UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
FIRST MIDWEST FINANCIAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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4) Date Filed:
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[FIRST MIDWEST FINANCIAL, INC. LETTERHEAD]
December 17, 2003
Dear Fellow Shareholders:
On behalf of the Board of Directors and management of First Midwest
Financial, Inc., we cordially invite you to attend our Annual Meeting of
shareholders. The meeting will be held at 1:00 p.m. local time on Monday,
January 26, 2004, at our main office located at Fifth at Erie, Storm Lake, Iowa.
The attached Notice of Annual Meeting of Shareholders and Proxy Statement
discuss the business to be conducted at the meeting. We have also enclosed a
copy of our Annual Report to Shareholders. At the meeting, we will report on
First Midwest Financial's operations and outlook for the year ahead.
We encourage you to attend the meeting in person. Whether or not you plan
to attend, however, please read the enclosed Proxy Statement and then complete,
sign and date the enclosed proxy card and return it in the accompanying postpaid
return envelope as promptly as possible. This will save us the additional
expense of soliciting proxies and will ensure that your shares are represented
at the meeting. Regardless of the number of shares you own, your vote is very
important. Please act today.
Your Board of Directors and management are committed to the continued
success of First Midwest Financial and the enhancement of your investment. As
Chairman of the Board and Chief Executive Officer, I want to express my
appreciation for your confidence and support.
Very truly yours,
/s/ James S. Haahr
-------------------------
JAMES S. HAAHR
Chairman of the Board and
Chief Executive Officer
FIRST MIDWEST FINANCIAL, INC.
Fifth at Erie
Storm Lake, Iowa 50588
(712) 732-4117
__________________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on January 26, 2004
__________________________________________________
Notice is hereby given that the Annual Meeting of shareholders of First
Midwest Financial, Inc. will be held at our main office located at Fifth at
Erie, Storm Lake, Iowa, on Monday, January 26, 2004, at 1:00 p.m. local time. At
the Annual Meeting, shareholders will be asked to consider and vote on the
following:
o Election of three (3) directors, each for a term of three (3) years.
Your Board of Directors recommends that you vote "FOR" the election of each
of the director nominees.
Shareholders also will transact any other business that may properly come
before the Annual Meeting, or any adjournments or postponements thereof. We are
not aware of any other business to come before the meeting.
The record date for the Annual Meeting is December 1, 2003. Only
shareholders of record at the close of business on that date are entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof.
A proxy card and proxy statement for the Annual Meeting are enclosed.
Whether or not you plan to attend the Annual Meeting, please take the time to
vote now by signing, dating and mailing the enclosed proxy card which is
solicited on behalf of the Board of Directors. Your proxy will not be used if
you attend and vote at the Annual Meeting in person. Regardless of the number of
shares you own, your vote is very important. Please act today.
Thank you for your continued interest and support.
By Order of the Board of Directors
/s/ James S. Haahr
-----------------------------------
JAMES S. HAAHR
Chairman of the Board and
Chief Executive Officer
Storm Lake, Iowa
December 17, 2003
================================================================================
Important: The prompt return of proxies will save us the expense of further
requests for proxies to ensure a quorum at the Annual Meeting. A pre-addressed
envelope is enclosed for your convenience. No postage is required if mailed
within the United States.
================================================================================
FIRST MIDWEST FINANCIAL, INC.
Fifth at Erie
Storm Lake, Iowa 50588
(712) 732-4117
__________________________
PROXY STATEMENT
__________________________
ANNUAL MEETING OF SHAREHOLDERS
To be held January 26, 2004
INTRODUCTION
Our Board of Directors is using this proxy statement to solicit proxies
from the holders of First Midwest Financial, Inc. ("First Midwest" or "Company")
common stock for use at First Midwest's Annual Meeting of shareholders ("Annual
Meeting"). We are mailing this proxy statement and the enclosed form of proxy to
our shareholders on or about December 17, 2003.
Certain information provided herein relates to First Federal Savings Bank
of the Midwest and Security State Bank, both of which are wholly owned
subsidiaries of First Midwest. First Federal Savings Bank of the Midwest and
Security State Bank are sometimes referred to in this proxy statement as "First
Federal" and "Security State," respectively. First Federal and Security State
are collectively referred to in this proxy statement as the "Banks."
INFORMATION ABOUT THE ANNUAL MEETING
Time and Place of the Annual Meeting; Matters to be Considered at the Annual
Meeting
Time and Place of the Annual Meeting. Our Annual Meeting will be held as
follows:
Date: January 26, 2004
Time: 1:00 p.m., local time
Place: First Federal Savings Bank of the Midwest
Fifth at Erie
Storm Lake, Iowa
Matters to be Considered at the Annual Meeting. At the Annual Meeting,
shareholders of First Midwest are being asked to consider and vote upon the
election of three directors, each for a three-year term. The shareholders also
will transact any other business that may properly come before the Annual
Meeting. As of the date of this proxy statement, we are not aware of any other
business to be presented for consideration at the Annual Meeting other than the
matters described in this proxy statement.
Voting Rights; Vote Required
Voting Rights of Shareholders. December 1, 2003 is the record date for the
Annual Meeting. Only shareholders of record of First Midwest common stock as of
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the close of business on that date are entitled to notice of, and to vote at,
the Annual Meeting. You are entitled to one vote for each share of First Midwest
common stock you own. On December 1, 2003, 2,505,617 shares of First Midwest
common stock were outstanding and entitled to vote at the Annual Meeting.
ESOP Shares. We maintain the First Midwest Employee Stock Ownership Plan
("ESOP"), which owns approximately 11.03 percent of the First Midwest common
stock outstanding. Employees of First Midwest and the Banks participate in the
ESOP. Each ESOP participant is entitled to instruct the trustee of the ESOP how
to vote such participant's shares of First Midwest common stock allocated to his
or her ESOP account. If an ESOP participant properly executes the voting
instruction card distributed by the ESOP trustee, the ESOP trustee will vote
such participant's shares in accordance with the participant's instructions.
Where properly executed voting instruction cards are returned to the ESOP
trustee with no specific instruction as how to vote at the Annual Meeting, the
trustee may vote such shares in its discretion. In the event the ESOP
participant fails to give timely voting instructions to the trustee with respect
to the voting of the common stock that is allocated to the participant's ESOP
account, the ESOP trustee may vote such shares in its discretion. The ESOP
trustee will vote the shares of First Midwest common stock held in the ESOP but
not allocated to any participant's account in the manner directed by the
majority of the participants who directed the trustee as to the manner of voting
their allocated shares.
