**EXHIBIT10.1**

 

**AMENDED AND RESTATED**

**ELGIN FINANCIAL SAVINGS BANK**

**SUPPLEMENTAL EXECUTIVE RETIREMENTAGREEMENT**

 

                THIS AMENDMENTexecuted on this 17th day of May, 2004, by and between ELGIN FINANCIAL SAVINGSBANK, a State/Stock Savings Bank located in Elgin, Illinois (the “Company”),and RANDY BLACKBURN (the “Executive”), amends and restates the SupplementalExecutive Retirement Agreement dated June 19, 2002.

 

**INTRODUCTION**

 

                To encourage theExecutive to remain an employee of the Company, the Company is willing toprovide salary continuation benefits to the Executive. The Company will pay thebenefits from its general assets.

 

**AGREEMENT**

 

                The Company andthe Executive agree as follows:

 

**Article I**

**Definitions**

 

                Whenever used inthis Agreement, the following words and phrases shall have the meaningsspecified:

 

                1.1           “*Change of Control*”means:

 

                (a)           A change in the ownership of thecapital stock of the Company, whereby another corporation, person, or groupacting in concert (hereinafter this Agreement shall collectively refer to anycombination of these three [another corporation, person, or group acting inconcert] as a “Person”) as described in Section 14(d)(2) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”), acquires, directly orindirectly, beneficial ownership (within the meaning of Rule 13d-3promulgated under the Exchange Act) of a number of shares of capital stock ofthe Company which constitutes fifty percent (50%) or more of the combinedvoting power of the Company’s then outstanding capital stock then entitled tovote generally in the election of directors; or

 

                (b)           The persons who were members of theBoard of Directors of the Company immediately prior to a tender offer, exchangeoffer, contested election or any combination of the foregoing, cease toconstitute a majority of the Board of Directors; or

 

                (c)           The adoption by the Board ofDirectors of the Company of a merger, consolidation or reorganization planinvolving the Company in which the Company is not the surviving entity, or asale of all or substantially all of the assets of the Company. For purposes ofthis Agreement, a sale

 

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of all or substantially all of the assets of the Company shall bedeemed to occur if any Person acquires (or during the 12-month period ending onthe date of the most recent acquisition by such Person, has acquired) grossassets of the Company that have an aggregate fair market value equal to fiftypercent (50%) or more of the fair market value of all of the respective grossassets of the Company immediately prior to such acquisition or acquisitions; or

 

                (d)           A tender offer or exchange offer ismade by any Person which results in such Person beneficially owning (within themeaning of Rule 13d-3 promulgated under the Exchange Act) either fiftypercent (50%) or more of the Company’s outstanding shares of Common Stock orshares of capital stock having fifty percent (50%) or more the combined votingpower of the Company’s then outstanding capital stock (other than an offer madeby the Company), and sufficient shares are acquired under the offer to causesuch person to own fifty percent (50%) or more of the voting power; or

 

                (e)           Any other transactions or series ofrelated transactions occurring which have substantially the same effect as thetransactions specified in any of the preceding clauses of thisSection 1.1.

 

Notwithstanding the above, certain transfers are permitted withinSection 318 of the Code and such transfers shall not be deemed a Change ofControl under this Section 1.1.

 

                1.2           “*Code*” means theInternal Revenue Code of 1986, as amended.

 

                1.3           “*Disability*”means the Executive’s suffering a sickness, accident or injury which has beendetermined by the carrier of any individual or group disability insurancepolicy covering the Executive, or by the Social Security Administration, to bea disability rendering the Executive totally and permanently disabled. TheExecutive must submit proof to the Company of the carrier’s or Social SecurityAdministration’s determination upon the request of the Company.

 

                1.4           “*Early Termination*”means the Termination of Employment before Normal Retirement Age for reasonsother than death, Disability, Termination for Cause or following a Change ofControl.

 

                1.5           “*Early Termination Date*”means the month, day and year in which Early Termination occurs.

 

                1.6           “*Effective Date*”means May 1, 2004.

 

                1.7           “*Normal Retirement Age*”means the Executive’s 65th birthday.

 

                1.8           “*Normal Retirement Date*”means the later of the Normal Retirement Age or Termination of Employment.

