Document:

Exhibit 10.1

 

HEALTHGATE DATA CORP.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

Re:  Severance Benefit

 

Dear                       ;

 

In
connection with your appointment as                    ,
this letter is to confirm the severance benefit for you, as an executive
officer of HealthGate Data Corp. (the “Company”).

 

In
consideration of your services to date and your continuing services to
HealthGate, in the event that HealthGate terminates your employment without “Cause”
(as defined below), you shall be entitled to the following payments from
HealthGate:

 

(i)            all
amounts accrued and unpaid to you through the termination date, including any
base salary, and accrued but unused vacation, holiday or sick time; and

(ii)           severance
payments comprising your then current base salary and your then current health
care coverage continuing for six (6) months from the date of termination.  To the extent that health care coverage
cannot by its terms be continued, HealthGate shall reimburse you for the actual
premium costs of obtaining such coverage under COBRA or comparable coverage
under non-group insurance, if less.

 

Severance
benefit payments shall be made on a schedule consistent with HealthGate’s
payroll policies and shall be subject to applicable tax deductions and
withholdings.

 

For
the purposes of this severance benefit, “Cause” means:

 

(i)            willful
breach or habitual neglect of the duties you are required or reasonably
requested to perform which are not cured by you within 10 days of written
notice from the Company of such breach or neglect;

(ii)           any
illegal act by you injurious to the business or reputation of the Company or
any of its affiliates;

 

 

(iii)          your
engagement in misconduct injurious or potentially injurious to the business or
reputation of the Company or any of its affiliates;

(iv)          your
commission of any crime which constitutes a felony in the jurisdiction
committed (whether or not involving the Company or any of its affiliates); or

(v)           a material
breach by Executive of Company policies or procedures.

 

This
letter only sets forth the severance benefit payable to you if HealthGate
elects to terminate your employment without Cause and this letter does not
constitute an employment agreement or otherwise change the terms and conditions
of your employment.

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HEALTHGATE DATA CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/
  William S. Reece

  	
   

  
	
   

  	
   

  	
   

  	
   William S.
  Reece

  
	
   

  	
   

  	
   

  	
   Chief
  Executive OfficeExhibit 10.1

 

COMPENSATION AND BENEFITS

 

ASSURANCE AGREEMENT FOR

 

Old Second Bancorp, Inc.

 

(Amended 3/1/2000)

 

 

James Eccher

 

 

COMPENSATION AND BENEFITS
ASSURANCE AGREEMENT

 

This COMPENSATION AND
BENEFITS ASSURANCE AGREEMENT (this “Agreement”) is made, entered into, and is effective as
of this 1st day of January 1, 2005 (the “Effective
Date”) by and between Old
Second Bancorp, Inc. (hereinafter referred to as the “Company”) and James
Eccher, (hereinafter referred to as the “Executive”).

 

WHEREAS, the Executive is presently
employed by The Old Second National Bank, Aurora, Illinois (the “Bank”), in a key management capacity; and

 

WHEREAS, the Company is the holder, directly and indirectly,
of all of the issued and outstanding stock of the Bank; and

 

WHEREAS, the Executive possesses
considerable experience and knowledge of the business and affairs of the Bank
and the Company concerning its and their policies, methods, personnel, and
operations; and

 

WHEREAS, the Company is desirous of assuring the continued employment
of the Executive in a key management capacity of the Bank, and the Executive is
desirous of having such assurances.

 

NOW THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements of
the parties set forth in this Agreement, and of other good and valuable
consideration including, but not limited to, the Executive’s continuing
employment with the Bank, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

 

Section 1.                                          Term of
Agreement

 

This Agreement
will commence on the Effective Date and shall continue in effect for one (1)
full calendar year (through December 31, 2005) (the “Initial Term”).

 

The term of this
Agreement automatically shall be extended for one additional year at the end of
the Initial Term, and then again after each successive one-year period
thereafter (each such one-year period following the Initial Term a “Successive Period”).  However, either party may terminate this
Agreement at the end of the Initial Term, or at the end of any Successive
Period thereafter, by giving the other party written notice of intent not to
renew delivered at least ninety (90) calendar days prior to the end of such
Initial Term or Successive Period.  Except
as otherwise provided, if such notice is properly delivered by either party,
this Agreement, along with all corresponding rights, duties, and covenants,
shall automatically expire at the end of the Initial Term or Successive Period
then in progress.

