Exhibit 10.1

 

 

February 19, 2003

"First_Name" "Middle_Name" "Last_Name"

"Address_Line_1"

"Address_Line_2"

"City", "State" "Zip_Code"

 

RE: Grant of Director Options - Letter Agreement ("Option_Date")

Dear "First_Name":

I am pleased to confirm to you the grant on "Option_Date" (the "Date of Grant")
of a nonqualified stock option (the "Director Option") under the First Midwest
Bancorp, Inc. Non-Employee Directors' 1997 Stock Option Plan (the "Directors'
Plan"). The Director Option provides you with the opportunity to purchase for
"Option_Price" per share up to "Shares_Granted" shares of the Company's Common
Stock.

The Director Option is subject to the terms and conditions of the Directors'
Plan, including any Amendments thereto, which are incorporated herein by
reference, and to the following:

(1) Vesting and Exercisability: In general, the Director Option will become
fully vested and exercisable on "Vest_Date_Period_1". In the event of your death
or disability, your retirement (as defined below) or of a Change-in-Control as
defined in the Company's Omnibus Stock and Incentive Plan, as Amended (the
"Omnibus Plan"), the Director Option will become fully vested and exercisable.
Retirement means termination of your membership on the First Midwest Bancorp,
Inc. Board of Directors at the expiration of your term of office, or under such
other circumstances as the Board may determine to constitute retirement.

(2) Expiration: If you cease to be a director for any reason other than death,
disability or retirement prior to the date the Director Option becomes fully
vested, the Director Option will expire on the date your directorship ends. If
the Director Option has become fully vested at the time you cease to be a
director, the Director Option will expire on the earlier of the third
anniversary of the date you ceased to be a director or the first anniversary of
the date of your death. In no event, however, may the Director Option be
exercised beyond "Expiration_Date_Period_1".

(3) Procedure for Exercise: Once vested, you may exercise the Director Option at
any time by delivering written notice of exercise and payment of the Exercise
Price in full either (a) in cash or its equivalent (as described in the
Directors' Plan), or (b) by tendering previously-acquired shares of Common Stock
having an aggregate fair market value equal to the total Exercise Price that
have been owned by you for six (6) months or more, or (c) by a combination of
the (a) and (b). You may deliver an affirmation of ownership of Common Stock
having the required fair market value in lieu of physically tendering such
shares. In the event you have made an election under the Company's Nonqualified
Stock Option Gain Deferral Plan, you may only make payment with shares of Common
Stock in accordance with clause (b) above. Further information regarding
exercise procedures will be provided to you.

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(4) Limited Transferability; Beneficiary Designation: The Director Option is
personal to you and may not be sold, transferred, pledged, assigned or otherwise
alienated, other than as provided herein. The Director Option shall be
exercisable during your lifetime only by you. Notwithstanding the foregoing, you
may transfer the Director Option to:

(a) your spouse, children or grandchildren ("Immediate Family Members");

(b) a trust or trusts for the exclusive benefit of such Immediate Family
Members,

or;

(c) a partnership in which such Immediate Family Members are the only partners,

provided that:

(i) there may be no consideration for any such transfer,

(ii) subsequent transfers of the transferred Director Option shall be
prohibited, except to designated beneficiaries; and

(iii) such transfer is evidenced by documents acceptable to the Company and
filed with the Corporate Secretary.

Following transfer, the Director Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer, provided
that for purposes of designating a beneficiary with respect thereto, the
transferee shall be entitled to designate the beneficiary. The provisions of
this Letter Agreement relating to the period of exerciseability and expiration
of the Director Option shall continue to be applied with respect to you and your
status as a director, and the Director Option shall be exercisable by the
transferee only to the extent, and for the periods, set forth in Paragraphs (1)
and (2) above. Transfer of Common Stock purchased by your transferee upon
exercise of the Director Option may also be subject to the restrictions and
limitations described in Paragraph (5) below.

Kindly designate a beneficiary or beneficiaries with respect to the Director
Option by completing and returning the attached Beneficiary Designation Form.

(5) Securities Law Restrictions: You understand and acknowledge that applicable
securities laws govern and may restrict your right to offer, sell or otherwise
dispose of any Common Stock purchased upon exercise of the Director Option. In
addition, because of your status as a director of the Company, prior to exercise
of the Director Option or sale of any shares acquired upon exercise, you should
consult with the Company's Corporate Secretary with respect to the implications
of Section 16(a) [two-day reporting obligation] and (b) [short-swing profit
recovery provisions] of the Securities Exchange Act of 1934 on such exercise or
sale. Additional information regarding these rules will be provided to you, on
request, from the Company's Corporate Secretary.

(6) Reload Provisions: As described more fully in Appendix B, "General
Information Regarding Reload Stock Options" of the "Summary Description" of the
Directors' Plan, the Board of Directors of First Midwest Bancorp, Inc. has
approved the grant of reload stock options upon certain exercises of the
Director Options. Accordingly, a reload stock option will be granted upon any
exercise of the Director Option by you while you are a director and upon which
you tender previously-owned Common Stock (Common Stock which has been held for
at least six (6) months) in payment of the exercise price. A Reload Option
Letter Agreement will be issued to you to evidence the grant of a reload stock
option.

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(7) Continuing Participant Agreement: For purposes of this Director Option, your
directorship will not be deemed to have terminated, and instead will be deemed
to be continuing, during any period during which you are a party to a Continuing
Participant Agreement with the Company; provided such Continuing Participant
Agreement was approved by the Board of Directors of the Company.

(

8) Tax Consequences: Director Options are in the form of nonqualified stock
options which are not intended to fall under the provisions of Internal Revenue
Code Section 422. No federal or state income taxes or FICA/Medicare taxes will
be withheld by the Company upon exercise. Information regarding the tax
consequences of the Director Option will be provided to you.

(9) Miscellaneous: Nothing in this Letter Agreement confers any right on you to
continue as a director of the Company. This Letter Agreement will be binding
upon, and insure to the benefit of, your and the Company's successors and
assigns.

(10) Conformity with Directors' Plan: The Director Option is intended to conform
to the Directors' Plan in all respects. Inconsistencies between this Letter
Agreement and the Directors' Plan shall be resolved in accordance with the terms
of the Directors' Plan. By executing and returning the enclosed Confirmation of
Acceptance of this Letter Agreement you agree to be bound by the terms hereof
and of the Directors' Plan. Except as otherwise expressly provided herein, all
definitions stated in the Directors' Plan shall be applicable to this Letter
Agreement.

To confirm your understanding and acceptance of the Director Option granted to
you by this Letter Agreement, kindly execute and return to the Company's
Corporate Secretary in the enclosed envelope the following documents: (a) the
"Confirmation of Acceptance" endorsement, and (b) the Beneficiary Designation
Form.

If you have any questions, please do not hesitate to contact the Corporate
Controller at (630) 875-7459.

Very truly yours,

First Midwest Bancorp, Inc.

 

 

John M. O'Meara

President and Chief Executive Officer

First Midwest Bancorp, Inc.

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