SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (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 Rule 14a-11(c) or Rule 14a-12
OLD NATIONAL BANCORP
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(Name of Registrant as Specified in Its Charter)
OLD NATIONAL BANCORP
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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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OLD NATIONAL BANCORP
420 MAIN STREET
EVANSVILLE, INDIANA 47708
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders of Old
National Bancorp (the "Company") will be held on Thursday, April 18, 2002 at
10:30 a.m., Evansville time, at The Centre, 715 Locust Street, Evansville,
Indiana.
The Annual Meeting will be held for the following purposes:
1. Approval of the amendments to Article VII of the Company's Articles of
Incorporation to provide for a Board of Directors with staggered terms.
2. Approval of the amendments to Article II of the Company's Articles of
Incorporation to update the purpose and general powers of the Company.
3. Election of fifteen Directors in the classes indicated in the attached
proxy statement to serve until the election and qualification of their
respective successors.
4. Ratification of the appointment of PricewaterhouseCoopers LLP, as
independent accountants of the Company and its affiliates for the fiscal
year ending December 31, 2002.
5. Transaction of such other business as may properly come before the
Annual Meeting or any adjournments and postponements thereof.
Shareholders of record at the close of business on February 11, 2002, are
entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Jeffrey L. Knight
Corporate Secretary
March 15, 2002
IMPORTANT
PLEASE VOTE YOUR PROXY PROMPTLY BY MAIL OR BY INTERNET. IN ORDER THAT THERE MAY
BE PROPER REPRESENTATION AT THE MEETING, YOU ARE URGED TO COMPLETE, SIGN, DATE
AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED OR VOTE BY INTERNET,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
OLD NATIONAL BANCORP
420 MAIN STREET
EVANSVILLE, INDIANA 47708
PROXY STATEMENT
This proxy statement is furnished to the shareholders of Old National
Bancorp (the "Company") in connection with the solicitation by the Board of
Directors of proxies to be voted at the Annual Meeting of Shareholders of the
Company to be held on Thursday, April 18, 2002, at 10:30 a.m., Evansville time,
at The Centre, 715 Locust Street, Evansville, Indiana, and at any and all
adjournments or postponements of such meeting (the "Annual Meeting"). A Notice
of Annual Meeting of Shareholders and form of proxy accompany this proxy
statement.
Any shareholder giving a proxy has the right to revoke it by voting in
person at the Annual Meeting, by timely delivery of a later-dated proxy or by a
written notice delivered to the Corporate Secretary of the Company, P.O. Box
718, Evansville, Indiana 47705-0718, at any time before such proxy is exercised.
All proxies will be voted in accordance with the directions of the shareholder
giving such proxy. To the extent no directions are given, proxies will be voted
"FOR" approval of both of the amendments to the Company's Articles of
Incorporation discussed herein, "FOR" the election of the persons named as
nominees in this proxy statement as Directors of the Company and "FOR" the
ratification of the appointment of PricewaterhouseCoopers LLP as independent
accountants of the Company and its affiliates for the fiscal year ending
December 31, 2002. With respect to such other matters that may properly come
before the Annual Meeting, it is the intention of the persons named as proxies
to vote in accordance with their best judgment.
The complete mailing address of the principal executive offices of the
Company is Old National Bancorp, P.O. Box 718, Evansville, Indiana 47705-0718.
The approximate date on which this proxy statement and form of proxy for the
Annual Meeting are first being sent or given to shareholders of the Company is
March 15, 2002.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only shareholders of the Company of record at the close of business on
February 11, 2002, will be eligible to vote at the Annual Meeting.
The voting securities of the Company entitled to be voted at the Annual
Meeting consist only of common stock, without par value, of which 61,008,257
shares were issued and outstanding on the record date of February 11, 2002. The
Company has no other class of stock that is outstanding. Each shareholder of
record on the record date will be entitled to one vote for each share of common
stock registered in the shareholder's name.
As of February 11, 2002, to the knowledge of the Company, no person or firm,
other than the Company, beneficially owned more than 5% of the common stock of
the Company outstanding on that date. As of February 11, 2002, no individual
director, nominee or officer beneficially owned more than 5% of the common stock
of the Company outstanding.
As of February 11, 2002, to the knowledge of the Company, only the Company
indirectly beneficially owned more than 5% of the outstanding common stock of
the Company. The Company indirectly owned 5,001,774 shares of common stock of
the Company, which constituted 8.20% of the outstanding common stock of the
Company on that date. These shares are held in various fiduciary capacities
through the Company's wholly-owned trust company.
1
ITEM 1. AMENDMENT OF THE ARTICLES OF
INCORPORATION TO PROVIDE FOR A BOARD OF
DIRECTORS WITH STAGGERED TERMS
DESCRIPTION OF THE PROPOSED AMENDMENT OF ARTICLE VII
At a meeting held on February 28, 2002, the Company's Board of Directors
unanimously adopted resolutions approving and recommending to shareholders, an
amendment of Article VII, Section 1 of the Company's Articles of Incorporation
to provide for staggered terms of Directors. The proposed amendment sets forth
the specific staggered terms and provides for dividing the Company's Board of
Directors into three classes, as nearly equal in number as possible, with one
class to be originally elected for a term expiring at the Annual Meeting of
Shareholders to be held in 2003, another class to be originally elected for a
term expiring at the Annual Meeting of Shareholders to be held in 2004 and the
final class to be originally elected for a term expiring at the Annual Meeting
of Shareholders to be held in 2005, and with each Director to hold office until
his or her successor is duly elected and qualified. Commencing with the Annual
Meeting of Shareholders held in 2003 and at each Annual Meeting of Shareholders
thereafter, each Director whose term then expires would be elected to hold
office for a three-year term, with each Director to hold office until his or her
successor is duly elected and qualified.
The complete text of Section 1 of Article VII, as amended, reads as follows:
Section 1. Number of Directors; Term of Office; Removal. (a) The
number of directors of the Corporation, exclusive of the number of
directors who may be elected by the holders of any one or more series of
Preferred Stock of the Corporation (the "Preferred Stock Directors"),
shall not be less than seven or more than twenty-five, with the exact
number of directors to be fixed from time to time by the Board of
Directors in the By-Laws of the Corporation.
(b) The Board of Directors of the Corporation shall be divided into
three classes, as nearly equal in number as possible, with the term of
office of one class expiring each year. The three classes of directors
shall be filled such that the directors of the first class (designated
as Class I) shall be elected to hold office for a term expiring at the
annual meeting of shareholders in 2003, the directors of the second
class (designated as Class II) shall be elected to hold office for a
term expiring at the annual meeting of shareholders in 2004, and the
directors of the third class (designated as Class III) shall be elected
to hold office for a term expiring at the annual meeting of shareholders
in 2005. Commencing with the annual meeting of shareholders in 2003 and
at each annual meeting of shareholders thereafter, the directors in the
class whose terms shall then expire shall be elected for a term of three
years and until their respective successors are duly elected and
qualified.
(c) Any or all directors (exclusive of Preferred Stock Directors)
may be removed, with or without cause, only by (i) the affirmative vote
of the holders of not less than two-thirds of the outstanding shares of
common stock of the Corporation entitled to vote in the election of
directors, at a shareholders' meeting called for that purpose, or (ii)
the affirmative vote of not less than two-thirds of the entire Board of
Directors of the Corporation.
(d) This Section 1 of Article VII shall not be altered, amended or
repealed except by the affirmative vote of the holders of not less than
two-thirds of the outstanding shares of common stock of the Corporation,
at a shareholders' meeting duly called for
2
that purpose, on a proposal adopted and recommended by the vote of not less
than two-thirds of the entire Board of Directors of the Corporation.
