EMPLOYMENT AGREEMENT
EXHIBIT
10.23
THIS
AGREEMENT (this “Agreement”) is made and entered into as of this 25th day of
August, 2006 by and between MB Financial, Inc. (the “Corporation”) and Xxxxxxx
X. Xxxxxx, Xx. (the “Executive”).
WHEREAS,
the Executive is the President and Chief Executive Officer of First Oak Brook
Bancshares, Inc. (“XXXX”) and its subsidiary, Oak Brook Bank, and is a party to
a written transitional employment agreement and other agreements with XXXX
referred to herein;
WHEREAS,
effective as of the date set forth above, XXXX has merged (the “Merger”) with
and into a wholly-owned subsidiary of the Corporation and Oak Brook Bank has
or
in the future, will merge into MB Financial Bank, National Association (the
“Bank”) as contemplated by that certain Agreement and Plan of Merger, dated as
of May 1, 2006 by and among the Corporation, such subsidiary and
XXXX;
WHEREAS,
the Corporation has determined it to be in its best interests to secure the
continued employment of Executive and to enter into this Agreement in
replacement of the transitional employment agreement; and
WHEREAS,
the Executive desires to be so employed; and
WHEREAS,
the Board of Directors of the Corporation (the “Board of Directors”) has
approved and authorized the execution of this Agreement with the
Executive.
NOW
THEREFORE, in consideration of the foregoing and of the respective covenants
and
agreements of the parties herein, it is AGREED as follows:
1.
Definitions.
(a) The
term
“Date of Termination” means the date upon which the Executive's employment with
the Corporation ceases, as specified in a notice of termination pursuant to
Section 9 hereof,
(b) The
term
“Involuntary Termination” means the termination of the employment of the
Executive (i) by the Corporation without his express written consent; or (ii)
by
the Executive by reason of a material diminution of or interference with his
duties, responsibilities or benefits, or other material breach of this
Agreement, including (without limitation) any of the following actions unless
consented to in writing by the Executive: (1) a requirement that the Executive
be based at any place other than any of the following: the principal office
location of XXXX (as of the date immediately prior to the Merger), the principal
office location of the Corporation (defined to mean the principal office
location of the Corporation’s Chief Executive Officer (“CEO”)), provided the
principal office location is located within a fifteen mile radius of the
Rosemont office location as of the date hereof, in downtown Chicago, or within
fifteen miles of the Executive’s home in the Chicago area, except for reasonable
travel on Corporation or Bank business; (2) a material demotion of the
Executive; (3) failure of the Corporation to pay or provide the compensation,
benefits, or vacation and leave contemplated by Sections 4, 5, 6 or 19 hereof,
respectively, or the failure of the Corporation to provide indemnification
and
insurance coverage contemplated by Section 11 hereof; (4) a material permanent
increase in the required hours of work or the workload of the Executive; or
(5)
the failure of the Board of Directors (or board of directors of any successor
of
the Corporation including its ultimate parent company) to elect the Executive
as
Vice Chairman, Executive Vice President ,and Chief Marketing and Legal
Strategist of the Corporation (or any successor of the Corporation including
its
ultimate parent company) or any action by the Board of Directors (or a board
of
directors of a successor of the Corporation including its ultimate parent
company) removing him from such office; or (6) the failure of the Board or
stockholders of the Corporation or Bank to elect Executive as a director of
the
Corporation and Bank, or any action by the Board or stockholders removing him
from such position. The term “Involuntary Termination” does not include
Termination for Cause, termination of employment due to death or termination
pursuant to Section 7(g) of this Agreement, or suspension or temporary or
permanent prohibition from participation in the conduct of the Bank's affairs
under Section 8 of the Federal Deposit Insurance Act.
(c) The
terms
“Termination for Cause” and “Terminated For Cause” mean termination of the
employment of the Executive with the Corporation and the Bank because of the
Executive's willful misconduct, breach of a fiduciary duty involving personal
profit, repeated failure to perform stated duties (after written notice and
reasonable opportunity to cure), willful violation of any law, rule, or
regulation relating to the performance of Executive’s duties or which reflects
adversely upon the reputation of the Corporation or the Bank (other than traffic
violations or similar offenses) or final cease-and-desist order issued by a
federal banking regulator, or (except as provided below) a material breach
of
any provision of this Agreement (after written notice and reasonable opportunity
to cure). No act or failure to act by the Executive shall be considered willful
unless the Executive acted or failed to act in bad faith and without a
reasonable belief that his action or failure to act was in the best interest
of
the Corporation or the Bank. The Executive shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution, duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board of Directors at
a
meeting of the Board duly called and held for such purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together with
the
Executive's counsel, to be heard before the Board), stating that in the good
faith opinion of the Board of Directors the Executive has engaged in conduct
described in the preceding sentence and specifying the particulars thereof
in
detail.
