mfb_8k0101ex102.htm


    

      Exhibit
        10.2

       

       

       

      EMPLOYMENT
        AGREEMENT

       

      THIS
        EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this 7th
        day
        of January, 2008, by and between Mutual Federal Savings Bank (hereinafter
        referred to as the "Bank"), MutualFirst
        Financial, Inc. (the "Company") and Charles J. Viater (the
        "Employee").

       

      WHEREAS,
        the Employee is currently serving as the President and Chief Executive Officer
        of MFB Corp. and MFB Financial; and

       

      WHEREAS,
        it is proposed that the Company and MutualFirst Acquisition Corp., a newly
        formed wholly owned subsidiary of the Company, enter into an Agreement and
        Plan
        of Merger (together  with the attachments and exhibits thereto, the
        "Merger Agreement") with MFB Corp., pursuant to which, among other things,
        (i)
        MFB Corp. will merge with and into MutualFirst Acquisition Corp., (the "Merger")
        and (ii) MFB Financial, a wholly owned subsidiary of MFB Corp., will merge
        with
        and into the Bank (the "Bank Merger"); and

       

      WHEREAS,
        the Board of Directors of the Bank believes it is in the best interests of
        the
        Bank to enter into this Agreement in connection with the Bank Merger with
        the
        Employee in order to assure continuity of management of the Bank and to
        reinforce and encourage the continued attention and dedication of the Employee;
        and

       

      WHEREAS,
        the Board of Directors of the Company has approved and authorized the execution
        of this Agreement for the purpose of the Company making the guarantee set
        forth
        in Section 17; and

       

      WHEREAS,
        the Board of Directors of the Bank has approved and authorized the execution
        of
        this Agreement with the Employee to take effect as stated in Section 2
        hereof.

       

      NOW,
        THEREFORE, in consideration of the foregoing and of the respective covenants
        and
        agreements of the parties herein, it is AGREED as follows:

       

      1.           
        Definitions.

       

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

       

      (i)           
        a change in the ownership of the Bank or the Company, which shall occur on
        the
        date that any one person, or more than one person acting as a group, acquires
        ownership of stock of the Bank or the Company that, together with stock held
        by
        such person or group, constitutes more than fifty percent (50%) of the total
        fair market value or total voting power of the stock of the Bank or the Company.
        Such acquisition may occur as a result of a merger of the Company or the
        Bank
        into another entity which pays consideration for the shares of capital stock
        of
        the merging Company or Bank. However, if any one person, or more than one
        person
        acting as a group, is considered to own more than fifty percent (50%) of
        the
        total fair market value or total voting power of the stock of the Bank or
        the
        Company, the acquisition of additional stock by the same person or persons
        is
        not considered to cause a change in the ownership of the Bank or the Company
        (or
        to cause a change in the effective control of the Bank or the Company
        (within

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      the
        meaning of subsection (ii)).  An increase in the percentage of stock
        owned by any one person, or persons acting as a group, as a result of a
        transaction in which the Bank or the Company acquires its stock in exchange
        for
        property will be treated as an acquisition of stock for purposes of this
        subsection.  This subsection applies only when there is a transfer of
        stock of the Bank or the Company (or issuance of stock of the Bank or the
        Company) and stock in the Bank or the Company remains outstanding after the
        transaction.

       

      (ii)           
        a change in the effective control of the Bank or the Company, which shall
        occur
        only on either of the following dates:

       

      1)           
        the date any one person, or more than one person acting as a group acquires
        (or
        has acquired during the 12 month period ending on the date of the most recent
        acquisition by such person or persons) ownership of stock of the Bank or
        the
        Company possessing thirty percent (30%) or more of the total voting power
        of the
        stock of the Bank or the Company.

       

      2)           
        the date a majority of members of the Company’s board of directors is replaced
        during any 12 month period by directors whose appointment or election is
        not
        endorsed by a majority of the members of the Company’s board of directors before
        the date of the appointment or election; provided, however, that this provision
        shall not apply if another corporation is a majority shareholder of the
        Company.

       

      If
        any one person, or more than one person acting as a group, is considered
        to
        effectively control the Bank or the Company, the acquisition of additional
        control of the Bank or the Company by the same person or persons is not
        considered to cause a change in the effective control of the Bank or the
        Company
        (or to cause a change in the ownership of the Bank or the Company within
        the
        meaning of subsection (i) of this section).

