AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Agreement, made and dated as of September 18, 2007, is by and
between MFB Financial (formerly Mishawaka Federal Savings), a federal savings
association ("Employer"), and Xxxxxx X. Xxxx, a resident of Cass County,
Michigan ("Employee"), but effective as of January 1, 2005.
This Agreement amends and restates the prior Employment Agreement
between Employer and the Employee dated July 1, 1999 (the "Prior Agreement"). It
has been amended and restated for compliance with the final regulations under
Section 409A of the Internal Revenue Code of 1986, as amended, effective as of
January 1, 2005.
WITNESSETH
WHEREAS, Employee is hereby employed by Employer as its Executive Vice
President and Chief Operating Officer, and. is expected to make valuable
contributions to the profitability and financial strength of Employer;
WHEREAS, Employer desires to encourage Employee to make valuable
contributions to Employer's business operations and not to seek or accept
employment elsewhere;
WHEREAS, Employee desires to be assured of a secure minimum
compensation from Employer for his services over a defined term;
WHEREAS, Employer desires to assure the continued services of Employee
on behalf of Employer on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt by any person to
obtain control of Employer or of MFB Corp., the Indiana corporation which owns
all of the issued and outstanding capital stock of Employer (the "Holding
Company");
WHEREAS, Employer recognizes that when faced with a proposal for a
change of control of Employer or the Holding Company, Employee will have a
significant role in helping the Boards of Directors assess the options and
advising the Boards of Directors on what is in the best interests of Employer,
the Holding Company, and its shareholders, and it is necessary for Employee to
be able to provide this advice and counsel without being influenced by the
uncertainties of his own situation;
WHEREAS, Employer desires to provide fair and reasonable benefits to
Employee on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, Employer desires reasonable protection of its confidential
business and customer information which it has developed over the years at
substantial expense and assurance that Employee will not compete with Employer
for a reasonable period of time after termination of his employment with
Employer, except as otherwise provided herein.
NOW, THEREFORE, in consideration of these premises, the mutual
covenants and undertakings herein contained and the continued employment of
Employee by Employer as its Executive Vice President and Chief Operating
Officer, Employer and Employee, each intending to be legally bound, covenant and
agree as follows:
1. Upon the terms and subject to the conditions set forth in this Agreement,
Employer employs Employee as Employer's Executive Vice President and Chief
Operating Officer, and Employee accepts such employment.
2. Employee agrees to serve as Employer's Executive Vice President and Chief
Operating Officer and to perform such duties in that office as may reasonably be
assigned to him by Employer's Board of Directors; provided, however that such
duties shall be performed in or from the offices of Employer currently located
at Mishawaka, Indiana, and shall be of the same character as those previously
performed by Employee's predecessor and generally associated with the office
held by Employee. Employee shall not be required to be absent from the location
of the principal executive offices of Employer on travel status or otherwise
more than 45 days in any calendar year. Employer shall not, without the written
consent of Employee, relocate or transfer Employee to a location more than 30
miles from his principal residence. Although while employed by Employer,
Employee shall devote substantially all his business time and efforts to
Employer's business and shall not engage in any other related business, Employee
may use his discretion in fixing his hours and. schedule of work consistent with
the proper discharge of his duties.
3. The term of this Agreement shall begin on January 1, 2005 (the "Effective
Date"), and shall end on July 1, 2010; provided, however, that such term shall
be extended for an additional month on the first day of each month succeeding
July 1, 2007, so as to continue to maintain a three-year term and shall continue
to be so extended if Employer's Board of Directors determines by resolution to
extend this Agreement prior to each anniversary of July 1, 2007. If either party
hereto gives written notice to the other party not to extend this Agreement in
any given month or if the Board does not determine to extend the Agreement prior
to each anniversary of July 1, 2007, no further extension shall occur and the
term of this Agreement shall end three years subsequent to the first day of the
month in which such notice not to extend is given or three years subsequent to
the anniversary as of which the Board does not elect to continue extending this
Agreement (such term, including any extension thereof shall herein be referred
to as the "Term"). Notwithstanding the foregoing, this Agreement shall
automatically terminate (and the Term of this Agreement shall thereupon end)
without notice when Employee attains 65 years of age.
