**Exhibit10.2**

 

**CONFIDENTIALRETIREMENT AND CONSULTING AGREEMENT**

 

This ConfidentialRetirement and Consulting Agreement (“Agreement”) is entered into as of December 20,2007 between **KIMBALL HILL, INC.**(“Company”) and**William E. Long**(“Long”).

 

In consideration of themutual promises and agreements set forth in this Agreement, Company and Longagree as follows:

 

1.                                       **Employment Separation.** Effective January 31, 2008 (“Retirement Date”), Long will retireand resign from employment and all offices and positions with Company andCompany’s parents, subsidiaries and affiliates, including but not limited tothe positions of member of the Management Committee and President and ChiefExecutive Officer of KH Financial, L.P. and Director and President of KHFinancial Holding Company.  Long shallhave no further rights, duties and authorities as an employee and shall not beentitled to any further compensation or non-vested benefits, except as providedin this Agreement.  Upon Company’srequest made from time to time, Long shall execute written resignations of hispositions with Company and Company’s parents, subsidiaries and affiliates.

 

2.                                       **Consideration for Release.** In exchange for Long’s Covenants in Section 6, Long’s Waiver andRelease of Claims in Section 7, and Long’s Covenant Not To Sue in Section 8,and subject to the terms and conditions of this Agreement, Company shall retainand pay Long as a consultant after the Retirement Date in accordance with theprovisions of Section 4 of this Agreement (the “Consulting Payments”).  These Consulting Payments are made in lieu ofpayments otherwise provided for under any Company policies, including withoutlimitation Company’s Severance Pay Policy, and Long acknowledges that theConsulting Payments are good and valuable consideration to which Long is nototherwise entitled. If Long does not sign this Agreement or, after signing,cancels this Agreement, he shall receive only those benefits and paymentsrequired by law.

 

3.                                       **Other Benefits andCompensation.**

 

(a)                                  **Vacation Pay.** Company will pay Long for any accrued and unused vacation days andfloating holidays earned by Long as of the Retirement Date, except that if Longhas taken unearned vacation days, Long’s final regular paycheck will be reducedto reflect the cost of such vacation days.

 

(b)                                 **Continuing HealthBenefits.**  Company will continue to provide Long,through the group health benefits plans maintained by Company, with individualor family dental and vision coverage on substantially the same basis as activeemployees of Company until the earlier of the Consulting Termination Date (ashereinafter defined) or the last day of the month in which Long commencesemployment with another employer or the last day of the month in which Longceases to pay for this coverage (the “Coverage Period”).  The Coverage Period shall not be taken intoaccount as a period of continuation coverage for purposes of Part 6 ofTitle I of the

 

| December 20, 2007 |   | /s/ William E. Long |
|-------------------|--------|---------------------|
| Date              |   | William E. Long     |

 

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Employee Retirement Income Security Act of 1974 (alsoknown as the Consolidated Omnibus Budget Reconciliation Act or COBRA) or forpurposes of any other obligation of Company to provide any continued coverageto Long (or, if applicable, to Long’s family) under any group health benefitsplan maintained by Company. Notwithstanding any provision in this Agreement to the contrary, Companyreserves the right to amend, modify or terminate any group health benefit planmaintained by Company) and any such amendment, modification, or terminationwill apply to Long during the Coverage Period to the same extent that itapplies to active employees of Company.

 

(c)                                  **Withholding.** Company will withhold from the compensation and benefits payable to Longunder this Agreement all appropriate deductions for employee benefits, ifapplicable, and all amounts necessary for Company to satisfy its withholdingobligations under applicable tax laws.

 

4.                                       **Consulting Agreement.**

 

(a)                                  Effective as of February 1, 2008,Company will retain William E. Long as a non-exclusive consultant for theperiod February 1, 2008 through September 30, 2008 (the “ConsultingPeriod”).  During the Consulting Period,Long will perform such services as may be requested from time to time byCompany on an as-needed and part-time basis (not exceeding an average of 40hours per month during the Consulting Period); provided that Long shall not berequired to perform services for more than 60 hours during any calendar monthwithout additional compensation to be agreed upon by Company and Long. Longwill report to Company’s President and Chief Executive Officer. This ConsultingAgreement shall terminate on September 30, 2008 (the “ConsultingTermination Date”) and thereafter may be renewed only upon the written agreementof both parties.

