UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

OLD SECOND BANCORP, INC.
37 South River Street, Aurora, Illinois 60506

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 201320, 2014

TO THE STOCKHOLDERS:

        The annual meeting of stockholders of Old Second Bancorp, Inc., will be held on Tuesday, May 21, 2013,20, 2014, at 10:00 a.m., central time, at Waubonsee Community College, 18 S. River Street, Aurora, Illinois, for the following purposes:

1.

to elect three members of the board of directors;



2.

to approve, in a non-binding, advisory vote, the compensation of our named executive officers, as described in the proposal on Old Second's executive compensation disclosed in the proxy statement, which is referred to as the "say-on-pay" proposal;



3.

to approve in a non-binding, advisory vote, the frequency with which stockholders will vote on future say-on-pay proposals;



4.

to ratify the Amended and Restated Rights Agreement and Tax Benefits Preservation Plan, between Old Second Bancorp, Inc., and Old Second National Bank, as Rights Agent, dated September 12, 2012; 2014 Equity Incentive Plan;



5.4.

to ratify the appointment of Plante & Moran, PLLC as our independent registered public accounting firm for the year ended December 31, 2013;2014; and



6.5.

to transact such other business as may properly be brought before the meeting or any postponements or adjournments of the meeting.

        The board of directors is not aware of any other business to come before the meeting. Stockholders of record at the close of business on March 22, 2013April 15, 2014 are the stockholders entitled to vote at the meeting and any and all adjournments or postponements of the meeting. In the event there are an insufficient number of votes for a quorum at the time of the annual meeting, the meeting may be adjourned or postponed in order to permit further solicitation of proxies.

		By order of the board of directors
��
		William B. Skoglund Chairman and Chief Executive Officer

Aurora, Illinois
April 15, 201321, 2014

IMPORTANT:    THE PROMPT RETURN OF PROXIES WILL SAVE US THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.

OLD SECOND BANCORP, INC.
37 South River Street, Aurora, Illinois 60506

PROXY STATEMENT

        This proxy statement is furnished in connection with the solicitation by the board of directors of Old Second Bancorp, Inc., a Delaware corporation, of proxies to be voted at the annual meeting of stockholders. This meeting is to be held at Waubonsee Community College, 18 S. River St., Aurora, Illinois, on May 21, 201320, 2014 at 10:00 a.m., central time, or at any postponements or adjournments of the meeting. Old Second conducts full service community banking and trust business through its wholly-owned subsidiary, Old Second National Bank.

        A copy of our annual report for the year ended December 31, 2012,2013, which includes audited financial statements, is enclosed. This proxy statement was first mailed to stockholders on or about April 15, 2013.21, 2014. As used in this proxy statement, the terms "Old Second," "the Company," "we," "our" and "us" all refer to Old Second Bancorp, Inc., and its subsidiaries.

Why am I receiving this proxy statement and proxy form?

        You are receiving a proxy statement and proxy form from us because on March 22, 2013,April 15, 2014, the record date for the annual meeting, you owned shares of our common stock. This proxy statement describes the matters that will be presented for consideration by the stockholders at the annual meeting. It also gives you information concerning these matters to assist you in making an informed decision.

        When you sign the enclosed proxy form, you appoint the proxy holder as your representative at the meeting. The proxy holder will vote your shares as you have instructed in the proxy form, ensuring that your shares will be voted whether or not you attend the meeting. Even if you plan to attend the meeting, you should complete, sign and return your proxy form in advance of the meeting just in case your plans change.

        If you have signed and returned the proxy form and an issue comes up for a vote at the meeting that is not identified on the form, the proxy holder will vote your shares, pursuant to your proxy, in accordance with his or her best judgment.

What matters will be voted on at the meeting?

        You are being asked to vote on: (i) the election of three nominees to our board of directors; (ii) a non-binding, advisory proposal to approve the compensation of our named executive officers, which is referred to as the "say-on-pay" proposal; (iii) a non-binding advisory proposal regardingto approve the frequency with which stockholders will vote on such say-on-pay proposals in the future;Old Second Bancorp, Inc. 2014 Equity Incentive Plan; (iv) the ratification of our Amended and Restated Rights Agreement and Tax Benefits Preservation Plan (the "Tax Benefits Plan"); (v) the ratification of Plante & Moran, PLLC as our independent registered public accounting firm for the year ended December 31, 2013;2014; and (vi)(v) any other business that may properly be brought before the meeting.

How do I vote?

        A form of proxy is enclosed for use at the meeting. If the proxy is executed and returned, it may nevertheless be revoked at any time insofar as it has not been exercised. Stockholders attending the meeting may, on request, vote their own shares even though they have previously sent in a proxy. Unless revoked or instructions to the contrary are contained in the proxies, the shares represented by

validly executed proxies will be voted at the meeting and will be voted "FOR" the election of the

nominees for director named in this proxy statement, "FOR" the say-on-pay proposal, "FOR" the "every year" frequency alternative forapproval of the say-on-pay proposal, "FOR" the ratification of our Tax Benefits2014 Equity Incentive Plan and "FOR" the ratification of our independent registered public accounting firm.

        If you want to vote in person, please come to the meeting. We will distribute written ballots to anyone who wants to vote at the meeting. Please note, however, that if your shares are held in the name of a broker or other fiduciary (or what is usually referred to as "street name"), you will need to arrange to obtain a proxy from the record holder in order to vote in person at the meeting. Even if you plan to attend the annual meeting, we ask that you complete and return your proxy card in advance of the annual meeting in case your plans change.

What does it mean if I receive more than one proxy form?

        It means that you have multiple holdings reflected in our stock transfer records and/or in accounts with stockbrokers. Please sign and returnALL proxy forms to ensure that all your shares are voted.

If I hold shares in the name of a broker, who votes my shares?

        If you received this proxy statement from your broker, your broker should have given you instructions for directing how your broker should vote your shares. It will then be your broker's responsibility to vote your shares for you in the manner you direct.

        Under the rules of various national and regional securities exchanges, brokers may generally vote on routine matters, such as ratifying the appointment of an independent registered public accounting firm, but cannot vote on non-routine matters, such as the adoption or amendment of a stock incentive plan, unless they have received voting instructions from the person for whom they are holding shares. If there is a matter presented to stockholders at a meeting and your broker does not receive instructions from you on how to vote on that matter, your broker will return the proxy card to us, indicating that he or she does not have the authority to vote on that matter. This is generally referred to as a "broker non-vote" and may affect the outcome of the voting on those matters.

        The election of directors, the approval of the 2014 Equity Incentive Plan and the say-on-pay proposals the ratification of our Tax Benefits Plan are considered non-routine matters. Therefore, we encourage you to provide directions to your broker as to how you want your shares voted on all matters to be brought before the 20132014 annual meeting upon receipt of our proxy materials. You should do this by carefully following the instructions your broker gives you concerning its procedures. This ensures that your shares will be voted at the meeting.

What if I change my mind after I return my proxy card.card?

        If you hold your shares in your own name, you may revoke your proxy and change your vote at any time before the polls close at the meeting. You may do this by:

•

signing another proxy card with a later date and returning that proxy card to us;



•

sending notice to us that you are revoking your proxy, or



•

voting in person at the meeting.

        If you hold your shares in the name of your broker or other fiduciary and desire to revoke your proxy, you will need to contact that party to revoke your proxy.

How many votes do we need to hold the annual meeting?

        A majority of the shares that were outstanding and entitled to vote as of the record date must be present in person or by proxy at the meeting in order to hold the meeting and conduct business. On

March 22, 2013,April 15, 2014, the record date, there were 14,084,32829,442,508 shares of common stock outstanding. A majority of these shares must be present in person or by proxy at the meeting.

        Shares are counted as present at the meeting if the stockholder either:

•

is present in person at the meeting; or



•

has properly submitted a signed proxy form or other proxy.

What happens if any nominee is unable to stand for re-election?

        The board may, by resolution, provide for a lesser number of directors or designate a substitute nominee. In the latter case, shares represented by proxies may be voted for a substitute nominee. Proxies cannot be voted for more than three nominees. The board has no reason to believe any nominee will be unable to stand for re-election.

What options do I have in voting on each of the proposals?

        Except with respect to the election of directors, you may vote "for," "against" or "abstain" on each proposal properly brought before the meeting. In the election of directors you may vote "for" or "withhold authority to vote for" each nominee.

How many votes may I cast?

        Generally, you are entitled to cast one vote for each share of stock you owned on the record date with respect to each of the proposals. The proxy card included with this proxy statement indicates the number of shares owned by an account attributable to you.

How many votes are needed for each proposal?

        Except with respect to the election of directors, and the frequency with which future say-on-pay votes will be held, a majority of votes present and entitled to vote at the meeting will approve each matter that arises at the annual meeting.

        The directors are elected by a plurality and the three individuals receiving the highest number of votes cast "FOR" their election will be elected as directors of Old Second. A "withhold authority" vote will have the same effect as a vote against the election of a particular director. The frequency with which future say-on-pay votes will be held will also be decided by a plurality, with the frequency receiving the most votes being considered the choice of the stockholders. Abstentions and broker non-votes will have no effect on this proposal. Please note, however, because the say-on-pay vote is advisory, it will not be binding upon the board of directors or the Compensation Committee.

        Abstentions and broker non-votes, if any, will not be counted as entitled to vote, but will count for purposes of determining whether or not a quorum is present. So long as a quorum is present, abstentions and broker non-votes will have no effect on the election of directors. Abstentions will have the effect of a vote against the 2014 Equity Incentive Plan, the say-on-pay proposal and the ratification of the appointment of our independent registered public accounting firm, while broker non-votes will not affect these votes.

How are votes counted?

        Voting results will be tabulated and certified by the election judges.

Where do I find the voting results of the meeting?

        If available, we will announce voting results at the meeting. The voting results will also be disclosed in a Form 8-K within four business days of the voting.

Important Notice Regarding the Availability of Proxy Material for the Stockholder Meeting to be held on May 21, 2013.20, 2014.

        Full copies of the proxy statement, the proxy card and other materials for the annual meeting are available on the internet at www.oldsecond.com under "2013"2014 Annual Meeting Materials." Stockholders will receive a full set of these materials through the mail from us or from your broker.

PROPOSAL 1:

ELECTION OF DIRECTORS

        Old Second's board of directors is divided into three classes, approximately equal in number, which are elected by our common stockholders (the "Common Stock Directors"), and one class (the "Class B Directors") that is elected by the holders of our Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the "Series B Preferred Stock"). At the annual meeting to be held on May 21, 2013,20, 2014, you, as the holder of our common stock, will be entitled to elect three directorsCommon Stock Directors for terms expiring in three years, as described herein. Holders of shares of our common stock are not entitled to vote on the Class B Directors.

        We have no knowledge that any of the nominees will refuse or be unable to serve as directors, but if any of the nominees becomes unavailable for election, the holders of proxies reserve the right to substitute another person of their choice as a nominee when voting at the meeting.

        The Nominating and Corporate Governance Committee of the board of directors of Old Second has nominated three persons for election as Common Stock Directors at this annual meeting, all of whom are incumbent directors.directors, and one director for election as a Class B Director.

        Set forth below is information concerning the nominees for election and for the other directors whose term of office will continue after the meeting, including their age, year first elected or appointed as a director and business experience during the previous five years. The three nominees for director,Common Stock Director, if elected at the annual meeting, will serve for terms expiring in 2016.2017. None of the directors serve on the boards of any other publicly traded companies besides Old Second.

        Unless authority to vote for the nominees is withheld, the shares represented by the enclosed proxy card, if executed and returned, will be voted "FOR" the election of the nominees proposed by the board of directors.

Board Recommendation

        The board of directors recommends you vote your shares "FOR" each of the nominees for director.Common Stock Director.

COMMON STOCK DIRECTORS

NOMINEES

CONTINUING DIRECTORS

CLASS B DIRECTORS

        All directorsCommon Stock Directors will hold office for the terms indicated, or until their earlier death, resignation, removal or disqualification and until their respective successors are duly elected and qualified. The Class B Director will hold office for a one-year term, until his earlier death, resignation or disqualification and until his respective successor is duly elected and qualified. The Class B Directorship will terminate if the Company either pays all accumulated but unpaid dividends on, or redeems in full, the Series B Preferred Stock. As a result of our successful public offering, which closed in early April, 2014, we currently expect to pay all accumulated but unpaid dividends on the Series B

Preferred Stock prior to the annual meeting. Consequently, we expect that the Class B Directorship will terminate prior to the annual meeting. If that occurs, following the annual meeting, we expect that our board will increase the number of Common Stock Directors from ten to eleven and appoint Mr. Suits as a Common Stock Director. If appointed, Mr. Suits will hold office until our 2016 annual meeting.

        There are no arrangements or understandings between any of the nominees, directors or executive officers and any other person pursuant to which any of our nominees, directors or executive officers have been selected for their respective positions. No nominee, member of the board of directors or executive officer is related to any other nominee, member of the board of directors or executive officer.

Director Qualifications

        We have established minimum criteria that we believe each director should possess to be an effective member of our board. Those criteria are discussed in more detail on page 910 of this proxy statement. The particular experience, qualifications, attributes or skills that led the board to conclude that each member is qualified to serve on the board and any committee he or she serves on is as follows:

        Mr. Bonifas:    We consider Mr. Bonifas to be a qualified candidate for service on the board, the Audit Committee and the Compensation Committee due to his skills and expertise acquired as a leader of a successful business and his prominence in the community.

        Mr. Cheatham:    We consider Mr. Cheatham to be a qualified candidate for service on the board due to his experience in the financial services industry and the familiarity with Old Second's operations he has acquired as Chief Financial Officer of Old Second.

        Mr. Eccher:    We consider Mr. Eccher to be a qualified candidate for service on the board due to his experience in the financial services industry and the familiarity with Old Second's operations he has acquired as the Chief Operating Officer of Old Second and President of Old Second National Bank.

        Mr. Finn:    We consider Mr. Finn to be a qualified candidate for service on the board and the Nominating and Corporate Governance Committee and the Audit Committee due to his business and financial expertise acquired as an executive at a successful local medical center, as well as his prominence in the community.

        Mr. Kane:    We consider Mr. Kane to be a qualified candidate for service on the board and the Compensation Committee due to his experience as a partner at a successful local business, his general experience in business and his prominence in the community.

        Mr. Ladowicz:    We consider Mr. Ladowicz to be a qualified candidate for service on the board, the Audit Committee and the Nominating and Corporate Governance Committee due to his previous experience as a chief executive officer in the financial services industry, as well as his extensive knowledge of the market areas we entered through the acquisition of HeritageBanc, Inc. in 2008.

        Mr. Meyer:    We consider Mr. Meyer to be a qualified candidate for service on the board, the Compensation Committee and the Nominating and Corporate Governance Committee due to his skills and expertise acquired as president of a well-established local business and his prominence in the local business community.

        Mr. Palmer:    We consider Mr. Palmer to be a qualified candidate for service on the board, the Compensation Committee and the Nominating and Corporate Governance Committee due to his skills and expertise acquired as vice president of a successful publicly traded company, his experience in the

industrial manufacturing industry and his knowledge of the business community in the markets we serve.

        Mr. Schmitz:    We consider Mr. Schmitz to be a qualified candidate for service on the board and the Audit Committee due to his skills and expertise in tax consulting and his familiarity with our local market areas.

        Mr. Skoglund:    We consider Mr. Skoglund to be a qualified candidate for service on the board due to his skills and experience in the financial services industry and the intimate familiarity with Old Second's operations he has acquired as the Chief Executive Officer of Old Second.

        Mr. Suits:    Pursuant to the terms of Old Second's outstanding Series B Preferred Stock, issued toThe U.S. Department of the Treasury on January 16, 2009, in connection with our participation in the TARP Capital Purchase Program, Treasury("Treasury") appointed Mr. Suits to our board as a Class B Director. Mr. Suits' appointment was approved by the unanimous written consent of the board on November 20, 2012. Mr. Suits was also appointed to the Audit Committee. Following Treasury's sale of the Series B Preferred Stock at auction, as discussed below, Mr. Suits was elected by the holders of the Series B Preferred Stock at the 2013 annual meeting. Although holders of our common stock are not entitled to vote for the election of Mr. Suits to our board of directors, we consider Mr. Suits to be a qualified candidate for service due to his skills and experience in the financial services industry and his familiarity with Old Second's operations.

CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS

General

        Currently, the board of directors is made up of eleven directors of which ten are Common Stock Directors, who are elected by the holders of our common stock every three years to serve staggered terms, and one is a Class B Director, who is elected annually by the holders of our Series B Preferred Stock. As discussed below, Treasury as the holder of our Series B Preferred Stock had the right to appoint two directors to our board upon our deferral of the dividend payments on the Series B Preferred Stock for an aggregate of six quarters (the "Class B Directors").quarters. Treasury exercised this right on November 20, 2012, and appointed Mr. Suits to our board of directors. Subsequent to that appointment, Treasury sold all of our Series B Preferred Stock to third party investors, including certain of our directors. As the current holders of our Series B Preferred Stock, these holders also have the right to elect two Class B Directors. Consequently, if the holders of Series B Preferred Stock exercise their right to appoint an additional Class B Director, our board will consist of twelve directors instead of eleven. The Series B Preferred Stock holders will have this right until such time as we pay all of the accumulated and unpaid dividends on the Series B Preferred Stock, which we expect to occur prior to the annual meeting. Generally, the board oversees our business and monitors the performance of our management. In accordance with our corporate governance procedures, the board does not involve itself in the day-to-day operations of Old Second, which is monitored by our executive officers and management. Our directors fulfill their duties and responsibilities by attending regular meetings of the board and through committee membership, which is discussed below. The board has determined that all of the directors and nominees are "independent" as defined by the Nasdaq Stock Market, with the exception of Messrs. Skoglund, Cheatham and Eccher, each of whom is an executive officer.

        The board of directors held 12 regular and zero special meetings during 2012.2013. All of the directors attended at least 75% of these meetings and the meetings of the committees on which they served. We typically schedule a board meeting in conjunction with our annual meeting and expect that our directors will attend our annual meeting. Last year, all directors with the exception of Mr. Suits who had not yet been appointed to the board, attended our annual meeting.

        The board of directors believes that it is important to encourage the highest level of corporate ethics and responsibility. Among other things, the board adopted a Code of Business Conduct and Ethics, which applies to all of our directors, officers and employees, as well as a procedure for allowing employees to anonymously report any problems they may detect with respect to our financial reporting. The Code of Business Conduct and Ethics, as well as other information pertaining to our committees,

corporate governance and reporting with the Securities and Exchange Commission, can be found on our website at www.oldsecond.com.

        The board of directors has standing Audit, Nominating and Corporate Governance and Compensation Committees, each of which is made up solely of directors who are deemed to be "independent" under the rules of Nasdaq. Nasdaq's independence rules include certain instances that will preclude a director from being deemed independent and the board reviews those requirements each year to determine a director's status as an independent director.

