Exhibit
10.4


 


OLD
SECOND BANCORP, INC.


 


2008
EQUITY INCENTIVE PLAN


 


NON-QUALIFIED
STOCK OPTION


 


The Participant specified below has been granted this Option by Old
Second Bancorp, Inc., a Delaware corporation (the “Company”) under the terms of the Old Second
Bancorp, Inc., Inc. 2008 Equity Incentive Plan (the “Plan”).  The Option shall be subject
to the following terms and conditions (the “Option
Terms”):


 


Section 1.                                          Terms of Award.  The following words and
phrases relating to the grant of the Option shall have the following meanings:


 


(a)                                  The
“Participant” is                                             .


 


(b)                                 The
“Grant Date” is                                            .


 


(c)                                  The
number of “Covered Shares” is                     
shares of Stock.


 


(d)                                 The
“Exercise Price” is $                        per
share.


 


Except where the context clearly implies to the contrary, any
capitalized term in this award shall have the meaning ascribed to that term
under the Plan.


 


Section 2.                                          Non-Qualified Stock Option.  The Option is not intended
to constitute an “incentive stock option” as that term is used in Code Section 422.


 


Section 3.                                          Vesting.  Subject to the limitations of the
Option Terms, each installment of Covered Shares of the Option (“Installment”) shall become vested and
exercisable on and after the “Vesting Date”
for such Installment as described in the following schedule (but only if a Termination
of Service has not occurred before the Vesting Date):


 


	
  INSTALLMENT

  	
   

  	
  VESTING DATE

  APPLICABLE TO INSTALLMENT

  
	
  1/3 of Covered Shares

  	
   

  	
  [date]

  
	
  1/3 of Covered Shares

  	
   

  	
  [date]

  
	
  1/3 of Covered Shares

  	
   

  	
  [date]

  



 


(a)                                  Notwithstanding
the foregoing provisions of this Section 3, the Option shall become
fully and immediately vested upon a Change in Control that occurs on or before
the Participant’s Termination of Service or upon a Participant’s Termination of
Service due to Retirement, Disability or death.


 

















 


(b)                                 The
Option, once vested, may be exercised in whole or in part (but not as to less
than 25 Covered Shares at any one time, unless fewer than 25 Covered Shares
then remain and the Option is being exercised as to all such remaining Covered
Shares).


 


(c)                                  The
Option may only be exercised on or after the Termination of Service only as to
that portion of the Covered Shares for which it was exercisable immediately
prior to the Termination of Service, or became exercisable on the Termination
of Service.


 


Section 4.                                          Expiration.  The Option shall not be exercisable after the Company’s
close of business on the last business day that occurs prior to the Expiration
Date.  The “Expiration Date” shall be the
earliest to occur of:


 


(a)                                  the
ten-year anniversary of the Grant Date;


 


(b)                                 the
one-year anniversary of the Termination of Service if the termination of
employment or service occurs due to death or Disability;


 


(c)                                  the
three-year anniversary of the Termination of Service if the termination of
employment or service occurs due to Retirement;


 


(d)                                 the
three-month anniversary of the Termination of Service if the termination of
employment or service occurs for reasons other than death, Disability or
Retirement; or


 


(e)                                  the
date on which the Participant engages in conduct which constitutes Cause.


 


Section 5.                                          Termination
Followed by Death.  In the event
that the Participant’s employment or service terminates by reason of Disability
or Retirement, and within the exercise period following such termination the
Employee dies, then the remaining exercise period under outstanding Options
shall equal the longer of: (i) one (1) year following death; or (ii) the
remaining portion of the exercise period which was triggered by the employment or
service termination; provided, however, that
the exercise period may not extend beyond the expiration date of the
Options.  Such Options shall be
exercisable by such person or persons who shall have been named as the Participant’s
beneficiary, or by such persons who have acquired the Participant’s rights
under the Option by will or by the laws of descent and distribution.


 


Section 6.                                          Method
of Option Exercise.


