MIDWEST BANC HOLDINGS INC
EMPLOYMENT AGREEMENT
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<TYPE>EX-10.25
<SEQUENCE>3
<FILENAME>c89512exv10w25.htm
<DESCRIPTION>EMPLOYMENT AGREEMENT
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<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;10.25</B>



<P align="center" style="font-size: 10pt"><B>EMPLOYMENT AGREEMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS EMPLOYMENT AGREEMENT (the &#147;Agreement&#148;) is made and entered into as of
the 28th day of September&nbsp;2004 (the &#147;Effective Date&#148;), by and among Midwest
Banc Holdings, Inc. (the &#147;Company&#148;), Midwest Bank and Trust Co. (the &#147;Bank,&#148;
and together with the Company, the &#147;Employer&#148;) and James J. Giancola
(&#147;Executive&#148;) (the signatories to this Agreement will be referred to jointly as
the &#147;Parties&#148;).


<P align="center" style="font-size: 10pt">WITNESSETH:



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Employer wishes to assure itself of the services of Executive for
the term of this Agreement; and


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, Executive has agreed to provide his services to Employer on the
terms and conditions set forth in this Agreement; and


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, both Employer and Executive have read and understood the terms
and provisions set forth in this Agreement and have been afforded a reasonable
opportunity to review this Agreement with their respective legal counsel.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth in this Agreement, and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Executive and Employer agree
as follows:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Term of Employment. This Agreement is effective as of the
Effective Date and shall continue in effect through December&nbsp;31, 2009 (the
&#147;Initial Period&#148;), unless terminated pursuant to Section&nbsp;4. At the end of the
Initial Term of this Agreement, the Agreement shall automatically renew for
successive one-year terms, unless Employer provides written notice to Executive
within ninety (90)&nbsp;days prior to the expiration of the then current term. Such
Initial Term and all subsequent terms shall be referred to herein as the &#147;Term
of Employment.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Duties and Authority.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;During the Term of Employment, Executive shall serve as Chief
Executive Officer and President of both Company and Bank. Executive shall
perform in a professional manner the authorized and customary duties for the
position and such other reasonable duties and responsibilities as the Board of
Directors of Bank and/or Company (the term &#147;Board of Directors&#148; as used in this
Agreement shall mean the Board of Directors of Company, unless specifically
stated otherwise) may assign to Executive from time to time, which duties shall
include, but not be limited to the following:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Executive shall provide administrative and management_services to
Company as are customarily performed by persons in similar executive positions;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Executive shall oversee the daily operation of Bank and all
subsidiary activities related to and controlled by Employer;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;Executive shall carry out and implement all proper directions and
instructions of the Board of Directors that conform with reasonable and sound
banking practices;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;Executive shall use his best efforts to operate Employer so as to
meet the growth and financial projections and budgets established and approved
by the Board of Directors, assuming such projections and budgets shall be
reasonable and realistically attainable under the


<P align="center" style="font-size: 10pt">&nbsp;
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<P align="left" style="font-size: 10pt">conditions which then exist both in Employer and local and national financial
markets; and



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;Executive shall use his best efforts to avoid any action that might
materially damage, harm or discredit the reputation of Employer, its
shareholders, or its Boards of Directors.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Notwithstanding the provisions of Section&nbsp;2(a), the duties and
responsibilities of Executive may be changed and modified from time to time by
Company at its discretion. Upon changes and modifications to Executive&#146;s duties
and responsibilities, Executive&#146;s employment with Employer shall continue to be
governed by the terms of this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;From the Effective Date through December&nbsp;31, 2004, Executive shall
devote a substantial portion of each month (exclusive of holidays) to the
attention of the business operations of Employer in such manner as the Board of
Directors and Executive agree.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Beginning January&nbsp;1, 2005 and continuing during the Term of
Employment, Executive shall devote Executive&#146;s best efforts and entire
productive time, ability and attention to the business operations of Employer,
and shall not, without the written consent of Employer, directly or indirectly,
alone or as a partner, officer, director, stockholder, employee, or consultant
of any other person, entity, association, agency, organization, or institution,
engage in any other business or profession which would necessitate Executive&#146;s
giving any portion of his time and effort to such activity. Executive shall at
all times faithfully, with diligence and to the best of Executive&#146;s ability,
experience, and talent, perform all the duties that may be required of and from
Executive pursuant to the express and implicit terms hereof to the reasonable
satisfaction of Employer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;Executive shall become informed to the best of his ability of
current developments in the banking industry applicable to Employer and shall
attend such banking seminars and schools as he or the Board of Directors deems
appropriate to keep apprised of laws, regulations, policies and procedures that
affect Employer and its operations. These activities will be at the Employer&#146;s
cost and on its time. Executive shall serve on such committees of Employer as
the Board of Directors may determine from time to time. Executive shall at all
times be subject to the direction and control of the Board of Directors, and
all acts of Executive in the performance of his duties hereunder shall be
carried out in conformity with the policies, directions and limitations as from
time to time established by the Board of Directors. Promptly after the
Effective Date, Executive shall change his primary domicile from Incline
Village, Nevada to the Chicago, Illinois metropolitan area in connection with
the performance of his duties hereunder. Executive shall not be required to
engage in any activities or exercise any powers or authority that has the
effect of violating any federal, state or local laws or regulations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Compensation and Benefits. All payments of compensation to
Executive shall be payable in accordance with Employer&#146;s ordinary payroll and
other policies and procedures.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Base Salary.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;From the Effective Date through December&nbsp;31, 2004, Employer shall pay
Executive a base monthly salary of $1,000, prorated for the actual period of
service. Employer shall also reimburse Executive for his reasonable costs of
travel to and from his domicile in Tucson, Az. And reasonable temporary living
expenses consistent with the fulfillment of his duties to Employer pursuant to
this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;Beginning January&nbsp;1, 2005 and continuing during the Term of
Employment, Employer shall pay Executive a base salary of $535,000 per full
calendar year (&#147;Base


