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
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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FIRST BUSEY CORPORATION
201 W. MAIN, URBANA, IL 61801
217/365-4556
March 16, 2001
Dear Stockholder:
The Annual Meeting of Stockholders of First Busey Corporation will be held
on Monday, April 16, 2001, at the Great Hall of the Krannert Center for the
Performing Arts, 500 South 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 14 directors of the Company to serve until the 2002 Annual
Meeting 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, 2001.
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,
/s/ Douglas C. Mills
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Douglas C. Mills
Chairman of the Board
FIRST BUSEY CORPORATION
201 W. MAIN, URBANA, IL 61801
217/365-4556
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 16, 2001
To the Stockholders of
First Busey Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of First
Busey Corporation, a Nevada corporation, will be held at the Great Hall of the
Krannert Center for the Performing Arts, 500 South Goodwin Avenue, Urbana,
Illinois, on Monday, April 16, 2001, at 7:00 p.m. for the following purposes:
1. To elect 14 directors of the Company to serve until the 2002 Annual
Meeting 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, 2001.
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 2, 2001 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,
/s/ Barbara J. Kuhl
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Barbara J. Kuhl
President and Chief Operating Officer,
Corporate Secretary and Treasurer
Urbana, Illinois
March 16, 2001
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FIRST BUSEY CORPORATION
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 of First Busey Corporation for use at the
Annual Meeting of Stockholders. The Board has fixed the close of business on
March 2, 2001, 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 13,565,034 shares of Common Stock, without
par value.
The Company's Form 10-K Annual Report, which includes audited financial
statements for the year ended December 31, 2000, accompanies this Proxy
Statement. The approximate date on which the Proxy Statement and the
accompanying proxy are first being sent to stockholders is March 16, 2001.
VOTING
General. Shares of Common Stock represented by properly executed proxies
received by the Company will be voted at the Annual Meeting in accordance with
the instructions on the proxies. 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, 2001. 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 14
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. Shares represented by proxies 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.
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 the 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 Common Stock "FOR" each of the proposals. As of March 2, 2001, these
individuals beneficially owned an aggregate of 4,645,735 shares of Common Stock,
or approximately 33.81% of the Common Stock outstanding.
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.
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SOLICITATION
The Company will pay the cost of solicitation of proxies. 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 14 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 of
Directors, with the exception of Barbara J. Kuhl.
It is intended that the proxies received in response to this solicitation
will be voted for the election of the 14 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.
Set forth below is certain biographical information concerning each nominee
for director including principal occupation and age as of March 2, 2001, the
record date for the Annual Meeting. Unless otherwise noted, nominees for
director have been employed in their principal occupation with the same
organization for at least the last 5 years.
JOSEPH M. AMBROSE
Director since: 1993
Age: 43
Mr. Ambrose has served as Executive Vice President of AFNI, Inc., since January
1999. Prior to that, Mr. Ambrose was a lawyer with the firm Hinshaw &
Culbertson, Bloomington, Illinois. Mr. Ambrose had been associated with such
firm since September 1994. Mr. Ambrose previously served as a director of Busey
Bank of McLean County from 1984 to 1996.
SAMUAL P. BANKS
Director since: 1996
Age: 46
Mr. Banks is President and Chief Executive Officer 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: 60
Mr. Dawson is Senior Vice President of Acordia, Inc., Champaign, Illinois.
Prior to that, Mr. Dawson was a partner in the firm of Insurance Risk Managers,
Ltd., Champaign, Illinois, which was acquired by Acordia, Inc. Mr. Dawson has
served on the Board of Directors of Busey Bank since 1988.
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VICTOR F. FELDMAN
Director since: 1996
Age: 65
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: 54
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: 54
Mr. Knox is a lawyer with the firm Tummelson Bryan & Knox, Urbana, Illinois.
Mr. Knox has served on the Board of Directors of Busey Bank since 1972.
BARBARA J. KUHL
Director-nominee
Age: 50
Mrs. Kuhl is President and Chief Operating Officer of First Busey Corporation
since November 2000. Prior to that, Mrs. Kuhl served in various management
capacities since joining Busey Bank in 1974. Mrs. Kuhl is married to P. David
Kuhl, a director.
