AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT DATED FEBRUARY 8, 2006 WITH JAY FRITZ
Exhibit 10.52
This Amendment No. 1 by and between Midwest Banc Holdings, Inc. (the “Employer”)
and ▇▇▇ ▇▇▇▇▇ (the “Employee”), dated effective as of
March 12, 2008.
R E C I T A L S
A. The Employer (who acquired Royal American Corporation on July 1, 2006) and
the Employee are parties to an Employment Agreement entered into as of June 15, 2004 and
amended and restated effective February 8, 2006 (the “Agreement”) governing the terms and
conditions of Employee’s employment with the Employer.
B. The Employer and the Employee desire to amend certain provisions to the
Agreement to comply with Section 409A of the Internal Revenue Code and the Treasury
regulations thereunder.
NOW THEREFORE, the parties agree as follows:
1. Paragraph A of Section 5 of the Agreement is amended in its entirety to read as follows, effective January 1, 2008:
A. Termination By Employer. In the event that the Employee’s
employment is terminated by the Employer prior to November 1, 2010, unless such
termination by the Employer is for Due Cause (as defined in paragraph B), the
Employee shall continue to receive the compensation and benefits as provided in
Section 3 and 4 of the Agreement for three (3) years, without regard to Employee’s
continued service. The schedule for the time of the salary payments will be the
same schedule as the time for receiving salary payments during the period of the
Employee’s employment. Similarly, the form of the payment shall be the same form as
the Employee was receiving during the period of the Employee’s employment. The
schedule for the time and form of payment are fixed as provided herein and may not
be modified by the Employee or the Employer without compliance with Section 409A of
the Internal Revenue Code (the “Code”). All other rights and benefits that the
Employee may have under any benefit plans or programs of the Employer shall be
determined in accordance with the terms and conditions of such plans or programs
based upon the date of the Employee’s actual termination of employment with the
Employer.
2. Paragraph C of Section 5 of the Agreement is amended in its entirety to read as
follows, effective January 1, 2008:
C. Disability. In the event the Employee suffers from a “Disability”
(as hereinafter defined), the Employee’s employment with Employer shall terminate
on the date on which the Disability occurs, but the Employee shall
continue to receive the Base Salary for a period of ninety (90) days from the date
of termination and Employer-paid health insurance coverage as described in Section
1 above for the Employee and his spouse (if the Employee is married on the date of
termination) until the Employee and his spouse reach age sixty-five (65) or such
later age as necessary for Medicare eligibility. The schedule for the time of the
salary payments and the in-kind health insurance coverage will be the same schedule
as the time for receiving salary payments and the in-kind health insurance coverage
during the period of the Employee’s employment. Similarly, the form of the payment
shall be the same form as the Employee was receiving during the period of the
Employee’s employment. The schedule for the time and form of payment are fixed as
provided herein and may not be modified by the Employee or the Employer without
compliance with Section 409A of the Code. In no event may the Employer substitute
cash or cash equivalents for the Employer-paid health insurance coverage. All other
rights and benefits that the Employee may have under any benefit plans or programs
of the Employer shall be determined in accordance with the terms and conditions of
such plans or programs based upon the date of the Employee’s actual termination of
employment with the Employer. For purposes of this Agreement, “Disability” shall
mean the inability or incapacity (by reason of a medically determinable physical or
mental impairment) of the Employee to perform the duties and responsibilities
related to the job or position with the Employer described in Section 2 of this
Agreement for a period that lasts, or can reasonably be expected to last, more than
180 days. Such inability or incapacity shall be documented to the reasonable
satisfaction of the Employer by the appropriate correspondence from registered
physicians reasonably satisfactory to the Employer, and the Employee agrees to
submit to an examination by the Employer’s physicians for the purpose of making
such determination.
