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Table of Contents April Dear Stockholder: You are cordially invited to attend the The matters to be acted on at the Annual Meeting are described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. Also enclosed We are pleased to offer multiple options for voting your shares. As detailed in the Questions and Answers section of the Proxy Statement, you Your vote is very important to us. Whether or not you plan to attend the meeting in person, your shares should be represented and voted. On behalf of our Board of Directors, I would like to express our appreciation for your continued interest in First Midwest. I hope you will be able to attend the Annual Meeting. Sincerely, Michael L. Scudder President and Chief Executive Officer One Pierce Place, Suite 1500 Itasca, Illinois 60143 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS Date and Time: May Place: Westin Chicago Northwest Hotel, 400 Park Boulevard, Itasca, Illinois 60143. Items of Business: w To elect as directors the w To approve and adopt an amendment to the Company’s w To approve and adopt an amendment to the Company’s Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock from 150,000,000 to 250,000,000. w To approve an advisory (non-binding) resolution regarding the compensation paid in w To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, w To transact such other business as may properly come before the Annual Meeting. Record Date: You are entitled to vote at the Proxy Voting: It is important that your shares be represented and voted at the �� By Order of the Board of Directors, Nicholas J. Chulos Executive Vice President, Corporate Secretary and General Counsel April [12], 2017 TABLE OF CONTENTS One Pierce Place, Suite 1500 Itasca, Illinois 60143 PROXY STATEMENT INTRODUCTION AND SUMMARY This Proxy Statement is being furnished in connection with a solicitation of proxies by the Board of Directors of First Midwest Bancorp, Inc., a Delaware corporation, to be used at our Annual Meeting of Stockholders Date and Time: May Place: Westin Chicago Northwest Hotel, 400 Park Boulevard, Itasca, Illinois 60143 Record Date: March Items of Business Board of FOR FOR FOR FOR Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm. FOR Important Notice Regarding the Availability of Proxy Materials A copy of our Annual Report for the year ended December 31, 2016 accompanies this Proxy Statement. The Notice, this Proxy Statement and our Annual Report are available at www.proxyvote.com (if you utilize www.proxyvote.com, you will need the control number included on your Proxy Card). If you would like to receive, Election of Directors The first item of business at the Annual Meeting will be the election of If the proposal to amend the Company’s Certificate of Incorporation to declassify the Board of Directors, which is the second item of business at the Annual Meeting, is approved and adopted, then each nominee standing for election would be elected to a one-year term that expires in 2018. If the proposal to declassify the Board of Directors is not approved, then Ms. Hayley and Mr. Van Arsdell would be elected to the class of directors whose term expires in Director Nominees Age Director Independent Board of Thomas L. Brown 60 2017 Yes FOR Vice President and Chief Financial Officer Phupinder S. Gill 56 2010 Yes FOR Former Chief Executive Officer Kathryn J. Hayley 58 2016 Yes FOR Former Executive Vice President Frank B. Modruson 57 2016 Yes FOR Former Chief Information Officer Ellen A. Rudnick 66 2005 Yes FOR Senior Advisor and Michael J. Small 59 2010 Yes FOR President and Chief Executive Officer Stephen C. Van Arsdell 66 2017 Yes FOR Former Senior Partner and Amendment to Certificate of Incorporation to Declassify the Board of Directors We are Amendment to Certificate of Incorporation to Increase the We are asking our stockholders to approve and adopt an amendment to our Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 to 250,000,000. Executive Compensation We are asking our stockholders to approve, on an advisory (non-binding) basis, a resolution regarding the compensation paid in Independent Registered Public Accounting Firm We are asking our stockholders to ratify, on an advisory (non-binding) basis, the Certain Terms Certain terms that we use in this Proxy Statement have particular meanings. For ease of reference, we have set forth below the meanings of these terms. Term Meaning 401(k) Plan First Midwest Bancorp, Inc. Savings and Profit Sharing Plan, as amended Annual Meeting 2017 Annual Meeting of Stockholders of First Midwest Bancorp, Inc. Board of Directors or Board Board of Directors of First Midwest Bancorp, Inc. By-Laws Amended and Restated By-Laws of First Midwest Bancorp, Inc., as amended Certificate of Incorporation Restated Certificate of Incorporation of First Midwest Bancorp, Inc., as amended Common Stock Common Stock, $0.01 par value, of First Midwest Bancorp, Inc. Company, we, us or our First Midwest Bancorp, Inc. Deferred Compensation Plan First Midwest Bancorp, Inc. Nonqualified Retirement Plan, as amended Exchange Act Securities Exchange Act of 1934, as amended First Midwest Bank or Bank First Midwest Bank, which is a wholly-owned subsidiary of First Midwest Bancorp, Inc. Form 10-K First Midwest Bancorp, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016 Gain Deferral Plan First Midwest Bancorp, Inc. Stock Option Gain Deferral Plan, as amended Internal Revenue Code Internal Revenue Code of 1986, as amended M&A Mergers and acquisitions Named executive officers Executive officers named in the Summary Compensation Table contained in this Proxy Statement Non-Employee Directors Stock Plan First Midwest Bancorp, Inc. Amended and Restated Non-Employee Directors Stock Plan, as amended Notice The Notice of Annual Meeting of Stockholders that accompanies this Proxy Statement Omnibus Stock and Incentive Plan First Midwest Bancorp, Inc. Omnibus Stock and Incentive Plan, as amended Pension Plan First Midwest Bancorp, Inc. Consolidated Pension Plan, as amended Proxy Card The form of proxy card or voting instruction form that accompanies this Proxy Statement Proxy Statement This proxy statement Record Date March 24, 2017 SEC United States Securities and Exchange Commission TSR Total stockholder return QUESTIONS AND ANSWERS You are entitled to vote your shares of Common Stock at the Annual Meeting if you were a stockholder of record of the Company at the close of business on March A proxy is your direction to another person to vote your shares. When you Who is entitled to receive this mailing? If you hold shares of our Common Stock that are registered in your name through our transfer agent, Computershare Trust Company, N.A., as of the Record Date, you are the stockholder of record with respect to those shares. If you hold shares of our Common Stock indirectly through a bank, broker or similar institution, you are considered a beneficial owner of those shares but are not the stockholder of record. We refer to banks, brokers and similar institutions in this Proxy Statement collectively as “brokers.” In this circumstance, you are a stockholder whose shares are held in “street name” and your broker is considered the stockholder of record. We sent copies of our proxy What does it mean if I receive more than one Proxy Card? If you receive multiple Proxy Cards, this means you hold your shares in more than one account. To If you are a stockholder of record on the Record Date and you properly If your shares are held in street name, on routine matters, the shares will be voted by the broker through which you hold your shares The following chart explains which items to be voted upon at our Annual Meeting are routine and non-routine and the treatment of Item Type Effect of Broker Non-Votes and Abstentions Non-Routine Broker non-votes and votes to ABSTAIN are not treated as a “vote cast” with respect to the election of a director, and thus will have no effect on the outcome of the vote. Non-Routine Broker non-votes and votes to ABSTAIN will have the effect of a vote AGAINST this item. Non-Routine Broker non-votes and votes to ABSTAIN will have the effect of a vote AGAINST this item. Non-Routine Broker non-votes will have no effect on the outcome of the vote on this Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm Routine Broker non-votes are not expected to exist because brokers have discretionary authority to vote on this What is the required vote for each item of business to properly come before the Annual Meeting? A quorum is required to transact business at the Annual Meeting. The holders of a majority of the outstanding shares of Common Stock on the Record Date, present in person or represented by proxy and entitled to vote, will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes are treated as present for quorum purposes. ·Item 1—Election of ·Item 2—Approval and Adoption of an Amendment to the Company’s Certificate of Incorporation to Declassify the Board of Directors. You may vote FOR or AGAINST the amendment to our Certificate of Incorporation to declassify the Board of Directors, or you may ABSTAIN. A majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting must be voted FOR the amendment in order for the amendment to be approved and adopted. ·Item 3—Approval and Adoption of an Amendment to the Company’s Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock from 150,000,000 to 250,000,000. You may vote FOR or AGAINST the amendment to our Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 to 250,000,000, or you may ABSTAIN. A majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting must be voted FOR the amendment in order for the amendment to be approved and adopted. ·Item 4—Approval of an Advisory (Non-Binding) Resolution Regarding the Compensation Paid in ·Item If you are a stockholder of record, you may cast your vote in one of four ways: : By Internet.The web address for Internet voting can be found on the Proxy Card. Internet voting is available 24 hours a day. To be valid, your vote by Internet must be received by the deadline specified on the Proxy Card. ( By Telephone.The number for telephone voting can be found on the Proxy Card. Telephone voting is available 24 hours a day. To be valid, your vote by telephone must be received by the deadline specified on the Proxy Card. - By Mail.Request a paper copy of the Proxy Card if you have not received one, and mark the Proxy Card, sign and date it, and return it in the postage pre-paid envelope provided. To be valid, your vote by mail must be received by the deadline specified on the Proxy Card. At the Annual Meeting.You can vote your shares in person at the Annual Meeting. You must present an acceptable form of identification (such as a valid driver’s license) in order to enter the Annual Meeting and vote in person. If you hold your shares in street name, you may vote by following your broker’s instructions or, in order to vote in person at the Annual Meeting, you must obtain from the broker through which you hold your shares, both an account statement showing that you owned shares of Common Stock as of the Record Date and a “legal proxy” form, and bring them to the meeting. How can I revoke You can revoke ·resubmitting your vote via the Internet or by telephone; or ·executing and mailing a Proxy Card that is dated and received on a later date; or ·giving written notice of revocation to our Corporate Secretary at One Pierce Place, Suite 1500, Itasca, Illinois 60143; or ·voting in person at the Annual Meeting. If your shares are held in street name, you should contact your broker to change your vote. How can I obtain an additional Proxy Card? If you lose, misplace or otherwise need to obtain a Proxy Card, and: ·you are a stockholder of record, contact our Corporate Secretary’s office at ·you hold Common Stock in street name through a broker, contact your account representative at that organization. How will current employees who participate in the Company’s benefit plans receive our proxy materials? Employees who participate in the First Midwest Bancorp, Inc. Savings and Profit Sharing Plan, First Midwest Bancorp, Inc. Nonqualified Retirement Plan, First Midwest Bancorp, Inc. Stock Option Gain Deferral Plan and/or the First Midwest Bancorp, Inc. Dividend Reinvestment Plan, and have a Company e-mail address, will receive an e-mail from Broadridge Financial Solutions, Inc. describing how to access proxy materials and vote via the Internet or by telephone. One e-mail will be sent for all accounts registered in the same employee name. If the employee’s accounts are registered in different names, he or she will receive a separate e-mail for each account. This e-mail will be titled: FIRST MIDWEST BANCORP, INC. The trustees under these plans (other than the First Midwest Bancorp, Inc. Dividend Reinvestment Plan) are the stockholders of record of all shares of Common Stock held in the plans, and the trustees will vote the shares held for the account of each employee in accordance with the instructions received from the employee. Employees should instruct the trustees how to vote their shares by using the instructions provided in the e-mail and vote via the Internet or by telephone. If the trustees do not receive voting instructions by the specified deadline, the trustees will vote the shares proportionally in the same manner as those shares for which instructions were received. Because the employees are not the record owners of the related shares, the employees may not vote these shares in person at the Annual Meeting. Individual voting instructions to the plan trustees will be kept confidential and will not be disclosed to any of our directors, officers or employees. Who pays for the expenses of this proxy solicitation? We will pay the expenses of the preparation of proxy materials and the solicitation of proxies for the Annual Meeting. In addition to the solicitation of proxies by mail, solicitations may be made by certain of our directors, officers, What do I need to do to attend the Annual Meeting? All stockholders must bring an acceptable form of identification, such as a valid driver’s license, in order to attend the Annual Meeting in person. If you hold shares in street name and would like to attend our Annual Meeting, you also will need to bring an account statement or other acceptable evidence of ownership of Common Stock as of the close of business on the Record Date. A list of the stockholders of record as of the Record Date will be available for inspection for purposes germane to the Annual Meeting during ordinary business hours at our offices, One Pierce Place, Suite 1500, Itasca, Illinois 60143, from May How do I obtain the Preliminary voting results will be announced at the Annual ITEM 1—ELECTION OF DIRECTORS Our Board of Directors currently consists of Nominees for Election Upon the John F. Chlebowski, Jr. also currently serves in the class of directors whose term expires at the Annual Meeting. As previously announced, Mr. Chlebowski, who has served as one of our directors since 2007, has advised us that he will retire from the Board upon the conclusion of his current term. Prior to the Annual Meeting, the Board will take action to reduce the number of directors to fifteen members. As such, at and following the Annual Meeting, our Board of Directors will consist of fifteen members until such time as the Board may determine to change the number of directors. Depending on the outcome of the vote to declassify our Board, each nominee, if re-elected at the Annual Meeting, will hold office for a Nominee Expiration of Term if Expiration of Term if Thomas L. Brown 2018 Annual Meeting 2020 Annual Meeting Phupinder S. Gill 2018 Annual Meeting 2020 Annual Meeting Kathryn J. Hayley 2018 Annual Meeting 2019 Annual Meeting Frank B. Modruson 2018 Annual Meeting 2020 Annual Meeting Ellen A. Rudnick 2018 Annual Meeting 2020 Annual Meeting Michael J. Small 2018 Annual Meeting 2020 Annual Meeting Stephen C. Van Arsdell 2018 Annual Meeting 2019 Annual Meeting Directors of the Company are elected by a majority of the votes cast at the Annual Meeting. If a director nominee fails to receive the required majority vote for election, director in accordance with our By-Laws and Corporate Governance Guidelines, and the Board of Directors will determine whether it is in the best interests of the Company to accept any tendered resignation. Each nominee has informed us that he or she is willing to serve as a director if elected. Should any nominee become unable or refuse to serve as a director upon election, it is intended that the persons named as proxies Board Composition, Diversity, Tenure and Refreshment Our fifteen continuing directors have significant and diverse operational, financial, risk, leadership and other experience. Over the past two years, two of our directors have announced their retirement and we have added four new directors. Throughout this process, we have enhanced the industry and Company-specific knowledge of our Board of Directors with the fresh perspectives brought by our new directors. We believe the result is an even more active and engaged Board with the skill sets necessary to guide the Company as it grows and as our business strategy and the banking industry around us continue to evolve. The following charts illustrate the varying tenure, diversity, and qualifications and experience of our continuing directors: Key Experience ü CEO or senior executive officer ü Business operations and management ü Corporate governance ü Executive compensation ü Mergers and acquisitions ü Strategic planning and growth ü Risk management ü Regulatory, compliance and legal ü Academia ü Ethics and integrity ü Financial expertise/literacy ü Civic and community engagement ü Other outside board experience ü Global and international experience ü Banking and financial services industry ü Brand management and marketing ü Cyber and information security ü Information technology ü Human resources ü Employee benefits Nomination Process In identifying, evaluating and recommending nominees for the Board of Directors, our Nominating and Corporate Governance Committee places primary emphasis on the criteria set forth in our Corporate Governance Guidelines, which include: ·the individual’s judgment, expertise, character, skills, background, knowledge of matters useful to the oversight of the Company and other relevant experience; ·the individual’s ability and willingness to commit adequate time to Board and committee matters; and ·the extent to which the interplay of the individual’s expertise, skills, knowledge and personality with that of other Board members will build a Board of Directors that is effective, collegial and responsive to the needs of the Company. We do not set specific minimum qualifications that nominees must meet in order to be recommended to the Board of Directors. Each nominee is evaluated based on his or her individual merits, taking into account the needs of the Company and the composition of the Board of Directors. The Nominating and Corporate Governance Committee discusses and evaluates possible candidates in detail, and outside consultants are sometimes engaged to help identify potential candidates. When making recommendations for nominees to the Board, 2017 Nominees and Continuing Directors The evaluation and selection of each member of the Board of Directors is based on a variety of factors, as described above. The Board believes that each of the Company’s directors possesses the requisite skills, experience and attributes to qualify him or her to serve as a member of our Board of Directors. For each of the nominees for election at the Annual Meeting, our Nominating and Corporate Governance Committee and the Board considered, among other factors, the following: ·Phupinder S. Gill – Mr. Gill’s extensive public company board and executive management experience, including his risk and M&A experience. ·Kathryn J. Hayley – Ms. Hayley’s strong information technology and financial services background and extensive strategic planning and business and operations management experience, as well as her human resources and talent management experience, developed as a member of executive management of several global companies and partner ·Ellen A. Rudnick – Ms. Rudnick’s leadership and entrepreneurial experience, as well as her business management experience and service on various public company boards. ·Michael J. Small – Mr. Small’s significant public company and management experience, including his strategic, ·Stephen C. Van Arsdell – Mr. Van Arsdell’s strong accounting, auditing and risk management experience, as well as his Set forth below is the name of each member of the Board, along with his or her principal occupation for at least the previous five years and other professional experience. Nominees Standing for Election at the Annual Meeting Thomas L. Brown Age: 60 Director since: 2017 Independent: ü Since 2011, Mr. Brown has been the Vice President and Chief Financial Officer of RLI Corp., a specialty insurer serving diverse niche property, casualty and surety markets. Previously, he was a partner of PricewaterhouseCoopers LLP, where he served for ten years as its Midwest Regional Financial Services Director and led teams responsible for the banking, insurance, capital markets and investment management business sectors. Mr. Brown is a certified public accountant. Mr. Brown currently serves on the board of directors of Prime Holdings Insurance Services, Inc. (since 2016). He also serves on the boards of directors of the Chicago Shakespeare Theater and Easter Seals Central Illinois, and the board of trustees of Illinois Wesleyan University. The Board intends to appoint Mr. Brown to the Audit Committee and, upon formation, the Enterprise Risk Committee in May 2017. Mr. Brown earned a Bachelor of Science degree in Accounting from Illinois Wesleyan University in 1979. With his extensive finance and accounting background, combined with the insights of a member of the senior management of a public company, Mr. Brown brings valuable finance, accounting, strategic planning, risk and business management skills and experience to our Board of Directors. Phupinder S. Gill Age: 56 Director since: 2010 Independent: ü Mr. Gill served as the Chief Executive Officer of CME Group Inc., a global derivatives marketplace and exchange, from 2012 until his retirement on December 31, 2016. Prior thereto, he served as President from 2007 until 2012, and he previously served as President and Chief Operating Officer of CME Holdings and of CME from 2004 until 2007. From 2000 to 2003, he served as Managing Director and President of CME Clearing. Mr. Gill was also the President of GFX Corp., a wholly owned subsidiary of CME Group that provides liquidity in foreign exchange futures, from 1998 until 2012. Mr. Gill currently serves on the board of directors of The Alexander Maxwell Grant Foundation. From 2012 until his retirement on December 31, 2016, he served on the boards of CME Group and the World Federation of Exchanges. He also previously served on the boards of CME Clearing Europe (CME Group’s UK Clearing House), Bursa Malaysia Derivatives Berhad, Bolsa Mexicana de Valores, S.A.B. de C.V., CME Group Foundation and CME Group Community Foundation. Mr. Gill is a past member of CME Group’s Competitive Markets Advisory Council. Mr. Gill is a member of our Audit Committee. The Board intends to appoint Mr. Gill, upon formation, to the Enterprise Risk Committee in May 2017. Mr. Gill earned a Bachelor of Science degree in Finance in 1985 and a Master of Business Administration with a concentration in Finance in 1987 from Washington State University. Through his board and executive management experience, Mr. Gill brings important public company, technology, leadership, operating and senior management experience to our Board of Directors, as well as experience with M&A and global affairs. He also provides the perspective of a former chief executive officer of a public company. Kathryn J. Hayley Age: 58 Director since: 2016 Independent: ü Ms. Hayley is the Chief Executive Officer of Rosewood Advisory Services, LLC, a business advisory services firm. Previously, she was an Executive Vice President of UnitedHealth Group, Inc., a position in which she served from 2012 to 2015, overseeing a number of strategic initiatives at this global healthcare company. From 2006 to 2012, she served as an Executive Vice President of Aon plc, including as Chief Executive Officer of Aon Consulting Worldwide and Aon Hewitt Consulting Americas. Prior to her service at Aon, Ms. Hayley was an information technology partner at Deloitte Consulting, where she led the financial services practice. She also served on the board of directors of Deloitte & Touche LLP U.S. Ms. Hayley currently serves on the board of directors of Tribridge Holdings, LLC (since 2015) and the advisory board of E.A. Renfroe & Company, Inc. (since 2016). She also serves on the board of the Chicago Shakespeare Theater. The Board of Directors intends to appoint Ms. Hayley to the Audit Committee and the Compensation Committee in May 2017. Ms. Hayley earned a Bachelor of Science degree in Applied Computer Science from Illinois State University in 1979 and a Master of Business Administration, with concentrations in Marketing and Finance, from the Kellogg School of Management at Northwestern University in 1984. Through her extensive information technology and financial services background and her broad executive management experience, as well as her human resources and talent management experience, Ms. Hayley provides our Board with valuable strategic planning and business and operations management experience, as well as the global insights of a former senior executive of multiple international companies. Frank B. Modruson Age: 57 Director since: 2016 Independent: ü Mr. Modruson has served as President of Modruson & Associates, LLC, a management consulting firm, since 2015. Prior thereto, Mr. Modruson spent the majority of his career at Accenture plc, a global professional services company, where he served as a client partner and as Chief Information Officer. He currently serves on the boards of directors of Landauer Corporation (since 2017), a public company specializing in integrated radiation safety products and services, Zebra Technologies Corporation (since 2014), a public company specializing in tracking technology, and Forsythe Technology, Inc. (since 2014). Mr. Modruson also serves on the boards of the Lyric Opera of Chicago and the Glen Ellyn Volunteer Fire Company. The Board of Directors intends to appoint Mr. Modruson to the Audit Committee and, upon formation, the Enterprise Risk Committee in May 2017. Mr. Modruson earned a Bachelor of Science degree in Computer Science from Dickinson College in 1984 and a Master of Science degree in Computer Science from Pennsylvania State University in 1987. With his significant strategy, consulting and technology background, as well as experience on other public company boards, Mr. Modruson brings important strategic and business insights, as well as risk management and technological and operational efficiencies experience to our Board of Directors. Ellen A. Rudnick Age: 66 Director since: 2005 Independent: ü Since 1999, Ms. Rudnick has served at the University of Chicago Booth School of Business. She is currently a Senior Advisor and Adjunct Professor of Entrepreneurship, and she previously served as the Executive Director of the Polsky Center for Entrepreneurship and Innovation. Prior to joining the University of Chicago, Ms. Rudnick served as President and Chief Executive Officer of Healthcare Knowledge Resources, President of HCIA, Chairman of Pacific Biometrics and Corporate Vice President of Baxter Healthcare Corporation. Ms. Rudnick currently serves on the boards of directors of Patterson Companies (since 2003) and HMS Holdings, Corp. (since 1997), both of which are public companies, and Liberty Mutual Insurance Company (since 2001). Ms. Rudnick is a member of our Compensation Committee and Nominating and Corporate Governance Committee. Ms. Rudnick earned a Bachelor of Arts degree in Italian (with a minor in Economics) from Vassar College in 1972 and a Master of Business Administration with a concentration in Finance from the University of Chicago in 1973. She has spent over 30 years in business management and entrepreneurial activities, primarily in the health care and information services industries. She serves in various leadership positions with several civic and nonprofit organizations in the Chicago metropolitan area, including having served on the Northshore University Health System board of directors for over 20 years, and currently is on the boards of directors of Hyde Park Angels, the Chicagoland Entrepreneurship Center (1871) and Matter. She is the recipient of several honors, including the Today’s Chicago Woman 20th Anniversary Hall of Fame Award, the YWCA Leadership Award and the Illinois Venture Capital Industry Richard J. Daley Award. With her extensive business background and her public company board experience, Ms. Rudnick brings important leadership, corporate and entrepreneurial experience to our Board of Directors, as well as valuable experience in business management. Michael J. Small Age: 59 Director since: 2010 Independent: ü Mr. Small is the President and Chief Executive Officer of Gogo, Inc., an airborne communications service provider, and has served in this capacity since 2010. He has also served as a director of Gogo, Inc. since 2010. Prior to joining Gogo, Mr. Small served as the Chief Executive Officer and a Director of Centennial Communications Corp. from 1999 to 2009. From 1995 to 1998, Mr. Small was the Executive Vice President and Chief Financial Officer of 360 Degrees Communications Company. Prior to 1995, he held the position of President of Lynch Corporation, a diversified acquisition-oriented company with operations in telecommunications, manufacturing and transportation services. Mr. Small is a member of our Audit Committee. The Board intends to appoint Mr. Small, upon formation, to the Enterprise Risk Committee in May 2017. Mr. Small earned a Bachelor of Arts degree in History from Colgate University in 1979 and a Master of Business Administration with a concentration in Finance from the University of Chicago in 1981. Through his board, executive and financial experience, Mr. Small brings extensive public company, operating and management experience to our Board of Directors, as well as strategic, financial and M&A experience. He also provides the perspective of a current chief executive officer of a public company. Stephen C. Van Arsdell Age: 66 Director since: 2017 Independent: ü Mr. Van Arsdell is a former senior partner of Deloitte & Touche LLP, where he served as Chairman and Chief Executive Officer from 2010 to 2012, and as Deputy Chief Executive Officer from 2009 to 2010. Prior thereto, he served as Deloitte’s partner-in-charge of its financial services practice in the Midwest. He was a member of Deloitte’s board from 2003 through 2009. Mr. Van Arsdell is a certified public accountant. Mr. Van Arsdell is a member of the Audit Committee of Brown Brothers Harriman & Co. (since 2015). He also is a member of the Dean’s advisory council for the College of Business at the University of Illinois and Vice Chairman of the board of directors of the University of Illinois Alumni Association. Mr. Van Arsdell currently serves on the board of trustees of the Morton Arboretum and previously chaired the board of trustees of the Conservation Foundation. He is a past member of the boards of the Illinois Cancer Council, Kidney Foundation of Illinois and Literacy Volunteers of America-Illinois. The Board intends to appoint Mr. Van Arsdell to the Audit Committee and the Nominating and Corporate Governance Committee in May 2017. Mr. Van Arsdell brings our Board extensive accounting, auditing, risk management and financial experience, together with strategic and leadership skills developed in senior management positions with a global accounting and advisory services organization, as well as significant private banking and wealth management insights. Continuing Directors Serving a Term Expiring in Barbara A. Boigegrain Age: 59 Director since: 2008 Independent: ü Since 1994, Ms. Boigegrain has served as the General Secretary and Chief Executive Officer of Wespath Benefits and Investments (formerly the General Board of Pension and Health Benefits of The United Methodist Church), a pension, health and welfare benefit trustee and administrator that is one of the largest faith-based pension funds in the United States, with $21 billion of assets under management, and a global leader in environmental, social and governance (ESG) investing. Prior to 1994, Ms. Boigegrain spent eleven years as a consultant with Towers Perrin and four years with KPMG LLP and Dart Industries as a manager and analyst. As the CEO and General Secretary of Wespath, Ms. Boigegrain has overseen its restructuring, significantly improved its performance and services and increased its assets under management. In her experience as a benefits consultant, she established the San Diego office of Towers Perrin. Ms. Boigegrain also is a member of the board of directors of Church Benefits Association and Chair of the Church Alliance. Ms. Boigegrain is a member of our Compensation Committee and Nominating and Corporate Governance Committee. Ms. Boigegrain earned a Bachelor of Arts degree in Biology and Psychology from Trinity University in 1979. Through her extensive employee benefits, senior leadership and corporate governance experience, Ms. Boigegrain brings significant leadership, business development, operations and management skills to our Board of Directors. She also provides valuable knowledge of financial markets and strategic growth. Peter J. Henseler Age: 58 Director since: 2011 Independent: ü Mr. Henseler is the founder and President of Wise Consulting Group Inc., a strategy and management consulting firm. He previously held the position of Vice Chairman of TOMY International, a wholly-owned subsidiary of TOMY Company, Ltd., a global designer and marketer of toys and infant products, until his retirement from TOMY International in October 2012. He held the position of President of TOMY International from April 2011 until April 2012. Mr. Henseler was President of RC2 Corporation from 2002 to 2011, at which time TOMY Company acquired RC2. He served as RC2’s Executive Vice President of Sales and Marketing from 1999 to 2002. Mr. Henseler also served as a director of RC2 and TOMY International. Prior to joining RC2, Mr. Henseler held marketing positions at McDonald’s Corporation and Hasbro, Inc. He currently serves as Chairman of the Toy Industry Foundation and previously served on the United States Toy Industry Association Board of Directors. Mr. Henseler is a member of our Compensation Committee and Nominating and Corporate Governance Committee. Mr. Henseler earned a Bachelor of Science degree in Marketing from Xavier University in 1980. Mr. Henseler brings important senior management, operating and leadership skills and insights to our Board of Directors through his experience as a former president of a global public company, as well as his substantial operational, brand management and marketing experience. Patrick J. McDonnell Age: 73 Director since: 2002 Independent: ü Since 2000, Mr. McDonnell has served as the President and Chief Executive Officer of The McDonnell Company LLC, a business consulting company. In this position, he works with public and privately-held companies in a wide variety of industries to help define organizational opportunities to improve performance and achieve results. Previously, he served as a partner and Director of Global Assurance for PricewaterhouseCoopers LLP, an international public accounting firm, and Vice Chairman of Business Assurance for its predecessor, Coopers & Lybrand, LLP. Mr. McDonnell is a certified public accountant. Mr. McDonnell served as a member of the board of directors of Material Sciences Corporation from 2006 to 2014. He also served as President and COO of LAI Worldwide, Inc., an executive recruiting firm, prior to its sale to TMP Worldwide, Inc. in 1999. He is a former Adjunct Professor at the Lake Forest Graduate School of Management, where he taught “Leading Organizational Change.” Mr. McDonnell is a member of our Audit Committee (serving as its Chair) Mr. McDonnell earned a Bachelor of Business Administration degree with a major in Management from the University of Notre Dame in 1965 and a Master of Business Administration from the University of Michigan in 1970. Through his significant finance and accounting background and his broad experience with a variety of public companies, Mr. McDonnell brings valuable tactical skills and experience in business management, strategic planning, finance, accounting and public company matters to our Board of Directors. Robert P. O’Meara Age: 79 Director since: 1982 Independent: ü Mr. O’Meara is currently the Chairman of the Board of the Company. He has over 45 years of experience in the banking and financial services industry. Mr. O’Meara previously served as Chairman of the Board of the Company from 1998 through 2007 and was re-appointed to this position in September 2008. Mr. O’Meara also is a member of the Board of Directors of First Midwest Bank and previously served as Chairman of the Board of the Bank from 2008 through 2011, and Vice Chair from 2011 through 2014. Mr. O’Meara served as the Company’s Chief Executive Officer from 1987 through 2002 and as its Chief Operating Officer from 1983 to 1987. Prior to his tenure with the Company, Mr. O’Meara served as President and Chief Executive Officer of Citizens National Bank of Waukegan from 1970 to 1983. Prior thereto, he was in private law practice in Lake County, Illinois, and he remains a licensed lawyer in the State of Illinois. Mr. O’Meara also has served in various leadership positions with several civic and charitable organizations in the metropolitan Chicago area. Mr. O’Meara serves as a member and the Chair of the Advisory Committee. Mr. O’Meara earned a Bachelor of Science degree in Finance from the University of Notre Dame in 1959 and a Juris Doctor degree from Loyola University of Chicago in 1962. Through his extensive background and experience in banking, management and strategic decision-making, as well as his in-depth knowledge of both the history and the current business of the Company, Mr. O’Meara provides our Board of Directors with significant executive experience and important information about the Company, as well as insight into the markets it serves and the financial services industry generally. Mark G. Sander Age: 58 Director since: 2014 Independent: Insider Mr. Sander is the Senior Executive Vice President and Chief Operating Officer of the Company and the President and Chief Operating Officer of First Midwest Bank. Mr. Sander also serves as a director of First Midwest Bank. Prior to joining the Company in 2011, Mr. Sander served as Executive Vice President, Director of Commercial Banking at Associated Banc-Corp where he oversaw Associated’s commercial banking, treasury management, insurance brokerage and capital markets businesses. He also served as a member of Associated’s Executive and