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. )
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[ ] 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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CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
FIRST BANCTRUST CORPORATION
101 SOUTH CENTRAL AVENUE
P.O. BOX 880
PARIS, IL 61944
(217) 465-6381
March 23, 2007
Dear Stockholder:
I am pleased to invite you to attend the First BancTrust Corporation's 2007
annual meeting of stockholders on Monday, April 23, 2007. We will hold the
meeting at 10:00 a.m. at the Human Resources Center, 118 East Court Street,
Paris, Illinois.
On the page following this letter, you will find the Notice of Meeting
which lists the matters to be considered at the meeting. Following the Notice of
Meeting is the proxy statement which describes these matters and provides you
with additional information about our Company. Also enclosed you will find the
Company's 2006 annual report and your proxy card, which allows you to vote on
these matters.
Your vote is important. A majority of the common stock must be represented,
either in person or by proxy, to constitute a quorum for the conduct of
business. PLEASE COMPLETE AND MAIL IN YOUR PROXY CARD PROMPTLY, EVEN IF YOU PLAN
TO ATTEND THE MEETING. You can attend the meeting and vote in person, even if
you have sent in a proxy card.
The Board of Directors recommends that stockholders vote FOR each of the
proposals stated in the proxy statement.
The rest of the Board and I look forward to seeing you at the meeting.
Whether or not you can attend, we greatly appreciate your cooperation in
returning the proxy card.
Sincerely,
----------------------------------------
Terry J. Howard
President and Chief Executive Officer
1
FIRST BANCTRUST CORPORATION
101 SOUTH CENTRAL AVENUE
P.O. BOX 880
PARIS, IL 61944
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME.......................... 10:00 a.m., local time, on Monday, April 23,
2007
PLACE......................... The Human Resources Center
118 East Court Street Paris,
Illinois
ITEMS OF BUSINESS............. (1) To elect two members of the Board of
Directors for three-year terms.
(2) To ratify the selection of BKD, LLP as
independent auditors of the Company for
the 2007 fiscal year.
(3) To transact such other business as may
properly come before the Meeting.
ANNUAL REPORT................. Our 2006 annual report, which is not a part of
the proxy soliciting material, is enclosed.
RECORD DATE................... You can vote if you are a stockholder of record
on March 9, 2007.
QUORUM........................ A majority of the shares of common stock must
be represented at the meeting. If there are
insufficient shares, the meeting may be
adjourned.
March 23, 2007
----------------------------------------
David W. Dick, Corporate Secretary
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TABLE OF CONTENTS
SOLICITATION AND VOTING.................................................... 4
Stockholders Entitled to Vote........................................... 4
Voting Procedures....................................................... 4
Voting Procedures for Shares in the Company's 401(k) Plan or ESOP....... 5
Required Vote........................................................... 5
Revoking a Proxy........................................................ 5
List of Stockholders.................................................... 5
Cost of Proxy Solicitation.............................................. 6
Inspector of Election................................................... 6
Other Matters........................................................... 6
GOVERNANCE OF THE COMPANY.................................................. 6
Role and Composition of the Board of Directors.......................... 6
The Executive Committee................................................. 7
The Audit Committee..................................................... 7
Audit Committee Financial Expert........................................ 7
The Nominating Committee................................................ 7
The Compensation Committee.............................................. 8
Code of Ethics.......................................................... 9
Stockholder Communications with the Board............................... 9
ITEM 1. ELECTION OF DIRECTORS.............................................. 9
NOMINEES WHOSE TERMS WILL EXPIRE IN 2010................................ 10
CONTINUING DIRECTORS WITH TERMS EXPIRING 2008........................... 10
CONTINUING DIRECTORS WITH TERMS EXPIRING 2009........................... 11
ITEM 2. RATIFICATION OF AUDITORS........................................... 11
Audit Fees.............................................................. 11
Audit Related Fees...................................................... 11
Tax Fees................................................................ 12
All Other Fees.......................................................... 12
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES FOR DIRECTORS, MOST HIGHLY
COMPENSATED EXECUTIVE OFFICERS AND ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP.............................................................. 13
SECURITY OWNERSHIP OF STOCKHOLDER HOLDING 5% OR MORE....................... 14
COMPENSATION DISCUSSION AND ANALYSIS....................................... 15
Employment Agreements................................................... 19
401(k) Plan............................................................. 20
Voluntary Employee's Benefit Association................................ 20
Employee Stock Ownership Plan and Trust................................. 20
2002 Stock Option Plan.................................................. 20
2002 Recognition and Retention Plan..................................... 21
Deferred Compensation Plan.............................................. 21
Option Grants in 2006................................................... 21
Termination/Change-in-Control Payments.................................. 22
Directors' Compensation................................................. 23
INTERLOCKS AND RELATED PARTY TRANSACTIONS.................................. 24
Transactions With Certain Related Persons............................... 24
Compensation Committee Interlocks and Insider Participation............. 25
COMPENSATION COMMITTEE REPORT.............................................. 25
AUDIT COMMITTEE REPORT..................................................... 25
COMPLIANCE WITH SECTION 16................................................. 26
STOCKHOLDER PROPOSALS...................................................... 26
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FIRST BANCTRUST CORPORATION
101 SOUTH CENTRAL AVENUE
P.O. BOX 880
PARIS, IL 61944
SOLICITATION AND VOTING
We are sending you this Proxy Statement and the enclosed proxy card because
the Board of Directors of First BancTrust Corporation (the "Company" "we" or
"us") is soliciting your proxy to vote at the 2007 annual meeting of
Stockholders (the "Annual Meeting"). This Proxy Statement summarizes the
information you need to know to vote at the Annual Meeting.
You are invited to attend our Annual Meeting on April 23, 2007 beginning at
10:00 a.m., local time. The Annual Meeting will be held at the Human Resources
Center, 118 East Court Street, Paris, Illinois.
This Proxy Statement and the enclosed form of proxy are being mailed
starting on or about March 23, 2007.
STOCKHOLDERS ENTITLED TO VOTE
Holders of record of common stock of the Company at the close of business
on March 9, 2007 are entitled to receive this notice. Each share of common stock
of the Company is equal to one vote.
There is no cumulative voting at the Annual Meeting.
As of the record date, there were 2,293,400 common shares issued and
outstanding.
VOTING PROCEDURES
Unless you hold your shares in the Company's Retirement Savings Plan (the
"401(k) Plan") or the Employee Stock Ownership Plan and Trust (the "ESOP"), you
can vote on matters to come before the meeting in one of two ways:
- you can come to the Annual Meeting and cast your vote there; or
- you can vote by signing and returning the enclosed proxy card. If
you do so, the individuals named as proxies on the card will vote
your shares in the manner you indicate.
You may also choose to vote for all of the nominees for Director and each
proposal by simply signing, dating and returning the enclosed proxy card without
further direction. All signed and returned proxies that contain no direction as
to vote will be voted FOR each of the nominees for Director and FOR each of the
proposals.
The Board of Directors has selected itself as the persons to act as proxies
on the proxy card.
If you plan to attend the Annual Meeting and vote in person, you should
request a ballot when you arrive. HOWEVER, IF YOUR SHARES ARE HELD IN THE NAME
OF YOUR BROKER, BANK OR OTHER NOMINEE, THE INSPECTOR OF ELECTION WILL REQUIRE
YOU TO PRESENT A POWER OF ATTORNEY OR PROXY IN YOUR NAME FROM SUCH BROKER, BANK
OR OTHER NOMINEE FOR YOU TO VOTE SUCH SHARES AT THE ANNUAL MEETING. Please
contact your broker, bank or nominee.
4
VOTING PROCEDURES FOR SHARES IN THE COMPANY'S 401(K) PLAN OR ESOP
If you participate in the Company's 401(k) Plan or ESOP, please return your
proxy in the envelope on a timely basis to ensure that your proxy is voted. If
you own or are entitled to give voting instructions for shares in the 401(k)
Plan or ESOP and do not vote your shares or give voting instructions, generally,
the Plan Administrator or Trustee will vote your shares in the same proportion
as the shares for all plan participants for which voting instructions have been
received. Holders of shares in the 401(k) Plan or ESOP will not be permitted to
vote such shares at the Annual Meeting, but their attendance is encouraged and
welcomed.
REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the stockholders at the Annual Meeting is necessary
to constitute a quorum. Abstentions and broker "non votes" are counted as
present and entitled to vote for purposes of determining a quorum. A broker "non
vote" occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because such broker,
bank or nominee does not have discretionary authority to vote and has not
received instructions from the beneficial owner.
Once a quorum is achieved, a plurality of votes cast is all that is
necessary for the election of Directors. Abstentions and broker "non votes" are
not counted in determining the vote. As to ratification of BKD, LLP and all
other matters that may come before the meeting, the affirmative vote of a
majority of votes cast is necessary for the approval of such matters.
Abstentions and broker "non votes" are again not counted for purposes of
approving the matter.
REVOKING A PROXY
If you give a proxy, you may revoke it at any time before it is exercised.
You may revoke your proxy in any one of three ways:
- you may send in another proxy with a later date;
- you may notify the Company's Secretary in writing at First
BancTrust Corporation, 101 South Central Avenue, P.O. Box 880,
Paris, Illinois 61944; or
- unless you hold shares in the 401(k) Plan or ESOP, you may revoke
by voting in person at the Annual Meeting.
If you choose to revoke your proxy by attending the Annual Meeting, you
must vote in accordance with the rules for voting at the Annual Meeting.
Attending the Annual Meeting alone will not constitute revocation of a proxy.
LIST OF STOCKHOLDERS
A list of stockholders entitled to vote at the Annual Meeting will be
available for examination by stockholders for any purpose related to the Annual
Meeting at the Company's offices at 101 South Central Avenue, Paris, Illinois
for a period of ten days prior to the Annual Meeting. A list will also be
available at the Annual Meeting itself.
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COST OF PROXY SOLICITATION
We will pay the expenses of soliciting proxies. Proxies may be solicited on
our behalf by Directors, officers or employees in person or by telephone, mail
or telegram. We do not intend to engage a proxy solicitation firm to assist us
in the distribution and solicitation of proxies. The Company will also request
persons, firms and corporations holding shares in their names for other
beneficial owners to send proxy materials to such beneficial owners. The Company
will reimburse these persons for their expenses.
INSPECTOR OF ELECTION
Your proxy returned in the enclosed envelope will be delivered to the
Company's transfer agent, Illinois Stock Transfer Company. The Board of
Directors has designated Illinois Stock Transfer Company to act as inspectors of
election and to tabulate the votes at the Annual Meeting. Illinois Stock
Transfer Company is not otherwise employed by, or a Director of, the Company or
any of its affiliates. After the final adjournment of the Annual Meeting, the
proxies will be returned to the Company.
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the proxies to
vote the shares on such matters in their discretion.
GOVERNANCE OF THE COMPANY
ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS
Our Company's Board of Directors is the ultimate decision making body of
the Company, except for matters which law or our Certificate of Incorporation
requires the vote of stockholders. The Board of Directors selects the management
of the Company which is responsible for the Company's day to day operations. The
Board acts as an advisor to management and also monitors its performance. Our
Board of Directors has determined that each of Messrs. Vick N. Bowyer, David W.
Dick, John P. Graham, Terry T. Hutchison, James D. Motley, John W. Welborn, and
Joseph R. Schroeder are independent as independence is defined in listing
standards for the Nasdaq Stock Market, as those standards have been modified or
supplemented.
Members of the Board of Directors serve also as Directors of First Bank &
Trust, S.B. (the "Bank"). The Bank is the Company's wholly owned subsidiary. You
will find a discussion of its activities in your Annual Report.
During 2006, the Board of Directors met as the Company's Board of Directors
eight times. In addition, the Board of Directors has authorized four Committees
to manage distinct matters of the Company. These Committees are the Executive
Committee, Audit Committee, the Nominating Committee, and the Compensation
Committee. Membership on each of the Committees is set forth in the table below.
All of our Directors attended 75 percent or more of the meetings of the Board
and the Board Committees on which they served in 2006.
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NAME BOARD EXECUTIVE AUDIT NOMINATING COMPENSATION
---- ----- --------- ----- ---------- ------------
Vick N. Bowyer X X X
David W. Dick X X X X
John P. Graham X X X
Terry J. Howard X X
Terry T. Hutchison X X
James D. Motley X X X X X
Joseph R. Schroeder X X X
John W. Welborn X X X
Meetings in 2006 8 0 4 1 3
THE EXECUTIVE COMMITTEE
The Executive Committee generally acts in lieu of the full board of
directors between board meetings. This committee is responsible for formulating
and implementing policy decisions, subject to review by the entire board of
directors.
THE AUDIT COMMITTEE
The Audit Committee is responsible for recommending the annual appointment
of the public accounting firm to be our outside auditors, subject to approval of
the Board of Directors and stockholders. The Committee is responsible for the
following tasks:
- maintaining a liaison with the outside auditors;
- reviewing the adequacy of internal controls;
- reviewing with management and outside auditors financial
disclosures of the Company; and
- reviewing any material changes in accounting principles or
practices used in preparing statements.
AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has determined that we have an Audit Committee
financial expert, as defined by the Securities and Exchange Commission, serving
on our Audit Committee. James D. Motley is our Audit Committee financial expert,
and he is independent as independence for audit committee members is defined in
the listing standards for the Nasdaq Stock Market, as those standards have been
modified or supplemented.
THE NOMINATING COMMITTEE
Our Board of Directors has a Nominating Committee which consists of four
directors. Vick N. Bowyer, David W. Dick, James D. Motley, and Joseph R.
Schroeder are the current members of this committee. The Nominating Committee
identifies individuals to become board members and selects, or recommends for
the board's selection, director nominees to be presented for stockholder
approval at the annual meeting of stockholders or to fill any vacancies. During
the fiscal year ended December 31, 2006, the Nominating Committee held one
meeting.
Our Board of Directors has adopted a written charter for the Nominating
Committee, a copy of which was attached as an appendix to the proxy statement in
connection with the 2005 annual meeting and is also available to stockholders on
our website, at http://www.firstbanktrust.com. Each of the members of our
Nominating Committee is independent as independence is defined in the listing
standards for the Nasdaq Stock Market, as those standards have been modified or
supplemented.
7
The Nominating Committee's policy is to consider director candidates
recommended by stockholders. Such recommendations must be made pursuant to
timely notice in writing to:
First BancTrust Corporation
101 South Central Avenue
P.O. Box 880
Paris, Illinois 61944
Section 4.15 of the Company's 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 of the Board, to be made
pursuant to timely notice in writing to the Secretary of the Company, as set
forth in the 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 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 Bylaws.
The Nominating Committee has not established specific, minimum
qualifications for recommended nominees or specific qualities or skills for one
or more of our directors to possess. The Nominating Committee uses a subjective
process for identifying and evaluating nominees for director, based on the
information available to, and the subjective judgments of, the members of the
Nominating Committee and our then current needs, although the committee does not
believe there would be any difference in the manner in which it evaluates
nominees based on whether the nominee is recommended by a stockholder.
Historically, nominees have been existing directors or business associates of
our directors or officers.
THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is comprised entirely
of independent directors who meet the requirements of independence set forth in
the listing standards for The NASDAQ Stock Market.
