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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement.
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2)).
[X] Definitive Proxy Statement.
[ ] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Section 240.14a-12
First BancTrust 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)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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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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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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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
[FIRST BANCTRUST CORPORATION LETTERHEAD]
March 21, 2003
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of First BancTrust Corporation. The meeting will be held at the Human Resources
Center located at 118 East Court Street, Paris, Illinois, on Monday, April 21,
2003, at 10:00 a.m., Central Daylight Time. The matters to be considered by
stockholders at the Annual Meeting are described in detail in the accompanying
materials.
The Board of Directors of First BancTrust Corporation has determined
that the matters to be considered at the Annual Meeting are in the best
interests of the Company and its shareholders. For the reasons set forth in the
Proxy Statement, the Board unanimously recommends that you vote "FOR" each
matter to be considered.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. Let me urge you to mark, sign and date your proxy card today
and return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of and interest in First BancTrust Corporation is
appreciated.
Sincerely,
/s/ Terry J. Howard
Terry J. Howard
President and Chief Executive Officer
FIRST BANCTRUST CORPORATION
206 SOUTH CENTRAL AVENUE
PARIS, ILLINOIS 61944
(217) 465-6381
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 21, 2003
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of First
BancTrust Corporation (the "Company") will be held at the Human Resources Center
located at 118 East Court Street, Paris, Illinois, on Monday, April 21, 2003, at
10:00 a.m., Central Daylight Time, for the following purposes, all of which are
more completely set forth in the accompanying Proxy Statement:
(1) To elect three directors for a three-year term and until their
successors are elected and qualified;
(2) To ratify the appointment of BKD, LLP as the Company's
independent public accountants for the year ending December 31,
2003; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof. Except with respect to
procedural matters incident to the conduct of the Annual Meeting,
management is not aware of any other matters which could come
before the Annual Meeting.
The Board of Directors has fixed March 14, 2003 as the voting record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting or at any
such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Mary Ann Tucker
Mary Ann Tucker
Secretary
March 21, 2003
Paris, Illinois
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING,
YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED
BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
FIRST BANCTRUST CORPORATION
-----------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 2003
GENERAL
This Proxy Statement is being furnished to the holders of common stock,
$0.01 par value per share ("Common Stock"), of First BancTrust Corporation
("First BancTrust" or the "Company"), the bank holding company of First Bank &
Trust, S.B. ("First Bank" or the "Bank"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at its Annual Meeting
of Stockholders ("Annual Meeting") to be held at the Human Resources Center
located at 118 East Court Street, Paris, Illinois, on Monday, April 21, 2003, at
10:00 a.m., Central Daylight Time, and at any adjournment thereof, for the
purposes set forth in the Notice of Annual Meeting of Stockholders. This Proxy
Statement is first being mailed to stockholders on or about March 21, 2003.
VOTING RIGHTS
Only stockholders of record at the close of business on March 14, 2003
("Voting Record Date") will be entitled to notice of and to vote at the Annual
Meeting. At such date, there were 1,328,110 shares of Common Stock outstanding
and the Company had no other class of equity securities outstanding.
Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the Annual Meeting. The presence in
person or by proxy of at least a majority of the outstanding shares of Common
Stock entitled to vote is necessary to constitute a quorum at the Annual
Meeting. The persons receiving the greatest number of votes of the Common Stock
shall be elected as directors of the Company. The affirmative vote of a majority
of the total votes cast at the Annual Meeting is required for approval of the
proposal to ratify the appointment of the Company's independent auditors.
Abstentions will be counted for purposes of determining the presence of
a quorum at the Annual Meeting. Because of the required votes, abstentions will
have no effect on the voting for the election of directors or the proposal to
ratify the appointment of the Company's independent auditors. Under rules
applicable to broker-dealers, the election of directors and the proposal to
ratify the appointment of the Company's independent auditors are considered
"discretionary" items upon which brokerage firms may vote in their discretion on
behalf of their client if such clients have not furnished voting instructions.
Thus, there are no proposals to be considered at the Annual Meeting which are
considered "non-discretionary" and for which there will be "broker non-votes."
PROXIES
Shares of Common Stock represented by properly executed proxies, if
such proxies are received in time and not revoked, will be voted in accordance
with the instructions indicated on the proxies. If no contrary instructions are
given, each proxy received will be voted (i) FOR the nominees for director
described herein; (ii) FOR ratification of BKD, LLP as the Company's independent
public accountants for the year ending December 31, 2003; and (iii) upon the
transaction of such other business as may properly come before the meeting, in
accordance with the best judgment of the persons appointed as proxies. Any
stockholder giving a proxy has the power to revoke it at any time before it is
exercised by (i) filing with the Secretary of the Company written notice thereof
(Mary Ann Tucker, Secretary, First BancTrust Corporation, 206 South Central
Avenue, P.O. Box 880, Paris, Illinois 61944); (ii) submitting a duly-executed
proxy bearing a later date; or (iii) appearing at the Annual Meeting and giving
the Secretary notice of his or her intention
to vote in person. Proxies solicited hereby may be exercised only at the Annual
Meeting and any adjournment thereof and will not be used for any other meeting.
