1
GERMAN AMERICAN BANCORP
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
The Annual Meeting of Shareholders of German
American Bancorp (the "Corporation") will be held at the
principal office of The German American Bank, 711 Main
Street, Jasper, Indiana, on Thursday, April 25, 1996, at
10:00 a.m., Jasper time, for the following purposes:
1. To elect five Directors to hold office until
the 1998 Annual Meeting of Shareholders and
until their successors are elected and have
qualified.
2. To transact such other business as may
properly come before the meeting.
Holders of record of Common Shares of German
American Bancorp at the close of business on March 1,
1996, are entitled to notice of and to vote at the Annual
Meeting.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN
PERSON. ALL SHAREHOLDERS, EVEN IF THEY PLAN TO ATTEND
THE MEETING, ARE REQUESTED TO COMPLETE, SIGN AND DATE THE
ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
BY ORDER OF THE BOARD
OF DIRECTORS
URBAN R. GIESLER
SECRETARY
MARCH 25, 1996
JASPER, INDIANA
(ANNUAL REPORT ENCLOSED)
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
GERMAN AMERICAN BANCORP
APRIL 25, 1996
This Proxy Statement is being furnished to
shareholders on or about March 25, 1996, in connection
with the solicitation by the Board of Directors of German
American Bancorp (the "Corporation"), 711 Main Street,
Jasper, Indiana 47546, of proxies to be voted at the
Annual Meeting of Shareholders to be held at 10:00 a.m.,
Jasper time, on Thursday, April 25, 1996, at the
foregoing address. The Corporation is the parent holding
company for The German American Bank, Jasper, Indiana
("German American"); The Union Bank, Loogootee, Indiana
("Union"); Community Trust Bank, Otwell, Indiana
("Community"); and First State Bank, Southwestern
Indiana, Tell City, Indiana ("First State Bank"). At
times herein, German American, Union, Community, and
First State Bank are referred to collectively as the
"Banks."
At the close of business on March 1, 1996, the
record date for the Annual Meeting, there were 1,825,040
Common Shares outstanding and entitled to vote at the
Annual Meeting. 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
insofar as it has not been exercised. The proxy may be
revoked by either (a) filing with the Secretary (or other
officer or agent of the Corporation authorized to
tabulate votes) (i) a written instrument revoking the
proxy or (ii) a subsequently dated proxy, or (b)
attending the Annual Meeting and voting in person.
Unless revoked, the proxy will be voted at the Annual
Meeting in accordance with the instructions of the
shareholder as indicated on the proxy. If no
instructions are given, the shares will be voted as
recommended by the Directors.
ELECTION OF DIRECTORS
NOMINEES
Five Directors are to be elected at the Annual
Meeting. The Board of Directors, which currently
consists of ten members, is divided into two classes of
3
equal size with the terms of one class expiring each
year. Generally, each Director serves until the annual
meeting of the shareholders held in the year that is two
years after such Director's election and thereafter until
such Director's successor is elected and has qualified.
The terms of the current Directors expire as follows:
1996 -- Directors Mehne, Ruckriegel, Schroeder, Seger,
and Steurer; 1997 -- Directors Astrike, Buehler, Hoffman,
Lett and Place. Each Director will be elected by a
plurality of the votes cast in the election. Shares
present but not voted for any nominees do not affect the
determination of whether a nominee has received a
plurality of the votes cast.
It is the intention of the persons named in the
accompanying form of proxy to vote such proxy for the
election to the Board of Directors of Gene C. Mehne,
Robert L. Ruckriegel, Mark A. Schroeder, Larry J. Seger
and Joseph F. Steurer, each of whom is now a Director
whose present term expires this year. Each such person
has indicated that he will accept nomination and election
as a Director. If, however, any such person is unable or
unwilling to accept nomination or election, it is the
intention of the Board of Directors to nominate such
other person as Director as it may in its discretion
determine, in which event the shares subject to the proxy
will be voted for that person.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE FIVE NOMINEES IDENTIFIED ABOVE. (ITEM 1 ON THE
PROXY)
The following table presents certain information as
of January 1, 1996 regarding the current Directors of the
Corporation, including the five nominees proposed by the
Board of Directors for election at this year's Annual
Meeting. Unless otherwise indicated in a footnote, the
principal occupation of each Director has been the same
for the last five years and such Director possesses sole
voting and investment powers with respect to the shares
indicated as beneficially owned by such Director. Unless
specified otherwise, a Director is deemed to share voting
and investment powers over shares indicated as held by a
spouse, children or other family members residing with
the Director.
