<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
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)
C. William Landefeld
- --------------------------------------------------------------------------------
(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.
2101 NORTH VETERANS PARKWAY
BLOOMINGTON, ILLINOIS 61704
(309) 661-8700
March 23, 1998
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"), Bloomington, Illinois,
which will be held on April 27, 1998, 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
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
CITIZENS FIRST FINANCIAL CORP.
2101 NORTH VETERANS PARKWAY
BLOOMINGTON, ILLINOIS 61704
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 1998
------------------------
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 27, 1998, 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 two directors for a term of three years and one director
for a term of one year.
2. The ratification of Geo. S. Olive & Co., LLC as independent auditors of
the Company for the fiscal year ending December 31, 1998; 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 2, 1998, 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., 2101 North Veterans Parkway, Bloomington,
Illinois 61704, 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
CORPORATE SECRETARY
Bloomington, Illinois
March 23, 1998
<PAGE>
CITIZENS FIRST FINANCIAL CORP.
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1998
------------------------
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 27, 1998 (the "Annual
Meeting"), and at any adjournments thereof. This Proxy Statement is first being
mailed to record holders on or about March 23, 1998.
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. (the "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 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.
<PAGE>
The close of business on March 2, 1998, 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 2,535,750 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 (i) broker
non-votes, or (ii) proxies marked "ABSTAIN" as to that matter.
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.
2
<PAGE>
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>
NAME AND ADDRESS OF NUMBER OF PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER SHARES CLASS
- ------------------------- ------------------------------------------------------------- ----------- -------------
<S> <C> <C> <C>
Common Stock Citizens Savings Bank, F.S.B. Employee 225,400(1) 8.89%
Stock Ownership Plan ("ESOP")
2101 North Veterans Parkway
Bloomington, Illinois 61704
Common Stock Investors of America, Limited Partnership 182,650(2) 7.20
1504 Highway, #395 N #8-00508
Gardnerville, Nevada 89410
Common Stock Tidal Insurance Limited 25,700(2) 1.01
c/o Global Corporate & Trust Management, LTD
Zetlands, Nevis
West Indies
Common Stock FMR Corp. 174,700(3) 6.89
82 Devonshire Street
Boston, Massachusetts 02109
</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,
64,400 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.
(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
8.22%.
(3) Based upon information disclosed in Schedule 13G filed with the SEC on
February 14, 1998. 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.
3
<PAGE>
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 three nominees proposed for election at the Annual Meeting are Ronald C.
Wells and Paul J. Hoffman for a term of three years each and L. Carl Borngasser,
Jr. for a term of one year. Mr. Borngasser has been nominated to fill a vacancy
on the Board created by the resignation of Bryce A. Sides, who is retiring as of
April 27, 1998.
In the event that such nominees are unable to serve or decline 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 THREE
NOMINEES NAMED IN THIS PROXY STATEMENT.
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>
AMOUNT AND OWNER-
NAME AND PRINCIPAL EXPIRATION NATURE OF SHIP AS A
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
AND FOR PAST FIVE YEARS AGE(1) SINCE(2) DIRECTOR OWNERSHIP(3)(4)(5) CLASS
- ----------------------- ------ -------- ----------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
NOMINEES
Ronald C. Wells.................................... 54 1993 2001 31,332 1.24%
President, Central Supply Co., Inc., a maintenance
supply distributor.
Paul J. Hoffman.................................... 63 1980 2001 17,633 *
Owner, grain farm.
L. Carl Borngasser, Jr............................. 60 1966 1999 20,658 *
Former Executive Vice President of the Bank.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND OWNER-
NAME AND PRINCIPAL EXPIRATION NATURE OF SHIP AS A
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIAL PERCENT OF
AND FOR PAST FIVE YEARS AGE(1) SINCE(2) DIRECTOR OWNERSHIP(3)(4)(5) CLASS
- ----------------------- ------ -------- ---------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
CONTINUING DIRECTORS
C. William Landefeld............................... 58 1987 1999 75,490(6)(7) 2.98%
President, Chief Executive Officer, and Director of
the Company and the Bank.
Lyle J. Honegger................................... 63 1977 2000 15,633 *
Retired Executive of Lyle Honneger Sales, Inc., an
agricultural supplier.
NAMED EXECUTIVE OFFICERS
(WHO ARE NOT DIRECTORS)
Richard F. Becker.................................. 50 -- -- 42,731(6)(7) 1.68%
Senior Vice President and Secretary of the Company
and Bank
Dallas G. Smiley................................... 51 -- -- 42,623(6)(7) 1.69%
Senior Vice President, Chief Financial Officer and
Treasurer of the Company and Senior Vice President
and Treasurer of the Bank.
All directors and executive officers as a group (7 246,100(8) 9.71%
persons)
</TABLE>
- ------------------------
(1) As of December 31, 1997.
(2) Includes years of service as a director of the Bank and periods as director
of Fairbury Federal Savings and Loan Association, which merged into the Bank
in May 1995.