The primary responsibility of the Compensation Committee is to assist the
Board of Directors in carrying out its responsibilities with respect to: (i)
overseeing the Company's compensation policies and practices; (ii) reviewing and
approving annual compensation and compensation procedures for the Company's CEO,
other executive officers, key leaders, and employees; and (iii) overseeing and
recommending director compensation to the Board of Directors. More specifically,
the Compensation Committee's responsibilities include: overseeing the Company's
general compensation structure, policies and programs, and assessing whether the
Company's compensation structure establishes appropriate incentives for
management and employees; making recommendations to the Board of Directors with
respect to the Company's incentive compensation and equity-based compensation
plans, including the Company's stock option plan and stock grant plan; reviewing
and approving compensation procedures for the Company's executive officers;
recommending to the Board of Directors for approval the compensation of
executive officers; recommending to the independent directors for approval of
the compensation of the CEO based on relevant corporate goals and objectives as
well as the Compensation Committee's performance evaluation of the CEO;
reviewing and recommending to the Board of Directors for approval the
compensation of other executive officers, key leaders, and employees; reviewing
and recommending to the Board of Directors employment and retention agreements
and severance arrangements for executive officers, including change-in-control
provisions, plans or agreements; reviewing the compensation of directors for
service on the Board of Directors and its committees and recommending changes in
compensation to the Board of Directors.
Company management provides recommendations regarding most compensation
matters, not including CEO compensation and director compensation, to the
Compensation Committee. The Compensation Committee has available to it an
outside compensation consultant, and has worked with the consultant to gather
comparative compensation data from independent sources and to develop a
comprehensive compensation program. The
8
committee is also responsible for reviewing and recommending that the Company's
Compensation Discussion and Analysis be included in this proxy statement.
Our Board of Directors has adopted a written charter for the Compensation
Committee, a copy of which is available to stockholders on our website at
http://www.firstbanktrust.com. The Compensation Committee Charter does not
provide for any delegation of these Compensation Committee Duties.
CODE OF ETHICS
The Company has adopted a Code of Ethics that applies to all of our
employees, officers and directors, including our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. Our Code of Ethics contains written
standards that we believe are reasonably designed to deter wrongdoing and to
promote:
- Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
- Full, fair, accurate, timely, and understandable disclosure in reports
and documents that we file with, or submit to, the Securities and
Exchange Commissions and in other public communications we make;
- Compliance with applicable governmental laws, rules and regulations;
- The prompt internal reporting of violations of the code to an
appropriate person or persons named in the code; and
- Accountability for adherence to the code.
This Code of Ethics is attached to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2006 as Exhibit 14. We have also posted it on our
Web site at http://www.firstbanktrust.com. We will provide to any person without
charge, upon request, a copy of our Code of Ethics. Requests for a copy of our
Code of Ethics should be made to our Secretary at 101 South Central Avenue, P.O.
Box 880, Paris, Illinois 61944. We intend to satisfy the disclosure requirement
under Item 10 of Form 8-K regarding an amendment to, or a waiver from, a
provision of our Code of Ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer or controller or
persons performing similar functions and that relates to any element of the code
definition enumerated in Securities and Exchange Commission, Regulation S-K,
Item 406(b) by posting such information on our Web site at
http://www.firstbanktrust.com within five business days following the date of
the amendment or waiver.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD
Our Board of Directors has a process for stockholders to send
communications to the Board of Directors, its Nominating Committee or its Audit
Committee, including complaints regarding accounting, internal accounting
controls, or auditing matters. Communications can be sent to the Board of
Directors, its Nominating Committee or its Audit Committee or specific directors
either by regular mail to the attention of the Board of Directors, its
Nominating Committee, its Audit Committee or specific directors, at our
principal executive offices at 101 South Central Avenue, P.O. Box 880, Paris,
Illinois 61944. All of these communications will be reviewed by our Secretary
(1) to filter out communications that our Secretary deems are not appropriate
for our directors, such as spam and communications offering to buy or sell
products or services, and (2) to sort and relay the remainder to the appropriate
directors. We encourage all of our directors to attend the annual meeting of
stockholders, if possible. All of our directors attended the 2006 annual meeting
of stockholders.
ITEM 1. ELECTION OF DIRECTORS
Currently, the Board of Directors has eight members divided into three
classes of two or three directors per class. Each class of directors has
three-year terms. One class of directors is up for election each year. This
results in a staggered Board which ensures continuity from year to year.
9
Two directors will be elected at the Annual Meeting to serve for three-year
terms expiring at our Annual Meeting in the year 2010.
The persons named in the enclosed proxy card intend to vote the proxy for
the election of each of the two nominees unless you indicate on the proxy card
that your vote should be withheld from any or all of such nominees. Each nominee
elected as director will continue in office until his or her successor has been
elected, or until his death, resignation or retirement.
The Board of Directors has proposed the following nominees for election as
Directors with terms expiring in 2010 at the Annual Meeting: John W. Welborn and
Terry T. Hutchison.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE NOMINEES
AS DIRECTORS.
We expect each nominee to be able to serve if elected. If any nominee is
not able to serve, proxies will be voted in favor of the remainder of those
nominated and may be voted for substitute nominees. The principal occupation and
certain other information about the nominees and other Directors whose terms of
office continue after the Annual Meeting is set forth below. Such terms may
include years of services for the Bank prior to the formation of the Company.
NOMINEES WHOSE TERMS WILL EXPIRE IN 2010
NAME AND AGE AS OF POSITION, PRINCIPAL OCCUPATION,
THE ANNUAL MEETING BUSINESS EXPERIENCE AND DIRECTORSHIP
------------------ --------------------------------------------
Terry T. Hutchison.......... 54 Self-employed Business Consultant, Paris,
Illinois since July 2002. Manager and owner
of Parkway Furniture Co., Paris, Illinois
from November 1976 to June 2002. Director
since 1989.
John W. Welborn............. 61 Chairman of the Board. Director since 1995.
Retired. Facilities Manager, TRW, Inc.,
Marshall, Illinois from November 1971 to
June 2001.
CONTINUING DIRECTORS WITH TERMS EXPIRING 2008
NAME AND AGE AS OF POSITION, PRINCIPAL OCCUPATION,
THE ANNUAL MEETING BUSINESS EXPERIENCE AND DIRECTORSHIP
------------------ --------------------------------------------
David W. Dick............... 57 Director since 1996. Senior Partner Gladding
& Dick Insurance, agents for Country
Insurance and Financial Services,
Bloomington, Illinois. Illinois licensed
Embalmer and Funeral Director.
John P. Graham.............. 54 Director since 2006. Director of Accounting,
Regency Associates, Champaign, Illinois,
since October 1988.
Terry J. Howard............. 59 Director since November 2000. President and
Chief Executive Officer of the 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.
10
CONTINUING DIRECTORS WITH TERMS EXPIRING 2009
NAME AND AGE AS OF POSITION, PRINCIPAL OCCUPATION,
THE ANNUAL MEETING BUSINESS EXPERIENCE AND DIRECTORSHIP
------------------ --------------------------------------------
Joseph R. Schroeder......... 56 Director since 1997. Attorney in private
practice with the law firm of Bennett,
Schroeder & Wieck, Marshall Illinois.
James D. Motley............. 62 Director since 2002. Self-employed owner of
the accounting firm James D. Motley, C.P.A.,
Paris, Illinois.
Vick N. Bowyer.............. 55 Director since 2003. 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.
ITEM 2. RATIFICATION OF AUDITORS
The Audit Committee of the Board of Directors has appointed BKD, LLP to
serve as our independent auditors for 2007 and is seeking the ratification of
the appointment of BKD, LLP by our stockholders.
In the event our stockholders fail to ratify the selection of BKD, LLP, the
Audit Committee will consider it as a direction to select other auditors for the
subsequent year. Representatives of BKD, LLP will be present at the Annual
Meeting to answer questions. They will also have the opportunity to make a
statement if they desire to do so.