4. From and after the date hereof, Employee shall receive an annual salary of
$156,000 ("Base Compensation") payable at regular intervals in accordance
with Employer's normal payroll practices now or hereafter in effect. Employer
may consider and declare from time to time increases in the salary it pays
Employee and thereby increases in his Base Compensation. Employer may also
declare incentive bonuses from time to time to be paid to Employee in addition
to his annual salary. During the Term of this Agreement, but only until such
time as a Change in Control occurs, Employer may also declare decreases in the
salary it pays Employee if the operating results of Employer are significantly
less favorable than those for the fiscal year ending September 30, 1995, and
Employer makes similar decreases in the salary it pays to other executive
officers of Employer. In addition, immediately following the first twelve months
of the term of this Agreement, Employer may make a one-time reduction in
Employee's Base Compensation if Employer chooses to substitute incentive
compensation for a portion of the Employee's previously established Base
Compensation. After a Change in Control, no such decreases in Base Compensation
may be made, and Employer shall consider and declare salary increases based upon
the following standards:
Inflation;
Adjustments to the salaries of other senior management personnel; and
Past performance of Employee and the contribution which Employee makes
to the business and profits of Employer during the Term.
Any and all increases or decreases in Employee's salary pursuant to this section
shall cause the level of Base Compensation to be increased or decreased by the
amount of each such increase or decrease for purposes of this Agreement. The
increased or decreased level of Base Compensation as provided in this section
shall become the level of Base Compensation for the remainder of the Term of
this Agreement until there is a further increase or decrease in Base
Compensation as provided herein.
5. So long as Employee is employed by Employer
pursuant to this Agreement and subject to
any waiting period requirements in such
plans, he shall be included as a participant
in all present and future employee benefit,
retirement, and compensation plans generally
available to employees of Employer (other
than Employee's recognition and retention
plan and trust), consistent with his Base
Compensation and his position as Executive
Vice President and Chief Operating Officer
of Employer, including, without limitation,
Employer's or the Holding Company's
retirement plan, stock option plan, employee
stock ownership plan, and hospitalization,
major medical, disability, dental and group
life insurance plans, each of which Employer
agrees to continue in effect on terms no
less favorable than those currently in
effect as of the date hereof (as permitted
by law) during the Term of this Agreement
unless prior to a Change in Control the
operating results of Employer are
significantly less favorable than those for
the fiscal year ending September 30, 1998,
and unless (either before or after a Change
in Control) changes in the accounting or tax
treatment of such plans would adversely
affect Employer's operating results or
financial condition in a material way, and
the Board of Directors of Employer or the
Holding Company concludes that modifications
to such plans need to be made to avoid such
adverse effects.
6. So long as Employee is employed by Employer
pursuant to this Agreement, Employee shall
receive reimbursement from Employer for all
reasonable business expenses incurred in the
course of his employment by Employer, upon
submission to Employer of written vouchers
and statements for reimbursement. Employee
shall attend, at his discretion, those
professional meetings, conventions, and/or
similar functions that he deems appropriate
and useful for purposes of keeping abreast
of current developments in the industry
and/or promoting the interests of Employer.
So long as Employee is employed by Employer
pursuant to the terms of this Agreement,
Employer shall continue in effect vacation
policies applicable to Employee no less
favorable from his point of view than those
written vacation policies in effect on the
date hereof. So long as Employee is employed
by Employer pursuant to this Agreement,
Employee shall be entitled to office space
and working conditions no less favorable
from his point of view than were in effect
for his predecessor immediately prior to the
date hereof. So long as Employee is employed
by Employer pursuant to this Agreement,
Employee shall be entitled to an auto
allowance of $1,367 per month to be
applied towards the use or lease of an
automobile used in part for Employer
business.
7. Subject to the respective continuing
obligations of the parties, including but
not limited to those set forth in
subsections 9(A), 9(B), 9(C) and 9(D)
hereof, Employee's employment by Employer
may be terminated prior to the expiration of
the Term of this Agreement as follows:
(A) Employer, by action of its Board of
Directors and upon written notice to
Employee, may terminate Employee's
employment with Employer immediately for
cause. For purposes of this subsection 7(A),
"cause" shall be defined as (i) personal
dishonesty, (ii) incompetence, (iii) willful
misconduct, (iv) breach of fiduciary duty
involving personal profit, (v) intentional
failure to perform stated duties, (vi)
willful violation of any law, rule, or
regulation (other than traffic violations or
similar offenses) or final cease-and-desist
order, or (vii) any material breach of any
term, condition or covenant of this
Agreement.
