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                                                                    EXHIBIT 10.3

  DIRECTORS' RETIREMENT AGREEMENT BETWEEN CENTRAL FEDERAL CORPORATION, CENTRAL
                      FEDERAL BANK AND WILLIAM R. WILLIAMS

RECITALS:

A.   William R. Williams, an Ohio resident ("MR. WILLIAMS"), is a member of the
     board of directors of Central Federal Corporation, a Delaware corporation
     (the "CORPORATION").

B.   Mr. Williams is a member of the board of directors of Central Federal Bank,
     a federally chartered savings association (the "BANK").

C.   Mr. Williams has already retired as an officer of the Corporation and the
     Bank.

D.   Mr. Williams desires to retire also from his monthly duties on the boards
     of directors of the Corporation and the Bank.

E.   Mr. Williams is willing to make himself available to the Corporation and
     the Bank on a consulting basis.

NOW, THEREFORE, in consideration of the covenants and terms contained in this
Agreement, the Corporation, the Bank and Mr. Williams agree as follows:

1. Payment. The Corporation and the Bank agree, in consideration of the terms in
Sections 2 and 3, below, that the Bank will pay Mr. Williams a sum equal to
$10,000 for the remainder of the year 2003 (payable January 5, 2004), $20,000
for each of the years 2004 (payable January 5, 2004) and 2005 (payable January
5, 2005), and $6,667 for the year 2006 (payable January 5, 2006). If Mr.
Williams dies before any payments described in this Section are paid, the unpaid
amounts will be paid to his spouse, if she survives him, at the times Mr.
Williams would have received payments. Mr. Williams or his widow, as the case
may be, will be responsible for the payment of all taxes relating to payments
made under this Agreement.

2. Release of Claims. Mr. Williams agrees that in consideration of payments made
to him, he will not institute any action or actions, cause or causes of action
(in law or in equity), suits, debts, liens, claims, or demands (known and
unknown) in state or federal court or with any state, federal or local
governmental agency against the Corporation or the Bank in connection with his
resignation from the Corporation's and the Bank's boards of directors. However,
this release will not preclude Mr. Williams from enforcing the terms of this
Agreement or, subject to Section 5, of the Supplemental Executive Retirement
Plan executed as of April 1, 2003 by the parties to this Agreement (the "SERA").

     The Corporation and the Bank agree, in consideration of the services to be
performed under and of the covenants and terms contained in this Agreement, that
neither of them will institute any action or actions, cause or causes of action
(in law or in equity), suits, debts, liens, claims, or demands (known and
unknown) in state or federal court or with any state, federal or local
governmental agency against Mr. Williams or any or all of his heirs,
beneficiaries or assigns in connection with his activities on the board of
directors of the Corporation or the board of directors of the Bank.

3. Understanding of Availability to the Boards of Directors. Each of the parties
to this Agreement understands and agrees that in further consideration of
payments made to him, Mr. Williams will continue to make himself available to
the boards of directors of the Corporation and the Bank for advice and


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consultation on an as-needed basis. So long as Mr. Williams continues to agree
to provide advice and consulting services to the boards of directors of the
Corporation and the Bank, (a) he will continue to vest in, and maintain the
rights to, all stock options and stock awards granted to him under the
Corporation's stock-based benefit plan, (b) he will be allowed to exercise all
stock options anytime after they become vested and until close of business July
14, 2009 and to receive all stock awards when they become vested, and (c) these
exercise rights will not be affected by his resignation from the boards of
directors of either (or both) of the Corporation and/or the Bank. If Mr.
Williams dies before the options or stock awards vest, and if his wife survives
him, then the unvested options and stock awards will continue to vest as
provided in this Section, and his surviving spouse may exercise the options and
receive the stock awards any time after they become vested until her death or
the close of business on July 14, 2009, whichever is earlier.

4. Arbitration of Claims. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators sitting in a location in Ohio
selected by Mr. Williams, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.

5. Complete Agreement. This Agreement shall represent the complete agreement
among the Corporation, the Bank, and Mr. Williams concerning the subject matter
hereof and supersedes all prior written or oral agreements or understandings
other than the SERA. To the extent that there may be any conflict between the
SERA and this Agreement or the equity awards dated July 15, 1999 between the
parties to this Agreement and this Agreement, the provisions of this Agreement
shall govern. No attempted modification or waiver of any of the provisions of
this Agreement shall be binding on either party unless made in writing and
signed by Mr. Williams, the Corporation, and the Bank or their respective
successors.

6. Applicable Law. This Agreement shall be governed by and construed under the
laws of the State of Ohio, unless pre-empted by federal law.

IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement as of September 18, 2003.

Attest:                                         CENTRAL FEDERAL CORPORATION

/s/ Laura L. Martin                             By: /s/ David C. Vernon
----------------------------------                  ----------------------------
Name in Print:                                  DAVID C. VERNON
Laura L. Martin                                 Chairman, President & CEO

[signatures continue on following page]


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Attest:                                         CENTRAL FEDERAL BANK

/s/ Laura L. Martin                             By: /s/ David C. Vernon
----------------------------------                  ----------------------------
Name in Print:                                  DAVID C. VERNON
Laura L. Martin                                 Chairman, President & CEO

Witness:

/s/ Elaine M. Willaims                          /s/ William R. Williams
----------------------------------              --------------------------------
Name in Print:                                  WILLIAM R. WILLIAMS
Elaine M. Willaims


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