SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
FIRST MIDWEST FINANCIAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
[FIRST MIDWEST FINANCIAL, INC. LETTERHEAD]
December 15, 1997
Dear Fellow Stockholders:
On behalf of the Board of Directors and management of First Midwest
Financial, Inc. ("First Midwest" or the "Company"), we cordially invite you to
attend the Annual Meeting of Stockholders of First Midwest. The meeting will be
held at 1:00 P.M. local time, on January 26, 1998 at the main office of the
Company located at Fifth at Erie, Storm Lake, Iowa.
The attached Notice of Annual Meeting of Stockholders and Proxy
Statement discusses the business to be conducted at the Meeting. We have also
enclosed a copy of the Company's Annual Report to Stockholders. At the meeting
we will report on the Company's operation and outlook for the year ahead.
We encourage you to attend the meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy card and return it in the
accompanying postpaid return envelope as promptly as possible. This will save
First Midwest the additional expense of soliciting proxies and will ensure that
your shares are represented at the meeting.
Your Board of Directors and management are committed to the continued
success of First Midwest Financial, Inc., and the enhancement of your
investment. As Chairman of the Board, President and Chief Executive Officer, I
want to express my appreciation for your confidence and support.
Very truly yours,
/s/James S. Haahr
-----------------
JAMES S. HAAHR
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
FIRST MIDWEST FINANCIAL, INC.
Fifth at Erie
Storm Lake, Iowa 50588
(712) 732-4117
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on January 26, 1998
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of First Midwest Financial, Inc. ("First Midwest" or the "Company")
will be held at the main office of the Company located at Fifth at Erie, Storm
Lake, Iowa on January 26, 1998 at 1:00 P.M. local time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the
election of two directors of the Company and such other matters as may properly
come before the Meeting or any adjournments thereof. The Board of Directors is
not aware of any other business to come before the Meeting.
Any action may be taken on the foregoing proposal at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on December 1, 1997
are the stockholders entitled to vote at the Meeting, and any adjournments
thereof.
You are requested to complete and sign the enclosed Proxy Card which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors
/s/James S. Haahr
JAMES S. HAAHR
Chairman of the Board, President and
Chief Executive Officer
Storm Lake, Iowa
December 15, 1997
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
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<PAGE>
PROXY STATEMENT
FIRST MIDWEST FINANCIAL, INC.
Fifth at Erie
Storm Lake, Iowa 50588
(712) 732-4117
ANNUAL MEETING OF STOCKHOLDERS
January 26, 1998
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of First Midwest Financial, Inc. ("First
Midwest," and with its subsidiaries, the "Company") of proxies to be used at the
Annual Meeting of Stockholders of First Midwest (the "Meeting") which will be
held at the main office of First Midwest located at Fifth at Erie, Storm Lake,
Iowa on January 26, 1998 at 1:00 P.M. local time, and all adjournments of the
Meeting. The accompanying Notice of Meeting, proxy and this Proxy Statement are
first being mailed to stockholders on or about December 15, 1997. Certain
information provided herein relates to First Federal Savings Bank of the Midwest
("First Federal") and Security State Bank ("Security", and when referred to with
First Federal, the "Banks"), both of which are wholly owned subsidiaries of
First Midwest.
At the Meeting, stockholders of the First Midwest are being asked to
consider and vote upon the election of two directors.
Proxies and Proxy Solicitation
If a stockholder properly executes the enclosed proxy distributed by
First Midwest, the proxies named will vote the shares represented by that proxy
at the Meeting. Where a stockholder specifies a choice, the proxy will be voted
in accordance with the stockholder's instructions. Where no specific direction
is given, the proxies will vote the shares "FOR" the election of management's
nominees for directors of First Midwest. As to any other matters presented at
the Meeting, the shares for which proxies have been received will be voted in
accordance with the discretion of the proxies.
Any proxy given pursuant to this solicitation or otherwise may be
revoked by the stockholder giving it at any time before it is voted by
delivering to the Secretary of First Midwest at the above address, on or before
the taking of the vote at the Meeting, a written notice of revocation bearing a
later date than the proxy or a later dated proxy relating to the same shares of
common stock, par value $.01 per share, of First Midwest (the "Common Stock"),
or by attending the Meeting and voting in person. Attendance at the Meeting will
not in itself constitute the revocation of a proxy.
The cost of solicitation of proxies will be borne by First Midwest.
First Midwest will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and employees of First Midwest and the Banks may solicit
proxies personally or by facsimile, telegraph or telephone, without additional
compensation.
