Document:

lin_8k0907ex104.htm

    Exhibit
      10.4

     

    

     

    AMENDED
      AND RESTATED EMPLOYMENT AGREEMENT

     

    This
      Amended And Restated Employment Agreement (the “Agreement”),
      made and dated as of October 1, 2007, by and between Lincoln Bank, an Indiana
      commercial bank (“Employer”), and John M. Baer, a resident of
      Hendricks County, Indiana (“Employee”), but effective as of
      January 1, 2005.

     

    This
      Agreement amends and restates the prior Employment Agreement between the
      Employer and the Employee dated January 1, 2007 (the “Prior
      Agreement”). It has been amended and restated for compliance with the
      final regulations under Section 409A of the Internal Revenue Code of 1986,
      as
      amended, effective as of January 1, 2005.

     

     

    W
      I T N E S S E T H

     

    Whereas,
      Employee is employed by Employer as its Treasurer and Chief Financial Officer
      and has made valuable contributions to the profitability and financial strength
      of Employer;

     

    Whereas,
      Employer and Employee entered into an Employment Agreement dated as of January
      1, 2007, which Employer and Employee now desire to amend and restate in its
      entirety as provided herein;

     

    Whereas,
      Employer desires to encourage Employee to continue to make valuable
      contributions to Employer’s business operations and not to seek or accept
      employment elsewhere;

     

    Whereas,
      Employee desires to be assured of a secure minimum compensation from Employer
      for his services over a defined term;

     

    Whereas,
      Employer desires to assure the continued services of Employee on behalf of
      Employer on an objective and impartial basis and without distraction or conflict
      of interest in the event of an attempt by any person to obtain control of
      Employer or Lincoln Bancorp (the “Holding Company”), the
      Indiana corporation which owns all of the issued and outstanding capital stock
      of Employer;

     

    Whereas,
      Employer recognizes that when faced with a proposal for a change of control
      of
      Employer or the Holding Company, Employee will have a significant role in
      helping the Boards of Directors assess the options and advising the Boards
      of
      Directors on what is in the best interests of Employer, the Holding Company,
      and
      its shareholders, and it is necessary for Employee to be able to provide this
      advice and counsel without being influenced by the uncertainties of his own
      situation;

     

    Whereas,
      Employer desires to provide fair and reasonable benefits to Employee on the
      terms and subject to the conditions set forth in this Agreement;

     

     Whereas,
      Employer desires reasonable protection of its confidential business and customer
      information which it has developed over the years at substantial expense and
      assurance that Employee will not compete with Employer for a reasonable period
      of time after termination of his employment with Employer, except as otherwise
      provided herein.

     

    Now,
      Therefore, in consideration of these premises, the mutual covenants and
      undertakings herein contained and the continued employment of Employee by
      Employer as its

     

    
      
        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

    Treasurer
      and Chief Financial Officer, Employer and Employee, each intending to be legally
      bound, covenant and agree as follows:

     

    1.           Upon
      the terms and subject to the conditions set forth in this Agreement, Employer
      employs Employee as Employer’s Treasurer and Chief Financial Officer, and
      Employee accepts such employment.

     

    2.           Employee
      agrees to serve as Employer’s Treasurer and Chief Financial Officer and to
      perform such duties in that office as may reasonably be assigned to him by
      Employer’s Board of Directors; provided, however, that such
      duties shall be performed in or from the offices of Employer currently located
      at Plainfield, Indiana, and shall be of the same character as those previously
      performed by Employee and generally associated with the office held by Employee.
      Employee shall not be required to be absent from the location of the principal
      executive offices of Employer on travel status or otherwise more than forty-five
      (45) days in any calendar year. Employer shall not, without the written consent
      of Employee, relocate or transfer Employee to a location more than thirty (30)
      miles from Employer’s primary office. Employee shall render services to Employer
      as Treasurer and Chief Financial Officer in substantially the same manner and
      to
      substantially the same extent as Employee rendered his services to Employer
      before the date hereof. While employed by Employer, Employee shall devote
      substantially all his business time and efforts to Employer’s business during
      regular business hours and shall not engage in any other related
      business.

     

    3.           The
      term of this Agreement shall begin on January 1, 2005 (the “Effective
      Date”) and shall end on January 1, 2009; provided,
however, that such term shall be extended automatically
      for an
      additional year on each anniversary of January 1, 2007, if Employer’s Board of
      Directors determines by resolution that the performance of Employee has met
      the
      Board’s requirements and standards and that this Agreement should be extended
      prior to such anniversary of the Effective Date, unless either
      party  hereto gives written notice to the other party not to so extend
      within ninety (90) days prior to such anniversary, in which case no further
      automatic extension shall occur and the term of this Agreement shall end one
      year subsequent to the anniversary as of which the notice not to extend for
      an
      additional year is given (such term, including any extension thereof shall
      herein be referred to as the “Term”).

     

    4.           Employee
      shall receive an annual salary of $115,609 (“Base
      Compensation”) payable at regular intervals in accordance with
      Employer’s normal payroll practices now or hereafter in effect. Employer may
      consider and declare from time to time increases in the salary it pays Employee
      and thereby increases in his Base Compensation. Prior to a Change of Control,
      Employer may also declare decreases in the salary it pays Employee if the
      operating results of Employer are significantly less favorable than those for
      the fiscal year ending December 31, 1997, and Employer makes similar decreases
      in the salary it pays to other executive officers of Employer. After a Change
      in
      Control, Employer shall consider and declare salary increases based upon the
      following standards:

     

    (a)           Inflation;

     

    (b)           Adjustments
      to the salaries of other senior management personnel; and

     

    (c)           Past
      performance of Employee and the contribution which Employee makes to the
      business and profits of Employer during the Term.

     

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

    Any
      and
      all increases or decreases in Employee’s salary pursuant to this section shall
      cause the level of Base Compensation to be increased or decreased by the amount
      of each such increase or decrease for purposes of this Agreement. The increased
      or decreased level of Base Compensation as provided in this section shall become
      the level of Base Compensation for the remainder of the Term of this Agreement
      until there is a further increase or decrease in Base Compensation as provided
      herein.

     

    5.           So
      long as Employee is employed by Employer pursuant to this Agreement, he shall
      be
      included as a participant in all present and future employee benefit,
      retirement, and compensation plans generally available to employees of Employer,
      consistent with his Base Compensation and his position as Treasurer and Chief
      Financial Officer of Employer, including, without limitation, Employer’s or the
      Holding  Company’s pension plan, 401(k) plan, Stock Option Plan,
      Recognition and Retention Plan and Trust, Employee Stock Ownership Plan, and
      hospitalization, disability and group life insurance plans, each of which
      Employer agrees to continue in effect on terms no less favorable than those
      currently in effect as of the date hereof (as permitted by law) during the
      Term
      of this Agreement unless prior to a Change of Control the operating results
      of
      Employer are significantly less favorable than those for the fiscal year ending
      December 31, 1997, and unless (either before or after a Change of Control)
      changes in the accounting, legal, or tax treatment of such plans would adversely
      affect Employer’s operating results or financial condition in a material way,
      and the Board of Directors of Employer or the Holding Company concludes that
      modifications to such plans need to be made to avoid such adverse
      effects.

     

    6.           So
      long as Employee is employed by Employer pursuant to this Agreement, Employee
      shall receive reimbursement from Employer for all reasonable business expenses
      incurred in the course of his employment by Employer, upon submission to
      Employer of written vouchers and statements for reimbursement. So long as
      Employee is employed by Employer pursuant to the terms of this Agreement,
      Employer shall continue in effect vacation policies applicable to Employee
      no
      less favorable from his point of view than those written vacation policies
      in
      effect on the date hereof. So long as Employee is employed by Employer pursuant
      to this Agreement, Employee shall be entitled to office space and working
      conditions no less favorable than were in effect for him on the date
      hereof.