       

      (iii)           
        a change in the ownership of a substantial portion of the Bank’s assets, which
        shall occur on the date that any one person, or more than one person acting
        as a
        group, acquires (or has acquired during the 12 month period ending on the
        date
        of the most recent acquisition by such person or persons) assets from the
        Bank
        that have a total gross fair market value equal to or more than forty percent
        (40%) of the total gross fair market value of all of the assets of the Bank
        immediately before such acquisition or acquisitions.  For this
        purpose, gross fair market value means the value of the assets of the Bank,
        or
        the value of the assets being disposed of, determined without regard to any
        liabilities associated with such assets.  No change in control occurs
        under this subsection (iii) when there is a transfer to an entity that is
        controlled by the shareholders of the Bank immediately after the
        transfer.  A transfer of assets by the Bank is not treated as a change
        in the ownership of such assets if the assets are transferred to
–

       

      1)           
        a shareholder of the Bank (immediately before the asset transfer) in exchange
        for or with respect to its stock;

       


      
        
          
          

        

        
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      2)           
        an entity, 50 percent or more of the total value or voting power of which
        is
        owned, directly or indirectly, by the Bank.

       

      3)           
        a person, or more than one person acting as a group, that owns, directly
        or
        indirectly, 50 percent or more of the total value or voting power of all
        the
        outstanding stock of the Bank; or

       

      4)           
        an entity, at least 50 percent of the total value or voting power of which
        is
        owned, directly or indirectly, by a person described in paragraph
        (3).

       

      For
        purposes of this subsection (iii) and except as otherwise provided in paragraph
        1) above, a person’s status is determined immediately after the transfer of the
        assets.

       

      (iv)           
        For purposes of this section, persons will not be considered to be acting
        as a
        group solely because they purchase or own stock of the same corporation at
        the
        same time, or as a result of the same public offering. Persons will be
        considered to be acting as a group if they are owners of a corporation that
        enters into a merger, consolidation, purchase or acquisition of stock, or
        similar business transaction with the Bank or the Company; provided, however,
        that they will not be considered to be acting as a group if they are owners
        of
        an entity that merges into the Bank or the Company where the Bank or the
        Company
        is the surviving corporation.

       

      (b)           
        The term "Commencement Date" means the date of the consummation of the Bank
        Merger.

       

      (c)           
        The term "Date of Termination" means the date upon which the Employee ceases
        to
        serve as an employee of the Bank.

       

      (d)           
        The term "Involuntary Termination" means termination of the employment of
        Employee without the Employee's express written consent, and shall include
        a
        voluntary termination by the Employee for “good reason.”  For purposes
        of this subsection, “good reason” means a material diminution of or interference
        with the Employee's duties, responsibilities and benefits as Regional President
        of the Bank and Senior Vice President of the Company, including (without
        limitation) any of the following actions unless consented to in writing by
        the
        Employee: (1) a change in the principal workplace of the Employee to a location
        outside of a 30 mile radius from the Bank's headquarters office as of the
        date
        hereof without the Employee’s consent, (2) a material demotion of the Employee;
        (3) a material reduction in the number or seniority of other Bank personnel
        reporting to the Employee or a material reduction in the frequency with which,
        or in the nature of the matters with respect to which, such personnel are
        to
        report to the Employee, other than as part of a Bank-or Company-wide reduction
        in staff, (4) a material adverse change in the Employee's base salary; and
        (5)
        any material breach of this Agreement by the Bank.  The Employee’s
        voluntary termination for good reason upon the occurrence of any of the events
        or conditions described in the preceding sentence (a “Good Reason Event”) shall
        be deemed an “Involuntary Termination” only if such voluntary termination occurs
        within two years after the Good Reason Event and after the Employee has provided
        the Bank not less than ninety (90) days notice of his intent to terminate
        employment

       


      
        
          
          

        

        
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      and
        at least thirty (30) days for the Bank to cure the Good Reason Event. The
        term
        "Involuntary Termination" does not include Termination for Cause or termination
        of employment due to retirement, death, disability or suspension or temporary
        or
        permanent prohibition from participation in the conduct of the Bank's affairs
        under Section 8 of the Federal Deposit Insurance Act
        ("FDIA").

