-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PgjEiyn0rXoRP0PunrsV+YhSJ1K1JLQcnZMVM2rEzZCPkJFQ6DnLmCpWgF4VHeo8 K2rcH0VYEREqJzQQJdScjA== 0000950131-97-006174.txt : 19971015 0000950131-97-006174.hdr.sgml : 19971015 ACCESSION NUMBER: 0000950131-97-006174 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19971014 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST MIDWEST BANCORP INC CENTRAL INDEX KEY: 0000702325 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 363161078 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-37809 FILM NUMBER: 97695095 BUSINESS ADDRESS: STREET 1: 300 PARK BLVD SUITE 405 STREET 2: P O BOX 459 CITY: ITASCA STATE: IL ZIP: 60143-0459 BUSINESS PHONE: 7088757450 MAIL ADDRESS: STREET 1: 300 PARK BLVD SUITE 405 STREET 2: P O BOOX 459 CITY: ITASCA STATE: IL ZIP: 60143-0459 S-3 1 FORM S-3 Registration No. 333- As filed with the Securities and Exchange Commission on October _____, 1997 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 FIRST MIDWEST BANCORP, INC. (Exact name of registrant as specified in its charter) Delaware 36-3161078 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 300 Park Boulevard, Suite 405, Itasca, Illinois 60143-0459, (630) 875-7450 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Donald J. Swistowicz Executive Vice President First Midwest Bancorp, Inc. 300 Park Boulevard, Suite 405, Itasca, Illinois 60143-0459 (630) 875-7450 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Timothy M. Sullivan Gary L. Mowder Hinshaw & Culbertson Schiff Hardin & Waite 222 North LaSalle Street, Suite 300 7200 Sears Tower Chicago, Illinois 60601-1081 Chicago, Illinois 60606 (312) 704-3000 (312) 258-5514 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of the Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box: [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] ================================================================================
CALCULATION OF REGISTRATION FEE ===================================================================================================== Proposed Proposed Amount Maximum Maximum Amount of Title of Each Class of to be Offering Price Aggregate Registration Securities to be Registered Registered Per Share* Offering Price* Fee - ----------------------------------------------------------------------------------------------------- Common Stock; $.01 Par Value ** 1,520,611 $38.00 $57,783,218 $17,510.07 =====================================================================================================
* Estimated solely for the purpose of calculating the registration fee and computed pursuant to Rule 457(c) of the Securities Act of 1933, based on the average of the high and low prices of the Common Stock on the Nasdaq Stock Market's National Market as quoted in the Wall Street Journal on October 7, 1997. ** The registrant is also registering Preferred Share Purchase Rights which are evidenced by the certificates for the Common Stock being registered in a ratio of one Preferred Share Purchase Right for each share of Common Stock. The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Subject to Completion, dated October ______, 1997 PROSPECTUS , 1997 FIRST MIDWEST BANCORP, INC. 1,520,611 Shares Common Stock ($.01 par value) This Prospectus pertains to an offering from time to time of up to 1,520,611 shares of common stock, par value $.01 ("Common Stock"), of First Midwest Bancorp, Inc. (the "Company"), held by stockholders (the "Selling Stockholders") who received the shares in exchange for their shares of common stock of SparBank, Incorporated ("SparBank"), in connection with the Company's acquisition of SparBank on October 1, 1997. See "SELLING STOCKHOLDERS" (located on pages 7-8 of this Prospectus). The Company will not receive any proceeds from the sale of the shares of Common Stock covered by this Prospectus. The Company has agreed to pay certain expenses in connection with this offering (excluding underwriting discounts, selling commissions, brokers' fees or similar discounts, commissions or fees to be paid by the Selling Stockholders). The Common Stock is quoted on the Nasdaq Stock Market's National Market (the "Nasdaq National Market") under the symbol "FMBI". On October 7, 1997, the last sale price of the Common Stock as reported on the Nasdaq National Market was $37.75 per share. The Common Stock may be offered for sale from time to time by the Selling Stockholders to or through underwriters or directly to other purchasers or through agents or brokers in one or more transactions on the Nasdaq National Market, in one or more private transactions, or in a combination of such methods of sale, at prices and on terms then prevailing, at prices related to such prices, or at negotiated prices. The price at which any of the shares of Common Stock may be sold, and the commissions, if any, paid in connection with any such sale, are unknown and may vary from transaction to transaction. As of the date hereof, the distribution and sale of the shares of Common Stock offered hereby are also subject to the provisions of an Investment Agreement, dated as of June 18, 1997, between the Company and the Selling Stockholders. The Investment Agreement requires, among other things, that any transfer of the shares "to the public" be made in an "ordinary trading transaction." An "ordinary trading transaction" is defined in the Investment Agreement as a sale of the shares on the Nasdaq National Market using the services of a broker-dealer registered in the state where the transfer is to occur, without the use of special selling efforts or methods. See "PLAN OF DISTRIBUTION" (located on pages 9-10 of this Prospectus). See "INVESTMENT CONSIDERATIONS" (located on pages 4-7 of the Prospectus) for a discussion of certain risks that should be considered by prospective investors. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION. TABLE OF CONTENTS
The Company............................................................... 3 Recent Developments....................................................... 3 Investment Considerations................................................. 4 Use of Proceeds........................................................... 7 Selling Stockholders...................................................... 7 Plan of Distribution...................................................... 9 Legal Matters.............................................................10 Experts...................................................................10 Available Information.....................................................10 Incorporation of Certain Documents by Reference...........................11
No dealer, salesperson or other person has been authorized to give any information or to make any representations not contained or incorporated by reference in this Prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell or solicitation of an offer to buy to any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that the information contained herein is current as of any time subsequent to the date hereof. 2 THE COMPANY The Company is a Delaware corporation that was incorporated in 1982 for the purpose of becoming a multi-bank holding company. The subsidiaries ("Affiliates") of the Company include a commercial bank that is a national banking association and three nonbank Affiliates that offer trust and investment management, mortgage banking and credit life insurance related services in the same markets served by the bank Affiliate. See also "RECENT DEVELOPMENTS" below. The Company, headquartered in the Chicago suburb of Itasca, Illinois, is Illinois' third largest publicly traded bank holding company with assets of approximately $3.2 billion at September 30, 1997. The Company's national bank affiliate, First Midwest Bank, National Association (the "Bank"), is engaged in the general commercial banking business which embraces all the usual functions of commercial and retail banking, including: accepting deposits; commercial and industrial, consumer and real estate lending; collections; safe deposit box operations; and other banking services tailored for individual, commercial and industrial and governmental customers. The Bank operates 50 banking offices in northern Illinois with approximately 80% of its banking assets located in the suburban metropolitan Chicago area. Another approximate 13% of the Bank's assets are located in the "Quad-Cities" area of Western Illinois which includes the Illinois cities of Moline and Rock Island and the Iowa cities of Davenport and Bettendorf. The remaining assets of the Bank are located in the southeastern region of the state in Vermilion and Champaign counties. In each of the primary markets in which the Bank operates, it ranks among the top five banking institutions in market share of deposits. First Midwest Trust Company, N.A. (the "Trust Company"), provides trust and investment management services to its clients, acting as executor, administrator, trustee, agent, and in various other fiduciary capacities. As of September 30, 1997, the Trust Company had approximately $1.4 billion in trust assets under management, comprised of accounts ranging from small personal investment portfolios to large corporate employee benefit plans. First Midwest Insurance Company operates as a reinsurer of credit life, accident and health insurance sold through the Bank, primarily in conjunction with its consumer lending operations. First Midwest Mortgage Corporation (the "Mortgage Corporation") performs centralized residential real estate mortgage loan origination, sales and servicing operations previously conducted by the Bank. The Company's principal executive office is located at 300 Park Boulevard, Suite 405, Itasca, Illinois, 60143-3459, and its telephone number is (630) 875-7450. RECENT DEVELOPMENTS The Company consummated the acquisition of SparBank, the holding company of McHenry State Bank ("MSB"), which is headquartered in McHenry, Illinois, on October 1, 1997. MSB operates four banking offices in McHenry County, Illinois, and had total assets of approximately 3 $437 million as of September 30, 1997. The Company presently plans to merge MSB into the Bank during the first quarter of 1998. The acquisition was accounted for as a pooling of interests. The Selling Stockholders received 21.7234 shares of Common Stock for each share of SparBank common stock they owned in a tax-free exchange. The Company issued 3,230,764 shares of Common Stock to the Selling Stockholders in exchange for all of the issued and outstanding common stock of SparBank. Acquisition Charge. The Company consummated its acquisition of SparBank on October 1, 1997. Incident to such acquisition, the Company expects to record in the fourth quarter of 1997 an acquisition charge (currently estimated to be approximately $6.5 million) representing primarily investment banker fees, severance and related benefit costs, legal fees and professional services, contract termination fees and certain other nonrecurring merger-related costs including a one-time provision incident to conforming SparBank's loan loss reserves and credit policies to First Midwest's. INVESTMENT CONSIDERATIONS Prospective purchasers should consider carefully the following factors associated with the ownership of the Common Stock together with the other information contained in this Prospectus. Competition. Illinois, and more specifically the metropolitan Chicago area, is a highly competitive market for banking and related financial services. Since the Chicago area is the Company's focus market, the Bank, MSB and the Mortgage Corporation are exposed to varying types and levels of competition from associated industries. In general, however, the Bank, MSB and the Mortgage Corporation compete with other banking institutions, savings and loan associations, personal loan and finance companies, and credit unions within their market areas. The Trust Company competes with retail and discount stock brokers, investment advisors, mutual funds, insurance companies, and to a lesser extent, financial institutions. Factors influencing the type of competition experienced by the Trust Company generally involve the variety of products and services that can be offered to clients. Satisfying the needs of the client, in terms of providing quality services and tailored products at competitive prices, primarily dictates the competitive advantage within the industries. Loan Portfolio Risks. Inherent in the Company's banking operations are risks associated with the loan portfolio, including credit, interest rate, prepayment and liquidity risk. The Company manages such risks through adherence to policies and procedures designed to control and/or limit risk, such as underwriting and asset/liability policies and procedures as well as a detailed loan rating system used in conjunction with independent credit reviews performed by its loan review staff. Further, loan loss reserve policies provide Management with recommended levels of loan reserves, mitigating the financial statement impact of unforeseen future losses on loans. Management does not believe that the overall loan portfolio risk inherent in the Company's loan portfolio is in excess of risks experienced by others in the same or similar industries. 