ex10-1_121207a.htm


    Exhibit
      10.1

     

    


     

    


     

    


     

    


     

    


     

    FIRST
      MID-ILLINOIS BANCSHARES, INC.

     

    2007
      STOCK INCENTIVE PLAN

     

    


     

    


     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    STOCK
      OPTION AGREEMENT

    FIRST
      MID-ILLINOIS BANCSHARES, INC.

     

    2007
      STOCK INCENTIVE PLAN

    STOCK
      OPTION AGREEMENT

     

    1.  Stock
      Option Grant.  First Mid-Illinois Bancshares, Inc. (the “Company”)
      hereby grants a stock option to acquire _________ shares of common stock of
      the
      Company (“Shares”) to _____________ (the “Optionee”), subject in all respects to
      the terms and conditions of the First Mid-Illinois Bancshares, Inc. 2007 Stock
      Incentive Plan (the “Plan”), and such other terms and conditions as are set
      forth herein.  Capitalized terms used in this Agreement shall be as
      defined in the Plan.

     

    2.  Acceptance
      By Optionee.  The Option is conditioned on the Optionee’s
      execution of this Agreement and return of an executed copy to the Company within
      30 days after the Optionee receives this Agreement.

     

    3.  Incentive
      Stock Option.  The Option is intended to constitute an Incentive
      Stock Option under Section 422 of the Internal Revenue Code of
      1986.

     

    4.  Option
      Price.  The Option exercise price as determined by the Committee
      is $________ per Share.

     

    5.  Exercise
      of Option.

     

    (a)  Subject
      to the remaining provisions of this Section 5, the Option may be exercised
      at
      any time prior to the expiration date in accordance with the following
      schedule:

     

    
      	
               

              Date

            	
              Number
                of Shares

              Exercisable

            
	
              ______________

            	
              ____________

            
	
              ______________

            	
              ____________

            
	
              ______________

            	
              ____________

            
	
              ______________

            	
              ____________

            


    

    


    (b)  In
      the
      event of the retirement, death or Disability of the Optionee, the outstanding
      portion of the Option shall become immediately and fully exercisable and shall
      continue to be exercisable until the earlier of (i) 12 months from the
      date of
      such retirement (or, if the Optionee is also a director of the Company, 12
      months from the date of the Optionee’s subsequent termination of service on the
      Board), death or Disability, or (ii) the date the Option
      expires
      by its terms.  For purposes of this Section 5(b):  (A)
“retirement” means the Optionee’s termination of employment from the Company and
      its Subsidiaries without Cause (as defined below) when the Optionee meets the
      requirements for normal retirement under the Company’s tax-qualified retirement
      plan; and (B) “Disability” means as defined under the Company’s long-term
      disability plan for employees, or if there is none, a physical or mental
      disability which impairs the Optionee’s ability to substantially perform his or
      her current duties for a period of at least 12 consecutive months, as determined
      by the Committee in its sole discretion.

     

              (c)  Subsidiaries
      is terminated for Cause, the Option shall immediately expire and no portion
      shall be exercisable.  For purposes of this Section 5(c), “Cause”
means the Optionee’s (i)
      conviction in a court of law of (or entering a plea of guilty or no contest
      to)
      any crime or offense involving fraud, dishonesty or breach of trust involving
      a
      felony; (ii) performance
      of any act which, if known to the customers, clients, stockholders or regulators
      of the Company, would materially and adversely impact the business of the
      Company; (iii) act or
      omission that causes a regulatory body with jurisdiction over the Company to
      demand, request, or recommend that the Optionee be suspended or removed from
      any
      position in which the Optionee serves with the Company; (iv) substantial nonperformance
      of any of his or her obligations under this Agreement; or (v) misappropriation of
      or
      intentional material damage to the property or business of the Company or any
      Subsidiary.

     

    (d)  If
      during
      employment with the Company or any Subsidiary, or during any period following
      such employment in which the Option continues to be exercisable, the Optionee
      engages in competition or solicitation with respect to the Company or any
      Subsidiary without the consent of the Company, the Option shall immediately
      expire and no portion shall be exercisable.  For purposes of this
      Section 5(d):  (i)“competition” will exist if
      the Optionee (A) directly
      or indirectly owns, manages, operates, controls, participates in the ownership,
      management, operation or control of, is connected with or has any financial
      interest in, or serves as an officer, employee, advisor, consultant, agent
      or
      otherwise to any person, firm, partnership, corporation, trust or other entity
      which owns or operates a business similar to that of the Company or its
      Subsidiaries; or (B)
      solicits for sale, represents, and/or sells, to any person or entity who or
      which was the Company’s customer or client during the last year of the
      Optionee’s employment, products or services which are similar to, compete with,
      or can be used for the same purposes as products or services sold or offered
      for
      sale by the Company or any Subsidiary or which were in development by the
      Company or any Subsidiary within the last year of the Optionee’s employment; and
(ii)“solicitation” will
      exist if the Optionee (A)
      attempts in any manner to solicit from any client or customer business of the
      type performed by the Company or any Subsidiary or persuade any client or
      customer of the Company or any Subsidiary to cease to do such business or to
      reduce the amount of such business which any such client or customer has
      customarily done or contemplates doing with the Company or any Subsidiary,
      whether or not the relationship between the Company or Subsidiary and such
      client or customer was originally established in whole or in part through the
      Optionee’s efforts; (B)
      renders any services of the type rendered by the Company or any Subsidiary
      for
      any client or customer of the Company; or (C) solicits or encourages,
      or
      assists any other person to solicit or encourage, any employees, agents or
      representatives of the Company or a Subsidiary to terminate or alter their
      relationship with the Company or any Subsidiary.