Shares held by a Broker. If you are the beneficial owner of shares held by
a broker in "street name," your broker, as the record holder of the shares, will
vote the shares in accordance with your instructions. If you do not give
instructions to your broker, your broker will nevertheless be entitled to vote
the shares with respect to "discretionary" items, but will not be permitted to
vote your shares with respect to "non-discretionary" items. In the case of
non-discretionary items, the shares will be treated as "broker non-votes." The
election of directors is expected to be considered a "discretionary" item, in
which case your broker may vote your shares without instructions from you.
Votes Required for Election of Directors and a Quorum. Directors are
elected by a plurality of the votes cast, in person or by proxy, at the Annual
Meeting by holders of First Midwest common stock. This means that the three
director nominees with the most affirmative votes will be elected to fill the
three available seats. Shares that are represented by proxy which are marked
"vote withheld" for the election of one or more director nominees and broker
non-votes will have no effect on the vote for the election of directors,
although they will be counted for purposes of determining whether there is a
quorum. A quorum is necessary in order for us to conduct the Annual Meeting, and
if one-third of all the shares entitled to vote are in attendance at the
meeting, either in person or by proxy, then the quorum requirement is met.
If a director nominee is unable to stand for election, the Board of
Directors may either reduce the number of directors to be elected or select a
substitute nominee. If a substitute nominee is selected, the proxy holders will
vote your shares for the substitute nominee, unless you have withheld authority.
As of the date of this Proxy Statement, we are not aware of any reason that a
director nominee would be unable to stand for election.
Your Board of Directors unanimously recommends that you vote "FOR" each of
the director nominees set forth in this proxy statement.
Voting of Proxies; Revocability of Proxies; Proxy Solicitation Costs
Voting of Proxies. You may vote in person at the Annual Meeting or by
proxy. To ensure your representation at the Annual Meeting, we recommend that
you vote now by proxy even if you plan to attend the Annual Meeting. You may
change your vote by attending and voting at the Annual Meeting or by submitting
another proxy with a later date. See "-Revocability of Proxies" below.
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Voting instructions are included on your proxy card. Shares of First
Midwest common stock represented by properly executed proxies will be voted by
the individuals named in such proxy in accordance with the shareholder's
instructions. Where properly executed proxies are returned to First Midwest with
no specific instruction as how to vote at the Annual Meeting, the persons named
in the proxy will vote the shares "FOR" the election of each of the director
nominees.
The persons named in the proxy will have the discretion to vote on any
other business properly presented for consideration at the Annual Meeting in
accordance with their best judgment. We are not aware of any other matters to be
presented at the Annual Meeting other than those described in the Notice of
Annual Meeting of Shareholders accompanying this document.
You may receive more than one proxy card depending on how your shares are
held. For example, you may hold some of your shares individually, some jointly
with your spouse and some in trust for your children -- in which case you would
receive three separate proxy cards to vote.
Revocability of Proxies. You may revoke your proxy before it is voted by:
o submitting a new proxy with a later date,
o notifying the Corporate Secretary of First Midwest in writing before
the Annual Meeting that you have revoked your proxy, or
o voting in person at the Annual Meeting.
If you plan to attend the Annual Meeting and wish to vote in person, we
will give you a ballot at the Annual Meeting. However, if your shares are held
in the name of your broker, bank or other nominee, you must bring an
authorization letter from the broker, bank or nominee indicating that you were
the beneficial owner of First Midwest common stock on December 1, 2003, the
record date for voting at the Annual Meeting, if you wish to vote in person.
Proxy Solicitation Costs. We will pay our own costs of soliciting proxies.
In addition to this mailing, First Midwest's directors, officers and employees
may also solicit proxies personally, electronically or by telephone. We will
also reimburse brokers, banks and other nominees for their expenses in sending
these materials to you and obtaining your voting instructions.
STOCK OWNERSHIP
The following table presents information regarding the beneficial ownership
of First Midwest common stock as of December 1, 2003, by:
o those persons or entities (or group of affiliated persons or entities)
known by management to beneficially own more than five percent of our
outstanding common stock;
o each director and director nominee of First Midwest;
o each executive officer of First Midwest named in the Summary
Compensation Table appearing under "Executive Compensation" below; and
o all of the executive officers and directors of First Midwest as a
group.
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The persons named in the table below have sole voting power for all shares
of common stock shown as beneficially owned by them, subject to community
property laws where applicable and except as indicated in the footnotes to the
table.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC"). In computing the number of
shares beneficially owned by a person and the percentage ownership of that
person, shares of common stock subject to outstanding options held by that
person that are currently exercisable or exercisable within 60 days after
December 1, 2003 are deemed outstanding. Such shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any other
person.
Shares Beneficially
Beneficial Owners Owned (1) Percent of Class
----------------------------------------------------------------- -------------------- ------------------
Tontine Financial Partners, L.P. 201,000 8.02%
First Midwest Financial, Inc. Employee Stock Ownership Plan(2) 276,260 11.03
E. Wayne Cooley, Director(3) 75,970 3.03
E. Thurman Gaskill, Director(4) 50,014 2.00
James S. Haahr, Chairman of the Board and CEO(5) 325,822 12.71
J. Tyler Haahr, Director, President and COO(5) (6) 132,124 5.13
G. Mark Mickelson, Director 640 *
Rodney G. Muilenburg, Director(7) 109,051 4.35
Jeanne Partlow, Director 3,978 *
Donald J. Winchell, Senior Vice President, Secretary, Treasurer 124,846 4.98
and CFO(8)
John Thune, Director 100 *
Directors and executive officers of First Midwest 822,545 31.22
and the Banks as a group (8 persons)(9)
------------------
* Indicates less than 1%.
(1) Included in the shares beneficially owned by the named individuals are
options to purchase shares of First Midwest common stock exercisable within
60 days of December 1, 2003, as follows: Mr. James S. Haahr - 57,532 shares
and Mr. J. Tyler Haahr - 71,114 shares.
(2) Represents shares held by the ESOP, 252,448 shares of which have been
allocated to accounts of participants. Pursuant to the terms of the ESOP,
each ESOP participant has the right to direct the voting of shares of
common stock allocated to his or her account under the ESOP. West Des
Moines State Bank, West Des Moines, Iowa, as the ESOP trustee, may be
deemed to beneficially own the shares held by the ESOP which have not been
allocated to the accounts of participants.
