<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Citizens First Financial Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Douglas P. Faucette, Muldoon, Murphy & Faucette
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
CITIZENS FIRST FINANCIAL CORP.
301 BROADWAY
NORMAL, ILLINOIS 61761
(309) 452-1102
March 20, 1997
Fellow Shareholders:
You are cordially invited to attend the annual meeting of shareholders
(the "Annual Meeting") of Citizens First Financial Corp. (the "Company"), the
holding company for Citizens Savings Bank, F.S.B. (the "Bank"), Normal,
Illinois, which will be held on April 21, 1997, at 10:00 a.m. Central Time,
at the Holiday Inn, 8 Traders Circle, Normal, Illinois.
The attached Notice of the Annual Meeting and the Proxy Statement
describe the formal business to be transacted at the Annual Meeting.
Directors and officers of Citizens First Financial Corp., as well as a
representative of Geo. S. Olive & Co., LLC will be present at the Annual
Meeting to respond to any questions that our shareholders may have regarding
the business to be transacted.
The Board of Directors of Citizens First Financial Corp. has determined
that the matters to be considered at the Annual Meeting are in the best
interests of the Company and its shareholders. FOR THE REASONS SET FORTH IN
THE PROXY STATEMENT, THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
EACH MATTER TO BE CONSIDERED.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOUR
COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST BE
REPRESENTED, EITHER IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE
CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of the
Company and the Bank, I thank you for your continued interest and support.
Sincerely yours,
/s/ C. William Landefeld
----------------------------------
C. William Landefeld
President and Chief Executive Officer
<PAGE>
CITIZENS FIRST FINANCIAL CORP.
301 BROADWAY
NORMAL, ILLINOIS 61761
__________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 21, 1997
__________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the
"Annual Meeting") of Citizens First Financial Corp. (the "Company") will be
held on April 21, 1997, at 10:00 a.m. Central Time, at the Holiday Inn, 8
Traders Circle, Normal, Illinois.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of one director for a term of three years.
2. The ratification of Geo. S. Olive & Co., LLC as independent
auditors of the Company for the fiscal year ending December 31,
1997; and
3. Such other matters as may properly come before the meeting and at
any adjournments thereof, including whether or not to adjourn the
meeting.
The Board of Directors has established March 13, 1997, as the record
date for the determination of shareholders entitled to receive notice of and
to vote at the Annual Meeting and at any adjournments thereof. Only record
holders of the common stock of the Company as of the close of business on
such record date will be entitled to vote at the Annual Meeting or any
adjournments thereof. In the event there are not sufficient votes for a
quorum or to approve the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned in order to permit further
solicitation of proxies by the Company. A list of shareholders entitled to
vote at the Annual Meeting will be available at Citizens First Financial
Corp., 301 Broadway, Normal, Illinois 61761, for a period of ten days prior
to the Annual Meeting and will also be available at the Annual Meeting
itself.
By Order of the Board of Directors
/s/ Richard F. Becker
------------------------------
Richard F. Becker
Corporate Secretary
Normal, Illinois
March 20, 1997
<PAGE>
CITIZENS FIRST FINANCIAL CORP.
_______________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 21, 1997
_______________________
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to shareholders of Citizens
First Financial Corp. (the "Company") in connection with the solicitation by
the Board of Directors ("Board of Directors" or "Board") of proxies to be
used at the annual meeting of shareholders, to be held on April 21, 1997 (the
"Annual Meeting"), and at any adjournments thereof. This Proxy Statement is
first being mailed to record holders on or about March 20, 1997.
Regardless of the number of shares of common stock owned, it is
important that record holders of a majority of the shares be represented by
proxy or in person at the Annual Meeting. Shareholders are requested to vote
by completing the enclosed proxy card and returning it signed and dated in
the enclosed postage-paid envelope. Shareholders are urged to indicate their
vote in the spaces provided on the proxy card. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS OF THE COMPANY WILL BE VOTED IN ACCORDANCE WITH THE
DIRECTIONS GIVEN THEREIN. WHERE NO INSTRUCTIONS ARE INDICATED, SIGNED PROXY
CARDS WILL BE VOTED FOR THE APPROVAL AND RATIFICATION OF THE SPECIFIC
PROPOSALS PRESENTED IN THIS PROXY STATEMENT.
Other than the matters listed on the attached Notice of Annual Meeting
of Shareholders, the Board of Directors knows of no additional matters that
will be presented for consideration at the Annual Meeting. EXECUTION OF A
PROXY, HOWEVER, CONFERS ON THE DESIGNATED PROXY HOLDERS DISCRETIONARY
AUTHORITY TO VOTE THE SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT ON SUCH
OTHER BUSINESS, IF ANY, THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND
AT ANY ADJOURNMENTS THEREOF, INCLUDING WHETHER OR NOT TO ADJOURN THE ANNUAL
MEETING.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote personally at the
Annual Meeting.
