<PAGE>
<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
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Subsection 240.14a-11(c) or
Subsection 240.14a-12
[ ] Confidential, For use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
HEARTLAND BANCSHARES, INC.
- ---------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ----------------------------------------------------------------
(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>
<PAGE>
March 28, 1997
Dear Stockholder:
We invite you to attend the first Annual Meeting of
Stockholders of Heartland Bancshares, Inc. to be held at the
Herrin Civic Center, 101 South 16th Street, Herrin, Illinois on
Thursday, April 24, 1997 at 2:00 p.m., local time.
The accompanying notice and proxy statement describe the
formal business to be transacted at the Annual Meeting. Also
enclosed is an Annual Report to Stockholders for the 1996 fiscal
year. Directors and officers of the Company as well as
representatives of Gray Hunter Stenn, CPAs, the Company's
independent auditors for the 1996 fiscal year, will be available
to respond to any questions the stockholders may have.
You are cordially invited to attend the Annual Meeting.
REGARDLESS OF WHETHER YOU PLAN TO ATTEND, WE URGE YOU TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN
IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING. This will
not prevent you from voting in person but will assure that your
vote is counted if you are unable to attend the meeting.
Sincerely,
/s/ Roger O. Hileman
Roger O. Hileman
President and
Chief Executive Officer
<PAGE>
<PAGE>
_________________________________________________________________
HEARTLAND BANCSHARES, INC.
318 SOUTH PARK AVENUE
HERRIN, ILLINOIS 62948-3604
(618) 942-7373
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 1997
________________________________________________________________
NOTICE IS HEREBY GIVEN that the first Annual Meeting of
Stockholders ("Annual Meeting") of Heartland Bancshares, Inc.
(the "Company"), will be held at the Herrin Civic Center, located
at 101 South 16th Street, Herrin, Illinois at 2:00 p.m., local
time, on Thursday, April 24, 1997.
A Proxy Card and a Proxy Statement for the Annual Meeting
are enclosed.
The Annual Meeting is for the purpose of considering and
acting upon:
1. The election of two directors of the Company to a
three-year term; and
2. The transaction of such other matters as may properly
come before the Annual Meeting or any adjournments
thereof.
Note: The Board of Directors is not aware of any other
business to come before the Annual Meeting.
Any action may be taken on any one of the foregoing pro-
posals at the Annual Meeting on the date specified above or on
any date or dates to which, by original or later adjournment, the
Annual Meeting may be adjourned. Stockholders of record at the
close of business on March 14, 1997, are the stockholders
entitled to vote at the Annual Meeting and any adjournments
thereof.
You are requested to fill in and sign the enclosed Proxy
Card which is solicited by the Board of Directors and to mail it
promptly in the enclosed envelope. The Proxy Card will not be
used if you attend and vote at the Annual Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Christy L. Cripps
CHRISTY L. CRIPPS
SECRETARY
Herrin, Illinois
March 28, 1997
_________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A
QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
_________________________________________________________________
<PAGE>
<PAGE>
_________________________________________________________________
PROXY STATEMENT
OF
HEARTLAND BANCSHARES, INC.
318 South Park Avenue
Herrin, Illinois 62948-3604
ANNUAL MEETING OF STOCKHOLDERS
April 24, 1997
_________________________________________________________________
________________________________________________________________
GENERAL
________________________________________________________________
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Heartland
Bancshares, Inc. (the "Company") to be used at the 1997 Annual
Meeting of Stockholders of the Company (the "Annual Meeting")
which will be held at the Herrin Civic Center, 101 South 16th
Street, Herrin, Illinois on Thursday, April 24, 1997, at 2:00
p.m., local time. The accompanying Notice of Annual Meeting and
form of proxy and this Proxy Statement are being first mailed to
stockholders on or about March 28, 1997.
________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
________________________________________________________________
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, proxies will be voted for
the nominees for directors set forth below and in favor of each
of the other proposals set forth in this Proxy Statement for con-
sideration at the Annual Meeting. The proxy confers
discretionary authority on the persons named therein to vote with
respect to the election of any person as a director where the
nominee is unable to serve or for good cause will not serve, and
with respect to matters incident to the conduct of the Annual
Meeting. If any other business is presented at the Annual
Meeting, proxies will be voted by those named therein in
accordance with the determination of a majority of the Board of
Directors. Proxies marked as abstentions will not be counted as
votes cast. In addition, shares held in street name which have
been designated by brokers on proxy cards as not voted will not
be counted as votes cast. Proxies marked as abstentions or as
broker nonvotes, however, will be treated as shares present for
purposes of determining whether a quorum is present.
