SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[Amendment No. _____________]
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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 Section 240.14a-11(c) or Section 240.14a-12
AMBANC CORP. (Name of Registrant as
Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
___________________________________
2) Aggregate number of securities to which transaction applies:
________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________
5) Total fee paid: ________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: _________________
2) Form Schedule or Registration Statement No.: ______________
3) Filing Party: _________________
4) Date Filed: _________________
AMBANC CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 24, 1998
The Annual Meeting of Shareholders of AMBANC Corp. will be held in the
Shircliff Auditorium at Vincennes University, 2nd and Harrison Streets,
Vincennes, Indiana, on Friday, April 24, 1998, at 10:30 a.m., Vincennes time,
for the following purposes:
1. To elect four Directors to hold office until the Annual Meeting of
Shareholders in the year 2001 and until their successors are
elected and have qualified.
2. To transact such other business as may properly come before the Annual
Meeting.
Holders of Common Shares of record at the close of business on March 10,
1998, 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
TROY D. STOLL
Secretary
March 27, 1998
Vincennes, Indiana
(ANNUAL REPORT ENCLOSED)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
AMBANC CORP.
April 24, 1998
This Proxy Statement is being furnished to shareholders on or about March
27, 1998, in connection with the solicitation by the Board of Directors of
AMBANC Corp. (the "Corporation"), 302 Main Street, Vincennes, Indiana 47591, of
proxies to be voted at the Annual Meeting of Shareholders to be held at 10:30
a.m., Vincennes time, on April 24, 1998, in the Shircliff Auditorium at
Vincennes University, 2nd and Harrison Streets, Vincennes, Indiana. The
Corporation is the parent holding company for AmBank Indiana, N.A. (formerly The
American National Bank of Vincennes and Citizens' National Bank of Linton prior
to their merger in 1996), and AmBank Illinois, N.A. (formerly The First National
Bank in Robinson and the Bank of Casey prior to their merger in 1997), (referred
to collectively herein as the "Banks").
At the close of business on March 10, 1998, the record date for the Annual
Meeting, there were 6,985,678 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) an 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
The following information is provided for the Directors of the
Corporation, including the four nominees for election to the Corporation's Board
of Directors at the Annual Meeting. The Board of Directors of the Corporation
currently consists of twelve members. The members of the Board of Directors are
divided into three classes of equal size with the term of one class expiring
each year. Generally, the members of each class serve until the Annual Meeting
of the shareholders held in the year that is three years after the Directors'
election and thereafter until such Directors' successors are elected and have
qualified.
The terms of the current Directors expire as follows: 1998 -- Messrs. Seed,
Stachura, Summers and Watson; 1999 -- Ms. Ernst and Messrs. Apple, Green, and
Helmling; and 2000 -- Ms. Kaley and Messrs. Hippensteel, Niehaus, and Weber.
Robert E. Seed, John A. Stachura, Jr., Phillip M. Summers, and Robert G. Watson
have been nominated for re-election at the Annual Meeting, each to hold office
until the Annual Meeting of Shareholders to be held in the year 2001 and until
each of their successors is elected and has qualified. Each Director will be
elected by a plurality of the votes cast in the election. Shares present but not
voted for any nominees will 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 in favor of the election to the Board of Directors of Robert
E. Seed, John A. Stachura, Jr., Phillip M. Summers, and Robert G. Watson. 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 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 FOUR NOMINEES
IDENTIFIED ABOVE. (ITEM 1 ON THE PROXY).
The following table presents certain information regarding the Directors
of the Corporation, including the four nominees proposed by the Board of
Directors for election at the 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. Of the Directors, only Ms. Kaley and Mr.
Weber, who beneficially own approximately 3.9 percent and 1.3 percent of the
Corporation's Common Shares, respectively, beneficially own more than 1.0
percent of the Corporation's Common Shares. The Corporation's management knows
of no person, including any group, who owns more than five percent of the
Corporation's Common Shares. A total of 638,802 of the Corporation's Common
Shares, representing 9.1 percent, are beneficially owned by the Directors and
executive officers of the Corporation.
