Exhibit 10.5
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
Effective as of December 1, 1997
All Rights Reserved
Copyright 1997,
Ernst & Young LLP
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
Table of Contents
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ARTICLE I - GENERAL
Section 1.1 Effective Date........................................ 1
Section 1.2 Purpose............................................... 1
Section 1.3 Intent................................................ 1
ARTICLE II - DEFINITIONS AND USAGE
Section 2.1 Definitions........................................... 2
Section 2.2 Usage................................................. 3
ARTICLE III - ELIGIBILITY AND PARTICIPATION
Section 3.1 Eligibility........................................... 3
Section 3.2 Participation......................................... 3
Section 3.3 Deferral Election Procedures.......................... 4
Section 3.4 Stock-for-Stock Payment Method........................ 4
ARTICLE IV - PARTICIPANT ACCOUNTS
Section 4.1 Accounts.............................................. 5
Section 4.2 Participant Deferrals................................. 5
Section 4.3 Investment Procedure.................................. 5
Section 4.4 Valuation of Accounts................................. 5
ARTICLE V - PAYMENT OF BENEFITS
Section 5.1 Entitlement to Benefit Payments....................... 6
Section 5.2 Commencement of Benefit Payments...................... 6
Section 5.3 Hardship Withdrawals.................................. 6
ARTICLE VI - PAYMENT OF BENEFIT ON OR AFTER DEATH
Section 6.1 Commencement of Payments After Death.................. 7
Section 6.2 Designation of Beneficiary............................ 7
ARTICLE VII - ADMINISTRATION
Section 7.1 General............................................... 7
Section 7.2 Administrative Rules.................................. 7
Section 7.3 Duties................................................ 7
Section 7.4 Fees.................................................. 8
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ARTICLE VIII - CLAIMS PROCEDURE
Section 8.1 General............................................... 8
Section 8.2 Denials............................................... 8
Section 8.3 Notice................................................ 8
Section 8.4 Appeals Procedure..................................... 9
Section 8.5 Review................................................ 9
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 9.1 Amendment............................................. 9
Section 9.2 Termination........................................... 9
Section 9.3 No Assignment......................................... 9
Section 9.4 Incapacity............................................ 9
Section 9.5 Successors and Assigns................................ 10
Section 9.6 Governing Law......................................... 10
Section 9.7 No Guarantee of Employment............................ 10
Section 9.8 Severability.......................................... 10
Section 9.9 Notification of Addresses............................. 10
ARTICLE X - ADOPTING EMPLOYERS
Section 10.1 Adoption of Plan...................................... 10
Section 10.2 Administration........................................ 10
Section 10.3 Company as Agent...................................... 11
Section 10.4 Termination........................................... 11
ARTICLE XI - TRUST
Section 11.1 Trust................................................. 11
Section 11.2 Contributions and Expenses............................ 11
Section 11.3 Trustee Duties........................................ 11
Section 11.4 Voting Rights......................................... 11
Section 11.5 Reversion to the Company.............................. 12
APPENDIX A
APPENDIX B
ii
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
WHEREAS, First Midwest Bancorp, Inc. ("the Company") has heretofore established
the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan, as
Amended (the "Stock Plan") for its Employees; and
WHEREAS, the Company recognizes the unique qualifications of key employees and
the valuable services that they have provided; and
WHEREAS, the Company desires to increase Company stock ownership by facilitating
the deferral of gains resulting from the exercise of Company nonqualified stock
Options;
NOW, THEREFORE, the Company hereby establishes the First Midwest Bancorp, Inc.
Nonqualified Stock Option - Gain Deferral Plan (the "Plan") as hereinafter
provided:
ARTICLE I
GENERAL
1.1 Effective Date. The provisions of the Plan shall be effective as of
December 1, 1997 (the "Effective Date"). The rights, if any, of any person
whose status as an Employee of the Company and its subsidiaries and
affiliates, if any, has terminated shall be determined pursuant to the Plan
as in effect on the date such Employee terminated, unless a subsequently
adopted provision of the Plan is made specifically applicable to such
person.
1.2 Purpose. The purpose of the Plan is to increase Company stock ownership by
facilitating the deferral of gains resulting from the exercise of Company
nonqualified stock Options.