(3) Includes 5,100 shares as to which Mr. Cooley has reported shared ownership.
(4) Includes 49,114 shares as to which Mr. Gaskill has reported shared
ownership.
(5) Mr. James S. Haahr is the father of Mr. J. Tyler Haahr.
(6) Includes 33,032 shares as to which Mr. J. Tyler Haahr has reported shared
ownership.
(7) Includes 44,144 shares as to which Mr. Muilenburg has reported shared
ownership.
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(8) Includes 39,500 shares as to which Mr. Winchell has reported shared
ownership.
(9) Includes shares held directly, as well as, jointly with family members or
held by trusts, with respect to which shares the listed individuals or
group members may be deemed to have sole or shared voting and investment
power. Included in the shares reported as beneficially owned by all
directors and executive officers are options to purchase 128,646 shares of
First Midwest common stock exercisable within 60 days of December 1, 2003.
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ELECTION OF DIRECTORS
Our Board of Directors currently consists of eight members. Approximately
one-third of the directors are elected annually to serve for a three-year period
or until their respective successors are elected and qualified. All of our
director nominees currently serve as First Midwest directors.
The table below sets forth information regarding our Board of Directors,
including their age, position with First Midwest and term of office. If any
director nominee is unable to serve before the election, your proxy authorizes a
vote for a replacement nominee if our Board of Directors names one. At this
time, we are not aware of any reason why a nominee might be unable to serve if
elected. Except as disclosed in this proxy statement, there are no arrangements
or understandings between any nominee and any other person pursuant to which
such nominee was selected. The Board of Directors recommends you vote "FOR" each
of the director nominees.
Director Term to
Name Age Position(s) Held in First Midwest Since (1) Expire
-------------------- ----- ------------------------------------ ---------- ---------
Nominees
--------
E. Wayne Cooley 81 Director 1985 2007
J. Tyler Haahr(2) 40 Director, President and COO 1992 2007
John Thune 42 Director 2003 2007
Directors Remaining in Office
-----------------------------
E. Thurman Gaskill 68 Director 1982 2005
Rodney G. Muilenburg 59 Director 1989 2005
James S. Haahr(2) 64 Chairman of the Board and CEO 1962 2006
G. Mark Mickelson 37 Director 1997 2006
Jeanne Partlow 70 Director 1996 2006
----------------------
(1) Includes service as a director of First Federal.
(2) James S. Haahr is the father of J. Tyler Haahr.
The principal occupation of each director of First Midwest and each of the
nominees for director is set forth below. All directors and nominees have held
their present position for at least five years unless otherwise indicated.
E. Wayne Cooley - Dr. Cooley is Consultant Emeritus of the Iowa Girls' High
School Athletic Union in Des Moines, Iowa. He is Executive Vice President of the
Iowa High School Speech Association, a member of the Buena Vista University
Board of Trustees, a member of the Drake Relays Executive Committee, and on the
Board of Directors of the Women's College Basketball Association Hall of Fame.
Dr. Cooley has served as Chairman of the Iowa Heart Association and as Vice
Chairman of the Iowa Games. He is a 1943 graduate of Buena Vista College in
Storm Lake, Iowa, and holds honorary doctorate degrees from Buena Vista
University in Storm Lake, Iowa and Morningside College in Sioux City, Iowa.
J. Tyler Haahr - Mr. Haahr is President and Chief Operating Officer for
First Midwest Financial, Inc.; President and Chief Operating Officer for First
Federal Savings Bank of the Midwest; Chief Executive Officer of Security State
Bank; Vice President and Secretary of First Services Financial Limited; and
President of First Services Trust Company. Mr. Haahr has been employed by First
Midwest and its affiliates since March 1997. He was previously a partner with
the law firm of Lewis and Roca LLP, Phoenix, Arizona. Mr. Haahr received his
B.S. degree with honors at the University of South Dakota in Vermillion, South
Dakota. He graduated with honors from the Georgetown University Law Center,
Washington, D.C.
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John Thune - Mr. Thune received his Master's Degree in Business
Administration from the University of South Dakota in 1984. He then worked in
Washington, DC as a legislative assistant for U.S. Senator Jim Abdnor of South
Dakota. From there, he was appointed by President Ronald Reagan to serve at the
Small Business Administration. In 1989, Mr. Thune returned to South Dakota to
serve as Executive Director of the state's Republican Party. In 1991, Governor
George S. Mickelson appointed John as State Railroad Director. He held this post
until 1993, when he accepted the position as Executive Director of the South
Dakota Municipal League. In 1996, Mr. Thune sought and won his first term as
South Dakota's lone Representative to the U.S. House. He was reelected in 1998
and 2000. He served on the Agriculture, Transportation and Infrastructure, and
Small Business Committees.
E. Thurman Gaskill - Mr. Gaskill has owned and operated a grain farming
operation located near Corwith, Iowa, since 1958. He has served as a
commissioner with the Iowa Department of Economic Development and also as a
commissioner with the Iowa Department of Natural Resources. Mr. Gaskill is the
past president of Iowa Corn Growers Association, past chairman of the United
States Feed Grains Council, and has served in numerous other agriculture
positions. He was re-elected to the Iowa State Senate in 2000 and represents
District 6. He serves as Chairman of the Senate Agricultural Committee and as
Assistant Majority Leader of the Iowa Senate.
Rodney G. Muilenburg - Mr. Muilenburg is a retired dairy specialist with
Purina Mills, Inc. He is currently a Consultant for TransOva Genetics Dairy
Division. Mr. Muilenburg received a B.A. degree in Biological Science from
Northwestern College, Orange City, Iowa; M.A. degree in secondary school
education from Mankato State University, Mankato, Minnesota; and a Specialist
Degree in secondary school administration from Mankato State University,
Mankato, Minnesota.
James S. Haahr - Mr. Haahr is the Chairman of the Board and Chief Executive
Officer for First Midwest Financial, Inc., a position he has held since June
1993. Mr. Haahr is also Chairman of the Board and Chief Executive Officer of
First Federal Savings Bank of the Midwest. Mr. Haahr serves as Chairman of the
Board of Security State Bank. Mr. Haahr has served in various capacities since
beginning his career with First Federal in 1961. He is Chairman of the Board of
Trustees and former Chairman of the Investment Committee of Buena Vista
University. He is a former member of the Savings Association Insurance Fund
Industry Advisory Committee at FDIC, and past member of the Legislative
Committee of Iowa Bankers Association. Mr. Haahr is former Vice Chairman of the
Board of Directors of the Federal Home Loan Bank of Des Moines, former Chairman
of the Iowa League of Savings Institutions, a former member of the Board of
Directors of America's Community Bankers and a former director of the U.S.
