EXHIBIT (10.10)
TRANSITIONAL EMPLOYMENT AGREEMENT
(SENIOR OFFICER GROUP)
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This Agreement is made as of the 26th day of January, 1999, by and between
First Oak Brook Bancshares, Inc., a Delaware corporation (the "Employer") and
the undersigned executive officer (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive has been employed for some years past by the
Employer and/or one or more of its subsidiaries; and
WHEREAS, the Employer wishes to assure both itself and the Executive of
continuity of management in the event of any actual Change in Control (as
defined in Paragraph 2) of the Employer on the terms and conditions set forth
herein; and
WHEREAS, the Executive desires to provide such services and continuity; and
WHEREAS, to achieve this purpose, the Board of Directors of the Employer
considered and approved this Agreement to be entered into with the Executive as
being in the best interests of the Employer and its stockholders;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Term This Agreement shall become effective upon the occurrence of
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a Change in Control (as defined in Paragraph 2, below) (hereinafter called the
"Effective Date of this Agreement") and shall remain in effect for a term
continuing until the end of the thirty-sixth (36th) calendar month following the
month in which the Effective Date of this Agreement occurs; provided, however,
that, anything in this Agreement to the contrary notwithstanding, if a Change in
Control occurs and if the Executive's employment with the Employer was
terminated within six (6) months prior to the date on which the Change in
Control occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (a) was at the request of a third party who was taking
steps reasonably calculated to effect a Change in Control or (b) otherwise arose
in connection with or anticipation of a Change in Control, then for all purposes
of this Agreement the "Effective Date of this Agreement" shall mean the date
immediately prior to the date of such termination of employment.
2. Change in Control. For the purposes of this Agreement, a "Change in
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Control" shall be deemed to have occurred if:
(a) Any "person" is or becomes the "beneficial owner" directly or
indirectly of securities of the Employer representing more than
fifty percent (50%) of the combined voting power of the
Employer's then outstanding securities entitled to vote generally
in the election of directors (the "Voting Stock"); or
(b) Continuing Directors cease for any reason to constitute at least
a majority of the entire Board of Directors of the Employer; or
(c) The consummation of a business combination involving the Employer
(or any direct or indirect subsidiary of the Employer) occurs,
unless after such a business combination (i) the shareholders of
the Employer immediately prior to the business combination
continue to own, directly or indirectly, more than fifty percent
(50%) of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors of the new (or continuing) entity immediately after the
business combination, and (ii) at least a majority of the members
of the board of directors of the entity resulting from the
business combination were Continuing Directors at the time of the
execution of the initial agreement, or of the action of the
Board, providing for such business combination; or
(d) A complete liquidation or dissolution of the Employer or
consummation of the sale or other disposition of all or
substantially all of the assets of the Company.
For purposes of foregoing, "person" and "beneficial owner" shall be as defined
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended,
and the regulations thereunder. A Change in Control shall not be deemed to have
occurred under subparagraph (a) above, if the beneficial owner is a corporation
owned directly or indirectly by the shareholders of the Employer in
substantially the same proportions as their ownership of the Voting Stock, an
employee benefit plan of the Employer or any subsidiary of the Employer, or any
person who, as of January 26, 1999, is the beneficial owner of more than fifty
percent (50%) of the Voting Stock. For purposes of subparagraph (b), an
individual will be a "Continuing Director" if he or she is a director of the
Employer on January 26, 1999, or becomes a director of the Employer thereafter,
provided the individual was elected, or was nominated for an election to occur
at a meeting of stockholders, by a majority of the Continuing Directors still in
office; provided, however, that in no event shall an individual be considered a
Continuing Director if the individual was designated for election or nomination
by a person who has entered into an agreement with the Employer to effect an
acquisition described in subparagraph (a) or a business combination described in
subparagraph (c). For purposes of subparagraph (c), a business combination
shall mean a merger or consolidation, or an issuance of securities by the
Employer in connection with a merger or consolidation, involving the Employer
(or any direct or indirect subsidiary of the Employer).