 

In the event that a “Change in Control” of the Company occurs
(as such term is hereinafter defined) during the Initial Term or any Successive
Period, upon the effective date of such Change in Control, the term of this
Agreement shall automatically and irrevocably be renewed for a period of
twenty-four (24) full calendar months from the effective date of such Change in
Control (such 24-month period being hereinafter referred to as the “Extended Period”).  This Agreement shall thereafter automatically
terminate following the twenty-four

 

 

(24)
month Change in Control renewal period.  Further, this Agreement shall be assigned to,
and shall be assumed by, the purchaser in such Change in Control, as further
provided in Section 4 herein.

 

Section 2.                                          Severance Benefits

 

2.1.                            Right to Severance Benefits.  The Executive shall be entitled to receive
from the Company Severance Benefits as described in Paragraph 2.3 and Section 3
herein, if during the term of this Agreement there has been a Change in Control
of the Company or the Bank (as defined in Paragraph 2.4 herein) and if, within
the Extended Period, the Executive’s employment with the Bank shall end for any
reason specified in Paragraph 2.2 herein as being a Qualifying
Termination.  The Severance Benefits
described in Paragraphs 2.3(a) and 2.3(b) herein shall be paid in cash to the
Executive in a single lump sum as soon as practicable following the Qualifying
Termination, but in no event later than thirty (30) calendar days from such
date.  Notwithstanding the foregoing,
Severance Benefits which become due pursuant to the circumstances described in
Paragraphs 2.2(c) and 4.1 shall be paid immediately.

 

2.2.                            Qualifying
Termination.  The occurrence of any
one or more of the following events (i.e., a “Qualifying
Termination”) within the Extended Period shall trigger the payment
of Severance Benefits to the Executive, as such benefits are described under
Paragraph 2.3 herein:

 

(a)                                  The Bank’s
involuntary termination of the Executive’s employment without Cause (as such term
is defined in Paragraph 2.6 herein);

 

(b)                                 The Executive’s
voluntary termination of employment for Good Reason (as such term is defined in
paragraph 2.5 herein); and

 

(c)                                  The Company or
the Bank, or any successor company, commits a material breach of any of the
provisions of this Agreement including, but not limited to the Company failing
to obtain the assumption of, or the successor company refusing to assume the
obligations of this Agreement pursuant to Paragraph 4.1 herein.

 

A Qualifying Termination shall not include a termination of
the Executive’s employment within twenty-four (24) calendar months after a
Change in Control by reason of death, disability, the Executive’s voluntary
termination without Good Reason, or the Bank’s involuntary termination of the
Executive’s employment for Cause.

 

2.3.                            Description of Severance Benefits.  In the event that the Executive becomes
entitled to receive Severance Benefits, as provided in Paragraphs 2.1 and 2.2
herein, the Company (or the Bank at the direction of the Company) shall, within
the time limits stated in Paragraph 2.1, pay to the Executive and provide the
Executive with the following:

 

(a)                                  A lump-sum cash
amount equal to the Executive’s unpaid Base Salary (as such term is defined in
Paragraph 2.7 herein), accrued vacation pay, unreimbursed business expenses,
and all other items earned by and owed to the Executive through and including
the date of the Qualifying Termination. 
Such payment shall constitute full satisfaction for these amounts owed
to the Executive.

 

3

 

(b)                                 A lump-sum cash
amount equal to two (2) multiplied by the greater of the Executive’s annual
rate of Base Salary in effect upon the date of the Qualifying Termination, or
the Executive’s annual rate of Base Salary in effect immediately prior to the
occurrence of the Change in Control.

 

(c)                                  Immediate 100%
vesting of all stock options, and any other awards which had been provided to
the Executive by the Company or the Bank under any incentive compensation plan.

 

(d)                                 At the exact
same cost to the Executive, and at the same coverage level as in effect as of
the Executive’s date of Qualifying Termination (subject to changes in coverage
levels applicable to all employees generally), a continuation of the Executive’s
(and the Executive’s eligible dependents’) health insurance coverage for
twenty-four (24) months from the date of the Qualifying Termination.  The applicable COBRA health insurance benefit
continuation period shall begin at the end of this twenty-four (24) month
benefit continuation period.  The
providing of health insurance benefits by the Company shall be discontinued
prior to the end of the twenty-four (24) month continuation period in the event
that the Executive subsequently becomes covered under the health insurance
coverage of a subsequent employer which does not contain any exclusion or
limitation with respect to any preexisting condition of the Executive or the
Executive’s eligible dependents.  For
purposes of enforcing this offset provision, the Executive shall have duty to
inform the Company as to the terms and conditions of any subsequent employment
and the corresponding benefits earned from such employment.  The Executive shall provide, or cause to
provide, to the Company in writing correct, complete, and timely information
concerning the same.

