Exhibit 10.3

[OLD SECOND BANCORP LETTERHEAD]

January   , 2009

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED

[Name of Executive]

[Street Address]

[City, State  Zip]

Dear [Insert Name]:

Old Second Bancorp, Inc. (the “ Company ”) anticipates entering into a Letter Agreement and Securities Purchase Agreement (collectively, the “ Participation Agreement ”) with the United States Department of Treasury (“ Treasury ”) that provides for the Company’s participation in the Treasury’s TARP Capital Purchase Program (the “ CPP ”).  If the Company does not participate or ceases at any time to participate in the CPP, this letter shall be of no further force and effect.

For the Company to participate in the CPP and as a condition to the closing of the investment contemplated by the Participation Agreement, the Company is required to establish specified standards for incentive compensation to its senior executive officers and to make changes to its compensation arrangements.  To comply with these requirements, and in consideration of the benefits that you will receive as a result of the Company’s participation in the CPP, you agree as follows:

(1)                                   No Golden Parachute Payments .  The Company is prohibiting any golden parachute payment to you during any “CPP Covered Period.”  A “ CPP Covered Period ” is any period during which (A) you are a senior executive officer and (B) Treasury holds an equity or debt position acquired from the Company in the CPP.

(2)                                   Recovery of Bonus and Incentive Compensation .  Any bonus and incentive compensation paid to you during a CPP Covered Period is subject to recovery or “clawback” by the Company if the payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria.

(3)                                   Compensation Program Amendments .  Each of the Company’s compensation, bonus, incenti