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 240.14a-11(c) or 240.14a-12
First Busey Corporation
- --------------------------------------------------------------------------------
(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 transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
FIRST BUSEY CORPORATION
[LOGO] 201 W. Main, Urbana, IL 61801
217/365-4556
March 23, 1998
Dear Stockholder:
The Annual Meeting of Stockholders of First Busey Corporation (the
"Company") will be held on Monday, April 27, 1998 at the Krannert Center for the
Performing Arts, 500 S. Goodwin Avenue, Urbana, Illinois. The Annual Meeting
will begin at 7:00 p.m. At this Annual Meeting you will be asked:
1. To elect fourteen (14) directors of the Company to serve until the next
Annual Meeting of Stockholders.
2. To ratify the appointment of McGladrey & Pullen, LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998.
3. To transact such other business as may properly come before the Annual
Meeting or any postponement or adjournment thereof.
Each of the proposals is more fully described in the accompanying Proxy
Statement which I urge you to read carefully. The Board of Directors has
unanimously approved and recommends a vote "FOR" each of the proposals.
It is important that your shares be represented at the Annual Meeting.
Whether or not you attend personally, I urge you to sign, date and return the
enclosed proxy at your earliest convenience.
Kindest regards,
Douglas C. Mills
Chairman of the Board
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY
-1-
<PAGE>
FIRST BUSEY CORPORATION
[LOGO] 201 W. Main, Urbana, IL 61801
217/365-4556
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 27, 1998
To the Stockholders of
First Busey Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of First
Busey Corporation (the "Company"), a Nevada corporation, will be held at the
Krannert Center for the Performing Arts, 500 S. Goodwin Avenue, Urbana,
Illinois, on Monday, April 27, 1998 at 7:00 p.m. for the following purposes:
1. To elect fourteen (14) directors of the Company to serve until the next
Annual Meeting of Stockholders or until their successors are duly
elected and qualified.
2. To ratify the appointment of McGladrey & Pullen, LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998.
3. To transact such other business as may properly come before the Annual
Meeting or any postponement or adjournment thereof.
Only stockholders of record at the close of business on March 6, 1998 shall
be entitled to notice of, and to vote at, the Annual Meeting or any postponement
or adjournment thereof. Even if you plan to attend the Annual Meeting in
person, please sign, date and return your proxy in the enclosed envelope.
By order of the Board of Directors,
Barbara J. Kuhl
Executive Vice President,
Corporate Secretary and Treasurer
Urbana, Illinois
March 23, 1998
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<PAGE>
FIRST BUSEY CORPORATION
[LOGO] 201 W. Main, Urbana, IL 61801
217/365-4556
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of First Busey Corporation (the
"Company" or "First Busey"), a Nevada corporation, for use at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the Krannert Center for
the Performing Arts, 500 S. Goodwin Avenue, Urbana, Illinois, on Monday,
April 27, 1998, at 7:00 p.m., or any postponement or adjournment thereof. The
Board has fixed the close of business on March 6, 1998, as the record date for
determining the stockholders entitled to notice of, and to vote at, the Annual
Meeting. On the record date, the Company had outstanding and entitled to vote
6,895,174 shares of Class A Common Stock, without par value ("Class A Common
Stock"). The Company's Form 10-K Annual Report, which includes audited
financial statements for the year ended December 31, 1997, accompanies this
Proxy Statement.
The Company's principal executive offices are located at 201 W. Main
Street, Urbana, Illinois 61801. The approximate date on which the Proxy
Statement and the accompanying proxy are first being sent to stockholders is
March 23, 1998.
VOTING
General. Shares of Class A Common Stock represented by properly executed
proxies received by the Company will be voted at the Annual Meeting in
accordance with instructions thereon. If there are no such instructions, the
shares will be voted "FOR" (i) the election of the nominees for directors named
in this Proxy Statement and (ii) the ratification of the appointment of
McGladrey & Pullen, LLP as the Company's independent auditors for the fiscal
year ending December 31, 1998 (the "Ratification of Auditors Proposal")
(collectively, the "Proposals"). Properly executed proxies received by the
Company will also be voted at the Annual Meeting in accordance with the Board's
recommendations on any other matters which may come before the Annual Meeting.
