Document:

Exhibit 10.5
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Genco Shipping & Trading Limited
Restricted Stock Unit Grant Agreement
 
THIS AGREEMENT, made as of February 23, 2022, between GENCO SHIPPING & TRADING LIMITED (the “Company”) and Robert Hughes (the “Participant”).
 
WHEREAS, the Company has adopted and maintains the Genco Shipping & Trading Limited Amended and Restated 2015 Equity Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts the successful conduct of the business of the Company depends, with incentives to: (a) enter into and remain in the service of the Company, (b) acquire a proprietary interest in the success of the Company, (c) maximize their performance and (d) enhance the long-term performance of the Company;
 
WHEREAS, the Plan provides that the Board of Directors of the Company or a committee to which the Board of Directors has delegated such authority (the Board of Directors or such committee, as applicable, the “Administrator”) shall administer the Plan and determine the key persons to whom awards shall be granted and the amount and type of such awards; 
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WHEREAS, the Administrator has determined that the purposes of the Plan would be furthered by granting the Participant an award under the Plan as set forth in this Agreement;
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
 
1.Grant of Restricted Stock Units.  Pursuant to, and subject to, the terms and conditions set forth herein (including without limitation Section 17 hereof) and in the Plan, the Company hereby grants to the Participant 12,781 restricted stock units (the “Restricted Stock Units”).  Each Restricted Stock Unit represents the right to receive one share of Common Stock or, in the discretion of the Administrator, an amount of cash equal to the Fair Market Value of such share of Common Stock, subject to the terms and conditions set forth in this Agreement and the Plan.  
2.Grant Date.  The Grant Date of the Restricted Stock Units is February 23, 2022.
3.Incorporation of Plan.  All terms, conditions and restrictions of the Plan are incorporated herein and made part hereof as if stated herein.  If there is any conflict between the terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as interpreted by the Administrator, shall govern.  Except as otherwise provided herein, all capitalized terms used herein shall have the meaning given to such terms in the Plan.
4. Vesting.

(a) Subject to Section 4(b) and Section 6 hereof and the further provisions of this Agreement, 1/5 of the total number of Restricted Stock Units shall vest on each of the first five anniversaries of February 23, 2022 (rounding down to the nearest whole Restricted Stock Unit on each of the first four anniversaries and rounding up on the fifth anniversary) (each such date, a “Vesting Date”), in each case subject to the Participant’s continued service with the Company on the applicable Vesting Date.
(b)In the event of the occurrence of a Change in Control, the Restricted Stock Units shall become vested in full if the Participant’s Service with the Company is terminated by the Company without cause (as defined in the Plan) within 12 months after the date of such Change in Control (to the extent not previously vested in accordance with Section 4(a), Section 6(b), or Section 6(c)); provided, however, that if this award is not assumed, continued or substituted for an equivalent award by the acquirer in such Change in Control, then the Restricted Stock Units shall become vested in full upon the consummation of the Change in Control.  

5.Restrictions on Transferability.  No Restricted Stock Units may be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by the Participant, except by will or by the laws of descent and distribution. In the event that the Participant becomes legally incapacitated, the Participant’s rights with respect to the Restricted Stock Units shall be exercisable by the Participant’s legal guardian or legal representative.  The Restricted Stock Units shall not be subject to execution, attachment or similar process.  Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Restricted Stock Units contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon an Restricted Stock Units, shall be null and void and without effect. All shares of Common Stock underlying the Restricted Stock Units shall be subject to the transfer restrictions and rights of the Company set forth in the Company’s Articles of Incorporation. 
6.Termination of Service.

(a)In the event that the Participant’s Service with the Company terminates before all the Restricted Stock Units are vested for any reason other than a termination by the Company without cause (as defined in the Plan), or the Participant’s death or disability (as defined in the Plan), all unvested Restricted Stock Units, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates and the Participant shall not be entitled to any compensation or other amount with respect to such forfeited Restricted Stock Units.  For purposes hereof, “Service” means a continuous time period during which the Participant is at least one of the following:  an employee or a director of, or a consultant to, the Company.
(b)Except as provided in Section 4(b) hereof, in the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company is terminated by the Company without cause (as defined in the Plan): 
(i) if such termination occurs within twelve (12) months after completion of any merger, consolidation, reorganization or similar event of the Company or any of its subsidiaries, as a result of which (A) if the Company is the surviving entity, the Company issues securities representing more than thirty-five percent (35%) of the voting power of the voting securities of the Company prior to such transaction or (B) if the Company is not the surviving entity, the holders of the voting stock of the Company immediately prior to such merger, consolidation, reorganization or similar event do not directly or indirectly hold at least sixty-five percent (65%) of the aggregate voting power of the voting securities of the surviving entity, then the Restricted Stock Units shall become vested in full.
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(ii) if the preceding clause (i) does not apply, then that number of Restricted Stock Units that would otherwise become vested on the next Vesting Date shall become vested immediately as of the date of such termination of Service, and all other Restricted Stock Units which are not and have not become vested, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates without any consideration therefor.
(c)In the event that, before all the Restricted Stock Units are vested, the Participant’s Service with the Company terminates for reason of the Participant’s death or disability (as defined in the Plan), a Pro Rata Portion of the Restricted Stock Units shall become vested as of the date such Service terminates in addition to the portion of the Restricted Stock Units which have already become vested as of such date, and all other Restricted Stock Units which are not and have not become vested, together with any Dividend Equivalents related to such Restricted Stock Units, as set forth in Section 9 hereof, shall be forfeited as of the date such Service terminates.  For purposes hereof, “Pro Rata Portion” shall mean that number of Restricted Stock Units that would become vested on the next Vesting Date multiplied by a fraction, the denominator of which is 12 and the numerator of which is the number of completed months (measured from the day of the month of the Vesting Date to the same day of the following month) between the immediately preceding Vesting Date (or the Grant Date if there is no preceding Vesting Date) and the date of termination of Service.

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7.Settlement.

(a)All vested Restricted Stock Units shall be settled within 30 days following the applicable vesting date by the Company’s issuance and delivery to the Participant of a number of shares of Common Stock equal to the number of vested Restricted Stock Units or, in the discretion of the Administrator, by the payment of an amount in cash equal to the Fair Market Value of such shares of Common Stock (with Fair Market Value determined as of the applicable date of vesting).
(b)  Notwithstanding the above, if the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 7(a) hereof and the shares in such distribution are not subject to a trading plan to which the Recipient and the Company are parties adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, amended, pursuant to which at least a sufficient number of such shares are to be sold at the time of such distribution to cover the Participant’s tax obligations with respect to such distribution, such distribution shall instead be made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (1) the last business day of the calendar year in which the vesting in respect of such distribution occurred and (2) the 90th day after the date of the vesting in respect of such distribution (or, if such 90th day is not a business day, the immediately preceding business day).
(b) The Participant shall not be deemed for any purpose to be, or have rights as, a shareholder of the Company by virtue of the grant of Restricted Stock Units, unless and until shares of Common Stock are issued to the Participant in respect of such Restricted Stock Units.
8.Securities Matters.  The Company shall be under no obligation to effect the registration pursuant to the Securities Act of 1933, as amended (the “1933 Act”) of any interests in the Plan or any shares of Common Stock to be issued thereunder or to effect similar compliance under any state laws.  The Company shall not be obligated to cause to be issued any shares, whether by means of stock certificates or appropriate book entries, unless and until the Company is advised by its counsel that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded.  The Administrator may require, as a condition of the issuance of shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that any certificates bear such legends and any book entries be subject to such electronic coding, as the Administrator, in its sole discretion, deems necessary or desirable.  The Participant specifically understands and agrees that the shares of Common Stock, if and when issued, may be “restricted securities,” as that term is defined in Rule 144 under the 1933 Act and, accordingly, the Participant may be required to hold the shares indefinitely unless they are registered under such Act or an exemption from such registration is available.
9.Dividend Equivalents.  Notwithstanding anything herein, each Restricted Stock Unit granted hereunder is hereby granted in tandem with a corresponding dividend equivalent applicable to all types of dividends, whether extraordinary, ordinary, in cash, stock, or other property (a “Dividend Equivalent”), which Dividend Equivalent shall remain outstanding from the Grant Date until the earlier of the settlement or forfeiture of the Restricted Stock Unit to which it corresponds.  If a Restricted Stock Unit is forfeited, the corresponding Dividend Equivalent shall be forfeited as well.  At such time as a Restricted Stock Unit is settled pursuant to Section 7, the corresponding Dividend Equivalent shall be settled for a payment in cash equal to the aggregate value of dividends declared, if any, on the Common Stock underlying such Restricted Stock Unit; provided, however, if any dividends or distributions are paid in shares of Common Stock, the Administrator, in its discretion, may settle such Dividend Equivalent in cash or shares of Common Stock.  Dividend Equivalents shall not entitle the Participant to any payments relating to dividends declared after the earlier to occur of the settlement or forfeiture of the Restricted Stock Units underlying such Dividend Equivalents.
10.Delays or Omissions.  No delay or omission to exercise any right, power or remedy accruing to any party hereto upon any breach or default of any party under this Agreement, shall impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this 

