DEF 14A of Horizon Bancorp Inc /In/, Mar 18, 2024

DEF 14A of Horizon Bancorp Inc /In/

Filed Mar 18, 2024 · FY20230000706129-24-000017

Open on EDGAR

  1. How many votes are required for the election of directors and other proposals?

    How many votes are required for the election of directors and other proposals? The following votes will be required to approve the proposals:

  2. How many votes are required for the election of directors and other proposals?

    | •Proposal 1: Directors will be elected by a plurality of the votes cast, which means that the director nominees who receive the highest number of votes “for” their election are elected. Shareholders may vote “for” a director or “withhold” a vote or authority to vote. “Withhold” votes and broker non-votes (described below) are not considered votes cast for the foregoing purpose, and neither will have an effect on the election of the nominees. Under our recently adopted Director Resignation Policy, any nominee for director who receives a greater number of “withhold” votes from his or her election than votes "for" such election is required to promptly tender his or her resignation to the Board, subject to acceptance by the Board. See “Election of Directors — Plurality Plus Voting for Directors; Director Resignation Policy” below. | | •Proposal 2 and 4: The advisory vote to approve executive compensation (Proposal 2), and the ratification of the independent registered public accounting firm (Proposal 4) each requires that more votes are cast in favor of the proposal than are cast against the proposal. Shareholders may vote “for” or “against” this proposal or “abstain” from voting on this proposal. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and neither will have an effect on the outcome. | | •Proposal 3: The advisory vote on the frequency of the advisory vote to approve executive compensation (Proposal 3) requires shareholders to vote on a frequency of “one year,” “two years” or “three years,” or to abstain from voting. Neither abstentions nor broker non-votes will have an effect on the outcome. |

  3. Election of Directors

    Election of Directors The first matter to be acted upon at the Annual Meeting is the election of directors. Horizon’s Board of Directors currently consists of thirteen members. As required by Horizon’s current Articles of Incorporation, the Board is divided into three classes of equal or near-equal size and the members of one class of directors are elected to serve three-year terms at each Annual Meeting.

  4. Nominees for Election as Class of 2026 Directors

    Nominees for Election as Class of 2026 Directors The terms of Julie S. Freigang, Lawrence E. Burnell, and Peter L. Pairitz as directors will end at the Annual Meeting. Peter L. Pairitz submitted notice on January 19, 2024 that he will retire from the Board at the end of his current term and will not stand for re-election at the Company's 2024 annual meeting of shareholders. The decision by Mr. Pairitz to not stand for re-election was not a result of any disagreement with the Board or management of Horizon or Horizon Bank. The Board of Directors assigned Thomas M. Prame to this year’s class of 2027 to permit him to run for election at the first annual meeting, the 2024 annual meeting, subsequent to his appointment as CEO of Horizon. With great sadness, the Board of Directors was informed that director Spero W. Valavanis passed away in January 2024. The Board of Directors has nominated Julie S. Freigang, Lawrence E. Burnell, and Thomas M. Prame to serve three-year terms as members of the Class of 2027. On January 23, 2024, the Board appointed Kevin W. Ahern and Brian W. Maass to serve on the Board, effective as of January 23, 2024, to fill the vacancy resulting from the retirement of Susan D. Aaron and a vacancy created when the Board increased the size of the board to 13. Each has served as an independent director on the board of Horizon Bank since April 18, 2023. Also, on January 23, 2024, the Board adopted a resolution, that, effective at the close of the 2024 annual meeting, the Board positions will be reduced to 11. Each of the nominees has agreed to serve for the term for which he or she has been nominated. We intend that the proxies solicited by the Board of Directors will be voted for the nominees named above. If any nominee is unable to stand for election, the Board of Directors may designate a substitute nominee or adopt a resolution reducing the number of members on the Board. If a substitute nominee is designated, common shares represented by proxy will be voted for the substituted nominee.

  5. Nominees for Election as Class of 2026 Directors

    | The Board of Directors unanimously recommends that the shareholders vote “FOR” the election of the three nominees (Item 1 on the Proxy Card) |

  6. Use of FW Cook Compensation Consultant

    Use of FW Cook Compensation Consultant The Compensation Committee retained FW Cook to prepare a report for purposes of evaluating executive compensation for Horizon’s named executive officers, including its chief executive officer and as part of its consideration of executive compensation for 2024. The most recent FW Cook report was received in December 2023 and used 2022 compensation data to compare overall executive compensation practices against 20 companies of comparable size and common business traits, as selected by FW Cook with input from management and approved by the Compensation Committee. Horizon’s peer group for purposes of the 2023 FW Cook report included the following companies:

  7. Use of FW Cook Compensation Consultant

    | 1st Source Corporation | German American Bancorp, Inc. | Old Second Bancorp, Inc. | | (South Bend, IN) | (Jasper, IN) | (Aurora, IL) | | Byline Bancorp | Great Southern Bancorp | Park National Corporation | | (Chicago, IL) | (Springfield, MO) | (Newark, OH) | | Community Trust Bancorp | Independent Bank Corporation | Peoples Bancorp | | (Pikeville, KY) | (Ionia, MI) | (Marietta, OH) | | City Holding Company | Lakeland Financial | Premier Financial Corp. | | (Charleston, WV) | (Warsaw, IN) | (Defiance, OH) | | Farmers National Banc Corp. | Mercantile Bank | QCR Holdings | | (Canfield, OH) | (Grand Rapids, MI) | (Moline, IL) | | First Busey Corporation | Midland States Bancorp | Stock Yards Bancorp, Inc. | | (Champaign, IL) | (Effingham, IL) | (Louisville, KY) | | First Mid Bancshares, Inc. | MidWestOne Financial Group, Inc. | | | (Mattoon, IL) | (Iowa City, IA) | |

  8. Use of FW Cook Compensation Consultant

    The Compensation Committee has considered the independence of FW Cook in light of SEC rules and NASDAQ listing standards. In connection with this process, the Committee has reviewed, among other items, a letter from FW Cook dated August 14, 2023 that addresses the independence of FW Cook and the members of the consulting team serving the Compensation Committee, including the following factors: (i) other services provided to us by FW Cook, (ii) fees paid by us as a percentage of FW Cook’s total revenue, (iii) policies or procedures of FW Cook that are designed to prevent conflicts of interest, (iv) any business or personal relationships between the senior advisor of the consulting team with a member of the Committee, (v) any Horizon stock owned by the senior advisor or any immediate family member, and (vi) any business or personal relationships between Horizon’s executive officers and the senior advisor. The Committee discussed these considerations and concluded that the work performed by FW Cook and its senior advisor involved in the engagement did not raise any conflicts of interest. The Compensation Committee intends to continue to employ an independent, third-party consultant to review executive compensation, including long-term benefits, at least every two years. The following highlights are from the 2023 FW Cook report:

  9. Use of FW Cook Compensation Consultant

    | •Horizon’s position was assessed in relation to a peer group of 20 other companies comparable to Horizon in various measures of size, including total assets, total shareholder equity, net revenue, net income, number of employees and market capitalization. Company performance for Horizon and the peer group is measured on a one-year and three-year basis for size, profitability, growth and shareholder return (with composite scores representing an average of the relative rankings in these categories). | | •Total annual compensation (“TAC”) for the last completed fiscal year (2022) for the named executive officers is directionally aligned with composite company size and performance for that year. TAC refers to base salary plus annual bonus. |

  10. Use of FW Cook Compensation Consultant

    | •TAC for the last five completed fiscal years (2018-2022) is also directionally aligned relative to composite company size and performance over that same time period. | | •Total compensation paid (“TCP”) for the last completed fiscal year (2022) for the named executive officers is directionally aligned with three-year company performance (2020-2022). TCP refers to multi-year long-term incentive cash awards earned for the latest performance cycle, plus all other compensation reported, plus value realized on any stock option exercises, plus restricted stock/performance shares earned and/or vested. | | •TCP for the last five completed fiscal years (2018-2022) is also directionally aligned with trailing three-year performance over that same time period. | | •On average, total direct compensation (“TDC”) opportunities for Horizon’s named executive officers, individually and in total, are positioned generally in the lower half of the market median range, slightly below the market media. | | •Horizon’s TDC mix is representative of median competitive practice. | | •Horizon ranks near the median of the peer group in terms of equity compensation cost, as measured by absolute dollar amount and near the median relative to pre-tax income. | | •Horizon ranks between the median and the 25th percentile and the median of the peer group in terms of share usage run rate. | | •Horizon ranks between the 25th percentile and median of the peer group in terms of potential dilution overhang from outstanding grants, and in the top quartile in total potential dilution because of the large number of shares that remain available for future grants. | | •Horizon’s practice of using a portfolio of two long-term incentive grant types, consisting of restricted stock vesting over three years and performance shares cliff vesting after a three-year performance period, falls within a reasonable range of peer group practice. |