(B) Employer, by action of its Board of
Directors, may terminate Employee's
employment with Employer without cause at
any time; provided, however, that the "date
of termination" for purposes of determining
benefits payable to Employee under
subsection 8(B) hereof shall be the date
which is 60 days after Employee receives
written notice of such termination.
(C) Employee, by written notice to Employer, may terminate his employment
with Employer immediately for cause. For purposes of this
subsection 7(C), "cause" shall be defined as (i) any
action
by Employer's Board of Directors to remove the Employee as
Executive Vice President and Chief Operating Officer of
Employer, except where the Employer's Board of Directors
properly acts to remove Employee from such office for "cause"
as defined in subsection 7(A) hereof, (ii) any action by
Employer's Board of Directors which Employee reasonably
believes materially limits, increases, or modifies
Employee's duties and/or authority as Executive Vice
President and Chief Operating Officer of Employer(including
his authority, subject to corporate controls no more
restrictive than those in effect on the date hereof, to hire
and discharge employees who are not bona fide officers of
Employer), (iii) any failure of Employer to obtain the
assumption of the obligation to perform this Agreement by any
successor or the reaffirmation of such obligation by
Employer, as contemplated in section 20 hereof; or (iv) any
material breach by Employer of a term, condition or covenant
of this Agreement.
(D) Employee, upon sixty (60) days written notice to Employer, may
terminate his employment with Employer without cause.
(E) Employee's employment with Employer shall
terminate in the event of Employee's death
or disability. For purposes hereof,
"disability" shall be defined as Employee's
inability by reason of illness or other
physical or mental incapacity to perform the
duties required by his employment for any
consecutive One Hundred Eighty (180) day
period, provided that notice of any
termination by Employer because of
Employee's "disability" shall have been
given to Employee prior to the full
resumption by him of the performance of such
duties.
8. In the event of termination of Employee's
employment with Employer pursuant to section
7 hereof, compensation shall continue to be
paid by Employer to Employee as follows:
(A) In the event of termination pursuant to subsection 7(A) or 7(D),
compensation provided for herein (including Base
Compensation) shall continue to be paid, and Employee
shall continue to participate in the employee benefit,
incentive bonus, retirement, and compensation plans and
other perquisites as provided in sections 5 and 6 hereof,
through the date of termination specified in the notice of
termination. Any benefits payable under insurance,
health, retirement and bonus plans as a result of Employee's
participation in such plans through such date shall be paid
when due under those plans. The date of termination
specified in any notice of termination pursuant to
Subsection 7(A) shall be no later than the last business
day of the month in which such notice is provided to
Employee.
(B) In the event of termination pursuant to subsection 7(B) or 7(C),
compensation provided for herein (including Base
Compensation) shall continue to be paid, and Employee
shall continue to participate in the employee benefit,
incentive bonus, retirement, and compensation plans and
other perquisites as provided in sections 5 and 6 hereof,
through the date of termination specified in the notice of
termination. Any benefits payable under insurance,
health, retirement and bonus plans as a result of Employee's
participation in such plans through such date shall be
paid when due under those plans. In addition, Employee
shall be entitled to continue to receive from Employer his
Base Compensation at the rate in effect at the time of
termination, plus the incentive bonus he received for the tax
year preceding the date of termination for the remaining
Term of the Agreement if the termination does not follow a
Change in Control. In addition, during such period,
Employer will maintain in full force and effect for the
continued benefit of Employee each employee welfare benefit
plan and each employee pension benefit plan (as such
terms are defined in the Employee Retirement Income Security
Act of 1974, as amended) in which Employee was entitled
to participate immediately prior to the date of his
termination, unless an essentially equivalent and no less
favorable benefit is provided by a subsequent employer of
Employee. If the terms of any employee welfare benefit
plan or employee pension benefit plan of Employer or
applicable laws do not permit continued participation by
Employee, Employer will arrange to provide to Employee a
benefit substantially similar to, and no less favorable
than, the benefit he was entitled to receive under such plan
at the end of the period of coverage.
