SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
PRINCETON NATIONAL BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
[LOGO] PRINCETON
NATIONAL BANCORP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 11, 2000
To the Shareholders of
PRINCETON NATIONAL BANCORP, INC.
The Annual Meeting of Shareholders of Princeton National Bancorp, Inc., a
Delaware corporation, will be held at The Galleria, 1659 North Main Street,
Princeton, Illinois, on Tuesday, April 11, 2000 at 10:00 a.m., for the following
purposes:
(1) To elect three 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.
Shareholders of record at the close of business on February 25, 2000 will be
entitled to notice of and to vote at the meeting.
The Company's Annual Report to Shareholders for the year ended December 31, 1999
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 6, 2000
<PAGE>
[LOGO] PRINCETON
NATIONAL BANCORP, INC.
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") (Nasdaq: PNBC), from holders of
the Company's outstanding shares of common stock, par value $5.00 per share (the
"Common Stock"), for use at the 2000 Annual Meeting of Shareholders (the "Annual
Meeting") to be held on April 11, 2000 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 shareholders. 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 shareholders on or about March 6, 2000.
VOTING AT THE ANNUAL MEETING
The close of business on February 25, 2000 has been fixed as the record date for
the determination of shareholders of the Company entitled to notice of and to
vote at the Annual Meeting. As of the close of business on that date, 3,667,729
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 shareholder 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 shareholder 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 shareholders 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
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<PAGE>
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.
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
matters which may properly come before the meeting.
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 Shareholders to be
held in 2003 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 25, 2000 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 1999.
The Board of Directors unanimously recommends that shareholders vote "FOR" the
election of the three nominees listed below.
Page 2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AMOUNT OF SHARES PERCENT
DURING PAST 5 YEARS AGE DIRECTOR OF COMMON STOCK OF
------------------- SINCE BENEFICIALLY OWNED COMMON
AND NATURE OF STOCK
BENEFICIAL OWNERSHIP
<S> <C> <C> <C> <C>
CLASS II NOMINEES FOR THREE-YEAR TERMS
John R. Ernat Farmer 51 1994 7,226(1) *
Tony J. Sorcic President and Chief 46 1986 18,787(2) *
Executive Officer of the
Company
Thomas M. Longman President of DBP, Inc., a 48 1991 9,454(3) *
supplier of business
forms and office
products
CLASS III CONTINUING DIRECTORS - TERMS EXPIRE IN 2001
Dr. Harold C. Hutchinson, Jr. Retired dentist 67 1989 12,428(4) *
Thomas R. Lasier Retired in 1993 as 64 1983 24,375(5) *
President and General
Manager of LCN Closers,
a division of Ingersoll-
Rand that manufactures
hardware
Stephen W. Samet President and General 55 1986 9,369(6) *
Manager of WZOE, Inc.,
a commercial radio
broadcasting company
</TABLE>
Page 3
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
CLASS I CONTINUING DIRECTORS - TERMS EXPIRE IN 2002
Craig O. Wesner Manager of Bureau 59 1997 8,088 *
Service Company, a
farm supply cooperative
Don S. Browning President of Browning 59 1983 13,074 *
Ford, 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 59 1991 9,260(7) *
Ervin I. Pietsch Vice President, 59 1994 5,923 *
Corporate Quality, Ideal
Electrical Products
</TABLE>
* Less than 1%
All directors and executive officers of the Company, as a group, beneficially
own 138,161 shares of Common Stock, or 3.77% of the outstanding Common Stock.
(1) Includes 300 shares held by his wife.
(2) Includes 2,396 shares held by his wife and 1,000 held by, or in custody for,
his sons.
(3) Includes 1,550 shares held by his wife.
(4) Includes 11,078 shares held in trust for which Dr. Hutchinson is the trustee
and beneficiary.
(5) Includes 675 shares held in trust for which Mr. Lasier is the trustee and
beneficiary and 4,375 shares held by his wife.
(6) Includes 364 shares held by his wife and 201 shares held by his son.