 

                1.9           “*Plan Year*”means a twelve-month period commencing on January 1 and ending on

 

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December 31 of eachyear. The initial Plan Year shall commence on the effective date of thisAgreement.

 

                1.10         “*Termination for Cause*”See Article 5.

 

                1.11         “*Termination of Employment*”means that the Executive ceases to be employed by the Company for any reason,voluntary or involuntary, other than by reason of a leave of absence approvedby the Company.

 

                1.12         “*Years of Employment*”means the total number of twelve-month periods during which the Executive hasbeen employed by the Company. The Executive was hired by the Company in March,1997.

 

**Article2**

**LifetimeBenefits**

 

                2.1           *Normal Retirement Benefit*.  Upon Termination ofEmployment on or after the Normal Retirement Age for reasons other than death,the Company shall pay to the Executive the benefit described in thisSection 2.1 in lieu of any other benefit under this Agreement.

 

                                                                2.1.1        *Amount of Benefit*.  The annual benefit underthis Section 2.1 is $36,000 (Thirty-six thousand dollars). The Company’sBoard of Directors, in its sole discretion, may increase the annual benefitunder this Section 2.1.1; however, an increase shall require therecalculation of Schedule A.

 

                                                                2.1.2        *Payment of Benefit*.  The Company shall pay theannual benefit to the Executive in 12 equal monthly installments commencingwith the month following the Executive’s Normal Retirement Date, paying theannual benefit to the Executive for a period of 15 years.

 

                                                                2.1.3        *Benefit Increases*.  Commencing on the firstanniversary of the first benefit payment, and continuing on each subsequentanniversary, the Company’s Board of Directors, at its sole discretion, mayincrease the benefit.

 

                2.2           *Early Termination Benefit*.  Upon Early Termination, theCompany shall pay to the Executive the benefit described in thisSection 2.2 in lieu of any other benefit under this Agreement.

 

                                                                2.2.1        *Amount of Benefit*   The benefit under this Section 2.2 is theEarly Termination annual Installment set forth on Schedule A for the PlanYear ending immediately prior to the Early Termination Date, determined by oneof the following two methods: a) if the Executive has completed ten (10)Years of Employment upon the Effective Date of this Agreement, the Executiveshall be vested in 50 percent of the Accrual Balance set forth onSchedule A for the first Plan Year and vest in the remaining50 percent equally over the remaining Plan Years until Normal RetirementAge, unless otherwise illustrated on Schedule A; or b) if theExecutive has completed less than ten (10) Years of Employment upon theEffective Date of

 

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this Agreement, theExecutive shall be zero percent vested until completing five (5) Years ofEmployment and then vest equally over the remaining Plan Years Until NormalRetirement Age. An increase in the annual benefit under Section 2.1.1shall require the recalculation of this benefit on Schedule A. Thisbenefit is determined by calculating a 15-year fixed annuity from the vestedAccrual Balance, crediting interest on the unpaid balance at an annual rate of7.50 percent, compounded monthly.

 

                                                                2.2.2        *Payment of Benefit*.  The Company shall pay the annualbenefit to the Executive in 12 equal monthly installments commencing with themonth following Termination of Employment, paying the annual benefit to theExecutive for a period of 15 years.

 

                                                                2.2.3        *Benefit Increases*.  Benefit payments may beincreased as provided in Section 2.1.3.

 

                2.3           *Disability Benefit*.  If the Executive terminatesemployment due to Disability prior to Normal Retirement Age, the Company shallpay to the Executive the benefit described in this Section 2.3 in lieu ofany other benefit under this Agreement.

 

                                                                2.3.1        *Amount of Benefit*.  The benefit under thisSection 2.3 is the Disability annual Installment set forth onSchedule A for the Plan Year ending immediately prior to the date in whichTermination of Employment occurs (except during the first Plan Year, thebenefit is the amount set forth for Plan Year 1), determined by one of thefollowing two methods: a) if the Executive has completed ten (10) Years ofEmployment upon the Effective Date of this Agreement, the Executive shall bevested in 50 percent of the Accrual Balance set forth on Schedule Afor the first Plan Year and vest in the remaining 50 percent equally overthe remaining Plan Years until Normal Retirement Age, unless otherwiseillustrated on Schedule A; or b) if the Executive has completed lessthan ten (10) Years of Employment upon the Effective Date of this Agreement,the Executive shall be zero percent vested until completing five (5) Years ofEmployment and then vest equally over the remaining Plan Years Until NormalRetirement Age. An increase in the annual benefit under Section 2.1.1would require the recalculation of the Disability benefit on Schedule A.This benefit is determined by calculating a 15-year fixed annuity from thevested Accrual Balance, crediting interest on the unpaid balance at an annualrate of 7.50 percent, compounded monthly.

