**Exhibit 10.12**

 

June 28,2005

 

Larry M. Narum

433 Harbor Drive

Carpentersville, Illinois 60110

 

Dear Mr. Narum:

 

In connection with the anticipated merger (the “Merger”) of EFC Bancorp, Inc.(the “Company”) with and into MAF Bancorp, Inc. (the “Purchaser”) ascontemplated by the Agreement and Plan of Reorganization by and between thePurchaser and the Company (the “Merger Agreement”), the Company, EFS Bank (the “CompanyBank”) and you hereby enter into this agreement (this “Agreement”).  Capitalized terms used but not otherwisedefined in this Agreement shall have the meaning set forth in the MergerAgreement.

 

# 1.                                     *Options*.  Prior to December 31,2005, you may exercise any and all vested options for the purchase of Companycommon stock (the “Options”) that you hold as of the date hereof, such that allincome from such exercise shall be included in your gross income for 2005.  For the avoidance of doubt, andnotwithstanding anything herein to the contrary, any income that you derivefrom the exercises of the Options (and sale of the underlying shares) as setforth in the preceding sentence shall not be taken into account in computingany benefits under any plan, program or arrangement of Mid America Bank (the “PurchaserBank”), the Purchaser, the Company Bank, the Company or their affiliates.

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# 2.                                     *2005 Directors RetirementAgreement Payment*.  Prior to December 23, 2005, the CompanyBank shall pay to you an amount equal to the amount set forth on Exhibit Aas the “2005 Directors Retirement Agreement Payment.”  For the avoidance of doubt, andnotwithstanding anything herein to the contrary, the 2005 Directors RetirementAgreement Payment shall not be taken into account in computing any benefitsunder any plan, program or arrangement of the Purchaser Bank, the Purchaser,the Company Bank, the Company or their affiliates.

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# 3.                                     *Representation of Rights. *You hereby represent and warrant that, but for your rights in respect ofoutstanding stock options and restricted stock in respect of Company commonstock under the Company’s stock compensation plans, you are not entitled to oreligible for any other payments or benefits under any plans, agreements orarrangements of or with the Company or the Company Bank and hereby waive anyrights with respect thereto, including the Company Bank Directors RetirementAgreement.

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# 4.                                     *Withholding and Reduction.*  TheCompany or Company Bank will withhold and deposit all federal, state and localincome and employment taxes that are owed, if any, with

 

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# respect toall amounts paid or benefits provided to or for you by the Company or anyaffiliate pursuant to this Agreement. You, the Company and the Company Bank agree that none of the paymentsand benefits payable or provided to you or for your benefit under thisAgreement or otherwise in connection with the Merger are expected to constitutean “excess parachute payment” within the meaning of Section 280G of theCode.  However, notwithstanding anythingto the contrary contained in this Agreement, in no event shall the aggregatepayments or benefits to be made or afforded to you under this Agreement orotherwise (the “Payments”) constitute an “excess parachute payment” under Section 280Gof the Code and in order to avoid such a result the Payments will be reduced,if necessary, to an amount such that when aggregated with all other payments,benefits or distributions in the nature of compensation to or for your benefit,whether paid, payable or provided pursuant to this Agreement or otherwise (the “AggregatePayments”), the value of such Aggregate Payments shall be equal to three (3) timesyour “base amount,” as determined in accordance with Section 280G of theCode, less $5,000.00.  You hereby agreeto report any amounts paid or benefits provided under this Agreement forpurposes of Federal, state and local income, employment and excise taxes in amanner consistent with the manner in which the Company or Company Bank reportsany such amounts or benefits for purposes of Federal, state and local income,employment and excise taxes.

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# 5.                                     *Successors*.  ThisAgreement is personal to you and without the prior written consent of theCompany shall not be assignable by you otherwise than by will or the laws ofdescent and distribution.  This Agreementshall inure to the benefit of and be enforceable by your legalrepresentatives.  This Agreement shallinure to the benefit of and be binding upon the Company, the Company Bank andtheir successors and assigns.  From andafter the Effective Date, the “Company” shall mean the “Purchaser,” and “CompanyBank” shall mean “Purchaser Bank,” except to the extent the context indicatesotherwise.

