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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.    )

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April 13, 2021

Dear Fellow Stockholders:

You are cordially invited to attend the 2021 Annual Meeting of Stockholders of First Midwest Bancorp, Inc., which will be held on Wednesday, May 19, 2021 at 9:00 a.m., Central time, in a virtual meeting format only. As part of our continued precautions regarding the COVID-19 pandemic and in light of the priority we place on the health, safety and well-being of our stockholders and colleagues, the Annual Meeting will be held solely by means of remote communication. Stockholders will be able to listen, vote and submit questions from any remote location with Internet connectivity. Online check-in will begin, and stockholders may begin submitting written questions, at 8:45 a.m. Central time, and you should allow ample time for the check-in procedures. For additional information on how to attend the Annual Meeting, please see Other Matters – Voting Your Shares.

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 is a copy of our 2020 Annual Report. Please review these materials carefully before voting.

We are pleased to offer multiple options for voting your shares. As detailed in the Proxy Summary section of the attached Proxy Statement, you may vote your shares via the Internet, by telephone or by mail. Voting in any of these ways will not prevent you from attending the virtual Annual Meeting. You may also vote during the virtual Annual Meeting.

Your vote is very important to us. Whether or not you plan to attend the virtual Annual Meeting, 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 virtual Annual Meeting.

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First Midwest Bancorp, Inc.

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Proxy Summary

Election of Directors

The first item of business at the Annual Meeting will be the election of eleven directors of the Company. The nominees are set forth in the table below. Each nominee is currently a director of the Company. Our Board recommends that you vote FOR the election of each of the nominees below. See Item 1  Election of Directors.

Amendment and Restatement of the First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan

We are asking our stockholders to approve the Amendment and Restatement of the First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan, including the issuance of additional shares of common stock authorized thereunder. See Item 2  Approval of the Amendment and Restatement of the First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan.

Advisory Vote on Executive Compensation

We are asking our stockholders to approve, on an advisory (non-binding) basis, a resolution regarding the compensation paid in 2020 to our named executive officers as disclosed in this Proxy Statement.  See Item 3  Approval of an Advisory (Non-Binding) Resolution Regarding the Compensation Paid in 2020 to the Company’s Named Executive Officers.

Ratification of Independent Registered Public Accounting Firm

We are asking our stockholders to ratify, on an advisory (non-binding) basis, the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2021. See Item 4  Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm.

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Proxy Summary

How to Vote

Even if you plan to attend our virtual Annual Meeting, please cast your vote as soon as possible.

If you choose not to vote early, you can vote your shares during the Annual Meeting. Stockholders of record as of the close of business on March 26, 2021, the Record Date for the Annual Meeting, may attend the meeting at www.virtualshareholdermeeting.com/FMBI2021 by logging in and entering the control number found on the Proxy Card. Once admitted to the Annual Meeting, stockholders should follow the instructions on the website. You will need the control number included on your Proxy Card in order to participate.

Important Notice Regarding the Availability of Proxy Materials

A copy of our Annual Report for the year ended December 31, 2020 accompanies this Proxy Statement. The Notice, this Proxy Statement and our Annual Report are available at https://investor.firstmidwest.com/sec-filings/documents/. 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., 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631.

Certain Financial Information Presented on an Adjusted Basis

This Proxy Statement contains references to certain financial information on a core or adjusted basis. This information excludes certain items, such as acquisition and integration related expenses, securities gains and losses, and balance sheet and retail optimization costs. We believe that presenting certain financial information in this manner assists stockholders in understanding our core financial performance and in assessing the Company’s underlying operational performance since these items do not pertain to our core business operations. Exclusion of these items facilitates better comparability between periods and enhances comparability for peer comparison purposes. For a reconciliation of the non-GAAP financial measures discussed in this Proxy Statement, which include core net income and core return on average tangible common equity, in each case as adjusted to exclude certain items, to the nearest comparable GAAP financial measures, see our Form 10-K filed with the SEC on March 1, 2021.

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ABOUT FIRST MIDWEST

First Midwest Today

First Midwest Bancorp, Inc. is a relationship-focused financial institution and one of the largest independent publicly traded bank holding companies based on assets headquartered in Chicago and the Midwest, with approximately $21 billion of assets and an additional $14 billion of assets under management. The Company’s principal subsidiary, First Midwest Bank, and other affiliates provide a full range of commercial, treasury management, equipment leasing, consumer, wealth management, trust and private banking products and services. The primary footprint for our branch network and other locations is in metropolitan Chicago, southeast Wisconsin, northwest Indiana, central and western Illinois, and eastern Iowa.

Our Response to the COVID-19 Pandemic and Maintaining Our Strength and Stability in 2020

Despite the challenging environment created by the COVID-19 pandemic, we remained focused throughout 2020 on executing on our business priorities of continuing to build an empowered, engaged and diverse team, growing and diversifying our revenues and investing in our future. We executed on our continued strategic expansion into Milwaukee by successfully completing our acquisition and integration of Park Bank in 2020, which added an additional $1.2 billion of assets, $1.0 billion of deposits and approximately $688 million of loans. We also increased our total assets in 2020 to nearly $21 billion (an increase of 17% over 2019), up from $18 billion in 2019, and grew our total deposits to $16 billion (an increase of 21% over 2019) and our total loans, excluding Paycheck Protection Program loans, to $14 billion (an increase of 9% over 2019), up from $13 billion for each of deposits and loans in 2019.

We maintained our top 10 deposit share in the greater metropolitan Chicago market (top 2 in south metro and top 3 in northwest Indiana) and gained a top 10 deposit market share in Milwaukee through our Park Bank acquisition. We increased our ratio of core deposits to total deposits to 87% in 2020, up from 77% in 2019, thereby maintaining our low-cost core deposit advantage. This diverse mix of deposits includes the benefits of PPP loan funds, as well other government stimulus programs and deposits assumed in our Park Bank acquisition.

In addition, despite the severe economic conditions in 2020, we had a record year of mortgage banking and wealth management income, proactively raised $230 million of additional capital and maintained a stable credit portfolio. Moreover, the challenges of 2020 did not deter us from continuing to take steps to advance our technology plan, increasing our technology spend by more than one-third from 2019, and enhancing our digital capabilities. The pandemic accelerated our already growing trend of increased online, mobile and digital offerings.

We achieved numerous successes in 2020 that fell outside of the ordinary course of business, as we shifted our energy and focus to the health, safety and well-being of our clients, colleagues and communities as they faced their own challenges brought on by the COVID-19 pandemic. We pivoted and adapted our platforms as well as our

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About First Midwest

distribution and operating models to respond to the needs of our colleagues and clients, and assisted with the stress on individual, business and local needs.

For our clients, we continued to keep much of our branch network open and operating during the height of the pandemic (with appropriate health and safety protocols) so that clients encountered no interruption in accessing financial services. We offered aid and support to help ease the financial burden for business and individual clients through payment deferral and fee assistance programs. In a matter of a few weeks, we also supported our clients and the economy generally by participating in the federally-sponsored Paycheck Protection Program. To do this, we quickly enhanced our infrastructure and mobilized a team of colleagues to accept, process and fund these loans.

For our colleagues, we established heightened health and safety protocols for those who were required to work at one of our branches or other locations in order to continue to serve our clients, implemented a remote working plan for over 1,000 colleagues, expanded our health benefits and support programs, provided special bonuses and pay premiums to essential front-line employees, made interest-free hardship and emergency relief loans to over 500 colleagues and enhanced benefits and paid time-off programs.

We strengthened our dedication to our communities as the First Midwest Charitable Foundation committed $2.5 million to support local organizations and COVID-19 relief efforts. We also took several steps to encourage philanthropic giving across First Midwest, including enhancing our matching gift program and encouraging contributions to nonprofit organizations that support civil rights, anti-racism and social justice causes.

Throughout 2020, we also furthered our long-standing commitment to diversity, equity and inclusion by continuing to build on our learning curriculum relating to inclusive leadership and cultural competency skills as well as offering opportunities for our colleagues to engage in open and honest conversations about race and equality to minimize unconscious bias. This commitment is embraced by all of our colleagues and is facilitated by our Head of Corporate Social Responsibility and Diversity, Equity and Inclusion and her team.

