-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GZdCVu+A8CwakEnyfm4tA28B+/XjJ283ov3xCaaxsG8T7NIwKQAe6C88R5HyAPR3 E1wCfMfg3on8iI7ULfuHfA== 0000913569-96-000173.txt : 19961002 0000913569-96-000173.hdr.sgml : 19961002 ACCESSION NUMBER: 0000913569-96-000173 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19961001 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MFB CORP CENTRAL INDEX KEY: 0000916396 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351907258 STATE OF INCORPORATION: IN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-46639 FILM NUMBER: 96637623 BUSINESS ADDRESS: STREET 1: 121 SOUTH CHURCH ST STREET 2: PO BOX 528 CITY: MISHAWAKA STATE: IN ZIP: 46546-0528 BUSINESS PHONE: 2192553146 MAIL ADDRESS: STREET 1: P O BOX 528 CITY: MISHAWNA STATE: IN ZIP: 46544 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LASALLE/KROSS PARTNERS LP CENTRAL INDEX KEY: 0001020426 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 350 E MICHIGAN STREET 2: SUITE 500 CITY: KALAMAZOO STATE: MI ZIP: 49007 BUSINESS PHONE: 6163444993 MAIL ADDRESS: STREET 1: 350 E MICHIGAN STREET 2: SUITE 500 CITY: KALAMAZOO STATE: MI ZIP: 49007 SC 13D/A 1 AMENDMENT NO. 1 TO SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1) MFB CORP. (Name of Issuer) Common Stock, without par value (Title of Class of Securities) 55272D106 (CUSIP Number) Paul R. Rentenbach Dykema Gossett PLLC 400 Renaissance Center Detroit, Michigan 48243-1668 (313) 568-6973 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 23, 1996 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. CUSIP No. 55272D106 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person (optional) LaSalle/Kross Partners, Limited Partnership 2 Check The Appropriate Box If A Member of a Group* (a)[X] (b)[ ] 3 SEC Use Only 4 Source of Funds: WC 5 Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) or 2(e) [ ] 6 Citizenship Or Place of Organization Delaware 7 Sole Voting Power Number of 131,700 shares Shares Beneficially 8 Shared Voting Power Owned By 0 Each Reporting 9 Sole Dispositive Power Person 131,700 shares With 10 Shared Dispositive Power 0 11 Aggregate Amount of Beneficially Owned by Each Reporting Person 134,707 shares 12 Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ] 13 Percent of Class Represented By Amount In Row (11) 6.8% 14 Type Of Reporting Person* PN CUSIP No. 55272D106 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person (optional) Phillip J. Zwickl 2 Check The Appropriate Box If A Member of a Group* (a)[X] (b)[ ] 3 SEC Use Only 4 Source of Funds: PF 5 Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) or 2(e) [ ] 6 Citizenship Or Place of Organization U.S.A. 7 Sole Voting Power Number of 3,007 shares Shares Beneficially 8 Shared Voting Power Owned By 0 Each Reporting 9 Sole Dispositive Power Person 3,007 shares With 10 Shared Dispositive Power 0 11 Aggregate Amount of Beneficially Owned by Each Reporting Person 134,707 shares 12 Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ] 13 Percent of Class Represented By Amount In Row (11) 6.8% 14 Type Of Reporting Person* IN CUSIP No. 55272D106 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person (optional) Richard J. Nelson 2 Check The Appropriate Box If A Member of a Group* (a)[X] (b)[ ] 3 SEC Use Only 4 Source of Funds: N/A 5 Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items 2(d) or 2(e) [ ] 6 Citizenship Or Place of Organization U.S.A. 7 Sole Voting Power Number of 0 Shares Beneficially 8 Shared Voting Power Owned By 0 Each Reporting 9 Sole Dispositive Power Person 0 With 10 Shared Dispositive Power 0 11 Aggregate Amount of Beneficially Owned by Each Reporting Person 134,707 shares 12 Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares* [ ] 13 Percent of Class Represented By Amount In Row (11) 6.8% 14 Type Of Reporting Person* IN Item 1. Security and Issuer. This is Amendment No. 1 to the Schedule 13D filed by LaSalle/Kross Partners, Limited Partnership (the "Partnership") on August 9, 1996, relating to the common stock, without par value (the "Common Stock"), of MFB Corp. (the "Issuer"). The address of the principal executive office of the Issuer is 121 South Church Street, Mishawaka, Indiana 46546. This also constitutes an initial Schedule 13D jointly filed on behalf of the Partnership, Mr. Richard J. Nelson and Mr. Phillip J. Zwickl (the "Group"). The joint filing agreement of the members of the Group is filed herewith as Exhibit 1. Item 2. Identity and Background. The identity and background of the Partnership and Mr. Nelson are described in Item 1 to its initial Schedule 13D, filed August 9, 1996, and are incorporated herein by reference. Phillip J. Zwickl, a citizen of the United States of America, is the Postmaster of Mishawaka, Indiana, and resides at 711 West 14th Street, Mishawaka, Indiana. During the past five years, Mr. Zwickl has not (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws was issued nor in which there was a finding of any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. The Partnership has a margin account with subsidiaries of The Bear Stearns Companies Inc. ("Bear Stearns"), and has used the proceeds from loans made to it by Bear Stearns to purchase the shares of Common Stock that it presently owns. All of the marginable securities owned by the Partnership and held in its brokerage account at Bear Stearns are pledged as collateral for the repayment of margin loans made to the Partnership by Bear Stearns. Since August 9, 1996, the Partnership has purchased an additional 11,000 shares of Common Stock in open market transactions on August 21, 1996 (3,000 shares at $15.625 per share), August 26, 1996 (500 shares at $15.75 per share), September 19, 1996 (2,500 shares at $16.50 per share) and September 23, 1996 (5,000 shares at $17.25 per share). A copy of the Partnership's margin account agreement with Bear Stearns is attached hereto as Exhibit 2 and incorporated herein by reference. Mr. Zwickl's daughter acquired 3,007 shares of Common Stock on or about March 24, 1994, at the time of the initial offering of the Issuer's shares in connection with the conversion of its subsidiary, Mishawaka Federal Savings, from the mutual to the stock form of ownership. All such shares were acquired at the price of $10.00 per share, and the source of monies for such purchase was Mr. Zwickl's daughter's personal funds. Mr. Zwickl acts as his daughter's financial advisor, and in such capacity he exercises voting and dispositive powers with respect to such shares of Common Stock. Item 4. Purpose of Transaction. The primary purpose for the Group's purchase of shares of the Issuer is for investment. The Partnership's stated purpose is to emphasize investments in the stocks of selected thrifts, banks and savings banks. The Group intends to continue to evaluate the Issuer and its business prospects and intends to consult with management of the Issuer, other shareholders of the Issuer's Common Stock or other persons further its investment objectives. The Group may make further purchases of shares of Common Stock or may dispose of any or all of its shares of Common Stock at any time. At present, and except as described hereafter in this Item 4, the Group has no specific plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive of Item 4 of Schedule 13D. The