SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
HEARTLAND BANCSHARES, INC.
- ------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BARRETT ROCHMAN
- ------------------------------------------------------------------------------
(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:
N/A
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
---------------------------------------------------------------------
(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):
N/A
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
---------------------------------------------------------------------
(5) Total fee paid:
N/A
---------------------------------------------------------------------
[ ] 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:
N/A
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
---------------------------------------------------------------------
(3) Filing Party:
N/A
---------------------------------------------------------------------
(4) Date Filed:
N/A
---------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
OF
BARRETT R. ROCHMAN
P.O. BOX 3074
CARBONDALE, ILLINOIS 62902
SOLICITATION OF PROXIES IN OPPOSITION
TO PROXIES TO BE SOLICITED BY THE BOARD OF DIRECTORS
FOR USE AT THE
1998 ANNUAL MEETING OF SHAREHOLDERS
OF
HEARTLAND BANCSHARES, INC.
GENERAL
This Proxy Statement and the enclosed BLUE PROXY are being sent to the
holders of common stock of Heartland Bancshares, Inc. in connection with the
solicitation by Mr. Barrett R. Rochman of proxies to be voted at the upcoming
1998 Annual Meeting of Shareholders of Heartland Bancshares, and at any and
all adjournments of such meeting. You will be notified of the exact date,
time and location of the 1998 Annual Meeting through a written Notice of
Annual Meeting of Shareholders which you will receive from Heartland
Bancshares at such time as the details for the 1998 Annual Meeting have been
publicly released.
I intend to request management to provide me with a copy of Heartland
Bancshares' shareholders list. If Management refuses to provide to me any of
this information, I will deliver this Proxy Statement and the accompanying
BLUE PROXY to Heartland Bancshares for prompt forwarding to Heartland
Bancshares' shareholders. Heartland then will mail my proxy materials to
shareholders in accordance with applicable federal securities laws.
Based upon Heartland's most recent quarterly report filed with the
Securities and Exchange Commission ("SEC") there were approximately 876,875
shares of common stock, $.01 par value per share, of Heartland Bancshares
outstanding as of the close of business on November 8, 1997. Each share of
Heartland Bancshares is entitled to one vote on each matter to be considered
at the Annual Meeting. The address of Heartland Bancshares' principal office
is 318 South Park Avenue, Herrin, Illinois 62948.
Assuming management solicits proxies for use at the 1998 Annual Meeting
of Shareholders, you will receive two different proxy statements, each with
its own accompanying form of proxy, in connection with the 1998 Annual Meeting
of Shareholders of Heartland Bancshares. These will be VERY DIFFERENT in that
both the Board of Directors of Heartland Bancshares and I will be separately
attempting to obtain authority from you in order to vote your shares in
accordance with our respective recommendations. You are receiving this Proxy
Statement and the enclosed BLUE PROXY from me. In the event that management
solicits proxies for use at the Annual Meeting, you also will receive a
separate proxy statement and a proxy card from the Board of Directors of
Heartland similar to the way you received such materials last year. I
encourage you to sign and return only the enclosed BLUE PROXY and NOT the
proxy card which you may receive from Heartland.
If you do sign, date and return a BLUE PROXY to me and if you also sign
and return a proxy card to Heartland Bancshares, only the most recently dated
proxy card will be counted. You may NOT use the BLUE PROXY to vote for
certain matters and also use the proxy card that may be sent to you by the
Board
<PAGE>
of Directors of Heartland to vote for other matters. ONLY ONE PROXY WILL BE
COUNTED AND USED AT THE 1998 ANNUAL MEETING OF SHAREHOLDERS.
I am soliciting proxies for use at the 1998 Annual Meeting (i) to vote in
favor of my election to the Board of Directors of Heartland Bancshares; (ii)
to vote in favor of the election of one of the nominees, if any, named by the
Board of Directors of Heartland, if I determine in my discretion to vote in
favor of one of the Board's nominees, (iii) to vote in favor of my shareholder
proposal pertaining to the recommendation to Heartland Bancshares' Board of
Directors to hire an investment banking firm to make specific recommendations
to the Board of Directors in order to enhance shareholder value; and (iv) to
vote in my discretion on such other matters that may properly be presented at
the 1998 Annual Meeting.
I urge you to vote FOR the election of me as a director of Heartland
Bancshares and FOR my proposal with regard to hiring an investment banking
firm to suggest actions designed to enhance the value of our Heartland
shares. I urge you to sign, date and return the enclosed BLUE PROXY as soon
as possible, even if you plan to attend the 1998 Annual Meeting.