Name, Age, and
Beneficially Shares
Present Principal Director Owned on
Occupation Since (1) January 1,
- ------------------- ---------- ----------
1998
- ----
GLEN G. APPLE 1982 15,366 (2)
66
Farmer
CHRISTINA M. ERNST 1995 15,601 (3)
48
President, Miller Construction
Company, Inc. (power line
construction)
ROBERT D. GREEN 1978 39,676 (5)
53
President of RD
Services, Inc. (health care) (4)
ROLLAND L. HELMLING 1986 11,874 (6)
46
President and Director of
Harold's Supermarkets, Inc.,
Helmling Realty Corp., and
Andretti-Helmling Automotive
Corp. (retail auto parts)
GERRY M. HIPPENSTEEL, M.D. 1984 3,517
51
Physician
REBECCA A. KALEY 1996 275,138 (7)
63
Attorney
BERNARD G. NIEHAUS 1977 21,676
60
President and Director,
Niehaus Lumber Co., Inc.
(building materials)
ROBERT E. SEED* 1994 33,287 (8)
63
Vice President of the Corporation;
Chairman of the Board, President
and C.E.O. of AmBank Illinois, N.A.
JOHN A. STACHURA, JR.* 1988 39,008 (9)
49
Vice President/General Manager,
Solar Sources Underground, LLC
(coal mining)
PHILLIP M. SUMMERS* 1982 6,638 (10)
58
President,
Vincennes University
ROBERT G. WATSON* 1982 60,241 (11)
62
Chairman of the Board, President and Chief Executive Officer of the Corporation
and AmBank Indiana, N.A.
FRANK J. WEBER 1996 89,318 (12)
53
Attorney
All Directors and all
executive officers as a group
(consisting of 18 persons) 638,802 (13)
* Nominee
1 Includes service as a Director of AmBank Indiana, N.A., prior to the
adoption of the holding company structure in 1982.
2 Includes 2,173 shares owned by Mr. Apple's wife.
3 Includes 2,586 shares jointly owned by Ms. Ernst and her husband; 11,364
shares owned by Miller Construction Co., Inc.; and 327 shares owned by Ms.
Ernst's daughter.
4 Prior to becoming President of RD Services, Inc. in 1993, Mr. Green served
as President of Green Construction of Indiana, Inc.
5 Includes 8,460 shares jointly owned by Mr. Green and his wife, and 7,427
shares owned by Mr. Green's wife.
6 Includes 2,041 shares jointly owned by Mr. Helmling and his wife, and 1,902
shares held by Mr. Helmling as custodian for his three daughters.
7 Includes 227,722 shares held by a trust created by Ms. Kaley's deceased
father, for which shares Ms. Kaley exercises voting power; 12,484 shares
held by Ms. Kaley's step-mother; 5,924 shares held by Mrs. Kaley's adult
children; 248 shares held by Ms. Kaley's grandchildren; and 128 shares for
which Mr. Kaley has voting power pursuant to a power of attorney.
8 Includes 3,137 shares owned by Mr. Seed's wife.
9 Includes 35,548 shares jointly owned by Mr. Stachura and his wife, and
1,113 shares owned by Mr. Stachura's wife.
10 Includes 5,152 shares jointly owned by Mr. Summers and his wife.
11 Includes 24,904 shares that Mr. Watson may acquire upon the exercise of
stock options.
12 Includes 23,310 shares held by Mr. Weber's wife; 9,659 shares held by
trusts for which Mr. Weber serves as trustee; and 14,185 shares held by the
law firm in which Mr. Weber is a partner.
13 Includes 385,596 shares owned by or with spouses and others. Also includes
24,904 shares that Mr. Watson may acquire upon the exercise of stock
options.
Committees and Attendance
The Board of Directors of the Corporation held five meetings during 1997.