Group intends to continue to explore the options available to it. The Group may, at any time or from time to time, review or reconsider its position with respect to the Issuer and formulate plans with respect to matters referred to in Item 4 of Schedule 13D. On September 23, 1996, the Partnership delivered to the Issuer, in accordance with the Bylaws of the Issuer, a notice of intention to nominate two persons for election as directors of the Issuer at the Annual Meeting of Shareholders of the Issuer to be held on January 21, 1997 (the "1997 Annual Meeting"). The persons that the Partnership intends to nominate at the 1997 Annual Meeting are Phillip J. Zwickl and Richard J. Nelson. A copy of such Notice of Intent to Nominate Two Directors, which contains biographical and other information required by the Bylaws of the Issuer, is attached hereto as Exhibit 3 and incorporated herein by reference. On September 17, 1996, the Partnership wrote to Mr. Charles J. Viater, President and Chief Executive Officer of the Issuer, and requested Mr. Viater to present to the Board of Directors of the Issuer, at its next monthly meeting, proposed amendments to the Bylaws of the Issuer to (1) reduce the requirement for prior notice of nominations and shareholder proposals from 120 days to 60 days, which was the requirement before the Board amended the Bylaws in August 1996 to put into effect such 120-day prior notice requirement and (2) amend Article IV, Section 1, of the Issuer's Bylaws to eliminate certain additional qualifications that the Board put into effect in August 1996 for eligibility to be nominated as a candidate for election to the Board. On September 23, 1996, the Partnership also delivered to the Issuer a notice of intention to propose business at the 1997 Annual Meeting for consideration and action by the shareholders of the Issuer, in the event that the Board of Directors refuses to make such amendments. The Partnership intends to introduce for consideration and action by shareholders at the 1997 Annual Meeting proposals to achieve the amendments set forth in clauses (1) and (2) above, and (3) a proposal that the Company reimburse the Partnership for all costs and expenses that it incurs in connection with the solicitation of proxies for use at the 1997 Annual Meeting for the purpose of voting on the such two proposals. A copy of such Notice of Intent to Propose Business, which contains other information required by the Bylaws of the Issuer, is attached hereto as Exhibit 4 and incorporated herein by reference. Item 5. Interest in Securities of the Issuer. (a) By virtue of their arrangement and understanding describe in Item 6 below, the Partnership, Mr. Nelson and Mr. Zwickl each are deemed to beneficially own 134,707 shares of Common Stock of the Issuer, constituting approximately 6.8% of the issued and outstanding shares of Common Stock, based on the number of outstanding shares reported on the Issuer's Form 10-Q Quarterly Report for the period ended June 30, 1996. (b) Of the shares described in (a) above, the Partnership has the sole right to exercise voting and dispositive powers over 131,700 shares of Common Stock and Mr. Zwickl has the sole right to exercise voting and dispositive powers over 3,007 shares of Common Stock of the Issuer. Mr. Nelson does not exercise sole voting or dispositive powers with respect to any shares of Common Stock. (c) The only transactions in the Common Stock by the Partnership during the past 60 days are reported in Item 2 above, and in Item 2 in the Partnership's initial Schedule 13D filed on August 9, 1996. Neither Mr. Nelson nor Mr. Zwickl have had any transactions in the Common Stock during the past 60 days. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. The Partnership has an oral understanding with Phillip J. Zwickl and Richard J. Nelson pursuant to which the Partnership has requested them to serve as its representatives on the Board of Directors of the Issuer, and they have agreed to do so, without compensation from the Partnership of any sort whatsoever. The Partnership has agreed (a) to vote all shares that it beneficially owns and is entitled to vote at the 1997 Annual Meeting in favor of electing both Mr. Nelson and Mr. Zwickl and (b) to reimburse each them for any out-of-pocket expenses that either one of them incurs in connection with the Partnership's intended solicitation of proxies for use at the 1997 Annual Meeting. Mr. Zwickl has orally agreed to vote any shares of Common Stock that he beneficially owns and is entitled to vote at the 1997 Annual Meeting in favor of both himself and Mr. Nelson. Other than the foregoing, the Partnership has no other arrangement or understanding with either proposed nominee, and neither Mr. Zwickl nor Mr. Nelson has any arrangement or understanding with any other person pursuant to which he was or is to be selected as a Director or a nominee for election as a Director of the Issuer. Item 7. Material to be Filed as Exhibits. No. Description - ---- -------------- 1 Joint Filing Agreement 2 Professional Account Agreement, dated March 6, 1996, between the Partnership and each of the subsidiaries of The Bear Stearns Companies Inc. 3 Notice of Intent to Nominate Two Directors 4 Notice of Intent to Propose Business SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: October 1, 1996 LaSALLE/KROSS PARTNERS, LIMITED PARTNERSHIP By: LaSALLE CAPITAL MANAGEMENT, INC. a General Partner By: /S/ RICHARD J. NELSON Richard J. Nelson, President /S/ RICHARD J. NELSON Richard J. Nelson /S/ PHILLIP J. ZWICKL Phillip J. Zwickl EXHIBIT INDEX No. Description - ---- -------------- 1 Joint Filing Agreement 2 Professional Account Agreement, dated March 6, 1996, between the Partnership and each of the subsidiaries of The Bear Stearns Companies Inc. 3 Notice of Intent to Nominate Two Directors 4 Notice of Intent to Propose Business EX-1 2 JOINT FILING AGREEMENT JOINT FILING AGREEMENT Pursuant to Rule 13d-1(f)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree that the Schedule 13D to which this Joint Filing Agreement is being filed as an exhibit shall be a joint statement filed on behalf of each of the undersigned. Date: October 1, 1996 LaSALLE/KROSS PARTNERS, LIMITED PARTNERSHIP By: LaSALLE CAPITAL MANAGEMENT, INC. a General Partner By: /S/ RICHARD J. NELSON Richard J. Nelson, President /S/ RICHARD J. NELSON Richard J. Nelson /S/ PHILLIP J. ZWICKL Phillip J. Zwickl EX-2 3 PROFESSIONAL ACCOUNT AGREEMENT PROFESSIONAL ACCOUNT AGREEMENT BEAR STEARNS The Bear Stearns Companies Inc. 245 Park Avenue New York, New York 10167 (212) 272-2000 Title: LaSalle/Kross Partners, Limited Partnership Account No. 10204824-26 This agreement ("Agreement") sets forth the terms and conditions under which subsidiaries of The Bear Stearns Companies Inc. will open and maintain account(s) in your name and otherwise transact business with you. 1. Parties. You hereby agree that the parties to this Agreement shall consist of you, each and every subsidiary of The Bear Stearns Companies listed on the signature page hereof and any other subsidiary of The Bear Stearns Companies Inc. now existing or hereafter created, at which you open an account or accounts or with which you otherwise transact business (which shall automatically become a party hereto by virtue thereof) each of which subsidiaries, listed or presently unlisted herein, being referred to hereinafter as a "Bear Stearns entity" and all such entities being collectively referred to as "Bear Stearns"). 