 

                                                                2.3.2        *Payment of Benefit*.  The Company shall pay theannual benefit to the Executive in 12 equal monthly installments commencingwith the month following Termination of Employment, paying the annual benefitto the Executive for a period of 15 years.

 

                                                                2.3.3        *Benefit Increases*.  Benefit payments may beincreased as provided in Section 2.1.3.

 

                2.4           *Change of Control Benefit*.  Upon a Change of Control,the Company shall pay to the Executive the benefit described in thisSection 2.4 in lieu of any other benefit under this Agreement.

 

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2.4.1        *Amount of Benefit.*  The benefit under this Section 2.4 isthe Change of Control annual Installment set forth on Schedule A for thePlan Year ending immediately prior to the date in which Termination ofEmployment occurs (except during the first Plan Year, the benefit is the amountset forth for Plan Year 1), determined by vesting the Executive in theNormal Retirement Benefit described in Section 2.1.1.

 

2.4.2        *Payment of Benefit.*  The Company shall pay the annual benefit tothe Executive in 12 equal monthly installments commencing with the monthfollowing Normal Retirement Age, paying the annual benefit to the Executive fora period of 15 years.

 

2.4.3        *Benefit Increases.*  Benefit payments may be increased as providedin Section 2.1.3.

 

2.4.4        *Excess Parachute Payment.*  Notwithstanding any provision of thisAgreement to the contrary, the Company shall not pay any benefit under thisAgreement to the extent the benefit would create an excise tax under the excessparachute rules of Section 280G of the Code.

 

**Article3**

**DeathBenefits**

 

3.1           *Death During ActiveService.*  If the Executivedies while in the active service of the Company, the Company shall pay to theExecutive’s beneficiary the benefit described in this Section 3.1. Thisbenefit shall be paid in lieu of the benefits under Article 2.

 

3.1.1        *Amount of Benefit.*  The annual benefit under this Section 3.1is the Normal Retirement Benefit amount described in Section 2.1.1.

 

3.1.2        *Payment of Benefit*.  The Company shall pay the annual benefit tothe Executive’s beneficiary in 12 equal monthly installments commencing withthe month following the Executive’s death, paying the annual benefit to theExecutive’s beneficiary for a period of 15 years.

 

3.2           *Death During Payment of aLifetime Benefit.*  If theExecutive dies after any Lifetime Benefit payments have commenced under thisAgreement but before receiving all such payments, the Company shall pay theremaining benefits to the Executive’s beneficiary at the same time and in thesame amounts they would have been paid to the Executive had the Executivesurvived.

 

3.3           *Death After Termination ofEmployment But Before Payment of a Lifetime Benefit Commences.*  If the Executive is entitled to a LifetimeBenefit under this Agreement, but dies prior to the commencement of saidbenefit payments, the Company shall pay the same benefit payments to theExecutive’s beneficiary that the Executive was entitled to prior to deathexcept that the benefit payments shall commence on the first day of the monthfollowing the date of the Executive’s death.

 

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**Article4**

**Beneficiaries**

 

4.1           *Beneficiary Designations.*  The Executive shall designate a beneficiaryby filing a written designation with the Company. The Executive may revoke ormodify the designation at any time by filing a new designation. However,designations will only be effective if signed by the Executive and received bythe Company during the Executive’s lifetime. The Executive’s beneficiarydesignation shall be deemed automatically revoked if the beneficiarypredeceases the Executive, or if the Executive names a spouse as beneficiaryand the marriage is subsequently dissolved. If the Executive dies without avalid beneficiary designation, all payments shall be made to the Executive’sestate.

