Document:

Exhibit 10.7

 

PAT FAYHEE

 

EMPLOYMENT AGREEMENT

 

AMENDMENT NUMBER 1

 

THIS EMPLOYMENT AGREEMENT AMENDMENT 1 (this “Amendment”),
effective as of December 10, 2008 (the “Effective
Date”), by and between FIRST NATIONAL BANK OF
OTTAWA, a national banking association (the
“Bank”), and PAT FAYHEE (the “Executive”).

 

RECITALS

 

WHEREAS, the Bank and the Executive previously entered into
that certain Employment Agreement dated November 5, 2005 (the “Agreement”);

 

WHEREAS, the Bank and the Executive desire to amend certain
provisions of the Agreement in order to bring such provisions into compliance
with the applicable provisions of Section 409A of the Internal Revenue
Code of 1986, as amended (and guidance issued thereunder) (collectively
referred to herein as “Section 409A”);

 

WHEREAS, pursuant to Section 11(d) of the Agreement,
the Agreement may be amended in writing with the signature of each party; and

 

WHEREAS, the parties desire to amend the Agreement on the
terms hereinafter set forth.

 

NOW, THEREFORE, for good and valuable consideration, the
sufficiency of which is agreed and acknowledged by the parties hereto,
effective as of the Effective Date, the Agreement is amended to read as
follows:

 

AGREEMENTS

 

1.                                      The Agreement is amended by
labeling the provision of the Agreement entitled “Term with Automatic Renewal
Provisions” as “Section 1” and renumbering all subsequent sections of the
Agreement.

 

2.                                      Section 3(b) of the
Agreement is amended by adding the following sentence to the end thereof:

 

“The employee bonus payment
and the “Impact Group” bonus payment, if any, shall be paid as soon as
practicable, but in no event later than two and one-half (21⁄2) months following
the end of the year in which they are earned.”

 

 

3.                                      Section 3(e) of the Agreement
is amended by adding the following sentence to the end thereof:

 

“Any incentive payment made by the Bank pursuant to
this Section shall be paid as soon as practicable, but in no event later
than two-and-one-half (21⁄2) months following the end of the year in which it is
earned.”

 

4.                                      Section 4(a) of the Agreement
is amended by deleting the apostrophe in the term “coverages”.

 

5.                                      Section 4(c) of the Agreement
is amended by adding the following sentence to the end thereof:

 

“To the extent any dues
or expenses payable under this Section 4(c) are to be paid in the
form of a reimbursement to the Executive, such reimbursement shall be made as
soon as practicable, but in no event later than two and one-half (21⁄2) months
following the end of the year in which the corresponding dues or expenses are
incurred.”

 

6.                                      The last
sentence of Section 9(b) of the Agreement is amended in its entirety
and replaced with the following sentences:

 

“In
the event of termination pursuant to this Section 9(b), Executive shall be
entitled to his Base Salary for what would have been the remainder of the
then-current term of this Agreement (less any amount described in the next
sentence of this Section 9(b)), which amounts shall be paid in equal
installments over what would have been the remainder of the term of this
Agreement pursuant to the Bank’s payroll schedule.  To the extent any portion of the payments
provided under this Section 9(b) exceeds the “safe harbor” amount
described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), the
Executive shall receive such portion of the amount due under this Section 9(b) that
exceeds the “safe harbor” amount in a single lump sum payment payable within
five (5) days after the Executive’s termination of employment.”

 

7.                                      Section 9(c) of
the Agreement is amended by adding the following sentence to the end thereof:

 

“Any
amounts due under this Section 9(c) shall be paid to the Executive,
or his estate in the event of his death, as soon as administratively
practicable following the Executive’s termination of employment.”

 

8.                                      A new sentence
is added to the end of Section 9(d) of the Agreement to read as
follows:

 

“Notwithstanding
the foregoing, if such Change of Control does not meet the definition of either
a “change in the ownership,” a “change in the effective control” or a “change
in the ownership of a substantial portion of the assets” of

 

2

 

the
Company under Section 409A of the Code, or any successor thereto, payment
will be made in the same form and at the same time as under Section 9(b) to
the extent required under Code Section 409A.”

