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EX-4 - FIRST MID BANCSHARES, INC.xex-4_1.txt








                                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
                                      ----------------------------------

                                      William S. Rowland
                                      Chairman and Chief Executive
                                      Officer







                                EXHIBIT INDEX

                  4.1  Form of Promissory Not