  11. Compensation Risk

    | •Named executive officer bonuses will only be paid if Horizon achieves a minimum net income level that is more than sufficient to cover fixed costs and dividends at the holding company level. This minimum net income level, adjusted by one-time expenses and events, supports the concept that the shareholders are paid first and ahead of executive officer bonuses. | | •Executive officers will be paid bonuses only if they are in good standing with Horizon and are not under a performance warning, suspension, or individual regulatory sanction. | | •The Compensation Committee or its designee is to review and approve all executive officer bonuses prior to payment. | | •Bonuses are subject to receipt of an unqualified opinion by Horizon’s independent accountants on its most current year-end financial statements. | | •Horizon Bank has a policy that allows it to “claw back” incentive compensation as discussed below under the heading “Clawbacks: Recovery of Incentive Compensation under the Dodd-Frank Act.” |

  12. Base Salary

    Base Salary Salaries of all executive officers, including the Chief Executive Officer, are governed by Horizon’s formal salary administration program, which is updated each year. The salary administration program involves consideration of an executive officer’s position and responsibility and performance as determined in the detailed annual performance reviews discussed above. The salaries of Thomas M. Prame, Chief Executive Officer, and Mark E. Secor, Executive Vice President and Chief Financial Officer, are also impacted by written employment agreements with Horizon and Horizon Bank. In connection with his appointment as Chief Executive Officer, Mr. Prame entered into an amended and restated employment agreement on May 18, 2023, effective June 1, 2023, which provides that Mr. Prame will receive an annual base salary of $600,000, to be reviewed and potentially increased annually (but not decreased) by Horizon’s Compensation Committee. In connection with Mr. Secor’s transition, he entered into an employment agreement effective as of November 6, 2023, which provides that Mr. Secor will receive an annual base salary of $347,109.88 through the end of the term of the agreement. Other provisions of the agreements are discussed below following the Summary Compensation Table and in the discussion of “Potential Payments Upon Termination or Change in Control.” As discussed above, Mr. Secor will transition from his role as Executive Vice President and Chief Financial Officer of Horizon and Horizon Bank, and he will continue in that role until a successor is appointed and will support the transition process through April 30, 2024. Mr. Dwight was a party to a second amended and restated employment agreement, effective January 1, 2023, which terminated upon Mr. Dwight’s retirement from Horizon on July 3, 2023. Mr. Dwight’s employment agreement contained provisions regarding certain payments to be made to Mr. Dwight upon the termination of the agreement due to his retirement, including base salary and bonus payout at target. This payout was in part to support a smooth and orderly transition to Horizon’s new CEO. The amounts paid to Mr. Dwight under the provisions of his employment agreement in connection with his retirement from Horizon are set forth below in “Payments to Craig M. Dwight Upon Retirement. “ The Compensation Committee compares the salary of each executive officer to those salaries being paid to executive officers in similar positions in organizations of comparable size in the Midwest. Salary ranges are then computed from that data for each Horizon executive officer position. Salary increases are calculated based on individual performance rating, where the executive officer’s base salary falls within the executive officer’s respective salary range, benchmark data, total compensation in comparison to peer compensation mix, and Horizon’s salary matrix. FW Cook’s 2023 report reported that the average and highest base salary compensation for a Chief Executive Officer were $660,000 and $825,000, respectively. For Mr. Prame’s services as President and Chief Executive Officer, he was paid a base salary in 2023 of $600,000. For Mr. Dwight’s services as Chairman of the Board and Chief Executive Officer before his retirement in 2023, he was paid a base salary of $654,050, which represented a 3.0% increase over his 2022 base salary of $635,000. The salary increases for 2023 for the other named executive officers ranged from 3% to 17%. Mr. Secor’s salary was increased to $347,110 from $337,000 (3.00%); Ms. DeRuiter’s salary was increased to $324,480 from $312,000 (4.00%); Ms. Kerber’s salary was increased to $324,480 from $284,233 (17.42%), and Mr. Etzler’s salary was increased to $254,658 from $240,240 (6.00%). The salary increases were based on the Compensation Committee’s in-depth review of FW Cook’s 2022 compensation reports in conjunction with Horizon’s standard salary administration program as outlined above, pursuant to which the Compensation Committee takes into consideration the individual performance rating, where the executive officer’s base salary falls within their respective salary range, benchmark data, total compensation in comparison to peer, compensation mix and Horizon’s salary matrix. The salary matrix takes into account both the performance review rating and the employee’s current salary, with respect to the salary range, in determining the percentage increase.

  13. Annual Performance–Based Cash Incentive Compensation

    Annual Performance–Based Cash Incentive Compensation After consultations with compensation consultant FW Cook in 2003, the Compensation Committee of the Board of Directors of Horizon adopted an Executive Officer Bonus Plan. The Bonus Plan permits executive officers to earn, as a cash bonus, a percentage of their salary based on the achievement of corporate and individual goals in the relevant year. The following named executive officers, Messrs. Prame, Secor, and Etzler, and Mses. DeRuiter and Kerber currently participate in the 2023 Bonus Plan. Participants in the Bonus Plan are not eligible to participate in any other short-term cash incentive plan offered by Horizon. To receive a bonus under the Bonus Plan, the executive officer must be employed by Horizon or one of its subsidiaries on the date the annual bonus payment is made and must be in good standing with Horizon. If the executive officer retires or dies after earning an annual bonus at the end of the measuring period, then the executive officer (or the estate) will still be eligible to receive the bonus. The Compensation Committee may adjust or amend the Bonus Plan at any time in its sole discretion. All executive officers’ bonuses are subject to final approval by the Compensation Committee or its designee, and bonus payments are subject to Horizon’s receipt from its independent accountants of an unqualified audit opinion on Horizon’s most current year-end financial statements. Mr. Prame’s and Mr. Secor’s bonuses are paid in accordance with their employment agreements, which provide that they may participate in all incentive compensation plans and programs generally available to executive officers. As approved by the Compensation Committee, Horizon’s bonus matrices for executive officers are divided into short-term and long-term metrics with total bonus opportunities weighted fifty percent each. Short-term metrics place heavier weight on financial outcomes in order to align bonus payouts with shareholders’ interests for the given year. Long-term metrics place heavier weight on positioning Horizon for future success and enterprise risk management to align with shareholders’ long-term interests. Bonus calculations for financial outcomes are based on quantifiable targets and, for non-financial targets, on observations by Horizon’s Chief Executive Officer, the Compensation Committee, and the Board of Directors in comparison to Horizon’s strategic plan. The weightings for Horizon’s 2023 bonus matrix for each named executive officer (other than Mr. Prame) are as follows:

  14. Annual Performance–Based Cash Incentive Compensation

    | Named Executive Officer & Category | Short–Term Metric Weighting | Long–Term Metric Weighting | | President and Chief Executive Officer (Mr. Prame) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 70% | | | Positioning Horizon for Future Success | | 70% | | Enterprise Risk Management | 30% | 30% | | Executive Vice President and Chief Financial Officer (Mr. Secor) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 60% | | | Positioning Horizon for Future Success | | 20% | | Enterprise Risk Management | 40% | 60% | | Project Management | | 20% | | Executive Vice President and Senior Operations Officer (Ms. DeRuiter) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 50% | | | Positioning Horizon for Future Success | | 20% | | Enterprise Risk Management | 30% | 60% | | Project Management | 20% | 20% | | Executive Vice President and Chief Commercial Banking Officer (Ms. Kerber) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 20% | | | Financial Outcomes for Areas of Direct Responsibility | 40% | | | Positioning Horizon for Future Success | | 30% | | Enterprise Risk Management | 20% | 70% | | Project Management | 20% | | | Former Chief Executive Officer (Mr. Dwight) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 70% | | | Positioning Horizon for Future Success | | 70% | | Enterprise Risk Management | 30% | 30% | | Executive Vice President, Chief Legal and Risk Officer & Corporate Secretary (Mr. Etzler) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 60% | | | Positioning Horizon for Future Success | | 20% | | Enterprise Risk Management | 20% | 60% | | Project Management | 20% | 20% |