(C) In the event of termination pursuant to
subsection 7(E), compensation provided for
herein (including Base Compensation) shall
continue to be paid, and Employee shall
continue to participate in the employee
benefit, incentive bonus, retirement, and
compensation plans and other perquisites as
provided in sections 5 and 6 hereof, (i) in
the event of Employee's death, through the
date of death, or (ii) in the event of
Employee's disability, through the date of
proper notice of disability as required by
subsection 7(D). Any benefits payable under
insurance, health, retirement and bonus
plans as a result of Employer's
participation in such plans through such
date shall be paid when due under those
plans.
(D) Employer will permit Employee or his personal representative(s)
or heirs, during a period of three months following
Employee's termination of employment by Employer for the
reasons set forth in subsections 7(B) or 7(C), if such
termination follows a Change in Control, to require
Employer, upon written request, to purchase all outstanding
stock options previously granted to Employee under any
Holding Company stock option plan then in effect whether or
not such options are then exercisable or have terminated at
a cash purchase price equal to the amount by which the
aggregate "fair market value" of the shares subject to such
options exceeds the aggregate option price for such
shares. For purposes of this Agreement, the term "fair
market value" shall mean the higher of (1) the average of
the highest asked prices for Holding Company shares in the
over-the-counter market as reported on the NASDAQ system
if the shares are traded on such system for the 30 business
days preceding such termination, or (2) the average per
share price actually paid for the most highly priced 1% of
the Holding Company shares acquired in connection with
the Change in Control of the Holding Company by any person or
group acquiring such control.
(E) For purposes of this Agreement, a "Change in
Control" shall mean any of the following:
(i) a change in the ownership of the Employer or the Holding Company,
which shall occur on the date that any one person,
or more than one person acting as a group, acquires
ownership of stock of the Employer or the Holding
Companny that, together with stock held by such
person or group, constitutes more than fifty
percent (50%) of the total fair market value or
total voting power of the stock of the Employer
or the Holding Company. Such acquisition may
occur as a result of a merger of the Holding Company
or the Bank into another entity which pays
consideration for the shares of capital stock of the
merging Holding Company or Bank. However, if any
one person, or more than one person acting as a
group, is considered to own more than fifty percent
(50%)of the total fair market value or total voting
power of the stock of the Employer or the Holding
Company,the acquisition of additional stock by the
same person or persons is not considered to cause a
change in the ownership of the Employer or the
Holding Company (or to cause a change in the
effective control of the Employer or the Holding
Company (within the meaning of subsection (ii)).
An increase in the percentage of stock owned by any
one person, or persons acting as a group, as a
result of a transaction in which the Employer or
the Holding Company acquires its stock in
exchange for property will be treated as an
acquisition of stock for purposes of this
subsection. This subsection applies only when
there is a transfer of stock of the Employer or
the Holding Company (or issuance of stock of the
Employer or the Holding Company) and stock in the
Employer or the Holding Company remains outstanding
after the transaction.
(ii) a change in the effective control of the
Employer or the Holding Company, which shall
occur only on either of the following dates:
1) the date any one person, or more than one
person acting as a group acquires (or has
acquired during the 12 month period ending
on the date of the most recent acquisition
by such person or persons) ownership of
stock of the Employer or the Holding Company
possessing thirty percent (30%) or more of
the total voting power of the stock of the
Employer or the Holding Company.
2) the date a majority of members of the Holding Company's board of
directors is replaced during any 12 month
period by directors whose appointment or
election is not endorsed by a majority
of the members of the Holding Company's
board of directors before the date of the
appointment or election; provided,
however, that this provision shall not
apply if another corporation is a majority
shareholder of the Holding Company.
If any one person, or more than one person acting as a group,
is considered to effectively control the Employer or the
Holding Company, the acquisition of additional control of the
Employer or the Holding Company by the same person or persons
is not considered to cause a change in the effective control
of the Employer or the Holding Company (or to cause a change
in the ownership of the Employer or the Holding Company within
the meaning of subsection (i) of this section).
