Exhibit 10.3

 

PRINCETON NATIONAL BANCORP, INC.

 

2007 STOCK COMPENSATION PLAN

 

RESTRICTED STOCK AGREEMENT

 

Princeton National Bancorp, Inc. (the “Company”), an Illinois corporation,
pursuant to action of its Board of Directors and in accordance with the
Princeton National Bancorp, Inc. 2007 Stock Compensation Plan (the “Plan”), has
granted shares of Restricted Stock, upon the following terms as an incentive for
Grantee to promote the interests of the Company and its shareholders:

 

Name of Grantee:

 

 

 

Shares of Restricted Stock:

 

 

 

Grant Date:

 

 

This Restricted Stock Agreement evidences this grant of Restricted Stock (the
“Grant”), which has been made subject to all the terms and conditions set forth
in this Restricted Stock Agreement and in the Plan.

 

Section 1.    EFFECTIVE DATE.  This Grant of Restricted Stock to the Grantee is
effective as of [Grant Date] (the “Grant Date”).

 

Section 2.    VESTING.  All shares of Restricted Stock, if not earlier vested,
shall vest on dates set forth in the schedule below (the “Vesting Date” or
collectively the “Vesting Dates”), provided that on the Vesting Date, the
Grantee is an active employee of the Company or a Subsidiary and has been in the
continuous employment of the Company or a Subsidiary from the Grant Date through
the Vesting Date, and further provided the Company has repaid its obligations
under the U.S. Treasury’s Capital Purchase Program (“CPP) in an amount
sufficient to permit Grantee to become vested in Restricted Stock as reflected
in the schedule below. In no event shall the shares of Restricted Stock vest,
and Grantee shall forfeit the shares of Restricted Stock, if Grantee shall not
have continued to perform substantial services for the Company for at least two
years from the date of grant, other than due to the employee’s death or
disability, or a Change in Control, as defined in the Plan, that also
constitutes a change in control event (as defined in 26 CFR 1.280G–1, Q&A– 27
through Q&A–29 or as defined in 26 CFR 1.409A–3(i)(5)(i)) with respect to the
Company before the second anniversary of the date of grant. If Grantee is not an
active employee of the Company or a Subsidiary on the Vesting Date, Grantee
forfeits all rights to any shares that would otherwise vest on the Vesting Date;
provided, however, shares may vest prior to the Vesting Date in accordance with
the provisions of Section 3 or Section 4. If the Company has not repaid its
obligations under the U.S. Treasury’s Capital Purchase Program (“CPP”), on the
vesting date, then the Shares of Restricted Stock shall not vest or otherwise
become transferable until such CPP repayment (except as necessary to reflect a
merger or acquisition of the Company),

 

 

--------------------------------------------------------------------------------

 

 

except that: (i) 25% of the shares of Restricted Stock granted may vest at the
time of repayment of 25% of the aggregate obligations of the Company under the
CPP; (ii) an additional 25% of the shares of Restricted Stock granted (for an
aggregate total of 50% of the shares of Restricted Stock granted) may vest at
the time of repayment of 50% of the aggregate obligations of the Company under
the CPP; (iii) an additional 25% of the shares of Restricted Stock granted (for
an aggregate total of 75% of the shares of Restricted Stock granted) may vest at
the time of repayment of 75% of the aggregate obligations of the Company under
the CPP; and (iv) the remainder of the shares of Restricted Stock granted may
vest at the time of repayment of 100% of the aggregate obligations of the
Company under the CPP. In calculating such percentages, the portion of the
restricted stock units transferred or sold to pay taxes shall not count toward
the percentages above.  Subject to the above requirements, the shares of
Restricted Stock subject to the Grant shall vest in accordance with the
following schedule:

 

Number of Shares to Vest on Vesting Date

Vesting Date

 

2nd anniversary of Grant Date

 

3rd anniversary of Grant Date

 

 

Section 3.    ACCELERATED VESTING: CHANGE IN CONTROL.  Any shares of Restricted
Stock not previously vested shall vest on the date of a Change in Control of the
Company, except that in the event the Company has not repaid its obligations
under the CPP, then Restricted Stock shall only vest if the Change in Control
also constitutes a change in control event (as defined in 26 CFR 1.280G–1, Q&A–
27 through Q&A–29 or as defined in 26 CFR 1.409A–3(i)(5)(i)) with respect to the
Company.

 

 

Section 4.    TERMINATION OF EMPLOYMENT.

 

(a) If prior to the Vesting Date, the Grantee’s employment with the Company and
its Subsidiaries terminates for any reason other than those described in Section
4(b), and accelerated vesting as described in Section 3 has not then occurred,
then any shares of Restricted Stock that are not then vested shall be completely
forfeited on the date of such termination of Grantee’s employment.

 

(b) If the Grantee’s employment with the Company terminates prior to the Vesting
Date as a result of the Grantee’s (i) death, or (ii) disability within the
meaning of Code Section 22(e)(3), then any shares of Restricted Stock not
previously vested shall be vested immediately on the date of such termination of
Grantee’s employment.

 

--------------------------------------------------------------------------------

 

 

Section 5.    GRANTEE’S RIGHTS DURING RESTRICTED PERIOD.