        During theits review of Mr. Finn's status as an independent board member,director independence, the board considered Mr. Finn's roles as President and Chief Executive Officer at Rush-Copley Medical Center and Mr. Skoglund's position as the Vice Chairman of Rush-Copley's board of directors. Our board determined that this does not preclude a finding that Mr. Finn is independent under Nasdaq's rules because Mr. Skoglund does not serve on Rush-Copley's compensation committee and has recused himself from any discussions or votes that involve Mr. Finn's salary. The board also reviewed certain transactions between Alarm Detection Systems, Inc., and the Company. Mr. Bonifas is a Vice President of Alarm Detections Systems, Inc. The board determined that Mr. Bonifas qualified as an independent director because the amounts paid to Alarm Detection Systems, which totaled approximately $235,000, by the Company were less than 5% of Alarm Detection System's gross revenues for 2013 and because Mr. Bonifas had no interest in the transaction with the Company, except an indirect andde minimus interest as a shareholder of Alarm Detection Systems.

        Actions taken by each committee of the board are reported to the full board, usually at its next meeting. The principal responsibilities of each of the committees are described below.

Audit Committee

        The Audit Committee assists the board in carrying out its oversight responsibilities for our financial reporting process, audit process and internal controls. The Audit Committee is solely responsible for the pre-approval of all audit and non-audit services to be provided by our independent registered public accounting firm and exercises its authority to do so in accordance with a policy that it has adopted. Additionally, the Audit Committee reviews and approves all related party transactions between Old Second and related parties in accordance with Nasdaq's rules and regulations.

        The members of our Audit Committee during 20122013 were Messrs. Finn, (who served as Chairman), Bonifas, Ladowicz, Schmitz and Suits, each of whom is deemed to be an independent director under Nasdaq's rules. We expect that these members will continue to serve on the committee in 2013.2014. Mr. Finn was appointed as chairman of the Audit Committee in 2008. Mr. Schmitz will serve as chairman of the Audit Committee at any meeting Mr. Finn is unable to attend or if Mr. Finn is otherwise unable to carry out the duties of Audit Committee chairman. The Audit Committee met 6 times in 2012.2013.

        The board has designated Mr. Finn, who is currently President and Chief Executive Officer of Rush-Copley Medical Center and previously served as its Chief Operating Officer and Chief Financial Officer, and Mr. Suits as the "audit committee financial expert,experts," as such term is defined by the regulations of the SEC. The board's determination was based upon Mr. Finn's level of knowledge and experience regarding financial matters and his experience overseeing and managing the audit of an organization, which he has gained both from his formal education and from his professional experience as the Chief Financial Officer of a regional hospital organization.organization, and upon Mr. Suits' experience as an independent financial consultant and as the founding partner of Sikich Gardner & Co., LLP, a public accounting and consulting firm. The board believes that each of the other members of the Audit Committee possesses knowledge and experience sufficient to understand the complexities of the financial statements of Old Second. Mr. Finn, or another member of the Audit Committee, met on a quarterly basis during 20122013 with our independent registered public accounting firm.

        The committee's duties, responsibilities and functions are further described in its charter, which is available on our website at www.oldsecond.com. You can request a copy of the committee's charter by sending a written request to the Corporate Secretary at 37 South River Street, Aurora, Illinois 60506, or by sending an e-mail requesting same to corporatesecretary@oldsecond.com.

Compensation Committee

        The Compensation Committee reviews the performance of Old Second's executive officers and establishes their compensation levels. The committee's duties, responsibilities and functions are further described in its charter, which is available on our website at www.oldsecond.com. You can request a copy of the committee's charter by sending a written request to the Corporate Secretary at 37 South River Street, Aurora, Illinois 60506, or by sending an e-mail requesting same to corporatesecretary@oldsecond.com. The Compensation Committee met 23 times during 2012.2013.

        Compensation Committee Interlocks and Insider Participation.    The members of the Compensation Committee in 20122013 were Messrs. Bonifas, Kane, Meyer and Palmer (who served as Chairman), each of whom is an "independent" director as defined by Nasdaq, an "outside" director pursuant to Section 162(m) of the Internal Revenue Code and a "non-employee" director under Section 16 of the Securities Exchange Act of 1934. We expect that these members will continue to serve on the committee in 2013.2014.

Nominating and Corporate Governance Committee

        The Nominating and Corporate Governance Committee reviews the qualifications of, and recommends to the board for nomination, candidates to stand for election at each annual meeting or to fill vacancies on the board as they may occur during the year. The committee also reviews on a periodic basis whether each director is "independent" under the rules of Nasdaq. Additionally, the Nominating and Corporate Governance Committee is responsible for reviewing our policies, procedures and structure as they relate to corporate governance. The committee's duties, responsibilities and functions are further described in its charter, which is available on our website at www.oldsecond.com. You can request a copy of the committee's charter by sending a written request to the Corporate Secretary at 37 South River Street, Aurora, Illinois 60506, or by sending an e-mail requesting same to corporatesecretary@oldsecond.com. The Nominating and Corporate Governance Committee met one1 time in 2012.2013.

        The members of the Nominating and Corporate Governance Committee in 20122013 were Messrs. Finn, Ladowicz, Meyer and Palmer (who served as Chairman), each of whom is deemed to be an independent director under Nasdaq's rules. It is anticipated that the Nominating and Corporate Governance Committee will consist of Messrs. Finn, Ladowicz, Meyer and Palmer throughout 2013.2014. Mr. Palmer is expected to remain as Chairman of the committee in 2013.2014.

Director Nominations and Qualifications

        In making its nominations for persons to be elected to the board of directors and included in our proxy statement, the Nominating and Corporate Governance Committee evaluates incumbent directors, board nominees and persons nominated by stockholders, if any. The committee reviews each candidate in light of the criteria that we believe each director should possess. Included in the criteria are whether each nominee: (i) meets the minimum requirements for service on the board of directors contained in our bylaws; (ii) is under the age of 70 at the time of his or her election, pursuant to our certificate of incorporation; (iii) possesses the highest personal and professional ethics, integrity and values; (iv) has, in the committee's opinion, a sufficient educational and professional background and relevant past and current employment affiliations, board affiliations and experience for service on the board; (v) has demonstrated effective leadership and sound judgment in his or her professional life; (vi) has a strong

sense of service to the communities in which we serve; (vii) has exemplary management and communication skills; (viii) is free of conflicts of interest that would prevent him or her from serving on the board; (ix) will ensure that other existing and future commitments do not materially interfere with his or her service as a director; (x) will review and agree to meet the standards and duties set forth in the Company's Code of Business Conduct and Ethics; (xi) is willing to devote sufficient time to carrying out their duties and responsibilities effectively; and (xii) is committed to serving on the board

for an extended period of time. While we do not have a separate diversity policy, the committee does consider the diversity of its directors and nominees in terms of knowledge, experience, skills, expertise and other demographics which may contribute to the board. The committee also evaluates potential nominees to determine if they have any conflicts of interest that may interfere with their ability to serve as effective board members and to determine whether they are "independent" in accordance with Nasdaq requirements (to ensure that at least a majority of the directors will, at all times, be independent).

        The committee, when considering potential board members, will look at all of the foregoing criteria and arrive at the candidate that best meets the items set forth. The various qualifications and criteria are normally considered by the committee in connection with its evaluation of who the committee will recommend as the Company's nominees. Generally, each incumbent director standing for re-election should have and will have, at a minimum, attended at least 75% of board meetings during the past year and attended a majority of committee meetings of which he or she is a member. The committee retains the ability to make exceptions to this attendance requirement as individual circumstances warrant.

        All of the nominees for election as directors for the 20132014 annual meeting were nominated by the committee. The committee did not receive any formal nominations for directors from our common stockholders.

Series B Preferred Stockholders' Ability to Elect Directors

        As discussed in greater detail in noteNote 20 of our consolidated financial statements included in our 20122013 Annual Report on Form 10-K, the Company entered into a Letter Agreement with Treasury in January 2009 pursuant to which the Company issued (i) 73,000 shares of the Company's Series B Preferred Stock and (ii) a warrant to purchase 815,339 shares of the Company's common stock for an aggregate purchase price of $73.0 million in cash. This transaction occurred pursuant to and was governed by Treasury's TARP Capital Purchase Program. The Series B Preferred Stock currently carries a 5%9% cumulative annual dividend rate, payable quarterly. Dividend payments on the Series B Preferred Stock may be deferred; however, failure to pay dividends on the Series B Preferred Stock for an aggregate of six quarters gave Treasury, or the holder of the Series B Preferred Stock, the right to elect two directors to our board, which continues until the Company has paid all outstanding dividends. The Company suspended quarterly cash dividends on its Series B Preferred Stock in August 2010, and, as of the date of this proxy statement, the Company has not paid dividends for an aggregate ofmore than six quarters.quarters in the aggregate. On November 20, 2012, Treasury appointed Mr. Suits to the Company's board of directors.

        During the first quarter of 2013, Treasury sold the Series B Preferred Stock to third party investors, including certain of our directors. As a result of this sale, the right to elect the Class B Directors transferred from Treasury to the current holders of our Series B Preferred Stock.Stock, who elected Mr. Suits as a Class B Director at our 2013 annual meeting. Consequently, if the current holders of the Series B Preferred Stock exercise their right to appoint an additional director, and an additional director is appointed, our board will consist of twelve directors instead of eleven, which shall consist of the ten directors elected by the holders of our common stock and the two Class B Directors. Holders of shares of our common stock are not entitled to vote on the Class B Directors.

        The Class B Directorship will terminate if the Company either pays all accumulated but unpaid dividends on, or redeems in full, the Series B Preferred Stock. As a result of our successful public offering, which closed in early April, 2014, we currently expect to pay all accumulated but unpaid dividends on the Series B Preferred Stock prior to the annual meeting. Consequently, we expect that the Class B Directorship will terminate prior to the annual meeting. If that occurs, following the annual meeting, we expect that our board will increase the number of Common Stock Directors from ten to eleven and appoint Mr. Suits as a Common Stock Director. If appointed, Mr. Suits will hold office until our 2016 annual meeting.

Common Stock Ownership and Retention Guidelines for Directors

        In January of 2010, the Compensation Committee established guidelines to further align the interests of board members and stockholders by requiring all directors to develop a significant equity stake in the organization they oversee. The Compensation Committee is responsible for monitoring compliance with these stock ownership and retention guidelines.

        Non-employee directors are expected to acquire and hold during their service as board members, shares of our common stock equal in value to at least three times the annual cash retainer for non-employee directors. Non-employee directors have three years from their initial election to the board to meet the target stock ownership guidelines. Once they obtain the requisite number of shares, they are expected to continuously own sufficient shares to meet the guidelines. The stock ownership goal will be determined by using the value of their retainers as of January 1 of each year and the average closing stock price for our common stock over the prior twelve months.

        Shares that count toward meeting the stock ownership guidelines include: (i) shares owned, which include shares obtained upon exercise of options or shares purchased in the open market; (ii) shared ownership, which includes shares owned or held in trust by immediate family; and (iii) restricted stock units. Unexercised stock options do not count toward meeting the stock ownership guidelines. Until such time as the director reaches his or her target stock ownership, the director will be required to hold 50% of the shares of common stock received upon lapse of the restrictions, and upon exercise of stock options. In the rare instance in which these guidelines would place a severe hardship on a director, the Compensation Committee may decide to allow an alternative stock ownership guideline that reflects the intentions of these overall guidelines and the directors' own personal circumstances.

Board Leadership Structure

        The positions of Chairman of the Board and Chief Executive Officer of Old Second have historically been combined, and Mr. Skoglund currently holds both positions. We believe this board leadership structure is the most appropriate because our Chief Executive Officer has the best knowledge of the day-to-day operations of the Company and can make recommendations to the board based on his ongoing experience and "hands on" running of the Company. For this reason, we believe combining the two roles greatly enhances the decision-making processes of the board as a whole. We have a strong governance structure in place, including a designated lead independent director, to ensure the powers and duties of the dual role are handled responsibly. Furthermore, consistent with Nasdaq's listing requirements, the independent directors regularly have the opportunity to meet in executive session without management or any non-independent directors in attendance. In 2012,2013, the independent directors met 3 times in executive session.

        In 2004, the board of directors created the position of a "lead" independent director, currently filled by Mr. Palmer. Mr. Palmer is expected to continue as the lead independent director through 2014. The Nominating and Corporate Governance Committee reviews this appointment annually and the full board has the opportunity to ratify the committee's selection. The lead independent director

assists the board in assuring effective corporate governance and serves as chairman of the independent director sessions.

Board's Role in Risk Oversight

        Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including general economic risks, credit risks, regulatory risks, audit risks, reputational risks and others, such as the impact of competition. Management is responsible for the day-to-day management of risks the Company faces, while the board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk

management processes designed and implemented by management are adequate and functioning as designed.

        While the full board of directors is charged with ultimate oversight responsibility for risk management, various committees of the board and members of management also have responsibilities with respect to our risk oversight. In particular, the Audit Committee plays a large role in monitoring and assessing our financial, legal and organizational risks, and receives regular reports from the management team's senior risk officer regarding comprehensive organizational risk as well as particular areas of concern. The board's Compensation Committee monitors and assesses the various risks associated with compensation policies, and oversees incentives that encourage a level of risk-taking consistent with our overall strategy. Additionally, our chief credit officer and loan review staff are directly responsible for overseeing our credit risk.

        We believe that establishing the right "tone at the top" and providing for full and open communication between management and the board of directors are essential for effective risk management and oversight. Our executive management meets regularly with our other senior officers to discuss strategy and risks facing the Company. Senior officers attend many of the board meetings, or, if not in attendance, are available to address any questions or concerns raised by the board on risk management-related and any other matters. Additionally, each of our board-level committees provides regular reports to the full board and apprises the board of our comprehensive risk profile and any areas of concern.

Stockholder Communications with the Board; Nomination and Proposal Procedures

        Stockholder Communications with Directors.    Stockholders of Old Second may contact any member of the board of directors, or the board as a whole, through the Corporate Secretary either in person, in writing by mail or by e-mail at corporatesecretary@oldsecond.com. Any such communication should indicate whether the sender is an Old Second stockholder. The address for submitting communications to the board by mail is 37 South River Street, Aurora, Illinois 60506. Any communication will be forwarded promptly to the board as a group or to the attention of a specified director per your request, except for communications that are primarily commercial in nature or related to an improper or irrelevant topic.

        Nominations of Directors.    In order for a stockholder nominee to be considered by the Nominating and Corporate Governance Committee to be its nominee and included in our proxy statement, the nominating stockholder must file a written notice of the proposed director nomination with our Corporate Secretary, at the above address, at least 120 days prior to the date on which the previous year's proxy statement was mailed to stockholders. Nominations must include the full name and address of the proposed nominee and a brief description of the proposed nominee's business experience for at least the previous five years and, as to the stockholder giving the notice, his or her name and address, and the class and number of shares of our capital stock owned by that stockholder. All submissions must be accompanied by the written consent of the proposed nominee to be named as a nominee and

to serve as a director if elected. The committee may request additional information in order to make a determination as to whether to nominate the person for director.

        In accordance with our Certificate of Incorporation, a stockholder may otherwise nominate a director for election to the board at an annual meeting of stockholders by giving timely notice in writing to our Corporate Secretary, at the address provided above. To be timely, stockholder nominations must be made in writing, delivered or mailed by first class United States mail, postage prepaid, to our Corporate Secretary not fewer than 14 days nor more than 60 days prior to any meeting of stockholders called for the election of directors. However, if notice of the meeting is given to stockholders less than 21 days prior to the date of the meeting, written nominations must be delivered or mailed to our Corporate Secretary not later than the close of business on the seventh day

following the day on which notice of the meeting was mailed to stockholders. Each written nomination must set forth the (i) name, age, business address and, if known, residence address of each nominee; (ii) principal occupation or employment of each such nominee for the past five years; and (iii) number of shares of stock of Old Second beneficially owned by each such nominee and by the nominating stockholder.

        Other Stockholder Proposals.    To be considered for inclusion in our proxy statement and form of proxy relating to our 20142015 annual meeting of stockholders, the proposing stockholder must file a written notice of the proposal with our Corporate Secretary, at the above address, by December 18, 2013,16, 2014, and must otherwise comply with the rules and regulations set forth by the Securities and Exchange Commission.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

        The following table sets forth certain information with respect to the beneficial ownership of our common stock at December 31, 2012,2013, by each person known by us to be the beneficial owner of more than 5% of the outstanding common stock, by each director or nominee, by each executive officer named in the Summary Compensation Table (which can be found later in this proxy statement), and by all directors and executive officers of Old Second as a group. As a result of our successful public offering of 15,525,000 shares of our common stock, which closed in early April, 2014, we currently believe that the beneficial owners of 5% or more of our common stock have changed since their last public filings, and, as of the date hereof, we do not have any details concerning the current beneficial owners holding more than 5% of our common stock. Beneficial ownership has been determined for this purpose in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), under which a person is deemed to be the beneficial owner of securities if he or she

has or shares voting power or investment power with respect to such securities or has the right to acquire beneficial ownership of securities within 60 days of December 31, 2012. Unless otherwise noted, the address of each 5% stockholder is 37 South River Street, Aurora, Illinois 60506.2013.

SECURITY 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Exchange Act requires that our directors, executive officers and ten percent stockholders file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such persons are also required to furnish us with copies of all Section 16(a) forms they file. No person failed to comply with the filing requirements of Section 16(a) during 2012 and there are no late filings to report. Based solely on its review of the copies of Section 16(a) forms received from its directors and executive officers and written representations that no other reports were required, the Company believes that all Section 16(a) reports applicable to its directors and officers during 20122013 were filed, with one exception. Mr. Suitstwo exceptions. Messrs. Skoglund and Eccher each filed one late form both of which related to his appointment as a directorthe grant and his ownershipforfeiture of common stock.certain restricted stock units in April 2013.

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

        This Compensation Discussion and Analysis describes Old Second'sour compensation philosophy and policies for 20122013 and 20132014 as applicable to the executive officers named in the Summary Compensation Table on page 28.set forth below. This section explains the structure and rationale associated with each material element of the executive'sour named executive officers compensation, and it provides important context for the more detailed disclosure tables and specific compensation amounts provided following the section. It is important to note that Old Secondthe Company and Old Second Nationalthe Bank share an executive management team, the members of which are compensated by Old Second Nationalthe Bank rather than Old Second.the Company. The compensation packages of the named executive officers are determined and approved by our Compensation Committee based upon their performances and roles for both Old Secondthe Company and Old Second Nationalthe Bank.