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(d) The
term
“Voluntary Termination” shall mean termination of employment by the Executive
voluntarily as set forth in Section 7(d) of this Agreement.
(e) The
terms
“Transitional Employment Agreement,” “Supplemental Pension Benefit Agreement,”
“Agreement Regarding Post-Employment Restrictive Covenants,” “Senior Executive
Life Insurance Plan,” “Executive Deferred Compensation Plan,” and “XXXX Stock
Options” refer to agreements with and plans maintained by XXXX with respect to
which Executive is a party or a participant, in each case as in effect on the
day immediately prior to the Merger, and, with respect to periods on and after
the Merger, as such may be modified in accordance with the Merger Agreement
or
as provided herein.
2. Term.
The
term of this Agreement shall be a period of five years commencing on the
Effective Date (the “Term”) subject to earlier termination as provided herein.
3. Employment;
Directorships.
The
Executive is employed as the Vice Chairman, Executive Vice President and Chief
Marketing and Legal Strategist of the Corporation. As such, the Executive shall
be a member of the Corporation’s senior leadership team and reporting to the
CEO, with the responsibilities and authority of a senior executive assigned
to
him from time to time by the CEO with respect to Corporation-wide strategic
planning, legal, retail banking and marketing, investor relations, wealth
management and lending activities. The Executive shall also render services
to
any subsidiary or subsidiaries of the Corporation as requested by the
Corporation from time to time consistent with his executive position and
experience and with the terms of this Agreement. The Corporation shall provide
Executive with an office and administrative support commensurate with its other
senior executives. The Executive shall devote his best efforts and reasonable
time and attention to the business and affairs of the Corporation and its
subsidiaries to the extent necessary to discharge his responsibilities
hereunder. The Executive may (a) serve on charitable boards or committees at
the
Executive’s discretion without consent of the Board of Directors and, in
addition, on such corporate boards as are approved in a resolution adopted
by a
majority of the Board of Directors, and (b) manage personal investments, so
long
as such activities do not interfere materially with performance of his
responsibilities hereunder. The Executive shall also be elected as a director
of
the Corporation and the Bank.
4. Compensation.
(a) Base
Compensation.
During
the Term, the Executive shall be entitled the following
compensation:
(i) Salary.
The
Corporation agrees to pay the Executive during the term of this Agreement a
base
salary (the “Corporation Salary”) the annualized amount of which shall be
$650,000, which amount shall increase by $50,000 on each of the first four
anniversaries of the Effective Date, whereupon such increased amount shall
be
the “Corporation Salary.” The Corporation Salary shall be paid no less
frequently than monthly and shall be subject to customary tax withholding.
If
and to the extent that the Bank and/or any other entities directly or indirectly
controlled by the Corporation (the “Consolidated Subsidiaries”) pay salary or
other amounts or provide benefits to the Executive that the Corporation is
obligated to pay or to provide to the Executive under this Agreement, the
Corporation’s obligations to the Executive shall be reduced
accordingly.
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(ii) Restricted
Stock.
On the
Effective Date and each anniversary thereof during the Term (a total of 5 annual
awards), the Corporation shall grant to Executive a restricted stock award
under
its 1997 Omnibus Stock Incentive Plan (the “Omnibus Plan”) (each an
“RS
Award”).
The
number of shares to be awarded shall be equal to $200,000 divided by the fair
market value of a share of Corporation common stock on the date of grant as
determined under the Omnibus Plan. The restricted stock will vest as of the
later of the last day of the five-year Term, or three years (or such shorter
period as may be permitted under the Plan at the time of grant) after the date
of grant, subject to full vesting in the event of the Executive’s death,
disability or Retirement (as defined under the Plan) or, as provided in Section
7(a), Involuntary Termination. In the event the Omnibus Plan shall be amended
to
enable the Corporation to grant restricted stock units (“RSUs”), then RSUs,
payable following the Executive’s termination of employment in compliance with
Code Section 409A, shall be substituted for the RS Awards required to be made
under this Section 4(a)(ii).
