Document:

exv10w1

Exhibit 10.1

FORM OF

NONEMPLOYEE DIRECTOR

NONQUALIFIED STOCK OPTION AGREEMENT

Under the Emisphere Technologies, Inc.

2007 Stock Award and Incentive Plan

     THIS AGREEMENT dated as of the first day of                     , 20     , between Emisphere Technologies,
Inc., a Delaware Corporation (the “Company”), and                      (the “Optionee”).

WITNESSETH:

     In consideration of the mutual promises and covenants made herein and the mutual benefits to
be derived herefrom, the parties hereto agree as follows:

     1. Grant of Stock Option.

     Subject to the provisions of this Agreement and to the provisions of the Emisphere
Technologies, Inc. 2007 Stock Award and Incentive Plan (the “Plan”), the Company hereby grants to
the Optionee as of                     , 20      (the “Grant Date”) the right and option (the “Stock Option”)
to purchase
                     shares of common stock of the Company, par value $.01 per share (“Common
Stock”), at the exercise price of $                     per share, the closing price of the Common Stock on
                    , 20     . The Stock Option shall be a Nonqualified Stock Option. Unless earlier terminated
pursuant to the terms of this Agreement, the Stock Option shall expire on the tenth anniversary of
the date hereof. Capitalized terms not defined herein shall have the meaning set forth in the
Plan.

     2. Exercisability of the Stock Option.

          (a) Vesting. Subject to the terms of this Agreement and the Plan, the Stock Option shall
become vested and exercisable with respect to:

	 	 	 
	Date	 	% of Grant (or number of Shares) Vested
	[first anniversary of grant]
	 	33.33%
	[second anniversary of grant]
	 	33.33%
	[third anniversary of grant]
	 	33.34%

Vesting of this Stock Option shall cease upon termination of the Optionee’s relationship with the
Company as a member of its Board of Directors (the “Business Relationship”). This Stock Option
shall remain exercisable through the expiration of the term of the Stock Option.

 

 

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          (b) Acceleration upon Change in Control. In the event of a Change in Control, any unvested
portions of this Stock Option shall immediately vest and remain exercisable for the remainder of
the originally scheduled term. For the purposes of this Agreement, a “Change in Control” means:
(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than any
individual, entity or group which, as of the date of this Agreement, beneficially owns more than
ten percent (10%) of the then outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of the then Outstanding Company Common Stock; provided, however,
that any acquisition by the Company or its subsidiaries, or any employee benefit plan (or related
trust) of the Company or its subsidiaries of 50% or more of Outstanding Company Common Stock shall
not constitute a Change in Control; and provided, further, that any acquisition by an entity with
respect to which, following such acquisition, more than 50% of the then outstanding equity
interests of such entity, is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock immediately prior to such acquisition of the Outstanding Company Common Stock,
shall not constitute a Change in Control; or (b) the consummation of (i) a reorganization, merger
or consolidation (any of the foregoing, a “Merger”), in each case, with respect to which all or
substantially all of the individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock immediately prior to such Merger do not, following such Merger, beneficially
own, directly or indirectly, more than 50% of the then outstanding shares of common stock of the
corporation resulting from Merger, or (ii) the sale or other disposition of all or substantially
all of the assets of the Company, excluding (a) a sale or other disposition of assets to a
subsidiary of the Company; and (b) a sale or other disposition of assets to any individual, entity
or group which, as of the date of this Agreement, beneficially owns more than ten percent (10%) of
the then Outstanding Company Common Stock.

     3. Method of Exercise of the Stock Option.

          (a) The portion of the Stock Option as to which the Optionee is vested shall be exercisable by
delivery to the Company of a written or electronic notice stating the number of whole shares to be
purchased pursuant to this Agreement and accompanied by payment of the full purchase price of the
shares of Common Stock to be purchased. Fractional share interests shall be disregarded except
they may be accumulated.

          (b) The exercise price of the Stock Option shall be paid: (i) in cash or by certified check or
bank draft payable to the order of the Company; (ii) by exchange of shares of unrestricted Common
Stock of the Company already owned by the Optionee (that have been held by the Optionee for six (6)
months prior to exercise or which were acquired in the open market) and having an aggregate fair
market value equal to the aggregate purchase price; provided, that, the Optionee
represents and warrants to the Company that the Optionee has held the shares of Common Stock free
and clear of

 

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liens and encumbrances and has held the shares for at least six (6) months prior to exercise
or that such shares were acquired in the open market; or (iii) by any other procedure approved by
the Committee, or by a combination of the foregoing.