     

    7.           Subject
      to the respective continuing obligations of the parties, including but not
      limited to those set forth in Section 9(a), Section 9(b), Section 9(c) and
      Section 9(d) hereof, Employee’s employment by Employer may be terminated
      prior to the expiration of the Term of this Agreement as follows:

     

    (a)           Employer,
      by action of its Board of Directors and upon written notice to Employee, may
      terminate Employee’s employment with Employer immediately for cause. For
      purposes of this Section 7(c), “cause” shall be defined as (i)
      personal dishonesty, (ii) incompetence, (iii) willful misconduct, (iv) breach
      of
      fiduciary duty involving personal profit, (v) intentional failure to perform
      stated duties, (vi) willful violation of any law, rule, or regulation (other
      than traffic violations or similar offenses) or final cease-and-desist order,
      or
      (vii) any material breach of any provision of this Agreement.

     

    (b)           Employer,
      by action of its Board of Directors may terminate Employee’s employment with
      Employer without cause at any time; provided, however, that
      the “date

     

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

    of
      termination” for purposes of determining benefits payable to Employee
      under Section 8(b) hereof shall be the date which is sixty (60) days after
      Employee receives written notice of such termination.

     

    (c)           Employee,
      by written notice to Employer, may terminate his employment with Employer
      immediately for cause. For purposes of this Section 7(c),
“cause” shall be defined as (i) any action by Employer’s Board
      of Directors to remove Employee as Treasurer and Chief Financial Officer of
      Employer, except where Employer’s Board of Directors properly acts to remove
      Employee from such office for “cause” as defined in
      Section 7(a) hereof, (ii) any action by Employer’s Board of Directors to
      materially limit, increase, or modify Employee’s duties and/or authority as
      Treasurer and Chief Financial Officer of Employer, (iii) any failure of Employer
      to obtain the assumption of the obligation to perform this Agreement by any
      successor or the reaffirmation of such obligation by Employer, as contemplated
      in Section 20 hereof; or (iv) any material breach by Employer of a term,
      condition or covenant of this Agreement.

     

    (d)           Employee,
      upon sixty (60) days’ written notice to Employer, may terminate his employment
      with Employer without cause.

     

    (e)           Employee’s
      employment with Employer shall terminate in the event of Employee’s death or
      disability. For purposes hereof, “disability” shall be defined
      as Employee’s inability by reason of illness or other physical or mental
      incapacity to perform the duties required by his employment for any consecutive
      one hundred eighty (180) day period, provided that notice of any termination
      by
      Employer because of Employee’s “disability” shall have been given to Employee
      prior to the full resumption by him of the performance of such
      duties.

     

    8.           In
      the event of termination of Employee’s employment with Employer pursuant to
      Section 7 hereof, compensation shall continue to be paid by Employer to
      Employee as follows:

     

    (a)           In
      the event of termination pursuant to Section 7(a) or Section 7(d),
      compensation provided for herein (including Base Compensation) shall continue
      to
      be paid, and Employee shall continue to participate in the employee benefit,
      retirement, and compensation plans and other perquisites as provided in
      Section 5 and Section 6 hereof, through the date of termination
      specified in the notice of termination. Any benefits payable under insurance,
      health, retirement and bonus plans as a result of Employee’s participation in
      such plans through such date shall be paid when due under those plans. The
      date
      of termination specified in any notice of termination pursuant to
      Section 7(a) shall be no later than the last business day of the month in
      which such notice is provided to Employee.

     

    (b)           In
      the event of termination pursuant to Section 7(b) or Section 7(c),
      compensation provided for herein (including Base Compensation) shall continue
      to
      be paid, and Employee shall continue to participate in the employee benefit,
      retirement, and compensation plans and other perquisites as provided in
      Section 5 and Section 6 hereof, through the date of termination
      specified in the notice of termination. Any benefits payable under insurance,
      health, retirement and bonus plans as a result of Employee’s participation in
      such plans through such date shall be paid when due under those plans. In
      addition, Employee shall be entitled to continue to receive from Employer his
      Base Compensation at the rates in effect at the time of termination for the
      remaining Term of

     

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    the
      Agreement, if the termination does not follow a Change in Control. In addition,
      during such periods, Employer will maintain in full force and effect for the
      continued benefit of Employee each employee welfare benefit plan and each
      employee pension benefit plan (as such terms are defined in the Employee
      Retirement Income Security Act of 1974, as amended) in which Employee was
      entitled to participate immediately prior to the date of his termination, unless
      an essentially equivalent and no less favorable benefit is provided by a
      subsequent employer of Employee. If the terms of any employee welfare benefit
      plan or employee pension benefit plan of Employer do not permit continued
      participation by Employee, Employer will arrange to provide to Employee a
      benefit substantially similar to, and no less favorable than, the benefit he
      was
      entitled to receive under such plan at the end of the period of
      coverage.  If the termination pursuant to Section 7(b) or Section 7(c)
      occurs within 12 months following a Change in Control, Employee shall be
      entitled to a lump sum payment paid by the Employer within 30 days following
      his
      termination of employment equal to three times his Base Compensation at the
      rate
      in effect at the time of his termination of employment. In addition, Employee
      shall be entitled to the continued payment to Employee through the date of
      termination of this Agreement of all compensation and benefits provided for
      in
      Sections 5 and 6.

     

    (c)           In
      the event of termination pursuant to Section 7(e), compensation provided for
      herein (including Base Compensation) shall continue to be paid, and Employee
      shall continue to participate in the employee benefit, retirement, and
      compensation plans and other perquisites as provided in Section 5 and
      Section 6 hereof, (i) in the event of Employee’s death, through the date of
      death, or (ii) in the event of Employee’s disability, through the date of proper
      notice of disability as required by Section 7(e). Any benefits payable under
      insurance, health, retirement and bonus plans as a result of Employer’s
      participation in such plans through such date shall be paid when due under
      those
      plans.

     

    (d)           Employer
      will permit Employee or his personal representative(s) or heirs, during a period
      of three months following Employee’s termination of employment by Employer for
      the reasons set forth in Section 7(b) or Section 7(c), if such termination
      follows a Change in Control, to require Employer, upon written request, to
      purchase all outstanding stock options previously granted to Employee under
      any
      Holding Company stock option plan then in effect whether or not such options
      are
      then exercisable at a cash purchase price equal to the amount by which the
      aggregate “fair market value” of the shares subject to such options exceeds the
      aggregate option price for such shares. For purposes of this Agreement, the
      term
“fair market value” shall mean the higher of (1) the average of
      the highest asked prices for Holding Company shares on the NASDAQ Global Market
      or other NASDAQ tier or market if the shares are traded on such tier or market
      for the thirty (30) business days preceding such termination, or (2) the average
      per share price actually paid for the most highly priced one percent (1%) of
      the
      Holding Company shares acquired in connection with the Change of Control of
      the
      Holding Company by any person or group acquiring such control.

     

    (e)           For
      purposes of this Agreement, a “Change of Control” shall mean any of the
      following:

     

    (i)
a
      change in the ownership of
      the Employer or the Holding Company, which shall occur on the date that any
      one
      person, or more than one person acting as a group, acquires ownership of stock
      of the Employer or the Holding Company

     

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

    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 Employer or the Holding Company.  Such acquisition may occur as
      a result of a merger of the Holding Company or the Employer into another entity
      which pays consideration for the shares of capital stock of the merging Holding
      Company or Employer or as a result of a merger of another entity into the
      Holding Company or the Employer if the entity’s shareholders as a group acquire
      or receive over 50% of the total fair market value or total voting power of
      the
      stock of the entity resulting from the merger.  However, if any one
      person, or more than one person acting as a group, is considered to own more
      than fifty percent (50%) of the total fair market value or total voting power
      of
      the stock of the Employer or the Holding Company, the acquisition of additional
      stock by the same person or persons is not considered to cause a change in
      the
      ownership of the Employer or the Holding Company (or to cause a change in the
      effective control of the Employer or the Holding Company (within the meaning
      of
      subsection (ii)).  An increase in the percentage of stock owned by any
      one person, or persons acting as a group, as a result of a transaction in which
      the Employer or the Holding Company acquires its stock in exchange for property
      will be treated as an acquisition of stock for purposes of this
      subsection.  This subsection applies only when there is a transfer of
      stock of the Employer or the Holding Company (or issuance of stock of the
      Employer or the Holding Company) and stock in the Employer or the Holding
      Company remains outstanding after the transaction.

