mbfi8k121407.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported) December 14,
2007
MB
FINANCIAL, INC.
(Exact
name of registrant as specified in its charter)
Maryland 0-24566-01 36-4460265
(State
or other
jurisdiction (Commission
File No.) (IRS
Employer
jurisdiction of incorporation)
Identification Number)
800
West
Madison Street, Chicago,
Illinois 60607
(Address of principal
executive offices) (Zip
Code)
Registrant's
telephone number, including area code: (888)
422-6562
N/A
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[
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Written
communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[
]
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Pre-commencement
communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On
December 14, 2007, MB Financial, Inc. (the “Company”) and Mitchell Feiger, the
Company’s President and Chief Executive Officer, entered into a new employment
agreement which replaces his prior employment agreement with the Company dated
March 19, 2003. That same day, MB Financial Bank, N.A., a wholly
owned subsidiary of the Company (the “Bank”), entered into: (i) amendments of
existing change in control severance agreements with each of Jill E. York,
Vice
President and Chief Financial Officer of the Company and Executive Vice
President and Chief Financial Officer of the Bank, Thomas D. Panos, President
and Chief Commercial Banking Officer of the Bank, and Thomas P. FitzGibbon,
Jr.,
Executive Vice President of the Bank; (ii) new change in control severance
agreements with each of Larry J. Kallembach, Senior Vice President and Chief
Information Officer of the Bank, and Brian Wildman, Senior Vice President and
Head of Wealth Management of the Bank, which replace existing change in control
severance agreements; and (iii) change in control severance agreements with
each
of Rosemarie Bouman, Executive Vice President, Administration of the Bank,
and
Susan Peterson, Chief Retail Banking Officer of the Bank. In
addition, on December 14, 2007, the Company entered into tax gross up agreements
with each of Messrs. Kallembach and Wildman and Ms. Bouman and Ms.
Peterson. These agreements and amendments are described briefly
below. These agreements and amendments are filed as exhibits to this
Form 8-K.
New
Employment Agreement with Mr. Feiger. Like his prior employment
agreement, Mr. Feiger’s new employment agreement provides for a three-year term
that is extended by one day on a daily basis (so that the term of the agreement
is always three years) unless the Company gives notice that the extensions
will
cease. The new employment agreement entitles Mr. Feiger to an annual
base salary of not less than his current base salary of
$600,000. Under the new employment agreement, Mr. Feiger will be
eligible to earn an annual cash bonus, at target, equal to not less than 60%
of
his base salary, with the possibility of earning less or more than that amount
depending on the level of achievement of performance criteria established by
the
Company’s Board of Directors or the Organization and Compensation Committee (the
“Committee”) of the Company’s Board of Directors. Mr. Feiger is also
eligible to receive discretionary bonuses, if any, as the Board or Committee
may
award him.
Like
the
prior employment agreement, the new employment agreement entitles Mr. Feiger
to
participation in benefit plans and the receipt of fringe benefits to the same
extent as the other executive officers of the Company and the Bank, including
but not limited to, payment by the Company of certain club dues and the use
of a
company car, and to long-term disability coverage and benefits as in effect
on
the date of the new employment agreement, to the extent available at reasonable
cost. The new employment agreement also provides that on each
December 31st
during the term of the agreement (starting December 31, 2007), provided that
he
is then employed by the Company, Mr. Feiger will receive a fully-vested employer
contribution to his account under the Company’s non-stock non-qualified deferred
compensation plan in an amount equal to 20% of his base salary then in effect
(the “Deferred Compensation Contribution”). The Deferred Compensation
Contribution provision was made a part of Mr. Feiger’s new employment agreement
primarily in consideration of new restrictive covenants applicable to Mr. Feiger
following the termination of his employment and for changes in the termination
payments under the new employment agreement compared with those under the prior
employment agreement, as discussed below.
