DEF 14A of Horizon Bancorp Inc /In/
Filed Mar 17, 2025 · FY20240000706129-25-000040
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: •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 3: The advisory vote to approve executive compensation (Proposal 2), and the ratification of the independent registered public accounting firm (Proposal 3) 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.
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 eleven 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.
Nominees for Election as Class of 2028 Directors
Nominees for Election as Class of 2028 Directors The terms of Kevin W. Ahern, Eric P. Blackhurst, Craig M. Dwight, and Brian W. Maass as directors will end at the Annual Meeting. Craig M. Dwight submitted notice to the Board of Directors on February 24, 2025 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 2025 annual meeting of shareholders. The decision by Mr. Dwight to not stand for re-election was not a result of any disagreement with the Board or management of Horizon or Horizon Bank. Therefore, the three nominees for re-election to the Board of Directors are Kevin W. Ahern, Eric P. Blackhurst, and Brian W. Maass. On February 25, 2025, the Board adopted a resolution, that, effective at the close of the 2025 annual meeting, the Board positions will be reduced to 10. 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.
Nominees for Election as Class of 2028 Directors
| The Board of Directors unanimously recommends that the shareholders vote “FOR” the election of the three nominees. (Item 1 on the Proxy Card) |
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, responsibility, and performance as determined in the detailed annual performance reviews discussed above. The salaries of Thomas M. Prame, Chief Executive Officer, and John M. Stewart, Executive Vice President and Chief Financial Officer, are also impacted by written employment agreements with Horizon and Horizon Bank. Mr. Secor’s employment agreement, effective November 6, 2023, expired May 20, 2024. 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. Stewart’s appointment as Executive Vice President and Chief Financial Officer, he entered into an employment agreement effective as of May 20, 2024, which provides that Mr. Stewart will receive an annual base salary of $440,000, to be reviewed and potentially increased annually (but not decreased) by Horizon’s Compensation Committee. 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.” 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. Mr. Prame’s base salary as President and CEO did not change from his June 1, 2023 employment agreement. It was determined that his base salary would be reviewed for 2025 after completing more than one year in the role. The salary increases for 2024 for the other named executive officers (other than Mr. Stewart, who was appointed in the middle of the fiscal year) ranged from 3.50% to 9.50%. Mr. Secor’s base salary remained $347,110 until May 20, 2024 and adjusted to $300,000 when Mr. Secor assumed his new role as Chief Administration Officer; Ms. DeRuiter’s salary was increased to $335,837 from $324,480 (3.50%); Ms. Kerber’s salary was increased to $355,306 from $324,480 (9.50%), and Mr. Etzler’s salary was increased to $272,944 from $254,658 (7.18%). The salary increases were based on the Compensation Committee’s in-depth review of FW Cook’s 2023 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.
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, Stewart, and Etzler, and Mses. DeRuiter and Kerber currently participate in the 2024 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. Stewart’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 two parts, short-term and long-term metrics, Part A and Part B, respectively, with total bonus opportunities weighted fifty percent each. The metrics are a mix of financial and strategic objectives. Part A metrics place heavier weight on financial outcomes in order to align bonus payouts with shareholders’ interests for the given year. Part B metrics place heavier weight on strategic outcomes, 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 2024 bonus matrix for each named executive officer are as follows:
Annual Performance–Based Cash Incentive Compensation
| Named Executive Officer & Category | Short–Term Metric Weighting “Part A” | Long–Term Metric Weighting “Part B” | | 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. Stewart) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 60% | | | Positioning Horizon for Future Success | | 20% | | Enterprise Risk Management | 20% | 60% | | Project Management | 20% | 20% | | Executive Vice President and Chief Administration Officer (Mr. Secor) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 60% | | | Positioning Horizon for Future Success | | 20% | | Enterprise Risk Management | 20% | 60% | | Project Management | 20% | 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 | 25% | 40% | | Project Management | 25% | 20% | | Professional Development | | 20% | | Executive Vice President and Chief Commercial Banking Officer (Ms. Kerber) | | | | Financial Outcome of Horizon (Net Income & Efficiency) | 30% | | | Financial Outcomes for Areas of Direct Responsibility | 45% | | | Positioning Horizon for Future Success | | 30% | | Enterprise Risk Management | 15% | 70% | | Project Management | 10% | | | 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% |
Annual Performance–Based Cash Incentive Compensation
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 financial target awards to be challenging, but reasonably attainable. 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 2024, 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, 85%; Mr. Stewart, 70%; Mr. Secor, 55%; 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 2024 being 70% for Mr. Prame; 60% for Mr. Stewart; 60% for Mr. Secor; 50% for Ms. DeRuiter; 75% 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 Mr. Prame’s bonuses, the Compensation Committee used established short- and long-term goals for 2024 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 2024, 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%. 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, Stewart, Secor, and Etzler, and Mses. DeRuiter and Kerber had an opportunity to earn under the Bonus Plan for 2024 are presented below in the Grants of Plan-Based Awards table. The Compensation Committee has reviewed the Bonus Plan for 2024, and based on that review, the Compensation Committee has concluded that the Bonus Plan, as designed for 2024, 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.
