<PAGE>
<PAGE>
SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 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)
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 __, 1998
Dear Stockholder:
We invite you to attend the 1998 Annual Meeting of
Stockholders of Heartland Bancshares, Inc. to be held at
the Herrin Civic Center, 101 S. 16th Street, Herrin, Illinois on
Thursday, April 30, 1998 at 2:00 p.m., local time. The
accompanying Notice of Annual Meeting, the Company's Proxy
Statement, a White Proxy Card and the 1997 Annual Report to
Stockholders accompany this letter.
You may have received materials from Barrett Rochman
requesting that you support Mr. Rochman and an associate of his
for election to the Company's Board of Directors. Mr. Rochman
also seeks to present to the Annual Meeting the same proposal he
presented last year that was soundly rejected by stockholders.
We strongly urge you to support management's nominees and to
once again reject Mr. Rochman's proposal.
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,
[SIGNATURE]
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 30, 1998
________________________________________________________________
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of
Stockholders ("Annual Meeting") of Heartland Bancshares, Inc.
(the "Company"), will be held at the Herrin Civic Center located
at 101 S. 16th Street, Herrin, Illinois at 2:00 p.m., local
time, on Thursday, April 30, 1998.
A White 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;
2. A stockholder proposal as described in the
accompanying proxy statement, if properly presented
at the Annual Meeting; and
3. 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
proposals 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 20, 1998, are the stockholders
entitled to vote at the Annual Meeting and any adjournments
thereof.
You are requested to fill in and sign the enclosed White
Proxy Card which is solicited by the Board of Directors and to
mail it promptly in the enclosed envelope. The White Proxy Card
will not be used if you attend and vote at the Annual Meeting in
person.
We urge you NOT to sign any blue proxy card you may receive
from Mr. Rochman. If you wish to support your current Board,
whether or not you have previously executed a blue proxy card
solicited by Mr. Rochman, please complete, sign, date and return
the enclosed WHITE PROXY CARD being solicited by your Board of
Directors. ONLY YOUR LATEST DATED PROXY COUNTS.
If your shares are registered in "street name," only your
broker or bank can vote your shares and only upon receipt of
your specific instructions. Please contact the person
responsible for your account and instruct that individual to
vote on the White Proxy Card on your behalf today in accordance
with the Board's recommendation.
BY ORDER OF THE BOARD OF DIRECTORS
[SIGNATURE]
CHRISTY L. CRIPPS
SECRETARY
Herrin, Illinois
March __, 1998
________________________________________________________________
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>
________________________________________________________________
PROXY STATEMENT
OF
HEARTLAND BANCSHARES, INC.
318 SOUTH PARK AVENUE
HERRIN, ILLINOIS 62948-3604
ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1998
________________________________________________________________
________________________________________________________________
GENERAL
________________________________________________________________
This Proxy Statement and the enclosed White Proxy Card are
furnished in connection with the solicitation of proxies by the
Board of Directors of Heartland Bancshares, Inc. (the "Company")
to be used at the 1998 Annual Meeting of Stockholders of the
Company (the "Annual Meeting") which will be held at the Herrin
Civic Center, 101 S. 16th Street, Herrin, Illinois on Thursday,
April 30, 1998, at 2:00 p.m., local time. The accompanying
Notice of Annual Meeting, this Proxy Statement and the White
Proxy Card are being first mailed to stockholders on or about
March __, 1998.
________________________________________________________________
VOTING SECURITIES
________________________________________________________________
The securities entitled to vote at the Annual Meeting
consist of the Company's common stock $0.01 par value per share
(the "Common Stock"). Stockholders of record as of the
close of business on March 20, 1998 (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.
________________________________________________________________
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 COMPANY'S NOMINEES FOR DIRECTORS AND AGAINST THE STOCKHOLDER
PROPOSAL. The White 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, White Proxies will
be voted by those named therein in accordance with the
determination of a majority of the Board of Directors. Other
than the election of directors to the Board of Directors and the
stockholder proposal, the Board of Directors is not currently
aware of any other matters to be brought before the Annual
Meeting. White 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. White 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. White 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 White 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.
