SALARY CONTINUATION AGREEMENT WITH CHARLES VIATER
EXHIBIT
10.17
SALARY
CONTINUATION AGREEMENT WITH ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
MFB
FINANCIAL
THIS SALARY CONTINUATION AGREEMENT
(this “Agreement”) is adopted this 18th day of
September, 2007, by and between MFB FINANCIAL, a savings association located in
Mishawaka, Indiana (the “Bank”), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
“Executive”).
The
purpose of this Agreement is to provide specified benefits to the Executive, a
member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development and future business
success of the Bank. This Agreement shall be unfunded for tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974 (“ERISA”), as amended from time to time.
Article
1
Definitions
Whenever used in this Agreement, the
following words and phrases shall have the meanings specified:
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1.1
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“Accrual
Balance” means the liability that should be accrued by the Bank,
under generally accepted accounting principles (“GAAP”), for the Bank’s
obligation to the Executive under this Agreement, by applying Accounting
Principles Board Opinion Number 12 (“APB 12”) as amended by Statement of
Financial Accounting Standards Number 106 (“FAS 106”) and the Discount
Rate. Unless otherwise specified herein, any one of a variety
of amortization methods may be used to determine the Accrual
Balance. However, once chosen, the method must be consistently
applied.
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1.2
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“Beneficiary”
means each designated person or entity, or the estate of the deceased
Executive, entitled to any benefits upon the death of the Executive
pursuant to Article 4.
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1.3
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“Beneficiary
Designation Form” means the form established from time to time by
the Plan Administrator that the Executive completes, signs and returns to
the Plan Administrator to designate one or more
Beneficiaries.
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1.4
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“Board” means
the Board of Directors of the Bank as from time to time
constituted.
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1.5
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“Change in
Control” shall mean any of the
following:
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(i)
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a
change in the ownership of the Bank or the MFB Corp., 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 MFB Corp. 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 MFB Corp.. Such acquisition may occur
as a result of a merger of the MFB Corp. or the Bank into another entity
which pays consideration for the shares of capital stock of the merging
MFB Corp. 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 Bank or the MFB Corp., 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 MFB Corp. (or to cause a change in the effective control
of the Bank or the MFB Corp. (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 MFB Corp. 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 MFB Corp. (or issuance of stock of
the Bank or the MFB Corp.) and stock in the Bank or the MFB Corp. remains
outstanding after the transaction.
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(ii)
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a
change in the effective control of the Bank or the MFB Corp., which shall
occur only on either of the following
dates:
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1)
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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 MFB Corp. possessing thirty percent (30%) or more of the total
voting power of the stock of the Bank or the MFB
Corp.
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2)
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the
date a majority of members of the MFB Corp.’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 MFB Corp.’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 MFB
Corp.
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If any
one person, or more than one person acting as a group, is considered to
effectively control the Bank or the MFB Corp., the acquisition of additional
control of the Bank or the MFB Corp. by the same person or persons is not
considered to cause a change in the effective control of the Bank or the MFB
Corp. (or to cause a change in the ownership of the Bank or the MFB Corp. within
the meaning of subsection (i) of this section).
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(iii)
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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 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:
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1)
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a
shareholder of the Bank (immediately before the asset transfer) in
exchange for or with respect to its
stock;
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2)
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an
entity, 50 percent or more of the total value or voting power of which is
owned, directly or indirectly, by the
Bank.
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3)
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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
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4)
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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).
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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.
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(iv)
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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 MFB Corp.; 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 Bank or the MFB Corp. where the Bank or the MFB Corp. is the surviving
corporation.
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1.6
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“Code” means the
Internal Revenue Code of 1986, as amended, and all regulations and
guidance thereunder, including such regulations and guidance as may be
promulgated after the Effective
Date.
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1.7
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“Disability”
means the Executive: (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months; or (ii)
is, by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under
an accident and health plan covering employees or directors of the
Bank. Medical determination of Disability may be made by either
the Social Security Administration or by the provider of disability
insurance covering employees or directors of the Bank provided that the
definition of “disability” applied under such insurance program complies
with the requirements of the preceding sentence. Upon the
request of the Plan Administrator, the Executive must submit proof to the
Plan Administrator of the Social Security Administration’s or the
provider’s determination.