ALCO Committees. Previously, he served as a commercial banking executive at Bank of America and in numerous leadership positions in commercial banking at LaSalle Bank. Mr. Sander has more than thirty years of experience in the financial services industry. Mr. Sander earned a Bachelor of Science degree in Finance from the University of Illinois in 1980 and a Master of Business Administration with a concentration in Finance and International Economics from the University of Chicago in 1983. Mr. Sander brings significant banking industry and executive experience to our Board of Directors. His important leadership position with the Company and First Midwest Bank and his involvement with the operations, vision and strategy of the Company and the Bank provide the Board with an understanding of the Company’s day-to-day operations and strategic goals. Continuing Directors Serving a Term Expiring in Br. James Gaffney, FSC Age: 74 Director since: 1998 Independent: ü Br. James served as the President of Lewis University, a leading Catholic and Lasallian university in Romeoville, Illinois, from 1988 until 2016. He currently serves as President Emeritus. Br. James has served as a director, trustee or board member of more than ten educational, religious, civic, corporate and community organizations and agencies. He currently serves on the board of trustees of St. Mary’s College of California, the board of the International Association of Lasallian Universities and the board (as Vice Chair) of the American Red Cross – Illinois Valley Chapter. He also recently served on the boards of the Federation of Independent Illinois Colleges and Universities, the Community Foundation of Will County and the Will County Center for Economic Development. As a member of the De La Salle Christian Brothers, he chaired the Lasallian Association of College and University Presidents for 28 years. Br. James has been the recipient of numerous honors, including the Pro Ecclesiae et Pontifice Medallion from the Vatican in 2013, the Roger Osman Award for Distinguished Volunteer Service from the United Way of Will County, a Lifetime Achievement Award and an Excellence in Education Award from the Joliet Region Chamber of Commerce and Industry, the De La Salle Award from Bethlehem University, the Provena St. Joseph Medical Center Founder’s Award, a Lifetime Achievement Award from the Village of Romeoville and honorary Doctoral Degrees from Saint Mary’s University of Minnesota, Bethlehem University and the University of St. Francis in Joliet. Br. James is a member of our Nominating and Corporate Governance Committee (serving as its Chair) and Advisory Committee. Br. James obtained a Bachelor of Arts degree in Theology and a Master of Education from Saint Mary’s University of Minnesota, a Master of Theology from Manhattan College in New York and a Doctor of Ministry in Pastoral Theology from the University of Saint Mary of the Lake in Mundelein, Illinois. Br. James’s extensive background in executive administration enables him to bring valuable leadership, institutional management and consensus-building skills to our Board of Directors. His civic and charitable activities in the metropolitan Chicago area also give him unique insight into the markets and communities in which the Company operates. Michael L. Scudder Age: 56 Director Independent: Insider Mr. Scudder is the President and Chief Executive Officer of the Company and Chairman of the Board and Chief Executive Officer of First Midwest Bank. Prior to his current appointment in September 2008, Mr. Scudder served as the Company’s President and Chief Operating Officer beginning in May 2007, and as its Chief Financial Officer from January 2002 to May 2007. He previously served as the Group Executive Vice President and Chief Financial Officer of First Midwest Bank from May 1995 to December 2001. He also has served in various other management capacities in his over 30 years of service to the Company. Mr. Scudder began his professional career at KPMG LLP, an international public accounting firm. Mr. Scudder serves as a member of our Advisory Committee. Mr. Scudder earned a Bachelor of Science degree in Accounting from Illinois Wesleyan University in 1982, and a Master of Business Administration with a concentration in Finance from DePaul University in 1993. He is an active member of the ABA’s American Bankers CEO Council and the Mid-Size Bank Coalition of America. He is also a member of the Silver Cross Hospital board of directors, the Executive Committee of DePaul University’s Center for Financial Services and the Chicago Metropolitan Planning Council’s Executive Advisory Board. Additionally, he is a member of the Economic Club of Chicago and the Bankers Club of Chicago. He previously served as an inaugural member of the Federal Reserve Bank of Chicago’s Community Depository Institution Advisory Council. Mr. Scudder brings extensive executive management, financial and banking experience to our Board of Directors and has important institutional knowledge of the Company and its business and clients. His day-to-day management of the Company provides the Board with Company-specific experience and expertise, including a complete understanding of the Company’s vision, strategy and operations as well as deep financial services industry knowledge. J. Stephen Vanderwoude Age: 73 Director since: 1991 Independent: ü Mr. Vanderwoude earned a Bachelor of Science degree in Engineering from the University of Pennsylvania in 1967 and a Master of Business Administration with concentrations in Economics and Marketing from the University of Chicago in 1977. Mr. Vanderwoude is a member of our Compensation Committee (serving as its Chair), Nominating and Corporate Governance Committee and Advisory Committee. The Board intends to appoint Mr. Vanderwoude, upon formation, to the Enterprise Risk Committee in May 2017. Through his chief executive officer and director experience at other public companies, professional background and considerable business accomplishments and achievements, Mr. Vanderwoude brings valuable skills and experience in leadership, business management, strategic planning, finance, M&A and public company matters to our Board of Directors. www For more information regarding our Board of Directors, its members, its committees and our corporate governance practices, please see the section of this Proxy Statement entitled Corporate Governance at First Midwest or visit the Investor Relations section of our website at www.firstmidwest.com/officersdirectors. The Board of Directors unanimously recommends that stockholders vote FOR the election of each of ITEM 2—APPROVAL AND ADOPTION OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORS Background Our Certificate of Incorporation currently divides our Board of Directors into three classes, with the members of each class serving for staggered three-year terms. As a result, only one class of directors stands for election at each of the Company’s annual meetings of stockholders, such that stockholders vote on and elect approximately one-third of the Board each year. Under Delaware law, directors under a classified board structure may be removed by stockholders only for cause. At this Annual Meeting, we are asking stockholders to approve and adopt a proposal to amend our Certificate of Incorporation to declassify our Board of Directors. If approved, the declassification would be phased-in such that directors, including the nominees standing for election at this Annual Meeting, would be elected for one-year terms as their present terms expire. The amendment would include corresponding changes to allow stockholders to remove directors with or without cause. The Nominating and Corporate Governance Committee considered and then recommended to our Board of Directors the proposed amendment to our Certificate of Incorporation to declassify the Board and corresponding changes. Our Board of Directors accepted this recommendation, determined that the proposed amendment was advisable and unanimously approved and adopted, at a meeting held in February 2017, the amendment, subject to stockholder approval at the Annual Meeting. If stockholders approve and adopt the amendment, it will become effective upon the filing of a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State, which the Company intends to file shortly after the Annual Meeting. The amendment to our Certificate of Incorporation to declassify our Board of Directors is not contingent upon the approval of any other proposal submitted at the Annual Meeting, including Item 3—Approval and Adoption of an Amendment to the Company’s Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock from 150,000,000 to 250,000,000. Text of the Proposed Amendment Paragraph (c) of PART III—GENERAL PROVISIONS of ARTICLE FOURTH of the Certificate of Incorporation would be amended and restated in its entirety to read as follows: ARTICLE FOURTH. Authorized Stock. PART III—GENERAL PROVISIONS (c)Removal of Directors. Any or all directors may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the then outstanding Voting Stock. For purposes of this paragraph (c), each share of the Voting Stock shall have the number of votes granted to it pursuant to this Article Fourth. Paragraphs (c), (d), (e) and (f) of ARTICLE FIFTH of the Certificate of Incorporation would be deleted in their entirety and replaced with new Paragraphs (c), (d) and (e), which would read as follows: ARTICLE FIFTH. Board of Directors. . . . (c)The successors of the directors whose terms expire at the 2017 annual meeting of stockholders shall serve a term of office to expire at the 2018 annual meeting of stockholders. At the 2018 annual meeting of stockholders, the successors of the directors whose terms expire at that meeting shall serve a term of office to expire at the 2019 annual meeting of stockholders. At the 2019 annual meeting of stockholders, and at each annual meeting of stockholders thereafter, the successors of the directors whose terms expire at each such meeting shall serve a term of office expiring at the annual meeting of stockholders next following their election. (d)Each director shall serve until his or her successor is elected and qualified or until his or her death, retirement, resignation or removal. Should a vacancy occur or be created, such vacancy shall be filled by a majority vote of the remaining directors then in office although less than a quorum, or by the sole remaining director. A director elected to fill a vacancy arising through death, retirement, resignation or removal of a director shall hold office until the end of the term to which such director’s predecessor was chosen. A director elected to fill a vacancy created through an increase in the number of directors shall serve a term of office to expire at the next annual meeting of stockholders. (e)Notwithstanding any of the foregoing provisions of this Article Fifth, whenever the holders of any outstanding class or series of Preferred Stock shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation and of the resolution of the Board of Directors providing for the issue of such class or series of Preferred Stock applicable thereto. Paragraphs (g), (h), (i) and (j) of ARTICLE FIFTH of the Certificate of Incorporation would be renumbered as Paragraphs (f), (g), (h) and (i), respectively, with corresponding internal changes to references. Appendix A shows the proposed changes to the relevant sections of ARTICLE FOURTH and ARTICLE FIFTH of the Certificate of Incorporation resulting from the proposed amendments, with deletions indicated by strike-outs and additions indicated by underlining. Reasons for the Proposed Amendment The Nominating and Corporate Governance Committee and our Board of Directors periodically consider the Company’s corporate governance practices and structures. As part of that process, the Board considers corporate trends, peer practices, the views of our institutional stockholders and the guidelines of proxy advisory firms. As such, our Nominating and Corporate Governance Committee and the Board have, from time to time, reviewed our classified board structure, most recently at their meetings held in February 2017. After careful consideration, upon the recommendation of the Nominating and Corporate Governance Committee, our Board of Directors determined that it is appropriate to propose declassifying the Board over a phase-in period, commencing at this Annual Meeting. In making this decision, the Board considered that many public companies have taken action to declassify their boards of directors. The Board of Directors further weighed the merits of both a classified board and an annually-elected board. In conducting its evaluation, the Board considered the advantages of a classified board structure, such as promoting board stability and continuity, providing a greater opportunity to protect the interests of stockholders in the event of an unsolicited takeover offer and reinforcing a commitment to long-term perspectives and value creation for our stockholders. The Board also considered, however, the corporate governance trend towards annual elections of directors, as well as the views of many of the Company’s institutional stockholders that an annually-elected board is preferable, as it enables stockholders to express a view and vote on the entire board of directors each year. Effect of the Proposed Amendment If the proposed amendment to the Certificate of Incorporation to declassify our Board is approved and adopted by our stockholders, our Certificate of Incorporation will be amended as set forth above. Specifically, if the amendment is approved and adopted, our directors would be elected as follows: ·Assuming each is elected at the Annual Meeting, each of Mr. Brown, Mr. Gill, Ms. Hayley, Mr. Modruson, Ms. Rudnick and Messrs. Small and Van Arsdell would be elected to a one-year term expiring at our 2018 annual meeting of stockholders, regardless of the class in which they currently serve. ·Each of Ms. Boigegrain and Messrs. Henseler, McDonnell, O’Meara and Sander would continue to serve as directors in the class whose term ends at our 2018 annual meeting of stockholders. At our 2018 annual meeting of stockholders, these individuals and the directors elected at this Annual Meeting or their successors (but not those directors serving in the class whose term ends at the 2019 annual meeting) would be nominated to serve a new one-year term. ·Each of Br. James and Messrs. Scudder and Vanderwoude would continue to serve as directors in the class whose term ends at our 2019 annual meeting of stockholders. At our 2019 annual meeting of stockholders and at each annual meeting thereafter, all directors would be elected to serve one-year terms. In all cases, each director will serve until his or her successor is elected and qualified or until his or her death, retirement, resignation or removal. Accordingly, if the amendment is approved and adopted, approximately 80% of our Board will stand for election at the 2018 annual meeting of stockholders, and the Board will be completely declassified and all directors will be elected annually beginning with the 2019 annual meeting of stockholders. Under Delaware law, unless otherwise provided in a company’s certificate of incorporation, directors serving on a classified board may only be removed by stockholders for cause, while directors serving on a non-classified board may be removed by stockholders with or without cause. Our Certificate of Incorporation currently provides that directors may only be removed by stockholders for cause upon the vote of at least 67% of all outstanding shares. As a result, approval of the proposed amendment to declassify the Board will also result in an amendment to the Certificate of Incorporation to give our stockholders the ability to remove directors with or without cause upon the vote of at least a majority of all outstanding shares. No amendments to our By-Laws are expected to be required in connection with the amendment of our Certificate of Incorporation to declassify the Board. Impact if the Amendment is not Adopted If the proposed amendment to the Certificate of Incorporation to declassify our Board is not approved and adopted by our stockholders, our Certificate of Incorporation will not be amended as set forth above and our Board of Directors will continue to be classified with directors serving staggered terms. In this event, the nominees standing for election at this Annual Meeting would be placed in classes and elected for the terms described under Item 1—Election of Directors—Nominees for Election. Thereafter, directors would continue to serve in classes for staggered three-year terms, and stockholders would be able to remove directors only for cause upon the vote of at least 67% of all outstanding shares. Required Vote Our Board of Directors unanimously approved and adopted the amendment to declassify the Board. Accordingly, the affirmative vote of a majority of outstanding shares of Common Stock entitled to vote at the Annual Meeting is required for stockholders to approve and adopt the proposed amendment to our Certificate of Incorporation. Directors’ Recommendation The Board of Directors unanimously recommends that stockholders vote “FOR” approval and adoption of the amendment to the Certificate of Incorporation to declassify the Board of Directors. ITEM 3—APPROVAL AND ADOPTION OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 150,000,000 TO 250,000,000 Background Our Certificate of Incorporation currently authorizes 1,000,000 shares of preferred stock and 150,000,000 shares of Common Stock. At the Annual Meeting, we are asking stockholders to approve and adopt a proposal to amend our Certificate of Incorporation to increase by 100,000,000 the number of shares of Common Stock that the Company is authorized to issue from 150,000,000 to 250,000,000 shares. We are not proposing to make any changes to our authorized shares of preferred stock. The Nominating and Corporate Governance Committee considered and then recommended to our Board of Directors the amendment to our Certificate of Incorporation to increase our authorized shares of Common Stock to 250,000,000 shares. Our Board of Directors accepted this recommendation, determined that the proposed amendment was advisable and unanimously approved and adopted, at a meeting held in February 2017, the amendment, subject to stockholder approval at the Annual Meeting. If stockholders approve and adopt the amendment, it will become effective upon the filing of a Certificate of Amendment to our Certificate of Incorporation with the Delaware Secretary of State, which the Company intends to file shortly after the Annual Meeting. The amendment to our Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 to 250,000,000 is not contingent upon approval of any other proposal submitted at the Annual Meeting, including Item 2—Approval and Adoption of an Amendment to the Company’s Certificate of Incorporation to Declassify the Board of Directors. Text of the Proposed Amendment The first paragraph of ARTICLE FOURTH of the Certificate of Incorporation would be amended and restated in its entirety to read as follows: ARTICLE FOURTH. Authorized Stock. The total number of shares of stock which the Corporation shall have authority to issue is Two Hundred Fifty One Million (251,000,000) shares, of which One Million (1,000,000) shares shall be shares of Preferred Stock without par value (hereinafter sometimes referred to as “Preferred Stock”), and Two Hundred Fifty Million (250,000,000) shares shall be shares of Common Stock, $0.01 par value per share (hereinafter sometimes referred to as “Common Stock”). Appendix B shows the proposed changes to the relevant sections of ARTICLE FOURTH of the Certificate of Incorporation resulting from the proposed amendments, with deletions indicated by strike-outs and additions indicated by underlining. Reasons for the Proposed Amendment Our Certificate of Incorporation currently authorizes up to 150,000,000 shares of Common Stock, and approximately 102.4 million shares are presently issued and outstanding. An additional 2.9 million shares of Common Stock may become outstanding by virtue of existing or future equity awards under our Omnibus Stock and Incentive Plan and our Non-Employee Directors Stock Plan. In addition, in the past several years the Company has grown significantly through acquisitions and, since 2014, we have issued approximately 26.4 million shares of Common Stock in M&A transactions. We may in the future make additional acquisitions and may use Common Stock as consideration. The Board of Directors believes it is in the best interests of the Company and its stockholders to increase the number of authorized shares of Common Stock to provide the Company with flexibility to consider and plan for future general corporate needs, including, but not limited to, capital raising, financing transactions, potential M&A transactions, stock splits, stock dividends or other general corporate purposes. The additional authorized shares of Common Stock would enable the Company to pursue strategic, financial, M&A or capital opportunities as they may be presented and to take timely advantage of market conditions as they may arise, without the delay and expense associated with calling and convening a special meeting of stockholders to authorize or issue additional shares, unless required by Delaware law or the rules of the NASDAQ Stock Market. The Board of Directors and management believe that these opportunities can develop relatively quickly, which would require us to be in a position to take advantage of them in a timely manner. Although the Company has no plan, commitment or agreement as of the date hereof to issue additional shares of Common Stock resulting from the proposed increase in authorized shares, the Company regularly looks at and considers the desirability of issuing Common Stock in financing transactions and acquisitions. Effect of the Proposed Amendment If the proposed amendment to the Certificate of Incorporation is approved and adopted by our stockholders, approximately 147.6 million shares of Common Stock would then be authorized and available for future issuance. The additional authorized shares would be available for issuance from time-to-time by the Board of Directors for any proper general corporate purpose, including those described above, without further stockholder approval, other than as may be required by Delaware law or the rules of the NASDAQ Stock Market. The additional shares of Common Stock for which we are seeking stockholder approval would be part of the existing class of our Common Stock and, if and when issued, would have the same rights and privileges as, and be identical in all respects (including voting, dividend, distribution and liquidation rights) to, shares of Common Stock currently outstanding. The proposed additional authorized shares of Common Stock will not affect any of the rights of the shares of Common Stock currently outstanding. Under Delaware law and our Certificate of Incorporation, holders of our Common Stock are not entitled to preemptive rights to purchase shares of Common Stock that the Company may issue in the future. The ability of the Board of Directors to issue additional shares of Common Stock may, under certain circumstances, be deemed to have an anti-takeover effect. The Company could use the additional authorized shares of Common Stock to make it more difficult or to discourage efforts to obtain control of the Company. However, the amendment to our Certificate of Incorporation is not being proposed in order to prevent a change-in-control, nor is the amendment in response to any attempt, or contemplated attempt, to acquire control of the Company or to gain representation on our Board of Directors. As is true for our shares presently authorized but not issued, future issuances of the additional shares of Common Stock contemplated by the proposed amendment also could have a dilutive effect on earnings per share, book value per share, voting power and percentage ownership interest of current stockholders. The Board of Directors intends to use the additional shares of Common Stock only for purposes and on terms that it deems to be in the best interests of the Company and its stockholders. Impact if the Amendment is not Adopted If the proposed amendment to our Certificate of Incorporation is not approved and adopted by our stockholders and we are unable to increase our number of authorized shares of Common Stock, the Company will be limited in the number of shares of Common Stock available for issuance to a total of 150,000,000 shares issued and outstanding. This could impact the Company’s ability to issue Common Stock for capital raising, financing transactions, M&A transactions and other corporate purposes as the Company may not have a sufficient number of shares of Common Stock available to issue for these needs. As such, the Company may be limited in its ability to take full advantage of strategic, financial, M&A or capital opportunities or favorable market conditions should these exist. Required Vote Our Board of Directors unanimously approved and adopted the amendment to increase the number of authorized shares of Common Stock. Accordingly, the majority of outstanding shares of Common Stock entitled to vote at the Annual Meeting is required for stockholders to approve and adopt the proposed amendment to our Certificate of Incorporation. Directors’ Recommendation The Board of Directors unanimously recommends that stockholders vote “FOR” approval and adoption of the amendment to the Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 to 250,000,000 shares. ITEM 4—APPROVAL OF AN ADVISORY (NON-BINDING) RESOLUTION REGARDING THE COMPENSATION PAID IN In accordance with applicable SEC rules, we are required to provide stockholders with an opportunity to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement. We refer to this proposal as the “say-on-pay” proposal. Our executive compensation programs, including detailed information regarding the compensation paid to our named executive officers for Our Board of Directors views it as a good corporate governance practice to present the say-on-pay proposal to our stockholders annually. The Board made this recommendation to our stockholders at our 2012 annual meeting, and our stockholders overwhelmingly voted in favor of holding a say-on-pay vote every year, as opposed to every other year or every third year. Our stockholders will next have the opportunity to indicate their preference for the frequency of the say-on-pay vote at our 2018 annual meeting. At our We are asking our stockholders to indicate their support for our executive compensation program as described in this Proxy Statement. This proposal gives our stockholders the opportunity to express their views on executive compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers described in this Proxy Statement. Accordingly, we will ask our stockholders to vote on the following resolution at the Annual Meeting: RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the executive compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related narrative discussion set forth in the The say-on-pay vote is advisory and is therefore not binding on the Company, the Compensation Committee or our Board of Directors. We value the opinions of our stockholders, and the Compensation Committee will consider the results of the vote on our say-on-pay proposal when establishing the design of and amounts paid under our future executive compensation programs. Directors’ Recommendation The Board of Directors unanimously recommends that stockholders vote FOR approval of the advisory (non-binding) resolution regarding the compensation paid to the Company’s named executive officers set forth in this Proxy Statement. ITEM The Audit Committee of the Board of Directors is responsible for appointing the Company’s independent registered public accounting firm, and the Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, Although we are not required to have our stockholders ratify the selection of our independent registered public accounting firm, our Board of Directors has determined to seek this ratification from stockholders. Fees Paid to Independent Registered Public Accounting Firm The Audit Committee, or a designated member of the Audit Committee, approves in advance all audit and any non-audit services rendered by Ernst & Young LLP on behalf of the Company. The following table shows information about fees paid by the Company to Ernst & Young LLP for services related to the fiscal years indicated below. 2016 Percent of 2015 Percent of Audit fees(1) $ 1,593,904 100% $ 1,377,269 100% Audit-related fees(2) 145,450 100% 96,472 100% Tax fees(3) 166,940 100% 106,720 100% Total fees $ 1,906,294 $ 1,580,461 (1)Includes fees and expenses for the audit of the Company’s annual financial statements, internal control over financial reporting and review of financial statements included in the Company’s quarterly reports filed with the SEC, as well as other services normally provided by an independent auditor in connection with statutory and regulatory filings or engagements. (2)Includes fees related to the audits of the Company’s benefit plans and fees related to the sale-leaseback transaction completed during 2016. (3)Includes fees related to assistance with routine audits and tax planning, consulting and compliance services. For audit, audit-related services, tax-related services and all other services, our Audit Committee has determined specific services and dollar thresholds under which such services would be considered pre-approved. To the extent management requests services other than these pre-approved services, or beyond the dollar thresholds, our Audit Committee must specifically approve the services. Further, under our fee policy, our independent registered public accounting firm may not perform the non-audit services identified by the SEC as prohibited. Our fee policy requires management to provide to our Audit Committee on a quarterly basis a summary of all services performed by the independent registered public accounting firm. Directors’ Recommendation The Board of Directors unanimously recommends that stockholders vote FOR ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, CORPORATE GOVERNANCE AT FIRST MIDWEST Our Board of Directors is committed to maintaining strong corporate governance principles and practices. If you would like additional information about our corporate governance practices, you may view the following documents on our website at www.firstmidwest.com/corporategovernance or request them in print by sending a written request to the Corporate Secretary at First Midwest Bancorp, Inc., One Pierce Place, Suite 1500, Itasca, Illinois 60143: ·Corporate Governance Guidelines; ·Code of Ethics and Standards of Conduct (applicable to all directors, officers and employees); ·Code of Ethics for Senior Financial Officers; ·Audit Committee Charter; ·Compensation Committee Charter; ·Nominating and Corporate Governance Committee Charter; and ·Related Person Transaction Policies and Procedures. Corporate Governance Guidelines and Committee Charters The Corporate Governance Guidelines and the charters of the Audit, Compensation and Nominating and Corporate Governance Committees of our Board of Directors describe our corporate governance practices. The Corporate Governance Guidelines and charters are intended to ensure that our Board of Directors has certain practices in place relating to oversight of management and various components of our business operations and to make decisions that are independent of management. Code of Ethics and Standards of Conduct We have adopted a Code of Ethics and Standards of Conduct, which applies to all of our directors, officers and employees, as well as a Code of Ethics for Senior Financial Officers, which applies to our senior financial officers. Our Code of Ethics and Standards of Conduct meets the requirements of a “code of ethics” as defined by applicable SEC rules, and also meets the requirements of a “code of conduct” under the applicable rules of the NASDAQ Stock Our Board of Directors determines the independence of all non-employee directors in accordance with the independence requirements of the NASDAQ Stock Market rules. Accordingly, each year the Board affirmatively determines whether each non-employee director has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Annually, each non-employee director is required to complete a questionnaire that provides information about relationships that might affect the determination of independence. Management then provides the Nominating and Corporate Governance Committee and Board of Directors with relevant facts and circumstances of any relationship bearing on the independence of a director or nominee that is outside the categories permitted under the rules of the NASDAQ Stock Market. Based on the review and recommendation by the Nominating and Corporate Governance Committee, the Board of Directors analyzed the independence of each of the Company’s nominees and other current directors, and determined that all of our directors meet the standards of independence under our Corporate Governance Guidelines and the NASDAQ Stock Market rules, other than Michael L. Scudder, the Company’s President and Chief Executive Officer, and Mark G. Sander, the Company’s Senior Executive Vice President and Chief Operating Officer, who are not considered to be independent under the standards of our Corporate Governance Guidelines and the rules of the NASDAQ Stock Market because they are employees. In addition, our Board of Directors determined that: ·Each member of the Audit Committee is financially literate and has accounting or related financial management expertise (as such qualifications are defined under the rules of the NASDAQ Stock Market). ·Patrick J. McDonnell and John F. Chlebowski, Jr. are “audit committee financial experts” within the meaning of the rules and regulations of the SEC, and that both Thomas L. Brown and Stephen C. Van Arsdell also would qualify as audit committee financial experts. ·Each member of the Compensation Committee is a “non-employee director” within the meaning of SEC Rule 16b-3, and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code. Board Leadership and Structure As provided in The position of Chairman of the Board is held by Robert P. O’Meara and the position of President and Chief Executive Officer is held by Michael L. Scudder. The Board of Directors believes that, at this time, the separation of Risk Oversight Risk is inherent with every business and we face a number of risks, including, for example, credit, Management is responsible for the day-to-day management of the risks the Company faces. It establishes and maintains risk management processes and policies designed to balance our operations and business opportunities with risk mitigation in order to create stockholder value. It is management’s responsibility to anticipate, identify and communicate risks to the Board of Directors and its committees. The Company also has a Chief Risk Officer. The Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes, policies and levels designed and implemented by management are appropriate and functioning as designed. The Board performs its risk oversight function primarily through its committees and the operation of the Bank’s Specifically, each committee assists the Board in fulfilling its risk management oversight responsibilities in the following areas: ·Audit Committee. Assists the Board with risk oversight in the areas of financial reporting, internal controls, tax and compliance with public reporting requirements. ·Compensation Committee. Assists the Board with risk oversight associated with our compensation policies and programs, including maintaining an executive compensation program that is designed to encourage the achievement of corporate objectives and strategies, enhance stockholder value and incent and retain our executive officers, and discourage unnecessary or excessive risk taking. ·Nominating and Corporate Governance Committee. Assists the Board with risk oversight associated with corporate governance and director selection and succession. ·Enterprise Risk Committee (in formation). The Board of Directors intends to establish an Enterprise Risk Committee in May 2017. This committee will oversee certain enterprise risks and will be comprised entirely of independent directors. Each committee reports to the full Board of Directors at regular meetings concerning the activities of the committee, the significant matters it has discussed and the actions taken by the committee. The Board also receives reports directly from the President and Chief Executive Officer, the Chief Risk Officer and other members of management regarding the Company’s risk management functions. In addition, the Chairman of the Board meets regularly with the President and Chief Executive Officer to discuss strategy and risks facing the Company. Key members of senior management attend Board meetings and are available to address any questions or concerns raised by the Board of Directors. Our Board of Directors holds We expect our directors to attend all Board and committee meetings for those committees on which they serve. Directors are also expected to attend each annual meeting of stockholders. Board Committees Our Board of Directors has three standing committees, our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Each standing committee has a written charter and the Board of Directors has determined that each of the members of our standing committees is “independent” under the provisions of our Corporate Governance Guidelines and the rules of the NASDAQ Stock Under our Corporate Governance Guidelines, the members of each Board committee (including each committee chair) are appointed by the Board of Directors upon the recommendation of the Nominating and Corporate Governance Committee, and a member may only serve as the chair of one committee of the Board at any given time. The table below provides membership and meeting information for each Board committee for the Name Audit Compensation Nominating and Advisory Enterprise Barbara A. Boigegrain ü ü Thomas L. Brown(2) ü ü John F. Chlebowski, Jr.