 

(b)                                 Consulting Fees and ExpenseReimbursements.

 

(1)                                  Company agrees to pay Long for theconsulting services as follows:  (a) amonthly fee at the rate of $37,087.50 per month; and (b) a bonus fee in anamount equal to $148,350 multiplied by the Average Management Bonus Percentage,which shall be the percentage calculated by dividing the total amount ofbonuses payable to members of Company’s senior managers (excluding theExecutive Chairman and the President and Chief Executive Officer) by the totalamount of target bonuses of those senior managers, as reasonably determined byCompany as of the end of Company’s 2008 fiscal year ending September 30,2008. Company will pay the bonus fee to Long contemporaneously with Company’spayment of 2008 fiscal year bonuses to Company’s senior managers, but in anyevent no later than January 31, 2009.

 

(2)                                  Company agrees to reimburse Long for allreasonable travel expenses (not including travel expenses for travel to andfrom Company’s offices in Rolling Meadows, Illinois) incurred on Company’sbehalf that are necessary and incidental to the performance of the consultingservices, provided that Long obtains the express prior written approval ofCompany for all such travel. The travel expenses for which Company will payLong will be the actual, 

 

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reasonable expenses oftransportation, lodging and meals. Long agrees that extraordinary expensesshall not be incurred or reimbursed without the express prior written consentof Company.

 

(3)                                  Long agrees to submit an invoice toCompany at the end of each month for the monthly fee due for such month.  Each invoice shall summarize the servicesperformed by Long during such month. Long shall also submit a travel expensestatement (including receipts) at the end of each month which details allreasonable travel expenses incurred by Long during that month.

 

(4)                                  Company will pay Long’s invoices net 10days from date of receipt of invoice. Long agrees to pay and to be solelyresponsible for any and all taxes and insurance required by federal, state, orlocal laws, including but not limited to income taxes, social security taxes,property taxes, excise taxes, sales taxes, use taxes, retailers’ occupationtaxes, service occupation taxes, workers’ compensation insurance, unemploymentcompensation insurance, and any other employment related or other taxes orinsurance incurred or due as a result of the performance of the consultantservices by Long under this Agreement or Company’s payment of monthly fees andthe bonus fee to Long, including all obligations, reports and timelynotifications relating to such matters. Company shall have no obligation to payor withhold any sums for any such taxes or insurance on any amounts due or paidto Long for his consulting services.

 

(c)                                  Long shall perform the consultingservices only as an independent contractor. Long acknowledges that Company doesnot control the method or manner in which Long performs his consulting servicesfor Company. Under no circumstances shall Long be construed to be an employeeor agent of Company, and he shall not be entitled to participate in any ofCompany’s employee benefit programs except as specifically provided otherwisein this Agreement. Company shall not be liable to pay wages, withhold anytaxes, provide any insurance or other employee benefits, or otherwise beobligated to Long as an employer. Nothing in this Agreement shall be construedas creating a joint venture, partnership, or agency relationship between theparties.

 

5.                                       **Stock Purchase.**

 

(a)                                  Long agrees to sell, and Company agreesto purchase, effective as of the Retirement Date, all shares of common stock ofthe Company owned as of the date of this Agreement by Long, as Trustee of theWilliam E. Long Revocable Trust, as amended (the “Trustee”), for an amount (the“Purchase Price”) equal to 14,984 multiplied by the per share Fair Market Valueas of the Retirement Date determined in accordance with the provisions of this Section 5.