The Board of Directors of the Corporation has an Executive Committee and an
Examining Committee. The Executive Committee reviews on a monthly basis the
overall operation and planning for the Corporation and the Banks. The duties and
responsibilities of the Executive Committee include strategic planning; capital
structure, capital financing and mergers and acquisitions; nominations and
shareholder relation matters; bank holding company regulatory compliance;
compensation; and legal matters. The members of the Executive Committee are
Robert D. Green, Bernard G. Niehaus, John A. Stachura, Jr., and Frank J. Weber.
Robert G. Watson serves as an ex officio member. Mr. Watson does not receive any
additional compensation for service on the Executive Committee and does not
participate in any discussions or decisions relating to executive compensation.
The Executive Committee met thirteen times in 1997.
The Examining Committee is responsible for establishing suitable audits and
examinations of the affairs of the Corporation and the Banks by the internal
audit staff and a qualified independent accounting firm. The members of the
Examining Committee are Robert D. Green, Rolland L. Helmling, Gerry M.
Hippensteel, John A. Stachura, Jr. and Frank J. Weber. Messrs. Watson and Seed
serve as ex officio members; they do not receive any additional compensation for
their service. The Examining Committee met five times during 1997. The Board of
Directors of the Corporation does not have a nominating committee or a
compensation committee; instead, these functions are performed by the Executive
Committee.
Compensation of Directors
In 1996 the AMBANC Corp. Director Stock Grant Plan (the "Director
Plan") was adopted by the Board of Directors and approved by the shareholders.
Pursuant to the Director Plan, each Director of the Corporation receives a
quarterly grant of Common Shares in lieu of an annual cash retainer and cash
Board meeting attendance fees. For service on the Corporation's Board during
1997, each Director received a quarterly grant of that number of Common Shares
having a value of $1,250 as of the end of the quarter. Committee fees and fees
for service on the Banks' Boards of Directors continue to be paid in cash. Each
Director who was a member of the Executive Committee of the Corporation's Board
of Directors, other than Directors who were officers of the Corporation,
received $500 for each meeting of the Executive Committee attended and $300 for
each meeting of the Examining Committee attended. During 1997, Messrs. Apple,
Brocksmith, Helmling, Seed, Stachura, Watson and Wright also served on the Board
of Directors of one of the Banks. The Banks paid Director fees in the amount of
$6,000 for service for the full year.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information regarding
the compensation paid by the Corporation or its subsidiaries to or on behalf of
the Corporation's Chief Executive Officer and the other most highly compensated
executive officers for services rendered during each of the last three fiscal
years (to the extent applicable):
SUMMARY COMPENSATION TABLE
Long Term Compensation
Awards
Annual Compensation ----------------------
-------------------
Securities Underlying
N ame and Options/SARs All Other
Principal Position Year Salary ($) Bonus ($) Compensation
------------------ ---- ---------- --------- --------------------- ------------
Robert G. Watson, 1997 $250,000 $65,000 9,365 $29,572(1)
President and C.E.O.of 1996 $235,000 $57,500 0 $29,726
the Corporation and 1995 $235,000 $50,000 0 $24,361
AmBank Indiana, N.A.
Robert E. Seed, 1997 $125,000 $ 7,500 0 $22,884(2)
Vice President of 1996 $101,000 12,543 0 $25,742
the Corporation; 1995 N/A N/A N/A N/A
President and C.E.O. of
AmBank Illinois; N.A.
Dan J. Robinson, 1997 $107,180 $12,772 0 $12,280(3)
Executive Vice 1996 $ 96,755 10,414 0 $14,920
President, AmBank 1995 N/A N/A N/A N/A
Indiana, N.A.
1 Represents matching contributions in the amount of $18,572 under the
AMBANC Retirement and Savings Plan (the "401(k) Plan") and Director
fees in cash and grants of Common Shares having a total value of
$11,000.
2 Represents matching contributions in the amount of $11,884 under the
401(k) Plan and Director fees in cash and grants of Common Shares
having a total value of $11,000.
3 Represents matching contributions under the 401(k) Plan in the amount
of $12,280.