The cost of solicitation of proxies on behalf of management will be
borne by the Company. In addition to the solicitation of proxies by mail,
Kissel-Blake, Inc., a proxy solicitation firm, will assist the Company in
soliciting proxies for the Annual Meeting and will be paid a fee of $2,800,
plus out-of-pocket expenses. Proxies may also be solicited personally or by
telephone by directors, officers and other employees of the Company and its
subsidiary, Citizens Savings Bank, F.S.B. ("Bank") without additional
compensation therefor. The Company will also request persons, firms and
corporations holding shares in their names, or in the name of their nominees,
which are beneficially owned by others, to send proxy material to and obtain
<PAGE>
proxies from such beneficial owners, and will reimburse such holders for
their reasonable expenses in doing so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of
shares of common stock of the Company ("Common Stock"), with each share
entitling its owner to one vote on all matters to be voted on at the Annual
Meeting, except as described below.
The close of business on March 13, 1997, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Annual
Meeting and at any adjournments thereof. The total number of shares of
Common Stock outstanding on the Record Date was 2,792,000 shares.
As provided in the Company's Certificate of Incorporation, record
holders of Common Stock who beneficially own in excess of 10% of the
outstanding shares of Common Stock (the "Limit") are not entitled to any vote
in respect of the shares held in excess of the Limit. A person or entity is
deemed to beneficially own shares owned by an affiliate of, as well as by
persons acting in concert with, such person or entity. The Company's
Certificate of Incorporation authorizes the Board of Directors (i) to make
all determinations necessary to implement and apply the Limit, including
determining whether persons or entities are acting in concert, and (ii) to
demand that any person who is reasonably believed to beneficially own stock
in excess of the Limit to supply information to the Company to enable the
Board of Directors to implement and apply the Limit.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote
(after subtracting any shares in excess of the Limit pursuant to the
Company's Certificate of Incorporation) is necessary to constitute a quorum
at the Annual Meeting. In the event that there are not sufficient votes for
a quorum or to approve or ratify any proposal at the time of the Annual
Meeting, the Annual Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of a director, the proxy card being provided by the
Board of Directors enables a shareholder to vote "FOR" the election of the
nominee proposed by the Board of Directors, or to "WITHHOLD" authority to
vote for the nominee being proposed. Under Delaware law and the Company's
Bylaws, directors are elected by a plurality of votes cast, without regard to
either (i) broker non-votes, or (ii) proxies as to which authority to vote
for the nominee being proposed is withheld.
As to the ratification of Geo. S. Olive & Co., LLC as independent
auditors of the Company and all other matters that may properly come before
the Annual Meeting, by checking the appropriate box, you may: (i) vote "FOR"
the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" with respect to
the item. Under the Company's Bylaws, unless otherwise required by law, all
such matters shall be determined by a majority of the votes cast, without
regard to either (a) broker non-votes, or (b) proxies marked "ABSTAIN" as to
that matter.
-2-
<PAGE>
Proxies solicited hereby will be returned to the Company's transfer
agent, Registrar and Transfer Company ("RTC"). The Board of Directors have
designated RTC to act as inspectors of election and tabulate the votes at the
Annual Meeting. RTC is not otherwise employed by, or a director of, the
Company or any of its affiliates. After the final adjournment of the Annual
Meeting, the proxies will be returned to the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to those persons believed
by management to be beneficial owners of more than 5% of the Company's
outstanding shares of Common Stock on the Record Date or as disclosed in
certain reports received to date regarding such ownership filed by such
persons with the Company and with the Securities and Exchange Commission
("SEC"), in accordance with Sections 13(d) and 13(g) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). Other than those persons
listed below, the Company is not aware of any person, as such term is defined
in the Exchange Act, that owns more than 5% of the Company's Common Stock as
of the Record Date.