(b) Annual
Incentive Bonus.
During
calendar years 2007 and 2008, on or before March 31st
of each
such year, the Board of Directors shall establish performance targets relating,
for 2007, to reasonable progress toward post-Merger transition goals and for
2008, to satisfactory conclusion of post-Merger integration activities based
upon which the Executive will be entitled to earn an annual cash incentive
bonus
(the “Annual Cash Bonus”) for each such calendar year equal to $300,000. The
Board of Directors may, in its sole discretion, include the Executive in
performance based program during future calendar year periods, with any such
bonus awarded being included in the definition of “Annual Cash Bonus”. The
Annual Cash Bonus earned by the Executive for a calendar year shall be paid
within two and one-half months after the expiration of such calendar year;
provided, however, in the event the payment of the Annual Cash Bonus (or any
portion thereof) when added to the other compensation (which is taken into
account under Section 162(m) of the Internal Revenue Code of 1986, as amended,
(the “Code”)) that is expected to be paid to the Executive in the same calendar
year would, in the reasonable opinion of the Board of Directors, result in
a
limitation on compensation deductibility under Section 162(m) of the Code,
then
in that event, the Annual Cash Bonus (or affected portion thereof) shall be
deferred in an amount necessary to assure full deductibility of compensation
paid to the Executive for purposes of Section 162(m) of the Code, with the
deferred amount being paid, together with interest from the date of deferral
to
the date of payment at the average interest-bearing cost of funds of the Bank
(the deferred amount plus interest shall be deemed the “Deferred Payment”), as
soon as practicable after termination of Executive’s employment (subject to any
delay which may be required to comply with Code Section 409A) subject to
limitation on deductibility under Section 162(m) of the Code.
(c) Additional
Equity-Based Compensation.
Commencing in calendar year 2007, the Executive shall be eligible to be
considered for an award of stock options or other equity-based compensation
under the Omnibus Plan and any successor or substitute for such plan (the “Stock
Option Plan”) by the Committee (as defined in the Stock Option Plan) at such
time as awards are granted to other senior executives of the Corporation. Each
option and other equity-based award granted pursuant to the provisions of this
Section 4(c) shall have such term and be subject to a vesting schedule as the
Committee determines, provided: (i) such option to the extent outstanding and
unexercisable shall become fully exercisable upon the death or disability of
the
Executive, (ii) such option to the extent outstanding and unexercisable shall
become fully exercisable upon a Change in Control (as defined in the applicable
Stock Option Plan) if the unexercisable portion of the option would otherwise
terminate or cease to be enforceable, in whole or in part, by reason of such
Change in Control and shall remain exercisable for at least one year thereafter
but not beyond the expiration of the option term, and (iii) the option shall
expire, terminate, and be forfeited upon a Termination for Cause or a
termination pursuant to Section 7(g) below.
(d) Expenses.
The
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in performing services under this Agreement
in accordance with the policies and procedures applicable to the executive
officers of the Corporation and the Bank, provided that
the
Executive accounts for such expenses as required under such policies and
procedures.
5. Benefits.
(a) Participation
in Benefit Plans.
While
the Executive is employed by the Corporation, the Executive shall be entitled
to
participate to the same extent as executive officers of the Corporation and
the
Bank generally, in all plans, programs and practices of the Corporation and
the
Bank relating to pension, retirement, thrift, profit-sharing, savings, group
or
other life insurance, hospitalization, medical and dental coverage, travel
and
accident insurance, education, retirement or employee benefits (excluding bonus
and long term incentive plans) or combination thereof, to the extent he is
not
then covered by a similar continuing plan of XXXX or a similar plan or program
pursuant to Section 5(b) below.
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(b) Fringe
Benefits.
