EXHIBIT 10.1

NAMED EXECUTIVE OFFICER SALARY AND BONUS ARRANGEMENTS FOR 2008

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Exhibit 10.1

Named Executive Officer Salary and Bonus Arrangements for 2008

Base Salaries
 
The base salaries for 2008 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 2008 annual meeting proxy statement are as follows:
 
Name and Title
 
Base Salary
         
David W. Heeter
President and Chief Executive
Officer of the Company
 
$
247,000
           
Patrick C. Botts
Executive Vice President of
the Company and President and
Chief Operating Officer of the Bank
 
$
200,000
           
Timothy J. McArdle
Chief Financial Officer of
the Company and the Bank
 
$
180,000
           
Steven R. Campbell
Senior Vice President of the Bank
 
$
166,000
           
Steven C. Selby
Senior Vice President of the Bank
 
$
155,500
 

Description of 2008 Bonus Plan 
 
The Company has established a new cash incentive bonus plan for 2008 for all
officers and employees of the Company and Mutual Federal (the “2008 Bonus
Plan”). The quarterly payments will be made if and to the extent the Company’s
quarterly performance in 2008 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 net interest income after provision for loan losses,
non-interest income and non-interest expense, each for the full 2008 year.
 

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The amounts of the quarterly and annual bonuses under the 2008 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 30% to 42% 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 2008 Bonus Plan is incorporated herein by
reference from the Company’s definitive proxy statement for its Annual Meeting
of Stockholders to be held in June 2008, 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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