The
new
employment agreement provides that Mr. Feiger is to be considered for annual
awards of stock options and/or other stock-based awards under the Company’s
Amended and Restated Omnibus Incentive Plan, with the expectation that his
awards will have a value on the date of grant, at target, equal to 100% of
his
salary earned for the preceding calendar year. The mix and terms and
conditions of Mr. Feiger’s awards generally will be the same as the awards made
at the same time to the other senior officers of the Company. Each
stock option granted to Mr. Feiger will have a term of ten years (or such other
period as applies under the terms of stock options granted at the same time
to
other senior officers) and may be subject to a vesting schedule, provided that
any such vesting will continue following an “involuntary termination” (as
defined below) of Mr. Feiger’s employment and will accelerate in the event of
Mr. Feiger’s death or disability or in the event of a “change in control” (as
defined below) if the unvested portion of the stock option would otherwise
terminate, in whole or in part, by reason of the change in
control. All stock options which have vested at the time of
termination of Mr. Feiger’s employment will remain exercisable for one year (but
not beyond the option expiration date), and any stock options that vest
following an involuntary termination of Mr. Feiger’s employment will remain
exercisable for one year following the vesting date (but not beyond the option
expiration date). Notwithstanding the foregoing, any outstanding
stock option awarded to Mr. Feiger (vested or unvested) will be forfeited in
the
event his employment is terminated for cause or due to specified misconduct
on
his part under the federal banking laws.
Similar
to the prior employment agreement, the term “involuntary termination” is defined
in the new employment agreement to include termination of Mr. Feiger’s
employment by the Company (other than for cause or due to death, disability
or
specified misconduct on his part under the federal banking laws) without his
consent, or by Mr. Feiger following a material reduction of or interference
with
his duties, responsibilities or benefits without his consent or within 90 days
after he receives written notice from the Company that the term of the agreement
will not be extended (referred to below as a “Non-Extension Termination”),
provided that Mr. Feiger has given timely and proper notice to the Company
and
the Company does not timely cure the circumstances giving Mr. Feiger the right
to terminate.
The
term
“change in control” is defined in the new employment agreement to mean the
occurrence of any of the following: (i) any person becomes the beneficial owner
of 35% or more of the voting stock of the Company or the Bank; (ii) individuals
who were directors of the Company on the date of the new employment agreement
(referred to as the “incumbent board”) cease to represent a majority of the
Board of Directors, except to the extent new directors are supported by the
incumbent board; (iii) consummation of a reorganization, merger or consolidation
of the Company or the Bank, other than, in the case of the Company, a
transaction where the Company’s stockholders prior to the transaction hold more
than 60% of the outstanding shares of the resulting entity following the
transaction, or, in the case of the Bank, a transaction where the Company owns
more than 50% of the outstanding securities of the resulting institution; or
(iv) consummation of a sale of all or substantially all of the assets of the
Company or the Bank or approval by the stockholders of the Company or the Bank
of a plan of complete liquidation of the Company or the Bank.
The
new
employment agreement provides that if Mr. Feiger is involuntarily terminated
prior to and not in connection with a change in control, then:
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(1)
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He
will receive monthly payments equal to the sum of one-twelfth of
his
then-current base salary, one-twelfth of the average annual cash
incentive
bonuses received by him for the two full calendar years preceding
the date
of termination, and one-twelfth of the amount of the Deferred Compensation
Contribution that he otherwise would have received on the next December
31st,
based on his then-current base salary. These payments will continue
until
the end of the agreement’s term unless the involuntary termination is a
Non-Extension Termination, in which case the payments will continue
for 18
months after the date of termination. Under his prior
employment agreement, the monthly payments to Mr. Feiger following
a
termination of his employment under these circumstances did not include
an
amount for the Deferred Compensation Contribution, and the monthly
payments following a Non-Extension Termination continued for 12
months.
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(2)
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Mr.
Feiger will, for himself, his spouse and his eligible dependents,
continue
to receive health benefit coverage generally at the Company’s sole cost,
other than co-payments and deductibles, and on terms as favorable
to him
as to other executive officers of the Company, until he becomes eligible
for Medicare benefits (and for his spouse until the date that is
seven
months after he becomes eligible for Medicare benefits). In the
event of Mr. Feiger’s death prior to becoming eligible for Medicare
benefits, his surviving spouse and eligible dependents will receive
the
Company-provided health benefits described above until seven months
after
the date on which Mr. Feiger would have been eligible for Medicare
benefits if he had survived. After Mr. Feiger becomes
eligible for Medicare benefits, he may elect to continue receiving
the
health benefits described above at his sole cost for the remainder
of his
lifetime. This continuation of health benefit coverage, which
is essentially the same health benefit coverage continuation as was
provided for under Mr. Feiger’s prior employment agreement, is referred to
below as the “Post-Employment Health
Benefit.”
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(3)
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Mr.
Feiger will receive all other accrued but unpaid amounts to which
he is
entitled under the agreement, including any unpaid salary, bonus,
expense
reimbursements and vested employee benefits. These amounts are
referred to below as “Accrued
Compensation.”
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The
new
employment agreement provides that if Mr. Feiger is involuntarily terminated
in
connection with or following a change in control, then:
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(1)
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He
will receive any Accrued Compensation and the Post-Termination Health
Benefit.