1.3 Intent. The Plan is intended to be (and shall be construed and
administered as) an "employee pension benefit plan" under the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA") which is
unfunded and maintained by the Company or an Employer solely to provide
retirement income to a select group of management or highly compensated
Employees as such group is described under section 201(2), 301(a)(3), and
401(a)(1) of ERISA as interpreted by the U.S. Department of Labor. The Plan
is not intended to be a plan described in section 401(a) of the Code, or
section 3(2)(A) of ERISA. The obligation of the Company and an Employer to
make payments under this Plan constitutes nothing more than an unsecured
promise to make such payments and any property of the Company or an
Employer that may be set aside for the payment of benefits under the Plan
shall in the event of the Company's or Employer's bankruptcy or insolvency,
remain subject to the claims of the Company's general creditors and the
Employer's general creditors, respectively, until such benefits are
distributed in accordance with Article V herein.
1
ARTICLE II
DEFINITIONS AND USAGE
2.1 Definitions. Wherever used in the Plan, the following words and phrases
shall have the meaning set forth below unless the context plainly requires
a different meaning:
. "Account" means the account established on behalf of the Participant
as described in Section 4.1.
. "Administrator" means the person or persons described in Article VII.
. "Board" means the Board of Directors of the Company.
. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
. "Committee" means the Compensation Committee of the Board of Directors
or such other committee appointed from time to time by the Board of
Directors to administer this Plan. The Committee shall consist of two
or more members, each of whom shall qualify as a "non-employee
director," as the term (or similar successor term) is defined by Rule
16b-3, and as an "outside director" within the meaning of Code Section
162(m) and regulations thereunder.
. "Company" means First Midwest Bancorp, Inc. and any successor thereto.
. "Effective Date" means December 1, 1997.
. "Employee" means a regular salaried employee (including officers and
directors who are also employees) of the Company or an Employer, or
any branch or division thereof.
. "Employer" means the Company and any subsidiary or affiliate of the
Company that adopts the Plan for the benefit of its key Employees with
the approval of the Company and in accordance with Article X.
. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
. "Fair Market Value" means the average of the highest and lowest prices
of the Stock as reported by the consolidated tape of the NASDAQ
National Market System on a particular date. In the event that there
are no Stock transactions on such date, the Fair Market Value shall be
determined as of the immediately preceding date on which there were
Stock transactions.
. "Option" means the right to purchase Stock at a stated price for a
specified period of time granted by the Company to an Employee under
the Stock Plan. For purposes of the Plan, an Option shall be a
"Nonstatutory (Nonqualified) Stock Option," or "NSO," as provided for
under the Stock Plan.
. "Participant" means an eligible Employee who is participating in the
Plan in accordance with Section 3.1.
2
. "Plan" means the First Midwest Bancorp, Inc. Nonqualified Stock
Option - Gain Deferral Plan.
. "Plan Year" means the calendar year. Notwithstanding the foregoing,
the initial Plan Year shall be the period beginning on the Effective
Date and ending December 31, 1997.
. "Profit Shares" means, with respect to any exercise of an Option, the
number of shares equal in value to the excess of (i) the Fair Market
Value of the shares of Stock purchased on Option exercise over (ii)
the exercise price of the shares of Stock purchased, divided by the
Fair Market Value of one share of Stock. For purposes of this
definition, Fair Market Value shall be determined as of the date of
Option exercise.
. "Stock" means the common stock, $0.01 par value per share, of the
Company.
. "Stock Plan" means the First Midwest Bancorp, Inc. 1989 Omnibus Stock
and Incentive Plan as Amended, and any other similar or successor plan
established by the Company and under which Employees have been granted
nonqualified stock options.
. "Valuation Date" means the last business day of each Plan Year and
such other dates as determined from time to time by the Administrator.
2.2 Usage. Except where otherwise indicated by the context, any masculine
terminology used herein shall also include the feminine and vice versa, and
the definition of any term herein in the singular shall also include the
plural and vice versa.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. The Committee shall designate from time to time those
Employees who shall participate in the Plan; provided, however, that such
Employees are members of a select group of management or highly compensated
Employees as such group is described under sections 201(2), 301(a)(3), and
401(a)(1) of ERISA as interpreted by the Department of Labor.
3.2 Participation. An Employee shall commence participation in the Plan as of
the date designated by the Committee. The participation of any Participant
may be suspended or terminated by the Committee at any time, but no such
suspension or termination shall operate to reduce the balance of the
Account of the Participant as of the Valuation Date that precedes or
coincides with the date of such suspension or termination without such
Participant's consent. An Employee shall cease to be a Participant when he
terminates employment with the Company and all Employers and the balance in
his Account is distributed to him or on his behalf.
3
3.3 Deferral Election Procedure.
(a) Each Participant may execute one or more Deferral Election Forms as
set out in Appendix A. Each Deferral Election Form shall be treated in
accordance with Section 4.2. In order to be effective with respect to the
exercise of any Option, a Deferral Election Form must be executed by the
Participant: (i) in a calendar year preceding the exercise of such Options;
and (ii) at least six months prior to the exercise of such Options;
provided, however, that a Deferral Election Form executed by a Participant
during the first 30 days following the later of the Effective Date of the
Plan or the participation commencement date designated by the Committee
pursuant to Section 3.2 for such Participant, shall be effective with
respect to the exercise of Options after the date of such Deferral Election
Form without regard to clauses (i) and (ii).