4 Impact of Interest Rate Changes. Interest rate risk is an inherent part of the banking business as financial intermediaries gamer deposits and borrow other funds to finance earning assets. Risk results when either contractual relationships or prevailing market conditions cause rates paid on deposits and other borrowings to reprice on a basis which does not coincide with the repricing events affecting yields on earning assets. If more assets than liabilities reprice in a given time period, the balance sheet is considered asset-sensitive. In a rising interest rate environment, this position would generally result in favorable growth in net interest income, and in a declining interest rate environment, net interest income would be adversely affected. Conversely, if more liabilities than assets reprice, the balance sheet is considered liability-sensitive. In a rising rate environment, this position would generally result in an adverse effect on net interest income, and in a declining interest rate environment the effect would be favorable. Economic Conditions and Monetary Policies. Conditions beyond Management's control may have a significant impact on changes in net interest income from one period to another. Examples of such conditions could include: (a) the strength of credit demands by customers; (b) fiscal and debt management policies of the federal government, including changes in tax laws; (c) the Federal Reserve Board's monetary policy, including the percentage of deposits that must be held in the form of non-performing cash reserves; (d) the introduction and growth of new investment instruments and transaction accounts by non-bank financial competitors; and (e) changes in rules and regulations governing payment of interest on deposit accounts. Government Regulation. The Company and its Affiliates are subject to regulation and supervision by various governmental regulatory authorities including, but not limited to, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (the "FDIC"), the Illinois Commissioner of Banks and Real Estate, the Arizona Department of Insurance, the Internal Revenue Service and state taxing authorities. Financial institutions and their holding companies are extensively regulated under federal and state law. Federal and state laws and regulations generally applicable to financial institutions, such as the Company and the Affiliates, regulate, among other things, the scope of business, investments, reserves against deposits, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, mergers, consolidations and dividends. This supervision and regulation is intended primarily for the protection of the FDIC's bank and savings association insurance funds and depositors of a financial institution. Consequently, laws and regulations may impose limitations on the Company that may not be in the best interests of the Company and its stockholders. The effect of such statutes, regulations and policies can be significant, and cannot be predicted with a high degree of certainty. FDIC Insurance Premiums. The deposits of the Company are insured up to $100,000 per insured member (as defined by law and regulation) by the FDIC with such insurance backed by the full faith and credit of the United States government. The Company's deposits are predominantly insured by the Bank Insurance Fund ("BIF") while certain deposits of the Company are insured by the Savings Association Insurance Fund ("SAIF"), both of which are administered by the FDIC. 5 As insurer, the FDIC assesses deposit insurance premiums and is authorized to conduct examinations of, and require reporting by, FDIC-insured institutions. Deposit insurance premiums are assessed through a risk-based system under which all insured depository institutions are placed into one of nine categories and assessed insurance premiums based upon their level of capital and supervisory evaluation. Institutions assigned higher risk classifications pay deposit insurance premiums at a higher rate than the institutions assigned lower risk classifications. The 1997 annual deposit insurance premium established by the FDIC for the Company's BIF assessable deposits is set at 0 %, reflecting the lowest premium assessment as the Company is classified as well-capitalized. Further, as a result of the special assessment on SAIF deposits required by the Deposit Insurance Funds Act of 1996, the SAIF was recapitalized on October 1, 1996. Accordingly, no premium assessments have been imposed on the Company's SAIF deposits for 1997. It is unknown whether such assessments will change in future periods. For 1997, the Company will pay premium assessments on both its BIF and SAIF deposits in order to service the interest on the Financing Corporation ("FICO") bond obligations which were used to finance the cost of "thrift bailouts" in the 1980's. The FICO assessment rates on BIF assessable deposits were set at $.01296 and $.0126 per $100 of insured deposits for the 1997 first and second semi- annual periods, respectively, and $.0648 and $.0630 per $100 of insured for SAIF assessable deposits, respectively, for such periods. These rates may be adjusted quarterly to reflect changes in the assessment basis for the BIF and SAIF. By law, the FICO rate on BIF assessable deposits must be 1/5 of the rate on SAIF assessable deposits until the insurance funds are merged or until January 1, 2000, whichever occurs first. Anti-Takeover Provisions. The Company has taken a number of actions which could have the effect of discouraging a takeover attempt that might be beneficial to stockholders who wish to receive a premium for their shares from a potential bidder. The Company has adopted a stockholder rights plan which would cause substantial dilution to a person who attempts to acquire the Company on terms not approved by the Company's Board of Directors. The stockholder rights plan may therefore have the effect of delaying or preventing any change in control and deterring any prospective acquisition of the Company. The Company's Restated Certificate of Incorporation and its Amended and Restated By-laws also contain provisions which may have the effect of delaying or preventing a change in control. The provisions include: (i) the classification of the Board of Directors; (ii) the restriction that directors can only be removed for cause and only by a majority of the directors or by the vote of persons holding 67 % of the voting securities of the Company; (iii) the authority of the Board of Directors to issue series of preferred stock with such voting rights and other provisions as the Board of Directors may determine; (iv) a super-majority voting requirement to approve certain business combinations; and (v) a super-majority voting requirement to amend provisions of the Restated Certificate of Incorporation or the Amended and Restated By-laws relating to the classification of the Board, removal of directors and the super-majority voting requirement for certain business combinations. In addition, Section 203 of the Delaware General Corporation Law may have the effect of discouraging takeover attempts directed at the Company. Furthermore, employment agreements with certain senior executives of the Company provide for 6 severance pay in the event of a "Change of Control" of the Company as such term is defined in such agreements. Acquisition Charge. See "RECENT DEVELOPMENTS -- Acquisition Charge" (located on page 4 of this Prospectus) for a description of the acquisition charge to be recorded in the fourth quarter of 1997 incident to the acquisition of SparBank. USE OF PROCEEDS All of the shares of Common Stock covered hereby are being offered by the Selling Stockholders. The Company will not receive any proceeds from the sales of Common Stock by the Selling Stockholders. SELLING STOCKHOLDERS On June 18, 1997, the Company, FMB Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of the Company ("FMB"), and SparBank and certain of the Selling Stockholders entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which SparBank was merged with and into FMB on October 1, 1997 (the "Merger"). Upon the consummation of the Merger, each outstanding share of common stock of SparBank was converted into 21.7234 shares of Common Stock of the Company. A total of 3,230,764 shares of Common Stock were issued to the Selling Stockholders in exchange for all of the issued and outstanding shares of SparBank common stock. The Selling Stockholders and the Company are parties to the Investment Agreement pursuant to which the Company agreed to prepare and file with the Securities and Exchange Commission (the "Commission") a Registration Statement under the Securities Act of 1933, as amended (the "Securities Act"), registering the offer and sale by the Selling Stockholders of an agreed-upon number of the shares of Common Stock issued in the Merger. The Company has agreed to prepare and file with the Commission such amendments and supplements to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective until the earlier of October 1, 1998, or the date on which all of the shares of Common Stock offered hereby have been sold. Under the terms of the Investment Agreement, the Company has agreed to pay certain fees and expenses incurred in connection with the registration; provided, however, that the Company will not pay any underwriting discounts, selling commissions, brokers' fees or similar discounts, commissions or fees attributable to the sale or distribution of the shares of Common Stock, which expenses will be paid by the Selling Stockholders. Under the Investment Agreement, the Selling Stockholders agreed that they would not directly or indirectly offer, sell, pledge or transfer or otherwise dispose of (or solicit any offers to buy, purchase, or otherwise acquire or pledge) any of the shares offered hereby, except in compliance with the Investment Agreement and the Securities Act and the rules and regulations promulgated thereunder. 7 The Selling Stockholders may not transfer their rights under the Investment Agreement without the Company's consent. Such consent is not required, however, in the case of a transfer by bequest, devise, inheritancy, laws of intestacy, or gift. The table below sets forth certain information with respect to the Selling Stockholders and their beneficial ownership of Common Stock as of October 1, 1997, and includes information with respect to positions, offices or other material relationships of the Selling Stockholders with the Company, or any of its predecessors or affiliates, during the past three years. Each of the Selling Stockholders will determine, in such Selling Stockholder's sole discretion, the number of shares of Common Stock, if any, to be sold by such Selling Stockholder during the effectiveness of the Registration Statement, but in no event will such number exceed the number of shares of Common Stock specified below. The Company may amend or supplement this Prospectus from time to time to disclose the names, relationships to the Company, and holdings of Common Stock of additional Selling Stockholders.