IMPORTANT -- PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED BLUE PROXY AND
RETURN IT TO ME AS SOON AS POSSIBLE IN THE SELF-ADDRESSED, POSTAGE-PREPAID
ENVELOPE PROVIDED. WHEN YOU RECEIVE A PROXY CARD FROM THE BOARD OF DIRECTORS
OF HEARTLAND BANCSHARES RELATING TO THE 1998 ANNUAL MEETING OF SHAREHOLDERS,
PLEASE DO NOT SIGN OR RETURN IT TO HEARTLAND BANCSHARES BECAUSE IF YOU DO SO,
IT MAY REVOKE ANY PROXY THAT YOU RETURN TO ME. YOU MAY REVOKE A BLUE PROXY BY
MERELY SIGNING AND RETURNING A NEW PROXY (DATED SUBSEQUENT TO ANY PREVIOUS
PROXY), BY ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON OR BY SENDING ME
A WRITTEN NOTICE OF REVOCATION OF YOUR PROXY AT THE ADDRESS SHOWN ON PAGE 1.
REMEMBER -- ONLY THE LATEST DATED PROXY THAT YOU SIGN AND RETURN WILL BE
VALID AND WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.
REASONS THAT I AM SOLICITING PROXIES
I have determined to seek a position on the Board of Directors in an
effort to encourage:
- the Board to reduce the amount of directors' fees paid
- to focus its attention on improving the financial performance of
Heartland Bancshares
- to maximize all shareholders' investments in Heartland
Bancshares.
I believe that I can serve the best interests of the shareholders of
Heartland Bancshares. My interests as the second largest shareholder of
Heartland should, I believe, be closely aligned with the interests of
shareholders of Heartland Bancshares as a whole. Accordingly, I requested the
Board of Directors of Heartland Bancshares to include me on their slate of
director nominees for election at the 1998 Annual Meeting of Shareholders. To
date, the Board has not done so. Therefore, I will nominate myself for
election as a director at the 1998 Annual Meeting. I believe that the
interests of all shareholders will be best served by my election to Heartland
Bancshares' Board of Directors since I will be committed to making efforts to
-2-
<PAGE>
enhance the value of Heartland Bancshares' common stock. As a further
indication of my interest in serving you - the shareholders of Heartland
Bancshares - I will waive my director's fees until Heartland earns at least 1%
on its assets.
I believe that the directors are not operating Heartland Bancshares in a
manner that is adequately enhancing the value of Heartland Bancshares' common
stock. My most significant concerns include: (i) the excessive directors'
fees paid to directors, (ii) the low return on shareholders' equity, and (iii)
the low return on total assets.
Based upon Heartland's proxy statement for last year's annual meeting,
the directors receive about $900 each month in director's fees from Heartland
Bancshares and Heartland National Bank. That is almost $11,000 a year. I
think those fees are too high and based, in part, upon a comparison of the
director's fees paid by similarly sized financial institutions in nearby
communities, I would like to see the director's fees reduced.
Representatives of the following similarly-sized financial institutions
provided the following information as to their director's fees:
1. First National Bank of Steelville pays each director $8,400 a year,
in director's fees.
2. Bank of Herrin pays director's fees of approximately $6,000 a year to
each director.
3. First National Bank of Carbondale pays each director approximately
$8,000 a year in director's fees.
With respect to Heartland's financial performance, based upon the
financial information contained in Heartland's most recent quarterly report
filed with the SEC, on an annualized and undiluted basis for the first nine
months of 1997, Heartland Bancshares earned less than 0.3% on its total assets
and had a return on shareholder's equity of less than 4.50%. I believe that a
bank should earn a return on total assets of at least 1% annually. In January
1998, the Southern Illinoisan reported that the 1997 national average return
on assets for national banks was 1.24%. Additionally, I believe that
Heartland should be providing shareholders with a return on our equity of
somewhere between 10% and 15% per year, not the less than 5% that Heartland
had.
I need your support in order to elect me to the Board of Directors of
Heartland Bancshares. I am genuinely interested in Heartland Bancshares and,
if elected as a director, I will make every effort to enhance the value of
your Heartland Bancshares' stock.
According to the most recent amendment to my Schedule 13D filed with the
SEC, I beneficially own 70,864 of the outstanding shares of common stock of
Heartland Bancshares, but I disclaim ownership of 1,426 shares owned by my
wife. Based upon the most recent quarterly report filed by Heartland with the
SEC, there are 876,875 shares of common stock of Heartland Bancshares are
outstanding. As such, the shares that I own represent approximately 7.9% of
the outstanding shares of common stock of Heartland Bancshares. As such,
based upon information filed by or with respect to Heartland, I am the largest
shareholder of Heartland Bancshares other than Heartland's Employee Stock
Ownership Plan. Based upon the same information, I presently own more shares
of common stock of Heartland Bancshares than any current director or officer
owns.