3. Employment. The Employer hereby agrees to continue or to cause one of
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its affiliates to continue the Executive in its employ for a period of thirty-
six (36) months commencing on the Effective Date of this Agreement (the
"Employment Period") with title, duties and responsibilities comparable to those
of the Employer's or Oak Brook Bank's senior bank officers immediately prior to
the Effective Date of this Agreement, as the same may from time to time be
assigned or reassigned to the Executive by the Board of Directors of the
Employer or such affiliate which employs Executive.
4. Compensation, Compensation Plans, Benefits and Perquisites. During the
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Employment Period, the Executive shall:
(a) Receive an annual salary at a rate which is not less than his
rate of annual salary immediately prior to the Effective Date of
this Agreement, with the opportunity for increases from time to
time thereafter which are in accordance with the regular
practices of the Employer or its affiliates (which for purposes
of this Agreement, shall mean any corporation or enterprise
which, as of a given date, is a member of the same controlled
group of corporations, the same group of trades or businesses
under common control or the same affiliated service group,
determined in accordance with Section 414(b), (c), (m) or (o) of
the Code (as defined in Paragraph 8(a) hereof), as is the
Employer) with respect to executives with comparable duties;
(b) Be eligible to participate on a comparable basis, in each
calendar year during which the Employment Period runs, in an
annual bonus program maintained by the Employer or its affiliates
in which executives with comparable duties are eligible to
participate, provided that the annual bonus payable thereunder
shall not be less than the average annual bonus accrued for the
Executive during the three calendar years immediately preceding
the Effective Date of this Agreement;
(c) Be eligible to participate on a comparable basis in the stock
option or other equity incentive plans and any other bonus
incentive compensation plans maintained from time to time by the
Employer or its affiliates during the Employment Period and in
which executives with comparable duties are eligible to
participate;
(d) Be entitled to participate (i) in any group or executive medical,
dental, disability, life insurance, retirement, profit sharing,
thrift and other plans and programs, including nonqualified and
deferred compensation plans and programs, maintained from time to
time by the Employer or its affiliates during the Employment
Period and in which executives with comparable duties are
eligible to participate and (ii) in the Executive Medical Plan,
split-dollar and other special life insurance arrangements, to
the same extent the Executive participated in such benefits
before the Effective Date of the Agreement; and
(e) Be entitled to receive vacation and perquisites which are
provided by the Employer or its affiliates from time to time
during the Employment Period to executives with comparable
duties, but in no event less favorable than the vacation and
perquisites to which he was entitled immediately prior to the
Effective Date of this Agreement (including, but not limited to,
company car and allowances, club memberships and dues,
subscriptions and travel).
5. Termination During Employment Period.
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(a) For purposes of this Agreement, the term "termination" shall mean
(i) termination by the Employer of the employment of the
Executive with the Employer and all of its affiliates for any
reason other than death, disability or "cause" (as defined
below), or (ii) resignation of the Executive for "constructive
discharge" (as defined below).
(b) The term "constructive discharge" shall mean the Executive's
resignation from the Employer and all of its affiliates upon any
one of the following:
(i) the failure of the Employer to pay or provide the
compensation, benefits and perquisites contemplated by
Paragraph 4, other than an isolated, insubstantial and
inadvertent failure not taken in bad faith and which is
remedied by the Employer promptly after receipt of notice
thereof given by Executive;
(ii) there shall have occurred a material diminution in the
Executive's duties and responsibilities from those in
effect prior to the Effective Date of this Agreement, other
than an isolated, insubstantial and inadvertent failure not
taken in bad faith and which is remedied by the Employer
promptly after receipt of notice thereof given by
Executive;
(iii) the Employer changes the Executive's (A) primary employment
location to a place that is more than 35 miles from
Executive's primary employment location as of the Effective
Date of the Agreement and/or (B) regularly scheduled work
hours significantly from such hours as of the Effective
Date of the Agreement; and/or
(iv) at any time for any reason prior to the first anniversary
of the Effective Date of the Agreement provided that at the
time of such resignation the employment of Xxxxxxx X.
