o | Preliminary Proxy Statement | ||||
o | Confidential, for use of the Commission Staff Only (as permitted by Rule 14a-6(e) (2)) | ||||
x | Definitive Proxy Statement | ||||
o | Definitive Additional Materials | ||||
o | Soliciting Material under Sec.240.14a-12 |
x | No fee required | ||||
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Voting Authority | Investment Authority | Total Beneficial Ownership | ||||||||||||||||||||||||||||||
Name and Address | Sole | Shared | None | Sole | Shared | None | Amount | % of Class | ||||||||||||||||||||||||
1st Source Bank (1)(2) 100 North Michigan Street South Bend, IN 46601 | 673,897 | 5,198,773 | 3,587,804 | 601,569 | 5,827,392 | 1,971,121 | 6,428,961 | 25.16 | % | |||||||||||||||||||||||
Christopher J. Murphy III (2)(3) Carmen Murphy (2)(4) 100 North Michigan Street South Bend, IN 46601 | 1,191,080 | — | — | 1,191,080 | 46,806 | — | 4,363,116 | 17.07 | % | |||||||||||||||||||||||
654,272 | — | — | 654,272 | 2,517,764 | 4,363,116 | 17.07 | % | |||||||||||||||||||||||||
O.C. Carmichael III (2)(5) 3212 W End Avenue Suite 500 Nashville, TN 37203 | 63,372 | — | — | 63,372 | 1,448,118 | — | 1,511,490 | 5.91 | % | |||||||||||||||||||||||
Stanley C. Carmichael (2)(6) 1510 71st St. Fennville, MI 49408 | 36,730 | — | — | 36,730 | 647,760 | — | 684,490 | 2.68 | % | |||||||||||||||||||||||
Ernistine C. Nickle (2)(6) 560 Sea Oak Drive Vero Beach, FL 32963 | 99,446 | — | — | 99,446 | 635,884 | — | 735,330 | 2.88 | % | |||||||||||||||||||||||
Dimensional Fund Advisors LP (7) Palisades West, Building One, 6300 Bee Cave Road Austin, TX, 78746 | 1,637,883 | — | — | 1,674,523 | — | — | 1,674,523 | 6.55 | % | |||||||||||||||||||||||
BlackRock, Inc. (8) 55 East 52nd Street New York, NY 10055 | 1,271,453 | — | — | 1,310,745 | — | — | 1,310,745 | 5.13 | % |
Ms. Murphy | 2,470,958 | ||||
Mr. O.C. Carmichael III | 1,449,161 | ||||
Ms. Nickle | 630,884 | ||||
Mr. S.C. Carmichael | 647,760 | ||||
Total | 5,198,763 |
DIRECTOR NOMINEES | |||||||||||
Terms Expiring in April, 2025 | |||||||||||
Name: Issac P. Torres Age: 54 Principal Occupation(1): President and Chief Executive Officer, InterCambio Express, Inc. (Internet-based money transfer service) Year In Which Directorship Assumed: N/A Beneficial Ownership of Equity Securities Common Stock: 300 % of Class: « | |||||||||||
● | Over 22 years of experience in an Internet-based industry as founder, President and Chief Executive Officer of InterCambio Express, Inc. InterCambio Express has its USA headquarters in Elkhart, Indiana and a Mexican subsidiary located in Puebla, Mexico. Prior to founding InterCambio Express, Inc., Mr. Torres served as Chief Financial Officer of the German transnational company Hoechst AG (now Sanofi-Aventis) and as a senior auditor for Price Waterhouse Coopers. Mr. Torres contributes long-term perspective, current knowledge and extensive contacts in the state in which the Company is located as well as internationally. | ||||||||||
● | Expertise in Internet-based industries and international payments systems as well as extensive skills in finance, accounting and international business. | ||||||||||
● | Attained CAMS (Certified Anti-Money Laundering Specialist) certification. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | Active in the community serving on boards including the Community Foundation of Elkhart County, Women’s Care Center, RISE-Moxie, a Committee Member of the South Bend & Elkhart Regional Partnership - Diversity & Inclusion Committee and the Indiana University Foundation Board. | ||||||||||
● | Bachelor’s degree in Accounting from The National Autonomous University of Mexico - UNAM (Universidad Nacional Autónoma de Mexico) and an M.B.A. from Indiana University. | ||||||||||
Terms Expiring in April, 2022 (April, 2025 if reelected) | |||||||||||
Name: John F. Affleck-Graves Age: 70 Principal Occupation(1): Chaired Professor of Finance, University of Notre Dame; prior thereto, Executive Vice President and Chief Financial Officer, University of Notre Dame; former director, Hi-Crush, Inc. Year In Which Directorship Assumed: 2019 Beneficial Ownership of Equity Securities Common Stock: 8,971 % of Class: « | |||||||||||
● | Mr. Affleck-Graves served as Executive Vice President and Chief Financial Officer of the University of Notre Dame from 2004 to June 2019. Prior to that he had served as Vice President and Associate Provost for the University and served on the Notre Dame faculty from 1986 to 2000 (the final three years as Chairman of the Department of Finance and Business Economics). He spent one year at Florida State University as the Patty Hill Eminent Scholar in Finance and returned to Notre Dame in 2001. | ||||||||||
● | Also serves as a director of Aunalytics, Inc., a provider of managed data center, data analysis, cloud and other technology related services. | ||||||||||
● | Author of over 50 finance research articles including several in the leading finance and accounting academic journals. | ||||||||||
● | Contributes expertise in financial analysis, statistical analysis and Economic Value Added analysis. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | Former chair of the Regional Development Authority for the north central region of Indiana. | ||||||||||
