EXHIBIT 10.8
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement, made and dated as of September 18, 2007, is by and
between MFB FINANCIAL, a federal savings association ("EMPLOYER"), and XXXXX X.
XXXXX, a resident of St. Xxxxxx County, Indiana ("EMPLOYEE"), but effective as
of January 16, 2007.
This Agreement amends and restates the prior Employment Agreement
between Employer and the Employee dated January 16, 2007 (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 16, 2007.
W I T N E S S E T H:
WHEREAS, Employee is hereby employed by Employer as its Executive Vice
President and Chief Financial 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 Financial
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
Financial Officer, and Employee accepts such employment.
2. Employee agrees to serve as Employer's Executive Vice President and Chief
Financial 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 16, 2007 (the "EFFECTIVE
DATE"), and shall end on January 16, 2008; provided, however, that such term
shall be extended for an additional month on the first day of each month
succeeding the Effective Date, so as to continue to maintain a one-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 the Effective
Date. 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 the Effective Date, no further
extension shall occur and the term of this Agreement shall end one year
subsequent to the first day of the month in which such notice not to extend is
given or one year 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
$105,000 ("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, 2006, and
Employer makes similar decreases in the salary it pays to other executive
officers of Employer. 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 Employer's recognition and retention
plan and trust), consistent with his Base
Compensation and his position as Executive
Vice President and Chief Financial 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, 2006,
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 an auto
allowance of $0 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(B), "cause" shall be
defined as (i) any action by Employer's Board of Directors
to remove the Employee as Executive Vice President and
Chief Financial 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 Financial
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 any 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
Company 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
Financial 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 Financial
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 Financial 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 Financial 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 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 two 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)(3) or
(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss. 1818(e)(3) 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: Xxxxx X. Xxxxx
00000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
If to Employer: MFB Financial
0000 Xxxxxx Xxxxx Xxxxxxx-Xxxxx 300
X.X. 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 herein before 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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Xxxxxxx X. Xxxxxx, President
"EMPLOYER
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Xxxxx X. Xxxxx
"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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Xxxxxxx X. Xxxxxx, President
INDS01 CVS 914647v4