<PAGE>
Voting Rights; Vote Required
Stockholders of record as of the close of business on December 1, 1997
(the "Voting Record Date"), will be entitled to one vote on each matter
presented for a vote at the Meeting for each share of Common Stock then held.
Such vote may be exercised in person or by a properly executed proxy as
discussed above. Directors shall be elected by a plurality of the shares present
in person or represented by proxy at the Meeting and entitled to vote on the
election of directors.
With regard to the election of directors, votes may be cast in favor of
or withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on any other
proposal except the election of directors and will be counted as present for
purposes of the item on which the abstention is noted. A broker non-vote (i.e.,
proxies from brokers or nominees indicating that such persons have not received
instructions from the beneficial owners or other persons as to certain proposals
on which such beneficial owners or persons are entitled to vote their shares but
with respect to which the brokers or nominees have no discretionary power to
vote without such instructions) will have no effect on the outcome of the
election of directors. Brokers who do not receive instructions are entitled to
vote on the election of directors.
Voting Securities and Principal Holders Thereof
As of the Voting Record Date, First Midwest had 2,696,889 shares of
Common Stock outstanding. The following table sets forth information regarding
share ownership of: (i) those persons or entities known by management to
beneficially own more than five percent of First Midwest's Common Stock and (ii)
all directors and officers as a group. See "Proposal I - Election of Directors"
for information regarding share ownership of First Midwest's Chief Executive
Officer and its Directors.
<TABLE>
<CAPTION>
Beneficial Shares Beneficially Percent of
Owners Owned(1) Class
------ -------- -----
<S> <C> <C>
First Midwest Financial, Inc.(2) 220,825 8.19%
Employee Stock Ownership Plan
Fifth at Erie
Storm Lake, Iowa 50588
Mr. and Mrs. James S. Haahr(3) 276,045 9.77%
Fifth At Erie
Storm Lake, Iowa 50588
Directors and executive officers of First Midwest 838,421 28.33%
and the Bank as a group (9 persons)(4)
- -------------
</TABLE>
<PAGE>
(1) All amounts reported hereunder have been adjusted for the three for two
stock split paid by First Midwest on January 2, 1997 in the form of a 50%
stock dividend.
(2) The amount reported represents shares held by First Midwest Financial, Inc.
Employee Stock Ownership Plan ("ESOP"), 135,745 shares of which were
allocated to accounts of participants. West Des Moines State Bank, West Des
Moines, Iowa, the trustee of the ESOP, may be deemed to beneficially own
the shares held by the ESOP which have not been allocated to the accounts
of participants.
(3) Mr. Haahr is the Chairman of the Board, President and Chief Executive
Officer of First Midwest and the Banks. Mr. Haahr reported sole voting and
investment power with respect to all 276,045 shares of Common Stock
reported as beneficially owned by him. Included in the shares reported as
beneficially owned by Mr. Haahr are options to purchase 129,532 shares of
Common Stock.
(4) Includes shares held directly, as well as, jointly with family members or
held by trusts, with respect to which shares the listed individuals or
group members may be deemed to have sole or shared voting and investment
power. Included in the shares reported as beneficially owned by all
directors and executive officers are options to purchase 262,347 shares of
Common Stock.
ELECTION OF DIRECTORS
General
The Board of Directors of First Midwest is currently composed of seven
members and is divided into approximately three equal classes. Directors of
First Midwest are generally elected to serve for a three-year term or until
their respective successors are elected and qualified.
The following table sets forth certain information, as of the Voting
Record Date, regarding the composition of First Midwest's Board of Directors,
including each director's term of office. The Board of Directors acting as the
nominating committee has recommended and approved the nominees identified in the
following table. It is intended that the proxies solicited on behalf of the
Board of Directors (other than proxies in which the vote is withheld as to a
nominee) will be voted at the Meeting FOR the election of the nominees. If a
nominee is unable to serve, the shares represented by all valid proxies will be
voted for the election of such substitute nominee as the Board of Directors may
recommend. At this time, the Board of Directors knows of no reason why any
nominee may be unable to serve if elected. Except as disclosed herein, there are
no arrangements or understandings between the nominee and any other person
pursuant to which the nominee was selected.