2. Applicable Law and Regulations. All transactions shall be subject to all applicable law and the rules and regulations of all federal, state and self-regulatory agencies, including, but not limited to, the Board of Governors of the Federal Reserve System and the constitution, rules and customs of the exchange or market (and clearing house) where executed. 3. Security Interest and Lien. As security for the payment and performance of all of your obligations and liabilities to any Bear Stearns entity, each Bear Stearns entity shall have a continuing security interest in all property in which you have an interest held by or through any Bear Stearns entity, including, but not limited to, securities, commodity futures contracts, commercial paper, monies, any after-acquired property and all rights you may have against any Bear Stearns entity. In addition, in order to satisfy any such outstanding liabilities or obligations, Bear Stearns may, at any time and without prior notice to you, use, apply or transfer any of such securities or property interchangeably (including cash and fully-paid securities). 4. Deposits on Transactions. Whenever Bear Stearns, in its sole discretion, considers it necessary for its protection, it may require you, and you hereby agree, to deposit cash or collateral immediately in your account(s) prior to any applicable settlement date in order to assure due performance of your open contractual commitments. 5. Breach, Bankruptcy or Default. Any breach of or default under this Agreement or any other agreement you may have with any Bear Stearns entity, or the filing of a petition or other proceeding in bankruptcy or insolvency or for the appointment of a receiver by or against you, the levy of an attachment against your accounts with Bear Stearns, or your death, mental incompetence or dissolution, or any other grounds for insecurity (including any indication of your refusal or inability to promptly meet a margin call or other deposit requirement hereunder) as determined by Bear Stearns in its sole discretion, shall constitute, at Bear Stearns' election, a default by you under all agreements you may then have with Bear Stearns, whether heretofore or hereafter entered into. In the event of default, each Bear Stearns entity reserves the right to sell, without prior notice to you, any and all property in which you have an interest held by or through any Bear Stearns entity, to buy any or all property which may have been sold short, to accelerate, cancel, liquidate, close out and net the settlement payments and/or delivery obligations of any or all outstanding transactions (including contracts and options for foreign currency or any other commodity) and/or to purchase or sell any other securities or property to offset market risk, after which you shall be liable to Bear Stearns for any remaining deficiency, loss, costs or expenses sustained by Bear Stearns in connection therewith. Such purchases and/or sales may be effected publicly or privately without notice or advertisement in such manner, in such order and at such time as Bear Stearns may in its sole discretion determine. At any such sale or purchase, Bear Stearns may purchase or sell the property free of any right of redemption. In addition, Bear Stearns shall have the right to set off, net, recoup or otherwise apply any amount owing from any Bear Stearns entity to you against any indebtedness in any of your accounts, whether matured or unmatured. 6. Fees and Charges. You understand that Bear Stearns may charge commissions and other fees for execution, custody or any other service furnished to you, and you agree to pay such commissions and fees at Bear Stearns' then prevailing rates. You understand further that such fees may be changed from time to time, upon thirty days' prior written notice to you, and you agree to be bound thereby. 7. Transaction Reports and Account Statements. Reports of the execution of orders and statements of account shall be conclusive if not objected to in writing within five days in the case of reports of execution, and ten days in the case of account statements, after such documents have been transmitted to you by mail or otherwise. 8. Debit Balances/Truth-in-Lending. You hereby acknowledge receipt of Bear Stearns' Truth-in-Lending disclosure statement. You understand that interest will be charged on any debit balances in your accounts in accordance with the methods described in such statement or in any amendment thereof or revision thereto, which may be provided to you. Any debit balance which is not paid at the close of an interest period will be added to the opening balance for the next interest period. 9. Clearance Accounts. If any of your account(s) is carried by any Bear Stearns entity as clearing agent for your broker, unless such Bear Stearns entity receives from you prior written notice to the contrary, it may accept from such other broker, without any inquiry or investigation: (a) orders for the purchase or sale of securities and other property in your account(s) on margin or otherwise and (b) any other instructions concerning your account(s) or the property therein. You understand and agree that Bear Stearns shall have no responsibility or liability to you for any acts or omissions of such broker, its officers, employees or agents. You agree that your broker and its employees are third-party beneficiaries of this Agreement and that the terms and conditions hereof, including the arbitration provision, shall be applicable to all matters between or among any of you, your broker and its employees and Bear Stearns and its employees. 10. Costs of Collection. You hereby authorize Bear Stearns to charge you for any reasonable direct or indirect costs of collection, including, but not limited to, attorneys' fees, court costs and other expenses. 11. Impartial Lottery Allocation. You agree that, in the event Bear Stearns holds on your behalf bonds or preferred stocks in street name or bearer form which are callable in part, you will participate in the impartial lottery allocation system of the called securities in accordance with the rules of the New York Stock Exchange, Inc. or any other appropriate self-regulatory organization. When any such call is favorable, no allocation will be made to any account with respect to which Bear Stearns has actual knowledge that its officers, directors or employees have any financial interest until all other customers are satisfied on an impartial lottery basis. 12. Waiver, Assignment and Notices. Neither Bear Stearns' failure to insist at any time upon strict compliance with this Agreement or with any of the terms hereof nor any continued course of such conduct on its part shall constitute or be considered a waiver by Bear Stearns of any of its rights or privileges hereunder. Any assignment of any of your rights or obligations hereunder or interest in any property held by or through Bear Stearns without obtaining the prior written consent of an authorized representative of Bear Stearns shall be null and void. Bear Stearns reserves the right to assign any of its rights or obligations hereunder to any Bear Stearns entity without prior notice to you. Notices or other communications will be delivered or mailed to the address provided by you unless and until Bear Stearns has received notice in writing from you of a different address. Margin calls may be communicated orally and need not be confirmed in writing. 