 

(a)  During any period when the shares of Restricted Stock are forfeitable, the
Grantee may generally exercise all the rights, powers, and privileges of a
shareholder with respect to the shares of Restricted Stock, including the right
to vote such shares and to receive all regular cash dividends and any stock
dividends, and such other distributions as the Committee may designate in its
sole discretion, that are paid or distributed on such shares of Restricted
Stock. Any Stock dividends declared on a share of Restricted Stock shall be
treated as part of the Grant of Restricted Stock and shall be forfeited or
become nonforfeitable at the same time as the underlying Stock with respect to
which the Stock dividend was declared.

 

(b)  No rights granted under the Plan or this Restricted Stock Agreement and no
shares issued pursuant to this Grant shall be deemed transferable by the Grantee
other than by will or by the laws of descent and distribution prior to the time
the Grantee’s interest in such shares has become fully vested.

 

Section 6.    DELIVERY OF VESTED SHARES.

 

(a) Shares of Restricted Stock that have vested in accordance with Section 2,
Section 3 or Section 4 shall be delivered (via certificate or such other method
as the Committee determines) to the Grantee as soon as practicable after vesting
occurs.

 

(b) By accepting shares of Restricted Stock, the Grantee agrees not to sell
shares at a time when applicable laws or the Company’s rules prohibit a sale.
This restriction will apply as long as the Grantee is an employee, consultant or
director of the Company or a Subsidiary. Upon receipt of nonforfeitable shares
subject to this Restricted Stock Agreement, the Grantee agrees, if so requested
by the Company, to hold such shares for investment and not with a view of resale
or distribution to the public, and if requested by the Company, the Grantee must
deliver to the Company a written statement satisfactory to the Company to that
effect. The Committee may refuse to deliver (via certificate or such other
method as the Committee determines) any shares to Grantee for which Grantee
refuses to provide an appropriate statement.

 

(c) To the extent that Grantee does not vest in any shares of Restricted Stock,
all interest in such shares shall be forfeited. The Grantee has no right or
interest in any share of Restricted Stock that is forfeited.

 

Section 7.    WITHHOLDING.

 

(a) Upon the vesting of any shares of Restricted Stock, the Grantee must pay to
the Company any applicable federal, state or local withholding tax due as a
result of the vesting. Alternatively, if the Grantee makes a proper Code
Section 83(b) election, the Grantee must notify the Company in accordance with
the requirements of Code Section 83(b) and promptly pay to the Company the
applicable federal, state, and local withholding taxes due with respect to the
shares of Restricted Stock subject to the election.

 

 

--------------------------------------------------------------------------------

 

 

(b) The Committee shall have the right to reduce the number of shares of Stock
delivered (via certificate or such other method as the Committee determines) to
the Grantee to satisfy the minimum applicable tax withholding requirements, and
the Grantee shall have the right (absent any such action by the Committee and
subject to satisfying the requirements under Rule 16b-3) to elect that the
minimum applicable tax withholding requirements be satisfied through a reduction
in the number of shares of Stock delivered (via certificate or such other method
as the Committee determines) to him.

 

Section 8.    NO EMPLOYMENT RIGHTS.  Nothing in the Plan or this Restricted
Stock Agreement or any related material shall give the Grantee the right to
continue in the employment of the Company or any Subsidiary or adversely affect
the right of the Company or any Subsidiary to terminate the Grantee’s employment
with or without cause at any time.

 

Section 9.    OTHER LAWS.  The Company shall have the right to refuse to issue
or transfer any shares under this Restricted Stock Agreement if the Company
acting in its absolute discretion determines that the issuance or transfer of
such Stock might violate any applicable law or regulation.

 

Section 10.    MISCELLANEOUS.

 

(a) This Restricted Stock Agreement shall be subject to all of the provisions,
definitions, terms and conditions set forth in the Plan and any interpretations,
rules and regulations promulgated by the Committee from time to time, all of
which are incorporated by reference in this Restricted Stock Agreement.
 Capitalized terms used in this Restricted Stock Agreement that are not defined
herein shall have the meanings assigned to such terms in the Plan.

 

(b) The Plan and this Restricted Stock Agreement shall be governed by the laws
of the State of Illinois (without regard to its choice-of-law provisions).

 

(c) Any written notices provided for in this Restricted Stock Agreement that are
sent by mail shall be deemed received three (3) business days after mailing, but
not later than the date of actual receipt. Notices shall be directed, if to
Grantee, at Grantee’s address indicated by the Company’s records and, if to the
Company, at the Company’s principal executive office.

 

(d) If one or more of the provisions of this Restricted Stock Agreement shall be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and the invalid, illegal or unenforceable provisions shall
be deemed null and void; however, to the extent permissible by law, any
provisions which could be deemed null and void shall first be construed
retroactively to permit this Restricted Stock Agreement to be construed so as to
foster the intent of this Restricted Stock Agreement and the Plan.

 

 

 

--------------------------------------------------------------------------------

 

 

(e) This Restricted Stock Agreement (which incorporates the terms and conditions
of the Plan) constitutes the entire agreement of the parties with respect to the
subject matter hereof. This Restricted Stock Agreement supersedes all prior
discussions, negotiations, understandings, commitments and agreements with
respect to such matters.

 

Princeton National Bancorp, Inc.

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Its:

 

 

 

 

 

 

 

Dated:

 

, 20

 

 

Dated:

 

, 20

 

 

 

--------------------------------------------------------------------------------