     4. Termination of Business Relationship Other Than Due to Death or Disability.

          (a) Except as provided in Section 5 below with regard to the Optionee’s termination of its
Business Relationship due to death or Disability, in the event of the Optionee’s termination of
its Business Relationship, the portion of the Stock Option, if any, which is exercisable at the
time of such termination may be exercised prior to the expiration date of the Stock Option.

          (b) Nothing in this Agreement or the Plan shall confer upon the Optionee any right to continue
in the Business Relationship with the Company or any of its subsidiaries or affiliates or interfere
in any way with the right of the Company or any such subsidiaries or affiliates to terminate the
Optionee’s Business Relationship at any time.

     5. Death or Disability of Optionee.

     In the event of the Optionee’s termination of employment and/or service due to death (or, in
the event of the Optionee’s death following termination of the Business Relationship while the
Stock Option remains exercisable) the portion of the Stock Option, if any, which is exercisable at
the time of death may be exercised by the Optionee’s estate or by a person who acquired the right
to exercise such Stock Option by bequest or inheritance or otherwise by reason of the death of the
Optionee at any time prior to the expiration date of the Stock Option. In the event of the
Optionee’s termination of employment and/or service due to Disability, the portion of the Stock
Option, if any, which is exercisable at the time of such termination of employment and/or service
for Disability may be exercised by the Optionee or the Optionee’s guardian or legal representative
at any time prior to the expiration date of the Stock Option.

     6. Transferability of the Stock Option.

     The Stock Option is non-transferable by the Optionee other than by will or the laws of descent
and distribution or pursuant to a qualified domestic relations order, and the Stock Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or by the Optionee’s guardian
or legal representative or any transferee described above.

     7. Rights as a Stockholder.

     An Optionee or a transferee of the Stock Option shall have no rights as a stockholder with
respect to any shares covered by such Stock Option until the date when his or her purchase is
entered upon the records of the duly authorized transfer agent of the Company. No adjustment shall
be made for dividends (ordinary or

 

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extraordinary, whether in cash, securities or other property) or distribution of other rights
for which the record date is prior to the date a stock certificate is issued, except as provided in
the Plan.

     8. Adjustment in the Event of Change in Stock.

     In the event of any change in corporate capitalization (including, but not limited to, a
change in the number of shares of Common Stock outstanding), such as a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock , or any other increase
or decrease in the number of issued shares of Common Stock effected without receipt of
consideration by the Company, the number and kind of shares subject to the Stock Option and/or the
exercise price per share will be appropriately adjusted by the Committee consistent with such
change and consistent with adjustments made under the Plan for other Plan participants who have an
outstanding Stock Option. The determination of the Committee regarding any adjustment will be
final and conclusive.

     9. Payment of Transfer Taxes, Fees and Other Expenses.

     The Company agrees to pay any and all original issue taxes and stock transfer taxes that may
be imposed on the issuance of shares acquired pursuant to exercise of the Stock Option, together
with any and all other fees and expenses necessarily incurred by the Company in connection
therewith. Notwithstanding the foregoing, the Optionee shall be solely responsible for any other
taxes (including, without limitation, federal, state, local or foreign income, social security,
estate or excise taxes) that may be payable as a result of the Optionee’s participation in the Plan
or as a result of the exercise of the Stock Option and/or the sale, disposition or transfer of any
shares of Common Stock acquired upon the Optionee’s exercise of the Stock Option.

     10. No Guarantee of Continued Service.

     OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE
HEREOF IS EARNED ONLY BY CONTINUING THE BUSINESS RELATIONSHIP.

     11. Other Restrictions.

     The exercise of the Stock Option shall be subject to the requirement that, if at any time the
Committee shall determine that (i) the listing, registration or qualification of the shares of
Common Stock subject or related thereto upon any securities exchange or under any state or federal
law, or (ii) the consent or approval of any government regulatory body or (iii) an agreement by the
Optionee with respect to the disposition of shares of Common Stock is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase of shares pursuant
thereto, then in any such event, such exercise shall not be effective unless such listing,

 

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registration, qualification, consent, or approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.

     The Company may, but will in no event be obligated to, register any securities issuable upon
the exercise of all or any portion of the Stock Option pursuant to the Securities Act of 1933 (as
now in effect or as hereafter amended) or to take any other affirmative action in order to cause
the exercise of the Stock Option or the issuance of shares pursuant thereto to comply with any law
or regulation of any governmental authority. The certificates representing shares issued to
Optionee hereunder shall bear such legends as Company determines appropriate referring to
restrictions on the transfer of such shares imposed by this Agreement and such other legends as are
required or appropriate under applicable law.

