SCHEDULE 14A
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:
___ Preliminary Proxy Statement
___ Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
_X_ Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PRINCETON NATIONAL BANCORP, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
_X_ No fee required.
___ Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which
transaction applies:__________________________________
(2) Aggregate number of securities to which
transaction applies: _________________________________
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
______________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________
(5) Total fee paid: _____________________________________
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________
(2) Form, Schedule or Registration Statement: ____________
(3) Filing Party: _______________________________________
(4) Date Filed: _________________________________________
<PAGE> 2
PRINCETON NATIONAL BANCORP, INC.
NOTICE
of
Annual Meeting of Stockholders To Be Held April 8, 1997
To the Stockholders of
PRINCETON NATIONAL BANCORP, INC.
The Annual Meeting of Stockholders of Princeton National Bancorp,
Inc., a Delaware corporation, will be held at The Galleria, Princeton,
Illinois, on Tuesday, April 8, 1997 at 10:00 a.m., for the following
purposes:
(1) To elect three directors for a term of three years;
(2) To consider and vote upon an amendment to the Amended and
Restated Certificate of Incorporation of Princeton National
Bancorp, Inc. to increase the number of authorized shares of
Common Stock from 4,000,000 to 7,000,000; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on February 10, 1997
will be entitled to notice of and to vote at the meeting.
The Company's Annual Report to Stockholders for the year ended
December 31, 1996 is enclosed.
IMPORTANT! TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING,
PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE
ENVELOPE PROVIDED.
No postage is required if the proxy is mailed in the United States.
Lou Ann Birkey
Corporate Secretary
Princeton, Illinois
March 5, 1997
<PAGE> 3
Princeton National Bancorp, Inc.
606 South Main Street
Princeton, Illinois 61356
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are being
furnished in connection with the solicitation of proxies by the Board
of Directors of Princeton National Bancorp, Inc. (the "Company"), from
holders of the Company's outstanding shares of common stock, par value
$5.00 per share (the "Common Stock"), for use at the 1997 Annual
Meeting of Stockholders (the "Annual Meeting") to be held on April 8,
1997 at The Galleria, 1659 North Main Street, Princeton, Illinois, or
at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Meeting and in this Proxy Statement. The
Company will bear the costs of soliciting proxies from its
stockholders. In addition to soliciting proxies by mail, directors,
officers and employees of the Company, without receiving additional
compensation therefor, may solicit proxies by telephone or in person.
This Proxy Statement and form of proxy are first being mailed to the
Company's stockholders on or about March 5, 1997.
Voting at the Annual Meeting
The close of business on February 10, 1997, has been fixed as the
record date for the determination of stockholders of the Company
entitled to notice of and to vote at the Annual Meeting. As of the
close of business on that date, 2,723,966 shares of Common Stock were
outstanding and are entitled to vote at the Annual Meeting.
Each proxy that is properly signed and received prior to the Annual
Meeting will, unless such proxy has been revoked, be voted in
accordance with the instructions on such proxy. If no instructions
are indicated, proxies will be voted "for" the election of all
nominees named in the proxy, "for" adoption of the amendment to the
Amended and Restated Certificate of Incorporation of the Company (the
"Certificate") and in the discretion of the persons named in the proxy
on such other matters as may properly come before the Annual Meeting.
Any stockholder has the right to revoke a proxy at any time prior to
its exercise at the Annual Meeting. A proxy may be revoked by
properly executing and submitting to the Company a later-dated proxy
or by mailing written notice of revocation to Princeton National
Bancorp, Inc., 606 South Main Street, Princeton, Illinois 61356,
Attention: Lou Ann Birkey, Assistant Vice President and Corporate
Secretary. A stockholder may also revoke a proxy by appearing at the
Annual Meeting and voting in person. Proxies are valid only for the
meeting specified therein, or any adjournments of such meeting.