       

      (e)           
        The terms "Termination for Cause" and "Terminated
        For Cause" mean termination of the employment of the Employee because of
        the
        Employee's personal dishonesty, incompetence, willful misconduct, breach
        of a
        fiduciary duty involving personal profit, intentional failure to perform
        stated
        duties, willful violation of any law, rule, or regulation (other than traffic
        violations or similar offenses) or final cease-and-desist order, or material
        breach of any provision of this Agreement. The Employee shall not be deemed
        to
        have been Terminated for Cause unless and until there shall have been delivered
        to the Employee a copy of a resolution, duly adopted by the affirmative vote
        of
        not less than a majority of the entire membership of the Board of Directors
        of
        the Bank at a meeting of the Board called and held for such purpose (after
        reasonable notice to the Employee and an opportunity for the Employee, together
        with the Employee's counsel, to be heard before the Board), stating that
        in the
        good faith opinion of the Board the Employee has engaged in conduct described
        in
        the preceding sentence and specifying the particulars thereof in
        detail.

       

      (f)           
        The term “Section 409A” means Section 409A of the Code, and any regulations or
        other guidance of general applicability issued thereunder.

       

      (g)           
        The term “Specified Employee” means, for an applicable twelve (12) month period
        beginning on April 1, a key employee (as described in Code Section 416(i),
        determined without regard to paragraph (5) thereof) during the calendar year
        immediately preceding such April 1.

       

      (h)           
        The term
“Termination
        of Employment” shall have the same meaning as Aseparation
        from service,
        as that phrase is defined in Section 409A (taking into account all rules
        and
        presumptions provided for in the Section 409A regulations).  Any
        reference to termination of employment herein shall be deemed to have the
        same
        meaning as “Termination of Employment” as herein
        defined.

       

      2.           
        Term.
        The term of this Agreement shall be a period of three years beginning on
        the
        Commencement Date, subject to earlier termination as provided herein. Beginning
        on the first anniversary of the Commencement Date, and on each anniversary
        thereafter, the term of this Agreement shall be extended for a period of
        one
        year in addition to the then-remaining term, provided
        that (1) the Bank has not given notice to the Employee in writing at
        least 90 days prior to such anniversary that the term of this Agreement shall
        not be extended further; and (2) prior to such anniversary, the Board of
        Directors of the Bank explicitly reviews and approves the extension. Reference
        herein to the term of this Agreement shall refer to both such initial term
        and
        such extended terms.

       

      3.           
        Employment.
        Upon the Commencement Date, the Employee shall be employed as Regional President
        of the Bank and Senior Vice President of the Company as of the Commencement
        Date. As such, the Employee shall render administrative and management services
        as are customarily performed by persons situated in similar executive
        capacities, and

       


      
        
          
          

        

        
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      shall
        have such other powers and duties of an officer of the Bank and the Company
        as
        the Board of Directors may prescribe from time to time.

       

      4.           
        Compensation.

       

      (a)           
        Salary.
        The Bank agrees to pay the Employee during the term of this Agreement, not
        less
        frequently than monthly, the salary established by the Board of Directors,
        which
        shall be at least $250,000 annually. The amount of the Employee's salary
        shall
        be reviewed by the Board of Directors, beginning not later than the first
        anniversary of the Commencement Date. Adjustments in salary or other
        compensation shall not limit or reduce any other obligation of the Bank or
        of
        the Company under this Agreement. The Employee's
        salary in effect from time to time during the term of this Agreement shall
        not
        thereafter be reduced.

       

      (b)           
        Discretionary
        Bonuses. The Employee shall be entitled to participate in an equitable
        manner with all other executive officers of the Bank in discretionary bonuses
        as
        authorized and declared by the Board of Directors to its executive employees.
        No
        other compensation provided for in this Agreement shall be deemed a substitute
        for the Employee's right to participate in such bonuses when and as declared
        by
        the Board of Directors. A discretionary bonus declared pursuant to this Section
        4(b) shall be paid no later than two and one-half months after the end of
        the
        calendar year in which the bonus is declared.

       

      (c)           
        Expenses.
        The Employee shall be entitled to receive prompt reimbursement for all
        reasonable expenses incurred by the Employee in performing services under
        this
        Agreement in accordance with the policies and procedures applicable to the
        executive officers of the Bank, provided
        that the Employee accounts for such expenses as required under such policies
        and
        procedures.