● | Bachelor’s and Master’s degrees in finance and Doctoral degree in mathematical statistics from the University of Cape Town. | ||||||||||
Name: Daniel B. Fitzpatrick Age: 64 Principal Occupation(1): Chairman and Chief Executive Officer, Quality Dining, Inc. (quick service and casual dining restaurant operator) Year In Which Directorship Assumed: 1995 Beneficial Ownership of Equity Securities Common Stock: 44,092 % of Class: « | |||||||||||
● | 40 years of business experience as the founder, Chairman and Chief Executive Officer of Quality Dining, Inc. As head of a locally headquartered, multi-concept restaurant company with operations located in four states, Mr. Fitzpatrick contributes long-term perspective, current sales, marketing and operations knowledge, and extensive contacts in communities in which the Company does business. | ||||||||||
● | Expertise in the restaurant industry and general knowledge of food services retailing. Previous public company experience. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | Serves as a member and Past Chairman of the Holy Cross College Board of Trustees and is a board member for Women’s Care Center Foundation, both in South Bend. Mr. Fitzpatrick has served with nearly two dozen other community organizations. | ||||||||||
● | B.A. in Business Administration from the University of Toledo. | ||||||||||
Name: Christopher J. Murphy IV(3) Age: 52 Principal Occupation(1): Owner and Chief Executive Officer, Catharsis Productions, LLC (training programs) Year In Which Directorship Assumed: 2011 Beneficial Ownership of Equity Securities Common Stock: 145,538 % of Class: « | |||||||||||
● | 22 years of business experience as co-founder, owner and Chief Executive Officer (previously Executive Director) of Catharsis Productions, LLC. | ||||||||||
● | Contributes general business knowledge, long-term perspective and expertise in entrepreneurship, government contracting and creative marketing and development expertise. | ||||||||||
● | Although not eligible to serve on the Audit Committee, meets the criteria to be an audit committee financial expert under SEC guidelines. | ||||||||||
● | Served as co-chairperson of MEN (Men Endorsing Non-Violence) Illinois state subcommittee and serves as board member for Interaction (diversity and inclusion non-profit organization.) | ||||||||||
● | B.A. in Liberal Studies, Communications and Theatre and an M.B.A. from the University of Notre Dame. | ||||||||||
OTHER INCUMBENT DIRECTORS | |||||||||||
Terms Expiring in April, 2023 | |||||||||||
Name: Vinod M. Khilnani Age: 69 Principal Occupation(1): Chairman of the Board, Chair of the Nominating, Governance and Corporate Responsibility and Executive Committees and member of the Compensation and Human Capital Committee, Materion Corporation; Director, Chairman of the Human Resources & Compensation Committee and member of the Audit & Finance Committee, Esco Technologies, Inc.; former director, Gibraltar Industries, Inc. Year In Which Directorship Assumed: 2013 Beneficial Ownership of Equity Securities Common Stock: 12,216 % of Class: « | |||||||||||
● | 42 years of business experience, including 13 years as Executive Chairman, Chairman, President, Chief Executive Officer and Chief Financial Officer of CTS Corporation, headquartered and operating in a community the Company serves, as well as 18 years in various senior executive finance and global leadership positions with Cummins, Inc. | ||||||||||
● | Expertise in global operations as well as extensive skills in finance, accounting, mergers and acquisitions, international business and manufacturing, corporate strategy and corporate governance. Previous public company experience. Contributes long-term perspective in all of these areas. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | Certified Public Accountant (inactive) and Certified Management Accountant. | ||||||||||
● | B.A. in Business Administration from Delhi University and an M.B.A. in Finance from the University of New York at Albany. | ||||||||||
Name: Christopher J. Murphy III(4) Age: 75 Principal Occupation(1): Chairman of the Board, President and Chief Executive Officer, 1st Source and Chairman of the Board and Chief Executive Officer, 1st Source Bank Year In Which Directorship Assumed: 1972 Beneficial Ownership of Equity Securities Common Stock: 4,363,116 % of Class: 17.07% | |||||||||||
● | Over 49 years of banking and business experience, including serving as a Director and/or President and Chief Executive Officer of both 1st Source Corporation or 1st Source Bank for 49 years. Mr. Murphy contributes long-term perspective, current knowledge, and extensive contacts in all communities in which the Company does business. Prior to 1st Source, Mr. Murphy worked at Citibank, and while in college, for the Office of the Comptroller of the Currency, U.S. Department of the Treasury. | ||||||||||
● | Extensive knowledge of 1st Source and 1st Source Bank and general knowledge in the finance/banking industry, investments, insurance, venture capital, and real estate investments. | ||||||||||
● | Serves as a director of Aunalytics, Inc., representing 1st Source’s investment in this provider of managed data center, data analysis, cloud and other technology related services. | ||||||||||
