Document:

Exhibit 10.2

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT
(this “Agreement”) is made and entered into as of this 17th day of March, 2003
(but effective January 1, 2003), by and between MB Financial, Inc. (the
“Corporation”) and Mitchell Feiger (the “Executive”).

 

WHEREAS, the
Executive is the President and Chief Executive Officer of the Corporation and
is a party to a written employment agreement with the Corporation dated
February 23, 1999 (the “1999 Employment Agreement”);

 

WHEREAS, the
parties believe it is in their respective best interests to enter into this
Agreement in replacement of the 1999 Employment Agreement; and

 

WHEREAS, the
Board of Directors of the Corporation (the “Board of Directors”) has approved
and authorized the execution of this Agreement with the Executive.

 

NOW THEREFORE,
in consideration of the foregoing and of the respective covenants and
agreements of the parties herein, it is AGREED as follows:

 

1.                                       Definitions.

 

(a)                                  The
term “Change in Control” means (1) an event of a nature that (i) results in a
change in control of the Corporation or MB Financial Bank, National Association
(the “Bank”), a wholly owned subsidiary of the Corporation, within the meaning
of the Bank Holding Company Act of 1956, as amended and 12 C.F.R. Part 225 (or
any successor statute or regulation) or (ii) requires the filing of a notice
under 12 U.S.C. §1817(j) (or any successor statute); (2) an event that would be
required to be reported in response to Item 1 of the current report on Form 8-K
as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”), other than an event at
the completion of which the stockholders of the Corporation immediately
preceding completion of the event hold more than 40% of the outstanding stock
of the resulting entity; (3) any person (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act) directly or indirectly of securities of
the Corporation or the Bank representing 35% or more of the combined voting
power of the Corporation’s or the Bank’s outstanding securities; (4)
individuals who are members of the Board of Directors (the “Incumbent Board”)
cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director whose election was approved by a vote
of at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Corporation’s stockholders was approved by
the nominating committee serving under an Incumbent Board, shall be considered
a member of the Incumbent Board; or (5) consummation of a plan of
reorganization, merger, consolidation, sale of all or substantially all of the
assets of the Corporation or a similar transaction in which the Corporation is
not the resulting entity, other than an event at the completion of which the
stockholders of the Corporation immediately preceding completion of the event
hold more than 40% of the outstanding stock of the resulting entity; provided
that the term “Change in Control” shall not include an acquisition of
securities by an employee benefit plan of the Corporation or the Bank.

 

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(b)                                 The
term “Date of Termination” means the date upon which the Executive’s employment
with the Corporation ceases, as specified in a notice of termination pursuant
to Section 9 hereof,

 

(c)                                  The
term “Involuntary Termination” means the termination of the employment of the
Executive (i) by the Corporation without his express written consent; (ii) by
the Executive by reason of a material diminution of or interference with his
duties, responsibilities or benefits, including (without limitation) any of the
following actions unless consented to in writing by the Executive: (1) a
requirement that the Executive be based at any place other than Chicago,
Illinois, or within a radius of 35 miles from the location of the Corporation’s
principal office located at 1200 N. Ashland Avenue, Chicago, Illinois, except
for reasonable travel on Corporation or Bank business; (2) a material demotion
of the Executive; (3) a material reduction in the number or seniority of
personnel reporting to the Executive or a material reduction in the frequency
with which, or in the nature of the matters with respect to which such
personnel are to report to the Executive, other than as part of a Corporation
and Bank-wide reduction in staff; (4) a reduction in the Executive’s salary or
a material adverse change in the Executive’s perquisites, benefits, contingent
benefits or vacation, other than as part of an overall program applied
uniformly and with equitable effect to all members of the senior management of
the Corporation and the Bank; (5) a material permanent increase in the required
hours of work or the workload of the Executive beyond what is expected of
comparably situated chief executive officers performing substantially the same
duties; or (6) the failure of the Board of Directors (or board of directors of
any successor of the Corporation including its ultimate parent company) to
elect the Executive as President and Chief Executive Officer of the Corporation
(or any successor of the Corporation including its ultimate parent company) or
any action by the Board of Directors (or a board of directors of a successor of
the Corporation including its ultimate parent company) removing him from such
office; or (iii) by the Executive within 90 days after he receives written
notice from the Corporation pursuant to Section 2 hereof that the term of this
Agreement will not be extended (a “Non-Extension Termination”).  The term “Involuntary Termination” does not
include Termination for Cause, termination of employment due to death or disability
or termination pursuant to Section 7(g) of this Agreement, or suspension or
temporary or permanent prohibition from participation in the conduct of the
Bank’s affairs under Section 8 of the Federal Deposit Insurance Act.