Stockholders who execute proxies retain the right to revoke
them at any time. Unless so revoked, the shares represented by
properly executed proxies will be voted at the Annual Meeting and
all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or
the filing of a later dated proxy prior to a vote being taken on
a particular proposal at the Annual Meeting. A proxy will not be
voted if a stockholder attends the Annual Meeting and votes in
person. The presence of a stockholder alone at the Annual
Meeting will not revoke such stockholder's proxy.
_________________________________________________________________
VOTING SECURITIES
_________________________________________________________________
The securities entitled to vote at the Annual Meeting
consist of the Company's common stock, par value $.01 per share
(the "Common Stock"). Stockholders of record as of the close of
business on March 14, 1997 (the "Record Date"), are entitled to
one vote for each share of Common Stock then held. As of the
Record Date, there were 876,875 shares of Common Stock issued and
outstanding.
<PAGE>
<PAGE>
_________________________________________________________________
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
_________________________________________________________________
Persons and groups beneficially owning more than 5% of the
Common Stock are required to file certain reports with respect to
such ownership pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The following table sets forth,
as of the Record Date, certain information as to the Common Stock
beneficially owned by any person or group of persons who is known
to the Company to be the beneficial owner of more than 5% of the
Company's Common Stock, the shares beneficially owned by the
Company's Chief Executive Officer and shares beneficially owned
by all directors and executive officers as a group. Other than
as disclosed below, management knows of no person who
beneficially owned more than 5% of the Common Stock at the Record
Date.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
NAME AND ADDRESS BENEFICIAL COMMON STOCK
OF BENEFICIAL OWNER OWNERSHIP(1) OUTSTANDING
- ------------------- ------------ ------------
<S> <C> <C>
Heartland Bancshares, Inc. 70,150 (2) 8.0%
Employee Stock Ownership Plan
318 South Park Avenue
Herrin, Illinois 62948-3604
Barrett Rochman 62,109 7.08
P.O. Box 3074
Carbondale, Illinois 62901
All Directors and Executive Officers
as a Group (8 persons) 199,000 22.7
<FN>
_______________
(1) Includes all shares held directly as well as by spouses or
as custodian or trustee for minor children, and shares held
by a group acting in concert, over which shares the named
individuals effectively exercise sole voting and investment
power, or for a group acting in concert, share voting and
investment power.
(2) These shares are held in a suspense account for future
allocation among participating employees as the loan used
to purchase the shares is repaid. The ESOP trustees,
currently Directors Walker, Stevens, Youngblood, Cross and
Calcaterra, vote all allocated shares in accordance with
instructions of the participants. Unallocated shares and
shares for which no instructions have been received
generally are voted by the ESOP trustees in the same ratio
as participants direct the voting of allocated shares or,
in the absence of such direction, as directed by the
Company's Board of Directors.
</FN>
</TABLE>
_________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
_________________________________________________________________
The Company's Board of Directors is currently composed of
six members. Under the Company's Articles of Incorporation,
directors are divided into three classes and elected for terms of
three years each and until their successors are elected and
qualified. At the Annual Meeting, directors will be elected for
terms expiring at the Annual Meeting to be held in the year 2000.
The Board of Directors has nominated Directors B. D. Cross and
Paul Calcaterra, each to serve for an additional term of three
years and until his successor is elected and qualified. Under
Illinois law, directors are elected by a majority of the votes
present in person or represented by proxy at the Annual Meeting
and entitled to vote in the election of directors.
Unless contrary instruction is given, the persons named in
the proxies solicited by the Board of Directors will vote each
such proxy for the election of the named nominees. If either of
the nominees is unable to serve, the shares represented by all
properly executed proxies which have not been revoked will be
voted for the election of
2<PAGE>
<PAGE>
such substitute as the Board of Directors may recommend. At this
time, the Board knows of no reason why the nominees might be
unavailable to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED BELOW.