P. DAVID KUHL
Director since: 1996
Age: 51
Mr. Kuhl is President and Chief Executive Officer of Busey Bank since June 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. Mr. Kuhl is married to Barbara J. Kuhl, a director-nominee.
V. B. LEISTER, JR.
Director since: 1996
Age: 55
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: 60
Mr. Mills has served as Chairman of the Board and Chief Executive Officer of
First Busey Corporation since its incorporation. He has been associated with
Busey Bank since 1971 when he assumed the position of Chairman of the Board.
Mr. Mills is married to Linda M. Mills, a director.
LINDA M. MILLS
Director since: 1996
Age: 60
Mrs. Mills is Chairman of the Board of Busey Travel, Champaign, Illinois. Mrs.
Mills has served on the Board of Directors of Busey Bank since 1991. Mrs. Mills
is married to Douglas C. Mills, a director.
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DAVID C. THIES
Director since: 1996
Age: 45
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: 56
Mr. Scharlau is Chairman of the Board of Busey Investment Group, Inc. since
January 2001 and First Busey Securities, Inc., since June 1994. Mr. Scharlau
also serves as Chairman of the Board of Busey Bank, a position he has held since
July of 1991. Mr. Scharlau has been associated with Busey Bank since 1964.
ARTHUR R. WYATT
Director since: 1995
Age: 73
Mr. Wyatt is a Professor of Accounting at the University of Illinois-Urbana and
Chairman of the Board of Inprimis, Inc.
During 2000, the Board held 12 meetings. All directors attended at least
75% of the meetings of the Board and the committees on which they served during
2000.
The Board of Directors of the Company has established the following
committees, among others, to assist in the discharge of its responsibilities.
The Audit Committee met four times in 2000. Members of the Audit Committee
are Messrs. Ambrose (Chairman), Hendren, Thies, and Wyatt. The function of the
Audit Committee and its activities during 2000 are described in detail under the
heading Report of the Audit Committee.
The Compensation Committee met three times in 2000. Members of the
Compensation Committee are Messrs. Wyatt (Chairman), Feldman and Knox.
First Busey does not have a formal nominating committee. The Board of
Directors, as a whole, performs the function of nominating members for the
Board.
During 2000, non-employee directors of First Busey received $600 for each
meeting held. As an alternative to a cash payment, non-employee directors may
elect to receive options to purchase 3,000 shares of Common Stock pursuant to
the First Busey Corporation 1999 Stock Option Plan. Options were granted on
February 15, 2000, in accordance with the plan, to non-employee directors opting
for such alternative at a price of $20.0625 per share, the closing price of the
Common Stock on such date. These options became exercisable on January 16, 2001
and expire on December 15, 2004. Directors Ambrose, Banks, Dawson, Hendren,
Knox, Leister, Mills, Parker and Wyatt chose to receive stock options.
Directors who are also employees of First Busey or any of its subsidiaries
receive no additional compensation for attending Board of Directors' meetings.
In January 2001, the Board of Directors approved the payment of a retainer
for each non-employee director. Accordingly, each non-employee director
received a cash retainer of $7,500 for the fiscal year 2001. Non-employee
directors remain eligible for fees paid in connection with Board of Directors'
meetings.
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REPORT OF THE AUDIT COMMITTEE
In accordance with its written charter adopted by the Board of Directors
(attached to this Proxy Statement as Annex A), the Audit Committee of the Board
assists the Board in fulfilling its responsibility for the oversight of the
quality and integrity of the accounting, auditing and financial reporting
practices of the Company. During the year, the Committee met four times and
also reviewed and discussed the interim financial information contained in each
quarterly earnings announcement with management and the independent auditors
prior to public release.
In discharging its oversight responsibility as to the audit process, the
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and the Company that might
bear on auditors' independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committees," discussed with
the auditors any relationships that may impact their objectivity and
independence and satisfied itself as to the auditors' independence. The
Committee also discussed with management, the internal auditors and the
independent auditors the quality and adequacy of the Company's internal controls
and internal audit function's organization, responsibilities, budget and
staffing. The Committee reviewed with both the independent and internal
auditors their audit plans, scope, and identification of audit risk areas.
The Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and discussed and reviewed the results of
the independent auditors' examination of the financial statements. The
Committee also discussed the results of the internal audit examinations.
The Committee reviewed the audited financial statements of the Company as
of and for the year ended December 31, 2000, with management and the independent
auditors. Management has the responsibility for the preparation of the
Company's financial statements and the independent auditors have the
responsibility for the examination of those statements.
Based upon the above-mentioned review and discussions with management and
the independent auditors, the Committee recommended to the Board that the
Company's audited financial statements be included in its Annual Report on Form
10-K for the year ended December 31, 2000, for filing with the Securities and
Exchange Commission. The Committee also recommended the reappointment, subject
to stockholder approval, of the independent auditors and the Board concurred in
such recommendation.
AUDIT COMMITTEE
Joseph M. Ambrose (Chairman)
Kenneth M. Hendren
David C. Thies
Arthur R. Wyatt
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of March 2, 2001 by all directors and director
nominees, by each person who is known by the Company to be the beneficial owner
of more than 5% of the outstanding 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, 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 sole or shared
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voting power or investment power and also any shares which the individual has
the right to acquire within 60 days of March 2, 2001 through the exercise of any
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.
Name and Address of Beneficial Owner Common Stock Beneficially Owned
- ------------------------------------ -------------------------------
Shares Percentage
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Douglas C. Mills (1) 2,724,200 19.95%
201 E. Main Street
Urbana, Illinois 61801
First Busey Trust & Investment Co. (2) 1,309,089 9.65%
502 W. Windsor Road
Champaign, Illinois 61820
Linda M. Mills (3) (4) 721,200 5.31%
2123 Seaton Court
Champaign, Illinois 61821
A. Barclay Klingel, Jr. (5) 833,158 6.14%
Joseph M. Ambrose (4) 35,910 .27%
Samuel P. Banks (4) 11,234 .08%
T. O. Dawson (4) 94,626 .70%
Victor F. Feldman 72,544 .53%
Kenneth M. Hendren (4) 150,238 1.11%
E. Phillips Knox (4) 207,450 1.53%
Barbara J. Kuhl (6) 80,333 .59%
P. David Kuhl (7) (8) 89,332 .66%
V. B. Leister, Jr. (4) 27,248 .20%
Edwin A. Scharlau II (8) 361,246 2.66%
David C. Thies 2,700 .02%
Arthur R. Wyatt (4) 67,474 .50%
All directors and executive officers
as a group (14 persons) 4,645,735 33.81%
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(1) Includes 670,002 shares held by the Martin A. Klingel Estate for which Mr.
Mills shares voting and dispositive powers with A. Barclay Klingel, Jr. and
1,000,000 shares held by Mills Investment LP. Also includes options to
purchase 85,000 shares of Common Stock which are currently exercisable.
Excludes 721,200 shares of 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, 402,219 are beneficially
owned by First Busey Corporation Profit Sharing Plan & Trust and 904,870 are
beneficially owned by First Busey Employee Stock Ownership Plan.
(3) Excludes 2,724,200 shares of Common Stock beneficially owned by Douglas C.
Mills, Mrs. Mills' spouse.
(4) Includes options to purchase 6,000 shares of Common Stock which are
currently exercisable.
(5) Includes 670,002 shares held by the Martin A. Klingel Estate for which Mr.
Klingel shares voting and dispositive powers with Douglas C. Mills. Also
includes 108,000 shares held in the Klingel Insurance Trust, for which Mr.
Klingel acts as sole trustee.
(6) Excludes 89,332 shares of common stock beneficially owned by P. David Kuhl,
Mrs. Kuhl's spouse.
(7) Excludes 80,333 shares of common stock beneficially owned by Barbara J.
Kuhl, Mr. Kuhl's spouse.
(8) Includes options to purchase 17,000 shares of Common Stock which are
currently exercisable
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SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
Common Stock to file with the Securities and Exchange 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, 2000, its executive officers, directors and holders of
more than 10% of the Common Stock complied with all Section 16(a) filing
requirements. In making these statements, the Company has relied upon the
written representations of its directors, executive officers and significant
stockholders.
