EXHIBIT 10.3
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 Charles J. Viater, a resident of St.
Joseph
County, Indiana ("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 (the
"Code"),
effective as of January 1, 2005.
W I T N E S S E T H
WHEREAS, Employee is hereby employed by Employer as its President
and
chief executive 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 President and chief executive 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 President and chief
executive officer,
and Employee accepts such employment.
2. Employee agrees to serve as Employer's President and chief
executive 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. Employee shall render services to Employer
as President
and chief executive officer in substantially the same manner and
to
substantially the same extent as Employee's predecessor rendered
his services to
Employer before the date hereof. 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. Employer shall nominate the
Employee to
successive terms as a member of Employer's Board of Directors and
shall use its
best efforts to elect and re-elect Employee as a member of such
Board.
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
$221,450 ("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. 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 President
and chief executive 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, 1995, 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 $1,667 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;
provided,
however, that
Employee may only terminate his
employment pursuant
to subsection
(iv) of this Section
7(C)
within 90 days after he learns of the Employer's decision
not to extend the Agreement. 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
President and chief
executive 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 President
and chief executive
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; (iv) any
decision by the
Employer not to extend the
Agreement pursuant
to Section 3 hereof; or (v) 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
suc