(b) An Agreement shall be effective no earlier than the date on which it
is delivered to the Administrator and shall continue in effect for all
succeeding Plan Years unless otherwise superseded by a subsequent Deferral
Election Form (or Deferral Revocation Form).
3.4 Stock-for-Stock Payment Method. If a Participant has executed a Deferral
Election Form, and such Deferral Election Form is effective under the terms
of the Plan with respect to the Option being exercised, then the Option
price shall be payable to the Company in full solely by tendering shares of
Stock, which have been held for at least six months prior to the date of
the exercise of the Option, having an aggregate Fair Market Value at the
time of exercise equal to the total Option price (including, for this
purpose, Stock deemed tendered by affirmation of ownership). [Shares of
Stock tendered or deemed tendered shall, for purposes of the six month
holding rule, be deemed to be newly-held following use to exercise the
Option and thus cannot be used for a subsequent exercise until six months
have elapsed.] As soon as practicable after receipt of the tendered Stock
or the affirmation of ownership of Stock, the Company shall deliver to the
Trustee, as named pursuant to Article XI of the Plan, a certificate or
certificates representing the Profit Shares generated with respect to the
exercise of any such Option.
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ARTICLE IV
PARTICIPANT ACCOUNTS
4.1 Accounts. The Administrator shall establish and maintain, pursuant to the
terms of the Plan, one or more Accounts for each Participant consisting of
amounts credited to such Account pursuant to Sections 4.2 below. All
amounts which are credited to a Participant's Account shall be credited
solely for purposes of accounting and computation, and shall remain assets
of the Company subject to the claims of the Company's general creditors. A
Participant shall not have any interest or right in or to such Account at
any time.
4.2 Participant Deferrals. The Administrator shall credit to a Participant's
Account for a Plan Year the amount of Profit Shares resulting from the
exercise of an Option or Options for which a valid Deferral Election Form
is in effect. In order for a Deferral Election Form to be valid with
respect to the exercise of an Option: (a) the Deferral Election Form must
have been timely executed in accordance with Section 3.5; (b) the exercise
complies with all of the applicable terms of the Option and of the Stock
Plan; and (c) the Option price is satisfied by a tender of Stock as
described in Section 3.4.
4.3 Investment Procedure. A Participant's Account shall be deemed invested in
Stock of the Company. Any dividends deemed paid on Stock shall be deemed to
be reinvested in Stock. In the event of a change in the Stock of the type
that results in an adjustment to the Stock pursuant to adjustment
provisions set forth in the Stock Plan, then the Participant's Account
shall be deemed invested in Stock as so adjusted; provided, however, to the
extent that the adjustment results in a deemed investment in cash and
stock, such cash shall be deemed reinvested in Stock (as adjusted);
provided, further, that if such adjustment results in the deemed investment
of the Account entirely in cash, then such cash shall be deemed invested in
an interest-bearing account and credited with interest quarterly at an
annual rate equal to the prime rate as published in The Wall Street Journal
at the beginning of such quarterly period plus 2%, or such other
investments as the Committee may permit the Participants to recommend to
the trustee of the Trust established pursuant to Article XI below.
4.4 Valuation of Accounts. The value of a Participant's Account shall be
determined from time to time by the Administrator in the following manner:
(a) The income and expense, gains, and losses, both realized and
unrealized, from such deemed investments as are required under Section
4.3 shall be determined by the Administrator. The amount so
determined shall be allocated to the Account of a Participant
proportionately in accordance with the procedures established by the
Administrator.
(b) Each Participant's Account shall be valued as of the Valuation Date of
each Plan Year or more frequently as determined in the sole discretion
of the Administrator, and shall again be valued as of the date that a
Participant receives a payment under the Plan, in accordance with the
procedures established by the Administrator.
(c) A Participant's Account shall be reduced by the amount of any benefits
distributed to or on behalf of the Participant pursuant to Article V.
(d) All allocations to and deductions from a Participant's Account under
this Section 4.4 shall be deemed to have been made on the applicable
Valuation Date in the order of priority set forth in this Section 4.4,
even though actually determined at a later date.