The Board of Directors has concluded that it is in the best interests of the
Company to amend the Company's Articles of Incorporation to provide for
staggered terms for Directors. Because only one-third of the Directors will be
elected at each Annual Meeting of Shareholders, the Board believes that the
staggered terms of Directors would tend to promote continuity and stability in
the Company's management, business strategies and policies. In addition, by
providing for staggered terms, the Company ensures that two-thirds of the
Directors will have at least one year of experience on the Board and that new
Directors would have an opportunity to become familiar with the affairs of the
Company and to benefit from the experience of other Directors. This, in turn,
helps to assure that the Board consists of individuals with experience and
knowledge of the Company's business strategies and policies. The Board of
Directors also believes that staggered terms for Directors will enhance the
Company's ability to attract and retain well-qualified individuals who are able
to commit the time and resources to understand the Company, its business affairs
and operations.
If the amendment is adopted by the shareholders, the Directors elected at
this Annual Meeting would be divided into classes as follows: Class I,
consisting of David L. Barning, Larry E. Dunigan, Phelps L. Lambert, Louis L.
Mervis and Marjorie Z. Soyugenc, whose term would expire at the 2003 Annual
Meeting of Shareholders; Class II, consisting of Richard J. Bond, David E.
Eckerle, Ronald B. Lankford, James A. Risinger and Kelly N. Stanley, whose term
would expire at the 2004 Annual Meeting of Shareholders; and Class III,
consisting of Alan W. Braun, Andrew E. Goebel, Lucien H. Meis, John N. Royse and
Charles D. Storms, whose term would expire at the 2005 Annual Meeting of
Shareholders. If the amendment is not adopted by the shareholders, the Directors
elected at this Annual Meeting would serve only until the 2003 Annual Meeting of
Shareholders.
The Board of Directors in the manner set forth in the Company's By-Laws will
fill vacancies on the Board of Directors, including any vacancies created by an
increase in the number of Directors. In accordance with the By-Laws, the term of
a Director chosen to fill a vacancy will expire at the end of the term for which
the Director's predecessor was elected or in the event of an increase in the
number of Directors, the term of the Director chosen to fill the vacancy created
thereby will expire at the end of the term of the class to which that Director
is assigned.
The amendment is not in response to any effort, of which the Company is
aware, to obtain control of the Company. As a result, although the amendment may
have an anti-takeover effect, the amendment is not intended solely as an
anti-takeover provision. The amendment would preclude a third party from
electing the entire Board of Directors at a single Annual Meeting of
Shareholders and simultaneously gaining control of the Company's Board. With the
staggered terms of Directors as set forth above, it would take at least two
elections of Directors for any individual or group to gain control of the Board.
An overall effect of the amendment is to render more difficult the
accomplishment of undesired mergers, tender offers or proxy contests, the
assumption of control of the Board of Directors by an undesired shareholder or
other party, and/or the removal of current management and the Board of
Directors.
A principal function of the amendment, in conjunction with the Company's
existing anti-takeover devices described below, is to encourage persons seeking
to acquire control of the Company to initiate such an acquisition through arm's
length negotiations with the Board of Directors rather than through a hostile
takeover bid.
3
EXISTING ANTI-TAKEOVER DEVICES
Articles of Incorporation. The Company's Articles of Incorporation
currently authorize the issuance of 150,000,000 shares of common stock and
2,000,000 shares of preferred stock. Within the limits of applicable law and the
rules of the New York Stock Exchange, these shares are available to be issued,
without prior shareholder approval, in classes with relative rights and
preferences determined for each class by the Board of Directors.
The Board of Directors has authorized a series of preferred stock designated
as Series A preferred stock, and designated 200,000 shares of Series A preferred
stock in connection with the Company's shareholder rights plan. The Series A
preferred stock may not be issued except upon exercise of certain rights
pursuant to such shareholder rights plan. No shares of Series A preferred stock
have been issued as of the date hereof. On January 25, 1990, the Board of
Directors declared a dividend of one (1) right for each issued and outstanding
share of common stock. The dividend was payable on March 15, 1990 to holders of
record of common stock at the close of business on March 1, 1990. Each right
entitles the registered holder, upon the occurrence of certain events involving
a change in control, to purchase from the Company one-hundredth (1/100) of a
share of Series A preferred stock at an initial purchase price of $60.00,
subject to adjustment. The terms and conditions of the rights are contained in a
Rights Agreement between the Company and Old National Bank in Evansville, as
Rights Agent.
The Company's Articles of Incorporation provide that certain business
combinations may, under certain circumstances, require approval of more than a
simple majority of its issued and outstanding shares, and require a
super-majority shareholder vote of not less than eighty percent (80%) of the
outstanding shares of common stock for the amendment of certain significant
provisions.
The Company's Articles of Incorporation also provide that the Board of
Directors will consider non-financial factors that it deems relevant when
evaluating a business combination. Any amendment of this provision requires a
super-majority shareholder vote of not less than eighty percent (80%) of the
outstanding shares of common stock.
Finally, the Company's Articles of Incorporation provide that any person or
group of persons who acquires 15% of the Company's then outstanding common stock
must pay an amount at least equal to the highest percent over market value paid
for shares already held by such person or group when acquiring additional
shares. Any amendment of this provision requires a super-majority shareholder
vote of not less than eighty percent (80%) of the outstanding shares of common
stock.
These provisions in the Company's Articles of Incorporation are designed to
encourage potential acquirers to negotiate with the Company's Board of Directors
to preserve for shareholders the value of the Company in the event of a takeover
attempt. These provisions reduce the likelihood that a potential acquirer who is
unwilling to pay a market premium determined by the Company's Board of Directors
to be sufficient will attempt to acquire shares of the Company's stock by means
of an open market accumulation, tender offer or other coercive or unfair
takeover tactic. The current proposed amendment, together with the already
existing anti-takeover provisions in the Company's Articles of Incorporation,
would ensure that the Company, its shareholders and other stakeholders would be
protected from certain takeover attempts, or the acquisition of a substantial
block of equity, on terms which may be less favorable generally than would be
available in transactions negotiated with and approved by the Board of
Directors.
Indiana Law. Chapters 42 and 43 of the Indiana Business Corporation Law,
which are applicable to the Company, may be deemed to have certain anti-takeover
effects by prescribing,
4
in the case of Chapter 42, certain voting requirements in instances in which a
person acquires shares of the Company in excess of certain thresholds or
proscribing, in the case of Chapter 43, certain transactions between the Company
and an "interested stockholder" (defined generally as a person beneficially
owning 10% or more of a corporation's outstanding voting stock) during the five
year period following the time such person became an interested stockholder.
In addition, Chapter 35 of the Indiana Business Corporation Law provides
that in taking or declining to take any action, or in making or declining to
make any recommendation to the shareholders of the corporation with respect to
any matter, a board of directors may, in its discretion, consider both the short
term and long term best interests of the corporation, taking into account, and
weighing as the directors deem appropriate, the effects thereof on the
corporation's shareholders and the other corporate constituent groups and
interests, as well as any other factors deemed pertinent by the Directors. As a
result, by expanding the factors that may be considered relevant by the
Directors in assessing a takeover proposal, this provision could be deemed to
have certain anti-takeover effects.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors has carefully considered the proposed amendment to
the Company's Articles of Incorporation and UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE AMENDMENT. Assuming a quorum is present
at the Annual Meeting, the amendment will be approved by the shareholders if the
votes cast at the Annual Meeting in favor of the amendment exceed the votes cast
against it. If sufficient votes are received, the amendment will become
effective upon the filing of the Articles of Amendment or the Articles of
Restatement to the Company's Articles of Incorporation with the Secretary of
State of the State of Indiana.
5
ITEM 2. AMENDMENT OF THE ARTICLES OF
INCORPORATION TO UPDATE THE PURPOSE AND
GENERAL POWERS OF THE COMPANY
At a meeting held on February 28, 2002, the Company's Board of Directors
unanimously adopted resolutions approving and recommending to shareholders the
amendment of Article II of the Company's Articles of Incorporation to update the
Company's purpose and general powers. The complete text of Article II, as
amended, reads as follows:
ARTICLE II
PURPOSE AND POWERS
Section 1. Purpose. The purpose of the Corporation is to engage in any
lawful business.
