DIRECTOR DEFERRED COMPENSATION MASTER AGREEMENT

EXHIBIT 10.3

DIRECTOR DEFERRED COMPENSATION MASTER AGREEMENT

Exhibit 10.3

DIRECTOR DEFERRED
COMPENSATION AGREEMENTS

Mutual Federal Savings Bank
Muncie, Indiana

Financial Institution Consulting Corporation
000 Xxxxxxxx Xxxx, Xxxxx 000 .
Xxxxxxx, Xxxxxxxxx 00000
WATS: 0-000-000-0000
FAX: (901) 68-7414
(000) 000-0000

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;

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.

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.

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.

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.

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.

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.

	(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.

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.

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.

	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.

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.

	(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.

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.

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.

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.

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.

		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.

(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:

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.

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.

	(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.

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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DIRECTOR DEFERRED COMPENSATION MASTER AGREEMENT

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