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About First Midwest

Our organizational accomplishments in 2020 are more fully described below. As noted above under Proxy Summary—Certain Financial Information Presented on an Adjusted Basis, we discuss our performance in this proxy statement both on a reported GAAP basis and on an adjusted basis. The adjusted information primarily excludes acquisition and integration expenses, securities gains and losses, and balance sheet and retail optimization costs, which allows us to properly assess our performance on a core basis and relative to peers.

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About First Midwest

Our Vision, Mission and Values

VISION	MISSION	VALUES
To be the partner of choice for financial services in the markets we serve, and one of the nation’s top performing financial institutions.	To help our clients achieve financial success.	To serve our clients with integrity, excellence, responsibility and passion.

During 2020, we remained focused on our vision, mission and values, which drive our culture that is centered on client needs, rooted in service excellence, dedicated to bettering our communities and focused on attracting top industry talent. Our path to success is through our relationships with clients and our commitment to providing a superior client experience. These factors provide significant momentum for future earnings growth and enhance our position as a premier Midwest-based commercial bank committed to helping our clients achieve financial success. This commitment is at the core of all that we do.

Business Priorities

In building our platform for continued profitable growth, we focus on the following priorities in order to position the Company for future success.

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CORPORATE SOCIAL RESPONSIBILITY AND DIVERSITY, EQUITY AND INCLUSION – OUR COMMITMENT

Our commitment to corporate social responsibility and diversity, equity and inclusion is ingrained in our corporate fabric. Throughout our history, First Midwest Bank has committed to treating all of our clients, regardless of stature or wealth, with respect and a focus on their financial needs. This commitment was inherited from our predecessors, runs 150 years deep and is currently overseen by our Head of Corporate Social Responsibility and Diversity, Equity and Inclusion and her team, with the full support of our Board of Directors, our Chief Executive Officer, our executive leadership team and our colleagues.

Anchored in our vision, mission and values, we drive business performance and accelerate economic and social momentum by investing in our colleagues, clients and the communities we serve. Diversity, equity and inclusion are at the core of our culture, which enables us to best meet the evolving needs of our colleagues, clients, communities, stockholders and other stakeholders. We are planning to release our inaugural Corporate Social Responsibility and Diversity, Equity and Inclusion Report in mid-2021. The framework for our approach to corporate social responsibility and diversity, equity and inclusion, which will be more fully discussed in our inaugural report, is outlined below.

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We are proud of our commitment to corporate social responsibility and diversity, equity and inclusion. Even with the pandemic-related challenges experienced in 2020, we have continued to develop and execute an integrated corporate social responsibility and diversity, equity and inclusion strategy that is aligned with our growth agenda as well as our ability to create long-term stockholder value. Our Board of Directors plays an integral role in overseeing our progress. Below is a brief description of some of our achievements in 2020.

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Corporate Social Responsibility

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Colleague Engagement ​

◆ In 2020, we were again recognized as one of the Chicago Tribune Top Places to Work and we were the highest ranked commercial bank among large companies. We were also named one of Forbes’ Best-in-State Banks. ◆ In an effort to inform and communicate with our colleagues, our CEO held 15 virtual all-colleague town hall meetings throughout 2020. We maintained a dedicated pandemic portal with real-time updates and distributed 3 colleague engagement surveys. ◆ To support our colleagues during the pandemic, we provided bonuses and pay premiums to colleagues who continued to serve our clients from one of our locations, interest-free hardship and emergency medical loans for over 500 colleagues and we enhanced our benefits and paid time off programs. ◆ For many years, we have partnered with United Way in order to maximize our social impact. In 2020, we doubled our matching gift program to provide a 2:1 match for colleague contributions to non-profit organizations that support civil rights, anti-racism and social justice causes. Colleague participation in the program tripled from 2019.

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Corporate Social Responsibility

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Corporate Governance ​

◆ We maintain a strong commitment to governance and ethics practices from our Board of Directors to our executive leadership and to all of our colleagues. ◆ Our colleagues adhere to a comprehensive Code of Ethics and Standards of Business Conduct that they are required to certify that they have reviewed each year. ◆ In addition to our regularly scheduled Board meetings, in response to the COVID-19 pandemic and in furtherance of maintaining business continuity, our Board met six additional times and received additional regular management updates throughout 2020. ◆ Stewardship of the Company’s corporate social responsibility resides with the Nominating and Corporate Governance Committee of our Board of Directors. The Committee receives regular updates on strategy, target metrics and results. ◆ We were recently recognized by Women on Boards for having 25% gender diversity on our Board of Directors. Currently, 36% of our Board is gender or racially diverse. ◆ We maintain strong enterprise risk management, including cyber risk management, processes. ◆ We maintain an active stockholder engagement program. For a fulsome discussion of our corporate governance practices, see Corporate Governance at First Midwest.

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Item 1  Election of Directors

Below are certain demographic and operational highlights of our Board of Directors, including the varying tenure, diversity, qualifications and experience of our continuing directors.

*	Three of our directors are diverse on the basis of gender and one of our directors is diverse on the basis of race.

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Each of our eleven continuing directors has extensive professional experience that contributes to a diversity of skills, perspectives and leadership qualities on our Board of Directors, as summarized below.

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Item 1 Election of Directors

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.

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 our Board. The Nominating and Corporate Governance Committee discusses and evaluates possible candidates in detail, and we sometimes engage outside consultants to help identify potential candidates.

When making recommendations for nominees to the Board, 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 range of professional experience, background, gender or minority status, perspectives and 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.

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Item 1  Election of Directors

Set forth below is the name of each director nominee, along with his or her age, principal occupation for at least the previous five years and other professional experience.

Nominees Standing for Election at the Annual Meeting

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Barbara A. Boigegrain Current Position: Chief Executive Officer and General Secretary, Wespath Benefits and Investments Committee(s): Compensation Committee (Chair), Nominating and Corporate Governance Committee, Advisory Committee Independent Director Age: 63 Director Since: 2008			Thomas L. Brown Current Position: Former Senior Vice President and Chief Financial Officer, RLI Corp. (NASDAQ) Committee(s): Audit Committee, Enterprise Risk Committee (Chair), Advisory Committee Independent Director Age: 64 Director Since: 2017
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EXPERIENCE AND QUALIFICATIONS Ms. Boigegrain has served as the Chief Executive Officer and General Secretary of Wespath Benefits and Investments (formerly the General Board of Pension and Health Benefits of The United Methodist Church) since 1994. Wespath is a pension, health and welfare benefit trustee and administrator and an institutional investment manager that is one of the largest faith-based pension funds in the United States, with $25 billion of assets under management. Wespath is a global leader in environmental, social and governance (ESG) investing, and is a founding member of the Transition Pathway Initiative, a global asset-owned led initiative that assesses companies’ preparedness for the transition to a low carbon economy. 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. Ms. Boigegrain is a member of the boards of directors of Church Benefits Association and the Church Alliance, and a former member of the board of trustees of Emory & Henry College. Ms. Boigegrain was recognized as one of Crain’s Chicago 2020 Notable Women Executives Over 50. 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 earned a Bachelor of Arts degree in Biology and Psychology from Trinity University in 1979. REASONS FOR NOMINATION Through her extensive employee benefits, compensation, executive 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 compensation, financial markets, strategic growth, and ESG and sustainability investing.		​	EXPERIENCE AND QUALIFICATIONS Mr. Brown served as the Senior Vice President and Chief Financial Officer of RLI Corp., a specialty insurer serving diverse niche property, casualty and surety markets from 2017 until his retirement on December 31, 2019. From 2011 to 2017, he served as RLI Corp.’s Vice President and Chief Financial Officer. Previously, Mr. Brown 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 currently serves on the board of directors of the Chicago Shakespeare Theater. In 2020, Mr. Brown joined the board of directors of Easter Seals DuPage & Fox Valley, and he previously served on the board of Easter Seals Central Illinois. From 2004 through 2017, Mr. Brown served on the board of trustees of Illinois Wesleyan University. Mr. Brown earned a Bachelor of Science degree in Accounting from Illinois Wesleyan University in 1979. He is a certified public accountant. REASONS FOR NOMINATION With his extensive finance, accounting, risk management and financial services background, combined with the insights of the executive management team of a public company, Mr. Brown brings valuable finance, accounting, strategic planning, risk and senior management skills and experience to our Board of Directors.

