OMB APPROVAL
--------------------------
OMB Number: 3235-0059
Expires: August 31, 2004
Estimated average burden
hours per response...14.73
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 Section 240.14a-12
OLD NATIONAL BANCORP
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
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:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
3) Filing Party:
--------------------------------------------------------------------------------
4) Date Filed:
--------------------------------------------------------------------------------
PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
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 24, 2003, 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. The election of five Directors to Class I of the Company's Board of
Directors, each to serve a term of three years, until a successor has
been duly elected and qualified.
2. Ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants of the Company and its subsidiaries for the
fiscal year ending December 31, 2003.
3. Transaction of such other matters as may properly come before the
meeting or any adjournments and postponements thereof.
Shareholders of record at the close of business on February 18, 2003, are
entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Jeffrey L. Knight
Senior Vice President and
Corporate Secretary
March 12, 2003
IMPORTANT
PLEASE SUBMIT 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 24, 2003, 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" the election of the five 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
subsidiaries for the fiscal year ending December 31, 2003. 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 12, 2003.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only shareholders of the Company of record at the close of business on
February 18, 2003, 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 63,604,841
shares were issued and outstanding on the record date of February 18, 2003. 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 18, 2003, 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 18, 2003, no individual
Director, nominee or officer beneficially owned more than 5% of the common stock
of the Company outstanding.
As of February 18, 2003, 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 4,902,843 shares of common stock of
the Company, which constituted 7.71% 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. ELECTION OF DIRECTORS
The first item to be acted upon at the Annual Meeting of Shareholders is the
election of five Directors to Class I of the Board of Directors, each to hold
office for three years (until the 2006 Annual Meeting) and until his or her
successor shall have been duly elected and qualified.
In accordance with the Company's Articles of Incorporation, the Board of
Directors is divided into three classes with staggered terms. Each class is to
be elected to three (3) year terms with each term expiring in different years.
At each Annual Meeting the Directors or nominees constituting one class are
elected for a three (3) year term. The term of those Directors listed below as
Class I expires at the Annual Meeting on April 24, 2003, and this Class contains
the nominees to be elected to serve until the Annual Meeting in 2006. Any
vacancies that occur after the Directors are elected may be filled by the Board
of Directors in accordance with the By-Laws for the remainder of the full term
of the vacant directorship.
The Board of Directors intends to nominate for election as Class I Directors
the following five (5) persons, all of whom are presently serving as Class I
Directors of the Company: Larry E. Dunigan, Douglas D. French, Phelps L.
Lambert, Louis L. Mervis and Marjorie Z. Soyugenc. 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 3 through 7 contain the following information with respect to each
Class I Director, and with respect to incumbent Directors in Classes II and III
of the Board of Directors who are not nominees for re-election at the Annual
Meeting: name; principal occupation or business experience for the last five
years; age; the year in which the nominee or incumbent Director first became a
Director of the Company; the number of shares of common stock of the Company
beneficially owned by the nominee or incumbent Director as of February 18, 2003;
and the percentage that the shares beneficially owned represent of the total
outstanding shares of the Company as of February 18, 2003. The number of shares
of common stock of the Company shown as being beneficially owned by each
Director nominee or incumbent Director includes those over which he or she has
either sole or shared voting or investment power.
2
INFORMATION REGARDING NOMINEES FOR CLASS I DIRECTORS
(TERM TO EXPIRE 2006)
[LARRY E. DUNIGAN [DOUGLAS D. FRENCH [PHELPS L. LAMBERT
PHOTO] PHOTO] PHOTO]
LARRY E. DUNIGAN DOUGLAS D. FRENCH PHELPS L. LAMBERT
- CHIEF EXECUTIVE - PRESIDENT AND CEO, - MANAGING PARTNER,
OFFICER, HOLIDAY ASCENSION HEALTH BUSH AND LAMBERT
MANAGEMENT COMPANY (2001 - present) (1997 - present)
(1997 - present) (Health Care) (Investments)
(Long Distance - EXECUTIVE VICE - Age 55
Communication & PRESIDENT/COO, - Director since
Internet Services) ASCENSION HEALTH 1990
- Age 60 (1999 - 2001)
- Director since - EXECUTIVE VICE
1982 PRESIDENT/COO,
DAUGHTERS OF
CHARITY NATIONAL
HEALTH SYSTEM
(1998 - 1999)
(Health Care)
- Age 49
- Director since
2002
[LOUIS L. MERVIS [MARJORIE Z.
PHOTO] SOYUGENC PHOTO]
LOUIS L. MERVIS MARJORIE Z. SOYUGENC
- PRESIDENT, MERVIS - EXECUTIVE
INDUSTRIES, INC. DIRECTOR, WBH
(1997 - present) EVANSVILLE, INC.,
(Steel Fabricating) WELBORN
- Age 68 FOUNDATION,
- Director since INC. AND WELBORN
1996 BAPTIST
FOUNDATION, INC.