BENEFICIAL OWNERSHIP
The following table sets forth information as to the Common Stock
beneficially owned, as of March 14, 2003, by (i) the only persons or entities,
including any "group" as that term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), who or which was known to
the Company to be the beneficial owner of more than 5% of the issued and
outstanding Common Stock, (ii) each director and director nominee of the
Company, (iii) certain named executive officers, and (iv) all directors and
executive officers of the Company and the Bank as a group.
Amount and Nature of Beneficial Percent
Name and Address of Beneficial Owner Ownership as of March 14, 2003(1) of Common Stock
------------------------------------ --------------------------------- ---------------
First BancTrust Corporation 121,357(2) 9.1%
Employee Stock Ownership Plan Trust
206 South Central Avenue
Paris, Illinois 61944
Bay Pond Partners, L.P. 98,700(3) 7.4
75 State Street
Boston, Massachusetts 02109
Gerald R. Forsythe 82,500(4) 6.2
1111 South Willis Avenue
Wheeling, Illinois 60090
Jeffrey S. Halis 100,000(5) 7.5
153 East 53rd Street, 55th Floor
New York, New York 10022
Wellington Management Company, LLP 140,000(6) 10.5
75 State Street
Boston, Massachusetts 02109
Directors and nominees:
Vick N. Bowyer 100 *
David W. Dick 15,616(7) 1.2
Terry J. Howard 33,808(8) 2.5
Terry T. Hutchison 5,966(9) *
James D. Motley 100 *
Joseph R. Schroeder 12,916(10) 1.0
Mary Ann Tucker 5,416(11) *
John W. Welborn 5,944(12) *
Certain Named Executive Officers:
Larry E. Daily 18,009(13) 1.4
Directors and executive officers 176,639(14) 13.3%
of the Company and the Bank as a group
(14 persons)
(Footnotes on following page)
2
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* Amounts to less than 1.0% of the outstanding Common Stock.
(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Exchange Act, a person or entity is considered to
beneficially own shares of Common Stock if the person or entity has or
shares (i) voting power, which includes the power to vote or to direct
the voting of the shares, or (ii) investment power, which includes the
power to dispose or direct the disposition of the shares. Unless
otherwise indicated, a person has sole voting power and sole investment
power with respect to the indicated shares.
(2) The First BancTrust Corporation Employee Stock Ownership Plan Trust
("Trust") was established pursuant to the First BancTrust Corporation
Employee Stock Ownership Plan ("ESOP"). As of the Voting Record Date,
92,329 shares held in the Trust were unallocated, and 29,028 shares held
in the Trust had been allocated to the accounts of participating
employees. Under the terms of the ESOP, the Trustee will generally vote
the allocated shares held in the ESOP in accordance with the instructions
of the participating employees. Unallocated shares held in the ESOP will
generally be voted by the ESOP Trustee in the same proportion for and
against proposals to stockholders as the ESOP participants and
beneficiaries actually vote shares of Common Stock allocated to their
individual accounts, subject in each case to the fiduciary duties of the
ESOP trustee and applicable law. Any allocated shares which either
abstain on the proposal or are not voted will generally be disregarded in
determining the percentage of stock voted for and against each proposal
by the participants and beneficiaries.
(3) Based on a Schedule 13G amended joint filing on February 12, 2003 made on
behalf of Bay Pond Partners, L.P. ("Bay Pond"), a Delaware limited
partnership, Wellington Hedge Management, LLC ("WHML"), a Massachusetts
limited liability company which is the sole general partner of Bay Pond,
and Wellington Hedge Management, Inc. ("WHMI"), a Massachusetts
corporation which is the managing member of WHML. Bay Pond, WHML and WHMI
each beneficially own 98,700 shares and have shared voting and
dispositive power.
(4) Based on a Schedule 13D filing on May 6, 2002 made on behalf of Gerald R.
Forsythe. Mr. Forsythe has the sole power to vote and dispose of all of
the 82,500 shares.
(5) Based on a Schedule 13G filing on May 16, 2001 made on behalf of Jeffrey
S. Halis. 10,000 shares are owned by Mr. Halis. 10,000 shares are owned
jointly by Mr. Halis and Lorraine Halis, his mother. 65,000 shares are
owned by Tyndall Partners, L.P., a Delaware limited partnership
("Tyndall"). 15,000 shares are owned by Tyndall Institutional Partners,
L.P., a Delaware limited partnership ("Tyndall Institutional"). Pursuant
to the Agreement of Limited Partnership of each of Tyndall and Tyndall
Institutional, Mr. Halis possesses sole power to vote and direct the
disposition of all the shares of Common Stock owned by each of Tyndall
and Tyndall Institutional, respectively. Mr. Halis' interest in the
Common Stock held by Tyndall and Tyndall Institutional is limited to the
extent of his pecuniary interest, if any, in Tyndall and Tyndall
Institutional, respectively. Mr. Halis possesses shared power to vote and
direct the disposition of the shares of Common Stock owned jointly by him
and Lorraine Halis.
