Document:

exv10w2

 

EXHIBIT 10.2

FIRST AMENDMENT TO THE

MIDWEST BANC HOLDINGS, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

     This First Amendment to the Midwest Banc Holdings, Inc. Supplemental Executive Retirement
Agreement (the “Agreement”) is made and entered into this                      day of , by and between Midwest
Banc Holdings, Inc., a Delaware corporation (the “Company”), and the undersigned executive (the
“Executive”).

     WHEREAS, the American Jobs Creation Act of 2004 signed into law on October 22, 2004 added a
new Section 409A to the Internal Revenue Code of 1986, as amended (the “Code”);

     WHEREAS, Section 409A imposed substantive requirements on nonqualified deferred compensation
plans which are defined to include an agreement or arrangement that includes one person;

     WHEREAS, Section 409A restricts the timing of distributions from nonqualified deferred
compensation plans;

     WHEREAS, the Agreement does not satisfy the distribution requirements under Section 409A;

     WHEREAS, failure to comply with Section 409A will result in immediate income tax consequences
to the Executive;

     NOW, THEREFORE, to avoid immediate income tax consequences the parties agree to amend the
Agreement in the following manner so that it complies with Section 409A:

     Section 1.4 of the Plan is amended in its entirety to read as follows, effective January 1,
2005:

 

     1.4 “Change of Control” means a change in the ownership or effective
control of the Company, or in the ownership of a substantial portion of the assets
of the Company as provided in section 409A(a)(2)(A)(v) of the Code. Pending
issuance of Treasury regulations, “Change in Control” will be as defined in IRS
Notice 2005-1 and subsequent guidance. In accordance with IRS Notice 2005-1,
“Change in Control” means:

     (a) Change in Ownership. A change in the ownership of the Company
occurs on the date that any person or persons acting as a group acquires
ownership of stock of the Company that, together with stock held by such
person or group, constitutes more than 50 percent of the total fair market
value or total voting power of the stock of such Company. If a person or
group is considered to own more than 50 percent of the total fair market
value or total combined voting power of the stock of the Company, the
acquisition of additional stock by the same person or persons is not
considered to cause a change in the ownership of the Company (or to cause a
change in the “effective control of the Company” within the meaning of
paragraph (c)).

     (b) Change in Effective Control. A change in the effective control of
the Company occurs on the date that a majority of the Company’s board of
directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Company’s board of directors prior to the date of the appointment or
election.

     (c) Change in Ownership of a Substantial Portion of the Company’s
Assets. A change in the ownership of a substantial portion of the
Company’s assets occurs on the date that any person or group acquires (or
has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 50 percent of
the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions.

           Article 1 of the Plan is amended by adding the following Section 1.22 at the end thereof,
effective January 1, 2005:

     1.22 “Specified Employee” means a key employee (as defined in section
416(i) of the Code without regard to paragraph (5) thereof).

            Section 2.1.2 of the Plan is amended in its entirety to read as follows, effective January 1,
2005:

     2.1.2 Payment of Benefit. The Employer shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first day

 

of each month commencing with the month following the Executive’s Termination
of Employment. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.

           4. Section 2.2.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:

     2.2.2 Payment of Benefit. The Employer shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first day
of each month commencing with the month following the Executive’s Termination of
Employment. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.

           5. Section 2.3.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:

     2.3.2 Payment of Benefit. The Employer shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first day
of each month commencing with the month following the Executive’s Normal Retirement
Date. Notwithstanding the foregoing, for any Specified Employee distributions may
not be made before the date which is six (6) months after the date of Termination
of Employment (or, if earlier, the date of death of the Executive). The annual
benefit shall be paid to the Executive for fifteen (15) years.

           6. Section 2.4.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:

     2.4.2 Payment of Benefit. The Employer shall pay the annual benefit
amount to the Executive in twelve (12) equal monthly installments payable on the
first day of each month commencing with the month following the Executive’s Normal
Retirement Date. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.

           7. Section 2.5.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:

     2.5.2 Payment of Benefit. The Employer shall pay the annual benefit
amount to the Executive in twelve (12) equal monthly installments payable on the

 

first day of each month commencing with the month following the Executive’s
Normal Retirement Date. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.

* * *

     IN WITNESS WHEREOF, the Executive and a duly authorized officer of the Company have executed
this First Amendment as of the date set forth above.