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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 https://investor.firstmidwest.com/corporate-information/corporate-profile/.

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ITEM 2  APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE FIRST MIDWEST BANCORP, INC. 2018 STOCK AND INCENTIVE PLAN

We are seeking stockholder approval of the Amendment and Restatement of the First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan (for purposes of this Item 2, the “Amended and Restated Stock and Incentive Plan”), which is attached as Appendix A to this Proxy Statement. The Amended and Restated Stock and Incentive Plan will amend and restate our existing Stock and Incentive Plan, which was approved by our stockholders in 2018. Our Board of Directors, upon the recommendation of the Compensation Committee, approved and adopted the Amended and Restated Stock and Incentive Plan, subject to stockholder approval.

Stockholder approval of the Amended and Restated Stock and Incentive Plan is required to increase the number of shares of common stock reserved for issuance under the First Midwest Bancorp, Inc. 2018 Stock and Incentive Plan by 2,500,000 shares. As of March 26, 2021, the Record Date for the Annual Meeting, approximately 1,070,036 shares of our common stock remained eligible for issuance under the Stock and Incentive Plan.

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The Amended and Restated Stock and Incentive Plan also includes certain clarifications and updates consistent with compensation best practices, as follows:

◆	Clarifies that all Nonqualified Stock Options shall expire no later than ten years after the date of grant.

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Clarifies that, consistent with the Company’s existing practices, to the extent that dividends or dividend equivalents are credited to Performance Units or Performance Shares, such amounts shall not be paid until the performance period ends and the underlying Performance Units or Performance Shares have vested.

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Updates the treatment of Other Awards (as defined in the Amended and Restated Stock and Incentive Plan) in the event of a change in control to be consistent with the treatment of stock options, stock appreciation rights, restricted stock and restricted stock units and performance shares and performance units: Upon a change in control, in the event that a Substitute Award is not provided (which would provide for double trigger protection), all Other Awards will become fully vested and exercisable.

The Company is asking stockholders to approve the terms listed above and authorize additional shares of common stock available under the Amended and Restated Stock and Incentive Plan at a level that the Company believes will, on the basis of current grant practices and plan design, be sufficient through 2025. Approval of the Amended and Restated Stock and Incentive Plan will authorize an additional 2,500,000 shares of common stock for awards beyond the 1,070,036 shares currently remaining eligible for issuance under the existing plan, for a total of 3,570,036 shares authorized for equity awards to our employees.

The following description sets forth the material terms of the Amended and Restated Stock and Incentive Plan. It does not purport to be complete and is qualified in its entirety by reference to the provisions of the Amended and Restated Stock and Incentive Plan attached to this Proxy Statement as Appendix A. All capitalized terms that are not defined in this Proxy Statement are used as defined in the Amended and Restated Stock and Incentive Plan.

Purpose of the Amended and Restated Stock and Incentive Plan

The Amended and Restated Stock and Incentive Plan is intended to advance the interests of the Company and its subsidiaries by providing incentives and motivation to employees of the Company and its subsidiaries that will link their personal interests to the financial success of our Company and its subsidiaries. The Amended and Restated Stock and Incentive Plan is designed to provide flexibility to the Company and its subsidiaries in their ability to attract and retain the services of employees upon whose judgment, interest and effort the successful conduct of our operations is largely dependent.

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Grant Practices Uses Mix of Performance-Based and Time-Based Awards

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only). Our Compensation Committee believes that using a mix of restricted stock and performance shares for our executive officers results in long-term incentive awards with the appropriate balance of strong retention value and a clear connection between results achieved and compensation earned. Awards to our Chief Executive Officer in recent years have been weighted more heavily to performance shares than restricted stock (approximately a 65%/35% mix in 2020), based on grant date value.

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Key Considerations

We are recommending that our stockholders approve the Amended and Restated Stock and Incentive Plan because we believe that the design of the Amended and Restated Stock and Incentive Plan and the number of shares to be authorized for issuance thereunder will enable us to continue good corporate governance practices in granting equity to employees, consistent with the interests of stockholders and reflective of current trends, competitive practices and investor attitudes. In addition, without approval of an amended and restated plan with additional shares, we will have sufficient shares to issue awards to our employees only through 2022.  The following highlights the analysis of certain key considerations regarding the Amended and Restated Stock and Incentive Plan:

Run Rate

Run rate, a measure of the speed at which companies use shares available for grant in their equity compensation plans, is an important factor for investors concerned about stockholder dilution.  The run rate is defined as: the gross number of equity awards granted in a given year divided by the weighted average number of shares of common stock outstanding.  Our run rates for the past three years are shown in the chart below:

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2018

2019

2020

Average

Restricted Stock/Units

427,000

497,000

655,000

526,333

Performance Shares

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Director Awards

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20,000

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16,000

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Net Increase in Diluted Shares due to Equity Awards

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657,000

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862,000

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Weighted Average Basic Shares Outstanding

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102,850,000

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108,156,000

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112,355,000

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107,787,000

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We use the annual usage of shares to help determine, among other things, the expected remaining life of a plan based on the remaining number of shares authorized for issuance under the plan. At similar annual usage levels, the 1,070,036 shares remaining eligible for issuance under the Stock and Incentive Plan may be depleted soon after the issuance of the Company’s annual equity awards in 2022. The additional 2,500,000 shares to be authorized upon approval of the Amended and Restated Stock and Incentive Plan, combined with the 1,070,036 shares available from the Stock and Incentive Plan, and shares that become available upon cancellations or forfeitures under the Stock and Incentive Plan, are currently expected to cover awards through 2025.

Overhang

Overhang is a commonly used measure of assessing the dilutive impact of equity programs such as the Amended and Restated Stock and Incentive Plan.  The overhang is equal to the number of equity award shares outstanding plus the number of shares available to be granted, divided by the total shares of common stock outstanding. Overhang shows how much existing stockholder ownership would be diluted if all outstanding awards and authorized but unissued shares were introduced into the market.  As of March 26, 2021, the Record Date, the

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additional 2,500,000 shares being requested in this proposal would bring our aggregate overhang to 4.9%, as follows:

 

An overhang of 4.9% aligns with the median levels at commercial banking organizations, including the companies in our peer group.

Corporate Governance Aspects of the Amended and Restated Stock and Incentive Plan

In designing and recommending the Amended and Restated Stock and Incentive Plan to our stockholders, the Compensation Committee and our Board of Directors also noted the strong corporate governance aspects of the Amended and Restated Stock and Incentive Plan, as summarized in the following table.

Significant Features		Description
Limit on Shares Authorized		If the Amended and Restated Stock and Incentive Plan is approved by our stockholders, other than shares that become available for issuance under the Amended and Restated Stock and Incentive Plan from cancellations or forfeitures of outstanding awards under the Stock and Incentive Plan, no more than 3,570,036 total shares of common stock will be authorized for issuance under the Amended and Restated Stock and Incentive Plan, or approximately 3.1% of the Company’s issued and outstanding common stock as of the Record Date.
No Liberal Share Recycling		The Amended and Restated Stock and Incentive Plan contains responsible share recycling provisions: Any shares surrendered or withheld to satisfy tax withholding with respect to any awards will not be added back (recycled) to the Amended and Restated Stock and Incentive Plan.  In addition, any shares surrendered to pay the exercise price of any option, or repurchased by the Company with option exercise proceeds, will not be added back to the Amended and Restated Stock and Incentive Plan. The Amended and Restated Stock and Incentive Plan also provides that the gross number of SARs exercised or settled, and not just the net shares issued upon exercise or settlement, will count against the aggregate limit on the number of shares that may be issued under the Amended and Restated Stock and Incentive Plan.
One-Year Minimum Vesting Period		Awards of shares under the Amended and Restated Stock and Incentive Plan are subject to a minimum of one-year vesting, restriction or performance periods, except that the Compensation Committee may grant awards that do not satisfy the minimum vesting period relating to an aggregate of 5% or fewer of the aggregate number of shares of stock authorized for issuance under the Amended and Restated Stock and Incentive Plan. Our current practice is to issue awards with a three-year vesting period.

