SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 21, 1999
--------------------
FIRST MID-ILLINOIS BANCSHARES, INC.
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-13368 37-1103704
----------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1515 Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938
---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(217) 234-7454
---------------------------------------------------------------------
Registrant's telephone number, including area code)
Not Applicable
---------------------------------------------------------------------
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
On September 21, 1999, the Board of Directors (the "Board") of
First Mid-Illinois Bancshares, Inc. (the "Corporation") declared a
dividend distribution of one right (each a "New Right") for each
outstanding share of the common stock, par value $4.00 per share, of
the Corporation ("Common Stock") to stockholders of record at the
close of business on October 12, 1999 (the "Record Date"). Each Right
will entitle the registered holder to purchase from the Corporation
one share of Common Stock at an exercise price of $125.00, subject to
adjustment (as adjusted from time to time, the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights
Agreement, dated as of September 21, 1999 (the "Rights Agreement"),
between the Corporation and Harris Trust and Savings Bank, as Rights
Agent.
Initially following the Record Date, the Rights will be attached
to all certificates representing shares of Common Stock then
outstanding, and no separate Rights Certificates will be distributed.
Unless previously redeemed by the Board in accordance with the Rights
Agreement, the Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 20 days
following the Stock Acquisition Date (as defined below) or (ii) 20
days (or such later date as the Board shall determine, provided that
no deferral of such date may be made by the Board at any time during
the Special Period (as defined below)) after the date a tender or
exchange offer that would result in a person or group beneficially
owning 15% or more of the outstanding shares of Common Stock is first
published, sent or given to the Corporation's stockholders. The
"Special Period" is defined as the 180-day period following the
effectiveness of any election of directors, occurring after a public
announcement (and prior to the withdrawal or abandonment of such
announcement) by a third party of an intent or proposal to engage
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Corporation or otherwise to become an Acquiring Person (as defined
below), which election results in a majority of the Board being
comprised of persons who were not nominated by the Board in office
immediately prior to such election.
The "Stock Acquisition Date" is defined as the earlier of (x) the
first date of public announcement by the Corporation that any person
or group (other than certain exempt persons or groups) has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more
of the shares of Common Stock then outstanding or (y) the date that
any person enters into an agreement with the Corporation or any of its
subsidiaries providing for an Acquisition Transaction (as defined
below) (any person described in clause (x) or clause (y) above is
referred to as an "Acquiring Person"). None of Margaret Lumpkin Keon,
Mary Lumpkin and Richard Anthony Lumpkin or any of their respective
descendants or certain related trusts or other entities (or a group
comprised solely of such persons) will be deemed to be an Acquiring
2
Person as long as all such persons beneficially own less than 40.1% of
the outstanding shares of Common Stock. An "Acquisition Transaction"
is defined as (a) a merger, consolidation or similar transaction as a
result of which stockholders of the Corporation will own less than 60%
of the outstanding shares of Common Stock or the common stock of a
publicly traded entity which controls the Corporation or into which
the Corporation has been merged or otherwise combined (based solely on
the shares of Common Stock received by such stockholders, in their
capacity as stockholders of the Corporation, pursuant to such
transactions), (b) a purchase of all or a substantial portion of the
assets of the Corporation and its subsidiaries, or (c) a purchase or
other acquisition of securities representing 15% or more of the shares
of Common Stock then outstanding.
Following the Record Date and until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock certificates and will
be transferred only with such Common Stock certificates, (ii) new
Common Stock certificates issued after the Record Date will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificate for Common Stock outstanding
will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights will not be exercisable until the Distribution Date
and will expire at the close of business on September 21, 2009, unless
earlier redeemed by the Corporation as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board, only shares of Common
Stock issued prior to the Distribution Date will be issued with
Rights.
In the event (a "Flip-in Event") that any person, at any time
after the date of the Rights Agreement, becomes an Acquiring Person,
each holder of a Right thereafter will have the right to receive, upon
exercise thereof, Common Stock (or, in certain circumstances, cash,
property or other securities of the Corporation) having a value equal
to two times the Purchase Price. Notwithstanding any of the foregoing,
following the occurrence of a Flip-in Event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person, any of its associates or
affiliates, and certain of its transferees, will be null and void.
Moreover, the Rights will not be exercisable following the first
occurrence of a Flip-in Event until such time as the Rights are no
longer redeemable by the Corporation as described below.
In the event that, at any time following the Stock Acquisition
Date, (i) the Corporation is acquired in a merger or other business
combination transaction, or (ii) 50% or more of the Corporation's
3
assets or earning power is sold or transferred (each, a "Flip-over
Event"), each holder of a Right (except Rights which previously have
been voided as described above) shall thereafter have the right to
receive, upon exercise thereof, common stock or other securities of
the acquiring company having a value equal to two times the Purchase
Price.