(6) Based on a Schedule 13G amended filing on January 10, 2003 made on behalf
of Wellington Management Company, LLP ("WMC"), WMC, in its capacity as
investment adviser, may be deemed to beneficially own 140,000 shares
which are held of record by clients of WMC. WMC has shared voting and
dispositive power over 110,600 and 140,000 shares, respectively. Bay Pond
is a client of WMC.
(7) Includes 6,000 shares held by Mr. Dick's wife, 300 shares held by Mr.
Dick's wife's IRA, 200 shares held by Mr. Dick's son and 2,916 shares
allocated under the 2002 Recognition and Retention Plan ("Recognition
Plan") which Mr. Dick has voting power.
(Footnotes continued on following page)
3
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(8) Includes 13,195 shares held by First Bank's 401(k) Plan, 1,613 shares
held by the ESOP for the account of Mr. Howard, 12,000 shares allocated
under the Recognition Plan which Mr. Howard has voting power, 4,800
shares held in Mr. Howard's IRA, 2,000 shares held by Mr. Howard's wife's
IRA and 200 shares owned jointly with Mr. Howard's wife, with whom voting
and dispositive power is shared.
(9) Includes 2,500 shares held in Mr. Hutchison's IRA, 50 shares held by Mr.
Hutchison's daughter and 2,916 shares allocated under the Recognition
Plan which Mr. Hutchison has voting power.
(10) Includes 6,000 shares owned jointly with Mr. Schroeder's wife, with whom
voting and dispositive power is shared, 2,500 shares held in Mr.
Schroeder's IRA, 1,500 shares held by Mr. Schroeder's children and 2,916
shares allocated under the Recognition Plan which Mr. Schroeder has
voting power. Does not include 2,000 shares held in the name of the law
firm of Bennett, Schroeder & Wieck (of which Mr. Schroeder is a partner)
for which Mr. Schroeder disclaims beneficial ownership.
(11) Includes 500 shares held in trust for Ms. Tucker and 2,916 shares
allocated under the Recognition Plan which Ms. Tucker has voting power.
Ms. Tucker will not stand for reelection upon the expiration of her term
as a director at the Annual Meeting.
(12) Includes 3,028 shares held in Mr. Welborn's wife's IRA and 2,916 shares
allocated under the Recognition Plan which Mr. Welborn has voting power.
(13) Includes 15,111 shares held by First Bank's 401(k) Plan, 1,098 shares
held by the ESOP for the account of Mr. Daily, 500 shares allocated under
the Recognition Plan which Mr. Daily has voting power, 290 shares held in
Mr. Daily's IRA, 210 shares held in Mr. Daily's wife's IRA and 800 shares
held by Mr. Daily's children.
(14) Also includes 7,018, 64,064 and 32,996 shares which are held by the ESOP,
the 401(k) Plan and the Recognition Plan, respectively, which have been
allocated to the accounts of participants and, consequently, will be
voted at the Annual Meeting by direction of such participants.
ELECTION OF DIRECTORS
The Certificate of Incorporation and Amended and Restated Bylaws of the
Company provide that the Board of Directors shall be divided into three classes
as nearly equal in number as possible, and that the members of each class shall
be elected for terms of three years and until their successors are elected and
qualified, with one of the three classes of directors to be elected each year.
At the Annual Meeting, stockholders of the Company will be asked to elect
three directors for a three-year term and until their successors are elected and
qualified. The three nominees for election as directors were selected by the
Nominating Committee of the Board of Directors. There are no arrangements or
understandings between the persons named and any other person pursuant to which
such person was selected as a nominee for election as a director at the Annual
Meeting, and no director or nominee for director is related to any other
director or executive officer of the Company by blood, marriage or adoption.
If any person named as nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for any replacement nominee or nominees recommended by the Board of Directors of
the Company. At this time, the Board of Directors knows of no reason why any of
the nominees may not be able to serve as a director if elected.
Section 4.15 of the Company's Amended and Restated Bylaws governs
nominations for election to the Board of Directors and requires all nominations
for election to the Board of Directors, other than those made by or at the
direction
4
of the Board, to be made pursuant to timely notice in writing to the Secretary
of the Company, as set forth in the Amended and Restated Bylaws. To be timely,
with respect to an election to be held at an annual meeting of stockholders, a
stockholders' notice must be delivered to or received by the Secretary not later
than 120 days prior to the anniversary date of the mailing of proxy materials by
the Company in connection with the immediately preceding annual meeting of
stockholders of the Company. No notice has been received by the Company in
connection with the Annual Meeting. Each written notice of a stockholder
nomination must set forth certain information specified in the Amended and
Restated Bylaws. The presiding officer of the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the procedures set
forth in the Amended and Restated Bylaws.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR AND CONTINUING DIRECTORS
The following tables present information concerning each nominee for
director and each director whose term continues and reflects his tenure as a
director of the Company and his principal occupation during the past five years.
