<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)<F*>
Illini Corporation
- - -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- - -------------------------------------------------------------------------------
(Title of Class of Securities)
451773105
-----------------------------------------------------
(CUSIP Number)
Dale A. Schempp, Noll Law Office
802 South Second Street, Springfield, Illinois 62704
(217) 544-8441
- - -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
May 5, 1998
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
[FN]
<F*>The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act bust shall be subject to all other provisions of the Act
(however, see the Notes).
[As filed with the Securities and Exchange Commission on May 6, 1998]
<PAGE> 2
SCHEDULE 13D
- - -------------------------------- -----------------------------------
CUSIP No. 451773105 Page 2 of 5 Pages
---------------- ----- -----
- - -------------------------------- -----------------------------------
- - -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ida R. Noll TIN ###-##-####
- - -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP<F*> (a) []
(b) []
- - -------------------------------------------------------------------------------
3 SEC USE ONLY
- - -------------------------------------------------------------------------------
4 SOURCE OF FUNDS<F*>
PF/OO
- - -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2 (e)
- - -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- - -------------------------------------------------------------------------------
7 SOLE VOTING POWER
44,863
NUMBER OF -------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
EACH -------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
44,863
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- - -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
44,863
- - -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES<F*> []
- - -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0039%
- - -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON<F*>
IN
- - -------------------------------------------------------------------------------
<PAGE> 3
ITEM 4. PURPOSE OF TRANSACTION.
- - ------
Except as described in the second paragraph of this Item 4, the
Reporting Person does not have any present plans or proposals that relate to
or would result in (i) the acquisition by any person of additional securities
of the Company or the disposition of securities of the Company; (ii) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (iii) a sale
or transfer of a material amount of assets of the Company or any of its
subsidiaries; (iv) any change in the present Board of Directors or management
of the Company, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the Board; (v) any material
change in the present capitalization or dividend policy of the Company; (vi)
any other material change in the Company's business or corporate structure;
(vii) any change in the Company's articles of incorporation, bylaws, or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the company by any person; (viii) causing a class
of securities of the Company to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association; (ix) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended; or (x) any action similar to any
of those enumerated above.
The Company has notified Reporting Person that the gifts of stock
received by her as reported in Reporting Person's recently filed Amendment
No. 1 to this Schedule 13D triggered the Company's Shareholder Rights Plan
dated June 20, 1997. Reporting Person has notified the Company's Directors
that she intends to hold them personally liable for any damage suffered by
her on account of the Shareholders Rights Plan. The Company has notified
Reporting Person, by letter dated May 4, 1998, that the Directors' new
interpretation of the Plan is that Reporting Person is not an "Acquiring
Person" if she divests sufficient shares by July 6, 1998. Reporting Person
has advised Company, by letter dated May 5, 1998, that she will not divest
any shares and, instead, intends to hold the Directors personally liable for
any damage suffered by her.
The Reporting Person reserves the right to determine in the future to
change the purpose or purposes described above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
- - ------
(a) Letter, dated May 4, 1998, from attorney for Company advising of
-------------------------
Company's new position regarding triggering of Company's
Shareholder Rights Plan.
(b) Letter, dated May 5, 1998, from attorney for Reporting Person
-------------------------
advising of Reporting Person's intention not to divest any shares
and, instead, to hold the Company Directors liable for any
resulting damages.
3
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 451773105
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
May 6, 1998
------------------------------------
(Date)
------------------------------------
Ida R. Noll
4
<PAGE> 1
Exhibit 7A
----------
[LETTERHEAD OF HOWARD & HOWARD]
May 4, 1998
VIA FACSIMILE 314/241-6056
VIA FEDERAL EXPRESS
THOMAS C. ERB
LEWIS, RICE & FINGERSH, L.C.
500 North Broadway, Suite 2000
St. Louis, MO 63102-2147
RE: IDA NOLL INTEREST IN ILLINI CORPORATION
Dear Tom:
The Board of Directors met on April 30, 1998 to consider the issues
raised in your letter of April 28, 1998 and to determine whether or not Ida
Noll's receipt of shares of Illini Corporation (the "Corporation") as a gift
from Amy Rock has resulted in Ida being deemed an "Acquiring Person" under
Section 1.a of the Rights Agreement dated June 20, 1997 by and between the
Corporation and Illinois Stock Transfer Company (the "Agreement").
At the meeting, the Board of Directors pursuant to Section 1.a of the
Agreement determined that the acquisition was inadvertent, and therefore, Ida
is not an Acquiring Person as defined in the Agreement; provided, however,
Ida must divest herself of a sufficient number of shares of the Corporation's
common stock by July 6, 1998 (three months from the date of acquisition).