 

(b)                                 The Trustee currently owns 14,984 sharesof common stock of Company, represented by Certificate No. 103 dated12/29/2005 (5,000 shares), Certificate No. 113 dated 7/1/2006 (2,984shares), Certificate No. 114 dated 7/1/2006 (2,000 shares), andCertificate No. 119 dated 9/28/2006 (5,000 shares) (collectively, the “CompanyStock”). Long, jointly and severally in his individual capacity and as theTrustee, represents and warrants that the Trustee is the lawful 

 

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owner of, and has thecomplete right, title, and interest in and to the Company Stock, free and clearof any and all liens, encumbrances, or rights of third parties, that theTrustee has not sold, transferred, pledged or assigned the Company Stock, andthat the Trustee has full power to sell, transfer and assign the Company Stockto Company in accordance with the terms of this Agreement.

 

(c)                                  Company and Long, individually and in hiscapacity as the Trustee, agree that the per share Fair Market Value of CompanyStock as of the Retirement Date will be the value determined by Company’s StockOption Committee (the “Committee”) organized pursuant to the Company’sIncentive Stock Option Plan (the “Plan”). The parties understand that theTrustee of the Company’s Employee Stock Ownership Plan (the “ESOP”) will make adetermination of the per share fair market value of the Company’s common stockas of December 31, 2007 for purposes of the ESOP (the “ESOP Valuation”).Long, individually and in his capacity as the Trustee, agrees that theCommittee may determine, in its discretion, that the per share Fair MarketValue as of the Retirement Date is the per share fair market value of theCompany’s common stock as of December 31, 2007 determined by the Trusteeof the ESOP, and further agrees to accept the Committee’s determination for allpurposes of this Agreement. Company and Long anticipate that the Trustee of theESOP will notify Company of the ESOP Valuation in February, 2008 and that theCommittee will make its determination of Fair Market Value thereafter.  Within one week after the Committee’sdetermination of Fair Market Value as of the Retirement Date, Company willnotify Long of (1) the ESOP Valuation as determined by the Trustee of theESOP and (2) the Fair Market Value as determined by the Committee.

 

(d)                                 Long, individually and in his capacity asthe Trustee, agrees to deliver to Company the following documents not laterthan one week after his receipt of the notification of the ESOP Valuation asdetermined by the ESOP Trustee and the Fair Market Value as determined by theCommittee:

 

(1)                                  Certificate No. 103 dated12/29/2005, Certificate No. 113 dated 7/1/2006, Certificate No. 114dated 7/1/2006, and Certificate No. 119 dated 9/28/2006  (collectively, the “Certificates”); and

 

(2)                                  Executed Stock Powers for all theaforesaid stock certificates in substantially the form of Exhibit A tothis Agreement.

 

Long, individually and inhis capacity as the Trustee, will deliver the Certificates and the executedStock Powers to Company on the Retirement Date, provided that Long has notcancelled this Agreement pursuant to Section 7 of this Agreement. Title tothe Company Stock will vest in Company immediately upon Long’s delivery of theCertificates and the executed Stock Powers to Company. If Long has cancelledthis Agreement pursuant to Section 7 of this Agreement, then Long,individually and in his capacity as the Trustee, will have no obligation underthis Section 5 to deliver the Certificates and the Stock Powers toCompany.

 

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(e)                                  Payment of Purchase Price.

 

(1)                                  Long, individually and in his capacity asthe Trustee, acknowledges that the Company’s loan and financing agreements,including the Trust Indenture (the “Trust Indenture”) with respect to the $203million in principal amount of 101⁄2% senior subordinated notes due 2012 thatsubsequently were registered with the Securities and Exchange Commission andthe Credit Agreement (the “Credit Agreement”) with respect to the Company’s$500 million revolving credit facility, as they may be amended, modified,refinanced, or replaced in the future, place various limitations, restrictionsand constraints upon the Company’s ability to redeem shares from itsshareholders.

