EXHIBIT 10.4
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 Donald R. Kyle, 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
