Exhibit 10.4
WEST SUBURBAN BANCORP,
INC.
RESTATED EMPLOYMENT AGREEMENT
– DUANE G. DEBS
This RESTATED EMPLOYMENT AGREEMENT
(this “ Agreement ”), is made and entered into
as of the 29 th
day of December, 2008 (the
“ Effective Date ”), by and between WEST
SUBURBAN BANCORP, INC., an Illinois corporation (the “
Employer ”), and DUANE G. DEBS, an Illinois resident
(the “ Executive ”).
R
E C I
T A L S :
A.
The Employer owns all of the issued and outstanding capital stock
of West Suburban Bank, Lombard, Illinois (the “ Bank
”).
B.
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.
C.
Additionally, the Employer recognizes that circumstances may arise
which may result in a change in control of the Employer and/or the
Bank (through acquisition or otherwise) thereby causing uncertainty
with respect to the Executive’s employment without regard to
the competence or past contributions of the Executive and that such
uncertainty may result in the loss to the Employer and/or the Bank
of the valuable services provided by the Executive. In such
circumstances, the Employer and the Executive wish to provide
reasonable security to the Executive against changes in the
Executive’s employment relationship with the Employer and/or
the Bank.
D.
The Executive currently serves as the President and Chief Financial
Officer of Employer and the Senior Vice President, Comptroller and
Trust Officer of the Bank pursuant to that certain Employment
Agreement dated March 8, 2004, as amended (the “
Employment Agreement ”).
E.
The parties desire to amend and restate the Employment Agreement in
accordance with the terms, and subject to the conditions, set forth
herein in order to comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended,
and the related U.S. Treasury Department regulations and guidance
promulgated thereunder (“ Code Section 409A
”).
NOW, THEREFORE,
in consideration of the promises and
of the covenants and agreements hereinafter contained, it is
covenanted and agreed by and between the parties hereto as
follows:
A
G R E
E M E N T S
:
1.
TERM OF EMPLOYMENT WITH AUTOMATIC
RENEWAL PROVISIONS. The period of the Executive’s
employment under this Agreement shall be deemed to have commenced
on the Effective Date and shall continue for a period of
approximately three (3) years through December 31,
2011. The term of employment of the
Executive under this Agreement shall
automatically be extended for one (1) additional year on
December 31 st
of each year beginning
December 31, 2009, unless either the Employer or the Executive
notifies the other party, by written notice delivered no later than
November 1 st
of such year, that the term of
employment of the Executive under this Agreement shall not be
extended for an additional year. In addition, upon the
occurrence of a Change in Control (as defined below), the term of
employment of the Executive under this Agreement shall be
automatically renewed and extended to provide a term of employment
(in accordance with the terms, and subject to the conditions, set
forth herein) equal to a period of three (3) years from the
date of the consummation of the Change in Control.
2.
POSITION AND DUTIES. The Employer hereby continues to employ
the Executive as the President and Chief Financial Officer of the
Employer and as the Senior Vice President, Comptroller and Trust
Officer of 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 and its affiliates, including
the Bank. 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 accoutrements as shall
be reasonably necessary and appropriate in the light of such
assigned duties.
3.
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 SALARY . The Executive shall receive an aggregate
annual minimum base salary at the rate of two hundred fourteen
thousand two hundred forty four and 91/100 dollars ($214,244.91)
payable in installments in accordance with the regular payroll
schedule of the Bank (“ Base Salary ”). Such Base
Salary shall be subject to review annually commencing in 2009 and
shall be maintained or increased during the term hereof in
accordance with the Employer’s established management
compensation policies and practices.
(b)
BONUS . The Executive shall be eligible for an annual
bonus (“ Bonus
”) with
respect to each fiscal year of the Employer in accordance with the
Employer’s compensation and bonus policies and practices for
senior executive officers. The amount of the Bonus, if any,
shall be determined by the Compensation Committee of the Board (the
“ Compensation
Committee ”). The Bonus,
if any, shall be paid no later than March 15
th
of the year
following the calendar year in which the Bonus is
earned.
(c)
DEFERRED COMPENSATION . The Employer shall make
contributions for the benefit of the Executive to the
Employer’s Directors and Senior Management
Deferred
2
Compensation Plan
(“ Deferred
Compensation Plan ”), including any
successor plan or program thereto, in an annual amount of not less
than twenty-five thousand dollars ($25,000).
