EXHIBIT 10.3

DIRECTOR DEFERRED COMPENSATION MASTER AGREEMENT

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Exhibit 10.3

DIRECTOR DEFERRED
COMPENSATION AGREEMENTS

Mutual Federal Savings Bank
Muncie, Indiana

Financial Institution Consulting Corporation
700 Colonial Road, Suite 260 .
Memphis, Tennessee 38117
WATS: 1-800-873-0089
FAX: (901) 68-7414
(901) 684-7400

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DIRECTOR DEFERRED COMPENSATION MASTER AGREEMENT

          This Director Deferred Compensation Master Agreement (the
“Agreement”), effective as of the 1st day of September, 1993, by and between
MUTUAL FEDERAL SAVINGS BANK (the “Bank”), a federally chartered savings bank,
and certain eligible Directors, hereinafter referred to as “Director”, who shall
be approved by the Bank to participate and who shall elect to become a party to
this Director Deferred Compensation Master Agreement by execution of a Director
Deferred Compensation Joinder Agreement (“Joinder Agreement”) in a form provided
by the Bank.

WITNESSETH:

          WHEREAS, the Directors serve the Bank as members of the Board; and

          WHEREAS, the Bank recognizes the valuable services heretofore
performed for it by such Directors and wishes to encourage continued service of
each; and

          WHEREAS, the Bank values the efforts, abilities and accomplishments of
such Directors and recognizes that the Directors’ services will substantially
contribute to its continued growth and profits in the future; and

          WHEREAS, these Directors wish to defer a certain portion of their fees
to be earned in the future; and

          WHEREAS, the Directors and the Bank desire to formalize the terms and
conditions upon which the Bank shall pay such deferred compensation to the
Directors or their designated beneficiaries; and

          WHEREAS, the Bank has adopted this Director Deferred Compensation
Master Agreement which controls all issues relating to the Deferred Compensation
Benefit as described herein and which restates and replaces the existing fee
deferral program available to the Directors;

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          NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree to the following terms and conditions:

SECTION I

DEFINITIONS

          When used herein, the following words and phrases shall have the
meanings below unless the context clearly indicates otherwise:

1.1

“Bank” means Mutual Federal Savings Bank and any successor thereto.

 

 

1.2

“Beneficiary” means the person or persons (and their heirs) designated as
Beneficiary in the Director’s Joinder Agreement to whom the deceased Director’s
benefits are payable. If no Beneficiary is so designated, then the Director’s
Spouse, if living, will be deemed the Beneficiary. If the Director’s Spouse is
not living, then the Children of the Director will be deemed the Beneficiaries
and will take on a per stirpes basis. If there are no living Children, then the
Estate of the Director will be deemed the Beneficiary.

 

 

1.3

“Benefit Age” shall be the birthday on which the Director becomes eligible to
receive benefits under the Plan. Such birthday shall be designated in the
Director’s Joinder Agreement.

 

 

1.4

“Benefit Eligibility Date” shall be the date on which a Director is entitled to
receive his Deferred Compensation Benefit. It shall be the 1st day of the month
coincident with or next following the month in which the Director attains the
Benefit Age designated in his Joinder Agreement.

 

 

1.5

“Cause” means personal dishonesty, willful misconduct, willful malfeasance,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, regulation (other
than. traffic violations or similar offenses), or final cease-and-desist order,
material breach of any provision of this Agreement, or gross negligence in
matters of material importance to the Bank.

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1.6

“Children” means the Director’s children, both natural and adopted, then living
at the time payments are due the Children under this Agreement.

 

 

1.7

“Deferral Period” means the period of months designated in the Director’s
Joinder Agreement during which the Director shall defer current Board fees. The
Deferral Period shall commence on the date designated in the Director’s Joinder
Agreement.

 

 

1.8

“Deferred Compensation Benefit” means the annuitized value of the Director’s
Elective Contribution Account, measured as of the Director’s Benefit Age,
payable in monthly installments throughout the Payout Period and commencing on
the Director’s Benefit Eligibility Date.

 

 

1.9

“Disability Benefit” means the benefit annuity payable to the Director following
a determination, in accordance with Subsection 4.2, that he is no longer able,
properly and satisfactorily, to perform his duties as Director.