Employment Agreement
In 1985, the Corporation and Robert G. Watson, who is Chairman of the
Board, President, and Chief Executive Officer and a Director of the Corporation
and AmBank Indiana, N.A., entered into an employment agreement that becomes
operative only upon a Change in Control of the Corporation or AmBank Indiana,
N.A., as defined by the agreement. A Change in Control is deemed to have
occurred for purposes of the agreement if, following a tender offer, merger,
consolidation, sale of assets, or contested election of Directors, the persons
who previously were Directors no longer constitute a majority. Under this
agreement, the Corporation agrees to employ Mr. Watson in his current capacity
for specified compensation and benefits for a period of three years commencing
on the date the agreement becomes operative. Following a Change of Control,
should the Corporation terminate the employment of Mr. Watson for reasons other
than cause, death, or disability or should Mr. Watson resign as a result of a
diminishment of his status, functions, duties, or responsibilities, the
employment agreement provides for various severance benefits to be paid to Mr.
Watson on a monthly basis over the balance of the three-year employment period.
The agreement was amended as of December 31, 1997, to update certain provisions
and to provide that Mr. Watson's compensation following a change in control, and
his benefits upon termination of his employment, would include payments based on
the salary and bonus amounts he was receiving prior to the change in control or
termination of employment. The severance benefits Mr. Watson would receive under
the agreement, as amended, would include monthly payments equal to one twelfth
of his annual base salary at a rate of no less than the highest annualized rate
in effect during the twelve months prior to his termination; monthly payments
equal to one twelfth of the cash bonus he received for the most recent year
preceding the termination or the year prior to the year in which the agreement
became operable, whichever was greater; the continuation of his participation
under all incentive and employee welfare benefit plans; and a pension supplement
compensating him for any reduction in pension benefits caused by the premature
termination. The monthly payments that would have been paid to Mr. Watson over
the next three years if a Change in Control and termination of Mr. Watson's
employment had occurred on December 31, 1997, would have totalled in the
aggregate $1,000,716.
Supplemental Retirement Benefits Agreement
On June 20, 1989, the Corporation and AmBank Indiana, N.A., entered
into a Supplemental Retirement Benefits Agreement with Mr. Watson (the
"Agreement"). At a meeting held on February 16, 1995, the members of the
Executive Committee who are not officers of the Corporation reviewed Mr.
Watson's compensation. In view of Mr. Watson's contributions to the growth and
the profitability of the Corporation, they decided to recommend to the
Corporation's Board of Directors that the Agreement be amended to increase the
amount of benefits payable to Mr. Watson. The Corporation's Board of Directors
approved the recommendation of the Executive Committee, and the Corporation,
AmBank Indiana, N.A., and Mr. Watson entered into an Amended and Restated
Supplemental Retirement Benefits Agreement, which became effective on March 31,
1995 (the "Amended Agreement"). The Amended Agreement provides for the future
payment to Mr. Watson of retirement benefits in the event his employment with
both the Corporation and AmBank Indiana, N.A., is terminated for any reason
other than because of his death. The retirement benefit payable to Mr. Watson
under the Amended Agreement is a monthly annuity payable for his lifetime or for
180 months, whichever is longer, in an amount of $1,948 plus the product
obtained by multiplying $87.52 by the number of months Mr. Watson is employed by
either the Corporation or AmBank Indiana, N.A., between March 16, 1995, and
April 1, 2000 (the "Base Amount"). If Mr. Watson's employment with the
Corporation had terminated on December 31, 1997, the monthly amount that Mr.
Watson would have been entitled to receive commencing on or after January 1,
1998, would have been $4,836. Pursuant to the Amended Agreement, when Mr.
Watson's employment terminates, the amount of the annuity payments will be
adjusted to reflect the amount of employer contributions made to Mr. Watson's
401(k) plan account as of that time.
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
The following table presents information on the stock option grants
that were made during 1997 to persons named in the Summary Compensation Table.
The only option grants were made pursuant to the AMBANC Corp. Reload Option
Plan, which was adopted in 1997 (the "Reload Plan").