Shares Benefi-
cially Owned
Name, (Percentage
Present Principal Director of Outstanding
Occupation and Age Since 1 Common Shares)
4
GEORGE W. ASTRIKE 1982 9,180 3
Chairman of the Board and Chief (0.5%)
Executive Officer of the Corporation 2
60
DAVID G. BUEHLER 1984 134,798 4
President of Buehler Foods, Inc. (7.4%)
56
WILLIAM R. HOFFMAN 1986 39,441 5
Farmer; Vice-President and Director of (2.2%)
Patoka Valley Feeds, Inc.
58
MICHAEL B. LETT 1993 97,493 7
Attorney, Lett & Jones 6 (5.3%)
51
GENE C. MEHNE* 1979 21,759 8
Vice President and Manager of (1.2%)
Mehne Farms, Inc.
51
A. WAYNE ("SKIP") PLACE, JR. 1990 14,511 9
President and Chief Executive Officer (0.8%)
of Jasper Rubber Products, Inc.
48
ROBERT L. RUCKRIEGEL* 1983 98,52610
President of B. R. Associates, Inc. (5.4%)
(restaurants)
60
MARK A. SCHROEDER* 1991 5,28212
President and Chief Operating (0.3%)
Officer of the Corporation 11
42
LARRY J. SEGER* 1990 21,28613
Vice President of Wabash Valley (1.2%)
Produce, Inc. (egg and turkey production)
45
JOSEPH F. STEURER* 1983 12,59914
Chairman and Chief Executive Officer (0.7%)
of JOFCO, Inc. (office furniture)
59
*Nominee
1 Includes service on the Board of German American
prior to the organization of the Corporation.
2 Mr. Astrike also serves as Chairman of the Board of
German American, a Director of each of the Banks,
and an officer and/or a Director of all nonbank
affiliates of the Corporation.
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3 Includes 5,861 shares that Mr. Astrike has options
to purchase.
4 Includes 131,891 shares owned by Buehler Foods,
Inc., of which Mr. Buehler is President and
majority shareholder and with respect to which Mr.
Buehler shares voting and investment powers, and
2,906 shares held jointly by Mr. Buehler and his
wife. Mr. Buehler, his wife, Buehler Foods, Inc.,
and Joseph E. Buehler, Mr. Buehler's brother, who
owns 117 shares directly, beneficially own as a
group 134,915 shares.
5 Includes 3,385 shares owned jointly by Mr. Hoffman
and his wife, and 8,509 shares owned by Mr.
Hoffman's wife.
6 Mr. Lett has served on the Board of Union since
1982. Mr. Lett's brother, J. David Lett, also
serves as a Director of Union.
7 Includes 229 shares held by Mr. Lett's wife, who
also holds 163 shares as custodian for their son;
93,454 shares held by Mr. Lett's mother; and 1,858
shares held by Mr. Lett's brother, with all of whom
Mr. Lett may be deemed to act as a group.
8 Includes 20,413 shares held by Mr. Mehne's mother;
158 shares owned by Mr. Mehne's wife; and 353
shares held by German American as trustee for the
Mehne Farms, Inc. Qualified Plan.
9 Includes 3,341 shares owned jointly by Mr. Place
and his wife; 30 shares which Mr. Place holds as
custodian for his son and two daughters; 2,100
shares owned by Jasper Rubber Products, Inc., of
which Mr. Place is President and Chief Executive
Officer; and 207 shares held by Mr. Place as a Co-
Trustee of the A. Wayne Place Testamentary Trust.
