Document:

<PAGE>

                                                                    Exhibit 10.6

February 17, 2000

RE:  Grant of Director Options - Letter Agreement (February 16, 2000)

Dear ________:

I am pleased to confirm to you the grant on (February 16, 2000 (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 $23.0000 per share up to  804 shares of the Company's Common Stock.

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

(1)  Vesting and Exercisability: Subject to paragraph (9) below, in general, the
     --------------------------
     Director Option will become fully vested and exercisable on February 16,
     2001.  In the event of your death or disability, or of a Change in Control
     as defined in the Company's 1989 Omnibus Stock and Incentive Plan, as
     Amended (the "Omnibus Plan"), the Director Option will become fully vested
     and exercisable.

(2)  Expiration:  If you cease to be a director for any reason other than death
     ----------
     or disability 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 third anniversary of the
     date you ceased to be a director or one year, in the event of your death.
     In no event, however, may the Director Option be exercised beyond February
     16, 2010.

(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 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.

(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.
<PAGE>

     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 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) and (b) 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)  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.

(7)  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.
<PAGE>

(8)  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 copy 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.

(9)  Effect of Certain Accounting Rules:  In the event the Board of Directors
     ----------------------------------
     determines it is to be in the best interests of the Company to account for
     a business combination under the pooling-of-interests method and, in the
     written opinion of the accounting firm then serving as the Company's
     independent auditors, the grant of this Option or any of the terms of this
     Option, makes such business combination ineligible for pooling-of-interests
     accounting that but for the grant of this Option or such terms would
     otherwise be eligible for such accounting treatment, then this Option or
     such be rescinded or the terms modified to the extent the Compensation
     Committee determines to be necessary to enable the business combination to
     so qualify for pooling-of-interests accounting treatment.

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 on the extra copy of this Letter
                                                ----------
Agreement, and (b) the Beneficiary Designation Form.

If you have any questions, please do not hesitate to contact the Corporate
Secretary.

Very truly yours,

First Midwest Bancorp, Inc.

Robert P. O'Meara
Chairman and Chief Executive Officer

                          CONFIRMATION OF ACCEPTANCE
                          --------------------------

I acknowledge receipt of a copy of the Directors' Plan, that I have reviewed
this Letter Agreement and the Directors' Plan, and I agree to be bound by all
provisions of this Letter Agreement and the Directors' Plan.

_______________________________              ______________________________
Director's Signature                         Date
<PAGE>

                NON-EMPLOYEE DIRECTORS' 1997 STOCK OPTION PLAN
                         BENEFICIARY DESIGNATION FORM
                         ----------------------------

This Beneficiary Designation Form applies to Director Stock Option and Reload
Option Agreement(s) as follows (fill in the Option Grant Date from the
                                            -----------------
applicable Letter Agreement):

______________________      __________________________    ______________________

______________________      __________________________    ______________________

______________________      __________________________    ______________________

     All prior Beneficiary Designation Forms applicable to Director Stock
     --------------------------------------------------------------------
Options or Reload Options not listed above will remain in effect as previously
------------------------------------------------------------------------------
submitted.
----------

     You may designate a primary beneficiary and a secondary beneficiary to whom
rights under your Director or Reload Options will pass in the event of your
death.  You may name more than one person as a primary or secondary beneficiary.
For example, you may wish to name your spouse as primary beneficiary and your
children as secondary beneficiaries.  Your primary beneficiaries will have equal
rights with respect to your Director or Reload Options unless you indicate
otherwise.  The same rule applies for secondary beneficiaries.

Designate Your Beneficiary(ies):

     Primary Beneficiary(ies) (give name, address and relationship to you): ____

________________________________________________________________________________

________________________________________________________________________________

     Secondary Beneficiary(ies) (give name, address and relationship to you): __

________________________________________________________________________________

________________________________________________________________________________

     I certify that my designation of beneficiary(ies) set forth above is my
free act and deed and acknowledge that when effective it will revoke any prior
designation I may have made with regard to Director or Reload  Option(s) set
forth above.

                                    ____________________________________
                                    (Signature)

                                    ____________________________________
                                    (Date)

     This Beneficiary Designation Form shall be effective on the day it is
received by the Corporate Secretary of the Company.  This Form shall be (i)
delivered to the Corporate Secretary by personal delivery, facsimile, United
States mail or by express courier service, and (ii) deemed to be received upon
personal delivery, upon confirmation of receipt of facsimile transmission or
upon receipt by the Corporate Secretary if by United States mail or express
courier service; provided, however, that if this Form is not received during
regular business hours, it shall be deemed to be received on the next succeeding
business day of the Company.

                                    RECEIVED AND ACKNOWLEDGED:

                                    FIRST MIDWEST BANCORP, INC.

                                    BY: _____________________________________
                                         (On behalf of the Corporate Secretary)

Date:_____________________<PAGE>

                                                                   Exhibit 10.13

                             FIRST MIDWEST BANCORP

                        SAVINGS AND PROFIT SHARING PLAN

 (Amended and Restated Effective January 1, 1998, Except as Expressly Provided
                                  Otherwise)
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                              Page
<S>                                                                                                           <C>
ARTICLE 1
   General................................................................................................       1
   -------
               1.1   Purpose..............................................................................       1
                     -------
               1.2   Source of Funds......................................................................       1
                     ---------------
               1.3   Effective Date.......................................................................       1
                     --------------
               1.4   Definitions..........................................................................       1
                     -----------

ARTICLE 2
Eligibility and Participation.............................................................................      11
-----------------------------
               2.1   Eligibility Requirements.............................................................      11
                     ------------------------
               2.2   Leaves of Absence....................................................................      12
                     -----------------
               2.3   Years of Service to be Credited......................................................      12
                     -------------------------------
               2.4   Years of Service to be Disregarded...................................................      12
                     ----------------------------------
               2.5   Leased Employees.....................................................................      13
                     ----------------
               2.6   Qualified Military Service...........................................................      13
                     --------------------------

ARTICLE 3
Contributions by Employer and Rollover Contributions......................................................      14
----------------------------------------------------
               3.1   Contributions to the Plan............................................................      14
                     -------------------------
               3.2   Before-Tax Contribution..............................................................      14
                     -----------------------
               3.3   Limitations on Before-Tax Contributions..............................................      14
                     ---------------------------------------
               3.4   Employer Contribution................................................................      17
                     ---------------------
               3.5   Matching Employer Contribution.......................................................      17
                     ------------------------------
               3.6   Rollover Contributions...............................................................      18
                     ----------------------

ARTICLE 4
Accounting Provisions and Allocations.....................................................................      19
-------------------------------------
               4.1   Participant's Accounts...............................................................      19
                     ----------------------
               4.2   Common Fund..........................................................................      19
                     -----------
               4.3   Allocation Procedure.................................................................      20
                     --------------------
               4.4   Determination of Value of Trust Fund and of Net Earnings or Losses...................      21
                     ------------------------------------------------------------------
               4.5   Allocation of Net Earnings or Losses.................................................      21
                     ------------------------------------
               4.6   Eligibility to Share in the Employer's Contributions.................................      21
                     ----------------------------------------------------
               4.7   Allocation of Before-Tax Contributions...............................................      22
                     --------------------------------------
               4.8   Allocation of Matching Employer Contributions........................................      22
                     ---------------------------------------------
               4.9   Allocation of Employer Contribution..................................................      23
                     -----------------------------------
               4.10  Provisional Annual Addition..........................................................      23
                     ---------------------------
               4.11  Limitation on Annual Additions.......................................................      23
                     ------------------------------
               4.12  Special Limitation on Maximum Contribution...........................................      24
                     ------------------------------------------
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                                          <C>
ARTICLE 5
Amount of Payments to Participants........................................................................................   26
----------------------------------
               5.1   General Rule.........................................................................................   26
                     ------------
               5.2   Normal Retirement....................................................................................   26
                     -----------------
               5.3   Death................................................................................................   26
                     -----
               5.4   Disability...........................................................................................   27
                     ----------
               5.5   Vesting..............................................................................................   27
                     -------
               5.6   Resignation or Dismissal.............................................................................   27
                     ------------------------
               5.7   Treatment of Forfeitures.............................................................................   28
                     ------------------------

ARTICLE 6
Distributions.............................................................................................................   30
-------------
               6.1   Commencement of Distributions........................................................................   30
                     -----------------------------
               6.2   Form of Distributions................................................................................   31
                     ---------------------
               6.3   Purchase of an Annuity Contract (Applicable to the Heritage and McHenry Plan Accounts Only)..........   32
                     -------------------------------------------------------------------------------------------
               6.4   Distributions to Beneficiaries.......................................................................   34
                     ------------------------------
               6.5   Beneficiaries........................................................................................   35
                     -------------
               6.6   Form of Elections and Applications for Benefits......................................................   36
                     -----------------------------------------------
               6.7   Unclaimed Distributions..............................................................................   36
                     -----------------------
               6.8   Loans................................................................................................   36
                     -----
               6.9   Withdrawals Prior to Termination of Employment.......................................................   37
                     ----------------------------------------------
               6.10  Facility of Payment..................................................................................   39
                     -------------------
               6.11  Claims Procedure.....................................................................................   40
                     ----------------
               6.12  Eligible Rollover Distributions......................................................................   41
                     -------------------------------

ARTICLE 7
Top-Heavy Plan Requirements...............................................................................................   42
---------------------------
               7.1   Definition of Top-Heavy Plan.........................................................................   42
                     ----------------------------
               7.2   Top-Heavy Plan Requirements..........................................................................   42
                     ---------------------------
               7.3   Definitions..........................................................................................   43
                     -----------
               7.4   Cessation of Top-Heavy Requirements..................................................................   43
                     -----------------------------------

ARTICLE 8
Powers and Duties of Plan Committee.......................................................................................   45
-----------------------------------
               8.1   Appointment of Plan Committee........................................................................   45
                     -----------------------------
               8.2   Powers and Duties of Committee.......................................................................   45
                     ------------------------------
               8.3   Committee Procedures.................................................................................   46
                     --------------------
               8.4   Consultation with Advisors...........................................................................   46
                     --------------------------
               8.5   Committee Members as Participants....................................................................   46
                     ---------------------------------
               8.6   Records and Reports..................................................................................   47
                     -------------------
               8.7   Investment Policy....................................................................................   47
                     -----------------
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                                                          <C>
               8.8    Designation of Other Fiduciaries....................................................................   47
                      --------------------------------
               8.9    Obligations of Committee............................................................................   48
                      ------------------------
               8.10   Indemnification of Committee........................................................................   48
                      ----------------------------

ARTICLE 9
Trustee and Trust Fund....................................................................................................   49
----------------------
               9.1    Trust Fund..........................................................................................   49
                      ----------
               9.2    Payments to Trust Fund and Expenses.................................................................   49
                      -----------------------------------
               9.3    Trustee's Responsibilities..........................................................................   49
                      --------------------------
               9.4    Reversion to the Employer...........................................................................   49
                      -------------------------
               9.5    Investment Options..................................................................................   49
                      ------------------
               9.6    Rollover from Prior Plan............................................................................   50
                      ------------------------

ARTICLE 10
Amendment or Termination..................................................................................................   52
------------------------
               10.1   Amendment...........................................................................................   52
                      ---------
               10.2   Termination.........................................................................................   52
                      -----------
               10.3   Form of Amendment, Discontinuance of Employer Contributions, and Termination........................   52
                      ----------------------------------------------------------------------------
               10.4   Limitations on Amendments...........................................................................   52
                      -------------------------
               10.5   Level of Benefits upon Merger.......................................................................   53
                      -----------------------------
               10.6   Vesting upon Termination or Discontinuance of Employer Contributions; Liquidation of Trust..........   53
                      ------------------------------------------------------------------------------------------

ARTICLE 11
Adoption by Affiliates....................................................................................................   54
----------------------
               11.1   Adoption of Plan....................................................................................   54
                      ----------------
               11.2   The Company as Agent for Employer...................................................................   54
                      ---------------------------------
               11.3   Adoption of Amendments..............................................................................   54
                      ----------------------
               11.4   Termination.........................................................................................   54
                      -----------
               11.5   Data to be Furnished by Employers...................................................................   54
                      ---------------------------------
               11.6   Joint Employees.....................................................................................   54
                      ---------------
               11.7   Expenses............................................................................................   55
                      --------
               11.8   Withdrawal..........................................................................................   55
                      ----------
               11.9   Prior Plans.........................................................................................   55
                      -----------
               11.10  Merger of the Heritage Plan into the Plan...........................................................   55
                      -----------------------------------------

ARTICLE 12
Miscellaneous.............................................................................................................   56
-------------
               12.1   No Guarantee of Employment, etc.....................................................................   56
                      -------------------------------
               12.2   Rights of Participants and Others...................................................................   56
                      ---------------------------------
               12.3   Qualified Domestic Relations Order..................................................................   56
                      ----------------------------------
               12.4   Controlling Law.....................................................................................   56
                      ---------------
</TABLE>

                                      iii
<PAGE>

<TABLE>
               <S>                                                                                                           <C>
               12.5   Severability........................................................................................   56
                      ------------
               12.6   Notification of Addresses...........................................................................   57
                      -------------------------
               12.7   Gender and Number...................................................................................   57
                      -----------------
</TABLE>

                                       iv
<PAGE>

                                   ARTICLE 1
                                    General
                                    -------

     1.1  Purpose.  It is the intention of the Company to continue to provide
          -------
for the administration of the First Midwest Bancorp Savings and Profit Sharing
Plan and a Trust Fund in conjunction therewith for the benefit of Eligible
Employees of the Employers, in accordance with the provisions of Sections 401
and 501 of the Code and in accordance with other provisions of law relating to
defined contribution plans.  Except as provided in this Plan or the Trust, upon
the transfer by the Employer of any funds to the Trust Fund in accordance with
the provisions of this Plan, all interest of the Employer therein shall cease
and terminate, and no part of the Trust Fund shall be used for, or diverted to,
purposes other than the exclusive benefit of Participants and their
beneficiaries.

     1.2  Source of Funds.  The Trust Fund shall be created, funded and
          ---------------
maintained by contributions of the Employers, by contributions of Participants,
and by such net earnings as are obtained from the investment of the funds of the
Trust Fund.

     1.3  Effective Date.  The provisions of the Plan as herein restated shall
          --------------
be effective as of January 1, 1998, except as expressly provided otherwise.
Except as may be required by ERISA or the Code, the rights of any person whose
status as an employee of the Employer and all Affiliates has terminated shall be
determined pursuant to the Plan as in effect on the date such employment
terminated, unless a subsequently adopted provision of the Plan is made
specifically applicable to such person.

     1.4  Definitions.  Certain terms are capitalized and have the respective
          -----------
meanings set forth in the Plan.

     "Account" or "Accounts" shall mean the individual accounts established
      -------      --------
pursuant to Section 4.1 representing a Participant's allocable share of the
Trust Fund.  Such Accounts may include:

          (a)  An "Employer Contribution Account" maintained to record the
amount of Employer Contributions, any net earnings or losses of the Trust Fund
thereon and any distributions or forfeitures thereof allocated to a Participant
in accordance with Article 4.

          (b)  A "Vested Employer Account" maintained to record the amount of
Employer Contributions, if any, made on behalf of a Participant prior to January
1, 1998 which were, under the terms of the Plan in effect at such time,
immediately nonforfeitable when contributed, and adjustments for net earnings or
losses of the Trust Fund thereon and any distributions or forfeitures thereof
allocated to a Participant in accordance with Article 4.
<PAGE>

          (c)  A "Before-Tax Account" maintained to record the amount of Before-
Tax Contributions, any net earnings or losses of the Trust Fund thereon and any
distributions thereof allocated to a Participant in accordance with Article 4.

          (d)  A "Matching Account" maintained to record the amount of Matching
Employer Contributions and forfeitures, any net earnings or losses of the Trust
Fund thereon and any distributions thereof allocated to a Participant in
accordance with Article 4.

          (e)  A "Prior Plan Account" maintained to record the balance of any
account under a Prior Plan, other than the McHenry Plan Account and the Heritage
Plan Account, attributable to amounts other than after-tax contributions which
is transferred to the Trust Fund, adjustments for net earnings or losses of the
Trust Fund thereon and any distributions thereof allocated to a Participant in
accordance with Article 4.

          (f)  A "Heritage Plan Account" maintained to record the balance of any
contributions made on behalf of a Participant under the Heritage Plan,
adjustments for net earnings or losses of the Trust Fund thereon and any
distributions thereof allocated to a Participant in accordance with Article 4.

          (g)  A "McHenry Plan Account" maintained to record the balance of any
discretionary employer contributions made on behalf of a Participant under the
McHenry Plan, adjustments for net earnings or losses of the Trust Fund thereon
and any distributions thereof allocated to a Participant in accordance with
Article 4.

          (h)  An "After-Tax Account" maintained to record the balance of any
account under a Prior Plan attributable to after-tax contributions which is
transferred to the Trust Fund, adjustments for net earnings or losses of the
Trust Fund thereon and any distributions thereof allocated to a Participant in
accordance with Article 4.

          (i)  A "Rollover Account" maintained to record the balance of any
Rollover Contribution pursuant to Section 3.6, any net earnings or losses of the
Trust Fund thereon and any distributions thereof allocated to a Participant in
accordance with Article 4.  To the extent applicable to any Rollover Account, an
after-tax sub-account shall be maintained as part of the Participant's Rollover
Account to record the balance of any account under a Prior Plan or Rollover
Contribution attributable to after-tax contributions, any net earnings or losses
of the Trust Fund thereon and any distributions thereof allocated to a
Participant in accordance with Article 4.

     Active Participant.  "Active Participant" means a Participant who, on a
     ------------------
given date, is employed by the Employer as an Eligible Employee.

     Affiliate.  "Affiliate" means any corporation or enterprise, other than the
     ---------
Company, which, as of a given date, is a member of the same controlled group of
corporations, the same group of trades or businesses under common control or the
same affiliated service group, determined in

                                       2
<PAGE>

accordance with Sections 414(b), (c), (m) or (o) of the Code, as is the Company.
For purposes of applying the limitations of Section 415 of the Code set forth in
Article 4, "Affiliate" shall include any corporation or enterprise, other than
the Company, which, as of a given date, is a member of the same controlled group
of corporations or the same group of trades or businesses under common control,
determined in accordance with Sections 414(b) or (c) of the Code as modified by
Section 415(h) thereof, as is the Company.

     Annual Addition.  "Annual Addition" means for any Limitation Year, the sum
     ---------------
of (a)  all Before-Tax Contributions, Matching Employer Contributions, Employer
Contributions, forfeitures and after-tax contributions allocated to the accounts
of the Participant under this Plan; (b) any employer contributions, forfeitures
and employee after-tax contributions  allocated to such Participant under any
other defined  contribution plan maintained by an Employer or Affiliate; and (c)
amounts allocated to an individual medical account as defined in Code Section
415(l)(2) and amounts attributable to post-retirement medical benefits allocated
to an account described in Code Section 419A(d)(2) maintained by the Employer or
an Affiliate.

     Before-Tax Contribution.  "Before-Tax Contribution" means, with respect to
     -----------------------
a Participant, the contributions of the Employer on his behalf as described in
Section 3.2 and, with respect to the Employer, means the sum of such
contributions.

     Board of Directors.  "Board of Directors" means the Board of Directors of
     ------------------
the Company.

     Code.  "Code" means the Internal Revenue Code of 1986, as from time to time
     ----
amended.

     Committee.  "Committee" means the plan administrator and named fiduciary
     ---------
appointed pursuant to Section 8.1.

     Company.  The "Company" means First Midwest Bancorp, Inc., a corporation
     -------
organized and existing under the laws of the State of Delaware.

     Considered Compensation.  A Participant's "Considered Compensation" for any
     -----------------------
Plan Year is his Total Compensation, excluding any severance or transitional
pay, received from an Employer during such Plan Year paid while he was a
Participant; provided, however, Considered Compensation shall not include any
amount in excess of  $150,000, as adjusted for increases in the cost of living
in accordance with Code Section 401(a)(17)(B).

     Defined Contribution Dollar Limitation.  The "Defined Contribution Dollar
     --------------------------------------
Limitation" shall, for any Limitation Year, be equal to the greater of (a)
$30,000 or (b) one-fourth of the dollar limitation set forth in Code Section
415(b)(1)(A) (as such dollar limitation may be adjusted in accordance with Code
Section 415(b)) in effect for such Limitation Year.

     Determination Date.  A Participant's "Determination Date" is the Valuation
     ------------------
Date coinciding with or next succeeding his termination of employment.

                                       3
<PAGE>

     Early Retirement Date.  A Participant's "Early Retirement Date" is the date
     ---------------------
on which he has completed at least 15 Years of Service and attained age 55.
Notwithstanding the foregoing, with respect to any Participant who formerly
participated in the Heritage Plan and was an employee of Heritage Bank Country
Club Hills (f/n/a 1st Heritage Bank) on January 13, 1992, the effective date of
its acquisition by Heritage Financial Services, "Early Retirement Date" means
the date on which such Participant attains his 55th birthday and has completed
five Years of Service.  For purposes of Section 4.6, "Early Retirement Date"
also includes a retirement date designated by an Employer in connection with the
Participant's election to participate in a voluntary retirement program offered
by the Participant's Employer.  Retirement shall be considered as commencing on
the day immediately following a Participant's last day of employment (or
Authorized Leave of Absence, if later).

     Eligible Employee.  An "Eligible Employee" is any employee of the Employer
     -----------------
who is not a Member of a Collective Bargaining Unit or a Leased Employee.
Notwithstanding the foregoing, however, any employee of an Employer who was
hired on or after January 1, 1996 and before January 1, 1998 and who was in a
job classification for which compensation was based primarily on sales
commissions, including, without limitation, Mortgage Loan Specialists and
Commissioned Loan Originators, was not an "Eligible Employee" for any portion of
the 1996 and 1997 Plan Years during which the employee was employed in such job
classification.

     Eligible Participant.  An "Eligible Participant" is a Participant as
     --------------------
defined in Section 4.6.

     Eligibility Period.  An "Eligibility Period" is a one-year period used for
     ------------------
the purpose of determining when an employee is eligible to participate in the
Plan.  An employee's first Eligibility Period shall commence on the date on
which he first completes an Hour of Service and subsequent Eligibility Periods
shall commence on each anniversary thereof; provided, however, that subsequent
Eligibility Periods shall commence on the first day of each Plan Year which
begins after the date on which the Participant first completes an Hour of
Service.  Notwithstanding the foregoing, the initial Eligibility Period of a
former employee who is reemployed after incurring one or more One-Year Breaks in
Service and who is not eligible for immediate participation pursuant to Section
2.1(c) shall commence on the date on which he first performs duties for the
Employer or an Affiliate after such One-Year Break in Service, and subsequent
Eligibility Periods shall commence on the anniversary thereof or on the first
day of each Plan Year which begins after said date, as determined by applying
the preceding sentence as if such date were the first date on which the
Participant first completed an Hour of Service.

     Employer.  "Employer" means the Company or any such Affiliate thereof which
     --------
adopts the Plan in accordance with Article 11.

     Employer Contribution.  "Employer Contribution" is the contribution
     ---------------------
referred to in Section 3.4.

                                       4
<PAGE>

     Employment Commencement Date.  An individual's "Employment Commencement
     ----------------------------
Date" is the first date on which he performs duties for the Employer or an
Affiliate as an employee; provided that in the case of an employee who returns
to service following his Severance Date, the employee's "Employment Commencement
Date" is the first date on which he performs duties for the Employer or an
Affiliate as an employee following such Severance Date.

     Entry Date.  January 1 and July 1 of each Plan Year shall be an "Entry
     ----------
Date."

     ERISA.  "ERISA" means the Employee Retirement Income Security Act of 1974,
     -----
as from time to time amended.

     Excess Tentative Contribution.  "Excess Tentative Contribution" is the
     -----------------------------
excess contribution described in Section 4.11(d).