(iii) a change in the ownership of a substantial portion of the
Employer's assets, which shall occur on the date
that any one person, or more than one person acting
as a group, acquires (or has acquired during the
12 month period ending on the date of the most recent
acquisition by such person or persons) assets from
the Employer that have a total gross fair market
value equal to or more than forty percent (40%)
of the total gross fair market value of all of the
assets of the Employer immediately before such
acquisition or acquisitions. For this purpose,
gross fair market value means the value of the assets
of the Employer, or the value of the assets being
disposed of, determined without regard to any
liabilities associated with such assets. No
change in control occurs under this subsection
(iii) when there is a transfer to an entity that
is controlled by the shareholders of the Employer
immediately after the transfer. A transfer of assets
by the Employer is not treated as a change in the
ownership of such assets if the assets are
transferred to -
1) a shareholder of the Employer (immediately before the asset transfer)
in exchange for or with respect to its stock;
2) an entity, 50 percent or more of the total value or voting power of
which is owned, directly or indirectly, by
the Employer.
3) a person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more
of the total value or voting power of all the
outstanding stock of the Employer; or
4) an entity, at least 50 percent of the total value or voting power of
which is owned, directly or indirectly,
by a person described in paragraph (iii).
For purposes of this subsection (iii) and except as otherwise
provided in paragraph 1) above, a person's status is
determined immediately after the transfer of the assets.
(iv) For purposes of this section, persons will not be considered
to be acting as a group solely because they purchase or own
stock of the same corporation at the same time, or as a result
of the same public offering. Persons will be considered to be
acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the Employer or
the Holding Company; provided, however, that they will not be
considered to be acting as a group if they are owners of an
entity that merges into the Employer or the Holding Company
where the Employer or the Holding Company is the surviving
corporation.
(F) To the extent the Employee is a "specified employee" (as defined
below), payments due to the Employee under this Section 8
that represent payment of deferred compensation that is
subject to Section 409A of the Code shall begin no sooner
than six months after the Employee's separation from service;
provided, however, that any payments not made during
the six month period described in this Section 8(F) shall
be made in a single lump sum as soon as administratively
practicable after the expiration of such six month period;
provided, further, that the six month delay required
under this Section 8(F) shall not apply to the portion of
any payment resulting from the Employee's "involuntary
separation from service" (as defined in Treasury Reg.
Section 1.409A-1(n) and including a "separation from service
for good reason," as defined in Treasury Reg.
Section 1.409A-1(n)(2)) that (i) is payable no later than the
last day of the second year following the year in which the
separation from service occurs, and (ii) does not exceed
two times the lesser of (1) the Employee's annualized
compensation for the year prior to the year in which the
separation from service occurs, or (2) the dollar limit
described in Section 401(a)(17) of the Code. It is
expressly intended and understood that payments made under
Section 8(G) do not represent payments of deferred
compensation subject to Section 409A of the Code and are
not subject to the six month delay required by this
Section 8(F).
To the extent any life, health, disability or other welfare
benefit coverage provided to the Employee under this Section 8
would be taxable to the Employee, the taxable amount of such
coverage shall not exceed the applicable dollar amount under
Section 402(g)(1)(B) of the Code determined as of the year in
which the Employee's separation from service occurs. The
intent of the foregoing sentence is to permit the Holding
Company and the Employer to treat the provision of such
benefits as a limited payment under Treasury Reg. Section
1.409A-1(a)(9)(v)(D) so as to avoid application of the six
month delay rule for specified employees. For purposes of this
Section 8, any reference to severance of employment or
termination of employment shall mean a "separation from
service" as defined in Treasury Reg. Section 1.409A-1(h).
For purposes of this Agreement, the term "specified employee"
shall have the meaning set forth in Treasury Reg. Section
1.409A-1(i) and shall include, without limitation, (1) an
officer of the Employer or the Holding Company having annual
compensation greater than $130,000 (as adjusted for inflation
under the Code), (2) a five percent owner of the Employer or
the Holding Company, or (3) a one percent owner of the
Employer or the Holding Company having annual compensation of
more than $150,000. The determination of whether the Employee
is a "specified employee" shall be made by the Employer in
good faith applying the applicable Treasury regulations.