In order to be elected a director, a nominee must receive a plurality of
the votes cast at the meeting for the election of directors. Because the
fourteen nominees receiving the largest number of affirmative votes will be
elected, shares represented by proxies which are marked "withhold authority" or
"abstain" will have no effect on the outcome of the election. The Ratification
of Auditors Proposal requires the affirmative vote of at least a majority of the
votes cast at the Annual Meeting on such matters. Shares represented by
proxies which are marked "abstain" as to such matter will be counted as
votes cast, which will have the same effect as a negative vote on such
matter.
-3-
Proxies relating to "street name" shares which are not voted by brokers on
one matter will be treated as shares present for purposes of determining the
presence of a quorum but will not be treated as votes cast as to such matter not
voted upon.
Directors and Executive Officers. All of the directors and executive
officers of the Company have advised the Company that they will vote their
shares of Company Common Stock "FOR" the Proposals. As of March 6, 1998, these
individuals beneficially owned an aggregate of 2,053,901 shares of Company's
Class A, or approximately 30% of the Company Common Stock outstanding and
entitled to vote at the Annual Meeting. See "Election of Directors - Common
Stock Ownership of Certain Beneficial Owners and Management."
REVOCABILITY OF PROXIES
Stockholders may revoke their proxy by a later proxy or by giving notice of
such revocation to the Company in writing or at the Annual Meeting before such
proxy is voted. Attendance at the Annual Meeting will not in and of itself
constitute the revocation of a proxy.
SOLICITATION
The cost of solicitation of proxies will be paid by the Company. In
addition to solicitation by mail, officers, directors and regular employees of
the Company may solicit proxies by telephone, telefax or in person without
additional compensation. Brokerage houses, bank nominees, fiduciaries and other
custodians will be requested to forward soliciting material to the beneficial
owners of shares held of record by them and will be reimbursed for their
reasonable expenses.
ELECTION OF DIRECTORS
(PROPOSAL ONE)
The fourteen nominees named below have been recommended for election as
directors for a term of one year or until their successors have been duly
elected and qualified. All nominees are current members of the Company's Board.
John W. Pollard retired from the Board effective December 31, 1997. Judith L.
Ikenberry and Benjamin J. Snyder have announced their intentions to retire from
the Board of Directors effective as of the date of the Annual Meeting. The
Company acknowledges their years of service and dedication to the Busey
organization and expresses appreciation for their significant contributions.
John W. Pollard (66) had been a director of First Busey Corporation since 1993.
Dr. Pollard has been associated with Carle Clinic since 1963, most recently
serving as Vice President of Medical Services of Carle Foundation Hospital, a
position from which he retired in 1997. Judith L. Ikenberry (62) has been a
director of First Busey Corporation since 1996 and Busey Bank since 1985. Mrs.
Ikenberry is active in numerous charitable organizations. Benjamin J. Snyder
(66) has served on the Board of First Busey Corporation since 1996 and, prior to
that, served on the Board of Busey Bank McLean County since 1994. Mr. Snyder
has been a real estate agent in the Bloomington-Normal area since 1971.
It is intended that the proxies received in response to this solicitation
will be voted for the election of the fourteen persons so nominated, unless
otherwise specified. If, for any reason, any nominee shall become unavailable
for election or shall decline to serve, persons named in the proxy may exercise
discretionary authority to vote for a substitute proposed by the Board. No
circumstances are presently known which would render a nominee named herein
unavailable.
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<PAGE>
Set forth below is certain biographical information concerning each nominee
for director including principal occupation and age as of March 6, 1998, the
record date for the Annual Meeting. Unless otherwise noted, each nominee for
director has been employed in their principal occupation with the same
organization or other responsible position with the same organization for at
least the last five years.
