[PERIOD-TYPE] 12-MOS
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. __)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (section) 240.14a-11(c) or
(section) 240.14a-12
FIRST MID-ILLINOIS BANCSHARES, INC.
(Name of Registrant as Specified In Its Charter)
Mr. William S. Rowland, Chief Financial Officer of the Registrant
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
April 12, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of First Mid-Illinois
Bancshares, Inc., I cordially invite you to attend the Annual Meeting of
Stockholders of First Mid-Illinois Bancshares, Inc. to be held at 11:00 a.m.
on May 15, 1996, at the Ramada Inn located at 300 Broadway Avenue, Mattoon,
Illinois. The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement discuss the business to be conducted at the meeting. We have also
enclosed a copy of the Company's 1995 Annual Report to Stockholders. At the
meeting we shall report on Company operations and the outlook for the year
ahead.
Your Board of Directors has nominated two persons to serve as Class I
directors. Both of the nominees are incumbent directors. The Board also
recommends that you approve the adoption of a deferred compensation plan, as
set forth in the accompanying Proxy Statement. In addition, the Company's
management has selected and recommends that you ratify the selection of KPMG
Peat Marwick LLP to continue as the Company's independent public accountants
for the year ending December 31, 1996.
We recommend that you vote your shares for the director nominees and in
favor of the proposals.
I encourage you to attend the meeting in person. Whether or not you plan
to attend, however, please complete, sign and date the enclosed proxy and
return it in the accompanying postpaid return envelope as promptly as
possible. This will ensure that your shares are represented at the meeting.
If you have any questions concerning these matters, please do not
hesitate to contact me at (217) 234-7454. We look forward with pleasure to
seeing and visiting with you at the meeting.
Very truly yours,
FIRST MID-ILLINOIS BANCSHARES, INC.
Daniel E. Marvin, Jr.
Chairman
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15, 1996
FIRST MID-ILLINOIS BANCSHARES, INC.
1515 Charleston Avenue
P.O. Box 499
Mattoon, Illinois 61938
(217) 234-7454
To the stockholders of FIRST MID-ILLINOIS BANCSHARES, INC.
The Annual Meeting of the Stockholders of First Mid-Illinois Bancshares,
Inc., a Delaware corporation (the "Company"), will be held at the RAMADA INN,
300 Broadway Avenue, East in Rooms A, B and C, Mattoon, Illinois, on
Wednesday, May 15, 1996, at 11:00 a.m., local time, for the following
purposes:
1. to elect two Class I directors for a term of three years.
2. to approve the adoption of the First Mid-Illinois Bancshares, Inc.
Deferred Compensation Plan.
3. to approve the appointment of KPMG Peat Marwick LLP as independent
public accountants for the Company for the fiscal year ending
December 31, 1996.
4. to transact such other business as may properly be brought before
the meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April 1, 1996,
as the record date for the determination of stockholders entitled to notice
of, and to vote at, the meeting.
By order of the Board of Directors
Daniel E. Marvin, Jr.
Chairman
Mattoon, Illinois
April 12, 1996
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of First Mid-Illinois Bancshares, Inc. (the "Company")
of proxies to be voted at the Annual Meeting of Stockholders to be held at the
Ramada Inn, 300 Broadway Avenue, East in Rooms A, B and C, Mattoon, Illinois,
on Wednesday, May 15, 1996, at 11:00 a.m., local time, and at any adjournments
or postponements thereof.
The Board of Directors would like to have all stockholders represented at
the meeting. If you do not expect to be present, please sign and mail your
proxy card in the enclosed self-addressed, stamped envelope. You have the
power to revoke your proxy at any time before it is voted, and the giving of a
proxy will not affect your right to vote in person if you attend the meeting.
The mailing address of the Company*s principal executive offices is 1515
Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938. This Proxy
Statement and the accompanying proxy card are being mailed to stockholders on
or about April 12, 1996. The 1995 Annual Report of the Company, which
includes consolidated financial statements of the Company, is enclosed.
The Company is a diversified financial services company which serves the
financial needs of east central Illinois. It is the parent company of First
Mid-Illinois Bank & Trust, N.A. (the "Bank"), a regional banking entity which
has locations in Mattoon, Altamont, Effingham, Charleston, Sullivan, Tuscola,
Arcola and Neoga, Illinois. The Company is also the holding company for
Heartland Savings Bank, an Illinois savings bank located in Mattoon and
Urbana, Illinois ("Heartland"). Mid-Illinois Data Services, Inc., a data
processing company ("MIDS"), is a wholly owned nonbanking subsidiary of the
Company. The Bank, Heartland and MIDS are sometimes referred to as the
"Subsidiaries."