13. Free Credit Balances. You hereby authorize Bear Stearns to use any free credit balance awaiting investment or reinvestment in any of your accounts in accordance with all applicable rules and regulations and to pay interest thereon at such rate or rates and under such conditions as are established from time to time by Bear Stearns for such accounts and for the amounts of cash so used. 14. Restrictions on Account. You understand that Bear Stearns, in its sole discretion, may restrict or prohibit trading of securities or other property in any of your accounts. 15. Credit Information and Investigation. You authorize Bear Stearns and, if applicable, your broker, in its or their discretion, to make and obtain reports concerning your credit standing and business conduct. You may make a written request within a reasonable period of time for a description of the nature and scope of the reports made or obtained by Bear Stearns. 16. Short and Long Sales. In placing any sell order for a short account, you will designate the order as such and hereby authorize Bear Stearns to mark the order as being "short." In placing any sell order for a long account, you will designate the order as such and hereby authorize Bear Stearns to mark the order as being "long." The designation of a sell order as being for a long account shall constitute a representation that you own the security with respect to which the order has been placed, that such security may be sold without restriction in the open market and that, if Bear Stearns does not have the security in its possession at the time you place the order, you shall deliver the security by settlement date in good deliverable form or pay to Bear Stearns any losses or expenses incurred by it as a result of your failure to make delivery on a timely basis. 17. Margin and Other Collateral Requirements. You hereby agree to deposit and maintain such margin in any of your margin accounts as Bear Stearns may in its sole discretion require, and you agree to pay forthwith on demand any debit balance owing with respect to any of your margin accounts. In addition, you further agree to promptly deposit and maintain such other collateral with Bear Stearns as is required by any other agreement or open transaction you may have with it. Upon your failure to make any such payment, or at any time Bear Stearns in its sole discretion deems it necessary for its protection, whether with or without prior demand, call or notice, Bear Stearns shall be entitled to exercise all rights and remedies provided in paragraphs 3, 5 and 29 hereof. No demands, calls, tenders or notices that Bear Stearns may have made or given in the past in any one or more instances shall invalidate your waiver of any requirement that Bear Stearns make or give the same in the future. Unless you expressly advise Bear Stearns to the contrary, you hereby represent that you are not an "affiliate" (as defined in Rule 144(a)(1) under the Securities Act of 1933) of the issuer of any security held in any of your accounts. 18. Consent to Loan or Pledge of Securities. Within the limits of applicable law and regulations, you hereby authorize Bear Stearns to lend either to itself or to others any securities held by it in any of your margin accounts, together with all attendant rights of ownership, and to use all such property as collateral for its general loans. Any such property, together with all attendant rights of ownership, may be pledged, repledged, hypothecated or rehypothecated either separately or in common with other such property for any amounts due to Bear Stearns thereon or for a greater sum, and Bear Stearns shall have no obligation to retain a like amount of similar property in its possession and control. 19. Give-ups; Free deliveries. In the event: (i) your orders are not executed by Bear Stearns and you give-up Bear Stearns' name for clearance and settlement, or (ii) you require Bear Stearns to make a free delivery of cash or securities in connection with the settlement of such orders, the following terms and conditions shall apply: (i) You agree that you will only execute bona-fide orders and if required for settlement, you will request a free delivery of cash or securities only when you have reasonable grounds to believe that the contra-party and the broker who executed your order have the financial capability to complete any contemplated transaction; (ii) Bear Stearns reserves the right at any time to place a limit (of either dollars or number of securities) on the size of transactions that Bear Stearns will accept for clearance. If after you have received notice of such limitation you execute an order in excess of the limit established by Bear Stearns, Bear Stearns shall have the right, exercisable in its sole discretion, to decline to accept the transaction for clearance and settlement. In the event any claim is asserted against Bear Stearns by the broker who executed your order because of such action by Bear Stearns, you agree to indemnify and hold Bear Stearns harmless from any loss, liability, damage, cost or expense (including, but not limited to fees and expenses of legal counsel) arising directly or indirectly therefrom; and (iii) Bear Stearns will on a best efforts basis attempt to clear such transactions within a reasonable period and utilize the same procedures it utilizes when clearing transactions on behalf of other customers. If either you or the broker who executed your order fails for any reason to settle the transaction and/or return any free delivery within a reasonable period of time, as determined by Bear Stearns, you will be solely liable to Bear Stearns for any and all loss, including expenses, caused thereby. Bear Stearns shall have no liability whatsoever to you in any such circumstance. 20. Prime Brokerage Services. (a) Prior to the commencement of any prime brokerage activity, Bear Stearns will enter into an agreement with your executing broker(s) that will set forth the terms and conditions under which your executing broker(s) will be authorized to accept orders from you for settlement by Bear Stearns (the "Prime Brokerage Agreement"). Bear Stearns will accept for clearance and settlement trades executed on your behalf by such executing broker(s) as you may designate from time to time. On the day following each transaction, Bear Stearns will send you a notification of each trade placed with your executing broker based upon the information provided by you. This notification contains some but not all of the information required to appear in a confirmation. (b) Bear Stearns shall be responsible for settling trades executed on your behalf by your executing broker(s) and reported to Bear Stearns by you and your executing broker(s) provided that you have reported to Bear Stearns on trade date, by the time designated to you by Bear Stearns, all the details of such trades including, but not limited to, the contract amount, the security involved, the number of shares or the number of units and whether the transaction