Exhibit 10.50**Execution Copy****MIDWEST BANC HOLDINGS, INC.****MUTUAL AGREEMENT RE SEVERANCE AND RETIREMENT**     THIS MUTUAL AGREEMENT RE SEVERANCE AND RETIREMENT (the “**Agreement**”), dated as of January 14,2008 (the “**Effective Date**”), by and between JOHN EILERING (the “**Executive**”) and MIDWEST BANCHOLDINGS, INC. (the “**Company**”);**R****e****c****i****t****a****l****s****:**     **A. **The Executive and his previous employer, Northwest Suburban Bancorp, Inc. (“**Northwest**”)have previously entered into: that Mutual Termination Agreement dated March 22, 2007 (the “**MutualTermination Agreement**”) (attached as Exhibit A hereto), that Transitional EmploymentAgreement dated March 22, 2007 (the “**Transitional Employment Agreement**”) (attached as ExhibitB hereto), and that Supplemental Executive Retirement Agreement dated January 1, 2007 (the“**SERP**”) (attached as Exhibit C hereto);     **B. **The Company, as successor to Northwest, has assumed all rights and obligations of Northwestas provided in the Mutual Termination Agreement, the Transitional Employment Agreement and theSERP;     **C. **The Company granted to the Executive, pursuant to that Restricted Stock Award Agreement andthe Restricted Stock Grant Notice both dated October 1, 2007 (together, the “**Restricted StockAgreement**”) (attached as Exhibit D hereto), 10,000 shares of the Company’s common stock;     **D. **In connection with, and as a condition to, the delivery of the Restricted Stock Agreement,the Executive was required to execute that Confidential Information and Non-Solicitation Agreementdated October 1, 2007 (the “**Restrictive Covenant Agreement**”) (attached as Exhibit Ehereto);     **E. **The Company wishes to provide for, in writing, the continued employment of the Executivethrough January 1, 2009;     **F. **The Executive desires to provide services to the Company through January 1, 2009;     **G. **The Executive’s employment can be extended beyond January 1, 2009, by joint agreement ofboth parties; and     **H. **For good and valuable consideration, the sufficiency of which is hereby acknowledged, theCompany and the Executive now desire to amend certain provisions of the Mutual TerminationAgreement, Transitional Employment Agreement, SERP, Restricted Stock Agreement and RestrictiveCovenant Agreement with immediate effect.
 

 
**A****g****r****e****e****m****e****n****t****s****:**     In consideration of the foregoing premises, which are incorporated herein by reference, andthe covenants and agreements of the parties herein contained, the parties hereto, intending to belegally bound, hereby agree as follows:     **1. ****Employment**. The Company hereby agrees to continue the Executive in its employbeginning on the Effective Date through January 1, 2009 (the “**Employment Period**”), with the sametitles, duties and responsibilities as in effect immediately prior to the Effective Date. TheExecutive agrees that during the Employment Period he shall continue to devote such time to hisduties as devoted prior to the Effective Date and shall perform such duties faithfully; *provided,however*, that the Executive’s continued service for other corporations or entities, and on anyother corporate, civic, charity or foundation board shall not be deemed to breach the Executive’sobligations hereunder; *provided, further*, that it is the expectation of the parties that theExecutive’s duties will change following January 1, 2009, such that he shall have less directreports and shall have added leadership responsibilities as head of cash management for the bank(or such similar role).     **2. ****Mutual Termination Agreement Amendment**. (a) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 2(d) of the Mutual Termination Agreement shall be replaced with thefollowing new Section 2(d):“In the event of the Executive’s termination, whether voluntary orinvoluntary (but other than for ‘cause,’ as defined in theTransitional Employment Agreement, whether or not such agreement isapplicable or in effect), at any time on or after January 1, 2009,the Executive shall be entitled to receive similar severancebenefits as if terminated under the Transitional EmploymentAgreement for the 12-month period following termination; *provided,however*, that if Executive is terminated by the Company other thanfor ‘cause,’ prior to January 1, 2009, the Executive shall beentitled to receive similar severance benefits as if terminatedunder the Transitional Employment Agreement for the 12-month periodfollowing termination; *provided, further*, that no such payment shallbe made under this provision if he is entitled to receive severancebenefits under any other provision of this Agreement or atransitional employment agreement. By way of clarification, it isthe parties intent that the Executive is not to receive duplicatebenefits under the Transitional Employment