FIRST AMENDMENT TO THE MIDWEST BANC HOLDINGS, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
EXHIBIT 10.2
This First Amendment to the Midwest Banc Holdings, Inc. Supplemental Executive Retirement
Agreement (the “Agreement”) is made and entered into this day of , by and between Midwest
Banc Holdings, Inc., a Delaware corporation (the “Company”), and the undersigned executive (the
“Executive”).
WHEREAS, the American Jobs Creation Act of 2004 signed into law on October 22, 2004 added a
new Section 409A to the Internal Revenue Code of 1986, as amended (the “Code”);
WHEREAS, Section 409A imposed substantive requirements on nonqualified deferred compensation
plans which are defined to include an agreement or arrangement that includes one person;
WHEREAS, Section 409A restricts the timing of distributions from nonqualified deferred
compensation plans;
WHEREAS, the Agreement does not satisfy the distribution requirements under Section 409A;
WHEREAS, failure to comply with Section 409A will result in immediate income tax consequences
to the Executive;
NOW, THEREFORE, to avoid immediate income tax consequences the parties agree to amend the
Agreement in the following manner so that it complies with Section 409A:
Section 1.4 of the Plan is amended in its entirety to read as follows, effective January 1,
2005:
1.4 “Change of Control” means a change in the ownership or effective
control of the Company, or in the ownership of a substantial portion of the assets
of the Company as provided in section 409A(a)(2)(A)(v) of the Code. Pending
issuance of Treasury regulations, “Change in Control” will be as defined in IRS
Notice 2005-1 and subsequent guidance. In accordance with IRS Notice 2005-1,
“Change in Control” means:
(a) Change in Ownership. A change in the ownership of the Company
occurs on the date that any person or persons acting as a group acquires
ownership of stock of the Company that, together with stock held by such
person or group, constitutes more than 50 percent of the total fair market
value or total voting power of the stock of such Company. If a person or
group is considered to own more than 50 percent of the total fair market
value or total combined voting power of the stock of the Company, the
acquisition of additional stock by the same person or persons is not
considered to cause a change in the ownership of the Company (or to cause a
change in the “effective control of the Company” within the meaning of
paragraph (c)).
(b) Change in Effective Control. A change in the effective control of
the Company occurs on the date that a majority of the Company’s board of
directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Company’s board of directors prior to the date of the appointment or
election.
(c) Change in Ownership of a Substantial Portion of the Company’s
Assets. A change in the ownership of a substantial portion of the
Company’s assets occurs on the date that any person or group acquires (or
has acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 50 percent of
the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions.
Article 1 of the Plan is amended by adding the following Section 1.22 at the end thereof,
effective January 1, 2005:
1.22 “Specified Employee” means a key employee (as defined in section
416(i) of the Code without regard to paragraph (5) thereof).
Section 2.1.2 of the Plan is amended in its entirety to read as follows, effective January 1,
2005:
2.1.2 Payment of Benefit. The Employer shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first day
of each month commencing with the month following the Executive’s Termination
of Employment. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.
4. Section 2.2.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:
2.2.2 Payment of Benefit. The Employer shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first day
of each month commencing with the month following the Executive’s Termination of
Employment. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.
5. Section 2.3.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:
2.3.2 Payment of Benefit. The Employer shall pay the annual benefit
to the Executive in twelve (12) equal monthly installments payable on the first day
of each month commencing with the month following the Executive’s Normal Retirement
Date. Notwithstanding the foregoing, for any Specified Employee distributions may
not be made before the date which is six (6) months after the date of Termination
of Employment (or, if earlier, the date of death of the Executive). The annual
benefit shall be paid to the Executive for fifteen (15) years.
6. Section 2.4.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:
2.4.2 Payment of Benefit. The Employer shall pay the annual benefit
amount to the Executive in twelve (12) equal monthly installments payable on the
first day of each month commencing with the month following the Executive’s Normal
Retirement Date. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.
7. Section 2.5.2 of the Plan is amended in its entirety to read as follows, effective January
1, 2005:
2.5.2 Payment of Benefit. The Employer shall pay the annual benefit
amount to the Executive in twelve (12) equal monthly installments payable on the
first day of each month commencing with the month following the Executive’s
Normal Retirement Date. Notwithstanding the foregoing, for any Specified Employee
distributions may not be made before the date which is six (6) months after the
date of Termination of Employment (or, if earlier, the date of death of the
Executive). The annual benefit shall be paid to the Executive for fifteen (15)
years.
* * *
IN WITNESS WHEREOF, the Executive and a duly authorized officer of the Company have executed
this First Amendment as of the date set forth above.
Executive: | Company: | |||
MIDWEST BANC HOLDINGS, INC., for itself and its | ||||
Subsidiaries | ||||
By: | ||||
Title: | President & CEO |