Xxxxxx, Xx. with the Employer and all affiliates has
terminated or there has been an announcement by the
Employer or Xx. Xxxxxx that such termination will occur
prior to the 18-month anniversary of Effective Date of the
Agreement.
(c) The term "cause" means (i) felony conviction resulting from an
act or acts of dishonesty or breach of trust, other than a felony
predicated upon the
Executive's vicarious liability or (ii) the Executive's continued
and willful failure to substantially perform his duties under
this Agreement. For purposes of this paragraph, no act or failure
to act on the Executive's part will be considered "willful"
unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the
interests of the Employer and its affiliates or not opposed to
the interests of the Employer and its affiliates.
6. Confidentiality. The Executive agrees that during and after the
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Employment Period, he shall retain in confidence any confidential information
known to him concerning the Employer and its affiliates and their respective
businesses for as long as such information is not publicly disclosed.
7. Termination Benefits. In the event of a termination of the
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Executive during the Employment Period, the Employer shall provide or shall
cause one or more of its affiliates to provide, and the Executive shall, upon
execution of a Release and Severance Agreement in the form attached hereto as
Appendix A, shall be entitled to receive the following:
(a) The Executive shall, notwithstanding such termination, be
entitled to continue to receive salary payments for thirty-six
(36) months from the date of termination (which thirty-six month
period shall be treated hereunder as a continuation of Employment
Period) based on the rate of annual salary equal to the average
annual salary received by the Executive during the five calendar
years immediately preceding the calendar year in which the
Effective Date of this Agreement occurs (the "Averaging Period"),
provided that the payments pursuant to this Paragraph 7(a) shall
be subject to reduction in accordance with Paragraph 8(a).
(b) The Executive shall receive a bonus payment with respect to each
calendar year ending within such thirty-six month period equal to
the average annual bonus payments received by the Executive
during the Averaging Period. The bonus payment for each calendar
year shall be made within 30 days of the end of the calendar year
to which such bonus relates. The bonus payments described in this
Paragraph 7(b) shall be subject to reduction in accordance with
Paragraph 8(a).
(c) Payment of all accrued but deferred bonuses as of the Effective
Date of this Agreement, or if later, the date of termination,
which payments shall be made in installments on such dates and in
such amounts as such bonuses would have been paid notwithstanding
such termination.
(d) The Executive (and, if applicable, Executive's dependents) shall
be entitled to maintain group medical and dental coverage under
the continuation coverage provisions of such plans ("COBRA
Coverage"), which entitlement shall, notwithstanding any other
provisions of the group plan to the contrary, be subject to
termination only in the event of the failure of the Executive or
the dependent to timely pay the appropriate premium for such
coverage, provided, that the Employer shall pay on behalf of the
Executive
(and, if applicable, the Executive's dependents) the appropriate
premium for the first 36 months of such coverage, and, provided
further that such coverage shall be secondary to any group
coverage (including Medicare or any government-sponsored or
mandated program) subsequently obtained or covering the Executive
or dependent.
(e) From and after the date of a termination until full satisfaction
of the obligations of the Employer hereunder and under the plans,
programs and arrangements referred to herein and under any other
agreement with respect to which Employer may be obligated to make
post-employment payments to the Executive, the Employer shall
maintain a grantor trust in form and substance reasonably
acceptable to Executive to assist the Employer in the discharge
of its obligations hereunder and under any other nonqualified,
deferred compensation plan maintained by the Employer under which
Executive has an interest. The Employer shall deposit assets and
make contributions into the grantor trust in amounts necessary to
maintain the assets of the grantor trust at a level equal to the
present value of the obligations of the Employer to the Executive
under this Agreement and any such plans, programs or
arrangements. Such amounts due shall be paid from the grantor
trust or by the Employer directly, in which case the Employer
shall be entitled to reimbursement form the grantor trust.