was a long or short sale or a purchase, and further provided that Bear Stearns has either affirmed or not DK'd and has not subsequently disaffirmed such trades. In the event that Bear Stearns determines not to settle a trade, Bear Stearns shall not have settlement responsibility for such trade and shall, instead, send you a cancellation notification to offset the notification sent to you under sub-paragraph a of this paragraph. You shall be solely responsible and liable to your executing broker(s) for settling such trades. In addition, Bear Stearns may be required to cease providing prime brokerage services to you in accordance with the Prime Brokerage Agreement. (c) In the event of: (i) the filing of a petition or other proceeding in bankruptcy, insolvency or for the appointment of a receiver by or against your executing broker, (ii) the termination of your executing broker's registration and the cessation of business by it as a broker- dealer, or (iii) your executing broker's failure, inability or refusal, for any reason whatsover or for no reason at all, to settle a trade, if Bear Stearns agrees to settle any trades executed on your behalf by such executing broker, regardless whether Bear Stearns either affirmed or did not DK and did not disaffirm such trades, you shall be solely responsible, and liable to Bear Stearns, for any losses arising out of or incurred in connection with Bear Stearns' agreement to settle such trades. (d) You shall maintain in your account with Bear Stearns such minimum net equity in cash or securities as Bear Stearns, in its sole discretion may require, from time to time (the "Bear Stearns Net Equity Requirements"), which shall in no event be less that the minimum net equity required by the SEC Letter (the "SEC Net Equity Requirements"). In the event your account falls below the SEC Net Equity Requirements, you hereby authorize Bear Stearns to notify promptly all executing brokers with whom it has a Prime Brokerage Agreement on your behalf of such event. Moreover, if you fail to restore your account to compliance with the SEC Net Equity Requirements within the time specified in the SEC Letter, Bear Stearns shall: (i) notify all such executing brokers that Bear Stearns is no longer acting as your prime broker and (ii) either not affirm or indicate that it does not know ("DK") all prime brokerage transactions on your behalf with trade date after the business day on which such notification was sent. In the event either: (i) your account falls below the Bear Stearns Net Equity Requirements, (ii) Bear Stearns determines that there would not be enough cash in your account to settle such transactions or that a maintenance margin call may be required as a result of settling such transactions, or (iii) Bear Stearns determines that the continuation of prime brokerage services to you presents an unacceptable risk to Bear Stearns taking into consideration all the facts and circumstances, Bear Stearns may disaffirm all your prime brokerage transactions and/or cease to act as your prime broker. (e) If you have instructed your executing broker(s) to send confirmations to you in care of Bear Stearns, as your prime broker, the confirmation sent by such executing broker is available to you promptly from Bear Stearns, at no additional charge. (f) If your account is managed on a discretionary basis, you hereby acknowledge that your prime brokerage transactions may be aggregated with those of other accounts of your advisor, according to your advisor's instructions, for execution by your executing broker(s) in a single bulk trade and for settlement in bulk by Bear Stearns. You hereby authorize Bear Stearns to disclose your name, address and tax I.D. number to your executing broker(s). In the event any trade is disaffirmed, as soon as practicable thereafter, Bear Stearns shall supply your executing broker(s) with the allocation of the bulk trade, based upon information provided by your advisor. (g) The prime brokerage services hereunder shall be provided in a manner not inconsistent with the no-action letter dated January 25, 1994 issued by the Division of Market Regulation of the Securities and Exchange Commission (the "SEC Letter"), and any supplements or amendments thereto. 21. Legally Binding. You and Bear Stearns hereby agree that this Agreement shall extend to and be binding upon all of the parties hereto (whether now existing or hereafter added) and their respective successors and assigns. If you are a natural person, this Agreement shall extend to and be binding upon your estate, heirs, executors, administrators and personal representatives. You further agree that all purchases and sales shall be for your account(s) in accordance with your oral or written instructions. You hereby waive any and all defenses that any such instruction was not in writing as may be required by the Statute of Frauds or any similar law, rule or regulation. 22. Amendment. You agree that Bear Stearns may modify the terms of this Agreement at any time upon prior written notice to you. By continuing to accept services from Bear Stearns, you will have indicated your acceptance of any such modification. If you do not accept any such modification, you must notify Bear Stearns thereof in writing and your account may then be terminated, but you will still be liable thereafter to Bear Stearns for all remaining liabilities and obligations. Otherwise, this Agreement may not be waived or modified absent a written instrument signed by an authorized representative of Bear Stearns. 23. New York Law to Govern. This Agreement shall be deemed to have been made in the State of New York and shall be construed, and the rights and liabilities of the parties determined, in accordance with the laws of the State of New York without giving effect to the conflicts of law principles thereof. 24. Arbitration. You agree and, by maintaining accounts for you, Bear Stearns agrees that controversies arising between you and any Bear Stearns entity or any broker for which Bear Stearns acts as clearing agent, whether arising prior to, on or subsequent to the date hereof, shall be determined by arbitration. Any arbitration under this Agreement shall be held at the facilities and before an arbitration panel appointed by the New York Stock Exchange, Inc., The American Stock Exchange, Inc., or the National Association of Securities Dealers, Inc. (and only before such exchanges or association). You may elect one of the foregoing forums for arbitration, but if you fail to make such election by registered mail or telegram addressed to Bear, Stearns Securities Corp., 245 Park Avenue, New York, New York 10167, Attention: Chief Legal Officer (or any other address of which you are advised in writing), before the expiration of ten days after receipt of a written request from Bear Stearns to make such election, then Bear Stearns may make such election. For any arbitration solely between you and a broker for which Bear Stearns acts as clearing agent, such election shall be made by registered mail to such broker at its principal place of business. Judgment upon the award of the arbitrators may be entered in any state or federal court having jurisdiction thereover. With respect to the resolution of any such controversy, you and Bear Stearns further acknowledge that: --arbitration is final and binding on the parties. --the parties are waiving their right to seek remedies in court, including the right to a jury trial. --pre-arbitration discovery is generally more limited than and different from court proceedings. --the arbitrators' award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of rulings by the arbitrators is strictly limited. --the panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. --no person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action; who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) the customer is excluded from the class by the court. Such forebearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Agreement except to the extent stated herein. 