Number of Shares Percentage of Shares of of Common Stock Common Stock Common Stock Number of Shares Owned Assuming Owned Assuming Owned Prior to of Common Stock the Sale of All of the Sale of All of Name /1/ the Offering Offered the Shares Offered the Shares Offered - -------- -------------- --------------- ------------------ ------------------ Geraldine C. Cowlin/2/..... 2,310,153 600,000 1,710,153 8.53% William J. Cowlin, Sr./3/.. 8,689 8,689 0 0.00 William J. Cowlin, Jr./4/.. 114,286 114,286 0 0.00 Sarah Cowlin Towne/4/...... 114,286 114,286 0 0.00 Bridget Cowlin............. 114,286 114,286 0 0.00 Martha Cowlin.............. 114,286 114,286 0 0.00 David Cowlin............... 114,330 114,330 0 0.00 John Zieman................ 170,224 170,224 0 0.00 Jane Zieman Salmon......... 170,224 170,224 0 0.00 --------- --------- Total................. 3,230,764 1,520,611 ========= --------- - -----------------------
1 William J. Cowlin, Sr., is the spouse of Geraldine C. Cowlin. William J. Cowlin, Jr., Sarah Cowlin Towne, Bridget Cowlin, Martha Cowlin and David Cowlin are the children of William J. Cowlin, Sr., and Geraldine Cowlin. John Zieman and Jane Zieman Salmon are the nephew and niece of William J. Cowlin, Sr., and Geraldine C. Cowlin. 2 Geraldine C. Cowlin served as President and a Director of SparBank and as a Director of MSB prior to the Merger. 3 William J. Cowlin, Sr., served as Secretary and a Director of SparBank and as a Director of MSB prior to the Merger. As provided in the Merger Agreement, William J. Cowlin, Sr., was appointed to serve as a Director of the Company effective as of October 1, 1997, for a three-year term. Under the terms of the Merger Agreement, William J. Cowlin, Sr. (or such other nominee of Geraldine C. Cowlin) shall be nominated by the Board of Directors of the Company to serve as director of the Company for a second three-year term following the expiration of his first term. 4 William J. Cowlin, Jr., and Sarah Cowlin Towne served as directors of MSB prior to the Merger. 8 PLAN OF DISTRIBUTION Subject to applicable provisions of the Investment Agreement, the Common Stock covered by this Prospectus may be offered for sale from time to time by the Selling Stockholders to or through underwriters or directly to other purchasers or through agents in one or more transactions on the Nasdaq National Market, in one or more private transactions, or in a combination of such methods of sale, at prices and on terms then prevailing, at prices related to such prices, or at negotiated prices. Such methods of sale may include, without limitation, (a) a block trade in which the broker-dealer so engaged will attempt to sell the Common Stock as agent but may position and resell a portion of the block as principal to facilitate the transaction, (b) purchases by a broker- dealer as a principal and resale by such broker-dealer for its own account pursuant to this Prospectus, and (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers. This Prospectus may be amended and supplemented from time to time to describe a specific plan of distribution, to the extent that such amendment or supplement is required by applicable law. In connection with sales of the Common Stock or otherwise, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of Common Stock in the course of hedging the positions they assume with the Selling Stockholders. To the extent permitted by applicable law, the Selling Stockholders may also sell Common Stock short and redeliver the shares to close out such short positions. The Selling Stockholders may also enter into options or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealer or financial institution of the Common Stock offered hereby, which Common Stock such broker-dealer or other financial institution may resell pursuant to this Prospectus (as supplemented or amended to reflect such transaction). The Selling Stockholders may also pledge the shares registered hereunder to a broker-dealer or other financial institution and, upon a default, such broker-dealer or other financial institution may, subject to the Investment Agreement, effect sales of the pledged Common Stock pursuant to this Prospectus. Brokers, dealers or agents may receive compensation in the form of commissions, discounts or concessions from the Selling Stockholders in amounts to be negotiated in connection with sales pursuant hereto. Any such remuneration will be disclosed in a prospectus or prospectus supplement filed under the Securities Act, to the extent such disclosure is required under applicable law. The Selling Stockholders and such brokers and dealers and any other participating brokers or dealers may be deemed to be "underwriters" within the meaning of the Securities Act, in connection with such sales, and any such commission, discount or concession may be deemed to be underwriting discounts or commissions under the Securities Act. In order to comply with the securities laws of certain states, if applicable, the Common Stock will be sold hereunder in such jurisdictions only through registered or licensed brokers or dealers. Notwithstanding the foregoing, as of the date of this Prospectus, the distribution and sale of the shares of Common Stock offered hereby are subject to the provisions of the Investment Agreement. The Investment Agreement requires, among other things, that any transfer of such shares of Common Stock 9 "to the public" be made in an "ordinary trading transaction." An "ordinary trading transaction" is defined in the Investment Agreement as a sale of the shares on the Nasdaq National Market using the services of a broker-dealer registered in the state where the transfer is to occur, without the use of special selling efforts or methods. Under the Investment Agreement, the Company has agreed to indemnify the Selling Stockholders and certain related persons against certain liabilities in connection with the offering of the Common Stock pursuant to this Prospectus, including liabilities arising under the Securities Act. The Selling Stockholders have also agreed to indemnify the Company and certain related persons against certain liabilities in connection with the offering of the Common Stock pursuant to this Prospectus, including liabilities arising under the Securities Act. LEGAL MATTERS The validity of the shares of Common Stock offered hereby will be passed upon for the Company by Hinshaw & Culbertson, Chicago, Illinois. EXPERTS The consolidated financial statements of the Company appearing in First Midwest Bancorp Inc's. Annual Report (Form 10-K) for the year ended December 31, 1996, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. The consolidated financial statements of the Company as of December 31, 1995 and for each of the years in the two-year period ended December 31, 1995 have been incorporated by reference herein in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, which report is incorporated by reference herein upon the authority of said firm as experts in accounting and auditing. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Commission (File Number 0-10967). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Regional Offices of the Commission at the following locations: Seven World Trade Center, Suite 1300, New York, New York, 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the Commission maintains a Website (http://www.sec.gov) that contains certain reports, proxy statements and other information regarding the Company that the 10 Company files electronically with the Commission. In addition, such reports, proxy statements, and other information concerning the Company can be inspected at the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. This Prospectus constitutes a part of a Registration Statement filed by the Company with the Commission under the Securities Act. This Prospectus does not contain all of the information set forth in the Registration Statement, certain items of which are contained in exhibits to the Registration Statement as permitted by the rules and regulations of the Commission. Reference is hereby made to the Registration Statement and to the exhibits thereto for further information with respect to the Company. Any statements contained herein concerning the provisions of any contract, agreement or other document are not necessarily complete and, in each instance, reference is made to the copy of such contract, agreement or other document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents which have heretofore been filed by the Company with the Commission are incorporated by reference in this Prospectus: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996; 2. The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, and June 30, 1997; 3. The Company's Current Reports on Form 8-K dated February 11, 1997, June 30, 1997, and October 2, 1997; and 4. The description of the Common Stock, $.01 par value, and Preferred Stock purchase rights associated with the Common Stock of the Company, no par value, as contained in the Company's Registration Statement on Form 8-A, dated February 17, 1989, as amended by subsequently filed reports on Form 8-A. All documents filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made by this Prospectus shall be deemed to be incorporated herein by reference and to be a part hereof. Any statements contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein (or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein) modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed to constitute a part of this Prospectus, except as so modified or superseded. 11 This Prospectus incorporates documents by reference which are not presented herein or delivered herewith. Such documents (other than exhibits to such documents unless such exhibits are specifically incorporated by reference) are available to any person, including any beneficial owner, to whom this Prospectus is delivered, on written or oral request, without charge, directed to First Midwest Bancorp, Inc., at its principal executive offices, 300 Park Boulevard, Suite 405, Itasca, Illinois 60143-0459; Attention: Corporate Communications Director (630) 875-7450. 12 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following is an estimate, subject to future contingencies, of the expenses to be incurred by the Company in connection with the issuance and distribution of the Common Stock:
Registration fee -- Securities and Exchange Commission....... $17,510.07 Printing of Registration Statement and Prospectus............ 2,500.00 Listing fees................................................. 8,237.00 Blue Sky fees and expenses................................... -0- Attorneys' fees and expenses................................. 5,000.00 Accountants' fees and expenses............................... 10,000.00 Miscellaneous distribution expenses.......................... 5,000.00 ---------- Total...................................................... $48,247.07
