15
MFB FINANCIAL
DIRECTOR FEE CONTINUATION AGREEMENT
THIS DIRECTOR FEE 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 [NAME OF DIRECTOR]
(the "Director").
The purpose of this Agreement is to provide specified benefits to the
Director who contributes 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:
1.1 "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 Director 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.
1.2 "Beneficiary" means each designated person or entity, or the estate of
the deceased Director, entitled to any benefits upon the death of the
Director pursuant to Article 4.
1.3 "Beneficiary Designation Form" means the form established from time to
time by the Plan Administrator that the Director completes, signs and
returns to the Plan Administrator to designate one or more
Beneficiaries.
1.4 "Board" means the Board of Directors of the Bank as from time to time
constituted.
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1.5 "Change in Control" shall mean any of the following:
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(i) 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.
(ii) a change in the effective control of the Bank or the MFB
Corp., which shall occur only on either of the following
dates:
1) the date any one person, or more than one person
acting as a group acquires (or has acquired during
the 12 month period ending on the date of the most
recent acquisition by such person or persons)
ownership of stock of the 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..
2) 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.
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).
(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 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:
1) a shareholder of the Bank (immediately before the
asset transfer) in exchange for or with respect to
its stock;
2) an entity, 50 percent or more of the total value or
voting power of which is owned, directly or
indirectly, by the Bank.
3) a person, or more than one person acting as a group,
that owns, directly or indirectly, 50 percent or more
of the total value or voting power of all the
outstanding stock of the Bank; or
4) an entity, at least 50 percent of the total value or
voting power of which is owned, directly or
indirectly, by a person described in paragraph (iii).
For purposes of this subsection (iii) and except as otherwise provided
in paragraph 1) above, a person's status is determined immediately
after the transfer of the assets.
(iv) For purposes of this section, persons will not be considered
to be acting as a group solely because they purchase or own
stock of the same corporation at the same time, or as a result
of the same public offering. Persons will be considered to be
acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the 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.
1.6 "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.
1.7 "Compensation" means the total Fees paid to the Director during the
last Plan Year prior to Separation
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from Service.
1.8 "Disability" means the Director: (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 Director must
submit proof to the Plan Administrator of the Social Security
Administration's or the provider's determination.
1.9 "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.
1.10 "Early Termination" means the Director'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 or due to Termination for Cause.
1.11 "Effective Date" means September 18, 2007
1.12 "Fees" means the total fees payable to the Director by the Bank during
a Plan Year.
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1.13 "Normal Retirement Age" means the Director's age seventy-two (72).
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1.14 "Plan Administrator" means the Board or such committee or person as the
Board shall appoint.
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1.15 "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.
1.16 "Separation from Service means with respect to a director who is not
also an employee of the Bank the good faith and complete termination of
such Director's relationship with the Bank as a member of its board of
directors. A Director who is also an employee of the Bank shall incur a
"Separation from Service" only if he both incurs a good faith and
complete termination of his relationship with the Bank as a member of
its board of directors and has a "termination of employment;" provided,
however, that the Director shall not be required to have a "termination
of employment" if this Plan is not required to be aggregated with any
other nonqualified deferred compensation plan of the Bank in which the
Director participates as an employee under Section 409A of the Code.
For purposes of this section, a "termination of employment" means the
termination of the individual's employment with the Bank for reasons
other than death or Disability. Whether a "termination of employment"
takes place is determined based on the facts and circumstances
surrounding the termination of the individual's employment. A
"termination of employment" will be considered to have occurred if it
is reasonably anticipated that (a) the individual will not perform any
services for the Bank (whether as an employee or an independent
contractor) after the termination of employment, or (b) the individual
will continue to provide services to the Bank (whether as an employee
or an independent contractor) at an annual rate that is less than fifty
percent (50%) of the bona fide services rendered during the immediately
preceding twelve months of employment.
1.17 "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, a
person is a key employee if the person 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 person is a key employee during an
identification period, the person 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.
1.18 "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.
1.19 "Years of Service" means the twelve (12) consecutive month period
beginning on the date the Director began service on the Board and any
twelve (12) month anniversary thereof during the entirety of which time
the Director served on the Board. Service with a subsidiary or other
entity controlled by the Bank before the time such entity became a
subsidiary or under such control shall not be considered "credited
service."
Article 2
Distributions During Lifetime
2.1 Normal Retirement Benefit. Upon the Director's Separation from Service
after attaining Normal Retirement Age and completing at least five (5)
Years of Service, the Bank shall distribute to the Director the benefit
described in this Section 2.1 in lieu of any other benefit under this
Article.