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Agreement, or any waiver on the part of any party or any provisions or conditions of this Agreement, must be in a writing signed by such party and shall be effective only to the extent specifically set forth in such writing.
11.Right of Discharge Preserved.  Nothing in this Agreement shall confer upon the Participant the right to continue in the employ or other service of the Company, or affect any right which the Company may have to terminate such employment or service.
12.Integration.  This Agreement contains the entire understanding of the parties with respect to its subject matter.  There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein.  This Agreement, including, without limitation, the Plan, supersedes all prior agreements and understandings between the parties with respect to its subject matter.
13.Counterparts.  This Agreement may be executed in any number of original or facsimile or electronic PDF counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
14.Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to the provisions governing conflict of laws.
15.Forfeiture and Recapture.   The Restricted Stock Units and any Common Stock issued or cash paid with respect to the Restricted Stock Units will be subject to recoupment in accordance with any existing clawback or recoupment policy, or any clawback or recoupment policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law.  
16.Participant Acknowledgment.  The Participant hereby acknowledges receipt of a copy of the Plan.  The Participant hereby acknowledges that all decisions, determinations and interpretations of the Administrator in respect of the Plan, this Agreement and the Restricted Stock Units shall be final and conclusive.
17.Section 409A.  This Agreement is intended to comply with Section 409A of the Code (“Section 409A”) or an exemption thereunder and shall be construed and administered in accordance with Section 409A.  Notwithstanding any other provision of the Plan or this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption.  Any payments under this Agreement that may be excluded from Section 409A shall be excluded from Section 409A to the maximum extent possible.  Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event shall the Company or any of its subsidiaries or affiliates be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Participant on account of non-compliance with Section 409A.
18.Equitable Best Net.

(a) Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by the Participant (including, but not limited to, any payment or        benefit received in connection with a change in control of the Company or the termination of the Participant’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or     agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in    such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided, however, that the Total Payments will only be reduced if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income taxes on such reduced  Total Payments and after taking into account the phase out of itemized deductions and personal exemptions 

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attributable to such reduced Total Payments), is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income taxes on such Total Payments and the amount of Excise Tax to which the Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(b)In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order:  (i) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; (iii) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) will next be reduced; and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) will be next reduced pro-rata.  Any reductions made pursuant to each of clauses (i)-(v) above will be made in the following manner: first, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity not subject to Section 409A, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A as deferred compensation.
(c)For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax:  (i) no portion of the Total Payments the receipt or enjoyment of which the Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (ii) no portion of the Total Payments will be taken into account which, in the opinion of tax counsel (“Tax Counsel”) selected by the accounting firm which was, immediately prior to the change in control, the Company’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including, but not limited to, by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.  All determinations required by this Section 18 will be at the expense of the Company.
19.Notices.  Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chairman of the Board of Directors of the Company.  Any notice hereunder by the Company shall be given to the Participant in writing at the most recent address as Participant may have on file with the Company.

[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his own behalf, thereby representing that he has carefully read and understands this Agreement and the Plan as of the day and year first written above.
 
 
		GENCO SHIPPING & TRADING LIMITED

	 
	 

	 
	 

		By:
	/s/ Apostolos Zafolias

		Name:
	  Apostolos Zafolias

		Title:
	Chief Financial Officer

	 
	 

	 
	 /s/ Robert Hughes

		
		ROBERT HUGHES

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​ex_365367.htm

 

Exhibit 10.1

 

BANKFINANCIAL CORPORATION

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of May 3, 2022 (the “Effective Date”), by and between BankFinancial Corporation (the “Company”), a Maryland corporation having its principal office at 21110 South Western Avenue, Olympia Fields, Illinois, and F. Morgan Gasior (“Executive”).

 

WHEREAS, the Company and the Executive have previously entered into an Employment Agreement dated October 20, 2008, as amended (the “Initial Agreement”);

 

WHEREAS, the Company considers the continued availability of Executive’s services to be important to the successful management and conduct of the Company’s business, and wishes to assure the continued availability of Executive’s full-time services to the Company as provided in this Agreement; and

 

WHEREAS, Executive is willing to continue to serve in the employ of the Company on a full-time basis on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:

 

	
			1. 

				
			POSITION AND RESPONSIBILITIES.

			

 

(a)    Positions. During the period of employment established by Section 2(a) of this Agreement (the “Employment Period”), Executive agrees to serve, if elected or appointed to serve, as the President and the Chief Executive Officer of the Company and to such other positions or offices with the Company as the Board of Directors of the Company (the “Board”) elects or appoints the Executive.

 

(b)     Duties and Responsibilities. Executive shall have and exercise the same duties, responsibilities, privileges, powers and authority as Executive held and exercised on the Effective Date as the President of the Company and the Chief Executive Officer of the Company, and such additional duties, responsibilities, privileges, powers and authority commensurate with any other positions or offices with the Company to which the Board has previously, or may hereafter, elect or appoint the Executive.

 

(c)    Faithful Performance. Except for periods of paid time off taken in accordance with Section 3(f) hereof or following a Short-Term Disability Determination or a Long-Term Disability Determination made in accordance with Section 4(b) hereof, or for services performed for the Company’s Subsidiaries (as defined below). Executive shall devote substantially all of his business time, attention, skill and efforts during the Employment Period to the faithful performance of his duties hereunder, and shall not engage in any business or activity that interferes with the performance of such duties or conflicts with the business, affairs or interests of the Company or any Subsidiary; provided that, notwithstanding the foregoing, Executive may:

 

(1) perform his obligations under any employment agreement hereafter entered into between BankFinancial, National Association (the “Bank”) and Executive (the “the Bank Agreement”); 

 

(2) hold directorships, offices or other positions in one or more other organizations to the extent permitted by the Company’s Professional Responsibility Policy, as amended from time to time, or as otherwise approved by the Board; and

 

(3) engage in the occasional practice of law for personal clients provided that the same does not interfere with Executive’s obligation to devote substantially all of his business time, attention, skill and efforts to the faithful performance of his duties under this Agreement.

 

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			2. 

				
			TERM OF EMPLOYMENT.

			

 

(a)    Term. The Employment Period shall commence as of the Effective Date and shall thereafter continue for a period of three (3) years (the "Term") unless extended as provided herein. Unless the Agreement is terminated by the Executive in accordance with Section 5 of this Agreement, by reason of the Executive’s death, or by the Company in accordance with the provisions of Section 4 of this Agreement, the Term will extend automatically for an additional one (1) year on each anniversary of the Effective Date (the “Renewal Date”), so that the Term will be three (3) years. All references herein to the Employment Period shall mean, for all purposes of this Agreement, Executive’s Employment Period as initially established by, and as may subsequently be extended pursuant to, this Section 2(a).

 

(b)    Annual Review. Unless terminated by the Executive in accordance with Section 5 of this Agreement, by reason of the Executive’s death, or by the Company in accordance with the provisions of Section 4 of this Agreement, the Board or the Board’s Human Resources Committee (the “Human Resources Committee”) shall review this Agreement annually prior to each Renewal Date. A decision by or the failure of the Board or the Human Resources Committee to increase Executive’s Base Salary shall not constitute a breach of this Agreement or a “Good Reason” under Section 5(b) hereof. All decisions and actions of the Human Resources Committee pursuant to this Section 2(b) shall be subject to ratification by the Board only to the extent, if any, that ratification may be required by applicable laws and regulations.

 

	
			3.

				
			COMPENSATION AND OTHER BENEFITS.

			

 

(a)    Base Salary. During the Employment Period, the Company shall pay Executive the annual base salary that is reflected in the payroll records of the Company on the Effective Date (“Base Salary”), subject to any discretionary increases that the Board may hereafter elect to make pursuant to this Section 3(a). Any portion of annual Base Salary that Executive elects to defer under any deferred compensation arrangement that is now or hereafter maintained by the Company shall be considered part of Base Salary for the purposes of this Agreement. Executive’s Base Salary shall be payable in accordance with the regular payroll practices of the Company. The Board or the Human Resources Committee may increase Executive’s Base Salary at any time, but shall not reduce Executive’s Base Salary during the Employment Period without the Executive’s express prior written consent. All references herein to Base Salary shall mean, for all purposes of this Agreement, Executive’s Base Salary as initially established in, and as may subsequently be increased pursuant to, this Section 3(a).

 

(b)    Bonuses: Incentive Compensation. In addition to Executive’s Base Salary, Executive shall be entitled to any cash incentive compensation and bonuses to the extent earned pursuant to any plan or arrangement of the Company in which Executive is eligible to participate during the Employment Period, or to such other extent as the Board or the Human Resources Committee may award to Executive.

 

(c)    Other Compensation. The Company may provide such additional compensation to Executive in such form and in such amounts as may be approved by the Company from time to time, if any.