<TABLE>
<CAPTION>
TITLE OF CLASS NAME AND ADDRESS OF NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES CLASS
- ------------------ ------------------------------- ----------- -------------
<S> <C> <C> <C>
Common Stock Citizens Savings Bank, F.S.B. 225,400(1) 8.07%
Employee Stock Ownership Plan
("ESOP")
301 Broadway
Normal, Illinois 61761
Common Stock Investors of America, Limited 182,650(2) 6.54
Partnership
1504 Highway, #395 N #8-00508
Gardnerville, Nevada 89410
Common Stock Tidal Insurance Limited 25,700(2) 0.92
c/o Global Corporate & Trust
Management, LTD
Zetlands, Nevis
West Indies
Common Stock FMR Corp
82 Devonshire Street
Boston, Massachusetts 02109 174,700(3) 6.26
</TABLE>
- ----------------------------
(1) Shares of Common Stock were acquired by the ESOP in the Bank's
conversion from mutual to stock form (the "Conversion"). The ESOP
Committee administers the ESOP. First Bankers Trust, N.A. has been
appointed as the corporate trustee for the ESOP ("ESOP Trustee"). The
ESOP Trustee, subject to its fiduciary duty, must vote all allocated
shares held in the ESOP in accordance with the instructions of the
participants. As of the Record Date, 32,200 shares have been allocated
to ESOP participants' accounts. Under the ESOP, unallocated shares held
in a suspense account will be voted by the ESOP Trustee in a manner
calculated to most accurately reflect the instructions received from
participants regarding the allocated stock so long as such vote is in
accordance with the provisions of the Employee Retirement Income
Security Act of 1974, as amended.
-3-
<PAGE>
(2) Based upon information disclosed in Schedules 13D filed with the SEC on
August 7, 1996. Investors of America, Limited Partnership ("Investors")
and Tidal Insurance Limited ("Tidal") disclosed that they had sole power
to vote or dispose of 182,650 and 25,700 shares of Common Stock,
respectively. Investors is the controlling shareholder of Tidal.
Investors disclaimed beneficial ownership of the Common Stock owned by
Tidal in its Schedule 13D. Tidal and Investors own an aggregate of
208,350 shares of Common Stock or 7.46%.
(3) Based upon information disclosed in Schedule 13G filed with the SEC on
February 14, 1997. FMR disclosed that it had sole power to vote or
direct no shares of Common Stock and sold power to dispose of or direct
the disposition of 174,700 shares of Common Stock. The Schedule 13G
discloses that Fidelity Management & Research Company, a wholly-owned
subsidiary of FMR Corp. and an investment adviser registered under the
Investment Advisers Act of 1940, is the sole beneficial owner of 174,700
shares of Common Stock as a result of acting as investment adviser to
various investment companies registered under Section 8 of the
Investment Company Act of 1940.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company presently consists of five (5)
directors. Each of the members of the Board of Directors of the Company also
presently serves as a director of the Bank. Directors are elected for
staggered terms of three years each, with a term of office of only one of the
three classes of directors expiring each year. Directors serve until their
successors are elected and qualified.
The one nominee proposed for election at the Annual Meeting is Lyle J.
Honegger.
In the event that such nominee is unable to serve or declines to serve
for any reason, it is intended that proxies will be voted for the election of
the balance of those nominees named and for such other persons as may be
designated by the present Board of Directors. The Board of Directors has no
reason to believe that any of the persons named will be unable or unwilling
to serve. UNLESS AUTHORITY TO VOTE FOR THE DIRECTORS IS WITHHELD, IT IS
INTENDED THAT THE SHARES REPRESENTED BY THE ENCLOSED PROXY CARD WILL BE VOTED
FOR THE ELECTION OF ALL NOMINEES PROPOSED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
ONE NOMINEE NAMED IN THIS PROXY STATEMENT.
-4-
<PAGE>
INFORMATION WITH RESPECT TO THE NOMINEE AND CONTINUING DIRECTORS AND
EXECUTIVE OFFICERS
The following table sets forth, as of the Record Date, the names of
nominee and continuing directors, their ages, a brief description of their
recent business experience, including present occupations and employment,
certain directorships held by each, the year in which each became a director
of the Company and the year in which their terms (or, in the case of nominees,
their proposed terms) as director of the Company expire and the amount of
Common Stock and the percent thereof beneficially owned by each and all
directors and executive officers as a group.
<TABLE>
<CAPTION>
OWNER-
AMOUNT AND SHIP AS A
NAME AND PRINCIPAL EXPIRATION NATURE OF PERCENT
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIAL OF
AND FOR PAST FIVE YEARS AGE(1) SINCE(2) DIRECTOR OWNERSHIP(3) CLASS
- ----------------------- ------ -------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
NOMINEES
Lyle J. Honegger......................... 62 1977 2000 13,755 (4)(6) *(9)
Retired Executive of Lyle Honegger Sales,
Inc., an agricultural supplier.
CONTINUING DIRECTORS
C. William Landefeld..................... 57 1987 1999 58,042(5)(7) 2.08%
President, Chief Executive Officer, and
Director of the Company and the Bank.
Bryce A. Sides........................... 63 1983 1999 23,755(4)(6) *(9)
Retired Executive of Country
Companies Insurance Group.
Lowell M. Thompson....................... 57 1987(3) 1998 23,595(4)(6) *(9)
Dentist.