     12. Taxes and Withholding.

     No later than the date of exercise of the Stock Option granted hereunder, the Optionee shall
pay to the Company or make arrangements satisfactory to the Committee regarding payment of any
federal, state or local taxes of any kind required by law to be withheld upon the exercise of such
Stock Option and the Company shall, to the extent permitted or required by law, have the right to
deduct from any payment of any kind otherwise due to the Optionee, federal, state and local taxes
of any kind required by law to be withheld upon the exercise of such Stock Option. The Optionee
should consult with a tax advisor before exercising this Stock Option or disposing of the Shares to
obtain advice as to the consequences of such exercise or disposition.

     13. Notices.

     All notices and other communications under this Agreement shall be in writing and shall be
given by hand delivery to the other party or by facsimile, overnight courier, or registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Optionee:

If to the Company:

Emisphere Technologies, Inc.

240 Cedar Knolls Road

Cedar Knolls, New Jersey 07927

Attn: Michael Garone

     or to such other address or facsimile number as any party shall have furnished to the other in
writing in accordance with this Section 13. Notice and communications shall be effective when
actually received by the addressee.

 

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     14. Effect of Agreement.

     Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure
to the benefit of any successor or successors of the Company, and to any transferee or successor of
the Optionee pursuant to Section 7.

     15. Laws Applicable to Construction.

     The interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of Delaware without reference to principles of conflict of laws, as applied to
contracts executed in and performed wholly within the State of Delaware.

     16. Severability.

     The invalidity or enforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement. If the final judgment of a
court of competent jurisdiction declares that any provision of this Agreement is invalid or
unenforceable, the parties hereto agree that the court making the determination of invalidity or
unenforceability shall have the power, and is hereby directed, to reduce the scope, duration or
area of the provision, to delete specific words or phrases and to replace any invalid or
unenforceable provision with a provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable provision and this Agreement shall be
enforceable as so modified.

     17. Conflicts and Interpretation.

     This Agreement is subject to all the terms, conditions and provisions of the Plan. In the
event of any conflict between this Agreement and the Plan, the Plan shall control. In the event of
any ambiguity in this Agreement, any term which is not defined in this Agreement, or any matters as
to which this Agreement is silent, the Plan shall govern including, without limitation, the
provisions thereof pursuant to which the Committee has the power, among others, to (i) interpret
the Plan, (ii) prescribe, amend and rescind rules and regulations relating to the Plan and (iii)
make all other determinations deemed necessary or advisable for the administration of the Plan.

     18. Headings.

     The headings of Sections herein are included solely for convenience of reference and shall not
affect the meaning or interpretation of any of the provisions of this Agreement.

     19. Amendment.

     This Agreement may not be modified, amended or waived except by an instrument in writing
signed by both parties hereto. The waiver by either party of compliance with any provision of this
Agreement shall not operate or be construed as a

 

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waiver of any other provision of this Agreement, or of any subsequent breach by such party of
a provision of this Agreement.

     20. Term.

     The term of this Agreement is ten years from the date of grant, unless terminated prior to
such date in accordance with the provisions herein.

     21. Counterparts.

     This Agreement may be executed in counterparts, which together shall constitute one and the
same original.

 

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     IN WITNESS WHEREOF, as of the date first above written, the Company has caused this Agreement
to be executed on its behalf by a duly authorized officer and the Optionee has hereunto set the
Optionee’s hand.

	 	 	 	 	 
	 	EMISPHERE TECHNOLOGIES, INC.

 	 
	 	
 	 
	 	By:        [                    ] 	 
	 	Title:  	[                    ] 	 
	 
	 	 	 
	 	
 	 
	 	Optioneeexv10w01

Exhibit 10.01

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”), is made and entered into as of May 15,
2009 (the “Effective Date”) by and between Midwest Banc Holdings, Inc. (the “Company”),
and Jay Fritz (the “Employee,” and together with the Company, the “Parties”).

     WHEREAS, the Employee currently is serving as the President and Chief Executive Officer of the
Company, pursuant to that certain employment agreement, amended and restated as of February 8,
2006, and amended as of March 12, 2008 (the “Prior Agreement”);

     WHEREAS, the Company desires to continue to employ the Employee, and the Employee desires to
continue to be employed by the Company; and

     WHEREAS, the Parties desire to enter into a new employment agreement which shall fully
supersede in its entirety the Prior Agreement.

