EXHIBIT 10.1

NAMED EXECUTIVE OFFICER SALARY AND BONUS ARRANGEMENTS FOR 2007

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Exhibit 10.1

Named Executive Officer Salary and Bonus Arrangements for 2007

Base Salaries

          The base salaries for 2007 for the executive officers (the “named
executive officers”) of MutualFirst Financial, Inc. (the “Company”) and Mutual
Federal Savings Bank who will be named in the compensation table that will
appear in the Company’s upcoming 2007 annual meeting proxy statement are as
follows:

Name and Title

 

Base Salary

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David W. Heeter
President and Chief Executive
Officer of the Company

 

$233,500

 

 

 

Patrick C. Botts
Executive Vice President of
the Company  and President and
Chief Operating Officer of the Bank

 

$189,000

 

 

 

Timothy J. McArdle
Chief Financial Officer of
the Company and the Bank

 

$172,500

 

 

 

Steven R. Campbell
Senior Vice President of the Bank

 

$160,000

 

 

 

Steven C. Selby
Senior Vice President of the Bank

 

$149,000

Description of 2007 Bonus Plan

          The Company has established a new cash incentive bonus plan for 2007
for all officers and employees of the Company and Mutual Federal (the “2007
Bonus Plan”).  The quarterly payments will be made if and to the extent the
Company’s performance in 2007 exceeds baseline levels on certain key performance
indicators (which will be the same for all officers and employees), including
loan and deposit growth, net interest margin improvement, growth in non-interest
income, the ratios of non-performing assets to total assets and net charge-offs
to total assets, and management of general and administrative expenses.  The key
performance indicators for the potential additional annual incentive payments to
officers will be 2007 net interest income after provision for loan losses,
non-interest income and non-interest expense.

          The amounts of the quarterly and annual bonuses under the 2007 Bonus
Plan, if earned, will be determined by multiplying the employee’s salary by the
employee’s payout percentage.  While the payout percentages will vary from
employee to employee, they will increase proportionately for all officers and
employees if and to the extent the Company attains a performance level above the
baseline performance threshold. Annual incentive payouts to officers will only
be made if actual performance exceeds baseline performance levels. Depending on
the extent to which (if at all) actual performance exceeds baseline performance
levels, the aggregate amount payable pursuant to the quarterly bonus component
and the annual bonus component will range from 35% to 48% of the amount by which
actual pre-tax net income from operations for the quarter or year, as
applicable, exceeds the baseline level.

           Additional information about the 2007 Bonus Plan is incorporated
herein by reference from the Company’s definitive proxy statement for its Annual
Meeting of Stockholders to be held in April 2007, except for information
contained under the headings “Compensation Committee Report,” and “Report of the
Audit/Compliance Committee,” a copy of which will be filed not later than 120
days after the close of the fiscal year.

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