<P align="center" style="font-size: 10pt">2
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<P align="left" style="font-size: 10pt">Salary&#148;), appropriately prorated for partial months at the commencement
and end of the term of this Agreement. Employer shall review the amount of such
Base Salary no less often than annually. Any salary adjustment (whether
increased or decreased) shall be based on: (i)&nbsp;Executive&#146;s performance since
Executive&#146;s last review; (ii)&nbsp;the performance and profitability of the
Employer; and (iii)&nbsp;the Employer&#146;s salary policy effective at the time of any
such salary review and adjustment. Employer shall have the right to deduct from
payment of all compensation to Executive hereunder any federal, state or local
taxes required by law to be withheld with respect to such payments and any
other amounts specifically authorized to be withheld or deducted by Executive.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Annual Cash Incentive Compensation. Executive, if employed on the
last day of the calendar year for which any bonus as determined by the Board of
Directors is being awarded, shall be eligible for performance-based annual cash
incentive compensation (no greater than 70% of Executive&#146;s Base Salary) and/or
stock awards as determined by the Board of Directors in accordance with
mutually agreed upon goals and objectives established by the Board of Directors
in January of each calendar year this Agreement is in force and effect.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Participation in Employee Benefit Programs. Executive shall be
entitled to participate in any benefit programs, including health insurance
benefits, applicable to all employees of Employer or to executive employees of
Employer in accordance with Employer policy and the provisions of said benefit
plans. This Agreement, which provides certain additional benefits, does not
preclude Executive&#146;s participation in such other plans of Employer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Executive Vacation Allocation. Beginning January&nbsp;1, 2005,
Executive shall be allocated a minimum of four (4)&nbsp;weeks paid vacation
annually. If vacation time is unused, unused vacation time may accumulate and
be used at a future date as deemed appropriate by Executive and Employer. If
the Executive has accumulated vacation at time of termination, accumulated
vacation time will be paid to Executive as regular pay using his Base Salary in
effect at the time of termination, prorated on a weekly basis.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Restricted Stock. As of January&nbsp;1, 2005, the Company shall grant to
Executive 150,000 restricted shares of common stock of the Company subject to
such restrictions and limitations as are commonly applied to such stock and as
agreed by the Board of Directors. The stock certificate issued pursuant to
this Section may contain additional terms and restrictions not inconsistent
with this Agreement or any restricted stock plan of the Company then in
existence and under which the restricted stock pursuant to this Section is
issued. Thirty thousand (30,000) shares granted under this Section shall be
fully vested as of January&nbsp;1, 2005, and the remaining shares granted under this
Section shall vest 30,000 on each of January&nbsp;1, 2006, 2007, 2008 and 2009 so
long as Executive is employed pursuant to this Agreement on the last day of the
calendar year preceding each such date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Stock Options. As of January&nbsp;1, 2006, the Company shall grant to
Executive options to purchase up to 100,000 shares of common stock of the
Company based on performance standards to be determined by the Board of
Directors for the year 2005. All stock options granted under this Section
shall expire ten years following the date of grant, have an exercise price
equal to the fair market value of the common stock of the Company at the time
of issuance, and be evidenced by a stock option agreement which may contain
additional terms and restrictions not inconsistent with this Agreement or any
stock option plan of the Company then in existence and under which options
pursuant to this Section are issued.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Vehicle Allowance. At Employer&#146;s election, (i)&nbsp;Employer shall
provide Executive with the use of a company-owned automobile or (ii)&nbsp;Employer
shall reimburse Executive, for Executive&#146;s transportation to and from the
offices of Employer and for use in engaging in activities in the


<P align="center" style="font-size: 10pt">3
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">name of or for the benefit of Employer. Additionally, Employer shall pay
or reimburse Executive for reasonable gas, road tolls and automobile property
insurance costs associated with the vehicle designated for use by the
Executive.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Reimbursement of Expenses. During the Term of Employment, Employer
shall promptly pay all reasonable expenses incurred by Executive for all
reasonable travel and other business related expenses incurred by him in
performing his obligations under this Agreement in accordance with Employer&#146;s
travel and business expense policy, such expenses to be reviewed by the Board
of Directors on a periodic basis. In addition, Employer shall pay for
Executive&#146;s reasonable moving expenses ( including real estate commissions,
attorneys&#146; fees and real estate settlement costs) from his
personal residence in Tucson, Arizona to the
Chicago, Illinois metropolitan area, upon Executive&#146;s presentation of such
records and information as Employer may reasonably request.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Compensation After Termination.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;If the Term of Employment is terminated (i)&nbsp;by Employer for cause
or due to the death or disability of Executive, (ii)&nbsp;by Executive or (iii)
through expiration of the Term of Employment, Employer shall have no further
obligations hereunder or otherwise with respect to Executive&#146;s employment from
and after the termination or expiration date (except payment of Executive&#146;s
Base Salary accrued through the date of termination or expiration) and Employer
shall continue to have all other rights available hereunder.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;If the Term of Employment is terminated by the Employer without
cause, Executive shall be entitled to receive as severance pay (in addition to
the payment of the Base Salary through the date of termination) an amount using
the following schedule:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Years of Service</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of Base Salary</B><HR size="1" noshade></TD>
</TR>

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<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD align="center"><DIV style="margin-left:10px; text-indent:-10px">1</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:10px; text-indent:-10px">2</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">60</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD align="center"><DIV style="margin-left:10px; text-indent:-10px">3</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">70</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom">
    <TD align="center"><DIV style="margin-left:10px; text-indent:-10px">4</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">80</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD align="center"><DIV style="margin-left:10px; text-indent:-10px">5</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>