(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 1,878 shares subject to options granted to each outside director
under the Incentive Plan which are currently exercisable or will become
exercisable within 60 days and excludes 7,512 shares subject to
unexercisable options granted to each outside director under the
Incentive Plan. Shares subject to options are exercisable on a cumulative
basis in five equal annual installments commencing on November 12, 1997.
(6) 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.
(7) Includes 14,080, 8,440 and 8,440 shares subject to options granted to
Messrs. Landefeld, Becker and Smiley, respectively, which are currently
exercisable or will become exercisable within 60 days and excludes 56,320,
33,760 and 33,760 shares subject to unexercisable options granted to Messrs.
Landefeld, Becker and Smiley, respectively, under the Incentive Plan. Shares
subject to options granted under the Incentive Plan commenced vesting at a
rate of 20% per year beginning November 12, 1997.
(8) Includes a total of 75,544 shares awarded under the Incentive Plan as to
which voting may be directed. Includes a total of 38,472 options granted
under the Incentive Plan which are currently exercisable or will become
exercisable within 60 days.
* Less than 1% ownership as a percent of class.
5
<PAGE>
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 1997, the Board of Directors of the
Company held eight 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 1997.
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.
Lowell M. Thompson, Sides and Wells. This committee meets 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 1997.
NOMINATING COMMITTEE. The Company's Nominating Committee for the 1998
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 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 January 20, 1998.
COMPENSATION/BENEFITS COMMITTEE. The Compensation/Benefits Committee of the
Company consists of Messrs. Thompson and Wells. 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 1997.
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 1997. In
1997, Directors of the Bank received an annual retainer of $13,250. 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 9,390 shares of Common Stock,
and Stock Awards for 3,755 shares of Common Stock. The options and Stock Awards
to Outside Directors 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.
ADVISORY DIRECTORS RETIREMENT PLAN. The Bank maintains an Advisory
Directors Retirement Plan (formerly known as the Directors Emeritus Retirement
Plan) which provides retirement benefits to duly elected Advisory Directors as
of December 31, 1997. The plan provides that in consideration for services and
consultation rendered as an Advisory Director, the Advisory Directors 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 Advisory Director. Currently
there are seven Advisory Directors.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table shows, for the years ended
December 31, 1997, 1996 and 1995, 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
1997 ("Named Executive Officers"). No other executive officer of the Company or
the Bank earned and/or received salary and bonus in excess of $100,000 in fiscal
year 1997.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS
ANNUAL COMPENSATION -----------------------
------------------------------------ SECURITIES PAYOUTS
OTHER RESTRICTED UNDERLYING -----------
ANNUAL STOCK OPTIONS/ LTIP
NAME AND SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS
PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($)(2) ($)(3) (#)(4) ($)(5)
- ----------------------------------- --------- ---------- --------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
C. William Landefeld............... 1997 $ 208,250 $ -- -- -- -- --
President and Chief Executive 1996 197,650 15,000 -- 346,553 70,400 --
Officer 1995 155,000 30,840 -- -- -- --
Richard F. Becker.................. 1997 115,000 -- -- -- -- --
Senior Vice President and 1996 110,000 10,000 -- 207,870 42,200 --
Secretary 1995 93,720 16,057 -- -- -- --
Dallas G. Smiley................... 1997 115,000 -- -- -- -- --
Senior Vice President, Treasurer 1996 110,000 10,000 -- 207,870 42,200 --
and Chief Financial Officer 1995 93,720 16,057 -- -- -- --
<CAPTION>
ALL OTHER
COMPEN-
NAME AND SATION
PRINCIPAL POSITION ($)
- ----------------------------------- -----------
<S> <C>
C. William Landefeld............... $ 66,902(6)
President and Chief Executive 41,388
Officer 5,887
Richard F. Becker.................. 53,388(6)
Senior Vice President and 33,019
Secretary 3,157
Dallas G. Smiley................... 53,388(6)
Senior Vice President, Treasurer 34,356
and Chief Financial Officer 2,927
</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 1997, 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.
(3) Effective November 12, 1996, Messrs. Landefeld, Becker and Smiley were
granted 28,175, 16,900 and 16,900 shares of Common Stock, respectively,
pursuant to the Incentive Plan. These shares had a market value at December
31, 1997 of $570,544, $342,225 and $342,225, respectively. Stock Awards
granted in 1996 began vesting in five equal annual installments on November
12, 1997, the first anniversary date of the effective date of the grants.
For 1995, the Bank had no restricted stock or stock-related plans in
existence.
(4) Includes options granted under the Incentive Plan during fiscal 1997. See
"Options Grants in Last Fiscal Year" table for discussion of options granted
under the Incentive Plan.
(5) For 1997, 1996 and 1995, there were no payouts or awards under any long-term
incentive plan.
(6) Includes 2,407, 2,407 and 2,407 shares of Common Stock awarded to Messrs.