Long–Term Performance–Based Equity and/or Cash Incentive Program
Long–Term Performance–Based Equity and/or Cash Incentive Program In 2014, Horizon’s shareholders approved the 2013 Omnibus Equity Incentive Plan, which became effective for a ten-year term beginning February 1, 2013, and which was later amended and restated (the “2013 Omnibus Plan”). 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 2013 Omnibus 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 Omnibus Plan remain outstanding but no new awards may be granted under the 2013 Omnibus 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 Omnibus 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 2021 Omnibus Plan, which may vest on a time basis or pursuant to performance metrics set by the Compensation Committee from time to time: •Incentive and nonqualified stock options •Stock appreciation rights •Restricted stock •Restricted stock units 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) shares as its preferred form of long-term performance-based equity compensation in addition to the awards of time-based restricted stock. 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. Horizon does not grant options or stock appreciation rights as part of its long-term incentive program. 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 of analysts 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.
Post–Termination Compensation and Benefits
Post–Termination Compensation and Benefits Upon termination of either Mr. Prame or Mr. Stewart from employment in certain situations not related to a change in control of Horizon, Mr. Prame and Mr. Stewart (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 and Horizon Bank previously were parties to an employment agreement with Mark E. Secor. As previously disclosed, Mr. Secor transitioned from the role of Executive Vice President and Chief Financial Officer to Executive Vice President and Chief Administration Officer effective May 20, 2024. In connection with this transition, Mr. Secor’s employment agreement expired pursuant to its terms on May 20, 2024. Horizon Bank entered into an amended Change in Control Agreement with Mr. Prame effective June 1, 2023, a new Change in Control Agreement with Mr. Stewart effective May 20, 2024, an amended Change in Control Agreement with Mr. Secor effective May 20, 2024, and new or amended Change in Control Agreements with 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.” 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 Internal Revenue Code (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 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%. As discussed below, the 2005 SERP has been replaced by a new Deferred Compensation Plan effective January 1, 2025, but the 2005 SERP will continue to govern participant accounts established under the 2005 SERP. 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. In December 2024, the Board of Directors amended and restated the SERP to remove all investments in Horizon common shares and remove the ability to further invest in Horizon common shares.
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. For 2024, our last completed fiscal year, (i) the median of the annual total compensation of all employees (other than Mr. Prame) was $45,159; and (ii) the annual total compensation of Mr. Prame, as reported in the Summary Compensation Table included elsewhere in this Proxy Statement, was $1,640,847. Based on this information, for 2024, the ratio of the annual total compensation of Mr. Prame to the median of the annual total compensation of all employees was 36.3 to 1; in other words, Mr. Prame’s annual total compensation was 36.3 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, 2024, 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 2024, 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 2024 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. 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.
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.”