 

 

1.10

“Effective Date” of this Agreement shall be September 1, 1993.

 

 

1.11

“Elective Contribution” shall refer to any bookkeeping entry required to record
a Director’s voluntary monthly pre-tax deferral which shall be made in
accordance with the Director’s Joinder Agreement.

 

 

1.12

“Elective Contribution Account” shall be represented by the bookkeeping entries
required to record a Director’s Elective Contributions plus accrued interest)
equal to the Interest Factor, earned to date on such amounts. However, neither
the existence of such bookkeeping entries nor the Elective Contribution Account
itself shall be deemed to create either a trust of any kind, or a fiduciary
relationship between the Bank; and the Director or any Beneficiary.

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1.13

“Estate” means the estate of the Director.

 

 

1.14

 “Interest Factor” means monthly compounding at Ten (10%) Percent per annum.
Interest crediting for fees earned and “deferred during any January, February-
or March shall commence on the following April 1st. Interest crediting for fees
earned and deferred during any April, May or June shall commence on the
following July 1st. Interest crediting for fees earned and deferred during any
July, August or September shall commence on the following October” 1st. Interest
crediting for fees earned and deferred during any October, November or December
shall commence on the following January 1st.

 

 

1.15

“Payout Period” means the time frame during which certain benefits payable
hereunder shall be distributed”  Payments shall be made in equal monthly
installments commencing on the first day of the month coincident with or next
following the occurrence of the event which triggers distribution and continuing
for a period of months, as designated in the Director’s Joinder Agreement.

 

 

1.16

“Projected Deferral” is an estimate, determined upon execution of a Joinder
Agreement, of the total amount to be deferred by the Director during his
Deferral Period, and so designated in the Director’s Joinder Agreement.

 

 

1.17

“Spouse” means the individual to whom the Director is legally married at the
time of the Director’s death.

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1.18

“Survivor’s Benefit” means an annuity stream payable to the Beneficiary in
monthly installments throughout the Payout Period, equal to the amount
designated in the Joinder Agreement, and subject to Subsection 5.1.

SECTION II

DEFERRED COMPENSATION

          Commencing on the Effective Date, and continuing through the end of
the Deferral Period, the Director and the Bank agree that the Director shall
defer into his Elective Contribution Account up to one hundred (100%) percent of
the monthly fees that the Director would otherwise be entitled to receive from
the Bank for each month of the Deferral Period, with the total deferral during
the term of the Deferral Period not to exceed the Director’s Projected Deferral.
The specific amount of the Director’s monthly Deferred Compensation shall be
designated in the Director’s Joinder Agreement and shall apply only to
compensation attributable to services not yet performed.

SECTION III

ADJUSTMENT OF DEFERRAL AMOUNT

          Deferral of the specific amount of fees designated in the Director’s
Joinder Agreement shall continue in effect pursuant to the terms of this
Agreement unless and until the Director amends his Joinder Agreement by filing
with the Bank and the Administrator a Notice of Adjustment of Deferral Amount
(Exhibit B of the Joinder Agreement). If the Bank increases the amount of fees
earned by the Director, the Director can include such additional amounts in his
monthly deferral, provided approval from the Board of Directors is obtained, by
filing a Notice of Adjustment of Deferral Amount. A Notice of Adjustment of
Deferral Amount shall be effective if filed with the Bank and the Administrator,
at least thirty (30) days prior to any January 1st during the Director’s
Deferral Period. Such notice of Adjustment of Deferral Amount shall be effective
commencing with the January 1st following its filing and shall be applicable
only to compensation attributable to services not yet performed by the Director.

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SECTION IV

RETIREMENT BENEFIT

4.1

Retirement Benefit.  Subject to Subsection 5.1 of this Agreement, the Bank
agrees to pay the Director the Deferred Compensation Benefit commencing on the
Director’s Benefit Eligibility Date. Such payments will be made over the term of
the Payout Period. In the event of the Director’s death after commencement of
the Deferred Compensation Benefit, but prior to completion of all such payments
due and owing hereunder, the Bank shall pay to the Director’s Beneficiary a
continuation of the annuity for the remainder of the Payout Period.