(3) ü Br. James Gaffney ü* ü Phupinder S. Gill ü ü Kathryn J. Hayley(4) ü ü Peter J. Henseler ü ü Patrick J. McDonnell ü* ü ü Frank B. Modruson(4) ü ü Robert P. O’Meara ü* Ellen A. Rudnick ü ü Mark G. Sander Michael L. Scudder ü Michael J. Small ü ü Stephen C. Van Arsdell(2) ü ü J. Stephen Vanderwoude ü* ü ü ü Total committee meetings in 2016 8 5 6 2 N/A *Designates Chair of this committee. (1)The Board intends to establish an Enterprise Risk Committee in May 2017 with Messrs. Brown, Gill, McDonnell, Modruson, Small and Vanderwoude as the members of this committee. (2)Messrs. Brown and Van Arsdell joined our Board of Directors in February 2017. The Board intends to appoint, in May 2017, Mr. Brown to the Audit Committee and, upon formation, the Enterprise Risk Committee, and Mr. Van Arsdell to the Audit Committee and the Nominating and Corporate Governance Committee. (3)Mr. Chlebowski’s term as a director will expire at the Annual Meeting on May 17, 2017 and he will not stand for re-election. (4)Ms. Hayley and Mr. Modruson joined our Board of Directors in August 2016. The Board intends to appoint, in May 2017, Ms. Hayley to the Audit Committee and the Compensation Committee, and Mr. Modruson to the Audit Committee and, upon formation, the Enterprise Risk Committee. Below is a brief description of each standing committee of our Board of Directors, as well as our Advisory Committee. Each standing committee has the authority to engage, at the Company’s expense, legal counsel or other advisors or consultants as it deems appropriate to carry out its responsibilities. The charter of each standing committee describes the specific responsibilities and functions of such committee. You may view a current copy of each charter by visiting our website at www.firstmidwest.com/corporategovernance. Audit Committee. The responsibilities of the Audit Committee include, among others: ·Retention and termination of our independent registered public accounting firm and pre-approval of all services performed by this firm. ·Oversight of the external reporting process and the adequacy of the Company’s internal controls. ·Oversight of the scope of the audit activities of the independent registered public accounting firm and the Company’s internal auditors. ·Oversight of the process for determining the independence of the independent registered public accounting firm. ·Oversight of the procedures for the receipt, retention and resolution of complaints regarding accounting, internal controls or auditing matters. Compensation Committee.Our Compensation Committee reviews and evaluates our general compensation philosophy and oversees the development, implementation and any revisions to our compensation policies and programs. The responsibilities of the Compensation Committee include, among others: ·Reviewing and approving the Company’s general compensation philosophy. ·Oversight of the development and implementation of our compensation policies and programs. ·Reviewing and monitoring the Company’s incentive and other compensation programs. ·Recommending to our Board of Directors goals and objectives relating to the compensation of our Chief Executive Officer. ·Assisting our Board of Directors in evaluating our Chief Executive Officer and recommending to our Board the Chief Executive Officer’s compensation. ·Reviewing and recommending to our Board of Directors the annual compensation of senior management. ·Administering our Omnibus Stock and Incentive Plan and Non-Employee Directors Stock Plan. ·Oversight of the Company’s health and welfare programs. ·Oversight of the Company’s retirement plans. ·Conducting an annual risk assessment of the Company’s compensation programs. ·Retaining an independent compensation consultant to provide advice to the Compensation Committee relative to compensation matters. Nominating and Corporate Governance Committee.The responsibilities of the Nominating and Corporate Governance Committee include, among others: ·Recommending to the Board of Directors the director nominees for election at any meeting of stockholders at which directors are elected. ·Identifying, interviewing and recruiting individuals ·Overseeing matters of corporate governance, including reviewing the Company’s Corporate Governance Guidelines and Code of Ethics and Standards of Conduct. ·Advising the Board of Directors on Board and committee organization, membership, function, performance and effectiveness. ·Reviewing director independence standards and qualifications and making recommendations to the Board of Directors with respect to the determination of the independence and qualifications of directors. ·Reviewing related person transactions, if and when they arise. ·Overseeing the annual self-evaluation process of the Board of Directors and each of its committees. ·Reviewing stockholder proposals and considering responses or actions regarding such proposals. Advisory Committee. The primary responsibility of the Advisory Committee is to advise and consult with management with respect to general business matters as needed between regular meetings of the Board of Directors. Board and Committee Self-Evaluations The Board and the Audit, Compensation and Nominating and Corporate Governance Committees conduct an annual self-evaluation, which includes both a qualitative and quantitative assessment by each director of the performance of the Board and the committees on which the director sits. The Nominating and Corporate Governance Committee oversees these evaluations. As part of this process, each director completes an annual self-evaluation of the Board and the committees on which the director sits and has a one-on-one meeting with the Chair of the Nominating and Corporate Governance Committee. The results of the self-evaluations are reported to the Board of Directors. Related Person Transactions We maintain a written policy for reviewing, approving and monitoring transactions involving the Company and related persons (generally, directors and executive officers or their immediate family members, or stockholders owning 5% or more of our Common Stock). Our Nominating and Corporate Governance Committee is responsible for reviewing and approving (or ratifying) all transactions with related persons. The Nominating and Corporate Governance Committee will take into account all relevant factors in its analysis, including whether the transaction is on terms comparable to those available to third parties. The Nominating and Corporate Governance Committee will also determine whether any transaction with a related person impairs the independence of a director, or presents a conflict of interest on the part of a director or executive officer. The Chair of the Nominating and Corporate Governance Committee may pre-approve or ratify any transaction with a related person involving an amount up to $500,000. The policy also provides that transactions involving competitive bids, the rendering of services by a regulated entity and certain ordinary course banking transactions, including loans made by First Midwest Bank, will be deemed to be pre-approved by the Nominating and Corporate Governance Committee. During Compensation Committee Interlocks and Insider Participation No member of our Compensation Committee has served as one of our executive officers or employees. None of our executive officers serves as a member of the board of directors or compensation committee of any other company that has an executive officer serving on our Board of Directors or our Compensation Committee. Stockholder Communication with Directors Stockholders may contact the Chairman of the Board, an individual director, the entire Board of Directors, our independent directors as a group or a specific Board committee Communications regarding accounting or auditing matters should be reported in writing to the Board’s Audit Committee Chair or the Company’s INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL The following table sets forth, as of March We calculated the percent of class based on Beneficial Owner Number of Percent of Directors Barbara A. Boigegrain 30,291 * Thomas L. Brown(5) — * John F. Chlebowski, Jr. 27,979 * Br. James Gaffney(6) 3,838 * Phupinder S. Gill 40,999 * Kathryn J. Hayley 16,000 * Peter J. Henseler 20,097 * Patrick J. McDonnell 35,893 * Frank B. Modruson 1,151 * Robert P. O’Meara 392,203 * Ellen A. Rudnick 32,393 * Mark G. Sander 208,543 * Michael L. Scudder 335,016 * Michael J. Small 25,389 * Stephen C. Van Arsdell 14,000 * J. Stephen Vanderwoude 78,535 * Named Executive Officers (other than Messrs. Sander and Scudder) Paul F. Clemens 85,849 * Thomas M. Prame 43,500 * Nicholas J. Chulos 41,214 * All directors and executive officers (including named executive officers) as a group (28 persons)(7) 1,720,454 1.68% *Less than 1%. (1)Includes the following shares of Common Stock subject to options exercisable within 60 days after March (3)Includes the following shares of Common Stock held through the Company’s 401(k) Plan: Michael L. Scudder, 8,427 shares; Mark G. Sander, 359 shares; Paul F. Clemens, 1,139 shares; Thomas M. Prame, 82 shares; and Nicholas J. Chulos, 4,860 shares. (4)Includes the following shares of restricted stock subject to future vesting conditions for which the individual has voting but not dispositive power: Michael L. Scudder, 70,256 shares; Mark G. Sander, 52,062 shares; Thomas M. Prame, 19,612 shares; and Nicholas J. Chulos, 23,348 shares. For Paul F. Clemens, excludes 20,867 restricted stock units that would not vest within 60 days after March 24, 2017 under the terms of the applicable award agreements. (5)Mr. Brown was appointed to the Board of Directors in February 2017 and has not yet acquired any shares of Common Stock. He has elected to receive all of his director compensation in shares of Common Stock and intends to comply with the Company’s stock ownership guidelines in less than the five-year acquisition period specified in the guidelines. (6)Includes 98 shares of Common Stock owned by Lewis University to which Br. James Gaffney disclaims beneficial ownership. (7)Includes: 136,548 shares of Common Stock subject to options exercisable within 60 days after March 24, 2017; 58,918 shares of Common Stock payable to certain directors and executive officers pursuant to our deferred compensation plans; 25,118 shares of Common Stock held in our 401(k) Plan for the accounts of certain executive officers; and 316,777 shares of restricted stock. Excludes: 34,158 restricted stock units and 41,651 earned performance shares that would not vest within 60 days after March 24, 2017 under the terms of the applicable award agreements. Other Security Ownership The following table identifies each person known to us as of March Name and Address of Beneficial Owner Number of Shares Percent of Class BlackRock, Inc.(1) 9,365,981 11.5% 55 East 52nd Street New York, NY 10055 The Vanguard Group(2) 6,882,836 8.5% 100 Vanguard Boulevard Malvern, PA 19355 Dimensional Fund Advisors LP(3) 6,829,752 8.4% Building One 6300 Bee Cave Road Austin, TX 78746 Wellington Management Group LLP(4) 4,742,504 5.8% c/o Wellington Management Company LLP 280 Congress Street (1)This information is based solely on a Schedule 13G/A filed with the SEC on January 12, 2017 by BlackRock, Inc., which reported sole voting power as to 9,130,543 shares and sole dispositive power as to 9,365,981 shares as of December 31, 2016. (2)This information is based solely on a Schedule 13G/A filed with the SEC on February 10, 2017 by The Vanguard Group, which reported sole voting power as to 96,285 shares, shared voting power as to 7,138 shares, sole dispositive power as to 6,783,518 shares and shared dispositive power as to 99,318 shares as of December 31, 2016. (3)This information is based solely on a Schedule 13G/A filed with the SEC on February 9, 2017 by Dimensional Fund Advisors LP, which reported sole voting power as to 6,600,241 shares and sole dispositive power as to 6,829,752 shares as of December 31, 2016. Dimensional Fund Advisors LP and its subsidiaries disclaim beneficial ownership of all securities reported on the Schedule 13G/A. (4)This information is based solely on a Schedule 13G/A filed with the SEC on February 9, 2017 by Wellington Management Group LLP (“WMG”) on behalf of DIRECTOR COMPENSATION We use a combination of cash and equity-based compensation set at levels we believe will allow us to attract and retain qualified individuals to serve on our Board of Directors. Each year, the Compensation Committee reviews, with the assistance of our independent compensation consultant, and makes a recommendation to our Board of Directors regarding the compensation that we pay to our directors, including the annual retainers paid to our Chairman of the Board and our Board committee chairs. In setting director compensation, we consider the significant amount of time that directors devote to fulfilling their duties, advice that we receive from our compensation consultant and comparative data regarding director compensation of our peers. Michael L. Scudder, our President and Chief Executive Officer, and Mark G. Sander, our Senior Executive Vice President and Chief Operating Officer, do not receive compensation for serving as a member of the Board. In addition, Br. James Gaffney has elected not to receive any director compensation. The following table summarizes our annual compensation for non-employee directors for 2016: Component Amount An annual fixed cash retainer for each non-employee director $ 50,000 An annual award of Common Stock for each non-employee director(1) $ 50,000 An annual fixed cash retainer for the Board Chair $ 150,000 An annual fixed cash retainer for the Audit Committee Chair $ 15,000 An annual fixed cash retainer for the Compensation Committee and Nominating and Corporate Governance Committee Chairs $ 10,000 An annual fixed cash retainer for each member of the Audit Committee (excluding the Audit Committee Chair) $ 4,000 (1)A director may elect to receive the Each director’s annual cash retainer is paid in equal quarterly installments in arrears. Payment of each retainer installment is contingent upon the director’s service during the preceding quarter. We do not pay separate fees for attendance at Board or Board committee meetings. We also reimburse our directors for their reasonable Board and committee attendance-related expenses. Barbara A. Boigegrain, Deferred Compensation Plan for Non-Employee Directors Our Deferred Compensation Plan allows non-employee directors to defer receipt of either 50% or 100% of their director fees and retainers. Deferral elections are made in December of each year for amounts Directors are able to modify their investment elections at any time. Deferred director fees and retainers are payable at the director’s election, either as a lump sum or in installments over a period not to exceed fifteen years. Payments under the Deferred Compensation Plan begin at the date specified by the director or upon cessation of service as a director. 2016 Director Compensation Table The following table and explanatory notes provide information regarding the cash and Common Stock awarded to each non-employee director during 2016. Name Fees Stock Option Non-Equity Change in All Other Total Barbara A. Boigegrain $ 50,000 $ 50,000 $ — $ — $ — $ — $ 100,000 Thomas L. Brown(6) — — — — — — — John F. Chlebowski, Jr. 104,000 — — — — — 104,000 Br. James Gaffney(7) — — — — — — — Phupinder S. Gill 54,000 50,000 — — 6,436 — 110,436 Kathryn J. Hayley(8) 50,000 — — — — — 50,000 Peter J. Henseler 50,000 50,000 — — 6,768 — 106,768 Patrick J. McDonnell 65,000 50,000 — — — — 115,000 Frank B. Modruson(8) 25,000 25,000 — — — — 50,000 Robert P. O’Meara(9) 300,000 — — — 67,207 10,542 377,749 Ellen A. Rudnick 50,000 50,000 — — — 2,500 102,500 Michael J. Small 54,000 50,000 — — — — 104,000 John L. Sterling(10) 50,000 — — — — — 50,000 Stephen C. Van Arsdell(6) — — — — — — — J. Stephen Vanderwoude 110,000 — — — 7,042 — 117,042 (1)Includes amounts deferred at the election of the directors pursuant to our Deferred Compensation Plan. (2)Amounts represent the aggregate grant-date fair value of Common Stock awards granted under our Non-Employee Directors Stock Plan during the period, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). Assumptions used in the calculation of these amounts are described in Note 17 to our audited financial statements included in our Form 10-K. The aggregate number of shares of Common Stock granted by the Company to each non-employee director during 2016 was 2,494 shares to each of Barbara A. Boigegrain, Phupinder S. Gill, Peter J. Henseler, Patrick J. McDonnell, Ellen A. Rudnick and Michael J. Small, and 1,149 shares to Frank B. Modruson. (3)The aggregate number of unexercised stock options outstanding as of December 31, 2016 issued to non-employee directors was as follows: John F. Chlebowski, Jr., 6,586; Br. James Gaffney, 3,740; Patrick J. McDonnell, 3,740; Robert P. O’Meara, 3,740; Ellen A. Rudnick, 3,740; and J. Stephen Vanderwoude, 3,740. (4)The Company does not maintain a non-equity incentive plan or pension plan for directors. (5)The amount for Robert P. O’Meara includes payments made on his behalf under a Retirement and Consulting Agreement between the Company and Mr. O’Meara. The amount for Ellen A. Rudnick represents the amount paid under our matching gift donation program to eligible educational institutions designated by the director. (6)Messrs. Brown and Van Arsdell joined our Board in February 2017 and thus received no compensation for 2016 Board service. (7)Br. James Gaffney has elected not to receive any compensation for his service on the Board of (8)Ms. Hayley and Mr. Modruson joined our Board in August 2016 and thus received pro-rated compensation for their 2016 Board service. (9)Included in Robert P. O’Meara’s director compensation fees earned or paid in cash are director fees paid to him as a non-employee director of First Midwest Bank. (10)Mr. Sterling retired from our Board at our 2016 annual meeting of stockholders and thus received pro-rated compensation for his 2016 Board service. 2017 Director Compensation Consistent with the Compensation Committee’s annual review of our director compensation program, the Compensation Committee reviewed the amount of compensation paid to our directors. In connection with its review of our director compensation program, the Compensation Committee held discussions with its independent compensation consultant, Deloitte Consulting LLP, and considered publicly available director compensation data from the companies in our peer group, as well as other information. Upon the conclusion of this process, the Compensation Committee determined that director compensation for 2017 should be increased modestly, both because the Compensation Committee believed that the Company’s director compensation was below the levels prevalent in the Chicago market and to allow the Company to continue to remain competitive in its ability to retain and attract qualified directors. Specifically, the Compensation Committee determined that it was appropriate to increase both the annual fixed cash retainer and the annual award of Common Stock paid to each non-employee director from $50,000 to $52,500, for a total of $105,000, and recommended this change to our Board of Directors. Our Board of Directors unanimously approved the recommended changes to the compensation paid to our directors consistent with the Compensation Committee’s recommendation, effect as of January 1, 2017. The awards of Common Stock will continue to be granted as fully-vested shares of Common Stock, and our directors may continue to elect to receive the stock component of their director compensation in cash. Director Stock Ownership Guidelines We believe that each director should have a meaningful equity investment in our Company. Our director stock ownership guidelines provide that directors are encouraged to own Common Stock equal in value to three times the total annual base compensation for non-employee directors, or $315,000. This amount is the equivalent of six times the base annual cash retainer paid to our non-employee directors. Directors are expected to acquire and maintain this share ownership threshold within five years of joining the Board of Directors. All of our directors own a sufficient number of shares of Common Stock under our stock ownership guidelines, except for two of our newest directors who joined our Board within the past several months and who are in the process of accumulating shares to comply with our stock ownership guidelines. Br. Gaffney is exempt from our stock ownership guidelines because he does not accept any director compensation for serving on our Board. COMPENSATION DISCUSSION AND ANALYSIS The following Compensation Discussion and Analysis describes our executive compensation philosophy and programs as established by our Compensation Committee. Our Compensation Discussion and Analysis is presented in the following sections: Principal Elements of Our Executive Compensation Program in 2016 Employment and Restrictive Covenant Agreements with Our Executive Officers This Name Title Michael L. Scudder President and Chief Executive Officer of the Company and Chairman and Chief Executive Officer of First Midwest Bank Mark G. Sander Senior Executive Vice President and Chief Operating Officer of the Company and Vice Chairman, President and Chief Operating Officer of First Midwest Bank Paul F. Executive Vice President and Chief Financial Officer of the Company and First Midwest Bank Thomas M. Prame Executive Vice President and Director, Nicholas J. Chulos Executive Vice President, Corporate Secretary and *Mr. Clemens served as Executive We believe it is important to incent and reward our executives for corporate and individual performance, with a clear emphasis on corporate performance. We maintain a pay-for-performance environment with an executive compensation program Our executive compensation program is designed to accomplish the following goals: Our Compensation Committee also annually reviews the risks and rewards associated with each element of our executive compensation program to assure that the program does not encourage our executive officers to take excessive risks to enhance their compensation. Pay-for-Performance Consistent with our longstanding compensation practices, performance-based cash and Additionally, our short-term and long-term performance goals require the Company to achieve performance at or exceeding budget in order for our executives to receive target payout levels and are in furtherance of strategic and operating objectives that we believe 2016 Achievements The Company’s activities in 2016 reflected significant achievement and transformation. Despite a continued The charts below provide information about our recent growth: Additionally, in 2016, we completed our combination with The National Bank & Trust Company of Additional insight into our successes in ·Earnings Growth.Increased earnings by 9% to $92.3 million, or $1.14 per share, compared to 2015. Excluding costs related to M&A activity, and the related integration, as well as other significant transactions, we had earnings per share ·Return on Equity. Our return on average tangible common equity (excluding costs related to M&A activity, and the related integration, as well as other significant transactions) increased to 11.5% from 11.2% in ·Well ·Dividends. In 2016, we were pleased to pay our 136th consecutive quarterly dividend to our stockholders. ·Total Assets Growth. Total assets grew to $11.4 billion as of December 31, 2016, an increase of 18% from December 31, 2015. When we completed the Standard Bank transaction on January 6, 2017, our assets increased to approximately $14 billion, or 44% larger than on December 31, 2015. ·Deposit Growth. Total deposits grew to $8.8 billion, an increase of 9% from December 31, 2015 and three-year growth of 12%. ·Loan Growth. Total loans grew to $8.3 billion, an increase of 13% from December 31, 2015 and three-year growth of 23%. ·Growth of Wealth Management Business. Our wealth assets under management were $8.7 billion at December 31, 2016, reflecting an increase of $1.3 billion, or 18%, from December 31, 2015. We added an additional $800 million of assets under management when we acquired Standard Bank &Trust Company in January 2017 and Premier Asset Management LLC in February 2017. ·Growth of Fee-Based Revenues. Continued to diversify our revenues by growing fee-based revenues to $145.1 million, an increase of 14% and three-year growth of 31%. ·M&A Activity. Completed the acquisition of The National Bank & Trust Company of Sycamore ($665 million in assets). Also completed the acquisitions of Standard Bank & Trust Company on January 6, 2017 ($2.6 billion in assets) and Premier Asset Management on February 28, 2017 ($550 million of assets under management). ·Sale-Leaseback. Completed a sale-leaseback of 55 of our branches for a purchase price of $150 million, which resulted in an initial pre-tax gain of $90 million and the opportunity to elect to add $50 million of tier 1 capital. ·Building the Highest Quality Team. In 2016, we welcomed several new members of our executive management team and added over 400 new colleagues through both organic and M&A growth. For a reconciliation of the GAAP and non-GAAP financial measures discussed above, which includes earnings, earnings per share and return on average tangible common equity (ROATCE), in each case excluding certain significant transactions, see our Given the significant growth of the Company and its transition to an institution having more than $10 billion in assets and operating within a heightened regulatory regime, the Compensation Committee determined, at its meeting in February 2017, to make adjustments to the 2017 base salaries of certain members of senior management to align compensation with market practices for similarly-sized organizations and to reflect the increased nature and scope of position responsibilities that accompany a larger and a more complex and diverse organization. In addition, our Chief Executive Officer and Chief Operating Officer volunteered to have any compensation based on their individual performance ratings instead be based entirely on corporate performance and not their individual performance. As such, and based on a recommendation from management, the Compensation Committee determined to eliminate for 2017 compensation purposes the individual performance ratings of our Chief Executive Officer and our Chief Operating Officer. Accordingly, their annual cash incentive awards and restricted stock awards, which were based, in part, on individual performance ratings, instead will now be based entirely on Company performance. The Committee believes this change is appropriate because the individual performance of the CEO and the COO is already closely aligned with the overall performance of the Company and because it will drive even greater focus on maximizing the Company’s financial performance. Total Stockholder Return In addition to the achievements noted above, we created long-term stockholder value in 2016. Below is our one-, three- and five-year total stockholder return as compared to our 2016 peer group and the NASDAQ Bank As described more fully below under Compensation Discussion and Analysis—Peer Group, at its November 2016 meeting, our Compensation Committee approved various changes to our peer group for 2017. Stockholder Say-on-Pay Vote in 2016 Our Compensation Committee reviews the Although the Compensation Committee believes these vote results confirm that our stockholders are in agreement with our approach to executive compensation, the Compensation Committee annually evaluates our compensation program and our compensation disclosure practices in an effort to confirm that our pay and performance are linked and that our compensation practices are clearly disclosed. Our Compensation Committee intends to consider the vote results from this year, and future advisory votes, when determining the design and amounts provided under our executive compensation program. Program Enhancements Double Trigger Vesting for Equity Awards. Beginning in 2016, our Compensation Committee determined that performance share, restricted stock and restricted stock unit awards will have a double trigger vesting feature in the stock ownership guidelines should be increased from three-times to five-times base salary for our CEO and Our Compensation Philosophy Our Compensation Committee has designed a compensation program that promotes a pay-for-performance environment Executive compensation should be performance-based and reward achievement of corporate objectives. Our compensation program for our named executive officers (and our other executive officers) should motivate and reward superior A significant portion of executive compensation should be in the form of equity awards that encourage long-term value creation for stockholders. Equity compensation tied to long-term performance further aligns senior management and stockholder interests. Equity compensation also focuses management on long-term value creation rather than taking risks to increase short-term compensation. Executive compensation should reflect an appropriate balance of fixed, incentive and at-risk equity compensation. Our Compensation Committee believes that executive compensation should be comprised of base salary, incentive compensation (both cash and stock) and long-term equity. This composition mix results in appropriate levels of fixed and incentive compensation, and encourages achievement of both short-term and long-term performance objectives. Executive compensation should be market-competitive. Vital to our continued success and growth is an experienced and dedicated management team. All elements of our compensation program should be competitive within the markets in which we compete for Executive compensation should have a retention effect. Our executive compensation program should be structured to enable us to retain high-performing executives and avoid undesirable management turnover. To encourage retention, a significant component of our compensation consists of long-term equity compensation, a portion of which is tied to a three-year performance period followed by a two-year continued service vesting period and a portion of which is subject to a three-year continued service vesting schedule. Executive compensation should not encourage excessive risk-taking. Our Compensation Committee annually reviews the risks and rewards associated with our compensation program to assure that our program appropriately incents our Compensation Best Practices The Compensation Committee considers various compensation and corporate governance best practices when making executive compensation decisions, including the following: What We Do What We Don’t Do ü Double Trigger Vesting of Equity Awards Upon a Change-in-Control For equity awards made in 2016 and going forward. Requires both a change-in-control of the Company and an involuntary termination of the employee. û No Excise Tax Gross-ups We do not pay our executives a tax gross-up in the event they incur an excise tax from severance benefits paid following a change-in-control. û No Dividends Paid on Equity Awards Prior to Vesting ü Double Trigger for Severance Upon a Change-in-Control Requires both a change-in-control of the Company and an involuntary termination of the employee. We do not pay dividends on performance shares or restricted stock awards before they are earned and vested. û No Share Recycling ü Capped Incentive Payouts Payouts under our annual cash incentive compensation and performance-based equity compensation programs are capped at 175% and 200% of target, respectively. Our Omnibus Stock and Incentive Plan does not permit recycling of shares. û No Stock Option Repricing Our Omnibus Stock and Incentive Plan prohibits repricing of stock options and stock appreciation rights, as well as cash buyouts or exchanges of underwater stock options, without stockholder approval. ü Clawback of Compensation Employment agreements with our executive officers allow us to recover cash bonuses and other incentive compensation under certain circumstances. û No Excessive Perquisites ü Anti-Pledging and Anti-Hedging Policy Prohibits our executive officers and all other employees from pledging, hedging or selling short shares of our Common Stock. Perquisites represent an immaterial portion of our executive compensation. ü Stock Ownership Guidelines Robust stock ownership guidelines for our executive officers further align their interests with our stockholders’. ü Independent Compensation Consultant Our Compensation Committee regularly obtains advice from an independent compensation consultant on our executive compensation program. ü Minimum Vesting Periods Our equity awards have a period of not less than three years for full vesting to occur, with our performance shares having three-year performance periods and, if earned, two-year full vesting periods, subject to certain limited exceptions. ü Compensation Risk Assessment Our Compensation Committee conducts an annual risk assessment of our executive compensation program. ü Protective Covenants Our executive officers must comply with confidentiality and non-solicitation covenants as a condition to receiving equity and short-term cash incentive awards. Compensation Role of Management. In February of each year, our Chief Executive Officer makes recommendations to the Compensation Committee with respect to the base salaries for and determines his individual performance rating and base Role of the Compensation Committee. Each year, our Compensation Committee reviews and approves the compensation philosophy of the Company. The Compensation Committee also reviews and approves each year, subject to the approval of our Board of Directors, the principal elements and the amounts of the compensation paid to our Chief Executive Officer, our Chief Operating Officer and our other executive officers. Our Compensation Committee considers the recommendations of our Chief Executive Officer when determining the base salary, annual cash incentive compensation and equity awards for our executive officers other than himself. In determining executive compensation, our Compensation Committee considers information from the Committee’s compensation consultant, management and publicly available information about the companies in our peer group. Role of Compensation Consultant. How We Measure Company Performance At the beginning of the year, our Compensation Committee establishes and the Board of Directors approves corporate-wide financial performance goals against which actual performance of the Company is measured for For our 2017 annual cash incentive program, the Compensation Committee again determined to use core net income and asset quality metrics but added execution on certain strategic initiatives as a new metric. For the performance share component of our executive compensation program in period will be measured against predetermined return on average tangible common equity goals for the same period. Performance shares may be earned based on the level that the metrics are achieved and, if earned, the shares will vest in full following an additional two-year vesting period. For our 2017 performance share awards (2017-2019 performance period), the Compensation Committee again determined to use relative total stockholder return and core return on average tangible common equity, weighted equally at 50% each, as the performance metrics. The Compensation Committee must certify the level of achievement of the performance goals for both the annual cash incentive compensation program and the performance Peer Group Our Compensation Committee reviews publicly-available information about a group of regional bank holding companies whose size, business lines or geographical markets are generally similar to ours and uses this information as a reference point when evaluating the elements and amounts of the compensation paid to our Chief Executive Officer and our other named executive officers. We refer to these institutions as our peer group. The Committee does not establish the compensation of our named executive officers using direct comparisons to our peer group, but instead uses peer group data as a competitive market check on named executive officer compensation. Peer group data is one of several factors used by the Compensation Committee when setting the compensation of our Chief Executive Officer and other named executive officers. Our peer group is developed with input from Name of Institution Asset Size as of 12/31/ Location 1st Source Corporation(1) $ 5.2 South Bend, IN Chemical Financial Corporation 9.2 Midland, MI Community Bank System, Inc.(1) 8.6 DeWitt, NY First Commonwealth Financial Corporation(1) 6.6 Indiana, PA First Financial 8.1 Cincinnati, OH First Merchants Corporation(1) 6.1 Muncie, IN F.N.B. Corporation 17.6 Pittsburgh, PA MB Financial, Inc. 15.6 Chicago, IL Old National Bancorp 12.0 Evansville, IN Park National Corporation(1) 7.2 Newark, OH Pinnacle Financial Partners, Inc.(1) 8.7 Nashville, TN PrivateBancorp, Inc.(2) 17.3 Chicago, IL Provident Financial Services, Inc.(1) 8.9 Jersey City, NJ Texas Capital Bancshares, Inc. 18.9 Dallas, TX Trustmark Corporation 12.7 Jackson, MS UMB Financial Corporation 19.1 Kansas City, MO Umpqua Holdings Corporation(1) 23.4 Portland, OR United Bankshares, Inc. 12.6 Charleston, WV Valley National Bancorp 21.6 Wayne, NJ WesBanco, Inc.