 

(e)                                  The Executive
shall be entitled to receive standard outplacement services from a nationally
recognized outplacement firm of the Executive’s selection, for a period of up
to one (1) year from the Executive’s date of Qualifying Termination.  However, such service shall be at the Company’s
expense to a maximum amount not to exceed twenty thousand dollars ($20,000).

 

2.4.                            Definition
of “Change in Control.”  “Change in
Control” of the Company or the Bank means, and shall be deemed to
have occurred upon, the first to occur of any of the following events:

 

(a)                                  Any Person other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the beneficial owner (within the meaning of Rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of the Company or the Bank
representing twenty percent (20%) or more of the total voting power represented
by the Company’s or the Bank’s then outstanding voting securities; or

 

(b)                                 During any period of two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new Director whose election by
the Board of Directors or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds (2/3) of the Directors then still
in

 

4

 

office who either were
Directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or

 

(c)                                  The stockholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least eighty percent (80%) of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete liquidation of the
Company or the Bank or an agreement for the sale or disposition by the Company
of all or substantially all the Company’s or the Bank’s assets.

 

However, in no event
shall a Change in Control be deemed to have occurred, with respect to the
Executive if the Executive is part of a purchasing group which consummates the
Change-in-Control transaction.  The
Executive shall be deemed “part of a purchasing group” for purposes of the
preceding sentence if the Executive is a equity participant in the purchase
company or group (except for (i) passive ownership of less than two percent
(2%) of the stock of the purchasing company; or (ii) ownership of equity
participation in the purchasing company or group which is otherwise not
significant, as determined prior to the Change in Control by a majority of the
nonemployee continuing Directors).

 

2.5.                            Definition of “Good Reason.”  “Good Reason” shall mean, without the
Executive’s express written consent, the occurrence by any one or more of the
following within the Extended Period:

 

(a)                                  The assignment
of the Executive to duties inconsistent with the Executive’s position, duties,
responsibilities, and status as an officer of the Bank, or a reduction or
alteration in the nature or status of the Executive’s authorities, duties, or
responsibilities from those in effect as of ninety (90) calendar days prior to
the Change in Control, other than an insubstantial and inadvertent act that is
remedied by the Bank promptly after receipt of notice thereof given by the
Executive.

 

(b)                                 The Bank’s
requiring the Executive to be based at a location in excess of twenty-five (25)
miles from the location of the Executive’s principal job location or office
immediately prior to the Change in Control; except for required travel on the
Bank’s business to an extent consistent with the Executive’s then present
business travel obligations.

 

(c)                                  A reduction by
the Bank of the Executive’s Base Salary in effect on the Effective Date, or as
the same shall be increased from time to time.

 

(d)                                 The failure of
the Bank to keep in effect any of the Bank’s compensation, health and welfare
benefits, or perquisite programs under which the Executive receives value, as
such programs exist immediately prior to the Change in Control, or the failure
of the Bank to meet the funding requirements, if any, of each of the
programs.  However, the replacement of an
existing program with a new program will be permissible (and not grounds for a
Good Reason termination) if done for all employees generally.

 

5

 

(e)                                  Any breach by
the Company of its obligation under Section 4 of this Agreement or any
failure of a successor company to assume and agree to perform the Company’s
entire obligations under this Agreement, as required by Section 4 herein.

 

The Executive’s right to terminate employment for Good Reason
shall not be affected by the Executive’s incapacity due to physical or mental
illness.  The Executive’s continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason herein.

 

2.6.                            Definition of “Cause.”  “Cause” shall mean the occurrence of any one
or more of the following:

 

(a)                                  A demonstrably
willful and deliberate act or failure to act by the Executive (other than as a
result of incapacity due to physical or mental illness) which is committed in
bad faith, without reasonable belief that such action or inaction is in the
best interests of the Company, which causes actual material financial injury to
the Bank and which act or inaction is not remedied within fifteen (15) business
days of written notice from the Bank; or

 

(b)                                 The Executive’s
conviction for committing an act of fraud, embezzlement, theft, or any other
act constituting a felony involving moral turpitude which causes material harm,
financial or otherwise, to the Bank.