The following table sets forth, for the nominees and each
continuing director, his name, age as of the Record Date, the
year he first became a director of the Company's principal
subsidiary, Heartland National Bank (the "Bank") (or its
predecessor, First Federal Savings and Loan Association of Herrin
(the "Association")), and the expiration of his current term as a
director of the Company. Except as noted below, all such persons
were initially appointed as directors of the Company in
connection with the incorporation and organization of the Company
and remained as such following the conversion of the Association
from mutual to stock form, its reorganization into the holding
company form of ownership as a subsidiary of the Company, and its
subsequent conversion to a national bank (i.e., the Bank)
(collectively, the "Conversion"). Each director of the Company
is also a member of the Board of Directors of the Bank.
<TABLE>
<CAPTION>
Year First Shares of
Elected Common Stock
Age as Director of Current Beneficially
of the the Bank Term Owned at the Percent
Name Record Date or Association to Expire Record Date(1) of Class
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEE FOR TERM TO EXPIRE IN 2000
Paul R. Calcaterra 46 1992 1997 25,000 2.85%
B.D. Cross 66 1976 1997 25,000 2.85
DIRECTORS CONTINUING IN OFFICE
Roger O. Hileman 43 1995 1998 24,000 2.74
Charles Stevens 62 1973 1998 25,000 2.85
James C. Walker 70 1959 1999 25,000 2.85
Randall A. Youngblood 44 1991 1999 25,000 2.85
</TABLE>
The principal occupation of each nominee for director and
each continuing director of the Company for the last five years
is set forth below.
PAUL R. CALCATERRA is a self-employed merchant in the
wholesale food and beverages industry. He is also a current
member of the Herrin Chamber of Commerce, the Herrin Elks and
Knights of Columbus.
B.D. CROSS is retired. Prior to his retirement, he was the
Director of Off-Campus Military Programs for Southern Illinois
University College of Engineering in England, Germany and the
United States. Mr. Cross also served as the Director of
Management Systems for Southern Illinois University and has
provided consulting services to J.A. Logan College with respect
to its computer curriculum. He formerly served as the Assistant
Treasurer for Mercantile Mortgage Co. and as Manager of Systems
Development for Olin Corp, New Haven, Ct. He is a former member
of the City Council and the Senior Citizens County Advisory Board
and serves as Trustee and Deacon of the Grand Avenue Baptist
Church.
ROGER O. HILEMAN has been President and Chief Executive
Officer of the Company since its inception and of the Bank since
joining the Bank in June 1994. From 1983 until he joined the
Bank, Mr. Hileman was Executive Vice President and Chief
Executive Officer of Chester Savings Bank in Chester, Illinois.
Mr. Hileman serves as a member of the Knights of Columbus and the
Rotary Club. He is also a current member and director of the
local
3<PAGE>
<PAGE>
Chamber of Commerce, the Shagbark Girl Scout Council Board (also
serving on the Management Committee) and the Illinois League of
Financial Institutions. He also serves on the Finance Committee
of Our Lady of Mt. Carmel Catholic Church and is a member of
various other civic organizations.
CHARLES STEVENS owns and operates two Dairy Queen/Brazier
restaurants in Carterville and Johnson City, Illinois and the
Country Cupboard Restaurant in Carterville, Illinois. He is also
a member and director of the Carterville Chamber of Commerce and
the John A. Logan College Foundation Board.
JAMES C. WALKER has been retired since 1981. He is a
current member of the Herrin Chamber of Commerce and the Herrin
Rotary Club. Prior to his retirement, Mr. Walker owned a chain
of men's clothing stores.
RANDALL A. YOUNGBLOOD is a self-employed Certified Public
Accountant in Herrin, Illinois. He is also a Board member of
Herrin Youth Sports and a member of the Herrin Rotary Club and
the Accounting/Business Administration Advisory Committee.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following sets forth information with respect to
executive officers of the Company who do not serve on the Board
of Directors.
<TABLE>
<CAPTION>
Age at
Name Record Date Title
- ---- ----------- -----
<S> <C> <C>
Ronald D. Maddox 55 Vice President and Chief Financial
Officer
Christy L. Cripps 40 Secretary/Treasurer
</TABLE>
Presented below is certain information concerning executive
officers of the Company who are not directors. Unless otherwise
stated, both executive officers have held the positions indicated
for at least the past five years.
RONALD D. MADDOX has served as Vice President since joining
the Bank in 1979. Mr. Maddox is a current member of the Herrin
and Carterville Chambers of Commerce and a former examiner for
the FDIC and a former Executive Vice President and Director of
Ina State Bank, Ina, Illinois. He is also a former President and
Director of Southern Illinois Finance Corporation in Sesser,
Illinois.
