CPP Senior Executive Officer Agreement Under the TARP Capital Purchase Program
Under the
TARP Capital Purchase Program
December
4, 2008
[Name of
Executive Officer]
MB
Financial, Inc.
MF
Financial Center
0000
Xxxxx Xxxxx Xxxx
Xxxxxxxx,
XX 00000
Dear
[ ]:
MB
Financial, Inc. (“Company”) proposes to enter into a letter agreement with the
United States Department of Treasury (“UST”) as part of the Company’s
participation in the UST’s TARP Capital Purchase Program (“CPP”). The letter
agreement incorporates therein a Securities Purchase Agreement – Standard Form
(“UST Purchase Agreement”) providing for the purchase (the “Purchase”) and
receipt by the UST of preferred stock and warrants of the Company (such
preferred shares, warrants, and if applicable, any common stock issued upon
exercise of the warrants, the “Purchased Securities”).
In order
for the Company to participate in the CPP and as a condition to the closing of
the Purchase in the Company contemplated by the UST Purchase Agreement, the
Company is required to take certain actions and adopt certain standards relating
to the compensation of its senior executive officers (as defined below) and to
make certain changes to certain compensation arrangements applicable to its
senior executive officers.
The
Company has determined that you are or may become a senior executive officer for
purposes of the CPP. To comply with these requirements, and in
consideration of the benefits that you will receive as an employee, officer
and/or stockholder of the Company as a result of the Company’s participation in
the CPP, you agree as follows:
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(A)
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No Golden Parachute
Payments. The Company is prohibited from making any
golden parachute payment (as defined below) to you during any “CPP Covered
Period.” The “CPP Covered Period” is any period during which the UST holds
any Purchased Securities. The Company shall work with you
between the date hereof and December 31, 2008 in order to determine the
potential payments and benefits which may be subject to the foregoing
limitations and, if necessary, to determine the order in which such
payments and benefits would be reduced, if
necessary.
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(B)
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Clawback of Bonus and
Incentive Compensation. Any bonus or incentive
compensation payments to you during a CPP Covered Period are subject to
recovery or “clawback” by the Company if such payments were based on
materially inaccurate financial statements or any other materially
inaccurate performance metric, all within the meaning of and to the extent
required by Section 111(b) of the EESA and CPP Guidance (as defined
below).
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(C)
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Amendment of
Compensation Arrangements. Each of the Company’s
compensation, bonus, incentive and other benefit plans, programs,
arrangements and agreements pursuant to which you are or may became
entitled to payments in the nature of compensation from the Company or any
of its subsidiaries (including, without limitation any employment
agreement, letter agreement, term sheet, stock option, restricted stock,
performance share or other equity-based compensation agreement, deferred
compensation plan, or severance plan) (collectively, “Compensation
Arrangements”) is amended if and to the extent necessary to give effect to
the provisions of clauses (A) and (B) above and as required under the UST
Purchase Agreement.
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(D)
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Avoidance of
Incentives Encouraging Unnecessary and Excessive
Risks. The CPP requires the Organization and
Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”) to periodically review with the appropriate
senior risk officers the provisions of the Company’s bonus and incentive
compensation arrangements for the purposes of determining if such
arrangements encourage the Company’s senior executive officers to take
unnecessary and excessive risks that threaten the value of the Company
within the meaning of the CPP Guidance. If and to the extent the
Compensation Committee determines that any revision to any Compensation
Arrangement is appropriate, you hereby agree to such revisions and to
execute such additional documents as the Company deems necessary or
appropriate to effect such
revisions.
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(E)
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Definitions and
Interpretations. The following definitions and
interpretations shall apply to this
letter:
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“ESSA”
means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulations thereunder issued by the UST at 31 CFR Part 30,
effective on October 20, 2008, and in effect as of the “Closing Date” as defined
in the UST Purchase Agreement. Such guidance or regulations are
referred to herein as the “CPP Guidance”.
“Senior
executive officer” means each of the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA and the CPP Guidance.
“Golden
parachute payment” has the same meaning as in subsection 111(b)(2)(C) of EESA
and the CPP Guidance.
“Company”
or “employer” means MB Financial, Inc. and includes any entities treated as a
single employer with MB Financial, Inc. under the CPP Guidance. You are also
delivering a wavier (the “Waiver”) pursuant to the UST Purchase Agreement, and
as between the Company and you, the term “employer” in that waiver will be
deemed to mean the Company as used in this letter.
The term
“CPP Covered Period” shall be limited by, and interpreted in a manner consistent
with the CPP Guidance.
The
application of provisions (A) an (B) of this letter are intended to, and shall
be interpreted, administered and construed to, comply with Section 111 of EESA
and the CPP Guidance and, to the maximum extent consistent with provisions (A)
and (B) and such statute and regulations, to permit the operation of the
Compensation Arrangements in accordance with their terms before giving effect to
the provisions of this letter.
If this
letter sets forth our agreement on the subject matter hereof, kindly sign and
return to the Company the enclosed copy of this letter which will then
constitute our agreement on this subject and please sign and return the Waiver
as well.
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Sincerely,
MB
Financial, Inc.
By:
Name:
Xxxx Xxxx
Title:
Vice President and Chief Financial Officer
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Intending
to be legally bound, I agree to with and accept the foregoing
terms:
Name:
Title:
Date:
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