Section 2. Powers. The Corporation shall possess, exercise and enjoy all
lawful rights, powers and privileges necessary or convenient to carry out
its business and affairs.
DISCUSSION OF THE PROPOSED AMENDMENT OF ARTICLE II
The Board of Directors has concluded that it is in the best interests of the
Company to amend the Company's Articles of Incorporation to update the Company's
corporate purpose and general powers. As a result of recent changes to federal
laws governing bank holding companies, the Board believes that the amendment is
appropriate.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT. Assuming a quorum is present at the Annual Meeting,
the amendment will be approved by the shareholders if the votes cast at the
Annual Meeting in favor of the amendment exceed the votes cast against it. If
sufficient votes are received, the amendment will become effective upon the
filing of the Articles of Amendment or the Articles of Restatement to the
Company's Articles of Incorporation with the Secretary of State of the State of
Indiana.
6
ITEM 3. ELECTION OF DIRECTORS
The third item to be acted upon at the Annual Meeting will be the election
of fifteen Directors to the Board of Directors of the Company in the classes
indicated below to serve until the election and qualification of his or her
successor. Provided the amendments to the Articles of Incorporation are
approved, those nominees designated as Class I will be elected to serve for a
one year term expiring at the 2003 Annual Meeting of Shareholders, those
nominees designated as Class II will be elected for a two year term expiring at
the 2004 Annual Meeting of Shareholders and those nominees designated as Class
III will be elected to serve for a three year term expiring at the 2005 Annual
Meeting of Shareholders.
If any Director nominee named in this proxy statement shall become unable or
decline to serve (an event which the Board of Directors does not anticipate),
the persons named as proxies will have discretionary authority to vote for a
substitute nominee named by the Board of Directors, if the Board determines to
fill such nominee's position. Unless authorization is withheld, the enclosed
proxy, when properly signed and returned, will be voted "FOR" the election as
Directors of all of the nominees listed in this proxy statement.
Pages 8 through 10 contain the following information regarding each Director
nominee of the Company: name; principal occupation or business experience for
the last five years (for principal occupation for the last five years of
Directors who are also Executive Officers, see page 12); age; and the year in
which the nominee first became a Director of the Company.
7
NOMINEES FOR CLASS I DIRECTORS - ONE YEAR INITIAL TERM
[DAVID L. BARNING [LARRY E. DUNIGAN [PHELPS L. LAMBERT
PHOTO] PHOTO] PHOTO]
DAVID L. BARNING LARRY E. DUNIGAN PHELPS L. LAMBERT
- CHAIRMAN, OHIO - CHIEF EXECUTIVE - MANAGING PARTNER,
VALLEY WIRELESS OFFICER, HOLIDAY BUSH AND LAMBERT
(Cable TV and MANAGEMENT COMPANY (Investments)
Internet Services) (Long Distance - Age 54
- Age 68 Communication & - Director since
- Director since Internet Services) 1990
1982 - Age 59
- Director since
1982
[LOUIS L. MERVIS [MARJORIE Z.
PHOTO] SOYUGENC PHOTO]
LOUIS L. MERVIS MARJORIE Z. SOYUGENC
- PRESIDENT, MERVIS - EXECUTIVE
INDUSTRIES, INC. DIRECTOR, WBH
(Steel Fabricating) EVANSVILLE, INC.,
- Age 67 WELBORN
- Director since FOUNDATION, INC.
1996 AND WELBORN
BAPTIST
FOUNDATION, INC.
(1999 - Present)
(Non-profit
foundation)
- FORMER PRESIDENT &
CEO, WELBORN
BAPTIST HOSPITAL
(1986 - 1999)
(Health Care)
- Age 61
- Director since
1993
8
NOMINEES FOR CLASS II DIRECTORS - TWO YEAR INITIAL TERM
[RICHARD J. BOND [DAVID E. ECKERLE [RONALD B. LANKFORD
PHOTO] PHOTO] PHOTO]
RICHARD J. BOND DAVID E. ECKERLE RONALD B. LANKFORD
- RETIRED COMMUNITY - RETIRED COMMUNITY - RETIRED PRESIDENT
CHAIRMAN, OLD CHAIRMAN, OLD & COO, OLD NATIONAL
NATIONAL BANK, NATIONAL BANK, BANCORP
VINCENNES, INDIANA JASPER, INDIANA - Age 68
(AN AFFILIATE OF (AN AFFILIATE OF - Director since
THE COMPANY) THE COMPANY) 1994
- Age 68 - Age 58
- Director since - Director since
1989 1993
[JAMES A. RISINGER [KELLY N. STANLEY
PHOTO] PHOTO]
JAMES A. RISINGER KELLY N. STANLEY
- CHAIRMAN, - PRESIDENT & CEO,
PRESIDENT & CEO, ONTARIO
OLD NATIONAL CORPORATION
BANCORP; CHAIRMAN, (Diversified
PRESIDENT & CEO, Technology/
OLD NATIONAL BANK Manufacturing
(AN AFFILIATE OF Company)
THE COMPANY) - Age 58
- Age 53 - Director since
- Director since 2000
1997
9
NOMINEES FOR CLASS III DIRECTORS - THREE YEAR INITIAL TERM
[ALAN W. BRAUN [ANDREW E. GOEBEL [LUCIEN H. MEIS
PHOTO] PHOTO] PHOTO]
ALAN W. BRAUN ANDREW E. GOEBEL LUCIEN H. MEIS
- PRESIDENT, - PRESIDENT & COO, - PRESIDENT, MEIS
INDUSTRIAL VECTREN VENTURES, INC.
CONTRACTORS, INC. CORPORATION (Financial
(Construction) (Utility) Investments)
- Age 57 - Age 54 - Age 67
- Director since - Director since - Director since
1988 2000 1985
[JOHN N. ROYSE [CHARLES D. STORMS
PHOTO] PHOTO]
JOHN N. ROYSE CHARLES D. STORMS
- RETIRED CHAIRMAN, - PRESIDENT & CEO,
OLD NATIONAL RED SPOT PAINT &
BANCORP VARNISH CO., INC.
- Age 68 (Manufacturer of
- Director since Industrial
1985 Coatings)
- Age 58
- Director since
1988
10
COMMON STOCK BENEFICIALLY OWNED BY DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth information concerning beneficial ownership
of the shares of common stock of the Company on February 11, 2002, by each
Director and Executive Officer and by all Directors and Executive Officers as a
group.
NUMBER OF SHARES PERCENT OF
NAME OF PERSON BENEFICIALLY OWNED(1) COMMON STOCK
-------------- --------------------- ------------
David L. Barning.................. 194,021(2) *
Richard J. Bond................... 87,979 *
Alan W. Braun..................... 126,607 *
Thomas F. Clayton................. 38,627(3) *
Wayne A. Davidson................. 38,203 *
Larry E. Dunigan.................. 249,062(4) *
David E. Eckerle.................. 93,131(5) *
Andrew E. Goebel.................. 6,535 *
Michael R. Hinton................. 46,517(6) *
Phelps L. Lambert................. 200,697(7) *
Ronald B. Lankford................ 33,052 *
Lucien H. Meis.................... 91,236(8) *
Louis L. Mervis................... 1,211(9) *
Daryl D. Moore.................... 33,853(10) *
John S. Poelker................... 22,167(11) *
James A. Risinger................. 90,773(12) *
John N. Royse..................... 298,284(13) *
Marjorie Z. Soyugenc.............. 243,100(14) *
Kelly N. Stanley.................. 16,126(15) *
Charles D. Storms................. 54,417(16) *
Directors and Executive Officers
as a Group (20 persons)......... 1,965,598 3.22%
-------------------------
* Less than 1%
(1) Unless otherwise indicated in a footnote, each person listed in the table
possesses sole voting and sole investment power with respect to the shares
shown in the table as owned by that person.
