EXHIBIT 10
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CHANGE OF CONTROL LETTER AGREEMENT
Dear:
The Board of Directors of Community Bank-Wheaton/Xxxx Ellyn (the
"Bank," which reference shall include Community Financial Shares, Inc.
("CFS"), the holding company of the Bank, has determined that it is
advisable and in the best interests of the Bank, CFS and its
stockholders, to provide reasonable assurance to certain key employees
that, upon a change of control of the Bank or of CFS, appropriate
severance arrangements are in place in the event of the involuntary
termination of your employment, other than for good cause as specified
below.
The following is proposed as an inducement to you to remain in
the employ of the Bank and to dedicate your efforts to its best
interests:
SECTION 1. If, at any time within eighteen (18) months following
the "change of control" of the Bank or CFS, either: (i) your
employment is terminated by reason of your disability, death or
retirement pursuant to any retirement plan or policy of the Bank of
general application to key employees; (ii) the essential elements of
your position, in terms of duties and authority are materially reduced
without good cause, each without your voluntary consent; (iii) there
is a material reduction in your aggregate compensation, not related to
or resulting from documented, diminished performance; or (iv) you are
required to regularly perform services at a location which is greater
than fifty (50) miles from your principal office at the time of the
change of control, you will then be entitled to the benefits
("Severance Benefits") as set forth herein.
SECTION 2. Upon the occurrence of the event described in
Section 1 (i) above, or upon the occurrence of any
of the other events in Section 1 which results in
your termination, then:
2.1 The Bank will pay to you in an immediate lump-sum cash
payment an amount equal to Nine (9) months of your current
annual salary, exclusive of periodic bonus compensation,
plus any unused earned vacation time; plus
2.2 Medical and life insurance coverage provided to you and your
family by the Bank, at its cost, until the earlier of: (i)
you waive coverage by giving written notice of waiver to the
Bank; (ii) nine (9) months elapse from the effective date of
your termination; or (iii) you become a participant in group
insurance benefit programs of a new employer. If coverage is
not permitted under applicable policy terms, the Bank will
provide equivalent benefits. Upon termination of this
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Change of Control Letter
Page 2
benefit in accordance with the terms hereof, you shall be
entitled to exercise the policy options normally available
to the Bank's employees upon termination of employment.
SECTION 3. For purposes of this Agreement, "change of control"
shall be deemed to have taken place if, subsequent to the date
hereof:
3.1 a third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934 (as in
effect on the date hereof), becomes the beneficial owner of
shares of the CFS having greater than Fifty Percent (50%) or
more of the total number of votes that may be cast for the
election of directors of CFS, including for this purpose any
shares beneficially owned by such third person or group as
of the date hereof; or,
3.2 as the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sale
of assets or contested election, or any combination of the
foregoing transactions (a "Transaction"), the persons who
were directors of the Bank before the Transaction shall
cease to constitute a majority of the Board of Directors of
the Bank or any successor to the Bank.
3.3 In the event of any reorganization involving CFS or the Bank
in a transaction initiated by the Bank in which the
stockholders of CFS immediately prior to such reorganization
become the stockholders of a successor or ultimate parent
corporation of CFS resulting from such reorganization and
the persons who were directors of the Bank immediately prior
to such reorganization constitute a majority of the Board of
Directors of such successor or ultimate parent, no "change
of control" shall be deemed to have taken place solely by
reason of such reorganization, notwithstanding the fact that
the Bank may have become the wholly-owned subsidiary of
another corporation in such reorganization and the Board of
Directors thereof may have been reconstituted, and
thereafter the term "Bank" for the purposes of this
paragraph shall refer to such successor or ultimate parent
corporation.
SECTION 4. Any payment not made when due in accordance with this
Agreement shall thereafter bear interest at the prime lending
rate from time to time in effect by the Bank.
SECTION 5. This Agreement may not be assigned by the Bank except
(i) to CFS; or (ii) in connection with a merger involving the
Bank or CFS or a sale of substantially all of its assets, and the
obligations of the Bank provided for in this Agreement shall be
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Page 3
the binding legal obligations of any successor to the Bank by
purchase, merger, consolidation, or otherwise. This Agreement may
not be assigned by you during your life, and upon your death will
be binding upon and inure to the benefit of your heirs, legatees
and the legal representatives of your estate.
SECTION 6. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by you, approved by the
Board of Directors and signed by an appropriate officer of the
Bank empowered to sign the same by the Board of Directors of the
Bank. No waiver by either party at any time of any breach by the
other party or compliance with, any condition or provision of
this Agreement to be performed by the other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the
same time or at any prior or subsequent time. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Illinois. The
invalidity or unenforceability of any provision of this Agreement
shall not effect the validity or enforceability of any other
provision of this Agreement.
SECTION 7. This Agreement does not constitute a contract for the
continued employment of you by the Bank. Subject only to those
rights of yours that are specified herein following a change of
control, the Bank reserves all of its rights to modify your
compensation and other terms of your employment and to terminate
your employment to the same extent as before the execution of
this Agreement.
SECTION 8. The Bank shall pay your out-of-pocket expenses,
including attorney's fees, in connection with any judicial
proceeding to enforce this Agreement or to construe or determine
the validity of this Agreement or otherwise in connection
herewith unless the Bank prevails in such litigation.
Very truly yours,
Community Bank-Wheaton/Xxxx Ellyn
By: ______________________________________
Chairman, Compensation Committee
Member, Executive Committee
Accepted and agreed to this
______ Day of_______ 2002
_______________________________
Xxxxxx X. Xxxxxxx