10 Includes 787 shares owned jointly by Mr. Ruckriegel
and his wife, and 30,266 shares owned by
Mr. Ruckriegel's wife.
11 Mr. Schroeder was named President and Chief
Operating Officer of the Corporation effective
July 1, 1995, after having served as President of
German American since January 1991. Mr. Schroeder
also is a Director of each of the Banks, and an
officer and/or a Director of the Corporation's
nonbank affiliates.
6
12 Includes 2,625 shares that Mr. Schroeder has
options to purchase, consisting of options for
1,050 shares that are currently exercisable and
options for 1,575 shares that will become
exercisable on April 20, 1996.
13 Includes 11,003 shares owned by certain
corporations of which Mr. Seger is an executive
officer and a shareholder.
14 Includes 1,968 shares owned by Mr. Steurer's wife.
COMMITTEES AND ATTENDANCE
The Board of Directors of the Corporation held five
meetings during 1995. The Corporation has standing audit
and compensation committees but does not have a
nominating committee. The Audit Committee, consisting of
Directors Hoffman, Lett, Mehne and Place, met five times
in 1995. The Audit Committee reviews with the
Corporation's independent auditors the scope of the audit
to be undertaken and the results of the audit and also
reviews the results of internal audits. The
Corporation's Compensation Committee, consisting of
Directors Astrike, Buehler, Place, Ruckriegel, Schroeder
and Steurer, met three times in 1995. The Corporation's
Compensation Committee makes salary and bonus
recommendations to the Board of Directors and administers
the Stock Option Plan. Each of the Directors attended at
least 75 percent of the aggregate number of meetings of
the Board of Directors of the Corporation and the
committees on which he served during 1995.
COMPENSATION OF DIRECTORS
Each Director of the Corporation, including
Directors who are salaried officers of the Corporation,
receives $250 per quarter, regardless of meeting
attendance. All of the members of the Corporation's
Board also serve on the Board of at least one of the
Banks and received compensation for such service during
1995. German American pays each Director a monthly fee
of $400 in addition to $100 for every regular Board
meeting attended and $80 for each committee meeting
attended (for a maximum of five committee meetings per
month). Union pays each Director a fee of $300 per
month, and an additional $75 for each meeting attended
and $50 for each committee meeting attended. Community
pays Directors a monthly fee of $375 ($300 if the
7
Director fails to attend a regular meeting of the Board)
and $50 for each committee meeting attended per month
(for a maximum of three committee meetings per month).
First State Bank pays each Director $300 per month plus
$100 for each Board meeting attended.
In 1992 the German American Board of Directors
approved a Director Compensation Deferral Program. A
Director who chooses to participate in the program may
defer 100 percent (not to exceed $6,600 per year) of his
Board fees for five years. Interest accumulates on
deferred amounts at the greater of eight percent or the
five-year moving average of German American's return on
equity. The accumulated amounts are paid to the
Director, or the Director's designated beneficiary, upon
the retirement, disability or death of the Director, or,
subject to German American's approval, in the event of an
unforeseeable financial emergency experienced by the
Director. All of the Directors deferred Director fees
under the program in 1995.
EXECUTIVE COMPENSATION
The following table sets forth information regarding
compensation paid for the fiscal years indicated to the
Corporation's Chief Executive Officer and the
Corporation's other most highly compensated executive
officers, based on salary and bonus earned during fiscal
1995.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
Securities
Underlying
Name and Options/ All Other
Principal Position Year Salary Bonus SARs 1 Compensation
George W. Astrike, 1995 $168,000 $39,480 1,981 $38,4722
Chairman and 1994 $158,000 $32,420 1,136 $26,561
C.E.O. of the 1993 $155,800 $31,160 9,450 $24,872
Corporation
Mark A. Schroeder, 1995 $110,000 $25,850 1,050 $25,5123
President and C.O.O. 1994 $ 92,200 $18,919 1,050 $21,281
of the Corporation 1993 $ 87,000 $17,400 7,875 $20,622
Stan Ruhe, 1995 $95,000 $21,138 0 $11,7124
Executive Vice 1994 $85,000 $17,441 0 $10,344
President of the 1993 $81,000 $16,200 4,725 $9,820
Corporation and
German American
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1 The numbers of shares underlying options have been
adjusted to reflect the December 1995 five percent
stock dividend and are rounded to the nearest whole
share.