 

(d)                                 The
terms “Termination for Cause” and “Terminated For Cause” mean termination of
the employment of the Executive with the Corporation and the Bank because of
the Executive’s willful misconduct, breach of a fiduciary duty involving
personal profit, repeated failure to perform stated duties (after written
notice and reasonable opportunity to cure), willful violation of any law, rule,
or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order issued by a federal banking regulator, or (except as
provided below) material breach of any provision of this Agreement (after
written notice and reasonable opportunity to cure).  No act or failure to act by the Executive shall be considered
willful unless the Executive 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 Corporation or the Bank.  The
Executive shall not be deemed to have been Terminated for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution,
duly adopted by the affirmative vote of not less than a

 

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majority of the entire
membership of the Board of Directors at a meeting of the Board duly called and
held for such purpose (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive’s counsel, to be
heard before the Board), stating that in the good faith opinion of the Board of
Directors the Executive has engaged in conduct described in the preceding
sentence and specifying the particulars thereof in detail.

 

(e)                                  The
term “Voluntary Termination” shall mean termination of employment by the
Executive voluntarily as set forth in Section 7(d) of this Agreement.

 

2.                                       Term.  The term of this Agreement shall be a period
of three years commencing on January 1, 2003, subject to earlier termination as
provided herein, and on each day thereafter the term of this Agreement shall be
extended for one day in addition to the then-remaining term, creating on each
such day a new three year term, provided  that the Corporation has
not at any time given Executive prior written notice that the term of this
Agreement will not be so extended.

 

3.                                       Employment.  The Executive is employed as the President
and Chief Executive Officer of the Corporation.  As such, the Executive shall have supervision and control over
strategic planning (with each strategic plan being subject to approval by the
Board of Directors of the Corporation) and daily consolidated operations of the
Corporation, shall render administrative and management services as are
customarily performed by persons situated in similar executive capacities, and
shall have such other powers and duties as the Board of Directors may prescribe
from time to time consistent with services performed by similarly situated
executives and consistent with the terms of this Agreement.  The Executive shall also render services to
any subsidiary or subsidiaries of the Corporation as requested by the
Corporation from time to time consistent with his executive position and with
the terms of this Agreement.  The
Executive shall devote his best efforts and reasonable time and attention to
the business and affairs of the Corporation and its subsidiaries to the extent
necessary to discharge his responsibilities hereunder.  The Executive may (a) serve on charitable
boards or committees at the Executive’s discretion without consent of the Board
of Directors and, in addition, on such corporate boards as are approved in a
resolution adopted by a majority of the Board of Directors, and (b) manage
personal investments, so long as such activities do not interfere materially
with performance of his responsibilities hereunder.

 

4.                                       Compensation.

 

(a)                                  Salary.
The Corporation agrees to pay the Executive during the term of this Agreement a
base salary (the “Corporation Salary”) the annualized amount of which shall be
not less than $525,000.  The Corporation
Salary shall be paid no less frequently than monthly and shall be subject to
customary tax withholding.  The amount
of the Corporation Salary shall be increased (but under no circumstances may
the Corporation Salary be decreased) from time to time in accordance with the
amounts of salary approved by the Board of Directors.  In order to effectuate the purpose of the preceding sentence, the
amount of the Corporation Salary shall be reviewed by the Board of Directors at
least every year during the term of this Agreement.  If and to the extent that the Bank and/or any other entities
directly or indirectly controlled by the Corporation (the “Consolidated
Subsidiaries”) pay salary or other amounts or provide benefits to

 

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the Executive that the
Corporation is obligated to pay or to provide to the Executive under this
Agreement, the Corporation’s obligations to the Executive shall be reduced
accordingly.

 

(b)                                 Annual
Incentive Bonus.  On or before March
31st of each year of the term of this Agreement, the Board of
Directors shall adopt consolidated performance criteria for the current calendar
year based upon which the Executive shall be entitled to earn an annual cash
incentive bonus (the “Annual Cash Bonus”) for such calendar year if he is
employed by the Corporation on the last day of such year.  In adopting such criteria the Board of Directors
shall establish targeted consolidated performance based upon which the
Executive will be entitled to earn an Annual Cash Bonus equal to 50% of the
Corporation Salary and separately establish levels of consolidated performance
based upon which the Executive will be entitled to earn an Annual Cash Bonus in
an amount less or greater than 50% of the Corporation Salary but not in excess
of 100% of the Corporation Salary.  The
Annual Cash Bonus earned by the Executive for a calendar year shall be paid
within 90 days after the expiration of such calendar year; provided, however,
in the event the payment of the Annual Cash Bonus (or any portion thereof) when
added to the other compensation (which is taken into account under Section
162(m) of the Internal Revenue Code of 1986, as amended, (the “Code”)) that is
expected to be paid to the Executive in the same calendar year would, in the
reasonable opinion of the Board of Directors, result in a limitation on
compensation deductibility under Section 162(m) of the Code, then in that
event, the Annual Cash Bonus (or affected portion thereof) shall be deferred in
an amount necessary to assure full deductibility of compensation paid to the
Executive for purposes of  Section
162(m) of the Code, with the deferred amount being paid, together with interest
from the date of deferral to the date of payment at the average
interest-bearing cost of funds of the Bank (the deferred amount plus interest
shall be deemed the “Deferred Payment”), 
as soon as the Deferred Payment is not subject to limitation on
deductibility under Section 162(m) of the Code.