(2) Includes 32,275 shares held by Betty J. Barning, Mr. Barning's spouse;
1,015 shares held by David Nicholas Kappler and David L. Barning; and 769
shares held by Kerri R. Kappler and David L. Barning.
(3) Includes 1,061 shares held by Susan Clayton, Mr. Clayton's spouse. Also
includes 13,746 shares issuable to Mr. Clayton upon exercise of outstanding
stock options exercisable within 60 days.
(4) Includes 7,967 shares held by Kevin T. Dunigan Trust, Sharon Dunigan,
trustee; 8,671 shares held by Derek L. Dunigan Trust, Sharon Dunigan,
trustee; 2,142 shares held by Mitchell Ryan Dunigan Trust, Larry Dunigan,
trustee; and 38,287 shares held by Larry E. and Sharon Dunigan.
(5) Includes 742 shares held by David and Luella Eckerle and 20,907 shares held
by Luella Eckerle, Mr. Eckerle's spouse.
(6) Includes 5,314 shares held by Debra D. Hinton, Mr. Hinton's spouse. Also
includes 13,746 shares issuable to Mr. Hinton upon exercise of outstanding
stock options exercisable within 60 days.
(7) Includes 10,113 shares held by Carol M. Lambert, Mr. Lambert's spouse.
(8) Includes 6,739 shares held by Alane Meis, Mr. Meis' spouse.
(9) The Mervis Charitable Remainder Trust and the Ellen Joy Mervis Trust own
36,274 shares of common stock of the Company with respect to which Mr.
Mervis disclaims beneficial ownership.
11
(10) Also includes 13,746 shares issuable to Mr. Moore upon exercise of
outstanding stock options exercisable within 60 days.
(11) Also includes 14,849 shares issuable to Mr. Poelker upon exercise of
outstanding stock options exercisable within 60 days.
(12) Also includes 46,034 shares issuable to Mr. Risinger upon exercise of
outstanding stock options exercisable within 60 days.
(13) Includes 3,259 shares held by Peg G. Royse, Mr. Royse's spouse.
(14) Includes 231,801 shares held by Rahmi Soyugenc, Ms. Soyugenc's spouse.
(15) Includes 175 shares held by Donna M. Stanley, Mr. Stanley's spouse.
(16) Includes 695 shares held by Christian Storms; 146 shares held by Elizabeth
K. Storms, Mr. Storms' spouse; and 1,032 shares held by Katherine Storms.
EXECUTIVE OFFICERS OF THE COMPANY
The Executive Officers of the Company are listed in the table below. Each
officer serves a term of office of one year and until the election and
qualification of his successor.
NAME AGE OFFICE AND BUSINESS EXPERIENCE
---- --- ------------------------------
James A. Risinger 53 President of the Company since January 27, 2000, Chairman
of the Board and Chief Executive Officer since 1998,
Director since 1997, Executive Vice President from 1997
to 1998 and Senior Vice President from 1993 to 1997.
Thomas F. Clayton 56 Executive Vice President of the Company since January 27,
2000, Southern Regional Executive from 1997 to 2000 and
Senior Vice President from 1991 to 2000.
Christopher L. Melton 42 Executive Vice President of the Company since February
26, 2001, and Chairman, President and Chief Executive
Officer of Old National Signature Group since 2001.
Previously, Senior Vice President of Union Planters
Financial Services from 1998 to 2001 and Managing Partner
of Knarr Melton & Associates/Cigna from 1987 to 1998.
Daryl D. Moore 44 Executive Vice President of the Company since January 25,
2001, Senior Vice President from 1996 to 2001, Vice
President from 1995 to 1996 and Chief Credit Officer
since 1995. Executive Vice President and Chief Credit
Officer of Merchants National Bank (Terre Haute) from
1993 to 1995.
Michael R. Hinton 47 Executive Vice President of the Company and Community
Chairman of Old National Bank, Evansville, Indiana since
January 27, 2000. President of Old National Bank
(Evansville) from 1993 to 2000.
John S. Poelker 59 Executive Vice President of the Company since January 27,
2000, Chief Financial Officer since 1998 and Senior Vice
President from 1998 to 2000. Previously, Chief Financial
Officer of American General Finance from 1996 to 1998 and
Chairman and Chief Executive Officer of Fleet Finance
from 1993 to 1996.
Jeffrey L. Knight 42 Senior Vice President of the Company since July 26, 2001.
Corporate Secretary since 1994 and General Counsel since
1993.
12
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors include an Executive
Committee, an Audit Committee, a Compensation Committee, a Nominating Committee
and a Personnel Committee.
When the Board is not in session, the Executive Committee has all of the
power and authority of the Board except with respect to amending the Articles of
Incorporation or By-Laws of the Company; approving an agreement of merger or
consolidation; recommending to the shareholders the sale, lease or exchange of
all or substantially all of the Company's property and assets; recommending to
the shareholders a dissolution of the Company or a revocation of such
dissolution; declaring dividends; or authorizing the issuance or reacquisition
of shares. The Executive Committee did not meet in 2001 and currently does not
have any permanent members.
The principal duties of the Audit Committee are to nominate the independent
accountants for appointment by the Board; to meet with the independent
accountants to review and approve the scope of their audit engagement and the
fees related to such work; to meet with the Company's financial management,
internal audit management and independent accountants to review matters relating
to internal accounting controls, the internal audit program, the Company's
accounting practices and procedures and other matters relating to the financial
condition of the Company and its affiliates; and to report to the Board
periodically any conclusions or recommendations the Audit Committee may have
with respect to such matters. The members of the Audit Committee are Alan W.
Braun (Chairman), David L. Barning, Larry E. Dunigan and Phelps L. Lambert. The
Audit Committee held four meetings during 2001. At the end of each meeting, the
members of the Audit Committee have the opportunity to meet privately with the
Company's independent accountants with no officers or other personnel of the
Company present. The Audit Committee has adopted a written charter for the Audit
Committee.
The principal duties of the Compensation Committee are to review corporate
organizational structures; to review key employee compensation policies, plans
and programs; to monitor performance and establish compensation of officers of
the Company and other key employees; to prepare recommendations and periodic
reports to the Board concerning such matters; and to function as the committee
administering the Company's Short Term Incentive Plan, Restricted Stock Plan,
1999 Equity Incentive Plan, Pension Restoration Plan and Deferred Compensation
Plan. The current members of the Compensation Committee are Charles D. Storms
(Chairman), Larry E. Dunigan, Andrew E. Goebel and Lucien H. Meis, none of whom
is an officer or employee of the Company or any affiliate. The Compensation
Committee met four times during 2001.
The function of the Nominating Committee is to seek out, evaluate and
recommend to the Board qualified nominees for election as Directors of the
Company and to consider other matters pertaining to the size and composition of
the Board. The members of the Nominating Committee are Charles D. Storms
(Chairman), David L. Barning, Larry E. Dunigan and Phelps L. Lambert. The
Nominating Committee met one time in 2001. The Company's nomination procedures
are governed by its By-Laws. Each year the Nominating Committee makes a
recommendation to the entire Board of Directors of nominees for election as
Directors. The Nominating Committee will review suggestions from shareholders
regarding nominees for election as Directors. All such suggestions from
shareholders must be submitted in writing to the Nominating Committee at the
Company's principal executive office not less than 120 days in advance of the
date of the annual or special meeting of shareholders at which Directors shall
be elected. All written suggestions of shareholders must set forth (i) the name
and address of the shareholder making the suggestion, (ii) the number and class
of shares owned by such shareholder, (iii) the name, address and age of the
suggested nominee for election as Director, (iv) the nominee's principal
occupation
13
during the five years preceding the date of suggestion, (v) all other
information concerning the nominee as would be required to be included in the
proxy statement used to solicit proxies for the election of the suggested
nominee, and (vi) such other information as the Nominating Committee may
reasonably request. A consent of the suggested nominee to serve as a Director of
the Company, if elected, must also be included with the written suggestion.