 

2.7.                            Other Defined Terms.  The following terms shall have the meanings
set forth below:

 

(a)                                  “Base Salary” means, at any
time, the then-regular annual rate of pay which the Executive is receiving as
salary, excluding amounts: (i) designated by the Company as payment toward
reimbursement of expenses; of (ii) received under incentive or other bonus
plans, regardless of whether or not the amounts are deferred.

 

(b)                                 “Beneficial Owner” shall have the
meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act (as such term is defined below).

 

(c)                                  “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time, or any successor
act thereto.

 

(d)                                 “Person” shall have the
meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and
used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d)
thereof.

 

Section 3.                                          Excise
Tax

 

3.1.                            Excise Tax Payment.  If any portion of the Severance Benefits or
any other payment under this Agreement, or under any other agreement with, or
plan of the Company or Bank, including but not limited to stock options and
other long-term incentives (in the aggregate “Total
Payments”) would constitute an “excess parachute payment,” such that
a golden parachute excise tax is due, the Company (or the Bank at the Company’s
direction) shall provide

 

6

 

to the Executive, in
cash, an additional payment in an amount to cover the full cost of any excise
tax and the Executive’s state and federal income and employment taxes on this
additional payment (cumulatively, the “Gross-Up Payment”).  This Gross-Up Payment shall be made as soon
as possible following the date of the Executive’s Qualifying Termination, but
in no event later than thirty (30) calendar days of such date.

 

For purposes of this Agreement, the term “excess parachute payment” shall have the
meaning assigned to such term in Section 280G of the Internal Revenue
Code, as amended (the “Code”), and
the term “excise tax” shall mean the
tax imposed on such excess parachute payment pursuant to Sections 280G and 4999
of the Code.

 

3.2.                            Subsequent Recalculation.  In the event the Internal Revenue Service
subsequently adjusts the excise tax computation herein described, the Company
(or the Bank at the Company’s direction) shall reimburse the Executive for the
full amount necessary to make the Executive whole on an after-tax basis (less
any amounts received by the Executive that the Executive would not have
received had the computations initially been computed as subsequently
adjusted), including the value of any underpaid excise tax, and any related
interest and/or penalties due to the Internal Revenue Service.

 

Section 4.                                          Successors
and Assignments

 

4.1.                            Successors.  The Company will require any successor
(whether via a Change in Control, direct or indirect, by purchase, merger,
consolidation, or otherwise) of the Company or the Bank to expressly assume and
agree to perform the obligations under this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.

 

Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall, as of the date
immediately preceding the date of a Change in Control, automatically give the
Executive Good Reason to collect, immediately, full benefits hereunder as a
Qualifying Termination.

 

4.2.                            Assignment by Executive.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees.  If an Executive should die
while any amount is still payable to the Executive hereunder, had the Executive
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s devisee,
legatee, or other designee, or if there is no such designee, to the Executive’s
estate.

 

An Executive’s rights hereunder shall not otherwise be
assignable.

 

Section 5.                                          Restrictive
Covenants

 

5.1.                            Covenants.  Without the prior written consent of the
Company, and where the Executive is entitled to receive the Severance Benefits
pursuant to the terms of this Agreement, during the 24-month period next
following the Executive’s termination of employment with the Bank, the
Executive shall not, directly or indirectly:

 

7

 

(a)                                  Disclosure of
Information.  Use, attempt to use,
disclose, or otherwise make known to any person or entity (other than the Board
of Directors of the Company or the Bank):

 

(i)                                     Any confidential or proprietary knowledge or
information, including without limitation, lists of customers, processes, and
systems, as well as any data and records pertaining thereto, which the
Executive may acquire in the course of his employment.

 

(ii)                                  Any confidential or proprietary knowledge or
information of a confidential nature (including but not limited to all
unpublished matters) relating to, within limitation, the business, properties,
accounting, books and records, computer systems and programs, or memoranda of
the Company or the Bank.

 

5.2.                            Acknowledgment of Covenants.  The parties hereto acknowledge that the
Executive’s services are of a special, extraordinary, and intellectual
character which gives him unique value, and that the business of the Company
and its subsidiaries is highly competitive, and that violation of any of the
covenants provided in this Section 5 would cause immediate, immeasurable,
and irreparable harm, loss and damage to the Company not adequately compensable
by a monetary award.  The Executive
acknowledges that the time and scope of activity restrained by the provisions
of this Section 5 are reasonable and do not impose a greater restraint
than is necessary to protect the goodwill of the Company’s business.  The Executive further acknowledges that he
and the Company have negotiated and bargained for the terms of this Agreement
and that the Executive has received adequate consideration for entering into
the Agreement.  In the event of any such
breach or threatened breach by the Executive of any one or more of such
covenants, the Company shall be entitled to such equitable and injunctive
relief as may be available to restrain the Executive from violating the
provisions hereof.  Nothing herein shall
be construed as prohibiting the Company from pursuing any other remedies
available at law or in equity for such breach or threatened breach, including
the recovery of damages and the immediate termination of the employment of the
Executive hereunder.