 

(c)                                  Stock
Options.  Each year while the
Executive is employed pursuant to this Agreement, he shall be considered for an
award of one or more options under the Corporation’s 1997 Omnibus Incentive
Plan and any successor or substitute for such plan (the “Stock Option Plan”) by
the Committee (as defined in the Stock Option Plan) at such time as awards are
granted to other senior executives of the Corporation.  Based upon the Corporation achieving
targeted consolidated performance established by the Committee (which
performance may be based upon criteria different than that utilized in
determining the Annual Cash Bonus under Section 4(b) above), it is expected, if
the Executive is then employed by the Corporation, that the Committee will
grant to the Executive one or more options under the Stock Option Plan to
acquire common stock of the Corporation at an exercise price per share equal to
Fair Market Value (as defined in the Stock Option Plan) on the date of grant
with number of shares subject to such option(s) being determined by dividing
the Black-Scholes value per share or such other value per share determined by
an investment banking firm selected by the Board of Directors (in either case
utilizing duration, volatility and other criteria reasonably selected by the
Board of Directors) of the shares that will be subject to the option(s) into
100% of the Corporation Salary earned by the Executive for the preceding
calendar year, which value per share shall be determined utilizing the same
methodology (and the same assumptions applied to such methodology) that is used
for grants of stock options at such time for other senior executives of the
Corporation.  If the Corporation’s
consolidated performance is less or greater than the targeted consolidated
performance established by the Committee, the Executive may be awarded

 

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one or more options with a
lesser or greater number of underlying shares, but the value of such shares on
the date of grant utilizing the methodology (and assumptions) set forth above
shall in no event exceed 200% of the Corporation Salary earned by the Executive
for the preceding calendar year.  The
grant will be made as an ISO (as defined in the Stock Option Plan) to the
maximum extent permissible and then as an NQSO (as defined in the Stock Option
Plan).  Each option granted pursuant to
the provisions hereof shall have an option term of 10 years and may be subject
to a vesting schedule, provided: (i) vesting will continue following an
Involuntary Termination at any time, (ii) such option to the extent outstanding
and unexercisable shall become fully exercisable upon the death or disability
of the Executive, (iii) all vested options shall be exercisable for the
unexpired balance of the option term upon a termination of Executive’s
employment other than as provided in the following subparts (iv) and (v) of
this subsection, (iv) such option to the extent outstanding and unexercisable
shall become fully exercisable upon a Change in Control if the unexercisable
portion of the option would otherwise terminate or cease to be enforceable, in
whole or in part, by reason of such Change in Control and shall remain
exercisable for at least one year thereafter but not beyond the expiration of
the option term, and (v) the option shall expire, terminate, and be forfeited
upon a Termination for Cause or a termination pursuant to Section 7(g) below.

 

(d)                                 Expenses.  The Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the Executive in
performing services under this Agreement in accordance with the policies and
procedures applicable to the executive officers of the Corporation and the
Bank, provided  that the Executive accounts for such expenses as
required under such policies and procedures.

 

5.                                       Employee
Benefits.

 

(a)                                  Participation
in Benefit Plans.  While the
Executive is employed by the Corporation, the Executive shall be entitled to
participate, to the same extent as executive officers of the Corporation and
the Bank generally, in all plans, programs and practices of the Corporation and
the Bank relating to pension, retirement thrift, profit-sharing, savings, group
or other life insurance, hospitalization, medical and dental coverage, travel
and accident insurance, education, retirement or employee benefits or
combination thereof.  In addition, the
Executive shall be entitled to be considered for benefits under all of the
stock and stock option related plans in which the Corporation’s or the Bank’s
executive officers are eligible or become eligible to participate provided any
grants made to the Executive pursuant to Section 4(c) hereof shall be
considered in making any determination with respect thereto.