     Five-Percent Owner.  "Five-Percent Owner" means a five-percent owner of the
     ------------------
Employer or an Affiliate within the meaning of Section 414(i)(1) of the Code.

     Heritage Fund. "Heritage Fund" means the Fund established and maintained
     -------------
under Section 9.5(a)(iv) of the Plan.

     Heritage Plan.  "Heritage Plan" means the Heritage Financial Services
     -------------
Profit Sharing Plan as in effect on September 30, 1998, which was merged into
this Plan effective October 1, 1998.

     Highly Compensated Employee.  "Highly Compensated Employee" means,
     ---------------------------
effective January 1, 1997, an employee of the Employer or an Affiliate who was a
Participant eligible during the Plan Year to make Before-Tax Contributions and
who:

          (a)  was a Five-Percent Owner at any time during the Plan Year; or;

          (b)  received Section 415 Compensation in excess of $80,000 (as
adjusted for increases in the cost of living by the Secretary of the Treasury)
during the preceding Plan Year and was among the top 20% of the employees
(disregarding those employees excludable under Code Section 415(q)(5)) when
ranked on the basis of Section 415 Compensation paid for that year.

     To the extent required by Code Section 414(q)(6), a former employee who was
a  Highly Compensated Employee when he or she separated from service with the
Employer and all Affiliates or at any time after attaining age 55 shall be
treated as a Highly Compensated Employee.

     Hour of Service.  An "Hour of Service" is:
     ---------------

          (a)  each hour for which an employee is paid or entitled to payment
for the performance of duties for the Employer or an Affiliate;

                                       5
<PAGE>

          (b)  each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an Affiliate; and

          (c)  each hour for which an employee is paid or entitled to payment
for a period during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness,
incapacity, layoff, jury duty, military duty, or leave of absence. In crediting
Hours of Service pursuant to this subparagraph (c), all payments made or due
shall be taken into account, whether such payments are made directly by the
Employer or an Affiliate or indirectly (e.g., through a trust fund or insurer to
                                        ----
which the Employer or an Affiliate makes payments, or otherwise), except that:

               (i)   no more than 501 such Hours of Service shall be credited
     for any continuous period during which the employee performs no duties;

               (ii)  no such Hours of Service shall be credited if payments are
     made or due under a plan maintained solely for the purpose of complying
     with any workers' compensation, unemployment compensation or disability
     insurance laws; and

               (iii) no such Hours of Service shall be credited for payments
     which are made solely to reimburse the employee for medical or medically
     related expenses.

The Hours of Service, if any, for which an employee is credited for a period in
which he performs no duties shall be computed and credited to computation
periods in accordance with 29 C.F.R. 2530.200b-2 and other applicable
regulations promulgated by the Secretary of Labor. For purposes of computing the
Hours of Service to be credited to an employee for whom a record of hours worked
is not maintained, an employee shall be credited with 45 Hours of Service for
each week in which he completes at least one Hour of Service. In addition, an
employee shall be credited with Hours of Service for each week the employee is
on a leave of absence in accordance with Section 2.2.

     Individual Beneficiary.  "Individual Beneficiary" means a natural person
     ----------------------
designated by the Participant in accordance with Section 6.5 to receive all or
any portion of the amounts remaining in the Participant's Accounts at the time
of the Participant's death. "Individual Beneficiary" also means a natural person
who is a beneficiary of a trust designated by the Participant in accordance with
Section 6.5 to receive all or a portion of such amount, provided the trust
requires that such amounts be paid to the beneficiary in the time and manner
that this Plan would require that direct payments be made to an Individual
Beneficiary.

     Leased Employee.  "Leased Employee" means, effective January 1, 1997, any
     ---------------
individual who is not an employee of the Employer or an Affiliate and who
provides services for the Employer or an Affiliate if:

          (a)  such services are provided pursuant to an agreement between the
Employer or an Affiliate and any other person;

                                       6
<PAGE>

          (b)  such individual has performed such services for the Employer or
an Affiliate (or a related person within the meaning of Section 144(a)(3) of the
Code) on a substantially full-time basis for a period of at least one year; and

          (c)  such services have been performed under the primary direction or
control of the Employer or an Affiliate.

     Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the Employer shall
be treated as provided by the Employer. To the extent and for purposes required
by Sections 414(n) and (o), a Leased Employee shall be deemed to be an Employee
of the Employer, unless:  (i) he or she is covered by a money purchase pension
plan providing (1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Code Section 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code Sections 125, 401(e)(3),
402(h) or 403(b), (2) immediate participation, and (3) full and immediate
vesting; and (ii) Leased Employees do not constitute more than 20 percent of the
Employer's nonhighly compensated workforce.

     Limitation Year.  "Limitation Year" means a 12-month period beginning
     ---------------
January 1 and ending December 31.

     Matching Employer Contributions.  "Matching Employer Contributions" means
     -------------------------------
the contributions described in Section 3.5.

     McHenry Plan.  "McHenry Plan" means the McHenry State Bank Profit Sharing
     ------------
and Savings Plan & Trust, as in effect prior to its merger with this Plan
effective December 31, 1997.

     Member of a Collective Bargaining Unit.  "Member of a Collective Bargaining
     --------------------------------------
Unit" means any employee who is included in a collective bargaining unit and
whose terms and conditions of employment are covered by a collective bargaining
agreement if there is evidence that retirement benefits were the subject of
good-faith bargaining between representatives of such employee and the Employer,
unless such collective bargaining agreement makes this Plan applicable to such
employee.

     Non-Highly Compensated Employee.  "Non-Highly Compensated Employee" means,
     -------------------------------
for any Plan Year, any employee of the Employer or Affiliate who (a) at any time
during the Plan Year was a Participant eligible to make Before-Tax
Contributions, and (b) was not a Highly Compensated Employee for such Plan Year.

     Normal Retirement Date.  A Participant's "Normal Retirement Date" shall be
     ----------------------
his 65th birthday.

     One-Year Break in Service.  A "One-Year Break in Service" is a one-year
     -------------------------
period, commencing on an employee's Severance Date, during which such employee
does not perform

                                       7
<PAGE>

duties for an Employer or an Affiliate. Solely for purposes of determining
whether a One-Year Break in Service has occurred, absences shall be disregarded
if the employee otherwise would normally have been credited but for the
employee's absence because of a maternity or paternity absence. No more than one
year of absence on a single maternity or paternity absence shall be so
disregarded. A maternity or paternity absence is an absence from work:

          (a)  by reason of the pregnancy of the employee;

          (b)  by reason of the birth of a child of the employee;

          (c)  by reason of the placement of a child with the employee in
connection with the adoption of such child by the employee; or

          (d)  for purposes of caring for such child for a period beginning
immediately following such birth or placement.

Any employee requesting such credit shall promptly furnish the Committee such
information as the Committee requires to show that the absence from work is a
maternity or paternity absence and the number of days for which there was such
an absence.  No more than 501 hours shall be credited for a maternity or
paternity absence.  All such hours shall be credited in the Plan Year in which
the absence begins if necessary to prevent a One-Year Break in Service in such
Plan Year.  If such hours are not necessary to prevent  a One-Year Break in
Service in such Plan Year, the hours shall be credited in the succeeding Plan
Year if necessary to prevent a One-Year Break in Service in such Plan Year.  In
the event the Committee is unable to determine the hours which otherwise would
normally have been credited for such absence, the employee shall be credited
with 8 hours per day.

     Participant.  A "Participant" is (a) a current employee of the Employer or
     -----------
an Affiliate who has become eligible to participate in the Plan pursuant to
Section 2.1 or (b) a former employee for whose benefit an Account in the Trust
Fund is maintained.  Notwithstanding the foregoing, an Eligible Employee who is
not otherwise a Participant and who makes a Rollover Contribution to the Plan
pursuant to Section 3.6 shall also be treated as a Participant solely to the
extent of such Rollover Contribution until such time as the Eligible Employee
has become eligible to participate in the Plan pursuant to Section 2.1

     Plan.  "Plan" means the First Midwest Bancorp, Inc. Savings and Profit
     ----
Sharing Plan as set forth herein and as from time to time amended.

     Plan Year.  A "Plan Year" is a 12-month period beginning on January 1 and
     ---------
ending on December 31.  References to specific Plan Years are made herein by
reference to the calendar year in which the Plan Year began.  For example, the
"1998 Plan Year" is the Plan Year beginning January 1, 1998.

                                       8
<PAGE>

     Prior Plan.  "Prior Plan" means a defined contribution plan maintained or
     ----------
previously maintained by an Employer from which accounts held for the benefit of
individuals who have become Participants hereunder have been transferred to this
Plan for the benefit of such Participants.

     Provisional Annual Addition.  "Provisional Annual Addition" is the amount
     ---------------------------
described in Section 4.10.

     Required Beginning Date.  "Required Beginning Date" means, effective
     -----------------------
January 1, 1997, as follows:

          (a)  For a Participant whose 70th birthday occurs prior to July 1,
1998, and who is not a Five-Percent Owner as defined in Code Section 416(i)(1),
the April 1 following the calendar year in which the Participant attains age 70
1/2;

          (b)  For a Participant whose 70th birthday occurs on or after July 1,
1998, and who is not a Five Percent Owner as defined in Code Section 416(i)(1),
the April 1 following the later of the calendar year in which the Participant
attains age 70 1/2 or the calendar year in which the Participant terminates
employment; or

          (c)  For a Participant who is a Five-Percent Owner with respect to the
Plan Year in which he/she attains age 70 1/2, the April 1 following the calendar
year in which he/she attained age 70 1/2.

     Rollover Contribution.  A "Rollover Contribution" is (a) all or a portion
     ---------------------
of a distribution received by an Eligible Employee from another qualified plan
which is eligible for tax-free rollover to a qualified plan and which is
transferred by the Eligible Employee to this Plan within 60 days following his
or her receipt thereof; (b) amounts transferred to this Plan from a conduit
individual retirement account which has no assets other than assets (and the
earnings thereon) which were (i) previously distributed to the Eligible Employee
by another qualified plan as a rollover distribution, (ii) eligible for tax-free
rollover to a qualified plan and (iii) deposited in such conduit individual
retirement account within 60 days of receipt thereof; (c) amounts distributed to
the Eligible Employee from a conduit individual retirement account meeting the
requirements of the preceding clause (ii), and transferred by the Eligible
Employee to this Plan within 60 days of receipt thereof; and (d) a direct
rollover within the meaning of Code Section 401(a)(31) or all or a portion of an
Eligible Rollover Distribution to this Plan by the trustee of another qualified
plan.

     Section 415 Compensation.  "Section 415 Compensation" means, effective
     ------------------------
January 1, 1997, for a period,  the Participant's compensation (as described in
Treasury Regulation Section 1.415-2(d)(2)) paid during the period for personal
services actually rendered in the course of employment with the Employer and all
Affiliates, excluding deferred compensation and other amounts which receive
special tax treatment (as described in Treasury Regulation Section 1.415-
2(d)(3)), plus amounts excluded from the Participant's income for the period
under Code Section 125, 402(g)(3) or 457.

                                       9
<PAGE>

     Severance Date.  An employee "Severance Date" is the earlier of:
     --------------

          (a)  the date on which he quits, retires, dies or is discharged; or

          (b)  the first day following any one-year period during which he
performed no duties for the Employer or an Affiliate, other than a period which
is a period of a leave of absence described in Section 2.2.

     Taxable Compensation.  A Participant's "Taxable Compensation" for any Plan
     --------------------
Year is his Total Compensation for such Plan Year less his Before-Tax
Contribution and any contributions made at his election to a cafeteria plan as
defined in Section 125 of the Code for such Plan Year.

     Tentative Employer Contribution.  "Tentative Employer Contribution" is the
     -------------------------------
contribution described in Section 3.1.

     Total Compensation.  A Participant's "Total Compensation" for a period is
     ------------------
the Participant's wages, salaries, fees, vacation pay, Before-Tax Contribution,
contributions made at his election under a cafeteria plan as defined in Section
125 of the Code, and other amounts paid to him for personal services actually
rendered in the course of employment with the Company and all Affiliates,
including, but not limited to, commissions, compensation for services on the
basis of a percentage of profits, tips and bonuses, but (in accordance with
regulations prescribed by the Secretary of the Treasury) excluding:

          (a)  Contributions (other than the Before-Tax Contribution) made by
the Employer to a plan of deferred compensation to the extent that such are not
included in the gross income of the Participant in the year made; Employer
contributions to simplified employee pension plans which are excluded from
compensation by the Participant; and any distribution from any such plan other
than an unfunded non-qualified plan;

          (b)  Amounts realized from the exercise of a non-qualified stock
option or when restricted stock either becomes freely transferable or free from
a substantial risk of forfeiture;

          (c)  Amounts realized from the disposition of stock acquired under a
qualified stock option; and

          (d)  Other amounts which receive special tax benefits.

     Trust.  "Trust" means the First Midwest Bancorp, Inc. Savings and Profit
     -----
Sharing Trust established in accordance with Article 9.

     Trustee.  "Trustee" means the Trustee or Trustees under the Trust referred
     -------
to in Article 9.

     Valuation Date.  The last day of each quarter of each Plan Year shall be a
     --------------
"Valuation Date."

                                       10
<PAGE>

     Year of Service.  A "Year of Service" is a unit of service credited to an
     ---------------
employee pursuant to Sections 2.3 and 2.4, for purposes of determining the
percentage of the balance in a Participant's Employer Contribution Account which
is nonforfeitable.  An employee who is reemployed shall retain service credited
to him in his previous employment with the Employer or an Affiliate, except as
otherwise provided in the Plan.

                                   ARTICLE 2
                         Eligibility and Participation
                         -----------------------------

     2.1  Eligibility Requirements.
          ------------------------

          (a)  Every Participant on the effective date of the Plan as herein
restated shall continue as such subject to the provisions of the Plan.

          (b)  Every Eligible Employee who accepted employment with the Employer
in connection with the Company's acquisition of First of America Bank, Crystal
Lake Office, which was effective September 4, 1998, shall commence participation
in this Plan effective as of such date.

          (c)  Every Eligible Employee who is a participant in the Heritage Plan
on September 30, 1998 shall continue participation in this Plan effective
October 1, 1998.

          (d)  Every other Eligible Employee shall be eligible to participate,
if he is then employed by the Employer, on the Entry Date coinciding with or
next following the later of (i) the end of the first Eligibility Period in which
he completes 1,000 Hours of Service or (ii) his 21st birthday. Notwithstanding
any other provision of this Plan, hours of service with Heritage Financial
Services, Inc. and First of America Bank, Crystal Lake Office, shall be deemed
to be Hours of Service with the Employer under this Plan for purposes of this
Section 2.1.

          (e)  Any former employee of the Employer or an Affiliate who was a
Participant or could have become a Participant under subsection (b) above had he
been employed on a prior Entry Date, and is reemployed by the Employer as an
Eligible Employee shall be eligible to participate immediately upon reemployment
if, on the date of such reemployment, that employee:

               (i)   has not incurred a One-Year Break in Service; or

               (ii)  had a nonforfeitable right to any part of the balance in
     his Employer Contribution Account or Before-Tax Account on the date his
     most recent employment with the Employer and all Affiliates terminated (or
     would have had such right if he had been a Participant); or

               (iii) has attained age 21 and has incurred a One-Year Break in
     Service, but has not lost credit for service prior to such One-Year Break
     in Service pursuant to Section 2.4(b); or

                                       11
<PAGE>

               (iv)  terminated his employment because of a maternity or
     paternity absence defined in Section 1.4, has attained age 21, and has
     incurred a One-Year Break in Service, but has not lost credit for services
     prior to such One-Year Break in Service pursuant to Section 2.4(c).

     2.2  Leaves of Absence.  During the period that any Participant is granted
          -----------------
a leave of absence, he shall share in Employer Contributions, forfeitures, and
net earnings or losses of the Trust Fund in the same manner and subject to the
same conditions as if he were not on leave of absence. Any leave of absence
under this Section 2.2 must be granted in writing and pursuant to the Employer's
established leave policy, which shall be administered in a uniform and
nondiscriminatory manner to similarly situated employees.

     2.3  Years of Service to be Credited.
          -------------------------------

          (a)  An employee shall be credited with One Year of Service for each
full year in the period commencing on his Employment Commencement Date and
ending on his Severance Date. An employee shall also be credited with 1/12 of a
Year of Service for each full calendar month in such period for which he did not
receive credit pursuant to the preceding sentence, including, if applicable,
1/12 of a Year of Service for the partial calendar month in which the employee's
Employment Commencement Date and in which the employee's Severance Date
occurred. Notwithstanding any other provision of this Plan, the following
service shall be deemed to be service with the Employer for purposes of this
Section 2.3:  (i) with respect to any employee who commenced employment on or
prior to September 4, 1998, service with First of America Bank, Crystal Lake
Office; and (ii) with respect to any employee who commenced employment with the
Employer prior to October 1, 1998, service with Heritage Financial Services,
Inc.

          (b)  Notwithstanding Section 2.3(a) above, any Participant who, on
September 30, 1998, had completed three (3) years of service under the Heritage
Plan, shall be credited with Years of Service under this Section 2.3 equal to
the greater of:  (i) the Participant's Years of Service determined under Section
2.3(a) above; or (ii) the Participant's years of service calculated by crediting
him with one Year of Service for each Plan Year during which he has completed at
least 1,000 Hours of Service.

          (c)  An employee reemployed after his Severance Date but prior to a
One-Year Break in Service shall be credited with 1/12 of a Year of Service for
each calendar month or partial calendar month during the period from his
Severance Date to the date of reemployment not otherwise credited pursuant to
paragraph (a) above.

          (d)  Years of Service to be Disregarded.  A Participant shall be
               ----------------------------------
credited with all Years of Service, except that the following shall be
disregarded:

                                       12
<PAGE>

          (e)  Years of Service for an Employer or Affiliate prior to the
Employer's adoption of the Plan, except to the extent otherwise provided by the
Employer when adopting the Plan;

          (f)  Years of Service prior to a One-Year Break in Service if the
Employee fails to complete one Year of Service after such One-Year Break in
Service;

          (g)  In the case of an employee whose nonforfeitable percentage of the
balance of his Employer Contribution Account is 0%, the number of years and
portions thereof in the period after the employee's Severance Date but before he
next performs duties for the Employer or an Affiliate equals or exceeds the
greater of 5 or the aggregate number of Years of Service and portions thereof
before such One-Year Break in Service (excluding any years of Service previously
disregarded); or

          (h)  In the case of an employee whose nonforfeitable percentage of the
balance of his Employer Contribution Account is 0%, and who terminated his
employment with the Employer and all Affiliates because of a maternity or
paternity absence defined in Section 1.4, the number of years and portions
thereof in the period after the employee's Severance Date but before he next
performs duties for the Employer or an Affiliate equals or exceeds the greater
of six or one plus the aggregate number of Years of Service and portions thereof
before such One-Year Break in Service (excluding any Years of Service previously
disregarded).

          2.4  Leased Employees.  To the extent required by Section 414(n) of
               ----------------
the Code and the regulations thereunder, a Leased Employee shall be treated as
an employee of the Employer or an Affiliate but shall not be eligible for any
benefit under the Plan.

          2.5  Qualified Military Service.  Notwithstanding any provision of
               --------------------------
this Plan to the contrary, effective December 12, 1994, contributions, benefits
and service credit with respect to qualified military service will be provided
in accordance with Code Section 414(u).

                                       13
<PAGE>

                                   ARTICLE 3
             Contributions by Employer and Rollover Contributions
             ----------------------------------------------------

     3.1  Contributions to the Plan.  Subject to the right reserved to the
          -------------------------
Company to alter, amend or discontinue this Plan and Trust, the Employer shall
for each Plan Year contribute to the Plan for its Eligible Participants an
amount equal to the sum of:

          (a)  the Employer Contribution;

          (b)  the Before-Tax Contribution; and

          (c)  the Matching Employer Contribution.

Such sum, which is known as the "Tentative Employer Contribution," shall be
reduced by an amount equal to the Excess Tentative Contribution (as provided in
Section 4.11); provided that in no event shall the Tentative Employer
Contribution, as reduced by the Excess Tentative Contribution, exceed the amount
deductible by the Employer for said year for federal income tax purposes.

     3.2  Before-Tax Contribution.
          -----------------------

          (a)  Subject to the provisions of Sections 3.1 and 3.3, each
Participant may for each Plan Year elect to have the Employer make a Basic
Before-Tax Contribution on his or her behalf in an amount equal to one percent
(1%) (rounded to the nearest dollar) of his or her Considered Compensation,
excluding bonuses and any other payment of a similar nature.  Each Participant
may in addition to his or her Basic Before-Tax Contribution elect to have the
Employer make a Supplemental Before-Tax Contribution on his or her behalf in an
amount not in excess of 9% (rounded to the nearest dollar) of his or her
Considered Compensation, excluding bonuses and any other payment of a similar
nature.  Such elections shall be subject to change in accordance with procedures
established  by the Committee from time to time.

          (b)  The amount of the Before-Tax Contributions to be made pursuant to
a Participant's election shall reduce the compensation otherwise payable to him
by the Employer.

     3.3  Limitations on Before-Tax Contributions.
          ---------------------------------------

          (a)  In no event shall a Participant's Before-Tax Contributions during
any calendar year exceed the dollar limitation in effect under Code Section
402(g) at the beginning of such calendar year.  If a Participant's Before-Tax
Contributions, together with any additional employer contributions to a
qualified cash or deferred arrangement, any elective deferrals under a tax-
sheltered annuity program or a simplified employee pension plan, exceed such
dollar limitation for any calendar year, the Participant shall notify the
Committee of the amount of such excess allocable to

                                       14
<PAGE>

this Plan by March 1 of the following year, and such excess, and any earnings
allocable thereto, may be distributed to the Participant by April 15 of such
following year.

          (b)  Notwithstanding any other provision of this Plan to the contrary,
effective January 1, 1997, the Before-Tax Contributions and Matching Employer
Contributions for the Highly Compensated Employees for the Plan Year shall be
reduced in accordance with the following provisions:

               (i)  The Before-Tax Contributions and Matching Employer
     Contributions of the Highly Compensated Employees shall be reduced if
     neither of the Actual Deferral Percentage tests set forth in (A) or (B)
     below is satisfied after taking into account the provisions of subsection
     (f):

                    (A)  The 1.25 Test.  The  Actual Deferral Percentage of the
                         -------------
          Highly Compensated Employees is not more than the Actual Deferral
          Percentage of all other Eligible Participants multiplied by 1.25.

                    (B)  The 2.0 Test.  The Actual Deferral Percentage of the
                         ------------
          Highly Compensated Employees is not more than 2 percentage points
          greater than the Actual Deferral Percentage of all other Eligible
          Participants, and the Actual Deferral Percentage of the Highly
          Compensated Employees is not more than the Actual Deferral Percentage
          of all other Eligible Participants multiplied by 2.0.

               (ii)

                    (A)  As used in this subsection, "Actual Deferral
          Percentage" means:

                         (1)  With respect to Non-Highly Compensated
               Employees, the average of the ratios of each Non-Highly
               Compensated Employee's Before-Tax Contributions and
               share of the Matching Employer Contribution with
               respect to the prior Plan Year, to each such
                              -----
               Participant's Considered Compensation for such Plan
               Year; and

                         (2)  With respect to Highly Compensated
               Employees, the average of the ratios of each Highly
               Compensated Employee's Before-Tax Contributions and
               share of the Matching Employer Contribution with
               respect to the current Plan Year, to each such
                              -------
               Participant's Considered Compensation for such Plan
               Year.