  15. Annual Performance–Based Cash Incentive Compensation

    Horizon’s 2024 bonus matrices for each named executive officer will follow substantially the same categories and metric weightings as above, subject to approval by the Compensation Committee and Board of Directors. Pursuant to Mr. Prame’s employment agreement, Mr. Prame will also be eligible to participate in the Company’s 2024 executive officer target bonus plan, subject to annual approval by the Compensation Committee. The Compensation Committee established a minimum earnings target for Horizon to achieve before any bonuses would be paid out under the Bonus Plan for 2023. In 2023, the minimum earnings threshold was $65.5 million. If Horizon’s net income for 2023 was below $65.5 million, no bonuses would be paid to any executive officer. The minimum earnings target is tied to earnings available to pay dividends and fixed costs at the holding company. Earnings, for purposes of the Bonus Plan, are determined by the Compensation Committee, which has the discretion to make adjustments for special non-recurring costs such as acquisition-related expenditures, the effects of the balance sheet restructuring decision made in the fourth quarter of 2023, and other one-time expenses. The Compensation Committee also approved a target bonus matrix for each executive officer to be used to calculate the executive officer’s bonus (if any) for the year (assuming that the minimum earnings target has been met). The matrix for each executive officer specifies the performance measures applicable to the executive officer, the targets for each performance measure and the weight to be assigned to each performance measure in calculating the bonus if the specified target levels are achieved. The Compensation Committee sets the target awards to be challenging, but reasonably attainable. The maximum earnings goal was approximately $8.0 million and $9.0 million above the targets of $91.0 million for 2023 and $97.0 million for 2022, and the maximum efficiency ratio goal was approximately 350 basis points better than the targets of 59.0% for 2023 and 57.0% for 2022. In 2023, the minimum earnings amount for payout was achieved, and all the participants were in good standing with Horizon. Any participant not in good standing with Horizon would not be eligible for incentive compensation. The other non-financial measurements include the following: enterprise risk management; compliance with rules, regulations, and good internal controls; positioning Horizon for long-term growth; organizational development, retention and attracting good talent; and project management. The weightings for each measurement vary dependent upon the overall responsibilities and primary goals of each executive officer. Non-financial results are compared with Horizon’s strategic plan and scored based on the observations of the Chief Executive Officer, Compensation Committee, and the Board of Directors. Scores range from does not meets, meets, exceeds, or far exceeds expectations. For 2023, the named executive officers who participated in the Bonus Plan could have earned as a maximum bonus the following percentages of their base salaries: Mr. Prame, 80%; Mr. Secor, 60%; Ms. DeRuiter, 55%; Ms. Kerber, 55%; and Mr. Etzler, 55%. Each named executive officer had as a short-term performance goal the achievement of a specified level of financial outcomes for the year, with the weighting of such goals for 2023 being 70% for Mr. Prame; 60% for Mr. Secor; 50% for Ms. DeRuiter; 60% for Ms. Kerber; and 60% for Mr. Etzler. The financial outcome targets focused primarily on Horizon’s earnings, efficiency improvements, or business unit outcomes. The short-term performance goals for each executive officer also included one non-financial metric for enterprise risk management. Long-term performance goals for each executive officer were for enterprise risk management, positioning Horizon for long-term success or project management. In considering Messrs. Prame’s bonuses, the Compensation Committee used established short- and long-term goals for 2023 and compared actual results with goals. The goals compared Horizon’s net income compared to plan, Horizon’s efficiency ratio compared to plan, enterprise risk management, compliance with all rules, laws, regulations, audit standards, reputation of Horizon, positioning Horizon for future growth and expansion, and organizational development including retention and attraction of good talent, efficiency improvement, and continuous learning. In order to earn a bonus award in 2023, the Bonus Plan’s participants were required to achieve an aggregate weighted score of 80% or higher for long-term goals to earn the long-term portion of the cash bonus and 80% or higher for short-term goals to earn the short-term portion of the cash bonus. If the participant achieved the goals for all categories, the participant’s aggregate weighted score would be 100%. Due to the financial results of the company not meeting expectations, none of the named executives qualified for bonus awards in the short-term portion of the Bonus Plan. The amounts of the bonuses actually paid each year under the Bonus Plan are reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table included below in this Proxy Statement. The payouts that Messrs. Prame, Secor, Dwight, and Etzler, and Mses. DeRuiter and Kerber had an opportunity to earn under the Bonus Plan for 2023 are presented below in the Grants of Plan-Based Awards table. The Compensation Committee has reviewed the Bonus Plan for 2023, and based on that review, the Compensation Committee has concluded that the Bonus Plan, as designed for 2023, aligned the interests of the senior executive officers with those of the shareholders and that the Bonus Plan designs provided several features to mitigate any incentive to the senior executive officers to take undue risks that could threaten the enterprise.

  16. Long–Term Performance–Based Equity and/or Cash Incentive Program

    Long–Term Performance–Based Equity and/or Cash Incentive Program Since 2003, Horizon has maintained an omnibus stock plan for the purpose of attracting and retaining key employees. All omnibus stock plans have been approved by Horizon’s shareholders. The original 2003 Omnibus Plan expired on January 31, 2013, and although awards under the plan remain outstanding with the last options expiring June 18, 2022, no additional shares may be granted under the 2003 Omnibus Plan. In 2014, the shareholders approved the 2013 Omnibus Plan, which replaced the 2003 Omnibus Plan and became effective for a ten-year term beginning February 1, 2013. At the 2018 Annual Meeting, shareholders approved an amended and restated 2013 Omnibus Plan to allow additional stock-based awards. The 2013 Omnibus Plan authorized the issuance of up to 1,556,325 common shares (as adjusted from 691,700 for the November 2016 and June 2018 3-for-2 stock splits). In 2021, the shareholders approved the Horizon Bancorp, Inc. 2021 Omnibus Equity Incentive Plan (the “2021 Omnibus Plan”), which became effective May 6, 2021 and terminates on the earlier of the date Horizon elects to terminate the Plan (which Horizon is permitted to do at any time) or the date all common shares reserved for issuance under the Plan are issued or otherwise deemed issued under the Plan. A primary reason for adopting the 2021 Omnibus Plan was to replace the Horizon Bancorp, Inc. Amended and Restated 2013 Omnibus Equity Incentive Plan, which expired on February 1, 2023, and which contained certain single trigger change-in-control provisions and obsolete share recycling provisions. Awards under the 2013 Plan remain outstanding but no new awards may be granted under the 2013 Plan. Horizon reserved 1,787,548 shares of our common stock for future awards under the 2021 Omnibus Plan, which includes 1,400,000 new shares of common stock plus 387,548 shares of common stock remaining and unused in the 2013 Plan that were rolled into the 2021 Omnibus Plan. In general, the majority of the awards granted under the 2021 Omnibus Plan must have a minimum vesting schedule of at least one year. Specifically, at least 95% of the awards granted will have a minimum vesting schedule of one year, subject to acceleration of vesting, to the extent permitted by the Compensation Committee or set forth in the 2021 Omnibus Plan or the applicable award agreement in the event of: (i) a termination of service for death, disability, or retirement; (ii) limited conditions relating to a change in control; and (iii) with respect to cash-based awards and substitute awards, in connection with a corporate transaction, such as a merger or sale of Horizon. Awards granted under the 2021 Omnibus Plan are also subject to Horizon’s clawback policy. Like Horizon’s prior plans, the Compensation Committee administers the 2021 Omnibus Plan and may grant the following types of awards under the 2013 Omnibus Plan and the 2021 Omnibus Plan, which may vest on a time basis or pursuant to performance metrics set by the Compensation Committee from time to time:

  17. Long–Term Performance–Based Equity and/or Cash Incentive Program

    | •Incentive and nonqualified stock options | | •Stock appreciation rights | | •Restricted stock | | •Restricted stock units | | •Other stock–based awards | | •Any combination of the above |

