exhibit10_9.htm


    Exhibit
      10.9

    


    TAX
      GROSS UP AGREEMENT

    


    This
      Tax
      Gross Up Agreement (this “Agreement”) is entered into this 14th day of
      December, 2007 by and between MB Financial, Inc. (the “Company”) and Larry J.
      Kallembach (the “Employee”).

    


    WHEREAS,
      it is possible that the Employee may receive or be entitled to receive payments
      or benefits from the Company and/or its subsidiaries (“Payments”) in connection
      with or arising from a Change in Control (as hereinafter defined), or an
      associated event linked to a Change in Control, which could result in the
      receipt by the Employee of an “excess parachute payment” (as such term is
      defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended
      (the “Code”));

    


    WHEREAS,
      if the Employee receives an “excess parachute payment” from the Company and/or
      any of its subsidiaries, the Employee will be subject to a 20% excise tax under
      Section 4999 of the Code;

    


    WHEREAS,
      it is the intention of the parties that the Employee should not be subject
      to
      any penalty tax by virtue of any Payments unless his employment ceases due
      to a
      Termination for Cause or a Voluntary Termination (as such terms are hereinafter
      defined); and

    


    WHEREAS,
      it has been agreed to by the Company and the Employee that if the Employee
      is
      subject to an excise tax under Section 4999 by virtue of any Payments, then
      the
      Company shall make an additional cash payment or cash payments to the Employee
      that will provide the Employee with sufficient funds, on an after tax basis,
      to
      pay the penalty tax imposed on any such Payment and the penalty tax imposed
      on
      the additional cash payment or payments, unless the Employee's
      employment ceases due to a Termination for Cause or a Voluntary
      Termination.

    


    NOW,
      THEREFORE, in consideration of the premises, and for other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged
      by
      the parties, it is agreed by the parties as follows:

    


    1.           Definition
      of Certain Terms.

    


    (a)           “Change
      in Control” means a change in ownership of the Company or a significant
      financial institution subsidiary of the Company that independently or in
      conjunction with another event (such as a termination of the employment of
      the
      Employee) would result in the Employee receiving an “excess parachute payment”
under Section 280G of the Code.

    


    (b)           “Termination
      for Cause” means termination of the employment of the Employee by the Company or
      a Company subsidiary at any time prior to or within one year following a Change
      in Control because of the Employee's
      willful misconduct, breach of a fiduciary duty involving personal profit,
      intentional failure to perform stated duties, willful violation of any law,
      rule, or regulation (other than traffic violations or similar offenses) or
      final
      cease-and-desist order, or material breach of his written employment agreement,
      if any, with the Company or a Company subsidiary.  No act or failure
      to act by the Employee shall be considered willful unless the Employee acted
      or
      failed to act in bad faith and without a reasonable belief that his action
      or
      failure to act was in the best interest of the Company or a Company
      subsidiary.  The Employee shall not be subject to or experience a
      Termination for Cause unless and until there shall have been delivered to the
      Employee a copy of a resolution, duly adopted by the affirmative vote of not
      less than a majority of the entire membership of the Board of Directors of
      the
      Company (the “Board”) at a meeting of the Board duly called and held for such
      purpose (after reasonable notice to the Employee and an opportunity for the
      Employee, together with the Employee’s counsel, to be heard before the Board),
      stating that in the good faith opinion of the Board the Employee has engaged
      in
      conduct described above and specifying the particulars thereof in
      detail.

    


    (c)           “Voluntary
      Termination” means the termination of employment by the Employee voluntarily
      within one year prior to or within one year after a Change in Control; except
      a
      Voluntary Termination shall not include a termination by the Employee due to
      (i)
      death, (ii) disability, (iii) retirement after age 65, (iv) a requirement by
      the
      Company or a Company subsidiary, without the Employee's
      written consent, that the Employee perform his services at a location that
      is
      not within a 35 mile radius of downtown Chicago, Illinois, other than reasonable
      travel requirements, (v) a reduction in the Employee's
      base annual salary without his written consent, unless such reduction occurs
      at
      least 6 months prior to a Change in Control and is applied on a uniform and
      equitable basis to all members of senior management, or (vi) a material
      reduction in the Employee's
      contractual incentive or bonus compensation or benefits, if any, without his
      written consent.