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 earning at
least $100,000 in 2000.
SUMMARY COMPENSATION TABLE
Restricted Securities
Stock Underlying All Other
Name and Principal Positions Year Salary($) Bonus($) (1) Awards($) (2) Options/SARS(#) Compensation($) (3)
- ---------------------------- ---- --------- ------------ ------------- --------------- -------------------
Douglas C. Mills 2000 100,000 121,813 1,994 15,000 77,016
Chairman of the Board and Chief 1999 125,000 100,000 2,263 20,000 67,713
Executive Officer 1998 155,000 48,050 3,650 4,642 99,999
Edwin A. Scharlau II 2000 140,000 81,450 1,994 7,500 10,068
Chairman of the Board of Busey 1999 150,000 50,000 2,263 10,000 13,791
Investment Group 1998 155,000 37,200 3,650 4,700 27,477
P. David Kuhl 2000 140,000 81,450 1,994 7,500 10,047
President and Chief 1999 150,000 50,000 2,263 10,000 12,988
Executive Officer of Busey 1998 153,000 36,720 3,650 4,700 20,730
Barbara J. Kuhl 2000 80,000 62,875 1,994 -0- 7,512
President, Corporate Secretary, 1999 75,000 45,000 2,263 -0- 9,895
Treasurer and Chief Operating Officer 1998 65,500 24,000 3,650 4,400 8,352
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(1) Mr. Mills, Mr. Scharlau, Mr. Kuhl and Mrs. Kuhl received 1,500, 1,200,
1,200 and 1,000 shares of Common Stock, respectively, under the 2000
Management and Associate Dividend Program. The shares were valued at the
closing price on November 21, 2000, the date the award was approved by the
Board. The stock values included for Mr. Mills, Mr. Scharlau, Mr. Kuhl
and Mrs. Kuhl were $26,813, $21,450, $21,450 and $17,875, respectively.
(2) At December 31, 2000, Mr. Mills, Mr. Scharlau, Mr. Kuhl and Mrs. Kuhl each
held 100 shares of restricted stock having a value of $1,993.75 based upon
a closing price of $19.9375 as quoted on the Nasdaq National Market on
December 31, 2000. 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 year ended
December 31, 2000. Because the Company did achieve this specified net
income per share, the restriction lapsed and the shares were awarded to
the executive officers on January 2, 2001.
(3) The amounts disclosed in this column for 2000 include:
(a) Company contributions of $6,658, $6,658, $6,658 and $5,168, under First
Busey Corporation Profit Sharing Plan & Trust, a defined contribution
plan, on behalf of Mr. Mills, Mr. Scharlau, Mr. Kuhl and Mrs. Kuhl,
respectively.
(b) Discretionary company contributions of $2,787, $2,787, $2,787 and
$2,344, under First Busey Corporation Employee Stock Ownership Plan,
a defined contribution plan, on behalf of Mr. Mills, Mr. Scharlau,
Mr. Kuhl and Mrs. Kuhl, respectively.
(c) Compensation value of split-dollar life insurance policies on Mr.
Mills in the amount of $67,571. The Company will be reimbursed for
all premiums paid on the policies, without interest, from the
proceeds of the policies. Mr. Mills currently has two $10,000,000
split-dollar life insurance policies. The first policy was acquired
in 1992 and the second policy was acquired in 2000. Split-dollar
life insurance policies were acquired on Mr. Scharlau and Mr. Kuhl
in 1994. For 2000, $623 and $602, respectively, represent the
compensation value of these policies to Mr. Scharlau and Mr. Kuhl.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable Value at
Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
- ----------------------------------------------------------------- ------------------------------
Number of % of
Securities Total Options
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#)(1) Fiscal Year ($/Share) Date 5%($) 10%($)
- -------------------- -------------- ------------- ------------ ---------- -------- --------
Douglas C. Mills 15,000 50% $20.0625 12/15/04 62,575 136,920
Edwin A. Scharlau II 7,500 25% $20.0625 12/15/04 31,287 68,460
P. David Kuhl 7,500 25% $20.0625 12/15/04 31,287 68,460
(1) The options became exercisable on January 16, 2001.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTIONS/SAR VALUES
The following table provides information on option exercises in fiscal 2000
by the named executive officers and the value of such officers' unexercised
options at December 31, 2000.
