Exhibit 10.7


 


 


1997
OMNIBUS INCENTIVE PLAN


 


MB
Financial, Inc.


 


As
modified through February 24, 2004


 

















 


MB FINANCIAL, INC.


 


1997 OMNIBUS INCENTIVE PLAN


 


TABLE OF CONTENTS


 


	
   

  	
  Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  1.  ESTABLISHMENT, PURPOSE AND DURATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Establishment of the Plan

  	
   

  
	
   

  	
  1.2

  	
  Purpose of the Plan

  	
   

  
	
   

  	
  1.3

  	
  Duration of the Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  2.  DEFINITIONS AND CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Definitions

  	
   

  
	
   

  	
  2.2

  	
  Gender and Number

  	
   

  
	
   

  	
  2.3

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  3.  ADMINISTRATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  The
  Committee

  	
   

  
	
   

  	
  3.2

  	
  Authority of the Committee

  	
   

  
	
   

  	
  3.3

  	
  Decisions Binding

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  4.  SHARES SUBJECT TO THE PLAN; AWARDS TO DIRECTORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Number of Shares

  	
   

  
	
   

  	
  4.2

  	
  Maximum
  Awards

  	
   

  
	
   

  	
  4.3

  	
  Awards to Directors

  	
   

  
	
   

  	
  4.4

  	
  Lapsed
  Awards

  	
   

  
	
   

  	
  4.5

  	
  Adjustments in Authorized Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  5.  ELIGIBILITY AND PARTICIPATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Eligibility

  	
   

  
	
   

  	
  5.2

  	
  Actual Participation

  	
   

  



 


i

















 


	
  ARTICLE  6.  STOCK OPTIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Grant of Options

  	
   

  
	
   

  	
  6.2

  	
  Option Agreement

  	
   

  
	
   

  	
  6.3

  	
  Exercise
  Price

  	
   

  
	
   

  	
  6.4

  	
  Duration of Options

  	
   

  
	
   

  	
  6.5

  	
  Exercise of Options

  	
   

  
	
   

  	
  6.6

  	
  Payment

  	
   

  
	
   

  	
  6.7

  	
  Restrictions on Share Transferability

  	
   

  
	
   

  	
  6.8

  	
  Termination of Employment or Service Due to
  Death, Disability or Retirement

  	
   

  
	
   

  	
  6.9

  	
  Termination of Employment for Other Reasons

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  7.  STOCK APPRECIATION RIGHTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Grant
  of SARs

  	
   

  
	
   

  	
  7.2

  	
  Exercise of SARs

  	
   

  
	
   

  	
  7.3

  	
  SAR
  Agreement

  	
   

  
	
   

  	
  7.4

  	
  Term
  of SARs

  	
   

  
	
   

  	
  7.5

  	
  Payment of SAR Amount

  	
   

  
	
   

  	
  7.6

  	
  Termination of Employment or Service Due to Death, Disability or
  Retirement

  	
   

  
	
   

  	
  7.7

  	
  Termination
  of Employment for Other Reasons

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  8.  RESTRICTED STOCK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Grant of Restricted Stock

  	
   

  
	
   

  	
  8.2

  	
  Restricted Stock Agreement

  	
   

  
	
   

  	
  8.3

  	
  Other Restrictions

  	
   

  
	
   

  	
  8.4

  	
  Certificate Legend

  	
   

  
	
   

  	
  8.5

  	
  Removal of Restrictions

  	
   

  
	
   

  	
  8.6

  	
  Voting
  Rights

  	
   

  
	
   

  	
  8.7

  	
  Dividends and Other Distributions

  	
   

  
	
   

  	
  8.8

  	
  Termination
  of Employment or Service Due to Death, Disability or Retirement

  	
   

  
	
   

  	
  8.9

  	
  Termination
  of Employment or Service for Other Reasons

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  9.  TRANSFERABILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  10.  BENEFICIARY DESIGNATION

  	
   

  



 


ii

















 


	
  ARTICLE  11.  RIGHTS OF EMPLOYEES AND DIRECTORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Employment or Service

  	
   

  
	
   

  	
  11.2

  	
  Participation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  12.  CHANGE IN CONTROL

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  In
  General

  	
   

  
	
   

  	
  12.2

  	
  Definition

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  13.  AMENDMENT, MODIFICATION AND TERMINATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Amendment, Modification and Termination

  	
   

  
	
   

  	
  13.2

  	
  Awards Previously Granted

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  14.  WITHHOLDING

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  Tax Withholding

  	
   

  
	
   

  	
  14.2

  	
  Share Withholding

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  15.  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  16.  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE  17.  REQUIREMENTS OF LAW

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  Requirements of Law

  	
   

  
	
   

  	
  17.2

  	
  Governing Law

  	
   

  



 


iii

















 


MB FINANCIAL, INC.