-3-
<PAGE>
ELECTION OF DIRECTORS
The By-Laws of Heartland provide that the Board of Directors of Heartland
Bancshares is comprised of six directors divided into three classes as nearly
equal in number as possible. The directors of each class are elected to serve
for a term of three years and until their successors have been elected or
qualified. One class is to be elected annually by the shareholders of
Heartland Bancshares. Based upon this, a class of two directors is to be
elected at the upcoming 1998 Annual Meeting for a term expiring at the Annual
Meeting in the year 2001.
The Articles of Incorporation of Heartland Bancshares do not permit
cumulative voting by shareholders. The two nominees receiving the highest
number of votes will be elected as directors. Since I intend to vote only for
myself for election as a director (and assuming that I receive a sufficient
number of proxies to elect myself to the Board), I will be elected as a
director. I have agreed to serve as a director of Heartland Bancshares if
elected.
Since only a shareholder's LATEST DATED PROXY will be counted at the
Annual Meeting, a shareholder choosing to vote by proxy for my election as a
director by using the enclosed BLUE PROXY may not use the proxy card that may
be provided by the Board of Directors of Heartland Bancshares to vote for any
of the two directors that may be nominated by the Board of Directors of
Heartland Bancshares. However, a shareholder may be able to use the enclosed
BLUE PROXY to vote for the election of one of the nominees, if any, named by
the Board of Directors to the Board if I determine in my discretion to vote in
favor of one of the nominees of the Board of Directors. I will determine, in
my discretion, whether or not to vote in favor of one of the two nominees, if
any, named by the Board of Directors. IN ADDITION, A SHAREHOLDER CANNOT USE
THE PROXY CARD THAT MAY BE PROVIDED BY THE BOARD OF DIRECTORS OF HEARTLAND
BANCSHARES TO VOTE FOR ME.
In the event that I am elected to the Board of Directors, I would obtain
only a minority representation on the Board. Since I would constitute a
minority of Heartland Bancshares' Board of Directors, if elected, the adoption
of any measures aimed at reducing directors' fees or at enhancing the value of
Heartland Bancshares' common stock would require the approval of at least
three of the other directors of Heartland Bancshares.
Absent instructions to the contrary, the BLUE PROXIES received by me will
be voted FOR the election of me as a director of Heartland Bancshares and FOR
the election of one of the nominees, if any, named by the Board of Directors
in their proxy materials to the Board, if I determine in my discretion to vote
in favor of one of the nominees of the Board of Directors.
APPROVAL OF MY PROPOSAL
I intend to submit to management the proposal set forth below for
consideration by the shareholders of Heartland Bancshares at the upcoming 1998
Annual Meeting. Additionally, I also intend to submit to management of
Heartland Bancshares a statement in support of my proposal. Absent
instructions to the contrary, the BLUE PROXIES received by me will be voted
FOR the shareholder proposal.
At the 1998 Annual Meeting, I intend to propose that the shareholders of
Heartland Bancshares adopt the following resolution:
-4-
<PAGE>
My Shareholder Proposal
- -----------------------
RESOLVED, that the shareholders of Heartland Bancshares, present in
person or by proxy, recommend that, in order to enhance shareholder
value, 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 to be taken to improve earnings of Heartland
Bancshares and enhance shareholder value, 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.
My Statement in Support of My Proposal
- --------------------------------------
I believe that Heartland Bancshares' financial performance recently has
been very disappointing. In its most recent quarterly report filed with the
SEC, Heartland Bancshares reported third quarter earnings of only $30,000, or
$0.04 cents a share, compared to 1996 third quarter earnings of $295,000, or
$0.36 cents a share. Based upon the financial information contained in such
report, on an annualized and undiluted basis for the first nine months of
1997, Heartland earned less than 0.30% on its total assets and showed a return
on shareholders' equity of only 4.27%. Shareholders could receive a greater
return on their assets by investing in an insured certificate of deposit at
Heartland National Bank or most any other bank. I feel these results are
unacceptable, and I have been unhappy with Heartland's performance since it
became a public company in June, 1996. I believe a bank should earn a return
on total assets of at least 1% annually. In January 1998, the Southern
Illinoisan reported that the 1997 national average return on assets for
national banks was 1.24%. Accordingly, Heartland's return on assets on an
annualized basis for the first nine months of 1997 was approximately 75% below
the national average for 1997. Additionally, I believe that Heartland should
be providing shareholders with a return on our equity of somewhere between 10%
and 15% per year.