NOMINEES FOR DIRECTOR FOR A THREE-YEAR TERM EXPIRING IN 2006
Position with the Company and Director
Name Age Principal Occupation During the Past Five Years Since(1)
------------------------ ----- ----------------------------------------------- --------
Joseph R. Schroeder 53 Director. Attorney in private practice with the law firm 1997
of Bennett, Schroeder & Wieck, Marshall, Illinois.
James D. Motley 58 Director. Self-employed owner of the accounting firm 2002
James D. Motley, C.P.A., Paris, Illinois.
Vick N. Bowyer 51 Director Nominee. Principal and co-owner of --
Linsco/Private Ledger Branch, a registered broker-
dealer, Marshall, Illinois, since April 2000. Financial
advisor and principal, Raymond James Financial, a
registered broker-dealer, at Citizens National Bank of
Paris, Illinois, from January 1996 to April 2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION
OF THE ABOVE NOMINEES FOR DIRECTOR.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
DIRECTORS WITH TERMS EXPIRING IN 2004
Position with the Company and Director
Name Age Principal Occupation During the Past Five Years Since(1)
---------------------------- --- -------------------------------------------------- ----------
Terry T. Hutchison 50 Chairman of the Board. Self-employed Business 1989
Consultant, Paris, Illinois since July 2002. Manager
and owner of Parkway Furniture Co., Paris, Illinois,
from November 1976 to June 2002.
John W. Welborn 57 Director. Project Manager, Garmong Design since 1995
February 2002. Facilities Manager, TRW, Inc.,
Marshall, Illinois from November 1971 to June 2001.
5
DIRECTORS WITH TERMS EXPIRING IN 2005
Position with the Company and Director
Name Age Principal Occupation During the Past Five Years Since(1)
---------------------------- ----- ------------------------------------------------- ----------
David W. Dick 53 Director. Insurance Agent for Country Companies 1996
Insurance, Bloomington, Illinois.
Terry J. Howard 55 Director, President and Chief Executive Officer of the 2000
Company since November 2000. Executive Vice
President of First Bank from May 1988 to June 1999.
President and Chief Executive Officer of First Bank
since June 1999, Director since November 2000.
------------------
(1) Includes service with First Bank prior to the Bank's conversion to the
holding company form.
DIRECTOR EMERITUS
Effective April 2002, Robert E. Sprague became a Director Emeritus of
First Bank for a one year term and also serves as a public relations officer of
the Company. Mr. Sprague was Chairman of the Board of the Company from November
2000 to April 2002 and Chairman of the Board of First Bank from April 1995 to
April 2002 having served as a director of First Bank since January 1990. Mr.
Sprague has been a dentist in Paris, Illinois since August 1952.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following table sets forth certain information with respect to the
executive officers of the Company who are not also directors of the Company. All
executive officers of the Company are elected annually by the Board of Directors
and shall serve at the discretion of the Board of Directors.
Position with the Company and
Name Age Principal Occupation During the Past Five Years
------------------------ ----- ----------------------------------------------------
Ellen M. Litteral 45 Chief Financial Officer and Treasurer of the Company since
November 2000. Senior Vice President and Controller of First
Bank. Controller of First Bank since 1990, Vice President of
First Bank from March 2000 to April 2002 and Senior Vice
President of First Bank since April 2002.
Jack R. Franklin 50 Vice President of the Company since November 2000. Senior
Vice President - Operations and Marketing of First Bank.
Assistant Vice President - Consumer Lending of First Bank
from 1995 until March 1998, Assistant Vice President -
Consumer Lending/Marketing of First Bank from March 1998
until July 1999, Vice President - Operations and Marketing of
First Bank from July 1999 until April 2002 and Senior Vice
President-Operations and Marketing of First Bank since April
2002.
6
Position with the Company and
Name Age Principal Occupation During the Past Five Years
------------------------ ----- ------------------------------------------------
David F. Sullivan 51 Vice President of the Company since April 2002. Senior Vice
President - Lending of First Bank since April 2002. President
of The Edgar County Bank & Trust Company, Paris, Illinois,
from February 2000 to March 2002 and Senior Lender from
December 1998 to March 2002.
Larry W. Strohm 49 Vice President of the Company since April 2002. Senior Vice
President - Branch Manager of First Bank since April 2002.
Vice President - Branch Manager of First Bank from January 1990
to April 2002.
DIRECTORS' COMPENSATION
Each director of the Company and the Bank receives $250 for Board
meetings held, but only if attended, except Mr. Howard who receives no directors
fees from First Bank. Each director of the Company receives a quarterly
compensation of $1,250, whether or not the meeting(s) are attended except the
Chairman of the Board of the Company receives a total of $1,562.50 quarterly.