AUDIT FEES
Audit fees and expenses billed to the Company by BKD, LLP for the audit of
the Company's financial statements for the fiscal years ended December 31, 2006
and December 31, 2005, and for review of the Company's financial statements
included in the Company's quarterly reports on Form 10-Q, are as follows:
2006 2005
------- -------
$66,848 $61,000
AUDIT RELATED FEES
Audit related fees and expenses billed to the Company by BKD, LLP for
fiscal years 2006 and 2005 for services related to the performance of the audit
or review of the Company's financial statements that were not included under the
heading "Audit Fees" are as follows:
2006 2005
------ -------
$6,171 $20,700
11
TAX FEES
Tax fees and expenses billed to the Company for fiscal years 2006 and 2005
for services related to tax compliance, tax advice and tax planning, consisting
primarily of preparing the Company's federal and state income tax returns for
the previous fiscal periods and inclusive of expenses are as follows:
2006 2005
------ ------
$8,345 $7,950
ALL OTHER FEES
Fees and expenses billed to the Company by BKD, LLP for all other services
provided during fiscal years 2006 and 2005 are as follows:
2006 2005
---- -------
0 $21,000
In accordance with Section 10A(i) of the Exchange Act, before BKD, LLP is
engaged by us to render audit or non-audit services, the engagement is approved
by our Audit Committee. None of the audit-related, tax and other services
described in the table above were approved by the Audit Committee pursuant to
Rule 2-01(c)(7)(i)(C) of Regulation S-X. None of the time devoted by BKD, LLP on
its engagement to audit the Company's financial statements for the year ended
December 31, 2006 is attributable to work performed by persons other than BKD,
LLP employees.
The affirmative vote of a majority of votes cast on this proposal, without
regard to abstentions or broker "non votes," is required for the ratification of
the appointment of BKD, LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF BKD, LLP AS OUR INDEPENDENT AUDITORS FOR THE YEAR 2007.
12
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES FOR DIRECTORS
MOST HIGHLY COMPENSATED EXECUTIVE OFFICERS AND
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
AMOUNT AND
NATURE OF BENEFICIAL OWNERSHIP
NAME OWNERSHIP AS A PERCENT OF CLASS
---- -------------------- ---------------------
Vick N. Bowyer (Director)................................. 24,502(1) 1.05%
David W. Dick (Director).................................. 54,996(2) 2.36%
Jack R. Franklin (Executive Officer)...................... 47,143(3) 2.02%
John P. Graham (Director)................................. 3,000(4) 0.13%
Terry J. Howard (Director and Executive Officer).......... 104,354(5) 4.47%
Terry T. Hutchison (Director)............................. 35,682(6) 1.53%
Ellen M. Litteral (Executive Officer)..................... 38,820(7) 1.67%
James D. Motley (Director)................................ 23,950(8) 1.03%
Joseph R. Schroeder (Director)............................ 49,582(9) 2.12%
Larry W. Strohm (Executive Officer)....................... 54,902(10) 2.36%
David F. Sullivan (Executive Officer)..................... 27,216(11) 1.17%
John W. Welborn (Director)................................ 40,138(12) 1.72%
All directors and executive officers as a group (12
persons)............................................... 504,285 19.90%
----------
(1) Includes 802 shares in the Naomi J. Bowyer Trust and 800 shares in the
Steven N. Bowyer Trust, trusts over which Mr. Bowyer has power of attorney
and 1,500 shares of restricted stock granted under the Company's
Recognition and Retention Plan which are subject to time and performance
vesting requirements. Also includes 19,800 stock options which are
currently exercisable.
(2) Includes 23,000 shares owned by Mr. Dick's wife's trust, 600 shares held by
Mr. Dick's wife's IRA, and 400 shares held by Mr. Dick's son, 6,082 shares
of restricted stock granted under the Company's Recognition and Retention
Plan which are subject to time vesting requirements and an additional 1,500
shares which are subject to time and performance vesting requirements. Also
includes 20,000 stock options which are currently exercisable.
(3) Includes 4,973 shares held in Mr. Franklin's wife's account, 12,624 held by
the Bank's 401(k) plan, 5,546 shares held by the ESOP for the account of
Mr. Franklin, 1,000 shares of restricted stock granted under the Company's
Recognition and Retention Plan which are subject to time vesting
requirements and an additional 5,000 shares which are subject to time and
performance vesting requirements. Also includes 18,000 stock options which
are currently exercisable.
(4) Includes 1,500 shares granted under the Company's Recognition and Retention
Plan which are subject to time and performance vesting.
(5) Includes 10,300 shares held in Mr. Howard's IRA, 4,000 shares held in Mr.
Howard's wife's IRA, 28,296 held by the Bank's 401(k) plan, 10,006 shares
held by the ESOP for the account of Mr. Howard, 24,000 shares of restricted
stock granted under the Company's Recognition and Retention Plan which are
subject to time vesting requirements and an additional 5,178 shares which
are subject to time and performance vesting requirements. Also includes
22,174 stock options which are currently exercisable.
(6) Includes 5,000 shares held in Mr. Hutchinson's IRA, 100 shares held by Mr.
Hutchinson's daughter, 6,082 shares of restricted stock granted under the
Company's Recognition and Retention Plan which are subject to time vesting
requirements and an additional 1,500 shares which are subject to time and
performance vesting requirements. Also includes 22,000 stock options which
are currently exercisable.
(7) Includes 5,000 shares held in Ms. Litteral and her husband's account, 2,094
held by the Bank's 401(k) plan, 5,726 shares held by the ESOP for the
account of Ms. Litteral, 3,000 shares of restricted stock granted under the
Company's Recognition and Retention Plan which are subject to time vesting
requirements and an additional 5,000 shares which are subject to time and
performance vesting requirements. Also includes 18,000 stock options which
are currently exercisable.
(8) Includes 1,500 shares of restricted stock granted under the Company's
Recognition and Retention Plan which are subject to time and performance
vesting requirements. Also includes 22,000 stock options which are
currently exercisable.
(9) Includes 3,000 shares held by Mr. Schroeder's children, 5,000 shares held
in Mr. Schroeder's IRA, 6,082 shares of restricted stock granted under the
Company's Recognition and Retention Plan which are subject to time vesting
requirements and an
13
additional 1,500 shares which are subject to time and performance vesting
requirements. Also includes 22,000 stock options which are currently
exercisable.
(10) Includes 500 shares held in Mr. Strohm's wife's account, 20,424 held by the
Bank's 401(k) plan, 6,378 shares held by the ESOP for the account of Mr.
Strohm, 1,000 shares of restricted stock granted under the Company's
Recognition and Retention Plan which are subject to time vesting
requirements and an additional 5,000 shares which are subject to time and
performance vesting requirements. Also includes 18,000 stock options which
are currently exercisable.
(11) Includes 500 shares held in Mr. Sullivan's wife account, 3,716 shares held
by the ESOP for the account of Mr. Sullivan, 5,000 shares granted under the
Company's Recognition and Retention Plan which are subject to time and
performance vesting requirements. Also includes 18,000 stock options which
are currently exercisable.
(12) Includes 10,556 shares which are held in Mr. Welborn's wife IRA, 6,082
shares of restricted stock granted under the Company's Recognition and
Retention Plan which are subject to time vesting requirements and an
additional 1,500 shares which are subject to time and performance vesting
requirements. Also includes 22,000 stock options which are currently
exercisable.
SECURITY OWNERSHIP OF STOCKHOLDER
HOLDING 5% OR MORE
NUMBER OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES(1) CLASS
------------------------------------ --------- ----------
First BancTrust Corporation 229,150(2) 9.9%
Employee Stock Ownership Plan ("ESOP")
101 South Central Avenue
Paris, Illinois 61944
Bay Pond Partners, L.P. 189,400(3) 8.2%
75 State Street
Boston, Massachusetts 02109
Gerald R. Forsythe 165,000(4) 7.1%
1111 South Willis Avenue
Wheeling, Illinois 60090
Wellington Management Company, LLP 213,200(5) 9.2%
75 State Street
Boston, Massachusetts 02109
(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 Banc Trust Corporation Employee Stock Ownership Plan Trust
("Trust") was established pursuant to the First Banc Trust Corporation
Employee Stock Ownership Plan ("ESOP"). As of the record date, 90,606
shares held in the Trust were unallocated, and 138,544 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 stock
holders 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 will
generally be disregarded in determining the percentage of stock voted for
and against each proposal by the participants and beneficiaries.
14
(3) Based on a Schedule 13G amended joint filing on February 14, 2006 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 189,400 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
165,000 shares.
