Compensatory Arrangements of Certain
Officers
On
December 2, 2009, based on the recommendation of the Organization and
Compensation Committee (the “Committee”) of the Board of Directors (the “Board”)
of MB Financial, Inc. (the “Company”), the Board approved adjustments to the
base salaries of Mitchell Feiger, President and Chief Executive Officer, and
Jill E. York, Vice President and Chief Financial Officer, to take effect January
1, 2010. The adjustments address the impact of the Interim Final Rule (“IFR”) on
TARP Standards for Compensation and Corporate Governance issued in June 2009 by
the U.S. Department of the Treasury (the “Treasury”) on the compensation the
Company is permitted to pay to Mr. Feiger and Ms. York. The IFR imposes
compensation restrictions on TARP participants, such as the Company, which
include a prohibition on the payment or accrual of bonuses (including equity
based incentive compensation, other than long term
restricted stock awards which comply with the IFR) to the Company’s five most highly
compensated employees. The salary adjustments do
not increase the executive’s target total compensation. The salary adjustments
shift a portion of the executive’s total compensation to fixed from variable
compensation consistent with the TARP restrictions. The Board or Committee
may use permitted long-term restricted stock awards to deliver total
compensation to the executives which reflect performance and market
factors.
As a
result of the salary adjustments, Mr. Feiger’s base salary will be increased by
$471,000 to $1.1 million and Ms. York’s base salary will be increased by
$156,000 to $450,000. The Board determined that for each executive, 60% of the
salary adjustment will be paid in fully vested shares of MB Financial common
stock (“Salary Stock”) issued under the Company’s Omnibus Incentive Plan and the
remainder will be paid in cash. The number of shares of Salary Stock
issued to each executive will be determined each pay period by dividing the
amount of salary to be paid in stock by the reported closing market price for
the Company’s common stock on the pay date for such pay period (or if not a
trading day, on the immediately preceding trading day).
As a
condition of receiving the salary adjustment, Mr. Feiger and Ms. York will enter
into agreements with the Company providing that the executive may not sell or
otherwise transfer the shares of Salary Stock for two years, except in the event
of disability or death. The salary
adjustment amount will not be taken into account as “salary” or “compensation”
for purposes of determining the retirement benefits
provided to Mr. Feiger under his employment agreement. Finally, the Board
or Committee may, in its sole discretion and without the executive’s consent,
suspend, modify or terminate this compensation structure at any
time.
In
addition to the salary adjustments, the Board, based on the recommendation of
the Committee, approved long-term restricted stock grants to Mr. Feiger, Ms.
York and Burton J. Field, Vice President and President of Lease Banking, of
5,876, 2,435 and 2,806 shares, respectively. As required by the IFR, the
restricted stock will not vest until the second anniversary of the date of
grant, provided the executive remains continuously employed with the Company
(except in the event of death or disability or certain change in control events)
and, once vested, the shares may not be sold or otherwise transferred by the
executive except to the extent the Company has redeemed the preferred stock held
by the Treasury. The form of the restricted stock agreement for these
grants is attached hereto as Exhibit 10.18C and incorporated herein by
reference.
Retirement
of Thomas Fitzgibbon
On
December 1, 2009, Thomas Fitzgibbon, Executive Vice President and director of MB
Financial Bank, President of MB Financial Community Development Corporation and
President of the MB Charitable Foundation (who was a named executive officer in
the Company’s 2009 proxy statement), has advised the Company that he will be
retiring on January 8, 2010.
Item
9.01. Financial Statements and Exhibits.