SCHEDULE 14A - INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities and Exchange
Act of 1934
Filed by the Registrant {X}
Filed by a Party other than the Registrant { }
Check the appropriate box:
{X} Preliminary Proxy Statement
{ } Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
{ } Definitive Proxy Statement
{ } Definitive Additional Materials
{ } Soliticiting 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)
Not applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
{X} No fee required
{ } Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transactions 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
{ } Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identifying the filing for which the offsetting fee
was paid previously. Identiry 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>
First Mid-Illinois Bancshares, Inc.
April 16, 1997
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 21, 1997, 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 1996 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 also nominated three persons to serve as
Class II directors. Each of the nominees are incumbent directors. 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, 1997.
We are also pleased to announce that the Company's Board of Directors has
put forth a special matter for consideration at this year's annual meeting.
As a result of the Company's continued growth, the Board has announced its
intention to declare a two-for-one stock split in the form of a stock
dividend. In order to have sufficient shares of common stock available for
the special stock dividend, the Board has proposed increasing the number of
authorized shares of common stock of the Company. The proposal to amend the
Company's Restated Certificate of Incorporation in this regard is described in
the accompanying Proxy Statement. The Board is very proud of the Company's
performance and recommends that stockholders vote in favor of the proposed
amendment.
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 21, 1997
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 21, 1997, at 11:00 a.m., local time, for the following
purposes:
1. to elect three Class II directors for a term of three years.
2. to amend Article IV of the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of Common
Stock, $4.00 par value per share, from 2,000,000 to 6,000,000
shares.
3. to approve the appointment of KPMG Peat Marwick LLP as independent
public accountants for the Company for the fiscal year ending
December 31, 1997.
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, 1997,
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 16, 1997
<PAGE>
FIRST MID-ILLINOIS BANCSHARES, INC.
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 21, 1997, 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 to First
Mid-Illinois Bancshares, Inc., 1515 Charleston Avenue, P.O. Box 499, Mattoon,
Illinois 61938, Attention: Mr. William S. Rowland. 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 16, 1997. The 1996 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, Arcola, Effingham, Charleston, Sullivan,
Tuscola 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, 1997 will be
entitled to vote at the annual meeting or any adjournments or postponements of
such meeting. On April 1, 1997, the Company had 947,680 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. Approval of the amendment to the
Company's Restated Certificate of Incorporation requires the approval of a
majority of the outstanding shares of Common Stock. In all other matters, 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 21, 1997, the
stockholders will be entitled to elect three (3) Class II directors for a term
expiring in 2000. The directors of the Company are divided into three classes
having staggered terms of three years. Each of the nominees for election as
Class II 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, 1997,
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 three nominees, if elected at the annual meeting, will serve as
Class II directors for three year terms expiring in 2000.
NOMINEES
<TABLE>
<CAPTION>
Position with the Company and
Name Director the Subsidiaries and Occupation
(AGE) SINCE FOR THE LAST FIVE YEARS
<S> <C> <C>
CLASS II
(TERM EXPIRES 2000)
Richard Anthony Lumpkin 1982 Director of the Bank (since 1966) and
(Age 62) of the Company; Chairman of the Board
of Consolidated Communications Inc.,
Director CIPSCO Incorporated (since
1995).
William G. Roley 1985 Director of the Bank (since 1992) and
(Age 67) of the Company; retired, former owner
of Roley Real Estate.
William S. Rowland 1991 Chief Financial Officer, Secretary
(Age 50) (since 1991), Treasurer (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).
CONTINUING DIRECTORS
CLASS III
(TERM EXPIRES 1998)
Charles A. Adams 1984 Director of the Bank (since 1989), of
(Age 55) MIDS (since 1987) and of the Company;
Vice President, Howell Asphalt Company
and President, Howell Paving, Inc.
Daniel E. Marvin, Jr. 1982 Chairman, President, Chief Executive
(Age 58) Officer and Director of the Company;
Director (since 1980), Chairman,
President and Chief Executive Officer
(since 1983) of the Bank; Director of
MIDS (1987-1992); Director, Chairman
(since 1992) of Heartland
Ray Anthony Sparks 1994 Director of the Company; Director of
(Age 40) Heartland (since 1992); Director of
MIDS (since 1996); President of Elasco
Agency Sales, Inc. and Electrical
Laboratories and Sales Corporation.