8. Reduction of Payments Due to Excise Tax.
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(a) If it is determined (in the reasonable opinion of independent
public accountants then regularly retained by the Employer in
consultation with tax counsel acceptable to Executive), that any
amount payable to Executive by the Employer under this Agreement
or any other plan, program or arrangement under which Executive
participates or is a party would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"),
subject to the excise tax imposed by Section 4999 of the Code, as
amended from time to time (the "Excise Tax"), then the amounts
payable to the Executive shall be reduced to the extent necessary
so that no portion of such amounts payable to the Executive is
subject to the Excise Tax. The determination of the amount of
reduction, if any, in the amounts payable to the Executive under
Paragraphs 7(a) and 7(b) under Paragraphs 7(a) and 7(b) shall be
made in good faith by the Employer's Compensation Committee after
consultation with the independent public accountants then
regularly retained by the Employer and tax counsel acceptable to
the Executive, and a written statement setting forth the
calculation thereof shall be provided to the Executive. If
amounts payable to the Executive are to be reduced pursuant to
this Paragraph 8(a), the Employer's Compensation Committee, after
consultation with the Executive, shall determine the payments to
be so reduced.
(b) In the event it is determined that the Excise Tax may be imposed
on the Executive prior to any reductions pursuant to the
preceding Paragraph
8(a), the Employer and the Executive agree to take such actions
as they may, in good faith, agree to take to avoid any such
reduction.
(c) The Employer shall withhold from any amounts paid under this
Agreement the amount of any applicable federal, state, or local
taxes then required to be withheld. Computations under this
Paragraph 8 shall be made by the independent public accountants
then regularly retained by the Employer in consultation with tax
counsel acceptable to Executive. The Employer shall pay all
accountants' and tax counsel's fees and expenses.
9. No Obligation to Mitigate Damages. The Executive shall not be
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obligated to seek other employment in mitigation of amounts payable or
arrangements made under the provisions of this Agreement and the obtaining of
any such other employment shall in no event effect any reduction of the
Employer's obligations under this Agreement.
10. Enforcement; Arbitration.
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(a) In the event the Employer shall fail to pay any amounts due to
Executive or any successor under this Agreement or any plan,
program or arrangement referred to herein as they come due, the
Employer agrees to pay interest on such amounts at the prime rate
of interest as from time to time published in The Wall Street
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Journal (Midwest Edition) plus four percent (4%) per
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annum until paid.
(b) Each of the Employer and the Executive or any successor shall
have the right and option to elect to have any dispute or
controversy arising under or in connection with this Agreement,
or any plan, program or arrangement referred to herein, or any
breach thereof, settled exclusively by arbitration, conducted
before an arbitrator in accordance with rules of the American
Arbitration Association then in effect. Judgment may be entered
on the award of the arbitrator in any court having jurisdiction.
Any such arbitration shall be held in Chicago, Illinois.
(c) The Employer shall pay all reasonable legal fees, costs of
litigation, and other reasonable expenses incurred by the
Executive or any successor who is successful pursuant to legal
judgment, arbitration or settlement in a challenge resulting from
the Employer's refusal to pay any amounts due under this
Agreement or any plan, program or arrangement referred to herein
to which it is determined that the Executive or successor is
entitled, or as a result of the Employer's contesting the
validity, enforceability or interpretation of this Agreement or
any such plan, program or arrangement.
(d) As a condition precedent to the commencement of any action under
this Agreement or any plan, program or arrangement referred to
herein, each of the Employer or the Executive or any successor
agree to provide written notice ("initial notice") at least
fifteen (15) business days prior to initiating any such action
wherein such party shall (i) agree to submit such dispute to non-
binding mediation to be held in Chicago, Illinois at
JAMS/Endispute (or a similar organization) within 30 days of such
notice and (ii) indicate
whether such party is invoking arbitration pursuant to Paragraph
10(b) above. The party receiving such notice shall agree to
submit to such mediation and, if the initial notice did not
include an election invoking arbitration, then the receiving
party may by written notice within ten (10) business days
following receipt of the initial notice elect to invoke
arbitration pursuant to said Paragraph 10(b).
