UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): February 13, 2006
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GERMAN
AMERICAN BANCORP
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(Exact
name of registrant as specified in its
charter)
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Indiana
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0-11244
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35-1547518
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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711
Main Street
Box
810
Jasper,
Indiana
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47546
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (812) 482-1314
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
1.01. Entry
into a Material Definitive Agreement.
On
February 13, 2006, the Board of Directors (the “Board”) of German American
Bancorp (the "Company"), by the vote of the members of the Board who are not
“interested directors” within the meaning of the Marketplace Rules of the NASDAQ
Stock Market, Inc., established the balanced scorecards for the executive
officers that, taken together, constitute the Company's Management Incentive
Plan for such executive officers for 2006, all as recommended by the Human
Resources Committee of the Board (the “HR Committee”). In addition, on February
15, 2006, the Long-Term Incentive Award Committee of the Board commenced
awarding a new type of long-term incentive award under the Company's 1999
Long-Term Equity Incentive Plan (the "1999 Plan").
Adoption
of 2006 Management Incentive Plan
As
in
past years, executive officers of the Company were compensated for their
services in 2005 under a program (known as the Management Incentive Plan) that
included the opportunity to receive incentive awards in the form of short-term
incentive cash awards and long-term equity incentive awards. The Board of
Directors on February 13, 2006, accepted the recommendation of the Human
Resources Committee that the Management Incentive Plan be continued for 2006,
and established the criteria for personal 2006 "balanced scorecards" under
the
Plan for each of the Company’s five executive officers, including short-term and
long-term entitlements.
Short-term
Cash Incentive Scorecards.
The
Board (upon the recommendation of the HR Committee) established target
short-term cash incentive awards for executive officers as percentages of their
current year base salary (which range from 30% to 50% of 2006 base salary,
depending upon the executive), with maximum awards (payable only if targeted
performance and other criteria are substantially exceeded) of as much as 200%
of
the target awards. The scorecard of Mark A. Schroeder, President and Chief
Executive Officer of the Company (the "CEO"), specifies a target award of 50%
of
his base salary for 2006; hence, if all targeted corporate and individual
performance criteria are deemed to have been exceeded by the requisite amount
with respect to the CEO's scorecard during 2006, the CEO could earn a short-term
cash incentive award for his services during 2006 equal to 100% of his 2006
base
salary.
Short-term
cash incentive award entitlements for services during 2006 under the scorecards
will be based on (a) formula assessments of 2006 corporate performance (such
corporate performance measures to represent 80% of the potential short-term
incentive award), and (b) formula and/or discretionary assessments of personal
or departmental performance during 2006 (representing the remaining 20% of
the
potential award).
Of
the
corporate performance portion, 50% will be determined by the Company’s
performance (benchmarked in relation to the Company’s percentile ranking within
a peer group selected by the HR Committee of certain banking companies located
in the Midwest) in growth in earnings per share (25% of total corporate
performance criteria) and in revenue as a percent of personnel-related expense
(an additional 25% of total corporate performance criteria). The remaining
50%
of the corporate performance portion of each executive officer’s 2006 short-term
incentive scorecard will be determined by the Company’s percentage growth in its
core loans and core deposits.
Long-term
Incentive Awards Scorecards.
Long-term incentive awards under the Management Incentive Plan have historically
been awarded in the form of incentive stock options, with the number of shares
determined based upon the dollar values of the long-term incentive awards deemed
to have been earned pursuant to the prior year’s scorecards. For services during
2006, executive officers participating in the Management Incentive Plan may
earn
the right to be awarded long-term incentive awards in 2007, based upon the
Company’s average performance (as benchmarked against the Company’s average
annual percentile ranking within the peer group described above) in earnings
per
share growth and return on equity over the three-year period ending December
31,
2006. Like the cash incentive award target values, the dollar values of target
long-term incentive awards for executive officers are figured as percentages
of
their current year base salary, which percentages range from 30 % to 50% of
2006
base salary, depending upon the executive; also like the cash incentive award
scorecards, long-term incentive awards (payable only if targeted performance
and
other criteria are substantially exceeded on an average basis over the
three-year period ending December 31, 2006) may be of as much as 200% of the
target awards. The dollar value of the CEO’s target long-term incentive award
for 2006 is equal to 50% of his 2006 base salary; accordingly, his long term
incentive award for 2006 could be as much as 100% of his 2006 base salary,
but
only if the targeted criteria are both substantially exceeded.