(1) 8.5 Wheeling, WV Wintrust Financial Corporation 22.9 Rosemont, IL Median $ First Midwest Bancorp, Inc. 9.7 Itasca, IL (1)Removed from our 2017 peer group primarily due to asset size. (2)Removed from our 2017 peer group due to pending acquisition. In late 2016, management recommended and our compensation consultant concurred that our peer group should be modified to reflect the Company’s substantial growth during 2016, more diverse revenue sources and transition to an enhanced regulatory regime. In addition to the deletions from our peer group noted above, the Compensation Committee, at its November 2016 meeting, approved the following additions to our peer group, resulting in a peer group consisting of Name of Institution Asset Size as of 12/31/2015 Location BancorpSouth, Inc. $ 13.6 Tupelo, MS Fulton Financial Corporation 17.9 Lancaster, PA Great Western Bancorp, Inc. 10.0 Sioux Falls, SD Hancock Holding Company 22.8 Gulfport, MS IBERIABANK Corporation 19.5 Lafayette, LA Sterling Bancorp 12.0 Montebello, NY TCF Financial Corporation 20.7 Wayzata, MN Western Alliance Bancorp 14.3 Phoenix, AZ Median of 2017 Peer Group (at 12/31/2016) $ 19.1 First Midwest Bancorp, Inc. (at 12/31/2016) 14.0 (1) (1) Reflects total assets for First Midwest Bancorp, Inc. of $11.4 billion as of December 31, 2016, plus total assets for Standard Bancshares, Inc. of $2.6 billion as of December 31, 2016. The Company completed its acquisition of Standard Bancshares, Inc. on January 6, 2017. How We Measure Individual Performance In 2016, a portion of the annual cash incentive compensation awards that The determination of a named executive officer’s individual performance rating is based on a review of actions taken or results achieved by the executive and how these actions and results impacted overall corporate performance and achievement of the corporate financial goals under our annual cash incentive compensation and performance share programs. A subjective assessment of an executive officer’s leadership and contributions to the Company also may be factored into his or her individual performance rating. Our Compensation Committee Internal Pay Considerations Our Compensation Committee believes that our executive compensation programs must be internally consistent and equitable in order for the Company to be able to attract and retain the executive officers necessary to achieve our business and financial objectives and to create a cohesive team atmosphere within the Company. As such, the Committee reviews total compensation and various elements of compensation paid to our Chief Executive Officer in relation to our Chief Operating Officer and to our other named executive officers as a group, as well as the median of the relationship of CEO compensation to executive officers within our peer group. The Committee uses this information as another point of reference in its compensation decisions. Principal Elements of Our Executive Compensation Program in The Compensation Committee approves, subject to approval by our full Board of Directors, the compensation of our Chief Executive Officer and other named executive officers each year. In determining the compensation of our named executive officers other than our Chief Executive Officer, the Compensation Committee considers the recommendations of the Chief Executive Officer. Compensation is determined based on a consideration of overall corporate financial performance relative to The principal elements of our executive compensation program are: ·Base ·Performance-Based Annual Cash Incentive ·Performance ·Restricted Stock or Restricted Stock When setting the total compensation opportunity for our named executive officers, our Compensation Committee uses data available from various sources, including peer group information, publicly available data and advice from Base Salary We pay our named executive officers a base salary as part of a competitive compensation package. Base salary is not directly subject to the achievement of any corporate or individual performance goals. In setting base salary levels, we consider the median base salary paid for positions of similar responsibility at the institutions in our peer group as well as the executive’s performance and tenure in Annually, our Chief Executive Officer recommends to the Compensation Committee changes in base salaries for our named executive officers, other than himself. Chief Executive Officer pay is set directly by the Compensation Committee, and the base salaries of all named executive officers, including the Chief Executive Officer, are approved by our Compensation Committee and our Board of Directors. Annual Cash Incentive Compensation Our annual cash incentive compensation program constituted between 20% and Cash bonus opportunities under our annual cash incentive compensation program are awarded under our Omnibus Stock and Incentive Plan approved by our stockholders and are expressed as a percentage of a named executive officer’s base salary. Our Compensation Committee establishes corporate ·Company Performance. Annually, the Compensation Committee selects the corporate financial performance goals for the fiscal year and the weighting for the goals selected. Awards for our named executive officers and our other executive officers are weighted ·Individual Performance.Individual performance is based on the achievement of objectives that were established for the named executive officer at the beginning of the year and that are specific to the individual’s responsibilities and position within the Company. An annual The allocation between Company performance and individual performance, and the target award expressed as a percentage of base salary, for our named executive officers in Named Executive Officer Target Bonus Opportunity Performance Weighting* (Expressed as a Company Individual Michael L. Scudder 60% 85% 15% Mark G. Sander 50% 70% 30% Paul F. Clemens 40% 70% 30% Thomas M. Prame 40% 70% 30% Nicholas J. Chulos 40% 60% 40% *For 2017, Mr. Scudder’s and Mr. Sander’s performance weighting will be 100% Company performance. For the The Compensation Committee selected core net income (net income excluding extraordinary items such as gains or losses on securities, acquisition and integration related expenses, the net gain on our sale-leaseback transaction and The Compensation Committee utilized annual cash incentive compensation in ·Emphasize core profitability of the Company. ·Continue to profitably increase our loans and diversify our loan portfolio. ·Grow deposits, and maintain our strong core deposit base and low cost of funds. ·Continue to diversify our revenues by increasing fee-based revenues. ·Balance investment in our business and risk. ·Continue our progress on credit quality. ·Control expenses while funding strategic initiatives, such as The range of performance and Performance Range Metric Threshold Target Maximum Core Net Income $77.1 million $96.4 million $106.0 million Payout (% of Target) 50% 100% 175% Non-Performing Assets 1.35% 1.05% 0.75% Payout (% of Target) 50% 100% 150% Classified Loans 5.00% 4.50% 4.00% Payout (% of Target) 50% 100% 150% The Company exceeded target performance on an overall weighted basis for the 2016 annual incentive compensation award, and the calculation of the annual cash incentive compensation payouts allocated to Company performance for our named executive officers was determined as follows: Performance Goal 2016 Actual Payout as a Weighting Weighted Payout Core Net Income $98.4 million 116.0% 80% 92.8% Non-Performing Assets 0.93% 120.0% 10% 12.0% Classified Loans 4.84% 66.0% 10% 6.6% Total Percentage Earned 111.4% The Company exceeded the target Based on the Company’s performance and the individual performance rating of each named executive officer, the Compensation Committee approved the following cash bonus awards under our annual cash incentive compensation program for For 2017, the Compensation Committee again determined to use core net income and asset quality metrics but added execution on certain strategic initiatives as a new metric. Supplemental In projects included the sale and leaseback of 55 branch locations for $150.3 million and the In recognition of Long-Term Our Compensation Committee believes that a significant portion of each named executive officer’s compensation should Performance-Based Equity Compensation.In The number of performance shares granted is based upon a percentage of the base salary of each Based upon a review of peer practices and input from management and the Compensation Committee’s compensation consultant, our Compensation Committee selected both external and internal performance metrics for our 2016 performance share program Our Compensation Committee selected these metrics to encourage our named executive officers to pursue corporate strategies that will enhance long-term stockholder value and build the value of our Common Stock while at the same time deploying our capital prudently. The Compensation Committee also believed that comparing our total stockholder return to an external metric would reward superior corporate performance relative to our peer group. For purposes of the external metric, the total stockholder return of the Company and the peer group will be calculated for a three-year performance period. Performance shares will be earned based on the total stockholder return of the Company as compared to that of the peer group. Total stockholder return is defined as the price appreciation on our Common Stock and the common stock of each company in the peer group during the relevant three-year performance period, plus dividends and distributions made or declared (assuming the dividends or distributions are reinvested in our Common Stock and each peer group company’s common stock during that period), expressed as a percentage return. For the internal metric, the Company’s average core return on average tangible common equity for the three-year period will be calculated and compared to predetermined return on average tangible common equity goals approved by the Compensation Committee. Our Compensation Committee awarded performance shares in ·Emphasize the Company’s long-term strategies and growth objectives. ·Encourage achievement of business goals that will enhance the long-term value of our Common Stock and increase the value of our Common Stock. ·Create a long-term focus based on sustainable results. ·Link pay with corporate performance. ·Provide additional stock ownership opportunities for our named executive officers, which further align the interests of our named executive officers with those of our stockholders. ·Foster retention of our named executive officers and avoid management turnover. In February Named Executive Officer Target Performance Share Number of Performance Grant Date Fair Value of Michael L. Scudder 65% 31,843 $ 546,426 Mark G. Sander 60% 21,265 364,907 Paul F. Clemens 25% 5,889 101,055 Thomas M. Prame 20% 3,808 65,345 Nicholas J. Chulos 20% 3,504 60,129 Conclusion of 2014-2016 Performance Period. In 2014, our named executive officers were awarded performance shares subject to a three-year performance period that concluded December 31, 2016. As with the performance shares awarded in February 2016 (but with the threshold, target and maximum percentages for the core return on average tangible common equity metric being higher than 2014 levels), the performance metrics applicable to the performance shares awarded in 2014 were total stockholder return relative to the Company’s peer group and core return on the Company’s average tangible common equity relative to budget, each weighted 50%. The range of performance and possible payout for each metric were as follows: Relative Total Stockholder Return Threshold Target Maximum Percentile 25th 50th 90th Payout (% of Target) 25% 100% 200% Core Return on Average Tangible Common Equity Year Threshold Target Maximum CRATCE 2014 9.10% 10.10% 10.60% 2015 10.40% 11.56% 12.14% 2016 10.06% 11.18% 11.74% Payout (% of Target)(1) 25% 100% 200% (1)At the end of the performance period, the actual performance for each year is averaged to determine the final payout as a percentage of target. In February 2017, based on the Company’s performance during the 2014-2016 performance period, our Compensation Committee certified the Company’s performance applicable to the 2014 performance shares as follows: Performance Goal 2014-2016 Actual Payout as a Weighted Relative Total Stockholder Return (50%) 40th Percentile 72.0% 36.0% CRATCE (50%) 3-Year Average(1) 83.0% 41.5% Total Percentage Earned 77.5% (1) CRATCE was equal to 9.16%, or 30% of target, for 2014, 10.92%, or 59% of target, for 2015, and 11.56%, or 159% of target, for 2016, which resulted in an average performance at 83.0% of target Accordingly, subject to applicable vesting provisions, as described above, our named executive officers will earn their 2014 performance share awards as follows: Restricted Stock Awards. In The number of shares of restricted stock or restricted stock units awarded in a given year is determined based on a percentage of the named executive officer’s base salary, and then is adjusted upward or downward depending upon the officer’s individual performance rating for the prior fiscal year. We accrue cash dividends that otherwise would be paid on the restricted stock and the Common Stock underlying restricted stock units, but the accrued, unpaid dividends on the unvested shares or units are not paid to the named executive officer unless the underlying shares vest. In Named Executive Officer Restricted Stock/Unit Number of Shares of Grant Date Fair Value Michael L. Scudder 50% 28,169 $ 473,803 Mark G. Sander 50% 20,379 342,775 Paul F. Clemens 35% 7,832 131,734 Thomas M. Prame 35% 7,998 134,526 Nicholas J. Chulos 40% 9,812 165,038 Retirement and Other Welfare Benefits We provide our named executive officers with retirement, health, life and disability insurance and other welfare benefits under plans that are generally available to all employees of the Company who meet plan eligibility requirements. Over the last several years, upon the recommendation of management, our Compensation Committee and the Board of Directors have approved various amendments to our Pension Plan. The first set of amendments were adopted in 2007 and eliminated any new enrollments of employees into this plan. In 2013, upon a subsequent recommendation of management, the Compensation Committee and the Board of Directors also approved amendments, effective as of January 1, 2014, to the Company’s (1) Pension Plan to freeze future benefit accruals under this plan, (2) Deferred Compensation Plan such that no annual pension restoration amounts will be credited to this plan on behalf of any participant, and (3) 401(k) Plan to provide employer contributions to this plan on behalf of all eligible employees of (a) an annual contribution equal to 2% of an employee’s total compensation (subject to a The amendments to our retirement plans assist us in controlling the costs of the Pension Plan and encouraging employees to assume a more active role in their retirement planning, while continuing to provide appropriate, competitive retirement benefits for our employees. Our Deferred Compensation Plan allows certain employees to elect to defer a portion of their base salaries and annual cash incentive compensation and also allows us to provide make-up benefits to our executive officers for any reduction in benefits under our 401(k) Plan due to limitations on contributions to the plan imposed by the Internal Revenue Code. We provide limited perquisites to our named executive officers, which the Compensation Committee believes are reasonable and within competitive practices. We have a vehicle policy that provides a car allowance to our named executive officers. We also provide mobile telephone service to our named executive officers and reimburse certain of them for a portion of country club dues to promote the business interests of the Company. Stock Ownership Guidelines We maintain stock ownership guidelines for our executive officers. The purpose of these guidelines is to further align the interests of our management team and our stockholders. For 2017, our Compensation Committee increased the stock ownership guidelines applicable to our Chief Executive Officer from three times base salary to five times base salary, and to our Chief Operating Officer from two times base salary to three times base salary. Under the guidelines, our named executive officers are encouraged to hold shares of Common Stock as follows: Position Stock Ownership Guidelines Chief Executive Officer Five times base salary Chief Operating Officer Three times base salary Chief Two times base salary Other Named Executive Officers Two times base salary All of our named executive officers have met these guidelines. For purposes of the guidelines, we include shares owned directly or indirectly by the executive and his spouse and minor children Clawback, Anti-Pledging, Anti-Hedging and Other Policies We have clawback provisions in the employment agreements with our named executive officers that allow us to recover cash bonuses and other incentive compensation under certain circumstances. We also have a policy that Risk Assessment of Executive Compensation Program Each year, our Compensation Committee reviews our executive compensation program and conducts a risk assessment relative to this program. This risk assessment allows our Compensation Committee to confirm that our executive compensation program is designed such that executive officers are not encouraged to take excessive or imprudent risks to enhance their compensation. As part of its risk assessment process in ·The risks associated with the Company’s compensation plans for all employees are appropriately identified and managed by the Company; ·The Company’s compensation plans for all employees do not create risks that are reasonably likely to have a material adverse effect on the Company as a whole; and ·The Company’s compensation plans for all employees are compatible with effective internal controls and risk management, and are supported by strong and effective corporate governance practices. Tax Considerations Section 162(m) of the Internal Revenue Code limits the ability of public companies to deduct for federal income tax purposes certain compensation in excess of $1 million paid to our Chief Executive Officer and other named executive officers. However, this limitation does not apply to amounts that qualify as performance-based compensation. We structure our annual cash incentive compensation and performance shares to qualify as performance-based compensation under Section 162(m). Our Compensation Committee considers the structure of executive compensation and the deductibility of the compensation for federal income tax purposes, but the Compensation Committee retains the flexibility to provide, and has approved, compensation that is non-deductible. Employment and Restrictive Covenant Agreements with Our Executive Officers We have entered into employment agreements with our senior management, including our named executive officers. The Compensation Committee has determined that the terms of the agreements are consistent with competitive practices and are important to attracting and retaining high caliber executive talent. The agreements describe the executive’s position, compensation and benefits, including severance payments in the event of a termination of employment. The agreements also impose confidentiality, non-solicitation and non-disparagement obligations on the executive. In the event of a termination of employment by the Company without cause or by the executive officer for good reason prior to or following a change-in-control of the Company, severance benefits are triggered. Certain aspects of these agreements for our named executive officers are detailed in the tables and narrative following this Compensation Discussion and Analysis. The employment agreements do not provide for walk-away rights upon a change-in-control or any tax gross-up payments relating to severance benefits following a The Compensation Committee has reviewed and discussed with management the J. Stephen Vanderwoude (Chair) Barbara A. Boigegrain (Vice-Chair) Peter J. Henseler Ellen A. Rudnick Members, Compensation Committee EXECUTIVE COMPENSATION TABLES 2016 Summary Compensation Table The table and explanatory Name and Year Salary Bonus(1) Stock Non-Equity Change in All Other Total Michael L. Scudder 2016 $ 824,307 $ 50,000 $ 1,088,685 $ 542,307 $ 153,763 $ 146,311 $ 2,805,373 President and Chief Executive Officer 2015 800,000 — 1,254,111 521,196 179,501 133,384 2,888,192 2014 750,000 47,000 1,103,667 482,400 221,576 64,644 2,669,287 Mark G. Sander 2016 $ 596,325 $ 35,000 $ 753,495 $ 344,198 $ 32,359 $ 80,398 $ 1,841,775 Senior EVP and Chief Operating Officer 2015 579,880 — 862,121 318,108 38,139 77,979 1,876,227 2014 545,000 20,015 723,140 304,159 19,915 72,685 1,684,914 Paul F. Clemens 2016 $ 396,315 $ 15,000 $ 248,248 $ 180,631 $ 7,934 $ 46,784 $ 894,912 EVP and Chief Financial Officer 2015 386,528 — 307,127 160,355 6,923 34,054 894,987 2014 376,000 9,898 263,999 156,593 5,268 48,088 859,846 Thomas M. Prame 2016 $ 320,436 $ 12,500 $ 211,604 $ 144,567 $ 1,585 $ 32,522 $ 723,214 EVP and Director, Strategic Planning and Consumer Banking, First Midwest Bank 2015 309,163 — 228,690 133,897 1,648 30,478 703,876 Nicholas J. Chulos 2016 $ 295,077 $ 30,000 $ 236,546 $ 149,522 $ 2,355 $ 29,479 $ 742,979 EVP, Corporate Secretary and General Counsel (1)For 2016 and 2014, amounts represent the cash portion of a supplemental strategic activities award paid in recognition of the successful completion of acquisitions and other transactions during the applicable year. The amounts do not include the portion of the award paid in shares of restricted stock or restricted stock units, which portion is included, as to the 2014 award, in the “Stock Awards” column for 2015 and will be included, as to the 2016 award, in the “Stock Awards” column for 2017 in our proxy statement for our 2018 annual meeting of stockholders. For 2016, this supplemental award totaled: $100,000 for Mr. Scudder, $70,000 for Mr. Sander, $30,000 for Mr. Clemens, $25,000 for Mr. Prame and $60,000 for Mr. Chulos. For additional information regarding the 2016 award, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation in 2016—Supplemental Strategic Activities Award. For 2014, this supplemental award totaled: $88,000 for Mr. Scudder, $49,652 for Mr. Sander, $25,424 for Mr. Clemens and $24,607 for Mr. Prame. (2)Amounts represent the aggregate grant-date fair value of stock awards, including performance shares and restricted stock and restricted stock unit awards, granted under our Omnibus Stock and Incentive Plan during the period, calculated in accordance with ASC 718. Assumptions used in the calculation of these amounts are described in Note 17 to our annual audited financial statements included in our Form 10-K. The grant-date fair value of the performance shares is based on a target level of performance and will likely vary from the actual amount the individual earns upon vesting of applicable awards. Assuming the highest level of performance, the grant-date fair value of the 2016 performance share awards would be: $814,234 for Mr. Scudder, $543,814 for Mr. Sander, $150,572 for Mr. Clemens, $97,371 for Mr. Prame and $89,597 for Mr. Chulos. The amounts in this column also include dividends accrued on unvested awards of performance shares, restricted stock and restricted stock units (which amounts are not paid unless the underlying shares vest). For 2016, these amounts totaled: $68,457 for Mr. Scudder, $45,813 for Mr. Sander, $15,459 for Mr. Clemens, $11,732 for Mr. Prame and $11,380 for Mr. Chulos. (3)Amounts represent cash bonuses paid under our performance-based short-term incentive compensation plan for the years indicated. (4)Amounts represent the actuarial increase in the present value of the benefit under our Pension Plan for Mr. Scudder, who is the only named executive officer who participates in the plan. These amounts were determined using the interest rate and mortality rate assumptions consistent with those used in our audited financial statements for the year ended December 31, 2016. Benefit accruals under the Pension Plan were frozen effective as of (5)Amounts represent the following: Contributions to Defined Contribution Retirement Plans and Perquisites Name Year Qualified Non- Perquisites Total Michael L. Scudder 2016 $ 15,900 $ 98,011 $ 32,400 (d) $ 146,311 2015 23,850 88,893 20,641 (d) 133,384 2014 22,231 24,231 18,182 (d) 64,644 Mark G. Sander 2016 $ 15,900 $ 39,162 $ 25,336 (d) $ 80,398 2015 15,900 36,011 26,068 (d) 77,979 2014 11,431 36,643 24,611 (d) 72,685 Paul F. Clemens 2016 $ 15,900 $ 19,306 $ 11,578 (d) $ 46,784 2015 15,900 6,754 11,400 (d) 34,054 2014 15,600 20,013 12,475 (d) 48,088 Thomas M. Prame 2016 $ 15,900 $ 3,688 $ 12,934 (d) $ 32,522 2015 15,683 3,258 11,537 (d) 30,478 2014 7,509 — 12,525 (d) 20,034 Nicholas J. Chulos 2016 $ 15,900 $ 2,547 $ 11,032 (d) $ 29,479 (a)The Company maintains the 401(k) Plan as its defined contribution plan. For eligible employees, this plan provides for an annual 2% automatic Company contribution and matching Company contributions. All Company contributions were made on eligible compensation under our 401(k) Plan, subject to compensation limitations under the Internal Revenue Code. (b)The Company maintains the Deferred Compensation Plan as its nonqualified deferred compensation plan. This plan provides for a tax-deferred vehicle to accommodate contributions that are otherwise limited and not able to be made to our tax-qualified plans, as well as voluntary participant contributions. The Deferred Compensation Plan is subject to Section 409A of the Internal Revenue Code. (c)No individual perquisite paid to any of our named executive offers exceeded $25,000 for any of the years listed. (d)Represents amounts paid to the named executive officer for an annual automobile allowance and amounts paid by the Company on behalf of the named executive officer for other customary perquisites. For Mr. Sander, also represents amounts paid by the Company on his behalf for country club dues, which membership is maintained for business entertainment but may be used for personal use. 2016 Grants of Plan-Based Awards Table The following table provides information with regard to the stock awards granted during Estimated Possible Payouts Under Estimated Possible Payouts Under All Other Grant Name Grant Threshold Target Maximum Threshold Target Maximum Stock or Option Michael L. Scudder $ 123,600 $ 494,400 $ 825,648 2/17/2016 7,961 31,843 63,686 $ 546,426 2/17/2016 28,169 473,803 Mark G. Sander $ 74,515 $ 298,058 $ 488,815 2/17/2016 5,316 21,265 42,530 $ 364,907 2/17/2016 20,379 342,775 Paul F. Clemens $ 39,619 $ 158,476 $ 259,901 2/17/2016 1,472 5,889 11,778 $ 101,055 2/17/2016 7,832 131,734 Thomas M. Prame $ 32,029 $ 128,117 $ 207,550 2/17/2016 952 3,808 7,616 $ 65,345 2/17/2016 7,998 134,526 Nicholas J. Chulos $ 29,471 $ 117,882 $ 190,970 2/17/2016 876 3,504 7,008 $ 60,129 2/17/2016 9,812 165,038 (1)Amounts reflect the range of possible payouts under our short-term cash incentive compensation plan based on a combination of Company performance and individual performance rating assumptions. For additional information, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation Program in 2016—Annual Cash Incentive Compensation. (2)Awards represent the range of estimated possible payouts granted in the form of performance shares under our Omnibus Stock and Incentive Plan, which, if earned, vest in shares of Common Stock. Our named executive officers are eligible to earn performance shares totaling between 25% and 200% of the number of performance shares granted if performance levels are achieved using the following two metrics: total stockholder return relative to a specified peer group of financial institutions and core return on average tangible common equity relative to predetermined goals. For additional information, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation Program in 2016—Long-Term At-Risk Equity Compensation—Performance-Based Equity Compensation. Dividends on performance shares are accrued but not paid until earned performance shares vest. (3)Awards represent restricted stock or, in the case of Mr. Clemens, restricted stock unit awards granted under our Omnibus Stock and Incentive Plan. Restricted stock and restricted stock unit awards vest over three years in two equal installments beginning two years from the date of grant (subject to continued employment and accelerated vesting under certain circumstances). For additional information, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation Program in 2016—Long-Term At-Risk Equity Compensation—Restricted Stock Awards. Dividends on restricted stock and the Common Stock underlying restricted stock units are accrued but not paid unless the underlying shares vest. (4)Amounts represent the aggregate grant-date fair value of stock awards, including performance shares and restricted stock and restricted stock unit awards, granted under our Omnibus Stock and Incentive Plan during 2016, calculated in accordance with ASC 718. See notes 2 and 3, above, for additional information regarding these awards. For the performance shares, the amounts have been calculated taking into consideration the probable outcome of the respective performance conditions as the date of grant. Dividends accrued but not paid until the vesting of the awards of performance shares, restricted stock and restricted stock units are not included in the amounts reflected in this column. Assumptions used in the calculation of these amounts are described in Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. 2016 Outstanding Equity Awards at Fiscal Year-End The following table provides information regarding unexercised stock options and unvested stock awards held by our named executive officers as of December 31, Option Awards(1) Stock Awards Name Number of Option Option Number of Market Equity Equity Michael L. Scudder 18,898 $ 38.62 2/21/2017 14,577 (2) $ 367,778 30,916 (7) $ 780,011 25,019 28.10 2/20/2018 38,817 (3) 979,353 31,843 (8) 803,399 28,169 (4) 710,704 18,101 (5) 456,688 28,319 (6) 714,488 Mark G. Sander 42,328 $ 12.17 6/20/2021 11,440 (2) $ 288,631 20,685 (7) $ 521,883 27,374 (3) 690,646 21,265 (8) 536,516 20,379 (4) 514,162 12,058 (5) 304,223 15,762 (6) 397,675 Paul F. Clemens 5,380 $ 38.62 2/21/2017 4,911 (2) $ 123,905 5,745 (7) $ 144,946 18,464 28.10 2/20/2018 11,413 (3) 287,950 5,889 (8) 148,579 7,832 (4) 197,601 3,526 (5) 88,961 4,531 (6) 114,317 Thomas M. Prame 4,084 (2) $ 103,039 3,676 (7) $ 92,745 9,209 (3) 232,343 3,808 (8) 96,076 7,998 (4) 201,790 2,256 (5) 56,919 2,894 (6) 73,016 Nicholas J. Chulos 4,011 (2) $ 101,198 3,160 (7) $ 79,727 8,648 (3) 218,189 3,504 (8) 88,406 9,812 (4) 247,557 1,932 (5) 48,744 2,487 (6) 62,747 (1)None of our named executive officers has been granted a stock option award since 2011. All outstanding options were exercisable as of December 31, 2016 and have an exercise price equal to the average of the high and low sales price of a share of Common Stock on the NASDAQ Stock Market on the grant date. (2)Restricted stock and restricted stock unit awards vest over three years in two equal installments beginning two years from the date of grant (subject to continued employment and accelerated vesting under certain circumstances). Represents the second tranche of restricted stock or restricted stock unit awards granted in 2014 that vested on February 19, 2017. (3)Represents restricted stock or restricted stock unit awards granted in 2015, the first tranche of which vested on February 18, 2017 and the second tranche of which is scheduled to vest on February 18, 2018. See note 2, above, for additional information regarding the vesting of restricted stock and restricted stock unit awards. (4)Represents restricted stock or restricted stock unit awards granted in 2016, the first tranche of which is scheduled to vest on February 17, 2018 and the second tranche of which is scheduled to vest on February 17, 2019. See note 2, above, for additional information regarding the vesting of restricted stock and restricted stock unit awards. (5)Represents the second and third tranche of (6)Represents performance shares earned at the completion of a three-year performance period that ended on December 31, 2016. The final number of shares awarded was based on the following metrics: total stockholder return relative to our peer group at 72% of target and core return on average tangible common equity at 83% of target. The first tranche of these awards vested on March 15, 2017 and the second and third tranches are scheduled to vest on March 15, 2018 and March 15, 2019, respectively. For additional information, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation Program in 2016—Long-Term At-Risk Equity Compensation—Performance-Based Equity Compensation (7)Performance shares that may be earned upon completion of a three-year performance period ending on December 31, 2017 if performance levels (reflected at target in this table) are achieved using the following two metrics: total stockholder return relative to our peer group and core return on average tangible common equity relative to predetermined goals. (8)Performance shares that may be earned upon completion of a three-year performance period ending on December 31, 2018 if performance levels (reflected at target in this table) are achieved using the following two metrics: total stockholder return relative to our peer group and core return on average tangible common equity relative to predetermined goals. 2016 Option Exercises and Stock Vested Table The following table provides information with respect to Option Awards Stock Awards Name Number of Value Realized Number of Value Realized Michael L. Scudder — — 40,451 $ 668,851 Mark G. Sander — — 28,602 472,296 Paul F. Clemens — — 11,649 191,167 Thomas M. Prame — — 9,593 156,871 Nicholas J. Chulos — — 6,925 113,500 Pension Benefits We maintain a noncontributory tax-qualified defined benefit Pension Plan for eligible employees. Eligibility to participate in this plan was frozen in 2007. Benefit accruals under this plan were frozen effective as of January 1, 2014 and no additional benefits will accrue to participants after that date, including for Mr. Scudder, The amount of the monthly pension benefit under our Pension Plan is based on the average monthly pension-eligible compensation and years of credited service of the participant. Average monthly compensation is the average of the highest eighty-four consecutive months of pay within the last 120 months of service and years of credited service is based on the period of employment with the Company, subject to limitations on Pension-eligible compensation consists of base salary, cash bonuses, incentive compensation and vacation pay, but excludes severance and amounts realized from the exercise of non-qualified stock options and the vesting of restricted stock, Our Pension Plan provides for pension benefits under normal retirement (the attainment of age 65), early retirement (the attainment of age 55 with fifteen or more years of service), termination after five years of service, disability retirement after ten years of service and death before retirement with five or more years of service. A participant may elect to have his or her benefit paid each month in the form of a single life annuity or one of several actuarially equivalent forms of payment, including a lump sum. Early retirement pension benefits are reduced by 6% for each of the first five years (ages 60-65) and by 4% for each of the next five years (ages 55-60) that the pension commencement date precedes the normal retirement age of 65. 2016 Pension Benefits Table The following table shows the present value of the accumulated benefit as of December 31, Name Plan Name Number of Present Value of Payments Michael L. Scudder Pension Plan 27.75 $ 694,946 $ — Mark G. Sander(1) N/A N/A N/A N/A Paul F. Clemens(1) N/A N/A N/A N/A Thomas M. Prame(1) N/A N/A N/A N/A Nicholas J. Chulos(1) N/A N/A N/A N/A Non-Qualified Deferred Compensation We maintain two non-qualified deferred compensation plans in which our named executive officers may participate, the Deferred Compensation Plan and the Gain Deferral Plan. Deferred Compensation Plan The Deferred Compensation Plan is a non-qualified defined contribution deferred compensation plan under which participants are credited with deferred compensation equal to contributions and benefits based on amounts that would have accrued under our Pension Plan or been contributed under our 401(k) Plan but for limitations under the Internal Revenue Code, and up to 75% of base salary and up to 100% of short-term cash incentive compensation that the participant has elected to defer. Deferral elections are made by eligible participants in December of each year for amounts to be earned in the following year. Participant accounts are deemed to be invested in separate investment accounts in an irrevocable rabbi trust under the Deferred Compensation Plan, with similar investment alternatives as those available under our 401(k) Plan, including an investment account deemed invested in shares of our Common Stock. Participants are able to modify their investment elections at any time, subject to applicable blackout periods. Gain Deferral Plan We maintain the Gain Deferral Plan with the purpose of encouraging stock ownership under this plan. Currently, Distributions Under both the Deferred Compensation Plan and the Gain Deferral Plan, payments begin after termination of employment and are payable at the participant’s election either as a lump sum or in installments over a period not to exceed fifteen years. Earlier payment may be made upon showing of financial hardship to the satisfaction of the Compensation Committee. Distributions are paid in cash under the Deferred Compensation Plan, and are paid as in-kind stock distributions under the Gain Deferral Plan. Payments to named executive officers will be delayed as necessary to comply with Section 409A of the Internal Revenue Code. 2016 Non-Qualified Deferred Compensation Table The table set forth below summarizes the activity in the Deferred Compensation Plan and Gain Deferral Plan accounts of our named executive officers during Name Plan Name Executive Company Aggregate Aggregate Aggregate Michael L. Scudder Deferred Comp. Plan $ 33,277 $ 98,011 $ 96,016 $ — $ 2,666,280 Gain Deferral Plan — — 3,419 — 241,538 Mark G. Sander Deferred Comp. Plan $ 79,959 $ 39,162 $ 32,359 $ — $ 630,790 Gain Deferral Plan N/A N/A N/A N/A N/A Paul F. Clemens Deferred Comp. Plan $ 6,095 $ 19,306 $ 7,934 $ — $ 200,325 Gain Deferral Plan N/A N/A N/A N/A N/A Thomas M. Prame Deferred Comp. Plan $ — $ 3,688 $ 1,585 $ — $ 62,623 Gain Deferral Plan N/A N/A N/A N/A N/A Nicholas J. Chulos Deferred Comp. Plan $ 32,014 $ 2,547 $ 2,355 $ — $ 125,260 Gain Deferral Plan N/A N/A N/A N/A N/A (1)Executive contributions represent amounts that would have been contributed by the named executive officer under our 401(k) Plan, but for limitations under the Internal Revenue Code, and salary and short-term incentive compensation the named executive officer has elected to defer. (2)Company contributions represent amounts that would have been contributed under our tax-qualified benefit plans but for limitations under the Internal Revenue Code. The Company contributions for each named executive officer to the Deferred Compensation Plan are included in the “All Other Compensation” column of the 2016 Summary Compensation Table. (3)Aggregate balances at December 31, 2016 reflect amounts accumulated through the named executive officer’s participation in the plans from: (a) participant and Company contributions under the Deferred Compensation Plan and (b) participant contributions only under the Gain Deferral Plan. Our named executive officers have participated in the Deferred Compensation Plan since 1999 for Mr. Scudder, 2011 for Mr. Sander, 2006 for Mr. Clemens, 2012 for Mr. Prame and 2014 for Mr. Chulos. Mr. Scudder has participated in the Gain Deferral Plan since 2004. (4)As of December 31, 2016, the portion of the aggregate balances in the Deferred Compensation Plan and Gain Deferral Plan (as applicable) that represent Common Stock of the Company are as follows: 9,573 shares for Mr. Scudder, 0 shares for Mr. Sander, 2,007 shares for Mr. Clemens, 1,998 shares for Mr. Prame and 0 shares for Mr. Chulos. We have entered into employment agreements and maintain plans covering our named executive officers that will require the Company to provide severance payments in the event of an involuntary termination of employment (other than for cause) or a resignation of employment for good reason both prior to and following a change-in-control of the Overview Our employment agreements with each of our named executive officers provide for automatic annual one-year extensions, except for Messrs. Scudder and Sander whose employment agreements provide for automatic two-year extensions every other year. Among other items, the agreements set forth the executive’s title, responsibilities and compensation, confidentiality, In addition to their employment agreements, our named executive officers are parties to Confidentiality and Restrictive Covenants Agreements with us through which we enhanced the restrictive covenants applicable to our named executive officers. The The following discussion takes each termination of employment situation—voluntary resignation, discharge for cause, discharge without cause, resignation for good reason, death and disability—both prior to and following a change-in-control of the Company, and describes the severance or other additional amounts that the Company would pay or provide to the named executive officer or the officer’s beneficiaries as a result. The discussion below and the amounts shown reflect certain assumptions we have made in accordance with applicable SEC rules. These assumptions are that the termination of employment or change-in-control occurred