  18. Long–Term Performance–Based Equity and/or Cash Incentive Program

    The effects on awards granted under the 2021 Omnibus Plan in the event of a change in control of Horizon are discussed below under Potential Payments Upon Termination or Change in Control - Other Benefits Upon Termination or Change in Control. Horizon’s long-term incentive program was historically based on the grant of stock options and restricted stock, but, in 2014, Horizon began awarding performance-based (not time-based) performance shares as its preferred form of long-term performance-based equity compensation. Long-term equity incentives are granted to encourage and facilitate personal stock ownership by executive officers. Horizon believes this strengthens their personal commitment to Horizon and provides them with a longer-term perspective in their managerial responsibilities. This component of an executive officer’s compensation directly aligns the officer’s interests with those of Horizon’s shareholders. Horizon also recognizes that equity compensation is an important element of a competitive compensation program. The program utilizes vesting periods and/or long-term performance goals to encourage key employees to continue in the employ of Horizon and thereby acts as a retention device for key employees. With respect to stock ownership, as discussed above, all of the named executive officers must comply with the Ownership Guidelines adopted by the Board of Directors. The Chief Executive Officer must maintain ownership of Horizon common shares having a value equal to at least three times the base salary, and each of the other named executive officers must maintain ownership of common shares having a value equal to at least twice the applicable executive officer’s base salary. For additional details about the Ownership Guidelines, see the “Stock Ownership Guidelines” section above under the “Corporate Governance” heading. In determining a reasonable level of long-term compensation to be granted executive officers, the Compensation Committee considers data it deems relevant, including the data in the independent reports prepared by FW Cook and other peer data. The stock options that have been granted to executive officers are service based and vest in equal annual installments over a three- or five-year period. Awards of restricted stock vest on the third anniversary of the date of grant if the executive officer remains employed by Horizon, Horizon Bank, or any of their affiliates. The performance shares or units that are awarded become earned and vested based on the achievement of certain performance goals during a performance period as established by the Compensation Committee at the time of each grant (generally three years). The performance goals are based on a comparison of Horizon’s average performance over the performance period for the return on common equity, compounded annual growth rate of total assets, and return on average assets, all relative to the average performance for publicly traded banks with total assets between $5 billion and $10 billion on the SNL Bank Index for the same measures. Each of the three performance goals is weighted roughly equally (34% for return on common equity; 33% for compounded annual growth rate of total assets; and 33% for return on average assets). The payout received by the recipient is determined by whether Horizon achieves the performance goal at a threshold level (50th to 74th percentile relative to the comparative SNL group), a target level (75th to 84th percentile relative to the comparative SNL group), or a maximum level (greater than 84th percentile relative to the comparative SNL group). A performance share award recipient can receive 50% of the award if Horizon achieves the threshold, 100% of the award if Horizon achieves the target, and 125% of the award if Horizon achieves the maximum.

  19. Post–Termination Compensation and Benefits

    Post–Termination Compensation and Benefits Upon termination of either Mr. Prame or Mr. Secor from employment in certain situations not related to a change in control of Horizon, Mr. Prame and Mr. Secor (but no other named executive officers) will be entitled to certain post-termination compensation and benefits, as provided in their respective employment agreements. Specifically, if Horizon terminates them without “cause” or either executive resigns for “good reason,” then the terminated executive is entitled to additional compensation and benefits, as more fully described below in “Potential Payments Upon Termination or Change in Control.” Horizon Bank entered into an amended Change in Control Agreement with Mr. Prame effective June 1, 2023, and new or amended Change in Control Agreements with Mr. Secor, Ms. DeRuiter, and Mr. Etzler, each effective January 1, 2020, and Ms. Kerber, effective October 1, 2020. Horizon Bank also entered into amendments to the Change in Control Agreements with Mses. DeRuiter and Kerber and Mr. Etzler, each effective December 1, 2022. Pursuant to the Change in Control Agreements, the named executive officers become entitled to post-termination compensation and benefits, as discussed in more detail below in “Potential Payments upon Termination or Change in Control.” Mr. Dwight was a party to a second amended and restated employment agreement, effective January 1, 2023, which terminated upon Mr. Dwight’s retirement from Horizon on July 3, 2023. Mr. Dwight’s employment agreement contained provisions regarding certain payments to be made to Mr. Dwight upon the termination of the agreement due to his retirement, including base salary. The amounts paid to Mr. Dwight under the provisions of his employment agreement in connection with his retirement from Horizon are set forth below in “Payments to Craig M. Dwight Upon Retirement.” Horizon believes its post-termination compensation and benefits arrangements are necessary in order to attract and retain experienced and talented executive officers in Horizon’s industry, are comparable to arrangements offered by its industry peers, and are consistent with Horizon’s philosophy and compensation objectives. The Horizon Bancorp Supplemental Executive Retirement Plan (“Frozen SERP”), a nonqualified deferred compensation plan, was originally effective January 1, 1993, and was frozen effective December 31, 2004. The Frozen SERP provides certain management or highly compensated employees of Horizon and its affiliates with supplemental retirement benefits to help recompense those employees for benefits reduced under the Thrift Plan due to benefit limits imposed by the Code and to permit the deferral of additional compensation. The Frozen SERP is designed and administered to comply with Title I of the Employee Retirement Income Security Act of 1974 and to be exempt from the requirements of Internal Revenue Code Section 409A. The Frozen SERP is administered by the Compensation Committee. Prior to January 1, 2005, a participant in the Frozen SERP could elect each year to defer a percentage of the participant’s total cash compensation. Each year, the Compensation Committee, in its discretion, could elect to have Horizon match the amounts deferred by each participant under the Frozen SERP up to a maximum match of $25,000. The Compensation Committee could also make supplemental contributions in any amount determined by the Compensation Committee in its discretion. Interest is credited on a participant’s deferred account balance in the Frozen SERP at the five-year U.S. Treasury Bond rate published in The Wall Street Journal and in effect as of the first business day of each calendar month, plus 200 basis points, but not to exceed 120% of the Applicable Federal Long-Term Rate for monthly compounding. Amounts deferred by participants vest immediately. The Compensation Committee can require forfeiture of matching and supplemental contributions if the participant has not completed the number of years of service specified by the Compensation Committee, except when the participant dies while still employed, is determined to be disabled or retires after reaching age sixty-five. Participants or their designated beneficiaries will begin to receive payments under the Frozen SERP within thirty days after the participant’s separation from service. Participants may elect lump sum or installment payments, or a combination of the two, subject to the provisions of the Frozen SERP. The Frozen SERP was amended effective January 1, 2010, to permit a participant’s account assets to be invested in Horizon common shares, and amended effective December 19, 2017, to allow distributions under the Frozen SERP to be made in cash, Horizon common shares, or a combination of both. Participants in the Frozen SERP may change their investment election option once a year. No additional amounts, except earnings, accrued to the named executive officers under the Frozen SERP since 2019. Horizon adopted the Horizon Bancorp 2005 Supplemental Executive Retirement Plan (“2005 SERP”) to replace the Frozen SERP effective January 1, 2005. As with its predecessor, the 2005 SERP provides certain management or highly compensated employees of Horizon and its affiliates with supplemental retirement benefits to help recompense those employees for benefits reduced under the Thrift Plan due to benefit limits imposed by the Code and to permit the deferral of additional compensation. The 2005 SERP is also designed and administered to comply with Title I of the Employee Retirement Income Security Act of 1974 and Code Section 409A, and the 2005 SERP is administered by the Compensation Committee. A participant in the 2005 SERP may elect to defer a percentage of the participant’s total cash compensation each year. The 2005 SERP maximum deferral percentage is limited to 25%. Each year, the Compensation Committee, in its discretion, may elect to have Horizon match the amounts deferred by each participant under the 2005 SERP up to a maximum match of $25,000 for years prior to 2017 and $35,000 for 2017 and beyond. The Compensation Committee may change the match limit prior to the beginning of any year. The Compensation Committee may also make supplemental contributions in any amount it determines in its discretion. Interest is credited on a participant’s deferred account balance in the 2005 SERP at the five-year U.S. Treasury Bond rate published in The Wall Street Journal and in effect as of the first business day of each calendar month, plus 200 basis points, but not to exceed 120% of the Applicable Federal Long-Term Rate for monthly compounding. Amounts deferred by participants vest immediately. The Compensation Committee may require forfeiture of matching and supplemental contributions if the participant has not completed the number of years of service specified by the Compensation Committee, except when the participant dies while still employed, is determined to be disabled or retires after reaching age sixty-five. Participants may specify the date or event upon which they or their designated beneficiaries will begin to receive payment under the 2005 SERP and may elect lump sum or installment payments, or a combination of the two, subject to the provisions of the 2005 SERP. In December 2009, the Board of Directors approved a second SERP investment alternative in the form of Horizon common shares. In December 2017, the 2005 SERP was amended to confirm that distributions can be made in cash, Horizon common shares, or a combination of both. Participants in the 2005 SERP may change their investment election option once a year. Horizon’s contributions allocated to the named executive officers under the 2005 SERP are included in the All Other Compensation column of the Summary Compensation Table appearing below.