 


1997 OMNIBUS INCENTIVE PLAN


 


ARTICLE 1.  ESTABLISHMENT, PURPOSE AND DURATION


 


1.1 Establishment of the Plan. The Company
hereby establishes an incentive compensation plan to be known as the “MB
Financial, Inc. 1997 Omnibus Incentive Plan” (the “Plan”), as set forth in this
document. The Plan permits the granting of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights and Restricted Stock.


 


Upon approval
by the Board of Directors of the Company, subject to ratification by an
affirmative vote of holders of a majority of Shares present and entitled to
vote at the 1997 Annual Meeting of the Company at which a quorum is present,
the Plan shall become effective as of January 1, 1997 (the “Effective Date”),
and shall remain in effect as provided in Section 1.3 herein.  The Plan was subsequently modified on
July 30, 1997, February 10, 1999, April 18, 2002, May 15, 2002,
January 22, 2003, November 19, 2003 and February 24, 2004.


 


1.2 Purpose of the Plan.  The purpose of the Plan is to promote the success, and enhance
the value, of the Company by linking the personal interests of Employees and
Directors with those of Company shareholders.


 


The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of Employees and Directors upon
whose judgment, interest, and special effort the successful conduct of its
operation largely is dependent.


 


1.3 Duration of the Plan.  Subject to approval by the Board of Directors
of the Company and ratification by the shareholders of the Company, the Plan
shall commence on the Effective Date, as described in Section 1.1 herein,
and shall remain in effect, subject to the right of the Board of Directors to
terminate the Plan at any time pursuant to Article 13 herein.  However, in no event may an Award be granted
under the Plan on or after the fifteenth anniversary of the Plan’s Effective
Date.


 


ARTICLE 2.  DEFINITIONS AND CONSTRUCTION


 


2.1 Definitions. 
Whenever used in the Plan, the following terms shall have the meanings
set forth below:


 


(a)                      “Award”
means, individually or collectively, a grant under the Plan of Options, Stock
Appreciation Rights or Restricted Stock.


 


(b)                     “Board”
or “Board or Directors” means the Board of Directors of the Company.


 


(c)                      “Board Compensation” has the
meaning set forth in Section 4.3 herein.


 


1

















 


(d)                     “Cause”
means Participant’s personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties or willful violation of any law, rule, regulation (other
than traffic violations or similar offenses) or final cease-and-desist
order.  For purposes of this subsection,
no act, or failure to act, on Participant’s part shall be considered “willful”
unless done, or omitted to be done, not in good faith and without reasonable
belief that the action or omission was in the best interest of the Company. In
determining incompetence, the acts or omissions shall be measured against
standards generally prevailing in the financial institutions industry.  A Participant may be terminated for Cause by
an executive officer of the Company, and a Participant who is an executive
officer of the Company may be terminated for Cause by the Board of Directors.


 


(e)                      “Change
in Control” of the Company has the meaning set forth in Section 12.2
herein.


 


(f)                        “Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any
successor code thereto, and the rules and regulations thereunder.


 


(g)                     “Committee”
means the Committee, as specified in Section 3.1 herein, appointed by the
Board to administer the Plan.


 


(h)                     “Company”
means (i) with respect to periods prior to November 6, 2001, MB Financial,
Inc., a Delaware corporation, and (ii) with respect to periods on and after
November 6, 2001, MB Financial, Inc., a Maryland corporation, or any
successor thereto.


 


(i)                         “Director”
means any individual who is a member of the Board of Directors or the board of
directors of a Subsidiary or an advisory director of the Company or a
Subsidiary who is not currently an Employee of the Company or a Subsidiary.


 


(j)                         “Disability”
means a permanent and total disability, within the meaning of Code
Section 22(e)(3), as determined by the Committee in good faith, upon
receipt of sufficient competent medical advice from one or more individuals,
selected by the Committee, who are qualified to give professional medical
advice.


 


(k)                      “Employee”
means a full-time, nonunion, salaried employee of the Company or any
Subsidiary.  Directors who are not
otherwise employed by the Company or any Subsidiary shall not be considered
Employees under the Plan.


 


(l)                         “Exercise
Price” means the price at which a Share may be purchased by a Participant
pursuant to an Option, as determined by the Committee.


 


2

















 


(m)                   “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time,
or any successor statute thereto, and the rules and regulations thereunder.