CHRISTY L. CRIPPS has served in various capacities since
joining the Bank in 1976. In 1982, Ms. Cripps was appointed
Secretary/Treasurer of the Bank. She is also a current member of
the Herrin Chamber of Commerce and Beta Sigma Phi, a service
sorority.
_________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
_________________________________________________________________
The Company's Board of Directors conducts its business
through meetings of the Board. The Board of Directors of the
Company generally holds regular monthly meetings and holds
special meetings as needed. During the year ended December 31,
1996, the Board of Directors of the Company met six times and the
Board of Directors of the Bank met 15 times. No director
attended fewer than 75% in the aggregate of the total number of
Board meetings of the Company or the Bank held while he was a
member during the year ended December 31, 1996 and the total
number of meetings held by committees on which he served during
such fiscal year.
The Company's Board of Directors has an Audit Committee
consisting of Directors Walker, Cross and Youngblood. The
Committee met once during the year ended December 31, 1996 to
examine and approve the audit report prepared by the independent
4<PAGE>
<PAGE>
auditors of the Bank and its subsidiary, to review and recommend
the independent auditors to be engaged by the Bank, to review the
internal audit function and internal accounting controls, and to
review and approve conflict of interest and audit policies.
The Company's full Board of Directors acts as a Nominating
Committee for the purpose of selecting the management nominees
for election as directors of the Company in accordance with the
Company's Bylaws. During the year ended December 31, 1996, the
Nominating Committee met twice. In its deliberations, the
Nominating Committee considers the candidate's knowledge of the
banking business and involvement in community, business and civic
affairs, and also considers whether the candidate would allow the
Board to continue its geographic diversity that provides for
adequate representation of the Company's market area.
The Company's Board of Directors acts has a Compensation
Committee consisting of Directors Walker, Youngblood, Calcaterra
and Hileman. This Committee met four times during the year
ended December 31, 1996. The Compensation Committee evaluates
the compensation and fringe benefits of the directors, officers
and employees, recommends changes, and monitors and evaluates
employee morale. Directors of the Company who also are officers
of the Company abstain from discussion and voting on matters
affecting their compensation.
In addition to the committees described above, the Board of
Directors of the Bank has standing Loan, REO, Interest Rate Risk,
Building, Advertisement and Investment Committees.
________________________________________________________________
DIRECTORS' COMPENSATION
________________________________________________________________
Each member of the Company's and the Bank's Boards of
Directors (the same six individuals) receives a monthly retainer
of $200 plus $150 per Board meeting attended for their service as
Company directors, and $400 per month plus $250 per Board meeting
attended for their service as Bank directors. Members of the
Board's Loan Committee receive an additional $25 per Loan
Committee meeting attended. During the year ended December 31,
1996, directors' fees for service on the Company's and the Bank's
Board totaled $10,900. Pursuant to the Heartland Bancshares,
Inc. 1996 Stock Option and Incentive Plan (the "Option Plan"),
non-employee directors of the Company will be entitled to receive
a one-time automatic grant of stock options in 1997. In
addition, pursuant to the terms of the Heartland Bancshares, Inc.
Management Recognition Plan, non-employee directors are entitled
to receive a plan share award of shares of restricted Common
Stock in 1997.
Director Retirement Plan. The Bank's Board of Directors
adopted the First Federal Savings and Loan Association of Herrin
Retirement Plan for Directors (the "Directors' Plan"), effective
December 31, 1995, for its directors who were members of the
Bank's Board of Directors at some time on or after the plan's
effective date. On June 28, 1996, the date of completion of the
Conversion, the Bank assumed the obligations of the Directors'
Plan. Under the Directors' Plan, a bookkeeping account in each
participant's name is credited with "Performance Units" according
to the following formula: (i) 70 "Performance Units" for each
full year of service as a director prior to 1996, plus (ii) 100
Performance Units for each full year of service as a director
after 1995, with the value of each Performance Unit equal to the
average fair market value of one share of Common Stock as of
December 31st of each of the three years preceding the
determination date (or such shorter period as to which trading
information is available). A participant's vested interest
("Vested Percentage") in Performance Units credited on the plan's
effective date equals 50% if the participant serves on the Board
for less than a year after December 31, 1995, increases to 75% if
the participant completes 2 years of service after 1995, and
becomes 100% if the participant completes a third year of service
after 1995. In the event a participant's service on the Board is
terminated due to death or disability, the participant's Vested
Percentage becomes 100% regardless of the number of years of
service. Performance Units credited after the plan's effective
date are fully vested at all times.