 

(b)                                 Fringe
Benefits.  While the Executive is
employed by the Corporation, the Executive shall be eligible to participate in,
and receive benefits under, any other fringe benefit plans, programs and
practices or perquisites which are or may become generally available to the
Corporation’s or the Bank’s executive officers, including but not limited to,
supplemental retirement, supplemental medical or life insurance plans, company
cars, club dues, physical examinations, financial planning and tax preparation
services.  Without limiting the
generality of the foregoing, the Corporation agrees to pay for the Executive’s
membership dues and related business expenses in Twin Orchard Country Club
(Long Grove, Illinois), The Standard Club, and expenses for an executive
automobile which shall be replaced with a new vehicle at least every 3

 

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years.  Moreover, during the Executive’s employment
by the Corporation, he shall be entitled to receive long-term disability coverage
and benefits as in effect on the date hereof (to the extent available at a
reasonable cost).  In no event will the
Executive receive any benefit which is less favorable than a benefit being
provided to any other executive officer of the Corporation or the Bank.

 

(c)                                  Post-Employment
Health Benefit.  In recognition of
the past service of the Executive to the Corporation and its subsidiaries, the
Executive has earned and shall be entitled to receive, subject to unconditional
forfeiture thereof upon a Termination for Cause or a termination pursuant to
Section 7(g) hereof, post-employment continuing health benefit coverage from
the Corporation or its successor in interest (the “Post-Employment Health
Benefit”) upon any termination of employment of the Executive which does not
result in forfeiture of the Post-Employment Health Benefit, as follows: (i) the
Corporation (or its successor in interest) shall provide to the Executive (for
himself, his spouse and his other eligible dependents) until the date that Executive
becomes eligible for Medicare benefits (for his spouse until the date that is
seven full calendar months after Executive becomes eligible for Medicare
benefits), or if he should die prior thereto then to his surviving spouse and
his other eligible dependents until the date that is seven full calendar months
after the date that Executive would have become eligible for Medicare benefits
if he had survived, the same family health insurance, hospitalization, medical,
dental, prescription drug and other health benefits as the Executive would have
been eligible for if Executive had continued to serve as an executive officer
of the Corporation (or its successor) until the Executive became eligible for
Medicare benefits (and for his spouse until the date that is seven full
calendar months thereafter) on terms as favorable to the Executive as to other
executive officers of the Corporation (or its successor) from time to time,
including amounts of coverage and deductibles, which shall be at the
Corporation’s (or its successor’s) sole cost other than co-payments and
deductibles; and (ii) the Corporation (or its successor) shall, at the election
of the Executive, provide the same coverage as set forth in subpart (i) of this
subsection for the benefit of the Executive, his spouse and his other eligible
dependents after the Executive becomes eligible for Medicare benefits and
during the remainder of his lifetime (for Executive’s spouse, not ending before
the date that is seven full calendar months after the date that Executive
becomes eligible for Medicare benefits), at the sole cost of the Executive.

 

6.                                       Vacations;
Leave.  The Executive shall be
entitled (i) to annual paid vacation in accordance with the policies
established by the Board of Directors which shall not be less favorable than
that provided to any other executive officer of the Corporation or the Bank,
and (ii) to voluntary leaves of absence, with or without pay, from time to time
at such times and upon such conditions as the Board of Directors may determine
in its discretion.

 

7.                                       Termination
of Employment.

 

(a)                                  Involuntary
Termination.  If the Executive
experiences an Involuntary Termination prior to (and not in connection with) a
Change in Control, such termination of employment shall be subject to the Corporation’s
obligations under this Section 7(a) in lieu of any other compensation and
employee benefits under this Agreement. 
If such Involuntary Termination is not a Non-Extension Termination, the
Corporation shall, as agreed upon liquidated damages, pay to the Executive
monthly, during the unexpired term of this Agreement

 

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after the Date of Termination,
one-twelfth of the Corporation Salary at the annual rate in effect immediately
prior to the Date of Termination and one-twelfth of the average Annual Cash
Bonus, based on the average amount of such Annual Cash Bonus for the two full
calendar years preceding the Date of Termination (or if the Date of Termination
occurs before one full calendar year has elapsed under this Agreement, the
amount of $262,500, or if one but not two full calendar years have elapsed
under this Agreement, the greater of $262,500 or the amount of the Annual Cash
Bonus earned by the Executive for the one calendar year).  If such Involuntary Termination is a
Non-Extension Termination, the Corporation shall, as agreed upon liquidated
damages, pay the Executive monthly the compensation set forth in this Section
7(a)(i) for a period of 1 year following the Date of Termination.  In addition to the foregoing, in connection
with an Involuntary Termination, the Executive shall be entitled to receive (A)
any accrued Corporation Salary through the Date of Termination within 30 days
after the Date of Termination, (B) any unpaid Annual Cash Bonus earned by the
Executive for the preceding calendar year within the time period set forth in
Section 4(b) hereof, (C) reimbursement of any expenses incurred through the
Date of Termination in accordance with Section 4(d), and (D) all unpaid
Deferred Payments as soon as such payments are not subject to any deductibility
limitation under Section 162(m) of the Code (collectively, the “Accrued
Compensation”) plus the Post-Employment Health Benefit.  If the Executive should die after amounts
become payable under this Section 7(a), such amounts shall thereafter be paid
to the Executive’s estate until satisfied in full.