                    (B)  All Before-Tax Contributions and Matching Employer
          Contributions made under this Plan and all before-tax and matching
          contributions

                                       15
<PAGE>

          made under any other plan that is aggregated with this Plan for
          purposes of Code Sections 401(a)(4) and 410(b) shall be treated as
          made under a single plan. If any plan is permissively aggregated with
          this Plan for purposes of Code Section 401(k), the aggregated plans
          must also satisfy Code Sections 401(a)(4) and 410(b) as though they
          were a single plan. The Actual Deferral Percentage ratios of any
          Highly Compensated Employee will be determined by treating all plans
          subject to Code Section 401(k) under which the Highly Compensated
          Employee is eligible as a single plan.

               (iii) If neither Actual Deferral Percentage test is satisfied as
     of the end of the Plan Year, the Committee shall cause the Before-Tax
     Contributions for the Highly Compensated Employees to be reduced and
     refunded to each Highly Compensated Employee until either Actual Deferral
     Percentage Test is satisfied.  The sequence of such reductions and refunds
     shall begin with Highly Compensated Employees who elected to defer the
     greatest dollar amount of Before-Tax Contributions, then the second
     greatest dollar amount, continuing  until  either Actual Deferral
     Percentage Test is satisfied.

               (iv)  Once the reductions have been determined under (iii) above,
     the Committee shall direct the Trustee to distribute to the appropriate
     Highly Compensated Employees the amount of the reduction of the Before-Tax
     Contributions of each Highly Compensated Employee and to treat as
     forfeitures the appropriate amount of Matching Employer Contributions,
     together with the net earnings or losses allocable thereto.  The Committee
     shall designate such distribution and forfeiture as a distribution and
     forfeiture of excess contributions, determine the amount of the allocable
     net earnings or losses to be distributed in accordance with subsection (c)
     below, and cause such distributions and forfeitures to occur prior to the
     end of the Plan Year following the Plan Year in which the excess Before-Tax
     Contributions and excess Matching Employer Contributions were made.

          (c)

               (i)   The net earnings or losses to be refunded with the excess
     Before-Tax Contributions shall be equal to the net earnings or losses on
     such contributions for the Plan Year in which the contributions were made.

               (ii)  The net earnings or losses allocable to the excess Before-
     Tax Contributions for the Plan Year shall be determined in the manner set
     forth in Article 4.

          (d)  Net earnings or losses to be treated as forfeitures together with
the Matching Employer Contributions shall be equal to the net earnings or losses
on such contributions for the Plan Year in which the contributions were made.
Net earnings or losses on Matching Employer Contributions shall be determined in
the same manner as in subsection (c) above.

          (e)  Any Matching Employer Contribution treated as a forfeiture
pursuant to subsection (b) above shall be used to reduce the Matching Employer
Contribution in Section 3.5.

                                       16
<PAGE>

          (f)  For the purpose of avoiding the necessity of adjustments pursuant
to this Section or Section 4.11, or to comply with any applicable law or
regulation:

               (i)  The Committee may adopt such rules as it deems necessary or
     desirable to:

                    (A)  impose limitations during a Plan Year on the percentage
          of Before-Tax Contributions elected by Participants pursuant to
          Section 3.2; or

                    (B)  increase during a Plan Year the percentage of
          Considered Compensation with respect to which a Participant may elect
          a Before-Tax Contribution for the purpose of providing Participants
          with the opportunity to increase their Before-Tax Contributions within
          the limitations of this Section 3.3;

               (ii) The Employer may at its sole discretion make fully vested
     contributions to the Plan which will be allocated to the Before-Tax
     Accounts of one or more Participants who are Non-Highly Compensated
     Employees in such amounts as the Employer directs for the purpose of
     complying with the applicable limits on Before-Tax Contributions in the
     Code.  Such contributions will not be taken into account in the allocation
     of Matching Contributions.

          (g)  The amount of each Eligible Participant's Before-Tax Contribution
as determined under this Section 3.3 is subject to the provisions of Sections
4.11 and 4.12.

     3.4  Employer Contribution.  Subject to the provisions of Section 3.1, each
          ---------------------
Employer shall pay to the Trustee for each Plan Year with respect to its
Participants who are Eligible Participants for purposes of the allocation of the
Employer Contribution pursuant to Section 4.9, such amount as may be determined
by its board of directors, based on guidelines established by the Board of
Directors.  The amount so determined shall be no greater than 15% of such
Eligible Participants' Considered Compensation.  Such amount paid to the Trustee
pursuant to this Section 3.4 is known as the "Employer Contribution."

     3.5  Matching Employer Contribution.  Subject to the provisions of Section
          ------------------------------
3.1,  each Employer shall pay to the Trustee as of each Valuation Date an amount
which, when added to the forfeitures of Employer Contributions for the Plan
Year, shall be equal to $2 for each $1 of Basic Before-Tax Contributions made
during the calendar quarter ending on the Valuation Date on behalf of:  (a) each
Participant employed by such Employer on the Valuation Date as of which the
contribution is made; and (b) each Participant who, prior to such Valuation
Date, (i) retires on or after his Normal Retirement Date or Early Retirement
Date, (ii) dies, (iii) is initially deemed totally and permanently disabled, or
(iv) as expressly provided in the terms of an agreement approved, or a
resolution adopted, by the board of directors of an Employer in connection with
the termination of the Employer's participation in the Plan during the calendar
quarter, provided such agreement or resolution was authorized by the Board of
Directors.  Notwithstanding the foregoing, however, for

                                       17
<PAGE>

the period commencing October 1, 1998 and ending on December 31, 1998 (the
"Incentive Period"), each Employer shall pay to the Trustee, as of December 31,
1998, an amount equal to $8 for each $1 of Basic Before-Tax Contributions made
on behalf of each Participant who is employed by such Employer on December 31,
1998 and who first became a Participant on or before January 1, 1998, and each
such Participant who retired on or after his Normal Retirement Date or Early
Retirement Date, died, or was initially deemed totally and permanently disabled
during the Incentive Period; provided, however, the total amount contributed by
the Employer under this Section with respect to any such Participant for the
Plan Year ending on December 31, 1998 shall not exceed two percent (2%) of the
lesser of (i) the product of the Participant's Total Compensation for the
Incentive Period multiplied by four (4), or (ii) $160,000. With respect to any
Participant who is employed by an Employer on December 31, 1998, and who first
became a Participant on July 1, 1998, and each such Participant who retired on
or after his Normal Retirement Date or Early Retirement Date, died, or was
initially deemed totally and permanently disabled during the Incentive Period,
the Employer shall pay to the Trustee, as of December 31, 1998, an amount equal
to $4 for each $1 of Basic Before-Tax Contributions made on behalf of each such
Participant; provided, however, the total amount contributed by the Employer
under this Section with respect to any such Participant for the Plan Year ending
on December 31, 1998 shall not exceed two percent (2%) of the lesser of (i) the
Participant's Total Compensation for the Incentive Period multiplied by two (2),
or (ii) $80,000. With respect to any Participant who made Basic Before-Tax
Contributions during the Plan Year ending on December 31, 1998, and who was
unable to continue to make Basic Before-Tax Contributions during the Incentive
Period because the limitations of Plan Section 3.3(a) were imposed earlier in
such Plan Year, then, subject to the limitations of Sections 3.1 and 3.3(b), for
purposes of determining the entitlement of such Participant to an allocation of
contributions under this Section 3.5, such Participant shall be deemed to have
made the maximum Basic Before-Tax Contribution permissible under Plan Section
3.2 during the Incentive Period. The Employer contributions made pursuant to
this Section 3.5 shall be known as the "Matching Employer Contributions."

     3.6  Rollover Contributions.  A Participant or Eligible Employee may with
          ----------------------
the written consent of the Committee make a Rollover Contribution to the Trust
Fund.  The Committee may adopt such rules and limitations as it deems necessary
or appropriate with respect to the approval of Rollover Contributions, including
but not limited to the time period or periods during which such requests may be
made and the frequency of such requests.

                                       18
<PAGE>

                                   ARTICLE 4
                     Accounting Provisions and Allocations
                     -------------------------------------

     4.1  Participant's Accounts.
          ----------------------

          (a)  For each Participant there shall be maintained as appropriate a
separate Employer Contribution Account, Vested Employer Account, Before-Tax
Account, Matching Account, Prior Plan Account, Heritage Plan Account, McHenry
Plan Account, After-Tax Account, Rollover Account and Trustee Transfer Account.
Each account shall be credited with the amount of contributions, interest and
earnings of the Trust Fund allocated to such Account and shall be charged with
all distributions, withdrawals and losses of the Trust Fund allocated to such
Account.

     4.2  Common Fund.
          -----------

          (a)  The Trust Fund shall be a common fund divided into separate
investment funds ("Funds") as provided in Section 9.5.  Each Fund as may from
time to time be established shall be a common fund in which each Participant and
Beneficiary shall have an undivided interest in the respective assets of the
Fund, provided that all Accounts segregated and all loans made pursuant to
Section 6.8 shall together with the net earnings or losses of such Accounts or
loans be accounted for separately and will not be included in any of the
adjustments resulting from the application of this Section 4.2.  Except as
otherwise provided, the value of each Participant's Accounts in each Fund shall
be measured by the proportion that the net credits to his Accounts bear to the
total net credits to all Accounts as of the date such share is being determined.
For purposes of allocation of the net earnings and losses and for the valuation
of the Trust Fund, each Fund shall be considered separately. No Fund shall share
in the net earnings or losses of any other, and no Fund shall be valued by
taking into account any assets or distributions for any other.

          (b)  Each loan made pursuant to Section 6.8 shall be valued as of each
Valuation Date.  Any changes in value resulting from such valuation, together
with any income or expenses attributable thereto, shall be credited or charged
as of such Valuation Date to the Accounts of the Participant from which such
loan was made.

          (c)  Except as provided in Subsection (e) below, the interest of each
Participant and Beneficiary in the net earnings and losses and of the valuation
of one or more of the Funds may be measured by the value of the shares or units
of such Fund credited to the Participant's or Beneficiary's Accounts as of the
date that such valuation is being determined.  The value of a unit in each such
Fund on any Valuation Date shall be the quotient obtained by dividing the sum of
(i) the cash and (ii) the fair market value of all securities or property
allocated to such Fund, less any charges and expenses accrued and properly
chargeable to such Fund as of said Valuation Date, by the aggregate number of
units credited to all Accounts with respect to such Fund.  The Trustee will
furnish to the Committee a report with respect to the fair market value of all
securities and property held in any Fund as of each Valuation Date.  To the
extent that any assets of a Fund have been

                                       19
<PAGE>

invested in one or more separate investment trusts, mutual funds, investment
contracts or similar investment media, the net earnings and losses and valuation
attributable to such investments shall be determined in accordance with the
procedures of such investment media.

          (d)  Notwithstanding any other provision of the Plan, effective with
respect to the September 30, 1999 Valuation Date, dividends declared by the
Company with respect to Company common stock held in the Investment Funds
described in Sections 9.5(a)(ii) and 9.5(a)(iv) shall, for purposes of
determining and allocating net earnings or losses under Sections 4.4 and 4.5, be
deemed to have been paid to the Plan and held in the Trust as of the record date
for such dividends as declared by the Company, regardless of the date such
dividends are actually paid to the Plan and held in the Trust.

          (e)  Effective with respect to the September 30, 1999 Valuation Date,
notwithstanding any other Plan provision, the assets of the Investment Funds
described in Sections 9.5(a)(ii) and 9.5(a)(iv) shall be allocated to
Participants' Accounts in shares and fractional shares of Company common stock
and dividends receivable and cash, to the extent of such receivables or cash
then in the Fund.

     4.3  Allocation Procedure.  As of each Valuation Date, the Committee shall,
          --------------------
with respect to each Account:

          (a)  First, charge each Account for any withdrawals, loans or
distributions made therefrom since the preceding Valuation Date.

          (b)  Second, credit each Before-Tax Account with one-half of the
Before-Tax Contributions made by the Participant since the immediately preceding
Valuation Date.

          (c)  Third, credit each Rollover Contribution Account with the daily
weighted average of the amount of any Rollover Contribution made by the
Participant since the preceding Valuation Date.

          (d)  Fourth, credit any Accounts segregated pursuant to Article 6 with
one-half of the amount of any loan repayments made since the last Valuation
Date.

          (e)  Fifth, credit or charge the respective Accounts with the net
earnings or losses of each Fund allocable thereto in accordance with Section
4.5, or, in the case of Accounts segregated in accordance with Article 6, the
net earnings or losses allocable thereto in accordance with Article 6.

          (f)  Sixth, credit each Before-Tax Account, Matching Account and the
Rollover Account, respectively, with the amount of Before-Tax Contributions,
Matching Employer Contributions, and Rollover Contributions, respectively, made
since the preceding Valuation Date and not already allocated in accordance with
paragraphs (b), (c) and (d) above.

                                       20
<PAGE>

          (g)  Seventh, credit any Accounts segregated pursuant to Article 6
with the amount of any loan repayments made since the last Valuation Date and
not already allocated in accordance with paragraph (e) above.

          (h)  Eighth, if the Valuation Date is the last day of the Plan Year,
credit each Employer Contribution Account with the Employer Contribution
allocable thereto in accordance with Section 4.9.

     4.4  Determination of Value of Trust Fund and of Net Earnings or Losses.
          ------------------------------------------------------------------
As of each Valuation Date the Trustee shall determine for the period then ended
the sum of the net earnings or losses of the Trust Fund (excluding any gains and
losses attributable to the Accounts and loans to Participants segregated
pursuant to Article 6), which shall reflect accrued but unpaid interest, gains
or losses realized from the sale, exchange or collection of assets, other income
received, appreciation or depreciation in the fair market value of assets,
administration expenses, taxes and other expenses paid and, subject to Section
4.2(d), dividends. Gains or losses realized and adjustments for appreciation or
depreciation in fair market value shall be computed with respect to the
difference between such value as of the preceding Valuation Date or date of
purchase, whichever is later, and the value as of the date of disposition or the
current Valuation Date, whichever is earlier.

     4.5  Allocation of Net Earnings or Losses.  As of each Valuation Date, the
          ------------------------------------
net earnings or losses of the Trust Fund or of each Fund established under
Section 4.2 for the quarter then ended shall be allocated to the Accounts
(excluding Accounts and loans to Participants segregated pursuant to Section
6.8) of all Participants (or beneficiaries of deceased Participants) having
credits in the Trust Fund or Fund both on such date and at the beginning of that
quarter. Such allocation shall be in the ratio that (i) the net credits to each
Account of each Participant on the first day of the quarter, plus in the case of
the Before-Tax Account, one-half of any Before-Tax Contributions made to that
Account during the quarter, or in the case of the Rollover Account, the weighted
average daily balance of any Rollover Contribution made to that Account during
the quarter, less in each case the total amount of any distributions and loans
from such Account to such Participant during that quarter bears to (ii) the
total net credits to all such Accounts of all Participants on said first day of
the quarter, plus, in the case of the Before-Tax Accounts, one-half of the
Before-Tax Contributions made to such Accounts of all Participants, and in the
case of the Rollover Accounts, the weighted average daily balances of any
Rollover Contributions made to that Account during the quarter, less the total
amount of distributions and loans from all such Accounts during the quarter.

     4.6  Eligibility to Share in the Employer's Contributions.
          -----------------------------------------------------

          (a)  An Active Participant shall be eligible to share in Employer
Contributions for the Plan Year as of the last day of which such Employer
Contributions are being allocated if he or she is then employed by the Employer
as an Eligible Employee and has completed 1,000 Hours of Service in such Plan
Year. A Participant who, during a Plan Year, (i) retires on or after his Normal
Retirement Date or Early Retirement Date, (ii) dies, (iii) is initially deemed
totally and permanently disabled, or (iv) as expressly provided in the terms of
an agreement approved or a

                                       21
<PAGE>

resolution adopted by the board of directors of an Employer in connection with
the termination of the Employer's participation in the Plan during the Plan
Year, provided such agreement or resolution was authorized by the Board of
Directors, shall also be eligible to share in the Employer Contributions for
said Plan Year. A Participant who is eligible to share in the Employer
Contributions shall be known as an "Eligible Participant."

          (b)  Notwithstanding anything in the Plan to the contrary, if the Plan
would otherwise fail to meet the requirements of Code Section 410(b) and the
regulations thereunder because Employer Contributions have not been allocated to
a sufficient number or percentage of Participants for a Plan Year, then the
following rules will apply:

               (i)   The group of Participants eligible to share in the Employer
     Contribution for the Plan Year will be expanded to include the minimum
     number of Participants who would not otherwise be eligible as are necessary
     to satisfy the applicable test specified above. The specific Participants
     who will become eligible under the terms of this paragraph will be those
     who are actively employed on the last day of the Plan Year and, when
     compared to similarly situated Participants, have completed the greatest
     number of Hours of Service in the Plan Year.

               (ii)  If after application of the previous paragraph, the
     applicable test is still not satisfied, then the group of Participants
     eligible to share in the Employer Contribution for the Plan Year will be
     further expanded to include the minimum number of former Participants who
     are (A) not employed on the last day of the Plan Year, (B) Non-Highly
     Compensated Employees and (C) are vested or partially vested in their
     Accounts, as are necessary to satisfy the applicable test. The specific
     former Participants who will become eligible under the terms of this
     paragraph will be those former Participants, when compared to similarly
     situated former Participants, who have completed the greatest number of
     Hours of Service in the Plan Year before terminating employment.

               (iii) Nothing in this Section will permit the reduction of a
     Participant's benefit. Therefore any amounts that have previously been
     allocated to Participants may not be reallocated to satisfy these
     requirements. In the event allocations to additional Participants or former
     Participants are required, the Employer will make an additional
     contribution equal to the amount such persons would have received had they
     been included in the allocations, even if it exceeds the amount which would
     be deductible under Code Section 404. Any adjustment to the allocations
     pursuant to this Section will be made by the 15th day of the tenth month
     after the end of the Plan Year and will be considered a retroactive
     amendment adopted by the last day of the Plan Year.

                                       22
<PAGE>

     4.7  Allocation of Before-Tax Contributions.  As of each Valuation Date,
          --------------------------------------
the Before-tax Contributions made on behalf of each Participant since the prior
Valuation Date shall be allocated to such Participant's Before-Tax Account.

     4.8  Allocation of Matching Employer Contributions.  As of  each Valuation
          ---------------------------------------------
Date, the sum of the Matching Employer Contributions made on behalf of each
Participant in accordance with Section 3.5 of the Plan shall be allocated to the
Matching Account of each such Participant.

     4.9  Allocation of Employer Contribution.  As of the last day of each Plan
          -----------------------------------
Year, the Employer Contribution shall be allocated among the Employer
Contribution Accounts of all Eligible Participants in the ratio that each such
Participant's Considered Compensation for the Plan Year from that Employer bears
to the total Considered Compensation of all such Eligible Participants from that
Employer for the Plan Year.

     4.10 Provisional Annual Addition.  The sum of the amounts allocated to the
          ---------------------------
Accounts of the Participants pursuant to Section 4.7, 4.8 and 4.9 for a Plan
Year shall be known as the "Provisional Annual Addition" and shall be subject to
the limitation on Annual Additions in Section 4.11.

     4.11 Limitation on Annual Additions.
          ------------------------------

          (a)  For the purpose of complying with the restrictions on Annual
Additions to defined contribution plans imposed by Code Section 415, for each
Eligible Participant and each other Participant who has made Before-Tax
Contributions during the Plan Year, there shall be computed a Maximum Annual
Addition, which shall be the excess of the lesser of

               (i)  25% of his Section 415 Compensation for the Plan Year; or

               (ii) the Defined Contribution Dollar Limitation for the Plan
                    Year,

over the amount of employer contributions, forfeitures and employee
contributions allocated as of any day in the Limitation Year to such
Participant's accounts under any other defined contribution plan maintained by
the Employer or an Affiliate.

If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different 12 consecutive month period, the Maximum Annual
Addition will not exceed the Defined Contribution Dollar Limitation multiplied
by the following fraction:

                 Number of months in the short Limitation Year
                 ---------------------------------------------
                                      12

The limitation under (i) above shall not apply to any contribution for medical
benefits within the meaning of Code Section 419A(f)(2) after separation from
service which is otherwise treated as an

                                       23
<PAGE>

Annual Addition, or any amount otherwise treated as an annual addition under
Code Section 415(l)(2).

          (b)  If the Maximum Annual Addition for a Participant equals or
exceeds the Provisional Annual Addition for that Participant, an amount equal to
the Provisional Annual Addition shall be allocated to the Participant's
respective Accounts.

          (c)  If the Provisional Annual Addition exceeds the Maximum Annual
Addition for that Participant, the Provisional Annual Addition shall be reduced
as set forth below until the Provisional Annual Addition as so reduced equals
the Maximum Annual Addition for such Participant:

               (i)   first, the Tentative Employer Contribution allocable to
     such Participant's Employer Contribution Account shall be reduced;

               (ii)  second, the amount of forfeiture allocable to the
     Participant's Matching Employer Account shall be reduced;

               (iii) third, the Supplemental Before-Tax Contributions shall be
     reduced; and

               (iv)  finally, the Basic Before-Tax Contributions and Matching
     Employer Contributions, proportionately, shall be reduced.

The Provisional Annual Addition remaining after such reductions shall be
allocated to the Participant's respective Accounts.

          (d)  The "Excess Tentative Employer Contribution" is an amount equal
to the sum of the reductions in the Tentative Employer Contribution allocable to
the Accounts of Participants pursuant to subsections (c)(i), (iii) and (iv)
above.

          (e)  Notwithstanding anything to the contrary in this Plan, any
Before-Tax Contributions reduced in accordance with subsection (c) above shall
be distributed to the Participant with allocable earnings in accordance with
Treasury Regulation Section 1.415-6(b)(6)(iv).

     4.12 Special Limitation on Maximum Contribution.  (Effective through the
          ------------------------------------------
1999 Plan Year)

          (a)  In the case of any Participant who is also a participant in a
defined benefit plan maintained by the Employer or an Affiliate, the sum of the
Defined Contribution Fraction and Defined Benefit Fraction as of the end of any
Plan Year shall not exceed 1.0. In the event that the sum of such Fractions
would otherwise exceed 1.0, then the amount determined under Section 4.11(a)(i)
or (ii), whichever is applicable, in determining the Maximum Annual Addition
under

                                       24
<PAGE>

Section 4.11(a) shall be equal to such applicable amount multiplied by the
difference between 1.0 and the Defined Benefit Fraction.

          (b)  The "Defined Benefit Fraction" applicable to a Participant for
any Limitation Year is a fraction, the numerator of which is the sum of the
Projected Annual Benefit of the Participant under all of the defined benefit
plans maintained or previously maintained by an Employer or Affiliate in which
he participates (determined as of the close of the Limitation Year) and the
denominator of which is the lesser of (i) the product of 1.25 multiplied by the
maximum dollar limitation on a Participant's Projected Annual Benefit if the
plan provided the maximum benefit allowable under Section 415(b) of the Internal
Revenue Code for such Limitation Year, or (ii) the product of 1.4 multiplied by
100% of the Participant's Highest Average Compensation (as determined below).

          (c)  The "Defined Contribution Fraction" applicable to a Participant
for any Limitation Year is a fraction, the numerator of which is the sum of the
Participant's Annual Additions as of the close of such Limitation Year for that
Limitation Year and for all prior Limitation Years under this Plan and all other
defined contribution plans maintained by an Employer or Affiliate, and the
denominator of which is the sum of the lesser of the following amounts
(determined for such Limitation Year and for each prior Limitation Year of
service with the Employer or any Affiliate regardless of whether a plan was in
existence during those years): (i) the product of 1.25 multiplied by the Defined
Contribution Dollar Limitation for the Limitation Year (determined without
regard to the special dollar limitation for employee stock ownership plans), or
(ii) the product of 1.4 multiplied by 25% of the Participant's Taxable
Compensation for the Limitation Year.

