EXHIBIT 10.1
Letter of Understanding for
CEO
May 1 , 2006
Richard M. Rieser, Jr.
First Oak Brook Bancshares,
Inc.
1400 Sixteen Street
Oak Brook, Illinois 60523
Re:
Letter of
Understanding
Dear Rick:
As you know, MB Financial, Inc.
(“MBFI”), along with its wholly-owned subsidiary, MBFI
Acquisition Corp., has entered into an Agreement and Plan of
Reorganization (the “Merger Agreement”) with First Oak
Brook Bancshares, Inc. (the “Company”) pursuant to
which the Company will be merged with and into such subsidiary (the
“Merger”). Section 7.16(h) of the Merger Agreement
provides that you and MBFI will enter into a letter of
understanding relating to your Transitional Employment Agreement
and post-Merger employment matters. This letter is that letter of
understanding.
As we have frequently discussed
throughout this process, we value greatly your continued
significant participation in the senior management of the
post-Merger organization. You have indicated a desire to remain
with our combined company. To that end, we are offering to enter
into an employment agreement with you immediately following
completion of the Merger substantially in the form attached as
Appendix A to this letter (the “Employment
Agreement”).
Rick, we look forward to working
with you to make the Merger a success. Please acknowledge your
agreement to so serve the post-Merger organization and to enter
into the Employment Agreement by signing both copies of this letter
and returning one copy to me.
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Very truly yours,
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MB Financial, Inc.
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/s/ Mitchell Feiger
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Mitchell Feiger, Chief Executive
Officer
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Acknowledged and agreed to
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this 1st day of May, 2006.
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/s/ Richard M. Rieser, Jr.
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Richard M. Rieser, Jr.
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Appendix A to May 1, 2006
Letter
to Richard M. Rieser,
Jr.
EMPLOYMENT
AGREEMENT
THIS AGREEMENT (this
“Agreement”) is made and entered into as of this
day of
,
2006 by and between MB Financial, Inc. (the
“Corporation”) and Richard M. Rieser, Jr. (the
“Executive”).
WHEREAS, the Executive is the
President and Chief Executive Officer of First Oak Brook
Bancshares, Inc. (“FOBB”) and its subsidiary, Oak Brook
Bank, and is a party to a written transitional employment agreement
and other agreements with FOBB referred to herein;
WHEREAS, effective as of the date
set forth above, FOBB 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 FOBB;
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; (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 FOBB
(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.
(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 “FOBB Stock Options” refer to agreements with and
plans maintained by FOBB with respect to which Executive is a party
or a participant, in each case as in effect on the day immediately
prior to the
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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.
(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
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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 the Executive’s death,
disability or Retirement (as defined under the Plan). 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 31 st 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
on