 

9.                                      The fifth
sentence of Section 9(e) of the Agreement is amended to read as
follows:

 

“In
the event that such opinions determine that there would be an excess parachute
payment, the payment hereunder or any other payment  determined by such counsel to be includable
in Total Payments shall be modified, reduced or eliminated as specified by the
Executive in writing delivered to the Bank within sixty (60) days of his
receipt of such opinions or, if the Executive fails to so notify the Bank, then
as the Bank shall reasonably determine, so that under the bases of calculation
set forth in such opinions there will be no excess parachute payment; provided,
however, that any such specification by Executive or Bank shall not be
effective where it would result in an imposition of any additional income tax
under Section 409A of the Code.”

 

10.                               A new
subsection 9(f) is added to the Agreement to read as follows:

 

“(f)          Separation from
Service Required.  Notwithstanding
any provision of this Agreement to the contrary, no payment shall be due to
Executive pursuant to this Section 9
as a result of his termination of employment, whether such termination is at
the election of Bank or Executive, unless such termination of employment
satisfies the definition of a “separation from service” under Section 409A  of the Code.”

 

11.                               A new Section 13 is added to the
Agreement to read as follows:

 

“Section 13.  
Code Section 409A.

 

(a)                                 To the extent that any of
the terms and conditions contained herein which were modified by Amendment
Number 1 (the “Amendment”)  constitute an
amendment or modification of the time or manner of payment under a
non-qualified deferred compensation plan (as defined under Code Section 409A
(and the guidance issued thereunder) (collectively referred to herein as “Code Section 409A”)),
then to the extent necessary under the transitional guidance under Internal
Revenue Service Notice 2007-86, this Agreement, as amended by the Amendment,
constitutes an amendment to, and a new election under, such deferred
compensation plan, in order to properly modify the time or manner of payment
consistent with such guidance.

 

(b)                                 It is intended that the
Agreement shall comply with the provisions of Code Section 409A so as not
to subject Executive to the payment of additional taxes and interest under Code
Section 409A.  In furtherance of
this intent, this Agreement shall be interpreted, operated and administered in
a

 

3

 

manner consistent with these intentions, and to the extent that any
regulations or other guidance issued under Code Section 409A would result
in the Executive being subject to payment of additional income taxes or
interest under Code Section 409A, the parties agree to amend the Agreement
to maintain, to the maximum extent practicable, the original intent of the
Agreement while avoiding the application of such taxes or interest under Code Section 409A.

 

(c)                                  Notwithstanding any
provision in the Agreement to the contrary if, as of the effective date of
Executive’s termination of employment, he is a “Specified Employee,” then, only
to the extent required pursuant to Section 409A(a)(2)(B)(i), payments due
under this Agreement which are deemed to be deferred compensation shall be
subject to a six (6) month delay following the Executive’s separation from
service.  For purposes of Code Section 409A,
all installment payments of deferred compensation made hereunder, or pursuant
to another plan or arrangement, shall be deemed to be separate payments and,
accordingly, the aforementioned deferral shall only apply to separate payments
which would occur during the six (6) month deferral period and all other
payments shall be unaffected.  All
delayed payments shall be accumulated and paid in a lump-sum catch-up payment
as of the first day of the seventh-month following separation from service (or,
if earlier, the date of death of the Executive) with all such delayed payments
being credited with interest (compounded monthly) for this period of delay
equal to the prime rate in effect on the first day of such six-month
period.  Any portion of the benefits
hereunder that were not otherwise due to be paid during the six-month period
following the termination shall be paid to the Executive in accordance with the
payment schedule established herein.

 

(d)                                 The term “Specified Employee” shall mean any person
who is a “key employee” (as defined in Code Section 416(i) without
regard to paragraph (5) thereof), as determined by the Bank based upon the
12-month period ending on each December 31st (such 12-month period is
referred to below as the “identification period”).  If Executive is determined to be a key
employee under Code Section 416(i) (without regard to paragraph (5) thereof)
during the identification period he shall be treated as a Specified Employee
for purposes of this Agreement during the 12-month period that begins on the April 1
following the close of such identification period.  For purposes of determining whether Executive
is a key employee under Code Section 416(i), “compensation” shall mean
Employee’s W-2 compensation as reported by the Bank for a particular calendar
year.”

 

[Signature page to follow]

 

4

 

All other terms and conditions
of the Agreement remain in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above set forth.