 

 

4.2

Disability Benefit.  Notwithstanding any other provision hereof, if requested by
the Director and approved by the Board, the Director shall be entitled to
receive the Disability Benefit hereunder, in any case in which it is determined
by a duly licensed physician selected by the Bank, that the Director is no
longer able, properly and satisfactorily, to perform his regular duties as
Director, because of ill health, accident, disability or general inability due
to age.  If the Director’s service is terminated pursuant to this paragraph and
Board approval is obtained, the Director may elect to begin receiving the
Disability Benefit annuity in lieu of an Deferred Compensation Benefit which is
not available prior to the Director’s Benefit Eligibility Date.  The annuity
shall begin not more than thirty (30) days following the above-mentioned
disability determination.  The amount of the monthly benefit shall be the
annuitized value of the Director’s Elective Contribution Account, measured upon
such determination and payable over the Payout Period.  The Interest Factor
shall be used to annuitize the Elective Contribution Account.  In the event the
Director dies while receiving payments pursuant to this Subsection, or after
becoming eligible for such payments but before the actual commencement of such
payments, his Beneficiary shall be entitled to receive those benefits provided
for in Subsection 5.1(a) and the Disability Benefits provided fro in this
Subsection shall terminate on the Director’s death.

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4.3

Removal For Cause.  In the event the Director is removed for Cause at any time
prior to reaching his Benefit Age, he shall be entitled to receive the balance
of his Elective Contribution Account, measured as of the date of removal. Such
amount shall be paid in a lump sum within thirty (30) days of the Director’s
date of removal. All other benefits provided for the Director or his Beneficiary
under this agreement shall be forfeited and the Agreement shall become null and
void.

SECTION V

DEATH BENEFITS

5.1

Death Benefit Prior to Commencement of Deferred Compensation Benefit.  In the
event of the Director’s death prior to commencement of the Deferred Compensation
Benefit, the Bank shall pay the. Director’s Beneficiary a monthly amount for the
Payout Period, commencing within thirty (30) days of the Director’s death. The
amount of such benefit payments shall be determined as follows:

 

 

 

(a)

In the event death occurs (i) while the Director is receiving the Disability
Benefit provided for in Subsection 4.2, or (ii) after the Director has become
eligible for such Disability Benefit payments but before such payments have
commenced, the Director’s Beneficiary shall be entitled to receive a
continuation of the Disability Benefit annuity (computed in accordance, with
Subsection 4.2), reduced by the number of months Disability Benefit payments
were made to the Director.

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(b)

In the event death occurs (i) while the Director is in the service of the Bank,
or (ii) following any voluntary or involuntary termination other than
termination other than removal for Cause, the Director’s Beneficiary shall be
paid the monthly benefit which can be provided by annuitizing the Director’s
Elective Contribution Account over the Payout Period.

 

 

 

5.2

Additional Death Benefit - Burial Expense.  In addition to the above-described
death benefits, upon the Director’s death, the Director’s Beneficiary shall be
entitled to receive a one-time lump sum death benefit in the amount of Ten
Thousand ($10,000.00) Dollars.

SECTION VI

BENEFICIARY DESIGNATION

          The Director shall make an initial designation of primary and
secondary beneficiaries upon execution of his Joinder Agreement and shall have
the right to change such designation, at any subsequent time, by submitting to
the Administrator in substantially the form attached as Exhibit A to the Joinder
Agreement, a written designation of primary and secondary Beneficiaries. Any
Beneficiary designation made subsequent to execution of the Joinder Agreement
shall become effective only when receipt thereof is acknowledged in writing by
the Administrator.