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1.8
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“Discount Rate”
means the rate used by the Plan Administrator for determining the Accrual
Balance. The initial Discount Rate is six percent
(6.0%). However, the Plan Administrator, in its discretion, may
adjust the Discount Rate to maintain the rate within reasonable standards
according to GAAP and/or applicable bank regulatory
guidance.
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1.9
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“Early
Termination” means the Executive’s Separation from Service before
attainment of Normal Retirement Age except when such Separation from
Service occurs within twenty-four (24) months following a Change in
Control, as a result of a Termination for Cause, or as a result of
Executive’s voluntary Separation from Service as a result of his
resignation.
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1.10
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“Effective Date”
means September 18, 2007.
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1.11
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“Normal Retirement
Age” means the Executive’s age sixty
(60).
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1.12
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“Plan
Administrator” means the Board or such committee or person as the
Board shall appoint.
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1.13
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“Plan Year”
means each twelve (12) month period commencing on September 1 and ending
on August 31 of each year. The initial Plan Year shall commence
on the Effective Date of this Agreement and end on the following August
31.
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1.14
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“Separation
from Service means
termination of the Executive’s employment with the Bank for reasons other
than death or Disability. Whether a Separation from Service has
occurred is determined in accordance with the
requirements of Code Section 409A based on whether the facts and
circumstances indicate that the Bank and Executive reasonably anticipated
that no further services would be performed after a certain date or that
the Executive would continue to provide services after such date (whether
as an employee or as an independent contractor) at an annual rate that is
less than fifty percent (50%) of the bona fide services performed (whether
as an employee or an independent contractor) during the immediately
preceding twelve (12) month
period.
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1.15
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“Specified
Employee” means an employee who at the time of Separation from
Service is a key employee of the Bank or MFB Corp., if any stock of the
Bank or MFB Corp. is publicly traded on an established securities market
or otherwise. For purposes of this Agreement, an employee is a
key employee if the employee meets the requirements of Code Section
416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the
regulations thereunder and disregarding section 416(i)(5)) at any time
during the twelve (12) month period ending on December 31 (the
“identification period”). If the employee is a key employee
during an identification period, the employee is treated as a key employee
for purposes of this Agreement during the twelve (12) month period that
begins on the first day of April following the close of the identification
period.
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1.16
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“Termination for
Cause” means Separation from Service for: (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.
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Article
2
Distributions
During Lifetime
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2.1
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Normal Retirement
Benefit. Upon Separation from Service after attaining
Normal Retirement Age, the Bank shall distribute to the Executive the
benefit described in this Section 2.1 in lieu of any other benefit under
this Article.
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2.1.1
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Amount of
Benefit. The benefit under this Section 2.1 is an
Accrual Balance needed to support an annual payment for fifteen (15) years
of Sixty Thousand Dollars ($60,000) beginning at Normal Retirement
Age. For every Plan Year or portion thereof from Normal
Retirement Age until Separation from Service, the Accrual Balance shall be
increased by the Discount Rate.
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2.1.2
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Distribution of
Benefit. The Bank shall distribute the benefit to the
Executive in one hundred eighty (180) equal monthly installments
commencing on the first day of the month following Separation of
Service.
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2.2
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Resignation. If
Executive resigns resulting in a voluntary Separation from Service, the
Bank shall distribute to the Executive the benefit described in this
Section 2.2 in lieu of any other benefit under this
Article.
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2.2.1
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Amount of
Benefit. The benefit under this Section 2.2 is the one
hundred percent (100%) of the Accrual Balance determined as of the end of
the month preceding Separation from
Service.
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2.2.2
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Distribution of
Benefit. The Bank shall distribute the benefit to the
Executive in thirty-six (36) equal monthly installments commencing within
sixty (60) days following Separation from
Service.