<PAGE>
<PAGE>
The presence in person or by proxy of the holders of a
one-third of the outstanding shares of the Company's common
stock, $0.01 par value per share (the "Common Stock") entitled
to vote at the Annual Meeting is necessary to constitute a
quorum thereat.
IF YOU WISH TO SUPPORT YOUR CURRENT BOARD, WHETHER OR
NOT YOU HAVE PREVIOUSLY EXECUTED A BLUE PROXY CARD SOLICITED BY
MR. ROCHMAN, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
WHITE PROXY CARD BEING SOLICITED BY YOUR BOARD OF DIRECTORS.
ONLY YOUR LATEST DATED PROXY COUNTS.
________________________________________________________________
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(2)
- ------------------- ------------ --------------
<S> <C> <C>
Heartland Bancshares, Inc. 70,150 (3) 8.00%
Employee Stock Ownership Plan
318 South Park Avenue
Herrin, Illinois 62948-3604
Barrett Rochman 69,438 7.92
P.O. Box 3074
Carbondale, Illinois 62901
All Directors and Executive
Officers as a Group
(8 persons) ______ (4) ____
<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) In calculating the percentage ownership of each named individual and the
group, the number of shares outstanding is deemed to include any shares of
Common Stock which the individual or the group has the right to acquire
within 60 days of the Record Date.
(3) 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.
(4) Includes ________ shares which have been allocated to the accounts of
executive officers in the ESOP and ______ shares which may be purchased
pursuant to options exercisable within 60 days of the Record Date. Does
not include ______ unallocated shares held by the ESOP.
</FN>
</TABLE>
2<PAGE>
<PAGE>
________________________________________________________________
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
2001. The Board of Directors has nominated Directors Roger O.
Hileman and Charles Stevens, 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 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 OR TERM OWNED AT THE PERCENT OF
NAME RECORD DATE ASSOCIATION TO EXPIRE RECORD DATE(1) CLASS(2)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2001
Roger O. Hileman 44 1995 1998 ______ (3) ____%
Charles Stevens 63 1973 1998 26,226 (4) 2.99
DIRECTORS CONTINUING IN OFFICE
James C. Walker 71 1959 1999 26,226 (4) 2.99
Randall A. Youngblood 45 1991 1999 26,226 (4) 2.99
Paul R. Calcaterra 47 1992 2000 26,226 (4) 2.99
B.D. Cross 67 1976 2000 26,226 (4) 2.99
</TABLE>
(footnotes on following page)
3<PAGE>
<PAGE>
<footnotes for table on previous page)
[FN]
____________
(1) Includes stock held in joint tenancy; stock owned as tenants
in common; stock owned or held by a spouse or other member
of the individual's household; stock allocated through
certain employee benefit plans of the Company; stock in
which the individual either has or shares voting and/or
investment power and shares which the individual has the
right to acquire at any time within 60 days of the
Record Date. Each person or relative of such person whose
shares are included herein exercises sole or shared voting
and dispositive power as to the shares reported. Does not
include shares with respect to which Directors Walker,
Stevens, Youngblood, Cross and Calcaterra have "voting
power" by virtue of their positions as trustees of the trust
holding 70,150 shares under the Company's ESOP. The ESOP
trustees must vote all allocated shares held in the ESOP in
accordance with the instructions of the participants.
Unallocated shares and allocated shares for which no timely
direction is received are voted by the ESOP trustees in
proportion to the participant-directed voting of allocated
shares.
(2) In calculating the percentage ownership of each named
individual, the number of shares outstanding is deemed to
include any shares of the Common Stock which the individual
has the right to acquire within 60 days of the Record Date.
(3) Includes ______ shares allocated to Mr. Hileman's account in
the ESOP and 4,384 shares which may be acquired pursuant to
options exercisable within 60 days of the Record Date.
(4) Includes 876 shares which may be acquired pursuant to
options exercisable within 60 days of the Record Date.
</FN>
The principal occupation of each nominee for director and
each continuing director of the Company for the last five years
is set forth below.