2 Represents contributions of $8,023 under the Profit
Sharing Plan, matching contributions of $8,023
under the 401(k) Plan, Director fees in the amount
of $10,020, and $12,406 in above-market interest
credited on deferred salary and Director fees.
3 Represents contributions of $6,915 under the Profit
Sharing Plan, matching contributions of $6,915
under the 401(k) Plan, Director fees in the amount
of $10,280, and $1,402 in above-market interest
credited on deferred Director fees.
4 Represents contributions of $5,856 under the Profit
Sharing Plan and matching contributions of $5,856
under the 401(k) Plan.
In 1992 the German American Board of Directors
entered into a Deferred Compensation Agreement with Mr.
Astrike. A primary purpose of the Agreement, like that
of the Director Compensation Deferral Program, is to
provide a long-term incentive to maximize shareholder
value through increases in German American's return on
equity. The Agreement permits Mr. Astrike to defer in
advance up to $150,000 of the compensation that he would
otherwise be entitled to receive from German American for
his services. Interest is credited to the amounts
deferred by Mr. Astrike at the rate of the greater of
eight percent or the five-year moving average of German
American's return on equity. The amounts deferred by Mr.
Astrike are unfunded and Mr. Astrike's rights to such
deferred amounts are those of an unsecured general
creditor of German American. Mr. Astrike elected to
defer a portion of his 1995 salary. Mr. Astrike is not
eligible to receive profit sharing and matching
contributions pursuant to the German American Profit
Sharing and 401(k) Plan on deferred compensation. As a
result, he did not receive $2,434 in profit sharing and
matching contributions in 1995 that he otherwise would
have received.
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OPTION/SAR* GRANTS IN LAST FISCAL YEAR
The following table presents information on the
stock option grants that were made during 1995 pursuant
to the German American Bancorp 1992 Stock Option Plan.
The only stock options granted during the year were
replacement options that were granted to optionees who
tendered already owned Common Shares of the Corporation
in payment of the exercise price for options that had
been granted to them in 1993. (Numbers of options and
per share exercise prices have been adjusted to reflect
the December 1995 stock dividend.)
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term 1
Number of $ of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted Fiscal Year ($/Sh) Date 5% 10%
George W.
Astrike 1,981 2 56% $29.71 4/19/2003 $27,397 $65,314
Mark A.
Schroeder 1,050 2 30% $29.71 4/19/2003 $14,522 $34,619
*The Corporation does not grant Stock Appreciation Rights
("SARs").
1 The amounts in the table are not intended to
forecast possible future appreciation, if any, of
the Corporation's Common Shares. Actual gains, if
any, are dependent upon the future market price of
the Corporation's Common Shares and there can be no
assurance that the amounts reflected in this table
will be achieved.