(1999 - Present)
(Nonprofit
foundation)
- FORMER PRESIDENT &
CEO, WELBORN
BAPTIST HOSPITAL
(1986 - 1999)
(Health Care)
- Age 62
- Director since
1993
3
INFORMATION REGARDING INCUMBENT DIRECTORS CONTINUING IN OFFICE
CLASS II DIRECTORS
(TERM EXPIRING 2004)
[RICHARD J. BOND [DAVID E. ECKERLE ELLERBROOK PHOTO
PHOTO] PHOTO] NIEL C. ELLERBROOK
RICHARD J. BOND DAVID E. ECKERLE - CHAIRMAN AND CEO,
- COMMUNITY - RETIRED SINCE 2001 VECTREN CORPORATION
CHAIRMAN, OLD - COMMUNITY (2000 - present)
NATIONAL BANK CHAIRMAN, OLD (Utility)
VINCENNES, INDIANA NATIONAL BANK - PRESIDENT AND CEO,
(AN AFFILIATE OF JASPER, INDIANA INDIANA ENERGY
THE COMPANY) (AN AFFILIATE OF (1999 - 2000)
(1997 - present) THE COMPANY) (Utility)
- Age 69 (1997 - 2001) - PRESIDENT AND COO,
- Director since - Age 59 INDIANA ENERGY
1989 - Director since (1997 - 1999)
1993 - Age 54
- Director since
2002
[RONALD B. LANKFORD [JAMES A. RISINGER [KELLY N. STANLEY
PHOTO] PHOTO] PHOTO]
RONALD B. LANKFORD JAMES A. RISINGER KELLY N. STANLEY
- RETIRED SINCE 1999 - CHAIRMAN, - PRESIDENT & CEO,
- PRESIDENT & COO, PRESIDENT & CEO, ONTARIO
OLD NATIONAL OLD NATIONAL CORPORATION
BANCORP BANCORP; CHAIRMAN, (1997 - present)
(1997 - 1999) PRESIDENT & CEO, (Diversified
- Age 69 OLD NATIONAL BANK Technology/Manufacturing
- Director since (AN AFFILIATE OF Company)
1994 THE COMPANY) - Age 59
(1998 - present) - Director since
- EXECUTIVE VICE 2000
PRESIDENT, OLD
NATIONAL BANCORP
(1997 - 1998)
- Age 54
- Director since
1997
4
CLASS III DIRECTORS
(TERM EXPIRING 2005)
[ALAN W. BRAUN [ANDREW E. GOEBEL [LUCIEN H. MEIS
PHOTO] PHOTO] PHOTO]
ALAN W. BRAUN ANDREW E. GOEBEL LUCIEN H. MEIS
- CHAIRMAN & CEO, - PRESIDENT & COO, - PRESIDENT, MEIS
INDUSTRIAL VECTREN VENTURES, INC.
CONTRACTORS, INC. CORPORATION (1997 - present)
(2002 - present) (2000 - present) (Financial
(Construction) (Utility) Investments)
- PRESIDENT, - PRESIDENT & COO, - Age 68
INDUSTRIAL SIGCORP, INC. - Director since
CONTRACTORS, INC. (1999 - 2000) 1985
(1997 - 2002) (Utility)
- Age 58 - PRESIDENT & CEO,
- Director since SOUTHERN INDIANA
1988 GAS & ELECTRIC
COMPANY
(1997 - 2000)
(Utility)
- Age 55
- Director since
2000
[JOHN N. ROYSE [CHARLES D. STORMS
PHOTO] PHOTO]
JOHN N. ROYSE CHARLES D. STORMS
- RETIRED SINCE 1998 - PRESIDENT & CEO,
- CHAIRMAN, OLD RED SPOT PAINT &
NATIONAL BANCORP VARNISH CO., INC.
(1997 - 1998) (1997 - present)
- Age 69 (Manufacturer of
- Director since Industrial
1985 Coatings)
- Age 59
- Director since
1988
5
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 18, 2003, by each
Director and named Executive Officer and by all Directors and named Executive
Officers as a group.