 


(n)                     “Fair
Market Value” means the closing market price per share of one Share on the
relevant date, according to a stock quotation source selected by the
Committee.  If the Shares did not trade
on the relevant date, then Fair Market Value is determined as of the most
recent date for which a quoted price is available, or as of the most recent
date for which quoted bid and asked prices are available, whichever is most
recent.  Should Fair Market Value be
determined at the time of the most recent quoted bid and asked prices, Fair
Market Value shall be equal to the bid price.


 


(o)                     Reserved.


 


(p)                     “Grant
Price” means the stock price above which a SAR entitles the recipient to any
increase in value, as determined by the Committee.


 


(q)                     “Incentive
Stock Option” or “ISO” means an option to purchase Shares, granted under
Article 6 herein, which is designated as an Incentive Stock Option and
meets the requirements of Section 422 of the Code.


 


(r)                        “Nonqualified
Stock Option” or “NQSO” means an option to purchase Shares, granted under
Section 4.3 herein or Article 6 herein, which is not an Incentive
Stock Option.


 


(s)                      “Option”
means an Incentive Stock Option or a Nonqualified Stock Option.


 


(t)                        “Participant”
means an Employee or Director who has outstanding an Award granted under the
Plan.


 


(u)                     “Period
of Restriction” means the period during which the transfer of Shares of
Restricted Stock is limited in some way (based on the passage of time, the
achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, at its discretion), and the Shares are subject to
a substantial risk of forfeiture, as provided in Article 8 herein.


 


(v)                     “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act.


 


(w)                   “Retirement”
means termination of a Participant’s employment with the Company and its
Subsidiaries after the Participant attains age 65.


 


(x)                       “Related”
means (i) in the case of a SAR or other right, a SAR or other right which is granted
in connection with, and to the extent exercisable, in whole or in part, in lieu
of, an Option or another right and (ii) in the case of an Option, an Option
with respect to which and to the extent a SAR or other right is exercisable, in
whole or in part, in lieu thereof.


 


3

















 


(y)                     “Restricted
Stock” means an Award granted pursuant to Section 4.3 herein or
Article 8 herein.


 


(z)                       “Shares”
means shares of the common stock of the Company.


 


(aa)                “Stock
Appreciation Right” or “SAR” means an Award, designated as an SAR, granted
pursuant to Article 7 herein.


 


(bb)              “Stock
Split” has the meaning set forth in Section 4.1 herein.


 


(cc)                “Subsidiary”
means any corporation in which the Company owns directly, or indirectly through
subsidiaries, at least 50% of the total combined voting power of all classes of
stock, or any other entity (including, but not limited to, partnerships and
joint ventures) in which the Company owns at least 50% of the combined equity
thereof.


 


2.2 Gender and Number.  Except where otherwise indicated by the context, any masculine
term used herein also shall include the feminine; the plural shall include the
singular and the singular shall include the plural.


 


2.3 Severability. 
In the event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.


 


ARTICLE 3.  ADMINISTRATION


 


3.1 The Committee. 
The Plan shall be administered by a Committee, consisting of two or more
members of the Board of Directors, each of whom (i) shall be an “outside
director,” as defined under Section 162(m) of the Code and (ii) shall be a
“Non-Employee Director,” as defined in Rule 16b-3 under the Exchange Act.  The members of the Committee shall be
appointed by the Board of Directors.


 


3.2 Authority of the Committee.  The Committee shall have full power except
as limited by law or by the charter or bylaws of the Company or by resolutions
adopted by the Board of Directors, and subject to the provisions herein, to
determine the size and types of Awards; to determine the terms and conditions
of such Awards in a manner consistent with the Plan; to construe and interpret
the Plan and any agreement or instrument entered into under the Plan; to
establish, amend, or waive rules and regulations for the Plan’s administration;
and (subject to the provisions of Article 13 herein) to amend the terms
and conditions of any outstanding Award to the extent such terms and conditions
are within the discretion of the Committee as provided in the Plan.  Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of
the Plan.  As permitted by law, the
Committee may delegate its authorities as identified hereunder.


 


3.3 Decisions Binding.  All determinations and decisions made by the Committee pursuant
to the provisions of the Plan and all related orders or resolutions of the
Board of


 


4

















 


Directors shall be final, conclusive, and
binding on all Persons, including the Company, its shareholders, employees,
Participants, and their respective successors.