Each director of the Bank also receives a quarterly compensation of $1,250,
whether or not they attend meeting(s) except the Chairman receives a total of
$1,562.50 quarterly. Each director of the Company and First Bank receives $250
for each committee meeting attended. If additional Board meetings are held,
directors receive additional compensation of $250 per meeting, but only if
attended. The Company has a defined-benefit deferred director fee plan covering
certain directors whereby each director may elect to defer all or a portion of
their annual fees. A First Bank director emeritus receives $500 each month
whether or not meetings are attended. Mr. Sprague, Director Emeritus, receives
an additional $500 per month retainer as a public relations officer.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Regular meetings of the Board of Directors of the Company are held on a
quarterly basis and special meetings of the Board of Directors of the Company
are held from time-to-time as needed. There were 14 meetings of the Board of
Directors of the Company held during the year ended December 31, 2002. No
director attended fewer than 75% of both the aggregate total number of meetings
of the Board of Directors of the Company held during 2002, and the total number
of meetings held by all committees of the Board on which the director served
during such year.
The Board of Directors of the Company has a separate Executive Committee,
Compensation Committee, Nominating Committee and Audit Committee.
The Executive Committee is authorized to act with the same authority as
the Board of Directors between meetings of the Board. The Executive Committee,
currently composed of Messrs. Hutchison, Howard, Welborn and Motley, met once
during 2002.
The Compensation Committee makes recommendations regarding the
compensation of the Chief Executive Officer to the Board of Directors. The
Compensation Committee, currently composed of Messrs. Dick, Welborn, Schroeder
and Motley, met nine times during 2002.
The Nominating Committee nominates candidates to the Board of Directors.
The Nominating Committee, currently composed of Messrs. Dick, Welborn and
Hutchison met three times during 2002.
The Audit Committee reviews the Company's records and affairs to
determine its financial condition, reviews the Company's systems of internal
control with management and the independent auditors, and monitors the Company's
7
adherence in accounting and financial reporting to generally accepted accounting
principles. The Audit Committee, currently composed of Messrs. Welborn,
Hutchison and Motley, met five times during 2002. The members are independent as
defined in Rule 4200(a)(14) of the listing standards of the Nasdaq Stock Market.
In March 2001, the Board of Directors adopted an Audit Committee Charter.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed the audited financial
statements with management. The Audit Committee has discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 "Communication with Audit Committees," as may be
modified or supplemented. The Audit Committee has received the written
disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1, as may be modified or supplemented,
and has discussed with the independent accountant, the independent accountant's
independence. Based on the review and discussions referred to above in this
report, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 2002 for filing with the SEC.
John W. Welborn
Terry T. Hutchison
James D. Motley
EXECUTIVE COMPENSATION
SUMMARY
The following table sets forth a summary of certain information
concerning the compensation awarded to or paid by the Company or its
subsidiaries for services rendered in all capacities during the last three
fiscal years to the President and Chief Executive Officer and the other
executive officer whose total annual salary and bonus exceeded $100,000 in 2002.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------
AWARDS
--------------------------
ANNUAL COMPENSATION(2) RESTRICTED SECURITIES
NAME AND ---------------------- STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS AWARDS(3)(4) OPTIONS(5) COMPENSATION(6)
--------------------------------------------------------------------------------------------------------------------------------
Terry J. Howard 2002 $ 110,250 $19,829 $192,000 -- $29,542
President and Chief 2001 107,500 8,976 -- -- 13,010
Executive Officer 2000 105,000 10,251 -- -- 4,387
--------------------------------------------------------------------------------------------------------------------------------
Larry E. Daily 2002 $ 74,850 $34,790(7) $ 8,000 -- $10,760
Vice President - Commercial 2001 73,500 26,649(7) -- -- 5,686
Lending 2000 73,500 25,584(7) -- -- 2,940
--------------------------------------------------------------------------------------------------------------------------------
(Footnotes on following page)
8
-----------------
(1) Includes a deferral of 5% of Mr. Howard's salary in years 2002, 2001 and
2000.
(2) Does not include amounts attributable to miscellaneous benefits received
by the named executive officer. In the opinion of management of the
Company, the costs to the Company of providing such benefits to the named
executive officer during the year ended December 31, 2002 did not exceed
the lesser of $50,000 or 10% of the total of annual salary and bonus
reported for such individual.
(3) Reflects the value of shares of restricted stock on the date of grant
awarded pursuant to the Recognition Plan. Such restricted stock vests
over five years, 20% per year from the date of the grant. Dividends paid
on the restricted common stock are held in trust and paid to the
recipient when the restricted stock is earned.
(4) As of December 31, 2002, Messrs. Howard and Daily had 12,000 and 500
shares of unearned restricted stock, respectively, pursuant to the
Recognition Plan, which had fair market values of $200,160 and $8,340,
respectively, at December 31, 2002.
(5) At December 31, 2002, no options to acquire shares of Common Stock had
been granted.