 

4.2           *Facility of Payment.*  If a benefit is payable to a minor, to aperson declared incompetent, or to a person incapable of handling thedisposition of his or her property, the Company may pay such benefit to theguardian, legal representative or person having the care or custody of suchminor, incompetent person or incapable person. The Company may require proof ofincompetence, minority or guardianship as it may deem appropriate prior todistribution of the benefit. Such distribution shall completely discharge theCompany from all liability with respect to such benefit.

 

**Article5**

**GeneralLimitations**

 

5.1           *Termination for Cause*.  Notwithstanding any provision of thisAgreement to the contrary, the Company shall not pay any benefit under thisAgreement if the Company terminates the Executive’s employment for:

 

(a)           Conviction of a felony or of a grossmisdemeanor involving moral turpitude; or

 

(b)           Fraud, disloyalty, dishonesty orwillful violation of any law or significant Company policy committed inconnection with the Executive’s employment and resulting in an adverse effecton the Company.

 

5.2           *Suicide or Misstatement.*  The Company shall not pay any benefit underthis Agreement if the Executive commits suicide within three years after thedate of this Agreement. In addition, the Company shall not pay any benefitunder this Agreement if the Executive has made any material misstatement offact on an employment application or resume provided to the Company, or on anyapplication for any benefits provided by the Company to the Executive.

 

**Article6**

**Claimsand Review Procedure**

 

6.1           *Claims Procedure.*  Any person or entity (“claimant”) who has notreceived benefits under this Agreement that he or she believes should be paidshall make a claim for such benefits as follows:

 

 

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6.1.1        *Initiation — Written Claim*.  The Claimant initiates a claim by submittingto the Company a written claim for the benefits.

 

6.1.2        *Timing of Company Response*.  The Company shall respond to such claimantwithin 90 days after receiving the claim. If the Company determines thatspecial circumstances require additional time for processing the claim, theCompany can extend the response period by an additional 90 days by notifyingthe claimant in writing, prior to the end of the initial 90-day period, that anadditional period is required. The notice of extension must set forth thespecial circumstances and the date by which the Company expects to render itsdecision.

 

6.1.3        *Notice of Decision*.  If the Company denies part or all of theclaim, the Company shall notify the claimant in writing of such denial. TheCompany shall write the notification in a manner calculated to be understood bythe claimant. The notification shall set forth:

 

                (a)           Thespecific reasons for the denial;

 

                (b)           Areference to the specific provisions of the Agreement on which the denial isbased;

 

                (c)           Adescription of any additional information or material necessary for theclaimant to perfect the claim and an explanation of why it is needed;

 

                (d)           Anexplanation of the Agreement’s review procedures and the time limits applicableto such procedures; and

 

                (e)           Astatement of the claimant’s right to bring a civil action under ERISASection 502(a) following an adverse benefit determination on review.

 

6.2           *Review Procedure.*  Ifthe Company denies part or all of the claim, the claimant shall have theopportunity for a full and fair review by the Company of the denial, asfollows:

 

6.2.1        *Initiation — WrittenRequest*.  To initiate thereview, the claimant, within 60 days after receiving the Company’s notice ofdenial, must file with the Company a written request for review.

 

6.2.2        *Additional Submissions —Information Access.*  Theclaimant shall then have the opportunity to submit written comments, documents,records and other information relating to the claim. The Company shall alsoprovide the claimant, upon request and free of charge, reasonable access to,and copies of, all documents, records and other information relevant (asdefined in applicable ERISA regulations) to the claimant’s claim for benefits.

 

6.2.3        *Considerations on Review.*  In considering the review, the Company shalltake into account all materials and information the claimant submits relatingto the claim, without regard to whether such information was submitted orconsidered in the initial benefit determination.

 

6.2.4        *Timing of CompanyResponse. *The Company shallrespond in writing to such

 

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claimant within 60 daysafter receiving the request for review. If the Company determines that specialcircumstances require additional time for processing the claim, the Company canextend the response period by an additional 60 days by notifying the claimantin writing, prior to the end of the initial 60-day period, that an additionalperiod is required.  The notice ofextension must set forth the special circumstances and the date by which theCompany expects to render its decision.