Only holders of record of the Company*s Common Stock, par value $4.00 per
share (the "Common Stock"), at the close of business on April 1, 1996 will be
entitled to vote at the annual meeting or any adjournments or postponements of
such meeting. On April 1, 1996, the Company had 898,268 shares of Common
Stock, and 620 shares of Preferred Stock, no par value (the "Preferred
Stock"), issued and outstanding. In the election of directors, and for all
other matters to be voted upon at the annual meeting, each issued and
outstanding share of Common Stock is entitled to one vote. Holders of the
Preferred Stock are not entitled to vote their Preferred Stock at the annual
meeting. All shares of Common Stock represented at the annual meeting by
properly executed proxies received prior to or at the annual meeting, and not
revoked, will be voted at the meeting in accordance with the instructions
thereon. If no instructions are indicated, properly executed proxies will be
voted for the nominees and for adoption of the proposals set forth in this
Proxy Statement.
A majority of the shares of the Common Stock, present in person or
represented by proxy, shall constitute a quorum for purposes of the annual
meeting. Abstentions and broker non-votes will be counted for purposes of
determining a quorum. Directors shall be elected by a plurality of the votes
present in person or represented by proxy. In all matters other than the
election of directors, the affirmative vote of the majority of shares present
in person or represented by proxy at the annual meeting and entitled to vote
on the subject matter shall be required to constitute stockholder approval.
Abstentions will be treated as votes against a proposal and broker non-votes
will have no effect on the vote.
<PAGE>
ELECTION OF DIRECTORS
At the Annual Meeting of the Stockholders to be held on May 15, 1996, the
stockholders will be entitled to elect two (2) Class I directors for a term
expiring in 1999. The directors of the Company are divided into three classes
having staggered terms of three years. Both of the nominees for election as
Class I directors are incumbent directors. The Company has no knowledge that
any of the nominees will refuse or be unable to serve, but if any of the
nominees becomes unavailable for election, the holders of the proxies reserve
the right to substitute another person of their choice as a nominee when
voting at the meeting. Set forth below is information, as of April 1, 1996,
concerning the nominees for election and for the other persons whose terms of
office will continue after the meeting, including age, year first elected a
director of the Company and business experience during the previous five years
of each. The two nominees, if elected at the annual meeting, will serve as
Class I directors for three year terms expiring in 1999.
<TABLE>
<CAPTION>
Nominees
Director Position with the Company and the Subsidiaries
Name (Age) Since and Occupation for the Last Five Years
<S> <C> <C>
CLASS I
(Term Expires 1999)
Kenneth R. Diepholz 1990 Director of the Bank (since 1984) and of the Company;
President,
(Age 57) Diepholz Chevrolet, Oldsmobile, Cadillac and Geo and
Owner, D-Co
Coin Laundry and Diepholz Rentals.
Gary W. Melvin 1990 Director of the Bank (since 1984) and of the Company;
Director of
(Age 46) MIDS (since 1987); Co-Owner, Rural King Stores.
</TABLE>
<TABLE>
<CAPTION>
Continuing Directors
Director Position with the Company and the Subsidiaries
Name (Age) Since and Occupation for the Last Five Years
<S> <C> <C>
CLASS II
(Term Expires 1997)
Richard Anthony Lumpkin 1982 Director of the Bank (since 1966) and of the Company;
Chairman of
(Age 61) the Board of Consolidated Communications Inc.,
Director CIPSCO
Incorporated (since 1995).
William G. Roley 1985 Director of the Bank (since 1992) and of the Company;
retired,
(Age 66) former owner of Roley Real Estate.
William S. Rowland 1991 Chief Financial Officer, Secretary (since 1991),
Treasurer
(Age 49) (since 1989) and Director of the Company; Director of
MIDS
(since 1989); and of Heartland (since 1992); Executive
Vice
President of the Bank (since 1989).
CLASS III
(Term Expires 1998)
Charles A. Adams 1984 Director of the Bank (since 1989), of MIDS (since
1987) and of the
(Age 54) Company; Vice President, Howell Asphalt Company and
President,
Howell Paving Inc.