NUMBER OF SHARES PERCENT OF
NAME OF PERSON BENEFICIALLY OWNED(1) COMMON STOCK
-------------- --------------------- ------------
Richard J. Bond................... 92,378 *
Alan W. Braun..................... 136,793 *
Thomas F. Clayton................. 121,330(2) *
Larry E. Dunigan.................. 261,513(3) *
David E. Eckerle.................. 100,590(4) *
Niel C. Ellerbrook................ 1,384(5) *
Douglas D. French................. 0 *
Andrew E. Goebel.................. 7,490(6) *
Michael R. Hinton................. 134,422(7) *
Phelps L. Lambert................. 212,097(8) *
Ronald B. Lankford................ 34,640 *
Lucien H. Meis.................... 96,749(9) *
Louis L. Mervis................... 1,271(10) *
Daryl D. Moore.................... 116,940(11) *
John S. Poelker................... 104,253(12) *
James A. Risinger................. 280,988(13) *
John N. Royse..................... 312,735(14) *
Marjorie Z. Soyugenc.............. 255,415(15) *
Kelly N. Stanley.................. 17,424(16) *
Charles D. Storms................. 56,928(17) *
Directors and Executive Officers
as a Group (20 persons)......... 2,345,340 3.67%
-------------------------
* 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 to be owned by that person.
(2) Includes 13,329 shares held by Susan Clayton, Mr. Clayton's spouse. Also
includes 94,764 shares issuable to Mr. Clayton upon exercise of
outstanding stock options exercisable within 60 days.
(3) Includes 8,365 shares held by Kevin T. Dunigan Trust, Sharon Dunigan,
trustee; 9,105 shares held by Derek L. Dunigan Trust, Sharon Dunigan,
trustee; 2,250 shares held by Mitchell Ryan Dunigan Trust, Larry Dunigan,
trustee; and 40,201 shares held by Larry E. and Sharon Dunigan.
(4) Includes 779 shares held by David and Luella Eckerle and 21,742 shares
held by Luella Eckerle, Mr. Eckerle's spouse.
(5) Includes 355 shares held by Karen Ellerbrook, Mr. Ellerbrook's spouse.
(6) Includes 6,402 shares held by Darlene Goebel, Mr. Goebel's spouse.
(7) Includes 10,066 shares held by Debra D. Hinton, Mr. Hinton's spouse. Also
includes 94,764 shares issuable to Mr. Hinton upon exercise of outstanding
stock options exercisable within 60 days.
(8) Includes 10,640 shares held by Carol M. Lambert, Mr. Lambert's spouse.
(9) Includes 7,281 shares held by Alane Meis, Mr. Meis' spouse.
(10) The Mervis Charitable Remainder Trust and the Ellen Joy Mervis Trust own
38,088 shares of common stock of the Company with respect to which Mr.
Mervis disclaims beneficial ownership.
6
(11) Also includes 94,764 shares issuable to Mr. Moore upon exercise of
outstanding stock options exercisable within 60 days.
(12) Also includes 95,922 shares issuable to Mr. Poelker upon exercise of
outstanding stock options exercisable within 60 days.
(13) Also includes 232,459 shares issuable to Mr. Risinger upon exercise of
outstanding stock options exercisable within 60 days.
(14) Includes 3,422 shares held by Peg G. Royse, Mr. Royse's spouse.
(15) Includes 243,391 shares held by Rahmi Soyugenc, Ms. Soyugenc's spouse.
(16) Includes 189 shares held by Donna M. Stanley, Mr. Stanley's spouse.
(17) Includes 153 shares held by Elizabeth K. Storms, Mr. Storms' spouse.
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 or her successor.
NAME AGE OFFICE AND BUSINESS EXPERIENCE
---- --- ------------------------------
James A. Risinger 54 President of the Company since January 27, 2000, Chairman
of the Board and Chief Executive Officer since 1998 and
Director since 1997.
Thomas F. Clayton 57 Executive Vice President of the Company since January 27,
2000 and Southern Regional Executive from 1997 to 2000.
Christopher L. Melton 43 Executive Vice President of the Company since February
26, 2001, and Chairman, President and CEO 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 45 Executive Vice President of the Company since January 25,
2001 and Senior Vice President from 1996 to 2001.
Michael R. Hinton 48 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.
Annette W. Hudgions 45 Executive Vice President of the Company since August 2002
and President and CEO of Old National Service Division
since April 1997.
John S. Poelker 60 Executive Vice President of the Company since January 27,
2000, Chief Financial Officer since 1998 and Senior Vice
President from 1998 to 2000.
7
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. On January 23, 2003, the Board of Directors approved
charters for the Compensation Committee and Audit Committee, and the Board
approved a charter to establish a Corporate Governance and Nominating Committee
which replaces the Nominating 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 2002 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 subsidiaries; and to report to the Board
periodically any conclusions or recommendations the Audit Committee may have
with respect to such matters. The current members of the Audit Committee are
Andrew E. Goebel (Chairman), David L. Barning, Larry E. Dunigan, Phelps L.
Lambert, Marjorie Z. Soyugenc and Kelly N. Stanley. The Audit Committee held
four meetings during 2002. 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 which has also been approved by
the Board. A copy of the new charter is attached as Appendix I.