League of Savings Institutions. Mr. Haahr received his B.S. degree from Buena
Vista College in Storm Lake, Iowa.
G. Mark Mickelson - Mr. Mickelson is Vice President of Operations for Blue
Dot Services, Inc., a subsidiary of Northwestern Corporation and was previously
a principal with Northwestern Growth Corporation. Previously, Mr. Mickelson was
employed as an executive officer of Hegg Companies in Sioux Falls, South Dakota.
Mr. Mickelson received his undergraduate degree in Business Administration from
the University of South Dakota in Vermillion, South Dakota. He graduated with
high honors from Harvard Law School and is an inactive member of the South
Dakota Bar Association and a Certified Public Accountant.
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Jeanne Partlow - Mrs. Partlow retired in June 1998 as President of the Iowa
Savings Bank Division of First Federal, located in Des Moines, Iowa. She was
President, Chief Executive Officer and Chairman of the Board of Iowa Savings
Bank, F.S.B., from 1987 until the end of December 1995, when Iowa Savings Bank
was acquired by and became a division of First Federal Savings Bank of the
Midwest. Mrs. Partlow is a past member of the Board of Directors of the Federal
Home Loan Bank of Des Moines with over 30 years of bank management experience.
MEETINGS AND COMMITTEES
Meetings
Meetings of the Board of Directors are generally held on a monthly basis.
The Board of Directors conducted 12 regular meetings during fiscal 2003. Each
director attended at least 75% of the Board meetings and any committees on which
he or she served.
Committees
The Board of Directors of First Midwest has an Audit Committee,
Compensation Committee and a Stock Option Committee. Our entire Board serves as
the Nominating Committee.
Audit Committee Compensation Committee Stock Option Committee
--------------- ---------------------- ----------------------
E. Wayne Cooley E. Wayne Cooley E. Thurman Gaskill
G. Mark Mickelson E. Thurman Gaskill Rodney G. Muilenburg
Jeanne Partlow Rodney G. Muilenburg John Thune
John Thune Jeanne Partlow
The Audit Committee met three times during fiscal 2003. The functions of
the Audit Committee are as follows:
o Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and
regulatory compliance;
o Monitor the independence and performance of the Company's independent
auditors and internal auditing department; and
o Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
The Compensation Committee met once during fiscal 2003. The functions of
the Compensation Committee are as follows:
o Make salary and bonus recommendations, administer our restricted stock
plan, and determine terms and conditions of employment of the officers
of First Midwest;
o Oversee the administration of our employee benefit plans covering
employees generally; and
o Make recommendations to the Board of Directors with respect to our
compensation policies.
The Stock Option Committee met twice during fiscal 2003. The functions of
the Stock Option Committee are as follows:
o Administer our stock incentive plans; and
o Make recommendations to the Board of Directors with respect to our
stock compensation policies.
-8-
The entire Board of Directors acts as a nominating committee for selecting
nominees for election as directors. Nominations of persons for election to the
Board of Directors may be made only by or at the direction of the Board of
Directors or by any shareholder entitled to vote for the election of directors
who complies with the notice procedures set forth in the By-laws of First
Midwest. Pursuant to the By-laws, nominations by shareholders must be delivered
in writing to the Secretary of First Midwest at least 30 days prior to the date
of the Annual Meeting; provided, however, that in the event that less than 40
days' notice or prior disclosure of the date of the Annual Meeting is given or
made to shareholders, to be timely, notice by the shareholder must be received
at the executive offices of First Midwest not later than the close of business
on the 10th day following the day on which such notice of the date of the
meeting was mailed or such public disclosure thereof was made.
Audit Committee Matters
The following Report of the Audit Committee of the Board of Directors shall
not be deemed to be soliciting material or to be incorporated by reference by
any general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent First Midwest Financial, Inc. specifically incorporates
this Report therein, and shall not otherwise be deemed filed under such Acts.
Audit Committee Report. The Audit Committee has issued the following report
with respect to the audited financial statements of the Company for the fiscal
year ended September 30, 2003:
o The Audit Committee has reviewed and discussed with the Company's
management the Company's fiscal 2003 audited financial statements;
o The Audit Committee has discussed with the Company's independent
auditors (McGladrey & Pullen, LLP) the matters required to be
discussed by Statement on Auditing Standards No. 61 "Communication
with Audit Committees";
o The Audit Committee has received the written disclosures and letter
from the independent auditors required by Independence Standards Board
Standard No. 1 (which relates to the auditors' independence from the
Company and its related entities) and has discussed with the auditors
their independence from the Company; and
o Based on the review and discussions referred to in the three items
above, the Audit Committee recommended to the Board of Directors that
the fiscal 2003 audited financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2003.
Submitted by the Audit Committee of the Company's Board of Directors:
E. Wayne Cooley G. Mark Mickelson Jeanne Partlow John Thune
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Audit Committee Member Independence and Audit Committee Charter. Each
member of the First Midwest Audit Committee is "independent" under the
definition of independence contained in the National Association of Securities
Dealers' listing standards for the Nasdaq Stock Market. The Company's Board of
Directors has adopted a written audit committee charter, which is attached to
this proxy statement as Appendix A.
In accordance with SEC rules related to auditor independence, the table
below shows fees for audit services rendered by McGladrey & Pullen, LLP and fees
for other services rendered by McGladrey & Pullen, LLP or its associated entity,
RSM McGladrey, Inc., to the Company and its affiliates during the fiscal year
2003.
Audit fees........................................................$ 83,000
Audit related fees................................................$ 7,000
Tax fees..........................................................$ 9,000
Other fees........................................................$ --
COMPENSATION OF DIRECTORS
During the fiscal year ended September 30, 2003, all directors of First
Midwest received an annual retainer of $5,000. For fiscal 2003, non-employee
directors of First Federal were paid an annual retainer of $6,000 and
non-employee directors of Security State were not paid an annual retainer.