CLASS I
(TERM EXPIRES 1999)
Kenneth R. Diepholz 1990 Director of the Bank (since 1984) and
(Age 58) of the Company; President, 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
(Age 47) of the Company; Director of MIDS (since
1987); Co-Owner, Rural King Stores.
</TABLE>
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 $1,800 QUARTERLY RETAINER FOR SERVING
ON THE BOARD OF DIRECTORS IN 1996, EXCEPT MR. ROWLAND WHO IS NOT SEPARATELY
COMPENSATED FOR HIS SERVICES 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.
<PAGE>
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 1996.
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 two times in 1996.
A total of 12 regularly scheduled and special meetings were held by the
Board of Directors of the Company during 1996. During 1996, all directors
attended at least 75 percent of the meetings of the Board and the committees
on which they served.
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 1996. 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.
<PAGE>
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 1996 salary and bonus exceeded
$100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C>
Annual Compensation
(a) (b) (c) (D) (H)
Fiscal
Year ALL OTHER
Name and Ended COMPENSATION
Principal Position December 31st Salary($){(1)} BONUS ($) ($)
Daniel E. Marvin, Jr., 1996 $ 170,338 $ 54,848 $ 26,792{(2)}
President & 1995 164,000 48,163 26,001{(2)}
Chief Executive Officer 1994 160,255 35,040 23,048{(2)}
William S. Rowland, 1996 $ 105,338 $ 23,570 $ 12,018{(3)}
Chief Financial Officer 1995 101,000 21,651 11,940{(3)}
1994 96,000 13,590 11,971{(3)}
Stanley E. Gilliland, 1996 $ 91,338 $ 15,435 $ 6,407{(4)}
Vice President 1995 86,000 15,738 6,103{(4)}
1994 82,620 12,636 5,477{(4)}
<FN>
<F1>
(1) Includes deferred amounts.
<F2>
(2) Represents the Company's contributions to its retirement plan for 1996,
1995 and 1994 of $13,511, $12,720 and $10,874, respectively, and premium
payments for an insurance policy purchased to fund a supplemental
retirement and death benefit for Mr. Marvin in the amount of $13,281 for
1996, $13,281 for 1995 and $12,174 for 1994.
<F3>
(3) Represents the Company's contributions to its retirement plan for 1996,
1995 and 1994 of $6,120, $6,060 and $6,091, respectively, and an annual
premium payment for an insurance policy purchased to fund a supplemental
retirement and death benefit for Mr. Rowland in the amount of $5,898 in
1996 and $5,880 for 1995 and 1994.
<F4>
(4) Represents the Company's contributions to its retirement plan.
</FN>
</TABLE>
<PAGE>
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 SUCH 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 1996, the Company's net income amounted to $4,166,000, a $242,000
(6.2%) improvement from 1995's comparable earnings level. In addition, the
Company's market share increased significantly and various other improvements
were made in the Company's operating and administrative functions.
Accordingly, Messrs. Marvin, Rowland and Gilliland were awarded incentive
bonuses of $54,848, $23,570 and $15,435, respectively. The relationships
between the base salaries and incentive compensation of Messrs. Marvin,
Rowland and Gilliland for 1996, 1995 and 1994 were as follows:
INCENTIVE COMPENSATION AS A % OF BASE SALARY
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 1994
Mr. Marvin 32% 29% 22%
Mr. Rowland 22% 21% 15%
Mr. Gilliland 17% 18% 15%
</TABLE>
SUBMITTED BY THE COMPENSATION COMMITTEE MEMBERS
Charles A. Adams
Kenneth R. Diepholz
Richard A. Lumpkin
Gary W. Melvin
William G. Roley
Ray Anthony Sparks
<PAGE>
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 UNLESS SUCH GRAPH IS
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, 1991 through December 31, 1996. 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{*}
* Total return assumes reinvestment of dividends
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
First Mid-Illinois Bancshares, Inc $100 $138 $180 $186 $245 $299
Nasdaq Bank Stocks $100 $146 $166 $165 $246 $326
S&P 500 $100 $108 $118 $120 $165 $203
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
Company's Common Stock beneficially owned on February 28, 1997 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.