Agreement, this Agreementor a new transitional employment agreement (or internally in any oneof the agreements).” (b) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 3 of the Mutual Termination Agreement shall be replaced with thefollowing new Section 3:
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“The Executive agrees to abide by the terms of the restrictivecovenant as set forth in Section 7 of the Employment Agreement;*provided, however*, as of the Effective Time, the thirty-six (36)month restricted period shall be reduced to a period beginning onthe Executive’s date of termination (if such termination occursprior to January 1, 2009) and ending on January 1, 2009 and shall beineffective thereafter, regardless of the time of termination ofemployment or the reason for such termination of employment.”     **3. ****Transitional Employment Agreement Amendment**. (a) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 7 of the Transitional Employment Agreement shall be deleted in itsentirety and replaced with “Reserved.”  (b) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 15 of the Transitional Employment Agreement shall be amended by adding asa part thereof immediately after the last sentence of the existing Section 15 thefollowing new paragraph:“Notwithstanding the foregoing, in the event of the Executive’stermination, whether voluntary or involuntary (but other than for‘cause,’ as defined in Section 5(c)), at any time on or afterJanuary 1, 2009, the Non-Solicitation Period shall be eliminated.”     **4. ****SERP Amendment**. (a) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 2.1 of the SERP shall be replaced with the following new Section 2.1:“2.1 Normal Retirement Benefit. Subject to Article 6, uponthe earlier of (a) the Executive’s Normal Retirement Age, (b)Executive’s Separation from Service on or after January 1, 2009 forany reason, or (c) the termination of the Executive by the Companyfor reasons other than a Termination for Cause, after December 31,2007 and prior to January 1, 2009, the Employer shall pay to theExecutive the benefit described in this Section 2.1 in lieu of anyother benefit under this Agreement.    2.1.1 Amount of Benefit. The annual benefit underthis Section 2.1 is an amount equal to the Executive’s Final Salarymultiplied by the Benefit Percentage.    2.1.2 Payment of Benefit. The Employer shall pay theannual benefit to the Executive in twelve (12) equal monthlyinstallments payable on the first day of each month commencing withthe month following the earliest of the three events set forth in
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Sections 2.1(a), (b) or (c). Notwithstanding the foregoing, thefirst payment may be made within 45 days following such commencementdate. The annual benefit shall be paid to the Executive for fifteen(15) years.” (b) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 2.2 of the SERP shall be replaced with the following new Section 2.2:“2.2 Early Retirement Benefit. Subject to Article 6, uponSeparation from Service (a) on or after the Early Retirement Age butbefore January 1, 2009 (other than as may be provided in Section2.1(c)) for reasons other than Disability and (b) after completingfive (5) continuous years of employment with the Employer or anySubsidiary after the Effective Date, the Employer shall pay to theExecutive the benefit described in this Section 2.2 in lieu of anyother benefit under this Agreement.” (c) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 6.3 of the SERP shall be amended by adding as a part thereof thefollowing new subsection 6.3.5:“6.3.5 Notwithstanding any provision of this Agreement to thecontrary, in the event of the Executive’s Separation from Service onor after January 1, 2009, the restrictive covenants set forth inthis Section 6.3 shall cease to have any effect and the Executiveshall no longer be bound by such restrictive covenants.” (d) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Section 7.5.1 of the SERP shall be replaced with the following new Section 7.5.1:“7.5.1 Economic Benefit Provided to Executive. For eachcalendar year for which this Agreement is in force, the economicbenefit provided to Executive under this Section 7.5 is limited tocurrent life insurance protection in an amount equal to the totalage 65 liability accrued on the Company’s records as of the endof the preceding calendar year (the “Current Life InsuranceProtection Amount”). By way of clarification, and not limitation,it is the intent of the parties that this Section 7.5.1 shall not inanyway limit the benefits under Article 2 of this Agreement absentthe death of the Executive.” (e) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, Article 10 of the SERP shall be deleted in its entirely and shall have no forceand effect to reduce any benefit which may otherwise be provided to the Executive underthe SERP.