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) | | 2024 | N/A | $1,640,847 | N/A | $1,901,962 | $839,172 | $951,386 | 104.69 | 132.44 | $35.4 | 0.45% | | 2023 | $1,993,309 | 1,110,057 | $2,159,459 | 1,178,271 | 560,562 | 564,155 | 100.47 | 100.70 | 28.0 | 0.36% | | 2022 | 1,328,910 | N/A | 991,735 | N/A | 648,922 | 550,248 | 63.12 | 81.23 | 93.4 | 1.24% | | 2021 | 1,402,359 | N/A | 1,697,391 | N/A | 660,875 | 787,483 | 138.19 | 144.69 | 87.1 | 1.34% | | 2020 | 1,281,359 | N/A | 1,170,072 | N/A | 597,260 | 584,487 | 86.18 | 90.39 | 68.5 | 1.22% |
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”) as set forth in the definitive proxy statement of Horizon covering the fiscal year indicated, as filed with the SEC. | | (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 2024 and 2023 in the “Total” column of the Summary Compensation Table (“SCT”) as set forth in this proxy statement. See “Executive Compensation – Executive Compensation Tables – Summary Compensation Table for 2024.” | | (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: |
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 | | 2024 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | 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 |
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 | | 2024 | $600,000 | $549,996 | $405,000 | $85,851 | $1,640,847 | $(549,996) | $811,111 | $1,901,962 | | 2023 | 580,769 | 299,981 | 176,771 | 52,536 | 1,110,057 | (299,981) | 368,195 | 1,178,271 |
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 CTSCT, as set forth in the proxy statement covering the corresponding year, as filed with the SEC. | | (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, as set forth in the proxy statement covering the corresponding year, as filed with the SEC. | | (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, as set forth in the proxy statement covering the corresponding year, as filed with the SEC. | | (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, as set forth in the proxy statement covering the corresponding year, as filed with the SEC. | | (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, as set forth in the proxy statement covering the corresponding year, as filed with the SEC. | | (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 the 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. |
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 2024, John R. Stewart, Mark E. Secor, Kathie E. DeRuiter, Lynn M. Kerber, and Todd A. Etzler; (ii) for 2023, Mark E. Secor, Kathie A. DeRuiter, Lynn M. Kerber, and Todd A. Etzler; (iii) for 2022, Mark E. Secor, Thomas M. Prame, Kathie A. DeRuiter, and Lynn M. Kerber; (iv) for 2021, James D. Neff, Mark E. Secor, Dennis J. Kuhn, and Kathie A. DeRuiter; and (v) 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: |
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 | | 2024 | $308,903 | $279,600 | $109,489 | $141,180 | $839,172 | $(279,600) | $391,814 | $951,386 | | 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 | (243,466) | 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 |
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. |
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: •Revenue •Return on Average Assets •Relative TSR (the Company’s TSR as compared to a peer group established by the Compensation Committee)
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.
Compensation Actually Paid and Total Shareholder Return
Compensation Actually Paid and Total Shareholder Return The amount of compensation actually paid to Mr. Prame and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Messrs. Prame) are aligned with the Company’s cumulative TSR over the five years presented in the table. The alignment of compensation actually paid with the Company’s cumulative TSR over the period presented is a result of a significant portion of the compensation actually paid to Messrs. Prame and Dwight and to the other NEOs being 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.
Compensation Actually Paid and Net Income
Compensation Actually Paid and Net Income The amount of compensation actually paid to Mr. 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. Net income increased between 2023 and 2024 notwithstanding the restructure of the balance sheet in the fourth quarter of 2024 that reduced net income, while the amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Prame) increased. The Company’s stock compensation awarded in the management transition and contract payments are the primary factors in the increase.
Compensation Actually Paid and Return on Average Assets
Compensation Actually Paid and Return on Average Assets The amount of compensation actually paid to Mr. Prame and the average amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Prame) are generally aligned with the Company’s return on average assets for the five years presented in the table. Return on average assets increased between 2023 and 2024 notwithstanding that the restructure of the balance sheet, discussed above, reduced net income, while the amount of compensation actually paid to the Company’s NEOs as a group (excluding Mr. Prame) increased. This increase was primarily the result of the Company’s stock compensation awarded in the management transition and contract payments. 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.
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 five-year period presented in the table is aligned with compensation actually paid when comparing the TSR of the peer group presented over the five years presented in the table. The Company’s TSR during the five 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.”
Summary Compensation Table for 2024
Summary Compensation Table for 2024 The table below provides information with respect to the total compensation earned by or paid to the named executive officers for 2024.