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(2)
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If
the involuntary termination occurs in connection with or within 18
months
after a change in control, he also will receive a lump sum amount
in cash
equal to three times the sum of his then current base salary and
target
annual bonus (60% of his then current base salary) plus an amount
equal to
the present value of the annual Deferred Compensation Contributions
that
otherwise would have been credited to Mr. Feiger pursuant to the
agreement
on each subsequent December 31st until the later of three years
after the date of termination of employment or December 31st of
the calendar year in which Mr. Feiger would attain age
60.
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By
contrast, Mr. Feiger’s prior employment agreement provided that if his
employment were involuntarily terminated in connection with or following a
change in control, he would have received, in addition to any Accrued
Compensation and substantially the same Post-Termination Health Benefit, a
lump
sum payment equal to 299% of his “base amount” (as defined in Section 280G of
the Internal Revenue Code) of compensation, plus, if he offered to continue
to
work in his present position but that offer were rejected by the Company or
its
successor, monthly payments (not to exceed $1,500,000 in the aggregate) equal
to
the sum of one-twelfth of his then-current base salary and one-twelfth of the
average annual cash bonuses received by him for the two full calendar years
preceding the date of termination. These payments would have
continued for the lesser of the remaining term of the agreement and 18 months
after the date of termination and been subject to reduction by the amount of
any
earned income from providing services to another company during the payment
period.
Mr.
Feiger’s existing tax gross up agreement with the Company dated November 3, 2004
was not modified in connection with the new employment agreement and remains
in
effect. The tax gross up agreement provides that if Mr. Feiger
becomes entitled to receive payments or benefits in connection with a change
in
control, then to the extent such payments or benefits constitute “excess
parachute payments” under Section 280G of the Internal Revenue Code, he
generally will be paid an additional amount (referred to as a “gross up
payment”) that will offset on an after tax basis, the effect of any excise tax
consequently imposed upon him under Section 4999 of the Internal Revenue
Code.
Like
the
prior employment agreement, the new employment agreement provides that if Mr.
Feiger voluntarily terminates his employment for a reason that does not
constitute “involuntary termination,” if the Company terminates Mr. Feiger’s
employment after he has been disabled for one year, or if Mr. Feiger’s
employment terminates due to death, then in any such case the Company’s only
obligations under the agreement will be the payment of any Accrued Compensation
and provision of the Post-Employment Health Benefit (to Mr. Feiger’s surviving
spouse and eligible dependents, if the termination is due to Mr. Feiger’s
death). As under the prior employment agreement, under the new
employment agreement, if Mr. Feiger’s employment is terminated for cause or for
specified misconduct on his part under the federal banking laws, the Company’s
only post-termination obligation under the agreement will be the payment of
any
Accrued Compensation.
Unlike
the prior employment agreement, the new employment agreement imposes
non-competition and non-solicitation covenants that will apply for one year
following the termination of Mr. Feiger’s employment for any
reason. If Mr. Feiger breaches these covenants following an
involuntary termination of his employment, the Company will be entitled to
recover any amounts paid to him as a result of that termination.
Amendments
to Change in Control Severance Agreements with Ms. York and Messrs. Panos and
FitzGibbon. Each of Ms. York and Messrs. Panos and FitzGibbon
entered into a change in control severance agreement with the Bank in 2002
which
provides that if a change in control of the Company or the Bank occurs, and
within 24 months thereafter the executive’s employment is involuntarily
terminated without just cause or the executive voluntarily terminates his or
her
employment for good reason (defined generally as a specified reduction in the
executive’s duties, responsibilities or benefits), he or she will be entitled to
receive the following severance benefits:
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(1)
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a
lump sum amount in cash equal to the executive’s annual base salary
multiplied by two plus the executive’s average annual bonus over the last
two complete fiscal years multiplied by
two;
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(2)
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immediate
vesting of all of the executive’s benefits under all non-qualified
retirement plans of the Bank and its affiliates in which the executive
participates, subject, in the case of stock options, to the terms
of the
plan under which they were granted;
and
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(3)
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continuation
of health, dental, long-term disability and group term life insurance
coverage at the same premium cost to the executive until the second
anniversary of the executive’s termination date without regard to the
federal income tax consequences of that continuation, subject to
earlier
discontinuation if the executive receives substantially similar benefits
from a subsequent employer.