3. Paragraph D of Section 5 of the Agreement is amended in its entirety to read as
follows, effective January 1, 2008:
D. Death. In the event of the death of the Employee, the Employee’s
employment with Employer shall terminate on the date on the date of death. The
estate or named beneficiary of the Employee shall continue to receive the Base
Salary for a period of ninety (90) days from the date of termination. If the
Employee is married at the date of termination, the Employee’s spouse shall receive
Employer-paid health insurance coverage to be determined by the Employer until the
spouse remarries or reaches age sixty-five (65) or such later age as necessary for
Medicare eligibility. The schedule for the time of the salary payments and the
in-kind health insurance coverage will be the same schedule as the time for
receiving salary payments and the in-kind health insurance coverage during the
period of the Employee’s employment. Similarly, the form of the payment shall be
the same form as the Employee was receiving during the period of the Employee’s
employment. The schedule for the time and form of payment are fixed as provided
herein and may not be modified by the Employee or the Employer without compliance
with Section 409A of the Internal Revenue Code (the “Code”). In no event may the
Employer substitute cash or cash equivalents for the Employer-paid health insurance
coverage. All other rights and benefits
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that the Employee (or his estate or named beneficiary) may have under any benefit
plans or programs of the Employer shall be determined in accordance with the terms
and conditions of such plans or programs based upon the date of the Employee’s
actual termination of employment with the Employer on the date of death.
4. Section 6 of the Agreement is amended in its entirety to read as follows, effective
January 1, 2008:
6. Change in Control. For purposes of this Agreement, “Change in
Control” shall mean a change in the ownership or effective control of the Employer,
or in the ownership of a substantial portion of the assets of the Employer as
provided in Section 409A(a)(2)(A)(v) of the Code and the final Treasury regulations
thereunder. In accordance with the final Treasury regulations, “Change in Control”
means any one of the events described below
A. Change in Ownership. A change in the ownership of the
Employer occurs on the date that any person or persons acting as a group
acquires ownership of stock of the Employer that, together with stock
held by such person or group, constitutes more than fifty (50) percent of
the total fair market value or total voting power of the stock of such
Employer. If a person or group is considered to own more than fifty (50)
percent of the total fair market value or total combined voting power of
the stock of the Employer, the acquisition of additional stock by the same
person or persons is not considered to cause a change in the ownership of
the Employer (or to cause a change in the “effective control of the
Employer” within the meaning of Section 6.C).
B. Change in Effective Control. A change in the effective
control of the Employer occurs on the date that a majority of the
Employer’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 Employer’s board of directors prior to the date of the
appointment or election.
C. Change in Ownership of a Substantial Portion of the
Employer’s Assets. A change in the ownership of a substantial portion of
the Employer’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
Employer that have a total gross fair market value equal to or more than
fifty (50) percent of the total gross fair market value of all of the
assets of
the Employer immediately prior to such acquisition or acquisitions. For
purposes of this Agreement, “Good Reason” shall mean, without the
Employee’s express written consent, the occurrence of any of the
following: (v) a significant adverse change in the nature or scope of
Employee’s position, duties or responsibilities as in effect immediately
after the Effective Time; (w) a relocation of Employee’s principal office
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to an office that is more than thirty-five (35) highway miles from Employee’s principal
office immediately prior to the Effective Time, unless such relocation does not increase
the actual distance required for Employee to commute from his home to the new place of
business by more than ten (10) miles; (x) a reduction of the Employee’s annual salary to
a rate which is less than the Employee’s annual salary rate as of the Effective Time; (y)
a breach of this Agreement by the Employer; or (z) providing Employee incentive
compensation opportunities which are materially less favorable to Employee than the
opportunities provided to Employee as of immediately after the Effective Time (it being
understood that incentive compensation is based upon performance and that there are no
minimum guaranteed amounts of actual incentive compensation). If following a Change in
Control of the Employer, the Employee is terminated by the Employer or a related employer
for reasons other than Cause, death or Disability, or the Employee voluntarily terminates
employment for “Good Reason” (as defined below), the Employer shall, without regard to
the notice period described in Section 1 above, receive the following:
Y. A monthly payment equal to one twelfth (1/12) of the Employee’s average
total annual compensation for the last three (3) years of full-time employment.
For purposes of this subsection, the term “total annual compensation” shall mean
the dollar value of the benefits provided in Section 3 of this Agreement. The
Employee shall receive such monthly payments for a period of thirty-five (35)
months commencing the month his employment is terminated. The schedule for the
time of the monthly payments will be the same schedule as the time for receiving
salary payments during the period of the Employee’s employment. Similarly, the
form of the payment shall be the same form as the Employee was receiving during
the period of the Employee’s employment. The schedule for the time and form of
payment are fixed as provided herein and may not be modified by the Employee or
the Employer without compliance with Section 409A of the Code.