While
the Executive is employed by the Corporation, the Executive shall be eligible
to
participate in, and receive benefits under, any other fringe benefit plans,
programs and practices or perquisites which are or may become generally
available to the Corporation's or the Bank's executive officers, including
but
not limited to, supplemental medical or life insurance plans, company cars,
club
dues, physical examinations, financial planning and tax preparation services,
provided that nothing in this sentence shall require the Corporation to
duplicate similar benefits provided to Executive pursuant to the remainder
of
this Section 5(b). In addition, while the Executive is employed, the Corporation
agrees to provide or pay for (i) the Executive's membership dues and related
business expenses in The Standard Club, (ii) use of an executive luxury
automobile (including reimbursement of expenses relating thereto), which shall
be replaced with a new vehicle at least every 3 years, (iii) continuation of
the
Supplemental Pension Benefit Agreement (as contemplated by Section 19 hereof),
(iv) benefits under the Senior Executive Life Insurance Plan, (v) employer
contributions under the Executive Deferred Compensation Plan, (vi) Exec-U-Care
or similar executive health benefits coverage (“Executive Medical Coverage”),
and (vii) home security system, travel club dues, periodicals, financial
planning assistance, and other fringe benefits and perquisites, such benefits
described in clauses (i) through (vii) to be provided on a basis consistent
with
that provided by XXXX to Executive prior the Effective Date,.
(c) Post-Employment
Health Benefit.
Pursuant to the Transitional Employment Agreement, the Executive has earned
and
shall be entitled to receive, post-employment continuing health benefit coverage
from the Corporation or its successor in interest (the “Post-Employment Health
Benefit”) upon any termination of employment of the Executive, as follows: (i)
the Corporation (or its successor in interest) shall pay for or provide
Executive Medical Coverage (or if the Executive or spouse may elect, medicare
supplement or other health or care-related insurance coverage) for the life
of
the Executive and his spouse, which shall be at the Corporation’s (or its
successor’s) sole cost; and (ii) the Corporation (or its successor) shall, at
the election of the Executive and, if Executive predeceases her, Executive’s
spouse, group medical and dental continuation coverage under COBRA (or, use
reasonable best efforts to provide comparable coverage to the extent such
continuation is not permitted under applicable law), during the remainder of
his
and her lifetime at the sole cost of the Executive and spouse, as applicable,
subject to termination only for failure to timely pay the appropriate premiums.
The Corporation’s obligations and the coverages provided under this Section 5(c)
shall be subject to the following conditions and limitations: (x) the coverage
under clause (i) and clause (ii) shall be secondary to any employer-sponsored
group coverage or Medicare or other government-sponsored or mandated program
under which the Executive or spouse may then be covered and (y) the
Corporation’s obligations under clause (i) shall cease after the aggregate
amount expended by the Corporation equals the Coverage Limit as defined below.
The “Coverage Limit” shall equal $300,000 upon the Executive’s termination of
employment and the unused balance of such amount at the end of each calendar
year, commencing the full calendar year next following employment termination,
shall be increased by 5%.
6. Vacations;
Leave.
The
Executive shall be entitled (i) to annual vacation equal to six weeks of
vacation at full pay and, commencing after the second anniversary of the
Effective Date, ten weeks of vacation pay at one-half of the then effective
Corporation Salary; (ii) to take during calendar year 2008, four weeks of
sabbatical leave at full pay accrued by Executive while employed by XXXX prior
to the Merger, and (iii) to voluntary leaves of absence, with or without pay,
from time to time at such times and upon such conditions as the Board of
Directors may determine in its discretion.
7. Termination of Employment
(a)
Involuntary
Termination.
If the
Executive experiences an Involuntary Termination prior to the end of the Term,
such termination of employment shall be subject to the Corporation's obligations
under this Section 7(a). If such Involuntary Termination occurs, the Corporation
shall, as agreed upon liquidated damages, continue to pay or provide to
Executive or Executive’s beneficiary for the compensation and benefits described
in Sections 4 and 5(b) (ii) (but excluding reimbursement of related costs
including but not limited to insurance, maintenance, repairs, gasoline and
operating expenses which shall be paid by the Executive and the Executive shall
cause MBFI and/or MB Bank to be a named and covered insured party under the
automobile insurance policy), (iii), (iv) and (v) for the remainder of the
Term
as if such Involuntary Termination had not occurred, provided the Executive’s
Annual Cash Bonus during calendar year 2007 and 2008 shall be at the $300,000
level and the Executive’s Annual Cash Bonus shall be zero thereafter, all
unvested restricted stock theretofore granted as RS Awards described in Section
4(a)(ii) shall vest in full and the value of the RS Awards described in Section
4(a)(ii) not theretofore made to the Executive shall be paid in cash on each
anniversary of the Effective Date. In addition to the foregoing, in connection
with an Involuntary Termination, the Executive shall be entitled to receive
(A)
any accrued Corporation Salary through the Date of Termination within 30 days
after the Date of Termination, (B) any unpaid Annual Cash Bonus earned by the
Executive for the preceding calendar year within the time period set forth
in
Section 4(b) hereof, (C) reimbursement of any expenses incurred through the
Date
of Termination in accordance with Section 4(d), (D) all unpaid Deferred Payments
and RSUs and (E) all vested benefits and amounts under any plan, program or
arrangement, including those referred to in Section 4, 5 or 19 the payment
and
other rights with respect to which shall be governed by the terms thereof
(collectively, the “Accrued Compensation”) as well as the Post-Employment Health
Benefit. If the Executive should die after amounts become payable under this
Section 7(a), such amounts shall thereafter be paid to the Executive’s estate
until satisfied in full.