2.1.1 Amount of Benefit. The annual benefit under this Section 2.1
is Fifty Percent (50%) of Compensation. If the Director has
less than five (5) Years of Service, there is no Normal
Retirement Benefit.
2.1.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Director in twelve (12) equal monthly
installments commencing on the first day of the month
following Separation from Service. The annual benefit shall be
distributed for the number of years indicated below:
Years of Service Annual Benefit Shall Be Distributed for the Following
Number of Years
0 up to 5 0 (no benefit)
5 up to 10 5
10+ 10
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2.2 Early Termination Benefit. If Early Termination occurs and the Director
has at least five (5) Years of Service, the Bank shall distribute to
the Director the benefit described in this Section 2.2 in lieu of any
other benefit under this Article.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
Accrual Balance determined as of the end of the month
preceding Separation from Service. If the Director has less
than five (5) Years of Service, there is no Early Termination
benefit.
2.2.2 Distribution of Benefit. The Bank shall distribute the benefit
to the Director in a lump sum within sixty (60) days following
Separation from Service.
2.3 Disability Benefit. If the Director experiences a Disability prior to
Normal Retirement Age and has at least five (5) Years of Service, the
Bank shall distribute to the Director the benefit described in this
Section 2.3 in lieu of any other benefit under this Article.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
Accrual Balance determined as of the end of the month
preceding such Disability. If the Director has less than five
(5) Years of Service, there is no Disability Benefit.
2.3.2 Distribution of Benefit. The Bank shall distribute the benefit
to the Director in lump sum within sixty (60) days following
determination of Disability.
2.4 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 Director the
benefit described in this Section 2.4 in lieu of any other benefit
under this Article.
2.4.1 Amount of Benefit. The annual benefit under this Section 2.4
is the present value of one hundred percent (100%) of the
annual Normal Retirement Benefit amount described in Section
2.1.1, without regard to Years of Service, computed using the
actuarial factors that would be used to compute the present
value of benefits under ss. 280G of the Code.
2.4.2 Distribution of Benefit. The Bank shall distribute the annual
benefit to the Director in a lump sum within 60 days following
Separation from Service.
2.4.3 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.
2.5 Restriction on Commencement of Distributions. Notwithstanding any
provision of this Agreement to the contrary, if the Director 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 Director due to Separation from
Service are limited because the Director 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 Director during such period shall be
accumulated and paid to the Director 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.
2.6 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 Director becomes subject to tax on the
amounts deferred hereunder, then the Bank may make a limited
distribution to the Director in a manner that conforms to the
requirements of Code section 409A. Any such distribution will decrease
the Director's benefits distributable under this Agreement.
2.7 Change in Form or Timing of Distributions. For distribution of benefits
under this Article 2, the Director 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:
(a) may not accelerate the time or schedule of any distribution, except as
provided in Code Section 409A; (b) 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
(c) must take effect not less than twelve (12) months after the amendment is
made.
Article 3
Distribution at Death
3.1 Death During Active Service. If the Director 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.
3.1.1 Amount of Benefit. The benefit under this Section 3.1 is the
Accrual Balance determined as of the end of the month
preceding the Director's death.
3.1.2 Distribution of Benefit. The Bank shall distribute the benefit
to the Beneficiary in a lump sum on the first day of the
fourth month following the Director's death. The Beneficiary
shall be required to provide to the Bank the Director's death
certificate.
3.2 Death During Distribution of a Benefit. If the Director 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 Director had the
Director survived.
3.3 Death Before Benefit Distributions Commence. If the Director 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 Director 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 Director's death.
Article 4
Beneficiaries
4.1 In General. The Director shall have the right, at any time, to
designate a Beneficiary to receive any benefit distributions under this
Agreement upon the death of the Director. 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
Director participates.
4.2 Designation. The Director 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 Director names
someone other than the Director'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 Director's spouse and returned to the
Plan Administrator. The Director's beneficiary designation shall be
deemed automatically revoked if the Beneficiary predeceases the
Director or if the Director names a spouse as Beneficiary and the
marriage is subsequently dissolved. The Director 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 Director and accepted by the Plan
Administrator prior to the Director's death.
4.3 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.
4.4 No Beneficiary Designation. If the Director dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease
the Director, then the Director's spouse shall be the designated
Beneficiary. If the Director has no surviving spouse, any benefit shall
be paid to the Director's estate.
4.5 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 Director and the
Beneficiary, as the case may be, and shall completely discharge any
liability under this Agreement for such distribution amount.