 

6.2.5  *Notice of Decision*.  The Company shall notify the claimant inwriting of its decision on review.  TheCompany shall write the notification in a manner calculated to be understood bythe claimant. The notification shall set forth:

 

                (a)           The specific reasons for the denial;

 

                (b)           Areference to the specific provisions of the Agreement on which the denial isbased;

 

                (c)           Astatement that the claimant is entitled to receive, upon request and free ofcharge, reasonable access to, and copies of, all documents, records and otherinformation relevant (as defined in applicable ERISA regulations) to theclaimant’s claim for benefits; and

 

                (d)           Astatement of the claimant’s right to bring a civil action under ERISASection 502(a).

 

**Article 7**

**Amendments and Termination**

 

This Agreement may be amended or terminated only by awritten agreement signed by the Company and the Executive.

 

Notwithstanding the previous paragraph in thisArticle 7, the Company may amend or terminate this Agreement at any timeif, pursuant to legislative, judicial or regulatory action, continuation of theAgreement would (i) cause benefits to be taxable to the Executive prior toactual receipt, or (ii) result in significant financial penalties or othersignificantly detrimental ramifications to the Company (other than thefinancial impact of paying the benefits). However, in no event shall this Agreement be terminated under thissection without payment to the Executive of any vested benefit.

 

**Article 8**

**Miscellaneous**

 

8.1           *Binding Effect.* ThisAgreement shall bind the Executive and the Company, and their beneficiaries,survivors, executors, successors, administrators and transferees.

 

8.2           *No Guarantee of Employment.* This Agreement is not an employment policy or contract. It does not givethe executive the right to remain an employee of the Company, nor does itinterfere with the Company’s right to discharge the Executive. It also does notrequire the Executive to remain an employee nor interfere with the Executive’sright to terminate employment at any time.

 

 

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8.3           *Non-Transferability*.  Benefits under this Agreement cannot be sold,transferred, assigned, pledged, attached or encumbered in any manner.

 

8.4           *Reorganization.*  The Company shall not merge or consolidateinto or with another company, or reorganize, or sell substantially all of itsassets to another company, firm, or person unless such succeeding or continuingcompany, firm, or person agrees to assume and discharge the obligations of theCompany under this Agreement. Upon the occurrence of such event, the term “Company”as used in this Agreement shall be deemed to refer to the successor or survivorcompany.

 

8.5           *Tax Withholding*.  The Company shall withhold any taxes that arerequired to be withheld from the benefits provided under this Agreement.

 

8.6           *Applicable Law*.  The Agreement and all rights hereunder shallbe governed by the laws of the State of Illinois, except to the extentpreempted by the laws of the United States of America.

 

8.7           *Unfunded Arrangement*.  The Executive and beneficiary are generalunsecured creditors of the Company for the payment of benefits under thisAgreement. The benefits represent the mere promise by the Company to pay suchbenefits. The rights to benefits are not subject in any manner to anticipation,alienation, sale, transfer, assignment, pledge, encumbrance, attachment, orgarnishment by creditors. Any insurance on the Executive’s life is a generalasset of the Company to which the Executive and beneficiary have no preferredor secured claim.

 

8.8           *Entire Agreement*.  This Agreement constitutes the entireagreement between the Company and the Executive as to the subject matterhereof. No rights are granted to the Executive by virtue of this Agreementother than those specifically set forth herein.

 

8.9           *Administration*.  The Company shall have powers which arenecessary to administer this Agreement, including but not limited to:

 

(a)           Establishing and revising the methodof accounting for the Agreement;

 

(b)           Maintaining a record of benefitpayments; and

 

(c)           Establishing rules and prescribingany forms necessary or desirable to administer the Agreement.

 

8.10         *Named Fiduciary*.  The Company shall be the named fiduciary andplan administrator under this Agreement. It may delegate to others certainaspects of the management and operational responsibilities including theemployment of advisors and the delegation of ministerial duties to qualifiedindividuals.

 

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                IN WITNESSWHEREOF, the Executive and the Company have signed this Agreement.

 
| **EXECUTIVE:**      | ** ** | **COMPANY:**                     |
|---------------------|------------|----------------------------------|
|                |       |                             |   |
| ** **          | ** ** | **ELGIN FINANCIAL SAVINGS BANK** |
|                |       |                             |   |
| /s/ Randy Blackburn |       | **By**                           | /s/ Pat A. Lenart |
| **RANDY BLACKBURN** |       | ** **                       |   |
|                |       | **Title**                        | Sr. V.P of HR |
|                |       |                             |   |

 

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