JOSEPH M. AMBROSE
Director since: 1993
Age: 40
Mr. Ambrose is a lawyer with the firm Hinshaw & Culbertson, Bloomington,
Illinois. Mr. Ambrose has been associated with this firm since September of
1994. Prior to that, Mr. Ambrose was a lawyer with the firm Saint & Ambrose,
P.C., Bloomington, Illinois. Mr. Ambrose previously served as a director of
Busey Bank of McLean County from 1984 to 1996.
SAMUEL P. BANKS
Director since: 1996
Age: 43
Mr. Banks is Executive Director of Cunningham Children's Home, Urbana, Illinois.
Mr. Banks has been associated with Cunningham Children's Home since 1982. Mr.
Banks has served on the Board of Directors of Busey Bank since 1994.
T. O. DAWSON
Director since: 1995
Age: 57
Mr. Dawson is a partner in the firm of Insurance Risk Managers, Ltd., Champaign,
Illinois. Mr. Dawson has served on the Board of Directors of Busey Bank since
1988.
VICTOR F. FELDMAN
Director since: 1996
Age: 62
Dr. Feldman is an Ophthalmologist at Christie Clinic, Champaign, Illinois. Dr.
Feldman has been associated with Christie Clinic since 1967. Dr. Feldman has
served on the Board of Directors of Busey Bank since 1985.
KENNETH M. HENDREN
Director since: 1996
Age: 51
Mr. Hendren is a self-employed farmer in LeRoy, Illinois. Mr. Hendren
previously served on the Board of Directors of Busey Bank of McLean County from
1994 to 1996.
E. PHILLIPS KNOX
Director since: 1980
Age: 51
Mr. Knox is a lawyer with the firm Tummelson, Bryan and Knox, Urbana, Illinois.
He also serves in a consulting capacity for First Busey Corporation and Busey
Bank. Mr. Knox has served on the Board of Directors of Busey Bank since 1972.
P. DAVID KUHL
Director since: 1996
Age: 48
Mr. Kuhl is President and Chief Executive Officer of Busey Bank, a position he
assumed in June of 1991. Prior to that, Mr. Kuhl served in various management
capacities since joining Busey Bank in 1979. Mr. Kuhl has served on the Board
of Directors of Busey Bank since 1991.
-5-
<PAGE>
V. B. LEISTER, JR.
Director since: 1996
Age: 52
Mr. Leister is President of Carter's Moving & Storage, Inc., and Vice President
& Treasurer of Carter's Furniture Inc., Urbana, Illinois. Mr. Leister has served
on the Board of Directors of Busey Bank since 1992.
DOUGLAS C. MILLS
Director since: 1980
Age: 57
Mr. Mills has served as Chairman of the Board and Chief Executive Officer of
First Busey Corporation since its incorporation and, effective December 21,
1993, he assumed the role of President. He has been associated with Busey Bank
since 1971 when he assumed the position of Chairman of the Board.
LINDA M. MILLS
Director since: 1996
Age: 57
Mrs. Mills is President and Chief Executive Officer of Busey Carter Travel,
Champaign, Illinois. Mrs. Mills has served on the Board of Directors of Busey
Bank since 1991.
ROBERT C. PARKER
Director since: 1996
Age: 45
Dr. Parker is a Physician and Chief Executive Officer of Carle Clinic
Association, Urbana, Illinois as well as President of Health Alliance Medical
Plans, Urbana, Illinois. Dr. Parker has been associated with Carle Clinic
Association since 1982. Dr. Parker has served on the Board of Directors of
Busey Bank since 1995.
DAVID C. THIES
Director since: 1996
Age: 42
Mr. Thies is an attorney with the law firm of Webber & Thies, P.C., Urbana,
Illinois. Mr. Thies has
served on the Board of Directors of Busey Bank since 1986.