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, Niel C. Ellerbrook and Lucien H. Meis, all of whom
are independent Directors. The Compensation Committee met two times during 2002.
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 current members of the Personnel Committee are Marjorie Z.
Soyugenc (Chairman), David L. Barning, Richard J. Bond, Alan W. Braun, David E.
Eckerle, Douglas D. French, Ronald B. Lankford, Louis L. Mervis and Charles D.
Storms. The Personnel Committee met two times during 2002.
The function of the Nominating Committee was 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
8
in 2002 were Alan W. Braun (Chairman), Larry E. Dunigan, Niel C. Ellerbrook,
Douglas D. French, Phelps L. Lambert, Marjorie Z. Soyugenc, Kelly N. Stanley and
Charles D. Storms. The Nominating Committee met three times in 2002. On January
23, 2003, this Committee was replaced by the Corporate Governance and Nominating
Committee which is discussed in the following paragraph.
On January 23, 2003, the Board of Directors approved a charter to establish
a Corporate Governance and Nominating Committee which replaces the Nominating
Committee. The current members of the Corporate Governance and Nominating
Committee are Larry E. Dunigan (Chairman), Niel C. Ellerbrook, Douglas D.
French, Phelps L. Lambert, Marjorie Z. Soyugenc, Kelly N. Stanley and Charles D.
Storms. The Corporate Governance and Nominating Committee has responsibility for
recruiting and nominating new Directors, assessing the independence of
non-management Directors, leading the Board in its annual performance
evaluation, reviewing and assessing the adequacy of the Corporate Governance
Guidelines and retaining outside advisors as needed to assist and advise the
Board with respect to legal and other accounting matters. The Corporate
Governance and Nominating Committee is also responsible for reviewing with the
full Board, on an annual basis, the requisite skills and characteristics of
Board members as well as the composition of the Board as a whole.
The Company's nomination procedures are governed by its By-Laws. Each year
the Corporate Governance and Nominating Committee makes a recommendation to the
entire Board of Directors of nominees for election as Directors. The Committee
will review suggestions from shareholders regarding nominees for election as
Directors. All such suggestions from shareholders must be submitted in writing
to the Corporate Governance and 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 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 Corporate Governance and Nominating Committee may reasonably
request. Consent of the suggested nominee to serve as a Director of the Company,
if elected, must also be included with the written suggestion.
MEETINGS OF THE BOARD OF DIRECTORS
AND DIRECTOR FEES
The Board of Directors of the Company held 12 meetings during the fiscal
year ended December 31, 2002. All incumbent Directors attended 75% or more of
the aggregate of the 2002 meetings of the Board and of the Board Committees to
which they were appointed.
All Directors of the Company received an annual retainer of $12,000 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 $2,500.
9
INDEPENDENT ACCOUNTANT'S 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, 2002, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year, were $462,575, of which an aggregate amount of $384,000 had been
billed through December 31, 2002.
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, 2002.
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, 2002, were as follows:
Tax activities.............................................. $ 67,293
IT audit co-sourcing services............................... $ 72,980
Other audit related services................................ $ 16,300
Other fees.................................................. $ 10,570
--------
Total Other Fees............................................ $167,143
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. The
Board of Directors approved the amended charter of the Audit Committee on
January 23, 2003, a copy of which is attached to this Proxy Statement as
Appendix I.
INDEPENDENCE OF AUDIT COMMITTEE MEMBERS
The Audit Committee is comprised of six members of the Board of Directors of
the Company. All of the members of the Audit Committee are independent (as
independence is currently 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, 2002, 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
10
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, 2002, to be filed with the Securities and Exchange Commission.
Submitted by,
Andrew E. Goebel, Chairman
David L. Barning
Larry E. Dunigan
Phelps L. Lambert
Marjorie Z. Soyugenc
Kelly N. Stanley
11
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 salary related compensation matters. The
Company retained AON Consulting, Inc. in 2000 to assist the Compensation
Committee on cash incentive and equity 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
1,885,800 stock option grants to employees of the Company in 2002. 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 CEO (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
12
duties and responsibilities, its accountability and the impact on the operations
and profitability of the Company. The Company's peer group consists of
reasonably 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 2002, 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 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 2002, the Company fell just short of the earnings per
share target resulting in a payout to participating officers at slightly below
the "target" level under the STIP. (See Summary Compensation Table on page 15.)
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. Four hundred eight
officers, including those listed in the Summary Compensation Table, participate
in the Plan. During 2002 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 officers in the Summary
Compensation Table, the Compensation Committee took into account the respective
scope of
13
responsibility, performance requirements and recent and expected contributions
of the Plan participants to the Company's achievement of its long-term
performance objectives.
DISCUSSION OF 2002 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. These factors were
considered by the Committee in evaluating an increase in the Chairman's base
salary in 2002.