<PAGE>
<TABLE>
<CAPTION>
Term Shares of Percent
Position(s) Held in Director to Common Stock of
Name Age First Midwest Since(1) Expire Owned(2) Class
---- --- ------------- -------- ------ -------- -----
<S> <C> <C> <C> <C> <C> <C>
Nominees
E. Wayne Cooley 75 Director 1985 2001 93,117 3.42%
J. Tyler Haahr(3) 34 Director, Senior Vice 1992 2001 44,421(4) 1.64%
President, Secretary and
Chief Operating Officer
Directors Remaining in Office
James S. Haahr(3) 58 Chairman of the Board, 1962 2000 276,045 9.77%
President and Chief
Executive Officer
G. Mark Mickelson 31 Director 1997 2000 1,000 0.04%
Jeanne Partlow 64 Director 1996 2000 4,485(5) 0.17%
E. Thurman Gaskill 62 Director 1982 1999 53,914(6) 1.98%
Rodney G. Muilenburg 53 Director 1989 1999 123,249 4.52%
- ----------------------
</TABLE>
(1) Includes service as a director of First Federal.
(2) The nature of beneficial ownership for shares reported in this column is
sole voting and investment power, except as otherwise noted in these
footnotes. All amounts reported hereunder have been adjusted for the three
for two stock split paid by First Midwest on January 2, 1997 in the form of
a 50% stock dividend. Included in the shares beneficially owned by the
named individuals are options to purchase shares of Common Stock as
follows: Mr. Cooley - 28,764 shares; Mr. J. Tyler Haahr - 9,291 shares; Mr.
James S. Haahr - 129,532 shares; Mr. Gaskill - 26,264 shares; and Mr.
Muilenburg - 28,764 shares.
(3) Director J. Tyler Haahr is the son of Chairman James S. Haahr.
(4) Includes 31,708 shares as to which Mr. J. Tyler Haahr has reported shared
ownership.
(5) Includes 4,485 shares as to which Ms. Partlow has reported shared
ownership.
(6) Includes 26,750 shares as to which Mr. Gaskill has reported shared
ownership.
<PAGE>
The principal occupation of each director of First Midwest and each of
the nominees for director is set forth below. All directors and nominees have
held their present position for at least five years unless otherwise indicated.
E. Wayne Cooley - Dr. Cooley has served as Executive Secretary of the
Iowa Girls' High School Athletic Union in Des Moines, Iowa since 1954. In
addition, Dr. Cooley serves as Executive Vice President of the Iowa High School
Speech Association. He is also a member of the Drake Relays Executive Committee,
and on the Board of Directors of the Women's College Basketball Association Hall
of Fame. Dr. Cooley is a member of the Buena Vista University (formerly Buena
Vista College) Board of Trustees. He has served as Chairman of the Iowa Heart
Association and as Vice Chairman of the Iowa Games. Dr. Cooley is a 1943
graduate of Buena Vista College in Storm Lake, Iowa, and holds honorary
doctorate degrees from Buena Vista University in Storm Lake, Iowa and
Morningside College in Sioux City, Iowa.
J. Tyler Haahr - Mr. Haahr is Senior Vice President, Secretary and
Chief Operating Officer of First Midwest Financial, Inc.; Executive Vice
President, Secretary and Chief Operating Officer of First Federal Savings Bank
of the Midwest; Vice President and Secretary of First Services Financial Limited
and Brookings Service Corporation; and Secretary of Security State Bank. Mr.
Haahr has been employed by First Midwest and its affiliates since March 1997. He
was previously a partner with the law firm of Lewis and Roca LLP, Phoenix,
Arizona, and had been with the firm since 1989. He is a member of the Arizona
Bar Association, the Maricopa County Bar Association and the Arizona Association
of Health Care Lawyers. Mr. Haahr is the Co-chair for Buena Vista University's
1997-98 Community Campaign Fund-raising. He is a member of the Fiesta Bowl
Committee and was one of the founders of the Grand Canyon State Games. Mr. Haahr
received his B.S. degree with honors in 1986 at the University of South Dakota
in Vermillion, South Dakota. He graduated with honors from the Georgetown
University Law Center, Washington, D.C., in May 1989. J. Tyler Haahr is the son
of James S. Haahr, Chairman of the Board.
James S. Haahr - Mr. Haahr is the Chairman of the Board, President and
Chief Executive Officer of First Midwest Financial Inc., a position he has held
since June 1993. Mr. Haahr is also Chairman of the Board of First Federal
Savings Bank of the Midwest since 1990 and President and Chief Executive Officer
since 1974. Mr. Haahr serves as Chairman of the Board and Chief Executive
Officer of Security State Bank. He is a member of the Board of Trustees of Buena
Vista University. Mr. Haahr has served in various capacities since beginning his
career with the Bank in 1961. He is a member of the Board of Directors of
America's Community Bankers and a member of the Savings Association Insurance
Fund Industry Advisory Committee. Mr. Haahr is a former Vice Chairman of the
Board of Directors of the Federal Home Loan Bank of Des Moines, former Chairman
of the Iowa League of Savings Institutions, and a former director of the U.S.