A participant's vested benefits under the Directors' Plan
will be paid in substantially equal installments over a 10-year
period after the participant's service as a director terminates
for any reason, unless a director's service on the Board is
terminated for "just cause." Notwithstanding the foregoing, a
participant may elect, within 30 days after
5<PAGE>
<PAGE>
becoming a participant, to have his or her account paid in a
single lump sum distribution or in annual payments over a period
of less than ten years. If a participant dies before receiving
all benefits payable under the Directors' Plan, such payments
shall be made to his or her beneficiary or, if no beneficiary has
been designated or if the designated beneficiary has predeceased
the participant, to the participant's estate. Benefits under the
Directors' Plan are nontransferable. The Bank will pay all
benefits in cash from its general assets, and expects to
establish a trust in order to hold assets with which to pay
benefits. Trust assets will be subject to the claims of the
Bank's general creditors. In the event a participant prevails
over the Bank in a legal dispute as to the terms or
interpretation of the Directors' Plan, he or she will be
reimbursed for his or her legal and other expenses.
________________________________________________________________
EXECUTIVE COMPENSATION AND OTHER BENEFITS
________________________________________________________________
Summary Compensation Table. The following table sets forth
cash and noncash compensation for the fiscal year ended December
31, 1996 awarded to or earned by the Company's Chief Executive
Officer for services rendered in all capacities to the Company
and its subsidiaries.
<TABLE>
<CAPTION>
Annual Compensation
------------------------
Name and Fiscal Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation
- ----------------- ---- ------ ----- ------------- ------------
<S> <C> <C> <C> <C> <C>
Roger O. Hileman 1996 $84,000 $8,405 $ -- $ --
President and Chief 1995 80,000 8,190 -- 6,058
Executive Officer
</TABLE>
Employment Agreements. The Company and the Bank entered
into separate employment agreements (the "Employment Agreements")
with Mr. Roger O. Hileman, President and Chief Executive Officer
of the Bank and of the Company. In such capacities, Mr. Hileman
is responsible for overseeing all operations of the Bank and the
Company, and for implementing the policies adopted by the Board
of Directors. Such Boards believe that the Employment Agreements
assure fair treatment of Mr. Hileman in relation to his career
with the Company and the Bank by assuring him of some financial
security.
The Employment Agreements became effective on June 28, 1996
and provide for a term of three years, with an annual base salary
of $84,000. On each anniversary date from the date of
commencement of the Employment Agreements, the term of his
employment under the Employment Agreements may be extended for an
additional one-year period beyond the then effective expiration
date, upon a determination by the Board of Directors that the
performance of Mr. Hileman has met the required performance
standards and that such Employment Agreements should be extended.
Each Employment Agreement provides Mr. Hileman with a salary
review by the Board of Directors not less often than annually, as
well as with inclusion in any discretionary bonus plans,
retirement and medical plans, customary fringe benefits, and
vacation and sick leave. The Employment Agreements will
terminate upon his death or disability, and are terminable by the
Company and Bank for "just cause" as defined in the Employment
Agreements. In the event of termination for just cause, no
severance benefits are available. If the Company or the Bank
terminates Mr. Hileman's employment without just cause or takes
action constituting a constructive discharge he will be entitled
to a payment of his salary up to the Employment Agreement's
expiration date, plus said salary for an additional 12-month
period, and, at the Employee's election, either cash in an amount
equal to the cost to him of obtaining health, life, disability,
and other benefits through the Employment Agreement's expiration
date, or continued participation under the Bank benefit plans
through the Employment Agreement's expiration date, but only to
the extent Mr. Hileman continues to qualify for participation
therein. Amounts payable to Mr. Hileman will be paid, at the
option of Mr. Hileman, either in periodic payments through the
Employment Agreement's expiration date, or in one lump sum within
ten (10) days of such termination. If the Employment Agreements
are terminated due to the Mr. Hileman's "disability" (as defined
in the Employment Agreements), Mr.