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The
change in control severance agreements with Ms. York and Messrs. Panos and
FitzGibbon were amended on December 14, 2007 primarily to conform the definition
of the term “change in control” contained in their change in control severance
agreements with the definition of that term in Mr. Feiger’s new employment
agreement as described above, except that, consistent with the original terms
of
these change in control severance agreements, a reorganization, merger or
consolidation involving the Company will constitute a change in control if
the
Company’s stockholders following the transaction own less than 70% (compared to
60% in Mr. Feiger’s employment agreement) of the outstanding shares of the
resulting entity following the transaction. Each of Ms. York and Messrs. Panos
and FitzGibbon also is a party to a tax gross up agreement with the Company
dated November 3, 2004 that is substantially identical to the tax gross up
agreement with Mr. Feiger as described above. The tax gross up
agreements with Ms. York and Messrs. Panos and FitzGibbon were not modified
in
connection with the amendments to their change in control severance agreements
and remain in effect.
New
Change in Control Severance Agreements with Messrs. Kallembach and Wildman
and
Change in Control Severance Agreements with Ms. Bouman and
Peterson. The new change in control severance agreements with
Messrs. Kallembach and Wildman and the change in control severance agreements
with Ms. Bouman and Ms. Peterson provide for the same severance payments and
benefits under the same circumstances as are provided under the amended change
in control severance agreements with Ms. York and Messrs. Panos and FitzGibbon,
except that the definition of the term “change in control” in the agreements
with Messrs. Kallembach and Wildman and Ms. Bouman and Ms. Peterson is identical
to the definition of that term in Mr. Feiger’s new employment
agreement. Messrs. Kallembach’s and Wildman’s prior change in control
severance agreements with the Bank provided for the same types of benefits
payable under their new change in control severance agreements, except that
the
lump sum payment was equal to one (rather than two) times their annual base
salaries and average annual bonuses for the preceding two fiscal years, and
the
continuation of health, dental, long-term disability and group term life
insurance coverage was for one year (rather than two years) following
termination of their employment. The prior change in control
severance agreements were entered into before Messrs. Kallembach and Wildman
attained executive officer status as a result of their promotion to the
Company’s management committee, and the severance benefits under their new
change in control severance agreements are the same as those provided to each
other management committee member who has a change in control severance
agreement with the Bank.
The
tax
gross up agreements entered into with Messrs. Kallembach and Wildman and Ms.
Bouman and Ms. Peterson are substantially the same as the existing tax gross
up
agreements with Mr. Feiger, Ms. York and Messrs. Panos and FitzGibbon, as
described above.
Item
9.01 Financial Statements and Exhibits
(d) Exhibits
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10.1
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Employment
Agreement, dated December 14, 2007, between Mitchell Feiger and MB
Financial, Inc.
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10.2
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Amendment,
dated December 14, 2007, to Change in Control Severance Agreement
dated
February 19, 2002 between Jill E. York and MB Financial Bank,
N.A.
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10.3
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Amendment,
dated December 14, 2007, to Change in Control Severance Agreement
dated
February 19, 2002 between Thomas D. Panos and MB Financial Bank,
N.A.
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10.4
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Amendment,
dated December 14, 2007, to Change in Control Severance Agreement
dated
January 4, 2002 between Thomas P. FitzGibbon, Jr. and MB Financial
Bank,
N.A.
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10.5
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Change
in Control Severance Agreement dated December 14, 2007 between Larry
J.
Kallembach and MB Financial Bank,
N.A.
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10.6
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Change
in Control Severance Agreement dated December 14, 2007 between Brian
Wildman and MB Financial Bank, N.A.
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10.7
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Change
in Control Severance Agreement dated December 14, 2007 between Rosemarie
Bouman and MB Financial Bank, N.A.
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10.8
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Change
in Control Severance Agreement dated December 14, 2007 between Susan
Peterson and MB Financial Bank,
N.A.
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10.9
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Tax
Gross Up Agreement dated December 14, 2007 between Larry J. Kallembach
and
MB Financial, Inc.
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10.10
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Tax
Gross Up Agreement dated December 14, 2007 between
Brian Wildman and MB Financial,
Inc.
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10.11
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Tax
Gross Up Agreement dated December 14, 2007 between Rosemarie Bouman
and MB
Financial, Inc.
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10.12
Tax Gross Up Agreement dated December 14, 2007 between Susan Peterson
and
MB Financial, Inc.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
MB FINANCIAL, INC.
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Date:
December 14, 2007
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By:
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/s/
Jill E. York
Jill
E. York
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Vice
President
and Chief Financial Officer
EXHIBIT
INDEX
Exhibit
No. Description