● | Serves on numerous boards including those of the Federal Reserve Bank of Chicago, the Medical Education Foundation (serves on the citizen’s advisory board of Indiana University Medical School at Notre Dame), the Indiana State Chamber of Commerce (emeritus), and the Indiana Commission for Higher Education. Previously served on the Board and Audit Committee of Beacon Health System or its predecessor. Previously served as Chairman of the Board of Regents of the Indiana Academy, on the board of the Independent Colleges of Indiana, on the Community Depository Institutions Advisory Council for the Seventh Federal Reserve District and in Washington, D.C. and on public and private company boards. | ||||||||||
● | B.A. in Government from the University of Notre Dame, a J.D. from the University of Virginia Law School and an M.B.A. from the Harvard University School of Business. |
Name: Timothy K. Ozark Age: 72 Principal Occupation(1): Chairman and Chief Executive Officer, Aim Financial Corporation (mezzanine funding and leasing) and from 2012 to January 2017, Chairman, CFWF, Inc. (seafood processor and commercial fishing company) Year In Which Directorship Assumed: 1999 Beneficial Ownership of Equity Securities Common Stock: 38,969 % of Class: « | |||||||||||
● | 42 years of financial experience, including 30 years as founder, Chairman and Chief Executive Officer of Aim Financial Corporation, a mezzanine lender to privately held companies. Mr. Ozark also is President and CEO of TKO Finance Corporation, a lender to financial services and manufacturing companies. Mr. Ozark is also Lead Director of White Lodging Corporation, one of America’s most experienced and most strategic hotel developers. From 1980 to 1983, Mr. Ozark served as Executive Vice President of Great American Management Services, Inc. a wholly owned subsidiary of American Financial Corporation of Cincinnati, Ohio which specialized in equipment leasing and lending. From 1984 to 1992, Mr. Ozark served as CEO and President of Meridian Leasing Corporation, one of North America’s largest privately held leasing companies with revenues in excess of $500 million. | ||||||||||
● | Expertise in mezzanine funding, lending-leasing and general knowledge of business, finance, and real estate investing. Contributes long-term perspective in all of these areas. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | Serves as a member of the Visiting Committee to the Division of Biological Sciences and the Pritzker School of Medicine for The University of Chicago and on the board of directors for a number of privately held companies. | ||||||||||
● | B.S. in Business Administration from the University of Minnesota and an M.B.A. from St. Cloud State University. | ||||||||||
● | Served as an officer in the United States Marine Corps from 1968-1974. | ||||||||||
Name: Todd F. Schurz Age: 61 Principal Occupation(1): President and Chief Executive Officer, Schurz Communications, Inc. (communications, broadband and cloud services) Year In Which Directorship Assumed: 2020 Beneficial Ownership of Equity Securities Common Stock: 3,672 % of Class: « | |||||||||||
● | 31 years of financial experience, including 14 years as President and Chief Executive Officer and 3 years as President and Chief Operating Officer of Schurz Communications, Inc. (SCI), a diversified, privately-owned communications company, with five broadband companies and managed cloud services companies. SCI has a presence in 13 states, including Indiana and Michigan, as well as Great Britain and Romania. Prior to joining SCI, Mr. Schurz was President and Editor of Associated Desert Shoppers in Palm Desert, California from 1991 to 1995. From 1995 to 2000, he was President, Editor and Publisher of the South Bend Tribune. He then served as SCI’s Vice President of Technology from 2000 to 2005 and as President and General Manager of WSBT Television from 2002 to 2005 before becoming President and Chief Operating Officer of SCI in 2005. | ||||||||||
● | Serves as lead independent director and Vice Chair of Herschend Enterprises, a themed entertainment company. Mr. Schurz is also an independent board advisor to EBSCO Industries and serves on the University of Notre Dame College of Arts & Letters Advisory Council. | ||||||||||
● | Previously served on the boards of Mutual Insurance Company Limited, News Media Alliance, American Press Institute (API), and the CBS Television Network Affiliates Association. Mr. Schurz is also a former Chair of the Memorial Hospital Board, Beacon Health Foundation, the Chamber of Commerce of St. Joseph County, Hoosier State Press Association Foundation, the Poynter Institute’s National Advisory Board, and the coordinating committee for the Regional Approach to Progress. | ||||||||||
● | Expertise in media, marketing and communications and general knowledge of business and finance. Contributes long-term perspective in all of these areas. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | B.A. in History and Economics from Brown University and an M.B.A. from the Wharton School at the University of Pennsylvania. |
Terms Expiring in April, 2024 | |||||||||||