EDWIN A. SCHARLAU II
Director since: 1984
Age: 53
Mr. Scharlau is Chairman of the Board of First Busey Trust & Investment Co. and
First Busey Securities, Inc., positions he assumed in June of 1994. Mr.
Scharlau continues to serve as Chairman of the Board of Busey Bank, a position
he has held since July of 1991. Prior to that, Mr. Scharlau served as President
of Busey Bank since 1975. Mr. Scharlau began his association with Busey Bank in
1964.
ARTHUR R. WYATT
Director since: 1995
Age: 70
Mr. Wyatt is currently a Professor of Accounting at the University of Illinois.
Prior to that, he was a Partner at Arthur Andersen, LLP, Chicago, Illinois from
1966 to 1992. He also served as a member of the Financial Accounting Standards
Board from 1985 to 1987. Mr. Wyatt has served on the Board of Directors of
First Busey Corporation since 1995.
-6-
<PAGE>
During 1997, the Board of Directors of First Busey held 12 meetings. All
directors attended at least 75% of the meetings of the Board and the committees
on which they served during 1997.
The Board of Directors of First Busey has established the following
committees, among others, to assist in the discharge of its responsibilities.
The Audit Committee met four times in 1997. Members of the 1997 Audit
Committee were Mr. Wyatt (chairman), Mr. Ambrose, Mr. Thies, and Mr. Hendren.
The principal functions of the Audit Committee are to review periodic internal
reports, arrange for the annual external audit of First Busey, and to make a
written report of such examination to the full Board of Directors.
The Compensation Committee met three times in 1997. Members of the 1997
Compensation Committee were Dr. Pollard (chairman) and Mrs. Ikenberry.
First Busey does not have a formal nominating committee. The Board of
Directors, as a whole, performs the function of nominating persons for the
Board.
Each non-employee director of First Busey receives $500 for each meeting
held. In connection with any special Board of Directors' meeting, each
non-employee director who attends receives $500 per meeting. Mr. Knox, who
serves on First Busey's Board of Directors, a number of First Busey's
subsidiaries' boards of directors and provides certain consulting services to
the Company and its subsidiaries, receives an annual fee of $12,000 in lieu of
any other fees payable to non-employee directors of the Company and its
subsidiaries. See "Certain Relationships and Related Transactions." Directors
who are also employees of First Busey or any of its subsidiaries receive no
additional compensation for attending Board of Directors' meetings. Certain of
the Directors have elected to defer their directors' fees pursuant to First
Busey's Director Deferred Compensation Plan. The accounts containing such
deferred amounts of Mr. Banks, Mr. Dawson, Dr. Feldman, Mr. Hendren, Mrs.
Ikenberry, Mr. Knox, Mr. Leister, Mrs. Mills, Dr. Pollard, Mr. Snyder and Mr.
Wyatt were credited in 1997 with "above-market" interest of $1,074, $1,383,
$1,384, $333, $1,534, $3,905, $1,639, $1,636, $1,613, $334, and $815,
respectively.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Class A Common Stock as of March 6, 1998 by all directors and
director nominees, by each person who is known by First Busey to be the
beneficial owner of more than 5% of the outstanding Class A Common Stock, by
each executive officer named in the Summary Compensation Table and by all
directors and executive officers as a group.
The number of shares beneficially owned by each director, director nominee,
5% stockholder or executive officer is determined under rules of the Securities
and Exchange Commission (the "Commission"), and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which the individual
has the sole or shared voting power or investment power and also any shares
which the individual has the right to acquire within 60 days of March 6, 1998
through the exercise of any stock option or other right. Unless otherwise
indicated, each person has sole investment and voting power (or shares such
powers with his or her spouse) with respect to the shares set forth in the
following table. In certain instances, the number of shares listed includes, in
addition to shares owned directly, shares held by the spouse or children of the
person, or by a trust of which the person is a trustee or in which the person
may have a beneficial interest. In some cases, the person has disclaimed
beneficial interest in certain of these shares.