(5) Based on a Schedule 13G amended filing on February 14, 2007 made on behalf
of Wellington Management Company, LLP ("WMC"), WMC, in its capacity as
investment adviser, may be deemed to beneficially own 213,200 shares which
are held of record by clients of WMC. WMC has shared voting and dispositive
power over 213,200 shares.
COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Committee reviews and approves the Company's goals
and objectives relevant to CEO compensation, evaluates the CEO's performance in
light of those goals and objectives, and recommends to the Board the CEO's
compensation level based on this evaluation. The Compensation Committee also
makes recommendations to the Board concerning Director compensation. In most
other compensation matters our management provides recommendations to the
Compensation Committee. For example, the Compensation Committee also reviews
evaluations conducted by the CEO of each senior managers' performance related to
the Company's goals and objectives and discusses the accompanying level of
compensation proposed by the CEO for each senior manager before recommending
each senior manager's compensation level to the Board. In addition, the
Compensation Committee reviews the compensation levels proposed by senior
management for employees of the Company before recommending each employee's
compensation level to the Board. The Compensation Committee also reviews all
benefit plans, incentive-compensation plans, and equity-based plans for
directors, officers, and employees of the Company and makes recommendations to
the Board with respect to these plans. During 2006, no decisions of the
Committee were modified in any material way or rejected by the Board of
Directors.
OBJECTIVES OF COMPENSATION PROGRAM
The primary objective of our compensation program is to attract and
retain qualified, knowledgeable, and energetic employees who are enthusiastic
about the Company's mission, purpose, and culture. The accompanying objective of
our compensation program is to provide incentives and rewards to each employee
relevant to their contributions to the achievement of the Company's goals and
objectives. In addition, we strive to promote an ownership mentality among key
leadership and the Board of Directors. Finally, we endeavor to make sure that
our compensation program is essentially fair to all stakeholders.
WHAT OUR COMPENSATION PROGRAM IS DESIGNED TO REWARD
Our compensation program is designed to reward each employee's
contribution to the achievement of the Company's goals and objectives. In
measuring the CEO's and other key leaders' contribution to the Company, the
Compensation Committee considers numerous factors including the Company's growth
and financial performance through reference to peer group data supplied by
independent sources as well as long-term goals established by the Board of
Directors. Company management provides recommendations regarding most
compensation matters, not including CEO compensation and director compensation,
to the Compensation Committee; however, the Compensation Committee does not
delegate any of its functions to others in setting compensation. The
Compensation Committee has available to it an outside compensation consultant,
and has worked with the consultant to gather comparative compensation data from
independent sources and to develop a comprehensive compensation program. Stock
price performance has not been a factor in determining annual compensation
because the price of the Company's common stock is subject to a variety of
factors outside of our control. However, our equity-based incentive plans are
designed to encourage key leaders to enhance our financial performance which
should positively impact the price of the Company's common stock, even though we
do not employ an exact formula for allocating between cash and non-cash
compensation.
15
OUR COMPENSATION PROGRAM
The Company's compensation program for executives and other key leaders consists
of three elements:
- a base salary
- a performance-based annual bonus; and
- a long-term incentive in the form of incentive grants of
restricted stock.
Salary. Base salaries are established for executive officers and
senior managers that are intended to be competitive and consistent with amounts
paid officers performing similar functions at comparable companies in our market
area. The Compensation Committee established a target range for base salaries
that is within 15% of the median salary for each position reported by
independent sources. The Committee may adjust salaries within this range to
reflect the executive's level of responsibility, prior experience, education,
breadth of knowledge, and personal performance record. All of these factors are
considered on a subjective basis in the aggregate, and none of the factors are
accorded a specific weight. When establishing the salary of executives other
than his own, Mr. Howard made recommendations to and participated in discussions
with the Compensation Committee. It is the Compensation Committee's intention to
set total executive cash compensation sufficiently high to attract and retain a
strong motivated leadership team, but not so high that is creates a negative
perception with our other shareholders.
BONUS. The payment of the annual bonus is primarily contingent upon
the attainment of targeted annual net income goals that are established by the
Board of Directors at the beginning of each year. When approving bonuses, the
Committee may also consider individual performance criteria in addition to
Company-wide objectives. The Committee revamped the bonus program for 2005
removing individual performance criteria from consideration in favor of
achieving Company-wide financial performance objectives. Since the performance
objectives were not met for 2005, no significant bonus payouts were made during
2006 for 2005. In December, 2006, the Compensation Committee recommended
approval of aggregated bonus payments of approximately $36,500 to 55 employees
based on their individual contribution towards the Company-wide objectives for
2006. These payments are to be made in early 2007. The bonus amount authorized
for each of the five named executive officers is set forth in the Compensation
Table on page 18.
STOCK OWNERSHIP. All of our key leaders participate in an incentive
compensation plan based primarily on improvement in financial performance over a
five-year period. During 2005, the Committee approved restricted stock grants
from the 2002 Recognition and Retention Plan for twelve executives and senior
managers of 42,678 shares. These shares will be vested based on the achievement
of year-over-year goals for profitability improvement and cumulative
profitability over a five-year period beginning in 2006 established by the Board
of Directors. This program puts a significant portion of each officer's
compensation at risk contingent on improving profitability both in the near term
and the long term effectively aligning the executive officers' interests with
those of shareholders. Since the stated goal for improvement in financial
performance in 2006 was not achieved, no shares were vested. However, the CEO is
required to analyze progress against the goals established for vesting these
shares over the remaining four years. He has determined that it is likely that
shares will be vested in the final two years of the program. As a result the
expense associated with those vesting shares has been pro-rated over the five
years resulting in the recognition of over $81,609 in expense during 2006.
Grants made to five named executive officers and the associated expenses
recognized in 2006 are set forth in the Compensation Table on page 18.
On April 22, 2002, stock grants of 32,000 shares from the Plan were
awarded to seven executives and senior managers which vest over a five year
period. As of December 31, 2006, eighty percent or 25,600 of those shares have
been transferred to those recipients. Shares vested to four named executive
officers and the associated expenses recognized in 2006 are set forth in the
Compensation Table on Page 18.
In addition, executives and senior managers have been granted 172,174
stock options under the 2002 Stock Option Plan. At December 31, 2005, all of
these options are exercisable. Options held by five key executive officers are
set forth in the 2006 Outstanding Equity at Fiscal Year-End Table on Page 21.
16
The Committee established these plans and made the awards to enhance
long term financial performance by motivating executive officers and employees
to further the long term goals of the Company.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
The Committee establishes Mr. Howard's salary after reviewing the
factors and components described above. Mr. Howard's salary in 2006 was based in
part upon the Committee's satisfaction with the following factors: market area
expansion, progress on operating efficiencies, continued loan portfolio growth,
and continued improvement in overall credit quality. Mr. Howard did not receive
a bonus in 2006. Mr. Howard did receive other compensation including allocations
under the ESOP, directors fees from the Company, amounts paid for premiums on
insurance polices with respect to Mr. Howard, interest on deferred compensation
and stock grants approved in 2002 described above. Although expenses were
recognized in conjunction with restricted stock grants approved in 2005, no
shares will be vested to Mr. Howard in 2007 for 2006.
Compliance with Section 162(m) of the Internal Revenue Code of 1986.
Section 162(m) of the Internal Revenue Code limits the deductibility of annual
compensation in excess of $1.0 million paid to the Chief Executive Officer and
any of the four other highest paid officers, to the extent they are listed
officers on the last day of any given tax year. However, compensation is exempt
from this limit if it qualifies as "performance based compensation." Performance
based compensation generally includes only payments that are contingent on
achievement of performance objectives, and excludes fixed or guaranteed
payments. We believe performance based compensation is an important tool to
provide incentive to senior executives, matching their compensation levels to
our performance.
Although we will consider deductibility under Section 162(m) with
respect to the compensation arrangements for executive officers, deductibility
will not be the sole factor used in determining appropriate levels or methods of
compensation. Since our objectives may not always be consistent with the
requirements for full deductibility, we may enter into compensation arrangements
under which payments would not be deductible under Section 162(m).