Article 5
General Limitations
5.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not distribute any benefit under this
Agreement if the Director's service on the Board is terminated by the
Bank or an applicable regulator due to a Termination for Cause.
5.2 Suicide or Misstatement. No benefit shall be distributed if the
Director commits suicide within two (2) years after the Effective Date,
or if an insurance company which issued a life insurance policy
covering the Director and owned by the Bank denies coverage (i) for
material misstatements of fact made by the Director on an application
for such life insurance, or (ii) for any other reason.
5.3 Removal. Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not distribute any benefit under this
Agreement if the Director 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 Director
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.
Article 6
Administration of Agreement
6.1 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.
6.2 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.
6.3 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.
6.4 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.
6.5 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 Director's death, Disability or Separation from
Service, and such other pertinent information as the Plan Administrator
may reasonably require.
6.6 Annual Statement. The Plan Administrator shall provide to the Director,
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.
Article 7
Claims And Review Procedures
7.1 Claims Procedure. An Director or Beneficiary ("claimant") who has
not received benefits under this
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Agreement that he or she believes should be distributed shall make a
claim for such benefits as follows:
7.1.1 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.
7.1.2 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.
7.1.3 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:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of this Agreement
on which the denial is based; (c) A description of any
additional information or material necessary for the claimant
to
perfect the claim and an explanation of why it is
needed; and
(d) An explanation of this Agreement's review procedures
and the time limits applicable to such procedures.
7.2 Review Procedure. If the Plan Administrator denies part or all of the
claim, the claimant shall have the
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opportunity for a full and fair review by the Plan Administrator of the
denial as follows:
7.2.1 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.
7.2.2 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.
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.
7.2.4 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.
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:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of this
Agreement on which the denial is based; and
(c) 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.
Article 8
Amendments and Termination
8.1 Amendments. This Agreement may be amended only by a written agreement
signed by the Bank and the Director. 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.
8.2 Plan Termination Generally. This Agreement may be terminated only by a
written agreement signed by the Bank and the Director. 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.
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:
(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 Director 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;
(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 Director'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
(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 Director 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 Director in a lump sum
subject to the above terms.
Article 9
Miscellaneous
9.1 Binding Effect. This Agreement shall bind the Director and the Bank
and their beneficiaries, survivors,
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executors, administrators and transferees.
9.2 No Guarantee of Service. This Agreement is not a contract for service.
It does not give the Director the right to remain a member of the
Board, nor interfere with the Bank's right to discharge the Director.
It does not require the Director to remain a director nor interfere
with the Director's right to terminate service at any time.
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 Director 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.
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.
9.6 Unfunded Arrangement. The Director 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 Director's life or other informal funding asset is a general asset
of the Bank to which the Director and Beneficiary have no preferred or
secured claim.
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.
9.8 Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Director as to the subject matter hereof. No
rights are granted to the Director 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
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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
4100 Edison Lakes Parkway, Suite 300
P.O. Box 528
Mishawaka, IN 46546-0528
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 Director
under this Agreement shall be sufficient if in writing and
hand-delivered or sent by mail to the last known address of the
Director.
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 Director (or the Beneficiary in the event
of the Director'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
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Section 409A.
IN WITNESS WHEREOF, the Director and a duly authorized representative
of the Bank have signed this Agreement.
DIRECTOR MFB FINANCIAL
By:
- ----------------------------------- ----------------------------------
[Name of Director] Title:
----------------------------------
MFB FINANCIAL
DIRECTOR FEE CONTINUATION AGREEMENT
BENEFICIARY DESIGNATION FORM
- --------------------------------------------------------------------------------
{ } New Designation
{ } Change in Designation
I, [Name of Director], designate the following as Beneficiary under this
Agreement:
- --------------------------------------------------------------------------------
Primary:
- --------------------------------------------------------------------------------
- -----------------------------------------------------------
- -----------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Contingent:
- -----------------------------------------------------------
- -----------------------------------------------------------
- --------------------------------------------------------------------------------
Notes:
o Please PRINT CLEARLY or TYPE the names of the beneficiaries.
o To name a trust as Beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.
o To name your estate as Beneficiary, please write "Estate of [your name]".
o Be aware that none of the contingent beneficiaries will receive
anything unless ALL of the primary beneficiaries predecease you.
I understand that I may change these beneficiary designations by delivering a
new written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death. I
further understand that the designations will be automatically revoked if the
Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and our
marriage is subsequently dissolved.
Name: _______________________________
Signature: _______________________________ Date: __________________
Received by the Plan Administrator this ________ day of ________________, 200__
By: _________________________________
Title: _________________________________
INDS01 CVS 978007v5