     NOW, THEREFORE, in consideration of the premises and of the covenants and agreements
hereinafter contained, it is covenanted and agreed by and between the Parties hereto as follows:

Terms and Conditions

     1. Employment Term. The term of this Agreement shall commence on the Effective Date
and end on the third anniversary of the Effective Date (the “Term”). This Agreement is subject to
earlier termination as provided herein.

     2. Duties and Responsibilities. The Company agrees to continue to employ the Employee
as Senior Executive Vice President of the Company focusing on executive management transition, new
business development and client retention, and the Employee agrees to serve in such role and to
perform the services and functions relating to such position or otherwise reasonably incident to
such position. The Parties agree and acknowledge that this position shall be a non-officer and
non-policy making function for the Company. The Employee shall be subject to the direction and
supervision of the Chief Executive Officer of the Company. Unless otherwise agreed to by the
Parties, the Employee shall provide the foregoing services from the Company’s location in
Inverness, Illinois. Notwithstanding the foregoing, during the Term, the Employee may devote
reasonable time to activities other than those required under this Agreement, including activities
of a charitable, educational, religious or similar nature (including professional associations) to
the extent such activities do not, in the reasonable judgment of the Chief Executive Officer of the
Company, inhibit, prohibit, interfere with or conflict with the Employee’s duties under this
Agreement. The Employee shall resign from any and all officer or fiduciary positions and titles
with the Company and any of its affiliates as of the Effective Date and shall resign as a member of
the board of directors of the Company (the “Board”) and the board of directors of any of its
affiliates, effective May 15, 2009.

 

 

     3. Compensation. As compensation for his services under the terms of this Agreement,
the Employee shall receive from the Company an annual base salary of $331,500 per year, payable in
equal semi-monthly installments (the “Base Salary”), subject to the Company’s normanl payroll
practices. The Employee may also receive an annual incentive bonus and shall be eligible to
participate in the Company’s equity incentive plan, both in the sole and absolute discretion of the
Board.

     4. Fringe Benefits. The Company shall furnish to the Employee such benefit programs
which are currently furnished to executives of the Company, including life insurance, health and
medical insurance and retirement and savings plans and other perquisites and programs, as such
plans, perquisites and programs may be amended from time to time. The Company shall provide
Company-paid health insurance coverage, to be no less comprehensive than the health insurance
coverage provided to all other employees, for the Employee and his spouse until such time as the
Employee and his spouse reach age sixty-five (65) or such later date as necessary for Medicare
eligibility. The Company will pay for or reimburse the Employee for reasonable dues and
membership expenses in the Inverness Country Club. The Company will provide the Employee with an
automobile and related expenses pursuant to the Company’s automobile policy applicable to senior
management.

     5. Supplemental Retirement Plan. As of the Effective Date, by execution of this
Agreement, the term “Benefit Percentage” as defined and used under the Supplemental Executive
Retirement Agreement (the “SERP”) shall be increased from thirty percent (30%) to thirty-five
percent (35%), without the need for a separate amendment of the SERP. The Executive agrees that,
for purposes of this Agreement and the SERP, that a sale by the Company of equity or instruments
convertible into equity during the twelve (12) month period following the Effective Date shall not
constitute a Change-in-Control.

     6. Business Expenses. The Employee shall be reimbursed by the Company, on terms and
conditions that are substantially similar to those that apply to other employees of the Company,
for reasonable out-of-pocket expenses which are consistent with the Company’s expense reimbursement
policy and actually incurred by the Employee in the promotion of the Company’s business. Such
reimbursement payments will be made in accordance with the Company’s expense reimbursement policy,
but in no event later than two and one-half (21/2) months following the end of the year in which the
corresponding expenses are incurred.

     7. Termination of Employment.

          (a) Termination by Company other than for Cause. In the event that the Employee’s
employment is terminated by the Company during the Term, unless such termination by the Company is
for Cause (as defined herein), the Employee shall continue receive the compensation and benefits as
provided in Sections 3 and 4 of the Agreement for the balance of the Term, without regard to
Employee’s continued service. The schedule for the time of the salary payments will be the same
schedule as the time for receiving salary payments during the period of the Employee’s employment.
Similarly, the form of the payment shall be the same form as the Employee was receiving during the
period of the Employee’s employment. The schedule for the time and form of payment are fixed as
provided herein and may not be modified by the Employee or the Company without compliance with
Section 409A of the

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Internal Revenue Code (the “Code”). All other rights and benefits that the Employee may have
under any benefit plans or programs of the Company shall be determined in accordance with the terms
and conditions of such plans or programs based upon the date of the Employee’s actual termination
of employment with the Company.