SUMMARY
The Committee has determined that the Company's executive total compensation
programs, plans and awards for 2002 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
Niel C. Ellerbrook
Lucien H. Meis
14
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table shows the annual compensation paid
by the Company to its Chief Executive Officer for 2002 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, 2002 (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
COMPENSATION ANNUAL AWARD(S)
---------------------------------- -----------------------
(D)
NUMBER OF
(C) SECURITIES
OTHER RESTRICTED UNDERLYING (E)
(A) (B) ANNUAL STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD GRANTED COMPENSATION
--------------------------- ---- ------ ----- ------------ ---------- ---------- ------------
James A. Risinger.................. 2002 $625,019 $325,197 $ 6,414 $ 0 208,950 $85,031
Chairman of the Board, President, 2001 570,003 319,772 8,737 0 224,183 52,020
and Chief Executive Officer 2000 505,627 0 43,710 130,475 0 72,847
Thomas F. Clayton.................. 2002 $337,002 $127,521 $ 6,920 $ 0 87,150 $41,736
Executive Vice President 2001 310,627 126,736 6,186 0 92,490 27,956
Administration & Operations 2000 275,621 0 10,873 37,054 0 34,524
Michael R. Hinton.................. 2002 $350,002 $132,441 $ 3,527 $ 0 87,150 $42,906
Executive Vice President 2001 310,627 126,736 3,800 0 92,490 27,956
Banking Operations 2000 275,621 0 6,976 51,526 0 25,575
Daryl R. Moore..................... 2002 $275,018 $104,067 $ 7,262 $ 0 87,150 $33,933
Executive Vice President 2001 250,037 102,015 4,980 0 92,490 22,503
Chief Credit Officer 2000 210,018 0 7,558 37,054 0 28,570
John S. Poelker.................... 2002 $332,010 $125,632 $ 3,447 $ 0 87,150 $31,952
Executive Vice President 2001 305,011 124,445 3,447 0 93,648 21,351
Chief Financial Officer 2000 270,005 0 13,848 41,535 0 26,979
---------------
(a) Salary includes base compensation and income recognized in the form of
Director fees paid by the Company or its subsidiaries 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 (c) 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 2002 and 2001 as the Company discontinued the
Plan in 2000.
(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 2002: (i) Company contribution to the
Company's Employee Stock Ownership Plan of $18,000, $18,000, $18,000,
$18,000 and $14,000, for each Named Executive Officer, respectively; and
(ii) Company contribution to the Supplemental Deferred Compensation Plan of
$67,031, $23,736, $24,906, $15,933, and $17,952, for each Named Executive
Officer respectively.
15
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, 2002.
INDIVIDUAL GRANT GRANT DATE VALUE(3)
----------------------------------------------- ------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE EXPIRATION
NAME GRANTED IN 2002(1) PRICE(2) DATE GRANT DATE PRESENT VALUE
---- ---------- ---------- -------- ---------- ------------------------
James A. Risinger................... 208,950 11.1% $22.70 1/22/12 $1,126,241
Thomas F. Clayton................... 87,150 4.6% $22.70 1/22/12 $ 469,739
Michael R. Hinton................... 87,150 4.6% $22.70 1/22/12 $ 469,739
Daryl D. Moore...................... 87,150 4.6% $22.70 1/22/12 $ 469,739
John S. Poelker..................... 87,150 4.6% $22.70 1/22/12 $ 469,739
---------------
(1) Based on an aggregate of 1,885,800 option shares granted in fiscal year
2002.
(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 New York Stock
Exchange 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.
(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 2002 with respect to each of the Named Executive Officers.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR END FISCAL YEAR END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
James A. Risinger............ -- -- 136,259 296,874 -- --
Thomas F. Clayton............ -- -- 53,462 126,178 -- --
Michael R. Hinton............ -- -- 53,462 126,178 -- --
Daryl D. Moore............... -- -- 53,462 126,178 -- --
John S. Poelker.............. -- -- 54,620 126,178 -- --
---------------
(1) Based on the fair market value of the Company's Common Stock at fiscal year
end ($23.143 per share), and such value is equal to the closing price, as
reported by the New York Stock Exchange 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 plan) during such period.
16
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, 2002 prohibited the distribution of
benefits from the Retirement Plan in excess of $160,000 per year expressed
as a straight life annuity. It also prohibited compensation in excess of
$200,000 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.
2002 base salary figures for the Chairman and the next four most highly
compensated Executive Officers of the Company are set forth in column (a) in the
Summary Compensation Table on page 15. The Retirement Plan was frozen as of
December 31, 2001, except for employees who were at least age 50 or who had 20
years of vested service as of December 31, 2001. As of December 31, 2002, Mr.