(6) During the year ended December 31, 2002, consists of estimated
allocations under the ESOP of $15,936 and $10,640, respectively. Mr.
Howard also received $7,750 in directors fees from the Company and $365
in above- market interest on deferred compensation.
(7) During the years 2002, 2001 and 2000, includes incentive based
compensation of $33,320, $24,799 and $23,100, respectively.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Company's Common Stock to
file reports of ownership and changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. Officers, directors and 10% stockholders
are required by regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that during 2002, all Section 16(a) filing
requirements applicable to its officers and directors were complied with.
EMPLOYMENT AGREEMENT
First BancTrust and First Bank, as employers, have entered into an
employment agreement with Terry J. Howard pursuant to which the employers have
agreed to employ Mr. Howard as President and Chief Executive Officer of First
BancTrust and First Bank for a term of two years. The agreement provides that
Mr. Howard will initially be paid a salary level of $107,500. Mr. Howard's
compensation and expenses shall be paid by First BancTrust and First Bank in the
same proportion as the time and services actually expended by the executive on
behalf of each employer. The employment agreement will be reviewed annually. The
term of Mr. Howard's employment agreement shall be extended each year for a
successive additional one-year period upon the approval of the employers' Boards
of Directors, unless either party elects, not less than 30 days prior to the
annual anniversary date, not to extend the employment term.
The employment agreement shall be terminable with or without cause by the
employers. Mr. Howard shall have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary termination
or termination by the employers for cause, disability or retirement. The
agreement provides for certain benefits in the event of Mr. Howard's death. In
the event that
9
(1) either executive terminates his employment because the
employers either fail to comply with any material provision of the
employment agreement or change the executive's title or duties, or
(2) the employment agreement is terminated by the employers other
than for cause, disability, retirement or death or by the executive as a
result of certain adverse actions which are taken with respect to the
executive's employment following a change in control of First BancTrust,
as defined,
then the executive will be entitled to a cash severance amount equal to three
times his average annual compensation for the last five calendar years (or such
shorter period that he has worked with First Bank), plus the continuation of
certain miscellaneous fringe benefits, subject to reduction pursuant to Section
280G of the Internal Revenue Code as set forth below in the event of a change in
control.
A change in control is generally defined in the employment agreement to
include any change in control of First BancTrust required to be reported under
the federal securities laws, as well as (1) the acquisition by any person of 20%
or more of First BancTrust's outstanding voting securities and (2) a change in a
majority of the directors of First BancTrust during any three-year period
without the approval of at least two-thirds of the persons who were directors of
First BancTrust at the beginning of such period.
The employment agreement provides that, in the event any of the payments
to be made thereunder or otherwise upon termination of employment are deemed to
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code, then such payments and benefits shall be reduced by the
minimum necessary to result in the payments not exceeding three times the
recipient's average annual compensation from the employers which was includable
in the recipient's gross income during the most recent five taxable years. As a
result, none of the severance payments will be subject to a 20% excise tax, and
the employers will be able to deduct such payments as compensation expense for
federal income tax purposes. Based upon compensation levels at December 31,
2002, if a change in control was to occur, the severance payment would be
approximately $353,646 for Mr. Howard.
Although the above-described employment agreement could increase the cost
of any acquisition of control, First BancTrust and First Bank do not believe
that the terms thereof would have a significant anti-takeover effect.
401(k) PLAN
First Bank has a 401(k) Plan in which substantially all employees may
participate. First Bank may contribute to the 401(k) Plan at the discretion of
the Board of Directors.
VOLUNTARY EMPLOYEE'S BENEFIT ASSOCIATION
First Bank also maintains a voluntary employee's benefit association for
the benefit of substantially all of its full-time employees. Benefits available
under the voluntary employee's benefit association include major medical, life,
accidental death and dismemberment, and disability insurance. These benefits are
available to all employees who have attained a minimum age and length of
service. The voluntary employee's benefit association is funded through
voluntary contributions from employees and contributions from First Bank.
EMPLOYEE STOCK OWNERSHIP PLAN
First BancTrust has established an ESOP for employees of First BancTrust
and First Bank. Full-time employees who have been credited with at least 1,000
hours of service during a 12-month period and who have attained age 21 are
eligible to participate in our employee stock ownership plan.
The ESOP borrowed funds from First BancTrust to purchase 121,670 shares
of Common Stock in the Bank's conversion from mutual to stock form. The loan to
our ESOP will be repaid principally from our contributions to our ESOP over a
period of eight years, and the collateral for the loan will be the Common Stock
purchased by our ESOP. First BancTrust may, in any plan year, make additional
discretionary contributions for the benefit of plan participants
10
in either cash or shares of common stock, which may be acquired through the
purchase of outstanding shares in the market or from individual stockholders,
upon the original issuance of additional shares by First BancTrust or upon the
sale of treasury shares by First BancTrust. Such purchases, if made, would be
funded through additional borrowings by our ESOP or additional contributions
from First BancTrust. The timing, amount and manner of future contributions to
our ESOP will be affected by various factors, including prevailing regulatory
policies, the requirements of applicable laws and regulations and market
conditions. The ESOP is subject to the requirements of the Employee Retirement
Income Security Act of 1974, and the regulations of the Internal Revenue Service
and the Department of Labor thereunder.