A quorum of stockholders is necessary to take action at the Annual
Meeting. A majority of the outstanding Common Stock, represented in
person or by proxy, shall constitute a quorum for the transaction of
business at the Annual Meeting. Votes cast by proxy or in person at
the Annual Meeting will be tabulated by the judges of election
<PAGE> 4
appointed for the meeting. The judges will determine whether a quorum
is present and will treat abstentions as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
Under certain circumstances, a broker or other nominee may have
discretionary authority to vote shares of Common Stock if instructions
have not been received from the beneficial owner or other person
entitled to vote. If a broker or other nominee indicates on the proxy
that it does not have instructions or discretionary authority to vote
certain shares of Common Stock on a particular matter, those shares
will not be considered as present for purposes of determining whether
a quorum is present or whether a matter has been approved.
The three nominees for director who receive the greatest number of
votes cast in person or by proxy at the Annual Meeting shall be
elected directors of the Company. The vote required for the amendment
to the Certificate is the affirmative vote of a majority of the shares
of Common Stock present in person or represented by proxy at the
Annual Meeting. For purposes of determining stockholder approval of
the amendment to the Certificate, abstentions will be treated as voted
against such matter.
PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of ten
directors who are divided into three classes. One class is elected
each year for a three-year term. At the Annual Meeting, Messrs.
Ernat, Sorcic and Longman will be nominated to serve in Class II until
the Annual Meeting of Stockholders to be held in 2000 and until their
successors have been duly elected and qualified.
All of the nominees are currently serving as directors of the Company.
Each of the nominees has agreed to serve as a director if elected, and
the Company has no reason to believe that any nominee will be unable
to serve. In the event of the refusal or inability of any nominee for
director of the Company to serve as director, the persons named in the
accompanying form of proxy shall vote such proxies for such other
person or persons as may be nominated as directors by the Board of
Directors of the Company, unless the number of directors shall have
been reduced by the Board.
The principal occupation of each person nominated for election as a
director, and each director continuing in office, his age, the year in
which he first became a director and the number of shares of Common
Stock that such person beneficially owned as of February 10, 1997 are
listed below. Except as set forth below, the nature of each
director's beneficial ownership is sole voting and investment power.
All of the nominees and directors continuing in office, other than
Messrs. Ervin Pietsch and John Ernat, also served on the board of
directors of the Company's wholly owned subsidiary, Citizens First
National Bank ("Citizens Bank") during 1996.
<PAGE> 5
The Board of Directors unanimously recommends that stockholders vote
"FOR" the election of the three nominees listed below.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Amount of Shares of
Principal Common Stock Beneficially
Occupation During Director Owned and Nature of
Name Last 5 Years Age Since Beneficial Ownership<F1>
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class II Nominees for Three-Year Terms
John Ernat Farmer 48 1994 3,624
Tony J. Sorcic Executive Vice 43 1986 8,216<F2>
President of the
Company
Thomas M. Longman President of D.B.P. 45 1991 4,635<F3>
Inc., a supplier of
business forms and
office products
Class III Continuing Directors -- Term Expires in 1998
Dr. Harold C. Hutchinson, Jr. Retired dentist 64 1989 6,923<F4>
Thomas R. Lasier Retired in 1993. President 61 1983 13,500<F5>
and General Manager of LCN
Closers, a division in
Ingersoll-Rand that
manufactures hardware for
more than 5 years prior to
retirement
Stephen W. Samet President and General 52 1986 3,928<F6>
Manager of WZOE, Inc., a
commercial radio
broadcasting company
Class I Continuing Directors -- Term Expires in 1999
Craig O. Wesner General Manger of Bureau 55 1997 3,884
Services Company
Don S. Browning President of Browning Ford, 56 1983 8,182
Inc., a Ford new car and
truck dealer, and President
of Browning Chrysler, Inc.,
a Chrysler new car and truck
dealer
Donald E. Grubb Farmer 56 1991 4,270<F7>
Ervin I. Pietsch Vice President, Corporate 56 1993 2,653
Quality, Ideal Electrical
Products
----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
- --------------------
<F1> All directors and executive officers of the Company as a group
beneficially own 60,265 shares of Common Stock, 2.21% of the
outstanding Common Stock.
<F2> Includes 1,552 shares held by his wife and 390 held by or in
custody for his sons.
<F3> Includes 700 shares held by his wife.