on December 31, The following discussion and amounts exclude the payments and benefits ·Base salary payable through the date of termination; ·Any other cash compensation earned through the date of termination but not paid, including any amounts earned and vested but not paid under our annual cash incentive compensation program; ·Benefits accrued under our 401(k) Plan and Pension Plan in which all employees participate; ·Accrued vacation pay, group health plan continuation and other similar amounts payable when employment terminates under programs applicable to our salaried employees generally; ·Balances accrued under our Deferred Compensation Plan and Gain Deferral Plan; and ·Stock options that have vested and become exercisable, and restricted stock, restricted stock units and performance shares that have vested, prior to the employment termination or change-in-control. Voluntary Resignation Prior to age 65, we are not obligated to pay amounts over and above vested benefits in the event of employment termination due to voluntary resignation, and all unearned or unvested restricted stock, restricted stock unit and performance share awards will ·All unvested restricted stock and restricted stock unit awards, as well as all earned but unvested performance shares, become fully vested; and ·A prorated portion of all unearned performance shares may vest following the end of the performance periods applicable to the executive’s performance share awards outstanding at the time of As of December 31, Discharge for Cause We are not obligated to pay any amounts over and above vested benefits if a named executive officer’s employment terminates because of discharge for cause. The named executive officer’s right to exercise vested options expires upon discharge for cause and, if the cause is fraud or embezzlement of funds, benefits under the Gain Deferral Plan are subject to forfeiture. In general, a discharge will be for cause if the executive has intentionally failed to perform his Death or Disability We provide our employees, including our named executive officers, with group life and disability insurance coverage. The group life insurance benefit is based on a multiple of base salary, subject to limits contained in the policy. Participants in our group life insurance plan may, if eligible, purchase additional insurance at their own cost. The disability benefit is a monthly benefit, paid until age 65, equal to 60% of base salary at the time of The amount of the payments to our named executive officers assuming death or disability on December 31, Disability Benefits Name Life Insurance Monthly Months to Total Michael L. Scudder $ 1,000,000 $ 41,215 103 $4,245,145 Mark G. Sander 750,000 29,816 83 2,474,728 Paul F. Clemens 752,000 19,816 7 138,712 Thomas M. Prame 641,000 14,754 215 3,444,730 Nicholas J. Chulos 590,000 16,022 94 1,386,876 We also have provided for the vesting of unearned or unvested equity awards in the event of the death or disability of the named executive officer as follows: ·All unvested restricted stock and restricted stock unit awards, as well as all earned but unvested performance shares, become fully vested; and ·A prorated portion of all unearned performance shares may vest following the end of the performance periods applicable to the executive’s performance share awards outstanding at the time of death or The following table summarizes the Restricted Stock Performance Shares Name Number Value Number Value Michael L. Scudder 81,563 $ 2,057,834 77,646 $ 1,959,009 Mark G. Sander 59,193 1,493,439 48,698 1,228,651 Paul F. Clemens 24,156 609,456 13,850 349,436 Thomas M. Prame 21,291 537,172 8,870 223,790 Nicholas J. Chulos 22,471 566,943 7,694 194,120 Discharge Without Cause; Resignation For Good Reason Our employment agreements obligate us to pay severance benefits if a named executive officer’s employment is involuntarily terminated other than for cause. This includes the resignation by the executive for good reason. A good reason generally will occur if the executive determines we have breached the employment agreement by not maintaining his The following table summarizes the severance benefits that would be payable to our named executive officers had their employment been terminated involuntarily without cause or for good reason on December 31, Name Monthly Number Total Salary Pro-Rated Medical Total Michael L. Scudder $ 68,667 9 $ 618,003 $ 494,400 $ 110,752 $ 1,223,155 Mark G. Sander 49,676 9 447,087 298,058 83,405 828,550 Paul F. Clemens 33,016 6 198,096 158,476 53,100 409,672 Thomas M. Prame 26,691 6 160,146 128,117 38,435 326,698 Nicholas J. Chulos 24,559 6 147,354 117,882 43,433 308,669 (1)Pro-rated annual bonus based on target bonus for year (2)Reflects amount of health benefit continuation (COBRA) premium paid by the Company during the salary continuation period and outplacement services estimated to be 12% of annual base salary. Change-in-control We have provisions in the employment agreements with our named executive officers and in our employee benefit plans for the payment of severance benefits in the event of a change-in-control of the Company. In the event of a change-in-control, our employment agreements require a “double trigger” to occur before enhanced severance benefits are paid. A “double trigger” involves both a change-in-control of the Company and a qualifying termination of the named executive’s employment The table below summarizes the severance payments we would be obligated to make if a change-in-control occurred and the named executive officer’s employment terminated (other than for cause) on December 31, Total Equity Awards Lump Sum Restricted Stock Performance Shares Total Name Severance Number Value Number Value Total Severance Michael L. Scudder $ 4,963,183 81,563 $ 2,057,834 109,179 $ 2,754,586 $ 4,812,420 $ 9,775,603 Mark G. Sander 3,272,446 59,193 1,493,439 69,770 1,760,297 3,253,736 6,526,182 Paul F. Clemens 1,565,926 24,156 609,456 19,691 496,804 1,106,260 2,672,186 Thomas M. Prame 1,238,250 21,291 537,172 12,634 318,756 855,928 2,094,178 Nicholas J. Chulos 1,127,294 22,471 566,943 11,083 279,624 846,567 1,973,861 The primary responsibilities of the Audit Committee are, among others, to: (1) assist the Board of Directors in its oversight of the integrity of the Company’s financial statements and systems of internal control over financial reporting, (2) oversee the Company’s compliance with legal and regulatory requirements relating to financial reporting and disclosure, (3) evaluate the independence and qualifications of the Company’s independent registered public accounting firm, and (4) oversee the performance of the Company’s independent registered public accounting firm and our internal audit function. The Audit Committee also is solely responsible for the appointment and compensation of the Company’s independent registered public accounting firm. The Board of Directors has adopted an Audit Committee Charter, which sets forth the specific duties of the Audit Committee, a copy of which is available on the Company’s website. In carrying out Based upon Patrick J. McDonnell (Chair) John F. Chlebowski, Jr. (Vice Chair) Phupinder S. Gill Michael J. Small Members, Audit Committee OTHER MATTERS Section 16(a) of the Incorporation by Reference To the extent that this Proxy Statement is incorporated by reference into any other filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, the sections of this Proxy Statement entitled Audit Committee Reportand Compensation Committee Report will not be deemed incorporated therein, unless specifically provided otherwise in such filing. We also include several website addresses in this Proxy Statement for your reference. The information on these websites is not part of this Proxy Statement. Other Business and Discretionary Authority As of the date of this Proxy Statement, our Board of Directors knows of no matters to come before, and does not intend to present any matters at, the Annual Meeting other than those items set forth in the Notice of Annual Meeting of Stockholders attached to this Proxy Statement. If other matters properly come before the Annual Meeting, or any adjournment or postponement, the persons named as proxies on the Proxy Card accompanying this Proxy Statement will have discretionary authority to vote pursuant to the Proxy Card, and the named proxies intend to vote on such matters in accordance with their best judgment. In addition, the persons named as proxies on the Proxy Card will have the discretionary authority to vote pursuant to the Proxy Card on any proposal to adjourn the Annual Meeting for any reason, and they will vote on any such proposal to adjourn in accordance with their best judgment. Each of the nominees for election as directors named in this Proxy Statement has consented to serve on our Board of Directors if elected, and we have no reason to believe that any of the nominees will be unwilling or unable to serve. However, should any nominee become unable or unwilling to serve as a director, the persons named as proxies on the Proxy Card accompanying this Proxy Statement intend to vote for the election of any other person who may be nominated by our Board of Directors. Stockholder Proposals for Stockholders who, in accordance with the SEC’s Rule 14a-8, wish to present proposals for inclusion in our proxy materials in connection with our In accordance with our Certificate of Incorporation, for a matter to be properly brought before the SEC rules allow us to mail a single copy of our proxy materials to multiple stockholders of record sharing the same address and who we reasonably believe are members of the same household or to one stockholder who has multiple stockholder accounts. This practice is referred to as “householding” and can result in significant savings of paper and mailing costs. We will deliver promptly to any stockholder sharing the same address a separate copy of this Proxy Statement and our We have been notified that certain brokers and banks holding our Common Stock for their customers also will household proxy materials. If you hold your shares in street name, you may contact your broker or bank if you desire to receive a separate copy of our proxy materials. Stockholders sharing an address who now receive multiple copies of our proxy materials and who wish to receive only one copy of these materials per household in the future should contact our Corporate Secretary as indicated above (if your shares are held directly) or your broker or bank (if your shares are held in street name). Additional Information You may obtain additional information regarding the Company, including our corporate governance policies and practices, by visiting our website at www.firstmidwest.com/investorrelations, or by making a written request to our Corporate Secretary at First Midwest Bancorp, Inc., One Pierce Place, Suite 1500, Itasca, Illinois 60143. By Order of the Board of Directors, Nicholas J. Chulos Executive Vice President, Corporate Secretary and General Counsel First Midwest Bancorp, Inc. April [12], 2017 PROPOSED AMENDMENTS TO THE COMPANY’S CERTIFICATE OF INCORPORATION REGARDING DECLASSIFICATION OF THE BOARD OF DIRECTIORS Paragraph (c) of PART III—GENERAL PROVISIONS of ARTICLE FOURTH of the Certificate of Incorporation would be amended as follows: ARTICLE FOURTH. Authorized Stock. PART III—GENERAL PROVISIONS (c)Removal of Directors. Any or all directors may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the then outstanding Voting Stock. ARTICLE FIFTH of the Certificate of Incorporation would be amended as follows: ARTICLE FIFTH. Board of Directors. (a)The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. (b)The number of directors constituting the Board of Directors (c)The successors of the directors whose terms expire at the 2017 annual meeting of stockholders shall serve a term of office to expire at the 2018 annual meeting of stockholders. At the 2018 annual meeting of stockholders, the successors of the directors whose terms expire at that meeting shall serve a term of office to expire at the 2019 annual meeting of stockholders. At the 2019 annual meeting of stockholders, and at each annual meeting of stockholders thereafter, the successors of the directors whose terms expire at each such meeting shall serve a term of office expiring at the annual meeting of stockholders next following their election. (d) (e) (f) (g) provided, however, that, to the extent any committee of directors of the Corporation is lawfully entitled to exercise the powers of the Board of Directors, such committee, to the extent provided by resolution of the Board of Directors or the By-laws, may exercise any power or authority of the Board of Directors under this Restated Certificate of Incorporation in the management of the business and affairs of the Corporation. (h) (i) PROPOSED AMENDMENTS TO THE COMPANY’S CERTIFICATE OF INCORPORATION REGARDING AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK The first paragraph of ARTICLE FOURTH of the Certificate of Incorporation would be amended as follows: ARTICLE FOURTH. Authorized Stock. The total number of shares of stock which the Corporation shall have authority to issue is Two Hundred Fifty One Million (251,000,000) VIEW MATERIALS & VOTE w SCAN TO ONE PIERCE PLACE, SUITE 1500 ITASCA, IL 60143 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 16, 2017. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 16, 2017. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E23466-P90858 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. FIRST MIDWEST BANCORP, INC. The Board of Directors recommends you vote FOR the election of the following nominees: For ! ! ! ! ! ! ! Against Abstain 1. Election of Directors ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1a. Thomas L. Brown The Board of Directors recommends you vote FOR the following proposals: For ! ! Against Abstain 1b. Phupinder S. Gill ! ! ! ! 2. Approval and adoption of an amendment to First Midwest Bancorp, Inc.’s certificate of incorporation to declassify the Board of Directors. 1c. Kathryn J. Hayley 1d. Frank B. Modruson 3. Approval and adoption of an amendment to First Midwest Bancorp, Inc.’s certificate of incorporation to increase the number of authorized shares of common stock from 150,000,000 to 250,000,000. 1e. Ellen A. Rudnick ! ! ! ! ! ! 1f. Michael J. Small 4. Approval of an advisory (non-binding) resolution regarding the compensation paid in 2016 to First Midwest Bancorp, Inc.’s named executive officers. Ratification of the appointment of Ernst & Young LLP as First Midwest Bancorp, Inc.’s independent registered public accounting firm for the year ending December 31, 2017. 1g. Stephen C. Van Arsdell 5. NOTE: In their discretion, the proxies named on the front of this proxy card are authorized to vote upon such other matters as may properly come before the Annual Meeting of Stockholders and at any adjournment or postponement thereof, and for the election of a person to serve as director if any of the nominees above is unable to serve. Please sign this proxy card exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date V.1.1 Important Notice Regarding the Availability of Proxy Materials For the Annual Meeting of Stockholders on May 17, 2017: The Annual Report on Form 10-K, Notice of Annual Meeting of Stockholders and Proxy Statement and Telephone/Internet Voting Instructions are available at www.proxyvote.com E23467-P90858 Proxy Solicited on Behalf of the Board of Directors Annual Meeting of Stockholders to be Held on May 17, 2017, 9:00 AM Central Time at the Westin Chicago Northwest Hotel, 400 Park Boulevard, Itasca, IL 60143 The undersigned stockholder(s) hereby appoint(s) Patrick S. Barrett and Nicholas J. Chulos, and each of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) each of them to represent and to vote, as designated on the reverse side of this proxy card, all shares of Common Stock of First Midwest Bancorp, Inc. held of record by the undersigned on March 24, 2017, at the 2017 Annual Meeting of Stockholders to be held on May 17, 2017 and at any adjournment or postponement thereof. The undersigned hereby further authorizes such proxies to vote in their discretion upon such other matters as may properly come before such Annual Meeting and at any adjournment or postponement thereof. Receipt of the Notice of the 2017 Annual Meeting of Stockholders, the Proxy Statement in connection with such meeting and the 2016 Annual Report to Stockholders is hereby acknowledged. This proxy, when properly executed, will be voted in the manner directed by you. If you sign and return this proxy but do not give any direction, it will be voted in accordance with the recommendations of the Board of Directors for each Proposal, and in the discretion of the proxies upon such other matters as may properly come before the Annual Meeting. If the shares represented by this proxy are issued to or held for the account of the undersigned under one of the Company's employee benefit plans, then the undersigned hereby directs the trustee to vote such shares as designated on the reverse side of this proxy card. Continued and to be signed on the reverse side V.1.114, 201520152017 Annual Meeting of Stockholders of First Midwest Bancorp, Inc., which will be held on Wednesday, May 20, 201517, 2017 at 9:00 a.m., Central time, at the Westin Chicago Northwest Hotel, 400 Park Boulevard, Itasca, Illinois 60143. Attachedyou will find a Notice setting forth the business to come before the meeting, a Proxy Statement, a Proxy Card andis a copy of our 20142016 Annual Report.canmay vote your shares via the Internet, by telephone or by mail ormail. Voting in any of these ways will not prevent you from attending the Annual Meeting. You also may vote in person by written ballot at the Annual Meeting. Please cast your vote via the Internet, by mail or by telephone as instructed on the enclosed Proxy Card. Voting in any of these ways will not prevent you from attending the Annual Meeting.Sincerely,20, 201517, 2017 at 9:00 a.m., Central time.Ÿfiveseven nominees identified in the attached Proxy Statement, each to serve for a three-year term expiring atas described in the Proxy Statement.2018 annual meetingRestated Certificate of stockholders.Incorporation, as amended, to declassify the Board of Directors.Ÿ20142016 to the Company’s named executive officers.Ÿ2015.2017.Ÿannual meeting of stockholdersAnnual Meeting only if you owned shares of First Midwest Bancorp, Inc. common stock at the close of business on March 27, 2015,24, 2017, which is the record date for the annual meeting.Annual Meeting.annual meeting of stockholders.Annual Meeting. You can vote your shares via the Internet, by telephone or by mail as instructed on the enclosed Proxy Card.mail. Voting in any of these ways will not prevent you from attending or voting your shares in person at the annual meeting.Annual Meeting. For instructions on how to vote your shares, please see the Questions and Answers section of the Proxy Statement.By Order of the Board of Directors,Nicholas J. ChulosExecutive Vice President, Corporate Secretaryand General CounselFirst Midwest Bancorp, Inc.April 14, 201520152017 Annual Meeting of Stockholders. The approximate date on which this Proxy Statement, the accompanying Proxy Card and our 20142016 Annual Report are first being sent or otherwise made available to stockholders is April 14, 2015.[12], 2017. The following is a summary of items to be voted upon at the Annual Meeting.Time and Date:20, 201517, 2017 at 9:00 a.m., Central time27, 201524, 2017
Directors Vote
RecommendationItems to be ConsideredBoard ofDirectors VoteRecommendation1fiveseven directors of the Company. The nominees are Thomas L. Brown, Phupinder S. Gill, Kathryn J. Hayley, Frank B. Modruson, Ellen A. Rudnick, Michael J. Small and Stephen C. Van Arsdell. Each nominee is currently a director of the Company, with Mr. Brown, Ms. Hayley and Messrs. Modruson and Van Arsdell having been appointed to the Board following the 2016 annual meeting of stockholders.2018. The nominees2019 and Messrs. Brown, Gill and Modruson, Ms. Rudnick and Mr. Small would be elected to the class of directors whose term expires in 2020.
Since
Directors Vote
Recommendation
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UnitedHealth Group, Inc.
Accenture plc
Adjunct Professor of Entrepreneurship
University of Chicago Booth School of Business
Gogo, Inc.
Chairman and Chief Executive Officer
Deloitte & Touche LLPBarbara A. Boigegrain, Peter J. Henseler, Patrick J. McDonnell, Robert P. O’Mearaasking our stockholders to approve and Mark G. Sander, eachadopt an amendment to our Certificate of whom is currently a directorIncorporation to declassify our Board of Directors.Company.Director Nominees Age Independent Barbara A. Boigegrain 57 2008 Yes FOR General Secretary and Chief Executive Officer of the General Board of Pension and Health Benefits of The United Methodist Church Peter J. Henseler 56 2011 Yes FOR President of Wise Consulting Group Inc. Patrick J. McDonnell 71 2002 Yes FOR President and Chief Executive Officer of The McDonnell Company LLC Robert P. O’Meara 77 1982 Yes FOR Chairman of the Board of First Midwest Bancorp, Inc. Mark G. Sander 56 2014 No FOR Senior Executive Vice President and Chief Operating Officer of First Midwest Bancorp, Inc. 20142016 to our named executive officers as disclosed in this Proxy Statement.selectionappointment of Ernst & Young LLP as our independent registered public accounting firm for 2015.TermMeaning2015By-Laws2Record DateMarch 27, 2015SEC27, 2015,24, 2017, the Record Date for the Annual Meeting. On that date, there were 78,019,992[102,404,548] shares of Common Stock outstanding, each of which is entitled to one vote for each matter to be voted on at the Annual Meeting. On the Record Date, we had 1,934[2,281] stockholders of record.signvote your shares, whether via the enclosedInternet, by telephone or by signing and mailing a Proxy Card, you will appoint certain officers of the Company to vote your shares of Common Stock at the Annual Meeting in the manner you instruct. Even if you plan to attend the Annual Meeting, you should complete, sign and returnvote your Proxy Cardshares in advance.3ensure thatvote all of your shares are voted,by proxy, please sign and returnvote the shares in each Proxy Card. If you voteaccount via the Internet or by telephone, you will need to vote foror complete, sign, date and return each Proxy Card that you receive.submitvote your Proxy Cardshares via the Internet, by mail, telephone or the Internet,by mail, your shares will be voted in accordance with your instructions. If you sign and return your Proxy Card, but do not give voting instructions, your shares will be voted in the manner recommended by the Board of Directors, as follows: FOR each director nominee named in this Proxy Statement and FOR each of the other items set forth in the Notice of Annual Meeting attached to this Proxy Statement. AIf you sign and return your Proxy Card, but do not give voting instructions, you also will grant discretionary authority to the named proxies to vote pursuant to the Proxy Card on any other matters that may properly come before the Annual Meeting, or any adjournment or postponement, which will be voted in accordance with the best judgment of the named proxies. on routine matters in accordance with your instructions and, if no instructions are given, your broker is entitled to vote your shares in its discretion. On non-routine matters, your broker will vote your shares only if you have provided the broker with voting instructions. If you do not give your broker voting instructions for non-routine items, your shares will be treated as “broker non-votes.” This means your shares will be counted for the purpose of determining if a quorum is present but, except as provided below, will not be included as votes cast with respect to the non-routine items. The determination of whether a matter is routine or non-routine is made under the rules of the NASDAQ Stock Market. An abstention occurs when a stockholder marks his or her Proxy Card as ABSTAIN and thereby abstains from voting on a matter.abstentionsbroker non-votes and broker non-votes.ItemTypeEffect of Abstentions andBroker Non-VotesItem.item. Votes to ABSTAIN are treated as “votes cast” and will have the effect of a vote AGAINST this Item.item.Item.item. Votes to ABSTAIN are treated as “votes cast” and will have the effect of a vote AGAINST this Item.item.4Directors. Directors.You may vote FOR or AGAINST any or all director nominees named in this Proxy Statement, or you may ABSTAIN as to one or more directors. A majority of the votes cast at the Annual Meeting with respect to the election of a director must be voted FOR the director in order for the director to be elected. AIf a director who currently serves on the Board of Directors fails to receive a majority of the votes cast FOR his or her election, he or she will tender his or her resignation to the Board of Directors for consideration, and our Nominating and Corporate Governance Committee will recommend to the Board of Directors whether to accept or reject the resignation, or whether other action should be taken. The Board of Directors will consider the recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results.20142016 to the Company’s Named Executive Officers. Officers.You may vote FOR or AGAINST the advisory resolution regarding the compensation paid to our named executive officers, or you may ABSTAIN. A majority of the votes castpresent in person or represented by proxy and entitled to vote at the Annual Meeting must be voted FOR this Itemitem in order for it to pass.3—5—Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm. Firm.You may vote FOR or AGAINST the ratification of our Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2015,2017, or you may ABSTAIN. A majority of the votes castpresent in person or represented by proxy and entitled to vote at the Annual Meeting must be voted FOR ratification in order for this Itemitem to pass.By Internet. The web address for Internet voting can be found on the enclosed Proxy Card. Internet voting is available 24 hours a day. To be valid, your vote by Internet must be received by the deadline specified on the Proxy Card.By Telephone. The number for telephone voting can be found on the enclosed Proxy Card. Telephone voting is available 24 hours a day. To be valid, your vote by telephone must be received by the deadline specified on the Proxy Card.By Mail. Mark the enclosed Proxy Card, sign and date it, and return it in the postage pre-paid envelope we have provided. To be valid, your vote by mail must be received by the deadline specified on the Proxy Card.At the Annual Meeting. You can vote your shares in person at the Annual Meeting. You must present an acceptable form of identification (such as a valid driver’s license) in order to vote at the meeting.5my Proxy Card or change my vote? your Proxy Card or change your vote at any time before your Proxy Card isshares are voted at the Annual Meeting by:630-875-7463;(630) 875-7463; or20152017 ANNUAL MEETING OF STOCKHOLDERS AND PROXY VOTE. or employees or affiliates telephonically, electronically or by other means of communication. Directors, officers and employees will receive no additional compensation for any such solicitation. Although we do not anticipate using a paid proxy solicitor in connection with the Annual Meeting, we may do so if we believe this to be appropriate. We will reimburse brokers for costs incurred by them in mailing proxy materials to beneficial owners in accordance with applicable requirements.6Additional InformationYou may obtain additional information regarding If you attend the Company, including our corporate governance policiesAnnual Meeting as a representative of a stockholder that is an entity, then you must bring proof of your authorization to attend and practices, by visiting our website at act on behalf of that entity.www.firstmidwest.com/investorrelations, or by makingIs a written request to our Corporate Secretary at First Midwest Bancorp, Inc., One Pierce Place, Suite 1500, Itasca, Illinois 60143.list of stockholders available for inspection?8, 20155, 2017 to May 19, 2015,16, 2017, as well as at the Annual Meeting.Important Notice RegardingAvailability of Proxy Materials forvoting results?MeetingMeeting. Final voting results are expected to be published in a Current Report on May 20, 2015Annual Report forwebsite at www.firstmidwest.com/investorrelations after its filing with the year ended December 31, 2014 is enclosed with this Proxy Statement. The Notice of Annual Meeting of Stockholders, this Proxy Statement and our 2014 Annual Report are available at SEC.www.proxyvote.com (if you utilize www.proxyvote.com, you will need the control number included on your Proxy Card or voting instruction form). If you would like to receive, without charge, an additional paper copy of our Annual Report, please contact our Corporate Secretary at First Midwest Bancorp, Inc., One Pierce Place, Suite 1500, Itasca, Illinois 60143.7Nominees for Election13sixteen directors, and isbut will be reduced to fifteen members as described below. Historically, the Board has been divided into three classes, with each classdirector serving for a three-year terms. As a result,term. At each year,annual meeting, only one class of directors stands for election. This year, as described more fully under Item 2—Approval and Adoption of an Amendment to the Company’s Certificate of Incorporation to Declassify the Board of Directors, we are seeking to amend our Certificate of Incorporation to provide that directors will be elected to one-year terms on a go-forward basis, beginning with the nominees standing for election at ourthis Annual Meeting. unanimous recommendation of our Nominating and Corporate Governance Committee, our Board of Directors unanimously nominated BarbaraThomas L. Brown, Phupinder S. Gill, Kathryn J. Hayley, Frank B. Modruson, Ellen A. Boigegrain, PeterRudnick, Michael J. Henseler, Patrick J. McDonnell, Robert P. O’MearaSmall and Mark G. SanderStephen C. Van Arsdell to stand for election at thethis year’s Annual Meeting, all of whom are currently serving as directors of the Company.If Mr. Gill, Ms. Rudnick and Mr. Small presently serve in the class of directors who were last elected in 2014 and whose term expires at the Annual Meeting. Mr. Brown, Ms. Hayley and Messrs. Modruson and Van Arsdell were appointed to the Board over the course of the last year and have not yet been placed in a class. Each of the nominees meets the standards of independence under our Corporate Governance Guidelines and the rules of the NASDAQ Stock Market.three-year term expiring at our annual meeting of stockholders in 2018as follows and until his or her successor has been elected and qualified.qualified:
Declassification of
Board is Approved
Declassification of
Board is not Approvedhe or shethe nominee will tender his or her resignation as ainon the Proxy Card will vote for the election of such other person as the Board of Directors may recommend.The Board of Directors has not adopted a formal diversity policy for nominees. however, the Nominating and Corporate Governance Committee attempts to include directors who, when taken together with the other nominees and continuing directors, will create a group that offers a diversity of education, professional experience, background, age, gender or minority status, perspective, viewpoints and skill.skills. The Nominating and Corporate Governance Committee will consider and evaluate director candidates recommended by stockholders in the same manner as other candidates identified by the Committee. A stockholder who desires to formally nominate a candidate must do so by following the procedures described in the Company’s Certificate of Incorporation and By-Laws, as amended from time to time.Independence of Nominees and Non-Employee DirectorsOur Board of Directors determines the independence of all non-employee directors in accordance with the independence requirements of the NASDAQ Stock Market rules. Accordingly, each year the Board affirmatively8determines whether each non-employee director has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Annually, each non-employee director is required to complete a questionnaire that provides information about relationships that might affect the determination of independence. Management then provides the Nominating and Corporate Governance Committee and Board of Directors with relevant facts and circumstances of any relationship bearing on the independence of a director or nominee that are outside the categories permitted under the NASDAQ Stock Market rules.Based on the review and recommendation by the Nominating and Corporate Governance Committee, the Board of Directors analyzed the independence of each of the Company’s nominees and other current directors, and determined that all of our directors meet the standards of independence under our Corporate Governance Guidelines and the NASDAQ Stock Market rules, other than Michael L. Scudder, the Company’s President and Chief Executive Officer, and Mark G. Sander, the Company’s Senior Executive Vice President and Chief Operating Officer, who are not considered to be independent under the standards of our Corporate Governance Guidelines and the NASDAQ Stock Market rules. In addition, our Board of Directors determined that:Each member of the Audit Committee is financially literate and has accounting or related financial management expertise (as such qualifications are defined under the NASDAQ Stock Market rules).Patrick J. McDonnell and John F. Chlebowski, Jr. are “audit committee financial experts” within the meaning of the rules and regulations of the SEC.Each member of the Compensation Committee is a “non-employee director” within the meaning of SEC Rule 16b-3, and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code.2015By-Laws.Barbara A. Boigegrain·. Ms. Boigegrain’s extensive employee benefits, senior leadership and corporate governance experience.Thomas L. BrownPeter J. Henseler. – Mr. Henseler’s experience as a former president of a global public company, as well as his substantial operational, brand management and marketing expertise.Patrick J. McDonnell. Mr. McDonnell’sBrown’s significant finance and accounting background, including his experience as a seniormember of executive management of a public company.at PricewaterhouseCoopers LLP and his broad experience within a variety of public companies.Big 4 accounting firm.Robert P. O’Meara·.Frank B. Modruson – Mr. O’Meara’sModruson’s extensive background in technology and operations management, significant strategic and risk management experience in banking,and service on other public company boards.decision-making,operating and management experience gained as the current chief executive officer of a public company.in-depth knowledgeextensive leadership and strategic skills and experience with public companies, developed as a former partner and chief executive officer of both the history and the current business of the Company.a Big 4 accounting firm.Mark G. Sander. Mr. Sander’s significant banking industry and executive experience, his important leadership position with the Company and First Midwest Bank and his involvement with the operations, vision and strategy of the Company and the Bank.9Barbara A. Boigegrain (57)Ms. Boigegrain has served as the General Secretary and Chief Executive Officer of the General Board of Pension and Health Benefits of The United Methodist Church since 1994 (a pension, health and welfare benefit trustee and administrator that is the largest faith-based pension fund in the United States with $21 billion of assets under management). Prior to 1994, Ms. Boigegrain spent 11 years as a consultant with Towers Perrin and 4 years with KPMG LLP and Dart Industries as a manager and analyst.Director since 2008As the CEO and General Secretary of the General Board, Ms. Boigegrain has overseen its restructuring, significantly improved its performance and services and increased its assets under management. In her experience as a benefits consultant, she established the San Diego office of Towers Perrin. Ms. Boigegrain also is a member of the board of directors of Church Benefits Association and Chair of the Church Alliance.Ms. Boigegrain is a member of our Compensation Committee.Ms. Boigegrain earned a Bachelor of Science degree in Biology and Psychology from Trinity University in 1979.Peter J. Henseler (56)Mr. Henseler is the founder and President of Wise Consulting Group Inc. (a strategy and management consulting firm). He previously held the position of Vice Chairman of TOMY International, a wholly-owned subsidiary of TOMY Company, Ltd. (a global designer and marketer of toys and infant products) until his retirement from TOMY International in October 2012. He held the position of President of TOMY International from April 2011 until April 2012. Mr. Henseler was President of RC2 Corporation from 2002 to 2011, at which time TOMY Company acquired RC2. He served as RC2’s Executive Vice President of Sales and Marketing from 1999 to 2002. Mr. Henseler has also served as a director of RC2 and TOMY International.Director since 2011Prior to joining RC2, Mr. Henseler held marketing positions at McDonald’s Corporation and Hasbro, Inc. He currently serves on the United States Toy Industry Association Board of Directors and is Chairman of the Toy Industry Foundation.Mr. Henseler is a member of our Compensation Committee.Mr. Henseler earned a Bachelor of Science degree in Marketing from Xavier University in 1980.10Patrick J. McDonnell (71)Since July 2000, Mr. McDonnell has served as the President and Chief Executive Officer of The McDonnell Company LLC (a business consulting company). In this position, he works with public and privately-held companies in a wide variety of industries to help define organizational opportunities to improve performance and achieve results. Previously, he served as a partner and Director of Global Assurance for PricewaterhouseCoopers LLP, an international public accounting firm, and Vice Chairman of Business Assurance for its predecessor, Coopers & Lybrand, LLP. Mr. McDonnell is a certified public accountant.Director since 2002Mr. McDonnell served as a member of the board of directors of Material Sciences Corporation from 2006 to 2014. He also served as President and COO of LAI Worldwide, Inc., an executive recruiting firm, prior to its sale to TMP Worldwide, Inc. in 1999. He is a former Adjunct Professor at the Lake Forest Graduate School of Management where he taught Leading Organizational Change.Mr. McDonnell is a member of our Audit Committee (serving as its Chair), Nominating and Corporate Governance Committee and Advisory Committee.Mr. McDonnell earned a Bachelor of Business Administration degree with a major in Management from the University of Notre Dame in 1965 and a Master of Business Administration from the University of Michigan in 1970.Robert P. O’Meara (77)Mr. O’Meara is currently the Chairman of the Board of the Company. He has over 40 years of experience in the banking and financial services industry. Mr. O’Meara previously served as Chairman of the Board of the Company from 1998 through 2007 and was re-appointed to this position in September 2008. Mr. O’Meara also