SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. ____)

Filed by the Registrant ý

Filed by a Party other than the Registrant ¨

Check the appropriate box:

¨ý Preliminary Proxy Statement

¨ Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))

ý¨ Definitive Proxy Statement

¨ Definitive Additional Materials

¨ Soliciting Material pursuant to Rule 14a-12

FIRST MID-ILLINOIS BANCSHARES, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement; if other than the Registrant)

Payment of filing fee (check the appropriate box):

¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

¨ Fee paid previously with preliminary materials.

March ~~20, 2015~~16, 2018

Dear Fellow Stockholder:

On behalf of the Board of Directors and management of First Mid-Illinois Bancshares, Inc. (the “Company”), I cordially invite you to attend the Annual Meeting of Stockholders of First Mid-Illinois Bancshares, Inc. to be held at 4:00 p.m. on April ~~29, 2015~~25, 2018, in the lobby of First Mid-Illinois Bank & Trust, 1515 Charleston Avenue, Mattoon, Illinois.

Pursuant to the Securities and Exchange Commission’s “notice and access” rules, on or about March ~~20, 2015~~16, 2018, you received in the mail our Notice of Internet Availability of Proxy Materials (the “Notice”), which provided you with instructions on how to access onthis Proxy Statement via an Internet website, ~~this Proxy Statement,~~ the Company's ~~2014~~2017 annual report to stockholders and the Company’s Annual Report on Form 10-K for the recently completed fiscal year. Details regarding the business to be conducted at the meeting are described in the Notice and in this Proxy Statement.

At the meeting, we will report on Company operations and the outlook for the year ahead. Directors and officers of the Company, as well as a representative of BKD, LLP, the Company's independent auditors, will be present to respond to any appropriate questions stockholders may have.

The ~~2015~~2018 annual meeting of stockholders is being held for the following purposes:

1. ~~The election of~~To elect Holly A. Bailey and Joseph R. Dively ~~and William S. Rowland~~ as directors of the Company (Proposal I)1);

3. To approve the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (Proposal 3); and

2.4. Such other matters as may properly come before the meeting or any adjournments thereof.

I encourage you to attend the meeting in person. Whether or not you plan to attend the meeting, please act promptly to vote your shares. You may vote your shares over the Internet or, if you receive or request to receive written proxy materials, by mailing, completing, signing and dating a proxy card and returning it in the accompanying postage paid envelope provided. You may also vote your shares by telephone or by following the instructions set forth on the proxy ~~card.~~card or Notice. Please review the instructions for each of your voting options described in the Notice you ~~may have~~ received in the mail and in this Proxy Statement. If you attend the meeting, you may vote your shares in person, even if you have previously submitted a proxy in writing, by telephone or through the Internet. Submitting a proxy will ensure that your shares are represented at the meeting. If you have any questions concerning these matters, please contact me at (217) 258-9520 or ~~Lee Ann Perry,~~Aaron Holt, Manager of Shareholder Services, at (217) ~~258-0493.~~258-0463. We look forward with pleasure to seeing and visiting with you at the meeting.

Annual Meeting of Stockholders

To Be Held April ~~29, 2015~~25, 2018

First Mid-Illinois Bancshares, Inc.

1421 Charleston Avenue, P.O. Box 499

Mattoon, Illinois 61938

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of First Mid-Illinois Bancshares, Inc. (the “Company”) to be voted at the Annual Meeting of Stockholders to be held in the lobby of First Mid-Illinois Bank & Trust, 1515 Charleston Avenue, Mattoon, Illinois, on Wednesday, April ~~29, 2015~~25, 2018 at 4:00 p.m. local time. The Board of Directors would like to have all stockholders represented at the meeting. This proxy statement and the enclosed form of proxy are being made available to the stockholders beginning on or about March ~~20, 2015.~~16, 2018.

Whether or not you plan to attend the Annual Meeting of Stockholders, we encourage you to read this Proxy Statement and submit your proxy as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail and if you receive or request to receive printed proxy materials, the proxy card. The Company's annual report to stockholders and its Annual Report on Form 10-K for the recently completed fiscal year, which includes the consolidated financial statements of the Company, have been made available with this Proxy Statement.

The Company is a diversified financial services company which serves the financial needs of central Illinois. The Company owns all of the outstanding capital stock of First Mid-Illinois Bank & Trust, N.A., a national banking association ~~(the "Bank"~~("First Mid Bank"), with offices in Mattoon, Charleston, Effingham, Altamont, Neoga, Sullivan, Arcola, Taylorville, Tuscola, Monticello, Urbana, Decatur, Highland, Champaign, Maryville, Mansfield, Mahomet, Weldon, Bartonville, Peoria, Galesburg, Quincy and Knoxville Illinois;; Mid-Illinois Data Services, Inc., a data processing company ("Data Services"); and The Checkley Agency, Inc. doing business as First Mid Insurance Group, an insurance agency ("Insurance Group").

Only holders of record of the Company's common stock ("Common Stock") at the close of business on March ~~6, 2015~~1, 2018 (the "Record Date") will be entitled to vote at the annual meeting or any adjournments or postponements of such meeting. On the Record Date, the Company had ~~7,017,236~~[Ÿ] shares of Common Stock issued and outstanding. In the election of directors, and for any other matters to be voted upon at the annual meeting, each issued and outstanding share of Common Stock is entitled to one vote.

You may revoke your proxy at any time before it is voted. Unless so revoked, the shares represented by such proxies will be voted at the annual meeting and all adjournments thereof. You may revoke your proxy at any time before it is voted by delivering written notice of revocation to the Secretary of the Company at 1421 Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938, by executing and delivering a subsequently dated proxy or by attending the annual meeting and voting in person. Proxies solicited by the Board of Directors of the Company will be voted in accordance with the directions given therein. Where no instructions are indicated, proxies will be voted in accordance with the recommendations of the Board of Directors with respect to the proposals described herein.

A quorum of stockholders is necessary to take action at the annual meeting. The presence, in person or by proxy, of the holders of a majority of the shares of Common Stock of the Company entitled to vote at the meeting will constitute a quorum. Votes cast by proxy or in person at the meeting will be tabulated by the inspector of election appointed for the meeting and will be counted as present for purposes of determining whether a quorum is present. The inspector of election will treat proxies received but marked as abstentions or broker non-votes as present and entitled to vote for purposes of determining whether a quorum is present. "Broker non-votes" refers to a broker or other nominee holding shares for a beneficial owner not voting on a particular proposal because the broker or other nominee does not have discretionary voting power regarding that item and has not received instructions from the beneficial owner.

The expenses of solicitation, including the cost of printing and mailing, will be paid by the Company. Proxies are being solicited principally via the Internet and by mail. In addition, directors, officers and regular employees of the Company may solicit proxies personally, by telephone, by fax or by special letter. The Company may also reimburse brokers, nominees and other fiduciaries for their reasonable expenses in forwarding proxy materials to beneficial owners.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The following table sets forth, as of February 1, ~~2015~~2018, the number of shares of Common Stock beneficially owned by each person known by the Company to be the beneficial owner of more than five percent of the outstanding shares of Common Stock (who are not also directors), each director nominee of the Company, each director, the "named executive officers" (as defined below) and all director nominees, directors and executive officers of the Company as a group. For certain individuals listed below, the number of shares of Common Stock beneficially owned includes the shares of Common Stock into which such individuals may convert their shares of the Company’s Series C 8% Non-Cumulative Perpetual Convertible Preferred Stock (the “Series C Preferred Stock”). The Series C Preferred Stock is non-voting stock except with respect to certain fundamental changes in the terms of the stock and with respect to certain matters following the Company’s failure to pay dividends on the stock during four dividend payment periods. Please refer to the footnotes of the following ~~table.~~table for details.

Name and Address
of Beneficial Owner (1)

Title of Class
Amount and Nature of Beneficial Ownership (2)
Percentage of Class Outstanding Percentage of Voting Power
Principal Stockholders:
David R. Hodgman
c/o Schiff Hardin LLP
233 S. Wacker Dr., Suite 6600
Chicago, Illinois 60606 Common 571,589
(3) 8.1 % (21) 8.1 % (23)
Series C Preferred —

— %
Benjamin I. Lumpkin c/o SKL Investment Group, LLC
121 South 17th Street
Mattoon, Illinois 61938 Common 345,106
(4) 4.9 % (21) 6.5 % (23)
Series C Preferred 500
(4) 9.1 %
Charles A. Adams
1020 North 13th Street
Mattoon, Illinois 61938 Common 532,580
(5) 7.6 % (21) 8.5 % (23)
Series C Preferred 300
(5) 5.5 %
Elizabeth L. Celio
c/o SKL Investment Group, LLC
121 South 17th Street
Mattoon, IL 61938 Common 701,856 (6) 10.0 % (21) 11.8 % (23)
Series C Preferred 600 (6) 10.9 %
Kermit Speer
1648 Taylor Road
Port Orange, FL 32128 Common 300,022 (7) 4.3 % (21 ) 6.4 % (23)
Series C Preferred 637 (7) 11.6 %



Name and Address of Beneficial Owner (1)	Title of Class	Amount and Nature of Beneficial Ownership (2)		Percentage of Class Outstanding (18)
Principal Stockholders:
Elizabeth L. Celio c/o SKL Investment Group, LLC 121 South 17th Street Mattoon, IL 61938	Common	805,411	(3)	6.4	%

Benjamin I. Lumpkin c/o SKL Investment Group, LLC 121 South 17th Street Mattoon, IL 61938	Common	699,231		5.5	%

Director Nominees, Directors and Named Executive Officers:
Holly A. Bailey	Common	135,744	(4)	1.1	%	—
Holly A. Bailey
Robert S. Cook	Common	23,386	(5)	*%

Joseph R. Dively	Common	85,036	(6)	*%
Joseph R. Dively
Steven L. Grissom 121 South 17^th Street Mattoon, Illinois 61938	Common	620,090	(7)	4.9	%

Name and Address
of Beneficial Owner (1)

Title of Class
Amount and Nature of Beneficial Ownership (2)
Percentage of Class Outstanding Percentage of Voting Power
Director Nominees, Directors and Named Executive Officers:
Holly A. Bailey Common 73,582
(8) 1.1 % (21) 1.5 % (23)
Series C Preferred 125
(8) 2.3 %
Robert S. Cook Common 6,979
(9) *%
(21) *%
(23)
Series C Preferred —

— %
Joseph R. Dively Common 48,776
(10) *%
(21) * %
(23)
Series C Preferred 20
(10) *%

Steven L. Grissom
121 South 17th Street
Mattoon, Illinois 61938 Common 365,755
(11) 5.2 % (21) 5.6 % (23)
Series C Preferred 130
(11) 2.4 %
Gary W. Melvin
1134 CR 1650 E
Sullivan, IL 61951 Common 424,000
(12) 6.0 % (21) 7.6 % (23)
Series C Preferred 489
(12) 8.9 %
William S. Rowland Common 75,994
(13) 1.1 % (21) 1.1 % (23)
Series C Preferred 20
(13) *%

Ray Anthony Sparks
30 South Country Club Road
Mattoon, IL 61938 Common 350,150
(14) 5.0 % (21) 5.7 % (23)
Series C Preferred 230
(14) 4.2 %
James E. Zimmer Common 1,381
(15) *%
(21) * %
(23)
Series C Preferred —

— %
Michael L. Taylor Common 14,051
(16) *%
(21) * %
(23)
Series C Preferred 4
(16) *%

John W. Hedges Common 28,128
(17) *%
(21) * %
(23)
Series C Preferred 5
(17) *%

Eric S. McRae Common 20,686
(18) *%
(21) * %
(23)
Series C Preferred 2
(18) *%

Laurel G. Allenbaugh Common 10,886
(19) *%
(21) * %
(23)
Series C Preferred 2
(19) *%

All director nominees, directors, named executive officers and other executive officers as a group
(16 persons) Common 1,428,715
(20) 20.2 % (22) 23.0 % (24)
Series C Preferred 1,025
(20) 18.6 %



Name and Address of Beneficial Owner (1)	Title of Class	Amount and Nature of Beneficial Ownership (2)		Percentage of Class Outstanding (18)
Director Nominees, Directors and Named Executive Officers (continued):
Gary W. Melvin 1134 CR 1650 E Sullivan, IL 61951	Common	696,373	(8)	5.5	%
Gary W. Melvin 1134 CR 1650 E Sullivan, IL 61951
William S. Rowland	Common	69,674	(9)	*%
William S. Rowland
Ray Anthony Sparks	Common	369,579	(10)	2.9	%
Ray Anthony Sparks
Mary J. Westerhold	Common	159,866	(11)	1.3	%

James E. Zimmer	Common	8,952	(12)	*%
James E. Zimmer
Matthew K. Smith	Common	1,708	(13)	*%
Matthew K. Smith
Michael L. Taylor	Common	19,940	(14)	*%
Michael L. Taylor
Eric S. McRae	Common	26,956	(15)	*%
Eric S. McRae
Bradley L. Beesley	Common	10,188	(16)	*%
Bradley L. Beesley
All director nominees, directors, named executive officers and other executive officers as a group (18 persons)	Common	2,251,913	(17)	17.8	%	(18)

* Less than 1%


(1)	Addresses are provided for those beneficial owners owning more than 5% of the Company’s Common Stock.


(2)	Unless otherwise indicated, the nature of beneficial ownership for shares shown in this column is sole voting and investment power. The information contained in this column is based upon information furnished to the Company by the persons named above.

(3)

The above Common Stock amount includes 230,912 shares held by the Richard Anthony Lumpkin 1990 Personal Income Trust for the benefit of Benjamin Iverson Lumpkin dated April 20, 1990, over which Mr. Hodgman has shared voting and investment power. Mr. Hodgman holds sole voting and investment power over 340,073 shares held by the Richard Adamson Lumpkin Trust dated February 6, 1970 for the benefit of Richard Anthony Lumpkin; and 604 shares held by the Richard Adamson Lumpkin Trust dated February 5, 1976 for the benefit of Richard Anthony Lumpkin. Mr. Hodgman disclaims beneficial ownership of the 571,589 shares held by the foregoing trusts.


~~(4)~~	~~The above Common Stock amount includes 345,106 shares held by Mr. Lumpkin individually. The above Series C Preferred Stock amount includes 500 shares held by Mr. Lumpkin individually.~~

~~(5)~~

The above Common Stock amount includes 192,516 shares held by Mr. Adams individually; 271,146 shares held by a corporation which Mr. Adams is deemed to control; 19,000 shares held by the Howell-Adams Foundation over which Mr. Adams has shared voting and investment power; and 49,918 shares held for the account of Mr. Adams under the Company’s Deferred Compensation Plan. The above Series C Preferred Stock amount includes 300 shares held by Mr. Adams individually.

~~(6)~~

~~The above Common Stock amount includes 566,263~~Includes 689,476 shares held by Ms. Elizabeth Celio individually; and ~~135,593~~115,935 shares held by The Lumpkin Family Foundation, under which Ms. Celio has shared voting and investment power, and of which beneficial ownership is disclaimed. ~~The above Series C Preferred Stock amount includes 500 shares held by Ms. Celio individually; and 100 shares held by The Lumpkin Family Foundation of which beneficial ownership is disclaimed.~~


~~(7)~~(4)	~~The above Common Stock amount includes 300,022~~Consists of 134,053 shares held by ~~Mr. Speer individually. The above Series C Preferred Stock amount includes 637~~Ms. Bailey individually; and 1,691 shares held ~~by Mr. Speer individually.~~for the account of Ms. Bailey under the Company’s Deferred Compensation Plan.


~~(8)~~(5)	~~The above Common Stock amount includes 73,582 shares held by Ms. Bailey individually. The above Series C Preferred Stock amount includes 125 shares held by Ms. Bailey individually.~~

~~(9)~~

~~The above Common Stock amount includes 6,979~~Includes 14,122 shares held by Mr. Cook jointly with his ~~spouse.~~spouse; 1,386 shares held for Mr. Cook under a 401(K) plan; and 1,980 shares held as custodian for Mr. Cook's children, 244 shares held for Mr. Cook's wife under an Individual Retirement Account and 5,654 shares held by TAR CO Investment LLC for which Mr. Cook has shared voting and investment power.


~~(10)~~(6)	~~The above amount includes 26,700~~Includes 51,080 shares held by Mr. Dively individually; and ~~22,076~~33,956 shares held for the account of Mr. Dively under the Company’s Deferred Compensation Plan. ~~The above Series C Preferred Stock amount includes 20 shares held by Mr. Dively individually.~~

~~(11)~~(7)

~~The above Common Stock amount includes 39,555~~Includes 42,083 shares held by Mr. Grissom individually; 27,714 shares held jointly with his spouse; and ~~2,450~~2,626 shares held for the account of Mr. Grissom under the ~~Company’s~~Company's Deferred Compensation Plan. The above ~~Common Stock~~ amount also includes ~~230,912~~382,397 shares held by the Richard ~~Anthony~~Adamson Lumpkin ~~1990 Personal Income~~ Trust dated February 6, 1970 for the benefit of ~~Benjamin Iverson Lumpkin dated April 20, 1990 and 300~~Richard Anthony Lumpkin; 604 shares held by the ~~Mary Lee Sparks 1978~~Richard Adamson Lumpkin Trust dated February 5, 1976 for the benefit of ~~Mary Lee Sparks. Mr. Grissom has shared voting and investment power over these trusts. The above Common Stock amount also includes~~Richard Anthony Lumpkin; 600 shares held by the Elizabeth L. Celio 2000 Gift Trust dated December 20, 2000 for the benefit of Emma G. ~~Celio;~~Celio, 600 shares ~~held by the Elizabeth L. Celio 2000 Gift Trust dated December 20, 2000~~ for the benefit of Claudia M. ~~Celio;~~Celio and 600 shares ~~held by the Elizabeth L. Celio 2000 Gift Trust dated December 20, 2000~~ for the benefit of Gabriela C. Celio; ~~12,552~~24,873 shares held by the Richard Adamson Lumpkin Trust dated February 6, 1970 for the benefit of the children of Mary Lee Sparks; 605 shares held by the Richard Adamson Lumpkin Trust dated February 5, 1976 for the benefit of the children of Mary Lee Sparks; 300 shares held by the Mary Lee Sparks 1978 Trust for the benefit of John L. Sparks; 5,874 shares held by the John W. Sparks 2001 Irrevocable Trust dated July 5, 2001; ~~43,389~~130,610 shares held by the Richard Adamson Lumpkin Trust dated February 6, 1970 for the benefit of Margaret Lumpkin ~~Keon;~~Keon and 604 shares held by the Richard Adamson Lumpkin Trust dated February 5, 1976 for the benefit of Margaret Lumpkin Keon. Mr. Grissom has sole voting and investment power over these trusts. Mr. Grissom disclaims beneficial ownership of these ~~296,036~~547,667 shares held by the foregoing trusts. The above Series C Preferred Stock amount includes 50 shares held by the Richard Adamson Lumpkin Trust dated February 6, 1970 for the benefit of Mary Lee Sparks and 80 shares held by the Richard Adamson Lumpkin Trust dated February 6, 1970 for the benefit of Margaret Lumpkin Keon. Mr. Grissom disclaims beneficial ownership of these shares.