     

    (ii)
a
      change in the effective
      control of the Employer or the Holding Company, which shall occur only on the
      date new directors are added to the Holding Company’s board of directors as a
      result of a merger transaction involving the Holding Company or the Employer,
      respectively, and as a result of such replacement the Holding Company’s
      directors or the Employer’s directors, respectively, before the merger
      constitute 50% or less of the total directors of the Holding Company or the
      Employer immediately following the merger; provided, however, that this
      provision shall not apply if another corporation is a majority shareholder
      of
      the Holding Company.  If any one person, or more than one person
      acting as a group, is considered to effectively control the Employer or the
      Holding Company, the acquisition of additional control of the Employer or the
      Holding Company by the same person or persons is not considered to cause a
      change in the effective control of the Employer or the Holding Company (or
      to
      cause a change in the ownership of the Employer or the Holding Company within
      the meaning of subsection (i) of this section).

     

    (iii)
a
      change in the ownership
      of a substantial portion of the Employer’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 Employer 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 Employer immediately
      before such acquisition or acquisitions.  For this purpose, gross fair
      market value means the value of the assets of the Employer, or the value of
      the
      assets being disposed of, determined without regard to any
      liabilities

     

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

    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 Employer immediately after the transfer.  A
      transfer of assets by the Employer is not treated as a change in the ownership
      of such assets if the assets are transferred to –

     

    1)           a
      shareholder of the Employer (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 Employer.

     

    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 Employer; 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 Employer or the Holding Company.

     

    (f)           To
      the extent the Employee is a “specified employee” (as defined below), payments
      due to the Employee under this Section 8 shall begin no sooner than six
      months after the Employee’s separation from service; provided, however, that any
      payments not made during the six month period described in this
      Section 8(f) shall be made in a single lump sum as soon as administratively
      practicable after the expiration of such six month period; provided, further,
      that the six month delay required under this Section 8(f) shall not apply
      to the portion of any payment resulting from the Employee’s “involuntary
      separation from service” (as defined in Treasury Reg. Section 1.409A-1(n)
      and including a “separation from service for good reason,” as defined in
      Treasury Reg. Section 1.409A-1(n)(2)) that (i) is payable no later than the
      last day of the second year following the year in which the separation from
      service occurs, and (ii) does not exceed two times the lesser of (1) the
      Employee’s annualized compensation for the year prior to the year in which the
      separation from service occurs, or (2) the dollar limit described in
      Section 401(a)(17) of the Code.

     

    To
      the
      extent any life, health, disability or other welfare benefit coverage provided
      to the Employee under this Section 8 would be taxable to the Employee, the
      taxable amount of such coverage shall not exceed the applicable dollar amount
      under Section 402(g)(1)(B) of the Code determined as of the year in which
      the Employee’s separation from service occurs.  The intent of the
      foregoing sentence is to permit the Holding Company and the

     

    
      
        
        

      

      
        Page
          7

        
          

        

      

      
        
        

      

    

    Employer
      to treat the provision of such benefits as a limited payment under Treasury
      Reg.
      Section 1.409A-1(a)(9)(v)(D) so as to avoid application of the six month
      delay rule for specified employees.  For purposes of this
      Section 8, any reference to severance of employment or termination of
      employment shall mean a “separation from service” as defined in Treasury Reg.
      Section 1.409A-1(h).

     

    For
      purposes of this Agreement, the term “specified employee” shall have the meaning
      set forth in Treasury Reg. Section 1.409A-1(i) and shall include, without
      limitation, (1) an officer of the Employer or the Holding Company having annual
      compensation greater than $130,000 (as adjusted for inflation under the Code),
      (2) a five percent owner of the Employer or the Holding Company, or (3) a one
      percent owner of the Employer or the Holding Company having annual compensation
      of more than $150,000.  The determination of whether the Employee is a
“specified employee” shall be made by the Employer in good faith applying the
      applicable Treasury regulations.

     

    9.           In
      order to induce Employer to enter into this Agreement, Employee hereby agrees
      as
      follows:

     

    (a)           While
      Employee is employed by Employer and for a period of three (3) years after
      termination of such employment for reasons other than those set forth in
      Section 7(b) or Section 7(c) of this Agreement, Employee shall not
      divulge or furnish any trade secrets (as defined in Ind. Code § 24-2-3-2)
      of Employer or any confidential information acquired by him while employed
      by
      Employer concerning the policies, plans, procedures or customers of Employer
      to
      any person, firm or corporation, other than Employer or upon its written
      request, or use any such trade secret or confidential information directly
      or
      indirectly for Employee’s own benefit or for the benefit of any person, firm or
      corporation other than Employer, since such trade secrets and confidential
      information are confidential and shall at all times remain the property of
      Employer.

     

    (b)           For
      a period of three (3) years after termination of Employee’s employment by
      Employer for reasons other than those set forth in Section 7(b) or
      Section 7(c) of this Agreement, Employee shall not directly or indirectly
      provide banking or bank-related services to or solicit the banking or
      bank-related business of any customer of Employer at the time of such provision
      of services or solicitation which Employee served either alone or with others
      while employed by Employer in any city, town, borough, township, village or
      other place in which Employee performed services for Employer while employed
      by
      it, or assist any actual or potential competitor of Employer to provide banking
      or bank-related services to or solicit any such customer’s banking or
      bank-related business in any such place.

     

    (c)           While
      Employee is employed by Employer and for a period of one (1) year after
      termination of Employee’s employment by Employer for reasons other than those
      set forth in Section 7(b) or Section 7(c) of this Agreement, Employee shall
      not, directly or indirectly, as principal, agent, or trustee, or through the
      agency of any corporation, partnership, trade association, agent or agency,
      engage in any banking or bank-related business which competes with the business
      of Employer as conducted during Employee’s employment by Employer within a
      radius of twenty-five (25) miles of Employer’s main office.

     

    
      
        
        

      

      
        Page
          8

        
          

        

      

      
        
        

      

    

    (d)           If
      Employee’s employment by Employer is terminated hereunder for any reason,
      Employee will turn over immediately thereafter to Employer all business
      correspondence, letters, papers, reports, customers’ lists, financial
      statements, credit reports or other confidential information or documents of
      Employer or its affiliates in the possession or control of Employee, all of
      which writings are and will continue to be the sole and exclusive property
      of
      Employer or its affiliates.

     

    If
      Employee’s employment by Employer is terminated during the Term of this
      Agreement for reasons set forth in Section 7(b) or Section 7(c) of this
      Agreement, Employee shall have no obligations to Employer with respect to
      noncompetition under this Section 9.

     

    10.           Any
      termination of Employee’s employment with Employer as contemplated by
      Section 7 hereof, except in the circumstances of Employee’s death, shall be
      communicated by written “Notice of Termination” by the terminating party to the
      other party hereto. Any “Notice of Termination” pursuant to Section 7(a),
      Section 7(c) or Section 7(e) shall indicate the specific provisions of this
      Agreement relied upon and shall set forth in reasonable detail the facts and
      circumstances claimed to provide a basis for such termination.

     

    11.           If
      Employee is suspended and/or temporarily prohibited from participating in the
      conduct of Employer’s affairs by a notice served under Section 8(e)(3) or (g)(1)
      of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) or (g)(1)),
      Employer’s obligations under this Agreement shall be suspended as of the date of
      service, unless stayed by appropriate proceedings. If the charges in the notice
      are dismissed, Employer shall (i) pay Employee all or part of the compensation
      withheld while its obligations under this Agreement were suspended and (ii)
      reinstate (in whole or in part) any of its obligations which were
      suspended.