<F4> Includes 6,023 shares held in trust for which Dr. Hutchinson is
the trustee and beneficiary.
<F5> Includes 450 shares held in trust and 2,000 shares held by his
wife.
<F6> Includes 243 shares held by his wife.
<F7> Includes 725 shares held by his wife.
Board of Director Meetings and Committees
The Board of Directors held eight meetings during 1996. The Board of
Directors has an Executive Committee and an Audit Committee, and the
Board as a whole operates as a committee to nominate directors. Each
director of the Company attended at least 75% of the meetings of the
Board of Directors and the Committees on which he served.
The Executive Committee is authorized, to the extent permitted by law,
to act on behalf of the Board of Directors of the Company in the
interim between meetings of the Board. Directors Thomas R. Lasier,
Don S. Browning, Tony J. Sorcic and Stephen W. Samet are members of
the Executive Committee. The Committee did not meet during 1996.
The Audit Committee has the responsibility for reviewing the scope of
internal and external audit procedures, reviewing the results of
internal and external audits conducted with respect to the Company and
Citizens Bank and periodically reporting on such results to the Board
of Directors. Directors Don S. Browning, Stephen W. Samet and Craig
O. Wesner are members of the Audit Committee. The Committee met four
times during 1996.
The Board of Directors of Citizens Bank held 26 meetings during 1996.
The Board of Directors of Citizens Bank has Auditing & Accounting,
Trust Auditing & Accounting, Loan, Trust & Farm Management, Marketing
& Sales Management, CRA & Compliance, Personnel Policy & Salary,
Executive and Investment & Funds Management Committees. The
Committees collectively held a total of 61 meetings during 1996. Each
director of Citizens Bank attended at least 75% of the meetings of the
Citizens Bank Board of Directors and the Committees on which he
served.
<PAGE> 7
Compensation of Directors
Each director of the Company who is not also an employee of the
Company or an employee or director of Citizens Bank received a $250
fee for each Board meeting attended. Each director of the Company who
is also a director of Citizens Bank and who is not an employee of the
Company or Citizens Bank received a $50 fee for each Board meeting of
the Company attended in 1996. Each director of the Company, other
than Messrs. Pietsch and Ernat, is also a director of Citizens Bank.
During 1996, each director of Citizens Bank who is not also an
employee was paid a retainer ($9,500 per annum) plus a fee for each
Board and committee meeting attended. Each director of Citizens Bank
who is not also an employee, other than the Chairman of the Board,
received a $25 fee for each Citizens Bank Board meeting and committee
meeting attended in 1996. After attending five meetings of the same
committee, the director received a $50 fee for each subsequent meeting
of the same committee in 1996. The Chairman of the Board of Citizens
Bank received a $100 fee for each meeting of the Board attended in
1996. In addition, Citizens Bank paid $1,720 of organization dues on
behalf of the Chairman of the Board of Citizens Bank during 1996.
EXECUTIVE COMPENSATION
Summary
The following table summarizes compensation for services to the
Company and Citizens Bank for the years ended December 31, 1996, 1995
and 1994 paid to or earned by the Chief Executive Officer of the
Company and the other executive officer of the Company whose salary
and bonus exceeded $100,000 for the year ended December 31, 1996.
<PAGE> 8
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
--------------------------------------------------------------------------------------------------
All other
Name and Principal Position Year Salary($) Bonus($) compensation($) <F1>
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
D. E. Van Ordstrand <F2> 1996 $ 85,867 $12,150<F3> $2,576
President and Chief Executive Officer 1995 147,754 0 4,433
1994 157,796 5,000 4,500
Tony J. Sorcic 1996 148,020 11,000 4,440
Executive Vice President 1995 123,420 0 3,703
1994 106,520 4,000 3,190
<F1> The compensation reported represents Company matching
contributions to the Company 401(k) Plan.
<F2> Mr. Van Ordstrand retired as President of Citizens Bank as of
October 1, 1995. Mr. Van Ordstrand retired as President and
Chief Executive Officer of the Company as of December 31, 1996.
Mr. Sorcic was appointed President and Chief Executive Officer of
the Company as of January 1, 1997.