is a member of the Board of Directors of First Midwest Bank and previously served as Chairman of the Board of the Bank from 2008 through 2011, and Vice Chair from 2011 through 2014.Director since 1982Mr. O’Meara served as the Company’s Chief Executive Officer from 1987 through 2002 and as its Chief Operating Officer from 1983 to 1987. Prior to his tenure with the Company, Mr. O’Meara served as President and Chief Executive Officer of Citizens National Bank of Waukegan from 1970 to 1983. Prior thereto, he was in private legal practice in Lake County, Illinois, and he remains a licensed lawyer in the State of Illinois. Mr. O’Meara also has served in various leadership positions with several civic and charitable organizations in the metropolitan Chicago area.Mr. O’Meara serves as a member and the Chair of the Advisory Committee but is not a member of any other Board committee.Mr. O’Meara earned a Bachelor of Science degree in Finance from the University of Notre Dame in 1959 and a Juris Doctor degree from Loyola University of Chicago in 1962.Mark G. Sander (56)Mr. Sander is the Senior Executive Vice President and Chief Operating Officer of the Company and the President and Chief Operating Officer of First Midwest Bank. Mr. Sander also serves as a director of First Midwest Bank.Director since 201411Prior to joining the Company in 2011, Mr. Sander served as Executive Vice President, Director of Commercial Banking at Associated Banc-Corp where he oversaw Associated’s commercial banking, treasury management, insurance brokerage and capital markets businesses. He also served as a member of Associated’s Executive and ALCO Committees. Previously, he served as a commercial banking executive at Bank of America and in numerous leadership positions in commercial banking at LaSalle Bank. Mr. Sander has more than 30 years of experience in the financial services industry.Mr. Sander earned a Bachelor of Science degree in Finance from the University of Illinois in 1980 and a Master of Business Administration with a concentration in Finance and International Economics from the University of Chicago in 1983.2016Br. James Gaffney, FSC (72)Br. Gaffney has served as the President of Lewis University (a leading Catholic and Lasallian university) in Romeoville, Illinois since 1988.Director since 1998Br. Gaffney serves as a director, trustee or board member of more than 10 educational, religious, civic, corporate and community organizations and agencies. As a member and former chair of the Federation of Independent Illinois Colleges and Universities, he serves on the Executive Council of Chicago Metropolis Strategies. He is the Chairman of the Will County Community Foundation, and is an active board member for the Will County Center for Economic Development. As a member of the De La Salle Christian Brothers, he chairs the Lasallian Association of College and University Presidents.Br. Gaffney has been the recipient of numerous honors, including the Pro Ecclesiae et Pontifice Medallion from the Vatican in 2013, the Roger Osman Award for Distinguished Volunteer Service from the United Way of Will County, a Lifetime Achievement Award from the Joliet Region Chamber of Commerce and Industry, the De La Salle Award from Bethlehem University, the Provena St. Joseph Medical Center Founder’s Award, the Saint Patrick High School President’s Council Counsellor II Award, and honorary Doctoral Degrees from Saint Mary’s University of Minnesota and Bethlehem University.Br. Gaffney is a member of our Nominating and Corporate Governance, Compensation Committee and Advisory Committee. The Board intends to appoint Mr. McDonnell, upon formation, to the Enterprise Risk Committee in May 2017.Br. Gaffney obtained a Bachelor of Arts degree in Theology and a Master of Education from Saint Mary’s University of Minnesota, a Master of Theology from Manhattan College in New York and a Doctor of Ministry in Pastoral Theology from the University of Saint Mary of the Lake in Mundelein, Illinois.Br. Gaffney’s extensive background in executive administration enables him to bring valuable leadership, institutional management and consensus-building skills to our Board of Directors. His civic and charitable activities in the metropolitan Chicago area also give him unique insight into the markets and communities in which the Company operates.12Michael L. Scudder (54)Mr. Scudder is the President and Chief Executive Officer of the Company and Chairman of the Board and Chief Executive Officer of First Midwest Bank.Director since 2008Prior to his current appointment in September 2008, Mr. Scudder served as the Company’s President and Chief Operating Officer beginning in May 2007, and as its Chief Financial Officer from January 2002 to May 2007. He previously served as the Group Executive Vice President and Chief Financial Officer of First Midwest Bank from May 1995 to December 2001. He also has served in various other management capacities in his over 25 years of service to the Company. Mr. Scudder began his professional career at KPMG LLP, an international public accounting firm. He is a certified public accountant.Mr. Scudder serves as a member of our Advisory Committee but is not a member of any other Board committee.Mr. Scudder earned a Bachelor of Science degree in Accounting from Illinois Wesleyan University in 1982, and a Master of Business Administration with a concentration in Finance from DePaul University in 1993.Mr. Scudder brings extensive executive management, financial and banking experience to our Board of Directors and has important institutional knowledge of the Company and its business and clients. His day-to-day management of the Company provides the Board with Company-specific experience and expertise, including a complete understanding of the Company’s vision and strategy.John L. Sterling (71)Mr. Sterling has been a director of Sterling Lumber Company (a hardwood lumber supplier and distributor) headquartered in Phoenix, Illinois for over 46 years.Director since 1998Mr. Sterling earned a Bachelor of Science degree in Business Administration from Michigan State University in 1967. He serves in various leadership positions with several civic and charitable organizations in the Chicago metropolitan area, including the Boy Scouts of America, and he is the recipient of their council’s highest award.Mr. Sterling is a member of our Compensation Committee.Mr. Sterling’s extensive background as a business owner allows him to bring valuable leadership, business development, customer service and strategic management experience to our Board. His business, civic and charitable activities in the metropolitan Chicago area also give him unique insight into the markets and communities in which the Company operates.J. Stephen Vanderwoude (71)Mr. Vanderwoude is currently a private investor. From 1996 until April 2007, he served as Chairman and Chief Executive Officer of Madison River Communications Corp., a company that acquired and operated rural telephone companies. Prior to his service to Madison River, he served as the President, Chief Executive Officer and a director of Powerhouse Technologies, Inc., and President, Chief Operating Officer and a director of Centel Corporation. From 1999 to 2009, Mr. Vanderwoude served as a member of the board of directors of Centennial Communications Corp. and as its Chairman from 2007 to 2009.Director since 199113Mr. Vanderwoude earned a Bachelor of Science degree in Engineering from the University of Pennsylvania in 1967 and a Master of Business Administration with concentrations in Economics and Marketing from the University of Chicago in 1977.Mr. Vanderwoude is a member of our Compensation Committee (serving as its Chair), Nominating and Corporate Governance Committee and Advisory Committee.Through his chief executive officer and director experience at other public companies, professional background and considerable business accomplishments and achievements, Mr. Vanderwoude brings valuable skills and experience in leadership, business management, strategic planning, finance, mergers and acquisitions and public company matters to our Board of Directors.2017John F. Chlebowski, Jr. (69)Mr. Chlebowski served as the President and Chief Executive Officer of Lakeshore Operating Partners, LLC (a bulk liquid distribution firm) from March 2000 until his retirement in December 2004. Previously, Mr. Chlebowski was a senior executive and co-founder of Lakeshore Liquids Operating Partners, LLC, a private venture firm, and from January until July 1999, he was a private investor and consultant in bulk liquid distribution. Mr. Chlebowski served as President and Chief Executive Officer of GATX Terminals Corporation, a subsidiary of GATX Corporation, from 1994 until 1998. He also served as Vice President of Finance and Chief Financial Officer of GATX Corporation, a specialized finance and leasing company, from 1986 to 1994.Director since 2007Mr. Chlebowski is the Chairman of the Board of SemGroup Corporation (since 2009) and is a member of the board of directors and Lead Independentof NRG Yield, Inc. (since 2013). He is a former Board member of NRG Energy, Inc. (2003 to 2013), Laidlaw International, Inc. (2003 to 2007), Phosphate Resource Partners LP (2003 to 2004) and SpectraSite, Inc. (2004 to 2005).since: 2008Mr. Chlebowski is a member of our Audit Committee and Advisory Committee.Mr. Chlebowski earned a Bachelor of Science degree in Business Administration from the University of Delaware in 1970 and a Master of Business Administration with a concentration in Finance (Beta Gamma Sigma) from Pennsylvania State University in 1971. He is active in community affairs and is the past President of the board of directors of Heartland Alliance. He has also served on the boards of the Chicago Heart Association, Chicago City Ballet and Merit Music Program.Through his board and executive management experience and extensive professional background, Mr. Chlebowski brings important public company, leadership, business, risk management, finance and accounting experience to our Board of Directors, as well as valuable experience and perspective relating to corporate strategy and board governance.14Phupinder S. Gill (54)Mr. Gill is the Chief Executive Officer of CME Group Inc. (a global derivatives marketplace and exchange). He served as President from 2007 until 2012, and previously served as President and Chief Operating Officer of CME Holdings and of CME from 2004 until 2007. From 2000 to 2003, he served as Managing Director and President of CME Clearing. Mr. Gill was the President of GFX Corp., a wholly owned subsidiary of CME Group that provides liquidity in foreign exchange futures, from 1998 until 2012.Director since 2010Mr. Gill serves on the board of directors of CME Group as well as the board of the World Federation of Exchanges. Mr. Gill is a member of CME Group’s Competitive Markets Advisory Council and sits on the boards of The Alexander Maxwell Grant Foundation, CME Group Foundation and CME Group Community Foundation. He previously served on the boards of CME Clearing Europe (CME Group’s UK Clearing House), Bursa Malaysia Derivatives Berhad, and Bolsa Mexicana de Valores, S.A.B. de C.V.Mr. Gill is a member of our Audit Committee.Mr. Gill earned a Bachelor of Science degree in Finance in 1985 and a Master of Business Administration with a concentration in Finance in 1987 from Washington State University.Through his board and executive management experience, Mr. Gill brings important public company, technology, leadership, operating and senior management experience to our Board of Directors, as well as experience with mergers and acquisitions and global affairs. He also provides the perspective of a current chief executive officer of a public company.Ellen A. Rudnick (64)Since 1999, Ms. Rudnick has served as the Executive Director of the Polsky Center for Entrepreneurship and Innovation at the University of Chicago Booth School of Business. Prior to joining the University of Chicago, Ms. Rudnick served as President and CEO of Healthcare Knowledge Resources, President of HCIA, Chairman of Pacific Biometrics and Corporate Vice President of Baxter Healthcare Corporation.Director since 2005Ms. Rudnick currently serves on the boards of directors of Patterson Companies (since 2003) and HMS Holdings, Corp. (since 1997), both of which are public companies, and Liberty Mutual Insurance Company (since 2001).Ms. Rudnick is a member of our Audit Committee, Nominating and Corporate Governance Committee and Advisory Committee.15Ms. Rudnick earned a Bachelor of Arts degree in Italian (with a minor in Economics) from Vassar College in 1972 and a Master of Business Administration with a concentration in Finance from the University of Chicago in 1973. She has spent over 25 years in business management and entrepreneurial activities, primarily in the health care and information services industries. She serves in various leadership positions with several civic and nonprofit organizations in the Chicago metropolitan area, including having served on the Northshore University Health System board of directors for over 20 years, and currently is on the boards of directors of Hyde Park Angels and CEC-Chicagoland Entrepreneurship Center. She is the recipient of several honors, including the Today’s Chicago Woman 20th Anniversary Hall of Fame Award and the YWCA Leadership Award.With her extensive business background and her public company board experience, Ms. Rudnick brings important leadership, corporate and entrepreneurial experience to our Board of Directors, as well as valuable experience in business management.Michael J. Small (57)Mr. Small is the President and Chief Executive Officer of Gogo, Inc. (an airborne communications service provider) and has served in this capacity since 2010. Prior to joining Gogo, Mr. Small served as the Chief Executive Officer and Director of Centennial Communications Corp. from 1999 to 2009. From 1995 to 1998, Mr. Small was the Executive Vice President and Chief Financial Officer of 360 Degrees Communications Company. Prior to 1995, he held the position of President of Lynch Corporation, a diversified acquisition-oriented company with operations in telecommunications, manufacturing and transportation services.Director since 2010Mr. Small is a member of our Audit Committee and Nominating and Corporate Governance Committee.Mr. Small earned a Bachelor of Arts degree in History from Colgate University in 1979 and a Master of Business Administration with a concentration in Finance from the University of Chicago in 1981.Through his board, executive and financial experience, Mr. Small brings extensive public company, operating and management experience to our Board of Directors as well as strategic, financial and merger and acquisition experience. He also provides the perspective of a current chief executive officer of a public company.BarbaraThomas L. Brown, Phupinder S. Gill, Kathryn J. Hayley, Frank B. Modruson, Ellen A. Boigegrain, PeterRudnick, Michael J. Henseler, Patrick J. McDonnell, Robert P. O’MearaSmall and Mark G. SanderStephen C. Van Arsdell as directors of the Company as set forth above.1620142016 TO THE COMPANY’S NAMED EXECUTIVE OFFICERS2014,2016, are described in the Compensation Discussion and Analysis and Executive Compensation Tables sections of this Proxy Statement, which begin on pages 29 and 43, respectively.Statement.20142016 annual meeting of stockholders, approximately 93% of the votes cast were voted in favor of the compensation paid to our named executive officers. We believe these results confirmed our approach to executive compensation. Our Compensation Committee intends to consider the say-on-pay vote results from this year, and future advisory votes, with respect to the design of and amounts paid under our executive compensation programs.20152017 annual meeting proxy statement, is hereby approved by the Company’s stockholders on an advisory basis.173—5—RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM2015.2017. We are submitting this selection for stockholder ratification at the Annual Meeting. We expect a representative of Ernst & Young LLP to be present at the Annual Meeting and to have an opportunity to make a statement if he or she desires to do so and to be available to respond to appropriate questions from stockholders. Ernst & Young LLP also served as our independent registered public accounting firm for the year ended December 31, 2014.TheThis ratification of the selection of our independent registered public accounting firm is advisory and is, therefore, not binding on the Audit Committee. If our stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Ernst & Young LLP, but may retain them nonetheless. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of the Company. 2014 2013 $ 1,425,656 100% $ 1,232,231 100% 134,840 100% 135,388 100% 215,950 100% 203,975 100% All other fees — N/A — N/A Total fees $ 1,776,446 $ 1,571,594
2016 Services
Approved by
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2015 Services
Approved by
Audit
Committee(1)Includes fees and expenses for the audit of the Company’s annual financial statements, internal control over financial reporting and review of financial statements included in the Company’s quarterly reports filed with the SEC and other services normally provided by an independent auditor in connection with statutory and regulatory filings or engagements.(2)Includes $182,600 attributable to work performed by Ernst & Young LLP for the Company’s annual audit related to the Company’s three acquisitions completed in 2014.(3)Includes fees related to the audits of the Company’s benefit plans.(4)Includes fees related to assistance with routine audits and tax planning, consulting and compliance services.182015.Market rules.Market. Annually, all employees are required to certify that they have reviewed and are familiar with the Code of Ethics and Standards of Conduct, and all officers are required to certify compliance with this code. Waivers of the Code of Ethics and Standards of Conduct for executive officers are required to be disclosed to the Chair of the Nominating and Corporate Governance Committee of the Board. Similarly, our senior financial officers must certify annually that they have reviewed, are familiar with and are in compliance with the Code of Ethics for Senior Financial Officers. Waivers of the Code of Ethics for Senior Financial Officers must be submitted to and approved by the Board.theour Corporate Governance Guidelines, our Board of Directors does not have a fixed policy regarding the separation of the offices of Chairman and Chief Executive Officer and believes that it should maintain the flexibility to select the Chairman and its Board leadership structure, from time to time,time-to-time, based on the criteria that it deems to be in the best interests of the Company and its stockholders.19interest rate,market, liquidity, operational, strategic, cybercompliance, legal and reputation risks, as well as risks related to general economic conditions. We do not view risk in isolation, but rather consider risk as part of our ongoing consideration of business strategy and business decisions.Boardboard of Directors.directors. Each of the Board’s committees is chaired by an independent director and supports the Board’s oversight functions by regularly addressing various risks in their respective areas of oversight.Meetingsregularly scheduledregular quarterly meetings and special meetings as needed. In 2014,2016, the Board held four regularly scheduled meetings and twofour special meetings. Our directors also communicate with each other between meetings. Further, the Board of Directors devotes additional time outside of its regular meetings to presentations and discussions with senior management about the Company’s long-term strategy, corporate objectives and initiatives and financial operating plans, which are then discussed further at the Board’s quarterly meetings.20AllOther than Mr. Brown, Ms. Hayley and Messrs. Modruson and Van Arsdell, each of whom joined the Board after our last annual meeting of stockholders, and Ms. Boigegrain, all of our current directors, including the current nominees for director, attended last year’s annual meetingmeeting. Eight of stockholders. Each directorour directors attended at least 75%100% of the total number of meetings of the Board of Directors and Board committees on which he or she served during 2014.Market rules.Market. The Board has also established an Advisory Committee for the purpose of providing general advice to management with respect to general business matters as needed between regular meetings of the Board.20142016 fiscal year.Name Advisory Audit Compensation Barbara A. Boigegrain ü John F. Chlebowski Jr. ü ü Br. James Gaffney ü ü Phupinder S. Gill ü Peter J. Henseler ü Patrick J. McDonnell ü ü Robert P. O’Meara Ellen A. Rudnick ü ü ü Mark G. Sander Michael L. Scudder ü Michael J. Small ü ü John L. Sterling ü J. Stephen Vanderwoude ü ü Total committee meetings in fiscal year 2014 2 8 5 4
Corporate Governance
Risk(1)*Designates Chair of this Committee.Advisory Committee. The primary responsibility of the Advisory Committee is to advise and consult with management with respect to general business matters as needed between regular meetings of the Board of Directors.21Reviewing and monitoring the Company’s incentive and other compensation programs.for Board membership.222014,2016, First Midwest Bank engaged in transactions in the ordinary course of business with some of our executive officers, directors and entities with which they are associated. These transactions involved loans and other banking services that were in the ordinary course of business and on substantially the same terms, including current interest rates and collateral, as those prevailing at the time for comparable transactions with others not related to the Company and did not involve more than the normal risk of collectability or present other unfavorable features. or group, including our independent directors as a group, by submitting written correspondence to First Midwest Bancorp, Inc., Attn: Board of Directors,Corporate Secretary, One Pierce Place, Suite 1500, Itasca, Illinois 60143. Each communication should specify the applicable addressee(s) to be contacted as well as the general topic of the communication. The Company will initially receive and process communications before forwarding them to the addressee(s). Communications also may be referred to other departments within the Company. The Company generally will not forward to the directors a stockholder communication that involves routine business matters of the Company or First Midwest Bank, an irrelevant topic or a request for general information about the Company. MattersChief Risk OfficerAudit Services Director at First Midwest Bancorp, Inc., One Pierce Place, Suite 1500, Itasca, Illinois 60143.231, 2015,24, 2017, information about the beneficial ownership of our Common Stock by all directors, our named executive officers and our directors and all executive officers as a group. Unless indicated in the notes to the table,Except as described below, each stockholder has sole voting and investment power for all shares shown, subject to applicable community property laws that may apply to create shared voting and investment power. Moreover,shown. In addition, unless otherwise indicated, the address of each beneficial owner is c/o First Midwest Bancorp, Inc., One Pierce Place, Suite 1500, Itasca, Illinois 60143.78,021,053[102,404,548] shares of Common Stock outstanding on March 1, 2015.24, 2017. We include shares of restricted stock subject to future vesting conditions for which an individual has voting but not dispositive power. We also include shares underlying restricted stock units and performance shares that could vest, and shares subject to options that are currently exercisable or will become exercisable, within 60 days of March 1, 2015.24, 2017, even though an individual has neither voting nor dispositive power. Those shares are deemed to be outstanding and beneficially owned by the person holding such optionssecurities for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
Shares/Units(1)(2)(3)(4)
ClassBeneficial Owner Percent of Class Directors Barbara A. Boigegrain 24,168 * John F. Chlebowski, Jr. 27,979 * 9,384 * Phupinder S. Gill 29,339 * Peter J. Henseler 14,463 * Patrick J. McDonnell 36,179 * Robert P. O’Meara 519,767 * Ellen A. Rudnick 37,046 * Mark G. Sander 188,725 * Michael L. Scudder 356,108 * Michael J. Small 20,129 * John L. Sterling 120,847 * J. Stephen Vanderwoude 83,333 * Named Executive Officers (other than Messrs. Sander and Scudder) Paul F. Clemens 94,949 * Victor P. Carapella 207,035 * Thomas M. Prame 38,498 * All directors and executive officers (including named executive officers) as a group 2,235,322 2.85% *Less than 1%.(1)1, 2015: John F. Chlebowski, Jr., 6,586 shares; Br. James Gaffney, 9,286 shares; Patrick J. McDonnell, 9,286 shares; Robert P. O’Meara, 9,174 shares; Ellen A. Rudnick, 10,653 shares; John L. Sterling, 9,286 shares; J. Stephen Vanderwoude, 9,286 shares; Michael L. Scudder, 63,548 shares; Mark G. Sander, 42,328 shares; Paul F. Clemens, 24,746 shares; and Victor P. Carapella, 40,651 shares.(2)Some of our directors and officers have deferred cash compensation (in the form of phantom Common Stock) or stock option gains (in the form of Common Stock equivalents) under our deferred compensation plans. Some of these deferred amounts will be paid in
2017: John F. Chlebowski, Jr., 6,586 shares; Br. James Gaffney, 3,740 shares; Patrick J. McDonnell, 3,740 shares; Robert P. O’Meara, 3,740 shares; Ellen A. Rudnick, 3,740 shares; J. Stephen Vanderwoude, 3,740 shares; Michael L. Scudder, 25,019 shares; Mark G. Sander, 42,328 shares; and Paul F. Clemens, 18,464 shares.directors’director’s or officers’officer’s retirement or other termination of employment or service with the Company. The number of shares of Common Stock to which our directors and officers would be entitled had their employmentservice or serviceemployment with the Company terminated as of March 1, 201524, 2017 is as follows: Phupinder S. Gill, 14,21020,610 shares; Peter J. Henseler, 1,4511,825 shares; J. Stephen Vanderwoude, 19,16019,908 shares; Michael L. Scudder, 9,2459,608 shares; Paul F. Clemens, 1,939 shares; Victor P. Carapella, 50,8712,014 shares; and Thomas M. Prame, 1,9302,006 shares. The directors and officers have voting and investment power for the shares of phantom Common Stock and voting power but no dispositive power for the Common Stock equivalent shares.(3)Includes the following shares of Common Stock held through the Company’s 401(k) Plan: Michael L. Scudder, 7,959 shares; Mark G. Sander, 346 shares; Paul F. Clemens, 1,099 shares; Victor P. Carapella, 26,472 shares; and Thomas M. Prame, 79 shares.(4)Includes the following shares of restricted stock subject to future vesting conditions for which the individual has voting but not dispositive power: Michael L. Scudder, 84,744 shares; Mark G. Sander, 61,385 shares; Paul F. Clemens, 14,795 shares; and Thomas M. Prame, 27,103 shares. For Victor P. Carapella, also includes 29,043 restricted stock units that could vest within 60 days after March 1, 2015 under the terms of the applicable award agreements.(5)Includes 98 shares of Common Stock owned by Lewis University to which Br. James Gaffney disclaims beneficial ownership.(6)Includes: 70,814 shares of Common Stock held in our 401(k) Plan for the accounts of certain executive officers; 292,720 shares of restricted stock and 29,043 restricted stock units which are subject to future vesting conditions; 131,600 shares of Common Stock payable to certain directors and executive officers pursuant to our deferred compensation plans; and 343,008 shares of Common Stock subject to options exercisable within 60 days after March 1, 2015.1, 201524, 2017 to beneficially own more than 5% of our outstanding Common Stock.
Boston, MA 02210Name and Address of Beneficial Owner Number of Shares 6,454,522 8.6 % 5,045,147 6.7 % 4,901,190 6.5 % 4,263,146 5.7%
Boston, MA 02210 (1)This information is based solely on a Schedule 13G/A filed with the SEC on January 22, 2015 by BlackRock, Inc., which reported sole voting power as to 6,278,572 shares and sole dispositive power as to 6,454,522 shares as of December 31, 2014.(2)This information is based solely on a Schedule 13G/A filed with the SEC on February 5, 2015 by Dimensional Fund Advisors LP, which reported sole voting power as to 4,813,414 shares and sole dispositive power as to 5,045,147 shares as of December 31, 2014. Dimensional Fund Advisors LP and its subsidiaries disclaim beneficial ownership of all securities reported on the Schedule 13G/A.(3)This information is based solely on a Schedule 13G/A filed with the SEC on February 10, 2015 by The Vanguard Group, which reported sole voting power as to 108,305 shares, sole dispositive power as to 4,799,285 shares and shared dispositive power as to 101,905 shares as of December 31, 2014.(4)This information is based solely on a Schedule 13G/A filed with the SEC on February 12, 2015 by Wellington Management Group LLP, which reported shared voting power as to 3,247,920 shares and shared dispositive power as to 4,263,146 shares as of December 31, 2014.25TableContentseach of WMG, Wellington Group Holdings LLP (“WGH”), Wellington Investment Advisors Holdings LLP (“WIAH”) and Wellington Management Company LLP (“WMC”). The Schedule 13G/A reported that each of WMG, WGH and WIAH shared voting power as to 3,626,579 shares and shared dispositive power as to 4,742,504 shares, and WMC shared voting power as to 3,605,369 shares and shared dispositive power as to 4,721,294 shares, as of December 30, 2016.2014 fiscal year:2014 Cash Component 2014 Equity Component Description Amount An annual fixed retainer for each non-employee director $ 40,000 The aggregate dollar value of the equity component of our non-employee director compensation was $42,000 for each director. The number of shares issued was calculated by taking that dollar value and then dividing by $16.078, the average of the high and low price of our Common Stock on the date of grant in 2014 as reported by the NASDAQ Stock Market. These awards were issued under the Non-Employee Directors Stock Plan. This equity component consists of restricted Common Stock that has a one-year vesting requirement. An additional annual fixed retainer for the Committee Chairs (excluding the Advisory Committee Chair) $ 10,000 An additional annual fixed retainer for each member of the Audit Committee (excluding the Audit Committee Chair) $ 4,000 An additional annual fixed retainer for the Board Chair $ 100,000 The compensation of our directors is determined each year based upon a recommendation by the Compensation Committee that is submitted to the Board of Directors for approval.2014 Equity Compensation John F. Chlebowski, Jr., Phupinder S. Gill, Peter J. Henseler, Patrick J. McDonnell, Ellen A. Rudnick and Michael J. Small each received an award of 2,494 shares of fully-vested Common Stock for their 2016 service as the stock component of their director compensation. Additionally, Frank B. Modruson, who joined the Board in August 2016, received an award of 1,149 shares of fully-vested Common Stock for his 2016 service as the stock component of his director compensation. Kathryn J. Hayley, John F. Chlebowski, Jr., John L. Sterling, who retired from the Board at our 2016 annual meeting of stockholders, and J. Stephen Vanderwoude each received a restricted stock award in 2014 of 2,612 shares. These awards had a vesting period of one year from the date of grant and were nontransferable priorelected to vesting except in certain limited circumstances. In the event of a change-in-control, as defined in the Non-Employee Directors Stock Plan, all unvested shares of restricted stock vest in full, the restrictions lapse and the shares become freely transferable. Since 2012, Robert P. O’Meara has received areceive cash payment of $42,000 in lieu of the equity componentshares of his director compensation infully-vested Common Stock for 2016. In light of his significant holdings of our Common Stock. As previously indicated, Br. James GaffneyStock, Robert P. O’Meara also has elected not to receive a director restricted stock award.The following table and explanatory footnotes provide information regarding the cash and restricted stock awarded to each non-employee director during 2014.26Name Total Barbara A. Boigegrain $ 40,000 $ 42,000 — — $ — $ 2,500 $ 84,500 John F. Chlebowski, Jr. 44,000 42,000 — — — — 86,000 — — — — — — — Phupinder S. Gill 44,000 42,000 — — 3,495 — 89,495 Peter J. Henseler 40,000 42,000 — — 3,900 — 85,900 Patrick J. McDonnell 50,000 42,000 — — — — 92,000 222,000 — — — 25,434 9,775 257,209 Ellen A. Rudnick 44,000 42,000 — — — 2,500 88,500 Michael J. Small 44,000 42,000 — — — — 86,000 John L. Sterling 40,000 42,000 — — — — 82,000 J. Stephen Vanderwoude 50,000 42,000 — — 5,664 — 97,664 (1)Includes amounts deferred at the election of the directors pursuant to our Deferred Compensation Plan.(2)Amounts represent the aggregate grant-date fair value of restricted stock awards granted under our Non-Employee Directors Stock Plan during the period, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC 718”). Assumptions used in the calculation of these amounts are described in Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. The aggregate number of shares of restricted stock granted by the Company to each non-employee director during the 2014 fiscal year and outstanding at December 31, 2014 is as follows: 2,612 shares to each of Barbara A. Boigegrain, John F. Chlebowski, Jr., Phupinder S. Gill, Peter J. Henseler, Patrick J. McDonnell, Ellen A. Rudnick, Michael J. Small, John L. Sterling and J. Stephen Vanderwoude.(3)The aggregate number of unexercised stock options outstanding as of December 31, 2014 issued to non-employee directors is as follows: John F. Chlebowski, Jr., 6,586; Br. James Gaffney, 9,286; Patrick J. McDonnell, 9,286; Robert P. O’Meara, 9,174; Ellen A. Rudnick, 10,653; John L. Sterling, 9,286; and J. Stephen Vanderwoude, 9,286.(4)The Company does not maintain a non-equity incentive plan or pension plan for directors.(5)Amounts for Barbara A. Boigegrain and Ellen A. Rudnick represent the amounts paid under our matching gift donation program to eligible educational institutions designated by the applicable director. The amount for Robert P. O’Meara includes payments made on his behalf under a Retirement and Consulting Agreement between the Company and Mr. O’Meara. Under this agreement, Mr. O’Meara also pays 17% of the premium for health coverage under the Company’s group health program for retirees and the Company pays the balance.(6)Br. James Gaffney has elected not to receive any compensation for his service on the Board of Directors.(7)Robert P. O’Meara receives a cash payment of $42,000 in lieu of the equity component of his director compensation because of his significant existing holdings of our Common Stock. Included in Mr. O’Meara’s director compensation are director fees paid to him as a non-employee director of First Midwest Bank.2015 Director CompensationEach year, the Compensation Committee reviews and makes a recommendation to our Board of Directors regarding the compensation that we pay to our directors, including the annual retainers paid to our Chairman of the Board and our Board committee chairs. Beginning in late 2014, the Compensation Committee began a review of the amount and mix of compensation paid to our directors.In connection with its review of our director compensation program, the Compensation Committee held discussions with its independent compensation consultant, Deloitte Consulting LLP, and considered publicly available director compensation data from the companies in our peer group (with particular emphasis on the peer group companies located in the Chicago metropolitan area) and non-banking companies headquartered in the Chicago metropolitan area, as well as other information. The Compensation Committee also considered the significant amount of time devoted by Board members to their duties and responsibilities as directors and that the Company’s director compensation had not been adjusted since 2009. Upon the conclusion of this process, the Compensation Committee determined that27director compensation should be increased modestly, both because the Compensation Committee believed that the Company’s director compensation was below the levels prevalent in the Chicago market and, in addition, to allow the Company to continue to remain competitive in its ability to retain and attract qualified directors.Specifically, the Compensation Committee determined that it was appropriate to, and recommended that our Board of Directors, (1) increase the total base director compensation from $82,000 to $100,000 per year, representing a 3% annual increase since 2009, and (2) change the mix of director compensation to 50% paid as an annual cash retainer and 50% paid in shares of Common Stock, provided that a director may elect to receive 100% of his or her director compensation in cash. Under the new mix of compensation, the stock component will be paid in fully vested shares of Common Stock rather than in shares of restricted stock. The Compensation Committee also recommended to our Board of Directors that the retainer for the Chair of the Audit Committee be increased from $10,000 to $15,000 per year due to the substantial additional amount of time that the chair devotes to the activities of this committee.Our Board of Directors approved the recommended changes to the compensation paid to our directors and the Audit Committee Chair consistent with the Compensation Committee’s recommendation, effective as of January 1, 2015. In addition, the Nominating and Corporate Governance Committee approved an increase in the stock ownership guidelines applicable to our directors, described below, to be reflective of the increase inhis director compensation and the fact that the guidelines had not been increased since 2009.Director Stock Ownership GuidelinesWe believe that each director should have a meaningful equity investment in our Company. Effective January 1, 2015, the Nominating and Corporate Governance Committee increased our director stock ownership guidelines to provide that directors are encouraged to own Common Stock equal in value to three times the total annual base compensation for non-employee directors, or $300,000. This represents an increase from the previous guidelines of owning Common Stock equal in value to $200,000. Directors are expected to acquire and maintain this share ownership threshold within five years of joining the Board of Directors.All of our directors own a sufficient number of shares of Common Stock under our revised stock ownership guidelines, with the exception of one director who became a director within the five year stock acquisition period described above and who currently owns approximately $250,000 of our Common Stock.to be earnedpayable in the following year. AccountsAmounts are deemed to be invested in separate investment accounts under the plan, with the various investment alternatives available under our Deferred Compensation Plan, including an investment account for shares of our Common Stock.