6<PAGE>
<PAGE>
Hileman will be entitled to a continuation of his salary and
benefits for up to 180 days following such termination. In the
event of Mr. Hileman's death during the term of the Employment
Agreements, his estate will be entitled to receive his salary
through the end of the month in which Mr. Hileman's death
occurred. Severance benefits payable to Mr. Hileman or to his
estate will be paid in a lump sum or in installments, as he (or
his estate) elects. Mr. Hileman is able to voluntarily terminate
his Employment Agreement by providing 90 days' written notice to
the Boards of Directors of the Bank and the Company, in which
case he is entitled to receive only his compensation, vested
rights and benefits up to the date of termination.
The Employment Agreements contain provisions stating that in
the event of Mr. Hileman's involuntary termination of employment
in connection with, or within one year after, any change in
control of the Bank or the Company, other than for "just cause,"
Mr. Hileman will be paid within 10 days of such termination an
amount equal to the difference between (i) 2.99 times his "base
amount," as defined in Section 280G(b)(3) of the Internal Revenue
Code, and (ii) the sum of any other parachute payments, as
defined under Section 280G(b)(2) of the Internal Revenue Code,
that Mr. Hileman receives on account of the change in control.
"Control" generally refers to the acquisition, by any person or
entity, of the ownership or power to vote more than 25% of the
Bank's or Company's voting stock, the control of the election of
a majority of the Bank's or the Company's directors, or the
exercise of a controlling influence over the management or
policies of the Bank or the Company. In addition, under the
Employment Agreements, a change in control occurs when, during
any consecutive two-year period, directors of the Company or the
Bank, at the beginning of such period, cease to constitute at
least a majority of the Board of Directors of the Company or the
Bank, provided the election of said directors was approved by at
least a majority of the initial directors then in office. The
Employment Agreement with the Bank provides that within 5
business days of a change in control, the Bank shall fund, or
cause to be funded, a trust in the amount of 2.99 times his base
amount, that will be used to pay Mr. Hileman amounts owed to him
upon termination, other than for just cause, within one year of
the change in control. The Employment Agreements also provide
for a similar lump sum payment to be made in the event of his
voluntary termination of employment within 30 days of a change in
control of the Bank or the Company. Alternatively, Mr. Hileman
may voluntarily terminate his employment within one year of a
change in control and be entitled to receive a similar payment,
upon the occurrence, or within 90 days thereafter, of certain
specified events following the change in control, which have not
been consented to in writing by him, including (i) the
requirement that he perform his principal executive functions
more than 30 miles from his current primary office, (ii) a
material reduction in his base compensation as then in effect,
(iii) the failure of the Company or the Bank to maintain existing
or substantially similar employee benefit plans, (iv) the
assignment to him of duties and responsibilities which are other
than those normally associated with his position, (v) a material
reduction in his authority and responsibility, and (vi) the
failure to re-elect him to the Company's or the Bank's Board of
Directors.
The aggregate payments that would be made to Mr. Hileman,
assuming his termination of employment under the foregoing
circumstances at December 31, 1996, would have been approximately
$251,000. In the event that Mr. Hileman prevails over the
Company and the Bank in a legal dispute as to the Employment
Agreement, he will be reimbursed for his legal and other
expenses.
________________________________________________________________
TRANSACTIONS WITH MANAGEMENT
________________________________________________________________
The Bank offers loans to its directors and officers. These
loans currently are made in the ordinary course of business with
the same collateral, interest rates and underwriting criteria as
those of comparable transactions prevailing at the time and to
not involve more than the normal risk of collectibility or
present other unfavorable features. The Bank's loans to
directors and executive officers are required to be made on
substantially the same terms, including interest rates, as those
prevailing for comparable transactions and must not involve more
than the normal risk of repayment or present other unfavorable
features. Furthermore, all loans to such persons must be
approved in advance by a disinterested majority of the Board of
Directors. At December 31, 1996, the Bank's loans to directors
and executive officers totalled $542,000, or 4.3% of
stockholders' equity at that date.
7<PAGE>
<PAGE>
________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________
Pursuant to regulations promulgated under the Exchange Act,
the Company's officers, directors and persons who own more than
ten percent of the outstanding Common Stock are required to file
reports detailing their ownership and changes of ownership in
such Common Stock, and to furnish the Company with copies of all
such reports. Based solely on the Company's review of such
reports which the Company received during the last fiscal year,
or written representations from such persons that no annual
report of change in beneficial ownership was required, the
Company believes that, during the last fiscal year, all persons
subject to such reporting requirements have complied with the
reporting requirements.
