MUTUALBANK

Executive Variable Compensation Plan

INTRODUCTION

MutualBank recognizes that the achievement of strategies and goals will
determine organizational excellence.  The responsibility for this task lies
directly with the Executives of MutualBank.  This Executive Variable
Compensation Plan is intended to incent all Executives to achieve desired
earnings performance.  The achievement of desired earnings will require
strategic thinking, dedicated effort, a commitment to long-term success and a
sincere desire to achieve through teamwork. 

GOALS

·  
Ensure all Executive’s activities are consistent with the strategic performance
goals of MutualBank.

·  
Achieve the earnings objective set forth in the MutualBank Strategic Plan.

·  
Enhance the level of teamwork throughout the Bank.

·  
Reward success, encouraging individual commitment to goal achievement.

·  
Maintain competitive pay practices for all Executives.

All Executive Variable Compensation Plan objectives are designed to stretch the
capabilities of participants.  The achievement of these goals will have
significant impact on the success of MutualBank.

ADMINISTRATIVE GUIDELINES

ESTABLISHMENT AND ADMINISTRATION:

The Board of Directors establishes this Executive Variable Compensation Plan
(Plan).  This Plan is administered by the Compensation Committee, and the Board
will provide oversight.  The Board expressly reserves the right to modify,
repeal or discontinue this Plan at any time.

EFFECTIVE DATE OF PLAN:

This Plan shall remain in effect until modified, repealed or discontinued.  The
Plan is implemented for a performance period of each fiscal year.  

ANNUAL GOALS AND PERFORMANCE MEASUREMENT

For each performance period, the Compensation Committee establishes goals for
the Bank to attain specific Earnings Per Share (EPS) objectives during that
period.  It also establishes the range of potential payments to participants
calculated as a percentage of annual salary, depending on the EPS goal met
during each performance period.  Each participant’s payment will be determined
by the Bank’s achievement of the EPS objectives established by the Compensation
Committee and will be specific to the individual.

 
 
 
 

QUALIFICATION FOR VARIABLE COMPENSATION PAYMENT:

Participants must be employed at the end of each performance period in order to
receive any variable compensation payment under the Plan.  Participation in this
Plan does not constitute a contract of employment.  Any participant terminated
for cause or resigning for cause prior to payment of variable compensation will
be ineligible.  A participant with a performance rating of below expectations
for a period of more than sixty consecutive days will not qualify for variable
compensation payment for that period of time.  

VARIABLE COMPENSATION PAYMENT CALCULATION:

A participant's variable compensation payment will be calculated based on a
percentage of the total of bi-weekly salary payments only.  

RETIREMENT/ABSENCE/DEATH:

In the event of retirement or death, a participant's variable compensation
payment will be calculated based upon the amount of time actively worked during
the performance period.  If a participant is absent from work for a period of
more than sixty consecutive days, payment will be calculated based upon the
amount of time actively worked during the performance period.

VARIABLE COMPENSATION DISTRIBUTION:

Variable compensation payments shall be paid as soon as may be feasible after
the close of each fiscal year.  All payments are subject to income tax
withholdings and are treated as "ordinary income" to each participant, and will
be reported as income in the year the incentive payment is received.

METHOD OF VARIABLE COMPENSATION PAYMENT:

All payments will be paid as a deposit into a participant's direct deposit
payroll account.  There are no provisions in this Plan for payments in property
or equity of the Bank.

CLAWBACK PROVISION:

If in any event, variable compensation is paid based upon performance
measurements that are subsequently deemed to be inaccurate due to misstatement
or misrepresentation, all payments made based upon that error are to be repaid
to the Company.