Z. Employer-paid health insurance coverage as described in Section 1 above
for the Employee and his spouse (if the employee is married on the date of
termination) until the Employee and his spouse reach age sixty-five (65) or such
later age as necessary for Medicare eligibility. The schedule for the time of
the in-kind health insurance coverage will be the same schedule as the time for
receiving the in-kind health insurance coverage during the period of the
Employee’s employment. In no event may the Employer substitute cash or cash
equivalents for the Employer-paid health insurance coverage.
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Notwithstanding the foregoing, payments to the Employee may not exceed
299% of his Base Amount as defined in Section 280G(b)(3) of the Code (“Change
in Control Payment”); provided, however, if the Change in Control Payment to
Employee would cause the Employer to contravene any law, regulation or policy
applicable to the Employer, the Employer and Employee agree that such Change
in Control Payment shall be made to the extent permitted by law, regulation
and policy, and the remainder of such Change in Control Payment shall be made
from time to time at the earliest time permitted by law, regulation and
policy.
In the event the Employee’s employment is terminated due to a Change in
Control, receipt of the payments and benefits in this Section is conditioned
upon the Employee’s compliance with the restrictive covenants contained in
the following Sections 7 or 8.
5. Sections 9A and 9B of the Agreement are amended in their entirety to read as
follows, effective January 1, 2008:
| A. | If to the Employer, addressed to it at: | |||
| Midwest Banc Holdings, Inc. | ||||
| Chairman of the Compensation Committee | ||||
| ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇. | ||||
| ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||||
| with a copy to | ||||
| Midwest Banc Holdings, Inc. | ||||
| Chief Executive Officer | ||||
| ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇. | ||||
| ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||||
| B. | If to the Employee, addressed to his attorney at: | |||
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. | ||||
| Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLC | ||||
| ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. | ||||
| ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
6. Section 20 of the Agreement is amended in its entirety to read as follows,
effective January 1, 2008:
20. Restriction on Timing of Distributions. Notwithstanding any
provision of this Agreement to the contrary, if the Employee is considered a
Specified Employee (as defined herein), the provisions of this Section 20 shall
govern all distributions hereunder. If benefit distributions which would otherwise
be made to the Employee due to Termination of Employment are limited because the
Employee is a Specified Employee, then such distributions
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shall not be made during the first six (6) months following Termination of
Employment. Rather, any distribution which would otherwise be paid to the Employee
during such period shall be accumulated (without the adjustment for the time value
of money) and paid to the Employee in a lump sum on the first day of the seventh
month following Termination of Employment. All subsequent distributions shall be
paid in the manner specified. The term “Specified Employee” means an employee who,
as of the date of the employee’s Termination of Employment, is a key employee of
the Employer. Notwithstanding the foregoing, an employee is a Specified Employee
only if the stock of the Employer or any entity with whom the Employer would be
considered a single employer under Section 414(b) or Section 414(c) of the Code is
publicly traded on an established securities market or otherwise. For purposes of
this Agreement, an employee is a key employee if the employee meets the
requirements of Section 416(i)(l)(A)(i), (ii), or (iii) of the Code (applied in
accordance with the regulations thereunder and disregarding Section 416(i)(5)) at
any time during the twelve (12) month period ending on December 31 (the
“identification period”). For purposes of identifying a Specified Employee, the
definition of compensation under Treasury Regulation Section 1.415(c)-2(a) is
used, applied as if the Employer were not using any safe harbor provided in
Treasury Regulation Section 1.415(c)-2(d), were not using any of the special
timing rules provided in Treasury Regulation Section 1.415(c)-2(e), and were not
using any of the special rules provided in Treasury Regulation Section
1.415(c)-2(g). If the Employee is a key employee during an identification period,
the Employee is treated as a key employee for purposes of this Agreement during
the twelve (12) month period that begins on the first day of April following the
close of the identification period.
* * *
IN WITNESS WHEREOF, the Employee and a duly authorized officer of the Employer have executed
this Amendment No. 1 as of the date set forth above.
| Employer: | ||||
| Employee: | MIDWEST BANC HOLDINGS, INC. for itself and its Subsidiaries | |||
/s/ ▇▇▇
▇▇▇▇▇
|
By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||
▇▇▇
▇▇▇▇▇
|
Title: | President & CEO | ||
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