Document:

exv10w77

Exhibit 10.77

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

	 	 	 	 
	 

	 	 	 
	 

	 	 	Docket No. 10-055-PCA-SM
	In the Matter of
	 	 	 
	 

	 	 	Prompt Corrective Action
	MIDWEST BANK AND TRUST COMPANY

	 	 	Directive Issued Upon Consent
	Elmwood Park, Illinois

	 	 	Pursuant to Section 38 of the
	 

	 	 	Federal Deposit Insurance Act, as
	 

	 	 	Amended
	 

	 	 	 

     WHEREAS, the Board of Governors of the Federal Reserve System (the “Board of
Governors”) determined that, as of February 23 , 2010, Midwest Bank and Trust Company,
Elmwood Park, Illinois (the “Bank”), a state chartered bank that is a member of the Federal
Reserve System, was significantly undercapitalized, as defined in section 208.43(b)(4) of
Regulation H of the Board of Governors (12 C.F.R. § 208.43(b)(4)), for purposes of section
38 of the Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C. § 1831o);

     WHEREAS, the actions in this Prompt Corrective Action Directive (the “Directive”) are
necessary to carry out the purposes of section 38 of the FDI Act; and

     WHEREAS, on March 29, 2010, the board of directors of the Bank, at a duly
constituted meeting, adopted a resolution authorizing and directing Roberto R Herencia to
enter into this Directive on behalf of the Bank, and consenting to compliance with each and
every provision of this Directive by the Bank and its institution-affiliated parties, as
defined in section 3(u) of the FDI Act (12 U.S.C. § 1813 (u)).

 

 

     NOW THEREFORE, pursuant to section 38 of the FDI Act and section 208.45 of
Regulation H of the Board of Governors, the Board of Governors immediately directs that:

     1. The Bank shall no later than 45 days of the date of this Directive (or such
additional time as the Board of Governors may permit), in conjunction with the Bank’s
parent bank holding company, Midwest Bank Holdings, Inc., Melrose
Park, Illinois:

          (a) Increase the Bank’s equity through the sale of shares or contributions to surplus
in an amount sufficient to make the Bank adequately capitalized as defined in
section 208.43(b)(2) of Regulation H of the Board of Governors (12 C.F.R. § 208.43(b)(2));

          (b) enter into and close a contract to be acquired by a depository institution holding
company or combine with another insured depository institution, closing under which
contract is conditioned only on the receipt of necessary regulatory approvals, the
continued accuracy of customary representations and warranties, and the performance of
customary pre-closing covenants; or

          (c) take other necessary measures to make the Bank adequately capitalized.

     2. The Bank shall comply fully with the provisions of section 38(d)(1) of the
FDI Act (12 U.S.C. § 1831o(d)(1)) restricting the making of any capital distributions,
including, but not limited to, the payment of dividends.

     3. (a) The Bank shall not, without the prior written approval of the Federal Reserve
Bank of Chicago (the “Reserve Bank”) and the fulfillment of one of the requirements set
forth in paragraph 1, solicit and accept new deposit accounts or renew any time
deposit bearing an interest rate that exceeds the prevailing effective rates on deposits of
comparable amounts and maturities in

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the Bank’s market area.

          (b) Within 30 days of this Directive, the Bank shall submit an acceptable plan
and timetable to the Reserve Bank for conforming the rates of interest paid on all
existing non-time deposit accounts to the prevailing effective rates on deposits of
comparable amounts in the Bank’s market area. The plan shall detail the current
composition of the applicable deposits by rate and provide a specific date for
conforming all deposit rates to the statutory restriction.

     4. (a) The Bank shall comply fully with the provisions of section 38(f)(2)(B)(i) of
the FDI Act (12 U.S.C. § 1831o(f)(2)(B)(i)) requiring that all transactions between the
Bank and any affiliate comply with section 23A of the Federal Reserve Act (12 U.S.C. §
371c).

          (b) For the purposes of this Directive, the terms (i) “transaction” shall
include, but not be limited to, the transfer, sale or purchase of any asset,
including cash, or the direct or indirect payment of any expense or obligation of,
the payment of a management or service fee of any nature to, or any extension of
credit to an affiliate; (ii) “extension of credit” shall be defined as set forth in
section 215.3 of Regulation O of the Board of Governors (12 C.F.R. § 215.3); and
(iii) “affiliate” shall be defined as set forth in subparagraph (b)(1) of section
23A of the Federal Reserve Act (12 U.S.C. § 371c(b)(1)) and section 223.2 of
Regulation W of the Board of Governors (12 C.F.R. § 223.2).

     5. The Bank shall comply fully with the provisions of sections 38(f)(4)(A)(i) and (ii)
of the FDI Act (12 U.S.C. §§ 1831o(f)(4)(A)(i) and (ii)) restricting the payment of bonuses
to senior executive officers and increases in compensation of such officers.

     6. The Bank shall comply fully with the provisions of sections 38(e)(3) and (4) of

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The FDIC Act (12 U.S.C. §§ 1831o(e)(3) and (4)) restricting asset growth, acquisitions, branching,
and new lines of business.

     7. All communications regarding this Directive shall be sent to:

	 	(a)	 	Mr. Charles F. Luse

Assistant Vice President

Federal Reserve Bank of Chicago

230 South LaSalle Street

Chicago, Illinois 60604
	 
	 	(b)	 	Mr. Roberto R. Herencia

President and Chief Executive Officer

Midwest Bank and Trust Company

501 W. North Avenue

Melrose Park, Illinois 60160

     8. Notwithstanding any provision of this Directive, the Reserve Bank may, in its sole
discretion, grant written extensions of time to the Bank to comply with
any provision of this Directive.