(G) The Term of this Agreement shall expire upon a Change in
Control. Upon expiration of the Term of this Agreement upon a
Change in Control, the Employer shall continue to be bound by,
and shall cause any successor in interest to be bound by, the
terms of this Section 8(G).
(i) If on or before the Change in Control the Employer or its successor
in interest offers to continue the employment
of Employee as Executive Vice President and Chief
Operating Officer of Employer at the same
compensation and substantially the same benefits he
was receiving under this Agreement immediately
prior to the Change in Control without placing any
material limits on Employee's duties or authority
as Executive Vice President and Chief Operating
Officer (including his authority, subject to
corporate controls no more restrictive than those
in effect on the date hereof, to hire and discharge
employees who are not bona fide officers of
Employer), for at least 12 months (whether or not
pursuant to a written agreement), and if the
Employee accepts such offer and the Employer or its
successor in interest continues to employ the
Employee on such terms for at least 12 months
following the Change in Control, the Employee shall
be entitled to no further payments under this
Agreement (other than any payments to which he may
have become entitled prior to the
expiration of the Term of the Agreement).
(ii) If on or before the Change in Control, the Employer or its successor
in interest does not offer to continue the
employment of Employee as Executive Vice President
and Chief Operating Officer of Employer at the same
compensation and substantially the same benefits he
was receiving under this Agreement immediately prior
to the Change in Control without placing any
material limits on Employee's duties or
authority as Executive Vice President and Chief
Operating Officer (including his authority
subject to corporate controls no more
restrictive than those in effect on the date hereof,
to hire and discharge employees who are not bona
fide officers of Employer), for at least 12 months
(whether or not pursuant to a written agreement),
the Employee shall be entitled to a lump sum payment
equal to three (3) times the sum of his Base
Compensation at the rate in effect as of the Change
in Control plus the incentive bonus he received
for the tax year preceding the Change in Control.
Such payment shall be made on the effective date of
the Change in Control.
(iii) If Employee accepts an offer of employment from Employer or its
successor in interest which satisfies the
requirements of Section 8(G)(i) but the Employer
or its successor in interest terminates the
Employee's employment involuntarily within that
12-month period or does not honor those
requirements for at least 12 months following the
Change in Control, other than as a result of a
termination for cause as provided in Section
7(A), Employee shall be entitled to the payment
described in Section 8(G)(ii), which payment shall
be made within 10 days after Employee notifies
Employer or its successor in interest of its failure
to continue to employ Employee on such terms for
at least 12 months following the Change in
Control, other than as a result of a termination
for cause as provided in Section 7(A). For purposes
of clarification, the payment to be made pursuant
to this Section 8(G)(iii) will not be payable if
Employee's employment with Employer is
terminated during that 12-month period for cause
under Section 7(A) or as a result of the Employee's
death, disability or voluntary resignation.
(iv) If any successor in interest fails or refuses to be bound by
the terms of this Section 8(G), the Employee shall be entitled
to the payment described in Section 8(G)(ii), payable promptly
after the breach by such successor in interest of its
obligations under this Section 8(G).
(v) In the event that the independent public accountants of Employer or
its successor in interest determine that any payment
to or for the benefit of the Employee made
pursuant to this Section 8(G) would be
non-deductible by the Employer or its successor
in interest for federal income tax purposes
because of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), then the
amount payable to or for the benefit of
the Employee pursuant to this Section 8(G) shall
be reduced (but not below zero) to the Reduced
Amount. For purposes of this Section 8(G) the
"Reduced Amount" shall be the amount which
maximizes the amount payable without causing the
payment to be non-deductible by the Employer or
its successor in interest
because of Section 280G of the Code.
9. In order to induce Employer to enter into this Agreement,
Employee hereby agrees as follows:
(A) While Employee is employed by Employer and for a period of three
years after termination of such employment for reasons
other than those set forth in subsections 7(B) or 7(C) of
this Agreement, Employee shall not divulge or furnish any
trade secrets (as defined in IND. CODE ss. 24-2-3-2) of
Employer or any confidential information acquired by him
while employed by Employer concerning the policies, plans,
procedures or customers of Employer to any person, firm or
corporation, other than Employer or upon its written
request, or use any such trade secret or confidential
information directly or indirectly for Employee's own benefit
or for the benefit of any person, firm or corporation
other than Employer, since such trade secrets and
confidential information are confidential and shall at all
times remain the property of Employer.