 

(d)    Special Allowances. The Company shall provide Executive with either the use of an automobile or an automobile allowance and either the use of a cellular telephone or a cellular telephone allowance during the Employment Period in accordance with the standard policies and practices of the Company and consistent with that provided to Executive as of the Effective Date; provided that the allowance for a given year will be paid as soon as administratively practicable and must be paid to the Executive not later than 2.5 months after the end of such year.

 

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(e)    Reimbursement of Expenses. The Company shall pay or reimburse Executive in accordance with the standard policies and practices of the Company for all reasonable expenses incurred by Executive during the Employment Period in connection with his employment hereunder or the business of the Company; provided that such payment or reimbursement will be paid as soon as administratively practicable and must occur not later than 2.5 months after the end of the year in which such expense was incurred.

 

(f)    Paid Time Off. Executive shall be entitled to receive not less than 176 hours of paid time off (“PTO”) per calendar year during the Employment Period in accordance with the PTO policies of the Company as then applicable to senior executive officers of the Company. Executive shall also be entitled to take time off during all legal holidays approved by the Company for Company employees generally. Executive shall receive his Base Salary and the other amounts and benefits provided for in this Agreement during all PTO periods and legal holidays. Except as permitted by the PTO policies of the Company, Executive shall not be entitled to receive any additional compensation for his failure to take PTO or accumulate unused PTO from one year to the next.

 

(g)    Other Benefits. The Company shall provide Executive with all other benefits that are now or hereafter provided uniformly to non-probationary full-time employees of the Company during the Employment Period, including, without limitation, benefits under any group life, medical, dental and vision insurance plans (collectively, the “Core Plans”) that are now or hereafter maintained by the Company, any post-retirement life insurance plan, any Section 125 Cafeteria Plan and any 401(k) plan (the “401(k) Plan”) that is now or hereafter sponsored by the Company, in each case subject to the plan requirements and limitations, and the Company’s policies concerning employee payments and contributions applicable to such plans. The Company shall not make any changes to any Core Plan that would materially and adversely affect Executive’s rights or benefits under such plan unless such changes are made applicable to all non-probationary full-time employees of the Company on a non-discriminatory basis. Nothing paid to Executive under any Core Plan or any 401(k) Plan shall be deemed to be in lieu of any other compensation that Executive is entitled to receive under this Agreement.

 

(h)    Executive Disability Insurance. The Company will make available to the Executive short-term and long-term disability insurance policies (each, an “Executive Disability Policy”).

 

(1)         Short-Term Disability Insurance. The Company will make available to the Executive a short-term disability policy which provides the Executive with short-term disability insurance payments in an amount up to sixty percent (60%) of the Executive’s Base Salary for the lesser of ninety (90) days or the time required to become eligible for disability payments pursuant to an Executive Long-Term Disability Policy (the “Executive Short-Term Disability Policy”).

 

(2)         Long-Term Disability Insurance. The Company will make available to the Executive a long-term disability policy which provides the Executive with long-term disability payments in an amount up to sixty percent (60%) of Executive’s Base Salary for the period of time set forth in the policy (the “Executive Long-Term Disability Policy”).

 

(3)         Reimbursement of Premiums; Duty to Cooperate. The Executive shall be responsible for the payment of all premiums on any Executive Disability Policy covering the Executive; provided, however, that the Bank shall provide Executive with an allowance, paid in accordance with the standard policies and practices of the Bank, in an amount sufficient, on an after-tax basis, to equal the premiums paid by Executive for all Executive Disability Policies providing coverage for the Executive during a calendar year. The Executive shall timely file all claims and take all other actions to obtain any benefits available to the Executive under any Executive Disability Policy and shall cooperate with the Bank in all respects as necessary or appropriate to enable the Bank to procure and maintain any Executive Disability Policy.

 

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(4)         Disability Insurance Adjustment. If Executive receives disability benefits under an Executive Disability Policy, or receives federal Social Security disability benefits (collectively, “Disability Payments”), the Company’s obligation to pay Executive his Base Salary shall be reduced, as of the date the Disability Payments are first received by Executive, to an amount equal to, on an after-tax basis, the difference between Executive’s Base Salary and the Disability Payments that Executive received during each applicable payroll period. Executive shall make reasonable good faith efforts to notify the Company of the receipt of Disability Payments.

 

(i)         Club Dues. In addition to any other compensation provided for under this Agreement, the Company shall pay Executive an amount sufficient, on an after-tax basis, to maintain his membership at the Olympia Fields Country Club, during the Employment Period; provided that any amount payable under this Section 3(i) must be made to Executive not later than 2.5 months after the end of the year in which such dues are paid.

 

(j)         Limit on Perquisites. Notwithstanding the foregoing or anything to the contrary in this Agreement: (1) the amounts payable to Executive pursuant to Section 3(d) and Section 3(i) of this Agreement in a given year shall not in the aggregate exceed ten percent (10%) of the cash compensation (defined as payments under Sections 3(a), 3(b) and 3(c)) and (2) the amounts payable to Executive pursuant to Section 3(i) of this Agreement in a given year shall not exceed $9,600. To the extent necessary, the amount payable under Section 3(i) shall be reduced by the amount necessary to comply with this Section 3(j).

 

	
			4.

				
			TERMINATION BY THE COMPANY.

			

 

(a)    Termination For Cause. The Board may terminate Executive’s employment with the Company “For Cause” at any time during the Employment Period, subject to the requirements set forth in this Section 4(a) and in Section 7 of this Agreement. A termination “For Cause” shall mean the Company’s termination of Executive’s full-time employment hereunder because of:

 

(1) Executive's willful misconduct or gross negligence involving a violation of a federal, state or local law, regulation or rule, that either causes or contributes to a material financial loss to the Company, or a Subsidiary;

 

(2) the Executive's arrest or indictment by a federal or state jurisdiction involving a misdemeanor or felony (other than minor traffic violations or similar offenses) which in the sole judgment of the Company's Board of Directors, has or could reasonably be expected to have a material adverse effect on the Company (including, but not limited to, injury to the Company's reputation with its customers or any federal Companying regulatory authority with jurisdiction over the Company);

 

(3) the Executive's violation of any policy or procedure of the Company due to the Executive's personal dishonesty;

 

(4) Executive's breach of his fiduciary duty to the Company or a Subsidiary;

 

(5) the issuance of a cease and desist, removal, prohibition order or a civil monetary penalty in excess of $25,000 against the Executive, or against the Company or a Subsidiary, due to the Executive's willful acts or omissions;

 

(6) the Executive's material breach of this Agreement.

 

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Notwithstanding the foregoing, Executive shall not be deemed to have been terminated For Cause unless and until: (i) there shall have been delivered to Executive a written notice of the Board’s intention to terminate Executive’s employment For Cause, specifying the alleged grounds for such termination; (ii) if the alleged grounds for such termination are a material breach of this Agreement, providing Executive with a reasonable opportunity to cure, if curable, any conduct or acts alleged to be such; (iii) following delivery of such written notice, Executive (together with any counsel selected by him) shall have been given a reasonable opportunity to present to the Board at a meeting called and held for or including that purpose Executive’s position regarding any dispute that exists regarding the alleged grounds for termination For Cause; and (iv) the Board shall adopt a resolution by the affirmative vote of not less than a majority of its members, finding in good faith and on the basis of reasonable evidence that Executive was guilty of conduct justifying a termination For Cause. The Notice of Termination (as defined in Section 7 below) issued in connection with the termination of Executive’s employment For Cause shall be accompanied by a copy of such resolution. Should a dispute arise concerning the Executive’s termination For Cause, any review of the For Cause termination in any judicial or arbitration proceeding will be limited to a determination of whether the Board acted in good faith and on the basis of reasonable evidence. The Board shall also be deemed to have terminated Executive’s employment with the Company For Cause if Executive’s employment with the Bank is terminated For Cause during the Employment Period in accordance with the requirements set forth in the Bank Agreement.

 

(b)    Termination for Disability. Upon a determination of Disability (a “Disability Determination”) by the Board, as defined herein, the Board may terminate the Executive's employment with the Company at any time after the date of such Disability Determination. The term “Disability” shall mean that (i) the Executive is unable to engage in any substantial gainful activity by reason of any medically-determinable physical or mental impairment that can be reasonably expected to result in death or last for a continuous period of not less than twelve (12) months or (ii) the Executive has, by reason of any medically-determinable physical or mental impairment that can be reasonably expected to result in death or last for a continuous period of not less than twelve (12) months, received disability payments under an Executive Long-Term Disability policy for a continuous period of not less than three (3) months. Following a Disability Determination, in lieu of terminating the Executive's employment with the Company, the Board may appoint one or more persons to serve as Acting President or Acting Chief Executive Officer of the Company to fulfill, on a temporary basis, the duties and responsibilities of the Executive. Any such temporary appointment shall be without prejudice to the Board's right to thereafter terminate the Executive's employment based on a Disability Determination pursuant to this Section 4(b). The Board shall also be deemed to have terminated Executive's employment with the Company if Executive's employment with the Bank is terminated during the Employment Period based on a Disability Determination. Nothing in this Section 4(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et. seq.