League of Savings Institutions. Mr. Haahr received his B.S. degree in 1962 from
Buena Vista College in Storm Lake, Iowa. James S. Haahr is the father of J.
Tyler Haahr, a director and executive officer of the Company.
G. Mark Mickelson - G. Mark Mickelson has served as a Vice President
(Acquisitions) for Northwestern Growth Corporation in Sioux Falls, South Dakota
since November 1996. Northwestern Growth Corporation is the unregulated
investment subsidiary of Northwestern Public Service (NYSE: NPS). Previously,
Mr. Mickelson was employed as an executive officer of Hegg Companies in Sioux
Falls, South Dakota. Mr. Mickelson received his undergraduate degree in Business
Administration from the University of South Dakota in Vermillion, South Dakota
in 1988. He graduated with high honors from Harvard Law School in 1993 and is
also a Certified Public Accountant. Mr. Mickelson is involved in a number of
local charities, including serving on the board of the Sioux Falls Y.M.C.A.
<PAGE>
Jeanne Partlow - Mrs. Partlow is President of the Iowa Savings Bank
Division of First Federal, located in Des Moines Iowa. She was President, Chief
Executive Officer and Chairman of the Board of Iowa Savings Bank, F.S.B. from
1987 until it was acquired by and became a division of First Federal in December
1995. Mrs. Partlow is a past member of the Board of Directors of the Federal
Home Loan Bank of Des Moines. She has over 30 years of bank management
experience.
E. Thurman Gaskill - Since 1958, Mr. Gaskill has owned and operated a
grain farming operation located near Corwith, Iowa. Mr. Gaskill has served as a
commissioner with the Iowa Department of Economic Development and also as a
commissioner with the Iowa Department of Natural Resources. He has served as
President of the National Corn Growers Association, Chairman of the United
States Feed Grains Council and in numerous other agricultural positions.
Recognized for his outstanding contributions to the industry, he has been named
to the Agricultural Hall of Fame at Iowa State University in Ames, Iowa.
Rodney G. Muilenburg - Mr. Muilenburg is employed as a dairy specialist
with Purina Mills, Inc., and supervises the sale of agricultural products in a
region which encompasses northwest Iowa, northeast Nebraska, eastern South
Dakota and southwest Minnesota. Mr. Muilenburg has been a member of Purina
Mills' General Sales Advisory Board since 1986. In 1991 he was certified by
Purina Mills in Agri-business management. Mr. Muilenburg received a B.A. degree
in Biological Science from Northwestern College, Orange City, Iowa in 1966; an
M.A. degree in secondary school education from Mankato State University,
Mankato, Minnesota in 1973; and a specialist degree in secondary school
administration from Mankato State University, Mankato, Minnesota in 1975.
Meetings and Committees of the Boards of Directors
Meetings and Committees of First Midwest. Meetings of the Board of
Directors are generally held on a monthly basis. The Board of Directors met 12
times during fiscal 1997. During fiscal 1997, no incumbent director of First
Midwest attended fewer than 75% of the aggregate of the total number of Board
meetings and the total number of meetings held by the committees of the Board of
Directors on which they served.
The Board of Directors of First Midwest has standing
Audit-Compensation/Personnel ("ACP") and Stock Option Committees. First Midwest
does not have a standing executive committee.
The ACP Committee recommends the selection of independent auditors to
the Board, reviews the results of the auditors' services, reviews with
management and the internal auditors the systems of internal control and
internal audit reports and assures that the books and records of the Company are
kept in accordance with applicable accounting principles and standards. In
addition, the committee meets annually to make salary recommendations and
administer the Recognition and Retention Plan. The members of the ACP Committee
are Directors Cooley, Gaskill and Muilenburg. This Committee met three times
during fiscal 1997.
The Stock Option Committee is composed of Directors Cooley, Mickelson
and Muilenburg. This committee is responsible for administering First Midwest's
1993 and 1995 Stock Option and Incentive Plans (collectively, the "Stock Option
Plans"). This committee met twice during fiscal 1997.
