Rec. & Ret. Plan & Trust Agreement

MARKET FINANCIAL CORPORATION
RECOGNITION AND RETENTION PLAN
AND TRUST AGREEMENT


ARTICLE I
DEFINITIONS


The following words and phrases when used in this Agreement with an initial capital letter shall have the meanings set forth below, unless the context clearly indicates otherwise. Wherever appropriate, the masculine pronoun shall include the feminine pronoun and the singular shall include the plural:


1.01 "Agreement" means the Market Financial Corporation Recognition and Retention Plan and Trust Agreement.


1.02 "Association" means The Market Building and Saving Company, a savings and loan association incorporated under the laws of the State of Ohio.


1.03 "Award" means a right granted to a Director or an Employee under this Plan to receive Plan Shares.


1.04 "Beneficiary" means the person or persons designated by a Recipient to receive any benefits payable under this Plan in the event of such Recipient's death. Such person or persons shall be designated in writing on forms provided for this purpose by the Committee and may be changed from time to time by similar written notice to the Committee. In the absence of a written designation, the Beneficiary shall be the Recipient's estate.


1.05 "Board" means the Board of Directors of the Corporation.


1.06 "Committee" means the Recognition and Retention Plan Committee appointed by the Board pursuant to Article IV hereof.


1.07 "Common Shares" means common shares of the Corporation.


1.08 "Conversion" means the conversion of the Association from mutual to stock form.


1.09 "Corporation" means Market Financial Corporation, a savings and loan holding company incorporated under the laws of the State of Ohio for the purpose of holding all of the common shares of the Association issued in connection with the Conversion, or any successor thereto.


1.10 "Director" means any person who is a member of the Board of Directors of the Corporation, the Association or a Subsidiary.


1.11 "Employee" means any person who is employed by the Corporation, the Association or a Subsidiary.


1.12 "Person" means an individual, corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein.


1.13 "Plan" means the Recognition and Retention Plan established by this Agreement.


1.14 "Plan Shares" means the Common Shares held pursuant to the Trust and which are awarded or issuable to a Recipient pursuant to the Plan.


1.15 "Plan Share Reserve" means the Common Shares held by the Trustee pursuant to Sections 5.02 and 5.03 of this Agreement.


1.16 "Recipient" means any Director or Employee who receives an Award under the Plan.


1.17 "Subsidiaries" means subsidiaries of the Corporation or the Association which, with the consent of the Board, agree to participate in the Plan.


1.18 "Trust" means the trust established by this Agreement.


1.19 "Trustee(s)" means the person(s) or entity approved by the Board pursuant to Sections 4.01 and 4.02 to hold legal title to the Plan assets for the purposes set forth herein.


ARTICLE II
ESTABLISHMENT OF THE PLAN AND TRUST


2.01 The Corporation hereby establishes a Recognition and Retention Plan and Trust upon the terms and subject to the conditions set forth in this Agreement.


2.02 The Trustee hereby accepts the Trust and agrees to hold the Trust assets existing on the date of this Agreement and all additions and accretions thereto upon the terms and conditions of this Agreement.


ARTICLE III
PURPOSE OF THE PLAN


3.01 The purpose of the Plan is to reward and retain the Directors and Employees of the Corporation, the Association and the Subsidiaries who are in key positions of responsibility by providing such Directors and Employees with an equity interest in the Corporation as


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reasonable compensation for their contributions to the Corporation, the Association and the Subsidiaries.


ARTICLE IV
ADMINISTRATION OF THE PLAN


4.01 ROLE OF THE COMMITTEE. The Plan shall be administered and interpreted by the Committee, which shall consist of not less than three members of the Board who are not employees of the Corporation or the Association. The Committee shall have all of the powers set forth in this Plan. The interpretation and construction by the Committee of any provisions of this Agreement or of any Award granted hereunder shall be final, conclusive and binding. The Committee shall act by the vote, or the written consent, of a majority of its members. The Committee shall report actions and decisions with respect to the Plan to the Board upon request by the Board.


4.02 ROLE OF THE BOARD. The members of the Committee and the Trustee(s) shall be appointed or approved by and will serve at the pleasure of the Board. The Board may in its discretion from time to time remove members from or add members to the Committee and may remove, replace or add Trustee(s).


4.03 LIMITATION ON LIABILITY. No member of the Board or the Committee, nor any Trustee, shall be liable for any determination made in good faith with respect to the Plan or any Plan Shares or Awards granted under the Plan. If a member of the Board or of the Committee or any Trustee is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of anything done or not done by such member in such capacity under or with respect to this Plan, the Corporation shall indemnify such member against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such member in connection with such action, suit or proceeding if such member acted in good faith and in a manner such member reasonably believed to be in or not opposed to the best interests of the Corporation, the Association and the Subsidiaries and, with respect to any criminal action or proceeding, had no reasonable cause to believe such member's conduct was unlawful.


ARTICLE V
CONTRIBUTIONS; PLAN SHARE RESERVE


5.01 AMOUNT AND TIMING OF CONTRIBUTIONS. The Board shall determine the amounts (or the method of computing the amounts) to be contributed by the Corporation to the Trust. Such amounts shall be paid to the Trustee at the time of contribution. No contributions to the Trust by Directors or Employees shall be permitted.


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5.02 INVESTMENT OF TRUST ASSETS. Except as otherwise permitted by Section 8.02 of this Agreement, the Trustee shall invest all of the Trust's assets, after providing for any required withholding as needed for tax purposes, exclusively in Common Shares; provided, however, that the Trust shall not purchase a number of Common Shares equal to more than 3% of the number of Common Shares issued in connection with the Conversion, except that if the Association's tangible capital exceeds 10%, the Trust may purchase a number of Common Shares equal to up to 4% of the Common Shares issued in connection with the Conversion. After such investment, the Common Shares shall be held by the Trustee in the Plan Share Reserve until such Common Shares are subject to one or more Awards. Any funds held by the Trust before purchasing Common Shares shall be invested by the Trustee in such interest-bearing account or accounts at the Association as the Trustee shall determine to be appropriate.


5.03 EFFECT OF ALLOCATIONS, RETURNS AND FORFEITURES UPON PLAN SHARE RESERVES. Upon the allocation of Awards under Section 6.02 of this Agreement, or the decision of the Committee to return Plan Shares to the Corporation, the Plan Share Reserve shall be reduced by the number of Plan Shares so allocated or returne ...