     

    12.           If
      Employee is removed and/or permanently prohibited from participating in the
      conduct of Employer’s affairs by an order issued under Section 8(e)(4) or (g)(1)
      of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)),
      all obligations of Employer under this Agreement shall terminate as of the
      effective date of the order, but vested rights of the parties to the Agreement
      shall not be affected.

     

    13.           If
      Employer is in default (as defined in Section 3(x)(1) of the Federal Deposit
      Insurance Act), all obligations under this Agreement shall terminate as of
      the
      date of default, but this provision shall not affect any vested rights of
      Employer or Employee.

     

    14.           All
      obligations under this Agreement shall be terminated except to the extent
      determined that the continuation of the Agreement is necessary for the continued
      operation of Employer: (i) by the Director of the Indiana Department of
      Financial Institutions or his or her designee (the “Director”),
      at the time the Federal Deposit Insurance Corporation enters into an agreement
      to provide assistance to or on behalf of Employer under the authority contained
      in Section 13(c) of the Federal Deposit Insurance Act; or (ii) by the Director
      at the time the Director approves  a supervisory merger to resolve
      problems related to operation of Employer or when Employer is determined by
      the
      Director to be in an unsafe and unsound condition. Any rights of the parties
      that have already vested, however, shall not be affected by such
      action.

     

    15.           Anything
      in this Agreement to the contrary notwithstanding, in the event that Employer’s
      independent public accountants determine that any payment by Employer to or
      for
      the benefit of Employee, whether paid or payable pursuant to the terms of this
      Agreement, would be non-deductible by Employer for federal income tax purposes
      because of Section 280G of the

     

    
      
        
        

      

      
        Page
          9

        
          

        

      

      
        
        

      

    

    Internal
      Revenue Code of 1986, as amended (the “Code”), then the amount
      payable to or for the benefit of Employee pursuant to this Agreement shall
      be
      reduced (but not below zero) to the Reduced Amount. For purposes of this Section
      15, the “Reduced Amount” shall be the amount which maximizes
      the amount payable without causing the payment to be non-deductible by Employer
      because of Section 280G of the Code. Any payments made to Employee pursuant
      to
      this Agreement or otherwise, are subject to and conditional upon their
      compliance with 12 U.S.C. §1828(k) and any regulations promulgated thereunder,
      to the extent applicable to such parties.

     

    16.           If
      a dispute arises regarding the termination of Employee pursuant to
      Section 7 hereof or as to the interpretation or enforcement of this
      Agreement and Employee obtains a final judgment in his favor in a court of
      competent jurisdiction or his claim is settled by Employer prior to the
      rendering of a judgment by such a court, all reasonable legal fees and expenses
      incurred by Employee in contesting or disputing any such termination or seeking
      to obtain or enforce any right or benefit provided for in this Agreement or
      otherwise pursuing his claim shall be paid by Employer, to the extent permitted
      by law.

     

    17.           Should
      Employee die after termination of his employment with Employer while any amounts
      are payable to him hereunder, this Agreement shall inure to the benefit of
      and
      be enforceable by Employee’s executors, administrators, heirs, distributees,
      devisees and legatees and all amounts payable hereunder shall be paid in
      accordance with the terms of this Agreement to Employee’s devisee, legatee or
      other designee or, if there is no such designee, to his estate.

     

    18.           For
      purposes of this Agreement, notices and all other communications provided for
      herein shall be in writing and shall be deemed to have been given when delivered
      or mailed by United States registered or certified mail, return receipt
      requested, postage prepaid, addressed as follows:

     

    
      	 	
              If
                to Employee:

            	
              John
                M. Baer

              7609
                Meadow Violet Drive

              Avon,
                Indiana  46168

               

            
	 	
              If
                to Employer:

            	
              Lincoln
                Bank

              905
                Southfield Drive

              P.O.
                Box 510

              Plainfield,
                Indiana  46168-0510

            

    

     

    or
      to
      such address as either party hereto may have furnished to the other party in
      writing in accordance herewith, except that notices of change of address shall
      be effective only upon receipt.

     

    19.           The
      validity, interpretation, and performance of this Agreement shall be governed
      by
      the laws of the State of Indiana, except as otherwise required by mandatory
      operation of federal law.

     

    20.           Employer
      shall require any successor (whether direct or indirect, by purchase, merger,
      consolidation or otherwise) to all or substantially all of the business or
      assets of Employer, by agreement in form and substance satisfactory to Employee
      to expressly assume and agree to perform this Agreement in the same manner
      and
      same extent that Employer would be required to perform it if no such succession
      had taken place. Failure of Employer to obtain

     

    
      
        
        

      

      
        Page
          10

        
          

        

      

      
        
        

      

    

    such
      agreement prior to the effectiveness of any such succession shall be a material
      intentional breach of this Agreement and shall entitle Employee to terminate
      his
      employment with Employer pursuant to Section 7(c) hereof. As used in this
      Agreement, “Employer” shall mean Employer as hereinbefore
      defined and any successor to its business or assets as aforesaid.

     

    21.           No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing signed by Employee
      and
      Employer. No waiver by either party hereto at any time of any breach by the
      other party hereto of, or compliance with, any condition or provision of this
      Agreement to be performed by such other party shall be deemed a waiver of
      dissimilar provisions or conditions at the same or any prior subsequent time.
      No
      agreements or representation, oral or otherwise, express or implied, with
      respect to the subject matter hereof have been made by either party which are
      not set forth expressly in this Agreement.

     

    22.           The
      invalidity or unenforceability of any provisions of this Agreement shall not
      affect the validity or enforceability of any other provisions of this Agreement
      which shall remain in full force and effect.

     

    23.           This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which together shall constitute one and the same
      agreement.

     

    24.           This
      Agreement is personal in nature and neither party hereto shall, without consent
      of the other, assign or transfer  this Agreement or any rights or
      obligations hereunder except as provided in Section 17 and Section 20
      above. Without limiting the foregoing, Employee’s right to receive compensation
      hereunder shall not be assignable or transferable, whether by pledge, creation
      of a security interest or otherwise, other than a transfer by his will or by
      the
      laws of descent or distribution as set forth in Section 17 hereof, and in
      the event of any attempted assignment or transfer contrary to this paragraph,
      Employer shall have no liability to pay any amounts so attempted to be assigned
      or transferred.

     

    [Remainder
      of this page is intentionally left blank.]

    
      
        
        

      

      
        Page
          11

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof, the parties have caused this Amended and Restated Employment
      Agreement to be executed and delivered as of the day and year first above set
      forth.

     

    
      	 	
              “Employer”

            
	 	 	 
	 	
              Lincoln
                Bank

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Jerry R. Engle

            
	 	 	
              Jerry
                R. Engle, President and Chief Executive Officer

            
	 	 	 
	 	 	 
	 	
              “Employee”

            
	 	 	 
	 	 	 
	 	
              /s/
                John M. Baer

            
	 	
              John
                M. Baer

            

    

    

     

    

     

     

    The
      undersigned, Lincoln Bancorp, sole shareholder of Employer, agrees that if
      it
      shall be determined for any reason that any obligations on the part of Employer
      to continue to make any payments due under this Agreement to Employee is
      unenforceable for any reason, Lincoln Bancorp, agrees to honor the terms of
      this
      Agreement and continue to make any such payments due hereunder to Employee
      pursuant to the terms of this Agreement.

     

    
      	 	
              Lincoln
                Bancorp

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Jerry R. Engle

            
	 	 	
              Jerry
                R. Engle, President and Chief Executive
                Officer

            

    

     

    

     

    Page
      12lin_8k0907ex105.htm

    Exhibit
      10.5

     

    

     

    AMENDED
      AND RESTATED EMPLOYMENT AGREEMENT

     

    This
      Amended And Restated Employment Agreement (the “Agreement”),
      made and dated as of October 1, 2007, by and between Lincoln Bank, an Indiana
      commercial bank (“Employer”), and Bryan Mills, a resident of
      Johnson County, Indiana (“Employee”), but effective as of
      January 11, 2006.