Donald L. Wainscott...................... 64 1978(2) 1998 30,205(4)(6) 1.08%
Chairman, Board of Directors of the
Company and the Bank. Retired
Veterinarian
NAMED EXECUTIVE OFFICERS
(WHO ARE NOT DIRECTORS)
Richard F. Becker........................ 49 -- -- 32,752(5)(7) 1.17%
Senior Vice President, and
Secretary of the Company and Bank
Dallas G. Smiley......................... 50 -- -- 32,329(5)(7) 1.16%
Senior Vice President, Chief Financial
Officer and Treasurer of
the Company and Senior Vice President
and Treasurer of the Bank.
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL EXPIRATION NATURE OF PERCENT
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIAL OF
AND FOR PAST FIVE YEARS AGE(1) SINCE(2) DIRECTOR OWNERSHIP(3) CLASS
- ----------------------- ------ -------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
All directors and executive officers as a 214,433(8) 7.68%
group (7 persons)
</TABLE>
- ----------------------------
(1) As of December 31, 1996.
(2) Includes years of service as a director of the Bank.
(3) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting and dispositive power as to shares
reported.
(4) Includes 3,755 shares awarded to each outside director under the
Citizens First Financial Corp. 1996 Stock-Based Incentive Plan (the
"Incentive Plan"). Such awards commence vesting at a rate of 20% per
year beginning on November 12, 1997. Each participant presently has
voting power as to the shares awarded.
(5) Includes 28,175, 16,900, and 16,900 shares awarded to Messrs. Landefeld,
Becker, and Smiley respectively under the Incentive Plan. Such awards
commence vesting at a rate of 20% per year beginning on November 12,
1997. Each participant presently has voting power as to the shares
awarded.
(6) Does not include 9,390 shares subject to options granted to each outside
director under the Incentive Plan. Options will be exercisable on a
cumulative basis in five equal annual installments commencing on
November 12, 1997.
(7) Does not include 70,400, 42,200 and 42,200 shares subject to options
granted to Messrs. Landefeld, Becker, and Smiley under the Incentive
Plan. Options will be exercisable on a cumulative basis in five equal
annual installments commencing on November 12, 1997.
(8) Includes a total of 118,305 shares awarded under the Incentive Plan as
to which voting may be directed. Excludes a total of 192,360 shares
subject to options granted under the Incentive Plan.
(9) Less than 1% ownership as a percent of class.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the
Board of Directors and through activities of its committees. The Board of
Directors of the Company meets as needed. During fiscal 1996, the Board of
Directors of the Company held five meetings. All of the directors of the
Company attended at least 75% of the total number of the Company's Board
meetings held and committee meetings on which such directors served during
fiscal 1996.
The Boards of Directors of the Company and the Bank maintain committees,
the nature and composition of which are described below:
AUDIT COMMITTEE. The Audit Committee of the Company consists of Messrs.
Solberg, Sides and Wainscott. This committee meets monthly or as called by
the committee chairman. The purpose of this committee is to provide
assurance that financial disclosures made by management portray the financial
condition and results of operations. The committee also maintains a liaison
with the outside auditors and reviews the adequacy of internal controls. The
Audit Committee met one time in fiscal 1996.
NOMINATING COMMITTEE. The Company's Nominating Committee for the 1997
Annual Meeting consists of the Company's Board of Directors. The committee
considers and recommends the nominees for director to stand for election at
the Company's annual meeting of
-6-
<PAGE>
stockholders. The Company's bylaws also provide for stockholder nominations
of directors. These provisions require such nominations to be made pursuant
to timely notice in writing to the Secretary of the Company. The
stockholder's notice of nomination must contain all information relating to
the nominee which is required to be disclosed by the Company's bylaws and by
the Exchange Act. The Nominating Committee met on February 20, 1997.
COMPENSATION/BENEFITS COMMITTEE. The Compensation/Benefits Committee of
the Company consists of Messrs. Thompson, Landefeld and Wainscott. This
committee meets to establish compensation for the Chief Executive Officer
(except Mr. Landefeld does not participate in such matters), approves the
compensation of senior officers and various compensation and benefits to be
paid to employees and to review the incentive compensation programs when
necessary. The Compensation Committee met one time in fiscal 1996.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. The directors of the Company did not receive any fees
or retainer for serving on the Company's Board of Directors in fiscal 1996.
In 1996, Directors of the Bank received an annual retainer of $12,650. All
fees are paid to Directors on an annual basis.
INCENTIVE PLAN. The Company maintains the Incentive Plan for both
directors and employees. Under the Plan, each Outside Director of the
Company and Bank was granted non-statutory stock options to purchase 3,755
shares of Common Stock, and Stock Awards for 9,390 shares of Common Stock.
The options and Stock Awards to Outside Directors will vest in five equal
annual installments, commencing November 12, 1997, the first anniversary of
the effective date of the grants. In the event a director ceases service due
to death or disability, all unvested options and Stock Awards will vest
immediately.