I believe that the Board of Directors should hire an investment banking
firm or other appropriate consultant to assist the Board in taking action
designed to improve earnings and shareholder values at Heartland.
Accordingly, I urge you to vote in favor of my proposed resolution. Please
note, however, that if my resolution is approved by shareholders, it would
recommend that the Board of Directors take certain action but not mandate any
action.
Absent instructions to the contrary, the BLUE PROXIES received by me will
be voted FOR my proposed resolution. The affirmative vote of a majority of
the shares represented at the 1998 Annual Meeting is required to approve my
proposed resolution.
CERTAIN INFORMATION CONCERNING
BARRETT ROCHMAN
My principal occupation is the real estate investment business, and I am
Managing Partner of S.I. Securities and N.I. Securities. My real estate
investment business represents parties throughout the State of Illinois who
own real estate valued at over $500 million. A portion of my real estate
investment activities includes the tax certificate business. I have over 30
years of experience as a real estate investor. I am 55 years old and both my
office and home are located in Carbondale, Illinois, where I have lived for
the past 35 years. My business address is P.O. Box 3074, Carbondale, Illinois
62902. The shares of Heartland Bancshares' common stock that I beneficially
own are held by me individually, by my wife, by a nonprofit
-5-
<PAGE>
corporation and by a family investment. Based upon information available to
me, the shares owned by me constitute approximately 7.9% of the outstanding
voting shares of Heartland Bancshares.
Neither I, nor any of my associates, (i) are, or within the past year
have been, a party to any contract, arrangement or understanding with any
person with respect to any securities of Heartland Bancshares, (ii) have, or
during the past two years had, a direct or indirect interest in any
transaction or series of similar transactions or in any currently proposed
transaction or series of proposed transactions to which Heartland Bancshares,
or any of its subsidiaries, was or is to be a party, (iii) have any
arrangement or understanding with any person with respect to any future
transactions to which Heartland Bancshares or any of its affiliates will or
may be a party, or (iv) have any arrangement or understanding with any person
with respect to future employment by Heartland Bancshares or its affiliates.
I, or companies that I control, have had loans outstanding to Heartland
National Bank since the beginning of its last fiscal year. The total
outstanding principal balance of my loans was approximately $_______ as of
February ___, 1998. All of these loans were made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and did not involve more than the normal risk of collectibility
or present other unfavorable features.
I have no arrangement or understanding with any other person or persons
pursuant to which I have been nominated as a director of Heartland
Bancshares. Neither I, nor any of my associates, have any interest in the
matters to be voted upon at the 1998 Annual Meeting other than an interest, if
any, as a shareholder of Heartland Bancshares.
I estimate that my total expenditures relating to my solicitation of
proxies will be approximately [$25,000] (including, without limitation, costs
related to attorneys, printing, transportation and other costs incidental to
the solicitation). Total cash expenditures to date relating to this
solicitation have been approximately $_________. If elected as a director, I
intend to seek reimbursement of these expenses from Heartland Bancshares. I
do not know if the Board of Directors will submit my reimbursement request to
a vote of shareholders of Heartland Bancshares.
During the past two years, I have made the following purchases and sales
of Heartland Bancshares' common stock:
(1) On June 28, 1996, I purchased 1,426 shares of Heartland Bancshares.
(2) On June 28, 1996, Marilyn Rochman, my wife, purchased 1,426 shares
of Heartland Bancshares.
(3) On July 1, 1996, I purchased 5,000 shares of Heartland Bancshares.
(4) On July 2, 1996, I purchased 6,000 shares of Heartland Bancshares.
(5) On July 8, 1996, I purchased 4,000 shares of Heartland Bancshares.
(6) On July 9, 1996, I purchased 4,000 shares of Heartland Bancshares.
(7) On July 10, 1996, I purchased 4,000 shares of Heartland Bancshares.
(8) On July 11, 1996, I purchased 7,400 shares of Heartland Bancshares.
(9) On July 11, 1996, I purchased 3,000 shares of Heartland Bancshares.
(10) On July 15, 1996, I purchased 5,500 shares of Heartland Bancshares.
(11) On July 17, 1996, I purchased 6,000 shares of Heartland Bancshares.
(12) On July 23, 1996, I purchased 1,715 shares of Heartland Bancshares.