(d)
VACATIONS . The Executive shall receive paid vacation
days of at least such number of paid vacation days as the Executive
shall be entitled to receive as of the date hereof in accordance
with the Employer’s vacation policy in effect as of the date
hereof. The method of accrual, forfeiture and scheduling of
vacation days shall be in accordance with, and subject to, the
Employer’s general vacation policies and
practices.
(e)
LONG TERM CARE INSURANCE . The Employer shall provide
the Executive and the Executive’s spouse with coverage under,
and shall pay the premiums with respect to, long term care
insurance in accordance with the terms, and subject to the
conditions, as the Employer shall provide to other senior executive
officers. The Executive acknowledges that this benefit shall
be subject to the continued availability of such long term care
insurance from the insurer under which this benefit is provided to
other senior executives from time to time.
(f)
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 seminars, conferences and meetings relating to
the business of the Employer consistent with the Employer’s
established policies in that regard; provided, that such
reimbursement will be made as soon as practicable and, when taxable
to the Executive, shall be made no later than the end of the
calendar year following the year in which the expenses or other
charges were incurred.
(g)
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 the following to the extent provided,
if at all, to other senior executives of the Employer:
pension; profit-sharing; employee stock ownership plan;
supplemental retirement; incentive compensation; bonus; disability
income; split-dollar life insurance; group life; health, medical
(including dental, vision and prescription drug insurance, if any)
and hospitalization insurance; long term care 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.
(h)
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.
4.
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
3
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 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.
5.
TERMINATION. The Executive’s employment during the term
of this Agreement may be terminated by the Employer or the
Executive without any breach of this Agreement only under the
circumstances described in this Section 5 (where such
termination constitutes a “separation from service”
pursuant to Code Section 409A):
(a)
AGREEMENT
NON-EXTENSION OR EMPLOYMENT TERMINATION BY THE EMPLOYER AND
TERMINATION BY THE EXECUTIVE .
(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 (c) of this
Section 5 (TERMINATION FOR CAUSE), the Employer shall pay the
Executive a lump sum payment equal to the sum of the amount of his
Base Salary payable for the remainder of the current term, plus the
amount of the Executive’s annual Bonus(es) payable for the
remainder of the current term based on an amount equal to the
average of his most recent three (3) years’ annual Bonus
amounts. Such payment shall be paid to the Executive within
thirty (30) days of the Executive’s termination of
employment. In addition, the Employer shall continue to
provide coverage for the Executive at the same or equivalent level
as the Executive’s coverage prior to his termination of
employment under all plans and benefits otherwise provided to
senior executives of the Employer (including without limitation,
group health, life, disability and long term care insurance
coverage, club dues, and Deferred Compensation Plan contributions)
by payment of the applicable premiums and reimbursements in
accordance with the Employer’s standard payment practice,
unless unable to continue such coverage by law, for the remainder
of the term of this Agreement, provided, however , that the
payment of these amounts by the Employer shall not offset or
diminish any compensation or benefits accrued as of the date of
termination. In the event of a non-extension of this
Agreement by the Employer in accordance with the provisions of
Section 1, the Employer shall: (A) continue to pay
the Executive the Base Salary then payable to the Executive
pursuant to the Employer’s standard payroll practice;
(B) continue to pay the
4
Executive an
annual Bonus in an amount equal to the average of his most recent
three (3) years’ annual Bonus amounts pursuant to the
Employer’s standard Bonus payment practices; and
(C) continue to provide coverage for the Executive at the same
or equivalent level as the Executive’s coverage prior to the
non-extension under all plans and benefits otherwise provided to
senior executives of the Employer (including without limitation,
group health, life, disability and long term care insurance
coverage, club dues, and Deferred Compensation Plan contributions)
by payment of the applicable premiums and reimbursements in
accordance with the Employer’s standard payment practice,
unless unable to continue such coverage by law, for the remainder
of the term of this Agreement; provided, however , that in
the circumstance where the term of this Agreement is not extended,
the Executive must remain employed with the Employer to receive
such payments and benefits; further 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 the
notice of non-extension. In addition, within thirty (30) days
of the Executive’s termination of employment, the Employer
shall pay the Executive: (a) such Base Salary and vacation pay
(for unused vacation days in accordance with the Employer’s
policies and practices with respect to vacation pay) as shall have
accrued and remains unpaid through the effective date of the
termination; (b) Bonuses previously determined by the
Compensation Committee for any prior fiscal year(s) that
remain unpaid; (c) for all accrued and unused sick days; and
(d) reimbursement of previously incurred expenses eligible for
reimbursement pursuant to the Employer’s policies and
practices concerning reimbursement of expenses. Further
provided, that the Executive shall also have such rights to
payments, if any, as are provided under the terms of the Deferred
Compensation Plan, the Amended and Restated Life Insurance
Agreement entered into by and between the Employer and the
Executive and as amended from time to time and such retirement
plans under which the Executive participated at the time of the
termination of his employment.