     

     

    
      
        
        

      

      
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    2.           Adjusted
      Gross Up Payment and Additional Gross Up Payment.  In the event
      that any Payments would be subject to excise tax under Section 4999 of the
      Code
      (such excise tax and any penalties and interest collectively, the “Penalty
      Tax”), the Company shall pay to the Employee in cash an additional amount equal
      to the Adjusted Gross Up Payment.  The “Adjusted Gross Up Payment”
shall be an amount such that after payment by the Employee of all federal,
      state, local, employment and medicare taxes thereon (and any penalties and
      interest with respect thereto), the Employee retains on an after tax basis
      a
      portion of such amount equal to the aggregate of 100% of the Penalty Tax imposed
      upon the Payment and 100% of the Penalty Tax imposed upon the Adjusted Gross
      Up
      Payment.  For purposes of determining the amount of the Adjusted Gross
      Up Payment, the value of any non-cash benefits and deferred payments or benefits
      subject to the Penalty Tax shall be determined by the Company's independent
      auditors in accordance with the principles of Section 280G(d)(3) and (4) of
      the
      Code.  The Adjusted Gross Up Payment less required tax withholding
      shall be paid by the Company to the Employee on the earlier of (i) the date
      the
      Company and/or any of its subsidiaries is required to withhold tax with respect
      to any Payment or (ii) the date any Penalty Tax is required to be paid by the
      Employee.  In the event that, after the Adjusted Gross Up Payment is
      made, the Employee becomes entitled to receive a refund of any portion of the
      Penalty Tax, the Employee shall promptly pay to the Company 100% of such Penalty
      Tax refund attributable to the Payment (together with 100% of any interest
      paid
      or credited thereon by the Internal Revenue Service) and 100% of the Penalty
      Tax
      refund attributable to the Adjusted Gross Up Payment (together with 100% of
      any
      interest paid or credited thereon by the Internal Revenue
      Service).  As a result of the uncertainty regarding the application of
      Section 4999 of the Code, it is possible that the Internal Revenue Service
      may
      assert that the Penalty Tax due is in excess of the amount of the anticipated
      Penalty Tax used in calculating the Adjusted Gross Up Payment (such excess
      amount is hereafter referred to as the “Underpayment”).  In such
      event, the Company shall pay to the Employee, in immediately available funds,
      at
      the time the Underpayment is assessed or otherwise determined, an additional
      amount equal to the Additional Gross Up Payment.  The “Additional
      Gross Up Payment” shall be an amount such that after payment by the Employee of
      all federal, state, local, employment and Medicare taxes thereon (and any
      penalties and interest with respect thereto), the Employee retains on an after
      tax basis a portion of such amount equal to the aggregate of (i) 100% of the
      portion of the Underpayment attributable to the Payment, (ii) 100% of the
      portion of the Underpayment attributable to the Adjusted Gross Up Payment and
      (iii) 100% of the Penalty Tax imposed on the Additional Gross Up
      Payment.  Notwithstanding the foregoing, in the event the Employee
      experiences a Termination for Cause or a Voluntary Termination, then in that
      event, (a) if such termination occurs prior to the payment to the Employee
      of
      any Adjusted Gross Up Payment, then the Employee shall not be entitled to
      receive any Adjusted Gross Up Payment or Additional Gross Up Payment or (b)
      if
      such termination occurs after an Adjusted Gross Up Payment has been made to
      the
      Employee, then the Employee shall remit to the Company within five days after
      such termination the full amount of the Adjusted Gross Up Payment and Additional
      Gross Up Payments theretofor paid to the Employee and the Employee shall not
      be
      entitled to receive any other payments pursuant to this Section
      2.  However, if it is later determined that the Employee's
      Termination for Cause was improper, then the Employee shall be entitled to
      receive the Adjusted Gross Up Payment and Additional Gross Up Payment, together
      with any actual consequential and incidental damages arising from the delay
      in
      his receipt of such payments.

    


    3.           Repeal
      and Relacement of Contrary Provisions.  In the event the Company
      and/or its subsidiaries, on the one hand, and the Employee, on the other hand,
      are parties to any agreement or arrangement, including without limitation,
      any
      employment agreement, change in control agreement, severance agreement or
      arrangement, stock option agreement, restricted stock agreement, that provides
      for (a) a reduction of payments or benefits to the Employee so that the payments
      or benefits do not become nondeductible pursuant to or by reason of Section
      280G
      of the Code or (b) a limitation on the circumstances under which a tax gross
      up
      payment is to be paid, or the amount of a gross up payment to be paid, to the
      Employee, (the “Contrary Provisions”), such Contrary Provisions are hereby
      repealed and terminated and superceded and replaced by the provisions of Section
      2 of this Agreement, to the extent applicable, entitling the Employee to full
      and complete tax gross up protection for Penalty Taxes.

    


    4.           Final
      Agreement and Binding Effect.  This Agreement represents the final
      agreement between the parties relating to the subject matter hereof, and may
      only be modified or amended by subsequent writing that is executed by the
      parties.  This Agreement shall be binding upon and inure to the
      benefit of the Company, its successors and assigns and the Employee and his
      or
      her estate, heirs and beneficiaries.

    


    5.           Governing
      Law.  This Agreement shall be governed by the laws of the State of
      Illinois.

    


    6.           Counterparts.  This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original.


    
      
        
        

      

      
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    This
      Agreement has been executed by the parties hereto as of the date first above
      written.

     

     

     

                                            MB
      FINANCIAL,
      INC.

     

                                            By:
      /s/ Jill E.
      York

     

     

                                            EMPLOYEE

     

                                            /s/
      Larry
      Kallembach

                                            Larry
      Kallembach