~~(12)~~(8)	~~The above Common Stock amount includes 334,449~~Includes 603,706 shares held by Mr. Melvin individually; 46,253 shares held jointly by Mr. Melvin and his spouse; and ~~43,298~~46,414 shares held for the account of Mr. Melvin under the Company’s Deferred Compensation Plan. ~~The above Series C Preferred Stock amount includes 489 shares held by Mr. Melvin individually.~~

~~(13)~~(9)

~~The above Common Stock amount includes 23,337~~Includes 30,486 shares held by Mr. Rowland individually; ~~12,993~~17,921 shares held jointly by Mr. Rowland and his spouse; ~~24,844~~19,708 shares held for the account of Mr. Rowland under an Individual Retirement Account; ~~5,820~~and 1,559 shares held for the account of Mr. Rowland under the Company’s Deferred Compensation ~~Plan; and options to purchase 9,000 shares of Common Stock. The Series C Preferred Stock amount includes 20 shares held jointly by Mr. Rowland and his spouse.~~Plan.

~~(14)~~(10)

~~The above Common Stock amount includes 216,300~~Includes 282,858 shares held by Mr. Sparks individually; ~~89,649~~40,828 shares held by Sparks Investment Group, LP; 18,880 shares held by the Sparks Foundation over which Mr. Sparks shares voting and investment power; 1,822 shares held by Mr. Sparks’ child, over which Mr. Sparks has shared voting and investment power; and ~~23,499~~25,191 shares held for the account of Mr. Sparks under the Company’s Deferred Compensation Plan. ~~The above Series C Preferred Stock amount includes 220 shares held by Mr. Sparks individually, and 10 shares held by Sparks Investment Group, LP.~~

~~(15)~~(11)

~~The above Common Stock amount includes 1,381~~Includes 40,421 shares held by ~~Mr. Zimmer individually.~~Ms. Westerhold individually; 1,960 shares held for the account of Ms. Westerhold under an Individual Retirement Account; 1,051 shares held for the account of Ms. Westerhold under the Company’s Deferred Compensation Plan; 20,236 shares held by DMW Investments, LLC and 44,224 shares held by Technology Group, LLC over which Ms. Westerhold shares voting and investment power; and 49 shares held for the account of the spouse of Ms. Westerhold under an Individual Retirement Account, 35,471 shares held by the Jeffrey A. Westerhold Revocable Trust, 8,227 shares held by the Andrew J. Westerhold Revocable Trust; and 8,227 shares held by the Madeline C. Westerhold Trust over which Ms. Westerhold shares voting and investment power.


~~(16)~~(12)	~~The above Common Stock amount includes 4,499~~Includes 1,732 shares held by Mr. Zimmer individually; 3,050 shares held for the account of Mr. Zimmer under an Individual Retirement Account; and 4,170 shares held for the account of Mr. Zimmer under the Company's Deferred Compensation Plan.


(13)	Includes 1,463 shares held by Mr. Smith individually; and 245 shares held for the account of Mr. Smith under the Company’s Deferred Compensation Plan.


(14)	Includes 11,342 shares held by Mr. Taylor individually; ~~4,052~~6,098 shares held for the account of Mr. Taylor under the Company’s 401(k) Plan and options to purchase ~~5,500~~2,500 shares of Common Stock. ~~The above Series C Preferred Stock amount includes 4 shares held by Mr. Taylor individually.~~

~~(17)~~(15)

The above Common Stock amount includes 10,394 shares held by Mr. Hedges individually; 1,493 shares held jointly with his spouse; 1,571 shares held for the account of Mr. Hedges under the Company’s 401(k) Plan; 8,014 shares held for the account of Mr. Hedges under the Company’s Deferred Compensation Plan; 1,156 shares held for the account of Mr. Hedges under an Individual Retirement Account; and options to purchase 5,500 shares of Common Stock. The above Series C Preferred Stock amount includes 5 shares held for the account of Mr. Hedges under an Individual Retirement Account.

~~(18)~~

~~The above Common Stock amount includes 9,526~~Includes 15,084 shares held by Mr. McRae individually; ~~2,188~~2,346 shares for the account of Mr. McRae under an Individual Retirement Account; ~~2,982~~3,477 shares held for the account of Mr. McRae under the Company’s 401(k) Plan; ~~1,990~~3,549 shares held for the account of Mr. McRae under the Company’s Deferred Compensation Plan; and options to purchase ~~4,000 shares of Common Stock. The above Series C Preferred Stock amount includes 2 shares held by Mr. McRae individually.~~


~~(19)~~	The above Common Stock amount includes 2,131 shares held by Ms. Allenbaugh individually; 462 shares held jointly with her spouse; 2,793 shares held for the account of Ms. Allenbaugh under the Company’s 401(k) Plan and options to purchase 5,5002,500 shares of Common Stock.


~~(20)~~(16)	~~The above amounts include additional~~Includes 2,984 shares held by Mr. Beesley individually; 2,166 shares held for the account of Mr. Beesley under the Company’s 401(k) Plan; 4,038 shares held for the account of Mr. Beesley under the Company's Deferred Compensation Plan and options to purchase 1,000 shares of Common Stock.


(17)	Includes shares for ~~four~~five executive officers not included in the above ~~table. The above Common Stock amount includes~~table and an aggregate of ~~32,000~~2,500 shares obtainable upon the exercise of options.


~~(21)~~(18)	Percentage is calculated on a partially diluted basis, assuming only the exercise of stock options which are exercisable within 60 days by each individual.


~~(22)~~	Percentage is calculated on a partially diluted basis, assuming only the exercise of stock options which are exercisable within 60 days by all director nominees, directors, named executive officers and other executive officers.


~~(23)~~	Percentage is calculated on a partially diluted basis, assuming only the exercise of stock options by such individual which are exercisable within 60 days, and the conversion of Series C Preferred Stock held by such individual. Each share of Series C Preferred Stock is convertible into approximately 246.43 shares of Common Stock.


~~(24)~~	Percentage is calculated on a partially diluted basis, assuming the exercise of all stock options which are exercisable within 60 days by all director nominees, directors, named executive officers and other executive officers and the conversion of 252,583 shares obtainable through the conversion of 1,025 shares of Series C Preferred Stock held by such individuals.

As of February 1, ~~2015~~2018, ~~the~~First Mid Bank acted as sole or co-fiduciary with respect to trusts and other fiduciary accounts which own or hold ~~191,941~~179,855 shares, or ~~2.7%~~1.42%, of the outstanding Common Stock of the Company, over which ~~the~~First Mid Bank has sole voting and investment power with respect to ~~179,529~~175,230 shares, or ~~2.6%~~1.38%, of the outstanding Common Stock and shared voting and investment power with respect to ~~12,412~~4,625 shares, or ~~0.2%~~0.04%, of the outstanding Common Stock.

PROPOSAL I1 - ELECTION OF DIRECTORS

The directors of the Company are divided into Classes I, II and III having staggered terms of three years. For this year's annual stockholders meeting, upon the recommendation of the Board of Director's independent directors, the Board of Directors has nominated for re-election as Class II directors, for a term expiring in ~~2018,~~2021, Holly A. Bailey and Joseph R. ~~Dively and~~Dively. Because William S. ~~Rowland.~~Rowland is retiring from the Board of Directors at the annual meeting, he was not nominated as a Class II director. The Board of Directors has adopted a mandatory retirement age for all directors of 70, provided directors are permitted to serve for the full term in which they reach age 70. Mr. Rowland reached age 70 during his term expiring at the annual meeting. Ms. Bailey and ~~Messrs.~~Mr. Dively ~~and Rowland~~ have served as directors of the Company since 2012 ~~2004~~ and ~~1991,~~2004, respectively. The ~~three~~two individuals receiving the highest number of votes cast will be elected as directors of the Company and will serve as Class II directors for a three-year term. Broker non-votes, because they are not considered votes cast, will not be counted in the vote totals. 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. Following Mr. Rowland's retirement, the number of directors will be eight, comprised of three Class I directors, two Class II directors and three Class III directors.

The following table sets forth as to each nominee and director continuing in office, his or her name, age, principal occupation and the year he or she first became a director of the Company. Unless otherwise indicated, the principal occupation listed for each person below has been his or her occupation for the past five years.


Name	Age at March 20, 2015	Principal Occupation	Year First Became Director	Year Term Expires		Age at March 16, 2018	Principal Occupation	Year First Became Director	Year Term Expires
DIRECTOR NOMINEES
Holly A. Bailey	44	President of Howell Asphalt Company (since 2008) and Howell Paving, Inc. (since 2013), a road construction company; Executive Vice President of Howell Paving, Inc. (2008-2013); and Vice President of Howell Asphalt Company and Howell Paving (1997- 2008); Director of the Company, the Bank Data Services and Insurance Group (since 2012).	2012	2015		47	President of Howell Asphalt Company (since 2008) and Howell Paving, Inc. (since 2013), a road construction company; Executive Vice President of Howell Paving, Inc. (2008-2013); and Vice President of Howell Asphalt Company and Howell Paving (1997- 2008); Director of the Company, First Mid Bank, Data Services and Insurance Group (since 2012).	2012	2018
Joseph R. Dively	55	Chairman, President and Chief Executive Officer of the Company (since January 2014); Senior Executive Vice President of the Company (May 2011-December 2013); President of the Bank (since May 2011); Senior Vice President of Consolidated Communications Holdings, Inc., a telecommunications holding company (2003-2011), and President of Illinois Telephone Operations, a local telecommunications provider (until 2008); Director of the Company and the Bank (since 2004); Director of Data Services (since 2009); Director of Insurance Group (since 2009).	2004	2015		58	Chairman, President and Chief Executive Officer of the Company (since January 2014); Senior Executive Vice President of the Company (May 2011-December 2013); President of First Mid Bank (since May 2011); Senior Vice President of Consolidated Communications Holdings, Inc., a telecommunications holding company (2003-2011), and President of Illinois Telephone Operations, a local telecommunications provider (until 2008); Director of the Company and First Mid Bank (since 2004); Director of First Clover Leaf Bank (from September 2016-March 2017); Director of Data Services (since 2009); Director of Insurance Group (since 2009).	2004	2018
William S. Rowland	68	Chairman, President and Chief Executive Officer of the Company (1999-2013); Executive Vice President of the Bank (1997-1999) and Treasurer and Chief Financial Officer (1989-1999) of the Company; Director of the Company and of the Bank (since 1999); Director of Data Services (since 1989); Director of Insurance Group (since 2002).	1991	2015
The Board of Directors recommends a vote "FOR" the election of Directors Bailey, Dively and Rowland for a term of three years.
The Board of Directors recommends a vote "FOR" the election of Directors Bailey and Dively for a term of three years.					The Board of Directors recommends a vote "FOR" the election of Directors Bailey and Dively for a term of three years.


Name		Age at March 20, 2015	Principal Occupation	Year First Became Director	Year Term Expires		Age at March 16, 2018	Principal Occupation	Year First Became Director	Year Term Expires
DIRECTORS CONTINUING IN OFFICE	DIRECTORS CONTINUING IN OFFICE					DIRECTORS CONTINUING IN OFFICE
Robert S. Cook		32	Managing Partner of TAR CO Investments LLC, a private investment company (since 2014); Vice President of FIG Partners LLC, an investment banking firm (from 2009-2014); Director of the Company, the Bank, Data Services and Insurance Group (since 2014).	2014	2016		35	Managing Partner of TAR CO Investments LLC, a private investment company (since 2014); Vice President of FIG Partners LLC, an investment banking firm (from 2009-2014); Director of the Company, First Mid Bank, Data Services and Insurance Group (since 2014).	2014	2019
Ray Anthony Sparks							61	Senior Advisor of Mattoon Area Family YMCA (since May 2015); Chief Executive Officer of Mattoon Area Family YMCA (2009-April 2015); private investor, Sparks Investment Group, LP (since 1997); former President of Elasco Agency Sales, Inc. and Electric Laboratories and Sales Corporation, a distributor of electrical supplies (until 1997); Director of First Mid Bank (since 1997) and of the Company (since 1994); Director of First Clover Leaf Bank (since September 2016); Director of Data Services (since 1996); Director of Insurance Group (since 2002).	1994	2019
James E. Zimmer							54	Owner, Zimmer Real Estate Properties, a student housing provider (since 2010); Co-Founder, Bio-Enzyme, an agriculture business focused on innovative solutions for farmers (since 2010); Chief Executive Officer of Channel Bio, a corn/soybean seed company owned by Monsanto Corporation (2008-2010); Director of the Company, First Mid Bank, Data Services and Insurance Group (since 2014).	2014	2019
Steven L. Grissom		62	Administrative Officer of SKL Investment Group, LLC, a private investment company (since 1997); Treasurer and Secretary of Consolidated Communications Holdings, Inc., and its predecessors, a telecommunications holding company (2003-2006); Director of the Bank and the Company (since 2000); Director of Data Services (since 2009); Director of Insurance Group (since 2009).	2000	2017		65	Chief Executive Officer of SKL Investment Group, LLC (since December 2015); Administrative Officer of SKL Investment Group, LLC, a private investment company (1997-November 2015); Treasurer and Secretary of Consolidated Communications Holdings, Inc., and its predecessors, a telecommunications holding company (2003-2006); Director of First Mid Bank and the Company (since 2000); Director of First Clover Leaf Bank (from September 2016-March 2017); Director of Data Services (since 2009); Director of Insurance Group (since 2009).	2000	2020
Gary W. Melvin		66	Consultant and director of Rural King Farm & Home Supplies stores, a retail farm and home supply store chain. President and Co-Owner, Rural King Farm & Home Supplies stores (1979-2013); Director of the Bank (since 1984); Director of the Company (since 1990); Director of Data Services (since 1987); Director of Insurance Group (since 2009).	1990	2017		69	Consultant and director of Rural King Farm & Home Supplies stores, a retail farm and home supply store chain (since 2013); President and Co-Owner, Rural King Farm & Home Supplies stores (1979-2013); Director of First Mid Bank (since 1984); Director of the Company (since 1990); Director of Data Services (since 1987); Director of Insurance Group (since 2009).	1990	2020
Ray Anthony Sparks		58	Chief Executive Officer of Mattoon Area Family YMCA (since 2009) and private investor, Sparks Investment Group, LP (since 1997); former President of Elasco Agency Sales, Inc. and Electric Laboratories and Sales Corporation, a distributor of electrical supplies (until 1997); Director of the Bank (since 1997) and of the Company (since 1994); Director of Data Services (since 1996); Director of Insurance Group (since 2002); .	1994	2016
James E. Zimmer		51	Owner, Zimmer Real Estate Properties, a premier student housing provider (since 2010): Founder, Bio-Enzyme, an agriculture business focused on innovative solutions for farmers (since 2010); Chief Executive Officer of Channel Bio, corn/soybean seed company, owned by Monsanto Corporation (2008-2010); Director of the Company, the Bank, Data Services and Insurance Group (since 2014).	2014	2016
Mary J. Westerhold							52	Vice President and Chief Financial Officer (since 1997) and Controller (from 1992-1997), Madison Telephone Company, Madison Communications Company and Madison Network Systems; Director of the Company, First Mid Bank, Data Services and Insurance Group (since September 2016); Director of First Clover Leaf Bank (from September 2016-March 2017).	2016	2020

The Board of Directors has determined that, except for Mr. Dively ~~and Mr. Rowland,~~, each of the members of the Board of Directors, ~~including Mr. Lumpkin during his time on the Board of Directors during 2014 prior to his resignation in July 2014,~~ is "independent" in accordance with the independence standards of the NASDAQ Stock Market LLC ("NASDAQ"). The Board of Directors has established an audit committee and a compensation committee. The Board of Directors has concluded all current members of the audit committee and compensation committee, and all members of ~~the~~both committees during ~~2014,~~2017, satisfy the independence, experience and other membership requirements of NASDAQ, as required by the audit committee charter and the compensation committee charter. The Board of Directors has also created other company-wide management committees composed of officers of the Company and its subsidiaries.

A total of 1316 regularly scheduled and special meetings were held by the Board of Directors during ~~2014~~2017. During ~~2014~~2017, all directors attended at least 75 percent of the meetings of the Board of Directors and the committees on which they served. The Company expects directors to attend the annual meeting, absent ~~scheduling or other similar conflicts. All~~special circumstances. Except for Mr. Grissom, all of the then current directors attended the Company’s ~~2014~~2017 Annual Meeting of Stockholders.

BOARD OF DIRECTOR QUALIFICATIONS

The Board of Directors seeks to be composed of a diverse group of persons with a variety of experience, qualifications, attributes and skills that enable it to meet the governance needs of the Company. The Board of Directors consists of a group of individuals who have a mix of skills and knowledge in the areas of banking, finance, accounting and business. All members of the Board of Directors have an understanding of finance and accounting, are able to understand fundamental financial statements and generally accepted accounting principles and their application to the accounting of the Company. In addition, members of the Board of Directors are active in, and knowledgeable about, the local communities in which the Company operates. A number of the members of the Company’s Board of Directors are also among the largest of the Company’s shareholders. Following is a description of each director’s specific experience and qualifications that led the Board of Directors to conclude that the person should serve as a director for the Company.

Holly A. Bailey has served as a director of the Company since 2012. Ms. Bailey has a bachelor’s degree in Economics from DePauw University and an MBA degree from Texas Christian University. She is the President of Howell Asphalt Company, Wabash Asphalt Company, Inc., General Contractors and Prosser Company, which are subsidiaries of Howell Paving, Inc., of which she is also President (since 2013). She served as Executive Vice President of Howell Paving, from 2008-2013 and Vice President of Howell Asphalt Company and Howell Paving from 1997 until 2008. Her leadership experience and the business knowledge gained in her work with these companies and her experiences within the communities served by the Company assist the Board of Directors in various areas of its oversight.

Robert S. Cook has served as a director of the Company since August 2014. Mr. Cook has a bachelor's degree in Finance from the University of Missouri. He is currently the managing partner of TAR CO Investments LLC, which primarily invests in community banks. From 2009 to 2014, Mr. Cook was Vice President of FIG Partners, LLC, an investment banking firm, where he led corporate development efforts with community banks and thrifts for the company's Midwest practice. He also serves on the board of directors of another bank. His experience analyzing financial statements and making assessments of community banks in the Midwest ~~assist~~assists the Board of Directors in it various aspects of oversight and decision making.

Joseph R. Dively has served as a director of the Company since 2004. Mr. Dively has a bachelor’s degree in Business from Eastern Illinois University and has also completed a “Finance for Executives” program through the graduate school of business at the University of Chicago. Mr. Dively has held a variety of management positions in diverse business units which included financial statement responsibilities since 1991. He served as Senior Executive Vice President of the Company and President of ~~the~~First Mid Bank from May 2011 to December 2013. On January 1, 2014, Mr. Dively became the Chairman of the Board of Directors and CEO of the Company. He also retained his position as President of ~~the~~First Mid Bank. Mr. Dively provides a wealth of institutional knowledge of the Company. Prior to his employment with the Company, Mr. Dively was Senior Vice President of Consolidated Communications Holdings, Inc., a publicly traded telecommunications holding company headquartered in Mattoon, Illinois. Mr. Dively has also served on the boards of directors of several other organizations where his duties included working with investors, executive teams and other board members. Mr. Dively’s current and previous experiences also assist the Board of Directors in dealing with issues related to the Company’s local communities and the Board of Directors also benefits from his perspective serving as a former executive officer of a publicly traded company.