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term (1)
----------------- -----------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted Fiscal Year ($/Sh) Date 5% 10%
----- ---------- ------------ --------- ----- --- ---
Robert G. Watson 9,365 76% $24.11 9/25/2002 $62,371 $137,853
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 The Reload Plan provides that if a person exercises options granted
under the 1988 AMBANC Corp. Nonqualified Stock Option Plan (the "1988
Plan") and pays the exercise price by tendering already owned Common
Shares that have appreciated in value, then that person is granted a
new option (called a "reload option") for the number of already owned
shares tendered. Reload options are granted as of the date on which
the already owned shares are tendered to exercise an option under the
1988 Plan (the "Exercised Option") at an exercise price equal to the
fair market value of one Common Share on that date. Reload options are
granted for a term of five years and, unless otherwise specified in
the Reload Plan or Reload Option Agreement, have the terms of, and are
subject to the same conditions as, the Exercised Option. The Reload
Plan is self-administering except that the Executive Committee of the
Board of Directors (or if there is no Executive Committee, the entire
Board of Directors of the Corporation) may, in its sole discretion,
award stock appreciation rights to an optionee who has been granted a
reload option. The number and class of shares covered by a reload
option are subject to appropriate adjustment to reflect any stock
splits, stock dividends or other changes in the capitalization of the
Corporation.
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 and
stock appreciation rights ("SARs") that have been granted to Mr. Watson pursuant
to Corporation's Nonqualified Stock Option Plan, which expired during 1993, and
the AMBANC Corp. Reload Option Plan (numbers of shares, SARs and prices have
been adjusted to reflect the subsequent stock splits and stock dividends).
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at Fiscal Options/SARs
Year-End (#) at Fiscal Year-End ($)
---------------------- ----------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------ ------------ ------------------------- -------------------------
Robert G. Watson 26,135 $404,308 66,579/0 $603,455/0
1 All references to numbers of shares and SARs and exercise prices have
been adjusted to reflect the August 1997 two-for-one stock split and
December 1997 five percent stock dividend.
2 In 1988 Mr. Watson was granted options to purchase 41,675 Common
Shares at an exercise price of $8.64 per share and in 1989 he was
granted 41,675 SARs at a base price of $8.64 each. All of the options
and SARs are exercisable. Each SAR entitles Mr. Watson to 50 percent
of the appreciation in the value of one Common Share over the base
price of the SAR at the time of exercise. On September 25, 1997, Mr.
Watson exercised the options covering 26,136 shares. To pay the
exercise price for the options, he tendered 9,365 shares that he
already owned. He was granted a replacement option for 9,365 shares
with an exercise price of $24.11 per share.
3 Represents the difference between the last trade price of the
Corporation's Common Shares as reported on NASDAQ on December 31, 1997
($25.00), and the exercise price of the options and the base price of
the SARs, respectively.
REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission (the
"SEC"), the Corporation is required to provide certain data and information
regarding the compensation and benefits provided to the Corporation's Chief
Executive Officer. The members of the Executive Committee who are non-employee
members of the Board of Directors (the "Committee") have responsibility for the
Corporation's compensation policies and practices. The Committee recommends
compensation amounts for executive officers of the Corporation to the Board of
Directors for final approval. In fulfillment of its SEC disclosure requirements,
the Committee has provided the following report for inclusion in this Proxy
Statement.
COMPENSATION POLICY
The goal of the Corporation's executive compensation policy is to ensure
that an appropriate relationship exists between executive pay and performance,
while at the same time providing compensation that will attract and retain
superior talent. More specifically, the executive compensation program of the
Corporation has been designed to:
o Reflect a pay-for-performance policy that links compensation amounts to
Corporation, subsidiary and individual performance;
o Motivate executive officers to achieve strategic business goals and
reward them for their achievement; and
o Provide compensation opportunities that are competitive with those
offered by other high-performing peer companies, thus ensuring that the
Corporation is able to compete for and retain talented executives who
are critical to the Corporation's long-term success.