          (d)  In accordance with regulations issued by the Secretary of the
Treasury or his delegate pursuant to Section 1106(i)(4) of The Tax Reform Act of
1986, an amount shall be subtracted from the numerator of the Defined
Contribution Fraction (not exceeding such numerator) so that the sum of the
Defined Benefit Fraction and the Defined Contribution Fraction does not exceed
1.0 as of December 31, 1986. To the extent provided under applicable law and
regulations, adjustments shall be made to the Defined Benefit Fraction or the
Defined Contribution Fraction with respect to previous transition rules.

          (e)

               (i)  "Highest Average Compensation" means the average of a
     Participant's Taxable Compensation from the Employer and all Affiliates for
     the high three consecutive Limitation Years (determined as of the close of
     the Limitation Year) of employment with the Employer or any Affiliate (or
     the actual number of years of employment for those Participants who are
     employed for less than three consecutive years for which the Participant's
     Taxable Compensation is the highest).

               (ii) "Projected Annual Benefit" means the annual benefit a
     Participant would receive from employer contributions under a defined
     benefit plan, adjusted, in the case of any benefit payable in a form other
     than a single life annuity or a qualified joint and

                                       25
<PAGE>

     survivor annuity, to the actuarial equivalent of a single life annuity,
     assuming (A) the Participant continued employment until reaching the plan's
     normal retirement age (or his current age, if later), (B) his compensation
     remained unchanged and (C) all other relevant factors used to determine
     benefits under the plan remained constant in the future.

                                   ARTICLE 5
                      Amount of Payments to Participants
                      ----------------------------------

          5.1  General Rule.  Upon the retirement, disability, resignation or
               ------------
dismissal of a Participant, he, or in the event of his death, his beneficiary,
shall be entitled to receive from his respective Accounts in the Trust Fund as
of his Determination Date:

          (a)  An amount equal to the Participant's Before-Tax Account and
Matching Account, plus any of the Participant's contributions made to the Trust
Fund but not allocated to the Participant's Before-Tax Account as of his
Determination Date; and

          (b)  An amount equal to his Prior Plan Account and After-Tax Account;

          (c)  An amount equal to his Vested Employer Account; and

          (d)  The nonforfeitable portion of the Participant's Employer
Contribution Account, Heritage Plan Account and McHenry Plan Account determined
as hereafter set forth.

All rights of Participants or of any other person or persons shall be subject to
the provisions of Article 6 concerning the time and manner of making
distributions.

     Notwithstanding anything in this Plan to the contrary, the nonforfeitable
portion of the Employer Contribution Account of any Participant whose employment
terminates pursuant to the Participant's participation in a voluntary retirement
program applicable to such Participant shall be equal to the greater of such
percentage determined on the basis of the Participant's age and Years of Service
as of the date of termination, or such percentage determined on the basis of the
Participant's age as of the date of termination and Years of Service as of the
date of termination increased by the number of additional years of Credited
Service (as defined in the First Midwest Bancorp Consolidated Pension Plan), if
any, with which such Participant is credited under the Pension Plan as a result
of his participation in the voluntary retirement program.

     5.2  Normal Retirement.  Any Participant may retire on or after his Normal
          -----------------
Retirement Date, at which date the forfeitable portion, if any, of his Employer
Contribution Account, Heritage Plan Account, and McHenry Plan Account, shall
become nonforfeitable. If the retirement of a Participant is deferred beyond his
Normal Retirement Date, he shall continue in full participation in the Plan and
Trust Fund.

                                       26
<PAGE>

     5.3  Death.  As of the date any Participant shall die while in the employ
          -----
of the Employer or an Affiliate, the forfeitable portion, if any, of his
Employer Contribution Account, Heritage Plan Account, and McHenry Plan Account
shall become nonforfeitable, including forfeitures eligible to be restored
pursuant to Section 5.7(c).

     5.4  Disability.
          ----------

          (a)  As of the date any Participant shall be determined by the
Committee to have become totally and permanently disabled because of physical or
mental infirmity while in the employ of the Employer or an Affiliate and his
employment shall have terminated, the forfeitable portion, if any, of his
Employer Contribution Account, Heritage Plan Account and McHenry Plan Account
shall become nonforfeitable, including forfeitures eligible to be restored
pursuant to Section 5.7(c).

          (b)  A Participant shall be deemed totally and permanently disabled
when, on the basis of qualified medical evidence, the Committee finds such
Participant to be unable to satisfactorily perform his normal duties required of
him by an Employer or Affiliate as a result of physical or mental infirmity,
injury, or disease, either occupational or nonoccupational in cause; provided,
however, that disability hereunder shall not include any disability incurred or
resulting from the Participant's having engaged in a criminal enterprise, or any
disability consisting of or resulting from the Participant's chronic alcoholism,
addiction to narcotics or an intentionally self-inflicted injury.

     5.5  Vesting.  A Participant's interest in his Before-Tax Account, Matching
          -------
Account, Vested Employer Account, Prior Plan Account and After-Tax Account shall
be nonforfeitable at all times. Except as otherwise provided in this Article 5,
a Participant's nonforfeitable interest in his Employer Contribution Account,
Heritage Plan Account and McHenry Plan Account at any point in time shall be
determined under Section 5.6.

     5.6  Resignation or Dismissal.
          ------------------------

          (a)  If any Participant shall incur his Severance Date, other than by
reason of death or disability or on or after his Normal Retirement Date or Early
Retirement Date, there shall become nonforfeitable none, a portion, or all of
his Employer Contribution Account and Heritage Plan Account computed as of his
Determination Date in accordance with the following schedule, subject to
Sections 2.3 and 2.4:

                                       27
<PAGE>

               If His Years                           The Nonforfeitable
                of Service                         Percentage of His Employer
              Shall Have Been                     Contribution Account Shall Be
              ---------------                     -----------------------------

                Less than 2                                     0%
             2 but less than 3                                 20%
             3 but less than 4                                 30%
             4 but less than 5                                 40%
             5 but less than 6                                 60%
             6 but less than 7                                 80%
                7 or more                                     100%

Any part of the Employer Contribution Account and Heritage Plan Account of such
Participant which does not become nonforfeitable shall be treated as a
forfeiture pursuant to Section 5.7.

          (b)  If any Participant shall incur his Severance Date, other than by
reason of death or disability or on or after his Normal Retirement Date or Early
Retirement Date, there shall become nonforfeitable none, a portion, or all of
his McHenry Plan Account computed as of his Determination Date in accordance
with the following schedule, subject to Sections 2.3 and 2.4:

                                                  The Nonforfeitable
               If His Years of                    Percentage of His
                Service Shall                   Employer Contribution
                  Have Been                       Account Shall Be
                  ---------                       ----------------

                 Less than 2                              0%
              2 but less than 3                          20%
              3 but less than 4                          30%
              4 but less than 5                          40%
                 5 or more                              100%

Any part of the McHenry Plan Account of such Participant which does not become
nonforfeitable shall be treated as a forfeiture pursuant to Section 5.7.

     5.7  Treatment of Forfeitures.
          ------------------------

          (a)  Upon termination of a Participant's employment with the Employer
and all Affiliates, the nonvested portion of his Employer Contribution Account,
Heritage Plan Account and McHenry Plan Account shall become a forfeiture
pursuant to Section 5.6 as of the end of the Plan Year in which the termination
of employment occurred if the Participant is not then reemployed by the Employer
or an Affiliate.  Forfeitures shall be used to reduce the Matching Employer
Contributions that would otherwise be paid by the Employer to the Plan pursuant
to Section 3.5.

                                       28
<PAGE>

          (b)  If a Participant is reemployed by the Employer or an Affiliate
without incurring 5 consecutive One-Year Breaks in Service, and before
distribution of the nonforfeitable portion of his Employer Contribution Account,
Heritage Plan Account and McHenry Plan Account, the amount of the forfeiture
shall be restored to his Employer Contribution Account, Heritage Plan Account
and McHenry Plan Account, as appropriate, as of the last day of the Plan Year in
which he is reemployed.

          (c)  If the Participant is reemployed by the Employer or an Affiliate
without incurring 5 consecutive One-Year Breaks in Service but after
distribution of the nonforfeitable portion of his Employer Contribution Account,
Heritage Plan Account and McHenry Plan Account, and if the Participant repays,
the amount of the Employer Contribution Account, Heritage Plan Account and
McHenry Plan Account distributed to him before the earlier of (i) the date which
is 5 years after the first date on which the Participant is reemployed by the
Employer or an Affiliate, or (ii) the date on which he incurs 5 consecutive One-
Year Breaks in Service, then the amount of the forfeiture shall be restored to
his Employer Contribution Account, Heritage Plan Account and McHenry Plan
Account, as appropriate, as of the last day of the Plan Year in which such
repayment is made.

          (d)  Notwithstanding the foregoing, if a Participant terminated his
employment with the Employer and all Affiliates because of a maternity or
paternity absence as defined in Section 1.4, then this Section 5.7 shall be read
by substituting the word "six" for the number "five" as it appears in
Subsections (b) and (c) above.

          (e)  Amounts restored to a Participant's Employer Contribution
Account, Heritage Plan Account and McHenry Plan Account pursuant to paragraph
(b) or (c) above shall be deducted from the forfeitures which otherwise would be
allocable for the Plan Year in which such reemployment or repayment occurs or,
to the extent such forfeitures are insufficient, shall require a supplemental
contribution from the Employer.

                                       29
<PAGE>

                                   ARTICLE 6
                                 Distributions
                                 -------------

     6.1  Commencement of Distributions.
          -----------------------------

          (a)
               (i)    Distribution of a Participant's Accounts in the Trust Fund
     shall commence or be made on or as soon as practicable after his 65th
     birthday or, if later, the Participant's termination of employment with the
     Employer and all Affiliates and, unless a Participant and his spouse (if
     applicable) otherwise request in writing, distributions shall commence no
     later than the 60th day after the close of the Plan Year in which the later
     of such events occurs.

               (ii)   In all events, distribution shall commence no later than
     the Required Beginning Date, and subsequent distributions required to be
     made each year for compliance with Code Section 401(a)(9) and the
     regulations promulgated thereunder shall be made no later than December 31
     of such year.

                (iii) Distribution of a Participant's Accounts shall occur at
     such time after the Participant's Determination Date and after a Valuation
     Date immediately following the Participant's written request for such
     distribution, provided: (A) the Committee has notified the Participant of
     the availability of the distribution in a manner that would satisfy the
     notice requirements of Section 1.411(a)-11(c) of the income tax
     regulations, and such notification is given no less than 30 days nor more
     than 90 days prior to such Valuation Date; and (B) such distribution may
     commence as of a Valuation Date which is less than 30 days after the date
     such notice is given by the Committee if the Committee has notified the
     Participant that the Participant has a right to a period of at least 30
     days after receiving the notice to consider the decision of whether or not
     to elect a distribution and the Participant after receiving the notice
     affirmatively elects a distribution.

          (b)  Notwithstanding anything in this Section 6.1 to the contrary, if
any further amount becomes due from a Participant's Accounts after a
distribution has occurred, a payment retroactive to such distribution date shall
be made no later than 60 days after the earliest date on which such amount can
be ascertained.

          (c)  Notwithstanding anything in this Article 6 to the contrary, the
Committee shall direct the Trustee to distribute to the Participant the
distributable balance of his Accounts in a lump sum payment at any time after
his Determination Date without his written consent to such distribution if, at
the time of the distribution, the value of the nonforfeitable portion of the
Participant's Accounts does not exceed $5,000.

                                       30
<PAGE>

          (d)  Any distribution made in accordance with this Article 6 shall, to
the extent required by law, be eligible to be distributed in a direct rollover
as an Eligible Rollover Distribution in accordance with Section 6.12.

     6.2  Form of Distributions.
          ---------------------

          (a)  Subject to Sections 6.2(b), 6.2(c) and 6.3 below, the Accounts in
the Trust Fund distributable to any Participant shall be distributed in one lump
sum payment.

          (b)  Notwithstanding Section 6.2(a), a Participant or a Participant's
beneficiary, whichever is applicable, may elect to receive his vested interest
in any portion of  his Account under this Plan that is attributable to benefits
accrued under the McHenry Plan and, effective January 1, 1999, under the
Heritage Plan, in any one or a combination of the following methods:

               (i)  by payment in a lump sum, which in the case of a
     Participant's Heritage Plan Account may be made in the following:

                    (A)  cash;

                    (B)  Employer securities, which, with respect to any
               distribution prior to January 1, 2000, shall be limited
               to the number of shares in the Heritage Fund allocable
               to the Participant, and to which the Participant had a
               vested right, as of December 31, 1998, reduced by any
               transfers or distributions from the Heritage Fund made
               on behalf of the Participant prior to the distribution;
               or

                    (C)  a combination of (A) and (B) above.

               (ii)  by payment in monthly installments over a period not to
     exceed the Participant's statistical life expectancy or the Participant's
     and his beneficiary's statistical life expectancy.

               (iii) by payment through the purchase of an annuity contract from
     a registered insurance company selected by the Trustee.

Such an election must be filed in writing with the Committee on forms to be
furnished by the Committee. In the event a Participant elects the installment
form of payment, the amount of the monthly payment shall be determined annually,
as of the date the first payment is due and as of each subsequent anniversary of
such date, by dividing the value of the Participant's accrued benefit payable in
such form as of such date by the Participant's or the Participant's and his
beneficiary's statistical life expectancy, as published in the Code.

                                       31
<PAGE>

          (c)  Effective for lump sum distributions made with respect to any
Determination Date which occurs on or after December 31, 1999, notwithstanding
any other Plan provision, shares of Company common stock held in the Investment
Funds described in Sections 9.5(a)(ii) and 9.5 (a)(iv), which are allocated to a
Participant's Account hereunder may be distributed in-kind to the extent the
Participant or, if applicable, the Participant's designated beneficiary elects a
lump sum in-kind form of distribution; provided, however, any fractional shares
shall be distributed in the form of cash.

     6.3  Purchase of an Annuity Contract (Applicable to the Heritage and
          ---------------------------------------------------------------
McHenry Plan Accounts Only).
---------------------------

          (a)  If a distribution of benefits attributable to the McHenry Plan or
the Heritage Plan is to be made in the form of an annuity under Section 6.2(b),
the form of payment will be a joint and survivor life annuity ending with the
payment made in the month in which the joint annuitant's death occurs. This
option provides for payment of a monthly pension to the Participant for his
lifetime and for the continuance of the Participant's annuity to the surviving
joint annuitant named by the Participant, to be paid for the remainder of the
joint annuitant's lifetime. Payments under this option will be the actuarial
equivalent, as defined by the insurance company from whom the annuity is
purchased, of the Participant's Account balance attributable to benefits accrued
under the McHenry Plan or the Heritage Plan, as applicable. The survivor annuity
will be 50% of the Participant's annuity unless otherwise selected by the
Participant.

          (b)  Unless an optional form of benefit is selected pursuant to a
qualified election within the ninety (90) day period ending on the annuity
starting date, a married participant's vested Account balance attributable to
benefits accrued under the McHenry Plan or Heritage Plan will be paid in the
form of a qualified joint and survivor annuity and an unmarried Participant's
vested Account balance attributable to benefits accrued under the McHenry Plan
or Heritage Plan will be paid in the form of a life annuity. The Participant may
elect to have such annuity distributed upon attainment of the earliest
retirement age under the Plan.

          (c)  An election not to receive benefits in the form of this qualified
joint and survivor annuity may be made in writing on a form furnished by the
Committee at any time within the ninety (90) day period ending on the annuity
starting date. The Committee shall furnish to the Participant, at least ninety
(90) days prior to a Participant's annuity starting date (as defined in Code
Section 417(f)(2)):

               (i)   the terms and conditions of the qualified joint and
     survivor annuity;

               (ii)  the Participant's right to make, and the effect of, an
     election to waive the qualified joint and survivor annuity,

               (iii) the rights of the Participant's spouse in the event of a
     waiver, and

                                       32
<PAGE>

               (iv) the right to make, and the effect of, a revocation of an
     election.

          (d)  If a Participant dies prior to the date he receives a
distribution from the plan, his spouse will receive a preretirement survivor
annuity which will be actuarially equivalent to 100% of the Participant's vested
Account balance attributable to benefits accrued under the McHenry Plan or
Heritage Plan, as applicable. The spouse may elect to have such annuity
distributed within a reasonable period after the Participant's death.

          (e)  As regards a Participant's McHenry Plan Account, the
preretirement survivor annuity and the qualified joint and survivor annuity will
be payable to the Participant's spouse only if the Participant and spouse have
been married to each other throughout the one year period ending on the date of
the Participant's death.

          (f)  In the case of a preretirement survivor annuity as described in
Subsections (d) and (e) above, the Committee shall provide each Participant
within the applicable period for such Participant a written explanation of the
preretirement survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of a
qualified joint and survivor annuity as described above. The applicable period
for a Participant is whichever of the following periods ends last:

               (i)   the period beginning with the first day of the Plan Year in
     which the Participant attains age thirty-two (32) and ending with the close
     of the Plan Year preceding the Plan Year in which the Participant attains
     age thirty-five (35),

               (ii)  a reasonable period ending after the individual becomes a
     Participant,

               (iii) a reasonable period following the time the annuity benefit
     may cease to be fully subsidized, or

               (iv)  a reasonable period ending after the qualified joint and
     survivor annuity or preretirement survivor annuity rules apply to the
     Participant.

Notwithstanding the foregoing, notice must be provided within a reasonable
period ending after separation from service in the case of a Participant who
separates from service before attaining age thirty-five (35).

     For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii), (iii) and (iv) is the end
of the two-year period beginning one year prior to the date the applicable event
occurs, and ending one year after that date. In the case of a Participant who
separates from service before the Plan Year in which age thirty-five (35) is
attained, notice shall be provided within the two-year period beginning one year
prior to separation and ending one year after separation. If such a Participant
thereafter returns to employment with the Employer, the applicable period for
such Participant shall be redetermined.

                                       33
<PAGE>

          (g)  Any election not to receive benefits in the form of the qualified
joint and survivor annuity or preretirement survivor annuity may be revoked by
the Participant in writing on a form furnished by the Committee at any time
prior to the date such Participant's benefit payments are to commence. Once
revoked, a Participant may again elect not to receive benefits in the form of
this qualified joint and survivor annuity or preretirement survivor annuity in
writing on a form furnished by the Committee at any time prior to the date such
Participant's benefit payments are to commence.

          (h)  In no event shall any Participant elect to waive his right to
receive benefits in the form of this qualified joint and survivor annuity or
preretirement survivor annuity without the written consent of the Participant's
spouse and the spouse's acknowledgment of the effect of such election, as
witnessed by either a representative of the Committee or a notary public.  A
waiver may be made no earlier than the first day of the Plan Year in which the
Participant attains age thirty-five (35) and no later than the Participant's
date of death. However, the waiver may be effective as of the date of a
Participant's separation from service from the Employer. Any waiver of a
qualified joint and survivor annuity or preretirement survivor annuity shall not
be effective unless:

               (i)   the election designates a specific Individual Beneficiary,
     including any class of Individual Beneficiaries or any contingent
     Individual Beneficiaries, which may not be changed without spousal consent
     (or the spouse expressly permits designations by the Participant without
     any further spousal consent),

               (ii)  the election designates a form of benefit payments which
     may not be changed without spousal consent (or the spouse expressly permits
     designations by the Participant without any further spousal consent), and

               (iii) the spouse's consent acknowledges the effect of the
     election.

The written consent shall not be required if the Committee is satisfied that
there is no spouse or the spouse cannot be located or for any reason established
by regulations pursuant to Code Section 417(a)(2)(B).

          (i)  Any annuity contract distributed herefrom must be
nontransferable. The terms of any annuity contract purchased and distributed by
the Plan to a Participant or spouse shall comply with the requirements of this
Plan.

          6.4  Distributions to Beneficiaries.
               ------------------------------

          (a)  Subject to Sections 6.2(b) and 6.3, the balance of a deceased
Participant's Accounts which is distributable to a beneficiary shall be
distributed in one lump sum as soon as practicable (but in no event later than
the December 31 of the calendar year in which the fifth anniversary of the
Participant's death occurs) after the Valuation Date immediately following the
Participant's death, based on the value of the Participant's accounts as of such
Valuation Date.

                                       34
<PAGE>

          (b)
               (i)  As regards distributions made under Sections 6.2(b) and 6.3,
     notwithstanding anything in this Article 6 to the contrary, in the event a
     Participant dies on or prior to the date benefit payments commence
     hereunder, benefit payments if any, to a Participant's Individual
     Beneficiary shall commence within ninety (90 days after the Participant's
     death occurs and such benefits shall be fully distributed within five (5)
     years from the Participant's date of death, unless the Participant's entire
     interest will be distributed to the Participant's Individual Beneficiary
     over the life of such Individual Beneficiary or the life expectancy of such
     Individual Beneficiary.

               (ii) As regards distributions made under Sections 6.2(b) and 6.3,
     notwithstanding anything in this Article 6 to the contrary, in the event a
     Participant dies after benefit payments have commenced hereunder, and the
     Participant has not received his entire vested Account balance attributable
     to benefits accrued under the McHenry Plan or Heritage Plan, if any, the
     undistributed portion shall be paid to the Participant's Individual
     Beneficiary in the form in which payments were being paid to the
     Participant, with any installments paid over the period remaining under the
     Participant's election.

     6.5  Beneficiaries.
          -------------

          (a)  Except as otherwise provided in Section 6.3 and this Section 6.5,
the distributable balance of a deceased Participant's Accounts shall be paid to
his surviving spouse.

          (b)  The balance of a deceased Participant's Accounts shall be
distributed to the persons effectively designated by the Participant as his
beneficiaries. To be effective, the designation shall be filed with the
Committee in such written form as the Committee requires and may include
contingent or successive beneficiaries; provided that any designation by a
Participant who is married at the time of his death which fails to name his
surviving spouse as the sole primary beneficiary shall not be effective unless
such surviving spouse has consented to the designation in writing, witnessed by
a Plan representative or notary public, acknowledging the effect of the
designation and the specific non-spouse beneficiary, including any class of
beneficiaries or any contingent beneficiary. Such consent shall not be required
if, at the time of filing such designation, the Participant established to the
satisfaction of the Committee that the consent of the Participant's spouse could
not be obtained because there is no spouse, the spouse could not be located or
by reason of such other circumstances as may be prescribed by regulations. Any
consent (or establishment that the consent could not be obtained) shall be
effective only with respect to such spouse. Any Participant may change his
beneficiary designation at any time by filing with the Committee a new
beneficiary designation (with such spousal consent as may be required).

          (c)  If a Participant dies, and to the knowledge of the Committee
after reasonable inquiry leaves no surviving spouse, has not filed an effective
beneficiary designation or has revoked all such designations, or has filed an
effective designation but the beneficiary or beneficiaries predeceased him or
the beneficiary dies before complete distribution of the Participant's benefits,

                                       35
<PAGE>

the distributable portion of the Participant's Accounts shall be paid in
accordance with the following order of priority:

               (i)   to the Participant's surviving spouse, or if there be none
     surviving,

               (ii)  to the Participant's children, in equal parts, or if there
     be none surviving,

               (iii) to the Participant's father and mother, in equal parts, or
     if there be none surviving,

               (iv)  to the executor or administrator of the Participant's
     estate.

     6.6  Form of Elections and Applications for Benefits.  Any election,
          -----------------------------------------------
revocation of an election or application for benefits pursuant to the Plan shall
not be effective unless it is (a) made on such form, if any, as the Committee
may prescribe for such purpose; (b) signed by the Participant and, if required
under Section 6.3 or 6.5, by the Participant's spouse; and (c) filed with the
Committee.

     6.7  Unclaimed Distributions.  In the event any distribution cannot be made
          -----------------------
because the person entitled thereto cannot be located and the distribution
remains unclaimed for 2 years after the distribution date established by the
Committee, then such amount shall be treated as a forfeiture and allocated in
accordance with Section 4.8. In the event such person subsequently files a valid
claim for such amount, such amount shall be restored to the Participant's
Accounts in a manner similar to the restoration of forfeitures under
Section 5.7.