 

(2)                                  Provided that Long, individually and inhis capacity as the Trustee, has delivered the Certificates and the executedStock Powers to Company in accordance with this Section 5, within twoweeks after Company’s receipt of the Certificates and executed Stock Powers,Company will pay the Purchase Price in full to Trustee, so long as Company isotherwise permitted to do so under the various limitations, restrictions andconstraints contained in the Company’s loan and financing agreements, includingwithout limitation the Trust Indenture and the Credit Agreement.

 

(3)                                  Notwithstanding anything in thisAgreement to the contrary, under no circumstances will Company be obligated tomake any payment of the Purchase Price if, in the reasonable opinion ofCompany, the payment is prohibited (a) by any restrictions which arecontained in any loan agreement, any debt instrument, any equity financingagreement, or any similar agreement or commitment (including without limitationthe Trust Indenture and the Credit Agreement), or (b) by any federal,state, or other securities law, or any other requirement of law or of anyregulatory body with jurisdiction over the Company. If, in the Company’sreasonable opinion, a payment is prohibited by any such restrictions or laws,then the time periods provided for in this Agreement for making that paymentshall be suspended at the election of the Company, and the Company shall makesuch payment as soon as, in Company’s reasonable opinion, it is permitted to doso under any such restrictions or laws. In addition, if Long has cancelled thisAgreement pursuant to Section 7 of this Agreement, then Company will haveno obligation to pay Trustee any portion of the Purchase Price for the CompanyStock.

 

(4)                                  All payments of the Purchase Price shallbe made, in Company’s discretion, either by wire transfer to a United Statesbank account designated by the Trustee or by check payable to the Trustee andmailed to the following address:

 
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The check shall be mailedfirst class mail, postage prepaid, and each payment shall be considered made asof the date of mailing.

 

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(5)                                  Long agrees to allow to expire and to notexercise any remaining stock options granted to him under the Stock OptionAgreement between Company and Long dated April 15, 2004, as amended by theAgreement and Amendment dated September 30, 2005 and the Amendment toStock Option Agreements dated August 1, 2006, respectively.

 

(6)                                  Long acknowledges and agrees that Companyhas made no representations to Long regarding any tax consequences to Longresulting from or relating to this Agreement, and Long agrees that any taxconsequences to Long resulting from or relating to this Agreement shall beborne solely by Long.

 

6.                                       **Long’s Covenants.** In order to protect the business, good will, confidential information,relationships and other proprietary rights of Company, Long agrees to thefollowing:

 

(a)                                  **Return of Company Property**. No later than one week after the Consulting Termination Date, Long willreturn to Company all Company property, including but not limited to:  identification cards; files; computerhardware, software, equipment and disks; cell phones; keys; Company owned orleased vehicles; credit cards; and financial records, customer lists, vendorinformation, and all other Confidential Information (as defined below) in Long’spossession.

 

(b)                                 **Nondisclosure of Company’sConfidential Information.**  Long acknowledges that heperformed services for the Company that required the Company to disclose to himconfidential business information and trade secrets (“Confidential Information”).Long further acknowledges that Company will continue to provide Long access toConfidential Information during the Consulting Period. Long agrees that he willkeep all Confidential Information received from Company at any time strictlyand absolutely confidential and that he will not directly or indirectly use ordisclose to any person outside the Company, any Confidential Information ofCompany, or any Confidential Information received from or about third partiesby Company. Long will use reasonable and prudent care to safeguard and preventthe unauthorized use or disclosure of Confidential Information. Longacknowledges and agrees that Confidential Information is any information relatingto the Company and its employees, customers, trade partners, and developmentpartners that is not generally available to the public, and includesinformation relating to the Company’s actual or anticipated businessoperations, including, but not limited to, information about the Company’sproducts, homebuilding designs and specifications, credit agreements, debtinstruments, equity financing agreements, financial performance, projectedfinancial performance, financial data, financial strategy, assets, liabilities,pricing, margins, loan origination practices, business systems, business plans,marketing plans, customer strategy, land acquisition strategy, land acquisitionterms, land development strategy, the identity of Company’s subcontractors,vendors, suppliers, and partners, resources, technical analyses, and recruitingand compensation practices.