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(c) Termination
for Cause.
In the
event of Termination for Cause, the Corporation shall have no further obligation
to the Executive under this Agreement after the Date of Termination except
for
the Accrued Compensation and neither the Executive nor his spouse shall be
entitled to the Post-Employment Health Benefit..
(d) Voluntary
Termination.
The
Executive may terminate his employment voluntarily at any time by a notice
pursuant to Section 9 of this Agreement. In the event that the Executive
voluntarily terminates his employment other than by reason of any of the actions
that constitute Involuntary Termination (“Voluntary Termination”), the
Corporation shall only be obligated to the Executive for the amount of the
Accrued Compensation and to provide the Post-Employment Health Benefit, and
the
Corporation shall have no further obligation to the Executive under this
Agreement.
(e) Death.
In the
event of the death of Executive during the term of this Agreement and prior
to
any termination of employment, the Corporation shall pay to the Executive's
estate the Accrued Compensation and shall provide to the Executive’s surviving
spouse or, in the event she does not survive him, his beneficiaries the
compensation described under Section 4 for a period of 18 months following
the
date of death, and in the case his spouse survives him, she shall also receive
the Post-Employment Health Benefit.
(f) Disability.
If the
Executive becomes entitled to benefits under the terms of the then--current
disability plan, if any, of the Corporation or the Bank (a “Disability Plan”),
he shall be entitled to receive such group and other disability benefits, if
any, as are then provided by the Corporation or the Bank for executive officers.
In the event of such disability, this Agreement shall not be suspended, except
that the Corporation's obligation to pay the Corporation Salary to the Executive
shall be reduced in accordance with the amount of disability income benefits
received by the Executive, if any, pursuant to this Section 7(f) such that,
on
an after-tax basis, the Executive shall realize from the sum of disability
income benefits and Corporation Salary the same amount as he would realize
on an
after-tax basis from the Corporation Salary if the Corporation’s obligation to
pay salary were not reduced pursuant to this Section 7(f). The Corporation
may
terminate the employment of the Executive at any time after the expiration
of
one year following such disability if such disability is then continuing, which
termination shall be an Involuntary Termination, but any compensation to be
paid
to the Executive following such termination shall be reduced by disability
income benefits received by the Executive.
(g) Regulatory
Action.
Notwithstanding any other provisions of this Agreement, if the Executive is
removed and/or permanently prohibited from participating in the conduct of
the
Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act, 12 U.S. C. § 1818(e)(4) and (g)(1), all obligations of
the Corporation under this Agreement shall terminate as of the effective date
of
the order, except for the obligation of the Corporation to pay the Accrued
Compensation.
(h) No
Other Obligation to Mitigate Damages.
The
Executive shall not be obligated to mitigate amounts payable or arrangements
made under the provisions of this Section 7 and the obtaining of other
employment shall in no event effect any reduction of the Corporation’s
obligations under this Section 7.
8. Tax
Gross Up Agreement.
Contemporaneously with entering into this Agreement, the Corporation and
Executive shall enter into a Tax Gross-Up Agreement substantially in the form
filed by the Corporation on Form 8-K in November 2004 relating solely to a
change in control of the Corporation, provided that the Tax Gross-Up Agreement
shall provide that it shall be unrestricted if the Executive incurs an
Involuntary Termination under this Agreement prior to the second anniversary
of
the Effective Date. An “Involuntary Termination” under this Agreement shall not
be deemed a “Voluntary Termination” under the Tax Gross-Up
Agreement.
