Document:

Exhibit 10.2 - Side Letter #1 (W0200599).DOC

UST Seq. No. 740

Exhibit 10.2

UNITED STATES DEPARTMENT OF THE TREASURY

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220

February 20, 2009

Ladies and Gentlemen:

Reference is made to that certain Letter Agreement incorporating the Securities Purchase Agreement -- Standard Terms dated of as of the date of this letter agreement (the “Securities Purchase Agreement”) between United States Department of Treasury (“Investor”) and the company named on the signature page hereto (the “Company”).  Investor and the Company desire to amend the Securities Purchase Agreement as follows:

1.

Section 2.1(a) of the Securities Purchase Agreement is amended to read in its entirety as follows:

“(a)

[Intentionally Omitted.]”

2.

Section 2.1(c) of the Securities Purchase Agreement is amended to read in its entirety as follows:

“(c)

“Previously Disclosed” means information set forth or incorporated in the Company’s Annual Report on Form 10-K for the most recently completed fiscal year of the Company filed with the Primary Federal Securities Regulator prior to the execution and delivery of this Agreement (the “Last Fiscal Year”) or in its other reports and forms filed with or furnished to the Primary Federal Securities Regulator as contemplated under Sections 13(a), 14(a) or 15(d) of the Exchange Act on or after the last day of the Last Fiscal Year and prior to the execution and delivery of this Agreement. “Primary Federal Securities Regulator” means the SEC or the primary federal bank regulator with which the Company files its reports, registration statements, proxy statements and other filings under the Exchange Act.  If the Company is required to make filings with a Primary Federal Securities Regulator other than the SEC, all references in this Agreement to the SEC shall be deemed to refer to the Company’s Primary Federal Securities Regulator.”

3.

The definition of “Registrable Securities” in Section 4.5(1)(iv) of the Securities Purchase Agreement is amended by adding the following sentence at the end thereof:

“Notwithstanding anything in this Section 4.5(1)(iv) to the contrary, Registrable Securities shall not include any securities of the Company that are referred to in Section 3(a) of the Securities Act; provided, however, that in the event that the Company’s Primary Federal Securities Regulator is not the SEC, the Company shall take such actions (if any) as are provided for under such Primary Federal Securities Regulator’s rules in order to permit the resale of Registrable Securities by the Holders in accordance with such rules.”

From and after the date hereof, each reference in the Securities Purchase Agreement to “this Agreement” or words of like import shall mean and be a reference to the Agreement (as defined in the Securities Purchase Agreement) as amended by this letter agreement and each reference in the Securities Purchase Agreement to “this Securities Purchase Agreement” or words of like import shall mean and be a reference to the Securities Purchase Agreement as amended by this letter agreement.

This letter agreement will be governed by and construed in accordance with the federal law of the United States if and to the extent such law is applicable, and otherwise in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.

This letter agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this letter agreement may be delivered by facsimile and such facsimiles will be deemed sufficient as if actual signature pages had been delivered.

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In witness whereof, the parties have duly executed this letter agreement as of the date first written above.

UNITED STATES DEPARTMENT OF THE TREASURY

By:

NEEL KASHKARI

Name:  Neel Kashkari

Title:  Interim Assistant Secretary

For Financial Stability

MID-WISCONSIN FINANCIAL SERVICES, INC.

By:

JAMES F. WARSAW

Name:  James F. Warsaw

Title:  President & CEOExhibit 10.3 - Side Letter #2 (W0200603).DOC

Exhibit 10.3

UNITED STATES DEPARTMENT OF THE TREASURY

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220

February 20, 2009

Ladies and Gentlemen:

Reference is made to that certain Letter Agreement incorporating the Securities Purchase Agreement – Standard Terms dated of as of the date of this letter agreement (the “Securities Purchase Agreement”) between United States Department of Treasury (“Investor”) and the company named on the signature page hereto (the “Company”).  Capitalized terms used but not defined herein shall have the meanings assigned to them in the Securities Purchase Agreement.

The American Recovery and Reinvestment Act of 2009, as it may be amended from time to time (the “Act”), includes provisions relating to executive compensation and other matters that may be inconsistent with the Securities Purchase Agreement, the Warrant and the Certificates of Designation (the “Transaction Documents”).  Accordingly, Investor and the Company desire to confirm their understanding as follows: 

1.

Notwithstanding anything in the Transaction Documents to the contrary, in the event that the Act or any rules or regulations promulgated thereunder are inconsistent with any of the terms of the Transaction Documents, the Act and such rules and regulations shall control.

2.

For the avoidance of doubt (and without limiting the generality of Paragraph 1):

(a)

the provisions of Section 111 of the Emergency Economic Stabilization Act of 2008, as amended by the Act or otherwise from time to time (“EESA”), shall apply to the Company;

(b)

the waiver to be delivered by each of the Company’s Senior Executive Officers pursuant to Section 1.2(d)(v) of the Securities Purchase Agreement shall, in addition, be delivered by any additional highly compensated employees required by the Act or any rules or regulations thereunder;

(c)

the Company’s chief executive officer and chief financial officer shall provide the written certification of compliance by the Company with the requirements of Section 111 of EESA, as amended by the Act, in the manner specified by Section 111(b)(4) thereunder or in any rules or regulations under EESA; and

(d)

the Company shall be permitted to repay preferred shares, and when such preferred shares are repaid, the Investor shall liquidate warrants associated with such preferred shares, all in accordance with the Act and any rules and regulations thereunder.