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SECTION VII

DIRECTOR’S RIGHT TO ASSETS

          The rights of the Director, any Beneficiary, or any other person
claiming through the Director under this Agreement, shall be solely those of an
unsecured general creditor of the Bank. The Director, the Beneficiary, or any
other person claiming through the Director, shall only have the right to receive
from the Bank those payments so specified under this Agreement. The Director
agrees that he, his Beneficiary, or any other person claiming through him shall
have no rights or interests whatsoever in any asset of the Bank, including any
insurance policies or contracts which the Bank may possess or obtain to
informally fund this Agreement. Any asset used or acquired by the Bank in
connection with the liabilities it has assumed under this Agreement, unless
expressly provided herein, shall not be deemed to be held under any trust for
the benefit of the Director or his Beneficiaries, nor shall any asset be
considered security for the performance of the obligations of the Bank. Any such
asset shall be and remain, a general, unpledged, and unrestricted asset of the
Bank.

SECTION VIII

RESTRICTIONS UPON FUNDING

          The Bank shall have no obligation to set aside, earmark or entrust any
fund or money with which to pay its obligations under this Agreement. The
Director, his Beneficiaries or any successor in interest to him shall be and
remain simply a general unsecured creditor of the Bank in the same manner as any
other creditor having a general claim for matured and unpaid compensation.  The
Bank reserves the absolute right in its sole discretion to either purchase
assets to meet its obligations undertaken by this Agreement or to refrain from
the same and to determine the extent, nature, and method of any such asset
purchases. Should the Bank decide to purchase assets such as life insurance,
mutual funds, disability policies or annuities, the Bank reserves the absolute
right, in its sole discretion, to terminate such assets at any time, in whole or
in part.  At no time shall the Director be deemed to have any lien, right, title
or interest in or to any specific investment or to any assets of the Bank. If
the Bank elects to invest in a life insurance, disability or annuity policy upon
the life of the Director, then the Director shall assist the Bank by freely
submitting to a physical examination and by supplying such additional
information necessary to obtain such insurance or annuities.

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SECTION IX

ALIENABILITY AND ASSIGNMENT PROHIBITION

          Neither the Director nor any Beneficiary under this Agreement shall
have any power or right to transfer, assign, anticipate, hypothecate, mortgage,
commute, modify or otherwise encumber in advance any of the benefits payable
hereunder, nor shall any of said benefits be subject to seizure for the payment
of any debts, judgments, alimony or separate maintenance owed by the Director or
his Beneficiary, nor be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise. In the event the Director or any
Beneficiary attempts assignment, communication, hypothecation, transfer or
disposal of the benefits hereunder, the Bank’s liabilities shall forthwith cease
and terminate.

SECTION X

ACT PROVISIONS

10.1

Named Fiduciary and Administrator.  Financial Institution Consulting
Corporation, a Tennessee Corporation (“FICC”) shall be the Named Fiduciary and
Administrator (the “Administrator”) of this Agreement. As Administrator, FICC
shall be responsible for the management, control and administration of the
Agreement as established herein. The Administrator may delegate to others
certain aspects of the management and operational responsibilities of the
Agreement, including the employment of advisors and the delegation of
ministerial duties to qualified individuals.

 

 

10.2

Claims Procedure and Arbitration.  In the event that benefits under this
Agreement are not paid to the Director (or to his Beneficiary in the case of the
Director’s death) and such claimants feel they are entitled to receive such
benefits, then a written claim must be made to the Administrator within sixty
(60) days from the date payments are refused. The Bank and its Board shall
review the written claim and, if the claim is denied, in whole or in part, they
shall provide in writing, within ninety (90) days of receipt of such claim,
their specific reasons for such denial, reference to the provisions of this
Agreement or the Joinder Agreement upon which the denial is based, and any
additional material or information necessary to perfect the claim. Such writing
by the Bank and its Board shall further indicate the additional steps which must
be undertaken by claimants if an additional review of the claim denial is
desired.

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If c1aimants desire a second review, they shall notify the Administrator in
writing within sixty (60) days of the first claim denial. Claimants may review
this Agreement, the Joinder Agreement or any documents relating thereto and
submit any issues; and comments, in writing, they may feel appropriate. In its
sole discretion, the Administrator shall then review the second claim and
provide a written decision within sixty (60) pays of receipt of such claim. This
decision shall state the specific reasons for the decision and shall include
reference to specific provisions of this Agreement or the Joinder Agreement upon
which the decision is based.