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 Chamber of Commerce, the Shagbark Girl Scout Council
Board (also serving on the Management Committee) and the City of
Herrin Economic Development 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 Johnston City, Illinois, and the
Country Cupboard Restaurant in Carterville, Illinois. He is a
former board member of 1st Bank and Trust of Mt. Vernon/
Mercantile and a former chairman of National Dealer Marketing
Council Board of International Dairy Queen. Mr. Stevens is a
member and director of the Carterville Chamber of Commerce and
the John A. Logan College Foundation Board. He is chairman of
the Trustees and a Deacon at First Baptist Church in
Carterville.
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.
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 a retiree of Southern Illinois University.
Prior to his retirement, he was Director of Off-Campus
Educational Programs in England, Germany and the United States.
He has a degree in Finance, an advanced degree in Management,
and was a certified computer professional. He supervised the
Bank Simulation Game for the Illinois Banker's School and served
as an executive officer for Mercantile Mortgage Co. and the Olin
Corporation.
4<PAGE>
<PAGE>
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>
Christy L. Cripps 42 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.
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,
1997, the Board of Directors of the Company met 14 times and the
Board of Directors of the Bank met 12 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, 1997 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 Calcaterra, Cross and Youngblood. The
Committee met three times during the year ended December 31,
1997 to examine and approve the audit report prepared by the
independent 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, 1997, 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 twice during the year ended
December 31, 1997. 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.
5<PAGE>
<PAGE>
________________________________________________________________
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,
1997, directors' fees for service on the Company's and the
Bank's Board totaled $47,400. Pursuant to the Heartland
Bancshares, Inc. 1996 Stock Option and Incentive Plan (the
"Option Plan"), non-employee directors of the Company received a
one-time automatic grant of 4,384 stock options in 1997 at an
exercise price equal to the fair market value on the date of
grant ($14.00 per share). In addition, pursuant to the terms of
the Heartland Bancshares, Inc. Management Recognition Plan, non-
employee directors received a plan share award of 1,753 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 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.
6<PAGE>
<PAGE>
________________________________________________________________
EXECUTIVE COMPENSATION AND OTHER BENEFITS
________________________________________________________________
Summary Compensation Table. The following table sets
forth cash and noncash compensation for the fiscal year ended
December 31, 1997 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>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION ------------------------
------------------------ RESTRICTED SECURITIES
NAME AND FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD(S)(1) OPTIONS COMPENSATION
- ----------------- ---- ------ ----- ------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Roger O. Hileman 1997 $ 88,400 $ 10,093 $ -- $122,752 $ 21,921 $ (2)
President and Chief 1996 84,000 8,405 -- -- -- --
Executive Officer 1995 80,000 8,190 -- -- -- 6,058
<FN>
____________
(1) Calculated as the number of shares of restricted stock awarded (8,768
shares) multiplied by the closing market price of the Common Stock
($14.00) on the date of grant.
(2) Consists of value of shares allocated to ESOP account.
</FN>
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR. The following table
contains information concerning the grant of stock options under
the Company's Option Plan to the Chief Executive Officer during
1997.
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE EXPIRATION
NAME OPTIONS GRANTED IN 1997 PRICE DATE
- ---- --------------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Roger O. Hileman 21,921 50.0% $14.00 01/28/08
</TABLE>
Option Year-end Value Table. The following table sets
forth information concerning the value of options held by the
Chief Executive Officer at the end of the fiscal year. No
options were exercised during 1997.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
-------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Roger O. Hileman -- 21,921 $ -- $35,622
<FN>
___________
(1) Based on aggregate fair market value of the shares of Common Stock
underlying the options at December 31, 1997 less aggregate exercise
price. For purposes of this calculation, the fair market value of the
Common Stock at December 31, 1997 is assumed to be equal to the closing
market price of $15.625 per share. All options granted to Mr. Hileman
were granted at an exercise price of $14.00 per share.