 

(b)  Change in Control.  If the Executive experiences an Involuntary
Termination in connection with or following a Change in Control, such termination
of employment shall, in lieu of any other compensation and employee benefits
under this Agreement, be subject to the Corporation’s (or its
successor-in-interest’s) obligations under this Section 7(b).

 

(i)                                     Damages
for Breach of Contract.  If the
Executive has offered in writing to continue to provide the services
contemplated by and on the terms provided in this Agreement and such offer has
been rejected by the Corporation (or its successor-in-interest), then, subject
to Section 7(b)(ii) below, the Corporation (or its successor-in-interest)
shall, during the lesser period of the remaining term of this Agreement or 18
months following the Date of Termination (the “Contract Damage Period”), as
agreed upon damages for breach of contract, (A) pay to the Executive monthly
one-twelfth of the Corporation Salary at the annual rate in effect immediately
prior to the Date of Termination and one-twelfth of the average Annual Cash
Bonus, based on the average amount of such Annual Cash Bonus for the two full
calendar years preceding the Date of Termination or if one but not two full
calendar years  have elapsed under this
Agreement, the amount of the Annual Cash Bonus earned by the Executive for the
one calendar year; provided however, the maximum amount the Executive shall be
entitled to receive pursuant to this Section 7(b)(i) shall be limited to
$1,500,000.  Notwithstanding the
foregoing, the provisions of this Section 7(b)(i) shall have no effect if a
Change in Control occurs within one year from the date this Agreement is
entered into (not the effective date of this Agreement).  In the event that a Change in Control occurs
within one year from the date that this Agreement is entered into, then in that
event, it is agreed by the parties that the only benefits to be received by the
Executive from an Involuntary Termination are the benefits set forth in Section
7(b)(iii) and (iv) below.

 

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(ii)                                  Mitigation.  In the event that the Executive becomes
entitled to damages for breach of contract pursuant to Section 7(b)(i), then in
that event, the Corporation’s (or its successors-in-interest’s) obligation
under Section 7(b)(i) shall be reduced (or payment of such damages under
Section 7(b)(i) shall be returned by the Executive) to the extent of the
Executive’s earned income (within the meaning of Section 911(d)(2)(A) of the
Code) during the Contract Damage Period. 
Throughout the Contract Damage Period, the Executive shall promptly
inform the Corporation (or its successor-in-interest) of the nature and amounts
of earned income received by him or to which he is otherwise entitled by virtue
of the performance of personal services during the Contract Damage Period.

 

(iii)                               Accrued
Compensation and Post-Employment Health Benefit.  In addition to any other amounts to which the Executive may be
entitled to receive under this Section 7(b), the Corporation (or its
successor-in-interest) shall pay to the Executive the Accrued Compensation and
provide the Post-Employment Health Benefit.

 

(iv)                              Change
in Control Payment.  If an
Involuntary Termination occurs in connection with or within 18 months following
a Change in Control, in addition to the Corporation’s (or its
successor-in-interest’s) obligations under Section 7(b)(i) and (iii) above, the
Corporation (or its successor-in-interest) shall pay to the Executive in cash,
within 30 days after the Date of Termination, an amount equal to 299% of the
Executive’s “base amount” as determined under Section 280G of the Code.

 

If the
Executive should die after amounts become payable under any provision of this
Section 7(b), such amounts shall thereafter be paid to the Executive’s estate
until satisfied in full, but subject to the mitigation provisions set forth in
Section 7(b)(ii) with respect to earned income of the Executive during the
Contract Damage Period through the date of his death.

 

(c)                                  Termination
for Cause.  In the event of
Termination for Cause, the Corporation shall have no further obligation to the
Executive under this Agreement after the Date of Termination except for the
Accrued Compensation.

 

(d)                                 Voluntary
Termination.  The Executive may
terminate his employment voluntarily at any time by a notice pursuant to
Section 9 of this Agreement.  In the
event that the Executive voluntarily terminates his employment other than by
reason of any of the actions that constitute Involuntary Termination
(“Voluntary Termination”), the Corporation shall only be obligated to the
Executive for the amount of the Accrued Compensation and to provide the Post-Employment
Health Benefit, and the Corporation shall have no further obligation to the
Executive under this Agreement.