     

    This
      Agreement amends and restates the prior Employment Agreement between the
      Employer and the Employee dated January 1, 2007 (the “Employment
      Agreement”). It has been amended and restated for compliance with the
      final regulations under Section 409A of the Internal Revenue Code of 1986,
      as
      amended, effective as of January 11, 2006.

     

     

    W
      I T N E S S E T H

     

    Whereas,
      Employee is employed by Employer as a Senior Vice President and has made
      valuable contributions to the profitability and financial strength of
      Employer;

     

    Whereas,
      Employer and Employee entered into an Employment Agreement dated as of January
      1, 2007, which Employer and Employee now desire to amend and restate in its
      entirety as provided herein;

     

    Whereas,
      Employer desires to encourage Employee to continue to make valuable
      contributions to Employer’s business operations and not to seek or accept
      employment elsewhere;

     

    Whereas,
      Employee desires to be assured of a secure minimum compensation from Employer
      for his services over a defined term;

     

    Whereas,
      Employer desires to assure the continued services of Employee on behalf of
      Employer on an objective and impartial basis and without distraction or conflict
      of interest in the event of an attempt by any person to obtain control of
      Employer or Lincoln Bancorp (the “Holding Company”), the
      Indiana corporation which owns all of the issued and outstanding capital stock
      of Employer;

     

    Whereas,
      Employer recognizes that when faced with a proposal for a change of control
      of
      Employer or the Holding Company, Employee will have a significant role in
      helping the Boards of Directors assess the options and advising the Boards
      of
      Directors on what is in the best interests of Employer, the Holding Company,
      and
      its shareholders, and it is necessary for Employee to be able to provide this
      advice and counsel without being influenced by the uncertainties of his own
      situation;

     

    Whereas,
      Employer desires to provide fair and reasonable benefits to Employee on the
      terms and subject to the conditions set forth in this Agreement;

     

    Whereas,
      Employer desires reasonable protection of its confidential business and customer
      information which it has developed over the years at substantial expense and
      assurance that Employee will not compete with Employer for a reasonable period
      of time after termination of his employment with Employer, except as otherwise
      provided herein.

     

    Now,
      Therefore, in consideration of these premises, the mutual covenants and
      undertakings herein contained and the continued employment of Employee by
      Employer as a Senior Vice President, Employer and Employee, each intending
      to be
      legally bound, covenant and agree as follows:

     

    
      
        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

    1.           Upon
      the terms and subject to the conditions set forth in this Agreement, Employer
      employs Employee as one of Employer’s Senior Vice Presidents, and Employee
      accepts such employment.

     

    2.           Employee
      agrees to serve as one of Employer’s Senior Vice Presidents and to perform such
      duties in that office as may reasonably be assigned to him by Employer’s Board
      of Directors; provided, however, that such duties shall be
      performed in or from the offices of Employer currently located at 905 Southfield
      Drive, Plainfield, Indiana, and shall be of the same character as those
      previously performed by Employee and generally associated with the office held
      by Employee. Employee shall not be required to be absent from the location
      of
      the principal executive offices of Employer on travel status or otherwise more
      than forty-five (45) days in any calendar year. Employer shall not, without
      the
      written consent of Employee, relocate or transfer Employee to a location more
      than thirty (30) miles from Employer’s primary office. Employee shall render
      services to Employer as a Senior Vice President in substantially the same manner
      and to substantially the same extent as Employee rendered his services to
      Employer before the date hereof. While employed by Employer, Employee shall
      devote substantially all his business time and efforts to Employer’s business
      during regular business hours and shall not engage in any other related
      business.

     

    3.           The
      term of this Agreement shall begin on January 11, 2006 (the “Effective
      Date”) and shall end on January 1, 2009; provided,
however, that such term shall be extended automatically
      for an
      additional year on each anniversary of January 1, 2007 if Employer’s Board of
      Directors determines by resolution with respect to each such annual extension
      that the performance of Employee has met the Board’s requirements and standards
      and that this Agreement should be extended for another year. Notwithstanding
      the
      foregoing, if either party hereto gives written notice to the other party not
      to
      so extend within ninety (90) days prior to such anniversary, or if Employer’s
      Board of Directors does not adopt the resolution authorizing annual extension
      of
      the contract with respect to any annual period during the term of this
      Agreement, no further automatic extension shall occur and the term of this
      Agreement shall end one year subsequent to the anniversary as of which the
      notice not to extend or failure to extend for an additional year occurs (such
      term, including any extension thereof shall herein be referred to as the
“Term”). Notwithstanding the foregoing, the Term may end
      earlier upon the occurrence of any event described in Section 7.

     

    4.           Employee
      shall receive an annual salary of $110,000 (“Base
      Compensation”) payable at regular intervals in accordance with
      Employer’s normal payroll practices now or hereafter in effect. Employer may
      consider and declare from time to time increases in the salary it pays Employee
      and thereby increases in his Base Compensation. Prior to a Change in Control,
      Employer may also declare decreases in the salary it pays Employee if the
      operating results of Employer are significantly less favorable than those for
      the fiscal year ending December 31, 2005, and Employer makes similar decreases
      in the salary it pays to other executive officers of Employer. After a Change
      in
      Control, Employer shall consider and declare salary increases based upon the
      following standards:

     

    (a)           Inflation;

     

    (b)           Adjustments
      to the salaries of other senior management personnel; and

     

    (c)           Past
      performance of Employee and the contribution which Employee makes to the
      business and profits of Employer during the Term.

     

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

    Any
      and
      all increases or decreases in Employee’s salary pursuant to this section shall
      cause the level of Base Compensation to be increased or decreased by the amount
      of each such increase or decrease for purposes of this Agreement. The increased
      or decreased level of Base Compensation as provided in this section shall become
      the level of Base Compensation for the remainder of the Term of this Agreement
      until there is a further increase or decrease in Base Compensation as provided
      herein.

     

    5.           So
      long as Employee is employed by Employer pursuant to this Agreement, he shall
      be
      included as a participant in all present and future employee benefit,
      retirement, and compensation plans generally available to employees of Employer,
      consistent with his Base Compensation and his position as a Senior Vice
      President of Employer, including, without limitation, Employer’s or the
      Holding  Company’s 401(k) plan, Stock Option Plan, Recognition and
      Retention Plan and Trust, Employee Stock Ownership Plan, and hospitalization,
      disability and group life insurance plans, each of which Employer agrees to
      continue in effect on terms no less favorable than those currently in effect
      as
      of the date hereof (as permitted by law) during the Term of this Agreement
      unless prior to a Change in Control the operating results of Employer are
      significantly less favorable than those for the fiscal year ending December
      31,
      2005, and unless (either before or after a Change in Control) changes in the
      accounting, legal, or tax treatment of such plans would adversely affect
      Employer’s operating results or financial condition in a material way, and the
      Board of Directors of Employer or the Holding Company concludes that
      modifications to such plans need to be made to avoid such adverse
      effects.

     

    6.           So
      long as Employee is employed by Employer pursuant to this Agreement, Employee
      shall receive reimbursement from Employer for all reasonable business expenses
      incurred in the course of his employment by Employer, upon submission to
      Employer of written vouchers and statements for reimbursement. So long as
      Employee is employed by Employer pursuant to the terms of this Agreement,
      Employer shall continue in effect vacation policies applicable to Employee
      no
      less favorable from his point of view than those written vacation policies
      in
      effect on the date hereof. So long as Employee is employed by Employer pursuant
      to this Agreement, Employee shall be entitled to office space and working
      conditions no less favorable than were in effect for him on the date
      hereof.