          (b) For Cause. Nothing herein shall prevent the Company from terminating the Employee
for Cause, in which event the Company shall have no obligation to make any payment to the Employee
under this Agreement other than an amount equal to his Base Salary on a prorated basis to the date
of termination. All other rights and benefits that the Employee may have under any benefit plans
or programs of the Company shall be determined in accordance with the terms and conditions of such
plans or programs based upon the date of the Employee’s actual termination of employment with the
Company. For purposes of this Agreement, “Cause” means, based upon the good faith determination of
the Board, one of the following to occur: (i) the Employee’s conviction of, or the pleading of nolo
contendre to, a crime of embezzlement, fraud or a felony under the laws of the United States or any
state thereof; (ii) the Employee’s breach of a fiduciary responsibility to the Company; (iii) a
material violation by the Employee of any applicable material law or regulation respecting the
business of the Company; (iv) an act of dishonesty by the Employee which is materially and
demonstrably injurious to the Company, or (v) a violation or breach of Sections 8 or 8(a) of this
Agreement which is injurious to the Company. The Employee shall be entitled to at least thirty
(30) days’ prior written notice of the Company’s intention to terminate the Employee’s employment
for Cause specifying the grounds for such termination, a reasonable opportunity to cure any conduct
or act, if curable, alleged as grounds for such termination, and a reasonable opportunity to
present to the Board his position regarding any dispute relating to such termination.

          (c) Disability. In the event the Employee suffers from a “Disability” (as hereinafter
defined), the Employee’s employment with Company shall terminate on the date on which the
Disability occurs, but the Employee shall continue to receive the Base Salary for a period of
ninety (90) days from the date of termination and Company-paid health insurance coverage as
described in Section 4 above for the Employee and his spouse (if the Employee is married on the
date of termination) until the Employee and his spouse reach age sixty-five (65) or such later age
as necessary for Medicare eligibility. The schedule for the time of the salary payments and the
in-kind health insurance coverage will be the same schedule as the time for receiving salary
payments and the in-kind health insurance coverage during the period of the Employee’s employment.
Similarly, the form of the payment shall be the same form as the Employee was receiving during the
period of the Employee’s employment. The schedule for the time and form of payment are fixed as
provided herein and may not be modified by the Employee or the Company without compliance with
Section 409A of the Code. In no event may the Company substitute cash or cash equivalents for the
Company-paid health insurance coverage. All other rights and benefits that the Employee may have
under any benefit plans or programs of the Company shall be determined in accordance with the terms
and conditions of such plans or programs based upon the date of the Employee’s actual termination
of employment with the Company. For purposes of this Agreement, “Disability” shall mean the
inability or incapacity (by reason of a medically determinable physical or mental impairment) of
the Employee to perform the duties and responsibilities related to the job or position with the
Company described in Section 2 of this Agreement for a period that lasts, or can reasonably be
expected to last, more than 180 days. Such inability or incapacity shall be documented to the

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reasonable satisfaction of the Company by the appropriate correspondence from registered
physicians reasonably satisfactory to the Company, and the Employee agrees to submit to an
examination by the Company’s physicians for the purpose of making such determination.

          (d) Death. In the event of the death of the Employee, the Employee’s employment with
Company shall terminate on the date of death. The estate or named beneficiary of the Employee
shall continue to receive the Base Salary for a period of ninety (90) days from the date of
termination. If the Employee is married at the date of termination, the Employee’s spouse shall
receive Company-paid health insurance coverage to be determined by the Company until the spouse
remarries or reaches age sixty-five (65) or such later age as necessary for Medicare eligibility.
The schedule for the time of the salary payments and the in-kind health insurance coverage will be
the same schedule as the time for receiving salary payments and the in-kind health insurance
coverage during the period of the Employee’s employment. Similarly, the form of the payment shall
be the same form as the Employee was receiving during the period of the Employee’s employment. The
schedule for the time and form of payment are fixed as provided herein and may not be modified by
the Employee or the Company without compliance with Section 409A of the Code. In no event may the
Company substitute cash or cash equivalents for the Company-paid health insurance coverage. All
other rights and benefits that the Employee (or his estate or named beneficiary) may have under any
benefit plans or programs of the Company shall be determined in accordance with the terms and
conditions of such plans or programs based upon the date of the Employee’s actual termination of
employment with the Company on the date of death.