-7-
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of Class A
Name and Address of Common Stock
Beneficial Owner Beneficially Owned
- ------------------------------------------------ -----------------------------
Percent of
Shares Total Outstanding
--------- ------------------
<S> <C> <C>
Douglas C. Mills (1) 782,378 11.35%
201 E. Main Street
Urbana, Illinois 61801
First Busey Trust & Investment Co. (2) 102 707,733 10.26%
E. Main Street
Urbana, Illinois 61801
Linda M. Mills (3) 594,100 8.62%
2123 Seaton Court
Champaign, Illinois 61820
Martin A. Klingel Estate(4) 388,501 5.63%
Joseph M. Ambrose 16,185 .24%
Samuel P. Banks 1,500 .02%
T. O. Dawson 43,723 .63%
Victor F. Feldman 33,272 .48%
Kenneth M. Hendren 90,744 1.32%
Judith L. Ikenberry 15,413 .22%
E. Phillips Knox 122,955 1.78%
P. David Kuhl(5) 68,524 .99%
V. B. Leister, Jr. 10,124 .15%
Robert C. Parker 2,950 .04%
John W. Pollard, M.D. 47,038 .68%
Edwin A. Scharlau II (6) 183,016 2.65%
Benjamin G. Snyder 1,500 .02%
David C. Thies 1,350 .02%
Arthur R. Wyatt 39,129 .57%
Total 2,442,402 35.26%
All directors and executive officers as a group
(17 persons) 2,053,901 29.66%
<FN>
(1) The number of shares listed does not include 594,100 shares of Class A
Common Stock beneficially owned by Linda M. Mills, Mr. Mills' spouse.
(2) Bubank Co. and Urban & Co., each of which is a partnership (the
registered nominees for First Busey Trust & Investment Co.),
hold these shares in various fiduciary capacities. Of these shares,
267,520 are beneficially owned by First Busey's Profit Sharing and 401(k) Stock
Fund and 440,213 are beneficially owned by First Busey's Stock Ownership Plan.
There are also 225,855 shares registered under these nominees for which First
Busey Trust & Investment Co. does not have sole voting or investment power nor
are they included in the number of shares listed.
(3) The number of shares listed does not include 782,378 shares of Class A
Common Stock beneficially owned by Douglas C. Mills, Mrs. Mills' spouse.
(4) Douglas C. Mills and Allen B. Klingel, Jr. are co-executors of the
Martin A. Klingel Estate and share voting and dispositive power of these shares.
(5) The number of shares listed includes options to purchase 11,250 shares
of Class A Common Stock which are currently exercisable.
(6) The number of shares listed includes options to purchase 19,500 shares
of Class A Common Stock which are currently exercisable.
</TABLE>
-8-
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Common Stock to file with the
Commission initial reports of Ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. The Company believes
that during the fiscal year ended December 31, 1997, its executive officers,
directors and holders of more than 10% of the Company's Common Stock complied
with all Section 16(a) filing requirements except for Director Knox who was
delinquent in the filing of one Form 4 during 1997 and Director Ambrose who was
delinquent in filing Form 5 for 1997. Reports describing such transactions were
subsequently filed. In making these statements, the Company has relied upon
the written representations of its directors and executive officers.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Company's Chief
Executive Officer and the other executive officers of the Company for the three
fiscal years ending December 31, 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS
-------------------- ----------------------------------
Securities
Name and Restricted Stock Underlying All Other
Principal Position Year Salary ($) Bonus($) Awards ($) (1) Options/SARS(#) Compensation($) (2)
- -------------------------- ---- ---------- -------- ----------------- --------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Douglas C. Mills 1997 155,000 100,000 5,500 33,000 77,330
Chairman of the Board and 1996 150,000 112,500 4,450 - 68,422
Chief Executive Officer 1995 150,000 96,800 - 15,000 53,038
Edwin A. Scharlau II 1997 155,000 44,950 5,500 6,000 20,144
Chairman of the Board of 1996 150,000 45,000 4,450 - 16,524
First Busey Trust & 1995 150,000 36,784 - 11,250 12,230
Investment Co.