Name: Melody Birmingham Age: 50 Principal Occupation(1): Senior Vice President and Chief Administrative Officer, Duke Energy (electric distribution); prior thereto, Senior Vice President and Chief Procurement Officer, Duke Energy; President, Duke Energy Indiana (electric utility) and Senior Vice President, Midwest Delivery Operations, Duke Energy Year In Which Directorship Assumed: 2018 Beneficial Ownership of Equity Securities Common Stock: 5,378 % of Class: « | |||||||||||
● | 27 years of leadership and managerial experience in the electric and automotive manufacturing industries. Ms. Birmingham contributes long-term perspective, current knowledge and extensive contacts in the state in which the Company is located. | ||||||||||
● | Expertise in managing construction, maintenance, operations, engineering, resource, supply chain, project management, information technology and enterprise security as well as managing regulatory affairs, government relations and community affairs. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | Had previously served on the board of directors of the American Association of Blacks in Energy and on the Financial Research Institute advisory board, Robert J. Trulaske, Sr. College of Business, University of Missouri, Indiana Electric Association, the Indiana Chamber of Commerce, Special Olympics Indiana, Central Indiana Corporate Partnership and United Way of Indiana. | ||||||||||
● | B.S. in Organizational Leadership and Supervision from Purdue University, an M.B.A. from Strayer University, an Honorary Doctorate in Humane Letters from Saint Mary of the Woods College and successful completion of the Advanced Management Program at Harvard University. | ||||||||||
Name: Tracy D. Graham Age: 48 Principal Occupation(1): Managing Principal of Graham-Allen Partners, LLC, a private investment company focused on building enterprise data and technology businesses, and the Chief Executive Officer of Aunalytics, Inc, (a provider of enterprise cloud, analytics, and other technology related services); Director and Chairman of the Board of Directors, LCI Industries Year In Which Directorship Assumed: 2021 Beneficial Ownership of Equity Securities Common Stock: 8,315 % of Class: « | |||||||||||
● | 26 years of experience in the information technology industry as entrepreneur and executive. Mr. Graham is the Founder and Managing Principal of Graham Allen Partners, a private equity firm that specializes in investing in, and building, technology and technology-enabled companies. He leverages his long history of successfully acquiring and operating businesses to provide strategic and operational support to a growing portfolio of small and middle-market companies. He is currently focused on leveraging analytics and artificial intelligence to help companies evolve via digital transformation. Prior to Graham Allen Partners, Mr. Graham co-founded GramTel, Inc. (a managed data center provider). Prior to founding GramTel, he founded Internet Services Management Group, where he led the company to become the second largest privately held Internet service provider in the United States (acquiring and integrating 23 companies). Mr. Graham contributes long-term perspective, current knowledge and extensive contacts in the state in which the Company is located. | ||||||||||
● | Unique expertise in enterprise technology, cyber security, cloud, data center and Internet services and data analytics and artificial intelligence. | ||||||||||
● | Member of 1st Source Bank Board of Directors since 2012. Member of 1st Source Corporation Board of Directors from 2012 to 2014. | ||||||||||
● | Currently serves on the boards of Lippert, the Horton Group, Beacon Health System, Davenport University, and the Regional Development Authority of Northern Indiana’s Diversity and Inclusion Committee and as a member of the Board of Trustees of the University of Notre Dame. | ||||||||||
● | Bachelor of Arts in Sociology from the University of Notre Dame and attended the Indiana University Graduate School of Education. |
Name: Mark D. Schwabero Age: 69 Principal Occupation(1): Retired Chairman, Chief Executive Officer and Director, Brunswick Corporation (2018); prior thereto, President and Chief Operating Officer, Brunswick Corporation; Director, Methode Electronics, Inc. Year In Which Directorship Assumed: 2004 Beneficial Ownership of Equity Securities Common Stock: 16,931 % of Class: « | |||||||||||
● | Nearly 43 years of total experience in the automotive, marine and commercial vehicle/manufacturing industries, the last 33 of which as a senior executive. Mr. Schwabero had been with Brunswick Corporation for the 15 years preceding his retirement in 2018. He became Chairman and Chief Executive Officer in February 2016 after having served as President and Chief Operating Officer of Brunswick Corporation and prior thereto as President of Mercury Marine. | ||||||||||
● | Detailed knowledge of the transportation, recreational and marine industries as well as long-term perspective in manufacturing and general management expertise. Public company experience. | ||||||||||
● | Named by CEO Today Magazine as one of the top 100 CEOs in America for U.S. based companies for 2018. | ||||||||||
● | Qualifies as an audit committee financial expert under SEC guidelines. | ||||||||||