          (e) Termination by Employee. In the event that the Employee resigns from or otherwise
terminates his employment prior to the end of the Term, the Company shall have no obligation to
make any payment to the Employee under this Agreement other than an amount equal to his Base Salary
on a prorated basis to the date of termination of employment. All other rights and benefits that
the Employee may have under any benefit plans or programs of the Company shall be determined in
accordance with the terms and conditions of such plans or programs based upon the date of the
Employee’s actual termination of employment with the Company.

     8. Non-Competition; Non-Solicitation.

          (a) General. The Employee covenants that during the period commencing on the
Effective Date and ending on the one-year anniversary of the last day on which the Employee
receives a timely payment of Base Salary (as provided in Section 3 or Section 7) (the “Restriction
Period”), regardless of employment status, or the termination thereof for any reason, he shall not:
(i) directly or indirectly participate or engage in management or operational aspects of, or
acquire a financial interest in, any bank or financial institution within fifty (50) miles of any
then-existing facility of the Company; (ii) directly or indirectly, on behalf of any business other
than the Company, engage or assist in offering employment to or encourage the departure of an
employee of the Company; or (iii) directly or indirectly solicit or assist in the solicitation of
any customer of the Company for the purpose of providing banking or financial services from any
business other than Company or (iv) disparage the Company publicly or to any person or entity with
which the Company has a present or prospective business relationship. The foregoing restrictions
set forth in subsections (i) and (iii) above shall be limited to “commercial

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banking” and shall not preclude Employee’s activities or investments in, among other things,
the commercial insurance industry. The time period for the covenants contained herein shall not
begin or continue to run for any period during which the Employee is in breach of any of the
covenants set forth herein.

          (b) Effectiveness of Restrictions. Notwithstanding the foregoing provisions of this
Section 8, in the event that the Company does not provide the benefits or payments as set forth by
this Agreement or the SERP, as and when required herein and therein, whether due to the limitations
of Section 21 or otherwise (but not due to the limitations of Section 24), the foregoing
non-competition and non-solicitation restrictions shall have no force or effect for any period
following Employees’ termination of employment, for any reason. If such payments are suspended
solely due to the application of Section 21, the period of inapplicability shall correspond to the
period during which payments are not being made; provided, however, that in no event will this
provision cause the restrictive covenants to apply to any period beyond the original Restriction
Period.

     9. Confidential information. The Employee further covenants that during his
employment and thereafter, the Employee shall not use or disclose (except in the performance of his
duties hereunder) any trade secrets or other confidential information of the Company, except to the
extent required by order of a court or governmental agency to the extent that such disclosure is
made under seal or with sufficient notice to the Company so as to allow the Company to seek a
protective order. Notwithstanding anything in this Agreement to the contrary, if the Employee
violates any of the provisions of this Section 8(a) or the preceding Section 8, in addition to all
appropriate legal and equitable remedies, the Company shall have no further payment obligations
under this Agreement.

     10. Notices. All notices, requests, demands and other communications given under or
by reason of this Agreement shall be in writing and shall be deemed given when delivered in person
or mailed by certified mail (return receipt requested), postage prepaid, addressed as follows (or
to such other address as a party may specify by notice pursuant to this provision):

          (a) If to the Company, addressed to it at:

Midwest Banc Holdings, Inc.

Chairman of the Compensation Committee

501 W. North Avenue

Melrose Park, IL 60160

with a copy to

Midwest Banc Holdings, Inc.

Chief Executive Officer

501 W. North Avenue

Melrose Park, IL 60160

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          (b) If to the Employee, addressed to his attorney at:

Donald L. Norman, Esq.

Barack Ferrazzano Kirschbaum & Nagelberg, LLC

200 W. Madison Street, Suite 3900

Chicago, IL 60606

     11. Controlling Provisions. The Parties agree and acknowledge that the restrictive
covenants contained in Section 8 shall control in the event of similar or conflicting
non-competition or non-solicitations provisions contained in any other agreement, plan, program or
arrangement (including the SERP), otherwise applicable to Employee.

     12. Survival of Provisions. The provisions of Sections 8 or 9 of this Agreement shall
survive the termination of the Employee’s employment with the Company and the expiration or
termination of this Agreement.