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Awards and Shares Authorized Under Existing Plan

The following table provides details of the number of shares subject to outstanding awards and remaining available for issuance under our existing equity plans (the Stock and Incentive Plan and the Non-Employee Directors Stock Plan) as of March 26, 2021, the Record Date:

Shares underlying outstanding stock awards under Stock and Incentive Plan (restricted stock/units and performance shares)			2,079,467
Shares underlying outstanding option awards under existing Stock and Incentive Plan			—
Weighted-average exercise price of options			—
Weighted-average remaining contractual life of options (in years)			—
Shares available for issuance under existing Stock and Incentive Plan			1,070,036
Shares available for issuance under Non-Employee Directors Stock Plan			79,224
Total shares available for issuance under equity plans			1,149,260

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These numbers differ from the amounts reported in our Form 10-K as of December 31, 2020.  Since December 31, 2020, the Board granted an additional 893,967 shares in connection with our 2021 annual grant (208,770 performance shares and 685,197 shares of restricted stock and restricted stock units) and an additional

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3,955 shares under our Non-Employee Directors Stock Plan, awards with respect to 509,606 shares vested, and awards with respect to 89,894 shares were forfeited, canceled or expired.

Administration

Our Compensation Committee will administer the Amended and Restated Stock and Incentive Plan. The Compensation Committee is currently composed of five directors, each of whom qualifies as a “non-employee director” under Rule 16b-3 under the Exchange Act and, to the extent applicable, as an “outside director” under Section 162(m) of the Internal Revenue Code. Each member of the Compensation Committee also meets the director independence criteria under applicable rules of the NASDAQ Stock Market. The Compensation Committee has broad discretion and authority, among other things, to select the employees to whom awards may be granted, to determine the terms, conditions, form and amount of the awards, to establish, where deemed applicable, performance goals with respect to awards and to measure and certify the achievement thereof, and to establish guidelines and procedures relating to awards.

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The Compensation Committee will have full power to administer and interpret the Amended and Restated Stock and Incentive Plan and to adopt or establish, and to modify or waive, rules, regulations, agreements, guidelines, procedures and instruments that it deems necessary or advisable for the administration and operation of the Amended and Restated Stock and Incentive Plan. The Compensation Committee may delegate its authority to our Chief Executive Officer or other senior officers of the Company, provided that such delegation will not extend to actions with respect to awards made to “officers” for purposes of Rule 16b-3 under the Exchange Act. The Compensation Committee has delegated such authority only to our Chief Executive Officer, and he has exercised this authority on a limited basis for employee recruitment or retention purposes.

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Eligibility

Any employee of the Company or any of its subsidiaries is eligible to receive an award under the Amended and Restated Stock and Incentive Plan.  As of December 31, 2020, we had approximately 2,100 full-time employees.

Shares Available for Future Awards and Awards Outstanding

As of March 26, 2021, the Record Date, a total of approximately 1,070,036 shares of common stock remained available for future awards under the Stock and Incentive Plan.  The Amended and Restated Stock and Incentive Plan provides that the total number of shares of common stock that may be issued pursuant to awards under the Amended and Restated Stock and Incentive Plan may not exceed 2,500,000 plus the 1,070,036 shares remaining available for future awards under the Stock and Incentive Plan and the number of shares that become available due to cancellation, forfeiture or expiration of, or the non-issuance of shares under an outstanding award granted under the Stock and Incentive Plan.  The 3,570,036 shares represent approximately 3.1% of the Company’s outstanding common stock as of the Record Date.  If the Company’s stockholders approve the Amended and Restated Stock and Incentive Plan, any awards made under the Stock and Incentive Plan that are outstanding at the time the Amended and Restated Stock and Incentive Plan is approved (i.e., unearned or unvested awards) will continue to be governed by the terms of the Stock and Incentive Plan before its amendment and restatement.

To the extent that shares of common stock subject to an outstanding award under the Stock and Incentive Plan, whether before or after its amendment and restatement, are not issued or are cancelled by reason of the failure to earn the shares issuable under, or the forfeiture, termination, surrender, cancellation or expiration of such award, then such shares will, to the extent of such forfeiture or cancellation, again be available for awards under the Amended and Restated Stock and Incentive Plan.  Shares of common stock will not again be available if such shares are surrendered or withheld as payment of either the exercise price or of the withholding taxes in respect of an award.  Awards settled solely in cash will not reduce the number of shares of common stock available for awards under the Amended and Restated Stock and Incentive Plan.  The exercise or settlement of an award of SARs reduces the shares of common stock available under the Amended and Restated Stock and Incentive Plan in the gross number of SARs exercised or settled, not just the net amount of shares actually issued upon exercise or settlement of the award.  Any shares acquired by the Company in the open market with proceeds received from option exercises will not be made available for awards under the Amended and Restated Stock and Incentive Plan.

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No more than 5% of the shares of common stock may be issued with respect to awards with a vesting, restriction, or performance period of less than one year.

Shares of common stock issued in connection with awards that are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered into by the Company or any of its subsidiaries will not reduce the number of shares available to be issued under the Amended and Restated Stock and Incentive Plan.

The source of common stock issued with respect to awards may be authorized and unissued shares or shares that have been or may be reacquired in the open market, in private transactions, or otherwise.  In the event of any corporate event or transaction, including, but not limited to, a change in the shares of common stock or the capitalization of the Company, such as may result from a merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split, split up, spin-off or other distribution of stock or property of the Company, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution, other than normal cash dividends, the number of shares of common stock authorized for issuance, available for issuance or covered by any outstanding award and the exercise price or other per share amounts applicable to any such award, and the various limitations described above, will be proportionately adjusted.  Fractional shares will not be issued under the Amended and Restated Stock and Incentive Plan.

Awards

A participant in the Amended and Restated Stock and Incentive Plan is permitted to receive multiple grants of awards.  The terms and provisions of a type of award with respect to any recipient need not be the same with respect to any other recipient of such award.  The following types of awards may be granted under the Amended and Restated Stock and Incentive Plan:

Restricted Stock and Restricted Stock Units

An award of restricted stock is an award of shares of common stock that may not be sold or otherwise disposed of during a restricted period determined by the Compensation Committee.  An award of restricted stock units is an award of the right to receive a share of common stock after the expiration of a restricted period determined by the Compensation Committee.  The Compensation Committee also may impose additional restrictions on an award of restricted stock or restricted stock units, including, but not limited to, attainment of certain performance goals during the restricted period.  To the extent provided by the Compensation Committee, restricted stock and restricted stock units also may include a dividend equivalent right, under which the recipient will be entitled to receive all dividends and other distributions paid with respect to such shares to the extent that they vest upon the expiration of the restricted period set by the Compensation Committee.  For grants of restricted stock and restricted stock unit awards made in 2021, the Compensation Committee used a period of restriction of three years for full vesting.

Performance Shares and Performance Units

Performance shares and performance units are awards of a fixed or variable number of shares or of dollar-denominated units that are earned by achievement of performance goals established by the Compensation Committee.  If the applicable performance criteria are met, the shares are earned and become unrestricted with respect to performance shares or an amount is payable with respect to performance units.  Amounts earned under performance share and performance unit awards may be paid in common stock, cash or a combination of both.  To the extent provided by the Compensation Committee, performance shares and performance units also may include a dividend equivalent right, under which the recipient will be entitled to receive all dividends and other distributions paid with respect to earned shares after completion of the performance period set by the Compensation Committee. The Amended and Restated Stock and Incentive Plan provides that dividends or dividend equivalents will not be paid unless and until the underlying performance shares or performance units vest. For grants of performance share awards made in 2021, the Compensation Committee used a performance period of three years.