</FN>
</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
7<PAGE>
<PAGE>
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. 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
8<PAGE>
<PAGE>
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, 1997, 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, 1997, the
Bank's loans to directors and executive officers totaled
$584,796.49, or 4.8% of stockholders' equity at that date.
________________________________________________________________
ROCHMAN SOLICITATION
________________________________________________________________
On January 30, 1998, Mr. Barrett Rochman, a stockholder of
the Company, delivered a notice to the Company of his intent to
nominate himself to the Board of Directors of the Company. The
Board considered his request but opted to nominate Messrs.
Hileman and Stevens, two current members of the Board.
Subsequently, Mr. Rochman filed proxy materials with the
Securities and Exchange Commission indicating his intention to
solicit proxies to elect himself and David A. Burns to the Board
and in favor of the stockholder resolution described below. Mr.
Rochman has also mailed to certain stockholders a letter
informing such stockholders of his intention to conduct this
solicitation in opposition to management. Assuming such
nominations are properly made and the proposal properly
submitted to the Annual Meeting, the Company urges stockholders
to vote against these opposition nominees and against the
stockholder proposal.
Stockholders wishing to vote on the stockholder resolution
will be afforded an opportunity to do so on the White Proxy Card
being distributed by the Company and enclosed herewith.
YOUR BOARD OF DIRECTORS URGES STOCKHOLDERS TO VOTE THEIR
PREFERENCES ON THE COMPANY'S WHITE PROXY CARD AND TO DISCARD
ALL BLUE PROXY CARDS BEING DISTRIBUTED BY MR. ROCHMAN.
THE BOARD URGES YOU TO SUPPORT ITS CONTINUING EFFORTS TO
MAXIMIZE STOCKHOLDER VALUE FOR ALL STOCKHOLDERS OF THE
COMPANY BY VOTING FOR THE BOARD'S NOMINEES ON THE WHITE PROXY
CARD.
9<PAGE>
<PAGE>
________________________________________________________________
PROPOSAL 2 -- STOCKHOLDER PROPOSAL
________________________________________________________________
Mr. Barrett Rochman, 1345 E. Park, Carbondale, Illinois
62901, who beneficially owns 69,438 shares of Common Stock has
submitted the following proposal:
RESOLVED, that the shareholders of Heartland
Bancshares, present in person or by proxy, recommend
that the Board of Directors (a) engage the services
of an investment banking firm or other appropriate
consultant which specializes in financial institutions
to make recommendations to the Board of Directors as to
specific actions designed to improve earnings of Heartland
Bancshares and enhance shareholder values, and (b) prepare
a report regarding the investment banking firm's
recommendations, at reasonable expense, for distribution
to shareholders within six months of the 1998 Annual
Meeting of Shareholders.
MANAGEMENT'S STATEMENT IN OPPOSITION
The Board is aware of its fiduciary duties to Company
stockholders and is committed to the exploration and
consideration of strategies to enhance earnings and stockholder
value. The Board, because of its significant stock ownership
and only one management director, also believes its interests
are aligned with that of Mr. Rochman and all stockholders. To
that end, the Board engaged Ferguson & Company, a nationally
recognized financial institutions consulting firm, to assist in
its ongoing strategic planning process and have therefore
already substantially completed the goal of this proposal. The
Board believes that engaging any other consultant or investment
bankers to prepare a report for stockholders would be an
unnecessary expense at this time. While the Board strives to
keep its stockholders well informed through detailed public
filings with the Securities and Exchange Commission and through
its Annual Report which accompanies this Proxy Statement,
common sense will tell you that no business distributes its
detailed business plan to its stockholders.
The Board remains open to all opportunities with the
potential to enhance stockholder value. However, the Board
believes that the adoption of Mr. Rochman's proposal at this
time could create an uncertain public atmosphere which, in its
judgment, would disadvantage the Company in any current or
future efforts to pursue successfully various value-enhancing
strategies. Additionally, responding to proposals of this type
takes the Board's time and attention and the Company's resources
away from what we all agree to be the primary goal: improving
the Company's earnings and otherwise enhancing stockholder
value.
________________________________________________________________
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.