Steven L. Grissom has served as a director of the Company since 2000 and has been determined by the Board of Directors to be an audit committee financial expert. Mr. Grissom has a bachelor’s degree in Business with an Accounting major from Eastern Illinois University, and has passed the Certified Public Accountant (“CPA”) and Personal Financial Specialist (“PFS”) exams. He was employed by a regional CPA firm from 1974 to 1981 where his experience included review of internal control procedures and analysis of major financial transactions including evaluation of appropriate accounting treatment under generally accepted accounting principles. From 1981 to 2005, Mr. Grissom held various positions at Illinois Consolidated Telephone Company which included tax and treasury responsibilities. Mr. Grissom is currently the ~~Administrative~~Chief Executive Officer of SKL Investment Group, LLC, a private investment company where his responsibilities include tax and accounting functions and evaluation of financial statements for various investment opportunities. These skills serve the Board of Directors in its assessment of complex financial and investment matters.

Gary W. Melvin has served as a director of the Company since 1990. Mr. Melvin has a bachelor’s degree in Economics from Western Illinois University and for thirty-five years (1979-2013) served as president, CEO and majority owner of Rural King Farm & Home Supplies, Inc., a retail farm and home supply store chain where he was actively involved with management in all aspects of the business. He currently serves as consultant and director, as well as a major stockholder, of Rural King Farm & Home Supplies, Inc. Mr. Melvin’s ownership and leadership role in an important local and regional retailer provides the Board of Directors with a knowledgeable and skilled local business outlook.

William S. Rowland has served as a director of the Company since 1991. Mr. Rowland has a bachelor’s degree in Accounting from St. Ambrose University. He served as Chairman of the Board of Directors and Chief Executive Officer of the Company until his retirement on December 31, 2013 (1999-2013). Previously, he was Treasurer and Chief Financial Officer of the Company (1989-1999). Prior to employment with the Company, Mr. Rowland was a CPA with the accounting firm KPMG, LLP. Mr. Rowland is and has been a member of several community boards, as well as the Illinois Bankers Association. Mr. Rowland brings to the Board of Directors his substantial institutional knowledge regarding the Company, including its operations and strategies. Mr. Rowland is retiring from the Board of Directors at the annual meeting.

Ray Anthony Sparks has served as a director of the Company since 1994. Mr. Sparks has a bachelor’s degree in Business Administration with an accounting major from Millikin University and an MBA degree from Eastern Illinois University. He is the Senior Advisor (since May 2015) and former Chief Executive Officer (2009-April 2015) of the Mattoon Area Family YMCA ~~(since 2009)~~ and a private investor (since 1997). He was President of Elasco Agency Sales, Inc. and Electric Laboratories and Sales Corporation, a distributor of electrical supplies until 1997. He has also served as a director and officer for various not-for-profit organizations in the community. Mr. Sparks has been a user of financial statements in these positions and has experience dealing with CPAs, investment bankers and attorneys. These experiences and his strong financial background assist the Board of Directors in all areas of its oversight.

Mary J. Westerhold has served as a director of the Company since September 2016, following the Company's acquisition of First Clover Leaf Financial Corp. She was as director of First Clover Leaf Financial Corp. from 2011-September 2016. Ms. Westerhold has a bachelor's degree in Business Administration with a minor in Finance from Stephens College and an MBA degree from St. Louis University. She is the Vice President and Chief Financial Officer (since 1997) and Controller (from 1992 to 1997) of Madison Communications, Inc. and its affiliate telecommunications companies, Madison Telephone Company and Madison Network Systems, Inc. She also served as a Commercial Loan Officer for Mark Twain Bancshares (1989-1991). Ms. Westerhold’s experience in managing the operations of the various companies provides the Board with valuable general business experience. In addition, her financial and accounting experience provides the Board with valuable insight in accounting and strategic transactions involving the Company. Additionally, having served as a director of First Clover Leaf Financial Corp., Ms. Westerhold brings in-depth knowledge of the Company's newly acquired operations and the market in which it operates.

James E. Zimmer has served as a director of the Company since August 2014. Mr. Zimmer has an MBA degree from Washington University. From 1992-2010, he held a variety of sales, marketing and executive positions throughout the agricultural industry with Monsanto Corporation. Mr. Zimmer is currently the owner and operator of Zimmer Real Estate Properties, a premier student housing provider and the ~~founder~~co-founder of Bio-Enzyme, an agriculture business focused on innovative solutions for farmers (since 2010). His experience and knowledge gained from these agriculture-related businesses will assist the Board of Directors in the communities it serves and various areas of its oversight.

BOARD OF DIRECTORS LEADERSHIP

Mr. Dively has served as President and Chief Executive Officer and Chairman of the Board of Directors of the Company since January 1, 2014. The Board of Directors believes that having the Chief Executive Officer and Chairman positions held by the same individual allows that individual to have multiple perspectives about the Company and its operations while optimizing the ability of the Board of Directors ~~members~~ to communicate with Company management. Also, because the members of the Board of Directors other than ~~Mr. Rowland and~~ Mr. Dively are independent, the knowledge of the Company that Mr. Dively brings to the Board of Directors helps to enhance the Board of Directors' leadership of the Company. The Board of ~~DIrectors~~Directors has no fixed policy with respect to combining or separating the roles of the Chief Executive Officer and the Chairman of the Board of Directors and will continue to review the Board of Directors' leadership structure from time to time in order to ensure that the leadership is optimal for the Company at that time.

At any time that the Chief Executive Officer and Chairman of the Board positions are held by the same individual, the Board of Directors may, in its discretion, appoint a lead independent director. At its meeting on January 28, 2014, the Board of Directors appointed Mr. Sparks as its lead independent director. Prior to Mr. Sparks’ appointment, the Board of Directors did not have a lead independent director. The responsibilities of the lead independent director include the following: acting as a liaison between the Chairman and the independent members of the Board of Directors; advising the Chairman on the quality, quantity and timeliness of the flow of information from management; serving as a resource to the members of the Board of Directors on corporate governance practices and policies; and coordinating and moderating executive sessions of the independent members of the Board of Directors.

BOARD OF DIRECTORS ROLE IN RISK OVERSIGHT

The Board of Directors oversees the risk management of the Company through its committees, management committees and the Chief Executive Officer. The Board of Directors' audit committee monitors risks related to (1) the effectiveness of the Company’s disclosure controls and internal controls over financial reporting, (2) the integrity of its Consolidated Financial Statements, (3) compliance with laws and regulations, (4) risks and exposures relating to financial reporting, particularly disclosure and SEC reporting, (5) internal and independent auditors and (6) tax, investment, credit and liquidity matters. In addition, the audit committee oversees the internal audit function and communicates with the independent registered public accountant. The compensation committee is also involved in risk management through its review of risks in the Company’s compensation policies and practices for employees. The Board of Directors' recognition of the importance of risk management oversight and their role in representing the interests of stockholders is enhanced as a result of the Board of Directors members’ collective beneficial ownership of approximately ~~22%~~17% of the outstanding shares of Common Stock of the Company.

At its monthly meetings, the Board of Directors receives the minutes from each of the Company's management committee ~~meeting,~~meetings, as well as various reports from executive management, including the senior Risk Management officer. The Board of Directors reviews and discusses these reports with each of the executive managers. The Board of Directors reviews the status of all classified assets and trends in loan delinquency and reviews the allowance for loan losses each quarter. ~~In addition, three members of the Board of Directors serve on the senior loan committee each for a term of two years.~~ The senior loan committee approves all loan underwriting decisions in excess of $2$4 million and up to ~~75% of the legal lending limit which was $26 million at~~ ~~December 31, 2014~~.$15 million. The Board of Directors approves all underwriting decisions in excess of ~~75% of the legal lending limit.~~$15 million.

The Board of Directors also reviews the policies and practices of the Company on a regular basis. In addition, the Board of Directors reviews corporate strategies and objectives, evaluates business performance and reviews the annual business plan.

NOMINATIONS FOR DIRECTOR

The Company does not maintain a standing nominating committee but has adopted a Director Nomination Policy. The ~~Board's~~Board of Directors' independent directors (the "Independent Directors") perform the functions of a nominating committee, and considers and acts on all matters relating to the nomination of individuals for election as directors. Pursuant to the Director Nomination Policy, the Independent Directors review and make recommendations regarding the composition and size of the Board of Directors in order to ensure that it has the requisite expertise and that its membership consists of persons with sufficiently diverse backgrounds and satisfies NASDAQ’s listing requirements regarding independent directors. The Company believes the diverse backgrounds and perspectives of its current directors, as described above under “Board Director Qualifications,” are appropriate to the oversight of the Company’s management team and performance. The Board of Directors does not believe it needs a separate nominating committee because the Independent Directors have the time and resources to perform the function of selecting director nominees. Also, all but ~~two~~one of the directors ~~satisfy~~satisfies the independence requirements of the NASDAQ Stock

Exchange. The Independent Directors act in accordance with the Company’s Director Nomination Policy and the Company's Certificate of Incorporation when performing their nominating function.

In the consideration of director nominees, the Independent Directors consider, at a minimum, the following factors for new directors, or the continued service of existing directors: (1) the ability of the prospective nominee to represent the interests of the stockholders of the Company; (2) the prospective nominee’s standards of integrity, commitment and independence of thought and judgment; (3) the prospective nominee’s ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties; (4) the extent to which the prospective nominee contributes to the diversity of talent, skill and expertise appropriate for the Board of Directors; and (5) the prospective nominee’s contributions to the Board of Directors as a whole.

Any stockholder who wishes to recommend a director candidate for consideration by the Independent Directors should submit such recommendation in writing to the Board of Directors at the address set forth below under “Communications with Directors.” A candidate recommended for consideration must be highly qualified and must be willing and able to serve as director. Director candidates recommended by stockholders will receive the same consideration given to other candidates and will be evaluated against the criteria above.

NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS OF DIRECTORS

Any stockholder wishing to nominate an individual for election as a director at the Annual Meeting must comply with certain provisions in the Company's Certificate of Incorporation. The Company's Certificate of Incorporation establishes an advance notice procedure with regard to the nomination, other than by or at the direction of the Board of Directors, of candidates for election as directors. If the notice is not timely and in proper form, the proposed nomination will not be considered at the Annual Meeting. Generally, such notice must be delivered to or mailed to and received by the Secretary of the Company not fewer than 14 days nor more than 60 days before a meeting at which directors are to be elected. To be in proper form, each written nomination must set forth: (1) the name, age business address and, if known, the residence address of the nominee, (2) the principal occupation or employment of the nominee for the past five years, and (3) the number of shares of stock of the Company beneficially owned by the nominee and by the nominating stockholder. The stockholder must also comply with certain other provisions set forth in the Company's Certificate of Incorporation relating to the nomination of an individual for election as a director. For a copy of the Company's Certificate of Incorporation, which includes the provisions relating to the nomination of an individual for election as a director, an interested stockholder should contact the Secretary of the Company at 1421 Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938.

AUDIT COMMITTEE

The members of the audit committee of the Company during the fiscal year ended December 31, ~~2014~~2017 were, and on the date of this proxy statement are, Messrs. Grissom, Melvin, Sparks, Cook, Rowland and Zimmer, Ms. Bailey and ~~Messrs. Grissom, Lumpkin (until his resignation in July 2014), Melvin and Sparks and Messrs. Cook and Zimmer (following their appointment to the Board in August 2014).~~Ms. Westerhold. The audit committee met 6six times in ~~2014~~2017. The audit committee assists the Board of Directors with the review of the Company’s financial statements and the Company’s compliance with applicable legal and regulatory requirements. Additionally, the audit committee appoints, and is directly responsible for the oversight of, the independent auditor, pre-approves all services performed for the Company by the independent auditor and oversees the Company’s internal audit function. The audit committee may also retain independent legal, accounting or other advisors as it may deem necessary in order to carry out its duties.

The Board of Directors determined that each member of the audit committee satisfies the independence, experience and other membership requirements of NASDAQ. The Securities and Exchange Commission requires that Boards of Directors disclose whether any audit committee member qualifies as an “audit committee financial expert” adas defined under SEC guidelines. The Board of Directors determined that Steven L. Grissom is an audit committee financial expert. Accordingly, Mr. Grissom is presumed to qualify as a financially sophisticated audit committee member under the rules of NASDAQ.

The audit committee acts pursuant to a written charter that was reviewed and reassessed for adequacy and reaffirmed by the Board of Directors on January ~~27, 2015.~~23, 2018. A copy of the audit committee charter may be found on the Company’s website at www.firstmid.com. The audit committee will continue to review and reassess the charter from time to time but not less than annually.

COMPENSATION COMMITTEE

The members of the compensation committee of the Company during the fiscal year ended December 31, ~~2014~~2017 were, and on the date of this proxy statement are, Messrs. Grissom, Melvin, Sparks, Cook, Rowland and Zimmer, Ms. Bailey and ~~Messrs. Grissom, Lumpkin (until his resignation in July 2014), Melvin and Sparks and Messrs. Cook and Zimmer (following their appointment to the Board in August 2014).~~Ms. Westerhold. The compensation committee met 5seven times in ~~2014~~2017. 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 reviewing and approving base salaries and annual bonuses, conducting a review of executive officers’ salary, incentive compensation, retirement benefits and fringe benefits compared to other financial services companies in the region, and using its best judgment in determining that total executive compensation reflects the Company’s mission, strategy and performance.

The Board of Directors determined that each member of the compensation committee satisfies the independence, experience and other membership requirements of NASDAQ. The compensation committee acts pursuant to a written charter that was adopted by the Board of Directors on ~~December 17, 2013.~~January 23, 2018. A copy of the compensation committee charter may be found on the Company’s website at www.firstmid.com. The compensation committee will review and reassess the charter from time to time but not less than annually.

Additionally, the Board of Directors, or if the Board of Directors so delegates, a sub-committee of the compensation committee, has responsibility for administering the stock incentive plans of the ~~Company.~~Company and approves grants based on the compensation committee's recommendation. For information about the role of the compensation committee with respect to executive compensation, see the “Compensation Discussion and Analysis” section of this proxy statement.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During ~~the fiscal year ended~~ ~~December 31, 2014~~,2017, Messrs. ~~Hedges~~Grissom, Melvin, Sparks, Cook, Rowland and Sparks served as directors, and Mr. Grissom served as President and director, of Mattoon Area Industrial Development Corporation, a not-for-profit industrial development corporation; and Mr. Sparks served as Chief Executive Officer and Mr. HedgesZimmer and Ms. Bailey and Ms. Westerhold served on the compensation committee. No member of the compensation committee was, during 2017, an officer or employee of the Company, was formerly an officer of the Company except for Mr. Rowland (who served as ~~board members~~Chairman, President and CEO of the ~~Mattoon Area Family YMCA,~~Company from 1999-2013), or had any relationship requiring disclosure by the Company as a ~~not-for-profit organization. See also “Certain Relationships and Related Transactions.”~~related party transaction under Item 404 of Regulation S-K. During 2017, none of the Company’s executive officers served on the board of directors or the compensation committee of any other entity.

COMMUNICATIONS WITH DIRECTORS

Any stockholder or other interested person may communicate with the Board of Directors or any individual director by sending written correspondence addressed to the Board of Directors or such individual director in care of the Secretary of the Company at First Mid-Illinois Bancshares, Inc., 1421 Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938. The Secretary or the designee thereof will forward such correspondence to the Board of Directors or the relevant director.

CODE OF CONDUCT

The Company has adopted a code of conduct for directors, officers, and employees of the Company. This code of conduct is posted on the Company’s website at www.firstmid.com. The code of conduct sets forth guiding principles by which the Company and its directors, officers and employees conduct business with the Company’s stockholders and customers.

SECTION 16(a) - BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based solely upon its review of reports on Forms 3, 4 and 5 and any amendments furnished to the Company under Section 16 of the Securities Exchange Act of 1934, and written representations from the executive officers and directors that no other reports were required, the Company believes that all such forms that were required to be filed by all of its officers, directors and beneficial owners of more than 10% of its Common Stock were filed on a timely basis by reporting persons during the fiscal year ended December 31, ~~2014.~~2017, except that a late report on Form 4 was filed by Mr. Zimmer regarding shares purchased through an IRA rollover on March 15, March 17 and March 21, 2017. These transactions were reported to the Securities and Exchange Commission (the "SEC") on October 11, 2017.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The audit committee reviewed and discussed with management the Company's audited financial statements as of and for the fiscal year ended December 31, ~~2014~~2017. The audit committee also discussed with the independent auditors, BKD, LLP, the matters required to be discussed under ~~standards~~Auditing Standard No. 1301 of the Public Company Accounting Oversight Board ~~(United States)~~("PCAOB"). The audit committee received the written disclosures and the letter from BKD, LLP required by applicable requirements of the PCAOB regarding BKD, LLP’s communications with the audit committee concerning independence, and discussed with BKD, LLP the independence of that firm.

Based on the review and discussion referred to above, the audit committee recommended to the Board of Directors that the audited financial statements referred to above be included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2014~~2017. This audit committee report is submitted by the audit committee of the Board of Directors:



Ray Anthony Sparks, Chairman	~~Steven L. Grissom~~Gary W. Melvin
Holly A. Bailey	~~Gary W. Melvin~~William S. Rowland
Robert S. Cook	Mary J. Westerhold
Steven L. Grissom	James E. Zimmer

[This audit committee report is in draft form and will be finalized in the definitive proxy statement]

FEES OF INDEPENDENT AUDITORS

Audit Fees. The aggregate fees billed for professional services rendered by BKD, LLP for the audit of the Company's annual financial statements for the fiscal years ended December 31, ~~2014~~2017 and ~~2013~~2016, the audit of the Company’s internal control over financial reporting as of December 31, ~~2014~~2017 and ~~2013~~2016, and the review of the financial statements included in the Company's Quarterly Reports on Form 10-Q for ~~2014~~2017 and ~~2013~~2016 were $~~207,850~~212,000 and $~~202,050~~212,000, respectively.

Audit-Related Fees. The aggregate fees billed for professional services rendered by BKD, LLP for audit-related services for the fiscal years ended December 31, ~~2014~~2017 and ~~2013~~2016 (namely employee benefit plan audit) were $~~16,800~~23,200 and $~~18,050~~17,000, respectively.

Tax Fees. The aggregate fees billed for professional services rendered by BKD, LLP for the fiscal years ended December 31, ~~2014~~2017 and ~~2013~~2016 (namely preparation of consolidated tax return and tax advice) were $~~17,700~~41,930 and $~~22,000~~28,375, respectively.

All Other Fees. The aggregate fees billed for other professional services rendered by BKD, LLP for the fiscal years ended December 31, ~~2014~~2017 and ~~2013~~2016 (namely comfort letters, consents and special audit procedures required following the Company's acquisitions completed during 2016) were $033,500. and $13,500, respectively.