Please note that the generous time period for divesting of the additional
shares is in response to the concerns expressed in your letter regarding the
illiquidity and thin trading in the stock.
The Board of Directors has also authorized the Corporation to offer to
redeem all, but not less than all of the Corporation's common stock held by
Ida, in accordance with the terms of that certain letter dated March 2, 1998
from Howard & Howard to Mae Noll dated March 2, 1998, a copy of which is
enclosed (the "Noll letter"); provided, however, the offer expires if not
accepted by Ida by July 6, 1998 (the "Offer Termination Date").
<PAGE> 2
Thomas C. Erb
May 4, 1998
Page 2
- - ---------------/
The Board has also authorized the Corporation to offer to redeem from
Ida less than all, but not less than a sufficient number of shares of common
stock to reduce Ida's ownership to not more than 10%. This offer is at
market price only and expires on July 6, 1998.
Finally, the Board of Directors has established an expiration date for
the proposal contained in the Noll letter. The proposal contained in the
Noll letter shall also expire if not accepted by the Offer Termination Date.
Please confirm to me that each of the shareholders mentioned in the Noll
letter has received a copy of the Noll letter and that each such shareholder
will be informed that the proposal contained in the Noll letter will expire
if not accepted by the Offer Termination Date.
We look forward to your prompt response to the foregoing matters.
VERY TRULY YOURS,
HOWARD & HOWARD
/S/THEODORE L. EISSFELDT
THEODORE L. EISSFELDT
cc: Mr. Burnard K. McHone
<PAGE> 1
Exhibit 7B
----------
[LETTERHEAD OF LEWIS, RICE & FINGERSH, L.C.]
May 5, 1998
VIA FAX AND FEDEX
- - -----------------
Theodore L. Eissfeldt, Esq.
HOWARD & HOWARD, L.C.
The Creve Coeur Building, Ste. 200
321 Liberty Street
Peoria, IL 61602-1403
Re: Illini Corporation Shareholder Rights Plan
------------------------------------------
Dear Ted:
This is in response to your letter of May 4, 1998. As we understand
it, the Directors of Illini Corporation are now taking the position that Ida
("Pinky") Noll has not yet become an "Acquiring Person" under the Company's
"Poison Pill" Plan. This new position is based upon (i) the Directors'
assumption that Mrs. Noll exceeded the 10% ownership threshold "inadvertently",
and (ii) their declaration that the term "promptly" (as used in Section 1(a) of
the Plan, whereunder a person may "promptly" divest shares to cure an
inadvertent triggering), means July 6, 1998, a date three months after the date
that Mrs. Noll received the recent gift of shares from her mother and thereby
exceeded the 10% ownership threshold. In addition, the Directors have
specifically reaffirmed their $40 redemption offer to Mrs. Noll and others, but
imposed upon such offer a coterminous deadline.
Please be advised that Mrs. Noll hereby reasserts her position
regarding divestiture, as originally set forth in my April 28, 1998 letter to
you. Mrs. Noll is under no duty to, nor will she, dispose of any of her
shares (nor those of her children) to avoid being deemed an "Acquiring
Person." Instead, Mrs. Noll will hold each of the Directors personally
liable for any damages suffered by her or her children on account of the
"Poison Pill" Plan.
While we can appreciate the Directors' reasons for wanting to move to
this revised interpretation of their "Poison Pill" Plan, we must express our
concern that the Directors' new position is not sustainable legally. We fear
that if a shareholder of Illini, other than Mrs. Noll, should decide to
challenge the Directors' position that it almost certainly would be
invalidated. Our concern starts with a point of agreement - we agree with
your reading of the Plan to the effect that Mrs. Noll, in fact, became an
"Acquiring Person" upon the filing of her Schedule 13D
<PAGE> 2
LEWIS, RICE & FINGERSH, L.C.
Theodore L. Eissfeldt, Esq.
May 5, 1998
Page 2
Amendment No. 1 on April 16, 1998, unless the provisions of the last clause of
Section 1(a) of the Plan save her from that fate. As you know, that clause
provides that a person shall not become an "Acquiring Person":
"... if the Board of Directors determines that such Person
became an Acquiring Person inadvertently, and such Person
promptly divests itself of a sufficient number of shares of
Common Stock [so that such Person no longer beneficially
owns more than 10%]"
Mrs. Noll advised the Directors on April 28, 1998 and is doing so again
by this letter that she will not divest any shares (before or after July 6,
1998 or any other date that the Directors might choose). If a shareholder
should contend that the Section 1(a) exception to the Plan's definition of
the term "Acquiring Person" is not applicable because of Mrs. Noll's repeated
refusals to divest, we believe that a court would have no alternative but to
so find. In that event, the court wouldn't even get to the question of what
period of time should be considered "promptly" for Plan purposes. If,
however, a court should address that later question, we are equally concerned
that the three month period chosen by the Directors also would be
invalidated. The most likely judicial interpretation of the "promptly"
requirement, we believe, is the first one that the Directors asserted, as put
forth in your April 24, 1998 to Dale Schempp of the Noll Law Office. You
will recall that in that earlier letter you stated the Directors' original
position that in order to be considered "promptly", any divestiture would
have to be made by Mrs. Noll prior to April 30, 1998 -- the 10th business day
after the April 16, 1998 filing of Mrs. Noll's Schedule 13D Amendment No. 1.