At present, the executive compensation program is composed of salary,
potential annual cash incentives, and other benefits typically offered to
executives of similar companies. As an executive's level of responsibility
increases, a greater portion of the executive's potential total compensation
opportunity is based on performance incentives, causing greater variability in
the individual's total compensation level from year-to-year. The Committee
considers a number of criteria and factors in determining compensation, as
discussed below, but the Committee has not assigned any specific weights to
those criteria and factors.
SALARIES
Base salaries for executive officers generally are determined based on
consideration of competitive salary data provided by outside consultants using
relevant survey data for financial institutions, internal comparability
considerations, and individual performance. Base salaries are not automatically
adjusted each year.
In October 1994, the Corporation's Board of Directors held a strategic
planning meeting at which the Board reviewed and discussed in detail the
Corporation's performance and the contributions of the Corporation's employees,
including those of Mr. Watson, the Corporation's Chief Executive Officer. In
light of the determinations made by the Board, the Committee undertook a
comprehensive review of the compensation received by the Chief Executive
Officer. The Chairman of the Committee, together with the Corporation's
financial, accounting and legal advisors and after reviewing a number of
compensation surveys and other data, prepared a report on the compensation
received by chief executive officers of bank holding companies located in the
Midwest and comparable to the Corporation in asset and deposit size, rate of
growth, profitability, and other factors. The Committee reviewed the report and,
at a special meeting held on February 16, 1995, made recommendations for future
increases in Mr. Watson's base salary that would compensate Mr. Watson not only
for his service and performance in the current year but also recognize his
contributions to the growth and profitability of the Corporation since his
assumption of leadership in 1982. The Board of Directors approved the
Committee's recommendations with respect to Mr. Watson's compensation. Based on
the recommendations of the Committee, which the Board approved, Mr. Watson's
base salary for 1997 was set at $250,000.
BONUS AWARDS
Bonuses are awarded to the Corporation's CEO and other executive officers
on the basis of an assessment of the following factors:
o The Corporation's performance as reflected by acquisition activity,
growth, return on assets, return on equity and total return to the
shareholders as reflected in the shareholder return performance graph
appearing in this Proxy Statement;
o The performance of the executive, along with relevant business unit or
subsidiary performance; and
o A review of competitive data on incentive compensation for peer
companies provided by outside consultants.
The Corporation's CEO was awarded a bonus in the amount of $65,000 for
1997, representing an increase of $7,500 over the amount of the bonus awarded to
him for 1996.
LONG-TERM INCENTIVES
In 1988 the Corporation's shareholders approved the adoption of a Stock
Option Plan (the "1998 Option Plan"). Stock options were granted to Mr. Watson
and another executive officer in 1988 and stock appreciation rights ("SARs")
were granted to Mr. Watson and the other executive officer in 1989. No other
grants were made pursuant to the 1988 Option Plan prior to its expiration in
April 1993. In 1997 the Board of Directors adopted the AMBANC Corp. Reload
Option Plan (the "Reload Plan"). The only persons eligible to receive grants
under the Reload Plan are persons who were granted options under the 1988 Option
Plan. The Reload Plan provides that if a person exercises an option granted
under the 1988 Option Plan (the "Exercised Option") and pays the exercise price
for the Exercised Option by tendering already owned Common Shares, then that
person is automatically granted an option for the number of already owned shares
tendered. During 1997 Mr. Watson exercised options granted to him under the 1988
Option Plan and was granted a reload option covering the number of Common Shares
that he had tendered in payment of the exercise price.
TAX ACT COMPENSATION LIMITS
In 1993 the Internal Revenue Code of 1986 was amended to limit, unless
certain conditions are satisfied, to $1 million the deduction that a publicly
held corporation may take with respect to the compensation paid to certain
highly paid executive officers. The Committee has not taken any action to
recommend changes in the Corporation's compensation policies in response to this
change in the deductibility cap because the base salaries and incentive bonuses
awarded to the Corporation's executives are substantially less than the cap
amount.