2002 STOCK OPTION PLAN
An aggregate of 152,087 shares of Common Stock were reserved under the
2002 Stock Option Plan. At December 31, 2002, no options to acquire shares of
Common Stock had been granted.
2002 RECOGNITION AND RETENTION PLAN AND TRUST AGREEMENT
The Recognition Plan acquired 60,835 shares of Common Stock. At December
31, 2002, 34,246 shares had been granted to directors and executive officers and
none of such shares had vested. Under the Recognition Plan, shares are awarded
as restricted stock which vest over a period specified by the Board or the
Compensation Committee. The restricted stock granted will vest over a five-year
period.
DEFERRED COMPENSATION PLAN
The Deferred Compensation Plan allows those granted shares under the
Recognition Plan to defer the receipt of vested shares. At December 31, 2002, no
vested shares had been deferred.
11
PERFORMANCE GRAPH
The following graph compares the cumulative total returns for the Common
Stock of the Company, the SNL Less Than $250 Million Thrift Index and the Nasdaq
Total Return Index since the Company's initial public offering in April 2001.
All of these cumulative returns are computed assuming the reinvestment of
dividends at the frequency with which dividends were paid during the period.
--------------------------------------
FIRST BANCTRUST CORPORATION
--------------------------------------
[TOTAL RETURN PERFORMANCE GRAPH]
PERIOD ENDING
----------------------------------------------------------------------
Index 04/19/01 06/30/01 12/31/01 06/30/02 12/31/02
----------------------------------------------------------------------
First BancTrust Corporation 100.00 115.28 133.01 146.37 149.81
NASDAQ - Total US* 100.00 99.48 89.73 67.77 62.03
SNL <$250M Thrift Index 100.00 108.40 122.90 141.92 153.15
*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago, 2003. Used with permission. All rights
reserved. crsp.com
SNL FINANCIAL LC (434) 977-1600
(C) 2002
12
INDEBTEDNESS OF MANAGEMENT
In accordance with applicable federal laws and regulations, First Bank
offers mortgage loans to its directors, officers and full-time employees for the
financing of their primary residences as well as various consumer loans. These
loans are generally made on substantially the same terms as those prevailing at
the time for comparable transactions with non-affiliated persons. It is the
belief of management that these loans neither involve more than the normal risk
of collectibility nor present other unfavorable features.
Section 22(h) of the Federal Reserve Act generally provides that any
credit extended by a savings institution to its executive officers, directors
and, to the extent otherwise permitted, principal stockholder(s), or any related
interest of the foregoing, must (i) be on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions by the savings association with non-affiliated parties;
(ii) be pursuant to underwriting standards that are no less stringent than those
applicable to comparable transactions with non-affiliated parties; (iii) not
involve more than the normal risk of repayment or present other unfavorable
features; and (iv) not exceed, in the aggregate, the institution's unimpaired
capital and surplus, as defined.
As of December 31, 2002, three directors and executive officers of the
Company had aggregate loan balances in excess of $60,000, which amounted to
$231,124 in the aggregate. All such loans were made by First Bank in the
ordinary course of business and were not made with favorable terms nor did they
involve more than the normal risk of collectibility.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
GENERAL
The Audit Committee has appointed BKD, LLP, as independent auditors for
the Company for the year ending December 31, 2003, and the Board of Directors
has directed that the selection of auditors be submitted for ratification by the
stockholders at the Annual Meeting.
The Company has been advised by BKD that neither the firm nor any of
its associates has any relationship with the Company or its subsidiaries other
than the usual relationship that exists between independent public accountants
and clients. BKD will have representatives at the Annual Meeting who will have
an opportunity to make a statement, if they so desire, and will be available to
respond to appropriate questions.
AUDIT FEES
The aggregate amount of the fees billed by BKD for its audit of the
Company's annual financial statements for 2002 and its reviews of the Company's
unaudited interim financial statements included in reports filed by the Company
under the Exchange Act during the year was $74,900.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION
BKD did not provide any services to the Company for financial
information systems design and implementation during 2002.
ALL OTHER FEES
The aggregate amount of the fees billed by BKD for all other services
rendered by it to the Company during 2002 was $23,300. These services consisted
primarily of tax and other professional services.
The Audit Committee has considered the compatibility of the non-audit
services provided to the Company by BKD in 2002 on the independence of BKD from
the Company in evaluating whether to appoint BKD to perform the audit of the
Company's financial statements for the year ending December 31, 2003.
13
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF BKD, LLP, AS INDEPENDENT AUDITORS FOR THE YEAR ENDING
DECEMBER 31, 2003.