As you explained the reasoning of the Directors' original position, that date
is important because it is the "Distribution Date" under the Plan, whereafter
the Rights Agent must mail, as soon as practicable, the Rights Certificates
to shareholders. It seems rather compelling to us, as the Directors
originally thought, to construe the term "promptly" in this 10 business day
context. Thus, we fear that the Directors' new interpretation of the
"promptly" requirement, if judicially challenged, would fall in favor of
their better reasoned, and more logical, original position.
We also note for your consideration a few additional concerns.
First, Section 28 of the Directors' "Poison Pill" Plan provides that it " may
- - -----
not be supplemented or amended in any way after an Acquiring Person has become
such." If it should be determined that Mrs. Noll has, in fact, already
become an Acquiring Person, then the Directors' attempt to change their
interpretation and now unilaterally declare that the term "promptly" will
henceforth mean a period of three months could be viewed as an invalid
attempt to supplement or amend the Plan after such action expressly is no
longer permissible. Second, we are concerned that the definition of the
------
key term "Stock Acquisition Date", which is set forth in Section 1(i) of the
Plan does not appear to toll for any "prompt" divestiture waiting period, even
if the Directors' attempt to effectively toll the determination date of the
"Acquiring Person" definition should, in fact, be valid. If July 6, 1998
(or, for that matter, any other arbitrary date selected by the Directors)
should come and go
<PAGE> 3
LEWIS, RICE & FINGERSH, L.C.
Theodore L. Eissfeldt, Esq.
May 5, 1998
Page 3
without Mrs. Noll divesting any shares to avoid being deemed an "Acquiring
Person" for Plan purposes -- as it will -- then, in that event, the "Stock
Acquisition Date" would still appear to be April 16, 1998, the filing date of
Mrs. Noll's Schedule 13D Amendment No. 1 (wherein she disclosed her receipt of
the gift from her mother and her resulting new beneficial ownership percentage
of 10.0039%). If our interpretation of this matter is correct, it raises a host
of questions and problems that I am sure you can appreciate. For example, under
that reading both the Rights Agent (Illinois Stock Transfer Company) and the
Company are currently in breach of their respective obligations to issue the
Rights Certificates pursuant to Section 3 of the Plan. If any shares should
trade between now and July 6, will they trade with or without the associated
Rights if the Rights Agent and the Company are simply in default? Are the
Rights Agent and the Company liable for any trading losses suffered during this
period on account of the confusion regarding the detachment of the Rights? What
would the Rights Agent do if a shareholder should tender the $80 Purchase Price
per Right during this intervening period, and would any such tender override any
later attempt by the Directors to effect the optional one share-for-one Right
exchange provisions of Section 25 of the Plan? Third, we read Sections 16
-----
and 31 to confer upon each Company shareholder an individual right to enforce
the terms of the "Poison Pill" Plan at law or in equity. While the language
of these sections directly confers enforcement rights upon holders of Rights
Certificates, we believe that shareholders also clearly have standing to
challenge the Directors' current position and demand that the Rights Agent
distribute the Rights Certificates (see, in this regard, the parenthetical
that appears in the second and third lines of Section 16 and in the third and
fourth lines of Section 31). Exacerbating the fact that every individual
shareholder of Illini is therefore free to pursue a legal challenge, is the
added fact that Section 16 expressly allows them to recover all of their
associated costs and expenses, including attorney fees. I am sure you will
agree that the filing of a lawsuit challenging the Directors' newly revised
position regarding the triggering of their "Poison Pill" Plan by Amy Rock's
gift to her daughter and grandchildren is therefore more than just a remote
prospect.
Regarding your request for confirmation of the fact that each of the
shareholders to whom the Company has extended its $40 redemption offer has
received a copy of your March 2, 1998 letter and notice of the imposition of
the new July 6, 1998 deadline thereon, please be advised that this Firm has
not been engaged to represent anyone other than Mae Noll and Pinky Noll.
Accordingly, please direct the Company's redemption offer materials directly
to any such other intended offerees.
Very truly yours,
Thomas C. Erb
TCE/jns
