UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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):
November 21, 2011
FIRST MID-ILLINOIS BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-13368 37-1103704
(State of Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
1421 CHARLESTON AVENUE
MATTOON, IL 61938
(Address of Principal Executive Offices) (Zip Code)
(217) 234-7454
(Registrant's Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17CFR 240.13e-4(c))
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN
OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A
REGISTRANT.
On February 11, 2011, First Mid-Illinois Bancshares, Inc. (the
"Company") filed a Current Report on Form 8-K to report that the
Company had accepted from certain accredited investors, including
directors, executive officers and certain major customers and holders
of the Company's common stock (collectively, the "Investors"),
subscriptions for the purchase of $27,500,000, in the aggregate, of a
newly authorized series of preferred stock designated as Series C 8%
Non-Cumulative Perpetual Convertible Preferred Stock (the "Series C
Preferred Stock") of the Company. As of May 13, 2011, $19,250,000 of
the Series C Preferred Stock had been issued and sold by the Company
to certain Investors. The remaining Investors that have not yet been
issued the Series C Preferred Stock are (a) individuals who are
members of the Lumpkin family, including Benjamin I. Lumpkin, a
director of the Company, and (b) entities controlled by, and trusts
created for the benefit of, individuals who are members of the Lumpkin
family (collectively, the "Remaining Investors"). The Company has
previously accepted from the Remaining Investors subscriptions for
$8,250,000 of the Series C Preferred Stock pursuant to their
respective subscription agreements. The Remaining Investors have not
yet been issued the Series C Preferred Stock subscribed for because of
unanticipated delays in applying for and obtaining the approval of the
Federal Reserve Board, which the Remaining Investors must secure to be
issued their shares of Series C Preferred Stock.
Pursuant to the terms of the Series C Preferred Stock, the Series
C Preferred Stock is both redeemable and mandatorily convertible at
the Company's discretion into common stock of the Company, subject to
certain conditions being met, no earlier than 60 months following the
date on which a majority of the Series C Preferred Stock has been
issued. The date on which a majority of the Series C Preferred Stock
became issued was May 13, 2011 (the "Majority Issuance Date"). As a
result of the Remaining Investors not being issued their subscribed
for shares of Series C Preferred Stock by the Majority Issuance Date,
it is possible that, if certain conditions are met, the Company could
redeem or mandatorily convert the Series C Preferred Stock into common
stock of the Company prior to the Remaining Investors holding their
subscribed shares of Series C Preferred Stock for 60 months, thus
resulting in the Remaining Investors receiving less than 60 months of
8% dividends on the Series C Preferred Stock subscribed for.
The disinterested members of the Board of Directors of the
Company, which does not include Benjamin I. Lumpkin and Steve L.
Grissom, have approved and authorized, and the Remaining Investors
have agreed to, certain amendments to the subscription agreements for
the Remaining Investors resulting in the release to the Company of the
funds escrowed by the Remaining Investors for their subscribed shares
of the Series C Preferred Stock and, in lieu thereof, the issuance by
the Company of short-term unsecured promissory notes to the Remaining
Investors (the "Notes"). On November 21, 2011, the Company and the
Remaining Investors agreed to the release of the escrowed funds in
exchange for the Notes, which are dated November 21, 2011. The Notes
collectively have an aggregate principal amount of $8,250,000 and each
have an 8% annual interest rate. Each Note also contains a prepayment
provision applicable when approval from the Federal Reserve Board is
received to allow a Remaining Investor to purchase the shares of
Series C Preferred Stock originally subscribed for such that the
Remaining Investor may use the funds represented by the Notes to
purchase the subscribed for shares of the Series C Preferred Stock.
Additionally, if the Company experiences an Event of Default as
defined in the Note, such as becoming insolvent or generally failing
to pay its debts as they become due, then a Remaining Investor may, at
his, her or its option, declare the entire unpaid amount of the Note
immediately due and payable, without presentment, demand, portents or
notice of any kind, and the Remaining Investor shall be entitled to
recover from the Company all costs and expenses, including reasonable
attorneys' fees and disbursements and court costs, incurred in
enforcing the Remaining Investor's rights under the Note.
A copy of the form of the Note between the Company and each
Remaining Investor is attached hereto as Exhibit 4.1 and is
incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
4.1 Form of Promissory Note
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
FIRST MID-ILLINOIS BANCSHARES, INC.
Dated: November 21, 2011 /s/ William S. Rowland
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William S. Rowland
Chairman and Chief Executive
Officer
EXHIBIT INDEX
4.1 Form of Promissory Note