       

      5.           
        Benefits.

       

      (a)           
        Participation
        in Retirement and Employee Benefit Plans. The Employee shall be entitled
        to participate in all plans relating to pension, thrift, profit-sharing,
        group
        life and disability insurance, medical and dental coverage, education, cash
        bonuses, and other retirement or employee benefits or combinations thereof,
        in
        which the Bank's executive officers participate.

       

      (b)           
        Fringe
        Benefits. The Employee shall be eligible to participate in, and receive
        benefits under, any fringe benefit plans which are or may become applicable
        to
        the Bank's executive officers, including, without limitation, the Company's
        Stock Option Plan the Management Recognition Plan, and the Company’s Employee
        Stock Ownership Plan.  So long as Employee is employed by the Bank
        pursuant to this Agreement, Employee shall be entitled to an auto allowance
        of
        $1,667 per month to be applied towards the use or lease of an automobile
        used in
        part for Bank business.

       

      (c)           
        Vacations;
        Leave. The Employee shall be entitled to annual paid vacation in
        accordance with the policies established by the Board of Directors for executive
        employees and to voluntary leave of absence, with or without pay, from time
        to
        time at such times and upon such conditions as the Board of Directors may
        determine in its discretion.

       


      
        
          
          

        

        
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      6.           
        Termination
        of
        Employment.

       

      (a)           
        Involuntary
        Termination.The
        Board of Directors
        may terminate the Employee's employment at any time, but, except in the case
        of
        Termination for Cause, termination of employment shall not prejudice the
        Employee's right to compensation or other benefits under this Agreement.
        In the
        event of Involuntary Termination other than in connection with or within
        twelve
        (12) months after a Change in Control, (1) the Bank shall pay to the Employee
        during the remaining term of this Agreement, the Employee's salary at the
        rate
        in effect immediately prior to the Date of Termination, payable in such manner
        and at such times as such salary would have been payable to the Employee
        under
        Section 4 if the Employee had continued to be employed by the Bank, and (2)
        the
        Bank shall provide to the Employee during the remaining term of this Agreement
        substantially the same benefits as the Bank maintained for its executive
        officers immediately prior to the Date of Termination, including Bank-paid
        dependent medical and dental coverage.  If and to the extent
        involuntary termination payments under this Section 6 constitute deferred
        compensation within the meaning of Section 409A (“Involuntary Termination
        Deferred Compensation”), and the Employee is a Specified Employee, then the
        payment of such Involuntary Termination Deferred Compensation shall comply
        with
        Code Section 409A(a)(2)(B)(i) and the regulations thereunder, which generally
        provides that distributions of deferred compensation (within the meaning
        of
        Section 409A) to a Specified Employee that are payable on account of Termination
        of Employment may not commence prior to the six (6) month anniversary of
        the
        Employee’s Termination of Employment (or, if earlier, the date of the Employee’s
        death). Amounts that would otherwise be distributed to the Employee during
        such
        six (6) month period but for the preceding sentence shall be paid to the
        Employee on the 185th day following the date of the Employee’s Termination of
        Employment.  To the extent permitted by Section 409A, Involuntary
        Termination Deferred Compensation payments shall be deemed to be made after
        any
        other payments provided for in this Section 6(a).

       

      (b)           
        Termination
        for Cause. In the event of Termination for Cause, the Bank shall pay the
        Employee the Employee's salary and benefits through the Date of Termination,
        and
        the Bank shall have no further obligation to the Employee under this
        Agreement.

       

      (c)           
        Voluntary
        Termination. The Employee's employment may be voluntarily terminated by
        the Employee at any time upon 90 days written notice to the Bank or upon
        such
        shorter period as may be agreed upon between the Employee and the Board of
        Directors. In the event of such voluntary termination, the Bank shall be
        obligated to continue to pay to the Employee the Employee's salary and benefits
        only through the Date of Termination, at the time such payments are due,
        and the
        Bank shall have no further obligation to the Employee under this
        Agreement.

