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>
PRINCETON NATIONAL BANCORP, INC.
NOTICE
of
Annual Meeting of Stockholders To Be Held April 13, 1999
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, 1659 North Main Street,
Princeton, Illinois, on Tuesday, April 13, 1999 at 10:00 a.m., for the following
purposes:
(1) To elect four directors for a term of three years; and
(2) 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 26, 1999 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, 1998
is enclosed.
IMPORTANT! TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE
SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
No postage is required if the proxy is mailed in the United States.
Lou Ann Birkey
Assistant Vice President
and Corporate Secretary
Princeton, Illinois
March 5, 1999
2
<PAGE>
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 1999 Annual Meeting of Stockholders (the "Annual
Meeting") to be held on April 13, 1999 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, 1999.
VOTING AT THE ANNUAL MEETING
The close of business on February 26, 1999, 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,
3,827,781 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 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 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 four 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.
Shares of Common Stock of the Company will be voted as specified. If no
specification is made, shares will be voted FOR the nominees for directors named
below and IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES as to any other
matter which may properly come before the meeting.
PROPOSAL 1
3
<PAGE>
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. Wesner, Browning, Grubb and Pietsch will be
nominated to serve in Class I until the Annual Meeting of Stockholders to be
held in 2002 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 26, 1999 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 1998.
The Board of Directors unanimously recommends that stockholders vote "FOR" the
election of the four nominees listed below.
<TABLE>
<CAPTION>
AMOUNT OF SHARES
OF COMMON STOCK
BENEFICIALLY OWNED PERCENT
PRINCIPAL OCCUPATION DIRECTOR AND NATURE OF OF COMMON
DURING PAST 5 YEARS AGE SINCE BENEFICIAL OWNERSHIP(1) STOCK
------------------- --- ----- -------------------- -----
<S> <C> <C> <C> <C>
CLASS I NOMINEES FOR THREE-YEAR TERMS
Craig O. Wesner Manager of Bureau Service 58 1997 7,432 *
Company, a farm supply
cooperative
Don S. Browning President of Browning Ford, 58 1983 12,986 *
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 58 1991 8,833(2) *
Ervin I. Pietsch Vice President, Corporate 58 1994 5,332 *
Quality, Ideal Electrical
Products
CLASS II CONTINUING DIRECTORS -- TERM EXPIRES IN 2000
John Ernat Farmer 50 1994 6,340(3) *
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF SHARES
OF COMMON STOCK
BENEFICIALLY OWNED PERCENT
PRINCIPAL OCCUPATION DIRECTOR AND NATURE OF OF COMMON
DURING PAST 5 YEARS AGE SINCE BENEFICIAL OWNERSHIP(1) STOCK
------------------- --- ----- -------------------- -----
<S> <C> <C> <C> <C>
Tony J. Sorcic President and Chief Executive 45 1986 13,547(4) *
Officer of the Company
Thomas M. Longman President of DBP, Inc., a 48 1991 8,030(5) *
supplier of business forms and
office products
CLASS III CONTINUING DIRECTORS -- TERM EXPIRES IN 2001
Dr. Harold C. Retired dentist 66 1989 11,394(6) *
Hutchinson, Jr.
Thomas R. Lasier Retired in 1993 as President and 63 1983 21,875(7) *
General Manager of LCN
Closers, a division of Ingersoll-
Rand that manufactures
hardware, for more than 5 years
prior to retirement
Stephen W. Samet President and General Manager 54 1986 9,231(8) *
of WZOE, Inc., a commercial
radio broadcasting company
</TABLE>
* Less than 1%
(1) All directors and executive officers of the Company, as a group,
beneficially own 115,723 shares of Common Stock, or 3.02% of the outstanding
Common Stock.
(2) Includes 1,237 shares held by his wife.
(3) Includes 300 shares held by his wife.
(4) Includes 2,396 shares held by his wife and 584 held by, or in custody for,
his sons.
(5) Includes 1,050 shares held by his wife.
(6) Includes 10,044 shares held in trust for which Dr. Hutchinson is the trustee
and beneficiary.
(7) Includes 675 shares held in trust for which Mr. Lasier is the trustee and
beneficiary and 3,375 shares held by his wife.
(8) Includes 364 shares held by his wife and 201 shares held by his son.
BOARD OF DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors held six meetings during 1998. 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.
5
<PAGE>
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 1998.
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 1998.
The Board of Directors of Citizens Bank held 24 meetings during 1998. 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 Asset/Liability Management
Committees. The Committees collectively held a total of 58 meetings during 1998.
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.