  20. Pay Ratio Disclosure

    Pay Ratio Disclosure Horizon has determined the relationship of the annual total compensation of our employees and the annual total compensation of Thomas M. Prame, Horizon’s Chief Executive Officer. Since Mr. Prame, who succeeded Mr. Dwight as CEO in June 2023 in connection with Mr. Dwight’s retirement, was serving as CEO on December 31, 2023 (the date selected by Horizon for purposes of identifying Horizon’s median employee), it is Mr. Prame’s annualized compensation rate as of December 31, 2023 that was used for the CEO component of the pay ratio calculation, as disclosed herein. For 2023, our last completed fiscal year, (i) the median of the annual total compensation of all employees (other than Mr. Prame) was $42,478; and (ii) the annualized total compensation of Mr. Prame as of December 31, 2023 was $1,129,286. Based on this information, for 2023, the ratio of the annual total compensation of Mr. Prame to the median of the annual total compensation of all employees was 26.6 to 1; in other words, Mr. Prame’s annual total compensation was 26.6 times that of the median of the annual total compensation of all employees. To identify the “median employee” of Horizon this year (and as we have done each year in the past), we identified all full-time and part-time employees of Horizon as of December 31, 2023, excluding Mr. Prame, leased employees, or independent contractors. We then used the employees’ base salary (or wages and overtime for non-salaried employees) plus bonus, on a non-annualized basis for those employed for less than all of 2023, in order to determine annual cash compensation on a consistent basis, and then we ranked all the employees by compensation amount in order to identify the median employee. We believe the use of total cash compensation for all employees is a reasonable and consistently applied compensation measure because we do not widely distribute annual equity awards to employees and all employees participate in Horizon’s Thrift Plan on an equal basis. Once we identified the median employee, we computed the median employee’s annual total compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, which is the same methodology we use for our named executive officers as set forth in the Summary Compensation Table included in this Proxy Statement. To determine Mr. Prame’s annual total compensation, we used the amount reported in the “Total” column of the Summary Compensation Table included in this Proxy Statement, plus an amount equal to $19,231 to reflect the annualization of Mr. Prame’s base salary and annual bonus, which results in an annual total compensation for 2023 for purposes of the pay ratio calculation of $1,129,286. This information is being provided for compliance purposes and is a reasonable estimate calculated in a manner consistent with SEC rules. The SEC rules for identifying the median employee and in calculating the pay ratio allow companies to adopt a variety of methodologies, exclusions and assumptions that reflect their employee populations and compensation practices. As such, the pay ratio reported by other companies, including companies in our peer group, may not be comparable to the pay ratio reported above. This information is provided for compliance purposes. Neither the Compensation Committee nor management of the company used the pay ratio measure in making compensation decisions.

  21. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of Horizon. For further information concerning how Horizon aligns executive compensation with Horizon’s performance, see “Compensation Discussion and Analysis.”

  22. Pay Versus Performance

    | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | | Summary Compensation Table Total for Principal Executive Officer (PEO) | | Compensation Actually Paid (CAP) | | Average Summary Compensation | | Value of Initial Fixed $100 Investment Based On | | | Company Selected Measure (CSM): | | Year | First CEO(1) | Second CEO (2) | First CEO (3) | Second CEO (3) | Table Total for Non-PEO NEOs(4) | Actually Paid to Non-PEO NEOs(5) | Company Total Shareholder Return (TSR) (6) | Peer Group TSR (7) | Net Income (in Millions) (8) | Return on Average Assets (9) | | 2023 | $1,993,309 | $1,110,057 | $2,159,459 | $1,178,271 | $560,562 | $564,155 | 100.47 | 100.70 | $27.98 | 0.36% | | 2022 | 1,328,910 | N/A | 991,735 | N/A | 648,922 | 550,248 | 63.12 | 81.23 | 93.41 | 1.24% | | 2021 | 1,402,359 | N/A | 1,697,391 | N/A | 660,875 | 787,483 | 138.19 | 144.69 | 87.09 | 1.34% | | 2020 | 1,281,359 | N/A | 1,170,072 | N/A | 597,260 | 584,487 | 86.18 | 90.39 | 68.50 | 1.22% |

  23. Pay Versus Performance

    | (1) Amounts reported in this column and others related to the "First CEO" are for Craig M. Dwight, who served as Chief Executive Officer of Horizon until his retirement from the Company on June 1, 2023. The dollar amounts reported in this column are the amounts of total compensation reported for Mr. Dwight for each corresponding year in the “Total” column of the Summary Compensation Table (“SCT”). See “Executive Compensation – Executive Compensation Tables – Summary Compensation Table for 2023.” | | (2) Amounts reported in this column and others related to the "Second CEO" are for Thomas M. Prame, who succeeded Mr. Dwight as Chief Executive Officer of the Company upon Mr. Dwight's retirement. The dollar amounts reported in this column are the amounts of total compensation reported for Mr. Prame for 2023 in the “Total” column of the Summary Compensation Table (“SCT”). See “Executive Compensation – Executive Compensation Tables – Summary Compensation Table for 2023.” | | (3) The dollar amounts reported in columns (c) represent the amount of “compensation actually paid” to Mr. Dwight and Mr. Prame, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Dwight and Mr. Prame during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Dwight’s and Mr. Prame's total compensation for each year to determine the compensation actually paid: |

  24. Pay Versus Performance

    | Compensation Actually Paid to First CEO | | | | | | | | | | Year | Salary (A) | Stock Awards (B) | Non–Equity Incentive Plan Compensation (C) | All Other Compensation (D) | SCT Total (E) | Deductions from SCT Total (F) | Additions to SCT Total (G) | CAP | | 2023 | $342,118 | $844,977 | $— | $806,214 | $1,993,309 | $(844,977) | $1,011,127 | $2,159,459 | | 2022 | 635,000 | 419,969 | 190,500 | 83,441 | 1,328,910 | (419,969) | 82,794 | 991,735 | | 2021 | 605,000 | 284,980 | 438,625 | 73,754 | 1,402,359 | (284,980) | 580,012 | 1,697,391 | | 2020 | 585,000 | 260,000 | 365,625 | 70,734 | 1,281,359 | (260,000) | 148,713 | 1,170,072 |

  25. Pay Versus Performance

    | Compensation Actually Paid to Second CEO | | | | | | | | | | Year | Salary (A) | Stock Awards (B) | Non–Equity Incentive Plan Compensation (C) | All Other Compensation (D) | SCT Total (E) | Deductions from SCT Total (F) | Additions to SCT Total (G) | CAP | | 2023 | $580,769 | $299,981 | $176,771 | $52,536 | $1,110,057 | $(299,981) | $368,195 | $1,178,271 |

  26. Pay Versus Performance

    | (A) The dollar amounts in the “Salary” columns are the amounts reported for Mr. Dwight and Mr. Prame for each corresponding year in the “Salary” column of the Summary Compensation Table. | | (B) The dollar amounts in the “Stock Awards” columns are the amounts reported for Mr. Dwight and Mr. Prame for each corresponding year in the “Stock Awards” column of the SCT. | | (C) The dollar amounts in the “Non-Equity Incentive Plan Compensation” columns are the amounts reported for Mr. Dwight and Mr. Prame for each corresponding year in the “Non-Equity Incentive Plan Compensation” column of the SCT. | | (D) The dollar amounts in the “All Other Compensation” columns are the amounts reported for Mr. Dwight and Mr. Prame for each corresponding year in the “All Other Compensation” column of the SCT. | | (E) The dollar amounts in the “SCT Total” columns are the amounts reported for Mr. Dwight and Mr. Prame for each corresponding year in the “Total” column of the SCT. | | (F) The dollar amounts in the “Deductions from SCT Total” columns are the total of the amounts reported for Mr. Dwight and Mr. Prame in the “Stock Awards” and “Option Awards” columns, as applicable, in the SCT for the applicable year. | | (G) The dollar amounts in the “Additions to SCT Total” column reflect the addition (or subtraction, as applicable) of the following equity award adjustments for Mr. Dwight and Mr. Prame for the applicable year: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. |