DIRECTOR EMERITUS RETIREMENT PLAN. The Bank maintains a Director
Emeritus Retirement Plan which provides retirement benefits to current
members of the Bank's Board of Directors who retire (generally defined as
retirement upon or after attaining the age of sixty-five), and are appointed
as a Director Emeritus. The plan provides that in consideration for services
and consultation rendered as a Director Emeritus, the Director Emeritus will
receive annual cash benefits equal to the annual director's fees received at
the time of retirement, up to an annual maximum of $12,650 per participant in
this plan. Payments under the plan are generally through the Bank's purchase
of a single premium insurance annuity for each covered Director Emeritus.
Currently there are seven Directors Emeritus.
-7-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table shows, for the years
ended December 31, 1996, 1995 and 1994, the cash compensation paid by the
Bank, as well as certain other compensation paid or accrued for those years,
to the Chief Executive Officer and other Executive Officers of the Company
and the Bank who earned and/or received salary and bonus in excess of
$100,000 in fiscal year 1996 ("Named Executive Officers"). No other
executive officer of the Company or the Bank earned and/or received salary
and bonus in excess of $100,000 in fiscal year 1996.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- ------------------------- ---------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND PRINCIPAL SALARY BONUS SATION AWARDS SARS PAYOUTS SATION
POSITION YEAR ($)(1) ($) ($)(2) ($)(3) (#)(4) ($)(5) ($)
- -------------------------------------- ------ ---------- ---------- --------- ------------ ------------ --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. William Landefeld 1996 $197,650 $15,000 - $346,553 70,400 - $41,388(6)
President and Chief Executive 1995 155,000 30,840 - - - - 5,887
Officer 1994 140,200 20,832 - - - - 5,887
Richard F. Becker 1996 110,000 10,000 - 207,870 42,200 - 33,019(6)
Senior Vice President and Secretary 1995 93,720 16,057 - - - - 3,157
1994 89,250 11,424 - - - - 3,378
Dallas G. Smiley 1996 110,000 10,000 - 207,870 42,200 - 34,356(6)
Senior Vice President, Treasurer 1995 93,720 16,057 - - - - 2,927
and Chief Financial Officer 1994 89,250 11,424 - - - - 2,911
</TABLE>
- ----------------------------
(1) Under Annual Compensation, the column entitled "Salary" includes
directors' fees and amounts deferred by the Named Executive Officer
pursuant to the Bank's 401(k) Plan, pursuant to which employees may
defer up to 15% of their compensation, up to the maximum limits under
the Internal Revenue Code of 1986, as amended (the "Code"). The column
entitled "Bonus" consists of board approved discretionary bonuses.
(2) For 1996, there were no (a) perquisites over the lesser of $50,000 or
10% of the individual's total salary and bonus for the year;
(b) payments of above-market preferential earnings on deferred
compensation; (c) payments of earnings with respect to long-term
incentive plans prior to settlement or maturation; (d) tax payment
reimbursements; or (e) preferential discounts on stock. For 1995, the
Bank had no restricted stock or stock-related plans in existence.
(3) Includes Stock Awards under the Incentive Plan granted to Messrs.
Landefeld, Becker and Smiley of 28,175, 16,900 and 16,900 shares of
Common Stock, respectively. Stock Awards begin vesting in five equal
annual installments on November 12, 1997, the first anniversary date of
the effective date of the grants. When shares become vested and are
distributed, the recipients will also receive an amount equal to the
accumulated cash and stock dividends (if any) with respect thereto plus
earnings thereon. As of December 31, 1996, the market value of the
28,175, 16,900 and 16,900 shares held by Messrs. Landefeld, Becker and
Smiley was $405,015, $242,937 and $242,937, respectively.
(4) Includes options granted under the Incentive Plan during fiscal year
1996. See "Options Grants in Last Fiscal Year" table for discussion of
options granted under the Incentive Plan.
(5) For 1996, 1995 and 1994, there were no payouts or awards under any
long-term incentive plan.
(6) Includes 2,397, 1,991 and 2,084 shares of Common Stock awarded to
Messrs. Landefeld, Becker and Smiley, respectively, pursuant to the Bank
Employee Stock Ownership Plan ("ESOP"). Includes $4,610, $4,399, and
$4,399 in employer contributions to the Bank's 401(k) plan for Messrs.
Landefeld, Becker and Smiley. Includes disability and life insurance
premiums paid by the Bank of $2,322 for Mr. Landefeld.