 

(c)    Termination Without Cause. The Board, in its discretion, may terminate Executive’s employment with the Company “Without Cause” at any time, subject to the notification requirements set forth in Section 7 hereof. A termination “Without Cause” shall mean:

 

         (1) the Board’s termination of Executive’s employment for any reason other than a termination For Cause, a termination based on a Disability Determination or a termination by reason of the Executive's death; or

 

(2) any of the following acts, omissions or events (each, an "Adverse Constructive Termination"), but only if taken or occurring during the Employment Period without Executive’s prior written express consent: (i) a decision by the Board, including a failure to elect or re-elect, or to appoint or re-appoint, the Executive to the offices of President of the Company, Chief Executive Officer of the Company or any other position or office with the Company to which the Board elected or appointed the Executive or (ii) except following a Disability Determination pursuant to Section 4(b) or following the issuance of an order pursuant to Section 13(c), any action by the Board to remove the Executive from, or to elect, appoint or assign any other individual to, the offices of President of the Company, Chief Executive Officer of the Company, or any other position or office to which the Board elected, appointed or assigned the Executive; provided, however, that any action, omission or event set forth in this Section 4(c)(2) which occurs after the issuance by the Board of a Notice of Termination pursuant to Section 4(a) shall not be deemed a termination Without Cause. The Board shall also be deemed to have terminated Executive’s employment with the Company Without Cause if there is a termination "Without Cause" during the Employment Period pursuant to the Bank Agreement.

 

5

 

 

	
			5.

				
			TERMINATION BY EXECUTIVE OR BY REASON OF DEATH.

			

 

(a)    Termination By Resignation. Executive may, in his discretion, terminate his employment with the Company “By Resignation” at any time during the Employment Period, subject to the notification requirements set forth in Section 7 hereof. A termination “By Resignation” shall mean Executive’s termination of his employment for any reason other than a “Good Reason” as such term is defined in Section 5(b) hereof. Executive shall also be deemed to have resigned his employment with the Company, and to have terminated his employment with the Company By Resignation, if Executive’s employment with the Bank is terminated during the Employment Period By Resignation in accordance with the requirements set forth in the Bank Agreement.

 

(b)    Termination For Good Reason. Executive may terminate Executive’s employment with the Company for “Good Reason,” subject to the requirements set forth in this Section 5(b) and the notification requirements set forth in Section 7 hereof. A termination for “Good Reason” shall mean Executive’s resignation from the Company’s employ during the Employment Period based upon any of the following acts, omissions or event, but only if taken or occurring during the Employment Period without Executive’s prior written express consent:

 

(1)    the Board’s relocation of Executive’s principal place of employment to a place that is more than fifteen (15) miles from the city limits of Chicago, IL;

 

(2)    a reduction in the Executive’s Base Salary, or a material reduction in the benefits that Executive is entitled to receive under Section 3(d) through Section 3(j) of this Agreement;

 

(3)    a material uncured breach of this Agreement by the Company;

 

(4)    a material diminution in Executive’s duties and responsibilities following the consummation of a “change of control” as defined pursuant to the laws and regulations of the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the Federal Reserve Board or by Section 409A of the Internal Revenue Code, as applicable. For the avoidance of doubt, the Executive shall not have the right to elect to terminate his employment for Good Reason solely due to a change in control of the Company or the Bank absent a qualifying act, omission or event pursuant to this Section 5(b).

 

(5)    Executive’s termination of his employment with the Bank for “Good Reason” as defined in the Bank Agreement;

 

Executive shall have the right to elect to terminate his employment for Good Reason only by giving the lead director of the Board, the Secretary of the Company and the Executive Vice President of the Human Resources Division a Notice of Termination (as defined below) within sixty (60) days after the act, omission or event giving rise to said right to elect. Notwithstanding the foregoing, Executive shall not have a right to elect to terminate his employment if: (i) the Company fully rescinds or cures, within ten (10) days after its receipt of Executive’s Notice of Termination, the act, omission or event giving rise to Executive’s right to elect to terminate his employment for Good Reason or (ii) the Company appoints an Acting President of the Company or an Acting Chief Executive Officer of the Company following a Disability Determination pursuant to Section 4(b) of this Agreement. Executive shall also be deemed to have terminated his employment with the Bank for Good Reason if Executive’s employment with the Company is terminated during the Employment Period for Good Reason in accordance with the requirements set forth in this Agreement.

 

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(c)    Termination Upon Death. Executive’s employment with the Company shall terminate immediately upon Executive’s death, without regard to the notification requirements set forth in Section 7 hereof.

 

	
			6. 

				
			FINANCIAL CONSEQUENCES OF TERMINATION.

			

 

(a)    Termination For Cause. In the event that Executive’s employment is terminated For Cause during the Employment Period, the Company shall pay Executive the unpaid balance of Executive’s Base Salary through the effective date of the termination of Executive’s employment (“Earned Salary”), but Executive shall receive no bonus or incentive compensation for the current year (all such amounts shall remain unearned and unvested), and shall receive no compensation or other benefits (including the compensation and benefits set forth in Section 3(a) through Section 3(j) and Section 6 hereof) for any period after the effective date of the termination of Executive’s employment; provided, however, that any rights of Executive under any applicable state and federal laws, including ERISA and COBRA, and any rights of Executive that have vested, whether by application of any state or federal law, the provisions of any contract, employee benefits plan or otherwise, shall not be terminated or prejudiced by a termination For Cause.

 

Upon Executive’s death, any payments due under this Section 6(a) shall be paid, as applicable, to Executive’s estate, trust or as otherwise required by law.

 

(b)    Termination for Disability. In the event that Executive’s employment is terminated during the Employment Period based on a Disability Determination, the Company and any successor to the Company and/or the Bank shall:

 

(1)    pay Executive his Earned Salary (as defined above);

 

(2)    pay Executive an amount equal to the annual average of any cash incentive compensation and bonus that Executive received during the immediately preceding two (2) fiscal years, prorated based on the number of days during such year that elapsed prior to the effective date of the termination of Executive’s employment (“Prorated Incentive Compensation”);

 

(3)    make, for the benefit of Executive, the matching 401(k) plan contribution that Executive is entitled to receive for the current year, prorated based on the number of days during such year that elapsed prior to the effective date of the termination of Executive’s employment (“Accrued Plan Contribution”);

 

(4)    subject to the disability insurance adjustment set forth in Section 3(h)(4) of this Agreement, pay Executive the Base Salary that Executive would have been paid pursuant to Section 3(a) hereof from the effective date of termination through the date the Employment Period would have expired if Executive’s employment had not been sooner terminated based on a Disability Determination;

 

(5)    provide Executive (and upon his death his surviving spouse and minor children, if any) with the same coverage under the Core Plans that Executive (and his surviving spouse and minor children, if any) would have been provided pursuant to Section 3(g) hereof from the effective date of termination through the date the Employment Period would have expired if Executive’s employment had not been sooner terminated based on a Disability Determination (subject to payment of the costs and contributions that such plans provide are the responsibility of the insured employee); and

 

(6)    provide Executive (and his surviving spouse and minor children, if any) with the health insurance continuation benefits set forth in Section 6(g), beginning on the date of the expiration of the health insurance coverage provided under the Core Plans pursuant to Section 6(b)(5), subject to the payment of the costs that are the responsibility of the Executive pursuant to the applicable health insurance plan or this Agreement).

 

Amounts payable under Section 6(b)(2), Section 6(b)(4) and Section 6(b)(6) of this Agreement shall be paid as provided in Section 6(i) and as may be required to be deferred pursuant to Section 24.

 

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(c)    Termination Without Cause. In the event that Executive’s employment is terminated Without Cause during the Employment Period, the Company and any successor to the Company and/or the Bank shall:

 

(1)    pay Executive his Earned Salary (as defined above);

 

(2)    pay Executive his Prorated Incentive Compensation (as defined above);

 

(3)    make, for the benefit of Executive, the Accrued Plan Contribution (as defined above);

 

(4)    pay Executive an amount equal to three (3) times Executive’s Average Annual Compensation (defined below);

 

(5)    provide Executive (and upon his death his surviving spouse and minor children, if any) with coverage under the Core Plans for a period of thirty-six (36) months from the effective date of the termination of Executive’s employment (subject to payment of the costs and contributions that such plans provide are the responsibility of the insured employee); and

 

(6)    provide Executive (and his spouse and minor children, if any) with the health insurance continuation benefits set forth in Section 6(i) beginning on the expiration date of the health insurance coverage provided under the Core Plans pursuant to Section 6(c)(5), subject to the payment of the costs that are the responsibility of the Executive pursuant to the applicable health insurance plan or this Agreement.