The following table shows, for the year ended December 31, 2006, the
cash compensation paid by the Bank, as well as certain other compensation paid
or accrued for the year, to the Chief Executive Officer, Chief Financial Officer
and other executive officers ("Named Executive Officers") who accrued
compensation in excess of $100,000 in fiscal year 2006.
17
SUMMARY COMPENSATION TABLE
CHANGE IN
PENSION
VALUE AND
NONQUALIFIED
DEFERRED
BASE STOCK COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) AWARDS(2) EARNINGS(3) COMPENSATION(4) TOTAL
--------------------------- ---- -------- --------- --------- ------------ --------------- --------
Terry J. Howard
President and CEO 2006 $120,000 $10,000 $63,972 $3,359 $34,015 $231,346
Ellen M. Litteral
Treasurer and CFO 2006 $ 75,400 $ 1,500 $14,160 -- $11,112 $102,172
Jack R. Franklin
Sr. Vice President 2006 $ 80,080 -- $ 9,440 -- $16,862 $106,382
David F. Sullivan
Vice President 2006 $ 87,350 $ 450 $ 7,080 -- $15,223 $110,103
Larry W. Strohm
Vice President 2006 $ 80,080 $ 1,000 $ 9,440 -- $15,177 $105,697
(1) Bonuses were approved by the Compensation Committee for 2006, payable by
the end of March 2007.
(2) Mr. Howard received $56,640 vested under the 2002 stock grant, and $7,332
represents the current market value of the potential shares to be vested
under the 2005 performance and incentive plan. Ms. Litteral received $7,080
vested under the 2002 stock grant, and $7,080 represents the current market
value of the potential shares to be vested under the 2005 performance and
incentive plan. Mr. Franklin received $2,360 vested under the 2002 stock
grant, and $7,080 represents the current market value of the potential
shares to be vested under the 2005 performance and incentive plan. The
$7,080 for Mr. Sullivan represents the current market value of the
potential shares to be vested under the 2005 performance and incentive
plan. Mr. Strohm received $2,360 vested under the 2002 stock grant, and
$7,080 represents the current market value of the potential shares to be
vested under the 2005 performance and incentive plan.
(3) Interest accrued on balances in the executive officer's deferred
compensation account.
(4) Mr. Howard's total is comprised of the following: $980 for the economic
benefit of life insurance; $2,307 for vacation benefit pay; $15,450 in
director fees; and $15,278 for the ESOP value as of December 31, 2006. Ms.
Litteral's total is comprised of the following: $181 for the economic
benefit of life insurance; $1,450 for vacation benefit pay; $9,481 for the
ESOP value as of December 31, 2006. Mr. Franklin's total is comprised of
the following: $304 for the economic benefit of life insurance; $1,540 for
vacation benefit pay; $5,000 in performance incentive; and $10,018 for the
ESOP value as of December 31, 2006. Mr. Sullivan's total is comprised of
the following: $344 for the economic benefit of life insurance; $1,680 for
vacation benefit pay; $2,460 in loan commissions; and $10,739 for the ESOP
value as of December 31, 2006. Mr. Strohm's total is comprised of the
following: $304 for the economic benefit of life insurance; $1,540 for
vacation benefit pay; $3,216 in loan commissions; and $10,117 for the ESOP
value as of December 31, 2006.
18
BACKGROUNDS OF OUR EXECUTIVE OFFICERS
Terry J. Howard, Age 59, President and Chief Executive Officer of the
First BancTrust Corporation since November, 2000. His began his employment at
First Bank & Trust, in 1988 as Executive Vice President and was appointed
President and CEO in 1999. His previous employment included seventeen years in
other financial institutions where he advanced to the position of Executive Vice
President. Graduated from Indiana State University in 1970 with a B.S. in
Business and a M.B.A. in 1971. Also a 1978 graduate of the Financial Management
Society's Graduate School.
Jack R. Franklin, Age 53, Senior Vice President of the First BancTrust
Corporation since 2005. President of First Bank of Savoy and First Bank of
Rantoul (divisions of First Bank & Trust), since 2003. He began his employment
at First Bank and Trust in 1992 as a loan officer, and advanced to Senior Vice
President Operations in 2000. Previous employment included management of a
retail service facility. He graduated from Eastern Illinois University in 1974,
with a B.S in Business, and from Vanderbilt University's Graduate School of Bank
Operations and Technology in 2001.
Ellen M. Litteral, CPA, Age 49, Vice President, Treasurer and CFO of
First BancTrust Corporation since 2001. She began her employment at First Bank
and Trust as Controller in 1985 and advanced to Senior Vice President and CFO in
2003. Previous employment included an accountant in the health service industry
following several years employment in public accounting. Ms. Litteral obtained
her BS degree in Accounting from Illinois State University.
Larry W. Strohm, Age 53, Vice President of First BancTrust Corporation
since 2001. President of First Bank of Marshall and First Bank of Martinsville
(divisions of First Bank & Trust). An employee of the bank since 1983, Mr.
Strohm has spent his entire banking career managing the Clark County offices for
First Bank and Trust. Previous employment included City Manager of Marshall,
Illinois. Mr. Strohm graduated from Lake Land College, in Mattoon, Illinois, in
1973, with an Associates Degree in Accounting.
David F. Sullivan, Age 54, Vice President of First BancTrust
Corporation since 2004. President First Bank of Paris (a division of First Bank
& Trust). He began his employment at First Bank and Trust in 2002 as Vice
President and Senior Lending Officer. Previous employment experience includes
president of a community bank following 27 years in the banking industry. Mr.
Sullivan is a 1974 graduate of the University of Illinois with a BS in
Agriculture Economics and a 1992 graduate of the Prochnow Foundation's Graduate
School of Banking.
EMPLOYMENT AGREEMENTS
First BancTrust and First Bank have entered into an employment agreement
with Terry J. Howard pursuant to which they 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. 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 60 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, except as described below. The
agreement provides for certain benefits in the event of Mr. Howard's death.
Payments upon termination or a change in control are also described below.
SEVERANCE AGREEMENTS
First BancTrust and First Bank have entered into a severance agreement with
Larry W. Strohm pursuant to which they have agreed to specify the severance
benefits which shall be due Mr. Strohm in the event that his employment with
First BancTrust and First Bank is terminated under specified circumstances. The
agreement provides that Mr. Strohm will perform such executive services as may
be consistent with his titles and from time to
19
time assigned to him by the Employer's Boards of Directors. The severance
agreement will be reviewed annually. The term of Mr. Strohm's severance
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 60 days prior to the annual anniversary date, not to
extend the term of the severance agreement. The severance agreement shall be
terminable with or without cause by the employers. Mr. Strohm shall have no
right to compensation or other benefits pursuant to the severance agreement for
any period after voluntary termination or termination by the employers for
cause, disability or retirement, except as described below. The agreement
provides for certain benefits in the event of Mr. Strohm's death. Payments upon
termination or a change in control are also described below.
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 AND TRUST
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 243,340 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, beginning in 2001, 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 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 304,174 shares of Common Stock were reserved under the 2002
Stock Option Plan. At December 31, 2006, 304,174 options to acquire shares of
Common Stock had been granted and 289,974 are currently outstanding. All of the
outstanding options are currently exercisable.
20
2002 RECOGNITION AND RETENTION PLAN
The Recognition Plan acquired 121,670 shares of Common Stock. At December
31, 2006, 121,670 shares had been granted to directors and executive officers
and 54,489 of such shares had vested. Under the Recognition Plan, shares are
awarded as restricted stock which vests over a period specified by the Board or
the Compensation Committee. The restricted stock granted will vest over a
five-year period and 53,178 of such shares are subject to performance vesting
requirements.
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, 2006,
48,555 vested shares had been deferred.
OPTION GRANTS IN 2006
There were no Stock Option Grants made during 2006.