(13) On July 30, 1996, I purchased 3,000 shares of Heartland Bancshares.
(14) On July 31, 1996, I purchased 1,000 shares of Heartland Bancshares.
(15) On August 26, 1996, I purchased 3,000 shares of Heartland Bancshares.
-6-
<PAGE>
(16) On September 6, 1996, the Barrett Rochman Family Investment
purchased 2,000 shares of Heartland Bancshares for which no funds of
mine were used.
(17) On September 18, 1996, I transferred 7,570 of his shares of
Heartland Bancshares to the Boo Rochman Charitable Corporation.
(18) On September 18, 1996, I transferred an aggregate of 4,673 shares of
Heartland Bancshares to my children as follows:
(i) 949 shares were transferred to Kenneth Rochman;
(ii) 949 shares were transferred to Jamie Rochman;
(iii) 949 shares were transferred to Timothy Rochman;
(iv) 919 shares were transferred to Corie Rochman; and
(v) 907 shares were transferred to Karrie Ewers.
(19) On September 19, 1996, I purchased 10,000 shares of Heartland
Bancshares.
(20) On October 31, 1996, I purchased 3,500 shares of Heartland
Bancshares.
(21) On November 5, 1996, I purchased 2,000 shares of Heartland
Bancshares.
(22) On February 5, 1997, I purchased 4,000 shares of Heartland
Bancshares.
(23) On February 12, 1997, I purchased an aggregate of 600 shares of
Heartland Bancshares.
(24) On February 28, 1997, I purchased 800 shares of Heartland
Bancshares.
(25) On February 28, 1997, I purchased 4,200 shares of Heartland
Bancshares.
(26) On March 31, 1997, I sold 1,400 shares of Heartland Bancshares.
(27) On March 31, 1997, each of Jamie Rochman and Timothy Rochman
transferred 474 shares to me.
(28) On March 31, 1997, I made a charitable contribution of the 474
shares received from Jamie Rochman to the Boo Rochman Charitable
Corporation.
(29) On March 31, 1997, individuals other than I made a charitable
contribution of 1,422 shares to the Boo Rochman Charitable
Corporation.
(30) On April 10, 1997, I made a charitable contribution of the 474
shares received from Timothy Rochman to the Boo Rochman Charitable
Corporation.
(31) On October 2, 1997, the Boo Rochman Charitable Corporation sold
9,000 shares of Heartland Bancshares.
Certain of the shares acquired by me were purchased using borrowed
funds. The lenders were not Heartland Bancshares or Heartland National Bank.
The outstanding principal balance of these loans was approximately $________
as of February ____, 1998.
OTHER MATTERS
I am assuming that the only matters to be presented at the upcoming 1998
Annual Meeting will be (i) the election of two directors of Heartland
Bancshares, and (ii) the consideration of my shareholder proposal with regard
to hiring an investment banking firm for the purpose of making recommendations
to the Board of Directors of actions to be taken to enhance shareholder
value. If other matters are properly presented at the 1998 Annual Meeting,
the BLUE PROXY will grant me authority to vote such proxy in my discretion on
such matters. Although I do not expect any such matters to be presented, if
they are presented, I intend to vote in accordance with my best judgment on
such matters.
Shareholders are referred to Heartland Bancshares' Proxy Statement
relating to the 1998 Annual Meeting of Shareholders that will be sent to all
shareholders with respect to information concerning (i)
-7-
<PAGE>
beneficial ownership by management of Heartland Bancshares' securities, (ii)
beneficial owners of 5% or more of Heartland Bancshares' securities, (iii)
committees of Heartland Bancshares' Board of Directors, (iv) meetings of
Heartland Bancshares' Board of Directors and all committees thereof, (v)
certain information regarding the existing directors as well as management's
nominees to serve as directors of Heartland Bancshares, (vi) compensation and
remuneration paid and payable to Heartland Bancshares' directors and
management, and (viii) other matters required by law to be disclosed. I have
no independent knowledge as to the accuracy or completeness of the Proxy
Statement that will be sent to you by Heartland Bancshares' Board of Directors
in connection with the 1998 Annual Meeting of Shareholders.
The expense of preparing and mailing this Proxy Statement and my other
soliciting material, as well as my cost of soliciting proxies, will be borne
by me but, if elected, I will seek reimbursement of such costs and expenses
from Heartland Bancshares. In addition to the use of the mails, proxies may
be solicited by me, or by my employees who will not be specially compensated
for such soliciting, through the use of telephone, fax, telegram and personal
solicitation. I will also request brokerage firms, banks, nominees,
custodians and fiduciaries to forward solicitation material to the beneficial
owners of common stock of Heartland Bancshares held by such institutions or
persons, and I will reimburse such institutions and persons for their
reasonable costs of forwarding such material.