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Options/SARs at Money Options/SARs at
December 31, 2000(#) December 31, 2000($) (1)
------------------------------------------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------
Douglas C. Mills -0- -0- 20,000 115,642 33,750 784,716
Edwin A. Scharlau II -0- -0- 10,000 44,700 16,875 344,775
P. David Kuhl -0- -0- 10,000 44,700 16,875 344,775
Barbara J. Kuhl -0- -0- -0- 17,400 -0- 145,943
(1) Based on the closing price of Common Stock of $19.9375 as quoted on the
Nasdaq National Market on December 31, 2000.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors 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
July of 2000, the Compensation Committee recommended and the Board of Directors
approved the Management and Associate Dividend Program, or the "MAD program."
Under the MAD program, the Board of Directors set four targeted levels for
"diluted earnings per share" for the Company for 2000. These levels were $.97,
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$.98, $.99 and $1.00. 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. Also as part of the 2000 MAD program, the Committee
recommended and the Board approved a stock bonus to key officers. Mr. Mills,
Mr. Scharlau, Mr. Kuhl and Mrs. Kuhl received 1,500, 1,200, 1,200, and 1,000
shares, respectively.
In September of 1996, the Board approved the award of 400 shares of
Restricted Stock to each of 41 officers, all of whom were then at the Senior
Vice President level or above. Restricted stock grantees are collectively
referred to as 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 100 shares annually will lapse and the shares will be allocated
to the Officers. Based on the achievement of the 2000 earnings per share target
of $1.00, 100 shares were allocated to the Officers in January of 2001.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Base Salary/ MAD Program. Mr. Mills' 2000 base salary was set at $100,000,
representing a decrease from his base salary of $125,000 for 1999. The
Committee determined that under the MAD program, if the level of earnings per
share set by the Board was achieved, $.97, $.98, $.99 or $1.00, Mr. Mills'
dividend would be 80%, 85%, 90%, or 95%, respectively, of his salary. The
minimum earnings per share target would have awarded Mr. Mills a dividend of
$80,000 with the highest level awarding Mr. Mills a dividend of $95,000. Based
on the Company's achievement of earnings per share of $1.03, Mr. Mills received
a dividend in the amount of $95,000. Mr. Mills also received 1,500 shares under
the stock bonus representing a value on the date granted of $26,813.
Restricted Stock. During 1996, Mr. Mills was awarded 400 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 2000 was
achieved, 100 shares of restricted stock were released.
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 the Committee 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 Common Stock on the date of grant. On February 15, 2000, stock options
representing 57,000 shares were granted to officers and Directors of the
Company. Mr. Mills received a stock option for 15,000 shares.
COMPENSATION COMMITTEE
Arthur R. Wyatt (Chairman)
Victor F. Feldman
E. Phillips Knox
- 11 -
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 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 Common Stock plus reinvested dividends, with the CRSP Nasdaq
Total Return Index- United States and the SNL-Midwestern Banks Index for the
five years ended December 31, 2000.
FIRST BUSEY CORPORATION
Stock Price Performance
[GRAPH - PLOT POINTS BELOW]
Period Ending
----------------------------------------------------------
Index 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
- -----------------------------------------------------------------------------------
First Busey Corporation 100.00 127.72 162.43 220.74 279.64 252.49
NASDAQ - Total US 100.00 123.04 150.69 212.51 394.92 237.62
SNL Midwest Bank Index 100.00 136.05 220.58 234.63 184.35 223.24
The Banks in the Custom Peer Group - SNL-Midwestern Banks Index - 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 -
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Knox, a director of the Company, is a lawyer with Tummelson Bryan &
Knox, Urbana, Illinois, and provided legal and certain consulting services to
the Company during fiscal 2000. The dollar amount of the fees paid to Tummelson
Bryan & Knox by the Company during the 2000 fiscal year was $72,706.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's banking subsidiaries have, 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 the Company'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, 2000, these persons and companies were indebted to the Company's
banking subsidiaries for loans totaling approximately $3.362 million
representing 3.64% of total stockholders' equity. In addition to these loans,
the Company's banking subsidiaries make loans to officers of the Company's
subsidiaries who are not executive officers of First Busey.