From and after the date hereof, each reference in the Securities Purchase Agreement to “this Agreement” or “this Securities Purchase Agreement” or words of like import shall mean and be a reference to the Agreement (as defined in the Securities Purchase Agreement) as amended by this letter agreement.

This letter agreement will be governed by and construed in accordance with the federal law of the United States if and to the extent such law is applicable, and otherwise in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.

This letter agreement, the Securities Purchase Agreement, the Warrant, the Certificates of Designation and any other documents executed by the parties at the Closing constitute the entire agreement of the parties with respect to the subject matter hereof.

Nothing in this letter agreement shall be deemed an admission by Investor as to the necessity of obtaining the consent of the Company in order to effect the changes to the Transaction Documents contemplated by this letter agreement, nor shall anything in this letter agreement be deemed to require Investor to obtain the consent of any other TARP recipient (as defined in the Act) participating in the Capital Purchase Program (the “CPP”) in order to effect changes to their documentation under the CPP.

This letter agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this letter agreement may be delivered by facsimile and such facsimiles will be deemed sufficient as if actual signature pages had been delivered. 

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In witness whereof, the parties have duly executed this letter agreement as of the date first written above.

UNITED STATES DEPARTMENT OF

   THE TREASURY

By:  NEEL KASHKARI

      Name:  Neel Kashkari

      Title:  Interim Assistant Secretary

For Financial Stability

COMPANY:  MID-WISCONSIN 

FINANCIAL SERVICES, INC.

By:  JAMES F. WARSAW

      Name:  James F. Warsaw

      Title:  President

  

  

-3-Exhibit 10.4 - Form of Ltr Agreement for SEOs (W0200608).DOC

Exhibit 10.4

MID-WISCONSIN FINANCIAL SERVICES, INC.

132 W. STATE STREET

P.O. BOX 90

MEDFORD, WI  54451

____________________

____________________

____________________

Dear ________________:

Mid-Wisconsin Financial Services, Inc. (the “Company”) anticipates entering into a Securities Purchase Agreement (the “Participation Agreement”), with the United States Department of Treasury (“Treasury”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase Program (the “CPP”).  If the Company does not participate or ceases at any time to participate in the CPP, this letter shall be of no further force and effect. 

For the Company to participate in the CPP and as a condition to the closing of the investment contemplated by the Participation Agreement, the Company is required to establish specified standards for incentive compensation to its senior executive officers and to make changes to its compensation arrangements.  To comply with these requirements, and in consideration of the benefits that you will receive as a result of the Company’s participation in the CPP, you agree as follows:

1.

No Golden Parachute Payments.  The Company is prohibiting any golden parachute payment to you during any “CPP Covered Period.”  A “CPP Covered Period” is any period during which (A) you are a senior executive officer and (B) Treasury holds an equity or debt position acquired from the Company in the CPP.

2.

Recovery of Bonus and Incentive Compensation.  Any bonus and incentive compensation paid to you during a CPP Covered Period is subject to recovery or “clawback” by the Company if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria.  Bonus and incentive compensation is considered “paid to you” during a CPP Covered Period if you obtain a legally binding right to the payment during the CPP Covered Period, even if such compensation is not actually paid to your during the CPP Covered Period.

-1-

3.

Compensation Program Amendments.  Each of the Company’s compensation, bonus, incentive and other benefit plans, arrangements and agreements (including golden parachute, severance and employment agreements) (collectively, “Benefit Plans”) with respect to you is hereby amended to the extent necessary to give effect to provisions (1) and (2).  For reference, certain affected Benefit Plans are set forth in Appendix A to this letter.

In addition, the Company is required to review its Benefit Plans to ensure that they do not encourage senior executive officers to take unnecessary and excessive risks that threaten the value of the Company.  To the extent any such review requires revisions to any Benefit Plan with respect to you, you and the Company agree to negotiate such changes promptly and in good faith.

4.

Definitions and Interpretation.  This letter shall be interpreted as follows:

“Senior executive officer” means the Company’s “senior executive officers” as defined in Section 111(b)(3) of EESA. 

“Golden parachute payment” is used with same meaning as in Section 111(b)(2)(C) of EESA. 

 

“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented by guidance or regulation issued by the Department of the Treasury and as published in the Federal Register on October 20, 2008 and January 16, 2009. 

 

The term “Company” includes any entities treated as a single employer with the Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date).  You are also delivering a waiver pursuant to the Participation Agreement, and, as between the Company and you, the term “employer” in that waiver will be deemed to mean the Company as used in this letter.

Provisions (1) and (2) of this letter are intended to, and will be interpreted, administered and construed to, comply with Section 111 of EESA (and, to the maximum extent consistent with the preceding, to permit operation of the Benefit Plans in accordance with their terms before giving effect to this letter).

5.

Miscellaneous.  To the extent not subject to federal law, this letter will be governed by and construed in accordance with the laws of the State of Wisconsin.  This letter may be executed in two or more counterparts, each of which will be deemed to be an original.  A signature transmitted by facsimile will be deemed an original signature.

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The Board appreciates the concessions you are making and looks forward to your continued leadership during these financially turbulent times.

MID-WISCONSIN FINANCIAL SERVICES, INC.

By: __________________________________

Kim A. Gowey

As its Chairman of the Board

By signing below, you are evidencing your intent to be legally bound to the foregoing terms on the date set forth below.

____________________________________

Name of Employee

Date:  _______________________________

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