Shares of common stock of Heartland Bancshares represented by properly
executed BLUE PROXIES will be voted in the manner which you direct or, if no
specific direction is given, will be voted FOR election of me to the Board of
Directors of Heartland Bancshares, FOR the election of one of the nominees, if
any, named by the Board of Directors to the Board of Directors of Heartland
Bancshares, if I determine in my discretion to vote in favor of one of the
nominees of the Board of Directors, and FOR my proposal with regard to hiring
an investment banking firm for the purpose of making recommendations to the
Board of Directors regarding actions to be taken to enhance shareholder
value. In addition, shares of common stock of Heartland Bancshares
represented by properly executed BLUE PROXIES will be voted in my discretion
on any other matters that may properly be presented at the 1998 Annual
Meeting. I am not aware that any such other matters will be presented at the
1998 Annual Meeting.
Proxies marked as abstentions, broker non-votes or as withholding
authority to vote for me as a director will be treated as shares present for
purposes of determining whether a quorum for the 1998 Annual Meeting is
present, but will result in me receiving fewer votes.
Once the Board of Directors has established the date, time, place and
agenda for the 1998 Annual Meeting and the record date for shareholders of
Heartland Bancshares who are eligible to attend and vote at the Annual
Meeting, I may send additional information to you regarding the Annual
Meeting. If you are not a shareholder of Heartland Bancshares as of the
record date for the 1998 Annual Meeting, or if you buy or sell shares of
Heartland Bancshares common stock between the date of this Proxy Statement and
the record date for the 1998 Annual Meeting, then you may have to complete and
sign a new BLUE PROXY.
THE PROXIES THAT I RECEIVE WILL BE EXERCISED ONLY AT THE UPCOMING 1998
ANNUAL MEETING OF SHAREHOLDERS OF HEARTLAND BANCSHARES AND AT ANY ADJOURNMENT
THEREOF. THE PROXIES WILL NOT BE USED FOR ANY OTHER MEETING AND MAY BE
REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED.
YOUR VOTE IS IMPORTANT. NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN,
PLEASE VOTE FOR MY ELECTION AS A DIRECTOR OF HEARTLAND BANCSHARES
-8-
<PAGE>
AND FOR MY PROPOSAL BY COMPLETING, SIGNING, DATING AND MAILING THE ENCLOSED
BLUE PROXY AS SOON AS POSSIBLE.
PLEASE DO NOT SIGN AND MAIL ANY PROXY CARD OTHER THAN THE ENCLOSED BLUE
PROXY IF YOU WISH TO VOTE IN ACCORDANCE WITH MY RECOMMENDATIONS, INCLUDING ANY
PROXY CARD THAT YOU MAY RECEIVE FROM THE BOARD OF DIRECTORS OF HEARTLAND
BANCSHARES.
IT IS CRITICAL THAT YOU SIGN YOUR BLUE PROXY EXACTLY AS YOUR NAME APPEARS
ON YOUR STOCK CERTIFICATE OF HEARTLAND BANCSHARES. IF YOU OWN YOUR STOCK
JOINTLY, BOTH OWNERS SHOULD SIGN THE BLUE PROXY.
IMPORTANT
---------
If your shares of common stock are held in the name of your broker, bank
or other nominee, you will need to contact your broker, bank or nominee and
give them instructions as to the voting of your stock. Please contact the
person responsible for your account and instruct them to execute a BLUE PROXY
as soon as possible.
If you have any questions or need further assistance, please do not
hesitate to contact me at (618) 457-4334.
The date of this Proxy Statement is February ___, 1998.
* * *
-9-
<PAGE>
PROXY PROXY
PROXY SOLICITED ON BEHALF OF BARRETT ROCHMAN
SOLICITATION OF PROXIES FOR USE AT THE
1998 ANNUAL MEETING OF SHAREHOLDERS
OF
HEARTLAND BANCSHARES, INC.
The undersigned hereby appoints Barrett R. Rochman as proxy, with full
power to appoint his substitute, to represent and to vote, as indicated below,
all shares of common stock of Heartland Bancshares, Inc. ("Heartland
Bancshares") which the undersigned is entitled to vote at the 1998 Annual
Meeting of Shareholders of Heartland Bancshares and at any and all
adjournments thereof, upon the following matters:
1. ELECTION OF BARRETT R. ROCHMAN AS DIRECTOR.
-------------------------------------------
[ ] FOR the election of Barrett R. Rochman as a director of
Heartland Bancshares.