     13. Controlling Law. The execution, validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the State of Illinois.

     14. Entire Agreement; Amendments; Waivers. This Agreement contains the entire
agreement between the Employee and the Company relating to the matters contained herein and
supercedes all prior agreements and understandings, oral or written, between the Employee and the
Company with respect to the subject matter hereof unless otherwise expressly provided herein;
provided, however, that this Agreement does not supersede or terminate the SERP, except as
expressly provided herein. This Agreement may be amended, modified or supplemented, but only in
writing signed by each of the parties hereto. Any terms of this Agreement may be waived only with
the written consent of the party sought to be bound, and the waiver by either party to this
Agreement of a breach of any provision of the Agreement by the other party shall not operate or be
construed as a waiver by such party of any subsequent breach by such other party.

     15. Reformation and Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified in such a manner
as to be valid, legal and enforceable but so as to most nearly retain the intent of the parties.
If such modification is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining provisions of this Agreement
shall not in any way be affected or impaired thereby.

     16. Assignments. The Company may assign this Agreement to any affiliate of the
Company or any person or entity succeeding to all or substantially all of the business interests of
the Company by merger or otherwise. The rights and obligations of the Employee under this
Agreement are personal to him, and no such rights, benefits or obligations shall be subject to
voluntary or involuntary alienation, assignment or transfer, except as otherwise expressly
contemplated in this Agreement.

     17. Effect of Agreement. Subject to the provisions of Section 16 of the Agreement
with respect to assignments, this Agreement shall be binding upon the Employee and his heirs,

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executors, administrators, legal representatives and assigns and upon the Company and its
respective successors and assigns, except as otherwise expressly contemplated in this Agreement.

     18. Injunctive Relief. The Employee understands and agrees that monetary damages may
not be an adequate remedy for the breach of this Agreement, including but not limited to the
covenants in Sections 8 or 9, and that the Company has the right to seek equitable relief including
injunction and specific performance and any other appropriate equitable or legal relief for the
enforcement of his obligations hereunder.

     19. Exercise of Rights and Remedies. The rights and remedies in this Agreement shall
not be exclusive, but are intended to be cumulative with all other rights and remedies of the
Company, whether under this Agreement, any other agreement, law or otherwise. No delay of or
omission in the exercise of any right, power or remedy accruing to any party as a result of any
breach or default by any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or
of any similar breach or default occurring later.

     20. Execution. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all which together shall constitute but one and the same
instrument.

     21. Regulatory Restrictions.

          (a) Section 111(b) of the Emergency Economic Stabilization Act of 2008 (the “EESA”) and the
rules and regulations promulgated thereunder and as amended by Section 7001 of the American
Recovery and Reinvestment Act of 2009 and the rules and regulations to be promulgated thereunder
(the “ARRA”) impose certain prohibitions on payment of executive compensation by a financial
institution during periods in which it participates in the Troubled Asset Relief Program or the
Capital Purchase Program, each as promulgated under the EESA as revised under ARRA (collectively,
the “EESA Programs”). Because of the Company participation in the EESA Programs, the Parties agree
to amend this Agreement if, and as may be, required by the regulatory guidance issued pursuant to
the EESA and the ARRA. In this regard, the Agreement, as amended, shall impose the minimum level
of limitations on payments under this Agreement as are required to permit the Company to comply
with the limitations on executive compensation under the EESA Programs.

          (b) If any amounts or benefits due or payable pursuant to this Agreement are not payable
during the period the Company participates in the EESA Programs, as provided in subsection (a), the
Company’s obligations hereunder, absent such restrictions, shall continue, and all payments and
benefits which would otherwise have been paid or provided shall be immediately paid and provided as
soon as legally permissible; provided, however, the Company shall not be obligated to make such
payments or provide such benefits if it is prohibited from doing so by EESA or ARRA or the rules
and regulations issued, or to be issued, thereunder.

          (c) Notwithstanding anything herein to the contrary, the Parties acknowledge and agree that
the foregoing provisions of this Section 21 are not intended to, and shall not,

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constitute an expansion of the waiver executed by the Employee with respect to the Company’s
original participation in the EESA Programs. Accordingly, if the limitations set forth herein are
in excess of those which have been previously waived by Employee, the Employee shall not be deemed
to have waived a claim of right to such payment or obligations, if the Company is otherwise limited
under the EESA Programs from paying or providing such benefits.