2006 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
STOCK AWARDS
---------------------------------------------------------
EQUITY
INCENTIVE
EQUITY INCENTIVE PLAN AWARDS:
PLAN AWARDS: MARKET OR
OPTION AWARDS MARKET NUMBER OF PAYOUT VALUE
--------------------------------------------------- NUMBER OF VALUE OF UNEARNED OF UNEARNED
NUMBER OF NUMBER OF SHARES OR SHARES OR SHARES, UNITS SHARES, UNITS
SECURITIES SECURITIES UNITS OF UNITS OF OR OTHER OR OTHER
UNDERLYING UNDERLYING OPTION STOCK THAT STOCK THAT RIGHTS THAT RIGHTS THAT
UNEXERCISED UNEXERCISED EXERCISE OPTION HAVE NOT HAVE NOT HAVE NOT HAVE NOT
OPTIONS OPTIONS PRICE EXPIRATION VESTED VESTED VESTED VESTED
NAME (#) (#) ($) DATE (#) ($) (#) ($)
---- ----------- ------------- -------- ---------- ---------- ---------- ---------------- -------------
EXERCISABLE UNEXERCISABLE
Terry J. Howard 22,174 -- $9.87 5/15/2013 9,976(1) $117,717 -- --
Ellen M. Litteral 18,000 -- $9.87 5/15/2013 5,600(2)(4) $ 66,080 -- --
Jack R. Franklin 18,000 -- $9.87 5/15/2013 5,200(2)(3) $ 61,360 -- --
Larry W. Strohm 18,000 -- $9.87 5/15/2013 5,200(2)(3) $ 61,360 -- --
David F. Sullivan 18,000 -- $9.87 5/15/2013 5,000(2) $ 59,000 -- --
(1) Represents 5,176 shares of the 2002 performance stock grant not yet vested,
and the remaining 4,800 shares of the 2002 stock grant.
(2) Represents 5,000 shares of the 2005 performance stock grant not vested.
(3) Includes 200 shares not yet vested under the 2002 plan.
(4) Includes 600 shares not yet vested under the 2002 plan.
21
2006 NONQUALIFIED DEFERRED COMPENSATION TABLE
REGISTRANT AGGREGATE AGGREGATE BALANCE
EXECUTIVE CONTRIBUTION CONTRIBUTIONS IN LAST AGGREGATE EARNINGS WITHDRAWALS / AT LAST FISCAL
IN LAST FISCAL YEAR FISCAL YEAR IN LAST FISCAL YEAR DISTRIBUTIONS YEAR-END
NAME ($) ($) ($) ($) ($)
---- ---------------------- --------------------- ------------------- ------------- -----------------
Terry J. Howard $10,546 -- $3,359 -- $63,863
TERMINATION/CHANGE-IN-CONTROL PAYMENTS
Terry J. Howard. Under Mr. Howard's current employment agreement, he
is entitled to different payments and benefits depending upon the manner in
which his employment terminates. If Mr. Howard retires or becomes disabled, he
is entitled to continued life, medical, dental and disability coverage for the
remaining term of his employment agreement. Assuming in accordance with recently
enacted SEC disclosure rules that this occurred on December 31, 2006, the
estimated aggregate benefits to be provided to Mr. Howard would be approximately
$10,995.
If Mr. Howard is terminated for cause or he terminates other than for
disability, retirement, death or good reason, his right to compensation and
benefits ends on his date of termination.
If Mr. Howard terminates because of a material breach of his employment
agreement, he is terminated other than for cause, disability, retirement or
death, or he terminates for good reason, then Mr. Howard will be entitled to a
cash severance amount equal to two times his average annual compensation for the
last five calendar years (payable in either 24 installments or as a lump sum),
plus the continuation of insurance and employee benefits for the remaining term
of his employment agreement.
The employment agreement provides that, in the event any of the payments to
be made 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, 2006, if a termination
occurred in the manner described in the immediately preceding paragraph, the
estimated aggregate value of compensation and benefits to be provided to Mr.
Howard would be approximately $380,776.
"Good Reason" is defined under the agreement to mean a termination by Mr.
Howard within 24 months following a change in control (as defined immediately
below) based on, among other things, (i) a failure to re-appoint Mr. Howard as
President of the bank or a material adverse change in his duties; (ii) a
material reduction in his compensation; or (iii) a relocation of more than 30
miles. "Change in Control" is a change of control of First BancTrust that would
be 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.
Larry W. Strohm. Under Mr. Strohm's current severance agreement, he is
entitled to different payments and benefits depending upon the manner in which
his employment terminates. If Mr. Strohm retires or becomes disabled, he is
entitled to continued life, medical, dental and disability coverage for the
remaining term of his employment agreement. Assuming in accordance with recently
enacted SEC disclosure rules that this occurred on December 31, 2006, the
estimated aggregate benefits to be provided to Mr. Strohm would be approximately
$6,963.
22
If Mr. Strohm is terminated for cause or he terminates other than for
disability, retirement, death or good reason, his right to compensation and
benefits ends on his date of termination.
If Mr. Strohm terminates because of a material breach of his severance
agreement, he is terminated other than for cause, disability, retirement or
death, or he terminates for good reason, then Mr. Strohm will be entitled to a
cash severance amount equal to his average annual compensation for the last five
calendar years (payable in either 12 installments or as a lump sum), plus the
continuation of insurance and employee benefits for the remaining term of his
severance agreement.
The severance agreement provides that, in the event any of the payments to
be made 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, 2006, if a termination
occurred in the manner described in the immediately preceding paragraph, the
estimated aggregate value of compensation and benefits to be provided to Mr.
Strohm would be approximately $95,818.
"Good Reason" is defined under the agreement to mean a termination by Mr.
Strohm within 24 months following a change in control (as defined immediately
below) based on, among other things, without Mr. Strohm's express written
consent, (i) the failure to re-appoint Mr. Strohm as the Senior Vice President,
Manager of the Marshall Branch of the bank or a material adverse change in his
duties; (ii) a material reduction in his compensation; or (iii) a relocation of
more than 30 miles. "Change in Control" is a change of control of First
BancTrust that would be 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.
DIRECTORS' COMPENSATION
Each director of the Company and the Bank receives $250 for Board
meetings held, but only if attended. Each director of the Company receives a
quarterly compensation of $1,275, whether or not the meeting(s) are attended
except the Chairman of the Board of the Company receives a total of $1,785
quarterly. Each director of the Bank also receives a quarterly compensation of
$1,275, whether or not they attend meeting(s) except the Chairman receives a
total of $1,785 quarterly. Each director of the Company and First Bank receives
$250 for each committee meeting attended except Mr. Howard who receives no
committee fees from either the Company or First Bank. If additional Board
meetings are held, directors receive additional compensation of $250 per
meeting, but only if attended. The Company has a deferred director fee plan
covering certain directors whereby each director may elect to defer all or a
portion of their annual fees. First Bank Directors Emeritus, Mary Ann Tucker,
Doctor Robert Sprague, C. Kenneth Bridwell, and Robert Hodge receive $1,530 each
quarter whether or not meetings are attended. Doctor Sprague receives an
additional $1,530 per quarter retainer as a public relations officer.
Directors are also eligible to participate in the Company's
Recognition and Retention Plan and the Company's 2002 Stock Option Plan. In
2006, each director received a restricted stock award of 1,500 shares, subject
to time and performance vesting requirements. In 2002 and 2003, Messrs. Sprague,
Hutchison, Welborn, Dick and Schroeder and Director Emeritus, Mary Ann Tucker,
each received a restricted stock award of 6,082 shares subject to time vesting
requirements. In 2003, Messrs. Hutchison, Welborn, Schroeder, Dick, Motley and
Bowyer were each granted stock options totaling 22,000 shares which are
currently exercisable at $9.87 per share.
