are held by two or more persons, all of them should sign.
When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by a duly authorized officer. If a partnership, please sign in
partnership name by authorized person. Receipt of Notice of Annual Meeting, Proxy Statement and Annual Report to
Shareholders is hereby acknowledged.
- ------------------------------------------------------- -------------------------------------------------------
Signature Signature if Held Jointly
Date , 1999
--------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
</TABLE>