 

Long acknowledges andagrees that the Confidential Information is valuable and that breach of hisconfidentiality obligations will cause Company irreparable injury and damagethat cannot be reasonably or adequately compensated by money damages. Longexpressly agrees that Company shall be entitled to injunctive or otherequitable relief in order to prevent a breach of his 

 

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confidentialityobligations, in addition to any other remedies legally available to Company.Long expressly waives the claim that Company has an adequate remedy at law forbreach of Long’s obligations under this Section 6.

 

(c)                                  **Nonsolicitation of Employees.** Long shall not, at any time prior toConsulting Termination Date or during the twelve (12) month periodthereafter, solicit or participate in or promote the solicitation of any personwho was employed by Company on the Consulting Termination Date to leave theemploy of Company or, on behalf of himself or any other person, hire, employ,or engage any such person, or otherwise interfere with the performance of anyperson’s duties for the Company.  Longfurther agrees that, during such time, if a Company employee contacts Longabout prospective employment, Long will inform such employee that he cannotdiscuss the matter further.

 

7.                                       **Long’s Waiver and Releaseof Claims.**  As a material inducement to Company to enterinto this Agreement, and in consideration of Company’s promise to retain Longas a consultant and to make the Consulting Payments, Long knowingly andvoluntarily releases and forever discharges Company, and all of its past,present, and future affiliates, parents, subsidiaries and related entities, andall of their past, present and future officers, directors, shareholders,employees, agents, attorneys and assigns (collectively, the “Releasees”), fromany federal, state or local claims, demands, actions, liabilities, suits orcauses of action, at law or equity or otherwise, and any and all rights to orclaims for attorneys’ fees or damages (including back pay, compensatory,punitive, or liquidated damages) or equitable relief, which he has or may haveagainst any or all of the Releasees, whether such claims are known or unknown,arising up until the Retirement Date, out of Long’s employment with Company orany of its affiliates or the termination of Long’s employment with Company orany of its affiliates except that Long does not waive any claims for workers’compensation benefits or unemployment benefits.

 

This release includes, but is not limited to, rightsand claims arising under the Age Discrimination in Employment Act of 1967, asamended by the Older Workers Benefit Protection Act of 1990 (“ADEA”), Title VIIof the Civil Rights Act of 1964, as amended, the Americans with DisabilitiesAct, ERISA, the Fair Labor Standards Act, any state or local human rightsstatute or ordinance, any claims or rights of action relating to breach of contract,breach of an employment agreement, breach of a bonus agreement, violation ofpersonnel policies or handbooks, public policy, personal or emotional injury,defamation, libel, slander, additional compensation, or fringe benefits.  Long specifically waives the benefit of anystatute or rule of law which, if applied to this Agreement, wouldotherwise exclude from its binding effect any claims not now known by Long toexist. This release is not intended to waive or release any claim for failureto provide vested benefits under a Company-sponsored employee benefit plan towhich Long is legally entitled. Nor does this release waive claims arisingafter the date of this Agreement or claims that otherwise cannot be released bylaw.

 

**YOU UNDERSTAND THAT THISSEPARATION AND RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWNCLAIMS YOU MAY HAVE AGAINST COMPANY AS OF THE DATE OF THIS AGREEMENT.**

 

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This Agreement is presented to Long on or before December 20,2007.  Long acknowledges that he hasreviewed this Agreement in its entirety. Long acknowledges that he has been granted at least twenty-one (21) dayswithin which to consider this Agreement. Long has, by this Agreement, been advised in writing to consult withlegal counsel prior to executing this Agreement.  Long acknowledges that if he executes thisAgreement prior to the expiration of twenty-one (21) days, or chooses not toconsult legal counsel, he does so freely and knowingly, and waives any and allclaims that such action or inaction would affect the validity of thisAgreement.  Long further acknowledgesthat any changes to this Agreement, whether material or immaterial, do notrestart the twenty-one (21) day period.