[ ] WITHHOLD AUTHORITY to vote for Barrett R. Rochman as a
director of Heartland Bancshares.
2. ELECTION OF ONE OF THE NOMINEES NAMED BY THE BOARD OF DIRECTORS
---------------------------------------------------------------
AS DIRECTOR.
------------
[ ] FOR the election of one of the nominees named by the Board of
Directors of Heartland Bancshares as a director of Heartland
Bancshares, if Mr. Rochman determines in his discretion to
vote in favor of one of the Board of Directors' nominees.
[ ] WITHHOLD AUTHORITY to vote for one of the nominees named by
the Board of Directors of Heartland Bancshares as a director
of Heartland Bancshares, if Mr. Rochman determines in his
discretion to vote in favor of one of the Board of Directors'
nominees.
3. PROPOSAL OF MR. ROCHMAN.
------------------------
Approval of Mr. Rochman's proposal with regard to hiring an investment
banking firm to make recommendations to the Board of Directors regarding
actions to be taken to improve earnings of Heartland Bancshares and enhance
shareholder value.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
4. OTHER MATTERS.
--------------
In Mr. Rochman's discretion, on such other matters as may properly be
presented at the 1998 Annual Meeting of Shareholders or at any adjournments
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF BARRETT R. ROCHMAN AS A DIRECTOR
OF HEARTLAND BANCSHARES, FOR THE ELECTION OF ONE OF THE NOMINEES, IF ANY NAMED
BY THE BOARD OF DIRECTORS IN THEIR PROXY SOLICITATION MATERIAL TO THE BOARD OF
DIRECTORS IF MR. ROCHMAN DETERMINES IN HIS DISCRETION TO VOTE FOR ONE OF THE
BOARD'S NOMINEES AND FOR THE PROPOSAL OF MR. ROCHMAN WITH REGARD TO HIRING AN
INVESTMENT BANKING FIRM TO MAKE RECOMMENDATIONS TO THE BOARD OF DIRECTORS
REGARDING ACTIONS TO BE TAKEN TO IMPROVE EARNINGS OF HEARTLAND BANCSHARES AND
ENHANCE SHAREHOLDER VALUE. WITH RESPECT TO ANY OTHER MATTERS THAT MAY
PROPERLY BE PRESENTED AT THE 1998 ANNUAL MEETING OF SHAREHOLDERS, MR. ROCHMAN
INTENDS TO VOTE IN ACCORDANCE WITH HIS BEST JUDGMENT ON SUCH MATTERS.
THE UNDERSIGNED HEREBY REVOKES ANY AND ALL PROXIES PREVIOUSLY GIVEN BY
THE UNDERSIGNED WITH RESPECT TO ALL SHARES OF COMMON STOCK OF HEARTLAND
BANCSHARES OWNED BY THE UNDERSIGNED.
Please sign exactly as your name appears on the stock records of
Heartland Bancshares. If there are two or more owners, both should sign this
Proxy. When signing as attorney, executor, administrator, trustee, guardian
or other representative capacity, please give full title as such. If owner is
a corporation, please indicate full corporate name and sign by an authorized
officer. If owner is a partnership, please indicate full partnership name and
sign by an authorized person.
Dated: ______________, 1998 _________________________________
(Signature)
_________________________________
(Signature, if held jointly)
<PAGE>
BARRETT R. ROCHMAN
P.O. BOX 3074
CARBONDALE, ILLINOIS 62902
(618) 457-4334 OR (800) 529-3515
February ___, 1998
Dear Fellow Shareholder:
Now that several months have passed since Heartland's first Annual
Meeting of Shareholders last April, I wanted to write to you and give you my
thoughts on the progress of our company in 1997.
I was greatly disappointed with the financial performance of Heartland
during the first nine months of its 1997 fiscal year. On an annualized basis
for the first nine months in 1997, Heartland earned less than 0.3% on its
total assets and showed a return on shareholders equity of less than 4.50%. I
feel these results are unacceptable, and I have been unhappy with Heartland's
performance since it became a public company in June, 1996. I have been
reliably informed that the standard for our banking industry is a return on
total assets of at least 1% annually. Concurrently a return on total equity
of between 10% and 15% should also be achieved per year. While I understand
that Heartland may need some time to achieve these benchmarks, the bank is
nevertheless significantly below these thresholds. (Please compare these
numbers with any of the other banks in the area to understand the magnitude of
the disparity.)