	 	 	 	 	 
	Executive:	 	Company:
	 	 	MIDWEST BANC HOLDINGS, INC., for itself and its
	 	 	Subsidiaries
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Title:
	 	President & CEOexv10w3

 

EXHIBIT 10.3

MIDWEST BANC HOLDINGS, INC. 
STOCK AND INCENTIVE PLAN

RESTRICTED STOCK GRANT NOTICE 
(NON-EMPLOYEE DIRECTORS)

Pursuant
to the Midwest Banc Holdings, Inc. Stock and Incentive Plan (the “Plan”), Midwest
Banc Holdings, Inc. (the “Company”) hereby grants to Participant shares of the Company’s Common
Stock subject to all of the terms and conditions as set forth herein and in the Restricted Stock
Award Agreement (the “Award Agreement”), and the Plan, all of which are attached hereto and
incorporated herein in their entirety. Capitalized terms used herein shall have the meanings
assigned to them in the Plan unless the context otherwise requires or unless otherwise defined
herein.

	 	 	 	 	 
	a.

	 	Name of Participant:
	 	
	 
	 	 	 	 
	b.

	 	Date of Grant (Later of: fifth business
day after the date stockholders
approve
the Plan or fifth business day after
the
date on which the director is first
elected
by the shareholders):
	 	 

	 
	 	 	 	 

	c.

	 	Number of Shares Granted:
	 	 

Vesting
Schedule: Your rights in the Common Stock will vest as follows: one-third will vest on the
date of grant and one-third will vest on each of the two succeeding anniversaries of the date of
grant.

Period
of Restriction: The “Period of Restriction” begins on the date of the grant of the Common
Stock to you and ends on the date your rights in the Common Stock vest pursuant to the Vesting
Schedule described above.

Termination
of Service: In the event of your termination of service as a Director of the Company
for reasons other than Retirement, death or Disability and prior to the vesting of your rights in
the Common Stock, you must transfer the unvested shares of Restricted Stock to the Company.

Additional
Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Award Agreement and the Plan. Participant
further acknowledges that as of the Date of Grant, this Grant Notice, the Award Agreement and the
Plan set forth the entire understanding between Participant and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written agreements on that
subject with the exception of Restricted Stock previously granted and delivered to Participant
under the Plan.

	 	 	 	 	 
	midwest
banc holdings, inc.

	 	 	participant
	 
	 	 	 	 
	By:
	 
	 	 	 

	 	Signature

	 	 	Signature
	 
	 	 	 	 
	Title:
	 
	 	 	Date:
	 
	 	 	 	 

	 
	Date:
	 
	 	 	 

Attachments:

Award Agreement and Midwest Banc Holdings, Inc. Stock and Incentive Plan

 

 

MIDWEST BANC HOLDINGS, INC.
 STOCK AND INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT 
 (NON-EMPLOYEE DIRECTORS)

Pursuant to your Restricted Stock Grant Notice (“Grant Notice”) and this Restricted Stock Award
Agreement (the “Award Agreement”), Midwest Banc Holdings, Inc. (the “Company”) has granted you
Restricted Stock under the Midwest Banc Holdings, Inc. Stock and Incentive Plan (the “Plan”).
Defined terms not explicitly defined in this Award Agreement but defined in the Plan shall have the
same definitions as in the Plan.

The details of your Restricted Stock are as follows:

1.
VESTING. Subject to the limitations contained herein, your Shares will vest as provided in your
Grant Notice. In general, if you
terminate your service for reasons other than your Retirement, death, or Disability before your
rights in the Common Stock fully vest,
the portion of the Common Stock that is not vested will be forfeited.

2.
NUMBER OF SHARES. The number of shares of Restricted Stock referenced in your Grant Notice may
be adjusted from time to
time for changes in corporate capitalization in accordance with the terms of the Plan.

3. EXECUTION AND RETURN OF RESTRICTED STOCK GRANT NOTICE. Within fifteen (15) days from the Date of
Grant
set forth in the Restricted Stock Grant Notice, you will, if you desire to accept the Award, return
two executed copies of the Restricted
Stock Grant Notice.