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9. Notice
of Termination.
Subject
to the provisions of Section 1(c) hereof, in the event that the Corporation
or
the Bank, or both, desire to terminate the employment of the Executive during
the term of this Agreement, the Corporation or the Bank, or both, shall deliver
to the Executive a written notice of termination, stating whether such
termination constitutes Termination for Cause, Involuntary Termination, or
termination for disability, setting forth in reasonable detail the facts and
circumstances that are the basis for the termination, and specifying the date
upon which employment shall terminate, which date shall be at least 30 days
after the date upon which the notice is delivered, except in the case of
Termination for Cause. In the event that the Executive determines in good faith
that he has experienced an Involuntary Termination of his employment, he shall
send a written notice to the Corporation stating the circumstances that
constitute such Involuntary Termination and the date upon which his employment
shall have ceased due to such Involuntary Termination. In the event that the
Executive desires to effect a Voluntary Termination, he shall deliver a written
notice to the Corporation, stating the date upon which employment shall
terminate, which date shall be at least 90 days after the date upon which the
notice is delivered, unless the parties agree to a date sooner.
10. Attorneys'
Fees.
The
Corporation shall pay all legal fees and related expenses (including the costs
of experts, evidence and counsel) incurred by the Executive as a result of
(i)
the Executive's contesting or disputing any termination of employment, or (ii)
the Executive's seeking to obtain or enforce any right or benefit provided
by
this Agreement or by any other plan or arrangement maintained by the Corporation
(or any successor) or the Consolidated Subsidiaries under which the Executive
is
or may be entitled to receive benefits; provided
that
the
Corporation's obligation to pay such fees and expenses is subject to the
Executive's prevailing with respect to the matters in dispute in any proceeding
initiated by the Executive or the Executive's having been determined to have
acted reasonably and in good faith with respect to any proceeding initiated
by
the Corporation or the Consolidated Subsidiaries.
11. Indemnification.
During
Executive’s term of employment with the Corporation and thereafter, the
Corporation shall indemnify and hold Executive harmless to the maximum extent
now or hereafter permitted under the Articles of Incorporation and By-Laws
of
the Corporation. In the event that legal action is instituted or threatened
against the Executive during or after the term of his employment with, or
membership on the Board of Directors of, the Corporation, the Bank or any
affiliate the Corporation, in connection with such employment or membership,
the
Corporation will advance to the Executive the costs and expenses incurred by
Executive in the defense of such action (including reasonable attorneys, expert
and other professional࿖ fees) to the maximum extent permitted by law without
prejudice to or waiver by the Corporation of its rights and remedies against
the
Executive. In the event that there is a final judgment entered against the
Executive in any such litigation which, in accordance with its Articles of
Incorporation and By-Laws, is not subject to indemnification, then the Executive
shall reimburse the Corporation for all such costs and expenses paid or incurred
by it in the Executive’s defense of such litigation (the “Reimbursement
Amount”). The Reimbursement Amount shall be paid by the Executive within 30 days
after rendition of the final judgment and a determination by the Board of
Directors that such costs and expenses are not subject to indemnification.
The
parties shall cooperate in the defense of any asserted claim, demand or
liability against the Executive or the Corporation or any of the Consolidated
Subsidiaries. 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 11 shall
be in addition to any rights which Executive may now or hereafter have under
any
insurance contract maintained by the Corporation or any of its other affiliates
or any other agreement between Executive and the Corporation or any of its
affiliates or under the Merger Agreement. Anything in this Agreement to the
contrary notwithstanding, Executive’s indemnification rights under this Section
11, the Articles of Incorporation and By-Laws of the Corporation and applicable
law, shall survive the termination of Executive’s employment with the
Corporation and his membership on the Board of Directors of the Corporation,
the
Bank and any affiliate of the Corporation.
12. No
Assignments
(a) This
Agreement is personal to each of the parties hereto, and neither may assign
or
delegate any of its rights or obligations hereunder without first obtaining
the
written consent of the other party; provided, however, that this Agreement
shall
be binding upon and inure to the benefit of any successor of the Corporation
and
the Corporation shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) by an assumption agreement in
form
and substance reasonably satisfactory to the Executive, to expressly assume
and
agree to perform this Agreement in the same manner and to the same extent that
the Corporation would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such an assumption agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle the Executive to compensation and benefits from the
Corporation in the same amount and on the same terms as provided in Section
7(a). For purposes of implementing the provisions of this Section 12, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.