        The Compensation Committee has overall responsibility for evaluating the compensation plans, policies and programs relating to theour executive officers of Old Second.officers. Further, as required by the rules established by Treasury, guidance issued by the Federal Reserve and other financial institution regulatory agencies, and the SEC's guidance regarding risk associated with compensation arrangements (each as described more fully below), the Compensation Committee is also responsible for a more expansive risk review with respect to most of the compensation plans, policies and programs maintained for employees of Old Second.our employees. The Compensation Committee relies upon the input of management, particularly Mr. Skoglund, when carrying out its responsibilities in establishing executive compensation. Management provides the committeeCompensation Committee with evaluations as to employee performance, guidance on establishing performance targets and objectives and recommends salary levels and equity awards. The committeeCompensation Committee also consults with management on matters that are relativerelevant to executive compensation and benefit plans where board or stockholder action is expected, including the adoption of new plans or the

amendment of existing plans. Finally, the committeeCompensation Committee consults with our management, specifically Old Second's senior risk officer,the Bank's Chief Risk Officer, in completing the risk review with respect to employee compensation plans. No executive officer participates in any recommendation or decision regarding his or her own compensation.

        The Compensation Committee's charter gives it the authority to delegate its responsibility to members or subcommittees of the committee.Compensation Committee. Also, the charter gives the committeeCompensation Committee the authority to hire outside consultants to further its objectives and responsibilities. During 2012,In prior years, the Compensation Committee has retained ChaseCompGroup LLC on a bi-annual basis to provide services to the committee in connection with a review and analysis of the compensation paid or provided to Old Second'sour named executive officers and Old Second's board of directors. In 2012, these services consistedkeeping with the Compensation Committee's historical philosophy of updating data fromcomparing our compensation with that of the comprehensive salary survey analysis ChaseCompGroup completed in 2011. ChaseCompGroup LLC does not provide any services,local marketplace every other than those performed at the direction ofyear, the Compensation Committee did not retain a consultant during 2013 but will likely do so during 2014. In addition, during 2014 the Compensation Committee engaged the services of Towers-Watson to Old Second or Old Second National Bank.perform a review and analysis of our existing equity incentive plan.

        During 2012,2013, the Compensation Committee convened in January, February and August.November. Mr. Palmer, Chairman of the committee,Compensation Committee, also met as needed with internal staff members, to assimilatecompile compensation information for this proxy statement. The Compensation Committee also met in January and February 20132014 to approve salaries, incentive plans and performance metrics for 2014.

Participation in TARP

        We continued as a participant in Treasury's Troubled Asset Relief Program ("TARP") through the time of Treasury's auction sale of our Series B Preferred Stock and related warrant during the first and second quarters of 2013. Restricted stock was grantedAs such, for the period of time from January 1, 2013 through March 11, 2013 (the "2013 TARP Period"), the Company and the Bank, and certain employees of both, continued to be subject to the TARP compensation-related limitations and restrictions. The TARP compensation limitations and restrictions included the following:

•

Except in limited circumstances, our five most highly compensated employees (as determined on an annual basis) were prohibited from receiving cash bonus payments during the 2013 TARP Period. Messrs. Skoglund, Cheatham and Eccher were subject to this prohibition during the 2013 TARP Period.



•

Except in limited circumstances, our named executive officers and our next five most highly compensated employees (each as determined on an annual basis) were prohibited during the 2013 TARP Period from receiving any severance payments upon a termination of employment or any payments triggered by the occurrence of a change in February 2012 as partcontrol.



•

Our named executive officers and next 20 most highly compensated employees were subject to a "clawback" of incentive compensation if that compensation was based on materially inaccurate financial statements or performance metrics. Further, no one in this group of employees could have received any tax gross-up payment during the 2013 TARP Period.



•

We were limited to an annual deduction of $500,000 with respect to the compensation paid to each of our named executive incentive plan.officers.

        In addition to the specific TARP limitations and restrictions described above, the TARP rules and regulations have required the Compensation Committee to undertake a semi-annual risk assessment with respect to certain of the compensation plans, programs and arrangements maintained by us, regardless of whether the individual employee(s) covered by the plan, program or arrangement is a named executive officer. The risk assessments were performed by the Bank's Chief Risk Officer and the Compensation Committee. The Bank's Chief Risk Officer and the Compensation Committee review all compensation plans and arrangements to ensure that risks are identified and mitigated. The intent of these risk assessments is to minimize the opportunity that any employee will be incentivized to take unacceptable risks in order to maximize his or her compensation under such plans and arrangements. Following the end of the 2013 TARP Period, we were no longer subject to the TARP compensation limitations and restrictions.

Regulatory Impact on Compensation

        In order to more fully understand the Compensation Committee's decisions with respect to compensation during 2012, the committee believes it is beneficial to understand the regulatory context in which these decisions were made.

        As a publicly-traded financial institution, which is also a participant in Treasury's Troubled Asset Relief Program ("TARP"), Old Secondwe and Old Second Nationalthe Bank must contend with several often overlapping layers of regulations, in addition to the TARP compensation-related limitations and restrictions, when considering and implementing compensation-related decisions. These regulations do not set specific parameters within which compensation decisions must be made, but do require Old Second and the Compensation Committeeare primarily intended to be mindful offocus attention on the risks that often go hand-in-hand with compensation programs designed to incentivize the achievement of better than average performance. WhileWe and the regulatory focus on risk assessment has been heightened overCompensation Committee strive to incorporate the last several years,broad principles of these regulations into the incorporation of general concepts of risk assessment into compensation decisions is not a recent development.

        During 2012, Old Second continued as a participant in TARP. As a result of its participation, Old Second and certain of its employees have been and will continuemade with respect to be subject to compensation-related limitations and restrictions for the period that Treasury holds the preferred stock issued by Old Second in TARP. The TARP compensation limitations and restrictions include the following:

•

Except in limited circumstances, Old Second's five most highly compensated employees (as determined on an annual basis) are prohibited from receiving cash bonus payments during the TARP period. Messrs. Skoglund, Cheatham and Eccher were subject to this prohibition during 2012 and will continue to be subject to it during 2013 for as long as Treasury retains its ownership of the preferred stock.



•

Except in limited circumstances, Old Second'sour named executive officers and its next five most highly compensated employees (each as determined on an annual basis) are prohibited from receiving any severance payments upon a termination of employment or any payments triggered by the occurrence of a change in control.



•

Our named executive officers and next 20 most highly compensated employees are subject to a "clawback" of incentive compensation if that compensation is based on materially inaccurate

financial statements or performance metrics. Further, no one in this group of employees can receive any tax gross-up payment during the TARP period.

•

Old Second is limited to an annual deduction of $500,000 with respect to the compensation paid to each of our named executive officers.

        In addition to the foregoing limitations and restrictions, the TARP rules and regulations have required the Compensation Committee to undertake a semi-annual risk assessment with respect to certain of the compensation plans, programs and arrangements maintained by Old Second, regardless of whether the individual employee(s) covered by the plan, program or arrangement is a named executive officer. The risk assessments are performed by the senior risk officer and the committee. The senior risk officer and the committee review all compensation plans and arrangements to ensure that risks are identified and mitigated. The intent of these risk assessments is to minimize the opportunity that any employee will be incentivized to take unacceptable risks in order to maximize his or her compensation under such plans and arrangements.other employees.

        Under its long-standingInteragency Guidelines Establishing Standards for Safety and Soundness, the FDIC has long held that excessive compensation is prohibited as an unsafe and unsound practice. In describing a framework within which to make a determination as to whether compensation is to be considered excessive, the FDIC has indicated that financial institutions should consider whether aggregate cash amounts paid, or noncash benefits provided, to employees are unreasonable or disproportionate to the services performed by an employee. The FDIC encourages financial institutions to review an employee's compensation history and to consider internal pay equity, and, as appropriate, to consider benchmarking compensation to peer groups. Finally, the FDIC provides that, in order to give proper context, such an assessment must be made in light of the institution's overall financial condition.

        In addition to theSafety and Soundness standards, the Compensation Committee must also take into account the joint agencyGuidance on Sound Incentive Compensation Policies. Various financial institution regulatory agencies worked together to issue theGuidance, which is intended to serve as a compliment to theSafety and Soundness standards. TheGuidance sets forth a framework for assessing and mitigating risk associated with incentive compensation plans, programs and arrangements maintained by financial institutions. TheGuidance is more narrownarrower in scope than theSafety and Soundness standards because it applies only to senior executive officers and those other individuals who, either alone or as a group, could pose a material risk to an institution. With respect to such individuals, theGuidance is intended to focus an institution's attention on balanced risk-taking incentives, compatibility of incentives with effective controls and risk management, and a focus on general principles of strong corporate governance in establishing, reviewing and maintaining incentive compensation programs.

        The Compensation Committee, with the assistance of its advisors and companyour management, continues to monitor the status of compensation-related rules and regulations expected to be finalized or issued under the Dodd-Frank Act Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act").Act. While the Compensation Committee believes its own risk assessment procedures are effective, the Compensation Committee is prepared to implement any additional steps that may be deemed necessary to fully comply with such rules and regulations when finally finalized or issued. The Compensation Committee does note, however, that the proposed risk assessment rules issued under the Dodd-Frank Act nearly mirror theSafety and Soundness standards and the framework of theGuidance. As such, the Compensation Committee already adheres, in many respects, with the proposed rules and regulations under the Dodd-Frank Act.

        Finally, in addition to the foregoing, as a publicly-traded corporation, Old Second iswe are also subject to the SEC's rules regarding risk assessment. Those rules require a publicly-traded company to determine whether any of its existing incentive compensation plans, programs or arrangements create risks that are reasonably likely to have a material adverse effect on the company.

        The Compensation Committee continues to believe in and practice a sensible approach to balancing risk-taking and rewarding reasonable, but not necessarily easily attainable, goals and this has always been a component of its overall assessment of the compensation plans, programs and arrangements it has put in place for Old Second'sour named executive officers. In this regard, the Compensation Committee has regularly revisited the components of the frameworks set forth in theSafety and Soundness standards and theGuidance as an effective tool for conducting its own assessment of the

balance between risk and reward built into Old Second'sour compensation programs for named executive officers. The Compensation Committee believes the company haswe have adequate policies and procedures in place to balance and control any risk-taking that may be incentivized by the employee compensation plans. The Compensation Committee further believes that such policies and procedures will work to limit the risk that any employee would manipulate reporting earnings in an effort to enhance his or her compensation.

Impact of Prior Say-on-Pay Votes on Compensation Decisions

        At Old Second's 2012our 2013 Annual Meeting, approximately 90%95% of stockholders present and entitled to vote approved the non-binding advisory proposal on the compensation of certain executive officers. Old Second, theWe, our board and the Compensation Committee pay careful attention to communications received from stockholders regarding executive compensation, including the non-binding advisory vote. Old SecondWe considered the positive result of the 20122013 advisory vote on executive compensation but not for specific 20122013 compensation decisions. Based on this consideration and the other factors described in this Compensation Discussion & Analysis, the Compensation Committee did not alter the policies or structure for named executives' compensation for 2012.2013.

Financial and Operational Performance

        In 2013, we continued our emphasis on returning to sustained profitability and growth as its primary objectives. Specific accomplishments in 2013 that directly impacted those objectives include:

•

Reduction in classified assets by 45%;



•

Net income of $11.8 million highlighted by lower credit costs, loan loss reserve releases and lower insurance costs; and



•

Balance sheet stability allowing renewed focus on commercial loan relationship generation.

        Accordingly, our executive compensation, particularly metrics for the organization's short-term incentive plans, focused on the following goals and accountabilities: our and the Bank's net income growth; specific profit center performance; asset-credit quality risk; reduction in classified assets; and cost savings initiatives. These metrics were prudently designed to contain and minimize risk while at the same time emphasizing growth and profitability.

Compensation Philosophy and Objectives

        Our philosophy is intended to align the interests of management with those of our stockholders without creating undue risk to Old Second.us. The executive compensation program is designed in a manner which the committeeCompensation Committee believes does not provide our executives with incentives to engage in business activities or other behavior that would threaten theour value of Old Second or the investments of our stockholders.

        The executive compensation program is intended to accomplish the following objectives:

•

align the interests of our named executive officers with those of our stockholders;



•

maintain a corporate environment which encourages stability and a long-term focus for both Old Secondus and our management;



•

maintain a program which:



•

clearly motivates personnel to perform and succeed according to our current goals;



•

retains key personnel critical to our long-term success; and



•

does not create undue risk to Old Second;us; and

•

ensure that management:



•

fulfills its oversight responsibility to its constituents which include stockholders, customers, employees, the community and government regulatory agencies;



•

conforms its business conduct to the highest ethical standards;



•

remains free from any influences that could impair or appear to impair the objectivity and impartiality of its judgments or treatment of our constituents; and



•

continues to avoid any conflict between its responsibilities to Old Secondus and each individual's personal interests.

Compensation Components

        General.    In recent years, the committeeCompensation Committee has been required to reevaluate the components of our compensation program because of the continuing impact of the TARP executive compensation rules. Historically, Old Second hadwe have included four major components in our named executive officers' compensation program: (i) base salary, (ii) annual cash bonus, (iii) equity awards and (iv) additional benefits. However, moreuntil recently, the committee has beenCompensation Committee was unable to rely on annual cash bonuses as a component for some of our named executive officers because of the impact of the TARP compensation limitations and restrictions. As such, for thoseour named executive officers, the committeeCompensation Committee has focused primarily on base salary, equity awards permitted under the TARP rules, and additional benefits. This began to change somewhat during 2013 with our exit from the TARP when cash incentive bonuses again became a possibility for our named executive officers.

        The Compensation Committee's decisions regarding each of the components for the named executive officers are based in part on the committee'sCompensation Committee's subjective judgment and take into account qualitative and quantitative factors, as are discussed below. In reviewing an executive officer's compensation, the committeeCompensation Committee considers and evaluates all components of the officer's total compensation package. This involves reviewing base salary, bonus, incentive stock awards, perquisites, participation in our non-qualified executive plans, participation in our 401(k) plan and any other payments, awards or benefits that an officer earns (to the extent each is permitted under the TARP compensation limitations and restrictions). Additionally, the committeeCompensation Committee takes into consideration any amounts an executive officer is entitled to upon retirement, termination or a change-in-control event, including the impact of the TARP compensation limitations and restrictions on these amounts. In this regard, in establishing compensation for 20122013 and 2013,2014, the committeeCompensation Committee utilized tally sheets summarizing these aggregated amounts.

        Base Compensation—Salary.    The Compensation Committee believes that base compensation should offer security to each executive sufficient to maintain a stable management team and environment. Because of the need to provide stability, salaries make up the largest portion of the executives' compensation. In establishing a senior executive officer's initial base salary the committeeCompensation Committee considers, among other things, the executive's level of responsibility, prior experience, breadth of knowledge, the competitive salary practices at peer companies, internal performance objectives, education, internal pay equity, potential bonus and equity awards, level of benefits and perquisites and the tax deductibility of base salary.

        The committeeCompensation Committee reviews salaries of the named executive officers on an annual basis. As with all of its decisions regarding compensation levels, when reviewing salaries the committeeCompensation Committee considers the levels of all aspects and components of the officer's compensation, including the individual's potential bonus and equity awards as well as the level of benefits and perquisites offered. All of these factors are considered on a subjective basis in the aggregate, and none of the factors is accorded a specific weight.

        Cash Incentive Awards—Bonus.    The executive compensation restrictions contained in the TARP rules prohibit Old Secondprohibited us from paying or accruing cash bonuses on behalf of the top five most highly paid employees (as determined on an annual basis) during the 2013 TARP period.Period. Messrs. Skoglund, Cheatham and Eccher were subject to the bonus prohibition during 2012 and will be subject to it again during 2013. As such, none of our named executive officersthe 2013 TARP Period, but were eligible to receive nor did they receive, a cash bonusbonuses with respect to Old Second's performance or their own individual performance during 2012.any part of 2013 following the 2013 TARP Period.

        In anticipation of our possible exit from the TARP during 2013, the Compensation Committee adopted a non-equity incentive compensation plan for our named executive officers. The 2013 plan provides thatestablished a structure under which Messrs. Skoglund, Cheatham and Eccher and Cheatham willwould be eligible for cash bonus payments if Old Second'sour performance during 2013 meetsmet or exceedsexceeded certain performance goals.goals; provided that, the Compensation Committee ultimately had discretion to determine the amount of any bonuses awarded. Any such bonus payment ispayments were contingent upon our exit from the TARP and wouldwere required to be prorated to reflect the period of time during 2013 that Old Secondwe continued to be a participant in the TARP.

        The 2013 bonus plan was designed to provide an incentive to achieve corporate financial goals while considering the mitigation of any risks which may affect our overall financial performance. Generally speaking, thresholds and targets are set so that improvement in a performance metric is necessary in order to receive any or all of the bonus payout with respect to that metric.

        In setting the performance metrics, Mr. Skoglund provided recommendations with respect to members of management other than himself to the Compensation Committee. The Compensation Committee then, outside the presence of Mr. Skoglund, considers factors applicable to Mr. Skoglund's annual bonus.

        In 2013, pursuant to our bonus plan, Mr. Skoglund was potentially eligible for an annual bonus equal to 51.25% of his salary, or $258,761. Mr. Eccher was potentially eligible for an annual bonus equal to 45% of his salary, or $146,250, and Mr. Cheatham was potentially eligible for an annual bonus equal to 40% of his salary, or $100,800. Based on our performance during 2013 and the adjustment required under the TARP rules, Messrs. Skoglund and Eccher earned 81% of their bonuses, and Mr. Cheatham earned 61% of his bonus.

        The components designated by the Compensation Committee and the target percentage of salary that the named executive officers were eligible to earn for 2013 performance and resulting actual bonus received, were as follows:

        Company Income Growth.    The Compensation Committee believes that our growth, as measured by reference to our net income, is an appropriate measure because it focuses on our financial performance, which in turn reflects stockholder value. Each named executive officer has a portion of his bonus tied to this metric. The Compensation Committee applied the following scale to determine

how much of the target percentage any named executive officer would receive based on our net income:

        Our 2013 net income, excluding the reversal of the valuation allowance against our deferred tax assets, exceeded $5.0 million, and, therefore, the named executive officers earned 125% of this component.

        Capital Ratios.    The Compensation Committee believes that our and the Bank's capital ratios are another way in which we can measure our return to sustained profitability. As such, each of our named executive officers has a portion of his bonus tied to this metric. Provided that we maintained at the Bank during 2013 a Tier 1 capital leverage capital ratio of 10% or better and a total capital ratio of 14% or better, our named executive officers would earn 100% of the bonus attributable to this metric. If we fell below either level, our executives would receive no bonus with respect to this metric.

        The Bank's leverage capital ratio was 10.97% and its total capital ratio was 18.04% as of December 31, 2013. Therefore, the named executive officers earned 100% of this component.

        Asset/Credit Quality.    With respect to Messrs. Skoglund and Eccher, because classified assets were a difficult issue for the company to navigate the last several years, the Compensation Committee believes incentivizing them to focus on our asset/credit quality will further ensure that we are working toward sustainable growth and profitability. As such, the Compensation Committee determined that a bonus component for them would appropriately be tied to our classified asset ratio. If the ratio remained at 61.90% or lower, each of Messrs. Skoglund and Eccher would be entitled to 100% of their bonus with respect to this metric. If the ratio exceeded 61.90%, then no bonus would be earned with respect to our asset/credit quality. Our classified asset ratio was 43.44% at December 31, 2013, thus entitling Messrs. Skoglund and Eccher to 100% of the bonus associated with this component.

