Exhibit 10.5A
 
Compensation Amendment and Waiver Agreement
 
Under the TARP Capital Purchase Program
 
July 2009
 
TO:           [employee name]

As you know, MB Financial, Inc. is a participant in the United States Department
of Treasury (“Treasury”) TARP Capital Purchase Program (“CPP”).  The Company
entered  into a letter agreement with Treasury in connection with that
participation, which included a Securities Purchase Agreement – Standard Form
(“Treasury Investment Agreement”) providing for the sale to the Treasury of
preferred stock and a warrant .  The period that Treasury holds the preferred
stock acquired from the Company in the CPP is the “TARP Period.”  Certain other
terms used in this agreement are defined below.
 
In order for the Company to maintain compliance with the requirements of
participation in the CPP as amended by legislation and regulations issued
earlier this year, the Company is required to take certain actions and adopt
certain standards, and to make certain changes, to certain compensation
arrangements of its senior executive officers and most highly compensated
employees, in each case as those individuals are determined under applicable
rules.  You are or may become a senior executive officer and/or a most highly
compensated employee to whom some or all of the requirement may apply.
 
To comply with these requirements, and in consideration of your eligibility to
receive future incentive compensation (including equity compensation) and the
benefits that you receive as an employee, officer and/or stockholder of the
Company as a result of the Company’s participation in the CPP, you agree as
follows:
 
(A)
Prohibition on Certain Bonus, Retention or Incentive Compensation.  If you are
one of the Company’s top five most highly compensated employees (a “High-5
Employee”) during the TARP Period, you may not earn, nor may the Company pay or
award to you, any bonus, retention or incentive compensation for or at the times
you are a High-5 Employee. However, this restriction does not preclude the
awarding or earning of incentive compensation in the form of restricted stock or
units to the extent permitted under the applicable Treasury regulations, or
bonus, retention or incentive compensation as may otherwise be permitted under
the Treasury regulations. Such permitted compensation includes bonus payments
made prior to June 15, 2009, compensation attributable to long-term incentive
awards or other contractual commitments in effect on February 9, 2009, or
compensation which qualifies as commission payments under EESA.

 
(B)
Clawback and Repayment of Bonus and Incentive Compensation.  If, during the TARP
Period, you are a senior executive officer (a “SEO”) or you are one of top
twenty most highly compensated of the other employees (a “Top-20 Employee”), any
bonus, retention or incentive compensation payments you receive will be subject
to recovery (clawback) by the Company if the payment was based on materially
inaccurate financial statements or any other materially inaccurate performance
metric or criteria.

 
(C)
No Tax Gross-Up Payment.  If you are one of the Company’s SEOs or a Top-20
Employee during the TARP Period, the Company may not pay you any amount as a
reimbursement of taxes owed by you with respect to your compensation.

 
 
 

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(D)
Prohibition on Severance or CIC Payments.  If at the time of your departure
(termination of employment) or a change in control (“CIC”) of the Company during
the TARP Period you are one of the Company’s SEOs or you are one of the top five
most highly compensated of the other employees (each such individual referred to
as a “Top-10 Employee”), the Company may not make any severance or CIC payment
to you at that time or later, including after the TARP Period. A severance or
CIC payment for this purpose has the same meaning as “golden parachute payment”
under EESA.  Generally, a payment (such as cash payment) or a benefit (such as
accelerated vesting of an equity award) will be a golden parachute payment under
EESA if it is triggered by a change in control of the Company or if the payment
or benefit is triggered by the circumstances relating to termination of
employment (such as severance pay paid upon involuntary termination without
cause). A payment or benefit will not be a prohibited severance or CIC payment
if the payment or benefit has already been earned (such as vested deferred
compensation or a vested stock option) by the date of the CIC or termination of
employment.