Summary Compensation Table for 2024
| Name and | Year | Salary | Bonus | Stock Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | | Principal Position | | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($) | | Thomas M. Prame(6) | 2024 | 600,000 | N/A | 549,996 | 405,000 | 85,851(8) | 1,640,847 | | President/CEO | 2023 | 580,769 | N/A | 299,981 | 176,771 | 52,536 | 1,110,056 | | | 2022 | 200,961 | 50,000 | 203,800 | — | 1,600 | 456,361 | | John R. Stewart(7) | 2024 | 262,308 | 200,000 | 1,012,385 | 155,958 | 233,632(9) | 1,864,283 | | Chief Financial Officer | | | | | | | | | Kathie A. DeRuiter | 2024 | 335,837 | N/A | 134,327 | 88,157 | 65,521(10) | 623,842 | | EVP, Senior | 2023 | 324,480 | N/A | 129,788 | 56,784 | 63,006 | 574,058 | | Operations Officer | 2022 | 312,000 | N/A | 124,787 | 117,000 | 60,687 | 614,474 | | Todd A. Etzler | 2024 | 272,944 | N/A | 109,177 | 102,354 | 40,110(11) | 524,585 | | EVP, Chief Legal and | 2023 | 254,658 | N/A | 98,966 | 57,298 | 39,707 | 450,629 | | Risk Officer | | | | | | | | | Lynn M. Kerber | 2024 | 355,306 | N/A | 142,109 | 144,343 | 69,123(12) | 710,881 | | EVP, Chief Commercial | 2023 | 324,480 | N/A | 129,788 | 73,008 | 66,500 | 593,776 | | Banking Officer | 2022 | 284,233 | N/A | 313,004 | 128,127 | 41,744 | 767,108 | | Mark E. Secor | 2024 | 318,119 | N/A | — | 56,635 | 297,515(13) | 672,269 | | EVP, Chief Administration | 2023 | 347,110 | N/A | 173,538 | 34,711 | 68,429 | 623,789 | | Officer | 2022 | 337,000 | N/A | 372,272 | 33,700 | 64,769 | 807,741 |
Summary Compensation Table for 2024
| (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) All of the named executive officers 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 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission. | | (4) Messrs. Prame, Stewart, 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) 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. | | (7) Mr. Stewart was appointed Executive Vice President and Chief Financial Officer of Horizon and Horizon Bank effective as of May 20, 2024. | | (8) For Mr. Prame, includes Horizon’s matching contributions of $13,200 under the Thrift Plan, $27,187 under the SERP and $45,434 in dividends on performance and restricted stock. |
Summary Compensation Table for 2024
| (9) Form Mr. Stewart, includes Horizon’s matching contributions of $5,500 under the Thrift Plan, $25,469 in dividends on performance and restricted stock and $202,663 in reimbursed moving expenses. | | (10) For Ms. DeRuiter, includes Horizon’s matching contributions of $12,905 under the Thrift Plan, $35,000 under the SERP and $17,616 in dividends on performance and restricted stock. | | (11) For Mr. Etzler, includes Horizon’s matching contributions of $11,452 under the Thrift Plan, $14,861 under the SERP and $13,797 in dividends on performance and restricted stock. | | (12) For Ms. Kerber, includes Horizon’s matching contributions of $10,449 under the Thrift Plan, $35,000 under the SERP and $23,674 in dividends on performance and restricted stock. | | (13) For Mr. Secor, includes Horizon’s matching contributions of $13,137 under the Thrift Plan, $35,000 under the SERP, $22,568 in dividends on performance and restricted stock and $226,810 pursuant to payments from employment agreement. |
Summary Compensation Table for 2024
During 2024, Mr. Prame, Mr. Stewart (beginning on May 20, 2024) and Mr. Secor (beginning on November 6, 2023 and expiring on May 20, 2024) had written employment agreements with Horizon providing for them to receive, among other things, base salary, to participate in all other incentive compensation and benefit programs offered to executive officers of Horizon and Horizon Bank, and to receive additional post-termination compensation upon termination or a change in control. No amounts are included in the Summary Compensation Table that reflect amounts paid or accrued to Mr. Prame, Mr. Stewart, or Mr. Secor pursuant to their employment agreements as a result of any termination or change in control. For a more detailed discussion of the employment agreements, see “Potential Payments Upon Termination or Change in Control” below.