<F3> The compensation reported represents the value of Mr. Van
Ordstrand's company car, which was awarded to him in connection
with his retirement in lieu of a cash bonus.
</TABLE>
Employment Agreements
Mr. Sorcic has an employment agreement with the Company which provides
for his full-time employment in his present capacity at a base
compensation of $141,700 per year, or such increased amount as the
Board of Directors of Citizens Bank may determine, plus fringe and
health and welfare benefits, effective October 1, 1995. His term of
employment is continuously extended so as to have a remaining term of
three years, unless terminated sooner as a result of good cause or for
good reason (each as defined in the Agreement).
Upon certain changes in control of the Company or Citizens Bank,
Mr. Sorcic would be entitled to receive a lump sum payment equal to
his monthly salary times the greater of twenty-four and the balance of
the term under the Agreement (the "Severance Period"). Mr. Sorcic
also would be entitled to receive all benefits accrued under any
incentive and retirement plan of the Company and, during the Severance
Period, he and his dependents would continue to be covered by all
welfare plans of the Company.
<PAGE> 9
Compensation Committee Report
The Company does not have a Compensation Committee of the Board of
Directors. During 1996, the Board of Directors established the
compensation procedures and policies and determined the compensation
of the President and of the Chief Executive Officer of the Company.
The Executive Vice President of the Company is also the President of
Citizens Bank and, as a result, he receives compensation only from
Citizens Bank for services to the Company and Citizens Bank. During
1996, the Directors' Personnel Policy and Salary Committee of Citizens
Bank (the "Committee") established the compensation procedures and
policies for Citizens Bank and determined the compensation of all of
the executive officers of Citizens Bank. Messrs. Thomas R. Lasier,
Stephen W. Samet and Craig O. Wesner were members of the Committee
during 1996. All decisions by the Committee are reviewed and approved
by the Board of Directors of Citizens Bank.
The compensation philosophy and objectives of the Company and Citizens
Bank include attracting and retaining the best possible executive
talent, motivating executive officers to achieve the performance
objectives of the Company and Citizens Bank, rewarding individual
performance and contributions and linking executive and stockholder
interests.
Executive compensation consists of two components: base salary and
bonus, each of which is intended to complement the other and, taken
together, to satisfy the compensation objectives of the Company and
Citizens Bank as the case may be. With respect to the base salaries
of each of the executive officers of the Company, the Board with
respect to the President and Chief Executive Officer, and the
Committee with respect to the executive officers of Citizens Bank,
annually consider the job performance of the officer and the average
salaries as published by the Illinois Bankers Association and the Bank
Administrative Institute of all of those persons holding comparable
positions at comparably sized bank holding companies and banks, as the
case may be, in determining each officer's base salary. The base
salaries of the officers are targeted at the average base salary
levels of the comparative compensation group. The banks included in
the Illinois Bankers Association and Bank Administrative Institute
publications are not the same as the banks quoted in The Nasdaq Stock
Market.
Bonuses are awarded to the President and Chief Executive Officer of
the Company in the discretion of the Board. Bonuses are awarded to
executive officers of Citizens Bank in the discretion of the
Committee. In determining whether to award a bonus to an executive
officer, the Committee considers the officer's job and officer call
program performance, and the officer's community involvement. In
addition to these factors, in determining whether to award a bonus to
the President and Chief Executive Officer, the Board also considers
earnings and profitability of Citizens Bank and the regulatory
approval rating of Citizens Bank. The practice of awarding bonuses is
subjective. In connection with his retirement, the Board awarded Mr.
<PAGE> 10
Van Ordstrand his company car in lieu of a cash bonus in 1996. The
amount set forth as Mr. Van Ordstrand's bonus in the Summary
Compensation Table is the value of said car.
This report is submitted on behalf of the Board of Directors of the
Company: Don S. Browning, John Ernat, Donald E. Grubb, Thomas M.
Longman, Dr. Harold C. Hutchinson, Jr., Thomas R. Lasier, Ervin I.
Pietsch, Stephen W. Samet, Tony J. Sorcic and Craig O. Wesner.