RATIFICATION OF AUDITORS PROPOSAL
(PROPOSAL TWO)
The Board of Directors has appointed McGladrey & Pullen, LLP as independent
auditors for the fiscal year ending December 31, 2001. 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. As of February 22, 2001, the
aggregate fees billed for professional services rendered for the audit of the
Bank's annual financial statements for the 2000 fiscal year were $41,000 and
additional fees for such audit are expected to be approximately $31,000. The
aggregate fees billed for professional services rendered for the review of the
Company's Forms 10-Q for the 2000 fiscal year were $8,355.
The aggregate fees billed for professional services rendered by the Bank's
principal accountants for services other than the audit of the Bank's annual
financial statements and the review of the Bank's Forms 10-Q were $26,159 for
tax related services and $41,052 for other services during the fiscal year
ending December 31, 2000. The audit committee has determined that the provision
of these services is compatible with maintaining the principal accountant's
independence.
The Board of Directors recommends that stockholders vote FOR the
Ratification Of Auditors Proposal.
- 13 -
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 of
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.
STOCKHOLDER PROPOSALS
If a stockholder intends to present a proposal at the Company's 2002 Annual
Meeting and desires that the proposal be included in the Company's Proxy
Statement and form of proxy for that meeting, the proposal must be in compliance
with Rule 14a-8 under the Exchange Act and received at the Company's principal
executive offices not later than November 16, 2001. As to any proposal that a
stockholder intends to present to stockholders without inclusion in the
Company's Proxy Statement for the Company's 2002 Annual Meeting of Stockholders,
the proxies named in management's proxy for that meeting will be entitled to
exercise their discretionary authority on that proposal unless the Company
receives notice of the matter to be proposed not later than January 30, 2002.
Even if proper notice is received on or prior to January 30, 2002, the proxies
named in management's proxy for that meeting may nevertheless exercise their
discretionary authority with respect to such matter by advising stockholders of
such proposal and how they intend to exercise their discretion to vote on such
matter, unless the stockholder making the proposal solicits proxies with respect
to the proposal to the extent required by Rule 14a-4(c)(2) under the Exchange
Act.
By order of the Board of Directors,
/s/ Barbara J. Kuhl
--------------------------------------
Barbara J. Kuhl
President and Chief Operating Officer,
Corporate Secretary and Treasurer
March 16, 2001
- 14 -
ANNEX A
FIRST BUSEY CORPORATION AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Company, (2) the compliance
by the Company with legal and regulatory requirements and (3) the independence
and performance of the Company's internal and external auditors.
The members of the Audit Committee shall meet the independence and experience
requirements of the SEC and the appropriate Stock Exchanges. The members of the
Audit Committee shall be appointed by the Board.
The Audit Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee. The Audit Committee may request
any officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval.
2. Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices
as well as the adequacy of internal controls that could significantly
affect the Company's financial statements.
3. Review an analysis prepared by management and the independent auditor of
significant financial reporting issues and judgments made in connection
with the preparation of the Company's financial statements.
4. Review with management and, if necessary, the independent auditor the
Company's quarterly financial statements prior to the release of quarterly
earnings.
5. Meet periodically with management to review the Company's major financial
risk exposures and the steps management has taken to monitor and control
such exposures.
6. Review major changes to the Company's auditing and accounting principles
and practices as suggested by the independent auditor, internal auditors or
management.
- 15 -
7. Recommend to the Board the appointment of the independent auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
8. Approve the fees to be paid to the independent auditor.
9. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if so
determined by the Audit Committee, recommend that the Board take
appropriate action to satisfy itself of the independence of the auditor.
10. Evaluate together with the Board the performance of the independent auditor
and, if so determined by the Audit Committee, recommend that the Board
replace the independent auditor.