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ARTICLE V
PAYMENT OF BENEFITS
5.1 Entitlement to Benefit Payments. Upon a Participant's separation from
service from the Company and all Employers, the Participant shall be
entitled to his Account balance payable by the Company or by his Employer
in the form set forth in Section 5.2. Notwithstanding the foregoing, if a
Participant's separation from service is the result of termination "for
cause," no benefits shall be payable to the Participant under the Plan and
his Account balance shall be zero. A Participant shall be deemed to have
been terminated "for cause" if his employment is terminated voluntarily or
involuntarily as a result of the Participant's fraud, misappropriation or
embezzlement of Company or Employer funds or property. The Committee shall
determine whether a Participant's separation from service is "for cause."
5.2 Commencement of Benefit Payments. The Participant's Account balance shall
be paid to him in five annual installments commencing on a date which is
within ninety (90) days following his separation from service from the
Company and all Employers; provided, however, that if a Participant has
requested that his Account balance be paid in a lump sum or in up to ten
(10) annual installments, in accordance with such prior written notice
requirements as the Committee may adopt in its sole discretion, then his
Account balance shall be paid in such other manner and time. A Participant
may request to change the form and commencement date for the payment of
benefits, which the Committee, in its sole discretion, may honor.
Notwithstanding the foregoing, the Committee, in its sole discretion, shall
establish the commencement date for the payment of benefits, the
deductibility of which may be limited by Code Section 162(m), as the
earliest practicable date upon which such limitations would not apply.
5.3 Hardship Withdrawals. In the event of a Participant's immediate and
unforeseeable financial hardship, the Committee may, in its sole
discretion, pay out all or part of such Participant's Vested Account
Balance to the extent necessary to relieve such hardship.
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ARTICLE VI
PAYMENT OF BENEFITS ON OR AFTER DEATH
6.1 Commencement of Payments After Death. If a Participant dies before
receiving his entire Account Balance, the remainder of the Account
otherwise payable with respect to the Participant shall be paid to the
Participant's beneficiary or beneficiaries as a single lump-sum amount
within ninety (90) days following the date on which the Administrator is
notified of the Participant's death.
6.2 Designation of Beneficiary. A Participant may, by executing a Beneficiary
Designation Form (see Appendix A) during the Participant's lifetime,
designate one or more primary and contingent beneficiaries to receive his
Account balance which may be payable to the Participant hereunder following
the Participant's death, and may designate the proportions in which such
beneficiaries are to receive such payments. A Participant may change such
designations from time to time, and the last written designation filed with
the Administrator prior to the Participant's death shall control. If a
Participant fails to specifically designate a beneficiary or, if no
designated beneficiary survives the Participant, payment shall be made by
the Administrator in the following order of priority:
(a) to the Participant's surviving spouse; or if none,
(b) to the Participant's children, per stirpes; or if none,
(c) to the Participant's estate.
ARTICLE VII
ADMINISTRATION
7.1 General. The Administrator shall be the Committee, or such other person or
persons as designated by the Board or the Committee. Except as otherwise
specifically provided in the Plan, the Administrator shall be responsible
for the administration of the Plan. The Administrator shall be the "named
fiduciary" within the meaning of Section 402(c)(2) of ERISA.
7.2 Administrative Rules. The Administrator may adopt such rules of procedure
as it deems desirable for the conduct of its affairs, except to the extent
that such rules conflict with the provisions of the Plan.
7.3 Duties. The Administrator shall have the following rights, powers and
duties:
(a) The decision of the Administrator in matters within its jurisdiction
shall be final, binding and conclusive upon each Employer and upon any
other person affected by such decision, subject to the claims
procedure hereinafter set forth.
(b) The Administrator shall have the duty and authority to interpret and
construe the provisions of the Plan, to decide any question which may
arise regarding the rights of Employees, Participants and
beneficiaries, and the amounts of their respective interests, to adopt
such rules and to exercise such powers as the Administrator may deem
necessary for the administration of the Plan, and to exercise any
other rights, powers or privileges granted to the Administrator by the
terms of the Plan.
7
(c) The Administrator shall maintain full and complete records of its
decisions. Its records shall contain all relevant data pertaining to
the Participant and his rights and duties under the Plan. The
Administrator shall have the duty to maintain Account records of all
Participants.
(d) The Administrator shall cause the principal provisions of the Plan to
be communicated to the Participants, and a copy of the Plan and other
documents shall be available at the principal office of the Company
for inspection by the Participants at reasonable times determined by
the Administrator.
(e) The Administrator shall periodically report to the Committee with
respect to the status of the Plan.
7.4 Fees. No fee or compensation shall be paid to any person for services as
the Administrator.
ARTICLE VIII
CLAIMS PROCEDURE
8.1 General. Any claim for benefits under the Plan shall be filed by the
Participant or beneficiary ("claimant") on the form prescribed for such
purpose with the Administrator.