 

 

 

If claimants continue to dispute the benefit denial based upon completed
performance of this Agreement and the Joinder Agreement or the meaning and
effect of the terms and conditions thereof, then c1aimants may submit the
dispute to a Board of Arbitration for final arbitration. Said Board shall
consist of one member selected by the claimant, one member selected by the Bank,
and the third member selected by the first two members.

 

 

 

The Board shall operate under any generally recognized set of arbitration rules.
The parties hereto agree that they, their heirs, personal representatives,
successors and assigns shall be bound by the decision of such Board with respect
to any controversy properly submitted to it for determination.

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SECTION XI

MISCELLANEOUS

11.1     No Effect on Directorship Rights.  Nothing contained herein will confer
upon the Director the right to be retained in the service of the Bank nor limit
the right of the Bank to discharge or otherwise deal with the Director without
regard to the existence of the Agreement. Pursuant to 12 C.F.R. § 563.39(b), the
following conditions shall apply to this Agreement:

 

(1)

The Bank’s Board of Directors may remove the Director at any time, but any
removal by the Bank’s Board of Directors other than removal for Cause shall not
prejudice the Director’s vested right to compensation or other benefits under
the contract. As provided in Section 4.3, the Director shall be paid the balance
of his Elective Contribution Account in a lump sum within thirty (30) days of
his removal in the event he is removed for Cause. He shall have no right to
receive additional compensation or other benefits for any period after removal
for Cause.

 

 

 

 

(2)

If the Director is suspended and/or temporarily prohibited from participating in
the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or
(g)(I) of the Federal Deposit Insurance Act (12 U.S.C.1818(e)(3) and (g)(l)) the
Bank’s obligations under the contract shall be suspended (except vested rights)
as of the date of termination of service unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion (i) pay the Director all or part of the compensation withheld while
its contract obligations were suspended and (ii) reinstate (in whole or’ in
part) any of its obligations which were suspended.

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(3)

If the Director is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
(g)(l) of the Federal Deposit Insurance Act (12 U.S.C.. 1818(e)(4) or (g)(l)),
all non-vested obligations of the Bank under the contract shall terminate as of
the effective date of the order, but vested rights of the Director shall not be
affected.

 

 

 

 

(4)

If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act), all non-vested obligations under the contract shall terminate as
of the date of default.

 

 

 

 

(5)

All non-vested obligations under the contract shall be terminated, except to the
extent determined that continuation of the contract is necessary for the
continued operation of the Bank:

 

(i)

by the Director or his designee at the time the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
§ 13(c} of the Federal Deposit Insurance Act; or

 

 

 

 

(ii)

by the Director or his designee, at the time the Director or his designee
approves a supervisory merger to resolve problems related to operation of the.
Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition.

 

          Any rights of the parties that have already vested, (i.e., the balance
of his Elective Contribution Account), however, shall not be affected by such
action.

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11.2

State Law.     The Agreement is established under, and will be construed
according to, the laws of the State of Indiana. .

 

 

11.3

Severability.     In the event that any of the provisions of this Agreement or
portion thereof, are held to be inoperative or invalid by any court of competent
jurisdiction, then: (1) insofar as is reasonable, effect will be given to the
intent manifested in the provisions held invalid or inoperative, and (2) the
validity and enforceability of the remaining provisions will not be affected
thereby.

 

 

11.4

Incapacity of Recipient. In the event the Director is declared incompetent and a
conservator or other person legally charged with the care of his person or,
Estate is appointed, any benefits under the Agreement to which such Director is
entitled shall be paid to such conservator or other person legally charged with
the care of his person or Estate. . Except as provided above in this paragraph,
when the Bank’s Board of Directors, in its sole discretion, determines that the
Director is unable to manage his financial affairs, the Board may direct the
Bank to make distributions to any person for the benefit of the Director.

 

 

11.5

Recovery of Estate Taxes.  If the Director’s gross estate for federal estate tax
purposes includes any amount determined by reference to and on account of this
Agreement, and if the Beneficiary is other than the Director’s estate, then the
Director’s estate shall be entitled to recover from the Beneficiary receiving
such benefit under the terms of the agreement, an amount by which the total
estate tax due by Director’s estate, exceeds the total estate tax which would
have been payable if the value of such benefit had not been included in the
Director’s gross estate. If there is more than one person receiving such
benefit, the right of recovery shall be against each such person. In the event
the Beneficiary has a liability hereunder, the Beneficiary may petition the Bank
for a lump sum payment in an amount not to exceed the Beneficiary’s liability
hereunder.