     6.8  Loans.
          -----

          (a)  Upon the request of a Participant, the Committee shall authorize
a loan to such Participant in accordance with this Section 6.8, provided that
the Participant has no outstanding loans from the Plan.

          (b)  The amount of any loan shall not be less than $1,000, and shall
not exceed 50% of the amount which he would be entitled to receive from his
Accounts if he had resigned from the service of the Employer and all Affiliates
and if his Determination Date was the Valuation Date next preceding the date of
such loan request; provided, however, that the amount of such loan shall not
exceed $50,000 reduced by the highest outstanding balance of loans from the
Trust Fund during the one-year period ending on the day before the date on which
such loan is made or modified. Such loans shall be made available to all
Participants on a reasonably equivalent basis.

          (c)  Loans shall be made on such terms as the Committee may prescribe,
provided that any such loan shall be evidenced by a note, shall bear a
reasonable rate of interest on the unpaid

                                       36
<PAGE>

principal thereof, and shall be secured by the Participant's Accounts and such
other security as the Committee in its discretion deems appropriate.

          (d)  Loans shall be repaid by the Participant by payroll deductions or
any other methods approved by the Committee which require level amortization of
principal and repayments not less frequently than quarterly. Such loans shall be
repaid over a period not to exceed 5 years in accordance with procedures
established by the Committee from time to time.

          (e)  Loans shall be deemed made from the Participant's Accounts.
Amounts necessary to fund such loan shall be transferred from amounts credited
to the respective Accounts invested in the respective Funds in accordance with
the following order:

               (i)   from the Accounts indicated in the Money Market Fund:

                     (A)  first, the After-Tax Account;

                     (B)  second, the Prior Plan Account;

                     (C)  third, either the McHenry Plan Account or Heritage
          Plan Account, as applicable;

                     (D)  fourth, the Vested Employer Account;

                     (E)  fifth, the Before-Tax Account;

                     (F)  sixth, the Matching Account; and

                     (G)  seventh, the Employer Contribution Account.

               (ii)  from the Accounts invested in the Fixed Income Fund, in the
     order set forth in (i) above;

               (iii) from the Accounts invested in the Balanced Fund, in the
     order set forth in (i) above;

               (iv)  from the Accounts invested in the Equity Fund, in the order
     set forth in (i) above; and

               (v)   from the Accounts investment in the First Midwest Stock
     Fund, in the order set forth in (i) above.

The portion of each Account used to secure the loan shall be held for the
benefit of the Participant and treated in the manner described in
Section 4.2(b). Loan repayments shall be credited to the

                                       37
<PAGE>

Accounts in the manner described in Section 4.4 and invested in the separate
Funds in accordance with the Participant's investment directions applicable to
contributions in effect under Section 9.5 at the time of the repayment. Upon the
occurrence of a Participant's Determination Date, the unpaid balance of any loan
shall be charged against the Accounts from which made to the extent not repaid
before distribution to the Participant.

     6.9  Withdrawals Prior to Termination of Employment.
          ----------------------------------------------

          (a)  Subject to paragraph (b) below, a Participant who has not
incurred his Severance Date may, upon the determination by the Committee that he
has incurred a financial hardship, make a withdrawal from his After-Tax Account
and, to the extent necessary, his Before-Tax Account. In any case where the
Participant claims financial hardship, he shall submit a written request for
such distribution in accordance with procedures prescribed by the Committee. The
Committee shall determine whether the Participant has a "financial hardship" on
the basis of such written request in accordance with this Section 6.9, and such
determination shall be made in a uniform and nondiscriminatory manner. The
Committee shall only make a determination of "financial hardship" if the
distribution to be made is made on account of (A) an immediate and heavy
financial need of the Participant and (B) the amounts to be distributed from the
Participant's After-Tax Account and Before-Tax Account are necessary to satisfy
the Participant's need.

          (b)  The determination of whether a Participant has an immediate and
heavy financial need is to be made by the Committee on the basis of all relevant
facts and circumstances. A distribution will be deemed to be on account of an
immediate and heavy financial need only if made on account of:

               (i)   Medical expenses described in Section 213(d) of the Code
     incurred by the Participant, the Participant's spouse or any dependents of
     the Participant (as defined in Section 152 of the Code) or necessary for
     these persons to obtain such medical care;

               (ii)  The purchase (excluding mortgage payments) of a principal
     residence for the Participant;

               (iii) Payment of tuition, related educational fees, and room and
     board expenses, for the next 12 months of post-secondary education for the
     Participant, the Participant's spouse, for children or dependents;

               (iv)  The need to prevent the eviction of the Participant from
     his principal residence or foreclosure on the mortgage of the Participant's
     principal residence; or

               (v)   Any other event or expense deemed an immediate and heavy
     financial need by the Committee or by Department of the Treasury
     regulations.

                                       38
<PAGE>

          (c)  The determination of whether a distribution is necessary to
satisfy the immediate and heavy financial need of the Participant shall be made
by the Committee on the basis of all relevant facts and circumstances, provided,
however, that this requirement shall be met only if the Participant reasonably
demonstrates that all of the following requirements are satisfied:

               (i)   the distribution is not in excess of the amount of the
     immediate and heavy financial need of the Participant; and

               (ii)  the Participant has obtained all distributions (other than
     hardship distributions) and all nontaxable loans currently available under
     the Plan;

               (iii) the Participant will not make any Before-Tax Contributions
     for twelve months after receiving the hardship distribution; and

               (iv)  the Participant's Before-Tax Contributions in the Plan Year
     following the Plan Year of the hardship distribution do not exceed the
     limitations in Section 3.2(a) applicable to such following Plan Year, minus
     the amount of his Before-Tax Contributions for the Plan Year of the
     hardship distribution.

          (d)  Any withdrawals under this Section shall not reduce the non-
forfeitable portion of the Participant's Account below the amount of the balance
of any outstanding loan made pursuant to Section 6.8.  Withdrawals on account of
hardship shall be further limited by paragraph (e) below.

          (e)  Distributions from the Participant's Before-Tax Account on
account of hardship pursuant to this Section 6.9 shall not exceed the lesser of:

               (i)   the amount needed to relieve the immediate and heavy
     financial need;

               (ii)  the balance of the Participant's Before-Tax Account at the
     time of the distribution; or

               (ii)  (A) the sum of the balance of the Before-Tax Contribution
     as of December 31, 1988 plus the Participant's Before-Tax Contributions
     made on or after January 1, 1989, reduced by (B) the aggregate amount
     distributed from the Participant's Before-Tax Account on or after
     January 1, 1989.

          (f)  Notwithstanding the foregoing, if a Participant is married at the
time he requests a withdrawal, no such withdrawal shall be permitted without the
written consent of the Participant's spouse, which shall be witnessed by a
notary public or a Plan representative.

                                       39
<PAGE>

     6.10  Facility of Payment.  When, in the Committee's opinion, a Participant
           -------------------
or beneficiary is under a legal disability or is incapacitated in any way so as
to be unable to manage his affairs, the Committee may direct the Trustee to make
payments:

           (a) directly to the Participant or beneficiary;

           (b) to a duly appointed guardian or conservator of the Participant or
beneficiary;

           (c) to a custodian for the Participant or beneficiary under the
Uniform Gifts to Minors Act;

           (d) to an adult relative of the Participant or beneficiary; or

           (e) directly for the benefit of the Participant or beneficiary.

Any such payment shall constitute a complete discharge therefor with respect to
the Trustee and the Committee.

     6.11  Claims Procedure.
           ----------------

           (a) Any person who believes that he is then entitled to receive a
benefit under the Plan, including one greater than that initially determined by
the Committee, may file a claim in writing with the Committee.

           (b)  The Committee shall within 90 days of the receipt of a claim
either allow or deny the claim in writing.  A denial of a claim shall be written
in a manner calculated to be understood by the claimant and shall include:

               (i)   the specific reason or reasons for the denial;

               (ii)  specific references to pertinent Plan provisions on which
     the denial is based;

               (iii) a description of any additional material or information
     necessary for the claimant to perfect the claim and an explanation of why
     such material or information is necessary; and

               (iv)  an explanation of the Plan's claim review procedure.

          (c)  A claimant whose claim is denied (or his duly authorized
representative) may, within 60 days after receipt of denial of his claim:

               (i)   submit a written request for review to the Committee;

                                       40
<PAGE>

               (ii)  review pertinent documents; and

               (iii) submit issues and comments in writing.

          (d)  The Committee shall notify the claimant of its decision on review
within 60 days of receipt of a request for review. The decision on review shall
be written in a manner calculated to be understood by the claimant and shall
include specific reasons for the decision and specific references to the
pertinent Plan provisions on which the decision is based.

          (e)  The 90-day and 60-day periods described in subsections (b) and
(d), respectively, may be extended at the discretion of the Committee for a
second 90- or 60-day period, as the case may be, provided that written notice of
the extension is furnished to the claimant prior to the termination of the
initial period, indicating the special circumstances requiring such extension of
time and the date by which a final decision is expected.

          (f)  Participants and beneficiaries shall not be entitled to challenge
the Committee's determinations in judicial or administrative proceedings without
first complying with the procedures in this Article. The Committee's decisions
made pursuant to this Section are intended to be final and binding on
Participants, beneficiaries and others.

     6.12 Eligible Rollover Distributions.
          -------------------------------

          (a)  Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Article 6, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.

          (b)  Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under Code Section 401(a)(9); and the portion of any distribution that
is not includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).

          (c)  Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in Code Section 401(a),
that accepts the distributee's eligible rollover distribution. However, in the

                                       41
<PAGE>

case of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.

          (d)  Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code Section
414(p), are distributees with regard to the interest of the spouse or former
spouse.

          (e)  Direct rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.

                                   ARTICLE 7
                          Top-Heavy Plan Requirements
                          ---------------------------

     7.1  Definition of Top-Heavy Plan.  The Plan shall be Top-Heavy with
          ----------------------------
respect to a Plan Year if it is a member of a Required Aggregation Group and the
present value of the accrued benefits for Key Employees under all plans in the
Aggregation Group exceeds 60% of the present value of the accrued benefits for
all employees under all plans in the Aggregation Group. This ratio shall be
computed as provided in Section 416(g) of the Code. Such present values shall be
determined as of the last day of the preceding Plan Year of each plan. If all
plans in the Aggregation Group do not have the same Plan Year, then such present
values shall be determined as of the last day of each Plan Year ending in the
same calendar year as the last day of the preceding Plan Year of this Plan.
Under a defined contribution plan, such present values shall be determined by
aggregating the value of all accounts of all Key Employees and all employees
respectively. As used in this Section, the term "accounts" includes certain
prior distributions, Employer contributions payable to the Plan, employee
contributions, and rollover accounts, if any, all in accordance with Section
416(g) of the Code or regulations thereunder.

     7.2  Top-Heavy Plan Requirements.  Notwithstanding any provision of the
          ---------------------------
Plan to the contrary but subject to the Company's right to terminate the Plan,
the following provisions shall apply with respect to any Plan Year in which the
Plan is Top-Heavy.

          (a)  Minimum Vesting.  Effective as of the first day of such Plan
               ---------------
Year, the following vesting schedule shall be substituted for the schedules set
forth in Section 5.6, except to the extent, with respect to any Participant, a
schedule in Section 5.6 applicable to such Participant produces a larger Plan
benefit:

                                       42
<PAGE>

                                             The Nonforfeitable
             If His Years of                 Percentage of His
              Service Shall                 Employer Contribution
               Have Been                      Account Shall Be
               ---------                     -----------------

             2 but less than 3                       20%
             3 but less than 4                       40%
             4 but less than 5                       60%
             5 but less than 6                       80%
                6 or more                           100%

          (b)  Minimum Contribution.  All Participants who are Non-Key Employees
               --------------------
participating in the Plan are also participants in a defined benefit plan
maintained by the Employer. Consequently, any minimum benefits required due to
the top-heavy status of this Plan will be provided in such defined benefit plan.
If the defined benefit plan is terminated and if the Required Aggregation Group
is top-heavy, the Employer shall make a supplemental contribution to the Vested
Employer Accounts and Employer Contribution Account of any such Participant, in
an amount sufficient for the total amount of Employer contributions allocated to
accounts of such Participant to equal 5% of such Participant's Total
Compensation for such Plan Year. For purposes of this subsection, the term
"Participant" means a Participant who was employed by the Employer on the last
day of a Plan Year in which the Plan is Top-Heavy.

     7.3  Definitions.  For purposes of this Article:
          -----------

          (a)  A "Key Employee" is any current or former employee described in
Section 416(i)(1) of the Code or his beneficiary. The compensation used in
determining whether any such employee is a Key Employee shall be based on such
employee's Total Compensation from the Employer (including all Affiliates) for
the applicable Plan Year, including amounts contributed by an Employer pursuant
to a salary reduction agreement which are excludable from the Employee's gross
income under Code Section 125, 402(e)(3), 402(h) or 403(b).

          (b)  A "Non-Key Employee" is an employee of the Employer other than a
Key Employee.

          (c)  "Employer" means the Employer and all Affiliates.

          (d)  "Aggregation Group" means a group of qualified plans consisting
of this Plan and certain other defined contribution plans and defined benefit
plans maintained by the Employer which are aggregated for purposes of
determining whether the group as whole is Top-Heavy. The Aggregation Group
includes plans which must be aggregated for this purpose (the "Required
Aggregation Group") and other plans which are aggregated for this purpose (the
"Permissive Aggregation Group").

                                       43
<PAGE>

          (e)  The "Required Aggregation Group" shall include:

               (i)   each employee benefit plan of the Employer qualified under
     Section 401(a) of the Code in which a Key Employee is a participant; and

               (ii)  each other qualified plan which enables any plan described
     in (i) to meet the anti-discrimination or coverage requirements of the
     Code.

          (f)  The "Permissive Aggregation Group" includes such other qualified
plan or plans of the Employer as the Committee may in its discretion elect,
provided the inclusion of any such plan in the Aggregation Group does not cause
it to fail to meet the anti-discrimination or coverage requirements of the Code.

     7.4  Cessation of Top-Heavy Requirements.
          -----------------------------------

          (a)  Once the Plan has been Top-Heavy but is no longer Top-Heavy, this
Article shall be inapplicable except as provided in this Section.

          (b)  The vesting schedule set forth in Section 7.2(a) shall continue
to apply to a Participant who had 5 or more Years of Service as of the last day
on which the Plan was Top-Heavy.

          (c)  The Employer Contribution Account of any other Participant
constituted as of the last day on which the Plan was Top-Heavy shall be
separately accounted for as a subaccount until the nonforfeitable percentage of
his Employer Contribution Account pursuant to Section 5.6 equals or exceeds the
nonforfeitable percentage of his Employer Account on the last day on which the
Plan was Top-Heavy. In the event such Participant shall resign or be dismissed
from the employ of the Employer while a subaccount is being maintained, his
nonforfeitable interest in such subaccount shall be computed pursuant to Section
5.6 but using the same nonforfeitable percentage as was applicable to him on the
last day on which the Plan was Top-Heavy.

                                       44
<PAGE>

                                   ARTICLE 8
                      Powers and Duties of Plan Committee
                      -----------------------------------

     8.1  Appointment of Plan Committee.
          -----------------------------

          (a)  The Board of Directors of the Company (the "Board of Directors")
shall name a Plan Committee (the "Committee") to consist of not less than 3
persons to serve as administrator and named fiduciary of the Plan. Any person,
including directors, shareholders, officers and employees of the Company, shall
be eligible to serve on the Committee. Every person appointed a member of the
Committee shall signify his acceptance in writing to the Board of Directors.

          (b)  Members of the Committee shall serve at the pleasure of the Board
of Directors and may be removed by the Board of Directors at any time with or
without cause. Any member of the Committee may resign by delivering his written
resignation to the Board of Directors, and such resignation shall become
effective at delivery or at any later date specified therein. Vacancies in the
Committee shall be filled by the Board of Directors.

          (c)  Usual and reasonable expenses of the Committee may be paid in
whole or in part by the Employers and any such expenses not paid by the
Employers shall be paid by the Trustee out of the principal or income of the
Trust Fund. The members of the Committee who are employees of the Employer or
any Affiliate shall not receive any compensation for their services as such.

     8.2  Powers and Duties of Committee.  The Company shall have final and
          ------------------------------
binding authority to control and manage the operation and administration of the
Plan, including all rights and powers necessary or convenient to the carrying
out of its functions hereunder, whether or not such rights and powers are
specifically enumerated herein. The Committee shall have the specific delegated
powers and duties described in this Article 8, and such further powers and
duties as may be delegated to it by the Company. In exercising its
responsibilities hereunder, the Committee may manage and administer the Plan
through the use of agents who may include employees of the Employer.

     Without limiting the generality of the foregoing, and in addition to the
other powers set forth in this Article 8, the Committee shall have the following
express authorities:

          (a)  To construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any benefits
hereunder.

          (b)  To prescribe procedures to be followed by Participants or
beneficiaries filing applications for benefits.

          (c)  To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan.

                                       45
<PAGE>

          (d)  To receive from the Employers, Participants and others such
information as shall be necessary for the proper administration of the Plan.

          (e)  To furnish the Company upon request such annual and other reports
with respect to the administration of the Plan as are reasonable and
appropriate.

          (f)  To receive, review and maintain on file reports of the financial
condition and of the receipts and disbursements of the Trust Fund from the
Trustee.

     8.3  Committee Procedures.
          --------------------

          (a)  The Committee may adopt such bylaws and regulations as it deems
desirable for the conduct of its affairs.

          (b)  A majority of the members of the Committee at the time in office
shall constitute a quorum for the transaction of business. All resolutions or
other actions taken by the Committee at any meeting shall be by the vote of the
majority of the members of the Committee present at the meeting. The Committee
may act without a meeting by written consent of a majority of its members.

          (c)  The Committee may elect one of its members as chairman and may
appoint a secretary, who may or may not be a Committee member, and shall advise
the Trustee and the Employer of such actions in writing. The secretary shall
keep a record of all actions of the Committee and shall forward all necessary
communications to the Employer or the Trustee.

          (d)  Filing or delivery of any document with or to the secretary of
the Committee in person or by registered or certified mail, addressed in care of
the Employer, shall be deemed a filing with or delivery to the Committee.

     8.4  Consultation with Advisors.  The Committee (or any fiduciary
          --------------------------
designated by the Committee pursuant to Section 8.8) may employ or consult with
counsel, actuaries, accountants, physicians or other advisors (who may be
counsel, actuaries, accountants, physicians or other advisors for the Employer).

     8.5  Committee Members as Participants.  Any Committee member may also be a
          ---------------------------------
Participant, but no Committee member shall have power to take part in any
discretionary decision or action affecting his own interest as a Participant
under this Plan unless such decision or action is upon a matter which affects
all other Participants similarly situated and confers no special right, benefit
or privilege not simultaneously conferred upon all other such Participants.

                                       46
<PAGE>

     8.6  Records and Reports.  The Committee shall take all such action as it
          -------------------
deems necessary or appropriate to comply with governmental laws and regulations
relating to the maintenance of records, notifications to Participants,
registrations with the Internal Revenue Service, reports to the U.S. Department
of Labor and all other requirements applicable to the Plan.

     8.7  Investment Policy.
          -----------------

          (a)  The Committee from time to time shall determine the short-term
and long-term financial needs of the separate Investment Funds comprising the
Trust Fund and such needs shall be communicated from time to time to the
Trustee, Investment Managers or others having responsibility and control of the
Trust Fund.

          (b)  Subject to subsection (c) below, the Trustee shall have the
exclusive authority and discretion to manage and control the assets of the
respective Investment Funds pursuant to the investment policy determined by the
Committee.

          (c)  The Committee may in its discretion:

               (i)  appoint one or more Investment Managers to manage (including
     the power to direct the Trustee to acquire or dispose of) any assets of the
     Plan pursuant to the investment policy determined by the Committee, in
     which case the Trustee shall not be liable for the acts or omissions of any
     such Investment Manager or be under an obligation to invest or otherwise
     manage any asset of the Plan which is subject to the management of any such
     Investment Manager; and

               (ii) direct the Trustee with respect to the investment of the
     assets of the Plan in any mutual fund, insurance company separate account
     or collective investment fund maintained by a bank or trust company
     (including but not limited to such funds maintained by the Trustee or any
     affiliate thereof), or similar pooled investment vehicle, pursuant to the
     investment policy of any Investment Fund determined by the Committee.

          (d)  For purposes of this Section 8.7, an Investment Manager shall
mean (i) a registered investment adviser under the Investment Advisers Act of
1940, (ii) a bank as defined in such Act, or (iii) an insurance company
qualified under the laws of more than one state to manage, acquire and dispose
of plan assets. Any Investment Manager appointed by the Committee shall
acknowledge in writing that it is a fiduciary with respect to the Plan.

     8.8  Designation of Other Fiduciaries.  The Committee may designate in
          --------------------------------
writing other persons to carry out a specified part or parts of its
responsibilities hereunder (including the power to designate other persons to
carry out a part of such designated responsibility), but not including the power
to appoint Investment Managers. Any such designation shall be accepted by the
designated person, who shall acknowledge in writing that he is a fiduciary with
respect to the Plan.

                                       47
<PAGE>

     8.9    Obligations of Committee.
            ------------------------

            (a)  The Committee or its properly authorized delegate shall make
such determinations as are necessary to accomplish the purposes of the Plan with
respect to individual Participants or classes of such Participants. The Employer
shall notify the Committee of facts relevant to such determinations, including,
without limitation, length of service, compensation for services, dates of
death, permanent disability, granting or terminating of leaves of absence, ages,
retirement and termination of service for any reason (but indicating such
reason), and termination of participation. The Employer shall also be
responsible for notifying the Committee of any other facts which may be
necessary for the Committee to discharge its responsibilities hereunder.

            (b)  The Committee is hereby authorized to act solely upon the basis
of such notifications from the Company and to rely upon any document or
signature believed by the Committee to be genuine and shall be fully protected
in so doing. For the purpose of this Section, a letter or other written
instrument signed in the name of the Company by any officer thereof shall
constitute a notification therefrom; except that any action by the Company or
its Board of Directors with respect to the appointment or removal of a member of
the Committee or the amendment of the Plan and Trust or the designation of a
group of employees to which the Plan is applicable shall be evidenced by an
instrument in writing, signed by a duly authorized officer or officers,
certifying that said action has been authorized and directed by a resolution of
the Board of Directors of the Company.

            (c)  The Committee shall notify the Trustee of its actions and
determinations affecting the responsibilities of the Trustee and shall give the
Trustee directions as to payments or other distributions from the Trust Fund to
the extent they may be necessary for the Trustee to fulfill the terms of the
Trust Agreement.

            (d)  The Committee shall be under no obligation to enforce payment
of contributions hereunder or to determine whether contributions delivered to
the Trustee comply with the provisions hereof relating to contributions, and is
obligated only to administer this Plan pursuant to the terms hereof.

     8.10   Indemnification of Committee.  The Employers shall indemnify members
            ----------------------------
of the Committee and its authorized delegates who are employees of the Employer
for any liability or expenses, including attorneys' fees, incurred in the
defense of any threatened or pending action, suit or proceeding by reason of
their status as members of the Committee or its authorized delegates, to the
full extent permitted by the law of the Employer's state of incorporation.

                                       48
<PAGE>

                                   ARTICLE 9
                            Trustee and Trust Fund
                            ----------------------

     9.1  Trust Fund.  A Trust Fund to be known as the First Midwest Bancorp
          ----------
Savings and Profit Sharing Trust (herein referred to as the "Trust" or the
"Trust Fund") has been established by the execution of a trust agreement with
one or more Trustees and is maintained for the purposes of this Plan. 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 benefit of the Participants and
their beneficiaries.

     9.2  Payments to Trust Fund and Expenses.  All contributions hereunder will
          -----------------------------------
be paid into and credited to the Trust Fund and all benefits hereunder and
expenses chargeable thereto will be paid from the Trust Fund and charged
thereto.