 


(a)                                  Method of Exercise. 
Subject to the Option Terms and the Plan, the Option may be exercised in
whole or in part by filing an exercise notice with the Vice President of Human
Resources of the Company at its corporate headquarters prior to the Company’s
close of business on the last business day that occurs prior to the Expiration
Date.  The notice requirement may only be satisfied by the method
prescribed by the Committee; provided, however,
the Committee shall retain the right to limit or expand the method of exercise
to any one or more methods with respect to any individual Participant or group
or class of Participants.  Such notice
shall specify the number of Covered Shares which the Participant elects to
purchase, 


 


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and shall be accompanied by payment of the Exercise
Price for such Covered Shares indicated by the Participant’s election.


 


(b)                                 Payment of Exercise Price. 
Payment may be by cash or, subject to limitations imposed by applicable
law, by such means as the Committee from time to time may permit, including, (i) by
tendering, either actually or by attestation, Stock acceptable to the
Committee, valued at Fair Market Value on the date of exercise (which may
include shares acquired hereunder); (ii) by irrevocably authorizing a
third party, acceptable to the Committee, to sell Stock (or a sufficient
portion of the shares) acquired upon exercise of the Option and to remit to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise Price;
(iii) by personal, certified or cashiers’ check; (iv) by other
property deemed acceptable by the Committee; or (v) any combination of the
above.  If payment is made pursuant to
clauses (i) or (ii) above, the Participant’s election must be made on
or prior to the date of exercise of the Option and must be irrevocable.  The Option shall not be exercisable if and to
the extent the Company determines that such exercise would violate applicable
state or federal securities laws or the rules and regulations of any
securities exchange on which the Stock is traded and shall not be exercisable
during any blackout period established by the Company from time to time.


 


Section 7.                                          Delivery
of Shares.  Delivery of Stock or
other amounts under this Award Agreement and the Plan shall be subject to the
following:


 


(a)                                  Compliance with Applicable Laws.  Notwithstanding any other provision of this
Award Agreement or the Plan, the Company shall have no obligation to deliver
any Stock or make any other distribution of benefits under this Award Agreement
or the Plan unless such delivery or distribution complies with all applicable
laws (including, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.


 


(b)                                 Certificates.  To the
extent that this Award Agreement and the Plan provide for the issuance of
Stock, the issuance may be effected on a non-certificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock
exchange.


 


Section 8.                                          Withholding.  The exercise of the Option is subject to withholding
of all applicable taxes.  At the election of the Participant, and subject
to such rules and limitations as may be established by the Committee from
time to time, such withholding obligations may be satisfied (i) through
cash payment by the Participant; (ii) through the surrender of shares of
Stock by (actual delivery or by attestation) which the Participant already owns
(provided, however, that to the
extent shares described in this clause (ii) are used to satisfy more than
the minimum statutory withholding obligation, as described below, then, except
as otherwise provided by the Committee, payments made with shares of Stock in
accordance with this clause (ii) shall be limited to shares held by the
Participant for not less than six (6) months prior to the payment date);
or (iii) through the surrender of shares of Stock to which the Participant
is otherwise entitled under the Plan; provided,
however, that such shares under this clause (iii) may be used
to satisfy not more than the Company’s minimum statutory withholding obligation
(based on minimum statutory withholding rates for Federal and state tax
purposes, including payroll taxes, that are applicable to such supplemental
taxable income).


 


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Section 9.                                          Transferability.  The Option is not
transferable by the Participant other than (i) by will or by the laws of
descent and distribution or (ii) pursuant to a qualified domestic
relations order, as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, and during the Participant’s life, may
be exercised only by the Participant.  Except as provided in the preceding
sentence, the Option may not be assigned, transferred (except as aforesaid),
pledged or hypothecated by the Participant in any way whether by operation of
law or otherwise, and shall not be subject to execution, attachment or similar
process.  Any attempt at assignment, transfer, pledge or hypothecation, or
other disposition of this Option contrary to the provisions hereof, and the
levy of any attachment or similar process upon this option, shall be null and
void and without effect.


 


Section 10.                                   Definitions.  For purposes of the Option Terms, words and phrases
shall be defined as follows:


 


(a)                                  “Cause” means in the case of a Participant
with a then-current written Compensation and Benefit Assurance Agreement (“Change in Control Agreement”), the
definition of Cause set forth in the Change in Control Agreement.  For all other Participants, Cause means the (i) willful
misconduct on the part of a Participant that is materially detrimental to the
Company; or (ii) the conviction of a Participant for the commission of a
felony or crime involving turpitude.  “Cause”
under either (i) or (ii) shall be determined in good faith by the
Company.