Risinger had 25 years of vested service; Mr. Hinton, 23 years; Mr. Clayton, 15
years; and Mr. Moore, 24 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 benefits under the Retirement
Plan exceed 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
17
defined benefit pension plans may not exceed $160,000), 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 2002 through December 31,
2003.
18
SHAREHOLDER RETURN PERFORMANCE COMPARISONS
The Company is required to include in this proxy statement a line graph
comparing cumulative five-year total shareholder returns for the Company's
common stock to cumulative total returns of a broad-based equity market index
and a published industry index. The following indexed graph compares the
performance of the Company's common stock for the past five years to the Russell
1000 Index and the NYSE Financial Index.
(PERFORMANCE GRAPH)
OLD NATIONAL BANCORP RUSSELL 1000 NYSE FINANCIAL
-------------------- ------------ --------------
12/31/97 100.00 100.00 100.00
12/31/98 123.31 126.75 105.13
12/31/99 115.35 153.28 104.16
12/31/00 113.88 139.73 130.45
12/31/01 103.64 134.19 119.71
12/31/02 107.82 103.41 102.92
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, 1997, in common stock of each of the Company, the
Russell 1000 Index, and the NYSE Financials Index with investment weighted on
the basis of market capitalization.
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 subsidiaries and have had
and expect in the future to have similar transactions with the subsidiaries 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 subsidiaries
and which have had and expect to have transactions with the subsidiaries 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.
During 2002, the Company paid approximately $3,002,078 for engineering,
design and construction services to Industrial Contractors, Inc. in connection
with its role as general contractor for the construction of the Company's new
headquarters building in Evansville and 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.
19
ITEM 2. 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, Chicago,
Illinois, as independent accountants for the Company and its subsidiaries for
the fiscal year ending December 31, 2003. 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, 2003. 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 AND DIRECTOR
NOMINATIONS FOR THE 2004 ANNUAL MEETING
Proposals submitted by shareholders under Rule 14a-8 of the Securities and
Exchange Commission to be presented at the 2004 Annual Meeting of Shareholders
must be received by the Company at its principal executive office no later than
November 13, 2003, 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 2004 Annual Meeting of Shareholders is not received by the
Company on or before January 27, 2004, 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.
All nominations of persons to serve as Directors of the Company must be made
in accordance with the requirements contained in the Company's By-Laws. See the
description of the Corporate Governance and Nominating Committee under the
caption "Committees of the Board of Directors."
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.
20
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, 2002. ADDRESS ALL REQUESTS TO:
CANDICE JENKINS, VICE PRESIDENT & CONTROLLER
OLD NATIONAL BANCORP
P. O. BOX 718
EVANSVILLE, INDIANA 47705-0718
21
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 Shares to file with the Securities and Exchange
Commission reports showing ownership of and changes of ownership in the
Company's Common Shares 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 2002 were timely made, except for the following
transactions of executive officers and one Director that were not timely filed
due to inadvertence: one report for Mr. Ellerbrook pertaining to shares of
company stock owned by his wife which was not included on his initial filing;
one report for Mr. Hinton pertaining to a gift of stock; one report for Ms.
Hudgions pertaining to the reporting of stock options; and one report for Mr.
Risinger pertaining to the purchase of company stock. Upon discovery, all of
these oversights were promptly corrected.
OTHER MATTERS
The Board of Directors of the Company does not know of any matters for
action by shareholders at the 2003 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 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.
22
APPENDIX I
OLD NATIONAL BANCORP
AUDIT COMMITTEE CHARTER
PURPOSE
The Audit Committee is appointed by the Board of Directors to assist in
monitoring and oversight of:
1. The integrity of the financial statements of the Company;
2. The independent accountant's qualifications and independence;
3. The performance of the Company's internal audit function and independent
accountants; and
4. The compliance by the Company with legal and regulatory requirements.
The Audit Committee shall prepare the report required by the rules of the
Securities and Exchange Commission (SEC) to be included in the Company's annual
proxy statement.
COMMITTEE MEMBERSHIP
The Audit Committee shall consist of no fewer than 3 members. The members of
the Committee shall meet the independence and experience requirements of the New
York Stock Exchange and the rules and regulations of the SEC. At least one
member of the Committee shall be a financial expert as defined by the SEC. Audit
Committee members shall not simultaneously serve on the audit committees of more
than two other public companies. The members of the Committee shall be appointed
by the Board on the recommendation of the Corporate Governance & Nominating
Committee.
MEETINGS
The Audit Committee shall meet as often as it determines, but not less
frequently than quarterly. The Audit Committee shall meet with management, the
internal auditor and the independent accountant in separate executive sessions.
The Audit Committee may request any officer or employee of the Company or the
Company's in-house or outside counsel to attend a meeting of the Committee.