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11.6

Unclaimed Benefit.  The Director shall keep the Bank informed of his current
address and the current address of his Beneficiaries. If the location of the
Director is not made known to the Bank within three (3) years after the date on
which any payment of the Deferred Compensation Benefit may first be made,
payment may be made as though the Director had died at the end of the three (3)
year period. If, within one (1) additional year after such three (3) year period
has elapsed, or, within three (3) years after the actual death of the Director,
whichever occurs first, the Bank is unable to locate any Beneficiary of the
Director, the Bank may fully discharge its obligation by payment to the Estate.

 

 

11. 7

Limitations on Liability.  Notwithstanding any of the preceding provisions of
the Agreement, neither the Bank, nor any individual acting as an employee or
agent of the Bank, or as a member of the Board of Directors shall be liable to
the Director or any other person for any claim, loss, liability or expense
incurred in connection with the Agreement.

 

 

11.8

Gender.  Whenever in this Agreement words are used in the masculine or neuter,
gender, they shall be read and construed as in the masculine, feminine or neuter
gender, whenever they should so apply.

 

 

11.9

Affect on Other Corporate Benefit Agreements.  Nothing contained in this
Agreement shall affect the right of the Director to participate in or be covered
by any qualified or non.-qualified pension, profit sharing group, bonus or other
supplemental compensation or fringe benefit agreement constituting a part of the
Bank’s existing or future compensation - structure.

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11.10

Suicide.  Notwithstanding anything to the contrary in this Agreement, the
benefits otherwise provided herein shall not be payable if the Director’s death
results from suicide, whether sane or insane, within twenty-six (26) months
after the execution of this Agreement. If the Director dies during this
twenty-six (26) month period due t9 suicide, the balance of his Elective
Contribution Account will be paid to the Director’s Beneficiary in a single
payment. Payment is to be made within thirty (30) days after the Director’s
death is declared a suicide by competent legal authority. Credit shall be given
to the Bank for payments made prior to determination of suicide.

 

 

11.11

Headings. Headings and sub-headings in this Agreement are inserted for reference
and convenience only and shall not be deemed a part of this Agreement.

SECTION XII

AMENDMENT/REVOCATION

          This Agreement shall not be amended, modified or revoked at any time,
in whole or part, without the mutual written consent of the Director and the
Bank, and such mutual consent shall be required even if the Director is no
longer serving the Bank as a member of the Board.

SECTION XIII

EXECUTION

13.1

This Agreement sets forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby, and any previous agreements or
understandings between the parties hereto regarding the subject matter hereof
are merged into and superseded by this Agreement.

 

 

13.2

This Agreement shall be executed in triplicate, each copy of which, when so
executed and delivered, shall be an original, but all three copies shall
together constitute one and the same instrument.

          IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed:
on this 1st day of September, 1993.

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FIRST
AMENDMENT
TO
DIRECTOR DEFERRED COMPENSATION MASTER AGREEMENT
OF
MUTUAL FEDERAL SAVINGS BANK

This First Amendment to the Director Deferred Compensation Master Agreement
(“the Agreement”) of Mutual Federal Savings Bank (“the Bank”), dated November
24, 1993, if for the purpose of amending the Agreement as follows:

Section 5.1 shall be replaced with the following language.

5.1

Death Benefit Prior to Commencement of Deferred Compensation Benefit. In the
event of the Director’s death prior to commencement of the Deferred Compensation
Benefit, the Bank shall pay the Director’s Beneficiary a monthly amount for the
Payout Period, commencing within thirty (30) days of the Director’s death. The
amount of such benefit payments shall be determined as follows:

 

 

 

(a)

In the event death occurs (i) while the Director is receiving the Disability
Benefit provided for in Subsection 4.2, or (ll) after the Director has become
eligible for such Disability Benefit payments but before such payments have
commenced, the Director’s Beneficiary shall be entitled to receive the
Survivor’s Benefit for the Payout Period, reduced by the number of months
Disability Benefit payments were made to the Director.