11. Review the appointment and replacement of the senior internal auditing
executive.
12. Review the significant reports to management prepared by the internal
auditing department and management's responses.
13. Meet with the independent auditor prior to the audit to review the planning
and staffing of the audit.
14. Obtain from the independent auditor assurance that Section 10A of the
Private Securities Litigation Reform Act of 1995 has not been implicated.
15. Obtain reports from management, the Company's senior internal auditing
executive and the independent auditor that the Company's subsidiary
affiliated entities are in conformity with applicable legal requirements
and the Company's Code of Conduct.
16. Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct of the
audit.
17. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the Company's response to that letter. Such review should
include:
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information.
(b) Any changes required in the planned scope of the internal audit.
(c) The internal audit department responsibilities, budget and staffing.
18. Review the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
19. Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations and with the
Company's Code of Conduct.
- 16 -
20. Review with the Company's General Counsel legal matters that may have a
material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators
or governmental agencies.
21. Meet at least annually with the chief financial officer, the senior
internal auditing executive and the independent auditor in separate
executive sessions.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure compliance with laws
and regulations and the Company's Code of Conduct.
CHANGES TO NASDAQ INDEPENDENT DIRECTOR AND AUDIT COMMITTEE REQUIREMENTS
On December 14, 1999, the SEC approved amendments to Nasdaq's independent
director and audit committee listing standards, which Nasdaq proposed in
September following the recommendations of The Blue Ribbon Committee on
Improving the Effectiveness of Corporate Audit Committees.
The purpose of these rule changes is to strengthen the independence and
effectiveness of corporate audit committees, and to provide for accountability
among the company's audit committee, outside directors, and management. These
rule changes apply to companies listed on the Nasdaq National Market and the
Small Cap Market. A summary of the new rules follows:
Independent Directors
- ---------------------
The new rules specify the relationships that disqualify a director from being
considered "independent" for purposes of serving as a member of an issuer's
audit committee. A director will not be considered "independent" if, among other
things, he or she has:
* been employed by the corporation or its affiliates in the current or past
three years;
* accepted any compensation from the corporation or its affiliates in excess
of $60,000 during the previous fiscal year (except for board service,
retirement plan benefits, or non-discretionary compensation);
* an immediate family member who is, or has been in the past three years,
employed by the corporation or its affiliates as an executive officer;
* been a partner, controlling shareholder or an executive officer of any for-
profit business to which the corporation made, or from which it received,
payments (other than those which arise solely from investments in the
corporation's securities) that exceed five percent of the organization's
consolidated gross revenues for that year, or $200,000, whichever is more, in
any of the past three years; or
* been employed as an executive of another entity where any of the company's
executives serve on that entity's compensation committee.
- 17 -
AUDIT COMMITTEE - CHARTER REQUIREMENTS
Companies will be required to adopt a formal written charter that specifies the
scope of its responsibilities and the means by which it carries out those
responsibilities; the outside auditor's accountability to the board and audit
committee; and the audit committee's responsibility to ensure the independence
of the outside auditor.
AUDIT COMMITTEE - STRUCTURE END MEMBERSHIP REQUIREMENTS
The new rules require that audit committees have a minimum of three members and
be comprised of independent directors only. All directors must be able to read
and understand fundamental financial statements, including a company's balance
sheet, income statement, and cash flow statement. At least one director must
have past employment experience in finance or accounting, requisite professional
certification in accounting, or other comparable experience or background,
including a current or past position as a chief executive or financial officer
or other senior officer with financial oversight responsibilities.
Under exceptional and limited circumstances, however, the new rules allow one
non-independent director to serve on the audit committee, provided that the
board determines it to be in the best interests of the corporation and its
shareholders, and the board discloses the reasons for the determination in the
company's next annual proxy statement. Current employees or officers, or their
immediate family members, however, are not able to serve on the audit committee
under this exception.