10<PAGE>
<PAGE>
________________________________________________________________
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 properly 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, LLP, which were the Company's
independent auditors for the 1997 fiscal year, have been
retained by the Board of Directors to be the Company's auditors
for the 1998 fiscal year. A representative of Gray Hunter
Stenn, LLP 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. As of the date of this Proxy
Statement, the Company estimates its expenditures in connection
with this solicited are $__________, excluding the costs
normally expended by the Company for a solicitation for election
of directors in the absence of a proxy contest.
The Company's 1997 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 ___,
1998. Any such proposals shall be subject to the requirements
of the proxy rules adopted under the Exchange Act.
11<PAGE>
<PAGE>
________________________________________________________________
FORM 10-KSB
________________________________________________________________
A COPY OF THE COMPANY'S FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1997 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
[SIGNATURE]
Christy L. Cripps
Secretary
Herrin, Illinois
March __, 1998
12<PAGE>
ADDITIONAL INFORMATION
TRANSACTIONS IN SHARES
OF THE COMPANY'S
NAME AND BUSINESS ADDRESS COMMON STOCK (1)(2)
- ------------------------- ----------------------
Paul R. Calceterra 25,000 shares - 6/28/96 (3)
821 N. 29th Street 350 shares - 1/28/98 (4)
Herrin, Illinois 62948
B.D. Cross (5) 25,000 shares - 6/28/96 (3)
350 shares - 1/28/98 (4)
Roger O. Hileman 10,000 shares - 7/1/96 (3)
318 South Park Avenue 11,000 shares - 7/1/96 (3)
Herrin, Illinois 62948 3,000 shares - 7/2/96 (3)
______ shares - 12/31/96 (6)
1,753 shares - 1/28/98 (4)
Charles Stevens 25,000 shares - 6/28/96 (3)
1000 W. Grand Avenue 350 shares - 1/28/98 (4)
Carterville, Illinois 62918
James C. Walker (5) 25,000 shares - 6/28/96 (3)
350 shares - 1/28/98 (4)
Randall A. Youngblood 25,000 shares - 6/28/96 (3)
305 N. 16th Street 350 shares - 1/28/98 (4)
Herrin, Illinois 62948
__________
(1) The Company's initial public offering was completed on
June 28, 1996. No shares were issued or outstanding prior
to the date.
(2) A part of the purchase price of the shares purchased by
certain directors represented funds borrowed from a
financial institution. The current outstanding balance
of each such loan is as follows: Mr. Calceterra: $______,
Mr. Hileman: $________ and Mr. Stevens: $________.
(3) Purchase
(4) Vesting of restricted stock
(5) Retired
(6) ESOP allocation.
Except as described elsewhere Company's Proxy Statement,
none of the persons listed above, nor any of their associates,
have any contracts, arrangements or understandings with any
person with respect to any securities of the Company, any
arrangement or understanding with any person with respect to any
future transactions to which the Company or its affiliates will
be a party.
<PAGE>
<PAGE>
REVOCABLE PROXY
HEARTLAND BANCSHARES, INC.
______________________________
ANNUAL MEETING OF STOCKHOLDERS
April 30, 1998
______________________________
The undersigned hereby appoints Randy Youngblood, Paul
Calceterra and B.D. Cross 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 1998 Annual Meeting of
Stockholders (the "Annual Meeting"), to be held at the Herrin
Civic Center, 101 S. 16th Street, Herrin, Illinois on Thursday,
April 30, 1998 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). [ ] [ ]
Roger O. Hileman
Charles Stevens
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.
FOR AGAINST ABSTAIN
--- ------- -------
2. Stockholder proposal [ ] [ ] [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE
ABOVE LISTED PROPOSAL.
________________________________________________________________
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED
ABOVE AND AGAINST THE STOCKHOLDER PROPOSAL. 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
notification 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 1997 fiscal year.
Dated: _______________________, 1998
__________________________ __________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
__________________________ __________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the envelope in
which this card was mailed. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title.
If shares are held jointly, each holder should sign.
________________________________________________________________
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
________________________________________________________________