2 On July 10, 1995, Messrs. Astrike and Schroeder
exercised incentive stock options previously
granted under the Stock Option Plan. The options
had been granted on April 20, 1993, at the
estimated aggregate fair market value of the shares
on that date. (The number of shares underlying the
options and the per share grant price have been
adjusted to reflect the September 1993 three-for-
two stock split and the December 1995 five percent
stock dividend.) The Stock Option Plan provides
that if the optionee tenders Common Shares of the
10
Corporation already owned by the optionee
aspayment, in whole or in part, of the exercise
price for the shares the optionee has elected to
purchase under the option, then the Corporation is
obligated to use its best efforts to issue a
replacement option of the same type (incentive or
non-qualified option), with the same expiration
date as the option that was exercised, and covering
a number of shares equal to the number of shares
tendered. The per share exercise price of the
replacement option is the fair market value of a
Common Share of the Corporation on the date of
exercise of the original option. Replacement
options are not exercisable for a period of twelve
months following their date of grant and are
subject to cancellation if during such twelve-month
period the optionee sells any Common Shares of the
Corporation other than in payment of the exercise
price of another option under the Stock Option
Plan. Upon the exercise of options on July 10,
1995, Mr. Astrike was granted a replacement option
for 1,981 shares and Mr. Schroeder was granted a
replacement option for 1,050 shares. The
replacement options have an exercise price of
$29.71 per share, subject to adjustment pursuant to
the Stock Option Plan, and become exercisable in
full on July 10, 1996. The Stock Option Plan also
provides that if a corporate reorganization would
result in the termination of the Plan and
unexercised options, then all unexercised options
will become immediately exercisable regardless of
any vesting requirements.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information with
respect to options that have been granted to
Messrs. Astrike, Schroeder and Ruhe pursuant to the
German American Bancorp 1992 Stock Option Plan and the
option exercises that occurred during 1995. (Numbers of
options and per share exercise prices have been adjusted
to reflect the December 1995 stock dividend.)
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Number of Unexercised Value of Unexercised
Options/SARs at FiscalIn-the-Money Options/SARs
Year-End (#) at Fiscal Year-End ($)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
George W. 2,940 $26,666 5,861/1,981 options1 $44,226/$5744
Astrike
Mark A. 1,575 $14,285 1,050/5,775 options2 $0/$44,5314
Schroeder
Stan Ruhe 787 $7,143 1,102/2,835 options3 $10,315/$26,5364
1 In 1993 Mr. Astrike was granted an option to
purchase 9,450 Common Shares at an exercise price
of $20.64 per share. The option became exercisable
with respect to one-half of the shares immediately
upon grant and became exercisable with respect to
the other one-half of the shares on April 20, 1994.
On July 10, 1995, Mr. Astrike exercised the option
with respect to 2,940 shares and was granted a
replacement option to cover the 1,981 shares that
he had tendered in partial payment of the exercise
price. The replacement option is for a price of
$29.71 per share and becomes exercisable on July
10, 1996.
2 In 1993 Mr. Schroeder was granted an option to
purchase 7,875 Common Shares at an exercise price
of $20.64 per share. The option becomes
exercisable with respect to twenty percent of the
shares covered by the option on each of the five
anniversary dates beginning on the first
anniversary date after the grant of the option. On
April 20, 1996, the option will become exercisable
with respect to an additional 1,500 shares. On
July 10, 1995, Mr. Schroeder exercised the option
with respect to the 1,500 shares that were then
exercisable and was granted a replacement option to
cover the 1,050 shares that he had tendered in
partial payment of the exercise price. The
replacement option is for a price of $29.71 per
share and becomes exercisable on July 10, 1996.
3 In 1993 Mr. Ruhe was granted an option to purchase
4,725 Common Shares at an exercise price of $20.64
per share. The option becomes exercisable with
respect to twenty percent of the shares covered by
the option on each of the five anniversary dates
12
beginning on the first anniversary date after the
grant of the option. The option will become
exercisable with respect to an additional 945
shares on April 20, 1996. On July 10, 1995, Mr.
Ruhe exercised the option with respect to 787 of
the shares that were then exercisable.
4 Represents the difference between the last trade
price of the Corporation's Common Shares as
reported on NASDAQ on December 28, 1995, and the
exercise price of those options having an exercise
price in excess of the last trade price, multiplied
by the number of options.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
OVERALL COMPENSATION POLICY
The executive management positions of the
Corporation and German American were restructured in July
1995 in response to the expansion of the Corporation in
the past several years to include four bank subsidiaries.
Prior to July 1995, Mr. Astrike and Mr. Schroeder served
as the primary executive officers of both German American
and the Corporation. They received their compensation
from German American and the Corporation reimbursed
German American for the time the two executives devoted
to Corporation matters. Effective on July 1, 1995,
Messrs. Astrike and Schroeder began functioning primarily
as executive officers of the Corporation, with Mr.