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# 6.                                     *Waiver*.  Failureof the Company to demand strict compliance with any of the terms, covenants orconditions of this Agreement shall not be deemed a waiver of such term,covenant or condition, nor shall any waiver or relinquishment of any such term,covenant or condition on any occasion or multiple occasions be deemed a waiveror relinquishment of such term, covenant or condition.

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# 7.                                     *Governing Law and Jurisdiction*. The Agreement is governed by and construed underthe laws of the State of Illinois, without regard to conflict of lawsrules.  You, the Company and the CompanyBank (a) hereby consent to submit to the exclusive personal jurisdictionof any Federal court located in the State of Illinois or any court of the Stateof Illinois in the event any dispute arises out of this Agreement or any of thetransactions contemplated by this Agreement, and (b) hereby waive anyright to challenge jurisdiction or venue in such courts with regard to anysuit, action, or proceeding under or in connection with the Agreement.  Each party to this Agreement also herebywaives any right to trial by jury in connection with any suit, action, orproceeding under or in connection with this Agreement.

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# 8.                                     *Entire and Final Agreement*.  ThisAgreement shall supersede any and all prior oral or written representations,understandings and agreements of the parties with respect to their

 

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# employmentrelationship (including, but not limited to all correspondence, memoranda andterm sheets and the Prior Agreements), and it contains the entire agreement ofthe parties with respect to those matters. No agreements or representations, oral or otherwise, express or implied,with respect to the subject matter hereof have been made by either party whichare not set forth expressly in this Agreement. Once signed by the parties hereto, no provision of this Agreement may bemodified or amended unless agreed to in writing, signed by you and a dulyauthorized officer of the Company and the Company Bank and subject to the priorwritten consent of the Purchaser.

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# 9.                                     *Assignment*.  Neitherthis Agreement nor any of the rights, obligations or interests arisinghereunder may be assigned by you. Neither this Agreement nor any of the rights, obligations or interestsarising hereunder may be assigned by the Company or the Company Bank withoutyour prior written consent, to a person or entity other than an affiliate orparent entity of the Company or the Company Bank or its successors or assigns; *provided*, *however*,that, in the event of the merger, consolidation, transfer, or sale of all orsubstantially all of the assets of the Company or the Company Bank with or toany other individual or entity, this Agreement shall, subject to the provisionshereof, be binding upon and inure to the benefit of such successor and suchsuccessor shall discharge and perform all the promises, covenants, duties, andobligations of the Company and the Company Bank hereunder.

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# 10.                               *Section Headings*.  The section headingscontained in this Agreement are inserted for purposes of convenience only andshall not affect the meaning or interpretation of this Agreement.

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# 11.                               *Notices*.  Allnotices required by this Agreement shall be sent in writing and delivered byone party to the other by overnight express mail to the following persons andaddresses:

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| If to the Company and Company Bank: | 1695 Larkin Avenue    |
|-------------------------------------|-----------------------|
|                                | Elgin, Illinois 60123 |

 

If to you:                                               At themost recent address on file at the Company.

 

# 12.                               *Execution in Counterparts*.  ThisAgreement may be executed by the parties hereto in counterparts, and each ofwhich shall be considered an original for all purposes.

 

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If the foregoing is satisfactory, please so indicateby signing and returning to the Company and the enclosed copy of this letterwhereupon this will constitute our agreement on the subject.

 
|                     | COMPANY                   |
|--------------------------|---------------------------|
|                     |                      |
|                     |                      |
|                     | By:                       | /s/ Barrett  J. O’Connor |   |
|                     | Date: June 28,  2005 |
|                     |                      |
|                     |                      |
|                     | COMPANY BANK              |
|                     |                      |
|                     |                      |
|                     | By:                       | /s/ Barrett  J. O’Connor |   |
|                     | Date: June 28,  2005 |
|                     |                      |
|                     |                      |
| ACCEPTED AND AGREED TO:  |                      |
|                     |                      |
|                     |                      |
| /s/ Larry M. Narum       |                      |   |
| Larry M. Narum           |                      |
| Date: June 28, 2005 |                      |
|                          |                           |  |  |  |

 

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**EXHIBIT A**

 
| 2005  Directors Retirement Agreement Payment (Section 2): |   | $ | 56,023 |   |
|----------------------------------------------------------------|--------|---|--------|--------|

 

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