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2.3
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Early Termination
Benefit. If Early Termination occurs, the Bank shall
distribute to the Executive the benefit described in this Section 2.3 in
lieu of any other benefit under this
Article.
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2.3.1
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Amount of
Benefit. The benefit under this Section 2.3 is the
present value of one hundred percent (100%) of the Normal Retirement
Benefit amount described in Section 2.1.1, computed using the actuarial
factors that would be used to compute the present value of benefits under
§ 280G of the Code.
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2.3.2
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Distribution of
Benefit. The Bank shall distribute the benefit to the
Executive in thirty-six (36) equal monthly installments commencing within
sixty (60) days following Separation from
Service.
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2.4
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Disability
Benefit. If the
Executive experiences a Disability prior to Normal Retirement Age, the
Bank shall distribute to the Executive the benefit described in this
Section 2.3 in lieu of any other benefit under this
Article.
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2.4.1
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Amount of
Benefit. The
benefit under this Section 2.3 is one hundred percent (100%) of the
Accrual Balance determined as of the end of the month preceding such
Disability.
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2.4.2
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Distribution of
Benefit. The Bank shall distribute the benefit to the
Executive in one hundred eighty (180) equal monthly installments
commencing on the first day of the month following
determination of Disability.
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2.5
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Change in Control
Benefit. If a Change in Control occurs followed within
twenty-four (24) months by Separation from Service prior to Normal
Retirement Age, the Bank shall distribute to the Executive the benefit
described in this Section 2.4 in lieu of any other benefit under this
Article.
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2.5.1
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Amount of
Benefit. The
benefit under this Section 2.4 is the present value of one hundred percent
(100%) of the Normal Retirement Benefit amount described in Section 2.1.1,
computed using the actuarial factors that would be used to compute the
present value of benefits under § 280G of the
Code.
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2.5.2
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Distribution of
Benefit. The Bank shall
distribute the benefit to the Executive in a lump sum within sixty (60)
days following Separation from
Service.
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2.5.3
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Parachute
Payments. Notwithstanding any provision of this
Agreement to the contrary, and to the extent allowed by Code Section 409A,
if any benefit payment under this Section 2.4 would be treated as an
“excess parachute payment” under Code Section 280G, the Bank shall reduce
such benefit payment to the extent necessary to avoid treating such
benefit payment as an excess parachute
payment.
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2.6
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Restriction on
Commencement of Distributions. Notwithstanding any provision
of this Agreement to the contrary, if the Executive is considered a
Specified Employee, the provisions of this Section 2.5 shall govern all
distributions hereunder. If benefit distributions which would
otherwise be made to the Executive due to Separation from Service are
limited because the Executive is a Specified Employee, then such
distributions shall not be made during the first six (6) months following
Separation from Service. Rather, any distribution which would
otherwise be paid to the Executive during such period shall be accumulated
and paid to the Executive in a lump sum on the first day of the seventh
month following Separation from Service. All subsequent
distributions shall be paid in the manner
specified.
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2.7
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Distributions Upon
Taxation of Amounts Deferred. If, pursuant to Code Section 409A,
the Federal Insurance Contributions Act or other state, local or foreign
tax, the Executive becomes subject to tax on the amounts deferred
hereunder, then the Bank may make a limited distribution to the Executive
in a manner that conforms to the requirements of Code section
409A. Any such distribution will decrease the Executive’s
benefits distributable under this
Agreement.
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2.8
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Change in Form or
Timing of Distributions. For distribution of benefits under
this Article 2, the Executive and the Bank may, subject to the terms of
Section 8.1, amend this Agreement to delay the timing or change the form
of distributions. Any such
amendment:
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(a)
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may
not accelerate the time or schedule of any distribution, except as
provided in Code Section 409A;
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(b)
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must,
for benefits distributable under Sections 2.1, 2.2 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be made; and
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(c)
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must
take effect not less than twelve (12) months after the amendment is
made.