<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 66,800{(2)} 7.0%
16 Miller Avenue
Suite 203
Mill Valley, California 94941
Mary Lumpkin Sparks 94,245{(3)} 9.8%
2438 Campbell Road, N.W.
Albuquerque, New Mexico 87104
DIRECTORS
Charles A. Adams 62,412{(4)} 6.3%
Kenneth R. Diepholz 15,481{(5)} 1.6%
Richard Anthony Lumpkin 196,975{(6)} 20.1%
Daniel E. Marvin, Jr. 13,719{(7)} 1.4%
Gary W. Melvin 43,476{(8)} 4.5%
William G. Roley 19,296{(9)} 2.0%
William S. Rowland 4,628{(10)} *
Ray Anthony Sparks 10,984{(11)} 1.2%
OTHER EXECUTIVE OFFICERS
Stanley E. Gilliland 3,244{(12)} *
All directors and executive
officers as a group
(13 persons) 370,680{(13)} 35.1%
_____________
* Less than one percent.
<FN>
<F1>
(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.
<F2>
(2) The above amount includes 10,105 shares obtainable through the conversion
of Preferred Stock held by Ms. Keon and 56,695 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.
<F3>
(3) The above amount includes 10,105 shares obtainable through the conversion
of Preferred Stock and 56,695 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 585 shares held directly
by Mrs. Sparks and 26,860 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.
<F4>
(4) The above amount includes 5,706 shares of Common Stock and 40,420 shares
obtainable through the conversion of Preferred Stock held by a
corporation over which Mr. Adams is deemed to control. The above amount
also includes 1,010 shares held by Mr. Adams' spouse, over which shares
Mr. Adams has no voting and investment power. The above amount does not
include 797 shares held by adult children of Mr. Adams.
<F5>
(5) The above amount includes 7,074 shares obtainable through the conversion
of Preferred Stock held by Mr. Diepholz.
<F6>
(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 and beneficiary, 26,023 shares
held directly by Mr. Lumpkin and 4,816 shares held by The Lumpkin
Foundation, of which Mr. Lumpkin serves as a director. The above amount
also includes 56,695 shares held under the Richard A. Lumpkin Trust, and
further includes 10,105 shares obtainable through the conversion of
Preferred Stock and 56,695 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 22,431 shares held by Consolidated
Communications Inc., of which Mr. Lumpkin is Chairman of the Board, and
of which shares beneficial ownership is disclaimed. The above amount
does not include 32,173 shares held by adult children of Mr. Lumpkin and
26,860 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.
<F7>
(7) The above amount includes 2,425 shares obtainable through the conversion
of Preferred Stock held by Mr. Marvin. The above amount also includes
1,530 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.
<F8>
(8) The above amount includes 20,210 shares obtainable through the conversion
of Preferred Stock held by Mr. Melvin.
<F9>
(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
12,750 shares held in trust for the benefit of Mr. Roley's spouse, over
which shares Mr. Roley has shared voting and investment power and of
which Mr. Roley disclaims beneficial ownership.
<F10>
(10) The above amount includes 2,425 shares obtainable through the conversion
of Preferred Stock held by Mr. Rowland.
<F11>
(11) The above amount includes 3,531 shares held by Mr. Sparks' children, over
which Mr. Sparks shares voting and investment power.
<F12>
(12) The above amount includes 1,011 shares obtainable through the conversion
of Preferred Stock held by Mr. Gilliland.
<F13>
(13) Includes an aggregate of 107,921 shares obtainable through conversion of
Preferred Stock.
</FN>
</TABLE>
As of February 28, 1997, the Bank acted as sole or co-fiduciary with
respect to trusts and other fiduciary accounts which own or hold 51,014 shares
or 5.38% of the outstanding Common Stock of the Company, over which the Bank
has sole voting and investment power with respect to 42,964 shares or 4.53% of
the outstanding Common Stock and shared voting and investment power with
respect to 8,050 shares or .85% of the outstanding Common Stock.
Section 16(a) of the Securities Exchange Act of 1934 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, 1996 through December 31, 1996.
<PAGE>
PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has unanimously approved an
amendment (the "Amendment") to Article IV of the Company's Certificate of
Incorporation (the "Certificate") that would increase the number of authorized
shares of the Company's Common Stock, $4.00 par value per share, from
2,000,000 shares to 6,000,000 shares. The Board of Directors has also
approved a resolution providing for a two-for-one stock split of the Common
Stock in the form of a stock dividend if the Amendment is approved. It is
anticipated that the distribution date for the proposed stock split will be
shortly after the annual meeting. As of April 1, 1997, the Company had
947,680 shares of Common Stock issued and outstanding.