Directors of First Midwest do not receive any additional fees for attending
board or committee meetings. Each of the directors of First Midwest also serves
as a director for each of the Banks. Board members who are employees of the
Banks do not receive a fee for their service on the Banks' Boards, or their
respective committees. Non-employee directors of First Federal receive $750 for
each meeting of the board attended and $200 for each board committee meeting
attended. Non-employee directors of Security State receive $400 for each meeting
of the board attended and $100 for each board committee meeting attended.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth summary information concerning compensation
awarded to, earned by or paid to First Midwest's chief executive officer and its
other executive officers, whose total salary and bonus exceeded $100,000, for
services rendered in all capacities during the fiscal years ended September 30,
2003, 2002 and 2001. Each of these officers received perquisites and other
personal benefits in addition to salary and bonus during the periods stated. The
aggregate amount of these perquisites and other personal benefits, however, did
not exceed the lesser of $50,000 or 10% of the total of their annual salary and
bonus and, therefore, has been omitted as permitted by the rules of the SEC. We
will use the term "named executive officers" from time to time in this proxy
statement to refer to the officers listed in the table below.
Long Term
Compensation
Annual Compensation Awards
------------------- ------=------
Salary Bonus Options/SARs All Other
Name and Principal Position Year ($) ($) (#) Compensation ($)
--------------------------- ---- ---------- --------- ------------ ----------------
James S. Haahr 2003 $257,000(1) $95,000 7,500 $50,655(3)
Chairman of the Board and CEO 2002 239,000(1) 66,120 5,220 50,052
2001 207,000(1) 58,000 5,250 41,482
J. Tyler Haahr 2003 $250,000(2) $91,000 7,350 $47,812(3)
President and COO 2002 237,000(2) 66,120 5,220 47,675
2001 221,000(2) 62,640 5,670 44,483
Donald J. Winchell 2003 $152,000 $55,000 4,560 $29,668(3)
Senior Vice President, Secretary, 2002 145,500 41,468 3,274 31,030
Treasurer and CFO 2001 142,500 34,200 3,099 28,972
----------------------
(1) Includes $2,000 of deferred compensation, pursuant to the deferred
compensation agreement entered into in 1980 between Mr. James S. Haahr and
First Federal, and $5,000 for service as a director of First Midwest.
(2) Includes $5,000 paid to Mr. J. Tyler Haahr for service as a director of
First Midwest.
(3) Represents the value as of September 30, 2003 of allocations under the
ESOP, contributions under the First Federal Profit Sharing Plan, payments
under the First Federal Benefit Equalization Plan and term life insurance
premiums paid to or on behalf of the named executive officers, as follows:
Mr. James S. Haahr - $12,696, $15,582, $20,444 and $1,933, respectively;
Mr. J. Tyler Haahr - $12,696, $15,582, $19,179 and $355, respectively; and
Mr. Winchell - $12,696, $15,582, $1,017 and $373, respectively.
-11-
Option Grants in Last Fiscal Year
The following table sets forth information regarding grants of stock
options under our stock option and incentive plans made during the fiscal year
ended September 30, 2003 to the named executive officers. The amounts shown for
each named executive officer as potential realizable values are based on assumed
annualized rates of stock price appreciation of five percent and ten percent
over the full ten-year term of the options, which would result in stock prices
of approximately $35.45 and $56.45, respectively, for options with an exercise
price of $21.765. No gain to the optionees is possible without an increase in
stock price, which benefits all stockholders proportionately. Actual gains, if
any, on option exercise and common stock holdings depend upon the future
performance of First Midwest common stock and overall stock market conditions.
There can be no assurance that the potential realizable values shown in this
table will be achieved.
Potential Realizable
Value at Assumed Annual
Rates of Stock
Appreciation for Option
Individual Grants Terms
------------------------------------------------------- -----------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Granted Employees in Price Expiration 5% 10%
Name (#) Fiscal Year ($/Sh) Date ($) ($)
------------------- ---------------- -------------- --------- ---------- -------- ----------
James S. Haahr 7,500 20.4% $21.765 9/30/13 $102,638 $260,138
J. Tyler Haahr 7,350 20.0 21.765 9/30/13 100,585 254,935
Donald J. Winchell 4,560 12.4 21.765 9/30/13 62,404 158,164
The option exercise price of the options granted to the named executive
officers shown above was the fair market value of First Midwest's common stock
on the date of grant. These options vested as of the date of grant. The options
may not be transferred in any manner other than by will or the laws of descent
and distribution and may be exercised during the lifetime of the optionee only
by the optionee or his legal representative upon the optionee's death.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
The following table summarizes for each of the named executive officers
certain information relating to stock options exercised by them during the
fiscal year ended September 30, 2003. Value realized upon exercise is the
difference between the fair market value of the underlying stock on the exercise
date and the exercise or base price of the option. The value of an unexercised,
in-the-money option at fiscal year-end is the difference between its exercise or
base price and the fair market value of the underlying stock on September 30,
2003, which was $21.765 per share. These values, unlike the amounts set forth in
the column "Value Realized," have not been, and may never be, realized. These
options have not been, and may not ever be, exercised. Actual gains, if any, on
exercise will depend on the value of First Midwest common stock on the date of
exercise. There can be no assurance that these values will be realized.
Unexercisable options are those which have not yet vested.
-12-
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at FY-End (#) at FY-End
Shares -------------------------- --------------------------
Acquired
on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
------------------- ----------- -------- ----------- ------------- ----------- -------------
James S. Haahr -- -- 57,532 -- $347,827 --
J. Tyler Haahr -- -- 71,114 -- 364,265 --
Donald J. Winchell -- -- 31,796 -- 169,328 --
Employment Agreements
First Federal has an employment agreement with each of the named executive
officers. The employment agreements are designed to assist First Midwest and the
Banks in maintaining a stable and competent management team. The continued
success of First Midwest and the Banks depends, to a significant degree, on the
skills and competence of their officers. Each employment agreement provides for
annual base salary in an amount not less than the employee's current salary and
a term of three years. Each agreement provides for extensions of one year, in
addition to the then-remaining term under the agreement, on each anniversary of
the effective date of the agreement, subject to a formal performance evaluation
performed by disinterested members of the Board of Directors of First Federal.
The agreements terminate upon such named executive officer's death, for cause,
in certain events specified by Office of Thrift Supervision regulations, or by
such named executive officer upon 90 days notice to First Federal. For the year
ended September 30, 2003, the disinterested members of First Federal's Board of
Directors authorized one year extensions of the named executive officers'
employment agreements.