 

The term “Average Annual Compensation,” as used in this Section 6(c), shall mean the average of Executive’s annual Compensation based on the most recent three (3) taxable years, or if Executive was employed by the Company for less than three (3) full taxable years, based on such lesser number of taxable years or portions thereof as Executive was employed by the Company. The term “Compensation” shall mean, for the purposes of the foregoing definition as it relates to any tax year, all Base Salary paid pursuant to Section 3(a), cash incentive compensation or bonuses paid pursuant to Section 3(b) and any other compensation paid pursuant to Section 3(c).

 

Amounts payable under Section 6(c)(2), Section 6(c)(4) and Section 6(c)(6) of this Agreement shall be paid as provided in Section 6(i) and as may be required to be deferred pursuant to Section 24.

 

(d)    Termination By Resignation. In the event that Executive’s full-time employment is terminated By Resignation during the Employment Period, the Company shall pay Executive his Earned Salary (as defined above), but Executive shall receive no compensation or other benefits (including the compensation and benefits set forth in Section 3(a) through Section 3(j) hereof) for any period after the effective date of the termination of Executive’s employment; provided, however, that any rights of Executive under any applicable state and federal laws, including ERISA and COBRA, and any rights of Executive that have vested, whether by application of any applicable state or federal law, the provisions of any contract, employee benefits plan or otherwise, shall not be terminated or prejudiced by a termination By Resignation.

 

(e)    Termination for Good Reason. In the event that Executive’s employment is terminated by Executive for Good Reason during the Employment Period, the Company and any successor to the Company and/or the Bank shall:

 

(1)    pay Executive the same amounts that Executive would have been paid pursuant to Section 6(c)(1), Section 6(c)(2) and Section 6(c)(4) of this Agreement;

 

8

 

 

(2)    make, for the benefit of Executive, the same Accrued Plan Contribution (defined above) that the Company would have made pursuant to Section 6(c)(3) of this Agreement; and

 

(3)   provide Executive (and upon his death his surviving spouse and minor children, if any) with the same coverages under the Core Plans coverage that Executive (and his spouse and minor children, if any) would have been provided pursuant to Section 6(c)(5) (subject to the payment of the costs and contributions that such plans provide are the responsibility of the insured employee) and the same health insurance continuation benefits that Executive (and his spouse and minor children, if any) would have been provided pursuant Section 6(c)(6) (subject to the payment of the costs that are the responsibility of the Executive pursuant to the applicable health insurance plan or this Agreement) if Executive’s employment had been terminated by the Company Without Cause on the effective date of the termination of Executive’s employment.

 

Amounts payable under this Section 6(e) shall be paid as provided in Section 6(i) and as may be required to be deferred pursuant to Section 24.

 

(f)    Termination Upon Death. In the event Executive’s employment with the Company is terminated during the Employment Period by reason of Executive’s death, the Bank and any successor to the Company and/or the Bank shall:

 

(1)     pay Executive’s estate or trust, as applicable, the same amounts Executive would have been paid pursuant to Section 6(b)(1), Section 6(b(2) and Section 6(b)(4);

 

(2)    make, for the benefit of Executive, the same Accrued Plan Contribution the Company would have made pursuant to Section 6(b)(3); and

 

(3)    provide his surviving spouse and minor children, if any, with the same coverages under the Core Plans that they would have been provided pursuant to Section 6(b)(5) (subject to the payment of the costs and contributions that such plans provide are the responsibility of the insured employee) and the same health insurance continuation coverages they would have been provided pursuant to Section 6(b)(6) (and his spouse and minor children, if any) would have been provided pursuant Section 6(c)(6) (subject to the payment of the costs that are the responsibility of the Executive pursuant to the applicable health insurance plan or this Agreement) if Executive’s employment had been terminated by the Company based on a Disability Determination on the date of Executive’s death.

 

Amounts payable under this Section 6(f) shall be paid as provided in Section 6(i).

 

(g)    Post-Employment Health Insurance. In the event of Executive’s termination of employment pursuant to Section 4(b), Section 4(c), Section 5(b) or Section 5(c), beginning on the expiration date of any health insurance coverage under the Core Plans provided pursuant to Section 6 hereof and continuing through the earlier of the date on which Executive becomes eligible for comparable coverage under another group health insurance plan with no pre-existing condition limitation or exclusion or the date on which Executive becomes entitled to benefits under Medicare (and the date on which the Executive’s spouse becomes entitled to benefits under Medicare with respect to the right to continued coverage for such spouse):

 

(1)         Continued Group Health Insurance Coverage. Executive (and any qualified dependents, including Executive’s spouse) shall be entitled to group health insurance coverage. Such coverage shall be provided under the health insurance plan in which the “named executive officers” (as defined in 17 C.F.R. 229.402(a)(3), as amended) of the Bank and the Company (including the named executive officers of any successor to the Company and/or the Bank) participate (as such plan is then in effect and as it may be modified, replaced or substituted at any time and from time to time during the period of coverage contemplated in this Section 6(g)), to the same extent as Executive was participating in such health insurance plan immediately prior to termination, at the Executive’s cost, which cost shall be equal to the amount paid by the Executive for health insurance coverage immediately prior to the Executive’s termination.

 

9

 

 

(2)         Replacement Health Insurance Coverage. If such health insurance plan set forth in Section 6(g)(1) above refuses to insure Executive or allow Executive to be a participant in the health insurance plan for any reason, the Company and any successor to the Company and/or the Bank shall have the affirmative obligation to promptly arrange and provide (without any gap in coverage) equivalent replacement health insurance coverage for Executive and his dependents (including his spouse) through a different reputable and financially sound insurance company acceptable to Executive. In such event, Executive shall pay or contribute to the premiums for such replacement health insurance coverage in an amount equal to the amount paid by the Executive for health insurance coverage immediately prior to the Executive's termination. Executive shall promptly notify the Company if Executive becomes eligible for coverage under another group health plan with no pre-existing condition limitation or exclusion or Executive becomes entitled to full benefits under Medicare.

 

(3)         Contingent Health Insurance Stipend. If Executive declines the replacement health insurance coverage arranged provided pursuant to Section 6(g)(2) above, the Company and any successor to the Company and/or the Bank has the affirmative obligation to pay Executive a Contingent Health Insurance Stipend. The amount of the Contingent Health Insurance Stipend shall be (i) the amount of the bi-weekly employer contribution (if any) that the Company and any successor of the Bank and/or the Company was making toward the premium for any group insurance coverage (if any) that was in effect for Executive and Executive’s eligible family members under the Company’s group insurance plan on the last day of Executive’s employment, multiplied by (ii) the number of bi-weekly periods until the Executive is eligible for Medicare. The Contingent Health Insurance Stipend shall be paid in a lump sum no later than the date on which the final payment of Executive’s Earned Salary is required to be paid.

 

Nothing contained in this section is intended to limit or otherwise modify benefits that the Executive may otherwise be entitled to under this Agreement with respect to the Core Plans.

 

(h)         Rights Not Prejudiced. The Company may terminate Executive’s employment at any time, but any termination by the Company, other than For Cause, shall not prejudice any right of Executive to compensation or other benefits under this Agreement. Executive shall not have the right to receive compensation or other benefits for any period after a termination For Cause as provided in Section 6(a) hereof.

 

(i)         General Release and Time of Payment. In consideration of the Company’s agreements with respect to the monetary payments and other benefits provided for in Section 6 of this Agreement (which payments and benefits exceed the nature and scope of that to which Executive would have been legally entitled to receive absent this Agreement), and as a condition precedent to Executive’s receipt of such payments and other benefits, Executive (or in the event of Executive’s death, Executive’s executor, trustee, administrator or personal representative, as applicable), shall, execute and deliver to the Company a general release in favor of the Company and its Subsidiaries (as defined below) not earlier than twenty-one (21) and not later than twenty-five (25) days after Executive’s termination of employment, releasing all claims, demands, causes of actions and liabilities arising out of this Agreement, Executive’s employment or the termination thereof, including, but not limited to, claims, demands, causes of action and liabilities for wages, back pay, front pay, attorney’s fees, other sums of money, insurance, benefits, or contracts; and all claims, demands, causes of actions and liabilities arising out of or under the statutory, common law or other rules, orders or regulations of the United States or any State or political subdivision thereof, whether now existed or hereinafter enacted or adopted, including the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act, and subject to the applicable waiting or rescission periods thereunder, the Company shall pay the amounts due under the applicable Section 6(b), Section 6(c), Section 6(e) or Section 6(f) in one (1) lump sum on the sixtieth (60th) day following the date of Executive’s termination of employment. Notwithstanding the foregoing or anything to the contrary herein, the general release shall not release, and shall expressly reserve, any unperformed obligations of the Company under this Agreement, or of the Bank under the Bank Agreement, to Executive.

 

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			7. 

				
			NOTICE OF TERMINATION.