________________________________________________________________
OTHER MATTERS
________________________________________________________________
The Board of Directors is not aware of any business to come
before the Annual Meeting other than those matters described
above in this Proxy Statement and matters incident to the conduct
of the Annual Meeting. However, if any other matters should pro-
perly come before the Annual Meeting, it is intended that proxies
in the accompanying form will be voted in respect thereof in
accordance with the determination of a majority of the Board of
Directors.
________________________________________________________________
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________________________________
Gray Hunter Stenn, CPAs, which were the Company's
independent auditors for the 1996 fiscal year, have been retained
by the Board of Directors to be the Company's auditors for the
1997 fiscal year. A representative of Gray Hunter Stenn, CPAs is
expected to be present at the Annual Meeting to respond to
appropriate stockholders' questions and will have the opportunity
to make a statement if he so desires.
________________________________________________________________
MISCELLANEOUS
________________________________________________________________
The cost of soliciting proxies will be borne by the Company.
The Company will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them
in sending proxy materials to the beneficial owners of Common
Stock. In addition to solicitations by mail, directors, officers
and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional
compensation.
The Company's 1996 Annual Report to Stockholders, including
financial statements, accompanies this Proxy Statement, which has
been mailed to all stockholders of record as of the close of
business on the Record Date. Any stockholder who has not
received a copy of such Annual Report may obtain a copy by
writing to the Secretary of the Company. Such Annual Report is
not to be treated as a part of the proxy solicitation material or
as having been incorporated herein by reference.
________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________
In order to be eligible for inclusion in the Company's proxy
materials for next year's Annual Meeting of Stockholders, any
stockholder proposal to take action at such meeting must be
received at the Company's executive office at 318 South Park
Avenue, Herrin, Illinois 62948-3604 no later than November 28,
1997. Any such proposals shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
8<PAGE>
<PAGE>
________________________________________________________________
FORM 10-KSB
________________________________________________________________
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF
THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, HEARTLAND
BANCSHARES, INC., 318 SOUTH PARK AVENUE, HERRIN, ILLINOIS 62948-
3604.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Christy L. Cripps
Christy L. Cripps
Secretary
Herrin, Illinois
March 28, 1997
9<PAGE>
<PAGE>
REVOCABLE PROXY
HEARTLAND BANCSHARES, INC.
__________________________________________________
ANNUAL MEETING OF STOCKHOLDERS
April 24, 1997
___________________________________________________
The undersigned hereby appoints James C. Walker, Randall A.
Youngblood and Charles Stevens with full powers of substitution
to act, as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of Heartland Bancshares, Inc. which the
undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Annual Meeting"), to be held at the Herrin
Civic Center, 101 South 16th Street, Herrin, Illinois on
Thursday, April 24, 1997 at 2:00 p.m., local time, and at any and
all adjournments thereof, as indicated below and in accordance
with the determination of a majority of the Board of Directors
with respect to other matters which come before the Annual
Meeting.
VOTE
FOR WITHHELD
--- --------
1. The election as directors of all the
nominees listed below (except as
marked to the contrary below). [ ] [ ]
B. D. Cross
Paul R. Calcaterra
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR
ANY INDIVIDUAL NOMINEE, INSERT THAT NOMINEE'S
NAME ON THE LINE PROVIDED BELOW.
_____________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED ABOVE.
_________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED
ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING,
THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN
ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF
DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS
PROXY CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO
VOTE WITH RESPECT TO THE ELECTION OF ANY PERSONS AS DIRECTORS
WHERE THE NOMINEES ARE UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT
SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL MEETING.
_________________________________________________________________
<PAGE>
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the
Annual Meeting or at any adjournment thereof and after notifica-
tion to the Secretary of the Company at the Annual Meeting of the
stockholder's decision to terminate this proxy, then the power of
said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned hereby revokes any and
all proxies heretofore given with respect to the shares of Common
Stock held of record by the undersigned.
The undersigned acknowledges receipt from the Company prior
to the execution of this proxy of a Notice of Annual Meeting, the
Company's Proxy Statement for the Annual Meeting and an Annual
Report for the 1996 fiscal year.
Signature _______________________________
Signature _______________________________
Date _____________________________, 199__
Please sign exactly as your name appears on the enclosed
card. When signing as attorney, executor, administrator, trustee
or guardian, please give your full title. Corporation proxies
should be signed in corporate name by an authorized officer. If
shares are held jointly, each holder should sign.
_________________________________________________________________
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
_________________________________________________________________