(B) For a period of three years after termination of Employee's
employment by Employer for reasons other than those set forth
in subsections 7(B) or 7(C) of this Agreement,
Employee shall not directly or indirectly provide
banking or bank-related services to or solicit the banking
or bank-related business of any customer of Employer at the
time of such provision of services or solicitation which
Employee served either alone or with others while employed
by Employer in any city, town, borough, township,
village or other place in which Employee performed services
for Employer during the last three years (or such shorter
period) he was employed by it, or assist any actual or
potential competitor of Employer to provide banking or
bank-related services to or solicit any such customer's
banking or bank-related business in any such place.
(C) While Employee is employed by Employer and for a period of one
year after termination of Employee's employment by Employer
for reasons other than those set forth in subsections 7(B) or
7(C) of this Agreement, Employee shall not, directly or
indirectly, as principal, agent, or trustee, or through the
agency of any corporation, partnership, trade association,
agent or agency, engage in any banking or bank-related
business or venture which competes with the business of
Employer as conducted during Employee's employment by Employer
within St. Xxxxxx County or within a radius of 25 miles of any
other office of Employer where Employee was employed for more
than six months in the three years next preceding termination.
(D) If Employee's employment by Employer is terminated for any
reason, Employee will turn over immediately thereafter to
Employer all business correspondence, letters, papers,
reports, customers' lists, financial statements, credit
reports or other confidential information or documents of
Employer or its affiliates in the possession or control of
Employee, all of which writings are and will continue to be
the sole and exclusive property of Employer or its affiliates.
If Employee's employment by Employer is terminated during the Term of this
Agreement for reasons set forth in subsections 7(B) or 7(C) of this Agreement,
Employee shall have no obligations to Employer with respect to noncompetition
under sections 9(A) through (C) hereof
10. Any termination of Employee's employment with Employer as contemplated by
section 7 hereof, except in the circumstances of Employee's death, shall be
communicated by written "Notice of Termination" by the terminating party to the
other party hereto. Any "Notice of Termination" pursuant to subsections 7(A),
7(C) or 7(E) shall indicate the specific provisions of this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination.
11. If Employee is suspended and/or temporarily prohibited from participating in
the conduct of Employer's affairs by a notice served under section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss. 1818(e)(4) and
(g)(1)), Employer's obligations under this Agreement shall be suspended as of
the date of service, unless stayed by appropriate proceedings. If the charges in
the notice are dismissed, Employer shall (i) pay Employee all or part of the
compensation withheld while its obligations under this Agreement were suspended
and (ii) reinstate (in whole or in part) any of its obligations which were
suspended.
12. If Employee is removed and/or permanently prohibited from participating in
the conduct of Employer's affairs by an order issued under section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss. 1818(e)(4) or
(g)(1)), all obligations of Employer under this Agreement shall terminate as of
the effective date of the order, but vested rights of the parties to the
Agreement shall not be affected.
13. If Employer is in default (as defined in section 3(x)(1) of the Federal
Deposit Insurance Act), all obligations under this Agreement shall terminate as
of the date of default, but this provision shall not affect any vested rights of
Employer or Employee.
14. All obligations under this Agreement may be terminated except to the extent
determined that the continuation of the Agreement is necessary for the continued
operation of Employer: (i) by the Director of the Office of Thrift Supervision,
or his or her designee (the "Director"), at the time the Federal Deposit
Insurance Corporation or Resolution Trust Corporation enters into an agreement
to provide assistance to or on behalf of Employer under the authority contained
in Section 13(c) of the Federal Deposit Insurance Act; or (ii) by the Director
at the time the Director approves a supervisory merger to resolve problems
related to operation of Employer or when Employer is determined by the Director
to be in an unsafe and unsound condition. Any rights of the parties that have
already vested, however, shall not be affected by such action.