Change
in Type and Grant of New Long-Term Incentive Awards
Also
on
February 13, 2006, the Board, upon the recommendation of the HR Committee,
determined the dollar amounts of the cash incentive awards and equity incentive
awards that are payable in 2006 to the executive officers, including the CEO,
for their services during 2005. These amounts were determined in accordance
with
the criteria for determination of the amounts established by the respective
2005
scorecards that were previously disclosed by the Company in the Company's
Current Report on Form 8-K filed with the Securities and Exchange Commission
on
May 4, 2005.
Effective
February 15, 2006, the Long-Term Incentive Award Committee (formerly known
as
the Stock Option Committee) (the "Award Committee") awarded a new type of
long-term incentive award under the 1999 Plan. In prior years, awards
representing the dollar amounts of long-term incentives deemed to be earned
by
the executives under their respective personal scorecards were granted in the
form of incentive stock options. At the recommendation of the Board and the
Human Resources Committee, the Award Committee effective February 15, 2006,
determined that future awards of long-term incentives under the 1999 Plan should
generally be made in the form of restricted stock, granted in tandem with cash
credit entitlements (such tandem grants of restricted stock and cash
entitlements together are referred to in this Report as "Restricted Stock
Awards"). The Restricted Stock Awards are subject to forfeiture in the event
that the recipient of the grant does not continue in employment with the Company
through December 15 of the year of grant, at which time they generally vest
100
percent. These and other terms of the Restricted Stock Awards granted on
February 15, 2006, by the Award Committee to the Company’s executive officers
are more fully set forth in the form of Restricted Stock Award Agreement, the
form of which is filed as part of this report as Exhibit 99, and is incorporated
herein by reference.
On
February 15, 2006, the Award Committee awarded Restricted Stock Awards on the
form of the Restricted Stock Award Agreement to executive officers and other
management employees, each consisting of newly-issued common stock of the
Company (subject to the restrictions and forfeiture conditions set forth in
the
form of Restricted Stock Award Agreement) which were deemed to have a value
of
$12.94 per share (based on the NASDAQ Official Closing Price of the Company's
common stock on February 14, 2006), and rights to receive cash payments in
a
dollar amount approximately equal to the dollar value of the restricted stock
(which cash rights are subject to similar forfeiture conditions). Of these
Restricted Stock Awards, the Award Committee granted to the five executive
officers of the Company (in satisfaction of the Company's obligations to make
long-term incentive awards in respect of the performance of the Company under
their respective personal 2005 scorecards) Restricted Stock Awards with face
values (approximately half in the form of restricted stock and half in the
form
of cash entitlements) as follows: $62,400 to Mr. Schroeder (CEO), $29,867 to
Mr.
Ewing, $18,400 to Mr. Ruhe, $18,400 to Mr. Rust, and $29,867 to Mr.
Sendelweck.
Item
9.01. Financial Statements and Exhibits.
(c)
Exhibits.
The
exhibit listed in the Exhibit Index that immediately follows the Signatures
page
to this Report is incorporated herein by reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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German
American
Bancorp |
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| Date:
February 17, 2006 |
By: |
/s/
Mark A. Schroeder |
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Mark
A. Schroeder |
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President
and
Chief Executive Officer |
EXHIBIT
INDEX
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99
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Form
of Restricted Stock Award Agreement that evidences the terms of awards
of
restricted stock grants and related cash entitlements granted under
the
1999 Long-Term Equity Incentive
Plan
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