OTHER MATTERS
Management is not aware of any business to come before the Annual
Meeting other than those matters described in this Proxy Statement. However, if
any other matters should properly come before the Annual Meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Company. The
Company has retained Illinois Stock Transfer Company to assist in the
solicitation of proxies. The fee arrangement with such firm is reimbursement for
out-of-pocket expenses. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy materials to the beneficial owners of the Common Stock. In
addition to solicitations by mail, directors, officers and employees of the
Company may solicit proxies personally or by telephone without additional
compensation.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
solicitation materials to be used in connection with the next Annual Meeting of
Stockholders of the Company, must be received at the principal executive offices
of the Company, 206 South Central Avenue, P.O. Box 880, Paris, Illinois 61944,
Attention: Secretary, no later than November 22, 2003. If such proposal is in
compliance with all of the requirements of Rule 14a-8 promulgated under the
Exchange Act, it will be included in the Company's Proxy Statement and set forth
on the form of proxy issued for the next annual meeting of stockholders. It is
urged that any such proposals be sent by certified mail, return receipt
requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Section 2.14 of the Company's
Bylaws, which provides that to be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, or (b)
otherwise properly brought before the meeting by a stockholder. For business to
be properly brought before an annual meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Company. To be timely, a stockholder's notice must be delivered to, or mailed
and received at, the principal executive offices of the Company not later than
120 days prior to the anniversary date of the mailing of proxy materials by the
Company in connection with the immediately preceding annual meeting of
stockholders of the Company, or not later than November 22, 2003 in connection
with the next annual meeting of stockholders of the Company. A stockholder's
notice must set forth, as to each matter the stockholder proposes to bring
before an annual meeting, (a) a brief description of the business desired to be
brought before the annual meeting and (b) certain other information set forth in
the Bylaws. No stockholder proposals have been received by the Company in
connection with the Annual Meeting.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
A copy of the Company's Annual Report to Stockholders for the year
ended December 31, 2002 accompanies this proxy statement.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB (EXCLUDING
EXHIBITS) FILED WITH THE SEC UNDER THE EXCHANGE ACT FOR THE YEAR ENDED DECEMBER
31, 2002. UPON WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY SUCH STOCKHOLDER
A COPY OF THE EXHIBITS TO THE ANNUAL REPORT ON FORM 10-KSB FOR A CHARGE OF $0.25
PER PAGE. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO FIRST BANCTRUST
CORPORATION, 206 SOUTH CENTRAL AVENUE, P.O. BOX 880, PARIS, ILLINOIS 61944,
ATTENTION: SECRETARY. THE ANNUAL REPORT ON FORM 10-KSB IS NOT A PART OF THIS
PROXY STATEMENT.
14
FIRST BANCTRUST CORPORATION REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
BANCTRUST CORPORATION (THE "COMPANY") FOR USE ONLY AT THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON APRIL 21, 2003 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of the Company,
or any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Human Resources Center located at 118 East Court
Street, Paris, Illinois, on Monday, April 21, 2003, at 10:00 a.m., Central Time,
or at any adjournment thereof, with all the powers that the undersigned would
possess if personally present, as indicated below.
1. Election of Directors
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary.) listed.
Nominees for three-year term: Joseph R. Schroeder, James D. Motley and Vick N.
Bowyer.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
2. Proposal to ratify the appointment of BKD, LLP as the Company's
independent auditors for the year ending December 31, 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[Reverse of card]
In their discretion, the proxies are authorized to vote with respect to
the election of any person as a director if the nominee is unable to serve or
for good cause will not serve, matters incident to the conduct of the meeting,
and upon such other matters as may properly come before the meeting.
The Board of Directors recommends that you vote FOR the nominees for
director listed on the reverse side hereof and FOR the proposal to ratify the
independent auditors for 2003. You are encouraged to specify your choices by
marking the appropriate boxes on the reverse side; however, you need not mark
any boxes if you wish to vote in accordance with the Board of Directors'
recommendations. This proxy may not be voted for any person who is not a nominee
of the Board of Directors of the Company. THIS PROXY MAY BE REVOKED AT ANY TIME
BEFORE IT IS EXERCISED.
SHARES OF COMMON STOCK OF THE COMPANY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS AND FOR THE PROPOSAL TO RATIFY THE
INDEPENDENT AUDITORS FOR 2003, AND OTHERWISE AT THE DISCRETION OF THE PROXIES.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders of the Company called for April 21, 2003, a Proxy
Statement for the Annual Meeting and the 2002 Annual Report to Stockholders.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
Dated:
-----------------------------
Signature:
-------------------------
Signature:
-------------------------
PLEASE SIGN EXACTLY AS YOUR NAME(S)
APPEAR(S) ON THIS PROXY. ONLY ONE
SIGNATURE IS REQUIRED IN CASE OF A
JOINT ACCOUNT. WHEN SIGNING AS AN
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED
PERSON.