-8-
<PAGE>
EMPLOYMENT AGREEMENTS
The Bank and the Company have entered into employment agreements
(collectively, the "employment agreements") with Messrs. Landefeld, Becker
and Smiley (individually, the Executive). These employment agreements are
intended to ensure that the Bank and the Company will be able to maintain a
stable and competent management base. The continued success of the Bank and
the Company depends to a significant degree on the skills and competence of
Messrs. Landefeld, Becker and Smiley.
The employment agreements provide for a three-year term. The Bank
employment agreements provide that, commencing on the first anniversary date
and continuing each anniversary date thereafter, the Board of the Bank may
extend the agreement for an additional year so that the remaining term shall
be three years, unless written notice of non-renewal is given by the Board of
the Bank after conducting a performance evaluation of the Executive. The
terms of the Company employment agreements shall be extended on a daily basis
unless written notice of non-renewal is given by the Board of the Company.
The current base salaries for Messrs Landefeld, Becker and Smiley are
$195,000, $115,000 and $115,000, respectively. In addition to the base
salary, the agreements provide for, among other things, participation in
stock benefits plans and other fringe benefits applicable to executive
personnel.
The employment agreements provide for termination by the Bank or the
Company for cause as defined in the agreements at any time. In the event the
Bank or the Company chooses to terminate the Executive's employment for
reasons other than for cause, or in the event of the Executive's resignation
from the Bank and the Company upon: (i) failure to re-elect the Executive to
his current offices; (ii) a material change in the Executive's functions,
duties or responsibilities; (iii) a relocation of the Executive's principal
place of employment by more than 25 miles; (iv) liquidation or dissolution
of the Bank or the Company; or (v) a breach of the agreement by the Bank or
the Company, the Executive or, in the event of death, his beneficiary would
be entitled to receive an amount equal to the remaining base salary payments
due to the Executive and the contributions that would have been made on the
Executive's behalf to any employee benefit plans of the Bank or the Company
during the remaining term of the agreement. The Bank and the Company would
also continue to pay for the Executive's life, health and disability coverage
for the remaining term of the agreement. Upon any termination of the
Executive, the Executive is subject to a one year non-competition agreement.
Under the employment agreements, if voluntary or involuntary termination
follows a change in control of the Bank or the Company (as defined in the
employment agreement), the Executive or, in the event of the Executive's
death, his beneficiary, would be entitled to a severance payment equal to the
greater of: (i) the payments due for the remaining terms of the employment
agreement; or (ii) three times the average of the five preceding taxable
years' annual compensation. The Bank and the Company would also continue the
Executive's life, health, and disability coverage for thirty-six months.
Notwithstanding that both the Bank and the Company employment agreements
provide for a severance payment in the event of a change in control, the
Executive would only be entitled to receive a severance payment under one
agreement. Based solely on the cash compensation paid to Messrs. Landefeld,
Becker and Smiley over the past five
-9-
<PAGE>
fiscal years and excluding any benefits under any employee plan which may be
payable, the total amount of payments due under the employment agreements
following a change in control would be approximately $1,400,000.
Payments to the Executive under the Bank's agreement will be guaranteed
by the Company in the event that payments or benefits are not paid by the
Bank. Payment under the Company's agreement would be made by the Company.
All reasonable costs and legal fees paid or incurred by the Executive
pursuant to any dispute or question of interpretation relating to the
agreements shall be paid by the Bank or Company, respectively, if the
Executive is successful on the merits pursuant to a legal judgment,
arbitration or settlement. The employment agreements also provide that the
Bank and Company shall indemnify the Executive to the fullest extent
allowable under federal and Delaware law, respectively.
INCENTIVE PLAN
The Company maintains the Incentive Plan, which provides discretionary
awards to officers and key employees as determined by a committee of
disinterested directors who administer the plan. The following table lists
all grants of options (and limited rights) under the Incentive Plan to the
Named Executive Officers for 1996 and contains certain information about
potential value of those options based upon certain assumptions as to the
appreciation of the Company's stock over the life of the option.
-10-
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTIONS(1)
- --------------------------------------------------------------------------- ------------------------
NUMBER OF
SECURITIES % OF TOTAL EXERCISE
UNDERLYING OPTIONS/SARS OR
OPTIONS/SARS GRANTED TO BASE EXPIRATION
GRANTED (#) EMPLOYEES IN PRICE DATE
NAME (2)(3)(4)(6) FISCAL YEAR ($/SH) (5) 5% 10%
- --------------------- ------------- ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
C. William Landefeld 70,400 25% $12.30 11/12/06 $545,530 $1,376,813
Richard F. Becker 42,200 15 12.30 11/12/06 327,008 825,305
Dallas G. Smiley 42,200 15 12.30 11/12/06 327,008 825,305
</TABLE>
- ----------------------------
(1) The amounts represent certain assumed rates of appreciation. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the future performance of the Common Stock and overall
stock market conditions. There can be no assurance that the amounts
reflected in this table will be realized.