8.2 Denials. If a claim for benefits under the Plan is wholly or partially
denied, notice of the decision shall be furnished to the claimant by the
Administrator within a reasonable period of time after receipt of the claim
by the Administrator.
8.3 Notice. Any claimant who is denied a claim for benefits shall be furnished
written notice setting forth:
(a) the specific reason or reasons for the denial;
(b) specific reference to the pertinent provision of the Plan upon which
the denial is based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim; and
(d) an explanation of the claim review procedure under the Plan.
8
8.4 Appeals Procedure. In order that a claimant may appeal a denial of a
claim, the claimant or the claimant's duly authorized representative may:
(a) request a review by written application to the Administrator, or its
designate, no later than sixty (60) days after receipt by the claimant
of written notification of denial of a claim;
(b) review pertinent documents; and
(c) submit issues and comments in writing.
8.5 Review. A decision on review of a denied claim shall be made not later
than sixty (60) days after receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered within a reasonable period of time, but not
later than one hundred and twenty (120) days after receipt of a request for
review. The decision on review shall be in writing and shall include the
specific reason(s) for the decision and the specific reference(s) to the
pertinent provisions of the Plan on which the decision is based.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Amendment. The Company reserves the right to amend the Plan in any manner
that it deems advisable by a resolution of the Board or the Committee. No
amendment shall, without the Participant's consent, affect the amount of
the Participant's Account balance at the time the amendment becomes
effective or the right of the Participant to receive a distribution of his
Account balance.
9.2 Termination. The Company reserves the right to terminate the Plan at any
time. No termination shall, without the Participant's consent, affect the
amount of the Participant's Account balance prior to the termination or
the right of the Participant to receive a distribution of his Account
balance.
9.3 No Assignment. The Participant shall not have the power to pledge,
transfer, assign, anticipate, mortgage or otherwise encumber or dispose of
in advance any interest in amounts payable hereunder or any of the payments
provided for herein, nor shall any interest in amounts payable hereunder or
in any payments be subject to seizure for payments of any debts, judgments,
alimony or separate maintenance, or be reached or transferred by operation
of law in the event of bankruptcy, insolvency or otherwise.
9.4 Incapacity. If any person to whom a benefit is payable under the Plan is
an infant or if the Administrator determines that any person to whom such
benefit is payable is incompetent by reason of physical or mental
disability, the Administrator may cause the payments becoming due to such
person to be made to another for his benefit. Payments made pursuant to
this Section shall, as to such payment, operate as a complete discharge of
the Plan, the Company, each Employer, the Committee and the Administrator.
9
9.5 Successors and Assigns. The provisions of the Plan are binding upon and
inure to the benefit of the Company, each Employer, its respective
successors and assigns, and the Participant, his beneficiaries, heirs,
legal representatives and assigns.
9.6 Governing Law. The Plan shall be subject to and construed in accordance
with the laws of Illinois to the extent not pre-empted by the provisions
of ERISA.
9.7 No Guarantee of Employment. Nothing contained in the Plan shall be
construed as a contract of employment or deemed to give any Participant
the right to be retained in the employ of any Employer or any equity or
other interest in the assets, business or affairs of any Employer. No
Participant hereunder shall have a security interest in the assets of any
Employer used to make contributions or pay benefits.
9.8 Severability. If any provision of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of the Plan, but the Plan shall be construed and
enforced as if such illegal or invalid provision had never been included
herein.
9.9 Notification of Addresses. Each Participant and each beneficiary shall
file with the Administrator, from time to time, in writing, the post
office address of the Participant, the post office address of each
beneficiary, and each change of post office address. Any communication,
statement or notice addressed to the last post office address filed with
the Administrator (or if no such address was filed with the Administrator,
then to the last post office address of the Participant or beneficiary as
shown on the Company's or Employer's records) shall be binding on the
Participant and each beneficiary for all purposes of the Plan and neither
the Administrator nor the Company or an Employer shall be obligated to
search for or ascertain the whereabouts of any Participant or beneficiary.
ARTICLE X
ADOPTING EMPLOYERS
10.1 Adoption of Plan. The Plan may be adopted by any subsidiary or affiliate
of the Company for the benefit of any Employee designated by the Committee
to participate herein. Such adoption shall be by resolution of the
adopting Employer's governing body, a copy of which shall be filed with
the Company.
10.2 Administration. As a condition to participating in the Plan, each adopting
Employer shall be deemed to have authorized the Committee and the
Administrator (if different from the Committee) to act for it in all
matters arising under or with respect to the Plan and shall comply with
such other terms and conditions as may be imposed by the Administrator.