 

(e)                                  Death.  In the event of the death of Executive
during the term of this Agreement and prior to any termination of employment,
the Corporation shall pay to the Executive’s estate the Accrued Compensation
and shall provide to the Executive’s surviving spouse and other eligible
dependents the Post-Employment Health Benefit.

 

(f)                                    Disability.  If the Executive becomes entitled to
benefits under the terms of the then-­current disability plan, if any, of the
Corporation or the Bank (a “Disability Plan”), he

 

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shall be entitled to receive
such group and other disability benefits, if any, as are then provided by the
Corporation or the Bank for executive officers.  In the event of such disability, this Agreement shall not be
suspended, except that (i) the Corporation’s obligation to pay the Corporation
Salary to the Executive shall be reduced in accordance with the amount of
disability income benefits received by the Executive, if any, pursuant to this
Section 7(f) such that, on an after-tax basis, the Executive shall realize from
the sum of disability income benefits and Corporation Salary the same amount as
he would realize on an after-tax basis from the Corporation Salary if the
Corporation’s obligation to pay salary were not reduced pursuant to this
Section 7(f); (ii) the Executive shall not be entitled to earn an Annual Cash
Bonus pursuant to Section 4(b) hereof or option grants pursuant to Section 4(c)
if the disability prevents the Executive from rendering full time service to
the Corporation for a period of in excess of six months during an applicable
calendar year; and (iii) upon a resolution adopted by a majority of the
disinterested members of the Board of Directors, the Corporation may
discontinue payment of the Corporation Salary beginning six months following a
determination that the Executive has become entitled to benefits under a Disability
Plan or otherwise unable to fulfill his duties under this Agreement.  The Corporation may terminate the employment
of the Executive at any time after the expiration of one year following such
disability if such disability is then continuing and upon such termination the
Executive shall only be entitled to receive the Accrued Compensation and the
Post-Employment Health Benefit.

 

(g)                                 Regulatory
Action.  Notwithstanding any other
provisions of this Agreement, if the Executive is removed and/or permanently prohibited
from participating in the conduct of the Bank’s affairs by an order issued
under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.
C. § 1818(c)(4) and (g)(1), all obligations of the Corporation under this
Agreement shall terminate as of the effective date of the order, except for the
obligation of the Corporation to pay the Accrued Compensation.

 

(h)                                 No
Other Obligation to Mitigate Damages; No Offset. Except as provided in
Section 7(b)(ii), the Executive shall not be obligated to mitigate amounts
payable or arrangements made under the provisions of this Section 7 and the
obtaining of other employment shall in no event effect any reduction of the
Corporation’s obligations under this Section 7 (other than Section 7(b)).  Except as provided in Section 7(b)(ii), the
Corporation’s obligation to make payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action
which the Corporation may have against the Executive or others.

 

8.                                       Tax
Detriment Payments.  If and only if
stock options held by the Executive under the Stock Option Plan become
exercisable solely by virtue of a Change in Control and the acceleration and
lapse value of such stock options when aggregated with other payments to be
received by the Executive under this Agreement (the “Total Payments”) is
subject, in whole or in part, to the excise tax imposed by Section 4999 of the
Code or any similar successor provision or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, the

 

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Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments
(not including any Gross-Up Payment). All determinations as to whether any of
the Total Payments are “parachute payments” (within the meaning of Section 280G
of the Code), whether a Gross-Up Payment is required, the amount of such
Gross-Up Payment and any amounts relevant to the foregoing sentence shall be
made by an independent accounting firm selected by the Corporation, which may
be the accounting firm then regularly retained by the Corporation (the
“Accounting Firm”). The Accounting Firm shall provide its determination (the
“Determination”), together with detailed supporting calculations, regarding the
amount of any Gross-Up Payment and any other relevant matter, both to the
Corporation and the Executive, within 60 days of the Date of Termination, if
applicable, or such earlier time as is reasonably requested by the Corporation
or the Executive (if the Executive reasonably believes that any of the Total
Payments may be subject to the Excise Tax). If the Accounting Firm determines
that no Excise Tax is payable by the Executive, it shall furnish the Executive
with an opinion that the Executive has substantial authority not to report any
Excise Tax on his Federal income tax return. 
Subject to the determination of any Underpayment or Overpayment, any
determination by the Accounting Firm shall be binding upon the Corporation and
the Executive.  As a result of uncertainty
in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that the
Corporation should have made larger Gross-Up Payments (“Underpayment”) or that
Gross-Up Payments will have been made by the Corporation which should not have
been made (“Overpayments”). In either such event, the Accounting Firm shall
determine the amount of the Underpayment or Overpayment that has occurred,
which amount shall be redetermined, if necessary, to reflect any final
assessment by the Internal Revenue Service respecting amounts resulting in an
Underpayment or Overpayment. In the case of an Underpayment, the amount of such
Underpayment shall be promptly paid by the Corporation to or for the benefit of
the Executive, and in the case of an Overpayment, the amount of such
Overpayment shall be promptly paid by the Executive to the Corporation.  The provisions of this Section 8 shall not
be applicable and shall have no force or effect if none of the stock options
held by the Executive under the Stock Option Plan become exercisable solely by
virtue of a Change in Control. If the Total Payments after subtracting the
acceleration and lapse value of the stock options held by the Executive under
the Stock Option Plan that become exercisable solely by virtue of a Change in
Control (the “Adjusted Total Payments”) would be subject, in whole or in part,
to the Excise Tax, then the provisions of this Section 8 shall not be
applicable to the Adjusted Total Payments, but shall continue to apply to and
shall have full force and effect on the part of the Total Payments remaining
after subtracting the Adjusted Total Payments.