 
(E)
Avoidance of Compensation Arrangements Encouraging Excessive Risks, Posing Risks
to the Company or Encouraging Manipulation of Reported Earnings.  EESA requires
the Organization and Compensation Committee of the Company’s Board of Directors
(the “Compensation Committee”) to periodically review the provisions of the
Company’s Compensation Arrangements for the purposes of determining if such
arrangements encourage the taking of unnecessary and excessive risks that
threaten the value of the Company, or pose unnecessary risks to the Company or
encourage manipulation of reported earnings. To the extent the Compensation
Committee determines any such circumstances exist, it is obligated to take
action to modify such Compensation Arrangements to limit unnecessary risks or
features that encourage earnings manipulation.

 
(F)
Amendment of Compensation Arrangements; Waiver and Repayment.  Each of the
Company’s current and future compensation, bonus, incentive and other benefit
plans, programs, arrangements and agreements of any type under which you are or
may in the future be covered by or be a party to (collectively, “Compensation
Arrangements”) is deemed amended by this letter agreement to the extent
necessary to give effect to the prohibitions, limitations and requirements of
EESA referred to in paragraphs (A) through (F) above, and to otherwise comply
with the applicable requirements of EESA.  For this purpose, Compensation
Arrangements include, without limitation, all employment agreements, change of
control agreements, annual bonus and other incentive plans, and stock option,
restricted stock and other cash-based or equity-based compensation plans and
agreements.

 
 
To the extent required by EESA, any payment or award to you which is provided
for in any such Compensation Arrangement is subject to waiver, forfeiture or
repayment to the extent such payment or award is subject to recovery or clawback
as described above or did or would violate any applicable provision of EESA. In
the event of any such circumstance, you shall be deemed to have waived your
right to such payment or award such that no obligation on the part of the
Company to pay or provide such waived amount shall exist, and you agree to such
waiver and forfeiture, and, if applicable, to repay such amounts within 15 days
of receipt of notice from the Corporation that such repayment is required.

 
(G)
Definitions, Interpretation and Application.  The following definitions and
interpretations shall apply to this letter:

 
 
 
 

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“EESA” means the Emergency Economic Stabilization Act of 2008, as amended by the
American Recovery and Reinvestment Act, and as implemented by rules,
regulations, guidance or other requirements issued thereunder governing the CPP
that have been issued by the Treasury, including, but not limited to the Interim
Final Rule issued by the U.S. Treasury Department on June 15, 2009, together
with any future amendments thereto, and any subsequent or similar legislation,
rules, regulations and/or interpretations that may from time to time be enacted
or promulgated.
 
“Senior executive officer,” “SEO” and “most highly compensated employee” have
the meanings of such terms as defined under EESA and the regulations
thereunder.  Generally, the determination of those individuals who are the
Company’s SEOs or a High-5, Top-20, or Top-10 Employee for a calendar year
during the TARP Period is fixed on January 1 of that year based on proxy
statement rules (which automatically treat the CEO and CFO as SEOs) and
compensation for the prior calendar year. Your execution of this letter
agreement shall not be determinative of your status as an SEO, a High-5, Top-20
or Top-10 Employee. The Company will advise you as to whether you are an SEO,
High-5, Top 20 and/ or Top-10 Employee of the Company.
 
“Company” means MB Financial, Inc. and includes MB Financial Bank, N.A. and any
other entities treated as a single employer with MB Financial, Inc. under EESA.
 
The application of paragraphs (A) through (F) of this letter agreement are
intended to, and shall be interpreted, administered and construed to amend the
Compensation Arrangements only to the extent necessary to comply with the
limitations, prohibitions and requirements of EESA and, to the maximum extent
consistent with paragraphs (A) through (F) and EESA, to permit the operation of
the Compensation Arrangements in accordance with their terms before giving
effect to the provisions of this letter agreement.
 
If this letter agreement sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter agreement
which, together with any agreement and waiver you entered into at the time the
Company entered into the Treasury Investment Agreement,  will then constitute
our agreement on this subject.
 

 
Sincerely,
MB Financial, Inc.
 
By:
 
Name:[executive name]
 
Title: [executive title]
Intending to be legally bound, I agree to and accept the foregoing terms:
 
 
Print Name: ___________________________