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</DIV>


<P align="left" style="font-size: 10pt">Employer will pay such severance payment to Executive within thirty (30)&nbsp;days
of the end of the Term of Employment; provided, however, if the severance
payment to Executive would cause Employer to contravene any law, regulation or
policy applicable to Employer, Employer and Executive agree that such severance
payment shall be made to the extent permitted by law, regulation and policy,
and the remainder of such severance payment shall be made from time to time at
the earliest time permitted by law, regulation and policy. After the 30th day
following the end of the Term of Employment, the outstanding severance payment
shall, until paid, bear interest per annum at the prime lending rate as
published in <I>The Wall Street Journal </I>on the 31st day following the end of the
Term of Employment. In addition, until Executive reaches age 65 or his earlier
death, the Employer shall at Executive&#146;s expense continue on behalf of the
Executive and his spouse and dependents medical, dental, and hospitalization
benefits provided (x)&nbsp;to the Executive at any time during the 90-day period
prior to the termination hereunder or (y)&nbsp;to other similarly situated
executives who continue in the employ of the Employer. The Employer&#146;s
obligation hereunder with respect to the foregoing benefits shall be limited to
the extent that the Executive obtains any such benefits pursuant to a
subsequent employer&#146;s benefit plans, in which case the Employer may reduce the
coverage of any benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined benefit plans is
no less favorable to the Executive than the coverages and benefits required to
be provided hereunder. This provision shall not be



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<P align="left" style="font-size: 10pt">interpreted so as to limit any benefits to which the Executive or his
dependents or beneficiaries may be entitled under any of the Employer&#146;s
employee benefit plans, programs, or practices following the Executive&#146;s
termination of employment, including, without limitation, retiree medical and
life insurance benefits. Except as otherwise specifically provided herein,
Employer shall have no other obligations hereunder or otherwise with respect to
Executive&#146;s employment from and after the termination or expiration date, and
Employer shall continue to have all other rights available hereunder.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;No termination under Section&nbsp;4 shall terminate or adversely affect
any rights of Executive then vested under any disability, stock option,
restricted stock or other benefit program of Employer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;Club Fees. During the period of the Executive&#146;s employment,
Employer shall pay up to $60,000 for the Executive to join the club of his
choice and will reimburse the Executive for dues to such club not to exceed
$500 per month. The Executive agrees to use the club as entertainment for
selected Employer clients.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;Fair and Adequate Compensation. Employer and Executive acknowledge
that such compensation and the other covenants and agreements of Employer
contained herein are fair and adequate compensation for Executive&#146;s services
and for the covenants described below.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;Termination.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Death. If Executive dies during the Term of Employment and while in
the employ of Employer, this Agreement shall automatically terminate and
Employer or Company shall have no further obligation to Executive or his estate
under this Agreement (other than death benefits payable under the benefit plans
referenced in Section 3(c) or 3(d)), except that Employer shall pay Executive&#146;s
estate that portion of Executive&#146;s Base Salary under Section 3(a) accrued
through the date on which Executive&#146;s death occurred. Such payment of Base
Salary to Executive&#146;s estate shall be made in the same manner as other payroll
obligations of the Employer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Disability.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Employer may terminate this Agreement if, during the Term of
Employment, Executive shall be prevented from performing his duties hereunder
by reason of becoming disabled. For purposes of this Agreement, the term
&#147;disabled&#148; shall have the meaning set forth in Employer&#146;s long term disability
plan or, if Employer has no long term disability plan in effect at the time of
the Executive&#146;s disability, shall mean that Executive has become physically or
mentally incapable (excluding infrequent and temporary absences due to ordinary
illness) of performing the essential functions of his duties under this
Agreement for a continuous period of six (6)&nbsp;months, as determined by Employer
upon the advice of a qualified physician. In the event a dispute arises between
Executive and the Employer concerning Executive&#146;s physical or mental ability to
continue or return to the performance of his duties, Executive shall submit to
examination by a competent physician mutually agreeable to both parties. The
physician&#146;s opinion as to the Executive&#146;s capability to perform his duties will
be final and binding. During any period prior to termination during which the
Executive fails to perform his duties as a result of incapacity due to physical
or mental illness, Executive shall continue to receive his full salary at the
rate then in effect for such period until his employment terminates pursuant to
this Section&nbsp;4(b), provided that payments so made to Executive during such
period shall be reduced by the sum of the amounts, if any, payable to Executive
under any disability benefit plans of Employer that were not previously applied
to reduce such payment.


