First Busey Corp.'s shareholder meeting set for Dec. 2

CHAMPAIGN, Oct 22, 2009 (The News-Gazette - McClatchy-Tribune Information Services via COMTEX) -- BUSE | Quote | Chart | News | PowerRating -- First Busey Corp. raised $82.8 million in its public offering of common stock last month, the company reported in a recent filing with the Securities and Exchange Commission.

The Urbana-based bank holding company sold 20.7 million shares for $4 a share to raise that total, the report said.

Additionally, the company sold $39.3 million in convertible preferred stock through a separate private placement. The 393 shares of preferred stock were sold mainly to First Busey directors and executive officers.

The preferred stock is to be converted into First Busey common stock, but for that to happen, First Busey stockholders must first give approval.

The company has set a special stockholders meeting for 6:30 p.m. Dec. 2 at the Busey Bank office at 100 W. University Ave., C.

Stockholders will be asked to approve a measure increasing the number of authorized shares of common stock from 60 million to 100 million. As of last month, 56.5 million shares were issued and outstanding.

The stockholders will also be asked to approve issuance of more than 9.8 million shares of common stock to accommodate conversion of the preferred stock.

If stockholders fail to approve the measures, holders of the preferred stock would continue to get cumulative cash dividends of 9 percent a year.

There's added incentive for common stock holders to vote yes. As long as any dividends are owed to preferred stock holders, First Busey is prohibited from paying dividends to common stock holders.

In a proxy statement to shareholders, First Busey said proceeds from the additional shares could be used for several purposes, including:

--Raising working capital for the holding company or its subsidiaries.

--Making future acquisitions.

--Granting restricted stock or stock options to officers, employees and directors.

--Declaring a stock split or stock dividend.

As reported earlier, one of the company's directors August C. Meyer Jr. and his family bought $27 million of the convertible preferred stock.

The remaining $12.3 million of the preferred stock was purchased by other directors and executive officers and a First Busey stockholder described as "an individual accredited investor." According to the proxy statement, Meyer and his family are now the beneficial owners of more than 5 percent of First Busey's common stock.

The Federal Reserve recently notified family members that it has no objection to them increasing their ownership level in the company to as much as 19.9 percent of outstanding common stock.

As of Oct. 2, directors and executive officers held about 14 percent of First Busey's outstanding shares. Former Chairman Douglas C. Mills was listed as beneficial owner of 7.3 percent of outstanding shares; current Chairman Gregory B. Lykins, the beneficial owner of 2.4 percent; and director George Shapland, the beneficial owner of 1.1 percent. Other directors each held less than 1 percent.

Following the stock conversion, Mills would be the beneficial owner of 6.8 percent of outstanding shares; Meyer, 6.3 percent; Lykins, 2.2 percent; Shapland, 1.7 percent; and director David Downey, 1 percent. Altogether, directors and executive officers would own about 20 percent of shares, according to the proxy statement.

Shapland and Downey also serve on the board of directors of The News-Gazette Inc.

First Busey is scheduled to announce its third-quarter earnings on Oct. 27.

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