P. David Kuhl 1997 147,000 42,630 5,500 5,000 16,113
President and Chief 1996 140,000 42,000 4,450 - 10,980
Executive Officer of Busey 1995 135,000 35,816 - 11,250 9,106
<FN>
(1) At December 31, 1997, Mr. Mills, Mr. Scharlau and Mr. Kuhl each held 200 shares of restricted stock
having a value of $5,500 based upon a $27.50 share "Bid" price of Company Class A Common Stock as quoted on the
OTC Bulletin Board on December 31, 1997. The shares of restricted stock awarded to the executive officers are
subject to the restriction that the Company must achieve a specified net income per share for the years ended
December 31, 1997 through December 31, 2000. Should the Company achieve this specified net income per share
annually, the restrictions on fifty shares of restricted stock applicable for that specific year will lapse and
the shares will be awarded to the executive officers. Dividends are paid on all shares of restricted stock to
the same extent as any other shares of the Company's Class A Common Stock.
(2) The amounts disclosed in this column for 1997 include:
(a) Company contributions of $9,052, $9,052, and $9,052 in 1997 under First Busey's Profit Sharing Plan and
Retirement Trust, a defined contribution plan, on behalf of Mr. Mills, Mr. Scharlau and Mr. Kuhl, respectively.
(b) Discretionary company contributions of $3,436, $3,436 and $3,436, under First Busey's Employee Stock
Ownership Plan, a defined contribution plan, on behalf of Mr. Mills, Mr. Scharlau and Mr. Kuhl, respectively.
(c) $37,339 in 1997 represents the compensation value of a split-dollar life insurance policy of Mr. and
Mrs. Mills. The Company will be reimbursed for all premiums paid on the policy, without interest, from the
proceeds of the policy. Split-dollar life insurance policies were acquired on Mr. Scharlau and Mr. Kuhl during
1994. $568 and $554, respectively, represent the compensation value of these policies to Mr. Scharlau and Mr.
Kuhl.
(d) Company "above-market" interest payments of $27,503, $7,088 and $3,071 under First Busey's Executive
Deferred Compensation Plan on behalf of Mr. Mills, Mr. Scharlau and Mr. Kuhl, respectively.
</TABLE>
-9-
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
------------------------------------------- ------------------------------
Number of
Securities % of
Underlying Total Options
Options/SARs Granted to Exercise or
Granted Employees in Base Price Expiration
Name (#) Fiscal Year ($/Share) Date 5%($) 10%($)
- -------------------- ------------- -------------- ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Douglas C. Mills 8,000(1) 34% 24.25 12/31/03 100,821 195,743
25,000(2) 27.50 12/31/01 148,161 319,069
Edwin A. Scharlau II 5,000(1) 6% 24.25 12/31/03 63,014 122,340
1,000(3) 27.50 12/31/99 2,819 5,775
P. David Kuhl 5,000(1) 5% 24.25 12/31/03 63,013 122,340
<FN>
(1) The options become fully exercisable on January 1, 2002. No portion is exercisable before
that date.
(2) The options become fully exercisable on January 1, 2001. No portion is exercisable before
that date.
(3) The options become fully exercisable on January 1, 1999. No portion is exercisable before
that date.
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTIONS/SAR VALUES
The following table provides information on option exercises in fiscal 1997
by the named executive officers and the value of such officers' unexercised
options at December 31, 1997.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Options/SARs at Money Options SARs at
December 31, 1997(#) December 31, 1997($) (1)
-------------------------- ----------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Douglas C. Mills 33,750 412,200 0 49,500 0 192,500
Edwin A. Scharlau II 0 0 18,000 18,750 341,258 145,250
P. David Kuhl 9,000 110,250 9,000 25,000(2) 156,510 205,000
<FN>
(1) Based on the "Bid" price of Company Class A Common Stock as quoted on the OTC Bulletin Board on
December 31, 1997 ($27.50). The numbers shown reflect the value of options accumulated over a
five-year period.
