<PAGE>
Registration No. 333-
As filed with the Securities and Exchange Commission on October _____, 1997
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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. [_]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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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
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock; $.01 Par Value ** 1,520,611 $38.00 $57,783,218 $17,510.07
=====================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee and
computed pursuant to Rule 457(c) of the Securities Act of 1933, based on
the average of the high and low prices of the Common Stock on the Nasdaq
Stock Market's National Market as quoted in the Wall Street Journal on
October 7, 1997.
** The registrant is also registering Preferred Share Purchase Rights which are
evidenced by the certificates for the Common Stock being registered in a
ratio of one Preferred Share Purchase Right for each share of Common Stock.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
Subject to Completion, dated October ______, 1997
PROSPECTUS , 1997
FIRST MIDWEST BANCORP, INC.
1,520,611 Shares
Common Stock
($.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.
<PAGE>
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
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
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
<PAGE>
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
<PAGE>
$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
<PAGE>
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
<PAGE>
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
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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.
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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.
<TABLE>
<CAPTION>
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
- -------- -------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C>
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
========= ---------
- -----------------------
</TABLE>
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.
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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
<PAGE>
"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
<PAGE>
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
<PAGE>
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
<PAGE>
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:
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
Signature Capacity
--------- --------
<S> <C>
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
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Capacity
--------- --------
<S> <C>
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
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibits Description Page No.
- -------- ----------- ----------
<C> <S> <C>
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
</TABLE>
II-7
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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
<PAGE>
SCHEDULE 1(a)
-------------
SPARBANK, INCORPORATED
STOCKHOLDER LIST
<TABLE>
<CAPTION>
Number of
Shares to Maximum
Number of be Received Number of
SparBank in the Shares to be
Name Shares Domicile Merger Registered
---- --------- -------- ----------- ------------
<S> <C> <C> <C> <C>
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
</TABLE>
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
Name and Address of Bank:
------------------------------------------------
------------------------------------------------
Name of Contact Person:
------------------------
Tel.: ; Fax:
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Very truly yours,
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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
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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
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2
<PAGE>
EXHIBIT D
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STOCKHOLDER ADDRESS LIST
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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
<PAGE>
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
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
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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