 

Long understands that he may cancel this Agreement atany time on or before the seventh day following the date on which he signs theAgreement.  To be effective, the decisionto cancel must be in writing and delivered to Company, personally or byfacsimile, on or before the seventh day after Long signs this Agreement, to theattention of:

 

JoAnn M. Peterson

Vice President, HumanResources

Kimball Hill Homes

5999 New Wilke Road

Rolling Meadows, IL  60008

Fax No.: (866) 556-1819

 

No Consulting Paymentswill be made until fifteen (15) days have elapsed after the date on whichCompany has received this Agreement signed by Long.  No payments will be due andowing under this Agreement and Company will not be obligated to purchase anyshares of common stock owned by the Trustee if Long cancels this Agreement asprovided in this Section 7.  AllConsulting Payments shall be made by either personal delivery to Long or first class mail, postage prepaid, to Long at thefollowing address and shall be considered paid as of the date of personal deliveryor mailing, as the case may be:

 
|   | William E. Long |   |
|--------|-----------------|--------|
|   |            |   |
|   |            |   |

 

8.                                       **Long’s Covenant Not toSue.**  A “covenant not to sue” is a legal term whichmeans you promise not to file a lawsuit in court or an arbitration. It isdifferent from the Waiver and Release of Claims contained in Section 7above. Besides waiving and releasing the claims covered by Section 7above, Long further covenants and agrees not to sue the Company or any otherReleasee based on any claim released by Long under Section 7 of thisAgreement, except that this Agreement does not limit Long’s right to file acharge of discrimination against the Company under ADEA or other civil rightsstatute or to participate in an investigation or proceeding conducted by theEqual Employment Opportunity Commission or other administrative agency or tobring a lawsuit against the Company to challenge the validity of this 

 

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Agreement under the ADEA.  This Agreement does, however, waive andrelease Long’s right to recover money or other individual relief under ADEA orany other statute.

 

9.                                       **Long’s Acknowledgments.** Long acknowledges and agrees that (i) Long has been paid for allhours worked, including overtime and vacation pay; (ii) Long has notsuffered any on-the-job injury for which he has not already filed a claim; and (iii) thisAgreement states fully all agreements, understandings, promises, andcommitments as between Long and Company relating to the termination of Long’semployment and (iv) in deciding to sign this Agreement, Long has notrelied on any representations, statements, agreements, understandings,promises, or commitments that are not expressly set forth in this Agreement.

 

10.                                 **Agreement Not to SeekFuture Employment.**  Long agrees he will not applyfor employment or otherwise request to be considered for employment with theCompany or any other Releasee. Violation of this provision alone shall be alawful basis for denying reemployment in the event Long does seek suchreemployment. In the event the Company or any of the Releasees hires Long, Longunderstands and agrees that the Company or the Releasees will have automaticcause to terminate Long’s employment and that the termination of Long’semployment shall not constitute a violation of any federal, state, or locallaw, judicial decision, order, or regulation. Long further agrees andacknowledges that he hereby voluntarily waives, releases, discharges andacquits any such cause of action, if any.

 

11.                                 **Arbitration.**

 

(a)                                  Excepting only the claims identified inSubparagraph (b) below, any and all disputes and claims arising out of orrelating to Long’s employment by the Company or Long’s consulting relationshipwith the Company, including any disputes or claims relating to this Agreement,that are not resolved by negotiation between the parties shall be submitted tomediation administered by the American Arbitration Association (the “AAA”) byone mediator under its Employment Arbitration Rules and MediationProcedures in effect at the time of filing of the demand for mediation. If thedispute or claim is not resolved through mediation, then it shall be submittedexclusively to final and binding arbitration administered by the AAA under itsEmployment Arbitration Rules and Mediation Procedures in effect at thetime of filing of the demand for arbitration.