(2) Includes 7,250 shares held by Barbara J. Kuhl, Mr. Kuhl's spouse.
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
administers the Company's executive compensation program. After consideration
of the Committee's recommendations, the full Board of Directors reviews and
approves all compensation, both monetary and stock-based, to all executive
officers.
In the past, there have been three main components to the executive
officers' compensation package: salary, bonus and stock awards. It is the
intention of the Committee that compensation be set in such a manner as to be
competitive to attract, retain and motivate its management team. The Committee
also believes that stock ownership by its executive officers assists in aligning
the executive officers' interests with those of the Company's stockholders. In
January of 1997, the Compensation
-10-
<PAGE>
Committee recommended and the Board of Directors approved the Management and
Associate Dividend Program (the "MAD program"). Under the MAD program, the
Board of Directors set four targeted levels for "earnings per share" for the
Company for 1997. These levels were, $1.45, $1.46, $1.47 and $1.48. Based on
the level of achievement of earnings per share, the officer or associate would
receive a dividend of a predetermined percentage of their salary. The goal of
the MAD program is to heighten awareness of the Company's earnings per share
goal while emphasizing the impact of the team concept throughout the
organization. The term "dividend" was used to indicate that this award was
granted at the discretion of the Board of Directors and would be based annually
on the achievement of earnings per share, similar to the dividend paid to the
Company's stockholders. Under this program, the Board hopes to further enhance
the alignment of the staff's efforts with those of the Company's stockholders.
In September of 1996, the Board of Directors approved the award of 200
shares of Restricted Stock to 44 officers, all of whom are presently at the
Senior Vice President level or above (the "Officers"). These shares carry
restrictions which are tied to the earnings per share targets for the years
1997, 1998, 1999 and 2000. Should the Company achieve the specified earnings
per share target, the restriction on 50 shares annually will lapse and the
shares will be allocated to the Officers. Based on the achievement of the 1997
earnings per share target, 50 shares were allocated to the Officers in January
of 1998.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Base Salary/ MAD Program. Mr. Mills' 1997 base salary was $155,000,
representing a 3.3% increase from his base salary for 1996. The Committee
determined that under the MAD program, if the level of earnings per share set by
the Board was achieved, $1.45, $1.46, $1.47 or $1.48, Mr. Mills' dividend would
be either 50%, 55%, 60% or 65% , respectively, of his salary. The minimum
earnings per share target would have awarded Mr. Mills a dividend of $77,500
with the highest level awarding Mr. Mills a dividend of $100,750. Although Mr.
Mills' 1997 base salary was less than the base salary of the chief executive
officers of the Company's peers, Mr. Mills' total cash compensation would be
comparable with such chief executive officers if the Company achieved its
maximum level of earnings per share and Mr. Mills received his maximum dividend
under the MAD program. Based on the Company's achievement of earnings per share
of $1.48, Mr. Mills received a dividend in the amount of $100,000.
Restricted Stock. During 1996, Mr. Mills was awarded 200 shares of restricted
stock tied to the performance of the Company as of December 31, 1997, 1998, 1999
and 2000. Because the earnings per share target for 1997 was achieved, the
restrictions on 50 shares were lifted in January 1998.
Stock Options. The granting of stock options by the Committee is designed to
retain and motivate the management team as well as align executive officers'
financial interests with stockholder value. The number of stock options granted
to an executive officer and other officers is determined by top management and
approved by the Board. Grants of stock options are intended to recognize
different levels of contribution to the achievement of the Company's annual
corporate goals as well as different levels of responsibility and experience.
All stock options are granted with an exercise price equal to the fair market
value of Class A Common Stock on the date of grant. In August of 1997, stock
options representing 69,700 shares were granted to officers of the Company. Mr.