Astrike serving as Chairman and Chief Executive Officer
of the Corporation and Mr. Schroeder serving as President
and Chief Operating Officer of the Corporation. The two
executives now receive their compensation from the
Corporation.
In connection with the restructuring, in July 1995
the Compensation Committee of the Board of Directors of
the Corporation assumed from German American the
responsibility for recommending the salaries, bonuses and
other compensation to be paid to the executive officers
of the Corporation. The Compensation Committee's
recommendations as to compensation are submitted to the
full Board of Directors for approval. The Compensation
Committee is composed of six members, consisting of four
independent outside directors and two executive officers
of the Corporation, Mr. Astrike and Mr. Schroeder.
Messrs. Astrike and Schroeder absent themselves from, and
do not participate in, any Compensation Committee
proceedings relating to the determination of their own
13
compensation. The primary goals of the Compensation
Committee in determining compensation policy are to
provide a level of compensation that will attract,
motivate and help retain well-qualified executive
officers and to further enhance shareholder return by
more closely aligning the interests of executive officers
with the interests of the Corporation's shareholders.
The Compensation Committee attempts to attain these goals
by setting total compensation at competitive levels
considering an executive officer's individual performance
while also providing effective incentives tied to the
Corporation's overall financial performance. The
executive compensation program consists of three basic
elements: (1) base salary, (2) annual incentive bonus
awards, and (3) stock option awards.
BASE SALARY
The Corporation attempts to provide Mr. Astrike and
the other executive officers with a base salary that is
competitive with the salaries offered by other bank
holding companies of comparable size in Indiana and the
surrounding states. Each year the Compensation Committee
reviews salary surveys provided by trade associations and
accounting firms. Increases in base compensation are not
automatically based on increased compensation at
comparable institutions, however, but also reflect the
performance of the individual executive officer and of
the Corporation.
Based on an evaluation of individual performance,
the performance of the Corporation in 1994 and on
information provided by salary surveys, the Compensation
Committee recommended, and the Board approved, increases
in the 1995 base salaries for Mr. Astrike and the other
executive officers named in the Summary Compensation
Table.
ANNUAL INCENTIVE BONUS AWARDS
Annual bonuses are awarded based on the extent that
the Compensation Committee believes that they are merited
based on the attainment of certain goals relating to the
Corporation's return of equity and return on assets.
Based on these criteria, the bonuses awarded for 1995 to
Mr. Astrike and the other named executive officers were
higher than those awarded in 1994 and 1993.
14
STOCK OPTION AWARDS
In 1992 the Corporation adopted a Stock Option Plan
that provides for the award of incentive stock options
and non-qualified stock options. The purpose of granting
options is to provide long-term incentive compensation to
complement the short-term focus of annual incentive bonus
awards. The size of stock option awards depends upon the
executive officer's level of responsibility and
individual performance. Stock options are granted at the
estimated fair market value of a Common Share of the
Corporation on the date of grant.
The four independent outside directors on the
Compensation Committee also serve as the Stock Option
Committee of the Corporation, which administers the Stock
Option Plan. In April 1994 incentive stock options were
awarded to Mr. Astrike and four other executive officers.
Mr. Astrike was granted options covering 9,450 shares and
the options granted the other executive officers ranged
in amount from 2,362 shares to 7,875 shares each (all
share amounts have been adjusted to reflect the December
1995 five percent stock dividend). The option granted to
Mr. Astrike vested immediately with respect to half of
the shares covered by the option in recognition of his
past years of service as Chief Executive Officer of the
Corporation and vested with respect to the other half of
the shares on April 20, 1994. The options granted to the
other executive officers vest in twenty percent
increments beginning one year after the date of grant and
become fully exercisable on the fifth anniversary of the
grant date.