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     **5. ****Restricted Stock**. (a) The Company and the Executive acknowledge and agree, that as of the EffectiveDate, the “Restricted Stock Grant Notice” portion of the Restricted Stock Agreementshall be amended to provide that the 10,000 shares of the Company’s common stocksubject to the Restricted Stock Agreement shall become immediately and fully vested asof the earlier of (a) January 1, 2009, (b) the termination of the Executive by theCompany for reasons other than Cause (as defined in the Transitional EmploymentAgreement, whether or not such agreement is applicable or in effect), (c) the death orDisability of the Executive, or (d) a Change in Control of the Company.  (b) In the event that the Company grants to Executive restricted stock in 2008,then the Company’s common stock subject to such restricted stock award shall becomeimmediately and fully vested as of the earlier of (a) January 1, 2009, (b) thetermination of the Executive by the Company for reasons other than Cause (as defined inthe Transitional Employment Agreement, whether or not such agreement is applicable orin effect), (c) the death or Disability of the Executive, or (d) a Change in Control ofthe Company.     **6. ****Restrictive Covenant Agreement Amendment**. The Company and the Executiveacknowledge and agree, that as of the Effective Date, the Restrictive Covenant Agreement shall becancelled and that neither party, nor their heirs, dependents, successors or assigns, shall haveany rights or obligations thereunder except as provided herein.     **7. ****Code Sections 280G and 4999****.**Notwithstanding anything to the contrary in any otheragreement, plan, program or arrangement, it is the intent of the parties that there shall be noeffective provisions, in any such agreement, plan, program or arrangement that would act to limitany benefits or payment due to the Executive on the basis that such amounts exceed any limitationsunder Section 280G of the Internal Revenue Code of 1986, as amended (the “**Code**”) and thereby aresubject to the excise tax imposed by Section 4999 of the Code. Additionally, it is the intent ofthe parties that there shall be no effective provisions in any such agreement, plan, program orarrangement that would act to obligate the Company or any of its affiliates to reimburse theExecutive for any additional taxes in the event any benefits or payment due to Executive exceed any limitations under Section 280G of the Code and are therebybe subject to the excise tax imposed by Section 4999 of the Code.     **8. ****Section 409A****.** (a) To the extent that any of the terms and conditions contained herein constitutean amendment or modification of the time or manner of payment under a non-qualifieddeferred compensation plan (as defined under Code Section 409A), then to the extentnecessary under the transitional guidance under Internal Revenue Service Notice 2007-86(the “Transition Rules”), this Agreement constitutes an amendment to, and a newelection under, such deferred compensation plan, in order to properly modify the timeor manner of payment consistent with such guidance.
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 (b) Notwithstanding anything contained herein to the contrary, any amounts that areto be, or could be, distributed from a non-qualified deferred compensation plan during2008 due to the amendments contained herein, shall be made in accordance with suchamendments to the maximum extent permitted under the Transition Rules. It is theintent of the parties hereto that the foregoing shall in no way limit the economicbenefits contemplated by the amendments contained herein and that the parties shalltake all reasonable actions necessary which are not in contravention of Code Section409A to maintain to the maximum extent possible such intentions.  (c) The parties agree and acknowledge that the Executive is a “specified employee”as that term is used in Code Section 409A(a)(2)(B), and therefore all payments toExecutive that may constitute deferred compensation (as defined under Code Section409A), shall be deferred for a period of six (6) months from the Executive’s date oftermination. For purposes of Code Section 409A, all payments of deferred compensationmade hereunder or pursuant to another plan or arrangement, shall be deemed to beseparate payments and, accordingly, the aforementioned deferral shall only apply toseparate payments which would occur during the six (6) month deferral period and allother payments shall be unaffected. All payments deferred pursuant to this Section 8,shall be paid in full on the first day of the seventh (7th) month followingExecutive’s date of termination.  (d) It is intended that the provisions of this Agreement, and all compensationplans and programs sponsored by the Company in which Executive participates, complywith, or remain exempt from, Code Section 409A, and all provisions of this Agreementshall be construed and interpreted in a manner consistent with such intentions. Fromand after the Executive’s date of termination, (i) the Company shall administer andoperate this Agreement and any non-qualified deferred compensation plan (and any otherarrangement that could reasonably be expected to constitute such a plan) in which theExecutive participates and the Executive’s rights and benefits hereunder and thereunder in compliance with CodeSection 409A and any rules, regulations or other guidance promulgated thereunder asin effect from time to time, and (ii) in the event that the Company determines thatany provision of this Agreement or any such plan or arrangement does not comply withCode Section 409A or any such rules, regulations or guidance and that the Executivemay become subject to an additional tax under Code Section 409A (a “**Section 409ATax**”), the Company shall amend or modify such provision, to the extent possible, toavoid the application of the Section 409A Tax. In the event the Company is unableto amend or modify a provision to avoid application of the Section 409A Tax, theExecutive will remain responsible to pay the Section 409A Tax. Moreover, theCompany will not indemnify the Executive for the Section 409A Tax.     **9.****Indemnification**. In the event that legal action is instituted against theExecutive during or after the term of his or her employment by a third party (or parties) based onthe performance or nonperformance by Executive of his or her duties as an officer or director ofthe