Daniel E. Marvin, Jr. 1982 Chairman, President, Chief Executive Officer and
Director of the
(Age 57) Company; Director (since 1980), Chairman, President
and Chief
Executive Officer (since 1983) of the Bank; Director
of MIDS
(1987-1992); Director, Chairman (since 1992) and
President
(since 1994) of Heartland.
Ray Anthony Sparks 1994 Director of the Company; Director of Heartland (since
1992);
(Age 39) President of Elasco Agency Sales, Inc. and Electrical
Laboratories and Sales Corporation.
</TABLE>
<PAGE>
All of the Company*s directors will hold office for the terms indicated,
or until their respective successors are duly elected and qualified, and all
executive officers hold office for a term of one year. There are no
arrangements or understandings between any of the directors, executive
officers or any other person pursuant to which any of the Company*s directors
or executive officers have been selected for their respective positions.
Directors of the Company received a $1,500 quarterly retainer for serving
on the Board of Directors in 1995, except Mr. Rowland, who is not separately
compensated for his service on the board. Additionally, the Bank provides a
pension to certain Bank directors who have served for a minimum of ten years
and have attained the age of 65 or older and who were not serving as an
officer of the Bank upon retirement. The pension is equal to 75% of the
regular directors' meeting fees paid to current directors, based upon fourteen
regular meetings in each fiscal year.
Board Committees and Meetings
The Board of Directors of the Company has established an audit committee
and a compensation committee. These committees are composed entirely of
outside directors. The Board has also created other company-wide committees
composed of officers of the Company and the Subsidiaries.
Members of the audit committee are Messrs. Adams, Diepholz, Lumpkin,
Melvin, Roley and Sparks. The audit committee reports to the Board of
Directors and has the responsibility to review and approve internal control
procedures, accounting practices and reporting activities of the Subsidiaries.
The committee also has the responsibility for establishing and maintaining
communications between the Board and the independent auditors and regulatory
agencies. The audit committee reviews with the independent auditors the scope
of their examinations, with particular emphasis on the areas to which either
the audit committee or the auditors believe special attention should be
directed. It also reviews the examination reports of regulatory agencies and
reports to the full Board regarding matters discussed therein. Finally, it
oversees the establishment and maintenance of effective controls over the
business operations of the Subsidiaries. The Audit Committee met four times
in 1995.
The members of the compensation committee are Messrs. Adams, Diepholz,
Lumpkin, Melvin, Roley and Sparks. The compensation committee reports to the
Board of Directors and has responsibility for all matters related to
compensation of executive officers of the Company, including review and
approval of base salaries, conducting a review of salaries of executive
officers compared to other financial services holding companies in the region,
fringe benefits, including modification of the retirement plan, and incentive
compensation. The compensation committee met four times in 1995.
A total of ten regularly scheduled and special meetings were held by the
Board of Directors of the Company during 1995. During 1995, all directors
attended at least 75 percent of the meetings of the Board and the committees
on which they served.
<PAGE>
Transactions With Management
Directors and officers of the Company and the Subsidiaries and their
associates, were customers of and had transactions with the Company and the
Subsidiaries during 1995. Additional transactions may be expected to take
place in the future. All outstanding loans, commitments to loan, transactions
in repurchase agreements and certificates of deposit and depository
relationships, in the opinion of management, were made in the ordinary course
of business, on substantially the same terms, including interest rates and
collateral, as those prevailing at the time or comparable transactions with
other persons and did not involve more than the normal risk of collectibility
or present other unfavorable features.
EXECUTIVE COMPENSATION
The following table shows the compensation earned for the last three
fiscal years by the Chief Executive Officer and those executive officers of
the Company and the Subsidiaries whose 1995 salary and bonus exceeded
$100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE Annual Compensation
(a) (b) (c) (d) (e)
Name and Principal Position Fiscal Year
Ended All Other
December 31st Salary($)(1) Bonus($) Compensation($)
<S> <C> <C> <C> <C>
Daniel E. Marvin, Jr., President and 1995 $ 164,000 $ 48,163 $ 26,001 (2)
Chief Executive Officer 1994 160,255 35,040 23,048 (2)
1993 150,255 33,862 24,328 (2)
William S. Rowland, Chief Financial 1995 $ 101,000 $ 21,651 $ 11,940 (3)
Officer 1994 96,000 13,590 11,971 (3)
1993 85,000 12,844 10,947 (3)
Dan R. Cunningham, Vice President 1995 $ 93,000 $ 13,857 $ 6,411 (4)
1994 90,000 11,970 6,582 (4)
1993 80,000 11,000 5,429 (4)
Stanley E. Gilliland, Vice President 1995 $ 86,000 $ 15,738 $ 6,103 (4)
1994 82,260 12,636 5,477 (4)
1993 75,000 11,231 4,819 (4)
<FN>
<F1>
(1) Includes deferred amounts.