  27. Pay Versus Performance

    | (4) The dollar amounts reported in column (d) represent the average of the amounts reported for Horizon’s named executive officers (NEOs) as a group (excluding Mr. Dwight and Mr.Prame) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Dwight and Mr. Prame) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Mark E. Secor, Kathie A. DeRuiter, Lynn M. Kerber, and Todd A. Etzler; (ii) for 2022, Mark E. Secor, Thomas M. Prame, Kathie A. DeRuiter, and Lynn M. Kerber; (iii) for 2021, James D. Neff, Mark E. Secor, Dennis J. Kuhn, and Kathie A. DeRuiter; and (iv) for 2020, James D. Neff, Mark E. Secor, Dennis J. Kuhn, and Kathie A. DeRuiter. | | (5) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Dwight and Mr. Prame), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Dwight and Mr. Prame) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Dwight and Mr. Prame) for each year to determine the compensation actually paid, using the same methodology described above in footnote (2) above: |

  28. Pay Versus Performance

    | Compensation Actually Paid to Non–PEO | | | | | | | | | | Year | Salary | Stock Awards | Non–Equity Incentive Plan Compensation | All Other Compensation | SCT Total | Deductions from SCT Total | Additions to SCT Total | CAP | | 2023 | $312,682 | $133,020 | $55,450 | $59,410 | $560,562 | $(133,020) | $136,613 | $564,155 | | 2022 | 283,549 | 253,466 | 69,707 | 42,200 | 648,922 | (253,466) | 154,792 | 550,248 | | 2021 | 322,072 | 128,829 | 154,413 | 55,561 | 660,875 | (128,829) | 255,437 | 787,483 | | 2020 | 310,773 | 124,293 | 104,143 | 58,051 | 597,260 | (124,293) | 111,520 | 584,487 |

  29. Pay Versus Performance

    | (6) TSR for Horizon Bancorp, Inc. is cumulative total TSR returns on common share from S&P Global Market Intelligence, respectively for each period. | | (7) Peer Group TSR the SNL Micro Cap Bank Index is illustrated. | | (8) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. | | (9) The percentages reported represent the amount of net income reflected in the Company’s audited financial statements divided by the reported average assets for the applicable year. |

  30. Financial Performance Measures

    Financial Performance Measures As described in greater detail in “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short- term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:

  31. Financial Performance Measures

    | •Revenue | | •Return on Average Assets | | •Relative TSR (the Company’s TSR as compared to a peer group established by the Compensation Committee) |

  32. Analysis of the Information Presented in the Pay versus Performance Table

    Analysis of the Information Presented in the Pay versus Performance Table In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table.

  33. Compensation Actually Paid and Total Shareholder Return

    Compensation Actually Paid and Total Shareholder Return The amount of compensation actually paid to Messrs. Prame and Dwight and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Prame and Dwight) are aligned with the Company’s cumulative TSR over the three years presented in the table. The alignment of compensation actually paid with the Company’s cumulative TSR over the period presented is because a significant portion of the compensation actually paid to Messrs. Prame and Dwight and to the other NEOs is comprised of equity awards. As described in more detail in the section “Compensation Discussion and Analysis,” the Company targets approximately 35 to 60% of the NEO’s base salary to determine the award value of the NEO’s equity awards, including time-based restricted stock and performance-shares.

  34. Compensation Actually Paid and Net Income

    Compensation Actually Paid and Net Income The amount of compensation actually paid to Messrs. Prame and Dwight and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Prame and Dwight) are generally aligned with the Company’s net income. Between 2021 and 2022 the amount of compensation actually paid to Messrs. Prame and Dwight and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Prame and Dwight) decreased. This was primarily the result of the Company’s stock price decreasing during 2022, which is the primary factor in the decrease. Net income decreased between 2022 and 2023 partially due to the restructure of the balance sheet reducing net income while the amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Prame and Dwight) increased. This was primarily the result of the Company’s stock compensation awarded in the CEO transition, which is the primary factor in the increase.

  35. Compensation Actually Paid and Return on Average Assets

    Compensation Actually Paid and Return on Average Assets The amount of compensation actually paid to Messrs. Prame and Dwight and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Prame and Dwight) are generally aligned with the Company’s return on average assets for the three years presented in the table. Return on average assets decreased between 2022 and 2023 partially due to the restructure of the balance sheet reducing net income while the amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Prame and Dwight) increased. This was primarily the result of the Company’s stock compensation awarded in the CEO transition, which is the primary factor in the increase. The Company uses return on average assets as a performance measure in the performance-shares that are awarded to the NEOs. As described in more detail in the section “Compensation Discussion and Analysis,” the Company targets approximately 33% of the calculation for the NEOs in determining the total award for the performance-shares.

  36. Total Shareholder Return of Horizon and Total Shareholder Return of Peer Group

    Total Shareholder Return of Horizon and Total Shareholder Return of Peer Group The Company’s TSR over the three year period presented in the table is aligned with compensation actually paid when comparing the TSR of the peer group presented over the three years presented in the table. The Company’s TSR during the three years presented in the table, representing the Company’s financial performance, industry performance and market conditions as compared to the companies comprising the peer group were directionally consistent. For more information regarding the Company’s performance and the companies that the Compensation Committee considers when determining compensation, refer to “Compensation Discussion and Analysis.”

  37. Summary Compensation Table for 2023

    Summary Compensation Table for 2023 The table below provides information with respect to the total compensation earned by or paid to the named executive officers for 2023.

  38. Summary Compensation Table for 2023

    | Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Craig M. Dwight (6) | 2023 | 342,118 | N/A | 844,977 | — | 806,214(8) | 1,993,309 | | Chief Executive Officer | 2022 | 635,000 | N/A | 419,969 | 190,500 | 83,441 | 1,328,910 | | Chairman | 2021 | 605,000 | N/A | 284,980 | 438,625 | 73,754 | 1,402,359 | | Thomas M. Prame(7) | 2023 | 580,769 | N/A | 299,981 | 176,771 | 52,536(9) | 1,110,057 | | President/CEO | 2022 | 200,961 | 50,000 | 203,800 | — | 1,600 | 406,361 | | Mark E. Secor | 2023 | 347,110 | N/A | 173,538 | 34,711 | 68,429(10) | 623,788 | | Chief Financial Officer | 2022 | 337,000 | N/A | 372,272 | 33,700 | 64,769 | 807,741 | | | 2021 | 318,172 | N/A | 127,269 | 167,040 | 56,756 | 669,237 | | Kathie A. DeRuiter | 2023 | 324,480 | N/A | 129,788 | 56,784 | 63,006(11) | 574,058 | | Executive Vice President | 2022 | 312,000 | N/A | 124,787 | 117,000 | 60,687 | 614,474 | | Senior Operations Officer | 2021 | 278,512 | N/A | 111,405 | 132,293 | 53,022 | 575,232 | | Lynn M. Kerber | 2023 | 324,480 | N/A | 129,788 | 73,008 | 66,500(12) | 593,776 | | Executive Vice President | 2022 | 284,233 | N/A | 313,004 | 128,127 | 41,744 | 767,108 | | Chief Commercial Banking Officer | | | | | | | | | Todd A. Etzler | 2023 | 254,658 | N/A | 98,966 | 57,298 | 39,707(13) | 450,629 | | EVP, Chief Legal and | | | | | | | | | Risk Officer | | | | | | | |