     

    7.           Subject
      to the respective continuing obligations of the parties, including but not
      limited to those set forth in Section 9(a), Section 9(b), Section 9(c) and
      Section 9(d) hereof, Employee’s employment by Employer may be terminated prior
      to the expiration of the Term of this Agreement as follows:

     

    (a)           Employer,
      by action of its Board of Directors and upon written notice to Employee, may
      terminate Employee’s employment with Employer immediately for cause. For
      purposes of this Section 7(a), “cause” shall be defined as (i)
      personal dishonesty, (ii) incompetence, (iii) willful misconduct, (iv) breach
      of
      fiduciary duty involving personal profit, (v) intentional failure to perform
      stated duties, (vi) willful violation of any law, rule, or regulation (other
      than traffic violations or similar offenses) or final cease-and-desist order,
      or
      (vii) any material breach of any provision of this Agreement.

     

    (b)           Employer,
      by action of its Board of Directors may terminate Employee’s employment with
      Employer without cause at any time; provided, however, that
      the “date of termination” for purposes of determining benefits
      payable to Employee under Section

     

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

    8(b)
      hereof shall be the date which is sixty (60) days after Employee receives
      written notice of such termination.

     

    (c)           Employee,
      by written notice to Employer, may terminate his employment with Employer
      immediately for cause. For purposes of this Section 7(c),
“cause” shall be defined as (i) any action by Employer’s Board
      of Directors to remove Employee as a Senior Vice President of Employer, except
      for promotions, if any, and except where Employer’s Board of Directors properly
      acts to remove Employee from such office for “cause” as defined in Section 7(a)
      hereof, (ii) any action by Employer’s Board of Directors to materially limit,
      increase, or modify Employee’s duties and/or authority as a Senior Vice
      President, except for changes commensurate with promotions, if any, of Employer,
      (iii) any failure of Employer to obtain the assumption of the obligation to
      perform this Agreement by any successor or the reaffirmation of such obligation
      by Employer, as contemplated in Section 20 hereof; or (iv) any material breach
      by Employer of a term, condition or covenant of this Agreement.

     

    (d)           Employee,
      upon sixty (60) days’ written notice to Employer, may terminate his employment
      with Employer without cause.

     

    (e)           Employee’s
      employment with Employer shall terminate in the event of Employee’s death or
      disability. For purposes hereof, “disability” shall be defined
      as Employee’s inability by reason of illness or other physical or mental
      incapacity to perform the duties required by his employment for any consecutive
      one hundred eighty (180) day period, provided that notice of any termination
      by
      Employer because of Employee’s “disability” shall have been given to Employee
      prior to the full resumption by him of the performance of such
      duties.

     

    8.           In
      the event of termination of Employee’s employment with Employer pursuant to
      Section 7 hereof, compensation shall continue to be paid by Employer to Employee
      as follows:

     

    (a)           In
      the event of termination pursuant to Section 7(a) or Section 7(d), compensation
      provided for herein (including Base Compensation) shall continue to be paid,
      and
      Employee shall continue to participate in the employee benefit, retirement,
      and
      compensation plans and other perquisites as provided in Section 5 and Section
      6
      hereof, through the date of termination specified in the notice of termination.
      Any benefits payable under insurance, health, retirement and bonus plans as
      a
      result of Employee’s participation in such plans through such date shall be paid
      when due under those plans. The date of termination specified in any notice
      of
      termination pursuant to Section 7(a) shall be no later than the last business
      day of the month in which such notice is provided to Employee.

     

    (b)           In
      the event of termination pursuant to Section 7(b) or Section 7(c), compensation
      provided for herein (including Base Compensation) shall continue to be paid,
      and
      Employee shall continue to participate in the employee benefit, retirement,
      and
      compensation plans and other perquisites as provided in Section 5 and Section
      6
      hereof, through the date of termination specified in the notice of termination.
      Any benefits payable under insurance, health, retirement and bonus plans as
      a
      result of Employee’s participation in such plans through such date shall be paid
      when due under those plans. In addition, Employee shall be entitled to continue
      to receive from Employer his Base Compensation at the rates in effect at the
      time of termination for the remaining Term of the Agreement, if the termination
      does not follow a Change in Control. In addition,

     

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    during
      such periods, Employer will maintain in full force and effect for the continued
      benefit of Employee each employee welfare benefit plan and each employee pension
      benefit plan (as such terms are defined in the Employee Retirement Income
      Security Act of 1974, as amended) in which Employee was entitled to participate
      immediately prior to the date of his termination, unless an essentially
      equivalent and no less favorable benefit is provided by a subsequent employer
      of
      Employee. If the terms of any employee welfare benefit plan or employee pension
      benefit plan of Employer do not permit continued participation by Employee,
      Employer will arrange to provide to Employee a benefit substantially similar
      to,
      and no less favorable than, the benefit he was entitled to receive under such
      plan at the end of the period of coverage.  If the termination
      pursuant to Section 7(b) or Section 7(c) occurs within 12 months following
      a
      Change in Control, Employee shall be entitled to a lump sum payment paid by
      the
      Employer within 30 days following his termination of employment equal to three
      times his Base Compensation at the rate in effect at the time of his termination
      of employment. In addition, Employee shall be entitled to the continued payment
      to Employee through the date of termination of this Agreement of all
      compensation and benefits provided for in Sections 5 and 6.

     

    (c)           In
      the event of termination pursuant to Section 7(e), compensation provided for
      herein (including Base Compensation) shall continue to be paid, and Employee
      shall continue to participate in the employee benefit, retirement, and
      compensation plans and other perquisites as provided in Section 5 and Section
      6
      hereof, (i) in the event of Employee’s death, through the date of death, or (ii)
      in the event of Employee’s disability, through the date of proper notice of
      disability as required by Section 7(e). Any benefits payable under insurance,
      health, retirement and bonus plans as a result of Employer’s participation in
      such plans through such date shall be paid when due under those
      plans.

     

    (d)           Employer
      will permit Employee or his personal representative(s) or heirs, during a period
      of three months following Employee’s termination of employment by Employer for
      the reasons set forth in Section 7(b) or Section 7(c), if such termination
      follows a Change in Control, to require Employer, upon written request, to
      purchase all outstanding stock options previously granted to Employee under
      any
      Holding Company stock option plan then in effect whether or not such options
      are
      then exercisable at a cash purchase price equal to the amount by which the
      aggregate “fair market value” of the shares subject to such options exceeds the
      aggregate option price for such shares. For purposes of this Agreement, the
      term
“fair market value” shall mean the higher of (1) the average of
      the highest asked prices for Holding Company shares on the NASDAQ Global Market
      or other NASDAQ tier or market if the shares are traded on such tier or market
      for the thirty (30) business days preceding such termination, or (2) the average
      per share price actually paid for the most highly priced one percent (1%) of
      the
      Holding Company shares acquired in connection with the Change in Control of
      the
      Holding Company by any person or group acquiring such control.

     

    (e)           For
      purposes of this Agreement, a “Change in Control” shall mean any of the
      following:

     

    (i)
a
      change in the ownership of
      the Employer or the Holding Company, which shall occur on the date that any
      one
      person, or more than one person acting as a group, acquires ownership of stock
      of the Employer or the Holding Company that, together with stock held by such
      person or group, constitutes more than fifty percent (50%) of the total fair
      market value or total voting power of the stock of

     

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

    the
      Employer or the Holding Company.  Such acquisition may occur as a
      result of a merger of the Holding Company or the Employer into another entity
      which pays consideration for the shares of capital stock of the merging Holding
      Company or Employer or as a result of a merger of another entity into the
      Holding Company or the Employer if the entity’s shareholders as a group acquire
      or receive over 50% of the total fair market value or total voting power of
      the
      stock of the entity resulting from the merger.  However, if any one
      person, or more than one person acting as a group, is considered to own more
      than fifty percent (50%) of the total fair market value or total voting power
      of
      the stock of the Employer or the Holding Company, the acquisition of additional
      stock by the same person or persons is not considered to cause a change in
      the
      ownership of the Employer or the Holding Company (or to cause a change in the
      effective control of the Employer or the Holding Company (within the meaning
      of
      subsection (ii)).  An increase in the percentage of stock owned by any
      one person, or persons acting as a group, as a result of a transaction in which
      the Employer or the Holding Company acquires its stock in exchange for property
      will be treated as an acquisition of stock for purposes of this
      subsection.  This subsection applies only when there is a transfer of
      stock of the Employer or the Holding Company (or issuance of stock of the
      Employer or the Holding Company) and stock in the Employer or the Holding
      Company remains outstanding after the transaction.