<F2>
(2) Represents the Company's contributions to its retirement plan and the
premium payments for an insurance policy purchased to fund a supplemental
retirement and death benefit for Mr. Marvin. These amounts were $12,720 and
$13,281 for 1995, $10,874 and $12,174 for 1994 and $11,047 and $13,281 for
1993, respectively.
<PAGE>
<F3>
(3) Represents the Company's contributions to its retirement plan and the
premium payments for an insurance policy purchased to fund a supplemental
retirement and death benefit for Mr. Rowland. These amounts were $6,060 and
$5,880 for 1995, $6,091 and $5,800 for 1994 and $5,067 and $5,800 for 1993,
respectively.
<F4>
(4) Represents the Company's contributions to its retirement plan.
</FN>
</TABLE>
The Compensation Committee has furnished the following report on
executive compensation. The incorporation by reference of this Proxy
Statement into any document filed with the Securities and Exchange Commission
by the Company shall not be deemed to include such report unless the report is
specifically stated to be incorporated by reference into such document.
Compensation Committee Report
As members of the Compensation Committee, it is our duty to evaluate the
performance of management, review total management compensation levels and
consider management succession and other related matters. The Committee
reviews and approves in detail all aspects of compensation for the nine
highest paid officers within the Company and uses state, regional and national
salary studies to ascertain existing market conditions for personnel. No
member of the Committee is a former or current officer or employee of the
Company or any of the Subsidiaries.
The compensation philosophy of the Company is that a portion of the
annual compensation of each officer relates to and must be contingent upon the
performance of the Company, as well as the individual contribution of each
officer. As a result, a portion of each executive officer's annual
compensation is based upon the officer's performance, the performance of the
operating unit for which the officer has primary responsibility and the
performance of the Company as a whole. In 1993, the formulas for measuring
performance and awarding bonuses were refined and improved so as to more
objectively link financial and individual performance with bonus amounts.
During 1995, the Company's earnings improved and its market share
increased significantly. Additionally, various other improvements were made
in the Company's operating and administrative functions. Accordingly, Messrs.
Marvin, Rowland, Cunningham and Gilliland were awarded incentive bonuses of
$48,163, $21,651, $13,857 and $15,738, respectively. The relationships
between the base salaries and incentive compensation of Messrs. Marvin,
Rowland and Cunningham for 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
Incentive compensation as a % of Base Salary
1995 1994 1993
<S> <C> <C> <C>
Mr. Marvin 29% 22% 23%
Mr. Rowland 21% 15% 15%
Mr. Cunningham 15% 13% 14%
Mr. Gilliland 18% 15% 15%
</TABLE>
<PAGE>
Submitted by the Compensation Committee Members
Charles A. Adams
Kenneth R. Diepholz
Richard A. Lumpkin
Gary W. Melvin
William G. Roley
Ray Anthony Sparks
The incorporation by reference of this Proxy Statement into any document
filed with the Securities and Exchange Commission by the Company shall not be
deemed to include the following performance graph and related information
unless the graph and related information are specifically stated to be
incorporated by reference into such document.
Performance Graph
The line graph below compares the cumulative total stockholder return on
a $100 investment in the Company's Common Stock to the cumulative total return
of the S & P 500 Index and the Nasdaq Bank Stock Index for the period December
31, 1990 through December 31, 1995. The S&P 500 Index and the Nasdaq Bank
Stock Index were calculated at the Company's request by Research Data Group,
San Francisco, California.
CUMULATIVE TOTAL RETURN *
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C> <C>
First Mid-Illinois $100 $100 $153 $200 $206 $272
Bancshares, Inc.
Nasdaq Bank Stocks $100 $164 $239 $272 $271 $404
S&P 500 $100 $130 $140 $155 $157 $215
<FN>
<F1>
* Total return assumes reinvestment of dividends
</FN>
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
Company*s Common Stock beneficially owned on April 1, 1996 with respect to all
persons known to the Company to be the beneficial owner of more than five
percent of the Company Common Stock, each director and nominee, each executive
officer named in the Summary Compensation Table and all directors and
executive officers of the Company as a group.