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Stock Options

Stock options may be nonqualified stock options or incentive stock options that comply with Section 422 of the Internal Revenue Code, or any other option to purchase stock that is permitted by law at the time of grant. The exercise period for any stock option will be determined by the Compensation Committee at the time of grant. The exercise price per share for all shares of common stock issued pursuant to stock options under the Amended and Restated Stock and Incentive Plan may not be less than the fair market value (as defined in the Amended and Restated Stock and Incentive Plan) of a share of common stock on the grant date.  Each stock option may be exercised in whole, at any time, or in part, from time to time, after the grant becomes exercisable.  The Amended and Restated Stock and Incentive Plan prohibits any reduction (re-pricing) of options without the approval of the Company’s stockholders, limits the term of any stock option to ten years, and limits the number of incentive stock options that may be granted under the Amended and Restated Stock and Incentive Plan to 2,000,000 shares of common stock.  No dividends or dividend equivalent amounts may be paid with respect to any options.

Stock Appreciation Rights (SARs)

The Compensation Committee may grant SARs under the Amended and Restated Stock and Incentive Plan.  Upon exercise, each SAR entitles a participant to receive an amount equal to the excess of the fair market value of a share of common stock on the date the SAR is exercised over an amount equal to the fair market value of a share of common stock on the date the SAR is granted.  Payment of the exercise price may be made in shares of common stock having a fair market value on the date of exercise equal to the amount due upon the exercise of the SAR, may be paid in cash, or in a combination of stock and cash.  Except in the event of certain corporate events or transactions, once a SAR is granted, the Compensation Committee will have no authority to reduce (re-price) the price fixed at the date of grant, nor may any SAR granted under the Amended and Restated Stock and Incentive Plan be surrendered to the Company as consideration for the grant of a new SAR with a lower price at the date of grant without the approval of the Company’s stockholders.  The Amended and Restated Stock and Incentive Plan limits the term of any SAR granted to ten years and one day.  No dividends or dividend equivalent amounts may be paid with respect to any SARs.

Other Awards

Participants may receive the right to receive common stock or a fixed or variable share denominated unit granted under the Amended and Restated Stock and Incentive Plan or any deferred compensation or similar plan established from time to time by the Company.  To the extent provided by the Compensation Committee, other awards payable in shares of common stock also may include a dividend equivalent right, under which the recipient will be entitled to receive all dividends and other distributions paid with respect to such shares upon payment of the award.  Participants in the Amended and Restated Stock and Incentive Plan may also receive cash bonuses and other cash incentive compensation awards under our short-term annual cash incentive compensation program.

Performance-Based Awards

The Compensation Committee may grant performance-based awards that vest, are paid or become exercisable upon the attainment of performance goals.  Performance goals established with respect to an award may be based upon, but are not limited to, one or more of the following performance criteria or metrics:

◆

Return measures (including, but not limited to, total stockholder return, return on assets and return on equity);

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Income or earnings measures (including, but not limited to, earnings per share, net income, net interest income, net interest margin and noninterest income);

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Revenue measures;

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Expense measures (including, but not limited to, expenses, operating efficiencies, efficiency ratios and non-interest expense);

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Balance sheet measures (including, but not limited to, assets, loans, charge-offs, loan loss allowances, non-performing assets, deposits, asset quality levels and investments);

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Wealth management measures (including, but not limited to, assets under management, held in trust or custody, client growth, client retention and wealth management fees);

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Enterprise risk management measures (including, but not limited to, interest-sensitivity gap levels, regulatory compliance, satisfactory internal or external audits and financial ratings);

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Fair market value of our common stock;

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Employee, customer or market-related objectives (including, but not limited to, employee satisfaction, customer growth, customer retention, customer satisfaction, number or type of customer relationships and market share);

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Achievement of balance sheet or income statement objectives;

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Individual participant or team performance objectives (including, but not limited to, key performance indicators, strategic or operational objectives, or project or personnel management); or

◆

Other financial, accounting or quantitative objectives established by the Compensation Committee.

Performance goals for these criteria or metrics may be measured for achievement or satisfaction during the performance period set by the Compensation Committee.  The performance goals may be in absolute terms or measured against, or in relationship to, other companies comparably, similarly or otherwise situated or other external or internal measures and may be based on, or adjusted for, other objective goals, events or occurrences established by the Compensation Committee.  Performance goals may be particular to a line of business, subsidiary or other unit or the Company generally.  Performance goals may provide for adjustments to include or exclude the effects of certain events as may be determined by the Compensation Committee, including, but not limited to, changes in accounting standards or principles, tax laws or other laws or provisions affecting reported results, a significant acquisition or divestiture, discontinued operations, claims, judgments or settlements or other unusual, infrequently occurring or unplanned items such as restructuring expenses, acquisition expenses, including writedowns or expenses related to goodwill and other intangible assets, stock offerings and stock repurchases, and provision for loan losses.

At the end of each performance period for a performance-based award, the Compensation Committee will determine the extent to which the performance goal established has been achieved and determine the amount to be paid, vested or delivered as a result thereof.  In making such determination, the Compensation Committee may adjust or eliminate such amount to take into account additional factors as the Compensation Committee may deem appropriate to the assessment of performance during the performance period.

Termination of Employment

The disposition of each award held by a participant at termination of employment will be as determined by the Compensation Committee and set forth in the agreement applicable to such award or in any amendment or modification thereof. To the extent the award agreement does not expressly provide for such disposition, then the disposition of the award shall be determined as set forth in the Amended and Restated Stock and Incentive Plan.

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Effect of Change-in-Control

In the event of a change-in-control (as defined in the Amended and Restated Stock and Incentive Plan), to the extent that outstanding awards under the Amended and Restated Stock and Incentive Plan are assumed or replaced with a replacement award, such awards will not vest automatically, but instead will remain outstanding and continue to be governed by their terms. If within two years following a change-in-control, however, a

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participant is involuntarily terminated other than for cause or voluntarily terminates with good reason, then upon such termination, the awards will become fully vested (so-called “double-trigger” vesting).

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If the Compensation Committee determines that existing awards are not appropriately assumed or are not appropriately replaced in connection with a change-in-control, and unless otherwise provided by the Compensation Committee in the agreement applicable to an award, upon a change-in-control, each SAR, stock option and any Other Award then outstanding will become fully vested and exercisable, all restrictions on restricted stock will lapse and all restricted stock units will become fully vested, and any performance-based awards shall be deemed earned and shall be paid to the extent of the greater of:

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◆

The extent to which the performance goals applicable to such award have been met during the performance period up through and including the effective date of the change-in-control, or

◆

A pro-rated amount at the target award level based upon the portion of the performance period elapsed at the time of the change-in-control.

Other Provisions

In general, no award will be assignable or transferable except by will, and the laws of descent and distribution.

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The Compensation Committee may impose such restrictions and limitations on any awards granted under the Amended and Restated Stock and Incentive Plan as it may deem advisable, including, but not limited to, share ownership or holding period requirements and requirements to enter into or to comply with confidentiality, non-competition and other restrictive or similar covenants. Additionally, the Compensation Committee may specify in any award agreement that the participant’s rights, payments and benefits with respect to an award will be subject to reduction, cancellation, forfeiture or recoupment (clawback) upon the occurrence of certain specified events, such as payments based on financial statements or performance metrics that are determined subsequently to be erroneous, in addition to any otherwise applicable vesting or performance conditions.

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The Company is subject to supervision and regulation by banking authorities. Regulations and guidance issued by banking authorities may from time-to-time impose certain compensation restrictions on the Company, its executive officers and certain other highly compensated employees. Awards made under the Amended and Restated Stock and Incentive Plan will comply with such compensation restrictions to the extent applicable.

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If authorized by the Compensation Committee, the receipt of payment of cash or the delivery of shares that would otherwise be due to a participant under an award may be deferred at the election of the participant or the Company pursuant to an applicable deferral plan established by the Company or a subsidiary. A deferral also may be requested under applicable banking regulations. Awards made and deferral of any amounts payable under the Amended and Restated Stock and Incentive Plan are intended to comply with deferred compensation rules under Section 409A of the Internal Revenue Code.