● | Former director of National Exchange Bank & Trust. | ||||||||||
● | Serves as Lead Director. | ||||||||||
● | Serves on the Advisory Committee of The Ohio State University Center for Automotive Research. | ||||||||||
● | Past Chairman of the National Marine Manufacturers Association. | ||||||||||
● | B.S. and M.S. in Industrial and Systems Engineering from The Ohio State University. | ||||||||||
Name: Ronda Shrewsbury Age: 56 Principal Occupation(1): President and Chief Executive Officer, RealAmerica, LLC (real estate development and property management) Year In Which Directorship Assumed: 2021 Beneficial Ownership of Equity Securities Common Stock: 1,739 % of Class: « | |||||||||||
● | Over 30 years of experience in multifamily, commercial, land and office development serving as President of RealAmerica Companies for 27 years. As the sole owner and founder, Ms. Shrewsbury provides strategic direction and vision for four Women Business Enterprise-certified, vertically integrated companies. She holds an active Indiana Principal Brokers License and seeks opportunities to live out her passion of providing quality, supportive housing. Ms. Shrewsbury contributes long-term perspective, current knowledge and extensive contacts in the state in which the Company is located. | ||||||||||
● | Extensive knowledge of real estate development, design, construction, and management of affordable, market-rate, commercial, senior living, and self-storage properties. Expertise in tax credit financing, historic tax credits, HUD and other financing products for new construction, adaptive reuse, historic rehab and preservation developments. | ||||||||||
● | Founder of Legacy25, a non-profit organization dedicated to providing support and services for affordable housing communities. Serves as Past President of the Indiana Affordable Housing Council and Chair of the Governmental Affairs Committee. | ||||||||||
● | Serves on the Executive Board of the Indianapolis Zoo, Near North Development Corporation, Young Presidents Organization, and other philanthropic boards. Her past service includes multiple leadership roles in the YPO including as Chapter Chair in Indiana and Illinois, Central U.S. Regional Board and International Forum Committee. | ||||||||||
● | B.S. in Finance/Real Estate from Indiana University School of Business. |
Committee | Functions | 2021 Meetings | |||||||||
Executive(1) | ● | Act for the Board of Directors between meetings subject to certain statutory limitations. | — | ||||||||
● | Give guidance to management regarding actions taken as part of its strategic operating or budget plans. | ||||||||||
● | Provide guidance on acquisitions, divestures or other transactions. | ||||||||||
Governance and Nominating(1)(2) | ● | Provide oversight for effective governance of the Company. | 4 | ||||||||
● | Identify and monitor the appropriate structure of the Board. | ||||||||||
● | Select Board members for committee assignments. | ||||||||||
● | Identify, evaluate, recruit and select qualified candidates for election, re-election or appointment to the Board. | ||||||||||
● | See also “Governance and Nominating Committee Information” below. | ||||||||||
Audit(1)(2) | ● | Select the Company’s independent registered public accounting firm. | 6 | ||||||||
● | Review the scope and results of the audits by the internal audit staff and the independent registered public accounting firm. | ||||||||||
● | Review the adequacy of the accounting and financial controls and the risk management process and present the results to the Board of Directors with respect to accounting practices and internal procedures. | ||||||||||
● | Make recommendations for improvements in internal procedures. | ||||||||||
● | Review and oversight of the Company’s legal and compliance risks, including adherence to ethical standards and bank regulatory requirements as well as other operational risk areas. | ||||||||||
● | See also “Report of the Audit Committee” below. | ||||||||||
Executive Compensation and Human Resources(1)(2) | ● | Determine compensation for executive management, review performance of the Chief Executive Officer and oversee the Company’s stock and other incentive compensation plans. | 4 | ||||||||
● | Oversee and approve establishment and administration of wage and benefit policies for the Company and its subsidiaries. | ||||||||||
● | Review human resources guidelines, policies and procedures. | ||||||||||
● | See also the “Executive Compensation and Human Resources Committee Report” below. | ||||||||||
Loan and Funds Management | ● | Oversee and approve establishment and administration of the credit policy for the Bank. | 12 | ||||||||
● | Review Bank lending activities, including approvals of loans to new or existing customers of total commitments in excess of stated amounts. | ||||||||||
● | Oversee and approve quarterly reviews of the adequacy of the allowance for loan and lease losses and loan concentrations as compared to established limits. | ||||||||||
● | Review the Bank’s Funds Management Division in its investment activities, relationships with securities dealers, relationships with other depository institutions, administration of 1st Source’s asset/liability management and liquidity functions and other similar activities. |