The audit committee pre-approves all auditing services and permitted non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services. The audit committee pre-approved all services performed by the independent auditors in ~~2014~~2017.

INDEPENDENT PUBLIC ACCOUNTANTS

BKD, LLP acted as independent certified public accountants of the Company and its subsidiaries for the fiscal ~~years~~year ending December 31, ~~2014~~ ~~and~~ ~~2013~~2017. BKD, LLP has served as the Company's independent ~~auditors~~certified public accountant since July 26, 2005.

A representative from BKD, LLP is expected to be present at the annual meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions. The Company has not yet appointed its independent auditors for the fiscal year ending December 31, ~~2015~~2018. The Company expects to appoint its independent auditors for ~~2015~~2018 at its March meeting of the Board of Directors.

COMPENSATION COMMITTEE REPORT

The compensation committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and, based on such review and discussion, the compensation committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

This compensation committee report is submitted by the compensation committee of the Board of Directors:



Holly A. Bailey, Chairman	~~Gary W. Melvin~~Ray Anthony Sparks
Robert S. Cook	~~Ray Anthony Sparks~~William S. Rowland
Steven L. Grissom	Mary J. Westerhold
Gary W. Melvin	James E. Zimmer

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis explains the objectives and philosophy underlying the Company’s executive compensation program and the material elements of the compensation paid to the Company’s executive officers, including the executive officers named in the Summary Compensation Table of this proxy statement (the “named executive officers”). The named executive officers for ~~2014~~2017 were:



Joseph R. Dively:	President, Chairman & Chief Executive Officer
Matthew K. Smith:	Executive Vice President & Chief Financial Officer
Michael L. Taylor:	Senior Executive Vice President & Chief ~~Financial~~Operating Officer
~~John W. Hedges:~~	~~Senior Executive Vice President~~
Eric S. McRae:	Executive Vice President & Chief Credit Officer
~~Laurel G. Allenbaugh:~~Bradley L. Beesley:	Executive Vice President & Chief Trust and Wealth Management Officer

~~(Mr. Dively assumed the role of President, Chairman & Chief Executive Officer effective January 1, 2014 following Mr. Rowland's retirement from this position on December 31, 2013.)~~

Executive Compensation Objectives

It is the policy of the Company to compensate its executives in a manner that is equitable and competitive based on their responsibilities, performance and market conditions. The Company’s compensation objectives with respect to its named executive officers are to:

Provide incentive to maximize stockholder value by aligning the executives’ interests with those of the stockholders.

Enable the Company to attract and retain the best available executive talent.

Reward individual performance and contributions to the Company.

Setting Executive Compensation

The compensation committee attempts to meet these objectives by providing a mix of key compensation elements that include base salary, annual cash incentives and equity-based compensation. In setting aggregate compensation for each of the named executive officers, the compensation committee first establishes appropriate levels of base salary for the executives, and then establishes the opportunity for the executives to earn additional compensation through annual cash incentives and longer-term equity compensation. (Actual grants of equity compensation are approved by the Board of Directors pursuant to the compensation committee's recommendation.) The amount of such additional compensation varies with position and, in the case of annual and long-term incentives, is also conditioned on attainment of corporate or individual performance measures. The Company also provides retirement benefits, severance and change in control benefits, and a limited number of perquisites and other personal benefits in order to ensure a complete and competitive compensation plan.

The compensation committee uses the key elements of compensation to meet the objectives of its executive compensation program as follows:

Provide incentive to maximize stockholder value by aligning the executives’ interests with those of the stockholders. In the past, the compensation committee has used stock options as a way to unify the interests of the executives and stockholders. Issuing options that have a 10 year term and incrementally vest over time, but only so long as the executive remains employed by the Company, encourages an executive to increase the Company’s stock value over time. Since 2011, the compensation committee has granted ~~annual and cumulative~~ performance awards under its executive long term incentive plan that consist of restricted stock awards ~~and~~and/or restricted stock units. The compensation committee also bases a significant portion of an executive’s cash incentive on attainment of certain corporate performance metrics, which encourages the executive to work to increase the Company’s profitability and in turn, its stock value.

The compensation committee believes that the components of the long term incentive plan align key executive compensation with the Company’s performance goals. The long term incentive plan includes ~~both single and~~ multiple year goals which ensure that the executives are focused on longer term sustainability of earnings and growth in the book value of the Company. Lastly, the restricted stock and restricted stock units issued under the long term incentive plan awards offer less market risk for executives and less dilutive potential to the current owners of the Company’s stock.

Enable the Company to attract and retain the best available talent. In order to achieve this objective, the compensation committee believes it must pay compensation that is competitive. As described below, the compensation committee reviews and monitors the compensation paid by companies that are comparable to the Company to ensure that compensation packages are competitive.

Reward individual performance and contributions to the Company. The compensation committee’s evaluation of the individual performance of each executive affects his or her compensation. Individual performance is an important factor in determining base salary, which in turn affects the amount of cash incentive compensation that can be ~~earned.~~earned and equity compensation that is granted. Individual performance is also a component of the cash incentive compensation and, when awarded, equity compensation.

The compensation committee makes all compensation decisions for the CEO and all other executive officers of the Company. The CEO annually reviews the performance of each executive officer (other than himself) and makes recommendations to the compensation committee. The compensation committee considers the CEO’s recommendations when making its final compensation decisions for all executives other than the CEO. Although the compensation committee has the discretion to make all final decisions, the recommendation of the CEO is an important factor. The compensation committee believes that its ability to exercise discretion in setting the elements of compensation for its executives provides flexibility to establish appropriate overall compensation levels and achieve the Company’s objectives.

Key Elements of Compensation

Each year the compensation committee reviews compensation data of the most highly paid executives of other comparable banking institutions. For ~~2014~~,2017, the data consisted of a compensation survey, prepared by the Company’s human resources director, of publicly traded banks in non-urban markets in the upper Midwest who directly compete with the Company or who have market capitalization comparable to that of the Company. (The banks included in the ~~2014~~2017 analysis ranged in size from approximately $1$1 billion to $5$5 billion in assets). Because these institutions frequently recruit individuals for senior executive positions requiring similar skills and backgrounds to the individuals recruited by the Company, the compensation committee uses this information as a general guide in establishing the base salaries, cash incentives and equity compensation of the named executive officers. The compensation committee generally aligns compensation components with those used by the peer institutions and attempts to maintain a comparable level of total compensation (i.e., salary, annual cash incentives and equity compensation). However, the compensation committee does not rely solely on this information and does not benchmark its decisions regarding total compensation or elements of compensation to any particular percentile range of the comparator groups of companies.

In addition, the compensation committee considers each executive’s current salary, his or her individual performance, the financial performance of the Company, the anticipated difficulty of replacing the executive with a person of comparable experience and skill and the recommendation of the CEO. The compensation committee also may periodically engage the services of independent consultants with knowledge and experience in such matters, although it did not do so in setting 2017 compensation. In April 2017, the compensation committee retained the services of Blanchard Consulting to conduct an in-depth review of the Company’s executive compensation program. The compensation committee considered various factors bearing upon Blanchard Consulting’s independence and determined that the firm is independent and that its engagement did not present any conflicts of interest. Blanchard Consulting provides no other services to the Company. With the consultant’s assistance, the compensation committee selected a peer group of eight publicly traded bank holding companies in non-urban areas in the Midwest of similar size to the Company, consisting of the following companies:

Stock Yards Bancorp, Inc.

QCR Holdings, Inc.

Mercantile Bank Corporation

Horizon Bancorp

German American Bancorp, Inc.

Farmers National Banc Corp.

Ames National Corporation

Southern Missouri Bancorp, Inc.

The peer group information, as well as the data from the general market surveys discussed above, formed the basis for making changes to the current compensation program. Total compensation for the named executive officers was initially targeted at the 25~~2014~~^thto 50^th percentile of the peer group for similar executive positions, then adjusted based on various factors, including the market survey data, individual performance and the experience level of the executive. As a result of the consultant’s review, the compensation ~~decisions.~~committee approved changes to the current compensation program beginning with 2018 pay decisions, including (i) salary increases for certain executives, (ii) an increase in the maximum annual bonus opportunity in 2018 from 50% to 75% for the CEO and from 35% to 40% for the other named executive officers, and (iii) a change to the long term equity compensation component such that awards in 2018 are subject to three-year service-based

vesting, and awards in subsequent years will be subject to a one-year performance period, then service-based vesting. In connection with the redesign of the equity component, the compensation committee approved the acceleration of the vesting of outstanding equity awards, effective as of December 15, 2017. (See “Equity Compensation” in this Compensation Discussion and Analysis for more information.)

Base Salary

Executives are paid an annual salary. The compensation committee reviews salaries annually in the beginning part of each year. Based on the guidelines and factors described above, the compensation committee, in early ~~2014~~2017, concluded that adjustments to base salaries for certain named executive officers were necessary in order to keep compensation for named executive officers competitive. In addition to the factors noted above, the compensation committee considered the level of the executive's accomplishment of individual goals for the prior year, the number of individuals the executive supervises, the level of duties and responsibilities assumed by the executive and the strategic implications of the decisions the executive is required to make.

The compensation committee established the ~~2014~~2017 base salary for the named executive officers as follows (salary increases were effective as of ~~March 1,~~ ~~2014~~)February 13, 2017, except for Mr. Smith, whose salary increase was effective July 25, 2017 in connection with his promotion):


Executive	2014 Salary Rate	$ Increase from 2013 Salary Rate	2017 Salary Rate	$ Increase from 2016 Salary Rate
Mr. Dively	$330,000	$10,000	$378,344	$21,416
Mr. Smith			$205,000	$10,000
Mr. Taylor	$243,400	$25,000	$279,083	$13,290
Mr. Hedges	$248,800	$9,600
Mr. McRae	$221,730	$8,530	$252,040	$11,993
Ms. Allenbaugh	$178,240	$5,200
Mr. Beesley			$167,493	$0

The actual salaries paid to the named executive officers in ~~2014~~2017 are set forth in the “Salary” column of the Summary Compensation Table of this proxy statement.

Annual Cash Incentives

The named executive officers are eligible to participate in the Company’s Incentive Compensation Plan (the "Plan”), which is designed to reward executives in increasing Company profitability ~~and achieving individual accomplishments~~ which ~~create~~creates stockholder value. The Company reserves the right to require its executives to return all or a portion of incentive cash compensation paid in the event of an earnings restatement of previously issued financial statements.

In January ~~2014~~2017, the compensation committee determined the target cash incentive opportunity for each named executive officer, ~~was entitled to receive~~expressed as a percentage of his ~~or her~~ base salary rate in effect for ~~2014~~2017. This amount was based on individual performance during the previous year, as well as the level of duties and responsibilities assumed by the executives in their respective positions. The percentage of salary payable as cash incentive was consistent with the amounts in each named executive officer’s employment agreement and did not change from ~~2013.~~2016.

Since successful execution of the Company’s strategic plan requires that members of the executive management team work closely together ~~(sometimes to the detriment of individual personal goals)~~ and because senior management has the potential greatest influence on Company profitability, the compensation committee determined ~~each executive’s~~that incentive opportunity for ~~2014~~2017 would continue to be based 70% on the Company’s net income (exclusive of non-recurring costs associated with acquisitions) and 30% on the Company's asset quality ~~(determined by totaling non-performing~~(adversely classified loans and repossessed ~~assets).~~assets as a percent of total loans) for Messrs. Dively, Smith, Taylor and McRae. The ~~Compensation Committee~~compensation committee also determined that incentive opportunity for 2017 would continue to be based 70% on the Company’s net income (exclusive of non-recurring costs associated with acquisitions) and 30% on the profitability of the Wealth Management group ("WM") for Mr. Beesley. The compensation committee utilizes the asset quality goal, in addition to the net income goal, based on the premise that asset quality has a strong correlation to future loan losses and therefore, future profitability, while net income represents current profitability. The ~~Compensation Committee~~compensation committee believes the combination of these two metrics represents the best measures of ~~shareholder~~stockholder value for the near term.

The target cash incentive opportunity for each named executive officer established for ~~2014~~2017 was based on a percentage of the ~~Executive's~~executive's salary rate in effect beginning ~~March 1, 2014,~~February 13, 2017 (July 25, 2017 for Mr. Smith), as follows:


Executive	% of Salary Payable as Cash Incentive	% of Cash Incentive Tied to Net Income	% of Cash Incentive Tied to Asset Quality	% of Salary Payable as Cash Incentive	% of Cash Incentive Tied to Net Income	% of Cash Incentive Tied to Asset Quality	% of Cash Incentive Tied to WM Profitability
Mr. Dively	50%	70%	30%	50%	70%	30%
Mr. Smith				35%	70%	30%
Mr. Taylor	35%	70%	30%	35%	70%	30%
Mr. Hedges	35%	70%	30%
Mr. McRae	35%	70%	30%	35%	70%	30%
Ms. Allenbaugh	35%	70%	30%
Mr. Beesley				35%	70%		30%

At the same time, the compensation committee established the criteria for measurement of the these goals. The net income target was determined using the ~~prior year’s~~current year budgeted net ~~income and an~~income. The asset quality target ~~to be~~was determined based on a percentage of the current balance of total loans outstanding (which was $1.9 billion) at December 31, ~~2014.~~2017. The ~~Company also revised its definition of asset quality~~WM profitability target was determined using the budgeted profitability for ~~the 2014 goal to include adversely classified loans because it believes this metric is a better indicator for the potential future asset quality of the loan portfolio. In~~ ~~2013, the Company’s net income was~~ ~~$14.7 million~~ ~~and total non-performing assets (a defined for the 2014 goal) was~~ ~~$16.5 million~~.2017. Using ~~this~~these as a base line, the compensation committee determined the following ~~2014~~2017 goal criteria:

~~Asset Quality~~ ~~(1)~~

~~(1) For this calculation, December 31,~~ ~~2014~~ ~~actual total loan balance of $1.062 billion was used.~~



	Performance	Net Income	Asset Quality	WM Profitability	% of Opportunity
Threshold:	85% of current year budgeted net income, adversely classified assets of 3.0% of current year loan balance and 85% of 2017 WM budget	$22.2 million	3.0%	$1.5 million	25%
Target:	100% of current year budgeted net income, adversely classified assets of 2.8% of current year loan balance and 100% of 2017 WM budget	$26.1 million	2.8%	$1.8 million	60%
Superior:	105% of current year budgeted net income, adversely classified assets of 2.5% of current year loan balance and 105% of 2017 WM budget	$27.4 million	2.5%	$2.0 million	100%

The compensation committee has the discretion to pay a prorated portion of the cash incentive opportunity for attainment of levels between ~~minimum,~~ threshold, budget and superior, or for attainment of levels above superior. Operations for ~~2014~~2017, adjusted upward by $1.4 million for the net impact of adjustments due to changes in tax law, resulted in net income of $~~15.46 million~~28.1 million,which was ~~slightly below~~above the superior ~~level for~~ ~~98%~~ ~~payout. Balances of total non-performing~~level. Adversely classified assets on December 31, ~~2014~~2017 totaled ~~$10~~$39.9 million or 2.09% of the current year loan balance, which was also above the superior level. Wealth Management profitability for 2017 was $2.4 million, which ~~exceeded~~was above the superior ~~level for~~ ~~100%~~ ~~payout. The~~level. Based on these results, the compensation committee ~~did not adjust~~approved a payout at 100% of the ~~payment opportunity for achievement of above~~ superior ~~performance, and the~~level. The cash incentive ~~award was~~awards were based on ~~corporate~~ performance achievement ~~of 99%:~~as follows:

(1) represents opportunity for Messrs. Dively, Smith, Taylor and McRae

(2) represents opportunity for Mr. Beesley

Based on the ~~99% level~~above levels of attainment, the following bonuses were paid for ~~2014:~~

Mr. Beesley maintains ongoing responsibilities for managing a portfolio of brokerage customers that includes providing investment advice and completing investment trades. Pursuant to the terms of his employment agreement, and consistent with standard practice in the brokerage industry, Mr. Beesley is entitled to 30% of net revenues he generates on his individual book of business through First Mid Bank's broker/dealer. Accordingly, the compensation committee approved an additional annual cash incentive for Mr. Beesley for 2017 of $107,353.

The compensation committee grants long-term equity compensation in order to motivate executives to increase stockholder value over the long term and more closely link the financial interests of the Company’s executives with those of its stockholders. ~~The Company reserves~~(Actual grants of equity compensation are approved by the ~~right~~Board of Directors pursuant to ~~require its executives to return all or a portion of~~the compensation ~~paid in the event of an earnings restatement of previously issued financial statements.~~committee's recommendation.)

Since 2011, the compensation committee has made awards pursuant to the Executive Long-Term Incentive Program (LTIP), which provides a framework for granting awards of restricted stock and restricted stock units (RSUs) under the ~~2007~~Company's Stock Incentive Plan. The compensation committee believes that the components of the LTIP more closely align key executive compensation with the Company’s performance goals than the stock options granted in prior ~~years. The LTIP includes single~~years and ~~multiple year goals which ensure~~ensures that the executives are focused on longer term sustainability of earnings and growth in the value of the Company. The LTIP also gives the compensation committee the ability to change the types and weightings of the metrics used for the performance goals to which the awards are subject. Prior to 2015, the LTIP included annual and three-year goals. In January 2015, the compensation committee restructured the LTIP to reduce its complexity while retaining the long-term component and the overall equity value awarded to participants. The LTIP grants made in January 2017 followed this methodology, so the awards were still performance-based and subject to the same performance criteria, but, (i) the awards were entirely in the form of RSUs (no restricted stock); (ii) the annual award component was eliminated, so all of the RSUs (as adjusted for performance) vest at the end of a three-year performance period; and (iii) at the end of the performance period the units are settled entirely in shares of stock (no 50% cash payment).

Under the LTIP ~~for~~in January ~~2014~~2017, the compensation committee set an aggregate target value of the awards to be made to ~~the~~each executive. In determining these values, the compensation committee did not use a formulaic approach, but took into account historic grants, Company performance and individual levels of responsibility. The value of equity awarded to each executive iswas intended to be proportionate to the individual’s responsibility to influence the strategic direction of the Company and create stockholder value. ~~Of this target value, 50%~~Each award was granted ~~as an Annual Performance Award~~with a three-year performance period ending December 31, 2019 and ~~50% was granted as a Cumulative Performance Award. Each Award consists~~consisted entirely of ~~restricted stock (50%) and restricted stock units (50%), except that Awards to retirement-eligible executives (which include Mr. Hedges) consist solely of restricted stock units (RSUs).~~RSUs. The number of ~~shares of restricted stock and~~ RSUs subject to each Award iswas determined by dividing the target value by the closing price of the common stock on the date of grant.