Item 15. Indemnification of Directors and Officers Under Delaware law, a corporation may indemnify any person who was or is a party or is threatened to be made a party to an action (other than an action by or in the right of the corporation) by reason of his service as a director or officer of the corporation, or his service, at the corporation's request, as a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees) that are actually and reasonably incurred by him ("Expenses"), and judgments, fines and amounts paid in settlement that are actually and reasonably incurred by him, in connection with the defense or settlement of such action, provided that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful. Although Delaware law permits a corporation to indemnify any person referred to above against Expenses in connection with the defense or settlement of an action by or in the right of the corporation, provided that he acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation's best interests, if such person has been judged liable to the corporation, indemnification is only permitted to the extent that the Court of Chancery (or the court in which the action was brought) determines that, despite the adjudication of liability, such person is entitled to indemnity for such Expenses as the court deems proper. The determination as to whether a person seeking indemnification has met the required standard of conduct is to be made (1) by a majority vote of a quorum of disinterested members of the board of directors, or (2) by independent legal counsel in a written opinion, if such a quorum does not exist or if the disinterested directors so direct, or (3) by the stockholders. The General Corporation Law of the State of Delaware also provides for mandatory indemnification of any director, officer, employee or agent against Expenses to the extent such person has been successful in any proceeding covered by the statute. In addition, the General Corporation Law of the State of Delaware provides the general authorization of advancement of a director's or officer's litigation expenses in lieu of requiring the authorization of such advancement by the board of directors in specific cases, and that indemnification and advancement of expenses provided by the II-1 statute shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement or otherwise. The Company's Amended and Restated By-laws and Restated Certificate of Incorporation provide for indemnification of the Company's directors, officers, employees and other agents to the fullest extent not prohibited by Delaware law. The Company has entered into agreements to indemnify its directors and executive officers, in addition to the indemnification provided for in the Company's Amended and Restated By-Laws and Restated Certificate of Incorporation. These agreements, among other things, will indemnify the Company's directors and executive officers for all direct and indirect expenses and costs (including, without limitation, all reasonable attorneys' fees and related disbursements, other out of pocket costs and reasonable compensation for time spent by such persons for which they are not otherwise compensated by the Company or any third party) and liabilities of any type whatsoever (including, but not limited to, judgments, fines and settlement fees) actually and reasonably incurred by such person in connection with either the investigation, defense, settlement or appeal of any threatened, pending or completed action suit or other proceeding, including any action by or in the right of the Company, arising out of such person's services as a director, officer, employee or other agent of the Company, any subsidiary of the Company or any other company or enterprise to which the person provides services at the request of the Company. The Company believes that these provisions and agreements are necessary to attract and retain talented and experienced directors and officers. The Company's Restated Certificate of Incorporation is consistent with Section 102(b)(7) of the Delaware General Corporation Law, which generally permits a corporation to include a provision limiting the personal liability of a director in the corporation's certificate of incorporation. With limitations, this provision eliminates the personal liability of the Company's directors to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director. However, this provision does not eliminate director liability: (1) for breaches of the duty of loyalty to the Company and its stockholders; (2) for acts of omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) for transactions from which a director derives improper personal benefit; or (4) under Section 174 of the Delaware General Corporation Law ("Section 174"). Section 174 makes directors personally liable for unlawful dividends and stock repurchases or redemptions and expressly sets forth a negligence standard with respect to such liability. While this provision protects the directors from awards for monetary damages for breaches of their duty of care, it does not eliminate their duty of care. The limitations in this provision have no effect on claims arising under the securities laws. The Company maintains liability insurance for the benefit of its directors and officers. Item 16. Exhibits. See Exhibit Index on Page II-7. II-2 Item 17. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a) (3) of the Securities Act of 1933. (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do not apply if the registration statement is on Form S-3, Form S-8, or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new II-3 registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions set forth or described in Item 15 of this Registration Statement, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by itself is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the Village of Itasca, State of Illinois, this 1st day of October, 1997. FIRST MIDWEST BANCORP, INC. By: ROBERT P. O'MEARA ------------------------------------- Robert P. O'Meara President and Chief Executive Officer POWER OF ATTORNEY The undersigned officers and directors of First Midwest Bancorp, Inc., do hereby constitute and appoint Robert P. O'Meara and Donald J. Swistowicz, and either one of them, as their attorneys-in-fact with power and authority to do any and all acts and things and to execute any and all instruments which said attorneys-in-fact, and either one of them, determine may be necessary or advisable or required to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules or regulations or requirements of the Securities and Exchange Commission in connection with this Registration Statement. Without limiting the generality of the foregoing power and authority, the powers granted include the power and authority to sign the names of the undersigned officers and directors in the capacities indicated below to the Registration Statement, to any and all amendments, both pre-effective and post- effective, and supplements to this Registration Statement, and to any and all instruments or documents filed as part of or in conjunction with this Registration Statement or amendments or supplements thereto, and each of the undersigned hereby ratifies and confirms all that said attorneys-in-fact or any of them shall do or cause to be done by virtue hereof. This Power of Attorney may be signed in several counterparts. Pursuant to the requirements of the Securities Act of 1933, the Registration Statement has been signed by the following persons in the capacities indicated as of October 1, 1997.
Signature Capacity --------- -------- CLARENCE D. OBERWORTMANN Chairman of the Board of Directors - ------------------------------ Clarence D. Oberwortmann ANDREW B. BARBER Vice Chairman of the Board of Directors - ------------------------------ Andrew B. Barber ROBERT P. O'MEARA President, Principal Executive Officer - ------------------------------ and Director Robert P. O'Meara
II-5
Signature Capacity --------- -------- JOHN M. O'MEARA Executive Vice President, Principal - ------------------------------- Operating Officer and Director John M. O'Meara DONALD J. SWISTOWICZ Executive Vice President, Principal - ------------------------------- Financial and Accounting Officer Donald J. Swistowicz BRUCE S. CHELBERG Director - ------------------------------- Bruce S. Chelberg O. RALPH EDWARDS Director - ------------------------------- O. Ralph Edwards JOSEPH W. ENGLAND Director - ------------------------------- Joseph W. England THOMAS M. GARVIN Director - ------------------------------- Thomas M. Garvin VERNON A. BRUNNER Director - ------------------------------- Vernon A. Brunner SISTER NORMA JANSSEN, O.S.F. Director - ------------------------------- Sister Norma Janssen, O.S.F. J. STEPHEN VANDERWOUDE Director - ------------------------------ J. Stephen Vanderwoude WILLIAM J. COWLIN Director - ------------------------------ William J. Cowlin
II-6 EXHIBIT INDEX
Sequential Exhibits Description Page No. - -------- ----------- ---------- 3 Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 3 to Quarterly Report on Form 10-Q dated March 31, 1996. 3.1 Amended and Restated By-laws of the Company are incorporated herein by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K dated December 31, 1994. 4 Rights Agreement dated February 15, 1989 is incorporated herein by reference to the Company's Form 8-A filed with the Securities and Exchange Commission on February 17, 1989. 4.1 Amended and Restated Rights Agreement, Form of Rights Certificate and Designation of Series A Preferred Stock of the Company, dated November 15, 1995, is incorporated herein by reference to Exhibits (1) through (3) of the Company's Registration Statement on Form 8-A filed with the Securities and Exchange Commission on November 21, 1995, and the First Amendment to Rights Agreement, dated June 18, 1997, is incorporated herein by reference to Exhibit (4) of the Company's Amendment No. 2 to the Registration Statement on Form 8-A filed with the Securities and Exchange Commission on June 30, 1997. 5 Opinion of Hinshaw & Culbertson regarding legality. 20 10.1 Investment Agreement dated June 18, 1997 between the 21 Company and all of the stockholders of SparBank, Incorporated. 23.1 Consent of Ernst & Young LLP. 40 23.2 Consent of KPMG Peat Marwick LLP. 41 23.3 Consent of Hinshaw & Culbertson (included in Exhibit 5). 20 24 Power of Attorney (contained on the signature page hereto). 17