Landefeld, Becker and Smiley, respectively, pursuant to the Bank Employee
Stock Ownership Plan ("ESOP"). Includes $5,700, $4,025, and $4,025 in
employer contributions to the Bank's 401(k) plan for Messrs. Landefeld,
Becker and Smiley, respectively. Includes disability and life insurance
premiums paid by the Bank of $1,387 for Mr. Landefeld. Includes $11,073,
$621 and $621 in employer contribution to the Supplemental Executive
Retirement Plan (the "SERP") for Messrs. Landefeld, Becker and Smiley,
respectively, for the excess amount due under the 401(k) Plan and ESOP for
the fiscal year ended December 31, 1997.
7
<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 $205,000, $120,000 and $120,000,
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 agreements), 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
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 $1.3 million.
Payments to the Executive under the Bank's agreement will be guaranteed by
the Company in the event that payments or benefits are not paid by the Bank.
Payment under the Company's agreement would be made by the Company. All
reasonable costs and legal fees paid or incurred by the Executive pursuant to
any dispute or question of interpretation relating to the agreements shall be
paid by the Bank or Company, respectively, if the Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement. The employment
agreements also provide that the Bank and Company shall indemnify the Executive
to the fullest extent allowable under federal and Delaware law, respectively.
8
<PAGE>
INCENTIVE PLAN
The Company maintains the Incentive Plan, which provides discretionary
awards to officers and key employees as determined by a committee of
disinterested directors who administer the plan. The following table lists all
grants of options (and limited rights) under the Incentive Plan to the Named
Executive Officers for 1997 and contains certain information about potential
value of those options based upon certain assumptions as to the appreciation of
the Company's stock over the life of the option.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES
OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTIONS(1)
- --------------------------------------------------------------------------------------------------------- ------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/ SARS EXERCISE
OPTIONS/SARS GRANTED TO OR BASE EXPIRATION
GRANTED (#) EMPLOYEES IN PRICE DATE
NAME (2)(3)(4)(5) FISCAL YEAR ($/SH) (6) 5% 10%
- --------------------------------------------- ------------- ----------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
C. William Landefeld......................... 70,400 25% $12.30 11/12/06 $ 544,572 $ 1,380,053
Richard F. Becker............................ 42,200 15 12.30 11/12/06 326,434 827,248
Dallas G. Smiley............................. 42,200 15 12.30 11/12/06 326,434 827,248
</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 became 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) 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.
(6) The option term is ten (10) years.
9
<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, 1997. 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
1997.
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE- MONEY
UNEXERCISED OPTIONS/SARS OPTIONS/SARS AT
AT FISCAL YEAR-END (#)(1) FISCAL YEAR END ($)(2)
----------------------------- -------------------------
<S> <C> <C>
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------------------------- -------------------------
C. William Landefeld................................... 14,080/56,320 $ 111,936/447,744
Richard F. Becker...................................... 8,440/33,760 67,098/268,392
Dallas G. Smiley....................................... 8,440/33,760 67,098/268,392
</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 2, 1998 was $21.00 per share.
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 1 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 $10,000). 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 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
10
<PAGE>
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 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.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's and the Bank's independent auditors for the fiscal year ended
December 31, 1997 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, 1998, subject to
ratification of such appointment by the stockholders.
Representatives of Geo. S. Olive & Co., LLC will be present at the Annual
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 Annual 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 1999 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
24, 1998. Any such proposal will be subject to 17 C.F.R. Section 240.14a-8 of
the Rules and Regulations under the Exchange Act.
11
<PAGE>
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 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 ANNUAL MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Annual 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
CORPORATE SECRETARY
Bloomington, Illinois
March 23, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
12
<PAGE>
003
REVOCABLE PROXY
CITIZENS FIRST FINANCIAL CORP.
/ X / PLEASE MARK VOTES
AS-IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
April 27, 1998
10:00 a.m., Central Time
This Proxy is Solicited on Behalf of The Board of Directors for
the Annual Meeting of Stockholders on April 27, 1998
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 27, 1998 at 10:00 a.m., Central Time, at The Holiday Inn, 8
Traders Circle, Normal, Illinois and at any and all adjournments thereof as
indicated.
With- For All
For hold Except
1. The election as directors of the / / / / / /
nominees listed: / / / / / /
/ / / / / /
Ronald C. Wells Paul J. Hoffman L. Carl Borngasser, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
- ----------------------------------------------------------------------------
For Against Abstain
2. The ratification of the appointment / / / / / /
of Geo. S. Olive & Co., LLC as / / / / / /
independent auditors of Citizens / / / / / /
First Financial Corp. for the fiscal year ending December 31, 1998.
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 23, 1998.
----------------------------
Please be sure to sign and date / Date /
this Proxy in the box below. / /
- ----------------------------------------------------------------
/ /
/ /
/ /
/-- Stockholder sign above --- Co-holder (if any) sign above ---/
- -----------------------------------------------------------------------------
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 /
- ------------------------------------------------------------------------------