(7) Includes 1,237 shares held by his wife.
BOARD OF DIRECTOR MEETINGS AND COMMITTEES
The Board of Directors held four meetings during 1999. 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
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<PAGE>
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 1999.
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 1999.
The Board of Directors of Citizens Bank held 24 meetings during 1999. 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 47 meetings during 1999.
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 1999. Each director of the
Company, other than Messrs. Pietsch and Ernat, is also a director of Citizens
Bank. In addition, in 1999, each non-employee director of the Company was
awarded a grant of 700 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 $11.19, and expire on December 27, 2009.
During 1999, each director of Citizens Bank who is not also an employee was paid
a retainer ($11,000 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 $50 fee for each Citizens Bank Board
meeting and committee meeting attended in 1999. The Chairman of the Board of
Citizens Bank received a $100 fee for each meeting of the Board attended in
1999. In addition, Citizens Bank paid $2,280 of organization dues on behalf of
the Chairman of the Board of Citizens Bank during 1999.
EXECUTIVE COMPENSATION
SUMMARY
The following table summarizes compensation for services to the Company and
Citizens Bank for the years ended December 31, 1999, 1998, and 1997 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 $100,000 for the year
ended December 31, 1999.
Page 5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Principal Annual Long-Term
Position Year Compensation Compensation
- -----------------------------------------------------------------------------------------------------
All Other
Salary($) Bonus($) Awards Compensation($)(1)
- -----------------------------------------------------------------------------------------------------
Securities Underlying
Options (#)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tony J. Sorcic 1999 203,348 0 8,000 11,211
President and Chief 1998 189,859 0 6,000 11,955
Executive Officer 1997 157,258 32,104 0 12,313
- -----------------------------------------------------------------------------------------------------
James B. Miller 1999 113,638 0 800 8,048
Executive Vice 1998 108,001 0 500 8,317
President 1997 97,625 20,207 0 7,622
- -----------------------------------------------------------------------------------------------------
</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 1999 and information about options held by such officers
as of December 31, 1999.
<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 8,000 53% $11.19 $11.19 12/27/2009
James B. Miller 800 5% $11.19 $11.19 12/27/2009
</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 $18.23 $56,299 $29.02 $142,672
James B. Miller $18.23 $ 5,630 $29.02 $ 14,267
</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.
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<PAGE>
(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".
(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, 1999
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
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 2,000/12,000 0/0
James B. Miller 0 0 167/1,133 0/0
</TABLE>
(1) The closing price of the Common Stock on December 31, 1999 was $11.125.
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.
Mr. Miller has an employment agreement with the Company, effective February 22,
1999, which provides for his full-time employment in his present capacity at a
base compensation of $110,240 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).
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<PAGE>
Upon certain changes in control of the Company or Citizens Bank, Mr. Miller
would be entitled to receive a lump sum payment equal to his monthly salary
times the greater of twelve or the balance of the term under the agreement (the
"Severance Period"). Mr. Miller 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 1999, 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 1999, 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 1999. 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 shareholder interests.
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 officers 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
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Company. The Plan was approved by the shareholders of the Company in 1998. With
respect to options granted in 1998 and 1999, 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 "Option Exercises and Fiscal Year-End Values
for the Year Ended December 31, 1999". In the opinion of the Committee and the
Board of Directors, the Plan promotes the alignment of management and
shareholder interests and will result in executive officers of the Company being
sufficient shareholders 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 shareholder returns on its Common Stock,
assuming the Common Stock was purchased on January 1, 1994 and sold on December
31, 1999, with the cumulative total return of stocks included in the S & P 500
and financial stocks traded on The Nasdaq Stock Market for the same period. The
amounts shown assume the reinvestment of dividends.
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<PAGE>
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
Princeton National Bancorp, Inc.
