[RP Financial, LC. Letterhead]
August 17, 1999
Board of Directors
Mutual Federal Savings Bank
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000-0000
Dear Members of the Board:
This letter sets forth the agreement between Mutual Federal Savings Bank,
Muncie, Indiana ("Mutual" or the "Bank"), and RP Financial, LC. ("RP
Financial"), whereby the Bank has engaged RP Financial to prepare the regulatory
business plan and financial projections to be adopted by the Bank's Board of
Directors in conjunction with the stock conversion transaction, whereby the Bank
will become a wholly-owned subsidiary of a stock holding company. These services
are described in greater detail below.
Description of Proposed Services
RP Financial's business planning services will include the following areas:
(1) evaluating Mutual's current financial and operating condition, business
strategies and anticipated strategies in the future; (2) analyzing and
quantifying the impact of business strategies, incorporating the use of net
conversion proceeds both in the short and long term; (3) preparing detailed
financial projections on a quarterly basis for a period of at least three fiscal
years to reflect the impact of Board approved business strategies and use of
proceeds; (4) preparing the written business plan document which conforms with
applicable regulatory guidelines including a description of the use of proceeds
and how the convenience and needs of the community will be addressed; and (5)
preparing the detailed schedules of the capitalization of the Bank and holding
company and related cash flows.
Contents of the business plan will include: Philosophy/Goals; Economic
Environment and Background; Lending, Leasing and Investment Activities; Deposit,
Savings and Borrowing Activity; Asset and Liability Management; Operations;
Records, Systems and Controls; Growth, Profitability and Capital; Responsibility
for Monitoring this Plan.
RP Financial agrees to prepare the business plan and accompanying financial
projections in writing such that the business plan can be filed with the
appropriate regulatory agencies prior to filing the appropriate applications.
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Fee Structure and Payment Schedule
The Bank agrees to compensate RP Financial for preparation of the business
plan on a fixed fee basis of $7,500. Payment of the professional fees shall be
made upon delivery of the completed business plan.
The Bank also agrees to reimburse RP Financial for those direct
out-of-pocket expenses necessary and incidental to providing the business
planning services. Reimbursable expenses will likely include shipping,
telephone/facsimile printing, computer and data services, and shall be paid to
RP Financial as incurred and billed. RP Financial will agree to limit
reimbursable expenses in conjunction with the appraisal engagement, subject to
written authorization from the Bank to exceed such level.
In the event the Bank shall, for any reason, discontinue this planning
engagement prior to delivery of the completed business plan and payment of the
progress payment fee, the Bank agrees to compensate RP Financial according to RP
Financial's standard billing rates for consulting services based on accumulated
and verifiable time expenses, not to exceed the fixed fee described above, plus
reimbursable expenses incurred.
If during the course of the planning engagement, unforeseen events occur so
as to materially change the nature or the work content of the business planning
services described in this contract, the terms of said contract shall be subject
to renegotiation by the Bank and RP Financial. Such unforeseen events may
include changes in regulatory requirements as it specifically relates to Mutual
or potential transactions which will dramatically impact the Bank such as a
pending acquisition or branch transaction.
* * * * * * * * * * *
Please acknowledge your agreement to the foregoing by signing as indicated
below and returning to RP Financial a signed copy of this letter.
Sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President and Managing Director
Agreed To and Accepted By: X. Xxxx Xxxxxxx /s/ X. Xxxx Xxxxxxx
-------------------------------------
President and Chief Executive Officer
Upon Authorization by the
Board of Directors For: Mutual Federal Savings Bank
Muncie, Indiana
Date Executed: August 25, 1999
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