  39. Summary Compensation Table for 2023

    | (1) Includes salary amounts paid and salary amounts deferred by the individual named pursuant to Horizon’s Thrift Plan and the 2005 Supplemental Executive Retirement Plan (“SERP”). | | (2) Messrs. Prame, Secor, and Etzler and Mses. DeRuiter and Kerber are eligible to receive annual bonuses under the Executive Officer Bonus Plan, and if such bonuses are received for a given year, the SEC rules provide that they are to be reported in the Non-Equity Incentive Plan Compensation column of this table. | | (3) The amounts in this column reflect the aggregate grant date fair value of option awards during the last three fiscal years in accordance with FASB ASC Topic 718. For a discussion of the assumptions used in the calculation of the option awards reported in this column, please see Note 20 of the Notes to Consolidated Financial Statements in Horizon’s 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission. | | (4) Messrs. Prame, Secor, and Etzler and Mses. DeRuiter and Kerber received payments under Horizon’s Executive Officer Bonus Plan. (For more information about the Bonus Plan and these payments see the discussion above in the Compensation Discussion and Analysis - Annual Performance-Based Cash Incentive Compensation.) | | (5) The individuals named in the table also received certain perquisites, but the incremental costs of providing the perquisites did not exceed the $10,000 disclosure threshold. | | (6) Effective June 1, 2023, Mr. Dwight stepped down as CEO of Horizon and Horizon Bank, and he subsequently retired from Horizon and Horizon Bank effective as of July 3, 2023. See “Payments to Craig M. Dwight Upon Retirement” beginning on page 50 below for a description of the amounts payable to Mr. Dwight under his employment agreement. | | (7) Mr. Prame was appointed Chief Executive Officer of Horizon and Horizon Bank effective as of June 1, 2023, and prior to that he served as President of Horizon and Horizon Bank during 2023. The amounts shown in this table for Mr. Prame for 2023 represent all amounts earned by Mr. Prame for his service as both President and Chief Executive Officer. | | (8) Includes Horizon’s matching contributions of $13,200 under the Thrift Plan, $26,250 under the SERP and $62,402 in dividends on performance and restricted stock. Amount also includes the following termination payments to Mr. Dwight paid or accrued under his employment agreement: (i) $311,932 representing Mr. Dwight’s remaining annual base salary through July 3, 2023 and (ii) $392,430 representing the full amount of Mr. Dwight’s target bonus for 2023. See “Payments to Craig M. Dwight Upon Retirement” below. | | (9) Includes Horizon’s matching contributions of $13,200 under the Thrift Plan, $20,237 under the SERP and $19,009 in dividends on performance and restricted stock. |

  40. Summary Compensation Table for 2023

    | (10) Includes Horizon’s matching contributions of $12,795 under the Thrift Plan, $30,465 under the SERP and $25,169 in dividends on performance and restricted stock. | | (11) Includes Horizon’s matching contributions of $13,200 under the Thrift Plan, $35,000 under the SERP and $14,806 in dividends on performance and restricted stock. | | (12) Includes Horizon’s matching contributions of $10,825 under the Thrift Plan, $35,000 under the SERP and $20,647 in dividends on performance and restricted stock. | | (13) Includes Horizon’s matching contributions of $12,767 under the Thrift Plan, $15,784 under the SERP and $11,156 in dividends on performance and restricted stock. |

  41. Summary Compensation Table for 2023

    During 2023, Mr. Prame and, beginning on November 6, 2023, Mr. Secor had written employment agreements with Horizon providing for them to receive, among other things, base salary, to participate in all other incentive compensation and benefit programs offered to executive officers of Horizon and Horizon Bank, and to receive additional post-termination compensation upon termination or a change in control. In addition, Mr. Dwight’s employment agreement contained provisions regarding certain payments to be made to Mr. Dwight upon the termination of the agreement due to his retirement. Certain amounts included in the Summary Compensation Table for Mr. Dwight under the column “All Other Compensation” represent termination payments to Mr. Dwight paid or accrued under his employment agreement. No amounts are included in the Summary Compensation Table that reflect amounts paid or accrued to Mr. Prame or Mr. Secor pursuant to their employment agreements as a result of any termination or change in control. For a more detailed discussion of the employment agreements, see “Potential Payments Upon Termination or Change in Control” below. For a discussion of the amounts payable to Mr. Dwight under his employment agreement upon his retirement, see “Payments to Craig M. Dwight Upon Retirement” below.

  42. Outstanding Equity Awards at Fiscal Year–End 2023

    Outstanding Equity Awards at Fiscal Year–End 2023 The following table presents information on stock options, restricted stock, and performance shares held by the named executive officers on December 31, 2023.

  43. Outstanding Equity Awards at Fiscal Year–End 2023

    | | Option Awards | | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#)(1) | Number of Securities Underlying Unexercised Options Unexercisable (#)(2) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | | Craig M. Dwight | 10,330 | — | N/A | $16.76 | March 21, 2027 | | | 8,629 | — | N/A | 20.11 | March 20, 2028 | | | 11,261 | — | N/A | 16.74 | March 19, 2029 | | Thomas M. Prame | N/A | N/A | N/A | N/A | N/A | | Mark E. Secor | 2,809 | — | N/A | 16.76 | March 21, 2027 | | | 2,440 | — | N/A | 20.11 | March 20, 2028 | | | 4,593 | — | N/A | 16.74 | March 19, 2029 | | Kathie A. DeRuiter | 2,407 | — | N/A | 16.76 | March 21, 2027 | | | 2,157 | — | N/A | 20.11 | March 20, 2028 | | | 3,513 | — | N/A | 16.74 | March 19, 2029 | | Lynn M. Kerber | N/A | N/A | N/A | N/A | N/A | | Todd A. Etzler | N/A | N/A | N/A | N/A | N/A |

  44. Outstanding Equity Awards at Fiscal Year–End 2023

    | (1) All options have a ten-year life with pro-rata vesting over a three- or five-year period from the grant date. | | (2) The shares represented could not be acquired by the named executive officers as of December 31, 2023. |

  45. Outstanding Equity Awards at Fiscal Year–End 2023

    | | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) | | Craig M. Dwight | 62,763 | $898,139 | 47,030 | $672,999 | | Thomas M. Prame | 15,253 | 218,270 | 21,015 | 300,725 | | Mark E. Secor | 16,046 | 229,618 | 24,186 | 346,102 | | Kathie A. DeRuiter | 4,678 | 66,942 | 18,715 | 267,812 | | Lynn M. Kerber | 14,324 | 204,976 | 17,301 | 247,577 | | Todd A. Etzler | 3,653 | 52,274 | 14,618 | 209,184 |

  46. Outstanding Equity Awards at Fiscal Year–End 2023

    | (1) Consists of awards of time-based restricted stock. | | (2) Consists of awards of performance shares. |

  47. Option Exercises and Stock Vested for 2023

    Option Exercises and Stock Vested for 2023 The following table presents information on the exercise by named executive officers of stock options during 2023 and the shares of restricted stock and performance share awards held by named executive officers that vested during 2023. On December 31, 2023, performance share awards were not yet determinable for the performance period ended December 31, 2023. A detailed description of how performance shares are earned and vested appears above in the Compensation Discussion and Analysis.

  48. Option Exercises and Stock Vested for 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Craig M. Dwight | — | $— | 29,004 | $329,289 | | Thomas M. Prame | — | — | — | — | | Mark E. Secor | — | — | 13,520 | 153,496 | | Kathie A. DeRuiter | — | — | 12,065 | 136,977 | | Lynn M. Kerber | — | — | 10,726 | 116,874 | | Todd A. Etzler | — | — | 6,197 | 70,356 |

  49. Option Exercises and Stock Vested for 2023

    | (1) Amounts reflecting value realized upon exercise of options are based on the difference between the closing price for a share on the date of exercise and the exercise price for a share. No options were exercised in 2023. |

  50. Nonqualified Deferred Compensation for 2023

    Nonqualified Deferred Compensation for 2023 The following table presents information on compensation deferred by and matching contributions for each of the named executive officers under either or both the Frozen SERP and 2005 SERP, which plans are discussed above in the Compensation Discussion and Analysis.