 

 

	
  By:

  	
  /s/ Donald J. Harris

  	
   

  	
  /s/ Pat Fayhee

  
	
  Name:

  	
  Donald J. Harris

  	
   

  	
  Pat Fayhee

  
	
  Its:

  	
  EVP & Chief
  Operating Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  503 Turnberry Drive

  
	
   

  	
   

  	
   

  	
  North Aurora, IL 60542

  
	
   

  	
   

  	
   

  	
  [Address]

  

 

5Exhibit 10.9

 

VINCE EASI

 

EMPLOYMENT AGREEMENT

 

AMENDMENT NUMBER 1

 

THIS EMPLOYMENT AGREEMENT AMENDMENT 1 (this “Amendment”),
effective as of December 10, 2008 (the “Effective
Date”), by and between FIRST NATIONAL BANK OF
OTTAWA, a national banking association (the
“Bank”), and VINCE EASI  (the “Executive”).

 

RECITALS

 

WHEREAS, the Bank and the Executive previously entered into
that certain Employment Agreement dated September 24, 2007 (the “Agreement”);

 

WHEREAS, the Bank and the Executive desire to amend certain
provisions of the Agreement in order to bring such provisions into compliance
with the applicable provisions of Section 409A of the Internal Revenue
Code of 1986, as amended (and guidance issued thereunder) (collectively
referred to herein as “Section 409A”);

 

WHEREAS, pursuant to Section 11(d) of the Agreement,
the Agreement may be amended in writing with the signature of each party; and

 

WHEREAS, the parties desire to amend the Agreement on the
terms hereinafter set forth.

 

NOW, THEREFORE, for good and valuable consideration, the
sufficiency of which is agreed and acknowledged by the parties hereto,
effective as of the Effective Date, the Agreement is amended to read as
follows:

 

AGREEMENTS

 

1.                                      The Agreement is amended by
labeling the provision of the Agreement entitled “Term with Automatic Renewal
Provisions” as “Section 1” and renumbering all subsequent sections of the
Agreement.

 

2.                                      Section 3(b) of the
Agreement is amended by adding the following sentence to the end thereof:

 

“The employee bonus payment
and the “Impact Group” bonus payment, if any, shall be paid as soon as
practicable, but in no event later than two and one-half (21⁄2) months following
the end of the year in which they are earned.”

 

3.                                      Section 4(a) of the Agreement
is amended by deleting the apostrophe in the term “coverages”.

 

 

4.                                      Section 4(c) of the Agreement
is amended by adding the following sentence to the end thereof:

 

“To the extent any dues
or expenses payable under this Section 4(c) are to be paid in the
form of a reimbursement to the Executive, such reimbursement shall be made as
soon as practicable, but in no event later than two and one-half (21⁄2) months
following the end of the year in which the corresponding dues or expenses are
incurred.”

 

5.                                      The last
sentence of Section 9(b) of the Agreement is amended in its entirety
and replaced with the following sentences:

 

“In the event of termination pursuant to this Section 9(b),
Executive shall be entitled to his Base Salary for what would have been the
remainder of the then-current term of this Agreement (less any amount described
in the next sentence of this Section 9(b)), which amounts shall be paid in
equal installments over what would have been the remainder of the term of this
Agreement pursuant to the Bank’s payroll schedule.  To the extent any portion of the payments
provided under this Section 9(b) exceeds the “safe harbor” amount
described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), the
Executive shall receive such portion of the amount due under this Section 9(b) that
exceeds the “safe harbor” amount in a single lump sum payment payable within
five (5) days after the Executive’s termination of employment.”

 

6.                                      Section 9(c) of
the Agreement is amended by adding the following sentence to the end thereof:

 

“Any
amounts due under this Section 9(c) shall be paid to the Executive,
or his estate in the event of his death, as soon as administratively
practicable following the Executive’s termination of employment.”

 

7.                                      A new sentence
is added to the end of Section 9(d) of the Agreement to read as
follows:

 

“Notwithstanding
the foregoing, if such Change of Control does not meet the definition of either
a “change in the ownership,” a “change in the effective control” or a “change
in the ownership of a substantial portion of the assets” of the Company under Section 409A
of the Code, or any successor thereto, payment will be made in the same form
and at the same time as under Section 9(b) to the extent required
under Code Section 409A.”

 

8.                                      The fifth
sentence of Section 9(e) of the Agreement is amended to read as
follows:

 

“In
the event that such opinions determine that there would be an excess parachute
payment, the payment hereunder or any other payment determined by such counsel
to be includable in Total Payments shall be modified, reduced or eliminated as
specified by the Executive in writing delivered to the Bank within

 

2

 

sixty
(60) days of his receipt of such opinions or, if the Executive fails to so
notify the Bank, then as the Bank shall reasonably determine, so that under the
bases of calculation set forth in such opinions there will be no excess
parachute payment; provided, however, that any such specification by Executive
or Bank shall not be effective where it would result in an imposition of any
additional income tax under Section 409A of the Code.”