        Cost Savings.    The Compensation Committee believes that expense control and efficiency of operations is a goal we must continually strive for in order to provide for the best financial return for our shareholders. Further, the Compensation Committee believes that Mr. Cheatham is the person best situated to impact our efforts in this regard. As such, the Compensation Committee deemed a bonus component in 2013 tied to cost savings as measured by total non-interest expense at the Company level to be merited. If our total non-interest expense was less than $84,200,000, Mr. Cheatham would earn 100% of the bonus with respect to this component. No bonus would be earned if our total non-interest expense was not below that level.

        Although we reported non-interest expense of $83,144,000, the Compensation Committee determined that Mr. Cheatham was not eligible for a bonus with respect to this component because the reported non-interest expense reflects an adjustment that was not anticipated at the time performance metrics were established.

        Long-Term Incentive Awards—Equity Awards.    TheOur board and the Compensation Committee believe in senior management ownership of our common stock as an effective means to align the interests of senior management with those of the stockholders. In addition, because the TARP rules prohibitprohibited the payment of cash bonuses to our named executive officers, the committeeCompensation Committee has in recent years placed a greater focus on equity awards, which arewere permitted under the TARP rules. Our

current long-term incentive plan (the "Incentive Plan"), which was approved by stockholders at the 2008 annual meeting, is intended to promote equity ownership in Old Secondthe Company by the directors and selected officers and employees, focus the management team on increasing value to stockholders, increase their proprietary interest in the success of Old Secondthe Company and encourage them to remain in the employ of Old Secondthe Company or its subsidiaries for a long period of time. The current equity incentive plan authorizes the issuance of up to 575,000 shares of Old Second'sour common stock, including the granting of qualified stock options, non-qualified stock options, restricted stock, restricted stock units and stock appreciation rights.

        All awards are at the discretion of the committeeCompensation Committee and are generally subjective in nature. In determining the number of equity awards to be granted to executive officers, the committeeCompensation Committee considers individual and corporate performance and whether the respective goals were obtained, the person's position and ability to affect profits and stockholder value, as well as the level of awards granted to individuals with similar positions at our peer organizations. Because of the nature of equity awards, the committeeCompensation Committee also evaluates the prior awards of stock options and restricted stock and takes into account the overall wealth accumulation of a given executive officer through such awards.

        Pursuant to a formal equity compensation policy, all equity grants are finalized in the beginning of each calendar year. This allows for a more complete review of the full prior year when making equity awards as well as coordinating the granting of equity awards to a time when there is less likelihood of there being existing material, non-public information, as the grants will normally be made after the public release of Old Second'sour financial information for the prior year.

        Over the last few years, because of our continuing participation in TARP, the Compensation Committee has made most equity awards in the form of restricted stock or restricted stock units. The TARP rules limited our ability to grant to our named executive officers equity awards other than restricted stock or restricted stock units. The TARP rules also dictated the terms and conditions of those awards. In 2012,2013, the committeeCompensation Committee granted restricted stock that complied with the TARP rules to the named executive officers. The Compensation Committee believes that restricted stock is an appropriate employee retention tool because it aligns our executive officers' interests with those of Old Second'sour stockholders. The awards subject to the TARP rules have a two-year vesting period but are also subject to additional TARP rules that operate to delay the transferability of the restricted stock, other than to satisfy tax withholding obligations, until each 25% increment of TARP financial assistance has been repaid to the Treasury.period.

        The Compensation Committee did not make a new equity award to our named executive officers in early 2013,2014 but retains the discretion to do so later in the year if it determines that circumstances warrant such an award.

        When considering our past equity awards that were made subject to the TARP rules, it is important to note that Old Second participated in the Treasury's TARP auction process during early 2013. As a result, Old Second was required to forfeit 75% of each outstanding equity award that was granted pursuant to the TARP rules. For our named executive officers, this resulted in a forfeiture of 75% of each of the equity awards, even if previously vested, made to such officer during 2009, 2010, 2011 and 2012.

        All Other Compensation.    We provide general and customary benefit programs to executive officers and other employees. Benefits offered to executives are intended to serve a different purpose than base salary, bonus and equity awards. While the benefits offered are competitive with the marketplace and help attract and retain executives, the benefits also provide financial security for employees for

retirement as well as in the event of illness, disability or death. Benefits offeredThe benefits we offer to executive officers are generally those offered to other employees with some variation to promote tax efficiency and replacement of benefit opportunities lost to regulatory limits although there are some additional perquisites that may only be offered to executive officers. Because of the nature of the benefits offered, the committeeCompensation Committee normally does not adjust the level of benefits offered on a year-to-year basis. Old SecondWe will continue to offer benefits, the amount of which shall be determined from time-to-time in the sole discretion of the committee,Compensation Committee, provided that such benefits are not in the future determined to be limited or prohibited by the TARP rules.

        The following table summarizes the benefits and perquisites we do and do not provide as well as identifies those employees that may be eligible to receive them:

        Old Second Bancorp, Inc. Employees 401(k) Savings Plan and Trust.    Old Second sponsorsWe sponsor a tax-qualified 401(k) savings plan and trust qualifying under Section 401(k) of the Internal Revenue Code. Virtually all employees are eligible to participate after meeting certain age and service requirements. Eligible employees are permitted to contribute up to a dollar limit set by law. Since Old Secondwe terminated itsour defined-benefit plan as of the end of 2005, the 401(k) plan became the primary retirement vehicle provided by Old Second for itswe provide to our officers and employees. Participants can choose between several different investment options under the 401(k) plan, including shares of Old Second'sour common stock.

        During 2012, Old Second2013, we provided a matching contribution on elective deferrals to eligible participants in an amount equal to 2% of each participant's salary. There is also a profit-sharing portion of the 401(k) plan which provides for an annual discretionary contribution to the retirement account of each employee based in part on our profitability in a given year and on each participant's annual compensation. The contribution amount granted each year is on a discretionary basis and there is no set formula used by the committee.Compensation Committee. No discretionary contribution was provided to employees based on 2012our 2013 financial performance of Old Second.performance.

        Old Second Bancorp, Inc. Amended and Restated Voluntary Deferred Compensation Plan for Executives.    Old Second sponsorsWe sponsor an executive deferred compensation plan, which provides a means for certain executives to voluntarily defer all or a portion of their salary and/or bonus, if any, without regard to the statutory limitations applicable to tax-qualified plans, such as our 401(k) plan. The deferred compensation plan provides for participant deferrals, company matching contributions and discretionary employer profit-sharing contributions. A company matching contribution is credited to the plan on behalf of a participant when the participant elects to defer the maximum amount permitted under the 401(k) plan (including catch-up contributions, if applicable) and keeps that level of deferral for the entire plan year. The company matching contribution is an amount up to 3%, provided at least a 6% deferral was met, of the participant's combined base salary and bonuses, less any matching contribution paid to the 401(k) plan on the participant's behalf. The determination of whether a profit-sharing contribution is made and in what amount is entirely at the committee'sCompensation Committee's discretion and there is no set

formula. For years during the TARP period after 2009, Old Second hasWe suspended the matching contribution under the plan as well because that matching contribution may be prevented by the TARP bonus prohibition. Participants will continue to have the opportunity to make elective deferrals to the plan during the TARP period, unless there are further changes to the TARP rules.while we were a participant in TARP. Participants are permitted to make hypothetical investments in publicly-traded mutual funds that are held in an insurance company separate account with respect to the deferrals and Companyour contributions credited to their accounts under the plan. Participants may elect to receive their plan balance in a lump sum or in installments. Participants may make a withdrawal from the plan during their employment in the event of hardship as approved by the plan's administrator. The plan is administered through an independent service provider.

        Other Perquisites.    It is our belief that perquisites for executive officers should be very limited in scope and value. Due to this philosophy, Old Second haswe have generally provided very nominal benefits to

executives that are not available to full-time employees, and we plan to continue this approach in the future. We do provide country club memberships to certain executives and managers in the ordinary course of business to give them the opportunity to bring in and recruit new business opportunities. These individuals are eligible to use the club membership for their own personal use. Additionally, we provide each of Mr. Skoglund and Mr. Eccher with an automobile allowance to enable them to visit our banking locations on a regular basis as well as to call on our customers. We have disclosed the value of all perquisites to named executive officers in the Summary Compensation Table even if they fall below the disclosure thresholds under the SEC rules. Old SecondWe will continue to offer perquisites, the amount of which shall be determined from time-to-time in the sole discretion of the committee, provided that such perquisites are not in the future determined to be limited or restricted by the TARP rules.Compensation Committee.

Compensation Decisions

        This section describes the decisions made by the committeeCompensation Committee with respect to the compensation for the named executive officers for 20122013 and 2013. As noted above, the TARP rules have served to limit or prohibit, and we expect that they will continue to do so for the remainder of the TARP period, certain forms of compensation for our named executive officers.2014.

        The following is a brief summary of the Compensation Committee's compensation decisions the committee effected for 20122013 and 2013:2014:

•

in 2012, we maintained the same level of base salary as was in effect at the end of 2011;



•

for 2013, minimal merit increases in base salary were granted to our named executive officers in keeping with the conservative compensation guidelines established for the organization;



•

nofor 2014, merit increases in base salary ranging from 3% to 11.5% were granted to our named executive officers;



•

$389,255 cash bonus payments were earned or awarded to our named executive officers with respect to 20122013 performance;



•

the committee awarded restricted stock to Messrs. Skoglund, Cheatham and Eccher in 2012; and



•

benefits and perquisites remained substantially similar in 20122013 compared to prior years and we expect that will continue through 2013 unless otherwise limited or prohibited by the TARP rules.2014.

        Base Salary.    We annually review the base salaries of the named executive officers to determine whether or not they will be adjusted, as described above. The salaries for 2012,2013, determined by the Compensation Committee at the beginning of 2012,2013, are set forth in the Summary Compensation Table on page 28.below. In determining these salary levels, we generally considered the following:

•

the compensation philosophy and guiding principles described above;

•

the general economic factors in the financial industry beyond our control and the financial performance of Old Secondthe Company compared to our peers;



•

the experience and industry knowledge of theour named executive officers and the quality and effectiveness of their leadership at Old Second;leadership;



•

all of the components of executive compensation, including base salary, bonus, stock options, retirement and death benefits, as well as benefits and perquisites; and



•

internal pay equity among Old Secondour executives.

        In early 2013,2014, the committeeCompensation Committee determined the base salaries for the executive officersdirectors for 2013. The committee decided to nominally increase our executive officers' base salaries for 2013.2014. The base salaries for 20122013 and 20132014 are as follows:

        In determining the base salaries for 2013,2014, we considered the same general factors discussed above including the continuing general slowdown in the economy and growth of our earnings, return on average assets and overall assets.

        Bonus.    Based on our named executive officers' achievement of the goals for earning a cash bonus established by the Compensation Committee, we awarded cash bonuses as set forth below:

        Because of our exit from the TARP in 2013, the Compensation Committee has again established for 2014 an incentive bonus program intended to focus our named executive officers on important performance measures.

        Bonus Amounts Earned Prior to TARP.    We became a participant in TARP in January 2009, prior to the time when Treasury issued its interim final rules with respect to the executive compensation limitations and restrictions applicable to TARP participants. As described above, noneit was making decisions in early 2009 with respect to compensation of our named executive officers, were eligiblethe Compensation Committee decided to receive, nor did they receive,take a conservative approach in its interpretation of the relevant TARP compensation rules including the limitation on cash bonusbonuses. Therefore, the Compensation Committee decided to withhold the cash bonuses that our named executives earned with respect to Old Second's performancecalendar year 2008 pending further clarification from Treasury. When Treasury issued its interim final rules in June 2009, it became clear that, had the Compensation Committee acted in early 2009 to pay to our named executive officers the cash bonuses earned during 2008, such payments would have been permitted under the TARP compensation limitations and restrictions. However, because our Compensation Committee had taken a conservative approach, the June 2009 interim final rules prevented us from paying the bonuses earned during 2008 until a point in time when either we or their own individual performance during 2012.the particular named executive officer were no longer subject to the TARP compensation limitations and restrictions.

        In anticipation of our possible exit from TARP duringOctober 2013, the Compensation Committee adopted a non-equity incentive compensation plan for our named executive officers. The 2013 plan providesofficers received payment of bonus amounts that Messrs.were earned during 2008 because payment of such amounts was then permitted pursuant to the TARP compensation limitations and restrictions. Mr. Skoglund received a payment of $235,669, Mr. Cheatham received a payment of $93,094 and Mr. Eccher and Cheatham will be eligible for cash bonus payments if Old Second's performance during 2013 meets or exceeds certain performance goals. Any such bonusreceived a payment is contingent upon our exit from TARP and would be prorated to reflect the period of time during 2013 that Old Second continued to be a participant in TARP.$122,119.

        Equity Awards.    The Compensation Committee typically acts to award equity grants at the beginning of each year, specifically in the months of January and February. In February 2012, the committee awarded 20,000 shares of restricted stockThe Compensation Committee did not make equity award grants to each of our named executive officers.officers in 2013 and not yet done so in 2014 although it retains the discretion to do so later in the year if economic conditions and our performance warrant such grants.

        Forfeiture of TARP Long-Term Incentive Awards.    During the period we were a TARP participant, we were permitted to reward and incentivize our named executive officers through the grant of long-term restricted stock or restricted stock units. Pursuant to Treasury's interim final rules on executive compensation, these awards had to meet certain requirements, including the inclusion of a provision that allowed the awards to become transferable by the named executive officer in 25% increments only as each 25% increment in TARP financial assistance was repaid. In setting grant levels for equity awards, the committee typically considers our compensation philosophy, the position and levelNovember 2011, as Treasury undertook an initiative to auction off many TARP securities, Treasury issued an interpretation of responsibility of each officer, our beliefthis rule providing that equity awards should be a significant partwhere an auction did not raise 100% of the total mixfinancial assistance provided to a TARP participant, award holders of executive compensation, the number of other equity awards currently held by each officer and the level of awards granted to them in prior years.

        The restricted stock granted in 2012 to Messrs. Skoglund, Cheatham and Eccher islong-term incentives that were subject to the requirements set forthTARP rules, would have to forfeit those awards in proportion to the TARP compensation limitationsamount raised by Treasury in its auction.

        Because Treasury auctioned our Series B Preferred Stock and restrictions. As such, the awards will vest two years from the date of grant, but will not be transferable (otherrelated warrant at less than to satisfy tax withholding obligations) until Old Second repays its TARP financial assistance. As each 25% of TARP assistance is repaid, 25%100% of the vested restricted stock will become transferable.

        As was noted above, when consideringfinancial assistance received, our past equity awards, including the 2012 awards described here, it is important to note that Old Second participated in the Treasury's TARP auction process during early 2013. As a result, Old Second wasnamed executive officers were required to forfeit 75% of each outstanding equity award that was granted pursuant to the long-term incentive awards received during the period we were a TARP rules. For our named executive officers, that means 75%participant. Mr. Skoglund forfeited 58,523 shares of the 2012 award described in the preceding paragraph will beCompany stock, Mr. Cheatham forfeited before vesting.

42,008 shares of Company stock and Mr. Eccher forfeited 47,902 shares of Company stock.

        All Other Compensation.    While the committeeCompensation Committee reviews and monitors the level of other compensation offered to the named executive officers, the committeeCompensation Committee typically does not adjust the level of benefits offered on an annual basis. The committeeCompensation Committee does consider the benefits and perquisites offered to the named executive officers in its evaluation of the total compensation received by each. The perquisites received by the named executive officers in 20122013 are reported in the Summary Compensation Table on page 28.below. The benefits offered in 20122013 to the named executive officers are expected to continue for 2013, unless otherwise limited or prohibited by the TARP rules.2014.

COMPENSATION COMMITTEE REPORT

        We haveThe Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on ourthe Compensation Committee's review and discussion with management, we havethe Compensation Committee has recommended to theour board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in Old Second's Annual Report on Form 10-K for the year ended December 31, 2012.2013.

        Section 111(b)(2)(A) of the Emergency Economic Stabilization Act requires the Compensation Committee to conduct, in conjunction with a senior risk officer of Old Second,the Bank's Chief Risk Officer, a review of the incentive compensation arrangements in place between Old Secondthe Company and its employees. In February 2013, the Bank's Chief Risk Officer presented his comprehensive risk assessment of the organization's compensation plans to the Compensation Committee. Because of the TARP auction in early 2013, the second semi-annual risk assessment was not required. However, our management and the Compensation Committee have determined that it is appropriate for the Bank's Chief Risk Officer to continue to conduct his risk assessments on an annual basis.

        The Compensation Committee certifies that, at least once every six months during the year ended December 31, 20122013 TARP Period (a) it has reviewed with the senior risk officer of Old SecondBank's Chief Risk Officer the senior executive officer ("SEO") compensation plans and has made all reasonable efforts to ensure that these plans do not encourage SEOs to take unnecessary and excessive risks that threaten the value of Old Second;the Company; (b) it has reviewed with the senior risk officerBank's Chief Risk Officer the employee compensation plans and has made reasonable efforts to limit any unnecessary risks these plans pose to Old Second;the Company; and (c) it has reviewed the employee compensation plans to eliminate any features of these plans that would encourage the manipulation of reported earnings of Old Secondthe Company to enhance the compensation of any employee ((a), (b) and (c) being collectively referred to as the "TARP Risk Assessment"). In 2012, the committee and Old Second's Chief Risk Officer met in February and August to conduct the required TARP Risk Assessment.

        In the course of conducting its TARP Risk Assessment, the Compensation Committee considered the overall business and risk environment confronting Old Secondthe Company and how the SEO compensation plans and employee compensation plans serve to motivate employee behavior when operating within

that environment. In particular, the Compensation Committee's TARP Risk Assessment focused on the following compensation plans (* denotes plans in which SEOs participate):

        With the exception of individual bonus goals designated under the Officers Incentive Plan, Old Secondthe Company does not maintain any compensation plans in which only SEOs participate. For purposes of this

discussion, references to "SEO compensation plans" mean the portion of an employee plan in which the SEOs participate.

        With respect to the SEO compensation plans, the Compensation Committee believes that such plans do not encourage Old Second'sthe Company's SEOs to take unnecessary or excessive risks that could harm the value of Old Second.the Company. The Compensation Committee believes this to be true because, as is more fully described in the Compensation Discussion and Analysis, the Compensation Committee strives to provide a balanced aggregate compensation package to ourthe Company's SEOs that serves to incentivize ourthe Company's SEOs to manage the business of Old Secondthe Company in a way that will result in Company-wide financial success and value growth for ourthe Company's stockholders.