15. Anything in this Agreement to the contrary notwithstanding, in the event
that the Employer's independent public accountants determine that any payment by
the Employer to or for the benefit of the Employee, whether paid or payable
pursuant to the terms of this Agreement, would be non-deductible by the Employer
for federal income tax purposes because of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), then the amount payable to or for the
benefit of the Employee pursuant to this Agreement shall be reduced (but not
below zero) to the Reduced Amount. For purposes of this section 15, the "Reduced
Amount" shall be the amount which maximizes the amount payable without causing
the payment to be non-deductible by the Employer because of Section 280G of the
Code. Any payments made to Employee pursuant to this Agreement, or otherwise,
are subject to and conditional upon their compliance with 12 U.S.C. ss. 1828(k)
and any regulations promulgated thereunder, to the extent applicable to such
payments.
16. If a dispute arises regarding the termination of Employee pursuant to
section 7 hereof or as to the interpretation or enforcement of this Agreement
said dispute shall be resolved by binding arbitration determined in accordance
with the rules of the American Arbitration Association and if Employee obtains a
final award in his favor or his claim is settled by Employer prior to the
rendering of an award by such arbitration, all reasonable legal fees and
expenses incurred by Employee in contesting or disputing any such termination or
seeking to obtain or enforce any right or benefit provided for in this Agreement
or otherwise pursuing his claim shall be paid by Employer, to the extent
permitted by law.
17. Should Employee die after termination of his employment with Employer while
any amounts are payable to him hereunder, this Agreement shall inure to the
benefit of and be enforceable by Employee's executors, administrators, heirs,
distributees, devisees and legatees and all amounts payable hereunder shall be
paid in accordance with the terms of this Agreement to Employee's devisee,
legatee or other designee or, if there is no such designee, to his estate.
18. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been given
when delivered or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Employee: Xxxxxx X. Xxxx
00000 Xxxx Xx.
Xxxxxxxxxx, XX 00000
If to Employer: MFB Financial
0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxx 000
XX Xxx 000
Xxxxxxxxx, Xxxxxxx 00000
or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
19. This Agreement supersedes and replaces any pre-existing employment agreement
between the Employer and the Employee. The validity, interpretation, and
performance of this Agreement shall be governed by the laws of the State of
Indiana, exist as otherwise required by mandatory operation of federal law.
20. Employer shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Employer, by agreement in form and substance satisfactory
to Employee to expressly assume and agree to perform this Agreement in the same
manner and same extent that Employer would be required to perform it if no such
succession had taken place. Failure of Employer to obtain such agreement prior
to the effectiveness of any such succession shall be a material intentional
breach of this Agreement and shall entitle Employee to terminate his employment
with Employer pursuant to subsection 7(C) hereof. As used in this Agreement,
"Employer" shall mean Employer as hereinbefore defined and any successor to its
business or assets as aforesaid.
21. No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
Employee and Employer. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior
subsequent time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
22. The invalidity or unenforceability of any provisions of this Agreement shall
not affect the validity or enforceability of any other provisions of this
Agreement which shall remain in full force and effect.
23. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same agreement.
24. This Agreement is personal in nature and neither party hereto shall without
consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder except as provided in section 17 and section 20 above,
Without limiting the foregoing, Employee's right to receive compensation
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or distribution as set forth in section 17 hereof, and in the
event of any attempted assignment or transfer contrary to this paragraph,
Employer shall have no liability to pay any amounts so attempted to be assigned
or transferred.
25. If any of the provisions in this Agreement shall conflict with 12 C.F.R. ss.
563.39(b),as it may be amended from time to time, the requirements of such
regulation shall supersede any contrary provisions herein and shall prevail.
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Employment Agreement to be executed and delivered as of the day and year first
above set forth.
MFB FINANCIAL
By:
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Name: Xxxxxxx X. Xxxxxx
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Title: President
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"Employer"
Xxxxxx X. Xxxx
"Employee"
The undersigned, MFB Corp., sole shareholder of Employer, agrees that
if it shall be determined for any reason that any obligation on the part of
Employer to continue to make any payments due under this Agreement to Employee
is unenforceable for any reason, MFB Corp. agrees to honor the terms of this
Agreement and continue to make any such payments due hereunder to Employee
pursuant to the terms of this Agreement.
MFB CORP.
By:
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Name:
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Title:
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INDS01 CVS 352574v9