The compensation committee also set performance goals to which each ~~Award is~~award was subject. The target number of ~~shares or~~ RSUs subject to each ~~of the Awards~~award is adjusted by the compensation committee at the end ~~of each applicable~~the performance ~~period. The Annual Performance Award has a one-year performance~~ period, ~~ending December 31, 2014,~~ and the adjusted number of shares of restricted stock and RSUs vest 25% as of the end of the performance period and 25% on December 15, 2015, December 15, 2016 and December 15, 2017. If either of the goals for the Annual Performance Award are not met at threshold level and result in forfeited shares, the Annual Performance Award granted in the following year will be increased by the target number of shares subject to the forfeited Award. The Cumulative Performance Award has a three-year performance period ending December 31, 2016, and the adjusted number of shares of restricted stock and RSUs vest as of such date. ~~When the vested Award is settled, the restricted stock is settled in shares and the RSUs~~Vested awards are settled entirely in ~~cash, except that RSUs held by retirement-eligible executives are settled half in shares and half in cash.~~stock. Until an executive’s ~~Award~~award vests or is forfeited, it is credited with ~~dividends and/or~~ dividend equivalents which are paid to the executive only to the extent the ~~Award~~award vests. The awards granted to named executive officers in January ~~2014~~2017 ~~was~~were based on a percentage of the ~~Executive's~~executive's salary ~~rate~~ in effect beginning ~~March 1, 2014,~~February 13, 2017, as follows:

(1) The percentages in this column are the same as those used for the named executive officers in ~~2013, except for Mr. Taylor, whose percentage increased 5% the previous following his promotion to senior executive vice president effective January 1, 2014.~~2016.

At the same time, the compensation committee established the ~~2014~~2017 performance goals for the ~~annual and cumulative periods~~performance period based on historical and expected performance. These goals were established using two performance metrics: return on assets (calculated as net income divided by year-to-date average assets) and tangible book value per share (calculated as total common equity less goodwill and other intangible assets divided by common shares outstanding). The compensation committee believes use of these metrics shifts the dependency of incentive compensation from the measure of net income used in cash incentives and encourages growth and increased value for the Company’s stockholders. Based on historical and ~~2014~~2017 budgeted metrics, the compensation committee ~~determined~~set the following ~~2014~~2017 goals:

The number of shares subject to each award is adjusted by the percentage multiplier that results from the actual achievement level of the performance goals. For achievement of levels between threshold and target and between target and maximum, the percentage multiplier is adjusted on the basis of straight line interpolation. Fractional shares are rounded up.

~~Operations for~~ ~~2014~~ ~~resulted in return on assets of~~ ~~0.97%~~ ~~and tangible book value per share of~~ ~~$15.63, which, using straight-line interpolation, resulted in executives receiving~~ ~~117.31%~~ ~~of their Annual Performance Award.~~ Change to Equity Compensation Program

~~Executives were vested in 25% of~~In April, 2017, the ~~adjusted Award, which~~compensation committee retained Blanchard Consulting, as an independent compensation consultant to review the Company’s executive compensation program, including the equity compensation component. Based on the consultant’s recommendation, the long-term equity component was ~~settled 50% in shares and 50% in cash. The remainder of~~redesigned for 2018. In connection with the ~~adjusted Annual Performance Award will vest 25%~~redesign, on December 15, 2017, the compensation committee approved the accelerated vesting of all of the outstanding restricted stock unit awards held by the executive officers, including the named executive officers. The outstanding awards were granted in January 2015,, 2016 and 2017 and generally would have vested at the end of the three year performance periods ending on December 31, 2017, 2018 and 2019, respectively, based on the level of attainment of the pre-established performance goals. In settlement of the outstanding awards, each holder received 90% of the number of shares that would have been issued if the performance had been attained at the maximum level for the award.

Following this acceleration, the number of shares issued pursuant to the vested RSUs, by year originally granted, were as follows:

Beginning in 2018, equity grants will be made in the form of restricted stock, with the shares vesting at a rate equal to 1/3 on each of December 15, ~~2016~~2018, 2019 and ~~December 15,~~ ~~2017. The actual level~~2020. Equity grants in future years will be made in the form of RSUs, and be subject to a one-year performance period with a performance goal based on targeted net income. If the target goal is attained, the executives will receive a restricted stock award for the ~~Cumulative Performance Award~~target number of shares, and the award will then be subject to further service-based vesting. If the target goal is not met, no shares will be ~~determined as~~earned and the award will be forfeited. The compensation committee has the discretion to increase the number of ~~December 31,~~ ~~2016~~.shares earned if the performance goal is attained at higher than target level.

The Company sponsors various retirement plans that cover eligible employees, including ~~certain~~the named executive officers. The Company believes that these benefits are a valuable incentive for attracting and retaining top executives.

401(k) Plan. The Company’s 401(k) plan is a tax-qualified retirement plan that covers all employees generally, including the named executive officers. An employee can elect to defer a percentage of his or her compensation on a pre-tax and/or post-tax basis, up to a maximum in ~~2014~~2017 of $~~17,500~~18,000, or $~~23,000~~24,000 if age 50 or over, and the Company contributes a matching contribution of up to 2%4% of the employee’s deferral contributions. The Company also provides a discretionary annual contribution ~~equal~~up to 4%2% of each eligible employee’s compensation, whether or not the employee makes elective deferral contributions. (Amounts paid to the plan reflect the Internal Revenue Code’s limit on the amount of compensation that can be taken into account in determining contributions, which was $~~260,000~~270,000 in ~~2014~~2017). The Company’s contributions under the Plan on behalf of each named executive officer are included in the “All Other Compensation” column of the Summary Compensation Table of this proxy statement.

Deferred Compensation Plan. The Deferred Compensation Plan is a non-qualified retirement plan that covers selected employees, including the named executive officers. The plan provides higher paid employees with the opportunity to defer compensation in addition to compensation that can be deferred under the 401(k) plan. For each calendar year, each executive can defer a portion of his or her salary and cash incentive opportunity. The deferred amounts are invested in Company ~~Common Stock~~common stock and are paid to the executive in shares of ~~Common Stock~~common stock after termination of employment. The Company does not contribute to this plan. The Deferred Compensation Plan is described in greater detail in the “Non-Qualified Deferred Compensation” section of this proxy statement.

Employment Agreements

The Company has employment agreements with certain of its executives, including each named executive officer. The agreements, which are generally for ~~three year~~three-year terms, provide for a minimum base salary which cannot be reduced, and a maximum cash incentive opportunity. The agreements also provide for severance benefits upon certain terminations of employment. If the named executive officer’s employment is terminated by the Company without cause, he or she is entitled to continued payment of base salary for 12 months and continued health coverage for the severance period. If following a change in control of the Company, either the named executive officer’s employment is terminated by the Company without cause, or the named executive officer terminates his or her employment for good reason, the named executive officer is entitled to continued payment of base salary for 1224 months ~~(24~~(12 months for ~~Messrs. Dively, Taylor, and Hedges)~~Mr. Beesley), a lump sum payment equal to the cash incentive paid for the prior year and continued health coverage for ~~12 months.~~the severance period. The agreements contain restrictive covenants that prohibit the named executive officers from disclosing confidential information and from competing with the Company. The employment agreements are described in greater detail in the “Potential Payments Upon Termination or Change in Control of the Company” section of this proxy statement.

On October 22, 2013, the Company and Mr. Dively entered into an Amended and Restated Employment Agreement (the "Dively Agreement"), effective January 1, 2014, following the retirement of Mr. Rowland on December 31, 2013, and continuing until December 31, 2016. Under the Dively Agreement, Mr. Dively agrees to serve as the President and Chief Executive Officer of the Company and President of the Bank. The other provisions of the Dively Agreement remain relatively the same as those of Mr. Dively's previous employment.

The compensation committee believes these severance benefits reflect market levels of benefits when they were negotiated and represent fair and appropriate consideration for the executive’s agreement to the post-termination restrictive covenants. The Company believes that the protections afforded by the agreements are a valuable incentive for attracting and retaining top executives. The Company also believes that in the event of an extraordinary corporate transaction, the agreements could prove important to the Company’s ability to retain top management through the transaction process and to provide motivation to the executives to act in the best interests of the Company and its stockholders before, during and after the transaction.

Perquisites and Other Benefits

The Company provides limited perquisites and other benefits to its executives. During ~~2014, the Company revised is automobile policy to eliminate the use of company cars~~2017, Messrs. Dively, Taylor, McRae and ~~instead, provide~~Beesley received a monthly allowance that covers the expense of utilizing a personal automobile for Company purposes. As a result of this change, Messrs. Dively, Hedges and McRae's company automobiles were released to them and the value of the automobile was included in their compensation amount for 2014.auto allowance. The determination as to whether an auto allowance is appropriate for an executive is based on the amount of business travel undertaken by the executive and the relative cost involved.

~~During 2014, Messrs. Dively, Taylor, Hedges and McRae received a monthly auto allowance.~~ The Company ~~also~~ paid for annual country club membership dues for Messrs. Dively, Taylor and ~~Hedges.~~Beesley. All of the named executives ~~also~~ received communication device allowances. These perquisites and other benefits are reported in the “All Other Compensation” column of the Summary Compensation Table of this proxy statement.

~~Deductibility of Executive Compensation~~

Section 162(m) of the Internal Revenue Code limits the deductibility of executive compensation paid to the CEO and to each of the three other most highly compensated officers (other than the chief financial officer) of a public company to $1 million per year, but contains an exception for “performance-based compensation.” Annual salary, by its nature, does not qualify as performance-based compensation under Section 162(m), and the Company’s annual cash incentive payments and grants of restricted stock and restricted stock units do not qualify as performance-based compensation. Stock options previously granted by the Company do qualify as performance based compensation. Due to the amounts and forms of compensation currently paid to the Company’s executive officers, the tax deductibility of such compensation under Section 162(m) is not an important factor at this time in making compensation decisions.

~~Subsequent Compensation Decisions~~

At the 2014 Annual Meeting of Stockholders, the “Advisory Vote on Executive Compensation” proposal (the “say on pay” vote) received support from approximately 96% of the votes cast. The Board of Directors considered these results and, based on the overwhelming support from stockholders, determined to not make any major changes to the executive compensation plans and programs already in place for 2014 or for 2015, except that the Company adopted an Incentive Compensation Recoupment Policy and the LTIP was streamlined for awards granted in 2015.

Incentive Compensation Recoupment Policy

In January 2015, the compensation committee adopted an Incentive Compensation Recoupment Policy. The Policy permits the Board to recoup from an executive cash or equity-based compensation granted on or after January 1, 2015 in the event that there is a restatement of the Company's financial statements or the executive engages in misconduct that results in a material loss or damage to the Company. Recoupment covers any incentive compensation (including annual cash bonuses and awards under LTIP) that is awarded or paid or vests within 36 months preceding the restatement or 36 months following the occurrence of misconduct. Misconduct includes an act of fraud, dishonesty or gross negligence, the material breach of a fiduciary duty, a knowing violation of a Company policy, or a violation of a confidentiality, non-solicitation or non-competition covenant.

~~Revisions to LTIP~~

Deductibility of Executive Compensation

~~In November 2014,~~Section 162(m) of the Internal Revenue Code as in effect for 2017 limited the deductibility of executive compensation ~~committee retained Blanchard Consulting Group~~paid to ~~review~~ the ~~LTIP. Based on that review, in January 2015,~~CEO and to each of the three other most highly compensated officers (other than the chief financial officer) of a public company to $1 million per year, but contained an exception for “performance-based compensation.” Annual salary, by its nature, does not qualify as performance-based compensation ~~committee restructured the LTIP to reduce its complexity while retaining the long-term component~~under Section 162(m), and the ~~overall equity value awarded to participants. The LTIP~~Company’s annual cash incentive payments and grants ~~will still be performance-based and subject to the same performance criteria. However, (i) the awards will be entirely in the form~~ of restricted stock and restricted stock units ~~(no restricted stock); (ii)~~did not qualify as performance-based compensation. Stock options previously granted by the ~~annual award component has been eliminated, so all~~Company do qualify as performance based compensation. Due to the amounts and forms of compensation currently paid to the Company’s executive officers, the tax deductibility of such compensation under Section 162(m) was not an important factor in making compensation decisions.

Other Compensation Decisions

At the 2017 Annual Meeting of Stockholders, the “Advisory Vote on Executive Compensation” proposal (the “say on pay” vote) received support from approximately 96% of the votes cast. The Board of Directors considered these results and, based on the overwhelming support from stockholders, determined to not make any major changes to the executive compensation plans and programs already in place for 2017, except for the acceleration of all unvested restricted stock units ~~(as adjusted~~in conjunction with the change in the long-term incentive plan structure for ~~performance) will vest at the end of a three-year performance period;~~years 2018 and ~~(iii) at the end of the performance period the units are settled entirely in shares of stock (no 50% cash payment).~~forward.

This table shows the compensation of the Company’s Chief Executive Officer, Chief Financial Officer and the three other most highly-compensated executive officers of the Company (the “named executive officers”) during the years ended December 31, ~~2014~~2017, ~~2013~~2016 and ~~2012~~2015.

Joseph R. Dively Chairman, President & Chief Executive Officer

Senior Executive Vice President & Chief Financial Officer

Senior Executive Vice President

Executive Vice President

Laurel G. Allenbaugh (4)

Executive Vice President

Joseph R. Dively Chairman, President & Chief Executive Officer

Matthew K. Smith (4)

Executive Vice President & Chief Financial Officer

Senior Executive Vice President

Executive Vice President

Bradley L. Beesley (4)

Executive Vice President

(1) Stock Awards. The amounts in this column represent the aggregate grant date fair value of ~~stock~~RSU awards ~~and stock unit awards granted in~~ ~~2014~~, ~~2013~~ ~~and 2012~~computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, based on the probable outcome of the performance conditions attached to the awards. The grant date fair value for ~~2014~~the 2017 awards granted assuming the maximum level of achievement is: Mr. Dively: ~~$123,750;~~$141,908; Mr. Smith: $31,705; Mr. Taylor: ~~$60,885; Mr. Hedges: $62,205;~~$69,785; Mr. McRae: ~~$36,080;~~$63,028; and ~~Ms. Allenbaugh: $28,985.~~Mr. Beesley: $27,243. See Note 13 to the consolidated financial statements in the Company’s ~~2014~~2017 Form 10-K for a description of the valuation.

(2) Non-Equity Incentive Plan Compensation. All amounts in this column are based on performance in ~~2014~~2017, ~~2013~~2016 and ~~2012~~2015 and reflect the amounts actually paid in February ~~2015~~2018, ~~2014~~2017 and ~~2013~~2016, respectively, under the Company’s Incentive Compensation Plan. The amount for Mr. Beesley also includes $107,353 paid per his employment agreement as 30% of net revenues generated on his individual book of business through First Mid Bank's broker/dealer. See “Cash Incentives” in the Compensation Discussion and Analysis section of the Proxy Statement for a discussion of ~~this~~the Incentive Compensation Plan.

(3) All Other Compensation. For ~~2013~~ and 2012, these amounts represent the Company’s contributions to its 401(k) Plan on behalf of each named executive officer and because no named executive officer had perquisites that exceeded $10,000 in the aggregate during 2013 or 2012, they are not reported in the All Other Compensation Table. For 2014,2017, these amounts include (i) the Company's contributions to its 401(k) Plan on behalf of each named executive (Mr. Dively: ~~$14,686;~~$15,923; Mr. Smith: $9,687; Mr. Taylor: ~~$15,600; Mr. Hedges: $14,283;~~$16,392; Mr. McRae: ~~$13,278;~~$15,746; and ~~Ms. Allenbaugh: $15,310)~~Mr. Beesley: $15,439); (ii) for Messrs. Dively, ~~Hedges~~Taylor and ~~McRae, the value of an automobile that was released the them following a change to the Company's automobile policy; (iii) for Messrs. Dively and Hedges,~~Beesley, country club dues; ~~(iv)~~(iii) for automobile allowances for Messrs. Dively, Taylor, ~~Hedges~~McRae and ~~McRae, automobile allowances;~~Beesley; and ~~(v)~~(iv) communication device allowances for each named executive officer.

(4) ~~Ms. Allenbaugh~~Mr. Smith joined the Company on November 21, 2016 and was not a named executive officer prior to 2017. Mr. Beesley was not a named executive officer for ~~2013 or 2012.~~2015.

Employment Agreements. The Company is a party to employment agreements with each of the named executive officers that provide for certain compensation and benefits during employment:

Mr. Dively: The employment agreement with Mr. Dively was ~~entered into~~renewed effective ~~May 9, 2011~~January 1, 2017 and has a term through December 31, ~~2014~~2019 that can be extended upon mutual agreement and provides for (i) an initial base salary that can be increased but not decreased, (ii) a bonus under the Company's Incentive Compensation Plan of up to 50% of base salary, (iii) participation in the Company's Deferred Compensation Plan and 2007 Stock Incentive Plan, (iv) ~~use of a Company owned or leased automobile~~an auto allowance and payment of annual country club membership dues, and (v) other benefits made available to Company executive or management employees. ~~This~~

Mr. Smith: The employment agreement with Mr. Smith was ~~amended~~effective July 25, 2017 and ~~restated on October 22, 2013, effective January 1, 2014 and continuing~~has a term through December 31, ~~2016,~~2020 that can be extended upon mutual agreement and provides for (i) an initial base salary that can be increased but not decreased, (ii) a bonus under ~~which Mr. Dively agrees~~the Company’s Incentive Compensation Plan of up to ~~serve as~~35% of base salary, (iii) participation in the ~~President~~Company’s Deferred Compensation Plan, (iv) an auto allowance and ~~Chief Executive Officer~~payment of ~~the~~annual country club membership dues, and (v) other benefits made available to Company ~~and the President of the Bank following the retirement of Mr. Rowland on December 31, 2013.~~executives or management employees.

Mr. Taylor: The employment agreement with Mr. Taylor was ~~renewed in 2012~~updated effective July 25, 2017 and has a term through ~~May 22, 2015~~December 31, 2020 that can be extended upon mutual agreement and provides for (i) an initial base salary that can be increased but not decreased, (ii) a bonus under the Company’s Incentive Compensation Plan of up to 35% of base salary, (iii) participation in the Company’s Deferred Compensation Plan, and (iv) other benefits made available to Company executives or management employees.

Mr. ~~Hedges~~McRae: The employment agreement with Mr. ~~Hedges~~McRae was ~~renewed~~updated in ~~2011~~2017 and has a term through December 31, ~~2014~~2019 that can be extended upon mutual agreement and provides for (i) an initial base salary that can be increased but not decreased, (ii) a bonus under the Company's Incentive Compensation Plan of up to 35% of base salary, (iii) participation in the Company's Deferred Compensation Plan, ~~(iv) use of a Company owned or leased automobile~~(vi) an auto allowance and payment of annual country club membership dues, and (v) other benefits made available to Company executive or management employees.

Mr. ~~McRae~~Beesley:: The employment agreement with Mr. ~~McRae~~Beesley was renewed ~~in 2012~~January 1, 2017 and has a term through February 28, 2015 that can be extended upon mutual agreement and provides for (i) an initial base salary that can be increased but not decreased, (ii) a bonus under the Company's Incentive Compensation Plan of up to 35% of base salary, (iii) participation in the Company's Deferred Compensation Plan, (iv) use of a Company owned or leased automobile and (v) other benefits made available to Company executive or management employees.