       

      (d)           
        Change
        in Control. In the event of Involuntary Termination in connection with or
        within 12 months after a Change in Control which occurs at any time while
        the
        Employee is employed under this Agreement, the Bank shall, subject to Section
        7
        of this Agreement, (1) pay to the Employee in a lump sum in cash within 25
        business days after the Date of Termination an amount equal to 299% of the
        Employee's "base amount" as defined in Section 280G of the Internal Revenue
        Code
        of 1986, as amended (the "Code"); and (2) provide to the Employee during
        the
        remaining term of this Agreement substantially the same health (including,
        without limitation, health, dental and vision) and disability benefits as
        the
        Bank maintained for its executive officers immediately prior to the Change
        in
        Control.

       


      
        
          
          

        

        
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      (e)           
        Death;
        Disability. In the event of the death of the Employee while employed
        under this Agreement and prior to any termination of employment, the
        Employee's
        estate, or such person as the Employee may have previously designated in
        writing, shall be entitled to receive from the Bank the salary and benefits
        of
        the Employee through the last day of the calendar month in which the Employee
        died. If the Employee becomes disabled as defined in the Bank's then current
        disability plan, if any, or if the Employee is otherwise unable to serve
        in his
        current capacity, this Agreement shall continue in fall force and effect,
        except
        that the salary paid to the Employee shall be reduced by any disability
        insurance payments made to Employee on policies of insurance maintained by
        the
        Bank at its expense.

       

      (f)           
        Temporary
        Suspension or Prohibition. If the Employee 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)(1) of the FDIA, 12 U.S.C.
§
1818(e)(3) and (g)(1), the Bank's obligations under this Agreement shall
        be suspended as of the date of service, unless stayed by appropriate
        proceedings. If the charges in the notice are dismissed, the Bank may in
        its
        discretion (i) pay the Employee all or part of the compensation withheld
        while
        its obligations under this Agreement were suspended and (ii) reinstate in
        whole
        or in part any of its obligations which were suspended.

       

      (g)           
        Permanent
        Suspension or Prohibition. If the Employee 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)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and
        (g)(1), all obligations of the Bank under this Agreement shall terminate
        as of
        the effective date of the order, but vested rights of the contracting parties
        shall not be affected.

       

      (h)           
        Default
        of the Bank. If the Bank is in default (as defined in Section 3(x)(1) of
        the FDIA), all
obligations
        under this Agreement shall terminate as of the date of
        default, but this provision shall not affect any vested rights of the
        contracting parties.

       

      (i)           
        Termination
        by
        Regulators. All obligations of the Bank under this Agreement shall be
        terminated, except to the extent determined that continuation of this Agreement
        is necessary for the continued operation of the Bank: (1) by the Director
        of the
        Office of Thrift Supervision (the "Director") or his or her designee, at
        the
        time the Federal Deposit Insurance Corporation enters into an agreement to
        provide assistance to or on behalf of the Bank under the authority contained
        in
        Section 13(c) of the FDIA; or (2) by the Director or his or her designee,
        at the
        time the Director or his or her 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, however, shall not be affected by any such
        action.

       

      Payments
        due under the Agreement that are suspended in accordance with Paragraphs
        6(f)
        through 6(i) of the Agreement, but are later determined by the applicable
        regulatory authority to be payable, shall be paid at the earliest date the
        Company or the Bank reasonably anticipates that the payment would be
        permissible.

       

      7.           
        Certain Reduction of Payments by the Bank.

       

      (a)           
        Notwithstanding any other provision of this Agreement, if payments under
        this
        Agreement, together with any other payments received or to be received by
        the
        Employee in

       


      
        
          
          

        

        
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      connection
        with a Change in Control would cause any amount to be nondeductible for federal
        income tax purposes pursuant to Section 280G of the Code, then benefits under
        this Agreement shall be reduced (not less than zero) to the extent necessary
        so
        as to maximize payments to the Employee without causing any amount to become
        nondeductible. The Employee shall determine the allocation of such reduction
        among payments to the Employee.

       

      (b)           
        Any payments made to the Employee pursuant to this Agreement, or otherwise,
        are
        subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k) and
        any regulations promulgated thereunder.