The Board of Directors has proposed adoption of the Amendment for several
reasons, including those set forth below. First, the Amendment will provide
for the additional shares of Common Stock necessary to effectuate the proposed
stock split. As a result of the stock split, the number of shares of Common
Stock owned by each of the Company's stockholders as of the record date for
the stock split will double, and each such share will have approximately half
of the per share value of Common Stock prior to the stock split. The decrease
in the per share value of Common Stock should also lead to a commensurate
decrease in the per share market price, thus making an investment in Common
Stock by existing or potential stockholders of the Company more readily
possible.
Second, the additional shares authorized by the Amendment will provide
management with enough shares of Common Stock to enter into certain
transactions involving the use of Common Stock that may be advisable from time
to time. Such transactions could include, but are not limited to, the
acquisition by the Company of additional branch locations, subsidiaries or
bank or thrift holding companies. Although no such transactions are planned
for the immediate future, management and the Board of Directors believe that
it is in the Company's best interests to have available a sufficient number of
authorized shares of Common Stock if such transactions become advisable.
Third, the additional shares of Common Stock authorized by the Amendment
could be used to raise additional working capital for the Company or the
Subsidiaries. The Board of Directors does not currently have any plans to
raise capital through the issuance of additional shares or otherwise, but
these shares would be available for that purpose.
The increase in the number of shares of Common Stock authorized by the
Amendment will allow for the possibility of substantial dilution of the voting
power of current stockholders of the Company, although no dilution will occur
as a direct result of the proposed stock split. The degree of any such
dilution which would occur following the issuance of any additional shares of
Common Stock, including any newly authorized Common Stock, would depend upon
the number of shares of Common Stock that are actually issued in the future,
which number cannot be determined at this time. Issuance of a large number of
such shares could significantly dilute the voting power of existing
stockholders.
The existence of a substantial number of authorized and unissued shares
of Common Stock could also impede an attempt to acquire control of the Company
because the Company would have the ability to issue additional shares of
Common Stock in response to any such attempt. The Company is not aware of any
such attempt to acquire control at this time, and no decision has been made as
to whether any or all newly authorized but unissued shares of Common Stock
would be issued in response to any such attempt.
To be approved by the Company's stockholders, the Amendment must receive
the affirmative vote of a majority of the outstanding shares of Common Stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE YOUR SHARES FOR THE AMENDMENT.
<PAGE>
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, 1997. A proposal will be presented at the annual meeting
to ratify the appointment of KPMG Peat Marwick LLP. If the appointment of
KPMG Peat Marwick LLP 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 1998 ANNUAL MEETING
For inclusion in the Company's Proxy Statement and form of proxy relating
to the 1998 Annual Meeting of Stockholders, stockholder proposals must be
received by the Company on or before December 17, 1997 and must otherwise
comply with the Company's bylaws.
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 16, 1997
ALL STOCKHOLDERS ARE URGED TO SIGN
AND MAIL THEIR PROXIES PROMPTLY
<PAGE>
PROXY FIRST MID-ILLINOIS BANCSHARES, INC. PROXY
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- MAY 21, 1997
The undersigned hereby appoints Dan R. Cunningham, Stanley E. Gilliland
and Alfred M. Wooleyhan, Jr., 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 21, 1997, 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:
{ } Check here for address change.
{ } Check here if you plan to attend the meeting.
New Address:
(Continued and to be signed on reverse side.)
<PAGE>
FIRST MID-ILLINOIS BANCSHARES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
Election of Directors
Richard Anthony Lumpkin, William G.
Roley and William S. Rowland
To amend the Certificate of Incorporation to increase the number of
authorized shares of Common Stock.
To ratify the selection of KPMG Peat Marwick LLP as auditors for the
Company for 1997.
The Board of Directors recommends a vote FOR all proposals.
To ratify the selection of KPMG Peat Marwick LLP as auditors for the
Company for 1997.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH
SPECIFICATION MADE. IF NO CHOICES ARE
INDICATED, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS.
Dated: , 1997
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.
Signatures:
<PAGE>