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If the total dollar amount of Disability Benefit payments received by the
Director under Subsection 4.2 is less than the total dollar amount of payments
that would have been received had the Survivor’s Benefit been paid in lieu of
the Disability Benefit during the Director’s life, the Bank shall pay the
Director’s Beneficiary a lump sum payment for the difference. This lump sum
payment shall be made within thirty (30) days of the Director’s death.

 

 

 

 

(b)

In the event death occurs while the Director is (i) in the service of the Bank,
(ii) deferring fees pursuant to Section IT and (iii) prior to any reduction or
discontinuance, via an effective filing of a Notice of Adjustment of Deferral
Amount, in the level of deferrals reflected in the Director’s initial Joinder
Agreement, for any period during the Deferral Period, the Director’s Beneficiary
shall be paid the Survivor’s Benefit.

 

 

 

 

(c)

In the event death occurs while the Director is (i) in the service of the Bank,
(ii) deferring fees pursuant to Section’ IT and (iii) after any reduction or
discontinuance, via an effective filing of a Notice of Adjustment of Deferral
Amount,. in the level of deferrals reflected in the Director’s initial Joinder
Agreement, for any period during the Deferral Period, the Director’s Beneficiary
shall be paid a reduced Survivor’s Benefit, such amount being determined by
multiplying the monthly payment available as a Survivor’s Benefit by a traction,
the numerator of which is equal to the total Board fees actually deferred’ by
the Director as of his death and the denominator of which is equal to the amount
of board fees that would have been deferred as of his death, if no reduction or
discontinuance in the level of deferrals had occurred at anytime following
execution of the, Joinder Agreement and during the Deferral Period.

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(d)

In the event the Director completes less than one hundred (100%) percent of his
Projected Deferrals due to any. voluntary or involuntary termination other than
removal for Cause, the Director’s Beneficiary shall be paid a reduced Survivor’s
Benefit, such amount being determined by multiplying the monthly payment
available as a Survivor’s Benefit by a fraction, the numerator of which is equal
to the total Board fees actually deferred by the Director and the denominator of
which is equal to the Director’s Projected Deferral.

          IN WITNESS WHEREOF, the Bank: has caused this First Amendment to be
executed in triplicate on this 24th day of November, 1993.

Mutual Federal Savings Bank:

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SECOND AMENDMENT
TO THE
DIRECTOR DEFERRED COMPENSATION MASTER AGREEl\1ENT
OF
MUTUAL FEDERAL SAVINGS BANK
MUNCIE, INDIANA

This Second Amendment (“Amendment”), dated the 18th day of December, 1996
 hereby amends the Director Deferred Compensation Master Agreement (“Agreement”)
of Mutual Federal Savings Bank (“Bank”), dated the 1st day of September, 1993,
as amended November 24, 1993, as follows:

The following language shall replace Subsection 1.8 of the Agreement:

1.8

“Deferred Compensation Benefit” means the annuitized value (using the Interest
Factor) of the Director’s Elective Contribution Account, measured as of the
Director’s Benefit Age, payable in monthly installments throughout the Payout
Period, and commencing on the Director’s Benefit Eligibility Date.

The following language shall replace Section ill of the Agreement:

SECTION III
ADJUSTMENT OF DEFERRAL AMOUNT

          Deferral of the specific amount of fees designated in the Director’s
Joinder Agreement shall continue in effect pursuant to the terms of this
Agreement unless and until the Director amends his Joinder Agreement by filing
with the Bank and the Administrator a Notice of Adjustment of Deferral Amount
(Exhibit B of the Joinder Agreement). If the Bank increases the amount of fees
earned by the Director, the Director can include such additional amounts in his
quarterly referral, provided approval from the Board of Directors is obtained,
by filing a: Notice effective if filed with the Bank and the Administrator, at
least ten (10) days prior to any January 1st during the Director’s Deferral
Period. Such notice of Adjustment of Deferral Amount shall be effective
commencing with the January 1st following its filing and shall be applicable
only to compensation attributable to services not yet performed by the Director.