       

      8.           
        Confidential
        Information; Loyalty; Non-competition.

       

      (a)           
        During the term of the Employee's
        employment hereunder and for three years thereafter, the Employee shall not,
        except as may be required to perform his duties hereunder or as required
        by law,
        disclose to others or use, whether directly or indirectly, any Confidential
        Information. "Confidential Information" means information about the Bank
        and the
        Bank’s clients and customers which is not available to the general public and
        was or shall be learned by the Employee in the course of his employment by
        the
        Bank, including without limitation any data, formulae, information, proprietary
        knowledge, trade secrets, and credit reports and analyses owned, developed
        and
        used in the course of the business of the Bank, including client and customer
        lists and information related thereto; and all papers, resumes, records and
        other documents (and all copies thereof) containing such Confidential
        Information. The Employee acknowledges that such Confidential Information
        is
        specialized, unique in nature and of great value to the Bank. The Employee
        agrees that upon the expiration of the Employee's term of employment hereunder
        or in the event the Employee's employment hereunder is terminated prior thereto
        for any reason whatsoever, the Employee will promptly deliver to the Bank
        all
        documents (and all copies thereof) containing any Confidential
        Information.

       

      (b)           
        The Employee shall devote his
        full
        time to the performance of his employment under this Agreement; provided,
        however, that the Employee may serve, without compensation, with charitable,
        community and industry organizations and to serve, with compensation, as
        a
        director of any business corporation to the extent such directorships do
        not
        inhibit the performance of his duties thereunder or conflict with the business
        of the Bank. During the term of the Employee's employment hereunder, the
        Employee shall not engage in any business or activity contrary to the business
        affairs or interests of the Bank.

       

      (c)           
        Upon the expiration of the term
        of
        the Employee's employment hereunder or in the event the Employee's employment
        hereunder terminates prior thereto for any reason whatsoever, the Employee
        shall
        not, for a period of one year after the occurrence of such event, for himself,
        or as the agent of, on behalf of, or in conjunction with, any person or entity,
        solicit or attempt to solicit, whether directly or indirectly: (i) any employee
        of the Bank to terminate such employee's employment relationship with the
        Bank;
        or (ii) any savings and loan, banking or similar business from any person
        or
        entity that is or was a client, employee, or customer of the Bank and had
        dealt
        with the Employee or any other employee of the Bank under the supervision
        of the
        Employee.

       

      (d)           
        In the event the Employee's
        employment hereunder is terminated for any reason whatsoever, the Employee
        shall
        not, for a period of two years from the date of termination, directly or
        indirectly, own, manage, operate or control, or participate in
        the

       


      
        
          
          

        

        
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      ownership,
        management, operation or control of, or be employed by or connected in any
        manner with, any financial institution having an office located within 25
        miles
        of any office of the Bank as of the date of
        termination.

       

      (e)           
        The provisions of Paragraphs
        8(b)
        and 8(d) of the Agreement shall not prevent the Employee from purchasing,
        solely
        for investment, not more than 5 percent of any financial institution's stock
        or
        other securities which are traded on any national or regional securities
        exchange or are actively traded in the over-the-counter market and registered
        under Section 12(g) of the Securities Exchange Act of
        1934.

       

      (f)           
        The provisions of this Paragraph
        8
        shall survive the termination of the Employee’s employment hereunder whether by
        expiration of the term thereof or otherwise.

       

      9.           
        No
        Mitigation. The Employee shall not be required to mitigate the amount of
        any salary or other payment or benefit provided for in this Agreement by
        seeking
        other employment or otherwise, nor shall the amount of any payment or benefit
        provided for in this Agreement be reduced by any compensation earned by the
        Employee as the result of employment by another employer, by retirement benefits
        after the Date of Termination or otherwise.

       

      10.           
        Attorneys
        Fees. In the event the Bank exercises its right of Termination for Cause,
        but it is determined by a court of competent jurisdiction or by an arbitrator
        pursuant to Section 16 that cause did not exist for such termination, or
        if in
        any event it is determined by any such court or arbitrator that the Bank
        has
        failed to make timely payment of any amounts owed to the Employee under this
        Agreement, the Employee shall be entitled to reimbursement for all reasonable
        costs, including attorneys' fees, incurred in challenging such termination
        or
        collecting such amounts. Such reimbursement shall be in addition to all rights
        to which the Employee is otherwise entitled under this
        Agreement.