        We believeThe Compensation Committee believes it is appropriate for ourthe Company's executives to focus certain of their efforts on near-term goals that have importance to Old Second;the Company; however, wethe Compensation Committee also acknowledgeacknowledges that near-term focus should not be to the detriment of a focus on the long-term health and success of Old Second.the Company. In practice, providing base salary to any employee provides the most immediate reward for job performance. The Compensation Committee engages in an annual process, as is described in the Compensation Discussion and Analysis, to set base salary. We believe ourThe Compensation Committee believes its process for establishing base salary is relatively free from risk to Old Second,the Company, as we dothe Compensation Committee does not typically make significant adjustments to base salary based on a single year's performance. The committeeCompensation Committee believes it is appropriate to reward ourthe Company's executives' focus on near-term goals, when such goals correspond to the overall Company or operating division goals and direction set by ourthe Company's board of directors. To reward the executives for such focus, the Compensation Committee maintains an annual cash incentive plan (i.e., Officers Incentive Plan) for ourthe Company's executives. In establishing ourthe annual cash incentive plan, we trythe Compensation Committee tries to provide an adequate level of incentive for the achievement of Company, operating division and individual goals, while also limiting the maximum amount that may be earned so that executives do not feel the need to strive for attainment of unreasonable or unrealistic levels of performance. In this way, we believethe Compensation Committee believes the design of the annual cash incentive plan does not encourage ourthe Company's executives to take unnecessary or excessive risks that could harm the value of Old Second.the Company.

        The other incentive compensation elements offered to ourthe Company's SEOs, with the exception of perquisites, are intended to reward performance over the long-term or are intended to focus ourthe Company's executives' attention on the long-term performance of Old Second. We feelthe Company. The Compensation Committee feels there is little, if any, risk associated with ourthe Company's Employees 401(k) Savings

from those in effect as of 90 days prior to the change in control; (ii) moving the executive's principal office more than 25 miles from its location immediately prior to the change in control;




(iii) a material reduction of the executive's base salary and/or other benefits; and, (iv) a material breach by Old Secondus or a successor, of any term of the Assurance Agreement, including any failure by Old Secondus to ensure assumption of the Assurance Agreement by a successor or any failure of a successor company to assume and agree to perform Old Second'sour entire obligations under the Assurance Agreement.

•

"Change in control" means (i) any person, company or other entity, other than an employee benefit plan or subsidiary company of Old Second,us, becoming the beneficial owner, either directly or indirectly, of 33% or more of Old Second'sour stock; (ii) during any two consecutive years, a change in a majority of the members of Old Second'sour board of directors; or (iii) consummation of a merger or consolidation where our stockholders of Old Second before the merger or consolidation do not own more than 67% of the resulting entity, a complete liquidation or our dissolution of Old Second or a sale or other disposition of substantially all of Old Second'sour assets.

        In exchange for the payments and benefits provided under the Assurance Agreements, the executive officers agree to be bound by confidentiality, non-competition and non-disclosure provisions.

        Except for payments and benefits provided by the Assurance Agreements, all other payments and benefits provided to any NEO upon termination of his or her employment are the same as the payments and benefits provided to our other eligible employees of Old Second.

        The TARP rules do not prohibit payments made to a named executive officer (or his estate) where the officer's employment terminates as a result of his death or disability. Our Cash Incentive Plan provides for the payment of a pro rata cash bonus to be paid in the case of death or disability. Since no cash bonus was paid for 2012, there would have been no pro rata bonus as of December 31, 2012.employees.

        Retirement, Death and Disability.    Generally speaking, a termination of employment due to retirement, death or disability does not entitle the named executive officers to any payments or benefits that are not available to other employees. Following a termination due to death or disability, an employee (or his or her estate) shall be entitled to the following:

•

Upon a termination due to death or disability, all unvested stock options shall become immediately 100% vested and an employee or beneficiary shall have a period of twelve months following such termination during which to exercise his or her vested stock options.



•

Any unvested restricted stock or restricted stock units outstanding at the time of an employee's termination due to death or disability shall become immediately 100% vested upon such termination.

        Also, it should be noted that, pursuant to existing agreements, as of the time of a termination of employment due to retirement, all unvested stock options shall become immediately 100% vested; however, this acceleration of vesting will not be true in the case of a retirement during the TARP period.vested.

        Acceleration of Vesting Upon a Change in Control.    All employees, including the named executive officers, who receive equity awards under our equity incentive plan will immediately vest in any unvested equity awards held by such employees upon the occurrence of a change in control.





DIRECTOR COMPENSATION


        Each director of Old Secondour directors also serves as a director of Old Second National Bank. In 20122013 each non-employee director received $1,000 for every board meeting and $500 for every committee meeting attended if there were no other bank-level meetings held that day. Non-employee directors of Old Second Nationalthe Bank received a $13,000 annual retainer. Due to increased responsibilities associated with mandates from Sarbanes-Oxley, the Lead Director and Compensation Committee Chairman, Mr. Palmer, received an $18,000 retainer in 20122013 and the Audit Committee Chairman, Mr. Finn, received a $20,000 annual retainer in 2012,2013, due to increased meetings and increased time spent on behalf of the Audit Committee. Messrs. Skoglund, Eccher and Cheatham, as our executive officers, of Old Second, did not receive any board fees for histheir service on Old Second'sour board, nor did hethey receive board fees for histheir service on the board




of the Old Second National Bank. The following table sets forth the fees earned by each non-employee director and senior director in 2012:2013:

Name		Fees earned or paid in cash ($)(1)			Total ($)				Fees earned or paid in cash ($)(1)			Total ($)
Edward Bonifas		$	43,500		$	43,500			$	46,000		$	46,000
Barry Finn			48,000			48,000				51,000			51,000
William Kane			37,500			37,500				37,500			37,500
John Ladowicz			46,000			46,000				47,500			47,500
William Meyer			40,500			40,500				38,000			38,000
Gerald Palmer			47,500			47,500				48,000			48,000
James C. Schmitz			46,000			46,000				46,000			46,000
Duane Suits								��		42,500			42,500

---

(1)

We maintain the Old Second Bancorp, Inc. Amended and Restated Voluntary Deferred Compensation Plan for Directors under which directors are permitted to defer receipt of their directors' fees. The directors who participate in the plan are permitted to make hypothetical investments in publicly-traded funds that are held in an insurance company separate account, with respect to the contributions credited to their plan accounts. We may, but are not required to, contribute the deferred fees into a trust, which may hold our stock. The plan is a nonqualified deferred compensation plan and the directors have no interest in the trust. The deferred fees and any earnings thereon are our unsecured obligations of Old Second.obligations. Any shares held in the trust are treated as treasury shares and may not be voted on any matter presented to stockholders. We do not pay any above-market interest on the compensation or fees deferred by the directors.





PROPOSAL 2:



NON-BINDING ADVISORY VOTE TO APPROVE EXECUTIVE OFFICER
COMPENSATION


        Section 14A of the Exchange Act, as created by Section 951 of the Dodd-Frank Act, and the rules and regulations promulgated thereunder, require publicly traded companies, such as Old Second, to conduct a separate stockholder advisory vote to approve the compensation of the registrant's executive officers, as disclosed pursuant to the Securities and Exchange Commission's compensation disclosure rules, commonly referred to as a "say-on-pay" vote. In accordance with these requirements, we are providing stockholders with an advisory vote on the compensation of our executive officers.

        As described in more detail in the Compensation Discussion and Analysis section of this proxy statement, the overall objectives of Old Second's compensation programs have been to align executive officer compensation with the success of meeting long-term strategic operating and financial goals. Stockholders are urged to read the Compensation Discussion and Analysis section of this proxy statement, as well as the Summary Compensation Table and other related compensation tables and narrative disclosure that describe the compensation of our named executive officers in 2012.2013. The Compensation Committee and the board of directors believe that the policies and procedures articulated in the Compensation Discussion and Analysis section are effective in implementing our compensation philosophy and achieving our goals, and that the compensation of our named executive officers in fiscal 20122013 reflects and supports these compensation policies and procedures.

        In accordance with the requirements of the Dodd-Frank Act and the rules and regulations promulgated thereunder, the following resolution is submitted for stockholder approval:

        "RESOLVED, that Old Second Bancorp, Inc.'s stockholders approve, on an advisory basis, its executive compensation as described in the section captioned 'Compensation Discussion and Analysis' and the tabular disclosure regarding named executive officer compensation under 'Executive Compensation' contained in Old Second's proxy statement dated April 15, 2013.21, 2014."

        Approval of this resolution requires the affirmative vote of holders of a majority of the shares of stock having voting power and present in person or represented by proxy at the annual meeting. While this say-on-pay vote is required, as provided in Section 14A of the Exchange Act, it is not binding on the Compensation Committee or our board of directors and may not be construed as overruling any decision by the Compensation Committee or our board. However, the Compensation Committee will take into account the outcome of the vote when considering future compensation arrangements.

Board Recommendation:

        The board of directors recommends stockholders vote to approve the overall compensation of our named executive officers, as described in this proxy statement, by voting "FOR" this proposal. Proxies properly signed and returned will be voted "FOR" this proposal unless stockholders specify otherwise.





PROPOSAL 3:

ADVISORY (NON-BINDING) VOTE RELATING TO THE FREQUENCY OF FUTURE
STOCKHOLDER VOTES ON THE COMPENSATION OF CERTAIN EXECUTIVE OFFICERS


        Section 14A of the Exchange Act, as created by Section 951 of the Dodd-Frank Act, and the rules and regulations promulgated thereunder require publicly traded companies, such as the Company, to permit a separate stockholder vote on the frequency with which stockholders shall conduct an advisory say-on-pay vote on executive compensation, such as the proposal above. In accordance with these requirements, we are providing stockholders with an advisory vote on the frequency with which our stockholders will vote on a say-on-pay proposal.

        The advisory vote on the frequency of say-on-pay votes is a nonbinding vote as to how often say-on-pay votes should occur: every year, every two years or every three years. In addition to those choices, stockholders may also abstain from voting. Section 14A of the Exchange Act requires us to hold an advisory vote on the frequency of say-on-pay votes at least once every six years.

        After careful consideration, our board of directors recommends that future stockholder say-on-pay votes be conducted annually. The board values and encourages constructive input from our stockholders regarding our compensation philosophy, policies and practices, and believes it is important that such policies and practices are aligned with the best interests of our stockholders. An annual say-on-pay vote will provide the board and Compensation Committee with useful information on stockholder sentiment about these important matters on the most frequent and consistent basis.

        Although the board recommends a say-on-pay vote every year, stockholders are not voting to approve or disapprove the board's recommendation. Rather, stockholders are being asked to vote on the following resolution:

        "RESOLVED, that the stockholders of Old Second Bancorp, Inc., determine, on an advisory basis, that the frequency with which the stockholders shall have an advisory vote on executive compensation set forth in Old Second Bancorp, Inc.'s, proxy statement for its annual meeting of stockholders, beginning with the 2013 Annual Meeting of Stockholders, is (i) every year, (ii) every two years, or (iii) every three years."

        The choice which receives the highest number of votes will be deemed the choice of the stockholders.

        While this advisory vote is required, as provided in Section 14A of the Exchange Act, it is not binding on our Compensation Committee or board of directors and may not be construed as overruling any decision by the Compensation Committee or the board. However, the Compensation Committee will take into account the outcome of the vote when determining the frequency of future say-on-pay votes.

Board Recommendation

The board of directors recommends a vote for the "every year" frequency alternative. Proxies properly signed and returned will be voted for the "every year" frequency unless stockholders specify otherwise. Stockholders are not voting to approve or disapprove the board of director's recommendation. Stockholders may choose among the three choices included in the resolution above, or may abstain for voting on this proposal.





PROPOSAL 4:3

RATIFICATIONAPPROVAL OF OUR AMENDED AND RESTATED RIGHTS AGREEMENT AND TAX
BENEFITS PRESERVATIONTHE 2014 EQUITY INCENTIVE PLAN


        On September 12, 2012,Our board has approved the Company executed an amendmentOld Second Bancorp, Inc. 2014 Equity Incentive Plan (the "2014 Equity Incentive Plan") to their Rights Agreement and entered intopromote the Tax Benefits Plan, betweenlong-term financial success of the Company and its subsidiaries by attracting and retaining key employees and other individuals, and directed that the 2014 Equity Incentive Plan be submitted for approval by our shareholders. We are submitting the 2014 Equity Incentive Plan to our shareholders at this time to:

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replace our current equity compensation plan, the Old Second National Bank,Bancorp, Inc. 2008 Equity Incentive Plan;



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comply with Nasdaq Stock Market rules, which require shareholder approval; and



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allow performance awards under the 2014 Equity Incentive Plan to qualify as rights agent."performance-based compensation" under Code Section 162(m).

        One of the requirements of "performance-based compensation" under Code Section 162(m) is that the material terms of the performance goals must be approved by shareholders. These material terms generally include (i) the employees eligible to receive compensation, (ii) a description of the business criteria on which the performance goal is based, and (iii) the maximum amount of compensation that could be paid to any employee if the performance goal is attained. Shareholder approval of the 2014 Equity Incentive Plan is intended to constitute approval of the material terms of the performance goals under the 2014 Equity Incentive Plan for purposes of Code Section 162(m).

        If the 2014 Equity Incentive Plan is not approved by our shareholders, it will not be adopted and we will continue to operate under our existing equity compensation plan until its expiration. In the event the 2014 Equity Incentive Plan is not approved and our existing plan expires, we believe that higher cash compensation may be required to attract and retain key employees and other individuals. The Tax Benefits2014 Equity Incentive Plan amends, restatessubmitted for approval reflects current practices in equity incentive plans that we consider best practices such as:

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Multiple Award Types.  The 2014 Equity Incentive Plan permits the issuance of restricted stock units, options, restricted stock and replacesother types of equity and cash incentive grants, subject to the Rights Agreement, betweenshare limits of the Companyplan. This breadth of award types will enable the plan administrator to tailor awards in light of the accounting, tax and Old Second National Bank, as Rights Agent, dated asother standards applicable at the time of September 17, 2002 (the "Original Plan"), which previously governedgrant. Historically, these standards have changed over time.



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No Evergreen Feature.  The number of authorized shares under the preferred2014 Equity Incentive Plan is fixed at 375,000. As of the effective date of the 2014 Equity Incentive Plan, no new grants will be made under our 2008 Equity Incentive Plan. Any shares that become available for reuse under the terms of the 2008 Equity Incentive Plan due to forfeiture, cancellation or otherwise will also be available for issuance under the 2014 Equity Incentive Plan. The 2014 Equity Incentive Plan does not include an "evergreen" feature that would cause the number of authorized shares to automatically increase in future years.



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Repricings Prohibited.  Repricing of options and SARs generally is prohibited without prior shareholder approval, with customary exceptions for stock purchase rights (the "Rights") granted thereunder.dividends or splits, reorganizations, recapitalizations and similar events.



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Discount Stock Options and SARs Prohibited.  All options and SARs must have an exercise price equal to or greater than the fair market value of our common stock on the date the option or SAR is granted.



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Conservative Change in Control Provisions.  The Tax Benefits2014 Equity Incentive Plan does not include a special change in control price payable to award holders. The change in control provisions under




the 2014 Equity Incentive Plan provide for acceleration of vesting in the event of a change in control only if the 2014 Equity Incentive Plan does not become an obligation of the successor entity or the participant incurs a termination of service without cause or for good reason following the change in control.

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Tax-Deductible Cash Incentive Awards.  The 2014 Equity Incentive Plan allows for payment of cash incentives, so that future awards may be made to certain officers that are eligible to be deducted under Code Section 162(m) for "performance-based compensation."



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Clawback Policy Implementation.  All awards under the 2014 Equity Incentive Plan will be rescinded if itsubject to any applicable law respecting recapture of compensation or Company clawback policy in effect from time to time.



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Independent Oversight.  The 2014 Equity Incentive Plan will be administered by a committee of independent board members.

        A summary of the material provisions of the 2014 Equity Incentive Plan is set forth below. A copy of the 2014 Equity Incentive Plan is set forth as Appendix A.

Purpose

        The 2014 Equity Incentive Plan was established by our board to promote the Company's long-term financial success, to attract, retain and reward persons who can contribute to the Company's success, and to further align the participants' interests with those of the Company's shareholders. The 2014 Equity Incentive Plan will be administered by a committee selected by the board, currently our Compensation Committee (the "Committee"), which will select award recipients from the eligible participants, determine the types of awards to be granted, the number of shares covered by the awards, and determine the applicable terms, conditions, performance criteria, restrictions and other provisions of such awards, including any vesting or accelerated vesting requirements or conditions applicable to an award or awards.

General

        The 2014 Equity Incentive Plan incorporates a broad variety of equity-based and cash-based incentive compensation elements to provide the Committee with significant flexibility to address the requirements and limitations of applicable legal, regulatory and financial accounting standards in a manner mutually consistent with the purposes of the 2014 Equity Incentive Plan and the best interests of the Company.

        The maximum number of shares of the Company's common stock that may be delivered to participants, or their beneficiaries, under the 2014 Equity Incentive Plan is 375,000, with adjustments for certain corporate transactions and for forfeited shares. As of the date of shareholder approval of the 2014 Equity Incentive Plan, no additional awards will be granted under the 2008 Equity Incentive Plan. To the extent that any shares covered by an award under the 2014 Equity Incentive Plan, or the 2008 Equity Incentive Plan, are forfeited or are not ratifieddelivered for any reason, including because the award is forfeited, cancelled or settled in cash, or shares are withheld to satisfy tax withholding requirements, the shares will not be deemed to have been delivered for purposes of determining the maximum number of shares available for delivery under the 2014 Equity Incentive Plan. For stock appreciation rights ("SARs") that are settled in stock, only the actual shares delivered will be counted for purposes of these limitations. If any option granted under the 2014 Equity Incentive Plan is exercised by tendering shares, only the number of shares issued net of the shares tendered will be counted for purposes of these limitations. If the withholding tax liabilities arising from an award under the 2014 Equity Incentive Plan are satisfied by the tendering of shares of Company common stock to the Company or by the withholding of shares by the Company, such shares will not be deemed to have




been delivered for purposes of determining the maximum number of shares available for delivery under the 2014 Equity Incentive Plan.

        The 2014 Equity Incentive Plan's effective date would be the date of its approval by the Company's stockholders atshareholders. If approved, the annual meeting.

Background and Reasons for2014 Equity Incentive Plan will continue in effect until terminated by the Proposalboard. However, no awards may be granted under the 2014 Equity Incentive Plan after the 10-year anniversary of its effective date. Any awards that are outstanding after the 10th anniversary of the effective date will remain subject to the terms of the 2014 Equity Incentive Plan.