25. Severability. If any provision hereof is or should become inconsistent with any present or future law, rule or regulation of any sovereign government or regulatory body having jurisdiction over the subject matter of this Agreement, such provision shall be deemed to be rescinded or modified in accordance with any such law, rule or regulation. In all other respects, this Agreement shall continue to remain in full force and effect. 26. Extraordinary Events. Bear Stearns shall not be liable for losses in any of your accounts which are caused directly or indirectly by government restrictions, exchange or market rulings, suspension of trading, war, strikes or any other condition beyond its control. 27. Headings. The headings of the provisions hereof are for descriptive purposes only and shall not modify or qualify any of the rights or obligations set forth in such provisions. 28. Telephone Conversations. For the protection of both you and Bear Stearns, and as a way of correcting misunderstandings, you hereby authorize Bear Stearns, at its discretion and without prior notice to you, to monitor and/or record any or all telephone conversations between you and any of Bear Stearns' employees or agents. 29. Additional Rights and Remedies. The rights and remedies granted herein to Bear Stearns are in addition to, and supersede any limitations on, any other rights and remedies provided to Bear Stearns in any other agreement you may have with it, and you hereby appoint Bear Stearns as your agent to take any action necessary to perfect the security interest granted to it in paragraph 3 hereof. In the event of a breach or default under this Agreement or any other agreement you may have with any Bear Stearns entity, each Bear Stearns entity shall have all rights and remedies available to a secured creditor under any applicable law in addition to the rights and remedies provided herein. 30. Authority; Capacity. By signing this Agreement, you represent that you are of legal age and that, unless you have notified Bear Stearns to the contrary, neither you nor any member of your immediate family is an employee of any exchange or member thereof, the National Association of Securities Dealers, Inc., or a member thereof, or of any corporation, firm or individual engaged in the business of dealing, as broker or principal, in securities, options or futures, or of any bank, trust company or insurance company. If you are signing on behalf of an institution, you represent that the institution on whose behalf you are acting is authorized to enter into this Agreement and that you are duly authorized to sign this Agreement in its name. By signing this Agreement you acknowledge that: 1. The securities in your margin account(s) and any securities for which you have not fully paid, together with all attendant ownership rights, may be loaned to the Clearing Broker or loaned out to others; and 2. You have received a copy of this Agreement. A pre-dispute arbitration clause is contained in paragraph 24 hereof. INSTITUTIONAL CLIENT (please complete): LaSALLE/KROSS PARTNERS, L.P. 350 East Michigan Avenue, Suite 500 Kalamazoo, Michigan 49007 /S/ RICHARD J. NELSON March 6, 1996 EACH OF THE FOLLOWING SUBSIDIARIES OF THE BEAR STEARNS COMPANIES INC.: Bear, Stearns & Co. Inc., Bear Stearns Securities Corp., Bear, Stearns International Limited, Bear Stearns Capital Markets Inc., Bear Stearns Capital Markets Inc. II, Bear Stearns Mortgage Capital Corporation, Bear Stearns N.Y. Inc., Bear Stearns Global Asset Trading Ltd., Bear Stearns Global Asset Holdings, Ltd., Bear Stearns Forex Inc., Bear Stearns U.K. Limited, Bear Stearns International Trading Limited, Bear Stearns (Japan), Ltd., Bear Stearns Asia Limited and Bear Stearns Hong Kong Limited; and any other subsidiary of The Bear Stearns Companies Inc. later added as a party hereto pursuant to paragraph 1 hereof. By: /S/ EX-3 4 NOTICE OF INTENT TO NOMINATE TWO DIRECTORS LaSALLE/KROSS PARTNERS, L.P. 350 East Michigan, Suite 500 Kalamazoo, Michigan 49007 September 20, 1996 VIA FEDERAL EXPRESS AND FAX Mr. M. Gilbert Eberhart, Secretary MFB CORP 121 South Church Street Mishawaka, Indiana 46544 Re: Notice of Intent to Nominate Two Directors Dear Mr. Eberhart: This letter constitutes a notice of intent by LaSalle/Kross Partners, L.P. (the "Partnership"), to nominate two persons for election as directors of MFB Corp. (the "Corporation") at the 1997 Annual Meeting of Shareholders to be held on January 21, 1997. This notice is being provided to you, as Secretary of the Corporation, pursuant to Article III, Section 12, of the Corporation's Bylaws. On behalf of the Partnership, I hereby notify the Corporation pursuant to Article III, Section 12, of the Corporation's Bylaws that it intends to nominate Phillip J. Zwickl and Richard J. Nelson for election to the Board of Directors of the Corporation at the 1997 Annual Meeting of Shareholders of the Corporation to be held on January 21, 1997, or at any adjournment thereof. Set forth below is the information required by Article III, Section 12, of the Corporation's Bylaws: (a) As to each proposed nominee, all information relating to such person that is required to be disclosed in a solicitation of proxies for the election of directors, or is otherwise required, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended: Name Age - ---- --- Phillip J. Zwickl.................57 Richard J. Nelson.................52 Material Proceedings Adverse to the Corporation To the Partnership's best knowledge, and based on information provided by each Nominee, there are no material proceedings to which either Mr. Zwickl or Mr. Nelson, or any associate of either of them, is a party adverse to the Corporation or any of its subsidiaries, and neither of them nor any associate of either of them has a material interest adverse to the Corporation or any of its subsidiaries. Shares of Corporation's Common Stock Beneficially Owned: - ------------------------------------------------------- Phillip J. Zwickl................ 