			

 

Any termination or purported termination by the Company or Executive of Executive’s employment with the Company shall be communicated by a Notice of Termination to the other party. A “Notice of Termination” shall mean a written notice that shall set forth the effective date of the termination of Executive’s employment, identify the specific termination provision(s) in this Agreement relied upon, and set forth in reasonable detail the facts and circumstances claimed to provide a basis for the termination of Executive’s employment under the provision so identified. The party issuing the Notice of Termination shall cause it to be delivered to the other party either in person, by United States mail or via a reputable commercial delivery service (a) not less than thirty (30) days prior to the effective date of termination in the case of a termination Without Cause or By Resignation or based on a Disability Determination; (b) not less than thirty (30) days prior to the effective date of termination and as otherwise provided in Section 4(a) hereof in the case of a termination For Cause; and (c) as provided in Section 5(b) hereof in the case of a termination for Good Reason. Notices to the Company shall be addressed and delivered to the Company’s corporate offices in Burr Ridge, Illinois or any successor location, to the attention of the lead director of the Board and the Secretary of the Company, with copies of the notice concurrently delivered to the Executive Vice President of the Human Resources Division of the Company.

 

Notices to the Executive shall be sent to the address set forth below the Executive’s signature on this Agreement, or to such other address as Executive may hereafter designate in a written notice given to the Company and its counsel.

 

	
			8. 

				
			NON-SOLICITATION AND OTHER AGREEMENTS.

			

 

(a)    Non-Solicitation. Executive shall not, during the Term and the Non-Solicitation Period (as hereinafter defined), directly or indirectly, either as an individual for Executive’s own account, or as an employee, agent, independent contractor or consultant of or for any person or Legal Entity, or as an officer, director, stockholder, owner or member of any Legal Entity:

 

(1) call upon or solicit for the purpose of obtaining Business from any person or Legal Entity that is a customer of the Company for which the Executive had responsibility, or with which the Executive had business-related contact on behalf of the Company or a Subsidiary, or about which the Executive had access to Protected Confidential Information or Proprietary Information (a “Protected Customer”) during the two (2) year period prior to the termination date of the Executive's employment;

 

(2) divert or take away from the Company or a Subsidiary any existing Business between the Company or a Subsidiary, and a Protected Customer;

 

(3) call upon or solicit for the purpose of obtaining Business from any person or Legal Entity that directly or indirectly referred Business to the Company or a Subsidiary, or with which the Executive had business-related contact, or about which the Executive had access to Proprietary Information (a “Protected Referral Source”), during the two (2) year period prior to the termination of Executive’s employment;

 

(4) divert or take away from the Company or a Subsidiary any existing Business between the Company or a Subsidiary, and a Protected Referral Source;

 

(5) solicit or induce any Protected Customer or Protected Referral Source to terminate or not renew or continue any Business with the Company or any Subsidiary, or to terminate or not renew or continue any contractual relationship with the Company or any Subsidiary;

 

(6) solicit for hire, or assist or cause any person or Legal Entity with which Executive is affiliated or associated in soliciting for hire, any person employed by the Company or a Subsidiary on the termination date of the Executive’s employment, with whom the Executive had responsibility, or with whom the Executive had business-related contact, or about whom the Executive had Proprietary Information (a “Protected Employee”);

 

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(7) solicit or induce any Protected Employee to terminate his or her employment with the Company or any Subsidiary; or

 

(8) attempt to do, or conspire with or aid and abet others in doing or attempting to do, any of the foregoing.

 

The term “Non-Solicitation Period” shall mean, except as provided in Section 8(f) below, the greater of (i) twelve (12) months or (ii) the period of time in which the Executive receives any payments or benefits under this Agreement subsequent to the termination date of the Executive's employment. The Non-Solicitation Period shall be extended by the period of time, as limited by applicable law, in which the Executive is in material breach of any provision of this Section 8 of the Agreement and the Company seeks injunctive or other equitable relief to enforce the Agreement.

 

(b)    Confidentiality. Executive recognizes and acknowledges that personal information and knowledge thereof regarding the customers of the Company and its Subsidiaries are protected by state and federal law and the Privacy Principles of the Company and its Subsidiaries, as amended from time to time (collectively, “Protected Customer Information”), and that customer lists, trade secrets, nonpublic financial information, and nonpublic past, present, planned or considered business activities of the Company and its Affiliates and any plans for such business activities (collectively, “Proprietary Information”) are valuable, special and unique assets of the Company.

 

(1)       Duty To Protect Confidential Information. Executive will not, during or after the Employment Period, disclose any Protected Customer Information or Proprietary Information or his knowledge thereof to any person or Legal Entity other than the Company or any Subsidiary, or use any Protected Customer Information or Proprietary Information to the detriment of the Company, any Subsidiary or any of their respective customers or employees, or for the benefit of himself, any person or any Legal Entity, for any reason or purpose whatsoever.

 

(2)         Permitted Disclosures. Notwithstanding the foregoing, Executive may: (i) disclose and use information that becomes publicly known through no wrongful act or omission of Executive, but only if the disclosure of such information is not restricted by any applicable state or federal laws or regulations and the information is not received from a person who was or is bound by an obligation not to disclose such information; (ii) disclose and use any financial, Companying, business or economic principles, concepts or ideas that do not constitute Protected Customer Information or Proprietary Information; (iii) disclose any information regarding the business activities of the Company or its Subsidiary to a governmental authority of competent jurisdiction pursuant to a formal written request made by such governmental authority or any applicable law or regulation; (iv) disclose any information required to be disclosed by Executive pursuant to an order or judicial process issued by a court of competent jurisdiction; and (v) make any legally protected or required disclosure to the Board; provided, however, that to the extent not prohibited by applicable state or federal law, Executive shall provide the Company or the applicable Subsidiary with at least ten (10) days’ prior written notice of his intention to disclose information pursuant to subparagraph (iii) or (iv) of this Section 8(c).

 

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(c)    Cooperation in Legal Proceedings. During the Employment Period and for a period equal to three (3) years from the effective date of the termination of Executive’s employment, Executive shall, upon reasonable notice, furnish such cooperation, information and assistance to the Company as may reasonably be required by the Company or any Subsidiary of the Company in connection with any pending or threatened judicial, administrative or arbitration proceeding or any investigation that is based on events or circumstances in which Executive had personal knowledge or involvement and in which the Company or any of its Subsidiaries is or may become a party or target, except for proceedings instituted against Executive by the Company or any governmental or regulatory authority, or proceedings instituted by Executive against the Company to enforce the terms of this Agreement or any other duties or obligations of the Company to Executive. The Company, or if applicable, its Subsidiary, shall reimburse Executive for all reasonable costs and expenses incurred by Executive in providing such cooperation, information and assistance. Unless Executive’s appearance is compelled by a court order or other legal process, Executive shall not be obligated to devote more than two (2) days per calendar month in fulfilling his obligations under this Section 8(d), and the Company or its Subsidiary shall make reasonable accommodations to avoid interfering with any duties that Executive may then have to any client or other employer.

 

Notwithstanding anything to the contrary in this Section 8(d) or this Agreement, while Executive will be encouraged to voluntarily provide sworn testimony where appropriate. Executive shall have no duty to provide sworn testimony in any judicial, arbitration or discovery proceeding except as may be required by any rule of procedure, subpoena or judicial process applicable to or enforceable against Executive, and in no case shall Executive be required to provide any testimony that, in the judgment of Executive, might or could expose him to civil liability or compromise his privilege against self-incrimination. Any testimony given by Executive in such a proceeding shall be truthful, but in no event shall the content of any testimony given by Executive in such a proceeding constitute a breach of this Section 8(d) or any other provision of this Agreement. Executive may condition his providing of assistance and testimony hereunder on his receipt of an undertaking from the Company that it will indemnify him for such actions to the fullest extent permitted by applicable law.

 

(d)    Remedies. Executive and the Company stipulate that irreparable injury will result to the Company and its Subsidiaries and their business and property in the event of Executive’s violation of any provision of this Section 8, and agree that, in the event of any such violation by Executive, the Company, and if applicable, its Subsidiaries, will be entitled, in addition to any other rights, remedies and money damages that may then be available, to injunctive relief to restrain the violation hereof by Executive, Executive’s partners, agents, servants, employees and all persons or Legal Entities acting for, under the direction or control of or in concert with Executive, and to such other equitable remedies as may then be available.

 

Nothing herein will be construed as prohibiting the Company or any Subsidiary from pursuing any other remedies available to the Company or such Subsidiary for such breach or threatened breach, including the recovery of money damages from Executive, or any other party.

 

(e)    Adjustment of Non-Solicitation Period. The Non-Solicitation Period shall be reduced to six (6) months, but only with respect to the restrictions set forth in Section 8(a)(1) and Section 8(a)(3) of this Agreement (and the prohibitions in Section 8(a)(8) against, aiding, abetting, inducing or conspiring with others to violate those restrictions), if the Board terminates this Agreement Without Cause or Executive terminates this Agreement for Good Reason, provided that, in either case, Executive executes and delivers to the Company a writing, acceptable in form and substance to the Company, that releases and waives any and all obligations that the Company may have under Section 6(c) or Section 6(e) of this Agreement after the expiration of such six (6) month Non-Solicitation Period.