<PAGE>
<TABLE>
<CAPTION>
Name of Individual and Amount and Nature of Percent
Number of Persons in Group Beneficial Ownership (1) of Class
<S> <C> <C>
5% Stockholders
Margaret Lumpkin Keon 65,418 (2) 7.2%
16 Miller Avenue, Suite 203
Mill Valley, California 94941
Mary Lumpkin Sparks 91,687 (3) 10.1%
2438 Campbell Road, N.W.
Alburquerque, New Mexico 87104
Directors
Charles A. Adams 55,758 (4) 5.9%
Kenneth R. Diepholz 15,481 (5) 1.7%
Richard Anthony Lumpkin 187,365 (6) 20.2%
Daniel E. Marvin, Jr. 11,357 (7) 1.3%
Gary W. Melvin 38,912 (8) 4.2%
William G. Roley 16,773 (9) 1.8%
William S. Rowland 3,246 (10) *
Ray Anthony Sparks 5,483 (11) *
Other Named Executive Officers
Dan R. Cunningham 1,879 (12) *
Stanley E. Gilliland 2,177 (13) *
All directors and executive officers
as a group (11 persons) 338,535 (14) 33.8%
<FN>
<F1>
* Less than one percent.
<F2>
(1) The information contained in this column is based upon information
furnished to the Company by the persons named above and the members of the
designated group. The nature of beneficial ownership for shares shown in this
column is sole voting and investment power, except as set forth in the
footnotes below. Inclusion of shares shall not constitute an admission of
beneficial ownership.
<F3>
(2) The above amount includes 10,105 shares obtainable through the conversion
of Preferred Stock held by Ms. Keon, 550 shares held directly by Ms. Keon and
54,763 shares held under the Margaret L. Keon Trust, established under Article
5 of the Mary G. Lumpkin Trust dated January 31, 1984, of which trust Ms. Keon
is trustee and beneficiary.
<PAGE>
<F4>
(3) The above amount includes 10,105 shares obtainable through the conversion
of Preferred Stock and 54,763 shares held under the Mary L. Sparks Trust,
established under Article 5 of the Mary G. Lumpkin Trust dated January 31,
1984, with respect to which shares Mrs. Sparks has no voting or investment
power. The shares held by this trust are also included in the number of
shares reported as beneficially owned by Mr. Richard A. Lumpkin in this table.
The above amount also includes 571 shares held directly by Mrs. Sparks and
26,248 shares held in trust for the benefit of Richard Anthony Lumpkin's adult
children for which Mrs. Sparks serves as trustee and of which shares Mrs.
Sparks disclaims beneficial ownership.
<F5>
(4) The above amount includes 40,420 shares obtainable through the conversion
of Preferred Stock held by Mr. Adams. Also includes 3,022 shares held by a
corporation and over which Mr. Adams has shared voting and investment power
and 987 shares held by Mr. Adams' spouse, over which shares Mr. Adams has no
voting or investment power.
<F6>
(5) The above amount includes 7,074 shares obtainable through the conversion
of Preferred Stock held by Mr. Diepholz.
<F7>
(6) The above amount includes 20,210 shares obtainable through the conversion
of Preferred Stock held by Mr. Lumpkin and by the Richard A. Lumpkin Trust, of
which Mr. Lumpkin is trustee, 20,899 shares held directly by Mr. Lumpkin and
4,706 shares held by The Lumpkin Foundation, of which Mr. Lumpkin serves as a
director. The above amount also includes 54,763 shares held under the Richard
A. Lumpkin Trust, and further includes 10,105 shares obtainable through the
conversion of Preferred Stock and 54,763 shares held under the Mary Lee Sparks
Trust, of which Mr. Lumpkin is trustee. Each such trust has been established
under Article 5 of the Mary G. Lumpkin Trust dated January 31, 1984. The
above amount also includes 21,919 shares held by Consolidated Communications
Inc., of which Mr. Lumpkin is Chairman of the Board, director and Chief
Executive Officer and of which shares beneficial ownership is disclaimed. The
above amount does not include 30,951 shares held by the adult children of Mr.
Lumpkin and 26,248 shares held in trust for the benefit of Mr. Lumpkin*s adult
children of which trust Mr. Lumpkin is not a trustee and of which shares
beneficial ownership is also disclaimed.