        The purposefollowing additional limits apply to awards under the 2014 Equity Incentive Plan:

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The maximum number of shares that may be covered by options or SARs that are intended to be "performance-based compensation" under Section 162(m) of the Tax Benefits PlanInternal Revenue Code of 1986 (the "Code") that are granted to any one participant during any calendar year is 100,000 shares;



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The maximum number of shares that may be covered by options or SARs that are granted to protect the Company's abilityany one director during any calendar year is 50,000 shares;



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The maximum number of shares that may be covered by stock awards that are intended to utilize certain tax assets, including its net operating losses (collectively, the "Tax Benefits"),be "performance-based compensation" under Code Section 162(m) that are granted to offset future income. any one participant during any calendar year is 100,000 shares;



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The Company's usemaximum number of its Tax Benefits in the future couldshares that may be significantly limited if it experiences an "ownership" change for U.S. federal income tax purposes. In general, an "ownership change" will occur if therecovered by stock awards that are granted to any one director during any calendar year is a cumulative change in the Company's ownership by so called "5-percent shareholders" (as defined50,000 shares;



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The maximum amount of cash incentive awards or cash-settled stock awards that are intended to be "performance-based compensation" under U.S. income tax laws)Code Section 162(m) payable to any one participant with respect to any calendar year is $1,000,000; and



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The maximum amount of cash incentive awards or cash-settled stock awards that exceeds fifty percentage points over a rolling three-year period.

are payable to any one director with respect to any calendar year is $100,000.

        The Tax BenefitsCommittee may use shares available under the 2014 Equity Incentive Plan is designed to reduceas the likelihood thatform of payment for grants or rights earned or due under any compensation plans or arrangements of the Company will experience an unsolicited ownership change by (i) discouraging any person or group from becoming a "5-percent shareholder"subsidiary, including the plans and (ii) discouraging any existing "5-percent shareholder" from acquiring more than a specified numberarrangements of additional shares of Company stock. There is no guarantee, however, that the Tax Benefits Plan will prevent the Company from experiencing an ownership change. A corporation that experiences an ownership change will generally be subject to an annual limitation on certainor a subsidiary assumed in business combinations.

        In the event of its pre-ownership change tax assets equal toa corporate transaction involving the valuestock of the corporation immediately beforeCompany (such as a stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the ownership change, multiplied by the long-term, tax-exempt rate (subjectforegoing share limitations and all outstanding awards will automatically be adjusted proportionally and uniformly to certain adjustments), provided that the annual limitation would be increased each yearreflect such event to the extent that there isthe adjustment will not affect an unused limitationaward's status as "performance-based compensation" under Code Section 162(m). However, the Committee may adjust awards, or prevent the automatic adjustment of awards, to preserve the benefits or potential benefits of awards under the 2014 Equity Incentive Plan.

        Awards granted under the 2014 Equity Incentive Plan generally will not be transferable except as designated by the participant by will or by the laws of descent and distribution or pursuant to a domestic relations order. However, the Committee has the discretion to permit the transfer of awards under the 2014 Equity Incentive Plan to immediate family members of participants, trusts and other entities established for the primary benefit of such family members, as long as the transfers are made without value to the participant.




Eligibility

        Selected employees and directors of, and eligible service providers to, the Company and its subsidiaries are eligible to become participants in the 2014 Equity Incentive Plan, except that non-employees may not be granted incentive stock options. The Committee will determine the specific individuals who will be granted awards under the 2014 Equity Incentive Plan and the type and amount of any such awards.

Options

        The Committee may grant incentive stock options and nonqualified stock options to purchase stock at a prior year. The limitation arisingspecified exercise price. Each award must be pursuant to an award agreement setting forth the provisions of the individual award. Awards of options must expire no later than 10 years from an ownership change onthe date of grant (and no later than five years for incentive stock options granted to a person that beneficially owns 10% or more of the Company's ability to utilizecommon stock).

        The exercise price for any option may not be less than the Tax Benefits depends on thefair market value of the Company's common stock on the date the option is granted. In addition, the exercise price of an incentive stock option granted to a person that beneficially owns 10% or more of the Company's common stock at the time of grant may not be less than 110% of the ownership change. If the Company's Tax Benefits are subject to limitation because it experiences an ownership change, depending on thefair market value of the stock on the date the option is granted. The exercise price of an option may, however, be higher or lower than the fair market value for an option granted in replacement of an existing award held by an employee or director of, or service provider to, a third party that is acquired by the Company or one of its subsidiaries. The exercise price of an option may not be decreased after the date of grant nor may an option be surrendered to the Company as consideration for the grant of a replacement option with a lower exercise price, except as approved by the Company's shareholders, as adjusted for corporate transactions described above, or in the case of options granted in replacement of existing awards granted under a predecessor plan.

        Options awarded under the 2014 Equity Incentive Plan will be exercisable in accordance with the terms established by the Committee. Any incentive stock option granted under the 2014 Equity Incentive Plan that fails to continue to qualify as an incentive stock option will be deemed to be a nonqualified stock option and the Committee may unilaterally modify any incentive stock option to disqualify it as an incentive stock option. The full purchase price of each share of stock purchased upon the exercise of any option must be paid at the time of exercise of an option. As determined by the ownership change,Committee, the exercise price of an option may be paid in cash, in shares of the Company's tangible common equity might be reduced.

        After giving careful consideration to this issue, the Company's board of directors concluded that the Tax Benefits Plan was in the best interests of the Company and its stockholders and recommended that the Company's stockholders vote to ratify the Tax Benefits Plan.

        Because the Tax Benefits Plan only amends and restates the Original Plan, the Company has not and will not declare a new dividend in connection with the Tax Benefits Plan. The Tax Benefits Plan does, however, (i) extend the term of the Rights granted under the Original Plan to September 12, 2015, and (ii) change the Purchase Price (as defined in the Tax Benefits Plan) to $10.00 per Right, subject to adjustment.

Description of the Tax Benefits Plan

        The Rights are in all respects subject to and governed by the provisions of the Tax Benefits Plan. The description of the Tax Benefits Plan contained herein is qualified in its entirety by reference to the full text of the Tax Benefits Plan, a copy of which is attached to this proxy statement asAppendix A. Please read the Tax Benefits Plan in its entirety as the following discussion is only a summary.




        Unlike traditional stockholders rights plan such as the Original Plan, which are designed and put in place to deter unsolicited takeover bids, the Tax Benefits Plan is designed to protect the Company's Tax Benefits by deterring a change in control that would limit our ability to fully utilize our Tax Benefits. The Tax Benefits Plan does this by discouraging both present and prospective stockholders from acquiring a certain level of equity in the Company.

        The Rights.    In connection with the adoption of the Original Plan, the Company declared a dividend of one Right for each share of Company common stock outstanding(valued at fair market value as of the closeday of business on September 27, 2002 (the "Plan Record Date")exercise), with each Right representing the right to purchase one one-thousandth (subject to adjustment) of a share of Series A Junior Participating Preferred Stock, $1.00 par value per share (the "Preferred Stock"), upon the terms and subject to the conditions set forth in the Original Plan. The Company further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share of common stock that becomes outstanding between the Plan Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are defined herein) and, in certain circumstances governedby net exercise, by other property deemed acceptable by the Tax Benefits Plan, Rights may also be issued with respectboard or by irrevocably authorizing a third party to shares of common stock that shall become outstanding after the Distribution Date and prior to the Expiration Date.

        Exercisability.    The Rights will not be exercisable until the earlier to occur of (i) the tenth day after the first date of a public announcement (which shall include, without limitation, a report filed or amended pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person (as defined below) that an Acquiring Person has become such, or such earlier date as a majority of the board of directors shall become aware of the existence of an Acquiring Person or (ii) the tenth day after the date (or such later date as may be determined by action of the board of directors prior to such time as any person becomes an Acquiring Person) of the commencement by any person of (or, if earlier, of the first public announcement of the intention of such person) to commence) a tender or exchange offer the consummation of which would result in any person becoming an Acquiring Person. The date the Rights become exercisable is referred to in the Tax Benefits Plan as the "Distribution Date."

        Prior to the Distribution Date, the Rights will be evidenced by the certificates for (or current ownership statements issued with respect to uncertificated shares in lieu of certificates), and will be transferred with,sell shares of the Company's common stock and remit a sufficient portion of the registered holderproceeds to the Company to satisfy the exercise price (sometimes referred to as a "cashless exercise") or in any combination of the foregoing methods deemed acceptable by the Committee. In a net exercise, the person exercising the option does not pay any cash and the net number of shares received is equal in value to the number of shares as to which the option is being exercised, multiplied by a fraction, the numerator of which is the fair market value less the exercise price, and the denominator of which is fair market value.

Stock Appreciation Rights

        SARs entitle the participant to receive cash or stock equal in value to, or based on the value of, the amount by which the fair market value of a specified number of shares on the exercise date exceeds an exercise price established by the Committee. Except as described below, the exercise price for an SAR may not be less than the fair market value of the stock on the date the SAR is granted. However, the exercise price may be higher or lower than fair market value for an SAR granted in replacement of an existing award held by an employee, director or service provider of a third party that is acquired by the Company or one of its subsidiaries, or for SARs granted under a predecessor plan. SARs will be exercisable in accordance with the terms established by the Committee.




Stock Awards

        A stock award is a grant of shares of the Company's common stock will be deemedor a right to be the registered holder of the Rights. Prior to the Distribution Date, the Rights are not severable from the Company's common stock and have no independent voting or dividend rights associated with them. In addition, the Rights can only be transferred in connection with the transfer of the Company's common stock. After the Distribution Date, Old Second National Bank, as the rights agent, will mail separate certificates evidencing the Rights to each record holderreceive shares of the Company's common stock, an equivalent amount of cash or a combination thereof in the future. Awards may include stock units, bonus shares, performance shares, performance units, restricted stock or restricted stock units or any other equity-based award as determined by the Committee. Any specific performance measures, performance objectives or period of the close of business on the Distribution Date. Thereafter, the Rightsservice requirements may be transferred separately fromset by the Committee in its discretion.

Cash Incentive Awards

        A cash incentive award is the grant of a right to receive a payment of cash, determined on an individual basis or as an allocation of an incentive pool (or the Company's common stock.stock having a value equivalent to the cash otherwise payable) that is contingent on the achievement of performance objectives established by the Committee. The Rights will expire on September 12, 2015, unless earlier exchanged or redeemed,Committee may grant cash incentive awards (including the right to receive payment of cash or the dateCompany's common stock having the value equivalent to the cash otherwise payable) that the Company's boardmay be contingent on achievement of directors determines that the Company no longer has any Tax Benefits.

        After any person becomes an Acquiring Person (as defined below), each Right (other than the Rights treated as beneficially owned under certain U.S. tax rulesperformance objectives over a specified period established by the Acquiring Person) will generally entitleCommittee. The grant of cash incentive awards may also be subject to such other conditions, restrictions and contingencies, as determined by the holderCommittee.

Forfeiture

        Unless specifically provided to purchase for the Purchase Price a number of shares of the Preferred Stock having a market value of twice the Purchase Price.

        As usedcontrary in the Tax Benefits Plan, an "Acquiring Person" means,applicable award agreement, if a participant's service is terminated for cause, any outstanding award held by the participant will be forfeited immediately and the participant will have no further rights under the award.

        Further, except as otherwise provided by the Committee, if a participant breaches a non-competition, non-solicitation, non-disclosure, non-disparagement or other restrictive covenant in general, any person or group that has become a "5-percent shareholder" ofagreement between the Company, other than (i)participant and the Company or a subsidiary, whether during or after the participant's termination of service, the participant will forfeit or pay the following to the Company:

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All outstanding awards granted to the participant under the 2014 Equity Incentive Plan, including awards that have become vested or exercisable;



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Any shares held by the participant in connection with the 2014 Equity Incentive Plan that were acquired after the participant's termination of service and within the 12-month period immediately preceding the participant's termination of service;



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The profit realized by the participant from the exercise of any subsidiarystock options and SARs that the participant exercised after the participant's termination of service and within the 12-month period immediately preceding the participant's termination of service; and



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The profit realized by the participant from the sale or employee benefit planother disposition of any shares received by the participant in connection with the 2014 Equity Incentive Plan after the participant's termination of service and within the 12-month period immediately preceding the participant's termination of service, where such sale or compensation arrangementdisposition occurs in such similar time period.

One Million Dollar Limit

        Section 162(m) of the Internal Revenue Code.    A U.S. income tax deduction for the Company (ii)generally will be unavailable for annual compensation in excess of $1 million paid to a "covered employee" (our chief executive officer and three other most highly compensated executive officers other than the U.S. government, (iii) certain existing "5-percent shareholders" so long as each such stockholder doeschief financial officer). However, amounts that constitute "performance-based compensation" under Code Section 162(m) are not acquire more than a specified number of additional shares ofcounted toward the Company's stock; (iv) certain other$1 million limit. It is expected that, generally, options and SARs granted under the 2014 Equity Incentive Plan will satisfy the




requirements for "performance-based compensation."grandfathered persons" (as described in The Committee may designate whether any stock awards or cash incentive awards granted to any participant are intended to be "performance-based compensation." Any such awards designated as intended to be "performance-based compensation" will be conditioned on the Tax Benefits Plan), so longachievement of one or more performance measures, to the extent required by Code Section 162(m).

        Performance Measures.    The performance measures that may be used for awards designated as such "grandfathered persons" satisfy the applicable requirements in the Tax Benefits Plan; (v)intended to be "performance-based compensation" will be based on any person or group that the board of directors determines, in its sole discretion, has inadvertently become a "5-percent shareholder" (or inadvertently failed to continue to qualify as a "grandfathered person"), so long as such person or group promptly divests sufficient shares so as to no longer own 5% of the Company's stock; (vi) any person or group that has become a "5-percent shareholder" (or inadvertently fails to continue to qualify as a "grandfathered person"), so long as such person or group satisfies the applicable requirements set forth in the Tax Benefits Plan; (vii) any person or group that the board of directors determines, in its sole discretion has not jeopardized or endangered the Company's utilization of its Tax Benefits, so long as each such stockholder does not acquire any additional shares of the Company's stock and so long as our board of directors does not, in its sole discretion, make a contrary determination; and (viii) any person that acquires at least a majority of the Company's stock in connection with an offer satisfying various conditions set forth in the Tax Benefits Plan, including being a fully financed all-cash tender offer for any and all of the then outstanding shares of the Company at the same per-share consideration.

        Exchange and Redemption.    At any time after any person has become an Acquiring Person (but before any person becomes the beneficial owner of 50%one or more of the outstanding shares offollowing performance measures as selected by the Company's stock), the Company's board of directors may generally exchangeCommittee: earnings (including earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; and earnings per share; all or part of the then outstanding and exercisable Rights for Company common stock at an exchange ratio of one share of common stock per Right, as may be adjusted. Our board of directors may also redeem all of the Rights at a price of $0.01 per Right at any time before the Distribution Date. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the Rights holders' only right will be to receive the Redemption Price.

        Qualifying Offer.    If the Company receives a Qualifying Offer (as defined below) and the board of directors has not redeemed the outstanding Rights or exempted such offer from the Tax Benefits Plan or called a special meeting of stockholders by the endCommittee); financial return ratios (including return on investment; return on invested capital; return on equity; and return on assets; all as may be defined by the Committee); "Texas Ratio"; expense ratio; efficiency ratio; increase in revenue, operating or net cash flows; cash flow return on investment; total shareholder return; market share; net operating income, operating income or net income; debt load reduction; loan and lease losses; expense management; economic value added; stock price; book value; overhead; assets; asset quality level; charge offs; loan loss reserves; loans; deposits; nonperforming assets; growth of loans, deposits or assets; interest sensitivity gap levels; regulatory compliance; improvement of financial rating; achievement of balance sheet or income statement objectives; improvements in capital structure; profitability; profit margins; budget comparisons or strategic business objectives, consisting of one or more objectives based on meeting specific cost targets, business expansion goals and goals relating to acquisitions or divestitures. Performance measures may be based on the ninety business days following the commencement (or, if later, the first existence) of a Qualifying Offer, for the purpose of voting on whether or not to exempt such Qualifying Offer from the terms of the Tax Benefits Plan, holders of record (or their duly authorized proxy) of at least 10% of the common stock then outstanding may submit to the board of directors, not earlier than ninety business days nor later than 120 business days following the commencement (or, if later, the first existence) of such Qualifying Offer, a written demand directing the board of directors to submit to a vote of stockholders at a special meeting a resolution exempting such Qualifying Offer from the provisions of the Tax Benefits Plan. A special meeting demand must be delivered to the secretaryperformance of the Company at the principal executive officesas a whole or of any one or more subsidiaries, business units or financial reporting segments of the Company or a subsidiary, or any combination thereof, and must set forth, asmay be measured relative to a peer group, an index or a business plan. The terms of any award may provide that partial achievement of performance criteria may result in partial payment or vesting of the award. Additionally, in establishing the performance measures, the Committee may provide for the inclusion or exclusion of certain items.

Change In Control

        Unless otherwise provided in an award agreement, upon the occurrence of a change in control, all stock options and SARs under the 2014 Equity Incentive Plan then held by the participant will become fully exercisable immediately if, and all stock awards and cash incentive awards will become fully earned and vested immediately if, (i) the 2014 Equity Incentive Plan is not an obligation of the successor entity following a change in control or (ii) the 2014 Equity Incentive Plan is an obligation of the successor entity following a change in control and the participant incurs a termination of service without cause or for good reason following the change in control. Notwithstanding the immediately preceding sentence, if the vesting of an award is conditioned upon the achievement of performance measures, then such vesting will be subject to the stockholders of record makingfollowing: if, at the request, (i) the names and addresses of such stockholders as they appear on the Company's books and records, (ii) the class and number of common stock which are owned by each of such stockholders and (iii) in the case of common stock that is owned beneficially by another person, an executed certification by the holder of record that such holder has executed such special meeting demand only after obtaining instructions to do so from such beneficial owner and attaching evidence thereof. Subject to the requirements of applicable law, our board of directors may take a position in favor of or opposed to the adoptiontime of the Qualifying Offer or no position with respect thereto, as it determines to be appropriatechange in control, the exercise of its duties. Inperformance measures are less than 50% attained (pro rata based upon the event that no person has become an Acquiring Person prior to the redemption date for the Qualifying Offer, and the Qualifying Offer continues to be a Qualifying Offer and either (y) the special meeting of stockholders is not convened on or prior to the last daytime of the period for calling such meeting set forththrough the change in control), the Tax Benefits Plan or (z)award will become vested and exercisable on a fractional basis with the numerator being equal to the percentage of attainment and the denominator being 50%; and if, at the special meeting at which a quorum is present, a majoritytime of the holders of common stock present or represented by proxychange in control, the performance measures are at least 50% attained (pro rata based upon the special meeting and entitled to vote thereon astime of the record date forperiod through the special meeting shall votechange in favor ofcontrol), the Qualifying Offer, thenaward will become fully earned and vested immediately upon the Qualifying Offer shall be deemed exempt from the application of the Tax Benefits Plan so long as it remains a Qualifying Offer.change in control.