(2) Options granted pursuant to the Incentive Plan become exercisable in
equal installments at an annual rate of 20% beginning November 12, 1997.
(3) The purchase price may be paid in cash or in Common Stock.
(4) All grants are intended to be incentive stock options, to extent
permissible under Section 422 of the Internal Revenue Code of 1986, as
amended.
(5) The option term is ten years.
(6) Options are subject to limited rights pursuant to which the options may
be exercised in the event of a change in control of the Company or the
Bank. Upon the exercise of a limited right, the optionee would receive
a cash payment equal to the difference between the exercise price of the
related option on the date of grant and the fair market value of the
underlying shares of Common Stock on the date the limited right is
exercised.
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<PAGE>
The following table provides certain information with respect to the
number of shares of Common Stock represented by outstanding options held by
the Named Executive Officers as of December 31, 1996. Also reported are the
value for "in-the-money" options which represent the positive spread between
the exercise price of any such existing stock options and the year-end price
of the Common Stock. No options were exercisable by the Named Executive
Officers in fiscal 1996.
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS/SARS MONEY OPTIONS/SARS AT
AT FISCAL YEAR-END (#)(1) FISCAL YEAR END ($)(2)
--------------------------- ------------------------------
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
--------------------------- ------------------------------
<S> <C> <C>
C. William Landefeld............. 0/70,400 $0/146,432
Richard F. Becker................ 0/42,200 0/87,776
Dallas G. Smiley................. 0/42,200 0/87,776
--------------------------- ------------------------------
</TABLE>
- ----------------------------
(1) The options in this table have an exercise price of $12.30 and become
exercisable at an annual rate of 20% beginning November 12, 1997. The
options will expire ten (10) years from the date of grant.
(2) Based on market value of the underlying stock at the fiscal year-end,
minus the exercise price. The market price on March 3, 1997 was $15.50.
401(K) PLAN. The Bank maintains the Profit Sharing and Savings Plan
(the "Savings Plan"), which is a tax-qualified profit sharing and salary
reduction plan under Sections 401(a) and 401(k) of the Code. The Savings
Plan provides participants with retirement benefits and may also provide
benefits upon death, disability or termination of employment with the Bank.
An employee who works at least 1,000 scheduled hours per year is eligible to
participate in the Savings Plan following the completion of one year of
service and attainment of age 21. A participant is always 100% vested in his
or her contributions. A participant must reach 1 year of vesting service
(total time employed) before attaining a vested interest in the employer
contribution, which commences following this 1 year period. Participants
become 20% vested in employer matching contribution after 1 year of service,
and increase the vested percentage by 20% for each year of service completed
thereafter, until attaining 100% vesting after 5 years of service.
Participants may make salary reduction contributions to the Savings Plan
up to the lesser of 15% of annual base salary or the legally permissible
limit (currently $9,500). The Savings Plan provides that, with respect to
the first 2% contributed by the employee, the Bank will match 100% of such
contribution with funds to be invested at the direction of the employee and,
with respect to the next 2% contributed by the employee, the Bank will match
100% of such contribution with Common Stock. All participants receive a
quarterly detailed statement including information regarding market value of
the participant's investment and all contributions
-12-
<PAGE>
made on his or her behalf. Any withdrawals prior to age 59 are subject to a
10% tax penalty. Participants may borrow against the vested portion of their
accounts.
The Savings Plan has a profit-sharing component in addition to the
matched employee contribution. The amount of the annual profit-sharing
contribution, which is invested solely in Company Common Stock, is at the
discretion of the Board of Directors.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. The Bank established an ESOP
and related trust for eligible employees effective on January 1, 1996.
Employees employed with the Bank as of January 1, 1996 and employees of the
Company or the Bank employed after such date, who have been credited with at
least 1,000 hours during a twelve month period and who have attained the age
of 21 will become participants. The ESOP purchased 8% of the Common Stock
issued in the Conversion. In order to fund the ESOP's purchase of Common
Stock, the ESOP borrowed funds from the Company equal to 100% of the
aggregate purchase price of the Common Stock. The loan is being repaid
principally from the Company's or the Bank's contribution to the ESOP over a
period of seven years and the collateral for the loan is the Common Stock
purchased by the ESOP.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Bank has implemented a
non-qualified Supplemental Executive Retirement Plan ("SERP") to provide
certain officers and highly compensated employees, designated by the Board of
Directors, with additional retirement benefits. The benefits provided under
the SERP will make up the benefits lost to the SERP participants due to
application of limitations on compensation and maximum benefits applicable to
the Bank's tax qualified 401(k) Plan and ESOP. Benefits will be provided
under the SERP at the same time and in the same form as the related benefits
will be provided under the 401(k) Plan and ESOP.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Bank's current policy provides that all loans made by the Bank to
its directors and executive officers are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and do not involve more
than the normal risk of collectibility or present other unfavorable features.