 

Section 6.                                          Miscellaneous

 

6.1.                            Administration.

 

(a)                                  Administration.  This Agreement shall be administered by the
Board of Directors of the Company, or by a Committee of the Board consisting of
Board members designated by the Board (the “Compensation Committee”).  The Compensation Committee (with the approval
of the Board, if the Board is not the Compensation Committee) is authorized to
interpret this Agreement, to prescribe and rescind rules and regulations, and
to make all other determinations necessary or advisable for the administration
of this Agreement.  In fulfilling its
administrative duties hereunder, the Compensation Committee may rely on outside
counsel, independent accountants, or other consultants to render advice or
assistance.

 

(b)                                 Claims Procedure.  If the Executive believes that he is being
denied a benefit to which he is entitled under the Agreement, he may file a
written request for such benefit

 

8

 

with the Company, setting
forth his claim.  Upon receipt of the
claim, the Company shall advise the Executive that a reply will be forthcoming
within 15 days and shall, in fact, deliver such reply with such period.  The Company may, however, extend the reply
period for an additional fifteen (15) days for reasonable cause.  If the claim is denied in whole or in part,
the Company shall adopt a written opinion, using language calculated to be
understood by the Executive, setting forth:

 

(i)                                     The specific reason or reasons for such denied;

 

(ii)                                  The specific reference to pertinent provisions of this
Agreement on which such denial is based;

 

(iii)                               A description of any additional material or information
necessary for the Executive to perfect his claim and an explanation why such
material or such information is necessary;

 

(iv)                              Appropriate information as to the steps to be taken if
the Executive wishes to submit the claim for review; and

 

(v)                                 The time limits for requesting the review under (c)
below.

 

(c)                                  Request for Claim Decision Review.  Within thirty (30) days after receipt by the
Executive of the written opinion described above, the Executive may request in
writing that the President of the Company review the description of the
Company.  Such request must be addressed
to the President of the Company, at its then principal place of business.  The Executive of his duly authorized
representative may, but need not, review the pertinent documents and submit
issues and comments in writing for consideration by the Company.  If the Executive does not request a review of
the Company’s determination by the President of the Company within such 30-day
period, he shall be barred and estopped from challenging the Company’s determination.  Within thirty (30) days after the President’s
receipt of a request for review, he will review the Company’s
determination.  After considering all
materials presented by the Executive, the President will render a written
opinion, written in a manner calculated to be understood by the Executive,
setting forth specific reasons for the decision and containing specific
references to the pertinent provisions of this Agreement on which the decision
is based.

 

6.2.                            Notices.  Any notice required to be delivered to the
Company, the Compensation Committee or the President of the Company by the
Executive hereunder shall be properly delivered to the Company when personally
delivered to (including by a reputable overnight courier), or actually received
through the U.S. mail, postage prepaid, by:

 

Old Second Bancorp, Inc.

37 South River Street

Aurora, IL 60506

 

Any notice required to be delivered to the Executive by the
Company, the Compensation Committee or the President of the Company hereunder
shall be properly delivered to the Executive when personally delivered to
(including by a reputable overnight courier), or actually

 

9

 

received through the U.S.
mail, postage prepaid, by the Executive at his last known address as reflected
on the books and records of the Bank.

 

Section 7.                                          Contractual
Rights and Legal Remedies

 

7.1.                            Contractual Rights to Benefits.   This Agreement establishes in the Executive
a right to the benefits to which the Executive is entitled hereunder.  However, except as expressly stated herein,
nothing herein contained shall require or be deemed to require, or prohibit or
be deemed to prohibit, the Company to segregate, earmark, or otherwise set
aside any funds or other assets, in trust or otherwise, to provide for any
payments to be made or required hereunder.