  51. Nonqualified Deferred Compensation for 2023

    | Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(1) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | | Craig M. Dwight | $52,500 | $26,250 | $133,808 | $— | $2,850,009 | | Thomas M. Prame | 40,654 | 20,327 | 1,479 | — | 62,459 | | Mark E. Secor | 60,930 | 30,465 | 14,075 | — | 1,321,189 | | Kathie A. DeRuiter | 70,000 | 35,000 | 21,515 | — | 1,103,592 | | Lynn M. Kerber | 75,000 | 35,000 | (4,047) | — | 203,491 | | Todd A. Etzler | 31,568 | 15,784 | (4,695) | — | 133,737 |

  52. Nonqualified Deferred Compensation for 2023

    | (1) Executive contributions are included in the “Salary” column of the Summary Compensation Table and registrant contributions are included in the “All Other Compensation” column of the Summary Compensation Table. |

  53. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control Horizon and Horizon Bank have agreements with the named executive officers and plans in which the named executive officers participate that provide for benefits upon the resignation, severance, retirement or other termination of the named executive officers. On January 17, 2023, the Board approved the appointment of Thomas M. Prame to serve as the Chief Executive Officer of both Horizon and Horizon Bank, effective as of June 1, 2023. In connection with his appointment as Chief Executive Officer, Horizon and Horizon Bank entered into an Amended and Restated Employment Agreement with Mr. Prame effective as of June 1, 2023. In addition, in connection with Mark E. Secor’s transition from his position, Horizon and Horizon Bank entered into an Employment Agreement with Mr. Secor, effective as of November 6, 2023. The section below entitled “Employment Agreements” includes a description of the provisions of Mr. Prame’s amended and restated employment agreement and Mr. Secor’s employment agreement applicable with respect to a termination of employment. Mr. Dwight was a party to a second amended and restated employment agreement, effective January 1, 2023, which terminated upon Mr. Dwight’s retirement from Horizon on July 3, 2023. Mr. Dwight’s employment agreement contained provisions regarding certain payments to be made to Mr. Dwight upon the termination of the agreement due to his retirement. The amounts paid to Mr. Dwight under the provisions of his employment agreement in connection with his retirement from Horizon are set forth below in “Payments to Craig M. Dwight Upon Retirement.”

  54. Other Benefits Upon Termination or Change in Control

    Other Benefits Upon Termination or Change in Control A primary reason behind Horizon’s proposed 2021 Omnibus Equity Incentive Plan is to alter the effect of a change in control on future equity incentive awards, in order to adopt double trigger vesting and/or acceleration of awards as the applicable circumstances occur. In the event of a Change in Control of Horizon (as defined in the 2021 Omnibus Plan), the surviving or successor company may continue to employ participants and may continue or assume the participant’s awards under the 2021 Omnibus Plan in their original or modified form or may replace some or all of such awards with substitute awards. In any such case, the change in control itself will not accelerate the vesting of any awards. However, if within two years after the change in control, the participant experiences an involuntary termination other than for cause, then (i) outstanding stock options and SARs that are not yet fully exercisable shall immediately become exercisable and remain exercisable in accordance with their terms, and (ii) all other unvested awards, whether service or performance-based, shall immediately become fully vested and non-forfeitable, with performance goals deemed to have been satisfied at the target levels. The definition of “Change in Control” in the 2021 Omnibus Plan is materially the same as the definition in the 2013 Omnibus Plan and includes: i.Merger or Consolidation. Any merger, consolidation or similar transaction which involves Horizon or the Bank and in which persons who are the stockholders of Horizon or the Bank immediately prior to the transaction own, immediately after the transaction, shares of the surviving or combined entity which possess voting rights equal to or less than 50% of the voting rights of all stockholders of such entity, determined on a fully-diluted basis; ii.Asset Sale or Lease. Any sale, lease, exchange, transfer or other disposition of all or substantially all of the consolidated assets of Horizon or the Bank; iii.Stock Sale and Tender Offers. Any tender, exchange, sale or other disposition (other than disposition of the stock of Horizon or the Bank in connection with bankruptcy, insolvency, foreclosure, receivership or other similar transactions) or purchase (other than purchases by a Horizon or Bank-sponsored employee benefit plan, or purchases by members of the Board of Directors of Horizon or the Bank) of shares of stock which represent more than 25% of the voting power of Horizon or the Bank; or iv.Reconstitution of Board. During any period of two consecutive years, individuals who at the date of the adoption of the 2021 Omnibus Plan constitute the Board, cease for any reason to constitute at least a majority thereof, unless the election of each director at the beginning of the period has been approved by directors representing at least a majority of the directors then in office. Notwithstanding the foregoing, a Change in Control will not be deemed to have occurred (i) as a result of the issuance of stock by Horizon in a public offering; or (ii) due to stock ownership by any employee benefit plan sponsored by Horizon. Existing awards remain subject to the provisions of the two plans currently in effect, as described in this section. In the event of a Change in Control of Horizon, the recipient of stock options, shares of restricted stock, and performance share awards granted to executive officers under the 2003 Omnibus Plan or the 2013 Omnibus Plan (collectively, “Omnibus Plans”) that are then outstanding and that either are not then exercisable or are subject to any restrictions will become immediately exercisable, and all restrictions will be removed, as of the first date that the change in control has been deemed to have occurred. Any performance criteria will be deemed to have been satisfied at the target level specified in the award. In addition, stock options and any time-based restricted stock granted to executive officers will be vested and fully exercisable as of the date of death, disability, or retirement of the executive officer. Under the Omnibus Plans, if a change in control had occurred as of December 31, 2023, the stock options, restricted stock and performance share awards granted to executive officers that were not previously vested would have become fully vested as of that date. The Omnibus Plans are discussed in more detail above in the Compensation Discussion and Analysis. The outstanding stock options and performance share awards for the executive officers are discussed in more detail in the discussion of Outstanding Equity Awards at Fiscal Year-End for 2023.

  55. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS The following table presents information about our compensation of members of the Board of Directors. Information on the compensation received by Mr. Prame, who is a named executive officer, is included in the Summary Compensation Table above. Mr. Prame does not receive any additional compensation for service on the Board of Directors. In addition, Mr. Dwight, who was an employee of Horizon during a portion of 2023 in addition to his service as a director, received no additional compensation from Horizon for his service as director prior to his retirement. Upon his retirement as an employee of Horizon, Mr. Dwight continued as Chairman of the Board of Directors of Horizon and Horizon Bank without director compensation through January 1, 2024.

  56. Director Compensation for 2023

    Director Compensation for 2023

  57. Director Compensation for 2023

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) | | Susan D. Aaron(1) | $47,090 | $34,993 | $82,083 | | Eric P. Blackhurst | 50,007 | 34,993 | 85,000 | | Lawrence E. Burnell | 49,382 | 34,993 | 84,375 | | James B. Dworkin | 47,923 | 34,993 | 82,916 | | Julie S. Freigang | 50,007 | 34,993 | 85,000 | | Michele M. Magnuson | 60,632 | 34,993 | 95,625 | | Peter L. Pairitz | 52,507 | 34,993 | 87,500 | | Steven W. Reed | 55,007 | 34,993 | 90,000 | | Spero W. Valavanis | 47,090 | 34,993 | 82,083 | | Vanessa Williams | 45,007 | 34,993 | 80,000 |

  58. Director Compensation for 2023

    | (1) Susan D. Aaron retired from the Board, effective as of December 31, 2023. |

  59. Director Compensation for 2023

    Horizon paid each of its non-employee directors a cash retainer of $45,000 and a retainer in common shares equal in value to $35,000 for their services in 2023. Active employees of Horizon or Horizon Bank receive no separate compensation for their services as directors, including Mr. Prame who serves on the Board of Directors of Horizon Bank. The Chair of the Compensation Committee receives an additional $7,500, the Chair of the Corporate Governance and Nominating Committee receives an additional $5,000, the Chair of the Enterprise Risk Management and Credit Policy Committee receives an additional $7,500, the Chair of the Audit Committee receives an additional $10,000 and the Chairs of the Asset Liability Committee, and Cyber committee receive an additional $5,000. The Lead Director receives an additional fee of $10,000. Directors do not receive additional compensation for attending meetings of committees of the Board or for special assignments or meetings. In April 2012, the Board adopted Ownership Guidelines that require each independent director to maintain ownership of common shares having a value equal to at least three times their annual retainer. The Ownership Guidelines are discussed above in the “Stock Ownership Guidelines” section under “Corporate Governance.” All of the members of the Horizon Board of Directors also serve as directors of Horizon Bank, which is an Indiana state bank. All of the directors satisfy the Ownership Guidelines. Horizon sponsors a Directors’ Deferred Compensation Plan, which allows non-employee directors of Horizon and Horizon Bank to elect to defer the receipt of fees for their services. Earnings on fees deferred under the plan are based on the five-year Treasury rate plus 200 basis points but not to exceed 120% of the Applicable Federal Long-Term Rate for monthly compounding. The deferred fees may be invested in Horizon common shares. Distributions of deferred fees are made to participants or their beneficiaries in a lump sum or annual installments, or in Horizon common shares, upon death or disability of the participants or as designated by participants. Participants have no rights to amounts deferred other than rights as general creditors of Horizon.