**EXHIBIT10.2**

 

**EFSBANKSUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT**

 

THIS AGREEMENT is adoptedthis 17th day of May, 2004, by and between EFS BANK (formerly Elgin FinancialSavings Bank), a State/Stock Savings Bank located in Elgin, Illinois (the “Company”),and ERIC J. WEDEEN (the “Executive”).

 

**INTRODUCTION**

 

To encourage the Executiveto remain an employee of the Company, the Company is willing to provide salarycontinuation benefits to the Executive. The Company will pay the benefits fromits general assets.

 

**AGREEMENT**

 

The Company and theExecutive agree as follows:

 

**Article1Definitions**

 

Whenever used in thisAgreement, the following words and phrases shall have the meanings specified:

 

1.1           “*Change of Control*”means:

 

(a)           A change in the ownership of the capital stock of theCompany, whereby another corporation, person, or group acting in concert(hereinafter this Agreement shall collectively refer to any combination ofthese three [another corporation, person, or group acting in concert] as a “Person”)as described in Section 14(d)(2) of the Securities Exchange Act of 1934,as amended (the “Exchange Act”), acquires, directly or indirectly, beneficialownership (within the meaning of Rule 13d-3 promulgated under theExchange Act) of a number of shares of capital stock of the Company whichconstitutes fifty percent (50%) or more of the combined voting power of theCompany’s then outstanding capital stock then entitled to vote generally in theelection of directors; or

 

(b)           The persons who were members of the Board of Directors ofthe Company immediately prior to a tender offer, exchange offer, contestedelection or any combination of the foregoing, cease to constitute a majority ofthe Board of Directors; or

 

(c)           The adoption by the Board of Directors of the Company of amerger, consolidation or reorganization plan involving the Company in which theCompany is not the surviving entity, or a sale of all or substantially all ofthe assets of the Company. For purposes of this Agreement, a sale of all orsubstantially all of the assets of the Company shall be deemed to occur if anyPerson

 

 

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acquires (or during the 12-month periodending on the date of the most recent acquisition by such Person, has acquired)gross assets of the Company that have an aggregate fair market value equal tofifty percent (50%) or more of the fair market value of all of the respectivegross assets of the Company immediately prior to such acquisition oracquisitions; or

 

(d)           A tender offer or exchange offer is made by any Personwhich results in such Person beneficially owning (within the meaning ofRule 13d-3 promulgated under the Exchange Act) either fifty percent(50%) or more of the Company’s outstanding shares of Common Stock or shares ofcapital stock having fifty percent (50%) or more the combined voting power ofthe Company’s then outstanding capital stock (other than an offer made by theCompany), and sufficient shares are acquired under the offer to cause suchperson to own fifty percent (50%) or more of the voting power; or

 

(e)           Any other transactions or series of related transactionsoccurring which have substantially the same effect as the transactionsspecified in any of the preceding clauses of this Section 1.1.

 

Notwithstanding the above, certain transfersare permitted within Section 318 of the Code and such transfers shall notbe deemed a Change of Control 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 onDecember 31 of each year. The initial Plan Year shall commence on theeffective date of this

 

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Agreement.

 

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

 

1.11         *“Termination of Employment”* means that the Executive ceasesto be employed by the Company for any reason, voluntary or involuntary, otherthan by reason of a leave of absence approved by the Company.

 

1.12         *“Years of Employment”* means the total number of twelve-monthperiods during which the Executive has been employed by the Company. TheExecutive was hired by the Company on November 1, 1994.

 

**Article 2**

**Lifetime Benefits**

 

2.1           *Normal Retirement Benefit.* Upon Termination of Employment on or after the Normal Retirement Age forreasons other than death, the Company shall pay to the Executive the benefitdescribed in this Section 2.1 in lieu of any other benefit under thisAgreement.

 

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

 

2.1.2        *Payment of Benefit.*  The Company shall pay the annual benefit tothe Executive in twelve (12) equal monthly installments commencing with themonth following the Executive’s Normal Retirement Date, paying the annualbenefit to the Executive for a period of 15 years.

 

2.1.3        *Benefit Increases.*  Commencing on the first anniversary of thefirst benefit payment, and continuing on each subsequent anniversary, theCompany’s Board of Directors, at its sole discretion, may increase the benefit.

 

2.2           *Early Termination Benefit.* Upon Early Termination, the Company shall pay to the Executive thebenefit described in this Section 2.2 in lieu of any other benefit under thisagreement.