 

9.                                       Notice
of Termination.  Subject to the
provisions of Section 1(d) hereof, in the event that the Corporation or the
Bank, or both, desire to terminate the employment of the Executive during the
term of this Agreement, the Corporation or the Bank, or both, shall deliver to
the Executive a written notice of termination, stating whether such termination
constitutes Termination for Cause, Involuntary Termination, or termination for
disability, setting forth in reasonable detail the facts and circumstances that
are the basis for the termination, and specifying the date upon which
employment shall terminate, which date shall be at least 30 days after the date
upon which the notice is delivered, except in the case of Termination for
Cause.  In the event that the Executive
determines in good faith that he has experienced an Involuntary Termination of
his employment, he shall send a written notice to the Corporation stating the

 

x

 

circumstances that constitute
such Involuntary Termination and the date upon which his employment shall have
ceased due to such Involuntary Termination. 
In the event that the Executive desires to effect a Voluntary
Termination, he shall deliver a written notice to the Corporation, stating the
date upon which employment shall terminate, which date shall be at least 90
days after the date upon which the notice is delivered, unless the parties
agree to a date sooner.

 

10.                                 Attorneys’
Fees. The Corporation shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the
Executive as a result of (i) the Executive’s contesting or disputing any
termination of employment, or (ii) the Executive’s seeking to obtain or enforce
any right or benefit provided by this Agreement or by any other plan or
arrangement maintained by the Corporation (or any successor) or the
Consolidated Subsidiaries under which the Executive is or may be entitled to
receive benefits; provided that the Corporation’s obligation to pay such
fees and expenses is subject to the Executive’s prevailing with respect to the
matters in dispute in any proceeding initiated by the Executive or the
Executive’s having been determined to have acted reasonably and in good faith
with respect to any proceeding initiated by the Corporation or the Consolidated
Subsidiaries.

 

11.                                 Indemnification.  During Executive’s term of employment with
the Corporation and thereafter, the Corporation shall indemnify and hold
Executive harmless to the maximum extent now or hereafter permitted under the
Articles of Incorporation and By-Laws of the Corporation.  In the event that legal action is instituted
or threatened against the Executive during or after the term of his employment
with, or membership on the Board of Directors of, the Corporation, the Bank or
any affiliate the Corporation, in connection with such employment or
membership, the Corporation will advance to the Executive the costs and
expenses incurred by Executive in the defense of such action (including
reasonable attorneys, expert and other professional? fees) to the maximum
extent permitted by law without prejudice to or waiver by the Corporation of
its rights and remedies against the Executive. 
In the event that there is a final judgment entered against the
Executive in any such litigation which, in accordance with its Articles of
Incorporation and By-Laws, is not subject to indemnification, then the
Executive shall reimburse the Corporation for all such costs and expenses paid
or incurred by it in the Executive’s defense of such litigation (the
“Reimbursement Amount”). The Reimbursement Amount shall be paid by the
Executive within 30 days after rendition of the final judgment and a
determination by the Board of Directors that such costs and expenses are not
subject to indemnification. The parties shall cooperate in the defense of any
asserted claim, demand or liability against the Executive or the Corporation or
any of the Consolidated Subsidiaries. 
The term “final judgment” as used herein shall be defined to mean the
decision of a court of competent jurisdiction, and in the event of an appeal,
then the decision of the appellate court, after petition for rehearing has been
denied, or the time for filing the same (or the filing of further appeal) has
expired.  The  rights to indemnification under this Section 11 shall be in
addition to any rights which Executive may now or hereafter have under any
insurance contract maintained by the Corporation or any of its other affiliates
or any other agreement between Executive and the Corporation or any of its
affiliates.  Anything in this Agreement
to the contrary notwithstanding, Executive’s indemnification rights under this
Section 11, the Articles of Incorporation and By-Laws of the Corporation and
applicable law, shall survive the

 

xi

 

termination of Executive’s
employment with the Corporation and his membership on the Board of Directors of
the Corporation, the Bank and any affiliate of the Corporation.