The function of the Personnel Committee is to review and approve changes in
the Company's employee benefit programs, plans and policies relating to
personnel issues. The members of the Personnel Committee are Marjorie Z.
Soyugenc (Chairman), David L. Barning, Richard J. Bond, Alan W. Braun, Ronald B.
Lankford, James A. Risinger and Charles D. Storms. The Personnel Committee met
three times during 2001.
MEETINGS OF THE BOARD OF DIRECTORS
AND DIRECTOR FEES
The Board of Directors of the Company held 10 meetings during the fiscal
year ended December 31, 2001. All incumbent Directors attended 75% or more of
the aggregate of the 2001 meetings of the Board and of the Board Committees to
which they were appointed.
All Directors of the Company received an annual retainer of $8,000 for
serving as Directors. Directors not otherwise employed by the Company also
received $1,000 for each Board of Directors meeting attended and $500 for each
Committee meeting attended. Directors serving as a Committee Chairman received
an additional annual retainer of $1,500.
INDEPENDENT ACCOUNTANT FEES
AUDIT FEES
The aggregate fees of PricewaterhouseCoopers LLP for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2001, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year, were $353,560, of which an aggregate amount of $269,235 had been
billed through December 31, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers LLP did not render professional services relating to
financial information systems design and implementation for the fiscal year
ended December 31, 2001.
ALL OTHER FEES
The aggregate fees billed by PricewaterhouseCoopers LLP for services
rendered to the Company, other than the services described above under "Audit
Fees" for the fiscal year ended December 31, 2001, were $566,318. The vast
majority of these fees relate to regulatory compliance ($342,560), tax
activities ($82,563) and other audit related services ($141,195) in support of
the Company.
14
REPORT OF THE AUDIT COMMITTEE
This disclosure statement is being provided to inform shareholders of the
Audit Committee oversight with respect to the Company's financial reporting.
INDEPENDENCE OF AUDIT COMMITTEE MEMBERS
The Audit Committee is comprised of four members of the Board of Directors
of the Company. All of the members of the Audit Committee are independent (as
independence is defined in the New York Stock Exchange's listing requirements)
from management and the Company.
REVIEW WITH MANAGEMENT AND INDEPENDENT ACCOUNTANTS
The Audit Committee has reviewed and discussed the audited financial
statements for the year ended December 31, 2001, and the footnotes thereto with
management and the independent accountants (PricewaterhouseCoopers LLP). In
addition, the Audit Committee discussed with PricewaterhouseCoopers LLP the
matters required to be discussed by the Statement of Auditing Standards No. 61.
The Audit Committee discussed with PricewaterhouseCoopers LLP the
independence of such accountants from management and the Company, and received
the written disclosures and the letter from PricewaterhouseCoopers LLP required
by the Independence Standards Board Standard No. 1. The Audit Committee has also
considered whether PricewaterhouseCoopers LLP's provision of non-audit services
is compatible with maintaining their independence.
The Audit Committee members do not have vested interests in the Company
either through financial, family or other material ties to management which
would hamper or influence their ability to evaluate objectively the propriety of
management's accounting, internal control and reporting practices.
CONCLUSION
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the year ended
December 31, 2001 to be filed with the Securities and Exchange Commission.
Submitted by,
David L. Barning
Alan W. Braun
Larry E. Dunigan
Phelps L. Lambert
15
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is currently composed
of four non-employee Directors who are not eligible to participate in any
management compensation programs. The Committee is responsible for establishing
all compensation for the Company's Executive Officers and for setting and
administering the terms, policies and agreements related to other compensation
components for the Company's Executive Officers. An independent compensation
consulting firm, Hay Group, Inc., has been retained by the Company since 1982 to
advise the Compensation Committee on all compensation matters.
COMPENSATION PRINCIPLES
The Company's executive compensation program is structured to help the
Company achieve its business objectives by:
- setting levels of compensation designed to attract and retain superior
executives in a highly competitive environment;
- providing incentive compensation that ties directly with both Company
financial performance and individual contribution to that performance; and
- linking compensation to elements that affect short- and long-term stock
performance.
The Committee believes the most effective executive compensation program is
one that provides incentives to achieve both current and long-term strategic
management goals of the Company, with the ultimate objective of enhancing
shareholder value. In this regard, the Committee believes executive compensation
should be comprised of cash and equity-based programs which reward performance
not only as measured against the Company's specific annual and long-term goals,
but also which recognize that the Company operates in a competitive environment
and that performance should be evaluated as compared to industry peers. In April
1999, the Company's shareholders adopted an Equity Incentive Plan, which
authorizes the Compensation Committee to grant incentive and non-qualified stock
options in addition to other forms of equity compensation. The Committee issued
1,400,000 stock option grants to employees of the Company in 2001. The
equity-based compensation plans ensure that employees have a meaningful stake in
the Company, the ultimate value of which is dependent on the Company's continued
long-term success, and that the interests of employees are thereby aligned with
those of the shareholders.
SALARIES
The Compensation Committee establishes the salary of the Chairman, President
and Chief Executive Officer (hereinafter the "Chairman"). The base salaries of
the Company's next four highest paid Executive Officers are determined by the
Compensation Committee with recommendations from the Chairman. The same
compensation principles are applied in setting the salaries of all employees,
including the Chairman, to ensure that salaries are fairly and competitively
established. Salary ranges are determined for each executive position based upon
survey data that is obtained from a relevant peer group and from the Hay Group,
Inc. The Company uses the Hay Job Evaluation System to establish salary grades
and ranges for each position based on the knowledge and problem-solving ability
required to satisfactorily fulfill the position's assigned duties and
responsibilities, its accountability and the impact on the operations and
profitability of the Company. The Company's peer group consists of reasonably
16
comparable regional bank holding companies. Relevant peer group data is used
rather than the NYSE Financial Index because the peer group companies resemble
more closely the asset size and operations of the Company. The peer group data
is also used to validate and affirm recommendations presented by the Hay Group,
Inc.
From survey data, salary ranges are established each year for the Chairman
and all other executive positions within the organization. These ranges are
designed so that the mid-point of the salary range is approximately the 50th
percentile of base salaries paid to comparable positions across a broad spectrum
of comparable financial services companies. Within these established ranges,
actual base salary adjustments are made periodically in accordance with the
guidelines of the Company's salary administration program and performance review
system. In 2001, the base salaries for the Executive Officers as a group and the
Chairman were within the established salary ranges. Continuous outstanding
performance over an extended period of time could result in a salary at the top
end of the established range whereas undistinguished performance could result in
compensation at the lower end of the range.
SHORT TERM INCENTIVE PLAN
The Company implemented a Short Term Incentive Plan (the "STIP") for certain
key officers in 1996. The STIP provides for the payment of additional
compensation in the form of an annual cash incentive payment contingent upon the
achievement of certain corporate goals and the achievement of certain business
performance goals. The STIP uses various scorecards based on specific corporate
and shareholder-related performance goals relating to earnings per share and
operating income. Participants were assigned to one of the incentive scorecards
based upon their area of responsibility and expected level of contribution to
the Company's achievement of its corporate goals. The incentive award levels,
based upon the Company's and an individual participant's performances, range
from 7.5% to 82.5% of a participant's base salary. The STIP incentive award
opportunity for the Chairman ranges from 27.5% to 82.5% of base salary.
Each fiscal year the Compensation Committee establishes threshold (minimum),
target and maximum performance levels under the STIP. If threshold performance
is not achieved, there is no payment from the STIP for that period, and if
performance exceeds the threshold, actual incentive payments to participants are
in proportion to the actual financial performance achieved compared to the
performance goals. For 2001, the Company exceeded the earnings per share target
resulting in a payout to participating officers above the "target" level under
the STIP. (See Summary Compensation Table on page 19.)