 

(b)                                 This arbitration agreement excludes onlythe following matters:  (i) a claimfor workers’ compensation benefits; (ii) a claim for unemploymentbenefits; (iii) the right to file a charge of discrimination with anadministrative agency (except that any subsequent claim brought by Long againstthe Company for individual relief pursuant to a right-to-sue letter is coveredby this agreement and must be arbitrated); and (iv) the right to file acharge alleging any unfair labor practice under the NLRA. All other disputesand claims between Long and the Company shall be arbitrated. In addition, anyaction by Company to obtain injunctive relief for breach of Long’sconfidentiality obligations under Section 6 of this Agreement may bemaintained in a court of competent jurisdiction.

 

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(c)                                  A request for arbitration shall be filedin writing with the AAA and a copy shall be provided to the other party. Allquestions regarding the arbitrability of a dispute or claim (including allclaims that fraud or misrepresentation induced either party to sign thisarbitration agreement) will be resolved by the arbitrator. Unless the partiesagree otherwise in writing, there shall be one arbitrator. Arbitration shall beheld in Chicago, Illinois or such other place as the parties may mutuallyagree. The arbitrator may grant any remedy or relief that a court of competentjurisdiction would be authorized to award under applicable law. The decision oraward of the arbitrator shall be in writing and shall include the reasons forthe arbitrator’s decision. The decision of the arbitrator shall be final andbinding on both parties, and judgment upon the arbitral award may be entered inany court of competent jurisdiction.

 

(d)                                 Unless otherwise provided by law, eachparty shall pay its own expenses, including without limitation attorneys’ feesand costs (including the cost of experts), except that the Company shall payall of the AAA filing and administrative fees and all of the fees of thearbitrator assigned by the AAA to resolve the dispute or claim.

 

(e)                                  In the event that either party files, andis allowed by the courts to prosecute, a court action on any dispute or claim,then you and the Company also agree to waive the right to request a jury trial,and we both understand and acknowledge that by signing this agreement, we areboth giving up any right to have any disputes or claims relating to youremployment decided in a trial by jury.

 

12.                                 **Non-Assignment.** This Agreement is personal to Long, and Long may not assign, transfer,or pledge this Agreement or any rights or payments arising under thisAgreement.

 

13.                                 **Governing Law.** This Agreement shall be governed by the laws of the State of Illinois,excluding its choice of laws rules.

 

14.                                 **Severability.** If any provision of this Agreement is found by a tribunal of competentjurisdiction to be invalid or unenforceable, in whole or in part, then thatprovision shall be deemed to be modified or restricted in the manner necessaryto render it valid and enforceable, and this Agreement shall be construed andenforced to the maximum extent permitted by law.

 

15.                                 **Entire Agreement**. This Agreement is a complete agreement and states fully all agreements,commitments, promises, and understandings between Long and Company as to theseparation of Long from employment by Company. This Agreement supersedes anyand all prior agreements, whether oral or written, between Long and Company.Except as expressly provided in this Agreement, Long is not entitled to anyother or further compensation or remuneration from Company.

 

**[SIGNATURE PAGE FOLLOWS]**

 

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**IN WITNESS WHEREOF**, the parties hereto have executed thisAgreement effective as of December 20, 2007.

 
| **William E. Long**       | **Company**       |
|---------------------------|-------------------|
|                      |              |
|  /s/ William E. Long |              | By: |  /s/ C. Kenneth Love |
|                      |              |   |
|                      | Its:              | Chief Executive Officer |
|                      |              |
| Date:                     | December 20, 2007 |   | Date: | December  20, 2007 |   |
|                           |                   |  |  |  |  |  |  |

 

**William E. Long, Trustee of theWilliam E. Long Revocable Trust, as amended (the “Trust”),** hereby accepts and agrees to allprovisions of this Agreement applicable to the Trust, including withoutlimitation the provisions of Section 4 of this Agreement, on and as of theday and year set forth below:

 
|                                                            |              |
|-----------------------------------------------------------------|-------------------|
| **William E. Long**                                             |
| **Trustee of the William E. Long  Revocable Trust, as amended** |
|                                                            |
| Date:                                                           | December 20, 2007 |   |
|                                                                 |                   |  |  |

 

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