     

    (e)  In
      the
      event the Optionee’s employment with the Company and its Subsidiaries terminates
      for any reason other than as described above, the then outstanding and vested
      portion of the Option shall continue to be exercisable until the earlier of
      three months after the date of such termination or the date the Option expires
      by its terms.  Notwithstanding the foregoing, if the Optionee is also
      a director of the Company, the Option shall continue to vest in accordance
      with
      its terms until the Optionee’s subsequent termination of service on the Board,
      at which time the then outstanding and vested portion of the Option shall
      continue to be exercisable until the earlier of three months after the date
      of
      such termination of service or the date the Option expires by its
      terms.  The portion of the Option that is not vested as of the date of
      such termination of employment, or if later, such termination of service, shall
      expire and not be exercisable.

     

    
      (f)  In
        the
        event of a Change in Control of the Company, the Option shall become immediately
        and fully exercisable.

    

     

    
      Full
        vesting of an Incentive Stock Option, or the exercise of an Incentive Stock
        Option later than 90 days after termination of employment (or one year in
        the
        event of termination of employment due to death or Disability), may result
        in
        all or part of the Option being treated as a Nonqualified Stock Option in
        accordance with Section 5 of the Plan.

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


         6.  Payment.

     

    (a)  Written
      notice of an election to exercise any portion of the Option shall be given
      by
      the Optionee, or his or her personal representative in the event of the
      Optionee’s death, to the Company’s Director of Human Resources, in accordance
      with procedures established by the Plan Committee as in effect at the time
      of
      such exercise.

     

    (b)  At
      the
      time of exercise of the Option, payment of the exercise price must be made
      by
      one or more of the following methods:  (i) in cash, (ii)
      in cash received from a
      broker-dealer to whom the Optionee has submitted an exercise notice and
      irrevocable instructions to deliver the purchase price to the Company from
      the
      proceeds of the sale of Shares subject to the Option (subject to the Company’s
      right of first refusal as described in Section 14 of the Plan), (iii) by delivery (either
      directly or through attestation) to the Company of other Shares owned by the
      Optionee that are acceptable to the Company, valued at their then Fair Market
      Value, or (iv) by
      directing the Company to withhold such number of Shares otherwise issuable
      upon
      exercise of the Option with a Fair Market Value equal to the exercise
      price.  If applicable, an amount sufficient to satisfy all minimum
      Federal, state and local withholding tax requirements prior to delivery of
      any
      Shares must also accompany the exercise.  Payment of such taxes can be
      made by a method specified above.

     

    (c)  No
      Shares
      shall be issued upon exercise of the Option until full payment of the exercise
      price and tax withholding obligation has been made.

     

    7.  Option
      Nontransferable.  Except as otherwise provided under the Plan, the
      Option may not be transferred in any manner and may be exercised during the
      lifetime of the Optionee only by him or her.  The terms of the Option
      shall be binding upon the Optionee’s executors, administrators, heirs, assigns
      and successors.

     

    8.  Option
      Term.  The Option may not be exercised more than ten (10) years
      after the date indicated below and may be exercised during such term only in
      accordance with the terms and conditions set forth in the Plan.

     

    9.  Right
      of First Refusal.  Shares acquired upon exercise of the Option are
      subject to the Company’s right of first refusal as described in Section 14 of
      the Plan.

     

    10.  Committee
      Determinations.  The Committee shall make all determinations
      concerning the rights to benefits under the Plan.

     


     

     

     

     

     

     

     

    
      	
              Dated:

            	
              First
                Mid-Illinois Bancshares, Inc.

               

               

              By:                                                                

              William
                S. Rowland

              Chairman
&
                CEO

            


    

    


    ATTEST:

    


    The
      Optionee acknowledges that he or she has received a copy of the Plan and
      Prospectus and is familiar with the terms and conditions set forth
      therein.  The Optionee agrees to accept as binding, conclusive, and
      final all decisions and interpretations of the Committee.  As a
      condition to the exercise of the Option, the Optionee authorizes the Company
      to
      withhold from any regular cash compensation payable by the Company any taxes
      required to be withheld under any federal, state or local law as a result of
      exercising the Option.

     

    


     

    
      	
              Dated:

            	
              By: