Document:

Exhibit 10

EXHIBIT 10.43

 

SCHEID VINEYARDS

INC.

13470 Washington

Blvd.

Marina Del Rey, CA

90292

 

March 22, 2001

 

PERSONAL DELIVERY

 

Mr. Michael S. Thomsen

518 24th Street

Manhattan Beach, CA 90266

 

                                                  Re: Scheid

Vineyards Inc. (the “Company”) –

                                                         Terms of Employment                             

 

Dear Mr. Thomsen:

 

                This letter

agreement (this “Agreement”) will confirm our mutual u derstanding that the

terms and conditions pursuant to which the Company has extended and you have

accepted its offer to serve as its Chief Financial Officer (“CFO”) are as

follows:

 

                1.             Position;  Services.              You agree to serve as CFO of the Company. In such

capacity, you shall report to the Company’s President and at the discretion of

the President to such other officer of the Company as the President may

designate (the “Supervising Officer”). As CFO for the Company you shall have

such duties and responsibilities as are normally associated with such position

and such other duties and/or responsibilities as may from time to time be

assigned to you by the Company’s Board of Directors, the President, or the

Supervising Officer, if any; including, but not limited to, supervision over

certain financial aspects of the Company’s business. You hereby accept

employment hereunder and agree to devote your full time, energy and skill to

such employment. Notwithstanding the foregoing, you may engage in other

personal business so long as the performance of such activities does not

materially interfere with the full, efficient and timely performance of your duties

hereunder.

 

                2.             Term.

 

                                (a)           The term of this Agreement (the

“Term”) shall be four (4) years, unless sooner terminated as provided herein.

Your services under this Agreement shall commence as of April 1, 2001 (the

“Start Date”), and, unless sooner

 

 

Mr. Michael S. Thomsen

March 22, 2001

Page 2

 

terminated, shall terminate on March 31, 2005 (the “Expiration Date”).

The Company may terminate your services at any time during the Term of this

Agreement with or without “Cause,” as such term is hereinafter defined;

 

                                (b)           Notwithstanding the foregoing, in the

event: (i) there occurs a “Change of Control,” as hereinafter defined, prior to

the Expiration Date or earlier termination of the Term hereof, and (ii) your

employment is terminated by the Company or the surviving entity or you elect to

terminate this Agreement within forty–five (45) days after such “Change

of Control,” you shall be entitled to receive, in lieu of any Severance

Compensation, as hereinafter defined, or other payment from the Company or the

surviving entity the following: (x) if the Change of Control occurs within the

first two (2) years of the Term, a lump sum “Change of Control Payment” equal

to twenty–four (24) months of your Base Salary in effect upon the

consummation of the Change of Control, or (y) if the Change of Control occurs

during the third year of the Term, a lump sum “Change of Control Payment” equal

to eighteen (18) months of your Base Salary in effect upon the consummation of

the Change of Control, or (z) if the Change of Control occurs within the last

year of the Term, a lump sum “Change of Control Payment” equal to twelve (12)

months of your Base Salary in effect upon the consummation of the Change of

Control. For the purposes hereof, “Change of Control” shall be defined as the

occurrence of any one of the following events:

 

                                                (i)            the Company shall merge or

consolidate with any other person or entity other than a subsidiary, and, upon

the consummation of such transaction, holders of the Class A and Class B Common

Stock immediately prior to such transaction own less than fifty percent (50%)

of the equity securities of the surviving or consolidated entity; or

 

                                                (ii)           all or substantially all of the

assets of the Company are sold or transferred to another person or entity in a

single transaction or a series of related transactions.

 

                Notwithstanding

the foregoing, a Change of Control shall not include the filing by or on behalf

of, or entering against, the Company or its subsidiaries of (y) a petition,

decree or order of bankruptcy or reorganization, or ‘(z) a petition, decree or

order for the appointment of a trustee, receiver, liquidator, supervisor,

conservator or other officer or agency having similar powers over the Company

or its subsidiaries, including any such petitions, orders or decrees filed or

entered by federal or state regulatory authorities.

 

             3.                Compensation.

 

                                (a)            As compensation for all services to

be rendered by you hereunder, the Company shall pay you, during the Term of

this Agreement, a base salary at the rate of One Hundred and Sixty Thousand

Dollars ($160,000) per annum

 

Michael S. Thomsen

March 22, 2001

Page 3

 

(the “Base Salary”) with such increases and/or bonuses as may be

determined from time to time by the Board in its sole discretion; provided however,

nothing herein shall require that the Company pay you any bonus or increase

your Base Salary. Said Base Salary shall be payable in equal semi–monthly

installments or in such other installments as the Company may from time to time

pay other similarly situated employees.

 

                                (b)           The Term of this Agreement may be

terminated prior to the Expiration Date in the event your employment with the

Company ends as a result of (x) your termination by the Company with “Cause” or

without “Cause”; (y) your voluntary termination; or (z) your death or

“disability,” as hereinafter defined. For the purposes hereof the term

“disability” shall mean your absence from the Company’s principal offices or

your inability to perform in all material respects your duties pursuant to this

Agreement by reason of mental or physical illness, disability or incapacity for

a period of four (4) months or more during any twelve (12) month period during

the term hereof. Your compensation in the event the Agreement is terminated

prior to the Expiration Date shall be as follows:

 

                                                (i)            the Company may in its sole

discretion terminate you at any time without “Cause.” In the event the

termination is without “Cause,” you hereby agree that you shall only be

entitled to receive (y) your then current “Base Salary,” as such term is

hereinafter defined, and benefits through the date of termination and (z) as

your entire severance compensation, the lesser of either: (A) an additional

twelve (12) months of your Base Salary in effect at the date of termination, or

(B) your then Base Salary for the remainder of the term of this Agreement (the

“Severance Compensation”). Such Severance Compensation shall be payable when it

would have otherwise been due to you;

 

IN CONNECTION WITH YOUR TERMINATION WITHOUT CAUSE, THE SEVERANCE

COMPENSATION PROVIDED IN THIS SECTION 3(b) SHALL BE PAID TO YOU AS LIQUIDATED

DAMAGES FOR ALL CLAIMS YOU WOULD HAVE WITH RESPECT TO (i) THE TERMINATION OF

THIS AGREEMENT,(ii) ANY COMPENSATION DUE YOU FROM THE COMPANY PURSUANT TO THIS

AGREEMENT AND (iii) THE INJURY TO YOUR REPUTATION AS A RESULT OF SUCH

TERMINATION. IN CONNECTION THEREWITH, THE PARTIES AGREE THAT IT WOULD BE

IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX THE ACTUAL AMOUNT OF SUCH DAMAGES

AND CLAIMS DUE YOU  WITH

RESPECT THERETO AND THAT SUCH SEVERANCE

BENEFITS SHALL CONSTITUTE A REALISTIC

AND REASONABLE  VALUATION OF THE DAMAGES WITH RESPECT TO

YOUR CLAIMS.

 

 

	

   

  	

  /s/ AGS

  	

   

  	

  /s/ MT

  	

   

  	

   

  
	

   

  	

  Initial

  	

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                                                (ii)           in the event the Agreement terminates

as a result of

 

 

 

Mr. Michael S. Thomsen

March 22, 2001

Page 4

 

your death or “disability,” you or your estate shall be entitled to

receive your Base Salary through the date of termination and for ninety (90)

days thereafter, plus all benefits hereunder through the date of termination.

 

                                                (iii)          in the event you terminate your

employment voluntarily or are terminated with “Cause,” you shall be entitled to

receive solely your then current “Base Salary,” plus any accrued and unpaid

benefits due you, through the date of termination. For the purposes hereof

“cause” shall be as defined in Exhibit “A” attached hereto and made a

part hereof.

 

                                                (iv)          under no circumstances shall the

Company be obligated to pay you any undeclared or declared but unpaid bonuses

in the event of your termination prior to the payment thereof. The payment of

any such bonus shall be at the sole discretion of the Company’s Board of

Directors.

 

                                (c)           As consideration for and a condition

precedent to the Company’s obligation to provide the payments required pursuant

to Section 3(b)(i) above, on or before such payment is made to you pursuant to

such Section, you shall simultaneously execute and deliver to the Company a

release, in a form acceptable to the Company and its counsel, of all claims

against the Company arising out of or pursuant to this Agreement or your

employment with the Company pursuant hereto, including any claims for Severance

Benefits or compensation hereunder.

 

                4.             Relocation Package.            In connection with the performance

of your services as contemplated in this Agreement, you agree that your office

shall be located at the Company’s principal offices which will be relocated to

305 Hilltown Road, Salinas, CA; the purpose of such relocation being to place

the Company’s headquarters in greater proximity to the Company’s vineyards. In

connection therewith, you intend to relocate and purchase a new principal

residence near such offices and in connection with your relocation, the Company

shall provide you the following (the “Relocation Package”):

 

                                (a)           the

compensation and benefits described in that certain document attached hereto as

Exhibit “B” (the “Relocation Package”);

 

                                (b)           a “Settling–In Allowance,” in

the sum of (i) Thirty Thousand Dollars ($30,000)(the “Affected Payment”)

payable in a lump sum to you upon your .physically relocating your principal

place of residence to Monterey County, CA or a neighboring county (the

“Relocation”), plus (ii) the “Additional Payments” which shall be equal to the

sum of any federal, state and local income taxes and penalties and interest

thereon attributable to both the Affected Payment and the Additional Payments.

You shall receive the Additional Payments concurrently with Affected Payments.

 

                                (c)           So

long as you continue to be employed by the Company for a period of one (1) year

from the date of your Relocation, the Company agrees to

 

 

Mr. Michael S. Thomsen

March 22, 2001

Page 5

 

make available to you a relocation loan (the “Loan”), secured by a

Second Deed of Trust on your new principal residence which shall be funded in

conjunction with the closing of your purchase of such residence, in the

principal amount of up to One Hundred Thousand Dollars ($100,000), simple

interest payable annually at the rate of 5.3% (the “Annual Interest Payment”)

throughout the Term of the Loan. Except as set forth below, the Loan shall

mature in five (5) years from the date of funding, subject to a balloon payment

of the remaining principal at the end of the Term of the Loan–, provided,

however, that to the extent you receive from the Company any compensatory bonus

above and beyond your Base Salary during any calendar year, you agree to

contribute no less than twenty–five percent (25%) of such bonus, after

deducting such year’s Annual Interest Payment, to reducing the principal of the

Loan. The maturity date of the Loan shall be accelerated in the event (i) you

resign from the Company or are terminated with Cause, in which case the Loan

shall mature and all accrued and unpaid interest and the outstanding principal

balance shall be due ninety (90) days from your termination of employment with

the Company, or (ii) if your employment with the Company  ends for any other reason, including but

not limited to termination without Cause, all accrued and unpaid interest and

the outstanding principal balance shall be due one (1) year from your

termination of employment with the Company.

 

             5.                Benefits.

 

                                (a)           During the Term, in addition to the

compensation and the Relocation Package provided for in Sections 3 and 4 of

this Agreement respectively, you shall have the right to: (x) participate in

any profit–sharing, pension, life, health and accident insurance,

retirement or other employee benefit plans presently adopted or which hereafter

may be adopted by the Company under terms no less favorable to those offered or

available to other senior executives of the Company of comparable or lower

standing than you; (y) participate in the Company’s 401 (k) Plan in accordance

with the terms; and (z) receive, in the sole discretion of the Board, stock

options, restricted stock, stock appreciation rights or other equity–based

compensation (“Discretionary Compensation”). Any Discretionary Compensation

granted to you shall be subject to such terms and conditions as the Board, in

its sole discretion, may deem appropriate or necessary.

 

                                (b)           During the Term, you shall also be

entitled to fifteen (15) days annual vacation time, during which time your

compensation will be paid in full. .Unused vacation days at the end of any pay

period(s) may be carried over to subsequent pay parasol(s), provided that the

cumulative number of vacation days accruing from and after the date of this

Agreement carried over into any subsequent pay period shall not exceed twenty

five (25) days. You shall not accrue additional vacation days during any pay period

once the total number of accumulated vacation days equals twenty five (25)

days. You shall under no circumstances be entitled to cash in lieu of vacation

days, except in the event of your termination of employment with the Company.

 

 

Mr. Michael S. Thomsen

March 22, 2001

Page 6

 

                6.             Expenses.              The Company shall reimburse you

for all reasonable travel, hotel, entertainment and other expenses incurred by

you in the discharge of your duties hereunder, in accordance with Company

policy regarding same, only after receipt from you of vouchers, receipts or

other reasonable substantiation of such expenses acceptable to the Company.

 

                7.             Indemnification.   In connection with your services rendered on

behalf of the Company during the term of this Agreement, the Company agrees to

indemnify you to the fullest extent permitted by Delaware law.

 

                8.             Confidentiality.     You covenant and agree that you will not at

any time during or after the termination of your employment with the Company

reveal, divulge or make known to any person, firm or corporation any

information, knowledge or data of a proprietary nature relating to the business

of the Company or any of its affiliates which is not or has not become

generally known or public. You shall hold, in a fiduciary capacity, for the

benefit of the Company, all information, knowledge or data of a proprietary

nature, relating to or concerned with, the operations, customers, developments,

strategic plans, new or potential products, marketing, sales, business and

affairs of the Company and its affiliates which is not generally known to the

public and which is or was obtained by you during your employment by the

Company. You recognize and acknowledge that all such information, knowledge or

data is a valuable and unique asset of the Company, and accordingly you will

not discuss or divulge any such information, knowledge or data to any person,

firm, partnership, corporation or organization other than to the Company, its

affiliates, designees, assignees or successors or except as may otherwise be

required by the law, as ordered by a court or other governmental body of

competent jurisdiction, or in connection with the business and affairs of the

Company.

 

             9.                Miscellaneous.

 

                                (a)           This Agreement reflects the entire

agreement between the parties with respect to the subject matter hereof and

shall supersede any prior agreements or understandings whether oral or in

writing with respect thereto. This Agreement may not be modified, altered or

amended except by an instrument in writing signed by the parties hereto.

 

                                (b)           This Agreement shall be construed in

accordance with the laws of the State of California except to the extent that

any provision of Section 7 hereof may relate to an interpretation of the

corporation laws of Delaware, the state in which the Company is domiciled, in

which case such provision shall be construed in accordance with the corporation

laws of that state.

 

                                (c)           Nothing

in the Agreement is intended to require or shall be construed as requiring the

Company to do or fail to do any act in violation of applicable

 

 

Mr. Michael S. Thomsen

March

22, 2001

Page

7

 

law. The Company’s inability

pursuant to court order to perform its obligations under this Agreement shall

not constitute a breach of this Agreement. If any provision of this Agreement

is invalid or unenforceable, the remainder of this Agreement shall nevertheless

remain in full force and effect. If any provision is held invalid or

unenforceable with respect to particular circumstances, it shall, nevertheless,

remain in full force and effect in all other circumstances.

 

                                (d)           Any arbitrable controversy or claim

arising out of or relating in any way to this Agreement or the breach thereof,

or Employee’s employment, and any arbitrable statutory claims including all

arbitrable claims of employment discrimination or harassment shall be subject

to private and confidential arbitration in the County of Monterey in accordance

with the laws of the State of California. EXCEPT AS OTHERWISE EXPRESSLY

PROVIDED HEREIN, THE PARTIES AGREE THAT IF A DISPUTE OR CLAIM OF ANY KIND

ARISES BETWEEN THEM, THEY AGREE TO WAIVE ANY RIGHTS EACH MAY HAVE TO A JURY OR

COURT TRIAL. The arbitration shall be conducted in a procedurally fair manner

by a mutually agreed upon neutral arbitrator selected in accordance with the

National Rules for the Resolution of Employment Disputes (“Rules”) of the

American Arbitration Association or if none can be mutually agreed upon, then

by one arbitrator appointed pursuant to the Rules; the arbitration shall be

conducted confidentially in accordance with the California Rules of Evidence

and the Rules, except to the extent that the rules are inconsistent herewith;

the arbitration fees shall be paid by the Company; each party shall have the

right to conduct reasonable discovery including three (3) depositions, requests

for production of documents and such other discovery as permitted under the

Rules or ordered by the arbitrator; the arbitrator shall have the authority to

award any damages or remedies authorized by law for the claims presented

including punitive damages and shall have the authority to award reasonable

attorneys fees to the prevailing party as provided by law; the decision of the

arbitrator shall be final and binding on all parties and shall be the exclusive

remedy of the parties; and the award, and the legal and factual basis for the

award, shall be in writing in accordance with the Rules, and shall be subject

to judicial confirmation, enforcement and review in accordance with California

law.

 

                                (e)           Any notice to the Company required or

permitted hereunder shall be given in writing to the Company, either by

personal service, telecopier or, if by mail, by registered or certified mail

return receipt requested, postage prepaid, duly addressed to the President of the

Company at its then principal place of business attention. Any such notice to

you shall be given in a like manner, and if mailed shall be addressed to you,

as set forth above or in the Company’s records. For the purpose, of determining

compliance with any time limit herein, a notice shall be deemed given on the

fifth business day following the postmarked date, if mailed, or the date of

delivery if personally delivered or delivered by telex or telecopier.

 

                                (f)            A waiver by either party of any term

or condition of this Agreement or any breach thereof, in any one instance,

shall not be deemed or

 

 

Mr. Michael S. Thomsen

March 22, 2001

Page 8

 

construed to be a waiver

of such term or condition or of any subsequent breach thereof.

 

                                (g)           You acknowledge that you have been

advised that Barry L. Burten, Esq. and other attorneys at Jeffer, Mangels,

Butler & Marmaro LLP have represented only the Company in connection with

the negotiation of this Agreement and that the Company has advised you to seek

the advice of separate counsel in connection with the negotiation of the terms

of the Agreement and your rights with respect to the Agreement. In connection

therewith, you hereby acknowledge that you have been represented to your

satisfaction in connection with the negotiation of the terms of this Agreement,

your rights with respect to the Agreement, and the execution thereof by

independent legal counsel of your choosing.

 

                If the

aforementioned terms and conditions accurately reflect your understanding of

our agreement, please date and execute two copies of this Agreement in the

spaces provided below and return one fully executed copy of this Agreement to

the Company.

 

                                                                                                                Very

truly yours,

 

                                                                                                                SCHEID

VINEYARDS INC.

 

	

   

  	

  By:

  	

   /s/ Alfred

  G. Scheid

  	

   

  
	

   

  	

  Alfred G. Scheid

  
	

   

  	

  Chief Executive

  Officer

  

 

Accepted and Agreed to

this 22day of March, 2001

 

	

  By:

  	

   /s/ Michael

  S. Thomsen

  
	

  Michael S.

  Thomsen

  

 

 

Mr. Michael S. Thomsen

March 22, 2001

Page 9

 

EXHIBIT “A”

 

To the Letter Agreement (the

“Agreement”) Dated March 22, 2001  between

Scheid Vineyards Inc. (the “Company”)

and Michael S. Thomsen

 

Definition of “Cause”

 

 

 

“Cause” means, as used with respect to the

involuntary termination of Michael S. Thomsen (“you”):

 

                                (a)           your

continued failure or refusal to substantially perform your duties pursuant to

the terms of the Agreement;

 

                                (b)           Your

engaging in misconduct or inaction materially injurious to the Company; or

 

                                (c)           Your

conviction of a felony or of a crime involving moral turpitude.

 

 

 

Mr. Michael S. Thomsen

March 22, 2001

Page 10

 

EXHIBIT

“B”

 

To

the Letter Agreement (the “Agreement”) Dated March 22, 2001 between

Scheid

Vineyards Inc. (the “Company”) and Michael S. Thomsen

 

The

Relocation Package

 

[attached hereto]__________________________________________

Exhibit

10.8

 

DANIEL

P. GROTTO

EMPLOYMENT AGREEMENT

 

This Employment Agreement

(this “Agreement”), is made and entered into as of the 1st day of January, 2001

(the “Effective Date”), by and between WEST SUBURBAN BANCORP, INC., an Illinois

corporation (the “Employer”), and DANIEL P. GROTTO, a Pennsylvania resident

(the “Executive”).

RECITALS

A.            The Executive is currently serving as

Senior Vice President of Business Development for West Suburban Bank (the

“Bank”).

B.            The Employer owns all of the issued and

outstanding capital stock of the Bank.

C.            The Employer desires to continue to

employ the Executive as an officer of the Employer and of the Bank for a

specified term and the Executive is willing to continue such employment upon

the terms and conditions hereinafter set forth.

D.            The Employer recognizes that

circumstances may arise in which a change of control of the Employer and/or the

Bank through acquisition or otherwise may occur thereby causing uncertainty of

employment without regard to the competence or past contributions of the

Executive which uncertainty may result in the loss of valuable services of the

Executive and the Employer and the Executive wish to provide reasonable

security to the Executive against changes in the employment relationship in the

event of any such change of control.

NOW, THEREFORE,

in consideration of the premises and of the covenants and agreements

hereinafter contained, it is covenanted and agreed by and between the parties

hereto as follows:

AGREEMENTS

1.             Position

and Duties. The

Employer hereby employs the Executive as a Senior Vice President of Business

Development for the Bank, or in such other senior executive capacity as shall

be mutually agreed between the Employer and the Executive. During the period of

the Executive’s employment hereunder, the Executive shall devote his best

efforts and full business time, energy, skills and attention to the business

and affairs of the Employer. The Executive’s duties and authority shall consist

of and include all duties and authority customarily performed and held by

persons holding equivalent positions with business organizations similar in

nature and size to the Employer, as such duties and authority are reasonably

defined, modified and delegated from time to time by the Board of Directors of

the Employer (the “Board”).  The

Executive shall have the powers necessary to perform the duties assigned to him

and shall be provided such supporting services, staff and other assistance,

office space and accouterments as shall be reasonably necessary and appropriate

in the light of such assigned duties.

 

 

2.             Compensation. As compensation for the services to be

provided by the Executive hereunder, the Executive shall receive the following

compensation, expense reimbursement and other benefits:

(a)           Base

Compensation.

The Executive shall receive an aggregate annual minimum base salary at the rate

of One Hundred Ten Thousand Dollars ($110,000) payable in installments in

accordance with the regular payroll schedule of the Bank. Such base salary

shall be subject to review annually commencing in 2001 and shall be maintained

or increased during the term hereof in accordance with the Employer’s

established management compensation policies and plans.

(b)           Reimbursement

of Expenses.

The Executive shall be reimbursed, upon submission of appropriate vouchers and

supporting documentation, for all travel, entertainment and other out-of-pocket

expenses reasonably and necessarily incurred by the Executive in the

performance of his duties hereunder and shall be entitled to attend

pre-approved seminars, conferences and meetings relating to the business of the

Employer consistent with the Employer’s established policies in that regard.

(c)           Other

Benefits. The

Executive shall be entitled to all benefits specifically established for him

and, when and to the extent he is eligible therefor, to participate in all

plans and benefits generally accorded to senior executives of the Employer,

including, but not limited to, pension, profit-sharing, employee stock

ownership plan, supplemental retirement, incentive compensation, bonus,

deferred compensation, disability income, group life, medical and

hospitalization insurance, and similar or comparable plans, and also to

perquisites extended to similarly situated senior executives, provided,  however,

that such plans, benefits and perquisites shall be no less than those made

available to all other employees of the Employer.

(d)           Withholding. The Employer shall be entitled to

withhold from amounts payable to the Executive hereunder, any federal, state or

local withholding or other taxes or charges which it is from time to time

required to withhold. The Employer shall be entitled to rely upon the opinion

of its legal counsel with regard to any question concerning the amount or

requirement of any such withholding.

(e)           Commuting

Expenses.

Employer shall reimburse Executive for all commuting expense from Pittsburgh,

Pennsylvania to Wheaton, Illinois. Monthly reimbursement of Commuting Expenses

will not exceed $1,000.  Executive will

be judicious in his efforts to reduce monthly Commuting Expenses to below

$1,000 per month.

3.             Confidentiality

and Loyalty.

The Executive acknowledges that heretofore or hereafter during the course of

his employment he has produced and may hereafter produce and have access to

material, records, data, trade secrets and information not generally available

to the public (collectively, “Confidential Information”) regarding the Employer

and its subsidiaries and affiliates. Accordingly, during and subsequent to

termination of this Agreement, the Executive shall hold in confidence and not

directly or indirectly disclose, use, copy or make lists of any such

Confidential Information, except to the extent that such information is or

thereafter becomes lawfully available from public sources, or such disclosure

is authorized in writing by the Employer, required by 

 

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a law or any competent administrative agency or

judicial authority, or otherwise as reasonably necessary or appropriate in

connection with performance by the Executive of his duties hereunder. All

records, files, documents and other materials or copies thereof relating to the

Employer’s business which the Executive shall prepare or use, shall be and

remain the sole property of the Employer, shall not be removed from the

Employer’s premises without its written consent, and shall be promptly returned

to the Employer upon termination of the Executive’s employment hereunder. The

Executive agrees to abide by the Employer’s reasonable policies, as in effect

from time to time, respecting avoidance of interests conflicting with those of

the Employer.  In the event of any

violation or threatened violation of these restrictions, the Employer, in

addition to and not in limitation of being relieved of all further obligations

under this Agreement and of any other rights, remedies or damages available to

the Employer under this Agreement or otherwise at law or in equity, shall be

entitled to preliminary and permanent injunctive relief to prevent or restrain

any such violation by the Executive and any and all persons directly or

indirectly acting for or with him, as the case may be.

4.             Term

and Termination.

(a)           Basic

Term. The

term of this Agreement shall begin on the Effective Date and end on January 1,

2004, and shall thereafter be automatically extended for one (1) additional

year on each December 31 (“Anniversary Date”) unless terminated by either party

effective as of the last day of the then current term by written notice to that

effect delivered to the other party not less than sixty (60) days prior to an

Anniversary Date.

(b)           Agreement

Non-extension or Employment Termination by Employer.

(i)            In

the event of the termination of the Executive’s employment under this Agreement

by the Employer prior to the last day of the then current term for any reason

other than a termination in accordance with the provisions of paragraph (d) of

this Section 4, the Employer shall continue to pay the Executive the base

salary then payable to the Executive and shall continue to provide coverage for

the Executive under all plans and benefits otherwise provided to senior

executives of the Employer, unless unable to continue such coverage by law, for

the remainder of the term of this Agreement, provided, that the continued

payment of these amounts by the Employer shall not offset or diminish any

compensation or benefits accrued as of the date of termination.

(ii)           In

the event this Agreement is not extended in accordance with the provisions of

paragraph (a) of this Section 4, the Executive may elect to terminate his

employment, and upon such election, the Employer shall pay the Executive a lump

sum amount equal to nine (9) times the monthly base salary then payable to the

Executive, which payment shall be his sole benefit under this Section 4. The

election by the Executive must be delivered in writing to the Employer within

sixty (60) days of the later of his receipt of notice of the non-extension of

this Agreement or the next following Anniversary Date.  Payment to the Executive will be made within

thirty (30) days of such termination.

 

3

 

(iii)          If

the Employer is not in compliance with  its minimum capital requirements or if the

payments required under subparagraph (i) or (ii) above would cause the

Employer’s capital to be reduced below its minimum capital requirements, such

payments shall be deferred until such time as the Employer is in capital

compliance.

(c)           Constructive

Termination.

If at any time during the term of this Agreement, except in connection with a

termination pursuant to paragraph (d) of this Section 4, the Executive is

Constructively Discharged (as hereinafter defined) then the Executive shall

have the right, by written notice to the Employer within sixty (60) days of

such Constructive Discharge, to terminate his services hereunder, effective as

of thirty (30) days after such notice, and the Executive shall have no rights

or obligations under this Agreement other than as provided in Sections 3, 5 and

6 hereof. The Executive shall in such event be entitled to a lump sum payment

of compensation and benefits and continuation of the health, life and

disability insurance as if such termination of his employment was pursuant to

subparagraph (b)(i) of this Section 4.

For purposes of this Agreement, the Executive shall be

“Constructively Discharged” upon the occurrence of any one of the following

events:

(i)            The

Executive is not re-elected or is removed from the positions with the Employer

or any affiliate set forth in Section 1 hereof, other than as a result of the

Executive’s election or appointment to positions of equal or superior scope and

responsibility; or

(ii)           The

Executive shall fail to be vested by the Employer with the powers and authority

of his appointed office; or

(iii)          The

Employer changes the primary employment location of the Executive to a place

that is more than thirty (30) miles from the primary employment location as of

the Effective Date of this Agreement; or

(iv)          The

Employer otherwise commits a material breach of its obligations under this

Agreement.

(d)           Termination

for Cause. This

Agreement and the Executive’s employment hereunder may be terminated for cause

as hereinafter defined. “Cause” shall mean: (i) the Executive’s death or his

permanent disability, as defined under the Employer sponsored disability income

insurance program, or in the event there is no such program, the Executive’s

inability, as a result of physical or mental incapacity, substantially to

perform his duties hereunder for a period of twelve (12) consecutive months;

(ii) a material violation by the Executive of any applicable material law or

regulation respecting the business of the Employer; (iii) the Executive being

found guilty of a felony or an act of dishonesty in connection with the

performance of his duties as an officer of the Employer, or which disqualifies

the Executive from serving as an officer or director of the Employer; or (iv)

the willful or negligent failure of the Executive to perform his duties

hereunder in any material respect. This Agreement may be terminated immediately

for any cause except under (iv) above. The Executive shall be entitled to at

least thirty (30) days’ prior written notice of the Employer’s 

 

4

 

intention to terminate his employment under (iv)

above, specifying the grounds for such termination, a reasonable opportunity to

cure any conduct or act, if curable, alleged as grounds for such termination,

and a reasonable opportunity to present to the Board his position regarding any

dispute relating to the existence of such cause.

(e)           Termination

upon Death.

In the event payments are due and owing under this Agreement at the death of

the Executive, payment shall be made to such beneficiary as Executive may

designate in writing, or failing such designation, to the executor of his

estate, in full settlement and satisfaction of all claims and demands on behalf

of the Executive. Such payments shall be in full settlement and satisfaction of

all payments provided for in this Agreement.

(f)            Payment

upon Termination for Disability. The Employer may terminate this Agreement and the

Executive’s employment after the Executive is determined to be permanently

disabled under the Employer sponsored disability income insurance program or by

a physician engaged by the Employer. In the event of a dispute regarding the

Executive’s disability, each party shall choose a physician who together will

choose a third physician to make a final determination. The Executive shall be

entitled to the compensation and benefits provided for under this Agreement for

any period during the term of this Agreement and prior to the establishment of

the Executive’s disability during which the Executive is unable to work due to

a physical or mental infirmity. In the event of the termination of this

Agreement and the Executive’s employment due to the permanent disability of the

Executive, the Employer shall continue to pay the Executive eighty percent

(80%) of the base salary per month then payable to the Executive, reduced by

any amounts received under the Employer sponsored disability income insurance

program, and shall continue to provide coverage for the Executive under the

health and life insurance programs maintained by the Employer until the earlier

of the date the Executive returns to full-time employment, either with the

Employer or another employer, or Executive’s death. Notwithstanding anything

contained in this Agreement to the contrary, until the date specified in a

notice of termination relating to the Executive’s disability, the Executive

shall be entitled to return to his positions with the Employer as set forth in

this Agreement in which event no disability of the Executive will be deemed to

have occurred. Notwithstanding any other provision of this Agreement, in the

event of the termination of the Executive’s employment under this Agreement for

any reason, the Executive may elect to have any disability income insurance

policy maintained by the Employer on his behalf transferred to him, and he

shall assume all obligations thereunder.

 

5

 

(g)           Termination

upon Change of Control.

(i)            In the event of a Change in Control

(as defined below) and the termination of the Executive’s employment or this

Agreement under either A or B below, the Executive shall be entitled to a lump

sum payment equal to three (3) times his annual base salary then payable, and

the average of his most recent three (3) years’ annual bonus amounts, if any,

subject to the limitations set forth below. The Employer shall also continue to

provide coverage for the Executive under the Employer sponsored life and

disability insurance programs for three (3) years following such termination,

and the medical benefit program until the earlier of his Medicare eligibility

date or the date the executive elects to become covered under another employer

sponsored medical benefit plan or program. Payments under this paragraph shall

be subject to the limits of subparagraph (g)(ii) below. The following shall

constitute termination under this paragraph:

A.            The

Executive terminates his employment by a written notice to that effect

delivered to the Board within twenty-four (24) months after the Change in

Control.

B.            This

Agreement is terminated by the Employer or its successor either in

contemplation of or after the Change in Control.

(ii)           It

is the intention of the Employer and the Executive that no portion of any payment

under this Agreement, or payments to or for the benefit of the Executive under

any other agreement or plan, be deemed to be an “Excess Parachute Payment” as

defined in Section 280G of the Internal Revenue Code of 1986, as amended (the

“Code”), or its successors. It is agreed that the present value of and payments

to or for the benefit of the Executive in the nature of compensation, receipt

of which is contingent on the Change of Control, and to which Section 280G of

the Code applies (in the aggregate “Total Payments”) shall not exceed an amount

equal to one dollar less than the maximum amount which the Employer may pay

without loss of deduction under Section 280G(a) of the Code. Present value for

purposes of this Agreement shall be calculated in accordance with Section

280G(d)(4) of the Code. Within one hundred and twenty (120) days following the

earlier of (A) the giving of the notice of termination or (B) the giving of

notice by the Employer to the Executive of its belief that there is a payment

or benefit due the Executive which will result in an excess parachute payment

as defined in Section 280G of the Code, the Executive and the Employer, at the

Employer’s expense, shall obtain the opinion of such legal counsel and

certified public accountants as the Executive may choose (notwithstanding the

fact that such persons have acted or may also be acting as the legal counsel or

certified public accountants for the Employer), which opinions need not be

unqualified, which sets forth (A) the amount of the Base Period Income of the

Executive, (B) the present value of Total Payments and (C) the amount and

present value of any excess parachute payments. In the event that such opinions

determine that there would be an excess parachute payment, the payment

hereunder or any other payment determined by such counsel to be includable in

Total Payments shall be modified, reduced or eliminated as specified by

 

6

 

the Executive in writing delivered to the Employer

within ninety (90) days of his receipt of such opinions or, if the Executive

fails to so notify the Employer, then as the Employer shall reasonably

determine, so that under the bases of calculation set forth in such opinions

there will be no excess parachute payment. The provisions of this subparagraph,

including the calculations, notices and opinions provided for herein shall be

based upon the conclusive presumption that (A) the compensation and benefits

provided for in Section 2 hereof and (B) any other compensation earned by the

Executive pursuant to the Employer’s compensation programs which would have

been paid in any event, are reasonable compensation for services rendered, even

though the timing of such payment is triggered by the Change of Control;

provided, however, that in the event such legal counsel so requests in

connection with the opinion required by this subparagraph, the Executive and

the Employer shall obtain, at the Employer’s expense, and the legal counsel may

rely on in providing the opinion, the advice of a firm of recognized executive

compensation consultants as to the reasonableness of any item of compensation

to be received by the Executive. In the event that the provisions of Sections

280G and 4999 of the Code are repealed without succession, this subparagraph

shall be of no further force or effect.

(iii)          For

purposes of this paragraph, the term “Change in Control” shall mean the

following:

A.            The

consummation of the acquisition by any person (as such term is defined in

Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the

“1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3

promulgated under the 1934 Act) of fifty percent (50%) or more of the combined

voting power of the then outstanding voting securities of the Employer or the

Bank; or

B.            The

individuals who, as of the date hereof, are members of the Board of the

Employer or the Bank cease for any reason to constitute a majority of the

Board, unless the election, or nomination for election by the stockholders, of

any new director was approved by a vote of a majority of the Board, and such

new director shall, for purposes of this Agreement, be considered as a member

of the Board; or

C.            Approval

by stockholders of the Employer or the Bank of: (1) a merger or consolidation

if the stockholders immediately before such merger or consolidation do not, as

a result of such merger or consolidation, own directly or indirectly, more than

fifty percent (50%) of the combined voting power of the then outstanding voting

securities of the entity resulting from such merger or consolidation in

substantially the same proportion as their ownership of the combined voting

power of the voting securities of the Employer or the Bank outstanding

immediately before such merger or consolidation; or (2) a complete liquidation

or dissolution or an agreement for the sale or other disposition of all or

substantially all of the assets of the Employer or the Bank.

 

7

 

Notwithstanding the foregoing, a Change in Control

shall not be deemed to occur solely because fifty percent (50%) or more of the

combined voting power of the then outstanding securities of the Employer or the

Bank is acquired by: (1) a trustee or other fiduciary holding securities under

one or more employee benefit plans maintained for employees of the Employer or

the Bank; or (2) any corporation which, immediately prior to such acquisition,

is owned directly or indirectly by the stockholders in the same proportion as

their ownership of stock of the Employer or the Bank immediately prior to such

acquisition.

(h)           Regulatory Suspension and

Termination.

(i)            If

the Executive is suspended from office and/or temporarily prohibited from

participating in the conduct of the Employer’s affairs by a notice served under

Section 8(e)(3) (12 U.S.C. § 1818(e)(3)) or 8(g) (12 U.S.C. § 1818(g)) of the

Federal Deposit Insurance Act, as amended, the Employer’s obligations under

this contract shall be suspended as of the date of service, unless stayed by

appropriate proceedings. If the charges in the notice are dismissed, the

Employer shall (A) pay the Executive all of the compensation withheld while

their contract obligations were suspended and (B) reinstate any of the

obligations, which were suspended.

(ii)           If

the Executive is removed and/or permanently prohibited from participating in

the conduct of the Employer’s affairs by an order issued under Section 8(e) (12

U.S.C. § 1818(e)) or 8(g) (12 U.S.C. § 1818(g)) of the Federal Deposit

Insurance Act, as amended, all obligations of the Employer under this contract

shall terminate as of the effective date of the order, but vested rights of the

contracting parties shall not be affected.

(iii)          If

the Employer is in default as defined in Section 3(x) (12 U.S.C. § 1813(x)(1))

of the Federal Deposit Insurance Act, as amended, all obligations of the

Employer under this contract shall terminate as of the date of default, but

this paragraph shall not affect any vested rights of the contracting parties.

(iv)          All

obligations of the Employer under this contract shall be terminated, except to

the extent determined that continuation of the contract is necessary for the

continued operation of the institution by the Federal Deposit Insurance

Corporation (the “FDIC”), at the time the FDIC enters into an agreement to

provide assistance to or on behalf of the Employer under the authority

contained in Section 13(c) (12 U.S.C. § 1823(c)) of the Federal Deposit

Insurance Act, as amended, or when the Employer is determined by the FDIC 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.

(v)           Any

payments made to the Executive pursuant to this Agreement, or otherwise, are

subject to and conditioned upon their compliance with Section 18(k) (12 U.S.C.

§ 1828(k)) of the Federal Deposit Insurance Act as amended, and any regulations

promulgated thereunder.

 

8

 

(i)            Termination

Upon Retirement.

In the event of the termination of this Agreement due to the retirement of the

Executive at or after the attainment of age sixty-two (62), the Employer shall

continue to provide coverage for the Executive under the health and life

insurance programs maintained by the Employer until his death.

5.             Interest

in Assets.

Neither the Executive nor his estate shall acquire hereunder any rights in

funds or assets of the Employer, otherwise than by and through the actual

payment of amounts payable hereunder; nor shall the Executive or his estate

have any power to transfer, assign, anticipate, hypothecate or otherwise

encumber in advance any of said payments; nor shall any of such payments be

subject to seizure for the payment of any debt, judgment, alimony, separate

maintenance or be transferable by operation of law in the event of bankruptcy,

insolvency or otherwise of the Executive.

6.             Indemnification.

(a)           Insurance. The Employer shall provide the

Executive (including his heirs, personal representatives, executors and

administrators) for the term of this Agreement with coverage under a standard

directors’ and officers’ liability insurance policy at its expense.

(b)           Indemnification

under State Law.

In addition to the insurance coverage provided for in paragraph (a) of this

Section 6, the Employer shall hold harmless and indemnify the Executive (and

his heirs, executors and administrators) to the fullest extent permitted under

applicable law against all expenses and liabilities reasonably incurred by him

in connection with or arising out of any action, suit or proceeding in which he

may be involved by reason of his having been an officer of the Employer

(whether or not he continues to be an officer at the time of incurring such

expenses or liabilities), such expenses and liabilities to include, but not be

limited to, judgments, court costs and attorneys’ fees and the cost of

reasonable settlements.

(c)           Advancement

of Expenses.

In the event the Executive becomes a party, or is threatened to be made a

party, to any action, suit or proceeding for which the Employer has agreed to

provide insurance coverage or indemnification under this Section 6, the

Employer shall, to the full extent permitted under applicable law, advance all

expenses (including reasonable attorneys’ fees), judgments, fines and amounts

paid in settlement (collectively “Expenses”) incurred by the Executive in

connection with the investigation, defense, settlement, or appeal of any

threatened, pending or completed action, suit or proceeding, subject to receipt

by the Employer of a written undertaking from the Executive: (i) to reimburse

the Employer for all Expenses actually paid by the Employer to or on behalf of the

Executive in the event it shall be ultimately determined that the Executive is

not entitled to indemnification by the Employer for such Expenses; and (ii) to

assign to the Employer all rights of the Executive to indemnification, under

any policy of directors’ and officers’ liability insurance or otherwise, to the

extent of the amount of Expenses actually paid by the Employer to or on behalf

of the Executive.

7.             General Provisions.

(a)           Successors;

Assignment.

This Agreement shall be binding upon and inure to the benefit of the Executive,

the Employer and his and its respective personal representatives, successors

and assigns, and any successor or assign of the Employer 

 

9

 

shall be deemed

the “Employer” hereunder. The Employer shall require any successor to all or

substantially all of the business and/or assets of the Employer, whether

directly or indirectly, by purchase, merger, consolidation, acquisition of

stock, or otherwise, by an agreement in form and substance satisfactory to the

Executive, expressly to assume and agree to perform this Agreement in the same

manner and to the same extent as the Employer would be required to perform if

no such succession had taken place.

(b)           Entire

Agreement; Modifications. This Agreement constitutes the entire agreement

between the parties respecting the subject matter hereof, and supersedes all

prior negotiations, undertakings, agreements and arrangements with respect

thereto, whether written or oral, including the Employment Agreement dated

January 1, 2001. Except as otherwise explicitly provided herein, this Agreement

may not be amended or modified except by written agreement signed by the

Executive and the Employer.

(c)           Enforcement

and Governing Law. The provisions of this Agreement shall be regarded as divisible and

separate; if any of said provisions should be declared invalid or unenforceable

by a court of competent jurisdiction, the validity and enforceability of the

remaining provisions shall not be affected thereby. This Agreement shall be

construed and the legal relations of the parties hereto shall be determined in

accordance with the laws of the State of Illinois without reference to the law

regarding conflicts of law.

(d)           Arbitration. Any dispute or controversy arising

under or in connection with this Agreement or the Executive’s employment by the

Employer shall be settled exclusively by arbitration, conducted by a single

arbitrator sitting in a location selected by the Executive within fifty (50)

miles of the main office of the Employer, in accordance with the rules of the

American Arbitration Association (the “AAA”) then in effect. The arbitrator

shall be selected by the parties from a list of arbitrators provided by the

AAA, provided that no arbitrator shall be related to or affiliated with either

of the parties. No later than ten (10) days after the list of proposed

arbitrators is received by the parties, the parties, or their respective

representatives, shall meet at a mutually convenient location or

telephonically. At that meeting, the party who sought arbitration shall

eliminate one (1) proposed arbitrator and then the other party shall eliminate

one (1) proposed arbitrator. The parties shall continue to eliminate names from

the list of proposed arbitrators in this manner until a single proposed arbitrator

remains. This remaining arbitrator shall arbitrate the dispute. Each party

shall submit, in writing, the specific requested action or decision it wishes

to take, or make, with respect to the matter in dispute, and the arbitrator

shall be obligated to choose one (1) party’s specific requested action or

decision, without being permitted to effectuate any compromise position.

Judgment may be entered on the arbitrator’s award in any court having

jurisdiction; provided, however, that the Executive shall be entitled to seek

specific performance of his right to be paid through the date of termination

during the pendency of any dispute or controversy arising under or in

connection with this Agreement.

(e)           Legal

Fees. All

reasonable legal fees paid or incurred by the Executive pursuant to any dispute

or question of interpretation relating to this Agreement shall be paid or

reimbursed by the Employer if the Executive is successful on the merits

 

10

 

pursuant to a legal judgment, arbitration or

settlement.

(f)            Waiver. No waiver by either party at any time

of any breach by the other party of, or compliance with, any condition or

provision of this Agreement to be performed by the other party, shall be deemed

a waiver of any similar or dissimilar provisions or conditions at the same time

or any prior or subsequent time.

(g)           Notices. Notices pursuant to this Agreement

shall be in writing and shall be deemed given when received; and, if mailed,

shall be mailed by United States registered or certified mail, return receipt

requested, postage prepaid; and if to the Employer, addressed to the principal

headquarters of the Employer, attention: Chairman; or, if to the Executive, to

the address set forth below the Executive’s signature on this Agreement, or to

such other address as the party to be notified shall have given to the other.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the

date first above written.

	

  WEST SUBURBAN BANCORP, INC.

  	

   

  	

  DANIEL P. GROTTO

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Kevin J.

  Acker

  	

   

  	

  /s/ Daniel P.

  Grotto

  	

   

  
	

   

  	

  Kevin J. Acker

  	

   

  	

   

  	

   

  
	

   

  	

  Chairman of the

  Board of Directors

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