 

7.2.                            Legal Fees and Expenses.  The Company shall pay all legal fees, costs
of litigation, prejudgment interest, and other expenses which are incurred in
good faith by the Executive as a result of the Company’s refusal to provide the
Severance Benefits to which the Executive becomes entitled under this
Agreement.   In addition, if the
Executive shall resort to either litigation or arbitration in order to secure
the payment by the Company of the Severance Benefits, and the Executive is
successful in such litigation or arbitration, then the Company shall also pay
to the Executive an additional amount equal to 25% of the Severance Benefits.
Whether or not the Executive has been successful in such litigation or
arbitration shall also be determined in the same proceeding.

 

7.3.                            Arbitration.  The Executive shall have the right and option
to elect (in lieu of litigation) to have any dispute or controversy arising
under or in connection with this Agreement settled by arbitration, conducted
before a panel of three (3) arbitrators sitting in a location selected by the
Executive within fifty (50) miles from the location of his or her job with the
Company, in accordance with the rules of the American Arbitration Association
then in effect.  The Executive’s election
to arbitrate, as herein provided, and the decision of the arbitrators in that
proceeding, shall be binding on the Company and Executive.

 

Judgment may be entered on the award of the arbitrator in any
court having jurisdiction.  All expenses
of such arbitration, including the fees and expenses of the counsel for the
Executive, shall be borne by the Company.

 

7.4.                            Unfunded Agreement.  This Agreement is intended to be an unfunded
general asset promise for a select, highly compensated member of the Company’s
management and, therefore, is intended to be exempt from the substantive
provisions of the Employee Retirement Income Security Act of 1974 as amended.

 

7.5.                            Exclusivity of Benefits.  Unless specifically provided herein, neither
the provisions of this Agreement nor the benefits provided hereunder shall
reduce any amounts otherwise payable, or in any way diminish the Executive’s
rights as an employee of the Company, whether existing now or hereafter, under any
compensation and/or benefit plans (qualified or nonqualified), programs,
policies, or practices provided by the Company, for which the Executive may
qualify.

 

Vested benefits or other amounts which the Executive is
otherwise entitled to receive under any plan, policy, practice, or program of
the Company, at or subsequent to the Executive’s

 

10

 

date of Qualifying
Termination, shall be payable in accordance with such plan, policy, practice,
or program except as expressly modified by this Agreement.

 

7.6.                            Includable Compensation.  Severance Benefits provided hereunder shall
not be considered “includable compensation” for purposes of determining the
Executive’s benefits under any other plan or program of the Company.

 

7.7.                            Employment Status.  Nothing herein contained shall be deemed to
create an employment agreement between the Company or the Bank and the
Executive providing for the employment of the Executive by either the Company
or the Bank for any fixed period of time. 
The Executive’s employment with the Bank is terminable at will by the
Bank or the Executive and each shall have the right to terminate the Executive’s
employment with the Bank at any time, with or without Cause, subject to the
Company’s obligation to provide Severance Benefits as required hereunder.

 

In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, nor shall the
amount of any payment hereunder be reduced by any compensation earned by the
Executive as a result of employment by another employer, other than as provided
in Paragraph 2.3(d) herein.

 

7.8.                            Entire Agreement.  This Agreement represents the entire
agreement between the parties with respect to the subject matter hereof, and
supersedes all prior discussion, negotiations, and agreements concerning the
subject matter hereof, including, but not limited to, any prior severance
agreement made between the Executive and the Company.

 

7.9.                            Tax Withholding.  The Company shall withhold from any amounts
payable under this Agreement all federal, state, city, or other taxes as
legally required to be withheld.

 

7.10.                     Waiver of Rights.  Except as otherwise provided herein, the
Executive’s acceptance of Severance Benefits, the Gross-Up Payment (if
applicable), and any other payments required hereunder shall be deemed to be a
waiver of all rights and claims of the Executive against the company pertaining
to any matters arising under this Agreement.

 

7.11.                     Severability.  In the event any provision of the Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included.

 

7.12.                     Applicable Law.  To the extent not preempted by the laws of
the United States, the laws of the State of Illinois shall be the controlling
law in all matters relating to the Agreement.

 

[Remainder
of Page Intentionally Left Blank]

 

11

 

IN WITNESS
WHEREOF, the Company has executed this Agreement, to be effective as of the day
and year first written above.

 

	
  ATTEST:

  	
  OLD SECOND BANCORP, INC.

  
	
   

  	
   

  
	
  By:

  	
  Robin
  Hodgson

  	
   

  	
  By:

  	
    William B.
  Skoglund

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Chairman & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/
  William B. Skoglund

  	
   

  
	
   

  	
  Name

  
							

 

S-1

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