 

	
			9. 

				
			SOURCE OF FUNDS: ALLOCATION.

			

 

All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Company; provided, however, that to the extent that any cash compensation payments and benefits provided for in this Agreement are paid to or received by Executive from the Bank, whether pursuant to the Bank Agreement or otherwise, such cash compensation payments and benefits paid by the Bank shall be subtracted from any amounts due simultaneously to Executive under this Agreement. Payments due Executive pursuant to this Agreement and the Bank Agreement shall be allocated in proportion to the services rendered and time expended on such activities by Executive as determined by the Bank and the Company on a quarterly basis or as required by law.

 

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			10.

				
			EFFECT ON PRIOR AGREEMENTS AND EXISTING PLANS.

			

 

This Agreement contains the entire understanding between the parties hereto with respect to Executive’s employment with the Company, and supersedes the Initial Agreement, any prior offer of employment, employment letter or other agreements or understandings between the Company and Executive, whether oral or written, with respect thereto, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to Executive of a kind provided for in any Core Plan or any separate plan or program established for the benefit of Company employees generally, or any separate plan or program established after the date of this Agreement for the specific benefit of Executive. No provision of this Agreement shall be interpreted to mean that Executive is subject to receiving fewer benefits than those available to him without reference to this Agreement.

 

	
			11.

				
			MODIFICATION AND WAIVER.

			

 

This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto and approved by the Company; provided that in no circumstances may this Agreement be modified or amended if such modification or amendment would not be permitted under Code Section 409A. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other than that specifically waived. Notwithstanding the foregoing, in the event that any provision or the implementation of any provision of this Agreement is finally determined to violate any applicable law, regulation or other regulatory requirement that is binding on the Company, or to constitute an unsafe and unsound Companying practice, Executive and the Company agree to amend such provision to the extent necessary to remove or eliminate such violation or unsafe and unsound Companying practice, and such provision shall then be applicable in the amended form.

 

	
			12.

				
			NO ATTACHMENT.

			

 

Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and of no effect.

 

	 	
			13.

				
			REQUIRED PROVISIONS.

			

 

In the event any of the foregoing provisions of this Agreement conflict with the provisions of this Section 13, this Section 13 shall prevail.

 

(a)    Company Capital Limitations. Notwithstanding any other provisions of this Agreement and to the extent permitted under Code Section 409A:

 

(1) in the event the Company is not in compliance with its minimum capital requirements as established by applicable federal laws and regulations at the time any payment becomes due to Executive pursuant to Section 6 hereof, the Company shall be entitled to defer such payment until such time as the Company is in compliance with such minimum capital requirements; and

 

(2) if the Company is in compliance with such minimum capital requirements at the time any such payment becomes due, but the making of any such payment would cause the Company’s capital to fall below such minimum capital requirements, the Company shall be entitled to reduce the amount of such payment as necessary to enable the Company to remain in compliance with such minimum capital requirements, subject to the Company’s obligation to pay the amount of any such reductions (or any portion thereof) as soon as such amount can be paid without causing the Company’s capital to fall below such minimum capital requirements.

 

14

 

 

(b)      Suspension; Temporary Removal. To the extent permitted by Code Section 409A, if Executive is suspended and/or temporarily prohibited from participating in the conduct of the affairs of the Company or an Affiliate by a notice served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1818(e)(3) or (g)(1), the Company’s obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Company may in its discretion: (1) pay Executive all or part of the compensation withheld while the contract obligations were suspended; and (2) reinstate (in whole or in part) any of the obligations which were suspended.

 

(c)      Removal; Prohibition. If Executive is removed and/or permanently prohibited from participating in the conduct of the affairs of the Company or an Affiliate by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12U.S.C. Section 181 8(e)(4) or (g)(1), all obligations of the Company under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

 

(d)    Bank in Default. If the Bank is in default as defined in Section 3(x)(l) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1813(x)(l), all obligations of the Bank under this Agreement shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

 

(e)    Regulatory Termination. All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the institution: (1) by the Comptroller of the Currency (or his designee) at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Company under the authority contained in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1823(c); or (2) by the Comptroller of the Currency (or his designee) at the time the Comptroller (or his designee) approves a supervisory merger to resolve problems related to the operations of the Company or when the Company is determined by the Comptroller to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by such action.

 

(f)    Certain Payments. Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R. §7.2014.

 

	
			14.

				
			WITHHOLDING.

			

 

All payments required to be made to Executive under this Agreement shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company reasonably determines should be withheld pursuant to any applicable state or federal law or regulation.

 

	
			15. 

				
			SEVERABILITY.

			

 

If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision that is not held invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect. Without limiting the foregoing, if any provisions of Section 8 of this Agreement are held to be unenforceable because of the scope, duration or area of applicability, the court making such determination shall have the power to modify such scope, duration or area of applicability, or all of them, and such provision shall then be applicable in the modified form.

 

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			16. 

				
			HEADINGS FOR REFERENCE ONLY.

			

 

The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

 

	
			17. 

				
			GOVERNING LAW.

			

 

The validity, interpretation, performance and enforcement of this Agreement shall be governed by the internal laws of the State of Illinois, without regard or reference to any principles of conflicts of law of the State of Illinois, except to the extent that such internal laws are preempted by the laws of the United States or the regulations of the Comptroller of the Currency or any other agency of the United States.

 

	
			18. 

				
			DISPUTE RESOLUTION.

			

 

(a)    Arbitration. Except for claims, cases or controversies based on or arising out of Section 8 of this Agreement (“Section 8 Claims”) and as otherwise prohibited by law, all claims, cases or controversies arising out of or in connection with either this Agreement, Executive’s employment with the Company or the termination or cessation of such employment (collectively, “Employment Claims”), whether asserted against the Company, a Subsidiary (as defined below), and/or an officer, director or employee of the Company or an Affiliate, and whether based on this Agreement or existing or subsequently enacted or adopted statutory or common law doctrines, shall be finally settled by arbitration conducted by JAMS Mediation, Arbitration and ADR Services or a successor entity (“JAMS”) in Chicago, Illinois, in accordance with the then applicable Employment Arbitration Rules and Procedures of JAMS, or in the event JAMS or a successor in interest of JAMS no longer provides arbitration services, by the American Arbitration Association or a successor entity (the “AAA”) in accordance with its then applicable National Rules for the Resolution of Employment Disputes. The costs and fees imposed by JAMS or the AAA for conducting such arbitration shall be borne equally by Executive and the Company unless the arbitrator determines otherwise. The award rendered by the arbitrator(s) shall be final and binding upon Executive, the Company and any other parties to such proceeding, and may be entered and enforced as a judgment in any court of competent jurisdiction. The Employment Claims subject to arbitration hereunder shall include, but shall not be limited to, those arising under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the law of contract, the law of tort, and other claims under federal, state or local statutes, ordinances and rules or the common law. Executive and the Company acknowledge that by agreeing to arbitration they are relinquishing all rights they have to sue each other for Employment Claims that do not constitute Section 8 Claims and any rights that they may have to a jury trial on Employment Claims that do not constitute Section 8 Claims.

 

(b)    Section 8 Claims. All Section 8 Claims shall be brought, commenced and maintained only in a state or federal court of competent jurisdiction situated in the County of Cook or the County of DuPage, State of Illinois. Executive and the Company each hereby:

 

(1) consents to the exercise of jurisdiction over his or its person and property by any court of competent jurisdiction situated in the County of Cook or the County of DuPage, State of Illinois for the enforcement of any claim, case or controversy based on or arising under Section 8 of this Agreement;

 

(2) waives any and all personal or other rights to object to such jurisdiction for such purposes; and

 

(3) waives any objection which it may have to the laying of venue of any such action, suit or proceeding in any such court.

 

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			19. 

				
			INDEMNIFICATION AND INSURANCE.

			

 

(a)    General. The Company shall, subject to the conditions and findings set forth in 12 C.F.R. §7.2014, indemnify Executive, and shall promptly pay to Executive, in advance of the final disposition of Proceeding to which Executive is a Party by reason of his service in his Official Capacity, the reasonable Expenses incurred by Executive in such Proceeding, in each case to the maximum extent permitted or required by Maryland law as in effect on the date hereof and as amended from time to time, including, without limitation, Section 2-418 of the Maryland General Corporation Law (the “MGCL”); provided that: (i) the Company shall not be obligated to pay or advance any amounts otherwise indemnifiable or payable hereunder if and to the extent that Executive has otherwise actually received such payment or advance under any insurance policy or any other contract or agreement to which Executive is a Party, including, without limitation, the Bank Agreement or any directors’ and officers’ liability insurance policy maintained by the Company or any affiliate of the Company; and (ii) the Company shall only pay and advance Expenses under procedures permitted or required by applicable law. For the purposes of this Section 19, the terms “Expenses,” “Official Capacity,” “Party” and “Proceeding” shall have the meanings provided in Section 2-418 of the MGCL, as in effect on the date hereof.