II-7 EX-5 2 OPINION OF HINSHAW & CULBERTSON EXHIBIT 5 [LETTERHEAD OF HINSHAW & CULBERTSON] October 1, 1997 WRITER'S DIRECT DIAL NO. FILE NO. (312) 704-3852 756843 First Midwest Bancorp, Inc. 300 Park Boulevard, Suite 405 P.O. Box 459 Itasca, Illinois 60143-0459 Re: Registration Statement on Form S-3 Ladies and Gentlemen: You have requested our opinion in connection with the above-referenced registration statement (the "Registration Statement") for the registration of up to 1,520, 611 shares of Common Stock, $.01 par value per share, of the Company (the "Shares"), which are to be sold by certain stockholders of the Company. In arriving at the opinion expressed below, we have examined the Registration Statement and such other documents as we have deemed necessary to enable us to express the opinion hereinafter set forth. In our examination, we have assumed the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies, the genuineness of all signatures on documents reviewed by us and the legal capacity of natural persons. Based upon and subject to the foregoing, we are of the opinion that the Shares have been duly authorized and validly issued and are fully paid and non- assessable. We hereby consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement and to the use of this opinion as an exhibit to the Registration Statement. Very truly yours, Timothy M. Sullivan TMS/mm EX-10.1 3 INVESTMENT AGREEMENT EXHIBIT 10.1 INVESTMENT AGREEMENT -------------------- This INVESTMENT AGREEMENT, dated as of June 18, 1997, between FIRST MIDWEST BANCORP, INC., a Delaware corporation ("First Midwest"), and the undersigned stockholders of SPARBANK, INCORPORATED ("SparBank"), a Delaware corporation (collectively, the "Stockholders"). WHEREAS, First Midwest and SparBank are parties to an Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"), providing for the merger of SparBank with and into a wholly-owned subsidiary of First Midwest (the "Merger") in which shares of common stock of First Midwest, par value $.01 per share ("First Midwest Common Stock"), are to be issued to the Stockholders, under the terms and conditions set forth therein; and WHEREAS, the Merger Agreement provides that the shares of First Midwest Common Stock to be issued in the Merger (the "Shares") will be issued in a private placement transaction exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), and that the Shares will be subject to registration rights as set forth in this Investment Agreement and a Registration Rights Agreement to be entered into by First Midwest and the Stockholders; and WHEREAS, the parties wish to set forth certain representations, agreements and undertakings for the purpose of qualifying the Shares for an exemption from registration under the Securities Act and to fix the terms and conditions of such registration rights hereunder; and WHEREAS, it is the parties' intention that the Merger qualify as a tax-free Merger under Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"), and the rules, regulations and interpretations promulgated or issued thereunder; and WHEREAS, as a condition to First Midwest's agreement to grant the registration rights set forth herein and in the Registration Rights Agreement, First Midwest is requiring that each of the Stockholders provide certain representations and warranties and enter into certain agreements and indemnifications in connection with the transfer of the Shares and the qualification of the Merger as a tax-free Merger under the Code. NOW, THEREFORE, the parties hereto, in consideration of the premises and of the mutual covenants and agreements contained herein, agree as follows: 1. REPRESENTATIONS AND COVENANTS OF STOCKHOLDERS. In order to induce First Midwest to consummate the Merger contemplated by the Merger Agreement and to issue and exchange the Shares for the shares of the Common Stock of SparBank held by each of the Stockholders, each of the Stockholders, with respect to himself or herself, severally and not jointly, represents and warrants to, or agrees with, First Midwest as follows: (a) Ownership of Shares. As of the date hereof, each Stockholder: (i) holds of record or beneficially that number of shares of the Common Stock of SparBank set forth opposite his or her name on Schedule 1(a) to this Investment Agreement (the "SparBank Shares"); (ii) has good title to all SparBank Shares held by such Stockholder, free and clear of all liens, claims, and encumbrances, except as set forth on Schedule 1(a); (iii) is domiciled, for purposes of compliance with blue sky filing requirements in paragraph 2(g), in the state shown opposite each Stockholder's name on Schedule 1(a); and (iv) will receive the number of Shares set forth opposite his or her name on Schedule 1(a) in exchange for his or her SparBank Shares and will seek to register under the terms of this Investment Agreement no more than the number of Shares as indicated on said Schedule. (b) Information with respect to First Midwest. First Midwest has furnished to each of the Stockholders, and each of the Stockholders has received and reviewed, either alone or with the assistance of counsel or his or her regular financial advisor, prior to the date hereof, each of the following documents: (i) First Midwest's Annual Report on Form 10-K for the year ended December 31, 1996 (which contains First Midwest's 1996 Annual Report to its Stockholders) as filed with the Securities and Exchange Commission (the "SEC"), (ii) First Midwest's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, as filed with the SEC, (iii) First Midwest's notice and proxy statement for its 1997 Annual Meeting of Stockholders, and (iv) First Midwest's Current Report on Form 8-K filed on February 11, 1997 with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Each of the Stockholders has also received and reviewed a copy of the Merger Agreement and copies of the following financial statements: (i) unaudited financial statements of McHenry State Bank for the quarter ended March 31, 1997, and the year ended December 31, 1996; and (ii) audited consolidated financial statements of SparBank for the year ended December 31, 1995, as well as a copy of Section 262 of the General Corporation Law of the State of Delaware (the "GCL") which would govern the appraisal of the SparBank Shares if a Stockholder were to pursue his or her appraisal rights under the GCL. (c) Approval of the Merger. Each of the Stockholders hereby agrees to execute and deliver as of the date hereof a written consent approving the Merger and the Merger Agreement in the form attached hereto as Exhibit A. (d) Stockholder Intent/Legending of Certificates. (i) Investment Intent. Each Stockholder (1) has such knowledge and experience in financial matters that the Stockholder is capable of evaluating the merits and risks of the acquisition of the Shares and has requested, received, reviewed and considered all information the Stockholder deems relevant in making an informed decision to acquire the Shares, (2) intends to acquire the Shares to be received in the Merger for investment only and with no present intention of distributing or reselling any of such Shares (other than for sales pursuant to this Investment Agreement, the Registration Rights Agreement and the Registration Statement (as defined below), or sales pursuant to this Investment Agreement which are otherwise in compliance with the Securities Act and the rules and regulations promulgated thereunder), and (3) agrees that, for a period of one (1) year from the date the Shares are issued, the Stockholder will not, directly or indirectly, offer, sell, pledge, transfer, or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares, other than in compliance with this Investment Agreement, the 2 Registration Rights Agreement, and the Securities Act and the rules and regulations promulgated thereunder. (ii) Tax Matters. Each of the Stockholders represents and warrants to First Midwest and to each other Stockholder who is a party to this Investment Agreement that there is no present plan or intention by him or her to sell, exchange, or otherwise dispose of, a number of Shares received in the transaction that would reduce the Stockholders' ownership of the Shares, as a group, to a number of Shares having a value, as of the Effective Time of the Merger (as defined in the Merger Agreement), of less than 50% of the "Exchanged Value". For the purposes of this Investment Agreement, the term "Exchanged Value" shall be the aggregate as of the Effective Time of the Merger of the First Midwest Common Stock and cash and other property, if any, received by the Stockholders in exchange for the SparBank Shares and pursuant to the exercise of dissenters' rights. (iii) Legending of Certificates. Each Stockholder acknowledges and agrees that the Shares being issued in accordance with the Merger Agreement (1) have not been registered under the Securities Act in reliance upon an exemption from registration under the Securities Act, (2) are subject to certain restrictions on transfer as set forth herein, and (3) that the certificates evidencing the Shares will bear the following restrictive legend: "The shares represented by this certificate were issued in connection with the merger described in that certain Agreement and Plan of Merger, dated as of June 18, 1997, by and between First Midwest Bancorp, Inc. ("First Midwest"), FMB Acquisition Corporation and SparBank, Incorporated, and are subject to certain restrictions on transfer set forth in that certain Investment Agreement, dated as of June 18, 1997, between First Midwest and the stockholders named therein (the "Investment Agreement"), and were issued without registration under the Securities Act of 1933, as amended (the "Act"), in reliance on an exemption therefrom. These shares may not be sold or otherwise transferred except pursuant to a registration statement under the Act, upon compliance with Rule 144 under the Act, or upon receipt by First Midwest of an opinion of counsel reasonably satisfactory to it that an exemption from registration under the Act is available, and except in compliance with the Investment Agreement. (iv) Reliance of First Midwest. Each of the Stockholders further acknowledges and understands that First Midwest is relying on the truth and accuracy of the representations made by each Stockholder herein for purposes of, among other matters, establishing the existence of such exemptions. (e) Each of the Stockholders shall designate, by written notice delivered to First Midwest at least five (5) business days prior to the Closing Date (as defined in the Merger Agreement), the number of Shares that such Stockholder desires to register pursuant to the Registration Statement (the "Registrable Shares"). Each Stockholder covenants and agrees (i) to furnish to First Midwest, in writing, any information relating to the Stockholder which First Midwest reasonably determines to be necessary for disclosure in any Registration Statement (as that term is defined in Paragraph 2(a)) covering the Registrable Shares (or any amendment thereto) or for the purpose of complying 3 with an exemption from registration or applicable state securities laws, promptly after request therefor by First Midwest, (ii) to discuss such information with First Midwest or its representatives, upon the request of First Midwest, and (iii) to otherwise cooperate with First Midwest to achieve compliance with applicable exemptions and applicable federal and state securities laws and the exemptions thereunder. Each Stockholder warrants that all information to be furnished by the Stockholder to First Midwest pursuant to this Paragraph 1(e) shall be true and correct. (f) Compliance with Securities Law and Transfer Requirements. Each Stockholder will fully comply with all requirements under the Securities Act and the Exchange Act, including without limitation the prospectus delivery requirements under the Securities Act and the provisions of Regulation M of the Exchange Act, if applicable, in connection with any sale or distribution of the Registrable Shares pursuant to the Registration Statement, and with the transfer procedures set forth in Paragraph 3 hereof. Each Stockholder further agrees that no transfer of Registrable Shares may be made to the public except in an "ordinary trading transaction." As used in this Investment Agreement, an "ordinary trading transaction" means a sale of Registrable Shares on the NASDAQ Stock Market's National Market (the "NASDAQ National Market") using the services of a broker-dealer registered in the state where the transfer is to occur, and without the use of special selling efforts or methods. (g) Capacity and Enforceability. Each Stockholder represents, warrants and covenants to First Midwest that (i) the Stockholder has full right, power, authority and capacity to enter into this Investment Agreement and to consummate the transactions contemplated hereby, and (ii) upon his or her execution and delivery, this Investment Agreement shall constitute a legally binding and valid obligation of the Stockholder enforceable in accordance with its terms (except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles or doctrines). (h) Hold-Back Agreement. Each Stockholder, who becomes a director, executive officer or person owning 3% or more of the issued and outstanding Common Stock of First Midwest, agrees, if requested by an underwriter in an underwritten offering for First Midwest (whether for its account or otherwise), not to effect any public sale or distribution of any of the Shares (except as part of such underwritten distribution), during the ten (10) day period prior to, and during the sixty (60) day period beginning on the closing date of such underwritten offering; provided, however, that the provisions of this Paragraph 1(h) shall apply only if such underwriter requests that directors, executive officers and persons owing 3% or more of the issued and outstanding Common Stock of First Midwest abide by similar restrictions. 