       

      11.           
        No
        Assignments.

       

      (a)           
        This Agreement is personal to each of the parties hereto, and no party may
        assign or delegate any of its rights or obligations hereunder without first
        obtaining the written consent of the other party; provided, however, that
        the
        Bank shall require any successor or assign (whether direct or indirect, by
        purchase, merger, consolidation or otherwise) to all or substantially all
        of the
        business and/or assets of the Bank, by an assumption agreement in form and
        substance satisfactory to the Employee, to expressly assume and agree to
        perform
        this Agreement in the same manner and to the same extent that the Bank would
        be
        required to perform it if no such succession or assignment had taken place.
        Failure of the Bank to obtain such an assumption agreement prior to the
        effectiveness of any such succession or assignment shall be a breach of this
        Agreement and shall entitle the Employee to compensation from the Bank in
        the
        same amount and on the same terms as the compensation pursuant to Section
        6(d)
        hereof. For purposes of implementing the provisions of this Section 11(a),
        the
        date on which any such succession becomes effective shall be deemed the Date
        of
        Termination.

       

      (b)           
        This Agreement and all rights of the Employee hereunder shall inure to the
        benefit of and be enforceable by the Employee's
        personal and legal representatives, executors, administrators, successors,
        heirs, distributees, devisees and legatees. If the Employee should die while
        any
        amounts would still be payable to the Employee hereunder if the Employee
        had
        continued to live, all such amounts, unless otherwise provided herein, shall
        be
        paid in accordance

       


      
        
          
          

        

        
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      with
        the terms of this Agreement to the Employee's devisee, legatee or other designee
        or if there is no such designee, to the Employee's estate.

       

      12.           
        Notice.
        For the purposes of this Agreement, notices and all other communications
        provided for in the Agreement shall be in writing and, shall be deemed to
        have
        been duly given when personally delivered or sent by certified mail, return
        receipt requested, postage prepaid, to the Bank or Company at its home office,
        to the attention of the Board of Directors with a copy to the Secretary,
        or, if
        to the Employee, to such home or other address as the Employee has most recently
        provided in writing to the Bank.

       

      13.           
        Amendments.
        No amendments or additions to this Agreement shall be binding unless in writing
        and signed by both parties, except as herein otherwise
        provided.

       

      14.           
        Headings.
        The headings used in this Agreement are included solely for convenience and
        shall not affect, or be used in connection with, the interpretation of this
        Agreement.

       

      15.           
        Severability.
        The provisions of this Agreement shall be deemed severable and the invalidity
        or
        unenforceability of any provision shall not affect the validity or
        enforceability of the other provisions hereof.

       

      16.           
        Governing
        Law. This Agreement shall be governed by the laws of the United States
        to
        the extent applicable and otherwise by the laws of the State of
        Indiana.

       

      17.           
        Arbitration.
        Any dispute or controversy arising under or in connection with this Agreement
        shall be settled exclusively by arbitration 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.

       

      18.           
        Company
        Guarantee. The Company hereby guarantees the obligations of the Bank to
        the Employee under the Employment Agreement. This guarantee shall be subject
        to
        the provisions of 12 U.S.C. Section 1828(k) and regulations
        thereunder.

       

      19.           
        Supersedes
        Prior Agreements. This Agreement supersedes any and all prior employment
        agreements entered into by and between the Employee, the Bank or the
        Company.

       


      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the day and
        year
        first above written.

       

      THIS
        AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED
        BY THE
        PARTIES.

       

       

      
        	
                Attest:

              	 	
                MUTUAL
                  FEDERAL SAVINGS BANK

              
	 	 	 	 
	 	 	 	 
	/s/
                Rosalie A. Peters	 	/s/
                David
                W. Heeter
	
                Secretary

              	 	
                By:

              	
                David
                  W. Heeter

              
	 	 	
                Its:

              	
                Chief
                  Executive Officer

              
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
                MUTUALFIRST
                  FINANCIAL, INC.

              
	 	 	 	 
	 	 	 	 
	/s/
                Rosalie A. Peters	 	/s/
                David
                W. Heeter
	
                Secretary

              	 	
                By:

              	
                David
                  W. Heeter

              
	 	 	
                Its:

              	
                President
                  and Chief Executive Officer

              
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
                EMPLOYEE

              
	 	 	 	 
	 	 	/s/
                Charles J. Viater	 
	 	 	
                Charles
                  J. Viater

              


      

       

       

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