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Article
3
Distribution
at Death
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3.1
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Death During Active
Service. If the Executive dies prior to Separation from
Service, the Bank shall distribute to the Beneficiary the benefit
described in this Section 3.1. This benefit shall be
distributed in lieu of any benefit under Article
2.
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3.1.1
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Amount of
Benefit. The benefit under this Section 3.1 is the
Normal Retirement Benefit amount described in Section
2.1.1.
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3.1.2
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Distribution of
Benefit. The Bank shall distribute the annual benefit to
the Beneficiary in twelve (12) equal monthly installments for fifteen (15)
years commencing on the first day of the fourth month following the
Executive’s death. The Beneficiary shall be required to provide the
Executive’s death certificate to the
Bank.
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3.2
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Death During
Distribution of a Benefit. If the Executive dies after
any benefit distributions have commenced under this Agreement but before
receiving all such distributions, the Bank shall distribute to the
Beneficiary the remaining benefits at the same time and in the same
amounts they would have been distributed to the Executive had the
Executive survived.
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3.3
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Death Before Benefit
Distributions Commence. If the Executive
is entitled to benefit distributions under this Agreement but dies prior
to the date that commencement of said benefit distributions are scheduled
to be made under this Agreement, the Bank shall distribute to the
Beneficiary the same benefits to which the Executive was entitled prior to
death, except that the benefit distributions shall be paid in the manner
specified in Section 3.1.2 and shall commence on the first day of the
fourth month following the Executive’s
death.
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Article
4
Beneficiaries
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4.1
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In
General. The Executive shall have the right, at any
time, to designate a Beneficiary to receive any benefit distributions
under this Agreement upon the death of the Executive. The
Beneficiary designated under this Agreement may be the same as or
different from the beneficiary designated under any other plan of the Bank
in which the Executive
participates.
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4.2
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Designation. The
Executive shall designate a Beneficiary by completing and signing the
Beneficiary Designation Form and delivering it to the Plan Administrator
or its designated agent. If the Executive names someone other
than the Executive’s spouse as a Beneficiary, the Plan Administrator may,
in its sole discretion, determine that spousal consent is required to be
provided in a form designated by the Plan Administrator, executed by the
Executive’s spouse and returned to the Plan Administrator. The
Executive's beneficiary designation shall be deemed automatically revoked
if the Beneficiary predeceases the Executive or if the Executive names a
spouse as Beneficiary and the marriage is subsequently
dissolved. The Executive shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms
of the Beneficiary Designation Form and the Plan Administrator’s rules and
procedures. Upon the acceptance by the Plan Administrator of a
new Beneficiary Designation Form, all Beneficiary designations previously
filed shall be cancelled. The Plan Administrator shall be
entitled to rely on the last Beneficiary Designation Form filed by the
Executive and accepted by the Plan Administrator prior to the Executive’s
death.
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4.3
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Acknowledgment. No
designation or change in designation of a Beneficiary shall be effective
until received, accepted and acknowledged in writing by the Plan
Administrator or its designated
agent.
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4.4
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No Beneficiary
Designation. If the Executive dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Executive, then the Executive’s spouse shall be the designated
Beneficiary. If the Executive has no surviving spouse, any
benefit shall be paid to the Executive's
estate.
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4.5
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Facility of
Distribution. If the Plan Administrator determines in
its discretion that a benefit is to be distributed to a minor, to a person
declared incompetent or to a person incapable of handling the disposition
of that person’s property, the Plan Administrator may direct distribution
of such benefit to the guardian, legal representative or person having the
care or custody of such minor, incompetent person or incapable
person. The Plan Administrator may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Any distribution of a benefit
shall be a distribution for the account of the Executive and the
Beneficiary, as the case may be, and shall completely discharge any
liability under this Agreement for such distribution
amount.
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Article
5
General
Limitations
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5.1
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Termination for
Cause. Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not distribute any benefit under this
Agreement if the Executive’s employment with the Bank is terminated by the
Bank or an applicable regulator due to a Termination for
Cause.