10
10.3 Company as Agent. Each adopting Employer hereby irrevocably grants the
Company full and exclusive power to exercise, enforce or waive any right
which such Employer might otherwise have under the terms of the Plan, and
each adopting Employer irrevocably appoints the Company as its agent for
such purpose.
10.4 Termination. If authorized by the Company, each adopting Employer may,
upon written notice to the Company, cease to participate in the Plan with
respect to its Employees by resolution of its governing body.
ARTICLE XI
TRUST
11.1 Trust. A Trust has been established under the Plan by the execution of a
separate trust agreement entitled the First Midwest Bancorp, Inc.
Nonqualified Stock Option - Gain Deferral Trust with one or more trustees.
The Trust is intended to be maintained as a "grantor trust", under section
677 of the Code, for which the Company is the grantor. The assets of the
Trust will be held, invested and disposed of by the trustee, in accordance
with the terms of the Trust, for the exclusive purpose of providing Plan
benefits for the Participants. Notwithstanding any provision of the Plan
or the Trust to the contrary, the assets of each Trust shall at all times
be subject to the claims of the grantor's general creditors in the event
of the grantor's insolvency or bankruptcy.
11.2 Contributions and Expense. The Company, in its sole discretion, and from
time to time, may make contributions to the Trust. All benefits under the
Plan and expenses chargeable to the Plan, to the extent not paid directly
by the Company, shall be paid from the Trust
11.3 Trustee Duties. The powers, duties and responsibilities of the trustee
shall be as set forth in the Trust agreement and nothing contained in the
Plan, either expressly or by implication, shall impose any additional
powers, duties or responsibilities upon the trustee.
11.4 Voting Rights. Each Participant (or, in the event of his death, his
beneficiary) shall have the right to direct the Trustee as to the manner
in which whole and partial shares of Stock allocated to his Account as of
the record date are to be voted on each matter brought before an annual or
special stockholders' meeting. Upon timely receipt of such directions, the
Trustee shall on each such matter vote as directed the number of shares
(including fractional shares) of Stock allocated to such Participant's
Account, and the Trustee shall have no discretion in such matter. The
directions received by the Trustee from Participants shall be held by the
Trustee in confidence and shall not be divulged or released to any person,
including officers or employees of any Employer. The Trustee shall vote
allocated shares for which it has not received direction in the same
proportion as directed shares are voted, and shall have no discretion in
such matter. Additionally, in the event a tender offer is extended with
respect to the Shares of the Company, each Participant shall have the
identical rights to direct the voting of the shares allocated to his
Account as detailed in the preceding sentences of this Section 11.4.
11
11.5 Reversion to the Company. The Company shall not have any beneficial
interest in the Trust and no part of the Trust shall ever revert or be
repaid to the Company prior to the payment of all Plan benefits to
Participants, except with respect to amounts allocable to forfeited
benefits (including without limitation, any amounts forfeited on account
of a termination "for cause") and as otherwise reasonably determined by
the Committee not to be necessary to pay benefits to Participants.
* * * * *
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly
authorized officer effective as of the 1st day of December, 1997.
ATTEST/WITNESS: FIRST MIDWEST BANCORP, INC.
By:
- --------------------------------- -----------------------------------
[ Name and Title ] [ Name and Title ]
Date: Date:
---------------------------- --------------------------------
12
APPENDIX A
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
DEFERRAL ELECTION FORM
----------------------
To: Office of the Compensation Committee of the Board of Directors:
This Deferral Election Form sets forth my election to defer, as specified below,
the Profit Shares (defined below) receivable upon stock Option exercises using
the stock-for-stock method of payment under the First Midwest Bancorp, Inc.
Nonqualified Stock Option - Gain Deferral Plan (the "Plan"), subject to the
terms, definition of terms, and conditions of the Plan which are incorporated
herein by reference.
I understand that, in order to be effective with respect to the exercise of any
Option, this Deferral Election Form must be executed in a calendar year
preceding, and at least six months prior to, the exercise of such Options,
except that if this Deferral Election Form is executed within 30 days following
the inception of the Plan or, if later, the date I was first designated as
eligible to participate in the Plan, then this Deferral Election Form will be
effective for all Options exercised after the date on which this Deferral
Election Form is executed.. Furthermore, I understand that this Form supersedes,
as of its earliest effective date under the preceding sentence, the Deferral
Election Form that I have previously executed, if any.
I understand that this Deferral Election Form shall be effective for all
subsequent calendar years, until the earlier of: (i) the first day of the
calendar year following the year in which I execute a Deferral Election
Revocation Form; or (ii) the date any subsequently executed Deferral Election
Form becomes effective.