<F8>
(7) The above amount includes 2,425 shares obtainable through the conversion
of Preferred Stock held by Mr. Marvin. The above amount also includes 1,495
shares held by Mr. Marvin's spouse, over which shares Mr. Marvin has no voting
or investment power and of which Mr. Marvin disclaims beneficial ownership.
<F9>
(8) The above amount includes 20,210 shares obtainable through the conversion
of Preferred Stock held by Mr. Melvin.
<F10>
(9) The above amount includes 2,021 shares obtainable through the conversion
of Preferred Stock held by Mr. Roley. The above amount also includes 2,021
shares obtainable through the conversion of Preferred Stock and 5,559 shares
held in a trust for which Mr. Roley's spouse serves as trustee and over which
shares Mr. Roley has no voting or investment power.
<F11>
(10) The above amount includes 2,425 shares obtainable through the conversion
of Preferred Stock held by Mr. Rowland.
<F12>
(11) The above amount includes 1,496 shares held by Mr. Sparks' children and
over which Mr. Sparks' shares voting and investment power.
<PAGE>
<F13>
(12) The above amount includes 1,213 shares obtainable through the conversion
of Preferred Stock held by Mr. Cunningham.
<F14>
(13) The above amount includes 1,011 shares obtainable through the conversion
of Preferred Stock held by Mr. Gilliland.
<F15>
(14) Includes an aggregate of 104,509 shares obtainable through the conversion
of Preferred Stock.
</FN>
</TABLE>
As of March 11, 1996, the Bank acted as sole or co-fiduciary with respect
to trusts and other fiduciary accounts which own or hold 48,418 shares or
5.39% of the outstanding Common Stock of the Company over which the Bank has
sole or shared voting power and/or sole or shared investment power. Of such
shares, the Bank has sole voting and investment power with respect to 42,368
shares, or 4.72%, of the outstanding Common Stock, and has shared voting and
investment power with respect to 6,050 shares, or 0.67%, of the outstanding
Common Stock.
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires that the Company*s directors, executive officers and persons who own
more than 10% of the Company*s Common Stock file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Such
persons are also required to furnish the Company with copies of all Section
16(a) forms they file. Based solely on the Company*s review of the copies of
such forms, the Company is not aware that any of its directors and executive
officers or 10% stockholders failed to comply with the filing requirements of
Section 16(a) during the period commencing January 1, 1995 through December
31, 1995.
PROPOSAL TO ADOPT THE DEFERRED COMPENSATION PLAN
The Board of Directors has adopted, subject to stockholder approval, the
First Mid-Illinois Bancshares, Inc. Deferred Compensation Plan (the "Plan"),
to permit directors, advisory directors and key officers of the Company and
its Subsidiaries to elect to defer a portion of the fees and cash compensation
payable by the Company and its Subsidiaries on account of service as a
director or employee. The Plan is intended as a means of maximizing the
effectiveness and flexibility of the compensation arrangements to directors
and a select group of management and highly compensated employees of the
Company and its Subsidiaries, and as an aid in attracting and retaining
individuals of outstanding abilities and specialized skills, thereby advancing
the interests of the Company and its stockholders.
The Company has maintained a deferred compensation plan for its directors
since June 1984. Under the former deferred compensation plan, as amended from
time to time, amounts deferred by directors were invested into a master
certificate of deposit account at the Bank. In November 1995, the Board of
Directors approved the Plan, which is an amended version of the former
deferred compensation plan. The Plan, as adopted in November 1995, expands
the categories of individuals eligible to defer compensation to include
advisory directors and key officers, and provides that amounts deferred under
the Plan will generally be invested into shares of the Company's Common Stock,
as more fully described below. The Plan is intended to replace the former
deferred compensation plan, and is subject to the approval of the Company's
stockholders.
<PAGE>
The Plan is administered by the Deferred Compensation Plan Committee (the
"Deferred Compensation Committee"). The Plan provides that all directors and
advisory directors of the Company and its Subsidiaries are eligible to
participate in the Plan, and provides that the Deferred Compensation
Committee, in its sole discretion, may select additional eligible employees of
the Company and its Subsidiaries to participate in the Plan. The Plan
authorizes directors and advisory directors to defer the receipt of all of
their director fees and provides that such amounts may be invested into either
shares of Common Stock or into a master certificate of deposit account held at
the Bank. Key employees selected to participate in the Plan may defer the
receipt of up to 15% of their base salary and up to 100% of their incentive
compensation, subject to certain restrictions. Base salary and incentive
compensation deferred by key employees will be invested into Common Stock.