2. REPRESENTATIONS AND COVENANTS OF FIRST MIDWEST. First Midwest hereby represents and warrants to, and agrees with, the Stockholders as follows: (a) Filing and Effectiveness of Registration Statement. Prior to the Closing Date, First Midwest shall prepare a registration statement on Form S-3 (or on such other form as then may be available to First Midwest) registering the offer and sale, by the Stockholders, of the Registrable Securities (the "Registration Statement") and shall take all corporate action necessary to authorize the filing of such Registration Statement with the SEC. First Midwest shall (i) provide the Stockholders and their respective counsel with an opportunity to participate in the preparation of 4 such Registration Statement and, to the extent practicable, each amendment thereto, (ii) give each of them such access to the books, records, and properties of First Midwest and its subsidiaries (to the extent customarily given to selling stockholders in a registered offering and sale of an issuer's securities) and (iii) give each of them such opportunities to discuss the business of First Midwest with its officers and independent public accountants who have certified its financial statements and require such officers and accountants to supply such information, as in each case shall be reasonably requested by any Stockholder or his or her counsel in connection with a "reasonable investigation" of the information contained in the Registration Statement within the meaning of the Securities Act; provided, however, that the Stockholders shall provide to First Midwest written assurances reasonably satisfactory to First Midwest that any information disclosed as provided above shall be kept confidential unless required to be set forth in the Registration Statement. Subject to Paragraph 2(d) below, First Midwest shall file with the SEC the Registration Statement within five (5) business days following the Effective Time of the Merger and shall use reasonable efforts to cause the Registration Statement to become effective as soon as practicable thereafter; provided, however, that First Midwest shall have the right to delay such filing and/or effectiveness until such time as the Stockholders have complied with the requirements of Paragraph 1(e)(i). The Registration Statement shall provide for the sale of the Registrable Shares from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act. (b) Eligibility to Use Form S-3; Timeliness of Effectiveness. First Midwest hereby represents and warrants to the Stockholders that, as of the date of this Agreement, First Midwest meets all of the requirements for filing on Form S-3 and knows of no reason why the Registration Statement should not be declared effective by the SEC in a timely manner. Without limitation of the foregoing, (i) First Midwest has filed in a timely manner all reports required to be filed by it with the SEC during the twelve (12) calendar months prior to the date of this Agreement, and (ii) First Midwest hereby agrees to file, within fifteen (15) days of the Closing Date, a Current Report on Form 8-K, reporting the consummation of the Merger, and within thirty (30) days of the Closing Date, an amendment to such report which shall include all financial statements and pro forma financial information required to be filed with the SEC in order to permit the Registration Statement to be declared effective. (c) Amendments or Subsequent Registration Statement. First Midwest shall, subject to Paragraph 2(d) below, prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective until the earlier of (i) the date that all of the Registrable Shares have been sold pursuant thereto or (ii) until all of the Registrable Shares owned by the Stockholders may be sold pursuant to Rule 144(c) through (i) under the Securities Act or any other rule of similar effect, without the registration of such Shares under the Securities Act; or, in lieu of filing an amendment or supplement to the Registration Statement, First Midwest may, at its option, file and cause to become effective a subsequent registration statement on Form S-3 or on such other form as may be then available to First Midwest covering the Registrable Shares to permit the transfer of the Registrable Shares from time to time. If First Midwest elects to file such subsequent registration statement which thereafter becomes effective, such subsequent registration statement, upon its effectiveness, shall be deemed the "Registration Statement" for all purposes of this Investment Agreement. The period from the effective date of the Registration Statement through the earlier of 5 the dates described in clauses (i) and (ii) of this Paragraph 2(c) is herein referred to as the "Effective Period". (d) Right to Delay Effectiveness or Amendments. Notwithstanding the provisions of Paragraphs 2(a) and (c), First Midwest shall have the right to postpone for a reasonable period of time (but not exceeding forty-five (45) days) the filing, effectiveness, supplementing or amending of the Registration Statement if (i) First Midwest in its good faith judgment determines that such action would interfere with any material financing, acquisition, disposition, corporate reorganization or other material transaction involving First Midwest or any of its subsidiaries then planned, pending or in progress or would require public disclosure thereof (unless public disclosure thereof has previously been made), and (ii) First Midwest gives the Stockholders whose Registrable Shares are to be offered and sold pursuant to the Registration Statement prompt written notice of such determination, signed by the Chairman, the President, or any Executive Vice President of First Midwest, including a statement of the anticipated length of the postponement; provided, however, that after any exercise of its right of postponement under this Paragraph 2(d), First Midwest shall not exercise again its right of postponement within three (3) months of the expiration of any such postponement. (e) Notification of Stockholders. First Midwest shall notify, as soon as reasonably practicable, each Stockholder whose Registrable Shares are to be offered and sold pursuant to the Registration Statement of the occurrence of any of the following events: (i) the filing and effectiveness of the Registration Statement and any post-effective amendment thereof, (ii) the receipt by First Midwest of any request from the SEC for amendments or supplements to the Registration Statement or the prospectus included therein or for any additional information, (iii) the receipt by First Midwest of any stop order issued by the SEC or of any notification with respect to the suspension of the qualification of the Registrable Shares in any jurisdiction or of the initiation or threatening of any proceeding for such purpose, and (iv) the discovery that the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in light of the circumstances under which they were made. (f) Copies of Prospectus. First Midwest shall furnish to the Stockholders copies of the preliminary prospectuses and prospectuses included in the Registration Statement as required by the Securities Act and such other documents as the Stockholders may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Registrable Shares by the Stockholders. (g) Blue Sky Filings. First Midwest shall file all documents required to be filed by First Midwest for routine blue sky clearance in the State of Illinois, or such other state in which a Stockholder may be domiciled, except that First Midwest shall not be required to obtain blue sky clearance for Registrable Shares in any other state where First Midwest may be required (i) to qualify to do business as a foreign corporation or as a dealer in any state where it is not so qualified, (ii) to conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of such state, (iii) to take any action which would subject it to service of process in suits other than those arising out of the offer and sale of the Registrable Shares covered by such Registration 6 Statement, or (iv) to subject itself to taxation in any state where it is not so subject at the time First Midwest is asked to obtain blue sky clearance. (h) Expenses. First Midwest agrees to bear all expenses in connection with the registration of the Registrable Shares on such Registration Statement and the satisfaction of the blue sky requirements set forth in this Investment Agreement, except for underwriting discounts, selling commissions, brokers' fees or similar discounts, commissions or fees, and fees and expenses, if any, of counsel and other advisors to the Stockholders, which fees and expenses shall be paid by the Stockholders. (i) Underwriters. First Midwest understands that the Stockholders disclaim being underwriters for purposes of the Securities Act, but if any of the Stockholders are deemed to be underwriters that fact shall not relieve First Midwest or any of the Stockholders of any of their respective obligations under this Investment Agreement. (j) Compliance with SEC Reporting Obligations. From and after the date of this Agreement, First Midwest shall timely file all reports required to be filed by it under the Exchange Act or the Securities Act in order (i) to preserve First Midwest's continued eligibility to use Form S-3, (ii) to ensure the timely updating of the information included in the prospectus which forms a part of the Registration Statement, and (iii) to enable the Stockholders to sell Shares without registration under the Securities Act within the limitation of the exemption provided by Rule 144 of the SEC under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Stockholder, First Midwest shall deliver to such Stockholder a written statement as to whether it has complied with such requirements. (k) Removal of Legend. Following the second anniversary of the Closing Date, First Midwest shall promptly remove, at the request of any Stockholder, the legend on the certificates evidencing the Shares, as set forth in Paragraph 1(d)(iii) of this Investment Agreement. (l) Listing. First Midwest shall cause the Registrable Shares covered by the Registration Statement to be listed on the NASDAQ National Market. 