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 $100 fee
for each Board meeting of the Company attended in 1998. Each director of the
Company, other than Messrs. Pietsch and Ernat, is also a director of Citizens
Bank. In addition, in 1998 each non-employee Director of the Company was awarded
a grant of 300 stock options under the Princeton National Bancorp, Inc. Stock
Option Plan. The options vest over three years at a rate of 1/3 per year, have
an exercise price of $17.19 and expire on December 14, 2008.
During 1998, each director of Citizens Bank who is not also an employee was paid
a retainer ($10,600 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 1998. After attending five meetings of
the same committee, the director received a $50 fee for each subsequent meeting
of the same committee in 1998. The Chairman of the Board of Citizens Bank
received a $100 fee for each meeting of the Board attended in 1998. In addition,
Citizens Bank paid $2,100 of organization dues on behalf of the Chairman of the
Board of Citizens Bank during 1998.
EXECUTIVE COMPENSATION
SUMMARY
The following table summarizes compensation for services to the Company and
Citizens Bank for the years ended December 31, 1998, 1997 and 1996 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 $100,000 for the year
ended December 31, 1998.
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
==================================================================================================================
Annual Compensation Long-Term
Compensation
Name and Principal
Position Year
--------------------------------------------------------------------------------
Awards All Other
Salary($) Bonus($) --------------------- Compensation($)(1)
Securities Underlying
Options (#)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tony J. Sorcic 1998 189,859 0 6,000 11,955
President and Chief 1997 157,258 32,104 0 12,313
Executive Officer 1996 148,020 11,000 0 9,829
- ------------------------------------------------------------------------------------------------------------------
James B. Miller 1998 108,001 0 500 8,317
Executive Vice 1997 97,625 20,207 0 7,622
President 1996 90,860 1,500 0 5,988
==================================================================================================================
</TABLE>
(1) The compensation reported represents Company matching contributions to the
Company 401(k) Plan and Company contributions to the Profit Sharing Plan.
The following tables present information about stock options granted to
executive officers in 1998 and information about options held by such officers
as of December 31, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
------------------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS EXERCISE
OPTIONS GRANTED TO FMV AT PRICE EXPIRATION
NAME GRANTED (2) EMPLOYEES GRANT DATE (PER SHARE) DATE
----------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Tony J. Sorcic 6,000 59% $17.19 $17.19 12/14/2008
James B. Miller 500 5% $17.19 $17.19 12/14/2008
</TABLE>
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
FOR OPTION TERM (10 YEARS)(3)
-------------------------------------------------------------------------
5% 10%
------------------------------ ---------------------------------------
AGGREGATE
POTENTIAL PRICE POTENTIAL POTENTIAL PRICE AGGREGATE
PER SHARE AT REALIZABLE PER SHARE AT POTENTIAL REALIZABLE
NAME EXPIRATION VALUE EXPIRATION VALUE
----------- --------------- ---------- --------------- --------------------
<S> <C> <C> <C> <C>
Tony J. Sorcic $28.00 $64,864 $44.59 $164,379
James B. Miller $28.00 $ 5,405 $44.59 $ 13,698
</TABLE>
(1) Options become exercisable over three years at the rate of one-third per
year, commencing one year after the date of grant, subject to acceleration in
the event of a change in control of the Company.
(2) Options were granted pursuant to a Stock Option Agreement between the
Company and Messrs. Sorcic and Miller. For more information, see "Compensation
Committee Report".
7
<PAGE>
(3) Potential realizable value is presented net of the option exercise price but
before any federal or state income taxes associated with exercise. These amounts
reflect certain assumed rates of appreciation set forth in the Securities and
Exchange Commission's executive compensation disclosure rules. Actual gains, if
any, on stock option exercises depend on future performance of the Common Stock
and overall market conditions.
OPTION EXERCISES AND FISCAL YEAR-END VALUES FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONTH
SHARES VALUE OPTIONS AT OPTIONS AT
ACQUIRED ON REALIZED FY-END (#) FY-END ($)
NAME EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
----------- ------------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Tony J. Sorcic 0 0 0/6,000 0/0
James B. Miller 0 0 0/500 0/0
</TABLE>
(1) The closing price of the Common Stock on December 31, 1998 was $16.375.
EMPLOYMENT AGREEMENTS
Mr. Sorcic has an employment agreement with the Company, effective October 1,
1995, which provides for his full-time employment in his present capacity at a
base compensation of $183,508 per year, or such increased amount as the Board of
Directors of Citizens Bank may determine, plus fringe and health and welfare
benefits. His term of employment is continuously extended so as to have a
remaining term of one year, 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 or 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.
COMPENSATION COMMITTEE REPORT
The Company does not have a Compensation Committee of the Board of Directors.
During 1998, the Board of Directors established the compensation procedures and
policies and determined the compensation of the President and Chief Executive
Officer of the Company. The Chief Executive Officer 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 1998, 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, Craig O. Wesner and
Tony J. Sorcic were members of the Committee during 1998. 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.
8
<PAGE>
Annual 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. The Committee annually considers 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
and the executive officers and branch managers of Citizens Bank, based on a
point system established by the Committee. These individuals earn points as a
result of deposit growth, loan growth, and improvements in income, operating
expenses, return on equity and/or return on deposits. The points earned
determine the percentage to be paid as a bonus.
The long-term incentive utilized is the Princeton National Bancorp, Inc. Stock
Option Plan. Eligible participants include all directors and employees of the
Company, including the Chief Executive Officer and all executive officers of the
Company. The Plan was approved by the stockholders of the Company in 1998. With
respect to options granted in 1998, each option period is for ten (10) years and
granted options only become vested over a three-year period. The number of
shares covered by unexercised options held by the executive officers are shown
in the table above titled "Options Exercises and Fiscal Year-End Values for the
Year Ended December 31, 1998". In the opinion of the Committee and the Board of
Directors, the Plan promotes the alignment of management and stockholder
interests and will result in executive officers of the Company being sufficient
stockholders to encourage long-term performance and Company growth.
This report is submitted on behalf of the Board of Directors of the Company: Don
S. Browning, John R. 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
assuming the Common Stock was purchased on January 1, 1993 and sold on December
31, 1998 with the cumulative total return of stock traded on The Nasdaq Stock
Market and all banks traded on The Nasdaq Stock Market for the same period. The
amounts shown assume the reinvestment of dividends.
9
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
PRINCETON NATIONAL BANCORP, INC.
PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
Produced on 1/28/1999 including data to 12/31/1998
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
LEGEND
Symbol CRSP Total Returns Index for: 12/1993 12/1994 12/1995 12/1996 12/1997 12/1998
------ ----------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
______ [ ] Princeton National Bancorp, Inc. 100.0 85.8 119.0 133.8 190.6 179.4
.. _ . * Nasdaq Stock Market (US Companies) 100.0 97.8 138.3 170.0 208.6 293.2
- ------ ^ Nasdaq Bank Stocks 100.0 99.6 148.4 195.9 328.0 324.9
SIC 6020-6029, 6710-6719 US & Foreign
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indices are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/1993.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
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, 1998 and February 26, 1999, the Record Date, the
bid prices for the Common Stock as quoted by ABN AMRO were $16.375 and $16.75,
respectively.
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 1998, except the
following: Thomas R. Lasier. Ervin I. Pietsch and Harold C. Hutchinson, Jr. each
filed one Form 4 late.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 26, 1999 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
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Citizens Bank's Trust Department (1)
606 South Main Street
Princeton, Illinois 61356 198,026 5.17%
- ---------------------------------------------------------------------------------------
Invista Capital Management, Inc.
699 Walnut - 1500 Hub Tower
Des Moines, Iowa 50309 262,275 6.85%
- ---------------------------------------------------------------------------------------
Wellington Management Company, LLP
75 State Street
Boston, MA 02109 221,650 5.79%
=======================================================================================
</TABLE>
(1) 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.
2000 ANNUAL MEETING
Any stockholder who intends to present a proposal (a "Proponent") at the 2000
Annual Meeting of Stockholders must submit the proposal in writing to the
Company on or before November 8, 1999, in order for the proposal to be eligible
11
<PAGE>
for inclusion in the Company's proxy statement and form of proxy for that
meeting. In addition, pursuant to Rule 14a-4 of Regulation 14A under the
Securities Exchange Act of 1934 and the Company's Bylaws, the Company reserves
the right to exercise discretionary voting authority for all shares for which it
receives proxies at the 2000 Annual Meeting of Stockholders, in the event that a
Proponent fails to provide notice of the subject proposal on or before January
20, 2000.
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
Assistant Vice President
and Corporate Secretary
March 5, 1999
12
<PAGE>
PRINCETON NATIONAL BANCORP, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS
April 13, 1999
- Please sign and return immediately -
The undersigned hereby appoints Lawrence DeVore, Roger Swan and John Isaacson,
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 26, 1999, 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 13, 1999 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 to vote
(other than any nominee whose for all nominees listed below
name has been lined out)
CLASS I (2002)
Craig O. Wesner
Don S. Browning
Donald E. Grubb
Ervin I. Pietsch
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>
(2) 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 the nominees listed above.
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.