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(b) This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
13. Notice.
For the
purposes of this Agreement, notices and all other communications provided for
in
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or five days after the date that sent by certified
mail, return receipt requested, postage prepaid, to the Corporation at its
home
office, to the attention of the Board of Directors with a copy to the Secretary
of the Corporation, or, if to the Executive, to such home or other address
as
the Executive has most recently provided in writing to the
Corporation.
14. Amendments.
No
amendments or additions to this Agreement shall be binding unless in writing
and
signed by both parties.
15. Headings.
The
headings used in this Agreement are included solely for convenience and shall
not affect, or be used in connection with, the interpretation of this
Agreement.
16. Severability.
The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provisions shall not affect the validity or
enforceability of the other provisions hereof.
17. Governing
Law.
This
Agreement shall be governed by the laws of the State of Illinois.
18. Successors
to Code Sections.
All
provisions of this Agreement referring to sections of the U.S.C. (United State
Code) or to the Code shall be deemed to refer to successor code sections in
the
event of renumbering of code sections.
19. Effect
on Other Agreements.
(a) Transitional
Employment Agreement.
As of
the Effective Date hereof, the Transitional Employment Agreement shall terminate
and be of no further force or effect. In consideration of such cancellation,
to
the extent such cancellation payment is not paid by XXXX prior to the Merger,
the Corporation shall pay to the Executive a lump sum cash payment of
$3,000,000, provided that such amount shall be subject to reduction to the
extent necessary to avoid imposition of excise tax thereon under Code Section
4999.
(b) Supplemental
Pension Benefit Agreement.
The
Corporation shall honor and assume the obligations of XXXX under the
Supplemental Pension Benefit Agreement, provided that for purposes thereof:
(i) The
Executive’s Credited Years of Service shall be 20 and the accrual fraction shall
be 100%;
(ii) The
highest nominal rate of Corporation Salary paid during the term of this
Agreement (including any continuation period under Section 7) shall be the
Final
Base Salary;
(iii) in
the
event of termination of employment prior to January 1, 2015, the Supplemental
Pension Benefit thereunder shall commence on the later of the first day of
the
calendar year following or six months following the Executive’s termination of
employment, which termination for this purpose shall not be deemed to occur
until the earlier of the Executive’s voluntary resignation or termination for
Cause, death or expiration of the five-year Term in the case of an Involuntary
Termination,
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(iv) The
actuarial equivalent benefit payable on such Early Commencement Date shall
be
determined on the basis of the mortality table and interest rate described
in
Section 417(e)(3)(A)(ii) of the Internal Revenue Code (or any successor
provision thereto), and
(v) The
actuarial present value of the benefit to be provided upon the Early
Commencement Date shall not exceed the actuarial present value as of the Early
Commencement Date of the benefit to be provided to the Executive if benefits
commenced on January 1, 2015 utilizing the mortality table and interest rate
set
forth in subpart (iv) above.
(c) Agreement
Regarding Post-Employment Restrictive Covenants.
The
Corporation shall assume and honor the Agreement Regarding Post-Employment
Restrictive Covenants, which agreement shall continue in full force and effect
with the Corporation being substituted for XXXX thereunder.
(d) XXXX
Stock Options.
The
Corporation shall assume and honor the Executive’s XXXX Stock Options, as
converted in accordance with the Merger Agreement.
20. Code
Section 409A.
(a)
General.
It is
intended that the Agreement shall comply with the provisions of Code Section
409A and the Treasury regulations relating thereto 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.
(b) Payments.
Notwithstanding any provision in the Agreement to the contrary, as needed to
comply with Code Section 409A(a)(2)(B)(i), payments due under Section 7 shall
be
subject to a six (6) month delay such that amounts otherwise payable during
the
six (6) month period following the Executive’s separation from service 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).
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
|
Attest:
|
MB
FINANCIAL, INC.
|
___________________________
______________________________________
|
Secretary
|
|
|
| By: | __________________________________ |
| Its: | __________________________________ |
Witness: EXECUTIVE:
___________________________ _____________________________________
Xxxxxxx
X. Xxxxxx, Xx.
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