~~Ms. Allenbaugh:~~ ~~The employment agreement with Ms. Allenbaugh was renewed in 2012 and has a term through May 22, 2015~~December 31, 2019 that can be extended upon mutual agreement and provides for (i) an initial base salary that can be increased but not decreased, (ii) a bonus under the Company’s Incentive Compensation Plan of up to 35% of base salary, (iii) participation in the Company’s Deferred Compensation Plan, (iv) an auto allowance (and although not specified in the employment agreement, the Company also pays annual country club membership dues), and ~~(iv)~~(v) other benefits made available to Company executives or management employees. In addition, Mr. Beesley will receive 30% of the net revenues generated on his individual book of business through First Mid Bank's broker/dealer.

First Retirement and Savings Plan ~~(“401k~~(“401(k) Plan”). The Company has a tax-qualified defined contribution retirement plan that covers all employees generally and provides for a ~~base~~discretionary contribution by the Company, ~~of 4%~~which for 2017 was 2% of compensation, and a matching contribution by the Company of up to 100% of the first 3% and 50% of the ~~first 4%~~next 2% of employee contributions.

This table sets forth information for each named executive officer with respect to estimated payouts under incentive plans, ~~during the year ended~~ ~~December 31, 2014~~.award opportunities for 2017 and RSU awards granted in 2017.

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)

Estimated Future Payouts Under Equity Incentive Plan Awards (3)

Grant Date Fair Value of Stock Awards

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)

Estimated Future Payouts Under Equity Incentive Plan Awards (3)

Grant Date Fair Value of Stock Awards

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards. Payouts under the Company’s Incentive Compensation Plan were based on performance in ~~2014~~2017, which has now occurred. Thus, the information in the “Threshold,” “Target” and “Maximum” columns reflect the range of potential payouts when the performance goals were set in January ~~2014~~2017. The amounts actually paid under the Company’s Incentive Compensation Plan for ~~2014~~2017 appear in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. A description of the plan can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement.

Estimated Future Payouts Under Equity Incentive Plan Awards. The target amounts represent the number of ~~shares of restricted stock and/or restricted stock units~~RSUs granted inon January 24, ~~2014~~2017 under the 2007 Stock Incentive ~~Plan as Annual Performance Awards (50% of the number) and Cumulative Performance Awards (50% of the number).~~Plan. The threshold and maximum amounts represent the potential adjustment to the target number of ~~shares of restricted stock and/or restricted stock units~~RSUs that ~~can result~~could have resulted based on the level of attainment of performance goals for the ~~applicable performance period. The~~ ~~2014~~ ~~Annual Performance Award had a one-year performance period that ended~~ ~~December 31, 2014, which resulted in an adjustment to one-half of the target number so that the named executive officers received~~ ~~117.3%~~ ~~of the target number: Mr. Dively:~~ ~~2,640; Mr. Taylor:~~ ~~1,299; Mr. Hedges:~~ ~~1,327; Mr. McRae:~~ ~~770; and Ms. Allenbaugh:~~ ~~619. Of this adjusted Award, 25% vested as of~~ ~~December 31, 2014~~ ~~and the remainder vests 25% of each of December 15,~~ ~~2015~~, ~~2016~~ ~~and~~ ~~2017. The Cumulative Performance Award has a three year~~three-year performance period that ends on December 31, ~~2016~~2019. Effective December 15, 2017, the vesting of these RSU awards was accelerated and each named executive officer received 90% of the maximum number of shares represented by the award. A description of the ~~Plan~~2017 awards can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement.

This table sets forth the information for each named executive officer with respect to equity awards outstanding as of December 31, ~~2014~~2017.

Option Exercise Price

Number of Unearned Shares or Units that have not Vested

Market Value of Unearned Shares or Units that have not Vested

Number of Unearned Shares or Units that have not Vested

Market Value of Unearned Shares or Units that have not Vested

(1) ~~The restricted stock~~All outstanding RSUs vested and ~~restricted stock units that are subject to Cumulative Stock Awards will vest at the end of a three year performance period (5,671 shares or units~~were settled on December ~~31, 2016 for~~15, 2017 pursuant to the ~~2014 awards~~compensation committee's approval of acceleration. See "Equity Compensation" in the Compensation Discussion and 4,737 shares or units on December 31, 2015 for the 2013 awards). The restricted stock and restricted stock units that are subject to Annual Performance Awards were adjusted at the end of their one year performance period (December 31, 2014, 2013 and 2012 for the 2014, 2013 and 2012 awards, respectively) to reflect actual attainmentAnalysis section of the ~~performance goals, and 25%~~Proxy Statement for discussion of ~~the adjusted amount vested as of such date (and is not shown in~~ this table), with the remainder vesting 25% on each of the next three December 15 dates (3,500 shares or units on December 31, 2015; 2,344 on December 31, 2016; and 1,662 on December 31, 2017). If an executive terminates prior to the end of a performance period, he will forfeit his Award, unless such termination is due to termination on or after attaining age 66 (in which case he will vest in the target number) or termination due to death or disability (in which case he will vest in a pro rata portion of the target number). If an executive with an Annual Performance Award terminates after the performance period but prior to the end of the vesting period when he has attained age 66 or due to death or disability, he will vest in the remaining shares or units. If an executive retires but continues service as a member of the Board of Directors, the individual's board service is treated as continued employment and the individual will continue to vest in the Award while the board service continues.acceleration.

~~(2) The market rate is based on the closing price of the Company’s stock on December 31,~~ ~~2014~~ (~~$18.55~~).

~~2014~~2017 OPTION EXERCISES AND STOCK VESTED

This table sets forth information relating to the exercise of stock options and the vesting of restricted stock and ~~restricted stock units~~RSUs during ~~2014~~2017 by each named executive officer and the amount realized upon such exercise or vesting.


	Option Awards		Stock Awards		Option Awards		Stock Awards
Name	Number of Shares Acquired On Exercise (#)	Value Realized on Exercise ($)	Number of Shares Vested (#)	Value Realized when Shares Vested (1) ($)	Number of Shares Acquired On Exercise (#)	Value Realized on Exercise (1) ($)	Number of Shares Vested (#)	Value Realized when Shares Vested (2) ($)
Joseph R. Dively	0	—	3,594	68,097	0	—	19,626	738,994
Matthew K. Smith					0	—	839	32,260
Michael L. Taylor	0	—	1,434	27,554	3,000	22,080	9,609	361,971
John W. Hedges	0	—	1,939	37,308
Eric S. McRae	0	—	1,125	21,642	1,500	9,225	6,274	236,683
Laurel G. Allenbaugh	0	—	923	17,781
Bradley L. Beesley					0	—	3,660	138,893

Represents the number of shares covered by the option multiplied by the difference between the closing market price of the shares on the date of exercise and the exercise price.

This table shows information regarding each named executive officer’s account balance at December 31, ~~2014~~2017 under the Company’s Deferred Compensation Plan (“DCP”), including contributions and earnings credited to such account.

The amounts in this column have previously been reported as compensation on the Summary Compensation Tables for prior years, except for the following amounts of earnings or deferrals included in the account balances: Mr. Dively: $~~119,215~~772,859 (includes earnings ~~and losses~~ and deferrals of director fees which were not previously reported on the Summary Compensation Table); Mr. ~~Hedges:~~ ~~$20,559~~ ~~(includes earnings and losses which were not reported in the Summary Compensation Table);~~Smith: $1,065; Mr. McRae: $~~(1,701)~~62,947 ~~(includes earnings and losses that were not previously reported in the Summary Compensation Table).~~; Mr. Beesley: $72,073.

Non-Qualified Deferred Compensation. The DCP is a nonqualified defined contribution plan that covers certain eligible employees and directors, including the named executive officers. For each calendar year, the named executive officers can defer 5%, 10% or 15% of their base salary and/or 25% increments of their cash incentive compensation, and non-employee directors can elect to defer their director fees. The deferred amounts are deposited into a rabbi trust and credited to a DCP account established for the participant as soon as practicable after the date they would otherwise have been paid to the participant. Such amounts are invested in the Northern Institutional ~~Prime Obligation Fund #887~~U.S. Government Select Portfolio until the next quarterly window trading period established by the Company, at which point each participant’s account balance is invested in shares of ~~Common Stock~~common stock of the Company. Dividends paid on Common Stock are credited to the participant’s DCP account and invested in additional shares. The Northern Institutional ~~Prime Obligation Fund #887~~U.S. Government Select Portfolio had an annual return for ~~2014~~2017 of ~~0.02%~~0.73%. The Company’s ~~Common Stock~~common stock had an annual return for ~~2014~~2017 of ~~(13.2)%~~15.3%.

A participant is 100% vested in his or her DCP account at all times. A participant’s DCP account is paid to him or her in five annual installments beginning on the March 15 following the date the participant terminates employment, provided that the Board of Directors in its sole discretion can decide to pay the portion of the DCP account earned as of December 31, 2004 in a lump sum payment. An participant may also request at any time a distribution from the DCP account of an amount necessary to satisfy an unforeseeable emergency. In the case of the death of a participant, the DCP account will be paid to his or her designated beneficiary in a single payment. Upon a Change in Control of the Company (as defined in the Plan), each participant’s DCP account will be paid in an immediate lump sum. All distributions are in full shares of ~~Common Stock,~~common stock, and cash for fractional shares.

The Company provides certain benefits to eligible employees, including the named executive officers, upon certain terminations of employment or a change in control of the Company. These benefits are in addition to the benefits to which the executive would be entitled upon a termination of employment generally (i.e., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA).

Employment Agreements

The employment agreements with the named executive officers provide benefits to them upon certain types of termination of employment during the term of the agreement. The incremental benefits payable to the named executive officers in effect at December 31, ~~2014~~2017 include the following:

“Cause” means the executive’s (i) conviction (or guilty or no contest plea) for a felony or any crime involving fraud, dishonesty or breach of trust; (ii) performance that would materially and adversely affect the Company’s business; (iii) act or omission that results in a regulatory body to demand the executive to be suspended or removed; (iv) substantial nonperformance of his or her duties; (v) misappropriation or intentional material damage to the Company’s property or business; or (vi) violation of the agreement’s restrictions with respect to confidential information, noncompetition and nonsolicitation.

"Good reason" means a decrease in the executive's then current salary or a substantial diminuation in his or her position and responsibilities.

The agreements in effect for 2017 contain restrictive covenants that prohibit the executive from (i) disclosing confidential information; (ii) becoming involved with a business similar to that of the Company within any county in which the Company conducts business; and (iii) soliciting for sale or selling competing products or services to any person or entity who was a customer or client of the Company during the last ~~two years~~year of the executive’s ~~employment (or during the last year in the case of named executive officers other than Mr. Dively or Mr. Hedges).~~employment. The restrictive covenants regarding confidential information are ~~indefinite, and the~~indefinite. The restrictive covenants regarding noncompetition and nonsolicitation continue in effect until the later of two years following the executive’s termination of employment or the end of the term of the agreement (or the later of one year or the end of the term of employment for Mr. Taylor and for one year following termination of ~~employment for Mr. McRae).~~employment.

~~2007~~ Stock Incentive ~~Plan~~Plans

The stock option agreements that set forth the terms and conditions of stock options provide that upon a termination of employment for any reason other than death, disability or retirement, an executive’s outstanding and then vested stock options can be exercised for three months following termination, and upon a termination of employment due to death, disability or retirement (as defined in the Plan) an executive’s outstanding and then vested stock options can be exercised for 12 months following such termination. (All outstanding stock options are fully vested.)

The agreements that set forth the terms and conditions of the restricted stock ~~awards~~ and ~~restricted stock unit~~RSUs awards provide that an executive will not become vested in any restricted stock or ~~restricted stock units~~RSUs if the executive does not remain continuously employed from the grant date until the last day of the applicable performance period, except that upon a voluntary termination of employment due to termination after attaining age 66, an executive will vest in the target number of outstanding shares or ~~units~~RSUs and upon a termination of employment due to death or disability (as defined in the Plan), an executive will vest in a pro rata portion of the target number of outstanding ~~shares.~~shares or RSUs. If an executive with ~~an Annual Performance Award~~time-based restricted stock or RSUs terminates after the end of the one-year performance period but prior to the end of the vesting period when he has attained age 66 or due to death or disability, he will vest in the remaining shares or units subject to the ~~Award.~~award.

Upon a Change in Control of the Company (as defined in the Plan), the ~~Plan provides that all~~compensation committee has the discretion to determine how outstanding ~~stock option~~ awards ~~will become fully vested and exercisable and all restricted stock and stock units will fully vest~~are treated on a Change in Control. The current RSU award agreements provide for full vesting at the target or higher level as determined by the compensation committee. In connection with a redesign of the Company’s equity compensation program, the award agreements for all outstanding awards were amended to provide for accelerated vesting as of December 15, 2017, such that holders of the awards received 90% of the number of shares that would have been issued had the applicable performance goals been attained at the maximum level.

~~2014~~2017 Potential Severance Payments

The table set forth below quantifies the additional benefits as described above that would be paid to each named executive officer, assuming a Change in Control of the Company and/or termination of employment occurred on December 31, ~~2014~~2017.



Name:	Joseph R. Dively		Michael L. Taylor		John W. Hedges		Eric S. McRae		Laurel G. Allenbaugh		Joseph R. Dively		Matthew K. Smith		Michael L. Taylor		Eric S. McRae		Bradley L. Beesley
Change in Control:
Base Salary:	$	666,000	$	486,800	$	497,600	$	221,730	$	178,240	$	756,688	$	410,000	$	558,166	$	504,098	$	167,493
Incentive Compensation (1):	160,000		76,440		83,720		74,620		60,564		88,345		—		46,051		41,591		34,444
Continued Health Coverage (2):	4,392		4,392		4,116		4,116		4,116		11,270		8,284		12,274		8,172		4,692
Value of Vesting of Unvested Stock Options:	—		—		—		—		—		—		—		—		—		—
Value of Vesting of Unvested Stock Awards (3):	135,434		58,006		67,800		39,307		31,758		—		—		—		—		—

Continued Health Coverage (4):

Value of Vesting of Unvested Stock Awards (5):

Value of Vesting of Unvested Stock Awards (3):

Value of Vesting of Unvested Stock Awards (6):

Value of Vesting of Unvested Stock Awards (3):

Represents an amount equal to the cash incentive compensation earned by the executive for 2016 and paid in ~~2014~~.

There were no unvested RSUs at December 31, 2017. All outstanding RSUs vested and were settled on December 15, 2017 pursuant to the compensation committee's approval of acceleration. See "Equity Compensation" in the Compensation Discussion and Analysis section of the Proxy Statement for discussion of this acceleration. The value of the ~~stock~~vesting of those awards were: Mr. Dively: $593,822; Mr. Smith: $32,260; Mr. Taylor: $292,028; Mr. McRae: $194,403; and ~~stock unit awards that vest upon a change in control is calculated based on the target number~~Mr. Beesley: $121,617. This value was determined by multiplying (i) 90% of ~~outstanding shares and/or units subject to performance goals, plus~~ the number of ~~outstanding~~ shares ~~and/or units subject to time-based vesting, multiplied~~that would have vested if the performance goals were attained at maximum level by (ii) $38.45, the closing price of the ~~Company’s Common Stock~~shares on December ~~31, 2014~~ ~~($18.55).~~

The value of the stock and stock unit awards that vest upon retirement is calculated based on the target number of outstanding shares and/or units subject to performance goals, plus the number of outstanding shares and/or units subject to time-based vesting, multiplied by the closing price of the Company’s Common Stock on ~~December 31, 2014~~ ~~($18.55).~~

The value of the stock and stock unit awards that vest upon death or disability is calculated based on the pro-rata target number of outstanding shares and/or units subject to performance goals, plus the number of outstanding shares and/or units subject to time-based vesting, multiplied by the closing price of the Company’s Common Stock on ~~December 31, 2014~~ ~~(18.55).~~

Pay Ratio

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC has adopted a final rule requiring annual disclosure of the ratio of the median employee’s annual compensation to the annual compensation of the CEO. As required, we are including this disclosure beginning with this Proxy Statement.

The median employee was identified from all full-time and part-time employees, excluding the CEO, who were employed by the Company and its consolidated subsidiaries on December 31, 2017. All of our employees are located in the United States. A total of 602 employees were included. Compensation was measured over the 12 month period beginning on January 1, 2017 and ending on December 31, 2017.

The median employee compensation was determined using 2017 W-2 (Box 5) compensation. Wages were annualized for our employees who did not work the entire calendar year.

Mr. Dively had 2017 annual total compensation of $712,330 as reflected in the Summary Compensation Table included in this Proxy Statement. The median employee’s annual total compensation for 2017 that would be reportable in the Summary Compensation Table was $35,255. As a result, the CEO pay ratio is 20:1.

DIRECTOR COMPENSATION

Non-employee directors of the Company received a $5,000 quarterly retainer, paid at the start of each calendar quarter, for their services in ~~2014~~2017. The lead independent director received an additional quarterly retainer of ~~$625~~$1,250 for his services in ~~2014~~2017. The non-employee directors of the Company were not granted any form of stock-based compensation in ~~2014~~. Non-employee directors can also elect to receive health coverage under the Company’s group health plan, in which case the Company pays all of the required premiums. There were no such premiums paid in ~~2014~~2017. During ~~2014~~2017:

Audit committee members received a $625 quarterly retainer for their audit committee meeting services. The audit committee chairman also received an additional $625 quarterly retainer and the audit committee financial expert received an additional $500 quarterly retainer.

Compensation committee members received a $250 quarterly retainer for their compensation committee meeting services and the compensation committee chairman also received an additional $375 quarterly retainer.

Non-employee directors who ~~are~~were members of the ~~senior loan committee received a~~ ~~$1,500~~ ~~quarterly retainer for their senior loan committee meeting services and non-employee directors who are members of the~~Company's trust investment committee received a $250 quarterly retainer for their trust investment committee meeting services.

Non-employee directors who also served on the board of directors of ~~the~~First Mid Bank received a $~~1,500~~2,500 quarterly retainer fee for such services. Non-employee directors who also served on the board of directors of First Clover Leaf Bank, Data Services or Insurance Group each received a $500, $250 and ~~$125~~$250 quarterly retainer, respectively, for such services.

This table shows all compensation provided to each non-employee director of the Company for the year ended December 31, ~~2014~~2017.