The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. Nominations of persons for
election to the Board of Directors may be made only by or at the direction of
<PAGE>
the Board of Directors or by any stockholder entitled to vote for the election
of directors who complies with the notice procedures set forth in the Bylaws of
First Midwest. Pursuant to the Bylaws, nominations by stockholders must be
delivered in writing to the Secretary of First Midwest at least 30 days prior to
the date of the annual meeting.
Directors Fees
During fiscal 1997 all directors of First Midwest received a retainer
fee of $3,000 per year. The directors of First Midwest (except for Director
Partlow) also serve as directors of either one or both of the Banks.
Non-employee directors of First Federal were paid a fee of $6,000 per year plus
$500 for each regular meeting attended, and $200 for each committee meeting
attended, with the exception of the Nominating Committee members, who receive no
fee for service on such committee. Non-employee directors of Security were paid
a fee of $300 for each regular meeting attended and $100 for each committee
meeting attended, with the exception of the Nominating Committee members, who
receive no fee for service on such committee. Board members who are employees of
the Banks received no fee for their service on the Banks' Boards, or their
respective committees.
Executive Compensation
The following table sets forth information regarding the compensation
of First Midwest's Chief Executive Officer and each other executive officer of
the Company whose aggregate salary and bonus exceeded $100,000 during fiscal
1997 (collectively, the "Named Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
----------------------------------- -----------------------
Restricted
Name and Other Annual Stock Options/ All Other
Principal Salary Bonus Compensation Award(s) SARs Compensation
Position Year ($) ($) ($) ($) (#) ($)
-------- ---- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
James S. Haahr 1997 $180,000(1) $56,000 --- --- 5,250 $ 33,011(2)
Chairman of the Board, 1996 180,000(1) 45,500 --- --- 23,250 24,883
President and Chief 1995 155,000(1) 30,000 --- --- 1,575 40,328
Executive Officer
J. Tyler Haahr(3) 1997 80,662(4) 22,400 $35,587(5) --- 39,600 887(6)
Senior Vice President,
Chief Operating Officer
and Secretary
Fred A. Stevens 1997 105,000 33,600 --- --- 3,150 21,277(7)
President of Storm Lake 1996 105,000 27,300 --- --- 5,025 15,519
Division of First Federal 1995 97,000 19,400 --- --- 1,018 25,379
Donald J. Winchell 1997 103,000 32,960 --- --- 3,090 20,754(8)
Vice President, Chief 1996 103,000 26,780 --- --- 10,215 14,949
Financial Officer and 1995 90,000 18,000 --- --- 945 23,503
Treasurer
</TABLE>
<PAGE>
(1) Includes $2,000 of compensation deferred in fiscal 1995 ,1996 and 1997
pursuant to the deferred compensation agreement entered into in 1980
between Mr. Haahr and First Federal and $3,000 paid to Mr. Haahr in fiscal
1995, 1996 and 1997 for service as a director of the Company.
(2) Includes contributions by First Federal on behalf of Mr. Haahr for fiscal
1997 of $23,096 under the ESOP and $9,159 under First Federal's Benefit
Equalization Plan. This amount also includes $756 of life insurance
premiums paid on behalf of Mr. Haahr by First Federal for fiscal 1997.
(3) Mr. Haahr joined the Company as an employee in March 1997.
(4) Includes $3,000 paid to Mr. Haahr for service as a director of the Company
and $8,200 paid to Mr. Haahr for service as a director of the Banks during
fiscal 1997.
(5) Includes $10,634 in reimbursed relocation expenses and $24,688 in real
estate fees paid on the sale of Mr. Haahr's residence in connection with
his employment with the Company. No other amounts required to be reported
hereunder individually exceeds 25% of the value of the total amount
reported.
(6) Includes $252 of life insurance premiums paid on behalf of Mr. Haahr by
First Federal and $635 of sales commissions earned by Mr. Haahr.
(7) Includes contributions by First Federal on behalf of Mr. Stevens for
fiscal 1997 of $20,823 under the ESOP and $454 of life insurance premiums.
(8) Includes contributions by First Federal on behalf of Mr. Winchell for
fiscal 1997 of $20,309 under the ESOP and $445 of life insurance premiums.