Trust and Investment | ● | Exercise general supervision over the fiduciary activities of the Wealth Advisory Services Group and the Retirement Plan Services Division. | 4 | ||||||||
● | Assign the administration of those fiduciary powers to such officers, employees and committees as the Committee deems appropriate. | ||||||||||
● | Review the actions of individuals or committees used by the Bank in the exercise of the fiduciary powers and services offered to clients. | ||||||||||
● | Oversee and approve establishment and administration of appropriate policies, practices and controls to promote high quality fiduciary administration. | ||||||||||
● | Oversee appropriate policies and procedures to ensure the Bank makes appropriate investments. | ||||||||||
(1)The charter of the committee is available at www.1stsource.com. | |||||||||||
(2)The Committee is comprised entirely of independent directors. |
Total Number of Directors: | 11 | |||||||||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
Part I: Gender Identity | ||||||||||||||
Directors | 2 | 9 | 0 | 0 | ||||||||||
Part II: Demographic Background | ||||||||||||||
African American or Black | 1 | 1 | 0 | 0 | ||||||||||
Alaskan Native or Native American | 0 | 0 | 0 | 0 | ||||||||||
Asian | 0 | 1 | 0 | 0 | ||||||||||
Hispanic or Latinx | 0 | 0 | 0 | 0 | ||||||||||
Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | ||||||||||
White | 1 | 7 | 0 | 0 | ||||||||||
Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | ||||||||||
LGBTQ+ | 0 | |||||||||||||
Did Not Disclose Demographic Background | 0 |
Compensation Component | Frequency | Criteria | Form(s) of Payment | Restrictions | Term of Holding | ||||||||||||
Salary | Annual | Qualifications, responsibilities and performance | Cash | None | None | ||||||||||||
Executive Incentive Plan (EIP) | Annual | Weighted corporate, group, division, unit and individual performance goals | Cash and book value stock | None as to cash component. Book value stock subject to forfeiture over a five-year period based on employee remaining with the Company and the Company meeting EPS growth or ROA criteria | Book value stock generally required to be held until retirement. Limited exceptions for up to 50% of stock beginning seven years following lapse of forfeiture period (eight to twelve years from date of grant) but subject to minimum stock ownership requirements | ||||||||||||
Long-Term Executive Incentive Plan | Every three years | Weighted corporate financial goals for the third year of the three-year planning period and average of individual annual awards for the three-year planning period | Cash and market value stock | None as to cash component. Market value stock subject to forfeiture over a five-year period based on employee remaining with the Company and the Company remaining profitable | Subject to NEO accumulating required minimum stock holdings | ||||||||||||
Strategic Deployment Incentive Plan | Annual | Company net income and Committee’s determination of success of strategic initiatives embedded in Company’s long-term plans using specific operating and financial metrics | Cash and/or stock as the Committee determines | None | Subject to NEO accumulating required minimum stock holdings | ||||||||||||
1982 Restricted Stock Award Plan | Discretionary | Discretionary | Market value stock | Market value stock subject to forfeiture over a zero to ten-year period based on employee remaining with the Company and in some cases the attainment of individual, group or Company goals | Subject to NEO accumulating required minimum stock holdings |
Mr. Murphy | $449,550 | Mr. Griffith | $132,850 | |||||||||||
Ms. Short | $133,100 | Mr. Buhr | $114,300 | |||||||||||
Mr. Bauer | $53,900 |
Weighting | Minimum | Target | Maximum | |||||||||||
Return on assets | 20% | 88% of Target | Target | 112% of Target | ||||||||||
Expense to revenue ratio | 10% | 104% of Target | Target | 96% of Target | ||||||||||
Average total assets | 20% | 95% of Target | Target | 105% of Target | ||||||||||
Net charge offs and other credit-related losses to average loans, leases, repossessed assets and other real estate | 15% | 200% of Target | Target | 75% of Target | ||||||||||
Period-end nonperforming assets | 10% | 200% of Target | Target | 77% of Target | ||||||||||
Growth in net new primary checking accounts | 25% | 75% of Target | Target | 150% of Target |
Mr. Murphy | 100 | % | Mr. Griffith | 90 | % | |||||||||
Ms. Short | 98 | % | Mr. Buhr | 90 | % | |||||||||
Mr. Bauer | 79 | % |
Minimum | Target | Maximum | |||||||||
Mr. Murphy | 0% | 0.26% | 0.51% | ||||||||
Ms. Short | 0% | 0.13% | 0.26% | ||||||||
Mr. Griffith | 0% | 0.09% | 0.18% | ||||||||
Mr. Buhr | 0% | 0.09% | 0.18% |
Name and Principal Position | Year | Salary($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation($) | All Other Compensation($)(3) | Total(8) | |||||||||||||||||||||||||||||
Christopher J. Murphy III | 2021 | $808,269 | $235,254 | $827,550 | $139,138 | $2,010,211 | |||||||||||||||||||||||||||||
Chairman of the Board, President and | 2020 | 822,461 | 888,361 | 487,750 | 122,754 | 2,321,326 | |||||||||||||||||||||||||||||
Chief Executive Officer | 2019 | 770,942 | 235,258 | 636,109 | 126,843 | 1,769,152 | |||||||||||||||||||||||||||||