(ii)
In the event that the term of this Agreement is not extended in
accordance with the provisions of Section 1, the Executive may
elect to terminate his employment and upon such termination, the
Employer shall pay the Executive a lump sum amount equal to nine
(9) times the sum of: (A) the monthly Base Salary then
payable to the Executive; plus (B) one twelfth (1/12) of the
base annual deferred compensation contribution made by the Employer
under the Deferred Compensation Plan for the year prior to the
Executive’s termination. The election by the Executive
to terminate his employment pursuant to this subparagraph
(a)(ii) must be delivered in writing to the Employer within
forty-five (45) days of the later of his receipt of notice of the
non-extension of the term of this Agreement or
December 31 st of the year during
which such notice is delivered. Payment to the Executive will
be made within thirty (30) days of such termination. In
addition, within thirty (30) days of the Executive’s
termination of employment, the Employer shall pay the Executive:
(a) such Base Salary and vacation pay (for unused vacation
days in accordance with the Employer’s policies and practices
with respect to vacation pay) as shall have accrued and remains
unpaid through the effective date of the termination;
(b) Bonuses previously determined by the Compensation
Committee for any prior fiscal year(s) that remain unpaid;
(c) for all accrued and unused sick days; and
(d) reimbursement of previously incurred expenses eligible for
reimbursement pursuant to the Employer’s policies and
practices concerning reimbursement of expenses. Further
provided, that the Executive shall also have such rights to
payments, if any, as are provided under the terms of the Deferred
Compensation Plan, the Amended and Restated Life Insurance
Agreement entered into by and
5
between the
Employer and the Executive and as amended from time to time and
such retirement plans under which the Executive participated at the
time of the termination of his employment.
(iii)
Unless a Change in Control shall have occurred, 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, as
permitted pursuant to Code Section 409A, until such time as
the Employer is in capital compliance.
(b)
CONSTRUCTIVE DISCHARGE . If at any time during the
term of this Agreement, except in connection with a termination
pursuant to paragraph (c) (TERMINATION FOR CAUSE) of this
Section 5, 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 the
initial existence of such Constructive Discharge condition, to
terminate his services hereunder, effective as of the thirtieth
(30 th ) day after such notice, and
the Executive shall have no rights or obligations under this
Agreement other than as provided in Sections 4 and 8 hereof;
provided, however , the Employer shall have thirty (30) days
from the date of such notice in which to cure the condition giving
rise to a Constructive Discharge, if curable. If, during such
thirty (30) day period, the Employer cures the condition giving
rise to Constructive Discharge, then the Executive’s notice
of termination hereunder shall not be effective, the
Executive’s employment shall continue until otherwise
terminated under this Agreement, and no benefits shall be due under
this Agreement with respect to such occurrence. If the
Employer fails to cure the condition giving rise to Constructive
Discharge within such thirty (30) day period, the Executive
shall be entitled to a lump sum payment of compensation and
benefits and continuation of all plans and benefits as if such
termination of his employment was pursuant to subparagraph
(a)(i) of this Section 5 to be paid within thirty (30)
days of the Executive’s termination of
employment.
(i)
For purposes of this Agreement, the Executive shall be
“ Constructively
Discharged ” upon the occurrence
of any one of the following events:
(A)
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
(B)
The Executive shall fail to be vested by the Employer with the
powers and authority of his appointed office; or
(C)
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
(D)
The Employer otherwise commits a material breach of its obligations
under this Agreement.
(c)
TERMINATION FOR CAUSE . The Executive’s
employment hereunder may be terminated for Cause (as hereinafter
defined). “ Cause ” shall mean:
(i) the Executive’s death; (ii) a material
violation by the Executive of any applicable material law or
regulation respecting
6
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. The Executive’s employment under 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 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. Upon the
Executive’s termination for Cause, the Employer shall have no
obligations to the Executive other than payment, within thirty (30)
days, of: (A) such Base S
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