     9.3  Trustee's Responsibilities.  The powers, duties and responsibilities
          --------------------------
of the Trustee shall be as set forth in the Trust Agreement and nothing
contained in this Plan, either expressly or by implication, shall impose any
additional powers, duties or responsibilities upon the Trustee.

     9.4  Reversion to the Employer.  The Employer has no beneficial interest in
          -------------------------
the Trust Fund and no part of the Trust Fund shall ever revert or be repaid to
the Employer, directly or indirectly, except that the Employer shall upon
written request have a right to recover:

          (a)  within one year of the date of payment of a contribution by the
Employer, any amount (less any losses attributable thereto) contributed through
a mistake of fact;

          (b)  within one year of the date on which any deduction for a
contribution by the Employer under Section 404 of the Code is disallowed, an
amount equal to the amount disallowed (less any losses attributable thereto);
and

          (c)  at the termination of the Plan, any amounts remaining in the
Excess Forfeiture Suspense Account.

     9.5  Investment Options.  Each Participant shall direct the Trustee with
          ------------------
respect to the Investment Fund or Funds in which the Participant's contributions
and Accounts are to be invested.

          (a)  Subject to the discretion of the Committee to establish
additional Funds or to consolidate Funds, Funds shall be maintained as follows:

               (i)   At least one Fund shall be established, maintained and
     invested with the objective of protection of principal and substantial
     liquidity, with a rate of return consistent with such objective.

               (ii)  A second Fund shall be established, maintained and invested
     in common stock of the Company purchased (i) in the open market, (ii) by
     participation in a

                                       49
<PAGE>

     dividend reinvestment or similar plan available to stockholders of the
     Company, or (iii) privately from the Company or any other person; provided
     that amounts allocated to this Fund may be invested in short-term interest
     bearing accounts to facilitate investments in common stock of the Company,
     transfers among Funds or distributions to Participants.

               (iii)  At least two additional Funds shall be established,
     maintained and invested with objectives which, when combined with the other
     Funds, provide Participants with the opportunity to designate the
     investment of their Accounts among Funds providing a range of risk and
     return consistent with the requirements of the regulations of the
     Department of Labor under Section 404(c) of ERISA.

               (iv)   With respect to any Participant that participated in the
     Heritage Plan on September 30, 1998, a Fund holding Employer securities
     transferred to this Plan from the Heritage Plan as part of the merger of
     the Heritage Plan into this Plan effective October 1, 1998.

          (b)  A Participant shall designate the Fund or Funds into which any
contributions made to the Plan on behalf of the Participant shall be invested at
the time of initial Participation in the Plan. Thereafter, a Participant may
change the mix of the investment of future contributions and may transfer
existing Account balances among the Funds in accordance with procedures
established by the Committee from time to time. Notwithstanding any other
provision of the Plan, a Participant may not direct that any contributions to
the Plan be invested in, and no existing Account balances may be transferred to,
the Heritage Fund. However, existing Account balances invested in the Heritage
Fund may be transferred from the Heritage Fund to any other Fund maintained
under the Plan under such rules as may be established and uniformly applied by
the Committee from time to time.

          (c)  Designations under this Section 9.5 shall be made by filing with
the Committee the appropriate written form required thereby at such times and in
accordance with such procedures and limitations as the Committee may from time
to time establish. The Trustee shall invest the assets of the Plan attributable
to the Participant's Accounts in accordance with such properly filed
designations.

     9.6  Rollover from Prior Plan.  Notwithstanding any other provision
          ------------------------
contained in this Plan, the Trustee, at the written direction of the Committee,
may accept and hold for the account of a Participant, funds transferred from an
Employer's trust described in Section 401(a) of the Code, and which is exempt
from tax under Section 501(a) of the Code, and which: (1) relates to the merger
of the Heritage Plan into the Plan effective October 1, 1998; (2) relates to the
merger of the McHenry Plan into the Plan effective December 31, 1997; or (3) is
or was maintained by either the Continental Illinois Bank of Deerfield, N.A., or
the Continental Bank of Buffalo Grove, N.A., so long as such transferred amount
constitutes an eligible rollover distribution, within the meaning of Code
Section 402(c)(4) or any corresponding predecessor Code Section, from the
transferor plan. In the event of such a transfer, the Trustee shall establish
and maintain a Prior Plan Account, consisting of any

                                       50
<PAGE>

employer and rollover contributions to the Prior Plan and adjustments relating
thereto, and an After-Tax Account, consisting of any after-tax contributions to
the Prior Plan and adjustments relating thereto, in the name of the Participant,
which Accounts shall not be forfeitable for any reason. As regards the Heritage
Plan and the McHenry Plan, however, a Heritage Plan Account and McHenry Plan
Account, respectively, shall be established with respect to the employer
contributions accrued under the Heritage Plan and McHenry Plan, which Accounts
shall vest in accordance with Section 5.6. Furthermore, all benefits accrued
under the Heritage Plan and McHenry Plan, shall be separately accounted for and
subject to the optional forms of benefit set forth in Sections 6.2(b) and 6.3.
All funds or assets which are transferred to the Prior Plan Account and the
After-Tax Account shall be invested and accounted for separately; provided that
to the extent that any such balances have been generated by after-tax
contributions of the Participant, such Participant and his spouse may withdraw
such amounts to the extent of their after-tax contributions on request to the
Committee in writing. Assets in the Prior Plan Account and After-Tax Account
shall be accounted for in such manner as shall be determined by the Trustee.

                                       51
<PAGE>

                                  ARTICLE 10
                           Amendment or Termination
                           ------------------------

     10.1  Amendment.  The Company reserves the right to amend this Plan at any
           ---------
time to take effect retroactively or otherwise, in any manner which it deems
desirable including, but not by way of limitation, the right to increase or
diminish contributions to be made by the Employer hereunder, to change or modify
the method of allocation of its contributions, to change any provision relating
to the distribution or payment, or both, of any assets of the Trust.

     10.2  Termination. The Company further reserves the right to terminate this
           -----------
Plan at any time.

     10.3  Form of Amendment, Discontinuance of Employer Contributions, and
           ----------------------------------------------------------------
Termination. Any such amendment, discontinuance of Employer Contributions or
-----------
termination shall be made only by resolution of the Board of Directors of the
Company.

     10.4  Limitations on Amendments. The provisions of this Article are subject
           -------------------------
to the following restrictions:

           (a) Except as provided in Section 9.4, no amendment shall operate
either directly or indirectly to give the Employer any interest whatsoever in
any funds or property held by the Trustee under the terms hereof, or to permit
corpus or income of the Trust to be used for or diverted to purposes other than
the exclusive benefit of the Participants and their beneficiaries.

           (b) Except to the extent necessary to conform to the laws and
regulations or to the extent permitted by any applicable law or regulation, no
amendment shall operate either directly or indirectly to deprive any Participant
of his nonforfeitable beneficial interest in his Accounts as they are
constituted at the time of the amendment.

           (c) No amendment shall change any vesting schedule unless each
Participant who has completed 3 or more Years of Service is permitted to elect
to have the nonforfeitable percentage of his Employer Account computed under the
Plan without regard to such amendment. The period for making such amendment
shall expire no later than the latest of the following dates: (i) the date which
is 60 days after the date the Plan amendment is adopted, (ii) the date which is
60 days after the date the Plan amendment becomes effective, or (iii) the date
which is 60 days after the Participant is issued written notice of the Plan
amendment by the Committee. Notwithstanding the foregoing, no election need be
offered to a Participant whose nonforfeitable percentage of his Employer
Contribution Account cannot at any time be lower than such percentage determined
without regard to such amendment.

          (d) Except as permitted by applicable law, no amendment shall
eliminate or reduce an early retirement benefit or a retirement-type subsidy or
eliminate an optional form of benefit.

                                       52
<PAGE>

     10.5  Level of Benefits upon Merger.  This Plan shall not merge or
           -----------------------------
consolidate with, or transfer assets or liabilities to, any other plan, unless
each Participant shall be entitled to receive a benefit immediately after said
merger, consolidation or transfer (if such other plan were then terminated)
which shall be not less than the benefit he would have been entitled to receive
immediately before said merger, consolidation or transfer (if this Plan were
then terminated).

     10.6  Vesting upon Termination or Discontinuance of Employer Contributions;
           ---------------------------------------------------------------------
Liquidation of Trust.
--------------------

           (a) This Plan shall be deemed terminated if and only if the Plan
terminates by operation of law or pursuant to Section 10.2.  In the event of any
termination or partial termination within the meaning of the Code, or in the
event the Employer permanently discontinues the making of contributions to the
Plan, the Employer Contribution Account of each affected Participant who is
employed by the Employer on the date of the occurrence of such event shall be
nonforfeitable; provided, however, that in no event shall any Participant or
beneficiary have recourse to other than the Trust Fund for the satisfaction of
benefits hereunder.

           (b) In the event an Employer permanently discontinues the making of
contributions to the Plan, the Trustee shall make or commence distribution to
each Participant or his beneficiaries of the value of such Participant's
Accounts as provided herein within the time prescribed in Article 6.  However,
if, after such discontinuance the Company shall determine it to be impracticable
to continue the Trust any longer, the Company may, in its discretion, declare a
date to be the Determination Date for all Participants whose Determination Date
has not yet occurred, and the Trustee shall thereupon, as promptly as shall then
be reasonable under the circumstances, liquidate the Trust assets and distribute
to each such Participant his Accounts in the Trust Fund. Such date shall also
constitute the final distribution date for each Participant or beneficiary whose
Accounts are being distributed in installments.  Upon completion of such
liquidation and distribution, the Trust shall finally and completely terminate.

           (c) The liquidation of the Trust, if any, in connection with any Plan
termination shall be accomplished by the Committee acting on behalf of the
Company.  After directing that sufficient funds be set aside to provide for the
payment of all expenses incurred in the administration of the Plan and the
Trust, to the extent not paid or provided for by the Employer, the Committee
shall, as promptly as shall then be reasonable under the circumstances,
liquidate the Trust assets and distribute to each Participant his Accounts in
the Trust Fund.  Upon  completion of such liquidation and distribution, the
Trust shall finally and completely terminate.  In the event the Committee is no
longer in existence, the actions to be taken by the Committee pursuant to this
Section shall be taken by the Trustee.

                                       53
<PAGE>

                                  ARTICLE 11
                            Adoption by Affiliates
                            ----------------------

     11.1  Adoption of Plan.  Any Affiliate may adopt this Plan for the benefit
           ----------------
of its eligible employees if authorized to do so by a resolution or the terms of
an agreement approved by the Board of Directors of the Company.  Such adoption
shall be by resolution of such Affiliate's board of directors, a certified copy
of which shall be filed with the Company, the Committees and the Trustee. Upon
such adoption, such Affiliate shall become an "Employer."

     11.2  The Company as Agent for Employer.  Each Employer which has adopted
           ---------------------------------
this Plan pursuant to Section 11.1 hereby irrevocably gives and grants to the
Company full and exclusive power conferred upon it by the terms of the Plan and
Trust to take or refrain from taking any and all action which such Employer
might otherwise take or refrain from taking with respect to the Plan, including
sole and exclusive power to exercise, enforce or waive any rights whatsoever
which such Employer might otherwise have with respect to the Trust, and each
such Employer, by adopting this Plan, irrevocably appoints the Company its agent
for such purposes. Neither the Trustee nor the Committee nor any other person
shall have any obligation to account to any such Employer or to follow the
instructions of or otherwise deal with any such Employer, the intention being
that all persons shall deal solely with the Company as if it were the sole
company which had adopted this Plan. Each such Employer shall contribute such
amounts as determined under Article 3.

     11.3  Adoption of Amendments.  Any Employer which adopts this Plan pursuant
           ----------------------
to Section 11.1 may amend this Plan with respect to its own employees by
resolution of its board of directors, if authorized to do so by the Board of
Directors of the Company.

     11.4  Termination.  Any Employer which adopts this Plan pursuant to Section
           -----------
11.1 may terminate this Plan with respect to its own employees by resolution of
its board of directors, if authorized to do so by the Board of Directors.

     11.5  Data to be Furnished by Employers.  Each Employer which adopts this
           ---------------------------------
Plan pursuant to Section 11.1 shall furnish information and maintain such
records with respect to its employee Participants as called for hereunder, and
its determinations and notifications with respect thereto shall have the same
force and effect as comparable determinations by the Company with respect to its
employee Participants.

     11.6  Joint Employees.  If a Participant receives Considered Compensation
           ---------------
simultaneously from more than one Employer, the total amount of such Considered
Compensation shall be considered for the purposes of the Plan, and the
respective Employers shall share in contributions to the Plan on account of said
Participant based on the Considered Compensation paid to such Participant by the
Employer.

                                       54
<PAGE>

     11.7   Expenses.  To the extent that the Employers shall pay any of the
            --------
necessary expenses incurred in the administration of the Plan or Trust pursuant
to the Trust, then each Employer shall pay such portion thereof as the Company
shall determine.

     11.8   Withdrawal. An Employer may withdraw from the Plan by giving 60
            ----------
days' written notice of its intention to the Company and the Trustee, unless a
shorter notice shall be agreed to by the Company.

     11.9   Prior Plans.  If an Employer adopting the Plan already maintains a
            -----------
defined contribution plan covering employees who will be covered by this Plan,
it may, with the consent of the Company, provide in its resolution adopting this
Plan for the termination of its own Plan or for the merger, restatement and
continuation, of its own plan by this Plan. In either case, such Employer may,
subject to the approval of the Company, provide in its resolution of adoption of
this Plan for the transfer of the assets of such plan to the Trust for this Plan
for the payment of benefits accrued under such other plan. Any such plan is
referred to herein as a "Prior Plan".

     11.10  Merger of the Heritage Plan into the Plan. Effective October 1,
            -----------------------------------------
1998, the Heritage Plan shall be merged into this Plan. Notwithstanding any
other provision of this Plan, for all purposes other than eligibility to
participate, as provided in Section 2.1 of this Plan, the terms, conditions and
benefits of this Plan with respect to participants in the Heritage Plan on
September 30, 1998 shall, for the period commencing on October 1, 1998 and
ending on December 31, 1998, subject to amendment in accordance with the terms
of this Plan, be governed by the provisions of the Heritage Plan as in effect on
September 30, 1998, which provisions are incorporated into this Plan by this
reference as if fully set forth herein verbatim; provided, however, that: (i)
service with the Company and any of its Affiliates shall be deemed to be service
with the "Employer," as defined in Section 1.13 of the provisions of the
Heritage Plan, for purposes of determining a Heritage Employee's "Year of
Service" under Section 1.51 of the provisions of the Heritage Plan; and (ii) the
Trustee of this Plan shall constitute the "Trustee" under Section 1.48 of the
provisions of the Heritage Plan. On and after January 1, 1999, the provisions of
this Plan as amended from time to time, and without respect to the provisions of
the Heritage Plan, shall govern the terms, conditions and benefits of employees
who previously participated in the Heritage Plan.

                                       55
<PAGE>

                                  ARTICLE 12
                                 Miscellaneous
                                 -------------

     12.1  No Guarantee of Employment, etc. Neither the creation of the Plan nor
           -------------------------------
anything contained in the Plan or Trust Agreement shall be construed as giving
any Participant hereunder or other employee of the Employer any right to remain
in the employ of the Employer, any equity or other interest in the assets,
business or affairs of the Employer, or any right to complain about any action
taken or any policy adopted or pursued by the Employer.

     12.2  Rights of Participants and Others.
           ---------------------------------

           (a) Except as provided in the Plan with respect to loans to a
Participant, no Participant shall have any right to sell, assign, pledge,
hypothecate, anticipate or in any way create a lien upon any part of the Trust
Fund. Except to the extent required by law or provided in the Plan, no interest
in the Trust Fund, or any part thereof, shall be assignable in or by operation
of law, or be subject to liability in any way for the debts or defaults of
Participants, their beneficiaries, spouses or heirs-at-law, whether to the
Employer or to others.

           (b) Prior to the time that distributions are to be made hereunder,
the Participants, their spouses, beneficiaries, heirs-at-law or legal
representatives shall have no right to receive cash or other things of value
from the Employer or the Trustee from or as a result of the Plan and Trust.

     12.3  Qualified Domestic Relations Order.  Notwithstanding anything in this
           ----------------------------------
Plan to the contrary, the Committee shall distribute a Participant's Accounts,
or any portion thereof, in accordance with the terms of any domestic relations
order entered on or after January 1, 1985, which the Committee determines to be
a qualified domestic relations order described in Section 414(p) of the Code.
Further notwithstanding any other provision of this Plan to the contrary,
effective as of September 1, 1997, such distribution of a Participant's Accounts
or any portion thereof, to an alternate payee under a qualified domestic
relations order shall, unless such order otherwise provides, be made in one lump
sum as soon as administratively practicable after the Committee has determined
that a domestic relations order is a qualified domestic relations order
described in Code Section 414(p).

     12.4  Controlling Law.  To the extent not preempted by the laws of the
           ---------------
United States of America, the laws of the State of Illinois shall be controlling
state law in all matters relating to the Plan.

     12.5  Severability.  If any provision of this Plan shall be held illegal or
           ------------
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts of this Plan, but this Plan shall be construed and enforced as
if said illegal or invalid provision had never been included herein.

                                       56
<PAGE>

     12.6  Notification of Addresses. Each Participant and each beneficiary of a
           -------------------------
deceased Participant shall file with the Committee from time to time in writing
his post-office address and each change of post-office address.  Any
communication, statement or notice addressed to the last post-office address
filed with the Committee, or if no such address was filed with the Committee,
then to the last post-office address of the Participant or beneficiary as shown
on the Employer's records, will be binding on the Participant and his
beneficiary for all purposes of this Plan and neither the Committee nor the
Employer shall be obliged to search for or ascertain the whereabouts of any
Participant or beneficiary.

     12.7  Gender and Number.  Whenever the context requires or permits, the
           -----------------
gender and number of words shall be interchangeable.

                                   * * * * *

     IN WITNESS WHEREOF, in accordance with the authorizations and directions of
the Board of Directors at First Midwest Bancorp, Inc., this First Midwest
Bancorp Savings and Profit Sharing Plan, as Amended and Restated Effective
January 1, 1998, Except as Expressly Provided Otherwise, is hereby adapted on
behalf of the Company, effective as of such date, by the undersigned duly
authorized officer.

                              FIRST MIDWEST BANCORP, INC.

                              By: /s/ Robert P. O'Meara
                                 ----------------------------------
                                 Robert P. O'Meara
                                 Chairman and Chief Executive Officer

ATTEST:

/s/ James M. Roolf
----------------------------
Corporate Secretary

                                       57
<PAGE>

                             FIRST MIDWEST BANCORP

                        SAVINGS AND PROFIT SHARING PLAN
                        -------------------------------

     In accordance with the authorizations and directions of the Board of
Directors of First Midwest Bancorp, Inc., the attached First Midwest Bancorp
Savings and Profit Sharing Plan, As Amended and Restated Effective January 1,
1998, Except as Expressly Provided Otherwise, is hereby adopted effective as of
such date by the undersigned duly authorized officers.

                              FIRST MIDWEST BANCORP, INC.

                              By: /s/ Robert P/ O'Meara
                                  -------------------------------
                                  Robert P. O'Meara
                                  Chairman and Chief Executive Officer

ATTEST:

/s/ James M. Roolf
----------------------------------------
James M. Roolf
Corporate Secretary
<PAGE>

                             FIRST MIDWEST BANCORP

                        SAVINGS AND PROFIT SHARING PLAN

                                    ******

                           SUMMARY PLAN DESCRIPTION

                             RELATING TO THE PLAN

                                 AS IN EFFECT

                                JANUARY 1, 2000

                     This booklet, dated January 1, 2000,
                    makes up part of a prospectus covering
                     securities that have been registered
                       under the Securities Act of 1933.

                                       59
<PAGE>

                             FIRST MIDWEST BANCORP
                        SAVINGS AND PROFIT SHARING PLAN
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               Page #
                                                                                               ------
<S>                                                                                            <C>
GENERAL INFORMATION ABOUT THE PLAN............................................................   1

DESCRIPTION OF THE FIRST MIDWEST
     SAVINGS AND PROFIT SHARING PLAN..........................................................   2

WHAT ARE THE PURPOSES OF THE PLAN?............................................................   2

WHAT ARE THE PURPOSES OF THIS BOOKLET?........................................................   2

WHEN AM I ELIGIBLE TO JOIN THE PLAN?..........................................................   2

HOW MUCH CAN I ELECT TO CONTRIBUTE TO THE PLAN?...............................................   3

HOW MUCH WILL FIRST MIDWEST CONTRIBUTE
     TO THE PLAN ON MY BEHALF?................................................................   5

WHAT COMPENSATION IS TAKEN INTO ACCOUNT
     FOR PURPOSES OF PLAN CONTRIBUTIONS?......................................................   6

ARE ROLLOVER CONTRIBUTIONS AND ROLLOVER
     TRANSFERS PERMITTED UNDER THE PLAN?......................................................   7

WHAT IF I PREVIOUSLY PARTICIPATED IN A
     PLAN THAT WAS MERGED INTO THIS PLAN?.....................................................   7

HOW DO I BECOME VESTED IN CONTRIBUTIONS
     TO MY PLAN ACCOUNTS?.....................................................................   7

HOW ARE PLAN CONTRIBUTIONS INVESTED?..........................................................   8

HOW CAN I CHANGE MY INVESTMENT OPTIONS?.......................................................   9

WILL I RECEIVE A REGULAR STATEMENT OF
     THE VALUE OF MY PLAN ACCOUNT?............................................................   9

MAY I BORROW AMOUNTS FROM MY PLAN ACCOUNTS?...................................................  10
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                                     <C>
CAN I WITHDRAW PLAN CONTRIBUTIONS WHILE I AM STILL EMPLOYED?..........................................................  10

WHEN WILL I BE ENTITLED TO RECEIVE MY ACCOUNTS?.......................................................................  11

HOW AND WHEN ARE MY PLAN BENEFITS TAXED?..............................................................................  11

HOW IS THE PLAN ADMINISTERED?.........................................................................................  12

WHAT ARE MY RIGHTS WITH RESPECT TO SHARES OF FIRST MIDWESTCOMMON STOCK HELD IN THE CORPORATION COMMON STOCK FUND?.....  13

WHO PAYS TRANSACTION FEES, MANAGEMENT FEES AND PLAN EXPENSES?.........................................................  13

CAN THE PLAN BE CHANGED OR DISCONTINUED?..............................................................................  14

WHAT ELSE SHOULD I KNOW ABOUT THE PLAN?...............................................................................  14

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......................................................................  19
</TABLE>

                                      ii
<PAGE>

                           SUMMARY PLAN DESCRIPTION

                      GENERAL INFORMATION ABOUT THE PLAN

     First Midwest Bancorp, Inc. ("First Midwest") maintains the First Midwest
Bancorp Savings and Profit Sharing Plan ("Plan") to help you meet your long-term
financial goals. Under the Plan, you may save regularly through payroll
deductions, receive matching and profit sharing contributions, and reduce your
current income taxes.

     The Plan may be adopted by any affiliated company of First Midwest for the
benefit of its eligible employees. For purposes of this booklet, the term
"Employer" refers to both First Midwest and any affiliated companies that have
adopted the Plan. If an affiliated company adopts this Plan, it will be listed
in Appendix B to this booklet.

     The Plan is designed primarily as a deferred compensation program which
permits you to elect to contribute to the Plan on a before-tax basis. Because
such contributions reduce the amount of federal, and in most cases state, income
tax which you currently pay, they are known as "before-tax contributions." The
earnings on your before-tax contributions are also not taxable to you until
withdrawn. The Employer matches your before-tax contributions by contributing to
the Plan $2.00 for each $1.00 of the first 1% of your compensation you elect to
have contributed to the Plan on your behalf as before-tax contributions.