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5.2
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Suicide or
Misstatement. No benefit shall be distributed if the
Executive commits suicide within two (2) years after the Effective Date,
or if an insurance company which issued a life insurance policy covering
the Executive and owned by the Bank denies coverage (i) for material
misstatements of fact made by the Executive on an application for such
life insurance, or (ii) for any other
reason.
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5.3
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Removal. Notwithstanding
any provision of this Agreement to the contrary, the Bank shall not
distribute any benefit under this Agreement if the Executive is subject to
a final removal or prohibition order issued by an appropriate federal
banking agency pursuant to Section 8(e) of the Federal Deposit Insurance
Act. Notwithstanding anything herein to the contrary, any
payments made to the Executive pursuant to this Agreement, or otherwise,
shall be subject to and conditioned upon compliance with 12 U.S.C. 1828
and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification
Payments and any other regulations or guidance promulgated
thereunder.
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Article
6
Administration
of Agreement
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6.1
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Plan Administrator
Duties. The Plan Administrator shall administer this
Agreement according to its express terms and shall also have the
discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this Agreement
and (ii) decide or resolve any and all questions, including
interpretations of this Agreement, as may arise in connection with this
Agreement to the extent the exercise of such discretion and authority does
not conflict with Code Section
409A.
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6.2
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Agents. In
the administration of this Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as the Plan
Administrator sees fit, including acting through a duly appointed
representative, and may from time to time consult with counsel who may be
counsel to the Bank.
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6.3
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Binding Effect of
Decisions. Any decision or action of the Plan
Administrator with respect to any question arising out of or in connection
with the administration, interpretation or application of this Agreement
and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in this
Agreement.
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6.4
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Indemnity of Plan
Administrator. The Bank shall indemnify and hold
harmless the Plan Administrator against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act
with respect to this Agreement, except in the case of willful misconduct
by the Plan Administrator.
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6.5
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Bank
Information. To enable the Plan Administrator to perform
its functions, the Bank shall supply full and timely information to the
Plan Administrator on all matters relating to the date and circumstances
of the Executive’s death, Disability or Separation from Service, and such
other pertinent information as the Plan Administrator may reasonably
require.
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6.6
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Annual
Statement. The Plan Administrator shall provide to the Executive,
within one hundred twenty (120) days after the end of each Plan Year, a
statement setting forth the benefits to be distributed under this
Agreement.
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Article
7
Claims
And Review Procedures
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7.1
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Claims
Procedure. An Executive or Beneficiary (“claimant”) who
has not received benefits under this Agreement that he or she believes
should be distributed shall make a claim for such benefits as
follows:
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7.1.1
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Initiation – Written
Claim. The claimant initiates a claim by submitting to
the Plan Administrator a written claim for the benefits. If
such a claim relates to the contents of a notice received by the claimant,
the claim must be made within sixty (60) days after such notice was
received by the claimant. All other claims must be made within
one hundred eighty (180) days of the date on which the event that
caused the claim to arise occurred. The claim must state with
particularity the determination desired by the
claimant.
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7.1.2
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Timing of Plan
Administrator Response. The Plan
Administrator shall respond to such claimant within ninety (90) days after
receiving the claim. If the Plan Administrator determines that
special circumstances require additional time for processing the claim,
the Plan Administrator can extend the response period by an additional
ninety (90) days by notifying the claimant in writing, prior to the end of
the initial ninety (90) day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to
render its decision.
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7.1.3
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Notice of
Decision. If the Plan Administrator denies part or all
of the claim, the Plan Administrator shall notify the claimant in writing
of such denial. The Plan Administrator shall write the
notification in a manner calculated to be understood by the
claimant. The notification shall set
forth:
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(a)
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The
specific reasons for the
denial;
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(b)
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A
reference to the specific provisions of this Agreement on which the denial
is based;
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(c)
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A
description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is
needed;
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(d)
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An
explanation of this Agreement’s review procedures and the time limits
applicable to such procedures; and
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(e)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on
review.