SUBMITTED BY THE MEMBERS OF THE EXECUTIVE COMMITTEE WHO RECOMMEND EXECUTIVE
COMPENSATION:
Robert D. Green, Chairman Bernard G. Niehaus
Frank J. Weber John A. Stachura, Jr.
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 performance of the Corporation's Common Shares with the performance
of the NASDAQ Stock Market -- U.S. Companies and NASDAQ -- Bank Stocks.
Index 1992 1993 1994 1995 1996 1997
- ----- ------ ------ ------ ------ ------ ------
AMBANC Corp. 100 118 103 109 117 206
NASDAQ-Bank Stocks 100 114 114 169 224 377
NASDAQ-U.S. Companies 100 115 112 159 195 240
CERTAIN TRANSACTIONS
The Corporation, through the Banks, has had, and expects to have in the
future, banking transactions in the ordinary course of its business with
Directors and officers 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
Deloitte & Touche LLP ("Deloitte & Touche") served as the independent
auditors for the Corporation and the Banks for 1997 and has been selected to
serve for 1998. Representatives from Deloitte & Touche are expected to be
present at the Annual Meeting and they will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
SECTION 16(a) : BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers and any persons who beneficially
own more than 10 percent of the Corporation's Common Shares 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 1997 were timely made, except that Director Rebecca
Kaley was late in filing a report with respect to her sale of 300 shares on
December 31, 1997.
OTHER MATTERS
The Board of Directors knows of no matters, other than those matters
reported above, that are to be brought before the meeting. If other matters
properly come before the meeting, however, 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.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
A shareholder desiring to submit a proposal for inclusion in the
Corporation's proxy statement for the 1999 Annual Meeting of Shareholders must
deliver the proposal so that it is received by the Corporation no later than
November 27, 1998. Proposals should be sent to Secretary, AMBANC Corp., P.O. Box
556, Vincennes, Indiana 47591-0556, and mailed by certified mail, return receipt
requested.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH SHAREHOLDER, ON
WRITTEN REQUEST, A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR
1997, INCLUDING THE FINANCIAL STATEMENTS THERETO BUT OMITTING EXHIBITS. REQUESTS
SHOULD BE ADDRESSED TO INVESTOR RELATIONS DEPARTMENT, AMBANC CORP., P.O.
BOX 556, VINCENNES, INDIANA 47591-0556.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
1998 ANNUAL MEETING OF SHAREHOLDERS OF AMBANC CORP.
I hereby appoint Bruce A. Smith and Gregory W. Sturm, and each of them,
my proxies, with power of substitution and revocation, to vote all shares of
stock of AMBANC Corp. (the "Corporation") that I am entitled to vote at the
Annual Meeting of Shareholders to be held in Shircliff Auditorium at Vincennes
University, 2nd and Harrison Streets, Vincennes, Indiana, on Friday, April 24,
1998, at 10:30 a.m., Vincennes time, and any adjournments thereof, as provided
herein:
1. ELECTION OF DIRECTORS
FOR all nominees listed below to serve until the
Annual Meeting of Shareholders in the year 2001 as
set forth in the Proxy Statement dated March 27, 1998
(except as marked to the contrary below--see
"Instructions"):
Robert G. Watson
Robert E. Seed
John A. Stachura, Jr.
Phillip M. Summers
WITHHOLD AUTHORITY to vote for all nominees listed above
(Instructions: To withhold authority to vote for any nominee, write
that nominee's name in the space provided below.)
(To Be Completed on Reverse Side)
2. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED. IN THE ABSENCE OF SPECIFICATIONS,
THIS PROXY WILL BE VOTED FOR ITEM 1. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ITEM 1.
SHAREHOLDERS SHOULD MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED POST-PAID ENVELOPE. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR
TO ITS EXERCISE.
Dated:___________________ __________________________________
__________________________________
Signature or Signatures
(Please sign exactly as your name appears on this proxy. If
shares are issued in the name of two or more persons, all
such persons should sign. Trustees, executors and others
signing in a representative capacity should indicate the
capacity in which they sign.)