<PAGE>
The following table sets forth certain information concerning stock
options granted during fiscal 1997 to the Named Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed Annual
Rates of Stock
Appreciation
Individual Grants(1) for Option Terms(2)
--------------------------------------------------------------- -----------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Granted Employees in Price Expiration 5% 10%
Name (#) Fiscal Year ($/Sh) Date ($) ($)
---- --- ----------- ------ ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
James S. Haahr 5,250 7.5% $20.125 09-30-07 $ 66,439 $ 168,394
J. Tyler Haahr 37,500 53.6 17.375 03-25-07 409,688 1,038,563
2,100 3.0 20.125 09-30-07 26,576 67,358
Fred A. Stevens 3,150 4.5 20.125 09-30-07 39,863 101,036
Donald J. Winchell 3,090 4.4 20.125 09-30-07 39,104 99,112
- ------------------
</TABLE>
(1) All the options set forth in this table vested as of the date of the grant,
except for the options to purchase 37,500 shares of Common Stock granted to
J. Tyler Haahr which vest in four equal annual installments commencing March
25, 1998.
(2) Represents the potential realizable value of the option grant assuming that
the market price of the underlying security appreciates in value from the
date of the grant to the end of the option term (10 years) at the annualized
rates as set forth in the table above.
<PAGE>
The following table provides information as to the value of the options
held by the Named Officers on September 30, 1997. To date, no stock appreciation
rights have been granted by First Midwest.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares FY-End (#) FY-End ($)(1)
Acquired on Value --------------------------- ----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James S. Haahr 3,000 $ 28,250 131,632 --- $1,485,950 ---
J. Tyler Haahr 21,573 203,145 9,291 37,500 96,779 $103,125
Fred A. Stevens 3,300 31,625 18,400 --- 153,653 ---
Donald J. Winchell 2,100 19,775 24,732 --- 194,710 ---
- -------------------
</TABLE>
(1) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the option granted based upon the average of
the closing bid and the asked price of $20.125 per share of the Common
Stock as reported on The Nasdaq Stock Market on September 30, 1997.
Employment Agreements
First Federal has employment agreements with the Named Officers. The
employment agreements are designed to assist the Company in maintaining a stable
and competent management team. The continued success of the Company depends, to
a significant degree, on the skills and competence of their officers. Each
employment agreement provides for annual base salary in an amount not less than
the employee's current salary and a term of three years. Each agreement provides
for extensions of one year, in addition to the then-remaining term under the
agreement, on each anniversary of the effective date of the agreement, subject
to a formal performance evaluation performed by disinterested members of the
Board of Directors of First Federal. The agreements terminate upon such Named
Officer's death, for cause, in certain events specified by OTS regulations, or
by such Named Officer upon 90 days notice to First Federal. For the year ended
September 30, 1997, the disinterested members of First Federal's Board of
Directors authorized one year extensions of the Named Officers' employment
agreements.
<PAGE>
Each employment agreement provides for payment to the employee of the
greater of his salary for the remainder of the term of the agreement, or 299% of
the employee's base compensation, in the event there is a "change in control" of
First Federal where employment terminates involuntarily in connection with such
change in control or within 12 months thereafter. This termination payment is
subject to reduction by the amount of all other compensation to the employee
deemed for purposes of the Internal Revenue Code of 1986, as amended (the
"Code"), to be contingent on a "change in control", and may not exceed three
times the employee's average annual compensation over the most recent five year
period or be non-deductible by the Company for federal income tax purposes. For
the purposes of the employment agreements, a change in control is defined as any
event which would require the filing of an application for acquisition of
control or notice of change in control pursuant to 12 C.F.R. ss. 574.3 or ss.
574.4, respectively. Such events are generally triggered prior to the
acquisition or control of 10% of First Midwest's Common Stock. Each agreement
also guarantees participation in an equitable manner in employee benefits
applicable to executive personnel.
Based on their current salaries, if employment of Messrs. J. Haahr, T.
Haahr, Stevens and Winchell had been terminated as of September 30, 1997, under
circumstances entitling them to benefits pay as described above, they would have
been entitled to receive lump sum cash payments of approximately $903,000,
$663,000, $655,000 and $621,000, respectively.
Compensation Committee Interlocks and Insider Participation
Compensation of the executive officers of the Company is currently
determined by the ACP Committee of First Federal and the Stock Option Committee
of the Company. Directors Cooley, Mickelson and Muilenburg are the current
members of these two committees. All decisions by the ACP Committee relating to
the cash compensation of executive officers are reviewed by the full Board,
except that Board members who are also executive officers do not participate in
deliberations regarding their respective compensation. See "Compensation
Committee Report on Executive Compensation" below.
