EXHIBIT 99.1

 

MIDWEST BANC HOLDINGS, INC.

 

Emergency Economic Stabilization Act of 2008 (“EESA”)

Section 111(b)(4) Certification

 

I, Roberto R. Herencia, President and Chief Executive Officer, certify, based on my knowledge, that:

 

(i) The compensation committee of Midwest Banc Holdings, Inc. (“Midwest” or the “TARP recipient”), has discussed, reviewed, and evaluated with senior risk officers at least every six months during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009, and ending with the last day of the TARP recipient’s fiscal year containing that date, senior executive officer (SEO) compensation plans and employee compensation plans and the risks these plans pose to Midwest;

 

(ii) The compensation committee of Midwest has identified and limited during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009, and ending with the last day of the TARP recipient’s fiscal year containing that date, any features of the SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Midwest, and has identified any features of the employee compensation plans that pose risks to Midwest and has limited those features to ensure that Midwest is not unnecessarily exposed to risks;

 

(iii) The compensation committee has reviewed at least every six months during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date, the terms of each employee compensation plan and identified the features in the plan that could encourage the manipulation of reported earnings of Midwest to enhance the compensation of an employee, and has limited those features;

 

(iv) The compensation committee of Midwest will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii) above;

 

(v) The compensation committee of Midwest will provide a narrative description of how it limited during any part of the most recently completed fiscal year that included a TARP period the features in

 

(A) SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Midwest;

 

(B) Employee compensation plans that unnecessarily expose Midwest to risks; and

 

(C) Employee compensation plans that could encourage the manipulation of reported earnings of Midwest to enhance the compensation of an employee;

 

(vi) Midwest has required that bonus payments, as defined in the regulations and guidance established under section 111 of EESA (bonus payments), of the SEOs and twenty next most highly compensated employees be subject to a recovery or “clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;

 

(vii) Midwest has prohibited any golden parachute payment, as defined in the regulations and guidance established under section 111 of EESA, to a SEO or any of the next five most highly compensated employees during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date;

 

(viii) Midwest has limited bonus payments to its applicable employees in accordance with section 111 of EESA and the regulations and guidance established thereunder during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date;

 

(ix) The board of directors of Midwest has established an excessive or luxury expenditures policy, as defined in the regulations and guidance established under section 111 of EESA, by September 14, 2009; this policy has been provided to Treasury and its primary regulatory agency; and its employees have complied with this policy during

the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date; and any expenses that, pursuant to this policy, required approval of the board of directors, a committee of the board of directors, an SEO, or an executive officer with a similar level of responsibility were properly approved;

 

(x) Midwest will permit a non-binding shareholder resolution in compliance with any applicable federal securities rules and regulations on the disclosures provided under the federal securities laws related to SEO compensation paid or accrued during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date;

 

(xi) Midwest will disclose the amount, nature, and justification for the offering during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date of any perquisites, as defined in the regulations and guidance established under section 111 of EESA, whose total value exceeds $25,000 for any employee who is subject to the bonus payment limitations identified in paragraph (viii);

 

(xii) Midwest will disclose whether Midwest, the board of directors of Midwest, or the compensation committee of Midwest has engaged during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date, a compensation consultant; and the services the compensation consultant or any affiliate of the compensation consultant provided during this period;

 

(xiii) Midwest has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during the period beginning on the later of the closing date of the agreement between the TARP recipient and Treasury or June 15, 2009 and ending with the last day of the TARP recipient’s fiscal year containing that date;

 

(xiv) Midwest has substantially complied with all other requirements related to employee compensation that are provided in the agreement between Midwest and Treasury, including any amendments;

 

(xv) The employees disclosed on Schedule I are the SEOs and the twenty next most highly compensated employees for the current fiscal year and the most recently completed fiscal year, with the non-SEOs ranked in descending order of level of annual compensation, and with the name, title and employer of each SEO and most highly compensated employee identified; and

 

(xvi) I understand that a knowing and willful false or fraudulent statement made in connection with this certification may be punished by fine, imprisonment, or both.

 

Roberto R. Herencia

President and Chief Executive Officer

 

Dated: March 30, 2010