Earned or
Paid in
Cash(1)
Awards(2)
Awards(3)
Incentive Plan
Compensation(4)
Pension Value(4)
and
Nonqualified
Deferred
Compensation
Earnings
Compensation(5)28TableContentsDirectors.sectionCompensation Discussion and Analysis provides information and perspective regarding our 2016 executive compensation program and decisions for our executive officers generally and, more specifically, for our named executive officers identified below.NameTitleClemensClemens*Victor P. Carapellaof CommercialStrategic Planning and Consumer Banking of First Midwest BankThomas M. PrameDirectorGeneral Counsel of Retail Bankingthe Company and Executive Vice President, Corporate Secretary and Chief Legal Officer of First Midwest BankSummarythat includeswith both short-term and long-term performance-based awards, andincluding a significant equity component.(1)·Encourage the achievement of corporate financial objectives that create value for our stockholders.(2)·Align the interests of our executives with our stockholders.(3)·Serve as a retention incentive for our executives.2014 AchievementsThe Companythe banking industryequity awards in general have been navigating some2016 constituted a significant portion of the most challenging economic conditions sincecompensation package of our named executive officers. In 2016, approximately two-thirds of the Great Depression. During 2014,total direct compensation (base salary, annual cash incentive and long-term incentive) paid to each of our Chief Executive Officer and our Chief Operating Officer was either performance-based or tied to the value of our Common Stock.managementwill create long-term value for our stockholders. Our performance goals are centered around our business and financial plans, which we believe will not encourage undue risk taking or imprudent actions by our executive officers to achieve these goals. to lead the Company effectively through the challenges of our economy, a prolonged low interest rate environment, as well as state and the complexities of a heightened bank regulatory and supervisory regime. The Companylocal fiscal struggles, we posted strong results in 2014, reflecting2016 and continued our focus on our corporate strategic priorities of building the highest quality team, diversifying and growing loans and revenues, and balancing investment and risk. During 2016, we accomplished balanced execution across our business lines significantly improved credit metricsthat resulted in record revenues of $538 million and net income of $92.3 million, or $1.14 per share, a 9% improvement from 2015. This performance includes M&A and other significant transaction-related costs. Our total return to stockholders in 2016 was 39%, and 52% over the successful completionlast three years.three acquisitions.Sycamore and, on January 6, 2017, completed our combination with Standard Bank & Trust Company. On a combined basis, these transactions added $3.2 billion in assets, $2.2 billion in loans, $2.6 billion in deposits and $1.6 billion in wealth management assets to our Company. These transactions strengthened our market position in metro Chicago and enhanced our business and wealth management teams. We built long-term stockholder valuenow have approximately $14 billion in 2014total assets (44% larger than at the start of 2016) and $9.5 billion of wealth management assets (18% larger than at the start of 2016). In 2016, we also raised additional capital by continuing to attractissuing $150 million of subordinated notes and retain the highest quality team, diversify and grow loans and revenue and maintain an acceptable risk profile. Amongcompleted a sale-leaseback of 55 of our branches for a purchase price of $150 million.2014 were2016 include the following:by 14% over 2013, after excluding acquisition and integration related expenses and other uncommon events from both periods.of $1.22.Loan Growth and Diversification.· Grew total loans (excluding covered loans) by $1.1 billion, or 19%, corporate loans by $915 million, or 19%, and consumer loans by $163 million, or 22%, from29December 31, 2013 levels, while at the same time continuing to diversify the asset and geographical mix of our loan portfolio.Growth of Assets Under Management. Increased assets under management by $544 million, or 8%, to approximately $7.2 billion, making our wealth management group the third largest in terms of trust fees generated and fourth largest in terms of trust assets under management among banks headquartered in Illinois.Increased Fee-Based Revenue.Grew fee-based revenue by 4.5% to $111 million, including 10% and 12% growth in wealth management and card-based fees, respectively, from 2013.Continued Improvement of Asset QualityTotal Stockholder Return(TSR). Significantly improved our asset quality, with nonperforming assets decreasing by 26%Our TSR for 2016 was 39% as compared to $89 million, or 1.5% of total loans plus OREO, the lowest level since 2007.Completed Three Acquisitions.Completed two bank acquisitions, adding $1.2 billion9.9% in deposits, $800 million in loans, 20 locations and over 27,000 households2015. Our five-year TSR was 167.2% as new clients. We also acquired a leasing company, which added equipment leasingcompared to our commercial product offerings and thereby expanded our commercial lending and fee generation opportunities132.2% for the future. We had total assets of approximately $9.4 billion at December 31, 2014.Increased Dividends. Paid dividends of $0.31 per share, almost doublingcompanies in our peer group and 151.9% for the $0.16 per share that we paidNASDAQ Bank Index.2013, while increasing stockholders equity by 10% to $1.1 billion.2015.CapitalizedCapitalized. .Maintained regulatory capital ratios significantly above the minimums for designation as a “well capitalized” institutions. For example,institution. Tier 1 capital to total risk-weighted assets of First Midwest Bank was 11.32%9.90% at December 31, 20142016 (regulatory minimum for being well-capitalizedwell capitalized is 6.0%8.0%).•National Recognition. Recognized by J.D. Power as having the “Highest Customer Satisfaction with Retail Banking in the Midwest”* according to the 2014 Retail Banking Satisfaction StudySM.Current Report on Form 8-K10-K filed with the SEC on January 21, 2015.* First Midwest2017 CompensationreceivedIndex (the Company is included in this index):highest numerical score among retail banksannual advisory vote on executive compensation when designing our executive compensation program and setting executive compensation levels. With respect to compensation decisions in 2016 (and in 2017), the Compensation Committee considered the say-on-pay approval of over 93% of the votes cast at our 2016 annual meeting of stockholders.Midwest regionevent of a change-in-control of the Company. As such, both a change-in-control of the Company and a termination of employment within 24 months following the change-in-control by either the executive for good reason or an acquirer without cause must occur in order for the proprietary J.D. Power 2014 Retail Banking Satisfaction Studyunearned or unvested equity awards to vest. We already maintain a double trigger requirement following a change-in-control for enhanced severance payments to be made to our named executive officers, and we intend to continue this practice.SMIncreased Executive Stock Ownership Guidelines. The Study isBeginning in 2017, and based on 80,445 total responses measuring 21 providers ina recommendation from our Chief Executive Officer and our Chief Operating Officer, our Compensation Committee determined that the Midwest region (Iowa, Illinois, Kansas, Missouri, Minnesota,Wisconsin) and measures opinions of consumers with their primary banking provider. Proprietary study results are based on experiences and perceptions of consumers surveyed January 2014. Individual experiences may vary. Visit JDPower.com.thatwhich encourages and rewards ourthe Company’s short-term and long-term financial success and the achievement of performance goals established by the Compensation Committee at the beginning of each performance period. As such, a significant portion of the compensation of our executive officers (including our named executive officers) is at-risk compensation, with the amount of compensation that can be earned tied to the attainment of pre-determined performance goals and the long-term value of our Common Stock. Our Compensation Committee also believes that our compensation program must be market competitive to attract and retain skilled and motivated executives who can successfully manage and grow our business. Adherence to this philosophy forms the overall premise for our executive compensation program and is based on the compensation principles set forth below.Executive compensation should be performance-based and reward achievement of corporate objectives. performance. Our executive compensation programperformance, and should be weighted toward achievement of corporate financial metrics that further our strategic priorities and that we believe will build stockholder value.30A significant portion of executive compensation should be in the form of equity awards that encourage long-term value creation for stockholders. Executive compensation should reflect an appropriate balance between fixed, incentive and equity compensation. Additionally, our named executive officers are required to maintain significant levels of stock ownership, which the Compensation Committee believes further aligns our named executive officers with the long-term interests of our stockholders.Executive compensation should be market-competitive. talent.talent as well as for an organization of our size and level of complexity. Our Compensation Committee strives to provide compensation at levels that will enable us to attract and retain qualified, committed and high-performing executives who are able to successfully manage our Company now and as it continues to grow.Executive compensation should have a retention effect. Executive compensation should not encourage excessive risk-taking. named executive officers to attain corporate financial objectives without encouraging excessive risk-taking.Pay for Performance. Performance-based cash and equity awards constitute a significant portion of the compensation package of our named executive officers. In 2014, approximately two-thirds of the total direct compensation (base salary, annual cash incentive and long-term incentive) paid to each of our Chief Executive Officer and our Chief Operating Officer was performance-based or tied to the value of our Common Stock.Performance Goals Support Strategic Objectives. Our short-term and long-term performance goals require superior corporate performance to receive target payout levels and are in furtherance of strategic and operating objectives that we believe will create long-term value for our stockholders. In addition, our performance goals are centered around our business and financial plans, which we believe will not encourage undue risk taking or imprudent actions by our executive officers outside of the risk contemplated by these plans.Stockholder Say-on-Pay Vote in 2014. Our Compensation Committee reviews the annual advisory vote on executive compensation when designing our executive compensation program and setting executive compensation levels. With respect to compensation decisions in 2014 (and in 2015), the Compensation Committee considered the say-on-pay approval by 93% of the votes cast at our 2014 annual meeting of stockholders. This represents an increase from the 92% of the votes cast in favor of our say-on-pay proposal at the 2013 annual meeting and 88% of the votes cast in favor in 2012. The Compensation Committee believes that these vote results confirmed that our stockholders are in agreement with our approach to executive compensation. Our Compensation Committee intends to consider the results from31this year, and future advisory votes, when determining the design and amounts provided under our executive compensation program.Double Trigger for Severance Upon a Change-in-Control. The employment agreements with our named executive officers include a “double trigger” provision that requires a change-in-control of the Company and an involuntary termination of the named executive officer’s employment (including a resignation for good reason) before the executive is entitled to receive enhanced severance benefits.Use of Total Stockholder Return as External Metric. We believe it is desirable to use both external and internal metrics to measure our corporate performance. For the performance share awards that we granted in 2014 (and again in 2015), one half of these awards utilize relative total stockholder return as the external metric to determine if these awards will be earned during the three-year performance period. To balance risk and enhance retention, a two-year continued service vesting period follows the three-year performance period.No Dividends Paid on Equity Awards Prior to Vesting. We do not pay dividends on any performance shares or restricted stock awards to our executive officers (including our named executive officers) before the awards have been earned and vested.Anti-Pledging and Anti-Hedging Policy. We have a policy that prohibits all of our employees, including our named executive officers, from pledging, hedging or selling short shares of our Common Stock.Stock Ownership Guidelines. We maintain robust stock ownership guidelines for our executive officers to further align the interests of our executive officers and our stockholders.Independent Compensation Consultant. The Compensation Committee meets with and regularly obtains advice from an independent compensation consultant on our executive compensation program.No Tax Gross-ups. Our employment agreements with our named executive officers do not require the Company to pay the executive a tax gross-up in the event the officer incurs an excise tax from severance benefits paid following a change-in-control.Clawback of Compensation. We have clawback provisions in the employment agreements with our executive officers (including our named executive officers) that allow us to recover cash bonuses and other incentive compensation under certain circumstances.Limited Perquisites. Perquisites represent an immaterial portion of our executive compensation.Protective Covenants. Our executive and other senior officers must sign agreements requiring them to comply with confidentiality and non-solicitation covenants with the Company as a condition to receiving equity and short-term incentive cash awards.Risk AssessmentProcedures. Our Compensation Committee conducts an annual risk assessment of our executive compensation program to confirm that our program does not encourage our executive officers to take excessive or imprudent risks to enhance their compensation.No Share Recycling. Our Omnibus Stock and Incentive Plan does not permit recycling of shares tendered in payment of an option exercise price or the recycling of shares withheld to satisfy tax withholding obligations. As such, these shares are not available for future awards under the plan.No Stock Option Repricing. Our Omnibus Stock and Incentive Plan prohibits repricing of stock options and stock appreciation rights, as well as cash buyouts of underwater stock options and exchanges of underwater stock options for new stock options having a lower exercise price, without stockholder approval.32Minimum Vesting Periods. To reinforce the long-term focus of equity awards, our Omnibus Stock and Incentive Plan provides that awards of stock options, stock appreciation rights and restricted stock must have a period of not less than three years for full vesting to occur, subject to certain limited exceptions set forth in the plan. Our performance share awards have three-year performance periods and, if earned, are followed by two-year full vesting periods.Compensation Proceduresthe currentthat year for our Chief Operating Officer and each of our other executive officers. Our Chief Executive Officer and our Chief Operating Officer also review annually the performance of their respective direct reports and determine theireach determines the individual performance ratings of these executives for a particular year. Our Compensation Committee reviews our Chief Executive Officer’s performancesalary.salary, and recommends both to the Board for approval. The individual performance ratings impact the amount of annual cash incentive compensation earned by, and the restricted stock awards granted to, our executive officers. As described above in Compensation Discussion and Analysis—Executive Summary—2017 Compensation, the Compensation Committee determined to eliminate for 2017 compensation purposes the individual performance ratings for our Chief Executive Officer and our Chief Operating Officer. The remaining elements of our executive compensation program are set by the Compensation Committee.Committee, taking into consideration a recommendation from our Chief Executive Officer, and approved by the Board. The For 2016, the Compensation Committee has retained Deloitte Consulting LLP to serve as its independent compensation consultant. Deloitte ConsultingOur compensation consultant assists the Compensation Committee with executive compensation program design, ongoing review of our executive compensation program, guidance relating to the amounts and mix of cash, equity and incentive compensation to be paid to our executive officers, analysis of market practices for companies in our industry and of our size, assessment of the market competitiveness of our executive compensation program, say-on-pay analysis and peer group composition. Deloitte Consulting participatesparticipated in Compensation Committee meetings on request, regularly providesprovided input for Committee meetings and attended one meeting in 2014. The Chairman2016. Members of our Compensation Committee also consultsconsult with Deloitte Consultingthe compensation consultant outside of Committee meetings. Deloitte ConsultingThe compensation consultant reports directly to the Compensation Committee, and the Committee must approve all services performed by Deloitte Consulting.the compensation consultant. The Compensation Committee has assessedassesses the independence of Deloitte Consultingthe compensation consultant each year and has concluded that Deloitte Consulting is independent under applicable rules of the NASDAQ requirements.Stock Market.the currentthat year for our annual cash incentive compensation program and for a three-year performance period for our performance share awards. The dominant metric has historically been an earnings-based performance measure. In 2014,2016, core net income was weighted at 75%80% of the short-term cash incentive award opportunity, with the remaining 25%20% tied to asset quality (levels of nonperforming assets and performing potential problemclassified loans). Payouts of short-term compensation are made only if minimum financial performance is attained and are based on the degree to which the corporate performance goals are achieved. This amount may be increased for individual executive officers based on their performance.2014 (2014-20162016 (2016-2018 performance period), our Compensation Committee selected, and our Board of Directors approved, an external metric (relative total stockholder return) and an internal metric (core return on average tangible common equity) and weighted these metrics equally. With regard to the external metric, the Company’s total stockholder return during a three-year performance33sharesshare awards before awards may be earned.Deloitte Consultingour compensation consultant and management, and is approved annually by the Compensation Committee. The peer group may be changed from year to year whenif a company in the peer group has been acquired or if a peer company’s size or other factors have changed such that the Compensation Committee believes that a particular company no longer continues to be representative of the peer group.2013
(Dollars in Billions)First Midwest Bancorp. Inc.$8.3Itasca, IL4.76.27.16.2BancorpBancorp.(1)6.45.313.69.69.66.65.614.17.511.711.816.911.68.716.26.118.1Chicago,8.7 12.034TableContents
(Dollars in Billions)Amaycould be earned by our named executive officers iswas tied to each officer’s individual performance rating for the year. In addition, the number of shares of restricted stock awarded in a given year iswas based on a percentage of the named executive officer’s base salary and his or her individual performance rating.determineshistorically has determined our Chief Executive Officer’s individual performance rating, which is approved by our Board of Directors. Our Chief Executive Officer approves the individual performance ratings of the other named executive officers.2014strategic and financial objectives, each named executive officer’s individual performance, market factors and our views regarding a named executive officer’s scope of job responsibilities, demonstrated leadership abilities and management experience and effectiveness.SalaryCompensationSharesUnitsDeloitte Consulting.our compensation consultant. We also consider other relevant factors, such as Company and individual performance, internal equity and our compensation philosophy.35In 2014, the percentageseach element of total direct compensation (excluding the supplemental merger and acquisitionstrategic activities award described below) paid to our named executive officersChief Executive Officer and Chief Operating Officer were as follows:theirhis or her role.22%23% of the total direct compensation paid to our named executive officers in 2014.2016. It is a performance-based program with one-year performance goals and is our vehicle for awarding annual cash bonuses to our named executive officers and other eligible employees. Executives may earn a cash bonus based on the achievement of corporate financial objectivesgoals and their individual performance for that year. The annual cash incentive compensation element of our compensation program encourages36metricsperformance goals at the beginning of the fiscal year, and threshold performance for at least one of the corporate performance metricsgoals must be achieved in order for cash bonuses to be earned and paid.heaviermore toward Company financial performance than individual performance.assessmentevaluation of each named executive officer’s performance results in an individual performance rating for the officer for the year.2014 was2016 were as follows:
Percentage of Base Salary)
Performance
Performance Target Bonus Opportunity Performance Weighting Named Executive Officer Michael L. Scudder 60% 85% 15% Mark G. Sander 50% 70% 30% Paul F. Clemens 40% 70% 30% Victor P. Carapella 40% 70% 30% Thomas M. Prame 40% 60% 40% 20142016 fiscal year, our annual cash incentive compensation program included three corporate-widecorporate performance metrics: core net income (weighted at 75%80%), non-performing assets (weighted at 17%10%) and performing potential problemclassified loans (weighted at 8%10%).operating income attributed to completed acquisitions in the current year)a lease cancellation fee) as the dominant performance metric because it encouragedencourages senior management to continue to focus on our operating performance and because this metric is frequently used to assess short-term corporate performance by stockholders and the investment community and banking regulators.community. The Compensation Committee chose non-performing assets (excluding accruing troubled debt restructurings acquired and covered loans and covered OREO)other real estate owner (OREO)) and performing potential problemclassified loans (excluding acquired loans)accruing troubled debt restructurings) because of the importance and continued emphasis on assetmaintaining a high quality at the Company.20142016 in furtherance of the following strategic priorities:37mobile bankingadditional investment in digital delivery channels.other delivery channels.In 2014,possible payout (as a percentage of base salary) for each metric were as follows:Performance Goal 2014 Target Core Net Income (75%) $71.7 million $68.1 million 87.36 % 65.52 % Non-Performing Assets (17%) 2.00% 1.43% 175.00 % 29.75 % Performing Potential Problem Loans (8%) 4.50% 4.42% 105.83 % 8.47 % Total Percentage Earned 103.74 %
Performance
Percentage of Target
Percentageperformance withfor core net income and non-performing assets as a percent of loans, finishing the year at $98.4 million, compared to a target of $96.4 million, and 0.93%, as compared to a target of 1.05%, respectively. With respect to the asset qualityclassified loans performance goals (non-performing loans and performing potential problem loans) for 2014. With respect to core net income,goal, the Company’s performance was lower than target due substantially to lower than anticipated interest earned on loans and securities. In setting the target core net income goal at the beginningCompany achieved 66% of the year, it was expected that interest rates would rise in 2014. When rates did not rise during 2014 as anticipated, this resulted in lower yields and spreads on earning assets, as well as an increase in lower yielding floating rate loans. While management could have invested excess cash in higher yielding, longer duration securities, it elected to maintain a more liquid position in order to invest more profitably when interest rates rise.2014:Named Executive Officer Annual Cash Bonus Earned Percentage of Target Award Michael L. Scudder $482,400 107% Mark G. Sander 304,159 112% Paul F. Clemens 156,593 104% Victor P. Carapella 147,865 106% Thomas M. Prame 127,560 106% Merger and AcquisitionStrategic Activities Award2014,2016, the Company successfully completed the acquisitionsacquisition of Great LakesThe National Bank and the Chicago area branches&Trust Company of Popular Community Bank,Sycamore, which added approximately $1.2$665 million in total assets and an additional $700 million of trust assets under management. In addition, on January 6, 2017, the Company completed its acquisition of Standard Bank & Trust Company, which was announced in June 2016 and is the largest single acquisition completed by the Company. The Company completed virtually all of the transactional work on this combination in 2016. The Standard Bank transaction added approximately $2.6 billion in assets, $2.0 billion in deposits, $800 millionand $1.8 billion in loans, and 20 new$300 million of assets under management. During 2016, the Company completed several additional strategic projects intended to streamline and enhance operational efficiencies while positioning the Company for future growth. Theseacquisitionrefinancing of National Machine Tool Financial Corporation, an equipment leasing company. the Company’s maturing senior notes through a new subordinated notes offering of $150 million. the significant amount of effort by the Company’s management and employees required to successfully complete and integrate these transactions, the speed and efficiency with which the transactions were closed and integrated, and the expected financial and strategic contributions of these significant transactions to the Company and the extraordinary amount of effort required by the Company’s management and employees to successfully complete these transactions while, at the same time, attaining strong financial performance in 2016 and executing on our strategic goals, the Compensation Committee approved, at its February 20152017 meeting, a supplemental strategic activities award to all employees who are eligible to participate in our Short-Term Incentive Compensation Plan. The total amounttotaling $1.2 million. Most of this award for allwas allocated to employees was $1,032,410.Our named executive officers received the following amounts under thiswho were disproportionately impacted by these transactions (those who significantly contributed to these transactions and still performed their normal duties and responsibilities). Any supplemental award: Michael L. Scudder – $88,000, of which $47,000award exceeding $10,000 was paid one-half in cash and $41,000 was paid in restricted stock; Mark G. Sander –38$49,652, of which $20,015 was paid in cash and $29,637 was paid in restricted stock; Paul F. Clemens – $25,424, of which $9,898 was paid in cash and $15,526 was paid in restricted stock; Victor P. Carapella – $17,150, of which $6,856 was paid in cash and $10,294 was paidone-half in restricted stock, units; and Thomas M. Prame – $24,607, of which $9,839 was paid in cash and $14,768 was paid in restricted stock. The restricted stock or restricted stock unit component of the awardportion is subject to a three-year continued service vesting period and was issued underrequirement. The amounts paid to our Omnibus Stock and Incentive Plan.IncentiveAt-Risk Equity Compensationbeconsist of at-risk equity awards in the form of long-termperformance shares and restricted stock. The value of these at-risk equity awards both performance-based and service-based. By doing so,is based on the Company’s achievement of financial objectives or changes in the Company’s stock price. As such, we further align the interests of our senior management with our stockholders, link pay with performance and enhance the retention of our senior officers. Long-term incentiveequity awards are made under our Omnibus Stock and Incentive Plan approved by our stockholders.2014,2016, our named executive officers were awarded performance shares that may be earned based on the Company’s level of performance over a three-year period. If the performance objectivesgoals are achieved, the performance shares willwould be earned. Once earned, one-third of the performance shares will vest at the completion of the three-year performance period,immediately, one-third will vest the following year and the remaining one-third will vest at the end of the nextsecond year, assuming continued employment with the Company during the performance period and the subsequent two-year continued service vesting period. We accrue cash dividends that otherwise would be paid on the performance shares, but the accrued, unpaid dividends are not paid to the named executive officer unless the underlying performance shares are earned and subsequently vest.participant’s base salary.officer eligible to receive performance shares. The determination of the number of performance shares earned for each participant is based solely upon the Company achieving certain performance objectivesgoals without reference to individual performance ratings.for the 2014-2016(2016-2018 performance period,period), with each metric weighted at 50% of the total award opportunity. For the external metric, the Compensation Committee selected total stockholder return relative to the Company’s peer group. For the internal metric, the Compensation Committee chose core return on average tangible common equity of the Company.20142016 in furtherance of the following strategic objectives:392014,2016, our Compensation Committee granted performance share award opportunities to our named executive officers as follows:
Award Opportunity
(Expressed as a Percentage
of Base Salary)
Shares Awarded for
2016-2018 Performance
Period (Based on Target
Award Level)
Performance Share Award
Opportunity (Based on
Target Award Level)
Performance
Percentage
of Target
Payout
PercentageNamed Executive Officer Target Performance Share Award Opportunity (Expressed as a Percentage of Base Salary) Number of Performance Shares Awarded for 2014-2016 Performance Period (Based on Target Award Level) Grant Date Fair Value of Performance Share Award Opportunity (Based on Target Award Level) Michael L. Scudder 65% 36,541 $587,488 Mark G. Sander 60% 20,338 326,984 Paul F. Clemens 25% 5,846 93,989 Victor P. Carapella 25% 5,442 87,494 Thomas M. Prame 20% 3,734 60,033 2014,2016, our named executive officers were awarded restricted stock or for those age 65 or older, restricted stock units that fully vest over a three-year period in equal installments on the second and third anniversaries of the grant date. For 2014, only Mr. Carapella hadExecutives who have attained, or will attain during the vesting cycle, the age of 65 and was awardedreceive restricted stock units. The named executive officer must continue to be employed withMr. Clemens received restricted stock units in 2016 because he will turn age 65 during the Company or one of its subsidiaries on the applicablethree-year vesting date for the award to vest.cycle.2014,2016, our Compensation Committee granted restricted stock or restricted stock unit award opportunities to our named executive officers as follows:Named Executive Officer Number of Shares of Restricted Stock/Units Granted Grant Date Fair Value of Shares of Restricted Stock/Units Granted Michael L. Scudder 50% 29,155 $468,740 Mark G. Sander 50% 22,881 367,869 Paul F. Clemens 35% 9,822 157,913 Victor P. Carapella 35% 10,286 165,373 Thomas M. Prame 35% 8,168 131,321
Award Opportunity
(Expressed as a
Percentage of
Base Salary)
Restricted Stock/Units
Granted
of Shares of Restricted
Stock/Units Granted40Upon6-yearsix-year vesting schedule), (b) a matching contribution equal to 100% of an employee’s first 3% of pre-tax contributions and 50% of the employee’s next 2% of pre-tax contributions, and (c) for the 2014 and 2015 plan years, a transition benefit for only participants in the Pension Plan as of January 1, 2014 equal to a contribution of 2% of total compensation for participants aged 40-49, 3% of total compensation for participants aged 50-59, and 4% of total compensation for participants aged 60 and older.PositionOperatingFinancial OfficerChief Financial OfficerOther Named Executive OfficersTwo times base salaryunearned performance shares and unvested restricted stock.412014,2016, the Compensation Committee confirmed the following:change in control.change-in-control. In addition, our named executive officers are bound by Confidentiality and Restrictive Covenant Agreements that supplement the confidentiality and restrictive covenants set forth in our named executive officers’ employment agreements. The confidentiality, non-solicitation and non-disparagement covenants apply for a period of 12 months (18 months for our Chief Executive Officer and Chief Operating Officer) following termination of employment.42
employment, and must be complied with as a condition to receiving equity and short-term incentive cash awards.TableCompensation Discussion and Analysis that appears in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board of ContentsDirectors that the Compensation Discussion and Analysis2014footnotesnotes below summarize the total compensation for the years 2014, 20132016, 2015 and 20122014 paid to or earned by our named executive officers.officers other than Mr. Chulos, who was not a named executive officer in 2015 or 2014. The information relating to Mr. Chulos for those years has been omitted in accordance with SEC rules.
Principal Position
Awards(2)
Incentive Plan
Compensation(3)
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings(4)
Compensation(5)
2014
300,158
9,839
199,877
127,560
1,068
20,034
658,536 Year Salary Total Michael L. Scudder 2014 $ 750,000 $ 47,000 $ 1,103,667 $ — $ 482,400 $ 221,576 $ 111,336 $ 2,715,979 President and Chief Executive Officer 2013 720,000 — 917,083 — 466,927 79,163 283,350 2,466,523 2012 720,000 255,000 935,690 — 328,743 117,766 215,830 2,573,029 Mark G. Sander 2014 $ 545,000 $ 20,015 $ 723,140 $ — $ 304,159 $ 19,915 $ 65,277 $ 1,677,506 Senior EVP and Chief Operating Officer 2013 519,675 — 791,711 — 296,397 8,614 62,100 1,678,497 2012 507,000 — 643,506 — 211,206 3,180 35,391 1,400,283 Paul F. Clemens 2014 $ 376,000 $ 9,898 $ 263,999 $ — $ 156,593 $ 5,268 $ 44,584 $ 856,342 EVP and Chief Financial Officer 2013 364,900 — 223,307 — 159,928 2,551 35,095 785,781 2012 356,000 62,500 233,013 — 114,370 1,045 32,494 799,422 Victor P. Carapella 2014 $ 350,000 $ 6,856 $ 264,417 $ — $ 147,865 $ 296,153 $ 61,254 $ 1,126,545 EVP and Director of Commercial Banking, First Midwest Bank 2013 333,125 — 198,183 — 151,998 137,623 100,008 920,937 2012 325,000 62,500 231,698 — 102,461 80,540 58,456 860,655 Thomas M. Prame 2014 $ 300,158 $ 9,839 $ 199,877 $ — $ 127,560 $ 1,068 $ 23,292 $ 661,794 EVP and Director of Retail Banking, First Midwest Bank 2013 292,125 — 173,239 — 122,763 510 25,870 614,507 2012 191,827 75,000 165,321 — 99,326 — 145,894 677,368 (1)For 2014, amounts represent the cash portion of a supplemental merger and acquisition award paid in recognition of the successful completion and integration of three acquisitions during the year. The amounts do not include the portion of the award paid in shares of restricted stock or restricted stock units. For our named executive officers, this supplemental award totaled: $88,000 for Mr. Scudder, $49,652 for Mr. Sander, $25,424 for Mr. Clemens, $17,150 for Mr. Carapella, and $24,607 for Mr. Prame. For additional information regarding this award, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation in 2014—Supplemental Merger and Acquisition Award. For 2012, amounts represent, as to Messrs. Scudder, Clemens and Carapella, special cash bonuses paid in December 2012 in recognition of their contributions to the Company during 2012 and, as to Mr. Prame, a cash signing bonus paid upon commencement of his employment by the Company in 2012.(2)Amounts represent the aggregate grant-date fair value of stock awards, including performance shares and restricted stock and restricted stock unit awards, granted under our Omnibus Stock and Incentive Plan during the period, calculated in accordance with ASC 718. Assumptions used in the calculation of these amounts are described in Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. The grant-date fair value of the performance shares is based on a target level of performance and will likely vary from the actual amount the individual earns upon vesting of applicable awards. Assuming the highest level of performance, the grant-date fair value of the 2014 performance share awards would be: $1,174,976 for Mr. Scudder, $653,968 for Mr. Sander, $187,978 for Mr. Clemens, $174,988 for Mr. Carapella and $120,067 for Mr. Prame. The amounts in this column also include dividends accrued on unvested awards of performance shares, restricted stock and restricted stock units (which amounts are not paid unless the underlying shares vest). For 2014, these amounts totaled: $47,439 for Mr. Scudder, $28,287 for Mr. Sander, $12,097 for Mr. Clemens, $11,550 for Mr. Carapella, and $8,523 for Mr. Prame.(3)Amounts represent cash bonuses paid under our performance-based short-term incentive compensation plan for the years indicated.(4)Amounts represent the actuarial increase in the present value of the named executive officer’s benefit under our Pension Plan. These amounts were determined using the interest rate and mortality rate assumptions consistent with those used in our audited financial statements for the year ended December 31, 2014. Benefit accruals under the Pension Plan were frozen effective as of January 1, 2014. For additional information, see Executive Compensation Tables—Pension Benefits. The amounts in this column also include realized earnings of the named executive officer in our Deferred Compensation Plan.(5)Amounts represent the following:43TableContentsJanuary 1, 2014. For additional information, see Executive Compensation Tables—Pension Benefits. The amounts in this column also include realized earnings of the named executive officer in our Deferred Compensation Plan.