Mills received a stock option for 8,000 shares. In December of 1997, in an
effort to further align Mr. Mills' compensation package with stockholder value
and keep it in line with other chief executive officers in the Company's peer
group, Mr. Mills was awarded a 25,000 share stock option.
COMPENSATION COMMITTEE
John W. Pollard, M.D. (Chairman)
Judith L. Ikenberry
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<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act that might incorporate future filings, including this
Proxy Statement, in whole or in part, the preceding report and the Performance
Table included below shall not be incorporated by reference into any such
filings.
COMPANY PERFORMANCE
The following table compares the Company's performance, as measured by the
change in price of its Class A Common Stock plus reinvested dividends, with the
CRSP Nasdaq Total Return Index- United States ("Nasdaq Total Return
Index--U.S.") and the SNL-Midwestern Banks Index (the "Custom Peer Group") for
the five years ended December 31, 1997.
FIRST BUSEY CORPORATION
Stock Price Performance
<TABLE>
<CAPTION>
PERIOD ENDING
----------------------------------------------------------
INDEX 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First Busey Corporation 100.00 138.22 161.41 185.98 237.53 302.08
NASDAQ - Total US 100.00 114.80 112.21 158.70 195.19 239.53
SNL Midwest Bank Index 100.00 104.48 100.99 149.23 203.02 329.16
</TABLE>
The Banks in the Custom Peer Group (SNL-Midwestern Banks) represent all
publicly traded banks, thrifts or financial service companies located in Iowa,
Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North
Dakota, Nebraska, Ohio, South Dakota and Wisconsin.
-12-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Busey Bank has had, and may be expected to have in the future, banking
transactions in the ordinary course of business with directors, executive
officers and holders of 5% or more of First Busey's Common Stock, their
immediate families and their affiliated companies. These transactions have been
and will be on the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unaffiliated persons.
These transactions have not involved and will not involve more than the normal
risk of collectibility or any other unfavorable features. At December
3l, 1997, these persons and companies were indebted to Busey Bank for loans
totaling approximately $4,875,000 representing 6.07% of total stockholders'
equity. In addition to these loans, Busey Bank makes loans to officers of First
Busey's subsidiaries who are not executive officers of First Busey.
Mr. Knox, a director of the Company, is a lawyer with Tummelson, Bryan and
Knox, Urbana, Illinois and provided legal and certain consulting services to the
Company during fiscal 1997. Mr. Knox received an annual director's fee of
$12,000 in lieu of any other fees payable to non-employee directors of the
Company and its subsidiaries. The dollar amount of the fees paid to Tummelson,
Bryan and Knox by the Company during the 1997 fiscal year was $81,426.
RATIFICATION OF AUDITORS PROPOSAL
(PROPOSAL TWO)
For the year 1997, the Board of Directors of the Company retained McGladrey
& Pullen, LLP as independent auditors for the Company. The Board of Directors
has appointed McGladrey & Pullen, LLP as independent auditors for the fiscal
year ending December 31, 1998. A representative of McGladrey & Pullen, LLP will
be present at the Annual Meeting and will have the opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF
AUDITORS PROPOSAL.
OTHER BUSINESS
So far as is presently known, there is no business to be transacted at the
Annual Meeting other than that referred to in the Notice of Annual Meeting
Stockholders and it is not anticipated that other matters will be brought before
the Annual Meeting. If, however, other matters should properly be brought
before the Annual Meeting, it is intended that the proxy holders may vote or act
in accordance with the Company's Board of Directors' recommendation on such
matters.
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<PAGE>
STOCKHOLDER PROPOSALS
Stockholders desiring to submit proposals to be voted upon by stockholders
at the 1999 Annual Meeting must submit their proposals to the Executive Vice
President and Corporate Secretary of the Company no later than November 28,
1998.
By order of the Board of Directors,
Barbara J. Kuhl
Executive Vice President,
Corporate Secretary and Treasurer
March 23, 1998
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