     The Employer may also make profit sharing contributions, known as "Employer
Contributions," to the Plan. Each year, after reviewing the performance of each
subsidiary, and of First Midwest on a consolidated basis, the Board of Directors
of First Midwest may determine an amount of Employer Contribution to be
contributed to the Plan on your behalf. An Employer Contribution is expressed as
a percent of compensation received during the year, while a Participant, and is
added to your Plan account. The Employer Contribution made on your behalf is not
included as part of your compensation for federal or state income tax purposes
so long as it remains in the Plan.

     The Plan permits participants to borrow a portion of the vested amounts in
their accounts subject to certain limitations. In addition, withdrawals of
before-tax contributions are allowed in the event of a demonstrated financial
hardship.

     All contributions are deposited in a trust fund and invested for you and
other participants. Your individual accounts will grow from Employer
contributions, your own contributions if you elect to contribute, and the tax-
deferred income from the Trust Fund's investments. You have the ability, within
limits, to direct the investment of your Plan account.

     The Plan is maintained on a calendar plan year, beginning January 1 and
ending December 31 ("Plan Year").
<PAGE>

                       DESCRIPTION OF THE FIRST MIDWEST
                        SAVINGS AND PROFIT SHARING PLAN

     The following questions and answers provide a summary of the legal
documents governing the Plan:

                      WHAT ARE THE PURPOSES OF THE PLAN?

     The purposes of the Plan are to encourage and assist employees in the
accumulations of capital for retirement by means of regular, before-tax
participant contributions and matching and profit sharing contributions by the
Employer. Additionally, the Plan provides a means for effectuating the desire of
many employees to have an ownership interest in First Midwest through the
Corporation's Common Stock, stimulating the efforts of employees and
strengthening their desire to remain employees of First Midwest.

                    WHAT ARE THE PURPOSES OF THIS BOOKLET?

     This booklet is a summary of the legal documents governing the Plan
effective on and after January 1, 2000, and only applies to persons employed by
the Employer on or after that date and to persons who have account balances in
the Plan on or after that date. You and your spouse (if you are married) should
read this booklet carefully. Raise any questions you may have with the Plan
Committee. The Plan Committee will be pleased to help you understand how the
Plan is designed to provide you with an additional measure of financial security
for your future.

                     WHEN AM I ELIGIBLE TO JOIN THE PLAN?

Eligibility
-----------

     If you are not now a participant, you will automatically become a
participant in the Plan on the first January 1 or July 1 on which you have
completed a 1-year eligibility period, have attained age 21 and are employed in
an eligible group of employees.

     In general, all employees (other than leased employees) of the Employer are
eligible. However, employees covered by a collective bargaining agreement under
which retirement benefits were the subject of good faith bargaining are not
eligible to participate unless the collective bargaining agreement provides for
their participation.

Eligibility Period
------------------

     To satisfy the 1-year eligibility requirement, you must complete at least
1,000 hours of service in a 1-year period of employment with the Employer or an
affiliated company. The 1-year period begins on the date you first perform
duties for the Employer or an affiliated company. However, because you may enter
the Plan only on January 1 or July 1, it is possible to wait

                                       2
<PAGE>

almost 18 months to become a participant, even if you are age 21. If you do not
complete 1,000 hours of service in your first eligibility period, you can meet
the requirement in later eligibility periods which correspond to the Plan Year.

Hours of Service
----------------

     You get an "hour of service" for each hour for which you are paid by the
Employer or an affiliated company for the job you perform. You may also be
credited with "hours of service" for certain paid absences, such as for
vacation, holidays, illness or disability, authorized leaves of absence, or if
you receive a back pay award. However, the maximum hours you can earn in any 12-
month period for any non-working time is 501 hours.

Eligibility for Purposes of Rollover Contributions
--------------------------------------------------

     If you are an eligible employee, you may become a participant in the Plan
immediately upon your employment, but only for the limited purpose of having a
rollover contribution, or rollover transfer, made to the Plan from another
qualified plan, directing the investment of your rollover account, and naming a
beneficiary to receive the balance in your rollover account. You may also borrow
from your rollover account in accordance with the terms of the Plan (see the
section of this booklet entitled "May I Borrow Amounts from My Plan Accounts?").
You will not be a participant entitled to make before-tax contributions or to
share in matching contributions or Employer Contributions until you have
completed the required period of service and have entered the Plan on the
appropriate entry date. See the applicable sections of this booklet for more
information. Additional information and rules governing rollover and rollover
transfer contributions are also available from the Plan Committee.

                HOW MUCH CAN I ELECT TO CONTRIBUTE TO THE PLAN?

Basic Before-Tax Contributions
------------------------------

     You may elect to have the Employer make before-tax contributions to the
Plan on your behalf of up to 1% of your regular compensation during each Plan
Year while you are a participant. These before-tax contributions are referred to
as your "basic before-tax contributions." Your basic before-tax contributions
         -----                                 -----
are matched by the Employer, as explained below.

Supplemental Before-Tax Contributions
-------------------------------------

     You may also elect to have the Employer make additional before-tax
contributions to the Plan on your behalf in full percentage increments of at
least 1% and up to 9% of your regular compensation during each plan year while
you are a participant. These before-tax contributions are referred to as your
"supplemental before-tax contributions," and are not matched by the Employer.
-------------                                    ---

                                       3
<PAGE>

Dollar Limitation On Before-Tax Contributions
---------------------------------------------

     Your total before-tax contributions may not exceed a certain dollar
limitation established by the IRS, and may be further limited in certain
circumstances. The dollar limitation for the 2000 calendar year is $10,500, but
this amount will be adjusted by the IRS in future years to reflect increases in
the cost-of-living.

Your Reportable Compensation
----------------------------

     The amount of your before-tax contributions (up to the applicable legal
limits) will reduce the amount of your compensation which is subject to federal
and certain state income taxes. However, your before-tax contributions will not
reduce the amount of your compensation subject to Social Security tax, nor your
Social Security benefits.

How Your Contributions Are Made to the Plan
-------------------------------------------

     All of your contributions will be deducted from your paycheck and
transferred by the Employer to the Trust Fund.

Changing Your Contribution
--------------------------

     You may change the amount of your before-tax contributions, or suspend your
before-tax contributions, on written notice to the Plan Committee. These changes
will be effective on January 1, April 1, July 1, or October 1 of each year,
provided notice is properly submitted at least 15 days prior to such dates.
Other benefits which you receive through First Midwest, such as life insurance,
social security benefits, disability benefits and pension benefits will be based
upon your salary before reduction for your before-tax Plan contributions.
                 ------

Limitations on Before-Tax Contributions
---------------------------------------

     In addition to the percentage of compensation and dollar limitations on
contributions as explained above, the Plan must meet certain other legal
requirements which limit the before-tax contributions elected by higher-paid
employees. You will be notified if your before-tax contributions must be reduced
or refunded. Similar restrictions apply to matching contributions made on behalf
of higher-paid employees. The Plan Committee reserves the right to restrict the
amount of contributions made by or on behalf of higher-paid employees to comply
with these requirements.

                                       4
<PAGE>

                    HOW MUCH WILL FIRST MIDWEST CONTRIBUTE
                           TO THE PLAN ON MY BEHALF?

Matching Contributions
----------------------

     As of the last day of each calendar quarter, the Employer will contribute
on your behalf, if you are employed by the Employer on that date, $2.00 for each
$1.00 of basic before-tax contributions you made during that calendar quarter.
         -----
Matching contributions will also be made on your behalf for a calendar quarter
if, prior to the last day of the calendar quarter, you retire on or after age 65
(or age 55 with 15 years of service), die, or are initially deemed to be totally
and permanently disabled. Special enhanced matching contributions apply during
the 1998 Plan Year. If these special matching contributions apply to you, you
will receive separate notifications about them.

Discretionary Employer Contributions
------------------------------------

     Each year, after reviewing the performance of each subsidiary, and of First
Midwest as a whole, First Midwest's Board of Directors may determine an
additional amount to be contributed to the Plan on behalf of eligible
participants. The contribution will be expressed as a percentage of compensation
received during the year (or half year for participants who entered the Plan on
July 1 of the year). Generally, this Employer Contribution will be in the range
of 0% to 6% of compensation.

     The Employer Contribution will only be added to your Plan account if:

          *    on December 31 of the year of the Employer Contribution, you were
               employed by an Employer and you completed 1,000 hours of
               employment during the year; or,

          *    your employment ended during the year due to retirement on or
               after age 65 (or age 55 with 15 years of service), disability or
               death.

     If your employment with the Employer terminates during the year for any
other reason, or you are employed on December 31, but did not complete 1,000
hours of employment during the year, you will not be eligible to receive an
Employer Contribution for that year.

General Limitations on Contributions
------------------------------------

     Under applicable IRS rules, the aggregate amount for any Plan Year of (1)
your before-tax contributions, (2) your share of the matching contributions and
discretionary Employer Contributions cannot exceed the lesser of 25% of your
compensation for the Plan Year or $30,000. You will be notified if this
limitation restricts any contributions made to the Plan on your behalf.

                                       5
<PAGE>

     The total amount of before-tax contributions, matching contributions and
discretionary Employer Contributions is also limited to the amount of such
contributions deductible by the Employer for federal income tax purposes.

     Discretionary Employer Contributions will increase the amount available to
you and your family when you retire or otherwise terminate employment. However,
they are subject to the vesting schedule of the Plan (see the section of this
booklet entitled "How Do I Become Vested In Contributions To My Plan
Accounts?").

                    WHAT COMPENSATION IS TAKEN INTO ACCOUNT
                      FOR PURPOSES OF PLAN CONTRIBUTIONS?

Compensation For Purposes of Before-Tax Contributions
-----------------------------------------------------

     Your compensation for purposes of determining the amount of your before-tax
and matching contributions is your base salary from the Employer, excluding
certain forms of irregular compensation, such as severance pay, bonuses and
other incentive compensation. However, any contributions you make under First
Midwest's Flexcomp Program for medical plan coverage, health care and child care
benefit expense accounts, and/or life insurance are included as part of your
compensation for purposes of determining your before-tax and matching
contributions.

Compensation For Purposes Of Employer Contributions
---------------------------------------------------

     Your compensation for purposes of determining your allocable share of
Employer Contributions (i.e., your discretionary profit sharing contributions)
is your total compensation from the Employer. It includes base salary, overtime,
and any employee bonuses and other incentive compensation and excludes stock
option income, nonqualified plan benefits, severance and transitional pay.
Additionally, any contributions you make under First Midwest's Flexcomp Program
for medical plan coverage, health care and child care benefit expense accounts,
and/or life insurance are also included as part of your compensation for
purposes of Employer Contributions.

Limitations On Compensation
---------------------------

     Only compensation earned while you are a participant in the Plan is taken
into account. For example, if you join the Plan on July 1, your compensation for
that year while you are a participant will be the total compensation you receive
during the 6-month period from July 1 through December 31. Also, due to IRS
limitations, for the 2000 plan year, annual compensation in excess of $170,000
(as adjusted by the IRS for changes in the cost of living) is not taken into
account for purposes of the Plan.

                                       6
<PAGE>

                    ARE ROLLOVER CONTRIBUTIONS AND ROLLOVER
                      TRANSFERS PERMITTED UNDER THE PLAN?

     You may, with the permission of the Plan Committee, make "rollover
contributions" to the Plan. A "rollover contribution" is an amount held for your
benefit under another qualified plan or in an IRA that is deposited with, or
transferred to, this Plan.

     The rollover contribution must be deposited with this Plan within 60 days
after distribution to you and must be made in cash. A rollover contribution
accepted by the Plan Committee will be credited to your separate rollover
account.

     You may also, with the permission of the Plan Committee, have a direct
rollover transfer of assets from any other qualified plan made to this Plan. Any
amount transferred will also be credited to your rollover account.

     If you are interested in making a rollover contribution, or a rollover
transfer, you should request information from the Plan Committee.

                    WHAT IF I PREVIOUSLY PARTICIPATED IN A
                     PLAN THAT WAS MERGED INTO THIS PLAN?

     If you were a participant in a Prior Plan, special rules may apply to your
Prior Plan Account. A "Prior Plan" is any tax-qualified plan that was merged
into this Plan. A "Prior Plan Account" is an account under this Plan
attributable to funds accumulated under the Prior Plan that were transferred
into this Plan. If you worked for an employer that was acquired by First Midwest
(an "acquired company"), and you participated in a profit sharing or 401(k) plan
sponsored by the acquired company, you may have a Prior Plan Account. Any
special provisions applicable to your Prior Plan Account, such as a separate
vesting schedule or additional optional forms of payment of your benefit, are
explained in a special appendix to this booklet. A separate appendix is created
for each Prior Plan if special rules apply to the Prior Plan Accounts
attributable to that Prior Plan. Check to see if a separate appendix to this
booklet applies to you. If you have any questions, contact the Plan Committee.

                    HOW DO I BECOME VESTED IN CONTRIBUTIONS
                             TO MY PLAN ACCOUNTS?

Vesting Schedule
----------------

     Vesting refers to your right to receive your Plan accounts. For purposes of
vesting, all of your service from the date of hire counts towards vested
service.

     You are, at all times, fully vested in the Plan with the respect to the
amounts which you have contributed (i.e., your before-tax contributions, any
rollover contributions or transfers, and

                                       7
<PAGE>

after-tax employee contributions made under a prior plan) and the investment
earnings thereon. You are also fully vested in all matching contributions made
to the Plan on your behalf, and the investment earnings thereon, at all times.

     You become vested in Employer Contributions (i.e., discretionary profit
sharing contributions), and investment earnings thereon, in accordance with the
following schedule:

                    Years of Service         Percent Vested
                    -------------------      ---------------

                    7 or more                    100%
                    6 but less than 7             80%
                    5 but less than 6             60%
                    4 but less than 5             40%
                    3 but less than 4             30%
                    2 but less than 3             20%
                    Less than 2                    0%

     Notwithstanding the above schedule, you will be 100% vested in all Employer
Contributions, and investment earnings thereon, if you retire after attaining
age 65 (or age 55 with 15 years of service), become permanently disabled or die.

     Amounts representing non-vested company contributions and earnings of
participants who terminate employment and who are less than 100% vested are
treated as "forfeitures" and used to reduce the Employer's future contributions.

                     HOW ARE PLAN CONTRIBUTIONS INVESTED?

     All Plan Contributions are paid to First Midwest Trust Company, N.A. (the
"Trustee"), a subsidiary of First Midwest, and are invested in accordance with
the provisions of the Plan and related Trust Agreement. The Trustee is
authorized to pay certain fees and expenses from the Plan. For a discussion of
the payment of transaction fees and other expenses, see the section of this
booklet entitled "Who Pays Transaction Fees, Management Fees and Plan Expenses?"

     Once you become a participant, you have the opportunity to choose the
manner in which your before-tax contributions, matching contributions, Employer
Contributions, as well as any rollover contributions or transfers, are invested.
You may invest all your contributions in one investment option or allocate your
contributions among the various investment options in multiples of 10%. The
investment options available under the Plan are listed in Appendix A of this
booklet. Plan investment options may be added, eliminated or modified from time
to time. You will be notified of any such changes.

     All dividends, interest, gains and losses received or incurred with respect
to each investment fund are allocated quarterly to each participant's Plan
account in the ratio that such

                                       8
<PAGE>

account balance invested in such fund bears to all account balances invested in
such fund. Adjustments are made for changes in any common stock held by an
investment fund resulting from stock dividends, stock splits or similar changes.

     The Plan is intended to comply with section 404(c) of the Employee
Retirement Income Security Act of 1974 (ERISA) and applicable Federal
regulations. Therefore, neither First Midwest, the Plan Committee, the Trustee
nor any other Plan fiduciary will be responsible for any losses you may incur as
a result of your investment elections.

                    HOW CAN I CHANGE MY INVESTMENT OPTIONS?

     You may change your investment allocation, with respect to future before-
tax, matching and Employer Contributions, or you may transfer existing account
balances between Plan investment funds, on January 1, April 1, July 1, and
October 1 of each year by giving proper written notice at least 15 days prior to
these dates. The Human Resources Department of your Employer should be contacted
in order to receive the appropriate forms for this purpose.

                     WILL I RECEIVE A REGULAR STATEMENT OF
                         THE VALUE OF MY PLAN ACCOUNT?

     The assets of the Plan are valued as of the last day of each calendar
quarter. As soon as practical thereafter, a statement which indicates the dollar
amount of your before-tax contributions, matching contributions, Employer
Contributions, and other Plan accounts, the investment earnings thereon, and any
transfers between Plan investment funds made during that quarter, will be
provided to participants.

     In addition to quarterly statements, an annual report for the Plan is
prepared by First Midwest. This annual report will include, among other
information, the performance of each Plan investment fund, any significant
changes with respect to the Trustee, the Plan, or the investment options
available under the Plan, and the allocation of Plan assets among the various
investment funds. The annual report also includes financial statements for the
Plan for the current and prior year. These financial statements include the
annual activity of the Plan, including contributions, investment income,
expenses and distributions to participants under the Plan, and other changes in
net assets available to Plan participants.

     The annual report of the Plan, in addition to all official Plan documents,
are available for review by Plan participants. In addition, each Plan
participant will receive, as soon as practicable after the last day of each
calendar year, a summary of the Plan's annual report for that year, at no cost
to the participant. In addition, each participant may obtain information about
the specific assets held in the various Plan investment funds, expenses and
charges, and certain other information upon request to the Plan Committee.

                                       9
<PAGE>

                  MAY I BORROW AMOUNTS FROM MY PLAN ACCOUNTS?

     You may borrow from the Plan against the aggregate value of your accounts.

     You may have only one loan outstanding at any time. Loans may not be less
than $1,000 nor more than the lesser of (i) 50% of the aggregate vested balance
of your accounts determined as of the last day of the calendar quarter preceding
the date of your loan request, or (ii) $50,000 (reduced by your highest
outstanding loan balance at any time during the l-year period preceding the date
the new loan is made). You may request a loan by submitting the required forms
to the Plan Committee.

     The amount necessary to fund the loan will be taken from your Plan accounts
invested in the various investment funds as you elect. The loan will be treated
as a separate investment of those accounts which will be credited with your
payments of principal and interest. The amount of your repayments will be
reinvested in the Plan investment funds in accordance with your investment
elections in effect at the time of repayment.

     Each participant interested in obtaining a loan from the Plan should
request from the Plan Committee forms and information relating to the interest
rate and other repayment terms, as well as the effect of the failure to make
timely loan payments and the effect of employment upon the loan.

         CAN I WITHDRAW PLAN CONTRIBUTIONS WHILE I AM STILL EMPLOYED?

     As noted in the responses to the previous questions, the Plan is designed
primarily to meet your long-range financial needs. ACCORDINGLY, THE WITHDRAWAL
OF BEFORE-TAX CONTRIBUTIONS IS SUBJECT TO SUBSTANTIAL RESTRICTIONS (However, see
the section of this booklet above regarding the ability to borrow from your Plan
account).

    Withdrawals of before-tax contributions (and certain employee after-tax
contributions under prior plans) are possible in the event of a demonstrated
financial hardship, subject to the approval of the Plan Committee. Such
approvals are necessary in order to meet Internal Revenue Service rules. The
financial need to be met for withdrawal of before-tax or after-tax contributions
must be an amount not reasonably available from your other resources. If you are
married, the written consent of your spouse, witnessed by a notary public or
Plan representative, is required for such a withdrawal. WITHDRAWALS OF MATCHING
AND EMPLOYER CONTRIBUTIONS ARE NOT PERMITTED UNDER ANY CIRCUMSTANCES.

     In the event you incur a "financial hardship" that cannot be fully
satisfied with a loan from the Plan, you may request to withdraw from your prior
plan after-tax contributions account and, if necessary, your before-tax
contributions and earnings credited thereon prior to 1989, the amount necessary
to satisfy the hardship. A financial hardship is defined to mean an immediate
and heavy financial need which includes extraordinary expenses due to accident,
sickness,

                                      10
<PAGE>

disability or other financial emergency affecting you or any of your dependents,
tuition for college or postgraduate education for you, your spouse, children or
dependents, amounts needed for the purchase of your principal residence or to
prevent eviction or foreclosure on your principal residence.

     Internal Revenue Service regulations require participants who request
hardship withdrawals to demonstrate that the amount needed from the Plan is not
reasonably available from the resources of the participant and his or her
spouse. Additionally, a participant must fully suspend all before-tax
contributions for at least 12 months and limit contributions made during the
following calendar year as a condition to receiving the hardship withdrawal.

                WHEN WILL I BE ENTITLED TO RECEIVE MY ACCOUNTS?

     You will be entitled to the entire balance in your Plan accounts when you
retire, terminate employment with the Employer become totally disabled or die,
subject to the vesting provisions outlined in the section of this booklet
entitled "How Do I Become Vested In Contributions To My Plan Accounts?"

     Distributions of Plan account balances will be made in a single lump sum
payment of cash only. However, you may elect to receive an "in-kind"
distribution of shares of Corporation Common Stock representing the portion of
your account balances invested in the FMBI Stock Fund (see section of this
booklet entitled, "What Special Rules Apply to the FMBI Stock Fund?"). If you
have a Prior Plan Account, additional optional forms of payment may apply to
your Prior Plan Account (see the section of this booklet entitled "What If I
Previously Participated In A Plan That Was Merged Into This Plan?").

     Generally, lump sum benefits are payable as soon as practicable after the
                                                                     -----
quarterly valuation date (March 31, June 30, September 30, and December 31)
which follows your separation from service with the Employer. If you become age
65 in the year you leave, and your benefit is at least $5,000, you can defer
your lump sum until after the end of the year. The amount of the benefit will
then be based on the value of your account on December 31. Payment in that case
will be within 60 days after year end.

     You may elect to leave your account balance in the Plan after you terminate
participation. This election applies only to the entire account balance. If you
                                                 ------
subsequently elect to withdraw such balance, the withdrawal will be payable
after the next quarterly valuation date.

     If you die before receiving your account distribution, the distribution
will be made to the beneficiary or beneficiaries you and/or your spouse have
designated. If no beneficiary is designated, or if no beneficiary is living at
the time the benefit is payable, the account distribution will be made to your
estate.

                                      11
<PAGE>

                   HOW AND WHEN ARE MY PLAN BENEFITS TAXED?

     For federal and state income tax purposes, before-tax contributions,
matching contributions, Employer Contributions, rollover contributions and
transfers to the Plan are not included in the income of Plan participants in the
year in which such contributions or transfers are made. In accordance with rules
summarized below, federal and state income taxation of account balances of
participants is deferred until those account balances are distributed to
recipients. Also, while employee after-tax contributions made under a prior plan
are not subject to income tax, investment earnings on such funds are only tax-
deferred until the date of distribution.

     Under IRS regulations, certain employees must begin receiving distributions
under the Plan beginning no later than April 1 of the calendar year following
the calendar year in which they attain age 70-1/2. You will be notified if these
rules apply to you. Any such distributions (exclusive of the amount of any
after-tax contributions in a prior plan account) will generally be taxed as
ordinary income at the regular rates in effect in the year of distribution.

     Distributions made from the Plan to a participant before the participant
attains age 59-1/2 may be subject to a special 10% additional income tax on the
amount of the distribution. This additional tax will not be applicable if the
distribution is made because the participant has become disabled, died, or if it
is made to the participant after separation from service after attainment of age
55. Further, the additional tax will not be applicable to a distribution to the
extent the distribution does not exceed the amount allowable as a deduction on
the participant's individual income tax return for amounts paid during the
taxable year for medical care. There are other limited exceptions to the 10%
additional income tax. You should consult with a qualified tax advisor if you
think the 10% additional income tax may apply to you.

     Distributions from the Plan will generally be subject to mandatory 20%
withholding for federal income tax unless the distribution is transferred
directly to an IRA or another company's tax-qualified retirement plan. If a
direct transfer is not elected at the time of distribution, you may still
rollover your distribution to an IRA or another tax-qualified plan within 60
days after receipt of the distribution along with an amount from your other
assets equal to the withholding.