1999 EQUITY INCENTIVE PLAN
The Company maintains the 1999 Equity Incentive Plan (the "Plan"). The Board
and the Compensation Committee believe that this flexible long-term, stock-based
incentive plan enhances the Company's ability to attract, retain and reward
management with exceptional talent and provides the Company with the ability to
develop incentive programs which are responsive to the demands of the
marketplace. The Compensation Committee also believes that the stock option
grants afford a desirable long-term compensation method because they closely
align the interests of management with those of shareholders. Three hundred
sixty officers, including those listed in the Summary Compensation Table,
participate in the Plan. During 2001, the Compensation Committee granted stock
options to eligible Plan participants. In determining the grants of stock
options to the Chief Executive Officer, as well as other named executive
officers in the Summary Compensation Table, the Compensation Committee took into
account the respective scope of responsibility, performance requirements and
recent and expected contributions of the Plan participants to the Company's
achievement of its long-term performance objectives.
17
DISCUSSION OF 2001 COMPENSATION FOR THE CHAIRMAN
Annually, the Compensation Committee receives an analysis from the Company's
Senior Vice President, Director of Human Resources, on all aspects of the
Chairman's remuneration, including base salary, incentive opportunity and the
relationship of total compensation to the comparative survey data. When
appropriate, the Compensation Committee may direct the Senior Vice President,
Director of Human Resources, to compile additional compensation information and
comparisons. The Committee considers several factors in establishing the
Chairman's compensation package. These include the Company's overall performance
as measured by total shareholder return, adherence to the Company's strategic
plan and the development of sound management practices. The Committee in
evaluating an increase in the Chairman's base salary in 2001 considered these
factors.
SUMMARY
The Committee has determined that the Company's executive total compensation
programs, plans and awards for 2001 are well within conventional standards of
reasonableness and competitive necessity and are clearly within industry norms
and practices.
In establishing executive compensation programs in the future, the
Compensation Committee will continue to focus on specific corporate goals
designed to promote the overall financial success of the Company, such as
earnings per share, operating income, credit quality and expense control, which
are expected to improve the return on shareholders' equity.
Submitted by:
Charles D. Storms, Chairman
Larry E. Dunigan
Andrew E. Goebel
Lucien H. Meis
18
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table shows the annual compensation paid
by the Company to its Chief Executive Officer for 2001 and each of the four most
highly compensated executive officers, other than the Chief Executive Officer,
who were serving as executive officers as of December 31, 2001 (the "Named
Executive Officers"). The compensation of each of the Named Executive Officers
is reported for each of the last three years.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
{ANNUAL COMPENSATION AWARD(S)
---------------------------------- -----------------------
(D)
NUMBER OF
(C) SECURITIES
RESTRICTED UNDERLYING (E)
(A) (B) OTHER ANNUAL STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD GRANTED COMPENSATION
--------------------------- ---- ------ ----- ------------ ---------- ---------- ------------
James A. Risinger.................. 2001 $570,003 $319,772 $ 8,737 $ 0 213,509 $52,020
President, Chief Executive Officer 2000 505,627 0 43,710 130,475 0 72,847
and Chairman of the Board 1999 430,006 289,448 5,154 144,018 0 38,700
Thomas F. Clayton.................. 2001 $310,627 $126,736 $ 6,186 $ 0 88,086 $27,956
Executive Vice President 2000 275,621 0 10,873 37,054 0 34,524
1999 224,005 107,979 3,242 50,760 0 19,620
Michael R. Hinton.................. 2001 $310,627 $126,736 $ 3,800 $ 0 88,086 $27,956
Executive Vice President 2000 275,621 0 6,976 51,526 0 25,575
1999 204,151 99,879 4,904 64,530 0 18,405
Daryl R. Moore..................... 2001 $250,037 $102,015 $ 4,980 $ 0 88,086 $22,503
Executive Vice President 2000 210,018 0 7,558 37,054 0 28,570
1999 192,029 94,122 4,652 48,897 0 17,102
John S. Poelker.................... 2001 $305,011 $124,445 $ 3,447 $ 0 89,189 $21,351
Executive Vice President and Chief 2000 270,005 0 13,848 41,535 0 26,979
Financial Officer 1999 233,022 115,407 1,658 41,472 0 16,310
---------------
(a) Salary includes base compensation and income recognized in the form of
Director fees paid by the Company or its affiliates during the indicated
calendar years.
(b) These amounts represent bonuses payable pursuant to the Company's Short Term
Incentive Plan (STIP).
(c) Restricted shares awarded each year are based on the achievement of earnings
per share goals and vest over a four year period. The shares itemized in
this column reflect the value of earned shares that have vested in prior
years that are no longer subject to forfeiture under the plan. There were no
restricted stock awards in 2001 as the Company discontinued the plan.
(d) The options listed have been adjusted to reflect stock dividends.
(e) All Other Compensation includes the following for Messrs. Risinger, Clayton,
Hinton, Moore and Poelker for 2001: (i) Company contribution to the
Company's Employee Stock Ownership Plan of $15,300, $15,300, $15,300,
$15,300 and $11,900, for each Named Executive Officer, respectively; and
(ii) Company contribution to the Supplemental Deferred Compensation Plan of
$36,720, $12,656, $12,656, $7,203, and $9,451, for each Named Executive
Officer respectively.
19
STOCK OPTION GRANTS
The following table contains information concerning the stock option grants
made to each of the Named Executive Officers in the fiscal year ended December
31, 2001.
{INDIVIDUAL GRANT GRANT DATE VALUE(3)
----------------------------------------------- ------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE EXPIRATION
NAME GRANTED IN 2001(1) PRICE(2) DATE GRANT DATE PRESENT VALUE
---- ---------- ---------- -------- ---------- ------------------------
James A. Risinger................... 213,509 15.3% $25.13 6/17/11 $1,449,726
Thomas F. Clayton................... 88,086 6.3% $25.13 6/17/11 $ 598,104
Michael R. Hinton................... 88,086 6.3% $25.13 6/17/11 $ 598,104
Daryl D. Moore...................... 88,086 6.3% $25.13 6/17/11 $ 598,104
John S. Poelker..................... 89,189 6.4% $25.13 6/17/11 $ 605,593
---------------
(1) Based on an aggregate of 1,400,000 options granted in fiscal year 2001.
(2) The exercise price per share of options granted represented the fair market
value of the underlying shares of common stock on the option grant date,
which was equal to the closing price, as reported by the Nasdaq National
Market System on the option grant date. The options vest over a four year
period and the exercise price may be paid in cash, in shares of the
Company's common stock valued at fair market value on the exercise date or
through a cashless broker-assisted exercise procedure involving a same-day
sale of the purchased shares. The Company may also finance the option
exercise by loaning the optionee sufficient funds to pay the exercise price
for the purchased shares.
(3) Black-Scholes methodology utilized.
STOCK OPTION EXERCISES AND FINAL YEAR-END VALUES
The following table sets forth information concerning the fiscal year-end
number and value of unexercised options; and the number of options exercised
during fiscal year 2001 with respect to each of the Named Executive Officers.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
James A. Risinger............ -- -- 46,034 167,475 -- --
Thomas F. Clayton............ -- -- 13,746 74,340 -- --
Michael R. Hinton............ -- -- 13,746 74,340 -- --
Daryl D. Moore............... -- -- 13,746 74,340 -- --
John S. Poelker.............. -- -- 14,849 74,340 -- --
---------------
(1) Based on the fair market value of the Company's common stock at fiscal year
end ($24.048 per share), and such value is equal to the closing price, as
reported by the Nasdaq National Market System at that date, less the
exercise price payable for such shares.
RETIREMENT PLAN
The Old National Bancorp Employees' Retirement Plan (the "Retirement Plan")
is a qualified, defined benefit, non-contributory pension plan covering
substantially all employees of the Company and its subsidiaries and affiliates
with one or more years of service with the Company or its subsidiaries and
affiliates, and with credited service accruing from the date of employment,
provided that the employee has not less than 1,000 hours of service (as defined
in the Retirement Plan) during such period.