11. Indemnification. In the event that legal action is instituted against
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Executive during or after the term hereof by a third party (or parties) based on
the performance or nonperformance by Executive of his duties hereunder, the
Employer will assume the defense of such action by its attorney or attorneys
selected by the Employer reasonably satisfactory to the Executive and advance
the costs and expenses thereof (including reasonable attorneys' fees) without
prejudice to or waiver by the Employer of its rights and remedies against
Executive. In the event that there is a final judgment entered against Executive
in any such litigation, and Employer's Board of Directors determines that
Executive should, in accordance with its charter, By-Laws, or insurance
reimburse the Employer, Executive shall be liable to Employer for all such costs
and expenses paid or incurred by it in the defense of any such litigation (the
"Reimbursement Amount"). The Reimbursement Amount shall be paid by Executive
within thirty (30) days after rendition of the final judgment. The Employer
shall be entitled to set off the reimbursement amount against all sums which may
be owed or payable by the Employer to Executive hereunder or otherwise. The
parties shall cooperate in the defense of any asserted claim, demand or
liability against Executive or the Employer or its subsidiaries or affiliates.
The term "final judgment" as used herein shall be defined to mean the decision
of a court of competent jurisdiction, and in the event of an appeal, then the
decision of the appellate court, after petition for rehearing has been denied,
or the time for filing the same (or the filing of further appeal) has expired.
The rights to indemnification under this Paragraph 11 shall be in addition
to any rights which Executive may now or hereafter have under the charter or by-
laws of the Employer or any of its affiliates, under any insurance contract
maintained by the Employer or any of its affiliates or any agreement between
Executive and the Employer or any of its affiliates.
12. Payment in the Event of Death. Upon the death of the Executive
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prior to a termination, any payment due and owing by the Employer to Executive
under this Agreement shall be made to such beneficiary as Executive may
designate in writing, or failing such designation, the executor of his estate.
Upon the death of the Executive after a termination has occurred, then the
beneficiary designated by the Executive or, if no beneficiary has been
designated, his executor shall be entitled to a lump sum death benefit equal to
the present value of the payments that were remaining to be paid under Paragraph
7(a) as of the date of death. Such lump sum present value payment shall be
determined using an interest rate per annum equal to the prime rate of interest
as published in The Wall Street Journal (Midwest Edition) on the first business
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day of the month in which the Executive's death occurred and shall be paid
within 30 days of the date of death. Such payments shall be in addition to the
amount of the bonus payment, if any, which may thereafter be due under Paragraph
7(b), any other death benefits provided by the Employer or under any plan,
program or arrangement maintained by the Employer.
13. Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the
Executive at the last address he has filed in writing the Employer or, in the
case of the Employer, at its principal executive offices.
14. Non-Alienation. The Executive shall not have any right to pledge,
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hypothecate, anticipate or in any way create a lien upon any amounts provided
under this Agreement; and no benefits payable hereunder shall be assignable in
anticipation of payment either by voluntary or involuntary acts, or by operation
of law, except by will or the laws of descent and distribution.
15. Governing Law. The provisions of this Agreement shall be construed
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in accordance with the laws of the State of Illinois.
16. Amendment. This Agreement may be amended or canceled by mutual
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agreement of the parties in writing (which, with respect to the Employer in the
case of an amendment prior to the Effective Date of the Agreement, shall have
been approved by resolution of the Board of Directors of the Employer) without
the consent of any other person and, so long as the Executive lives, no person,
other than the parties hereto, shall have any rights under or interest in this
Agreement or the subject matter hereof.
17. Binding Effect; Successors. Except as otherwise provided herein,
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this Agreement shall be binding upon and inure to the benefit of the Employer
and any successor of the Employer and to the benefit of Executive's executors,
administrators, legal representatives, heirs and legatees. The Employer shall
require any successor or assignee, whether direct or indirect, by purchase,
merger, consolidation or otherwise, expressly and unconditionally to assume and
agree to perform the Employer's obligations under this Agreement, whereupon such
successor or assignee shall become the Employer hereunder.
18. Severability. In the event that any provision or portion of this
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Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Employer has
caused this Agreement to be executed in its name on its behalf by the
undersigned officers, duly authorized, all as of the day and year first above
written.