Each employment agreement provides for payment to the named executive
officer of the greater of his salary for the remainder of the term of the
agreement, or 299% of his base compensation, in the event there is a "change in
control" of First Midwest or First Federal where employment terminates
involuntarily in connection with such change in control or within 12 months
thereafter. This termination payment is subject to reduction by the amount of
all other compensation to the named executive officer deemed for purposes of the
Internal Revenue Code of 1986, as amended, to be contingent on a "change in
control", and may not exceed three times the named executive officer's average
annual compensation over the most recent five year period or be non-deductible
by First Federal for federal income tax purposes. For the purposes of the
employment agreements, a change in control is defined as any event which would
require the filing of an application for acquisition of control or notice of
change in control pursuant to 12 C.F.R. ss. 574.3 or ss. 574.4, respectively.
These events are generally triggered prior to the acquisition or control of 10%
of First Midwest's common stock. Each agreement also guarantees participation in
an equitable manner in employee benefits applicable to executive personnel.
Based on their current salaries, if employment of Messrs. James S. Haahr,
J. Tyler Haahr and Winchell had been terminated as of September 30, 2003, under
circumstances entitling them to termination payments as described above, they
would have been entitled to receive lump sum cash payments of approximately
$989,000, $1,067,000 and $633,000, respectively.
-13-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation of the executive officers of First Midwest and the Banks is
currently determined by the Compensation Committee of First Federal and the
Stock Option Committee of First Midwest. Directors Cooley, Gaskill, Muilenburg
and Partlow, each of whom are non-employee directors, are the current members of
the Compensation Committee. Directors Gaskill, Muilenburg and Thune, each of
whom are non-employee directors, are the current members of the Stock Option
Committee. All decisions by the First Federal Compensation Committee relating to
the cash compensation of executive officers are reviewed by the full Board of
First Federal, except that Board members who are also executive officers do not
participate in deliberations regarding their own compensation. See "Compensation
Committee Report" below.
COMPENSATION COMMITTEE REPORT
First Midwest has not paid any cash compensation to its executive officers
since its formation. All executive officers of First Midwest also currently hold
positions with First Federal and receive cash compensation from First Federal.
The function of administering the executive compensation policies of First
Federal is currently performed by the Compensation Committee of the Board of
Directors of First Federal, consisting of Directors Cooley, Gaskill, Muilenburg
and Partlow. All decisions by the First Federal Compensation Committee relating
to the cash compensation of First Federal's executive officers are reviewed by
the full Board of First Federal, except that Board members who are also
executive officers do not participate in deliberations regarding their
respective compensation.
Stock option awards granted under First Midwest's stock option and
incentive plans are made solely by the First Midwest Stock Option Committee.
Overview and Philosophy
The First Federal Compensation Committee has developed and implemented an
executive compensation program that is based on guiding principles designed to
align executive compensation with the values and objectives, business strategy,
management initiatives, and the business and financial performance of First
Midwest and the Banks. In applying these principals, the First Federal
Compensation Committee has established a program to:
o Support a performance-oriented environment that rewards performance
not only with respect to our goals, but also our performance as
compared to that of industry performance levels;
o Attract and retain key executives critical to our long-term success;
o Integrate compensation programs with both First Midwest's and the
Banks' annual and long-term strategic planning and measuring
processes; and
o Reward executives for long-term strategic management and the
enhancement of shareholder value.
Furthermore, in making compensation decisions, the First Federal
Compensation Committee focuses on the individual contributions of our executive
officers. The First Federal Compensation Committee uses its discretion to set
executive compensation where, in its judgment, external, internal or an
individual's circumstances warrant it. The First Federal Compensation Committee
also periodically reviews, both internally and through independent consultants,
the compensation policies of other similarly situated companies, as set forth in
-14-
various industry publications, to determine whether our compensation decisions
are competitive within our industry.
Executive Officer Compensation Program
The executive officer compensation program is comprised of base salary,
annual incentive bonuses, long-term incentive compensation in the form of stock
options and restricted stock awards, and various benefits, including medical and
retirement plans generally available to employees of the Banks.
Base Salary. Base salary levels for executive officers are competitively
set relative to other publicly traded banking and thrift companies. In
determining base salaries, the First Federal Compensation Committee also takes
into account individual experience and performance and specific issues
particular to First Midwest and the Banks.
Annual Incentive Bonuses. A program of annual incentive bonuses has been
established for executive officers of First Midwest and the Banks to reward
those officers who provide a level of performance warranting recognition in the
form of compensation above base salary. Incentive bonuses are awarded based on
achievement of individual performance goals and overall performance goals of
First Midwest and the Banks, which are established at the beginning of each
fiscal year. Awards are determined as a percentage of each executive officer's
base salary.
Stock Benefit Plans. The stock option and incentive plans are our long-term
incentive plans for directors, officers and employees. The objective of the
program is to align executive and shareholder long-term interests by creating a
strong and direct link between executive pay and First Midwest's performance,
and to enable executives to develop and maintain a significant, long-term stock
ownership position in First Midwest common stock. Awards are made at a level
calculated to be competitive with other publicly traded banking and thrift
companies.
Chief Executive Officer Compensation
Mr. James S. Haahr was appointed to the position of President and Chief
Executive Officer of First Federal in 1974 and Chairman in 1990, and has also
served in such capacities with First Midwest since its incorporation in 1993.
Mr. Haahr's fiscal 2003 base salary was $250,000 per year, subject to such
adjustments in future years as shall be determined by the First Federal
Compensation Committee. Mr. Haahr's base salary for the fiscal year ended
September 30, 2002 was $232,000. In reviewing Mr. Haahr's fiscal 2003 base
salary, the First Federal Compensation Committee noted the median base salary
paid to executive officers in comparable positions was higher than that paid to
Mr. Haahr. As such, the First Federal Compensation Committee determined it
appropriate to increase Mr. Haahr's base salary for fiscal 2003.
In reviewing the award of incentive-based compensation to Mr. Haahr for
fiscal 2003, the Committee noted increases in net income, earnings per share,
return on assets, and return on equity compared to the previous year. Deposit
balances grew to an all-time high as a result of internal growth from existing
and newly opened offices. Lower costing transaction accounts increased
significantly during the year. Loan balances also rose to an all-time high,
while the ratio of non-performing loans to total loans at fiscal year end
continues to be below state and national averages. As such, the First Federal
Compensation Committee and the First Midwest Stock Option Committee determined
First Midwest's overall performance warranted the payment of a cash bonus and an
award of stock options to Mr. Haahr for fiscal 2003.