 

2.2.1        *Amount of Benefit.*  The benefit under this Section 2.2 isthe Early 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 on ScheduleA for the first Plan Year and vest in the remaining 50 percent equallyover the remaining Plan Years until Normal Retirement Age, unless otherwiseillustrated on Schedule A; or b) if the Executive has completed less than(10) Years of Employment upon the Effective Date of

 

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this Agreement, the executive shall be zero percentvested until completing five (5) Years of Employment and then vest equally overthe remaining Plan Years Until Normal Retirement Age. An increase in the annualbenefit under Section 2.1.1 shall require the recalculation of thisbenefit on Schedule A. This benefit is determined by calculating a 15-yearfixed annuity from the vested Accrual Balance, crediting interest on the unpaidbalance at an annual rate of 7.50 percent, compounded monthly.

 

2.2.2        *Payment of Benefit.*  The Company shall pay the benefit to theExecutive in One hundred eighty (180) equal monthly installments commencingwithin thirty (30) days following Termination of Employment and payable on thefirst day of each month thereafter.

 

2.2.3        *Benefit Increa*ses.  Benefit payments may be increased as providedin Section 2.1.3.

 

2.3           *Disability Benefit.* If the Executive terminates employment due to Disability prior to NormalRetirement Age, the Company shall pay to the Executive the benefit described inthis Section 2.3 in lieu of any other benefit under this Agreement.

 

2.3.1        *Amount of Benefit.*  The benefit under this Section 2.3 isthe Disability annual Installment set forth on Schedule A for the Plan Yearending immediately prior to the date in which Termination of Employment occurs(except during the first Plan Year, the benefit is the amount set forth forPlan Year 1), determined by one of the following two methods: a) if theExecutive has completed ten (10) Years of Employment upon the Effective Date ofthis Agreement, the Executive shall be vested in 50 percent of the AccrualBalance set forth on Schedule A for the first Plan Year and vest in theremaining 50 percent equally over the remaining Plan Years until NormalRetirement Age, unless otherwise illustrated on Schedule A; or b) if theExecutive has completed less than ten (10) Years of Employment upon theEffective Date of this Agreement, the Executive shall be zero percent vesteduntil completing five (5) Years of Employment and then vest equally over theremaining Plan Years Until Normal Retirement Age. An increase in the annualbenefit under Section 2.1.1 would require the recalculation of theDisability benefit on Schedule A. This benefit is determined by calculating a15-year fixed annuity from the vested Accrual Balance, crediting interest onthe unpaid balance at an annual rate of 7.50 percent, compounded monthly.

 

2.3.2        *Payment of Benefit.*  The Company shall pay the benefit to theExecutive in One hundred eighty (180) equal monthly installments commencingwithin thirty (30) days following Termination of Employment and payable of thefirst day of each month thereafter.

 

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

 

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

 

 

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2.4.1        *Amount of Benefit.* The benefit under this Section 2.4is the Change of Control annual Installment set forth on Schedule A forthe Plan 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 the NormalRetirement Benefit described in Section 2.1.1.

 

2.4.2        *Payment of Benefit*. The Company shall pay the benefit to theExecutive in One hundred eighty (180) equal monthly installments commencingwithin thirty (30) days following Normal Retirement Age and payable on thefirst of each month thereafter.

 

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 this Agreement to the contrary, the Companyshall not pay any benefit under this Agreement to the extent the benefit wouldbe an excess parachute payment under Section 208G of the Code. In suchevent, the benefit shall be reduced to the maximum benefit allowed that wouldnot create an excess parachute payment.

 

**Article3**

**DeathBenefits**

 

3.1           *Death During Active Service*.  If the Executive dies while in the activeservice of the Company, the Company shall pay to the Executive’s beneficiarythe benefit described in this Section 3.1. This benefit shall be paid inlieu of the benefits under Article 2.

 

3.1.1        *Amount of Benefit*. The annual benefit under thisSection 3.1 is the Normal Retirement Benefit amount described inSection 2.1.1.

 

3.1.2        *Payment of Benefit*. The Company shall pay the benefit to theExecutive’s beneficiary in One hundred eighty (180) equal monthly installmentscommencing within thirty (30) days following the Executive’s death and payableon the first of each month thereafter.