<P align="center" style="font-size: 10pt">5
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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;In the event of a termination pursuant to this Section&nbsp;4(b),
Employer shall be relieved of all its obligations under this Agreement, except
that Employer shall pay to Executive, or his estate in the event of his
subsequent death, Executive&#146;s Base Salary under Section 3(a) through the date
on which such termination shall have occurred, reduced during such period by
the amount of any benefits received by Executive under any disability policy
maintained by Employer and any death benefits payable under the benefit plans
referenced in Section 3(c) or 3(d). All such payments to Executive or his
estate shall be made in the same manner as other payroll obligations of
Employer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Discharge for Cause. At any time during the Term of Employment,
Employer may discharge Executive for cause and terminate this Agreement by
delivering to Executive a written notice of discharge. The notice of discharge
shall set forth the reasons for Executive&#146;s termination for cause. For purposes
of this Agreement, &#147;cause&#148; shall be defined as the occurrence of any of the
following events:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;The determination by the Board of Directors in the exercise of its
reasonable judgment, after consultation with its legal counsel, that Executive
has committed an act or acts constituting (A)&nbsp;a felony or other crime, whether
a felony or a misdemeanor, involving moral turpitude, dishonesty or theft, (B)
dishonesty or disloyalty with respect to Bank or Company, or (C)&nbsp;fraud;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;The determination by the Board of Directors in the exercise of its
reasonable judgment, that (i)&nbsp;the Executive has failed to follow the policies
adopted by the Board of Directors; (ii)&nbsp;that Executive has failed to meet the
performance goals established in writing by the Board of Directors in January
of each calendar year this Agreement is in effect; or (iii)&nbsp;that Executive has
engaged in such actions or omissions that would constitute unsafe or unsound
banking practices;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;The determination by the Board of Directors in the exercise of its
reasonable judgment, after consultation with its legal counsel, that Executive
has committed a breach or violation of this Agreement, and fails to cure such
breach or violation within thirty (30)&nbsp;days after written notice to Executive
by Employer specifying in reasonable detail the alleged breach or violation;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;The determination by the Board of Directors, after consultation with
its legal counsel, that Executive (A)&nbsp;has engaged in gross misconduct in the
course and scope of his employment with Employer including indecency,
immorality, gross insubordination, dishonesty, unlawful harassment or
discrimination, use of illegal drugs, or fighting or (B)&nbsp;committed a willful
act or any grossly negligent act, or the willful or grossly negligent omission
to act, which is intended to cause, has caused or is reasonably likely to
cause, material harm to Employer (including harm to its business reputation);
or


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;In the event Executive is prohibited from engaging in the business
of banking by any governmental regulatory agency having jurisdiction over Bank
or Company. For purposes of this Agreement, Executive shall not be deemed to be
in breach of this Agreement for his failure to substantially perform his duties
under this Agreement where such failure results because Executive has becomes
disabled within the meaning of Section&nbsp;4(b). In such cases, termination of
Executive shall be governed by the provisions of Section&nbsp;4(b).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Discharge without Cause. At any time during the Term of Employment,
Employer shall be entitled to terminate Executive&#146;s employment and this
Agreement &#147;without cause,&#148; by providing him with a written notice of
termination at least sixty (60)&nbsp;days in advance of the effective termination
date. Any termination of this Agreement which is not for cause, as defined
above in Section&nbsp;4(c), or which does not result from the death or disability of
Executive, as set forth in Sections 4(a) or 4(b) respectively, or a
constructive discharge as set forth in Section&nbsp;4(e), respectively, shall be
deemed to be a termination without cause.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Resignation. Executive shall be entitled to terminate this
Agreement by providing Employer with a written notice of resignation at least
ninety (90)&nbsp;days prior to the intended resignation date. Upon Executive&#146;s
resignation, he shall be entitled to receive any Base Salary which has been
earned by him through the effective date of such resignation. In lieu of having
Executive work for Employer through the effective date of the resignation,
Employer may terminate this Agreement immediately; however, Employer shall
still pay Executive amounts to which he would otherwise be entitled through the
effective date of such resignation. Upon the effective date of Executive&#146;s
resignation, Executive shall not be entitled to receive any other compensation
or benefits as provided in the individual benefit plans or agreements.
Executive has the right to purchase health insurance at his own expense through
age 65.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Non-Disclosure and Confidentiality.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Executive acknowledges that, by the nature of his duties, he will or
may have access to and become informed of confidential, proprietary, and highly
sensitive information relating to Employer and which is a competitive asset of
Employer, including, without limitation, information pertaining to: (i)&nbsp;the
identities of Employer&#146;s existing and prospective customers or clients,
including names, addresses, credit status, and pricing levels; (ii)&nbsp;the buying
and selling habits and customs of Employer&#146;s existing and prospective customers
or clients; (iii)&nbsp;financial information about Employer; (iv)&nbsp;product and
systems specifications, concepts for new or improved products and other product
or systems data; (v)&nbsp;the identities of, and special skills possessed by,
Employer&#146;s employees; (vi)&nbsp;the identities of and pricing information about
Employer&#146;s suppliers and vendors; (vii)&nbsp;training programs developed by
Employer; (viii)&nbsp;pricing studies, information and analyses; (ix)&nbsp;current and
prospective products and inventories; (x)&nbsp;financial models, business
projections and market studies; (xi)&nbsp;Employer&#146;s financial results and business
conditions; (xii)&nbsp;business plans and strategies; (xiii)&nbsp;special processes,
procedures, and services of Employer and its suppliers and vendors; and (xiv)
computer programs and software developed by Employer or its consultants.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The term Proprietary Information does not include information or
know-how which: (i)&nbsp;is in Executive&#146;s possession prior to its disclosure to him
by Employer (as shown by competent written evidence in Executive&#146;s files and
records immediately prior to the time of disclosure); (ii)&nbsp;is available to the
general public other than through any inaction or action (whether or not
wrongful) on Executive&#146;s part; or (iii)&nbsp;is approved for release by written
authorization of the Employer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Executive agrees not to: (i)&nbsp;use, at any time, any Proprietary
Information for his own benefit and for the benefit of another; or (ii)
disclose, directly or indirectly, any Proprietary Information to any person who
is not a current employee of Employer, except in the performance of the duties
assigned to Executive in this Agreement, at any time prior or subsequent to the
termination of his employment with Employer, except as such disclosure may be
required by law. Executive further agrees not to make copies of any Proprietary
Information, except in the performance of the duties assigned to him in this
Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;Return of Employer Property. Executive acknowledges that all
memoranda, notes, records, reports, manuals, books, papers, letters, client and
customer lists, contracts, software programs, information and records, drafts
of instructions, guides and manuals, and other documentation (whether in draft
or final form), and other sales or financial information and aids relating to
Employer&#146;s business, and any and all other documents containing Proprietary
Information furnished to Executive by any representative of Employer or
otherwise acquired or developed by Executive in connection with his association
with Employer (collectively, &#147;Recipient Materials&#148;) shall at all times be the
property of Employer. Within twenty-four (24)&nbsp;hours of the termination of his
employment with Employer, Executive shall return to Employer any Recipient
Materials which are in his possession, custody or