23
2006 DIRECTOR COMPENSATION TABLE
CHANGE
IN PENSION
VALUE AND
NONQUALIFIED
DEFERRED
FEES EARNED OR COMPENSATION ALL OTHER
PAID IN CASH(1) STOCK AWARDS(2) OPTION AWARDS EARNINGS(3) COMPENSATION TOTAL
NAME ($) ($) ($) ($) ($) ($)
---- --------------- --------------- ------------- ------------ ------------ -------
Vick N. Bowyer $19,200 $ 2,124 -- -- -- $21,324
David W. Dick $20,950 $16,478 -- $10,070 -- $47,498
John P. Graham $16,900 $ 2,124 -- $ 43 -- $19,067
Terry T. Hutchison $24,950 $16,478 -- $ 1,741 -- $43,169
James D. Motley $19,950 $ 2,124 -- $ 870 -- $22,944
Joseph R. Schroeder $18,450 $16,478 -- $ 2,624 -- $37,552
John W. Welborn $28,780 $16,478 -- $ 4,469 -- $49,727
(1) See above Director's Compensation for a discussion of director's fees.
(2) Represents the ratable portion of the value of grants made in 2006 and
prior years, calculated in accordance with FAS 123(R), to the extent the
vesting period fell in 2006. Please refer to Footnote 26 to our Financial
Statements for a discussion of the assumptions related to this calculation
of such value. The Stock Awards for Mr. Bowyer, Mr. Graham, and Mr. Motley
represent unvested stock grants under the 2005 performance based awards.
The Stock Awards for Mr. Dick, Mr. Hutchison, Mr. Schroeder, and Mr.
Welborn represent the unvested stock under the 2005 Performance based
awards, as well as the market value of 1,216 shares vested under the 2002
Stock grant.
(3) Represents interest accrued on the balances of the deferred compensation
accounts for each director.
INTERLOCKS AND RELATED PARTY TRANSACTIONS
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Company has adopted a Related Party Transactions Policy which
requires the audit committee and a majority of disinterested board members to
approve any transaction with a related party, with the exception of the
following: (i) transactions available to all employees generally, (ii) those
involving less than $25,000 in the aggregate, and (iii) loans subject to banking
Regulation O (in which case the Bank and related party must comply with
Regulation O).
The Bank makes loans to directors and executive officers from
time-to-time in the ordinary course of business. The Bank's current policy
provides that all loans made by the Bank to its directors and executive officers
are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectability or
present other unfavorable features.
24
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is comprised of
David W. Dick, John P. Graham, James D. Motley, and Joseph R. Schroeder, none of
whom is or was formerly an officer of the Company. Neither David W. Dick, John
P. Graham, James D. Motley, nor Joseph R. Schroeder had any relationship with
the Company which would have required disclosure in this Proxy Statement under
the caption "Transactions with Certain Related Parties." No executive officer of
the Company served as a director of any other for-profit entity in 2006 or on
the compensation committee of any such entity.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis contained in this Proxy Statement with management; and
based on the review and discussions, the Compensation Committee recommended to
the Board of Directors that the Compensation Discussion and Analysis be included
in the Company's Annual Report on Form 10-K and this Proxy Statement.
THE COMPENSATION COMMITTEE
David W. Dick (Chair) James D. Motley
John P. Graham Joseph R. Schroeder
AUDIT COMMITTEE REPORT
The Audit Committee is comprised of four directors (Messrs. John P.
Graham, Terry T. Hutchison, James D. Motley, and John W. Welborn). Each of the
directors is independent, under the definition contained in Rule 4200(a)(15) of
the listing standards of The NASDAQ Stock Market. The Board of Directors has
adopted a written charter for the Audit Committee, which was included as an
Appendix to the Proxy Statement for the 2005 Annual Meeting and is available on
our website at http://www.firstbanktrust.com.
In connection with the audited financial statements contained in the
Company's 2006 annual report on Form 10-K for the fiscal year ended December 31,
2006, the Audit Committee reviewed and discussed the audited financial
statements with management and BKD, LLP. The Audit Committee discussed with BKD,
LLP the matters required to be discussed by SAS 61 (Codification of Statements
on Auditing Standards, AU Section 380). The Audit Committee has also received
the written disclosures and the letter from BKD, LLP required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees)
and has discussed with them their independence.
Based on the review and discussions, 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-K for the fiscal year ended December 31,
2006.
THE AUDIT COMMITTEE
John P. Graham Terry T. Hutchison James D. Motley (Chair) John W. Welborn
25
COMPLIANCE WITH SECTION 16
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Executive officers, directors
and greater than 10% stockholders are required by regulation to furnish the
Company with copies of all Section 16(a) reports they file.
Based on its review of the copies of the reports it has received and
written representations provided to the Company from the individuals required to
file the reports, the Company believes that all Directors and Executives of the
Company filed all reports required on a timely basis pursuant to Section 16 of
the Securities Exchange Act of 1934.
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, 101 South Central Avenue, P.O. Box 880, Paris, Illinois 61944,
Attention: Secretary, no later than November 24, 2007. 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 24, 2007 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.
Whether or not you plan to attend the Meeting, please vote by marking,
signing, dating and promptly returning the enclosed proxy in the enclosed
envelope.
By Order of the Board of Directors,
----------------------------------------
David W. Dick, Corporate Secretary
26
(FBTC LOGO)
FIRST BANCTRUST CORPORATION
CORDIALLY INVITES YOU TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS
MONDAY, APRIL 23, 2007, 10:00 A.M. CDT
HUMAN RESOURES CENTER
118 EAST COURT STREET, PARIS, IL
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YOU CAN VOTE IN ONE OF TWO WAYS: 1) BY MAIL, 2) BY PHONE.
See the reverse side of this sheet for instructions.
IF YOU ARE NOT VOTING BY TELEPHONE, COMPLETE BOTH SIDES OF PROXY CARD,
DETACH AND RETURN IN THE ENCLOSED ENVELOPE TO:
Illinois Stock Transfer Co.
209 West Jackson Boulevard, Suite 903
Chicago, Illinois 60606
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DETACH PROXY CARD HERE DETACH ATTENDANCE CARD HERE AND MAIL WITH PROXY CARD
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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
2007. 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.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders of the Company called for April 23, 2007, a Proxy Statement for the
Annual Meeting and the 2006 Annual Report to Stockholders.
VOTER CONTROL NUMBER ABOVE NAME HERE FIRST BANCTRUST CORPORATION
If you plan to personally attend the Annual
Meeting of Stockholders on April 23, 2007, please
check the box and list the names of attendees
below.
Return this stub in the enclosed envelope with
your completed proxy card.
Dated:
--------------------------------- I/We do plan to attend the Annual Meeting. [ ]
Signature:
----------------------------- Names of persons attending:
-------------------------------------------------
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.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
TO VOTE BY MAIL
To vote by mail, complete both sides, sign and date the proxy card below. Detach the card below and return it in the envelope
provided.
TO VOTE BY TELEPHONE
Your telephone vote is quick, confidential and immediate. Just follow these easy steps:
1. Read the accompanying Proxy Statement.
2. Using a Touch-Tone telephone, call Toll Free 1-800-555-8140 and follow the instructions.
3. When asked for your Voter Control Number, enter the number printed just above your name on the front of the proxy card below.
Please note that all votes cast by telephone must be COMPLETED and SUBMITTED prior to Friday, April 20, 2007 at 11:59 p.m. Central
Time.
Your telephone vote authorizes the named proxies to vote your shares to the same extent as if you marked, signed, dated and returned
the proxy card.
IF YOU VOTE BY TELEPHONE, PLEASE DO NOT RETURN YOUR PROXY CARD BY MAIL
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FIRST BANCTRUST CORPORATION REVOCABLE PROXY
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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 23, 2007 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 23,
2007, 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.
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1. Election of Directors
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees listed.
contrary.)
Nominees for three-year term: 01 Terry T. Hutchison 02 John W. Welborn
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided below.)
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2. Proposal to ratify the appointment of BKD, LLP as the Company's independent auditors
for the year ending December 31, 2007.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 2007, AND
OTHERWISE AT THE DISCRETION OF THE PROXIES.
(to be signed on the other side)