20
The amount of annual contribution attributable to specific individuals
cannot be determined in a meaningful manner. The following table shows the
estimated annual pensions payable to eligible employees upon retirement at age
65. The amounts shown do not reflect any reduction related to Social Security
earnings or for the survivor benefit features of the Retirement Plan, the
application of which would reduce the amount of pension payable.
PENSION PLAN TABLE(1)
YEARS OF SERVICE
FINAL AVERAGE ------------------------------------------------------------------------
SALARY 5 10 15 20 25 30 35 & UP
------------- ------- ------- -------- -------- -------- -------- --------
$100,000............. $ 7,250 $14,500 $ 22,750 $ 31,000 $ 40,750 $ 50,500 $ 60,250
150,000............. 10,875 21,750 34,125 46,500 61,125 75,750 90,375
200,000............. 14,500 29,000 45,500 62,000 81,500 101,000 120,500
250,000............. 18,125 36,250 56,875 77,500 101,875 126,250 150,625
300,000............. 21,750 43,500 68,250 93,000 122,250 151,500 180,750
350,000............. 25,375 50,750 79,625 108,500 142,625 176,750 210,875
400,000............. 29,000 58,000 91,000 124,000 163,000 202,000 241,000
450,000............. 32,625 65,250 102,375 139,500 183,375 227,250 271,125
500,000............. 36,250 72,500 113,750 155,000 203,750 252,500 301,250
550,000............. 39,875 79,750 125,125 170,500 224,125 277,750 331,375
600,000............. 43,500 87,000 136,500 186,000 244,500 303,000 361,500
---------------
(1) The law in effect at December 31, 2001 prohibited the distribution of
benefits from the Retirement Plan in excess of $135,000 per year expressed
as a straight life annuity. It also prohibited compensation in excess of
$170,000 to be used in the computation of the retirement benefit. Both
amounts are indexed for inflation.
The Retirement Plan provides for the payment of monthly benefits in a fixed
amount upon attainment of age 65. As a normal form of benefit, each eligible
participant is entitled to receive a monthly pension for his or her life based
on years of service and "average monthly compensation" (which excludes bonuses).
In general, the formula for determining the amount of a participant's monthly
pension is average monthly compensation multiplied by 1.45% for the first ten
years of service, 1.65% for the next ten years of service, and 1.95% for the
next fifteen years of service, less any amount related to Social Security
earnings. In general, the amount of the reduction is .59% of average monthly
compensation (up to a maximum of 125% of covered compensation) multiplied by all
years of service up to 35 years of service. The standard retirement benefit for
married participants is payable in the form of a joint and survivor annuity in
an amount which is actuarially equivalent to the normal form of benefit. Instead
of an annuity, participants may elect to receive a single sum cash settlement
upon retirement in an amount that is actuarially equivalent to the participant's
normal form of benefit.
2001 base salary figures for the Chairman and the next four most highly
compensated Executive Officers of the Company are set forth in the Summary
Compensation Table on page 19. The Retirement Plan was frozen as of December 31,
2001, except to employees who were at least age 50 or who had 20 years of
vesting service as of December 31, 2001. Mr. Risinger had 24 years of credited
service; Mr. Hinton 22 years; Mr. Clayton 14 years; and Mr. Moore 23 years. Mr.
Poelker is not accruing benefits under this Plan but does continue to accrue
service for eligibility of an immediate early retirement benefit.
For certain employees, in addition to the persons listed in the Summary
Compensation Table, whose annual retirement income benefit under the Retirement
Plan exceeds the limitations imposed by the Internal Revenue Code of 1986, as
amended, and the regulations thereunder (including, among others, the limitation
that annual benefits paid under qualified
21
defined benefit pension plans may not exceed $135,000) such excess benefits will
be paid from the Company's non-qualified, unfunded, non-contributory
supplemental retirement plan.
AGREEMENTS WITH CERTAIN OFFICERS
The Company has entered into change of control severance agreements with
Messrs. James A. Risinger, Thomas F. Clayton, Michael R. Hinton, Daryl D. Moore
and John S. Poelker. Each executive is entitled to benefits under his severance
agreement upon any termination of the executive's employment by the Company
(except for, and as is more specifically described in each severance agreement,
termination for cause, disability, voluntary retirement or death), or upon a
termination of employment by the executive under certain circumstances specified
in his severance agreement, during the one-year period following a change in
control (as defined in the severance agreements) of the Company which occurs
during the term of the severance agreement.
In the event of a termination of employment, the executive will be entitled
to receive a lump sum cash payment equal to the aggregate of: his then-effective
base salary through the date of termination; all amounts due to the executive
under the Company's accrued vacation program through the date of termination;
and a certain amount under the Retirement Plan, as specified in his severance
agreement. In addition, the Company must pay to the executive in a lump sum cash
payment an amount equal to two times the average annual base salary paid to him
by the Company in the three years preceding the date of termination. The
severance agreements further require the Company to cause to be vested in each
executive's name those awarded but unvested shares held in the executive's
account in the Restricted Stock Plan, all amounts due the executive under the
Company's Short Term Incentive Plan and to maintain in force for two years
following the date of termination all employee welfare plans and programs in
which the executive was entitled to participate immediately prior to such
termination.
The change of control severance agreements provide for one year extensions
by mutual agreement of the Company and the respective executives. With respect
to Messrs. Risinger, Clayton, Hinton, Moore and Poelker, each of their severance
agreements was extended by the Board of Directors in 2001 through December 31,
2002.
22
SHAREHOLDER RETURN PERFORMANCE COMPARISONS
The Company's common stock began trading on the New York Stock Exchange on
February 15, 2002. Because 2002 will be the first year during which the
Company's common stock will have traded on the New York Stock Exchange, for
comparative purposes, both the NYSE Financial Index and the Nasdaq Bank Index
are reflected in the stock performance graph.
The comparison of shareholder returns (change in December year end stock
price plus reinvested dividends) for each of the periods assumes that $100 was
invested on December 31, 1996, in common stock of each of the Company, the
Russell 1000 Index, the NASDAQ Bank Index, and the NYSE Financial Index with
investment weighted on the basis of market capitalization.
{TOTAL RETURN ANALYSIS
[PERFORMANCE GRAPH]
12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001
---------- ---------- ---------- ---------- ---------- ----------
Old National Bancorp $100.00 $131.73 $162.42 $151.94 $150.00 $136.51
Russell 1000 $100.00 $132.48 $167.92 $203.07 $185.12 $177.78
NASDAQ BANK $100.00 $166.60 $149.51 $140.84 $161.51 $159.96
NYSE FINANCIAL $100.00 $141.23 $148.48 $147.11 $184.23 $169.06
---------------
Source: Carl Thompson Associates www.ctaonline.com (800) 959-9677. Data from
BRIDGE Information Systems, Inc.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Executive Officers and Directors of the Company are at present, as in
the past, customers of one or more of the Company's affiliates and have had and
expect in the future to have similar transactions with the affiliates in the
ordinary course of business. In addition, some of the Executive Officers and
Directors of the Company are at present, as in the past, officers, directors or
principal shareholders of corporations which are customers of these affiliates
and which have had and expect to have transactions with the affiliates in the
ordinary course of business. All such transactions were made in the ordinary
course of business, on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other persons and did not involve more than the normal risk of collectibility or
present other unfavorable features.
23
During 2001, the Company paid approximately $734,107 for engineering, design
and construction services to Industrial Contractors, Inc. in connection with its
role as general contractor for renovations to the Old National Bank Tower,
renovations to the Operations Center in Evansville and for work at other Old
National Bank branch locations. Alan W. Braun, President of Industrial
Contractors Inc., is currently a Director of the Company and a nominee for
Director.