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<P align="left" style="font-size: 10pt">control.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Non-Solicitation of Customers/Clients.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Executive acknowledges that the special relationship of trust and
confidence between him, Employer, and its clients and customers creates a high
risk and opportunity for Executive to misappropriate the relationship and
goodwill existing between Employer and its clients and customers. Executive
further acknowledges and agrees that it is fair and reasonable for Employer to
take steps to protect itself from the risk of such misappropriation. Executive
further acknowledges that, at the outset of his employment with Employer and/or
throughout his employment with Employer, Executive will be provided with access
to and informed of Employer&#146;s Proprietary Information, which will enable him to
benefit from Employer&#146;s goodwill and know-how.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Executive acknowledges that it would be inevitable in the
performance of his duties as a director, officer, employee, investor, agent or
consultant of any person, association, entity, or company which competes with
Employer, or which intends to or may compete with Employer, to disclose and/or
use Employer&#146;s Proprietary Information, as well as to misappropriate Employer&#146;s
goodwill and know-how, to or for the benefit of such other person, association,
entity, or company. Executive also acknowledges that, in exchange for the
execution of the non-solicitation restriction set forth in this Section&nbsp;7, he
has received substantial, valuable consideration. Executive further
acknowledges and agrees that this consideration constitutes fair and adequate
consideration for the execution of the non-solicitation restriction set forth
in this Section.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Ancillary to the enforceable promises set forth in this Agreement,
as well as to protect the vital interests described in those Sections,
Executive agrees that, while he is employed by Employer and for a period of two
(2)&nbsp;years following the termination of his employment with the Employer,
regardless of the reason for such termination, Executive will not, without the
prior written consent of Employer, directly or indirectly, alone or for his own
account, or as owner, partner, investor, member, trustee, officer, director,
shareholder, employee, consultant, distributor, advisor, representative or
agent of any partnership, joint venture, corporation, trust, or other business
organization or entity:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;solicit the banking business of any current customers of the
Employer;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;acquire, charter, operate or enter into any franchise or other
management agreement with any financial institution;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;serve as an officer, director, employee, agent or consultant to any
financial institution, or


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;establish or operate a branch or other office of a financial
institution within the city limits of or having its main office or a branch
within fifty (50)&nbsp;miles of the main office of Bank or any of its branches.

<P align="left" style="font-size: 10pt">Executive agrees that the restriction set forth above is ancillary to an
otherwise enforceable agreement, is supported by independent valuable
consideration, and that the limitations as to time, geographical area, and
scope of activity to be restrained by this Section are reasonable and
acceptable, and do not impose any greater restraint than is reasonably
necessary to protect the goodwill and other business interests of Employer.
Executive agrees that if, at some later date, a court of competent jurisdiction
determines that the non-solicitation agreement set forth in this Section does
not meet the criteria set forth by applicable law, this Section may be reformed
by the court and enforced to the maximum extent permitted under applicable law.
Executive understands that his obligations under this Section shall not be
assignable by