 

9.                                      A new
subsection 9(f) is added to the Agreement to read as follows:

 

“(f)          Separation from Service Required. 
Notwithstanding any provision of this Agreement to the
contrary, no payment shall be due to Executive pursuant to this Section 9 as a result of his
termination of employment, whether such termination is at the election of Bank
or Executive, unless such termination of employment satisfies the definition of
a “separation from service” under Section 409A  of the Code.”

 

10.                               A new Section 13 is added to the
Agreement to read as follows:

 

“Section 13.  
Code Section 409A.

 

(a)                                 To the extent that any of
the terms and conditions contained herein which were modified by Amendment
Number 1 (the “Amendment”)  constitute an
amendment or modification of the time or manner of payment under a
non-qualified deferred compensation plan (as defined under Code Section 409A
(and the guidance issued thereunder) (collectively referred to herein as “Code Section 409A”)),
then to the extent necessary under the transitional guidance under Internal
Revenue Service Notice 2007-86, this Agreement, as amended by the Amendment,
constitutes an amendment to, and a new election under, such deferred
compensation plan, in order to properly modify the time or manner of payment
consistent with such guidance.

 

(b)                                 It is intended that the
Agreement shall comply with the provisions of Code Section 409A so as not
to subject Executive to the payment of additional taxes and interest under Code
Section 409A.  In furtherance of
this intent, this Agreement shall be interpreted, operated and administered in
a manner consistent with these intentions, and to the extent that any
regulations or other guidance issued under Code Section 409A would result
in the Executive being subject to payment of additional income taxes or
interest under Code Section 409A, the parties agree to amend the Agreement
to maintain, to the maximum extent practicable, the original intent of the
Agreement while avoiding the application of such taxes or interest under Code Section 409A.

 

(c)                                  Notwithstanding any
provision in the Agreement to the contrary if, as of the effective date of
Executive’s termination of employment, he is a

 

3

 

“Specified Employee,” then, only to the extent required pursuant to Section 409A(a)(2)(B)(i),
payments due under this Agreement which are deemed to be deferred compensation
shall be subject to a six (6) month delay following the Executive’s
separation from service.  For purposes of
Code Section 409A, all installment payments of deferred compensation made
hereunder, or pursuant to another plan or arrangement, shall be deemed to be
separate payments and, accordingly, the aforementioned deferral shall only
apply to separate payments which would occur during the six (6) month
deferral period and all other payments shall be unaffected.  All delayed payments shall be accumulated and
paid in a lump-sum catch-up payment as of the first day of the seventh-month
following separation from service (or, if earlier, the date of death of the
Executive) with all such delayed payments being credited with interest
(compounded monthly) for this period of delay equal to the prime rate in effect
on the first day of such six-month period. 
Any portion of the benefits hereunder that were not otherwise due to be
paid during the six-month period following the termination shall be paid to the
Executive in accordance with the payment schedule established herein.

 

(d)                                 The term “Specified Employee” shall mean any person
who is a “key employee” (as defined in Code Section 416(i) without
regard to paragraph (5) thereof), as determined by the Bank based upon the
12-month period ending on each December 31st (such 12-month period is
referred to below as the “identification period”).  If Executive is determined to be a key
employee under Code Section 416(i) (without regard to paragraph (5) thereof)
during the identification period he shall be treated as a Specified Employee
for purposes of this Agreement during the 12-month period that begins on the April 1
following the close of such identification period.  For purposes of determining whether Executive
is a key employee under Code Section 416(i), “compensation” shall mean
Employee’s W-2 compensation as reported by the Bank for a particular calendar
year.”

 

[Signature page to follow]

 

4

 

All other terms and
conditions of the Agreement remain in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above set forth.

 

 

	
  By:

  	
  /s/ Donald J. Harris

  	
   

  	
  /s/ Vince Easi

  
	
  Name:

  	
  Donald J. Harris

  	
   

  	
  Vince Easi

  
	
  Its:

  	
  EVP & Chief
  Operating Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  4495 E. 2551 Rd.

  
	
   

  	
   

  	
   

  	
  Leland, IL 60531

  
	
   

  	
   

  	
   

  	
  [Address]

  

 

5

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