[PLOT POINTS CHART]
PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
Produced on 02/23/2000 including data to 12/31/1999
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 12/1994 12/1995 12/1996 12/1997 12/1998 12/1999
- ----------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Princeton National Bancorp, Inc. 100.0 138.7 156.0 222.2 209.2 145.6
S&P 500 Stocks 100.0 137.6 169.5 226.1 291.8 353.0
Nasdaq Financial Stocks 100.0 145.7 187.0 286.1 277.7 274.0
SIC 6000-6799 US & Foreign
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes 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 12/30/1994.
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<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, 1999 and February 25, 2000, the Record Date, the
bid prices for the Common Stock as quoted by ABN AMRO were $11.125 and $10.375,
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 1999.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of February 25, 2000, 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:
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------------------ -------------------- ----------------
Citizens Bank's Trust Department(1)
606 South Main Street
Princeton, Illinois 61356 194,923 5.31%
Invista Capital Management, Inc.
699 Walnut - 1900 Hub Tower
Des Moines, Iowa 50309 221,275 6.03%
Wellington Management Company, LLP
75 State Street
Boston, MA 02109 279,350 7.62%
(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, unless, in certain cases, the beneficiaries or co-fiduciaries
request the trust department to vote their Common Stock by proxy.
2001 ANNUAL MEETING
Any shareholder who intends to present a proposal (a "Proponent") at the 2001
Annual Meeting of Shareholders must submit the proposal in writing to the
Company on or before November 6, 2000, in order for the proposal to be eligible
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, a shareholder must
follow certain procedures to nominate persons for Director or to introduce an
item of business at an Annual Meeting of Shareholders. The nomination or
proposed item must be delivered to or mailed to and received no later than the
close of business on the 120th day nor earlier than the close of business on the
150th day prior to the anniversary of the mailing date of the proxy statement
for the preceding year's annual meeting. The chairman of the meeting may refuse
to allow the transaction of any business not presented beforehand, or to
acknowledge the nomination of any person not made in compliance with the
following procedures.
PROPOSED ITEM OF BUSINESS
If the notice is regarding a proposed item of business, such shareholder's
notice to the Secretary of the Company must contain the following information:
As to any business the shareholder proposes to bring before the annual meeting,
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- - a brief description of the business desired to be brought;
- - the reasons for conducting such business at the annual meeting;
- - any material interest in such business of the shareholder; and the
beneficial owner, if any, on whose behalf the proposal is made;
- - the name and address of both the shareholder and the beneficial owner;
and
- - the class and number of shares of the Company's capital stock that are
owned beneficially and of record by the shareholder and the beneficial
owner.
NOMINATION OF DIRECTOR
If the notice is regarding the nomination of a person for Director, such
shareholder's notice to the Secretary of the Company must contain the following
information:
As to each person whom the shareholder proposes to nominate for election as a
director,
- - name, age, business address and residential address;
- - principal occupation or employment;
- - class and number of shares of Company stock beneficially owned on the
date of the notice; and
- - any other information relating to the nominee that would be required to
be disclosed on Schedule 13D under the Securities and Exchange Act of
1934.
As to the shareholder giving the notice,
- - name and address of shareholder, and name, business and residential
address of any other beneficial shareholders known by the shareholder
to support the nominee; and
- - class and number of shares of Company stock owned by the shareholder on
the date of the notice, and the number of shares beneficially owned by
other record or beneficial shareholders known by the shareholder to be
supporting the nominee.
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 6, 2000
Page 13
<PAGE>
[LOGO] PRINCETON
NATIONAL BANCORP, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 11, 2000
- 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 25, 2000, at the Annual Meeting of
Shareholders of the Company to be held at The Galleria, 1659 North Main Street,
Princeton, Illinois, at 10 a.m., on Tuesday, April 11, 2000 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 (other ____ WITHHOLD AUTHORITY to vote for
than any nominee whose name has been all nominees listed below
lined out)
CLASS II (2003)
John R. 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).
(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.
<PAGE>
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:
-----------------------------------------
(Shareholder's Signature)
-----------------------------------------
(Shareholder's Signature)
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
