EXHIBIT 10.7


                                     PART I

                     MANAGEMENT INCENTIVE COMPENSATION PLAN

PURPOSE
Maximize achievement of the key corporate strategies/ objectives and annual
business plan actions of Citizens First National Bank by providing an incentive
to those officers who contribute the most to their attainment and sustain high
levels of performance which exceed expectations.

GENERAL DESCRIPTION
o        The basic plan provides measurement of contributions to performance at
         different levels with characteristics as follows:

         oo       Executive Officer - 5 participants including the President and
                  CEO, Executive Vice- President, and Senior Vice-Presidents for
                  Administrative Services, Consumer Banking and Trust and Farm
                  Management. The majority of this group would receive their
                  award based on overall corporate performance factors. This
                  performance will be measured by two to three financial and
                  operating ratios and one department-specific or management-by-
                  objective (MBO) measure.

o        General Management - Direct reports to the heads of the five major
         banking departments and the heads of other departments including Human
         Resources and Finance. At least two to three corporate profitability
         and departmental contribution goal measures and one to two MBO's.

o        Consumer Banking/Sales Manager Plan - Regional and individual Branch
         Sales Managers, Branch Administrator, Corporate Sales Manager and head
         of Residential Lending. Three to four revenue or growth measures, one
         return on profitability, and one MBO measure.

PARTICIPANTS
Individuals, who in the judgment of the Chief Executive Officer, are responsible
for directing functions or activities which have a significant bearing on the
growth and profitability of Citizens First National Bank.

PLAN FEATURES

o        Performance Measurement Factors - Those key corporate performance,
         revenue, loan and deposit growth; customer profitability and
         departmental improvement goals on which participant performance will be
         evaluated as follows:

         oo       Corporate performance will include such factors as Return on
                  Average Assets, Return on Average Equity, Loan/Assets, Net
                  Income, Non-Interest Income to Average Assets, Non- Interest
                  Expense or Efficiency Ratio (FTE); Earnings Per Share Growth
                  and Departmental profit or revenue contribution.

         oo       Bank and Department-Specific and Management by Objective (MBO)
                  measures will include, but not be limited to, core deposit
                  growth, loan growth, and fee income growth as


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                  well as major improvement projects necessary to carry out
                  implementation of the Bank's annual business plan or improve
                  departmental effectiveness and efficiency.

         oo       Measures weighted on position contribution capability and
                  management expectations.

o        Performance Thresholds - Targeted performance levels (goals) for each
         performance measurement factor below which no award will be given or
         above which higher awards will be given. Also, the minimum overall
         performance level for profitability. Goals are generally deemed to be a
         "stretch" for attainment .

o        Discretionary Individual Performance Adjustment (IPA) - This is an
         optional adjustment to allow the CEO and executive management some
         subjective discretion in the determination of the final incentive award
         for participants. Examples include participation on special projects or
         task forces or project teams that require extra working hours and
         effort; and participation in community projects or assignments
         (chairperson for Crusade of Mercy, Community Re-development, etc.).
         Other examples include special assignments such as opening a new office
         or setting up a new operating entity while maintaining existing duties.

o        Income Deferral - This is an option by the participant to have a
         portion of the cash award deferred for tax planning purposes on an
         annual basis. In order to participate in the Princeton National
         Bancorp, Inc. Deferred Compensation Plan for a particular Plan Year, an
         Eligible Executive must elect in writing to participate, and such
         election must be made at least one month prior to the first day of the
         applicable Plan Year, unless otherwise specified by the Personnel
         Committee, except that the election for the first Plan Year may be made
         at any time prior to the first draft of its effective date. An Eligible
         Executive or Participant may not change an election for a Plan Year on
         or after the first draft of that Plan Year, except in the case of
         Hardship, as determined by the Compensation Committee. The minimum
         amount to be deferred is $1,000.

         To make an effective election, a properly completed and executed
         Election Agreement must be received by the Company at the address
         specified on such Election Agreement. Additional details are set forth
         in the Princeton National Bancorp, Inc. Bank Deferred Compensation Plan
         document.

         The Princeton National Bancorp, Inc. Deferred Compensation Plan is an
         unfunded, nonqualified plan of deferred compensation. Only employees
         who are considered to be members of a select group of management or who
         are considered highly compensated will be eligible to defer incentive
         compensation payments to that plan. The Personnel Committee of the
         Board of Directors shall determine whether a participant wishing to
         defer the payment of compensation under this Plan is eligible to
         participate in the deferred compensation plan. The provisions of this
         Plan regarding income deferral are subject to the terms and conditions
         of the Princeton National Bancorp, Inc. Deferred Compensation Plan,
         which shall be controlling in such manners.

o        Extraordinary Occurrences
         Those events which, in the opinion of the Personnel Committee of the
         Board of Directors, are outside the influence or control of officers
         and would cause a significant effect, positive or negative, on
         profitability or operating results.