The Profit Shares, as made eligible for deferral under the terms of the Plan,
and effectively deferred under this Deferral Election Form, shall be the number
of shares equal in value to the excess of (1) the Fair Market Value of the
shares of Stock purchased on Option exercise, over (2) the exercise price of the
shares of Stock purchased, divided by the Fair Market Value of one share of
Stock. For the purposes of this election, Fair Market Value shall be determined
on the date of Option exercise.
Therefore, based on the foregoing, I elect to defer, for all Options exercised
consistent with the timing rules and Option price tender methods described
above, the Profit Shares as follows:
______ % of the total number of Profit Shares applicable to all Options
so exercised.
______________________________ ______________________________
Participant's Signature Date
1
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
REQUEST OF FORM OF BENEFIT DISTRIBUTION
---------------------------------------
To: Office of the Compensation Committee of the Board of Directors:
I understand that I have executed one or more Deferral Election Form(s) pursuant
to Section 3.3 of the First Midwest Bancorp, Inc. Nonqualified Stock Option -
Gain Deferral Plan (the "Plan"). Furthermore, I understand that the deferrals
which accumulate as a result of my execution of the Deferral Election Form(s)
will be maintained in one or more accounts established for me pursuant to
Article IV of the Plan. I further understand that the balance in my account(s)
will be paid out to me in accordance with Article V of the Plan.
Therefore, in accordance with Section 5.2 of the Plan, I hereby make the
following request with regard to the form of benefit payments to which I become
entitled and which will be paid pursuant to the dates, terms, and conditions as
set forth in Article V of the Plan:
(Check One)
______ Five annual installments
______ Ten annual installments
______ Lump sum payment
(NOTE: If no selection is made, your Account will be paid out in five
annual installments in accordance with Article V of the Plan.)
Furthermore, I understand that I may request to change the form of my benefit
payments by executing a Request for Change in the Form of Benefit Payment form.
However, the approval of such a request shall be at the sole discretion of the
Compensation Committee.
______________________________ ______________________________
Participant's Signature Date
2
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
REQUEST FOR CHANGE IN THE FORM OF BENEFIT DISTRIBUTION
------------------------------------------------------
To: Office of the Compensation Committee of the Board of Directors:
Pursuant to Section 5.2 of the First Midwest Bancorp, Inc. Nonqualified Stock
Option - Gain Deferral Plan (the "Plan"), I have previously executed a valid
Request of Form of Benefit Distribution form. Now, as further provided in
Section 5.2 of the Plan, I request that the form of benefit payments, as
designated in my current Request of Form of Benefit Distribution form, be
amended as indicated below:
Current form of benefit:
(Check One)
______ Five annual installments
______ Ten annual installments
______ Lump sum payment
Requested form of benefit:
(Check One)
______ Five annual installments
______ Ten annual installments
______ Lump sum payment
I understand that the Committee, in its sole discretion will determine whether
to honor this request.
______________________________ ______________________________
Participant's Signature Date
3
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
DESIGNATION OF BENEFICIARY
To: Office of the Compensation Committee of the Board of Directors:
The following beneficiary(ies) is (are) designated to receive the benefits under
the Plan which are payable upon my death. This designation supersedes any prior
designations and shall remain effective until I execute a subsequent beneficiary
designation, made in writing and signed by me.
Relationship to
Beneficiary Participant
- ----------- ---------------
Primary: ___________________________________ _______________________
Address: ___________________________________ _______________________
Contingent: ________________________________ _______________________
Address: ___________________________________ _______________________
If no beneficiary survives me, my benefits shall be paid in accordance with the
terms of the above Plan.
Date:_____________ Participant Signs:_________________________________
Print Participant's Name:__________________________
4
FIRST MIDWEST BANCORP, INC.
NONQUALIFIED STOCK OPTION - GAIN DEFERRAL PLAN
DEFERRAL ELECTION REVOCATION FORM
---------------------------------
To: Office of the Compensation Committee of the Board of Directors:
This Deferral Election Revocation Form sets forth my revocation to defer, as
specified in my previously executed Deferral Election Form, the Profit Shares
receivable upon stock Option exercises under the First Midwest Bancorp, Inc.
Nonqualified Stock Option - Gain Deferral Plan (the "Plan"), subject to the
terms, definitions of terms, and conditions of the Plan which are incorporated
herein by reference.
I understand that this Deferral Election Revocation Form shall be effective for
all subsequent calendar years, until the calendar year following the year in
which I execute a subsequent Deferral Election Form.
Furthermore, I understand that in order to be effective with respect to the
exercise of any Option, this Deferral Election Revocation Form must be executed
in a calendar year preceding the exercise of any such Options.