-15-
The effect of Section 162(m) of the Internal Revenue Code is to eliminate
the deductibility of compensation over one million dollars, with certain
exclusions, paid to each of certain highly compensated executive officers of
publicly held corporations. Section 162(m) applies to all remuneration, both
cash and non-cash, that would otherwise be deductible for tax years beginning on
or after January 1, 1994, unless expressly excluded. Because the current
compensation of each of our named executive officers is below the $1 million
threshold, we have not yet considered our policy regarding this provision.
The foregoing report is furnished by the members of the Compensation
Committee of First Federal and Stock Option Committee of the Board of Directors
of First Midwest.
E. Wayne Cooley E. Thurman Gaskill Rodney G. Muilenburg Jeanne Partlow John Thune
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The rules and regulations of the SEC require the presentation of a line
graph comparing, over a period of five years, the cumulative total shareholder
return to a performance indicator of a broad equity market index and either a
nationally recognized industry index or a peer group index constructed by us.
The following graph compares the performance of First Midwest's common stock
with the Media General Savings and Loan Index and the Nasdaq Stock Market Index.
The comparison assumes $100 was invested on September 30, 1998 in our common
stock and in each of the foregoing indices and assumes the reinvestment of all
dividends. Historical stock price performance is not necessarily indicative of
future stock price performance.
[Performance Graph Appears Here]
Comparison of Five-year Cumulative Total Return
(First Midwest, Media General Savings and Loan Index and the
Nasdaq Stock Market Index)
-----------------------------------------------------
1998 1999 2000 2001 2002 2003
-----------------------------------------------------
FIRST MIDWEST........... 100.00 76.55 59.95 89.05 97.57 155.44
MG GROUP INDEX.......... 100.00 96.18 117.51 156.74 164.48 219.73
NASDAQ MARKET........... 100.00 161.77 221.30 90.67 72.95 111.80
-16-
CERTAIN TRANSACTIONS
The Banks have followed a policy of granting loans to eligible directors,
officers, employees and members of their immediate families for the financing of
their personal residences and for consumer purposes. As of September 30, 2003,
all loans or extensions of credit to executive officers and directors were made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with the general public
and do not involve more than the normal risk of repayment or present other
unfavorable features.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires First
Midwest's directors and executive officers, and persons who own more than 10% of
a registered class of First Midwest's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of First
Midwest common stock and other equity securities of First Midwest generally by
the second business day following a transaction. Officers, directors and greater
than 10% shareholders are required by SEC regulations to furnish First Midwest
with copies of all Section 16(a) forms they file.
To First Midwest's knowledge, based solely on a review of the copies of
such reports furnished to First Midwest and written representations that no
other reports were required during the fiscal year ended September 30, 2003, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with, except that during
the fiscal year ended September 30, 2003, Mr. Gaskill and Mr. Thune each
inadvertently failed to timely report one transaction. Each late transaction
report was subsequently filed.
INDEPENDENT AUDITORS
The Company's independent auditors are McGladrey & Pullen, LLP, independent
certified public accountants. Representatives of McGladrey & Pullen, LLP are
expected to be present at the Annual Meeting to respond to appropriate questions
and to make a statement if they desire.
The Company's Audit Committee has considered and concluded that the
provision of all non-auditing services (and the aggregate fees billed for such
services) in the fiscal year ended September 30, 2003 by McGladrey & Pullen,
LLP, the principal independent auditors, is compatible with maintaining the
principal auditors' independence.
SHAREHOLDER PROPOSALS FOR THE YEAR 2005 ANNUAL MEETING
Shareholder proposals to be presented at First Midwest's 2005 Annual
Meeting of Shareholders must be received by our Secretary no later than August
17, 2004 to be eligible for inclusion in the First Midwest's proxy statement and
form of proxy related to the 2005 Annual Meeting. Any such proposal will be
subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934, as amended, and as with any shareholder proposal
(regardless of whether such proposal is included in First Midwest's proxy
materials), First Midwest's certificate of incorporation, by-laws and Delaware
law.
To be considered for presentation at the next Annual Meeting, but not for
inclusion in the Company's proxy statement and form of proxy for that meeting,
proposals must be received by the Company by the Deadline. The "Deadline" means
the date that is 30 days prior to the date of the next Annual Meeting; however,
in the event that less than 40 days' notice of the date of such meeting is given
-17-
to stockholders, the "Deadline" means the close of business on the tenth day
following the day on which notice of the date of the meeting was mailed. If a
stockholder proposal that is received by the Company after the Deadline is
raised at the next Annual Meeting, the holders of the proxies for that meeting
will have the discretion to vote on the proposal in accordance with their best
judgment and discretion, without any discussion of the proposal in the Company's
proxy statement for the next Annual Meeting.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this proxy statement.
However, if any other matter should properly come before the Annual Meeting, it
is intended that holders of the proxies will act in accordance with their best
judgment.
-18-
APPENDIX A
FIRST MIDWEST FINANCIAL, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the Board
in fulfilling its oversight responsibilities. The Audit Committee's primary
duties and responsibilities are to:
o Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and
regulatory compliance.
o Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
o Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
The Audit Committee has the authority to conduct any investigation appropriate
to fulfilling its responsibilities, and it has direct access to the independent
auditors as well as anyone in the organization. The Audit Committee has the
ability to retain, at the Company's expense, special legal, accounting, or other
consultants or experts it deems necessary in the performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the Securities and
Exchange Commission and Nasdaq Stock Exchange. The Audit Committee shall be
comprised of three or more directors as determined by the Board, each of whom
shall be independent nonexecutive directors, free from any relationship that
would interfere with the exercise of his or her independent judgment. All
members of the Audit Committee shall have a basic understanding of finance and
accounting and be able to read and understand fundamental financial statements,
and at least one member of the Audit Committee shall have accounting or related
financial management expertise.
Audit Committee members shall be appointed by the Board on recommendation of the
Nominating Committee. If an Audit Committee Chair is not designated or present,
the members of the Audit Committee may designate a Chair by majority vote of the
Audit Committee membership.
The Audit Committee shall meet at least three times annually, or more frequently
as circumstances dictate. The Audit Committee Chair shall prepare or approve an
agenda in advance of each meeting.