 

(b)    Successful Defense of Claims. If a claim for indemnification under this Section 19 is based on Executive’s successful defense of a Proceeding, Executive shall be deemed to have been successful in the defense of a claim, issue or matter asserted in such Proceeding if it is dismissed pursuant to a settlement agreement that is approved by the Company in writing, or if such claim, issue or matter is otherwise dismissed, on the merits or otherwise, with or without prejudice. If Executive is successful in the defense of one or more but less than all claims, issues or matters asserted or arising in a Proceeding, the Company shall indemnify Executive for all Expenses actually and reasonably incurred by Executive or on his behalf in connection with each claim, issue or matter that Executive has successfully defended. In such event, Expenses shall be allocated on a reasonable and proportionate basis among the claims, issues and matters that have been successfully defended, and among any that have not been successfully defended.

 

(c)    Procedures. To seek indemnification or the advance of Expenses hereunder, Executive shall submit to the Chairman of the Human Resources Committee of the Company and the Chief Executive Officer of the Company a written request therefor, which shall:

 

(1) describe with reasonable particularity the claim that has been made or threatened against Executive and the reasons why Executive believes that it is lawful and appropriate for the Company to indemnify and/or pay, advance or reimburse Expenses to Executive in connection therewith; and

 

(2) contain or include such documentation and information as is reasonably available to Executive and is reasonably necessary to enable the Board of Directors or a committee thereof, or if applicable, special legal counsel to the Board of Directors, to determine whether to approve, deny or otherwise respond to such request. Such determination shall be made and communicated to Executive in writing as soon as reasonably practicable, but in no case more than thirty (30) days of the Company’s receipt of Executive’s request. In any Proceeding commenced to enforce Executive’s entitlement to indemnification or the advance of Expenses, the Company shall have the burden of proving that Executive is not entitled to indemnification or the advance of Expenses, as the case may be. All other procedures with respect to indemnification and the payment, advancement or reimbursement of Expenses in connection with a Proceeding to which Executive is a Party by reason of his service in his Official Capacity shall be as provided in the Company’s charter or bylaws and Maryland law.

 

(d)    Survival of Rights and Benefits. The rights and benefits provided to Executive under this Section 19 shall survive the termination or expiration of this Agreement and shall not be deemed to be exclusive of any other rights or benefits to which Executive may at any time be entitled under Maryland law or any other applicable law, the charter or bylaws of the Company, or any other agreement to which Executive is a Party. No amendment, alteration or repeal of any applicable Maryland law or any provision of the charter or bylaws of the Company shall:

 

17

 

 

(1) have the effect of reducing, limiting or restricting the rights and benefits that were available to Executive under this Section 19 based on such law or provision as in effect on the date hereof; or

 

(2) limit or restrict any right of or benefit to Executive hereunder in respect of any action taken or omitted by Executive in his official capacity prior to such amendment, alteration or repeal.

 

(e)    Regulatory Compliance. Any payments made to Executive pursuant to this Section 19 shall be subject to and conditioned upon compliance with the applicable provisions of 12 U.S.C. §1828(k), 12 C.F.R. Part 359 and 12 C.F.R. §7.2014.

 

	
			20. 

				
			COSTS AND LEGAL FEES.

			

 

(a)    Payment to Executive. Except as provided in Section 18(a) hereof, in the event any dispute or controversy arising under or in connection with any provision of this Agreement other than Section 8 hereof is resolved on the merits in favor of Executive pursuant to an arbitration award or final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected), the Company shall be obligated to pay Executive, within thirty (30) days after the date on which such judgment becomes final and not subject to further appeal, all reasonable costs and legal fees paid or incurred by Executive in connection with such dispute or controversy.

 

(b)    Payment to Company. Except as provided in Section 18(a) hereof, in the event any dispute or controversy arising under or in connection with Section 8 of this Agreement is resolved on the merits in favor of the Company pursuant to an arbitration award or final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected), Executive shall be obligated to pay the Company, within thirty (30) days after the date on which such judgment becomes final and not subject to further appeal, all reasonable costs and legal fees paid or incurred by the Company in connection with such dispute or controversy.

 

	
			21.

				
			NO CONFLICTS.

			

 

Executive has heretofore advised the Company and hereby represents that the execution and delivery of this Agreement and the performance of the obligations hereunder do not and will not conflict with, or result in any default, violation or breach of any contract or agreement to which Executive is a party, or of any legal duty of Executive.

 

	
			22. 

				
			SURVIVAL.

			

 

The rights and obligations of Executive and the Company under Sections 6, 8, 13, 17, 18, 19 and 20 of this Agreement shall survive the termination of Executive’s employment and the termination or expiration of this Agreement. All other rights and obligations of Executive and the Company shall survive the termination or expiration of this Agreement only to the extent that they expressly contemplate future performance and remain unperformed.

 

	
			23. 

				
			SUCCESSORS AND ASSIGNS.

			

 

(a)    Continuing Rights and Obligations. This Agreement shall be binding upon, and inure to the benefit of. Executive and his heirs, executors, administrators and assigns, and the Company and its successors and assigns. The Company shall require any of its successors or assigns, whether resulting from a purchase, merger, consolidation, reorganization, conversion or a transfer of all or substantially all of its business or assets, to expressly and unconditionally to assume and agree to perform its obligations under this Agreement, in the same manner and to the same extent that it would be required to perform such obligations if no such succession or assignment had occurred.

 

18

 

 

(b)    Payments to Estate or Trust. Any amounts due Executive hereunder shall be paid to Executive’s estate in the event of Executive’s death except as expressly provided herein; provided that, notwithstanding the foregoing. Executive may, in his discretion, provide for the payment of some or all of such amounts to a trust established by Executive. In the event that Executive desires that such amounts be paid to a trust. Executive shall notify the Company of such intention in writing and comply with any requirements of applicable law.

 

	
			24. 

				
			CODE SECTION 409A

			

 

(a)    Code Section 409A Election & Amendment. To the extent that any of the terms and conditions contained herein which were modified by this amended and restated agreement constitute an amendment or modification of the time or manner of payment under a non-qualified deferred compensation plan (as defined under Code Section 409A), then to the extent necessary under the transitional guidance under Internal Revenue Service Notice 2007-86, this Agreement constitutes an amendment to, and a new election under, such deferred compensation plan, in order to properly modify the time or manner of payment consistent with such guidance,

 

(b)    Code Section 409A Compliance Principles. It is intended that the Agreement shall comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject Executive to the payment of additional taxes and interest under Code Section 409A. In furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Code Section 409A would result in the Executive being subject to payment of additional income taxes or interest under Code Section 409A, the parties agree to amend the Agreement to maintain to the maximum extent practicable the original intent of the Agreement while avoiding the application of such taxes or interest under Code Section 409A.

 

(c)    Requirements for "Specified Employee". Notwithstanding any provision in the Agreement to the contrary if, as of the effective date of Executive’s termination of employment, he is a “Specified Employee,” then, only to the extent required pursuant to Section 409A(a)(2)(B)(i), payments due under this Agreement which are deemed to be deferred compensation shall be subject to a six (6) month delay following the Executive’s separation from service. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments and, accordingly, the aforementioned deferral shall only apply to separate payments which would occur during the six (6) month deferral period and all other payments shall be unaffected. All delayed payments shall be accumulated and paid in a lump-sum catch-up payment as of the first day of the seventh-month following separation from service (or, if earlier, the date of death of the Executive) with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six-month period following the termination shall be paid to the Executive in accordance with the payment schedule established herein.

 

(d)    Definition of “Specified Employee”. The term "Specified Employee" shall mean any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Company based upon the 12-month period ending on each December 31st (such 12-month period is referred to below as the “identification period”). If Executive is determined to be a key employee under Code Section 416(i) (without regard to paragraph (5) thereof) during the identification period he shall be treated as a Specified Employee for purposes of this Agreement during the 12-month period that begins on the April 1 following the close of such identification period. For purposes of determining whether Executive is a key employee under Code Section 416(i), “compensation” shall mean Executive’s W-2 compensation as reported by the Company for a particular calendar year.

 

19

 

 

(e)    Code Section 409A Limitations. To the extent any portion of the applicable payment amount under this Agreement exceeds the "safe harbor" amount described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), Executive shall receive such portion of the applicable payment that exceeds the "safe harbor" amount on the first payroll date following the sixtieth (60th) day after the Executive's termination.

 

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20

 

 

 

IN WITNESS WHEREOF, BankFinancial Corporation has caused this Agreement to be executed by its duly authorized officers and directors, and Executive has signed this Agreement as of this 3rd day of May, 2022.

 

	
			BANKFINANCIAL CORPORATION 

				 	
			EXECUTIVE

				 
	 	 	 	 
	 	 	 	 
	
			/s/ James J. Brennan

				 	
			/s/ F. Morgan Gasior

				 
	
			By: James J. Brennan

				 	
			F. Morgan Gasior

				 
	
			Its: Secretary

				 	 	 

 

 

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