COMMON STOCK PRICE PERFORMANCE GRAPH
The following Common Stock price performance graph compares the
monthly change in the Company's cumulative total stockholder returns
on its Common Stock commencing May 8, 1992, the effective date of the
Company's initial public offering, with the cumulative total return of
stock traded on The Nasdaq Stock Market and all banks traded on The
Nasdaq Stock Market. The amounts shown assume the reinvestment of
dividends.
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 05/08/92 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96
- ---------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Princeton National
Bancorp, Inc. 100.0 111.3 152.3 130.6 181.1 203.7
Nasdaq Stock Market
(US Companies) 100.0 116.5 133.8 130.8 184.9 227.4
Nasdaq Bank Stocks 100.0 123.3 140.6 140.1 208.6 275.8
SIC 6020-6029, 6710-6719 US & Foreign
</TABLE>
<PAGE> 11
As noted above, the Company's Common Stock began trading on The Nasdaq
Stock Market under the symbol PNBC on May 8, 1992. Since that date,
the Company's Common Stock has been lightly traded. On December 31,
1996 and February 10, 1997, the Record Date, the bid price for the
Common Stock as quoted by The Chicago Corporation was $18.50 and
17.50, respectively.
PROPOSAL 2 - AMENDMENT TO CERTIFICATE TO
INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has unanimously approved, and recommends that
stockholders adopt, an amendment to Article FOURTH of the Certificate
to increase the number of authorized shares of Common Stock from 4
million to 7 million. If the proposed amendment is adopted, the first
sentence of Article FOURTH would be amended to read as follows:
FOURTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is seven million (7,000,000)
shares of Common Stock, par value $5.00 per share.
The Company currently is authorized to issue 4 million shares of
Common Stock, of which 2,723,966 shares of Common Stock were issued
and outstanding as of February 10, 1997. In addition, as of
February 10, 1997, the Company had 6,677 shares of Common Stock
reserved for issuance under the Company's stock purchase plan and
29,302 shares of Common Stock were held in its treasury, leaving
1,240,055 shares of authorized Common Stock available for issuance.
Adoption of the proposed amendment would increase the number of shares
of Common Stock available for issuance to 4,240,055.
The additional shares of Common Stock for which authorization is
sought would be part of the existing class of Common Stock and, if and
when issued, would have the same rights and privileges as the shares
of Common Stock presently outstanding. Holders of the Company's
Common Stock do not have preemptive rights to subscribe for and
purchase any new or additional issue of Common Stock or securities
convertible into Common Stock.
The Board of Directors believes that the increase in the number of
authorized shares of Common Stock is in the best interests of the
Company and its stockholders. The purpose of increasing the number of
authorized shares of Common Stock is to have shares available for
issuance for such corporate purposes as the Board of Directors may
determine in its discretion, including, without limitation, future
acquisitions, investment opportunities, stock splits, stock dividends
or other distributions, conversion of convertible securities, future
financings and other corporate purposes. Except for an employee stock
purchase plan, the Company has no agreements or understandings
regarding the issuance of additional shares of Common Stock.
Under the provisions of the Delaware General Corporation Law, a board
of directors generally may issue authorized but unissued shares of
<PAGE> 12
common stock without stockholder approval. A substantial number of
authorized but unissued shares of Common Stock not reserved for
specific purposes will allow the Company to take prompt action with
respect to corporate opportunities that develop, without the delay and
expense of convening a special meeting of stockholders. The issuance
of additional shares of Common Stock may, depending upon the
circumstances under which such shares are issued, reduce stockholders'
equity per share and may reduce the percentage of ownership of Common
Stock of existing stockholders. It is not the present intention of
the Board of Directors to seek stockholder approval prior to any
issuance of additional shares of Common Stock unless required by law
or the rules of The Nasdaq Stock Market, or any other market or stock
exchange on which the Common Stock may be listed.