     

    (ii)
a
      change in the effective
      control of the Employer or the Holding Company, which shall occur only on the
      date new directors are added to the Holding Company’s board of directors as a
      result of a merger transaction involving the Holding Company or the Employer,
      respectively, and as a result of such replacement the Holding Company’s
      directors or the Employer’s directors, respectively, before the merger
      constitute 50% or less of the total directors of the Holding Company or the
      Employer immediately following the merger; provided, however, that this
      provision shall not apply if another corporation is a majority shareholder
      of
      the Holding Company.  If any one person, or more than one person
      acting as a group, is considered to effectively control the Employer or the
      Holding Company, the acquisition of additional control of the Employer or the
      Holding Company by the same person or persons is not considered to cause a
      change in the effective control of the Employer or the Holding Company (or
      to
      cause a change in the ownership of the Employer or the Holding Company within
      the meaning of subsection (i) of this section).

     

    (iii)
a
      change in the ownership
      of a substantial portion of the Employer’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 Employer 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 Employer immediately
      before such acquisition or acquisitions.  For this purpose, gross fair
      market value means the value of the assets of the Employer, 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

     

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

    the
      Employer immediately after the transfer.  A transfer of assets by the
      Employer is not treated as a change in the ownership of such assets if the
      assets are transferred to –

     

    1)           a
      shareholder of the Employer (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 Employer.

     

    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 Employer; 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 Employer or the Holding Company.

     

    (f)           To
      the extent the Employee is a “specified employee” (as defined below), payments
      due to the Employee under this Section 8 shall begin no sooner than six
      months after the Employee’s separation from service; provided, however, that any
      payments not made during the six month period described in this
      Section 8(f) shall be made in a single lump sum as soon as administratively
      practicable after the expiration of such six month period; provided, further,
      that the six month delay required under this Section 8(f) shall not apply
      to the portion of any payment resulting from the Employee’s “involuntary
      separation from service” (as defined in Treasury Reg. Section 1.409A-1(n)
      and including a “separation from service for good reason,” as defined in
      Treasury Reg. Section 1.409A-1(n)(2)) that (i) is payable no later than the
      last day of the second year following the year in which the separation from
      service occurs, and (ii) does not exceed two times the lesser of (1) the
      Employee’s annualized compensation for the year prior to the year in which the
      separation from service occurs, or (2) the dollar limit described in
      Section 401(a)(17) of the Code.

     

    To
      the
      extent any life, health, disability or other welfare benefit coverage provided
      to the Employee under this Section 8 would be taxable to the Employee, the
      taxable amount of such coverage shall not exceed the applicable dollar amount
      under Section 402(g)(1)(B) of the Code determined as of the year in which
      the Employee’s separation from service occurs.  The intent of the
      foregoing sentence is to permit the Holding Company and the Employer to treat
      the provision of such benefits as a limited payment under Treasury Reg.
      Section 1.409A-1(a)(9)(v)(D) so as to avoid application of the six month
      delay rule

     

    
      
        
        

      

      
        Page
          7

        
          

        

      

      
        
        

      

    

    for
      specified employees.  For purposes of this Section 8, any
      reference to severance of employment or termination of employment shall mean
      a
“separation from service” as defined in Treasury Reg.
      Section 1.409A-1(h).

     

    For
      purposes of this Agreement, the term “specified employee” shall have the meaning
      set forth in Treasury Reg. Section 1.409A-1(i) and shall include, without
      limitation, (1) an officer of the Employer or the Holding Company having annual
      compensation greater than $130,000 (as adjusted for inflation under the Code),
      (2) a five percent owner of the Employer or the Holding Company, or (3) a one
      percent owner of the Employer or the Holding Company having annual compensation
      of more than $150,000.  The determination of whether the Employee is a
“specified employee” shall be made by the Employer in good faith applying the
      applicable Treasury regulations.

     

    9.           In
      order to induce Employer to enter into this Agreement, Employee hereby agrees
      as
      follows:

     

    (a)           While
      Employee is employed by Employer and for a period of three (3) years after
      termination of such employment, Employee shall not divulge or furnish any trade
      secrets (as defined in Ind. Code § 24-2-3-2) of Employer or any
      confidential information acquired by him while employed by Employer concerning
      the policies, plans, procedures or customers of Employer to any person, firm
      or
      corporation, other than Employer or upon its written request, or use any such
      trade secret or confidential information directly or indirectly for Employee’s
      own benefit or for the benefit of any person, firm or corporation other than
      Employer, since such trade secrets and confidential information are confidential
      and shall at all times remain the property of Employer.

     

    (b)           For
      a period of two (2) years after termination of Employee’s employment by Employer
      for reasons other than those set forth in Section 7(b) or Section 7(c) of this
      Agreement, Employee shall not directly or indirectly provide banking or
      bank-related services to or solicit the banking or bank-related business of
      any
      customer of Employer at the time of such provision of services or solicitation
      which Employee served either alone or with others while employed by Employer
      in
      any city, town, borough, township, village or other place in which Employee
      performed services for Employer while employed by it, or assist any actual
      or
      potential competitor of Employer to provide banking or bank-related services
      to
      or solicit any such customer’s banking or bank-related business in any such
      place.

     

    (c)           While
      Employee is employed by Employer and for a period of one (1) year after
      termination of Employee’s employment by Employer for reasons other than those
      set forth in Section 7(b) or Section 7(c) of this Agreement, Employee shall
      not,
      directly or indirectly, as principal, agent, or trustee, or through the agency
      of any corporation, partnership, trade association, agent or agency, engage
      in
      any banking or bank-related business which competes with the business of
      Employer as conducted during Employee’s employment by Employer within a radius
      of twenty-five (25) miles of Employer’s main office or within a twenty-five (25)
      mile radius of Employer’s Greenwood office.

     

    (d)           If
      Employee’s employment by Employer is terminated hereunder for any reason,
      Employee will turn over immediately thereafter to Employer all business
      correspondence, letters, papers, reports, customers’ lists, financial
      statements, credit reports or other confidential information or documents of
      Employer or its affiliates in the

     

    
      
        
        

      

      
        Page
          8

        
          

        

      

      
        
        

      

    

    possession
      or control of Employee, all of which writings are and will continue to be the
      sole and exclusive property of Employer or its affiliates.

     

    If
      Employee’s employment by Employer is terminated during the Term of this
      Agreement for reasons set forth in Section 7(b) or Section 7(c) of this
      Agreement, Employee shall have no obligations to Employer with respect to the
      noncompetition provisions under this Section 9.

     

    10.           Any
      termination of Employee’s employment with Employer as contemplated by Section 7
      hereof, except in the circumstances of Employee’s death, shall be communicated
      by written “Notice of Termination” by the terminating party to the other party
      hereto. Any “Notice of Termination” pursuant to Section 7(a), Section 7(c) or
      Section 7(e) shall indicate the specific provisions of this Agreement relied
      upon and shall set forth in reasonable detail the facts and circumstances
      claimed to provide a basis for such termination.