        For purposes of the Tax Benefits2014 Equity Incentive Plan, "Qualifying Offer" shall meana "change in control" generally will be deemed to occur when (i) any person acquires the beneficial ownership of 33% or more of the common stock of the Company, except that the acquisition of an offer determinedinterest by a benefit plan sponsored by the Company or a corporate restructuring in which another member of the Company's controlled group acquires such an interest generally will not be a change in control for purposes of the 2014 Equity Incentive Plan, (ii) during any 12-month period, a majority of the Company's independentboard members serving as of the 2014 Equity




Incentive Plan's effective date, or whose election was approved by a vote of a majority of the directors then in office, no longer serves as directors, (iii) the Company combines or merges with another company and, immediately after the combination, the shareholders of the Company immediately prior to have the following characteristics, among others: (i) fully financed all-cash tender offercombination hold, directly or indirectly, 67% or less of the voting stock of the resulting Company or (iv) the consummation of a complete liquidation or dissolution of, or an agreement for the disposition of all or substantially all of the outstandingassets of, the Company occurs.

        In the event an award under the 2014 Equity Incentive Plan constitutes "deferred compensation" for purposes of Code Section 409A, and the settlement or distribution of the award is triggered by a change in control, then such settlement or distribution will be subject to the event constituting the change in control also constituting a "change in control event" for purposes of Code Section 409A.

Amendment and Termination

        Our board may at any time amend or terminate the 2014 Equity Incentive Plan or any award granted under the 2014 Equity Incentive Plan, but any amendment or termination generally may not impair the rights of any participant without the participant's written consent. The board may not amend any provision of the 2014 Equity Incentive Plan to materially increase the original number of shares that may be issued under the 2014 Equity Incentive Plan (other than as provided in the 2014 Equity Incentive Plan), materially increase the benefits accruing to a participant or materially modify the requirements for participation in the 2014 Equity Incentive Plan without approval of the Company's common stock; (ii) commenced withinshareholders. However, the meaningboard may amend the 2014 Equity Incentive Plan at any time, retroactively or otherwise, to ensure that the 2014 Equity Incentive Plan complies with current or future law without shareholder approval, and the board may unilaterally amend the 2014 Equity Incentive Plan and any outstanding award, without participant consent, in order to avoid the application of, Rule 14d-2(a)or to comply with, Code Section 409A.

Clawback Policy

        All awards, amounts and benefits received under the 2014 Equity Incentive Plan will be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of any applicable Company clawback policy or any applicable law even if adopted after the Plan becomes effective.

U.S. Federal Income Tax Considerations

        The following is a summary of the Exchange Act and made bycurrent U.S. federal income tax consequences that may arise in conjunction with participation in the 2014 Equity Incentive Plan.

        Nonqualified Stock Options.    The grant of a nonqualified stock option generally will not result in taxable income to the participant. Except as described below, the participant generally will realize ordinary income at the time of exercise in an offeror that beneficially owns no more than 50%amount equal to the excess of the outstandingfair market value of the shares acquired over the exercise price for those shares and the Company generally will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of common stock;such shares generally will be treated as capital gains and (iii) irrevocable forlosses, with the basis in such shares equal to the fair market value of the shares at least 120 days and in writing.the time of exercise.

        Expiration.Incentive Stock Options.    The Rightsgrant of an incentive stock option generally will expire on September 12, 2015, unless earlier exchanged or redeemed (the "Expiration Date").not result in taxable income to the participant. The exercise of an incentive stock option generally will not result in taxable income to the participant,

        Antidilution Provisions.provided The Tax Benefits Plan includes antidilution provisions designed to maintainthat the effectivenessparticipant was, without a break in service, an employee of the Rights.

        Amendments.    At any timeCompany or a subsidiary during the period beginning on the date of the grant of the option and ending on the date three months prior to the Distribution Date, the Tax Benefits Plan may be amended, except with respectdate of exercise (one year prior to the Redemption Price. Afterdate of exercise if the Rightsparticipant is disabled, as that term is defined in the Code).




        The excess of the fair market value of the shares at the time of exercise of an incentive stock option over the exercise price generally will be an adjustment that is included in the calculation of the participant's alternative minimum taxable income for the tax year in which the incentive stock option is exercised. For purposes of determining the participant's alternative minimum tax liability for the year of disposition of the shares acquired pursuant to the incentive stock option exercise, the participant generally will have a basis in those shares equal to the fair market value of the shares at the time of exercise.

        If the participant does not sell or otherwise dispose of the shares within two years from the date of the grant of the incentive stock option or within one year after the transfer of such stock to the participant, then, upon disposition of such shares, any amount realized in excess of the exercise price generally will be taxed to the participant as capital gain. A capital loss generally will be recognized to the extent that the amount realized is less than the exercise price.

        If the foregoing holding period requirements are not met, the participant generally will realize ordinary income at the time of the disposition of the shares, in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price, and the Company generally will be entitled to a corresponding deduction. If the amount realized exceeds the value of the shares on the date of exercise, any additional amount generally will be capital gain. If the amount realized is less than the exercise price, the participant generally will recognize no longer redeemable,income, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares.

        Stock Appreciation Rights.    The grant of an SAR generally will not result in taxable income to the participant. Upon exercise of an SAR, the fair market value of shares received generally will be taxable to the participant as ordinary income and the Company will be entitled to a corresponding deduction. Gains and losses realized by the participant upon disposition of any such shares generally will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.

        Stock Awards.    A participant who has been granted a stock award generally will not realize taxable income at the time of grant,provided that the stock subject to the award is not delivered at the time of grant, or if the stock is delivered, it is subject to restrictions that constitute a "substantial risk of forfeiture" for U.S. income tax purposes. Upon the later of delivery or vesting of shares subject to an award, the holder generally will realize ordinary income in an amount equal to the then fair market value of those shares and the Company will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares generally will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of delivery or vesting. Dividends paid to the holder during the restriction period, if so provided, generally will also be compensation income to the participant and the Company will be entitled to a corresponding deduction.

        Cash Incentive Awards.    A participant who has been granted a cash incentive award generally will not realize taxable income at the time of grant,provided that no cash is actually paid at the time of grant. Upon the payment of any cash in satisfaction of the cash incentive award, the participant generally will realize ordinary income in an amount equal to the cash award received and the Company will be entitled to a corresponding deduction.

        Withholding of Taxes.    The Company may withhold amounts from participants to satisfy withholding tax requirements. If permitted by the Committee, participants may have shares withheld from awards or may tender previously owned shares to the Company to satisfy tax withholding




requirements. The shares withheld from awards may only be used to satisfy the Company's minimum statutory withholding obligation.

        Change in Control.    Any acceleration of the vesting or payment of awards under the 2014 Equity Incentive Plan in the event of a change in control in the Company may exceptcause part or all of the consideration involved to be treated as an "excess parachute payment" under the Code, which may subject the participant to a 20% excise tax and preclude deduction by the Company.

Tax Advice

        The preceding discussion is based on U.S. federal tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport to be a complete description of the U.S. federal income tax aspects of the 2014 Equity Incentive Plan. A participant may also be subject to state and local taxes in connection with respectthe grant of awards under the 2014 Equity Incentive Plan. The Company strongly encourages participants to consult with their individual tax advisors to determine the applicability of the tax rules to the Redemption Price, amendawards granted to them in their personal circumstances.

        The number and types of awards to be made pursuant to the Tax Benefits2014 Equity Incentive Plan in any manner that does not adversely affectis subject to the interests of holdersdiscretion of the Rights.Committee and is not determinable at this time.

        Under applicable law, the ratificationadoption of the Tax Benefits2014 Equity Incentive Plan requires the affirmative vote of the majority of the shares present in person or represented by proxy at the annual meeting and entitled to vote on this proposal. In tabulating the votes, broker non-votes on the adoption of the amendment will be disregarded and have no effect on the outcome of the vote. However, any other abstentions by shares present in person or represented by proxy at the annual meeting are effectively equivalent to votes against this proposal.

Board RecommendationRecommendation:

        The board of directors recommends stockholders vote to ratifyapprove the Tax Benefits2014 Equity Incentive Plan, as described in this proxy statement, by voting "FOR" this proposal. Proxies properly signed and returned will be voted "FOR" this proposal unless stockholders specify otherwise.





PROPOSAL 5:4:

RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS


General

        Our stockholders are also being asked to adopt a resolution to ratify the appointment of Plante & Moran, PLLC as our independent registered public accounting firm for the year ending December 31, 2013.2014. If the stockholders do not ratify the selection of Plante & Moran, PLLC at the annual meeting, the Audit Committee will consider selecting another firm of independent public accountants. Representatives from Plante & Moran, PLLC are expected to be present at the annual meeting and will have an opportunity to make a statement, if they so desire, as well as to respond to appropriate questions that may be asked by stockholders.

Board Recommendation

        The board of directors recommends that you vote your shares "FOR" the ratification of Plante & Moran, PLLC as our independent registered public accounting firm for the year ending December 31, 2013.2014.

Accountant Fees

        Audit Fees.    The aggregate fees and expenses paid to Plante & Moran PLLC in connection with the audit of our annual financial statements and the related securities filings were $421,929 for 2013 and $281,563 for 2012 and $342,077 for 2011.2012.

        Audit Related Fees.    Audit related fees paid to Plante & Moran PLLC were $62,500 for 2013 and $94,411 for 2012 and were $95,500 for 2011.2012.

        Tax Fees.    There were no amounts for tax related services billed by Plante & Moran, PLLC for 20122013 or 2011.2012.

        All Other Fees.    ThereAll other fees paid to Plante & Moran, PLLC were $23,500 for 2013, and there were no aggregate fees or pre-approved expenses billed by Plante & Moran, PLLC for all other services rendered to us during the years ended December 31, 2012 and 2011.for 2012.

        The Audit Committee is solely responsible for the pre-approval of all audit and non-audit services to be provided by the independent accountants and the committee exercises its authority to do so in accordance with a policy that it has adopted. All services provided by Plante & Moran, PLLC were approved pursuant to the pre-approval policy. The pre-approval policy is available on our website at www.oldsecond.com.





AUDIT COMMITTEE REPORT


        The Audit Committee assists the board in carrying out its oversight responsibilities for our financial reporting process, audit process and internal controls. The Audit Committee also reviews the audited financial statements and recommends to the board that they be included in our annual report on Form 10-K. The committee is comprised solely of directors who are independent under the rules of the Nasdaq Stock Market.

        The Audit Committee has reviewed and discussed our audited financial statements for the fiscal year ended December 31, 20122013 with our management and Plante & Moran, PLLC, the independent registered public accounting firm that audited our financial statements for that period. The committee has discussed with Plante & Moran, PLLC the matters required to be discussed by SAS 114 (The Auditor's Communication With Those Charged With Governance) and received and discussed the written disclosures and the letter from Plante & Moran, PLLC required by Public Company Accounting Oversight Board Rule 3526 (Communication with Audit Committees Concerning Independence). Based




on the review and discussions with management and Plante & Moran, PLLC, the committee has recommended to the board that the audited financial statements be included in our annual report on Form 10-K for the fiscal year ending December 31, 20122013 for filing with the Securities and Exchange Commission.

Respectfully,
Barry Finn, Chairman
Ed Bonifas
John Ladowicz
James Schmitz
Duane Suits





GENERAL


        We will bear the cost of this proxy solicitation. Solicitation will be made primarily through the use of the mail, but our officers, directors or employees may solicit proxies personally, or by telephone or telegraphthrough any other mode of communication without additional remuneration for such activity. In addition, we will reimburse brokerage houses and other custodians, nominees or fiduciaries for their reasonable expenses in forwarding proxy materials to the beneficial owner of such shares.

        As of the date of this proxy statement, we do not know of any other matters to be brought before the annual meeting. However, if any other matters should properly come before the meeting, it is the intention of the persons named in the enclosed proxy to vote thereon in accordance with their best judgment.

		By order of the board of directors
		William B. Skoglund Chairman and Chief Executive Officer

Aurora, Illinois
April 15, 201321, 2014

ALL STOCKHOLDERS ARE URGED TO SIGN
AND MAIL THEIR PROXIES PROMPTLY




OLD SECOND BANCORP, INC.

and

OLD SECOND NATIONAL BANK, as Rights Agent

AMENDED AND RESTATED RIGHTS AGREEMENT AND
TAX BENEFITS PRESERVATION PLAN

Dated as of September 12, 2012

---


AMENDED AND RESTATED RIGHTS AGREEMENT AND TAX BENEFITS
PRESERVATION PLANAppendix A


        This Amended and Restated Rights Agreement and Tax Benefits Preservation Plan, dated as of September 12, 2012 ("Agreement"), betweenOld Second Bancorp, Inc. OLD SECOND BANCORP, INC.

2014 EQUITY INCENTIVE PLAN

Article 1
INTRODUCTION
, a Delaware corporation (the "Company"), andOld Second National Bank, a national banking association headquartered in Aurora, Illinois, as Rights Agent (the "Rights Agent"). This Agreement is an amendment and restatement of that certain Rights Agreement, between the Company and the Rights Agent, dated as of September 17, 2002 (the "Rights Plan").

        WHEREAS, the Company and its Subsidiary have generated certain Tax Benefits (as defined herein) for United States federal income tax purposes and desire to avoid an "ownership change" within the meaning of Section 382 (as defined below). In furtherance of such objective, the Company desires to enter into this Agreement;

        WHEREAS, the Board authorized and declared a dividend of one preferred share purchase right (a "Right") for each share of Common Stock (as defined herein) of the Company outstanding as of the Close of Business (as defined below) on September 27, 2002 (the "Record Date"), each Right representing the right to purchase one one-thousandth (subject to adjustment) of a share of Preferred Stock (as defined herein), upon the terms and subject to the conditions set forth in the Rights Plan, and further authorized and directed the issuance of one Right (subject to adjustment as provided herein) with respect to each share of Common Stock that shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are defined herein and in the Rights Plan);provided, however, that, in accordance with Section 22 hereof, Rights may be issued with respect to shares of Common Stock that shall become outstanding after the Distribution Date and prior to the Expiration Date.

        WHEREAS, the Board authorized as of August 21, 2012, the amendment and restatement of the Rights Plan (the "Effective Date"), to among other things, preserve the Company's ability to utilize its Tax Benefits and to change the Purchase Price (as defined herein), all of which the Board believes are necessary and in the best interests of the Company and its stockholders.

        NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

        Section 1.1.1    Certain DefinitionsPurpose, Effective Date and Term..    The purpose of thisOLD SECOND BANCORP, INC. For purposes2014 EQUITY INCENTIVE PLAN is to promote the long-term financial success of this Agreement, the following terms have the meaning indicated:

        (a)   "5% Shareholder" shall mean (a)OLD SECOND BANCORP, INC. and its Subsidiaries by providing a Person or group of Persons that is a "5-percent shareholder"means to attract, retain and reward individuals who can and do contribute to such success, and to further align their interests with those of the Company pursuant to Treasury Regulation Section 1.382-2T(g) (other than any "public group" that results, pursuant to Treasury Regulation Section 1.382-2T(j)(2)(iii), from an Announced Exchange) or (b) a Person that is a "first tier entity" or "higher tier entity" (as such terms are defined in Treasury Regulation Section 1.382-2T(f))Shareholders. The "Effective Date" of the Company if that Person has a "public group" or individual, or a "higher tier entity" of that Person has a "public group" or individual, thatPlan is treated as a "5-percent shareholder"May 20, 2014, the date of the Company pursuant to Treasury Regulation Section 1.382-2T(g).

        (b)   "Acquire" or "own" shall mean to obtain (or have, respectively) ownership for purposes of Section 382approval of the Code without regard toPlan by the constructive ownership rules describedShareholders. The Plan shall remain in Treasury Regulation Section 1.382-2T(h)(2), (h)(3) and (k) (and "Acquisition" shall have a correlative meaning).

        (c)   "Acquiring Person" shall mean any Person who or which is or becomes a 5% Shareholder (other than by reason of Treasury Regulation Section 1.382-2T(j)(3)(i) or solelyeffect as a result of a transaction in which no "5-percent shareholder" (as defined in Section 382 of the Code and




Treasury Regulations thereunder) experiences an increase in its Percentage Stock Ownership interest of the Company), whether or not such Person continues to be a 5% Shareholder, but shall not include:

          (i)  an Exempt Person;

         (ii)  any Grandfathered Person;

        (iii)  the U.S. Government;

        (iv)  any Person who or which the Board determines, in its sole discretion, has inadvertently become a 5% Shareholder (or has either inadvertently failed to continue to qualify as a Grandfathered Person or inadvertently failed to be excluded from the definition of an "Acquiring Person" pursuant to clause (vii) below), so long as such Person promptly enters into, and delivers to the Company, an irrevocable commitment promptly to divest and thereafter promptly divests (without exercising or retaining any power, including voting, with respect to such securities), sufficient Common Stock so that such Person's Percentage Stock Ownership is less than 5% (or, in the case of any Person who or which has inadvertently failed to continue to qualify as a Grandfathered Person or inadvertently failed to be excluded from the definition of an "Acquiring Person" pursuant to clause (vii) below, the Common Stock that caused such Person to so fail to qualify as a Grandfathered Person or fail to be excluded from the definition of an "Acquiring Person" pursuant to clause (vii) below;

         (v)  any Person that has become a 5% Shareholder if the Board in good faith determines that such Person's attainment of 5% Shareholder status has not jeopardized or endangered the Company's utilization of the Tax Benefits;Awards are outstanding;provided, however, that such Person does not increase its Percentage Stock Ownership over such Person's lowest Percentage Stock Ownership immediately following such determination byno Awards may be granted after the Board, other than any increase pursuant10-year anniversary of the Effective Date.

Section 1.2Participation.    Each employee and director of, and service provider (with respect to or as a resultwhich issuances of (a) a stock dividend, stock split, reverse stock split or similar transaction effected bysecurities may be registered under Form S-8) to, the Company or (b) any redemptionand each Subsidiary who is granted, and currently holds, an Award in accordance with the provisions of Common Stock by the Company;provided, further, that such PersonPlan shall be an "Acquiring Person" ifa "Participant" in the Board makes a contrary determination in good faith;

        (vi)  any Person if, on the date that would have been (absent this clause (vi)Plan. Award recipients shall be limited to employees and directors of, the definition of "Acquiring Person") a Stock Acquisition Date withand service providers (with respect to such Person, such Person does not beneficially own any Common Stock;

       (vii)  any Person who or which has become a 5% Shareholder (or failedissuances of securities may be registered under Form S-8) to, continue to qualify as a Grandfathered Person) solely as a result of an in-kind distribution of Common Stock (whether or not in redemption of a Fund Vehicle interest) to such Person (or an Affiliate) from a Fund Vehicle (or the receipt of cash in lieu of such in-kind distribution);Company and its Subsidiaries;provided, however, that either (a)(i)an Award (other than an Award of an ISO) may be granted to an individual prior to the Person (or Affiliate) is not anddate on which he or she first performs services as an employee, director or service provider,provided that such Award does not control the general partner or investment manager of the Fund Vehicle and is not otherwise principally responsible for the investment decisions of the Fund Vehicle and (ii) the Person (or Affiliate) was not otherwise able, using commercially reasonable efforts, to prevent the Fund Vehicle from distributing Common Stock to such Person (or Affiliate), including by electing wherever possible to not have its interest in such Fund Vehicle redeemed, (b) the Person (or Affiliate) is not and does not control the general partner or investment manager of the Fund Vehicle and is not otherwise principally responsible for the investment decisions of the Fund Vehicle and the Person (or Affiliate) receives only cash in lieu of an in-kind distribution of Common Stock from a Fund Vehicle, or (c) the Person (or Affiliate) is or controls the general partner or investment manager of the Fund Vehicle or is otherwise principally responsible for the investment decisions of the Fund Vehicle and (i) the Fund Vehicle does not offer its investors the right to elect cash in lieu of an in-kind distribution of Common Stock and (ii) only cash in




lieu of an in-kind distribution of Common Stock is madebecome vested prior to the Person (or Affiliate) (a distribution describeddate such individual commences such services.