COMMITTEE AUTHORITY AND RESPONSIBILITIES
The Audit Committee shall have the sole authority to appoint or replace the
independent accountant (subject, if applicable, to shareholder ratification).
The Audit Committee shall be directly responsible for the compensation and
oversight of the work of the independent accountant, including resolution of
disagreements between management and the independent accountant regarding
financial reporting for the purpose of preparing or issuing an audit report or
related work. The independent accountant shall report directly to the Audit
Committee.
The Audit Committee shall pre-approve all auditing services and permitted
non-audit services to be performed for the Company by its independent
accountant, subject to the de minimus exceptions for non-audit services
described in the NYSE rules which are approved by the Audit Committee prior to
the completion of the audit. The Audit Committee may form and
23
delegate to subcommittees the authority to grant pre-approvals of audit and
permitted non-audit services, provided those approvals are presented to the
Audit Committee at the next scheduled meeting.
The Audit Committee shall have the authority, as it deems necessary or
appropriate, to retain independent legal counsel, accounting or other advisors.
The Company shall provide for appropriate funding for payment of compensation to
the independent accountant for the purpose of rendering or issuing an audit
report and to any advisors employed by the Audit Committee.
The Audit Committee shall make regular reports to the Board. The Audit
Committee shall review and reassess the adequacy of this Charter annually and
recommend any changes to the Board for approval. The Audit Committee shall
review annually its own performance.
The Audit Committee, to the extent it deems necessary or appropriate, shall:
FINANCIAL STATEMENT AND DISCLOSURE MATTERS
1. Review and discuss with management and the independent accountant the
annual audited financial statements, including disclosures made in
management's discussion and analysis, and recommend to the Board whether
the audited financial statements should be included in the Company's
10-K.
2. Review and discuss with management and the independent accountant the
Company's quarterly financial statements prior to the filing of its
10-Q, including the results of the independent accountant's review.
3. Discuss with management and the independent accountant significant
financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements, including any
significant changes in the Company's selection or application of
accounting principles, any material issues as to the adequacy of the
Company's internal controls and any special steps adopted in light of
internal control deficiencies.
4. Review and discuss quarterly reports from the independent accountants
on:
- All critical accounting policies and practices to be used;
- All alternative treatments of financial information within generally
accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative treatments,
and the treatment preferred by the independent accountant; and
- Other material written communications between the independent
accountant and management, such as any management letter or schedule of
unadjusted differences.
5. Discuss with management the Company's earnings press release, including
the use of "pro-forma" or adjusted non-GAAP information, as well as
financial information and earnings guidance provided to analysts and
rating agencies.
6. Discuss with management and the independent accountant the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements.
7. Discuss with management the Company's major financial risk exposures and
the steps management has taken to monitor and control such exposures,
including the Company's risk assessment and risk management policies.
24
8. Discuss with the independent accountant the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit, including any difficulties encountered in the
course of the audit work, any restrictions on the scope of activities or
access to requested information, and any significant disagreements with
management.
9. Review disclosures made to the Audit Committee by the Company's CEO and
CFO during their certification process for the Form 10-K and 10-Q about
any weaknesses therein and any fraud involving management or other
employees who have a significant role in the Company's internal
controls.
OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT ACCOUNTANT
10. Review and evaluate the lead partner of the independent accountant
team.
11. Obtain and review a report from the independent accountant at least
annually regarding (a) the independent accountant's internal quality
control procedures, (b) any material issues raised by the most recent
internal quality control review, or peer review, of the firm, or by any
inquiry or investigation by governmental or professional authorities
within the preceding five years respecting one or more independent
audits carried out by the firm, (c) any steps taken to deal with any
such issues, and (d) all relationships between the independent
accountant and the Company. Evaluate the qualifications, performance
and independence of the independent accountant, including considering
whether the accountant's quality controls are adequate and the
provision of permitted non-audit services is compatible with
maintaining the accountant's independence, and taking into account the
opinions of management and internal auditors. The Audit Committee shall
present its conclusions with respect to the independent accountant to
the Board.
12. Ensure the rotation of the lead audit partner having primary
responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law.
13. Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent accountant who participated in
any capacity in the audit of the Company.
OVERSIGHT OF THE COMPANY'S INTERNAL AUDIT DEPARTMENT
14. The Company will maintain an internal audit department. The Audit
Committee will review the internal audit function of the Company,
including the independence and authority of its reporting obligations,
proposed audit plans for the coming year, and the coordination of such
plans with the independent accountants.
15. Review the appointment and replacement of the senior internal auditing
executive.
16. Review the significant reports to management prepared by the internal
auditing department and management's responses.
17. Discuss with the independent accountant and management the internal
audit department responsibilities, budget and staffing and any
recommended changes in the planned scope of the internal audit.