4. SECURITIES LAW REPRESENTATIONS AND ACKNOWLEDGEMENTS. As a condition to the grant of the
Restricted
Stock, you represent and warrant that you are purchasing the Shares solely for investment purposes
and not with an intention to
transfer, sell or otherwise dispose of such shares, except as permitted pursuant to the Plan and in
compliance with applicable securities
laws. You also acknowledge that you understand that the Shares are subject to the transfer
restrictions set forth in this Paragraph 4
and Paragraph 7 below. Each certificate evidencing Shares issued to you hereunder shall bear a
legend in substantially the following
form:

RESTRICTED SHARES

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
ALL TERMS, CONDITIONS, AND RESTRICTIONS OF THE MIDWEST BANC
HOLDINGS, INC. STOCK AND INCENTIVE PLAN, A COPY OF WHICH IS ON
FILE AND AVAILABLE FOR INSPECTION DURING NORMAL BUSINESS HOURS AT
THE COMPANY’S PRINCIPAL OFFICE.

5. VOTING RIGHTS. You may exercise full voting rights with respect to the Shares of Restricted
Stock.

6. DIVIDENDS. You shall be entitled to receive all dividends and other distributions paid with
respect to the Shares of Restricted
Stock. If any such dividends or distributions are paid in Shares, the Shares shall be subject to
the same restrictions on transferability
as the Shares of Restricted Stock with respect to which they were paid.

7. TRANSFERABILITY. Your Restricted Stock may not be sold, transferred, pledged, assigned or
otherwise alienated or
hypothecated until the termination of the Period of Restriction.

8.
AWARD AGREEMENT NOT AN EMPLOYMENT CONTRACT. This Award Agreement is not an employment or service
contract, and nothing in this Award Agreement shall be deemed to create in any way whatsoever any
OBLIGATION on your part to
continue in the employ of the Company or a Subsidiary, or of the Company or a Subsidiary to
continue your employment. In addition,
nothing in this Award Agreement shall obligate the Company or a Subsidiary, their respective
shareholders, Boards, officers or
Employees to continue any relationship that you might have as a Director or consultant for the
Company or a Subsidiary.

 

 

9. TAX TREATMENT.

     (a) In general, the excess of the Restricted Stock’s Fair Market Value at the date when
there is no substantial risk of forfeiture or
restrictions on transferability lapse (whichever occurs first) over any price paid for the
stock is treated as compensation income to you,
and any subsequent change in the value of the Shares will be recognized for tax purposes as
capital gain or loss upon the disposition of
the Shares.

     (b) In the alternative, you may elect under section 83(b) of the Code to recognize
compensation income at the time of the initial
transfer of the shares, based on the value of the shares at that time (rather than at the time
of vesting). In that event, no income will be
recognized upon lapse of the risk of forfeiture or restrictions on transferability, and
subsequent appreciation or depreciation will be
recognized as capital gain or loss. You should note that you will not be entitled to recover
taxes paid if the shares with respect to
which a section 83(b) election was made are later forfeited.

     (c) Before making a choice, you should consult with qualified tax counsel to obtain more
information regarding the
advantages and disadvantages of making a section 83(b) election.

10. WITHHOLDING OBLIGATIONS.

     (a) At the time the restrictions on your Restricted Stock lapse or upon such earlier taxable
event arising as a result of the Award granted hereunder, you hereby authorize withholding from amounts payable to you as a director,
and otherwise agree to make
adequate provision for any sums required to satisfy the Federal, state, local and foreign tax
withholding obligations of the Company or
a Subsidiary, if any, which arise in connection with your Restricted Stock.

     (b) Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable
conditions or restrictions of law, the Company may withhold Shares having a Fair Market Value
on the date the tax is to be
determined equal to the minimum statutory total tax which would be imposed on the transaction.

11. NOTICES. Any notices provided for in your Restricted Stock or the Plan shall be given in
writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by mail by the Company to you,
five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the last address you provided to the
Company.

12. GOVERNING PLAN DOCUMENT. Your Restricted Stock is subject to all the provisions of the Plan,
the provisions of which
are hereby made a part of this Award Agreement, and is further subject to all interpretations,
amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of this
Award Agreement and those of the Plan, the provisions of the Plan shall control.

13. BINDING EFFECT; SEVERABILITY. This Award Agreement shall inure to the benefit of and be binding
upon the parties
hereto and their respective heirs, executors, administrators, successors and any permitted assigns.
In the event any provision of this
Award Agreement shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remainder of the
Award Agreement.

2

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