3. TRANSFERS OF REGISTRABLE SHARES AFTER REGISTRATION; LIMITATIONS ON TRANSFERS; AMENDED REGISTRATION STATEMENT. (a) Advance Notice of Sales. At any time following notice to the Stockholders by First Midwest that First Midwest has begun repurchasing shares of First Midwest Common Stock under its stock repurchase program, any Stockholder who may be deemed to constitute an "affiliated purchaser" of First Midwest within the meaning of Regulation M of the SEC under the Exchange Act, shall give prior written notice to First Midwest of his or her intent to place, with a registered broker-dealer, an order to sell Registrable Shares pursuant to the Registration Statement (a "Transfer Notice"), unless such Stockholder shall have delivered to First Midwest an opinion of counsel, reasonably acceptable to First Midwest and its counsel, to the effect that sales of Registrable Shares by the Stockholder under the Registration Statement are not subject to the provisions of Regulation M. Such Transfer Notice shall specify the date upon which the order to sell is to be placed and shall 7 be given no later than 2:00 p.m. on the second business day preceding such date. First Midwest shall not repurchase any shares of First Midwest Common Stock during the period beginning with the business day immediately preceding the date specified in the notice and ending on the date on which the Stockholder providing such Transfer Notice notifies First Midwest of the completion of the sale; provided, however, that in no event shall First Midwest will be required to cease repurchases for a period of more than five (5) business days from the date specified in the Transfer Notice. (b) Right to Amend Registration Statement. If First Midwest notifies the Stockholders (whether or not First Midwest has received a Transfer Notice) that the Registration Statement may be required to be amended or supplemented so that a transfer of the Registrable Shares pursuant to the Registration Statement can be effected in compliance with the Securities Act and the Exchange Act, then subject to Paragraph 2(d), (i) First Midwest shall, within twenty (20) business days after the date of such notice, prepare and file with the SEC such amendments and supplements to the Registration Statement as may be necessary to permit the Stockholders to transfer their Registrable Shares pursuant to the Registration Statement in compliance with the Securities Act and the Exchange Act, and (ii) until such amendment or supplement becomes effective pursuant to the rules and regulations promulgated under the Securities Act, none of the Stockholders shall effect any transfer of the Registrable Shares pursuant to the Registration Statement. Notwithstanding the foregoing, the obligation of First Midwest to file any amendment or supplement to the Registration Statement shall not apply with respect to any amendment or supplement relating to information supplied by any of the Stockholders or any other person selling shares pursuant to the Registration Statement unless the Stockholders or such other person shall have given prior written notice to First Midwest that an amendment or supplement is required, in which case (i) First Midwest shall file such amendment or supplement within twenty (20) business days following the date such notice is received by First Midwest, and (ii) until such amendment or supplement becomes effective pursuant to the rules and regulations promulgated under the Securities Act, none of the Stockholders shall effect any transfer of the Registrable Shares pursuant to the Registration Statement. In each case, First Midwest will use its reasonable best efforts to cause the amendment to become effective. (c) Transfer Procedures. During the Effective Period, if a transfer has been made in compliance with this Investment Agreement, the Stockholder shall furnish to First Midwest's Transfer Agent the certificates evidencing the Registrable Shares being transferred, together with (i) a representation letter in the form of Exhibit B hereto, addressed to the Transfer Agent and First Midwest and signed by the Stockholder making the transfer, (ii) any other opinions or certifications required under this Investment Agreement, and (iii) such other documents as First Midwest's Transfer Agent may reasonably require. (d) Pledges of Shares. Each Stockholder shall deliver to First Midwest a notice in the form attached as Exhibit C and the opinion of counsel referred to therein before pledging any of the Shares to a third party for purposes of security. 4. INFORMATION TO BE FURNISHED TO STOCKHOLDERS. So long as the Registration Statement is effective, First Midwest shall furnish to each of the Stockholders as soon as practicable after available, one copy of (i) its Annual Report to Stockholders (which shall contain audited financial statements prepared in accordance with generally accepted accounting principles), (ii) such Quarterly Reports to Stockholders which First Midwest may prepare and distribute from 8 time to time, and (iii) a full copy of the Registration Statement covering the Registrable Shares (excluding exhibits). In addition, upon the reasonable request of any of the Stockholders, First Midwest shall furnish to such Stockholder any other information that is generally made available to the public by First Midwest. 5. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions imposed by this Investment Agreement upon the transferability of the Shares shall terminate as to any particular Shares (i) when such Shares shall have been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended method of disposition set forth in the Registration Statement, (ii) upon the second anniversary of the Closing Date or (iii) at such time as an opinion of counsel satisfactory to First Midwest shall have been rendered to the effect that such conditions are not necessary in order to comply with the Securities Act. 6. INDEMNIFICATION. (a) Indemnification By First Midwest. In the event of any registration of any securities of First Midwest under the Securities Act pursuant hereto, First Midwest will, and it hereby agrees to, indemnify and hold harmless, to the extent permitted by law, each Stockholder, its directors and officers or general and limited partners (and directors and officers thereof), and each other person, if any, who controls such Stockholder within the meaning of the Securities Act, as follows: (i) against any and all loss, liability, claim, damage or expense whatsoever arising out of or based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of an untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of First Midwest; and (iii) against any and all expense reasonably incurred by them in connection with investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that this indemnity does not apply to any loss, liability, claim, damage or expense to the extent arising out of (y) an untrue statement or alleged untrue statement or omission 9 or alleged omission made in reliance upon and in conformity with written information furnished to First Midwest by or on behalf of any such Stockholder expressly for use in the preparation of the Registration Statement (or any amendment thereto) or any preliminary prospectus or prospectus (or any amendment or supplement thereto) or (z) any transfer not in material compliance with the terms of this Investment Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Stockholder or any such director, officer, general or limited partner or controlling person and shall survive the transfer of such securities by such Stockholder. (b) Indemnification by the Stockholders. Each Stockholder agrees to indemnify and hold harmless (in the same manner and to the same extent as set forth in Paragraph 6(a)) First Midwest with respect to (i) any statement or alleged statement in or omission or alleged omission from such registration statement, any preliminary, final or summary prospectus contained therein, or any amendment or supplement, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to First Midwest by or on behalf of such Stockholder specifically stating that it is for use in the preparation of such registration statement, preliminary, final or summary prospectus or amendment or supplement or (ii) any transfer not in material compliance with this Investment Agreement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of First Midwest or any such director, officer or controlling person and shall survive the transfer of such securities by such Stockholder. In that event, the obligations of First Midwest and such Stockholders pursuant to this Paragraph 6 are to be several and not joint; provided, however, that, with respect to each claim pursuant to this Paragraph 6, First Midwest shall be liable for the full amount of such claim, and each such Stockholder's liability under this Paragraph 6 shall be limited to an amount equal to the net proceeds received by such Stockholder from the sale of Registrable Shares held by such Stockholder pursuant to this Investment Agreement. (c) Notice of Claim and Defense of Claim or Action. Promptly after receipt of notice of any claim or commencement of any action for which indemnification is sought under this Paragraph 6, the person seeking indemnification (the "Claimant") shall give the person from whom indemnification is sought (the "Indemnifier") written notice of such claim or the commencement of such action ("Notice"). If, within five (5) business days of receipt of such Notice, the Indemnifier notifies the Claimant that it has elected to assume the defense of such claim or action, with counsel reasonably satisfactory to the Claimant, then the Indemnifier shall not be liable to such Claimant for any legal fees or expenses subsequently incurred by the Claimant in such defense; provided, however, that if, in the reasonable judgment of the Claimant, there is or would be a conflict of interest that would make it inappropriate for the same counsel to represent both the Claimant and the Indemnifier, then the Claimant shall be entitled to retain its own counsel at the expense of the Indemnifier. (d) Contribution. In order to provide for just and equitable contribution in circumstances under which the indemnity contemplated by this Paragraph 6 is for any reason not available, the parties required to indemnify by the terms thereof shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by First Midwest and any Stockholder, except to the extent that contribution is not permitted under Section 11(f) of the Securities Act. In determining the amounts which the 10 respective parties shall contribute, there shall be considered the relative benefits received by each party from the offering of the Registrable Securities (taking into account the portion of the proceeds of the offering realized by each), the parties' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission and any other equitable considerations appropriate under the circumstances. First Midwest and each Stockholder agree with each other that no Stockholder shall be required to contribute any amount in excess of the amount such person would have been required to pay to an indemnified party if the indemnity under Paragraph 6(b) were available. First Midwest and each such Stockholder agree with each other that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation. For purposes of this Paragraph 6(d), each