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<P align="left" style="font-size: 10pt">him.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;Non-Solicitation of Employees. Executive agrees that, as part of
his employment with Employer, he will become familiar with the salary, pay
scale, capabilities, experiences, skill and desires of the Employer&#146;s
employees. Executive agrees to maintain the confidentiality of such
information. He further covenants and agrees that, for a period of two (2)
years subsequent to the termination of his employment with Employer, whether
such termination occurs at the insistence of himself or Employer, he shall not
recruit, hire, or attempt to recruit or hire, directly or by assisting others,
any other employees of Employer, nor shall he contact or communicate with any
other employees of Employer for the purpose of inducing other employees to
terminate their employment with Employer. For purposes of this covenant, &#147;other
employees&#148; shall refer to employees who were employed by, or doing business
with, Employer within twelve (12)&nbsp;months of the time of the attempted
recruiting or hiring.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Independent Covenants. Executive acknowledges that the covenants
set forth in Sections&nbsp;5, 7 and 8 are material conditions to Employer&#146;s
willingness to execute and deliver this Agreement and to provide Executive the
compensation and benefits and other consideration provided hereunder. The
parties agree that the existence of any claim or cause of action of Executive
against Employer, whether predicated on this Agreement or otherwise, will not
constitute a defense to the enforcement by Employer of such covenants. It is
specifically acknowledged that the period of one year following the termination
of employment stated in Sections&nbsp;7 and 8, during which the agreements and
covenants of Executive made in such sections are effective, is to be computed
by excluding from such computation any time during which Executive is in
violation of any provision of Sections&nbsp;7 and 8. The covenants contained in
Sections&nbsp;5, 7 and 8 will not be affected by any breach of any other provision
hereof by any party hereto. In addition, Executive&#146;s obligations under Sections
5, 7 and 8 shall survive the termination of this Agreement and Executive&#146;s
employment with Employer. Executive&#146;s obligations under Sections&nbsp;5, 7 and 8 are
in addition to, and not in limitation or preemption of, all other obligations
of confidentiality which he may have to Employer under general legal or
equitable principles, or other Employer policies.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;Remedies. In the event that Executive violates any of the
provisions set forth in Sections&nbsp;5, 7 and 8 of this Agreement, Executive
acknowledges that Employer will suffer immediate and irreparable harm which
cannot be accurately calculated in monetary damages. Consequently, Executive
acknowledges and agrees that Employer shall be entitled to immediate injunctive
relief, either by temporary or permanent injunction, to prevent such a
violation. Executive further acknowledges and agrees that this injunctive
relief shall be in addition to any other legal or equitable relief to which
Employer would be entitled.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;Early Resolution Conference. This Agreement is understood to be
clear and enforceable as written and is executed by both parties on that basis.
However, if at any time Executive seeks to challenge any provision of this
Agreement as unclear, unenforceable or inapplicable to any competitive activity
in which Executive intends to engage, Executive shall first notify the Employer
in writing and meet with a representative of the Employer and a neutral
mediator (if the Employer elects to retain one, at its expense) to discuss the
resolution of any disputes between the parties. Executive shall provide this
notification at least fourteen (14)&nbsp;days before Executive engages in any
activity that could foreseeably fall within the scope of any of the provisions
set forth in Section&nbsp;5, 7 or 8 of this Agreement. The failure to comply with
this requirement shall operate as a waiver by the Executive to challenge the
reasonable scope, clarity, applicability or enforceability of Sections&nbsp;5, 7 or
8 of this Agreement. All rights of Executive and the Employer will be preserved
if the early resolution conference requirement is complied with, even in the
event that no agreement is reached as a result of the conference.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Arbitration.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Executive recognizes that differences may arise between him, the
Employer, and the Company during or following his employment with Employer, and
that those differences may or may not be related to his employment. Executive
acknowledges that by entering into this Agreement, he anticipates gaining the
benefits of a speedy, impartial dispute-resolution procedure for resolving any
and all disputes between himself and Employer. Notwithstanding Section&nbsp;18
hereof, this Section&nbsp;12 shall be governed by the Federal Arbitration Act and to
the extent that it is inconsistent with Illinois law, it will supersede
Illinois law relating to the arbitrability of any disputes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Executive and Employer consent to the resolution by final and
binding arbitration of any claim, controversy, or dispute (&#147;claim(s)&#148;) between
Executive and Employer, whether or not such claims arise out of or relate to
his employment by Employer, in accordance with the Employment Arbitration Rules
of the American Arbitration Association in effect on the date the claim or
controversy arises. The claims covered by this Section include, but are not
limited to, claims for wages or other compensation due; claims for breach of
any contract or covenant (express or implied); tort claims (including, but not
limited to, invasion of privacy, intentional infliction of emotional distress,
assault, battery, fraud, negligence, gross negligence, negligent hiring or
retention); claims of discrimination (including, but not limited to, race,
gender, sexual harassment, religion, national origin, age, marital status, or
medical condition, handicap or disability); claims for benefits (except where
an employee benefit or pension plan specifies that its claims procedure shall
culminate in an arbitration procedure different from this one); and claims for
violation of any federal, state, or other governmental law, statute,
regulation, or ordinance, except claims excluded in the following paragraph.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Executive and Employer understand that claims for workers&#146;
compensation or unemployment compensation benefits are not covered by this
Agreement. Moreover, although Executive is prohibited from filing a lawsuit
concerning claims covered by this Agreement, Executive understands that this
Section shall not prohibit him from filing a charge or complaint with any
governmental agency. Finally, Executive understands that this Section&nbsp;12 does
not apply with respect to disputes relating to the operation of and the
enforcement of Sections&nbsp;5, 7 and 8 hereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Either party may initiate an arbitration proceeding by delivery of
written notice to the other party hereto. Resolution of such dispute shall be
resolved by a majority vote of a panel of three arbitrators. Within 30&nbsp;days
after giving or receiving a demand for arbitration, Employer and Executive
shall each select one arbitrator. Such arbitrators shall be freely selected and
the parties shall not be limited in their selection to any prescribed list. The
arbitrators chosen by Employer and Executive shall, by mutual consent, select
the third arbitrator. Except as otherwise agreed upon by the Parties, the
arbitration shall convene in Chicago, Illinois.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;The decision of the arbitrators shall be in writing and presented in
separate findings of fact and law. The award of the arbitrators shall be final
and binding on the parties from which no appeal maybe taken and an order
confirming the award or judgment upon the award may be entered into in any
court having jurisdiction there over.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Prior to the appointment of the arbitrator, Employer or Executive
may seek provisional remedies, including, without limitation, temporary
restraining orders and preliminary injunctions. After the appointment of the
arbitrators, the arbitrators shall have sole authority to grant such
provisional remedies as the arbitrators, in their sole discretion, deem
necessary or appropriate.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;The arbitrators shall have the authority to award any relief
permitted by relevant federal or state statute, including, without limitation,
back wages, front wages, actual damages, compensatory damages, punitive
damages, attorneys&#146; fees, and costs associated with the arbitration proceeding.
The arbitrators, in the award, may assess the fees and expenses of the
arbitrators and of the