 


(b)                                 “Disability” shall mean that a Participant (i) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
twelve (12) months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than
three (3) months under an accident and health plan covering the Company’s
employees.


 


(c)                                  “Retirement” means Termination of Service, other than for
Cause, after either: (a) attainment of age sixty-five (65); or (b) attainment
of age fifty-five (55) and completion of ten (10) years of service with
the Company or a Subsidiary, as determined in the sole discretion of the
Committee.


 


Section 11.                                   Heirs and Successors.  The Option Terms shall be
binding upon, and inure to the benefit of, the Company and its successors and
assigns, and upon any person acquiring, whether by merger, consolidation,
purchase of assets or otherwise, all or substantially all of the Company’s
assets and business.  If any rights of
the Participant or benefits distributable to the Participant under this
Agreement have not been exercised or distributed, respectively, at the time of
the Participant’s death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be distributed to the Designated
Beneficiary, in accordance with the provisions of this Agreement and the
Plan.  The “Designated Beneficiary” shall be the beneficiary or
beneficiaries designated by the Participant in a writing filed with the
Committee in such form and at such time as the Committee shall require.  If a deceased Participant fails to designate
a beneficiary, or if the Designated Beneficiary does not survive the
Participant, any 


 


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rights that would have
been exercisable by the Participant and any benefits distributable to the
Participant shall be exercised by or distributed to the legal representative of
the estate of the Participant.  If a
deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant but dies before the Designated Beneficiary’s exercise
of all rights under this Agreement or before the complete distribution of
benefits to the Designated Beneficiary under this Agreement, then any rights
that would have been exercisable by the Designated Beneficiary shall be
exercised by the legal representative of the estate of the Designated Beneficiary,
and any benefits distributable to the Designated Beneficiary shall be
distributed to the legal representative of the estate of the Designated
Beneficiary.


 


Section 12.                                   Administration.  The authority to manage
and control the operation and administration of the Option Terms and the Plan shall
be vested in the Committee, and the Committee shall have all powers with
respect to the Option Terms as it has with respect to the Plan. Any
interpretation of the Option Terms or the Plan by the Committee and any decision
made by it with respect to the Option Terms or the Plan is final and binding on
all persons.


 


Section 13.                                   Plan Governs.  Notwithstanding
anything in the Option Terms to the contrary, the Option Terms shall be subject
to the terms of the Plan, a copy of which may be obtained by the Participant
from the office of the Secretary of the Company; and the Option Terms are
subject to all interpretations, amendments, rules and regulations
promulgated by the Committee from time to time pursuant to the Plan.


 


Section 14.                                   Interpretation.  The Option Terms are subject to all
interpretations, amendments, rules and regulations promulgated by the
Company from time to time.  Any
interpretation of the Option Terms by the Company and any decision made by it
with respect to the Option Terms are final and binding on all persons.  Notwithstanding anything in the Option Terms
to the contrary, in the event of any discrepancies between the corporate
records and the Option Terms, the corporate records shall control.


 


Section 15.                                   Not An Employment Contract.  The
Option will not confer on the Participant any right with respect to continuance
of employment or other service with the Company or any Related Corporation, nor
will it interfere in any way with any right the Company or any Related
Corporation would otherwise have to terminate or modify the terms of such
Participant’s employment or other service at any time.


 


Section 16.                                   No Rights As Shareholder.  The Participant shall not
have any rights of a shareholder with respect to the Shares subject to the
Option, until a stock certificate has been duly issued following exercise of
the Option as provided herein.


 


Section 17.                                   Amendment.  The Option Terms may be amended in accordance with the
provisions of the Plan, and may otherwise be amended by written agreement of
the Participant and the Company without the consent of any other person.


 


Section 18.                                   Section 409A
Amendment.  The Committee
reserves the right (including the right to delegate such right) to unilaterally
amend this Award Agreement without the consent of the Participant in order to
maintain an exclusion from the application of, or to maintain 


 


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compliance with, Code Section 409A.  Participant’s acceptance of this Option award
constitutes acknowledgement and consent to such rights of the Committee.


 


 


	
   

  	
  OLD
  SECOND BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 


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