Employment Agreement - Charles B. Cook

Exhibit 10.5

Monarch Community Bank
Employment Agreement

THIS AGREEMENT entered into this September 2, 2003, by and between Monarch Community Bank located at 375 North Willowbrook Road, Coldwater, Michigan 49036 (the " Bank" ), and Charles B. Cook (" Executive" ).

WHEREAS, Executive has served in a position of substantial responsibility with Marshall Savings Bank, F.S.B. (" Marshall" ).

WHEREAS, Monarch Community Bancorp, Inc. (the " Company" ), the parent of the Bank and MSB Financial, Inc., the parent of Marshall, have entered into an Agreement and Plan of Merger dated September 2, 2003, pursuant to which MSB Financial, Inc. and Marshall will merge with the Company and the Bank, respectively, with the Company and the Bank as the surviving entities (the " Merger" ).

WHEREAS, the Bank wishes to assure itself of the continued services of Executive for the period provided in this Agreement; and

WHEREAS, Executive is willing to serve in the employ of the Bank on a full-time basis for the term of this Agreement; and

WHEREAS, the parties desire by this writing to set forth the terms and conditions of the continuing employment relationship of the Bank and Executive.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:

1. Employment. During the term of this Agreement, which is effective as of the Effective Time as defined in the Agreement and Plan of Merger dated as of September 2, 2003 by and between MSB Financial, Inc. and the Company (the " Commencement Date" ), Executive shall serve in the capacity of Vice President and Division President of the Marshall Division of the Bank. Executive shall render such administrative and management services to the Bank as are customarily performed by persons situated in a similar executive capacity and follow the policies of the Bank. Executive shall promote the business of the Bank. Executive' s other duties shall be such as the Chief Executive Officer or Board of Directors for the Bank (the " Board of Directors" or " Board" ) may from time to time reasonably direct, including normal duties as an officer of the Bank.

2. Base Compensation. The Bank agrees to pay Executive during the Term of this Agreement (as hereinafter defined in Section 5) a base salary at the rate of $132,000 per annum, payable in accordance with the customary payroll practices of the Bank.


3. Expenses. During the term of this Agreement, Executive shall be entitled to receive prompt reimbursement of all reasonable expenses incurred (in accordance with the policies and procedures of the Bank) in performing services under this Agreement, provided that Executive properly accounts for expenses in accordance with the policies of the Bank.

4. Employee Benefits.

(a) Participation in Employee Benefit Plans . Executive shall be entitled, while employed under the terms of this Agreement, to receive all benefits under any employee benefit plan or arrangement in effect as of the date of this Agreement or that the Bank implements at any time during the term of this Agreement. Executive shall be entitled to participate in such future plans or arrangements on the same terms as other employees of the Bank. In addition, the Bank will, to the extent it maintains a health insurance plan which provides for retiree coverage, provide Executive access to such health insurance coverage, at Executive' s cost, until September 1, 2013.

(b) Paid Leave Time. Executive shall be entitled to leave time in accordance with the standard policies or practices of the Bank for senior executive officers. Executive shall also be entitled to paid legal holidays in accordance with the policies of the Bank.

(c) Automobile. The Bank shall provide Executive with, and Executive shall have the primary use of, an automobile owned or leased by the Bank and the Bank shall pay (or reimburse Executive) for all expenses of insurance, registration, operation and maintenance of the automobile during the term of this Agreement. Executive shall comply with reasonable reporting and expense limitations on the use of such automobile, as the Board of Directors may establish from time to time, and the Bank shall annually include on Executive' s Form W-2 any amount attributable to Executive' s personal use of such automobile. Upon the expiration of the term of this Agreement, the Bank shall award such automobile to Executive.

5. Term of Agreement. Executive' s employment under this Agreement shall be deemed to have commenced as of the Commencement Date and shall continue for a period of twelve (12) calendar months from the Commencement Date.

6. Noncompetition and Confidentiality.

(a) Executive shall devote his full time and attention to the performance of his duties under this Agreement. Upon any termination of Executive' s employment hereunder pursuant to Sections 7(b) or (e) of this Agreement (other than a termination which occurs after the effective date of a Change in Control), Executive agrees not to compete with the Bank for a period of one (1) year following such termination in any city, town or county in which Executive' s normal business office is located or in which the Bank or its affiliates has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of such termination, except as agreed to pursuant to a resolution duly adopted by the Board of Directors. Executive agrees that during such period and within said cities, towns and counties, Executive shall not work for or advise, consult or otherwise serve with, directly or indirectly, any entity whose business materially competes with the depository, lending or other business

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activities of the Bank. The parties hereto, recognizing that irreparable injury will result to the Bank, and their business and property in the event of Executive' s breach of this Section 6(a), agree that in the event of any such breach by Executive, the Bank will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive, Executive' s partners, agents, servants, employees and all persons acting for or under the direction of Executive. Executive represents and admits that in the event he terminates employment with the Bank pursuant to Sections 7(b) or (e) of this Agreement, Executive' s experience and capabilities are such that Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Bank, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood. Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies available to the Bank for breach or threatened breach, including the recovery of damages from Executive.

(b) Executive recognizes and acknowledges that the knowledge of the business activities and plans for business activities of the Bank is a valuable, special and unique asset of the business of the Bank. Executive will not, during or after the term of his employment (regardless of the reason for his termination of employment), disclose any knowledge of the past, present, planned or considered business activities of the Bank to any person, firm, corporation, or other entity for any reason or purpose whatsoever. Notwithstanding the foregoing, Executive may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Bank. Further, Executive may disclose information regarding the business activities of the Bank to the Office of Thrift Supervision (" OTS" ) or other regulatory or judicial body pursuant to a formal regulatory request or subpoena.

(c) Nothing contained in this Section 6 shall be deemed to prevent or limit the right of Executive to invest in any entity which conducts business similar to that of the Bank, solely as a passive or minority investor.

7. Termina ...