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">arbitration proceeding and the witness and attorney&#146;s fees of the parties
or any part thereof, against either Employer or Executive or both of them,
taking into account the circumstances of the case. Except as assessed by the
arbitrators in the award, Employer and Executive shall each bear their own
costs in connection with the arbitration proceeding. Notwithstanding the
foregoing, Employer shall bear 100% of the aggregate fees and expenses of the
arbitrators.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Executive and Employer acknowledge and agree that a party making a
claim pursuant to or arising under this Section must give written notice of
such claim within one (1)&nbsp;year of the occurrence of the event or conduct giving
rise to the claim. Failure to give notice of any claim within one (1)&nbsp;year
shall constitute a waiver of the claim, even if there is a federal or state
statute of limitations which would have given more time to pursue the claim.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Except with respect to claims described in Section&nbsp;12(c), Executive
and Employer acknowledge and agree that the arbitrators, and not any federal,
state, or local court or agency, shall have exclusive authority to resolve any
dispute relating to the interpretation, applicability, enforceability or
formation of this Agreement, including, but not limited to, any claim that all
or any part of this Agreement is void or voidable. Such arbitrators shall have
jurisdiction to hear and rule on pre-hearing disputes, and are authorized to
hold pre-hearing conferences by telephone or in person as the arbitrator deems
necessary. The arbitrators shall have the authority to entertain a motion to
dismiss and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil Procedure.
The arbitrators shall apply the substantive law (and the law of remedies, if
applicable) of the state in which the claim arose, or federal law, or both, as
applicable to the claim(s) asserted. The Federal Rules of Evidence shall apply
to the arbitration proceeding.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;Goodwill. Executive acknowledges that Employer has developed,
and will, over a period of time, continue to develop, significant relationships
and goodwill between itself and its clients and customers by providing superior
products and services. Executive further acknowledges that these relationships
and this goodwill are a valuable asset belonging solely to Employer. Executive
understands that Employer agrees to compensate him, as well as to reimburse him
for reasonable and necessary business expenses incurred, while he builds and/or
maintains business relationships and goodwill with Employer&#146;s current and
prospective clients and customers on a personal level. Executive acknowledges
that the responsibility to build and maintain business relationships and
goodwill with current and prospective clients and customers creates a special
relationship of trust and confidence between him, Employer, and its clients and
customers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;Change in Control. Upon a Change in Control, whether or not
Executive continues his employment, all of Executive&#146;s outstanding stock
options and other incentive awards from the Company in the nature of rights
that may be exercised shall become fully exercisable, all restrictions on
Executive&#146;s outstanding awards of restricted stock shall lapse and the Employer
shall pay to Executive a cash lump sum payment equal to 299% of his Base Amount
as defined in section 280G(b)(3) of the Internal Revenue Code of 1986, as
amended (&#147;Change in Control Payment&#148;); provided, however, if the Change in
Control Payment to Executive would cause the Employer to contravene any law,
regulation or policy applicable to the Employer, the Employer and Executive
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. For purposes of this Agreement, &#147;Change in Control&#148;
means:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;a change in the ownership of the capital stock of the Bank or the
Company, whereby a corporation, person, or group acting in concert (other than
the current members of the boards of directors of the Company or the Bank or
any of their descendants, the Company, the Bank, or any savings, pension or
other benefit plan for the benefit of the employees of the Company or the Bank
or


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">subsidiaries thereof) (a &#147;Person&#148;) as described in Section&nbsp;14(d)(2) of the
Securities Exchange Act of 1934, as amended (&#147;Exchange Act&#148;), holds or
acquires, directly or indirectly, beneficial ownership (within the meaning of
Rule&nbsp;13d-3 promulgated under the Exchange Act) of a number of shares of capital
stock of the Company or the Bank which constitutes fifty percent (50%) or more
of the combined voting power of the Company&#146;s or the Bank&#146;s then outstanding
capital stock entitled to vote generally in the election of directors;



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the persons who were members of the board of directors of the Company
or the Bank immediately prior to a tender offer, exchange offer, contested
election or any combination of the foregoing, cease to constitute a majority of
the board of directors of the Company or the Bank, as applicable;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the consummation by the board of directors of the Company or the Bank
of a merger, consolidation or reorganization plan involving the Company or the
Bank in which the Company or the Bank, as applicable, is not the surviving
entity, or a sale of all or substantially all of the assets of the Company or
the Bank. For purposes of this Agreement, a sale of all or substantially all of
the assets of the Company or the Bank shall be deemed to occur if any Person
acquires (or during the 12-month period ending on the date of the most recent
acquisition by such Person, has acquired) gross assets of the Company or the
Bank, as applicable, that have an aggregate fair market value equal to fifty
percent (50%) or more of the fair market value of all of the respective gross
assets of the Company or the Bank immediately prior to such acquisition or
acquisitions;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;a tender offer or exchange offer is made by any Person which is
successfully completed and results in such Person beneficially owning (within
the meaning of Rule&nbsp;13d-3 promulgated under the Exchange Act) either fifty
percent (50%) or more of the Company&#146;s or Bank&#146;s outstanding shares of common
stock or shares of capital stock having fifty percent (50%) or more of the
combined voting power of the Company&#146;s or Bank&#146;s then outstanding capital stock
(other than an offer made by the Company or the Bank), and sufficient shares
are acquired under the offer to cause such person to own fifty percent (50%) or
more of the voting power;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;a dissolution or liquidation of the Company or the Bank; or


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;any other transactions or series of related transactions occurring
which have substantially the same effect as the transactions specified in
clauses (a)-(f); provided however that, a shareholder or shareholders may make
the following transfers and such transfers shall be deemed not to be a Change
in Control: (i)&nbsp;to any trust described in section 1361(c)(2) of the Code and
that is created solely for the benefit of any shareholder or any spouse or
lineal descendant of any shareholder; (ii)&nbsp;to any individual by bona fide gift;
(iii)&nbsp;to any spouse or former spouse pursuant to the terms of a decree of
divorce; or (iv)&nbsp;to any officer or employee of the Company or the Bank pursuant
to any stock option or restricted stock plan established by the shareholders of
the Company or the Bank.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;Notices. All notices, requests, consents and other
communications to be given or delivered hereunder or by reason of the
provisions of this Agreement shall be in writing and shall be deemed to have
been properly served if (a)&nbsp;delivered personally, (b)&nbsp;delivered by a recognized
overnight courier service, (c)&nbsp;sent by certified or registered mail, return
receipt requested and first class postage prepaid, or (d)&nbsp;sent by facsimile
transmission followed by a confirmation copy delivered by recognized overnight
courier service the next day. Such notices, requests, consents and other
communications shall be sent to the respective parties as follows: (i)&nbsp;if to
Executive: James J. Giancola,
&nbsp;&nbsp;&nbsp;(ii)&nbsp;if to Bank:
Midwest Bank and Trust Co.; and (iii)&nbsp;if to Company: Midwest Banc Holdings,
Inc. Any Party hereto may designate a different address by providing written
notice of such new address to the other Parties. Date of service of