Plan(a)
Qualified
Plan(b)
and Other
Personal Benefits(c)Contributions to Defined Contribution Retirement Plans and Perquisites Name Year Total Michael L. Scudder 2014 $ 22,231 $ 70,923 $ — $ 18,182 (f) $ 111,336 2013 5,100 9,300 258,950 (e) 10,000 (f) 283,350 2012 5,000 9,400 190,291 (e) 11,139 (f) 215,830 Mark G. Sander 2014 $ 11,431 $ 29,236 N/A $ 24,611 (g) $ 65,277 2013 15,300 24,329 N/A 22,471 (g) 62,100 2012 10,000 5,210 N/A 20,181 (g) 35,391 Paul F. Clemens 2014 $ 15,600 $ 16,509 N/A $ 12,475 (h) $ 44,584 2013 15,300 11,220 N/A 8,575 (h) 35,095 2012 15,000 8,919 N/A 8,575 (h) 32,494 Victor P. Carapella 2014 $ 19,920 $ 23,674 $ — $ 17,660 (h) $ 61,254 2013 5,100 1,562 79,453 (e) 13,893 (h) 100,008 2012 3,250 1,750 41,006 (e) 12,450 (h) 58,456 Thomas M. Prame 2014 $ 7,509 $ 3,258 N/A $ 12,525 (h) $ 23,292 2013 8,030 — N/A 17,840 (h) 25,870 2012 N/A 27,425 N/A 118,469 (h) 145,894 (a)The Company maintains a 401(k) Plan as its defined contribution plan. For eligible employees, this plan provides for an annual discretionary Company contribution up to limits imposed by the Internal Revenue Service and matching Company contributions. Employees who participated in our Pension Plan in 2012 were not eligible to receive any discretionary Company contributions to our 401(k) Plan. All Company contributions were made on eligible compensation under our 401(k) Plan subject to compensation limitations under the Internal Revenue Code.(b)The Company maintains the Deferred Compensation Plan as its nonqualified deferred compensation plan. This plan provides for a tax-deferred vehicle to accommodate contributions that are otherwise limited and not able to be made to our tax-qualified plans, as well as voluntary participant contributions. The Deferred Compensation Plan is subject to Section 409A of the Internal Revenue Code. With respect to Mr. Prame, for 2012, the amount represents a one-time Company contribution to our Deferred Compensation Plan made in connection with his recruitment package.(c)Amounts represent the present value of amounts that would have accrued to the named executive officer during 2013 and 2012 under the actuarially based pension formula of our Pension Plan but for the compensation limitations of the Internal Revenue Code.(d)All perquisites paid to our named executive officers are less than $25,000 in the aggregate for the years listed.(e)Because we froze benefit accruals under our Pension Plan effective as of January 1, 2014, there no longer will be a pension restoration benefit attributed to Mr. Scudder or Mr. Carapella in future years. Messrs. Sander, Clemens and Prame are not participants in the Pension Plan.(f)Represents amounts paid to Mr. Scudder for an annual automobile allowance and amounts paid by the Company on behalf of Mr. Scudder for other customary perquisites.(g)Represents amounts paid to Mr. Sander for an annual automobile allowance and amounts paid by the Company on behalf of Mr. Sander for country club dues and other customary perquisites. The country club membership is maintained for business entertainment but may be used for personal use.(h)Represents amounts paid to each of Messrs. Clemens, Carapella and Prame for an annual automobile allowance and amounts paid by the Company on behalf of each of them for other customary perquisites. As to Mr. Carapella, the amounts also represents amounts paid by the Company for country club dues. The country club membership is maintained for business entertainment but may be used for personal use. For 2012, the amount for Mr. Prame also includes $109,894 of expenses paid by the Company in connection with his relocation to the Chicago area.44201420142016 (and reported as Stock Awards in the Summary Compensation Table) and the annual cash incentive compensation award opportunity for 20142016 for our named executive officers.
Non-Equity Incentive Plan Awards(1)
Equity Incentive Plan Awards(2)
Stock
Awards:
Number of
Shares of
Date Fair
Value of
Stock and
Date
Units(3)
Awards(4)Name Grant Date All Other Option Awards: Number of Securities Underlying Options Exercise or Base Price of Option Awards Per Share Threshold Target Maximum Threshold Target Maximum Michael L. Scudder $ 112,500 $ 450,000 $ 770,625 2/19/2014 9,135 36,541 73,082 $ 587,488 2/19/2014 29,155 468,740 Mark G. Sander $ 68,125 $ 272,500 $ 456,438 2/19/2014 5,085 20,338 40,676 $ 326,984 2/19/2014 22,881 367,869 Paul F. Clemens $ 37,600 $ 150,400 $ 251,920 2/19/2014 1,462 5,846 11,692 $ 93,989 2/19/2014 9,822 157,913 Victor P. Carapella $ 35,000 $ 140,000 $ 234,500 2/19/2014 1,361 5,442 10,884 $ 87,494 2/19/2014 10,286 165,373 Thomas M. Prame $ 30,016 $ 120,063 $ 198,104 2/19/2014 934 3,734 7,468 $ 60,033 2/19/2014 8,168 131,321 (1)Amounts reflect the range of estimated possible payouts under our short-term cash incentive compensation plan based on a combination of Company performance and individual performance rating assumptions. For additional information, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation Program in 2014—Annual Cash Incentive Compensation.(2)Awards represent the range of estimated possible payouts granted in the form of performance shares under our Omnibus Stock and Incentive Plan, which, if earned, are converted into shares of restricted Common Stock. Our named executive officers are eligible to earn performance shares totaling between 25% and 200% of the number of performance shares granted if performance levels are achieved using the following two metrics: total stockholder return relative to a specified peer group of financial institutions and core return on average tangible common equity relative to predetermined goals. For additional information, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation Program in 2014—Long-Term Incentive Compensation—Performance-Based Equity Compensation. Dividends on performance shares are accrued but not paid until the performance shares vest.(3)Awards represent restricted stock or, in the case of Mr. Carapella, restricted stock unit awards granted under our Omnibus Stock and Incentive Plan. Restricted stock and restricted stock unit awards vest over three years in two equal installments beginning two years from the date of grant (subject to continued employment and accelerated vesting under certain circumstances). For additional information, see Compensation Discussion and Analysis—Principal Elements of Our Executive Compensation Program in 2014—Long-Term Incentive Compensation—Restricted Stock Awards. Dividends on restricted stock and the Common Stock underlying restricted stock units are accrued but not paid unless the underlying shares vest.(4)Amounts represent the aggregate grant-date fair value of stock awards, including performance shares and restricted stock and restricted stock unit awards, granted under our Omnibus Stock and Incentive Plan during 2014, calculated in accordance with ASC 718. See notes 2 and 3, above, for additional information regarding these awards. For the performance shares, the amounts have been calculated taking into consideration the probable outcome of the respective performance conditions as the date of grant. Dividends accrued but not paid until the vesting of the awards of performance shares, restricted stock and restricted stock units are not included in the amounts reflected in this column. Assumptions used in the calculation of these amounts are described in Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014.452014 Table2014.2016. All values in the table are based on a market value for our Common Stock of $17.11,$25.23, which was the closing price of our stock on December 31, 201430, 2016, the last trading day of the year, as reported by the NASDAQ Stock Market. Information regarding when unvested awards are scheduled to vest is set forth in the footnotesnotes to the table. Vesting also is subject to continued employment and acceleration under certain circumstances.
Securities
Underlying
Unexercised
Options
Exercisable
Exercise
Price
Expiration
Date
Shares or
Units of Stock
that Have Not
Vested
Value of
Shares or
Units of
Stock that
Have Not
Vested
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have Not
Vested
Incentive Plan
Awards:
Market or
Payout Value of
Unearned
Shares, Units
or Other Rights
that Have Not
Vested Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options Option Exercise Price Option Expiration Date Number of Shares or Units of Stock that Have Not Vested Market Value of Shares or Units of Stock that Have Not Vested Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested Michael L. Scudder 17,940 $ 33.61 2/23/2015 29,722 (1) $ 508,543 36,449 (4) $ 623,642 19,631 33.92 2/22/2016 11,228 (1) 192,111 36,541 (5) 625,217 18,898 38.62 2/21/2017 33,645 (2) 575,666 25,019 28.10 2/20/2018 29,155 (3) 498,842 Mark G. Sander 42,328 $ 12.17 6/20/2021 20,092 (1) $ 343,774 24,284 (4) $ 415,499 22,260 (2) 380,869 20,338 (5) 347,983 22,881 (3) 391,494 Paul F. Clemens 902 $ 38.79 11/15/2016 7,436 (1) $ 127,230 7,105 (4) $ 121,567 5,380 38.62 2/21/2017 2,752 (1) 47,087 5,846 (5) 100,025 18,464 28.10 2/20/2018 9,947 (2) 170,193 9,822 (3) 168,054 Victor P. Carapella 11,324 $ 33.61 2/23/2015 7,379 (1) $ 126,255 6,486 (4) $ 110,975 12,258 33.92 2/22/2016 2,752 (1) 47,087 5,442 (5) 93,113 11,655 38.62 2/21/2017 8,626 (2) 147,591 16,738 28.10 2/20/2018 10,286 (3) 175,993 Thomas M. Prame 5,347 (6) $ 91,487 4,550 (4) $ 77,851 8,759 (2) 149,866 3,734 (5) 63,889 8,168 (3) 139,754 (1)Restricted stock and restricted stock unit awards vest over three years in two equal installments beginning two years from the date of grant (subject to continued employment and accelerated vesting under certain circumstances). Represents the second tranche of restricted stock or restricted stock unit awards granted in 2012 that vested on February 22, 2015.(2)Represents restricted stock or restricted stock unit awards granted in 2013, the first tranche of which vested on February 20, 2015 and the second tranche of which is scheduled to vest on February 20, 2016. See note 1, above, for additional information regarding the vesting of restricted stock and restricted stock unit awards.(3)Represents restricted stock or restricted stock unit awards granted in 2014, the first tranche of which is scheduled to vest on February 19, 2016 and the second tranche of which is scheduled to vest on February 19, 2017. See note 1, above, for additional information regarding the vesting of restricted stock and restricted stock unit awards.(4)Performance shares that may be earned upon completion of a three-year performance period ending on December 31, 2015 if performance levels (reflected at target in this table) are achieved using the following two metrics: total stockholder return relative to our peer group and core return on average tangible common equity relative to predetermined goals.(5)Performance shares that may be earned upon completion of a three-year performance period ending on December 31, 2016 if performance levels (reflected at target in this table) are achieved using the following two metrics: total stockholder return relative to our peer group and core return on average tangible common equity relative to predetermined goals.(6)Represents the third tranche of a recruitment inducement restricted stock award granted in 2012 that is scheduled to vest on May 16, 2015. This award was scheduled to vest over three years in three equal installments beginning one year from the date of grant (subject to continued employment and accelerated vesting under certain circumstances).46TableContentsperformance shares earned at the completion of a three-year performance period that ended on December 31, 2015. The second and third tranches are scheduled to vest on March 15, 2017 and March 15, 2018, respectively. See note 6, below, for additional information regarding the vesting of earned performance shares.2014 and —Conclusion of 2014-2016 Performance Period.amounts paid to or receivedvalue realized by our named executive officers during 20142016 as a result of the exercise of non-qualified stock options and the vesting of restricted stock awards or units. Option Awards Stock Awards Name Number of Shares Acquired on Exercise Value Realized on Exercise Number of Shares Acquired on Vesting Value Realized on Vesting Michael L. Scudder — — 64,253 $ 1,022,426 Mark G. Sander — — 20,093 319,730 Paul F. Clemens — — 17,109 272,247 Victor P. Carapella — — 16,795 267,250 Thomas M. Prame — — 5,348 83,830
Shares Acquired
on Exercise
on Exercise
Shares Acquired
on Vesting
on Vestingand Mr. Carapella, who areis the only named executive officersofficer who are participantsparticipates in our Pension Plan.servicesservice prior to 1980.or restricted stock unit and performance share awards. Pension-eligible compensation is capped by provisions of the Internal Revenue Code applicable to tax-qualified pension plans. For 2014,2016, this limit was $260,000.$265,000. Any amounts that become ineligible due to the Internal Revenue Code limits are used to compute the pension restoration contribution to the Deferred Compensation Plan as discussed further below under the section titled Non-Qualified Deferred Compensation.201420142016 payable to each of the named executive officers, including the number of years of service credited to each named executive officer under our Pension Plan determined using interest rate and mortality rate assumptions consistent with those used in our 20142016 audited financial statements included in our Form 10-K.
Years Credited
Service
Accumulated
Benefit
During Last
Fiscal Year47Name Plan Name Number of Years Credited Service Present Value of Accumulated Benefit Payments During Last Fiscal Year Michael L. Scudder Pension Plan 27.75 $ 575,020 $ — N/A N/A N/A N/A N/A N/A N/A N/A Victor P. Carapella Pension Plan 25.33 1,008,799 — N/A N/A N/A N/A (1)The Pension Plan was closed to new participants as of April 1, 2007. Based on the date of hire for Messrs. Sander, Clemens and Prame, they are not eligible to participate in the Pension Plan.ofby certain key executives. This plan combines traditional deferred compensation arrangements with stock option exercise transactions by allowing eligible stock option participants to defer to a future date the receipt of shares representing the value realized upon exercise of the underlying stock options. In response to the addition of Section 409A of the Internal Revenue Code, the Gain Deferral Plan was frozen and no additional contributions or deferrals may be madetwentyeight stock option participants elected to participate in this plan, including Messrs. Scudder and Carapella.Mr. Scudder. Deferrals are held for each participant in separate individual accounts in an irrevocable rabbi trust. Amounts deferred under the Gain Deferral Plan are denominated and paid in shares of Common Stock and are adjusted for dividends as if the dividends were reinvested in shares of Common Stock.4820142014.2016.
Contributions
in 2016(1)
Contributions
in 2016(2)
Earnings in
2016
Withdrawals/
Distributions
in 2016
Balance at
December 31,
2016(3)(4)Name Plan Name Aggregate Earnings in 2014 Michael L. Scudder Deferred Comp. Plan $ 30,289 $ 24,231 $ 123,177 $ — $ 2,418,509 Gain Deferral Plan — — 2,747 — 157,406 Mark G. Sander Deferred Comp. Plan 88,039 36,643 19,915 — 312,165 Gain Deferral Plan N/A N/A N/A N/A N/A Paul F. Clemens Deferred Comp. Plan 21,981 20,013 5,268 — 137,222 Gain Deferral Plan N/A N/A N/A N/A N/A Victor P. Carapella Deferred Comp. Plan 11,442 9,154 60,169 — 2,058,025 Gain Deferral Plan — — 15,109 — 865,620 Thomas M. Prame Deferred Comp. Plan — — 1,068 — 37,317 Gain Deferral Plan N/A N/A N/A N/A N/A (1)Executive contributions represent amounts that would have been contributed by the named executive officer under our 401(k) Plan, but for limitations under the Internal Revenue Code, and salary and short-term incentive compensation the named executive officer has elected to defer.(2)Company contributions represent amounts that would have been contributed under the tax-qualified benefit plans, but for limitations under the Internal Revenue Code. The Company contributions for each named executive officer to the Deferred Compensation Plan are included in the “All Other Compensation” column of the 2014 Summary Compensation Table.(3)Aggregate balances at December 31, 2014 reflect amounts accumulated through the named executive officer’s participation in the plans from: (a) participant and Company contributions under the Deferred Compensation Plan, and (b) participant contributions only under the Gain Deferral Plan. Our named executive officers have participated in the Deferred Compensation Plan since 1999 for Mr. Scudder, 2011 for Mr. Sander, 2006 for Mr. Clemens, 1998 for Mr. Carapella and 2012 for Mr. Prame. Our named executive officers have participated in the Gain Deferral Plan since 2004 for Messrs. Scudder and Carapella.(4)As of December 31, 2014, the portion of the aggregate balances in the Deferred Compensation Plan and Gain Deferral Plan (as applicable) that represent Common Stock of the Company is as follows: 9,120 shares for Mr. Scudder, 0 shares for Mr. Sander, 1,929 shares for Mr. Clemens, 50,621 shares for Mr. Carapella and 1,921 shares for Mr. Prame. (otherCompany or in the event of an involuntary termination of employment (other than for cause) or a resignation of employment for good reason following a change-in-control.nonsolicitationnon-solicitation and nondisparagementnon-disparagement covenants by the executive and severance payments to be made to the executive upon certain terminations of employment. Termination of employment also may impact equity awards that we have granted, as well as benefits payable under our employee benefit plans.nonsolicitationnon-solicitation provisions in these agreements apply for eighteen months after49CarapellaPrame and Prame.20142016 and that the value of a share of our Common Stock on that day was $17.11,$25.23, which is the closing price of our stock as reported by the NASDAQ Stock Market on December 31, 2014.whichthat are not enhanced by a termination of employment or change-in-control. These payments and benefits, which are referred to in the following discussion as the executive officer’s “vested benefits,” include:lapse.lapse and not vest. Following attainment of age 65, in the event of a named executive officer’s retirement, we have provided that, in addition to payment of the executive’s vested benefits:retirement.retirement and as to which the performance periods have not concluded. The portion of each unearned performance share award that may vest is based on the achievement of the applicable performance goals during the entire performance period, and is calculated by multiplying the target number of performance shares by a fraction, the numerator of which is the number of whole months that have elapsed from the beginning of the applicable performance period to the date of termination of employmentresignation and the denominator of which is 36.2014, only Mr. Carapella2016, none of our named executive officers had attained age 65. The following table summarizes the unearned or unvested restricted stock or restricted stock units and performance shares (assuming target performance) that would have vested on December 31, 2014 if the executive’s employment terminated that day due to voluntary resignation.50 Name Number Value Number Value Michael L. Scudder N/A N/A N/A N/A Mark G. Sander N/A N/A N/A N/A Paul F. Clemens N/A N/A N/A N/A Victor P. Carapella 29,043 $ 496,926 6,138 $ 105,021 Thomas M. Prame N/A N/A N/A N/A or her duties of employment, engaged in illegal or gross misconduct that harms the Company, has been convicted of a felony involving dishonesty, fraud, theft or financial impropriety or has violated a material requirement of any code of ethics or standard of conduct of the Company.disability, subject to a monthly maximum benefit under the plan of $20,000.disability. These benefits would be paid to the named executive officer or his beneficiary, in addition to the executive’s vested benefits, in the event of death or disability.20142016 is set forth in the following table: Disability Benefits Name Life Insurance (Death) Benefit Monthly Amount Months to Age 65 Total Payment Michael L. Scudder $ 1,000,000 $ 20,000 127 $ 2,540,000 Mark G. Sander 750,000 20,000 107 2,140,000 Paul F. Clemens 750,000 18,800 31 582,800 700,000 N/A N/A N/A Thomas M. Prame 601,000 15,008 239 3,586,912 (1)As of December 31, 2014, Mr. Carapella had attained age 65 and was no longer eligible for disability benefits.
(Death) Benefit
Amount
Age 65
Paymentdisability.disability and as to which the performance periods have not concluded. The portion of each unearned performance share award that may vest is based on the achievement of the applicable performance goals during the entire performance period, and is calculated by multiplying the target number of performance shares by a fraction, the numerator of which is the number of whole months that51 unearned or unvested restricted stock or restricted stock units, earned but unvested performance shares and unearned performance shares (assuming target performance) that would have vested on December 31, 20142016 if the executive’s employment terminated that day due to death or disability. Name Number Value Number Value Michael L. Scudder 103,750 $ 1,775,162 36,480 $ 624,167 Mark G. Sander 65,233 1,116,137 22,969 392,994 Paul F. Clemens 29,957 512,564 6,685 114,386 Victor P. Carapella 29,043 496,926 6,138 105,021 Thomas M. Prame 22,274 381,107 4,278 73,197
Awards/Unitsor her appointed positions, responsibilities or authority, failed to pay or provide the agreed-upon compensation, given notice that the agreement will not automatically renew, or required the executive to move to an office location more than eighty miles from his or her current location. Our primary obligation in these circumstances is to continue the executive’s salary and participation in group health plans for a defined severance period and to pay a pro-rata annual bonus (based on target performance) for the year employment terminates. We will also provide outplacement assistance. The severance period is nine months for Mr.Messrs. Scudder and Mr. Sander and six months for the other named executive officers. The severance period may be extended for up to an additional six-month period in the Company’s sole discretion. The executive is required to execute a general release of claims as a condition to receiving severance benefits.2014:2016:
Amount
of
Months
Continuation/
Lump Sum
Annual
Bonus(1)
Benefits/Out-
placement(2)Name Total Michael L. Scudder $ 62,500 9 $ 562,500 $ 450,000 $ 100,635 $ 1,113,135 Mark G. Sander 45,417 9 408,750 272,500 76,035 757,285 Paul F. Clemens 31,333 6 188,000 150,400 50,152 388,552 Victor P. Carapella 29,167 6 175,000 140,000 47,032 362,032 Thomas M. Prame 25,013 6 150,079 120,063 42,607 312,749 (1) of termination and number of days elapsed at date of termination. Amounts reflect full 2014 target bonus and assumes termination occurred on last day of the year.(2)Reflects amount of health benefit continuation (COBRA) premium paid by the Company during the salary continuation period and outplacement services estimated to be 12% of annual base salary.52 other than for cause or disability following the change-in-control. The enhanced severance benefits consist of a lump sum payment of, in the case of Messrs. Scudder and Sander, approximately 2.5 times the sum of base salary, targetthe average of the annual cash incentive compensation and certain other amountsearned for the prior three completed years (or, in the case of Mr. Scudder, if greater, his target annual cash incentive compensation for the year in which the termination occurs), and Mr. Sandercertain other amounts, and, in the case of the other named executive officers, approximately two2 times the sum of base salary, the average of the annual cash incentive compensation earned for the prior three completed years (or, in the case of Mr. Clemens, if greater, his target annual cash incentive compensation for the year in which the termination occurs), and certain other amountsamounts. The lump sum further includes payment of a pro-rata annual bonus (based on target performance) for the other named executive officers.year employment terminates. In addition, all unearned and unvested equity awards granted prior to 2016 will vest in full upon a change-in-control, whether or not the executive’s employment terminates. However, beginning with our equity awards granted in 2016, all new equity awards will require a “double trigger” to occur before unearned and unvested equity awards will vest in connection with a change-in-control. As such, both a change-in-control of the Company and a termination of employment within 24 months following the change-in-control by either the executive for good reason or an acquirer without cause must occur in order for the unearned or unvested equity awards to vest. None of the employment agreements with our named executive officers provide for a gross-up payment should the executive be subject to an excise tax under the Internal Revenue Code.2014. Equity Awards Name Number Value Number Value Michael L. Scudder $ 3,454,866 103,750 $ 1,775,162 72,990 $ 1,248,859 $ 3,024,021 Mark G. Sander 2,312,214 65,233 1,116,137 44,622 763,482 1,879,619 Paul F. Clemens 1,198,130 29,957 512,564 12,951 221,592 734,156 Victor P. Carapella 1,155,905 29,043 496,926 11,928 204,088 701,014 Thomas M. Prame 966,559 22,274 381,107 8,284 141,740 522,847
Cash
Awards/Units
Amount
Equity Value
PaymentCOMPENSATION COMMITTEE REPORTThe Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis that appears in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.J. Stephen Vanderwoude (Chair)Barbara A. Boigegrain (Vice-Chair)Br. James GaffneyPeter J. HenselerJohn L. SterlingMembers, Compensation Committee53ourits oversight responsibilities, we relythe Audit Committee relies on the expertise and knowledge of management, the independent registered public accounting firm and the internal auditors. Management is responsible for determining that the Company’s financial statements are complete, accurate and in accordance with U.S. generally accepted accounting principles. Management is responsible for maintaining appropriate accounting and financial reporting principles and policies as well as internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. OurThe Company’s independent registered public accounting firm is responsible for planning and carrying out a proper audit of the Company’s financial statements and internal control over financial reporting. The internal auditors are responsible for evaluating the adequacy and effectiveness of the Company’s processes and system of internal controls to achieve the Company’s stated goals and objectives. It is not the duty of the Audit Committee to plan or conduct audits, to determine that the Company’s financial statements are complete and accurate and are in accordance with U.S. generally accepted accounting principles, or to conduct investigations or other types of auditing or accounting reviews or procedures.We haveThe Audit Committee has reviewed and had discussions with management and Ernst & Young LLP regarding the Company’s audited financial statements for the year ended December 31, 2014. We2016. The Audit Committee also havehas discussed with Ernst & Young LLP the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. We haveThe Audit Committee has received the required disclosures from Ernst & Young LLP under applicable PCAOB standards regarding auditor independence, and havehas discussed with Ernst & Young LLP its independence. We haveThe Audit Committee has established policies and procedures regarding the pre-approval of all services provided by Ernst & Young LLP. We haveThe Audit Committee has reviewed the audit and non-audit services provided by Ernst & Young LLP for the year ended December 31, 20142016 and considered whether such services are compatible with maintaining its independence, and determined to engage Ernst & Young LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2015.2017.ourthe Audit Committee’s review of the Company’s audited financial statements and the discussions noted above, and subject to the limitations on the role and responsibilities of the Audit Committee referred to above and in ourits charter, we havethe Audit Committee has recommended to the Board of Directors that the Company’s audited financial statements for the year ended December 31, 20142016 be included in the Company’s Annual Report on Form 10-K for the same year filed with the SEC.Patrick J. McDonnell (Chair)John F. Chlebowski, Jr. (Vice Chair)Phupinder S. GillEllen A. RudnickMichael J. SmallMembers, Audit Committee54Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors and executive officers and persons who own more than 10% of a registered class of our equity securities to file reports of ownership of, and transactions in, our equity securities with the SEC. Such directors, executive officers and stockholders are also required to furnish us with copies of all reports they file under Section 16(a). Reports of purchases and sales of our securities by such persons are available on our website at www.firstmidwest.com/secdocuments/. Based on a review of the copies of such reports, and on written representations from our directors and executive officers, we believe that all Section 16(a) filing requirements applicable to our directors and executive officers were complied with during the fiscal year ended December 31, 2014.2016.20162018 Annual Meeting of Stockholders20162018 annual meeting of stockholders must submit their proposals on or before December 16, 2015[13], 2017 to First Midwest Bancorp, Inc., Attn: Corporate Secretary, One Pierce Place, Suite 1500, Itasca, Illinois 60143.20162018 annual meeting of stockholders (but not necessarily contained in our proxy statement), a stockholder’s notice of the matter must comply with the requirements in our Certificate of Incorporation and be timely delivered to First Midwest Bancorp, Inc., Attn: Corporate Secretary, One Pierce Place, Suite 1500, Itasca, Illinois 60143, not less than 120 nor more than 180 days prior to the date of the meeting, which currently is scheduled for May 18, 2016.16, 2018. As a result, any notice given by or on behalf of a stockholder under these provisions of our Certificate of Incorporation (and not pursuant to the SEC’s Rule 14a-8) must be received no earlier than November 20, 201517, 2017 and no later than January 19, 2016.55
16, 2018.Stockholder Recommendations for Director CandidatesThe Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The policy of the Nominating and Corporate Governance Committee is to consider candidates recommended by stockholders in the same manner as other candidates. Stockholders who wish to submit director candidates for consideration by the Nominating and Corporate Governance Committee for election at our 2016 annual meeting of stockholders may do so by submitting in writing such candidates’ names in compliance with the procedures required by our Certificate of Incorporation to First Midwest Bancorp, Inc., Attn: Corporate Secretary, One Pierce Place, Suite 1500, Itasca, Illinois 60143 between November 20, 2015 and January 19, 2016.20142016 Annual Report upon a request, orally or in writing, to our Corporate Secretary (1) by mail at One Pierce Place, Suite 1500, Itasca, Illinois 60143, or (2) by telephone at (630) 875-7463.No director may be removed from office except for cause; provided, that, in addition to any affirmative vote required by law or any other provision of this Restated Certificate of Incorporation, the removal of any director shall require the affirmative vote of the holders of at least 67% of the voting power of the then outstanding Voting Stock [it being understood that, Ffor purposes of this paragraph (c), each share of the Voting Stock shall have the number of votes granted to it pursuant to this Article Fourth], and such affirmative vote shall be required notwithstanding the fact that a lesser percentage may be specified by law or in any agreement with any national securities exchange or otherwise.Nicholas J. ChulosExecutive Vice President, Corporate SecretaryBoard of Directors shall be and is divided into three classes, Class I, Class II and Class III, which shall be as nearly equal in number as possible. Each director shall serve for a term ending on the date of the third annual meeting of stockholders of the Corporation following the annual meeting at which such director was elected; provided, however, that (1) each director in Class I elected at the annual meeting of stockholdersin 1985 shall hold office until the annual meeting of stockholders in 1986, (2) each director in Class II elected at the annual meeting of stockholders in 1985 shall hold office until the annual meeting of stockholders in 1987, and (3) each director in Class III elected at the annual meeting of stockholders in 1985 shall hold office until the annual meeting of stockholders in 1988.(d)In the event of any increase or decrease in the authorized number of directors, (1) each director then serving as such shall nevertheless continue as a director of the class of which he or she is a member until the expiration of his or her current term, or his or her prior death, retirement, resignation, or removal, and (2) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three classes of directors so as to maintain such classes as nearly equal in number as possible.(e)Notwithstanding any of the foregoing provisions of this Article Fifth, eEach director shall serve until his or her successor is elected and qualified or until his or her death, retirement, resignation or removal. Should a vacancy occur or be created, whether arising through death, retirement, resignation or removal of a director or through an increase in the number of directors of any class, such vacancy shall be filled by a majority vote of the remaining directors of all classes then in office although less than a quorum, or by the sole remaining director. A director elected to fill a vacancy arising through death, retirement, resignation or removal of a director shall hold office until the end of the term to which such director’s predecessor was chosen. A director so elected to fill a vacancy created through an increase in the number of directors shall serve a term of office to expire at the next annual meeting of stockholders. serve for the remainder of the then present term of office of the class in which the vacancy shall have occurred or shall have been created.(f)Notwithstanding any of the foregoing provisions of this Article Fifth, whenever the holders of any outstanding class or series of Preferred Stock shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation and of the resolution of the Board of Directors providing for the issue of such class or series of Preferred Stock applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article Fifth, unless expressly provided by such terms.(g)The Board of Directors, by resolution adopted by the affirmative vote of at least a majority of all members thereof, shall have concurrent power with the stockholders to adopt, amend or repeal the By-laws of the Corporation; provided, however, that the By-laws of the Corporation shall not be adopted, amended or repealed by the stockholders except by the affirmative vote of the holders of at least 67% of the voting power of the then outstanding Voting Stock, voting together as a single class [it being understood that, for purposes of this paragraph (fg), each share of the Voting Stock shall have the number of votes granted to it pursuant to Article Fourth hereof], and such affirmative vote shall be required notwithstanding the fact that a lesser percentage may be specified by law or in any agreement with any national securities exchange or otherwise.(h)Wherever the term “Board of Directors” is used in this Restated Certificate of Incorporation, such term shall mean the Board of Directors of the Corporation;(i)The books of the Corporation (subject to the provisions of the laws of the State of Delaware) may be kept outside of the State of Delaware at such places as may be from time to time designated by the Board of Directors. Elections of directors need not be by ballot unless the By-laws so provide.(j)No Director of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a Director, except to the extent that such exemption from liability or limitation thereof is not permitted under the General CounselCorporation Law of the State of Delaware, as it may be in effect from time to time. No amendment to or repeal of this paragraph (ij) shall apply to or have any effect on the liability or alleged liability of any Director of the Corporation for or with respect to any acts or omissions of such Director occurring prior to such amendment or repeal.One Hundred Fifty One Million (151,000,000) shares, of which One Million (1,000,000) shares shall be shares of Preferred Stock without par value (hereinafter sometimes referred to as “Preferred Stock”), and Two Hundred Fifty Million (250,000,000)One Hundred Fifty Million (150,000,000) shares shall be shares of Common Stock, $0.01 par value per share (hereinafter sometimes referred to as “Common Stock”).April 14, 201556