 


ARTICLE 4.  SHARES SUBJECT TO THE PLAN; AWARDS TO
DIRECTORS


 


4.1 Number of Shares.  Subject to adjustment as provided in Section 4.5 herein, the
total number of Shares available for grant under the Plan may not exceed
3,750,000 (which reflects the adjustment for the three-for-two stock split in
the form of a 50% stock dividend paid on the Shares on December 21, 2003
(the “Stock Split”)).  These Shares may
be either authorized but unissued, or Shares that have been reacquired by the
Company.  Subject to Section 4.4
herein, the grant of an Option, Stock Appreciation Right or Restricted Stock
Award shall reduce the Shares available for grant under the Plan by the number
of Shares subject to such Award.


 


4.2 Maximum Awards. 
During any calendar year, no Participant may be granted Awards under the
Plan with respect to more than 112,500 Shares (which reflects the adjustment
for the Stock Split), subject to adjustment as provided in Section 4.5
herein. During the term of the Plan, Awards with respect to no more than
300,000 Shares (which reflects the adjustment for the Stock Split) may be in
the form of Restricted Stock, subject to adjustment as provided in
Section 4.5 herein.


 


4.3 Awards to Directors.  Directors of the Company are entitled to
take up to 100%, or such lesser percentage as may from time to time be
determined by the Committee, of their annual retainer and fees for attendance
at meetings of the Board of Directors and committees thereof (such annual
retainer and fees being referred to below as “Board Compensation”) in the form
of Nonqualified Stock Options and/or Shares of Restricted Stock.  These Options and Shares of Restricted Stock
will be granted at such times as shall be determined by the Committee.  The election for Options and/or Shares of
Restricted Stock shall be made in accordance with the procedures therefor
established by the Committee from time to time.  The Exercise Price of an Option granted to a Director of the
Company pursuant to this Section 4.3 shall not be less than 100% of the
Fair Market Value of a Share on the date of grant, and the number of Shares
purchasable under the Option will be equal to the amount of the Board
Compensation earned by the Director as to which an election for Options has
been made by the Director in accordance with the procedures established by the
Committee divided by the per share value of the Option using a Black-Scholes
model based on a five-year option, rounded to the nearest whole Share.  The number of Shares of Restricted Stock
granted to a Director of the Company pursuant to this Section 4.3 will be
equal to the amount of the Board Compensation earned by the Director as to
which an election for Shares of Restricted Stock has been made by the Director
in accordance with the procedures established by the Committee divided by the
Fair Market Value of a Share on the date of grant, rounded to the nearest whole
Share. An Option granted pursuant to this Section 4.3 will have a
five-year term and vest in full immediately upon grant, provided that no Shares
acquired upon exercise of the Option may be sold within six months following
the date of grant.  Shares of Restricted
Stock granted pursuant to this Section 4.3 will vest, based upon
continuing service, in full on the one-year anniversary of the date of grant
unless vested earlier pursuant to Section 8.8 or 8.9 herein.


 


5

















 


4.4 Lapsed Awards. 
If any Award granted under the Plan terminates, expires, or lapses for
any reason, any Shares subject to such Award again shall be available for the
grant of an Award under the Plan, with the exception of Restricted Stock Awards
upon which dividends have been paid to the Participants.


 


4.5 Adjustments in Authorized Shares.  In the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock dividend,
split-up, Share combination, or other change in the corporate structure of the
Company affecting the Shares, such adjustment shall be made in the number and
class of Shares which may be issued under the Plan, and in the number and class
of and/or price of Shares subject to outstanding Options, SARs and Restricted
Stock granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; and provided that the number of Shares subject to any
Award shall always be a whole number.


 


ARTICLE 5.  ELIGIBILITY 
AND  PARTICIPATION


 


5.1 Eligibility. 
Persons eligible to participate in the Plan include all Employees,
including Employees who are members of the Board or the board of directors of
any Subsidiary, and all Directors, including Directors of the Company and its
Subsidiaries.


 


5.2 Actual Participation.  Subject to the provisions of the Plan, the
Committee may, from time to time, select from all Employees and Directors,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award.  Subject to
Section 4.3 herein, no Employee or Director shall be entitled to be
granted an Award under the Plan.


 


ARTICLE 6.  STOCK 
OPTIONS


 


6.1 Grant of Options.  Subject to the terms and provisions of the Plan, Options may be
granted to Employees and Directors at any time and from time to time as shall
be determined by the Committee.  Subject
to Sections 4.1 and 4.2, the Committee shall have complete discretion in
determining the number of Shares subject to Options granted to each
Participant.  Options granted to
Directors shall consist only of NQSOs and not ISOs.


 


6.2 Option Agreement.  Each Option grant shall be evidenced by an Option agreement that
shall specify the Exercise Price, the duration of the Option, the number of
Shares to which the Option pertains, the percentage of the Option that becomes
exercisable on specified dates in the future, and such other provisions as the
Committee shall determine.  The Option
agreement also shall specify whether the Option is intended to be an ISO or a
NQSO.