Although the Company currently has no reason to believe that a
takeover attempt is likely to occur, increasing the number of
authorized shares of Common Stock may provide the Company with the
means of discouraging any such attempt. Such additional shares of
Common Stock could be used in the future, through private sales to
purchasers allied with management or otherwise, to dilute the stock
ownership of persons seeking to obtain control of the Company, thus
making less likely a change in control of the Company, whether or not
favored by a majority of unaffiliated stockholders, with the possible
effect of deterring an offer for the Company at a substantial premium
over the current market price of the Common Stock. The Company has no
present intention to issue securities for any such purpose.
The Company's Certificate contains certain provisions which may be
viewed as having an antitakeover effect. The Certificate provides
that any proposed merger or consolidation of the Company with any
other corporation must be authorized by the affirmative vote of at
least two-thirds of the stockholders if a majority of the Board of
Directors had not recommended such merger or consolidation for
stockholder approval. The Certificate contains a provision pursuant
to which the Company elected to be governed by Section 203 of the
Delaware General Corporation Law. Section 203 restricts certain forms
of business combinations with an "Interested Stockholder" for a period
of three years from the date that such a person became an "Interested
Stockholder" unless (i) prior to such date, the Board of Directors
approved either the business combination or the transaction which
resulted in the stockholder's becoming an "Interested Stockholder,"
(ii) upon consummation of the transaction, the Interested Stockholder
owns at least 85% of the voting stock of the corporation (excluding
shares held by management directors and under certain types of
employee stock plans), or (iii) on or subsequent to such date, the
business combination is approved by the Board of Directors and
authorized at an annual or special meeting of the stockholders by the
affirmative vote of at least 66-2/3% of the outstanding voting stock,
other than stock owned by the "Interested Stockholder." An
"Interested Stockholder" is defined as any individual, corporation,
partnership, unincorporated association or other entity which (x) owns
15% or more of the outstanding voting stock of the corporation, (y) is
an affiliate or associate of the corporation and was the owner of 15%
<PAGE> 13
or more of the outstanding voting stock of the corporation at any time
within the three-year period immediately prior to the date on which it
is sought to be determined whether such person is an Interested
Stockholder, and (z) the affiliates or associates of such a person.
The Certificate also classifies the Board into three classes and
provides that vacancies on the Board of Directors are to be filled by
a majority vote of directors and that directors so chosen shall hold
office until the end of the full term of the class in which the
vacancy occurred. A vote of the holders of 80% of the Company's
outstanding voting stock is required to amend these provisions. Under
the Delaware General Corporation Law and the Certificate, directors of
the Company may only be removed for cause. The Certificate also
contains provisions that may reduce surprise and disruptive tactics at
stockholders' meetings. The Certificate provides that no action may
be taken by stockholders except at an annual or special meeting. Each
of these provisions tends to make a change in control of the Board of
Directors more difficult or time consuming.
The proposed amendment to the Certificate is not being recommended for
the purpose of deterring a possible change in control of the Company
or in response to any specific effort of which the Company is aware to
obtain control of the Company, nor does the Board of Directors
currently intend to propose to stockholders any amendments which may
have the effect of discouraging takeover attempts.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required to approve the amendment to the
Certificate to increase the number of authorized shares of Common
Stock of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ADOPTION OF
THE AMENDMENT TO THE CERTIFICATE TO INCREASE THE AUTHORIZED SHARES OF
COMMON STOCK FROM 4 MILLION TO 7 MILLION.
<PAGE> 14
CERTAIN TRANSACTIONS
Several of the Company's directors and their affiliates, including
corporations and firms of which they are officers or in which they or
members of their families have an ownership interest, are customers of
Citizens Bank. These persons, corporations and firms have had
transactions in the ordinary course of business with Citizens Bank,
including borrowings of material amounts, all of which, in the opinion
of management, were on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with unaffiliated persons and did not involve
more than the normal risk of collectibility or present other
unfavorable features. It is the policy of Citizens Bank not to extend
credit to certain designated executive officers thereof.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon its review of Forms 3, 4 and 5 and any amendment
thereto furnished to the Company pursuant to Rule 16a-3(e) of the
Securities Exchange Act of 1934, as amended, and written
representations from the directors and executive officers that no
other reports were required, the Company is not aware of any director,
officer or beneficial holder of 10% of its Common Stock that failed to
file any such reports on a timely basis during 1996, except that
Mr. Grubb filed one Form 5 reporting three transactions that should
have been reported on Form 4 and Messrs. Ernat and Pietsch each filed
one Form 4 reporting one transaction late.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 10, 1997 the only persons or groups who are known to
the Company to be the beneficial owners of more than 5% of the Common
Stock were:
<TABLE>
<CAPTION>
Amount and nature of Percent of
Name and address of beneficial owner beneficial ownership class
------------------------------------------------------------------------------------------------
<C> <C> <C>
Citizens Bank's Trust Department
606 South Main Street 281,903<F1> 10.3
Princeton, Illinois 61356
Principal Mutual Life Insurance Company
711 High Street 259,000 9.5
Des Moines, Iowa 50392-0088
Invista Capital Management, Inc.