	Fees Earned Or Paid in Cash ($)		All Other Compensation ($)(9)	Total ($)	Fees Earned Or Paid in Cash ($)		Total ($)
Holly A. Bailey	32,500	(1)	—	32,500	37,000	(1)	37,000
Robert S. Cook	12,917	(2)	—	12,917	35,500	(2)	35,500
Steven L. Grissom	40,000	(3)	—	40,000	39,000	(3)	39,000
Benjamin I. Lumpkin	18,833	(4)	—	18,833
Gary W. Melvin	37,000	(5)	—	37,000	35,500	(4)	35,500
William S. Rowland	34,500	(6)	—	34,500	33,000	(5)	33,000
Ray Anthony Sparks	42,000	(7)	—	42,000	43,500	(6)	43,500
James E. Zimmer	13,167	(8)		13,167	36,500	(7)	36,500
Mary J. Westerhold					36,000	(8)	36,000

(1) This amount represents the compensation earned for serving as a director of the Company, ~~the~~First Mid Bank, Data Services and Insurance Group of $20,000, $~~6,000~~10,000, $1,000 and $~~500~~1,000, respectively, and for serving as a member of the audit committee and the compensation committee of $2,500 and $1,000 respectively. Ms. Bailey also received $1,500 for serving as the compensation committee chairman. ~~Ms. Bailey elected to defer these fees under the Company's Deferred COmpensation Plan. For a description of this plan, see the 2014 Non-qualified Deferred Compensation section of this proxy statement.~~

(2) This amount represents the compensation earned for serving as a director of the Company, ~~the~~First Mid Bank, Data Services and Insurance Group of $~~8,333~~20,000, $~~2,500~~10,000, $~~417~~1,000 and $~~208~~1,000 respectively, and for serving as a member of the audit committee and the compensation committee of $~~1,042~~2,500 and $~~417~~1,000, respectively. ~~Mr. Cook was appointed to the Board of Directors effective August 2014.~~

(3) This amount represents the compensation earned for serving, ~~since August 2014,~~ as a director of the Company and ~~the~~First Mid Bank, First Clover Leaf Bank (until March 2017), Data Services and Insurance Group of $20,000, $~~6,000~~10,000, $500, $1,000, and $~~500~~1,000 respectively, for serving as a member of the audit committee ~~the compensation committee~~ and the ~~senior loan~~compensation committee of $2,500, and $1,000 ~~and~~ ~~$6,000~~, respectively, and for serving as the audit committee financial expert of $2,000, as well as $1,000 for serving as a member of the trust investment committee.

(4) This amount represents the compensation earned for serving ~~through July 2014,~~ as a director of the Company, ~~the~~First Mid Bank, Data Services and Insurance Group of $~~11,667~~20,000, $~~3,500~~10,000, $~~583~~1,000 and $~~292~~1,000 respectively, ~~and~~ for serving as a member of the audit committee and the compensation committee of $~~1,458~~2,500 and $~~583~~1,000, ~~respectively and for serving as the compensation committee chairman of~~ ~~$750. Mr. Lumpkin resigned from the Board of Directors in July 2014.~~respectively.

(5) This amount represents the compensation earned for serving as a director of the Company, ~~the~~First Mid Bank, Data Services and Insurance Group of ~~$20,000~~, ~~$6,000~~, ~~$1,000~~$20,000, $10,000, $1,000 and ~~$500~~$1,000, respectively, and for serving as a member of the ~~audit committee, the compensation committee and the senior loan~~trust investment committee of ~~$2,500~~, ~~$1,000~~ ~~and~~ ~~$6,000, respectively.~~$1,000.

(6) This amount represents the compensation earned for serving as a director of the Company, ~~the~~First Mid Bank, First Clover Leaf Bank (until March 2017), Data Services and Insurance Group of ~~$20,000, $6,000, $1,000~~$20,000, $10,000, $500, $1,000 and ~~$500~~$1,000, respectively, ~~and~~ for serving as a member of the ~~senior loan~~audit committee and the ~~trust investment~~compensation committee of ~~$6,000~~$2,500 and ~~$1,000, respectively.~~$1,000, respectively, and for serving as the audit committee chairman of $2,500, as well as $5,000 for serving as the lead independent director.

(7) This amount represents the compensation earned for serving as a director of the Company, ~~the~~First Mid Bank, Data Services and Insurance Group of $20,000, $~~6,000~~10,000, $1,000 and $~~500~~ ~~respectively, for serving as a member of the audit committee, the compensation committee and the senior loan committee of~~ ~~$2,500~~, $1,000 ~~and~~ ~~$6,000, respectively and for serving as the audit committee chairman of $2,500, as well as $2,500 for serving as the lead independent director.~~

~~(8) This amount represents the compensation earned for serving, since August 2014, as a director of the Company, the Bank, Data Services and Insurance Group of~~ ~~$8,333~~, ~~$2,500~~, ~~$417~~ ~~and~~ ~~$208~~ respectively, for serving as a member of the audit committee and the compensation committee of $~~1,042~~2,500 and $~~417~~1,000, respectively and for serving as a member of the trust investment committee of ~~$250. Mr. Zimmer was appointed to the Board of Directors effective August 2014.~~$1,000.

~~(9) There was no other~~(8) This amount represents the compensation ~~paid to non-employee directors during~~ ~~2014~~.earned, since September 2016, for serving as a director of the Company, First Mid Bank, First Clover Leaf Bank (until March 2017), Data Services and Insurance Group of $20,000, $10,000, $500, $1,000 and $1,000 respectively and for serving as a member of the audit committee and the compensation committee of $2,500 and $1,000, respectively.

PROPOSAL 2 -- APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION

TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK

On January 23, 2018, the Board of Directors of the Company voted to approve, subject to the approval of the Company’s stockholders, an amendment to the Company’s Certificate of Incorporation, as amended, that, if approved by the stockholders, would increase the number of authorized shares of our Common Stock from 18,000,000 to 30,000,000 (the “Charter Amendment”). No change is proposed to the number of authorized shares of preferred stock of the Company.

If the Charter Amendment is approved by the stockholders, the text of the first paragraph of Article IV of the Certificate of Incorporation would be amended and restated in its entirety to read as follows:

“A. The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 30,000,000 shares of Common Stock, par value $4.00 per share, and 1,000,000 shares of Preferred Stock, no par value per share.”

The additional authorized shares of Common Stock will have the same powers, preferences and rights as the shares of Common Stock now authorized, including the right to cast one vote per share and to receive dividends. There are no preemptive rights with respect to shares of Common Stock. Under Delaware law, stockholders will not have any dissenters’ or appraisal rights in connection with the Charter Amendment.

If the stockholders approve the Charter Amendment, it will become effective upon the filing of a Certificate of Amendment with the Delaware Secretary of State, which we intend to file shortly after receiving stockholder approval of the Charter Amendment.

Reasons Why Stockholders Should Approve the Charter Amendment

As of February 1, 2018, of the 18,000,000 authorized shares of Common Stock, 12,673,998 shares were outstanding and 128,828 shares were reserved for issuance under stock incentive plans. If Proposal 3 is approved, an additional 600,000 shares of Common Stock will be reserved for issuance pursuant to the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan. Additionally, the Company expects to issue approximately 1,662,840 shares of Common Stock upon completion of the Company’s pending acquisition of First BancTrust Corporation. As of February 1, 2018, no shares of preferred stock of the Company are outstanding.

The Board of Directors of the Company believes the Charter Amendment is advisable and in the best interests of the stockholders in order to maintain the Company’s flexibility with respect to financing and capital-raising opportunities, to facilitate future stock splits, to have sufficient shares available for future acquisitions, employee benefit plans and other corporate purposes, and to generally maintain the Company’s flexibility in today’s competitive, fast-changing environment. There are no present agreements, understandings or plans to issue any of the additional shares that would be authorized by this Amendment.

Adoption of the Charter Amendment would enable the Board of Directors of the Company from time to time to issue additional shares of Common Stock for such purposes and such consideration as the Board of Directors may approve without further approval of the Company’s stockholders, except as may be required by law, rule or regulation. Because our common stock is traded on the Nasdaq Stock Market, stockholder approval must be obtained, under applicable Nasdaq rules, prior to the issuance of shares for certain purposes, including the issuance of greater than 20% of the then outstanding shares of Common Stock or voting power in connection with a private financing or an acquisition or merger.

Although the issuance of additional shares of Common Stock could, depending on the circumstances, make more difficult, or discourage, an attempt to acquire control of the Company, the Charter Amendment is not being proposed with the intent of using the additional shares for anti-takeover purposes and we do not view the proposed increase as a special anti-takeover measure. We are not at this time aware of any currently pending or threatened efforts to acquire control of the Company, and we are not proposing this increase in response to any third-party effort to acquire control of the Company or any third-party effort to accumulate the Company’s Common Stock. As is true for presently authorized shares, issuance of shares of Common Stock authorized by the Charter Amendment may, among other things, have a dilutive effect on earnings per share and on the equity and voting power of existing holders of Common Stock.

The Board of Directors of the Company recommends a vote “FOR” the approval of the Charter Amendment (Proposal 2 on the proxy card). The affirmative vote of the holders of a majority of the shares of Common Stock outstanding is required to approve the Charter Amendment. Abstentions and broker non-votes will count as votes "AGAINST" Proposal 2.

PROPOSAL 3 - APPROVAL OF THE FIRST MID-ILLINOIS BANCSHARES, INC. EMPLOYEE STOCK PURCHASE PLAN

On January 23, 2018, the Board of Directors of the Company approved the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (the “Plan”), subject to the approval of the Company’s stockholders. The Plan is intended to promote the interests of the Company by providing eligible employees with the opportunity to purchase shares of common stock of the Company at a 5% discount through payroll deductions. The Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code.

Description of the Plan

The following is a summary of the key terms of the Plan. It is qualified in its entirety by reference to the full text of the Plan, which is attached as Exhibit A to this proxy statement.

Plan Administration. The Plan is administered by a committee consisting of the Board of Directors, or if the Board so delegates, a sub-committee of the Board. The Committee has full authority to interpret the Plan, adopt rules and regulations pertaining to the Plan and make all other determinations necessary to administer the Plan.

Number of Shares of Common Stock. The number of shares of our common stock available for purchase under the Plan is 600,000. Shares issuable under the Plan may be authorized but unissued shares, treasury shares or shares purchased on the open market.

The number of shares issuable under the Plan is subject to adjustment in the event of any reorganization, recapitalization, stock split, stock distribution, special or extraordinary dividend, merger, consolidation, split-up, spin-off, combination, subdivision or any similar corporate transaction. In each case, the Committee will make adjustments it deems necessary to preserve the intended benefits under the Plan.

Eligibility. All employees of the Company and its subsidiaries are eligible to participate in the Plan after 90 days of employment. As of February 1, 2018, approximately 584 employees were eligible to participate in the Plan.

Enrollment/Share Purchase and Delivery. To participate in the Plan, an eligible employee must complete an enrollment form. Participation is effective as of the first day of the next calendar quarter that begins after the enrollment form is submitted (provided that if the form is not delivered at least 10 days prior to the beginning of such calendar quarter, participation will be effective as of the next following calendar quarter). The participant’s enrollment form must authorize a payroll deduction from each payroll in a whole dollar amount (subject to a minimum of $5.00 per pay period). No interest will accrue on the participant’s payroll deductions.

On the last business day of each calendar quarter, the accumulated payroll deductions of each participant will be used to purchase whole and fractional shares of common stock. The purchase price of each share is 95% of the closing price of the common stock on the NASDAQ Stock Market, on either the first day of the quarterly purchase period or the last business day of the quarterly purchase period, whichever is less.

Shares purchased for each participant will be allocated to the participant’s Plan account. (Dividends paid on shares held under the Plan will not be reinvested in the Plan. They will be paid to each participant in cash unless the participant enrolls in the Company’s Dividend Reinvestment Plan.) A participant may at any time request a distribution of shares held in his or her Plan account. Share delivery will be via certificated shares or on a non-certificated basis evidenced by book entry in the records of the Company’s transfer agent.

Termination of Participation

A participant must give written notice to terminate Plan participation. If notice is given at least 10 business days prior to the quarterly stock purchase date, no further payroll deductions will occur. If notice is given less than 10 business days prior to the quarterly stock purchase date, payroll deductions will continue until the next following quarterly stock purchase date. Any payroll deduction amounts remaining in the participant’s account after the effective date of Plan withdrawal will be returned to the participant. If a participant’s employment terminates for any reason, Plan participation will end immediately, and any amounts remaining in the participant’s Plan account will be returned to the participant.

Plan Limitations. The Plan imposes certain limitations upon a participant’s right to acquire shares of common stock, including the following:

A participant cannot purchase more than $25,000 worth of shares (based on the fair market value of the shares at the beginning of each quarterly purchase period) for each calendar year.

A participant cannot purchase stock under the Plan if the participant owns stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or any of its affiliates.

Stockholder Rights. No participant will have any stockholder rights with respect to shares purchasable under the Plan until the shares are actually purchased on the participant’s behalf. No adjustment will be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase.

Transferability. The right to purchase shares under the Plan is not assignable or transferable and may be exercised only by the participant during his or her lifetime.

Amendment or Termination of Plan

The Committee or the Board can amend the Plan at any time, provided that stockholder approval is required for an amendment that changes the number of shares available under the Plan or changes the classification of employees who are eligible to participate in the Plan.

The Board may terminate the Plan at any time, in which case all payroll deductions will stop, and all accumulated payroll deductions held in Plan accounts will be returned to the participants. The Plan will terminate by its terms on January 23, 2028.

Plan Benefits

No payroll deductions will be made and no shares of common stock will be purchased under the Plan unless the Plan is approved by stockholders. Once approved, the first quarterly stock purchase period will begin as soon as practicable thereafter. It is not possible to determine the benefits that will be received by employees in the future under the Plan. On February 1, 2018, the last reported sales price for the common stock was $38.45.

Federal Tax Consequences

The following is a summary of the federal income tax consequences of the Plan. It is based on the federal tax laws and regulations currently in effect and existing administrative rulings of the Internal Revenue Service. Participants may also be subject to state and local taxes in connection with the purchase of common stock under the Plan. Participants should consult with their individual tax advisers to determine the tax consequences associated with purchases of common stock under the Plan.

The Plan is intended to be an employee stock purchase plan within the meaning of Section 423 of the Code. Under a plan which so qualifies, no taxable income will be recognized by a participant, and no deductions will be allowable to the Company, upon the purchase of shares for the participant’s Plan account. Taxable income will not be recognized by the participant until there is a sale or other disposition of the shares acquired under the Plan or in the event the participant should die while still owning the purchased shares.

If the participant sells or otherwise disposes of the purchased shares of common stock within two years after the first day of the quarterly purchase period in which such shares were acquired or within one year after the purchase date of such shares, the participant will recognize ordinary income in the year of the sale or disposition equal to the amount by which the fair market value of the shares on the purchase date exceeds the purchase price paid for those shares, and the Company will be entitled to an income tax deduction for the taxable year in which the sale or disposition occurs, equal in amount to such excess. The participant's basis in those shares will be increased by the amount of ordinary income recognized on the sale or disposition. The participant will recognize capital gain (or loss) on the disposition or sale of those shares to the extent the amount realized by the participant on the sale or disposition exceeds (or is less than) the participant's basis in those shares.

If the participant sells or disposes of the purchased shares of our common stock more than two years after the first day of the quarterly purchase period in which the shares were acquired and more than one year after the purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the lesser of (a) the amount by which the fair market value of the shares on the sale or disposition date exceeds the purchase price paid for those shares, or (b) the amount by which the fair market value of the shares on the first day of the quarterly purchase period in which the shares were acquired exceeds the purchase price paid for the shares. Any additional gain upon the disposition will be taxed as a long-term capital gain. The Company will not be entitled to an income tax deduction with respect to such disposition.

If the participant still owns the purchased shares at the time of death, the lesser of (a) the amount by which the fair market value of the shares on the date of death exceeds the purchase price, or (b) the difference between the fair market of the shares on the first day of the quarterly purchase period in which the shares were acquired and the purchase price paid for the shares will constitute ordinary income in the year of death.

The Board of Directors of the Company recommends a vote “FOR” the approval of the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (Proposal 3 on the proxy card). The affirmative vote of the holders of a majority of the shares of Common Stock present in person or by proxy at the annual meeting is required to approve the Plan. Abstentions will count as votes “AGAINST” Proposal 3. Broker non-votes will have no effect on the outcome of the vote.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information regarding the Company's equity compensation plans, as of December 31, 2017:



Plan category	Number of securities to be issued upon exercise of outstanding options (a)		Weighted-average exercise price of outstanding options (b)		Number of securities remaining available for future issuance under equity compensation plans (c)
Equity compensation plans approved by security holders:
(A) Deferred Compensation Plan	---		---		348,271	(1)
(B) Stock Incentive Plan	10,500	(2)	$23.00	(3)	142,078	(4)
Equity compensation plans not approved by security holders (5)	---		---		---
Total	10,500		$23.00		490,349

(1) Consists of shares issuable with respect to participant deferral contributions invested in common stock.

(2) Consists of stock options.

(3) Represents the weighted-average exercise price of outstanding stock options.

(4) Consists of stock options, restricted stock and/or restricted stock units.

(5) The Company does not maintain any equity compensation plans not approved by stockholders.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 17, 2013, the audit committee adopted a written Related Person Transactions Policy, which provides for procedures for review and oversight of transactions involving the Company and “related persons.” The policy covers any related person transaction that would be required to be disclosed in our proxy statement under applicable Securities and Exchange Commission rules (generally, transactions in which the Company is a participant, the amount involved exceeds $120,000 and in which a “related person” has a direct or indirect material interest). Certain transactions are not subject to specific review under the policy by virtue of being exempt from the set of related person transactions that must be disclosed pursuant to applicable Securities and Exchange Commission rules (“exempt transactions”). In addition, the audit committee has approved in the policy extensions of credit to a related person that are (1) made in the ordinary course of business, (2) are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with unrelated persons and (3) do not involve more than the normal risk of collectability or present other unfavorable feature.

The policy requires, prior to a party entering into any related person transaction (other than an exempt transaction), to provide, to the extent practicable, notice to the Company of the proposed related person transaction. The audit committee or its chair may approve only those related person transactions that are in, or are not inconsistent with, the best interests of the Company and its stockholders, as the audit committee or its chair, as applicable, determines in good faith. In the event the Company becomes aware of a related person transaction that has not been previously approved or previously ratified under the policy that is pending or ongoing, it will be submitted to the audit committee or its chair, as applicable, which shall evaluate all options, including but not limited to ratification, amendment or termination of the related person transaction, and (if appropriate) any disciplinary actions recommended. No member of the audit committee may participate in the consideration, approval or ratification of any related person transaction with respect to which such member or any of his or her immediate family members is the “related person” or in which he, she or they otherwise have an interest. All of the transactions described below were considered and approved or ratified by the audit committee or its chair.

Directors, executive officers, principal stockholders, members of their immediate families, and entities in which one or more of them have a material interest had extensions of credit from ~~the~~First Mid Bank during ~~2014~~2017. All such extensions of credit were on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with unrelated persons, and did not involve more than the normal risk of collectability or present other unfavorable features. In addition, directors, executive officers, principal stockholders, members of their immediate families and entities in which one or more of them have a material interest obtained in ~~2014~~2017, and may in the future be expected to obtain, depositary or other banking services, trust, custody or investment management services, individual retirement account services or insurance brokerage services from the Company and its subsidiaries, on terms no less favorable to the Company and its subsidiaries than those prevailing at the time for comparable transactions involving persons unrelated to the Company.