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Effective Date, Amendment and Termination

If approved by our stockholders, the Amended and Restated Stock and Incentive Plan will become effective as of the date of such approval and will remain in effect until all shares subject to the Amended and Restated Stock and Incentive Plan have been issued according to the provisions of the Amended and Restated Stock and Incentive Plan, provided, however, that no awards may be granted on or after the tenth anniversary of the original adoption of the Stock and Incentive Plan.  The Board of Directors may terminate the Amended and Restated Stock and Incentive Plan at any time and may amend or modify the Amended and Restated Stock and Incentive Plan from time-to-time, provided that no such action shall materially adversely alter or impair any outstanding award without the consent of the participant(s) affected thereby.  In addition, unless approved by our stockholders, no amendment or modification may increase the number of shares of common stock that may be issued under the Amended and Restated Stock and Incentive Plan (except pursuant to an adjustment related to a corporate change affecting our common stock), expand the types of awards available to participants under the Amended and Restated Stock and Incentive Plan, materially expand the class of persons eligible to participate in the Amended and Restated Stock and Incentive Plan, delete or limit the provisions prohibiting the re-pricing of options or reduce

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the price at which shares may be offered under options, extend the termination date for making awards under the Amended and Restated Stock and Incentive Plan, or become effective if such amendment or modification is required under the rules the NASDAQ Stock Market or another national exchange on which the common stock is then listed, or other applicable law, rules or regulations, to be approved by stockholders.

The Compensation Committee may amend or modify any outstanding awards in any manner to the extent that the Compensation Committee would have had the authority under the Amended and Restated Stock and Incentive Plan initially to make such award as so amended or modified, provided that no amendment or modification shall materially adversely alter or impair an outstanding award without the consent of the participant affected thereby.

Federal Income Tax Considerations

The following discussion is a summary of certain U.S. federal income tax consequences to participants who may receive grants of awards under the Amended and Restated Stock and Incentive Plan and to the Company.  This discussion is not intended to constitute tax advice, does not purport to be complete, and does not cover, among other things, state, local or foreign tax treatment.

Restricted Stock Units and Performance Units

A recipient of restricted stock units and performance units generally will not be subject to tax at the time of grant, but will be subject to tax at ordinary income rates on the fair market value of any common stock issued or cash paid pursuant to such an award upon vesting.  The Company generally will be entitled to a deduction equal to the amount of the ordinary income realized by the recipient. The fair market value of the Company’s common stock (if any) received on the delivery date will be a participant’s tax basis for purposes of determining any subsequent gain or loss from the sale of the Company’s common stock. The capital gain or loss holding period for any common stock distributed under an award will begin when the recipient recognizes ordinary income in respect of that distribution.

Stock Awards

A recipient of restricted stock, performance shares or any other award of shares of common stock generally will be subject to tax at ordinary income rates on the fair market value of the common stock at the time the shares have been delivered and are no longer subject to forfeiture.  A recipient who so elects under Section 83(b) of the Internal Revenue Code within thirty days of the date of the grant of shares of common stock will have ordinary taxable income on the date of the grant equal to the fair market value of the shares as if the shares were unrestricted or the shares were earned and could be sold immediately.  If the shares subject to such election are forfeited, the recipient will not be entitled to any deduction, refund or loss for tax purposes with respect to the forfeited shares.  Upon sale of the restricted stock or performance shares after the forfeiture period has expired, the holding period to determine whether the recipient has long-term or short-term capital gain or loss begins when the restriction period expires.  If the recipient timely elects to be taxed as of the date of the grant, the holding period commences on the date of the grant and the tax basis will be equal to the fair market value of the shares on the date of the grant as if the shares were then unrestricted and could be sold immediately.  The Company generally is entitled to a deduction for compensation paid to a participant in the amount of ordinary income recognized by the participant. In the event that a restricted share award is forfeited by the participant after having made a Section 83(b) election, the Company will include in its income the amount of its original deduction.

Nonqualified Stock Options

For federal income tax purposes, no income is recognized by a participant upon the grant of a nonqualified stock option.  Upon exercise, the participant will realize ordinary income in an amount equal to the excess of the fair market value of a share of common stock on the date of exercise over the exercise price multiplied by the number of shares received pursuant to the exercise of such options.  A subsequent sale or exchange of such shares will result in gain or loss measured by the difference between (a) the exercise price, increased by any compensation reported upon the participant’s exercise of the option, and (b) the amount realized on such sale or exchange.  Any gain or loss will be capital in nature if the shares were held as a capital asset and will be long-term if such shares were held for more than one year.

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The Company generally is entitled to a deduction for compensation paid to a participant at the same time and in the same amount as the participant realizes compensation upon exercise of the option.

Incentive Stock Options

No taxable income is realized by the participant upon exercise of an incentive stock option granted under the Amended and Restated Stock and Incentive Plan, and if no disposition of those shares is made by such participant within two years after the date of grant and within one year after the transfer of those shares to the participant, then: (a) upon the sale of the shares, any amount realized in excess of the exercise price will be taxed as a long-term capital gain and any loss sustained will be taxed as a long-term capital loss, and (b) no deduction will be allowed to the Company for federal income tax purposes.  Upon exercise of an incentive stock option, the participant may be subject to alternative minimum tax on certain items of tax preference.

If the shares of common stock acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of the two-years-from-grant/one-year-from-transfer holding period, generally: (a) the participant will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares at exercise (or, if less, the amount realized upon disposition of the shares) over the exercise price, and (b) the Company generally will be entitled to deduct such amount.  Any additional gain or loss realized will be taxed as short-term or long-term capital gain or loss, as the case may be, and may not be deducted by the Company.  If an incentive stock option is exercised at a time when it no longer qualifies as an incentive stock option, the option will be treated as a nonqualified stock option.

Stock Appreciation Rights

No taxable income is recognized by a participant upon the grant of a SAR under the Amended and Restated Stock and Incentive Plan.  Upon the exercise of a SAR, the participant will realize ordinary income in an amount equal to the fair market value of the shares of common stock received and the amount of cash received. The participant’s basis in any shares received will equal the fair market value of such shares on the exercise date. Shares of common stock received upon the exercise of a SAR will, upon subsequent sale, be eligible for capital gains treatment, with the capital gains holding period commencing on the date of exercise of the SAR.

The Company is generally entitled to a deduction for compensation paid to a participant at the same time and in the same amount as the participant realizes ordinary income upon exercise of the SAR.

Other Awards

A participant will recognize ordinary income upon receipt of cash pursuant to a cash award and the Company generally will be entitled to a deduction equal to the amount of the ordinary income realized by the recipient.

Section 409A of the Internal Revenue Code

The terms of the Amended and Restated Stock and Incentive Plan and each award granted thereunder are intended to comply with Section 409A of the Internal Revenue Code, which imposes specific restrictions on nonqualified deferred compensation arrangements, whether by reason of such awards qualifying as short-term deferral or otherwise. Failure to satisfy the applicable requirements under these provisions for awards considered deferred compensation would result in the acceleration of income and additional income tax liability to the recipient, including certain penalties.

Effect of Section 162(m) of the Internal Revenue Code

Section 162(m) of the Internal Revenue Code limits to $1.0 million annually the deductibility of certain compensation received by individuals who serve as our Chief Executive Officer and certain individuals who serve as executive officers.  The deduction limit will apply to awards made under the Amended and Restated Stock and Incentive Plan.  Accordingly, the Company’s general ability to take deductions for compensation related to awards under the Amended and Restated Stock and Incentive Plan, as described above, may be limited by the application of Section 162(m) of the Internal Revenue Code.

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Future Plan Benefits

Awards under the Amended and Restated Stock and Incentive Plan are made at the discretion of the Compensation Committee.  Therefore, the benefits and amounts that will be received or allocated under the Amended and Restated Stock and Incentive Plan in the future are not determinable at this time.