Section 1.3Definitions.    Capitalized terms in (a), (b) or (c), an "In-Kind Distribution"); and

      (viii)  any Person that beneficially owns at least a majority of the Common Stock following consummation of a Qualifying Offer.

        (d)   "Affiliate"Plan shall mean with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such Person pursuant to Section 382 and the applicable Treasury Regulation orbe defined as otherwise defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date hereof.

        (e)   "Associate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date hereof.

        (f)    "Agreement" shall have the meaning set forth in the preamble hereto.Plan (including the definition provisions ofArticle 8).


Article 2
AWARDS


        (g)   A PersonSection 2.1General.    Any Award may be granted singularly, in combination with another Award (or Awards), or in tandem whereby the exercise or vesting of one Award held by a Participant cancels another Award held by the Participant. Each Award shall be deemedsubject to the "Beneficial Owner"provisions of the Plan and such additional provisions as the Committee may provide with respect to such Award and as may be evidenced in the Award Agreement. Subject to the provisions ofSection 3.4(b), an Award may be granted as an alternative to or replacement of an existing award under the Plan, any other plan of the Company or a Subsidiary or as the form of payment for grants or rights earned or due under any other compensation plan or arrangement of the Company or a Subsidiary, including the plan of any entity acquired by the Company or a Subsidiary. The types of Awards that may be granted include the following:

(a)    Stock Options.    A stock option represents the right to purchase Shares at an exercise price established by the Committee. Any stock option may be either an ISO or a nonqualified stock option that is not intended to be an ISO. No ISOs may be (i) granted after the 10-year anniversary of the Effective Date or (ii) granted to a non-employee. To the extent the aggregate Fair Market Value (determined at the time of grant) of Shares with respect to which ISOs are exercisable for the first time by any Participant during any calendar year under all plans of the Company and its Subsidiaries exceeds $100,000, the stock options or portions thereof that exceed such limit shall be treated as nonqualified stock options. Unless otherwise specifically provided by the Award Agreement, any stock option granted under the Plan shall be a nonqualified stock option. All or a portion of any ISO granted under the Plan that does not qualify as an ISO for any reason shall be deemed to have "Beneficial Ownership"be a nonqualified stock option. In addition, any ISO granted under the




Plan may be unilaterally modified by the Committee to disqualify such stock option from ISO treatment such that it shall become a nonqualified stock option.

(b)    Stock Appreciation Rights.    A stock appreciation right (an "SAR") is a right to receive, in cash, Shares or a combination of andboth (as shall be deemedreflected in the respective Award Agreement), an amount equal to "beneficially own" any securities (a) which such Person directly owns or (ii) which such Person would be deemed to constructively own pursuant to Section 382based upon the excess of (i) the Fair Market Value at the time of exercise of the Code andSAR over (ii) an exercise price established by the Treasury Regulations promulgated thereunder.Committee.

        (h)   "Board" shall mean the board(c)    Stock Awards.    A stock award is a grant of directors of the Company.

        (i)    "Business Day" shall mean any day other than a Saturday, a SundayShares or a day on which banking institutionsright to receive Shares (or their cash equivalent or a combination of both, as shall be reflected in the Staterespective Award Agreement) in the future, excluding Awards designated as stock options, SARs or cash incentive awards by the Committee. Such Awards may include bonus shares, performance shares, performance units, restricted stock, restricted stock units or any other equity-based Award as determined by the Committee.

(d)    Cash Incentive Awards.    A cash incentive award is the grant of Illinoisa right to receive a payment of cash (or Stock having a value equivalent to the cash otherwise payable, excluding Awards designated as stock options, SARs or stock awards by the cityCommittee, all as shall be reflected in which the principal officerespective Award Agreement), determined on an individual basis or as an allocation of an incentive pool that is contingent on the Rights Agent is located are authorizedachievement of performance objectives established by the Committee.

Section 2.2Exercise of Stock Options and SARs.    A stock option or obligatedSAR shall be exercisable in accordance with such provisions as may be established by law or executive order to close.

        (j)    "Close of Business" on any given date shall mean 5:00 P.M., Aurora, Illinois, time, on such date;the Committee;provided,however, that if sucha stock option or SAR shall expire no later than 10 years after its grant date is not a Business Day it shall mean 5:00 P.M., Aurora, Illinois time, on the next succeeding Business Day.

        (k)   "Code" shall mean the Internal Revenue Code of 1986, as amended form time to time, or any successor statute.

        (l)    "Common Stock" when used with reference to the Company shall mean the Common Stock, presently par value $1.00 per share, of the Company. "Common Stock" when used with reference to any Person other than the Company shall mean the common stock (or,(five years in the case of an unincorporated entity,ISO with respect to a 10% Shareholder). The exercise price of each stock option and SAR shall be not less than 100% of the equivalent equity interest) withFair Market Value on the greatest voting powergrant date (or, if greater, the par value of such other Person or, if such other Person is a SubsidiaryShare);provided,however, that the exercise price of another Person,an ISO shall be not less than 110% of Fair Market Value on the Person or Persons which ultimately control such first-mentioned Person.

        (m)  "Common Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii) hereof.

        (n)   "Company" shall have the meaning set forthgrant date in the preamble hereto.

        (o)   "Current Value"case of a 10% Shareholder; andprovided,further, that, to the extent permitted under Code Section 409A, and subject toSection 3.4(b), the exercise price may be higher or lower in the case of stock options and SARs granted in replacement of existing awards held by an employee, director or service provider granted by an acquired entity. The payment of the exercise price of a stock option shall havebe by cash or, subject to limitations imposed by applicable law, by any of the meaning set forth in Section 11(a)(iii) hereof.

        (p)   "Definitive Acquisition Agreement" shall mean any agreement entered intofollowing means unless otherwise determined by the Committee from time to time: (a) by tendering, either actually or by attestation, Shares acceptable to the Committee and valued at Fair Market Value as of the day of exercise; (b) by irrevocably authorizing a third party, acceptable to the Committee, to sell Shares acquired upon exercise of the stock option and to remit to the Company no later than the third business day following exercise of a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise; (c) by payment through a net exercise such that, without the payment of any funds, the Participant may exercise the option and receive the net number of Shares equal in value to (i) the number of Shares as to which the option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value (on the date of exercise) less the exercise price, and the denominator of which is such Fair Market Value (the number of net Shares to be received shall be rounded down to the nearest whole number of Shares); (d) by personal, certified or cashiers' check; (e) by other property deemed acceptable by the Committee or (f) by any combination thereof.

Section 2.3Performance-Based Compensation.    Any Award that is intended to be Performance-Based Compensation shall be conditioned on the approvalachievement of one or more objective performance measures, to the holdersextent required by Code Section 162(m), as may be determined by the Committee. The grant of not less than a majorityany Award and the establishment of performance measures that are intended to be Performance-Based Compensation shall occur during the outstanding Common Stock of the Company at a special meeting called for such purpose with respect to (i) a merger, consolidation, recapitalization, reorganization, share exchange, business combination or similar transaction involving the Company, or (ii) the acquisition in any manner, directly or indirectly, of more than 50% of the consolidated total assets (including, without limitation, equity securities of its subsidiaries) of the Company.

        (q)   "Distribution Date" shall have the meaning set forth inperiod required under Code Section 3 hereof.162(m).

        (r)   "Effective Date" shall have the meaning set forth in the recitals hereto.




        (s)   "Equivalent Preferred Shares" shall have(a)    Performance Measures.    The performance measures described in thisSection 2.3 may be based on any one or more of the meaning set forthfollowing: earnings (e.g., earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; and earnings per share; each as may be defined by the Committee); financial return ratios (e.g., return on investment; return on invested capital; return on equity; and return on assets; each as may be defined by the Committee); "Texas ratio"; expense ratio; efficiency ratio; increase in Section 11(b) hereof.

        (t)    "Exchange Act" shall meanrevenue, operating or net cash flows; cash flow return on investment; total shareholder return; market share; net operating income, operating income or net income; debt load reduction; loan and lease losses; expense management; economic value added; stock price; book value; overhead; assets; asset quality level; charge offs; loan loss reserves; loans; deposits; nonperforming assets; growth of loans, deposits, or assets; interest sensitivity gap levels; regulatory compliance; improvement of financial rating; achievement of balance sheet or income statement objectives; improvements in capital structure; profitability; profit margins; budget comparisons or strategic business objectives, consisting of one or more objectives based on meeting specific cost targets, business expansion goals and goals relating to acquisitions or divestitures. Performance measures may be based on the Securities Exchange Act of 1934, as amended.

        (u)   "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.

        (v)   "Exemption Date" shall have the meaning set forth in Section 23(b) hereof.

        (w)  "Exempt Person" shall mean the Company or any Subsidiary (as such term is defined herein)performance of the Company in each case including, without limitation, in its fiduciary capacity,as a whole or of any employee benefit planone or more Subsidiaries, business units or financial reporting segments of the Company or a Subsidiary, or any combination thereof, and may be measured relative to a peer group, an index or a business plan.

(b)    Partial Achievement.    An Award may provide that partial achievement of the performance measures may result in payment or vesting based upon the degree of achievement. In addition, partial achievement of performance measures shall apply toward a Participant's individual limitations as set forth inSection 3.3.

(c)    Extraordinary Items.    In establishing any Subsidiaryperformance measures, the Committee may provide for the exclusion of the effects of the following items, to the extent identified in the audited financial statements of the Company, including footnotes, or any entity or trustee holding Common Stock for or pursuant toin the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employeesManagement's Discussion and Analysis section of the CompanyCompany's annual report: (i) extraordinary, unusual or nonrecurring items of any Subsidiary ofgain or loss, including non-cash refinancing charges; (ii) gains or losses on the Company.

        (x)   "Expiration Date" shall have the meaning set forth in Section 7 hereof.

        (y)   "Final Expiration Date" shall have the meaning set forth in Section 7 hereof.

        (z)   "Flip-In Event" shall have the meaning set forth in Section 11(a)(ii) hereof.

        (aa) "Fund Vehicle" shall mean any entity or arrangement that is, or that is operated as or as partdisposition of a private equity fund, hedge fundbusiness; (iii) changes in tax or accounting principles, regulations or laws; (iv) mergers or acquisitions; and (v) such other pooled investment vehicle or similar arrangement. Foritems permitted from time to time hereafter under the avoidance of doubt, (a) a given Fund Vehicle may be operated alone or together with one or more related Fund Vehicles that were organized pursuant toregulations promulgated under Code Section 162(m). To the same marketing process, that are managed by the same general partner or investment managers (or an Affiliate thereof), that have substantially the same investment objectives and that generally co-invest or invest lockstep together in investment opportunities; and (b) where an investor holds an interest in a master fund through an entity or arrangement formed by a sponsor of a master fund (which sponsor is unaffiliated withextent not specifically excluded, such investor) solely to be a feeder vehicle for one or more investors to invest in that master fund, (i) the underlying master fundeffects shall be treated asincluded in any applicable performance measure.

(d)    Adjustments.    Pursuant to thisSection 2.3, in certain circumstances the Fund Vehicle for purposes of this definition and (ii) a distribution of Common Stock from the master fund to a feeder vehicle described in clause (b) that then results in a distribution by that feeder vehicle to the investors will be treated in the same manner under this Agreement as though that distribution by the feeder vehicle had been distributed by the master fund to the investor.

        (bb) "Grandfathered Person" shall mean:

          (i)  Any Person who would otherwise qualify as an Acquiring Person as of the date of this Agreement, unless and until such Person's Percentage Stock Ownership shall be increased by more than one percentage point over such Person's lowest Percentage Stock Ownership on or after the date of this Agreement, other than any increase pursuant to or as a result of (a) the exercise of any option, warrant or convertible instrument to purchase Common Stock that such Person held as of the date of this Agreement, (b) a stock dividend, stock split, reverse stock split or similar transaction effected by the Company or (c) any redemption of Common Stock by the Company; and

         (ii)  Any Person who would otherwise qualify as an Acquiring Person as a result of a redemption of Common Stock by the Company, unless and until such Person's Percentage Stock Ownership shall be increased by more than one percentage point over such Person's lowest Percentage Stock Ownership on or after the date of such redemption, other than any increase pursuant to or as a result of (a) a stock dividend, stock split, reverse stock split or similar transaction effected by the Company or (b) any subsequent redemption of Common Stock by the Company.

        (cc) "Nasdaq" shall mean The Nasdaq Stock Market.

        (dd) "New York Stock Exchange" shall mean the New York Stock Exchange, Inc.




        (ee) "Percentage Stock Ownership" shall mean the percentage stock ownership of the Company, as determined in accordance with Treasury Regulation Section 1.382-2(a), 1.382-2T(g), (h), (j) and (k);Committee may adjust performance measures;provided, however, that no adjustment may be made with respect to an Award that is intended to be Performance-Based Compensation, except to the extent the Committee exercises such negative discretion as is permitted under Code Section 162(m). If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or a Subsidiary conducts its business or other events or circumstances render current performance measures to be unsuitable, the Committee may modify such performance measures, in whole or in part, as the Committee deems appropriate. If a Participant is promoted, demoted or transferred to a different business unit during a performance period, the Committee may determine that the selected performance measures or applicable performance period are no longer appropriate, in which case, the Committee, in its sole discretion, may (i) adjust, change or eliminate the performance measures or change the applicable performance period or (ii) cause to be made a cash payment to the Participant in an amount determined by the Committee.

Section 2.4Dividends and Dividend Equivalents.    Any Award may provide the Participant with the right to receive dividend payments or dividend equivalent payments with respect to Shares subject to the Award, which payments may be made currently or credited to an account for the sole purposeParticipant, may be settled in cash or Shares and may be subject to terms or provisions similar to the underlying Award.




Section 2.5Forfeiture of determiningAwards.    Unless specifically provided to the percentage stock ownershipcontrary in an Award Agreement, upon notification of Termination of Service for Cause, any outstanding Award held by a Participant, whether vested or unvested, shall terminate immediately, such Award shall be forfeited and the Participant shall have no further rights thereunder.

Section 2.6Deferred Compensation.    The Plan is, and all Awards are, intended to be exempt from (or, in the alternative, to comply with) Code Section 409A, and each shall be construed, interpreted and administered accordingly. The Company does not guarantee that any benefits that may be provided under the Plan will satisfy all applicable provisions of Code Section 409A. If any Award would be considered "deferred compensation" under Code Section 409A, the Committee reserves the absolute right (including the right to delegate such right) to unilaterally amend the Plan or the applicable Award Agreement, without the consent of the Participant, to avoid the application of, or to maintain compliance with, Code Section 409A. Any amendment by the Committee to the Plan or an Award Agreement pursuant to thisSection 2.6 shall maintain, to the extent practicable, the original intent of the applicable provision without violating Code Section 409A. A Participant's acceptance of any entity (and not forAward shall be deemed to constitute the purposeParticipant's acknowledgment of, determiningand consent to, the percentage stock ownershiprights of any other Person)the Committee under thisSection 2.6, Common Stock heldwithout further consideration or action. Any discretionary authority retained by such entitythe Committee pursuant to the terms of the Plan or pursuant to an Award Agreement shall not be treated as no longer owned byapplicable to an Award that is determined to constitute deferred compensation, if such entity pursuant to Treasury Regulationdiscretionary authority would contravene Code Section 1.382-2T(h)(2)(i)(A).409A.


Article 3
SHARES SUBJECT TO PLAN


        (ff)  "Person" shall mean any individual, firm, corporation, partnership, trust association, limited liability company, limited liability partnership, governmental entity, or other entity, or any group of Persons making a "coordinated acquisition" of shares or otherwise treated as an entity within the meaning of Treasury Regulation Section 1.382-3(a)(1)(i) and shall include any successor (by merger or otherwise) to such entity.

        (gg) "Preferred Stock" shall mean the Series A Junior Participating Preferred Stock, $1.00 par value per share, of the Company having the rights and preferences set forth in the Form of Certificate of Designation attached to the Rights Plan as Exhibit A.

        (hh) "Principal Party" shall have the meaning set forth in Section 13(b) hereof.

        (ii)   "Purchase Price" shall have the meaning set forth in Section 7(b) hereof.

        (jj)   "Qualifying Offer" shall mean an offer determined by a majority of the Company's independent directors to have, to the extent required for the type of offer specified, each of the following characteristics:

          (i)  a fully financed all-cash tender offer for any and all of the then outstanding shares of Common Stock at the same per-share consideration;

         (ii)  an offer that has commenced within the meaning of Rule 14d-2(a) of the Exchange Act and is made by an offeror (including Affiliates and Associates thereof) that beneficially owns no more than 5% of the outstanding shares of Common Stock as of the date of such commencement;

        (iii)  an offer that is subject only to the minimum tender conditions described below in item (vi) of this definition and other customary terms and conditions, which conditions shall not include any financing, funding or similar conditions or any requirements with respect to the offeror or its agents being permitted any due diligence with respect to the books, records, management, accountants or any other outside advisor of the Company;

        (iv)  an offer pursuant to which the Company and its stockholders have received an irrevocable written commitment of the offeror that the offer will remain open for not less than 120 Business Days and, if a Special Meeting Demand is duly delivered to the Board in accordance with Section 23(b), for at least 10 Business Days after the date of the Special Meeting or, if no Special Meeting is held within the Special Meeting Period, for at least 10 Business Days following the last day of such Special Meeting Period (the "Qualifying Offer Period");

         (v)  an offer pursuant to which the Company has received an irrevocable written commitment by the offer that, in addition to the minimum time periods specified in item (iv) of this definition, the offeror, if it is otherwise to expire prior thereto, will be extended for at least 15 Business Days after (i) any increase in the price offered or (ii) any bona fide alternative offer is commenced by another Person within the meaning of Rule 14d-2(a) of the Exchange Act;3.1provided, however, that such offer need not remain open as a result of clauses (iv) and (v) of this definition beyond (x) the time which any other offer satisfying the criteria for a Qualifying Offer is then required to be kept open under such clauses (iv) and (v), (y) the expiration date, as such date may be extended by public announcement (withAvailable Shares.