OMNIBUS AMENDMENT AGREEMENT
Exhibit 10.3
This Omnibus Amendment Agreement, dated as of January , 2009 (the “Agreement”), is
entered into by and between (the “Executive”) and Princeton National Bancorp,
Inc. (the “Company”).
WHEREAS, the Executive is, or may in the future be, a Senior Executive Officer of the Company,
as defined in subsection 111(b)(3) of the Emergency Economic Stabilization Act of 2008 (the “EESA”)
and regulations issued thereunder, including the rules set forth in 31 C.F.R. Part 30 (a “Senior
Executive Officer”); and
WHEREAS, in connection with the purchase by the United States Department of the Treasury (the
“Treasury”) of certain preferred shares and warrants of the Company (the “Purchased Securities”),
pursuant to a Letter Agreement and a Securities Purchase Agreement, between the Treasury and the
Company (the “Purchase Agreement”), the Company is required to meet certain executive compensation
and corporate governance standards under Section 111(b) of the EESA, as implemented by guidance or
regulation thereunder that has been issued and is in effect as of the Closing Date (as defined in
the Purchase Agreement) (such guidance or regulation being hereinafter referred to as the “CPP
Guidance”); and
WHEREAS, as a condition to the Closing (as defined in Section 1.2(a) of the Securities
Purchase Agreement), Section 1.2(d)(iv)(A) thereof provides that the Company is required to have
effected such changes to its compensation, bonus, incentive and other benefit plans, arrangements
and agreements (including golden parachute, severance and employment agreements) (collectively, the
“Compensation and Benefit Arrangements”) with respect to its Senior Executive Officers (and to the
extent necessary for such changes to be legally enforceable, each of its Senior Executive Officers
shall have duly consented in writing to such changes), as may be necessary, during the period that
Treasury owns any Purchased Securities, in order to comply with Section 111(b) of the EESA as
implemented by guidance or regulation thereunder that has been issued and is in effect as of the
Closing Date; and
WHEREAS, in consideration for the benefits the Executive will receive as a result of the
participation of the Company in the Treasury’s TARP Capital Purchase Program, the Executive desires
to modify the Executive’s Compensation and Benefit Arrangements to the extent necessary to comply
with Section 111(b) of the EESA, the CPP Guidance and the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the covenants set forth herein, the
Executive and the Company hereby agree as follows:
| 1. | Amendments to the Compensation and Benefit Arrangements. Effective as of the date hereof (to the extent the Executive is a Senior Executive Officer for the 2009 calendar year) or effective as of any calendar year commencing on or after January 1, 2009, if any, as to which the Executive shall in the future be a Senior |
| Executive Officer and any Purchased Securities are owned by the Treasury, the Executive’s Compensation and Benefit Arrangements are hereby amended by this Agreement during such and any subsequent periods as necessary to comply with the executive compensation and corporate governance requirements of Section 111(b) of the EESA and the CPP Guidance, and the provisions of Sections 1.2(d)(iv), 1.2(d)(v) or 4.10 of the Purchase Agreement, including as follows: |
| a. | In the event that any payment or benefit to which the Executive is or may become entitled under the Compensation and Benefit Arrangements is a “golden parachute payment” for purposes of Section 111(b) of the EESA and the CPP Guidance, including the rules set forth in § 30.9 Q-9 of 31 C.F.R. Part 30, (i) the Company shall not make or provide (nor shall the Company be obligated to make or provide), during the period that the Treasury owns any Purchased Securities, such payment or benefit to the Executive, and (ii) the Executive shall not be entitled to receive, during the period that the Treasury owns the Purchased Securities, such payment or benefit. | ||
| b. | Any bonus or incentive compensation paid to the Executive during the period that the Treasury owns the Purchased Securities will be subject to recovery or “clawback” by the Company or its affiliates if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, all within the meaning of Section 111(b) of the EESA and the CPP Guidance. | ||
| c. | In the event that the Executive and Compensation Committee of the Board of Directors of the Company determines that any incentive compensation arrangement pursuant to which the Executive is or may be entitled to a payment encourages the Executive to take unnecessary and excessive risks that threaten the value of the financial institution within the meaning of §30.9 Q-4 of 31 C.F.R. Part 30, the Committee, on behalf of the Company, shall take such action as is necessary to amend such incentive compensation arrangements to eliminate such encouragement, and the Executive’s incentive compensation will be determined pursuant to such amended arrangements. |
| 2. | Miscellaneous. |
| a. | The Executive’s execution of this Agreement shall not be determinative of the Executive’s status as a Senior Executive Officer. | ||
| b. | This Agreement shall be void and without effect ab initio if the Closing (as defined in the Purchase Agreement) of the transactions contemplated by the Purchase Agreement does not occur. |
| c. | This Agreement may be executed in one or more counterparts, each of which when executed shall be an original, but all of which when taken together shall constitute one and the same agreement. | ||
| d. | This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Illinois. |
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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly authorized
representative and the Executive has hereunto set his hand as of the day and year first above
written.
| EXECUTIVE | PRINCETON NATIONAL BANCORP, INC. | |||||||
| By: | ||||||||
| Name: Xxxx X. Xxxxxx Title: President and CEO |
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