 


6.3 Exercise Price. 
The Exercise Price for each grant of an Option shall be determined by
the Committee, provided that the Exercise Price shall not be less than 100% of
the Fair Market Value of a Share on the date the Option is granted.  In the event any holder of 10% or more of
the Shares receives a grant of ISOs, the Exercise Price shall be not less than
110% of the Fair Market Value of a Share on the date of grant.  Once an Option has been granted, the
Exercise Price with respect thereto may not be changed except for any
adjustments pursuant to Section 4.5 herein.


 


6

















 


6.4 Duration of Options.  Each Option granted shall expire at such
time as the Committee shall determine at the time of grant; provided, however,
that no Option shall be exercisable later than the fifteenth anniversary date
of its grant.


 


6.5 Exercise of Options.  Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant.


 


6.6 Payment. 
Options shall be exercised by the delivery of a written notice of
exercise to the Chief Financial Officer of the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by payment in full of the Exercise Price.


 


Upon exercise
of any Option, the Exercise Price shall be payable to the Company in full
either (a) in cash or its equivalent, or (b) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the aggregate Exercise Price, or (c) by a combination of (a) and (b).  In addition, the Company may establish a
cashless exercise program in accordance with applicable laws and regulations.


 


As soon as
practicable after receipt of a written notification of exercise and payment in
full of the Exercise Price, the Company shall deliver to the Participant, in
the Participant’s name, Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).


 


6.7 Restrictions on Share Transferability.  The Committee shall impose such restrictions
on any Shares acquired pursuant to the exercise of an Option under the Plan as
it may deem advisable, including, without limitation, restrictions under
applicable Federal securities laws, under the requirements of any stock
exchange or market upon which such Shares are then listed and/or traded, and
under any blue sky or state securities laws applicable to such Shares.


 


6.8 Termination of Employment or
Service Due to Death, Disability or Retirement.


 


(a)                      Termination
by Death.  In the event the
employment or service of a Participant is terminated by reason of death, any
outstanding Options granted to that Participant that are not exercisable as of
the date of termination shall immediately become exercisable.  Unless otherwise set forth in the Option
agreement provided for in Section 6.2 herein, all Options granted to such
Participant shall remain exercisable until their respective expiration dates,
or for one year after the date of death, whichever period is shorter, by such
Person or Persons as shall have acquired the Participant’s rights under the
Option by will or by the laws of descent and distribution.


 


(b)                     Termination
by Disability.  In the event the
employment or service of a Participant is terminated by reason of Disability,
any outstanding Options granted to that Participant that are not exercisable as
of the date of termination shall immediately become exercisable. Unless
otherwise set forth in the Option agreement provided for in Section 6.2
herein, all Options granted to such Participant shall remain exercisable until
their respective expiration dates, or for one year after the date that the
Participant’s employment or


 


7

















 


service is terminated by reason of
Disability, whichever period is shorter. Unless otherwise set forth in the
Option agreement provided for in Section 6.2 herein, should the
Participant die during this period, exercisability of the Participant’s Options
shall be permitted for a period of one year following the date of death.


 


(c)                      Termination
by Retirement.  In the event the
employment of an Employee is terminated by reason of Retirement, or the service
of a Director is terminated after age 65, any outstanding Options granted to
that Employee or Director that are not exercisable as of the date of
termination shall immediately become exercisable.  Unless otherwise set forth in the Option agreement provided for
in Section 6.2 herein, all Options granted to such Participant shall
remain exercisable until their respective expiration dates, or for one year
after the date of termination, whichever period is shorter.


 


(d)                     Exercise Limitations on ISOs.  In
the case of ISOs, the tax treatment prescribed under Section 422 of the
Code may not be available if the Options are not exercised within the time
periods provided by Section 422 for each of the various types of
employment termination.


 


6.9 Termination of Employment for Other
Reasons.  If the employment of
an Employee or the service of a Director shall terminate for any reason other
than the reasons set forth in Section 6.8 herein, except for Cause, all
outstanding Options that are not exercisable as of the date of termination
immediately shall expire and terminate (and shall once again become available
for grant under the Plan). However, the Committee, in its sole discretion,
shall have the right to waive such termination and to immediately make
exercisable all or any portion of such Options.  Thereafter, unless otherwise set forth in the Option agreement
provided for in Section 6.2 herein, all such exercisable Options shall
remain exercisable until their respective expiration dates, or for one year
after the date of termination, whichever period is shorter.