     Hardship distributions will be subject to mandatory 10% withholding for
federal income tax.

     Special tax rules apply if you elect to receive an "in-kind" distribution
of Common Stock for the portion of your account balance invested in the FMBI
Stock Fund (see section of this booklet entitled, "What Special Rules Apply to
the FMBI Stock Fund?").

     Each Participant will receive distribution election forms and other
material in connection with any distributions from the Plan which provides
additional information regarding the foregoing tax rules.

                                      12
<PAGE>

          BECAUSE OF THE COMPLEXITY OF THE FEDERAL TAX LAWS, AND THE
     APPLICATION OF STATE AND LOCAL TAX LAWS, PARTICIPANTS ARE ADVISED TO
         CONSULT THEIR PERSONAL TAX ADVISORS REGARDING THESE MATTERS.

                         HOW IS THE PLAN ADMINISTERED?

     The Plan is administered by a Plan Administration Committee (the "Plan
Committee") which is appointed by the management of First Midwest. The assets of
the Plan are held and administered by the Trustee for the Plan in accordance
with the terms and conditions of the First Midwest Bancorp Savings and Profit
Sharing Trust.

     The Plan Committee has the responsibility for controlling and managing the
operation and administration of the Plan, which includes construing and
interpreting the Plan's provisions, deciding all eligibility questions,
verifying the need for and approving qualifying withdrawal requests, approving
Plan loans, determining the amount, manner and time of payment of any benefit
under the Plan and determining whether death or total and permanent disability
has occurred. In exercising its responsibilities, the Plan Committee is
obligated to act in a non-discriminatory manner. The Plan Committee's decisions
with respect to all disputes involving participating employees or their
beneficiaries are final, conclusive and binding.

     In connection with its administrative responsibilities, the Plan Committee
may employ such agents to perform clerical and other services, and such legal
counsel, accountants and actuaries as it may deem necessary or desirable for the
operation and administration of the Plan. In connection with any action or
determination, the Plan Committee is entitled to rely upon information furnished
by the Trustee and upon tables, valuations, certificates, opinions and reports
furnished by any trustee, accountant or legal counsel.

     Plan Committee members receive no special compensation for their services
in administering the Plan, have no specified term of office and may be removed
at any time by the management of First Midwest. The address and telephone number
of the Plan Committee is listed in the section of this booklet entitled "What
Else Should I Know About the Plan?"

               WHAT SPECIAL RULES APPLY TO THE FMBI STOCK FUND?

     The Plan offers a fund invested in the Corporation's Common Stock (the
"FMBI Stock Fund"), as more fully described in Appendix A of this booklet, as an
investment option. Participants with Plan accounts invested in the FMBI Stock
Fund will be permitted to direct the Trustee with respect to voting and other
shareholder rights relating to the First Midwest Common Stock held in the FMBI
Stock Fund to the same extent as other stockholders of the corporation.
Participants in the FMBI Stock Fund receive the same materials First Midwest
provides other stockholders regarding voting and other shareholder action.
Participants are also provided instructions and forms with which to direct the
Trustee as regards the shares of First Midwest Common Stock held in their FMBI
Stock Fund account. Such participant directions to the

                                      13
<PAGE>

Trustee regarding voting and other shareholder action are kept confidential from
First Midwest and its affiliated companies. Participants are notified of the
Plan Committee's procedures to ensure such confidentiality.

     You may elect as part of your lump sum payment to receive an "in-kind"
distribution of shares of Common Stock representing the portion of your account
balance invested in the FMBI Stock Fund. There is a special tax rule that
applies to an "in-kind" distribution. Under the special rule, you may elect to
not pay tax on the "net unrealized appreciation" of the shares of Common Stock
until you sell the shares. "Net unrealized appreciation" is generally the
increase in the value of the shares while they were held in the Plan. If you
receive an "in-kind" distribution and elect to have the special rule apply, you
will be required to pay tax on the value of the shares when received, minus the
net unrealized appreciation (which will not be taxed until you sell the shares).
You may elect not to have the special rule apply and either pay tax on the full
value of the shares when received or rollover the shares to an IRA or another
employer plan. If you roll over the shares, you will not be able to take
advantage of the special "net unrealized appreciation" rule in the future with
respect to such shares. You will receive distribution election forms and other
material describing the election and special tax rule in connection with any
distributions (see section entitled, "How are my Plan Benefits Taxed?").

         WHO PAYS TRANSACTION FEES, MANAGEMENT FEES AND PLAN EXPENSES?

     The Plan provides that any fees or expenses incurred in conjunction with
the administration of the Plan will be paid by the Plan to the extent not paid
by First Midwest. Since the inception of the Plan on January 1, 1985, First
Midwest has paid all fees and expenses assessed by the Trustee for
administration of the Plan and its investment funds. Should First Midwest elect
not to pay the fees and expenses incurred in the administration of the Plan,
such expenses will be paid out of the Plan investment funds, by the Trustee.

     All transaction costs (i.e., brokerage fees) of each Plan investment fund
will be paid by the Trustee from the assets of such Plan investment fund. When
First Midwest Common Stock is purchased for the FMBI Stock Fund from First
Midwest, no fees, commissions or other charges are paid by the Plan, Trust or
your account. However, any fees, commissions or other charges associated with
the purchase of First Midwest Common Stock in the open market are paid by the
FMBI Stock Fund and shared on a pro rata basis by the participants invested in
the FMBI Stock Fund. Likewise, all fees, commissions or other charges associated
with the purchase of common equity stocks and fixed income securities for each
other investment fund option under the Plan are paid from that fund, and
allocated among the participants whose accounts are invested in that fund.

     The Trustee charges an annual fee for its services based upon current
competitive market rates. Information regarding expenses and charges paid by the
Plan may be obtained upon request from the Plan Committee.

                                      14
<PAGE>

                   CAN THE PLAN BE CHANGED OR DISCONTINUED?

     The Board of Directors of First Midwest may modify or amend the Plan at any
time in any respect, or terminate the Plan at any time, except that no amendment
or termination may deprive any participant of any rights or benefits irrevocably
vested prior to such amendment. The Plan, if and as amended, must continue to be
maintained exclusively for the benefit of Plan participants and beneficiaries.
Amendments required by a change in tax laws are not, however, subject to the
restrictions set forth in the preceding sentences. The First Midwest Bancorp
Savings and Profit Sharing Trust can be amended at any time by First Midwest,
except that no such amendment shall divest any benefits held in the Trust for
any Plan participant or beneficiary under the Plan.

     Upon termination, all Plan contributions and earnings thereon become
nonforfeitable and will be distributed to participants in proportion to their
individual interests and no part thereof shall revert to the Employer. See the
section of this booklet entitled "How and When are My Plan Benefits Taxed?" for
a discussion of the tax consequences of such a termination.

                    WHAT ELSE SHOULD I KNOW ABOUT THE PLAN?

Naming a Beneficiary
--------------------

     Since your Plan accounts are fully payable in the event of your death, you
will be asked to name one or more beneficiaries. If you are not married, you may
name anyone, and you may change your designation at any time, using the
appropriate form available for this purpose.

     However, if you are married and do not name your spouse as sole
beneficiary, the informed consent of your spouse to an alternate beneficiary is
required. Your spouse's consent must be in writing and notarized. Be sure to
keep your designation up to date as your family and personal circumstances
change. The Plan Committee can only direct payment of your benefits to the
beneficiary or beneficiaries you properly designate.

     If you die with no surviving beneficiary, the Plan Committee will direct
the payment of your Plan account to your spouse or, if there is no surviving
spouse, to your children in equal shares. If there is no surviving spouse or
child, your death benefits will be paid to your mother and father in equal parts
or, if none survive, to your estate.

Reemployment
------------

     If you terminated employment and are reemployed within one year, your
period of absence counts as service and you can participate or re-participate if
you otherwise meet the Plan's eligibility requirements.

                                      15
<PAGE>

     If you are reemployed after one year, your period of prior employment, but
not your period of absence, counts as service if:

     .    You had two or more years of service when your employment terminated,
          or

     .    Your absence is less than 5 years (6 years in the event of maternity
          or paternity leave).

     If you are reemployed within five years (six in the event of
maternity/paternity leave), any amount you forfeited can be returned to your
account if you repay the amount of the Employer Contribution Account you
received when you left.

Non-Alienation of Benefits
--------------------------

     Except for tax withholding, a Plan loan to you, or a qualified domestic
relations order (described below), your benefits under the Plan cannot be
assigned or alienated in any way. You may not sell, transfer, pledge, or
                                  --------------------------------------
otherwise use your benefits to obtain credit in any form. The Plan is not liable
--------------------------------------------------------
for or subject to, and will not pay, any debts or obligations of a participant
who is eligible for benefits.

Domestic Relations Order
------------------------

     If a qualified domestic relations order is entered against you, the Plan
may be required to pay all or part of your benefits to someone else. A domestic
relations order is a court-ordered judgement or decree under state law that
requires payment of child support, alimony, or marital property rights to a
spouse, former spouse, child, or other dependent. To be qualified, the order
must clearly specify who is to be paid, the amount to be paid, the number of
payments, and the plan or plans to which the order applies. The form of benefit
provided by the Plan cannot be changed. You will be notified if such an order is
received with respect to your Plan account. In such event, you will be advised
of the Plan Committee's procedures for determining whether the order is
qualified.

Benefits Not Insured
--------------------

     The Plan is classified as a defined contribution plan. Therefore, it is not
insured by the Pension Benefit Guaranty Corporation, which only applies to
pension plans classified as defined benefit plans under the Employee Retirement
Income Security Act of 1974. The Plan is audited each year by an independent
accounting firm.

Employment Rights Not Implied
-----------------------------

                                      16
<PAGE>

     Participation in the Plan does not give you the right to be retained in
employment with the Employer. Notwithstanding Plan participation, an Employer
may discharge or terminate any employee at any time.

Official Plan Documents
-----------------------

     This Summary Plan Description contains the highlights of the First Midwest
Bancorp Savings and Profit Sharing Plan. All of your rights and benefits are
described in the official plan and trust document, which is controlling. The
Plan identification number for government filings is EIN 36-3161078, PN 002.

Telephone Numbers and Addresses You Should Know
-----------------------------------------------

     You can reach the Plan Committee at First Midwest Bancorp, Inc., 300 Park
Boulevard, Suite 400, Itasca, Illinois 60143. The Plan Committee can be reached
by telephone at (630) 875-7211.

     The Trustee of the Plan is First Midwest Trust Company, N.A. The Trustee's
address is 121 North Chicago Street, Joliet, Illinois 60432.

     Service of legal process may be made upon the Trustee as well as the Plan
Committee.

Claims Procedure
----------------

     When a distribution or other determination of benefits under the Plan is
made or denied, you will receive a notice explaining how the distribution was
calculated or why benefits have been denied. Such action will generally be taken
within 90 days of the request for the distribution or determination of benefits,
unless the Plan Committee notifies you in writing that an extension (not to
exceed an additional 90 days) is needed in order to make the determination. If
you believe that a distribution calculation or denial is incorrect, you may
request a full review by the Plan Committee within 60 days after you receive the
notice. You have the right to review pertinent documents and submit issues and
comments in writing. If you want to appeal the decision on a denied application,
send details in writing to the Plan Committee.

     All disputed claims will be reviewed by the Plan Committee or its delegate.
They will notify you of their findings and decision in writing within 60 days
(unless special circumstances require an extension, not to exceed an additional
60 days) after they receive the appeal. Your notification will include reasons
for the Plan Committee's decision and references to the Plan provisions on which
the decision is based.

                                      17
<PAGE>

Your Rights Under the Law
-------------------------

     As a participant in the Plan, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 (ERISA).
ERISA is a Federal law that established rules for the operation of pension and
profit sharing plans. In general, ERISA sets standards for (1) employees'
eligibility, participation, vesting and benefit accrual; (2) reports to the
Federal Government and to Plan participants of information concerning the Plan
and Plan participants' rights under the Plan; and (3) the conduct and
responsibilities of the persons who administer and control the Plan. The Plan is
subject to the provisions of Titles I and II of ERISA, including the provisions
with respect to reporting, disclosure, participation, vesting and fiduciary
responsibilities. The Plan, however, is not subject to the minimum funding
standards of ERISA Title I and, therefore, benefits under the Plan are not
guaranteed by the Pension Benefit Guaranty Corporation under Title IV of ERISA.
The following is a summary of your rights under ERISA:

     .    You may read all Plan documents, including the official Plan document,
          the trust agreement, and the Plan description and annual financial
          reports that are filed with the U.S. Department of Labor.

     .    You will automatically receive a summary of the Plan's annual
          financial report at no cost. You may examine the complete report or
          any of the other documents referred to above without charge. If you
          would like a copy of any of them for yourself, you may obtain one at a
          reasonable cost by writing the Plan Committee.

     .    Upon written request to the Plan Committee once a year you can obtain,
          without cost, a statement telling you whether you have enough service
          to qualify for the full balance of your Employer Contribution Account
          if you should leave, and if not, how may more years of service you
          need to become eligible.

     .    If your claim for a Plan benefit is denied in whole or in part, you
          have the right to a written explanation, and upon request, a review
          and reconsideration of the claim denial.

     .    The people who operate the Plan are called fiduciaries. They must act
          prudently and in the interests of you and other Plan participants and
          beneficiaries.

     .    Under ERISA you can take action to enforce your rights. Furthermore,
          you cannot be fired, nor can your employer or any other person
          discriminate against you in any way to prevent you from obtaining a
          plan benefit or exercising your rights under ERISA.

     .    If you request documents you are entitled to receive, and the Plan
          Committee does not comply within 30 days, you may file suit in federal
          court. The court may

                                      18
<PAGE>

          require the Plan Committee to provide the requested materials and pay
          up to $100 for each day of delay, unless the delay was beyond the Plan
          Committee's control.

     .    If you file a claim for benefits and it is denied in whole or in part,
          or ignored, you may file suit in a state or federal court. If you
          believe a Plan fiduciary has misused the plan's money, or if you are
          discriminated against for asserting your ERISA rights, you may file
          suit in a federal court or seek help from the U.S. Department of
          Labor. In the event you have sued and win, the court may order the
          person you have sued to pay court costs and fees. On the other hand,
          if you lose, you may have to pay court costs and fees yourself if, for
          example, the court decides your claim is frivolous.

     If you have questions about the Plan, write directly to the First Midwest
Human Resources Department at the Corporate Office. If you have questions about
this statement of rights under ERISA, or about your rights under ERISA, you
should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or
the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits
Administration, U. S. Department of Labor, 200 Constitutional Avenue, N.W.,
Washington, D.C. 20210.

                    ***************************************

                                      19
<PAGE>

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The following documents have heretofore been filed by First Midwest with
the Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934 and are incorporated by reference into this
Summary Plan Description:

               (i)   The Corporation's latest Annual Report on Form 10-K.

               (ii)  The Corporation's Quarterly Reports on Form 10-Q and other
     reports filed with the Commission since the end of the Corporation's fiscal
     year covered by its latest Annual Report on form 10-K.

               (iii) The description of the Common Stock of the Corporation, no
     par value, and the description of the Preferred Share Purchase Rights of
     the Corporation, as contained in applicable Registration Statements on Form
     8-A and other reports filed by the Corporation with the Commission amending
     such descriptions.

               (iv)  The Plan's latest Annual Report on Form 11-K.

     Upon oral or written request, the Corporation will furnish without charge
to each person to whom this prospectus is delivered, a copy of any and all of
the documents referred to in this section, other than exhibits thereto not
incorporated by reference into such documents.  Such requests should be
addressed to the Plan Committee or to the Director of Communications, First
Midwest Bancorp, Inc., 300 Park Boulevard, Suite 400, Itasca, Illinois 60143;
telephone (630) 875-7211.

                                      20
<PAGE>

                                  APPENDIX A

                           INVESTMENT OPTIONS UNDER
                           THE FIRST MIDWEST BANCORP
                        SAVINGS AND PROFIT SHARING PLAN
                        -------------------------------

     As of January 1, 2000, your contributions will be invested by the Trustee
in the following investment options, in accordance with your investment
direction:

                                  ARTICLE 13

Money Market Fund - The Money Market Fund is managed by First Midwest Trust
-----------------
Company to provide current money market yield through high quality short term
investments.  The principal objectives of the Money Market Fund are protection
of principal, high liquidity and competitive money market yields for the given
risk level.

                                  ARTICLE 14

Fixed Income Fund - The Fixed Income Fund provides attractive, risk adjusted
-----------------
total return through the use of intermediate-term (1-15 years) interest bearing
securities.  A ladder of maturity approach is used in which a portion of the
portfolio matures in each year over the next 5-15 years.  The average maturity
of the portfolio will generally range from 3-7 years.  The portfolio is
diversified by maturity and by issue (with the exception of U.S. Government
securities.  Most bonds purchased have a quality rating of AA or better (this is
the second highest rating possible).

                                  ARTICLE 15

Balanced Fund - The Balanced Fund is managed by First Midwest Trust Company to
-------------
be a diversified fund comprised of common stocks, not including First Midwest
Common Stock, and fixed income investments.  Common stock investments of the
Balanced Fund represent high quality, well capitalized companies with the
potential for long-term capital appreciation and dividend growth, which are
selected with the objective of providing above average growth of income and
capital with below-market volatility.  The investment guideline for the common
stock investments of the Balanced Fund is 40-60% of the current fair market
value of the fund although the level of common stock investments may be above or
below this range as the investment manager in its discretion may permit.

          The Balanced Fund also maintains fixed income investments with various
          maturities not in excess of 10 years.  This strategy allows the
          Balanced fund to increase the average return from fixed income
          investments without sacrificing liquidity or assuming substantial
          interest rate risk.  The majority of the fixed income investments
          purchased by the Balanced Fund will generally consist of U.S.
          Government and U.S. Government Agency Securities.

                                      21
<PAGE>

                                  ARTICLE 16

Equity Fund - The Equity Fund is managed by First Midwest Trust Company to
-----------
provide above average growth of income and capital with below market volatility.
This fund invests in value oriented common stocks with a relatively low
price/earnings ratio. Additionally, this fund is diversified by industry.
Although the actual mix of stocks varies from time to time at the manager's
discretion, in general the amount invested in one industry is limited to 20
percent of the common stocks and the amount invested in one company is limited
to 15 percent of the common stocks.  This diversification reduces the risk
exposure.

          This fund is long term oriented and invests in undervalued (out of
          favor) high quality companies that have an annual increase in
          earnings.  Due to this conservative approach, you can normally expect
          to under-perform the market in a strong up-market and out-perform the
          market in a strong down-market.  This disciplined approach has
          provided attractive long-term returns relative to those of the Fixed
          Income Fund or the Balanced Fund.

                                   ARTICLE 17

Corporation Common Stock Fund (the "FMBI Stock Fund") - Amounts allocated to
-----------------------------------------------------
this fund will be invested in shares of Common Stock purchased by the First
Midwest Trust Company either in open market transactions (through the NASDAQ
National Market System) or in private transactions from First Midwest or other
persons.  When Common Stock is purchased directly from First Midwest, the price
per share will be the average of the high and low sale prices reported by the
NASDAQ National Market System on the trading day preceding the purchase, and no
fees, commissions or other charges will be paid in connection with such
purchase.  Any fees, commissions or other charges associated with the purchase
of Common Stock in open market transactions will be paid by the FMBI Stock Fund.
Effective September 30, 1999, all cash dividends paid on the Common Stock held
by the FMBI Stock Fund and any distributions of Common Stock received by the
Trustee by reason of a stock dividend or stock split, or other similar
transaction, will be credited to the FMBI Stock Fund during the quarter in which
the record date for the dividend or other distribution occurs.

     From time to time a portion of the Fixed Income, Balanced, Equity, FMBI
Stock Fund will be held as a cash reserve for purposes of distributions upon
termination of employment, hardship withdrawals, Plan loans or transfer to other
Plan investment funds. All cash maintained by the FMBI Stock Fund will be
invested in an interest-bearing cash management account.

                                      22
<PAGE>

                                  APPENDIX B

                        PARTICIPATING EMPLOYERS IN THE
                       FIRST MIDWEST BANCORP SAVINGS AND
                              PROFIT SHARING PLAN
                              -------------------

                           First Midwest Bank, N.A.
                       First Midwest Trust Company, N.A.
                          First Midwest Bancorp, Inc.
                        First Midwest Mortgage Company

                                      23
<PAGE>

                                  APPENDIX C

          SPECIAL PROVISIONS APPLICABLE TO PRIOR PARTICIPANTS IN THE
          MCHENRY STATE BANK PROFIT SHARING AND SAVINGS PLAN & TRUST
          ----------------------------------------------------------

     If you were a participant in the McHenry State Bank Profit Sharing and
Savings Plan & Trust ("McHenry Plan") on December 31, 1997, the date the McHenry
Plan was merged into this Plan, your McHenry Plan Account is subject to a
separate vesting schedule.  Also, additional optional forms of payment of your
McHenry Plan Account are available.  Your "McHenry Plan Account" consists of
discretionary  employer contributions made on your behalf under the McHenry
Plan, and transferred to this Plan, subject to adjustments for investment
earnings or losses and any distributions made from the Account.  The special
rules applicable to your McHenry Plan Account are more fully described below:

Vesting Rules Applicable To McHenry Plan Accounts
-------------------------------------------------

     Notwithstanding any other provisions of this booklet, your McHenry Plan
Account vests according to the following schedule:

                    Years of Service     Percent Vested
                    -------------------  ---------------
                    Less than 2                0%
                    2 but less than 3         20%
                    3 but less than 4         30%
                    4 but less than 5         40%
                    5 or more                100%

Optional Forms Of Payment Applicable To McHenry Plan Accounts
-------------------------------------------------------------

     You or your designated beneficiary, as applicable, may elect to receive
your vested interest in any portion of your Plan account attributable to
benefits accrued under the McHenry Plan in any one or a combination of the
following methods: (1) by payment in a lump sum; (2) by payment in monthly
installments over a period not to exceed your statistical life expectancy or the
life expectancy of you and your beneficiary; or by payment through the purchase
of an annuity contract from a registered insurance company selected by the
Trustee. If you are vested in any portion of your McHenry Plan Account, you will
be provided with special distribution and other forms relating to your benefits
under this Plan attributable to the benefits you accrued under the McHenry Plan.

                                      24
<PAGE>

                                  APPENDIX D

          SPECIAL PROVISIONS APPLICABLE TO PRIOR PARTICIPANTS IN THE
                HERITAGE FINANCIAL SERVICES PROFIT SHARING PLAN
                -----------------------------------------------

     If you were a participant in the Heritage Financial Services Profit Sharing
Plan ("Heritage Plan") on October 1, 1998, the date the Heritage Plan was merged
into this Plan, your Heritage Plan Account is subject to the same vesting
schedule applicable to Employer Contributions under the Plan (see the section
entitled "How Do I Become Vested in Contributions to My Plan Accounts") and
additional optional forms of payments described below.  Your "Heritage Plan
Account" consists of your account balance under the Heritage Plan as transferred
to this Plan, subject to adjustments for investment earnings or losses and any
distributions made from the Account after October 1, 1998.

Optional Forms Of Payment Applicable To Heritage Plan Accounts
--------------------------------------------------------------

     You or your designated beneficiary, as applicable, may elect to receive
your vested interest in any portion of your Heritage Plan Account in any one or
a combination of the following methods: (1) by payment in a lump sum; (2) by
payment in monthly installments over a period not to exceed your statistical
life expectancy or the life expectancy of you and your beneficiary; or by
payment through the purchase of an annuity contract from a registered insurance
company selected by the Trustee.  If you are vested in any portion of your
Heritage Plan Account, you will be provided with special distribution and other
forms relating to your benefits under this Plan attributable to your Heritage
Plan Account.

                                      25

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