-13-
<PAGE>
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's and the Bank's independent auditors for the fiscal year
ended December 31, 1996 were Geo. S. Olive & Co., LLC. The Company's Board
of Directors has reappointed Geo. S. Olive & Co., LLC as independent auditors
for the Company for the fiscal year ending December 31, 1997, subject to
ratification of such appointment by the stockholders.
Representatives of Geo. S. Olive & Co., LLC will be present at the
Meeting. They will be given an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions
from stockholders present at the Meeting.
Unless marked to the contrary, the shares represented by the enclosed
Proxy Card will be voted FOR ratification of the appointment of Geo. S. Olive
& Co., LLC as the independent auditor of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF GEO. S. OLIVE & CO., LLC AS THE INDEPENDENT AUDITORS OF THE
COMPANY.
ADDITIONAL INFORMATION
Shareholder Proposals
To be considered for inclusion in the Company's proxy statement and form
of proxy relating to the 1998 Annual Meeting of Shareholders, a shareholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Shareholders not later than November
21, 1997. Any such proposal will be subject to 17 C.F.R. Section 240.14a-8
of the Rules and Regulations under the Exchange Act.
Notice of Business to be Conducted at an Annual Meeting
The Bylaws of the Company set forth the procedures by which a
shareholder may properly bring business before a meeting of shareholders.
Pursuant to the Bylaws, only business brought by or at the direction of the
Board of Directors may be conducted at an annual meeting. The Bylaws of the
Company provide an advance notice procedure for a shareholder to properly
bring business before an annual meeting. The shareholder must give written
advance notice to the Secretary of the Company not less than ninety (90) days
before the date originally fixed for such meeting; provided, however, that in
the event that less than one hundred (100) days notice or prior public
disclosure of the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be received not later than the
close of business on the tenth day following the date on which the Company's
notice to shareholders of the annual meeting date was mailed or such public
disclosure was made. The advance notice by shareholders must include the
shareholder's name and address, as they appear on the Company's record of
shareholders, a brief description of the proposed business, the reason for
conducting such business at the annual
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<PAGE>
meeting, the class and number of shares of the Company's capital stock that
are beneficially owned by such shareholder and any material interest of such
shareholder in the proposed business. In the case of nominations to the
Board of Directors, certain information regarding the nominee must be
provided. Nothing in this paragraph shall be deemed to require the Company
to include in its proxy statement or the proxy relating to any annual
meeting any shareholder proposal which does not meet all of the requirements
for inclusion established by the SEC in effect at the time such proposal is
received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought
before the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are then present at the
Annual Meeting and wish to vote your shares in person, your original proxy
may be revoked by voting at the Annual Meeting.
By Order of the Board of Directors
/s/ Richard F. Becker
----------------------------------
Richard F. Becker
Corporate Secretary
Normal, Illinois
March 20, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING
PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
-15-
<PAGE>
/X/ PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE CITIZENS FIRT FINANCIAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 1997
10:00 A.M., NORMAL, ILLINOIS TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS ON APRIL 21, 1997
The undersigned hereby appoints the official proxy committee of the Board
of Directors of Citizens First Financial Corp. (the "Company"), each with
full power of substitution, to act as proxies for the undersigned, and to
vote all shares of Common Stock of Citizens First Financial Corp. which the
undersigned is entitled to vote at the Annual Meeting of Stockholders, to
be held on April 21, 1997 at 10:00 a.m., Normal, Illinois Time, at The
Holiday Inn, 8 Traders Circle, Normal, Illinois and at any and all
adjournments thereof as indicated.
Please be sure to sign and date Date
this Proxy in the box below.
- ----------------------------------------------------------------------
- ---Stockholder sign above-----------Co-holder (if any) sign above-----
With-
For hold
1. The election as director of one
nominee listed: / / / /
LYLE J. HONEGGER
For Against Abstain
2. The ratification of the appointment of
Geo. S. Olive & Co., LLC as indepen- / / / / / /
dent auditors of Citizens First Financial
Corp. for the fiscal year ending Decmeber 31, 1997.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" EACH OF THE LISTED PROPOSALS.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSALS LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY AS DIRECTED
BY THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE SPECIAL MEETING.
IMPORTANT: The undersigned acknowledges receipt from the Company prior
to the execution of this proxy of a Notice of Annual Meeting of Stockholders
and of a Proxy Statement dated March 20, 1997.
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
CITIZENS FIRST FINANCIAL CORP.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your
full title. If shares are held jointly, each holder may sign but only one
signature is required.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