24
ITEM 4. RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors proposes the ratification by the shareholders at the
Annual Meeting of the appointment of PricewaterhouseCoopers LLP, as independent
accountants for the Company and its affiliates for the fiscal year ending
December 31, 2002. Although ratification by the shareholders of the Company's
independent accountants is not required, the Company deems it desirable to
continue its established practice of submitting such selection to the
shareholders. In the event the appointment of PricewaterhouseCoopers LLP is not
ratified by the shareholders, the Board of Directors will consider appointment
of other independent accountants for the fiscal year ending December 31, 2002. A
representative of PricewaterhouseCoopers LLP will be present at the Annual
Meeting and will have the opportunity to make a statement or respond to any
appropriate questions that shareholders may have.
SHAREHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING
Proposals submitted by shareholders under Rule 14a-8 of the Securities and
Exchange Commission to be presented at the 2003 Annual Meeting of Shareholders
must be received by the Company at its principal executive office no later than
November 9, 2002, to be considered for inclusion in the proxy statement and form
of proxy relating to that meeting. Any such proposals should be sent to the
attention of the Corporate Secretary of the Company, P.O. Box 718, Evansville,
Indiana 47705-0718. If notice of any other shareholder proposal intended to be
presented at the 2003 Annual Meeting of Shareholders is not received by the
Company on or before January 23, 2003, the proxy solicited by the Board of
Directors of the Company for use in connection with that meeting may confer
authority on the proxies to vote in their discretion on such proposal, without
any discussion in the Company's proxy statement for that meeting of either the
proposal or how such proxies intend to exercise their voting discretion.
VOTE REQUIRED
The nominees for election as Directors of the Company named in this proxy
statement will be elected by a plurality of the votes cast. Action on the other
items or matters to be presented at the Annual Meeting will be approved if the
votes cast in favor of the action exceed the votes cast opposing the action.
Abstentions or broker non-votes will not be voted for or against any items or
other matters presented at the meeting. Abstentions will be counted for purposes
of determining the presence of a quorum at the Annual Meeting, but broker
non-votes will not be counted for quorum purposes if the broker has failed to
vote as to all matters.
25
ANNUAL REPORT
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
SHAREHOLDER WHO DOES NOT OTHERWISE RECEIVE A COPY OF THE COMPANY'S ANNUAL REPORT
TO SHAREHOLDERS A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WHICH IS
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR
ENDED DECEMBER 31, 2001. ADDRESS ALL REQUESTS TO:
RONALD W. SEIB
SENIOR VICE PRESIDENT AND CONTROLLER
OLD NATIONAL BANCORP
P. O. BOX 718
EVANSVILLE, INDIANA 47705-0718
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers and persons who beneficially own more than ten
percent of the Company common stock to file with the Securities and Exchange
Commission reports showing ownership of and changes of ownership in the
Company's common stock and other equity securities. On the basis of reports and
representations submitted by the Company's Directors, Executive Officers, and
greater-than-ten-percent owners, the Company believes that all required Section
16(a) filings for fiscal year 2001 were timely made.
OTHER MATTERS
The Board of Directors of the Company does not know of any matters for
action by shareholders at the 2002 Annual Meeting other than the matters
described in the accompanying Notice of Annual Meeting of Shareholders. However,
the enclosed proxy will confer upon the named proxies discretionary authority
with respect to matters which are not known to the Board of Directors at the
time of the printing hereof and which may properly come before the Annual
Meeting. It is the intention of the persons named as proxies to vote pursuant to
the proxy with respect to such matters in accordance with their best judgment.
The cost of soliciting proxies in the accompanying form will be borne by the
Company. In addition to solicitations by mail, Directors and Officers of the
Company and its subsidiaries may solicit proxies personally, by telephone, by
fax or in person, but such persons will not be specially compensated for their
services. Specially engaged employees of the Company or other paid solicitors
will make no solicitations.
It is important that proxies be returned promptly. WHETHER OR NOT YOU EXPECT
TO ATTEND THE ANNUAL MEETING IN PERSON, SHAREHOLDERS ARE REQUESTED TO COMPLETE,
SIGN AND RETURN THEIR PROXIES IN ORDER THAT A QUORUM FOR THE ANNUAL MEETING MAY
BE ASSURED. You may also vote your proxy by Internet. If you do not vote your
proxy by Internet, then it may be mailed in the enclosed envelope, to which no
postage need be affixed.
26
OLD NATIONAL BANCORP
420 MAIN STREET
EVANSVILLE, INDIANA 47708 THERE ARE TWO WAYS TO VOTE YOUR PROXY.
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VOTE BY INTERNET HTTP://WWW.OLDNATIONAL.COM
Go to the web site address listed above to vote your Proxy 24 hours a day, 7
days a week.
You will be prompted to enter the proxy number and the account number, which are
located in the upper right-hand corner on the reverse side of this card. Then
follow the simple online instructions.
Note: If voting by Internet, your Internet vote authorizes the named proxies to
vote your shares in the same manner as if you had marked, signed and returned
your proxy card. The Internet voting facilities will close at 12:00 p.m.
(Central Time Zone) on April 17, 2002.
VOTE BY MAIL
Mark your proxy card. On the reverse side, please sign and date your proxy card,
and return it in the postage-paid envelope provided. If you vote by Internet, do
not return your proxy card in the mail.
DETACH PROXY CARD HERE
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OLD NATIONAL BANCORP
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING ON APRIL 18, 2002, AND ANY ADJOURNMENTS
OR POSTPONEMENTS THEREOF.
The undersigned hereby appoints Stephan E. Weitzel and John A. Witting, and each of them, singly, as proxies of the
undersigned, each with power to appoint his substitute, and hereby authorizes them to represent and to vote, as
designated below, all the shares of common stock of Old National Bancorp held of record by the undersigned on February
11, 2002, and which the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held on April 18,
2002, and all adjournments or postponements thereof, on the following matters proposed by the Board of Directors of Old
National Bancorp.
1. Approval of the Amendments to Article VII of Old National Bancorp's Articles of Incorporation to provide for a
Board of Directors with staggered terms.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Approval of the Amendments to Article II of Old National Bancorp's Articles of Incorporation to update the purpose
and general powers of Old National Bancorp.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. The election of fifteen Directors in the classes indicated below to serve until the election and qualification of
their respective successors.
Mark only one box below. Class I Class II Class III
------- -------- ---------
01 - David L. Barning 06 - Richard J. Bond 11 - Alan W. Braun
02 - Larry E. Dunigan 07 - David E. Eckerle 12 - Andrew E. Goebel
03 - Phelps L. Lambert 08 - Ronald B. Lankford 13 - Lucien H. Meis
04 - Louis L. Mervis 09 - James A. Risinger 14 - John N. Royse
05 - Marjorie Z. Soyugenc 10 - Kelly N. Stanley 15 - Charles D. Storms
9 FOR ALL NOMINEES LISTED HEREIN (except as indicated below) 9 WITHHOLD AUTHORITY FOR ALL NOMINEES
Instruction: To withhold authority to vote for any individual nominee(s), print the number(s) of the
nominee(s) on the line provided.________________________
OLD NATIONAL BANCORP PROXY NUMBER
420 MAIN STREET
EVANSVILLE, INDIANA 47708 ACCOUNT NUMBER
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SIGN AND DATE THIS CARD.
DETACH PROXY CARD HERE
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4. Ratification of the appointment of PricewaterhouseCoopers LLP, as
independent accountants of the Company and its affiliates for the fiscal
year ending December 31, 2002.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Such other business as may properly come before the Annual Meeting or any
adjournments and postponements thereof.
This proxy, when properly executed, will be
voted in the manner directed by the undersigned
shareholder(s). IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, AND
4. ALL FORMER PROXIES ARE HEREBY REVOKED.
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Signature Date
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Signature Date
Joint owners should each sign personally.
Trustees, corporate officers and others signing
in a representative capacity should indicate
the capacity in which they sign.