EXHIBIT 10.9
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT ("Agreement") is made and entered
into
as of this 18th day of September, 2007, but effective as of January
16,
2007, by and between MFB FINANCIAL, a federally chartered savings
association
whose address is 4100 Edison Lakes Parkway, Suite 300, Mishawaka,
IN 46545
(which, together with any successor thereto which executes and
delivers the
assumption agreement provided for in Section 12(a) hereof or which
otherwise
becomes bound by the terms and provisions of this Agreement by
operation of law,
is hereinafter referred to as the "Bank"), and JAMES P. COLEMAN
III, whose
residence address is 15512 Durham Way West, Granger, Indiana
46530
(the "Employee").
WHEREAS, the Employee is currently serving as Executive Vice
President
and Director of Wealth Management of the Bank; and
WHEREAS, the Bank is a wholly-owned subsidiary of MFB Corp., a
publicly
traded corporation organized under Indiana law (the "Holding
Company"); and
WHEREAS, the Board of Directors of the Bank recognizes that, as is
the
case with publicly held corporations generally, the possibility of
a change in
control of the Holding Company may exist and that such possibility,
and the
uncertainty and questions which it may raise among management, may
result in the
departure or distraction of key management personnel to the
detriment of the
Bank, the Holding Company and its shareholders; and
WHEREAS, the Board of Directors of the Bank believes it is in the
best
interests of the Bank to enter into this Agreement with the
Employee in order to
assure continuity of management of the Bank and to reinforce and
encourage the
continued attention and dedication of the Employee to his or her
assigned duties
without distraction in the face of potentially disruptive
circumstances arising
from the possibility of a change in control of the Holding Company,
although no
such change is now contemplated;
WHEREAS, a Special Termination Agreement dated as of January 16,
2007,
between the Bank and Employee needs to be revised to address
certain tax changes
made under Section 409A of the Internal Revenue Code of 1986, as
amended, and
the parties wish to restate that agreement to make such changes;
and
WHEREAS, the Board of Directors of the Bank has approved and
authorized
the execution of this Agreement with the Employee to take effect as
stated in
Section 1 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the
respective
covenants and agreements of the parties herein contained, it is
agreed as
follows:
1.
TERM OF AGREEMENT. The term of this Agreement shall be deemed
to have commenced as of January 16, 2007 (the "Effective
Date") and shall continue until the anniversary of the
Effective Date. Prior to that anniversary date and at each
anniversary date thereafter, the Board of Directors may review
this Agreement and, in its discretion, authorize extension
thereof for an additional one-year period.
2.
PAYMENTS TO THE EMPLOYEE UPON CHANGE IN CONTROL.
(a)
Upon the occurrence of a change in control of the Bank or the
Holding Company (as herein defined) at any time during the
term of this Agreement followed within 12 months by the
involuntary termination of the Employee's employment with the
Bank, whether or not such termination occurs during the term
of this Agreement, the provisions of Section 3 shall apply.
(b)
A "change in control" shall mean any of the following:
(i) a change
in the ownership of the Bank 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 Bank 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 Bank 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 Holding Company
or the Bank in the
merger. 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 Bank 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 Bank or the
Holding Company (or to
cause a change in the
effective control
of
the
Bank 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 Bank 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
Bank or the
Holding Company
(or issuance of
stock of the Bank or
the Holding
Company) and
stock in the Bank or the Holding Company remains outstanding
after
the transaction.
(ii)
a change in the effective control of the Bank or the Holding
Company, which shall occur only on either of the following
dates:
a)
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 Bank or the
Holding Company possessing thirty percent (30%) or more of the
total voting power of the stock of the Bank or the Holding
Company.
b)
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 Bank or the Holding
Company, the acquisition of additional control of the Bank or
the Holding Company by the same person or persons is not
considered
to cause a change in the effective control of the
Bank or the Holding Company (or to cause a change in the
ownership of the Bank 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 Bank'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 Bank 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 Bank
immediately before
such acquisition
or
acquisitions. For this
purpose, gross fair market value means the
value of the assets of the Bank, or the value of the assets
being
disposed of,
determined without
regard to any liabilities associated
with such assets. No
change in control
event occurs under this
subsection (iii) when
there is a transfer to an entity that is
controlled by the
shareholders of the Bank immediately after the
transfer. A transfer
of assets by the Bank is not treated as a
change in the
ownership of such assets if the assets are
transferred to -
a)
a shareholder of the Bank (immediately before the asset
transfer) in exchange for or with respect to its stock;
b)
an entity, 50 percent or more of the total value or voting
power of which is owned, directly or indirectly, by the Bank.
c)
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
Bank; or
d)
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 Bank or the Holding Company; provided,
however, that they
will not be considered to be acting as a group if they are
owners of a
corporation that merges into the Bank or the Holding Company
where
the Bank or the
Holding Company is the surviving corporation.
(c) The Employee's employment under this Agreement may be
terminated at any time
by the Board of
Directors of the Bank. If the Employee's employment is
terminated for any
reason prior to a change in control, no benefits shall be
payable under this
Agreement.
(d) The Employee's employment under this Agreement may be
terminated at any time
by the Board of
Directors of the Bank. The terms "involuntary termination" or
"involuntarily
terminated" in this Agreement shall refer to the termination of
the employment of
Employee without his or her express written consent. In
addition, a material
diminution of or interference with the Employee's duties,
responsibilities and
benefits shall be deemed and shall constitute an
involuntary
termination of employment to the same extent as express notice
of
such involuntary
termination. By way of example and not by way of limitation,
any of the following
actions, if unreasonable and materially adverse to the
Employee, shall
constitute such diminution or interference unless consented to
in writing by the
Employee: (1) the requirement that the Employee perform his
or her principal
employment duties more than thirty-five (35) miles from his
or her primary office
as of the date of the change in control; (2) a material
reduction in the
Employee's salary, perquisites, contingent benefits or
vacation time as in
effect on the date of the change in control as the same
may be changed by
mutual agreement from time to time, unless part of an
institution-wide
reduction; (3) the assignment to the Employee of duties and
responsibilities
materially different from those normally associated with his
or her position as
referenced in this Agreement; or (4) a material diminution
or reduction in the
Employee's responsibilities or authority (including
reporting
responsibilities) in connection with his or her employment with
the
Bank.
3. PAYMENTS UPON A CHANGE IN CONTROL.
(a) If during the term of this Agreement there is a change in
control of the
Bank or the Holding
Company, and within 12 months following such change in
control there is an
involuntary termination of the Employee's employment with
the Bank, whether or
not such termination occurs during the term of this
Agreement, the Bank
shall pay to the Employee in a lump sum
in cash within 25
business days after the date of severance of employment an
amount equal to 100
percent of the Employee's "base amount" of compensation,
as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as
amended ("Code").
(b) If during the term of this Agreement there is a change in
control, and
within 12 months
following such change in control there is an involuntary
termination of the
Employee's employment, whether or not such termination
occurs during the term
of this Agreement, the Bank shall cause to be continued
life, health and
disability coverage substantially identical to the c