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7.2
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Review
Procedure. If the Plan Administrator denies part or all
of the claim, the claimant shall have the opportunity for a full and fair
review by the Plan Administrator of the denial as
follows:
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7.2.1
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Initiation – Written
Request. To initiate the review, the claimant, within
sixty (60) days after receiving the Plan Administrator’s notice of denial,
must file with the Plan Administrator a written request for
review.
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7.2.2
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Additional Submissions
– Information Access. The claimant shall then have the
opportunity to submit written comments, documents, records and other
information relating to the claim. The Plan Administrator shall
also provide the claimant, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information
relevant (as defined in applicable ERISA regulations) to the claimant’s
claim for benefits.
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7.2.3
|
Considerations on
Review. In considering the review, the Plan
Administrator shall take into account all materials and information the
claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
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7.2.4
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Timing of Plan
Administrator Response. The Plan Administrator shall
respond in writing to such claimant within sixty (60) days after receiving
the request for review. If the Plan Administrator determines
that special circumstances require additional time for processing the
claim, the Plan Administrator can extend the response period by an
additional sixty (60) days by notifying the claimant in writing, prior to
the end of the initial sixty (60) day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to
render its decision.
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7.2.5
|
Notice of
Decision. The Plan Administrator shall notify the
claimant in writing of its decision on review. The Plan
Administrator shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set
forth:
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(a)
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The
specific reasons for the
denial;
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|
|
(b)
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A
reference to the specific provisions of this Agreement on which the denial
is based;
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(c)
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A
statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits;
and
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(d)
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A
statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).
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Article
8
Amendments
and Termination
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8.1
|
Amendments. This
Agreement may be amended only by a written agreement signed by the Bank
and the Executive. However, the Bank may unilaterally amend
this Agreement to conform with written directives to the Bank from its
auditors or banking regulators or to comply with legislative changes or
tax law, including without limitation Code Section
409A.
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8.2
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Plan Termination
Generally. This Agreement may be terminated only by a
written agreement signed by the Bank and the Executive. The
benefit shall be the Accrual Balance as of the date this Agreement is
terminated. Except as provided in Section 8.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, upon such termination benefit distributions
will be made at the earliest distribution event permitted under Article 2
or Article 3.
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8.3
|
Plan Terminations
Under Code Section 409A. Notwithstanding anything to the
contrary in Section 8.2, if the Bank terminates this Agreement in the
following circumstances:
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|
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(a)
|
Within
thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of this Agreement and further provided that
all the Bank's arrangements which would be aggregated under
Treasury Regulations Section 1.409A-1(c)(2) are terminated and liquidated
so the Executive and all participants in those arrangements are required
to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of such
termination;
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(b)
|
Upon
the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under this Agreement are included in the
Executive's gross income in the latest of (i) the calendar year in which
this Agreement terminates; (ii) the calendar year in which the amount is
no longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
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|
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(c)
|
Upon
the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not
occur proximate to a downturn in the financial health of the Bank, (ii)
all termination distributions are made no earlier than twelve (12) months
and no later than twenty-four (24) months following such termination, and
(iii) the Bank does not adopt any new arrangement that would be a Similar
Arrangement for a minimum of three (3) years following the date the Bank
takes all necessary action to irrevocably terminate and liquidate the
Agreement;
|
the Bank
may distribute the Accrual Balance, determined as of the date of the termination
of this Agreement, to the Executive in a lump sum subject to the above
terms.
Article
9
Miscellaneous
|
9.1
|
Binding
Effect. This Agreement shall bind the Executive and the
Bank and their beneficiaries, survivors, executors, administrators and
transferees.
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|
9.2
|
No Guarantee of
Employment. This Agreement is not a contract for
employment. It does not give the Executive the right to remain
as an employee of the Bank nor interfere with the Bank's right to
discharge the Executive. It does not require the Executive to
remain an employee nor interfere with the Executive's right to terminate
employment at any time.
