German American Bancorp Inc

This non‑binding "say-on-pay" proposal asks shareholders to approve the compensation of the Named Executive Officers as disclosed in the proxy. Management frames the program as pay‑for‑performance, using a balanced scorecard that combines short‑term cash incentives and long‑term restricted stock awards tied to multi‑year adjusted ROE, ROA and EPS growth measures, with minimum net income triggers and clawback provisions. The Board and Compensation Committee engaged an independent consultant and benchmarked pay against a peer group; they report 2025 pay decisions reflect the consultant’s input and earlier shareholder support (≈96% in 2025 for 2024 pay). Management seeks the advisory approval to reaffirm alignment with shareholders and to signal continued support for the incentive design and governance features (vesting, ownership requirements, anti‑repricing rules). The vote is advisory and nonbinding, but the Board commits to consider the outcome in future compensation governance. A vote FOR indicates shareholder endorsement of the compensation philosophy, metrics, and implementation (including adjustments the Board made to exclude certain merger‑related or non‑core items). A vote AGAINST or significant opposition could prompt the Committee to reexamine pay design, target setting, or disclosure practices and to engage more with investors. The company emphasizes that awards are capped, that both short‑ and long‑term incentives are tied to measurable financial and quality metrics, and that the Committee retains discretion to ensure awards reflect appropriate performance and risk mitigation.

This management proposal requests shareholder approval to amend Article V of the Articles to increase the number of authorized common shares from 45,000,000 to 90,000,000 (raising total authorized capital stock to 90,750,000 including 750,000 preferred shares). The Board explains the change is intended to provide flexibility to raise capital when needed and to issue shares in connection with acquisitions or other corporate transactions without the delay and expense of seeking shareholder approval each time. As of the record date, the Company had ~37.6 million shares outstanding, ~455k reserved for equity incentive plans and 750k reserved for the employee stock purchase plan, leaving limited unreserved shares (≈6.2 million). The Board emphasizes that holders have no preemptive rights and that issuance could dilute existing shareholders, but states it does not view the increase as an anti‑takeover device and currently has no plans to issue additional shares beyond those reserved. Shareholder approval requires more votes cast for than against, provided a majority of outstanding shares is represented; if approved the amendment becomes effective upon filing with the Indiana Secretary of State following Department of Financial Institutions review. The principal risk to shareholders is potential dilution if the Board later issues a substantial number of new shares; conversely, the benefit is faster access to capital and transactional flexibility that can support strategic growth or M&A. Investors should weigh the dilution risk against the company’s capital needs, M&A strategy (including recent Heartland merger activity), and the Board’s governance commitments around use of authorized shares.