On another note, I would like the opportunity to set the record straight
on a few matters because I believe Heartland made unfair and untrue statements
about my shareholder proposal and about me in 1997. As you probably recall, I
suggested a proposal for shareholders to consider at Heartland's Annual
Meeting of Shareholders held in April, 1997. The proposal, in essence,
recommended that the Board of Directors of Heartland should examine whether a
sale of Heartland was feasible and in the best interests of all shareholders
and then should report its findings to shareholders. I have enclosed a copy
of my exact proposal.
At no time did I require or call for the Board of Directors to sell
Heartland, as the Board incorrectly claimed. Further, I never suggested that
Heartland should consider hanging out a "For Sale" sign in front of the bank,
as the Board also inaccurately claimed. That would be ridiculous and not good
for the shareholders of Heartland.
My proposal was voted upon by shareholders at the Annual Meeting but,
unfortunately, was not adopted. However, I received good support for the
resolution and am encouraged by the response of shareholders. Nearly 24% of
the votes cast at the meeting were voted in favor of my proposal -- and that
was without you receiving my proxy materials explaining my proposal or having
an opportunity to return your proxy to me. Approximately 21% of the shares
represented at the meeting were not voted, and I believe that a large number
of shares were not voted at the meeting because of some confusion as to how to
vote shares held by in street name by brokers. I also believe that many of
those unvoted shares would have been voted in favor of my proposal.
<PAGE>
Further, if you signed and returned a proxy card to management, then
management voted your shares (in addition to the almost 23% of the outstanding
shares that the directors and executive officers owned) against my proposal
even though you did not give them specific instructions to do so.
The actual result of the vote on my proposal was as follows:
NO. OF SHARES
-------------
FOR: 146,536
NOT VOTED: 166,667
ABSTAIN: 9,200
AGAINST: 464,561
I also expressed an interest in becoming a director of Heartland but
later withdrew my nomination. I was greatly disappointed by the way Heartland
portrayed me in communications to you. Heartland made unsubstantiated and
untrue claims about me that injured my reputation and questioned my
integrity. I was troubled by the fact that Heartland tried to stop me at
every turn from exercising the rights which you and I have as
shareholders.(1) We have the right to be involved with our company and to run
for the Board. I cannot understand why the directors were against having
persons other than themselves run for election to the Board and also against
having others express an interest in our company.
I continue to be distressed by the way Heartland's management handled my
director candidacy and shareholder proposal and the way they resorted to
making false statements about my proposal and about me personally in an effort
to convince shareholders to vote their way. I believe their actions impacted
the result of the vote on my proposal and consequently contributed to the
withdrawal of my director candidacy. Thus, I have reported their
inappropriate actions to the Securities and Exchange Commission.
As you may know, I am the largest shareholder of Heartland outside of the
Employee Stock Ownership Plan and am very much interested in the business of
Heartland and Heartland National Bank, since the value of my investment, as
well as yours, is directly affected by the success of Heartland and Heartland
National Bank. I intend to continue to monitor Heartland's performance and to
report my findings to you from time to time. Everything I am doing is in an
effort to further the best interests of all Heartland shareholders.
- ------------------
(1) Heartland's most recent Form 10-QSB indicates that its legal and
professional fees had increased approximately 673% during the nine months
ended September 30, 1997 as compared to September 30, 1996 ($202,000 versus
$30,000). This increase resulted in part from the legal fees the Heartland
spent to fight my shareholder proposal and director candidacy. I suspect that
these legal fees probably were a much greater cost to the Company than
completing the study that I proposed.
<PAGE>
With your support and involvement, we can make a difference at Heartland
Bancshares. If you have any questions or would like to discuss my concerns
further, please do not hesitate to call me at (618) 457-4334 or (800)
529-3513.
Sincerely,
/s/ Barrett R. Rochman
Barrett R. Rochman
<PAGE>
PROPOSAL OF
MR. BARRETT R. ROCHMAN
PRESENTED AT THE ANNUAL MEETING OF SHAREHOLDERS
OF
HEARTLAND BANCSHARES, INC.
ON APRIL 24, 1997
RESOLVED, that the shareholders of Heartland Bancshares recommend that
the Board of Directors undertake an appropriate study and engage an investment
banker, subsequent to June, 1997, to examine the feasibility of a sale of
Heartland Bancshares and to determine whether such a sale is in the best
interests of shareholders and further recommend that the Board of Directors
prepare a report, at reasonable expense, regarding its study for distribution
to shareholders within six months after the 1997 Annual Meeting of
Shareholders.