Outstanding Equity Awards at Fiscal Year–End 2024
Outstanding Equity Awards at Fiscal Year–End 2024 The following table presents information on stock options, restricted stock, and performance shares held by the named executive officers on December 31, 2024.
Outstanding Equity Awards at Fiscal Year–End 2024
| | Option Awards | | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#)(1) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | | Thomas M. Prame | N/A | N/A | N/A | N/A | N/A | | John R. Stewart | N/A | N/A | N/A | N/A | N/A | | 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 | | Todd A. Etzler | N/A | N/A | N/A | N/A | N/A | | Lynn M. Kerber | 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 |
Outstanding Equity Awards at Fiscal Year–End 2024
| (1) All options have a ten-year life with pro-rata vesting over a three- or five-year period from the grant date. |
Outstanding Equity Awards at Fiscal Year–End 2024
| | 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 ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Thomas M. Prame | 24,512 | 394,888 | 58,052 | 935,218 | | John R. Stewart | 79,590 | 1,282,195 | — | — | | Kathie A. DeRuiter | 5,780 | 93,116 | 23,122 | 372,495 | | Todd A. Etzler | 4,530 | 72,978 | 18,123 | 291,962 | | Lynn M. Kerber | 15,755 | 253,813 | 23,024 | 370,917 | | Mark E. Secor | 14,721 | 237,155 | 18,886 | 304,253 |
Outstanding Equity Awards at Fiscal Year–End 2024
| (1) Consists of awards of time-based restricted stock. | | (2) Consists of awards of performance shares. |
Option Exercises and Stock Vested for 2024
Option Exercises and Stock Vested for 2024 The following table presents information on the exercise by named executive officers of stock options during 2024 and the shares of restricted stock and performance share awards held by named executive officers that vested during 2024. On December 31, 2024, performance share awards were not yet determinable for the performance period ended December 31, 2024. A detailed description of how performance shares are earned and vested appears above in the Compensation Discussion and Analysis.
Option Exercises and Stock Vested for 2024
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Thomas M. Prame | — | — | — | — | | John R. Stewart | — | — | — | — | | Kathie A. DeRuiter | — | — | 12,065 | 136,977 | | Todd A. Etzler | — | — | 6,197 | 70,356 | | Lynn M. Kerber | — | — | 10,726 | 116,874 | | Mark E. Secor | — | — | 13,520 | 153,496 |
Option Exercises and Stock Vested for 2024
| (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 2024. |
Nonqualified Deferred Compensation for 2024
Nonqualified Deferred Compensation for 2024 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.
Nonqualified Deferred Compensation for 2024
| 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 ($) | | Thomas M. Prame | $54,374 | $27,187 | $5,595 | $— | $149,615 | | John R. Stewart | — | — | — | — | — | | Kathie A. DeRuiter | 70,000 | 35,000 | 179,268 | — | 1,387,859 | | Todd A. Etzler | 29,722 | 14,861 | 26,102 | — | 204,422 | | Lynn M. Kerber | 80,000 | 35,000 | 40,075 | — | 358,566 | | Mark E. Secor | 70,000 | 35,000 | 246,035 | — | 1,672,224 |
Nonqualified Deferred Compensation for 2024
| (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. |
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 May 10, 2024, the Board approved the appointment of John R. Stewart to serve as the Executive Vice President and Chief Financial Officer of both Horizon and Horizon Bank, effective as of May 20, 2024. In connection with his appointment as Executive Vice President and Chief Financial Officer, Horizon and Horizon Bank entered into an Employment Agreement with Mr. Stewart, effective as of May 20, 2024. The section below entitled “Employment Agreements” includes a description of the provisions of Mr. Stewart’s employment agreement applicable with respect to a termination of employment. Mr. Secor was a party to an Employment Agreement, effective November 6, 2023, as amended on May 10, 2024, which expired in accordance with its terms on May 20, 2024. Mr. Secor did not receive any payments from Horizon or Horizon Bank in respect of or upon the expiration of his employment agreement. The amounts paid to Mr. Secor under the provisions of his employment agreement, while it was in effect, are set forth below in the tables below. Mr. Secor remains a party to an Amended and Restated Change in Control Agreement entered into with Horizon Bank dated May 10, 2024, as described in “Change in Control Agreements” below.