699 Walnut - 1500 Hub Tower 226,000 8.2
Des Moines, Iowa 50309
</TABLE>
<PAGE> 15
- --------------------------
<F1> The trust department holds Common Stock in a fiduciary
capacity under the nominee name of Jesco & Co. The trust department's
policy is to pass the power to vote the shares held by it to the
beneficiaries or co-fiduciaries of the trust accounts, but in certain
cases the beneficiaries or co-fiduciaries request the trust department
to vote their Common Stock by proxy.
1997 ANNUAL MEETING
Any stockholder who intends to present a proposal at the 1998 Annual
Meeting of Stockholders must submit the proposal in writing to the
Company on or before November 4, 1997, in order for the proposal to be
eligible for inclusion in the Company's proxy statement and form of
proxy for that meeting.
OTHER MATTERS
Management of the Company does not intend to present any other matters
for action at the annual meeting, and the management has not been
informed that other persons intend to present any other matters for
action at the meeting. However, if any other matters should properly
come before the meeting, the persons named in the accompanying proxy
intend to vote thereon, pursuant to the proxy, in accordance with the
recommendation of the management of the Company.
By Order of the Board of Directors,
Lou Ann Birkey
Corporate Secretary
March 5, 1997
<PAGE> 16
PRINCETON NATIONAL BANCORP, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
April 8, 1997
- Please sign and return immediately -
The undersigned hereby appoints Lawrence DeVore, Roger Swan and Howard
Trimble or any of them as the attorneys and proxies of the
undersigned, with full power of substitution, to represent and vote
all shares of common stock of Princeton National Bancorp, Inc. (the
"Company"), standing in the name of the undersigned at the close of
business on February 10, 1997, at the Annual Meeting of Stockholders
of the Company to be held at The Galleria, 1659 North Main Street,
Princeton, Illinois, at 10 a.m., on Tuesday, April 8, 1997 or at any
adjournment or postponement thereof, with all the powers that the
undersigned would possess if personally present on all matters coming
before said meeting, as follows:
(1) Election of directors.
___ FOR all nominees listed below ___ WITHHOLD AUTHORITY
(other than any nominee whose to vote for all nominees
name has been lined out) listed below
CLASS II (2000)
John Ernat
Tony J. Sorcic
Thomas M. Longman
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY OF THE ABOVE NAMED
NOMINEES BY LINING OUT THAT NOMINEE'S NAME.
(To be signed and dated on the reverse side)
<PAGE> 17
(2) Approval of the amendment to the Amended and Restated Certificate
of Incorporation of the Company to increase the number of
authorized shares of Common Stock from 4,000,000 to 7,000,000.
__ FOR __ AGAINST __ ABSTAIN
(3) In their discretion, upon such other matters as may properly come
before the Annual Meeting.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR
election of directors and FOR Proposal 2.
Please fill in, date and sign this proxy and return it in the enclosed
envelope. When signing as an executor, administrator, trustee,
guardian, custodian, corporate officer or in any capacity other than
individually, give your full title as such. If stock is held jointly,
each joint owner should sign this proxy.
Date: _______________________________________
_____________________________________________
(Stockholder's Signature)
_____________________________________________
(Stockholder's Signature)
The signer hereby revokes all proxies heretofore given by the signer
to vote at said meeting or any adjournments thereof.