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">such notice shall be (i)&nbsp;the date such notice is personally delivered or
sent by facsimile transmission (with issuance by the transmitting machine of a
confirmation of a successful transmission), (ii)&nbsp;three business days after the
date of mailing if sent by certified or registered mail or (iii)&nbsp;one business
day after the date of delivery to the overnight courier if sent by overnight
courier.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;Severability. The Parties acknowledge that each covenant and/or
provision of this Agreement shall be enforceable independently of every other
covenant and/or provision. Furthermore, Executive and Employer acknowledge
that, in the event any covenant and/or provision of this Agreement is
determined to be unenforceable for any reason, the remaining covenants and/or
provisions will remain effective, binding and enforceable.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;Complete Agreement; Modification. The Parties acknowledge and
agree that this Agreement constitutes the complete and entire agreement between
the parties; that each executed this Agreement based upon the express terms and
provisions set forth herein; that, in accepting employment with Employer,
Executive has not relied on any representations, oral or written, which are not
set forth in this Agreement; that no previous agreement, either oral or
written, shall have any effect on the terms or provisions of this Agreement;
and that all previous agreements, either oral or written, are expressly
superseded and revoked by this Agreement. The provisions hereof may not be
altered, amended, modified, waived, or discharged in any way whatsoever, except
by written agreement executed by Executive and Employer. No waiver shall be
deemed a continuing waiver or a waiver of any subsequent breach or default,
either of a similar or different nature, unless expressly so stated in writing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.&nbsp;Governing Law. This Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the laws
of the State of Illinois, without giving effect to provision thereof regarding
conflict of laws.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;Counterparts. This Agreement may be executed in multiple
original counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.&nbsp;Prior Agreements. Executive represents that his service as an
employee of Employer will not violate any agreement: (i)&nbsp;he has made that
prohibits him from disclosing any information he acquired prior to his becoming
employed by Employer; or (ii)&nbsp;he had made that prohibits him from accepting
employment with Employer or that will interfere with his compliance with the
terms of this Agreement. Executive further represents that he has not
previously, and will not in the future, disclose to Employer any proprietary
information or trade secrets belonging to any previous employer. Executive
acknowledges that Employer has instructed him not to disclose to it any
proprietary information or trade secrets belonging to any previous employer.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.&nbsp;Voluntary Agreement. The Parties acknowledge that each has
carefully read this agreement, that each has had an opportunity to consult with
his or its attorney concerning the meaning, import and legal significance of
this Agreement, that each understands its terms, that all understandings and
agreements between Executive and Employer relating to the subjects covered in
this Agreement are contained in it, and that each has entered into the
Agreement voluntarily and not in reliance on any promises or representations by
the other than those contained in this Agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.&nbsp;Restrictions Upon Funding. The Employer shall have no obligation
to set aside, earmark or entrust any fund or money with which to pay its
obligations under this Agreement. The Executive or any successor-in-interest to
Executive shall be and remain simply a general creditor of the Employer in the
same manner as any other creditor having a general unsecured claim. For
purposes of the Code, the Employer intends this Agreement to be an unfunded,
unsecured promise to pay on the part of the


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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">Employer. For purposes of Employee Retirement Income Security Act of 1974,
as amended (&#147;ERISA&#148;), the Employer intends that this Agreement not be subject
to ERISA. If it is deemed subject to ERISA, it is intended to be an unfunded
arrangement for the benefit of a select member of management, who is a highly
compensated employee of the Employer for the purpose of qualifying this
Agreement for the &#147;top hat&#148; plan exception under sections 201(2), 301(a)(3) and
401(a)(1) of ERISA. At no time shall the Executive have or be deemed to have
any lien nor right, title or interest in or to any specific investment or to
any assets of the Employer. If the Employer elects to invest in a life
insurance, disability or annuity policy upon the life of Executive, the
Executive shall assist the Employer by freely submitting to a physical
examination and supplying such additional information necessary to obtain such
insurance or annuities.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.&nbsp;Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words &#147;include&#148;, &#147;includes&#148; or
&#147;including&#148; are used in this Agreement, they shall be deemed to be followed by
the words &#147;without limitation.&#148; The words &#147;hereof&#148;, &#147;herein&#148; and &#147;hereunder&#148;
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision in this Agreement.
Each use herein of the masculine, neuter or feminine gender shall be deemed to
include the other genders. Each use herein of the plural shall include the
singular and vice versa, in each case as the context requires or as is
otherwise appropriate. The word &#147;or&#148; is used in the inclusive sense. Any
agreement or instrument defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement or instrument as
from time to time amended, modified or supplemented, including by waiver or
consent. References to a person are also to its permitted successors or
assigns.


<P align="center" style="font-size: 10pt">&#091;Signature Page Follows&#093;



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<P align="center" style="font-size: 10pt">&#091;Signature Page to Employment Agreement&#093;



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above, to be effective as of the Effective Date.


<P align="left" style="font-size: 10pt">EXECUTIVE:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="100%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ James J. Giancola</DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR size="1" noshade width="40%" align="left"></DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James J. Giancola</DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">EMPLOYER:</DIV></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="83%">&nbsp;</TD>
</TR>
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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">Midwest Banc Holdings, Inc.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ E. V. Silveri</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade width="40%" align="left"></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">E. V. Silveri, Chairman of the Board</TD>
</TR>

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</DIV>




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