 


If the
employment or service of a Participant shall terminate for Cause, all
outstanding Options immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the exercisability
status of the Options.


 


ARTICLE 7.  STOCK 
APPRECIATION  RIGHTS


 


7.1 Grant of SARs. 
Subject to the terms and conditions of the Plan, SARs may be granted to
Employees and Directors at any time and from time to time as shall be
determined by the Committee.  A SAR may
be Related to an Option or may be granted independently of any Option as the
Committee shall from time to time in each case determine.  In the case of a Related Option, such
Related Option shall cease to be exercisable to the extent of the Shares with
respect to which the Related SAR was exercised.  Upon the exercise or termination of a Related Option, any Related
SAR shall terminate to the extent of the Shares with respect to which the
Related Option was exercised or terminated.


 


8

















 


The Committee
shall have complete discretion in determining the number of SARs granted to
each Participant (subject to Sections 4.1 and 4.2 herein) and, consistent with
the provisions of the Plan, in determining the terms and conditions pertaining
to such SARs.  However, the Grant Price
of a SAR shall be at least equal to 100% of the Fair Market Value of a Share on
the date of grant of the SAR.


 


7.2 Exercise of SARs.  SARs may be exercised upon whatever terms and conditions the
Committee, in its sole discretion, imposes upon the SARs.


 


7.3 SAR Agreement. 
Each SAR grant shall be evidenced by a SAR agreement that shall specify
the Grant Price, the term of the SAR, and such other provisions as the
Committee shall determine.


 


7.4 Term of SARs. 
The term of a SAR granted under the Plan shall be determined by the
Committee, in its sole discretion; however, such term shall not exceed fifteen
years.


 


7.5 Payment of SAR Amount.  Upon exercise of a SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying:


 


(a)                      The
difference between the Fair Market Value of a Share on the date of exercise
over the Grant Price; and


 


(b)                     The
number of Shares with respect to which the SAR is exercised.


 


At the
discretion of the Committee, the payment upon exercise of a SAR may be in cash,
in Shares of equivalent value, or in some combination thereof.


 


7.6 Termination of Employment or Service
Due to Death, Disability or Retirement.


 


(a)                      Termination
by Death.  In the event the
employment or service of a Participant is terminated by reason of death, any
outstanding SARs granted to that Participant that are not exercisable as of the
date of termination shall immediately become exercisable.  Unless otherwise set forth in the SAR
agreement provided for in Section 7.3 herein, all SARs granted to such
Participant shall remain exercisable until their respective expiration dates,
or for one year after the date of death, whichever period is shorter, by such
Person or Persons as shall have acquired the Participant’s rights under the
SARs by will or by the laws of descent and distribution.


 


(b)                     Termination
by Disability.  In the event the
employment or service of a Participant is terminated by reason of Disability,
any outstanding SARs granted to that Participant that are not exercisable as of
the date of termination shall immediately become exercisable.  Unless otherwise set forth in the SAR
agreement provided for in Section 7.3 herein, all SARs granted to such
Participant shall remain exercisable until their respective expiration dates,
or for one year after the date the Participant’s employment or service is
terminated by reason of Disability, whichever period is shorter.  Unless otherwise set forth in the SAR
agreement provided for in Section 7.3 herein,


 


9

















 


in the event the Participant dies during this
period, exercisability shall be permitted for a period of one year following
the date of death.


 


(c)                      Termination
by Retirement. In the event the employment of an Employee is terminated by
reason of Retirement, or the service of a Director is terminated after age 65,
any outstanding SARs granted to that Participant that are not exercisable as of
the date of termination shall immediately become exercisable.  Unless otherwise set forth in the SAR
agreement provided for in Section 7.3 herein, all SARs granted to such
Participant shall remain exercisable until their respective expiration dates,
or for one year after the date that employment was terminated, whichever period
is shorter.


 


7.7 Termination
of Employment for Other Reasons.  If the employment of an Employee or the
service of a Director shall terminate for any reason other than the reasons
described in Section 7.6 herein, except for Cause, all unexercised SARs
held by the Participant at that time immediately shall expire and terminate
(and shall once again become available for grant under the Plan).  However, the Committee, in its sole
discretion, shall have the right to waive such termination and to make
exercisable all or any portion of such SARs. 
Thereafter, unless otherwise set forth in the SAR agreement provided for
in Section 7.3 herein, all such exercisable SARs shall remain exercisable
until their expiration dates, or for one year after the date of termination,
whichever period is shorter.


 


If the
employment or service of the Participant shall terminate for Cause, all
outstanding SARs immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the exercisability
status of the SARs.