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Company or any of its affiliates or a fiduciary of any benefit plan maintained by the Companyor any of its affiliates during his or her employment with the Company, the Resulting Entity, theirsuccessors and predecessors (collectively, the “**Indemnifying Party**”) or their affiliates, theIndemnifying Party will assume the defense of such action by its attorney or attorneys selected bythe Indemnifying Party and will advance the costs and expenses thereof (including reasonableattorneys’ fees) and will indemnify the Executive against any judgment or amounts paid insettlement of said actions in accordance with its charter, by-laws, insurance and applicable law,without prejudice to or waiver by the Indemnifying Party of its rights and remedies againstExecutive. In the event that there is a settlement or final judgment entered against Executive inany such litigation, and the Indemnifying Party’s Board of Directors determines that Executiveshould, in accordance with the Indemnifying Party’s charter, by-laws, insurance and applicable law,reimburse the Indemnifying Party, Executive shall be liable to the Indemnifying Party for all suchcosts, expenses, damages and other amounts paid or incurred by the Indemnifying Party in thedefense, settlement or other resolution of any such litigation (the “**Reimbursement Amount**”). TheReimbursement Amount shall be paid by Executive within thirty (30) days after rendition of thefinal judgment. The Indemnifying Party shall be entitled to set off the reimbursement amountagainst all sums which may be owed or payable by the Indemnifying Party to Executive hereunder orotherwise. The parties shall cooperate in the defense of any asserted claim, demand or liabilityagainst Executive or the Indemnifying Party or its subsidiaries or affiliates. The term “finaljudgment” as used herein shall be defined to mean the decision of a court of competentjurisdiction, and in the event of an appeal, then the decision of the appellate court, afterpetition for rehearing has been denied, or the time for filing the same (or the filing of furtherappeal) has expired.     The rights to indemnification under this Section 8(d) shall be in addition to any rights whichExecutive may now or hereafter have under the charter or By-Laws of the Indemnifying Party or anyof its affiliates, under any insurance contract maintained by the Indemnifying Party or any of its affiliates or any agreement between Executive and the Indemnifying Party or anyof its affiliates.     **10. ****Legal Fees**. (a) Notwithstanding anything to the contrary in any other agreement, plan, programor arrangement, in the event of any controversy or claim by either party under thisAgreement, or any other agreement, plan, program or arrangement in which Executive isthe prevailing party in any final and legally binding adjudication (as to which allperiods for the filing of any appeal have expired) with respect to such controversy orclaim or which controversy or claim is settled by mutual agreement between the parties,Executive shall be entitled to reimbursement from the Company for reasonable attorney’sfees and costs and for all other reasonable expenses of such adjudication  (b) The Company shall pay legal fees for the drafting and negotiating of thisAgreement directly to the law firm of Barack Ferrazzano Kirschbaum & Nagelberg, LLP(the “**Firm**”), with such payment to be made within fifteen (15) calendar days followingthe Effective Date. The payment of such fees shall be reflected on an IRS Form 1099designating the Firm as the payee and the Company as the payor.
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     **11. ****Conflicting Provisions****.**In the event of any inconsistency between this Agreementand any other agreement, plan, program, policy or practice (collectively, “**Other Provision**”) of theCompany, the provision which is more favorable to Executive shall control, unless such OtherProvision provides otherwise by a specific reference to this Section 11.     **12. ****Governing Law**. This Agreement shall be construed in accordance with the laws ofthe State of Illinois, without regard to the conflict of law provisions of any jurisdiction.     **13. ****Counterparts**. This Agreement may be executed simultaneously in one or morecounterparts, each of which shall be deemed an original, but all of which together shall constituteone and the same instrument.     **14. ****Binding Effect; Assignment**. This Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns; *provided, however*, thatneither party hereto may assign this Agreement without the prior written consent of the otherparty. Notwithstanding the foregoing, this Agreement may be assigned, without the prior consent ofthe Executive to a successor of the Company (and the Executive hereby consents to the assignment ofthe covenants under this Agreement to a purchaser of all or substantially all of the assets of theCompany, or a transferee, by merger or otherwise, of all or substantially all of the businesses andassets of the Company) and, upon the Executive’s death, this Agreement shall inure to the benefitof and be enforceable by the Executive’s executors, administrators, representatives, heirs,distributees, devisees, and legatees and all amounts payable hereunder shall be paid to suchpersons or the estate of the Executive.*[Remainder of page intentionally blank]*
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     **In Witness Whereof**, this Agreement has been duly executed as of the Effective Date.          /s/ John G. Eilering Date: 1/14/08** **      **JOHN EILERING**             **MIDWEST BANC HOLDINGS, INC.**             /s/ James J. Giancola Date: 1/14/08** **      By: James J. Giancola               Title: President and Chief Executive Officer               
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