The only options granted under the Stock Option Plan
during 1995 were replacement options. The Stock Option
Plan provides that if an optionee tenders Common Shares
of the Corporation already owned by the optionee in whole
or partial payment of the exercise price of an option,
the Corporation will use its best efforts to grant the
optionee a replacement option covering a number of shares
equal to the number of already owned shares tendered. A
replacement option is of the same type (incentive or non-
qualified option) and has the same expiration date as the
option exercised. The per share exercise price of a
replacement option is the fair market value of a Common
Share of the Corporation on the date of exercise of the
original option. On July 10, 1995, Mr. Astrike and one
other named executive officer tendered shares to exercise
options and each of them was granted a replacement option
for a number of shares equal to the number of previously
owned shares tendered.
15
The Omnibus Budget Reconciliation Act enacted by the
United States Congress in August 1993 amended the
Internal Revenue Code of 1986 to disallow a public
company's compensation deduction with respect to certain
highly-paid executives in excess of $1 million unless
certain conditions are satisfied. The Corporation
presently believes that this provision is unlikely to
become applicable in the near future to the Corporation
because (a) the levels of base salary and annual
incentive bonus awards of the Corporation's executive
officers are substantially less than $1 million per
annum, and (b) the new law generally does not apply to
stock option plans that require that options be granted
at not less than fair market value, subject to certain
conditions. Therefore, the Corporation has not taken any
action to adjust its compensation plans or policies in
response to the adoption of this law.
SUBMITTED BY THE MEMBERS OF THE COMPENSATION COMMITTEE:
George W. Astrike Robert Ruckriegel
David Buehler Mark A. Schroeder
A. Wayne Place Joseph Steurer
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
Two of the persons who served during 1995 on the
Compensation Committee of the Corporation's Board of
Directors, Messrs. Astrike and Schroeder, are executive
officers of the Corporation. Messrs Astrike and
Schroeder were not present for, and did not participate
in, any Compensation Committee proceedings relating to
the determination of their own compensation. None of the
other four members of the Compensation Committee is, or
previously was, an officer or employee of the
Corporation.
Mr. Buehler, a member of the Compensation Committee,
is a principal shareholder, officer and director of
Buehler Foods, Inc., which subleases space for two branch
banking facilities to the German American Bank. In July
1995, German American Bank exercised its option to renew
one sublease for a five-year term expiring July 31, 2000.
Scheduled rents payable to Buehler Foods, Inc. over this
five-year renewal term will be, in the aggregate,
approximately $75,625. A second sublease is scheduled to
expire in 1996, but is renewable by the Bank subject to
the renewal by Buehler Foods, Inc., of its primary lease.
16
STOCK PERFORMANCE GRAPH
The SEC requires the Corporation to include in this
proxy statement a line-graph presentation comparing the
Corporation's cumulative, five-year shareholder returns
with market and industry returns. The following graph
compares the Corporation's performance with the
performance of the NASDAQ Stock Market (U.S. Companies),
NASDAQ Bank Stocks, and a peer group of bank holding
companies headquartered in Southern Indiana. The peer
group includes the following: AMBANC Corp.; CNB
Bancshares, Inc.; First Financial Corporation; Indiana
United Bancorp; National City Bancshares, Inc.; and Old
National Bancorp. The returns of each company in the
peer group have been weighted to reflect the company's
market capitalization.
Index 1990 1991 1992 1993 1994 1995
German
American
Bancorp 100.00 115.81 142.20 209.36 216.77 225.94
Southern
Indiana
NASDAQ
Bank
Stocks 100.00 127.30 162.30 205.30 213.20 224.70
NASDAQ
Bank
Stocks 100.00 164.09 238.85 272.39 271.40 404.35
NASDAQ
Stock
Market 100.00 160.57 186.87 214.51 209.86 296.30
17
CERTAIN BUSINESS RELATIONSHIPS AND TRANSACTIONS
During 1995, the bank subsidiaries of the Corporation had (and
expect to continue to have in the future) banking transactions in the
ordinary course of business with Directors, officers and principal
shareholders of the Corporation and their associates. These transactions
have been made on substantially the same terms, including interest rates,
collateral and repayment terms on extensions of credit, as those prevailing
at the same time for comparable transactions with others and did not involve
more than the normal risk of collectibility or present other unfavorable
features.