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9.3
|
Non-Transferability. Benefits
under this Agreement cannot be sold, transferred, assigned, pledged,
attached or encumbered in any
manner.
|
|
9.4
|
Tax Withholding and
Reporting. The Bank shall withhold any taxes that are
required to be withheld, including but not limited to taxes owed under
Code Section 409A from the benefits provided under this
Agreement. The Executive acknowledges that the Bank’s sole
liability regarding taxes is to forward any amounts withheld to the
appropriate taxing authorities. The Bank shall satisfy all
applicable reporting requirements, including those under Code Section
409A.
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|
9.5
|
Applicable
Law. This Agreement and all rights hereunder shall be
governed by the laws of the State of Indiana, except to the extent
preempted by the laws of the United States of
America.
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|
9.6
|
Unfunded
Arrangement. The Executive and the Beneficiary are
general unsecured creditors of the Bank for the distribution of benefits
under this Agreement. The benefits represent the mere promise
by the Bank to distribute such benefits. The rights to benefits
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by
creditors. Any insurance on the Executive's life or other
informal funding asset is a general asset of the Bank to which the
Executive and Beneficiary have no preferred or secured
claim.
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|
9.7
|
Reorganization. The Bank shall
not merge or consolidate into or with another bank, or reorganize, or sell
substantially all of its assets to another bank, firm or person unless
such succeeding or continuing bank, firm or person agrees to assume and
discharge the obligations of the Bank under this
Agreement. Upon the occurrence of such an event, the term
“Bank” as used in this Agreement shall be deemed to refer to the successor
or survivor entity.
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|
9.8
|
Entire
Agreement. This Agreement
constitutes the entire agreement between the Bank and the Executive as to
the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set
forth herein.
|
|
9.9
|
Interpretation. Wherever
the fulfillment of the intent and purpose of this Agreement requires and
the context will permit, the use of the masculine gender includes the
feminine and use of the singular includes the
plural.
|
|
9.10
|
Alternative
Action. In the event it shall become impossible for the
Bank or the Plan Administrator to perform any act required by this
Agreement due to regulatory or other constraints, the Bank or Plan
Administrator may perform such alternative act as most nearly carries out
the intent and purpose of this Agreement and is in the best interests of
the Bank, provided that such alternative act does not violate Code Section
409A.
|
|
9.11
|
Headings. Article
and section headings are for convenient reference only and shall not
control or affect the meaning or construction of any provision
herein.
|
|
9.12
|
Validity. If
any provision of this Agreement shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Agreement shall be construed and enforced as if such
illegal or invalid provision had never been included
herein.
|
|
9.13
|
Notice. Any
notice or filing required or permitted to be given to the Bank or Plan
Administrator under this Agreement shall be sufficient if in writing and
hand-delivered or sent by registered or certified mail to the address
below:
|
|
MFB
Financial
|
|
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
|
▇.▇.
▇▇▇ ▇▇▇
|
|
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
|
Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification.
Any
notice or filing required or permitted to be given to the Executive under this
Agreement shall be sufficient if in writing and hand-delivered or sent by mail
to the last known address of the Executive.
|
9.14
|
Deduction Limitation
on Benefit Payments. If the Bank reasonably anticipates
that the Bank’s deduction with respect to any distribution under this
Agreement would be limited or eliminated by application of Code Section
162(m), then to the extent deemed necessary by the Bank to ensure that the
entire amount of any distribution from this Agreement is deductible, the
Bank may delay payment of any amount that would otherwise be distributed
under this Agreement. The delayed amounts shall be distributed
to the Executive (or the Beneficiary in the event of the Executive's
death) at the earliest date the Bank reasonably anticipates that the
deduction of the payment of the amount will not be limited or eliminated
by application of Code Section
162(m).
|
|
9.15
|
Compliance with
Section 409A. This Agreement shall be interpreted and
administered consistent with Code Section
409A.
|
IN
WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank
have signed this Agreement.
|
EXECUTIVE:
|
MFB
FINANCIAL
|
||
|
By:
|
|||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
Title:
|
▇▇▇▇▇▇
▇. ▇▇▇▇, Executive
|
|
|
Vice
President and Chief Operating
Officer
|
|||