3,000 (1) Richard J. Nelson................126,700 (2) - ---------------- (1) Mr. Zwickl is the "beneficial owner" (as determined under Rule 13d-3 of the federal Securities Exchange Act of 1934, as amended), of 3,000 shares of Common Stock by reason of his ownership of such shares by his daughter, who resides with him. (2) These are shares owned by the Partnership. Positions or Offices with the Corporation - ----------------------------------------- Phillip J. Zwickl....................NONE Richard J. Nelson....................NONE Arrangements or Understandings with Other Persons: Mr. Zwickl and Mr. Nelson have an understanding with the Partnership pursuant to which the Partnership has requested them to serve as its representatives on the Board of Directors of the Corporation, and they have agreed to do so, without compensation from the Partnership of any sort whatsoever. The Partnership has agreed to reimburse them for any out-of-pocket expenses that either one of them incurs in connection with the Partnership's intended solicitation of proxies for use at the 1997 Annual Meeting of Shareholders of the Corporation, but have no other arrangements or understandings with either such proposed nominee. To the Partnership's knowledge, neither Mr. Zwickl nor Mr. Nelson has any arrangement or understanding with any other person pursuant to which he was or is to be selected as a director or nominee for election as a director of the Corporation. Absence of any Family Relationships Neither Mr. Zwickl nor Mr. Nelson has any family relationship with any director or officer of the Corporation. There is no family relationship between Mr. Zwickl and Mr. Nelson, or between Mr. Zwickl and any partner of the Partnership or any person who controls any partner of the Partnership. Mr. Nelson is the President and sole shareholder of one of the two General Partners of the Partnership; however, there is no family relationship between Mr. Nelson and any partner of the Partnership or any person who controls any partner of the Partnership. Business Experience and Directorships During the past five years, Mr. Zwickl has been employed by the U.S. Postal Service as the Postmaster of Mishawaka, Indiana, which has been his principal employment during that period. His business address is 111 East Third, Mishawaka, Indiana 46544. Mr. Zwickl does not serve as a director for any company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended. For more than the past five years, Mr. Nelson has been principally employed as the President of LaSalle Capital Management, Inc., one of the General Partners of the Partnership, and his business address is 350 East Michigan, Suite 500, Kalamazoo, Michigan 49007. LaSalle Capital Management, Inc., is a management consulting firm that specializes in financial institution corporate restructurings. LaSalle Capital Management, Inc., is not a parent, subsidiary or other affiliate of the Corporation. Mr. Nelson does not presently serve as a director for any other company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended. Involvement in Certain Legal Proceedings To the best knowledge of the Partnership, and based on information provided by each Nominee: (i) Since January 1, 1990 no petition under the Bankruptcy Act or any state insolvency law has been filed by or against Mr. Zwickl or Mr. Nelson, and no a receiver, fiscal agent or similar officer has been appointed by a court for business or property of Mr. Zwickl or Mr. Nelson. In addition, since January 1, 1990 no petition under the Bankruptcy Act or any state insolvency law has been filed by or against, and no a receiver, fiscal agent or similar officer has been appointed by a court for business or property of, any partnership in which either of them is or was a general partner, or any corporation or business association of either of them is or was an executive officer. (ii) Since January 1, 1990, neither Mr. Zwickl nor Mr. Nelson has been convicted in a criminal proceeding nor has either of them been named as the subject of any pending criminal proceeding (excluding traffic violations or similar misdemeanors). (iii) Since January 1, 1990, neither Mr. Zwickl nor Mr. Nelson has been the subject of any court order, judgment or decree, not suspended, reversed or vacated permanently or temporarily enjoining either of them from (A) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission or an associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, (B) engaging in any type of business practice, or (C) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws. (iv) Since January 1, 1990, neither Mr. Zwickl nor Mr. Nelson has been the subject of any order, judgment or decree not subsequently reversed, suspended or vacated, of a federal or state authority barring or suspending for more than 60 days your right to be engaged in any activity described in clause (iii) above, or to be associated with persons engaged in any such activity. (v) Since January 1, 1990, neither Mr. Zwickl nor Mr. Nelson has been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission ("SEC") to have violated any federal or state securities law, or by a court of competent jurisdiction in a civil action or by the Commodities Futures Trading Commission ("CFTC") to have violated any federal commodities law, wherein the judgment in such civil action or finding by the SEC or the CFTC has not been subsequently reversed, suspended or vacated. Certain Transactions To the best knowledge of the Partnership, and based on information provided by each Nominee: (i) Except as set forth in this paragraph, since January 1, 1995, neither Mr. Zwickl nor any member of his immediate family has had any material interest in any transaction or any series of similar transactions to which the Corporation or any of its subsidiaries was a party, and neither Mr. Zwickl nor any members of his immediate family has had any material interest in any currently proposed transaction, or series of similar transactions to which the Corporation or any of its subsidiaries was a party. Mr. Zwickl currently has, and has continuously had for more than 12 months, a deposit relationship with the Corporation's subsidiary bank in the name of his Individual Retirement Account. (ii) Since January 1, 1995, neither Mr. Nelson nor any members of his immediate family has had any material interest in any transaction or any series of similar transactions to which the Corporation or any of its subsidiaries was a party, and neither Mr. Nelson nor any members of his immediate family has had any material interest in any currently proposed transaction, or series of similar transactions to which the Corporation or any of its subsidiaries was a party. (iii) Except as indicated in this paragraph, since January 1, 1995, neither Mr. Zwickl nor Mr. Nelson has had any relationship of the nature described in Item 404(b) of Regulation S-K, promulgated by the SEC under the Securities Exchange Act of 1934, as amended. Specifically, since January 1, 1995, neither Mr. Zwickl nor Mr. Nelson has been an officer, director, partner or employee of, or has either one of them owned (directly or indirectly) more than 10% of the equity interest in, any of the following types of organizations: (A) Any organization that has made or proposes to make payments to the Corporation or any of its subsidiaries for property or services; (B) Any organization to which the Corporation or any of its subsidiaries was indebted; (C) Any organization to which the Corporation or any of its subsidiaries has made or proposes to make payments for property or services, except that Mr. Zwickl's employer, the U.S. Postal Service, has provided routine mail service to the Corporation and its subsidiaries and has received the normal fees and compensation for postal services at the same rates as are charged to the general public; or (D) Any organization that