COMPLIANCE
Companies listed on Nasdaq as of December 14, 1999, and companies that applied
for listing on or before that date, will be provided until June 14, 2000 to
adopt a formal written audit committee charter and until June 14, 2001 to meet
the new audit committee structure and membership requirements. In addition,
issuers that transfer to Nasdaq from another exchange will be afforded the same
grace periods they would have received under their previous market's
implementation schedule. All other companies must meet the new rules upon their
listing on Nasdaq.
- 18 -
SEC Final Rules
- ---------------
* Require independent auditors to review interim financial statements before
a company files its 10-Q
* Require the proxy statement to include a report from the audit committee
stating
(1) whether the audit committee has
(a) reviewed and discussed the audited financial statements with
management
(b) discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61
(c) received disclosures from the auditors regarding the auditors'
independence required by the Independence Standards Board
Standard No. 1, and discussed with the auditors the auditors'
independence.
(2) whether, based upon such review and discussion, the audit committee
recommended to the Board of Directors that the audited financial
statements be included in the company's Form 10-K
* Require a company to disclose in its proxy statement whether the Board of
Directors has adopted a written charter for the audit committee, and if so,
to include a copy of the charter as an appendix to the company's proxy
statement at least once every three years
* Require a company to disclose in its proxy statement whether audit
committee members are "independent" as defined by the relevant securities
exchange or Nasdaq, and disclose certain information regarding any director
on the audit committee who is not "independent"
* Provide a "safe harbor" for the new proxy statement disclosures to protect
companies and their directors from certain liabilities under federal
securities laws
- 19 -
[PROXY CARD]
PROXY--FIRST BUSEY CORPORATION
KNOW ALL MEN BY THESE PRESENTS, THAT I, the undersigned stockholder of First
Busey Corporation (the "Company") having received notice of the Annual Meeting
of Stockholders, do hereby nominate, constitute and appoint, Tom Brown, my true
and lawful attorney and proxy, with full power of substitution, for me and in my
name, place and stead to vote all of the shares of Common Stock without par
value ("Common Stock") of the Company standing in my name on its books on
March 2, 2001 at the Annual Meeting of Stockholders of the Company, to be held
at the Krannert Center for the Performing Arts, 500 South Goodwin Avenue,
Urbana, Illinois, on April 16, 2001 at 7:00 p.m., local time, and at any
postponement or adjournment thereof, with all powers the undersigned would
possess if personally present, as follows:
1. |_| FOR all nominees listed below to serve as directors of the Company
until the next Annual Meeting of Stockholders (except as marked to the
contrary below)
|_| WITHHOLD AUTHORITY to vote for all nominees listed below
Joseph M. Ambrose Linda M. Mills P. David Kuhl
T. O. Dawson Edwin A. Scharlau II V. B. Leister, Jr.
E. Phillips Knox Victor F. Feldman Samuel P. Banks
David C. Thies Douglas C. Mills Barbara J. Kuhl
Kenneth M. Hendren Arthur R. Wyatt
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through that nominee's name.)
2. |_| FOR |_| AGAINST |_| ABSTAIN
Ratification of the appointment of the firm of McGladrey & Pullen, LLP as the
Company's independent auditors for the fiscal year ending December 31, 2001.
To transact such other business as may properly come before the Annual Meeting
or any postponement or adjournment thereof.
This proxy will be voted as directed, or if no instructions are given, it will
be voted "FOR" election of all nominees as Directors of First Busey Corporation
and "FOR" the ratification of McGladrey & Pullen, LLP as the Company's
independent auditors. Also, this proxy will be voted at the Annual Meeting in
accordance with the Board of Directors' recommendations on any other matters
which may come before the Annual Meeting or any postponement or adjournment
thereof.
This proxy is solicited on behalf of the Board of Directors and may be revoked
prior to its exercise.
Your vote is important. Any previously submitted proxies will not be used at
the Annual Meeting. Accordingly, even if you plan to attend the Annual Meeting,
please mark, sign and date this proxy and return it in the enclosed envelope.
----------------------------------------------
----------------------------------------------
Please sign your name or names exactly as they
appear on the stock certificate. Each joint
tenant must sign. When signing as attorney,
administrator, guardian, executor or trustee
or as an officer of a corporation, please give
full title. If more than one trustee, all
should sign.