     

    11.           If
      Employee is suspended and/or temporarily prohibited from participating in the
      conduct of Employer’s affairs by a notice served under Section 8(e)(3) or (g)(1)
      of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(3) or (g)(1)),
      Employer’s obligations under this Agreement shall be suspended as of the date of
      service, unless stayed by appropriate proceedings. If the charges in the notice
      are dismissed, Employer shall (i) pay Employee all or part of the compensation
      withheld while its obligations under this Agreement were suspended and (ii)
      reinstate (in whole or in part) any of its obligations which were
      suspended.

     

    12.           If
      Employee is removed and/or permanently prohibited from participating in the
      conduct of Employer’s affairs by an order issued under Section 8(e)(4) or (g)(1)
      of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e)(4) or (g)(1)),
      all obligations of Employer under this Agreement shall terminate as of the
      effective date of the order, but vested rights of the parties to the Agreement
      shall not be affected.

     

    13.           If
      Employer is in default (as defined in Section 3(x)(1) of the Federal Deposit
      Insurance Act), all obligations under this Agreement shall terminate as of
      the
      date of default, but this provision shall not affect any vested rights of
      Employer or Employee.

     

    14.           All
      obligations under this Agreement shall be terminated except to the extent
      determined that the continuation of the Agreement is necessary for the continued
      operation of Employer: (i) by the Director of the Indiana Department of
      Financial Institutions or his or her designee (the “Director”),
      at the time the Federal Deposit Insurance Corporation enters into an agreement
      to provide assistance to or on behalf of Employer under the authority contained
      in Section 13(c) of the Federal Deposit Insurance Act; or (ii) by the Director
      at the time the Director approves  a supervisory merger to resolve
      problems related to operation of Employer or when Employer is determined by
      the
      Director to be in an unsafe and unsound condition. Any rights of the parties
      that have already vested, however, shall not be affected by such
      action.

     

    15.           Anything
      in this Agreement to the contrary notwithstanding, in the event that Employer’s
      independent public accountants determine that any payment by Employer to or
      for
      the benefit of Employee, whether paid or payable pursuant to the terms of this
      Agreement, would be non-deductible by Employer for federal income tax purposes
      because of Section 280G of the Internal Revenue Code of 1986, as amended (the
      “Code”), then the amount payable to or for the benefit of
      Employee pursuant to this Agreement shall be reduced (but not below zero) to
      the
      Reduced Amount. For purposes of this Section 15, the “Reduced
      Amount” shall be the amount which maximizes the amount payable without
      causing the payment to be non-deductible by Employer because of Section 280G
      of
      the Code. Any payments made to Employee pursuant to

     

    
      
        
        

      

      
        Page
          9

        
          

        

      

      
        
        

      

    

    this
      Agreement or otherwise, are subject to and conditional upon their compliance
      with 12 U.S.C. §1828(k) and FDIC regulation 12 C.F.R. Part 359 (Golden Parachute
      and Indemnification Payments) and any other regulations promulgated thereunder,
      to the extent applicable to such parties.

     

    16.           If
      a dispute arises regarding the termination of Employee pursuant to Section
      7
      hereof or as to the interpretation or enforcement of this Agreement and Employee
      obtains a final judgment in his favor in a court of competent jurisdiction
      or
      his claim is settled by Employer prior to the rendering of a judgment by such
      a
      court, all reasonable legal fees and expenses incurred by Employee in contesting
      or disputing any such termination or seeking to obtain or enforce any right
      or
      benefit provided for in this Agreement or otherwise pursuing his claim shall
      be
      paid by Employer, to the extent permitted by law.

     

    17.           Should
      Employee die after termination of his employment with Employer while any amounts
      are payable to him hereunder, this Agreement shall inure to the benefit of
      and
      be enforceable by Employee’s executors, administrators, heirs, distributees,
      devisees and legatees and all amounts payable hereunder shall be paid in
      accordance with the terms of this Agreement to Employee’s devisee, legatee or
      other designee or, if there is no such designee, to his estate.

     

    18.           For
      purposes of this Agreement, notices and all other communications provided for
      herein shall be in writing and shall be deemed to have been given when delivered
      or mailed by United States registered or certified mail, return receipt
      requested, postage prepaid, addressed as follows:

     

    
      	 	
              If
                to Employee:

            	
              Bryan
                Mills

              ___________________

              ___________________

               

            
	 	
              If
                to Employer:

            	
              Lincoln
                Bank

              905
                Southfield Drive

              P.O.
                Box 510

              Plainfield,
                Indiana   46168-0510

            

    

     

    or
      to
      such address as either party hereto may have furnished to the other party in
      writing in accordance herewith, except that notices of change of address shall
      be effective only upon receipt.

     

    19.           The
      validity, interpretation, and performance of this Agreement shall be governed
      by
      the laws of the State of Indiana, except as otherwise required by mandatory
      operation of federal law.

     

    20.           Employer
      shall require any successor (whether direct or indirect, by purchase, merger,
      consolidation or otherwise) to all or substantially all of the business or
      assets of Employer, by agreement in form and substance satisfactory to Employee
      to expressly assume and agree to perform this Agreement in the same manner
      and
      same extent that Employer would be required to perform it if no such succession
      had taken place. Failure of Employer to obtain such agreement prior to the
      effectiveness of any such succession shall be a material intentional breach
      of
      this Agreement and shall entitle Employee to terminate his employment with
      Employer pursuant to Section 7(c) hereof. As used in this Agreement,
“Employer” shall mean Employer as hereinbefore defined and any
      successor to its business or assets as aforesaid.

     

    
      
        
        

      

      
        Page
          10

        
          

        

      

      
        
        

      

    

    21.           No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing signed by Employee
      and
      Employer. No waiver by either party hereto at any time of any breach by the
      other party hereto of, or compliance with, any condition or provision of this
      Agreement to be performed by such other party shall be deemed a waiver of
      dissimilar provisions or conditions at the same or any prior subsequent time.
      No
      agreements or representations, oral or otherwise, express or implied, with
      respect to the subject matter hereof have been made by either party which are
      not set forth expressly in this Agreement.

     

    22.           The
      invalidity or unenforceability of any provisions of this Agreement shall not
      affect the validity or enforceability of any other provisions of this Agreement
      which shall remain in full force and effect.

     

    23.           This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which together shall constitute one and the same
      agreement.

     

    24.           This
      Agreement is personal in nature and neither party hereto shall, without consent
      of the other, assign or transfer this Agreement or any rights or obligations
      hereunder except as provided in Section 17 and Section 20 above. Without
      limiting the foregoing, Employee’s right to receive compensation hereunder shall
      not be assignable or transferable, whether by pledge, creation of a security
      interest or otherwise, other than a transfer by his will or by the laws of
      descent or distribution as set forth in Section 17 hereof, and in the event
      of
      any attempted assignment or transfer contrary to this paragraph, Employer shall
      have no liability to pay any amounts so attempted to be assigned or
      transferred.

     

    
      
        
        

      

      
        Page
          11

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof, the parties have caused this Amended and Restated Employment
      Agreement to be executed and delivered as of the day and year first above set
      forth.

     

    
      	 	
              “Employer”

            
	 	 	 
	 	
              Lincoln
                Bank

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Jerry R. Engle

            
	 	 	
              Jerry
                R. Engle, President

            
	 	 	 
	 	
              “Employee”

            
	 	 	 
	 	 	 
	 	
              /s/
                Bryan Mills

            
	 	
              Bryan
                Mills

            

    

    

     

    

     

     

    The
      undersigned, Lincoln Bancorp, sole shareholder of Employer, agrees that if
      it
      shall be determined for any reason that any obligations on the part of Employer
      to continue to make any payments due under this Agreement to Employee is
      unenforceable for any reason, Lincoln Bancorp, agrees to honor the terms of
      this
      Agreement and continue to make any such payments due hereunder to Employee
      pursuant to the terms of this Agreement.

     

    
      	 	
              Lincoln
                Bancorp

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Jerry R. Engle

            
	 	 	
              Jerry
                R. Engle, President

            

    

     

    

     

     

    Page
      12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]