 

3.2           *Death During Payment of a Lifetime Benefit*.  If the Executive dies after any LifetimeBenefit payments have commenced under this Agreement but before receiving allsuch payments, the Company shall pay the remaining benefits to the Executive’sbeneficiary at the same time and in the same amounts they would have been paidto the Executive had the Executive survived.

 

3.3           *Death After Termination of Employment But Before Payment of a LifetimeBenefit Commences*.  If theExecutive is entitled to a Lifetime Benefit under this Agreement, but diesprior to the commencement of said benefit payments, the Company shall pay thesame benefit payments to the Executive’s beneficiary that the Executive wasentitled to prior to death except that the benefit payments shall commence onthe first day of the month following the date of the Executive’s death.

 

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**Article4**

**Beneficiaries**

 

4.1           *Beneficiary Designations*.  The Executive shall designate a beneficiary byfiling 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 personalrepresentative of the Executive’s estate.

 

4.2           *Facility of Payment.*  Ifa benefit is payable to a minor, to a person declared incompetent, or to aperson incapable of handling the disposition of his or her property, theCompany may pay such benefit to the guardian, legal representative or personhaving the care or custody of such minor, incompetent person or incapable person.The Company may require proof of incompetence, minority or guardianship as itmay deem appropriate prior to distribution of the benefit. Such distributionshall completely discharge the Company from all liability with respect to suchbenefit.

 

**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 gross misdemeanor involvingmoral turpitude; or

 

                                                                (b)           Fraud, disloyalty, dishonesty or willful violation of anylaw or significant Company policy committed in connection with the Executive’semployment and resulting in an adverse effect on 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 by the Company to the Executive.

 

**Article6**

**Claimsand Review Procedure**

 

6.1           *Claims Procedure*.  Anyperson or entity (“claimant”) who has not received benefits under thisAgreement that he or she believes should be paid shall make a claim for suchbenefits 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)           The specific reasons for the denial;

 

(b)           A reference to the specificprovisions of the Agreement on which the denial is based;

 

(c)           A description of any additionalinformation or material necessary for the claimant to perfect the claim and anexplanation of why it is needed;

 

(d)           An explanation of the Agreement’sreview procedures and the time limits applicable to such procedures; and

 

(e)           A statement of the claimant’s rightto bring a civil action under ERISA Section 502(a) following an adversebenefit 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 Company Response*.  The Company shall respond in writing to such

 

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claimant within 60 days after receiving the requestfor review. If the Company determines that special circumstances requireadditional time for processing the claim, the Company can extend the responseperiod by an additional 60 days by notifying the claimant in writing, prior tothe end of the initial 60-day period, that an additional period is required.The notice of extension must set forth the special circumstances and the dateby which the Company expects to render its decision.

 

6.2.5        *Notice of Decision*.  The Company shall notify the claimant inwriting of its decision on review. The Company shall write the notification ina manner calculated to be understood by the claimant. The notification shallset forth:

 

(a)           The specific reasons for denial;

 

(b)           A reference to the specificprovisions of the Agreement on which the denial is based;

 

(c)           A statement that the claimant isentitled to receive, upon request and free of charge, reasonable access to, andcopies of, all documents, records and other information relevant (as defined inapplicable ERISA regulations) to the claimant’s claim for benefits; and

 

(d)           A statement of the claimant’s rightto bring a civil action under ERISA Section 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 thisAgreement be terminated under this section without payment to the Executive ofany vested benefit determined as of the end of the Plan Year immediately priorto such termination and payable in a lump sum within sixty (60) days followingsuch termination.

 

**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

 

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with the Company’s right to discharge theExecutive. It also does not require the Executive to remain an employee nor interferewith the Executive’s right to terminate employment at any time.

 

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 Agreement otherthan 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 method of accounting for the Agreement;

 

                (b) Maintaining a record of benefit payments; and

 

                (c) Establishing rules and prescribing any forms necessary or desirable toadminister the Agreement.

 

8.10         *Designated 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.

 

(SignaturePage Following)

 

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IN WITNESS WHEREOF, theExecutive and the Company have signed this Agreement.

 
| **EXECUTIVE:**     | **COMPANY:** |
|--------------------|--------------|
|               | ** **   | ** ** |
|               | **EPS BANK** |
|               | ** **   |
| /s/ Eric J. Wedeen |         | **By** | /s/ Pat A. Lenart |
| **ERIC J. WEDEEN** | **Title**    | Sr. Vice President |
|                    |              |  |  |

 

 

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