Compensation Committee Report on Executive Compensation
First Midwest has not paid any cash compensation to its executive
officers since its formation. All executive officers of First Midwest also
currently hold positions with First Federal and receive cash compensation from
First Federal. The function of administering the executive compensation policies
of First Federal is currently performed by the ACP Committee of the Board of
Directors of First Federal, consisting of Directors Cooley, Mickelson and
Muilenburg. All decisions by the ACP Committee relating to the cash compensation
of First Federal's executive officers are reviewed by the full Board of First
Federal, except that Board members who are also executive officers do not
participate in deliberations regarding their respective compensation.
Awards granted under First Midwest's Stock Option Plans are made solely
by the Stock Option Committee.
Overview and Philosophy
The ACP Committee has developed and implemented an executive
compensation program that is based on guiding principles designed to align
executive compensation with the values and objectives, business strategy,
management initiatives, and the business and financial performance of the
Company. In applying these principals, the ACP Committee has established a
program to:
<PAGE>
Support a performance-oriented environment that rewards performance
not only with respect to the Company's goals, but also the Company's
performance as compared to that of industry performance levels;
Attract and retain key executives critical to the long-term success
of the Company;
Integrate compensation programs with both the Company's annual and
long-term strategic planning and measuring processes; and
Reward executives for long-term strategic management and the
enhancement of shareholder value.
Furthermore, in making compensation decisions, the ACP Committee
focuses on the individual contributions of executive officers to the Company.
The ACP Committee uses its discretion to set executive compensation where, in
its judgement, external, internal or an individual's circumstances warrant it.
The ACP Committee also periodically reviews the compensation policies of other
similarly situated companies, as set forth in various industry publications, to
determine whether the Company's compensation decisions are competitive within
its industry.
Executive Officer Compensation Program
The executive officer compensation program is comprised of base salary,
annual incentive bonuses, long-term incentive compensation in the form of stock
options and restricted stock awards, and various benefits, including medical and
retirement plans generally available to employees of the Banks.
Base Salary. Base salary levels for executive officers are
competitively set relative to other publicly traded banking and thrift
companies. In determining base salaries, the ACP Committee also takes into
account individual experience and performance and specific issues particular to
the Company.
Annual Incentive Bonuses. Executive officers are paid an annual
incentive bonus, which is determined as a percentage of such executive officers'
base salary, if the Company's targeted goals (including its targeted goals for
return on assets, return on equity, asset quality and interest rate risk
exposure) established at the beginning of the year are met and certain safety
and soundness standards at the Bank level are maintained.
Stock Benefit Plans. The Stock Option Plans are the Company's long-term
incentive plans for directors, officers and employees. The objective of the
program is to align executive and shareholder long-term interests by creating a
strong and direct link between executive pay and the Company's performance, and
to enable executives to develop and maintain a significant, long-term stock
ownership position in the Company's Common Stock. Awards are made at a level
calculated to be competitive with other publicly traded banking and thrift
companies.
Chief Executive Officer Compensation
Mr. James S. Haahr was appointed to the position of President and Chief
Executive Officer of First Federal in 1974 and Chairman in 1990, and has also
served in such capacities with the Company since its inception in 1993. Mr.
Haahr's fiscal 1998 base salary is approximately $175,000 per year, subject to
<PAGE>
such adjustments in future years as shall be determined by the ACP Committee.
Mr. Haahr's base salary for fiscal 1997 was approximately $175,000. The ACP
Committee determined to maintain Mr. Haahr's current year base salary at the
same level as last year due to the Company's continued focus on incentive-based
compensation, with the use of long-term incentive awards as an integral part of
the overall compensation program.
Mr. Haahr was awarded a cash bonus in September 1997 of approximately
$56,000 and was granted a long-term incentive award consisting of options to
purchase 5,250 shares of the Company's Common Stock. These awards were
determined by the ACP Committee after consideration of Mr. Haahr's contribution
to the Company's fiscal 1997 performance relative to predetermined targeted
goals for return on equity, return on assets, asset quality and interest rate
risk exposure, and in recognition of Mr. Haahr's anticipated future performance.
In 1993, Section 162(m) was added to the Internal Revenue Code, the
effect of which is to eliminate the deductibility of compensation over $1
million, with certain exclusions, paid to each of certain highly compensated
executive officers of publicly held corporations, such as the Company. Section
162(m) applies to all remuneration (both cash and non-cash) that would otherwise
be deductible for tax years beginning on or after January 1, 1994, unless
expressly excluded. Because the current compensation of each of the Company's
and the Bank's executive officers is well below the $1 million threshold, the
Company has not yet considered its policy regarding the new provision.