Andrea G. Short | 2021 | 385,385 | 71,502 | 327,800 | 103,558 | 888,245 | |||||||||||||||||||||||||||||
President, 1st Source Bank | 2020 | 363,908 | 581,897 | 201,870 | 48,859 | 1,196,534 | |||||||||||||||||||||||||||||
2019 | 333,077 | 65,169 | 207,007 | 40,357 | 645,610 | ||||||||||||||||||||||||||||||
John B. Griffith | 2021 | 383,462 | 73,353 | 259,877 | 42,974 | 759,666 | |||||||||||||||||||||||||||||
Executive Vice President, Chief Administrative | 2020 | 387,500 | 188,981 | 155,671 | 43,185 | 775,337 | |||||||||||||||||||||||||||||
Officer, General Counsel and Secretary | 2019 | 369,808 | 58,371 | 168,980 | 40,605 | 637,764 | |||||||||||||||||||||||||||||
Jeffrey L. Buhr | 2021 | 342,692 | 55,329 | 241,100 | 38,759 | 677,880 | |||||||||||||||||||||||||||||
Executive Vice President and Chief Credit | 2020 | 340,385 | 172,547 | 144,900 | 38,910 | 696,742 | |||||||||||||||||||||||||||||
Officer, 1st Source Bank | 2019 | 316,462 | 56,213 | 162,509 | 36,417 | 571,601 | |||||||||||||||||||||||||||||
Brett A. Bauer(7) | 2021 | 226,154 | 252,019 | 53,900 | 30,488 | 562,561 | |||||||||||||||||||||||||||||
Senior Vice President, Treasurer and | |||||||||||||||||||||||||||||||||||
Chief Financial Officer | |||||||||||||||||||||||||||||||||||
(1) | 2020 totals are more than year-end base salary as they include 27 pay periods instead of the normal 26. | ||||||||||||||||||||||||||||||||||
(2) | Amounts included in Stock Awards represent the aggregate grant date fair value of all awards computed in accordance with FASB ASC Topic 718 granted during the year. These amounts generally relate to the prior year’s performance and are subject to forfeiture over the succeeding five (5) years. The 2020 amounts also include the stock awards included in the 2019 long-term EIP plan awards. The 2019 amounts include 10 shares of stock awarded in early 2019 to all employees who were employed by the Company on December 31, 2017, and remained employed with the Company through December 31, 2018. |
(3) | Amounts included in All Other Compensation for the most recent fiscal year are as follows: | ||||||||||||||||||||||||||||||||||||||||||||||
Company Contributions to Defined Contribution Retirement Plans | Dividends on Stock Awards | Directors’ Fees | Perquisites(4)(5) | Value of Life Insurance Benefits | Other | Total | |||||||||||||||||||||||||||||||||||||||||
Mr. Murphy | $24,388 | $44,846 | $49,816 | $12,981 | $7,107 | $ | — | $139,138 | |||||||||||||||||||||||||||||||||||||||
Ms. Short(6) | 24,388 | 25,742 | 49,816 | « | 3,612 | — | 103,558 | ||||||||||||||||||||||||||||||||||||||||
Mr. Griffith | 24,388 | 10,841 | — | « | 7,745 | — | 42,974 | ||||||||||||||||||||||||||||||||||||||||
Mr. Buhr | 24,388 | 9,315 | — | « | 5,056 | — | 38,759 | ||||||||||||||||||||||||||||||||||||||||
Mr. Bauer | 21,226 | 7,979 | — | « | 1,283 | — | 30,488 | ||||||||||||||||||||||||||||||||||||||||
« | Not included - total of perquisites and benefits is less than $10,000 | ||||||||||||||||||||||||||||||||||||||||||||||
(4) | Mr. Murphy’s perquisites included business club dues and personal usage of the company plane. These are values at the incremental cost to the Company. For personal use of the company plane, the incremental cost is the SIFL (Standard Industrial Fare Level) cost. | ||||||||||||||||||||||||||||||||||||||||||||||
(5) | Mr. Murphy reimbursed the Company $1,000 in 2021 and 2020 and $5,000 in 2019 for miscellaneous incalculable personal benefits. This amount has not been deducted in computing the disclosable perquisites above. | ||||||||||||||||||||||||||||||||||||||||||||||
(6) | Ms. Short serves on the 1st Source Bank Board of Directors and receives the fees shown for her services. | ||||||||||||||||||||||||||||||||||||||||||||||
(7) | Mr. Bauer was promoted to Treasurer and Chief Financial Officer effective July 22, 2021. | ||||||||||||||||||||||||||||||||||||||||||||||
(8) | There were no bonus awards, option awards or changes in pension value and non-qualified deferred compensation earnings for the named executive officers in 2021, 2020 or 2019. |
Estimated Future Payouts Under Equity Incentive Plan | ||||||||||||||||||||||||||||||||||||||||||||
Book Value Awards (#Shares) | Market Value Awards (#Shares) | |||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold | Target | Maximum | Grant Date Fair Value of Stock Awards | Grant Date | Threshold | Target | Maximum | Grant Date Fair Value of Stock Awards | ||||||||||||||||||||||||||||||||||
Christopher J. Murphy III | 2/12/21(1) | — | 6,735 | — | $235,254 | — | — | — | $ | — | ||||||||||||||||||||||||||||||||||
Andrea G. Short | 2/12/21(1) | — | 2,047 | — | 71,502 | — | — | — | — | |||||||||||||||||||||||||||||||||||
— | — | — | — | |||||||||||||||||||||||||||||||||||||||||
John B. Griffith | 2/12/21(1) | — | 2,100 | — | 73,353 | — | — | — | — | |||||||||||||||||||||||||||||||||||
Jeffrey L. Buhr | 2/12/21(1) | — | 1,584 | — | 55,329 | — | — | — | — | |||||||||||||||||||||||||||||||||||
Brett A. Bauer | 2/12/21(1) | — | 732 | — | 25,569 | 8/3/21(2) | — | 5,000 | — | 226,450 | ||||||||||||||||||||||||||||||||||