     22. Indemnification. In the event that legal action is instituted against the
Employee during or after the Term by a third party (or parties) based on the performance or
nonperformance by Employee of his duties as an employee, officer or director of the Company or any
of its affiliates or a fiduciary of any benefit plan maintained by the Company or any of its
affiliates during his employment with the Company, the Company, its successors and predecessors or
their affiliates (collectively, the “Indemnifying Party”), the Indemnifying Party will assume the
defense of such action by its attorney or attorneys selected by the Indemnifying Party and will
advance the costs and expenses thereof (including reasonable attorneys’ fees) and will indemnify
the Employee against any judgment or amounts paid in settlement of said actions in accordance with
its charter, by-laws, insurance and applicable law, without prejudice to or waiver by the
Indemnifying Party of its rights and remedies against Employee. In the event that there is a
settlement or final judgment entered against Employee in any such litigation, and the Indemnifying
Party’s board of directors determines that Employee should, in accordance with the Indemnifying
Party’s charter, by-laws, insurance and applicable law, reimburse the Indemnifying Party, Employee
shall be liable to the Indemnifying Party for all such costs, expenses, damages and other amounts
paid or incurred by the Indemnifying Party in the defense, settlement or other resolution of any
such litigation (the “Reimbursement Amount”). The Reimbursement Amount shall be paid by Employee
within thirty (30) days after rendition of the final judgment. The Indemnifying Party shall be
entitled to set off the reimbursement amount against all sums which may be owed or payable by the
Indemnifying Party to Employee hereunder or otherwise. The parties shall cooperate in the defense
of any asserted claim, demand or liability against Employee or the Indemnifying Party or its
subsidiaries or affiliates. 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 22
shall be in addition to any rights which Employee may now or hereafter have under the charter or
By-Laws of the Indemnifying Party or any of its affiliates, under any insurance contract maintained
by the Indemnifying Party or any of its affiliates or any agreement between Employee and the
Indemnifying Party or any of its affiliates.

     23. Legal Fees. The Company shall pay reasonable legal fees for the drafting and
negotiating of this Agreement directly to the law firm of Barack Ferrazzano Kirschbaum & Nagelberg,
LLP (the “Firm”), with such payment to be made within fifteen (15) calendar days following the
Effective Date. The payment of such fees shall be reflected on an IRS Form 1099 designating the
Firm as the payee and the Company as the payor.

     24. Restriction on Timing of Distributions. Notwithstanding any provision of this
Agreement to the contrary, if the Employee is considered a Specified Employee (as defined herein),
the provisions of this Section 24 shall govern all distributions hereunder. If benefit

8

 

distributions which would otherwise be made to the Employee due to a termination of employment
are limited because the Employee is a Specified Employee, then such distributions shall not be made
during the first six (6) months following termination of employment. Rather, any distribution
which would otherwise be paid to the Employee during such period shall be accumulated (without the
adjustment for the time value of money) and paid to the Employee in a lump sum on the first day of
the seventh month following termination of employment. All subsequent distributions shall be paid
in the manner specified. The term “Specified Employee” means an employee who, as of the date of
the employee’s termination of employment, is a key employee of the Company. Notwithstanding the
foregoing, an employee is a Specified Employee only if the stock of the Company or any entity with
whom the Company would be considered a single Company under Section 414(b) or Section 414(c) of the
Code is publicly traded on an established securities market or otherwise. For purposes of this
Agreement, an employee is a key employee if the employee meets the requirements of Section
416(i)(1)(A)(i), (ii), or (iii) of the Code (applied in accordance with the regulations thereunder
and disregarding Section 416(i)(5)) at any time during the twelve (12) month period ending on
December 31 (the “identification period”). For purposes of identifying a Specified Employee, the
definition of compensation under Treasury Regulation Section 1.415(c)-2(a) is used, applied as if
the Company were not using any safe harbor provided in Treasury Regulation Section 1.415(c)-2(d),
were not using any of the special timing rules provided in Treasury Regulation Section
1.415(c)-2(e), and were not using any of the special rules provided in Treasury Regulation Section
1.415(c)-2(g). If the Employee is a key employee during an identification period, the Employee is
treated as a key employee for purposes of this Agreement during the twelve (12) month period that
begins on the first day of April following the close of the identification period.

(Signature page to follow)

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     IN WITNESS WHEREOF, the Employee and the Company have executed this Agreement effective as of
the Effective Date.

	 	 	 	 	 	 
	Midwest Banc Holdings, Inc.	 	 
	 
	By:  

	 		 	 
	 

	 	 	 
	 

	 	 	 	Jay Fritz
	 
	Its:  	 	 	 

10

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