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The following language shall replace Subsection 5.1 of the Agreement:

5.1

Death Benefit Prior to Commencement of Deferred Compensation Benefit.  In the
event of the Director’s death prior to commencement of the Deferred Compensation
Benefit, the Bank shall pay the Director’s Beneficiary a monthly amount for the
Payout Period, commencing within thirty (30) days of the Director’s death. The
amount of such benefit payment shall be determined as follows:

 

 

 

(a)

In the event death occurs (i) while the Director is receiving the Disability
Benefit provided for in Subsection 4.2, or (ii) after the Director has become
eligible for such Disability Benefit payments but before such payments have
commenced, the Director’s Beneficiary shall be entitled to receive a
continuation of the Disability Benefit annuity (computed in accordance with
Subsection 4.2), reduced by the number of months Disability Benefit payments
were made to the Director.

 

 

 

 

(b)

In the event death occurs while the Director is (i) in the service of the Bank,
(ii) deferring fees pursuant to Section IT and (Iii) prior to any reduction or
discontinuance, via an effective filing of a Notice of Adjustment of Deferral
Amount, in the level of deferrals reflected in the Director’s initial Joinder
Agreement, for any period during the Deferral Period, the Director’s Beneficiary
shall be paid the greater of: (i) the Survivor’s Benefit, or (ii) the annuitized
value (using the Interest Factor) of the Director’s Elective Contribution
Account, measured as of the date of the Director’s death.

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(c)

In the event death occurs while the Director is (i) in the service of the Bank,
(ii) deferring fees pursuant to Section IT and (ill) ~ any reduction or
discontinuance, via an effective filing of a Notice of Adjustment of Deferral
Amount, in the level of deferrals reflected in the Director’s initial Joinder
Agreement, for any period during the Deferral Period, the Director’s Beneficiary
shall be paid the greater of: (i) a reduced Survivor’s Benefit, such amount
being determined by multiplying the monthly payment available as a Survivor’s
Benefit by a traction, the numerator of which is equal to the total Board fees
actually deferred by the Director as of his death and the denominator of which
is equal to the amount of Board fees that would have been deferred as of his
death, if no reduction or discontinuance in the level of deferrals had occurred
at any time following execution of the Joinder Agreement and during the Deferral
Period, or (ii) the annuitized value (using the Interest Factor) of the
Director’s Elective Contribution Account, measured as of the date of the
Director’s death.

 

 

 

 

(d)

In the event the Director completes less than one hundred percent (100%) of his
Projected Deferrals due to any voluntary or involuntary termination other than
removal for Cause, the Director’s Beneficiary shall be paid the greater of: (i)
a reduced Survivor’s Benefit, such amount being determined by multiplying the
monthly payment available as a Survivor’s Benefit by a fraction, the numerator
of which is equal to the total Board fees actually deferred by the Director and
the denominator of which is equal to the Director’s Projected Deferral, or (ii)
the annuitized value (using the Interest Factor) of the Director’s Elective
Contribution Account, measured as of the date of termination of the Director’s
service.

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The foI1owing Section XIII is added to the Agreement:

SECTION XIII
ESTABLISHMENT OF RABBI TRUST

          The bank shall establish a rabbi trust into which the Bank shall
contribute assets which shall be held, managed and invested, pursuant to the
agreement which establishes such rabbi trust (the “rabbi trust agreement “). The
Bank intends to make a contribution or contributions to the rabbi trust to
provide the Bank with a source of funds to assist it in meeting obligations
under this Agreement. The trust assets shall be subject to the claims of the
Bank’s creditors in the event of the Bank’s insolvency as defined in the rabbi
trust agreement, until the trust assets are paid to the Director and his
Beneficiary in such manner and at such times as specified in this Agreement.
Contribution(s) to the rabbi trust shall be made in accordance with the rabbi
trust agreement.

          IN WITNESS WHEREOF, the Bank has caused this Amendment to be executed
in triplicate, the day and year written here below:

          In accordance with Section XII of the Agreement, the following
Directors hereby give their written consent to such Amendment:

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