EX-10.3






Exhibit 10.3




OMNIBUS AMENDMENT AGREEMENT




     This Omnibus Amendment Agreement, dated as of January  , 2009 (the “Agreement”), is
entered into by and between (the “Executive”) and Princeton National Bancorp,
Inc. (the “Company”).



     WHEREAS, the Executive is, or may in the future be, a Senior Executive Officer of the Company,
as defined in subsection 111(b)(3) of the Emergency Economic Stabilization Act of 2008 (the “EESA”)
and regulations issued thereunder, including the rules set forth in 31 C.F.R. Part 30 (a “Senior
Executive Officer”); and



     WHEREAS, in connection with the purchase by the United States Department of the Treasury (the
“Treasury”) of certain preferred shares and warrants of the Company (the “Purchased Securities”),
pursuant to a Letter Agreement and a Securities Purchase Agreement, between the Treasury and the
Company (the “Purchase Agreement”), the Company is required to meet certain executive compensation
and corporate governance standards under Section 111(b) of the EESA, as implemented by guidance or
regulation thereunder that has been issued and is in effect as of the Closing Date (as defined in
the Purchase Agreement) (such guidance or regulation being hereinafter referred to as the “CPP
Guidance”); and



     WHEREAS, as a condition to the Closing (as defined in Section 1.2(a) of the Securities
Purchase Agreement), Section 1.2(d)(iv)(A) thereof provides that the Company is required to have
effected such changes to its compensation, bonus, incentive and other benefit plans, arrangements
and agreements (including golden parachute, severance and employment agreements) (collectively, the
“Compensation and Benefit Arrangements”) with respect to its Senior Executive Officers (and to the
extent necessary for such changes to be legally enforceable, each of its Senior Executive Officers
shall have duly consented in writing to such changes), as may be necessary, during the period that
Treasury owns any Purchased Securities, in order to comply with Section 111(b) of the EESA as
implemented by guidance or regulation thereunder that has been issued and is in effect as of the
Closing Date; and



     WHEREAS, in consideration for the benefits the Executive will receive as a result of the
participation of the Company in the Treasury’s TARP Capital Purchase Program, the Executive desires
to modify the Executive’s Compensation and Benefit Arrangements to the extent necessary to comply
with Section 111(b) of the EESA, the CPP Guidance and the Purchase Agreement.



     NOW, THEREFORE, in consideration of the foregoing and the covenants set forth herein, the
Executive and the Company hereby agree as follows:




	 	1.	 	Amendments to the Compensation and Benefit Arrangements. Effective as of the date
hereof (to the extent the Executive is a Senior Executive Officer for the 2009 calendar
year) or effective as of any calendar year commencing on or after January 1, 2009, if any,
as to which the Executive shall in the future be a Senior




 









 






	 	 	 	Executive Officer and any Purchased Securities are owned by the Treasury, the Executive’s
Compensation and Benefit Arrangements are hereby amended by this Agreement during such and
any subsequent periods as necessary to comply with the executive compensation and corporate
governance requirements of Section 111(b) of the EESA and the CPP Guidance, and the
provisions of Sections 1.2(d)(iv), 1.2(d)(v) or 4.10 of the Purchase Agreement, including
as follows:






	 	a.	 	In the event that any payment or benefit to which the Executive is or
may become entitled under the Compensation and Benefit Arrangements is a “golden
parachute payment” for purposes of Section 111(b) of the EESA and the CPP
Guidance, including the rules set forth in § 30.9 Q-9 of 31 C.F.R. Part 30, (i)
the Company shall not make or provide (nor shall the Company be obligated to make
or provide), during the period that the Treasury owns any Purchased Securities,
such payment or benefit to the Executive, and (ii) the Executive shall not be
entitled to receive, during the period that the Treasury owns the Purchased
Securities, such payment or benefit.
	 
	 	b.	 	Any bonus or incentive compensation paid to the Executive during the
period that the Treasury owns the Purchased Securities will be subject to recovery
or “clawback” by the Company or its affiliates if the payments were based on
materially inaccurate financial statements or any other materially inaccurate
performance metric criteria, all within the meaning of Section 111(b) of the EESA
and the CPP Guidance.
	 
	 	c.	 	In the event that the Executive and Compensation Committee of the
Board of Directors of the Company determines that any incentive compensation
arrangement pursuant to which the Executive is or may be entitled to a payment
encourages the Executive to take unnecessary and excessive risks that threaten the
value of the financial institution within the meaning of §30.9 Q-4 of 31 C.F.R.
Part 30, the Committee, on behalf of the Company, shall take such action as is
necessary to amend such incentive compensation arrangements to eliminate such
encouragement, and the Executive’s incentive compensation will be determined
pursuant to such amended arrangements.






	 	2.	 	Miscellaneous.






	 	a.	 	The Executive’s execution of this Agreement shall not be
determinative of the Executive’s status as a Senior Executive Officer.
	 
	 	b.	 	This Agreement shall be void and without effect ab initio if the
Closing (as defined in the Purchase Agreement) of the transactions contemplated by
the Purchase Agreement does not occur.




 









 












	 	c.	 	This Agreement may be executed in one or more counterparts, each of
which when executed shall be an original, but all of which when taken together
shall constitute one and the same agreement.
	 
	 	d.	 	This Agreement shall be governed by, and interpreted in accordance
with, the laws of the State of Illinois.





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     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized
representative and the Executive has hereunto set his hand as of the day and year first above
written.



	 	 	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	PRINCETON NATIONAL BANCORP,
INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Tony J. Sorcic

Title: President and CEO