     9. The provisions of this Directive shall be binding upon the Bank and its
institution-affiliated parties, in their capacities as such, and their successors and assigns.

     10. Each provision of this Directive shall remain effective and enforceable until
stayed, modified, terminated or suspended in writing by the Board of Governors.

     11. The provisions of this Directive shall not bar, estop or otherwise prevent the
Board of Governors, the Reserve Bank, or any other federal or state department or agency
from taking any other action affecting the Bank or any of its current or former
institution-affiliated parties and their successors or assigns.

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     12. (a) The Directive does not supersede the Written Agreement by and among the Bank,
the Reserve Bank, and the Illinois Department of Financial and Professional Regulation,
Division of Banking (the “Department”), dated December 18 , 2009.

          (b) Notwithstanding any provision of this Directive, the Bank shall comply
with any other supervisory action issued by the Board of Governors, the Reserve
Bank, or the Department.

     13. As set forth in section 263.205 of the Board of Governors’ Rules of Practice for
Hearings (12 C.F.R. § 263.205), this Directive is enforceable by the Board of Governors
under section 8 of the FDI Act (12 U.S.C. § 1818).

     By order of the Board of Governors of the Federal Reserve System, effective this
30th day of March, 2010.

	 	 	 	 	 	 	 	 	 	 	 
	MIDWEST BANK AND TRUST COMPANY	 	 	 	BOARD OF GOVERNORS OF THE

FEDERAL RESERVE SYSTEM	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 /s/ Roberto R. Herencia
	 	 
	 	By:
	 	 /s/ Robert de V. Frierson
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Roberto R. Herencia
	 	 	 	 	 	Robert de V. Frierson	 	 
	 

	 	President and CEO
	 	 	 	 	 	Deputy Secretary of the Board	 	 

5exv10w78

Exhibit 10.78

WAIVER

In consideration for the benefits I will receive as a result of the participation of MIDWEST
BANC HOLDINGS, INC. (together with its subsidiaries and affiliates, the “Company”) in the
United States Department of the Treasury’s (the “Treasury”) Capital Purchase Program and/or
any other economic stabilization program implemented by the Treasury under the Emergency Economic
Stabilization Act of 2008 (as amended, supplemented, or otherwise modified, the “EESA”)
(any such program, including the Capital Purchase Program, a “Program”), I hereby
voluntarily waive any claim against the United States (and each of its departments and agencies) or
the Company or any of its directors, officers, employees and agents for any changes to my
compensation or benefits that are required to comply with the executive compensation and corporate
governance requirements of Section 111 of the EESA, as implemented by any guidance or regulations
issued and/or to be issued thereunder, including without limitation the provisions for the Capital
Purchase Program, as implemented by any guidance or regulation thereunder, including the rules set
forth in 31 C.F.R. Part 30, or any other guidance or regulations under the EESA and the applicable
requirements of the Exchange Agreement by and among the Company and the Treasury dated as of
February 25, 2010, as amended (such requirements, the “Limitations”).

I acknowledge that the Limitations may require modification or termination of the employment,
compensation, bonus, incentive, severance, retention and other benefit plans, arrangements,
policies and agreements (including so-called “golden parachute” agreements), whether or not in
writing, that I may have with the Company or in which I may participate as they relate to the
period the United States holds any equity or debt securities of the Company acquired through a
Program or for any other period applicable under such Program or Limitations, as the case may be,
and I hereby consent to all such modifications.

This waiver includes all claims I may have under the laws of the United States or any other
jurisdiction (whether or not in existence as of the date hereof) related to the requirements
imposed by the Limitations, including without limitation a claim for any compensation or other
payments or benefits I would otherwise receive, any challenge to the process by which the
Limitations are or were adopted and any tort or constitutional claim about the effect of these
Limitations on my employment relationship and I hereby agree that I will not at any time initiate,
or cause or permit to be initiated on my behalf, any such claim against the United States, the
Company or its directors, officers, employees or agents in or before any local, state, federal or
other agency, court or body.

I agree that, in the event and to the extent that the Compensation Committee of the Board of
Directors of the Company or similar governing body (the “Committee”) reasonably determines
that any compensatory payment and benefit provided to me, including any bonus or incentive
compensation based on materially inaccurate financial statements or performance criteria, would
cause the Company to fail to be in compliance with the Limitations (such payment or benefit, an
“Excess Payment”), upon notification from the Company, I shall repay such Excess Payment to
the Company within 15 business days. In addition, I agree that the Company shall have the right to
postpone any such payment or benefit for a reasonable period of time to enable the Committee to
determine whether such payment or benefit would constitute an Excess Payment.

I understand that any determination by the Committee as to whether or not, including the manner in
which, a payment or benefit needs to be modified, terminated or repaid in order for the Company to
be in compliance with Section 111 of the EESA and/or the Limitations shall be a final and
conclusive determination of the Committee which shall be binding upon me. I further understand that
the Company is relying on this letter from me in connection with its participation in a Program.

 

 

In witness whereof, I execute this waiver on my own behalf, thereby communicating my acceptance and
acknowledgement to the provisions herein.

	 	 	 	 	 
	 	Respectfully,

 	 
	 	
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 	Date:

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