 


ARTICLE 8.  RESTRICTED 
STOCK


 


8.1 Grant of Restricted Stock. Subject to
the limitations set forth in Section 4.2 herein and the other terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock to Employees and Directors in such amounts as
the Committee shall determine.  Unless
vested earlier pursuant to Section 8.8 or 8.9 herein, Shares of Restricted
Stock shall vest, based upon continuing employment or service, over a minimum
of three years, with the exception of: (i) Shares awarded based upon
performance, which shall vest, based also upon continuing employment or
service, over a minimum of one year; (ii) Shares granted to Directors of the
Company pursuant to Section 4.3 herein, which shall vest, based upon
continuing service, in full on the one-year anniversary of the date of grant;
and (iii) Shares granted to a person not previously an Employee or Director, or
following a bona fide period of non-employment, as an inducement material to
the individual’s entering into employment with the Company or any Subsidiary,
which shall not be subject to a minimum vesting period.


 


8.2 Restricted Stock Agreement.  Each Restricted Stock grant shall be
evidenced by a Restricted Stock agreement that shall specify the Period of
Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.


 


10

















 


8.3 Other Restrictions.  In addition to the restrictions set forth in Section 8.1
herein, the Committee may impose such restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, vesting based upon the achievement of specific performance goals
(Company-wide, Subsidiary, and/or individual), and/or restrictions under
applicable Federal or state securities laws; and may legend the certificate
representing Restricted Stock to give appropriate notice of such restrictions.  The Committee may also require that
Participants make cash payments at the time of grant or upon lapsing of
restrictions.  Such cash payments, if
imposed, will be in an amount not less than the par value of the Shares.


 


8.4 Certificate Legend.  In addition to any legends placed on certificates pursuant to
Section 8.3 herein, each certificate representing Shares of Restricted
Stock granted pursuant to the Plan shall bear the following legend:


 


“The sale or other transfer of the shares of
stock represented by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer as set forth
in the MB Financial, Inc. 1997 Omnibus Incentive Plan and in a Restricted Stock
agreement dated                      .  A copy of the Plan and such Restricted Stock
agreement may be obtained from the Chief Financial Officer of MB Financial,
Inc.”


 


8.5 Removal of Restrictions.  Except as otherwise provided in this
Section, Shares of Restricted Stock covered by each Restricted Stock grant made
under the Plan shall become freely transferable by the Participant after the
last day of the Period of Restriction. 
Once the Shares are released from the restrictions, the Participant
shall be entitled to have the legend required by Section 8.4 herein removed
from his or her Share certificate.


 


8.6 Voting Rights. 
During the Period of Restriction, Participants holding Shares of
Restricted Stock granted hereunder may exercise full voting rights with respect
to those Shares.


 


8.7 Dividends and Other Distributions.  During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares while they are so held.  If
any such dividends or distributions are paid in Shares, the Shares shall be
subject to the same restrictions on transferability and forfeitability as the
Shares of Restricted Stock with respect to which they were paid.


 


8.8 Termination
of Employment or Service Due to Death, Disability or
Retirement.  In the event that a
Participant’s employment or service is terminated by reason of death,
Disability or Retirement, the restrictions on the Participant’s Shares of
Restricted Stock shall lapse as of the date of termination.


 


8.9 Termination
of Employment or Service for Other Reasons.  If the employment or service of the
Participant shall terminate for any reason other than those reasons described
in Section 8.8 herein, including a termination for Cause, all nonvested
Shares of Restricted Stock held by the Participant at that time immediately
shall be forfeited and returned to the Company (and shall once again become
available for grant under the Plan, except that Shares upon which


 


11

















 


dividends have been paid to a Participant may
not become available for re-grant under the Plan); provided, however, that with
the exception of a termination of employment or service for Cause, the
Committee, in its sole discretion, shall have the right to provide for lapsing
of the restrictions on Restricted Stock following termination of employment or
service for any reason other than those described in Section 8.8 herein,
upon such terms and provisions as it deems proper.


 


ARTICLE 9.  TRANSFERABILITY


 


No Award
granted under the Plan shall be transferable otherwise than by will, the laws
of descent and distribution or pursuant to a qualified domestic relations
order, except that an Award may be transferred by gift to any member of the
Participant’s immediate family or to a trust for the benefit of one or more of
such immediate family members if the Committee so specifies in the Award
agreement.  During the lifetime of an
Award recipient, an Award shall be exercisable only by the Award recipient
unless it has been transferred as permitted hereby, in which case it shall be
exercisable only by such transferee. 
For the purpose of this Article 9 a Participant’s “immediate
family” shall mean the Participant’s spouse, children and grandchildren.