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ITEM 4  RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Independent Registered Public Accounting Firm

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, 2021. We are submitting this selection for stockholder ratification at the Annual Meeting. We expect a representative of Ernst & Young LLP to be available 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, 2020.

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. This ratification 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.

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 years indicated below.

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​	​	​		​	Percent of	​	​		​	Percent of
​	​	​		​	2020 Services	​	​		​	2019 Services
​	​	​		​	Approved by	​	​		​	Approved by
​	​	2020		​	Audit Committee	​	2019		​	Audit Committee
Audit fees(1)		$	2,023,245		100	%	$	2,001,777		100	%
Audit-related fees(2)	​	​	298,195		100	%	​	263,200		100	%
Tax fees(3)	​	​	20,210	​	100	%	​	174,671	​	100	%
All other fees	​	​	—		—	%	​	—		—	%
Total fees		$	2,341,650	​	​		$	2,439,648	​	​	​

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(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, comfort letters and filings with the SEC.

(3)	Includes fees related to assistance with routine tax audits and tax planning, consulting and compliance services.

Fees paid to Ernst & Young LLP for services in 2020 were less than in 2019 primarily as a result of lower tax and compliance advisory fees, partially offset by increased fees related to the issuance of comfort letters for SEC filings in connection with the Company’s 2020 preferred stock issuances.

For audit, audit-related, tax-related 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.

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CORPORATE GOVERNANCE AT FIRST MIDWEST

Our Board of Directors is committed to maintaining strong corporate governance principles and practices.

For additional information about our corporate governance practices, you may view the following documents on our website at https://investor.firstmidwest.com/corporate-information/documents/ or request them in print by sending a written request to our Corporate Secretary at First Midwest Bancorp, Inc., 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631: ◆   Corporate Governance Guidelines ◆   Code of Ethics and Standards of Business Conduct (applicable to all directors, officers and employees) ◆   Code of Ethics for Senior Financial Officers ◆   Audit Committee Charter ◆   Compensation Committee Charter ◆   Enterprise Risk Committee Charter ◆   Nominating and Corporate Governance Committee Charter ◆   Related Party Transaction Policy

Corporate Governance Guidelines and Committee Charters Our Corporate Governance Guidelines and the charters of the Audit, Compensation, Enterprise Risk and Nominating and Corporate Governance Committees of our Board of Directors describe various aspects of 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 Business Conduct We have adopted a Code of Ethics and Standards of Business 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 Business 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 Market. Annually, all employees are required to certify that they have reviewed and are familiar with the Code of Ethics and Standards of Business Conduct, and all officers are required to certify compliance with this code. Waivers of the Code of Ethics and Standards of Business Conduct for executive officers and directors are required to be disclosed to the Chair of our Nominating and Corporate Governance Committee and must be approved by 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.

Director Independence

Our Board of Directors determines annually the independence of all non-employee directors in accordance with the independence requirements of our Corporate Governance Guidelines and 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 a determination of independence. Management then provides the Nominating and Corporate Governance Committee and the 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.

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Corporate Governance at First Midwest

Based on the review and recommendation by the Nominating and Corporate Governance Committee, our 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, our Chairman and Chief Executive Officer, and Mark G. Sander, our President and Chief Operating Officer, who are not considered to be independent under our Corporate Governance Guidelines and the rules of the NASDAQ Stock Market because they are employees of the Company. 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).

◆	Thomas L. Brown and Stephen C. Van Arsdell 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 Exchange Act 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 our 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 the Board leadership structure based on what it deems to be in the best interests of the Company and its stockholders. Our Nominating and Corporate Governance Committee annually reviews the composition of the Board and its committees. The Nominating and Corporate Governance Committee also reviews and recommends to the Board the duties and responsibilities of the Chairman and the Lead Independent Director.

Since 2017, Michael L. Scudder has served as our Chairman of the Board and Chief Executive Officer, with an independent member of our Board of Directors serving as our Lead Independent Director. In 2020, Ellen A. Rudnick was appointed to serve as our Lead Independent Director, succeeding J. Stephen Vanderwoude, who served in the position since 2017.

The Board of Directors believes that, at this time, the combination of the offices of Chairman of the Board and Chief Executive Officer and the maintenance of a separate Lead Independent Director role are appropriate for the Company. This leadership structure allows Mr. Scudder to leverage his extensive knowledge of the Company and industry experience into the strategic vision for the management and direction of the Company at both the Board and management level. This further allows him to drive the enhancement of stockholder value, grow and expand the Company’s business and execute the Company’s strategies.

Additionally, the Board believes it is appropriate to have a Lead Independent Director while Mr. Scudder serves as Chairman of the Board in order to provide Board leadership independent from management. The Lead Independent Director is empowered with, and exercises, well-defined duties that enable robust, objective oversight of the Board’s affairs and ensure independent challenge of management as appropriate. Ms. Rudnick has a strong understanding of the Company and its business, as well as extensive leadership, corporate governance and public company board experience.

Consistent with Mr. Scudder’s focus on the Company’s strategic vision and direction, since 2019, Mark G. Sander has served as President of the Company in addition to his position as Chief Operating Officer. In this role, Mr. Sander leads significant portions of the day-to-day management of the Company and the Bank.

Lead Independent Director

Our Lead Independent Director must satisfy the independence requirements of the NASDAQ Stock Market and must have served as a director of the Company for least one year. The Lead Independent Director serves in a

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leadership capacity among our independent directors and as an additional resource for the Chair of the Board in order to continue to foster a strong, highly engaged and high-performing Board of Directors.

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The principal duties and responsibilities of the Lead Independent Director are as follows:

◆	Act as a liaison on behalf of the independent directors with the Chair of the Board.

◆	Preside at all meetings of the Board of Directors and stockholders at which the Chair of the Board is not present.

◆	Consult with the Chair of the Board on the agendas and schedules for meetings of the Board of Directors.

◆	Have the ability to call meetings of the Board.

◆	Determine, in conjunction with the Board of Directors, the need for, have the ability to call, and preside at meetings of the independent directors and, following each such meeting, promptly communicate to the Chair of the Board the substance of the discussions that occurred at the meeting.

◆	Serve as a member of the Advisory Committee of the Board of Directors.

◆	Serve as the acting Chair of the Board in the event of an extended incapacitation of the Chair of the Board until the incapacitation has ended or a successor to the Chair of the Board is elected.

◆	Together with the Chair of the Board and the Chair of the Nominating and Corporate Governance Committee, interview all new director candidates.

◆	Consult with the Chair of the Board with respect to the quality and timeliness of information provided to the Board of Directors.

◆	Perform such other duties and responsibilities as may be assigned to the Lead Independent Director by the Board of Directors.

Risk Oversight

Risk is inherent in every business and particularly for regulated financial institutions. We have organized our risk profile and enterprise risk management framework into the following eight categories: Credit, Market, Liquidity, Operational, Compliance and Regulatory, Legal, Strategic and Reputational risks. We do not view risk in isolation, but rather consider risk as part of our ongoing consideration of business strategy and decisions. We also are mindful that risk oversight is not about eliminating all risks, but rather identifying, quantifying and managing or accepting risks at appropriate levels to achieve customer needs and business objectives in a prudent manner.

We support our risk oversight process through a governance structure involving our Board of Directors and management. Management is responsible for the day-to-day management of the risks the Company faces. Management establishes and maintains risk management processes, policies and tolerance ranges 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, who is responsible for the design and implementation of our risk management processes.

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 our enterprise risk management framework, policies and profiles designed and implemented by management are appropriate and functioning as contemplated. The Board performs its risk oversight function primarily through its committees and the operation of the Bank’s board of directors.

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Management’s risk oversight is primarily administered through our Risk Management Committee, which is composed of members of executive management. The committee’s purpose is to provide a centralized forum to monitor our risk management processes and the alignment of these activities with our risk appetite and business plan. In addition, the Risk Management Committee evaluates and considers emerging risks facing the Company, the financial services industry, and the communities and environments in which we operate.