Amended Employment Agreement with Mark E. Secor
Amended Employment Agreement with Mark E. Secor In connection with his transition, on November 6, 2023, Horizon and Horizon Bank entered into an Employment Agreement with Mr. Secor, which was amended on May 10, 2024 (the “Secor Employment Agreement”). The Secor Employment Agreement expired in accordance with its terms on May 20, 2024. Mr. Secor continues to serve as Executive Vice President and Chief Administration Officer of Horizon and Horizon Bank and is no longer a party to an employment agreement with Horizon or Horizon Bank. The table below includes a brief description of the material provisions of the Secor Employment Agreement relevant to his compensation for 2024. The Secor Employment Agreement did not provide for any payments to Mr. Secor upon a change in control, because any payments or benefits payable to him upon a change in control are addressed in a Change in Control Agreements for Mr. Secor, as more fully described below in “Change in Control Agreements.”
Amended Employment Agreement with Mark E. Secor
| Key Terms and Conditions | Description | | Term | •Term began on November 6, 2023 and expired on May 20, 2024. | | Salary & Benefits | •Entitled to an annual base salary of $347,110 through the end of the term. •Entitled to participate in all incentive compensation programs generally available to executive officers of Horizon. •Entitled to participate in Horizon’s benefit plans and programs that are generally available to executive officers during the term, including health, dental and vision insurance; life and disability insurance; sick leave; holidays; and 401(k) plan participation | | Bonus Payments | •Mr. Secor received a cash bonus for 2024 of $53,255. Mr. Secor received a retention bonus of $173,555. |
Amended Employment Agreement with Mark E. Secor
Mr. Secor was not entitled to any benefits other than pursuant to life insurance policies as of December 31, 2024. Therefore, if Mr. Secor’s employment had terminated on December 31, 2024, the only amounts payable would have been life proceeds in the amount of $500,000 to Mr. Secor or to his estate. These amounts exclude stock options and other equity plan awards that vest upon a change in control (and, in the case of stock options and time-based restricted stock, upon retirement, disability or death), which are discussed below in “Other Benefits Upon Termination or Change in Control.”
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, 2024, 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 2024.
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.
Director Compensation for 2024
Director Compensation for 2024
Director Compensation for 2024
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) | | Kevin W. Ahern (1) | $45,009 | $39,991 | $85,000 | | Eric P. Blackhurst | 52,509 | 39,991 | 92,500 | | Lawrence E. Burnell | 52,509 | 39,991 | 92,500 | | Craig M. Dwight | 60,009 | 39,991 | 100,000 | | James B. Dworkin | 52,509 | 39,991 | 92,500 | | Julie S. Freigang | 52,509 | 39,991 | 92,500 | | Brian W. Maass (2) | 45,009 | 39,991 | 85,000 | | Michele M. Magnuson | 60,009 | 39,991 | 100,000 | | Peter L. Pairitz (3) | 38,542 | — | 38,542 | | Steven W. Reed | 55,009 | 39,991 | 95,000 | | Vanessa Williams | 49,384 | 39,991 | 89,375 |
Director Compensation for 2024
| (1) Mr. Ahearn joined the Board in January 2024. | | (2) Mr. Maass joined the Board in January 2024. | | (3) Mr. Pairitz retired from the Board, effective as of May 2, 2024. |
Director Compensation for 2024
Horizon paid each of its non-employee directors a cash retainer of $45,000 and a retainer in common shares equal in value to $40,000 for their services in 2024. 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 $7,500, the Chair of the Enterprise Risk Management and Credit Policy Committee receives an additional $7,500, the Chair of the Cyber committee receive an additional $7,500, The Chair of the Wealth Committee receives an additional $7,500, the Chair of the Audit Committee receives an additional $10,000 and the Lead Director receives an additional fee of $15,000. 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.