 


ARTICLE 10.  BENEFICIARY 
DESIGNATION


 


Each
Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by
the Company, and will be effective only when filed by the Participant in
writing with the Chief Financial Officer of the Company during the
Participant’s lifetime.  In the absence
of any such designation, benefits remaining unpaid at the Participant’s death
shall be paid to the Participant’s estate.


 


ARTICLE 11.  RIGHTS 
OF  EMPLOYEES  AND 
DIRECTORS


 


11.1               Employment or Service.  Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment or service at any time, nor confer upon any
Participant any right to continue in the employ or service of the Company or
any Subsidiary.


 


For purposes
of the Plan, transfer of employment or service of a Participant between the
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment or service.


 


11.2               Participation. 
Subject to Section 4.3 herein, no Employee or Director shall be
entitled to be selected to receive an Award under the Plan, or, having been so
selected, to be selected to receive a future Award.


 


12

















 


ARTICLE 12.  CHANGE 
IN  CONTROL


 


12.1               In General. 
Unless otherwise set forth in the applicable Award agreement, in the
event of a Change in Control of the Company as defined in Section 12.2
herein, all Awards granted under the Plan that are still outstanding and not
yet exercisable or vested shall become immediately exercisable or vested as of
the date of the Change in Control and shall remain exercisable and vested for
their term.


 


12.2               Definition. 
For purposes of the Plan, a Change in Control shall mean (i) any third
person, including a “group” as defined in Section 13(d)(3) of the Exchange
Act, shall become the beneficial owner of Shares of the Company with respect to
which 25% or more of the total number of votes for the election of the Board of
Directors of the Company may be cast, (ii) as a result of, or in connection
with, any cash tender offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing, the persons who
were directors of the Company shall cease to constitute a majority of the Board
of Directors of the Company, or (iii) the closing of a transaction in which the
Company will cease to be an independent publicly-owned corporation or for a
sale or other disposition of all or substantially all the assets of the
Company.


 


The Board has
final authority to determine the exact date on which a Change in Control has
been deemed to have occurred.


 


ARTICLE 13.  AMENDMENT, MODIFICATION AND TERMINATION


 


13.1               Amendment,
Modification and Termination.  The Board may, at any time and from time to
time, terminate, amend, or modify the Plan without the consent of shareholders
or Participants, except that any such action will be subject to the approval of
the Company’s shareholders if, when and to the extent such shareholder approval
is necessary or required for purposes of any applicable federal or state law or
regulation or the rules of any stock exchange or automated quotation system on
which the Shares may then be listed or quoted, or if the Board, in its
discretion, determines to seek such shareholder approval.  The Committee may not materially waive any
conditions of, or rights of the Company under, or modify or amend the terms of
any outstanding Award, nor may the Committee amend, alter, suspend, discontinue
or terminate any outstanding Award without the consent of the Participant or
holder thereof, except as otherwise herein provided.  The Committee may not reprice any Award that has been granted.


 


13.2               Awards Previously Granted.  No termination, amendment, or modification
of the Plan shall in any manner adversely affect any Award previously granted
under the Plan, without the written consent of the Participant.


 


ARTICLE 14.  WITHHOLDING


 


14.1               Tax Withholding.  The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant’s FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of the Plan.


 


13

















 


14.2               Share Withholding.  With respect to withholding required upon the exercise of
Options, upon the lapse of restrictions on Restricted Stock, or upon any other
taxable event hereunder, Employees may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value, on the date the
tax is to be determined, equal to the minimum marginal tax which could be
imposed on the transaction.


 


ARTICLE 15.  INDEMNIFICATION


 


Each Person
who is or shall have been a member of the Committee, or of the Board, shall be
indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit, or proceeding
to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan and against and
from any and all amounts paid by him or her in settlement thereof, with the
Company’s approval, or paid by him or her in satisfaction of any judgment in
any such action, suit, or proceeding against him or her, provided he or she
shall give the Company an opportunity, at its own expense, to handle and defend
the same before he or she undertakes to handle and defend it on his or her own
behalf.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such Persons may be entitled under the Company’s charter or bylaws, as
a matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.


 


ARTICLE 16.  SUCCESSORS


 


All
obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company.


 


ARTICLE 17.  REQUIREMENTS OF LAW


 


17.1               Requirements of Law.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.


 


17.2               Governing Law. 
To the extent not preempted by Federal law, (i) with respect to Awards
made prior to November 6, 2001, the Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
Delaware, and (ii) with respect to Awards made on or after November 6,
2001, the Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of Maryland.


 


14