director and each officer of First Midwest who signed the Registration Statement, and each person, if any, who controls First Midwest or a Stockholder within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as First Midwest or a Stockholder, as the case may be. 7. NOTICES. All notices, consents, requests, demands and other communications hereunder shall be in writing and shall be deemed duly given to any party or parties (a) upon delivery to the address of the party or parties as specified below if delivered in person or by courier or if sent by certified or registered mail (return receipt requested), or (b) upon dispatch if transmitted by telecopy or other means of facsimile transmission and such transmission is confirmed successfully by the transmitting machine, provided that such transmission is received during normal business hours and that any transmission received outside of normal business hours shall be deemed to be received at the start of normal business hours commencing immediately after the dispatch of the transmission, in each case addressed as follows: (a) if to First Midwest: Donald J. Swistowicz Executive Vice President First Midwest Bancorp, Inc. 300 Park Boulevard, Suite 405 Itasca, Illinois 60143-0459 Telephone: (630) 875-7460 Telecopier: (630) 875-7474 copy to: Timothy M. Sullivan Hinshaw & Culbertson 222 North LaSalle Street, Suite 300 Chicago, IL 60601-1081 Telephone: (312) 704-3852 Telecopier: (312) 704-3001 11 (b) if to the Stockholders: To the address listed under such Stockholder's name on the Exhibit D hereto (c) copy to: Gary L. Mowder Schiff Hardin & Waite 7200 Sears Tower Chicago, Illinois 60606 Telephone: (312) 258-5514 Telecopier: (312) 258-5600 or to such other address with respect to a party as such party shall notify the other in writing as above provided. 8. SUCCESSORS AND ASSIGNS. This Investment Agreement and the rights and obligations of the Stockholders hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but the rights granted hereunder shall not be assignable by any Stockholder by operation of law or otherwise without the prior written consent of First Midwest, except that such consent shall not be required in the event of transfer by bequest, devise, inheritance or law of intestacy or gift. 9. GOVERNING LAW. This Investment Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois without regard to conflicts of law principles thereof. 12 10. COUNTERPARTS. This Investment Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute but one instrument. FIRST MIDWEST BANCORP, INC. By ROBERT P. O'MEARA ----------------------------------- Executive Vice President ALAN R. MILASIUS - ---------------------------- Secretary GERALDINE C. COWLIN WILLIAM J. COWLIN - ---------------------------- --------------------------------- Geraldine C. Cowlin William J. Cowlin WILLIAM J. COWLIN, JR. BRIDGET COWLIN - ---------------------------- --------------------------------- William J. Cowlin, Jr. Bridget Cowlin SARAH COWLIN TOWNE MARTHA COWLIN - ---------------------------- --------------------------------- Sarah Cowlin Towne Martha Cowlin DAVID COWLIN JOHN ZIEMAN - ---------------------------- --------------------------------- David Cowlin John Zieman JANE ZIEMAN SALMON --------------------------------- Jane Zieman Salmon 13 SCHEDULE 1(a) ------------- SPARBANK, INCORPORATED STOCKHOLDER LIST
Number of Shares to Maximum Number of be Received Number of SparBank in the Shares to be Name Shares Domicile Merger Registered ---- --------- -------- ----------- ------------ Geraldine C. Cowlin 106,344 Illinois 2,310,153 800,000 William J. Cowlin, Sr. 400 Illinois 8,689 8,689 William J. Cowlin, Jr. 5,261 Illinois 114,286 114,286 Sarah Cowlin Towne 5,261 Illinois 114,286 114,286 Bridget Cowlin 5,261 Illinois 114,286 114,286 Martha Cowlin 5,261 California 114,286 114,286 David Cowlin 5,263 Indiana 114,330 114,330 John Zieman 7,836 Minnesota 170,224 170,224 Jane Zieman Salmon 7,836 Colorado 170,224 170,224 ------- --------- --------- Total: 148,723 3,230,764 1,720,611
EXHIBIT B TO INVESTMENT AGREEMENT REPRESENTATION LETTER ___________________, 199_ [Name and Address of First Midwest Transfer Agent] RE: Notice of Sale of Common Stock Pursuant to an Investment Agreement, dated as of June 18, 1997, Relating to the Acquisition of SparBank, Incorporated by First Midwest Bancorp, Inc. Ladies and Gentlemen: I am a party to the above-referenced Investment Agreement and a "Selling Stockholder" named in the prospectus included in that certain Registration Statement on Form S-3 (the "S-3 Registration Statement"). In accordance with the provisions of Paragraph 3(c) of the Investment Agreement, you are hereby notified that I have sold ________ shares (the "Shares") (the "Transfer") of the common stock ($.01 par value) (the "Common Stock") of First Midwest Bancorp, Inc. ("First Midwest"), pursuant to the S-3 Registration Statement. In connection with this Transfer, and as a requirement to the transfer of the Shares sold to the purchaser by me, I hereby represent and warrant to you and to First Midwest as follows: a. The Transfer was made to the public in an "ordinary trading transaction" (as that term is defined in Paragraph 1(f) of the Investment Agreement) by a registered broker-dealer, without the use of special selling efforts or methods; b. I have delivered, or caused the broker handling the sale to deliver, prior to the sale of the Shares to the purchaser thereof, a copy of the Prospectus included in the S-3 Registration Statement and have otherwise have complied with all prospectus delivery requirements under the Securities Act of 1933, as amended (the "Securities Act"). I have further complied with all other requirements of the Securities Act and the Exchange Act and the regulations thereunder applicable to the Transfer; and c. The number of Shares being transferred, when added to any shares previously transferred pursuant to the S-3 Registration Statement or the Investment Agreement, do not exceed the number of shares set forth opposite my name in the "Selling Stockholder" table in the Prospectus, and will not cause a breach of any representation or warranty made by me in the Investment Agreement. I hereby undertake to provide you with such other documentation as you may require as Transfer agent or as may be required under the Investment Agreement in order to complete the transfer of the Shares. Very truly yours, - --------------------------- Name of Stockholder 2 EXHIBIT C TO INVESTMENT AGREEMENT NOTICE OF PROPOSED TRANSFER (PLEDGE) ___________________, 199_ First Midwest Bancorp, Inc. 300 Park Boulevard, Suite 405 P.O. Box 459 Itasca, Illinois 60143-0459 Attn: Corporate Secretary RE: Pledge and Consent Pursuant to an Investment Agreement, dated as of June 18, 1997, Relating to the Acquisition of SparBank, Incorporated by First Midwest Bancorp, Inc. Ladies and Gentlemen: I am entering into a loan transaction (the "Loan") with the financial institution identified below (the "Bank") which Loan is to be secured by, among other collateral, a pledge of ______________ shares of the Common Stock of First Midwest Bancorp, Inc. (the "Shares"), held by me to the Bank (the "Pledge"). The Shares were issued to me without registration under federal and state securities laws pursuant to that certain Investment Agreement, dated as of June 18, 1997. The certificates evidencing the Shares bear a restrictive legend to the effect that any transfer of such Shares is restricted by, among other things, the provisions of the Investment Agreement. Paragraph 3(d) of the Investment Agreement requires me to deliver notice to First Midwest of any proposed Pledge describing the proposed Pledge, together with an opinion of counsel that such Pledge does not require registration under the Securities Act of 1933, as amended (the "Securities Act"), and that First Midwest consent to such Pledge. I hereby enclose an opinion of counsel to the effect that registration under the Securities Act is not required in connection with the proposed Pledge, and request that First Midwest consent to the proposed Pledge of the Shares to the Bank. Name and Address of Bank: ------------------------------------------------ ------------------------------------------------ Name of Contact Person: ------------------------ Tel.: ; Fax: ------------------- ------------------ Very truly yours, - ----------------------------------- Name of Stockholder ACKNOWLEDGMENT BY BANK The Bank understands and agrees that the Shares are subject to the restrictions on transfer described in the Investment Agreement, a copy of which has been furnished to the Bank, and that any disposition of the Shares by the Bank following foreclosure of the Pledge will be subject to the provisions of federal and state securities laws and the Investment Agreement. - ----------------------------------- Name of Bank By -------------------------------- Its ------------------------------- Consent is hereby given for the pledge by the Stockholder named above to the above Bank of shares of First Midwest Bancorp, Inc. common stock received pursuant to that certain Investment Agreement, dated as of June 18, 1997. FIRST MIDWEST BANCORP, INC. By -------------------------------- Its ------------------------------- 2 EXHIBIT D --------- STOCKHOLDER ADDRESS LIST ------------------------ Geraldine C. Cowlin c/o Law Offices of William J. Cowlin 41 North Virginia Street Crystal Lake, Illinois 60014 William J. Cowlin c/o Law Offices of William J. Cowlin 41 North Virginia Street Crystal Lake, Illinois 60014 William J. Cowlin, Jr. Law Offices of William J. Cowlin 41 North Virginia Street Crystal Lake, Illinois 60014 Martha Cowlin 116 Spinnaker Court Del Mar, California 92014 Sarah Towne 7794 Joy Lane Roscoe, Illinois 61073 Bridget Cowlin 1939 West Waveland, 1st Floor Chicago, Illinois 60613 David Cowlin 6209 Broadway Indianapolis, Indiana 46220 Jane Zieman Salmon 1924 Linden Ridge Ft. Collins, Colorado 80524 John Christopher Zieman Box 114, Route 2 Caledonia, Minnesota 55921 EX-23.1 4 CONSENT OF INDEPENDENT AUDITORS Exhibit 23.1 Consent of Independent Auditors We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of First Midwest Bancorp, Inc. for the registration of 1,520,611 shares of its common stock and to the incorporation by reference therein of our report dated January 16, 1997, with respect to the 1996 consolidated financial statements of First Midwest Bancorp, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1996 filed with the Securities and Exchange Commission. ERNST & YOUNG LLP Chicago, Illinois October 1, 1997 EX-23.2 5 CONSENT OF INDEPENDENT AUDITORS Exhibit 23.2 CONSENT OF INDEPENDENT AUDITORS ------------------------------- The Board of Directors First Midwest Bancorp, Inc.: We consent to the incorporation by reference in the registration statement on Form S-3 of First Midwest Bancorp, Inc. of our report dated January 19, 1996, relating to the consolidated statement of condition of First Midwest Bancorp, Inc. and subsidiaries as of December 31, 1995, and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the years in the two-year period ended December 31, 1995, which report appears in the December 31, 1996 annual report on Form 10-K of First Midwest Bancorp, Inc. and to the reference to our firm under the heading "Experts" in the prospectus. KPMG PEAT MARWICK LLP Chicago, Illinois October 1, 1997 -----END PRIVACY-ENHANCED MESSAGE-----