The Plan authorizes participants to purchase, in the aggregate, up to
100,000 shares of Common Stock, which shares may be purchased for use under
the Plan in the open market or may be issued directly by the Company. In the
event that the number of outstanding shares of Common Stock are changed into
or exchanged for a different number or kind of shares of capital stock or
other securities by reason of a reorganization, merger, consolidation,
recapitalization, stock dividend, split-up or stock right distribution or
other similar modification, the Plan provides that the Board of Directors
shall make an equitable adjustment in the number and kind of shares covered by
the Plan. The price at which shares will be deemed purchased under the Plan
shall be the actual purchase price for shares purchased in the open market and
shall be determined by the Board of Directors in accordance with the Company's
Dividend Reinvestment Plan with respect to shares issued directly by the
Company. The Company will not receive any of the amounts used to purchase
shares on the open market, but will receive the full purchase price of shares
issued directly by the Company under the Plan. In lieu of actual purchases,
the Plan also permits amounts deferred under the Plan and not directed into
the certificate of deposit account to be deemed to be invested in shares of
Common Stock without actual purchases of such shares being effectuated. In
the case of deemed investments in Common Stock, amounts deferred will accrue
appreciation in amounts equivalent to the appreciation which would have
accrued had actual purchases been made under the Plan, and will be credited to
each participant's account on a quarterly basis.
Subject to certain hardship provisions, no shares of Common Stock or
other amounts in a participant's account may be distributed until the March
15th following the date such participant terminates service with the Company
and its Subsidiaries. At the discretion of the Board of Directors, amounts to
be distributed under the Plan will be paid in one lump sum or in five annual
payments. Shares of Common Stock purchased under the Plan will only be
distributed to a participant upon delivery to the Company of such
representations and warranties as the Company deems necessary or advisable
with respect to the investment intent of the participant as required by the
Securities Act of 1933, as amended, and any other federal or state securities
laws or regulations. The Company is not required to deliver shares purchased
under the Plan prior to: (a) such shares becoming listed for trading on any
stock exchange on which the Common Stock may then be listed, if any; and (b)
the completion of such registration or other qualification of such shares
under any state or federal law, rule or regulation, as the Deferred
Compensation Committee shall determine to be necessary or advisable. The
Company presently intends to maintain an effective registration statement with
respect to the sale of shares to Plan participants, but is not required to
maintain such registration under the provisions of the Plan.
<PAGE>
The Plan is intended to comply with Rule 16b-3 ("Rule 16b-3") under the
Exchange Act so that purchases of shares under the Plan will be exempt from
the short-swing profit prohibitions set forth in Section 16(b) of the Exchange
Act. Subject to certain limitations, including those currently applicable
pursuant to Rule 16b-3, the Company's Board of Directors may amend the Plan
from time to time. Under Rule 16b-3, as presently in effect, stockholder
approval is required for any amendment to the Plan which would increase
materially the number of shares issuable under the Plan, increase materially
the benefits which may be provided under the Plan or modify materially the
eligibility requirements for participation in the Plan. In addition, no
amendment may impair the existing rights of any individual under the Plan,
unless the individual consents to such amendment.
The Plan is also intended to be administered as a nonqualified deferred
compensation plan for a select group of management or highly compensated
employees. Assuming that the Plan is administered in such manner, amounts
deferred and earnings accrued under the Plan are not recognized in the
respective participant's federal taxable income until such contributions or
earnings are actually distributed or withdrawn from the Plan. The Company
will not be entitled to a compensation expense deduction for amounts deferred
under the Plan and will be required to pay income tax on all earnings on
amounts held in the Plan which accrue under the Plan while such amounts remain
in the Plan. Upon distribution or withdrawal of any such amounts, the
respective participant will be subject to income tax on such amounts and the
Company will receive a compensation expense deduction in the amount of the
withdrawal or distribution.
The information regarding federal tax laws contained in the foregoing is
only a brief summary of the applicable federal income tax laws and should not
be relied upon as being a complete statement. Further, income tax laws may
change after the date of this proxy statement.