The foregoing report is furnished by the members of the
Audit-Compensation\Personnel Committee and Stock Option Committee of the Board
of Directors of the Company.
E Wayne Cooley G. Mark Mickelson Rodney G. Muilenberg
Shareholder Return Performance Presentation
The line graph below compares the cumulative total shareholder return
on the Company's Common Stock to the cumulative total return of a broad index of
the Nasdaq Market and a savings and loan industry index for the period
commencing on September 20, 1993 (the date the Company became a public company)
through September 30, 1997.
[GRAPHIC-GRAPH PLOTTED TO POINTS LISTED BELOW]
<TABLE>
<CAPTION>
09/20/93 09/30/93 09/30/94 09/30/95 09/30/96 09/30/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
First Midwest Financial, Inc..... $100.00 $106.78 $106.78 $138.04 $170.65 $214.18
Selected Thrift Index............ 100.00 100.00 105.04 135.01 162.16 275.17
Nasdaq Market Index.............. 100.00 100.00 105.82 128.48 150.00 203.88
</TABLE>
<PAGE>
Certain Transactions
The Banks have followed a policy of granting loans to eligible
directors, officers, employees and members of their immediate families for the
financing of their personal residences and for consumer purposes. As of
September 30, 1997, all loans or extensions of credit to executive officers and
directors were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
the general public and do not involve more than the normal risk of repayment or
present other unfavorable features.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires First Midwest's directors and executive officers, and
persons who own more than 10% of a registered class of First Midwest's equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of First Midwest common stock and other equity securities
of First Midwest by the tenth of the month following a change. Officers,
directors and greater than 10% stockholders are required by SEC regulations to
furnish First Midwest with copies of all Section 16(a) forms they file.
To First Midwest's knowledge, based solely on a review of the copies of
such reports furnished to First Midwest and written representations that no
other reports were required during the fiscal year ended September 30, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with.
INDEPENDENT AUDITORS
The Company's independent auditors are Crowe, Chizek and Company LLP.
Representatives of Crowe, Chizek and Company LLP are expected to attend First
Midwest's Annual Meeting to respond to appropriate questions and to make a
statement if they so desire.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the First Midwest's proxy
materials for the next Annual Meeting of Stockholders, any stockholder proposal
to take action at such meeting must be received at First Midwest's main office,
Fifth at Erie, Storm Lake, Iowa no later than August 17, 1998. Any such proposal
shall be subject to the requirements of the proxy rules adopted under the
Exchange Act.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
<PAGE>
REVOCABLE PROXY
FIRST MIDWEST FINANCIAL, INC.
[ ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 26, 1998
The undersigned hereby appoints the members of the Board of Directors of First
Midwest Financial, Inc. (the "Company"), and its survivor, with full power of
substitution, to act as attorneys and proxies for the undersigned to vote all
shares of common stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held on January 26,
1998 at the Company's main office located at Fifth at Erie, Storm Lake, Iowa, at
1:00 P.M. local time, and at any and all adjournments thereof, as follows:
1. The election of E. Wayne Cooley and J. Tyler Haahr as directors for terms of
three years.
[ ] FOR [ ] WITHHOLD [ ] EXCEPT
INSTRUCTIONS: To vote for all nominees mark the box "FOR" with an "X". To
withhold your vote for all nominees mark the box "WITHHOLD" with an "X". To
withhold your vote for an individual nominee mark the box "FOR ALL EXCEPT" with
an "X" and write the name of the nominee on the line provided below for whom you
wish to withhold your vote.
- --------------------------------------------------------------------------------
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposal.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE STATED PROPOSAL. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
The stockholder acknowledges receipt from the Company, prior to the execution of
this Proxy, of Notice of the Meeting, a Proxy Statement dated on or about
December 15, 1997 and the Company's Annual Report to Stockholders for the fiscal
year ended September 30, 1997.
<PAGE>
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
FIRST MIDWEST FINANCIAL, INC.
This proxy may be revoked at any time before it is voted by delivering to the
Secretary of the Company, on or before the taking of the vote at the Meeting, a
written notice of revocation bearing a later date than the proxy or a later
dated proxy relating to the same shares of Company common stock, or by attending
the Meeting and voting in person. Attendance at the Meeting will not in itself
constitute the revocation of a proxy. Any written notice revoking this proxy
should be delivered to Fred A. Stevens, Secretary, First Midwest Financial,
Inc., Fifth at Erie, Storm Lake, Iowa 50588. If this proxy is properly revoked
as described above, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