 

12.                                 No
Assignments.

 

(a)                                  This
Agreement is personal to each of the parties hereto, and neither may assign or
delegate any of its rights or obligations hereunder without first obtaining the
written consent of the other party; provided, however, that this Agreement
shall be binding upon and inure to the benefit of any successor of the
Corporation and the Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) by an assumption
agreement in form and substance reasonably satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Corporation would be required to perform it if no such
succession had taken place.  Failure of
the Corporation to obtain such an assumption agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement and shall entitle
the Executive to compensation and benefits from the Corporation in the same
amount and on the same terms as provided in Section 7(b).  For purposes of implementing the provisions
of this Section 12, the date on which any such succession becomes effective
shall be deemed the Date of Termination.

 

(b)                                 This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive’s personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

 

13.                                 Notice.  For the purposes of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or five
days after the date that sent by certified mail, return receipt requested,
postage prepaid, to the Corporation at its home office, to the attention of the
Board of Directors with a copy to the Secretary of the Corporation, or, if to
the Executive, to such home or other address as the Executive has most recently
provided in writing to the Corporation.

 

14.                                 Amendments.  No amendments or additions to this Agreement
shall be binding unless in writing and signed by both parties.

 

15.                                 Headings.  The headings used in this Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.

 

16.                                 Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provisions shall
not affect the validity or enforceability of the other provisions hereof.

 

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

 

xii

 

18.                                 Preparation
Fees.  The Corporation shall be
solely responsible for payment of any and all legal fees incurred by Executive
in the preparation, negotiation and execution of this Agreement, but in an
amount not to exceed $15,000.

 

19.                                 Successors
to Code Sections.  All provisions of
this Agreement referring to sections of the U.S.C. (United State Code) or to
the Code shall be deemed to refer to successor code sections in the event of
renumbering of code sections.

 

20.                             1999 Employment Agreement.  This Agreement supercedes and replaces the
1999 Employment Agreement and as of January 1, 2003 the 1999 Employment
Agreement shall terminate and have no further force or effect.

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

 

 

	
  Attest:

  	
  MB
  FINANCIAL, INC.

  
	
   

  	
   

  
	
  /s/ Doria L. Koros

  	
   

  	
  /s/ E.M. Bakwin

  	
   

  
	
  Doria L.
  Koros

  	
  E.M. Bakwin

  
	
  Secretary

  	
  Chairman of
  the board

  
	
   

  	
   

  
	
  Witness:

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
  /s/ Jahaira Soto

  	
   

  	
  /s/ Mitchell Feiger

  	
   

  
	
  Jahaira Soto

  	
  Mitchell
  Feiger

  

 

xiiiExhibit 10.7

 

1997
OMNIBUS INCENTIVE PLAN

 

MB
Financial, Inc.

 

As
modified through January 22, 2003

 

1997 OMNIBUS INCENTIVE PLAN

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  
	
  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 and January 22, 2003.

 

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.

 

 

(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)                   “First
Board Meeting” has the meaning set forth in Section 4.3 herein.

 

(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)            “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.

 

4

 

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 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
2,500,000.  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 75,000 Shares, subject to adjustment
as provided in Section 4.5 herein. During the term of the Plan, Awards with
respect to no more than 200,000 Shares 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 50% of their annual retainer and fees for attendance at regular
meetings of the Board of Directors (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 as of the
date of the first meeting of the Board in the year with respect to which the
Board Compensation is payable (the “First Board Meeting”).  The election for Options and/or Shares of
Restricted Stock must be taken prior to the First Board Meeting in accordance
with the procedures therefor established by the Company.  The Exercise Price of an Option granted to a
Director of the Company pursuant to this Section 4.3 will be equal to 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 as to which an election for Options has been made by the Director
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 as to which an election for Shares of
Restricted Stock has been made by the Director 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.  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.

 

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.

 

5

 

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.

 

6.4                     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

 

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
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.

 

7

 

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.

 

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.

 

8

 

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, 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.

 

9

 

 

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 Shares awarded based upon performance,
which shall vest, based also upon continuing employment or service, over a
minimum of one year, and 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.

 

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.

 

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.”

 

10

 

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 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.

 

11

 

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.

 

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.

 

12

 

 

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.

 

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.

 

13

 

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

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