The Board of Directors unanimously recommends that the stockholders vote
FOR the proposal to amend the Deferred Compensation Plan.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Stockholders will be asked to approve the appointment of KPMG Peat
Marwick LLP as the Company*s independent public accountants for the year
ending December 31, 1996. A proposal will be presented at the annual meeting
to ratify the appointment of KPMG Peat Marwick. If the appointment of KPMG
Peat Marwick is not ratified, the matter of the appointment of independent
public accountants will be considered by the Board of Directors.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
meeting and will be given the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR ratification of
this appointment.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
For inclusion in the Company's Proxy Statement and form of proxy relating
to the 1996 Annual Meeting of Stockholders, stockholder proposals must be
received by the Company on or before December 12, 1996 and must otherwise
comply with the Company's bylaws.
<PAGE>
GENERAL
Your proxy is solicited by the Board of Directors and the cost of
solicitation will be paid by the Company. In addition to the solicitation of
proxies by use of the mails, officers, directors and regular employees of the
Company or the Subsidiaries, acting on the Company*s behalf, may solicit
proxies by telephone, telegraph or personal interview. The Company will, at
its expense, upon the receipt of a request from brokers and other custodians,
nominees and fiduciaries, forward proxy soliciting material to the beneficial
owners of shares held of record by such persons.
OTHER BUSINESS
It is not anticipated that any action will be asked of the stockholders
other than that set forth above, but if other matters properly are brought
before the meeting, the persons named in the proxy will vote in accordance
with their best judgment.
FAILURE TO INDICATE CHOICE
If any stockholder fails to indicate a choice in items (1) (2) or (3) on
the proxy card, the shares of such stockholder shall be voted (FOR) in each
instance.
REPORT ON FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON REPRESENTING THAT
HE OR SHE WAS A BENEFICIAL OWNER OF THE COMPANY*S COMMON STOCK AS OF THE
RECORD DATE FOR THE MEETING, UPON WRITTEN REQUEST, A COPY OF THE COMPANY*S
ANNUAL REPORT ON FORM 10-K. SUCH WRITTEN REQUEST SHOULD BE SENT TO MR.
WILLIAM S. ROWLAND, FIRST MID-ILLINOIS BANCSHARES, INC., 1515 CHARLESTON
AVENUE, P.O. BOX 499, MATTOON, ILLINOIS 61938.
By order of the Board of Directors
Daniel E. Marvin, Jr.
Chairman
Mattoon, Illinois
April 12, 1996
ALL STOCKHOLDERS ARE URGED TO SIGN AND MAIL THEIR PROXIES PROMPTLY
<PAGE>
[side 1 of proxy card]
PROXY FIRST MID-ILLINOIS BANCSHARES, INC. PROXY
Proxy is Solicited By the Board of Directors
For the Annual Meeting of Stockholders -- May 15, 1996
The undersigned hereby appoints Ronald Batterham, Dan R. Cunningham and
Stanley E. Gilliland, or any of them acting in the absence of the others, with
power of substitution, attorneys and proxies, for and in the name and place of
the undersigned, to vote the number of shares of Common Stock that the
undersigned would be entitled to vote if then personally present at the Annual
Meeting of the Stockholders of First Mid-Illinois Bancshares, Inc., to be held
at the Ramada Inn, 300 Broadway Avenue, East in Rooms A B and C, Mattoon,
Illinois 61938, on Wednesday, May 15, 1996, at 11:00 a.m., local time, or any
adjournments or postponements thereof, upon the matters set forth in the
Notice of Annual Meeting and Proxy Statement (receipt of which is hereby
acknowledged) as designated on the reverse side, and in their discretion, the
proxies are authorized to vote upon such other business as may come before the
meeting:
(square) Check here for address change.
New Address:
(square) Check here if you plan to attend the meeting.
(Continued and to be signed on reverse side.)
[side 2 of proxy card]
FIRST MID-ILLINOIS BANCSHARES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
1. Election of Directors
Kenneth R. Diepholz and Gary W. Melvin
2. To approve the adoption of the First Mid-Illinois Bancshares, Inc.
Deferred Compensation Plan
3. To ratify the selection of KPMG Peat Marwick LLP as auditors for the
Company for 1996.
The Board of Directors recommends a vote FOR all proposals.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATION MADE. IF NO CHOICES
ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS.
Dated: , 1996
Signature(s)
NOTE: Please sign exactly as your name(s) appears. For joint accounts, each
owner should sign. When signing as executor, administrator, attorney, trustee
or guardian, etc., please give your full title.
<PAGE>