provided legal services or investment banking services to the Corporation or any of its subsidiaries. (iv) Since January 1, 1995, neither Mr. Zwickl nor Mr. Nelson, nor any member of their respective immediate families or any firm, corporation or organization of which either of them is an executive officer or director or the beneficial owner of 10% or more of any class of equity securities, nor any trust or other estate in which either of them as a substantial beneficial interest or as to which either of them serves as a trustee or in a similar capacity, was indebted to the Corporation or any of its subsidiaries in excess of $60,000 at any time. Section 16 Compliance Neither Mr. Zwickl nor Mr. Nelson is required to file reports under Section 16 of the Securities Exchange Act of 1934, as amended, with respect to the Common Stock of the Corporation. As required by Article III, Section 12, also enclosed is the written consent of each proposed nominee to be named in the Partnership's proxy statement and to serve as a director of the Corporation if elected. (b) As to the Partnership: (i) The name and address of the Partnership are-- LaSalle/Kross Partners, Limited Partnership 350 East Michigan, Suite 500 Kalamazoo, Michigan 49007 (The Partnership will transfer an amount of its beneficially owned shares currently held in street name, as indicated above, to this name and address before November 1, 1996). (ii) As indicated in a Schedule 13D, dated August 12, 1996, and filed with the Securities and Exchange Commission, the Partnership is the beneficial owner of 120,700 shares of Common Stock, without par value, of the Corporation. Since that filing, an additional 6,000 shares have been purchased by the Partnership, bringing its total ownership to 127,200 shares. All such shares are currently held in "street name" in the Partnership's securities account with Bear, Stearns & Co. Very truly yours, LaSALLE/KROSS PARTNERS, L.P. By: KROSS FINANCIAL, INC. By: /S/ PETER T. KROSS Peter T. Kross, President CONSENT OF PROPOSED NOMINEE I, Richard J. Nelson, hereby consent to be named in the proxy statement of LaSalle/Kross Partners, L.P., to be used in connection with its solicitation of proxies from the shareholders of MFB Corp., for use in voting at the 1997 Annual Meeting of Shareholders of MFB Corp., and I hereby consent and agree to serve a Director of MFB Corp., if elected at such Annual Meeting /S/ RICHARD J. NELSON Richard J. Nelson Dated: September 19, 1965 CONSENT OF PROPOSED NOMINEE I, Phillip J. Zwickl, hereby consent to be named in the proxy statement of LaSalle/Kross Partners, L.P., to be used in connection with its solicitation of proxies from the shareholders of MFB Corp. for use in voting at the 1997 Annual Meeting of Shareholders of MFB Corp., and I hereby consent and agree to serve a Director of MFB Corp. if elected at such Annual Meeting. /S/ PHILLIP J. ZWICKL Phillip J. Zwickl Dated: September 20, 1996 EX-4 5 NOTICE OF INTENT TO PROPOSE BUSINESS LaSALLE/KROSS PARTNERS, L.P. 350 East Michigan, Suite 500 Kalamazoo, Michigan 49007 September 20, 1996 VIA FEDERAL EXPRESS AND FAX Mr. M. Gilbert Eberhart, Secretary MFB Corp. 121 South Church Street Mishawaka, Indiana 46544 Re: Notice of Intent to Propose Business Dear Mr. Eberhart: This letter constitutes a notice of intent by LaSalle/Kross Partners, L.P. (the "Partnership"), to propose certain actions for consideration and vote by the shareholders of MFB Corp. (the "Corporation") at the 1997 Annual Meeting of Shareholders to be held on January 21, 1997. This notice is being provided to you, as Secretary of the Corporation, pursuant to Article III, Section 11, of the Corporation's Bylaws. On behalf of the Partnership, I hereby notify the Corporation pursuant to Article III, Section 11, of the Corporation's Bylaws that the Partnership intends to propose that shareholders consider and vote upon one or more matters at the 1997 Annual Meeting of Shareholders of the Corporation to be held on January 21, 1997, or at any adjournment thereof. As required by Article III, Section 11, the Partnership provides the following information: (a) Brief description of the matters desired to be brought before the Annual Meeting: (1) That the shareholders of MFB Corp. approve a resolution requesting the Corporation's Board of Directors take appropriate action to amend Article III, Sections 11 and 12 of the Bylaws of the Corporation so that it shall read to the effect that a shareholder's notice of intention to submit proposed business at an Annual Meeting or to nominate a candidate for election as a director at an Annual Meeting shall be timely given if given "not less than 60 days prior to the Annual Meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the Annual Meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure was made", as such Bylaw was written prior to the August 1996 amendments thereto. (2) That the shareholders of MFB Corp. approve a resolution requesting the Corporation's Board of Directors take appropriate action to amend Article IV, Sections 1 of the Bylaws of the Corporation to eliminate the third and fourth sentences thereof, thus eliminating certain specific requirements for a person to be eligible or qualified to be elected as a director of the Corporation. (3) That the shareholders of MFB Corp. approve a resolution requesting the Corporation's Board of Directors consider reimbursing in full LaSalle/Kross Partners, L.P., for all of its out-of-pocket expenses incurred in soliciting proxies for use at the 1997 Annual Meeting of Shareholders of the Corporation to vote on the election of the Partnership's candidates as directors of the Corporation and to vote on various proposals presented for action by the shareholders at such Annual Meeting, regardless of the outcome of the vote by shareholders at such Annual Meeting. (b) Reasons for conducting such business at the Annual Meeting: Because the Board of Directors has failed to respond to the request of the Partnership that such Bylaw amendments be carried out, and because there is no other forum for action by the shareholders of the Corporation. (c) The name and address of the Partnership are-- LaSalle/Kross Partners, Limited Partnership 350 East Michigan, Suite 500 Kalamazoo, Michigan 49007 (The Partnership will transfer an amount of its beneficially owned shares currently held in street name, as indicated above, to this name and address before November 1, 1996). As indicated in a Schedule 13D, dated August 12, 1996, and filed with the Securities and Exchange Commission, the Partnership is the beneficial owner of 120,700 shares of Common Stock, without par value, of the Corporation. Since that filing, an additional 6,000 shares have been purchased by the Partnership, bringing its total ownership to 126,700 shares. All such shares are currently held in "street name" in the Partnership's securities account with Bear, Stearns & Co. (d) The only material interest that the Partnership has in such proposed business is its interest in being reimbursed for expenses that it incurs in its efforts to preserve the rights of all shareholders of the Corporation. Very truly yours, LaSALLE/KROSS PARTNERS, L.P. By: KROSS FINANCIAL, INC., a General Partner By: /S/ PETER T. KROSS Peter T. Kross, President -----END PRIVACY-ENHANCED MESSAGE-----