APPOINTMENT OF AUDITORS
Crowe, Chizek & Company served as auditors for the Corporation in
1995. Although it is anticipated that Crowe Chizek will be selected, the
Audit Committee has not yet considered the appointment of auditors for 1996.
Representatives of Crowe, Chizek & Company will be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions.
PRINCIPAL OWNERS OF COMMON SHARES
The following table sets forth information as of January 1, 1996,
relating to every person, including any group, known by management to
beneficially own more than five percent of the Corporation's outstanding
Common Shares and the beneficial ownership of the Corporation's Common Shares
by all Directors and officers as a group.
Name and Address Percent
of Beneficial Owner Amount and Nature of of
or Identity of Group Beneficial Ownership Class
BUEHLER GROUP 1 134,915 7.4%
C/O DAVID G. BUEHLER
1227 West 31st Street
Jasper, Indiana 47546
LETT GROUP 2 97,493 5.3%
C/O MICHAEL B. LETT
103 North Street
Loogootee, Indiana 47553
18
ROBERT AND LOVELLA RUCKRIEGEL 3 98,526 5.4%
Box 1684
Der Buro Komplex
Highway 231 North
Jasper, Indiana 47546
All Directors and 468,209 4 25.7%
officers as a group,
consisting of 14 persons
1 The Buehler Group consists of David G. Buehler,
Brenda Buehler, Joseph E. Buehler, and Buehler
Foods, Inc. Buehler Foods, Inc., which owns of
record 131,891 of these shares, is owned by David
G. Buehler and his brother, Joseph E. Buehler, who
share voting and investment power with respect to
such shares. Mr. David Buehler owns one share, and
he and his wife, Brenda Buehler, jointly own 2,906
shares. Mr. Joseph Buehler owns 117 shares.
2 The Lett Group consists of Mary E. Lett, her sons,
Michael B. Lett and J. David Lett, and Beth A.
Lett, wife of Michael B. Lett. Of these shares,
Mary E. Lett owns 93,454 shares, J. David Lett owns
1,858 shares, and Beth A. Lett owns 229 shares and
holds 163 as custodian for her and Mr. Lett's son.
3 Robert Ruckriegel and Lovella Ruckriegel are
husband and wife. Mr. Ruckriegel owns of record
67,473 shares, Mrs. Ruckriegel owns of record
30,266 shares, and they jointly own 787 shares.
4 Includes 12,581 shares that officers have options
to purchase that are exercisable within 60 days and
321,152 shares as to which voting and investment
powers are shared by members of the group with
spouses or others.
OTHER MATTERS
The Board of Directors knows of no matters, other
than those reported above, that are to be brought before
the Annual Meeting. However, if other matters properly
come before the Annual 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.
EXPENSES
All expenses in connection with this solicitation of
proxies will be borne by the Corporation.
19
SECTION 16(a) REPORTING
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's Directors and executive
officers to file with the Securities and Exchange
Commission reports showing ownership of and changes of
ownership in the Corporation's Common Shares and other
equity securities. On the basis of reports and
representations submitted by the Corporation's Directors
and executive officers, the Corporation believes that all
required Section 16(a) filings for 1995 were timely made.
During 1995 it was realized, however, that no Initial
Statement of Beneficial Ownership on Form 3 had been
filed for Stan Ruhe when he became an executive officer
on August 11, 1987, at which time he did not own any
securities of the Corporation. A Form 3 for Mr. Ruhe was
filed on August 4, 1995.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
A shareholder desiring to submit a proposal for
inclusion in the Corporation's proxy statement for the
1997 Annual Meeting of Shareholders must deliver the
proposal so that it is received by the Corporation no
later than November 25, 1996. Proposals should be mailed
to Urban R. Giesler, Secretary of the Corporation, 711
Main Street, Jasper, Indiana 47546, by certified mail,
return receipt requested.