Note: There were no non-equity incentive plan awards with future payouts made during 2021. Also, there were no other stock awards or option awards made during 2021. | ||||||||||||||||||||||||||||||||||||||||||||
(1) | Annual Executive Incentive Plan award for 2020 subject to forfeiture over a five-year period based on the executive remaining with the Company and the Company achieving annual financial performance hurdles as discussed above under “Annual Incentive Awards Under the EIP.” | |||||||||||||||||||||||||||||||||||||||||||
(2) | Restricted stock award subject to forfeiture over a five-year period based on the executive remaining with the Company. |
Outstanding Equity Awards At Fiscal Year-End 2021 | ||||||||||||||||||||||||||
Stock Awards(4) | ||||||||||||||||||||||||||
Name | Number of Shares of Stock That Have Not Vested(1)(2) | Market Value of Shares of Stock That Have Not Vested(1) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested(1)(2) | Equity Incentive Plan Awards: Payout or Market Value of Unearned Shares That Have Not Vested(1)(3) | ||||||||||||||||||||||
Christopher J. Murphy III | ||||||||||||||||||||||||||
Book Value Shares | 23,893 | $899,333 | ||||||||||||||||||||||||
Market Value Shares | 11,838 | $587,165 | ||||||||||||||||||||||||
Andrea G. Short | ||||||||||||||||||||||||||
Book Value Shares | 6,488 | 244,208 | ||||||||||||||||||||||||
Market Value Shares | 13,520 | 670,592 | ||||||||||||||||||||||||
John B. Griffith | ||||||||||||||||||||||||||
Book Value Shares | 6,299 | 237,094 | ||||||||||||||||||||||||
Market Value Shares | 2,464 | 122,214 | ||||||||||||||||||||||||
Jeffrey L. Buhr | ||||||||||||||||||||||||||
Book Value Shares | 5,359 | 201,713 | ||||||||||||||||||||||||
Market Value Shares | 2,107 | 104,507 | ||||||||||||||||||||||||
Brett A. Bauer | ||||||||||||||||||||||||||
Book Value Shares | 2,428 | 91,390 | ||||||||||||||||||||||||
Market Value Shares | 5,425 | 269,080 | ||||||||||||||||||||||||
(1) | Shares vested for purposes of this table and the following table are awarded shares which are no longer subject to forfeiture under the terms of the Executive Incentive Plan or the Restricted Stock Award Plan. | |||||||||||||||||||||||||
(2) | Vesting dates for these awards are as follows: |
Book Value Shares | Market Value Shares | ||||||||||
Mr. Murphy | 12/2021 - 12/2025 | 12/2021 - 12/2024 | |||||||||
Ms. Short | 12/2021 - 12/2025 | 12/2021 - 7/2025 | |||||||||
Mr. Griffith | 12/2021 - 12/2025 | 12/2021 - 12/2024 | |||||||||
Mr. Buhr | 12/2021 - 12/2025 | 12/2021 - 12/2024 | |||||||||
Mr. Bauer | 12/2021 - 12/2025 | 12/2021 - 12/2025 | |||||||||
Note: Shares vesting based on calendar year results (e.g., 12/2021 above is based on 2021 results) are not released until audited financial results are publicly announced early in the following year. |
(3) | The values shown in respect of Book Value Shares are based on the book value of our Common Stock because that is the value that NEOs can ultimately realize from Book Value Shares absent extraordinary circumstances. | ||||
(4) | The named executive officers have no outstanding stock option awards at December 31, 2021. |
Option Exercises And Stock Vested — 2021 | |||||||||||||||||||||||
Stock Awards(1) | |||||||||||||||||||||||
Name | Number of Book Value Shares Acquired on Vesting | Number of Market Value Shares Acquired on Vesting | Value Realized on Full Vesting(2) | ||||||||||||||||||||
Christopher J. Murphy III | 8,128 | 4,164 | $451,720 | ||||||||||||||||||||
Andrea G. Short | 2,001 | 4,154 | 251,095 | ||||||||||||||||||||
John B. Griffith | 2,051 | 869 | 106,662 | ||||||||||||||||||||
Jeffrey L. Buhr | 1,803 | 751 | 93,244 | ||||||||||||||||||||
Brett A. Bauer | 837 | 1,416 | 96,181 |
(1) | The named executive officers did not exercise any stock option awards during 2021. | ||||
(2) | The values shown in respect of Book Value Shares are based on the book value of our Common Stock because that is the value that NEOs can ultimately realize from Book Value Shares absent extraordinary circumstances. |
Annual total compensation of Christopher J. Murphy III, Chairman of the Board and Chief Executive Officer(1) (A) | $2,010,211 | ||||
Median annual total compensation of all employees (excluding Mr. Murphy)(2) (B) | $57,693 | ||||
Ratio of (A) to (B) | 34.8 to 1 | ||||
(1) From Summary Compensation Table | |||||
(2) Median employee selected from all employees as of December 31, 2021, on basis of annual total compensation reported for tax purposes. Compensation was annualized for all employees not employed for the full year of 2021. Annual total compensation for the median employee was computed in the same manner as that of NEOs included in the Summary Compensation Table. |
Executive Compensation and Human Resources Committee | |||||||||||
Daniel B. Fitzpatrick, Chairman | |||||||||||
John F. Affleck-Graves | Vinod M. Khilnani | Timothy K. Ozark | Mark D. Schwabero |
BKD | BKD | BKD | |||||||||
2021 | 2020 | 2019 | |||||||||
Audit Fees | $410,400 | $397,650 | $386,400 | ||||||||
Audit-Related Fees(1) | 47,400 | 31,000 | 18,500 | ||||||||
Tax Fees | 10,375 | 10,075 | 24,285 | ||||||||
Other Fees | — | — | — | ||||||||
Total | $468,175 | $438,725 | $429,185 | ||||||||
(1) Amounts billed for employee benefit plan audits and other assurance services performed during the fiscal years indicated. |