Consolidated Communications Holdings, Inc. and its affiliates provided paging, mobile, long distance/800 and private line services, voice mail, customer premise equipment services and repair services to the Company during ~~2014~~ in the amount of approximately $290,688. With regard to Consolidated Communications Holdings, Inc., the father of Mr. Benjamin Lumpkin, a director who resigned in July 2014 and whose beneficial ownership is deemed to be 6.5%, Richard A. Lumpkin, is a director and former Chairman of the Board of Directors of Consolidated Communications Holdings and also may be deemed to have beneficial ownership of approximately 3% and his immediately family, including Mr. Benjamin Lumpkin, has a beneficial ownership of approximately 2% of Consolidated Communications Holdings’ outstanding voting stock.

Under a stock repurchase program authorized by the Board of Directors, the Company can repurchase shares of its Common Stock from time to time either in the open market or in private transactions in accordance with applicable securities laws. Pursuant to this stock repurchase program, the Company may repurchase shares of the Company’s Common Stock from, among others, certain directors, executive officers and greater than 5% beneficial owners of the Company’s Common Stock, and certain members of immediate family of the foregoing persons. During ~~2014~~, the Company repurchased the following shares of Common Stock in which certain of such individuals had a beneficial interest: 9,514 shares in which William S. Rowland had a beneficial interest, for consideration of $211,693.

INCLUSION OF STOCKHOLDER PROPOSALS IN PROXY MATERIALS

In order to be eligible for inclusion in the Company's proxy materials for next year's Annual Meeting of Stockholders, any stockholder proposal to take action at such meeting must be received at the Company's main office at 1421 Charleston Avenue, P.O. Box 499, Mattoon, Illinois 61938, no later than November ~~17, 2015.~~20, 2018. Any such proposal shall be subject to the requirements of the proxy rules adopted under the Securities Exchange Act of 1934.

In addition, if the Company does not receive notice of a stockholder proposal for the Annual Meeting of Stockholders at least 45 days before the one-year anniversary of the date that the Company’s proxy statement was released to the stockholders for its previous year’s annual meeting, proxies solicited by the management of the Company will confer discretionary authority upon the management of the Company to vote upon any such proposal.

OTHER MATTERS

The Board of Directors of the Company does not intend to present any other matters for action at the annual meeting, and the Board of Directors has not been informed that other persons intend to present any other matters for action at the annual meeting. However, if any other matters should properly come before the annual meeting, the persons named in the accompanying proxy intend to vote thereon, pursuant to the proxy, in accordance with the recommendation of the Board of Directors of the Company.

BY ORDER OF THE BOARD OF DIRECTORS

Joseph R. Dively

Chairman, President and Chief Executive Officer

Mattoon, Illinois

March ~~20, 2015~~16, 2018

FIRST MID-ILLINOIS BANCSHARES, INC.

EMPLOYEE STOCK PURCHASE PLAN

FIRST MID-ILLINOIS BANCSHARES, INC.

EMPLOYEE STOCK PURCHASE PLAN

Purpose of the Plan.

First Mid-Illinois Bancshares, Inc. (the “Company”) hereby adopts the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan (the “Plan”) effective as of January 23, 2018, subject to the approval of the Plan by Company stockholders at the Company’s annual meeting of stockholders to be held April 25, 2018. The Plan is intended to encourage and facilitate the purchase of the Company’s common stock by eligible employees of the Company and its Subsidiaries. It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” within the meaning of Code Section 423.

The following terms shall be defined as set forth below:

(a)“Board” means the board of directors of the Company.

(b)“Code” means the Internal Revenue Code of 1986, as amended.

(c)“Committee” means the Committee appointed by the Board in accordance with Section 3 of the Plan.

(d)“Company” means First Mid-Illinois Bancshares, Inc., a Delaware corporation, and any successor thereto.

(e)“Employer” means the Company and any Subsidiary for which the Board or Committee approves participation in the Plan.

(f)“Fair Market Value” means the lesser of (i) the closing price of the Company’s common stock on the NASDAQ Stock Market on the Purchase Date or (ii) the closing price of the Company’s common stock on the NASDAQ Stock Market on the first day of the Purchase Period.

(g)“Participant” means any employee of an Employer who meets the eligibility requirements of Section 5 and enrolls in the Plan pursuant to Section 6.

(h)“Plan” means the First Mid-Illinois Bancshares, Inc. Employee Stock Purchase Plan herein set forth and any amendment thereto.

(i)“Purchase Date” means the last business day of each Purchase Period.

(j)“Purchase Period” means the period commencing on the first day of each calendar quarter and ending on the last business day of such calendar quarter. The first Purchase Period for the Plan shall begin as soon as practicable after the date the stockholders of the Company approve the Plan.

(k)“Purchase Price” means 95% of the Fair Market Value of a Share.

(l)“Share” means a share of common stock, par value $4.00 per share, of the Company.

(n)“Subsidiary” means any corporation in which the Company owns, directly or indirectly, 50% or more of the voting power.

The Plan shall be administered by a Committee consisting of the entire Board, of if the Board so delegates, by a sub-committee of the Board. Subject to the express provisions of the Plan, the Committee shall have complete authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it and to make all other determinations necessary or advisable for the administration of the Plan. The Committee’s determinations on the matters referred to in this Section shall be conclusive.

Shares Subject to Plan.

(a)The maximum number of Shares that shall be available for purchase under the Plan shall be 600,000, subject to adjustment as provided in Section 11. The Shares to be sold under the Plan may at the election of the Committee be either treasury Shares, authorized but unissued Shares or Shares purchased on the open market.

(b)No Participant may purchase Shares under the Plan as of any Purchase Date that would result in the aggregate Fair Market Value (determined as of each applicable Purchase Date) of all Shares purchased under the Plan by the Participant in any calendar year to exceed $25,000.

(c)In the event that, as of any Purchase Date, Participants would purchase more Shares than are currently available under Section 4(a), the maximum number of Shares that any Participant shall be permitted to purchase on such Purchase Date shall be reduced until the total number of Shares that all Participants purchase in the aggregate equals the number of Shares available under Section 4(a). The reduction shall be made proportionately based upon by each Participant’s accumulated payroll deductions.

Section 5.Eligibility.

(a)Employees of an Employer shall be eligible to participate in the Plan following the completion of 90 days of employment.

(b)Notwithstanding anything in the Plan to the contrary, no employee shall be entitled to participate in the Plan if such employee, immediately after a purchase of Shares, would own (within the meaning of Code Section 423(b)(3)) Shares possessing five percent or more of the total combined voting power of value of all classes of stock of the Company or its Subsidiaries actually issued and outstanding immediately after such purchase.

Section 6.Enrollment and Share Purchase.

(a)An eligible employee of an Employer may become a Participant in the Plan by completing an enrollment form in accordance with procedures established by the Committee. The Participant's enrollment shall be effective as of the first Purchase Period that begins after the enrollment form is submitted; provided that if the enrollment form is not delivered at least 10 business days prior to the beginning of such Purchase Period, enrollment shall be effective as of the next following Purchase Period. The Participant's enrollment form shall remain in effect until changed or revoked by the Participant in accordance with procedures established by the Committee.

(b)The Participant’s enrollment form shall authorize a payroll deduction from each payroll during the Purchase Period. A Participant shall elect to have deducted from payroll a stated whole dollar amount, provided that the minimum dollar amount deducted each payroll period must be at least $5.00. Subject to the reductions provided in Sections 4(b) and (c), the total amount of payroll deductions shall be credited to an account established for the Participant and used to purchase Shares. No interest will accrue or be paid on Participants’ payroll deductions.

(c)On each Purchase Date, the accumulated payroll deductions held in each Participant’s Plan account shall be used to purchase whole and fractional Shares for the Participant, the number of such Shares to be determined by dividing the Participant’s accumulated payroll deductions by the Purchase Price. Purchased Shares shall be credited to the Participant’s account.

Section 7.Issuance and Delivery of Shares.

A Participant may request a distribution of the Shares credited to the Participant’s Plan account at any time, with such distribution made to the Participant or to any other account as the Participant may direct. In such case, the Company shall either (a) issue stock certificates representing the total number of Shares, or (b) in lieu of issuing stock certificates, reflect the issuance of Shares to the Participant on a non-certificated basis, with the ownership of such Shares by the Participant evidenced solely by book entry in the records of the Company’s transfer agent.

Withdrawal; Termination of Employment.

(a)A Participant may terminate Plan participation at any time by giving written notice in accordance with procedures established by the Committee. If notice is given at least 10 business days prior to a Purchase Date, withdrawal will be effective for such current Purchase Period and no further payroll deductions shall be made for the purchase of Shares for such Purchase Period. If notice is given less than 10 business days prior to a Purchase Date, payroll deductions will continue with respect to such Purchase Period, amounts credited to the Participant’s account shall be used to purchase Shares, and the withdrawal shall be effective with respect to the next following Purchase Period. Any payroll deduction amounts remaining in the Participant’s Plan account after the effective time of withdrawal shall be returned to the Participant as soon as practicable. Payroll deductions shall not resume until the Participant delivers a new enrollment form in accordance with Section 6.

(b)Upon the Participant’s termination of employment with the Company and all Subsidiaries for any reason, payroll deductions shall cease and any amounts held in the Participant’s Plan account shall be returned to the Participant (or the Participant’s beneficiary in the case of death) as soon as practicable.

Section 9.Rights not Transferable.

The right to purchase Shares under the Plan shall not be transferable by any Participant or exercisable, during the Participant’s lifetime, by any person other than the Participant.

Changes Affecting the Shares.

(a)In the event of any reorganization, recapitalization, stock split, stock distribution, special or extraordinary dividend, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation or exchange of Shares, any change in the capital structure of the Company or any similar corporate transaction, the Committee shall make such adjustments as it deems appropriate, in its sole discretion, to preserve the benefits or intended benefits of the Plan and the Shares available and/or purchased under the Plan.

(b)Upon dissolution or liquidation of the Company, or a merger or consolidation in which the Company is not the surviving corporation, the Company or its designee shall pay each Participant the amount of the Participant’s accumulated payroll deductions that have not been used to purchase Shares.

Section 11.Rights of a Stockholder.



	~~Performance~~	~~Net Income~~	~~Asset Quality~~ ~~(1)~~	~~% of Opportunity~~
~~Minimum:~~	~~80% of previous year net income~~	~~$11.8 million~~		~~none~~
~~Threshold:~~	~~85% of previous year net income and nonperforming assets of 2% of current year loan balance~~	~~$12.5 million~~	~~$21.2 million~~	~~25%~~
~~Target:~~	~~Current year budgeted net income and and nonperforming assets of 1.85% of current year loan balance~~	~~$14.5 million~~	~~$19.6 million~~	~~60%~~
~~Superior:~~	~~105% of previous year net income and and nonperforming assets of 1.68% of current year loan balance~~	~~$15.5 million~~	~~$17.8 million~~	~~100%~~



Executive	Cash Incentive
Mr. Dively	$~~163,350~~189,172
Mr. Smith	$71,750
Mr. Taylor	$~~84,338~~
~~Mr. Hedges~~	~~$86,209~~97,679
Mr. McRae	$~~76,830~~88,217
~~Ms. Allenbaugh~~Mr. Beesley	$~~61,760~~58,623


			Target Number of Shares Subject to Award
			Annual Performance Award		Cumulative Performance Awards
Executive	Percentage of Salary (1)	Target Value	Stock Award	Stock Unit Award	Stock Award	Stock Unit Award	Percentage of Salary (1)	Target Value	Stock Unit Award
Mr. Dively	30%	$99,000	1,125				30%	$113,503	3,339
Mr. Smith							13%	$25,350	746
Mr. Taylor	20%	$48,680	554	553	554	553	20%	$55,817	1,642
Mr. Hedges	20%	$49,760	0	1,131	0	1,131
Mr. McRae	13%	$28,824	328				20%	$50,410	1,483
Ms. Allenbaugh	13%	$23,171	264	263	264	263
Mr. Beesley							13%	$21,774	641


Performance Level	Performance Level	Annual Performance Award	Cumulative Performance Award	Performance Level	Performance Goal
Return on Assets (50% goal weighting):	Return on Assets (50% goal weighting):			Return on Assets (50% goal weighting):
< Threshold	0%			0%
Threshold	70%	0.75%		70%	0.90%
Target	100%	0.92%		100%	0.96%
Maximum	125%	1.05%		125%	1.04%
Tangible Book Value per Share (50% goal weighting):	Tangible Book Value per Share (50% goal weighting):			Tangible Book Value per Share (50% goal weighting):
< Threshold	0%			0%
Threshold	70%	$12.75	$14.25	70%	$20.00
Target	100%	$13.68	$15.00	100%	$21.70
Maximum	125%	$14.25	$15.75	125%	$23.45



Executive	2015	2016	2017	Total
Mr. Dively	5,844	5,844	3,756	15,444
Mr. Smith	—	—	839	839
Mr. Taylor	2,874	2,874	1,847	7,595
Mr. McRae	1,694	1,694	1,668	5,056
Mr. Beesley	1,221	1,221	721	3,163


¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.


	% of Incentive		% of attainment		% of opportunity		% of Incentive		% of attainment		% of opportunity (1)		% of opportunity (2)
Net Income	70	%	98	%	69	%	70	%	100	%	70	%	70	%
Asset Quality	30	%	100	%	30	%	30	%	100	%	30	%
WM Profitability							30	%	100	%			30	%
					99	%					100	%	100	%



Name and Principal Position	Year	Salary	Stock Awards	Non-Equity Incentive Plan Compensation	All Other Compensation	Total
		($)	($)(1)	($)(2)	($)(3)	($)
Joseph R. Dively Chairman, President & Chief Executive Officer	2014	328,462	99,000	163,350	41,128	631,940
	2013	320,844	96,040	160,000	15,300	592,184
	2012	308,763	92,718	145,230	14,389	561,100
Michael L. Taylor Senior Executive Vice President & Chief Financial Officer	2014	245,154	48,708	84,338	19,808	398,008
	2013	218,144	32,764	76,440	15,300	342,648
	2012	209,231	31,518	69,090	14,692	324,531
John W. Hedges Senior Executive Vice President	2014	247,323	49,764	86,209	35,052	418,348
	2013	239,272	47,852	83,720	14,147	384,991
	2012	228,461	46,002	75,670	12,607	362,740
Eric S. McRae Executive Vice President	2014	219,713	28,864	76,830	28,055	353,462
	2013	212,619	27,734	74,620	13,225	328,198
	2012	203,461	26,673	67,445	12,125	309,704
Laurel G. Allenbaugh (4) Executive Vice President	2014	177,440	23,188	61,760	17,000	279,388


		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)			Estimated Future Payouts Under Equity Incentive Plan Awards (3)			Grant Date Fair Value of Stock Awards ($)		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)			Estimated Future Payouts Under Equity Incentive Plan Awards (3)			Grant Date Fair Value of Stock Awards ($)
Name	Grant Date	Threshold ($)(2)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)	Grant Date Fair Value of Stock Awards ($)	Grant Date	Threshold ($)(2)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)	Grant Date Fair Value of Stock Awards ($)
Joseph R. Dively		41,250	99,000	165,000						47,293	113,503	189,172
	01/28/14				3,150	4,500	5,625	99,000	01/24/17				2,337	3,339	4,174	113,526
Matthew K. Smith										17,063	40,950	71,750
									01/24/17				522	746	933	25,364
Michael L. Taylor		21,298	51,114	85,190						24,420	58,607	97,679
	01/28/14				1,550	2,214	2,768	48,708
John W. Hedges		21,770	52,248	87,080
	01/28/14				1,583	2,262	2,828	49,764	01/24/17				1,149	1,642	2,053	55,828
Eric S. McRae		19,401	46,563	77,606						22,054	52,930	88,217
	01/28/14				918	1,312	1,640	28,864	01/24/17				1,038	1,483	1,854	50,422
Laurel G. Allenbaugh		15,596	37,430	62,384
Bradley L. Beesley										14,656	35,174	58,623
	01/28/14				738	1,054	1,318	23,188	01/24/17				449	641	801	21,794


(4)	The grant date fair value is based on the probable outcome of the performance ~~conditions.~~conditions at the time of the grant.


(2)	Represents the number of shares vested on ~~December 31, 2014~~during 2017 multiplied by the closing market ~~value~~price of the underlying shares on the vesting date.


Name	Executive Contributions In Last FY	Registrant Contributions in Last FY	Aggregate Earnings in Last FY		Aggregate Withdrawals/ Distributions	Aggregate Balance at Last FYE	Executive Contributions In Last FY	Registrant Contributions in Last FY	Aggregate Earnings in Last FY	Aggregate Withdrawals/ Distributions	Aggregate Balance at Last FYE
	($)(1)	($)	($)(2)		($)	($)(3)	($)(1)	($)	($)(2)	($)	($)(3)
Joseph R. Dively	129,269	—	(57,822	)	—	415,219	78,344	—	177,163	—	1,317,406
Matthew K. Smith							9,942	—	1,065	—	11,008
Michael L. Taylor	—	—	—		—	—	—	—	—	—	—
John W. Hedges	20,930	—	(21,343	)	—	148,659
Eric S. McRae	11,020	—	(4,976	)	—	38,188	12,510	—	18,231	—	138,721
Laurel G. Allenbaugh	—	—	—		—	—
Brad L. Beesley							16,986	—	21,661	—	156,916


(1)	The contributions reported in this column are reported in the Summary Compensation Table, in either the Salary or Non-Equity Incentive Compensation Plan columns.


(2)	The earnings reported in this column are not reported on the Summary Compensation Table.


i.	Continued payment of the executive’s then current base salary for 12 months.


ii.	Continued coverage of the executive under the Company’s health plan for the 12 month severance period at active employee rates if the executive elects COBRA (the full COBRA rate applies for the remainder of the COBRA period and with respect to coverage for the executive’s spouse and dependents).


i.	For Messrs. Dively, Smith, Taylor and ~~Hedges,~~McRae, payment equal to two times the executive’s then current base annual salary. For Mr. ~~McRae and Ms. Allenbaugh,~~Beesley, continued salary for one year.


ii.	An immediate lump sum payment equal to the incentive compensation earned by or paid to the executive for the immediately preceding fiscal year.


iii.	Continued coverage of the executive under the Company’s health plan for the first 1224 months (12 months for Mr. Beesley) following termination at active employee rates if the executive elects COBRA (the full COBRA rate applies for the remainder of the COBRA period and with respect to coverage for the executive’s spouse and dependents).


No Change in Control:
One Time Base Salary:	$	333,000	$	243,400	$	248,800	$	221,730	$	178,240
Base Salary:											$	378,344	$	205,000	$	279,083	$	252,049	$	167,493
Continued Health Coverage (4):	4,392		4,392		4,116		4,116		4,116		11,270		8,284		12,274		8,172		4,692

Retirement:
Value of Vesting of Unvested Stock Awards (5):	$	—	—		$	67,800	$	—	—
Value of Vesting of Unvested Stock Awards (3):											—		—		—		—		—

Death or Disability:
Value of Vesting of Unvested Stock Awards (6):	82,813		35,857		41,459		24,035		19,428
Value of Vesting of Unvested Stock Awards (3):											—		—		—		—		—


(2)	Represents the Company’s portion of premiums paid for the executive’s coverage during the applicable severance period.


Section 16.	Term of the Plan. The Plan shall continue in effect until 10 years from the date the Board approved the Plan, or January 23, 2028.