The Risk Management Committee utilizes a sub-committee structure to frequently monitor and manage key risks within the eight risk categories. These key risks can include additional risk components, such as information security, environmental, credit quality and concentration, asset and liability management and various other risks that could impact the delivery of our services to our customers or our business generally. Cooperation across the Company is essential to adequately address these risks. Each sub-committee is comprised of the key colleagues and executives who manage each risk on a day-to-day basis. The sub-committees analyze and aggregate the various risk metrics to measure alignment with the stated risk objectives and appetites for each of the eight risk categories and report their findings to the Risk Management Committee.

After receiving, discussing and assessing the risk reports presented by the sub-committees and the Risk Management Committee, our Chief Risk Officer, reports at least quarterly to the Enterprise Risk Committee of our Board of Directors on each of our eight risk categories, as well as any other significant risk management matters that arise.

The Enterprise Risk Management Committee of our Board of Directors is primarily involved in assisting the Board with its oversight of enterprise-wide risk management. Among other responsibilities, this committee approves risk appetites and profiles established by management for key business risks and confirms that business decisions are executed within the established risk tolerances. After receiving, discussing and assessing the risk reports presented by the Chief Risk Officer on behalf of the Risk Management Committee, the Chair of the Enterprise Risk Committee presents a quarterly report to the Board of Directors.

Each of the Board’s standing committees is comprised entirely of independent directors and supports the Board’s oversight functions by regularly addressing various risks in their respective areas of oversight, as follows:

◆	Audit Committee. Assists the Board with risk oversight in the areas of financial reporting, internal controls, tax and compliance with certain public reporting requirements.

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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.

◆	Enterprise Risk Committee. Assists the Board in its oversight and assessment of management in connection with the operation of the Company’s enterprise-wide risk management framework.

◆	Nominating and Corporate Governance Committee. Assists the Board with risk oversight associated with corporate governance, including the Company’s corporate social responsibility framework and initiatives, Board and Board committee composition, and director and executive succession.

Each Board committee reports to the full Board of Directors at least quarterly 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 our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Risk Officer and General Counsel, as well as other members of management, regarding the Company’s risk management functions. Key members of senior management attend Board and Board committee meetings and are available to address any questions or concerns raised by the Board of Directors.

Information and Cybersecurity Risk Oversight

Information and cybersecurity risk oversight is a component of our enterprise risk management framework and is housed within the broader Operational risk profile of the Company. We recognize the importance of maintaining

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the trust of our customers with respect to their confidential financial information and devote significant attention to information and cybersecurity controls and protections.

Our Board of Directors oversees the management of information and cybersecurity risk. Senior management is responsible for the day-to-day management of information and cybersecurity risk and the design and implementation of policies, processes and procedures to identify and mitigate information and cybersecurity risk. Our Enterprise Risk Committee and our Board receive quarterly reports from and engage in discussions with senior management on the effectiveness of our information and cybersecurity program and review our inherent risks, the plans and programs designed to address these risks and our progress in doing so. Our cybersecurity response plan is a component of a broader crisis management plan, which outlines our approach for the urgent management, communication, and successful resolution of any known or suspected unauthorized access to customer information. Our response plan includes a reporting procedure for notifying the appropriate Federal and State regulators, filing timely suspicious activity reports in accordance with regulations, contacting law enforcement officials and notifying clients as needed. Our colleagues also complete privacy and information awareness training on at least an annual basis, with certain executives completing additional targeted awareness courses based on their privileged administrator access to our systems.

External parties, including cybersecurity firms, penetration testers and banking regulators, annually assess our information and cybersecurity program. We use the findings to analyze the effectiveness of our program and to identify opportunities to address and remedy any residual risks. In addition, we maintain robust cyber insurance and participate in financial industry cybersecurity and threat intelligence organizations to monitor and assess trends within the financial services industry.

Meetings

Our Board of Directors holds regular quarterly meetings and special meetings as needed. In 2020, the Board held four regularly scheduled meetings, and our independent directors met separately without management present following each regular meeting. In light of the COVID-19 pandemic, the Board also met six additional times during the year. Our directors also communicate with each other between meetings. Further, the Board of Directors devotes additional time outside of its regular meetings to discussions with our Chief Executive Officer and members of executive management about the Company’s long-term strategy, corporate objectives and initiatives and industry and market updates, which are then discussed further at the Board’s quarterly meetings.

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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. All of our directors attended last year’s annual meeting, and each of our directors attended 100% of the total number of meetings of the Board and committees on which he or she served during 2020.

Board Committees

Our Board of Directors has four standing committees: our Audit Committee, Compensation Committee, Enterprise Risk Committee and Nominating and Corporate Governance Committee. Each standing committee has a written charter that each committee and the Board of Directors review annually. Our Board 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 Market. The Board of Directors has also established an Advisory Committee for the purpose of providing advice to management with respect to business matters as needed between regular meetings of the Board and undertaking such other duties and responsibilities as may be delegated to this committee by the Board.

Under our Corporate Governance Guidelines, the members of each Board committee (including each committee chair) are appointed by the Board 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.

Below is a brief description, including membership and meeting information for 2020, 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

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out its responsibilities. The charter of each standing committee describes the specific responsibilities and functions of the committee. Copies of our Audit Committee, Compensation Committee, Enterprise Risk Committee and Nominating and Corporate Governance Committee charters are available by visiting our website at https://investor.firstmidwest.com/corporate-information/documents/.

Audit Committee

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​	​	# of Meetings
Committee Members	Primary Responsibilities	in 2020
Stephen C. Van Arsdell (Chair) Thomas L. Brown Phupinder S. Gill Kathryn J. Hayley Frank B. Modruson ​	◆   Appoint our independent registered public accounting firm and pre-approve all services performed by this firm. ◆   Oversee the external financial reporting process and the adequacy of the Company’s internal controls over financial reporting. ◆   Oversee the appointment of the audit services director, who is responsible for the Company’s internal audit function. ◆   Oversee the scope of the audit activities of the independent registered public accounting firm and the Company’s internal auditors. ◆   Oversee the process for determining the independence of the independent registered public accounting firm. ◆   Oversee the procedures for the receipt, retention and resolution of complaints regarding accounting, internal control or auditing matters. ◆   Discuss with management and the independent registered public accounting firm the critical accounting policies and practices used by the Company, any off-balance sheet items and significant judgments made in connection with the preparation of the Company’s financial statements. ◆   Discuss with management and the independent registered public accounting firm certain reports filed with the SEC. ◆   Discuss with management the Company’s policies and procedures relating to compliance with applicable laws and regulations pertaining to financial reporting and disclosure.	8

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Compensation Committee

Enterprise Risk Committee

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​	​	# of Meetings
Committee Members	Primary Responsibilities	in 2020
Thomas L. Brown (Chair) Phupinder S. Gill Frank B. Modruson Michael J. Small J. Stephen Vanderwoude	◆   Review and approve policies establishing risk management governance, risk appetite, risk management procedures and risk control infrastructure for the Company’s enterprise-wide operations. ◆   Approve our enterprise risk management framework and oversee management’s administration of the processes and systems for implementing and monitoring compliance with this framework. ◆   Approve the Company’s risk appetite statement. ◆   Review reports from management to evaluate the Company’s assessment and management of enterprise-wide risks identified through the enterprise risk management program. ◆   Review reports from management relating to its assessment and monitoring of credit, market, liquidity, operational, compliance and regulatory, legal, strategic and reputational risks at the Company. ◆   Review and recommend to the Board for approval annually the Company’s capital management policy. ◆   Review and recommend to the Board for approval annually the Company’s capital plan and monitor management’s adherence to the plan.	3*

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*    In 2020, our Enterprise Risk Committee met three times instead of four because, in light of the pandemic and the significance of the risks related thereto, the Committee conducted at a full Board meeting the business that it would have conducted at one of its meetings.

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Nominating and Corporate Governance Committee

Advisory Committee

Board and Committee Self-Evaluations

The Board of Directors and the Audit, Compensation, Enterprise Risk 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 an individual meeting with the Chair of the Nominating and Corporate Governance Committee. The results of the self-evaluations are reported to the Board of Directors.