___________________________________
Executive
FIRST OAK BROOK BANCSHARES, INC.,
a Delaware Corporation
By:________________________________
Its: President
ATTEST:
_______________________
Secretary
APPENDIX A
RELEASE AND SEVERANCE AGREEMENT
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THIS RELEASE AND SEVERANCE AGREEMENT is made and entered into this ____ day
of _______________, _____ by and between First Oak Brook Bancshares, Inc., its
subsidiaries and affiliates (collectively "XXXX") and
_____________________________ (hereinafter "EMPLOYEE").
EMPLOYEE'S employment with XXXX terminated on ______________, ______; and
EMPLOYEE has voluntarily agreed to the terms of this RELEASE AND SEVERANCE
AGREEMENT in exchange for Termination Benefits under the Transitional Employment
Agreement ("Transitional Agreement") to which EMPLOYEE otherwise would not be
entitled.
NOW THEREFORE, in consideration for Termination Benefits provided under the
Transitional Agreement, EMPLOYEE on behalf of himself and his spouse, heirs,
executors, administrators, children, and assigns does hereby fully release and
discharge XXXX, its officers, directors, employees, agents, subsidiaries and
divisions, benefit plans and their administrators, fiduciaries and insurers,
successors, and assigns from any and all claims or demands for wages, back pay,
front pay, attorney's fees and other sums of money, insurance, benefits,
contracts, controversies, agreements, promises, damages, costs, actions or
causes of action and liabilities of any kind or character whatsoever, whether
known or unknown, from the beginning of time to the date of these presents,
relating to his employment or termination of employment from XXXX, including but
not limited to any claims, actions or causes of action arising under the
statutory, common law or other rules, orders or regulations of the United States
or any State or political subdivision thereof including the Age Discrimination
in Employment Act and the Older Workers Benefit Protection Act.
EMPLOYEE acknowledges that EMPLOYEE'S obligations pursuant to Paragraph 6
of the Transitional Agreement relating to the use or disclosure of confidential
information shall continue to apply to EMPLOYEE.
This Release and Settlement Agreement supersedes any and all other
agreements between EMPLOYEE and XXXX except agreements relating to proprietary
or confidential information belonging to XXXX, and any other agreements,
promises or representations relating to severance pay or other terms and
conditions of employment are null and void.
This release does not affect EMPLOYEE'S right to any benefits to which
EMPLOYEE may be entitled under any employee benefit plan, program or arrangement
sponsored by XXXX, including but not limited to the Transitional Agreement and
the plans, programs and arrangements referred to therein.
EMPLOYEE and XXXX acknowledge that it is their mutual intent that the Age
Discrimination in Employment Act waiver contained herein fully comply with the
Older Workers Benefit Protection Act. Accordingly, EMPLOYEE acknowledges and
agrees that:
(a) The Termination Benefits exceed the nature and scope of that to
which he would otherwise have been legally entitled to receive.
(b) Execution of this Agreement and the Age Discrimination in
Employment Act waiver herein is his knowing and voluntary act;
(c) He has been advised by XXXX to consult with his personal attorney
regarding the terms of this Agreement, including the
aforementioned waiver;
(d) He has had at least forty-five (45) calendar days within which to
consider this Agreement;
(e) He has the right to revoke this Agreement in full within seven
(7) calendar days of execution and that none of the terms and
provisions of this Agreement shall become effective or be
enforceable until such revocation period has expired;
(f) He has been informed in writing of (i) the eligibility factors
under the Plan, (ii) the group of employees, including the job
title and age of each, eligible to receive Termination Benefits,
(iii) the ages of all individuals in the same job classification
or organizational unit who are not eligible to receive
Termination Benefits, and (iv) any time limit applicable to the
Plan;
(g) He has read and fully understands the terms of this agreement;
and
(h) Nothing contained in this Agreement purports to release any of
EMPLOYEE's rights or claims under the Age Discrimination in
Employment Act that may arise after the date of execution.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
indicated above.
FIRST OAK BROOK BANCSHARES, INC., EMPLOYEE
for itself and
its Subsidiaries and Affiliates
By:__________________________ _______________________
Its:_________________________