25
COMPLIANCE OVERSIGHT RESPONSIBILITIES
18. Obtain reports from management, the Company's senior internal auditing
executive and the independent accountant that the Company and its
subsidiaries are in conformity with applicable legal requirements and
the Company's Code of Business Conduct and Ethics. Review reports and
disclosures of insider and affiliated party transactions. Advise the
Board with respect to the Company's policies and procedures regarding
compliance with applicable laws and regulations and with the Company's
Code of Business Conduct and Ethics.
19. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential,
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.
20. Discuss with management and the independent accountant any
correspondence with regulators or governmental agencies and any
published reports which raise material issues regarding the Company's
financial statements or accounting policies.
21. Discuss with the Company's General Counsel legal matters that may have
a material impact on the financial statements or the Company's
compliance policies.
OVERSIGHT OF THE COMPANY'S LOAN REVIEW DEPARTMENT
22. Review the loan review function of the Company, including the
independence and authority of its reporting, the proposed plans for the
coming year, and the coordination of such plans with the independent
accountants.
23. Review the significant reports to management prepared by the loan
review department and management's responses.
24. Discuss with the chief credit officer and management loan review
department responsibilities and staffing and any recommended changes in
the planned scope of loan reviews.
LIMITATION OF AUDIT COMMITTEE'S ROLE
While the Audit Committee has the responsibilities and powers set forth in
the Charter, it is not the duty of the Audit Committee to plan and conduct
audits or to determine that the Company's financial statements and disclosures
are complete and accurate, and are in accordance with generally accepted
accounting principles and applicable rules and regulations. The Company's
management is responsible for preparing the Company's financial statements and
for maintaining internal control, and the independent accountants are
responsible for auditing the financial statements.
26
OLD NATIONAL BANCORP PROXY NUMBER
420 MAIN STREET
EVANSVILLE, INDIANA 47708 ACCOUNT NUMBER
Dear Shareholder:
We invite you to attend the Old National Bancorp Annual Shareholders' Meeting.
The Meeting will be held on Thursday, April 24, 2003, 10:30 a.m., Central
Daylight Time, at The Centre, 715 Locust Street, Evansville, Indiana. The events
will include an informative presentation about your Company's 2002 financial
performance, consideration of several business matters, and a festive luncheon
in honor of our shareholders.
\/ DETACH R.S.V.P. CARD HERE. \/
------------------------------------------------------------------------------
PLEASE RESPOND BY APRIL 11, 2003
Kindly print your name(s)_____________________________________________
__________________________ Attend meeting only.
__________________________ Attend meeting and luncheon.
Please return R.S.V.P. card with your Proxy in the enclosed envelope.
SIGN AND DATE THIS CARD.
\/ DETACH PROXY CARD HERE \/
--------------------------------------------------------------------------------
2. Ratification of the appointment of PricewaterhouseCoopers LLP, as
independent accountants of OLD NATIONAL BANCORP and its subsidiaries for
the fiscal year ending December 31, 2003.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. The Proxies are hereby granted authority to vote, in their discretion, upon
such other business as may properly come before the April 24, 2003 Annual
Meeting and any adjournments or 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 AND 2. ALL EARLIER
PROXIES ARE HEREBY REVOKED.
----------------------------------
Signature(s) Date
----------------------------------
Signature(s) 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.
OLD NATIONAL BANCORP
420 MAIN STREET
EVANSVILLE, INDIANA 47708 THERE ARE TWO WAYS TO SUBMIT YOUR PROXY.
--------------------------------------------------------------------------------
VOTE BY INTERNET http://www.oldnational.com/
Go to the web site address listed above to submit 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 Daylight Time) on April 23, 2003.
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 \/
--------------------------------------------------------------------------------
OLD NATIONAL BANCORP
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD ON APRIL 24, 2003, AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF.
The undersigned hereby appoints Stephan E. Weitzel and Joseph T. Theby, III, and
each of them singly, as Proxies of the undersigned, each with power to appoint
his substitute, and hereby authorizes each of them to represent and to vote, as
indicated herein, all the shares of common stock of OLD NATIONAL BANCORP held of
record by the undersigned on February 18, 2003, and which the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held on April 24,
2003, and all adjournments or postponements thereof, on the following matters.
1. The election of Directors in Class I as indicated below to serve for a
three-year term and until the election and qualification of their
respective successors. (Mark only one box below.)
01 - Larry E. Dunigan, 02 - Douglas D. French, 03 - Phelps L. Lambert,
04 - Louis L. Mervis, 05 - Marjorie Z. Soyugenc
[ ] FOR ALL NOMINEES LISTED ABOVE (except as indicated below)
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES
Instruction: To withhold authority to vote for any individual nominee,
print the number(s) of the nominee(s) on the line provided._______________