The Audit Committee shall provide opportunity for the internal and independent
auditors to meet with the members of the Audit Committee without members of
management present. Among the items to be discussed in these meetings are the
independent auditor's evaluation of the Company's financial, accounting, and
auditing personnel, and the cooperation that the independent auditors received
during the course of the audit.
In addition, the Audit Committee, or at least its Chair, shall communicate with
management and the independent auditors quarterly to review the Company's
financial statements and significant findings based upon the auditors' limited
review procedures.
III. Audit Committee Responsibilities and Duties
Review Procedures
1) Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
2) Review the Company's annual audited financial statements prior to
filing and recommend to the Board of Directors that such financial
statements be included in the Company's annual report on Form 10-K.
Review should include discussion with management and independent
auditors of significant issues regarding accounting principles,
practices, and judgments.
3) In consultation with the management, the independent auditors, and the
internal auditor, consider the integrity and adequacy of the Company's
financial reporting processes and controls. Discuss significant
financial risk exposures and the steps management has taken to
monitor, control, and report such exposures. Review significant
findings as prepared by the independent auditors and the internal
auditing department together with management's responses.
4) Review the Company's quarterly financial statements with management.
Review and discuss with the independent auditors any significant
changes to the Company's accounting principles and any items required
to be communicated in accordance with SAS 61. The Chair of the Audit
Committee may represent the entire Audit Committee for purpose of this
review.
Independent Auditors
5) The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review
Page 2
the independence and performance of the auditors and annually
recommend to the Board of Directors the appointment of the independent
auditors or approve any discharge of auditors when circumstances
warrant.
6) The Audit Committee shall approve any audit services and any
permissible non-audit services prior to the commencement of the
services. In making its pre-approval determination, the Audit
Committee shall consider whether providing the non-audit services are
compatible with maintaining the auditor's independence. The Audit
Committee may delegate this authority to a Audit Committee member or
members. Any decisions exercised by such member or members shall be
reported at the next scheduled Audit Committee meeting.
7) On an annual basis, the Audit Committee should review and discuss with
the independent auditors all significant relationships they have with
the Company that could impair the auditor's independence. The Audit
Committee should review the disclosures from the independent auditors
required by Standard No. 1 of the Independence Standards Board.
8) Review the independent auditor's proposed audit scope for the current
year and the audit procedures to be utilized. 9) Review the financial
statements contained in the annual report to the shareholders with
management and the independent auditors to determine that the
independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders.
10) Discuss certain matters required to be communicated to audit
committees in accordance with SAS 61.
11) Consider the independent auditor's judgments about the quality and
appropriateness of the Company's accounting principles as applied in
its financial reporting.
Internal Audit Department
12) Review the internal audit function of the Company including the
independence and authority of its reporting obligations, the proposed
audit plans and staffing for the coming year, and the coordination of
such plans with the independent auditors.
13) Review the appointment, performance, and replacement of the senior
internal auditor. 14) Review significant reports prepared by the
internal audit department together with management's response and
follow-up to these reports.
Other Audit Committee Responsibilities
15) Annually, prepare a report to shareholders as required by the SEC. The
report should be included in the Company's annual proxy statement.
16) Review accounting, financial, and internal audit human resources and
succession planning within the Company. 17) Maintain minutes of
meetings and periodically report to the Board of Directors on
significant results of the foregoing activities.
18) Perform any other activities consistent with this Charter, the
Company's bylaws, and governing law, as the Audit Committee or the
Board deems necessary or appropriate.
Page 3
APPENDIX B
REVOCABLE PROXY
FIRST MIDWEST FINANCIAL, INC.
ANNUAL MEETING OF SHAREHOLDERS - JANUARY 26, 2004
This proxy is being solicited on behalf of the Board of Directors of First
Midwest Financial, Inc.
The undersigned hereby appoints the members of the Board of Directors of First
Midwest Financial, Inc.,(First Midwest) and its survivors, with full power of
substitution, and authorizes them to represent and vote, as designated below and
in accordance with their judgment upon any other matters properly presented at
the annual meeting, all the shares of First Midwest common stock held of record
by the undersigned at the close of business on DECEMBER 1, 2003, at the annual
meeting of shareholders, and at any and all adjournments or postponements
thereof.
WITH- FOR ALL
FOR HOLD EXCEPT
--------------------------
The election of E. WAYNE COOLEY, [_] [_] [_]
J. TYLER HAAHR and JOHN THUNE as
directors for terms of three years.
INSTRUCTIONS: To vote for all nominees mark the box "For" with an "X". To
---
withhold your vote for all nominees mark the box "WITHHOLD" with an "X". To
withhold your vote for an individual nominee mark the box "For All Except" with
----------
an "X" and write the name of the nominee(s) on the line provided below for whom
you wish to withhold your vote.
--------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" the election of the
above-named directors.
The undersigned acknowledges receipt from First Midwest Financial, Inc.,
prior to the execution of this proxy, of the Notice of Annual Meeting scheduled
to be held on January 27, 2003, an Annual Report to Shareholders for the year
ended September 30, 2002, and a proxy statement relating to the business to be
addressed at the meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this proxy
will be voted "FOR" the election of each of the directors set forth herein.
Should a director nominee be unable to serve as a director, an event that First
Midwest does not currently anticipate, the persons named in this proxy reserve
the right, in their discretion, to vote for a substitute nominee designated by
the Board of Directors.
Dated
-----------------------------------
PRINTED NAME OF SHAREHOLDER ---------------------------------------
APPEARS HERE SIGNATURE OF SHAREHOLDER
---------------------------------------
SIGNATURE OF SHAREHOLDER
Please sign exactly as your name(s) appear(s) above on this card. When signing
as attorney, executor, administrator, trustee,or guardian, please give your full
title. If shares are held jointly, each holder should sign.
fold and detach here
--------------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THE ATTACHED PROXY IN
THE ENCLOSED PRE-ADDRESSED, POSTAGE-PAID ENVELOPE
This proxy may be revoked at any time before it is voted by delivering to the
Secretary of First Midwest Financial, Inc. on or before the taking of the vote
at the annual meeting, a written notice of revocation bearing a later date than
the proxy or a later dated proxy relating to the same shares of First Midwest
Financial, Inc. common stock, or by attending the annual meeting and voting in
person. Attendance at the annual meeting will not in itself constitute the
revocation of a proxy. If this proxy is properly revoked as described above,
then the power of such attorneys and proxies shall be deemed terminated and of
no further force and effect.