Therefore, based on the foregoing, I elect to revoke my prior election to defer
the Profit Shares applicable to Options exercised pursuant to the Plan.
______________________________ ______________________________
Participant's Signature Date
5
APPENDIX B
----------
FIRST MIDWEST BANCORP, INC.
1989 OMNIBUS STOCK AND INCENTIVE PLAN, AS AMENDED
NOTICE OF INTENTION TO EXERCISE
NONQUALIFIED STOCK OPTIONS
WITH GAIN DEFERRAL
(Important Note: If exercising nonqualified stock options granted under
different grant dates with different grant prices, please use a separate Notice
of Intention to Exercise Form for each such grant.)
PART ONE
--------
To: Office of the Compensation Committee of the Board of Directors:
In accordance with the First Midwest Bancorp, Inc. 1989 Omnibus Stock and
Incentive Plan, as Amended (the "Plan"), and the First Midwest Bancorp, Inc.
Nonqualified Stock Option - Gain Deferral Plan (the "Deferral Plan"), subject to
the terms, definition of terms, and conditions of the Plan and the Deferral Plan
which are incorporated herein by reference, I elect to exercise my nonqualified
Stock Options granted on the _____ day of __________, _____, and to purchase
________ shares of First Midwest Bancorp, Inc. $.01 par value common stock
("Stock") at the exercise price of $________ per share.
In satisfaction of the Option price (check one of the two following lines):
_____ enclosed are
_____ I hereby affirm ownership of
_____ shares of previously acquired Stock. I hereby attest that the shares of
stock hereby tendered (or tendered through my affirmation of ownership) in
satisfaction of the Option price have been owned by me for a period of at least
six months prior to the date on which I executed this Notice.
Additionally, I understand that the excess of the fair market value of the
shares acquired in this exercise, over the exercise price of the shares of Stock
purchased, is subject to current Social Security (Medicare) taxation for this
tax year. I further understand that once the Fair Market Value of the shares
acquired is established, I will be required to remit this taxable amount to
First Midwest Bancorp, Inc. prior to the shares being issues. To satisfy such
withholding, the taxes will be paid in accordance with Part Three of this Form.
The specific amount conforming to the exercise election above is detailed on
Part Two of this Form, attached hereto and incorporated by reference.
The computation of tax withholding is detailed on Part Three of this Form,
attached hereto and incorporated by reference.
______________________________ _____________________________
Participant's Signature Date
6
PART TWO
--------
AGGREGATE EXERCISE PRICE COMPUTATIONAL WORKSHEET
FIRST MIDWEST BANCORP, INC.
1989 OMNIBUS STOCK AND INCENTIVE PLAN, AS AMENDED
I. Participant's Name:
_________________________________________
II. Date of Grant:
_________________________________________
III. Exercise Price Per Share: $ _________
IV. Effective Date of Notice to Exercise:
______________________
V. Expiration Date of Option:
______________________________
VI. Number of Shares Acquired in this Exercise: _________
VII. Aggregate Exercise Price (#3 multiplied by #5): $ _________
VIII. Satisfaction of Aggregate Exercise Price:
Surrender (or affirmation of ownership) of _____ previously
acquired shares that have been held by me for at least 6
months prior to the date of this Form with a Fair Market
Value of $_____ per share: $ _________
TOTAL $ _________
7
PART THREE
----------
COMPUTATION OF TAX WITHHOLDING
FIRST MIDWEST BANCORP, INC.
1989 OMNIBUS STOCK AND INCENTIVE PLAN, AS AMENDED
Upon receipt of the Notice of Intention to Exercise, First Midwest Bancorp, Inc.
will calculate the appropriate taxes and forward such calculations to the
Participant for payment.
IX. Participant's Name: _____________________________
X. Date of Grant: _______________________________________
XI. Effective Date of Notice to Exercise: ____________________
XII. Fair Market Value of First Midwest Bancorp, Inc.
Stock on Effective Date of Notice to Exercise: $_______
XIII. Exercise Price Per Share: $_______
XIV. Appreciation Per Share: $_______
XV. Shares Acquired in Exercise: _______
XVI. Taxable Appreciation (#6 multiplied by #7): $_______
XVII. Social Security (Medicare):
a. Taxable Appreciation $_______
b. Medicare Tax Rate _______
c. Medicare Tax $_______
a. Satisfaction of Tax Withholding:
(1) By Check (required if tender is by affirmation of
ownership) $_______
(2) Surrender of _____ previously acquired Shares that
have been held for at least 6 months prior to the date
of this Form, with a Fair Market Value of $________
(not available for exercise by affirmation) $_______
___________________________________ _______________________________
Participant's Signature Date
8