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time in accordance with
customary anti-dilution provisions.
With certain exceptions, no adjustment to the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares will be issued.
At any time after the Rights become exercisable for Common Stock,
the Board may exchange the unexercised Rights (other than Rights owned
by any Acquiring Person which have become void), in whole or in part,
at an exchange ratio of one share of Common Stock per Right (subject
to adjustment). Notwithstanding the foregoing, no such exchange of the
Rights may be authorized by the Board during the Special Period or at
any time when the Rights are not redeemable.
The Board is empowered to redeem the Rights in whole, but not in
part, at a price of $0.01 per Right (the "Redemption Price") at any
time before the earlier of (i) the close of business on the 20th day
following the Stock Acquisition Date or (ii) the final expiration date
of the Rights. Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
Notwithstanding the foregoing, in the event that after a public
announcement (and prior to the withdrawal or abandonment of such
announcement) by a third party of an intent or proposal to engage
(without the current and continuing concurrence of the Board) in a
transaction involving an acquisition of or business combination with
the Corporation or otherwise to become an Acquiring Person, there is
an election of directors (whether at one or more stockholder meetings
and/or pursuant to written stockholder consents) resulting in a
majority of the Board being comprised of persons who were not
nominated by the Board in office immediately prior to such election,
then following such election and for a period of 180 days (the
"Special Period"), the Rights, if otherwise then redeemable, will only
be redeemable by the Board either (1) if they have followed certain
prescribed procedures or (2) in any other case, provided that, if in
any such other case their decision regarding redemption and any
acquisition or business combination is challenged as a breach of
fiduciary duty of care or loyalty, the directors can establish the
entire fairness of such decision without the benefit of any business
judgement rule or other presumption. The procedures required under
clause (1) include: (a) the retention of an independent financial
4
advisor, and the receipt by the Board of (i) the views of such advisor
regarding whether redemption of the Rights will serve the best
interests of the Corporation and its stockholders, or (ii) such
advisor's statement that it is unable to express such a view, setting
forth the reason therefor; and (b) with respect to any pending
acquisition or business combination proposal, (i) the implementation
by the Board, with the advice of its independent financial advisor, of
a process and procedures which the Board and such advisor conclude
would be most likely to result in the best value reasonably available
to stockholders, (ii) receipt of a fairness opinion from such advisor,
and the Board determining, and such advisor confirming, that it has no
reason to believe that a superior transaction is reasonably available,
and (iii) execution of a definitive transaction agreement.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to
the Corporation, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercis-
able for Common Stock (or other consideration) or for common stock of
an acquiring company as set forth above.
The Rights Agreement may be amended by the Board (a) prior to the
Distribution Date, in any manner and (b) after the Distribution Date,
in order to (i) cure any ambiguity, (ii) correct or supplement
provisions which may be defective or inconsistent, (iii) make changes
which do not adversely affect the interests of holders of Rights
(other than those held by an Acquiring Person or certain related
persons) or (iv) shorten or lengthen any time period under the Rights
Agreement (including the time period governing redemption), provided
that no supplement or amendment to the Rights Agreement may be made
during the Special Period or at any time when the Rights are
nonredeemable other than supplements or amendments of the type
contemplated by clause (i) or (ii) above.
The Rights may have certain anti-takeover effects. The Rights
will cause a substantial dilution to a person or group that attempts
to acquire the Corporation unless the acquisition is conditioned on a
substantial number of Rights being acquired. The Rights should not
interfere with any merger or other business combination properly
approved by the Board.
The Rights Agreement is incorporated by reference as Exhibit 4.1
hereto and is incorporated herein by reference. The foregoing summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the full text of the Rights
Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
5
4.1 Rights Agreement, dated as of September 21, 1999, between
First Mid-Illinois Bancshares, Inc. and Harris Trust and
Savings Bank, as Rights Agent (incorporated by reference to
Exhibit 4.1 to First Mid-Illinois Bancshares, Inc.'s
Registration Statement on Form 8-A filed with the Securities
and Exchange Commission on September 23, 1999).
6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
FIRST MID-ILLINOIS BANCSHARES, INC.
By: /s/ William S. Rowland
-------------------------------
Name: William S. Rowland
Title: President
Dated: September 22, 1999
7
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Rights Agreement, dated as of September 21,
1999, between First Mid-Illinois Bancshares,
Inc. and Harris Trust and Savings Bank, as
Rights Agent (incorporated by reference to
Exhibit 4.1 to First Mid-Illinois Bancshares,
Inc.'s Registration Statement on Form 8-A
filed with the Securities and Exchange
Commission on September 23, 1999).
8
